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CU System Briefs (02/19/2013)

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  • BIRMINGHAM, Ala. (2/19/13)--Corporate America CU, based in Birmingham, Ala., upgraded its phone system Friday. Callers now will be greeted by an automated attendant directing them to a specific extension or staff directory, or to hold for a member service representative. Employees' extensions are listed on the Contact Us page of the corporate's website.  Credit unions calling after hours will also get the automated attendant and have the option to reach the branch capture , automated clearinghouse and member services departments …
  • MADISON, Wis. (2/19/13)--CUNA Mutual Group has hired Paul Chong as senior vicepresident of Retirement Plan Services. He will lead the development of the company's Retirement Plan Services business in both the credit union and small business markets, overseeing teams in Madison, Wis., and at CPI Qualified Plan Consultants in Great Bend, Kan. He succeeds Kevin Thompson, who returned to CUNA Mutual's Legal Division  as vice president-associate general counsel. Chong formerly served as executive director, head of institutional consulting and 401(k) at UBS, where he was responsible for UBS Wealth Management's $100-plus billion Institutional Consulting and Corporate Retirement business. He also has served as executive vice president for business development at Prudential Retirement and as president of Corporate Market Groups for CitiStreet. He also was an entrepreneur and owned businesses in Florida …

ATM Group Asks MasterCard To Delay EMV Shift, Align With Visa

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JACKSONVILLE, Fla. (2/19/13)--The National ATM CounciI Inc. (NAC) has sent a letter to MasterCard requesting a delay in implementing EMV chip card liability shifts for Maestro international cards used at ATMs in the U.S. 

NAC is a trade association representing U.S. Independent ATM providers--including credit unions--and their suppliers.

"With little more than two months until MasterCard's April 19 liability shift for Maestro cards, there is still no universally applicable AID [Application Identifier] for EMV [Europay, MasterCard and Visa]  in the U.S.," said Bruce Renard, NAC executive director. "And, even if one were available today that would meet federal laws on financial network routing, there is no financially or operationally realistic way the entire U.S. ATM embedded base can be expected to be made EMV compliant in the timeframe involved."

The letter was co-signed by NAC and 36 member organizations, including ATM deployers, processors and manufacturers, many of whom attended the Jan. 29 NAC-sponsored EMV ATM Summit Meeting in Dallas.

The letter requests that the Maestro card liability shift in the U.S. be delayed until:

  • Formulation of a universally accepted AID consistent with financial transaction network routing requirements established under the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
  • Adequate time is provided for the ATM industry to test and deploy the AID, and all related hardware and software upgrades and change outs necessary to render the embedded U.S. ATM base of more than 425,000 terminals EMV compliant.
In September 2011, MasterCard announced that a liability shift for all counterfeit ATM transactions performed on the Maestro network would be implemented on April 19, 2013. More recently, on Sept. 10, 2012, MasterCard announced that it would implement its liability shift hierarchy on Oct. 1, 2016. That has created confusion in the marketplace as to the status of the earlier announced liability shift for MasterCard's international Maestro cards used at U.S. ATMs, said NAC.  

NAC has asked MasterCard to clarify that the Maestro card liability shift was intended to be included in the overall Oct. 1, 2016, EMV-related liability-shift plan. NAC also has requested that MasterCard consider aligning its liability shift plan for Maestro and all other domestic debit cards with Visa's recently announced Oct. 1, 2017 deadline. That would provide a uniform and more realistic implementation timetable for all ATMs in the U.S. to be made EMV compliant, NAC said.

"In addition to developing a universal AID, the industry needs reasonable time for certification, deployment, testing and trouble shooting of hardware and software for all of the different ATM makes and models that comprise the approximately 425,000 ATMs currently deployed in the U.S, and we are hopeful that MasterCard will acknowledge these realities and reconcile its timetable accordingly," Renard said.

Fourteen Selected For Indiana Innovators Program

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INDIANAPOLIS (2/19/13)--Fourteen credit union representatives have been selected to participate in ignite, the Indiana Credit Union League's program to develop innovations so credit unions can better the financial lives of members.

"Many of our igniters have gone on to other successes at their credit unions and some have used their experience with ignite to contribute to projects that have a national scope," said League Director Doug True, of Indianapolis-based FORUM CU.

True, Bob Falk of Lafayette-based Purdue FCU, and Nan Morrow of Columbus-based Centra CU are the three members of  ignite's Leadership Team.

"Under the direction of our Leadership Team, the ignite initiative has thrived in Indiana," said league President John McKenzie. "The credit union support has been tremendous, as many have shared very talented and innovative employees."

The group began developing innovations for 2013 at a meeting last month.

So far, ignite has developed 21 innovations. Several have been adopted by credit unions in Indiana and elsewhere. To develop and promote their innovations, members of ignite working groups attend meetings coordinated by the league and make presentations during the League Convention, the annual Hoosier Credit Union Executives Society meeting, and chapter meetings.

New igniters, who will serve two-year terms, are:

  • Amy Benner, Solidarity Community FCU, Kokomo;
  • Amy Wells, Teachers CU, South Bend;
  • Andrea Buescher, Evansville (Ind.) Teachers FCU;
  • Ashli Moore, Eli Lilly FCU, Indianapolis;
  • Bryan Myers, Crane FCU, Odon;
  • Darlene Beers, Purdue FCU;
  • David Dekker, Interra CU, Goshen;
  • Kelly Baran, FORUM CU;
  • Lee Cramer, Finance Center FCU, Indianapolis;
  • Micaela Wise, AAA FCU, South Bend;
  • Staci Goss, Interra CU;
  • Sven Leander, Finance Center FCU;
  • Tony Belton, General CU, Fort Wayne; and
  • Deidra Davis, Notre Dame FCU.
Continuing igniters in the second year of their terms are:

  • Catrina Tate, Teachers CU;
  • Craig Dauksas, Members Choice FCU, Bloomington;
  • Elaine Rinehart, Eli Lilly FCU;
  • Karen Houser, Natco CU, Richmond;
  • Mike Pence, KEMBA CU, Indianapolis; and
  • Raine Lee, Vigo County FCU, Terre Haute.

Online Marketing At FIs Dominates Traditional Channels

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MADISON, Wis. (2/19/13)--The attention of marketers at banks and credit unions is clearly shifting to online and digital channels, according to The Financial Brand, a website for financial services marketers.

Seven in 10 bank and credit union marketers were asked about which media channels would be most important in 2013.  Their answers: online advertising and social media, said The Brand's  2013 State of Bank and Credit Union Marketing study, conducted this year in partnership with Aite Group.  This is the third year the Brand has produced the study.

The gains in online ads and social media come at the expense of print ads, which lost the most ground in the study, said The Brand's report. About half (47.3%) of all financial marketers surveyed said print advertising is less important, an increase of 9.3% over last year's survey. However, nearly one in four (39.9%) said print advertising's importance was about the same as last year. Only 10.6% said print ads are more important.

For online ads, 71.7% of financial marketers surveyed said they were more important, while 19.4% indicated these ads' importance was about the same.  More than seven in ten (70.5%) said social media are more important, while 18.9% indicated social media are about the same.

Less than one-third said TV/radio ads (28.3%) and outdoor/billboard ads (30.7%) were less important. However 45% said the tv/radio ads are about the same and 23% said they were more important than last year. For outdoor/billboard ads, nearly half (48.1%) indicated these ads were about the same in importance, while 16.4% indicated they were more important.

Onboarding (following up a new membership with a contact to deepen the relationship and solidify loyalty) also increased in popularity, with 59.3% deeming this as more important, and 25.4% saying onboarding's importance is about the same as last year.

Other channels that saw increases in importance:

  • Database/matrix marketing (MCIF), 48.9%;
  • Public relations/community events, 44.2%;
  • Data analytics/ big data, 43.9%;
  • Guerilla/word-of-mouth campaigns, 40.3%;
  • Direct mail, 36.9%;
  • Customer Relationship Management system, 31.1%;
  • In-branch video merchandising, 28.4%;
  • Incentives/giveaways, 27.5%; and
  • Sales collateral and brochures, 16.9%.
For the full report, use the link.

AVCU Testifies On State Cybersecurity, Lemon Law Bills

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MONTPELIER, Vt. (2/19/13)--The Association of Vermont Credit Unions last week testified on two bills that could have potential impacts for state credit unions. The bills relate to cybersecurity and lemon laws.

On Wednesday, Joe Bergeron, AVCU president, testified before the 11-member House Commerce Committee on cybersecurity draft legislation put forth by the state Attorney General's office (Newslines Express Feb. 15). 

Bergeron also testified on a proposed lemon law for dealer-purchased used vehicles.

The cybersecurity legislation would require all Vermont entities in possession of confidential consumer information to have safeguards similar to those imposed on credit unions by federal and state financial regulators, including consumer notification of data breaches;

The proposal would also include a requirement to notify the Attorney General, or the Department of Financial Regulation in the case of state chartered institutions, of data breaches within their own organizations.

Credit unions would be exempt from the first provision, provided they comply with similar National Credit Union Administration mandates stemming from National Credit Union Share Insurance Fund coverage. 

Credit unions already are required to notify their state or federal regulator, dependent on charter, of security breaches of their organization, but the draft legislation would require federal charters to also notify the Vermont Attorney General.

In his testimony, Bergeron explained the regulatory oversight and practices followed by credit unions and the greater potential complexity of a financial institution breach compared with a typical merchant breach. Credit unions typically report data breaches to the financial regulator who conducts the information technology audit, he said.

The lemon-law legislation, H.165, would create a 30-day/2,000-mile warranty on used-vehicle purchases of $4,000 or more and a consumer's right of cancellation of sale or lease under certain circumstances. The law does not obligate dealers to provide a warranty, but does require documentation between the buyer and seller if none is provided. 

AVCU surveyed Vermont credit unions about the potential impact on their lending practices. Bergeron reported the results in testimony.

League, CUs In Dialogue With Manufactured Housing Forum

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PORTLAND, Maine (2/19/13)--The Maine Credit Union League helped coordinate credit union input--as it relates to credit union lending--in a forum hosted Wednesday by representatives from Maine's Manufactured Housing Industry in Scarborough, Maine.

"[The event was] a good opportunity to get differ­ent perspectives about the manufactured housing industry and local lenders," said Quincy Hentzel, league director of governmental affairs. "Manufactured housing is an important part of Maine's housing market, and we had a good discussion about some of the regulatory challenges facing credit unions and other lenders when it comes to lending for manufactured homes."

A representative from the office of U.S. Sen. Angus King (I-Maine) attended and expressed interest in what could be done to help ease regulatory burdens. John Gallagher, the new director of the Maine State Housing Authority, indicated at the meeting he wants to find ways to continue support of the manufactured housing option.

Richard Bradstreet, who owns a manufactured housing dealership in Winslow, Maine, and is a board member at Win­slow Community FCU, participated. He has worked with the league to help facilitate a positive dialogue--especially between credit unions and the manufactured housing industry.

"We want to provide financing to consum­ers purchasing a manufactured home, but it is particularly challenging when the home is on leased land," said Luke Labbe, president/CEO of People­sChoice CU, Saco, who attended the event.

Hentzel said the event was beneficial, and further discussions are planned.

Maine CUs Raise $471K-plus For Ending Hunger

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PORTLAND, Maine (2/19/13)--Maine credit unions raised a record $471,744.19 to help feed the state's hungry, the Maine Credit Union League announced Thursday.

Maine credit unions raised a record $471,744.19 for their Campaign for Ending Hunger Celebration. Pictured at a luncheon celebrating announcement are, from left, John Murphy, Maine Credit Union League president; musician Jonathan Edwards; and Luke Labbe, chair of the Maine Credit Union League's Social Responsibility Committee and CEO of PeoplesChoice CU, Saco, Maine. (Photo provided by the Maine Credit Union League)
The amount is an increase of nearly $25,000 over last year's record donations for Maine Credit Unions' Campaign for Ending Hunger.

"The generosity of the nearly 627,000 credit union members in Maine is extraordinary," explained John Murphy,  league president. "This marks the 17th consecutive year that the campaign has raised a record-setting total. To raise nearly a half a million dollars this past year is especially remarkable in such a challenging economy."

The funds will help food pantries and hunger organizations to purchase nearly $7 million worth of food to help Maine's hungry, the league said.

A luncheon announcing the record total included a performance by Maine musician Jonathan Edwards, who provided songs to CDs sold to raise funds for the campaign. 

The top-three credit unions for total funds raised included:

  • Maine State CU, Augusta;
  • NorState FCU, Madawaska; and
  • Maine Savings FCU, Hampden.
The top three-credit unions with highest per-member contributions were:

  • Gardiner FCU, Kennebec;
  • NorState FCU; and
  • Saco (Maine) Valley CU.

Service CU Already Providing EMV Smart Cards

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PORTSMOUTH, N.H. (2/19/13)--Service CU in Portsmouth, N.H., is providing Visa-branded Europay, MasterCard and Visa (EMV) smart cards to U.S. military members stationed in Germany. Meanwhile, the U.S. still is moving toward adoption of the EMV chip-card standard.

Service CU has 17 branches near military bases in Germany and 23 U.S. branches. Some overseas members have had difficulty overseas using magnetic stripe cards--the prevailing technology in the U.S. (PaymentsSource Feb. 14). The EMV cards have better security and fraud-prevention standards than magnetic stripe cards.

The $2.15 billion asset Service CU is using CardWizard software, an instant card-issuing program, to issue its EMV cards. The software interfaces with a credit union's core banking application, network processors and data-prep systems, which allow card development and personalization to be built into Service CU's existing card-issuing environment, said PaymentsSource.

The new cards issued by Service CU work at all Visa-accepting retailers and are magnetic stripe and EMV compliant. In Germany, EMV cards will be the primary ones issued, while U.S-based members will have a choice.

In line with card network-imposed deadlines and other technology shifts, it is anticipated that the U.S. migration to EMV will take a few more years, said PaymentsSource.

In the meantime, issuers such as United Nations FCU in Long Island City, N.Y., will offer EMV cards for travelers, the publication said.

Clarification On Probe Of Pittsburgh Police Funds

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PITTSBURGH, Pa. (2/19/13)--An investigation into misappropriation of funds at the Pittsburgh Police Department does not involve Greater Pittsburgh Police CU, according to Karen Janoski, CEO of the credit union.

Janoski contacted News Now seeking clarification of News Now's story Tuesday, which had said that the Federal Bureau of Investigation and the Internal Revenue Service had confiscated financial records of police department accounts at the credit union.

The investigation is against the police department--not the credit union, which was simply caught up in a widening search for evidence because it is the financial institution of certain accountholders.

"The credit union received a subpoena, and we carried our compliance with the subpoena, just as any credit union does in any investigation," she told News Now.  The authorities "did not come into the credit union and remove boxes of records or confiscate anything."