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WesCorp announces losses for December

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SAN DIMAS, Calif. (2/5/10)--Western Corporate FCU (WesCorp) reported a $335.3 million write down for other than temporary impairment (OTTI) charges during December, bringing its total OTTI losses for 2009 to $1.2 billion. That in turn brings the California-based corporate's total OTTI charges for both 2008 and 2009 to $6.8 billion. Of the December 2009 OTTI charges, $106 million were in not-previously impaired securities, while $320 million were securities that had been previously impaired. Because the corporate can no longer rely on bond insurance for troubled mortgage-backed securities, it is forced by Clayton Holdings to realize new losses, said Joe DeMichele, chief investment officer, during a Webcast on the corporate's financials. Unrealized losses have improved from $5.2 billion in June to $3.157 billion in December, largely due to the marketplace, which has seen more influx of liquidity from the government and better performance in higher yield markets. WesCorp's net interest income for December was $9.9 million, with a year-to-date total to nearly $85.4 million, said Jim Hayes, chief financial officer. Several corporates are reporting losses for 2009: Southeast Corporate FCU told members its losses totaled $45.8 million; Southwest Corporate FCU reported a $226 million loss; and Corporate One FCU, a $43.3 million loss.

97 of Visa issuers opt in on Heartland settlement

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PRINCETON, N.J., and SAN FRANCISCO (2/5/10)--Financial institutions representing more than 97% of eligible Visa-branded debit and credit cards that incurred losses in the Heartland Payment System data breach have accepted a $60 million settlement Visa Inc. made with Heartland and its sponsoring acquirers regarding losses in the breach. Visa and Heartland needed issuers of 80% of eligible cards to meet the settlement requirement. The settlement provides these card issuers with a recovery from Heartland on the losses they incurred related to the breach. They can expect their recovery amounts from the settlement by Feb. 25, according to the agreement. Each accepting issuer will irrevocably waive Heartland, its sponsor banks and Visa from further claims related to and arising from the breach. Those institutions that did not opt in to accept the settlement offer and who are eligible due to losses from the breach will have a second chance at recovery. Visa, Heartland and Heartland's sponsoring acquirers have agreed to renew the Alternative Recovery Officer to the non-accepting issuers. The renewed offer will remain open until 5 p.m. PST on Monday. The settlement provides recovery for U.S. card issuers who chose to participate in the program and international issuers of accounts Visa considered to have been placed at risk of compromise. Once all the remaining conditions of the settlement have been met, Visa will notify the participating issuers with details about the payment process. For additional information, issuers can contact their Visa account executive or Visa's E-Support Team at or call 888-847-2488. Heartland has entered into two other settlement agreements--a $3.6 million agreement with American Express and an agreement for up to $2.4 million in a consumer cardholder class action lawsuit (News Now Dec. 21 and 29). No settlement has been announced in a similar dispute with MasterCard over the breach. Breaches at Heartland and Hannaford Bros. grocery chain were the largest in history, affecting 130 million cardholders. Credit unions were among the financial institutions re-issuing cards that were compromised by the intrusions and some saw fraudulent transactions on the compromised cards. Fraudsters are still testing and successfully accessing credit and debit card numbers that were not blocked or canceled in the Heartland breach, CUNA Mutual Group said in January (News Now Jan. 12).

Mich. gov. announces CUs efforts in business lending

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LANSING, Mich. (2/5/10)--Michigan Gov. Jennifer M. Granholm Thursday announced a partnership to connect small businesses and entrepreneurs to financing from Michigan credit unions, said the Michigan Credit Union League. In cooperation with the Michigan Economic Development Corporation (MEDC) and the Michigan Small Business and Technology Development Centers, more than 30 Michigan credit unions have committed an initial $43 million for small business loans. “In this time when small businesses are struggling to get access to capital, Michigan's local credit unions have stepped forward to make over $40 million available to these startups in a joint effort with our MEDC,” Granholm said. “Some 2,100 new businesses are expected to benefit from these credit union loans.” She announced the program during her State of the State address. The program is still being developed with an anticipated rollout in 90 days, the league said. “Credit unions, as not-for-profit cooperatives, have demonstrated their desire and capacity to lend during these difficult economic times,” said MCUL President/CEO David Adams. “We are fueling loan growth for the auto industry through our ‘Invest in America’ program, and now we see great opportunities to expand small business lending. It is what our state badly needs.” The announcement continues Michigan credit unions’ streak of widespread, positive media coverage, the league said. The partnership was mentioned in most State of the State recaps, including the Detroit News, Detroit Free Press, Crains Detroit Business, the Holland Sentinel, MLive, and an Associated Press story that was picked up by many outlets nationwide.

CU System briefs (02/04/2010)

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* RANCHO CUCAMONGA, Calif. (2/5/10)--Tom Dorety, president/CEO of Suncoast
Schools FCU, Tampa, Fla., and John Radebaugh, president/CEO of the North Carolina Credit Union League, have been appointed to the Board of Directors of CO-OP Financial Services to fill unexpired terms of retiring members. Dorety fills the position of Bucky Sebastian and will stand for election in 2011, while Radebaugh replaces Gary Wolter and will stand for eleetion at CO-OP's Annual Meeting in April. At its Jan. 26 meeting, the board also created a new board seat, currently vacant. It brings the board's total to 11 members. A candidate for the new seat is expected to be elected at CO-OP's annual meeting in April ... * MEMPHIS, Tenn. (2/5/10)--Police are looking for a clumsy, mumbling woman who bungled two attempted robberies of separate credit unions Tuesday in Memphis, Tenn., after she couldn't make herself understood. At Southern Security FCU, just before 10 a.m., the teller couldn't understand the woman's mumbling demands. The woman produced a hold up note, which she flung at the teller before fleeing the building empty-handed. Later, at about 1:40 p.m., a woman arrived at First South CU, fumbled with her purse, then approached the counter after a teller asked several times if she needed help. The woman handed the teller a note, then pulled out a gun, but the teller retreated. Again the wannabe robber fled. She tumbled to the sidewalk after dropping her weapon (The Commercial Appeal and Associated Press Newswires Feb. 4) ... * WASHINGTON (2/5/10)--The Maryland and District of Columbia Credit Union Association's (MDDCCUA) DC chapter will conduct its inaugural Dollars & Sense Expo to benefit consumers in the area on March 6 at Friendship Collegiate Academy. The event was inspired by the success of Baltimore Money Day, which attracted more than 1,500 consumers in its fifth year. The expo will include free tax preparation, free credit reports, educational sessions, and access to exhibitors that will include credit unions, and governmental and non-profit agencies. Credit unions in Washington, D.C., suburban Maryland and Northern Virginia will participate as exhibitors and provide volunteers ... * BATON ROUGE, La. (2/5/10)--Pelican State CU, a $167.1 million asset, Baton Rouge, La.-based credit union, has merged with Pinekraft FCU, a $2 million asset, Pineville, La.-based credit union. Pinekraft served the more-than 300 employees of Pinekraft Paper Mill, which closed before Christmas. Pelican has retained all Pinekraft employees and members and will provide products and services not previously available to Pinekraft members. Pelican has more than 30,000 members (LCUL eNews Feb. 3) … * NEW ORLEANS (2/5/10)--ASI FCU in Harahan, La., garnered national attention from an international nonprofit network for its outreach and services to the area’s Latino community. Louisiana Appleseed, a nonprofit network of 16 international public-interest law centers designed to uncover and correct injustices and barriers to opportunity, honored ASI on Jan. 21 at its Good Apple Gala. ASI was the only financial institution honored. It is estimated that the Latino population in New Orleans rose by 40,000 to 50,000 in the aftermath of Hurricane Katrina. Unbanked Latinos in New Orleans are a $750 million market, which has generally been overlooked by local financial institutions, said the Louisiana Credit Union League. ASI has $299 million in assets (LCUL eNews Feb. 3) … * HARAHAN, La. (2/5/10)--Charles “Chuck” Johnson, a board member of the Louisiana Credit Union League and Barksdale CU, Bossier City, La., died Monday of melanoma, a form of skin cancer. He served on the league board for nearly 15 years. Johnson provided essential input and support for the Initiative Program for small credit unions in Louisiana during its inception, the league said (LCUL eNews Feb. 3) …

CUs top new Forrester most-trusted list

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NEW YORK (2/5/10)--Forrester Research’s annual Customer Advocacy rankings placed credit unions well ahead of banks after about 70% of credit union members surveyed told Forrester that their financial institution puts their interests first. The closest institution was a financial services company with 64%. Credit unions were ranked higher than banks because they have a different operating model--they are owned by their members--and they emphasize customer service, said Bill Doyle, Forrester vice president (The New York Times Feb. 3). The bottom seven institutions in this year’s rankings were all big banks--Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank and HSBC. The Forrester survey was featured in a money blog, “The Least-Trusted Banks in America,” on The New York Times website. Forrester’s rankings are based on a survey of 4,500 consumers, who were asked if they agree with the statement: “My financial provider does what’s best for me, not just its own bottom line.” The rankings come just one week after consumers placed credit unions ahead of banks in the Chicago Booth/Kellogg School Financial Trust Index. Credit unions had a 58% approval rating, compared with 31% for national banks and 53% for local banks. That study was based on data collected in December by the University of Chicago and Northwestern University in Evanston, Ill. (News Now Jan. 28).

86-year-old wins first 100000 Save to Win prize

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LANSING, Mich. (2/5/10)--Billie Smith, 86, a resident of Lake, Mich., has won a $100,000 grand prize from NuUnion CU in Lansing. She is the first grand prize winner of the Save to Win program, which was offered by eight Michigan credit unions in 2009. Smith is one of 11,666 members at the credit unions who saved $8.56 million in the first year of the Save to Win savings raffle. Members were entered into drawings for monthly prizes and a grand prize each time they deposited $25 into a special savings account. The Michigan Credit Union League, which is sponsoring Save to Win with the credit unions, said it is expanding the program this year to help thousands more members save. Nineteen Michigan credit unions have signed up to participate. “It helps make saving fun, at a time where our country simply needs to save more and borrow more responsibly,” said David Adams, Michigan league president. The program aims to help families save their money who would otherwise spend their money on lottery tickets. A survey found that 59% of participants in 2009 had spent money on the lottery in the previous six months. Less than half saved money regularly before opening Save to Win accounts. Save to Win has been featured in The Wall Street Journal, The New York Times and Fox Business. The program was developed by Peter Tufano, Harvard Business School professor, and is managed by the Doorways to Dreams (D2D) Fund. Along with D2D, the Filene Research Institute selected Michigan and CUcorp, a league affiliate, for the 2009 pilot program. The eight Michigan credit unions that participated in 2009 are:
* Central Macomb CU, Clinton Township; * Christian Financial CU, Roseville; * Communicating Arts CU, Detroit; * E&A CU, Port Huron; * ELGA CU, Flint; * Frankenmuth (Mich.) CU; * NuUnion CU; and * Option 1 CU, Grand Rapids.

Dominican Republic CUs visit Wisconsin CUs

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JANESVILLE, Wis. (2/5/10)--As part of a week-long program sponsored by World Council of Credit Unions (WOCCU), 25 staff and volunteers of credit unions from the Dominican Republic visited Blackhawk Community Credit Union (BHCCU) in Janesville, Wis., Jan. 29.
Click to view larger image Click for larger view
Click to view larger image As part of a week-long program sponsored by World Council of Credit Unions, 25 staff and volunteers of credit unions from the Dominican Republic visited Viking Student CU at Parker High School (top) and Cougar CU at Craig High School (bottom), both in Janesville, Wis., to learn how financial institutions in the U.S. are teaching students about financial responsibility and preparing them for the real world. (Photos provided by Blackhawk Community CU)
Most of the participants in the program are volunteers at a credit union, while some are managers and two are CEOs. The program’s goal is for the participants to return to the Dominican Republic with ideas on how to serve their members better while being safer and sounder financial institutions. After visiting BHCCU for a short orientation and branch tour, the group went to Viking Student CU (Parker High School) and Cougar CU (Craig High School), both in Janesville, to learn how financial institutions in the U.S. are teaching students about financial responsibility and preparing them for the real world. The group asked questions about what the student tellers do, programs they are running, and operations in general. Prior to the Janesville visit, the participants spent time at credit unions in Madison and Milwaukee learning about other best practices in credit union operations. Two staff members representing the WOCCU International Partnerships program accompanied the group on the visits and translated for the group. The visitors toured the student-run credit unions and participated with the students in Financial Fact Friday. Games that ask specific financial questions were played and correct answers garnered prizes such as pens, water bottles, or gift cards at the co-op store. Also, Parker and Craig teachers who run the school co-op program showcased the business department programs and answered questions. The program was a great opportunity for some Spanish students who are interested in international business, BHCCU said.

Southeast Corporate financials show 45.8M loss

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TALLAHASSE, Fla. (2/5/10)--Southeast Corporate FCU’s losses totaled $45.8 million in December, according to financials the corporate released Thursday. The losses compare to a $111 million gain in December 2008, the unaudited report said. Total revenue was down 41% to $19.2 million in December 2009, compared with $31.3 million in December 2008. Total assets were at $3.3 billion, a 22% increase compared with the same time period one year earlier. The statement reflects a 100% write-down of Southeast Corporate’s member capital at U.S. Central. Member paid-in capital was reported at zero for December 2009, compared with $20.1 million in December 2008.