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CU System brief (11/19/2012)

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  • HOUSTON (11/20/12)--News Now recently reported that fraud rings are becoming family affairs (Nov. 15). That must go for robberies, too.  Three suspects--a father, adult son and adult daughter--are in jail on charges related to a pair of robberies in Houston, including a credit union, and possibly five robberies in the Portland, Ore., area where they used to live (CNN Wire Nov. 18). They are: Ronald Scott Catt, 50; his son Hayden Scott Catt, 20; and his daughter Abigail "Abby" Catt, 18. The father and son are charged with disguising themselves in fake mustaches, painter's masks, sunglasses, hats and orange traffic vests with an "X" on the back and robbing Katy, Texas-based First Community CU on Oct. 1. Surveillance videos showed two men pointing guns inside the credit union and emptying money from the vault. Abby Catt was charged with being the getaway car driver. Authorities traced them through purchases of painter outfits, masks and the vests from two area Home Depots …

WEOKIE member hits 35-yd field goal wins 25K

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OKLAHOMA CITY, Okla. (11/20/12)--A randomly selected WEOKIE CU member kicked a 35-yard field goal Saturday and won $25,000, compliments of the Oklahoma City, Okla.-based credit union.

James Liles, 32,  an electrician from Mustang, Okla., kicked the field goal in WEOKIE's "Kick for Cash" promotion with Oklahoma State University Athletics while attending the Oklahoma State University vs. Texas Tech game at Cowboy Stadium in Stillwater.

He and his wife Ginger have three children. Liles, a huge Cowboys fan, said the kick was an "opportunity of a lifetime." WEOKIE President/CEO Brent Taylor was present on the field to congratulate Liles and said that "WEOKIE is committed to changing the financial lives of its members."

The $870 million asset credit union received 1,874 entries for the "Kick for Cash" promotion, which began in September. The promotion with OSU featured WEOKIE's 1.99% auto loan rate and gave those entering a chance to kick at the Cowboys' home game.

U S PIRG bank-fee study Go to a CU or small bank

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MADISON, Wis. (11/20/12)--Free checking is alive and well among credit unions and small banks, but not so at large bank with more than $10 billion in deposits. Only one-fourth of the big banks offer it, according to a new survey from the U.S. Public Interest Research Group (U.S.PIRG).

For its 2012 survey report, "Big Banks Bigger Fees: A National Survey of Fees and Disclosure Compliance," PIRG staff visited 250 bank branches and 116 credit union branches in 17 states and the District of Columbia to determine if compliance with the Truth in Savings Act requirement that "prospective customers" have the right to "complete" schedules.

Fewer than half the banks (48%) complied easily with the request. After two or more requests, eventually a total of 72% complied with the law. Credit unions had the highest percentage with complying with fee disclosure requests on first request --64% compared with all bank branches' 48%--and on the second, successive requests, if needed. They also gave the least partial or wrong information--6% compared with all banks' 16%.

Researchers found a variety of free or low-cost checking options, with 60% of credit unions providing totally free checking. That compares with  24% for big banks and 63% for small banks do.  In a survey of just the banks (credit union data will be the subject of a separate report), small banks had lower average checking account fees, overdraft fees and foreign or off-us ATM fees and lower minimum required balances to avoid the fees. U.S. PIRG said it was surprised to learn that one-fourth of small banks no longer charge regular checking account customers the off-us ATM fees. This, said the report, undercuts one of the major benefits often cited by large banks--access to large no-cost ATM networks.

Other findings:

  • Free checking remains widely available at small banks and credit unions. While the biggest banks are raising fees and eliminating free checking, most continue to offer free checking with direct deposit.
  • Free accounts are widely available at credit unions and small and regional banks, a finding that has been obtained by others, the survey noted.
The report did note that some credit unions could explain the basic terms better in their disclosures but that they generally had "fewer and lower fees than banks."

In detailed tips to consumers, the report listed as its first tip: "Choose to bank at a credit union instead of a bank."  In explaining, it noted credit unions' structure, services, and said that "average interest rates for loans are lower at credit unions than banks, and average rates for deposits are higher. That is a better deal both ways."  Its second tip was "Choose a local or regional bank."

Among the report's advice: "Shop around. Look for better accounts. Bank at a credit union, not at a bank. Credit unions are member-owned, lower-cost alternatives to banks and often offer the same variety of services. It is easier to qualify for membership than most consumers think. Certainly, consider banking at a small bank, not a big bank. Consider moving your money by voting with your feet."

J P Morgan files to delay NCUA suit over MBS

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KANSAS CITY (11/20/12)--J.P. Morgan Chase has asked a U.S. District Court in Kansas City to delay proceedings or a decision in the National Credit Union Administration's (NCUA) lawsuit against it over residential mortgage backed securities (RMBS) it sold to corporate credit unions until after an appeals court in the Tenth Circuit in Denver has ruled on whether NCUA filed a similar lawsuit in time.

The Kansas case against J.P. Morgan's securities and brokerage firms and other securities firms involves the same arguments used by NCUA in seven cases, including against RBS Securities and Wachovia Capital Markets. The RBS and Wachovia cases were consolidated by U.S. District Court Judge Richard D. Rogers in Denver.  On July 25, Judge Rogers denied in part the RBS defendants' motions to dismiss the consolidated action, ruling that an Extender Statute to the statute of limitations in the case was applicable and "tolled" NCUA's claims, which meant NCUA had filed its suit within the timeframe allowed by law.

On Sept. 19, Rogers certified two issues for appeal: whether the Extender Statute applies to the state of repose as outlined in the Securities Act and whether it applies to federal and state statutory claims. On Nov. 6, the Tenth Circuit Court of Appeals granted an appeal.

"The extender statute issues currently before the Tenth Circuit are identical to the extender statute issues raised here," said J.P. Morgan.  If the appeals court reverses the decision "it will, at a minimum, require the dismissal of federal claims relating to 11 of the 34 RMBS certificates and two of the five defendants in the case," said J.P. Morgan's petition for the stay.

The petition, which asks that the proceedings don't progress and a r mentioned that there is "unsubstantial uncertainty as to whether RBS was properly decided," citing a set of decisions in the U.S. District Court in the Central District of California that  concluded the extender statute did not apply to the statutes of repose.

NCUA's lawsuits allege that the banks in question made numerous misrepresentations and omissions of material fact in the RMBS documents presented to U.S. Central FCU, Western Corporate FCU, Members United Corporate FCU and Southwest Corporate FCU. The RMBS investments contributed to the corporates' collapse and NCUA sued as the corporates' liquidating agent.

CUs new building to open for community needs

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ODESSA, Texas (11/20/12)--Complex Community FCU in Odessa, Texas, opened a new building that eventually can be used for community meetings.

The new facility, opened near the main branch of the $350 million asset credit union in Odessa, will be used for training employees, accounting, collections, data processing, information technology and a phone center (Odessa American Nov. 18).

Construction of the building is complete, and employees have moved into the facility, Jason Berridge, Complex Community president/CEO, told the newspaper. 

Once the employees get settled in, the credit union intends to make a room available to the community, Berridge added. It will have visual and sound capabilities.

Maines awareness campaign begins early

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PORTLAND, Maine (11/20/12)--The Maine Credit Union League has begun airing television advertising spots for its 2013 Statewide Awareness Campaign.

Because production and editing were completed ahead of schedule, spots aired a week earlier than previously planned, the league said (Weekly Update Nov. 16).

A 30-second lending spot began airing on Nov. 8.

"Recently, we have heard from a number of credit unions in different parts of Maine that they want to do more loans, so we will support the efforts of credit unions on the local level by having the Statewide Awareness Campaign focus on lending between now and Christmas," said John Murphy, Maine league president.

The new lending spot will appear more than 900 times through Dec. 31.

The entire campaign package will be sent to all credit unions in the state in early December after he final 2013 media buy is finalized.

The lending spot has been posted on YouTube. Use the link.

The five new spots are designed "to build upon the momentum that the previous commercials have generated, and reflect the products and services, convenience and access that credit unions offer consumers," said Debra Trautman, the league's corporate marketing manager.

Robbery suspect shot dead by intended victim at ATM

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ORLANDO, Fla. (11/20/12)--A suspected robber was shot dead Friday by his intended victim at a drive-through ATM  at the Fern Park, Fla., branch of Orlando, Fla.-based Fairwinds CU.

Justin Slivinski, 24, was shot to death when he and a 19-year-old accomplice, Austin Lee Harvey, allegedly brandished knives and tried to rob a man in a truck at the ATM drive-through lane of the $1.68 billion asset credit union, the Seminole County Sheriff's Department said (Orlando Sentinel Nov. 18). 

When Slivinski and Harvey allegedly showed their knives, the intended victim pulled out a handgun and fired, hitting Slivinski twice, said the Sheriff's Department. Slivinski was taken to a local hospital where he died, the newspaper said.

Harvey fled on foot, but a tipster led authorities to him. He was arrested Saturday afternoon and charged with attempted armed robbery and murder charges, the paper said. The member who fired the shots will not be charged, said the sheriff's department.

New CU to help underserved open within 18 months

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SAN FRANCISCO (11/20/12)--People's Reserve CU in San Francisco, which registered in California one year ago, is about a year to 18 months away from coming to fruition as a credit union.

"Our mission is to help the underserved--as well as our working-class and middle-income San Franciscans--by providing them with opportunity to create a community development credit union that is state-based," Brian McKeown, business development officer and one of the founders of People's Reserve, told News Now.

Two life experiences helped create the impetus for People's Reserve, McKeown said.

"I studied microfinance at Grameen Bank in Bangladesh in 2008 to 2009," he explained. "It has projects in 140 countries worldwide, and it makes loans to poor women to start businesses. It's really amazing. I was just in awe of the way it was run and its impact on communities and women's lives and people in general."

The other factor is that McKeown was a small business owner, an entrepreneur for most of his adult life. "I was dealing with the one-percenters, and the Occupy Movement came on the scene, so I joined that movement in San Francisco, along with other people who were mad at being 'rolled' by big financial institutions. We decided we needed to start something."

Currently, the credit union is in the fundraising mode, which began last month. "We haven't submitted yet [for a credit union charter to the California Department of Financial Institutions or the National Credit Union Administration]," McKeown said. "We're just concentrating on raising money before we file.

"I've talked with other credit union CEOs and we're definitely ahead of the game," he added. "The biggest challenge is raising money because we can't promise a return. A lot of people don't understand a credit union and--how it will help them. It is hard to get general donations, and there are not a lot of foundations for this."

So far, some board management is in place for People's Reserve, surveying in the community is being conducted and the credit union is aligning with some nonprofit groups. "We have a pretty strong board," McKeown said.

The credit union is sending some staff to City College of San Francisco to learn about the fashion and clothing industry, McKeown said. People's Reserve is looking to help people in the clothing industry get started--not necessarily through owning stores, but rather by making the clothes.

"People here will spend money to buy locally produced goods through existing stores, outlets and co-ops," he added.

The credit union plans to offer microloans of $5,000 or less to working poor and homeless people, subsidize student loans at low interest rates and cultivate community projects. 

One of those projects is to finance a local food co-op that serves neighborhoods.

"We're working with other groups on how to actually do that," McKeown said. "The 'slow food' movement has been picking up over the past few years. I am not a fan of 'Franken-food.' People need an alternative to prevent obesity and diabetes. Food co-ops work well with other nonprofits. And lots of people want to see them and will help us."

People's Reserve is working with local co-ops and an organization called the Business Alliance for Local Living Economies (BALLE).

"We're looking to see what the local small businesses' needs are and what we can do to meet them," McKeown explained. "Getting to know businesses helps you stand apart from the competition.

"The key is surveying--talking to businesses and getting to know them and their needs," he concluded.

Michigans Save to Win prize structure changes

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LANSING, Mich. (11/20/12)--Save to Win, a prize-linked savings program for Michigan credit unions, has a new prize structure.

Six grand prizes of $10,000 each will be awarded at the end of the program year in February 2014, said the Michigan Credit Union League (MCUL) (Michigan Monitor Nov. 19). The league will award between 50 and 75 prizes of $50 each month. Credit unions interested in participating in the 2013 program will contribute a per-entry fee to will help fund a prize pool of $100,000.

Members participating in Save to Win in 2011 had an average savings balance of more than $2,000, compared with an average balance of $1,871 and total savings of $30 million in 2010 (News Now Feb. 23)

Also, the league introduced a new product to complement the Save to Win Share certificate. SaveUp is a member rewards program, designed to incent members to save money and pay down debt. Members earn credit for each positive behavior and use those credits to play games and win prizes.

SaveUp recently partnered with CU Solutions Group, an MCUL affiliate, to bring new a product to Michigan credit unions. After a successful pilot conducted by the Filene Research Institute, which also helped create the Save to Win product, SaveUp is being offered to credit unions nationwide.

CUNA receives final nominations for board seats

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MADISON, Wis. (11/20/12)--A final nomination has been submitted for the Credit Union National Association (CUNA) board positions.

The nomination was made in District 2, Class A for Joe Thomas, president/CEO of Fairfax (Va.) County FCU.

There will be one contested election for the CUNA board, for the District 2, Class A position.  All other nominees will be elected by acclamation and will take office on Feb. 25 in Washington, D.C.

Ballots for the 2A position will be sent out Wednesday.  Voting will continue through Jan. 4, with results to be announced Jan. 9.

In addition to Thomas, nominees are:

  • District 1, Class C: Robert Cashman, president/CEO, Metro CU, Chelsea, Mass.;
  • District 3, Class B: Brad Green, president/CEO, Listerhill CU, Sheffield, Ala.;
  • District 6, Class D, for Troy Stang, president/CEO, Northwest Credit Union Association, Federal Way, Wash.;
  • District 4, Class C: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.;
  • District 6, Class A: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • District 5, Class D: J. Scott Sullivan, president/CEO, Nebraska Credit Union League, Omaha, Neb.;
  • District 5, Class B: Incumbent Roger Heacock president/CEO, Black Hills FCU, Rapid City, S.D.; and
  • District 2, Class A: Incumbent John Graham, president/CEO, Kentucky Employees CU, Frankfort, Ky.
 Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.