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CU System brief

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  • MADISON, Wis. (2/5/14)--Credit unions continue to make leadership changes as new CEOs come on board and others announce they are leaving the movement. In Harrisburg, Pa., Belco Community CU announced Amey Sgrignoli was appointed president/CEO Jan. 1 and will replace Lonny Maurer when he retires in early 2015. Sgrignoli joined the $388 million-asset credit union in 2004. The credit union's succession plan has allowed her to work alongside retiring Executive Vice President Charlie DelMarcelle and Maurer, the latter who has been with Belco Community for more than 40 years. In Menomonie, Wis., Greg Lentz announced he would be retiring from WESTconsin CU July 31. Lentz is the credit union's third CEO in its 75-year history. Lora Benrud, the current chief financial officer for the $859 million-asset credit union, will succeed Lentz (The Dunn County News Jan. 31). The chief operating officer of Maple Grove, Minn.'s TopLine FCU, Tom Smith, is replacing retiring CEO Harry Carter. Smith has been with the $341 million-asset credit union since 2008 (Minneapolis/St. Paul Business Journal Jan. 28). Dover-Phila FCU President/CEO David Andreatta retired Friday after nearly 39 years with the $348 million-asset credit union. When he started, Andreatta was only the second manager of the Dover, Ohio, credit union. He is succeeded by Jack Dooling, vice president of operations (Times Reporter Feb. 2).  Robert Andrade, executive vice president and chief operating officer of Pawtucket (R.I.) CU, is retiring after 42 years of service to the $1.5 million-asset credit union (Daily Scan Feb. 4) . . .
 

NEW: CUNA wins Grassroots Innovation Award

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WASHINGTON (2/5/14, UPDATED 4:19 p.m. ET)--The Credit Union National Association's "#DontTaxTuesday" Twitter and Facebook campaigns walked away with a Grassroots Innovation Award from the Public Affairs Council today.
 
"We could not be happier with the success of credit union's social media advocacy," said Richard Gose, senior vice president of Political Affairs at CUNA. "We owe much of our success to the dedication of credit union members, who willingly engage in advocating for their credit unions."
 
The Grassroots Innovation awards are given out annually at the Public Affairs Council's National Grassroots Conference in Florida. The awards recognize the nation's best grassroots programs and campaigns in the categories of Corporate Innovation, Association Innovation, and Social Media Innovation
 
On July 23 and Sept. 10 last year, CUNA and state credit union league advocacy used social media to encouraged credit unions, credit union members and other credit union advocates to contact state and federal lawmakers directly with the unified message of "Don't Tax My Credit Union." Some of the tweets incorporated videos. Below are just three of the kinds of messages sent to legislators:
  • Shiro-oni:  @MaxBaucus @OrrinHatch Truth is, credit unions provide superior deposit & loan rates & greater protection from risk than banks #DontTaxMyCU.
  • StevePoniewaz:  Cooperative status is not a subsidy. Credit Union Members have paid their tax; #DontTaxMyCU@RepAnnWagner
  • Alabama CU: CUs return profits to their members. Taxing CUs hurts 1.8 million Alabamians. Visit bit.ly/ZY97Pz and ell Congress #DontTaxMyCU
For the first "Don't Tax Tuesday" in July over 5,200 messages were posted with the #DontTaxMyCU hashtag with roughly 2,000 being sent directly to member of Congress.

For the second "Don't Tax Tuesday" in September CUNA worked to develop a Twitter and Facebook plug-in on the "Don't Tax" site (see resource link) that would allow advocates to simply enter in their address and directly Tweet their legislators or post messages on Facebook supporting the "Don't Tax My Credit Union" campaign. The second "Don't Tax Tuesday boasted nearly 8,000 tweets with the CUNA Advocacy hashtags including 5,000 directly tagging members of Congress.
 
Overall, since the "Don't Tax My Credit Union" campaign began in May 2013, it has garnered over 1.3 million direct messages to the U.S. Congress.

Callahan CEO to succeed Plauda at Illinois league

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NAPERVILLE, Ill. (2/5/14)--Sean Hession, current president/CEO of Callahan and Associates in Washington, D.C., has been named to succeed Dan Plauda as president of the Illinois Credit Union League (ICUL).
 
Hession, a former Omaha businessman, has been with Callahan and Associates since early January 2012. Earlier, he served in a series of staff and operational positions at First National Bank of Omaha for over a decade.
 
Hession said he is looking forward to joining the league, adding, "The organization has a rich history and a great reputation for member services."
 
Geri Burek, chair of the league's executive search committee, said of the CEO selection, "ICUL is excited to have Sean Hession join us as president and CEO. He comes to ICUL with a great deal of experience in strategy and innovation, and brings the vision that propels organizations to greater heights."
 
Last June 10, Plauda announced his intentions to retire from the top league position on June 30 this year. There will be a 60-day transition period, starting May 1, during which both Hession and Plauda will be on board at the league.
 
Plauda joined the ICUL staff in May 1977, serving at that time as the organization's first general counsel. Before that, he was a partner in a Minneapolis law firm.

Bad-news weather bears down on Kansas CUs

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WICHITA, Kan. (2/5/14)--Credit unions throughout Kansas closed early Tuesday as much of the state was expected to receive up to 10 inches of snow; the snowstorm was expected to move quickly to the east across the midwest section of the country and then on into New England.

According to Reuters, the heavy, wet snow also forced the closing of many schools and state offices across the Kansas region. That report said that authorities advised people to stay home because of what the National Weather Service warned was "extremely difficult travel conditions."

Gov. Sam Brownback declared a state of emergency for the entire state. As of 7:45 p.m. Tuesday, Salina reported 10 inches of snow, and Wichita had 5.3 inches.
 
As of mid-afternoon Tuesday, more than 20 credit unions had closed at least one of their offices:
  • Bell CU, Hutchinson;
  • Bell-Government CU, Dodge City;
  • Central Star CU, Wichita;
  • CommunityAmerica CU, Lenexa;
  • Credit Union of Emporia;
  • Educational CU, Topeka;
  • Emporia (Kan.) State FCU;
  • Envista CU, Topeka;
  • EquiShare CU, Wichita;
  • Frontier Community CU, Leanworth;
  • Hutchinson (Kan.) CU,
  • Hutchinson (Kan.) Government Employees CU;
  • Kansas State University FCU, Manhattan;
  • Mainstreet CU, Lenexa;
  • McPherson (Kan.) CO-OP CU;
  • Meritrust CU, Junction City, Lawrence branch;
  • Medical Community CU, Wichita;
  • New Century CU, Topeka;
  • Quest CU, Topeka;
  • Reliance CU, Kansas City;
  • River Cities Community CU, Atchison;
  • TECU CU, Wichita;
  • USPLK Employees FCU, Leavenworth;
  • Veterans Administration CU, Wichita; and
  • Wesley Medical CU, Wichita.
The Kansas Credit Union Association office also closed at 3 p.m. (CT), but is scheduled to be open during normal business hours today. 

The situation is similar to February 2013 when more than 20 Kansas credit unions closed as the state was hit with up to 18 inches of snow.

Company ordered to stop using 'credit union' in loan ads

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LIVONIA, Mich. (2/5/14)--A marketing company in California agreed to a 2012 cease-and-desist order by the Michigan Department of Insurance and Financial Services (DIFS) to stop misusing the term "credit union" to market loan products.
 
D and D Marketing Corp., Encino, Calif., had been using the terms "Michigan" and "credit union"--as well as names of legitimate credit unions--in marketing "unlicensed payday loans and unauthorized credit union loans to Michigan residents," according to the order.
 
One website asserted that it actually was affiliated with a Michigan credit union, while others used a combination of "Michigan," "credit union" "quick loans" and "cash advance" in the website address.
 
It is a violation of the Michigan Credit Union Act to use the term "credit union" to promote business operations by an organization that is not a licensed credit union (Michigan Monitor Feb. 4).
 
D and D Marketing had asserted that the websites and promotions had been operated by former and/or unaffiliated third-party marketing partners or "publishers."
 
In consenting to the cease-and-desist order, D and D Marketing agreed to "undertake strict marketing and advertising compliance practices" to ensure the legitimacy of third-party providers and all advertising and marketing will be done in accordance with Michigan law.
 

Fla. league endorses Sink in special election for U.S. Rep.

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TALLAHASSEE, Fla. (2/5/14)--The board of the Florida Credit Union Association (FCUA) endorsed Democrat Alex Sink for Florida's open seat in the 13th Congressional District for the upcoming March 11 special election.
 
Sink and Republican David Jolly are running in the special election that will fill the seat of Rep. Bill Young (R), who died in October.
 
Sink served as the chief financial officer for the state of Florida, a time during which she forged working relationship with credit unions.
 
"Alex has a keen understanding of the difficulties facing credit unions today," said Patrick La Pine, president/CEO, League of Southeastern Credit Unions. "She realizes that credit unions play an important role in helping Americans, as well as Floridians, get on solid financial footing."
 
"Her background in financial services gives her an instant knowledge base on today's complex financial issues and regulations," La Pine added.
 
"Receiving the support of the Florida Credit Union Association's board of directors means a lot to me," Sink said. "Credit unions are a diverse group that mirrors our local communities. They are working to help Floridians get affordable loans as well as providing financial counseling so members can get out of debt and begin saving money."
 
FCUA is an affiliate of the League of Southeastern Credit Unions.
 
The Credit Union Legislative Action Council, the federal political action committee for the Credit Union National Association, contributed $10,000 to Sink's campaign.

Conn. league watching sales-tax exemption

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MERIDEN, Conn. (2/5/14)--The Credit Union League of Connecticut and state credit unions are requesting a sales-tax exemption for state-chartered credit unions, given there is a projected general fund surplus of $117.1 million in fiscal year 2014, as this year's state legislative session convened today.
 
The surplus represents about 7% of total estimated expenditures. In addition, the Office of Fiscal Analysis projects a surplus of $8.4 million for 2015.
 
"We haven't asked since 2008 because the state was in the red, but now that we are in the black we figure it's time again," said Kelly Fuhlbrigge, league vice president of government relations told News Now. "It's in the best interest of our members and credit union members throughout the state."
 
Because of their cooperative ownership structure, Connecticut credit unions could return any savings realized from the sales tax exemption into better rates on savings products and loans to their members.
 
The league is also maintaining a defensive posture on foreclosure legislation during the session.  Last year the legislature made changes to the judicial branch's foreclosure mediation program, including extending the program's operation and establishing expedited foreclosure procedures for vacant and abandoned properties.
 
Because the high foreclosure rate persists in Connecticut, the league expects that the legislature may consider additional changes to the program and foreclosure process, including changes related to pre-foreclosure sales and additional procedures to help owners through the mediation process.  "Lengthening the process for us isn't anything more than a regulatory burden," Fuhlbrigge said.

CUs' small-biz support highlighted in NJ Business

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FAIRFIELD, N.J. (2/5/14)--Credit unions in New Jersey last year appear to have expanded their small business loan portfolios faster than the national average, according to a profile of the state industry in New Jersey Business magazine.
 
New Jersey Credit Union League President Greg Michlig told the publication that NCJUL member credit unions increased small business loans by 0.6% in the third quarter of 2013--growth that was 0.5 percentage points more than the credit union national average.
 
"At this point, we are really working with our member credit unions as a league to assist with the resources and expertise that are necessary to offer business loans in this environment," he said. Michlig also pointed out that New Jersey's economy isn't performing well compared to other states due, in part, to recent storms that have pummeled the Garden State.
 
The February edition highlighted the role that credit unions can play in a tight economy. Megan Shull, business development officer at Wall-based First Financial FCU, said that otherwise capable entrepreneurs being shunned by the labor market can use credit union financing to launch their own ventures.
 
The $185 million-asset credit union recently approved a $170,000 loan to finance a small business owner's property acquisition. A larger bank had previously refused to provide the loan "because the dollar amount of the loan probably wasn't large enough," Shull told New Jersey Business.
 
But statutory limits are limiting how much credit unions in New Jersey and their counterparts across the United States, can lend to small businesses, as the magazine detailed. Credit Union of New Jersey President Andrew Jaeger said that the federal constraints on small business loans--12.25% of credit unions' total assets--have almost consistently limited the Ewing cooperative's line of commercial credit at around $3 million.
 
Jaeger, who said that the average business loan made by CUNJ is $200,000, with the typical minimum approved at $10,000, pointed out that credit unions can partner with one another to extend larger amounts of credit to businesses. The $326 million-asset credit union recently lent $9,500 to a doctor's office to help it cover an insurance premium, the article said.
 
NJCUL's Michlig counseled New Jersey Business readers: "The best advice I could offer small businesses is to make sure you shop around and include a credit union or two in the mix when looking for that loan or business service."
 
The Credit Union National Association is currently urging Congress to allow credit unions to play a larger role in small business financing through member business loans (MBLs). CUNA says that raising the federal government-mandated ceiling on MBLs as a percentage of total assets to 27.5% would inject $13 billion into the economy, and help boost employment by 140,000 at no cost to taxpayers. CUNA and credit unions are calling on Congress and the administration to support the Credit Union Small Business Jobs Creation Act (H.R. 688), which would increase the MBL cap to 27.5% of assets.

Cornerstone expands Member Business Services Council

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FARMERS BRANCH, Texas, and HARAHAN, La. (2/5/14)--The Cornerstone Credit Union League and the Member Business Services Council are partnering to expand opportunities to credit unions in Arkansas, Oklahoma and Texas.
 
The Louisiana Credit Union League organized the council in 2011 to provide service and support to credit union professionals who specialize in member business services, including lending. It offers opportunities for networking, sharing best practices and learning from subject matter experts (Leaguer Feb. 3).
 
The council's advisory committee plans the curriculum for council meetings, develops website content, participates in the listserv and promotes council activities at local credit union chapter events. The committee is made up of:
  • Eddie Vollenweider, vice president of business services, Neighbors FCU, Baton Rouge, La.;
     
  • Deanna Geisler, commercial services officer, Barksdale FCU, Bossier City, La.;
     
  • Dee Edie, president/CEO, Diamond Lakes FCU, Malvern, Ark.;
     
  • Mike Gandy, vice president of business lending, Amplify FCU, Austin, Texas;
     
  • Brian Gebard, SVP/chief lending officer, Oklahoma Employees CU, Oklahoma City;
     
  • Peter Hays, chief performance officer, ANECA FCU, Shreveport, La.;
     
  • Jay Noel, Campus FCU, vice president of business services, Baton Rouge, La.;
     
  • Jennifer Green, vice president/league staff liaison, Louisiana Credit Union League; and
     
  • Michael A. Delker, senior vice president of credit union relations/league staff liaison, Cornerstone Credit Union League.
The council offers member-only access to sample policies, research and listserv as well as discounts for education and training programs.
 
To be eligible for membership, a person must be a paid employee from an affiliated credit union, credit union service organizations or other credit union-related organization.

Former Taupa Lithuanian CEO pleads guilty to $15M fraud

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CLEVELAND, Ohio (2/5/14)--Alex Spirikaitis, the former CEO of now-defunct Taupa Lithuanian CU, pleaded guilty to conspiracy to commit bank fraud in U.S. District Court Monday.
 
He is the fourth person related to fraud charges that led to more than $15 million in losses, causing the credit union to be closed and liquidated by the Ohio Division of Financial Institutions and the National Credit Union Administration. At the time of its closure in July, it had 1,150 members and $24 million in assets.
 
Spirikaitis, 51, personally embezzled about $4.2 million from the Cleveland, Ohio, credit union between 2011 and 2013, according to FBI records. He used the embezzled funds to buy firearms, vehicles and a luxury suite at the Cleveland Browns stadium as well as build a $1.6 million home.
 
After the credit union was liquidated, he went into hiding until his arrest in October (The Plain Dealer Jan. 4).
 
Also on Monday, Vytas Apanavicius, the external bookeeper of the credit union, pleaded guilty to conspiracy to commit theft or embezzlement from a credit union. According to court records, the 44-year-old Mentor man defrauded Taupa Lithuanian CU out of $962,689.
 
Spirikaitis and Apanavicius will be sentenced May 9.
 
Former teller Michael Ruksenas, 33, Naples, Fla., pleaded guilty Dec. 2 to embezzling more than $481,000 from the credit union. His sentencing is Feb. 28.
 
John Struna, 51, Concord Township, Ohio, also has been charged in federal court with one count of conspiracy to commit theft or embezzlement of $2.5 million from the credit union.