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CU System briefs (02/29/2008)

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* ABERDEEN, Md. (3/3/08)--Aberdeen Proving Ground FCU has been named No. 1 in Maryland for youth financial literacy efforts by the National Youth Involvement Board (NYIB). In 2007, the credit union delivered 226 financial presentations to more than 4,500 students across Harford and Cecil Counties. The $621.5 million asset credit union also ranked in the Top 10 in the nation of the total number of students reached and presentations delivered … * EDMONTON, Alb. (3/3/08)--The boards of three Alberta, Canada, credit unions have separately and unanimously agreed to a merger that would make the combined credit union one of the largest in Canada, with $8.58 billion in assets. The board chairs of Servus Credit Union, Common Wealth Credit Union and Community Savings made the announcement Wednesday. The credit unions' members will vote on the merger at separate meetings this month. The resolution requires two-thirds majority support from those attending. The merged credit union would serve 357,000 members in 63 communities throughout the province and employ 1,925 people. Canada's largest credit union, Vancouver City Savings, has $12.3 billion in assets, 2,300 employees and 57 branches (Canada.com Feb. 29) … * VANCOUVER, B.C. (3/3/08)--Vancouver City Savings CU, Canada's largest credit union, said its net margin dropped 37% in 2007 and was down 50% from record earnings in 2004. Last year it earned $28.3 million, down from $45.3 million in 2006. The drop was due partly to a $13.9 million write-down of non-bank asset-backed commercial paper owned by its subsidiary, Citizens Bank of Canada, which held $77 million in those investments. Still, assets reached record levels of $14.1 billion, up 14.8% from $12.3 billion in 2006 (Vancouver Sun Feb. 28) … * MICHIGAN CENTER, Mich. (3/3/08)--A former vice president and chief financial officer of a Michigan Center credit union was charged with embezzling more than $339,000 from the credit union. Terry L. Brandt, 56, is accused of wiring money last year and this year from the general account of Cascades Community FCU to his personal investments accounts to cover stock market losses. No members were affected by the theft. Brandt is charged with two felonies: embezzlement of more than $100,000 and embezzlement from a financial institution. If convicted he faces up to 20 years in prison (mlive.com Feb. 29) …

CDCU selected to launch America Saves Week in NYC

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NEW YORK (3/3/08)--Neighborhood Trust FCU last week hosted a press event to help launch America Saves Week, an effort aimed at encouraging more institutions and individuals to save, reduce debt and build wealth.
From left: Robert V. Hess, New York City Department of Homeless Services commissioner; Lisa Mensah, executive director of the initiative on financial security at the Aspen Institute; Justine Zinkin, Neighborhood Trust FCU executive director; Elvira de la Cruz, Neighborhood Trust FCU member; and Jonathan Mintz, New York City Department of Consumer Affairs commissioner, promoted last week’s America Saves Week in New York City. (Photo provided by the National Federation of Community Development Credit Unions)
Neighborhood Trust is a $7.2 million asset, community development credit union (CDCU) serving the mostly low-income and immigrant community of Washington Heights in New York City. Organized by the Initiative on Financial Security and the Aspen Institute--an America Saves national partner--the press conference included remarks from Jonathan Mintz, New York City Department of Consumer Affairs commissioner; Robert V. Hess, New York City Department of Homeless Services commissioner; Lisa Mensah, executive director of the initiative on financial security at the Aspen Institute; Justine Zinkin, Neighborhood Trust FCU executive director; and Elvira de la Cruz, a member of Neighborhood Trust. Zinkin highlighted the importance of CDCUs in helping low-income New Yorkers save for the future, and cited members like de la Cruz for their efforts. “Opportunities to save, establish credit, and access capital are critical for families seeking to escape poverty,” Zinkin said. “Neighborhood Trust is one of many community development credit unions in New York City committed to offering financial services tailored to the needs of low-income communities, coupled with comprehensive education and counseling efforts.” The two city agencies in attendance also discussed programs they have developed to help low-income New Yorkers reach their financial goals.

Minnesota network trains political advocates

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ST. PAUL, Minn. (3/3/08)--The Minnesota Credit Union Network (MnCUN) held a training session for its new Political and Grassroots Network (PGN) last week in conjunction with Credit Union Day at the Capitol, Minnesota credit unions’ annual lobby day. PGN was launched earlier this year to enhance Minnesota credit union’s political advocacy efforts and involvement in MnCUN’s Grassroots Education and Action Team (GREAT). At the training session, staff provided an overview of grassroots, detailed credit unions’ past success with grassroots efforts and discussed Project Zip Code, the Credit Union National Association (CUNA)’s program to determine constituents by zip code. PGN contacts were encouraged to recruit volunteers for the GREAT program, political fundraising and payroll deduction. Attendees also learned about Minnesota’s revised grassroots activism website, www.greatcreditunions.org. “We are excited to form this new political network and look forward to increased opportunities to expand credit unions’ involvement and effectiveness in grassroots activities,” said Mara Humphrey, MnCUN vice president of governmental affairs. “By bringing credit unions together with the network and CUNA, we can work in sync to accomplish our goals and strengthen the credit union movement.” For more information on nationwide grassroots efforts and CUNA’s advocacy training programs, use the link.

DE training scholarship opened to help in tough economy

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MADISON, Wis. (3/3/08)--Credit union staff and volunteers can now apply for scholarships from the National Credit Union Foundation (NCUF) to attend Credit Union Development Education (DE) training. “We recognize that the economy is tough, so we want to make sure that we do everything we can to make it easy as possible for credit unions to send representatives to DE Training,” said NCUF Executive Director Steve Delfin. “Despite the challenging times, it is important not to lose the momentum the DE Program has gained. Training on cooperative principles and credit union values is now more important than ever.” Training sessions are scheduled April 3-9 at the University of Wisconsin in Madison. The scholarships are available through NCUF’s DE Fund for credit unions that could not otherwise afford the registration fee of $1,600 (double room) or $1,700 (single room). The registration fee includes all training materials, meals and lodging. Credit unions interested in a scholarship can use the link. The deadline to apply is March 17. DE training is open to everyone, from new employees who need a credit union orientation, to seasoned executives who need to recharge. The six-day class focuses on cooperative principles, social impact and credit union uniqueness as a competitive advantage in today’s marketplace. According to Program Director Tom Decker, DE graduates:
* Acquire skills in public presentations, credit union outreach initiatives, problem solving, and technical assistance; * Earn certification as Credit Union Development Educators (CUDEs), a networking group including 434 active volunteers from the credit union movement across the U.S. and 10 other countries, and; * Return to their jobs with a new understanding that local issues may indeed be global, knowing that credit unions have the unique ability to improve the lives of people everywhere by working cooperatively.
NCUF is the primary sponsor of the DE program. Support is provided by the World Council of Credit Unions, the Credit Union National Association, CUNA Mutual Group, state credit union leagues and foundations. Questions can be directed to Decker at 800-356-9655, ext. 4374 or tdecker@ncuf.coop.

70 of ATM transactions are still cash withdrawals

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NEW ORLEANS (3/3/08)--Cash withdrawals accounted for 70% of last year’s transactions at the world’s 1.7 million ATMs, according to an industry executive. Michael Lee, CEO of the ATM Industry Association, told attendees last month at the organization’s two-day conference in New Orleans that the percentage has held steady for several years (ATM&Debit News Feb. 28). Cash is important to consumers because it has value, and they realize it is the most tangible and liquid form of money, Lee said. Cash provides immediate settlement, no settlement risk, and ensures anonymity and ease of use, he added. However, despite the popularity of cash, its U.S. market share has declined the past 30 years. The reason is that more alternative payment methods--debit, credit, electronic payments and automated clearinghouse--now compete with cash, Lee said. But the volume of cash in circulation is still steadily increasing. Between 1980 and 2005, the value of U.S. dollars in circulation has risen 400% from $160 billion to $700 billion, he noted, adding that the volume of notes has skyrocketed by 465%. Despite cash’s popularity, “inhibitors” limit its use and growth, Lee said. Inhibitors include the cost of cash transactions versus other types of payment methods--including debit cards, credit cards, checks and charge cards. Crime also limits the use of cash, he added. Three out of every four personal payment transactions involve cash. By 2011, consumers still will make 66% of all personal payments with cash, some analysts predict.

Wisconsin banks introduce CRA bill including CUs

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PEWAUKEE, Wis. (3/3/08)--A banker-backed bill that would require credit unions to document efforts to serve lower-income and minority consumers was introduced Thursday in the Wisconsin state legislature, but isn't expected to gain any traction, says the Wisconsin Credit Union League. "Not one valid study points to a need for more regulation of credit unions," said Brett Thompson, league president/CEO. "So why propose a new regulation, along with the significant cost it would mean to taxpayers--just for the sake of regulation?" The legislation, supported by the Wisconsin Bankers Association (WBA), has one sponsor--state Rep. Mark Gottlieb (R-Port Washington)--and was in response to a banker-supported study. The bill would apply to credit unions costly regulation similar to the Community Reinvestment Act (CRA), which was enacted to make sure banks adequately meet the financial service needs of all segments of the communities they serve. That law was never applied to credit unions in Wisconsin. A recent hearing scrutinized banks' failure to satisfy the spirit of CRA, and Thompson said he suspects the new bill, AB 897, was introduced to deflect attention from that scrutiny. Although credit unions are not subject to CRA, statistics indicate they do a better job than banks in approving mortgages and providing basic services to low-income communities and to minorities. The league cited 2006 federal data in which Wisconsin's low-income mortgage borrowers' approval rate is 78.7% at credit unions and 48.5% at non-credit-union lenders. For minority mortgage applicants, the credit union approval rate in Wisconsin is 84.6%, compared with 55.4% at non-credit union lenders. Credit unions also operate 40% of all depository institution branches in the state's low-income census tracts. By contrast, 94% of all Wisconsin banks--including 12 of the largest 20--have no branches there. Bankers cite a 2005 study by the National Community Reinvestment Coalition (NCRC) as support for the CRA push. But the same study shows Wisconsin credit unions outperformed Wisconsin banks for three years in providing single-family home purchase, refinance and home improvement loans. A recent study by the National Association of State Chartered Credit Unions concludes that credit unions do a good job of serving their members. "Wisconsin credit unions have a great story to tell about how they serve their communities," Thompson said. "If appropriate, they would look forward to the opportunity to share that story again with the legislature."

PHEAAs student-loan suspension impacts under 100 CUs

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HARRISBURG, Pa. (3/3/08)--Fewer than 100 credit unions in Pennsylvania will be directly affected by the decision of the Pennsylvania Higher Education Assistance Agency (PHEAA) to temporarily suspend its student lending program. According to Bob Hinchey, senior vice president, fee services, at Pennsylvania Credit Union Association (PCUA), PHEAA's action will impact less than one-third of the more than 300 credit unions working with the agency to provide student loans for their members (Life is a Highway Feb. 29). PHEAA announced last week it was suspending its activities as a Federal Family Education Loan Program (FFELP) lender, beginning March 7. That means it will no longer issue loans from its own funds. However, it will continue to provide the federal guarantee, origination and servicing for FFELP loans--essentially providing the systems and processes for loan delivery and repayment. The agency is one of more than 400 lenders participating in the low-cost KeystoneBEST student loan program. About 500,000 students attend postsecondary school in the state with the assistance of a low-cost FFELP loan. PHEAA will continue with other student aid programs and services and will help with the transition to other lenders who are prepared to pick up additional loan volume, said PCUA. It will continue administering the Pennsylvania State Grant Program and other state-funded student aid programs. Student aid providers throughout the nation have been forced in recent weeks to suspend or curtail the lending activity because of failed auctions and persistent turmoil in the capital markets. PCUA "will be working with any impacted credit union to find an alternate solution," Hinchey said.

Youth rap session Many youth dont know CU difference

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LA HABRA, Calif. (3/3/08)--Many youth don’t know the difference between credit unions and banks, according to a credit union education coordinator.
Michelle Lawrence, business development education coordinator for American First CU, facilitates a discussion about finances during a “Teen Rap Session” at St. Cecilia School Feb. 26.
Michelle Lawrence, business development education coordinator at American First CU, La Habra, Calif., spoke to youth during a “Teen Rap Session” at St. Cecilia School in Tustin Feb. 26. During the session, 25 members of the school’s student council shared their views on finances with Lawrence. Many didn’t understand the difference between not-for-profit credit unions and for-profit banks. Some said they’d been taught about savings by their parents, and had money in bank accounts, while others said they still used piggy banks and wanted to save up for a car or college.
St. Cecilia School eighth-grader Jacob Karp discusses finances during a “Teen Rap Session” at the school Feb. 26 with. American CU. (Photos provided by American First CU)
“I want to learn how to balance a checkbook,” said Jacob Karp, an eighth-grader. Lawrence also explained interest rates and credit rating scores to the students, who were a “little hazy” on those topics, she said. Lawrence said she was really impressed at how much they knew. “This is a great age to target. They are still at that absorbing stage, where they show an interest. “It was also refreshing to hear that the majority of these students have to save for what they want. I find they understand the value of money more when their own money is involved,” she added. American First has offered a “bank at school” program for the past two years at St. Cecilia, where students can deposit money into their accounts. This was the credit union’s second “Teen Rap Session.”

Louisiana CUs report solid growth in 2007

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HARAHAN, La. (2/29/08)--Louisiana credit unions reported strong growth for 2007, according to the Louisiana Credit Union League. Credit unions experienced 5.7% loan growth, 4.4% share growth, and a 0.9% increase in membership, to 1.1 million members as of December 2007 (eNews Feb. 27). Assets increased 4.5%, to $6.72 billion from $6.43 billion. Though the number of credit unions declined to 236 from 242, branches increased to 419 from 405, and employees increased to 3,470 from 3,366. The league also reported that:
* Credit unions’ loan-to-share ratio increased to 73.3% for 2007, compared to a national average of 83.3%; * Net income declined 9.5%. This was driven by credit unions giving more back to their members and higher costs of funds (a 24% increase for 2007); * Regular share growth declined 4.1%; * Money market shares increased 9.6%; and * Individual retirement accounts grew 9%.

Oregon CUs successful in supplemental legislative session

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BEAVERTON, Ore. (2/29/08)--Oregon's credit unions saw success on several mortgage lending and identity theft bills before a historic one-month supplemental session of the Oregon Legislative Assembly, which adjourned Feb. 22. According to the Credit Union Association of Oregon (CUAO), the supplemental session was called to test whether the state would benefit from annual legislative sessions. It traditionally meets every other year. Two CUAO-supported mortgage lending bills were passed, and a third opposed by credit unions did not make it through the session. The mortgage lending bills were products of the Governor's Task Force on Mortgage Lending. CUAO had a seat on the task force and participated in drafting and passing the bills. House Bill 360 will help Oregon families facing foreclosure by cracking down on mortgage "rescue" scams by "foreclosure consultants." Senate Bill 1064 places restrictions on mortgage loan originators and requires mortgage bankers and brokers to file an annual report about their activities. House Bill 3603--which would have put an expiration date on "prepayment penalties" that creditors must pay if they want to refinance or pay off their loan early--did not make it through the session. Credit unions and other lenders opposed the bill, partly because it would have applied only to state-chartered credit unions and it created redundant rules. Also passed was an identity theft bill, Senate Bill 1080, which requires the Department of Motor Vehicles to verify both an individual's Social Security number and proof of Oregon residency before the agency issues a driver's license. "We are pleased with the results of this session and feel that the bills of importance to Oregon credit unions were addressed," said Pamela Leavitt, CUAO senior vice president for governmental affairs and public relations. "The fact that credit unions are increasingly being proactively approached to provide input to the legislative process is a great sign that our lawmakers understand the impact that credit unions have in their communities," she added.

CUs at political conventions join vet-housing efforts

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ST. PAUL, Minn., and ARVADA, Colo. (2/29/08)--Credit unions in Minnesota, Colorado and Wyoming will join the Credit Union National Association during the Democratic and Republican National Conventions in constructing specially adapted homes for two servicemen wounded while serving in Iraq.
U.S. Army SSG Travis Strong will move into a home in the Denver area as part of the Homes for Troops program. (Photo provided by CUNA)
The Democratic National Convention will be held in Denver Aug. 25-28. The Republican National Convention is slated for Sept. 1-4 in St. Paul. The Credit Union Associations of Colorado and Wyoming are partnering with Homes for Our Troops and the Democratic National Convention Committee (DNCC) to construct a new home for Staff Sgt. Travis Strong, a former Coloradoan who is a double amputee and currently rehabilitating in San Diego. Minnesota credit unions will team up with Homes for Our Troops and the Committee on Arrangements for the 2008 Republican National Convention initiative, which will build a home in St. Paul for Sgt. Marcus Kuboy, 30, who was injured in an explosion while patrolling the outskirts of Fallujah. His home will be the first in Minnesota to be built by Homes for Our Troops. Credit unions are the driving force behind the Minnesota initiative and are responsible for raising the funds for the service project. "I am thrilled that credit unions have the opportunity to be so instrumental in a project of this magnitude, contributing time and money to honor a Minnesota soldier who fought for our freedom," said Mark D. Cummins, president/CEO of the Minnesota Credit Union Network. "While the convention will come and go, the construction of this new home for Sgt. Kuboy will be a long-lasting reminder of the gratitude and generosity of Minnesota credit union members for years to come." John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming, said, "Colorado and Wyoming's credit unions--which represent 1.7 million members--are pleased to have the opportunity to work with Homes for Our Troops to provide this tangible 'leave behind' for our community, state, region and most importantly, for a very deserving serviceman after the convention is over." Fundraising and volunteer recruitment are underway in both states. In Minnesota, contributions can be made through the Minnesota Credit Union Foundation. Individuals and organizations interested in participating should contact Mara Humphrey at the Minnesota Credit Union Network at mhumphrey@mncun.org. In Colorado, individuals and organizations interested in donating or participating in the project should contact Chris Kemm, grassroots manager, Credit Union Association of Colorado, at 720-479-3345 or 800-477-1697, ext. 3345, or via e-mail at ckemm@colocu.com.

Members plan to offer candidates for First Basin board

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ODESSA, Texas (2/29/08)--Members who opposed First Basin CU’s attempt to convert to a mutual savings bank are seeking information about the credit union’s next board election. “We have a couple of members who want to run,” said Letty Morales, who founded Save First Basin, the group opposing the conversion. First Basin hasn’t told the members yet when the elections are or how many seats will be available. Morales said members have sent the credit union two requests. “We’re at a standstill,” she said. “It’s kind of strange they haven’t gotten back to us.” First Basin suspended its Feb. 21 vote on the proposed charter change “for a number of reasons,” wrote CEO Shem Culpepper in a letter to members. He noted that “numerous false statements” have been circulating about the conversion, and that the board wants to retain its one-member, one-vote structure. The board also is evaluating whether it can reward members with a cash payment if it converts, he wrote.

MCUA co-hosts personal finance instructors training

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KANSAS CITY, Mo. (2/29/080--The Missouri Credit Union Association (MCUA) and several other organizations co-hosted a training session to introduce financial educators to the new National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP).
Katie Tate, training specialist with the Missouri Credit Union Association, reviews the curriculum for the National Endowment of Financial Education's revised High School Financial Planning Program for financial educators in Kansas City, Mo. (Photo provided by the Missouri Credit Union Association)
Forty financial educators attended the session in Kansas City Feb. 15. Five Missouri credit union employees from St. Louis Community CU; United CU in Mexico, Mo.; and United Consumers CU in Independence participated. "This was our first opportunity to really see the HSFPP materials and understand how well they cover the curriculum," said Heather DeMint, marketing manager at United CU. HSFPP's curriculum teaches young people the fundamentals of money management. Katie Tate, MCUA training specialist who was one of the presenters, said the session gave credit union staff attending "an opportunity to make connections with Missouri teachers so they can get into more classrooms to help spread the credit union difference." Other co-hosts were Federal Reserve Bank of Kansas City, Kansas City School District Junior Reserve Officers' Training Corps, University of Missouri Cooperative Extension and University of Missouri's Kansas City Center for Economic Education. Additional HSFPP training sessions will be July 17 in St. Louis and Dec. 30 in Columbia.

Leap Day promo has members leaping

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GREENSBORO, N.C. (2/29/08)--The number 29 could be a lucky number today for members of the eight branches of Premier FCU in North Carolina, and that’s no “leap” of faith.
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The $99 million asset, Greensboro, N.C.-based credit union is holding a “Leapin’ Lizards! My Credit Union Gave me $29” promotion throughout today in honor of the Leap Year day, which occurs once every four years on Feb. 29. Every 29th member entering the credit union’s eight North Carolina locations will be given $29 throughout the day. Premier’s single South Carolina location is closed today, so the credit union will track ATM usage there and pay every 29th user of the machine $29. Winning members in the branches will be greeted at the door with confetti and balloons, and presented with a sticker that identifies them as a winner. The $29 prize will be paid at the teller line. “We wanted to do something fun for Leap Year, so we started brainstorming some different ideas,” said Lori Thompson, Premier executive vice president and chief operating officer. The event should be “a fun way to get our members talking about us for the Leap Year. After all, word of mouth is the best kind of marketing,” she added. Given average branch traffic on Fridays, the credit union expects to pay out a total of about $2,900 for the day. “We figure it’s a great way to give back to our members and generate a little excitement for the day,” Thompson said. Premier distributed fliers this week, announcing the day-long event, featuring a graphic of a leapin’ lizard and a poem.

CU System briefs (02/28/2008)

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* HARRISBURG, Pa. (2/29/08)--The Pennsylvania Credit Union Association (PCUA) has announced its 2008 Lifetime Achievement Awards recipients. Judi Supplee, president/CEO of Keystone FCU, Downingtown, is the William W. Pratt Professional of the Year. Kathy Linn, board chair of Service 1st FCU, Danville, is the Joseph A. Moore Volunteer of the Year. They will be honored at a banquet May 3 during PCUA's annual convention in Pittsburgh (Life is a Highway Feb. 27) … * SUITLAND, Md. (2/29/08)--Andrews FCU introduced a new AndrewSaver program to coincide with this week's nationwide America Saves and Military Saves programs. The ongoing savings vehicle provides resources to make saving easier and encourages members to set a goal with a monthly commitment to save. The account requires $5 to open, and earns dividends with a balance of $25. AndrewSaver has no monthly or minimum balance fees for 12 months, provides a Five Steps to Greater Savings guide, provides the America Saver quarterly newsletter, and gives access to free financial counseling and seminars from the $801 million asset credit union's member education department … * ALEXANDRIA, Va., and WASHINGTON (2/29/08)--HEW FCU celebrated Black History Month by sponsoring, with Young America Works Public Charter High School, the Aviation Instructional Program Dedication Ceremony honoring Gen. Daniel "Chappie" James Jr., the first African-America to become a four star general. The dedication of the school's aviation program was Feb. 26 at the Smithsonian National Postal Museum in Washington, D.C. Featured guests of honor included Former Secretary of Defense Donald H. Rumsfeld, Ret. Gen. Daniel "Danny" James III, and members of the Original Tuskegee Airmen … * LENEXA, Kan. (2/29/08)--After 36 years in the credit union industry, Mike Patrick, chief operating officer (COO) of CommunityAmerica CU will retire. Patrick will complete his day-to-day responsibilities in April and serve as an adviser until June 30. He previously was vice president of the Credit Union of Johnson County for 13 years, and served as president/CEO of Yellow Financial Employees CU from 1985 to 1998. Yellow Financial was renamed CommunityAmerica CU in 1996. He became COO when it merged with Members America CU in 1998. Patrick is a former director of the Credit Union National Association, and a former chairman of the Kansas Credit Union Association, the Kansas Corporate CU and the Kansas Credit Union Council. He currently serves on the supervisory committee of Kansas Corporate CU …

CUNA Councils New look big presence at GAC

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MADISON, Wis. (2/29/08)--The CUNA Councils will unveil their new look at the Governmental Affairs Conference (GAC) March 2-6 in Washington, D.C., and also will sponsor a new kickoff event. The councils are sponsoring Sunday evening’s concert, where attendees can network and watch the band America perform. “The CUNA Councils chose to sponsor a major GAC event because we recognize the importance of encouraging all credit union professionals to be politically engaged and demonstrate the strength and power of America’s 90 million members,” said Nader Moghaddam, vice chair of the CUNA Council Forum.
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At the GAC, the councils also will unveil their updated logos, graphics and Web site features. “The new designs reflect the progressive growth and professional nature of the organization and provide a better visual linkage among the individual management disciplines, reinforcing the face that they’re part of a connected community of executives,” said David Rohn, CUNA Councils vice president. Nearly 5,000 executives make up the councils, which are focused on finance; human resources; training and development; lending; marketing and business development; operations, sales and service; and technology. For more information, use the link.

StretchPay saved CU members 3 million plus in 07

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DUBLIN, Ohio (2/29/08)--StretchPay, a credit union alternative to traditional payday lending, saved members of 31 credit unions more than $3 million in 2007. Credit unions in Ohio, Maryland, Michigan and the District of Columbia made 64,400 StretchPay salary advance loans last year, totaling nearly $25 million. They accumulated $476,000 in fees and $187,000 in interest at an annual percentage rate (APR) of 18%, according to the Ohio Credit Union League. Members borrowing the same amount at traditional payday lenders, which typically charge $15 per $100 borrowed and up to 391% APR, would have paid more than $3.7 million in interest and fees, said the league. StretchPay is a lower-cost alternative for consumers in need of small cash advances for short terms. A credit union charges an interest rate of 18% APR, along with an annual fee of $35, for a $250 Stretch Pay loan. The entire balance must be repaid by the borrower within 30 days before the member can take a new advance. Some credit unions also offer $500 StretchPay loans at 18% APR, with an annual fee of $70. “Our goal is to get our members on a path to economic prosperity,” said Bill Burke, CEO of Day Air CU and chairman of Credit Union Outreach Solutions Inc., which offers the StretchPay program. “We helped our members keep more than $3 million in fees and interest. The free financial counseling and education help them make wise, long-term financial decisions.” In addition to the loan, members who take part in StretchPay receive financial education and counseling from the credit unions to help them break free of the payday lending cycle. Credit unions also report loan payments to the credit bureaus, allowing Stretch Pay consumers to build upon their credit standing.

Michigan CUs regulator educate about avoiding foreclosure

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LANSING, Mich.(2/29/08)--Michigan credit unions and the Michigan Office of Financial and Insurance Services (OFIS) are striving to educate consumers on ways to avoid losing their homes. The state has the third-highest foreclosure rate in the U.S. Though credit unions and other financial institutions that emphasize responsible lending have not contributed to the housing and mortgage crisis, they are working to keep homebuyers from entering into mortgage agreements that should not be made in the first place, regardless of their lender. “Consumers should always look to a trusted financial services partner for help with major financial decisions,” said David Adam, president/CEO of he Michigan Credit Union League (MCUL). “Credit unions generally will give basic advice to those who need help, and OFIS and other state agencies also have resources for borrowers with questions. In all cases, when facing a loan default, borrowers always should contact their lender for assistance.” Credit unions offer members the opportunity to talk one-on-one about their loans. This gives the members the opportunity to possibly have their loan rewritten or modified to meet their needs, MCUL said. Michigan credit unions and the state also offer seminars on whether refinancing is an option or on how to buy a home in today’s market. “Consumers armed with good information before they get to the closing table are less likely to enter a situation that could result in foreclosure down the road,” said Ken Ross, OFIS commissioner. “Homeowners unable to make ends meet should talk to their lender before payments are missed--ask if a loan modification is possible.”

Utah CU bill advances to House

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SALT LAKE CITY (2/29/08)--A bill that would result in some legislative changes to ease restrictions on Utah's state-chartered credit unions passed the state Senate Thursday, but still must pass the state House. “It just passed,” Scott Simpson, president of the Utah League of Credit Unions, told News Now by cell phone from the Utah Senate floor Thursday morning. “The substance of the bill hasn’t changed. There was just one amendment regarding a technical change.” Senate Bill 296, sponsored by State Sen. Curt Bramble (R-Provo), would create several changes to the state charter. It would:
* Increase the amount a credit union can loan to its members to 4% of assets from the current 1%; * Eliminate a requirement that borrowers must be members of a credit union for six months before receiving a business loan, and make them eligible immediately after joining; and * Maintain the current $250,000 cap on business loans, but allow the cap to increase with inflation--pegged to the Consumer Price Index--beginning May 5 with an increase each year on Jan. 1 (Deseret Morning News Feb. 22).
Originally, credit unions wanted the business loan cap to be raised to 10% of a credit union's capital and surplus, and the $250,000 business lending cap to be lifted to 12.25% of a credit union's loan portfolio--similar to the cap for federally chartered credit unions. The league and the Utah Bankers Association (UBA) have promised Bramble and leaders of both houses of the state legislature not to return to the legislature seeking changes to the law for five years, the newspaper said. While not supporting the change for credit unions in the bill, the UBA pledged not to oppose the bill, as part of the compromise solution, Howard Headlee, UBA president, told the paper.

WOCCU launches second Hispanic marketing immersion effort

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MADISON, Wis. (2/29/08)--Credit union staff and executives can now register for an opportunity to learn about Mexican culture and also work with Mexican credit unions during the World Council of Credit Unions’ 2008 Hispanic Marketing Immersion Program. The program commences Sept. 20 in Morelia, in central Mexico. Participants can choose a one- or two-week session priced at $1,600 and $2,600, respectively. During the program, they will live with a Mexican host family who will provide meals and a private room. The immersion program begins each day with four hours of Spanish language instruction, according to skill level. Participants also will work an internship at Caja Morelia-Valladolid or Caja Alianza, where they will learn daily Mexican credit union operations and study marketing strategies. Attendees also can attend the second annual U.S.-Mexico Marketing Workshop, which is included with the program cost. The workshop, scheduled for Sept. 26, will provide marketing information on the four largest Mexican credit unions. For more information, use the link.

New Jersey leagues Gentile lays out new agenda

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HIGHTSTOWN, N.J. (2/28/08)--The No. 1 issue facing the New Jersey Credit Union League (NJCUL) is the image of the league, according to new league President/CEO Paul Gentile who took over the top spot Dec. 3. “There has been a lot of turnover at the league CEO position and other positions that have led to some questions from credit unions in the state,” Gentile told News Now. “We need to bring leadership and stability to the league and build that back up.” Communication is another important issue for the league, Gentile said. “There has not been a great flow of communication from the league to the state’s credit unions in the past,” he said. “The Weekly Exchange” is a league newsletter e-mailed out every week to New Jersey credit unions to keep them informed about credit union issues, and it has been “a tremendous support” to the league and its member credit unions, Gentile said. Gentile’s No. 1 goal is to build trust between NJCUL and credit unions in the state. “Good communication goes hand-in-hand with that,” he explained. Awareness also is a key goal. There are 1.2 million New Jersey credit union members in a state with a population of eight million. That’s a 13% penetration rate, which is the second lowest in the nation, behind Arkansas, Gentile said. “Awareness, in the form of branding, is the key,” he explained. “I think there should be a national branding campaign for credit unions.” Gentile is tweaking the league’s “Difference You” campaign, making it a 10-month program, focusing primarily on radio, events and print ads, but avoiding TV, which Gentile said is too expensive. The NJCUL will air 16 spots a month on the statewide New Jersey radio network. Another goal: Enhancing state charters for credit unions. “Enhancing the dual charter helps by providing more options,” he said. Only 19 of the state’s 220 credit unions are state-chartered, representing only $470 million out of the total $10 billion in credit union assets statewide, he added. Gentile formerly served as the Credit Union Times editor/publisher. He had worked for the publication since 1997. So far there haven’t been too many surprises at his new job, Gentile said. “It’s very different from my life at the Credit Union Times, where I had to know about everything in the industry,” he said. “The background gave me a good broad base of knowledge. So the learning curve hasn’t been so steep for me in New Jersey. “I feel that I’m more a part of the credit union movement here than at my previous job. I have been pleasantly surprised at how helpful other state leagues and the Credit Union National Association (CUNA) have been,” he continued. Gentile also mentioned that he’s working on strengthening the service corporation in the state to better help credit unions. He also is championing a small credit union task force to help 10 small credit unions in the state with under $10 million in assets. Each participating credit union commits to developing a strategic plan, conducting two membership surveys (one at the start of the program, and one after 18 months), and completing CUNA education programs. “Too many credit unions are not doing enough research and strategic planning,” Gentile said. A final item on Gentile’s agenda is empowering a 12-member league task force to review New Jersey credit union governance, which is likely to lead to changes in bylaws and the structure of the league board, he concluded.

Industry groups form CU Risk Council

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ST. PETERSBURG, Fla. (2/28/08)--Nine credit union industry institutions and groups have formed the Credit Union Risk Council to help credit unions develop and deploy effective risk management activities. Participants include the Card Services for Credit Unions, Credit Union Card Center, Credit Union 24, CUNA Mutual Group, The Members Group, Pemco Technologies, Pennsylvania State Employees CU (PSECU), PSCU Financial Services and TNB Card Services. The Credit Union National Association, Federal Bureau of Investigation, MasterCard, The National Association of Federal Credit Unions, U.S. Postal Inspection Service, and the U.S. Secret Service will be advisory participants. “The cooperative environment is the best way to combat fraudulent activities and allow the credit union industry to develop effective deterrents that ensure lower risk for the credit unions, as well as the safety of members’ account and financial information,” said Jeff Russell, vice chairman of the Risk Council and chief innovation officer for The Members Group. The council’s membership also will include a small number of credit unions, such as PSECU, that perform in-house risk management and data security processing, Russell added.

Another text-messaging scam hits St. Louis area

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ST. LOUIS (2/28/08)--Another credit union is reporting its members and nonmembers are receiving e-mails and text messages on their cell phones that attempt to capture personal identification information. Arsenal CU, in St. Louis, and the Missouri Attorney General Jay Nixon are warning consumers in St. Louis about the scheme. The e-mails and messages are in Arsenal's name and began arriving on Feb. 15, said the Missouri Credit Union Association (CourierNet Feb. 27). Nixon said the messages claim there is a problem with recipients' account. Consumers receiving the messages may or may not be members of the credit union. They are customers of several different cell phone companies (US Fed News Feb. 26). The bogus messages instructed recipients to provide information about their credit union account, and debit card and credit card numbers. The thieves created a false replica of Arsenal's online account access page and set up a phone number that connected callers to an automated voice message from "Arsenal CU" asking for the card information. The phone number was deactivated on Feb. 24. As soon as Arsenal became aware of the situation, its phishing attack response plan went into action. Several staffers went in to work Sunday afternoon to respond to calls and e-mails. The credit union also posted phishing alerts on its website and in its lobbies, and reported the incident to the Internet Crime Complaint Center. "We are all over it, and our members told us they appreciate that," said Ken Moser, Arsenal vice president of marketing. "We will continue to provide ongoing education to our members to let them know that we would never ask for their personal information via e-mail." Text-messaging scams are the latest of the more sophisticated techniques used by phishers to capture consumers' identity information. On Tuesday, Keesler FCU in Biloxi, Miss., reported that its members and some nonmembers received cell phone text messages related to a scam using the credit union's identity (News Now Feb. 27).

Jackson County CU hit by Katrina dedicates new home

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PASCAGOULA, Miss. (2/28/08)--Credit unions' cooperative nature received the credit for helping Jackson County CU (JCCU) rebuild after Hurricane Katrina hit the Pascagoula, Miss., area in 2005. The credit union held its official rededication Tuesday at its new home. Hurricane Katrina dumped 312 feet of water inside JCCU's office. The credit union didn't have flood insurance because it wasn't required, said President/CEO Lora Michael (Gulflive.com and Mississippi News Feb. 27). In the wake of the storm, Michael and her staff used the back of her SUV in the parking lot to give members their money after the storm. In November, JCCU will celebrate its 48th anniversary, thanks to a few credit union friends:
* Singing River FCU and Singing River Hospital Systems CU allowed JCCU to share their drive-through windows. * Keesler FCU helped place a trailer on land JCCU had bought for a new branch a year before Katrina hit. * The Mississippi Credit Union League arranged for Bellco CU in Colorado and Bethpage FCU in New York to "adopt" JCCU. They created an account for JCCU at Office Depot to get whatever it needed and to purchase office furniture and rebuild.
"You can see all the hands the credit unions gave us," Michael told the local newspaper. She noted it was a "privilege and a blessing" to be part of the nonprofits' fellowship with family-oriented business practices. The new branch houses four employees, two teller windows and a drive-through service. The credit union serves about 660 members, including members from the U.S. Post Office, SupShips and National Oceanic Atmospheric Administration.

CUs largely unaffected by Florida power outage

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TALLAHASSEE, Fla. (2/28/08)--Though some reported losing power, credit unions in Florida were largely unaffected by a blackout Tuesday afternoon that left roughly three million people in the state without electricity. GTE FCU, Tampa, lost power at four of its branches--Hudson, Lake Mary, Brandon and Bradenton. The outages lasted anywhere from 45 minutes to almost three hours, said Traci Germain, GTE senior vice president of marketing. The branches did not have generators, so they closed during the time they were without power, she added. Miami Postal Service CU experienced a power outage of about 20 minutes but was up and running soon after, CEO Jace Reyes told News Now. Achieva CU, Largo, lost power but the credit union’s generator kicked on immediately, said Sharon Woods, executive assistant to CEO Debbie Rogers. The credit union used the generator for about 30 minutes before power was restored. Southeast Corporate FCU received a handful of calls regarding some service interruptions from its member credit unions, “but nothing major,” said Sandy Baker, senior vice president of sales and marketing at Southeast Corporate. The corporate handled some transactions manually but it was no problem, she said. “We saw no serious impact,” she said. “There were no major issues. They were all up and running this morning.” The phone and e-mail volume was very low, she added. “Had it been a major business disruption, we would have heard a lot more.” No credit unions contacted the Florida Credit Union League (FCUL) with problems regarding the blackout, said Amy Jowers, FCUL vice president of communications. The blackout was a “small inconvenience” for Florida credit unions compared with the natural disasters they normally prepare for, such as hurricanes, Jowers said. “It was a little blip on their radars,” she said. “Now they’re back on course.” News Now also contacted Fairwinds CU, Orlando; Florida Central CU, Tampa; and State Employees CU, Jacksonville, but the credit unions reported no major problems. Tuesday’s blackout affected residents in Southern Florida--including Orlando, Miami, Tampa and several other cities. It was caused by a fire at a Dade County transmission substation operated by Florida Power and Light Co. The problems caused transmission lines and substations to stop service, resulting in the shutdown of two major power plants (The Wall Street Journal Feb. 27).

Norlarco Public Service CU merger expected to close Friday

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FORT COLLINS, Colo. (2/28/08)--The purchase and assumption of Norlarco CU by Public Service CU, a $637 million asset, Denver-based credit union, is expected to close Friday. More details about staffing will be made available Friday, David Maus, Public Service CEO, told News Now. Public Service is finalizing staff plans and positions, and expects most people who work with members in branches to remain in their jobs, Maus said. “This is a historic day for Public Service Credit Union and the ‘New Larco,’” Maus said. “It’s ironic that the purchase and assumption should be consummated on Leap Year Day, because it’s a giant leap for both organizations.” Colorado state regulators placed Norlarco into conservatorship in May after a number of construction loans it issued in Lee County, Fla., became delinquent. In July, the National Credit Union Adminstration took control of the credit union and removed its board of directors (News Now Sept. 20). Norlarco's delinquent loans total more than $65 million, said a Colorado newspaper. Bellco CU, Greenwood Village; Ent CU, Colorado Springs; and Public Service CU, Denver, had allegedly submitted bids to the NCUA (Coloradoan Nov. 27).

Patelco Mission SF partner to assist unbanked

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SAN FRANCISCO (2/28/08)--Patelco CU and Mission SF FCU--formerly Mission Area FCU--joined forces to open a new shared branch in San Francisco Feb. 19 to serve the “unbanked.”
From left: Margaret Libby, executive director, Mission SF Community Financial Center; Anita Macias, senior vice president, Patelco CU; and Salvador Duran, manager/ CEO, Mission SF FCU, attend the grand opening of the Mission SF FCU’s new office in the Mission District of San Francisco. (Photo provided by Mission SF FCU)
The new office, located on the main cultural and commercial corridor of the Mission District, will house Mission SF FCU, its nonprofit affiliate SF Community Financial Center and its Youth Credit Union Program. “This new office makes us more visible to our community so we can reach our people and help them with their financial situations,” said Salvador Duran, manager/CEO of Mission SF FCU, an $8.4 million asset credit union with 2,500 members. “That is our mission--to help people. This would not have happened without the support of Patelco.” Under half of the Mission District population is foreign born, with two-thirds coming from Central America and Mexico. Roughly 34,000 people in the Mission District--about 56% of the district’s population--are unbanked or without a relationship with a mainstream financial institution, according to a recent Brookings Institute estimate. Mission SF Community Financial Center, with Patelco’s support, operates a nationally recognized Youth Credit Union Program (YCUP)--a leadership and savings program for children and youth. The YCUP has 500 members, $75,000 in assets and a staff of five young people. YCUP has recently added two new programs. One is a training arm, Youth Trainers for Economic Power, which employs eight youth trainers to teach community youth about smart money management and financial services decision-making. The other involves a market research firm, the Action Research Committee, which is conducting focus groups and surveys to identify youth attitudes and habits related to saving and spending.

Columnist tongue in cheek CUs have got their nerve

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SAN ANTONIO (2/28/08)--Poor banks. They're having to fight credit unions who have the audacity to try to serve their members with small business loans. That's the tone of a tongue-in-cheek article written by the San Antonio market's top business columnist. David Hendricks' article, "Man, credit unions have really got their nerve," appears in the San Antonio Express-News (Feb. 26). It notes that "those darn credit unions" are "at it again, trying to lure business away from banks." Credit unions are just trying to take advantage of banks, he says, "now that banks are crying big tears after being wounded by all the securities they bought that were tainted with subprime mortgages." Banks have had to raise rates and loan standards, leaving small businesses out of the picture, he notes. "Oh wait. Many small businesses were already out of the picture," he said. He then proceeds to explain why "those darn credit unions became too popular" and grew, and why they want Congress to lift the asset limit on small business lending. The article is one of the results of a media tour the Texas Credit Union League and local credit unions conducted last week in San Antonio. The group also succeeded in getting an op-ed piece, and credit unions hit talk radio Tuesday. For the full article, and a few chuckles, use the resource link.

CU System briefs (02/26/2008)

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* HAMPTON, Va. (2/27/08)--The Federal Deposit Insurance Corp. has issued a special alert after Langley FCU, Hampton, Va., reported that counterfeit checks with the credit union’s name are in circulation. The checks are associated with Internet sales and overpayment scams. The bogus checks have the routing number 096016765, which is assigned to U.S. Bank in St. Paul, Minn. At the top of the border on the counterfeit checks is the statement, “This face of this document has a multicolor background on white paper,” instead of “The face of this document has a multicolor background on white paper,” located on the top border of authentic checks ... * TACOMA, Wash. (2/27/08)--TAPCO CU of Tacoma, Wash., has introduced mobile banking. Members can view their account balances, transfer funds and pay bills with their cell phones. TAPCO has added mobile banking security precautions such as multi-factor authentication, member selected passwords, deactivation in case of a theft or loss, encryption of locally stored data and secure socket layer connection. TAPCO has $213 million in assets ...

Towns zoning law requires permit for CUs banks

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BELMONT, Mass. (2/27/08)--The town of Belmont, Mass., is taking legal steps to establish more control over the number of credit unions and banks moving in. A proposed zoning change would require financial institutions, including credit unions, to apply for a special permit before they can set up a branch in the town. Financial institutions do not add to the vitality of the downtown, according to Jay Szklut, Belmont planning and economic development manager. Some Belmont residents believe that financial institutions take up valuable retail space in the small town (Boston.com Feb. 24). Belmont, a Boston suburb with a roughly 25,000 residents, has one credit union--the $2.2 million asset Belmont Municipal FCU with 363 members--and seven banks. “We believe credit unions add to the vitality of every community that they are a part of,” Rob Kimmet, Massachusetts Credit Union League vice president of marketing and public relations, told News Now. “These moves by communities reflect concerns about large international and national banking entities coming in that don’t have a personality or stake in the community.” Because credit unions and banks close in the late afternoon and aren’t open on Sundays they don’t attract shoppers and their money, Szklut told the newspaper. In the town’s proposed zoning change, financial institutions are defined as establishments operating and engaging in deposit banking, and employing tellers, Szklut told the paper.

WOCCU Unfettered cooperatives maximize access

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WASHINGTON (2/27/08)--Consumers in Latin America need comprehensive financial services, and untaxed cooperatives can provide them with more affordable services, said the World Council of Credit Unions (WOCCU) during “Financial Inclusion in the Americas,” a two-day conference on consumer finances. The conference brought together 80 participants including industry officials from the U.S., Mexico, Guatemala, Honduras and El Salvador, to discuss how the countries can create more inclusive and broadly available services for their citizens. “In our experience, credit union systems grow and provide greater outreach when they are able to offer necessary products and services,” said Dave Grace, WOCCU vice president of association services. “The credit unions require unfettered access to payment systems, credit bureaus, card service providers and networks in order to do that.” Credit unions in Latin American countries are struggling in a share draft battle similar to the one U.S. credit unions fought in the 1970s, Grace said. “Of the countries represented, only Guatemala requires credit unions to pay income tax,” he added. “Taxation can be a threat to credit union survival, and ensuring tax exemption is a clear and demonstrable way for governments to encourage access to financial services.” The U.S. Treasury Department is in favor of increased credit union access to the population and has agreed to provide technical assistance to the four Latin American countries to broaden access to financial services, Grace said.

Filene i3 tool gauges marketability of biz ideas

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MADISON, Wis. (2/27/08)--Aspiring entrepreneurs can test their ideas with The Big Idea Evaluator, an online business readiness tool developed by the Filene Research Institute’s i3 innovation group. The evaluator is based on respondents’ answers to questions in three categories: market, management and money. It provides feedback, offers advice and suggests resources to refine business plans. “It’s an opportunity for credit unions to provide business-friendly services that promise significant rewards in future business deposit and lending services,” said Lisa Renner, i3 member and CU Holding Company president/CEO. “It is just one tool that credit unions can use to attract boomers and provide services that contribute to the bottom line.” Baby boomers are forming small businesses at a higher rate than any other age group, and are more likely to see credit unions as relevant providers of financial services. “When we help members take their business ideas from conception to implementation, we are in an excellent position to earn their business checking and other deposit relationships,” Renner said. “For years the industry has looked for ways to attract younger members, ignoring the opportunity staring us in the face. We own this age group, and it’s just a matter of anticipating their next need so we can help them turn their dreams into reality,” she added. Also, i3 has launched the “What’s The Big Idea Challenge,” a three-question, online application that outlines the member’s business proposition. Mazuma CU in Kansas City, Mo., is piloting the challenge. Mazuma will accept entries through March 31. The challenge is open to members and non-members. The winner will receive a $3,000 marketing package with logo and stationery design, and printing.

Wisconsin CU-backed personal data security bills advance

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PEWAUKEE, Wis. (2/27/08)--Wisconsin lawmakers are advancing two companion bills through the state legislature that Wisconsin credit unions have backed, and that aim to keep safer the personal data stored on credit and debit cards. The legislation--AB 745 and SB 439--introduced by State Rep. Brett Davis (R-Oregon) and State Sen. Bob Wirch (D-Pleasant Prairie), gathered 43 co-sponsors with strong bipartisan support during its initial circulation period at the Capitol, said the Wisconsin Credit Union League. AB 745 passed through the Assembly Committee on Financial Institutions last week by a vote of 9-1 and is expected to pass through committee in the state Senate today. “This legislation is just common sense,” said Brett Thompson, league president/CEO. “It has no effect on the state budget, but enormous impact on every consumer in Wisconsin who uses plastic cards for purchases.” Sensitive authentication data from credit and debit cards often is retained without cardholders’ knowledge and lost by companies who, by the credit industry’s existing standards, shouldn’t have collected and kept it in the first place, Thompson explained. The proposals would toughen industry standards dictating what information can be taken, transmitted and stored from a consumer’s credit or debit card. “Current law has allowed misbehavior related to payment card processing to go unchecked, and the result has been a tacit declaration of open season on consumers’ private information,” Thompson said. Nearly 75% of Wisconsin consumers support measures that would prevent merchants who accept plastic cards from keeping personal information after processing a transaction and require the breaching party to bear any restorative costs. The Community Bankers of Wisconsin, the Wisconsin Bankers Association, the Wisconsin Insurance Alliance, CUNA Mutual Group and the Wisconsin Federation of Co-ops also support the legislation.

Keesler FCU hit by cell phone text scam

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BILOXI, Miss. (2/27/08)--A cell phone text-message scam was targeted against Keesler FCU on Saturday, the credit union announced Tuesday. The cell phone text messages and faxes were broadcast to members and nonmembers in an attempt to get credit, debit or ATM card information, the Biloxi, Miss.-based credit union said. The messages appeared to come from the $1.5 billion credit union and requested that the recipient respond to the communication with the card number, personal identification number or other personal information. Keesler recently was also a victim of another e-mail phishing scam, according to Sharon Seanor, vice president of marketing at the credit union. "These fraudulent attempts were very sophisticated. They attempted to create a sense or urgency or panic, so that the recipient would be tricked to respond. For example, in this case, the scammers indicated that the recipient's bill service had expired," Seanor said. The credit union immediately posted a warning on its website and notified a local television station, which aired a story about the scam. The credit union said it would continue to educate members about how to avoid falling victim to fraudulent activity. "We will never initiate any communication to obtain account information, since we already have that information on file," said the release.

Small biz lending doing well despite credit crunch

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NEEDHAM, Mass. (2/27/08)--Global commercial and small business lending balances increased dramatically in 2007, despite the credit crunch caused by the subprime mortgage lending, according to new research from TowerGroup. TowerGroup’s research report, “From Crunch to Squeeze: Global Impact on the Credit Crisis on Commercial and Small Business Lending,” is authored by Patricia Hines, a senior analyst in Tower Group’s Wholesale Banking practice. TowerGroup is a research and advisory services firm that focuses on the financial services industry.
Click image for complete chart Click image for complete chart
Continued business lending growth is expected for 2008, driven most notably by emerging economies and by lenders targeting small and medium enterprises or middle market firms, TowerGroup said. More credit unions nationwide are offering small business loans to members, according to the Credit Union National Association. About 35% of credit unions nationwide offer service to small businesses, which include loans. Overall, the U.S. subprime mortgage crisis has had limited impact on worldwide commercial and small business lending, with volumes and loans outstanding increasing across all loans (see chart). The ripple effect on commercial lending has a lag time of several months, and the U.S. mortgage crisis is still unfolding. While TowerGroup expects loan loss reserves and loan charge-offs to increase in 2008 among commercial lenders, they should remain at manageable levels, the firm said. For the commercial and small business lending sectors, the greatest impact of ongoing instability in the credit markets is likely to be a renewed focus on traditional underwriting practices and the “three Cs” of credit: character, capacity and collateral. To continue on the industry’s recent growth track, commercial lenders must get back to basics to focus on credit quality, loan covenant enforcement, risk-based pricing, and strong loan documentation across all loan types, the report said. Tower Group believes that loan underwriters also will spend more time on risk assessment, financial statement analysis and legal review in 2008.

Young lawmakers provide advice to young CU pros

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ST. PAUL, Minn. (2/26/08)--Five young legislators shared their experiences and perspectives with participants of the Minnesota Credit Union Young Professionals (MYCUP) Wednesday.
Minnesota legislators under the age of 35 met with young credit union professionals Wednesday about their legislative careers. From left are: Reps. Aaron Peterson (DFL-Appleton), Brad Finstad (R-Comfrey), Andy Welti (DFL-Plainview), Kate Knuth (DFL-New Brighton) and Larry Hosch (DFL-St. Joseph). (Photo provided by the Minnesota Credit Union Network)
More than 30 credit union professionals under age 35 attended. The panel included five legislators under the age of 35:
* Rep. Brad Finstad (R-Comfrey); * Rep. Larry Hosch (DFL-St. Joseph); * Rep. Kate Knuth (DFL-New Brighton); * Rep. Aaron Peterson (DFL-Appleton); and * Rep. Andy Welti (DFL-Plainview).
All said they wanted to spur change in various areas of government through their personal involvement. “As young legislators, we bring a fresh, new perspective to the legislative process,” Finstad said. The representatives have earned respect by having informed opinions, they said. Their opinions and positions are taken seriously when they have research to back up their position, Peterson added. The panel encouraged MYCUP attendees to educate their elected officials about the issues important to them. Welt recommended sending legislators short e-mails with concise bullet points and contact information. Constituents also are valued when they volunteer on legislative election campaigns. The elected candidates remember volunteers and make it a priority to listen to them when they have issues to discuss, Knuth said.

Bill would have fewer restrictions on Utahs CUs

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SALT LAKE CITY (2/26/08)--A bill that would result in some legislative changes to ease restrictions on Utah’s state-chartered credit unions passed a state Senate committee last week, but still must pass the state House and Senate. Senate Bill 296, sponsored by State Sen. Curt Bramble (R-Provo), would create several changes to the state charter. It would:
* Increase the amount a credit union can loan to its members to 4% of assets from the current 1%; * Eliminate a requirement that borrowers must be members of a credit union for six months before receiving a business loan, and make them eligible immediately after joining; and * Maintain the current $250,000 cap on business loans, but allow the cap to increase with inflation--pegged to the Consumer Price Index--beginning May 5 with an increase each year on Jan. 1 (Deseret Morning News Feb. 22) .
Originally, credit unions had wanted the business loan cap to be raised to 10% of a credit union’s capital and surplus, and the $250,000 business lending cap to be lifted to 12.25% of a credit union’s loan portfolio--similar to the cap for federally chartered credit unions. “I’m encouraged that several members of legislative leadership have been willing to provide meaningful relief for our state-chartered credit unions,” Scott Simpson, president of the Utah League of Credit Unions, told News Now. “It’s a step in the right direction for credit unions. It rolls back some setbacks sustained in prior state legislation in 1999.” The league and the Utah Bankers Association (UBA) have promised Bramble and leaders of both houses of the state legislature not to return to the legislature seeking changes to the law for five years, the newspaper said. While not supporting the change for credit unions in the bill, the UBA pledged not to oppose the bill, as part of the compromise solution, Howard Headlee, UBA president, told the paper.

Americans report mixed progress on savings efforts

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WASHINGTON (2/26/08)--About half of U.S. households report adequate progress in their savings attempts, says a study released Monday in conjunction with America Saves Week, an annual event to encourage saving. Roughly 53% of those surveyed save at least 5% of their income, while 57% of those not retired say they are saving enough for retirement with a "desirable standard of living," said the report. The national survey was commissioned by the American Savings Education Council (ASEC) and America Saves, a group of 80 organizations participating in America Saves Week, which is this week. Many credit unions and the Credit Union National Association are participating. Nearly three-fourths (73%) of consumers surveyed said they "spend less than their income and save the difference." Although 53% save at least 5% of their income, only 28% save at least 10%--the amount experts urge people to save. Seventy-one percent of respondents reported they have sufficient emergency savings to pay for unexpected expenses such as car repairs or a doctor's visit. Yet, 57% said they are saving enough for retirement with a desirable standard of living. One key reason for inadequate retirement savings: a failure or inability to "save for retirement at work through a 401(k) or other contributory plan." Only 55% of the non-retired respondents said they have such a plan. Self-reporting savings habits also help account for inadequate savings progress:
* 62% have a savings plan with specific goals; * 49% have a spending plan that allows them to save enough money to achieve the goals of their saving plan; * 42% save automatically through regular, preauthorized transfers from checking to saving or investments; and * 41% save a portion of tax refunds, gifts, bonuses or other financial windfalls.
Few reported serious debt problems: 21% said their consumer debt is growing or remains at the same level, and 76% will pay off all mortgage debt before retirement. The findings are sobering, given the tendency of people to report savings habits and progress as positively as possible. "Hard data about savings behavior suggest that responses to several questions were buoyed by the personal optimism of respondents," said Stephen Brobeck, executive director of Consumer Federation of America and a leader in America Saves. Income differences influence savings more strongly than other factors such as age, gender, ethnicity and education, said the report. A large majority of households with at least $75,000 (high-income group), about half of those with incomes between $35,000 and $75,000 (middle incomers); and a small minority of those with less than $35,000 (low-income group) were adequate savers. Other findings:
* 81% of the high-income group and 34% of the low-income group reported saving at least 5% of their income; * 90% of high-incomers and 48% of the low-incomers reported adequate emergency savings; * Among those not retired, 85% of high-incomers and 28% of low-incomers said they are saving adequately for retirement; * Among the non-retired population, 77% of the high-income group and 24% of the low-income group reported participating in a retirement plan at work; * 85% of the high-income group and 36% of the low-income group reported having a savings plan; and * 72% of the high-income group and 29% of the low-income group said they have a spending plan.

CU System briefs (02/25/2008)

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* NORTHVILLE TOWNSHIP, Mich. (2/26/08)--The Paul Bunyan Chapter of credit unions traveled to Lansing, Mich., and lunched Feb. 19 with five state lawmakers: State Reps. Darwin Booher (R-Evart); Goeff Hansen (R-Hart); Gary McDowell (D-Rudyard); Joel Sheltrown (D-West Branch) and Howeard Walterk (R-Traverse City). They were joined by Michigan Credit Union League President/CEO David Adams; Executive Vice President Patrick LaPine; Legislative Affairs Director Andrew Doerr and Political Affairs Manager Nancy Short. From left are: Marc McKellar of Members CU; Fred Schuster of Wexford Community CU; Bob Raden of Forest Area FCU, and Booher. (Michigan Monitor Feb. 25). (Photo provided by the Michigan Credit Union League) … * FARMERS BRANCH, Texas (2/26/08)--Shell FCU is flying the juntos avanzamos flag, indicating the credit union has a long-term commitment to serving the needs of Hispanics. In a ceremony Thursday at the Deer Park-based credit union's Pasadena branch, Miguel Reyes, a member since 1997, assisted Texas Credit Union League President/CEO Dick Ensweiler and Shell FCU CEO Chris Lindelof in raising the flag (LoneStar Leaguer Feb. 25) …

Utah Beehive conversion confused with Idaho Beehive

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REXBURG, Idaho (2/26/08)--When Utah-based Beehive CU announced last week its members had voted to convert the credit union to a mutual savings bank, the news confused many people in East Idaho. They assumed their credit union--Beehive FCU (BFCU)--was now a bank. "Nothing could be farther from the truth," said BFCU CEO Shane Berger, whose BFCU is a $117 million asset federal credit union based in Rexburg, Idaho. The converting Beehive CU in Salt Lake City is a state-chartered credit union. "The converting Utah credit union has no relationship whatsoever with Beehive FCU in Idaho," said Berger. "We want everyone to know clearly that BFCU has no plan now, or in the future, to convert to bank status. "We believe deeply in the philosophy, principles and structure of the credit union movement," he said citing the differences in structure and organization that make credit unions different from other financial institutions. Berger is chairman of the Idaho Credit Union League board and said he will travel to Washington, D.C., next week to help Congress understand the importance of credit unions and the benefits they offer to members.

New Michigan regulator has league experience

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LANSING, Mich. (2/26/08)--Ken Ross, a former Michigan Credit Union League (MCUL) staff member, has been appointed as Michigan’s chief regulator of state chartered financial institutions. Michigan Gov. Jennifer Granholm announced Ross’ appointment Friday. Ross will serve as Office of Financial and Insurance Services (OFIS) Commissioner, effective immediately. “To our knowledge, this is the first time that an individual with a credit union background has ever served as the state’s chief regulator of financial institutions,” said MCUL President/CEO David Adams. Ross joined MCUL in October 2000 as regulatory affairs director, and was later named regulatory and legal affairs vice president. He played a role in modernizing the Michigan Credit Union Act, the league said. Ross left MCUL in December 2003 to join OFIS as chief of staff to the former commissioner. Granhom signed an executive order earlier this month, which renames OFIS as the Office of Financial and Insurance Regulation, effective April 6. The order establishes the position of a new state insurance consumer advocate to work on behalf of Michigan consumers’ interests in obtaining affordable and reliable home and car insurance.

Pa. payday loans alternative saved 2 million in 07

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HARRISBURG, Pa. (2/26/08)--Credit Union Better Choice loans saved Pennsylvania residents about $2 million in 2007, the Pennsylvania Credit Union Association announced. Since the program’s launch in October 2006, roughly 64 credit unions have agreed to offer the loans. Of the credit unions, 50 made 5,706 loans, totaling $2.7 million in volume (Life is a Highway Feb. 25). Pennsylvania consumers saved 80 cents in loan fees for every dollar borrowed through the program. Borrowers also placed a total of $273,432 into savings accounts. The association recently released first-year results from the program, which was developed in conjunction with the Pennsylvania Treasury Department.

NASCUS State System Summit to meet Aug. 21-23

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ARLINGTON, Va. (2/26/08)--The National Association of State Credit Union Supervisors (NASCUS) Summit will be held Aug. 21-23 in Seattle. The summit will address member business lending, unrelated business income tax (UBIT), the mortgage crisis, compliance and volatility in financial markets. Speakers include:
* Jeff Thredgold, economic futurist; * Jim Devine, Hipereon Inc., who has trained NASCUS’ examiners on member business lending. He is co-creator and lead faculty member for the California Bankers Association Commercial Lending School, Oregon Bankers Lending Institution, and Credit Union Executives Society School of Business Lending; * Dennis Dollar, former National Credit Union Administration (NCUA) chairman and partner in Dollar Associates; * Franklin Drake, a partner with Smith Debnam, Raleigh, N.C., who focuses on creditors’ rights, creditors’ bankruptcy and commercial litigation; and * Richard Hagar, a mortgage fraud expert, real estate agent, and appraiser and instructor for the Appraisal Institute.

Maryland league asks for wild card laws on loan costs

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ANNAPOLIS, Md. (2/26/08)--The Maryland and District of Columbia Credit Union Association (MDDCUA)--along with the Maryland Bankers Association--has asked the state regulator to invoke Maryland’s “wild card” laws on loan costs. The two groups made the application to State Financial Regulation Commissioner Sarah Bloom Raskin. Invoking these laws would allow Maryland state-chartered credit unions and savings banks to, in certain cases, temporarily continue to charge closing costs on loans and lines of credit (Focus Newsletter Feb 25). MDCCUA also is backing Maryland’s Senate Bill 347 and House Bill 852, which would allow credit unions and saving banks to legally continue the practice of charging closing costs on loans and lines of credit, in certain instances. Both efforts are aimed at reversing the Maryland Court of Appeals Bednar decision. In September 2006, in the case Andrew Bednar v. Provident Bank of Maryland, Inc., the court of appeals reversed a Baltimore Circuit Court ruling granting summary judgment to a bank that collected closing costs from the borrower (Bednar) solely because the borrower prepaid his loan. “Recapturing closing costs are a good deal for consumers [and such a practice] as it has been done, is good for consumers,” Michael Beall, MDDCUA president/CEO, told the Maryland House Economic Matters Committee.

Hearings begin today on Maryland fin lit task force

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ANNAPOLIS, Md. (2/26/08)--The Maryland and District of Columbia Credit Union Association (MDCCUA) advocacy team is working to secure passage of two state bills that would implement a statewide task force to study the level of financial literacy in Maryland. The bills--Senate Bill 533, sponsored by State Sen. C. Anthony Muse (D-26), and House Bill 1242 sponsored by State. Del. Dan M. Stein (D-11), would create a statewide task force composed of representatives from the state’s General Assembly, credit unions, banks, teachers’ unions and the state superintendent of schools (Focus Newsletter Feb. 25). The task force’s mission would be to gauge the average level of financial literacy held by Maryland citizens, and to make recommendations to the General Assembly on how to raise the average Maryland citizen’s awareness in the area of financial literacy. Senate Bill 533 will be heard today in the Senate Education, Health and Environmental Affairs Committee. House Bill 1242 will be heard March 4 by the House Ways and Means Committee.

Kansas banker-backed FOM bill in Senate subcommittee

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TOPEKA, Kan. (2/26/08)--Kansas credit union supporters answered the last questions of a Senate subcommittee Friday in response to SB 535, a bill introduced by the Kansas Banking Association (KBA) that would change how credit unions are regulated and whom they can serve. The subcommittee will begin work on the bill Wednesday. The bill or a modified bill would then proceed to the full Senate Financial Institutions and Insurance Committee for consideration, said the Kansas Credit Union Association (KCUA). In a press release, KCUA said it could only speculate about the specific impacts the banker-backed bill will have on the state's credit union industry but added the bill is clearly directed at reducing consumer access to Kansas credit unions. "At this time, the process is in full swing, and we have placed our faith in the legislative process in Kansas," said Jerel Wright, assistant vice president of governmental and public affairs at KCUA. "We are asking that legislators make the right decision for credit unions and consumers in Kansas." If the bill were passed without revisions, it would fundamentally change the way Kansas credit unions have operated and been regulated over the past 80 years. It also would dramatically increase the regulatory burden placed on state-chartered credit unions by requiring extensive public notification and appeals processes for branching, merging and field of membership changes, said KCUA. "In effect, this bill would effectively eliminate the benefits of being a Kansas-chartered credit union because the bill adopts federal law regarding field of membership and state banking law for branching and mergers," said KCUA. "This is truly a consumer issue, and consumers should have the right to choose where they conduct their financial business," said Marla Marsh, president/CEO of KCUA. "When consumers are facing an economic and credit crisis, would we want to restrict or constrict access to a consumer-friendly alternative?" Marsh asked.

Pa. Supreme Court to hear FOM case arguments April 16

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HARRISBURG, Pa. (2/25/08)--The Pennsylvania Supreme Court announced it will hear oral arguments in an appeal involving the community charter of Belco Community CU on April 16 in Philadelphia, says the Pennsylvania Credit Union Association. The court had set the date to hear briefs and arguments, which focus on whether the Pennsylvania Department of Banking employed appropriate administrative procedures when it reviewed Belco's notice to operate as a community credit union (Life is a Highway Feb. 22). The appeal relates to a Nov. 13, 2006, decision by the Pennsylvania Commonwealth Court that the department did not follow procedural due process requirements when it did not conduct hearings or make records available to banking interest groups. "We look forward to the opportunity to persuade the Supreme Court that the Department of Banking handled the Belco matter in a manner consistent with the Credit Union Code and Pennsylvania's Administrative Agency Law," said Rick Wargo, PCUA executive vice president and general counsel. Belco Community CU is a $278 million asset credit union based in Harrisburg. The Department of Banking granted it a community charter to serve seven counties in central Pennsylvania. During the course of the appeal, it can operate under its community charter (News Now May 4, 2007).

Beehive members mull complaint with NCUA over vote

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SALT LAKE CITY (2/25/08)--Members of Utah-based Beehive CU say they may file a complaint with the National Credit Union Administration (NCUA) over the membership vote to convert the credit union to a mutual savings bank. In a press release Friday, members said they may file a complaint to NCUA, which must certify the election within 30 days. "Our basic concern," said long-time member Teri Dial, "is that the history of credit union-to-bank conversions is a history of insider enrichment at the members' expense. Beehive has stated there are no current plans to sell stock, but members cannot be confident that this will not be the end result." Beehive announced the vote results Thursday. In the vote, 36% of members voted, with 53% voting for the conversion and 47% against. "According to our credit union, about 82% of the members are either opposed or did not vote," said Dial. "There is no mandate for the board's radical change." Beehive did not release an actual ballot count, but the figures supplied indicate that if less than 250 votes had switched, a majority of voting members would have voted down the proposal. At the same time, at least 395 members who were no longer members of the credit union may have received ballots and voted in the election, said Dial. "It is unclear how the 14th largest credit union in Utah feels it can serve its members' matters as one of the smallest banks," she added.

National savings week has begun

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WASHINGTON (2/25/08)--America Saves Week kicked off Sunday, with organizations--including the Credit Union National Association (CUNA) and credit unions--encouraging people across the nation to save and build wealth, not debt. This year's focus is encouraging people to save through automatic transfers into a savings account. Many states have issued comparable savings week proclamations. Just two examples: Washington has declared Washington Saves Week, while Florida has its Florida Saves Week. Washington Gov. Chris Gregoire urged organizations to educate residents about the importance of saving money. The state credit union regulator, the Department of Financial Institutions, is among the organizations offering free financial literacy training to high school teachers in the state. Cities have followed suit. Philadelphia Saves is sponsored by the Consumer Credit Counseling Service of the Delaware Valley. Partnering with Philadelphia Saves is American Heritage FCU, Franklin Mint FCU, and Mainline Health Employees FCU, according to the Pennsylvania Credit Union Association (Life is a Highway< Feb. 11). The week is also designated MilitarySaves Week. Many installation credit unions and banks will offer reduced minimum deposits for savings accounts and have special offers to help service members make short- and long-range savings plans, according to the Department of Defense (US Fed News Feb. 20). A recent survey by Thrift Savings Plan found that of nearly 20,000 uniformed and civilian federal employees, less than 21% of active duty service members are saving for retirement. They cited lack of funds as the key reason for not contributing to a savings or retirement account. Of course, credit unions aren't tied to promoting savings just one week a year. Next week, March 3-7 is National Consumer Protection Week, according to the National Credit Union Administration, and some credit unions will urge savings at that week's events. The Ohio Credit Union League is partnering with the state and other organizations to host financial education events throughout the state (eLumination Newsletter Feb. 13). But this week might be a good time for credit unions to start preparing for the National Youth Saving Challenge, when credit unions encourage youth to make deposits at their credit union. The challenge, sponsored by CUNA, occurs during National Credit Union Youth Week, April 20-26. It's a free program that helps credit unions build strong relationships with youth and their families. Use the links for more details.

9-year-olds CU-related math project a winner

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GREENSBORO, N.C. (2/25/08)--An elementary school math project based on branch traffic patterns at Carolina Mountains CU, Penrose, N.C., has earned first- and second-place awards for nine-year-old Ansley Harron.
Ansley Harron, the daughter of Brian Harron, chief financial officer at Carolina Mountains CU, Penrose, N.C. won first- and second-place awards for her math project analyzing branch traffic at the credit union. (Photo provided by the North Carolina Credit Union League)
Ansley, the daughter of Brian Harron, chief financial officer at the credit union, won first place in her school and second place in a county math competition, according to the North Carolina Credit Union League (Weekly Update Feb. 22). Ansley will compete next at the Western North Carolina Regional Math Fair at Appalachian State University in April. She also will present her findings to the credit union board in spring. Brian and Ansley pulled the teller reports for November and December 2007, and examined which days were busiest at the credit union. Ansley used Excel spreadsheets to analyze the information, taking holiday closings into account. She also interviewed CEO Diane Rogers, her father said. The credit union has never done an analysis on traffic patterns before, but Ansley’s research indicated that Carolina Mountains had made the right decision to provide extra staff on Mondays and Fridays--the busiest days. Her project indicated that many members used the drive-up on Saturday mornings, validating the credit union’s decision to open on the weekends. Ansley’s project taught her a lot about credit unions. She read about how they offer better rates and lower fees, and it “gave her a chance to learn a little more about what her dad does for a living,” Brian said.

Iowa state leaders support CUs Little Guy

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Iowa Gov. Chet Culver kicks off the Annual Iowa Credit Union League Legislative Issues Conference Tuesday in Des Moines, Iowa.
DES MOINES, Iowa (2/25/08)--Iowa state legislative leaders voiced their support for credit unions and “The Little Guy” at the annual Iowa Credit Union league Legislative Issues Conference Tuesday. More than 100 Iowa credit union representatives convened to learn more about the legislative issues affecting the credit union industry and how to engage their legislators. Iowa Gov. Chet Culver and National Credit Union Administration Chairman JoAnn Johnson were featured speakers at the conference. Culver focused on the need for financial literacy in Iowa and acknowledged that Iowa credit unions have been actively involved with financial education for their members. He invited the Iowa league to join the Governor’s Financial Education working group. “It’s important that we teach our children and young adults the importance of managing money at a young age,” Culver said.
Iowa State Senate President John P. “Jack” Kibbie meets “The Little Guy” at the Annual Iowa Credit Union League Legislative Issues Conference. (Photos provided by the Iowa Credit Union League)
Johnson thanked Iowa credit unions for their support and cooperation over the years. She also addressed some of the issues NCUA is working on, including improving member business lending regulations, and proposing rules concerning mergers and acquisitions. Iowa State Treasurer Michael Fitzgerald encouraged Iowa credit unions to take part in the Linked Investments for Tomorrow (LIFT) Program. Two credit unions already participate in the program, which works to invest capital into small businesses owned and operated by Iowa residents. Conference participants and state legislators also were introduced to “The Little Guy,” who represents hard-working men and women that credit unions serve. “The Little Guy” is a national awareness campaign spearheaded by the Credit Union National Association.

CUs on the Tube The CU Difference part deux

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MADISON, Wis. (2/25/08)--The 19-year-old spokesman for Young and Free at Commonwealth CU in Alberta, Canada, has created the second part of a video touting the difference between banks and credit unions. Larissa Walkiw, Young and Free’s spokesman, shows some key differences between the two--such as location, ease of receiving services and ATM access.

Sarbanes to keynote World CU conference

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MADISON, Wis. (2/25/08)--Paul Sarbanes, a former Democratic senator from Maryland and the co-author of The Public Company Accounting Reform and Investor Protection Act, known as the Sarbanes-Oxley Act, will keynote the World Council of Credit Unions’ (WOCCU) 2008 World Credit Union Conference in Hong Kong July 13-16. Sarbanes, a long-time credit union supporter, plans to review circumstances that led to the passage of Sarbanes-Oxley and its implications for businesses. “The bottom-line message is that everyone should be interested in honesty and accountability, not only consumers, but businesses as well,” he said. “The small percentage of business people who operate dishonestly can have a profound impact. They tarnish everyone, and their actions can have widespread economic consequences.” Sarbanes-Oxley, which was created to hold companies liable for unethical actions, has been credited for transforming the business world and restoring confidence in Wall Street. The legislation applies to credit unions with regard to transparency of financial records, Sarbanes noted. “There has been increasing demand for greater transparency since passage of the legislation, and credit unions have been very high up when it comes to financial accountability.” Credit unions remain very important players in the financial services field. “I like the fact that they are member-owned and member-focused,” Sarbanes told WOCCU. “You’ve also promoted financial literacy, which puts you squarely on the side of your members’ best interests. “Credit unions must remain faithful to their mission and stay close to their members,” he added. “Those are the same concepts WOCCU strongly supports with its development efforts in other countries.”

Missouri CUs talk good works at State Capitol

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JEFFERSON CITY, Mo. (2/25/08)--Twenty-five employees from 13 Missouri credit unions shared the credit union difference during a visit with state lawmakers Wednesday. Along with legislator-office visits, five tables in the state Capitol rotunda featured “Credit Unions in the Community” activities and outreach efforts, said the Missouri Credit Union Association (Legislative Updates Feb. 22). Displays included information about credit unions’ work with specific financial education, consumer advocacy and charitable programs, including:
* Foreclosure alternatives; * Identity theft prevention; * REAL Solutions and payday lending alternatives; * Youth financial education and savings programs for children; * How to get the best deal on a car loan; and * Improving credit scores.
“It was really valuable to show our legislators the many ways that credit unions help members with their financial concerns while actively participating in the community,” said Debra Echele, Chesterfield, Mo.-based First Community CU marketing representative. “The most important part is just being visible to lawmakers,” said Mickey Fuller, America CU president. “Credit unions need to continue to make our presence known and keep our issues in front of them.”
From left: Missouri State Sen. Wes Shoemyer (D-18) meets with Betty Clark and Donna Evans from United CU, Mexico, Mo., at a “Credit Unions in the Community” event Wednesday at the Missouri State Capitol.
Credit unions staffers share information with (right) Missouri State Sen. Kevin Engler (R-3) Wednesday at the Missouri State Capitol in Jefferson City. (Photos provided by the Missouri Credit Union Association)

Maine leagues data breach bill passes committee

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AUGUSTA, Maine (2/25/08)--The Maine Legislature's Insurance and Financial Services Committee voted 12-0 in favor of a Maine Credit Union League-initiated amendment calling for a study of the impact of data breaches on the state’s credit unions and banks. The amendment directs the Bureau of Financial Institutions to study the effect of data security breaches on Maine banks and credit unions in 2007, including their response and the actual costs and expenses incurred as a result of the breach. Before a committee work session, the league met with several legislators that wanted the measure to include the Attorney General's Office and the Office of Consumer Credit Protection. That would have added a fiscal note to the legislation and would likely have killed it, the league said. "We had an opportunity to personally meet with a legislator who was considering submitting an amendment to the resolve that, although well-intentioned, would have made it difficult if not impossible to pass,” explained League President John Murphy. “The ability to effectively state our case, and the positive relationships and reputation of Maine's credit unions with our legislators resulted in a positive meeting with the legislator who, ultimately, withdrew his amendment,” Murphy said. The committee decided to leave the amendment in its original form, with a few changes that would not alter the scope of the study. The committee unanimously recommended passage of the legislation when it is considered by the House and Senate. The amendment requires the Bureau of Financial Institutions to submit its findings to the Joint Standing Committee on Insurance and Financial Services by Dec. 1.

Minnesota grassroots principles take root at state Capitol

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ST. PAUL, Minn. (2/25/08)--Minnesota credit union professionals and volunteers converged on St. Paul Wednesday to meet with legislators as part of Minnesota’s annual Credit Union Day at the Capitol.
At Minnesota’s Annual Credit Union Day at the Capitol in St. Paul Wednesday, Senate Minority Leader David Senjem commended credit unions for the work they do. (Photo provided by the Minnesota Credit Union Network)
Nearly 200 credit union advocates statewide attended. The day was part of Minnesota’s initiative to strengthen it grassroots influence by building and cultivating positive relationships with legislators. Attendees heard from legislators and met with their elected officials to discuss credit union issues and values. Guest speakers included the Senate Minority Leader, the House Majority Leader, the chief House author of Minnesota’s Plastic Card Security Act, and the chair of the Senate Taxes Committee. State Rep. Jim Davie (DFL-Minneapolis), the chief author of Minnesota’s Plastic Card Security Act, reminded credit unions to build relationships with legislators and to keep in contact with their elected officials. House Majority Leader Toney Sertich (DFL-Chisholm) commended credit unions for their unique advertising methods, including billboards in St. Paul that he sees every day on his way to the Capitol. The billboards highlight the grassroots strength of the 1.5 million Minnesota credit union members, he said. “This year’s Credit Union Day at the Capitol focused on building and continually developing relationships with legislators,” said Mark D. Cummins, Minnesota Credit Union Network president/CEO. “The level of credit union support shown by our speakers, all of whom are in prominent positions at the Capitol, illustrates the benefit of having positive relationships with legislators. We are appreciative of all our supporters in the House and Senate.”

CU System briefs (02/22/2008)

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* MONTPELIER, Vt. (2/25/08)--The Association of Vermont Credit Unions (AVCU) set up a display promoting the state's credit unions and introducing the Credit Union National Association's "Little Guy" to lawmakers in the visible Statehouse Card Room (Newslines Express Feb. 22). Throughout the day dozens of state senators and representatives stopped by to chat with AVCU President Joe Bergeron, Vice President Bryan Kent, legal counsel/lobbyist Richard Brock, and lobbyist Adam Necrason. This is the fourth year AVCU has set up such a display (Photo provided by the Association of Vermont Credit Unions) … * SUITLAND, Md. (2/25/08)--Jose Ruberte, head teller at Andrews FCU's Wiesbaden, Germany, branch, puts the finishing touches on an "Extreme Home Makeover" style renovation the credit union sponsored for a room housing soldiers recovering in Wiesbaden's Warrior Transition Unit (WTU). The $810 million asset credit union's employees spent a day renovating and used $1,700 to buy bedding, picture frames, toiletries, rugs, desk supplies and snacks among other things for the room, which will serve injured soldiers needing at least six months' care. WTUs were launched after Walter Reed Army Medical Center in Washington, D.C., became the focus of complaints about treatment of soldiers. (Photo provided by Andrews FCU) … * HARRISBURG, Pa. (2/25/08)--George Lundy, former board chairman of Greater Pittsburgh Police FCU, died Feb. 16 after a short illness, according to the Pennsylvania Credit Union Association (Life is a Highway Feb. 22). Lundy, 75, was chairman for 20 years and served as a credit union volunteer for 31 years. He is responsible for helping the credit union become a full-service operation. A retired police officer, Lundy also was the brother of Sally Palombaro, board chair of City Co FCU in Pittsburgh. Funeral services were held Thursday …

Kansas Senate subcommittee hearing on FOM is today

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TOPEKA, Kan. (2/22/08)--A hearing before a Kansas Senate subcommittee on a banker-drafted bill that would limit field of membership for credit unions is scheduled for 10 a.m. (CST) today, says the Kansas Credit Union Association. The hearing is before the subcommittee of the Senate Financial Institutions and Insurance Committee. The banker bill, K.S.A. 17-2205, would limit credit union fields of membership to groups with a common bond of occupation or association or to groups residing within a well-defined neighborhood, community or rural district. KCUA supports House Bill 2676, which clarifies FOM language in the state credit union law and enables credit unions to define who their fields of membership should be. Late last month, credit unions swarmed the state Capitol to advocate consumer choice in conducting financial business.

Forbes terms Eakes as subprimes Mr. Clean

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NEW YORK (2/22/08)--A North Carolina credit union CEO who has made a career of advocating against payday lending is the subject of an article in Forbes.com (2/21/08). Martin Eakes, CEO of Self-Help CU, based in Durham, N.C., and the Washington, D.C.-based Center for Responsible Lending is "to mortgage lenders what Ralph Nader was to the auto industry," says the article, entitled "Subprime's Mr. Clean." The article notes his work in persuading North Carolina legislature to ban high-interest payday loans and mortgage prepayment penalties, and to restrict fees by mortgage-brokers. It recognizes his work in helping with similar laws in other states. It also discusses Eakes' efforts toward bills in Congress that would change the mortgage lending procedures by banning prepayment penalties, requiring lenders to demand proof of income documents, and giving bankruptcy judges the authority to rewrite mortgage terms on a primary residence. He is quoted as saying half the people he knows would "take a bullet for me" and half would "be happy to provide the bullet."

Man who abused IPO offerings of former CUs sentenced

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NEWARK, N.J. (2/22/08)--An Indiana real estate investor was sentenced to 20 months in prison and ordered to forfeit more than $2.8 million in profits from a scheme involving the stock offerings of banks that convert from mutual stock ownerships. Four former credit unions were among the banks whose depositors were defrauded. Mark Ristow, 65, of Indianapolis, Ind., was sentenced in a U.S. District Court in New Jersey. He had pleaded guilty in September to a charge to commit securities fraud (News Now Sept. 26, 2007). Two co-defendants--Andrew Crabb, 41, of Mechanicstown, Ohio, and Susan Gitlin, 49, of Norfolk, Va.--also were ordered to forfeit profits from the scheme. However, they received no jail sentences. Crabb, who is Ristow's cousin, will forfeit more than $98,000 in profits, plus interest and pay a penalty of $100,000. Gitlin, Ristow's sister-in-law, will forfeit nearly $165,000 in profits, plus interest, and pay a $75,000 penalty. According to the Securities and Exchange Commission, which filed the complaint, the former credit unions that were defrauded include:
* First Pactrust Bancorp. Inc. (formerly Pacific First FCU, which converted to a bank in 2002), Chula Vista, Calif.; * Synergy Financial Group Inc. (the former Synergy FCU, which converted in 2002), Crandon, N.J.; * Rainier Pacific Financial Group (Rainier Pacific FCU, which converted in 2003), Fife, Wash.; and * Citizens Community Bancorp Inc. (Citizens Community CU, which converted in 2001), Eau Claire, Wis.
The group deposited funds in the mutual savings banks, which Ristow, Crabb and Gitlin believed would then take the second conversion step from mutual savings organization to a full stock organization. According to SEC, the scheme circumvented limitations on stock purchases and evaded federal and state regulations designed to ensure that when a bank converts to stock ownership, each depositor has a fair chance to purchase stock before other interested investors can. It is illegal for depositors to transfer ownership of their purchase rights or enter into an agreement about the sale or transfer of shares that are bought in the offering.

No CUs affected by Nevada earthquake

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WELLS, Nev. (2/22/08)--A significant earthquake that struck Thursday morning in northeast Nevada did not cause any structural damage to area credit unions. The quake struck at 6:16 a.m., according to the U.S. Geological Survey and had a preliminary magnitude of 6.3 on the Reichter Scale (Associated Press Feb. 21). Five area credit unions--two in Elko, Nev., and three in Twin Falls, Idaho, near the Nevada border--contacted by News Now reported no structural damage and just minor effects from the quake. “Quite a few of us noticed it,” said Frances Schain, morning receptionist at the $61.5 million asset Elko (Nev.) FCU. “You could feel it shaking. Some people here had items falling off the shelves on their walls. But there was no structural damage.” At the $4.9 million asset Magic Valley FCU in Twin Falls, Idaho, no structural damage was sustained, but a few employees said they had items falling off their dressers at home during the early morning quake, said Cindy Lehrsch, assistant manager at the credit union. “We haven’t had any reports of any damage at all--it’s a sparsely populated area,” said LaRaye O’Brien, communications specialist for the Idaho Credit Union League. “But I noticed it. I was sitting in my chair, watching the news, and there was a tsunami in my fish tank.”

Greylock urges affordable insurance for elderly

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Joan Garivalitis of Pittsfield, Mass., signs a letter of support at GreyLock FCU to keep auto insurance rates low for senior citizens.
PITTSFIELD, Mass. (2/22/08)--GreyLock FCU is spearheading a signature campaign urging Massachusetts lawmakers to prevent senior citizens from being forced to pay insurance rates equal to or greater than everyone else, as the state embarks upon a new system of managed competition for auto insurance. By statute, Massachusetts seniors have been receiving a 25% discount on auto insurance. “Seniors living on fixed incomes in our state are already facing significant financial burdens due to the escalating costs of energy and health care,” said Angelo Stracuzzi, president of the $943.5 million asset, Pittsfield, Mass.-based credit union. “The 25% discount on auto insurance is one way that the state has provided seniors with some relief from ever-increasing costs.
Greylock FCU President Angelo Stracuzzi displays more than a thousand signatures urging Massachusetts state officials to keep managed auto insurance rates low for senior citizens. (Photos provided by Greylock FCU)
“We urge state officials to maintain the original intent of the senior discount and help seniors benefit from any additional discounts that other drivers will be experiencing as the new rates are set,” he continued. The rate structures proposed for April 2008 are expected to increase an average 7.8%, according to preliminary estimates from the State Division of Insurance. “We all have a duty to make sure that these reductions of rates for the general public are not subsidized on the backs of our senior citizens,” Stracuzzi said. Greylock has undertaken an initiative called Massachusetts Senior Citizen’s Insurance Watch and is gathering signatures that will be delivered to state officials. “We put the word out in all of our branches, and in a matter of weeks we have gathered more than 1,000 signatures,” Stracuzzi said. The signatures and letter of support will be delivered to Insurance Commissioner Bonnie Burnes and Attorney General Martha Coakley.

New York league testifies at state budget hearing

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LATHAM, N.Y. (2/22/08)--Amy Kramer, vice president of governmental affairs for the New York State Credit Union League (NYSCUL), presented testimony on behalf of the league and the New York credit union movement at a state public budget hearing Feb. 11.
Amy Kramer, New York State Credit Union League vice president, gives testimony on behalf of the league and New York credit unions at a recent state public budget hearing. (Photo provided by the New York State Credit Union League)
Kramer testified before the New York State Senate Finance and Assembly Ways and Means committees gathering information that would help facilitate legislative review of Gov. Eliot Spitzer’s 2008-2009 budget proposal. Credit unions are an important asset for New York’s consumers, Kramer testified. She requested actions on mortgage parity for state-chartered credit unions and funding for the new community development financial institutions (CDFI) fund--two key issues for credit unions and their members, the league said. “As for not-for-profit institutions, this tax to record mortgages is unfair, burdensome, and puts the New York State credit union charter at a disadvantage,” said Kramer. “The legislature has taken steps to make important legislative proposals to address the subprime mortgage crisis. Why then would the state make it more costly for credit unions to grant mortgages? “With savings from this tax, credit unions will grant more mortgages, create jobs, and expand financial services and investment in their communities,” she continued. Kramer asked that initial appropriations of $5 million for the new CDFI fund be part of the 2008-2009 budget. Also, she asked that the $1.5 million appropriation for the Empire State Development Corp.’s Women- and Minority-Owned Business Lending Program be continued. NYSCUL and the National Federation of Community Development Credit Unions partnered to advocate for passage and eventual formation of the fund in 2007.

NEW Beehive members approve conversion to thrift

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SALT LAKE CITY (2/21/08, UPDATED 6:50 a.m. MT)--Utah-based Beehive CU said 53% of its voting members approved the credit union’s proposal to convert to a mutual savings bank. According to the credit union, ballots were cast by about 36% of members who were eligible to vote on the proposal. Beehive has $187 million in assets and 22,000 members, according to the National Credit Union Administration (NCUA). Voting began in late January, with a special membership meeting held on Feb. 13. The credit union said at the meeting it would announce results this week. Beehive said once it submits the results of its vote to NCUA, the regulatory body has 30 days to make a final determination. The Office of Thrift Supervision and the Federal Deposit Insurance Corp. must also approve the change. The state-chartered credit union announced the conversion proposal last March. It applied for a bank charter with the Office of Thrift Supervision on Sept. 10, 2007 (News Now Oct. 5, 2007). The credit union says conversion would allow it to offer more branches, larger business loans and more competitive financial services. A state law passed in 1999 prevents the credit union from building another branch in Utah County. At a conversion meeting last year, the credit union's board told members the state's banks have attempted to limit credit unions' service and take away their tax-exempt status. Scott Jorgensen, CEO of the credit union, has told local newspapers there are no plans to take Beehive public after a conversion.

UN FCU first to sign up for CDIP

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LONG ISLAND CITY, N.Y. (2/22/08)--United Nations FCU (UNFCU) is the first credit union in the U.S. to participate in the Community Development Investment Program (CDIP) of the National Federation of Community Development Credit Unions, the federation said.
United Nations FCU (UNFCU) recently signed on to the National Federation of Community Development Credit Unions’ Community Development Investment Program. From left are: front row, Clifford Rosenthal, federation president/CEO; Michael J. Connery Jr., UNFCU president/CEO; Alice Greenwald, program director; and Pablo DeFilippi, federation associate director of membership development. In the back row, from left are UNFCU employees Christopher Sullivan, chief investment officer ; John Lewis, senior vice president of corporate affairs and general counsel; and William Predmore, executive vice president. (Photo provided by the National Federation of Community Development Credit Unions)
“Too few New Yorkers see a credit union in their daily lives,” said Clifford Rosenthal, federation president/CEO. “UNFCU is a visible symbol for the credit union movement in this city.” The $2.5 billion asset UNFCU is participating in the program to help community development credit unions (CDCUs) upgrade their operations and expand their services. “UNFCU wishes to support the federation in achieving its stated mission and to provide general support to the credit union community,” said UNFCU President/CEO Michael J. Connery Jr. The CDIP celebrated its 25th anniversary by launching a $25 million capital campaign to bring its investment portfolio in CDCUs. The program was launched last July and has raised $10 million. The federation has investments in 121 CDCUs and hopes UNFCU’s investment will encourage others to participate, said Alice Greenwald, program director.

Alabama league introduces data security legislation

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BIRMINGHAM, Ala. (2/22/08)--The Alabama Credit Union League (ACUL) has introduced a bill in the state legislature aimed at protecting consumers’ financial data. The legislation, introduced by State Rep. Tammy Irons (D) and State Sen. Parker Griffith (D), contains three provisions:
* Entities that experience a data breach would be required to notify consumers; * Sensitive consumer financial data, such as the content of a magnetic stripe on a plastic card, personal identification number or card validation code, cannot be retained; and * Any entity that experiences a breach and holds prohibited data must reimburse the issuing financial institution for the cost of reissuing cards or taking steps to protect accounts.
“The bill protects consumers and ensures a fair environment for everyone, because when someone other than the consumer’s financial institution stores all the keys to a person’s account, it creates problems,” said ACUL President/CEO Gary Wolter. “It is not a question of if there will be a serious breach, only when and how bad it will be.” “Credit unions go to great lengths to ensure the security of their members’ data and account information, but other parties also must take responsibility,” he added.

Texas check-verification law takes effect March 1

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FARMERS BRANCH, Texas (2/22/08)--Starting March 1, Texas credit unions will be required to comply with a new law and rules requiring financial institutions to provide notice of identity theft and fraud to check verification companies, said the Texas Credit Union League. To comply, credit unions must submit information regarding fraud on accounts to the State Department of Banking (LoneStar Leaguer Feb. 21). The law, H.B. 2002, authored by State Rep. Helen Giddings (D-Dallas), stipulates that check verification entities will be notified when fraud occurs. The information will then be used to recommend that businesses reject checks written on the accounts to protect the account owner, or ID theft victim from being accused of writing a bad check.

Former NCUA Board member Robert Swan dies

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SALT LAKE CITY (2/22/08)--Robert Swan, a former board member of the National Credit Union Administration (NCUA) and lobbyist for Utah credit unions, died Tuesday of a stroke he suffered several days earlier. Swan was appointed to the NCUA Board by former President George H. W. Bush and served from 1990 to 1996. Prior to his position on the board, Swan managed Tooele (Utah) FCU from 1983 to 1990 (Salt Lake Tribune Feb. 21) Swan also served as the Mayor of Tooele City in 1969 and was a member of the Tooele City Council. He was employed as a lobbyist for Utah credit unions and Tooele County, and served as president of Swan Resources and Consulting Services when he died, the newspaper stated.

CU System briefs (02/21/2008)

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* BOSSIER CITY, La. (2/21/08)--CLARIFICATION: In an article Thursday about the appointment of Rod Taylor as president/CEO of Barksdale FCU, News Now incorrectly reported the number of years he has served the credit union. Taylor has been with Barksdale FCU since 1992. He began service in the financial industry in 1983 and began his credit union career in 1986 … * CINCINNATI, Ohio (2/22/08)--U.S. Rep. Steve Chabot (R-Ohio) speaks to Cincinnati children about the importance of saving money during the Cincinnati launch of the Ohio Credit Union League's financial education initiative, MoneyAndStuff, Tuesday. Bill Herring, CEO of Cincinnati Central CU, helped conduct the press conference held at Oyler School. Also attending was Assistant Principal Lin Yates and several credit union leaders from Southwest Ohio (Photo provided by the Ohio Credit Union League) … * HAMILTON, Ohio (2/22/08)--Students at Hamilton (Ohio) Freshman School look on as the Ohio Credit Union League introduces MoneyAndStuff and the financial education program's website, www.MoneyAndStuff. Attending the press conference was Tim Boellner, CEO of AurGroup Financial CU and Hamilton City Schools Associate Superintendent Barb Fuerbacher, plus other credit union leaders from the area. (Photo provided by the Ohio Credit Union League) … * RICHARDSON, Texas (2/22/08)--Every day more than 100 soldiers arrive at the Dallas-Fort Worth (DFW) International Airport on their way home for a break. Texans CU employees recently joined supporters at the terminal to cheer and welcome the soldiers. From left are employees Marion Rogers, Christina Gutierrez, Jessica Allen, Estella Demings and Erin Ortiz. Texans CU also supports the USO's United Through Reading program to help deployed service men and women stay connected to their children by reading a book aloud for a DVD. The at-home parent or caregiver is encouraged to videotape or photograph the response of the child watching the DVD and following along with the book and send it to the reader. (Photo provided by Texans CU) …

Mica to AP People need rainy day funds

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WASHINGTON (2/21/08)--People need to save more of their income to create a rainy day fund or backup, Dan Mica, president/CEO of the Credit Union National Association, told the Associated Press yesterday. Forbes published the item Wednesday. The article focuses on “America Saves” week, a national campaign starting next week that aims to help people save more--with this year’s focus on saving automatically. Numerous reports of people missing credit card payments and falling behind on mortgages should drive home the point that more savings is needed, Mica said in the article. Having money automatically transferred into savings means “you never miss it,” Mica said. Once that account is started, consumers can consider increasing their level of savings every time they receive a raise. “And anytime you get some extra money, like a tax refund or a tax rebate, a certain amount should go into savings, too,” Mica said. More than 1,000 government agencies, corporations and nonprofit groups have combined efforts in the America Saves program with a goal of increasing consumers’ understanding the need to save for emergencies, for a down payment on a home, to educate children or to finance retirement.

Data-breached TJX Cos. reports profits up 47

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FRAMINGHAM, Mass. (2/21/08)--TJX Cos., the Massachusetts discount retailer whose data breach last year became a wakeup call for the nation on identity theft, reported a 47% increase in its fourth-quarter profit over the same period a year ago. The company attributed the boost to improvements in inventory, cost controls and marketing (Associated Press via The New York Times Feb. 20). It also announced it cut the funds set aside for legal reserves by $19 million because of lower-than-expected costs related to the breach. The reduction means TJX's pretax charges from the breach totaled $197 million for the year. The breach compromised more than 100 million credit and debit cards, according to court documents. It stuck credit unions and other financial institutions and card issuers with the costs of replacing cards, monitoring fraud and taking fraud-prevention measures. It also prompted lawsuits and legislative measures related to data breach reimbursement and protecting consumers' information. TJX recently settled some lawsuits brought by banks, and a tentative settlement with consumers is pending a judge's approval. Other litigation and investigations are pending, said the Times. TJX's profits for the fourth quarter ending Jan. 26 rose to $301.1 million, or 66 cents per share, compared with $205.4 million or 43 cents per share during same period a year ago. The company's adjusted results are slightly more than Wall Street estimates, but the company forecast that its first-quarter 2008 profit will be slightly below expectations. TJX's full fiscal year profit was up almost 5% to $771.8 million from the $738 million in 2006. The company, based in Framingham, Mass., owns 2,563 stores, including T.J. Maxx and Marshalls.

CU System briefs (02/20/2008)

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* MAUMEE, Ohio (2/21/08)--Sun FCU launched its first Youth Advisory Board earlier this month. The group, ages 14 to 20, joined Melissa Gregg, senior marketing communications specialist, and Maggie Engel, executive assistant, for dinner, an overview of the board's purpose, a review of Sun Federal's products and brainstorming. The board will meet every other month in 2008 and will communicate electronically in between. From left are: front row, Laura Thomaswick, Toledo; Nicole Maher, Perrysburg; and Elizabeth Eddy, Toledo; and back row, Andrew Mizer, Toledo; Zach Hanley, Maumee; and Rex Powers III, Toledo. Not pictured are Mattie Hanley, Maumee, and Jonathan Hall, Oregon (Photo provided by Sun FCU) … * PEWAUKEE, Wis. (2/21/08)--The Wisconsin Credit Union League announced two new hires and five promotions. Michelle Haslam has been hired as compliance specialist. She was previously vice president, compliance officer at West Bend Savings Bank. Melissa Wittig is the new member communications specialist. She previously was editorial assistant at the Milwaukee Journal Sentinel for more than six years. Promotions included: Joanne Whiting, to executive vice president/chief advocacy officer; Mary Bliss to executive vice president/chief operating officer; Tom Liebe to vice president of government affairs; Jill Weber to director of member solutions; and Chad Helminak to public relations specialist. * BOSSIER CITY, La. (2/21/08)--Rod Taylor has been chosen as
president/CEO of Barksdale FCU, succeeding Arno Easterly, who will retire after serving as CEO for nearly 24 years. Taylor has been executive vice president and chief operations officer at the nearly $700 million asset credit union for the past 16 years, since 1992. He began his credit union career in 1986 with a position at OSU FCU. and has served in the financial industry since 1983. Easterly has been in the credit union business for 48 years. Prior to becoming CEO at Barksdale FCU, he was president/CEO of the Campus FCU at Louisiana State University. Easterly is past chairman and an original incorporator of Credit Union Cooperative branching, is a director and past chairman of the Southwest Corporate FCU, and served on the Credit Union National Association's Subcommittee on Supervision and Examination. He has won numerous awards, including the Louisiana Credit Union League's Distinguished Service, Political Action and Executive of the Year recognition … * CHAMPAIGN, Ill. (2/21/08)--E.J. Donaghey has been named president of the University of Illinois Employees CU, based it Champaign, effective Feb. 11, the credit union announced Tuesday. He has been executive vice president and chief operating officer of Hawthorne CU, Naperville, for the past five years. Donaghey previously served as vice president of strategic planning and business development for Baxter CU, Vernon Hills. Longtime president Charles Rutan resigned last summer. Greg Anderson served as interim president (The News-Gazette.com Feb. 20) …

Texas leagues political poll gets national attention

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FARMERS BRANCH, Texas (2/21/08)--The Texas Credit Union League (TCUL) Poll of Texas Primary Voters has garnered major press attention nationwide since its release last week. The strategy of conducting a Republican and Democratic primary voter poll and releasing it Feb. 14 “was a smash success” wrote Buddy Gill, TCUL chief advocacy officer, in a league publication, The Advocate (Feb. 19). The poll was mentioned on NBC’s “Meet the Press,” MSNBC’s “Countdown” with Keith Olbermann, CNN’s “HardBall” with Chris Matthews, and CNN’s “Real Politics,” Gill told News Now. The poll also received extensive press coverage in Texas, ranging from TV and radio to newspapers and blogs, Gill said. TCUL commissions primary and general election voter surveys every two years on politics and key issues for credit unions(News Now Feb. 18). For poll results, use the link.

Paper outlines things to consider in offering gift cards

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DES MOINES, Iowa (2/21/08)--Credit unions shouldn’t wait another year to offer gift cards, even though the busiest holiday season has just passed, says a new white paper. The white paper, released Tuesday by The Members Group (TMG), covers a number of topics that include how to evaluate a gift card program, as well as how to market a program in other buying seasons. TMG is a card solutions provider for credit unions. All gift cards are not the same, the paper asserts, and credit unions should keep in mind a few factors when evaluating gift card programs:
* Reseller vs. Issuer. A reseller program is typically a generic solution that offers a limited selection of plastics, as well as opportunity for revenue. An issuer program involves more resources, but there is more opportunity for reward; * Interchange Income. How much is coming back to the credit union? Again the difference may be in choosing between a reseller and an issuer model; * Branding. When and how will the logo and credit union name be visible on the card? Many programs offer generic cards that may or may not permit a credit union to put its logo on the card; * Marketing support. Because a credit union’s resources are at a premium, look at what type of support the vendor offers; and * How does the overall program grow in the future?--Does the gift card partner provide both a reseller and issuer model? Does the vendor offer other types of products a credit union might choose to offer to its members?
“We continue to be surprised by the number of credit unions waiting for the right time to get into the gift card market,” said Joe Falk, TMG director of product development. “The right time really is now, even though sales will be significantly less than the holiday season that stretches from late November through the first of the year. “Credit unions need to establish their footing in the market as a place to get a great gift card product,” he continued. TMG understands that with limited resources available to launch new products, credit unions may be reluctant to enter the market before a product is established, Falk said. “With competition coming not only from banks, but also retailers, it is important for credit unions to stake out their market now,” he added.

No member data compromised in waterpower breach says CU

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LOS ANGELES (2/21/08)--No member data at the Los Angeles Department of Water and Power Community CU has been compromised as a result of a stolen computer from a city department, according to the credit union. “Our members are safe,” Linda Heidtke, director of marketing at Water and Power Community CU, told News Now. A computer from the Los Angeles Department of Water and Power (DWP) was stolen from an outside vendor, Systematic Automation, last week. The computer contained personal information on the department’s roughly 8,700 employees. “Initially a lot of people were worried,” Heidtke said. The department sent out a notice to its employees stating what had happened, causing some to panic, she added. The credit union beefed up its security, including extra staffing at branches on Saturday in case a large number of members arrived with questions. Water and Power Community CU also offered additional password protection for members’ accounts and offered members identify theft protection services. Unrelated to the computer theft, Water and Power also recently changed its online banking website. Instead of account numbers, members are required to use log-ins of their choosing. The credit union was prepared to handle a potential breach, Heidtke said. She advised members to take advantage of fraud protection. “Be aware,” she advised. “Everyone needs to be on high alert.”

Study Market volatility to change consumer lending

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NEEDHAM, Mass. (2/21/08)--Credit unions and other consumer lenders must remain on alert to the full ramifications of the subprime mortgage meltdown, which are yet to be felt, says a new study. "Market volatility will remain a fact of life among U.S. consumer lenders in 2008," said the Needham, Mass.-based TowerGroup, which identified top business drivers and trends for consumer lending for 2008. The subprime fallout has lowered financial performance expectations for many lenders but also offers opportunities for those that adapt and plan ahead, said the study. Because the loan market is volatile, consumer lenders are in "a defensive mode," with revenue and profitability expected to decline across most consumer lending business lines, said Bobbie Britting, senior analyst, TowerGroup's Consumer Lending practice. The consumer lending industry must "refocus and begin taking steps toward a broad reformation of credit," said Britting. Institutions must focus their organizational, operational, financial and technology operations on addressing gaps that contributed to the crisis and prevent new ones, said TowerGroup. Paying attention to key business drivers and reforming outdated strategies will be critical to providing the types of products consumers want and can understand. TowerGroup noted these business drivers for consumer lending in 2008:
* Topline metrics (lending volume, revenue, profits, home sales, home prices, auto sales and college costs) will worsen this year; * Lenders will face increasing regulatory burdens and will need the right information technology systems to adjust rapidly. Technology, especially core lending systems, will have a major role in enabling consumer lenders to remain viable. * Institutions will need a broad credit reformation encompassing product, service and channel innovation; improved risk assessment and loss mitigation; and increased focus on the member/customer. * Fundamental business actions by lenders will include: integrated systems to understand better households, with a holistic view of their relationship with the financial institution; better use of data to develop successful products; and automation to engage in these activities consistently, compliantly and cost effectively. * Innovation, integration, transformation, automation and optimization are no longer buzz words, but represent key initiatives supporting credit reformation. * A potential wildcard: any new crises in other types of highly leveraged credit instruments that would exacerbate consumer credit market volatility globally and again reshuffle lenders' strategic responses.
"A credit reformation is needed across all areas of consumer lending, including mortgage lending, loan securitization and loan servicing," said David Hamermesh, senior analyst, TowerGroup's Consumer Lending practice, and co-author of the report.

Registration opens for CU Development Education

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MADISON, Wis. (2/21/08)--Registration is open through March 17 for the first 2008’s two Credit Union Development Education (DE) classes--to be held April 3-9 at the University of Wisconsin-Madison. “DE training is open to everyone from new employees and volunteers who need a credit union orientation, to seasoned executives who need to recharge,” said Tom Decker, program director. “The interactive six-day class focuses on cooperative principles, social impact, and credit union uniqueness as a competitive advantage.” Graduates have cited many personal benefits, such as:
* Trainees acquiring skills in public presentations, credit union outreach initiatives, problem solving and technical assistance; * Graduates earning certification as Credit Union Development Educators (CUDEs), a networking group of 434 active volunteers nationwide and in 10 other countries; and * Graduates returning to their jobs with a new understanding that local issues may be global, and that credit unions can improve the lives of people everywhere by working cooperatively.
“The DE program is worthwhile to become involved in, regardless of how long you’ve been in the credit union movement,” said Mary Cunningham, president/CEO of USA FCU, San Diego, and a graduate of the DE Class of 1997. “Even after many years of loving credit unions, I was forced to step outside of my comfort zone and explore a whole new world of cooperatives. Through doing so, I’m re-committed to be sure I never compromise the credit union ideals in my organization.” Credit union and cooperative leaders with questions about Development Education can call Decker at 800-356-9655, ext. 4374, or e-mail tdecker@ncuf.coop or kroosmalen@ncuf.coop. The National Credit Union Foundation is the primary sponsor of the DE program. Support is provided by the World Council of Credit Unions, the Credit Union National Association, CUNA Mutual Group, and state credit union leagues and foundations.

Washington league task force seeks history

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FEDERAL WAY, Wash. (2/21/08)--The Washington Credit Union League (WCUL) Historic Preservation Task Force is seeking interviews and artifacts to display in the league’s gallery to celebrate WCUL’s 75th anniversary. “Preserving Washington State’s credit union heritage is a unique and very important project,” said WCUL President/CEO John Annaloro. Items such as photographs, newspaper clips and marketing materials will be displayed in the league’s gallery and will be accessible on a dedicated website. “Probably the most difficult aspect of this project will be convincing people to come forward with their stories,” said WCUL President Emeritus Bruce Rouillard, who chairs the task force. “As we commence work on these interviews, we anticipate that if will be as it we are reconnecting with old friends.” For more information, contact Allison Mattich at amattich@waleague.org or 800-552-0680. All items will be duplicated and returned to the contributor.

No buzz yet on Beehive conversion vote

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SALT LAKE CITY, Utah (2/20/08)--The membership vote results related to the proposal by Utah-based Beehive CU to convert to a mutual savings bank have not been announced yet. Voting began in late January, with a special membership meeting held on Feb. 13. The credit union said at the meeting it would announce results this week. The state-chartered credit union announced the conversion proposal last March. It applied for a bank charter with the Office of Thrift Supervision on Sept. 10, 2007 (News Now Oct. 5, 2007). The credit union says conversion would allow it to offer more branches, larger business loans and more competitive financial services. A state law passed in 1999 prevents the credit union from building another branch in Utah County. At a conversion meeting last year, the credit union's board told members the state's banks have attempted to limit credit unions' service and take away their tax-exempt status. Scott Jorgensen, CEO of the credit union, has told local newspapers there are no plans to take Beehive public after a conversion.

Breach at L.A. waterpower department affects 8300

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LOS ANGELES (2/20/08)--About 8,300 Los Angeles Department of Water and Power (DWP) employees could be susceptible to identity theft after a computer containing their personal information was stolen from an outside vendor last week in Fullerton. H. David Nahai, DWP general manager, sent a letter about the theft and potential data breach to employees last week. The theft took place at Systematic Automation--the vendor that DWP had contracted with to print retirement booklets for employees (Los Angeles Daily News Feb. 16). The stolen data included names, Social Security numbers, birth dates, identification numbers, salaries, work locations, health benefits and insurance plan coverage, the newspaper said. Because the data is encrypted, the thieves may not be able to get at it, Nahai added. The department is taking steps to protect the employees’ data, including subscribing to a credit monitoring service. It also notified Water and Power Community Credit Union, which serves DWP employees, the newspaper said.

Kansas blog Banks suppress consumers choice

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TOPEKA, Kan. (2/20/08)--A blog by a credit union member in Sunday's online Topeka Capital Journal suggests that banks are trying to limit consumers' choices by pressing for a Kansas state law that limits the field of membership of credit unions. Glenda Overstreet, a volunteer in the community, wrote that she went to her credit union to conduct a transaction and was asked if she'd be willing to sign a petition against a bill banks are sponsoring in the state legislature: Kansas S.A 17-2205. The bill would limit credit union organizations to groups having a common bond of occupation or association or to groups in a well-defined neighborhood, community or rural district. She equated the choice as one of whether "to support Kansas credit union members and owners in preserving the right to select the financial institution of one's choice and to not support the banking industry's legislative efforts to eliminate consumer choice. "I signed immediately and asked for a few more forms to get to friends and relatives so they could sign as well," Overstreet wrote. Although she's not against banks, she said, "I'm against any effort that would restrict the freedom of choice because I believe competition keeps companies focused on ensuring quality customer service." Overstreet urged readers to support the Kansas Credit Union Association-backed House Bill 2676, in which credit unions define who they are able to serve. HB 2676 indicates that membership of a credit union may include any combination of one or more groups of both large and small membership having common bonds of occupations, associations or geographic areas. Geographic areas in the bill mean "all or portions of one or more counties." Many people believe "many banks, with the exception of a few, don't meet the needs of the community when it comes to providing financial alternatives for small-business loans, emergency personal loans or financial matters that help meet low-income or working-poor challenges," Overstreet said. Use the resource link to access the full article.

Houston FCU buys three CU service centers

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SUGAR LAND, Texas (2/20/08)--Houston FCU announced Monday that it has purchased three Texas Credit Union Service Centers in the greater Houston area, which were previously owned by Credit Union Resources Inc. The closing date was Feb.18. Integration plans are underway and are scheduled to be completed soon. “The operation of these facilities will continue as they are today--serving members from all credit unions affiliated with the Credit Union Service Center network,” said Chris Choat, Houston FCU president. The $300 million asset, Houston-based credit union has 12 combined locations.

Former Miss Americas affordable loan is from a CU

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NEW YORK (2/20/08)--Former Miss America Kate Shindle now owns a home in East Harlem thanks to her credit union, Actors FCU in New York. Actors FCU serves members working in the theater industry. Shindle, who earned the title of Miss America in 1998, makes her living acting on Broadway. She joined the credit union in 2006 to get a loan for a 2003 Thunderbird (New York Daily News Feb. 18). Shindle had used Citibank in the past to get mortgages, but after conducting online research, realized that her credit union offered the lowest rates. When she decided to buy a two-bedroom apartment in East Harlem for $465,000, she asked Actors for a loan, the newspaper said. Like many of the credit union’s borrowers, Shindle got an adjustable-rate mortgage with a fixed rate for the first five years. She put down $200,000 for a down payment after selling her previous apartment, and also paid off the balance of her car loan--about $12,000, said the Daily News. Though the city of New York required Shindle to show several documents to verify her income, the credit union’s approval was much simpler. The credit union was “laid back” and understood artists’ incomes, she told the newspaper. Actors FCU has $90 million in assets.

Phishing continues to be problem in Quad Cities

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NAPERVILLE, Ill. (2/20/08)--Internet scammers, or phishers, are getting more sophisticated in their fraud attempts as evidenced by activity in the Quad Cities region, according to an area credit union and the Illinois Credit Union League. In the past few weeks, members of the $590 million asset, Moline, Ill.-based IH Mississippi Valley in the Quad City region--Davenport, Iowa; Bettendorf, Iowa; Moline/East Moline, Ill., and Rock Island, Ill.--have been targeted by scams originating in Korea (Quad Cities Times Feb. 18). Credit union members and staff were quick to alert each other in each instance of a scam, said Laura Ernzen, IH Mississippi vice president of marketing. One scam told members that the credit union had suspended their accounts, while another attempted to acquire members’ debit card numbers by asking for confidential information in return for an offer of $50 to $80 to take an online survey, Ernzen said. Generally, there is a five-to-10-day period when a specific financial institution might be targeted, with scammers flooding the area financial institutions, she said. If one fake website gets shut down, the scammer might resort to a phone version of the same scam, Ernzen added. Illinois has 455 credit unions serving more than 2.7 million members, said William Willie, public relations coordinator for the Illinois Credit Union League. The scams are getting more sophisticated and more frequent, he added. Member credit unions can help identify the guilty parties when they become the target of an Internet scam. The Illinois league’s information technology department usually can determine where the bogus e-mail is being hosted, Willie said. However, by the time the league finds the scammers, they usually have moved to another host site to continue sending out additional e-mails, he added.

ITodayI host buys earrings from BizKid participant

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WASHINGTON (2/20/08)--Today Show co-host Meredith Vieria purchased a pair of earrings from BizKid$ participant Christian Wright, a guest on her morning television show Monday. Wright, from Seattle described how his successful jewelry design and marketing business helped him purchase a motor bike. The BizKid$ TV show was introduced, and a short clip was shown to viewers (Life is a Highway Feb. 19). On the show, Wright advised parents to use “tough love” and not to bail out their kids when financial difficulties arise, since risk is an important element of any business. Wright also advised kids to conduct their businesses online, since it is the best venue to identify and serve the largest number of potential customers. Customers’ needs also can be fulfilled most efficiently online, he added. BizKid$, a TV series underwritten by America’s Credit Unions to teach children about money, is scheduled to air on more than 290 PBS stations in 47 states (News Now Feb. 18). The show is produced in association with Junior Achievement Worldwide and WXXI Public Broadcasting. Funding is led by the National Credit Union Foundation and the Washington Credit Union Foundation.

CU helps actors--even former ones--with loans

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NEW YORK (2/20/08)--Actors FCU in New York is determined to make its members homeowners--even though most of them have sporadic incomes and do not make more than $100,000 a year. The $90-million-asset Actors FCU caters to theater industry employees, who often have a hard time getting loans from banks because of their changing incomes. But the credit union understands--its mortgage underwriter, Paul Cole, used to work as an actor (New York Daily News Feb. 18). “Law and Order” star Jerry Orbach was the credit union’s first mortgage borrower. Orbach, who died in 2004, got a loan for a West Side home in 1967, when he was acting in “The Fantasticks” on Broadway. Some of the credit union’s borrowers include Donna McKechnie, who played Cassie in “A Chorus Line,” and Anika Noni Rose, who appeared in “Dreamgirls” and is now starring as Maggie the Cat in Broadway’s “Cat on a Hot Tin Roof.” When approached by a potential borrower whose only source of income is a play, Cole reads reviews and checks ticket sales to see if the show has potential for a long run. He also examines two years’ worth of account statements and the borrower’s housing costs. When analyzing credit reports, Cole focuses on behavior patterns instead of scores, he told the newspaper. If a borrower is turned down because of high debts or other issues, Cole tells the borrower to come back when the financial issues are straightened out--which takes about a year. Actors FCU officials do not approve a mortgage unless a borrower can handle it, because the credit union must protect its assets, the Daily News said. Many of the credit union’s members are laid off when their shows end. Members do not always have steady employment, but they always find ways to make ends meet--such as temping or working odd jobs, Cole told the newspaper.

Eight accused in scam against CU in Florida

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TAMPA, Fla. (2/20/08)--Eight Florida people are accused of running a scam that bilked reportedly more than $90,000 out of Suncoast Schools FCU. Three have been arrested and one turned herself in to authorities. The arrest followed a lengthy investigation into a complicated fraud scheme that targeted the $5.8 billion asset, Tampa-based credit union and several of its branches ( News-press.com Feb. 19). The scam involved a member opening a legitimate account at the credit union. Then a partner would deposit a fraudulent or stolen check into the account and immediately withdraw money from that account with the accountholder’s debit card. The two would split the proceeds. When the credit union discovered the check was stolen or fake, the accountholder would claim the debit card was lost or stolen. “We are actively working with law enforcement on this case, and we have a no-fraud tolerance policy,” Melva McKay-Bass, Suncoast senior vice president of member service operations, told News Now. “We are taking this case extremely seriously and have a great relationship with local law enforcement. We have a highly trained staff diligently working to close this case. We have been working on this case for almost two years.” Because of the ongoing investigation, she could not verify the amount stolen from the credit union, McKay-Bass said. Kimberley Denise Neal, 22, surrendered to authorities Monday night, said the Florida Department of Law Enforcement. She is charged with one count of scheming to defraud more than $50,000, a first degree felony, and one count of conspiracy to commit a scheme to defraud more than $50,000, a second degree felony. State investigators arrested three others Friday, and are looking for four more suspects. Arrested were: Klesha Day, 19, Cape Coral; Tequila Marie Ferguson, 19, Fort Meyers; and Farrah Shaneka Sturgis, 26, Jacksonville. Each was charged with scheming to defraud more than $50,000 from the credit union--a first degree felony with a maximum 30-year sentence. Warrants are still out for the four other suspects: Sonya Lavette Wilbon, 30, and Yolanda Kendrick, 30, both of Lee County; Joseph Lamar Temple, 18, Lakeland; and Bobby Gandy 31, who is serving a term in a Florida prison on an unrelated charge.

Wisconsin CUs boost reserves weather slowing economy

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MILWAUKEE (2/20/08)--Despite an economic slowdown, Wisconsin credit unions stayed healthy the past year by boosting their assets, according to a Wisconsin Office of Credit Unions financial report. Assets grew $887 million, or 5%. Net worth increased by $102 million, an increase of 5.92%, and total net worth was $1.9 billion. Earnings increased to $113 million, from $107 million the previous year. Credit unions prudently increased their reserves by 20%, which would offset any potential loan losses due to the economy, Suzanne T. Cowan, Office of Credit Unions director, told the Milwaukee Journal-Sentinel (Feb. 19). Loans increased to $13.3 billion, an increase of 4.8% from 2006. Savings grew slightly more rapidly than loans during 2007, so the loans-to-savings ratio declined to 95.9% compared with 96.6% in 2006. Delinquent loans were at 1.27% compared with 1.09% in 2006. Loan losses were at $52.1 million, up from $43.3 million the year before. Provisions for loan loss expense increased to 0.31% from 0.28%. Wisconsin’s credit unions are healthy and continue to perform well based on the information reported at year-end 2007, Cowan concluded in the report.

NYC resolution favors municipal deposits for CUs

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LATHAM, N.Y. (2/20/08)--A resolution introduced before the New York City Council calls for the state legislature to pass a measure allowing credit unions and other savings financial institutions to accept municipal deposits. Under current state law, only commercial banks can accept and secure deposits from municipal corporations, said the New York State Credit Union League. Queens Council member and Council Finance Committee Chair David Weprin (D) introduced the resolution and spoke in its support, emphasizing the need for elected officials statewide to seek depository choice. "There is no reason why a credit union shouldn't be a part of the competition for municipal deposits," he said. "If commercial banks can thrive as they have for years, why shouldn't a credit union reap the same benefits of this competition?" The resolution is similar to ones approved by the Albany, Syracuse and Ithaca Common Councils. "By retaining local money in our respective communities through municipal deposits, credit unions will be adding funds to the lending pool," said Alan Kaufman, CEO of Melrose CU, Briarwood. "In so doing, credit unions will be helping to reduce the cost of funds, making it possible to offer lower loan rates while creating more affordable loan products for our communities," he added. The resolution will be discussed soon at a public hearing of the City Council Finance Committee. Four municipal deposits bills have been launched in the state Assembly and three in the state Senate. The league said it would continue to work behind the scenes to introduce similar resolutions in other cities across the state as part of its strategy of securing visible support for municipal deposits from local elected officials and encouraging passage of the municipal deposit amendments to current banking law.

CU System brief (02/19/2008)

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* EAST ST. LOUIS, Ill. (2/20/08)--Three men have pleaded guilty and are awaiting sentencing for their roles in a July 26, 2007, robbery of an armored car outside the Alton, Ill., branch of Olin Community CU. Jermaine McIntyre pleaded guilty Friday to two felonies in the robbery. Earlier, co-defendants Herbert Williams and William Giles III entered guilty pleas to the same charges. A fourth defendant, Lamorris Wilford, will be in court Friday. Police said McIntyre, an employee of Garda Security Service, gave his accomplices information and uniforms to use in the robbery, which netted $195,000. The actual guards were armed but no shots were fired (Associated Press Newswires and The (Alton) Telegraph Feb. 19) …

Trial D. Edward Wells insiders had negative balance

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SPRINGFIELD, Mass. (2/19/08)--A U.S. District Court in Massachusetts began hearing testimony last week in the embezzlement trial of community development credit union advocate Carol Aranjo and her husband, Alphonso Smith. They are charged with conspiracy, embezzlement and tax charges related to shortfalls and missing loan files discovered at the now defunct D. Edwards Wells CU, which was based in Springfield, Mass. Aranjo was CEO of the credit union before it was shut down by regulators in 2003. At issue in the trial is a confusing morass of loans and grants coming in and out of the credit union and its partner organizations, Friends of the Credit Union and the FOCUS loan fund (The Republican Feb. 14. On Thursday, the jury heard testimony from former board members indicating that Aranjo had a $150,000 negative balance in her own accounts and a $30,000 shortfall in her husband's account in 2000, the same year the credit union suffered a $225,000 operating loss. A $2 million insurance settlement with inner city communities provided a windfall, which prosecutors say Aranjo manipulated to cover overspending at the agency. Losses totaled about $1.3 million, they said (The Republican Feb. 15). In questioning Thursday, former supervisory committee member William H. Zachery Jr., an auditor with the Internal Revenue Service, testified he made a list of missing files during an audit in 2000. Among those missing were Aranjo's mortgage and loans under her two sons' names. Other insider loans were incomplete and lacked loan applications and other key paperwork, he said. Between 2000 and 2003, Aranjo and federal regulators fought over the audit findings. Aranjo prohibited the National Credit Union Administration's examiners from access to the credit union's records and unsuccessfully tried to bar them with a restraining order in 2002, according to prosecutors. The trial is expected to continue until early March before Judge Michael A. Ponsor. If convicted, Aranjo faces up to 14 years in prison.

Members respond to suspension of conversion election

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ODESSA, Texas (2/19/08)--Members of First Basin CU have responded to the credit union’s decision to suspend the Feb. 21 membership vote to convert to a mutual savings bank. The board “cannot simply shut down the election if they aren’t getting the result they want,” wrote First Basin member Armando Rodriguez in a letter to the editor. The board must release the results of the election and information on how much of the credit union’s money has been spent on the proposal, he said. The $113 million-asset First Basin, based in Odessa, Texas, also estimated that it has already spent more than $500,000 on the proposal, Rodriguez added. In another letter to the editor, member Letty Moreno questioned First Basin’s offer to provide members with a cash payout if they agree to the conversion. “If First Basin has enough money to pay members a special dividend, why don’t they do it right now?” Moreno wrote. “After all, the money already belongs to us, the member-owners of the credit union.” First Basin sent a letter to members last week about the suspension, stating that the board is considering two changes to the proposed conversion. First, the board will evaluate whether it could reward members with a cash payment upon conversion. Second, the board will consider whether to retain its one-member, one-vote structure. The conversion would not result in any members losing money or any account closures, said the credit union. It added that “numerous other false statements” are being circulated, such as the credit union offering “worse rates and fees” if the conversion is approved. Members of First Basin who oppose the conversion have formed SAVE First Basin and developed a website containing articles and other information about the conversion. Some members oppose the conversion because they would have worse rates and fees, lose $11 million of member-ownership without fair compensation, and control of the democratically run credit union, according to the website. “The members have already spoken--and we want to keep our credit union,” Moreno wrote. SAVE First Basin was scheduled to hold a rally Saturday to demand that the board release the results of the vote.

CUNA advises IWall Street JournalI readers on buyouts

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NEW YORK (2/19/08)--Bill Hampel, chief economist with the Credit Union National Association, gave advice Sunday to The Wall Street Journal readers in an article about whether employees should accept buyout packages offered by employers. Sizing up a buyout offer “is more complicated than buying a house, and most people don’t get practice at it,” Hampel told the paper. “This is something where a professional financial consultant can help you do the arithmetic. “If it would be fairly easy to relatively quickly get a fairly similar job with a fairly similar salary, that makes it almost a no-brainer” to accept the buyout, Hampel added. Otherwise, employees need to run the numbers, he told the paper. Other considerations brought up in the article by Andrea Coombes include:
* Whether employees can still receive employer-funded health care; * Whether employees will be laid off later with no benefits if they reject the buyout offer now; * Whether the company goes bankrupt soon after the offer; and * Whether employees let fear guide their decisions--they shouldn’t because sometimes a buyout is an opportunity to start a new career or business.

NYIB opens 08 conference registration

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ALBUQUERQUE, N.M. (2/19/08)--The National Youth Involvement Board (NYIB) is accepting registrations for its 2008 Annual Conference and applications for its scholarship program. The conference is scheduled for July 28-31 at Caesars Palace in Las Vegas. It will offer resources for marketing to young people, with age-appropriate services and financial education. Scholarship winners and award recipients also will be recognized during the awards program. All interested credit union professionals are eligible, and a list of scholarships and awards is available (use the link). Nominations are due by March 31. The NYIB also has added the new Advocate Award to recognize an individual’s continued dedication to the cooperative, volunteer network both as an advocate of the organization and as an active member committed to nationwide youth-related efforts. Other awards include Outstanding Delegate of the Year and Outstanding Volunteer of the Year. Scholarships can be used to attend the summer Credit Union Development Education (CUDE) training in Bainbridge Island, Wash., Aug. 14-20. NYIB also offers a scholarship to attend the World Council of Credit Unions’ World Credit Union Conference in Hong Kong July 13-16.

Washington breach-reimbursement bill passes House

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FEDERAL WAY, Wash. (2/19/08)--Legislation that would allow a credit union to sue negligent third-party data breachers if the credit union incurred costs to protect its members from fraud and identity theft passed the Washington State House of Representatives Friday. “Passage of this bill confirms the logic that says careless businesses that expose consumers to financial fraud should be responsible for the costs of cleaning up their own mess,” said Washington Credit Union League President/CEO John Annaloro. The bill, HB 2838, now moves to the state Senate, where it is expected to face opposition from bankers and retailers who argue that credit unions should contract for reimbursement with large credit card issuers (Focus Newsletter Feb. 18). Bill sponsor and State Rep. Brendan Williams (D-22) said it’s reasonable to expect businesses to take precautions to protect their customers’ data. Financial institutions, instead of the negligent third parties, pay the bill for the breaches, he added. “While it’s true that businesses pay fees to credit card companies, these fees should not be viewed as immunizing businesses from the necessity to safeguard their customers’ privacy,” Williams said. “There should be some sanction for gross negligence that compromises credit and debit card information.” Last year, Washington credit unions spent more than $1 million to protect their members from fraud and identity theft because of third-party negligence, according to Stacy Augustine, league senior vice president and general counsel. If enacted, the bill would be the second state statute addressing data breach reimbursement.

CU System briefs (02/18/2008)

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* GREELEY, Colo. (2/19/08)--The first-degree murder trial begins today against Shawna Nelson, 37, in the shooting death of an employee of the Greeley branch of Colorado State Employee's CU, Heather Garraus. Garraus, 37, was killed in the parking lot as she left work on Jan. 23, 2007. Garraus' husband, a city policeman, had recently broken off an affair with Nelson, according to police. Nelson's husband, Ken, a sheriff's deputy, was charged on July 26 with tampering with evidence by allegedly removing an object from his wife's vehicle the night of the murder. On Nov. 20, Michelle Dawn Moore, 27, a former sheriff's deputy, was charged with conspiracy to commit first-degree murder and criminal attempt to commit first degree murder. More than 300 witnesses, including Greeley Mayor Ed Clark, are expected to testify in the 15-day trial. Five employees of the credit union are on the witness list (Greeley Tribune Feb. 18) … * HARAHAN, La. (2/19/08)--ASI FCU will open an "all Latino" branch early this summer, with every employee speaking Spanish and English and all documents printed in both languages. The area's growing Hispanic population includes thousands of workers who entered the U.S. without the required documentation. Afraid to do anything that might get them deported, the workers carry their money with them and are targeted by robbers. ASI's branch will feature "safe accounts"--savings accounts from which members can make withdrawals using an ATM card. A second ATM card offers a way for foreign workers to send funds to family back in their countries of origination. The safe accounts don't earn interest because they don't require a Social Security or federal tax ID number to open them (Times-Picayune Feb. 18) … * NORTHVILLE TOWNSHIP, Mich. (2/19/08)--Scott McFarland has been named president/CEO at Berrien Teachers CU, based in Saint Joseph, Mich., according to the Michigan Credit Union League (Michigan Monitor Feb. 18). He succeeds Robert H. Mackay, who retired on Jan. 31 after 25 years of service. McFarland has more than 18 years' experience with credit unions. He formerly served as vice president of member sales and service, vice president of operations and vice president of lending at United FCU; and is a former CEO of Saginaw County Employees CU. He began his credit union career as a teller at Michigan FCU (now Tri-Pointe Community CU) while attending college and became branch manager there after receiving his degree … * HOUSTON (2/19/08)--First Community CU is offering up to $5,000 in $500 “mini-grants” in the first year of a program aimed at helping community civic groups, nonprofit groups and schools come up with creative ways to beautify their neighborhoods. The grants are geared to assist with community projects, not to fund them entirely (Houston Chronicle Feb. 14). The credit union is trying to find a method “to give back to the community while having a green impact,” Nancy Trennel, First Community vice president of marketing and development, told the paper. The grant program also fits the credit union’s philosophy of being a good community partner, she added. Applications for the grant program are due March 3, with grants announced March 7 and awarded April 5 on Keep Houston Beautiful Day ...

All SECU ATMs now talking

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RALEIGH, N.C. (2/19/08)--State Employees’ CU (SECU) in North Carolina announced the completion of an upgrade to its Cash Points ATM network with voice guidance technology that benefits its visually impaired members. The technology provides a “talking” ATM, allowing SECU members at the $14.95 billion asset, Raleigh, N.C.-based credit union to plug in their headphones and listen to step-by-step instructions for conducting transactions at any Cash Points ATM. The upgrade was completed in mid-January, allowing SECU to convert all machines on its network to the “text to speech” technology. SECU has 975 no-surcharge ATMs throughout North Carolina. “SECU’s Cash Points ATMs offer a great voice guidance system that is very simple to use,” said James Benton Sr., community employment specialist for the Division of Services for the Blind Serving the Governor Morehead School Transition Program. “The technology provides visually impaired members complete and private access to account information without the assistance of a third party, which is extremely important. “Having this system available through a statewide network is beneficial,” he added. “There are many advocates who are blind or visually impaired who have led the way and worked with SECU to make such a network available, and their hard work is appreciated.” SECU added the service to an existing list of other special needs services, such as Braille and large-print statements, and TDD services--a telecommunications device for the hearing impaired, according to Leanne Phillips, SECU senior vice president of card and record services.

IBankrate.comI explains why CUs offer great rates

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NORTH PALM BEACH, Fla. (2/19/08)--A Monday column in Bankrate.com answers a reader’s question on why credit unions offer lower loan rates and higher savings rates than traditional banks. “Credit unions are owned by their membership, so the break in the lending rate and the bump in the savings yield relate to the benefits of ownership,” Taylor wrote in his “Ask Dr. Don” column. The reader also asked how to join a credit union, and if the recent lowering of the federal funds rate means that more Americans should seek out credit unions for their financial needs. “The Credit Union National Association has a credit union locator that lets you search by either location or possible ties to the membership of a credit union,” Taylor responded. “I don’t think that the targeted federal funds rate is a motivating factor for Americans to seek out a credit union that they’re eligible to join. “If you like the loan rates, deposit yields or community feel of a credit union, there’s never a bad time to become a member,” he added.

N.H. league testifies before state passes 36 payday cap

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MANCHESTER, N.H. (2/18/08)--New Hampshire has passed a 36% cap on annual interest rates for payday and title loans, putting a stop to 400% interest and the payday lending cycle of debt.The New Hampshire Credit Union League recently testified before the state legislature before the measure’s passage. New Hampshire Gov. John Lynch promises to sign the bill into law. The New Hampshire Senate passed a bill closely aligned with the House version Thursday. “The league testified on payday lending options that credit unions provide to consumers at both the hearings on the House bill and the Senate bill,” Rob Kimmett, senior vice president with the New Hampshire Credit Union League, told News Now. “These options were part of the debate that the Senate held on the floor prior to voting on the bill.” Roughly a dozen states are enforcing an interest rate cap at or around 36%. About 90% of payday lending business is generated by borrowers who have five or more loans per year, according to the Center for Responsible Lending. The average borrower has more than eight transactions per year for a loan that is marketed as a two-week loan, so borrowers end up routinely paying more in interest than they borrowed, the center said.

CU suspends membership vote on conversion proposal

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ODESSA, Texas (2/18/08)--First Basin CU has chosen to suspend the membership vote scheduled for Feb. 21 at a special meeting regarding its conversion proposal, according to a letter sent to members by First Basin CEO Shem Culpepper. The credit union decided to suspend the vote for a number of reasons the letter stated. It has come to the attention of First Basin that members have received calls telling them that if they don’t vote against the conversion, they will lose their money on deposits and their accounts will be closed, Culpepper wrote. “The conversion to a mutual savings bank would not result in any member losing his or her money or any account being close,” he wrote. Culpepper cited “numerous other false statements” being circulated by opponents of the conversion proposal, such as rate and fee changes. The First Basin board also wants to evaluate whether it can reward members by returning a portion of the credit union’s net worth to them, in the form of a cash payment to all eligible members upon conversion, Culpepper wrote. The board wants to continue retaining its one-member, one-vote structure. “Our goal is to continue to operate First Basin as a safe and sound financial institution and to provide members with great products and services,” Culpepper concluded.

IBusiness WeekI includes SECUs Blaine on credit scores

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RALEIGH, N.C. (2/18/08)--James C. Blaine, CEO of State Employees’ CU (SECU) in Raleigh, N.C., was quoted in an article in the Feb. 18 issue of BusinessWeek, focusing on lending industry standards and consumer credit scores. Blaine, who oversees the needs of 1.4 million members in his $14.95 billion asset credit union, told the magazine in the article, “Sinking Credit,” by Peter Coy, that he favors a more equitable process, other than credit scores, as a yardstick for issuing loans. All SECU members who meet the credit union’s underwriting standards get the same flat rate--now 6.25%--regardless of their credit history, Blaine told the magazine. “You shouldn’t abuse a good [people] just because they don’t understand the financial system,” Blaine said in the interview, adding that subprime borrowers default because of high interest rates, not FICO scores. There’s not much difference between his credit union’s borrowers with the lowest scores and those with the highest, he said. Of these members who would be traditionally classified as subprime borrowers, 1.25% defaulted on their home loans, which is below the 7% that analysts expect at larger lenders such as Washington Mutual, according to Business Week.

CU System briefs (02/15/2008)

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* RANCHO CUCAMONGA, Calif. (2/18/08)--California Agribusiness CU, Buena Park, donated $1,000 to an urban demonstration farm in Pomona. The money will be used to install an above-ground drip irrigation system. The Tri-City Urban Demonstration Farm is a community farming project developed by Randy Bekendam of Rancho Cucamonga. The idea came about with the creation of Operation ETHAN (Everyone Together for Healing All Neighborhoods) after the shooting death of Ethan Esparza in Pomona in November 2006. From left are: Randy Bekendam’s wife, Pam, Denbo and Randy Bekendam ... * GERMANTOWN, Md. (2/18/08)--Mid-Atlantic FCU has become a Federal Housing Administration-approved lender, which allows the credit union to provide loans to more families in Montgomery County. FHA loans are insured by the government and serve borrowers who do not have good credit histories. Mid-Atlantic has more than $200 million in assets ... * NEW YORK (2/18/08)--The National Federation of Community Development Credit Unions confirmed the participation of Rodney Hood, National Credit Union Administration vice chairman; Martin Eakes, CEO, Self-Help CU, Durham, N.C.; and Bob Dorsa, president, ACUMA, for a workshop at the Center for Responsible Lending March 18-19 in Durham. The workshop will address lending in the housing market, foreclosure prevention, innovative lending products, secondary markets and servicing options. The workshop is designed for credit unions, housing professionals, other community-based mortgage lenders and is a collaborative program of the Federation’s Community Development Credit Union Mortgage Center and the Community Development Credit Union Institute ... * INDIANAPOLIS (2/18/08)--FORUM CU in Indianapolis has been honored as one of the top 125 places in the nation for employer-sponsored workforce training and development by Training Magazine for the second year in a row. Factors influencing the rankings were tied to business objectives, number of trainers, employee turnover and retention. Some of the FORUM CU training programs highlighted include the “Branch Buddy” program that helps new employees transition from training to branch jobs, the INSPURE sales and service training, and the LEAP leadership classes. FORUM has $1.0 billion in assets ... * VANCOUVER, Wash. (2/18/08)--Employees of Columbia CU, Vancouver, planted trees throughout the Vancouver Heights Neighborhood as part of the “Neighborhood of the 150th” celebration sponsored by the credit union. The program honored Vancouver Heights for its spirit of community through the city’s Sparkles Award program. Columbia CU and the City of Vancouver partnered to honor the neighborhood with Columbia sponsoring 150 trees. About 90 volunteers planted 87 trees, served food or helped with the event. From left are: Pam Betteridge, Columbia CU assistant vice president of sales and service; Trish Garrison, Columbia CU branch manager; Ken Davis, volunteer and Columbia member; DJ Peterson, Columbia CU branch manager; Dave Robison, Columbia CU indirect lending loan officer; and Nancy Olmsted, Columbia CU vice president of marketing. In addition to the tree-planting, Columbia has committed to building Leadership in Energy and Environmental Design (LEED)-certified branches, with one underway at a retail development in Vancouver. (Photo provided by Columbia CU) ...

Oakland elected vice chair of National CU Foundation

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SEATTLE (2/18/08)--Gary Oakland, president/CEO of BECU, Seattle, was unanimously elected as vice chairman of the National Credit Union Foundation (NCUF) board. Oakland will chair NCUF’s Fundraising Committee. He represents investors in the Callahan Fund, a sub-fund of the Community Investment Fund, which provides NCUF’s underwriting support for the Biz Kid$ financial education series on national public television. Francois Henriquez, senior vice president and general counsel for US Central FCU in Lenexa, Kan., was elected as NCUF board secretary. Henriquez will continue to chair NCUF’s grants committee. Dennis DeGroodt, president/CEO of Missouri Corporate CU in St. Louis, was reelected as NCUF treasurer. DeGroodt will continue to chair NCUF’s finance committee. After the NCUF officer elections in Denver two weeks ago, new NCUF Chairman Allan McMorris presented awards to NCUF’s two most recent chairs, Mary Cunningham, who directed the adoption of REAL Solutions and Credit Union Development Education; and Chuck Purvis, who directed the creation of the Community Investment Fund. Cunningham will remain on the NCUF Board in a non-voting capacity as immediate past chairman. Purvis has now rotated off of the NCUF Board, but plans to participate in NCUF programs.

CU evolves from airline through merger

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MOON TOWNSHIP, Pa. (2/18/08)--The 3,300 members of the former Hopewell CU are experiencing enhanced benefits since the Jan. 31 merger with 75,000-member Clearview FCU. Members of the $614.5 million asset, Moon Township, Pa.-based Clearview have automatic teller machine cards, direct deposits and Web-based bill payments--services that were not available at Hopewell (Pittsburgh Post-Gazette Feb. 14). The genesis of Clearview dates back to 1953, when it started up as Allegheny Airlines FCU with 1,390 members and assets of $826, 541. Airline industry fluctuations and changes in federal credit union regulations have led to changes in the credit union’s name and mission. For 12 years after its inception, the credit union operated out of National Airport in Washington, D.C., before relocating to Pittsburgh where the majority of the airline employees had always been based. Since the mid 1960s, the credit union has expanded, contracted and expanded again. Clearview has had six mergers since its inception, counting the recent Hopewell merger. It has evolved from a one-branch counter business to a full-service lender with eight branches, including two that opened in the past two months.

CUs on the Tube Filenes VirtualFinance project

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MADISON, Wis. (2/18/08)--The Filene Research Institute has posted a video for its VirtualFinance project that introduces Second Life, a virtual social networking environment, to credit unions. Second Life allows users to create “avatars,” or characters mimicking themselves that interact in a virtual environment. Avatars can communicate with others through instant messaging, visit “islands” or places of interest, and make financial transactions. A team of Filene i3 researchers is currently using Second Life to create a credit union island. Avatars can visit the island to find out more information about the credit union and make transactions using currency, called Linden Dollars.

IToday ShowI to profile BizKid

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WASHINGTON (2/18/08)--The Today Show was scheduled to profile a Biz Kid this morning in a segment titled, “Raising Financially Savvy Kids.” The Biz Kid, Christian, was featured on Biz Kid$ episode 106. Christian is a credit union member from Spokane, Wash., who is actively involved with Junior Achievement. Biz Kid$, a TV series underwritten by America’s Credit Unions to teach children about money, is scheduled to air on 290 PBS stations in 47 states. The show is produced in association with Junior Achievement Worldwide and WXXI Public Broadcasting. Funding is led by the National Credit Union Foundation and the Washington Credit Union Foundation. The Biz Kid$ team created and produced "Bill Nye the Science Guy,” an award-winning show that taught children about science.

Texas league voter poll Electorate likes CUs

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FARMERS BRANCH, Texas (2/18/08)--Texas Democrats and Republicans hold favorable views of credit unions by a wide margin, according to the Texas Credit Union League (TCUL) Poll of Texas Primary Voters. Roughly half of Democrats (52%) and Republicans (47%) belong to credit unions, the poll indicated (PR Newswire Feb. 15). Also, most Democratic (83%) and Republican (80%) voters support the Texas State legislature in considering the passage of a new law that would crack down on identity theft and fraud. The TCUL commissions primary and general election voter surveys every two years on politics and key issues for credit unions. The poll also indicates that Hillary Clinton leads Barack Obama in the Texas Democratic primary contest, 49% to 41%. In the Texas Republican primary race, John McCain (45%) and Mike Huckabee (41%) are locked in a statistical tie, with Ron Paul trailing at 6%. For more poll results, use the link.

State regulator sets teleconference about proposed fee hike

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FEDERAL WAY, Wash. (2/15/08)--In response to concerns raised by the Washington Credit Union League, the state Division of Credit Unions (DCU) will host a teleconference Feb. 29 about its proposed 5.38% credit union fee increase for fiscal year 2009. The teleconference, which will start at 10 a.m. PST, will provide data and the rationale behind the increase. The league had written a comment letter Jan. 11 asking for a full business case analysis to explain the proposed increase. The league's comment letter, written by Stacy Augustine, senior vice president and general counsel, said it supported earlier fee increases in 1995 and 2001, but it raised three concerns about the new increase proposal:
* It asked DCU to make a business case to all state-chartered credit unions, answering these questions: Why haven't organic increases associated with asset-based assessment kept pace, since more state-chartered credit unions exist today than when the formula was created? What has the division done to reduce expenses? What types of increased costs are out of DCU's control? How does its efficiency metrics compare with other credit union regulators? How will DCU improve its efficiency? * Past fees-increase support centered the desire to increase examiner quality and retention. The league asked for more detail on what DCU has done to increase examiner quality since the last increase and whether it succeeded in improving quality or reducing industry concerns. It also asked how DCU would address examiner quality in the future. * The league said it continues to be concerned about having dedicated, nonappropriated funds swept into the state's general fund during times of economic stress. Although the league supported the merging of separate divisions of credit unions, banks, securities and consumer services funds into one Department of Financial Institution Fund, it is concerned about sweeps in the future.
"Providing this information to Washington's credit union community may give credit unions more confidence that the division's fee increase is necessary and will be put to good use," said Augustine. The league's letter can be found by going to Department of Financial Institutions' website, clicking on Rulemaking Activity, then Updated Fee Regulations Rulemaking, then Comments. Due to the state's initiative 960, now in effect, the state legislature must vote on all tax and fee increases for state agencies, says DCU in a bulletin issued Feb. 7. The new process means DCU and the Washington State Department of Financial Institutions (DFI) must seek legislative approval in a bill or budget item, for even routine or minor fee increases, DCU said. A Power Point for the teleconference will be available on DCU's website before the teleconference.

How will tax rebate impact lenders

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CHICAGO, Ill. (2/15/08)--The tax rebates included in Congress' economic stimulus package will impact consumers' spending and saving, but it will also affect the economy and credit lenders, according to a new study. In the survey commissioned by credit bureau TransUnion, 42% of consumers surveyed said they would pay down debt if they received a tax rebate. Another 20% would save the money. But 21% would spend it, with 16% of those saying would buy something they considered necessary and 5% indicating they would splurge. How does that stack up to consumers' behavior during with past stimulus packages from 2001 to 2003? Ezra Becker, TransUnion's principal consultant in financial services, checked TransUnion's Trend Data database--a quarterly snapshot of 25 million consumers randomly sampled. The trends led to the conclusion that after those rebates, consumers still were relying on credit and some continued to have credit problems after a temporary relief. The trends noted were:
* Consumers saved little with the 2001 government stimulus check and instead spent it or paid down past-due debt; * Third-quarter 2001 saw the highest percentage--less than 3%--of consumers who were 60 days past due on bank cards. That percentage dropped to 2.4% during second-quarter 2002 and then increased to more than 3% during first-quarter 2003. * The average balance of bankcards that were 60 days or more past due dropped significantly in third-quarter 2001. Some of the stimulus refund check could have gone to pay down credit debt (averaging under $1,600). After the decrease during that quarter, however, the average balance of cards 60 days or more past due continued to increase--to more than $2,200 during fourth-quarter 2003. * The average balance of new bankcards dropped slightly from third quarter 2001 to fourth quarter. Consumers were paying down balances but started a steady climb until leveling off in early 2003. The average daily balance of new bankcards increased. That means consumers continued to rely on credit.
TransUnion's TrueCredit.com survey was conducted by Zogby International. The online survey of 3,036 adults was conducted Jan. 30 to Feb. 1. Its margin of error is +/- 1.8 percentage points.

WOCCU to host supporters reception

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WASHINGTON (2/15/08)--The annual World Council of Credit Unions (WOCCU) Supporters Reception will be March 2 at the Chinese Embassy in Washington, D.C. The reception is scheduled during the Credit Union National Association Governmental Affairs Conference in Washington, D.C. March 2-6. WOCCU must turn in registrants' names to the embassy for security reasons today. The reception includes an introduction to the World Credit Union Conference July 13-16 in Hong Kong. Charles Yip, president of the Credit Union League of Hong Kong, will preview the conference. Melvin Edwards, WOCCU chairman, and Pete Crear, WOCCU president/CEO, will provide information on WOCCU’s activities and the role it plays in helping developing countries and their credit union movements. The reception starts at 5:30 p.m. Program speakers begin at 6.

WOCCU issues new global model for CUs

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MADISON, Wis. (2/15/08)--Credit union leaders, policymakers and regulators can receive help implementing regulatory standards with the World Council of Credit Unions’ (WOCCU) new Model Regulations for Credit Unions. The regulations supplement the Model Law for Credit Unions, published in 2005. Model Regulations is based on examples of regulations assembled from numerous countries and from WOCCU’s international development experience. WOCCU research provided a policy framework for the 62-page guide, while other microfinance institutions contributed principles, said Dave Grace, WOCCU vice president of association services. “Credit unions in many countries do not have sufficient regulatory supervision,” Grace said. “WOCCU is providing the next step of guidance--model regulations to implement the laws they’ve created.” Model Regulations includes a CD-ROM with real-world examples of regulations from 18 credit union sectors. The guide will be distributed to participants at the Global Regulators’ Roundtable, scheduled for the 2008 World Credit Union Conference, July 13-16, in Hong Kong. For more information, use the links.

Dayton CUs banks sidestepped mortgage industry problems

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DAYTON, Ohio (2/15/08)--Dayton, Ohio-area credit unions and banks say they have managed to avoid many of the problems in the mortgage market. Wright-Patt CU’s home-loan applications doubled in January, compared with one year ago, Tim Mislansky, senior vice president, told the Dayton Daily News (Feb. 9). The credit union also saw an increase in demand for purchase mortgages and refinancing applications. Wright-Patt’s average home loan is $90,000, with more than half of loans going to first-time homebuyers, Mislansky told the newspaper. Credit unions usually avoid risky debts such as subprime loans, he added. Though lenders like Wright-Patt aren’t tangled up with foreclosures or subprime loans, they are still affected indirectly. Credit has tightened, and markets that bought home loans from credit unions have cut back, the newspaper stated. About 98% of state-chartered banks and credit unions were not involved with subprime lending, said Dennis Ginty, spokesman for the Ohio Department of Commerce. Though some institutions did not get involved with subprime lending, it is still a major problem, Nancy Mohan, assistant professor of finance at the University of Dayton, told the Daily News.

Amended CU modernization bill heads to Ohio Senate

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COLMUBUS, Ohio (2/15/08)--Credit union modernization legislation--Senate Bill 247--made it through the Ohio Financial and Financial Institutions Committee Feb. 5 without opposition, says the Ohio Credit Union League (eLumination Newsletter, Feb. 13). The legislation seeks to modernize the administration, operation and governance of Ohio’s state-chartered credit unions. The committee adopted several amendments to the legislation that would:
* Require credit unions to retain Suspicious Activity Reports for five years; * Provide further clarification of nonpaper document storage requirements; and * Provide of authority for the superintendent of the Ohio Division of Financial Institutions to conduct national background checks within limits.
The bill will go to the floor for a vote when the State Senate returns to session. SB 247 is then expected to be referred to the House Financial Institutions, Real Estate and Securities Committee, according to league General Counsel John Kozlowksi. “We expect the credit union legislation to continue making solid progress through the House and in the Senate,” Kozlowski said.

Mission is the difference Crear tells Faith CU

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DUBLIN, Ohio (2/15/08)--Mission, not member service, is where the difference lies between banks and credit unions, World Council of Credit Unions (WOCCU) CEO Pete Crear told Faith Community United CU during its annual shareholders meeting and banquet Feb. 2. The strategic plans of WOCCU, Faith Community United, and all credit unions are the same, Crear said (eLumination Newsletter Feb. 13). “As our institutions have grown and become more sophisticated, the mission has never left us, but it sometimes becomes obscured by institutions striving to be more competitive, to offer the hottest transaction technology, the sharpest marketing efforts, and the most attractive savings and lending rates in town,” he said. Crear said he was amazed by the commitment of credit unions throughout the world to service members and the challenges they face. “As credit union leaders, we have an extra burden to shoulder,” he added. Credit unions must remain committed to providing high-quality financial services, and “support the credit union mission as a mission,” he said. Crear said all cooperatives should answer “yes” to the following questions:
* Do you reach out to serve various people and support that commitment through action? * Are you the source of financial knowledge and leadership in the communities you serve, (and do you) provide financial education (and do you) often temper expectations with compassion for personal circumstances? and; * When you introduce new services, do you measure their impact and define their success by how well they serve your members’ most critical needs? Faith Community United CU of Cleveland has $9.9 million in assets.

CU System briefs (02/14/2008)

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* MADISON, Wis. (2/15/08)--The Madison, Wis., and Washington, D.C., offices of the Credit Union National Association will be open Monday, President's Day. Some leagues have announced they will be closed during the federal holiday. CUNA's News Now will publish as usual on Monday … * KIMBERLEY, Wis. (2/15/08)--Capital CU is accepting vehicle registration renewals at all of its branches as a convenience to its members. In partnership with the Wisconsin Department of Motor Vehicles, the $295 million asset, Kimberly, Wis.-based credit union said those interested in the service can bring their renewal slip and pay the fees. Capital will handle the rest of the registration. Renewals are accepted for car, truck or motorcycle registrations. The credit union charges a $6 service fee plus the renewal fee … * SAN JOSE, Calif.(2/15/08)--Technology CU has become the official credit union for the employees of Facebook, a social networking company, announced the credit union. "Facebook is a community-driven network, and so it makes sense that they would partner with a credit union for their employees," said Donna Butcher, assistant vice-president of business development for Tech CU … * ST. PETERSBURG, Fla. (2/15/08)--PSCU Financial Services announced that Kyle L. Markland, CEO of Affinity Plus FCU, St. Paul, Minn., has been named to PSCU’s board of directors, and Hubert Hoosman Jr., president/CEO of Vantage CU, St. Louis, has been appointed as associate director. Markland has more than 25 years of experience in the credit union industry, and Hoosman has worked in the industry for 24 years, according to PSCU. PSCU is a credit union service organization that serves more than 1,100 financial institutions nationwide … * ARVADA, Colo. (2/15/08)--The Credit Association of Colorado and Credit Union Association of Wyoming (CUAC/CUAW) announced the promotion of Melissa Vetterling to grassroots organizer. She will assume her new duties today. Vetterling has been a part of CUAC/CUAW’s Government Affairs Department for the past two years, serving as administrative assistant for the association’s Government Affairs department, and before that she was an administrative assistant for the association’s Marketing Communications department. In 2006, Vetterling received a Grassroots Advocate Award for the Colorado Credit Union Vote 2006 team ... * ELYRIA, Ohio (2/15/08)--School Employees Loraine County CU, based in Elyria, Ohio, has named Brent Binkley as president/CEO, reports the Ohio Credit Union League (eLumination Newsletter Feb. 14). Binkley joined the credit union in 2001 as chief operating officer and was promoted last March to senior vice president. He has 22 years' experience in the financial industry …

Robbers in Pennsylvania getting bolder violent says FBI

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LANCASTER COUNTY, Pa. (2/15/08)--Gangs of violent robbers have become bolder and more dangerous as they have cut a swath through central Pennsylvania during the past two years, targeting financial institutions, the FBI said. Not only are the robberies some of the most violent that the FBI has seen seen, the level of violence is escalating, which means it is just a matter of time before people get hurt, Arturo Canedo, FBI senior special agent, told the Harrisburg Patriot News (Lancaster New Era/Intelligencer Journal Feb. 9). The FBI believes that two unrelated pairs of robbers are perpetrating the holdups, netting more than $750,000 from financial institutions in Dauphin, Lancaster, Lycoming and York counties. On Oct. 25, two masked men entered Lanco FCU, a $44.3 million asset, Lancaster, Pa- based credit union. They jumped behind the counter and forced a female clerk away from the cash drawers, according to police. Although no weapons were brandished and no one was seriously injured, the robbers made off in white pickup truck with more than $6,000 in cash. The robbers appear to be organized, have a plan and are becoming increasingly aggressive, said Malinda C. Anderson, special agent with the FBI’s Harrisburg, Pa., bureau. Although they strike at different times of the day, both pairs use the same getaway mechanism--stealing a car that they then abandon in a parking a lot about a half-mile down the road, Anderson said.

McMorris elected chairman of National CU Foundation

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DENVER (2/15/08)--Allan Kemp McMorris, president/CEO of Oakland County CU in Waterford, Mich., was elected chairman of the National Credit Union Foundation (NCUF) at its annual meeting this week in Denver. In his acceptance speech, McMorris remarked how the foundation has evolved since the Community Investment Fund was created in 1999. “We’ve seen phenomenal growth in grant dollars--from less than $200,000 to more than $6 million. We’re making a widespread impact on our industry--with foundation programs and grants reaching all 50 states, thousands of credit unions, and millions of members.” At the same time, he said, “The Foundation board has expanded and grown more diverse, representing all sectors of the credit union community.” The NCUF Board includes natural-person credit unions from all asset ranges, corporate credit unions, state credit union foundations, state credit union leagues, and national credit union support organizations. McMorris will continue to encourage credit union membership growth and youth financial education--key goals of the two largest programs receiving NCUF funding: REAL Solutions and Biz Kid$. As chairman of the Credit Union National Association (CUNA) the past year, McMorris created CUNA’s Membership Growth Task Force (News Now June 5, 2007). He focused on ways to attract Generation Y--young consumers who typically use three different financial providers. “Our challenge is to make sure credit unions are among their choices, become their primary financial institution and help them benefit from financial literacy," McMorris said. McMorris will step down as CUNA chairman on March 3. While NCUF and CUNA are separate organizations with different boards, he said, they share common goals of strengthening credit unions and empowering consumers. “Our two organizations succeed together,” he concluded.

Beehive members cast votes on bank conversion

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SALT LAKE CITY (2/14/08)--Members of Beehive Credit Union were scheduled to vote yesterday at a special meeting on whether to convert the $185 million asset credit union to a mutual savings bank. Voting via mail ballots began in early January and was to culminate in the special meeting Wednesday. Results of the vote were unavailable at press time. The state-chartered credit union announced the conversion proposal last March. It applied for a bank charter with the Office of Thrift Supervision on Sept. 10, 2007 (News Now Oct. 5, 2007). The credit union says conversion would allow it to offer more branches, larger business loans and more competitive financial services. A state law passed in 1999 prevents the credit union from building another branch in Utah County. At a conversion meeting last year, the credit union's board told members the state's banks have attempted to limit credit unions' service and take away their tax-exempt status. The Utah League of Credit Unions launched a website last May, www.membershipcounts.com, to make sure members are informed about what happens to a credit union if it converts to a bank (News Now May 1, 2007). Scott Jorgensen, CEO of the credit union, has told local newspapers there are no plans to take Beehive public after a conversion.

Stretching car-loan terms may be risky says consultant

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NEW YORK (2/14/08)--Some auto lenders are pushing longer-term car loans because they have less access to cheap-interest funds and can't cut monthly loan payments as deeply. That can be risky for the buyer and the lender, say several industry experts. About 82% of auto loans are for 60 months to 77.9 months. However, some go as long as 84 months, 96 months and nearly 102 months, according to data from Power Information Network, a unit of J.D. Power and Associates (USA TODAY Feb. 13). Toyota Motor Credit said last week it has been making 84-month (seven year)loans since August to ease buyers' monthly payments and to boost sales. GMAC offers 84-month loans, and Ford Motor Credit offers them in test marketing situations. But Argus Research auto analyst Kevin Tynan says easy buying and long loans can induce a bubble that will burst, much like the housing market did. Credit unions, seeing competition from auto dealers who offer lower month payments by stretching the number of those payments, may be tempted to follow their lead to stay competitive. However, there are other reasons to be cautious about extending loan payments, says Tynan:
* Longer loans mean the buyer plans to keep the vehicle a long time or is looking for a low monthly payment. That hurts future sales and financing opportunities. A decline in new car demand hurts the economy. * Vehicles depreciate fast. At a little over halfway into a 60-month loan, a vehicle might be worth little more than the loan balance. A longer loan means the buyer owes a lot more than the car is worth. * If the borrower decides to trade in, he still owes the balance on the original vehicle. The balance gets rolled into a new loan, making it almost impossible to have equity in a new vehicle.

CU System briefs (02/13/2008)

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* DUBLIN, Ohio (2/14/08)--Ohio State Sen. Steve Stivers (R) attended Ohio HealthCare FCU’s (OHCFCU) Dignitary Open House Feb. 6. Stivers received a tour of the branch and spoke to attendees about his excitement over the branch’s service to healthcare employees and other credit union shared branching members. He also tried out one of the remote teller kiosks and said the kiosk's security feature will deter robberies. Stivers, left, is shown with Bill Butler, OHFCU CEO, at the kiosk. (Photo provided by Ohio HealthCare FCU) ... * SAN ANTONIO, Texas (2/14/08)--San Antonio FCU (SACU) is providing ATMs on the grounds of the 2008 San Antonio Stock Show & Rodeo to help out rodeo patrons needing cash. SACU has a mobile ATM, shown here at the event, and seven ATM kiosks in place on the livestock and rodeo grounds during the 18-day event. “SACU is proud to be a sponsor of the 2008 San Antonio Stock Show & Rodeo, which provides such a positive impact on our community through its educational and financial commitment to young people,” said Jeff Farver, SACU president/CEO. (Photo provided by San Antonio FCU) … * SAN DIEGO (2/14/08)--Ron Martin, president/CEO of Mission FCU, a San Diego-based credit union, announced Tuesday he will retire after 38 years in the financial industry, effective April 30. During the 12 years Martin led Mission FCU, the credit union tripled its assets to $1.8 billion and equity to $192 million (BusinessWire Feb. 12). The credit union also expanded to 23 branches and introduced electronic and online banking. During Martin’s tenure, Mission FCU received several awards for promoting financial literacy among youth. In 2003, the credit union received a federal community charter to serve all 2.8 million residents of San Diego County … * SAN DIEGO (2/14/08)--Jim McPheters, president/CEO of California Coast Union CU, announced his retirement will be effective April 1. He has been president/CEO of the credit union for more than 21 years. Under his leadership, the credit union’s membership increased to more than 66,000 from 18,000. He also served as board chair of the California Credit Union League from 2005 to 2006. Kathy Cady, California Coast Union CU senior vice president, will serve as interim CEO ... * PEMBROKE PINES, Fla. (2/14/08)--Power Financial CU invited the community's children to its headquarters last weekend to "Have a Heart" and create a Valentine's Day card for patients at the Joe DiMaggio Children's Hospital and listen to local author Leah Orr read her children's story, Kyle's First Playdate. The photo shows PFCU President/CEO Allan M. Prindle and mascot Rocky the Raccoon delivering the cards and a stack of Orr's books Wednesday to Tangi Brownlee, supervisor of the hospital's Child Life Department. "By inviting young children in to create Valentine's Day cards for the kids in the hospital, we're sharing with them the importance of giving back and affording them the opportunity to learn what it means to truly 'Have a Heart,'" Prindle said. (Photo provided by Power Financial CU) …

CUs warn against using account statements as voter IDs

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PEWAUKEE, Wis. (2/14/08)--Credit union members should avoid using their account statements as identification when voting, said the Wisconsin Credit Union League. “You’re better off using a state identification, utility bill or some other permitted document,” said Brett Thompson, league president/CEO. “It’s just safer to limit your exposure with sensitive information.” Using an account statement could increase the chances of identity theft. Some voters are tempted to use account statements if a current address is not reflected on their driver’s license, the league said. “It’s an unnecessary risk to allow anyone to see your account number,” Thompson said. He advised consumers to be cautious, whether registering with a municipal clerk or as part of local voter registration drives.

CUs alerted to virus spread through e-Valentines

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HARRISBURG, Pa. (2/14/08)--Credit unions may want to monitor incoming e-mails that advertise e-Valentines because employees and others sending or receiving them could introduce a virus into the credit union’s system. The Pennsylvania Credit Union Association and the Louisiana Credit Union League warned their credit unions Wednesday of possible scams after the Internet Crime Complaint Center (IC3) sent out an alert warning against spam e-mails (Life is a Highway and eNews Feb. 13). Some of the spam e-mails can spread Storm Worm malicious software (malware). The e-mails ask users to click on a link, which downloads malware to the computer and infects it with the Storm Worm botnet, according to IC3. A botnet is a network of compromised machines under control of one user and set up to facilitate criminal activity. The Storm Worm virus was sent through millions of e-mails during holidays the past year, with Valentine’s Day identified as the next target. Recipients should be wary of e-mails from unknown senders and should not open unsolicited e-mails or click on the links provided, IC3 said.

Texas man is first volunteer elected to NCUF Board

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HOUSTON (2/14/08)--Former 2003 Texas Volunteer of the Year Curtis Collins is the first volunteer to be elected to a three-year term on the board of the National Credit Union Foundation (NCUF). Collins--who has volunteered at all levels of the credit union system for 43 years--is vice chairman and membership officer for JSC FCU, Houston. He also is an active credit union development educator. In recent years, Collins has volunteered on the boards of the Texas Credit Union Foundation, the Texas Credit Union League, and the American Red Cross Houston Chapter. He also served six years as a loaned executive for the United Way of the Texas Gulf Coast. “Board members agreed that Curtis will bring valuable fundraising experience, state credit union foundation perspectives, and a renewed spirit of volunteerism,” said NCUF Chairman Mary Cunningham. “We are impressed with how the Texas Credit Union Foundation generated significant increases in the Community Investment Fund (CIF),” said NCUF Governance and Nominations Committee Chairman Chuck Purvis. Because of Collins’ efforts to promote CIF benefits to local credit union professionals, several new investments were made, Purvis added.

CEO USC still among top-rated depository institutions

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LENEXA, Kan. (2/14/08)--In a letter to trade press, the president/CEO of U.S. Central (USC) outlined factors that affected the corporate's 2007 performance and led to debt rating change from a rating agency, and concluded USC is still among the top-rated depository institutions in the country, with strong capital and ample resources for liquidity. Francis Lee, president/CEO, noted in the letter that as "an effective buffer to our corporates from much of the disruption in the credit markets," the Lenexa, Kan.-based corporate has "not been immune to the impact of the market dislocation." He addressed the debt rating changes by Standard & Poor's (S&P), Moody's and Fitch. S&P moved its rating from the top rating of "AAA"--which U.S. Central shared with one other depository institution, Wells Fargo--to the second-highest "AA+" rating, shared with two other domestic institutions, Bank of America and U.S. Bank. The high ratings validate U.S. Central's strength and stability, Lee said. Lee also clarified events that occurred in 2007, when the currently unaudited year-end financials showed net income substantially below 2006. He attributed the reduction to $96 million in "unusual investment-related charges, some realized and some unrealized." The charges were partially offset by an additional $40 million in net interest income, compared with 2006. The unusual investment charges consisted of three components:
* An isolation strategy was implemented at the beginning of the market's dislocation, after USC detected "abnormal deterioration in collateral performance of securities in our $40 billion portfolio," said Lee. USC projected likely permanent impairment for 19 bonds and recognized through income a loss of $38 million, leaving a remaining principal balance of $66 million of these bonds. * "U.S. Central had established an Asset Backed Commercial Paper (ABCP) conduit, for the purpose of generating fee income as well as adding an additional source of liquidity. In 2007, that market dried up. Like most conduits, it was required to be consolidated onto the balance sheet. Upon consolidation onto U.S. Central’s balance sheet, these assets were recorded at their fair market value with a charge against U.S. Central’s earnings equal to their unrealized loss, or $31 million. This loss will be accreted to income over the remaining life of the securities (approximately five years) in a similar manner as an investment security purchased at a discount." * USC recorded a $27 million unrealized loss from declining market values of securities classified for accounting purposes as trading. Market value changes on trading are recorded as income or loss immediately (unlike securities classified as available-for-sale).
Of the total unusual charges of $96 million, only $38 million in write- downs represent permanent losses, Lee said. The other $58 million are unrealized losses. USC believes those will be recovered as markets stabilize or as assets approach maturity. "U.S. Central remains one of the most highly rated depository institutions in the U.S. by the three most prominent rating agencies," Lee said. "It has a strong capital level of approximately $2.4 billion and ample resources to provide liquidity to its members--with approximately $3.5 billion in cash and equivalents available and access to more than $20 billion in liquidity," he said. For more detail, see Lee's full letter by using the resource link.

Emerson named CEO at Connecticut league

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WALLINGFORD, Conn. (2/14/08)--The Credit Union League of Connecticut board of directors announced the appointment of Anthony L. Emerson as the league’s new president/CEO. Emerson--who holds a doctorate in business administration--is vice president of finance, accounting and operations at Maine Savings FCU, Hampden, Maine. He also co-founded Business Lending Solutions--a commercial services credit union service organization (CUSO)--and oversees the ownership interests of CUSO Mortgage Corporation for Maine Savings. Emerson is involved in the credit union community, regularly making presentations to local college and high students on financial education. He also is involved in a credit union reality fair for students in Maine. “The league board, management and staff are looking forward to working with Tony in continuing to serve credit unions in Connecticut with exceptional services, programs and educational sessions,” said Kathy Chartier, CEO, Members CU and league chair. “Member credit unions will have an opportunity to meet and greet him at our upcoming Connecticut Governmental Affairs Conference Feb. 20 at the state capitol.” Emerson will assume the position of league president/CEO March 17.

Gift card sales doubled says TMG

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DES MOINES, Iowa (2/14/08)--ATIRAgift card sales nearly doubled this past holiday season, with gift card increases experienced by credit unions nationwide, according to The Members Group (TMG). “Credit union members are embracing branded prepaid debit cards,” said Jeff Falk, TMG director of product development. “The evidence is in the total number of gift cards sold throughout the country during the past seven years. So it’s not surprising to see the numbers of our total cards sold double, and penetration per branch increase 20% over the 2006 holiday figures.” More than $4 million was loaded onto nearly 50,000 ATIRAgift cards, which averaged a $6 per card increase over last year, Falk said. “Our clients continue to talk about the importance of member satisfaction. They are encouraged by the multiple uses of gift cards--such as travel and teaching teens how to budget,” Falk said. Fifty-five credit unions, ranging in assets from less than $6 million to more than $4 billion, offer ATIRAgift cards through custom issuer or reseller programs, TMG said.

West Virginia CUs dodge the mortgage bullet

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CHARLESTON, W. Va. (2/13/08)--Members at more than 100 credit unions across West Virginia can be thankful their credit unions have managed to avoid the subprime mortgage problems that cut profits of many lenders in the state, says the West Virginia Credit Union League. Ken Watts, league president, told the state's largest newspaper that the league has kept a keen eye on the mortgage problem to make sure members aren't affected (Charleston Gazette Feb. 10). In fourth quarter, Huntington Banks lost nearly $240 million through a relationship with subprime lender Franklin Credit Management Corp., noted the newspaper. Rich Schaffer, vice president of the league, said the state's credit unions traditionally hold large amounts in reserve to protect against bad loans. West Virginia typically has the highest ratio of net worth to assets when compared with other Mid-Atlantic states. As of last June 30, West Virginia had a 12.14% ratio, compared with 11.4% for credit unions nationally. Also, Watts said, credit unions' historically haven't made mortgage loans. In the state's credit unions, mortgage loans make up a little over one-third of total loan volume. Still, the state's mixed economy, with an ever-present threat of layoffs, means managers are extra vigilant about who they lend money to, Schaffer said. Watts noted concerns about consumer confidence--how it trickles down to credit unions--and about whether consumers will borrow. Credit unions' personal service will turn to their advantage in the economy, Watts said. They know their members better and can offer loans only to their members. Watts also noted that while credit unions aren't growing hugely, they do give back to their communities, through scholarships and more.

Woman arrested after depositing meth in ATM

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BREMERTON, Wash. (2/13/08)--An 18-year-old member of Kitsap CU mistakenly deposited a bag of methamphetamine into her account at an ATM at the credit union, according to court documents filed in Kitsap County Superior Court. An employee of the $688.5 million asset, Bremerton, Wash.-based credit union told police a bag containing suspected methamphetamine was found in the woman’s deposit envelope (Kitsap Sun Feb. 11). The woman admitted to using meth when contacted by police, and said she may have accidentally put the bag containing the drug into her deposit envelope when she reached into her pants pocket to get cash, police documents indicated. After the bag tested positive for meth, police arrested her Thursday. She was charged Friday with one count of possession of meth.

Centrix hearing on expedited discovery motion is today

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DENVER, Colo. (2/13/08)--A non-evidentiary hearing in the subprime auto lender Centrix Financial bankruptcy case will be held today about a motion asking the judge to reconsider her order granting expedited discovery in the case. The telephone conference hearing before Judge Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado is set to begin at 1:30 p.m. MST and will likely involve scheduling further meetings. A debtors committee, representing the several Centrix-affiliated companies, filed an objection Monday to a motion filed Friday by the Ad Hoc Committee of Credit Unions, a group of creditors. On March 27, 2007, the Ad Hoc Committee of Credit Unions filed a motion for administrative expenses for making a substantial contribution in the cases. The debtors committee objected but also began settlement negotiations with the Ad Hoc Committee to try to avoid more litigation expenses, according to the debtors committee filing. During the negotiations, which continued throughout 2007, the debtors committee said it believed the administration matters could also be resolved consensually. It was surprised when the Ad Hoc Committee contested the contribution motion but began to prepare for a hearing and drafted discovery requests. The Ad Hoc Committee said it couldn't compile the information requested within 14 days and asked the judge to reconsider her expedited-discovery order. The committees were formed because there were so many debtor companies and so many credit unions represented as creditors in the bankruptcy case. In another development, a letter to the court from the regional director of the Employee Benefits Security Administration, withdrew the U.S. Department of Labor's claims related to Centrix Financial's 401(k) plan. The Secretary of Labor had filed a proof of claim on Jan. 8, 2007, to protect the interests in the plan and any participants who incurred losses, according to court documents. On July 11, 2007, the fiduciaries of the company's plan "restored all losses that may have been incurred by participants and paid the full amount" of the claim, the letter, which was received by the court Feb. 6. Meanwhile, trade press have reported that the insurer for Centrix Financial, Lyndon Property Insurance, has sued about three dozen credit unions alleging they worked with Centrix to commit insurance fraud by not reporting all Default Protection Insurance (DPI) claims. The credit unions, reported Credit Union Journal Monday, have asked the bankruptcy judge for a jury trial.

Arizona CUs collect signatures for 08 candidates

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PHOENIX (2/13/08)--The Arizona Credit Union League and member credit unions collected signatures for U.S. Reps. Jeff Flake (R-6) and Raul Grijlava (D-7) Super Tuesday, Feb. 5, on behalf of petitions for 2008.
Among the Arizona credit union people who collected signatures for candidates to appear on the 2008 election ballots were these Desert Schools FCU employees: from left: Kelly Tylwalk, Meredith Boggs, and Matt Osborn. (Photo provided by the Arizona Credit Union League)
Twenty-five credit union volunteers collected more than 450 signatures at polls in Gilbert, Chandler and Litchfield Park. Flake expressed his appreciation through an e-mail to Austin De Bey, league vice president of government affairs. State law requires all federal and state candidates to collect signed petitions to be placed on the ballot. The petitions need to be signed by registered voters from the party of the candidate or independent voters who reside in the represented district.

CU System briefs (02/12/2008)

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* TOLEDO, Ohio (2/13/08)--U.S. Rep. Marcy Kaptur (D-Toledo), a member of two credit unions, praised Ohio credit unions' financial education efforts during the launch of the Ohio Credit Union League's financial education initiative Monday in Toledo. The initiative is called MoneyAndStuff. Bob Tracy, CEO of TPS CU, Toledo, said credit unions have educated more than 20,000 students in 200 schools about finances. Also on hand for the launch at Toledo Bowsher High School were State Sens. Teresa Fedor (D) and Mark Wagoner (R); State Rep. Barbara Sears (R); school principal Larry Black; and credit union leaders. (Photo provided by the Ohio Credit Union League) … * ARVADA, Colo. (2/13/08)--The Credit Union Association of Colorado and the Credit Union Association of Wyoming (CUAC/CUAW) have promoted Michael O'Neill, CUAC/CUAW's Bank Secrecy Act compliance specialist, to director of member services. The promotion will be effective at the end of February. With more than 17 years' experience in compliance, strategic planning, and finance areas, O'Neill served as an association consultant for three years. He also has served as loan manager for Aurora FCU, a personal banker with US Bank and as assistant bank examiner with the Federal Reserve Bank of Denver. O'Neill also was chairman of the Supervisory Committee of UNIWYO FCU, Laramie, Wyo. … * BOSTON (2/13/08)--The National Association of State Credit Union Supervisors (NASCUS) conducted its second 2008 regional regulators' meeting in Boston on Feb. 8. NASCUS management and Chairman George Reynolds of Georgia met with regulators from Connecticut, Massachusetts, Maine, Pennsylvania, Rhode Island and Vermont at the offices of the Massachusetts Division of Banks, the meeting's co-host. Discussion focused on current economic challenges, effects of the subprime-lending market, credit quality, member business lending and unrelated business income tax (UBIT). The remaining meetings will be in Chicago on June 11 and Nashville, Tenn. on Sept. 18. NASCUS already held a regional meeting in San Francisco in January … * SAN JOSE, Calif. (2/13/08)--The Mexican American Community Services Agency Inc. (MACSA) received 10 computers donated by Walnut Creek, Calif.-based Pacific Service CU. The computers--Dell PCs with Pentium 4 processors and 15-inch flat screen monitors--will go to MACSA's youth centers in San Jose and Gilroy for after-school programs. More than 2,500 youth will have access to them. In the photo, Pacific Service CU Chairman Charlie Diaz (second from left) meets with MACSA staffers, from left: MACSA's Alex Ontiveros; Aurora Cepeda; CEO Olivia Soza-Mendiola; and Yvette Castro-Farias. (Photo provided by Pacific Service CU) …

Alliance CU hasnt had a foreclosure in years

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FENTON, Mo. (2/13/08)--Alliance CU, Fenton, Mo., reported a record year in 2007 for mortgage lending, despite the housing market crisis, and said it hasn’t had a foreclosure in years. “Our loan officers take great measure to ensure that our members are placed in a mortgage product that they understand and makes sense for them,” said Becky Smith, Alliance mortgage loan manager. A large percent of the credit union’s new home loans were sourced from a current member referral, said Dennis Sommer, Alliance president/CEO. The average home loan is six to seven years, so an adjustable loan designed to stay at a low fixed rate for 10 years makes sense for many individuals. If a member decides to stay in the loan longer than the fixed rate term of three to ten years, annual adjustments will not exceed 2% of the first year or 1% every year thereafter, with a lifetime cap of 5%, the credit union stated. Alliance offers local processing and servicing, adjustable-rate mortgages that do not adjust during the fixed period, no up-charge for jumbo loans, no pre-payment penalties and no escrow requirement.

CUs VITA sites help claim 6 million in tax credits

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RALEIGH, N.C. (2/13/08)--State Employees’ CU (SECU) and local Government FCU (LGFCU) have saved North Carolina residents $6 million in tax credits since mid-January by serving as Internal Revenue Service (IRS) Volunteer Income Tax Assistance (VITA) sites.
From left: Secretary Reginald Hinton, North Carolina Department of Revenue; Roger Burton, IRS territory manager in the Carolinas; Peggy Gavaghan, area director of Stakeholder Partnerships Education and Communication, IRS; U.S. Rep. David Price (D-4th); and SECU Board Chairman Shirley Bell. (Photo provided by State Employees’ CU)
The two Raleigh credit unions made the announcement Monday at SECU’s Parkway Branch--a VITA site--adding that they also have saved members nearly $700,000 in tax preparation fees. The VITA program offers free tax assistance to people with low-to-moderate incomes and serves North Carolina residents with household incomes of $40,000 or less. Two SECU employees at each branch location are trained as VITA representatives to prepare and electronically file basic tax returns. The focus of the program is to assure that eligible North Carolinians receive special credits such as the Earned Income Tax Credit and the Child Tax Credit. Attending the announcement were U.S. Rep. David Price (D-4th); Secretary Reginald Hinton, North Carolina Department of Revenue; Peggy Gavaghan, area director of Stakeholder Partnerships Education and Communication for the IRS; Roger Burton, IRS territory manager in the Carolinas; Jennifer Cohen, deputy chief of staff with the North Carolina Department of State Treasurer; and SECU’s Board Chairman Shirley Bell. Price commended both credit unions on their efforts to provide an alternative to high interest refund anticipation loans.

Governor NCUA chairman to highlight Iowa CUs conference

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DES MOINES, Iowa (2/13/08)--Iowa Gov. Chet Culver and National Credit Union Administration (NCUA) Chairman JoAnn Johnson will be the keynote speakers at the Iowa Credit Union League’s Legislative Issues Conference Feb. 19 at the Embassy Suites in Des Moines. Gov. Culver will share his legislative priorities, and Iowa native Johnson will discuss the hot topics and priorities for NCUA in 2008. Iowa credit union attendees also will hear from President George W. Bush’s former political director and Dubuque, Iowa, native Sara Taylor. And a state legislative panel will help attendees learn more about key issues facing lawmakers. Also, Michael Fitzgerald, state treasurer, will share information on the Small Business Linked Investments for Tomorrow Program, which assists small-business owners in accessing capital. Credit union attendees, Iowa legislators and members of Iowa’s congressional delegation have been invited by the Iowa league to attend a reception Feb. 19.

Bill would delay Arizona payday loan ban

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PHOENIX (2/13/08)--An Arizona lawmaker has proposed a bill, Senate Bill 1239, that would push a payday lending ban in the state back by two years. Under current law, payday lenders are scheduled to shut down in 2010. The proposed bill would give lenders until 2012 to close their doors (Arizona Daily Star Feb. 12). During the interim, the Department of Financial Institutions would study the loans made by payday lenders and the amount of money they collect. Sen. Robert Blendu (R-Litchfield Park), who proposed S.B. 1239, said the extra time might convince legislators to overturn the payday lending ban. Though Blendu said he is not intending to overturn the ban, he said that payday lenders serve a purpose and he wants to see if “there’s a legal place for them in Arizona,” he told the Daily Star. State Rep. Marian McClure (R-Tucson) disagreed and said payday lenders are an “equal opportunity predator.” Banks and credit unions offer small loans with reasonable interest rates, she said. The state Senate Committee on Financial Institutions, Insurance and Retirement will conduct a hearing on Blendu’s bill Monday.

BizKid to air in Indiana through foundation grant

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INDIANAPOLIS (2/12/08)--The Indiana Credit Union Foundation (ICUF) has provided a grant so BizKid$ can air on all eight of Indiana’s PBS stations. Many stations began broadcasting the show in January. The stations are located in Bloomington, Evansville, Fort Wayne, Indianapolis, Merrillville, Muncie, South Bend/Elkhart and Vincennes. “Indiana’s Credit Unions” will run two 15-second spots adjacent to the shows in each market. The stations also will offer “tune in” promotional mentions with some stations putting information on their websites, running ads in printed program guides and promoting the show locally. “To be part of the group that is bringing quality programming with a financial focus to young people across the country is exciting,” said ICUF Chairman Barbara Berghoff. “And to help bring the show to viewers throughout the state of Indiana on behalf of our state’s credit unions is tremendous.” The ICUF is one of several national sponsors to help produce the 26 episodes of BizKid$. A coalition of 132 credit unions, leagues, national and league foundations, affiliated system organizations and service providers across the nation are sponsoring the program. BizKid$ uses kids as real-life examples to teach fiscal responsibility. The show is produced by the creators of “Bill Nye the Science Guy” and Junior Achievement Worldwide.

Regulator Associate directors have some responsibility

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OLYMPIA, Wash. (2/12/08)--Washington state-chartered credit unions who want to add “associate” nonvoting board members to their board of directors must ensure that associates meet all of the same statutory requirements that apply to full board members, says the state regulator. This information was sent in an interpretive letter last month by Linda Jekel, director of credit unions at the Washington State Department of Financial Institutions (DFI), in response to a request for guidance from state-chartered credit unions. “Associates must meet all of the same statutory requirements for fiduciary duty, confidentiality, meeting attendance, and avoidance of conflict of interest that apply to full board members,” Jekel wrote. “A state-chartered credit union wishing to utilize associate board members must vote to amend its bylaws to include associates, and delineate the limits and conditions under which they serve.” Associate board members are a growing trend at some U.S. credit unions, but unlike elected board members, they are nonvoting, are appointed by the board, rather than elected by members, and may be appointed for shorter terms than elected board members, Jekel wrote, adding that many serve for one-year terms. Some credit unions believe that having associates on their boards helps with recruitment and retention of qualified full board members, by acting as a training program, Jekel wrote. Associates can help with succession planning, can efficiently replace elected board members who are no longer able to serve, and could provide useful back-up and business viability in the event that a disaster--such as avian flu--reduces the board, she added. However, problems can result from adding associate board members, Jekel wrote. “Care should be taken to assure that associates are truly qualified, representative of the credit union’s membership, and not merely the buddies of current full board members,” she added. “Prudent management practices require that associates be adequately screened and trained and that they acquire a basic understanding of Washington State credit union law. Associates may need to be covered by insurance, just like full board members.”

Southwest Corporate webinar discusses portfolio revenues

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PLANO, Texas (2/12/08)--Southwest Corporate plans a webinar later this month to provide member credit unions with an overview of its investment portfolio, financial results, and related credit risk management and oversight process. The date and time will be announced soon, said President/CEO John Cassidy, in a special notice from the corporate, prompted by press reports of the deteriorating mortgage market and its effect on U.S. Central. He noted the corporate continues to have confidence in U.S. Central and its financial strength. Last week, Standard and Poor’s changed its rating for U.S. Central FCU to AA+ from AAA. Fitch Ratings reaffirmed the credit union’s AAA rating one week before. Standard and Poor’s change aligns U.S. Central’s rating with the same AA+ rating it has held from Moody’s, Cassidy said. About 95% of U.S. Central’s long-term marketable securities are rated AAA, with the remaining 5% rated AA. The AA+ rating is the second-highest rating possible for a financial institution. After the mortgage market began to deteriorate, Southwest Corporate began publishing monthly financial reports for its members last fall. The reports are available on Southwest Corporate’s website.

IRnet surpasses 2 billion expands to Peru

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MADISON, Wis. (2/12/08)--World Council of Credit Unions’ (WOCCU) International Remittance Network (IRnet) last year surpassed $2 billion in total remittance transactions since its inception in 2001. It also recently expanded its program to Peru by adding 11 credit unions with 31 points of service in the country. With the addition of Peru, credit unions in 10 countries now distribute remittances with IRnet. More than 1.5 million transactions in 2007 carried $578 million across borders, bringing the total number of transactions performed through IRnet to more than five million. There were 128 U.S. credit unions offering Vigo money transfers through WOCCU’s program at year-end 2007. “Three billion dollars in remittances were sent to Peru last year,” said Manuel Rabines, second vice chairman of WOCCU and general manager of Federacion Nacional de Cooperativas de Ahorro y Credito del Peru (FENACREP). “Offering remittances through credit unions is a way to attract new members and expand product development. “For example, Peruvians living here and abroad want to purchase land for building homes and need affordable ways to finance their children’s education. They can do this with access to remittance-linked products through credit unions,” he added. WOCCU has formed strategic alliances with Vigo, MoneyGram and Coinstar--all established money transfer organizations--so credit unions can offer members and non-members affordable options for sending and receiving remittances via IRnet. Consumers can perform not only credit union-to-credit union transactions, but also can send to or from retail outlets offering remittances through the same money transfer organization. The security, convenience and affordability of IRnet is an attractive way to introduce the unbanked to credit unions around the world and add value to member service, especially when credit unions link their products to incoming remittances, said WOCCU. For a list of credit unions and networks participating in the IRnet program, use the link.

Maryland fin lit task force bill to have two CU seats

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ANNAPOLIS, Md. (2/12/08)--A Maryland financial literacy task force would have two credit union seats, if pending legislation is approved. One representative would be from a state-chartered credit union and the other from a federal-chartered credit union headquartered in Maryland (Focus Newsletter Feb. 11). The bill was introduced in the Maryland House of Representative and the State Senate. Sen. C. Anthony Muse (D-Prince Georges County) introduced the Senate version Feb. 1, said the Maryland and District of Columbia Credit Union Association. The bill was assigned to the Education, Health and Environmental Affairs Committee. State Del. Dana Stein (D-Baltimore) introduced an indentical bill in the House last week. The bill, “The Task Force to Study Mandatory Financial Literacy Education in Maryland,” would create a task force to improve financial education in Maryland public schools.

Kirkwoods CU mourns members reopens Thursday

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KIRKWOOD, Mo. (2/12/08)--Kirkwood (Mo.) Municipal CU, which lost three members in Thursday's shootings at Kirkwood City Hall, is back in its City Hall location but will resume full hours on Thursday, according to the Missouri Credit Union Association. The shootings, which killed five people, closed City Hall, and the credit union had to relocate to temporary quarters in the city's Parks Department building. City Hall is scheduled to reopen today. The credit union will have special hours this week so employees can attend memorial services for the victims who were members: Kirkwood Police Officers William Biggs and Tom Ballman, and Public Works Director Kenneth Yost. Yost's service was Monday. Today is Ballman's service, and the credit union will reopen at the City Hall location from 12:30 p.m. to 3:30 p.m. On Wednesday, it will be open from 11:30 a.m. to 3:30 p.m. Credit Union President Bob Dielschneider expects to resume normal hours on Thursday and Friday. The shootings occurred when Charles Lee "Cookie" Thornton arrived at a City Council meeting and began shooting, killing the police officers and three city officials. Thornton was shot to death by police. The mayor, who was shot twice in the head, remains in critical condition.

100 increase in new phish targets reported

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ARLINGTON, Va. (2/12/08)--Credit unions and other financial institutions continue to be top targets for phishing attacks, accounting for nine out of 10 new brands targeted during fourth quarter last year, says a new report. In 2007, more than 900 new brands were first-time targets of phishing attacks. That's more than a 100% increase in new targets compared with new targets in 2005 and 2006, said Cyveillance, a cyber intelligence company, in its latest "Online Financial Fraud and Identity Theft Report." Broad-based phishing attacks aimed at new companies and industries reached its high point of 431 during first quarter 2007 then decreased significantly the rest of the year. About 106 new brands were targets in the fourth quarter. The data indicates the attacks were more focused throughout 2007, repeatedly targeting prominent brands in key industries, said the Arlington, Va.-based Cyveillance. During the year, phishing attacks became more sophisticated and evolved to incorporate legitimate brand names and URLs. Attacks leveraging compromised websites grew to 51% in fourth quarter from 38% in third quarter. The use of compromised websites complicates the attack shut-down process for the targeted organization because it requires specific URLs be removed without disrupting the site's legitimate operations. Also, the use of targeted brands within the URL of phishing sites increased to more than 50% of all attacks. Phishers often include the brand in the URL to help legitimize their spoofed pages. In addition to changes in phishing scams, the report also identified a 30% increase in malware attacks targeting users outside the U.S. Attacks against U.S. citizens decreased to 45% in the fourth quarter from 75% in first quarter. France and Japan saw significant increases in malware attacks. To download the report, use the resource link.

Three-way merger means competition for Canadas largest CU

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EDMONTON, Alberta (2/12/08)--Three of the four largest credit unions in Alberta, Canada, are proposing a three-way merger that, if successful, would produce an $8.5 billion asset credit union (The Edmonton Journal Feb. 9). Servus Credit and Common Wealth Credit, both credit unions in Edmonton, and Community Savings, a credit union in Red Deer, said Friday talks are underway and they could call for a membership vote on the proposal as early as March. The combined credit union would have 357,000 members, 1,825 employees and 95 branches. The fourth large Alberta credit union, First Calgary Savings, with 100,000 members and assets of $1.9 billion, has declined to join the proposed merger. Canada's largest credit union is the $12.3 billion asset Vancouver City Savings in Vancouver, British Columbia. It has 2,300 employees and 57 branches. Contributing to the merger plan is potential competition with VanCity and other British Columbia credit unions under a provincial free-trade agreement between British Columbia and Alberta. The agreement will take effect in April, 2009. British Columbia-based credit unions have competitive advantages because they can operate with less capital and go into fields denied to Alberta credit unions--such as insurance brokerages, reported the article.

IDow Jones NewsI CUs in good shape to make loans

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NEW YORK (2/12/08)--Most credit unions have strong balance sheets and near-record capital levels, which allow them to make any type of loan despite the subprime crisis, Bill Hampel, chief economist for the Credit Union National Association, told Dow Jones Monday. While some credit unions have experienced “collateral damage” due to the subprime turmoil, most are “going to make any loan they possibly can make,” Hampel told the paper (Dow Jones & Company Feb. 11). Executives from three credit unions also were quoted in the article. Because credit unions want to hear the story behind why members have credit problems, credit unions are often more flexible in making loans because they are “story” loans, Steve Renock, executive vice president, Orange County Teachers FCU, Santa Ana, Calif., told the paper. Chris Shockley, executive vice president, Virginia CU, Richmond, Va., told the paper that his credit union tries to help its members before they default on loans. Virginia CU has an in-house collections department to contact borrowers after they’ve fallen behind on a payment or two. HarborOne CU, Brockton, Mass., has converted 15,000 square feet of office space into a “multicultural banking center” that features classrooms and offices for social service agencies to help members and nonmembers alike, according to James Blake, president/CEO of the credit union. By emphasizing education, credit unions help equip consumers to avoid mortgage gimmicks and use mainstream financial products, Blake told the paper. Through the refinancing of existing mortgages and educating consumers who are getting ready to take out mortgages, HarborOne will build trust and hopefully create future members, he added. Because credit unions “offer more personalized service” than banks do, they “can make the difference between members getting approved and refinanced out of a loan,” Allen Fishbein, director of housing and credit policy for the Consumer Federation of America, told the paper.

CU System briefs (02/11/2008)

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* ARVADA, Colo. (2/12/08)--The Credit Union Associations of Colorado and Wyoming (CUAC/CUAW) is preparing to move to new headquarters later this year. In an effort to "go green," it is recycling its old electronic technology and computer equipment in partnership with Luminous Recycling. "With the limited life expectancy of today's computers and electronics, finding ways to recycle the equipment in a practical and environmentally responsible manner is critical," said Dale Rupp, director of information technology at CUAC/CUAW. John Dill, CUAC/CUAW president/CEO, said disposing of obsolete electronics is one example of the associations' commitment to supporting "green" alternatives. Here, Rupp, left, and Rob Stahl, lead technical at CUAC/CUAW, organize old computers, printers, typewriters, scanners, cell phones and keyboards for pickup. (Photo provided by the Credit Union Associations of Colorado and Wyoming) … * CHARLOTTE, N.C. (2/12/08)--Charlotte Metro CU isn't as high profile as large bank competitors, but the $146.2 million asset credit union is working to change that. It ran two new ads during the Super Bowl. Last year, the credit union launched a campaign featuring Muggsy Bogues, the diminutive former NBA star. In the ad, he acted as a proxy for the credit union, shooting and scoring over a trio of taller "big banks." This year's ads feature Bogues, Coach Sam Vincent and rookie forward Jared Dudley of the Charlotte Bobcats. The credit union has a marketing partnership with the team, and Bogues is a member of the Bobcats' radio team (Charlotte Business Journal Feb. 8) … * SAN DIEGO and EDISON, N.J. (2/12/08)--Pinnacle FCU, a $173 million asset credit union based in Edison, N.J., has joined the American Consumer Council as a sponsoring member, representing members in the national consumer organization's New Jersey service region. Pinnacle will offer ACC members financial and educational services to ACC members in the region as well as low-cost financial products and services when they open a savings or checking account. Pinnacle serves employer groups throughout New Jersey, New York and Pennsylvania … * NORTHVILLE TOWNSHIP, Mich. (2/12/08)--Beth Troost, education partnership coordinator at Community Financial Members FCU, has been hired as financial education coordinator for the Michigan Credit Union League, effective Feb. 18. The new position will work with Michigan-based and national financial literacy initiatives such as Michigan Jump$tart Coalition, the National Endowment for Financial Education (NEFE) and the league's Financial Literacy Legislative Challenge. Troost has with the credit union since 2002, developing and conducting classroom presentations, establishing relationships with community service organizations and helping expand its student-run credit union program to 26 schools (Michigan Monitor Feb. 11) … * NORTHVILLE TOWNSHIP, Mich. (2/12/08)--Michigan State Sen. Ray Basham (D-Taylor) and 15 credit union people braved winter weather to attend the Michigan Credit Union League's (MCUL) Downriver Chapter Legislative Breakfast Feb. 4. Discussion centered on issues related to Michigan credit unions and the Downriver community. The breakfast was a solid grassroots event feature substantive conversation and good relationship building, Patrick La Pine, MCUL executive vice president, told the Michigan Monitor (Feb. 11). Shown here with Sen. Basham are, from left, Cassandra Velasquez and Susan Rafko Bayer of Monroe Area FCU. (Photo provided by the Michigan Credit Union League) …

Thirty lawmakers attend Idaho leagues GAC

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BOISE, Idaho (2/12/08)--The Idaho Credit Union League held its 10th Annual Governmental Affairs Conference (GAC) Thursday in Boise with more than 30 legislators joining more than 70 credit union professionals and volunteers statewide. Financial education for youth was one of the conference’s main topics. John Parfrey, director of the National Endowment for Financial Education’s (NEFE) High School Financial Planning Program, spoke about the league’s efforts to bring the free, non-commercial curriculum to all high school students statewide. State Sen. John Goedde (R-Coeur d’Alene), chair of the state education committee, and State Rep. Marge Chadderdon (R-Coeur d’Alene), who serves on the state’s education and business committees, offered their support to increase the visibility of the program to Idaho’s teachers. The full-day conference included call-ins from all of Idaho’s congressional delegation, who each addressed credit union-related issues and took questions from the audience. Michele Johnson, director of legislative affairs at the Credit Union National Association (CUNA), reported on national issues. State credit union leaders will travel to Washington, D.C., in early March for the CUNA GAC to share their views and concerns on the Hill.

Banks to hike rates opportunity for CUs says PCUA

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HARRISBURG, Pa. (2/11/08)--Credit unions, get ready to take advantage of an opportunity. Many banks have started raising fees on their services to offset losses from the collapsing real estate market. Banks will want to make up the income and will be much more aggressive at raising prices, according to William McCracken of Synergistics Research. Everyone will see some price increase unless they have perfect credit, he told USA Today (Feb. 7). That means an opportunity for credit unions to step in and provide services, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Feb. 8). "This presents an opportune time for credit unions to promote their services and low rates and fees to attract new members and build member loyalty through account relationships," said PCUA in its newsletter. Bank of America says it is raising rates on some card accounts based on a periodic review of consumers' risks, reported USA Today. Other banks are raising rates on some credit cards, boosting late fees, lifting caps on balance-transfer fees and increasing ATM fees for foreign transactions. Lenders collected $18.1 billion in penalty fees last year--on credit cards alone, a 69% increase since 2003, consulting firm R.K. Hammer told the newspaper. The fees likely will increase an additional 5.5% this year because many consumers struggling to pay bills are hit with late fees. For an example of how credit unions can take hold of the opportunity, ready "Fairwinds' expansion result of 'flight to quality'" in System News.

Report CUs a safe haven notes cautious mortgage lending

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BOSTON (2/11/08)--Credit unions are a safe haven in today's volatile consumer loan market, says an article in TheStreet.com (Feb. 7). Credit unions have avoided much of the subprime lending crisis by not offering exotic loans and teaser rates, it added. The article, "Credit Unions Give Banks a Run for Their Money," is based on a report by the Aite Group, a Boston research firm. It discusses the credit union difference, and notes that credit unions are expanding in membership while consolidating in numbers. Credit unions also are expanding in services, such as mortgage loans. Credit Union National Association Chief Economist Bill Hampel told the publication that credit unions are being more cautious with their loans as a result of the crisis that developed in recent years in an easy lending era. Of credit unions offering mortgage loans, 91% say they are seeing greater overall volume growth in mortgage lending than in any other consumer loan, the article noted. Bethpage (N.Y.) FCU, told the publication that offering a Home Loan Payment Relief mortgage (HLPR) helps it expand. The loan targets first-time homebuyers with good credit and who make less than 120% of the median income in the area. Another area of expansion addressed: credit cards. It quotes CUNA's midyear report, which said credit card loan flows grew steadily over five years until they reached 12.2% in June 2007. Another way credit unions grow is by offering innovative products to attract members. Fairfax County FCU discussed its Gen Y Extreme Checking Account, which offers a free rewards debit card and six free foreign ATM transactions, and more. The credit union promoted it through a YouTube video contest. Use the link to access the article.

CU relocated after members die in City Hall shooting

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ST. LOUIS (2/11/08)--Kirkwood (Mo.) Municipal CU hoped to be back in its City Hall location today after it had temporarily relocated following a deadly shooting at the Kirkwood City Hall Thursday night. Three of the people killed were members of the credit union, according to the Missouri Credit Union Association (MCUA) (CourierNet Feb. 8). The credit union was closed when Charles Lee "Cookie" Thornton arrived at a City Council meeting and began shooting. Police say he killed five people, including two police officers and three Kirkwood city officials, before police returned fire and killed him. Two others were injured. Kirkwood Mayor Mike Swoboda was shot in the head and is in serious condition. A reporter attending the meeting was shot in the hand. Three of the people killed, including Kirkwood Police Officers William Biggs and Tom Ballman, and Public Works Director Kenneth Yost, were members of the credit union. "Thanks to everyone for their concern and support and prayers for the victims," said Bob Dielschneider, credit union president. Dielschneider said Friday he hoped the credit union will be back in its City Hall by today.

Hoosman explains CU difference to ISt. Louis Post-DispatchI

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ST. LOUIS (2/11/08)--Vantage CU President/CEO Hubert Hoosman Jr. turned a personal profile into an opportunity to tout the credit union difference in the St. Louis Post-Dispatch (Feb. 8). Friday's article, "Credit union chief follows a democratic formula," started with the personal background, including Hoosman's leadership in the $2 million statewide campaign for the Martin Luther King Jr. Memorial in Washington, D.C. But he was soon talking about what makes his credit union unique: its not-for-profit, member-owned structure. "It doesn't matter if you have $1,000 or $1 in your account, you have the same right as other members of the credit union," Hoosman told the newspaper. "You have the ability to take major action on decisions of the credit union. With a bank, you don't." A bank, he said, is "all about the bottom line and returning a profit for its investors." Among the points he made:
* Credit unions have the National Credit Union Share Insurance Fund and have never had to ask the government for anything while banks and savings and loans have had bailouts on several occasions. * Community banks are the main competition. "With community banks, you get four or five investors who pool their money and open a small bank. They want to build their assets for a major bank to buy them out in five years." A director wanted to know why the credit union didn't have such a plan. "Because we are not setting ourselves up to be bought. We can't be bought. Our charter doesn't allow it." * The volunteer board structure means board members have "no advantage over other members. No perks, no year-end bonuses, nothing. I think it's the best model of democracy that exists in the country. We walk the walk."
Hoosman told the newspaper that credit unions "are the Southwest Airlines of the consumer financial world." Vantage CU is a $509 million asset credit union in Bridgeton, Mo. Use the link to access the full article.

Financial literacy theme of Ohios consumer protection week

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DUBLIN, Ohio (2/11/08)--The Ohio Credit Union League is partnering with Ohio Attorney General Marc Dann and other consumer service entities to host events during National Consumer Protection Week March 3-7. The league is reserving tables at each of the week’s events to distribute information about its MoneyandStuff initiative and local credit unions. It encouraged credit unions in the state to participate by scheduling volunteers to work at the tables and provide information. Events will be held:
* March 3, Tolles Career and Technical Center, Plain City; * March 4, Wright State University, Dayton; * March 5, Colerain Township Senior Center, Cincinnati; * March 6, Tower City Center, Cleveland; and * March 7, Jewish Community Center, Youngstown.

Bergeron Credit insurance licenses affect all Vermont CUs

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SOUTH BURLINGTON, Vt. (2/11/08)--Association of Vermont Credit Unions (AVCU) President Joe Bergeron informed state credit union CEOs and managers last week that credit insurance licensing regulations are about to be implemented. The regulations come after more than two years of work from the insurance arm of the state regulator--the Banking, Insurance, Securities, and Health Care Administration (BISCHA). BISCHA sent a final version of the regulations to the Secretary of State for official filing. A review by the statehouse’s Legislative Committee on Administrative Rules (LCAR) is all that remains before the planned April 1 effective compliance date (Newslines Express Feb. 8) . Under the new regulations, credit unions, banks, car dealers and others selling credit-related insurance would be required to attain a limited line license for their entity and/or employees--such as loan officers--involved in the sale of insurance. Previously, financial institutions were exempt from licensing requirements. Additional disclosure requirements and employee training also are part of the new regulatory mandate. CUNA Mutual Group’s (CMG) legal department has worked closely with AVCU during the past two years to influence the impact of BISCHA’s credit insurance license regulations on credit unions. Following the Feb. 20 LCAR review, credit unions will have one month to prepare for compliance. On behalf of credit unions, AVCU has sought from BISCHA an extension of time for initial compliance. AVCU has provided to member credit unions these details:
* An overview and Q&A of the limited Lines License Regulations; * Copies of the actual regulations from BISCHA; and * AVCU’s letter to BISCHA, requesting additional time for credit union compliance.
CMG is developing a compliance training program for all Vermont credit unions. AVCU continues to seek final details from BISCHA and will coordinate and provide compliance assistance. Soon, pending final release of the regulations, CUNA Mutual and AVCU likely will schedule a teleconference to provide further details to member credit unions.

Colorado CUs caucus participation up 300

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ARVADA, Colo. (2/11/08)--The Credit Union Association of Colorado (CUAC) reports that on “Super Tuesday,” state credit unions’ caucus participation was up by 300% statewide. With both Democratic and Republican caucuses taking place Feb. 5, CUAC coordinated volunteers throughout the state to either participate in the caucus process with their party or serve as an association caucus observer in their home precinct. The volunteers helped monitor the progress of the caucuses throughout the evening, giving local grassroots advocates insight into the happenings at caucus meetings statewide. “It was exciting to see the number of credit union grassroots advocates participating in their caucuses Tuesday night,” said Timothy Dore, CUAC senior vice president of government affairs. “The enthusiasm and interest of our membership was high and will continue to grow throughout the campaign season of 2008 as it progresses.” Precincts are the smallest political unit in the state and typically are held in homes, schools, churches or other locations within a neighborhood. There are nearly 4,000 precincts in Colorado.

Wisconsin league 3 CUs receive governors fin lit awards

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MADISON, Wis. (2/11/08)--Wisconsin Gov. Jim Doyle’s Council on Financial Literacy selected the Wisconsin Credit Union League and three credit unions to receive its 2008 Governor’s Financial Literacy Awards. They were among 10 organizations receiving the awards. The winners were selected from nominations by the council’s awards committee. Evaluations were based on: innovative implementation, demonstrated measurable results, collaboration with partners, and scope. Credit union winners included Altra FCU, Lacrosse; Community First CU, Appleton; and CoVantage CU, Antigo. “Credit unions have done a tremendous service for Wisconsin by providing teachers with free resources that accomplish the financial learning goals the state has defined as critical for future financial independence,” Gov. Doyle said. “The future of our state relies on the financial self-sufficiency of each new wave of graduates." Credit unions also "are enhancing Wisconsin’s economy by making people more knowledgeable about their own money,” he added. “We all benefit from that.” The council was created in 2005 to advise Doyle on how to improve the financial literacy of Wisconsin citizens.

Pet insurance expected to double by 2012

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JEFFERSONVILLE, Ind. (2/11/08)--PetFirst Healthcare, a nationwide provider of health insurance policies for dogs and cats, said it expects the $250 million pet insurance industry to double by 2012. A few credit unions offer this type of insurance. Operating similarly to human health insurance, pet insurance covers the costs associated with veterinary expenses. PetFirst plans include routine care such as yearly exams, vaccinations, flea control, and spay/neuter services. Also covered are x-rays, surgeries and hospitalizations that result from illness or injury (PR Newswire Feb. 7). PetFirst insurance plans are available to hundreds of thousands of employees through the $727.5 million asset Indianapolis-based Eli Lilly CU, the American Humane Association and Kroger Co. PetFirst announced a partnership in January with National Benefits Partners--a benefits wholesaler that provides voluntary benefits to more than 3,000 employers and three million employees. Pet insurance trends are imitating the human health insurance industry with obesity, cardiac arrest, hypertension and hypothyroidism seen as growing problems, PetFirst said. Two Colorado credit unions--Ent FCU and Air Academy FCU--began offering pet insurance in 2003 (News Now July 23, 2003).

CU System briefs (02/08/2008)

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* MIRAMAR, Fla. (2/11/08)--Stephen C. McGill has tendered his resignation as president/CEO of the $2.115 billion asset Eastern Financial Florida CU, effective immediately, announced its board Friday. Gary Lanier, senior vice president of finance and administration, will assume interim duties and report to the board's Executive Committee while the credit union conducts a search for a new CEO. McGill was with the credit union for 24 years and had been chief executive since 2004. During his tenure, the credit union increased its branch network, launched a commercial lending operation and expanded products and services. Board Chair Peterjohn Plummer thanked McGill for his service and wished him good luck, adding his contributions "will always be appreciated" … * MOLINE, Ill. (2/11/08)--An e-mail phish attempt offering members $50 to $80 to take an online "survey" has been shut down by IH Mississippi Valley CU, based in Moline. The fraudulent e-mails instructed recipients to answer a few questions, then asked for credit or debit card information. The $552 million asset credit union said the e-scam, which originated in Korea, began surfacing Thursday morning and was shut down immediately. The credit union does not initiate e-mails requesting confidential information, it told the Quad-City Times (Feb. 8) … * ROCKVILLE, Md., and WASHINGTON (2/11/08)--Rockville-based Montgomery County Teachers FCU has informed the Federal Deposit Insurance Corp. (FDIC) that counterfeit checks related to a European lottery scam are circulating with the credit union's name. The bogus checks display its routing number but do not resemble authentic checks. Counterfeit items are tan with ornate design borders with brown squares in each corner. Authentic checks are pink and gray with dark gray borders. The fake checks have the statement "The face of this document has a colored background on white paper" embedded in the top border and "The back of this document contains an artificial watermark--Hold at any angle to view" embedded on the bottom border. It also contains a padlock icon and an erroneous logo (a darkened rectangle with a tree image and "MCT Credit Union," said FDIC in its scam alert … * HARRISBURG, Pa. (2/11/08)--Pennsylvania Credit Union Association Board Chair Diana Roberts has announced that Paula Nihoff and Mike Kaczenski have been re-elected to their seats on the board. Nihoff, CEO of Healthcare First CU, Johnstown, represents District 5. Kaczenski, CEO of Sun East FCU, Aston, represents District 6. A mail ballot election will be held in District 9 to fill the seat held by Fran Muto, who is not seeking re-election. Nominees are Louise Lingenfelser, CEO of UGI Employees FCU, Wyomissing, and Rick Stipa, CEO, TruMark Financial CU, Trevose (Life is a Highway Feb. 4) … * WEST LAFAYETTE, Ind. (2/11/08)--Purdue Employees FCU has launched a mobile account service called PEFCU2Go. The Web-enabled service is powered by MShift and allows members to check account balances, transfer funds and pay bills using their cell phone or other mobile devices. Bill Connors, CEO of the $461.2 million asset credit union, said the credit union is committed to making financial transactons as easy and convenient as possible … * LOUISVILLE, Ky. (2/11/08)--An employee of Beacon Community CU has been charged with identity theft, according to the U.S. Attorney's Office (Kentucky.com and WHAS-TV Feb. 5). Jorge Felitas, 25, allegedly stole personal information from members at the $33.8 million, Louisville-based credit union. Then he and an accomplice, Yohan Villafana, 26, allegedly use the information to obtain credit cards in the members' name. They allegedly bought thousands of dollars of merchandise at Best Buy and made cash advances at ATMs. Arraignment is scheduled for later this month …

Fairwinds expansion result of flight to quality says CEO

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ORLANDO, Fla. (2/1//08)--Fairwinds CU unveiled a $25 million expansion plan expected to add eight branches across Central Florida this year, as members are increasingly seeking better quality in their financial services, the credit union said. The $1.463 billion asset, Orlando, Fla.-based credit union, the state’s sixth largest, will increase its operations by more than 20% with the expansion. This is the second year in row that Fairwinds has expanded, as it opened seven branches in Central Florida in 2007 (Orlando Sentinel Feb. 8). Fairwinds has benefited from turmoil in the U.S. financial sector, and has seen a “flight to quality” as the credit union has gained members who became unhappy with services offered by other financial institutions--particularly mortgage and savings needs, said Fairwinds President Larry Tobin. Despite the spike in new business, Fairwinds’ branching strategy is primarily constituted to provide greater convenience to its existing members, Tobin said. The new branch locations were selected based on their proximity to current members, he added. Fairwinds remains a conservative credit union and does not think its expansion is risky, given the nation’s economic slowdown, Tobin said. The credit union’s high capital ratio suits it well in providing the best services possible to its members through branch expansion, he added.

Nominations open for annual CUSO innovation award

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NEWPORT BEACH, Calif. (2/11/08)--The National Association of Credit Union Service Organizations (NACUSO) is now accepting nominations for the 2008 Credit Union Service Organization (CUSO) Collaboration and Innovation Award from NACUSO members. The third annual presentation to the winning CUSO will take place April 28 during the NACUSO 2008 Annual Conference in Las Vegas. March 28 is the deadline for receipt of award nominations at NACUSO’s Newport Beach, Calif. office. NACUSO will acknowledge all CUSOs that submitted nominations at the annual conference. “NACUSO understands that collaborations and innovation are key success factors that can build strength and vitality in the credit union industry,” said Judy Sandberg, senior vice president of Gateway Service Group LLC and NACUSO board member. “We want to identify and recognize all examples of organizations that successfully used the collaborative model to advance the goals of our industry.”

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.”

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.

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.

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.

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 (KNBC.com 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).

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.”

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.

Weather affects CUs operations

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MADISON, Wis. (2/7/08)--Dozens of tornados, snowstorms, thunderstorms--you name it and credit unions in a number of states had to deal with it Tuesday and Wednesday. Credit unions reported little or no damage from being under the weather, although several experienced power outages and some closed operations in severe weather. Tuesday's storms killed at least 52 people--28 in Tennessee, 13 in Arkansas, seven in Kentucky and four in Alabama (MSNBC.com Feb. 6). Credit union leagues from seven states--Arkansas, Alabama, Mississippi, Tennessee, Kentucky, Kansas and Missouri--reported to CUNA Mutual Group yesterday morning that credit unions contacted were okay. The Mississippi Credit Union Association had been in contact with Dover Elevator CU, in Olive Branch, which is near Southhaven, Miss., directly south of Memphis, Tenn., said Amy Manley, corporation relations manager at the association. One of the tornados hit five miles from the credit union. "Elevator CU reported no physical damage to the credit union," she said. "However, the storm did affect the credit union's power and communication lines," which were being repaired Wednesday. Later the association's president reported the credit union was back in operation. One Arkansas credit union in Pope County was near an unconfirmed tornado sighting. The main damage in that state was in a northern area where there are no credit unions. The Tennessee Credit Union League said it had contacted all credit unions in the western part of the state, which bore the brunt of the tornado damages. There were a few power outages among credit unions in the Jackson area, but everyone appeared okay. Jackson is where Union University is located. The university took a direct hit from one tornado, which injured more than 50 students. While leagues in those states were checking with their credit unions about tornado damage, other states were bracing for the front to move eastward and a snowstorm was blowing through midwestern states. Ohio was expecting localized flooding from storms later Wednesday. That storm resulted in at least 10 inches of snow in southern Wisconsin and northern Illinois. The Credit Union National Association's Madison, Wis., offices, which began Wednesday with a three-hour snow delay, closed at 2 p.m. CST because of 10 inches of snow accumulated during the day.

9 of small businesses surveyed consider CU as PFI

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BOSTON (2/7/08)--While 9% of small businesses surveyed consider credit unions to be their primary financial institutions, 68% of credit unions are focusing their attention on building up their business products and services, according to an Aite Group study. The study, “How Can U.S. Credit Unions Survive in the Small Business Space?” indicated that credit unions’ top two information technology priorities over the next two years are commercial and business banking-oriented solutions. Credit unions also have plans in place to broaden their small-business product offerings and enhance their online capabilities. Succeeding in the small-business marketplace requires investing time and money, and offering the right products and online capabilities to meet the demands of small businesses, said Christine Barry, Aite Group research director and report author. "Many credit unions are at a crossroads: Most recognize the opportunities associated with targeting the small-business segment, but the level of importance and effort they plan to allocate to attracting small-business membership divides them,” she added. Credit unions should increase their information technology budgets for business initiatives and hire individuals that understand small-businesses needs, the study recommended. “The road ahead is not an easy one for credit unions, but those willing to take the necessary steps are likely to be greatly rewarded,” the study said. More than 50% of the credit unions surveyed have member bases consisting of less than 10% business. Eighty-one percent do not have a dedicated small-business banking offering but offer retail banking solutions to small businesses. Most credit unions are either maintaining a traditional credit union strategy, or shifting from traditional practices to a more commercial path, the study said. Credit unions in the first group are reaching out primarily to “mom-and-pop” businesses to focus on retail services. The second group hopes to capitalize on opportunities that small businesses could bring and plan to offer more services, the study said.

Washington breach-reimbursement bill passes committee

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OLYMPIA, Wash. (2/7/08)--The Washington Insurance, Financial Services & Consumer Protection Committee approved a bill on an 8-1 vote that would give financial institutions the ability to hold accountable businesses that handle and store unencrypted sensitive consumer information negligently. Sponsored by State Rep. Brendan Williams (D-22), HB 2838 now moves to the House Rules Committee for further consideration. “In the fight against identity theft, this is a big score for Washington consumers,” said John Annaloro, Washington Credit Union League president/CEO. “This bill provides incentives to financial institutions to proactively protect personal consumer information, including credit and debit card numbers.” The 8-1 committee vote was a surprise, considering the growing opposition to the legislation from retailers, restaurants, grocers, the National Federation of Independent Business and banks, said the league. “After negotiating at least four substantive draft versions of the legislation at this point, we’ve reached the crux of the issue--should negligent data breachers be held accountable for the costs incurred by a credit union trying to protect consumers from harm,” said Stacy Augustine, league senior vice president and general counsel. The Senate Financial Institutions and Insurance Committee is tentatively scheduled to consider companion bill SB 6425 this week. The Senate version of the bill is sponsored by State Sen. Rosa Franklin (D-29) and faces similar industry opposition, the league said.

Hoel to represent Norlarco on Public Service CU board

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DENVER (2/7/08)—Bob Hoel, former director of and now a fellow at the Filene Research Institute in Madison, Wis., and a former chairman of Norlarco CU, will serve on Public Service CU (PSCU)’s board of directors. Hoel joins the board after PSCU was awarded the right to acquire Norlarco CU’s assets by the National Credit Union Administration (NCUA). NCUA had placed Norlarco into conservatorship in May 2007 after the credit union lost money in construction loans in Florida (The Coloradoan Feb. 6). Hoel’s appointment will be official next month. His position was made possible because a board member resigned to make room for a Larimer County board member, PSCU President/CEO David Maus told the newspaper. Hoel, who chaired Norlarco’s board of directors from 1987 to 1991, said he will actively work to restore members’ faith in the credit union. The merger between Norlarco and PSCU is a “good thing” for Norlarco’s members. No money or equity was lost, he told The Coloradoan. The acquisition will add $230.5 million in assets, 100 employees, 42,000 members and six Larimer County branches to PSCU.

New Jersey league elects board officers

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HIGHTSTOWN, N.J. (2/7/08)--The New Jersey Credit Union League (NJCUL) elected new board officers Jan. 28. New board officers are:
* Chairman of the board: Steve Schlundt, president/CEO, Atlantic City Firemen’s FCU, Northfield; * Vice Chairman: Cindy Rein-Zima, president/CEO, Hamilton Horizons FCU, Hamilton; * Treasurer: Bob Steeves, president/CEO, Essex County Teachers FCU, Bloomfield; and * Secretary: Christina Olender, president/CEO, Parlin DuPont Employees FCU, Parlin.
Past Chairman Rina Pantano, who served in that capacity from 2005 to 2008, remains on the NJCUL board.

Missouri CU Association proposes dues reduction

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ST. LOUIS (2/7/08)--The Missouri Credit Union Association (MCUA) is taking steps to reduce dues for its member credit unions. At its Feb. 4 meeting, the MCUA board of directors voted to propose a reduction in membership dues through a new formula that will result in as much as a 17% reduction for some member credit unions. “We recognize the economic pressures and increasingly tight margins that credit unions face today,” said MCUA President/CEO Rosie Holub. “The league is adequately capitalized and in a position to demonstrate the cooperative spirit. The board felt it was appropriate to do what we can to help support those member credit unions that support us through their investment in the three-tier system. “This reduction will have a significant impact on a number of our smaller credit unions,” she concluded. Member credit unions will vote on the dues formula change at the MCUA annual business meeting April 1 in Jefferson City.

ICU Executive NewsletterI changes name to ICU360 NewsletterI

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MADISON, Wis. (2/6/08)-Credit Union Executive Newsletter is now the CU360 Newsletter, with access to online information. Published by the Credit Union National Association (CUNA), the newsletter brings the "who, what, when, where, why" of credit union management to credit union executives. By teaming up with CU360, CUNA's online research portal, CU360 Newsletter will provide research and advice for the credit union executive beginning with its Feb. 4 issue. Subscribers can receive content in both paper and online formats with access to the portal at cu360.cuna.org. This week's issue includes items on reverse mortgages, closing a branch, mobile banking, past government interventions in financial markets, and teen spending. For more information, use the resource link.

SandP assigns AA rating to U.S. Central

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LENEXA, Kan. (2/6/08)--Concern over values of mortgage-related securities in U.S. Central’s investment portfolio prompted Standard & Poor’s (S&P) yesterday to assign a long-term debt rating of “AA+” to the credit union. Previously, U.S. Central was rated “AAA.” S&P’s rating of U.S. Central’s commercial paper remained unchanged at “A-1+.” “U.S. Central is a healthy and profitable financial institution with $2.4 billion in capital as of Dec. 31, 2007, and access to more than $20 billion in available liquidity,” said U.S. Central President/CEO Francis Lee. To put S&P’s rating in perspective, Lee pointed out that the “AA+” rating is shared by only two other U.S. depository institutions--and only one other has a higher rating. “We believe S&P’s rating of U.S. Central is an acknowledgement of the continued strength of our balance sheet and our high liquidity position at a time of considerable uncertainty in the financial markets,” said Lee. S&P said U.S. Central continues to be “supported by the company’s strong funding and liquidity profile, which allows it to continue to hold these securities despite the market value declines.” Meanwhile, U.S. Central said yesterday it recorded unrealized mark-to-market losses on its available-for-sale securities of $760 million on its $40 billion portfolio in the fourth quarter, "as have many other institutions in the current market climate." “Such unrealized losses had no material economic effect during 2007, and are not expected to have a material impact on U.S. Central’s profitability in the future,” said the credit union in a statement.

Georgia lending partnership helps disabled mom buy home

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ATLANTA (2/6/08)--A single disabled mother with a daughter went to her local credit union in Rome, Ga., and received the necessary help to purchase her first home. A partnership formed in 2007 between the $46.3 million asset, Northwest Georgia CU in Rome, and the $166.7 million asset, CDC FCU in Atlanta, resulted in the offering of the Georgia Dream First-Time Homebuyer Program to Georgia residents. This partnership made the two credit unions the only ones in the state to offer the Department of Community Affairs (DCA) First-Time Homebuyer Program. The Dream Program provides increased down-payment assistance and closing-cost assistance to eligible buyers who may also qualify for a low interest rate and zero-interest mortgage. When Pam Johnson’s need for a new home arose, the partners structured a program with DCA that most lenders could not put forward. The subsidized 30-year fixed loan, with a combination of $15,000 in zero-interest assistance, made Johnson’s dream a reality, CDC FCU said. Johnson found a home within her price range, received financial assistance, and made a small down payment of $500 to secure her loan. She also received grant funds from the Federal Home Loan Bank of Atlanta’s first-time homebuyer program. “It is truly rewarding to help people like Ms. Johnson in reaching her dream of homeownership, especially in such tumultuous economic times,” said John Murphy, CDC FCU vice president of mortgage services. “With the help of the first-time homebuyer resources, we are able to improve the homebuyer markets within the communities we serve.”

Federation has record year in investments

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NEW YORK (2/6/08)--2007 was a record year for the National Federation of Community Development Credit Unions and its Community Development Investments Program, according to year-end numbers. The program, formerly known as the Capitalization Program, celebrated its 25th anniversary in 2007 with a rebranding and the launch of a capital campaign aimed at raising $25 million over three years, to bring total assets under management to just over $50 million. Highlights for 2007 include:
* $10.5 million in Investments and commitments raised in a one-year period; * $8.8 million in new investments in member community development credit unions (CDCUs) in a single year; * $38.4 million in total assets under management; * 121 CDCUs participating in the program; and * 32 investors.

Wisconsin tax-filer program offers predator alternatives

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PEWAUKEE, Wis. (2/6/08)--Wisconsin credit unions are offering help to low-income tax filers to stave off predatory financial practices that hurt filers in the past. Credit unions are assisting the filers by opening accounts into which free refunds can be deposited, providing a no-cost alternative to refund anticipation loans (RALs) that cost taxpayers $23.4 million, said the Wisconsin Credit Union League. Many low-income filers who need RALs to pay bills often turn to tax preparers who charge high interest rates. More than 93,731 Wisconsin taxpayers paid an average of $250 in RAL-related costs in 2005, according to the Wisconsin Council on Children and Families. “They paid dearly to borrow their own money,” said Brett Thompson, league president/CEO. “There’s a better option through credit unions that’s free and just as fast.” RALs siphon the tax benefit these filers should receive by claiming the Earned Income Tax Credit (EITC). About $14.3 million of EITC was lost in 2005 in Wisconsin to RALs. The RAL fees by federal EITC recipients in 2005 also denied the state as much as $47 million in economic activity, the league said. Credit unions will open the accounts at volunteer return preparation sites around the state. The sites offer free tax preparation, tax education and asset-building strategies to people with low incomes, the disabled, the elderly and those with limited English proficiency. The sites are operated in partnership with the league, the Internal Revenue Service, the Wisconsin Department of Revenue and the American Association of Retired Persons. Wisconsin credit unions also offer low-cost alternatives to low-income people through REAL Solutions, including payday loan services, check cashing and wire transfers. REAL Solutions’ goal is to meet consumers’ needs for transaction services, while moving them through the steps of opening basic deposit accounts, building creditworthiness with small loans and building wealth over time, Thompson said.

CU Systems briefs

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* PHOENIX (2/6/08)--Arizona State CU raised $15,500 in its Super Bowl ticket auction over the radio station KTAR last weekend and sent a local Phoenix man to the event. The proceeds benefit the Phoenix Children's Hospital. The tickets received 40 bids, some from other credit unions. The winning bid of $15,000 is being donated to the 1 Darn Cool School program, which continues educational needs of hospitalized patients. Each year Arizona's credit unions raise money for the school through the Credit Unions for Kids program. "We are very happy to learn that this great Super Bowl packate has served to raise money for the Children's Miracle Network," said David E. Doss, president/CEO of the $1.18 billion asset credit union … * LAKEVILLE, Minn. (2/6/08)--Minnesota credit unions supported Dakota and Scott counties' fight against domestic violence by sponsoring the Community Action Council's Domestic Abuse Awareness Luncheon Jan. 18. The Minnesota Network Advertising Program (MNAP) sponsored the event on behalf of the state's 162 credit unions--the second year the 23-year-old event has been sponsored by credit unions. Keynote speaker Victor Rivers (shown here), actor and spokesperson for the National Network to End Domestic Violence, shared his story of growing up in an abusive home. Rivers acted in the Mask of Zorro, Blood In/Blood Out and The Distinguished Gentleman. MNAP Committee Chair is Marty Kelly of US FCU, Burnside, Minn. MNAP is a subcommittee of the Minnesota Credit Union Network board and is voluntarily funded to promote credit unions' uniqueness through cooperative advertising. (Photo provided by the Minnesota Credit Union Network) … * LATHRUP VILLAGE, Mich. (2/6/08)--Michigan First CU President/CEO Michael Poulos displays the 2007 Generation Next Award presented the credit union by the Michigan Credit Union League at a recent Metro West Chapter luncheon. The award recognizes the $475.9 million asset credit union's achievement in "outstanding contributions to the credit union youth movement" and in "effectively bridging the gap for the next generation of credit union members." The credit union's student-run branch program has grown to 10 elementary and middle schools, and it plans to add 10 more schools in 2008. Its MoneyKids and MoneyTeen programs encourage youth to save and teach financial responsibility. It also provides scholarship programs and works with many community youth initiatives. (Photo provided by the Michigan First CU) … * BALTIMORE, Md. (2/6/08)--Bill Derry, former CEO, of Washington, D.C.-based Transportation FCU, died Jan. 18, according to the Maryland and District of Columbia Credit Union Association (MDDCCUA)(FOCUS Newsletter Feb. 4). During the 1970s, Derry served as chairman of the D.C. Credit Union League. He is survived by his wife, Pat. The funeral was in Florida, said MDDCCUA … * EASTPOINTE, Mich. (2/6/08)--Loren McDonald, former CEO of East Detroit Schools CU (now Eastpointe Community CU), died Jan. 27 at the age of 79, according to the Michigan Credit Union League (Michigan Monitor Feb. 4). He served as CEO from June 1983 to November 1993. McDonald also served as a former CEO of a small Catholic credit union and as loan supervisor at Burroughs FCU (now USA CU). He is survived by his wife, Rose; two daughters, one son, six grandchildren and two sisters. Private family services have already been conducted …

Year-end loan-to-savings ratio highest since 70s

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MADISON, Wis. (2/6/08)--With credit union loan growth outpacing savings growth, the loan-to-savings ratio increased to 84.6% in December from 83.9% in November, according to the Credit Union National Association’s (CUNA) monthly sample of credit unions for December 2007. This is the highest year-end reading since the 1970s, suggesting that for some credit unions, liquidity is very tight, Mike Schenk, CUNA senior economist, told News Now. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowing, plus other liabilities--remained at 18% during December. However, the widely reported problems in the housing market--combined
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with general weakening of economic conditions--suggests that 2008 will be a slow-growth year for credit union loans, Schenk added. Credit union loans outstanding increased 0.6% in December, ending the year with a 7.6% increase. Credit card loans outstanding increased 4.1% for the month, followed by adjustable-rate mortgages (2.5%), unsecured personal loans (1.1%), fixed rate mortgages (0.9%), and other mortgages (0.7%). Declining during the month were other loans (2.5%), new-auto loans (0.3%), and home equity loans (0.1%). Credit union savings balances fell 0.2% in December, but increased 4.8% overall in 2007. Share drafts (4.6%) and regular shares (1.2%)
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declined, while individual retirement accounts (1%), certificates (0.8%), and money market accounts (0.8%) increased. Total savings balances ended the year at $650 billion. “Our baseline forecast calls for loan growth of 5% and savings growth of 9%, as nervous consumers ratchet down their spending and borrowing,” Schenk said. “This will put downward pressure on loan-to-share ratios, and--by definition--increase credit union liquidity.” In terms of asset quality, credit union delinquency increased only 0.27 percentage points from a year ago despite the weaker economy--to 0.95% in December 2007 from 0.68% in December 2006. The credit union movement’s overall capital-to-asset ratio remained at 11.5% in December. The total dollar amount of capital ended the year at $89 billion, an increase of 6.5% from a year ago.

CO-OP Financial creates 1 million CMN matching fund

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ONTARIO, Calif. (2/6/08)--CO-OP Financial Services has created a $1 million matching funds program to encourage credit unions to participate in local fundraisers for the Children's Miracle Network (CMN). The program is called the Miracle Match Program. CO-OP Financial Services will match credit union contributions at the local level to create new fundraising opportunities for CMN's children's hospitals, said Stan Hollen, president/CEO (Life is a Highway Feb. 5). For more information about the program, use the link.

California transaction tech firms join WOCCU

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MADISON, Wis. (2/6/08)--Two California-based financial transaction technology firms have joined the World Council of Credit Unions (WOCCU) as associate members, bringing to eight the number of organizations that function as non-voting associate members of the international credit union trade association. The new associate members include: CO-OP Financial Services, the parent company to CO-OP Shared Branching, based in Rancho Cucamonga, Calif.; and Financial Service Centers Cooperative (FSCC), based in San Dimas, Calif. Both firms were unanimously approved for membership at WOCCU's board of directors meeting in Naples, Fla. Associate members receive all the benefits of WOCCU membership, including seats at the annual general meeting. However, they may not vote for members of the WOCCU board or serve on the board. CO-OP Financial Services is a credit union service organization (CUSO) that provides card services, ATM network services and shared branching for about 2,000 credit unions in the U.S. The 25-year-old CUSO, owned and controlled by credit unions, has more than 25,000 ATMs in 10 countries. CO-OP Shared Branching, headquartered in Duluth, Ga., offers shared branching for 80% of participating credit unions and 67% of all shared-branching locations. “We've supported the World Council of Credit Unions for many years,” said Stan Hollen, president/CEO of CO-OP Financial Services. “In fact, we recently worked together to complete the first true international shared branch transaction in Ecuador using our Next Generation Network. Becoming an associate member not only expands our relationship with WOCCU, but it furthers the credit union movement on a more global scale.” Financial Service Centers Cooperative, an 18-year-old CUSO, provides shared branching services at more than 5,000 locations in the U.S. and five countries. FSCC's technology has enabled it to offer 24/7 shared branch access at more than 2,000 7-Eleven stores, said Sarah Canepa Bang, FSCC president/CEO. “FSCC has maintained international branches for more than six years," said Bang. “We've long used WOCCU resources and thought it was time to pay the organization back and support its good work by becoming more involved.” The two new associate memberships signal growing support for WOCCU's mission, and indicate the increasing importance technology plays in serving emerging credit union movements, according to Pete Crear, WOCCU president/CEO. “Both organizations provide U.S. credit unions with electronic transaction services vital to their members' success, and we'll look for synergies that will enable them to help more credit unions worldwide,” Crear said. Other WOCCU associate members include: the National Federation of Urban Cooperative Banks and Credit Societies Ltd. (India); Cooperative Savings and Credit Union Mutual Insurance Society (Poland); CUNA Mutual Group (U.S.); the International Cooperative Banking Association; the International Cooperative & Mutual Insurance Federation; and the International Raiffeisen Union.

CU pays heating costs of 29 near-homeless families

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LYNN, Mass. (2/6/08)--A credit union is partnering with a Massachusetts organization to help 29 near-homeless households pay heating costs for February. Brotherhood CU, a $110.9 million asset credit union in Lynn, Mass., is working with the Massachusetts Coalition for the Homeless and its First Stop program, an early warming system for reaching households before they become homeless (The Daily Item Feb. 5). According to credit union President James Sherman, many neighbors are struggling to stay warm this winter and could be in jeopardy of becoming homeless. He noted homelessness not only means the loss of a place for someone to call home, but also holds ramifications for jobs, children's education and community stability. Credit unions across the state have been committed to finding long-term solutions, said Robyn Frost, coalition director. Their support goes beyond financial support in finding true solutions to end homelessness and ensure long-term housing stability, Frost said.

CUs can attract Gen Y with Second Life

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MADISON, Wis. (2/5/08)--Credit unions soon may be able to attract members of Generation Y by appealing to their second lives. Scott Moriarty, vice president of lending for Virginia CU, Richmond, Va., and a Filene Research Institute i3 member, is working with fellow i3 members to create a credit union island using Second Life, a social networking application and virtual world that allows users to create avatars, or residents of the virtual world. Other i3 members involved with the project include Lesley Carrell, Fibre FCU, Longview, Wash.; Dave Brooke, Point Lima CU, San Diego; Steve Koenen, Altra FCU, La Crosse, Wis.; and Linda Armyn, Bethpage (N.Y.) FCU. Second Life is a three-dimensional, advanced social networking environment where avatars interact with their surrounding environment and communicate with others through instant messaging. The project is “an attempt to leverage an emerging technology in the Internet called 3-D Internet,” Moriarty said in an interview with Filene Chief Innovation Officer Denise Gabel. “We wanted to develop an environment where financial literacy can be gained more effectively for younger generations.” Credit unions can create virtual credit union branches through Second Life to enhance users’ financial education. “It allows credit unions to get their feet wet in an environment that’s relatively safe,” Moriarty said. Avatars can visit the branches and use currency--called Linden Dollars, which are backed by U.S. currency--to make purchases and see the effects of their financial decisions. Credit unions interested in pursuing the three-dimensional program need to have an open mind for technology, as most information technology filters block Second Life, Moriarty said. The credit union island project has three phases. The team is developing the game and working with Ohio University students to ensure it will allow users to learn about finances in a short period. After Phase One is complete, the prototype will undergo testing in Phase Two, which Moriarty estimated would be in December. Phase Three will focus on making the island easily available to credit unions. Some large corporations, such as Toyota, have used the environment to test new products. Instead of using traditional marketing, Moriarty said, credit unions should aim to provide service and build affinity. “It’s an experience you can create and derive on your own,” he said. For more information, use the links.

Chartering of new Delaware CU progresses

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WILMINGTON, Del. (2/5/08)--Chartering papers for a new credit union in Wilmington, Del., have been submitted and a location chosen, according to the Delaware Credit Union League. The Delaware Community Reinvestment Action Council recently received a $100,000 grant from the Longwood Foundation to renovate a building in Wilmington to serve as a low-income community credit union and personal finance training center, according to Rashmi Rangan, executive director of the council (Together Jan. 30). The credit union is tentatively named "Stepping Stones," in line with its mission of offering financial services to low-income residents as an alternative to payday lenders charging higher interest rates. Rangan said the credit union plans to offer small loans. Financial counseling will accompany every loan to ensure borrowers can repay it smoothly, he added. Housed on the second floor of the new building will be a computer center, where people can come to bank online, check a credit score or find housebuying information.

Washington league vows to fight banks on breach bill

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OLYMPIA, Wash. (2/5/08)--The Washington Credit Union League is taking on the state's bankers over the bankers' sudden opposition to two companion state bills that would protect consumers from financial fraud and identity theft via data breaches. Supporters of the bills--Senate Bill 6425 and House Bill 2838--were surprised to learn that after negotiating four successive drafts with supporters of the bills, bankers began working Jan. 28 in the legislature's back halls to kill the bills in committee. Those attempts so far have been unsuccessfully "thanks to legislators who see the epidemic of identity theft a priority that must be addressed," said the league "Washington's bankers seemingly have set their priorities for the legislative session: retail and business customers are worth more to protect than ordinary people, said the league in a press release. "This is a real David vs. Goliath story," said league President John Annaloro. "Credit unions spent over a million dollars in 2007 protecting Washington consumers following the massive breach of credit card data by TJX (Cos.) "The crux of the state's credit unions' disagreement with bankers on this issue is whether data breachers like TJX should be held financially accountable for the costs that result from their negligence," Annalora said, adding, "Consumer identity theft must be stopped." The list of opponents to the bill has grown the past few weeks. The bill now faces opposition from retailers, restaurants, grocers, the National Federation of Independent Business, and the Washington Bankers Association, the league said. Opposition from the bankers came as a surprise. The league vowed to continue to fight for important consumer protection legislation on behalf of all Washingtonians. The bill, sponsored by Rep. Brendan Williams (D-22) and Sen. Rosa Franklin (D-29), gives financial institutions the ability to hold accountable negligent businesses that handle and store unencrypted sensitive consumer information, including credit and debit numbers.

Maryland legislative night discusses fin ed bill

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ANNAPOLIS, Md. (2/5/08)--More than 70 credit union representatives joined 40 Maryland legislators Wednesday night at the Maryland and District of Columbia Credit Union Association’s (MDDCCUA) Legislative Night Reception. Among topics discussed was a financial education bill.
Posing at the Maryland and District of Columbia Credit Union Association's (MDDCCUA) Legislative Night Reception are, from left: Bert Hash, president/CEO of Municipal Employees CU, Baltimore; state House Speaker Mike Busch; MDDCCUA President/CEO Mike Beall; and Jim Brown, attorney. (Photo provided by the Maryland and District of Columbia Credit Union Association)
MDDCCUA President Mike Beall said he encouraged the adoption of a financial literacy bill, which would create a task force to study financial education and develop solutions to improve it in area schools. The task force would comprise credit union representatives and other educational agencies and groups (Focus Newsletter Feb. 4). It’s crucial that Maryland credit unions grow and be more dominant in the marketplace to protect consumers and serve them with low-cost financial services, he said. The bill, the Task Force to Study Mandatory Financial Literacy Education in Maryland Schools, is co-sponsored by Del. Dana Stein (D-Baltimore) and State Sen. C. Anthony Muse (D-Prince Georges County). Stein spoke at the reception, saying credit unions provide a great service to the state’s citizens and noting he is a proud credit union member. Mike Busch, state House Speaker, said he was proud to be a credit union member. Local credit unions are important to Maryland’s economy, and they should get to know their legislators and tell them what they do for their communities, he added.

Michigan CEO testifies at state mortgage industry hearing

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NORTHVILLE TOWNSHIP, Mich. (2/5/08)--A credit union CEO testified Jan. 29 before the Michigan House Appropriations Investigations Subcommittee during a hearing about tighter state regulation on home lending. Large prepayment penalties contributed to many homeowners going into foreclosure, said Robin Frucci, president/CEO of Lansing Automakers FCU. He said the penalties make it difficult for borrowers to refinance subprime mortgages at affordable rates. Some lenders require the penalties to make up for the cost of providing mortgages at below-market rates in initial years, he said (Michigan Monitor Feb. 4). “You could look at regulating pre-payment penalties or banning them altogether,” he said, acknowledging that lenders would then have to come up with new options. Credit unions have done a good job in offering loans without those penalties attached, he said. “We’re responsible for what we put borrowers into,” he said. “When they’re not dealing with financial institutions they’re dealing with someone who may or may not be there.” Foreclosures affect the homeowners, their neighbors and the community’s property values. When asked if tighter regulations would help, Frucci said appropriations should be put on lenders. He encouraged lawmakers to license, test, and provide continuing education for mortgage brokers and loan originators, who do not have as much invested in the industry as traditional financial institutions, such as credit unions, according to the Monitor. Michigan has the third-highest foreclosure rate in the nation. A video of Frucci’s testimony is available on the Michigan Credit Union League’s YouTube channel. To view, use the link.

MnCUN adopts new mission core values statements

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ST. PAUL, Minn. (2/5/08)--The Minnesota Credit Union Network (MnCUN) Board of Directors adopted new mission and core values statements at its December 2007 board meeting. The revision process began during the September 2007 planning session as part of an effort to reexamine, refine and refresh MnCUN’s overall direction. McCUN's new mission statement is: "We are an association designed to ensure the success, growth and vitality of our member credit unions by creating a positive public environment though leadership, political advocacy, education, awareness and regulatory assistance." Its new core values statements include:
* We believe in sustaining and defending the credit union model of a member-owned, not-for-profit, democratically controlled financial cooperative; * We value all member credit unions regardless of size, charter or geographic location; * We believe credit unions are an essential service provider in the financial marketplace; * We believe in the philosophy "people helping people" by encouraging and supporting our member credit unions to become involved in the communities they serve; * We value people over profit; * We believe in the preservation of a strong dual chartering system; * We believe that all consumers should have the option to become a credit union member.
“The new statements serve as a reminder of who we are working for and what we hope to accomplish, said Mark D. Cummins, MnCUN president/CEO. "They will give us the direction we need to continue to effectively serve our member credit unions in 2008 and beyond.”

CU System briefs (02/04/2008)

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* MADISON, Wis. (2/5/08)--Jan Roche, president/CEO of the State Department FCU (SDFCU) in Washington, D.C., has been named to the board of directors of the Filene Research Institute, based in Madison. Her appointment was effective Monday. She will serve a three-year term. Roche previously worked with the Filene Research Council and has more than 20 years of business experience involving operations, financial management, new product development, marketing and infrastructure building. Prior to joining SDFCU, Roche was president/CEO of the U.S. Senate FCU in Washington, D.C. She also is a board member of Credit Union Miracle Day … * ARVADA, Colo. (2/5/08)--Melia Heimbuck has been selected as the new executive director of the Foundation of Colorado and Wyoming and director of credit union development, announced the foundation and the Credit Union Associations of Colorado and Wyoming (CUAC and CUAW). Prior to her new role, Heimbuck served as director of member services and previously as senior consultant for CUAC. She has six years of association experience and has background as a credit union development educator. Heimbuck also has experience with small credit unions and consumer and commercial lending …

Indiana fires up ignite initiative

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INDIANAPOLIS (2/5/08)--ignite, an state-level credit union innovation venture in Indiana, held its kickoff meeting, themed "Fuel for Innovation," with 20 credit union professionals from 17 credit unions attending.
Click to view larger image From left, front row seated: Doug True; Denise Gabel; Charlie White of Members United Corporate FCU; Nan Morrow; Gary Icenogle: Chad Gramling; Carolyn Probasco; Debby Blake; Michael Hostetler; Michelle Peterson; Evelyn Royer; Kay Neidlinger, Indiana Credit Union League vice president communications; and Joe Guilfoy, league vice president consulting and education. Back row, league President John McKenzie; Tony Meier; Bob Falk; Tim Lukomski; Kevin Sparks; Brian Wilkerson; Joe Hasto; Jim Johnson; Becky Summers; Jan Chronic; Marie "Sam" Shanks; Blake Dearing; Charles King; Lora Davison; and Kevin Kosek. (Photo provided by the Indiana Credit Union League)
The meeting discussed innovations attendees may engineer for credit unions and their members. The group was divided into four working groups to develop ideas for their innovations, to be introduced at meetings later in the year. The first of its kind at the state level, ignite is a joint venture among the Indiana Credit Union League and three Indiana credit union representatives associated with the Filene Research Institute’s i3 program. The representatives are: Doug True, senior vice president of technovation at FORUM CU and president of FORUM Solutions; Bob Falk, president/chief operating officer at Purdue Employees FCU; and Nan Morrow, vice president of corporate development at Centra CU. They comprise the ignite Leadership Team. In addition to support from the Indiana Credit Union League and Servicecorp, ignite receives sponsorship support from Members United Corporate FCU and the CUNA Mutual Group. “ignite goes beyond networking to be a cross-credit union collaborative effort, where the groups will be solving issues we all face,” said Falk. “The best thing would be if these teams come up with solutions we’ve never dreamed of.” The group already is using an ignite portal to share information, True said, adding, the group will gather again in May for an update on everyone's progress. A special portal--donated by Passageways, Purdue Employees FCU's credit union service organization--is the key communication tool for the working groups, where they share project information, pose questions, and track dates and time lines. "This is a high-energy, impressive group of individuals," said Morrow. "Credit unions and their members across our state and potentially across the country, will be able to benefit from the innovations that they will develop," she said. “As our league puts additional emphasis on offering more for the emerging leaders at Indiana’s credit unions, the ignite initiative fits perfectly into our plans,” said League President John McKenzie. At the meeting, ideas were sparked by the featured speaker, Denise Gabel, chief innovation officer with the Filene Research Institute, who oversees the i3 program. She outlined the processes used by members of the i3 working groups and provided highlights of the innovative projects undertaken by those groups. Working group members are:
* Debby Blake, manager, contact center, FORUM CU; * Tim Lukomski, chief financial officer (CFO)/vice president, support systems, Heritage FCU; * Carolyn Probasco, manager/CEO, Members United FCU; * Michael Hostetler, marketing coordinator, Finance Center FCU; * Kevin Kosek, director, business development, REGIONAL FCU; * Blake Dearing, mortgage sales manager, FORUM C; * Lora Davison, CFO, Northern Indiana FCU; * Jan Chronic, senior vice president marketing, Eli Lilly FCU; * Charles King, corporate attorney, Hoosier Hills CU; * Gary Icenogle, vice president marketing and business development, NorthPark Community CU * Becky Summers, vice president, Teachers CU; * Marie "Sam" Shanks, executive vice president, Indiana State University FCU; * Jim Johnson, vice president member services, Three Rivers FCU; * Tony Meier, assistant vice president/business development officer, Evansville Teachers FCU; * Kevin Sparks, vice president/CFO, Crane FCU; * Brian Wilkerson, vice president/chief operating officer, KEMBA CU; * Chad Gramling, product manager, Three Rivers FCU; * Joe Hasto, CFO, Eli Lilly FCU; * Evelyn Royer, vice president risk management/support services, Purdue Employees FCU; and * Michelle Peterson, marketing manager, Marion School Employees CU.

NASCUS conducts first CU Advisory Council of 08

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SAN FRANCISCO (2/5/08)--The National Association of State Credit Union Supervisors (NASCUS) held its first Credit Union Advisory Council Outreach Meeting of 2008. NASCUS and Mendell Thompson, Credit Union Advisory Council chairman, met with California credit union and league executives to provide updates on issues and to learn how NASCUS can further its advocacy efforts. Attendees were interested in unrelated business income tax (UBIT) developments and changes to the Internal Revenue Service Form 990. The group also discussed regulatory issues related to member business lending, third-party relationships and subprime mortgage lending. For the past two years, NASCUS has held nearly a dozen outreach meetings on a state and regional basis within the credit union community. It plans to visit North Carolina and Illinois and other states this year. Dates will be announced on the NASCUS website.

CMG Visa alert Hackers a risk to e-business systems

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MADISON, Wis., and SAN FRANCISCO (2/5/08)--CUNA Mutual Group (CMG) issued a security alert yesterday morning identifying potential risks to financial institutions’ e-business systems after Visa told the company financial institutions are being targeted by hackers seeking cardholder information. Credit unions should use the alert to validate and confirm the security of their Web-facing systems, CMG said. CMG recommends that credit unions examine whether they have:
* Failed to use a network-based intrusion detection system; * Failed to use a host-based intrusion detection system; * Improperly segmented network environment; * Poorly configured ingress and egress firewall rules; and * Experienced structured query language (SQL) injection.
Visa also issued a second alert regarding SQL injection, stating it recently detected SQL attack methods targeted against websites and Web applications that were not properly designed or resided on unpatched systems. The latest SQL injection attacks pose serious additional risks to cardholder data stored or transmitted with systems and networks connected to the affected environment, the company said. Visa recommended that credit unions:
* Leverage an independent third party to conduct security assessments; * Assess and monitor the ongoing performance of security practices at key suppliers, especially those handling sensitive information; and * Develop a framework to assess partners, based on ISO-17799.
Credit unions also should validate and confirm Payment Card Industry Data Security Standards and Payment Card Industry Personal Identification Number Security Standards, CMG said in the alert. Credit unions that have experienced losses should contact CMG’s Credit Union Protection Response Center. For more information, use the links.

Media interview CUs to localize economy stories

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MADISON, Wis. (2/4/08)--Credit unions' visibility has been heightened not only nationally but also in local media, with credit unions called on by reporters in their areas to provide comments about the economy. The Credit Union National Association (CUNA) has seen an increase in requests from national media for its experts' analysis on events such as the Federal Reserve rate cuts and the administration and Congress' economic stimulus package. Even local and state media are seeking out state leagues and credit unions to "localize" the national events for their area--something they would have approached banks for a decade ago. When the Federal Reserve cut the target for the fed funds rate last week, an Oregon newspaper said First Tech CU, based in Beaverton, Ore., was among financial institutions noting increased business (Statesman Journal Jan. 31). Bob Corwin, executive vice president and chief operating officer at the $1.6 billion asset credit union, said it did not drop its rates to adjust for the surprise Fed cut on Jan. 22 but planned a slight adjustment for last week's cut. The cut means it is a better time to refinance, Corwin told the newspaper, but he cautioned borrowers to consider other factors such as fees before rushing out to refinance. Two weeks before the last cut, First Tech's mortgage business was about 60% new mortgages and 40% refinancing. Now the ratio is even, but leaning toward 40% new mortgages and 60% refinancing. MaPS CU, Salem, Ore., dropped its standard rate on a certificate of deposit to 3.8% from 4.15%, Dan Penn, spokesman told the paper. The rates have not had a lot of time to hit consumers' pocketbook, said Mel Monroe, director of finance at MaPS. In Vermont, Opportunities CU CEO Caryl Stewart was among those interviewed by Vermont Public Radio's Jane Lindholm about the effects of a weakening economy on Vermont (Newslines Express Feb. 1). Stewart gave this opinion about the federal government's proposed economic stimulus package: "Anybody that we have any influence on, first of all, they need the money. And secondly, we will encourage them to put it aside, to pay down their credit cards, and to set a few dollars for their savings." To download a podcast of the interview or listen to it online, use the resource link.

CUs on the Tube Victory Junction Gang touts CUs

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GREENSBORO, N.C. (2/4/08)--The Carolinas Credit Union Foundation was recently recognized by the Victory Junction Gang Camp for its support of the camp, which serves chronically ill children. A video shows scenes of the camp, including activities from NASCAR Week in 2007. The foundation provided funding so children with Spina Bifida could attend the camp free. Volunteers from the foundation also helped staff the camp during sponsorship week (Weekly Update Jan. 29). Credit unions also are commended for their five-year commitment to the camp, which is located in Randleman, N.C. The camp’s founders, Kyle and Patti Petty, who created the camp in memory of their late son Adam, thanked credit unions for their support.

Utah CUs seek three legislative changes

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SALT LAKE CITY (2/4/08--Utah credit unions are seeking three legislative changes to Utah’s state charter for credit unions that would ease restrictions and bring it more in line with the federal charter. Credit unions are seeking the following three changes to the state charter:
* Increase the amount a credit union can loan to its members to 10% of assets from the current 1%; * Eliminate a requirement that borrowers must be members of a credit union for six months before receiving a business loan; and * Raise the business lending limit to 12.25% of a credit union’s assets from its current lending limit of $250,000 per member.
If the state legislature does not make the changes sought by the Utah credit union industry, the credit unions may consider taking the matter to the public through a statewide “financial freedom” ballot initiative. This ballot initiative would ease state legislature-imposed lending restrictions on state-chartered credit unions. The initiative also would contain several consumer-friendly provisions (News Now Jan. 15). Talks among the state’s credit unions, banks and state legislature will continue, State Sen. Majority Leader Curt Bramble (R-Provo) said (Salt Lake Tribune Jan. 30). “I remain hopeful that there will be a legislative solution to this situation,” Scott Simpson, president of the Utah League of Credit Unions, told News Now. As for the financial freedom ballot, “it remains on the table, but it is premature to talk about it any more at this time,” Simpson said. Also, Utah credit unions want to retain favorable provisions of the state charter that allow them to cross county lines when defining their field of membership.

Man tries to kidnap CU employee during heist

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ALBANY, Ore. (2/4/08)--Police officers arrested a man toting a .45 caliber hand gun and duct tape, who they say intended to kidnap a credit union employee during an attempted robbery of Linn-Co FCU. An alarm thwarted his plans at the $56.9 million asset, Lebanon, Ore.-based credit union, and Lawrence Beckner, 30, was nabbed by authorities (Associated Press Newswires Jan. 31). Beckner allegedly grabbed a credit union employee as she opened the Albany branch office Thursday morning and forced her inside the building, activating the alarm, police said. When police confronted Beckner minutes later, he relinquished an unloaded gun and a three-inch knife, and surrendered. He had cased the credit union for several days, and planned to abduct the employee, bind her with duct tape and use her car as a getaway vehicle, police said. Beckner was booked on multiple counts, including kidnapping and robbery, authorities said.

CU System briefs (02/01/2008)

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* PHOENIX, Ariz. (2/4/08)--Arizona State CU donated a ticket package for an auction that sent two people to Sunday's Super Bowl. The auction proceeds will go to the Children's Miracle Network. The auction kicked off Thursday and Friday on the Darrell Ankarlo Show, the Mac Watson Show and the Gaydos After Dark Program on KTAR. The package included two tickets to the game and entry to a VIP party before and after the game. The pre-game party hosted celebrities such as Hall of Fame Defensive Back Ronnie Lott and 1979 Rookie of the Year Otis Anderson. The funds from the auction will support the 1 Darn Cool School, which meets educational needs of patients at the Phoenix Children's Hospital … * MADISON, Wis. (2/4/08)--CUNA Mutual Group has hired Steve Koslow as senior vice president and chief ethics and compliance officer. In the new position, Koslow will oversee company performance in compliance, corporate ethics and privacy, and will chair CUNA Mutual's Compliance Leadership Council. Previously, Koslow served as a director in the governance, risk and compliance group at PricewaterhouseCoopers. There he advised organizations on the design, structure, organization, and implementation of enterprise-wide ethics and compliance departments … * BATON ROUGE, La. (2/4/08)--LA DOTC FCU cut the ribbon on its third in-school branch Jan. 18 with a ceremony opening Cougar Union, inside Capitol Middle School in the East Baton Rouge Parish School System. The credit union is run by 11 eighth-graders working under the supervision of LA DOTC FCU … * SEATTLE (2/4/08)--John Cruz Iglesias has been named president/CEO of Group Health CU, a $230 million asset credit union in Seattle. Previously, he was senior vice president and chief lending officer of Washington State Employees' CU for five years (Pacific Daily News Feb. 1) … * MONTGOMERY, Ala. (2/4/08)--MAX CU honored the Alabama Wildlife Federation (AWF), a conservation education group, with its MAX Community Achievement Award during the credit union's fifth Annual MAX Community Reception. The reception brings together business, political and community leaders to celebrate community successes as well as recognize organizations and individuals who make a significant difference in quality of life in the area. Pictured are, from left, Tim Gothard, executive director of AWF, and MAX CEO Greg McClellan. (Photo provided by MAX CU)… * GREENSBORO, N.C. (2/4/08)--Joel W. "Joe" Wallace, a board member of the Carolina FCU for 30 years, died Jan. 26 at home in Kings Mountain, N.C. He served on the board of the $19 million asset credit union from 1977 to 2007 and served as chairman from 1979 to 2006. The credit union is creating an annual scholarship for high school graduates in his honor, said the North Carolina Credit Union League (Weekly Update Feb. 1) …

NFCDCUs workshop to include foreclosures session

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NEW YORK (2/4/08)--The National Federation of Community Development Credit Unions will conduct a two-day workshop in March that features classes on foreclosure prevention and homeownership counseling. The federation’s mortgage lending workshop, titled “Mortgage Lending Strategies in Uncertain Times,” will be held March 18-19 at the Center for Responsible Lending in Durham, N.C. The workshop is designed for credit unions, housing professionals, and other community-based mortgage lenders. National Credit Union Administration Chairman Rodney Hood will highlight the role played by credit unions as affordable and responsible lenders. Program topics include Lending in the Current Housing Market and The “Self-Help Model.” Other sessions will address mortgage underwriting, marketing, compliance, servicing, and the effect of future changes in market conditions. For more information or to register, use the link.

A.M. Best affirms CUNA Mutuals A rating

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MADISON, Wis. (2/4/08)--CUNA Mutual Group’s financial strength rating has been affirmed as “A” or excellent by ratings agency A.M. Best. The “A” rating was assigned to the principal companies of CUNA Mutual Group, including CUNA Mutual Insurance Society and CUMIS Insurance society--the company’s U.S. property and casualty subsidiary. The company’s outlook has been listed as stable, and the agency recognized CUNA Mutual’s “excellent risk-adjusted capitalization, overall operating profitability and conservative balance sheet.” CUNA Mutual’s underwriting results in 2007 and its support of credit unions were cited as strengths by A.M. Best. The agency noted expansion plans into new product areas, which also was noted. “Management continues to expect that enhanced product offerings and joint-venture opportunities will provide growth opportunities for future expansion, as evidenced by its 45% quote share participation in crop insurance produced by Producer’s Ag Insurance Group,” A.M. Best said. This year, CUNA Mutual will “develop new markets and new products that help CUNA Mutual grow--at the same time, we will provide more value to credit unions and their members,” said CUNA Mutual President/CEO Jeff Post. CUNA Mutual is a provider of financial services and products to credit unions and their members worldwide.

Make waves. Vote advocacy tools available

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MADISON, Wis. (2/4/08)--Credit unions can encourage their members to vote in the 2008 elections with a new statement stuffer and courses from the Credit Union National Association (CUNA). Tomorrow is Super Tuesday, and presidential candidates will be trying to get delegations in 22 states. The events serve as a reminder for credit unions to urge their members to vote. With the upcoming elections, credit unions also will be stepping up their advocacy efforts. A new CUNA statement stuffer, “Make Waves. Vote” is available and provides information on why members should vote, how to register to vote or how to get an absentee ballot. The CUNA is offering “Communicating the Credit Union Difference” and “Direct Lobbying at the Grassroots Level” for credit union professionals. The courses are free and online. Also CUNA has a slew of free Get-Out-The-Vote materials, designed to help credit unions spur their members to the polls. Forty-four percent of registered voters are credit union members, says CUNA. Use the resource links for more information.

CO-OP posts record daymonthyear transactions

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RANCHO CUCAMONGA, Calif. (2/4/08)--CO-OP Financial Services, which operates CO-OP Network with 25,000 ATMs nationwide, posted record transactions in 2007 for day, month and year. Records set include: transactions for a single day (6,278,731 on Dec. 24), month (154 million in December), and year (1.6 billion), according to the company’s website. 2007 was the 15th consecutive year that CO-OP set an annual transaction record. The previous record of 1.3 billion was established in 2006. CO-OP also provides volume discounts on products and services that include risk management, debit and deposit access to 2,800 credit union clients and 25 million cardholders. CO-OP has evolved from solely an ATM network to the nation’s largest credit union electronic funds transfer network and processor, said Stan Hollen, CO-OP Financial Services president/CEO. “While the ATM business is still at the heart of our organization, nowadays, our electronic funds transfer services, strategic partnerships and growing membership also play a significant role in allowing us to achieve [the 2007] transaction figures,” he added.