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Marylands special session includes some CU bills

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COLUMBIA, Md. (12/12/07)--Maryland’s legislature recently held a 2007 special session in which 94 bills were introduced, with only a few affecting credit unions (FOCUS Newsletter Dec. 10). Maryland Gov. Martin O’Malley signed six bills into law:
* HB 1--Budget Reconciliation Act; * SB 2--Tax Reform Act of 2007; * SB 3--Maryland Education Trust Fund-Video Lottery Terminals; * HB 4--Video Lottery Terminals-Authorization and Limitations; * HB5--Transportation and State Investment Act; and *SB 6--Working Families and Small Business Health Coverage Act.
While credit union service organizations (CUSOs) are probably subject to any applicable corporate tax provisions, credit unions should pay particular attention to the Tax Reform Act of 2007 (SB 2), according to the Maryland and District of Columbia Credit Union Association (MDDCCUA). SB 2 creates a Maryland Business Tax Reform Commission that will review and evaluate the state’s current business structure. It will be composed of 17 members who must submit an interim report by Dec. 15, 2010, and a final report before Dec. 15, 2011. Two other bills are of interest to credit unions: HB 55, which would increase the annual filing fee for state-chartered credit unions from $300 to $1,000; and HB 30, which would cause the balances on certain gift certificates to be considered abandoned four years after they were acquired, the MDDCCUA said. The gift certificate funds also would be considered abandoned if they were unused for one year. The abandoned funds would be turned over to the Maryland Education Fund by the state comptroller. Both bills failed, but it is highly likely that most of the failed bills from the special session will reappear when the 2008 Maryland General Assembly begins Jan. 9, said the MDDCUA.

YES Summit wrapup The technological twist

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AUSTIN, Texas (12/12/07)--The Credit Union National Association's (CUNA) YES (Your Essential Strategies) Summit: Serving 18-to-30s ended as it began--and as it ran--with a technological twist. The intent of the event, held last week in Austin, Texas, was to explore how credit unions can design financial products and service delivery to match young adults’ financial behavior and preferences.
Philip Heckman, right, CUNA's director of youth and young adults programs, crosses the finish line first in competition with fellow YES Summit blogger, Christopher Morris, web manager for the CUNA Councils, to see who can post items from the summit faster. (Photos provided by CUNA)
Summit attendees registered for the YES CU Community on site.
YES Summit attendee Debs McCrary with her new iPod Touch.
To help attendees understand the 18-to-30 mindset, the summit agenda immersed them in young adults’ online culture, according to Josh Jones, CUNA’s manager of young adult services. “We opened with an announcement of our live conference blog, which featured posts of all sessions within minutes of completion,” said Jones. “We topped that with an announcement of the YES CU Community, a social network website designed to give credit union people a forum to discuss ways of better serving 18-to-30s.” The YES CU Community allows individuals interested in this member demographic to register and create personal profiles. This makes it possible for them to connect with their credit union peers based on common interests, such as having marketing or lending responsibilities, or working for a university credit union. “The purpose of an online social network,” Jones said, “is to stimulate the exchange of ideas among members. The challenge is to attract enough participants to generate self-sustaining conversations. There’s no magic number for this critical mass of participation, but our goal was to get all 108 summit attendees to register before the conference was over.” YES Community registration is open to everyone associated with the credit union movement. At press time, membership stood at more than 175, reflecting an interest beyond the Austin group. A drawing for an iPod Touch on the summit’s last day served as an incentive to register for the network. Philip Heckman, CUNA’s director of youth and young adults programs, chose the prize winner using an online random number generator. “Given how tech savvy Generation Y is, there was no way we were going to decide the prize winner by drawing a slip of paper out of a hat,” Heckman said. The computer algorithm chose number 67, and Debs McCrary, a member of the board of San Antonio FCU, claimed her prize. In a comment she posted in a YES CU Community discussion group later, McCrary thanked CUNA for the iPod and disclosed that both her son and daughter had generously offered to relieve her of the burden of filling its eight gigabytes of musical storage space.

Washington CUs provide more flood assistance

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FEDERAL WAY, Wash. (12/12/07)--Several credit unions in Washington are providing more help to those affected by last week’s floods, according to the Washington Credit Union League (WCUL). O Bee CU, Tumwater, has set up a flood victim’s account to help local families. Donations will be given to the Salvation Army and the American Red Cross, and will be accepted at the Tenino or Tumwater branches. Donations will be accepted through the end of the year, and O Bee will match the first $5,000 in contributions, according to David Bennett, WCUL director of public relations. BECU, Seattle, also has activated its Member Assistance Program. The program provides up to $3,000 in unsecured loans or $10,000 in secured loans. Great Northwest FCU in Aberdeen reported to the league that it was without power until 8 a.m. Dec. 5. The credit union opened three branches on Dec. 4 without power and conducted limited transactions. On Thursday afternoon, Great Northwest FCU’s Ocean Park and Raymond branches opened with power. More than 300 homes were destroyed as a result of the flooding. More than 1,600 livestock were lost, and 700 people are without power. One of the state’s highways remains closed. The National Guard troops still are involved with recovery work, according to league updates. Cleanup from the flooding will take months, Washington Gov. Chris Gregoire said Monday. Six people were killed in the storms. Damages could cost billions of dollars (Associated Press Dec. 10).

CU System briefs (12/11/2007)

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* FARMERS BRANCH, Texas (12/12/07)--Shell FCU in Deer Park has been awarded the Juntos Avanzamos designation by the Texas Credit Union League. The designation signifies that the credit union has a long-term vision and commitment to serving Hispanics (LoneStar Leaguer Dec. 11). “Juntos Avanzamos,” or “Together We Advance,” also lets the Hispanic community know that they can receive friendly and affordable financial services. Ten Texas credit unions have earned the designation … * FARMERS BRANCH, Texas (12/12/07)--The Texas Credit Union Foundation accepted a donation of $17,000 for its financial literacy fund from the Credit Union Twister board. The board oversees the Texas Twister, which began in July 2004 as a sister run of the Credit Union Cherry Blossom 10-mile run in Washington, D.C. The Twister was held in Austin to raise awareness by legislators of the credit union movement (LoneStar Leaguer Dec. 11). The last run was held in October 2006. In 2007, the board decided to discontinue the Twister. All remaining proceeds were donated to the foundation …

SEC wants depositors in bank conversion subpoenaed

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BOSTON (12/12/07)--The Securities and Exchange Commission (SEC) is seeking subpoenas on 14 depositors of New Haven Savings Bank, now called NewAlliance Bancshares, to investigate a possible fraud scheme. The SEC announced Friday that it had filed an application in the U.S. District Court for the District of Connecticut for orders to enforce investigative subpoenas served on: Charles Agapiou, John Agapiou, Asimina Antonellis, Charles Artese, Rose Ercolano, Evangelos Hadjimichael, Karen Kerames, Elene Koutroumanis, Kelli Pappas, Kristine Pappas, Marie Sagnella, Rita Santini, Peter Spalthoff and Corinne Tsakonas, all of Connecticut. Each was a depositor of New Haven Savings Bank, based in New Haven, Conn. The SEC’s papers allege that the commission has been investigating whether certain individuals or entities used depositors who were eligible to purchase NewAlliance stock at the time that the bank converted from mutual to stock organization form as nominees to enable such individuals or entities to participate in the conversion. The SEC also alleges that the depositors purchased shares of NewAlliance in its initial public offering with funds provided by Old Financial LLC, a North Dakota limited liability company. The SEC has been cracking down on fraud involving banks that convert from mutual savings to stock ownerships. In May, the SEC settled civil charges with four individuals involved with a 10-year scheme that swindled mutual savings banks and their depositors when the banks converted to stock ownership. A number of former credit unions were among the institutions affected (News Now May 18). Those credit unions included:
* Viewpoint Financial Group (formerly Community CU, Plano, Texas); * Heritage Financial Group (formerly AGE FCU, Albany, Ga.); * Atlantic Coast Federal Corp. (formerly Atlantic Coast FCU, Waycross, Ga.); * K-Fed Bancorp (formerly Kaiser Permanent Employees FCU, Covina, Calif.); * Rainier Pacific Financial Group (formerly Rainier Pacific CU, Fife, Wash.); * Synergy Financial Group Inc. (formerly Synergy FCU, Crandon, N.J.); * First Pactrust Bancorp Inc. (formerly Pacific First FCU, Chula Vista, Calif.); and * Jade Financial (formerly IGA FCU, Philadelphia).
News Now also reported in September that a group of investors at First Pactrust Bancorp Inc., Synergy Financial Group Inc., Rainier Pacific Financial Group, and Citizens Community Bancorp Inc. agreed to pay nearly $3 million of the amount they gained after the institutions converted (Sept. 26).

Strong gift card sales at CUs kick off peak season

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DES MOINES, Iowa (12/12/07)--Early sales figures indicate that a substantial number of consumers are choosing to purchase gift cards that can be redeemed at a variety of retailers instead of at a single retailer. Since Black Friday, credit unions offering The Members Group (TMG) ATIRAgift cards have sold almost 15,000 instant-issue gift cards with an average load of more than $90 per card. Currently, 55 credit unions, ranging in asset size from less than $6 million to more than $4 billion--and representing almost 400 branches--offer the gift cards (The Members Group Dec. 10). The $4.045 billion asset America First FCU in Riverdale, Utah, is offering gift cards for a second holiday season in a row. Rich Syme, America First vice president, said he is happy with the numbers so far and expects the overall numbers to increase from last year’s roughly 10,600 cards issued. “We’ve added a new twist to our product by offering a personalized card, in which gift givers can use their own photos as the card design,” he said. “This feature has really gotten the attention of our members. In addition to the photo card, which is available only online, we expect brisk branch traffic for the generic gift cards, which will result in branch sales of 400 to 500 cards per day.” While most gift cards sold in the first two weeks of the holiday season were due to walk-in traffic, several credit unions already are working with companies to provide bulk-order opportunities, said Jeff Falk, TMG director of product development.

CU first to implement United Ways Pennies campaign

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WASHINGTON (12/12/07)--The first financial institution to implement United Way of America's national "Pennies for Change" campaign is Westchester FCU in White Plains, N.Y. United Way announced the launch of its philanthropic initiative Tuesday. The program provides the opportunity for member/customers of participating financial institutions to automatically donate one penny for each credit or debit card transaction. The $28.1 million asset Westchester FCU implemented the campaign through its card processor, Covera Card Solutions. Kimberly McCumber-Ploff, executive in charge of Covera, said it is looking forward to helping other credit unions implement the program. Twelve other credit unions and banks have joined as charter members and are exploring ways to make the program available to their members/customers, said United Way (Business Wire Dec. 11). They include:
* CTCE FCU, $80.2 million assets, Reading, Pa.; * FORUM CU, with $1 billion assets, Indianapolis; * Northeast CU, with assets of $999 million, Portsmouth, N.H.; * SouthWest Community FCU, $159 million assets, St. George, Utah; and * Superior FCU, $247.3 million assets, Lima, Ohio.
Six banks also are participating in the program. The donations will help fund United Way programs in local communities. According to the Nilson Report, Americans make more than 40 billion card purchases a year.

CU members in Kansas City targeted in phone scam

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JEFFERSON CITY, Mo. (12/12/07)--Mazuma CU members are being targeted by scammers claiming to be from the credit union. Scammers are calling the Kansas City-based Mazuma CU members, stating that their accounts have been suspended because of fraud. The caller tells the member to call a toll-free number to reactivate the account. When members call, they are asked for their credit card numbers (US Fed News Dec. 10). “This is a phishing scam--nothing more,” said Kansas City Attorney General Jay Nixon. “These crooks can put together very official-sounding phone calls, but it’s important to remember never to give out personal information to anyone who’s contacted you.” Anyone who get calls that appears to be from their financial institution should assume that it’s a scam. No legitimate organization will call or e-mail consumers asking for personal information, he added. Consumers who receive calls should report them to the Attorney General’s Consumer Protection Hotline at 1-800-392-822, Nixon said.