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CU System Briefs (10/31/2013)

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  • PITTSBURGH, Pa. (10/31/13)--Three Pittsburgh-area residents accused of a counterfeit checking scheme involving Omega FCU and two other financial institutions surrendered on Tuesday (Pittsburgh Tribune-Review Oct. 30). Andrew Fisher, 36, Crystal Nelson, 30, and Anthony Howell, 26, have been charged with theft by deception, receiving stolen property, forgery, access device fraud, and criminal conspiracy by the Allegheny County District Attorney's office. At least 11 others, including two men currently incarcerated in the county jail, are expected to be arraigned by the District Attorney for their alleged role in the scheme. A criminal complaint described the alleged conspiracy as involving forged payroll checks with fabricated employee names and claiming several thousand dollars allegedly cashed by the accused conspirators at a branch of the grocery store Giant Eagle. The store was not compensated because financial institutions did not find the accounts listed on the checks. Of the nine checks involved, five of them appeared to have been issued by Christian Financial Management, three by Omega FCU, and one by Advantage Home Health Care. Investigators built their case against the accused after obtaining copies of the checks, and video surveillance images that recorded the April transactions. A detective with the district attorney's office said that the accused either cashed the forged checks immediately or withdrew money after making deposits, before they could be returned to the financial institutions. Omega FCU is located in Pittsburgh and has $86 million in assets ...
  • HARAHAN, La. (10/31/13)--Credit unions gave away more than $18,000 during the Louisiana Credit Union League's inaugural Lunch Local cash mob (eWeekly Oct. 30). The event, organized to encourage credit unions to support local business while educating the public about credit unions' community-oriented business model, involved more than 28 institutions from across the state. League member credit unions of different sizes with the highest percentage of employee participation were Barton Plant Employees FCU in Luling, for institutions with less than $25 million in assets; Access of Louisiana FCU in Lake Charles, for credit unions with between $25 million and $100 million in assets; and Louisiana FCU in LaPlace, for credit unions with over $100 million in assets ...
  • NEW BRIGHTON, Minn. (10/31/13)--Credit union service organizations in Minnesota, Texas and Tennessee are challenging each other to a friendly bit of competitive charity this holiday season. Employees of CU Alliance and CU Community will match up against CU Companies, in a bid to see whose member credit unions can, in turn, encourage members to donate the most during a month-long food drive to benefit local food banks. The losing team is expected to buy the winning team a pizza lunch. This is the ninth year that the competition has taken place, but it's the first time CU Community will be joining, in a bid to even the number of CUSO employees on both sides. The competition, which started on Oct. 15, will end Nov. 22. Last year, the contest collected 7,943 food items. CU Alliance, located in Houston, Texas, was established in 1998, and services 150 credit unions in eight states. CU Community, located in Oak Ridge, Tenn., serves over 20 credit unions. CU Companies, founded in 1987, is located in New Brighton, Minn. It's jointly owned by 66 credit unions, and serves another 60 ...

NCUA Settles MBS Claims Against ResCap

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NEW YORK (10/31/13)--A settlement filed in a bankruptcy court in New York means that, if approved by the court, the National Credit Union Administration would be recognized as having $78 million in allowed claims against debtors affiliated with Residential Capital LLC related to residential mortgage-backed securities (RMBS) sold to corporate credit unions. However, the actual figure to be awarded is likely to be smaller, said NCUA.

"The proposed proposed settlement agreement recognizes that NCUA has $78 million in allowed  claims against the bankruptcy estate, but the figure we are awarded will be much smaller," said John Fairbanks, public affairs specialist with NCUA's Office of Public and Congressional Affairs. "There's a liquidation process to be completed that will determine the value of assets in the estate, the number and status of creditors, and the amount of their claims against those assets. Once that is completed, a determination of the value of the claims will be made and this will determine what NCUA will receive," he told News Now.

Settlement documents submitted Monday to the U.S. Bankruptcy Court for the Southern District of New York stipulate that NCUA had claims totaling $590 million against Ally Financial Inc. (AFI) (over $390 million)  and Ally Securities LLC (about $200 million), two entities involved in a Chapter 11 reorganization of ResCap.

Residential Accredit Loans Inc. (RALI) and Residential Funding Mortgage Securities II (RFMS II) acted as depositors for the securities, which were sold to Western Corporate FCU, U.S. Central FCU and Southwest Corporate FCU. WesCorp and U.S. Central were put into conservatorship in 2009 and Southwest in 2010. NCUA, as the liquidating agent for the corporates, sued, alleging that the securities' offering documents contained untrue statements and omissions of material facts.

NCUA filed 11 proofs of claim--10 against RALI and one against RFMS II--claiming about $293 million in aggregate claims.

NCUA's "claims shall be reduced and allowed in the aggregate amount of $78 million in full and final satisfaction of any and all claims that have been or could have been asserted by the NCUA (Board) or the credit unions in these cases, including any and all claims" against AFI or Ally Securities, said the settlement agreement filed Monday.

A separate filing Monday by the debtors noted that "litigation of these claims could take several years and incur substantial administrative costs" with "no guarantee of the ultimate outcome at the conclusion of such litigation." The settlement, the document said, "constitutes a far more efficient, reasonable, and cost-effective resolution of these claims than proceeding with litigation."

A hearing on confirmation of the debtors and creditors' committee's Joint Chapter 11 Plan is scheduled for Nov. 19, said the court documents.

New York Young Pros Take CU Message To Hill

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ALBANY, N.Y. (10/31/13)--Members of the Credit Union Association of New York's Young Professional Commission joined CUANY staff last week to meet with Washington lawmakers to discuss key credit union issues, including credit union tax status, member business lending, supplemental capital and government-sponsored entities reform.
 
Click to view larger image Members of the Credit Union Association of New York's Young Professional Commission traveled to Washington to join CUANY staff in meetings with lawmakers. Hike participants, front row, from left: Allison Barna, CUANY; Cara Carlevatti, Great Erie FCU, Orchard Park; Angela Hitchcock, Sidney (N.Y.) FCU; Aimee Johnson, Oswego (N.Y.) County FCU; RJ Tamburri and Mike Lanotte, CUANY. Back row, from left: David Roy, Buffalo (N.Y.) Metropolitan FCU;  Christin Vincent, The Summit FCU, Rochester; Meghan McGee-Pelky, UFirst FCU, Plattsburgh; Cristina Morrissiey, AmeriCU, Rome; and Kate Czarnecki, FocalPoint FCU, Syracuse. Not pictured: Stephanie Carl, Corning (N.Y.) FCU. (Photo provided by Credit Union Association of New York)
After arriving at Credit Union House early Wednesday afternoon, the advocates were briefed by staff from CUANY and Credit Union National Association on pressing legislative topics. Following the briefing, the group hand-delivered the Don't Tax My Credit Union postcards and met with top aides from both Schumer and Gillibrand's offices.
 
"These visits created new personal relationships between our young credit union professionals and our federal legislators," said Mike Lanotte, CUANY senior vice president/general counsel. "It also gave us the opportunity to discuss our legislative priorities and thank our co-sponsors while strengthening our case with those yet to take that step."
 
The advocates included:
  • Stephanie Carl, Corning (N.Y.) FCU;
  • Cara Carlevatti, Great Erie FCU, Orchard Park;
  • Kate Czarnecki, FocalPoint FCU, Syracuse;
  • Angela Hitchcock, Sidney (N.Y.) FCU;
  • Aimee Johnson, Oswego (N.Y.) County FCU;
  • Meghan McGee-Pelkey, UFirst FCU, Plattsburgh;
  • Cristina Morrissiey, AmeriCU CU, Rome;
  • David Roy, Buffalo (N.Y.) Metropolitan FCU; and
  • Christin Vincent, The Summit FCU, Rochester.
In addition to visiting the offices of several House representatives, the group hand-delivered more than 13,000 Don't Tax My Credit Union postcards to the offices of Sens. Charles Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.).
 
The advocacy efforts continued Thursday morning, when the group met with nine House members and staffers.
Lawmakers on both sides of the political aisle were receptive to the advocates' message, and many expressed support for the credit union tax exemption, said CUANY. New York is one of the few states with strong bipartisan support on the issue.

"Nobody here wants to tax credit unions--it doesn't make sense," said Rep. Christopher Collins (R-N.Y.) during his time with the group.

The advocates met representatives or staff from one-third of the New York congressional delegation, including: Collins, Tom Reed (R), Bill Owens (D), Dan Maffei (D), Richard Hanna (R), Louise Slaughter (D), Peter King (R), Brian Higgins (D) and Chris Gibson (R).

Missouri Award Winners Named

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BRANSON, Mo. (10/31/13)--The Missouri Credit Union Association honored state industry professionals at its 2013 Convention and Exposition in Branson, Mo. last week (The Missouri Difference Oct. 30).

The state association gave out three state-level awards--the Credit Union National Association's Dora Maxwell Social Responsibility Award, the Louise Herring Award for Philosophy in Action, and the Desjardin Financial Education Award in both the youth and adult categories--to credit unions of varying sizes.

Winners of the Dora Maxwell Social Responsibility Award were:
  • $20 million to $50 million in assets, Joplin Metro CU, Joplin;
  • $50 million-$100 million, Central Missouri Community CU, Warrensburg;
  • $100 million-$200 million, United CU, Mexico;
  • $200 million-$500 million, Mazuma CU, Kansas City, Mo.;
  • $500 million-$1 billion, Vantage CU, St. Louis.; and
  • More than $1 billion, Anheuser-Busch Employees' CU, St. Louis.
Winners of the Louise Herring Award for Philosophy in Action were:
  • $50 million to $250 million in assets, Electro Savings CU, St. Louis;
  • $250 million to $1 billion in assets, Mazuma CU; and
  • More than $1 billion, the Anheuser-Busch Employees' CU.
Winners of the Desjardins Youth Financial Education Award were:
  •  $50 million- $150 million in assets, Raytown-Lee's Summit Community CU, Raytown;
  • $150 million-$500 million, Neighbors CU, St. Louis; and
  • More than $50 million, Community America CU, Kansas City;
Winners of the Desjardins Adult Financial Education Award were:
  • $50 million to $150 million in assets, Electro Savings CU;
  • $150 million-$500 million, St. Louis Community CU, St. Louis, Mo.; and
  • More than $500 million, CommunityAmerica CU.
Missouri winners are eligible to compete on the national level, with those honorees set to be announced by CUNA this fall.

National winners will be invited to attend the 2014 CUNA Governmental Affairs Conference in Washington, D.C.

First Bitcoin ATM Active, Experts Warn About Risks

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VANCOUVER, B.C. (10/31/13)--The world's first Bitcoin ATM went live Tuesday in Vancouver, Canada, exchanging cash for anonymous virtual currency through a palm-scan security system. Meanwhile, experts warn that the virtual currency has risks.
 
The automated teller is set up in a Vancouver coffee shop. It is the first of five ATMs bought by the Canadian firm Bitcoiniacs from Nevada-based producer Robocoin (The Canadian Press Oct. 29).
 
The machines exchange Bitcoins for Canadian dollars through Canada's VirtEx exchange. The transactions themselves will be anonymous.
 
New users create a virtual wallet by scanning their palm. Users who already have a Bitcoin wallet select how much money they want to spend, insert the cash, and scan a bar code to have Bitcoins transferred.
 
Transfers are made through a peer-to-peer network and are posted on a public ledger available to those who use the currency.
 
In August, Tradehill, an exchange for Bitcoin, moved its customer accounts to $3.8 million Internet Archive FCU, an institution in New Brunswick, N.J., recently opened by Internet Archive (Bloomberg Aug. 28).
 
Issues with the security of Bitcoin have surfaced, experts said. The anonymous nature of Bitcoin and hacker knowledge make it difficult for law enforcement agencies to track fraud involving the cyber currency (CNBC Sept. 16). Bitcoins are not subject to anti-money-laundering laws.
 
Also, Bitcoins are not insured as are deposits in most financial institution accounts, nor are they covered for fraud protection, as most credit and debit cards are.
 
Wallets kept on a centralized cloud-based drive are more vulnerable than those on a local drive, according to Alex Ferrara, a partner at Bessemer Venture Partners.
 
Experts have been unable to determine how much hackers have penetrated the Bitcoin network, but anecdotal evidence suggests it will grow with the cybercurrency's growing acceptance, CNBC said.

Halloween Promos At CUs Not So Ghoulish

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MADISON, Wis. (10/31/13)--Zombie Debit Cards and Car Loans. Screaming Deals. Pumpkin Patch Stories. Pumpkin Carving Contests. Facebook Halloween Costume Contests. Credit unions are having fun getting into the Halloween spirit.
 
The Financial Brand highlighted "10 Spooktacular Halloween Promos From Credit Unions" on its website Tuesday, assembling a gallery of "10 frightfully fun, freaky and fangtastic Halloween promotions."
 
In the spotlight are:
 
1.  Element FCU, Charleston, W. Va.  Zombie debit cards are a "no brainer," exclaims the credit union's promotion. The zombie's name on the card is "Ben Dead."
 
2. Pegasus Community CU, Dallas, Texas. Members can win $150 by posting pumpkin patch stories, photos of pets in a Halloween costume, or photos of carved pumpkins on its Facebook page.
 
3.  Logix CU, Burbank, Calif. It asked Facebook fans to carve a pumpkin in the likeness of its robot mascot.
 
4. Denver (Colo.) Community CU. Its Zombie Apocalypse Preparedness video on YouTube provides safety tips. (Use the link.)
 
5. Texoma Community CU, Wichita Falls, Texas. As sponsor of charity event 2013 Zombie 5K Crawl, it offered a Zombie Car Loan with rates that would make a zombie smile.
 
6.  STCU, Springfield, Mass.  It redid its Facebook page for Halloween but went further than most, with cover photo, profile photo and dashboard of tabs for apps and widgets featuring spooky artwork.
 
7. Streator (Ill.)  Onized CU. It's Facebook Halloween costume contest offers $150 in prizes.
 
8. Webster First FCU, Worcester, Mass. Its "Boo-tiful Photo Contest" awards the spookiest, kookiest and most boo-tiful photos on its Facebook page with iPad Minis.
 
9.  Rivermark Community CU, Beaverton, Ore. It offers "Screaming Deals with "No Tricks. $100 Treat."
 
10. Sunmark FCU, Latham, N.Y.  Its auto rates (1.85% annual percentage rate) are dubbed "Spooktacular."
 
For the full visual effects of each credit union highlighted, use the link to TheFinancialBrand.com.  Also, see a related News Now story, "GoBankingRates.com Highlights CU Community Halloween Events," by using the link.

Travis Video On Scary Pumpkin Carving Has 'Don't Tax' Theme

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VACAVILLE, Calif. (10/31/13)--A tongue-in-cheek video by Vacaville, Calif.-based Travis CU hits Halloween with something truly scary: the spectre of credit union taxation. But Travis knows what to do: Carve out a "Don't Tax My Credit Union" pumpkin and spread the word.
 
The $2.1 billion asset credit union's Youtube video, "Don't Tax My Pumpkin!" begins with these words, accompanied by creepy organ music and evil laughter: "Take away our tax exemption? That's Scary!"
 
Then the whimsical, slightly demented music begins as a man takes out a "Don't Tax My Credit Union" printed flyer and attempts to show, step-by-step, how to transfer it onto a pumpkin. Armed with a tiny screwdriver and electric carving tools and using the flyer as a pattern, he pokes holes around the words and into the pumpkin, peels away the flyer then sets to carving out the excess outer rind around the words and polishing it with a brush.

The result is a pumpkin-colored "Don't Tax My Credit Union" logo.

The video caught the eye of CreditUnionsOnline.com, which said Travis CU "may have started a pop culture movement."  The article noted why credit union taxation is so scary and said, "Unfortunately, the threat is not a creepy tale told around a campfire to drum up more scares on Halloween," said the article. "This threat is real."

Pennsylvania CU Leaders In Haiti

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HARRISBURG, Pa. (10/31/13)--A Pennsylvania Credit Union Association diagnostic team arrived in Haiti Monday to begin a study aimed at federating credit unions by providing staff training and equipment.
 
A Pennsylvania Credit Union Association diagnostic team is in Haiti to conduct a study that will eventually help provide Haitian credit unions with improved staffing and equipment. Seated, from left: Joe Wambach, team leader and executive director, Pennsylvania Credit Union Foundation; Lois Kitsch, project manager of the National Credit Union Foundation's REAL Solutions program . Standing, from left: Bob Connor Jr., former president of CU Ink, Philadelphia; Dr. Maryse Wambach, translator and cultural specialist; Chris Woods, PCUA and foundation board member and CEO, Keystone FCU, West Chester; and Linda Brown, executive vice president, Service 1st FCU, Danville. (Photo provided by Pennsylvania Credit Union Association)
During the first several days of the 12-day visit, the team will review strategy and goals, study and meet with three organizations active in the growth of credit unions. They are: Fonkoze, a micro lending organization; Le Levier, a Canadian-funded organization responsible for developing a uniform system to federate credit unions; and The High Five project, a World Council of Credit Unions/U.S. Agency for International Development project that is introducing micro financing and a mobile banking remittance program in Haiti (Life is a Highway Oct. 28 and 30).
 
On Tuesday, the team met with Fonkoze Haiti and the Haitian Federation of Credit Unions. The team provided technicians with baseline information on micro lending (Fonkoze) and credit unions based in Haiti (federation); and gathered information on credit unions, which the team will study to determine their ability to respond to the needs of Haitians.
 
While Fonkoze operations were impressive, the team determined the program to be self-contained, presenting difficulties in forming a partnership, said Joe Wambach, team leader and executive director of the Pennsylvania Credit Union Foundation. Fonkoze could not provide information or credit union contacts because it operates and lends through its own banks.
 
The Haitian Federation provided the team with its criteria for joining its network, which the technicians found impressive, said PCUA. It also provided the team with six credit unions to study for possible expansion of the network. The Haitian team offered details on its training program and equipment needs. The PCUA team is scheduled for a follow up meeting with the federation on Nov. 8 to outline its results.
 
The team will also visit a women's health project at Wharf Jeremie, one of the poorest sections of Port-a-Prince. During the remaining nine days of the visit, the team hopes to conduct diagnostic studies in at least 15 credit unions.
 
In addition to Wambach, members of the team include:
  • Chris Woods, PCUA and foundation board member and CEO, Keystone FCU, West Chester;
  • Lois Kitsch, project manager of the National Credit Union Foundation's REAL Solutions program;
  • Linda Brown, executive vice president, Service 1st FCU, Danville;
  • Bob Connor Jr., former president of CU Ink, Philadelphia; and
  • Dr. Maryse Wambach, translator and cultural specialist.