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Free brochures offered by revamped Hispanic Resource Center

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MADISON, Wis. (1/2/08)--The first 100 individuals who register for the list service at the Credit Union National Association’s (CUNA) Hispanic Resource Center will receive copies of Las Cooperatives de Ahorro y Credito, a brochure written in Spanish about credit unions. The resource center recently underwent a redesign, which “should help visitors find the information they are looking for faster. It segments content for new visitors, new information, networking tools and additional resources,” said Danielle Chatfield, community affairs director for MidStates Educators CU in Columbus, Ohio, and chairman of the advisory group of credit unions overseeing the site’s development. The site has received nearly 250,000 hits since it was launched in February 2005. The news section of the site drives monthly traffic, Chatfield said, but she’s hoping to stimulate more activity on the site’s list service. “Credit unions have had a long history of sharing solutions with each other and that’s what we hope the list service will do for credit unions reaching out to service the Hispanic market,” she said. “And while we’ve had an increase in the number of people and discussions taking place on the list service, we think many credit unions may not be aware of that resource.” Discussion on the list serve has ranged from topics on individual taxpayer identification numbers to international remittance services. “Reaching out to serve new immigrants is one way credit unions can grow their membership,” she said. For more information, use the links.

2007 was the year of the data breach

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BOSTON (1/2/08)--Credit unions won't be surprised to learn that the loss or theft of personal data through data breaches soared to unprecedented levels in 2007. And the trend isn't expected to slow down anytime soon. More than 79 million records were reported compromised in the U.S. through Dec. 18, according to the San Diego-based Identity Theft Resource Center (ITRC). That's almost a fourfold increase from the nearly 20 million records reported compromised for the entire year in 2006 (Associated Press Dec. 30). On a global scale, more than 162 million records were compromised through Dec. 21 both in the U.S. and overseas, compared with 49 million last year, says Accounting for half those records was the TJX Cos. data breach, says Attrition. It estimates that 94 million records--estimates given by Visa and MasterCard officials--were exposed in the TJX breach, which affected customers of discount stores including T.J. Maxx and Marshalls. However, ITRC estimates the number of records compromised was closer to 46 million--the number TJX acknowledged. The two data breach monitors say the theft trend won't end soon because hackers are a step ahead of security, laptops with sensitive information disappear, and institutions are collecting even more data than ever. Hackers are savvy to a major vulnerability--wireless data transmission--and are learning to bypass security safeguards to eavesdrop. Both companies also said there is an increasing number of incidents in which employees lose sensitive data, through inadequate handling or keeping laptop computers with Social Security numbers on them. ITRC Founder Linda Foley and Executive Director Jay Foley made several predictions for 2008 about identity theft trends. Among them:
* Thieves are getting younger and view identity theft as a lucrative career path; * ID theft will continue to grow internationally with more sophisticated scams designed to trick consumers into divulging their ID information. * Expect an increase in the number of breaches due to poor information handling policies and practices. * Studies will continue to contradict each other about victims, cause and effect, facts and overall cost of identity theft. This will lead to confusion, misguided legislation and governmental actions. * Businesses will develop and implement better ID authentication methods for applicants, including Internet and telephone applications. * ID theft will get more recognition as a crime by law enforcement, and more reports will be written to assist victims in their recovery rights. * Expect more legislative action on the issue of ID theft, including limiting the use of Social Security numbers; and * States and nonprofits will be in a better position to assist victims at no charge.

Michigan leads nation for in-school branches

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MADISON, Wis. (1/2/08)--At least 555 schools across the nation operate in-school credit union branches, with Michigan leading the pack, according to year-end data from the Credit Union National Association (CUNA). CUNA’s online directory indicates that 169 credit unions in 30 states and the District of Columbia operate in-school branches at all age levels. Several states stand out, including:
* Michigan, with 48 credit unions in 259 schools; * Virginia, with 11 credit unions in 54 schools; * Wisconsin, with 18 credit unions in 42 schools; * Texas, with 13 credit unions in 25 schools; * New York, with four credit unions in 21 schools; and * Massachusetts, with six credit unions in 20 schools.
But because the data is self-reported, the totals are likely understated, said Phil Heckman, CUNA director of youth and young adult programs. “To build a more accurate picture of credit unions’ extraordinary efforts to help youth build a savings habit, I encourage each credit union that should be listed in our director to use our online form to report its involvement and keep its record up to date,” Heckman said. All reported in-school branches are student-run to some degree. Most offer basic savings accounts and limited withdrawals, and require a visit to a full-service office for other services, according to Heckman. Many credit unions tie their branches to personal finance instruction in the classroom and use teller positions to recruit students for internships. Some have even hired student tellers after graduation, he said. The CUNA directory serves as a resource for credit unions that want to open an in-school branch. “It also helps document the degree to which credit unions put other financial institutions to shame when it comes to engaging youth in learning to set financial goals and take control of their financial futures,” Heckman said. For more information, use the links.

CUs ring in new year of financial ed activities

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MADISON, Wis. (1/2/08)--Credit unions are ringing in the new year with financial education programs already underway while others are starting new programs to help members face today's economic realities. Some credit unions are educating consumers in a debt jam with seminars or personal attention. Others are partnering with organizations or teaming with other credit unions and school districts. In Chandler, Arizona, First CU, a $463.7 million asset credit union with 14 branches throughout the state, announced last month it has partnered with Take Charge America, a nonprofit organization that helps consumers with their finances. Their program will offer credit union members new free financial education tools. The services will help members:
* Understand credit scores; * Budget to meet living expenses; * Manage credit card and other unsecured debts; and * Balance checkbooks.
In Florida, Card Services for Credit Unions (CSCU) sponsored a community outreach event at the $479 million asset Suncoast Schools FCU, based in Tampa, to promote financial literacy. CSCU and Visa brought in NFL Pro-Bowler and Tampa Bay Buccaneer Derrick Brooks, who worked with Practical Money Skills for Life to deliver his message to more than 600 Tampa Bay youth. The program provides free money management resources and lesson plans for the home, classroom or at work. "Credit unions have always been on the forefront of educating consumers about money management," said Robert Hackney, CSCU president. "The need for financial literacy in America has never been greater, and credit unions like Suncoast are stepping up to meet this challenge." At Telesis Community CU in Van Nuys, Calif. Patty Marcoux, senior business service officer at the $618.2 million asset credit union, breaks up her workday to teach orphaned teenagers how to manage money (Los Angeles Daily News Dec. 24). "It goes hand in hand with what we believe in," Marcoux told the newspaper. "It allows us to teach the kids financial literacy, and that is something Telesis is big on." At Utah's second largest credit union, Mountain America CU, Mick Huerta, bilingual mortgage loan professional, will present a home buying and basic credit seminar series for the public on the first Thursday of each month this year. One of the most important things in preparing for home ownership is to understand how credit works, he said. "Knowing how the system works can help you get better interest rates on credit cards, auto loans and mortgage offers," he said. The Ohio Credit Union League launched its financial education initiative, MoneyAndStuff, in Youngstown. The league sees a direct connection between personal financial illiteracy and the upswing in bankruptcy rates, record debt, and home foreclosures. "We are stepping up our efforts as leaders and collaborators in financial education because the financial health of Ohio's youngest citizens is at risk," said OCUL President Paul Mercer. He noted that credit unions "are investing in brighter futures for the next generation." Ohio's program offers a website resource for parents, educators, public officials, credit unions and the media; targets the most impressionable ages--4 and 5, and 11 and 12; and emphasizes credit concepts and how to manage borrowing. Wisconsin credit unions continue to get kudos for its student program in high schools, says the Wisconsin Credit Union League. Michele Otte, a teacher in the social studies department of Kiel High School, noted that Premier Financial CU, New Holstein, has gone out of its way by providing National Endowment for Financial Education resources and the league's brass/STUDENT PROGRAM personal finance initiative (The League News Dec. 31). For more information about financial education programs, use the links.

Jeffco CU targeted by multiple phish

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LAKEWOOD, Colo. (1/2/08)--Jeffco CU in Lakewood shut down its online banking site Friday in response to an e-mail phishing scam that targeted its members. Members received several waves of e-mails that appeared to be from Jeffco CU, stating that their accounts were suspended or had limited access. The e-mails provided a link to a site that looked identical to Jeffco CU’s main site. There, members were told to enter their account information. The fraudulent sites have been linked to California, Nevada and Eastern Europe ( Dec. 29). Jeffco CU member Carol Byrd said she thought the e-mail was legitimate until she found out that the scammers tried to use her debit card in Romania. The scammers transferred $1,000 from her account. The amount was later refunded after she stopped the transaction ( Dec. 28). The credit union has posted multiple fraud alerts on its website since Dec. 21 and has added an alert to its telephone directory. Jeffco CU is one of several financial institutions in the area that have been targeted by the scam. “The phish attempts are growing. More and more people are being sent these fradulent e-mails. We are making sure that we get all of these fraudulent websites shut down,” according to a statement on the credit union’s website. Members who received the phishing e-mails were encouraged to contact the credit union. Jeffco CU would never ask a member to verify personal information via e-mail or in an online form, and would never need to verify credit card information online, the credit union stated on its website. Jeffco CU has $145 million in assets.

CU assists 10 families victims of housing fraud

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AUSTIN, Texas (12/31/07)--University FCU (UFCU) in Austin is helping 10 Hispanic families who were victimized by a homeownership scam. UFCU said it will provide mortgage loans to help the homeowners keep their properties. The credit union will charge the mortgage portfolio interest rate it offered at the time the loan applications were first prepared in fall 2006. The homeowners will pay only the remaining balance on their homes. “This will secure the homes in the occupants’ names at a substantially lower price,” said Yvonne Noack, UFCU mortgage lending officer. “They won’t lose their property.” The homeowners had bought the properties several years earlier in what turned out to be a scam, operated by Robert L. Flores Jr. of Cedar Park, said the credit union. Flores and his company, Galindo Trust, were successfully sued by Texas Attorney General Greg Abbott, and permanent injunctions with civil penalties totaling $1.4 million were ordered against the defendants in May. The scam targeted Hispanic buyers who do not speak English. Some of the buyers did not have Social Security identification or other documents normally required of homebuyers, Abbott said, according to the credit union’s press release. In the scam, Flores’ company sold homes that he bought as a group from Shriners Hospital, which financed his purchase. Flores then re-sold the homes but did not tell buyers of the pre-existing liens he owed. He also collected for taxes and insurance but failed to pass on the families’ payments. The credit union has $840 million in assets.

Another CU difference shows up--in elderly abuse case

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ANTIOCH, Calif. (12/31/07)--When an 82-year-old member was being bilked by an acquaintance of his life savings in his accounts at a credit union and three banks, the banks stood by and watched. The credit union, however, proved once again the credit union difference: It intervened. Antioch Schools FCU, Antioch, Calif., was cited in an editorial in (Dec. 27) about California's new law requiring mandatory reporting of possible financial abuse against elderly consumers. Before the law was a gleam in legislators' eyes, the credit union was investigating a series of withdrawals from member Jack Whittaker's account at the credit union. A $23,065.58 wire transfer from Whittaker's savings account was the starting point. A day after the money left his account, he visited the credit union to make a withdrawal and found out the money had gone to purchase an annuity he knew nothing about. Whittaker hadn't touched the account in five years, but in April 2005, he began withdrawing hundreds of dollars at a time. A younger man accompanied him, and credit union CEO Robert Greaff didn't believe the man's claim that he was Whittaker's caretaker. On Dec. 14, 2005, Whittaker visited the branch for another withdrawal, and the teller, who saw red flags on the account, asked what he wanted the funds for. He didn't know. Greaff contacted authorities about his suspicions. Greaff also contacted Allianz Insurance Co. of North America, got the wire transfer reversed, and set up an eight-month surveillance on Whittaker's account. That led to 10-year prison sentence for the companion, Joe Gonzales, for elder theft. Gonzalez had befriended Whittaker, who lived alone and had no family in the area. Over a year, Gonzales drained four bank accounts and ran through more than $100,000 of Whittaker's savings. He stood to inherit the man's home and annuities he persuaded Whittaker to buy from an associate. "Legally, the Antioch Schools FCU didn't have to do anything. The mandatory reporting law hadn't gone into effect yet. Employees could have looked the other way," said the article. It continued: "Bank of America didn't alert anyone while Gonzales was raiding Whittaker's account there. Neither did Citibank. Nor Wells Fargo." The editorial also noted, "It's a shame that we even need a law to compel people to do what is so clearly the moral thing to do."

West Texas CU issues loan interest rebate and dividend

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EL PASO, Texas (12/31/07)--West Texas CU issued an interest rebate and a dividend totaling more than $745,000 to members. The interest rebate will go to members who paid interest on their loans during 2007. The rebate amount was a percentage of the interest that members paid on their loans. The $74.6 million asset, El Paso-based credit union also issued a bonus dividend to members who were paid dividends on their accounts in 2007. The bonus dividend was a percentage of dividends that members earned in their accounts.

Missouri Corporate announces 100000 bonus dividend

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ST. LOUIS (12/31/07)--Missouri Corporate CU will pay out a bonus dividend of $100,000 to its member credit unions today. “We really had a great year this year,” Kitty Gray, Missouri Corporate chief financial officer, told . “We wanted to pass on as much to our members as we could. We’re really excited about the $100,000 dividend to be paid today.” Missouri Corporate also declared a 6% dividend to all Paid-in-Capital holders for the fourth quarter. “We wanted to maintain that high rate of return we paid in the third quarter to our members for the Paid-in Capital holders,” Gray said. The St. Louis-based Missouri Corporate CU has served member credit unions through investment strategies and support services since 1977.

Thirsty robbery suspect arrested at convenience store

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HARRISBURG, Pa. (12/31/07)--A thirsty robbery suspect’s decision to stop for a drink at a convenience store shortly after an attempted credit union robbery resulted in his arrest. After allegedly attempting to rob the Blue Chip FCU in Harrisburg, Paul Risser, 35, stopped about a half-mile away at the Turkey Hill Mini Mart where he and a friend bought a beverage. Risser was promptly arrested by police (Life is a Highway Dec. 28). Risser was charged with Wednesday’s robbery attempt, as well as three other robberies: Dec. 2 and Dec. 11 at Blue Chip FCU, and Dec. 20 at Mid Penn Bank in Steelton, according to police. He was in Dauphin County Prison in lieu of $100,000 bail, officials said. Mary Lynn Tylenda, Blue Chip CEO, told the Pennsylvania Credit Union Association a robber stole cash during the Dec. 4 and Dec. 11 robberies. After the second robbery, the credit union kept the doors locked during business hours and added several forms of security, including guards stationed in the lobby. Other precautions included allowing only individuals who could be identified inside the credit union, and requiring individuals to remove sunglasses and hoods before entering. When Risser arrived at the credit union on Wednesday, he noticed a security sign on the door and departed. The security guard and staff recognized him and called police. The guard chased Risser and identified his vehicle, which police found at the convenience store. Tylenda said she appreciates the efforts of her staff and thanks members for their patience in dealing with the beefed-up security. Only one member complained about heightened security, but once the situation was explained, he apologized for complaining, she said. Some members have volunteered to be stationed in the credit union lobby to help with security, Tylenda added.

CUNA closed on New Years Day no News Now

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WASHINGTON and MADISON, Wis. (12/31/07)--The Madison, Wis., and Washington, D.C., offices of the Credit Union National Association will be closed Tuesday in observance of New Year's Day. News Now will not publish Tuesday but will resume regular publication on Wednesday.

IUSA TodayI CU holiday clubs help avoid spending hangovers

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MADISON, Wis. (12/31/07)--Credit unions looking to help their members avoid holiday spending hangovers should encourage them to set money aside in Christmas Club accounts for next year’s holiday season. USA Today has cited Credit Union National Association (CUNA) statistics about credit unions offering the accounts. With Christmas Club or similar holiday club accounts, credit unions deduct select amounts from members’ paychecks and set the money aside in a separate fund that can be used for holiday spending. Alberto and Marta Zamora, members of Landmark CU in New Berlin, Wis., set aside $70 per month for their Christmas Club account earlier this year. The money was automatically deducted from their paychecks. In October, the money was transferred to their checking account so the couple could start shopping. The clubs are “convenient,” and the couple “doesn’t have to worry” about buying presents for family because they’ve already saved for the Christmas season, Alberto Zamora told the Milwaukee Journal Sentinel (Dec. 11). An article published Friday in USA Today also emphasized the benefits of credit unions' Christmas Club accounts. The article cited the CUNA as saying three-quarters of the nation’s credit unions offer the accounts. The average consumer planned to spend $923.26 this year, according to BIGresearch and the National Retail Federation. If consumers set money aside for the holidays through Christmas Club accounts, they can “have a debt-free Christmas next year,” Gail Cunningham, spokesman for the National Foundation of Credit Counseling, told the newspaper.

Presidential candidate speaks at CU museum

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MANCHESTER, N.H. (12/28/07)--Former Massachusetts Gov. and Republican presidential candidate Mitt Romney made a campaign speech Thursday at America’s Credit Union Museum in Manchester, N.H.
Mitt Romney speaks at America's Credit Union Museum while on the presidential campaign trail.
From left are U.S. Sen. Judd Gregg (R-N.H.), New Hampshire Credit Union League President Dan Egan, Ann Romney and Mitt Romney. (Photos provided by the New Hampshire Credit Union League)
Romney began his speech by addressing the assassination of Pakistan’s former Prime Minister Benazair Bhutto, who was killed Thursday morning. He focused the remainder of his speech on his belief that family values and the work of the American people are the solution to challenges that the nation faces. He indicated that American people and independent enterprise are the best resources for addressing the issues that the nation faces. After his speech, Romney held a press conference at the museum. Romney then joined his campaign staff; U.S. Sen. Judd Gregg (R-N.H.); his wife, Ann; Dan Egan, New Hampshire Credit Union League president; and Peggy Powell, executive director of the museum, for lunch.

CU System briefs (12/27/2007)

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* RALEIGH, N.C. (12/28/07)--Coastal FCU has launched a full-service real estate firm, Daymark Realty, serving the Triangle area. Daymark, which will operate as a wholly owned subsidiary of the $1.8 billion asset credit union, was formed through the credit union's partnership with existing realtors. It has seven licensed realtors and will be managed by broker-in-charge Louis Guillama and realtor Michael Laino … * MANCHESTER, N.H. (12/28/07)--St. Mary's Bank, the nation's oldest credit union, has pledged $30,000 to the Boys & Girls Club of Manchester's "Building Better Lives" Capital/Endowment Campaign. The goal of the $6.6 million campaign is to help the club expand to meet a recent surge in demand for services. The credit union's gift will help the club construct a new 15,000-sq. ft. facility, renovate its existing facility, and maintain and enhance its programs. Posing with children at the club are, from second-left in back row: Ronald J. Rioux, president/CEO of St. Mary's Bank; Gary Frost, executive director of Boys & Girls Club of Manchester; and Tom Champagne, director of community outreach at St. Mary's. (Photo provided by St. Mary's Bank) … * EAST HARTFORD, Conn. (12/28/07)--A $10,000 reward is being offered by CUNA Mutual Insurance Co. to anyone providing information that helps solve a Nov. 20 robbery at East Hartford FCU, said Connecticut police. Three teenagers who fled Manchester police last month were questioned and are no longer suspects in the robbery, which occurred at 9:45 a.m. One man wore a Halloween mask, and another wore a ski mask. They jumped the counter and demanded money. About six people were in the credit union, but no one was injured. The suspects got away in a stolen car, which was found abandoned later (The Hartford Courant Dec. 22) … * FRESNO, Calif. (12/28/07)--A Former Tucoemas FCU member service representative has been indicted in a $48,000 embezzlement from the credit union by a federal grand jury, according to the U.S. Attorney's office. Tamara Navarrette, 27, of Visalia, Calif., is charged with embezzlement from a credit union prior to April 2005 while she worked in the credit union's Whitendale and Cypress branches. Accounts embezzled were from older members, ranging in age from 65 to 97 years. If convicted, she faces a maximum 30-year sentence in prison and a $1 million fine (US Fed News Dec. 20) … * HARAHAN, La. (12/28/07)--Carolyn Ricks, director of compliance and credit union development at the Louisiana Credit Union League, died Dec. 25 at a hospice center in Harahan, La. She was 63. Ricks was employed by the league for nearly 30 years and assisted credit unions throughout the state with research and compliance information. She also served as a director on the league's board. A memorial service will be at noon Dec. 31 at Lamana-Panno-Fallo Funeral Home, 1717 Veterans Memorial Blvd., Metairie, LA. A wake will be held from 10 a.m. until the service. In lieu of flowers, memorials may be made to St. Mark's United Methodist Church, 1130 N. Rampart St., New Orleans, LA 70116 …

CUs catch the holiday spirit

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MADISON, Wis. (12/28/07)--There was no loss of holiday spirit among credit unions this holiday season--many helped out with special community projects, or with their own employees. In addition to giving holiday bonuses, Fairwinds CU in Orlando, Fla., also granted its employees holiday wishes (Orlando Sentinel Dec. 25)
Northwest FCU, Herndon, Va., collected more than 175 new, unwrapped toys for Northern Virginia Family Services’ annual holiday toy drive. From left are: Juri Valdov, Northwest FCU president/CEO; Laura Dawson, Northwest FCU Foundation chairman; and Linda Rogus, Northwest FCU Foundation managing director. (Photo provided by Northwest FCU)
For the past five years, Fairwinds employees have posted their wishes on a company Intranet page, starting in mid-November, for all to read. President/CEO Larry Tobin, who started the Holiday Wish program, reads all the wishes--230 this year--and chooses those he thinks the credit union should fulfill. This year, the credit union granted nine employees’ holiday wishes. One recipient was Lorena Rodriguez, 22, who recently gave birth to a baby boy. Because Rodriguez’s husband remains in Mexico, she wished for the money to fly there so that the family would be together during the holidays. Smaller requests, such as an article of clothing, are often granted by co-workers or managers. This year, more than 50 Fairwinds employees used their $100 bonuses to help a co-worker burdened by debt. Other credit unions also pitched in this holiday season to help those in need. Wescom CU of Pasadena, Calif., “adopted” 150 children in Southern California. About 100 of the credit union’s employees bought 450 gifts for the children, which were distributed through local charities. Employees gave the children gift cards, clothing and toys (San Gabriel Valley Tribune Dec. 20). CU Community CU in Springfield, Mo., adopted a second-grade class at a local elementary school. The children at the school come from low-income families and most qualify for free or reduced lunches. The credit union collected $2,500 in cash and donated gifts to the children. The credit union also treated the children to a holiday party Dec. 12 with Santa and Mrs. Claus. “It’s an indescribable feeling to see the looks on their faces when they open the gifts,” said Susie Kasterke, vice president of operations (CourierNet Dec. 19).
Numerica CU, Spokane, Wash., raised $19,165 for a local charity at the credit union’s annual employee auction. Erynne Hallock, Numerica training coordinator, displays one of the items donated by an employee for the auction. (Photo provided by Numerica CU)
Credit unions also held clothing drives to collect mittens, scarves, coats and other items to help those in need. AmeriCU CU in Rome, N.Y., held a Mitten Challenge to collect gloves, hats, mittens and scarves for the Salvation Army (Post Standard/Herald-Journal Dec. 3). DuTrac Community CU and Dupaco Community CU in Dubuque, Iowa, held clothing drives for the needy. Dupaco collected more than 3,300 garments through its “Coats for Kids” drive. FirstLight FCU in El Paso, Texas, collected shoes for 242 children, and Franklin Mint FCU in Broomall, Pa., raised $1,000 for Operation Warm, which provides new winter coats for children. Members of America First CU, Ogden, Utah, donated $40,000 to charitable organizations throughout the state. Service CU in Portsmouth, N.H., donated $30,000 in gift cards to help military families. In addition to sharing gifts, credit unions also shared the message of People Helping People. United Labor CU in Kansas City distributed a holiday music CD with eight songs and a two-minute message from the credit union. The CDs were given to local labor organizations and media outlets in Kansas City. United Labor representatives gave out the CDs Dec. 14 during a holiday party, which U.S. Rep. Emanuel Cleaver II (D-District 5) and former Kansas City Mayor Kay Barnes (D) attended.

Peer-to-peer lending challenges traditional lenders

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MADISON, WIS. (12/28/07)--The concept of borrowing from peers rather than from financial institutions or credit card companies is gaining broader acceptance, but worries some lenders. Peer-to-peer (P2P) lending is offered by a few companies with each providing different twists in service (USA Dec. 26). The main reasons that borrowers turn to P2P lending are to obtain lower interest rates than most financial institutions offer and to avoid amassing credit card debt, according to a Javelin survey conducted in November. Zopa is a United Kingdom-based P2P lender that began operating in the U.S this month. It has an unusual lending model that allows borrowers with good credit to obtain a loan from one of six credit unions that partner with Zopa. Members who want to earn interest on their savings can purchase one-year Federal Deposit Insurance Corporation-insured certificates of deposit (CD) from the credit unions. The CDs pay interest rates up to 5.1%. However, the American Bankers Association (ABA) said P2P lending circumvents the operations of financial institutions by linking borrowers directly to lenders. ABA said the banking industry is monitoring this situation. The upshot is that the growth of the P2P market could be a threat to unsecured lenders--especially credit card issuers--who will have to become more competitive with rates and rewards offered to customers, said ABA.

Service CU offers website in English Spanish German

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PORTSMOUTH, N.H. (12/28/07)--Service CU launched a new website Dec. 20 that offers complete Internet banking services in members’ three major languages--English, Spanish and German. The $1.081 billion asset, Portsmouth-based credit union worked with Port City Web--a Greenland, N.H. provider of eCommerce solutions--and Ektron--a Nashua, N.H. provider of content management solutions, to create the website (ENP Newswire Dec. 20). Features of the new site include a financial education center, fully automated online account opening and funding, market indices, and a relocation center for military members. The site also offers instant decisions on loans, including mortgages and home equity loans. “Our members are on the move, whether they are on a military base in Texas, Germany or Italy, or raising a family in New Hampshire,” said Gordon Simmons, president/CEO of Service CU. “More importantly, we are communicating to members in their languages they may be using in the home setting, enabling them and their families to gain an understanding of the financial options available to them--from early-pay loans, to high-yield money market accounts, to low-cost auto and mortgage loans,” he continued.

Delaware newspaper notes CU v. bank battle

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WILMINGTON, Del. (12/28/07)--Credit unions “keep a brake on banks,” according to an article published by a Delaware newspaper commenting on the ongoing debate between banks and credit unions. Credit unions offer their members lower fees and better returns on savings than banks, the article said (Gannett News Service Dec. 27). Banks would raise their fees even more if credit unions didn’t exist, Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group told the newspaper. Banks argue that credit unions have abandoned their original mission and should be taxed. But unlike banks, credit unions do not have shareholders and are not for profit. Credit unions also use their earnings to pay dividends to members, the newspaper stated. Credit unions are owned by members and are run by a board of directors made up of volunteers from the credit union’s membership. It’s a different atmosphere, said Patrick Mahaney, president/CEO of the Delaware Credit Union League.

CUNA open Monday but closed Tuesday

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WASHINGTON and MADISON, Wis. (12/28/07)--The Credit Union National Association's (CUNA's) Washington, D.C., and Madison, Wis. offices will remain open on Monday, Dec. 31, and will be closed Tuesday in observance of New Year's Day holiday. News Now will publish on Monday, but not on Tuesday. It will resume its regular publication on Wednesday.

Conservationists question building CU in greenspace

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ERIE, Pa. (12/28/07)--Conservationists in Erie, Pa., are questioning the sale of some of the city's proposed greenspace to Erie FCU for construction of a branch office. The city had commissioned a study of enhancing the green space along the Bayfront Connector. When it announced it was selling 1.5 acres to the $244.4 million asset credit union for $273,3000, conservationists complained (Erie Times-News Dec. 22). Mayor Joe Sinnott said the parcel's size lends itself to commercial use. The credit union is needed there and it wouldn't interfere with other greenway plans, he added. Norb Kaczmarek, CEO of Erie FCU, noted the credit union will spend "a good amount of money on landscaping and making it look nice. Our record of landscaping our existing buildings is second to none. We also recognized the need to create jobs and create a tax base." Kaczmarek also noted that a financial institution is needed in the area and it was a nice investment for the area.

CUs join to start East Palo Altos first CU

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EAST PALO ALTO, Calif. (12/28/07)--Four California credit unions formed a partnership to open the first credit union in East Palo Alto Dec. 19. The new Community Trust CU, officially a branch of Modesto-based Community Trust CU, will hold a grand opening in January (Silicon Valley/San Jose Business Journal Dec. 19). The new credit union is the result of a partnership among the $48.5 million asset Community Trust CU; the $2.009 billion asset, Palo Alto-based Addison Avenue FCU; the $826 million asset, Palo Alto-based Stanford FCU; and the $4.278 billion asset, San Francisco-based Patelco CU. Addison Avenue helped underwrite the early development of the new credit union branch by purchasing a three-year interest-free $100,000 certificate of deposit and by contributing startup capital. Community Trust, due to its work with traditionally underserved communities in the area, offered its name and experience as a community development financial institution to the new credit union.

CUs remote deposits double in one year

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PLANO, Texas (12/27/07)--Credit unions squeezed by increased expenses related to processing paper checks are discovering the cost-saving efficiencies of remote deposit services, says Southwest Corporate FCU. "This past year has seen an explosion of adoption (of the services)," said Jody Beck, senior vice president of operations at the corporate (eFACTS Dec. 26). Beck predicted that 2008 would be even busier. Southwest Corporate, one of the nation's largest payment services providers, said its statistics help illustrate a nationwide trend. In November 2006, roughly 134 credit unions, representing 548 branches, had signed up for the corporate's remote deposit service. A year later, the number has grown to 331 credit unions, with 1,177 branches in 27 states. Transactions also increased to more than five million in November 2007 from 2.5 million in November 2006. Beck, noting the service had doubled during the past year, put the numbers into context: "this is a service that didn't even exist three to four years ago." Credit unions using the remote deposit service scan the checks in batches and send the check images to Southwest Corporate, which completes the process. The credit unions no longer spend time and money encoding checks. The checks are cleared and the image is archived for online member access. Beck outlined the advantages of capturing deposit actions at the point of entry: faster identification of fraudulent activity and customer deposit errors, a reduction of lost checks during transport, and no microfilming needed. In 2006, more than two-thirds of all noncash payments in the U.S. were made electronically, according to the Federal Reserve's 2007 study of noncash payments. About 19 billion more electronic payments were made in 2006 than in 2003. The number of checks during that period fell by seven billion. With about 33 billion checks written in 2006 in the U.S., check processing will remain important. However, said Beck, the way the checks are processed will continue to change. "In this case, change is good," she said. "Lots of credit unions are going to save lots of money by processing checks electronically."

Delinquent credit card accounts increase

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SAN FRANCISCO (12/27/07)--With Americans deeper in credit card debt that they were a year ago, credit unions may want to keep tabs on their members' accounts and step up financial counseling and education efforts before others reach the delinquency point. Credit card accounts are entering delinquency at a faster rate, with serious delinquencies growing at the highest rate, says an Associated Press (AP) analysis of data from the nation's largest card issuers (The Wisconsin State Journal Dec. 24). Until recently, credit card default rates were at near-record lows. Analysts, who studied detailed monthly filings with the Securities and Exchange Commission of 17 large credit card trusts, blame the deterioration of household credit on leakage from the subprime mortgage crisis. The greatest increases--50% or more--were reported for accounts more than 90 days overdue by lenders such as HSBC, GE Money Bank and Advanta. In October, accounts that were at least 30 days late jumped 26% to $17.3 billion from a year ago. That accounts for more than 4% of the total outstanding principal balances owed to the trusts on credit cards issued by large banks and retailers. Defaults rose 18%--to almost $961 million--during October, according to filings made by the trusts with the Securities and Exchange Commission. The data represent roughly 325 million individual accounts held in trusts that were created by credit card issuers to sell the debt to investors. The accounts represent about 45% of the $920 billion that the Federal Reserve counts as credit card debt owed by Americans.

22 receive CUNAs financial counselor designation

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MADISON, Wis. (12/27/07)--Certified Credit Union Financial Counselor (CCUFC) designations were awarded to 22 people by the Credit Union National Association (CUNA) in December. This is the fourth class to receive the certification. Participants attended CUNA’s Certified Financial Counselor School: Parts I and II and successfully completed the exams to receive the designation. The program teaches how to help members prevent financial difficulties with responsible money management techniques, as well as how to design and implement a credit union financial counseling program. Certified Financial Counselor School: Part I and the new Advanced session will be offered beginning March 30 in Miami. A two-part self-study version of the program--the Credit Union Financial Counseling Certification Program (CU FiCEP)--is also available. To view the list of new CCUFC designees or for more program information, use the resource links.

Medias advice for 08 includes joining a CU

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WASHINGTON and NEW YORK (12/27/07)--Major media outlets are turning their financial focus to 2008 and offering consumers advice. Two well-known media--Dow Jones News Service and The Washington Post--have included credit unions in their suggestions. In The Washington Post (Dec. 23), a financial adviser tells about a woman who earns $44,000 a year and wanted to pay off $4,500 on her credit card plus save at least three months of her living expenses, but who was thwarted in her goal when her 15-year-old car died. Among the suggestions: Figure out what she could afford in a car payment every month and "join a credit union." "Credit unions typically offer lower auto financing rates than banks or dealers." She joined a credit union and was approved for a 48-month loan at 5.99%, "much less than the rates quoted by her bank." In Dow Jones (Dec. 26), columnists Gail Liberman and Alan Lavine told "How to Reap Greater Benefits from Your Bank in 2008." Among their tips: credit unions "tend to be cheaper" in ATM fees; protect your online account by using a credit union or bank with a good record of reimbursing accounts; and "Credit unions often have lower rates than banks on car loans and other types of loans." Liberman and Lavine also suggested a consumers to use in locating a credit union.

Survey Credit concerns not limited to mortgages

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CHANTILLY, Va. (12/27/07)--If there were ever a time your members needed help with setting their budget priorities, it's now. Yet another nationwide survey documents that credit concerns for consumer households aren't limited to mortgages. The mortgage sector's woes are spilling over into the broader economy and affecting consumers' ability to pay all their bills, according to a survey of more than 1,000 U.S. households by Online Resources Corp. Americans increasingly are being forced to prioritize among their bills by creating a "delinquency budget" to determine which bills get paid. While mortgage bills are the bill households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. The survey found:
* One out of four households reported they were delinquent on at least one bill by at least 30 days; * If forced to choose between which bills to pay, 98% would likely pay the mortgage first; * Credit card, phone, healthcare, utility and loan payments are among the bills least likely to be paid.
Online Resources, a provider of web-based financial services, also surveyed clients--including credit unions--from its biller end-point network. Most respondents reported a negative impact already from the consumer credit crunch. Only 2% of the companies surveyed expect it to be easier to collect payments in 2008, and 84% expect to spend more on collections efforts. Both surveys point to a disconnect between billers and consumers about how consumers prefer to resolve their delinquencies. Most consumers surveyed prefer to make delinquent payments over the web because of its convenient and nonconfrontational nature. However, only 8% of billers offer online collections services beyond accepting payments that would allow consumers to resolve the delinquency. "Today's challenging credit environment could pose a serious risk to companies in all recurring-bill industries and their ability to carve out a priority spot in consumers' budgets," said Matthew P. Lawlor, chairman/CEO of Online Resources. "Billers who provide consumers with more options to resolve their delinquencies will have a distinct advantage in competing to win a priority share of the delinquency budget and also retain valuable consumer relationships."

Small businesses to increase tech spending in 08

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MADISON, Wis. (12/26/07)--Sixty percent of small businesses surveyed plan to increase their technology spending in 2008, and credit unions serving small business members may want to monitor this trend. According to an online customer survey conducted by communications provider RingCentral Inc., based in Redwood City, Calif., only 6% plan to decrease their tech spending, while 31% hope to maintain their current spending level (Business Wire Dec. 18). That means small businesses may look for financing for personal computers (PCs) and upgrades, to address data security issues, to enhance their communications capabilities, and to manage their systems. Credit unions can stand at the ready to offer the loans for such projects. Small businesses' spending will focus on PCs (57%) and communications service. Small businesses surveyed considered these communications technologies the most important for their business:
* E-mail, 81%; * Mobile phone, 77%; * Business phone, 69%; and * Website, 61%.
More than one-third of small businesses surveyed plan to invest in phone systems, smart-phones and Voice-over-Internet Protocol (VoIP) technologies.

CUs Poinsettia Bowl gets good marks

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SAN DIEGO (12/26/07)--The Poinsettia Bowl college football game played Thursday night between Navy and Utah was sponsored by San Diego County CU and received high marks from a sports-fan blogger. On the blog, FANHOUSE, one blogger stated: “If I ever find myself living in San Diego County, and I need a good credit union, it’s damn sure going to be the San Diego County CU, because no other credit union in San Diego County can put on a bowl game like the folks at the San Diego County CU” (The Debriefing at AOL Sports Dec. 21). The blogger wrote about how exciting the back-and forth game went, with Utah finally winning, 35-32. The highly competitive bowl game kicked off the 2007-2008 college football schedule of 32 Division I bowl games.

Ohio CUs participate in payday loan hearing

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SOUTH CUMMINSVILLE, Ohio (12/26/07)--A public hearing on payday lending in Ohio was held Dec. 19, with credit unions participating and spotlighting some of their alternatives to payday lending. Hearing testimony was given at the headquarters of Working in Neighborhoods in South Cumminsville, with Ohio Attorney General Marc Dann serving as the hearing’s coordinator (The Cincinnati Enquirer Dec. 20). Dann said in an interview that he believes that the payday lending model is broken from the consumers’ standpoint. Questions at the hearing often returned to alternatives to payday lending, such as the $1.226 billion asset Fairborn, Ohio-based Wright-Patt CU’s short-term loan program. Wright-Patt CU CEO Douglas Fecher explained that “StretchPay” loans, offered by several credit unions, charge a $35 fee for unlimited yearly access to a $250 loan, with an 18% annual percentage rate. Members take out about nine of these loans per year on average, often to pay off payday loans, Fecher added.

CU System briefs (12/21/2007)

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NAPERVILLE, Ill. (12/26/07)--More than 20 credit union executives from Mexico braved winter in the Midwest to visit the Illinois Credit Union League. The group also toured and met with staff at Members United Corporate FCU, Credit Union 1, and NorthStar CU. At a league meeting, staff provided an overview of its services. Two staffers from the World Council of Credit Unions accompanied the group, shown here with league President/CEO Dan Plauda, in middle back row in front of the flag. (Photo provided by the Illinois Credit Union League) … * HARRISBURG, Pa. (12/26/07)--Mennonite Financial FCU, based in Lancaster, Pa., granted $23,000 to 15 church and charitable organizations this year. For the past 12 years, the $80.2 million asset credit union has tithed 10% of its interchange income from its Visa card program for the grants, said the Pennsylvania Credit Union Association (Life is a Highway Dec. 20). Since the program began in 1995, the credit union has offered $210,000 in grants … * MACON, Ga.(12/26/07)--Two suspects in a Dec. 6 robbery of Robins FCU, Warner Robins, Ga., were arrested in Matamorors, Mexico, Dec. 19, along with a suspected accomplice in another robbery (Macon Telegraph Dec. 21). Anthony Scott Chairmont, 27, and John Welborn Smith, 56, both of Warner Robins, are suspects in the credit union robbery. Aleesha LaShae Aysh, 17, is a suspect in a bank robbery. The group are also suspects in the robberies of two Louisiana banks, committed on the way to Mexico. They are in jail in Brownsville, Texas … * BUFFALO, N.Y. (12/26/07)--A Buffalo man was sentenced to nearly six years in federal prison for the Oct. 12, 2006, armed robbery of St. John's Buffalo FCU. Adrian Applewhite, 20, pleaded guilty in August to a felony robbery charge. He was also ordered by U.S. District Judge William M. Skretny to make restitution of more than $14,000. During the robbery, three men burst into the credit union's office, one of them waving a handgun. The other two men are still at large (Buffalo News Dec. 20) … * BANGOR, Maine (12/26/07)--Charles E. Noddin, former chairman and vice chairman of Katahdin FCU, Millinocket, Maine, died Dec. 19 at the age of 75, while visiting relatives in Georgia. Noddin worked 36 years for Great Northern Paper Co., Millinocket, until his retirement in 1986. He was a board member of the credit union for 28 years (Bangor Daily News Dec. 21)…

CU donates funds after Scrooge steals gifts

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WOODBURY, Minn. (12/26/07)--Needy children from more than 100 families in the North St. Paul area were to have received toys for Christmas after Postal CU (PCU) donated $1,250 Dec. 19 to replace 20 bags of toys stolen the day before.
David Grupa, left, was collecting holiday toy donations for an elementary school from North St. Paul businesses when his vehicle was stolen. Postal CU employees Patty Kamas and Doug Zakrewski presented 50 $25 gift checks to Grupa and Webster Elementary School social worker Judy Aubrecht, right, to replace the toys. (Photo provided by Postal CU)
David Grupa was collecting holiday donations from North St. Paul businesses Dec. 18 on behalf of Webster Elementary School when his vehicle was stolen. Though his SUV was later recovered, the toys were gone. PCU donated 50 $25 gift checks to Webster Elementary School to replace the toys. The school collected toys donated from local businesses as a part of the North St. Paul Area Holiday Drive. “Part of PCU’s mission is to help people in the communities we serve,” said PCU President Russ Plunkett. “We were glad to assist in replacing gifts for those less fortunate.”

IT budgets beef up security spending

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MADISON, Wis. (12/26/07)--While an information technology (IT) survey conducted by Boston-based Aite Group earlier this year indicated that community banks are spending more money on technology to protect consumer data, credit unions also are beefing up their security spending. Nationwide, overall spending for IT hardware and software should grow by 5%, according to Forrester Research Inc. estimates. Those estimates were lowered from Forrester’s October projections that said spending would grow by 8% (Computerworld Dec. 13). IT spending nationwide for computers, software and communications equipment is projected to top off at $377 billion this year, and is estimated to increase to $304 billion in 2008, according to the Cambridge, Mass.-based firm. Total IT spending--which includes expenditures for hardware, software, IT salaries and outsourcing--is estimated to be $775 billion this year, and will go up to a projected $815 billion next year, according to Computerworld. “The security dilemma is a balancing act between security and user friendliness,” stated the 2007-2008 Credit Union Environmental Scan (E-Scan). “The more secure your systems, the less inviting they are to members. It’s possible to build a system so secure that no one would use it.” E-Scan made these security recommendations for credit unions:
* Stay informed about new security threats by reading industry publications and websites, attending conferences, and working with peers. Keep an eye on data security proposals in Congress. * Don’t assume the credit union is immune to attack. One security company saw 67% more attacks attempted against its credit union clients than against its banking clients between February 2005 and March 2006. * Focus on the big picture and weigh the need for security from electronic threats with other needs and the value of what you’re securing. * Use a layered approach to security to more effectively secure sensitive data. Make the credit union’s security as user-friendly as possible. * Offer security training for employees. This is critical--they need to know their specific responsibilities and duties regarding information security. * Don’t overlook physical security in the rush to block electronic attacks. The best firewall is useless against a thief masquerading as a vendor who walks out with a hard drive containing member data. Lock computers that aren’t in use, and keep systems behind locked doors.
Currently, the Credit Union National Association (CUNA) is conducting field research for CUNA’s 2008 Technology and Spending Survey Report, according to Steve Rodgers, editor-in-chief of CUNA’s E-Scan. The full report will be available in February, Rogers said.

Former Harrisburg CU CEO pleads guilty to fraud

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HARRISBURG, Pa. (12/26/07)--The former CEO of a defunct community development credit union in Harrisburg, Pa., pleaded guilty Thursday to making false statements to federal officials and conspiring to defraud the U.S. Department of Housing and Urban Development (HUD). Carl Payne, 66, who was CEO of the defunct Greater Harrisburg Community CU as well as the Harrisburg Housing Authority (HHA), pleaded guilty in U.S Middle District Court to two misdemeanor counts ( Dec. 20). The other person involved in the conspiracy to defraud was not named in court records but is a person known to the U.S. Attorney's Office. Payne, who recently resigned as executive director of HHA, had faced as much as five years in prison on each count. His guilty plea changes that to a maximum two years' in prison and a $200,000 fine. As part of the plea bargain, Payne agreed not to have any involvement with procurement activities involving HUD or conduct any business with HHA for five years. He was charged with creating and backdating documents to obstruct the federal grand jury's investigation into how $500,000 of federal money was moved from the housing authority to the credit union. The diversion was discovered during an investigation by HUD and the Federal Bureau of Investigation. He also was charged with lying about receiving about $134,000 from the housing authority for his work with the credit union. The $1.7 million asset credit union lost more than $264,000 during the first three quarters of 2005 and in 2004 had a net profit of $3,737. It was declared insolvent on Feb. 3, 2006 (News Now Oct. 4, Feb. 14 and Nov. 26). Judge John E. Jones III set a March deadline for a presentence report. Payne was released after the hearing on his promise to appear for future proceedings.

Barden Matous named California unsung heroes in California

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RANCHO CUCAMONGA, Calif. (12/26/07)--The late Lance Barden and Margaret "Maggie" Matous of Oakland have received "Unsung Hero" awards from the California Credit Union League's Historical Preservation Committee. The awards honor individuals with at least 20 years' service. Barden's 28-year career began when he was elected treasurer of the new Berkely Farm Credit Administration CU. He worked 22 years as a federal examiner for the Credit Union Section of the Farm Credit Administration (now the National Credit Union Administration). He organized more than 400 credit unions, including the first credit union in Nevada--Sierra Nevada Power FCU. In 1949, he organized the first eight credit unions in Alaska. He is the only federal examiner to organize a credit union league or trade association--the Hawaii Credit Union League in 1936. He also worked with the California league in a variety of volunteer and staff positions. Matous' career began in 1961 as an accounting manager for Aerojet FCU. She served nearly 25 years as CEO of what is now Schools FCU, Sacramento. She pioneered several programs, including one of the first share draft programs in the state; volunteered at the state and national level of the movement; served on advisory councils for the Filene Research Institute and Department of Corporations; and served on the Credit Union Executives Society board. In 1993, she became the league's director of special projects, implementing programs through the Shapiro Group and Filene Foundation to assist smaller credit unions and individual credit union employees. She also served as CEO of the Marin County FCU from 1994 until her retirement in 2000.

More CU phish tales surface

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MADISON, Wis. (12/21/07)--More phish tales from credit unions in three states surfaced this week, just as reports from a nationwide survey announced that 3.6 million U.S. consumers lost $3.2 billion in online phishing attacks this year. According to Stamford, Conn.-based research firm Gartner Inc., this year's loss figures are an increase from 2.3 million people who lost money last year. Gartner surveyed 4,500 online adults (United Press International Dec. 19). Meanwhile, credit unions and related organizations in Virginia, Pennsylvania and Ohio, were alerting their members about phish attempts.
* In Lynchburg, Va., Beacon CU was targeted when Cindy Kozerow, a crime prevention specialist for the Lynchburg Police Department, received a call before 6 a.m. Tuesday. The prerecorded message said Kozerow's credit union account had a problem and told her to visit a website and enter personal information. She recognized the call as a phish scam. A caller ID listed a Western Ways store in Lynchburg, but the call didn't originate from there or from the credit union (The News and Advance Dec. 20). * In State College, Pa., Penn State FCU's website alerted members that a message purporting to be from the credit union was a scam. The credit union said individuals with Penn State University e-mail addresses received messages with subject lines such as "Unauthorized Activity!" The e-mail messages told the recipients to click a link to a fake website (Penn State Live Dec. 18). * The Ohio Credit Union League alerted readers in its Dec. 19 eLumination Newsletter that a phishing e-mail on Dec. 7 claimed to be from the Ohio Credit Union System. It was sent to consumers' addresses and asked them to verify their credit union and member account by visiting a link and typing in their credit card and account numbers.
Each target emphasized it would never solicit financial and personal information via the Internet or telephone. Despite consistent media alerts about phishing attempts, the Gartner Inc. survey indicates many Internet users aren't heeding the message to avoid providing personal and financial information via unsolicited e-mails and callers (Washington Post Dec. 19). Of surveyed consumers who received phishing e-mails as of August this year, 3.3% said they lost money. That compares with 2.3% in 2006 and 2.9% in 2005. The average dollar loss per incident declined--to $886 from last year's $1,244--with a median loss of $200 in 2007. However, about 1.6 million respondents recovered about 64% of their losses, up from 54% that 1.5 million adults recovered last year. Of those who lost money, 47% said they used a debit or check card for online transactions. Also, 32% listed a credit card as the payment method, while 24% said they paid with a bank account.

TJX settlement approved by Visa FIs

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FRAMINGHAM, Mass. (12/21/07)--Financial institutions representing more than 95% of eligible U.S. Visa accounts potentially affected by The TJX Cos. data breach have accepted an alternative recovery offer under TJX's previously announced settlement, Visa told the Credit Union National Association (CUNA) Thursday. The settlement is with Visa U.S.A. Inc., Visa Inc., and TJX's U.S. acquiring bank. Completion of the deal was pending acceptance by 80% of the financial institutions. Under the settlement, TJX agreed to fund up to $40.9 million in alternative recovery payments. These costs are already reflected in the charge related to the computer intrusions that TJX took in its fiscal 2008 second quarter. Credit unions and other financial institutions that accepted the alternative recovery offer will receive their payments by Dec. 27. Each accepting issuer has waived certain rights to any other recovery through litigation or otherwise and provided certain releases of TJX and its U.S acquiring banks. "Ensuring that credit unions issuing Visa cards affected by the TJX data breaches were included in loss recovery efforts has been very important to CUNA," said Eric Richard, CUNA's general counsel, "and we have endeavored to assist our members as much as possible throughout this process to provide the latest developments as we learned of them. "This appears to be a good outcome for financial institutions, but we will continue to monitor the situation as the settlement is finalized," Richard said. CUNA discussed with credit unions their options for pursuing recovery of losses related to Visa cards involved in the TJX breaches, including the $40.9 million settlement with Visa and Fifth Third Bancorp, TJX's credit card payments processing bank. The agreement does not include other card associations such as MasterCard. "We do not have a reason to believe at this time that MasterCard will be offering a separate settlement but will keep credit unions posted on any further information we obtain from MasterCard," Richard said.

Arizona State CU grants 25000 to worker training program

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TUCSON, Ariz. (12/21/07)--Arizona State CU, Phoenix, announced that it is giving a $25,000 grant to benefit Tucson’s Community Housing Corp. The grant will help clean landfills, provide computer-skill training to the homeless, and provide used computer equipment to low-income neighborhoods. Workers will remove electronic waste from landfills, and then repair computers and return them to use. As they develop skills and gain certification, they will be employed part-time while the program helps them find full-time jobs. The computer equipment they repair will be provided to low-income neighborhoods at little or no cost. “This is a long-term solution that will add a significant number of marginalized individuals to the work force and provide them the opportunity to earn their way to a better life,” said Arizona State CU President/CEO David E. Doss. Pima Computer Recycling, a subsidiary of the housing corporation, approached the credit union with the worker training program. Pima’s goal is to help the marginalized--most workers will be referred from local homeless shelters. Through its membership with the Federal Home Loan Bank of San Francisco, Arizona State CU obtained the $2,500 Access to Housing and Economic Assistance for Development grant. The credit union then distributed the funds to Pima for the program. Arizona State CU has $1.1 billion in assets.

Payday lender quits Pennsylvania

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HARRISBURG, Pa. (12/21/07)--A payday lending company announced it is pulling out of Pennsylvania and will close its 66 stores currently operating in the state, says the Pennsylvania Credit Union Association (PCUA). Advance America, Cash Advance Centers Inc. closed 31 state offices in the third quarter after a state court forced it to cease lending in Pennsylvania (Life is A Highway Dec. 20). “We congratulate the [Pennsylvania] Banking Department on ridding Pennsylvania of this particular predatory lender,” said Jim McCormack, PCUA president/CEO. “Unfortunately, there are many others still operating in the state, which is why our Better Choice program is so desperately needed in the marketplace. “I would also like to congratulate the 63 Pennsylvania credit unions that offer the Better Choice program at 180 locations,” he added. Better Choice is the Pennsylvania credit unions’ low-cost payday lending alternative.

RMJ Foundation donates 106150 to financial ed efforts

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RANCHO CUCAMONGA, Calif. (12/21/07)--Recent community service grants given to credit unions will benefit youth in Santa Cruz County and immigrant college students in Southern California. The Richard Myles Johnson (RMJ) Foundation, the state foundation for credit unions in California and Nevada, gave $56,150 in community service grants to Orange County’s CU in Santa Ana and Santa Cruz Community CU in Santa Cruz. A second donation of $50,000 was made to season two of the Biz Kid$ television series. Orange County’s CU’s $40,000 grant will help the credit union’s partnership with two local organizations, including the Cerritos College Foundation in Norwalk. The Cerritos College Health Opportunity Pipeline for Education is designed to increase the number of underrepresented students in the health profession. It also includes a component developed by the credit union that offers community workshops on financial aid and investing in education. The credit union also is working with the Long Beach Community Hispanic Association program, which is scheduled to debut in spring 2008, to turn area youth into peer trainers for their communities. Part of the association’s Latinos Investing for Tomorrow program includes a financial literacy component developed by the credit union. Santa Cruz Community CU’s $16,150 grant will support the credit union’s new financial literacy program targeting foster youth in the county. The pilot program will begin with five of the area’s 35 to 40 youth on track to leave the foster care system as they get older. The goal is to teach youth how to manage a budget, living expenses, and accumulate savings. Participants also can open individual development accounts at the credit union. “We hope the initial group of foster youth will become the cornerstone of a successful literacy and savings program that will eventually reach more youth in our community,” said Ginger McNally, Santa Cruz Community CU CEO. The RMJ Foundation provides community service grants to support credit union efforts in spreading financial literacy to young people.

PCUAs Go Green effort spotlighted on TV

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HARRISBURG, Pa. (12/21/07)--The Pennsylvania Credit Union Association’s (PCUA) “Go Green” initiative was taped for television Wednesday. In a segment of “Pennsylvania Newsmakers,” the new environmentally friendly initiative was discussed by PCUA President/ CEO Jim McCormack and Pennsylvania Credit Union Foundation Executive Director Joe Wambach (Life Is A Highway Dec. 20). During the program, McCormack and Wambach discussed credit union programs already in place for hybrid auto loans, and how the PCUA will share information about other credit union “green” projects through its newsletter, Life Is A Highway. Wambach also will chair a task force to help credit unions implement environmentally friendly practices and activities. The segment, which is part of the PCUA’s monthly financial education sponsorship of the program, can be viewed throughout Pennsylvania from Jan. 5 through Jan. 8.

CU System briefs (12/20/2007)

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* DUBLIN, Ohio (12/21/07)--The Ohio Senate Finance and Financial Institutions Committee has recommended Senate confirmation of Gov. Ted Strickland's appointee to the state's Credit Union Council. Robin Thomas, CEO of $78 million asset Taleris CU, Cleveland, is the appointee (eLumination Newsletter Dec. 19). The seven-member council, part of the Ohio Division of Financial Institutions, meets quarterly and provides advice and recommendations on credit union issues to the regulatory agency. The council is chaired by Deputy Superintendent for Credit Unions Rose Bartolomucci. Other members include John Lattanzi, Credit Union One, North Jackson; Aaron Michael, Atomic CU, Waverly; Linda Williams, Akron Fire Fighters' CU; and Matthew Studer, Toledo Postal Employees CU … * HERNDON, Va. (12/21/07)--Northwest FCU Foundation donated $5,000 to Dranesville Elementary in Herndon, Va., to help fund professional staff development programs. NWFCU is in its fourth year as a school business partner and provides financial education to students and families through reading programs, student assemblies, staff development and resource materials. Pictured at the check presentation during a school assembly are, from left: Linda Rogus, managing director of the foundation; Lucinda Romberg, school principal, and Juri Valdov, NWFCU president/CEO and chairman of the foundation. (Photo provided by Northwest FCU Foundation) …

Ohio House committee working on three payday lending bills

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DUBLIN, Ohio (12/21/07)--Ohio House Financial Institutions, Real Estate and Securities Committee members recognized the benefit of credit unions during testimony for three payday lending bills two weeks ago. Many credit unions offer small short-term loans, said John Kozlowski, Ohio Credit Union League general counsel. However, the committee also recognized that credit unions’ scope is limited. Only 25% of Ohio’s population belongs to credit unions. “Not everyone is a credit union member nor is eligible to join a credit union in the area,” Kozlowski said. Currently, check cashers in Ohio can charge borrowers 5% interest each month on their loans, and two of the bills would seek to change limits on interest rates. The first bill, H.B. 333, sponsored by state Reps. Bill Batchelder (R-Medina) and Robert Hagan (D-Youngstown), would allow check-cashing lenders to charge 36% annually on loans. H.B. 358, sponsored by Rep. Tyrone Yates (D-Cincinnati), would allow lenders to charge 25% annually. H.B. 337, sponsored by Reps. Ross McGregor (R-Springfield) and Matt Lundy (D-Elyria), would maintain the current rate of 5% interest each month. The committee also considered a statewide database of loans outstanding by check-cashing businesses and financial counseling to help consumers. More hearings on the bills are expected in January.

Michigan raises small-CU threshold to 35 million

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NORTHVILLE TOWNSHIP. Mich. (12/21/07)--Trustees of the Michigan Credit Union Foundation have changed the asset-size threshold for small credit unions' eligibility for scholarships. The change, to $35 million from $20 million in assets, will make more credit unions in the state eligible for scholarship assistance. The trustees approved the management recommendation on Dec. 11, according to the Michigan Credit Union League (Michigan Monitor Dec. 17). The new standard raises the number of credit unions eligible for the foundation's $1,000 scholarships to 176 credit unions from 139 and aligns more closely with the threshold used by the Credit Union National Association. The change reflects the changing credit union marketplace, said Alan Babcock, league CU Strategic Solutions vice president. "As credit unions continue to grow, the industry threshold for small asset size (SAS) credit unions has also needed to keep pace," he told the Monitor. Will the foundation have enough funds to accommodate the scholarship requests of the new small-CU designees? Yes. The foundation budgeted additional grant funds in 2007 for SAS credit unions on a needs basis, but the funds weren't used, said Babcock. Reallocating part of the funds to the general scholarship budget will cover the expected increase.

State senator testifies on need for Ohio CU legislation

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COLUMBUS, Ohio (12/21/07)--Testimony on credit union modernization legislation in Ohio, Senate Bill 247, was conducted Dec. 13. Bill sponsor State Sen. Bob Spada (R-North Royalton) testified before the Ohio Senate Finance and Financial Institutions Committee (eLuminations Newsletter Dec. 19). Spada said the bill is intended “to help Ohio’s credit unions in their operations, administration and governance to better serve their members and communities.” Bill provisions relate to operational issues such as record keeping, ballots, payable-on- death accounts, merger requirements, and representation requirements for the Ohio Credit Union Council, an advisory group with the state’s regulatory agency. “These changes are based on issues raised this year by credit union officials, league staff, and the Ohio Division of Financial Institutions,” said John Kozlowski, general counsel at the Ohio Credit Union League. The committee is expected to hear further testimony when the state’s General Assembly returns from recess in January.

Eakes criticizes Feds late subprime action in INY TimesI

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NEW YORK (12/20/07)--The Federal Reserve Board could have stopped the subprime mortgage crisis earlier, Martin Eakes, CEO of the Center for Responsible Learning, told The New York Times Tuesday. The Times reported that several people tried to warn federal banking officials that the subprime mortgages were risky for borrowers. Among the clues of potential problems was a report by the center, which analyzed records nationwide and found default rates on subprime loans rose to 20% in cities where home prices stopped rising or started to drop. Eakes is quoted as saying, "The Federal Reserve could have stopped this problem dead in its tracks," and adding, "If the Fed had done its job, we would not have had the abusive lending and we would not have a foreclosure crisis in virtually every community across America." Former Fed Chairman Alan Greenspan told the Times the Fed was poorly equipped to investigate deceptive lending and that its policymaking was not to blame for the housing bubble or bust. The Center for Responsible Lending is a nonprofit group based in North Carolina. Eakes is a former CEO of the Center for Community Self-Help and CEO of Self-Help CU in Durham. The Center for Community Self-Help works with the credit union to provide affordable home loans, small-business loans, and loans to people who might have trouble obtaining credit (News Now July 13, 2005).

Oregon CUs help communities recover from storms

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BEAVERTON, Ore. (12/20/07)--Several Oregon credit unions and the Oregon Credit Union Foundation have joined to help residents deal with the aftermath of storms that hit the state Dec. 1-3. Storm-induced high winds and floods caused much damage, particularly to five counties designated as disaster areas--Clatsop, Columbia, Lincoln, Tillamook and Yamhill. The Oregon Credit Union Foundation donated $2,500 toward disaster relief efforts. Wauna FCU, based in Clatskanise, which was one of the hardest hit credit unions, established donation accounts for Clatsop and Columbia counties to provide immediate relief funds. In little more than a week, Wauna received almost $100,000 in donations from individuals, other credit unions and corporations. The credit union is working with county emergency service officials to distribute donations. TLC FCU, based in Tillamook, employed security guards at its branches during a power outage caused by storms to allow members to withdraw cash, since most ATMs weren’t working. St. Helens Community FCU, based in St. Helens, joined forces with the sheriff’s office to staff donation stations in the floodwaters’ wake. The credit union also collected donations in its branches and added supplies, such as blankets, to the donation boxes. Also, St. Helens board member Herb Bailey donated the use of six dump trucks from his company to help clear debris. Rivermark Community CU, based in Beaverton, does not have branches in the affected counties, but it has members who live there. To help defray expenses, Rivermark deposited $100 into the accounts of members who live in Vernonia--one of the hardest-hit cities. The credit union also offered a free skip-pay for the month for those with loans.

New HSFPP guides are a hit

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GREENWOOD VILLAGE, Colo. (12/20/07)--The National Endowment for Financial Education (NEFE) announced that the new revised version of the High School Financial Planning Program (HSFPP) has been sent to a record number of schools and organizations. “The buzz from teachers and others has been incredibly positive,” said John Parfrey, director of the NEFE HSFPP. Since April 1, NEFE has sent 745,069 HSFPP student guides. Of those, 393,470 were new student guides. For the same period in 2006, NEFE distributed 455,670 student guides--a gain of 289,399 in 2007. “Those are huge numbers,” Parfrey said. He also noted that he has heard no complaints about the new program. Since the Credit Union National Association partnered with NEFE in 2000, the HSFPP has been revised in 2002 and in 2007. HSFPP is a free resource designed to teach high school students about personal finance.

Pennsylvania governor signs bad-check law

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HARRISBURG, Pa. (12/20/07)--New legislation that allows businesses to recover costs associated with consumers who write bad checks was signed into law by Pennsylvania Gov. Edward Rendell Tuesday, according to the Pennsylvania Credit Union Association (PCUA). House Bill 296, sponsored by State Rep. Rick Stevenson (R-Mercer, Butler), will help businesses recoup costs incurred from handling bad checks by raising the service charge from $20 to $50. The change takes effect in 60 days (Life Is A Highway Dec. 19). The bill allows the service charge to increase to more than $50 if the company handling the bad check is charged more than the new limit by its financial institution. A written notice of the service charge must still be conspicuously displayed at the place of business. While PCUA was not involved in efforts regarding the legislation and did not take an official position on the matter, it felt it should make members aware of the law. “The reason we’re publicizing it is so credit unions have the opportunity to remind members not to bounce checks,” said Mike Wishnow, PCUA senior vice president of communications and marketing. “If they do, it could cost them more from the merchant side. Also, we’re giving credit unions a heads-up so they can inform their small-business members about the change in the law.” In Pennsylvania, it is illegal for a person to knowingly write a check without sufficient funds and fail to make good within 10 days after receiving notice of the refusal of the check. If convicted, the check writer must reimburse the payee the face amount of the check, as well as any service charge--if written notice of the service charge was conspicuously displayed on the payee’s premises when the check was issued.

Four Ohio CUs receive disaster relief from OCUF

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DUBLIN, Ohio (12/20/07)--Four Ohio credit unions received disaster relief grants from the Ohio Credit Union Foundation for August flooding that affected residents in the northern region of the state. Millstream Area CU, Findlay, received two disaster relief grants from the foundation. The credit union gave $250 gift certificates with each disaster relief loan application completed by Hancock County homeowners. The certificates were used to replace home furnishings damaged by the floods, said the foundation (Above and Beyond Dec. 19). A portion of the funds also was provided to Central Middle School, which serves 400 at-risk students. The school lost instructional items during the flooding. Empire Affiliates CU, a division of Toledo Area Community CU, received a disaster-relief grant to help the Shelby City School System. The grant application was written in partnership with Gorman Rupp & Associates CU in Mansfield. The grant will help teachers who lost instructional materials. Two of the school district’s buildings and the football field were affected by the flood. Midwest Community FCU, Defiance, received a disaster relief grant to help Ottawa families. The credit union launched a loan program to help residents rebuild and also offered $100 gift cards to families who applied for flood relief loans. Superior FCU, Lima, received a grant to help 400 of its Ottawa members. The funds were used to helped 16 teachers replace instructional supplies. Leftover funds were used to help members displaced from their homes. Superior FCU matched the grant funds and dropped the annual percentage rate for consumer loans for affected members to 5.50%.

CU System briefs (12/19/2007)

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* WASHINGTON (12/20/07)--Counterfeit teller checks bearing the name of Radcliff, Ky.-based Fort Knox FCU are reportedly in circulation, the Federal Deposit Insurance Corp. (FDIC) said Wednesday in a special alert. The counterfeit items display the credit union's routing number, but are not like its authentic checks. The counterfeit items are light brown with dark borders and rounded corners, and display a security feature statement embedded in the top border and along the bottom border between two padlocks. Authentic checks are light green with square corners, have the credit union's telephone number below its name and address in the top-left corner, and contain a centered watermark with its name and the "People Helping People" slogan … * HARRISONBURG, Va. (12/20/07)--Ida Blanchette, a member of Common Wealth One FCU's Johnny Appleseed Club, is one of 12 winners in a national art contest that promotes environmental awareness and thrift among children. Blanchette, daughter of Arthur Blanchette of Linville, Va., created a drawing with a recycling and conserving theme that will be featured in the Johnny Appleseed Club's 2008 national calendar. The club is a nationwide program sponsored by financial institutions to help young people learn more about ecology and money management. Blanchette's drawing was chosen from hundreds of entries. She was presented a cash award on Dec. 15. (Photo provided by CommonWealth FCU) … * SUITLAND, Md. (12/20/07)--Andrews FCU is airing 30-second television spots featuring service men and women sending season's greetings to their families back home. The $771.3 million asset credit union is working with ABC7 and NewsChannel 8 to air the soldiers' holiday greetings, which started running Monday and will continue to Jan. 1. The spots air at various times throughout each day. Each spot features three individuals from the Washington, D.C. metropolitan area. "Although there is no way to repay these individuals for their dedication to this country, we wanted to show a small token of our appreciation for their efforts," said Michael Hale, president/CEO … * TULSA, Okla. (12/20/07)--Tulsa Teachers CU (TTCU) has launched its School Pride VISA check cards with names of 20 Tulsa and area schools to an overwhelmingly positive response (Tulsa World Dec. 19). Members can get the cards in the name of their school. Central High School head basketball coach Terry Scott was the first to get a Central card. The credit union began issuing the cards Nov. 27. In the first two weeks, the credit union issued 668 cards, a huge number in light of the recent ice storm that disabled the state, said Kristi Brooks Cohea, vice president at TTCU. Each time a card is used, the transaction will generate a donation from the credit union to the school named on the card. The credit union plans to expand the card offer to more schools. * PEMBINA, N.D. (12/20/07)--U.S./Canada border officials nabbed a Canadian robbery suspect as she crossed into North Dakota with friends headed to a Green Bay Packers game in Wisconsin. Emelda Reimer of Winnipeg was detained after border officials questioned the group and learned she was wanted on charges of stealing $35,000 from several Canadian credit unions earlier this year. The officials turned Reimer over to Canadian authorities. She was charged with four counts of robbery, two counts of robbery with a weapon and six counts of wearing a disguise (The Canadian Press Dec. 17) … * GRANITE CITY, Ill. (12/20/07)--A man was sentenced to 12 years in federal prison Monday after being convicted of robbing the GCS FCU, Granite City, in September. Clarence Thomas, 46, of Madison, Ill., was sentenced in U.S. District Court in East St. Louis. Also, Thomas was sentenced to five years of supervised release after finishing his prison term, and was ordered to pay $26,802 in restitution to the credit union (Belleville News-Democrat Dec. 18). He was convicted of aggravated robbery and using a firearm in commission of a violent crime, according to Randy G. Massey, acting U.S. attorney for the Southern District of Illinois … * YORKTOWN, Va. (12/20/07)--Robert L. Girouard, 92, who was chairman of the board at Langley FCU in Newport News, Va., for 19 years, died Dec. 15. Girouard's credit union activities also include positions at the state and national level (Daily Press Dec. 18). He represented the Virginia Credit Union League at the national level from 1967 to 1977. He spent 36 years at Langley Research Center and retired in 1980 …

CUs targeted in 33 of November phish attacks

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BEDFORD, Mass. (12/19/07)--Credit union brands were targeted in 33% of phishing attempts during November, according to RSA Monthly Online Fraud Report. That's down from 40% in October but still up from September's 29%. Credit union brands were targeted more than regional U.S. bank brands but less than nationwide U.S. bank brands, according to the survey. Nationwide U.S. banks accounted for the largest portion of November's phish net at 44%--slightly more than in October's 43% and September's 38% readings. Regional U.S. banks were hit in 22% of November's phish attempts. That compares with 17% in October and 32% in September. During November, 159 brands were attacked, slightly higher than 154 in October. Also, there were few attacks against institutions that had not been attacked before. The report is based on monitoring by the RSA Anti-Fraud Command Center (AFCC), which has shut down more than 60,000 phishing attacks to date. For the full report, use the RSA resource link.

Iowa Supreme Court accepting IOLTA grant applications

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DES MOINES, Iowa (12/19/07)--The Iowa Supreme Court Lawyer Trust Account Commission is accepting grants under the Interest on Lawyer Trust Account (IOLTA) program for the grant period beginning July 1, 2008. IOLTA programs allow lawyers who are holding clients' funds that are too small or short-term for an individual interest-bearing account to deposit the funds into a special bank or credit union account that contains similar funds from other lawyers. The interest generated from the pooled account helps fund legal programs for the needy (News Now Oct. 16). In Iowa, IOLTA grants are awarded to public purpose projects that provide legal services to the poor in civil cases, law-related education and other programs that improve the administration of justice in the state, according to a press release from the Iowa Judicial Branch. Last year, the Iowa Supreme Court awarded $1.327 million to the program. Total IOLTA program receives for the current fiscal year, which ended Nov. 30, exceeded $1.5 million. Deadline for grant applications is 4:30 p.m. CST, March 7, 2008. Grant recipients will be announced in late May or early June. Since Iowa's first grant in June 1986, the state has awarded nearly $20 million in grants. Credit unions in several other states can accept IOLTA deposits, including Maine, Washington, and Ohio. Effective Jan. 1, credit unions in Maine will accept IOLTA deposits for all deposits at low-income-designated credit unions. The Maine Supreme Court ruled in favor of the Maine Credit Union League's position to allow credit unions to offer interest on the IOLTA accounts, after the Maine Bar Foundation sought to limit credit union IOLTA participation to only low-income-designated credit unions (News Now Oct. 16). In August 2006, the Washington State Supreme Court backed the use of credit unions by attorneys to hold IOLTA accounts, after the Washington State Bar Association proposed rules to prohibit credit unions from accepting the interest on the accounts (News Now Aug. 1, 2006). A credit union modernization law in Ohio, the Credit Union Member Service Powers Act, which was signed into law in 2006, also allows credit unions to participate in IOLTAs (News Now Jan. 13, 2006).

CU EEOC settle discrimination suit

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PHOENIX (12/19/07)--A Phoenix-based credit union will pay $250,000 plus remedial relief to settle a discrimination lawsuit, announced the U.S. Equal Employment Opportunity Commission (EEOC). The lawsuit was filed by EEOC against Sun West FCU on behalf of two female managers who were subjected to sexual and gender harassment by a former manager, said EEOC (Arizona Daily Star, Phoenix Business Journal and East Valley Tribune Dec. 17). The settlement by consent decree also requires the $256 million asset credit union to provide training and other relief to educate employees about sexual harassment, retaliation and their rights under Title VII of the Civil Rights Act of 1964. EEOC regional attorney Mary Jo O'Neill, who oversaw the case, told Phoenix Business Journal that employers have a responsibility to take appropriate corrective and preventive action the first time they learn of discriminatory conduct in their workplace.

Federation assisting with new IDA grants

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NEW YORK (12/19/07)--The National Federation of Community Development Credit Unions is working with Assets for Independence (AFI) to match $19 million in grants for organizations that want to start or expand individual development account (IDA) programs. The federation is working with AFI to provide technical assistance to all prospective grantees. The federation’s goal is to help expand the diversity of organizations that participate in the AFI IDA programs. AFI has identified credit unions as a target group because of their commitment to serving low-income communities and people of modest means. “Credit unions have always been dedicated to building assets and many already run efficient and effective IDA programs,” said Cliff Rosenthal, federation president/CEO. IDA programs help eligible low-income individuals build savings that can be used for homeownership, business capitalization or post-secondary educating and training. Application deadlines are Jan. 15 and March 25, 2008. AFI is a program run by the U.S. Department of Health and Human Services Office of Community Services. For more information, use the links.

CU System briefs (12/18/2007)

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* BRIDGETON, Mo. (12/19/07)--An ankle injury has resulted in a lawsuit against Vantage CU of East St. Louis. Betty Cowan filed suit Dec. 7 in St. Clair County Circuit Court after fracturing her right ankle while stepping off an uneven surface on pavement. The incident occurred May 11, 2006. She is seeking $50,000 in damages (The Madison St. Clair Record Dec. 13) … *
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WARRENVILLE, Ill. (12/19/07)--Members United Corporate and the World Council of Credit Unions hosted a delegation of 18 industry leaders from Mexico on Dec. 4. The delegation, pictured at the corporate, represents 14 credit unions. Members United shared information about the U.S. Credit Union System and corporates' role in the system. Mexico's credit union movement doesn't have a corporate credit union network and credit unions must rely on banks and other entities for investment and correspondent needs. (Photo provided by Members United Corporate) … * KNOXVILLE, Tenn. (12/19/07)--Knoxville police have identified a suspect in Friday's armed robbery of Covenant Health FCU as Shabaaka Awolowo, 26. The robbery received attention because the robber used a fake stick of dynamite as a weapon. He left the fake device behind when he fled with the cash. The suspect has multiple outstanding warrants for failure to appear in court and was still at large on Tuesday (The Knoxville News Sentinel Dec. 18) … * COLORADO SPRINGS, Colo. (12/19/07)--Four people have been arrested for an aggressive, takeover style armed robbery Monday at Air Academy FCU, Colorado Springs. Arrested were Percy Rogers, 24; Damien Owens, 20; Desmond Owens, 22; and Eunice Scott, 27. The first three are held on aggravated robbery charges while Scott is held as an accessory to aggravated robbery. Police said the robbers were aggressively armed during the incident. No one was injured. Rogers had been accused in shootings in 2005 and 2001, according to court records. During the getaway chase, local schools were in lockdown. (The Gazette Dec. 18) … * SAN ANTONIO (12/19/07)--Nicolas "Nick" Holguin assumed the duties of president/CEO at Baptist CU on Dec. 10, the $21.4 million asset credit union announced. Holguin has 18 years of combined banking and credit union experience, with 12 years as a credit union CEO. Baptist CU was chartered in 1955 by employees of the Baptist Memorial Hospital System of San Antonio and has maintained a close relationship with the hospital system for more than 50 years. It serves other select employee groups of the Baptist community in San Antonio, Dallas and statewide …

Washington DFI prohibits home of the 1 mortgage ads

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OLYMPIA, Wash. (12/19/07)--The Washington Department of Financial Institutions (DFI) has alleged that Linden Loans LLC, of Kirkland, used bait and switch tactics in its advertising for mortgage loans. A DFI investigation indicated that although Linden’s advertising promised consumers residential mortgage loans at 1% interest without points or fees, no borrower actually received those terms in 2006. DFI is looking to see if borrowers in 2007 received the promised terms. The statement of charges gave notice that the DFI may issue an order requiring Linden to cease deceptive advertising, suspend its mortgage broker license and suspend the loan originator licenses held by two respondents. The DFI also may fine Linden $150,000, with an additional $2,500 for investigation fees. Linden and its owners, Christopher Opdyke and Mark Sullivan, can request a hearing on the charges. DFI says Linden’s practices violated the Mortgage Broker Practices Act by misrepresenting loan terms, omitting required disclosures, and engaging in an unfair and deceptive practice. “The 1% rate touted by Linden lasts only a matter of months, and requires borrowers to accept predatory loan terms that would greatly increase costs to borrowers,” said Deb Bortner, director of the department’s division of consumer services. “In this case, we allege that Linden’s offer was illusory. “Consumers who responded to the bait were switched to a higher rate and higher cost mortgages. The borrowers who did get the 1% rate--only 44 of 333 borrowers--paid fees that, in some cases, grossly exceeded traditional broker feeds,” she added. Linden’s advertised mortgage loan was a payment-option adjustable-rate mortgage (ARM) that allows borrowers to choose among several payment options. Depending on the payment option, the loan may be a negatively amortizing loan, said DFI. Monthly payments could increase each year by up to 7.5% for five years, after which the interest rate is reset to amortize any unpaid interest. The cap on monthly payment increases does not apply to the reset. Linden also imposes a three-year prepayment penalty on borrowers who get the payment-option ARM. “We intend to closely monitor mortgage advertising in 2008, and expect similar enforcement actions will be forthcoming,” Bortner said. Many credit unions are offering low-cost alternatives to predatory lending practices, including several in Washington.

Colorado Wyoming associations outline advocacy efforts

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ARVADA, Colo. (12/19/07)--The Credit Union Associations of Colorado and Wyoming (CUAC and CUAW) reported their progress for 2007, including an increase in advocacy initiatives and doubling the number of Credit Union Regulatory Improvements Act (CURIA) sponsors in the Colorado delegation from three to six.
The Credit Union Associations of Colorado and Wyoming plan to move into a new headquarters building in Denver and are preparing for the Democratic National Convention in August. From left are: Melissa Vetterling, administrative assistant; Courtney Staatz, manager of political programs; John Dill, president/CEO; Chris Kemm, manager of grassroots advocacy; Tim Dore, senior vice president of governmental affairs; and Mark Robey, general counsel. (Photo provided by the Credit Union Associations of Colorado and Wyoming)
Colorado’s CURIA sponsorship increased 100% this year, with support from Rep. Marilyn Musgrave (R) and Rep. Ed Perlmutter (D). CUAC also persuaded the dean of the Colorado delegation, Rep. Diana DeGette (D) to add her name as a co-sponsor of CURIA. Other accomplishments include education efforts aimed at newly appointed Wyoming Sen. John Barrasso, passage of a state bill that would provide major regulatory relief for credit unions seeking to dispose of repossessed cars in Colorado, and hiring Tim Dore as senior vice president for governmental affairs. Dore replaces Pete Kirchhof, who will be an outside lobbyist with credit unions as one of his clients. John Dill, CUAC president/CEO, credits Chris Kemm, manager of grassroots advocacy, for advances in the associations’ grassroots programs. Kemm joined CUAC and CUAW in 2006. During his tenure, the number of advocates signing up under the CapWiz tracking program increased--1,840 in the first 10 months of 2007. “The strength of credit unions has always been in our grassroots,” Dill said. “What Chris brings to the table is not only a deep understanding of the mechanism and tools of grassroots organizing, but also a newly acquired passion for our credit union movement.” CUAC and CUAW also have used grassroots to help pass a bill that would remove credit unions from regulations of the state automobile dealer’s board, which had started imposing rules on credit unions seeking to sell repossessed autos. Courtney Staatz also was hired as manager of political programs and will work on political fundraising, the associations reported. CUAC and CUAW are looking to 2008, whenthey will field one of their largest delegations to the Credit Union National Association’s Governmental Affairs Conference. They also will move into a new headquarters building by late spring, and will prepare for the Democratic National Convention, scheduled to take place in Denver in August.

Debit-card scams tied to gas pumps

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MADISON, Wis. (12/19/07)--A rash of recent debit-card scams, originating at gas pumps, have been occurring in several areas of the U.S. Many of the victims are members of credit unions. In El Monte, Calif., 70 people were victimized as of Saturday, according to police. All of the victims used debit cards at an ARCO gas station to purchase gas (San Gabriel Valley Tribune Dec. 15). Several victims are members of El Monte-based Vons Employees FCU and El Monte City Employees CU. Although no illegal devices were found at the gas station, investigators believe that an advanced computer device was used to capture information from debit-card electronic stripes and personal identification numbers (PINs). The gas station owner is not a suspect, police said. The identity thieves used the information to make cash withdrawals, varying from $400 to $1,500, from locations in Palms Springs, Calif., and New York, and from 7-Eleven stores in Las Vegas, police said. In Houston, Harris County Sheriff’s office investigators are tracking three men who stole debit-card PINs at the gas pump, then used the numbers to manufacture counterfeit cards and steal more than $100,000 from area ATMs. Roughly 500 accounts were breached, including those of several members at San Antonio CU. The thieves withdrew between $2,000 and $3,000 at each ATM, the sheriff’s office said. In Menomonie, Wis., city police started receiving several reports Nov. 19 of fraudulent charges on residents’ debit cards. The fraudulent charges are occurring in Florida--mainly at gas stations, according to police reports. The victims’ debit cards are being swiped even though they have the cards in their possession. This likely means that a copy of the cards has been made and used, police said (Dunn County News Dec. 18). So far, more than 20 local victims, 60 locations and 120 purchases have been affected. Each purchase made totaled about $70, according to Inspector Dave Pellett of the Menomonie Police Department.

Albuquerque police destroy suspect package at CU

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ALBUQUERQUE, N.M. (12/19/07)--Bomb squad members on the Albuquerque police force detonated a suspicious-looking package found at Sandia Laboratory FCU Monday. Credit union employees phoned police Monday morning after discovering a box wrapped with duct tape in the credit union’s night drop-box ( Dec. 17). After arriving on the scene and conducting an evacuation of about 75 children from a nearby day care center to another community center, police destroyed the suspicious package. Earlier this year, another Albuquerque-based credit union received two bomb threats. U.S. New Mexico FCU received one on Aug. 18, and one on Aug. 30--demanding money. In the Aug. 18 incident, a suspicious package was left in the credit union. It turned out to be harmless (News Now Sept. 5).

Regulator seeks comments on CUbank merger

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HAVERHILL, Mass. (12/19/07)--State regulators are seeking public comment regarding the recent announcement of plans to merge Northeast Community CU and Haverhill Bank under the name Haverhill Bank. The Massachusetts Division of Banks has confirmed it will accept public comment on the matter through Jan. 10, regarding the merger of the $100 million asset credit union and $130 million asset bank. The merger, designed to expand and improve on financial services for area residents, according to a Northeast Community press release, must be approved by members, depositors and regulators. Members of Northeast Community CU approved a proposed merger of the credit union with Haverhill Bank by an overwhelming 77 to 1 at a special meeting Sept. 13, according to Peter DiBenedetto, CEO (News Now Sept. 17). Under state law, the resulting institution will be chartered as a bank and will have the second-largest market share in Haverhill. Haverhill Bank President Thomas R. Faulkner will serve as chairman and chief executive officer, and Di Benedetto will serve as president and chief operating officer. The new bank will have combined assets of about $260 million, deposits of $20 million and capital of $30 million, thereby affording it the ability to offer larger loans than either of the institutions can now provide, Northeast said in a press release. “We’ve continued to grow steadily since 1934 while maintaining a strong capital base,” Di Benedetto said. “When we look at what we wanted to offer our members in the future, it made sense to combine our efforts with an institution that has similar values and also is coming from a position of strength. “We believe the combined institutions will be better able to serve the future financial needs of our customers and the entire Haverhill community,” he concluded.

Teller pegs member of partner CU as robber

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OGDEN, Utah (12/19/07)--A credit union teller helped authorities nab a robbery suspect after she recognized the robber as a person who’d made an inquiry a week earlier at a partner credit union. On Dec. 11, Elrachio Naguan Craig allegedly entered the Goldenwest FCU in Ogden and handed the teller a note demanding money. Craig was wearing a yellow-hooded sweatshirt with “Wyoming” written across the front and nothing covering his face (The Salt Lake Tribune Dec. 17). After the teller handed over $1,176 in cash, the robber fled the credit union, according to the FBI. After the robbery, the teller told authorities that she recognized the robber as someone who had asked about an account at Cyprus CU in West Jordan, Utah, where she had worked as a teller a week before. Through an alliance agreement, account holders at Cypress can manage their accounts at Goldenwest. Credit union officials found the Cyprus transaction made the week before and learned the account belonged to Craig, the FBI said. Police compared a booking photo to the credit union’s surveillance footage, and found a match. Police also received seven phone calls from people identifying Craig as the robber. Craig admitted to the robbery, the FBI said. He is charged with one count of credit union robbery, according to court records. If convicted, he faces up to 20 years in prison.

KeyPoint CU launches account access via Facebook

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SANTA CLARA, Calif. (12/19/07)--KeyPoint CU has launched a Facebook Banking Application that provides its members full access to their accounts through the social networking website, Facebook. The $795.3 million asset credit union and MShift Inc., a mobile banking solutions provider, jointly developed the application, called the KeyPoint Credit Union Facebook (eBanking & Payment News Nov. 22). Members who are in the Facebook site have one-click access to their online banking account as well as information from the Santa Clara, Calif.-based credit union. All account information is encrypted with a minimum of 128 bits, and no user data is stored on the Facebook services. It also provides a forum for members to socialize. "Our current membership is significantly younger and more globally mobile than the typical credit union member," said Juli Anne Callis, executive vice president/chief operating officer of KeyPoint. "That means we need to be out there scouting for ways to bring value in the forum of the latest convenience to our existing members or risk losing them to more forward-looking organizations."

Cybercriminals exploiting social networking

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NEW YORK and LONDON (12/18/07)--2007 has been a year of diversity in new tactics by cybercriminals, with the emergence of new threats targeting social networking, says a new security report. That's important to credit unions because some credit unions are attempting to attract younger members through social networking programs. Also the study has seen an increase in attacks against individuals in the financial sector. According to MessageLabs Intelligence 2007 Security Report, websites such as Facebook, Linked-In and Plaxo present rich pickings for criminals phishing for information to use in identity theft and targeted attacks (ENP Newswire Dec. 10). This year, several waves of attacks targeted primarily C-level and senior executives. Levels rose from one attack per day in 2006 to more than 1,100 during a 16-hour period in September 2007, said MessageLabs, which provides messaging and web security services to businesses worldwide. The most recent wave occurred in November, when the first sector-specific attack took place with almost 1,000 individual attacks aimed at the financial sector, said the study. Social networking tools are the third-most commonly triggered policy-based filtering rule on the company's services. "The rapid adoption rate of social networking sites such as Facebook has inevitably been exploited by cyber criminals intent on adding the content in these sites to their portfolio of tools," said Mark Sunner, chief security analyst at the company. "As we have seen in the past, mass adoption of new communication or web-based tools is often followed by a rise in the number of threats against it, and the Facebook effect will present new challenges to corporate and personal online security," Sunner added. The rise in targeted attacks is matched by an increase in phishing attacks, which shadowed the number of virus attacks at two separate points in January and June. Phishing attacks accounted for 66% of all malware attacks, compared with an average of 24.8% in 2006, said the report. Among the top trends for 2007 cited in the report:
* Web security: An average of 1,253 new websites a day harbored malware, equal to almost half a million new malicious websites appearing during the year. * Spam: The annual average spam rate in 2007 was 84.6%, a slight decline from 86.2% in 2006. However, the portion of spam that is new and previously unknown increased by 10%. * Viruses: The average virus level for 2007 was one virus for every 117.7 e-mails, or 0.8%--a decline from 0.6% in 2006, when about one in 67.9 e-mails contained viruses. September saw the highest ratio experienced in the previous 18 months, with one in 48 e-mails containing a virus or Trojan. * Phishing: The number of phishing attacks increased to one in 156 e-mails during 2007, compared with one in 274.2 e-mails in 2006. Phishing attacks have widened their targets from drefrauding major international banks and financial organizations to also targeting smaller, national and state banks and credit unions.

Kansas CUs recover from winter weather

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WICHITA, Kan. (12/18/07)--Business at most Kansas credit unions is returning to normal after a recent ice storm that affected most of the state. Homes and businesses, including credit unions, in some areas were negatively impacted by more than two inches of ice, and more than 90,000 Kansas residents were without power for some time, said the Kansas Credit Union Association (KCUA). A snowstorm that passed through the area during the weekend made matters worse for some, said KCUA. "Currently there are many residents still without power, mostly in the rural areas of Kansas," said Ashley Bridgeman, KCUA communications specialist. "However, we are happy to report that credit unions affected by the ice storm quickly resumed daily operations and returned to providing great service for their members."

Michigan league to host mortgage crisis summit

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PLYMOUTH, Mich. (12/18/07)--The Michigan Credit Union League (MCUL) will host a “Mortgage Crisis Summit” Jan. 10, in response to the growing mortgage foreclosure crisis in the state. The purpose of the summit is to initiate dialogue on what the league and credit unions can do to assist consumers. Participants include credit union CEOs, mortgage professionals and credit union service organization leadership (Michigan Monitor Dec. 17). MCUL senior management has identified several areas in which the credit union industry could be a catalyst for positive change:
* A consumer mortgage hotline; * Credit counseling; * Consumer financial education; * Public/private partnerships; and * Public service announcements.
Also, the MCUL board of directors has approved the creation of a new league staff position--financial education coordinator--to manage, coordinate and deliver financial education and youth consumer financial training programs to credit union members and consumers. Creation of the position will allow the league to help consumers cope with the state’s ongoing mortgage crisis, said MCUL Executive Vice President Patrick La Pine. “The current mortgage crisis has drawn greater attention to the need for adult consumer financial education, and in this area our efforts haven’t been as effective as they could be,” La Pine said. “Despite 85% of credit unions offering free financial education, many members simply do not take advantage of the opportunity. “This financial education is particularly important in low-income areas where, unfortunately, the majority of predatory lending takes place,” he added. Recruiting for the position has begun.

CU System briefs (12/17/2007)

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* MADISON, Wis. (12/18/07)--Madison Mayor Dave Cieslewicz will be at UW CU today to acknowledge its Monroe Street branch's "Silver" certification from U.S. Green Building Council in Washington, D.C. The branch is the first Leadership in Energy and Environmental Design (LEED) certified credit union in the Midwest. PLANNING Design Build, the architect/builder, said the building has daylighting in 90% of the retail areas, uses 40% less water; and recycles more than 95% of construction waste. Its reflective roof reduces the urban heat island effect, and the branch is located near a bike path for alternate transportation. Paul Kundert, president/CEO of UW CU, also noted it offers environmentally friendly services such as electronic statements and a free shredding service each spring … * KNOXVILLE, Tenn. (12/18/07)--A fake dynamite stick was the weapon used in a robbery Friday afternoon at Covenant Health FCU, Knoxville, Tenn. A man in a navy jumpsuit, orange vest and glasses went up to the teller and placed the fake dynamite on the counter and demanded money before fleeing on foot with an undisclosed amount of cash. The incident occurred at 4 p.m. Police are treating the matter as a bomb threat robbery (WVLT and Dec. 14). * COLUMBIA, Md. (12/18/07)--Sharon Sykes has accepted the position of vice president of marketing at the Maryland and District of Columbia Credit Union Association. Her position will be effective Jan. 2 (Focus Newsletter Dec. 17). Sykes will report to Chief Services Officer Paul Rosenberger and will be responsible for cooperative advertising, the association's website, and marketing the association and its services. She previously served as vice president of marketing at State Employees’ CU in Lithicum, Md., and marketing manager at Tower FCU in Annapolis Junction, Md. … * FARMERS BRANCH, Texas (12/18/07)--Sherry Beach, former president of Amoco Houston FCU--now BP FCU--died Dec. 14. She was described as a strong, compassionate woman who dedicated her life to credit unions (LoneStar Leaguer Dec. 17). Beach served as CEO of Amoco Houston FCU from 1980 to 1993. During that time, she also served on the board of directors for Texas Shared Guarantee, a private share insurer, until private insurance was discontinued in Texas. She was active in the Houston Chapter of Credit Unions, holding various positions on the chapter board for 10 years. She also was a supporter of the Children’s Miracle Network …

Virginia regulator reaccredited by NASCUS

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ARLINGTON, Va. (12/18/07)--The National Association of State Credit Union Supervisors (NASCUS) announced that the Virginia Bureau of Financial Institutions (BFI) recently earned NASCUS re-accreditation. The Virginia BFI supervises 55 credit unions with combined assets of about $5 billion. The agency was first accredited in 2002. NASCUS accreditation is valid for five years, subject to annual review. In addition to on-site evaluation and annual reviews, the process includes a self-evaluation of department operations in the areas of administration and finance, personnel, training, examination, supervision and legislative powers. NASCUS’ 28 accredited states supervise more than 83% of state-chartered credit union assets.

Pennsylvania Senate OKs land sale to PSECU

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HARRISBURG, Pa. (12/18/07)--The state of Pennsylvania can sell 47 acres in Susquehanna Township to the Pennsylvania State Employees CU (PSECU) for the credit union’s headquarters. The Pennsylvania State Senate approved the transaction Wednesday (Central Penn Business Journal Dec. 12). The farmland, owned by the state Department of Agriculture, will cost PSECU about $2.7 million, according to the office of State Sen. Jeffrey E. Piccola (R-Dauphin County). PSECU’s new headquarters would allow it to expand its current 10-acre headquarters in Harrisburg, Piccola said in a statement.

SECU offers biweekly mortgage payment option

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RALEIGH, N.C. (12/18/07)--State Employees CU (SECU) of Raleigh is offering members a biweekly mortgage option. The mortgage option was created after members requested it. Mortgage payments are often too large to make from one paycheck, said Phil Greer, senior vice president of SECU’s loan administration department (Carolina NewsWire Dec. 3). Three types of SECU mortgages are available with the biweekly payment option: the two-year adjustable-rate mortgage, a 15-year fixed rate mortgage and the AllSaver’s mortgage. SECU’s biweekly mortgage program takes the sum of 12 monthly payments and divides the total into 26 equal payments. The biweekly products include an escrow account where funds are collected with each payment for annual property taxes and insurance and held until needed. The escrow account earns interest. The biweekly mortgage payment has been available since Dec. 1. There is no charge for the added service. SECU has $14 billion in assets.

Maryland coalition answers professors call for fin ed

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BALTIMORE (12/18/07)--To answer an economics professor’s call for more financial education for grades K-12 in the state, the Maryland Coalition for Financial Literacy (MCFL) has sent a letter of response outlining some Baltimore County public school programs in the area. Allen Cox, managing director of the Maryland Coalition for Financial Literacy, penned the letter to Douglas Lamdin, professor of economics at the University of Maryland Baltimore County, according to the Maryland and District of Columbia Credit Union Association (MDDCUA) (Focus Newsletter Dec. 17). Many consumers make poor financial decisions that lead to foreclosures, high debt and other financial crises because they do not have the educational background in these areas, Lamdin said in a commentary published in the Dec. 11 issue of the Baltimore Examiner. Teachers need education to teach economics and finance in Maryland’s public schools, he added. Lamdin recommends that state and local boards of education take an active role in placing these types of courses in the schools. Cox responded that Baltimore County public schools require high school seniors to take either Advanced Placement Economics or Economics and Public Issues. Five additional school districts in Maryland now require for graduation, courses that focus on financial literacy concepts. The coalition hopes to add three more school systems this year. That would mean nine out of 24 require students to take a course that includes financial literacy concepts. Earlier this year, MDDCUA led an effort to pass Maryland Senate Resolution 7, which urges county boards of education to integrate the principles of basic personal finance into their curriculum. The resolution also asks county boards to implement standards for graduation from a public high school. MDDCUA is an MCFL member.

CUNA announces board election results in two districts

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MADISON, Wis., and WASHINGTON (12/18/07)--The Credit Union National Association (CUNA) announced the results of two elections for the CUNA Board of Directors. In District 3, Class C, Tom Dorety, president/CEO of Suncoast Schools FCU, Tampa, Fla., was the successful candidate in a contest against Bruce Burns, chairman, SRP FCU, North Augusta, S.C. Doerty will begin a full three-year term March 3, 2008. In District 5, Class A, Winona Nava, president/CEO of Guadalupe CU, Santa Fe, N.M., won a four-way election to fill the unexpired term of Mary Shipe, who resigned from the board, effective Dec. 31. Nava will take office Jan. 1, for a term that will expire in 2009. Other candidates in that election were: Brian J. Barkdull, president/CEO, American Southwest CU, Sierra Vista, Ariz.; Paul Brucker, president, Railway CU, Mandan, N.D.; and Marsha Tynsky, president, Trona Valley Community FCU, Green River, Wyo. Dorety and Nava will join new board members Mary Cunningham, president/CEO, USA FCU, San Diego, and Edwin L. Williams, president/CEO Discovery FCU, Wyomissing, Pa., who will take office March 3. Cunningham represents District 6, Class B, and Williams, District 1, Class A. Incumbents who ran unopposed and were re-elected in their districts earlier are:
* District 1, Class D: Joseph G. Bergeron, president, Association of Vermont Credit Unions, South Burlington, Vt. * District 2, Class B: William A. Herring, president/CEO, Cincinnati Central CU, Cincinnati, Ohio; * District 2, Class D: Paul L. Mercer, president, Ohio Credit Union System, Dublin, Ohio; * District 4, Class A: Pat Wesenberg, president/CEO, Point Plus CU, Stevens Point, Wis.; and * District 5, Class C: Harriet May, CEO, GECU, El Paso, Texas.

More arrested including wife in ATM murder

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NEWPORT NEWS, Va. (12/18/07)--Police have made more arrests--including the victim's widow--in the shooting death of a Navy ensign found in the parking lot of Langley FCU in Newport News seven months ago. Michael Draven, 27, Newport News, and Catherina Voss, 32, widow of Cory Voss, were arrested Thursday and Friday, respectively, and charged with murder (Daily Press Dec. 15). Earlier in the week, police arrested David Runyon in Morgantown, W.Va. on charges he tried to rob Voss at the ATM in April, then killed him in a parking lot behind the cash machine. Police say surveillance footage shows Runyon holding Cory Voss at gunpoint. Voss, 30, went to the ATM at about 11 p.m. April 29. His wife reported him missing the next morning, and police found his body in the driver's seat of his pickup truck.

CDCUs meet on mortgage meltdown

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NEW YORK (12/17/07)--More than 40 credit union leaders joined the National Federation of Community Development Credit Unions Dec. 10 to discuss ways to overcome the mortgage crisis. The leaders attended a conference call titled, “Mortgage Meltdown: The Effects of Community Development Credit Unions (CDCUs) and Local Communities.” Brenda Weaver, director of the federation’s CDCU Mortgage Center LLC, and Greg Gemerer, federation director of policy research, began the call by discussing nationwide trends in the subprime crisis and comparing how those trends have affected CDCUs and conventional credit unions. The crisis that is hitting the U.S. is “the culmination of a perfect storm in the mortgage markets: the implosion of the subprime market, rising interest rates, a re-evaluation of real estate prices, economic downturns and predatory mortgages,” Weaver said. Gemerer shared some statistics:
* Year-to-date real estate delinquency ratios for the third quarter of 2007 are up 41 basis points (1.90% from 1.49%) for CDCUS; 28 basis points for all CUs (0.57% from 0.29%) and 57 basis points for banks (1.27% from 0.70%); and * CDCU net charge-offs increased by a small margin of 1.62% year-on-year in the third quarter, compared with 144% and 165% increases in net charge-offs for credit unions and banks.
“CDCUs continue to deal with their delinquencies effectively and manage to collect on the majority of their loans,” Gemerer said. A number of CDCUs also spoke about their experiences with the crisis. Gloria McLendon, loan officer at Faith Community United CU, Cleveland, Ohio, said she helped a member by refinancing a car loan, which allowed the member to refinance her mortgage with another lender. It’s also important to educate members and provide homeownership counseling, said Lynn Meyer, director of lending at O.U.R. FCU in Eugene, Ore. “We need to start refinancing people as soon as possible, before their rates reset and they become delinquent,” added Randy Chambers, federation vice-chairman and chief financial officer at Self-Help CU in Durham, N.C. Key recommendations that emerged from the call include: taking advantage of partnerships that leverage resources to help members; reaching out to borrowers before they are in trouble; and engaging in policy reform by sharing experiences with legislators and policymakers. “CDCUs often make loans that would be considered subprime,” said federation President/CEO Cliff Rosenthal. “The big difference is that unlike many realtors and banks that put people into loans they can’t really afford, CDCUs work with their members to ensure that they can meet their credit obligations. “The numbers show that while some low-income members may miss a payment from time to time, CDCUs tend to lend at much more favorable rates, provide financial education and homeownership counseling, and generally have more personal contact with their members, which leads to much lower instances of charge-offs. This is what it means to be a CDCU,” he concluded. The federation plans to offer a two-day seminar on affordable mortgage lending in Durham during the first quarter of 2008. For more information, use the link.

Vermont CEO Subprime rate freeze a good start

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BURLINGTON, Vt. (12/17/07)--A Vermont community development credit union (CDCU) CEO gives the Bush administration's plan to freeze interest rates for certain subprime mortgages good marks for facing the problem but adds the plan would help only a limited number of people. Caryl Stewart, CEO of the Burlington-based Opportunities CU, told the Burlington Free Press the program is "a good start." The administration's plan would freeze rates for certain subprime mortgage holders for five years. The program is an interesting concept that shows the government is attempting to face up to the mortgage crisis, Stewart said, adding that the White House knew it had to do something about the market. Stewart had this advice for the government: Develop regulations to guide the mortgage industry so the free market doesn't go wild. About 2,400 of the 62,000 mortgages in Vermont--or 3.9%--are subprime, adjustable-rate mortgages. Foreclosures in the state increased 25.9% through September from the same period a year ago. However, Vermont has the lowest percentage of homes in foreclosure in the nation, said a report by the Office of Federal Housing Enterprise Oversight.

CU System briefs (12/14/2007)

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* NAPERVILLE, Ill. (12/17/07)--The Illinois Credit Union System has become a founding sponsor of the Martin Luther King Jr. National Memorial Project with a $5,000 gift to the project's foundation. Once the foundation reaches its $100 million goal, the memorial will be built in Washington, D.C. Dan Plauda, Illinois Credit Union League president/CEO, said the project will "help remind future generations of the tireless efforts of Dr. King." … * ST. PAUL, Minn. (12/17/07)--The Minnesota Credit Union Network hosted a luncheon for Rep. Joe Atkins (DFL-Inver Grove Heights) Thursday. Atkins has been chairman of the state House Commerce Committee since 2002. Atkins told the 25 people attending that he does not see any issues in the 2008 legislative session that would negatively affect credit unions. "Credit unions are in a very vibrant, healthy and competitive industry where people are working together to offer products to their members," he said. From left are MnCUN board members Pat Pierce and Harry Carter, and Atkins. (Photo provided by the Minnesota Credit Union Network) … * ST. LOUIS, Mo. (12/17/07)--Missouri Corporate CU CEO Dennis DeGroot (shown at podium) accepts the 2007 Missouri Governor's Quality Leadership Award during the recent Excellence in Missouri Conference (Courier Net Dec. 12). The award recognizes the individual who best exemplifies outstanding leadership of an organization in the pursuit of performance excellence. Several of DeGroodt's peers nominated him for the award, which is modeled after the Malcolm Baldridge National Quality Award. (Photo provided by the Missouri Credit Union Association) … * GLENDALE, Calif.(12/17/07)--Scott Svonkin, vice chairman of the California CU board of directors, won a seat on the San Gabriel Unified School District Board of Education and was sworn in on Dec. 11. "As a life long member of the California CU, I could not have won my election without the support of the California Credit Union League and so many credit union leaders," he said. "Credit unions have played an important role in my financial life and now with their help and support I have fulfilled a dream of public service." He is shown here with National Credit Union Administration Board member Gigi Hyland. (Photo provided by California CU) … * EUGENE, Ore. (12/17/07)--SELCO Community CU has announced winners of its 2007 Teachers' Mini-Grants Program. It awarded $30,200 in 130 small grants for supplemental funding to K-12 schools in the credit union's service areas. Mini-grants were awarded for up to $250 to educators who submitted lesson plans or projects to the SELCO website from September through Oct. 10. Projects chosen focused on cooking, community gardens, mathematics, physics, arts, life skills, history, aquatic field studies, technology, and more. For a list of winners, check out the website … * GREENSBORO, N.C. (12/17/07)--First Carolina Corporate CU decided to skip sending Christmas cards this year, but not because of a bah! humbug attitude. Instead, employees, working on behalf of credit unions in North and South Carolina, are collecting donations for people in need, including winter coats, stacks of canned goods, and bags of toiletry items. They also donated $1,000 to a local domestic violence shelter, Next Step Ministries. Sorting the collected items are, from left, staffers Michele Rooks, Doretta Battle, Rose Sims and Heather Graham. (Photo provided by First Carolina Corporate CU) … * WASHINGTON, D.C. (12/17/07)--Charles A. Mallon Jr. has been selected as president/CEO of Wright Patman Congressional FCU, succeeding CEO Robert A. Hess, who will retire on Dec. 31. Mallon has been with the credit union for 17 years and is a director on the Maryland and District of Columbia Credit Union Association. During Hess's tenure, the credit union grew to 42,000 members and less than $500 million in assets from 3,500 members and $1.6 million in assets. Hess served as a member of the Federal Reserve's Consumer Advisory Council, chairman of the DC Credit Union League, chairman and board member of the National Association of Federal Credit Unions, and chairman of USERS … * VIRGINIA BEACH, Va. (12/17/07)--A former vice president of the former Portsmouth Post Office CU pleaded guilty in U.S. District Court Tuesday to defrauding the credit union of more than $170,000 through seven loans in which she provided false information. Minerva Marrero-Smith, 51, of Virginia Beach admitted she supplied false statements about her employment, income and assets on the loans. Court records said she failed to use the loans as specified in the applications for buying cars or paying for medical expenses. A $48,000 loan in 2001 was supposed to be used to buy a 1999 Mercedes-Benz, but she never bought the car. The seven loans were in her name and the names of other individuals. According to the Virginia State Corporation Commission, the actions led to the demise of the credit union, which merged later with the Northern Star CU, based in Portsmouth (The Virginia-Pilot and The Ledger Star Dec. 12) …

Person-to-person loans attract two groups

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SAN FRANCISCO (12/17/07)--Credit unions are likely to see more competition in the loan area, based a new report released Dec. 6 that examines recent growth in person-to-person (P2P) lending. The report by Javelin Strategy & Research reveals the primary users of P2P, their motivations and the potential impact on financial institutions. Demand for P2P lending services to help consumers to pay off credit card debt could grow to $159 billion from $38 billion during the next five years, Javelin predicted (Business Wire Dec. 6). Young adults--age 25-34--and high-income consumers--with incomes over $150,000 per year--are the two main groups turning to P2P lending, Javelin found. Potential savings on an interest rate or profit on a loan are the primary reasons consumers take out person-to-person loans, the study said. However, different consumer groups displayed different reasons for participating in person-to-person lending, the study indicated. For all of the 2,200 consumers surveyed, key factors were: to avoid the use of credit cards and to help someone obtain a loan who otherwise couldn’t get a loan. For higher-income consumers, the primary reason was to participate in an online lending community.

Chinese officials visit U.S. CU movement

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MADISON, Wis. (12/17/07)--Seven officials from Chinese cooperatives, regulatory agencies and the People's Bank of China (PBC) spent a week observing the U.S. credit union operations and visiting regulators and trade association officials to learn how U.S. credit unions operate.
Click to view larger imageYu Li, center, research bureau director for the People's Bank of China, is welcomed by Dan Mica, president/CEO of the Credit Union National Association, on her left, and Ralph Swoboda, World Council of Credit Unions' (WOCCU) China consultant, on her right, during the Chinese delegation's visit. Other delegation participants are from left: Amy Yin Jin, Lei Zhijian, Zhang Ruibin, Liu Naiyun, Sun Yong, Zhang Li, Zhang Mingquan and WOCCU staffer Dave Grace. (Photo provided by the World Council of Credit Unions)
They hope to transfer the knowledge gained to China's growing cooperative movement. The delegation arrived in Washington, D.C. on Dec. 8 and met with government and trade association officials before flying cross-country to visit credit unions in southern California. "The Chinese delegation came to learn from the most developed credit union movement in the world," said Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU), which hosted the delegation. He noted the visit provides "tangible examples of the roles credit unions play and how effective credit unions can be in serving their members," Crear said. Delegates from PBC and the Guizhou (China) Provincial Rural Credit Cooperative Union (RCCU) visited the National Credit Union Administration, and the Washington offices of the Credit Union National Association (CUNA) and WOCCU. Discussion topics included insurance and examination procedures, credit union operations and public and congressional affairs. "We were impressed by the extensive network of rural cooperative financial institutions that have been established in China and the people's dedication to helping those of modest means in rural areas develop some degree of financial security," said Dan Mica, president/CEO of CUNA. "We hope they learned from their visit with us not only how credit unions are regulated in this country, but how credit unions go about making their voices heard by government officials through unfettered advocacy efforts," Mica said. The trip follows earlier visits WOCCU officials made to China to assess the country's cooperative movement and the likelihood of developing credit unions there. They plan to continue those efforts in additional meetings during WOCCU's World Credit Union Conference July 13-16 in Hong Kong. In California, the delegation met with officials at Arrowhead Central CU, WesCorp FCU and the California Credit Union League. The group visited multiple branches of San Bernardino-based Arrowhead to examine different ways it serves its members, said Arrowhead President/CEO Larry Sharp. The last of the delegation will depart Los Angeles today for Beijing.

CEO of converted CU to retire

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ROCHESTER, Minn. (12/17/07)--Paul Horgen, CEO of Think Mutual Bank, formerly Think CU, will retire in 2008--no later than the fourth quarter, he announced Wednesday. Succession plans are yet to be announced (Post-Bulletin Dec. 14). Horgen has been in charge of the Rochester-based Think for more than 20 years. In 2003, Horgen was the driving force behind the name change from IBM Mid-America Employees FCU to Think CU. Previously, he was CEO of Moose Lake CU in Minnesota. Think FCU's application to convert to a mutual savings bank was approved by the Office of Thrift Supervision (OTS), effective July 1 (News Now June 13). Members voted 51% to 49% in favor of the change, with 24,807 members out of more than 80,000 eligible voters casting ballots. The results were announced at a special meeting March 14 attended by about 200 people (Post-Bulletin March 14). Think CU was founded as IBM Mid-America CU, 46 years ago by employees of International Business Machines. It has nearly $1.3 billion in assets.

Several CUs announce dividends

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MADISON, Wis. (12/17/07)--A number of credit unions announced the distribution of dividends to their members, including a dividend of $6 million by CEFCU in Peoria, Ill. CEFCU’s dividend was based on members’ savings and loan activity during 2007, with $3 million going to borrowers and $3 million to savers. The amount each member received was determined by dividends earned and interest paid as of Nov. 30. On Dec. 10, CEFCU dividends were deposited into members’ accounts. “Members have been extremely responsible in handling their loans, and staff continue to be diligent in their efforts to control expenses, which allows CEFCU to return more to members,” said Helen J. Young, CEFCU board chairman. CEFCU has $3.3 billion in assets. Eastman CU in Kingsport, Tenn., recently approved a $4 million dividend, which will be deposited into members’ savings accounts in 2008. The dividend was so large because of the institution’s capital position, cost-effective management, and members’ extensive use of products and services, said Eastman CU CEO Olan O Jones Jr. ( Dec. 13). SB1 FCU of Philadelphia gave its members a dividend worth more than $1 million last week (Life is a Highway Dec. 14), and Hawaii State FCU in Honolulu distributed $2 million to members in bonus dividends and loan interest rebates. The bonuses and rebates were based on dividends earned and interest paid from Jan. 1 through Sept. 30. This year is the 12th consecutive year that Hawaii State FCU has returned money to its members, according to President Deborah Kim (Honolulu Advertiser Dec. 12).

Texas city considers charge for in-school branches

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GALVESTON, Texas (12/17/07)--In a matter that could have repercussions for other credit unions, two credit unions that operate on school property in Galveston may have to pay rent in the future. The Galveston public school district met Wednesday night to begin considering the matter. Galveston School Employees FCU is in a portable building behind Alamo Elementary School, and Island Teachers FCU is on the second floor of Ball High School (The Daily News Dec. 12). While the credit unions have used school property for several decades, they don’t pay to lease the spaces, and the school district pays the credit unions’ maintenance and utility fees. The district administration did not make a recommendation for action on the matter at the Wednesday meeting. District Superintendent Lynn Cleveland said the trustees could either continue to allow the credit unions to operate for free or charge them a minimal fee for use of school property and services. Cleveland added that the credit unions’ no-fee arrangement could be construed as gift of public funds, which the school district is not supposed to allow, according to it policy. Nationwide, self-reported credit union statistics compiled by the Credit Union National Association indicate that 165 credit unions in 30 states and the District of Columbia have branches in 567 schools.

African-American coalition seeks internships

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SHREVEPORT, La. (12/17/07)--The African-American Credit Union Coalition (AACUC) is accepting applications from college students for the AACUC Internship program for fall 2008. The deadline for applications is Feb. 29 (LoneStar Leaguer Dec. 14). Through the program, African-American and African students enrolled in colleges and universities can experience the operations and benefits associated with credit unions and the credit union industry. The purposes and goals of the program include:
* Expanding the interest and increasing the number of minorities in the credit union movement; * Increasing outreach of credit unions in African countries and in the U.S. through credit union mentoring; * Providing scholarship programs and educational opportunities, as well as advancement, for credit union professionals and volunteers; * Enhancing internships and scholarships for African-American and African-descent college students pursuing financial-service careers; and introducing them to, and encouraging them to seek, employment within the credit union movement; and * Providing students enough practical experience to apply for management and other staff positions at credit unions after they graduate.
College juniors and seniors with majors in business, accounting, marketing or computer science are eligible for the program. For more information, use the link.

SECU to assist states teachers with housing

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RALEIGH, N.C. (12/17/07)--The State Employees’ CU Foundation has agreed to provide a $2.25 million interest-free loan to help build a new affordable housing complex to benefit Dare County, N.C.- area teachers. The deal was finalized this week (Virginian-Pilot (Dec. 14). The Dare Education Foundation applied for a loan from the credit union in hopes of bringing more quality teachers to the area by providing housing. High living costs had made recruiting difficult, the newspaper stated. The complex could be ready with 24 two-bedroom apartments for the 2008-2009 school year. The Dare County project mirrors the building of an apartment complex in Hertford County with a loan from the credit union’s foundation. That complex opened in August and was filled with teachers after one month. The foundation agreed to provide the Dare County loan because the Hertford County project was successful.

CUs Biz Kid to air on 105 stations in 26 states

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FEDERAL WAY, Wash. (12/17/07)--Starting in January, 105 PBS television stations will broadcast the Biz Kid$ TV series to teach youth about finances. The 26-episode series is underwritten by America’s Credit Unions. It will air in the nation’s top three markets: Los Angeles, New York City and Chicago. Alabama, Indiana, Kentucky, Montana, New York, North Carolina, New Jersey, Rhode Island and Vermont have committed to broadcasting the series as well. Additional cities planning to broadcast BizKid$ include: Austin, Texas; Dayton, Ohio; Detroit; Jacksonville, Fla.; Las Vegas; Milwaukee; Oklahoma City; Salt Lake City; San Antonio; Tempe, Ariz.; Washington, D.C., and Wichita, Kan. Biz Kid$ also will air on high-definition (HD) channels on Sundays at 5 p.m., beginning Jan. 27. The program already airs in the United Kingdom and Ireland. The National Credit Union Foundation (NCUF) is the largest funder of the underwriting group. NCUF committed $2 million over three years from a sub-fund of its Community Investment fund. “This TV series, together with the teaching curriculum being produced in part with Junior Achievement, will fulfill a key part of our mission: to bring financial education and literacy to our nation’s youth,” said NCUF Executive Director Steve Delfin. Each episode of Biz Kid$ will come with teaching materials developed by Junior Achievement. Companion materials and other resources for teachers and parents are available at The site also features clips from the series and invites youth to appear on the show. Website visitors also can sign up for the Biz Kid$ monthly newsletter, The Vault. “We profile real kids running real businesses, from big companies with product lines to small businesses like dog-walking,” said Biz Kid$ Executive Producer Jamie Hammond. “The series also shows kids running businesses to advance social causes and give back to their communities. This humanizes the financial literacy aspect of the production and shows kids the range of possibilities available to anyone who wants to become a Biz Kid.” The first 13 episodes have been produced and paid for, but underwriting funds are needed for the remaining 13 episodes. Supporters can contact their state credit union league for information on donating. Biz Kid$ is produced in association with Junior Achievement Worldwide and WXXI Public Broadcasting in Rochester, N.Y. Funding is provided by America’s Credit Unions, led by the NCUF and the Washington Credit Union Foundation. The Biz Kid$ team created and produced Bill Nye the Science Guy, which received 26 national Emmys and the National Science Board Public Service Award.

Near collapse of CU prompts reform in New Brunswick

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FREDERICTON, N.B. (12/14/07)--The New Brunswick legislature is calling for recommendations on strengthening the province's Credit Union Act to avoid a repeat of the near-collapse of a credit union. In March, the province's government approved $60 million to bail out the Caisse Populaire de Shippagan after it accumulated a $33.7 million deficit through improper accounting and loans (The Canadian Press Dec. 12). The bailout included a $31.5 million grant, a $10 million loan through stabilization shares of the credit union, and another $18.5 million earmarked as provisional funds for the New Brunswick Credit Union Deposit Insurance Corp. The legislature was scheduled to release a discussion paper Thursday--the first step in drawing up amendments to the act, said the New Brunswick Justice Department. The paper asks for recommendations on how to ensure the credit union system is adequately capitalized, how to strengthen regulators, how to improve governance structures, and how to avoid future conflicts of interest. The Justice Department said it wants to move to a system where credit unions and caisse populaires placed under government supervision must comply first to regulations before appealing.

Former CU terminates second-step conversion

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WAYCROSS, Ga. (12/14/07)--A second-step conversion and public offering for a former Georgia credit union has been terminated, the holding company for Atlantic Coast Bank announced Wednesday. “Market conditions for bank and thrift stocks, especially in the Florida market, have changed significantly since we began the stock offering process seven months ago,” said Atlantic Coast Federal Corporation President/CEO Robert J. Larison Jr., referring to the mortgage crisis. In November, the community portion of its second-step offering had been extended to Dec. 28. However, because subscriptions from depositors received to date were not sufficient to reach the minimum of the offering range, the second-step conversion was terminated (Business Wire Dec. 12). The recently formed Maryland corporation is the proposed holding company for Atlantic Coast Bank and a successor company to Atlantic Coast Federal Corp. The bank was organized in 1939 as Atlantic Coast FCU to serve employees of the Atlantic Coast Line Railroad. In November 2000, the credit union converted to a federal mutual savings association charter. In January 2003, Atlantic Coast Federal Corp. was formed as the holding company. Atlantic Coast Federal Corp. completed its initial public stock offering in October 2004 (News NowOct. 19).

Latino CU wins 5.5 million national award

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MIAMI (12/14/07)--Latino Community CU (LCCU) of Durham, N.C., has won a $5.5 million grant that will help support its expansion. LCCU plans to expand into three new markets with the help of the $5.5 million Wachovia NEXT Award for Opportunity Finance, announced Wednesday at the Opportunity Finance Network conference in Miami. The NEXT awards recognize community development financial institutions (CDFIs) with “exceptional track records.” “The Wachovia NEXT Awards for Opportunity Finance are designed to propel CDFIs such as LCCU to the next level of growth, success, and staying power with a major one-time infusion of capital,” said Mark Pinsky, president/CEO of Opportunity Finance Network. The Wachovia Foundation, the John D. and Catherine T. MacArthur Foundation and the Opportunity Finance Network created the awards. The Wachovia Foundation is a private foundation that provides grants to tax-exempt organizations in education and community development. The Opportunity Finance Network is a network of private financial intermediaries identifying and investing in opportunities to benefit low-income populations. The MacArthur Foundation has supported opportunity finance since the mid-1980s. LCCU was founded in 2002 to respond to violence against Latino residents in North Carolina. It is the first multicultural financial institution in North Carolina to provide all of its services in English and Spanish. LCCU also serves African and European populations. The credit union has $50 million in assets and 42,000 members. It has branches in Durham, Charlotte, Raleigh, Greensboro and Fayetteville.

Man arrested in slaying at CUs ATM

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NEWPORT NEWS, Va. (12/14/07)--A man has been arrested in connection with the shooting death of a sailor found in the parking lot of Langley FCU in Newport News seven months ago. Police arrested David A. Runyon, 36, Tuesday in Morgantown, W.Va., on charges of carjacking, attempted robbery, abduction, murder, and using a firearm during a felony in the shooting of 30-year-old sailor Cory Voss (McClatchy-Tribune Regional News Dec. 13). Voss left his home and drove to the Langley FCU ATM late at night on April 29, police said. After his wife report him missing the next morning, police found Voss in the driver’s seat of his pickup in the parking lot behind the credit union. He had died from a gunshot wound. ATM surveillance footage shows that a man wielding a handgun got into the passenger side of Voss’ truck when Voss pulled up to the ATM, police said. After unsuccessfully trying to withdraw cash from the ATM several times, Voss drove away with the gunman still in his truck. Police said they don’t know if Voss did not have any funds available to withdraw, or if he purposely entered the wrong information at the ATM to protect his funds at the credit union. They said Voss was shot because he didn’t deliver money to the killer.

National brand potential addressed in white paper

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MADISON, Wis. (12/14/07)--Should there be a national credit union brand? The background and issues behind this question are discussed in a new white paper from the Credit Union National Association (CUNA) Councils. “A National Brand for Credit Unions: A compendium of opinions about a national brand for the credit union industry,” from the CUNA Marketing and Business Development Council (CMBDC), offers historical perspective, expert opinion, and differing views on the issue. The three-section white paper explores:
* The big picture on branding. Branding consultants Paul and Mary Lucas explain the components and the meaning of a national brand campaign. They also offer examples of campaign successes and failures from other industries. * National branding and the credit union perspective. Credit union marketing consultants Dick Radtke and Lucy Harr detail the history of CUNA’s marketing and advertising campaigns, and the branding and fundraising efforts of several leagues and foreign countries. Comments are included from a spectrum of industry leaders about the possibilities of a national credit union brand. * Will it work? Credit union consultant Randy Harrington tells why he thinks a strong national brand is desirable but almost impossible to achieve.
During the 2008 CMBDC conference, March 16-19 in Nashville, Tenn., Harrington and Lucas will be point/counterpoint panelists for a session on implementing a national brand campaign. The council commissioned the white paper to help credit union professionals understand the important and complex concept of branding, and facilitate an informed and productive discussion, said CMBDC Chair and Vice President Mike Weber, marketing and public relations for Dupaco Community CU, Dubuque, Iowa. A new Cooperative Branding Showcase, available exclusively to all CUNA Council members, provides a snapshot of the state and national marketing and advertising programs in the credit union movement. CUNA Council members are entitled to a complimentary copy of the white paper; non-members may purchase the white paper for $50 per copy. For more information or to download the white paper, use the resource links.

HSFPP students assisted by CUs top half million

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MADISON, Wis. (12/14/07)--More than half a million students have participated in credit union-assisted High School Financial Planning Programs (HSFPP), as of Sept. 30, reports the Credit Union National Association (CUNA). Roughly 29,668 students received workbooks for financial education in 231 schools working with credit unions during the first half of the current school year, said Phil Heckman, CUNA's director of youth programs. That brings the total number of students benefiting from credit unions' financial education efforts in the HSFPP to 517,830 since the 2000-2001 academic year--the first year CUNA began tracking credit unions' participation. Overall, the HSFPP has educated more than four million students since 2000-2001. Currently it is educating 387,969 students in 6,305 schools. HSFPP is offered through the National Endowment for Financial Education. Credit unions work with Cooperative Extension in about 10% of the credit union-assisted programs.

CUs digging out in wake of storms

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MADISON, Wis. (12/14/07)--As credit unions in the Northeast braced for a major winter storm Thursday, credit unions in the Midwest were digging out from Tuesday's ice and snow storms. Oklahoma, Kansas and Missouri were hit hardest by ice storms Tuesday. The Oklahoma Credit Union League had just received its power and e-mail back Thursday, D.J. Morrow Ingram, league interim CEO, told News Now. The league is aware of three credit unions without power and about 25 that were affected by the ice storm. Two of six league stand-alone service centers were down during the storm, but are “up and running now,” Ingram said. Of the 15 league employees, only two had homes with power until late Wednesday. No damage has been reported to the league yet, but it is still monitoring the situation, she said. Four of Oklahoma Central CU’s nine branches were without power Monday, Rick Loyd, executive vice president of business development, told the Tulsa World (Dec. 11). About 80% of the credit union’s staff is without power, he noted. As of Thursday afternoon, two of the credit union’s branches were still closed, according to a recorded message on the credit union’s main phone line. In Missouri, nearly 160,000 homes and businesses were without power from downed power lines due to the ice storm, said the Missouri Credit Union Association (CourierNet Dec. 12). The central and southern sections of Missouri had been hit by a Dec. 9 storm, while the Dec. 11 storm targeted northern parts of the state. Northwest Missouri Regional CU in Maryville told MCUA it lost power to its main location and branch Tuesday. District One Highway CU, St. Joseph, was without power through Wednesday. A snowstorm in southern Wisconsin with icy road conditions closed the Credit Union National Association's Madison campus at 3 p.m. Tuesday. However, some staff stayed later or worked remotely from home. The area had accumulated 21 inches of snow since Dec. 2 (Wisconsin State Journal Dec. 12). The southern Milwaukee area was hard-hit with the snowstorm, Wisconsin Credit Union League director of communications Chris Olson reported to News Now. Among the credit unions closed early due to icy road conditions were Guardian CU, West Allis, which closed at 1:30; Enterprise CU, Elm Grove; and Wauwatosa CU, Menomonee Falls. Avestar CU, Waterloo, sent staff home early but kept a minimum number of staff to "hold down the fort." In Illinois, Will Willie, public relations specialist for the Illinois Credit Union System, told News Now that "in general, we fared a lot better than those in Oklahoma and Kansas." The league itself, which is in the northern part of the state near Chicago, "was unaffected. It was rainy and messy, but we stayed all day just above freezing, so the weather was almost a non-issue." The league had no reports from field staff in areas affected by icy weather.

ICUL Service Corp. Members United combine check processing

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WARRENVILLE, Ill. (12/13/07)--ICUL Service Corp. and Members United Corporate FCU have consolidated their check-processing programs, effective Monday. The combined program is owned and operated by Members United. The service corporation had provided share draft item-processing services to Illinois credit unions as Service Corp. Item Processing (SCIP). SCIP served about 175 credit unions in the Seventh Fed District (Chicago). Eighth Fed District (St. Louis) credit unions are not affected by the consolidation. "The primary reason for this consolidation was to provide the highest possible value to member credit unions for their share draft processing needs," said David Preter, president of Members United. "It's an economies-of-scale business, and our combined large scale helps us keep costs down. This allows credit unions to continue to offer a competitive share draft product to their members," Preter said. Members United, headquartered in Warrenville, Ill., is a $12.7 billion asset corporate that serves nearly 2,300 credit unions nationwide.

Corporate advises CUs to look to longer-term CDs

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MIDDLETOWN, Pa. (12/13/07)--In the wake of Tuesday’s Federal Reserve decision to cut the Fed Funds rate by a quarter percent to 4.25%, a corporate investment officer indicated that there was general dissatisfaction in the market with the move, but added that credit unions should look to longer-term certificates of deposit (CDs) to bolster their financial future. Brad C. Stewart, vice president/chief investments officer at Mid-Atlantic Corporate FCU in Middletown, Pa., told the Pennsylvania Credit Union Association that the investment markets were disappointed that the Fed Funds rate cut wasn’t bigger (Life Is A Highway Dec. 12). Stewart advised credit unions to:
* Look into a longer term (one to-two-year) CD, since current CD rates are higher than overnight rates, which should decline heading into the new year; and * Follow your investment policy, and review it regularly. It’s not necessary to change it, but now is a good time to examine the safety, liquidity and yield principles behind members’ current policies.
Credit unions usually are slow to re-price rates to their members on both sides of the balance sheet, Stewart added. He said he anticipates lower interest rates throughout 2008 and urged credit unions to examine their current interest-rate mix for 2008.

Meadowland CUs personal service marks 50 years

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SHEBOYGAN FALLS, Wis. (12/13/07)--Meadowland CU of Sheboygan Falls is celebrating its 50th anniversary. While the 1,851-member credit union offers products competitive with larger financial institutions, it maintains a history of personal service, reports the Sheboygan Press (Dec. 9). Kathy Zimbal, a member of Meadowland, said “it’s awesome” that tellers know her by name. Most members feel like they belong at Meadowland when the staff knows who they are, said Chris Kuitert, secretary of the credit union’s board of directors. Allan Kraus, Meadowland president/CEO, who has been with the credit union for two years, also is committed to personal service. He individually meets with members who have questions. Kraus, 48, has 20 years’ experience working in financial institutions. It’s rare to find a place where members can “sit down and talk to the president,” he told the newspaper. Meadowland also has an ATM machine, shared with Kohler CU. Next year, the credit union will offer online bill pay and individual retirement accounts, providing its members “everything the big boys offer,” Kraus told the newspaper. The credit union also has a branch at Sheboygan Falls High School, which serves faculty and students. Meadowland’s high school branch also promotes financial education. Meadowland has $7.25 million in assets. Its loans, assets and savings have seen double-digit growth this year, Kraus told the newspaper. Meadowland CU was created in 1957 to serve employees of Bemis Manufacturing Co. It expanded its charter about 10 years ago to include anyone living or working in Sheboygan County. The charter has brought in 400 new members within the past decade, said the article.

CUNA expert to IPC WorldI Avoid HDTV 0 financing

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SAN FRANCISCO (12/13/07)--Consumers thinking about buying a high-definition television (HDTV) under a 0% financing or a retail store credit card deal during the holidays should think again, according to Jim Hanson, vice president of the Credit Union National Association’s Center for Personal Finance. Hanson was interviewed by PC World for an article published Dec. 11 about HDTV buying tips. The article stated that many retail stores offer deals on HDTVs over the holidays. Hanson suggested that most people should avoid store gimmicks--such as 0% financing or a certain percentage off when opening a retail store credit card. Store credit cards have low limits and high fees, Hanson said. Consumers interested in buying high-priced items should look into low-interest credit cards from a credit union. “It boils down to simple elementary advice that never changes,” Hanson told PC World. “Cash is always best. If you need a special promotion to buy an HDTV, you can’t afford it.” Lynnette Khalfani-Cox, author of Zero Debt for College Grads, echoed Hanson’s thoughts. People who qualify for 0% financing often think they can afford to buy expensive items, but credit card companies do not look out for consumers’ best interests, she told the magazine. Also, some consumers are required to pay interest if they can’t pay off an HDTV during a promotional period, she said.

Washington state regulators OK CUs to convert MasterCard stock

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OLYMPIA, Wash. (12/13/07)--Washington state’s credit union regulators Monday gave the OK for state-chartered credit unions to convert their nonmarketable Class A shares in MasterCard Inc. to Class B shares. Class B shares can be sold on the open market. According to Linda Jekel, director of credit unions at the Washington Department of Financial Institutions (DFI), credit unions may continue to hold the stock, even though state law prohibits credit union from owning equity, because they obtained the shares in an unusual IPO. MasterCard requires financial institution shareholders who received Class B shares in its May 2006 initial public offering (IPO), to convert to Class A shares. Although they can convert shares already owned, credit unions may not buy or sell additional MasterCard shares on the market. Jekel said examiners may require a credit union to divest the shares if they decide the stock is not safe and sound. Washington state-chartered credit unions can be approved to hold MasterCard Inc. Class B shares by applying with DFI, Jekel told News Now. “DFI will approve Washington state-chartered credit unions to hold MasterCard stock because they have received it, not as a purchase, but rather from a business decision made by MasterCard,” she explained.

Study CUs gained majority of auto customers who refinanced

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WESTLAKE VILLAGE, Calif. (12/13/07)--Credit unions acquired the majority of consumers who refinanced their initial vehicle contracts in 2007, according to J.D. Power and Associates 2007 Consumer Financing Satisfaction Survey, released Tuesday. Credit unions gained 51% of "captive" customers and 58% of banking customers who refinanced, said the firm. In 2007, roughly 2% of new-vehicle financing customers refinanced their indirect loan, resulting in $4 billion in originations. The most common reason for refinancing--provided by 83% of refinancing customers surveyed--is to find a more competitive interest rate. The survey, in its 12th year, measures customer satisfaction with new-vehicle financing process on four factors: provider offering, application/approval process, payment/billing process, and customer contact experience. BMW Financial Services, Ford Credit, Honda Financial Services and Lexus Financial Services each ranked highest in satisfying customers with certain aspects of the new-vehicle financing process. Credit unions were not among institutions ranked in the survey. The percentage of consumers using the Internet to research finance options has declined since 2004. However, among consumers using the Internet for research, those who submitted an online application increased. According to Richard Howse, director of the automotive finance practice at J.D. Power, "Fewer casual shoppers are using the Internet simply to browse for information about their financing options. Instead, more serious and Internet-savvy customers are using this channel to access specific information about their finance options and then proceeding to apply online for a loan." He noted the trend suggests that "customers are feeling more comfortable with sharing their personal information online via these provider channels and may also prefer the convenience aspects that the Internet brings."

Utah regulator appointed to NASCUS Board

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ARLINGTON, Va. (12/13/07)--Orla Beth Peck, supervisor of credit unions for the Utah Department of Financial Institutions, has been appointed to the National Association of State Credit Union Supervisors board of directors. She was appointed Dec. 5 by Georgia regulator and NASCUS Chairman George Reynolds. In 1981, Peck began her 26-year career with the Utah agency as a credit union examiner. Since 1992, she has served as credit union supervisor. She is the chairman of NASCUS Performance Standards Committee and the National Institute for State Credit Examination Board of Trustees--NASCUS’ educational foundation. Peck also is the treasurer of the Utah Jump $tart Coalition for Financial Literacy. Peck will fill an unexpired term left by the resignation of Beth Dooley. Dooley recently left the California Department of Financial Institutions to become president/CEO at Educational Employees CU in Fresno, Calif. Peck’s term will end September 2008.

CU System briefs (12/12/2007)

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* TROY, Mich. (12/13/07)--Fourteen Detroit area credit unions and banks put competition aside to help the Gleaners Community Food Bank overcome a shortfall in donations. Together, the financial institutions are offering more than 226 branches to collect donations during December. Their goal is to raise $500,000 to help fight hunger in southeastern Michigan. Credit unions participating include: Bi County PTC FCU, Detroit Edison CU, FME FCU, Lakes Community CU, Michigan Catholic CU, Oakland Catholic CU, Northwood CU, Oakland County CU, and Peoples Trust CU (PRNewswire Dec. 10) … * DOVER, Del. (12/13/07)--Dover FCU recently held the official grand opening of its new corporate center, located in a remodeled call center building on the shores of Silver Lake. Dover FCU is the Delaware's largest credit union, with $220 million in assets. The corporate center is the cornerstone to expanding beyond the current 35,500 members, said Russell L. McCready, board chairman. Dover FCU was formed by civilian workers at Dover Air Force Base, and now serves companies in Delaware and Maryland, along with the military and their families from the base and the Dover Air National Guard. The credit union plans to open locations in Milford, Camden, and New Castle, Del., in the next few years. Attending the grand opening were (from left): David Clendaniel, president/CEO; Delaware State Rep. Nancy Wagner; McCready; Martin Talmud, Dover FCU board member; and Col. Randal L. Bright, Commander 512th Airlift Wing. (Photo provided by Dover FCU) … * FORT WORTH, Texas (12/13/07)--American Airlines FCU in Forth Worth has given away another new vehicle to a credit union member as part of the 2007 Road to Success Sweepstakes, which ended Nov. 30. Spencer Deaton, 23, was the final grand prize winner--the fifth winner since the sweepstakes began--of a 2007 Toyota FJ Cruiser. Deaton opened his account at the credit union as a teenager and attended a local college with an education loan from the credit union. He entered the contest for the vehicle online at the urging of his father, another credit union member. From left are: American Airlines FCU CEO John Tippets, and the Deaton family: Drew, Spencer, Charlene and Fulton Deaton. (Photo provided by American Airlines FCU) … * WINNIPEG, Manitoba (12/13/07)--Emelda Marie Cuddy, a former budding pop star known as Marie Reimer, has been charged with robbing six Winnipeg credit unions. Cuddy, 24, a native of Belize, was at one time about to release a CD (National Post Dec. 12). Police said more than $35,000 was stolen from six Winnipeg credit unions between July and December. In the robberies, the suspect concealed her face and wielded a weapon on two occasions. Cuddy was arrested Dec. 7, as she attempted to cross the border into the U.S. She faces charges of four counts of robbery, two counts of robbery with a weapon, and six counts of wearing a disguise to commit a crime … * HUBER HEIGHTS, Ohio (12/13/07)--Juackine Wilson, 37, of Akron, Ohio, was sentenced to 10 years in prison for robbing the Wright-Patt CU branch in Huber Heights on Aug. 25, 2003. U.S. District Court Judge Thomas Rose handed down the sentence Nov. 30. In August, Wilson pleaded guilty to one count of bank robbery. In the robbery, he demanded the teller empty both credit union cash drawers, said the U.S. Department of Justice (State News Service Dec. 3). No weapon was used in the heist. Wilson also was ordered to pay restitution to the credit union. He will serve three years of supervised release at the conclusion of his 10-year prison term …

Vermont Peru CUs sign partnership agreement

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RUTLAND, Vt. (12/13/07)--In a show of mutual support, a partnership agreement was signed Tuesday between Heritage Family CU, Rutland, Vt., and Cooperativa de Ahorro y Credito ABACO, Lima, Peru.
Ron Hance, seated, CEO of Heritage Family CU, and Rocio Miyashiro Kiyan, right, CEO of Cooperativa de Ahorro y Credito ABACO, sign their credit unions' partnership agreement Tuesday. Also present are, standing from left: Victor Corro, World Council of Credit Unions (WOCCU) International Partnerships manager, and Manuel Rabines Ripalda, CEO of Federacio Nacional de Cooperatives de Ahorro y Credito del Peru and WOCCU board member. (Photo provided by the World Council of Credit Unions).
The credit-union-to-credit-union (CU2CU) partnership is a byproduct of the partnership between the Association of Vermont Credit Unions and the Federacion Nacional de Cooperativas de Ahorro y Credito del Peru (FENACREP). That partnership was signed in May in Lima, and is part of the World Council of Credit Unions’ (WOCCU) International Partnership Program. The arrangement will enable the Peruvian credit union to work closely with its Vermont counterpart to the mutual benefit of both parties. Rocio Miyashiro Kiyan, CEO of ABACO, and Manual Rabines, CEO of FENACREP and member of the WOCCU board of directors, traveled to Vermont Tuesday for the event. Kiyan and Ron Hance, president/CEO of Heritage Family CU and a WOCCU board member, formally signed the agreement pledging support on behalf of each credit union. The relationship evolved from a trip Hance and other credit union and association staff took to Peru in May. The challenges faced by Peruvian credit unions were similar to those that had earlier faced U.S. credit unions, Hance said. The three-day meeting led to plans for helping the relationship evolve into one of mutual service, said Hance. An employee exchange program will be a central part of the partnership. The partnership "pulls the two cooperatives together to help one another,” said Hance. “This is a good forum for all involved and will lead to highly valued friendships between the two countries’ credit union communities.” While in Vermont, Rabines and Kiyan were invited by the Rutland Chamber of Commerce to speak on public access television. They also visited several of Heritage Family CU’s branches, including a student-run, in-school branch, and attended an Association of Vermont Credit Unions board meeting in Burlington. WOCCU’s International Partnership Program supports 26 partnerships between U.S. credit union leagues and their counterparts in other countries.

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.

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.

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).

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.

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).

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.

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.

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.

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.”

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) …

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.

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.

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

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.

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.

Florida AG CU target of brazen e-mail scam

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TALLAHASSEE, Fla. (12/10/07)--Florida Attorney General Bill McCollum recently informed the public that many Florida consumers, including state employees, have received fake e-mails from scammers who are fraudulently posing as representatives of First Florida CU. The scam is especially brazen because it appears to be an authentic warning about identity theft and phishing attempts, often including a signature from a credit union security manager (US Fed News Dec. 6). The messages claim members of First Florida CU--a $310 million asset, Jacksonville-based credit union--have been the targets of phishing attempts, and to protect their financial information, members need to log into the website--provided through a link in the e-mail--and list their account numbers and personal identification numbers. First Florida has confirmed that the e-mails are fake. McCollum stated that recipients of these types of e-mails should immediately contact their credit union or financial institution, as well as the attorney general’s office.

CU System briefs (12/07/2007)

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* CLATSKANIE, Ore. (12/10/07)--Wauna FCU in Clatskanie is working with county emergency service officials to distribute donations to those affected by recent flooding in the Pacific Northwest. The credit union has opened donation accounts for both Clatsop and Columbia counties. The public can make monetary donations and can wire funds from any credit union or other financial institution. Wauna has branches in Astoria, Clatskanie, St. Helens, Vernonia and Warrenton ... * FEDERAL WAY, Wash. (12/10/07)--A recent survey of financial institutions by Consumers’ Checkbook, a non-profit consumer magazine, indicated that Puget Sound, Wash., credit unions beat banks in overall service. Eighty percent of credit union members surveyed gave their financial institution a superior rating, compared to 77% of bank customers. And 77% of credit union members gave their financial institution a superior rating in the reasonableness of fee policies, compared to 62% of bank customers. What’s interesting about the survey, according to Washington Credit Union League President/CEO John Annaloro, is that bank branches outnumber credit union branches 6-to-1, yet one-third of the people surveyed were credit union members … * CHICAGO (12/10/07)--William F. Schraft, 93, former board chairman at Bensenville Community CU in Bensenville, and a previous Illinois Credit Union League director, has passed away (Chicago Tribune Dec. 6). Schraft was a credit union volunteer and held positions in a number of credit union offices. He was also a tool maker … * SPARTANBURG, S.C. (12/10/07) Sharonview FCU in Fort Mill, S.C., recently assisted one of its members who experienced an $8,000 billing mistake. The credit union had contacted the member, Kitty Forry, about an $8,105 overdraft on her account ( Dec. 5). When Forry saw the charge, she realized that she’d left out a decimal point when paying her cell phone bill online. Sharonview provided proof of the error to Forry’s cell phone company, and along with the help of a local television station’s “7 On Your Side” consumer problem-solver, Forry was able to get her money back. Sharonview employee Amanda Butler, who helped Forry, advised members to check their transactions when paying bills online to avoid mistakes …

Alabama league hosts 2007 development conference

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BIRMINGHAM, Ala. (12/10/07)--More than 230 credit union professionals gathered at the Alabama Credit Union League’s 2007 Development Conference, making it one of the best-attended development conferences in league history. The conference was held Nov. 28-30 in Savannah, Ga. Professionals and volunteers representing 44 credit unions, 123 guests and 23 vendor organizations were in attendance. “It’s more important than ever that credit unions take advantage of league offerings as well as use peer discussions, to further the future of their individual credit unions, as well as the future of the credit union movement,” said Gary Wolter, president/CEO of the league. The conference opened and closed with three featured speakers, including former NBA star Walter Bond, who talked about personal determination. The conference featured sessions including:
* Maverick Marketing: Create Award-winning Marketing on a Shoestring Budget; * Discovering and Evaluating Untapped Markets; * Motivating Directors: Dos and Don’ts from a Burned-Out CEO; * Innovative Operational Models to Help Your Credit Union Thrive and Survive; * The Board-CEO Relationship Dynamic: Making it a True Partnership; * Mobile Banking--Making it Work for You; * Product Pricing: Everything Can’t Be a Loss Leader; and * The Intrigue of Delivering Business Services Lending.

SECU Foundation to provide affordable housing for teachers

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RALEIGH, N.C. (12/10/07)--Teachers in Dare County, N.C., may have more affordable housing options due to help provided by the State Employees CU Foundation. The foundation board recently approved a plan to provide affordable housing for teachers in Dare County, according to G. Mark Twisdale, foundation executive director (Virginian-Pilot Dec. 7). Details have yet to be finalized. The foundation met with Dare County educators Friday about the project, with more details expected this week. In August, the foundation provided a $2.2 million interest-free loan for a 24-unit apartment complex in Hertford County to help teachers. All of the units have been rented. The school district struggles to find quality teachers because area living expenses are so high. A Dare County Schools report indicated that at least 30% of teachers employed in 11 of the district’s schools work second jobs during the academic year to make ends meet. In three of the schools, 40% of teachers reported having outside jobs, and at Cape Hatteras Elementary, 58% of teachers reported working second jobs, the newspaper said. State Employees CU, based in Raleigh, has $14 billion in assets.

PCUA vice president interviewed for card refund story

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HARRISBURG, Pa. (12/10/07)--Corinne Sherman, Pennsylvania Credit Union Association (PCUA) vice president, was interviewed Thursday by a local television consumer news reporter, regarding a recent class action lawsuit settlement involving Diner’s Club, Visa and MasterCard. The lawsuit was filed to try and recover a non-disclosed 3% currency conversion fee charged to cardholders who purchased items outside of the U.S. between 1996 and 2006. The court ruled in favor of the cardholders. The U.S. District Court of Philadelphia recently sent letters to cardholders eligible for at least $25 in refunds (Life is a Highway Dec. 7) The card companies “add a fee automatically for the currency conversion. What happened was they had this fee in place and it wasn’t disclosed anywhere…they have to reimburse everybody who had an international transaction through a ten-year period,” Sherman told WHTM (Dec. 6). Cardholders can request refunds by providing proof of purchases and their credit card account numbers to the companies.

CDCUs in New York City join to fight poverty homelessness

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NEW YORK (12/10/07)--The National Federation of Community Development Credit Unions (Federation) hosted a gathering earlier this month to expand CDCU participation in New York City’s antipoverty initiatives and to help the Office of Financial Empowerment (OFE) gather input about their new programs.
Cathie Mahon (right), executive director of New York City’s Office of Financial Empowerment, talks about various asset-building initiatives being implemented by her office, during a recent gathering held by the National Federation of Community Development Credit Unions at its New York City offices. (Photo provided by the National Federation of Community Development Credit Unions)
The gathering at its offices brought together community development credit union (CDCU) leaders from New York City for a meeting with representatives of New York City’s OFE and Department of Homeless Services (DHS). During the meeting, OFE representatives spoke about the various programs and studies underway at the agency and requested feedback to increase CDCU involvement in the various initiatives. Some of the new initiatives include:
* Expansion of CDCU participation in the Earned Income Tax Credit (EITC), which has helped New York City’s low-income families claim millions of dollars in tax credits from the federal government; * Development of a financial literacy database, both online and through the City’s 311 telephone information clearinghouse program, which would link individuals with local organizations that conduct trainings; and * Extension of credit union service to participants in the city’s Work Rewards Program.
One of the first agencies of its kind in the nation, OFE was created nearly one year ago as part of Mayor Michael R. Bloomberg’s PlaNYC initiative. Housed under the city’s Department of Consumer Affairs, OFE is charged with the coordination and development of citywide efforts to alleviate poverty. OFE was represented by its executive director, and former Federation Senior Consultant, Cathleen Mahon; Senior Deputy Director Millard Owens; OFE Deputy Director Donna Lennon; and Director for Evaluation and Analysis Caitlyn Brazill. “All of us at OFE understand the vital role community development credit unions play in supporting some of the most impoverished communities in New York City. For us it is important that in addition to banks, other community controlled financial institutions be a part of the solution,” Mahon explained. “DCA Commissioner Jonathan Mintz understands this, as does Mayor Bloomberg. That is why he announced this creation of our office last year at the city’s largest CDCU, the Lower East Side People’s FCU,” she continued. Ellen Howard-Cooper, deputy commissioner of DHS, who also presented at the session, hopes to link more credit unions with homeless families moving into transitional housing through the City’s Work Advantage program. The program, which subsidizes one year of rent for homeless families and individuals who work full or part-time, also promotes savings by matching participants’ savings up to 20% of the total monthly rental amount. “CDCUs already provide much of the essential wealth-building services and financial education that are so badly needed by these transitional populations,” Howard-Cooper explained. “Their involvement would support this program by providing participants with the tools they need to become productive and self-sufficient residents.” “It is extremely rewarding to see New York City finally utilize the knowledge and experience of CDCUs in development of its antipoverty efforts,” said Federation President/CEO Cliff Rosenthal. “For far too long, the work of CDCUs has gone on largely below the radar, but this has begun to change, and it is truly gratifying to see their innovative efforts highlighted so prominently in the city’s agenda.”

Iowa CUs participate in state investment program

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DES MOINES, Iowa (12/10/07)--Iowa credit unions are getting involved with the State Treasurer’s Small Business Linked Investments for Tomorrow (LIFT) program. The program facilitates the growth of Iowa small businesses by providing low interest loans. Iowa credit unions have partnered with Community Business Lenders, a credit union service organization specializing in member business loans, to offer business loans to Iowans. Through this partnership, credit unions are able to offer business loans to their members, and are working to sign agreements with the state treasurer’s office to take part in the LIFT program. Affinity CU, a $52.1 million asset, Des Moines-based institution, recently funded a LIFT loan for Carole Eckles-Harding to purchase a permanent lighting franchise, ChannelBrite in Polk County. “Using the LIFT program was shockingly easy,” said Eckles-Harding. “They had the whole thing taken care of in just about two hours.” ChannelBrite is unique in that it uses LED lights rather than incandescent lighting. This lighting consumes considerably less energy than incandescent lights and lasts for up to 100,000 hours, or 10 years. “The LIFT program helps Iowa’s small businesses flourish,” said Michael Fitzgerald, state of Iowa treasurer. “We are so happy that Iowa credit unions are participating in the program that will help hundreds of Iowans fulfill their dreams.”

Michigan league addresses foreclosure issue

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LANSING, Mich. (12/10/07)--The rapidly rising mortgage foreclosure rate nationwide has significantly impacted Michigan residents, and the Michigan Credit Union League (MCUL) is ready to help state residents overcome the situation. MCUL President/CEO David Adams addressed members of the Michigan House Banking and Financial Services Committee Dec. 4 on how credit unions have avoided contributing to the problem and how they’ve worked to educate consumers. “The committee has heard testimony from a variety of sources on the subject of Michigan’s high foreclosure rate, and we wished to provide input on where credit unions fit into the picture,” Adams said. “Thanks to the strong relationship the MCUL and our members have with these lawmakers, they were very accommodating and were more than willing to hear where we stood in terms of the legislation we would support and what we have done to battle the foreclosure problem as an industry,” he added. During his testimony, Adams summarized the nature of credit unions as not-for-profit financial cooperatives. He then pointed out credit unions’ low delinquency rates compared to financial institutions offering subprime loans, and the programs implemented by many Michigan credit unions to help educate consumers about the dangers of exotic mortgages. Adams concluded by discussing credit unions’ willingness to support legislation that would deter predatory lending while avoiding over-regulation of the marketplace. To view a video clip of Adams’ testimony, use the link.

CU welcomes Irish guest in twin city exchange

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PITTSFIELD, Mass. (12/10/07)--The Berkshire County Chapter of the Massachusetts Credit Union League recently welcomed an Irish guest to its credit union as a part of a sister city exchange program.
Joe Donlon (left), Lanesboro Balleyleague CU chairman, Ireland, gives a handmade sculpture called the “Salmon of Knowledge” to John Bissell, Greylock FCU, Pittsfield, Mass., during Donlon’s visit to Greylock FCU. The Salmon of Knowledge is an ancient Irish story that has been shared through generations. (Photo provided by Berkshire CU)
The guest, Joe Donlon, Lanesboro Balleyleague CU Chairman, felt that he was “amongst me own” during his visit. “We all serve the same purpose--we are for the people,” he said. Lanesboro Balleyleague CU is based in Ireland and serves 3,000 members. Donlon served as an honorary guest speaker at the chapter’s dinner, where he provided background on his own credit union and the credit union movement in Ireland. Credit and debit cards are a “thing of the future,” at his credit union, and his greatest challenge is marketing the credit union philosophy to people, Donlon said. “We are working toward the concept of sharing marketing resources with three other credit unions to get our word out there,” he added. Donlon also toured Mycom CU, Pittsfield; Berkshire FCU, Berkshire; and Greylock FCU, Pittsfield. “It’s fascinating to hear about our similarities with a credit union separated from us by the Atlantic Ocean,” said Berkshire Chapter President Clare Klose. “Regardless of size, or latitude, all credit unions share the same mission. “I was most interested in Ireland’s decision to begin banding together with 17 other chapter credit unions, in developing the concept of shared branches, which is something that provides a model for all of us,” she added.

Two Carolina CUs help members refinance subprime loans

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RALEIGH, N.C. (12/7/07)--Two Raleigh-area credit unions that serve state and local government employees are working to help their members refinance high-interest subprime loans. The $13.957 billion asset State Employees CU (SECU) and the $722 million asset Local Government FCU introduced outreach programs earlier this year. The programs have enabled about 500 homeowners to refinance roughly $69 million in home loans (The News & Observer Dec. 6). In May, SECU--which serves 1.3 million state government employees and their families--sent a mailing to 100,000 members, who the credit union thought might be having problems with subprime loans. The mailing also was sent to those members who obtained mortgages in recent years from another lender, without making a substantial down payment. Information on the type of loans that members took out was obtained through members’ responses to a SECU-commissioned survey. In a letter to selected members, SECU informed them that it had developed two mortgages to help those struggling with subprime loans. One mortgage included an adjustable-rate loan with a 6.75% starting rate that adjusts once every five years. Rates increase a maximum of 4.5% over the term of the loan. Local Government FCU, which serves 158,000 government employees and their families in North Carolina, offers the same two mortgages. The credit union sent a summer mailing to 18,500 members. To date, 432 SECU members and 50 Local Government members who were contacted chose to refinance. An additional 152 SECU members are in the process of refinancing.

CU System brief

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* MANCHESTER, N.H. (12/7/07)--St. Mary’s Bank recently gave a $2,500 grant to the Chaplain Emergency Relief Fund to help New Hampshire Army and Air National Guard members and their families. The money will be used to pay housing costs and other expenses, while guard members are fulfilling their service obligations. The relief fund is a private, non-profit fund administered by volunteer trustees, all of whom are New Hampshire Army or National Guard Chaplains. (From left) Ernest F. Loomis, state chair, New Hampshire Employer Support of the Guard and Reserve; Chaplain William Paige, chaplain of the New Hampshire Army National Guard; and Tom Champagne, director of community outreach, St. Mary's Bank. (Photo provided by St. Mary’s Bank) …

CU employees members directly affected by Wash. floods

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FEDERAL WAY, Wash. (12/7/07)--Jeff Kennedy, senior vice president/CEO for Twin Star CU in Olympia, Wash., hasn’t heard from some of his employees since floodwaters began engulfing parts of the state. “Today is the first day some of them have gotten to work,” he said. The floods, which were caused by rainstorms in the Pacific Northwest, affected operations in four Twin Stars branches. The branches closed intermittently due to power outages. Many of the credit union’s members and employees have been affected by the flooding, and Kennedy said the credit union is working to help them. “We’re trying to get our arms around what we can do to help,” he said. “We’re putting together plans and programs to best meet the needs of people in our communities.” Twin Star is currently identifying members and employees directly affected by the flooding. The credit union is setting up a program for members to contribute money and supplies to the Red Cross, and it also will activate a program to extend loan terms to affected members. The Washington Credit Union League (WCUL) is working to help credit unions affected by the floods, said David Bennett, director of public relations. Aside from Twin Star, Washington State Employees CU (WSECU) reported to the league that it had closed two of its branches this week. The Chehalis branch was closed due to high water levels, and the West Olympia branch, which is located on the second floor of a building, closed because the first floor had flooded. Neither branch sustained damage, “and remarkably, none of their employees were affected directly,” Bennett said. “This has enabled the credit union to turn outward to the community and it is in the process of launching a clothing drive,” he said. The league is waiting to hear from other credit unions affected by the flooding. Bennett said that some of those credit unions are in Aberdeen, which was “completely cut off from the outside world,” Bennett said. The Washington Credit Union Foundation has been very supportive and is standing by to respond to requests for help, Bennett said. The flooding death toll has risen to eight, with damage estimates in the billions (Associated Press Dec. 6).

Shopping for Gen Y employees challenging for CUs

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AUSTIN, Texas (12/7/07)--Generation Y presents the biggest challenge from a marketing perspective, so credit unions should strategize when recruiting its members for employment. Bill Humbert, an employment recruiter and credit union member, spoke about how credit unions can recruit Generation Y members during the Credit Union National Association’s (CUNA) Your Essential Strategies (YES) Summit in Austin Wednesday. “Like any consumer, when you shop for workers, you should set goals according to a prospecting strategy, and evaluate candidates almost as you would comparison shop for a new car,” he said. Generation Y uses different communication media, so YouTube, blogs, Facebook and other social media are more productive to recruit members than traditional newspaper employment ads. Social networking provides prospective employers a unique opportunity to assess prospects’ character, Humbert noted. Members of Generation Y publicize details of their private lives on social networks, and if employers see that, they can toss out the applications of the poorest prospects without wasting interview time, he said. Generation Y also is challenging because many members of this generation have immediate expectations. “In the old days, you started on the line,” Humbert said. “Then you might move up to line supervisor, then line manager. Today, because of technology, those steps don’t exist anymore--18-to-30 year-old employees need to create their own career paths.” Credit unions can assist by hiring Generation Y members for their strengths and then train them to overcome their weaknesses. He cited General Electric, which offers employees six-month rotations in the organization. At the end of two years, based on their job experiences, the employer is able to find the best positions to suit employees’ talents. Humbert offered the following recruiting tips:
* Project the right image as an employer; * Train managers to hire. Humbert estimated that 70% to 80% of managers have never been taught how to interview or select; * Communicate the credit union passion; and * Let hiring managers perform reference checks. They are specialists in extracting applicant information.
Humbert expressed his excitement for Generation Y workers. “The generation before mine went to the moon,” he said. “My generation put a computer on every desk. Gen Y is bringing us immediate information, and I can’t wait to see what they’ll deliver next.”

Recruiting young board members can help CUs attract youth

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AUSTIN, Texas (12/7/07)--Credit unions looking to recruit young members should start at the credit union board level, according to a Generation Y marketing consultant. Justin Ho, a 20-year-old board member at University of Southern California (USC) CU and a marketing consultant with Glatt Consulting, shared the importance of actively bringing youth into credit unions during the Credit Union National Association’s Your Essential Strategies (YES) Summit in Austin Wednesday. “The credit union movement will come to an end within a few generations if credit unions don’t make themselves relevant to this demographic,” Ho said. “The biggest wealth transfer in history is about to occur and credit unions need to take advantage of it.” After joining the Los Angeles-based USC CU board, Ho surveyed other board members to see how they thought the dynamics of the board had changed. His results indicated that young adults can be separated into three groups in regards to financial institutions: reward-seekers, those looking to build relationships, and those that are oblivious. The best place to target Generation Y is during the college years. Seven of every 10 college students keep the banking provider they use in college, Ho said. It’s important to reach out to this generation through the Internet. Generation Y uses the Internet more than any other generation, and online banking is the most popular finance web tool, he noted. To reach Generation Y, USC CU uses social networking through Facebook and offers free money management classes on campus.

Alabama league adopts courtesy pay guidelines

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BIRMINGHAM, Ala. (12/7/07)--The Alabama Credit Union League adopted guidelines for courtesy pay programs and approved four action plans during its year-end meeting Nov. 27 in Savannah, Ga. The league said it supports credit union courtesy pay programs, and recognized that the programs can benefit members, but can be detrimental if abused. "Such programs should be operated with transparency and the benefit of the consumer in mind," the league said. The league also emphasized that the programs are account features, not loans. To protect members, credit unions shouldn't include available overdraft coverage as a part of an account holder's balance. Credit unions also shouldn't manipulate the order in which items are processed to maximize overdrafts, the league said. Accounts should be monitored, with counseling provided to members who abuse the courtesy pay features. The board also approved the 2008 budget, and adopted four action plans:
* Maintain and improve the league’s position of influence through Dec. 31, 2008; * Develop, agree upon and recommend a future funding strategy for the league by Dec. 31, 2008; * Conduct a re-affiliation campaign and report results by April 30, 2009; and * Continue to pursue the implementation of the REAL Solutions program with the National Credit Union Foundation through March 31, 2009.

Kansas lawmakers to take up CU membership limits

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TOPEKA, Kan. (12/7/07)--The possibility of limiting membership in credit unions will be taken up by the Kansas state legislature in its next session, which starts Jan. 14 and will run into May 2008. The state’s Special Committee on Financial Institutions and Insurance voted Tuesday to ask lawmakers to clarify restrictions on where and how credit unions can solicit members. This clarification is necessary to ensure that the state committee is fulfilling statutory requirements to limit credit union membership to individuals who share common bonds, according to State Sen. Ruth Teichman (R-Stafford), the committee’s chairwoman (Harris News Service Dec. 5). However, some members of the panel were opposed to the move, reasoning that decisions have been made consistently by the state Department of Credit Unions, and these decisions have not been contested in court. The Kansas Credit Union League issued the following statement to News Now, concerning the matter: “The committee voted to recommend that the legislature look at possible definitions for terms used in the field of membership statute that may provide more clarity. The committee was unable to reach an agreement concerning the post audit staff’s accusation that the interpretation used by decades of regulators appeared to be out of compliance with the statute. “The credit union movement will be working closely with the financial institutions committees of both the House and Senate during the upcoming session on this issue. The credit union message has been well received by Kansas legislators. We look forward to a positive outcome in the 2008 legislative session.” Credit union membership is supposed to be limited to groups that have a “common bond” of occupation or association, or who reside in the same neighborhood, community or rural district, according to state law. However, the statute has been broadly interpreted, a 2006 state legislative audit found. As a result, several credit unions have expanded their territories over the past several years, which includes five groups that can draw members from anywhere in the state. Limiting membership to the home county of a credit union’s main office branch and the contiguous counties is one proposal brought before the panel. This is similar to a Missouri law passed earlier this year, which was developed to resolve similar disputes in that state. However, Kansas credit unions have opposed this type of legislation.

Research Payday lending would not be missed

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MADISON, Wis. (12/7/07)--A recent report from the University of North Carolina’s Center for Community Capital shows that former and potential payday lending customers in North Carolina, where these high-interest loans have now been effectively banned, have gotten along just fine without payday lending, and are in fact glad it’s gone. “This report helps debunk the myth that payday lending is necessary,” said John Keckhaver, a research analyst at the Wisconsin Council on Children and Families. “We’re all aware of the high costs. We’re now seeing increasingly that those high costs are unnecessary, and that people are able to find other, better ways to deal with their financial needs.” The North Carolina Commission of Banks commissioned this report, which takes a close look at whether payday lending customers miss the payday lending options that no longer exist in their communities. It also explores what people are doing instead of turning to traditional payday lenders. Among their conclusions:
* More than twice as many former payday borrowers reported that the absence of payday lending has had a positive--rather than negative--effect on their households; * Nearly 9 out of 10 surveyed thought payday lending was a bad thing; and * The absence of storefront payday lending has had no significant impact on the availability of credit for households in North Carolina. Households reported using an array of options to manage financial shortfalls, and few are impacted by the absence of a single option--in this case, payday lending.
“The report out of North Carolina shows us, once again, that payday lending has no redeeming qualities. People get by and are better off without it,” Keckhaver said. “Among other options, credit unions have been stepping up to the plate and are offering better alternatives through their Real Solutions program. Those efforts should be expanded and we should finally get rid of predatory payday lending in Wisconsin.” Three bills pertaining to payday lending are currently pending in the Wisconsin Legislature. All currently are in the Assembly Committee on Financial Institutions, chaired by State Rep. Scott Newcomer. They are:
* AB 4--Prohibits payday loan providers from assessing a finance charge on payday loans that exceeds 2% per month; * AB 211--Prohibits payday loan providers from assessing a finance charge on payday loans in excess of 36% per year. It also makes other minor administrative change; and * AB 574--Limits payday loans to $800 or 50 percent of the applicant’s next paycheck, whichever is greater. The bill also limits “rollovers”--defined as the refinancing, renewal, amendment, or extension of a payday loan.

White papers look at microlending and measuring success

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MADISON, Wis. (12/7/07)--The manner in which credit unions are utilizing microlending to reach underserved microenterprises, and how credit unions are measuring success are the subjects of two new white papers from the CUNA Councils. “Microlending and Credit Unions” from the CUNA Lending Council discusses how to reach the estimated 20 million or more microenterprises operating in the U.S.--many of which are underserved in terms of loans and technical assistance. Microlending is defined in this paper as the granting of small loans between $500 and $35,000 to small/micro businesses with five or fewer employees. The paper explores the advantages of microlending, the issues underlining development of a microlending initiative, and factors contributing to the rapid growth of microenterprise and the changing nature of today’s microentrepreneurs. The paper incorporates the case studies of how four credit unions have implemented microlending programs. The measures a credit union chooses in defining success are both a reflection on its current organizational values and an influence on the direction the credit union will take in the future. The second new white paper--“ROI Calculations and Financial Parameters” from the CUNA Marketing and Business Development Council--reviews some of the most common ways that credit unions define and measure success. Compared to stockholder-owned banks, credit unions tend to put less emphasis on profit-oriented financial measures of success. Instead, many choose the “balanced scorecard” approach to measuring success by using a relatively short list of measures that cover all major areas of importance. This paper discusses various success measurements in five broad categories--financial stability, member service and satisfaction, growth, efficiency, and social mission--and how those numbers are used. CUNA Council members are entitled to complimentary copies of these white papers; non-members may purchase the white papers for a price of $50 per copy. For more information, use the link.

Carolina CUs payday checking wins award

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CHARLOTTE, N.C. (12/6/07)--A program that makes automated clearing house payroll available two days early to U.S. Postal Service (USPS) employees has won an award. The $62 million asset, Charlotte-based Carolina Postal CU’s “Priority Payday Checking” program was bestowed a Best Practices Award by The Credit Union Journal. USPS employees who have a checking account and direct deposit can receive their paychecks on Wednesday, instead of the traditional payday Friday (North Carolina Credit Union League’s Weekly Update Nov. 26). “As a credit union solely serving USPS and federal employees, we look and listen to what our members’ needs are,” said Joy Watts, Carolina Postal CEO. “As with many people, time as one of the biggest concerns facing our USPS members.” From that need, the idea of Priority Payday Checking arose, she said. “Rather than just extend the hours on a payday Friday, like every other financial institution, we decided to think out of the ‘bank’ and we moved payday up by two days,” Watts concluded.

PCUA plans biz lending academy

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HARRISBURG, Pa. (12/6/07)--The Pennsylvania Credit Union Association (PCUA) announced that it is working to create a business lending academy not only for credit unions in Pennsylvania, but also for those in the Mid-Atlantic region. Molly Snody, director of business advisory services at the PCUA, is heading up the effort. “I’m sensing a big need for business lending training--for credit unions of all stages of implementing their lending programs,” Snody told News Now. Snody currently provides on-site training to credit unions who are considering the market of member business lending. “We’ve had great success,” she said. Through the academy, Snody hopes to educate credit unions about lending. Prolific credit union lenders are running against their member business lending caps, which are imposed by the National Credit Union Administration. They need outlets to sell loans to, she said. Snody is currently surveying credit unions to find out how the academy could best fill their training needs. The academy will be based on feedback from the survey, and Snody hopes to launch training in early spring. Four credit unions actively involved in lending have already responded to the survey. “We’re hoping to hear from credit unions just starting out,” she said. Snody initially thought of doing the academy in the form of a workshop over several days. She is using the survey to ask credit unions how the training should be offered. Her current training is in-person and customized to each credit union’s needs. Snody emphasized that the academy isn’t necessarily encouraging credit unions to get into member business lending, but rather to help those who are committed to it understand the process.

Filene study How much CU capital is enough

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MADISON, Wis. (12/6/07)--Credit union board members and employees are likely to measure their credit union using two metrics: asset size and capital ratio. There is a range of thought on what constitutes a reasonable capital level. Most credit unions have a general preference for more capital in the service of safety and soundness. The Filene Research Institute wanted to know whether the “more capital is better” preference has led to U.S. credit unions holding too much capital. The result is a newly released study by William E. Jackson III, professor of finance at the University of Alabama, and a Filene Research Fellow. In “Is the U.S. Credit Union Industry Overcapitalized? An Empirical Examination,” Jackson addresses two fundamental questions: Was the capitalization rate in 1990 reasonable given the risk profile of the credit union industry? And has the risk profile of the credit union industry increased to such an extent as to warrant an increase in capitalization to current levels? Jackson reports that the capital level of the U.S. credit union industry stood at 11.6% at the end of 2006, more than four percentage points higher than the legislatively mandated level of “well capitalized” and exactly four percentage points higher than U.S. credit union capital in 1990. Jackson concluded that the industry capitalization rate in 1990 was reasonable and perhaps too high; and that the credit union industry in 2006 was less risky than it was in 1990. These answers, coupled with an analysis of credit union regulatory capital regime and a comparison of credit union and bank capital requirements, lead Jackson to state that U.S. credit unions are “overcapitalized by an amount in the 30% to 40% range.” Translated into dollars, U.S. credit unions are overcapitalized between $8.8 billion and $11.7 billion. “The dramatic conclusions from this research may cause considerable debate in the industry,” said Filene Chief Research Officer George Hofheimer. “Credit unions need to balance their efforts to achieve safety and soundness with efforts to put their capital to best use. “To meet the challenges of the future, credit unions need to invest in new delivery channels, technology, innovative products, talent development, collaborative strategies, marketing, and many other capital-intensive activities. According to Jackson’s assessment, almost all credit unions are overcapitalized,” he continued. Hofheimer urges credit unions “to have an honest discussion about the most appropriate balance of safety and soundness versus reinvestment in the credit union. As credit unions move forward, an honest debate about the appropriate use of capital is warranted.” Copies of “Is the U.S. Credit Union Industry Overcapitalized? An Empirical Examination” and other Filene research reports are available free to Institute members; $125 to non-members. An electronic version is available. For more information, use the link.

CUs learn how to beat payday lenders to help young adults

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AUSTIN, Texas (12/6/07)--There are more payday lending stores in the U.S. than McDonalds and Burger King restaurants combined, according to Lois Kitsch, national program manager of Real Solutions at the National Credit Union Foundation. Kitsch shared some insight on how credit unions can help young adults avoid payday lenders by offering alternatives at the Credit Union National Association’s Your Essential Strategies (YES) Summit in Austin. Credit unions should think about the following when deciding to offer payday loans: target market, product mix and delivery system, education, finding Generation Y employees and resources. “Remember that not all of Gen Y are college students,” Kitsch said. “In this country today, only about 70% of high school seniors actually graduate from high school. This dramatically decreases their earning power over their life times.” Credit unions must be ready to offer low-cost financial products for this very diverse market niche, she said. As an example, Kitsch mentioned the Appleton, Wis.-based Prospera CU’s GoodMoney program. GoodMoney is a collaboration with Goodwill Industries and the Financial Information Service Center, which places credit union services in Goodwill retail stores. GoodMoney provides short-term loans at lower rates than those of payday lenders, as well as check-cashing, money orders, bill payments and international wire transfers (News Now Oct. 10).

Wireless banking text messaging draws young members

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AUSTIN, Texas (12/6/07)--Golden 1 CU of Sacramento has found a way to connect with members under 30--by offering free wireless banking and text messaging. Mobile banking options have drawn 10,000 mobile banking users to Golden 1, said Paul Sidhu, Golden 1’s manager of electronic commerce at the Credit Union National Association’s (CUNA) Your Essential Strategies (YES) Summit in Austin. Forty-percent of Golden 1’s mobile banking users and 30% of its 1,600 text messaging users are under the age of 30. Golden 1 has offered text-messaging access since 2000, and wireless banking since 2002. Text messaging and wireless banking allow members to view account balances and transaction history, transfer funds and pay bills. Users also can look up loan rates, branch and ATM locations, and e-mail credit union staff. The credit union provides security for users by not allowing high-risk transactions or features. “There’s no way you can save your password on the phone,” Sidhu said. In 2001, Wells Fargo discontinued its wireless program, which was limited to Palm Pilot and Sprint users. Golden 1 learned from that, and chose to use a format that works with all cell phones, allows any carrier, is easy to maintain and includes text-messaging options.

Preserve CUs ability to serve WOCCU tells G8 meeting

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MADISON, Wis. (12/6/07)--Better access to payment and settlement systems, appropriate levels of regulation, and continued tax-exempt status critical to helping credit unions worldwide effectively serve their members--were the recommendations the World Council of Credit Unions (WOCCU) made to ministers of finance for the G8 nations at last week’s outreach meeting on remittances in Berlin.
Click to view larger image World Council of Credit Unions Dave Grace, vice president of association services, addresses the G8 ministries of finance in Berlin, Germany last week.
WOCCU’s experience also shows that increasing remittances between countries have become a critical factor in global economic development, said Dave Grace, WOCCU vice president of Association Services, to an assembled audience of 80 attendees. The meeting included delegations from the G8 nations of Canada, France, Germany, Italy, Japan, Russia, United Kingdom and the U.S. Representatives from the European Commission, as well as other countries, international organizations, the private sector, civil society, and academia also participated. As a participant in “Reaching Out to the Unbanked,” a panel discussion featuring representatives of international microfinance organizations, Grace shared ways to broaden access to financial services, including improved access to remittances as one strategy to reach populations with limited or no financial resources.
Click to view larger image The official boardroom of Bundesministerium der Finanzen (German Ministry of Finance) hosted the G8 participants for a two-day meeting focused on increasing global remittance flows held in Berlin, Germany last week.
Physical, financial and environmental barriers still block some of the world’s population from financial services access. Surmounting those barriers may involve policy and procedure strengthening or changes at national and even local levels, he said. “Credit unions require direct access to national payment/settlement systems, card networks and deposit insurance programs in all markets in order to serve members,” Grace said. “Prudential and proportional regulatory supervision of credit unions also is critical to assuring a safe and sound operational environment. We encourage retention of tax-exempt status for financial co-ops to ensure that they can continue to serve the poor and reach unbanked populations.” During the two-day meeting, representatives from the World Bank, International Monetary Fund, Western Union, Citibank and others, led six panel discussions on topics including the recent trends and development impact of remittances. The meeting accomplished two main objectives, Grace said. Participants sought to revisit and assess the progress of measures to facilitate remittance flows agreed upon at the Sea Island (Georgia) Summit hosted by President Bush in 2004. During this meeting, the G8 launched its Global Remittance Initiative as part of the larger Global Poverty Action Plan.
Click to view larger image Representing the World Council of Credit Unions, Dave Grace (center) speaks on a panel whose topic was “Reaching out to the Unbanked” at the G8 meeting on Remittances in Berlin, Germany last week. (Photos provided by World Council of Credit Unions)
The Berlin meeting also served as a forum to initiate new dialogue and to promote other potential measures for facilitating remittance flows. As a result of the meeting, participants developed seven recommendations for the G8 countries which addressed challenges, policy and regulation issues of further improving global remittances flows. Remittances have grown to more than US$240 billion a year in 2006--two and half times more than the total annual aid paid from developed to developing countries, and two-thirds the amount of global foreign direct investment. In addition to this latest meeting with the G8, WOCCU has also testified before the U.S. Congress and was quoted in the London Financial Times on remittances in August 2007.

Veterans Family Fund CD helps veterans CUs participate

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TACOMA, Wash. (12/6/07)--So far, two credit unions in the Northwest are involved in a program that allows participants who invest in a certificate of deposit to send part of their earnings to help war veterans and their families. Two Tacoma based credit unions--the $586 million asset Harborstone CU, and the Tacoma branch of the $242 million asset, Fort Lewis-based America’s CU--are two of 11 state financial institutions participating in the fund. The Veteran’s Family Fund certificate of deposit program was launched Wednesday at the Greater Tacoma Convention and Trade Center. The fund is the brainchild of Jane Jacobsen, a Vancouver, Wash. executive director of the Confluence Project--which places public art in the regional area (The News Tribune Dec. 4). The way the program works is: participants invest a minimum of $100 in a six-month CD. When the certificate matures, they keep half the interest, and the other half goes into a fund to help Afghanistan and Iraq veterans and their families who are experiencing financial hardships. The program needed the infrastructure to distribute the funds and a way to promote it statewide, so John Lee, director of the Washington State Department of Veterans Affair, agreed to help. The program organizers hope the fund will have $300 million in deposits by the 2008 and to eventually have a credit union or financial institution in every community in the state participating in the program.

Former database administrator pleads guilty to Fidelity data theft

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JACKSONVILLE, Fla. (12/6/07)--A former database administrator for Fidelity National Information Services in St. Petersburg, Fla., pleaded guilty this week to charges of conspiracy and fraud in connection with the theft and sale of consumer data that affected 8.5 million customer accounts. William Sullivan faces a fine of up to $500,000 and 10 years in prison. He made a plea agreement with prosecutors after admitting that he was involved with the access and sale of customer data at Fidelity and Certegy Check Services (Bank Technology News December 2007). Sullivan was not authorized to view the data that he sold to a second individual, who in turn sold the information to marketers. Debit card and credit card data was included in the information. Sullivan, who was fired from his position in July, made a $580,000 profit on the sale. He will pay restitution to Fidelity. The data has not been linked to additional fraud or account theft, according to Fidelity. The breach was discovered in July after a retail check processing customer alerted Certegy to a correlation between a small number of check transactions and the receipt by the retailer’s customers of direct telephone solicitations and mailed marketing materials (News Now July 5). In February 2006, Fidelity bought Certegy Card Systems from Equifax (News Now Feb. 27, 2006). Equifax had bought CUNA Card Services, based in Middleton, Wis., from what was then-called CUNA Service Group and renamed it Certegy in 1996. The Middleton office, which employed more than 500 people at one time, became a small satellite office, according to News Now.

CU System briefs (12/05/2007)

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* BEAVERTON, Ore. (12/6/07)--The Credit Union Association of Oregon (CUAO) will launch the Oregon Compliance InfoSight, an online compliance information system, in January. The free resource gives CUAO-affiliated state and federally chartered credit unions access to important compliance topics and the ability to access regulatory and compliance information specific to Oregon. The resource will go live on the CUAO’s website, … * NEW YORK (12/6/07)--The National Federation of Community Development Credit Unions will hold a conference call Tuesday on issues relating to community development credit unions, community development financial institutions and the mortgage market crisis. These financial institutions are positioned to help consumers through the crisis and bring stability, the federation said. Those interested in joining the call should contact Daniel Apfel, program associate, at … * FITCHBURG, Mass. (12/6/07)--William E. Aubuchon, 91, of Fitchburg, Mass., died Nov. 26 at his home. He was the former president and chairman of the board of I-C FCU in Fitchburg. I-C has $322.6 million in assets. He was also involved in civic and religious causes, earning honorary degrees from Fitchburg State and Worcester State colleges …

Carolina Postals Operation CU Troop a success

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CHARLOTTE, N.C. (12/5/07)--An idea by a Carolina Postal CU manager to help troops stationed overseas has not only come to fruition, but it also has become a success. Operation CU Troop, conceived by Carolina Postal Branch Manager Nelle Baldwin, is finishing up its deliveries to U.S. troops over the next few weeks (North Carolina Credit Union League’s Weekly Update Nov. 29). As part of the program, nine North Carolina credit unions partnered with the $62 million asset, Charlotte-based Carolina Postal this year to gather food and toiletry items that were needed by overseas U.S. troops. The collection drive stretched throughout the state. Lions’ Share CU in Salisbury helped move the drive forward by reaching out to credit union members and business partners. “We collected a ton of food, batteries and personal supplies,” said Lions Share President/CEO John McGrail. “We even got 200 international calling cards donated.” Other credit union assisting with Operation CU Troop include: Members CU, Winston-Salem; North State Telco CU, High Point; American Partners FCU, Reidsville; State Employees CU, Raleigh; Truliant FCU, Winston-Salem; Lithium FCU, Bessemer City; Carolina FCU, Cherryville; and Winston-Salem City ECU. Additional food and toiletries were gathered by credit union volunteers at Carolina Postal, and are being sorted and packed into gift packets by Junior ROTC Cadets at the Phillip O. Berry High School in Charlotte. The credit union volunteers and cadets will deliver the gift packets to the USO Office at the Charlotte airport. More than 16,000 troops are coming through the USO Center at the airport during the months of December and January. Christmas cards, notes of support and elementary-school student drawings are being included in each gift packet handed out to the service men and women as they head back overseas. “This year’s support was phenomenal by our members and our fellow credit unions and shows the cooperative spirit of our credit unions,” said Joy Watts, CEO of Carolina Postal. “We are hoping to make this an even broader event next year due to the success of Operation CU Troop in 2007.”

Push made to reinstate Canadian CU workers fired in strike

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HAMILTON, Ontario (12/5/07)--Union members of First Ontario CU say they will push to reinstate employees fired during a lengthy strike at the credit unions annual meeting to be held tonight. Seven employees were fired during the strike. Striking workers padlocked the doors when they occupied the Queensdale and Upper Sherman branch on April 18, in an attempt to get the credit union to return to the bargaining table in the midst of a stalemate in a labor negotiation process (News Now May 24). The protest ended an hour after it began, when Hamilton police smashed a glass door to gain entry to the credit union. First Ontario’s new CEO Kelly McGiffen was contacted and asked to hold a meeting to discuss when the workers will be rehired, but a meeting hasn’t been held yet, said Canadian Office and Professional Employees Union Ontario Director Janice Best (The Hamilton Spectator Dec. 4). McGiffen stated that he’s confused by the union’s demand for worker reinstatement, because the strike-ending agreement called for all outstanding issues to be submitted to binding arbitration.

SEIU organizer credits her CU for mortgage help

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NEW YORK (12/5/07)--Eight years ago, Onika Shepherd received a loan from a credit union so that she could buy a car. Shepherd, who was working part-time and attending school at Queens College, thought of credit unions as places that provide personal or auto loans--until she went to see a mortgage broker who recommended a high-interest loan for the home she wanted to buy (New York Daily News Dec. 3). Shepherd, 29, makes $46,000 annually as a Service Employees International Union (SEIU) membership organizer, and couldn’t afford what her broker had suggested. After talking with a colleague, Shepherd consulted with SEIU’s credit union, 1199 SEIU FCU. With the help of her credit union, Shepherd was able to purchase a Queens home in her price range--$350,000. She put 5% down, and the credit union provided her with a 30-year fixed rate mortgage at 6.87%, the newspaper said. Shepherd is able to make her monthly payments and added she may switch to biweekly payments in the future, but will first consult with her credit union manager. Shepherd’s manager helped her with her mortgage, and according to Shepherd, “That’s how it’s supposed to be at a credit union.” William Mellin, CEO of the New York State Credit Union League, said that half of New York credit unions offer home loans to their members. However, they offer the loans conservatively--which means no mortgages with short-term teaser or interest-only adjustable rates are issued, he said. Mellin said he anticipates more people will join credit unions for mortgage help. New York state currently has 4.2 million credit union members.

CU System briefs (12/04/2007)

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* WARRENVILLE, Ill. (12/5/07)--On Friday, Central CU Fund and Members United Corporate FCU officially merged. The National Credit Union Administration approved the merger in September. John R. Caulfield, president/CEO, St. Mary's CU, Marlborough, Mass., and Central Fund’s previous board chair, has been appointed to Members United’s board of directors. Members United Corporate FCU has $12.1 billion in assets ... * GERMANTOWN, Md. (12/5/07)--On Nov. 1, Mid-Atlantic FCU in Germantown helped sponsor the Community Services for Autistic Adults and Children (CSAAC) second annual honors gala, “A Change in the Weather … Change the Climate for Children and Adults with Autism.” The event, in Bethesda, hosted 325 guests and raised $100,000 for the CSAAC Foundation. CSAAC is part of Mid-Atlantic FCU’s Business Affiliate program, which allows companies in Montgomery County to offer membership in the credit union as a part of their benefits package. Mid-Atlantic has more than $200 million in assets … * SAN ANTONIO, Texas (12/5/07)--More than 500 people braved the cold to donate holiday turkeys for the needy during Security Service FCU’s Turkey Round-Up with the San Antonio Food Bank. (From left) SSFCU Volunteer Corps member Angie Enriquez accepts a turkey from Tom Romanello at one of the credit union’s north central service centers. The two-day drive generated twice as many turkeys as last year. Security Service FCU has $4.1 billion in assets. (Photo provided by Security Service FCU) … * NEWPORT NEWS, Va. (12/5/07)--1st Advantage FCU is offering its members alternatives to payday lending with financial counseling in response to the growing number of payday lenders in the area (Daily-Press Nov. 25). The credit union’s loans have lower interest rates than those of payday lenders at 17.95%, and the credit union requires members to put 5% of each loan into their savings account. 1st Advantage joins other area credit unions, such as Bayport CU, Newport News, and Langley FCU, who are offering their members affordable short-term loans. There has been an increase in the number of payday lenders, said George R. Dudley Jr., Bayport CEO, and credit unions needed to do something to help members … * BOULDER, Colo. (12/5/07)--Boulder Valley CU of Boulder, Colo., announced that it has partnered with Eco-Cycle to begin taking steps toward becoming a Zero Waste Company. The credit union also purchased energy-efficient lighting, office equipment, recycled paper and other office supplies. Solar panels and energy-efficient windows were installed in the credit union’s largest branch, and it recently launched to promote eco-friendly efforts. In March, the credit union began working with members to help them “go green” by offering discounts on loans for purchasing fuel-efficient vehicles and installing solar panels on their homes. Boulder Valley has $153 million in assets …

CU employees fin-lit lessons impact students

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WICHITA, Kan. (12/5/07)--Marquis Murphy, an employee of Joplin, Mo.-based Great Plains FCU, says he didn’t know much about finances when he was younger. As the son of a single mother, he lived on cheese sandwiches for lunch and dinner. “That’s why I’m back in the classroom now,” he told the Wichita Eagle (Dec. 4). Murphy, an employee at Great Plains FCU, volunteers the majority of his time to talk to Kansas students about money. They need to learn how to manage their money now so they can make good decisions later, he told the newspaper. Because Murphy said he understands that some children might think of financial literacy as “boring,” he uses comedy and activities to connect with his students. He even uses a Pictionary-themed game to help students identify terms such as “liability,” “bankruptcy,” and “cash flow.” Murphy teaches through his nonprofit, Youth Educational Empowerment Program (YEEP), which is funded through local donations. This year, the program is being taught in six schools, and some of his lessons have been added to the schools’ U.S. History courses. Murphy’s lessons work because of their real-world applications, said Mark Farrar, a local high school teacher. For instance, Murphy showed Farrar’s students how much they could save annually by not eating fast food every day for lunch. His effectiveness also is evident in a story Murphy likes to tell about a former student. The young woman had $3,000 in a savings account, and decided to place it in a certificate of deposit. She proudly told Murphy that she was going to receive $182 in interest by the end of the year. Managing money is a “character thing,” but it’s also something that everyone deals with on a daily basis, Murphy told the newspaper.

Tax scam doesnt fool former CU employee

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DECATUR, Ala. (12/5/07)--On Monday morning, Leree Reeves of Decatur received a call from a man who identified himself as an employee of the Social Security Administration. The man told Reeves that he was going to refund her $1,500--an amount he claimed she had overpaid in taxes. To give her the money, he said that he needed her social security number and date of birth (WAFF 48 News Dec. 4). But Reeves wasn’t fooled. As the former employee of a credit union, she knew that no government agency would call her about a refund. And though the man had Reeves’ name, address, and phone number, he wouldn’t tell Reeves his real name, she told WAFF. Reeves said if she had fallen for the scam, her savings account would have been completely cleared. Reeves wants to warn people about similar scams so that they don’t lose their money to “dishonest people,” she said. The Internal Revenue Service has issued warnings in Alabama about the tax scam. The Better Business Bureau in Alabama has received calls from a number of potential victims, WAFF said.

Filene Three keys to effective youth credit score programs

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AUSTIN, Texas (12/5/07)--There are three components to effective credit score programs for youth: education, marketing and financial products, said Ben Rogers, program coordinator of the Filene Research Institute’s CU Tomorrow Initiative, at the Credit Union National Association's Your Essential Strategies (YES) Summit in Austin. CU Tomorrow works with state leagues, universities and other organizations to make credit unions more relevant-- as financial institutions and employers--to young adults. Rogers spoke about credit worthiness and how credit unions can build credit with young adults. But first, he noted that:
* Younger people have lower scores; * It takes five-to-six years of debt repayment history to build a good credit score; * Young people are more likely to earn low and sporadic wages, making them more likely to miss payments; and * The credit report market could be worth $860 million by 2010 (USA Today).
Rogers detailed the credit union response. “Education is a good start, and it's where most credit unions do start, but it needs to be coupled with marketing and tangible products to be most effective.” Rogers also discussed an example from Beehive CU in Salt Lake City that used Facebook to advertise a credit score improvement seminar. He also spoke about Filene’s I3 (ideas, innovation and implementation) project, Smart Score. The program targets a group of members, mails them their credit scores with information on improvement, and follows up with the group quarterly. Credit unions need to bring the average age of their members down, and use the opportunities they have to “reinvigorate credit unions as the first choice for their financial institution,” Rogers said.

Entries being accepted for CUNA 2008 Diamond Awards

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MADISON, Wis. (12/5/07)--Credit union marketing and business development professionals can share their achievements by entering the 2008 Diamond Awards, sponsored by the Credit Union National Association (CUNA) Marketing and Business Development Council. Entries are now being accepted in 35 categories to acknowledge the best in credit union marketing and business development nationwide. Categories range from electronic marketing to business/select employee group development mail, and from newsletters to retail merchandising. Entries are evaluated based on strategy, creative concept, design and production, copy and communication, and results. Entries for the awards must be received by 5 p.m. (CST) Jan. 11. All entries received by Jan. 4 will receive the “early bird discount,” with no additional entrance fees required. For anyone entering the Web site marketing category, all entries must be received no later than Dec. 21. Judging will take place Jan. 24-25, with all winners notified via e-mail no later than Feb. 1. Awards will be presented at the 2008 CUNA Marketing and Business Development Council Conference March 16-19, in Nashville, Tenn., at the Gaylord Opryland Resort and Convention Center. For entry forms and additional information, use the link.

CUs loan growth delinquency ratio up

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MADISON, Wis. (12/5/07)--Credit union loan growth increased and savings growth slowed in October, pushing the movement-wide loan-to-share ratio to its highest level since 1979, according to the Credit Union National Association’s (CUNA) monthly sample of credit unions.
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With loan growth outpacing savings growth, the loan-to-savings ration increased to 84.3% in October from 83.4% in September. The liquidity ratio, which is the ratio of surplus funds maturing in less than one year to borrowings, plus liabilities--dropped to 16.9% in October from 17.8% in September. Credit union loan growth increased 0.9% in October and 7.2% over the past 12 months. Adjustable-rate mortgages led loan growth, increasing 3.6% during October, the biggest monthly increase since July 2006. Other loans, second mortgages, credit card loans, and fixed-rate first mortgages followed, increasing 2.4%, 1.6%, and 0.7% respectively, during the October. Second mortgages, fixed-rate mortgages and credit card loans have grown 1.5%, 14.7% and 14.3% respectively, over the past 12 months.
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Credit union savings balances declined 0.2% in October, but increased 5.5% over the past 12 months. Certificates (1.6%), money market accounts (1.3%), and individual retirement accounts (0.9%), increased, while share drafts (3.4%) and regular shares (2.2%) declined during October. Even though loan balances grew at a healthy rate, loan delinquency rates increased marginally. “Nationwide, credit unions' delinquency ratio rose again, but it's still extremely low compared to long-term historical standards,” Bill Hampel, CUNA chief economist, told a weekly CUNA press teleconference Monday. “Credit union delinquencies are more related to the collateral damage from members who have subprime loans elsewhere and are having difficulty balancing their household budgets after their mortgage interest rate reset. “Some parts of the country are affected more than others, and credit unions in those areas need to be careful during the course of the economic downturn,” he continued. In terms of asset quality, the credit union 60-plus day delinquency rate is up slightly from September (0.84%). The credit union movement’s overall capital-to-asset ratio is 11.6%, up slightly from September (11.5%). The total dollar amount of credit union capital is $89 billion.

CU System briefs (12/03/2007)

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* WESTBROOK, Maine (12/4/07)--The Maine Credit Union League raised $25,000 with its sixth annual Maine Credit Unions’ Ending Hunger Walking Tour. (From left) Brenda Davis, executive director of Cross Roads Ministries, a food pantry, receives a plaque from Luke Labbe, president/CEO of PeoplesChoice CU in Biddeford. Labbe is a member of the league’s board, and chair of the tour. (Photo provided by the Maine Credit Union League) … * SANTA ROSA, Calif. (12/4/07)--Redwood CU of Santa Rosa announced that it contributed $67,619 to the United Way. The credit union exceeded its goal of $63,500 by 6%, and last year’s efforts by more than $10,000. The funds will benefit non-profits in the Bay Area. To encourage contributions, Redwood CU held weekly prize raffles, casual days, company-paid lunches and ice cream parties. Credit union executives also held a car wash and cleaned employees’ cars as a reward for their contributions to the campaign. (Photo provided by Redwood CU) … * PORTLAND, Ore. (12/4/07)--The merger of Southwest Corporate FCU and Northwest Corporate FCU was completed Dec. 1. The merger will expand Southwest’s membership to 1,500 credit unions and $14 billion in assets. Southwest will continue to operate a Northwest regional office in Portland (News Now Sept. 28) …

Rapper CU robber found guilty

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SPOKANE, Wash. (12/4/07)--A U.S. District Court found a Spokane rapper who dubbed himself “Dead Poet,” guilty Friday of armed bank robbery and attempted witness tampering. While awaiting sentencing by Judge Lonny Suko in a few weeks, John “Bobby” Vigil, 26, will remain in jail (The Spokane-Review Dec. 1). A unanimous jury verdict was handed down after a weeklong trial. Vigil, who has recorded his own rap music under the recording artist title “Dead Poet,” took the stand Thursday in his own defense. He said that he was not one of three men who held up Speedway FCU in Spokane Nov. 26, 2006, making off with nearly $10,000. The jury rejected Vigil’s claim that the third man involved in the credit union heist was Dustin Rockstrom, one of his long-time friends. Vigil maintained that he was taking a shower at his home, during the time of the robbery. However, he did admit to accompanying Rockstrom and his brothers, Brad and Greg, to Montana after the credit union holdup. Vigil testified that he lied to an FBI agent concerning his whereabouts the day the robbery occurred, and that he threatened a woman who had been subpoenaed to appear before a grand jury. Dustin Rockstrom testified for the prosecution that Vigil was at the credit union during the robbery. Rockstrom awaits sentencing after he pled guilty to being an accessory after the fact.

NCUF becomes Better Business Bureau accredited charity

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WASHINGTON (12/4/07)--The National Credit Union Foundation (NCUF) has been approved to use a new seal as an “accredited charity” of the Better Business Bureau (BBB). Only charities that meet the BBB Wise Giving Alliance’s Standards of Charity Accountability are eligible to participate in the seal program. Before national charities can apply to use the seal, they must undergo an in-depth independent evaluation by the watchdog affiliated with the Council of Better Business Bureaus. “This seal of approval from a respected affiliate of the Better Business Bureau sends a strong message to Community Investment Fund (CIF) investors and all donors that the National Credit Union Foundation is a charity they can trust,” said NCUF Executive Director Steve Delfin. “We will use the BBB Accredited Charity as a symbol of our commitment to strong accountability, ethical practices, and sound stewardship of our donors’ funds.” Unlike other charity-monitoring groups that focus solely on a review of charity finances, the BBB Wise Giving Alliance evaluates each charity’s governance, fundraising practices, solicitations and informational materials, as well as expenditures. “The standards go well beyond what government regulators require,” Delfin said. NCUF was found to exceed the BBB Wise Giving Alliance Standards on several fronts. For example, the standards require that charities spend at least 65% of contributions on programs. In the past year, NCUF spent over 89% of contributions on programs. “National charities that display the BBB Wise Giving Alliance seal can do so with pride,” concluded Alliance President/CEO Art Taylor. “Not only are they attesting to their organizations’ adherence to sound standards, they are helping to increase donor confidence and strengthen public trust in giving.”

Wisconsins largest CU merger continues to provide savings

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PEWAUKEE, Wis. (12/4/07)--The planned merger between Summit CU and Great Wisconsin CU, both of Madison, Wis., will provide Wisconsin families with increased access to affordable financial services, according to Brett Thompson, president/CEO of the Wisconsin Credit Union League. “No matter the size of the credit union, it’s still a member-owned cooperative,” said Brett Thompson, president/CEO of the Wisconsin Credit Union League. “Like all credit unions, it will continue to return its earnings to its members.” The combined credit union will have more than $1 billion in assets and 20 locations statewide. The Wisconsin Bankers Association has criticized the merger, stating that credit unions have abandoned their original mission. The bankers also have stated that the resulting credit union will be larger than most of the state’s banks, and that credit unions’ tax-exempt status makes them unfair competitors (The Milwaukee Journal-Sentinel Dec. 2). Wisconsin banks have more than 87% of the market share in deposits, and assets totaling more than $145 billion--which is eight times more than the total asset size of the state’s credit unions combined, the league said. “Credit unions continue to struggle competitively against banks and are looking for ways to more effectively and efficiently serve their members,” Thompson said. “Credit unions focus on serving the needs of their members, not making profits.”

Social network unveiled for CUNA Gen Y conference

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AUSTIN, Texas (12/4/07)--A “social networking sandbox” created to encourage discussion on the challenges of serving young adults and to provide hands-on social networking experiences for credit union people was unveiled Monday at the 2007 Your Essential Strategies (YES) Summit in Austin. Christopher Morris, Web manager for the Credit Union National Association (CUNA) Councils, presented the “sandbox,” called the YES CU Community during the “Serving 18 to 30s” session. YES CU Community offers basic social networking tools, such as: profiles, the ability to add friends, the ability to write messages on others’ walls, forums, blogs, groups, and video and photo sharing. After the session, attendees were given homework--to participate in different activities on the network. “Josh Jones, Summit organizer and CUNA manager of young adult programs, and I wanted to bring another practical tool for attendees to the conference,” Morris said. “The summit already has a blog year-round--the YES CU blog. Social networking sites, such as MySpace and Facebook, are growing immensely and are a huge untapped market for credit unions reaching out to young adults.” Seventy percent of young adults are on social networking sites--but many credit unions are not because they don’t know where to start and they can’t get over the mystique, Morris added. “This social networking sandbox will allow attendees to play around and get comfortable with the technology.” The YES CU Community is open to anyone associated with the credit union movement. For more information, use the links.

Delaware league coordinates media exposure

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NEW CASTLE, Del. (12/4/07)--The Delaware Credit Union League (DCUL) recently worked with area media to coordinate information about the credit union movement in general and specifically about Delaware credit unions. Alice Smith, DCUL communications director, dealt with several reporters who were preparing articles about credit unions (Together Nov. 20). As a result, an article titled “Credit Unions Offer Members a Variety of Services,” appeared in the August Morning Star Business Report, was published in Sussex County. Credit unions interviewed for the article include: Del-one FCU, Dover; Dover FCU, Dover; Seaford FCU, Seaford; Southern Delaware Postal Employees FCU, Houston; and Sussex County FCU, Seaford. Leslie Papas, financial institutions reporter for The News Journal, contacted the DCUL for sources and information on the National Share Insurance Fund, as she prepared her article that focused on the insuring of excess funds. Although Delaware credit unions did not appear in the main article published Oct. 28, the side bar on “Protecting Deposits” mentioned the credit unions’ insurance fund. The DCUL continues to work with the Delaware Business Ledger in preparing its annual “Book of Lists.” The Business Ledger highlighted credit unions in its October issue--in recognition of Credit Union Week--and featured mini-articles on the free patriotism CD--sponsored by Delaware credit unions and donated to schools and libraries. Also mentioned were the Del-One corporate center opening and back-to-school donations, the DCUL’s publications award, the Newark-based Louviers FCU scholarship program, and the definition of a credit union.

CU responds to breach issues new cards

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FAIRHAVEN, Mass. (12/4/07)--In response to the fraudulent use of 60 to 70 accounts last month, First Citizens FCU has issued new credit cards to affected members. The $386 million asset, Fairhaven, Mass.-based credit union--which has branches in Falmouth, Hyannis and Orleans--issued new Visa cards to 138 members (Cape Cod Times Nov. 30). The breach of card data became evident after several First Citizens members patronized a restaurant chain--Not Your Average Joe’s--that had been compromised by thieves who stole credit card information earlier in the fall, said Charles Simpson, president of First Citizens. When it was discovered that charges to the affected credit cards had been made in other areas of the state as well, the matter was then turned over to the U.S. Secret Service, local police said. The case is still under “active investigation,” according to a spokesman for the Boston office of the Secret Service. Only a few members of First Citizens had unauthorized charges billed to their card accounts, Simpson said. First Citizens’ officials examined the recent activity on all accounts to ascertain who had used their card at one of the chain’s restaurants in the past few months, Simpson added.

Six CUs partner with online peer-to-peer lending initiative

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SAN FRANCISCO (12/4/07)--Six credit unions have partnered with Zopa, an online peer-to-peer lending initiative that has recently begun operations in the U.S. Zopa, or Zone of Possible Agreement, originated in the United Kingdom several years ago. It seeks to help those in need of small loans by matching them with lenders. The credit unions that have partnered with Zopa include: Addison Avenue FCU, Palo Alto, Calif.; Affinity Plus FCU, St. Paul, Minn.; FirstTech CU, Beaverton, Ore.; FORUM CU, Indianapolis; Provident CU, Redwood City, Calif.; and USA FCU, San Diego (Net Banker Dec. 2). Using Zopa, borrowers can apply for loans that have terms of up to five years, with interest rates varying from 8.7% to 16.99%, depending on credit scores. When a loan is approved, borrowers can receive the money immediately (Wall Street Journal Nov. 28). Lenders purchase Zopa certificates of deposit (CDs) to fund the loans. Interest rates are capped at 5.1% on the CDs, the newspaper said. Borrowers create profiles describing themselves and their needs to attract lenders. Lenders and borrowers sign legally-binding contracts. Borrowers are required to pay the loans back monthly by direct debit, according to Zopa’s website. Similar to the credit union motto, social lending is “like borrowing and lending with your friends and family--except there are thousands of people you can lend and borrow with,” the website stated.

Regulator to auction off Huron River Area CU-owned homes

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FORT MEYERS, Fla. (12/4/07)--The National Credit Union Administration (NCUA) and DebtX of Boston will hold an online auction Dec. 13 to sell $26 million of bad loans on homes in the Lehigh Acres and Cape Coral, Fla.-areas. Participants will be limited to select investors and financial institutions. The auction will not be “like eBay,” according to DebtX CEO Kingsley Greenland (Florida News-Press Nov. 30). The debt was accumulated by Huron River Area CU of Ann Arbor, Mich. The credit union made construction loans on the homes during a surge in real estate last year. The average loan balance on the 100 homes is $261,000, and the average value was $360,000 when the loans were made, the newspaper said. Huron River Area CU was liquidated by the NCUA Nov. 18. The credit union’s member accounts were purchased and assumed by Detroit Edison CU of Detroit. The NCUA took over the credit union in February after it was placed into conservatorship by the Michigan Commissioner of the Office of Financial and Investment Services (News Now Nov. 19).