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Leagues hone in on safetysoundness message

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MADISON, Wis. (2/2/09)--As credit unions assess the proposals from the National Credit Union Administration (NCUA) on stabilizing the corporate credit union system, leagues took the opportunity to hone in on the message of the safety and soundness of credit unions. It's a message that has resounded consistently throughout the nation's economic turmoil the past several months. Last September and October, the nation saw a wave of media attention as credit unions and leagues informed people about credit unions' safety, their soundness, and their willingness to lend in a tightened market. Expect another wave as the Credit Union National Association (CUNA) and leagues help credit unions finetune that message during the latest media attention. The Minnesota Credit Union Network (MnCUN) noted in a press release Friday that despite losses by the corporate system and actions taken by the regulator, "the credit union system overall is healthy and strong." "Locally, Minnesota credit unions have very strong and stable capital ratios," MnCUN said in the release. Their ratio stood at 10.84% in its most recent reporting period as of Sept. 30, compared with 10.78% at the end of 2003, it said. NCUA's definition of "well capitalized," its highest rating, is 7%. "Consumers can rest assured their money is safe in their credit union," said Mark D. Cummins, MnCUN president/CEO. "This recent action taken by the NCUA has no impact on the ability of Minnesota credit unions to continue serving their members." Credit unions, he said, will continue to lend, offer a safe place for members to save, and provide additional services at no or low cost. "Credit unions are lending responsibly and are still actively extending credit in times when many other financial institutions have cut back," he said. "Due to their prudent lending practices and conservative underwriting standards, the economy has not led most credit unions to face the same problems as other lenders these days." The corporate stabilization plan has prompted leagues to reaffirm the safety message for credit unions. They've begun distributing materials to help credit unions answer questions from media outlets or credit union members. The focus of those materials: credit unions are strong and sound. For example, the Association of Vermont Credit Unions(AVCU) noted that credit unions answering media questions can make several points, the foremost of which is "The national credit union system overall is healthy and sound," and "consumers can be assured their money is safe in their local credit union." "Natural person" credit unions…are well capitalized and strong (nearly 11% capital to assets)," said AVCU. The Michigan Credit Union League created a special Web page with information for credit unions about the plan including similar points credit unions can use to point out their soundness. In its Life is a Highway newsletter (Jan. 30), the Pennsylvania Credit Union Association touted the same information "to help credit unions understand and explain the state of credit unions." Just about every state league has a similar message to member credit unions.

KV members want board minutes in bank conversion

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AUGUSTA, Maine (2/2/09)--More than 180 members of KV FCU, an Augusta, Maine-based credit union whose board has proposed a merger with a bank--signed a petition requesting access to the board's minutes leading up to the merger decision. The proposed merger is with August-based Kennebec Savings Bank, a state-chartered bank that recently applied for a federal charter. The proposal to combine a credit union and a bank is the first of its kind in Maine. Nationwide, there have been about 15 completed mergers or mergers still in progress. Members are requesting access to board meeting minutes over several years, from the time the board began considering the merger, member Lucille Clouthier told the Morning Sentinel-Kennebec Journal (Jan. 29). The petition was delivered to the credit union Friday. The group, which opposes the conversion, wants to see how much background work the board did, the reasons cited in the meetings for a merger, and why the $51 million asset credit union is deciding to merge with a bank instead of another credit union, said Clouthier. National Credit Union Administration regulations allow credit union members access to their credit union's records if they collect signatures from 1% of the membership. The credit union has 8,000 members and would need 80 signatures. The credit union must respond to the petition within 14 days after receiving it. KV FCU President Beverly Beaucage told local newspapers that members are invited to review the regulations and the minutes, but she indicated the credit union would not provide information that would breach confidentiality. When the merger proposal was first announced last fall, the credit union said the move would better position it for future growth. The bank applied for a federal charter Jan. 21. The Office of Thrift Supervision has until April 22 to decide on the application.

CU System briefs (01/30/2009)

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* PEORIA, Ariz. (2/2/09)--Alice Jean Maloney Shipe, 97, the widow of former Credit Union National Association Managing Director J. Orrin Shipe, died Jan. 24 in Peoria, Ariz. Shipe is the mother of five children, including two credit union CEOs--James Shipe of First American CU of Casa Grande, Ariz., and Thomas Shipe of Sun Country CU, Sun City West, Ariz. J. Orrin Shipe was also former league president in Arizona. Funeral services were held Friday in Sun City with burial in Madison, Wis. ( Jan. 31) ... * SEWICKLY, Pa., and PHOENIX (2/2/09)--A friendly Super Bowl wager has been struck between PA Healthcare CU, Sewickly, Pa., and Southwest Health Care CU, Phoenix. A Pittsburgh Steelers victory will aid the HeritageValley Sewickly and Heritage Beaver community-based healthcare initiatives. An Arizona Cardinals victory will benefit the Pediatric Center at St. Joseph’s Center in Phoenix. “This is our third such wager over the years and is a great way to showcase how credit unions make a difference in our communities,” said Paul Fero, CEO of PA HealthCare CU (Life is a Highway Jan. 30) … * HARRISBURG, Pa. (2/2/09)--Cross Valley FCU, Wilkes-Barre, Pa., is using its ATMs to promote itself as a community credit union serving members in three counties. The credit union wrapped several ATMs with colorful artwork and its logo. "The newly wrapped ATMs standing in local businesses has provided us with a cost-effective way to advertise our credit union and provide a much needed makeover to machines that are still in good working order," Colleen Phillips, vice president of marketing, told the Pennsylvania Credit Union Association (Life is a Highway Jan. 30) … * YORKTOWN, Pa. (2/2/09)--A man grabbed a money box from two employees of Langley FCU's Yorktown branch as they were preparing to load it with cash. The incident occurred about 9:40 a.m. Thursday. The man fled the scene ( Jan. 30) …

CUs on the Tube Ad turns to history in the making

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TAMPA, Fla. (2/2/09)--GTE FCU, Tampa, Fla., rolled out a commercial Friday that shows the credit union’s 74-year history in the making. GTE created the ad to promote its products and services, and to raise awareness of all credit unions in Tampa Bay. The 60-second spot will air on TV stations in the Tampa Bay market Friday through Sunday during local and national news programs. The commercial first highlights the dark days of the Great Depression, then moves to the 1934 signing of the Federal Credit Union Act by President Franklin Delano Roosevelt, and finally to the credit union’s birth in 1935. With the growing numbers of area residents experiencing financial challenges because of the economy, GTE FCU leaders said that now was the time to raise awareness of why credit unions were created and to emphasize their stability. “We wanted to take a step back to remind people about what makes credit unions so unique,” said Doug Richardson, GTE senior vice president of marketing. Future television ads will expand upon the range of financial products and services available through GTE FCU, the credit union said. GTE FCU has $2.189 billion in assets. To see the commercial, use the link.

New Mexico Little Guy unveiled for campaign

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ALBUQUERQUE, N.M. (2/2/09)--A new customized Little Guy will be unveiled by the Credit Union Association of New Mexico (CUANM) during Credit Union Day at the Legislature Wednesday in Santa Fe. The original Little Guy was developed by the Credit Union National Association (CUNA) in 2007 to symbolize the everyday, hardworking credit union member. The New Mexico Little Guy was a joint project between CUANM communications coordinator Mary Beth King and John Hardiman, an account executive of Demand Printing Solutions, Albuquerque. Other states have personalized the standard icon to better fit their regions. CUNA's Little Guy is a roundheaded man wearing a polo shirt and khaki trousers. King changed his costume to a western shirt, jeans, a cowboy hat and boots, a rodeo belt buckle with the Zia sign from the state flag and a turquoise bolo tie. He clutches another state icon, a red chile ristra. The New Mexico Little Guy, reproduced as cutouts, standups and banners, is the symbol of CUANM's grassroots advocacy campaign. Juan Fernandez, CUANM vice president of governmental affairs, said that the campaign "will spread awareness and educate legislators about the credit union commitment to serving the Little Guy." Other Credit Union Day events include a legislative luncheon followed by candy deliveries to legislators at the Roundhouse. Legislators are special guests at a reception that evening.

WOCCUs Crear named OCDC chairman

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MADISON, Wis. (2/2/09)--Pete Crear, president/CEO of World Council of Credit Unions (WOCCU), has been named chair of the U.S. Overseas Cooperative Development Council (OCDC). He has served on the OCDC board since 2005. Crear's one-year term as chair of OCDC, an association dedicated to applying cooperative techniques to help disadvantaged people in developing countries, began this month. “The goals of OCDC align perfectly with those of World Council in terms of helping the poor in developing countries,” Crear said. “My goal as chairman is to contine expanding those influences in ways meaningful to the goals and objectives of both OCDC and World Council.” OCDC is made up of eight member organizations, all of which have served as international development partners with the U.S. government. OCDC members, of which WOCCU is the only credit union movement representative, currently have multi-year projects in progress in more than 70 countries worldwide. “With a new administration taking office and Congress planning to reauthorize the legislation that guides U.S. policy on foreign assistance, this is a critical time for cooperatives and credit unions to create opportunities for increased emphasis on achieving economic growth through member-owned businesses,” said Rob Nooter, OCDC executive director.

Wisconsin CUs get kudos from state lawmakers

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PEWAUKEE, Wis. (2/2/09)--Lawmakers speaking at the Wisconsin Credit Union League's 2009 State Government Affairs Conference recently shared their appreciation for credit unions and their hard work, according to the Wisconsin Credit Union League in its new online newsletter, The League News (Jan. 30).
Wisconsin Rep. Jason Fields (D-Milwaukee), chair of the state Assembly Financial Institutions Committee, speaks at the Wisconsin Credit Union League's 2009 State Governmental Affairs Conference. (Photo provided by the Wisconsin Credit Union League)
Rep. Tom Nelson (D-Kaukana), Assembly majority leader, talked about contacting a credit union for loan information when his car broke down on a trip to Madison. He noted that relationships credit unions make with lawmakers truly hold public officials accountable, the league reported. "I have been, and continue to be, a supporter (of credit unions) because Al Zierler (Capital CU) and Rick Sense (Community First CU) wouldn't have it any other way," Nelson said. Sen. Dave Hansen (D-Green Bay) cited his longstanding credit union membership and applauded Pioneer CU, Green Bay, for its signage proclaiming, "No bailout here." Credit unions do a great job taking care of people's money and returning it to members when possible, he said. He also praised credit unions for sponsoring youth-run branches inside Wisconsin schools to teach saving and responsible use of financial products. Homebuyers who use credit unions are lucky for avoiding the rash of bad lending practices seen in the nation, Hansen added. He also thanked credit unions for working for those on Main Street, not Wall Street, and said, "You're not too large or too small to fail, you're too smart to fail." Rep. Jason Fields (D-Milwaukee), chair of the Assembly Financial Institutions Committee, talked about his experience as a former branch manager of Guardian CU, was well as in banking and insurance. He emphasized the need to avoid overregulation and mandates that make it more difficult for credit unions to do the many good things they're already doing to prevent foreclosures and more. Fields urged credit unions to be part of the dialogue and solution regarding payday lending, and noted that, as an identity theft victim, he appreciates credit unions' urgency for action on data security legislation. Two other speakers, Senate Minority Leader Scott Fitzgerald (R-Juneau) and Assembly Minority Leader Jeff Fitzgerald (R-Horicon), discussed bipartisan legislation and the upcoming legislation session and the budget process.

Joe Knows Mortgages campaign touts experience

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CHARLOTTE, N.C. (2/2/09)--Executives of Carolina Postal CU (CPCU) turned to a familiar face to spearhead a campaign to help ease any fears their members might be experiencing due to a troubled economy. “We wanted to promote our strong, secure mortgage program in 2009. What better way to do that than show off our most experienced and well-known employee, Senior Mortgage Loan Officer Joe Jones,” said Joy Watts, CEO of CPCU (Weekly Update Jan. 26).
The ‘Joe Knows Mortgages’ campaign at Carolina Postal CU, Charlotte, N.C., uses an experienced senior mortgage loan officer to spearhead a campaign to help alleviate any fears its members may have about a troubled economy. (Photo provided by North Carolina Credit Union League)
Jones has been a part of CPCU for more than 17 years. “We were brainstorming on what was going on in the mortgage industry, how to answer members’ concerns about their mortgages, their financial situation, and every time we had a question it was ‘let’s ask Joe,’… ‘why don’t we call Joe’…. or ‘Joe knows,’” said Watts. “We finally turned to our marketing vice president and said …. well … what do you think about using Joe in a promotion?” “I loved it,” said Deb McLean, vice president of marketing and business development. “I’ve worked with Joe at the U.S. Postal Service and member functions in the past, and to our members, Joe is a rock star,” she said. But while Joe has the knowledge and capability to front the campaign, the $65 million asset, Charlotte, N.C.-based CPCU knew it couldn’t rest the entire campaign on his shoulders. He may be the face of the campaign, but he has a team of account managers to assist him. “We came up with a ‘Team Joe’ concept,” said McLean. “[We] had a lot of fun playing off a ‘Petticoat Junction’ theme with our account managers--they all have nametags with their names listed as Chrissy-Joe, Lindsay-Joe, Maddie-Joe.” McLean also sent out a YouTube video of “Petticoat Junction” since some younger staff weren’t familiar with the show, a situation comedy than ran from 1963 to 1970. Initial reaction has been positive to the point of being overwhelming, the credit union said. “When the first postcard went out to our members, Joe got 98 voice-mails in one week,” said McLean. “Many were teasing or just congratulatory, but most were ‘Oh yes, please help me understand my situation.’” When a follow-up e-mail blast went out the next week, Joe received 78 voice-mails and multiple e-mails in one day. The biggest challenge? “Joe takes his reputation with the members seriously and wanted to follow up personally with every single response,” Watts said. “We had to encourage him to rely on his Team of Joes to help out with the initial response.” “Joe Knows Mortgages” will run for three months, and if the response continues to be strong, the campaign will be incorporated throughout 2009 with other CPCU loan products. “This campaign truly supports the credit union difference,” Watts said. “In a time when long-term, experienced employees are being laid off by corporations with a misguided attempt to impact their bottom line, we celebrate and promote our experienced employees and their depth of financial knowledge because they are the ones who will make a positive difference to our members.”

Keystone opens student branches with foundation grant

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WEST CHESTER, Pa. (2/2/09)--Pennsylvania Credit Union Foundation Executive Director Joe Wambach presented a $10,000 grant to Keystone FCU, West Chester, and three local high schools for three new student branches.
From left, Michelle Merkley, director of marketing and business development for Keystone FCU; Deb Tobin, business teacher, Henderson High School; and Joe Wambach, executive director, Pennsylvania Credit Union Foundation, during a presentation of a $10,000 grant to the credit union and three high schools for building three new student branches. (Photo provided by the Pennsylvania Credit Union Association)
The student branches are strategically located near each school’s store or the student cafeteria to afford maximum convenience for student transactions, noted Rick Dunlap, principal of East High School; Jason Sherlock, assistant principal of Bayard Rustin High School; and Deb Tobin, business teacher of Henderson High School (Life is a Highway Jan. 28). Speaking about the firm relationship between the credit union and the three schools were: Keystone FCU Representatives Michelle Merkley, director of marketing and business development, who developed the project; Chuck Jackson, director of information technology, who established the computer linkage; and Jose Colon, director, lending and member services. They also discussed with school officials the possibility of expanding the classroom education component to all students in the schools. The three facilities bring the total of operating-credit-union-student branches in Pennsylvania to 21. Keystone FCU has $69.3 million in assets.

SECU testifies on mortgage help to members

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RALEIGH, N.C. (2/2/09)--Phil Greer, State Employees’ CU (SECU) senior vice president of loan administration, testified before a North Carolina legislative body about providing mortgage help to members, according to the North Carolina Credit Union League. With the North Carolina General Assembly poised to come back into session, Greer appeared before the Joint Study Committee on Housing, which wrapped up its work with a final meeting on Jan. 26 (Weekly Update Jan. 30). “In today’s economy, helping members has become even more important, as there are some members who are experiencing significant financial difficulties due to income impairment,” Greer told the committee. He shared ways that SECU helps members who have lost their jobs and face foreclosure. SECU meets face-to-face with each member dealing with foreclosure to find a solution, including partial payment options and loan extensions. “We’re prepared to make mortgage-loan adjustments and investigate all opportunities to assist members,” said Greer. "We have long felt that foreclosure is often as much the fault of the lender as it is the borrower,” Greer told the committee. “You would not choose a surgeon who has a high failure rate. We believe consumers should be advised to look at the failure rate, which in this case is the foreclosure rate, of the lender as well.” The committee approved a number of recommendations for proposed legislation during the upcoming session. "Providing support for folks that have lost their jobs and are facing foreclosure will certainly be a focus of the North Carolina General Assembly this session,” said Dan Schline, league senior vice president of association services. “We are pleased that the committee had the opportunity to hear today about the good work that SECU is doing here in North Carolina.” Raleigh, N.C.-based SECU has $16.4 billion in assets.

Data theft sparks another debate about standards

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MADISON, Wis. (1/30/09)--Credit unions monitoring the Heartland Payments Systems data breach may wonder how it happened to such an extent that an estimated 100 million cards might be compromised. The breach has reopened the debate about security standards, and several experts are questioning whether the Payment Card Industry Data Security Standard (PCI DSS) is enough. The PCI standard is a set of security controls mandated by major credit card companies Visa and MasterCard for companies handling or processing credit and debit card information. The Heartland breach, like a Hannaford Bros. breach in 2008, involved data enroute to a payments system. Both companies were apparently compliant with PCI DSS. Hannaford had been deemed compliant by the credit card companies about three months before it announced its data breach. Heartland, based in Princeton, N. J., was certified by Trustwave, a PCI assessor, as PCI -compliant in April, according to Gartner analyst Avivah Litan (NetworkWorld Jan. 22). Because it is a payments processor, as opposed to a retailer or merchant, Heartland is expected to have stronger controls for preventing, detecting and responding to system breaches, said ComputerWorld Jan. 22). The breach apparently occurred when hackers planted a "sniffer" code for malware aimed at capturing information as data moved through Heartland's network and removing the data from the network in encrypted data streams. How could such a thing happen? Litan suggested to ComputerWorld that Heartland may not have routinely monitored its files' integrity for unauthorized content. Others say it may not have used all the security controls required by the PCI standard, such as analyzing its log data from its firewalls and intrusion prevention systems. Litan told NetworkWorld that PCI doesn't mandate encryption inside a private network because then all the processors would have to encrypt. But, she added, the complex interconnections among payment card processors, financial institutions and merchants would make point-to-point encryption unwieldy. End-to-end application level encryption, however, might be more feasible at the origin of the card data. Some retailers encrypt data in motion inside their store networks but then have to decrypt the information to send it to their processors. The Heartford breach "should make one thing clear: the standards for security around credit card numbers still aren't good enough," said Luther Martin, a solution architect with Voltage Security, writing in Help Net Security Jan. 29. The PCI standard "is a good first step, but it's not quite enough," he said. However, that doesn't mean that the standard has grown irrelevant, according to tech writer George Hulme in InformationWeek's Security Weblog (Jan. 27). "Being compliant to any mandate won't make one secure," Hulme wrote, adding that building a secure and sustainable infrastructure is important. Retailers, manufacturers and health care providers typically have the least mature security programs, he said. Still, the PCI standard has raised the security level, especially in the retail industry. But, Litan said, the payments processors are "definitely being targeted."

NCUAs package gets national media attention

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MADISON, Wis. (1/30/09)--The National Credit Union Administration's corporate stabilization plan generated nationwide press coverage Wednesday and Thursday. Many picked up stories from Associated Press and Reuters news services. Among those publishing reports were The Wall Street Journal (Jan. 28), Bloomberg (Jan. 28), The New York Times (Jan. 28), Washington Post (Jan. 29), CNN (Jan. 28), and MarketWatch (Jan. 28). To view the reports, use the links.

Pa. CUs see loan growth despite economy

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HARRISBURG, Pa. (1/30/09)--Pennsylvania credit unions are experiencing an increase in loans and certificate accounts, said the Pennsylvania Credit Union Association (PCUA). A favorable front-page article in the Monday issue of the Eastern Pennsylvania Business Journal uncovers the secret of the credit union difference and explains how credit unions assist consumers during difficult economic times (Life is a Highway Jan. 28). Brian Wilcox, chief marketing officer for First Commonwealth FCU, Bethlehem; Francesca Vogel, vice president of strategic planning, Sun FCU’s West Lawn branch; and Mike Wishnow, PCUA senior vice president, communications and marketing, contributed to the article. Wilcox said his credit union “saw a flight to safety as people wanted security the stock market wasn’t offering.” Some deposits came from large banks. First Commonwealth experienced an 18% growth in money market accounts; 14% increase in individual retirement accounts; and 11% growth in certificates of deposit. The credit union also gained 4,200 new members. Vogel said Sun FCU saw a 7.7% increase in loans over the previous year, and deposit growth was up 11.6% over 2007. Credit unions are uniquely positioned, Wishnow said. “They had no role in the mortgage crisis. At the same time, credit unions are very well-capitalized. It’s not surprising they have money to lend,” he explained.

N.H. banking commissioner nixes 365-APR loan

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CONCORD, N.H. (1/30/09)--New Hampshire's banking commissioner rejected a proposal for a new "small loan" product from Advance America, the nation's largest payday lender, saying that a 365% annual percentage rate (APR) on a small loan constitutes an unfair trade practice and would be "unlawful." "Generally this was seen as an attempt by the payday lender to work around the 36% interest rate cap law that the New Hampshire legislators had put in place," Rob Kimmett, senior vice president of marketing and public relations of the New Hampshire Credit Union League, told News Now. The state law was passed last year. So far, 15 states and the District of Columbia have enforced annual interest rates in the range of 36% to stop predatory lenders from ensnaring borrowers in high-interest loan traps, according to the Center for Responsible Lending. "It's business as usual when payday lenders try to circumvent state law, but time and time again aggressive state enforcement shows that this is a futile effort," said Uriah King, policy associate with the center. "The New Hampshire Banking Department's bold action should serve an example to policy makers and those charged with enforcing consumer protections in other states," King said. The commissioner, Peter Hildreth, said the proposed product did not meet fairness requirements specified by the Federal Trade Commission and the state Unfair and Deceptive Acts and Practices regulations. He termed small loans with 365% interest as "oppressive." Payday lenders had claimed that the new product was a small loan and didn't fall under the payday and car-title lending law. However, Hildreth said the argument is moot. "The unfairness was not that the loans were called payday or title loans. The unfairness was because of the interest-rates charged," he said. Advance America said it would comply and withdraw from the New Hampshire market as a result.

HarborOne multicultural center a model says NCUF

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BROCKTON, Mass. (1/30/09)--HarborOne CU’s Multicultural Banking Center had such a productive year in 2008 that the National Credit Union Foundation (NCUF) said it could be a model for credit unions nationwide to provide social and financial services.
A class of students attend a first-time homeowners workshop at Harbor One CU's Multicultural Banking Center in Brockton, Mass. (Photo provided by HarborOne CU)
NCUF became interested in the concept when the $1.7 billion asset, Brockton, Mass.-based credit union joined NCUF’s REAL Solutions program through the Massachusetts Credit Union League, said Steve Bosack, NCUF deputy director. The center opened in September 2007 in the former headquarters of the credit union in downtown Brockton. It was established to deal with the consequences of subprime mortgage lending and other predatory financial practices. Those most affected were low- and moderate-income residents, minorities and immigrants. The space was converted into two classrooms and a computer lab. Four HarborOne staff members were assigned there. Office space was made available free to non-profits offering complementary services. In September 2008, the NCUF Grants Committee approved a $100,000 Innovation Grant for HarborOne CU, the largest Innovation Grant approved by NCUF that year. The $100,000 will be paid by NCUF to HarborOne CU in installments throughout this year. After the grant expires in January 2010, HarborOne CU will provide a report outlining how it met its goals. The report also will feature personal success stories of people who attended classes and joined the credit union. NCUF will share the report with REAL Solutions league liaisons and the entire credit union movement. In 2008, the center offered six courses in English for Speakers of Other Languages, four in credit counseling, eight in financial literacy--in four languages. Five First-Time Home Buyer Workshops were conducted in four languages. It also offered eleven pre-foreclosure clinics, one for citizenship test preparation and one for computer literacy. A total of 569 students attended the 28 programs. Neighborhood Housing Services, one of the non-profit occupant partners, assisted 991 residents through home buying, foreclosure education and/or closing cost assistance. Through its efforts, Brockton’s rank in statewide foreclosures improved from first to fourth. South Shore Housing Development Corp. helped some residents with rental assistance, and Self Help Inc. provided fuel assistance. The center also received the Massachusetts league’s 2008 Maxwell Award for Social Responsibility. HarborOne also received a fifth consecutive highest “Outstanding” rating from the state Commissioner of Banks for performance under the Community Reinvestment Act. The commissioner’s report praised the credit union for its innovative practices at the center. January has seen these trends continue with new courses quickly filled to capacity. Recently, HarborOne announced that it was collaborating with Self Help Inc. to offer free Volunteer Income Tax Assistance at the center. “The city and the area still have a way to go, but it is gratifying to note the appreciation of these communities for providing these essential services,” said James W. Blake, HarborOne president/CEO. “Education is the great tool to fight financial predators. We want people to realize that if it looks too good to be true, it probably is too good to be true. The more trust we build, the greater the number of referrals we witness to our programs.”

Minn. lawmakers CUs are bedrocks of community

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ST. PAUL, Minn. (1/30/09)--Amid national economic troubles and a dismal state budget forecast, lawmakers called credit unions are the “bedrocks” of their communities at the Minnesota Credit Union Network’s (MnCUN) Credit Union Day at the Capitol Tuesday.
Minnesota State House Speaker Margaret Anderson Kelliher (D-Minneapolis) said at the Minnesota Credit Union Network’s Credit Union Day at the Capitol Tuesday. (Photo provided by the Minnesota Credit Union Network)
Minnesota State House Speaker Margaret Anderson Kelliher (D-Minneapolis) and Senate Minority Leader David Senjem (R-Rochester) both praised credit unions for their member service. “Despite life’s circumstances, you know your credit union will always be there for you and that’s what separates us from the banking industry--we’re all about people,” he said. During a discussion about the state’s dire budget forecast, Senjem said, “Over my dead body, we aren’t going to tax credit unions.” Senjem and Kelliher encouraged credit unions and their members to tell legislators if they have any ideas to solve the deficit. This year’s Credit Union Day drew 160 credit union volunteers and professionals who shared the credit union difference with elected officials. The event was themed, “Safe. Sound. Secure.” “Each year, Credit Union Day at the Capitol serves as the unofficial launch for credit union involvement in the legislative session,” said Mark Cummins, MnCUN president/CEO. “This year, more than ever, it will be imperative for credit unions to develop and build upon their relationships with legislators. “Through these connections, we will be able to ensure that elected officials know that credit unions are part of the solution--not the cause--of this recession,” he added.

Web-only CU to launch in May

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ROCKVILLE, Md. (1/30/09)--Realtors FCU, the first Web-only credit union, is set to open in early May, with a potentially “huge” field of membership, according to Realtors FCU CEO Tom Glatt. “We will have to work extremely hard to manage growth,” he told News Now. The credit union’s field of membership will comprise members of the National Association of Realtors (NAR), their families and staff. NAR has 1.2 million registered members nationwide. Because there are so many potential members throughout the country, “it never made sense to establish a branch network,” Glatt said. Members will perform all transactions--from account sign-up to lending applications--on the Web. A 24-hour call center through Digital Dialogue, now Total Member Care, will be available. Realtors FCU will primarily offer fee-free checking. Other services include consumer, auto, and mortgage loans. Realtors plans to offer a full range of services, but there are some limitations. For instance, the credit union will offer share certificates for only up to one year, Glatt said. With online-only services, security will be the credit union’s biggest challenge. “We have to be the latest and greatest to be compliant,” Glatt said. “We have to have the means built in so who we’re dealing with at the other end of the mouse is who they say they are.” Skeptics have questioned Realtors FCU’s timing because the housing market is troubled. “People say it’s the worst time,” Glatt said. “But [realtors] need us right now. That’s our stated purpose. This is exactly the time. “They’re good people and they make a living helping us find a house. [The economy] is doubly tough on them as consumers and on their jobs,” he added. Realtors FCU received its charter last November, but the idea for the credit union has been around for eight years. “Dale Stinton [CEO of NAR] kicked around the idea for a long time,” Glatt said. NAR supported the credit union’s start-up with a $15 million gift. Creating a Web-only credit union has been a learning process not just for Glatt and his staff, but also for Realtors’ vendors. Most vendors’ systems are set up to convert systems, instead of starting systems. “It’s a very interesting process,” Glatt said. “Our vendors have been great.” “We have a great relationship with the National Credit Union Administration--they’re working with us to make sure we do this right,” he added. Realtors’ Web-only model will be the first of its kind, but not likely the last. “We want to help other credit unions expand their electronic services,” Glatt said. “We’re all credit union people--we’re willing to share.”

Class action suit filed in Heartland breach

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TRENTON, N.J. (1/30/09)--A class action lawsuit had been filed against payment processor Heartland Payment Systems over the data breach it publicly announced Jan. 20. The breach affected credit unions and their members nationwide. The lawsuit was filed Tuesday in U.S. District Court for the District of New Jersey in Trenton, N.J., by Chimicles & Tilellis LLP of Haverford, Pa., on behalf of Alicia Cooper, a Woodbury, Minn., resident. The suit alleges that Heartland “made unreasonable, belated and inaccurate statements concerning the breach” (Bank info Security Jan. 29). The complaint further alleges that Heartland isn’t offering any credit-monitoring services or other relief to consumers affected by the breach. The complaint also says “there are materially misleading statements and omissions in Heartland’s public description of the breach and its consequences.” To view the lawsuit filing, use the resource link. The information breached included card numbers and cardholders’ names. It did not include merchant data, cardholders' Social Security numbers, unencrypted personal identification numbers, addresses or telephone numbers, said the Princeton, N.J.-based company in a press release last week (News Now Jan. 21). Heartland provides card processing services for 250,000 business locations nationwide, most of them small businesses. About 40% of the transactions it processes are from small to mid-sized restaurants nationwide. It also serves community banks, pay-at-the-pump gas stations, school campuses, parking lots and hospitality businesses. It handles more than four billion transactions a year, according to its website. Last week, media nationwide reported that credit union members were among those whose accounts were impacted by the far-reaching breach (News Now Jan. 26). A number of credit unions said they would block the compromised cards and reissue them to protect their members from fraud. Also last week, CUNA Mutual Group announced it is providing guidance to its Plastic Card Insurance policyholder credit unions regarding the breach. CUNA Mutual sent a RISK Alert Jan. 20 to nearly 5,000 Plastic Card Insurance policyholders. The alert provides recommendations for credit unions to mitigate losses (News Now Jan. 22).

CU System briefs (01/29/2009)

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* JACKSON, Miss. (1/30/09)--Mississippi credit unions have contributed $41,000 to Credit Unions for Kids during 2008, announced the Mississippi Credit Union Association. CUs for Kids benefits the children's hospitals in the Children's Miracle Network. The top credit union fundraiser was Jackson Area FCU, Jackson, which raised more than $7,700. "Our staff and members worked very hard last year in making our goal of $7,000, which we exceeded even in tough economic times," said Gary Fairley, the credit union's president/CEO. Since joining the CUs for Kids program in 1999, Mississippi credit unions have contributed more than $280,000 to Children's Miracle Network hospitals serving Mississippi children. Thirty credit unions in the state participated in the 2008 program … * SAN ANTONIO (1/30/09)--Gordon Dames has been appointed senior vice president of national account development for San Antonio-based Southwest Business Corp. He is the former president/CEO of Mountain America CU, Salt Lake City. Dames will be responsible for helding credit unions improve revenues and efficiencies with SWBC products, services and strategies (San Antonio Business Journal Jan. 29) … * RALEIGH, N.C. (1/30/09)--A credit union attempted-robbery suspect, who holed up in a woman's home after his getaway car crashed, is charged with first-degree murder for scaring the woman to death. The woman, Mary Parnell, 79, went into cardiac arrest while Larry Whitfield, 20, was hiding out at her home. Authorities said Whitfield and an accomplice, both armed with semiautomatic rifles, planned to rob the Gastonia, N.C., branch of Fort Wayne, Ind.-based Fort Financial CU. However, the credit union staff saw the men approaching and locked them outside. The men split up after their getaway car crashed. The accomplice was arrested shortly after the crash; Whitfield was arrested while walking in the neighborhood. If convicted, he faces life without parole (Associated Press Jan. 29) …

Boat broker pleads not guilty to swindling CUs

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GRAND RAPIDS, Mich. (1/29/09)--A former boat broker accused of defrauding banks and credit unions in Michigan of $27 million pleaded not guilty Tuesday in a U.S. District Court in Grand Rapids, Mich. Michael Vorce, former owner of Michigan West Yachts, is charged with a 15-count indictment related to convincing two credit unions and eight banks to loan him millions for boats that didn't exist in a "Ponzi" scheme (Grand Rapids Press Jan. 28). Among the 10 institutions defrauded are Lake Michigan CU, which lost $4.7 million, and Michigan State University FCU, which lost $4.7 million. Other institutions lost from $200,135 to $9.2 million. The bank fraud charges each carries a maximum sentence of 30 years in prison and $1 million in fines. Vorce also is charged with three counts of money laundering, one count of wire fraud, and one count of aggravated identity theft. About $9 million of the stolen funds has been recovered.

Bay FCU closes Salinas branch reorganizes

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CAPITOLA, Calif. (1/28/09)--Bay FCU is closing its Salinas, Calif., branch and scaling back its plans for growth because of current economic conditions. The branch had opened two and a half years ago. Six of the eight employees at the branch have found employment at other branches. Two others could be offered other positions later, the Capitola-based credit union told (Jan. 27). Bay Federal said it has laid off about 30 employees or 13% of its staff--leaving the credit union with 189 employees--because of the spiraling economy (The Mercury News and Jan. 27). The $654 million asset credit union had grown steadily until the recession. President Carrie Birkhofer told the Mercury News that the credit union provided staff with "exceptional packages."

U.S. Central to release 08 financials next week

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LENEXA, Kan. (1/29/09)--U.S. Central FCU announced Wednesday that it expects to report its 2008 financial results next week. The Lenexa, Kan.-based wholesale corporate credit union also said the results will include an unaudited net loss of roughly $1.1 billion due to charges for other-than-temporary impairments (OTTI) of $1.2 billion. Excluding the OTTI charge, U.S. Central said it would have recorded net income of about $119 million for the year ended Dec. 31, 2008. "U.S. Central's estimated 2008 loss is based upon mark-to-market adjustments to our portfolio of residential mortgage-backed securities, resulting from the adverse economic environment, the severe illiquidity of such assets in today's market and the current accounting treatment of such assets," said Francis Lee, CEO. "Despite the reported loss, these securities continue to perform as expected, providing U.S. Central with monthly cash flow in the form of regularly scheduled principal and interest payments," Lee added. "We continue to maintain a strong conservative portfolio, but like other financial institutions with substantial mortgage-backed portfolio holdings, we have not been immune to drastic and deteriorating financial conditions of last year, particularly during the fourth quarter," he said. Lee noted that "U.S. Central remains committed to its long history of providing essential services to its members and the credit union system. We will remain an important source of liquidity and support to the Corporate Credit Union Network."

Missouris HFOT efforts will continue says MCUA

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ST. LOUIS (1/29/09)--Missouri credit unions will get the opportunity to help build a home for a severely injured veteran in the state, said the Missouri Credit Union Association (MCUA). Homes for Our Troops (HFOT) is searching for a deserving veteran to receive the specially adapted home. (The Missouri difference Jan. 28). MCUA said it would notify credit unions with project information and updates as they become available. Credit unions in the state are continuing fundraising for the program. Electro Savings CU, St. Louis, has a number of activities, including:
* Allowing members to cash-out reward points for donations to HFOT, with 1,000 points equaling $10; * Hosting a trivia contest in the spring; * Launching Centiments, a campaign where members donate the cents on a check they're cashing or depositing to HFOT; * Selling in each branch paper "bricks" that will be assembled on a cut-out house; * Selling T-shirts and polo shirts to staff and members; and * Asking each office to find a unique way to contribute.
"Like most credit unions, we are proud that our staff is always willing to support various charities throughout the year," said Eric Hardman, vice president of finance. HOFT, however, "has touched many of us through one of our employees, Josh Eckhoff. Josh was a teller for our main office when he was called by the National Guard to serve in Iraq," Hardman said. "During his tour, Josh suffered severe head injuries when he was struck by an IED (improvised explosive device). It is Josh and the efforts of all the other U.S. soldiers that makes our credit union willing to support such a charity."

Economy begins to hit CU loan quality

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MADISON, Wis. (1/29/09)--The economic, credit and housing crisis is beginning to affect credit union loan quality, said Steve Rick, Credit Union National Association (CUNA) senior economist. The credit union overall loan delinquency rate rose to 1.42% by December from 0.96% in July. With the national unemployment rate expected to rise from its current level of 7.2% to 9% by year-end, the credit union delinquency rate could hit 2% this year--the highest since 1986, Rick said. December statistics show that credit union loans outstanding increased 0.48% for the month, ending the year with a 7.6% increase, compared to increases of 0.5% and 6.5% during the same periods last year, according to the CUNA monthly sample of credit unions.
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Fixed-rate first mortgages led loan growth, increasing 3.3%, followed by increases in credit card loans (3%), home equity loans (1.3%), unsecured personal loans (0.7%), and used auto loans (0.5%). Adjustable-rate mortgages decreased 3.1%. “According to CUNA's monthly survey of credit unions, credit union balance sheets increased 7.5% in 2008 despite the ongoing recession, up from 6% the year earlier,” Rick said. “Fast-growing mortgage portfolios pushed up credit union loan balances by 7.6% in 2008, up from 6.5% in 2007. “The fog of uncertainty floating over banks’ asset values and capital levels is restraining their willingness to extend credit for both residential and consumer loans,” he added. “Credit unions are filling this void since many do not face similar capital constraints.”
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Credit union savings balances increased 0.4% to $700 billion in December from $697 billion in November. Overall year-to-date growth increased to 7.3% during 2008 from 5.1% in 2007. Individual retirement accounts led savings growth, rising 2.4%, followed by increases in one-year certificates (1.1%) and money market accounts (1%). Regular shares and share drafts decreased 0.5% and 2.3%, respectively. The loans-to-savings ratio remained relatively constant, inching up to 83.7% from 83.6% in November. The liquidity ratio rose slightly, to 16% from 15.8% in November. Regarding asset quality, credit unions’ 60-plus day delinquencies edged up to 1.4% from 1.3% in November. The movement’s overall capital-to-asset ratio remains at 11%, with the total dollar amount of capital at $90 billion. “Credit unions also stretched their balance sheets in 2008 by increasing their borrowings by $14 billion, a 49% increase from December 2007,” Rick said. “This dollar increase was exactly matched by a $14 billion increase in their investment portfolios, which rose 6.7% over the year. Credit unions bought more longer-term investments last year. The percent of the investment portfolio with less than a one-year maturity fell to 55% from 61%.”

Tampa op-ed to Obama Use charities CUs

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TAMPA, Fla. (1/29/09)--An opinion editorial urges the Obama administration to consider charities and credit unions in providing assistance in its economic stimulus package. It mentions specifically credit unions and the National Federation of Community Development Credit Unions. The article, in Sunday's was written by Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins University and former deputy associate director of the U.S. Office of Management and Budget. Salamon notes that more than one million nonprofit organizations exist, with 11 million paid employees and countless volunteers. "Those organizations have a critical role to play in sustaining families and communities during the hard climb to recovery…," he said. He detailed three ways the government could help nonprofits step in to help the economy, including earmarking funds from the Troubled Assets Relief Program to nonprofit housing and community development organizations to help low-income homeowners avoid foreclosures. He cited the availability of a "powerful and effective alternative mechanism"--the network of nonprofit community development credit unions, finance institutions and housing organizations. "They already manage billions of dollars of mortgage loans in low-income areas with delinquency rates that their high-flying for-profit competitors would now die for," he wrote. For the 230 members of the federation, delinquency rates on mortgages loans are at only 3.1% of assets, compared with the 18.7% national average on subprime loans, he said. His other two proposals involved creating a $3 billion to $5 billion matching grant program for nonprofit soup kitchens, homeless shelters and other service organizations; and adopting emergency incentives for private giving and volunteering. For the entire article, use the link.

CU System briefs (01/28/2009)

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* NAPERVILLE, Ill. (1/29/09)--About 70 Illinois Credit Union League (ICUL) and ICUL Service Corp. employees participated in recent wellness screenings the league offered its employees. The screenings measured blood pressure, body mass, cholesterol levels, and other concerns. The league plans to offer flu shots to staff in the fall and host two blood drives. Each event usually draws about 20 individuals, the league said ... * ATLANTA (1/29/09)--CDC FCU, Atlanta, donated more than $14,000 to the Children’s Miracle Network, beating its goal to raise $10,000. About 75% of the donation came from internal contributions from employees. The credit union also held monthly fundraisers. The money will fund medical services at children’s hospitals such as Children’s Healthcare of Atlanta. CDC FCU has $162 million in assets ...

CUNA Mutual Group joins Invest in America

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MADISON, Wis. (1/29/09)--CUNA Mutual Group joined credit unions nationwide Wednesday with supporting initiatives for purchases made from automakers General Motors and Chrysler Corp. through the “Invest in America” program. The credit union loan program includes nearly 8,000 credit unions nationwide and makes available $80 billion in credit union auto loans for new-vehicle purchases. The national program with Chrysler runs through June 30, and layers on top of recently announced Employee Pricing. GM’s national program runs through March 31, but it has extended the program in Michigan, Illinois, Indiana and Ohio to June. The states were part of the pilot program. CUNA Mutual is offering added incentives, including:
* Free online auto loan applications (for credit unions) through CUNA Mutual’s; * Discounts on quick, automated decisions on loan applications; * A discount of up to a 25% for participation in CUNA Mutual’s target marketing program, which identifies creditworthy members who may be in the market for a new vehicle, based on the life of their existing auto loan.
“Participating in the Invest in America program is a natural extension of our continued commitment to credit unions,” said Kevin Lentz, CUNA Mutual senior vice president of Service Product Lines. “It’s also a great way for CUNA Mutual to do its part to stimulate the economy.” The “Invest in America” program offers supplier pricing on new GM vehicles and rebates of $500 or $1,000 on eligible Chrysler, Jeep and Dodge vehicles. The discounts are offered in addition to most cash incentives both manufacturers are offering. CUcorp, a wholly owned subsidiary of the Michigan Credit Union League (MCUL), created and coordinated the program with GM and Chrysler. “As one of the largest and most influential companies servicing the credit union market in the U.S., CUNA Mutual Group’s support will give another major component to this important campaign to boost domestic auto sales,” said David Adams, president/CEO of CUcorp and MCUL. “This is another example of broad credit union industry support for U.S. automakers and our national economy.”

CUNA Brokerage names women of distinction

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MADISON, Wis. (1/29/09)--CUNA Brokerage Services Inc. is honoring 22 credit union financial advisors as “Women of Distinction” to recognize their performance, value to their program, client service and overall contribution to the financial services industry and CUNA Brokerage Services. Qualifying financial advisors not only exemplified the characteristics of the award, but earned $250,000 or more in gross dealer concessions in 2008. Recipients will participate in a mentoring program offered through CUNA Brokerage Services to foster the growth of women who are new to the financial services industry. Jim Metz, senior vice president of Asset Management at CUNA Mutual Group, said of the recipients, “Their contributions to CUNA Brokerage Services, the financial services industry and to the women they mentor are key to our overall success.” Developed by women for women, the award debuted in 2008 to recognize top female financial advisors and introduce the mentoring program. This year’s Women of Distinction are:
* Catherine Barnes, VyStar CU, Jacksonville, Fla.; * Emmor Boslet, Belco Community CU, Harrisburg, Pa.; * Jane Brockway, University of Illinois CU, Champaign, Ill.; * Kathy Chesney, Pacific Marine CU, Camp Pendleton, Calif.; * Diane Clark, Fibre FCU, Longview, Wash.; * Linda Cohen, Coast Central CU, Eureka, Calif.; * Wendy Cundari, California Coast CU, San Diego; * Terry D’Amico, Teachers FCU, Farmingville, N.Y.; * Carol Diest, First Community FCU, Parchment, Mich.; * Judith Ebert, Ascentra CU, Bettendorf, Iowa; * Marcella Evans, T&C FCU, Pontiac, Mich.; * Ruby Evans, Chartway Investments & Insurance; * Judy Evers, Baxter CU, Vernon Hills, Ill.; * Leigh Glover, Southeast Financial FCU, Franklin, Tenn.; * Kelly Goreham, Veridian CU, Waterloo, Iowa; * Breta Grumbois, Fibre FCU, Longview, Wash.; * Paula McCauley, East Texas Professional CU, Longview, Texas; * Wendy Miletich, Wings Financial FCU, Apple Valley, Minn.; * Stephanie Morales, Arizona Central CU, Phoenix; * Sophia Spencer, Red Canoe CU, Longview, Wash.; * Suzi Williams, Yakima (Wash.) Valley CU; and * Emily Windolph, WEOKIE CU, Oklahoma City, Okla.
CUNA Brokerage Services uses face-to-face financial advisors to help credit unions meet member retirement, investment and insurance needs.

IHuffingtonPostI blog Transform banks to CUs

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MADISON, Wis. (1/29/09)--The time has come for the U.S. to nationalize large banks and model them after credit unions, according to a HuffingtonPost blog posted Tuesday. Middle-class taxpayers are not benefiting from ongoing financial industry bailout deals, Mike Garibaldi-Frick, founder of, wrote on the blog. By nationalizing banks and having them follow the credit union model, the government would be able to better “regulate bank lending practices so that interest rates on mortgages, credit cards and other loans will more closely match bank borrowing levels,” he added. “Banks are no longer the community-based institutions they were decades ago,” Garibaldi-Frick wrote. “Credit unions have taken over as the cooperative financial institutions that invest in their own members’ lives and businesses. Most credit unions offer a variety of services--including financial/bankruptcy counselors--to help members experiencing difficult financial circumstances to stay in their homes and remain solvent.” If enough people discover the benefits of credit unions, banks would be out of business--and banks fear credit unions for this reason, he added. “If you would like to take a stand against the greed of the banking industry and these current bailouts, consider putting your money in a credit union instead. Even The Wall Street Journal recognizes that credit unions are better places to borrow money and store your savings. Plus credit unions are largely untouched by the subprime debacle. It’s time to take control of your financial destiny, America,” Garibaldi-Frick concluded.

CU System briefs (01/27/2009)

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* (1/28/09)--Two Pennsylvania credit union CEOs--Carrie Wood of Timberland FCU, Du Bois, and Diane Kendrick of Priority First CU, Brookville--outlined the credit union difference as guest speakers on WCED Radio's "Community News with Gary Stormer." The program is sponsored byLt. Gov. Joe Scarnati, a former state senator. They discussed the origination of credit unions, membership eligibility at both credit unions, and advantages of credit union membership versus going to other financial institutions. they also dispelled myths about credit union membership and share insurance (Life is a Highway Jan. 27) … * CINCINNATI, PIKETON and BROOK PARK, Ohio (1/28/09)--Three Ohio credit unions have changed their names. Atomic Employees CU, Piketon, simplified its name to Atomic CU. Cincinnati Postal Employees CU changed its name to Postal Family CU, effective Dec. 31. Reward One CU, Brook Park, changed its name to Best Reward CU, effective Dec. 31 (eLumination Newsletter Jan. 21) … * CHARLOTTE. N.C. (1/28/09)--A woman who was out on bond related to charges of eight armed robberies at motels and convenience stores in Asheville, N.C., was arrested, along with her brother, shortly after a failed robbery attempt Jan. 20 at Charlotte (N.C.) Metro CU. Crystal Chevon Logan, 25, and her brother, Alfred Logan Jr., 29, were each charged with robbery with a dangerous weapon and conspiracy to commit robbery with a dangerous weapon. Local media reported Crystal Logan allegedly walked into the credit union, told the teller she had a bomb, and tried to rob the credit union. She left empty-handed and fled to a car allegedly driven by her brother. She had posted $50,000 bond in Asheville on Jan. 8 after being charged in the other robberies, which occurred last fall. Bond was set for Crystal Logan at $350,000 and for Alfred Logan at $300,000 in the latest incident ( Jan. 22) …

CDCU coalition offers free tax prep to low-incomers

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NEW YORK (1/28/09)--A coalition of community development credit unions (CDCUs) will offer Volunteer Income Tax Assistance (VITA) sites funded by a grant from the Internal Revenue Service (IRS) to help low-income consumers file their tax returns. The National Federation of Community Development Credit Unions VITA Coalition was the only credit union-exclusive group to receive funds from the IRS. The coalition plans to file 5,000 returns this year. Nine credit unions--including Ka’u FCU, Na’alehu, Hawaii--are hosting VITA sites for the first time. Ka’u FCU is launching mobile VITA sites to help senior citizens and others with limited mobility receive their tax rebates. “Many people don’t realize the extent of poverty that exists in Hawaii. We have many people in our area who don’t know that they can file taxes and receive tax credits, particularly those in senior homes,” said Ka’u manager Bernard Balsis. NRS Community Development CU, Birmingham, Ala., also is hosting a site. “It’s important for low-income earners not to use predatory tax preparers,” said Eunice Rogers, NRS Community CEO. “We want them to take home every penny they have worked so hard for throughout the year.” Other credit unions participating in the coalition are:
* Alternatives FCU, Ithaca, N.Y.; * ASI FCU, Harahan, La.; * Border FCU, Del Rio, Texas; * Communicating Arts CU, Detroit; * District Government Employees FCU, Washington, D.C.; * El Futuro CU, Porterville, Calif.; * Family FCU, Wilmington, Calif; * Halifax County Community FCU, South Boston, Va.; * OUR FCU, Eugene, Ore.; * Santa Cruz (Calif.) Community CU; * Tongass FCU, Ketchikan, Alaska; * Triumph Baptist FCU, Philadelphia; * Winthrop (Mass.) CU; and * Women’s Southwest FCU, Dallas.
“Credit unions have a special advantage as VITA sites,” said Cliff Rosenthal, federation president/CEO. “A community member looking for free tax preparation may find that the credit union also can serve many of their financial needs, with checking and savings accounts, low-cost refund anticipation loans and financial literacy education.” The federation provides financial services to low-income urban and rural communities and represents more than 230 CDCUs nationwide.

WOCCU-supported CU law passes in Kenya

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NAIROBI, Kenya (1/28/09)--Kenyan President Mwai Kibaki has signed into law legislation to regulate and support the country’s credit unions, known as savings and credit cooperatives (SACCOs). The bill, passed by the Kenyan Parliament Nov. 14, is the result of several years of efforts by World Council of Credit Unions (WOCCU), the Kenya Union of Savings and Credit Co-operatives Ltd. (KUSCCO), WOCCU’s member organization, the Pennsylvania Credit Union Association (PCUA) and several of its member credit unions. “This is a significant step for Africa’s SACCO movement,” said Brian Branch, WOCCU’s executive vice president and chief operating officer, who helped spearhead the initiative six years ago. “SACCOs have grown quickly and are major providers in Kenya’s financial market. As such, they have come under increased popular pressure for greater levels of prudential supervision designed to protect SACCO members.” The new legislation updates frameworks for SACCO safety and soundness, and for the services they offer, enabling them to compete on more even footing with the country’s banks. The law, which stalled in the parliament for the past three years, establishes a regulatory authority for SACCOs. Kenya’s financial services industry regulations were previously lax. New provisions will establish a deposit guarantee fund, require SACCOs to meet certain liquidity requirements to remain competitive, and allow SACCOs to offer money transfers and diversify revenue sources. WOCCU continues to work to strengthen SACCO operations and create a healthier regulatory environment in Kenya, Branch said. Rising food prices and civil unrest make access to financial services for the poor even more critical. WOCCU served as an information and advocacy resource to those writing the bill. As part of those efforts, it also brought Kenyan government officials to the U.S. to meet with representatives from the National Credit Union Administration, the National Association of State Credit Union Supervisors and PCUA. Representatives from PCUA and American Heritage FCU, Philadelphia, and Service 1st FCU, Danvilla, Pa., traveled to Kenya to advocate on behalf of stronger, more credit union-appropriate legislation with Kenya’s Parliament.

Wisconsin league testifies at safe-soundness hearing

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PEWAUKEE, Wis. (1/28/09)--Representatives from the Wisconsin Credit Union League and a credit union testified Wednesday about the safety and soundness of credit unions at a state legislative committee hearing. They also distributed a new annual report on Wisconsin credit unions. The Senate Committee on Financial Institutions is gathering information to gain a Wisconsin perspective on the condition of the banking and real estate sectors of the economy. Presenting testimony were Joanne Whiting, chief advocacy officer for the league, and Jim Schrimpf, president of Brewery CU, Milwaukee. Whiting's testimony noted that credit unions' first major membership expansion occurred during the Great Depression, "when unemployment stood at 22% and people flocked to credit unions as a source of mutual support. "Today we're seeing renewed interest in credit unions for much the same reason--many financial firms have failed or just disappeared and people facing a tough economy are pulling back, wondering who they can trust. That's where credit unions come in," said Whiting. She noted that credit unions didn't get involved in subprime lending and remain strong, well capitalized and a continued source of affordable loans. In the auto loan arena, premier automakers General Motors and Chrysler Corp. "recognized credit unions recently as our nation's premier auto lenders," Whiting said, referring to credit unions' new "Invest in America" auto loan program. Credit unions have been part of the solution to the ailing housing market, with 62% of credit unions saying they have refinanced other lenders' mortgages to prevent foreclosures and bought the members some time, Whiting said, noting that member deposits are insured by the National Credit Union Administration. Wisconsin credit unions were the first in the country, she said, to spearhead the REAL Solutions program to encourage saving and building wealth, increase financial literacy, build creditworthiness and improve the lives of families and their communities. She outlined a number of REAL Solutions initiatives in the state. The annual report distributed at the hearing is a new report that provides a snapshot of how the state's credit unions delivered value to communities and 2.2 million members in 2008. The report says Wisconsin credit unions saved members $188 million during the 12 months ending in September, largely due to more competitive rates on savings and loans, and lower and fewer fees. To view the testimony or the annual report, use the resource links.

TCUL corporate address economy on Blog Radio

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FARMERS BRANCH, Texas (1/28/09)--Texas Credit Union League CEO Dick Ensweiler will be in the studio with Brian Turner, director of advisory services for Southwest Corporate Investment Services, Feb. 19 on Blog Talk Radio--a social radio network specializing in enabling users to connect quickly and directly with their audience. The second installment of Ensweiler’s “Your Money, Your Matters” program will address the current economic conditions and their impact (LoneStar Leaguer Jan. 27). Ensweiler and Turner will discuss the declining stock market, the rising unemployment rate, the subprime-mortgage meltdown and other issues during “The Economy: What’s on the Horizon for American Families?” Speaking on a variety of credit union issues, Ensweiler and Turner will address consumer concerns, while also commenting on the recent inauguration of President Barack Obama and how the change of power may affect consumers’ perceptions of their future financial circumstances. The live program begins at 4 p.m. (CST) Feb. 19. Once the program begins, listeners may “chat” with one another, and pose questions for the speakers online or via call-in.

Pacific Service CU philanthropy aided 60000 in 08

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WALNUT CREEK, Calif. (1/28/09)--In 2008, Pacific Service CU donated more than $130,000 to non-profit organizations throughout Northern California. The funds affected the lives of nearly 60,000 people, according to the credit union.
Click to view larger image During 2008, Pacific Service CU, Walnut Creek, Calif., donated more than $130,000 to non-profit organizations throughout Northern California. Funds donated impacted the lives of nearly 60,000 people, according to the credit union. (Photo provided by Pacific Service CU)
"It is important to our organization to make a positive impact on the lives of individuals needing assistance in the communities where we do business," said Steve Punch, president of the more than $1 billion asset credit union. "People Helping People has long been the cornerstone of our industry, " he said. "We put that sentiment to work at an actionable level in supporting our local communities.” Through its Community Involvement Program, which it launched in 2001, the credit union has given more than $1 million to area charities and estimates it has touched the lives of 386,000 people. As an ongoing program funded annually by the credit union’s board, the program focuses its efforts primarily on organizations that assist low-income and at-risk individuals, especially children. “In 2008 the need at our local levels is higher than we have seen in prior years,” Punch said. “And during these tough economic times, our employees also wanted to help, so they contributed their own time and money.” Pacific Service CU employees made individual contributions to The Food Bank of Contra Costa and Solano County’s Buy-A-Bag program, The Salvation Army’s Toy Drive, and The Bay Area Crisis Nursery’s Decorate a Tree program. During 2008, the credit union made contributions to 28 non-profit organizations. In addition to monetary contributions, the credit union also donates equipment it is retiring from service, such as PCs and furniture to non-profit organizations for use in after-school or training programs.

Maine first lady lauds CUs effort against hunger

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WESTBROOK, Maine (1/28/09)--At a time when food pantries are seeing a hike in requests for food, Maine’s credit unions celebrated “thawing” out hunger in the state at the January Thaw to End Hunger Celebration Event Monday at the Maine Credit Union League.
Click to view larger image From left, Maine’s first lady, Karen Baldacci; John Murphy, president of the Maine Credit Union League; and Luke Labbe, president/CEO of PeoplesChoice CU, Biddeford, and chair of the league’s Social Responsibility Committee, announce the record-setting total raised by the 2008 Maine Credit Unions’ Campaign for Ending Hunger. (Photo provided by the Maine Credit Union League)
Credit unions were recognized at the annual event for raising a record total for the Maine Credit Unions’ Campaign for Ending Hunger. Credit unions raised $375,296.59, an increase of nearly $10,000 over last year’s record. All funds raised stay in Maine, and go directly to the cause of ending hunger. Maine’s first lady, Karen Baldacci acknowledged the accomplishment. She applauded credit unions for their efforts, calling credit unions “locally-focused and committed to Maine people.” The first lady also read a letter from Gov. John Baldacci that said, “At a time when many Maine families are struggling, it is heartening to see our credit unions answering the call in so many ways.” Baldacci also helped distribute checks to credit union representatives who will then give the money to their local food pantries and hunger organizations. “The 2008 Maine Credit Unions’ Campaign for Ending Hunger not only had a record- setting year but it formed new relationships with food pantries across the state. These enhanced efforts are extremely important, as food pantries are seeing a significant increase in requests during these difficult times,” said Jon Paradise, league governmental and public affairs manager. Since 1990, the Maine Credit Unions’ Campaign for Ending Hunger has raised more than $3.1 million.

CU showcases inner city services for NCUA chairman

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SOUTH BEND, Ind. (1/28/09)--National Credit Union Administration (NCUA) Chairman Michael Fryzel visited CommunityWide FCU, reinforcing and praising the South Bend, Ind.-based credit union’s efforts to provide financial services, counsel and education to its inner-city members.
Click to view larger image From left, Indiana Credit Union League President John McKenzie; CommunityWide FCU Chief Operating Officer Andrew Burggraf; Head Teller Jen Robinson; National Credit Union Administration Chairman Michael Fryzel; CommunityWide FCU Regional Manager Shannon Anders; Loan Operations Manager Melissa Luchowski; Member Services Manager Judy Murphy; Regional Manager Cindy Burggraf; Administrative Assistant Deb Krempec; and Accounting Manager Paula Rajski gather during Fryzel’s recent visit to the credit union. (Photo provided by the Indiana Credit Union League)
Fryzel visited the credit union earlier this month. CommunityWide Chief Operating Officer Andrew Burggraf, and Indiana Credit Union League President John McKenzie hosted the meeting. “I am extremely impressed with CommunityWide FCU’s innovative and energetic approaches to member service,” Fryzel said. “This credit union is clearly having a positive impact in its community by providing fairly priced financial services and financial education to low- and moderate-income consumers.” Fryzel met with credit union staff who oversee lending. Discussion covered the credit union’s lending philosophy of taking extra time to look at the big picture--even if the borrower’s credit score is lower than preferred--to explore if there is still a basis for approving a loan. Burggraf said that Fryzel’s “Interest and input regarding our business model and effectiveness in serving all sectors of the community was very timely as we implement our pro-growth strategy by opening other full-service offices in other communities outside the South Bend area. “While other industries are struggling with economic downturn, CommunityWide is forging ahead with its mission of serving our members’ interests with quality financial products, convenient full-service locations, and the pursuit of fine member service,” he added. Fryzels’ conversation with CommunityWide FCU staff covered the credit union’s history, its approach to serving its members and its operating strategies. CommunityWide FCU was created in 1967 to serve inner city residents of South Bend. Seed money was provided by the Catholic Church. A significant portion of the credit union’s membership comprises minorities. It has been successful in serving the Hispanic community in South Bend since the 1980s, said the league. CommunityWide FCU offers payroll loans and other small loans that help members avoid the high costs of traditional payday loans. Fryzel’s visit also focused on how the credit union grew from $1.7 million in assets in the early 1980s to $181 million today. CommunityWide accomplished this by emphasizing its mission of offering financial services at a minimum expense, along with financial counseling and education, while marketing primarily through word of mouth and the visibility of new branches placed in areas close to neighborhoods. CommuntyWide’s growth included mergers with seven small credit unions as those employee groups were impacted by economic downturns and plant closings.

CUs incentive plan helps Vermont immigrants save

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BURLINGTON, Vt. (1/27/09)--A Vermont credit union is helping recent immigrants learn to save with an incentive--with free movie tickets. Opportunities CU, a $27.4 million asset credit union in Burlington, Vt., says that everyone is feeling the negative effects of the economy but recent immigrants are especially vulnerable, reported WCAX-TV News (Jan. 24). The station interviewed three teens, new to this country, who opened their first savings accounts at the credit union. They brought their instructor, who teaches English as a Second Language at a local high school, to assist in the paper work. They plan to save for college while learning English. Members who make a savings deposit each month of any amount--be it one dollar or $10-- will get two movie tickets to a local theatre every three months, Jeremy Brown of the credit union told the station. The credit union serves low-wealth individuals.

Citadel FCU offers reward against arson spree

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HARRISBURG, Pa. (1/27/09)--A Thorndale, Pa., credit union is contributing to a reward fund set up for the town of Coatesville, which has experienced 15 fires caused by arson since the year began. Citadel FCU, Thorndale contributed $1,000 to the Coatesville Reward Fund, as a reward to anyone offering information that leads to the arrest of those responsible. The credit union has also set up an account for additional contributions. The latest fire, last weekend , destroyed 15 row homes in Coatesville, Pa., leaving dozens of families homeless and City Council declaring a state of emergency, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 26). "Many members of our credit union have been affected by both the physical destruction of these meaningless fires, as well as the continuing fear that they have caused," said Jeff March, president/CEO of the $1.086 billion asset credit union. "Firefighters are exhausted, neighborhoods are constantly on watch, and there is a mounting frustration that is hitting us all," he told PCUA. He encouraged local businesses and citizens to "lend a hand during this time of need."

Maryland fin lit ed task force to make its case today

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COLUMBIA, Md. (1/27/09)--Members of the Maryland Governor's Task Force on Financial Literacy today will petition the Maryland State Board of Education in Baltimore to require all public schools in the state to include financial literacy education in their K-12 curriculum. Credit unions have two representatives on the task force: Bert Hash, president/CEO of MECU, Baltimore, and Thom Beck, president/CEO of Montgomery County Teachers FCU, Rockville. Hash is also a board member with the Maryland and District of Columbia Credit Union Association (MDDCCUA) (FOCUS Newsletter Jan. 26). The task force will make a presentation to the board today and ask for additional teacher training as well as a means of assessing the effectiveness of the delivery of financial literacy content in schools, said MDDCCUA. The task force plans to ask the board to act on the request before the end of the school year. Most school systems in the state give students the option to choose financial literacy as an elective. Of those, about 2% to 10% of students select that option. At least 90% of graduating students in those systems have little or no exposure to financial literacy programs, said MDDCCUA.

IN.Y. TimesI advertorial features CUs CUNA

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NEW YORK (1/27/09)--Over the past decade on average, credit unions have charged about 1% less on loans than have banks and paid out on average 1% more in interest on certificates, Dan Mica, president/CEO of the Credit Union National Association, said in a three-page advertorial published Monday in The New York Times. The reason, he added, is that credit unions are not about boosting share values for stockholders and paying them dividends, but about serving members. "We talk about the 'credit union movement.' There is a philosophy behind what credit unions do. We are about helping people," Mica said. Nationally, about 8,000 credit unions serve 90 million members. "We are Main Street, not Wall Street. Credit unions are financial services' best-kept secret," Mica told the Times. The advertorial, "Rock-solid credit unions hunt for more borrowers," hit home the point that credit unions don't make risky loans and have plenty of money to lend and that they do make mortgage loans. Richard Maxstadt, chief operations officer of CUC Mortgage, an affiliate of the Credit Union Association of New York, pointed out that the prevailing credit union approach is to lend on the basis of personal knowledge of the borrower. As a rule, credit unions are conservative in their lending, Maxstadt said. "Our loans tend to be plain vanilla, primarily 20- and 30-year fixed rate. Too many consumers forget that credit unions do make mortgages," he said adding credit unions offer some of the best rates around. Stan Hollen, CEO of CO-OP Financial Services, based in Rancho Cucamonga, Calif., noted that its network "underlines the cooperative nature of credit unions. It is the biggest ATM network in the country--no bank has anywhere near our number of locations--and for our individual members, there are no fees." "Big banks like to talk about their convenience, but when you look into it, credit unions offer a lot more convenience than any bank does," Hollen said. He noted the cooperative nature of the industry means there's a relative lack of competition between particular credit unions. "Often they work together to benefit everybody." Bob Siravo, CEO of WesCorp FCU, San Dimas, Calif., in discussing services, noted credit unions are pushing into new territory with many looking at how to provide service over cell phones. Credit unions are poised for a hugely successful run amidst the turmoil in financial services in 2009 because consumers are fleeing to safety and looking at credit unions, said Jeff Russell, vice president, The Members Group, based in Des Moines, Iowa. CUNA Mutual Group Vice President Jim Buchheim agrees that in difficult times, people turn to who they trust--"and for many Americans, that will mean credit unions." The full page advertorials was surrounded by paid ads from CO-OP Financial Services, CUC Mortgage Corp., CUNA Mutual Group, WesCorp, and four credit unions.

Deadline for Wegner dinner extended through Friday

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WASHINGTON (1/27/09)--Credit union leaders and supporters have until Friday to register for the 21st Annual Herb Wegner Memorial Awards Dinner, presented by the National Credit Union Foundation (NCUF) Feb. 23 during the Credit Union National Association’s 2009 Governmental Affairs Conference (GAC). The ceremony will present four of the credit union movement’s highest national honors:
* Lifetime Achievement Award: Bill Sterner, late president/CEO, Elevations CU, Boulder, Colo. Sterner traveled internationally to help credit unions learn to serve the underserved; * Individual Achievement Award: Rita Haynes, treasurer and manager of Faith Community United CU, Cleveland. Haynes assisted members who have filed for bankruptcy; * Individual Achievement Award: Tom Sargent, president/CEO, First Tech CU, Beaverton, Ore. Sargent’s leadership on the Credit Unions for Kids campaign helped credit unions gain visibility worth hundreds of millions of dollars in paid advertising; and * Outstanding Organization Award: Montana Credit Unions for Community Development in Billings, Mont. The five-year-old organization already has helped more than 50,000 people avoid predatory loans, keep more of their earned income, and open their first savings accounts.
NCUF Awards and Recognition Chairman Bob Schumacher, CEO of MountainCrest CU, Arlington, Wash., will be Master of Ceremonies at the event. Seats can be reserved online through the NCUF website. Use the resource link.

Washington state CUs introduce data breach bill

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FEDERAL WAY, Wash. (1/27/09)--In the wake of the Heartland Payment Systems data breach announced last week, Washington state's credit unions once again have introduced legislation to encourage financial institutions to take "extraordinary proactive steps" to protect consumers from identity theft and financial fraud after a breach.
Click to view larger image Washington State Rep. Brendan Williams, the prime sponsor of the Washington Credit Union League's data breach bill HB 1149, introduces the proposed legislation to the state House Financial Institutions and Insurance Committee. (Photo provided by the Washington Credit Union League
Receiving its first hearing before the Full House Financial Institutions and Insurance Committee hearing Thursday, HB 1149 is sponsored by State Reps. Brendan Williams (D-22), Dan Raoch (R-31), Geoff Simpson (D-47), Steve Kirby (D-29), Hans Dunshee (D-44), Sharon Nelson (D-34) and Timm Ormsby (D-33). Like a similar proposal last year, the bill would allow credit unions and other financial institutions to sue negligent data breachers for the cost of aggressively protecting Washingtonians' personal and private information. Some of the state's financial institutions have reported that more than half their card base is affected by the breach of Princeton, N.J.-based Heartland Payment Systems, a company that completes about 100 million transactions per month for more than 250,000 merchants. According to the Washington Credit Union League, most credit union leaders believe that the breach's effect during the initial days is just the tip of the iceberg, and they've begun to notify members, block accounts, reissue cards and numbers, and provide ongoing fraud monitoring--standard operating procedures after a breach. "The state's credit union community is appalled, but unfortunately not very shocked by the immense size of the Heartland data breach," said league President/CEO John Annaloro. "In far too many cases, negligent data breachers do business as if they were immunized from liability when they fail to protect their customers' personal information. In our view, if someone's careless actions result in a financial loss to others, they should have to pay it." Taking aggressive steps to protect members from financial fraud and identity theft is becoming cost prohibitive, the league said, because the frequency and size of data breaches is skyrocketing. A financial institution pays roughly $20 per card, depending on the extent of the action taken. The total doesn't include costs associated with staff time, which can be as much as 30 minutes per card, or the negative impact a breach has on a financial institution's reputation. "While there are processes that are supposed to provide some reimbursement for fraud losses, the truth is that these processes only recoup pennies on the dollar," said Stacy Augustine, league senior vice president in charge of government relations. "More important, the costs that are recouped don't pay anything toward costs associated with a financial institution's proactive steps to protect consumers from fraud and identity theft," she said. Rep. Williams, the bill's prime sponsor, stated in a letter to colleagues last year that financial institutions--as opposed to negligent actors who breach their customers' security--end up footing the bill after a data breach is reported. He noted there should be some sanction for gross negligence that compromises credit and debit card information. Last year's bill died when it didn't come out of committee. It was opposed by a number of industries, including the Washington Bankers Association and the Community Bankers Association of Washington. "Credit unions hope that our for-profit banker counterparts will take a pro-consumer position on this new legislation," said Annaloro. "I have no doubt that had this consumer protection legislation made it to a vote on the floor of the Senate, the state's financial institutions would be aggressively and proactively protecting all of our state's consumers from financial fraud and identity theft in the wake of the Heartland data breach."

N.Y. CUs A lifeline for mom and pop businesses

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NEW YORK (1/27/09)--Four New York City credit unions are participating in Affordable Loans for Immigrants, which offers business loans to immigrants who live or work in the city, while big banks are cutting loans to “mom and pop” businesses because of the financial crisis. The program makes business loans, ranging from $500 to $500,000, available to immigrants in the city’s five boroughs (New York Daily News Jan. 25). Brooklyn (N.Y.) Cooperative FCU approved a $15,000 loan for emergency repairs so Esmeralda Valencia could reopen Esmeralda’s Restaurant. The $7.4 million asset credit union approved the loan in three days after the restaurant’s exhaust fan broke. Other New York City credit unions participating in the program include: the $22.6 million asset Lower East Side Peoples FCU, the $8.2 million asset Union Settlement FCU, and the $7.5 million asset Neighborhood Trust FCU. While some immigrants fear going to banks because they don’t have Social Security numbers, the credit union will work with them if they qualify for loans and obtain Individual Taxpayer Identification Numbers, the newspaper said. The credit unions have money to lend. Most of the money Lower East Side People’s lends belongs to members, Linda Levy, credit union CEO, told the paper.

Minn. foundation gives 155000 to kids hospital

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ST. PAUL, Minn. (1/27/09)--Minnesota Credit Union Foundation representatives presented Gillette Children’s Specialty Healthcare a check for more than $155,000 Jan. 20.
Representatives from the Minnesota Credit Union Foundation present a check to Gillette Children’s Specialty Healthcare for more than $155,000. From left, are: Marty Kelly and Katie Grindeland, CU4Kids co-chairs; Nick Nelson, patient at Gillette Children’s Hospital; Kristi Mukomela, chair of the Minnesota Credit Union Foundation; and Mark D. Cummins, president of the Minnesota Credit Union Foundation. (Photo provided by the Minnesota Credit Union Foundation)
The money was raised in 2008 by the Minnesota Credit Union for Kids (MnCU4Kids) committee, which is a subcommittee of the Minnesota Credit Union Foundation. In 2008, MnCU4Kids worked with credit unions statewide to raise money for Gillette, Minnesota’s Children’s Miracle Network-affiliated hospital. The volunteer committee coordinated large- and small-scale fundraisers including: a summer golf tournament, Bowl-O-Rama, Chain of Hearts, and an interactive basketball contest involving bungee cords. Individual credit unions also coordinated their own fundraisers such as cookouts, candy bar and popcorn sales, and casual days. “Through the cooperative efforts of the Credit Union for Kids committee and credit unions across the state, the committee surpassed its fundraising goal and donated more than $155,000 to the hospital,” said Kristi Mukomela, chair of the foundation. “Minnesota credit unions’ active support of the Children’s Miracle Network demonstrates their commitment to helping people in the communities they serve.” MnCU4Kids also received support from several local and national companies that work with credit unions, including CO-OP Financial Services. CO-OP Financial Services matched $20,000 in funds raised at the committee’s golf tournament and its basketball fundraiser held at the Minnesota Credit Union Network’s annual meeting. Supporting MnCU4Kids in 2008 was one part of CO-OP Financial Services’ broader efforts. It also donated $1 million to Children’s Miracle Network hospitals through its Miracle Match program. All money raised through the MnCU4Kids program supports Gillette Children’s Specialty Healthcare, which helps children with disabilities and chronic conditions. Gillette is based in St. Paul, with clinics located statewide. Credit Unions for Kids is a national program, and is endorsed by nearly all 50 state credit union leagues.

S. Korean CUs collaborate on IT to expand growth

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MADISON, Wis. (1/27/09)--South Korea's 994 credit unions began using a single, centralized information technology (IT) system at year-end 2008 to serve their combined five million members.
Participants in World Council of Credit Union’s (WOCCU) December visit to South Korea included, from left, CUNA Mutual Group’s Paul Treinen, National Credit Union Federation of Korea Training Center Director Kwangtaek Choi, WOCCU’s Dave Grace and Motorola Employees CU Kris Kim.
The unified approach to technology, a daunting proposition for many credit union movements, is the latest step in a collaborative approach that characterizes South Korea's credit unions, says the World Council of Credit Unions (WOCCU). “Credit unions have grown on the basis of co-existence, faith, honesty and trust for nearly half a century,” said Oh-man Kwon, president and chairman of the National Credit Union Federation of Korea (NACUFOK), the country's credit union trade association and central liquidity facility that houses the IT system. “We have made ceaseless efforts to improve the social and economic status of common people and Korea's middle class since the movement began in 1960.” The first credit unions migrated to the new IT system in early December during a visit from Dave Grace, WOCCU vice president of association services, and Kris Kim, vice president and controller for Motorola Employees CU (MECU), Schaumberg, Ill. Shared technology is just the latest collaborative effort that has helped South Korea's credit union movement grow, said Grace. “Credit unions in many countries are looking for ways to centralize operations and gain national brand recognition common within the banking industry without sacrificing local ownership and the member service touch,” Grace said. “South Korea has done that and is serving its members with great success.”
Common signage and bright colors identify South Korean credit union branches. (Photos provided by World Council of Credit Unions)
The most visible byproduct of the credit unions’ efforts is a unified marketing program that positions the cooperatives under one common brand. South Korean credit unions still operate as individual, member-driven financial cooperatives, but their position in the markets they serve rival those of the largest banks. With common signage and similar products and services, the credit unions maintain a distinct member-service approach. Credit union collaboration helps the institutions to capture greater market share without sacrificing their traditional “personal touch,” Grace said. South Korea's credit union movement, which will celebrate its 50th anniversary in 2010, has grown to serve 13.5% of the country's population. The country ranks third in size of membership (five million), after the U.S. (90 million members) and Canada (10.9 million members), according to WOCCU's 2007 Statistical Report. The growth can be credited both to the nature of the South Korean family and the credit union movement's collaborative efforts, Kim said. “Koreans are very family-oriented,” said Kim, who was born in South Korea in 1959 and emigrated to the U.S. in 1972. “If the father joins the credit union, chances are the entire clan will follow suit. Once they're members, Koreans are not likely to change institutions.” South Korean credit unions have followed a similar unified approach in their development, which will give the movement strength and reach that otherwise would not be available. Kim added that credit union strength will only increase now that all institutions operate from the same centralized IT location. "Each individual credit union operates almost like a service center that's part of the larger credit union system,” Kim explained. “The movement has gained tremendous operational and strategic efficiency through continued collaboration. U.S. credit unions may be too individualistic to ever cooperate at such a high level, but I think there are components we could adopt from the Korean model.”

CU System briefs (01/26/2009)

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* HARRISBURG, Pa. (1/27/09)--A former CEO of the now-defunct Greater Harrisburg (Pa.) Community CU was sentenced Friday to five months in federal prison and five months' house arrest. Carl Payne, 67, who also was CEO of the Harrisburg Housing Authority until his indictment in 2007, pleaded guilty to making false statements to the U.S. Department of Housing and Urban Development with intent to defraud and conspiracy to make the false statements. He also was ordered to pay a $10,000 fine plus $50 in fees. U.S. Middle District Court Judge John E. Jones III noted that this was the only blot on Payne's 35-year career of helping low-income people (Life is a Highway Jan. 26 and Jan. 23) ... * MONTPELIER, Vt. (1/27/09)--NorthCountry FCU, South Burlington, Vt., and Vermont FCU, Burlington, are the first Vermont institutions to join the CO-OP Network's national shared-service center program (Newslines Express Jan. 23). "This is a landmark event in Vermont's financial services industry," said Association of Vermont Credit Unions President Joe Bergeron. He added, "You won't find this cooperative spirit and collaboration anywhere else in the financial services industry." The two credit unions already have begun processing shared-branch transactions on a limited basis, with full service expected in the upcoming weeks. Pictured are Vermont FCU President/CEO Bernard Isabelle, left, and NorthCountry FCU President/CEO John Benoit. (Photo provided by the Association of Vermont Credit Unions) ... * WICHITA, Kan. (1/27/09)--Boeing Wichita CU will change its name to Meritrust CU, effective Feb. 1. The credit union had considered changing its name since 1994, when it first opened membership to non-Boeing employees. When Boeing sold its commercial division and became Spirit AeroSystems, people were confused. To combat that confusion, the credit union became known as BWCU. The change to Meritrust was announced earlier this year, but the credit union decided to take advantage of a tie-in with media attention surrounding this weekend's Super Bowl, President/CEO Bob Corwin told The Wichita Eagle (Jan. 25). The $587.5 billion asset, Wichita-based credit union started as Stearman Employees CU in 1936 Jan. 25) ... * LUTHERVILLE, Md.(1/27/09)--First Financial of Maryland FCU plans to open its third student-run high school branch, this time at Eastern Technical High School in Baltimore County, said the Maryland and District of Columbia Credit Union Association. The Maverick Branch, named for the school's mascot, will open at the start of the 2009-2010 school year. The school recently was deemed a Silver Medal School by U.S. News & World Report in an article, "America's Best High Schools." The student run branches operate in an off-line environment with final processing of transactions taking place at the main office of the credit union. The credit union's other student-run branches are in Dundalk High School and Lansdowne High School (FOCUS Newsletter Jan. 26) ...

CUs rev engines on Invest in America

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LANSING, Mich. (1/26/09)--Although the hard numbers won't be available until February, the Michigan Credit Union League reports "a ton of action" on the website created for "Invest in America," credit unions' auto loan discount program with auto manufacturers General Motors Corp. and Chrysler Corp. "There are two ways to look at it," said Michael Bridges, director of public affairs. "Since the program went national, we have seen more than 350,000 unique page views. Another way to look at it is the website has seen 2.2 million hits in the first two weeks of the program, or 3.6 million since the program was rolled out in December." CUDL is reporting that 8,000 GM and Chrysler vehicles have been sold to credit union members. And GM reports it is seeing a 30% conversion rate on the number of people asking for a "Credit Union Member Discount" certificate to those actually buying a car, Bridges told News Now. To generate further interest in the program, two 15-second ads ran last week on the Jumbotron at the North American International Auto Show in Detroit. "We are in the process of putting a tracking component together" to monitor the progress in sales, Bridges said. "We hope to have some hard numbers in February." Meanwhile, in Indiana, one of the four original Midwestern states in the program's pilot with GM, about 2,500 individuals registered for the program during the first week, said Kay Neidlinger, spokeswoman for the Indiana Credit Union League in Jan. 23). Of that number, about 1,500 obtained a discount code certificate and more than 150 bought vehicles. The discounts are so attractive, they could end up increasing credit union membership, but the purpose of credit union participation is to offer existing members a good deal on one of credit unions' cornerstone products, auto loans, said Neidlinger. The Louisiana Credit Union League reported it's receiving "positive feedback from members" regarding the Invest in America program and a "high volume of calls from credit unions concerning participation in the program," reported its newsletter, eNews (Jan. 14). Several credit unions in New Jersey are participating in the program, according to Paul Gentile, CEO of the New Jersey Credit Union League in an article in (Jan. 16). ADP FCU in Roseland, Riegal FCU in Milford, and Paragon FCU in Montvale will soon offer the program's incentives. Richard Rays, CEO at Paragon FCU plans to promote the program in the February edition of its member newsletter. "We have our staff calling dealers to let them know we are participating," he said. "The trick is to make those loans to people who will have the income to repay those loans." Paragon plans to cut its interest rate to as low as 4.99% , from its current rate of as low as 6.5% for qualified borrowers. The national credit union loan average is 5.4% , according to Datatrac, a firm that tracks auto loan rates. The average bank rate is 6.9%. In New Jersey, many credit unions already have marketing alliances with auto dealers through Credit Union Auto Group, which includes 50 dealers. Kensington Valley Community CU (KVCCU), Highland, Mich., has tied the program to its 50-year-anniversary celebration. "In addition to our already great rates, our members could qualify for up to 2.75% discount on a 24- to 50-month auto loan," Linda McCoy, KVCCU lending manager, told (Jan. 15). According to Mike Long, vice president of lending at UW CU in Madison, Wis., the credit union is participating in the program because is "presents a great opportunity for our members. Not only do they have a chance to save money on most GM and Chrysler vehicles, but they can also feel the satisfaction of helping support the U.S. auto industry." For Northeast CU, Portsmouth, N.H., the program is a no-brainer. "The new program comes during a challenged economy and that is why NECU is pleased to extend this to our members," said Peter Kavalauskas, president/CEO. Giving back to members while helping the domestic auto industry also is the reason Citadel FCU, Thorndale, Pa., is encouraging its members to use the loan deals. Citadel has no trouble generating auto loans. During the last few months of 2008, it originated more than $100 million in auto loans to the local community.

More CUs report Heartland breach impact

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MADISON, Wis. (1/26/09)--Throughout the day Friday, media were reporting about credit unions whose members were among those whose accounts are impacted by the far-reaching data breach at Heartland Payment Systems. The Association of Vermont Credit Unions (AVCU) said that the breach has already affected 6,000 cards at credit unions on the association's ATM/debit card program, as well as thousands more at other Vermont credit unions (Newslines Express Jan. 23). AVCU said it learned of the developing breach from its processor on Jan. 9, more than a week before Heartland issued its press release on Inauguration Day. AVCU "immediately began passing along what we learned of the developing situation to credit unions. We also began working with CU CheckCard credit unions, our processor Fifth/Third Processing Solutions, and MasterCard to deactivate and reissue compromised cards. To date, the number of compromised CU CheckCards already stands at approximately 6,000," AVCU said. That compares with 6,500 CU CheckCards that were cancelled or reissued last year in the wake of a data breach at Hannaford Bros. groceries. In Dayton, Ohio, Wright-Patt CU was contacted Thursday by Heartland with names of affected cardholders at the $1.380 billion asset credit union. About 15% of the credit union's cardholders were affected, Wright-Patt Vice President Jeff Carpenter told Dayton Daily News (Jan. 23). Members who receive a new card will have two weeks to activate it before the old card is deactivated. Two weeks allows the credit union to balance reducing the financial risk to the credit union with giving cardholders who are out of town a chance to activate their cards, he said. Several Maine credit unions, who were hit hard by both the Hannaford Bros. and TJX Cos. breaches the past two years, were told by Visa and MasterCard that fraudulent charges were placed on members' cards between mid-May and mid-August last year, Jon Paradise, spokesman for the Maine Credit Union League, told (Jan. 22). About 500 Visa credit and debit cards issued by PeoplesChoice CU, Saco, Maine, might have been compromised, said Luke Labbe, president/CEO, in the same article. He estimated that 50 to 60 members had fraudulent charges on their cards. The credit union had noticed a pattern of small charges at gas stations in the South followed by a larger charge of about $500 at a nearby Wal-Mart. Labbe said the credit union had been experiencing losses since October but didn't know where they were coming from. CU Community CU, Springfield, Mo., told local media the breach may have affected 350 members. So far, thieves have charged $11,000 through 16 cards, but the credit union prefers to play it safe and cancel and reissue new cards to avoid fraud risks ( Jan. 22). In Washington State, Boeing Employees' CU (BECU) had no spike in suspicious activity and it doesn't know yet if members are affected. However, another credit union, Washington State Employees CU confirmed some of its members are affected, but it doesn't know yet the extent and how many (Seattle Post-Intelligencer Jan. 23). And in Olympia, Wash., Thursday, lawmakers were discussing a bill to protect financial institutions from bearing the cost of such breaches. If a security breach involves 5,000 or more accounts, the third-party company that was breached would be required to reimburse the organization whose customers are affected. The bill also proposes that businesses not retain credit/debit card information on customers once the transaction is authorization.

Scam alerts flooding several states

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MADISON, Wis. (1/26/09)--Credit unions nationwide are reporting that their members have been targeted by scams--including scams that have origins overseas. Achieve FCU, Berlin, Conn. said that two dozen of its members lost money after sending debit card passwords to scammers that requested personal financial information (The Hartford Courant Jan. 23). The scammers had contacted members saying their accounts had been frozen. One member lost $2.76--all she had in her account--while others lost $400, which is the maximum amount a member can withdraw in one day, Mary Budnick, Achieve vice president of operations, told the newspaper. The scammers that targeted Achieve members were located in Romania and in Spain (Journal Register News Service Jan. 22). The Federal Deposit Insurance Corp. (FDIC) warned its consumers, businesses and financial institutions Jan. 15 about fraudulent e-mails purporting to be from the Federal Reserve Bank. The e-mails state that a phishing attack has hit the Fedwire system and recipients are asked to click on links for more information. The links redirect recipients to Web pages that attempt to load malware, the FDIC said. The agency urged e-mail recipients to delete the messages. Other scams:
* Duke University FCU, Durham, N.C., was targeted by a phishing scam. E-mails purporting to be from the credit union asked recipients to submit their personal financial information. The e-mail included links to a website with a replica of the credit union’s logo (Targeted News Service Jan. 15); * Langley FCU, Hampton, Va., reported that texts were sent to members’ cell phones in Hampton roads asking for personal information ( Jan. 21); * Empower FCU, Syracuse, N.Y., said fraudulent text messages were sent to members asking for personal financial information to reactivate their ATM cards (The Post-Standard/Herald Journal Jan. 14); and * The Michigan Credit Union League’s Michigan Monitor noted Dec. 22 that the latest fraud trends it has seen include fraudulent charges made at gas stations and discount stores nationwide.

Jury awards 5 million on CUs insurance claim

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SOUTHFIELD, Mich., and MADISON, Wis. (1/26/09)--A jury has awarded a Michigan credit union more than $5 million against its insurance company in a claim that involved losses stemming from hundreds of defaulted indirect auto loans. The jury awarded to Michigan First CU--a $490.7 million asset credit union based in Lathrup Village, Mich.,--the $5 million in damages against CUNA Mutual Insurance Society (CUMIS). The jury decided the company breached its insurance bond with the credit union when it refused to pay for losses resulting from the defaulted loans, which had been granted under the supervision of Michigan First's former vice president of lending. "We respect the jury's decision, but still believe the losses incurred by the credit union are not covered under the terms of our Bond policy," Phil Tschudy, media relations manager, CUNA Mutual Group, told News Now Friday. "We are also gratified the court issued a ruling agreeing with our interpretation of our Faithful Performance coverage as requiring intentional misconduct," he added. CUMIS maintained that the credit union's losses were the result of its own reckless behavior and lack of oversight. The company had denied the insurance claim under a faithful performance provision of the bond, saying the loans resulted from intentional violations of the credit union's lending policies. However, the jury unanimously determined the insurance claim was wrongfully denied. Michigan First's claim was first made in May 2004. If the ruling stands, the credit union could recover 12% penalty interest on the claim. That, added to the prejudgment interest, which would bring the total recovery closer to $9 million. CUNA Mutual is considering an appeal. "Our legal team will be reviewing information from the trial and assessing our appellate options," Tschudy said.

International student loans yanked CUs step in

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NEW YORK (1/26/09)--A loan program that many international students depended on to finance their education in the U.S. has been pulled, with business schools scrambling to fill the void. So far only two schools have found replacement lenders--and both are credit unions, reports (Jan. 23). The CitiAssist and Sallie Mae programs typically allowed international applicants studying in the U.S. to obtain up to $150,000 without a U.S. co-signer. The programs were pulled because of the credit crisis, leaving not only students in the lurch, but also business schools and graduate programs trying to attract top students. Among those who haven't found lenders yet, although some are in negotiations, are the Harvard Business School, the Wharton School, University of Michigan's Ross School of Business, the Chicago Booth School of Business, Columbia Business School and others. Credit unions are filling the void at two schools. One is a new program, the other is a continuation of a long-running program. MIT's Sloan School of Management announced its replacement lender will be MIT FCU, located in Cambridge, Mass., and Stanford Business School has run a similar program with Stanford FCU, Palo Alto, Calif., for decades. MIT FCU signed an agreement with the Sloan school in December. MIT FCU's program was developed with Credit Union Student Choice, a credit-union-owned organization that offers turnkey, school-certified, private student lending solutions to credit unions across the nation. The agreement doesn't require students to have a domestic co-signer, offers a competitive interest rate and allows students to take out a line of credit with the $235 million asset credit union. It also features zero origination or pre-payment fees, low interest rates, and can provide financing for the full cost of attendance. MIT Sloan Director of Student Financial Aid Daniel Barkowitz told that the most attractive aspect of the loan is that students don't have to reapply for the loan program every academic year. "While we may not have the brand name or asset size of mega bank lenders, we have a business model that makes us perfectly suited to meet the private loan needs of MIT students," said Brian Ducharme, MIT FCU's president/CEO, in a press release (PRNewswire Jan. 23). "We've always maintained a singular focus on serving our community with cost-effective products and services. This clarity of purpose has allowed us to grow and thrive at a time when many publicly traded lenders are struggling for mere survival," Ducharme added. Stanford FCU's program will continue to be available to international students without a U.S. co-signer, said Jack Edwards, director of financial aid at Stanford University. For the full story, use the link.

Grant to charter first Latino CU in Ohio

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SOUTH TOLEDO, Ohio (1/26/09)--The Ohio Credit Union Foundation (OCUF) is leveraging a $69,500 Innovation Grant from the National Credit Union Foundation (NCUF) to charter a community development credit union for Latinos in northwest Ohio.
With its startup partially funded by an Innovation Grant from the National Credit Union Foundation (NCUF), Nueva Esperanza (New Hope) Community CU plans to open for business in this building in June. (Photo provided by Ohio Credit Union Foundation)
Nueva Esperanza (New Hope) Community CU has applied to the Ohio Division of Financial Institutions for a state charter. If the charter is granted, it would be the first new state-chartered credit union in Ohio in more than 20 years. The credit union could open in June. Nueva Esperanza would reach a Latino population that has more than doubled since the 2000 Census. More than 50% of area households are classified as “low-income” or “extremely low-income,” which points out the need within the community for basic financial services and affordable credit, said OCUF Executive Director Becky Hart. This is the 12th of 14 NCUF Innovation Grants implemented this year. Innovation Grants are supported by NCUF and members of corporate credit unions who invest in the Community Investment Fund (CIF). Nueva Esperanza will focus on financial education, budgeting, basic savings, simple lending, credit counseling and money transfers. It would open with two bilingual employees, then staff up to four bilingual employees the next year. “The Latino community is currently using a branch bank that offers no specific programs for small depositors and charges fees for basic services such as money orders,” according to Barry Shaner, CEO of Directions CU. Based in nearby Sylvania, Ohio, Directions CU is helping organizers of the new credit union. “It is our understanding that area residents do not trust a financial institution that they don’t perceive to be an integral participant in the community.” Nueva Esperanza’s mission will be “empowering the Latino community by promoting savings, increasing financial literacy among low-wealth and often unbanked Latino households, making loan capital available, and promoting community resources.” OCUF is partnering with Toledo-area credit unions and community representatives who have laid the building blocks for the new credit union during the past several years. They include:
* Viva South Toledo Community Development Corp., which purchased the building where the new credit union will operate. Viva South Toledo will relocate its headquarters into the same facility. It will provide members with housing assistance and other social services to complement the new credit union’s financial services; * Directions CU, which will provide operational staff and all data processing services, terminals, software, recordkeeping and accounting support; * Area Financial Services, a technology credit union service organization owned by five Toledo-area credit unions, will oversee Nueva Esperanza’s back-office operations; and * Latino Alliance of Greater Toledo, which will help grow and sustain membership in the new credit union.
The Ohio Credit Union League and its Northwest Chapter will continue to serve as planning advisors and provide additional resources including education and training for the new credit union’s board and staff. “Access to basic financial services is a necessity in every community,” said Jennifer Ferguson, president of the Northwest Chapter and CEO of Bay Area CU in Oregon, Ohio. “The credit union presence in South Toledo will help residents achieve financial literacy, establish credit, grow savings, and possibly even realize the dream of homeownership. All of this will go a long way toward stabilizing families and building community pride. We know from working together on this project that the strengthening of South Toledo and its residents must come from within.”

Coastal FCU to close four branches add others

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GREENSBORO, N.C. (1/26/09)--Coastal FCU announced Thursday that it will close four underperforming branches in the first quarter, reducing its branch count to 18, said the North Carolina Credit Union League. However, the credit union plans to open up to five new branches early next year (Weekly Update Jan. 22). The branches could go in Brier Creek, Eastern Wake, Chapel Hill, Holly Springs or downtown Raleigh and Durham. “The majority of our newest locations are doing well, and overall, we’re coming off of a successful year,” said Coastal President/CEO Larry Wilson. “We added 18,000 members and grew our assets by $261 million, or 14%, in 2008.” The branches closing are located in Sanford, Southern Pines, Clayton and the North Pointe Shopping Center in Durham. Employees at closing locations can apply for other open positions within the credit union. “We have a number of positions available, particularly in branch operations and in our growing business services department,” Wilson said. “Also, as we look to open new branches within the Triangle, we’ll need experienced employees to staff them.” Coastal plans to keep full-service ATMs at each of its branch locations. The credit union will dedicate more resources to develop its Express Branch format by converting existing branches and opening new ones with Express Teller technology. The Express Teller system, which debuted at two branches at the end of last year, will allow Coastal to increase branches and hours of operation. Up to eight locations could have the technology in place by the end of the year, the credit union said. Coastal FCU has $2.019 billion in assets.

CU System briefs (01/23/2009)

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* DECATUR, Ala. (1/26/09)--A U.S. District Court judge has dismissed bank fraud and conspiracy to commit bank fraud charges in the case of a former credit union manager and former businessman accused of stealing more than $6 million over three years. Judge U.W. Clemon Thursday granted acquittal in the case of Timothy David Shelton, 53, and Melissa Killeen, 39, a former manager of Lauderdale County Teachers CU. "There's no reasonable doubt that a jury could conclude that she participated in any conspiracy," said Clemon ( Jan. 22). Shelton's trial will continue on four counts of making false statements to a federally insured institution. He had a number of loans at the credit union, which he used for his business. Shelton was accused of avoiding loan limits by recruiting friends and relatives to apply for loans at the credit union … * HARRISBURG, Pa. (1/26/09)--Hidden River CU, Pottsville, Pa., hosted separate interviews Thursday with candidates for the State Senate District 29 special election, reported the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Jan. 23). The candidates, State Rep. Dave Argall (R) and County Clerk of Courts Steve Lukach (D), answered questions from Hidden River CEO John Murga and Board Chairman Charles Lantz. Both Argall and Lukach said they were opposed to implementing heavy regulations and supported credit unions' tax-exempt status. Also interviewing were: Eric Kratz, Pennsylvania Business Council; Gwenn Dando, NFIB; John Callahan, Pennsylvania Chamber of Commerce; Judy Eschelberger, Novak Strategies; and Christine Seitz, PCUA government affairs specialist. Pictured here are Argall, right, and Murga, fourth from right. (Photo provided by the Pennsylvania Credit Union Association) … * HARRISBURG, Pa.(1/26/09)--Pennsylvania Office of Financial Education Director Hilary Hunt has resigned, effective at the end of January (Life is a Highway Jan. 23). Hunt worked with Gov. Edward Rendell and the state Department of Banking to develop a financial education program recognized throughout the nation. Pennsylvania is one of two states with such a program. Mary Rosenkrans, financial education specialist, will assume the duties of acting director, announced Secretary of Banking Steve Kaplan. Pennsylvania Credit Union Association President/CEO Jim McCormack said PCUA has worked with Hunt on several occasions and is looking forward to working with Rosenkrans and her colleagues "as credit unions continue their community outreach to improve the financial health for Pennsylvanians." … * MADISON, Wis. (1/26/09)--Shannon Griswold has joined Summit CU as president of STAR CU, the nation's only youth-chartered credit union, which is located in the Boys & Girls Club in Madison. Griswold's background is in banking and social work. She previously was a social worker at Central Wisconsin Center and a program assistant at Girl Power, both based in Madison. She also has served as a teller and personal banker at a local bank. STAR (Saving to Achieve Results) CU is open to members of the Boys & Girls Club of Dane County and is supported by Madison-based Summit CU, a $1 billion asset credit union ( Jan. 23) …

World CU Conference pre- and post-tours announced

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MADISON, Wis. (1/26/09)--The World Council of Credit Unions (WOCCU) has selected Lisbon, Portugal, and France’s Bordeaux wine region as the locations for its pre- and post-conference tours for attendees of the 2009 World Credit Union Conference. The conference takes place July 26-29 in Barcelona, Spain. The pre-conference tour will be in Lisbon July 22-25 and the Bordeaux post-tour is slated for July 30-Aug. 2.
Click to view larger image Lisbon, Portugal. Click for larger view.
Each tour requires a separate fee from the conference registration, said WOCCU. Lisbon is Portugal's capital and largest city. The pre-tour itinerary includes a sightseeing tour, dinner and a Fado performance of traditional Portuguese music at a local restaurant plus day trips to nearby towns including Sintra, Óbidos and the beach villages of Cascais and Estoril. Post-tour participants will stay at the Hôtel du Médoc Golf & Spa, a resort just outside of Bordeaux, and can sample some of the region's best wines on two winery tours. Bordeaux's historic city center is a UNESCO World Heritage site in recognition of the municipality's architecture. The tour itinerary also includes visits to the nearby medieval city St. Émilion and local villages.
Click to view larger image Bordeaux, France. Click for larger view. (Photos provided by the World Council of Credit Unions)
During the World Credit Union Conference, five day-tour options are available for attendees in Barcelona. Three tours feature the city's Gothic Quarter and its most famous street, La Rambla; a tour of Montjuic Mountain, the large hill where the National Art Museum and Olympic Stadium are located; and Gaudí and Modernism art and architecture. Attendees also can participate in two tours outside of Barcelona, including a trip to Montserrat Mountain, located in one of Spain's national parks less than an hour from Barcelona, and a tour of Tarragon, a seaside town known for its Roman Amphitheatre. For more information, use the links.

CU bonuses sign of strength in troubled times

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MADISON, Wis. (1/23/09)--Credit unions are consistently providing members with year-end patronage dividends, with some even offering bonuses to members struggling through the economy. The dividends indicate that credit unions are operating in today's economic turmoil from a position of strength. Dallas-based American Airlines FCU announced a record bonus dividend was paid on Dec. 31 to its membership. "While other financial institutions are tightening their belts, American Airlines FCU is able to offer a bonus because we made sound lending decisions, operated efficiently and remain financially secure, strong and solid," said Angie Owens, president/CEO of the $4.8 billion asset credit union in Lonestar Globe (January). "As a result we can give back this unprecedented bonus dividend to our members based on their active participation in the credit union," Owens said. The credit union based the bonus dividend upon dividends earned on qualifying share accounts and/or interest paid on applicable loans in 2008. The savings portion was paid at an annual rate of 3%. Applicable loan interest was also calculated at a 3% annual rate. This year, the most loyal and active members received an additional $80 bonus if they maintained three or more products among these categories: savings, checking account, certificate, auto loan, credit card, other loan, mortgage/home equity loan and financial services, said the credit union. In Hunt Valley, Md., the $68.3 million asset Atlantic Financial FCU paid a bonus dividend for 2008, based on how much the member has used the credit union, according to the Maryland and District of Columbia Credit Union Association's FOCUS Newsletter (Jan. 20). The bonus is calculated as a one-time additional dividend equal to 5% of all dividends earned during 2008 on all savings products, and a one-time 5% return on all interest on loan products during 2008. "During these difficult times in the financial markets this bonus is representative of the hard work and dedication of our management and associate team " at the credit union, said Chairman Joseph Droney in the article. CU Community CU, Springfield, Mo., gave its 5,600 members a bonus dividend totaling as much as an additional 50 basis points (0.50%) on their fourth-quarter 2008 savings account earnings. The dividends were directly deposited into each member's account on Dec. 31. "Contrary to so many businesses in the current economy, we were fortunate to have a good year financially," said Judy Hadsall, president (The Missouri difference Jan. 9). "We are very proud of our financial results and want to share that success with each of our members because they are our owners. This is a tough time for everyone; we want to do everything we can to help." Bay Winds FCU, a $96.9 million asset credit union in Charlevoix, Mich., announced it paid a bonus dividend in excess of $212,00 Dec. 31 to its members--the second bonus dividend offered in three years (Charlevoix Courier Jan. 13). "Members are more than just customers, they are our lifeblood," said Bay Winds President/CEO David Leusink. Response from members to the bonus dividend has been "very positive, given the state of our economy. There is financial strength in numbers; this dividend underscores that principal," he added. Green Bay, Wis.-based PCM Employees CU returned $395,707 to its members in year-end bonuses and rebates--roughly 5% of all loan interest paid in 2008 and a 50% bonus on the interest earned on various programs (Green Bay Press-Gazette Jan. 18). PCM has 7,400 members and $119 million in assets. Dean Wollin, PCM president, noted that after establishing a 13% capital reserve, the credit union had money left over. "We feel when we maintain that reserve level, we have long-term sustainability. When we go over 13%, we are going to give it back," Wollin told the newspaper. He said the profitable year was aided by a greater-than-expected net interest margin and fewer loan losses than expected. Other recent announcements of dividends included DFCU CU, Dearborn, Mich., which paid $17 million in yearly dividends for 2008 ( Jan. 7); and GPO FCU, New Hartford, N.Y., which paid members a 3% dividend bonus on dividends earned on their accounts in 2008 (The Oneida Daily Dispatch Jan. 19).

Members among Heartland breach victims

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MADISON, Wis. (1/23/09)--Some credit unions reported that their members have been affected by the Heartland Payment Systems breach. Heartland of Princeton, N.J., reported Tuesday that its processing system was compromised sometime last year. Heartland is a third-party processor used by 250,000 merchants nationwide (News Now Jan. 22). Visa and MasterCard told several Maine credit unions that members’ cards were affected between mid-May and mid-August 2008, said Jon Paradise, governmental and public affairs manager for the Maine Credit Union League (Associated Press Jan. 22). AP noted that this is the third time in two years that Maine financial institutions have had to deal with a data breach incident. TJX Cos. and Hannaford breaches cost Maine credit unions $2.1 million, according to the Maine league (Portland Press Herald Jan. 7). PeoplesChoice CU, Saco, Maine, said that 500 members’ Visa credit and debit cards may have been compromised, Luke Labbe, president/CEO, told AP. About 50 to 60 members experienced fraudulent charges on their cards, including small charges at gas stations. The credit union had noticed losses since October, and “couldn’t figure out where they were coming from,” Labbe said. Piedmont CU, Danville, Va., said its members have been affected by the breach. More than two dozen members reported fraudulent purchases on their cards Wednesday afternoon, Piedmont CU President Tom Shields told the Register-Bee (Jan. 21). Piedmont is disabling cards for members who report fraudulent purchases, and is reimbursing members who report fraudulent transactions instead of waiting for Visa to refund the credit union, Shields told the newspaper. GFA FCU, Gardner, Mass., issued new cards to thousands of its members who were compromised, though no member losses were reported. The credit union wanted to be proactive, said Kelli Mason, GFA FCU’s vice president of sales and service. GFA also put a daily limit on accounts of members who were compromised, she told the Worcester Telegram (Jan. 22).

FSCC awards honor CUs for halting 1.5 million in frauds

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SAN DIMAS, Calif. (1/23/09)--Financial Service Centers Cooperative Inc. (FSCC), a credit union shared branching network, announced Thursday that it has made 60 awards to credit unions for stopping more than $1.5 million in fraud activity for 2008. Fraud Buster Award recipients included credit unions who participate in the FSCC Shared Branching Network. They were recognized for protecting their credit unions, their members, and members of other credit unions from fraud. “Credit unions have hit another milestone as the amount of money they are preventing from loss is impressive,” said Bonnie Kramer, FSCC executive vice president and chief operating officer. “They are truly demonstrating their commitment to helping members and the credit union from theft and damages. Credit union safety and security is always a top priority for FSCC staff and the network. FSCC has a suite of fraud tools to help credit unions fight fraud. Fraud training, online fraud detection, and alerts also are available for FSCC credit unions. An Operation Advisory Committee comprised of stockholder credit unions reviews activity and looks at ways to prevent and detect fraud through rule changes, products and services. The committee organized the awards program in 2000. The first Fraud Buster Awards were handed out in 2001. In eight years, credit unions have stopped more than $6.5 million in fraudulent activities. Financial institutions and businesses lose more than $48 billion annually from fraudulent activities, according to the Federal Trade Commission.

Iowa league names political key contacts

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DES MOINES, Iowa (1/23/09)--Seven Iowa credit union representatives were recently selected to serve as the Political Key Contacts (PKC) of the Iowa Credit Union League (ICUL) for 2009-10. The PKC system is a grassroots initiative that matches seven credit union members, who have a relationship with one of Iowa’s U.S. senators or state representatives. PKCs keep Iowa federal officials informed on credit union issues. The contacts also may be called upon, as needed, to travel to Washington, D.C., to lobby the Iowa congressional delegation. The PKC terms are two years for U.S. representatives, and six years for senators. In congratulating the appointees, Patrick Jury, league president/CEO, said, “We sincerely appreciate their willingness to lead the league, and connect with congressmen on important issues affecting our industry.” Those appointed are:
* Gregg Liddle, Dupaco Community CU, Dubuque, key contact for U.S. Rep. Bruce Braley (D-1); * Jim Hagerman, Linn Area Community CU, Cedar Rapids, for U.S. Rep. Dave Loebsack (D-2); * Mike Harvey, Veridian CU, Waterloo, for U.S Rep. Leonard Boswell (D-3); * Paul Becker, Citizens Community CU, Fort Dodge, for U.S. Rep. Tom Latham (R-4); * Janine Keim, Consumers CU, Denison, for U.S. Rep. Steve King (R-5); and * Denise Dolan, Dupaco Community CU, for U.S. Sen. Tom Harkin (D);
Mark Heth, Iowa Community CU, Waterloo, was not up for appointment this year and will continue to serve as the contact for U.S. Sen. Chuck Grassley (R).

CU to the rescue when bank reneges on biz loan

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WAYNE, N.J. (1/23/09)--A New Jersey credit union came to the rescue of a local fire department after the department received an 11th-hour decision by a local bank to rescind its loan.
First Jersey CU Vice President of Operations Debbie Gordon presents Ringwood Fire Co. #1 Treasurer and Commissioner Lou Piccininno with a check so the Stonetown Fire Department in Ringwood, N.J. can begin repair work after a bank rescinded the department's loan. (Photo provided by First Jersey CU)
First Jersey CU, a $101.9 million asset credit union based in Wayne, N.J., stepped in to help the Ringwood, N.J. Fire Co. #1, which was in desperate need of upgrading and repair. The Stonetown Fire Department had done what seemed natural and contacted an unnamed local bank to apply for a loan. The department turned in the required paperwork, and the bank reviewed the application and approved the loan. However, the bank changed its mind and rescinded the loan, leaving the fire department scrambling to find a way to make the upgrade so the department could continue its life-saving work, said the credit union in a press release. First Jersey heard about the problem and approved the loan, just like it would have done for many others in these difficult financial times, said the credit union. The credit union, which said it has been a "safe harbor for consumer savings and loans" for more than 79 years, noted that consumers saved $10.9 billion by using credit unions rather than banks in the form of lower fees, higher savings rates and lower loan rates.

Ohio foundation awards 207000 in grants for 08

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COLUMBUS, Ohio (1/23/09)--The Ohio Credit Union Foundation (OCUF) awarded more than $207,000 in grants in 2008 to assist credit unions, communities and individuals statewide. Last year, the foundation received a record $249,000 in contributions. It also received grant applications for programs and initiatives with wider scopes and larger scales (eLumination Newsletter Jan. 21). Fifteen grants totaling $92,000 were awarded for financial education, and five grants worth $44,000 were given for modest-means outreach initiatives. Noteworthy projects included:
* Funds for Ohio’s first Credit Union Community Center; * A “reality day” for 300 students; * A credit union CEO simulation program; and * About 740 bus passes to help individuals attend medical appointments, employment opportunities, and social-service agency visits.
Last year, 39 professional development grants totaling $48,000 helped train credit union employees, members and volunteers. Also, $10,000 in disaster relief helped credit union employees, members and volunteers impacted by Midwest floods and Hurricane Ike. For 2009, the foundation’s board of trustees established a $260,000 fundraising goal and a $250,000 grant-making goal.

FIs turn to relationship products to raise wallet share

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SAN ANSELMO, Calif. (1/23/09)--Research indicates that financial institutions--including credit unions--are bundling relationship products to raise their wallet shares. With relationship products, members are rewarded for purchasing multiple products from a credit union. Financial institutions are offering rate premiums for depositors who have a multi-product relationship with them (BusinessWire Jan. 21). For example, the average annual percentage yield (APY) for a regular share certificate is 1.85%, while the average APY for a relationship share certificate is 2.15%, according to Market Rates Insight (MRI). “This measure was designed to encourage existing and new [members] to increase their deposit surface with the institution by having multiple deposit products such as checking, savings, [share certificates] and others,” said Dan Geller, MRI executive vice president. Institutions also are using statistical modeling to optimize product pricing by breaking demographic and geographic markets into sub-groups, and pricing products accordingly, MRI said. MRI is a research firm that tracks rates for deposits, loans and fees for financial institutions.

Federation has record year with CDCUs

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NEW YORK (1/23/09)--Despite troubled economic times, the National Federation of Community Development Credit Unions broke records in 2008 for raising and renewing capital, increasing investment in community development credit unions (CDCUs), and purchasing affordable mortgages to free up loan capital in distressed markets.
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As a federally certified Community Development Financial Institution (CDFI) Intermediary, the federation raised millions in funds to support the growth and expansion of CDCUs--credit unions with a primary mission of providing sustainable and affordable financial services to low-income and underserved communities. The Community Development Investment Program closed 2008 with more than $46.2 million in assets under management--including commitments--and 24% growth in its investment portfolios. The portfolios now total more than $36.2 million in investments outstanding and committed to CDCUs. In spite of the rapid growth and the current economic climate, the federation’s investments have been sustainable, and all investments in the federation's portfolio continue to perform, the federation said. The Community Development Investment Program in 2007 launched a capital campaign to raise $25 million within three years. The additional capital allows the federation to increase its investments in CDCUs. Since announcing its goal, the program has raised more than $19 million in additional capital. Other 2008 federation campaign highlights:
* Total assets under management--including commitments--rose 27.2% to $46.2 million from $36.3 million; * Additional capital of $9.6 million was raised from eight investors, four of them new to the federation--Annie E. Casey Foundation, Deutsche Bank, Unitarian Universalist Congregation of Shelter Rock, and United Nations FCU, New York. * A record $17.8 million was invested in CDCUs in 2008, including $7.8 million in new investments, $5.3 million in renewed investments, and 43 mortgages totaling $4.7 million purchased, increasing the mortgage portfolio to $6.1 million; and * The federation's Community Development Relief and Rebuilding Fund (Hurricanes Katrina and Rita), totaling $926,000, was fully disbursed and provided supplemental grants to CDCUs in the Gulf regions, including ASI FCU, Harahan, La.; Coastal Waters FCU, Mobile, Ala.; Hope Community CU, Jackson, Miss.; Total Community Action FCU, New Orleans; and University of New Orleans FCU. * As of the third quarter of 2008, CDCUs increased loans to their members by more than 7%.
With a recent commitment from HSBC Bank to invest an additional $700,000 in CDCUs through the Community Development Investment Program, the federation will continue its partnerships with its current investors and establish new relationships to increase investments in CDCUs.

Sponsor companys cutbacks affect CU

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HARRISBURG, Pa. (1/23/09)--Chemical-maker Rohm & Haas, Philadelphia, announced this week that it plans to cut 900 jobs and freeze salaries. The changes have affected Rohm & Haas Employees FCU, said the Pennsylvania Credit Union Association (PCUA). The credit union’s sponsor company also cut 925 jobs in June and is being bought by Dow Chemical Corp. (Life is a Highway Jan. 22). “A series of cutbacks have been going on for the last five years and has affected [the credit union’s] chargeoffs,” said Jack DeWaele, the credit union’s CEO. “If you don’t have a job, you can’t pay your loan. Some people don’t pay us because they are angry at Rohm & Haas, and don’t understand that we’re not them,” he told PCUA. The credit union is most affected by the impending sale of the company. “It’s created so much uncertainty that it’s next to impossible to make loans,” he said. The credit union will offer a 4.25% rate on second mortgage loans for a 48-month term in February to help members. Rohm & Haas Employees FCU has $33 million in assets.

SW Corporate Remote deposit trend continues

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FARMERS BRANCH, Texas (1/23/09)--Southwest Corporate FCU’s remote deposit services are growing. Last year, the number of participating credit unions jumped 57%, the corporate told the Texas Credit Union League. About 160 new credit unions joined the program, bringing the year-end total for 2008 to 442. Also, 698 credit union branches signed up for the program, raising the total number of branches using remote deposit to 1,773 (LoneStar Leaguer Jan. 22). “Southwest Corporate experienced rapid adoption of our branch and teller applications this year,” said Jody Beck, Southwest Corporate senior vice president of operations. “We expect interest in those products to continue,” she told the league. The transition from paper to imaged item processing is moving at a quick pace, evidenced by the ahead-of-schedule closure of 24 Federal Reserve Bank check processing facilities in just five years, the Texas league said. Southwest Corporate offers remote deposit in 31 states.

CO-OP joins Filene Chairmans Roundtable

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MADISON, Wis. (1/23/09)--CO-OP Financial Services joined the Filene Research Institute’s Chairman’s Roundtable. Membership in the roundtable is open to organizations providing grants of $250,000 to the institute over a period of three years. The contribution will be used to fund Filene research focusing on growth opportunities and future business challenges affecting credit unions. “Our organization’s investment in the Chairman’s Roundtable demonstrates our strong tradition of supporting the growth of credit unions,” said Stan Hollen, CO-OP Financial Services president/CEO. “We are eager to work with the Filene board and staff in the spirit of research in the area of collaborative effort. This contribution will help give credit union leaders the tools they need to help their institutions grow and prosper.” Credit unions will succeed to the extent that they anticipate market demands of the future and arm themselves to win the battle for the hearts and minds of financial services consumers, Hollen added. Evolving challenges make support of the Filene Research Institute’s efforts critical to industry growth, he said. “CO-OP Network and CO-OP Shared Branching form the core of the network that serves as an extension of a member’s credit union,” Hollen said. “We’re grateful and delighted to accept this generous support of our research and innovation program,” said Mark Meyer, Filene executive director and CEO. “While the financial contribution is substantial, equally important is the formation of a partnership with a leading provider of products and services to our industry.” CO-OP Financial Services is the nation’s largest credit union-owned electronic funds transfer network and processor.

CU System briefs (01/22/2009)

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* NAPERVILLE, Ill. (1/23/09)--The Illinois Credit Union League's
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79th Annual Convention, with a "Shake, Rattle and Roll" theme, will be held April 16-18 at the Hilton Chicago. The delegates' meeting will be April 16 from 2 p.m. to 3:30 p.m. National Credit Union Administration Chairman Michael Fryzel and a pre-recorded presentation by Credit Union National Association President/CEO Dan Mica will be featured, as will motivational speaker Al Masocco, who will incorporate the history of rock and roll into his presentation. Chaz Allen of "Little Know Facts" radio program will speak at the Credit Union Executives Society Illinois Council luncheon on April 18. The convention will close April 18 with artist Sam Glenn presenting a "Kick in the Attitude." Details can be found on the league's website … * CHANDLER, Ariz. (1/23/09)--First CU had donated more $27,000 to the 2008 Children's Miracle Network's "Credit Unions for Kids"
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fundraising campaign, which benefits children's hospitals. The Chandler, Ariz.-based credit union raised $17,258.27 in various fundraisers. It participated in CO-OP Financial Services Miracle Match Program, which matches $10,000 for credit unions raising at least $10,000. The match meant the total contributed was $27,258.17. Locally, the network provides funds for Tucson Medical Center's Pediatric Unit and Phoenix Children's Hospital. Among those pictured are, from far left: Megan Wall, director of the 1 Darn Cool School at the Phoenix hospital; Lee Bultiman, director of patient and family services; and Desiree Hoogerjuis, community outreach coordinator for First CU. (Photo provided by First CU) … * KANSAS CITY, Mo. (1/23/09)--KC Police CU, located in Kansas City, has promoted Aaron Goff to CEO, announced the board of directors. Goff served as vice president and assumed the position of CEO on Jan. 5, according to the Missouri Credit Union Association (The Missouri difference Jan. 21). Goff has worked in the credit union industry since 1992. KC Police CU has $95.1 million in assets … * DECATUR, Ala. (1/23/09)--Two people, including a former manager of Lauderdale County Teachers CU in Florence, Ala., have been charged with defrauding the credit union of more than $6 million during a three-year period. The trial of Timothy David Shelton, 53, and Melissa Killeen, 39, both of Shoals, began Wednesday. According to prosecutors at the hearing, Shelton allegedly falsified loan applications and Killen approved 21 loans knowing the information was inaccurate. Shelton used the loans--against credit union policy--for his business, which failed. When his loans hit a ceiling, he recruited relatives and friends to join the credit union and apply for loans, and received a share of some of the loan money. Killeen resigned in 2005. ( Jan. 22) …

CUDL CUcorp partner in marketing Invest in America

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RANCHO CUCAMONGA, Calif. (1/22/09)--CUDL, a point-of-sale and indirect lending network for credit unions, has partnered with Livonia, Mich.-based CUcorp to promote "Invest in America," credit unions' nationwide auto lending program with General Motors (GM) and Chrysler. CUDL will promote the program to its 700 credit union partners, 20 million members, and 9,000 dealers nationwide. It also will facilitate credit unions' ability to provide member financing at more than 1,800 participating GM and Chrysler dealerships nationwide. In 2008, the CUDL Auto Lending platform generated $12 billion in credit union auto loans, said the Rancho Cucamonga, Calif.-based company. "Our goal is to help the program through CUDL's ability to facilitate member loans at the dealership and to further advance credit union auto lending growth and market share," said Tony Boutelle, CUDL president/CEO. The Invest in America partnership, which encompasses nearly 8,000 credit unions nationwide and GM and Chrysler dealers, aims to boost auto sales by making $80 billion of low-rate auto financing pledged by credit unions available to 90 million credit union members. The financing is added to purchase incentives provided by GM and Chrysler. So far, more than 8,000 new vehicles have been purchased through Invest in America since the program opened Dec. 8. David Adams, president/CEO of CUcorp and the Michigan Credit Union League, noted the partnership with CUDL will continue to push the discounts out to consumers. "It also expands GM and Chrysler dealership awareness and support for this important program. The bottom line is increased auto sales and more affordable financing through this partnership. This is meeting a critically important need for automakers." CUDL will increase member awareness and access to the discounts via its CUDL AutoSMART program. Participating credit unions can promote the program through their co-branded AutoSMART websites, where members can research automobiles and find deals through CUDL's inventory of 500,000 vehicles. In tandem with the CUDL partnership, CUcorp is working with GM and Chrysler to more effectively promote Invest in America through the dealership network nationwide.

Chicago CUs offer bailout advice in ITribuneI

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CHICAGO (1/22/09)--A couple of credit unions from the Chicago-area are offering advice in the Chicago Tribune for President Barack Obama on how to use the remaining $350 billion of the federal government’s bailout fund. Jerry Haley, president of the $39.8 million asset, Matteson, Ill.-based USA One National CU, said the restructuring of upside down mortgages--in which a homeowner owes more than the house is worth--is a good place to begin (Chicago Tribune Jan. 21). Because the current economic crisis started in the housing market, and due to the probability that a rebound in the housing market is likely needed to spark an economic recovery, putting the skids on foreclosures would be beneficial to the economy, Haley told the newspaper. Sandy Brillowski agrees that the Obama Administration needs to place the funds directly into programs--if not consumers’ hands--to stop foreclosures and help small businesses, she told the paper. Brillowksi, marketing vice president for the $149.1 million asset, Naperville-Ill.-based Hawthorne CU, said she believes an indirect route to helping people--such as with the recent Wall Street bailout--is too risky and time consuming.

CUNA Mutual offers advice on Heartland breach

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MADISON, Wis. (1/22/09)--CUNA Mutual Group is providing guidance to its Plastic Card Insurance policyholder credit unions regarding the Heartland Payment Systems breach. CUNA Mutual sent a RISK Alert Tuesday to its nearly 5,000 Plastic Card Insurance policyholders, which provides recommendations for credit unions to mitigate losses. On Tuesday, Princeton, N.J.-based Heartland reported that its processing system was breached sometime last year. Heartland is a third-party card processor used by 250,000 merchants nationwide. Visa and MasterCard also have confirmed full magnetic stripe data from credit and debit cards have been compromised. “Although the exact number of affected cards is not known, it is expected to be many millions,” said Chuck Cashman, CUNA Mutual Plastic Card Insurance product executive. Credit unions are receiving lists of compromised card numbers and must sort through the lists to find members’ card numbers, then determine if the cards will be blocked or re-issued. “Everyone has their nose to the grindstone looking at the lists,” Cashman said. “It’s very time-consuming.” Credit unions who re-issue cards will have to bear the cost. Given a struggling economy, “the extra expense can be detrimental,” Cashman said. Replacing cards can cost $15 to $25 per account. A sniffer is rumored to have caused the breach. Sniffers are placed on communication lines, such as a server, to capture information. Sniffers collect information, which is then unencrypted and normalized by the recipient. Sniffers can be used legitimately, but fraudsters also use them to make counterfeit cards. Credit unions need a fraud management system, but if fraud strikes on the merchant’s [or processor’s] end--like it did with Heartland--“they are kind of stuck between a rock and a hard place,” Cashman said. It could take months for Heartland’s impact to be realized. The TJX Cos. breach in 2007 took a few months to sort out, and Heartland is twice the size of TJX. Although processes have improved since then, “it’ll be a few months before everything’s pieced together,” Cashman said. Will credit unions have recourse once the impact of the breach is realized? “That’s being sorted out,” Cashman said. In October, CUNA Mutual notified Visa and MasterCard of higher-than-normal fraud activity after credit unions began informing the insurer of a spike in plastic card fraud and related activities. “CUNA Mutual Risk Management detected that something big was happening,” Cashman said. “We reported our findings to both card associations to help facilitate an investigation to determine if a breach had occurred and, if so, its origin.” The company didn’t know the fraud was related to Heartland until the processor issued a release on Tuesday. CUNA Mutual saw about 600 data breaches last year through its alerts. “Many aren’t a major alert,” Cashman said. “Hundreds of small and medium breaches never hit the radar.” CUNA Mutual has offered credit unions two related RISK Alerts issued in late 2008 when fraud activity spiked; a webinar in November and viewed by more than 600 credit unions; a questions and answers document; and talking points to assist credit unions in discussing card fraud with local media. The most recent RISK Alert recommends credit unions review Visa CAMS Alerts or MasterCard Alerts carefully to determine “high risk” exposure for future fraud. Doing so will help them determine what course of action to consider, Cashman said. Some additional recommendations in the RISK Alert include:
* Review accounts involved in the breach. Determine which cards on the card association alerts are still active (open). * Review other accounts. Find out which cards on the alerts are non-active and have been closed due to fraud. Identify if the fraud pattern on the closed accounts matches the fraud pattern described in the card associations’ alerts. * Monitor or block and reissue. Assess compromised cards to determine whether to monitor the affected cards. If opting to monitor, contact the card association (Visa or MasterCard) to determine how the credit union’s action will impact future recovery efforts, otherwise block and reissue the affected cards. Reissued cards will be encoded with new track information, which includes the new CVV/CVC values and card expiration dates.
Credit unions also call CUNA Mutual’s CU Protection Resource Center at 800-637-2676 for more information.

MDDCCUA reports outreach success at NBC4 expo

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COLUMBIA, Md. (1/22/09)--Maryland, Virginia and District of Columbia credit unions involved with the 16th Annual NBC4 Health and Fitness Expo potentially reached more than 85,000 consumers who attended the fair with the credit union difference.
Credit unions from Maryland, Virginia and the District of Columbia exhibited at the NBC 4 Health and Fitness Expo Jan. 10-11. From left are Michael Vasti, NBC4; and Cheryl Pyle Money and Angela Akingbade from One FCU, Largo, Md. (Photo provided by the Maryland and District of Columbia Credit Union Association)
The fair was held at the Washington Convention Center in Washington, D.C., Jan. 10-11, according to the Maryland and District of Columbia Credit Union Association (MDDCCUA). A number of credit unions exhibited at the event with MDDCCUA. Sharon Sykes, MDDCCUA vice president of marketing, said she talked with more than 1,000 consumers who visited the MDDCCUA booth (FOCUS Newsletter Jan. 20). Volunteers also helped 840 consumers find a credit union. “The traffic that we received and the eagerness of so many people to join a credit union was terrific,” Sykes said. “All of the credit unions exhibiting received a great response.” They included:
* DVA FCU; Washington, D.C.; * HEW FCU, Alexandria, Va.; * Prince Georges’ Community FCU, Upper Marlboro, Md.; * State Department FCU, Alexandria, Va.; * Vantria FCU, Springfield, Va.; and * White House FCU, Arlington, Va.
Volunteers at the MDDCCUA booth included Angela Akingbade and Cheryl Pyle, Money One FCU, Largo, Md.; Steve Levin of National Institute of Health FCU, Rockville, Md.; and Stuart Clode of APGFCU, Aberdeen, Md. Sponsorship for the event was funded by the Community Outreach Committee, chaired by MECU CEO Bert Hash.

Breach victims lose confidence in accounts safety

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BEAVERTON, Ore. (1/22/09)--Roughly 45% of card breach victims lose confidence in the safety of their financial accounts as a result of a data breach incident, according to a new study by Javelin Strategy & Research. Credit unions whose members' cards are affected by the Heartland Payment Systems breach, which was announced Tuesday, may need to provide greater member service with those members as a goodwill effort. In a down economy, criminals tend to be opportunistic and creative in their approaches to stealing identity information and depositing malware on computers, said Tom Wills, senior security analyst at Javelin. "More than ever, businesses must be vigilant and proactive in protecting their digital assets," he said. The latest breach is part of a trend of increased use of malicious malware, said Rich Mogull, founder of Securosis, an information technology security consultancy in (Jan. 20), a publication for security professionals. With Heartland, there's "now a very clear trend. If you look at the largest breaches that we can definitely link to fraud, all relate to malicious software being installed somewhere in the payment system," he added. In the Heartland breach, once consumers swiped their cards, "sniffer software" captured that data as Heartland sought authorization from the major payment companies and banks and credit unions. Customers of Visa, MasterCard, American Express and Discover Financial are all vulnerable, according to The New York Times (Jan. 21). "We have industry-leading encryption, but the data has to be unencrypted to request the information," Heartland President/Chief Financial Officer Robert H.B. Baldwin Jr. said. He said authorities believe the thieves may be part of an international ring of hackers introducing breaches at a number of financial institutions, he told the Times. The same method of hacking data was employed in other huge data breaches such as the January 2007 TJX Cos. discount retail chain breach, which comprised 90 million card numbers, and last year's Hannaford Bros. grocery chain breach. Both breaches and one of the now defunct CardSystem Solutions, which compromised 40 million accounts, affected many credit unions, which replaced thousands of members' compromised credit and debit cards. "Most corporations today are failing to put a proactive plan in place before a breach happens which has a direct impact on their bottom line through customer retention and reputation management," said Rich Kam, president of ID Experts, which is working with Javelin on research. "Having an incident response plan in place can minimize the impact of a breach, increase response times, and significantly decrease customer attrition rates," he said. The Identity Theft Resource Center reported recently that data breaches were up 47% in 2008, compared with 2007 breaches, which totaled 447.

CU System briefs (01/21/2009)

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* EL PASO, Texas (1/22/09)--Local television station KFOX14 featured Karl Murphy, president/CEO of El Paso-based FirstLight FCU, Friday giving advice to consumers who overspent during the holiday season and now have more credit card debt. He suggested taking the card with the lowest balance, and paying more than the minimum payment on it to pay it off faster. Then move to the next credit card and repeat the process … * WAUSAU, Wis. (1/22/09)--Connexus CU has launched a high-rate, 5.15% Annual Percentage Yield (APY) Xtraordinary Checking account with no minimum balance required and no monthly fees. The more-than-$240 million asset credit union's account is for balances up to $25,000. Accountholders can use any ATM anywhere and receive up to $25 in ATM surcharge rebates monthly. The account also includes free idenity theft protection and a 0.50% APR rate reduction on consumer loans. The Wausau, Wis.-based credit union also offers free ATM/Visa Check Card with unlimited Visa Check (credit) transactions; instant access to deposits made online through Instant Deposit; Free CRIS audio response telephone service; free online banking with bill pay; free eStatements; and direct deposit …

Former auto workers CU severs union ties

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WEST MIFFLIN, Pa. (1/22/09)--Employees of United Community FCU (formerly Auto Workers FCU) decided that they no longer want to be represented by a labor union. The credit union’s 12 employees voted to sever their union relationship after 25 years of Teamster Labor Union representation, said the Pennsylvania Credit Union Association (Life is a Highway Jan. 21). Effective Jan. 15, Teamsters Local 249 of Pittsburgh, has disclaimed any interest in representing the employees of the $35.5 million asset, West Mifflin, Pa.-based credit union, creating a non-union environment.

CU supporter inaugurated as Pa. treasurer

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HARRISBURG, Pa. (1/22/09)--A credit union supporter was inaugurated as Pennsylvania treasurer Tuesday. State Treasurer Rob McCord took the oath of office on Tuesday. This is McCord’s first term as State Treasurer (Life is a Highway Jan. 21). The Pennsylvania Credit Union Association (PCUA) said it looks forward to building a relationship with McCord’s office, especially since he is supportive of the Credit Union Better Choice program--a payday lending alternative developed by PCUA in conjunction with the Pennsylvania State Treasury. The association’s Christina Mihalik, assistant vice president, governmental affairs, and Christine Seitz, governmental affairs specialist, covered the state ceremonies and inaugural receptions.

Beehive CU tables conversion to bank

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SALT LAKE CITY (1/22/09)--A Utah-based credit union that had planned to convert to a mutual savings bank announced it will remain a credit union, citing the nation's economic turmoil. Scott Simpson, president of the Utah League of Credit Unions, said the decision of Salt Lake City-based Beehive CU, was good news. He told The Salt Lake Tribune (Jan. 20) he was sure the credit union's board tried hard to act in its members' best interest. The turmoil in the economy was cited as the reason for the change in plans by CEO Scott Jorgensen, who told the Tribune the credit union board changed its views on what's best for its members. He said the credit union sensed "an extreme reluctance" by federal regulators to approve a new bank charter in the environment. More than 53% of the voting members of the $187 million asset credit union voted early last year to convert. Ballots were cast by about 36% of the credit union's 22,000 members (News Now Feb. 21). At the time, the credit union said a state law that limited the ability of state-chartered credit unions to open branches and attract new members gave Beehive little opportunity to grow.

Speaker CUs will gain market share from crisis

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KEY WEST, Fla. (1/22/09)--Credit union strategies for success during the economic crisis, and benefits programs to recruit and retain key employees were key topics on Tuesday’s agenda at the 2009 CEO Summit in Key West, Fla. Mark Sievewright, senior vice president, corporate marketing and sales at Fiserv, examined “Survival and Success: A New Era in Financial Services.” He told the group that “credit unions will gain market share as a result of the current financial crisis” (Life is a Highway Jan. 21). Sievewright discussed delivery channels that will be important to the success of credit unions. “Online will become the most dominate delivery channel,” he said. “Cell phones will not be primarily used for talking, and mobile banking will be critical to remain in the game.” Michael Downey, executive benefits specialist for CUNA Mutual Group, focused on “Talent, Benefits, and Your Balance Sheet” and addressed executive benefits and compensation. “It is possible to customize executive benefits plans, which can be extremely flexible and determined by personal goals,” he said. The conference ended Wednesday.

Michigan league CU association to combine

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PLYMOUTH, Mich. (1/22/09)--The Michigan Credit Union League (MCUL) and the Michigan Association of Credit Unions (MACU) signed a management contract that will align the two organizations and allow MACU's membership to use MCUL services. The contract keeps the MACU structure and board of directors in place until Dec. 31, 2010, while immediately offering MACU credit unions access to MCUL's services (Michigan Monitor Jan. 26). Ninety-five percent of Michigan’s credit unions are affiliated with the MCUL and MACU structure. MCUL President/CEO David Adams said that keeping the MACU structure for an additional two years will provide oversight of the transition and assure that MACU credit unions’ needs are met. When MACU CEO Linda Schepperly retires March 1, Adams will serve as president/CEO of both organizations. “This alliance is a natural progression, given the incredible rate of consolidation within the credit union industry,” Adams said. “All of the merger activity puts pressure on associations to provide value for the dues dollar. “This alignment will provide value to MACU credit unions, which will benefit from access to a broader suite of services, but I am confident the alignment also will provide value to the entire credit union community in Michigan.” Jim Henmueller, MACU chairman and CEO of Chief Pontiac FCU, Pontiac, said the move “is a positive step toward further unity in the Michigan credit union industry. This agreement provides an enhanced value for MACU credit unions by giving them access to the MCUL’s advocacy efforts, information and education services, fee-based services and opportunities for networking.” “Given the current economy, finding services for less is a must,” said Andy List, MCUL chairman and CEO of Option 1 CU, Grand Rapids. “It should be seen as a welcome sign that credit unions and their associations are finding ways to help credit unions get the services they need from an association at the lowest possible dues cost.” Existing MACU credit unions can participate in the dual-membership arrangement until Dec. 31, 2010. MACU credit unions can join the MCUL and Credit Union National Association directly after Jan. 1, 2011. MACU’s remaining two employees will continue to serve as resources for MACU and MCUL.

N.J. league PSG boards choose officers

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HIGHTSTOWN, N.J. (1/21/09)--The New Jersey Credit Union League's board of directors elected table officers for 2009, according to the league's newsletter, The Weekly Exchange (Jan. 19). They are:
* Chairman, Shawn Gilfedder, McGraw-Hill Employees, FCU, Hightstown ; * Vice chairman Leo Ardine, United Teletech Financial FCU, Red Bank ; and * Secretary/treasurer, Lou Vetere, Garden Savings FCU, Parsippany.
Also, the league's service corp, Professional Services Group, named these credit union leaders as board members:
* Issa Stephan, First Financial FCU, Toms River: * Linda McFadden, XCEL FCU, Secaucus; * Chris Chichester, Jersey Central FCU, Cranford; * Raymond Del Nero, Merck FCU, Rahway; and * Calvin Jackson, St. James AME FCU, Newark.
League President/CEO Paul Gentile serves as chairman of the PSG Board and league Chairman Gilfedder serves as vice chairman.

Shared branches important to boomers says CO-OP

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RANCHO CUCAMONGA, Calif. (1/21/09)--Shared branching is becoming increasing important in serving baby boomers and seniors, according to the CO-OP Shared Branching. "Forrester Research reports that fewer than half of all baby boomers and only 40% of seniors check their bank balances online," Carroll Beach president/chief operating officer for CO-OP Shared Branching, says in LoneStar Leaguer Jan. 20). "That's more than 39% of the country's population--some 116 million people." The two groups haven't developed a full trust in alternative forms of banking and still prefer the personal touch, Beach said. Forrester also made note of a demographic group larger than baby boomers and senior segments and which also isn't using the full range of online banking services. Except for Gen X users, many consumers who signed up for online banking still are not using the Internet to check account balances, transfer funds or pay bills. Roughly 23% of community bank customers use online services, even though they are enrolled in online banking. "As our society continues to be more on the move, shared branching is keeping up with the times--reducing credit unions' operational and branch-maintenance costs and ensuring convenience for members at any life stage," Beach said. CO-OP Shared Branching is based in Rancho Cucamonga, Calif. It represents 65% of all national shared locations and 80% of credit unions participating in shared branching.

Card processors breach may be the largest yet

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PRINCETON, N.J. (1/21/09)--Card payments processor Heartland Payment Systems announced Tuesday that its processing system was breached last year by a malicious software program in what could be the largest data breach to date, with possibly more than 100 million credit cards compromised. The information breached included card numbers and cardholders' names. It did not include merchant data, cardholders' Social Security numbers, unencrypted personal identification numbers, addresses or telephone numbers, said the Princeton, N.J.-based company in a press release. None of Heartland's check management or Canadian or payroll systems or its recently acquired Network Services and Chockstone processing platforms were affected , said Heartland. Heartland provides card processing for 250,000 business locations nationwide, most of them small businesses. About 40% of the transactions it processes are from small to mid-sized restaurants throughout the country. It also serves community banks, pay-at-the-pump gas stations, school campuses, parking lots and hospitality businesses. It handles more than four billion transactions a year, according to its website. "We found evidence of an intrusion last week and immediately notified federal law enforcement officials as well as the card brands," said Robert H.B. Baldwin Jr., Heartland president/chief financial officer. "We understand that this incident may be the result of a widespread global cyber fraud operation, and we are cooperating closely with the U.S. Secret Service and Department of Justice," he added. The company was alerted by Visa and MasterCard, which noticed suspicious activity among processed card transactions. Heartland took action to further secure its systems and will implement a next-generation program to flag network anomalies in real-time to assist law enforcement. Last week it found out the source of the breach: malicious software planted on the company's payment processing network that recorded payment card data as it was sent for processing to Heartland. Heartland has created a website,, to provide more information and advise cardholders to examine their monthly statements closely and report suspicious activity to their card issuers. Cardholders are not responsible for unauthorized fraudulent charges made by third parties, it said. It did not address who would be responsible if card issuers have to replace thousands of cards.

CU reports 177 increase in fin ed program

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HARRISONBURG, Va. (1/21/09)--DuPont Community CU (DCCU) has experienced a 177% increase in the number of participants in financial education classes and programs during the past two years, according to DCCU. The $629.4 million asset, Waynesboro, Va.-based credit union saw a 50% increase in contacts made through schools and organizations from 2007 to 2008 (Daily News Record Online Jan. 20). The credit union staff contacted 5,787 people in 2008 through financial education classes and programs. In 2007, the number of contacts was 3,852, and in 2006, it was 2,089. The financial education programs are age-appropriate and can be offered at public schools to help teachers meet Standards of Learning requirements. The credit union also teaches adult financial education classes. DCCU has conducted classes for 11 years. The classes are free and open to members of the credit union and the general public.

Michigan governor signs IDA-MBT credit bill

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LANSING, Mich. (1/21/09)--The Individual Development Account (IDA)-Michigan Business Tax (MBT) credit bill--one of the final pieces of Michigan Credit Union League (MCUL)-backed legislation pushed through during the 2008 lame duck session--was signed by Gov. Jennifer Granholm Jan. 9. Public Act 451 of 2008 allows companies who contribute to IDAs held at financial institutions to claim up to a 75% credit against their Michigan Business Tax liability, with up to $1 million available for the credit each year (Michigan Monitor Jan. 19). “This law will be beneficial for credit unions as we begin to see further IDA contributions from businesses, while more Michigan workers will be encouraged to open an IDA with a trusted financial institution,” said MCUL Executive Vice President Patrick La Pine. “The MBT credit incentive is helpful in this weak economy--not just for businesses, but also for consumers looking to improve their lives and for their financial institutions.” Individuals and entities making IDA contributions are eligible for an income tax credit, but the credit had yet to be extended to businesses making contributions. The legislation was introduced by State Sen. Tupac Hunter (D-Detroit). MCUL also worked closely with the Granholm administration, State Sen. Nancy Cassis (R-Novi), and State Sen. Mark Jansen (R-Grand Rapids) to pass the bill.

Check out CUs blog from inauguration

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SPOKANE VALLEY, Wash. (1/21/09)--Numerica Vice President of Lending Gene Fitzpatrick was blogging live Tuesday from the presidential inauguration in Washington, D.C. His blog can be accessed through the Spokane Valley, Wash.-based credit union’s website. Fitzpatrick also is working as a correspondent for the Spokesman-Review, a daily newspaper in Spokane. Fitzpatrick received tickets to the inauguration from Rep. Cathy McMorris Rogers (R-Wash.) at her office in Washington, D.C. Fitzpatrick had coffee with her and talked about the Troubled Asset Relief Program from his credit union’s perspective. McMorris Rogers invited Fitzpatrick back for a tour today, according to the blog. On Tuesday, Fitzpatrick arrived at the ticketed area for the inauguration and did a live interview with radio station KXLY 920 AM. The area was crowded, and it was difficult to communicate, he noted. Fitzpatrick is camped out in a recreational vehicle at American University, where his daughter, Erin, is a sophomore. Numerica, Spokane Valley, Wash., has $784 million in assets. For more information, use the link.

League CEOs letter to editor addresses tax issue

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ALBANY, N.Y. (1/21/09)--A letter to the editor written by Credit Union Association of New York President/CEO William J. Mellin responds to an earlier letter that suggests taxing credit unions the same as banks. Mellin's letter was published Sunday in the Watertown Daily Times. It chides the original writer for not doing his research. Had he done so, said Mellin, "he would have known that credit unions do pay taxes, including property and employer taxes. They do not, as Buckingham states, 'operate without any tax liability whatsoever." Mellin outlines the credit union difference, noting that credit unions' exemption comes from their structure as non-for-profit financial cooperatives that return all earnings to their members in the form of dividends and enhanced services. "In contrast, banks are required to pay corporate income tax because they are in the business of returning profits to paid board members and outside stockbrokers, not their customers," Mellin wrote. "Every taxpayer benefits from the credit union presence in the marketplace--they help drive down costs and fees associated with banking," he said, before describing them as local, member-owned, democratically controlled organizations "that represent a distinct financial alternative that individuals elect to join." Mellin also points out that credit unions don't engage in subprime lending and rampant loan origination without regard to credit risk that is at the core of the current financial crisis. "In fact, the practices of credit unions should be viewed as a model for ensuring the financial safety of all Americans," he wrote. "Since their beginnings a hundred years ago, credit unions have weathered every financial storm since the Depression of the '30s without ever costing taxpayers a penny or compromising members' deposits. Credit unions are not part of today's financial problems, but they are playing a part in the solution," he concluded. For Mellin's entire letter, use the link.

Invest in America heads to auto show

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LANSING, Mich. (1/21/09)--Invest in America --the vehicle loan programs formed by credit unions with General Motors and Chrysler recently--is at the North American International Auto Show, garnering additional publicity. According to the Michigan Credit Union League, the program is producing two 15-second electronic billboard displays at the show, which ends Saturday at Cobo Center in Detroit. The billboard will air twice per hour on two Jumbotron monitors inside and outside the conference center. One of the Jumbotrons will be visible for people driving by the center. The league estimates that the spots could be seen by more than 70,000 attendees and several hundred thousand more who drive by the event (Michigan Monitor Jan. 20). The ad focuses on the program's opportunity for more than 90 million credit union members nationwide to participate in the credit unions' agreements with the two auto manufacturers. For more information about the programs, use the link.

Iowa CUs raise 130000 for childrens hospitals

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DES MOINES, Iowa (1/21/09)--Iowa credit unions raised $130,401 for the Children’s Miracle Network in 2008. The amount is an increase of 6% from $122,956 in 2007. The funds were raised through the Iowa Credit Union Foundation. Linn Area CU, Cedar Rapids, raised the largest contribution of $17,533 through its “Credit Unions Love Kids” golf outing. Linn Area CU has $178 million in assets. The Iowa foundation also raised $6,500 for the network through its “Links of Love” promotion. Children’s Miracle Network raises money for more than 170 children’s hospitals nationwide. The Iowa foundation has helped Children’s Hospitals of Iowa City, Sioux City and Omaha to support research, purchase new equipment and provide educational materials.

CU System briefs (01/20/2009)

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* WASHINGTON and MADISON, Wis. (1/21/09)--This is the official legal notice to all members of the Credit Union National Association's (CUNA) 75th Annual General Meeting (AGM), scheduled for Monday, Feb. 23 at 11 a.m. at the Washington Convention Center in Washington, D.C. It will be held in conjunction with CUNA's Governmental Affairs Conference. The AGM will update member credit unions and leagues on the actions of their association over the past year. John Schneider, entertainer and co-founder of Children's Miracle Network, will be a special guest speaker … * ALBANY, N.Y. (1/21/09)--U.S. Rep. Joseph Crowley (D-Metropolitan) lunched with and spoke to the Metropolitan chapter of the Credit Union Association of New York. He discussed leadership changes in Washington, D.C.; the bailout measures; and how the measures affect credit unions. He said that now, more than ever, credit unions need to step up their advocacy efforts and become involved in taking their voices, separately and collectively, to their federal representatives. Crowley is chief deputy whip and the highest-ranking New York member of the House Democratic Caucus leadership. He sits on the Committee on Ways and Means and the Committee on Foreign Affairs. Pictured are, from left: Bob Dibaro, Local 804 FCU; Rosanna Creo, UNFCU; Rob Nemeroff, Melrose CU; Rep. Crowley; Robin Myers, Melrose CU; and Amy Kramer, Credit Union Association of New York, which arranged the meeting. (Photo provided by the Credit Union Association of New York) … * GRAND RAPIDS, Mich. (1/21/09)--CU*Answers, a credit union service organization (CUSO) based in Grand Rapids, announced the return of $400,000 in patronage dividends to its credit union owners for 2008. The return is a 100% increase over the $200,000 patronage dividend the CUSO announced in 2007. In the previous five-year period, CU*Answers returned $1.250 million in patronage dividends. Bob Frizzle, chief financial officer, said the 2008 dividends, when added to other returns given to its owners, have resulted in more than $1.14 million returned to owners in 2008 …

Numerica vp on frontline at inauguration

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SPOKANE VALLEY, Wash. (1/20/09)--Numerica CU Vice President of Lending Gene Fitzpatrick is on-site at the 2009 Presidential Inauguration in Washington, D.C. Fitzpatrick will report on his experience to Numerica members provide the Spokesman Review newspaper in Washington state with live updates and observations during the inauguration. Due to the scarcity of hotel rooms in the area, Fitzpatrick will pick up a rented Winnebago recreational vehicle and camp in the parking lot of his daughter’s college campus at American University. Erin Fitzpatrick, an American sophomore, will post hour-by-hour observations regarding the inauguration on Numerica’s Gen-Y Blog. Numerica CU is a $785 million asset credit union, based in Spokane Valley, Wash.

Wisconsins GAC kicks off today

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MADISON, Wis. (1/20/09)--The Wisconsin 2009 Government Affairs Conference (GAC) kicks off today in Madison, running through Wednesday. Conference highlights include:
* Office visits with all 132 lawmakers’ offices; * Activist training for novice activists that will provide guidance on how attendees can concisely and effectively tell their stories at the Capitol; * A panel discussion for veteran activists focusing on the state budget and its $5 billion deficit. Sitting on the panel will be David Schmiedicke, budget director for Wisconsin; Todd Berry, president of the Wisconsin Taxpayers Alliance; Joint Finance staff from the legislature; and Jeff Mayers, from WisPolitics, who will serve as moderator; * Speakers, including new Assembly Majority Leader Rep. Tom Nelson (D-Kaukana), new Assembly Chairman Rep. Jason Fields (D-Milwaukee), Senate Assistant Majority Leader Sen. Dave Hansen (D-Green Bay), Senate Minority Leader Sen. Scott Fitzgerald (R-Juneau), Assembly Minority Leader Rep. Jeff Fitzgerald (R-Horicon), and John Coleman and David Cannon, political science professors from the University of Wisconsin-Madison; and * A reception held to network with lawmakers and state officials.
A copy of the Wisconsin Credit Union 2008 Annual Report, which is a synopsis of how Wisconsin credit unions served their communities and 2.2 million members, will be distributed to all Wisconsin lawmakers at the GAC. To see the report, use the link.

CU receives AHP grant from Fed Bank-Atlanta

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ATLANTA (1/20/09)--A credit union is among 85 financial institutions who received more than $43 million from the Federal Home Loan Bank (FHLB) of Atlanta to fund 85 affordable housing projects in 10 states. The grants are offered from the bank’s Affordable Housing Program, which develops owner-occupied and rental housing for very low-, low- and moderate-income families. FHLB Atlanta offers the grants annually. Suncoast Schools FCU, Tampa, Fla., received $600,000 to construct 60 homes in the Hidden Creek at Westlake subdivision. The homes will be built using the USDA Mutual Self-Help Housing Program model. Residents will contribute 600 hours of sweat-equity labor to construct the homes in lieu of a down payment. The FHLB awards ranged from $30,000 to $1 million and were granted to financial institutions in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina and Virginia.

CU System briefs (01/19/2009)

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* FORT WAYNE, Ind. (1/20/09)--A robbery in which a patrolman killed a suspect did not involve a credit union, as reported in trade press. The robbery occurred at People’s State Bank in Avilla, Ind. Several credit unions carry similar names … * GREENSBORO, N.C. (1/20/09)--The Carolinas Credit Union Foundation has awarded a $12,088 Micro Community Grant to the Winston-Salem Rescue Mission to upgrade its facilities. The grant will help improve the kitchen, plumbing and the entrance to the mission's thrift store. From left are: Mike Foster of the mission; Bob Donley of Members CU; Judy Tharp and Suzanne Foster of Piedmont Aviation CU; Jack Braswell of Members CU; and Patty Mauro of Piedmont Aviation CU. Both credit unions are based in Winston-Salem. (Photo provided by the North Carolina Credit Union League) … * FORT COLLINS, Colo. and LOVELAND, Colo. (1/20/09)--Two Larimer County, Colo., credit unions have announced the completion of a merger, effective Jan. 1. Sunrise CU, a $4.1 million asset credit union based in Loveland, has merged into Fort Collins-based Norbel CU, a $109.2 million asset credit union. The merger is not expected to result in any job losses, Sunrise CEO William Becker told the Fort Collins Coloradoan (Jan. 9). According to Ed Bigby, Norbel's CEO, the merger was sparked by a possible $130,000 loss from a single second mortgage that Sunrise financed in a real estate development in Kansas. Sunrise had no delinquent loans on its real estate portfolio. The National Credit Union Administration suggested Sunrise find a partner, said the newspaper. It approached Norbel because it has the same core service philosophy, Becker said … * HARRISBURG, Pa. (1/20/09)--Bob Radakovich, board chairman of Century Heritage FCU, Pittsburgh, died Jan. 12 of cardiac arrest, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 16). He was 67. He worked for the Department of Defense at its Pittsburgh office, inspecting companies that work for the military. Century Heritage President/CEO Vin Cerasulo said Radkovich's know-how and intelligence were an asset to the business. "It didn't take Bob long, once he joined the board of the credit union as a standby, to work his way up to president. Our members and the members of the board trusted Bob." Services were held Thursday …

Its a great year for CU mortgage lending

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MADISON, Wis. (1/20/09)--Credit unions may have a great year in mortgage lending, if the end of 2008 is any indication, according to several sources. Even before the current low rates entered the picture, credit unions had seen an increase in mortgage volume, at $56.5 billion for the first nine months of 2008, according to a CU Members Mortgage newsletter cited by the Association of Vermont Credit Unions (AVCU) (Newslines Express Jan. 16.). Compare that to the same period of time from the previous year, and first-mortgage loan volume has increased by a healthy 26%, the company said. In Vermont, credit unions mirrored that first-mortgage growth through Sept. 30, AVCU said, citing data from the National Credit Union Administration (NCUA) 5300 Call Report. "Nearly $90 million in new first mortgages were booked by Vermont credit unions in that time, raising the statewide credit union first mortgage portfolio to more than $580 million," said AVCU. "Add to that an additional $418 million in other real estate/lines of credit, and Vermont credit unions held just under $1 billion in real estate loans at the end of the third quarter of 2008. With rates so low and consumers having apparently lost some faith in giant national financial institutions, this trend shows no sign of slowing down." In Biloxi, Miss., at least one credit union has experienced a significant hike in applications. Keesler FCU said its mortgage applications and inquiries increased 100% during the last two weeks in December--after rates dropped below 5% for a 30-year mortgage. David Dunnaway, vice president of lending at Keesler, told the Sun Herald (Jan. 11), that there's a noticeable rush to refinance, too. Homeowners might want to refinance if they can drop their current rate by 1.25% or more, Dunnaway said, adding they should also consider the costs associated with mortgages, such as title, legal and origination fees, and how long the buyer plans to live in the house. Some members are surprised it is so easy to get mortgages and other loans from their credit union in a tight credit market nationally. Fred White, a member of Niagara County's FCU, Lockport, N.Y., needed a construction loan for the house he's building. He didn't have any trouble getting a construction loan from the credit union. "I told 'em what I needed. They said, 'no problem,'" he told the Union-Sun & Journal Jan. 11). Niagara County's President/CEO Nancy Kasprzak-Whitmore told the publication that getting a loan from a credit union today is about the same as it was before the economy slipped because credit unions "have always been willing to serve members." Credit unions look at what's good for members--sometimes like a parent, she said. Credit unions have made strides in market share, with the industry's share of the first-mortgage market now at 3.9% from 2.5% a year ago, said CU Members Mortgage's newsletter. That "will likely go up in the coming year as consumer awareness of credit unions rise and members continue to rely on the credit unions they know and trust."

CU model can weather economy Louisiana CUs told

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HARAHAN, La. (1/20/09)--Credit unions have the ability to weather a bad economy, said a Credit Union National Association (CUNA) economist at the Louisiana Credit Union League’s 2009 Economic Outlook program. Steve Rick, CUNA senior economist, opened the program by sharing his insights on the economic outlook and its impact on credit unions, highlighting the many challenges they will face in the coming year. Challenges include the fear of a wrenching recession and possible deflation, rising unemployment, falling home prices, and the financial stimulus package that will soon be implemented by the government. However, the overall the credit union cooperative model is well-suited to weather the economic turmoil, he added. The program aimed to help attendees better understand the current economic situation, where the nation is headed for the rest of 2009, and what the economic struggle will mean to credit unions and their members.
Louisiana Credit Union League’s (LCUL) 2009 Economic Outlook program panelists included (from left): Mike Hooper, chief financial officer, La Capitol FCU, Baton Rouge; Jon Flagg, supervisory examiner, National Credit Union Administration; Donna Wagoner, president/CEO, Ouachita Valley FCU, Monroe; Rhonda Hotard, president/CEO, Louisiana FCU, LaPlace; and panel facilitator Susie Fair, LCUL vice president of member services. (Photo provided by the Louisiana Credit Union League)
One of the program’s highlights was a panel discussion, facilitated by Susie Fair, LCUL vice president of member services, in which panelists shared their perspectives on how current economic conditions will impact credit unions in Louisiana. Panelists included: Mike Hooper, chief financial officer of La Capitol FCU, Baton Rouge; Rhonda Hotard, president/CEO of Louisiana FCU, LaPlace; Donna Wagoner, president/CEO of Ouachita Valley FCU, Monroe; and Jon Flagg, supervisory examiner, National Credit Union Administration (NCUA) . Attendees presented questions to the panelists and each panelist shared thoughts on topics including:
* Specific challenges credit union members are facing during difficult economic times, including delinquency or collections issues; * Asset liability management (ALM) strategies; * NCUA’s exam focus and how it has shifted as a result of the current conditions; * The importance of having a liquidity contingency plan; * Membership growth strategies; * Any impact on credit unions’ credit card portfolios; and * Human resources and hiring opportunities for credit unions.
On the state level, Loren C. Scott of Loren C. Scott & Associates, Inc., former chairman of the Economics Department at Louisiana State University, discussed the opportunities and challenges that Louisiana’s seven metropolitan areas are facing. In the closing session sponsored by Southwest Corporate FCU, Dr. Charles Idol of Asset/Liability Management Consulting & Research, reviewed credit union ALM trends. He noted that rapid share growth and low earnings diluted equity ratios; real estate lending continues to dominate; investment portfolios grew rapidly in 2008; and delinquencies through the third quarter of 2008 were higher in all categories of loans. Idol reviewed projections for Gross Domestic Product growth through 2009, discussed major issues plaguing the economy, and shared his rate outlook for 2009. He made recommendations for ALM strategies for 2009 and shared lessons learned from the credit crisis.

Prolonged recession could affect debit card spending

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CHICAGO (1/16/09)--Data from major card companies indicate that debit cards have so far held their own through the struggling economy—good news for the 58.9% of credit unions overall who offer debit cards. However, analysts warn that a prolonged recession could affect consumers’ debit spending. According to Synergistics Research Inc., debit card penetration has reached 75% to 80% of U.S. consumers. But the unemployment rate is also deepening. Consumers who don’t have jobs and therefore have no earnings won’t be spending, Synergistics CEO William H. McCracken told ATM&Debit News (Jan. 15). Visa reports debit volume at $280 billion for the three months ending June 30, 2008, an increase from $248 billion for that quarter in 2007. MasterCard’s total volume is also up. For the nine months ended in September total debit volume was $232 billion, up 18.3% from $196 billion a year earlier, said the publication. Although the economy hasn’t impacted debit so far in the U.S., other countries are seeing beginning signs of the economy’s effects. The average debit and credit card transaction processed in December through the United Kingdom’s Barclaycard Payment Acceptance was roughly US$71.20--down 1.3% from the period a year before. That didn’t dent the volume of processed transaction, which rose rose 4.7% during the same period. Visa says that nondiscretionary spending on its debit cards, which represent 53% of its global payments transactions, is less susceptible to economic volatilities than credit cards are. Among credit unions with assets of $50 million or more, debit cards are offered by 96% to 99.6% of credit unions with assets of $50 million or more, according to the Credit Union National Association’s Credit Union Service Profile for December 2007.

CUNA sets holiday inauguration schedule

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WASHINGTON and MADISON, Wis. (1/16/09)--The Credit Union National Association’s Washington, D.C. and Madison, Wis., offices will be closed Monday in observance of Martin Luther King Jr. Day. The Washington office also will be officially closed Tuesday because of the presidential inauguration. CUNA’s Washington office address, 601 Pennsylvania Ave., is on the inaugural parade route and in established security zone. The Secret Service has asked downtown employers to limit operations that day. CUNA’s office will provide a perfect vantage point from which to watch the parade for credit union officials, senior staff and guests. For more detail on credit unions’ inauguration activities, check Tuesday’s edition of News Now. Due to the holiday, News Now will not publish a Monday edition. It will resume regular publication Tuesday.

Fitch acts on U.S. Central rating

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NEW YORK (1/16/09)--Fitch Ratings announced Wednesday its latest action regarding U.S. Central FCU’s investments portfolio, saying that the portfolio “remains of very high quality” while its credit quality has migrated lower in the troubled U.S. economy. “USC’s’s investment book remains of very high quality with the majority of the securities being ‘AAA’ rated,” said Fitch in a press release. The actions reflect Fitch’s expectation that U.S. Central will continue to realize losses in its investment portfolio that are meaningful to capital and earnings capacity. Fitch also noted an erosion in funding and liquidity positions. “While Fitch recognizes that the large unrealized loss position overstates the true risk to USC, and the company has the intent and ability to hold its securities until recovery, USC’s investment book does contain securities for which Fitch believes recovery prospects are limited, specifically portions of its non-prime residential mortgage-backed securities (RMB). Thus there is heightened risk of USC recognizing significant ‘other –than-temporary impairment’ changes,” said Fitch. U.S. Central’s Issuer Default Rating (IDR) was moved to “AA” from “AA+” and Fitch removed the IDR rating from Rating Watch Negative. The Individual Rating is now “D” and is placed on Rating Watch Negative. The Rating Outlook for the long-term and short-term IDR is Stable, Fitch said. The Stable Outlook reflects “the extremely high probability of external support” from the credit union industry. Fitch recognized initiatives by National Credit Union Administration (NCUA) to inject liquidity into the system. Because of that support, U.S. Central continues to carry a high support rating of “1” and a high support floor of “AA,” said Fitch. Fitch also said it “does view favorably the company’s recent conversion of $450 million in membership capital shares to a more permanent form of capital, known as Paid-In-Capital (PIC II). “Further, the entire corporate credit union membership base participated in the PIC II issuance, which highlights the strength of USC’s franchise and its importance to its membership base. From a liquidity standpoint, while the company’s liquidity position has become more stressed, USC still has considerable unused contingent funding available,” said Fitch. It said NCUA’s liquidity/guaranty programs “will help relieve some of the liquidity and funding stress at USC and within the corporate credit union system.”

CUs on the Tube What makes a good CU commercial

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MADISON, Wis. (1/16/09)--Credit unions are becoming more creative in their advertising, and two credit unions recently shared their experiences targeting potential members through television commercials. Northern Star CU, Portsmouth, Va., aired a commercial this month to promote its VIP Checking. The product offers ATM fee refunds, interest returns on checking account balances, no minimums and no fees. It’s geared primarily toward Generation Y, so the credit union wanted to promote it creatively, Joseph Scharl, marketing director at the credit union, told News Now. “[Generally] when people think of financial institutions, they don’t want something goofy,” he said. “They want something serious. But people have become numb to bank ads with CEOs talking--they get lost in it.” “For a traditional product, you use a traditional message. But this product is different,” he added. Northern Star hired a firm to create the commercial. In it, a man is hit with dodgeballs labeled “bank fees” as he undergoes his daily routine--visiting the bank, using the ATM, and going to a restaurant. The idea for the commercial came from Austin, Texas-based University FCU, which ran a similar ad last year. The firm’s creative director had spotted the commercial on YouTube, and created a spin-off. “I’d love to say we created it from scratch,” Scharl said. The commercial has broadcast only about one week, but people are already talking about it. The $106-million-asset Northern Star will track its success based on how many sign up for VIP Checking. The product’s form asks where individuals heard about the product, and “everyone so far has been saying they saw it on TV,” Scharl said. The commercial airs during specific shows--like The Daily Show--and on stations like MTV, FX, and Comedy Central to attract youth, he said. Advertising on TV can be costly--and the biggest cost is in the creative process. “Shooting the film yourself is the most expensive,” Scharl said. If credit unions can afford it, he suggested using an outside company that is not affiliated with a television network. “The quality of the product will be better,” he said. Although the dodgeball commercial has generated interest in Northern Star, TV shouldn’t be the only advertising medium. “You have to do a good mix,” Scharl said. Kohler (Wis.) CU has been running commercials for about a year. Its most recent commercial, "Tough Times," which focuses on the struggling economy, aired Jan. 8. Lance Tischauser, Kohler vice president of sales and marketing, told News Now he received feedback on the commercial the day after it ran. “It was pretty encouraging, right off the bat,” he said. “It hit home for people.” Although commercials are a “great way” to market specials, the $226-million-asset Kohler seeks to do more than sell products--it wants to identify with its members, said Tischauser. “We look at it in real life, what do people want or need, and how do we meet those needs?” he said. “People need to know we’re here for them.” Credit unions are often constrained by budgets when doing TV ads. Hiring an outside firm, like Northern Star did, can be costly. Kohler’s marketing team brainstorms ideas and works with a local TV network to create the commercials. Kohler purchased a package with the network that guarantees them a number of prime-time slots, though he said show-specific spots can be cost-prohibitive. “If you want to be on during ‘American Idol,’ it’s extremely costly," he said. Media buying is challenging, said Tischauser. Kohler is located in two different counties, which breaks into three cable markets. The credit union can’t afford to buy all three, he said. Tischauser prefers for the credit union’s commercials run during the news, because while many people filter out to cable stations like Bravo, The Food Network, and HGTV, most “funnel back to the network news,” he said. If credit unions can’t afford to run a commercial at peak time, they should consider running one during an off-peak time. “You will still have a reach,” Tischauser said. “It’s a smaller audience, but it’s worthwhile.” Kohler tries to reach the middle-aged--from 25 to 50 years old--with its commercials. “We try to catch people in their lending years,” he said. But no matter how many commercials run during prime-time slots, the No.1 reason Kohler has been successful is because of its marketing team, Tischauser said. The team works on the ideas collaboratively--no one person is in charge. “It has to be a building mentality,” he said. No matter how far out the ideas are, the team will work with them. To watch some of the credit unions’ commercials, use the link. Kohler’s “Bunny Slippers” introduces a new product at the credit union.

Movement mourns Tom Hughes

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VIENNA, Va. (1/16/09)--Credit unions were mourning the death of Thomas J. Hughes, vice admiral, U.S. Navy (Ret.), and former president/CEO of Navy FCU. Admiral Hughes died Tuesday at Fauquier Hospital in Warrenton, Va., after a short illness. “Admiral Hughes was an admired, respected and highly intelligent leader in the credit union movement,” said Credit Union National Association (CUNA) President/CEO Dan Mica. “His innovative thinking and personal drive helped propel Navy Federal's remarkable growth and success, and his many contributions on the state and national level did the same for the movement at large. He will be long remembered and missed by all of us,” Mica said. During his career over 40 years, Hughes commanded three ships—the destroyer USS John King, the amphibious cargo shp USS Thuban and the oiler USS Chikaskia. He served numerous assignments at the Pentagon, including assistant chief of naval personnel for finance management; director, budget and reports in the Office of the Navy Comptroller; assistant deputy chief of naval operations (manpower, personnel and training); and deputy chief of naval operations (logistics). He became a Navy Federal volunteer official in the early 1970s and served on the board, including several years as chairman. In 1987, he retired from the Navy and became president/CEO of the credit union. He served in that capacity for nearly nine years. Admiral Hughes received the Distinguished Public Service Award from the chief of naval operations recognizing his dedication to men and women in the armed forces. He was passionate about credit union affairs and served with CUNA, as a board member of the National Association of Federal Credit Unions, a member of the Thrift Institutions Advisory Council, a member of the board of the Baltimore branch of the Federal Reserve Bank of Richmond, and advisor to the Visa board. Cutler Dawson, current Navy Federal president/CEO, said, “Tom Hughes’ contributions to Navy Federal as a leader and a visionary built the strong foundation of Navy Federal that members and employees appreciate and enjoy today. He really valued the whole culture of the credit union, and he always had the individual sailor and marine’s best interest at heart. We all miss him.”

CU System briefs (01/15/2009)

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* PHOENIX (1/16/09)--The Federal Bureau of Investigation says one man, dubbed the “Wilson Bandit,” is suspected in three robberies since Oct. 30 of credit unions in Ahwatukee and Tempe, Ariz. The most recent robbery was Monday at Desert Schools FCU’s Ahwatukee’s branch. The other robberies occurred at a Tempe branch of the credit union on Dec. 13 and Oct. 30, 2008. FBI said the man covers part of his face like the character Mr. Wilson on “Home Improvement,” a television show. He hands a teller an envelope with the words “100’s and 50’s only. I have a gun,” written on back of the envelope (The Arizona Republic Jan. 13) … * HARRISBURG, Pa. (1/16/09)--TruMark Financial CU, based in Trevose, Pa., ended 2008 by surpassing the $1 billion asset milestone. TruMark has about $1.1 billion, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 15). The credit union kicked off its 70th anniversary year on Jan. 13 at its annual employee meeting … * SEATTLE (1/16/09)—A former teller at Watermark CU, based in Seattle, and his wife have been charged with stealing more than $170,000 from an elderly woman in North Seattle (The Seattle Times Jan. 13). Michael Lambard, 32, and Katie Lambard, 29, were charged with six counts of first-degree theft and 27 counts of second-degree theft. Katie Lambard worked as a driver for Margaret Martin, who lives in an assisted-living facility. The two allegedly transferred more than $200,000 from Martin’s accounts to their own account and spent it on vehicles. Auto dealers got suspicious and notified authorities … * LANSING, Mich. (1/16/09)--The Mid Michigan Credit Association, a non-profit organization of creditors and collectors, recently disbanded and donated their liquidated funds to the Michigan Credit Union Foundation, according to the Michigan Credit Union League. The donation totaled $8,792. Sam Frangie, vice president of collection for LAFCU and a founder of the association, said most of its attendees and funds received from seminars were from the credit union community (Michigan Monitor Dec. 22) …

Ukrainian parliament considering CU mortgage bill

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KIEV, Ukraine (1/16/09)--Ukraine’s parliament passed a bill at the end of last year that amended laws regarding mortgage activity at credit unions. Bill No. 2256 involved the possible refinancing by credit unions of their activities on rendering mortgage credits, and allowed credit unions to be either founders or members of mortgage organizations, which have the right to raise mortgage assets (Interfax: Ukrainian General Newswire Dec. 17). The bill would help improve the effectiveness of the state over credit union activities, boost the quality of credit union activities, mitigate the risk of credit cooperation system [credit union] players, and increase citizens’ confidence in credit unions.

Credit scores to be offered via CUs banks

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HARRISBURG, Pa. (1/16/09)--Fair Isaac Corp. announced an agreement Thursday to make its credit scores available for free to about 200,000 members of Pennsylvania State Employees CU (PSECU). The agreement was reported in The Wall Street Journal (Jan. 15). Fair Isaac, the creator of the Financing Corporation (FICO) score, said it is working on finalizing other similar deals with major customers. The PSECU arrangement is an expansion of the “Scores on Statements” program, which Fair Isaac mainly offered to credit card customers at Washington Mutual (WaMu). Through the arrangement, consumers receive their FICO scores, along with the major reasons for the score, how actions they take affect their scores, and ways to improve scores. Consumers already can obtain free detailed credit reports--but not a free credit score-- once every 12 months from each of the three major credit-reporting bureaus at PSECU is a $3.2 billion asset, Harrisburg, Pa.-based credit union.

Mayor CUs embrace what banks are forced to do

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NEWARK, N.J. (1/16/09)--In contrast to banks,“credit unions embrace what banks have been forced to do through the Community Reinvestment Act,” said Newark Mayor Cory Booker when he addressed the January meeting of the New Jersey Credit Union League’s Essex-West Hudson chapter.
From left, Paul Gentile, president/CEO of the New Jersey Credit Union League; Cory Booker, Newark, N.J., mayor; and Calvin Jackson, league board director and president/CEO of St. James AME FCU, posed at the January meeting of the New Jersey Credit Union League’s Essex-West Hudson chapter. (Photo provided by the New Jersey Credit Union League)
Booker praised the credit union movement’s values and noted the critical role credit unions play in helping empower individuals and communities. “Credit unions epitomize the very ideals upon which our nation was founded,” Booker said. He commended the league’s legislative initiative to allow credit unions to become eligible depositories for municipalities as a way for credit unions to further support their communities. Booker also mentioned the need for the type of products and services the league and the New Jersey Credit Union Foundation hope to bring to credit unions through the REAL Solutions program, the program to build wealth among middle and low-incomers. He cited Volunteer Income Tax Assistance centers--one component or REAL Solutions--as the type of community outreach for which credit unions are ideally suited. “Mayor Booker is an impressive figure in New Jersey Politics,” said Paul Gentile, league president/CEO. “Credit unions have a tremendous presence in Newark, and we will assist Booker whenever we can in helping him achieve his goal of revitalizing Newark.” Having lawmakers and government officials such as Booker speak at chapter meetings is one way the league is attempting to enhance the state’s chapter system and raise awareness of credit unions, Gentile noted. “With 216 credit unions, 1.2 million members and $10 billion in assets, New Jersey credit unions need to be recognized as a force in New Jersey,” Gentile said. “We will use the chapter system to raise our profile among government leaders.” Elected mayor in 2006 on his second attempt at the office, Booker has earned one of the highest approval ratings of any elected official in New Jersey and has received attention from the national media. Filmmaker Marshal Curry chronicled Booker’s 2002 unsuccessful mayoral campaign in a documentary, “Street Fight,” which was nominated for the 2005 Academy Award for Best Documentary.

Suspect arrested in attack on Self-Help CEO

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DURHAM, N.C. (1/16/09)--Durham, N.C., police said they arrested a suspect Wednesday in the November beating and robbery of Martin Eakes, co-founder and CEO of Self-Help CU and the Center for Responsible Lending. Harry Wayne Massey Jr. was arrested Wednesday at a Durham apartment, police said in a news release. No one else has been charged in the incident (The News & Observer Jan. 15). Massey was wanted for felony possession of stolen property--a cell phone--which he was accused of having in his possession the day after the Nov. 24 attack on Eakes. Eakes was robbed and severely beaten by four men in a parking garage as he left his office Nov. 24 (News Now Dec. 2). He suffered multiple bruises to the head and face, a gash to his forehead that required 15 stitches and a torn bicep (The Herald-Sun Nov. 30). The incident occurred at about 8 p.m. as he was about to enter the parking garage used by employees of Self-Help. The men delivered between 20 and 30 blows, targeting Eakes’ head and face. They took his wallet and cell phone. Eakes said he did not know the men or if they were waiting for him in particular.

Scotland launches new CU fund

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EDINBURGH, Scotland (1/15/09)--Scotland has launched a new fund designated specifically for credit unions, to help them grow and withstand the global economic downturn. The new Third Sector Enterprise Fund of US$366,800 will offer grants of up to $36,680 to help credit unions build capacity and become more sustainable organizations, according to Finance Secretary John Swinney, a member of the Scottish Cabinet. He noted that third sector organizations, including credit unions, face challenges in the economy. “The Scottish Government highly values the contribution the sector can make to creating a wealthier and fairer country--which is why we increased funding by 37% and recently launched the Third Sector Enterprise Fund,” Swinney said. “In these unstable economic times, with other sources of borrowing harder than ever to obtain, the credit union movement offers a refreshing, human scale alternative source of finance, “ said Patrick Harvie, a member of the Scottish Parliament. “This new funding will be a very welcome boost for Scotland’s credit unions, which could be a key part of a truly diverse and sustainable banking system, instead of the UK Government’s vision of a world dominated by a handful of megabanks.” Scotland has about 120 credit unions serving about 200,000 members. They are eligible to apply for government support from the fund or from the Scottish Investment Fund. However, the government decided to dedicate a $366,800 Third Sector Credit Union Fund to help them reach their potential. The fund expects to make about 20 grants over the 2008-2011 period.

Overdrawn accounts net 37 billion in fees

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ST. SIMON’S ISLAND, Ga. (1/15/09)--As their earnings undergo more pressure due to the economy, financial institutions are becoming more reliant on fees from non-sufficient funds (NSF) and overdrawn checking accounts, according to new research. Financial institutions collected $37 billion in NSF and overdraft protection (ODP) fees in 2008, a significant increase since 2004, according to Bretton Woods, a Georgia-based bank strategy consulting firm. The study cites data showing a 7% increase of the fees from 2005 to 2008. Nationally, the average household has more than 12 overdraft transactions per year and pays $368 per year in fees, said the study. The average NSF fee is $28.95. Roughly 20.2 million households with banking accounts account for most (1.02 billion) of the non-sufficient funds. These more “active” households paid $1,472 in annual NSF fees. Not only did the fees increase, but the number of debits presented against insufficient funds soared to 1.28 billion, an increase of 16.3% in the past three years, according to the study. The average U.S. household with a banking account incurs 12.7 NSF fees per year, according to the study, which counted 1.28 billion separate check and electronic NSF item last year. For banks, 74% of reported service fee income comes from NSF/ODP. Bretton Woods estimated that 80% of what little fee income credit unions do charge comes from NSF fees. Banks’ fees, however, are more diverse and cover a range of other types of fees. Credit unions, because of policies such as not charging for ATM transactions, limit fee income to a narrower field, which includes recouping costs of bounced checks. According to the data in the report, banks’ fees in 2008--based on data from the Federal Deposit Insurance Corp.—were more than six times that of credit unions’ fees—based on data from the National Credit Union Administration.

Homes for Our Troops withdraws home offer

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ST. LOUIS (1/15/09)--Homes for Our Troops (HFOT) has withdrawn support for building a home for Army Specialist Scott West in Branson, Mo., because West had pleaded guilty to a felony involving a controlled substance. John Gonsalves, HFOT president and founder, informed the Missouri Credit Union Association (MCUA) about the issue Monday, said MCUA (The Missouri difference Jan. 14). “Upon reviewing their documented response, the Missouri Credit Union Association respects and supports Homes for Our Troops’ actions,” said Rosie Holub, MCUA president/CEO. HFOT provided copies of the initial application to receive support and the partnership agreement West signed. At the time of the initial application in February 2007, West did not have charges filed against him. However, when he signed the partnership agreement in July 2008, he did not disclose that charges were pending at that time. The partnership agreement indicates that HFOT can withdraw support for cause and one cause specifically stated is a felony criminal act by a veteran, said MCUA. “We take very seriously our obligations to our donors and volunteers,” said HFOT in a statement. “That is why our agreements with servicemen and women include a provision that allows us to end a project if it is clear the veteran has committed a felony criminal act.” HFOT said it will move formally to end the West project and the next step will be to make a recommendation to its board. West was arrested Oct. 1 during a traffic stop. He pleaded guilty Dec. 11 to a Class B felony for possession of a controlled substance with intent to distribute. The felony carries a minimum of five years and a maximum of 15 years in prison (News-Leader and St. Louis Post Dispatch Jan. 13). “As you can imagine, this decision and notification was not easy for HFOT,” said Holub, who added it has built 35 homes and plans to complete more than 30 this year. “MCUA continues its support for this organization that builds specially adapted homes for servicemen and women who have been so severely injured fighting for our country,” she added. “We want to assure member credit unions that all funds collected and pledged by Missouri credit unions will go to fund a future home for a severely injured veteran in Missouri and that Missouri credit unions remain firmly committed to Homes for Our Troops,” Holub said.

CUs invited to Canadian working group on credit

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TORONTO, Canada (1/15/09)--Canadian Finance Minster Jim Flaherty is inviting Credit Union Central of Canada--the Canadian national trade association for credit unions--to be part of Canada’s new national working group on credit. Desjardins, Canada’s largest co-operative financial group, also is invited. Executives from individual Canadian banks and the Canadian Bankers Association reportedly met Tuesday in Toronto with Canadian Central and Desjardins (The Toronto Star Jan. 14). It is not clear if the financial cooperatives would become permanent members of the group or take a role only as observers, the newspaper said. A key issue for the group is credit availability for consumers and businesses. The invitation indicates that the federal government--when it reveals its budget Jan. 27--could implement further action to augment credit, the paper said. Flaherty created the group last week in response to growing complaints about access to credit, the paper said. Government officials and bank executives were instructed to look for ways to make loans more accessible.

Pa. foundation grant for small CUs marketing

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HARRISBURG, Pa. (1/15/09)--The Pennsylvania Credit Union Foundation awarded a $29,850 grant to 11 small credit unions to develop an Erie-area marketing website for underserved, select employee group (SEG)-based consumers. The grant approval was the foundation’s first in 2009 (Life is a Highway Jan. 14). Foundation Chairman Norb Kaczmarek, CEO, Erie FCU, promised that his credit union’s marketing department will advise and work closely with the following SEG-based credit unions to enhance their marketing capacities:
* EC & EE Employees FCU, Erie; * Erie (Pa.) Firefighters FCU; * Erie (Pa.) Police FCU; * Erie (Pa.)Times FCU; * Greenleaf Employees FCU, Saegertown; * I.B.E.W. Local 56 FCU, Erie; * Loco & Cont Empl. FCU, Erie; * North East (Pa.) Welch FCU; * PHB Employees FCU, Fairview; * Saint Vincent Erie (Pa.) FCU; and * Tri State Rail FCU, Erie.
Ed Williams, grants committee chairman, and CEO, Discovery FCU, Reading, praised the project’s potential as a prime example of promoting cooperation among small credit unions, and the participating credit unions for combining their financial resources to form a credit union marketing system in Erie.

Massachusetts governor signs three CU bills

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MARLBOROUGH, Mass. (1/15/09)--Massachusetts Gov. Deval Patrick (D) signed three bills that are important to credit unions, according to the Massachusetts Credit Union League. House Bill 1068, an Act Relative to the Operation and Corporate Governance of Credit Unions, permits telephone conference calls for meetings of boards of directors and standardizes member voting procedures by requiring a majority voting standard (E-Weekly Jan. 14). The bill eliminates advance regulatory approval for offering credit cards and safe deposits boxes and provides for the ability to accept utility payments. An outdated 6% per year interest rate cap on deposits was removed, the league said. House Bill 1006, an Act Relative to the Conversion of a Massachusetts Chartered Credit Union to a Federal Charter; establishes legal authority for a state-to-federal conversion, said the league. Senate Bill 2854, an Act Relative to Credit Union Mortgages, changes mortgage lending guidelines for state-chartered credit unions. It eliminates some categories of loan-to-value ratios and uses safety and soundness standards as the primary criteria for mortgage lending. The bill requires that any credit union mortgage written must be eligible for sale into the secondary market and requires written loan policies that incorporate prudent underwriting standards.

Coastal FCU changes teller system

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RALEIGH, N.C. (1/15/09)--Coastal FCU has changed its teller system to allow tellers to help members at multiple locations-even if they are not in the same building. Coastal FCU, Raleigh, N.C., launched Express Teller at two of its branches--St. Albans Drive and Wakefield Commons. The credit union plans to convert its other eight branches by the end of the year. The service will keep the Wakefield Commons branch open later--from 7 a.m. to 7 p.m.--with the potential to extend hours even more in the future. “We can instantly allocate teller resources to match branch traffic,” said Coastal President/CEO Larry Wilson. “That means the system will allow us to serve members faster, handling peaks in branch activity more effectively. It will also make it easier for us to extend our hours of operation and lower the cost of adding new branches.” Tellers on the system will work at the Express Teller Center at the St. Albans Drive headquarters. Coastal has been exploring remote teller service since 2003. Previous services required the teller and member to be in the same building. Coastal has $2.1 billion in assets.

Illinois league kicks off tax-help effort

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NAPERVILLE, Ill. (1/15/09)--Millions of working Americans are eligible for various income tax credits every year, including the Earned Income Tax Credit (EITC), but miss out because they either don't know about them or how to file for them. In response, the Illinois Credit Union League (ICUL) has committed to helping credit unions build a stronger community with its latest initiative-- a free Web resource. The consumer-geared website was designed by ICUL for use by its member credit unions to educate consumers and help them make the most of their tax situation. The site includes a “Maximize Your Refund” section with information on the various tax credits that are available, Volunteer Income Tax Assistance (VITA) details, and other free online tax filing services, and information about credit unions, including how to join. A “Quick Connect” section links to the Illinois State Treasurer's Office, the Federal Trade Commission, and resources available via the Internal Revenue Service. ICUL also has created an outreach action kit to assist with the development of a campaign to market and organize the service. Credit unions will find information--from free marketing material, to detailed information on organizing a community-wide EITC/VITA event. “It is our hope credit unions will support this initiative, and join the nationwide effort in spreading the word,” said Joni Senkpeil, ICUL director of small credit union development.

Ohio CUs pushing small-business loans

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AKRON, Ohio (1/15/09)--Several Ohio credit unions are increasing their small business lending, while other others are exploring the possibility of entering commercial lending. Some credit unions are attempting to fill the void left by banks in the state when many cut back on small business loans ( Jan. 12). Banks’ pricing on the loans is getting quite high, making it difficult for some small businesses to acquire the loans, Mike Baughman, assistant CEO, Buckeye State CU, Akron, told the newspaper. In June, the $79 million asset Buckeye joined a credit union service organization--Cooperative Business Services--that spreads out the commercial loans among it members so no one credit union has to fund a large loan. Thirty-one Ohio credit unions have joined the cooperative. Others plan to do so. The cooperative is owned by nine Ohio credit unions, according to its website. Here’s what some credit unions are doing:
* TeleCommunity CU, Akron, has been involved in commercial lending for the past two years. Efforts in the commercial arena have gone extremely well, and Jack Sarver, TeleCommunity CEO, said he wants to hire a full-time commercial loan officer so the $143.6 million asset credit union can issue more small-business loans, he told the paper. * Vacationland FCU, a $109.8 million asset credit union based in Sandusky, has increased small business loans to $4 million from $700,000 during the past year, Bryan Myers, executive vice president for business services, told the paper. Vacationland has another $3 million of loans ready to be processed, including many equipment loans and real estate loans, he added. * Eaton Family CU makes unofficial commercial loans at present, Fred Siegel, business development manager at the $37.2 million asset, Euclid-based credit union, told the paper. While the credit union issues business loans, it does not use a business application because Eaton does not have the wherewithal to evaluate companies. However, the credit union can issue personal loans to members for business uses, he added. * Cardinal Community CU’s board of directors has been contemplating business lending for awhile and it intends to begin in the second quarter, CEO Jim Hartman told the paper. Although the $142.9 million asset, Mentor-based credit union has some commercial checking and deposit accounts, it has not made loans to businesses, he said. However, he knows there is demand for business loans because he gets frequent calls about them, Hartmann added.

CU System briefs (01/14/2009)

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* SEATTLE (1/15/09)--Seattle Metropolitan CU’s new ad campaign, “Intentionally Left Bank,” is up and running on billboards, buses, and print ads this month. Billboards feature a blank billboard, with the credit union’s logo in the corner and the words, “Intentionally Left Bank.” The credit union says more and more people are intentionally leaving their banks and joining the credit union, “where we are guided by the seven cooperative principles.” For more information, use the link … * CONCORD, N.H. (1/15/09)--A nighttime shooting of a police officer by his supervisor at a credit union building under construction has been ruled an accident, said the New Hampshire Attorney General’s Office (New Hampshire Union Leader Jan. 13). The May 1 incident occurred during a makeshift training session inside the Granite State CU building. After the training session was over, attendees and the instructor, Sgt. Steven Smagula, reloaded their guns. He stayed to answer questions and was demonstrating footwork to use in a quick search, when his gun went off. Officer Joshua Levasseur wore a protective vest that prevented the bullet from entering his chest. No charges will be filed against Smagula … * DENVER, Colo. (1/15/09)--Jeffco CU and Westerra CU--the credit unions serving the two largest school districts in the state, Jeffco Public Schools and Denver Public Schools--announced plans to merge. Through Westerra, members will have access to 11 branches, 150 service center locations and 800 surcharge-free ATMs. Both credit unions share a commitment to financial education, said $162 million asset Jeffco CU’s chairman, Connie Ephland. C. Alan Peppers, president/CEO of $912 million asset Westerra, will continue in that position. The merger is expected to be final on July 1. The full integration of Jeffco’s operations will occur throughout the second half of 2009. The merged credit union will have more than $1 billion in assets and serve 88,000 members … * SIMI VALLEY, Calif. (1/15/09)--Members of Ventura County CU in the Simi Valley area will have no trouble finding their new local office: it’s next door to the old one. “We only moved a few yards,” said Amy Ginnever, branch manager. “But in terms of new features and being able to better serve our members, we’re miles ahead.” Ginnever also noted that one of the first thing new members ask about are auto and home loans. “We let them know that yes indeed, we have money to lend to our members along with some of the lowest rates in town.” Ventura County CU has more than $465 million in assets … * BOSTON (1/15/09)--A New Hampshire woman has pleaded not guilty to stealing more than $200,000 from an unnamed credit union in Massachusetts while she was employed there. Kelly Curley of Nashua, N.H., directed the credit union’s loan department. The charges allege she secured five loans for herself between June 2006 and February 2008 by using a co-worker’s computer to make loan transactions using the names and information of a relative and two friends (Associated Press Newswires Jan. 14) … * JEFFERSONTON, Va. (1/15/09)--Vice Admiral Thomas Hughes, former CEO of Vienna, Va.-based Navy FCU, died Tuesday night after a short illness, according to the $34.7 billion asset credit union. He was CEO of the Navy Federal from 1987 to 1996. Funeral arrangements are pending …

Gunfire exchange in chase injures CU robbery suspect

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MISSOULA, Mont. (1/14/09)--A man suspected of robbing a Missoula, Mont., credit union Monday morning was shot later in an exchange of gunfire with sheriff’s deputies and taken into custody with non-life threatening injuries. The man allegedly entered the Missoula FCU branch on Brooks Street at about 10:15 a.m. with a shotgun, which he fired into the ceiling ( and Associated Press Newswires Jan. 12). Roughly 25 people were in the lobby area—including 20 of the credit union’s 53 employees at the branch and five or six members. No one was injured. Gary Clark, president/CEO of the $275.1 million asset credit union, told local reporters that no one was hurt and the employees followed procedures. Employees who saw the man approaching with the gun hit silent alarms to alert police and cordoned off the area after the robbery. Ironically, the credit union had scheduled a robbery planning update seminar for Tuesday to increase employees’ vigilance because of the poor economy, said the Missoulian. After the robber fled the scene, passersby saw him get into a pickup truck and remove his ski mask. One man followed the suspect. Police eventually stopped the vehicle, and the suspect exchanged gunfire. The unidentified man was in fair condition at a local hospital.

CoastHills FCU to consolidate branches

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LOMPOC, Calif. (1/14/09)--CoastHills FCU, Lompoc, Calif., announced that it will consolidate two of its 13 branches effective Feb. 2. CoastHills’ North Santa Maria branch will move 2.4 miles to the newly renovated South Broadway branch. The Arroyo Grande branch will move to the Branch Street branch one mile away. Walk-up ATM service will continue at the original branch locations. All affected credit union employees will keep their positions at CoastHills ( Jan. 13). The credit union provided maps on its website to show members where to find the new consolidated branches. CoastHills has $626 million in assets.

CU manager killed in traffic accident

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HARRISBURG, Pa. (1/14/09)--Barbara-Ann Horning, treasurer/manager of Springdale P P G FCU in Export, Pa., was killed this weekend in a weather-related, three-vehicle accident on the Pennsylvania Turnpike, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 12). Horning, 51, a passenger in a pickup truck driven Saturday by her husband, Jan, 53, was pronounced dead at the scene. Jan Horning was taken to UPMC Presbyterian hospital in Pittsburgh with a head injury. The Hornings’ truck was exiting the turnpike at the Irwin, Pa., interchange when it struck a sport utility vehicle in front of it, driven by Heath Shilling, 30, of Irwin. The impact forced Shilling’s truck off the ramp causing it to flip over. He was also injured and transported to Forbes Hospital. The Horning vehicle then struck an International box truck driven by Lanny Confer, 22, and left the highway and overturned. Police said the Horning vehicle was speeding but the accident is still under investigation ( Post-Gazette Jan. 12). Springdale P P G FCU is a $1.481 million asset credit union with one branch in Export.

CUs have own version of economic stimulus package

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MADISON, Wis. (1/14/09)--Credit unions nationwide are providing their own version of an “economic stimulus package” to help consumers during challenging economic times. In addition to their usual efforts and the participation in the national Invest in America auto loan program, some credit unions are providing extra help to stressed members. Here are the efforts of a few:
* Resource One CU, a $265 million asset, Dallas-based credit union, is offering financial solutions with its “Resource One Economic Stimulus Package” that includes rates up to 4% interest on 36-month certificates of deposit; rates as low as 4.55% on auto loans; a skip-a-payment program that allows members to skip a loan payment for one month to help ease cash flow; and referral rewards in which members can earn $25 by referring a friend or colleague to open an approved checking account with direct deposit or an approved auto loan. * Neighbors CU, a $205.6 million asset, St. Louis-based credit union, began a promotion for qualified members who had a car loan, last summer when gas prices reached an all-time high. The promotion involved a drawing for eligible members in which the winner won free gas for one year. Neighbors will provide winning member Steven Kessler $400 per month for a year to pay for his gasoline (The Missouri difference Jan. 7). * Members CU, a $209 million asset, Winston-Salem, N.C.-based credit union, started offering members its Holiday Skip-a-Pay program in November. The program allows members to extend the due date on any non-mortgage loan--without fees--for one month. “These extensions not only made the holiday a little bit brighter for our membership, our records show that this huge sum of money was likely spent right here in North Carolina,” Jack V. Braswell, Jr., Members president/CEO, told the North Carolina Credit Union League (The Weekly Update Jan. 9). * Credit Union of New Jersey (CUNJ), a $240.2 million asset, Ewing, N.J.-based credit union, created a loan to help with financial burdens that come with the holidays. CUNJ’s Holiday Loan allowed members to borrow $1,000 with a low, fixed-rate loan. CUNJ also eased qualification standards to provide the loan to as many members as possible, it said. In the two-week period that the loan was available, nearly 1,900 members took advantage of the promotion at six CUNJ branch locations (The Weekly Exchange Jan. 9). * Abilene (Texas) Teachers FCU, with $215.2 million in assets, said it will distribute about $500,000 in rebates to its members in January. The credit union is returning 7.5% of the interest members paid on loans during 2008. The rebate is being applied to all member loans other than credit cards and real estate loans. The funds are distributed into members’ savings accounts through direct deposit (reporter Jan. 7). * Atlanta-based CDC FCU, a $162.8 million asset credit union, announced a new Member Rewards benefits program last month for the community. The program serves as an outlet for members to receive more products and services from the credit union. In 2008, members were offered an auto loan rate of 4.4%, a six-month certificate of deposit rate of 7.5%, and grant funding for mortgage loans. Overall, more than $20 million has been loaned to members for consumer loans, and $21 million in mortgage loans. The credit union received about $22 million in deposits. “We are well-prepared to work with our members through troubled economic times, and we look forward to being a viable option for non-credit union members,” said Betsy Mercier, CDC president/CEO. * FAA CU, a $331.2 million asset, Oklahoma City-based credit union, distributed nearly $500,000 in year-end interest rebates and dividend bonuses to more than 40,000 members in 2008. The credit union has distributed profits to its members in the past eight years. It increased the percentage to 3% from 2% this year to help members through the economic crisis (The Oklahoman Dec. 11).

Scams continue targeting CUs consumers

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MADISON, Wis. (1/14/09)--Jim Bishop, a member of Park View FCU, Harrisonburg, Va., was so busy preparing for the upcoming holiday season last December that he didn’t suspect anything was wrong when a scammer called him on Christmas Eve saying his account had been suspended. Bishop received the call at 3:30 p.m. Bishop was told his Visa account had been suspended, and was asked to verify his card information. Bishop, who was in the middle of wrapping gifts and preparing food, provided his personal information to the “legitimate”-sounding individual ( Jan. 3). Shortly after hanging up, Bishop suspected that he had been duped. He quickly called Park View FCU, but received a recording that the credit union had closed at 3 p.m. for the holiday. Bishop reported his check card stolen, but worried that his accounts were at risk. He called a credit union employee, Kent Dayton, at his home. Dayton went to Park View’s head office and locked the accounts, and then called Bishop to verify that no money was taken. The day after Christmas, Bishop and his wife went to Park View to explain what had happened. The credit union assured them that they did not lose any money, and helped them apply for a new check card. The scam Bishop encountered is similar to other scams credit unions have reported across the nation. Members and nonmembers of Three Rivers FCU, Fort Wayne, Ind.; Monroe County Community CU, Monroe County, Mich.; and Patriot FCU, Chambersburg, Pa., were called by scammers asking them to provide personal information to re-active credit cards (The Journal Gazette Jan. 7, Jan. 12, and The Public Opinion Jan. 13). Beaumont, Texas-area residents received text and voice messages from scammers pretending to be from MobilOil FCU on Jan. 6. The scammers told recipients to call a phone number, and when they did, they were asked to provide credit card numbers. Few MobilOil members responded to the calls, Gina Tweekrem, Mobiloil FCU president told The Beaumont Enterprise (Jan. 7). “Our members have really been smart,” she said. Cape Regional CU, Cape Girardeau, Mo., warned its members about an e-mail identity theft scam last week in it. Members received e-mails asking them to call a 1-800 phone number to reactivate their credit and debit cards ( Jan. 4). The Maine Credit Union League also is warning credit union members to watch for suspicious e-mails asking them to re-activate ATM cards. The e-mail “looks real,” Jon Paradise, governmental and public affairs manager for the league, told the Bangor Daily News (Jan. 2). “The e-mail is a scam,” he said. “It’s very scary.”

Nominations for 2009 CUNA committees due Feb. 27

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WASHINGTON and MADISON, Wis. (1/14/09)--Nominations are now being accepted for the 2009-2010 Credit Union National Association (CUNA) committees, which will be appointed by the CUNA Executive Committee after its upcoming Annual General Meeting. Nominations are due by Feb. 27. They can be submitted through the credit union’s CUNA Board representative or league president or online by using the link. Potential committee members should be knowledgeable, dedicated and familiar with the important issues the committee will address. Although there are exceptions, the Executive Committee’s general guideline on committee term limits is to replace members who have served on the same committee for more than three or four years. At its September 2006 meeting, the CUNA Board of Directors approved a recommendation from the Renewal Review Committee that would encourage the increased engagement of volunteers in CUNA’s governance, especially in the existing structure through committee assignments. The completed nomination information should be sent to Teresa Hanson at Once all recommendations are recorded, they will be forwarded to the Executive Committee.

Online registration for World CU Conference opens

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MADISON, Wis. (1/14/09)—The World Council of Credit Unions (WOCCU) has launched online registration for the 2009 World Credit Union Conference in Barcelona, Spain, July 26-29. Participants can register online and secure their hotel accommodations. Use the link to register for pre- and post-conference tours of Barcelona. WOCCU says hotel and tour space are limited. The $100 discount for early registration ends May 20. Returning to Europe for the first time in two years, the 2009 conference is being held in cooperation with the Spanish National Association for Credit Cooperatives (UNACC) and Banco Cooperativo Español, the national wholesale cooperative bank for credit cooperatives. Spain's credit unions--known as rural financial cooperatives--serve more than 10 million clients through 5,000 branches. The conference agenda will feature keynote speakers and educational breakout sessions focusing on four themes that address contemporary challenges to credit unions: relevant topics for developing credit union movements; finance and operations; strategy and leadership; and sustainability. The conference will debut a new event. The Global Women's Leadership Forum--which brings together female credit union CEOs and executives from around the world for an invitation-only peer-learning session. Donors who support the greater Global Women's Leadership Initiative at the $250 level or above will be invited to a special networking reception on July 26, before the Opening Ceremony. Other conference highlights include the Seventh Annual International Regulators' Roundtable and WOCCU's Young Credit Union People Program for attendees under the age of 35. For more information, use the link.

O.U.R. FCU granted 90000 for homeowner counseling

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EUGENE, Ore. (1/14/09)--O.U.R. FCU received grant funding for several programs that will help the Eugene, Ore.-based credit union build upon its efforts to provide personal service to residents of Lane County. A $90,000 grant from the Housing and Urban Development (HUD) via the National Federation of Community Development Credit Unions (NFCDCU) will allow the $4.1 million asset O.U.R. to continue offering free home ownership counseling presented in three formats: the Lifeline Financial Education peer environment program, one-on-one financial education, and HUD’s NeighborWorks Realizing the American Dream curriculum--which also includes one-on-one interaction. During 2007 and 2008, a similar grant allowed O.U.R. to provide personal assistance to more than 1,600 Lane County residents. O.U.R. is one of two Oregon credit unions that have received HUD grant funds. “I want to extend a special thanks to U.S. Rep. Peter DeFazio (D-4th) and U.S. Sen. Ron Wyden (D) for their continued support of HUD’s home ownership counseling program. Every year they come through with letters of support here locally and nationally,” said Loretta Moesta, CEO of O.U.R. FCU. In another area of financial counseling, the credit union received a $60,000 grant from the Human Services Commission of Lane County to provide financial education to individuals who participate in the county’s qualified energy assistance programs. O.U.R. FCU was also selected as an Internal Revenue Service Volunteer Income Tax Assistance (VITA) Program. The VITA Program offers free tax help to people with low- to moderate incomes--generally, $42,000 and below--who cannot prepare their own tax returns. The program offers free electronic filing. O.U.R FCU is the sole credit union VITA site in Oregon. A $5,000 grant through the NFCDCU has helped the credit union offer this service. The credit union received a $15,000 grant from the National Credit Union Administration to implement a debit card program, which will provide greater convenience to the credit union’s membership. “It’s a tremendous point of pride for us to be able to offer a variety of financial assistance to our community,” Moesta said. “The feeling that we’ve lived up to our philosophy of ‘people helping people’ is never stronger than when we know that we’ve helped a family keep its home, or we’ve heard that because of the credit union, a person has been able to reestablish credit. "As a member-owned financial cooperative, we aren’t tied to a credit score--we are able to work within our regulations to meet the needs of our community,” he added.

CU System briefs (01/13/2009)

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* FERNDALE, Wash. (1/14/09)--A man who slashed a woman’s throat outside an ATM at a credit union branch July 28 was sentenced to 10 years in prison Monday. Joseph Ryan Smith, 20, pleaded guilty to first-degree assault with a deadly weapon--a box cutter. Samantha Shields, 25, of Ferndale, was withdrawing money from the Ferndale branch of Bellingham, Wash.-based Whatcom Educational CU, when the attack occurred. She suffered several cuts on her neck and jaw that required more than 50 stitches. Employees in the credit union heard Shields’ screams and chased the assailant away. Smith was arrested an hour later. Shields testified that if it had not been for the credit union’s employees, Smith would have killed her (The Bellingham Herald Jan. 12) … * VANCOUVER, Wash. (1/14/09)--Police in Vancouver say the same man may be responsible for robbing Vancouver-based IQ CU twice in six days. The robberies occurred Monday and the previous Wednesday, Jan. 7. In Monday’s robbery a gunman wearing a blue flannel shirt over two hooded sweatshirts with a hood pulled over his head robbed the credit union, then fled on foot. He put the money in a plastic bag. Last week’s robbery suspect wore blue jeans, a black hooded sweatshirt with a black hooded jacket that had a hood pulled over his head. The jacket had a Nike logo and the word “Nike” in white lettering ( Jan. 13) … * HIGHSTOWN, N.J. (1/14/09)--The New Jersey Credit Union League has announced it has teamed up with REAL Solutions for Low Wealth Households, the program from the National Credit Union Foundation (The Weekly Exchange Jan. 5). The New Jersey Credit Union Foundation provided the financial support to bring the program to the state. The league will provide staffing support and oversee the program. REAL Solutions initially will be available to about 20 credit unions, at no cost to participate … * RALEIGH, N.C. (1/14/09)--State Employees’ CU (SECU) based in Raleigh has launched Mobile Access so members can securely view and manage their accounts from a Web-enabled cell phone and more than 13,000 different types of mobile devices. Using their mobile device’s Web browser, SECU members can log in to secure Mobile Access from the credit union’s website,, and check account balances, view transactions, transfer funds between SECU accounts and pay bills with BillPay. They can locate any of the credit union’s 223 branches and more than 1,000 Cash Points ATMs with an enhanced Google Maps feature (The Weekly Update Jan. 9) …

Southeast Texas in good shape but feels credit pinch

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FARMERS BRANCH, Texas (1/13/09)--Banks and consumers are feeling a growing financial pinch from credit card debt in Southeast Texas, an area hit with losses from Hurricane Gustav and Hurricane Ike, says the Texas Credit Union Foundation in an article in the Beaumont Enterprise (Jan. 10). The average American has 11 credit cards and about $11,000 in debt, Jill Pharr, executive director of the foundation, told the newspaper. Many larger banks, she said, face the effects of dealing with larger loans and facing bigger financial losses. Most residents are paying their debts over a year now--instead of the standard six months, said the article. While concern is growing, others interviewed maintain that Southeast Texas is weathering the credit crisis better than other areas. Financial institutions take proactive measures to ensure consumers keep up with their payments. Because its membership base is smaller, DuPont Goodrich FCU, based in Nederland, Texas, is able to provide one-on-one financial counseling to ensure the debt doesn’t affect the area as much, said Clint Wilson in the article. Wilson is marketing manager of the $157.4 million asset credit union. He noted the credit unions has to maintain a “really aggressive stance” to make sure it can provide what members need, but members must be active in financially responsible measures as well. Other credit unions are granting extensions of up to 60% forgiveness for some credit card debts and offers of consolidation loans abound, Pharr said. Credit counseling services are seeing an uptick in client activity, also. Credit cards represent about 4% of the entire loan portfolio of credit unions, according to the article, citing statistics from the Texas Credit Union Profile. As of September, the state’s credit unions reported a 1.61% credit card delinquency 60 days or more, up from 1.32% a year earlier. Credit unions have an 8.7% market share of all credit cards issued.

SandP completes review of seven corporates

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NEW YORK (1/13/09)--Standard & Poor’s (S&P) Ratings Services has taken ratings actions on seven corporate credit unions while emphasizing that the corporate credit union industry remains healthy, has a low risk profile and solid liquidity, and exhibits adequate financial profiles. Ratings were lowered for:
* Constitution Corporate FCU, * Corporate Central CU; * Corporate One FCU; * Members United Corporate FCU; * Southeast Corporate FCU; * Southwest Corporate FCU; and * Western Corporate FCU.
In a press release, WesCorp noted that the announcement indicated that its rating action was based “primarily on our re-evaluation of the industry as well as our concern about the potential for material write-downs in WesCorp’s securities portfolio, particularly, but not limited to, its collateralized debt obligation book.” However, S&P did remove WesCorp from negative watch, citing “its strong franchise within the heavily regulated cooperative credit union industry and its adequate financial profile, which is highlighted by good liquidity but low risk-adjusted capital.” WesCorp Senior Vice President/ Chief Financial Officer Jim Hayes said Friday that 100% of the securities in its portfolio at the time of purchase were either government-backed or were rated by both S&P and Moody’s as AAA or AA—the two highest rating categories. The action “not only demonstrates how the market devaluation we’re experiencing is impacting our portfolio, it also points to the trend we see occurring among rating agencies of becoming more conservative in the way they are evaluating the portfolios of all financial institutions,” Hayes said. S&P began its announcement saying its review of corporate credit unions was undertaken in light of its recent lowering of the U.S. Banking Industry Country Risk Assessment. The agency also reported its key rating factors are largely the same as the considerations that drove its recent decision to lower the ratings on 11 major U.S. and European financial institutions. It reported that it is concerned about “the potential for further deterioration in the operating environment, including intensifying pressure on the valuation of mortgage-related structured securities the corporates hold. The rating actions also take account of our increased emphasis on capital and confidence sensitivity as key rating factors. “Overall, we believe the corporate credit union sector/industry remains healthy. These institutions have a comparatively low risk profile, solid liquidi6y and exhibit adequate financial profiles,” S&P said. “A testament to the overall and individual health of the corporates is that despite the unprecedented challenges of the prolonged credit crisis, the rated corporates have been able to hold their structured securities portfolios without compromising their ability to perform their key roles as investment vehicles and liquidity providers to their members.” S&P said that its review of U.S. Central FCU is not completed and will be finished within the next few weeks.

Brokerage CUSO COO charged in 2.5 million embezzlement

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RYE, N.Y. (1/13/09)--The former chief operating officer of Affina Brokerage Services has been charged with first-degree larceny. Affina Brokerage Services is a subsidiary of Rye, N.Y.-based USAlliance FCU. John Walsh, 53, is accused of embezzling $2.5 million from Affina. Police say he transferred stock from Affina into his own accounts and sold it for profit. He also used fake stock positions as loan collateral ( Jan. 8). Walsh surrendered to police Jan. 7. He will go to court Jan. 27. USAlliance FCU has $680 million in assets.

CU System briefs (01/12/2009)

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* LOGAN, Utah (1/13/09)--An ATM at the Logan, Utah, branch of Deseret First CU gave out free cash to anyone making a “deposit” with an empty slip for several months. As a result, three sisters in their 30s collectively obtained $25,000 in supposed deposits credited to their accounts from April 22 through July 7. The three didn’t conduct transactions. Instead, they hit a cancel button after inserting an empty deposit envelope, but the machine credited their accounts anyway, said North Park Police Sgt. John Itlasasno. He added the situation was a result of a computer glitch. Court records indicated that one sister pleaded guilty Tuesday to three counts of theft. Deseret First is a $449.8 million asset, Salt Lake City-based credit union (The Associated Press Jan. 10) … * CHARLOTTE, N.C. (1/13/09)--Golfers representing credit unions from North Carolina and South Carolina will tee up against each other in the Fifth Annual Carolinas Cup charity golf event March 15-17. All proceeds will benefit the Victory Junction Gang Camp. The three-day event, which will be the Mid Pines Inn & Golf Club in Southern Pines, N.C., is being hosted by the Carolinas Credit Union Foundation, the North Carolina and South Carolina credit union leagues and CUNA Mutual Group. All proceeds will go to The Carolinas Credit Union Foundation for the Victory Junction Gang Camp, a year-round NASCAR-themed facility in Randleman, N.C. Founded by Kyle and Pattie Petty in memory of their son, Adam, a NASCAR driver killed in a racing accident in 2000, Victory Junction is designed to creates camping experiences for children with chronic illnesses … * RICHARDSON, Texas (1/13/09)--Texans CU’s 2008 fundraising campaign
Click to view larger image Click for larger view
resulted in $194,000 raised for United Way. More than 250 employees at the $1.839 billion asset, Richardson-based credit union participated in the one-week campaign, with 23 individuals investing at the Leadership Society level with a minimum $1,000 donation. All employee contributions were matched dollar for dollar by the credit union. Also, Texans matched member gifts fifty cents to each dollar. This year Texans introduced a Day of Caring opportunity with employees volunteering at a local United Way agency. United Way contributors were invited to an exclusive breakfast with Dallas Stars hockey player and credit union spokesman, Mike Modano, who posed with Texans CU employees at a recent thank you event for United Way campaign donors (Photo provided by Texans CU)… * HIGHTSTOWN, N.J. (1/13/09)—The Essex West Hudson Chapter of credit unions will meet Wednesday with Newark Mayor Cory Booker as guest speaker in an event open to all affiliated New Jersey Credit Union League credit union professionals, volunteers, members and vendors in the state. Booker is often mentioned as a likely Democrat successor to Gov. Jon Corzine. His unconventional approach to politics was the subject of a documentary entitled “Street Fight,” which was nominated for the 2005 Academy Award for Best Documentary. As a Newark City Councilman, he went on a 10-day hunger strike, living in a tent in front of one of Newark’s worst housing projects to protest open-air drug dealing. His initiatives to improve housing, youth, law and order, and the efficiency of City Hall were often outvoted, 8 to 1. After his term ended, he became director of Newark Now, a grassroots nonprofit group, and partner of a West Orange law firm. In 2006, on his second try, he was elected mayor with 72% of the vote and initatied a 100-day plan to implement reforms including expanding the police force, opening city jobs to former offenders, improving services and expanding summer youth programs … * HARRISBURG, Pa. (1/13/09)--Blue Chip FCU, Harrisburg, Pa., issued a 2% bonus dividend and 0.75% loan refund to its members in appreciation for their trust and loyalty, the credit union told the Pennsylvania Credit Union Association (Life is a Highway Jan. 9). The credit union also is renovating its site and will add an 800-square-foot lobby, teller station and drive-thru window ... * HARRISBURG, Pa. (1/13/09)--Norb Kaczmarek, CEO, Erie (Pa.) FCU, and board chair of the Pennsylvania Credit Union Foundation, was featured in the Erie Times-News. The article focused on how the credit union helps students and the community become more financially responsible (Life is a Highway Jan. 9). Use the link to view the article ... * PHOENIX (1/13/09)--MaryPat Garry, a former board chairman of Desert Schools FCU, Phoenix, died Jan. 3 at the age of 70 (The Arizona Republic Jan. 9). Garry served on the board, filling numerous positions, from 1989 to 2009. Desert Schools FCU has $3.1 billion in assets ...

Invest in America picks up steam

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MADISON, Wis. (1/13/09)--More state credit union leagues are supporting the “Invest in America” credit union loan partnerships between America's Credit Unions and automakers General Motors (GM) and Chrysler Corporation LLC. The partnerships were expanded to all 50 states, it was announced Wednesday. The Invest in America programs will provide 90 million credit union members nationwide with access to GM's “Credit Union Member Discount Program” at participating GM dealers, and Chrysler's "Credit Union Members Cash" rebates at Chrysler dealers. They also will provide access to affordable financing on new vehicle purchases (News Now Jan. 8). Leagues adding their support include:
* The Credit Union Association of New Mexico, which said credit unions statewide are supporting the programs, according to Sylvia Lyon, association CEO (The Associated Press Jan. 12). There is great need for car-buying assistance in New Mexico, and credit unions have money to lend because they did not participate in subprime lending, Lyon told the newspaper. Any credit union in New Mexico can participate in the program for the next three months. * The Minnesota Credit Union Network (MnCUN), which said Minnesota credit unions’ involvement in Invest in America demonstrates how the cooperative nature of credit unions benefits the local, state and national economies. “Minnesota credit unions have tremendous potential to help stimulate the state’s economy through car loans to their members,” said Mark D. Cummins, MnCUN president/CEO. “In these tough economic times, our state’s credit unions have remained, and will continue to be, healthy and strong. Participation in Invest in America is one of the many ways Minnesota credit unions are helping their members deal with the current challenges presented by the economy.” * The Association of Vermont Credit Unions (AVCU), which also said the programs are an example of how credit unions’ cooperativeness benefits local, state and national economies (Newslines Express Jan. 9). “This program provides credit union members exclusive discounts on new 2008 and 2009 GM and Chrysler vehicles. It further demonstrates that local, member-owned, and financially sound credit unions offer tremendous value and support to consumers struggling with tightened credit availability and a challenging economy,” AVCU President Joe Bergeron said in a press release sent to Vermont media outlets Thursday. * The Maryland & DC Credit Union Association (MDCCUA), which said credit unions have always been embedded in their communities (FOCUS newsletter Jan. 12).“This program is a win-win for the 2.5 million credit union members in Maryland and DC and the U.S. automakers,” said Mike Beall, MDDCUA president. “We are proud to be a part of this vital initiative to stimulate our local economy.”

Four MCUL-backed bills see success in 08

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PLYMOUTH, Mich. (1/13/09)--Four pieces of Michigan state legislation deemed beneficial to credit unions and supported by the Michigan Credit Union League (MCUL) saw successful passage during 2008. The year was a successful one for credit union legislative advocacy, MCUL said (Michigan Monitor Jan. 12). “We were able to help push some key bills through the legislature this year, which is not always easy when lawmakers are dealing with sizable issues such as a looming state budget deficit,” said MCUL Executive Vice President Patrick La Pine. “Between credit union legislative breakfasts back in the district and the efforts of MCUL governmental affairs staff in Lansing, the credit union voice is consistently heard regarding issues important to the industry,” he added. Gov. Jennifer Granholm signed HB 5085--now Public Act 145 as of 2008 June 2. It requires that all lien holders of a financed snowmobile be listed on the vehicle's registration--the same structure that applies to motor vehicles and boats. The law will help credit unions by creating consistency across different types of vehicle registration systems, La Pine said. The bill was introduced by State Rep. Jeff Mayes (D-Bay City). Three other MCUL-backed bills were sent to the governor’s desk during the lame duck session in December, including SB 834--a bill to permit a financial literacy course to satisfy a part of high school math curriculum requirements. It was signed into law Dec. 19, the final day of session. “To see the financial education bill become law is encouraging and serves as a significant step toward teaching students the money management skills that will serve them their whole lives,” La Pine told Michigan Monitor. The bill was introduced by State Sen. Michael Switalkski, D-Roseville, in October 2007 with support by MCUL. Also on the final day of session, the House passed SB 786, which will raise the small claims court monetary ceiling to $4,000 beginning July 1; $4,500 on July 1, 2010; and $5,000 on July 1, 2011. The higher monetary ceiling will allow credit unions to more frequently use the lower-cost, small claims alternative to pursuing matters in district courts, La Pine said. Once the bill passed the House, the Senate immediately concurred with its latest form. It is expected to be signed by Granholm shortly, MCUL said. The bill was introduced by Sen. Wayne Kuipers (R-Holland). On the same closing day of session, the House passed and the Senate concurred with SB 1020, which permits businesses that make contributions to individual development accounts held by financial institutions to take a credit against their Michigan Business Tax liability. The bill is also expected to be signed by Granholm soon. It was introduced by State Sen. Tupac Hunter (D-Detroit). One area of legislation that stalled throughout 2008 was related to the foreclosure crisis and assistance to homeowners. Bills designed to mimic North Carolina laws that provided help to homeowners with subprime loans who forced foreclosure were introduced, but disagreement between the House and Senate on specific language caused the bills to ultimately fail as the year came to a close, MCUL said. “One of the MCUL's priorities in 2009 will be backing credit union-friendly legislation that helps homeowners coping with the housing crisis,” La Pine said. “The credit union industry has done quite a bit to help people facing foreclosure, but state government has struggled with passing laws in this area.”

Municipal officials back N.J. deposits measure

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HIGHTSTOWN, N.J. (1/13/09)--New Jersey state municipal officers and mayors have contacted the New Jersey League of Municipalities to support legislation that would allow credit unions to become municipal depositories, said the New Jersey Credit Union League. The league has met with the League of Municipalities and the New Jersey Association of Counties. If the legislation is approved, credit unions could take deposits for the state’s 21 counties, 566 municipalities and 611 school districts (The Weekly Exchange Jan. 5). On Jan. 7, league President Paul Gentile and Director of Government Affairs Chris Abeel met with the New Jersey Community Affairs and its Division of Local Government Services to brief them on pending legislation that would allow credit unions to be depositories for municipalities and school boards under the state Government Unit Depository Protection Act (GUDPA). The league also is scheduling meetings with the New Jersey School Boards Association. The legislation, which would amend GUDPA, was introduced by State Senate Majority Leader Steve Sweeney (D) and State Reps. Fred Scalera (D) and Doug Fisher (D). “Support from such groups is essential to making the case that while credit unions will benefit from the legislation, it is good public policy and in the best interest of New Jersey taxpayers, who will be the true beneficiaries,” the league said.

CUs TV series reaching 93 of U.S.

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ROCHESTER, N.Y. (1/13/09)--PBS stations in 50 states are broadcasting new episodes of the Biz Kid$ TV series underwritten by America’s Credit Unions. All episodes begin and end with a narrator reminding viewers that “Production funding for Biz Kid$ is provided by America’s Credit Unions, where people are worth more than money.” Last year, the first 26 episodes of Biz Kid$ aired on more than 320 PBS stations, reaching 91% of the U.S. During the first quarter, 13 new episodes of Biz Kid$ are scheduled to air on nearly 330 PBS stations, reaching 93% of the country. Each episode includes at least four stories from successful young entrepreneurs reinforcing the importance of budgeting, saving and giving back to the community. “I liked it when they interviewed kids from all over the U.S.,” said Tommy Webster, 11, who watches Biz Kid$ regularly on the series’ flagship station, WXXI in Rochester, N.Y. “I learned how I could save money and spend it the right way without blowing it.” “My oldest son, who is 13, is saving money for the first time,” reported Cynthia Carrasco, a Biz Kid$ viewer in Tulsa, Okla. “I believe my son is going to grow up to be a better man because of Biz Kid$…. You have been an inspiration to us all.” Biz Kid$ shows also provide teaching materials for credit union educators. Using national financial literacy standards, episode-specific curricula will be developed by Outreach Extensions, the creator of educational materials for Bill Nye the Science Guy, Liberty’s Kids, Kratts’ Creatures, and other public television series. Free curriculum and family activities for every episode will be available on the Biz Kid$ website. The Washington Credit Union Foundation manages the Biz Kid$ project and a coalition of more than 130 credit unions, leagues, foundations, affiliates, and service providers contribute to the national production. “National underwriting dollars are needed now to pay for the next 13 episodes delivered to PBS stations,” explains RoxAnne Kruger, Biz Kid$ project manager at the foundation. “We are asking credit union supporters to please consider a contribution to Biz Kid$ in 2009 to help cover the television production, website and curriculum development costs.”

Columbia CU helping high school band go to inauguration

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VANCOUVER, Wash. (1/12/09)--Columbia CU is helping the Evergreen High School band and color guard raise funds to pay for their trip to the presidential inauguration by challenging businesses and community members to make contributions. The $768.5 million asset, Vancouver, Wash.-based Columbia will match all donations up to $5,000. The challenge is open to donations made between now and Feb. 14. “This is a great opportunity for our area youth to be represented at this historic inauguration and we want all band members to be able to take advantage of this once-in-a-lifetime opportunity,” Laurie Kusch, Columbia senior vice president of member services/chief ambassador, said in a press release. Fundraising efforts to date have come up short $25,000. The band needs that amount to send a 150-student contingent to Washington, D.C. Every band member has to pay $862 each for the five-day trip (The Columbian Jan. 7). “It’s so great that Columbia stepped up to help--they were the first to call me this morning,” said Connie Ewart, Evergreen High School band booster club president. “I’m positive that we’ll meet our goal!” Donations may be made to the Evergreen High School Booster Club using a secure connection through its website.

Texas league CEO to host Blog Talk Radio program

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FARMERS BRANCH, Texas (1/12/09)--Dick Ensweiler, Texas Credit Union League CEO, will host a live monthly radio program on Blog Talk Radio, a social radio network that allows users to connect quickly and directly with their audience. The program, which will have a worldwide audience, will begin Wednesday (LoneStar Leaguer Jan. 9). “Credit unions have been America’s best kept secret for far too long,” Ensweiler told the league. “We are a stabilizing force in the U.S. economy, but we are often overshadowed by our for-profit counterparts. We have a great story to tell and we need to do more to let the public know that we are here, we are financially sound, and we’re ready to serve.” Ensweiler’s “Your Money, Your Matters” program will inform and educate the public on issues related to personal finance, such as asset building, retirement planning and investments. Also, he will address current issues, including the economy, financial marketplace and credit unions in general. “If we want to be a part of the conversation, we can’t wait for an invitation. We have to inject ourselves into the conversation. Social media is a valuable business tool and a cost-effective way for us to reach the masses,” Ensweiler continued. “Hosting a program on Blog Talk Radio affords us the opportunity to let the world know who we are, and gain insight into how we are empowering families and impacting communities.” Joining Ensweiler in his debut program, “Credit Unions Help American Families Ride out the Economic Storm,” is John Tippets, CEO, American Airlines CU, Dallas. The two will weigh in on today’s economic climate and how it’s impacting American families, and explore how credit unions are serving as a stabilizing force in the financial sector, the league said. Specifically, they will discuss how the credit union structure has enabled the industry to weather the economic storm, and how consumers benefit from credit unions’ presence in the financial services industry. Ensweiler and Tippets will invite listeners to learn how credit unions strengthen families and communities, and what differentiates credit unions from their for-profit counterparts. The 30-minute program begins at 4 p.m. Jan. 14. It is a live program. To tune in, use the link. The program allows chatting amongst listeners, as well as posing questions either online or via call-in, at (646) 929-1020.

BrightStar CU student program on IFox NewsI

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FORT LAUDERDALE, Fla. (1/12/09)--BrightStar CU, Fort Lauderdale, Fla., was recently featured by Fox News for having three student branches inside of Florida schools. BrightStar has two high school branches and one elementary school branch. The story focused on the branch inside of Flanagan High School in Pembroke Pines, Fla. The branch helps students learn the importance of saving, Fox News said. Fox interviewed several individuals, including one Flanagan High School senior, who admitted that many young people and adults don’t know how to manage their money. Florida is one of many states that does not require students to take a money management class to graduate from high school. BrightStar CU hopes to open more student branches in the future, Fox said. To see the news story, use the link.

CU System briefs (01/09/2009)

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* LAKELAND, Fla. (1/12/09)--MIDFLORIDA FCU, Lakeland, Fla., committed to be the title sponsor of the Polk Museum of Art’s Mayfaire-by-the-Lake, an annual art festival on Mother’s Day Weekend. MIDFLORIDA will sponsor the event until 2018. The title sponsorship was previously held by Volvo for five years. This year’s event will be held May 9-10 ... * LAS VEGAS (1/12/09)--Despite a troubled local economy, Clark County CU members will receive an average dividend of $75 this year. Clark County is located in Las Vegas. The bonus is smaller than it has been in recent years. Members received about $179 last year, the credit union said (Las Vegas Review-Journal Jan. 8). Despite member bankruptcies and car repossessions in 2008, the credit union garnered positive revenues, it said. Clark County CU has $641 million in assets ... * HARRISBURG, Pa. (1/12/09)--Freedom CU, Warminster, Pa., said its LivePerson chat service has averaged about 30 chats per day and 4,200 hits on the Frequently Asked Questions section (Life is a Highway Jan. 9). The live text chat provides members real-time access to credit union employees to expedite service. The service was launched Nov. 19 ...

CUNA economist rates economy on IBloomberg RadioI

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MADISON, Wis. (1/12/09)--The U.S. is in a severe recession--which “doesn’t bode well for the future,” although there are some silver linings, a Credit Union National Association (CUNA) economist told Bloomberg Radio Friday. Steve Rick, CUNA senior economist, commented on the Labor Department’s unemployment numbers for December and President-elect Barack Obama’s stimulus package on the “Bloomberg Countdown” show. Employers cut another 524,000 jobs in December, the Labor Department reported Friday. The economy lost 2.6 million jobs in 2008--the most since the end of World War II in 1945. The nation’s unemployment rate jumped to 7.2% in December, from 6.8% the previous month and the highest level in almost 16 years (The Wall Street Journal Online Jan. 9). “A lot of economists expected a more severe drop [in employment),” Rick said. “But we’re seeing an extreme downturn of the labor market. We’re in a severe recession, which doesn’t bode well for the future--it indicates a drop in spending.” Will the layoffs continue? “Yes,” Rick replied. “We’re in a self-reinforcing downward spiral. That means consumers are spending less, so there’s less production and jobs are being shed. The December unemployment numbers didn’t surprise people--it shouldn’t affect the market that much.” However, Rick said there is a psychological effect of the layoffs on people, and consumer confidence is at a nearly record low. Also, things will likely get worse before they get better--economists expect a 9.5% national unemployment rate sometime in 2010, he added. On the bright side, the consumer savings rate is up to nearly 2.8%, Rick said. “And people are paying off credit cards in case they are the next to be laid off.” Obama’s federal stimulus package now stands at about $800 billion to $900 billion and “hopefully will pass” before Congress recesses around the middle of February, Rick said. “It may take awhile for the stimulus plan to get going, so it probably won’t have much effect in the first half of the year,” he added. To restore jobs now, the federal government should give out “state block grants,” that states can use as they see fit, because many states are in financial trouble. The grants would help them refrain from having to cut some spending, Rick explained. Some industries are way down--such as residential construction--because of too much unsold inventory. “Not too many new homes will be built this year,” Rick said, However, other industries--such as government jobs, health care and education--are picking up, he said. “In a recession, people go back to school to learn new skills, and with an aging population, it helps the health care industry,” Rick explained.

CU leader volunteers in Central America

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BEAVERTON, Ore. (1/12/09)--Bill Woods, vice president of lending at Northwest Community CU, Springfield, Ore., traveled to El Salvador and Guatemala to volunteer for “The International Stove Team,” a Rotary project.
Bill Woods, vice president of lending at Northwest Community CU, Springfield, Ore., traveled to Central America to participate in a stove-building project that benefited Central American families. (Photo provided by the Credit Union Association of Oregon)
While in El Salvador, Woods built cooking stoves in a factory that were provided to Central American families. The stoves replace open fires in homes, thus improving air quality and reducing the risk of children in the home being burned by fire, according to the Credit Union Association of Oregon. The stoves cost $29 to manufacture, and were provided to families for $30. The average Central American family uses wood for their fires to cook and heat their homes, which costs between $10 and $30 per week (Oregon Outlook January 2009). Woods also traveled to Guatemala to build a factory similar to the one in El Salvador. “The people of El Salvador and Guatemala were tidy, polite, happy and very innovative,” Woods said. “They were stars at making do, such as making a hammer cut out of steel and a piece of rebar. “They seemed most appreciative of all efforts to help them, making the trip very worthwhile,” he added.

Actor Childrens Miracle Network co-founder to speak at GAC

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WASHINGTON (1/12/09)--Actor/singer John Schneider, a co-founder of Children’s Miracle Network, is scheduled to speak at the Credit Union National Association’s Governmental Affairs Conference (GAC) Feb. 23 in Washington, D.C. Schneider will be the guest speaker during the Annual General Meeting at the GAC. Schenider co-founded Children’s Miracle Network with singer and actress Marie Osmond, who spoke at the GAC last year. The network raises funds for 170 children’s’ hospitals in the U.S. Credit unions are connected to Schneider through Children’s Miracle Network. Programs such as Credit Unions for Kids and the annual CU Cherry Blossom 10-mile run position credit unions as one of the network’s top contributors. Schneider, known for his role as Bo Duke on the television show, “The Dukes of Hazzard,” and for his role as Jonathon Kent on “Smallville,” also is an accomplished country singer and guitarist. He has released 11 solo country music albums, and has performed on Broadway in “The Grand Hotel,” “The Will Rogers Follies,” “Brigadoon,” “Chicago” and “The Music Man.”

WOCCUs Peru Program wins USAID award

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MADISON, Wis. (1/9/09)--The U.S. Agency for International Development (USAID) has awarded its first Innovations in Financing Value Chains competition award for pioneering/ground breaking to the Credit Union Market Integration Program in Peru, co-funded by World Council of Credit Unions (WOCCU), Peru's national credit union federation (FENACREP) and USAID.
Click to view larger imageFarmers involved with WOCCU's value chain financing program in Peru offload palm hearts for palm oil production. (Photo provided by World Council of Credit Unions)
The award recognizes the top programs in providing financial and increased market access to “value chain“ participants--producers, suppliers, buyers and others involved with bringing a specific product to market. “Value chain” is an industry term for the process by which a crop or product moves from conception to consumer. One of the WOCCU-FENACREP program’s goals is to link credit unions with producers in rural areas who lack strong relationships with key markets and the necessary financing required at any individual phase of the value chain, from production to commercialization. “The ‘Value Chain Finance Methodology' submitted by WOCCU-Peru impressed our diverse panel of judges with its potential impact on the value chain, creativity of approach, validity of its model and relevance for other implementers," said Jeanne Downing, senior enterprise development advisor from USAID's Office for Microenterprise Development, which sponsored the competition. Since September 2006, WOCCU's Peru program has been working with FENACREP to bring financial access and increased market competition to small producers through credit unions in the rural Andean and Amazon regions of the country. WOCCU's approach is designed to mitigate the risks associated with each rural value chain--both agricultural and non-agricultural. It involves analysis to determine product supply and demand, identifying at which point in the value chain financial access brings the greatest value to producers and best investment for the financial institution. Credit unions facilitate direct market relationships, thus eliminating, when possible, the need for expensive intermediaries. The institution develops loan products according to production cycles, and end-buyers channel payments through the credit union, which deducts the principal loan amount plus interest and deposits the remaining amount into a savings account for the producer. Downing said the judges were especially impressed with how WOCCU's model eliminated third-party intermediaries in the value chain. Bringing together different value-chain participants without additional guarantee schemes and with loans funded from credit union resources created a positive change in value-chain structure and power relationships, she said. “Because no outside loan capital was used and because credit unions are left with the knowledge of how to access a variety of value chains, this is a highly replicable and scalable approach,” Downing said. “Overall, the program is sustainable and well documented, and the achieved results are quite impressive, particularly the expansion of the program's methodology beyond the WOCCU program." To date, credit unions have used the methodology to finance 17 distinct value chains through 25 rounds of financing. In total, credit unions have disbursed $794,000 through 531 loans to 3,285 rural producers, producer groups and other value chain actors. A four-person panel of value-chain finance experts judged submissions based on the program's impact on the value chain, its outreach approach, sustainability, replication and scalability. The competition solicited submissions from non-governmental organizations, contractors, banks, financial service providers, private-sector firms and individual practitioners who facilitated or provided financing that helped encourage greater value-chain competition and increased the income of participants within the value chain. Luis Jimenez, WOCCU-Peru program director, will receive the award at a USAID-sponsored forum in Washington, D.C. in February. He will present the program there to an audience of policymakers, donors, leading academics and practitioners. Those interested in attending the event should contact Catherine Horn, mail Catherine for more details.

Leagues support Invest in America plan

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MADISON, Wis. (1/9/09)--Several state credit union leagues have announced their support of the “Invest in America” credit union loan partnerships between America’s Credit Unions and automakers General Motors (GM) and Chrysler Corporation LLC. The partnerships were expanded to all 50 states, it was announced Wednesday. The Invest in America programs will provide 90 million credit union members across the country with access to GM's “Credit Union Member Discount Program” at participating GM dealers, and Chrysler’s “Credit Union Members Cash” rebates at Chrysler dealers. They also will provide access to affordable financing on new vehicle purchases (News Now Jan. 8). Pennsylvania’s 600 credit unions joined the expanded program, which now encompasses nearly 8,000 credit unions nationwide and makes more than $80 billion in credit union low-cost auto loans available for new vehicle purchases, the Pennsylvania Credit Union Association (PCUA) said. “Since our founding after the Great Depression, the mission of credit unions has been to provide affordable credit and financial services to Americans,” said PCUA President/CEO Jim McCormack. “Through this partnership with GM and Chrysler, more than 3.3 million members in Pennsylvania will have to opportunity to save money when purchasing and financing new vehicles. It’s truly a win-win for the automakers, auto dealers, and credit union members. “In our tough economy, I encourage all consumers to consider belonging to a credit union to save their hard-earned money,” he added. Nebraska’s 70 credit unions also announced they joined the expanded program. “Credit unions have always provided the hardworking men and women of this country with high-quality, low-cost financial services in both good and bad economic times,” said Scott Sullivan, Nebraska Credit Union League president/CEO. “The Invest in America program is a natural extension of the credit union philosophy of ‘people helping people’ by adding value to one of a credit union’s cornerstone products--car loans for 420,000 Nebraska credit union members, while supporting the auto industry in Nebraska and ultimately our nation’s economy,” he added. The Louisiana Credit Union League is encouraging credit unions in the state to take part in the program. “This is a fantastic opportunity for both your members and your credit union,” the league said in a press release. “It also speaks highly of credit unions finding solutions for their members and our local economies during this financial crisis.” “New Jersey’s credit unions are in a good position to stimulate consumer lending,” said Paul Gentile, New Jersey Credit Union League president/CEO. “We hope many of the state’s credit unions embrace this program and that New Jersey credit union members take advantage of the financing and vehicle incentives these programs offer to credit union members. “There has never been a better time to join a credit union in New Jersey,” he added. “Our credit unions continue to find new ways to meet the savings and lending needs of their members and provide the outstanding service credit unions are known for.” The Ohio Credit Union League is encouraging member credit unions to share their success stories involving the program (eLumination Jan. 7). The league was one of the four Midwest states in the original pilot of the program with GM. “The Invest in America program continues to garner media attention throughout Ohio and the nation,” the league said in its newsletter. “Members of the media are interested in speaking to credit union members that have taken advantage of the exclusive vehicle discount programs with General Motors and Chrysler. If a member of your credit union has purchased a vehicle using one of the discounts and would be willing to be interviewed, please contact [us]. The new expanded program is a great fit for Massachusetts credit unions, said Dan Egan, president of the Massachusetts Credit Union League (E-Weekly Jan. 8). “Credit unions have always been a vital part of their communities, and this new initiative, ‘Invest in America,’ is an example of how the cooperative nature of credit unions benefits the local, state and national economies,” Egan said. Arizona’s 54 credit unions also joined the expanded program. “The potential of the program is exciting,” said Arizona Credit Union League CEO Scott Earl. “This is an opportunity to offer Arizona’s 1.6 million credit union members greater purchasing power and opportunities during economic hard times. Credit unions are safe and strong and in a position to lend money. This is a chance to help move the economy forward.” The Missouri Credit Union Association (MCUA) and Wisconsin Credit Union League also announced they are supporting the program. “These vehicle-purchase discounts demonstrate how credit unions can help their members in a stressed economy,” said Rosie Holub, Missouri Credit Union Association president/CEO. “Credit unions have money to lend and can extend credit to consumers while other lenders are tightening credit access. This is just another example of the credit union difference” (The Missouri difference Jan. 7). “Credit union members can feel good knowing they’re saving money through these offers, but also because they’re helping to reinvigorate the auto industry--a vital part of the U.S. economy,” said Wisconsin league president/ CEO Brett Thompson. He added that auto lending has always been credit unions’ “bread and butter.” “In a down economy, more people are looking at used cars or simply not buying,” Thompson said. “So credit unions--which don’t chase profits--provide an obvious solution to helping people opt for a new vehicle simply because the rates credit unions can offer will give consumers more car for their money.”

Invest in America garners nationwide media attention

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MADISON, Wis. (1/9/09)--“Invest in America,” a program that connects General Motors and Chrysler with credit unions to offer financing on vehicles, has garnered national media attention. CUcorp, a marketing subsidiary of the Michigan Credit Union League, General Motors (GM) and Chrysler announced that they would expand their programs to all 50 states. Previously, GM and credit unions had piloted the program in four states and the Chrysler version piloted in 12. Media outlets covering the expansion include: Bloomberg News, The Associated Press, the Detroit Free Press,, Crain’s Detroit Business, Auto Week and Dow Jones. The Michigan Credit Union League, which organized the effort, also received positive coverage. David Adams, Michigan league president, was quoted numerous times. “I think it’s safe to say that there’s no better solution for the troubles that are facing the auto industry,” Adams told The Associated Press (via The Detroit Free Press Jan. 7). To see the articles, use the links.

Economy prompts CU in California to revisit new branches

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RANCHO CORDOVA, Calif. (1/9/09)--A troubled economy has forced a credit union in California to re-evaluate its plan to expand branch locations. “Clearly, the pressures affecting consumers in our greater economy have also had some impact here at American River HealthPro CU (ARHCU),” said CEO Bob Steponovich in a press release. ARHCU, Sacramento, tentatively planned new branches in Elk Grove and Lincoln. Based on changing factors in the two markets, the credit union is reviewing its plans. In June, ARHCU adjusted its provision for loan loss upward by an additional $4 million. The credit union also announced this week that it expects 2008 year-end results to reflect a net loss. “While our credit union’s mortgage portfolio performed relatively well in 2008, we have seen the primary impact in our consumer loans, as our members struggle to stay current on their vehicle and credit card debt,” Steponovich said. The credit union’s expansion plans were driven by healthcare employers’ capital investments, projections about significant growth, and the pace with which new healthcare facilities go online. The $220 million asset credit union opened its newest branch in Roseville in spring 2007.

CU System briefs (01/08/2009)

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* PARCHMENT, Mich. (1/9/09)--Effective Jan. 20, First Community FCU in Parchment, Mich., will host “Just File It! I-CAN E-FILE,” a Web-based tax-preparation software program that helps members and non-members with household incomes less than $50,000 file both state and federal income tax returns. Those who qualify may also claim federal and state Earned Income Tax Credit (EITC). The program is accessed via a special link on the $302.4 million asset credit union’s website or by stopping in one of three designated branches providing the service … * LOUISVILLE, Ky. (1/9/09)--Park Community FCU has named David Eib as new president/CEO of the $413.5 million asset, Louisville-based credit union. Eib, a 20-year Park employee and 35-year credit union executive, had been executive president there. He succeeds Jim Oliva, who is pursuing other interests. Oliva had been in the position since 2005. He had been president of Brown & Williamson FCU, which merged into Park FCU in 2006 (Business First of Louisville Jan. 8) … * COLUMBUS (1/9/09)--Robin Thomas, CEO of Cleveland-based Taleris CU, has been reappointed by Ohio Gov. Ted Strickland to the state’s Credit Union Council Board, says the Ohio Credit Union League (eLumination Newsletter Jan. 8). Thomas will serve a three-year term, which expires September 2011. The council is part of the Ohio Division of Financial Institutions and comprises seven members who provide advice and recommendations on credit union issues to the agency and governor. The council, chaired by Deputy Superintendent for Credit Unions Rose Bartolomucci, meets quarterly …

Wisconsin CUs raise 47000 for state hospitals

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MILWAUKEE (1/9/09)--Wisconsin credit unions and affiliated industry organizations contributed more than $47,000 in 2008--garnered from the Credit Union Cherry Blossom 10-mile run in Washington D.C.--to the state’s system of Children’s Miracle Network hospitals.
Click to view larger imageWisconsin credit unions and industry partners presented a check Tuesday for $15,858 to Children’s Hospital of Wisconsin in Milwaukee. Pictured, front row, from left: Christopher Roe, CUNA Mutual senior vice president and Credit Union Miracle Day board member; Keri Brunelle and Elisabeth Thomsen, both of Children's Hospital; Judy Kline, Lifetime CU, West Allis; Chad Helminak, Wisconsin Credit Union League; and Katye Long, Credit Union National Association; Back row: Scott Roesch, Fond du Lac (Wis.) CU; Corey Gibson, Summit CU, Madison; and Sheila McNeal, CUNA Mutual. (Photo provided by CUNA Mutual Group)
The most recent contribution--$15,858--was made Tuesday at Children’s Hospital of Wisconsin in Milwaukee. “As a result of state credit unions’ fund-raising, this contribution is one of three directed to Wisconsin Children’s Miracle Network-affiliated hospitals,” said Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group. He is a member of the Board of Directors of Credit Union Miracle Day (CUMD) Inc. “We are proud that the credit union movement in Wisconsin participates in this national event, which directly helps children in our local community.” “Each spring, the Credit Union Cherry Blossom Run in Washington, D.C., is the flagship fundraising event for CUMD,” said Sarah Turner, CUMD director, adding, “We are thrilled this event contributed more than $1 million to children’s hospitals nationwide in 2008.” CUMD is an organization of credit unions and industry affiliates dedicated to raising funds for the Children’s Miracle Network and raising awareness of the credit union difference. Credit unions and industry business partners contributing to the $47,076 Wisconsin total included: the Wisconsin Credit Union League; Lifetime CU, West Allis; Summit (Great Wisconsin) CU, Madison; Fond du Lac (Wis.) CU; Sentry CU, Stevens Point; CUNA Mutual Group; Credit Union National Association; Fiserv; Credit Union Executives Society and the National Credit Union Foundation. “Year in and year out, Wisconsin credit unions and their members do a tremendous job of supporting Children's Miracle Network and we're proud to work together on events like the Cherry Blossom Run,” said Brett Thompson, president/CEO of the Wisconsin league. “Since credit unions are locally owned and operated, they find tremendous value in raising funds to help sick children in Wisconsin get the specialized care they need.” “Local donations stay at home,” Turner added. “The monies raised by credit unions in Wisconsin and elsewhere are tracked according to donor ZIP codes, so money donated in Wisconsin goes to Children’s Miracle Network hospitals in La Crosse (Gunderson), Marshfield (St. Joseph’s) and Milwaukee (Children’s Hospital of Wisconsin).” “Children’s Hospital and Health System is committed to ensuring a healthier future for children by providing an integrated and coordinated health services network for infants, children and adolescents,” said Elisabeth Thomsen, special events manager, Children’s Hospital of Wisconsin and Children’s Miracle Network representative. “This can only be accomplished with the support of the community, and we are grateful to the Credit Unions for Kids campaign for their ongoing support.” The Children’s Miracle Network is a nationwide affiliation of more than 170 children’s hospitals.

Study Maine CUs save consumers 73 million a year

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WESTBROOK, Maine (1/9/09)--During the economy’s difficulties, a new study is providing good news for 600,000 consumers in Maine: Using a credit union saved Maine consumers nearly $73 million in 2007, nearly double the savings in 2005. In an independent study, a former Maine state economist said the latest figure is based on the ability of credit unions to offer consumers higher interest payments on deposits, lower interest rates on loans, and fewer and lower fees on financial services. In “An Examination of the Economic Impact on the Maine Economy and the Financial Benefits to Maine Consumers of the State’s Credit Union, Charles Lawton, an economist with Planning Decisions in South Portland, concluded that credit unions have significantly lower, fewer, or no fees compared to for-profit financial institutions. “Maine credit unions provide a significant benefit to not only the 600,000 members who use a credit union but for all consumers,” Lawton said. “It’s quite hard to imagine what the rates and fees of other financial institutions would be if there were no credit unions or (if) credit unions in Maine were not as strong as they are. Consumers are well-served by Maine’s credit unions,” he added. In 2007, the financial benefits of using a credit union to the state’s consumers was nearly $73 million, which breaks down to: $16 million in higher interest rates on savings accounts; $23 million in lower interest rates on loans; and $34 million in lower and fewer fees for financial services. In a similar study of 2005, benefits were nearly $40 million. According to Maine Credit Union League President John Murphy, the great efforts made to offer such savings in a challenging economy make credit unions an increasingly valuable resource for people in the state. “The credit union philosophy of putting the interests of their members first continues to highlight the difference between credit unions and other financial institutions,” Murphy said, noting the credit union difference. “Now more than ever, Maine consumers recognize and appreciate the value of using a credit union,” he added. Murphy noted that Maine’s credit unions continue to be safe, sound and strong, despite challenges facing financial institutions and the financial services industry.

Wisconsin launches CU House in state

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MADISON, Wis. (1/9/09)--About 100 credit union representatives, lawmakers and state officials attended a grand opening ceremony
Click to view larger image(Photos provided by the Wisconsin Credit Union League).
Monday for Wisconsin’s Credit Union House on the state Capitol square in Madison, Wis. The house will serve as an advocacy command center and meeting space for Wisconsin credit unions and friends, according to the Wisconsin Credit Union League. “This facility is part of Wisconsin credit unions’ ongoing commitment to serving their 2.2 million members,” said Brett Thompson, president/CEO of the league. “It’s very appropriate that Credit Union House is located on Main Street, since we serve the interests of people who walk the main streets of communities throughout Wisconsin every day.” The facility, owned and operated by the league, has 2,500 square feet of meeting space and will have seven league employees. The Wisconsin league’s headquarters will remain in Pewaukee. “Credit Union House is here to help lawmakers and public officials recognize the role credit unions will continue to play in helping state residents and businesses manage their finances despite economic challenges,” Thompson added.
Click to view larger imageFrom left: Brett Thompson, Wisconsin Credit Union League president/CEO; Michael Morgan, secretary of the State Department of Administration; and Dean Wilson, Wisconsin league board chairman, at the ribbon cutting ceremony for Credit Union House in Madison, Wis.
Click to view larger imageFrom left: Brett Thompson, Wisconsin Credit Union League president/CEO; Sue Cowan, Wisconsin director of the Office of Credit Unions; Sen. Jim Sullivan (D-Wauwatosa); Dean Wilson, Wisconsin league board chairman; and Don Davidson, CUNA Mutual vice president of credit union system relations.

Wisconsin credit unions saved members $188 million in the fiscal year ending September 2008 by offering more competitive rates on savings and loans, and lower and fewer fees, the league said. Consumers in the state can rely on credit unions during difficult times because they’re willing to work with borrowers in a financial bind, Thompson said.

Chrysler and CUs partnership now available nationwide

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LANSING, Mich. (1/8/09)--Like a similar program with General Motors, America’s credit unions and Chrysler LLC have expanded their “Invest in America” credit union loan partnership from the original pilot of 12 states to all 50, giving 90 million members access to “Credit Union Member Cash” rebates at Chrysler dealers throughout the country. Invest in America makes available more than $80 billion in credit union low-cost auto loans to buy new vehicles. The Chrysler partnership’s program, which began Dec. 16 in 12 states, runs until June 20. It offers Chrysler rebates of $500 or $1,000 on eligible Chrysler, Jeep and Dodge vehicles. Ed Broadbear, director of incentives and programs for Chrysler, told media in a conference call Wednesday that during the 12-state pilot, the company “saw a significant lift in auto sales” in those states, compared with sales in other states, so it decided to expand the program nationwide. “Financing is a critical concern in today’s economy, and the program provides considerable value to our customers and the economy,” he said. David Adams, president/CEO of the Michigan Credit Union League and its subsidiary, CUcorp, which negotiated the partnership, said CUcorp will work with state associations and credit unions to promote the discounts and cash rebates to boost auto sales. “The $500 and $1,000 cash rebates are layered on top of all the other dealer incentives offered,” he said. Adams noted credit unions reported a surge of an annualized 20% to 80% in growth in auto loans during the pilot, partly due to the incentive. Credit unions “have the liquidity to stimulate the economy, with more than $160 billion in available liquidity.” By making $80 million available for the loan program, credit unions could provide financing for four million auto sales. “Credit unions are doing their part to help the economy,” he said. Details about Chrysler’s “Credit Union Member Cash” program can be found at by using the “Invest in America” resource link.

Arrowhead CU shuttering four branches

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SAN BERNARDINO, Calif. (1/8/09)--Arrowhead CU is reducing its 2009 operating budget by 10% and shuttering four branches to maintain its well-capitalized rating through 2009 and beyond, Arrowhead said. The credit union is closing three branches in grocery stores in Chino Hills, Hemet, and San Jacinto, effective Feb 7. A fourth branch in Murrieta also is closing the same day. ATMs at those locations will remain open. Members in those communities can conduct financial transactions at Arrowhead’s partner credit unions and can access Arrowhead’s online system, said Larry Sharp, Arrowhead President/CEO, in a press release. As a result of the closures, Arrowhead, a $1.032 billion asset, San Bernardino-based credit union, is reducing its 558-person work-force by about 20 positions, Sharp said. The credit union has identified 10 unfilled positions in-house where some employees may be transferred. “The largest foreclosure rate in the country is in that area of San Bernardino and Riverside counties,” Sharp told News Now. “Our credit union was not impacted by the subprime issues, but rather by the downturn in the economy that resulted from the subprime problems. There is 10% unemployment in our area that could reach 12% by year-end. Also, the bankruptcy rate is up 125% now in our area. We don’t know how deep this thing is.” After the closings, Arrowhead will go from 28 to 24 branches, Sharp added. The branch located in a free-standing building will continue to be leased by the credit union until a new tenant is found, Sharp said. Sharp said he is taking a 17% pay cut in a top-to-bottom cost-cutting effort. The credit union also is postponing plans to add new branches and is cutting its budgets for travel, education and community development. “Overall, we are cutting our costs by more than 10% for 2009. These reductions will leave Arrowhead CU strong and well-positioned once the economy turns around so that we can continue to provide outstanding service to our more than 162,000 members,” Sharp said. Sharp, met Tuesday in Washington D.C., with congressional members and NCUA Board to discuss competitive inequities created by the uneven application of the $700 billion Troubled Asset Relief Program (TARP), which has excluded credit unions. Joined by fellow California credit union leaders, Sharp discussed the consequences of providing TARP funding only to banks. “I’m mad that Paulson and the Treasury decided to fund our competitors at the banks and give them an advantage in assistance, and leave us out in the cold in the marketplace,” Sharp told News Now. “We’re going to have to take the hit [for now].” The Credit Union National Association has been working with legislators to include credit unions in the TARP initiative.

Demand prompts GMs pilot expansion to 50 states

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LANSING, Mich. (1/8/09)--Credit unions and General Motors announced Wednesday that their four-state pilot of “Invest in America,” a loan incentive program for credit union members, is expanding to all 50 states. “The four-state pilot announced in early December had outstanding response from customers and dealers, with dealers asking to take the program nationwide,” said Jim Bunnell, executive director of Channel Marketing for GM, at a press conference call. “We’re expanding the program to all 50 states, effective today.” The Invest in America program will give 90 million credit union members across the country access to GM’s “Credit Union Member Discount Program” at participating GM dealers, as well as access to affordable financing on new vehicle purchases. Bunnell noted that hits to the website generated a 30% conversion rate into auto loans during the first weeks of the pilot. “Dealers in other states heard about the pilot and said, ‘What about us?’” he said. The national pilot program will run through March 31. It offers GM supplier price discounts on new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac cars and trucks. “Credit unions have billions to lend, which in this economy, makes the Invest in America program very timely for General Motors,” said David Adams, president/CEO of the Michigan Credit Union League and its subsidiary, CUcorp, a marketing company for credit unions. “The exclusive credit union member discounts will create a compelling opportunity for the 90 million credit union members nationwide.” Adams said the program's website had 1.3 million hits and credit unions reported an annualized growth rate between 20% and 80% during December since the pilot began. The original pilot with Michigan, Indiana, Illinois and Ohio credit unions and dealers will run through the end of June. A separate pilot program with Chrysler LLC also was extended nationally. (See News Now’s article, “Chrysler’s partnership with CUs now available nationwide.”) Adams also said CUcorp and the league were “in active and positive talks with Ford” about the possibility of extending the program.

CUs hold largest assets among co-ops

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MADISON, Wis. (1/8/09)--The four largest U.S. cooperative sectors--including credit unions--hold more than $1 trillion in assets, serve 107 million members, employ 435,000 people and generate more than $19 billion in wages, said a recent University of Wisconsin study. The four sectors studied were agricultural co-ops, the farm credit system, electric co-ops, and credit unions (LoneStar Leaguer Jan. 7). “Of the four sectors, credit unions hold the largest amount of assets: $761 billion. Their revenue, however, is roughly one-third that of agricultural cooperatives,” the study said. The study, conducted by the university’s Center for Cooperatives, was commissioned by the National Cooperative Business Association and the U.S. Department of Agriculture to discover the economic impact of cooperatives on the U.S. economy. The researchers were recently awarded a grant to expand the study to mutual insurance, childcare, housing, healthcare, education, transportation, and other non-profit, cooperative organizations. Credit unions nationwide employ over 236,000 people and pay over $9 billion in wages, the study said.

CU System briefs (01/07/2009)

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* NAPERVILLE, Ill. (1/8/09)--The Illinois Youth Involvement Council and University of Illinois Extension sponsored a “Train the Trainer” workshop for the National Endowment for Financial Education’s (NEFE) High School Financial Planning Program. The workshop for teachers and agency staff who work with young adults (ages 14-19) was conducted at the Illinois Credit Union League’s offices in Naperville. HSFPP complements existing money management curricula used in high schools and agencies, according to Kathy Reuter, extension consumer and family economics educator. Reuter is shown here presenting to the group. (Photo provided by the Illinois Credit Union League) … * FARGO, N.D. (1/8/09)--A suspect in the Dec. 18 robbery of the Fargo branch of First Community CU allegedly sent a text message to his girlfriend admitting the crime--while police were interviewing her, according to court documents ( Jan. 6). Denver Lee Tergesen was arrested after authorities tracked him through his cell phone’s signals to a stolen car in Detroit Lakes, Minn. Police say he has confessed to robbing the credit union of nearly $10,000 at gunpoint … * TAMPA, Fla. (1/8/09)--The fourth suspect in the Christmas Eve robbery of a branch of the Tampa Postal District FCU was arrested while hiding in a small freezer. Jerome Simmons, 21, had crammed himself in with the ice. Simmons and three others--Richard Charles Harris, 21, Hudson; and Jerald Davis, 22, and Tommy Lee Benton, 49, both of Fort Lauderdale--are charged with armed robbery. During the heist, one suspect dropped his cell phone at a teller’s window (St. Petersburg Times Jan. 1, and South Florida Sun-Sentinel Jan. 6 and Jan. 7) … * BALTIMORE (1/8/09)--MECU of Baltimore announced that in December its members received the second half of their annual cash bonus, which totaled more than $4.2 million. Loan interest rebates were deposited in members’ accounts on Dec. 1, and extraordinary dividends were deposited on Dec. 31. MECU has paid members a cash bonus every year since 1981. In 2007, its board decided to pay half the bonus in June and the other half in December. “Many of our members are teachers,” said Herman Williams Jr., chairman. “By providing part of the cash bonus we offer our members at the start of the summer, it gives our teacher members some extra cash when they most need it.” MECU President/CEO Bert J. Hash Jr. said, “While some area financial institutions have struggled during the past year, MECU has remained well capitalized and ready to help our members with their financial needs in 2009.” … * JACKSON, Miss. (1/8/09)--The merger of Hope Community CU, a $63.4 million asset community development credit union (CDCU) based in Jackson, Miss., and American Savings CU (ASCU), based in Memphis, Tenn., became effective Jan. 1. The merger results in a larger, stronger regional CDCU serving working families in Arkansas, Louisiana, Mississippi and Tennessee, said the credit unions. ASCU will retain its name and operate as a division of HOPE until systems are integrated over the coming hear. While HOPE will expand its branch network in three states, ASCU members will receive additional products such as mortgages and small business loans “This partnership builds on the strengths of two institutions to provide an important resource for people struggling to weather the current financial crisis,” said HOPE CEO Bill Bynum …

CU presents 25000 to displaced GM worker

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DALLAS (1/8/09)--Dallas-based Neighborhood CU personally delivered a $25,000 Grand Prize notification to 27-year-old Tiniska Brooks Saturday--one of the credit union’s Prize Savings Accountholders at her parents’ home in Arlington, Texas.
Click to view larger image Tiniska Brooks received $25,000 from Neighborhood CU Vice President Carolyn Jordan (left) and CEO Chet Brooks after wining one of the credit union’s Grand Prize Savings awards. (Photo provided by Neighborhood CU)
Brooks, who recently took an employee buyout offer from General Motors and has decided to go to nursing school, was overcome with emotion. “You have no idea how much this means to me,” Brooks said. “I’m going to use this money to help pay for nursing school and housing, so I can begin a new career. “Of course, I may have to do a little bit of shopping,” she added. “We are glad we can help enrich Tiniska’s life and strive to do that for all our members,” said Neighborhood CEO Chet Kimmell. “The goal of our Prize Savings Account is to reward people like Tiniska who wisely make the choice to save their money.” Alarmed by declining savings rates, Neighborhood CU established the Prize Savings Account in 2007 to encourage people to save and see how those savings can pay off. Members of the $250 million-asset credit union receive one drawing entry for every $25 monthly average balance in their Prize Savings Accounts. The greater the savings, the greater chance a member has of winning. Throughout the year, drawings are held for smaller prizes, including gift certificates, DVD players and plasma TVs. At the conclusion of each year, a grand prize winner is drawn for the $25,000 jackpot.

New York Foundation announces board officers

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ALBANY, N.Y. (1/8/09)--The trustees of the New York Credit Union Foundation elected a new slate of officers at its December board meeting. The officers are:
* Chair, Vicki O’Neill, president/CEO, ACMG FCU, Solvay; * Vice chair, Bruno Sementilli, president/CEO, Quorum FCU, Purchase; and * Secretary/treasurer, Brian Clarke, chief financial officer, Bethpage FCU, Bethpage.
O’Neill replaces outgoing chair Nancy Kasprzak-Whitmore. Sementilli and Clarke begin second terms in their positions. The board also thanked outgoing board member, Arthur Field, president/CEO of First Heritage FCU, Painted Post, for his seven years of service.

SIU CU students create Facebook campaign

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CARBONDALE, Ill. (1/8/09)--Southern Illinois University CU (SIU CU) has launched a Smart Young Investors Facebook fan page. The page was created by students in the university’s business college and provides information about investing, spending and economic trends. It also includes a discussion board and details upcoming events ( Jan. 7). The students worked with SIU Marketing Director, Chris Sievers, to promote the credit union on Facebook. SIU CU held drawings for new fan page participants who could win $100, $50 or $20. The page has been successful, and the credit union plans to continue marketing through the Web, Sievers said. For more information, use the links. A log-in is required to view the Facebook page.

Pennsylvania foundation breaks fundraising record

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HARRISBURG, Pa. (1/8/09)--The Pennsylvania Credit Union Foundation raised $264,710 as of Dec. 31, exceeding its 2008 fundraising goal of $256,000. The year-end totals are $9,200 more than the $255,499 raised as of Dec. 31, 2007, and an increase of 3.4% over 2007 projections (Life is a Highway Jan. 7). “The foundation’s ability to increase its grants portfolio to a greater number of underserved Pennsylvanians despite diminished economic results during the second half of 2008 helped maintain a steady flow of funds that benefited the foundation and made this record result possible,” said Foundation Chairman Norb Kaczmarek, CEO of Erie (Pa.) FCU. Foundation Vice Chairman and Fundraising Chairman Dave Ackerman, CEO of USX FCU, Cranberry Township, Pa., was fundraising chairman for the foundation. Kaczmarek and Ackerman challenged the board to continue its work in 2009 during even greater economic challenges, the foundation said. The foundation has raised more than $2.3 million since its inception in 1996.

Biz Kid among the best in books TV says IUSA TODAYI

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NEW YORK (1/7/09)--For the second time in just over six months, USA Today has spotlighted “Biz Kid$,” a television program underwritten by America’s Credit Unions and aimed at teaching youths about money. This time, “Biz Kid$” is named among the “best in books, TV.” The article appeared in the national newspaper’s Money section (Jan. 5), and included a photo that was the dominant element on the page. The photo is of Kailyn Cage, who runs a mini vending empire in Washington D.C. One of the 12 episodes this season focuses on the importance of good credit and features Cage, a Bowie, Md., teen who secured credit through the financing arm of the vending machines manufacturer. In June, USA Today also featured the program and a photo in its Money Section (News Now June 4).

Kansas CUs plan expansion under new FOM law

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WICHITA, Kan. (1/7/09)--A new Kansas state law that places geographic field of membership restrictions on areas that credit unions can serve went into effect Thursday, and has caused credit unions to adjust their growth plans accordingly. The first stage of the law went into effect July 1, and the grandfathering portion recently went into effect Thursday. The law grandfathers existing credit union members and their immediate family members, all existing occupational and associational groups, current geographic fields of membership up to one million in population and all current branch counties (News Now July 1). It also outlines geographic limitations of up to 500,000 in population, using multiple contiguous political jurisdictions for credit unions not headquartered in a metropolitan statistical area (News Now April 15). “So far, the transition of Kansas credit unions--particularly the nine that had to reconfigure their field of memberships by Jan. 1--has gone smoothly,” Haley DaVee, Kansas Credit Union Association political and public affairs specialist, told News Now. “Kansas credit unions have used the opportunity under the law to continue their plans for growth and expansion. “Some of these opportunities include the ability to continue serving multiple common bonds, in addition to serving large geographic areas of up to one million in population,” she continued. “So what we’re finding so far is the law really does provide Kansas state-chartered credit unions with the flexibility they need to continue to grow and to serve the needs of Kansas consumers.” Mid American CU, a $133 million asset, Wichita-based credit union, selected 18 counties for its field of membership under the new law in its plan that it submitted to the state, which is currently pending approval, Jim Holt, Mid-American CEO, told News Now. “We decided to pick counties that are growing at least 5%, based on the 2000 census” he said. “But the counties have to be contiguous--to achieve that we had to pick a couple that were not at 5% growth. So we have 16 contiguous counties and two other counties that we already have offices in. The existing counties that we already have offices in don’t count toward the one million total population that we are allowed to serve under the new law.” Boeing Wichita CU (BWCU), a $597.4 million asset credit union in Wichita, had to eliminate 28 counties from its original field of membership under the new law, Bob Corwin, BWCU CEO, told News Now. “With the new plan we submitted to the state, we were able to configure 17 counties to involve our primary market areas, including all counties in which we had a physical presence,” Corwin said. BWCU has 15 branches. In order to keep the counties that BWCU serves and also have the 17 counties be contiguous and within the one-million-population limit, the credit union had to eliminate some counties with smaller populations from its new field of membership, Corwin explained.

MSN Money blog outlines 10 reasons why CUs rule

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NEW YORK (1/7/09)--Credit unions rule, according to a Tuesday blog post on The blog posting, “10 reasons why credit unions rule,” by Karen Datko, encouraged consumers to join a credit union to receive better interest rates on loans and deposits, better prospects of receiving personal loans, and lower fees. Credit unions exist to serve their members, while banks exist to serve their shareholders. Members are also more important at credit unions, where “at a huge bank, you’re an account number,” she said. “(Banks) see so many customers throughout the day that there’s no opportunity to build relationships,” Datko added. Members of credit unions also aren’t pressured to take on risks they can’t afford. “Credit unions aren’t immune to loan defaults, but when you don’t feel the constant pressure to generate a profit, you don’t take on those riskier loans,” she said. For the full post, use the link.

REAL Solutions plans to delve deeper in 2009

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WASHINGTON (1/7/09)--REAL Solutions, the signature program of the National Credit Union Foundation (NCUF), plans to delve deeper rather than extend wider in 2009.
National Program Director Lois Kitsch and her team of field coaches are bringing REAL Solutions to more than 30 states. (Photo provided by the National Credit Union Foundation)
“While we still plan to bring REAL Solutions to more states,” said National Program Director Lois Kitsch, “we plan to delve deeper in the 30 current participating states. Participating leagues have asked us to introduce new services, pilot projects, and toolkits to help more credit unions implement REAL Solutions.” Each time a state adopts the program, an NCUF field coach and a credit union development professional from the league train credit unions to provide services that serve consumers having low wealth—people with low income or modest means and those with moderate and middle incomes who struggle to save and build assets. REAL Solutions then shares best practices to help low-wealth consumers become credit union members, grow savings, and build assets that will generate wealth. “When rolling out REAL Solutions in new states, we will follow the same format that has worked so well in other states,” Kitsch said. “By combining our resources with the league, credit unions and their members will benefit from our shared experiences across the country.” Online, a new REAL Solutions Impact Center is now available for credit unions in every state. Model service descriptions, low-wealth market trends, partnership opportunities, interactive forums and blogs are designed to appeal not only to participating credit unions, but to all credit unions. Later this year, through a grant from the Aspen Institute’s “Living Cities Mashup,” the REAL Solutions Impact Center will add a portal for community organizations. This will help credit unions address one of the Credit Union National Association (CUNA) Membership Growth Task Force’s top recommendations: “develop more community partnerships.” NCUF Executive Director Steve Delfin served as a liaison to the CUNA Membership Growth Task Force. He said the Impact Center’s ultimate goal “is to become the ‘go-to’ site for everyone interested in helping credit unions better serve low-wealth households and emerging markets including young adults.” The Impact Center is also designed to help credit unions measure the impact of their services. Leading up to the CUNA Governmental Affairs Conference (GAC) in February, credit unions will have an opportunity to fill out an online survey to quantify their outreach initiatives. The survey will be based on the REAL Deal, the new outreach initiative advanced by the American Association of Credit Union Leagues (AACUL) in partnership with CUNA and NCUF (News Now Jan.5). NCUF, state credit union foundations and leagues will continue to fund REAL Solutions through shared assets including the Community Investment Fund (CIF), which won the Association of Fundraising Professionals’ Award for Fundraising Excellence. Offered through the Corporate Credit Union Network, CIF investments are structured to earn dividends for each corporate credit union member while making charitable donations to NCUF and state credit union organizations.

NFCDCU Barrier to new charters too high

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NEW YORK (1/7/09)--The newly chartered Georgia Family FCU in Atlanta is one of only a handful of credit unions chartered last year, a trend the National Federation of Community Development Credit Unions (NFCDCU) says it would like to change. “During the 1980s and ’90s, the National Credit Union Administration (NCUA) was especially active in chartering new credit unions across the nation,” said federation President/CEO Cliff Rosenthal. “Some of those institutions did not make it, but others have become some of the nation’s premier credit unions serving people of modest means. “In the past, communities could come together, develop a basic business plan, pool together their limited resources, and they could start a credit union,” Rosenthal said. “These days, it is virtually a requirement that organizing groups raise hundreds of thousands of dollars of start-up funds in order to satisfy NCUA requirements. We think the barrier to chartering has become too high.” Rosenthal said this is a major challenge, given the current economic downturn with a marked decrease in philanthropic activities. Georgia Family FCU was fortunate because in addition to pledged deposits from the proposed membership, it raised nearly $1 million in combined cash and in-kind donations to start up, with major funding from Atlanta-based Marcus Foundation, he added. The federation has seen an increased interest by groups seeking to organize their own community-controlled financial institutions. “Nearly 50% of our technical assistance is now being devoted to helping organizing groups across the nation, but the process is extremely difficult and time consuming,” Rosenthal said. He added that NCUA’s recent announcement that it would centralize the chartering process at its Alexandria, Va., headquarters, provides some hope. In 2008, the federation assisted these CDCU organizing groups:
* Casa de Maryland, Silver Springs, Md.; * Collaborative Support Programs, Clifton, N.J.; * East River Development Alliance (ERDA), Long Island City, Queens, N.Y.; * Express CU, Seattle; * Fondo Internacional para el Desarrollo de los Migrantes (FIDMI), Washington, D.C.; * Georgia Family FCU, Atlanta; * Haitian Evangelical CU (proposed), West Palm Beach County, Fla.; * Inspire FCU (proposed), Battle Creek, Mich.; * NCI Community CU, Houston, Texas; * Bergen County CU (proposed), Bergen County, N.J.; * Kalamzoo CDCU (proposed), Kalamazoo, Mich.; and * Pascua Yaqui Tribe, Tucson, Ariz.

Mountain America SBA loan officer helps create 100 new jobs

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SALT LAKE CITY (1/7/09)--Matthew Ashton, Mountain America CU Small Business Administration (SBA) loan officer, was given the “5 Million
Matthew Ashton, Mountain America CU, was recognized by Rob Richards (left), Utah Certified Development Company president, for his work to create 100 new jobs. (Photo provided by Mountain America CU)
Dollar” award from Utah Certified Development Company (CDC) for his work to create 100 new jobs. “By participating in the SBA 504 Loan program, Ashton and Mountain America have provided more than $12 million in small business financing to area businesses throughout the state of Utah,” said Sonia Maughan, Utah CDC. “His work has assisted these businesses in creating over 100 new jobs and has added value to the local economy.” "(Ashton) has worked really hard this year and made sure our members are given the best deal with the best pricing," added Curtis Anderson, Mountain America vice president of SBA Lending. Utah CDC helps small businesses in financing up to 90% of the purchase of long-term fixed assets. Assets include land, building and equipment. Mountain America, Salt Lake City, has more than $2.8 billion in assets.

CUs without cards miss key contact in young adult market

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MADISON, Wis. (1/7/09)--Credit unions have to offer an attractive, competitive credit card product to deepen relationships with young adults. If they don’t, they will miss the chance to capture an active borrowing relationship that lasts about 15 years, according to a report by the Filene Research Institute. “A responsible, attractive credit card for young adults is one of the clearest paths to a relationship with young adults,” wrote Ben Rogers, driver of Filene’s CU Tomorrow in the report, “The First Credit Card.” The cards reach young adults “at a time when their financial needs are mostly transactional, and it can be a gateway to other loans and deposit accounts,” he added. Filene found no evidence that members of Generation Y are irresponsible borrowers. Instead, 88% of undergraduates paid their balances on time, compared with 91% of adults. Students also carry an average of $552 on their cards, which is one-third of the size of the balance of a non-student cardholder. Credit unions offering card programs should avoid charging expensive late fees and high interest rates like some card companies. Currently, student cards average 15.26% interest. A credit union can generate revenue from cards while charging lower rates, Filene said. Credit unions also can offer savings components--such as depositing a percentage of the purchases into a savings account--with the cards. For more information, use the link.

Hawaiis membership in CUs up by 30000

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HONOLULU, Hawaii (1/7/09)--Membership in Hawaii credit unions increased by 30,000 to more than 806,000 in 2008, even though there were three fewer credit unions in the state, according to the National Credit Union Administration. Hawaii’s 96 credit unions had roughly $7.1 billion in combined assets last year, up 6% from 2007 (bizjournals Jan. 5). Loans grew 9% to about $3.7 billion. The largest loans originated from Hawaii USA FCU, Honolulu, with $615.9 million; Hawaii State FCU, Honolulu, with $424.9 million; and Hawaii Community FCU, Kailua Kona, with $240.9 million. The biggest percentage increases in loans were realized at two small credit unions with two employees each:
* Word of Life FCU, Honolulu, with $1.9 million assets and 147 members, saw a 70.2% rise in loans to $1.6 million; and * Dole Wahiawa FCU, Wahiawa, with $2.2 million assets and 514 members, issued $1.7 million in loans, up 53% from the previous year.

CU System briefs (01/06/2009)

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* RICHARDSON, Texas (1/7/09)--David Addison announced Tuesday his resignation as president/CEO of the $1.8 billion asset Texans CU, effective Jan. 31. He led the Richardson, Texas-based credit union and its subsidiaries for six years. Mike Sauer, a long-term board member who has held all board officer positions during his tenure, will act as interim CEO until a replacement is made by the board within the next 90 days, said the credit union in a press release. Addison said the decision to leave is a “personal one that involved much discussion and planning with my family and the board of directors. While I am saddened to depart from this wonderful institution, I have great confidence that the rich history and great success of Texans CU will continue under the leadership of the board and able management team.” Board Chairman Judith Moore said Addison’s “guiding vision and leadership will be sorely missed” … * ALBANY, N.Y. (1/7/09)--Congressman-elect Eric Massa (D-Jamestown/Buffalo) attended the Jamestown chapter of the Credit Union Association of New York’s 15th annual Toys for Kids dinner. A lifetime credit union member, Massa congratulated the chapter credit unions for making a difference for hundreds of disadvantaged children and setting an example for community service. “Credit unions are an integral part of the American economy and the American working family, and I am proud to be both a member and a supporter of these great institutions,” he said. He added he looks forward “to working in Congress to increase membership and further strengthen our nation’s credit unions.” From left are: Pastor Gail McCrory, Solomon’s Porch Ministries; Vicky Matteson, manager, Jamestown Area Community FCU; Julie Fenton, human resources coordinator, Greater Chautauqua FCU; Travis Heiser, CEO, Inner Lakes FCU; Massa; and Cheryl Frantzen, political action coordinator, and Leona Haberstro, advocacy specialist, both from Credit Union Association of New York. (Photo provided by the Credit Union Association of New York) … * ST. PAUL, Minn. (1/7/09)--A branch manager/security officer in charge of security camera videotapes at a St. Paul credit union was charged with two counts of theft after tapes, due to be recycled a few days later, showed her closing a member’s certificate of deposit account. Samantha Mae Thrond, 26, was charged with stealing more than $17,000 from accounts of members of Capital Trust FCU (St. Paul Pioneer Press Jan. 3) … * OKLAHOMA CITY, Okla. (1/7/09)—Donna Kay Gainer, 61, of Drummond, Okla., a former employee of Tinker FCU’s Enid branch, pleaded guilty Monday to embezzling between $30,000 and $70,000 from the credit union. She admitted to taking more than $1,000 in June 2008. Gainer faces up to 30 years in prison and a $1 million fine. Sentencing will be in several months (The Daily Oklahoman Jan. 5) … * ALBUQUERQUE, N.M. (1/7/09)--Thomas J. Ryan, president of First Financial CU in Albuquerque, N.M., from 1958 to 1986, died Friday, according to the Credit Union Association of New Mexico. He was also president of the credit union’s subsidiary, Credit Union Services, from 1987 to 1990. Ryan was active in the credit union community, serving on boards of the New Mexico Credit Union League and National Association of Federal Credit Unions, which named him Professional of the Year. He oversaw the development of many services, including checking accounts, certificates, open-end lending, ATM services, the CU ANYTIME ATM network and investment services for the credit union. Services are scheduled for this coming Friday … * HARRISBURG, Pa. (1/7/09)--Anthony Alviani, CEO/treasurer of New Brighton Schools FCU in New Brighton, Pa., died Saturday after a battle with cancer. He was 61. Alviani was a teacher for 35 years, including 30 years at New Brighton High School, where he taught computer science, math, business education and typing. He also taught classes at the Community College of Beaver County and the Beaver County Vocational Technical School. The credit union has $546,057 in assets (Life is a Highway Jan. 6) …

New CDCU chartered to serve Latinos in Atlanta

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ATLANTA (1/7/09)--Efforts that began in 2006 finally paid off for organizers of the newest community development credit union (CDCU), Georgia Family FCU in Atlanta. The credit union received its charter from the National Credit Union Administration (NCUA).
Atlanta’s Georgia Family FCU CEO Paola Diaz-Torres shows off the credit union’s new charter certificate to Georgia Credit Union Affiliates CEO Mike Mercer. (Photo provided by the National Federation of Community Development Credit Unions)
According to the National Federation of Community Development Credit Unions (NFCDCU), which worked with the organizers and provided technical assistance, the new credit union will serve primarily the low-income, metro-Atlanta Latino community. The credit union’s goal “is to break down the cultural and functional barriers that stand between low-income immigrant residents and mainstream financial services,” said Paola Diaz-Torres, who will serve as CEO of the new CDCU. “Our project aims to serve low-income individuals from the Hispanic community who struggle to build assets due to a lack of financial sophistication or access to affordable financial products,” she said. “The organizing process is so hard and discouraging that the friendship and support from the CDCU movement was instrumental in keeping our project moving forward,” she added. Organizers are looking for additional supporters to help spread the word about their efforts and to serve as conduits to leverage additional resources for the credit union.

PCUA promotes student loans to states colleges

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HARRISBURG, Pa. (1/7/09)--The Pennsylvania Credit Union Association (PCUA) sent a letter to state colleges and universities Friday to inform them that credit unions in the state continue to offer student loans at a time when many lenders have discontinued their student loan programs. The letter sent by PCUA President/CEO Jim McCormack includes a listing of more than 170 credit unions participating in the federal student loan program (FFEL) through an alliance with American Education Services/Pennsylvania Higher Education Assistance Agency (Life is a Highway Jan. 6). In the letter, McCormack said, “Credit unions always have been and remain a viable option for the students you work tirelessly to assist in this very important stage in their lives ... We hope that your staff will recommend local credit unions as a viable financing option.” Participating Pennsylvania credit unions approved more than $84.5 million dollars in federal student loans in 2008. To read the letter, use the link.

HR departments selective in planning for tough year

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NEW YORK (1/6/09)--Human resource departments--especially those in the finance sector--are planning for a tough year. A global survey finds that companies remain selective in planning their work force, pay and benefit cuts to weather the economy. Employees are most worried about the economic turmoil’s impact on their retirement plans, according to the survey, conducted by Mercer, a provider of consulting, outsourcing and investment services. In the survey, 81% of respondents said they expect a decline in their company’s business performance during 2009, with 35% indicating they likely will make significant work force reductions. Most respondents said they likely will curtail overall hiring, reduce salary increases and cut bonus payouts while using selective hiring to continue hiring talent to fill shortages in key skill sets. Worry about retirement investments tops the list of employee concerns, outweighing employee anxiety about job security. Eighty-three percent said they don’t expect their companies to reduce the level of employer contributions to defined contribution retirement plans, and 77% expect to review investment and administrative fees, possibly due to pressure from regulators as well as the decline in investment values. Most (73%) said they are now likely to reduce salary increases in 2009 from those originally budgeted, with 12% indicating they would freeze wages at 2008 levels. This is is more likely in certain industries-- including banking and technology. Sixty percent expect to reduce 2009 bonus payouts based on 2008 performance, and about 75% in the financial sector likely will reduce 2009 bonus payouts. The finance sector also tops the list of industries likely to change variable pay programs. That sector is twice as likely as other sectors to do so, with 28% saying their financial companies plan to change or develop new variable pay programs. Most will hold off on defined contribution cuts and most health benefits programs are safe, with employee contributions likely to rise. The survey of more than 1,000 human resource officers and finance personnel from more than 100 countries was conducted in early November.

Washington state CUs getting second look from consumers

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ABERDEEN, Wash. (1/6/09)--More consumers in Washington state are rediscovering the credit union difference, John Annaloro, president/CEO of the Washington Credit Union League, told The Daily World (Jan. 2). One-third of Washingtonians bank at credit unions. Between December 2007 and June 2008, roughly 62,000 opened new member accounts. Great Northwest FCU, Aberdeen, experienced an increase in new accounts--likely due to the comfort zone it provides, said Karen Burkhalter, CEO. The credit union’s “personal touch” in service means that it works with members individually, and helps them through a job loss or workplace injury, she told the newspaper. Credit unions don’t make negative headlines, said Marshall Ellison, president of TwinStar CU, Olympia, in the article. They also don’t do subprime loans, added Terry Fultz, CEO, Newrizons FCU, Hoquiam. However, credit unions still make loans and are well-capitalized. Newrizons serves “everyday citizens”--including those that banks “don’t want to help,” Fultz said. Overall, credit unions care about their members, making them feel like an owner, instead of a member, said Joe Robertson, CEO, Our Community FCU, Shelton. Credit unions’ cooperative principles of self-responsibility, self-help, democracy and equality are strong, the Washington league told the newspaper. For the full article, use the link.

ICU MagazineI goes digital

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MADISON, Wis. (1/6/09)--Credit Union Magazine, the flagship monthly print publication of the Credit Union National Association, has gone digital. The first digital issue is now available and features all the features in the print version, plus interactive features, such as the ability to view a single page or two pages at once, to turn pages, adjust the size for viewing, or see the entire magazine in thumbprints photos. In a video accompanying the digital debut, Editor Kathy Kuehn notes the issue’s cover story is about reverse mortgages. The issue includes a lending outlook for 2009 and tips from leading lenders. To access the magazine and view the video, use the resource link.

Tech CU adopting new strategies for 2009

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SAN JOSE, Calif. (1/6/09)--A Friday Silicon Valley/San Jose Business Journal article noted that financial institutions in the San Jose, Calif., area are adopting new strategies to cope with the economy. One of the institutions mentioned was Technology CU of San Jose. Technology CU is looking into a program that would increase debit card use to generate more point-of-sale and personal identification number-based ATM revenues, said Viktoria Earle, Tech CU controller and vice president of finance, told the newspaper (Jan. 5). The credit union also will send more information electronically to save on postage, and convert its tax forms to an electronic format, Victor Smilgys, Technology CU e-commerce vice president, told the newspaper. Technology CU will continue lending, and generating revenue with non-loan income. Technology CU has $1.2 billion in assets.

PCUA reports first Loan Trader participants

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HARRISBURG, Pa. (1/6/09)--Four member business loans totaling $411,643 were completed through the Pennsylvania Credit Union Association’s (PCUA) Credit Union Loan Trader, PCUA said Monday. The loans were listed by AmeriChoice FCU in Mechanicsburg, and were purchased by SPE FCU in State College. Secured by real estate, the loans ranged from 6.10% to 7.10% (Life is a Highway Jan. 5). SPE FCU noted the portal’s ease of use. “Once I requested access to the financial information, it was uploaded to the site and within hours I was able to view the details of the loans being offered,” said Mike Scott, small business lender, SPE FCU. PCUA said it is securing a trademark for the service. “We developed Credit Union Loan Trader to help credit unions better meet the needs of small businesses,” said PCUA President/CEO Jim McCormack. “Along with the new look, we plan to add enhancements to the site going forward.”

Michigan governor signs financial ed law

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LANSING, Mich. (1/6/09)--Michigan Gov. Jennifer Granholm has signed into law a Michigan Credit Union League (MCUL)-supported bill that would allow a financial education course to satisfy part of the state’s high school math requirements. Senate Bill 834, now Public Act 316 of 2008, was signed into law Dec. 17. It was introduced in October 2007 by State Sen. Michael Switalski (D-Roseville), said MCUL. “This amendment to the Michigan high school math curriculum demonstrates how lawmakers and schools are recognizing the increasing importance of financial education,” said Patrick La Pine, league executive vice president, in the league’s newsletter (Michigan Monitor Jan. 5). “Financial literacy is an integral part of the credit union social mission, and the introduction and approval of this bill has been a priority of the MCUL. To see it signed into law with strong support is encouraging and serves as a significant step toward teaching students the money management skills that will serve them their whole lives,” La Pine told the publication.

CU System briefs (01/05/2009)

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* ATLANTA (1/6/09)--Georgia’s largest credit union, Atlanta-based Delta Community CU, announced it is giving back about $5 million in patronage rewards to its members. A strong capital base and solid financial results for the $2.8 billion asset credit union enabled the move, which will further strengthen its already well-capitalized position. “Sharing our earnings with our members is one important difference between Delta Community CU and other financial institutions,” said Rick Foley, president/CEO. “In light of the current economic climate, we believe it’s a difference that is more important than ever.” … * SAN ANTONIO (1/6/09)--After nearly 23 years, Watt Prichard has decided to step down as president/CEO of San Antonio-based River City FCU. He will continue leading the credit union until March 31. Kim Heinze, a 30-year industry veteran, will succeed Prichard, effective April 1. Heinze has served as interim president/CEO of Beaumont, Texas-based Mobiloil FCU, and in senior positions at Beaumont (Texas) Telco CU and FivePoint CU (formerly Texaco CU), Nederland (San Antonio Business Journal Jan. 2) … * STOCKTON, Calif. (1/6/09)--Premier Community CU, based in Stockton, has named Paul Yang as president/CEO. Yang has eight years’ experience in the credit union industry. Prior to joining Premier Community, Yang served as executive vice president at Eagle Legacy CU in Colorado and as president of First Choice Financial Services, a credit union service organization. He also was assistant vice president of information technology at California-based Commonwealth Central CU. Premier Community CU has more than $100 million in assets … * HARRISBURG, Pa. (1/6/09)—John Kebles retired Jan. 1 as president/CEO of Choice One Community FCU, Wilkes-Barre, Pa., said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Jan. 5). He will retrain the title of CEO and serve as an advisor until June 30. Tom Smith will succeed him. Smith’s title during the transition will be president/chief financial officer. He will assume the president/CEO title July 1. Kebles is the receipient of the prestigious 1990 Lifetime Achievement Award for Professional of the Year and the 2005 Keystone Award. Last year he was among the first class of inductees into the Credit Union House Hall of Leaders. He is past chairman of PCUA and the Pennsylvania Credit Union Foundation board … * WARMINSTER, Pa. (1/6/09)--Freedom CU, a $357 million asset credit union based in Warminster, Pa., has expanded its Business Services suite to include deposit, loan and merchant services to help small-business owners save money and manage their business finances. A June 2008 survey asking about members’ interest in Freedom’s Business Services, prompted the expansion, said the credit union … * NEW CASTLE, Del. (1/6/09)--Ruth Lawley, executive assistant at the Delaware Credit Union League for 24 years, died Dec. 18, after a nine-year battle with lymphoma. She was 70. Lawley officially retired in October, said the league’s newsletter (Together Jan. 5). The league will dedicate her former office as the “Ruth Lawley Welcome Center” at a special ceremony this month. She is survived by her husband, three daughters, six grandchildren, and stepchildren and grandchildren in Alabama …

Chairmans letter Banks costing taxpayers

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WARMINSTER, Pa. (1/6/09)--Banks are forcing credit unions to spend millions of dollars that could be used to better serve members, according to the chairman of a Pennsylvania credit union. Joe Yerkes, chairman of Freedom CU in Warminster, recently wrote a letter to the editor of The Intelligencer (Dec. 29) saying banks are misusing government bailout funds and are costing credit unions millions of dollars in litigation. Bankers’ lawsuits against credit unions take away a consumer’s right to choose a credit union for financial services, he said. The money credit unions spend defending themselves could be used to offer better rates on deposits and loans, he added. And while banks accept bailout money, credit unions have never received any type of taxpayer support, Yerkes said. Freedom CU has more than $350 million in assets.

MarylandD.C. successes a springboard for 2009

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COLUMBIA, Md. (1/6/09)--The Maryland and District of Columbia Credit Union Association’s (MDDCCUA) successes last year will serve as a strong foundation for this year, the MDDCCUA said Monday. “The results we achieved touched hundreds of credit union employees to improve retention, and millions of consumers to drive them to join a credit union,” said MDDCCUA Chairman Wes Bone (FOCUS Newsletter Jan. 5). In 2008, MDDCCUA:
* Launched an ad campaign about credit unions’ safety and soundness. Forty-four credit unions funded the campaign; * Promoted credit unions in community activities such as Money Power Day, DC Tax and Access to Capital fairs, Capital Area Asset Builders’ Financial Literacy Fair, the Eighth Annual Montgomery County Housing Fair and Financial Fitness Day, and the first Credit Union Financial Fitness Fair; * Trained more than 1,500 credit union staff and volunteers; * Funded the Growth, Governance and Services program for small credit unions; * Conducted 18 on-site Bank Secrecy Act Independent reviews, including required training to more than 500 staff and volunteers; and * Facilitated 21 credit union strategic planning sessions.
Last year, two credit union leaders--Bert Hash, MECU CEO, Baltimore, and Thom Beck, MCT FCU CEO, Rockville--also led efforts for the “Task Force to Study How to Improve Financial Literacy in the State” to become law, MDDCCUA said.

CU Poinsettia Bowl makes the comics

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MADISON, Wis. (1/5/09)--A credit union’s sponsorship of a college football bowl made a national comic syndicate last week, appearing in The Washington Post, The Wisconsin State Journal, and other newspapers Thursday. The comic, “Real Life Adventures,” by Lance Aldrich and Graham Nolan, featured a husband and wife having a conversation about what was on television that day. The wife asked her husband what he was watching, and he replied, “The San Diego County Credit Union Poinsettia Bowl.” She said, “Wow, sponsor naming rights seem to have gotten cheaper.” He responded: “Oh good! The ‘Ms. Laub’s 3rd grade class Flax Bowl’ is on next.” The San Diego County Credit Union Poinsettia Bowl was Dec. 23. The credit union has sponsored the bowl since 2005, the first year it was held (News Now Dec. 6, 2005). San Diego County CU has $4.2 billion in assets. To see the comic, use the link.

Regulator Data breaches cost Maine FIs 2.1 million

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AUGUSTA, Maine (1/5/09)--Credit unions and banks in Maine incurred $2.1 million in combined expenses from two large data breaches in 2007 and 2008, according to a report from Maine’s Bureau of Financial Institutions. The “Maine Data Breach Study” reveals the impact a large-scale data breach has on Maine banks, credit unions and their customers,” said Bureau Superintendent Lloyd P. LaFountain III. Since 2007, two major data breaches affected Maine’s financial institutions—the TJX Cos. data breach announced in January 2007 and the Hannaford Bros. breach announced last March. LaFountain reported that 75 financial institutions—50 credit unions and 25 banks—responded to the survey. Of those, 71 institutions reported they were affected by at least one data breach since Jan. 1, 2007. The Hannaford breach, which involved a grocery store chain based in New England, affected the most institutions surveyed—71. It also compromised the greatest number of account holders--243,599—and was responsible for the largest dollar number in expenses--$1.6 million. More than 186,885 cards were reissued in that breach, said the agency. The TJX Cos. breach, which involved the Massachusetts based company’s retail stores such as Marshalls, affected 52 credit unions and banks and 64,825 accounts and cost $485,245. It resulted in Maine institutions reissuing 54,737 cards. Other breaches affected 18 institutions and 8,000 accounts and cost $62,760, with 4,857 cards reissued. Of the 71 credit unions and banks with compromised accounts, 25 reported unauthorized or fraudulent transfers. In one case, the unauthorized activity involved only one account. But in most instances, fewer than 25 accounts were compromised.

Filene looks at CU brand identity

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MADISON, Wis. (1/5/09)--Credit unions should strategically position their brands with a focus on emotional rather than functional qualities, enact brands by making simple connections for members and non-members about what it means, and build local brand communities, according to the Filene Research Institute. Filene, with the help of Larry Compeau, Clarkson University, recently released “The Credit Union Brand: What Is It Good For?” In the report, Compeau uses targeted in-depth interviews with credit unions, members, and employees across the U.S. The report indicates that except for long-tenure members who may have helped build their credit union, credit union members tend not to differentiate credit unions from banks. One point of differentiation for members is that credit unions are “a little more personal” but “not as sophisticated” as banks, the report said. Members also hold a strong brand identity of their individual credit union, describing it as reliable, friendly, helpful and informative. Employee perceptions of a credit union brand identity are weaker than member perceptions. For more information, use the link.

Loans outpace savings despite recession

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MADISON, Wis. (1/5/09)--Credit unions’ loan growth for November outpaced their savings growth, an anomaly given the recession, according to a Credit Union National Association (CUNA) economist interpreting CUNA’s Monthly Credit Union Estimates.
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Loans for the month grew 7.5% over November 2007, while savings grew 6.7% during the same period. “For a recession, that’s unusual,” Steve Rick, senior economist at CUNA, told News Now. “Typically people retrench and pay down their debt. This is an aberration, likely caused by banks’ tightened lending strategy. The aberration will continue as long as banks don’t have an appetite to lend,” Rick said. The loan growth is good news, he said, adding, “Credit unions are still making loans. It’s better to put the money in loans than in short-term instruments.” Still, loans in a recession mean more delinquencies. “Delinquencies jumped 10 basis points (b.p.) from the previous month and 39 b.p. over a year ago,” Rick said. The increase “is directly related to job losses. We’re losing jobs at an accelerating pace and it will get worse throughout the year.” New-auto loans are still in the tank with the biggest decline in more than 20 years, he said, noting low consumer confidence as a key factor. However, “used-auto loans picked up significantly from last year.” Rick said that during the credit crunch, the banking sector is shunning used-auto loans. Home-equity loans turned around in the last year, up 11% year-to-date, compared with a minus 1.6% for the same period in 2007. “This is unusual because falling home prices are wiping out homeowners’ equity, but the interest rates are so low, some homeowners are using home-equity loans to finance their spending. They’re down to the very last remnants on their balances and we’ll see more people hitting a ceiling in their borrowing limits,” Rick said. These loans are taking business from credit unions’ credit card portfolios. “Credit card growth is anemic, with growth at 3.9% year-to-date, a significant turnaround from the 9.3% for the same period last year. People are paying off their credit cards because they’re worried about jobs, debt and deleveraging,” he said.
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Rick noted that credit union borrowing is at $42 billion, a 67% increase from the $25 billion last year. “Credit unions want to keep increasing their liquidity,” he said. As for savings growth, money markets were the fastest growing savings vehicle--up 14%. “Everyone wants their money to be liquid rather than be locked up in certificates of deposit (CDs),” Rick said. With the falling prices in the stock market, depositors want safety. “In the Safety, Liquity, Yield (SLY) equation, savers want return of their capital, not return on their capital. Right now in the SLY equation, safety and liquidity are dominant,” Rick told News Now. Use the link to access the Monthly Credit Union Estimates for November.

WOCCU welcomes Ghana Seychelles as new members

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MADISON, Wis. (1/5/09)--The Ghana Co-operative Credit Union Association (CUA) and Seychelles CU have joined the World Council of Credit Unions (WOCCU). The WOCCU board approved membership for both African organizations, effective Monday, in San Diego in November. The board also approved the transfer of WOCCU's Australian membership from current member Cuscal Ltd., a wholesale provider of capital, liquidity and financial services products, to ABACUS, the trade association for Australian credit unions and mutual building societies. The change, effective Monday, coincides with the retirement of John Gilbert, Cuscal president/CEO, who will end his tenure as a WOCCU director. Gilbert's WOCCU board position will be assumed by Louise Petschler, ABACUS CEO. “We're very pleased with our continued growth and our ability to serve more members in Africa, one of the world's fastest-growing credit union markets,” said Pete Crear, WOCCU president/CEO. “Along with the changes in Australia, our new members reflect a continued strengthening of the global credit union market and its increased ability to serve even more people worldwide.” CUA, founded in 1968, had previously been affiliated with WOCCU through its membership in ACCOSCA, the African regional credit union confederation. CUA has 322 member credit unions that serve 242,000 individual members throughout Ghana and hold $107 million in total assets. CUA's acceptance as an independent WOCCU member marks a major step forward for the association's development, according to Emanuel Darko, CUA's general manager. “The dream of CUA's board of directors and management was to become a member of World Council of Credit Unions,” Darko said. “I am sure the board, management and the entire membership of Ghana's credit union movement will welcome the good news with great joy.” Seychelles CU serves inhabitants of the Seychelles islands off Africa's eastern coast and is the country's only credit union. It serves 10,620 members and has $8.7 million in assets. The institution also serves as the de facto national credit union association for WOCCU membership. Representatives from CUA, Seychelles CU and ABACUS will be introduced and given the opportunity to speak to delegates at WOCCU's next annual general meeting, to be conducted with the 2009 World Credit Union Conference, July 26-29, in Barcelona, Spain.

REAL Solutions reaches 30 states a year early

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WASHINGTON (1/5/09)—A year ahead of schedule, REAL Solutions--the signature program of the National Credit Union Foundation (NCUF)--is reaching credit unions in 30 states.
NCUF Executive Director Steve Delfin presents REAL Solutions’ Steer Clear report to the Credit Union Advisory Board of Enterprise Car Sales, a corporate supporter of NCUF. (Photo provided by the National Credit Union Foundation)
“As millions of consumers faced an uncertain economy in 2008, REAL Solutions became an even more critical strategy,” said NCUF Executive Director Steve Delfin. “The program has evolved beyond products and services. REAL Solutions is now a documented business strategy for credit unions to grow their memberships by serving the underserved.” State credit union leagues surveyed “strongly agree” that “REAL Solutions is a valuable program for leagues.” Nearly all reported that it helps credit unions serve members with “low wealth.” Low-wealth members include people with low income or modest means, and those with moderate and middle incomes who are struggling to save and build assets. Cornell University in a Filene Research Institute report concluded, “The REAL Solutions initiative illustrates the type of strategy credit unions could adopt to successfully engage the underserved financial market.” (News Now Aug. 4, 2008). The Credit Union National Association (CUNA) Membership Growth Task Force last year released recommendations to “assist credit unions in reaching out to new markets.” The task force recommended “encouraging credit unions to develop more community partnerships, encouraging more participation in REAL Solutions, and continuing advocacy efforts aimed at legal and regulatory changes to make service to new markets easier.” (News Now July 2, 2008). “The most successful services are not only affordable for consumers, but also sustainable for credit unions,” said REAL Solutions National Program Director Lois Kitsch. “Sustainable services become a permanent part of credit unions’ business plans--as opposed to ‘loss leaders’ that must be limited in volume or subsidized by other parts of the credit unions’ operations.” The American Association of Credit Union Leagues (AACUL) leveraged the REAL Solutions brand when designing the REAL Deal, a new outreach initiative advanced by AACUL with CUNA and NCUF. REAL Solutions became an integral component of the first REAL Deal outreach framework model: Among the most popular REAL Solutions services chosen by credit unions and leagues:
* Payday Loan Alternatives--In 2008, more than 200 REAL Solutions credit unions disbursed $70 million in payday loan alternatives to more than 25,000 members. REAL Solutions credit unions aim to provide the loans as alternatives for borrowers who pay more than 300% annual percentage rate (APR) at payday lenders. Borrowers who received payday loan alternatives from REAL Solutions credit unions saved about $8 million in interest and fees. Many members paid off their credit union loans without rolling them over. * Voluntary Income Tax Assistance (VITA)--Nearly 100 REAL Solutions credit unions provided volunteer income tax assistance in 2008. VITA sites help workers who earn under $42,000 apply for Earned Income Tax Credits. By offering free tax preparation, free electronic filing, and free refund deposits, REAL Solutions credit unions saved low-income tax filers about $20 million. REAL Solutions credit unions also steered many tax filers away from costly refund anticipation loans (RALs) promoted by for-profit tax preparers. This saved tax filers from RAL rates as high as 2,000% APR. * Non-Prime Auto Loans--Nearly 92% REAL Solutions credit unions offer non-prime auto loans to help borrowers with low-to-moderate incomes, low credit scores, and thin credit files afford used cars. NCUF released its first research report, Steer Clear: How Credit Unions Help Car Buyers Avoid Predatory Loans, which demonstrated how credit unions could gain a sustainable share of the non-prime market where eight million used cars are sold each year.

CU System briefs (01/02/2009)

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* MADISON, Wis. (1/5/09)--UW CU, Madison, Wis., raised more than $1.5 million toward educating students in the University of Wisconsin System and Madison Area Technical College. The campaign ran from Oct. 1 to Dec. 31 and included the campuses served by UW CU locations in Madison, Milwaukee, Green Bay, Whitewater and Stevens Point. The funds are being placed in a permanent endowment to help students who can’t afford school. The scholarships will be based on financial need ... * HONOLULU (1/5/09)--The National Credit Union Administration (NCUA) approved the merger of Aloha Pacific FCU and Inter-Island FCU, which will result in a credit union that has more than $485 million in assets (Pacific Business News Dec. 31). Inter-Island’s accounts will be converted to Aloha Pacific’s during the next couple of months. Inter-island has $10 million in assets and one branch. Aloha Pacific has $475 million in assets and five branches ... * HARRISBURG, Pa. (1/5/09)--Keystone FCU, West Chester, Pa., has opened three student branches in three West Chester High Schools (Life is a Highway Jan. 2). Students can interview for jobs as tellers at the branches, which opened Dec. 10. West Chester High School business classes also will participate in financial literacy education with seminars led by West Chester School District faculty and Keystone FCU guest speakers ...

Missouri foundation announces travel stipend policy

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JEFFERSON, Mo. (1/2/09)--The Missouri Credit Union Charitable Foundation board has approved a travel stipend policy for 2009, said the Missouri Credit Union Association. The stipend will help pay travel expenses for small credit unions that attend conferences or schools this year. The annual limit is $10,000. Funds are distributed on a first-come, first-served basis (The Missouri difference Dec. 31). To qualify for a travel stipend, recipients must:
* Submit a letter of request to the foundation prior to the conference; * Work with a credit union that has fewer than $35 million in assets; and * Submit receipts within 30 days of the final day of the conference.
Credit unions are limited to $250 for an in-state conference and $750 for an out-of-state conference. The stipend covers travel, hotels and meals.

Top 20 CU stories for 2008

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MADISON, Wis. (1/2/09)—Here are the top 20 stories most requested by News Now readers during 2008. Use the link to review the entire story online. 20. House won’t vote today on CU bill WASHINGTON (4/29/08)—The Credit Union National Association's (CUNA) lobbying team will be on Capitol Hill early Tuesday morning to focus on next steps after learning that a much anticipated Credit Union Regulatory Relief Act (CURRA, H.R. 5519) was pulled from Tuesday's House voting schedule. 19. On the CU Tube: Touting the CU difference MADISON, Wis. (1/28/08)--Each week, News Now will feature an online video that involves the credit union movement. 18. Mica on FOX TV: CU members’ funds are safe, insured WASHINGTON (9/26/08)—Credit Union National Association (CUNA) President/CEO Dan Mica Thursday again assured a national television audience that federally insured deposits in the nation's credit union system are safe and have the full backing of the U.S. government. 17. Exam procedures approved for ‘red flags,’ and more WASHINGTON (10/14/08)—Federal credit union, bank and thrift regulators have approved the examination procedures required to determine a financial institution's compliance with rules regarding identity theft "red flags" (12 CFR 222.90) and other regulations under the Fair Credit Reporting Act (FCRA). 16. NCUA updates graphics for $250K insurance ALEXANDRIA, VA. (10/9/08)--The National Credit Union Administration (NCUA) said yesterday it has updated its collection of printed and online materials that communicate increased federal share insurance to consumers. 15. 2008 GAC, Day 4 (slide show) 14. Seventeen FIs targeted in high-dollar wiretapping scam FEDERAL WAY, Wash. (1/15/07)--At least 17 financial institutions--including several credit unions in Washington State and elsewhere--have seen a sophisticated, high-dollar scam involving wiretapping to steal hundreds of thousands of dollars from home equity lines of credit (HELOCs). 13. Study: Gens X, Y more likely to switch PFIs ST. LOUIS (7/23/08)--Generation X and Y may be the future of retail banking, but they are the most likely to switch primary financial institutions (PFIs) because of fees or poor service, according to a poll by Maritz Inc. 12. 2008 GAC, Day 2 (slide show) 11. ‘Red Flags’ delay for state-chartered CUs WASHINGTON (10/23/08)--Just about a week after federal credit union, bank and thrift regulators approved the examination procedures required to determine a financial institution's compliance with rules regarding identity theft "red flags" (12 CFR 222.90), the Federal Trade Commission (FTC) said it will suspend enforcement of the rule for six months until May 1, 2009. 10. Immediate CU grassroots action urged for CURRA WASHINGTON (4/28/08)—On the cusp of an important House vote on credit union regulatory relief legislation, the Credit Union National Association (CUNA) and the leagues are urging credit unions to push back banker opposition and help clear the way for H.R. 5519, the Credit Union Regulatory Relief Act (CURRA). 9. HELOC thefts grow--$6.5+ million, 18 CUs MADISON, Wis. (1/16/08)—CUNA Mutual Group is warning credit unions that a sophisticated fraud scheme involving home equity line of credit loans (HELOCs) is spreading. So far, 18 credit unions have reported losses or fraud attempts totaling more than $6.5 million. 8. 2008 GAC, Day 3 (slide show) 7. Keesler FCU hit by cell phone text scam BILOXI, Miss. (2/27/08)—A cell phone text-message scam was targeted against Keesler FCU on Saturday, the credit union announced Tuesday. 6. VISA stock accounting tips offered for CUs WASHINGTON (1/11/08)—Credit unions currently sorting through the complex accounting issues associated with treatment of VISA Class B stock may find value in an analysis being released today by the Credit Union National Association’s (CUNA’s) Accounting Task Force. 5. Leagues, CUNA reassure members their money is safe MADISON, Wis. (7/17/08)—Credit union leagues nationwide are reassuring members their money is safe after media reports regarding the IndyMac bank failure triggered concerns among consumers about the security of their deposits. 4. 2008 GAC, Day 1 (slide show) 3. CNN, Forbes on CUs: ‘Grab them while you can’ ATLANTA (9/19/08)--“If there’s a calm in the economic storm, it may be credit unions, whose investors are sleeping through the night,” reported Susan Lisovicz of CNN Thursday during an interview with Neil Weinberg, senior editor of Forbes Magazine. 2. CUNA: Flawed Treasury plan would turn CUs into banks WASHINGTON (3/31/08)—The Credit Union National Association (CUNA) Sunday blasted a proposed U.S. Treasury financial regulatory overhaul which intitial reports said would consolidate federal credit unions, national banks and federal thrifts into a single “federally insured depository institution” charter. 1. $250K NCUSIF coverage effective immediately WASHINGTON (10/6/08)—Friday’s passage of the Emergency Economic Stabilization Act of 2008 will require the National Credit Union Administration (NCUA) to immediately increase share insurance protection to $250,000 on all types of accounts until Dec. 31, 2009.

Wrapping up the holidays with CUs help

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MADISON, Wis. (1/2/09)--Credit unions nationwide are reporting their
Click for slide show Jeff Tennant and Tracy Streebel, business development officers at Unitus Community CU, Portland, Ore., collected 4,000 items to benefit needy families. Members and employees provided new clothing, food, toys, formula and diapers, toothbrushes, blankets and sleeping bags. Unitus also donated $5 for every new membership and checking account opened at each branch (Photo provided by Unitus Community CU).
donations of time, money, food, toys and other items to help their members and those less fortunate this holiday season. Activities ranged from “adopting” families to collecting shoes and clothing for needy children (see News Now’s slideshow for photos of credit unions’ holiday events). Charitable holiday events at credit unions included:
* AmeriCU, Rome, N.Y., gave 12 members $1,000 each during a direct-deposit holiday promotion; * San Antonio (Texas) FCU, donated $25 grocery cards to 40 soldiers at Fort Sam Houston; * Firefighter Community CU, Cleveland, Ohio, provided $779 to a local family with six children whose father recently died. Employees also collected clothing for the family; * Western Corporate CU, San Dimas, Calif., helped families give their deployed soldiers holiday greetings through Operation Best Wishes. Families could create and send videos of themselves to soldiers; * Sandia Laboratory FCU, Albuquerque, N.M., collected shoes for needy children (US Fed News Dec. 15); * Lithium FCU, Bessemer City, N.C., held its annual Angel Tree project for area children. About 53 children had their Christmas wishes fulfilled, and 19 families were provided a Christmas dinner (Weekly Update Dec. 23); * Carolina Postal CU, Charlotte, N.C., collected more than 50 used coats, jackets, hats and gloves for needy children on a Native American reservation in North Dakota (Weekly Update Dec. 23); * Mercer County Community FCU, Hermitage, Pa., collected $700 for local food warehouses (Life is a Highway Dec. 29); and * Point Breeze CU, Bel Air, Md., contributed $2,500 to the Empty Stocking Fund, which benefits less fortunate children in Harford County (Focus Newsletter Dec. 29).

CEFCU to acquire Californias Valley CU

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SAN JOSE, Calif. (1/2/09)--Citizens Equity First CU (CEFCU), Peoria, Ill., was slated to acquire Valley CU, San Jose, Calif., Wednesday. CEFCU will acquire Valley’s three branches and 30,000 accounts in the deal. Valley will keep its name and is set to open today as Valley CU, a Division of CEFCU (Silicon Valley/San Jose Business Journal Dec. 30). Valley plans to retain 90% of its staff ( The $257-million-asset Valley CU was placed into conservatorship Sept. 3 by the National Credit Union Administration. CEFCU has $3.635 billion in assets.

CU System briefs (01/01/2009)

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* PORTLAND, Ore. (1/2/09)--Providence Health System FCU gave members a holiday gift by tripling their savings dividend rate for the month of December. Members with $5 or more in their Savings, New Age and Prime Time accounts. Members visiting branches were provided with a sticker that says, “Providence CU tripled my dividend rate. Ask me!” Shirley Cate, president/CEO of the Portland, Ore.-based credit union, said the dividend celebrates the credit union’s continuous success “and since 2008 was a prosperous year for us, and due to the challenges some of our members were facing, we wanted to thank them for their continued strong commitment” to the nearly $80 million asset credit union … * SPRINGFIELD, Mo. (1/2/09)--CU Community CU, based in Springfield, Mo., is celebrating its nearly 75 years in business by adding a bonus dividend totaling as much as an additional 50 basis points (0.50%) to members’ quarterly savings account earnings. The more-than-$53-million-asset credit union has 5,600 members. “Contrary to so many businesses in the current economy, we were fortunate to have a good year financially,” said Judy Hadsall, president. She added that “this is a tough time for everyone; we want to do everything we can to help.” Dividends were direct deposited to each member’s account Thursday …

Firefighters praise CU staff in preventing fire

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SANFORD, Maine (1/2/09)--Firefighters praised the staff of Ocean Communities FCU’s Sanford, Maine, branch for preventing a serious fire that could have destroyed the credit union’s building. Sanford Fire Department Capt. Brian Smith told local reports that staff at the $130.9 million asset credit union, dialed 9-1-1 just before the branch closed Tuesday night to report smoke coming out of the eaves of the building (Portland Press Herald Dec. 30). After several minutes, firefighters pinpointed the cause: an overheated halogen lamp that was installed in an area under renovation. The area surrounding the lamp was charred and smoldering and likely would have caught fire had not the staff alerted the fire department, said Smith. Officials disconnected the power source and said the lamp will need to be replaced.