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Pa. man charged in bilking 2 CUs with securities scheme

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BEAVER, Pa. (2/18/09)--The Pennsylvania Securities Commission has accused a Beaver, Pa., man of violating state securities laws for the past 16 years in a ponzi scheme that included defrauding two credit unions out of nearly $200,000. The commission, which did not identify the credit unions, said in an order filed Tuesday against Eugene Miley, doing business as Miley Financial Services based in Beaver, that he had offered and sold certificates of deposit to federal credit unions in the state since 1993 ( Feb. 17). The order said Miley asked credit unions to wire money to him to buy the certificates. In return he would make monthly interest payments to the credit union and return the upfront investment when the certificates matured. However, the commission said Miley did not buy certificates but kept the up-front investment funds or made monthly interest payments to other credit unions. He would send phony confirmation letters to clients indicating he had bought the certificates. The two credit unions tried to collect their upfront investments when they matured in January. Each lost about $99,000, said the commission, which did not say how much was allegedly mishandled beyond the two credit unions. The commission ordered Miley to cease the alleged conduct, which violates state securities laws, or face charges.

First arrests made in Heartland breach frauds

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TALLAHASSEE, Fla. (2/18/09)--The first three arrests in a major theft ring have been made in connection with fraud stemming from the Heartland Payment Systems data breach announced in January. A number of credit unions throughout the nation had to reissue their members' credit and debit cards due to the what may be the largest data breach in history. Three men--Tony Acreus, Jeremy A. Frazier and Timothy Johns--were arrested Feb. 10 in Tallahassee, Fla., and charged with multiple counts of credit card fraud, police said Feb. 16 and Feb. 13). According to Leon County Sheriff's Office, the three allegedly used credit card information stolen from Heartland's records to electronically encode Visa gift cards. The gift cards were then used to make fraudulent purchases at local area businesses, including several Wal-Mart Stores in Tallahassee. The merchandise purchased with the fake cards was then sold for cash. The sheriff's office said total and declined fraudulent transactions were more than $100,000. However, the fraudulent charges are expected to be much higher and more arrests likely will be made in Florida and nationwide as the investigation continues. Authorities are investigating how the men obtained the data. It is not believed that they are the people responsible for the malicious software that sniffed the data from Heartland. John Maloni, a spokesman for the Princeton, N.J.-based Heartland Payment Systems, told The Tuscaloosa News Friday that the company won't know the number of accounts affected until it completes its forensic investigation in the next few weeks.

Year-end stats reflect strength of Maine CUs

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WESTBROOK, Maine (2/18/09)--Maine’s credit unions experienced a strong year in 2008, with assets, shares and loans all increasing, according to year-end statistics reported by member credit unions to the Maine Credit Union League. Asset growth for 2008 was 7.72%, compared with 6% in 2007, putting Maine credit unions on track to top $5 billion in assets later this year. Loans increased over $163 million or 5.13% for the period, and shares grew 6.11%--figures consistent with national trends. Credit union membership remained stable during the year at about 600,000 members. Nationally, Maine has been ranked as the fifth strongest state for credit unions in the past seven years. In difficult economic times, Maine consumers can trust that credit unions will remain safe, strong and growing in the many ways they work to serve their members, said John Murphy, league president. “Now more than ever, Maine consumers can save on financial services thanks to lower fees and better rates on dividends and loans offered by Maine’s credit unions,” Murphy said. “A recent study showed that Maine consumers can save $73 million each year by using a credit union. “When members use a Maine credit union, they not only receive a great value but also piece of mind knowing that Maine credit unions adhere to responsible lending practices and provide sound financial services,” he added.

IKiplingersI Banks cherry pick CUs open vaults

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WASHINGTON (2/18/09)--An article in an upcoming issue of Kiplinger's Personal Finance Magazine notes that credit unions have plenty of cash to lend and their rates beat banks' fees for loans. "While big banks continue to cherry-pick borrowers, credit unions are opening up their vaults," the article begins. "Thanks to conservative investing and lending policies that largely sidestepped the subprime-mortgage mess, credit unions have plenty of cash on hand. Plus, interest rates on most loans average at least one percentage point lower than at banks," it says. "Money for car loans, in particular, is flowing, as credit unions fill the void left by shuttered or frozen carmaker finance arms," writes associate editor Jessica L. Anderson. She outlines low rates, rebates from credit unions' Invest in America program, and refers readers to The article also addresses home loans, and CUNA Mutual Group says the dollar volume of real estate loans jumped 11% last year.'s Greg McBride notes that although credit unions are more willing to lend, it's not because of lower underwriting standards. For the full article, in the April issue, use the link.

WOCCU G7 stresses crisis prep unified regulations

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MADISON, Wis. (2/18/09)--Credit unions worldwide see a greater “internationalization” of regulation, and credit union associations should prepare crisis communications plans to help both themselves and their member institutions cope with the worsening global economy, said World Council of Credit Unions’ (WOCCU) G7 members. Those resolutions topped the agenda for the WOCCU G7’s January meeting in Florida.
Click to view larger image Attendees at the 2009 World Council of Credit Unions (WOCCU) G7 meeting included, from left, Pete Crear, WOCCU president/CEO; Dave Grace, WOCCU vice president of association services; Kieron Brennan, CEO, Irish League of Credit Unions (ILCU); David Phillips, CEO, Credit Union Central of Canada (CUCC); Michael Alleyne, board president, Caribbean Confederation of Credit Unions; Uel Adair, ILCU board president Wictor Kaminski, vice president of National Association of Cooperative Savings & Credit Unions, Poland; Bill Knight, meeting facilitator; Melvin Edwards, WOCCU chair; Brian Branch, WOCCU executive vice president and chief operating officer; Barry Jolette, WOCCU first vice chairman; and Garth Manness, president of CUCC. Not pictured: Dan Mica, president/CEO of the Credit Union National Association. (Photo provided by the World Council of Credit Unions)
The WOCCU G7, comprising the world’s seven largest credit union systems, meets annually to discuss issues affecting financial services in general and credit unions specifically. Due to the severity of the global financial situation, the group also held conference calls last year to better understand and analyze the current financial crisis. “The financial issues facing credit unions today are as bad as they have ever been, not only for U.S. credit unions, but also for credit unions in many of WOCCU’s member countries,” said Pete Crear, WOCCU president/CEO. “Collectively, credit unions in WOCCU's G7 group serve nearly 115 million people worldwide. The actions taken by G7 members affect nearly 65% of credit union members globally.” Participants agreed that regulatory “internationalization“ presents challenges for credit unions and requires increased coordination at a global level. At the request of member organizations, WOCCU staff and volunteers regularly lobby before various government bodies. In 2008, WOCCU influenced credit union regulatory issues in Poland and Costa Rica. One of Africa's first credit union laws was passed in Kenya late last year, the result of a six-year effort by WOCCU, U.S. leagues and credit unions, and the Kenya Union of Savings and Credit Co-operatives Ltd.--the country’s credit union association. Taking a more unified approach to global credit union regulatory development would strengthen credit union systems and institutions so each could better serve members, the group agreed. Participants also stressed the need for crisis communication plans suitable for both associations and the credit unions they serve. Credit unions worldwide enjoy a high degree of member confidence and trust, G7 delegates said. Providing crisis plans will be critical to maintaining trust and service to members during tough times. WOCCU G7 representatives in attendance included: Dan Mica, Credit Union National Association, U.S.; David Phillips and Garth Manness, Credit Union Central of Canada; Kieron Brennan and Uel Adair, Irish League of Credit Unions; Wiktor Kaminski, National Association of Cooperative Savings & Credit Unions, Poland; and Michael Alleyne, Caribbean Confederation of Credit Unions (CCCU). Louise Petschler, Abacus Australian Mutuals, attended remotely. Representatives from Brazil, the seventh of the G7 countries, were unable to attend. In addition to Crear, WOCCU officials and executives participating included: Chairman Melvin Edwards, CCCU; First Vice Chairman Barry Jolette, U.S.; Executive Vice President and Chief Operating Officer Brian Branch; and Vice President of Association Services Dave Grace. The G7 will next meet in July during WOCCU's World Credit Union Conference in Barcelona.

United FCU video discusses bank bailouts

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ST. JOSEPH, Mich. (2/18/09)--United FCU (UFCU) is using a video as part of a new educational campaign to help the credit union let the public know that credit unions are a safe, smart and dependable option for financial services--one that is always there for members, especially in times of financial crisis.
Click for videoClick for video.
UFCU reported 11.5% loan growth in 2008, from the previous year, while bank lending saw record decline prior to the government’s bank rescue plan, UFCU said. The campaign appeared in key markets where bailouts are prominent, including Michigan, Ohio, North Carolina and Arkansas, and hopes to create a broader awareness and change the public's impressions of credit unions nationally. “Because banks have branches in every city--often in multiple locations--and ATMs on every corner, credit unions are frequently overlooked as an option,” said Gary Easterling, president/CEO of UFCU. “As an industry, credit unions are considered to be a relatively small player in the field of financial services because they don't have the physical presence that banks do.” The video mentions credit unions’ higher deposit rates, how credit unions do not chase profits but rather focus on the needs of members, and if the recession continues, credit unions will continue to meet the needs of members. By targeting the lack of understanding the public has about credit unions versus other financial service options, UFCU said it hopes to tell its story to eligible non-members who may not realize that credit unions even exist. UFCU also has invested in a website, which will provide more detailed information about the credit union and its membership advantages, and member testimonials, video clip messages from UFCU's CEO, and links to financial tools. UFCU, based in St. Joseph, Mich., has $849 million in assets.

CU System briefs (02/17/2009)

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* LANSING, Mich. (2/18/09)--Eight credit unions piloting Michigan's Save to Win program, which offers members a chance to win a $100,000 grand prize, plus other prices when they open a share certificate and deposit $25 or more, have been identified (News Now Feb. 11). The participating credit unions are: Central Macomb Community CU, Clinton Township; Christian Financial CU, Roseville; Communicating Arts CU, Detroit; E&A CU, Port Huron; ELGA CU, Burton; Frankenmuth CU, Frankenmuth; NuUnion CU, Lansing; and Option 1 CU, Grand Rapids … * LANSING, Mich. (2/18/09)--The Filene Research Institute has been invited back by a Michigan Senate Banking Committee studying foreclosures after Filene officials made recommendations Feb. 11 stemming from their survey of the depth of the foreclosure crisis in Michigan. Shown here during the testimony are, from left, George Hofheimer, Filene chief research officer, and Robert Manning, professor at Rochester Institute of Technology. Manning conducted the survey. Michigan Credit Union League President/CEO David Adams noted that the league will help arrange a future meeting to discuss further Filene's recommendations (Michigan Monitor Feb. 17). (Photo provided by the Michigan Credit Union League) … * LANSING, Mich. (2/18/09)--Lansing, Mich., Mayor Virg Bernero, visited with the Michigan Credit Union League's board of directors at the board's first meeting in the new league headquarters in downtown Lansing. Bernero thanked the group for continuing to support Lansing through its presence in the downtown area and expressed optimism about the local economy. The city is undergoing new development and urbanization (Michigan Monitor Feb. 17). The mayor, left, was accompanied by Robert Trezise, right, president/CEO of the Lansing Economic Development Corp. (LEDC), and Carl Dorshimer, LEDC vice president and director of downtown core. (Photo provided by the Michigan Credit Union League) …