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Former Conn. auto dealer gets 45 months for defrauding CUs

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NEW HAVEN, Conn. (12/11/07)--A man who operated a Bristol, Conn., auto dealership has been sentenced to 45 months in prison for defrauding credit unions of more than $426,766 and violating probation. Sean A. Roget, aka Ricardo Saavedra, 37, was sentenced Nov. 13 in a U.S. District Court in New Haven. He is the former operator of Riverside Auto Sales LLC, where he obtained eight car loans by submitting false applications to local credit unions, said court documents (US Fed News Nov. 13). Roget's applications claimed the dealer sold luxury cars. However, Riverside Auto did not own or sell the cars; the purchasers were fictitious; and documents such as pay stub and insurance documents were false. The scam went on from September 2005 through mid-2006. He pleaded guilty to one count of bank fraud in July. Roget was a citizen of Trinidad and Tobago who resided in Springfield, Mass., and who was in the country illegally in violation of a previous drug trafficking felony. He will be deported after serving his sentence.

Missouri lawmakers pre-file bills of interest to CUs

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ST. LOUIS, Mo. (12/11/07)--Missouri lawmakers have pre-filed several bills of interest to credit unions, according to the Missouri Credit Union Association (Legislative Updates Dec. 7). Bills include:
* Legislation that would move the division of finance, credit unions and professional registration, and the State Banking Board, to the Department of Insurance, Financial Institutions and Professional Registration, proposed by Sen. Delbert Scott (R-28); * A bill that would allow consumers to put security freezes on their credit reports, pre-filed by Sen. Michael Gibbons (R-15); * A bill that would criminalize residential mortgage fraud, submitted by Sen. Charlie Shields (R-34); * Legislation to limit the interest and other fees payday lenders charge and prohibit renewals of the loans, proposed by Rep. James Whorton (D-3); * Legislation that would amend laws regarding unsecured loans of $500 or less, submitted by Rep. David Day (R-148).
Lawmakers could pre-file bills starting Dec. 3. The Missouri General Assembly will meet Jan. 9.

Katrina took toll on low-income CUs

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MADISON, Wis. (12/11/07)--Hurricane Katrina took a toll on New Orleans-area credit unions, especially those serving low-income members, but social networking helped to increase credit union membership by 2.3% after the hurricane, according to a Filene Research Institute study. From May 2005 to May 2006, credit unions in the affected areas of New Orleans and Mississippi grew their memberships to 358,016 from 350,096. The increase is largely due to the strength of Mississippi credit unions, and the fact that some areas of Mississippi are on higher ground, making rebuilding easier. The number of credit unions impacted by the storm totaled 63--41 in New Orleans and 22 in Mississippi. Fifteen credit unions in New Orleans and one credit union in Mississippi ceased operations because they either moved out of the area or merged with another financial institution. Credit unions serving low-income members were the financial institutions hit hardest by Hurricane Katrina. From May 2005 to May 2006, return on assets for low-income credit unions in New Orleans decreased by 164.1%, compared with a decrease of 107.6% on assets for other New Orleans credit unions, the study said. “While some of the key lessons learned from this catastrophe involve contingency planning and emergency operations, one of the most practical lessons that credit unions can take away from this study has to do with understanding the potential strength of their cooperative structure in the face of wild-card external events like hurricanes and terrorist attacks,” said George Hofheimer, Filene chief research officer. “Credit unions have the opportunity to learn from past experiences and apply these lessons going forward.” The study, “Cooperative Comebacks: Resilience in the Face of the Hurricane Katrina Catastrophe,” is authored by Mark Klinedinst, an economics professor at the University of Southern Mississippi. Copies of the study are available free to Institute members; $125 to non-members. For more information, use the link.

Wegner Awards Dinner reservations open online

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WASHINGTON (12/11/07)--Credit union leaders and supporters can reserve seats online for the 20th Annual Herb Wegner Memorial Awards Dinner presented by the National Credit Union Foundation (NCUF) on March 3. The event will be held during the Credit Union National Association’s 2008 Governmental Affairs Conference (GAC). Credit unions can make reservations through a new secure page on the NCUF website. Registrants can choose to download a printable form, complete it off-line, and fax or mail the completed form to NCUF. The 2008 Wegner Awards Dinner will take place at a new location: the Grand Hyatt Hotel, two blocks from the Washington Convention Center where the GAC will be held for the first time. Individual tickets for the three-course dinner are $200 each; tables of 10 are $1,900. A portion of each ticket is tax-deductible. The awards ceremony will celebrate three of the highest national honors in the credit union movement:
* Lifetime Achievement Award: Dr. Bob Hoel, retired executive director, Filene Research Institute, Madison, Wis., for decades of research that has benefited credit unions and consumers; * Individual Achievement Award: Harriet May, president/CEO, GECU, El Paso, Texas, for changing lives of hundreds of families in America’s poorest city by providing financial education, homeownership counseling and foreclosure prevention; * Outstanding Organization Award: State Employees Credit Union Foundation, Raleigh, N.C., for leveraging credit union members’ contributions to support education, health care, housing and human services throughout the state.

Study More than two-thirds noncash payments are electronic

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MINNEAPOLIS (12/11/07)--Credit unions with credit and debit cards should take note: More than two-thirds of all U.S. noncash payments in 2006 were made electronically, according to the Federal Reserve’s 2007 study of noncash payments released Monday. For the period covered by the study--2003 to 2006--all types of electronic payments grew, while check payments decreased. The Federal Reserve’s 2004 Payments Study indicated that the number of electronic payments and check payments was roughly equal in 2002. About 19 billion more electronic payments were made in 2006 than in 2003. In contrast, the number of checks paid fell by about seven billion over the same period. Of the 93 billion noncash payments in 2006, about 63 billion were electronic and roughly 30 billion were checks. The annual use of debit cards increased by about 10 billion payments during the survey period to 25.3 billion payments in 2006. Debit cards now surpass credit cards as the most frequently used electronic payment type. Over the same period, automated clearinghouse (ACH) payments grew to 14.6 billion, an increase of almost six billion payments. Credit cards grew by almost three billion payments to 21.7 billion in 2006. The highest rate of growth from 2003 to 2006 was in ACH payments, which grew about 19% per year, followed by debit card payments at almost 18% in growth. Meanwhile, checks declined by an average of 6.4% per year since 2003, indicating that the pace at which check payments has decreased since the mid-1990s has picked up in recent years. “The results of our study underscore the ongoing importance of check electronification and other innovations that improve the efficiency of the U.S. payment system,” said Richard Oliver, executive vice president of the Federal Reserve Bank of Atlanta, and the Federal Reserves Banks’ product manager for retail payments. “With around 33 billion checks written in 2006, we expect checks to be around for some time.” The figures are consistent with credit unions’ experiences. “Nationwide, 61.7% of credit unions indicated on the June 2007 National Credit Union Administration 5300 Call Report that they offer an ‘ATM/debit card program’ and 50.5% reported that they had credit cards loans outstanding,” Marc Shafroth, director of data and statistics at the Credit Union National Association (CUNA), told News Now. CUNA’s 2007-2008 Credit Union Environmental Scan (E-Scan) for Strategic Planning had specific conclusions regarding credit unions and the use of debit cards. “Consumers’ rapid adoption of debit cards has been good news for credit unions,” the E-Scan said. “To remain competitive, especially with banks, credit unions need to consider debit-card rewards programs and bundling debit-card offerings with other credit union services to create ‘relationship packages’ that promote member loyalty and retention.” Regarding credit cards, the E-Scan concluded: “Credit unions should not overlook the importance of the credit card relationship to the overall member relationship. Credit cards are one of the most lucrative financial products in terms of return on assets. Credit unions thinking about selling off their card portfolios should investigate other options, including third-party agency card solutions.”

California league honors three Unsung Heroes

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RANCHO CUCAMONGA, Calif. (12/11/07)--The California Credit Union League recently honored Ginny Baldauf, the late Robert Brain and Doug Lanford with the Unsung Heroes Award from the league's Historical Preservation Committee. Baldauf joined the league in 1973 as conference coordinator. She has served as director of education and public relations at Marine Air FCU (now Patriots FCU), Santa Ana; Provident CU, Redwood City; and vice president of human resources, San Mateo CU, Redwood City. Since her retirement in 1988, she has worked as a consultant. She served on the CUNA Human Resources Council Executive Committee, and as president of the league's Human Resources Network. She also worked with the World Council of Credit Unions to further credit union development in China. In 1995, she represented U.S. credit unions as a delegate to the United Nations Women's Conference in Beijing. Brain served on the board of the Pacific Telephone Co.'s credit union from 1966 to 1971, including one year as chairman. In 1971, he became CEO of Telephone Employees CU (now Wescom CU). When he retired in 1997, the credit union had 12 branches and was a leader in offering members ATM and Internet services. He served on the league's policy-making body, several committees and task forces. In the mid-1990s, Brain co-chaired the National Alliance for Credit Unions. He also served on the advisory committee of the California Commissioner of Corporations and advisory council board of the National Association of State Credit Union Supervisors. Langford began as a volunteer in 1959 with Form Flow FCU, Oakland, and later served as its volunteer treasurer. In 1964, he became manager of the Alameda Coast Guard FCU (now Sea West Coast Guard FCU). He also served as CEO of Contra Costa FCU (then Contra Costa County Employees FCU) and Spectrum FCU (formerly Bechtel FCU). Langford worked as a representative of the California league, formed a consulting business, and founded CUTECH, an employment placement service for credit unions. He held many positions in the league's East Bay Chapter and worked on the Annual Meeting and Convention committee. He was a member of Credit Union National Association's Founders Club and helped found six credit unions.

CU System briefs (12/10/2007)

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* NAPERVILLE, Ill. (12/11/07)--Illinois Credit Union League (ICUL) President/CEO Dan Plauda (center) was recognized by league staff and board for 30 years of service at ICUL's November board meeting. Plauda began his career with ICUL in 1977 as its first general counsel. He participated in a major overhaul of the Illinois Credit Union Act, and worked for the development of share drafts, the expansion of the Credit Union Political Action Council and the establishment of the Illinois Credit Union Foundation. He became president/CEO in 1984 of the league and League Service Corp. He served five years on the Credit Union National Association and CUNA Service Group boards and is a former member of the American Association of Credit Union Leagues executive board. Also pictured are Steve Olson, left, ICUL executive vice president, general counsel and chief operating officer, and Carl Sorgatz, right, board chairman. (Photo provided by the Illinois Credit Union League) … * MADISON, Wis. (12/11/07)--Filene Research Institute Chief Innovation Officer Denise Gabel, left, congratulates Maureen Maddox on filling Filene's new innovation sabbatical role. Maddox, previously vice president, debit product management and development for MasterCard Worldwide, will develop and implement Filene's plan to launch national field projects to help credit unions be innovative leaders. During her career, Maddox has filled executive positions with CUNA Mutual Group, Summit CU of Madison, Wis., CUNA & Affiliates; and the California Credit Union League. (Photo provided by the Filene Research Institute) … * ENGLEWOOD, N.J. (12/11/07)--Catherine McMahon Miller, former director of the New Jersey Credit Union League, died Thursday at the age of 95. She was a retired nurse for the Jersey Board of Education and co-founder of the Liberty Savings FCU in Jersey City in 1951. She also was a national director of the Credit Union Legislative Action Council. Survivors include three children, 14 grandchildren and several great-grandchildren, and several brothers and sisters. (Ashbury Park Press Dec. 9) …

CUNA Annual Survey to be mailed in January

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MADISON, Wis. (12/11/07)--The Credit Union National Association (CUNA) Annual Survey will be mailed out to all U.S. credit unions at the beginning of January. This year, CUNA has added a special question to the survey so it can help credit unions find more sources for back-office services. The survey is used to track new trends in credit union service offerings not covered by the National Credit Union Administration 5300 Call Report, and enables CUNA to answer questions from the public, government agencies and elected officials about credit unions. The survey can be completed online. To sign up, use the link. The time required to complete the survey should be less than 10 minutes. For any questions about the survey, contact Marc Shafroth at 608-231-4182 or