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CU System briefs (02/07/2008)

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* HARAHAN, La. (2/8/08)--Baton Rouge-based Southern Teachers and Parents FCU received a grant from the National Credit Union Foundation (NCUF) to assist members in buying affordable, reliable, and suitable pre-owned automobiles, reports the Louisiana Credit Union League's eNews (Feb. 6). Members who meet the criteria and complete training will be eligible for down payment assistance up to $1,000. The incentive program will begin this month and end in February 2009 … * MEMPHIS, Tenn. (2/8/08)--To target the unbanked, Memphis Area Teachers’ CU (MATCU) has created the Second Chance checking program. Second Chance accountholders can receive one year of free checking if they complete the Common Cents program, a financial literacy skills course. Those interested in the Second Chance accounts can visit any of MATCU’s branches and bring $100, which will be given back after one year of holding an account in good standing. There are two million families in the U.S. who are unbanked, according to the credit union (Daily News Feb. 6) ... * FORT WORTH, Texas (2/8/08)--American Airlines FCU CEO John M. Tippets, who will retire in mid-year after 17 years as CEO, will share Tuesday the story of his father's 29-day survival of an airplane crash in Alaska at the C.R. Smith Museum in Fort Worth. His father, Joseph H. Tippets, a former CAA/FAA employee, was one of four people who survived the Gillam plane crash in Alaska in January 1943. The four were bruised, shaken up, and injured in the crash landing, which left them with scant food in freezing sub-arctic weather. The story is how the survivors cooperated for the common good … * LONDON (2/8/08)--Britain's Financial Services Compensation Scheme (FSCS) has started processing claims from members of the Caia Park CU in Wrexham and Edmonton CU in north London. The two credit unions became insolvent last month. Of Edmonton's 1,070 members, between 800 and 900 are expected to submit claims. Caia Park had 165 members. FSCS paid the first Edmonton claim one day after the credit union was declared in default and eight days after it closed. The fund gives savers 100% of the first 35,000 pounds they have lost. A Treasury Select Committee report had said the fund was taking too long to compensate members, and a government consultation document said members should be paid within one week. (The Press Association Feb. 6) …

Maine CUs promote membership growth

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WESTBROOK, Maine (2/8/08)--The Maine Credit Union League will promote membership growth through its Membership Growth Committee, an ad hoc committee led by James Lemieux, league board member. The committee will discuss national and state growth trends and recommend initiatives that position Maine credit unions for growth. The committee met for the first time last fall and is scheduling meetings for 2008. “We’re focused on the future,” said Lemiuex, president/CEO of Sebasticook Valley FCU, Pittsfield. It’s crucial that credit unions work together to strengthen their position in the marketplace by identifying and driving member value, said John Murphy, league president. “As a partner in growth, the league will continue to break new ground through service and development, while empowering credit unions to reach new levels of success,” he said. The committee also will share ideas with other leagues and with the Credit Union National Association (CUNA). Membership growth is a priority of CUNA and its Membership Growth Task Force. Growth initiatives such as new educational opportunities, focus groups, learning about Generation Y, and forming financial literacy and human resource councils have been slated for the first quarter of this year. “Credit unions grew because they met the needs of Maine people as the state grew,” Lemieux said. “Today, it’s a different road map, and our mission is clear. Together, we must reclaim the things that set us apart and re-energize the movement for future growth.”

Aranjo embezzlement trial begins

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SPRINGFIELD, Mass. (2/8/08)--The former CEO of a community development credit union and her husband went to trial Wednesday on charges of embezzling funds from the credit union to use for personal expense, business ventures and real estate developments. Carol Aranjo, former CEO at D. Edward Wells CU, which was closed down by federal regulators in 2003, is accused along with her husband, Douglas Smith, of embezzling $1.3 million from Springfield, Mass.-based D. Edward Wells (The Republican Feb. 7). The trial in U.S District Court is expected to last up to six weeks. Prosecution witnesses include former credit union board members, account holders, and members of the National Credit Union Administration (NCUA)--which shut down D. Edward Wells. Aranjo and her husband were arrested at their Springfield home in July 2006 (News Now July 10, 2006). They were charged with embezzlement, conspiracy and bank fraud. The charges alleged they used the credit union's money as their own, mismanaged funds, and doled out bogus loans. When the credit union was liquidated in 2003, it had losses of about $3 million. Aranjo, who was a well-known advocate of community development institutions, was a former chair of the National Federation of Community Development Credit Unions. The federation's board voted to remove Aranjo as chair in 1999, and she departed from the federation in 2000, according to federation Executive Director Cliff Rosenthal (News Now July 10, 2006). Rosenthal said Aranjo resisted the federation's attempts to get an accurate and full accounting of investments the federation had made in the credit union. As a result, the federation initiated and pursued a complaint to the NCUA. NCUA conducted an investigation, which culminated in the liquidation of the credit union.

Watermark CU launches Payday Freedom product

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SEATTLE (2/8/08)--Watermark CU, a $64 million asset, Seattle-based institution, announced the launch of its Payday Freedom product, which is designed to help its members break out of the payday loan cycle. Using Payday Freedom, members can borrow between $200 and $800 at an annual percentage rate of 18%--a savings over traditional payday loans that can charge hundreds, even thousands, of dollars in annual interest. With Payday Freedom, 5% of each loan is deposited into a savings account, helping members save money. Loans are repaid through direct deposit. The credit union developed the product to educate members about using short-term credit responsibly and to teach them to save for their long-term financial needs, said Watermark President/CEO Chuck Cockburn. “Payday lenders are taking advantage of our members,” Cockburn said, adding the solution’s required deposit means “they can start a system of saving. The point is to break the cycle of taking one payday loan to pay off another one.”

Las Vegas hotel fire forces move of conference

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LAS VEGAS (2/8/08)--A fire on the top floors of the Monte Carlo Hotel in Las Vegas last week has forced a venue change for the 2008 Western States Volunteers Conference Feb. 10-12. The California Credit Union League notified all conference registrants of the hotel change in a Feb. 4 e-mail (LoneStar Leaguer Feb. 7). The conference now will be held at the Las Vegas Bellagio Hotel. The Western States Volunteers Conference is for credit union volunteers, including board, supervisory and credit committee members, and any other interested volunteers. However, credit union CEOs and managers also are welcome to participate. The sessions at the conference cover a wide range of topics including: the Bank Secrecy Act, emerging frauds, board room and management ethics, understanding credit union financial information in difficult economic times, what board members need to know about discrimination, the top 10 issues facing supervisory committees, and more.

Today is registration deadline for Wegner Awards Dinner

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WASHINGTON (2/8/08)--Today is the deadline to reserve seats for the 20th Annual Herb Wegner Memorial Awards Dinner to be presented by the National Credit Union Foundation (NCUF) on March 3. The event will be held during the Credit Union National Association's 2008 Governmental Affairs Conference (GAC) in Washington, D.C. Credit unions can make online reservations today through a secure page on the NCUF website. Or they can download a printable form, complete it off-line, and fax or mail the completed form to NCUF today. The 2008 Wegner Awards Dinner will take place at a new location: the Grand Hyatt Hotel, two blocks from the Washington Convention Center where the GAC will be held for the first time. Individual tickets for the three-course dinner are $200 each; tables of 10 are $1,900. Up to $30 per ticket is tax-deductible. The awards ceremony will celebrate three of the highest national honors in the credit union movement:
* Lifetime Achievement Award: Dr. Bob Hoel, retired executive director, Filene Research Institute, Madison, Wis., for decades of research about credit unions and consumers; * Individual Achievement Award: Harriet May, president/CEO, GECU, El Paso, Texas, for changing lives of hundreds of families in America’s poorest city by providing financial education, homeownership counseling and foreclosure prevention; * Outstanding Organization Award: State Employees’ Credit Union (SECU) Foundation, Raleigh, N.C., for leveraging credit union members’ contributions to support education, energy, health care, housing, and human services throughout the state.

Fourteen investors settle lawsuit against CU

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REIDSVILLE, N.C. (2/8/08)--Fourteen investors settled lawsuits filed three years ago against a credit union that sold them investments in the now defunct Evergreen Fund. Rockingham County, N.C., investors filed the suit against the $51.4 million asset Reidsville-based American Partners FCU. Details of the settlement will not be made public, and the investors are ready to move on, according to the plaintiffs’ lawyer Phil Mohr (Greensboro News & Record Feb. 7). The lawsuits claim that American Partners should have known that the investment--a fund called Evergreen Security--was risky and possibly fraudulent. The credit union serves mostly American Tobacco former workers and their families. Managers at the Florida-based Evergreen pleaded guilty about five years ago to criminal charges that included grand larceny and fraud--manifested in a scheme that bilked more than 2,000 investors worldwide out of $214 million, according to published reports. When the fund went bankrupt, the investors’ money was lost. J. Scott Hale, attorney for American Partners, declined comment on the settlements, said the newspaper. Mohr informed Guilford County Superior Court Jan. 23 that he would dismiss the cases.

Shootout at CU in California employee injured

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SANTA FE SPRINGS, Calif. (2/8/08)--A female employee of a credit union in California received a minor head injury when three men posing as delivery men Wednesday robbed the credit union and later fired gunshots at a pursuing security guard. It was the second incident in which gunshots were fired during a credit union robbery within a month (News Now Jan. 22). One of the suspects was later arrested at a nearby freeway ( and Whittier Daily News Feb. 6). Four men arrived at Vons Employees FCU, located on the grounds of a Vons distribution center, at about 10 a.m. in a red Buick LeSabre. Three of the men went inside while the fourth drove away. The men demanded cash, and one pushed back against the door, which shoved a teller into the wall, Donna Young, executive vice president, told the newspaper. The teller was taken to the hospital and released with a small cut. The three men fled in a Chrysler PT Cruiser. A security guard gave chase but the three pointed guns at him and began firing. The security guard didn't return fire and fled. This was the first robbery at the credit union, which has six branches. Sante Fe Springs location is its smallest branch. Last month in Michigan, Devarence Damon Kimbrough, 22, of Elkhart, Ill., was shot by a security guard during an exchange of five shots at Berrien Teachers CU in Niles, Mich., on Jan. 18. Kimbrough later died (News Now Jan. 23).