Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

CU System Briefs (12/04/2013)

 Permanent link
  • NAPLES, Fla. (12/4/13)--A former teller pleaded guilty Monday to a conspiracy to embezzle hundreds of thousands of dollars from his ex-employer, Taupa Lithuanian CU. Michael Ruksenas, 33, of Naples, Fla., admitted in a federal courtroom to participating in a scheme to steal the funds from the now-shuttered credit union (The Plain Dealer Dec. 3). The embezzlement was led by CEO Alex Spirikaitis, who was arrested in October after going into hiding when the credit union was closed by regulators in July (News Now Oct. 22). The Federal Bureau of Investigation issued a warrant for Spirikaitis' arrest for making "false credit institution entries" after the Cleveland, Ohio-area credit union was shut down by the Ohio Division of Financial Institutions and put into liquidation by the National Credit Union Administration (News Now July 16). Ruksenas, who is scheduled to be sentenced on Feb. 28 and agreed to pay restitution of $481,000, is cooperating with investigators and said he will testify against alleged co-conspirators as part of a plea deal. Six related indictments are expected, according to federal prosecutors. Spirikaitis is in federal custody. He has been charged with making false statements but has not yet been indicted. At the time of its closure, Taupa Lithuanian had $23.6 million in assets. It had served 1,154 members and was chartered in 1984 to serve the Lithuanian community of Cleveland and Northeast Ohio. It was the 11th federally insured credit union to begin the liquidation process in 2013 ...
  • BURLINGTON, Vt. (12/4/13)--The former CEO of the now-defunct Border Lodge CU pleaded guilty to embezzlement at a federal court in Burlington, Vt. (Associated Press Dec. 3). Debra Kinney admitted Monday to stealing money from members' accounts, and agreed to forfeit $250,000. She faces up to 30 years in prison and up to $1 million in restitution (Burlington Free Press Dec. 2). Kinney is scheduled to be sentenced on April 14. In the plea bargain, U.S. Attorney for Vermont Tristram Coffin agreed to refrain from indicting Kinney on other possible charges and agreed to seek a penalty on the low end of the sentencing guidelines. Kinney was first charged in June with a single count of embezzlement. Court records indicate that Kinney took money from the credit union and deposited it into her account at Passumpsic Savings Bank and in an account for a close friend. A preliminary investigation indicated $207,000 was taken from member accounts between April 4, 2011 and July 12, 2012. Kinney also allegedly took $79,108 from members and funneled it between June 13, 2011 and June 6, 2012 into an account maintained by her and her husband. The FBI and state regulators shut down Border Lodge CU after a court-ordered raid on Nov. 30, 2012, prompted by a tip from an unnamed employee. The credit union's offices were mainly located in the basement of Kinney's home in Derby Line, Vt.--a town that borders Canada. When Border Lodge was shut down, it had about 1,100 members and $3.1 million in assets ...
  • HIGHSTOWN, N.J. (12/4/13)--The charity arm of the New Jersey Credit Union League announced Tuesday that it is participating in AmazonSmile fundraising this year (The Daily Exchange Dec. 3). Shoppers on Amazon.com will be able to direct 0.5% of purchases on eligible products to the New Jersey Credit Union Foundation during the holiday season. The NJCUF is the second state league foundation to become a "charity of choice" through the online retailer this year. The Carolinas Credit Union Foundation became the first when it announced in early November that it joined the AmazonSmile program (News Now Nov. 7) ...
     
  • FARMERS BRANCH, Texas (12/4/13)--Tom Hodge, a Cornerstone Credit Union League executive, died of cancer on Sunday (Cornerstone Leaguer Dec. 3). Most recently senior vice president of strategic business, Hodge first joined Cornerstone in 1987 as a consultant in West Texas. He was promoted to director of consulting services in 1994, a position that saw him supervising league consultants in Dallas. In 1997, he graduated from a league school created to train aspiring executives. Cornerstone said that Hodge was recognized throughout Texas for his expertise in lending, credit union operations, marketing and strategic long range planning. "Tom had been battling cancer for the last five years. He fought hard till the end," Dick Ensweiler, league CEO, noted ...

CUAD: Another Victory In a Line Of Tax Battles

 Permanent link
VERMILLION, S.D.  (12/4/13)--South Dakota credit unions scored another victory as the Clay County Commission Tuesday voted unanimously (5-0) to indefinitely table the South Dakota Bankers Association's "Equalization in Taxation" resolution. 
 
"It's another victory in what appears to be a long line of battles with banks at the city and county level," said Robbie Thompson, president/CEO, Credit Union Association of Dakotas.
 
"They are saying that the cities and counties would derive a great deal of revenue from the bank franchise tax, when we know that is not accurate," Thompson said. "The amount that goes to each city and county is minimal. They are trying to leverage the fact that cities and counties are struggling with budgets."
 
Also, late Monday afternoon, South Dakota banks asked the Vermillion City Commission to consider its "Equalization in Taxation" resolution proposal. Following debate and a response from CUAD and credit union advocates, the city commission took no action on the request.  Official action could come at a later date.  Representing credit unions were Janet Mount, president/CEO Vermillion FCU, and Amy Klienschmit, CUAD director of compliance.   
 
South Dakota banks continued their push Tuesday with a planned presentation before the Campbell County Commissioners in Mount, S.D.
 
For the past several months, a select group of South Dakota banks, has promoted a state-wide effort to implore local lawmakers to impose taxes (local, franchises, or federal) on not-for-profit credit unions. Banks' core argument is that credit unions have grown "beyond their intended purposes in both size and scope," and changing the credit union tax status will solve local, state, and federal budget shortfalls. 
 
Banks have approached nine city or county boards with their tax proposal. Three boards have tabled the proposal indefinitely.
 
"We are going to continue to fight these battles in every city and county where it is proposed, and be prepared for whatever the bankers do next," said Thompson.
 
The South Dakota Bankers Association on Nov. 25 presented a resolution proposal to the Yankton (S.D.) City Commission in support of taxing federal credit unions and farm credit system institutions. Credit union advocates attended the meeting and successfully defended against the banks' claims, the CUAD reported (News Now Nov. 27). The city commission tabled the resolution and will consider it at a later date.
 
On a state-wide conference call for South Dakota credit union leaders last week, CUAD requested its membership to be vigilant in scanning local school board, city and county commission agendas for more bank attempts to present their "taxation" resolution proposals and requests. 

CUAD's Youth Savings Program Gets a New Look

 Permanent link
BISMARCK, N.D. (12/4/13)--The youth savers program of the Credit Union Association of the Dakotas' Service Corp. is getting a new look.

Pee Wee Penguin, a program that helps kids learn smart savings habits and how to become financially savvy credit union members, has been a successful marketing tool for credit unions since 1988, said CUAD. The program advocates financial literacy and provides visibility for credit unions by helping kids learn more about what credit unions do.

The program has proved so successful that it is expanding with two additional characters, Sheldon and Kiwi.  Pee Wee, Sheldon and Kiwi are each designed to appeal to a certain youth age group.

Pee Wee appeals to grades one to three.  His profile says he loves drawing and camping, has a head for numbers and enjoys helping people and penguins learn more about money. He is full of ideas for saving and making money, but sometimes can resist splurging on a new comic book or fish milkshake.  He wants to be the first penguin astronaut when he grows up, but he's afraid of heights. He might become a math teacher instead.

Kiwi, for grades four to six, is Pee Wee's big sister. She likes playing snow soccer, reading and dancing. She can be a little bossy  at times but watches out for her little brothers and tries to keep them out of trouble.  Kiwi dreams of playing soccer in the Olympics one day.  She also wants to be a famous writer, so Pee Wee is helping her learn how to save up money for college.

Sheldon, for pre-K to kindergarten, is Pee Wee's baby brother. He may be little, but he's smart.  Sheldon takes things apart and experiments, but sometimes his contraptions and experiments get him into trouble. He wants to become a scientist and help save the environment.  Pee Wee is helping Sheldon save up for his first chemistry set.

In addition to the new characters, the Pee Wee Penguin program is sporting a new logo, new website and an online electronic shopping center.  To learn more, use the link.

Seven Elected By Acclamation To CUNA Board

 Permanent link
MADISON, Wis. (12/4/13)--Seven credit union leaders were elected by acclamation to the board of directors for the Credit Union National Association.

The elected directors, their districts and classes are below.

District 1--Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Puerto Rico and Virgin Islands:
  • Class A (credit unions having less than 25,000 natural person members)--Edwin L. Williams, president, Discovery FCU, Wyomissing, Pa., $132 million assets; and
  • Class D (league presidents)--William J. Mellin, president, Credit Union Association of New York, Albany, N.Y.

District 2--Delaware, District of Columbia, Indiana, Kentucky, Maryland, Ohio, Virginia and West Virginia:
  • Class B (credit unions having at least 25,000 but not more than 93,999 natural person members)--Dallas Bergl, president, INOVA FCU, Elkhart, Ind., $281 million assets; and
  • Class D--Rick Pillow, president, Virginia Credit Union League, Lynchburg, Va.

District 3--Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee:
  • Class C (credit unions having at least 94,000 natural person members)--Maurice R. Smith, president, Local Government FCU, Raleigh, N.C., $1.3 billion assets.

District 5--Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming:
  • Class C--Tony C. Budet, president, University FCU, Austin, Texas, $1.64 million assets.

District 6--Alaska, California, Hawaii, Idaho, Nevada, Oregon, Washington, American Samoa, Guam, Johnston Atoll, Midway Atoll, Northern Mariana Islands, Palmyra Atoll and Wake Atoll:
  • Class B--Jeff York, president, CoastHills FCU, Lompoc, Calif., $718 million assets.

In District 4--which covers Illinois, Iowa, Michigan, Minnesota, Missouri and Wisconsin--there is one contested election for Class A. Voters will choose between Pat Drennen, CEO, 1st Gateway CU, Camanche, Iowa, $87 million, and Geraldine Burek, president/CEO, South Division CU, Evergreen Park, Ill., $53 million.

Ballots for the contested election were mailed Monday to all affiliated credit unions in District 4, Class A, with a voting deadline of Jan. 10. Results will be announced Jan. 15.

Directors elected will take office upon the adjournment of CUNA's Annual General Meeting during the Governmental Affairs Conference in Washington, D.C., Feb. 24.

Georgia League Survey: Consumer Confidence On The Rise

 Permanent link
ATLANTA (12/4/13)--Increased demand for new- and used-car loans is leading the way for higher consumer confidence and significant loan growth in Georgia, according to a new survey.

The report, released by the Georgia Credit Union Affiliates, showed that the state's 139 credit unions saw a 4.7% increase in total loans during the first three quarters of the year and a 6.4% rise over the past 12 months.

New- and used-auto loans performed well with 8.8% and 6.9% growth rates, respectively. At 4.4% in the first three quarters, first mortgages were on pace with the overall loan growth of 4.7% (Paying ATTENTION Dec. 2).

Georgia's credit union members continue to add to their nest eggs with balances in regular saving accounts growing 9% over the past 12 months. Although credit card balances increased 2.1% over the past 12 months, they are 1.7% lower compared with the first nine months of 2012, said GCUA.

"As consumer confidence continues to rebound, Georgia consumers continue to spend their money wisely on sound investments," said Mike Mercer, league president/CEO. "Georgians are making a concerted effort to restore their fiscal houses to the same levels they were before the Great Recession."

This sentiment also was reflected in an earlier GCUA survey that found 52.7% of Georgia consumers plan to spend the same as last year on holiday purchases, while 38.9% plan to spend less.

Additionally, credit union membership in Georgia continues to grow, with a 2.7% increase during the past year, which the survey attributed to better rates.

Maryland CU's Bank Purchase Approved By Shareholders

 Permanent link
BALTIMORE (12/4/13)--Municipal Employees CU of Baltimore will take over operations of Advance Bank Dec. 12 after shareholders of the bank approved the sale of the bank to the $1.2 billion credit union, the credit union confirmed Tuesday.
 
The credit union-bank acquisition is the first of its kind in Maryland.
 
Letters have been sent to Advance Bank customers advising them of the transition, Dorothea Stierhoff, MECU senior public relations manager, confirmed with News Now.
 
The data processing conversion is expected to be completed by early March, Stierhoff said.
 
The purchase and assumption agreement for the acquisition was approved by Maryland Commissioner of Financial Regulation Mark Kaufman in October (News Now Nov. 1).
 
MECU's purchase of Advance is the fifth credit union acquisition of a bank since 2011.  FiveStar CU, Dothan, Ala., signed an agreement to purchase Flint River National Bank, Camilla, Ga., in September. It is subject to regulatory review. The National Credit Union Administration approved New Berlin, Wis.-based Landmark CU's request to purchase and assume Hartford Savings Bank in February (News Now March 18).
 
GFA FCU, Gardner, Mass., acquired Monadnock Community Bank in December 2012. United FCU, based in St. Joseph, Mich., purchased Griffith (Ind.) Savings Bank in December 2011 (News Now April 4).

CUNA Mutual's Post Shares Retrospective With CU Magazine

 Permanent link
MADISON, Wis. (12/4/13)--Just shy of his last day as president/CEO, Jeff Post shared what was right about his nine years heading CUNA Mutual Group.
 
For Post, the "right person, right job, right results, right now" mantra anchored him while he guided the company through a rough economy, according to an interview with Credit Union Magazine.
 
The domino effect of surrounding himself with good people, who in turn surrounded themselves with good people, served him well, he told the magazine.
 
His greatest source of pride is CUNA Mutual's designation as one of the world's most ethical companies by international think thank Ethisphere. Ethisphere recognized CUNA Mutual for its credit union advocacy, commitment to ethics and compliance, and community involvement.
 
The credit union system provides incredible opportunities for people, but it is up to the individual to maximize his contribution by building skills sets and being involved in the community, Post said, giving a nod to the Credit Union Development Education program administered by the National Credit Union Foundation.
 
"The fact that it's a cooperative group and one that's focused on people helping people makes it a very fulfilling place to work," he told Credit Union Magazine.
 
Post will continue in an advisory role until July 2014.
 
Credit Union Magazine next will feature an interview with Bob Trunzo, Post's successor as president/CEO as of Jan. 1.

Kansas CU Association Launches Fin Lit 'Destroy Debt' Campaign

 Permanent link

WICHITA, Kan. (12/4/13)--The Kansas Credit Union Association has launched a consumer financial literacy campaign loosely based on the format of "Biggest Loser" TV show, but instead of shedding unwanted pounds, participants will eliminate household debt.
 
Money Possible: Destroy Debt, is a 16-week consumer literacy campaign in partnership with Wichita area credit unions and the Consumer Credit Counseling Service. The idea stems from KCUA's new Innovation and Implementation Lab.
 
"One of the issues that came out of this summer's launch of the Innovation Lab was the need for member and consumer financial education," said Melissa Baptista, KCUA research and development director. "This pilot program satisfies the financial literacy need, as well as promotes the value of credit unions as strong financial partners."
 
Any Wichita area credit union member is eligible to apply. KCUA will choose the participants, whose stories will be told through the MoneyPossible.org blog, social media and local media outlets.
 
Weekly financial tips and weekly segments with updates from the participants will air on local TV. Four live interviews also will air throughout the campaign, and the blog will be updated as the participants progress through the program. 
 
The campaign runs from February to June. The deadline for credit union members to apply for the campaign is Dec. 20. Participants will be selected in mid-January and start their financial counseling sessions in mid-February.

Federation Applauds Decision On Funds For CDFI Certification

 Permanent link
NEW YORK (12/4/13)--The National Federation of Community Development Credit Unions, in its campaign to increase the number of low-income credit unions certified as community development financial institutions (CDFIs), said the idea is getting more support from throughout the credit union industry, including from regulators.
 
The federation applauded a recent decision by the National Credit Union Administration to offer technical assistance awards for credit unions that seek a CDFI certification.  The agency has made grants of up to $2,500 per credit union available.
 
Several leagues have committed to educate, inform and support their member credit unions seeking the certification, said the federation, citing the Mississippi Credit Union Association as an example.
 
MSCUA has committed to kick off a year-long initiative with the federation aimed at helping credit unions in the state understand the value of CDFI certification to their communities.
 
"In Mississippi, we have 84 credit unions and 75% qualify for low-income designation," said MSCUA President/CEO Charles Elliott.  "They represent 86% of all members, 89% of total assets and one of the highest percentages of people living in poverty," he said.
 
"We support the federation's mission of helping people achieve financial independence through credit unions and will be working with the federation on increasing the number of CDFI-certified credit unions in our state," Elliott said.
 
Credit unions comprise less than 25% of all CDFIs. As the CDFI intermediary for community development credit unions, the federation has advocated for an increase in the number of CDFI-certified credit unions. Most of the nation's 2,000 low-income credit unions are eligible. However, roughly 10% are CDFI-certified, the federation said.
 
"CDFI certification is one of the building blocks for sustainable growth in low- and moderate-income communities," said Cathie Mahon, federation president/CEO.  "The CDFI Fund is one of the most important sources of capital community development credit unions can access to scale the delivery of safe, affordable financial products and services in their communities."
 
Certification is provided by the U.S. Treasury Department's CDFI Fund, which has awarded $1.5 billion in capital grants since its inception in 1994. To be eligible, credit unions must have a primary mission of promoting community development and must direct a minimum of 60% of their financing activities to an eligible target market, including an investment area or low-income population.

For more information, contact the federation or its consulting arm, CU Breakthrough.