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Blizzard closes CUNA-Madison CUs across U.S.

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MADISON, Wis. (2/3/11)--While credit unions in the Midwest, Plains and Southern states dug themselves out Wednesday from Tuesday night's blizzard, credit unions in the Northeast were just starting to receive the effects of the 2,100-mile storm. The blizzard--now dubbed the biggest in decades--closed leagues and credit unions across the nation Tuesday afternoon and Wednesday. It also closed the Madison, Wis., offices of the Credit Union National Association's (CUNA) Tuesday afternoon. The offices remained closed Wednesday after blizzard conditions dumped about 16 inches to two feet of snow during the night in the area. CUNA's offices are open today. The Wisconsin Credit Union League also was closed Wednesday, announced President/CEO Brett Thompson in a message to credit union president/CEOs. It's Madison and Pewaukee offices shut down Wednesday but expected to reopen today. Corporate Central CU delayed opening until noon Wednesday and cautioned it would evaluate conditions as the morning progressed. Even Jimmy the Groundhog, the Sun Prairie, Wis.-based equivalent of Pennsylvania's Punxsutawney Phil, knew better than to venture out. He stayed underground after his weather prognosis ceremony was canceled due to weather. Later, his owner said Jimmy was coaxed out and didn't see his shadow, predicting an early spring "and a [Green Bay] Packers win in this Sunday's SuperBowl" (Madison.com Feb. 2). Phil also predicted spring. It's assumed he is rooting for the Pittsburgh Steelers in Sunday's game. Travelers planning to attend the game are being advised to wait until later in the week to travel. Chicago, which received at least 20 inches of snow Wednesday morning in near white-out conditions, closed its public schools for the first time in 12 years (USA Today and NPR Feb. 2). Airports there canceled more 2,500 flights, and northern Illinois saw almost 80,000 people without power. The Illinois Credit Union System was closed, as was many Illinois-based credit unions. CEFCU, in Peoria, Ill., reported its branches shut down throughout Central Illinois. The Michigan Credit Union League was closed, although all staff worked remotely from home. The league said several credit unions reported closures. In Indiana, the league closed early Tuesday but staff worked remotely at home so they could provide credit unions with service needed. Purdue Employees FCU, in Lafayette, Ind., reported a weather closing as well. The Texas Credit Union League, which had closed Tuesday after an ice storm hit Dallas-Fort Worth, said Wednesday it would delay opening until 10 a.m. However, it left its options open, saying that if a later morning evaluation of the situation saw unsafe road conditions, then it would remain closed until today. The Missouri Credit Union Association's (MCUA) offices in St. Louis were delayed in opening until 10 a.m. Wednesday. However, the Kansas City and Jefferson City offices were closed Wednesday "due to the winter storm and snow accumulation," said Amy McLard, vice president of public/legislative affairs at MCUA. As the storm moved northeast Wednesday afternoon, reports of ice and downed lines were reported in Cranford, N.J. (weather.com Feb. 2). The New Jersey Credit Union League said that Wednesday night's Union/Morris Credit Union Chapter meeting was canceled; the chapter's next meeting is March 2 (The Daily Exchange Feb. 2). The Maine Credit Union League in Portland, Maine, which was open Wednesday, reported it was getting snow, with mostly sleet in Portland. Most credit unions in the southern half of Maine were closed Wednesday, said Jon Paradise, governmental and public affairs manager. Agility Recovery Solutions, which provides business continuity services to credit unions in weather and other crisis situations, was providing its clients with a "Winter Weather Preparedness Checklist" to help clients identify the areas of their business most susceptible to winter hazards and to suggest ways to minimize damage. Agility is a CUNA Strategic Services provider.

Indiana league offers dues rebate more

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INDIANAPOLIS (2/3/11)--The challenging economy and its effect on credit unions and their members have prompted the Indiana Credit Union League and its Servicecorp to begin 2011 by taking several steps to provide financial assistance to affiliates and help them meet those challenges, the league said. "We know credit unions are working hard to deal with the impact of the continuing financial challenges presented by the current economic environment," said league President John McKenzie. "Our 2011 budget reflects an overall picture where a strong retained earnings situation positions us to continue the focus we've had for several years on additional financial support for affiliates and client credit unions. Several efforts are underway," he added. They include:
* Dues rebates to keep the net amount affiliates pay at the prior year's level for the past two years and in 2011. Those rebates totaled more than $160,000 for 2009-2011. * Financial assistance to emphasize the importance the league places on advocacy by helping more Indiana credit union representatives attend the Credit Union National Association's 2011 Governmental Affairs Conference (GAC) in Washington D.C. Feb. 27-March 3. The assistance totaled more than $80,000 during the past three years. This year, more than 100 Indiana credit union representatives will attend the GAC. * Rebates from Servicecorp to lower the cost to attend education sessions and planning sessions. Rebates have totaled $60,000 for 2009-2011. The Indiana Credit Union Foundation has provided another $75,000 in scholarships to assist credit unions for those three years.

NCUA case questioned but judge allows amended complaint

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LOS ANGELES (2/3/11)--A U.S. District Court judge who tentatively ruled in favor of former directors of Western Corporate FCU (WesCorp) in the National Credit Union Administration's (NCUA) lawsuit on the corporate's investments will allow NCUA to file yet another amended complaint. However, he said the "end-result might very well be the same." To win its $6.8 billion lawsuit alleging breach of fiduciary duty and gross negligence in the U.S. District Court in Los Angeles, NCUA must prove that the directors are not protected by California's Business Judgment Rule. The rule provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight," U.S. District Judge George Wu wrote in December, when he tentatively dismissed the case. That tentative ruling generally found in favor of the directors but left open the possibility of NCUA filing an amended complaint if the agency filed an additional "offer" of facts. NCUA's amended "offer," filed Jan. 10, proposed allegations in three categories related to budget and interest-rate spreads; concentration limits and option adjustable-rate mortgages; and damages. The judge's latest tentative ruling will allow the agency to file such an amended complaint based on its "offer," after which another round of legal arguments are expected. In the latest tentative ruling, the court noted "the conclusory allegations of improper motives or conflict of interest are insufficient, as are general allegations of a failure to conduct an 'active investigation, in the absence of (1) allegations of facts which would reasonably call for such an investigation, or (2) allegations of facts which would have been discovered by a reasonable investigation and would have been material to the questioned exercise of business judgment." The only allegations that "even come close to satisfying" are "actions which are 'clearly unreasonable under the circumstances known to them at the time' or are the product of a failure to conduct an 'active investigation,'" this week's ruling said. These allegations "are not significantly different than what were already included" in NCUA's original complaint. A "seemingly gigantic problem with plaintiff's case is that WesCorp never invested in securities graded lower than AA," he said. He noted that if the court would conclude NCUA had overcome the business judgment rule, it "would seemingly only do so with respect to those director defendants who were members of the budget committee" but then questioned "why a budget committee should be held responsible for investment decisions." NCUA's criticism of option ARM mortgage-backed securities is "irrelevant given the business judgment rule because there are no allegations that the director defendants were aware at the time any investment decisions were made of the details underlying the incredibly weak foundation for those securities at the time, or that such information was readily available to them," Wu added. In light of the fact "that it would be difficult to conclude" that NCUA's "amendment would be clearly futile, a fuller consideration of the adequacy of such allegations is arguably warranted," Wu said in allowing NCUA to amend its first claim. However, depending on the materials considered in new briefings, "the end-result might very well be the same." NCUA must file its second amended complaint by Feb. 22, according to the court documents, which were made public Wednesday.

Winter storms close CUNAs Madison offices today

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MADISON, Wis. (2/2/11)--The Madison, Wis. offices of the Credit Union National Association will be closed today due to the inclement weather. The region received more than 12 inches of snow last night in blizzard conditions. For weather-related closings of credit unions and leagues across the nation, see related story, "CUs not immune to weather," in News Now's System section. CUNA's Madison office was closed at 2 p.m. Tuesday. CUNA advised staff late Tuesday night that offices would be closed today. News Now staff are working remotely today to provide updates. Also watch News Now's Twitter account LiveWire for updates.