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Two robbery suspects charged with attempted murder

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GURNEE, Ill. (2/25/10)--Two brothers have been charged with robbery and two counts of attempted murder for shooting multiple times at a Gurnee, Ill., police officer while fleeing a Jan. 29 robbery of Community Trust CU in Gurnee. Rashe Watkins, 33, and Julius Watkins, 29, both of Waukegan, Ill., also were charged with an Oct. 10 robbery of a bank branch in Long Grove. They are considered suspects in two other robberies of Great Lakes CU, Libertyville, and a PayDay Loan in McHenry (The News Sun Feb. 6). The men are being held on $2 million bond. The Federal Bureau of Investigation had posted a $20,000 reward for information leading to the arrest of two men who brandished a handgun with a target-marking laser sight during the robbery of the Community Trust CU. A police officer responding to the robbery alarm saw the laser beam when one of the men fired shots at him before getting in a getaway car driven by a second man. The arrests occurred at a field house and sports and fitness center in Waukegan after a SWAT team surrounded the center and used flash grenades or concussion grenades to smoke out the men.

Kern Schools FCU to close four branches

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BAKERSFIELD, Calif. (2/25/10)--Kern Schools FCU, located in Bakersfield, Calif.--an area hard hit by the recession--has announced it will close four of its 14 branches, effective March 9. The branches are East Hills, Save Mart Wasco, Save Mart Hageman and Ridgecrest, according to an announcement on Kern Schools FCU's website. Kern Schools President/CEO Steve Renock told The Bakersfield Californian (Feb. 24) the closures will result in 40 layoffs as part of a plan to trim the credit union's budget. Half the layoffs will come from the branch closings. Some staff at those branches will transfer to other branches. The other layoffs will be from back-office lending operations and the credit union's communications center. In January, the $1.7 billion asset credit union announced it had losses totaling $40 million for 2009 from borrowers having difficulty paying their auto laons and mortgage payments as the recession progressed. East Hills branch was closed because another larger branch exists about two miles away. Both Save Mart supermarket branches were closed because each require a staff of eight people and cannot provide services beyond those available at ATMs. The Ridgecrest branch is located two hours away--beyond the area the credit union can serve effectively, Renock told the newspaper.

Montana group Expand CU payday-loan pilots

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HELENA, Mont. (2/25/10)--Credit unions piloting short-term loans are supported by an anti-payday lending coalition in Montana. The coalition, calling itself "400% is Too High," has proposed an initiative to cap the annual interest rates of payday loans to 36%. It aims to put high-interest payday lending and title loans on the state's election ballot. Tom Jacobson, executive director of Rural Dynamics, a nonprofit consumer education organization backing the initiative, described the predicament many borrowers find themselves in once they've gone to a payday lender (Public News Service February). There's no doubt families struggling to make ends meet need access to small loans, which is why pilot short-term programs at credit unions could be expanded, he added. He noted the loans are offered at 18% and have other benefits. "And we can actually start getting them [borrowers] the financial counseling, the financial education, and start building them towards economic independence rather than keeping them trapped," he said. The organization has garnered support from a number of groups such as AARP Montana and the Center for Responsible Lending.

CUNA Mutual Group reports 50M in profits for 2009

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MADISON, Wis. (2/25/10)--CUNA Mutual Group reported a $50 million profit in 2009 after sustaining a $150 million loss in 2008. “All of our key capital measures improved in 2009, compared to year-end 2008,” Jim Buchheim, vice president of corporate communications, told News Now. “In many ways, 2009 was year full of challenges--with the economy being No. 1 and weather challenges in the first two quarters that increased the claims we had to handle. We were very pleased with how we performed from a capital standpoint. “We also feel good about the products we brought to credit unions,” he added. “We introduced new products and enhanced established products. We’re looking forward to a good 2010.” Some of the new offerings were: a new whole-life insurance product, a management and professional liability product added to bond coverage for credit unions, and a Medicare supplement product added to CUNA Mutual’s MemberCONNECT program. CUNA Mutual’s 2009 assets were up $1.2 billion year-over year. The company’s 2009 operating gain is anticipated to be roughly $80 million after taxes, Buchheim said. The company paid $883.1 million in claims during 2009--up from $852 million in 2008. CUNA Mutual will report a GAAP surplus of $1.599 billion--a jump of $395 million from 2008, and a risk-based capital ratio of 330% to 340%.

Oregon public funds bill passes Senate

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BEAVERTON, Ore. (2/25/10)--The Oregon Senate passed a credit union public funds bill, HB3700, Tuesday, 24-6. The bill, to be implemented in January 2013, removes the current $250,000 limitation on the amount of public fund deposits a credit union can receive, according to the Credit Union Association of Oregon (CUAO). “As our communities work to rebuild and rethink how best to support local, sustainable growth, the ability for public entities to invest more funds into credit unions provides them with additional local options," said Sen. Rick Metsger, a key supporter of the bill. "Since credit unions by definition serve a local community, those public fund deposits will stay and be reinvested in that community through consumer and business loans as well as sustaining and creating jobs. It’s a positive cascade effect," he added. Throughout the bill’s process, supporters have emphasized that the bill would extend the choice of public entities to seek a fair and competitive rate of return on “the people’s money.” A choice of depositories and competition for deposits of public funds is in the people’s interest, they say. “There are approximately 4,000 public agencies in Oregon that receive public funds and require the services of financial institutions to house those funds," said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations, in explaining why credit unions pursued the bill. "For years, credit unions have been hearing from local public entities that they would like the option of choosing a credit union. This bill simply gives them that option,” Leavitt added. In response to critics who indicated that credit unions’ not-for-profit status should preclude them from receiving public funds, CUAO reiterated that credit unions pay the same share of federal, state, and local taxes as any business, including real and personal property tax and employment taxes. Their tax exemption applies only to corporate income tax because of their not-for-profit structure. As in any cooperative, credit union members pay taxes on their dividend, CUAO said. In the 2003 legislative session, legislators passed a bill to allow public entities to deposit in Oregon credit unions up to the federally insured amount--which was then $100,000. Since federal deposit insurance limits increased to $250,000 per account, the current limit for public entities is $250,000. Since 2003, many public entities have indicated the current $250,000 limit is a great impediment and limits their ability to choose credit unions as a deposit option. The bill provides an open marketplace where all public agencies will be able to secure the most advantageous depository arrangements for the public's dollars, said CUAO.

Hot Springs FCU to merge into Diamond Lakes FCU

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HOT SPRINGS, Ark. (2/25/10)--Members of Hot Springs (Ark.) FCU voted this week to merge into Diamond Lakes FCU, Malvern, Ark. The merger, set to be finalized April 30, will result in member shares and loans of the $8.6 million-asset Hot Spring FCU being subsumed into the $1.4 million asset Diamond Lake FCU (Malvern Daily Record via Malvern-online.com Feb. 23). Hot Springs FCU employees will become employees of Diamond Lakes FCU, the newspaper said. Orientation and training for new employees will take place during the next two months, the paper added.

Summit CU State Central CU announce plans to merge

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MADISON, Wis. (2/25/10)--Summit CU in Madison, Wis., and Milwaukee-based State Central CU Tuesday announced plans for a merger, slated to become effective in June. Members of State Central will become Summit members. “We wanted a merger partner that shared our business philosophy of strong commitment to member service, and would be able to bring enhanced value to our membership,” said Jim Coraggio, State Central CEO. Coraggio will retire when the merger is complete. “This merger will benefit our respective memberships tremendously,” said Andy Faust, Summit CEO. The credit union will expand its services in Milwaukee, “and provide greater convenience and financial offerings to our combined membership.” With the merger, Summit will add two locations in Milwaukee, one in Waukesha, Wis., and one in West Bend, Wis. The merger is contingent on final approval from State Central’s membership, both boards of directors and regulators. Employees of the two credit unions were notified of the proposed merger last week. They were advised that no material changes in employment are planned. Summit CU has $1.362 billion in assets. State Central CU has $74.1 million in assets.

Date set for oral arguments in N.Y. mortgage tax case

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WASHINGTON (2/25/10)--The Credit Union National Association (CUNA) and the Credit Union Association of New York (CUANY) have learned that oral arguments for Hudson Valley FCU's challenge against a New York State tax requirement on credit union mortgage loans will be March 25. "This will be the first opportunity for the parties to make their arguments and may result in some indication of the judge's reaction to some of the issues in the case," CUNA General Counsel Eric Richard told News Now. CUNA and CUANY have filed a joint amicus curiae brief in the case brought by the Poughkeepsie, N.Y.-based credit union before the Supreme Court for New York County, which is a trial-level court located in Manhattan. The trade associations filed the brief in order to take a stand to defend the right of federal credit unions in New York to claim their tax-exempt status from state and local taxes within the context of the Federal Credit Union Act, according to CUNA. The credit union is suing to declare that its mortgages are exempt from the state's mortgage recording tax, which is used by New York as a general revenue collecting mechanism (as opposed to a fee to cover just the cost of operating the state's mortgage recording office, like in most states). The state claims that the federal credit unions must pay the recording tax based on arguments such as that federal credit unions are not federal instrumentalities and that the tax is a "privilege tax" (for the so-called "privilege" of recording a mortgage) that is paid "voluntarily." Hudson Valley FCU has paid nearly $3 million in Mortgage Recording Tax to New York on “no closing cost” loans which it made to members, according to a recent letter to the editor of Origination News (Feb. 1) written by the credit union's President/CEO Mary Madden. The oral arguments will pertain to the state's motion to dismiss the case and the credit union's counter motion for a summary judgment. Attorneys in the case have posted a news alert outlining the history and the issues to increase awareness and support for the case among other New York-based credit unions. To access the news alert, use the resource link.

Payment companies tackle social networking

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MADISON, Wis. (2/25/10)--Two online payments companies--Pay Pal Inc. and ClickandBuy International Ltd. of the United Kingdom-- have introduced applications that allow users to make purchases on Facebook Inc.’s social networking website. PayPal said customers can use its service to buy Facebook credits--used to buy virtual items in online games--and ads (ATM&Debit News Feb. 24). ClickandBuy has created a Facebook application that allows users to purchase virtual goods, content and services offered on the site, and conduct person-to-person fund transfers. Credit unions using social networking media to attract the younger set may want to monitor the new type of applications for possible future innovations. The two companies’ applications are indicative of the coming together of real-world and virtual currencies--particularly for low-value transactions, Beth Robertson, director of payment research at Javelin Strategy and Research, told the publication. “One of the key points of our payments platform is the ability for it to be integrated into what other people are developing,” Anuj Nayar, PayPal director of global communications, told the publication.