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Malware steals log-on data to accounts

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NEW YORK (11/7/08)--The log-ons to more than a half million bank, credit and debit card accounts have been stolen over the past two-and-a-half years by a single cyber crime group using a Trojan horse spyware that "morphs" to avoid detection. News Now could not determine whether these included credit union members' accounts. Researchers at RSA Security Inc.'s FraudAction Research Lab discovered the stolen data while they were tracking the Sinowal Trojan horse, also known as Mebroot and Torpig. They tracked the spyware to a drop server that contained the stolen data (Computerworld Oct. 31). RSA investigators found more than 270,000 online banking account credentials, plus about 240,000 credit and debit account numbers and other personal information lifted from Microsoft Windows PCs ( Oct. 31). According to Sean Brady, product marketing manager at RSA's ID and access assurance group, the length of time the spyware has been maintained by a single group and the scale of the theft is "very unusual." The Trojan horse malware has been active since at least February 2006. Once on a system, the malware waits for the user to enter the address to an online bank, credit card company site or another financial URL. It then substitutes a fake address. The malware is triggered by more than 2,700 specific Web addresses, a much larger number than other Trojan horses, said Brady. The fake sites collect the log-on usernames and passwords to banks and other financial institutions. They trick users into disclosing information legitimate financial institutions would never collect online, such as Social Security numbers. They transmit the pilfered data to the drop server. RSA Security said it suspected the group responsible is based in Russia. The malware was distributed globally, but Russia was the one region that had no infections.

CUs continue to report phishing scams

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MADISON, Wis. (11/7/08)--More credit unions are reporting their members and nonmembers are being text messaged, phoned, and e-mailed with phishing scams seeking account information. Gesa CU, Richland, Wash., and police in four area communities reported a number of complaints from people about cell phone text messages sent Nov. 1. The messages, which went to members and nonmembers, said their credit union accounts had been closed and they needed to call a 509 area code number to provide personal information to reactivate the card. Because it was a Saturday, Gesa sent extra staff to its call center to handle the volume, Christina Brown, president/CEO, told Tri-City Herald (Nov. 2). The credit union and others have been periodically targeted by scammers since the beginning of the year. In previous scams, scammers called people randomly and claimed their credit or debit card had been canceled and needed reactivating. Four credit unions in Ohio were targeted in phone scams and e-mails the past couple of weeks, according to the Ohio Credit Union League (eLumination Newsletter Nov. 5). Two Heath, Ohio-based credit unions were targeted this week. Harvest FCU was flooded with reports about a phone scam Tuesday afternoon. Members and nonmembers received automated calls telling them their credit card account had been suspended because of third-party usage. The caller asked the recipients to input their card number (Newark Advocate Nov. 5). On Wednesday, a phone scam purporting to be from Hopewell FCU began circulating. Recipients were told their accounts had been suspended and to call a phone number to reactivate their account. On Oct. 29, a phishing e-mail purporting to be from Lagrange, Ohio-based Sun Center FCU told recipients their account was suspended temporarily due to a billing failure. They were to go to a bogus website and complete an account update to unlock the account. An automated phone scam Oct. 23, targeted Kenton, Ohio-based Hardin Community FCU. Consumers called were told to call an 866-area code number to reinstate their accounts. In Bowling Green, Ky., county residents received recorded calls on Sunday and Monday with a message that their credit card had been compromised and to "press one" to speak to the security department. The calls purported to be from Southeast Financial Credit Card Co. There is no such company, but there is a Southeast Financial CU in the neighboring state of Tennessee, said the Bowling Green Police Department (The Daily News Nov. 4). All the credit unions told consumers they would not phone or e-mail asking for such information.

Leagues analyze state election results

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MADISON, Wis. (11/7/08)--Results are coming in after Tuesday elections, and credit union leagues are reporting their successes. The Ohio Credit Union League reported that Democrats will take the majority in the state House of Representatives. Future legislation will require more bipartisan cooperation, said John Kozlowski, general counsel at the Ohio Credit Union League (eLumination Newsletter Nov. 6). Credit union-backed candidates elected include: Denise Driehaus (D), Cheryl Grossman (R), Kris Jordan (R), Peggy Lehner (R) and Margaret Anna Ruhl (R). State Treasurer Richard Cordray was elected Ohio Attorney General. The league has a good relationship with him, Kozlowski said. “The Ohio Credit Union League looks forward to working with the leadership, general assembly and administration to make Ohio better for its citizens and the ability of our credit unions to make more of their products and services available throughout Ohio,” Kozlowski said. As Pennsylvania credit unions celebrated the re-election of credit union friend U.S. Rep. Paul Kanjorski (D), the original sponsor of the Credit Union Regulatory Improvements Act (CURIA), the Pennsylvania Credit Union Association (PCUA) also addressed credit unions’ success in state-level elections. Rob McCord, Credit Union Better Choice enthusiast, defeated Tom Ellis for state treasurer. Long-time credit union supporters state Reps. Dan Surra (D-75) and Vince Biancucci (D-15) were defeated by their Republican challengers (Life is a Highway Nov. 6). PCUA also thanked credit union advocates for volunteering their time to support candidates. Texas credit unions had a 96% success rate in the state elections. Results of the Texas races are preliminary--as of press time, 40 precincts were still due to report. John Culberson (R-Houston), a CURIA co-sponsor, and Michael McCaul (R-Austin) were “candidates to watch,” according to the Texas Credit Union League. Both retained their seats. Unofficial results in Maine indicate 90% of the 88 candidates endorsed by the Maine Credit Union League were elected. In the Senate, 27 of the league's 28 endorsed candidates won. In the House, 51 of 60 endorsed candidates were elected. Two members of the legislature are also credit union board members--Rep. Herbert Clark, Katahdin FCU, Millinocket;,and Michael Lajoie, Lewiston Municipal FCU, Lewiston. "We have great friends from both parties in the legislature so we anticipate strong support for our issues and positions in the upcoming session," said John Murphy, Maine league president.

Dort FCU to give away two homes for holiday season

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GENESEE COUNTY, Mich. (11/7/08)--Dort FCU plans to give away two homes to needy families this holiday season. Every year, the $366.3 million asset, Flint, Mich.-based credit union’s board of directors tries to find ways to give back to the community, and this year it decided to help two needy families in a big way (The Flint Journal Nov. 5). The credit union is excited to help out in tough economic times by providing a ray of hope, Dort spokeswoman Jenny Ludwigsen, told the newspaper. The Flint-area homes--a 1,800 square-foot ranch and a 1,000 square-foot, three-bedroom house--are credit-union owned properties. The credit union is looking for families that have a need for housing, are capable of maintaining a home, and are enthusiastic about being a homeowner, Ludwigsen told the paper. Families must apply for the homes by Nov. 26. After local charitable organizations narrow the list of applicants to 10 finalists, the winners will be chosen in a drawing Dec. 22. The properties will be mortgage-free, but winners must complete home-ownership and financial classes through a local housing partnership.

Iowa CUs to sponsor presidents fin-lit forum

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DES MOINES, Iowa (11/7/08)--Iowa credit unions will participate in and sponsor “Financial Literacy in the Heartland,” a special listening forum hosted by members of the President's Advisory Council on Financial Literacy. More than 70 financial literacy leaders throughout the state have been invited to attend the event Tuesday in Des Moines. The Iowa listening session will be convened by Tahira Hira, Ph.D., Iowa State University professor of personal finance and consumer economics, who serves on President Bush's Advisory Council and the Iowa Credit Union Review Board. The forum is sponsored by the Iowa Credit Union League (ICUL), Greater Iowa CU, Ames, and the Iowa State University College of Business and College of Human Sciences. ICUL will provide a testimonial about how credit unions are improving their members’ financial literacy and what can be done in the future, both at a state and national level, to help consumers become more financially self-sufficient. “Iowa credit unions are advocates for increasing financial literacy, not only among members but our broader communities,” said Patrick S. Jury, president/CEO of ICUL. “Financial literacy is a core component of Iowa credit unions, and we continue to incorporate it into everything that we do.” Last year, ICUL helped pass legislation that requires Iowa K-12 schools to adopt “core curriculum standards” for financial education. Specifically, the legislation requires that financial literacy courses are offered that include money management skills, spending plans, decision-making skills to analyze debt incurrence and management, and saving and investing as applied to long-term financial security. Also, the Iowa Credit Union Foundation implemented the state’s first credit union Individual Development Account program, which teaches adults the value of saving and the impact an asset purchase can have on their financial position. The 16-member President's Advisory Council on Financial Literacy (see link) was created in January by President Bush to assist Americans with financial matters. The president and Treasury Secretary Henry Paulson have asked the council to work with public and private sectors to help increase financial education efforts for all Americans. Members of the council are hosting listening sessions with financial literacy leaders nationwide. “The information gleaned from these meetings may be applied toward the advisory council’s recommendations to the U.S. Treasury Department and ultimately to the president,” Hira said. Dan Iannicola Jr., deputy assistant secretary for financial education, U.S. Treasury, will moderate the session.

Voters in Ohio keep payday loan cap at 28

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CLEVELAND, Ohio (11/7/08)--Ohio residents voted Tuesday to uphold Issue 5, a referendum to uphold a law that limits payday loan interest rates in the state at 28%. The law had been challenged by the payday lending industry. About 64% of voters were in favor of keeping the cap. Issue 5 limits payday loans to $500, and lenders are required to give borrowers 30 days to repay the loans. Borrowers are allowed only four payday loans per year. A state database also will be created so that lenders will not unknowingly grant more payday loans beyond a consumer’s limit (News Now Nov. 5). Issue 5 was backed by the Center for Responsible Lending of Durham, N.C. The Ohio Credit Union League didn’t advocate a position on the bill because it doesn’t directly affect credit unions. However, some credit unions were supportive of the measure. If Issue 5 hadn’t passed, payday lenders would have been allowed to charge borrowers 391% interest rates.

Ohio league moves next week expects outages

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DUBLIN, Ohio (11/7/08)--The Ohio Credit Union League's move next week to new headquarters nearer the State Capitol will result in some temporary outages of services from Monday through Wednesday, the league said Wednesday. No serious interruptions are expected, the league said (eLumination Newsletter Nov. 5). The league's phone system will be unavailable from 5 p.m. Monday to 8 a.m. Wednesday, when the league reopens after the Veterans Day holiday. The Compliance Hotline will be unavailable from noon Monday to noon Wednesday. However, InfoSight, the league's online compliance library, will be available without interruption (use the link). The league's website and e-mail also will be down from noon Monday to Wednesday. Although the league is changing physical locations, its phone numbers, e-mail addresses and website will remain the same.

WOCCU asks G-20 to recognize CUs stability

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MADISON, Wis. (11/7/08)--Credit unions and financial cooperatives worldwide have been islands of relative safety in a struggling global economy, and the World Council of Credit Unions (WOCCU) wants attendees at the Group of 20 (G-20) Global Financial Summit to acknowledge that fact and act appropriately to stem the current crisis. President Bush will host a meeting of the G-20, an organization of major industrial and emerging-market countries, in Washington, D.C., Nov. 15 to further financial reform negotiations among world leaders. WOCCU made its voice heard last week by submitting a letter to the finance ministers of participating countries, asking that the strength and safety credit unions and financial cooperatives provide their members be acknowledged. It also asked that cooperatives not be included in inappropriate legislation or regulations that may restrict the practices that give member-owned institutions their strength and capability to serve. In his letter, Pete Crear, WOCCU president/CEO, requested that three distinct steps be taken during the summit:
* Any future financial rescue packages implemented at global or national levels must be unbiased against cooperative financial institutions relative to the commercial banking sector; * Cooperative financial institutions must be recognized in any pronouncements emanating from the summit as secure, locally owned financial institutions that have presented safe and sound financial alternatives during the current crisis; and * Future regulations or legislation that may result from this crisis clearly recognize that cooperative financial institutions have not been the source of these problems, have been significantly less affected by the economic fallout, and should not be punished by inclusion in a series of new rules designed to correct a problem they have not caused.
“We believe strongly that cooperative financial institutions must be consulted prior to any regulatory actions that may affect them and we urge you to make this step a permanent part of your protocols,” Crear wrote. The letter was submitted to G-20 finance ministers Oct. 31. Use the link to access the letter. Established in the wake of the emerging markets financial crisis of the late 1990s, the G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. The G-20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S. and the European Union.

Kansas CUs in good position to help members--Schenk

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WICHITA, Kan. (11/7/08)--Kansas credit unions are in a good position to help members with credit and other needs, a Credit Union National Association (CUNA) economist told a group of credit union executives in that state. Mike Schenk, CUNA chief economist, addressed 40 credit union executives Wednesday at the Kansas Credit Union Association’s Economic Outlook in Wichita (The Wichita Eagle Nov. 6). Schenk told the group he expects housing inventories to remain high nationwide, housing values to continue to fall, and the U.S. economic slump to continue into 2009. However, through the first half of 2008, Kansas credit unions experienced faster savings growth and loan growth than credit unions nationwide. Kansas credit unions also have had higher earnings and net worth, although those measures are starting to slightly decline, Schenk told the group. “You are a lot different than the rest of the credit union world,” Schenk told the group. The reason is that Kansas was not affected by the burst of the housing bubble, and the state did not experience much negative impact from the subprime lending meltdown, he added. “While the world is contracting, we are growing,” Schenk told the credit union leaders, and that is why credit unions are well-positioned to help members obtain credit with other needs. This, in turn, will lead to a strengthening for the credit unions’ relationships with members, he said.

CU System briefs (11/06/2008)

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* HARRISBURG, Pa. (11/7/08)--The role of credit unions in the current wild economy was the topic for the latest segment of Pennsylvania Newsmakers (Life is a Highway Nov. 6). From left are host Dr. Terry Madonna; Jay Murray, president/CEO of Mid-Atlantic Corporate FCU; and Mike Wishnow, senior vice president of the Pennsylvania Credit Union Association (PCUA). They discussed current economic conditions and explained how credit unions provide a safe harbor for consumers with services that will help members during difficult times. The program, part of PCUA's monthly financial education sponsorship, will air Nov. 16, 17, 18, 19, 22 on television stations across the state (Photo provided by the Pennsylvania Credit Union Association) … * HELENA, Mont. (11/7/08)--The Montana Credit Union Network has hired Clyde Dailey as director of government relations. Based in Helena, Dailey will work with credit unions in Helena and across the state to raise awareness of credit unions and bolster their influence with state decision makers. Most recently, Dailey has held several positions with AARP, including associate state director for advocacy and communications in Montana, stte director for Idaho AARP, and associated regional director for the organization's 11-state Midwest region. Earlier, he worked with the Montana Insurance Department in consumer outreach and lobbying … * URBANA, Ohio (11/7/08)--Wright-Patt CU, based in Fairborn, Ohio, completed its merger with Grimes CU in Urbana, Ohio, on Nov. 1, the $1.3 billion asset credit union announced. Grimes' board approached Wright-Patt after determining it needed to expand services and product offerings to meet members' growing needs. Wright-Patt will maintain an office in Urbana, initially at the Grimes CU location, and then move to a more convenient, member-focused office with an ATM on State Route 36 in front of Wal-Mart … * GRAND JUNCTION and GREENWOOD VILLAGE, Colo. (11/7/08)--Greater American Community CU, based in Grand Junction, Colo., and Greenwood Village-based Bellco CU are merging (Financial Deals Tracker Nov. 5). Bellco, the largest credit union in the Denver area, has nearly $2 billion in assets, while Greater American has $22.1 million assets. The merger will increase Bellco's branch network to 17 (Denver Business Journal Nov. 3) … * BURLINGTON, Vt. (11/7/08)--A man with five prior bank robbery convictions was sentenced Oct. 29 in the U.S. District Court in Rutland to 13 years in prison for the Jan. 22, 2007, robbery of Opportunities CU in Burlington, Vt. In addition to the term, Peter K. Holland, 55, will serve three years under supervised release after he is released from prison. He also was ordered to repay $6,220 taken in the robbery. The previous robberies occurred in Vermont and Arizona in the 1980s (States News Service Oct. 29) …