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CU System Archive

CU System

CU National Mortgage files for bankruptcy

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NEWARK, N.J. (3/2/09)--U.S. Mortgage Corp. and its subsidiary, CU National Mortgage, have filed for a Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Newark, N.J., listing more than $200 million in debts to Fannie Mae and 19 credit unions, among others, according to court records. Among the top 20 creditors with the largest unsecured claims are 19 credit unions from New Jersey, New York, District of Columbia, Maryland, North Carolina, Florida, and California. Nearly 300 creditors are listed in the petition's accompanying papers. Fannie Mae is the largest unsecured creditor, with an estimated claim of more than $99.2 million. The credit unions' estimated claims range from more than $33.7 million to $440,000. Credit unions have filed creditors' objections, asking for denial of the mortgage servicer's cash management and wage applications related to the credit unions' mortgage loans and saying they were victims of "massive fraud" orchestrated by the mortgage company. A Dover, N.J.-based credit union, Picatinny FCU, filed its response Thursday, noting that the scope of the fraud may exceed $110 million. Its petition alleges the company sold 58 of the credit union's mortgage loans, totaling more than $14 million, to Fannie Mae without the credit union's knowledge or authorization and without paying the proceeds of the loans to the credit union. The petition includes a exhibit letter, written Feb. 12 by U.S. Mortgage, informing the credit union it had discovered "that our servicing system has been producing erroneous servicing portfolio reports to your credit union." On Feb. 9, U.S. Mortgage advised its clients it could no longer handle pipeloan loans (loans in process) and advised credit unions to retain a new servicer. U.S. Mortgage refused Picatinny's demands for its loan files and information on existing loans, court records say. The Pine Brook, N.J.,-based U.S. Mortgage was licensed to do business in 34 states, primarily in Midwest, eastern and central states. It averaged monthly originations of $19 million in 2007, compared with $119 million per month in 2003. Its bankruptcy petition was filed Feb. 23 by attorney Kenneth A. Rosen of Lowenstein Sandler PC, a Roseland, N.J., law firm.

CUs file lawsuit against Heartland Payment Systems

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TRENTON, N.J. (3/2/09)--Three credit unions have joined two banks in a class action lawsuit against Heartland Payment Systems, the Princeton, N.J., to recoup losses related to Heartland's recent data breach announced Jan. 20. The credit unions are: GECU, a $1.146 billion asset credit union in El Paso, Texas; MidFlorida FCU, a $1.283 billion asset credit union in Lakeland, Fla., and Matadors Community CU, a $123 million asset credit union in Chatsworth, Calif., according to documents filed in court. They join Amalgamated Bank of New York, N.Y., and Farmers State Bank, headquartered in Marcus, Iowa, in the complaint, which was filed Feb. 20 in the U.S. District Court, Trenton, N.J. by Chimicles & Tikellis LLP, Haverford Pa., the lead attorneys in the case. They are seeking to recoup money for the cost of reissuing cards to their members/customers and for their costs related to fraudulent activity stemming from the breach. The five financial institutions said in the complaint they suffered injuries from the Heartland breach. Each had to re-issue "a substantial number of credit and debit cards" to consumers whose accounts were affected by the breach. Each credit union and bank sent a letter to its members/customers informing them that their sensitive financial information was compromised and explaining the circumstances surrounding the breach at Heartland, according to the complaint. In addition, GECU incurred "substantial out-of-pocket expenses as a result of re-issuing these cards, and has received complaints from numerous members about the incident," said the document. Matadors Community CU also incurred expenses "caused by the actual misuse of sensitive financial information that was compromised" in the breach. In seeking the class action, the complaint noted that the class "consists of thousands of members dispersed across the U.S." The suit alleges that Heartland:
* Was negligent in exercising reasonable care in safeguarding and protecting the information from being compromised or stolen; that it had a duty to timely disclose the breach instead of shifting the disclosure obligation to the affect consumers of the financial institutions; and had a duty to have procedures in place to detect and prevent dissemination of sensitive information. * Breached contracts to which the financial institutions and their member/customers were third-party beneficiaries by not complying with Visa and MasterCard's operating regulations and bylaws, which set minimum standards for credit card transaction processors such as Heartland. * Breached an implied contract where the plaintiff financial institutions and their member/customers were required to provide Heartland with sensitive financial information so Heartland could provide services on their behalf. * Violated the New Jersey Consumer Fraud Act by making false and misleading statements and omissions concerning the measures it took to safeguard the sensitive information. * Engaged in negligence per se by failing to meet the minimum duty required to comply with card companies PCI standards, which requires having adequate controls in place for preventing, detecting and responding to system intrusions. * Made false communications of material fact concerning its security systems and the measures it was taking to protect the sensitive information.
Of the more than 560 financial institutions that have reported so far to Bank Information Security that they have been impacted by the Heartland breach, 178 are credit unions. Use the resource links for more information.

Bank wins 27 million judgment vs. mortgage CUSO CEO

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WAUWATOSA, Wis. (3/2/09)--A Wisconsin court has awarded a bank a $2.7 million judgment against a mortgage company run by the former CEO of Central States Mortgage, a credit union service organization (CUSO). U.S. Bank was awarded the judgment against Interim Funding LLC of Wauwatosa, Wis., a firm owned by Dick Jungen. Jungen is founder and a former CEO of Central States Mortgage, which is 70% owned by a consortium of credit unions (MSNMoney.com Feb. 26). The bank had sued Jungen and five other executives of Interim, including three former Central States Mortgage employees, in November. The suit alleged the bank provided a $3 million revolving loan to Interim Funding in 2005. The bank said the company defaulted on the note and owed $2.7 million plus interest. The company agreed to the judgment on Feb. 19 without a trial, but several of the defendants did not agree and have switched attorneys. Jungen was fired from Central States Mortgage in July 2008 after the CUSO learned he secretly controlled Interim Funding. Interim Funding acted as a wholesaler, according to a separate lawsuit filed on Feb. 2 by the CUSO against Jungen and other executives of Interim Funding. The suit alleges they scammed the CUSO out of $15 million (Business Journal of Milwaukee Feb. 13). In the U.S. Bank case, Interim Funding agreed to the judgment Feb. 19 in Milwaukee County Circuit Court. A hearing is scheduled for June 29 on U.S. Bank's motion for a summary judgment.

Final 2008 financials for U.S. Central are posted

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LENEXA, Kan. (3/2/09)--U.S. Central FCU has posted its final financials for 2008, confirming the losses it announced last month. The unaudited results were posted Thursday on U.S. Central's website. U.S. Central earlier announced it recorded an other-than-temporary impairment (OTTI) charge of $1.2 billion in December 2008. The new report says the losses resulted from significant deterioration in some consumer-based investment securities in late 2008, particularly non-agency residential mortgage-backed securities (RMBS). Assets with OTTI charges must be written down to the current fair value, with an offsetting charge to earnings, and these charges are often much larger than expected principal losses because securities must be written down to fair value, said a letter to members from Kathryn E. Brick, U.S. Central's senior vice president and chief financial officer. U.S. Central received a $1 billion capital infusion from the National Credit Union Administration after U.S. Central announced the expected OTTI charge. The infusion was funded in late January from the National Credit Union Share Insurance Fund and qualifies as core capital. Following the capital contribution, U.S. Central was in compliance with its regulatory capital ratio as of Jan. 31. U.S. Central experienced record performance in net interest income during 2009, largely due to historically wide Fed Funds/LIBOR spreads in the third and fourth quarter 2008. Net interest income totaled $238.2 million in 2008, up from $217.6 million in 2007. Members' share and certificate accounts averaged $23.9 billion in December and $33.2 billion for the year 2008. As of Dec. 31, accumulated other comprehensive income (AOCI) on the balance sheet reflected an unrealized loss of $6 billion, compared with $5.6 billion in November. Continued fears about the U.S. economy caused credit spreads on many of U.S. Central's investment securities to widen, causing a further decrease on their value. Total assets for 2008 were $32.7 billion, down from $44.7 billion in 2007. Retained earnings were down a negative $463 million, compared with $598 million in 2007. Total capital is $1.5 billion, compared with $2.3 billion in 2007. For more detail, use the resource link.

Boston Globe ECU to be absorbed by Metro CU

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BOSTON (3/2/09)--Metro CU--the fifth largest-asset Massachusetts credit union--is absorbing Boston Globe Employees CU. State regulators approved the merger in which the $732 million asset, Chelsea, Mass.-based Metro is taking in the 2,343 member, $21 million asset Boston Globe--which has lost money over the last three years (Boston Business Journal Feb. 27). Boston Globe Employees CU saw its delinquent loans nearly double in 2008, according to National Credit Union Administration data, the Journal said. The credit unions’ net loss went up to $316,438 and its delinquent loans rose to $825,656--3.97% of total assets in 2008--NCUA data indicated, according to the Journal. Metro has more than 100,000 members, serving more than 1,800 Massachusetts companies. In 2008, its net income was $2.3 million and its net worth $87.2 million, the Journal said.

Morongo tribe opens new CU in California

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CABAZON, Calif. (3/2/09)--The Morongo Band of Mission Indians has opened First Californian Credit Union on its reservation in Cabazon, Calif. The credit union is part of the American United Family of Credit Unions FCU, a $58.8 million asset credit union in Salt Lake City, Utah, says the credit union's website. First Californian was developed with the California Indian Consortium to provide financial and banking services and financial education to Morongo tribal members and their families, Morongo employees, and vendors. It will employee a branch manager and two loan processors (The Record Gazette Feb. 27). The new credit union will offer lending services such as vehicle loans, personal loans, mortgages, recreational vehicle and student loans. Savings services include money market, dedicated savings, individual retirement accounts, certificates of deposit or Christmas Club savings. It also will offer student saver bundles for college-bound students, direct deposit of disability or Social Security payments, and a credit analyzer to help members raise credit scores by managing their debt better. It also will offer online banking. The credit union will be regulated by the National Credit Union Administration, said tribal officials.

NCUA approves two mergers in D.C. area

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WASHINGTON (3/2/09)--The National Credit Union Administration (NCUA) approved two credit union mergers in the Washington, D.C., area. The agency approved the merger of NSF CU--which serves members of the National Science Foundation and Secret Service employees--with FDIC FCU, serving employees of the Federal Deposit Insurance Corp. and their families (Washington Business Journal Feb. 27). The two credit unions aim to obtain increased efficiencies by consolidating back-office operations, Theresa Mann, CEO of FDCI FCU, told the Journal. The combined credit union will have four branches, 34 employees and $100.6 million in assets. NCUA also approved the merger of K.C. Councils FCU, College Park, Md., into Money One FCU, Largo, Md. K.C. Councils serves members of Prince George’s County Knights of Columbus. Money One--founded to serve Safeway Stores Inc. workers--now serves 225 employee groups. The credit unions are merging to obtain economies of scale, Debbie Connors, CEO of Money One, told the Journal. Members of the two credit unions will vote on the pending deal today.

CUNA to IDow JonesI CUs best the banks in survey

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NEW YORK (3/2/09)--Two Credit Union National Association (CUNA) executives told Dow Jones Thursday that credit unions are doing better than banks during the current economic downturn. Overall, U.S. credit unions expect deposits to rise 10% in 2009, Mike Schenk, CUNA senior economist, told the news service. “When people are nervous, they want [their investments] short term and liquid,” he told Dow Jones. “We saw tremendous growth in money markets.” CUNA has conducted an annual survey of 1,000 registered voters since 1998, Richard Gose, CUNA senior vice president of political affairs, told the news service. This year’s survey, conducted in mid-January, revealed that 37% of respondents said “safety and soundness” describes a credit union, 36% said it describes a bank, and 19% said it describes both equally. In 2008, the same survey indicated 50% of respondents said the term described banks, 23% said credit unions and 22% both. This is the first year that credit unions did better than banks on the “safety and soundness” question, Gose added.

Belco will continue its community charter

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HARRISBURG, Pa. (3/2/09)--Belco Community CU announced Thursday it will continue to operate under a community charter in the aftermath of a recent Pennsylvania Supreme Court ruling in its favor. Belco can continue to offer open membership without fear of further court action, the credit union said in press release Thursday. The Pennsylvania Supreme Court on Dec. 18 reinstated Belco Community CU's seven-county community charter for central Pennsylvania, reaffirming the Pennsylvania Department of Banking's initial decision that was overruled in state court (News Now Dec. 19). In November 2006, the Pennsylvania Commonwealth Court ruled that the state's Department of Banking erred when it declined to grant bank parties a hearing regarding Belco's charter (News Now April 18). The recent news about the downturn of the economy and federal bailouts has caused concern in the minds of consumers, Belco added. “Credit unions are different from banks,” said Lonny Maurer, Belco president/CEO. “Credit unions are owned and operated by their members. Their sole interest is to provide financial products and services for the benefit of their members, rather than increasing stock prices for stockholders or lining the pockets of CEOs. We’ve been working on getting that message out, and based on our results from January, people are listening.” In January, Belco posted a record-breaking month for membership and deposit growth. The credit union attracted 74 new members and more than $14.5 million in deposits during one of the worst economic climates in U.S. history, Belco said. “I attribute this growth to the marketplace realizing we are different from banks and deciding they want the safety and security we can provide,” Maurer said. “Our members also are very happy with the quality of our products and services.” Last year, members gave the credit union a 97% satisfaction rating, Belco said.

CU System briefs (02/27/2009)

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* HARRISBURG, PA. (3/2/09)--John Kebles, left, CEO of Choice One Community FCU, Wilkes-Barre, received the Buck Levins Award from Credit Union National Association (CUNA) Chairman Kris Mecham, right, during the closing session Thursday of CUNA's Governmental Affairs Conference in Washington, D.C. The award recognizes his political involvement in the credit union movement (Life is a Highway Feb. 27). Earlier in the week, Kebles and his credit union were awarded the Credit Union Times Trailblazer Award for Outstanding Political Action. Kebles retired as the credit union's president/CEO in January but remains as CEO and adviser until June 30. Mecham is president/CEO of Deseret First FCU, Salt Lake City, Utah. (Photo provided by the Pennsylvania Credit Union Association) … * BILLINGS, Mont. (3/2/09)--A Seattle man was sentenced Wednesday to three years in prison after using a fake credit report to obtain loans in 2004 at two Billings, Mont.-based credit unions. Thomas J. Cosand, 42, who pleaded guilty to charges at Billings FCU, also was ordered to pay $37,860 in restitution to Billings FCU and Avanta FCU. Cosand convinced the credit union to use a copy of a credit report he brought with him, saying he was purchasing a house and his mortgage company didn't want him to pull another report. He obtained an auto loan in March 2004 and a personal loan the next month. After the second loan, the credit union pulled a credit report and discovered Cosand had civil judgments and collections efforts against him, and had two vehicles repossessed. Billings FCU has $75.9 million in assets; Avanta FCU, $137.2 million assets (Associated Press Newswires Feb. 26) … * SAN FRANCISCO (3/2/09)--OSU FCU, Corvallis, Ore., is assisting students in the Oregon State University Chapter of Students in Free Enterprise (SIFE) in teaching financial literacy courses to Corvallis high school students at Harding Center, an alternative education facility. SIFE participants will use the approved standardized curriculum and deliver the training under the supervision of Anissa Arthenayake, the $537 million asset credit union's director of community education, and Sandy Neubaum, associate director of the Austin Entrepreneurship Program. Arthenayake said supporting financial literacy education allows OSU FCU to invest in the community and help students acquire critical professional skills (US Fed News Feb. 25) …

Payments study Cash no longer king

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DALLAS (2/27/09)--Consumers' use of cash is declining while their use of card-based payment options is increasing, reports a nationwide study. Roughly 41% of consumers indicated they use cash less often today than they did two years ago, according to the 2008 Student of Consumer Payment Preferences. The study--sponsored by First Data, MasterCard Worldwide, Metavante and PULSE--was conducted by BAI Research and Hitachi Consulting. "Of those who reduced their cash use, 97% are shifting to credit, debit or gift/prepaid cards instead," said Ajay Nagarkatte, managing director of BAI Research. For credit cards, consumers carry an average of four cards but use only 2.2 of those to make purchases on any given month, underscoring the competitiveness of the credit card market, said the study. Findings reflected consolidation in the credit card industry, with 75% of consumers' Visa and MasterCard credit cards coming from 10 issuers. Nearly half (46%) of active cardholders surveyed revolve at least part of their total credit card balance each month, while 54% pay all balances in full. More than 75% of cardholders report they have rewards attached to at least one card. Overall, 58% of consumers had cards that earned rewards; 51% of those said rewards strongly affect their use of the card. For debit cards, signature and PIN debit account for a combined 37% of consumers' in-store payments. PIN debit is preferred by 45% of consumers surveyed, while 35% prefer signature and 20% have no preference. Gift/prepaid cards did less well than expected, accounting for 4% of consumers' in-store purchases--the same as in 2005. However, the market for open-loop gift/prepaid cards is increasing, the study indicated. Retailer-specific cards dominated the gift card space. In 2008, more than twice as many consumers received or gave general purpose gift cards than in 2005.

Summit CU plans Pay It Forward program

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MADISON, Wis. (2/27/09)--Summit CU will give members $10 to $100 at each of its 20 branch locations through its “Pay It Forward” program. Members are then asked to use the money to help someone else with financial needs. There will be 100 participants per event, with the events held March 25 through May 14 at the branches. Participants will be videotaped as they describe how they intend to use the money (Wisconsin State Journal Feb. 26). Videos will be posted and rated on the credit union’s website. Summit will give the participant who garners the highest rating $500 with an additional $500 donated to a United Way charity of the winner’s choice. Summit CU, based in Madison, Wis., has $1.287 billion in assets.

Boston mayor announces microloans serviced by CU

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BOSTON (2/27/09)--Boston Mayor Thomas Menino announced a new microloan fund--serviced by Tremont CU--for small businesses located within the City’s Empowerment Zone (EZ). The $350,000 fund is geared to help existing small businesses and eligible entrepreneurs with access of up to $25,000 in loans for working capital needs such as leasehold and inventory improvements (US Fed News Feb. 26). EZ businesses with annual revenues less than $500,000 can apply for financing through the program for loans ranging from $5,000 to $25,000. The loans have a 9% fixed-interest rate. Boston’s EZ is a 5.8 square-mile area, consisting of roughly 60,000 residents--about 10% of the city’s population. Tremont CU, based in Braintree, Mass., has $173.1 million in assets.

Study CUs more active than banks in reaching teens

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CHICAGO (2/27/09)--Credit unions are more active than banks in reaching teens to solicit their business, says a new survey by Mintel Comperemedia. Mintel, which monitors direct mail, e-mail and print advertising, observed financial products and services targeted at teens and their parents (Business Wire Feb. 25). A search of Mintel’s database for campaigns referencing the teen market from January through October 2008 collected 51 results--two-thirds of which came from credit unions. The survey also indicated that nearly four out of five teens (79%) surveyed consider themselves knowledgeable about financial matters. However, the Federal Reserve’s 2008 test of high school seniors indicates teens are falling behind in personal finance education. The test revealed an average financial literacy score of 48%--four percentage points lower than the average score of 52% in 2006. Most teens said they learn about money from their parents (87%), while two-thirds said they learn about finances through school lessons, the survey indicated. Many credit unions work through the National Endowment for Financial Education to present school classroom financial education.

CU System briefs (02/26/2009)

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* WASHINGTON (2/27/09)--At the African-American Credit Union Coalition (AACUC) meeting during the Credit Union National Association's Governmental Affairs Conference, National Credit Union Foundation (NCUF) Executive Director Steve Delfin presented a check for $60,875 to AACUC Chairwoman Barbara Stephens. The check represented the past year's donations to AACUC from NCUF through the Pete Crear Fund, a designated fund of the Community Investment Fund. AACUC uses the annual donations from NCUF to fund financial education, minority internships, and small credit union development. (Photo provided by the National Credit Union Foundation … * HARTFORD, Conn. (2/27/09)--Thomas M. Durkin Sr. died Feb. 20 in Meriden, Conn., at the age of 81. Durkin was formerly with the Connecticut Credit Union League, then CUNA Mutual Insurance Society as a credit union administrator, where he established and organized new credit union charters throughout New England. Visitation is from 10 a.m. to 11 a.m. today at Sheehan-Hilborn-Breen Funeral Home in West Hartford, Conn. (The Hartford Courant Feb. 24) …

Hispanic Marketing Immersion enters third year

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MADISON, Wis. (2/27/09)--World Council of Credit Unions’ (WOCCU) Hispanic Marketing Immersion Program is kicking off its third year Sept. 19, offering Spanish lessons, credit union internships and full cultural immersion in one- and two-week programs in Morelia, Mexico, for U.S. credit union staff.
Participants in WOCCU's Hispanic Marketing Immersion Program will spend part of their time working in credit unions in central Mexico. (Photo provided by World Council of Credit Unions)
Spanish language training for U.S. credit union staff is a step forward in attracting and serving Hispanic members, WOCCU said. Having a cultural understanding of their needs and expectations and knowing how to implement relevant products and services will boost credit unions to the forefront, WOCCU said. Hispanics are the fastest-growing demographic in the U.S. and may count for as much as 44% of the U.S. population by 2020. Credit unions have tremendous opportunities in tapping the Hispanic market, an advantage on which the Hispanic Marketing Immersion Program is designed to capitalize, WOCCU said. In the program, participants stay with a Mexican family, take Spanish language classes through an accredited school and work in a Mexican credit union to gain first-hand knowledge of member service there. Host families will provide participants with private rooms, meals and an opportunity to sharpen language skills in a social setting. WOCCU program staff will be on hand to ease any cultural and social transitions. Participants also will serve practical internships with either Caja Morelia-Valladolid or Caja Alianza, two Mexican credit unions that participate in WOCCU's International Partnerships Program. Participants will learn about daily Mexican credit union operations and study marketing strategies to attract new members and promote financial products. The program is flexible for those who wish to pursue other interests besides marketing. Between the immersion program’s first and second weeks, participants will be able to attend the third annual U.S.-Mexico Marketing Workshop, which is included in the main program cost. Workshop attendees will experience marketing presentations from Mexico’s four largest credit unions. For more information, use the link. Participants can select either a one- or two-week session. Those who register before June 15 will receive an early bird discount.

Year-end 2008 call report analysis now live

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MADISON, Wis, (2/26/09)--The Credit Union National Association (CUNA) has posted on its website the preliminary analysis of the National Credit Union Administration (NCUA) call report data for year-end 2008 and a state by state summary. CUNA Economics and Statistics Department obtained the data Tuesday night and began a preliminary analysis of the results. The results are in two documents: "U.S. Credit Union Profile: A Summary of Year-end 2008 Credit Union Results" (February 2009) and "State by State Credit Union Financial Summary." To access these, use the resource links.

Heartland Numbers elusive but breach costs significant

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PRINCETON, N.J. (2/26/09)--Costs related to the data breach of Princeton, N.J. Heartland Payment Systems will be significant, but the company still cannot estimate how many consumer accounts were compromised, Heartland said Tuesday. The number of financial institutions--including credit unions--that have said their member/customers' credit or debit cards were compromised because of the breach has reached more than 500 so far, according to bankinfosecurity.com (Feb. 23), which is tracking disclosures by financial institutions about the breach. Another estimate is that the breach compromised about eight million accounts, so far (Las Vegas Sun Feb. 25). "At this time, we do not have information that would enable us to reasonably estimate the amount of losses we might incur in connection of such claims" by cardholders, card issuers, the brands, regulators and others, said Heartland Chairman/CEO Robert Carr at a press conference announcing fourth quarter financials for the company. Heartland officials reported that despite the economy, net revenue for the quarter was up 31.3%, total transaction processing volume up 23% to $16.5 billion, and an operating margin on net revenue of 13.9%. Carr said the company has been named in numerous lawsuits and is the subject of several governmental investigations and inquiries. They include a formal inquiry by the Securities and Exchange Commission, a related investigation by the Department of Justice, and inquiries by the Office of the Comptroller of the Currency and the Federal Trade Commission (American Banker Feb. 25). "We intend to vigorously defend any such claims, and we believe we have meritorious defenses to those claims that have been asserted to date," he said in the press release. He also said Heartland faces a second challenge--managing the potential impact of the breach on day-to-day operations of its business. Heartland President and Chief Financial Officer Robert Baldwin noted that the company still cannot estimate how long the malicious software program that sniffed data from its system ran, how many card accounts were affected, or how much the company will have to spend related to the incident. The news conference came as word of a second card processor's breach was being made public (News Now Feb. 24). The company involved has not been identified by MasterCard and Visa, but it involves a number of credit unions, as did the Heartland breach. Meanwhile more credit unions and banks across the country were reporting the effects of the Heartland data breach this week. Several hundred accounts at Boulder Dam CU in Boulder City, Nev., are being reissued cards. The credit union told the Las Vegas Sun said that although the breach was at Heartland, the credit union is responsible for $1,000 to $2,000 stolen from members' accounts. Gold Coast FCU, West Palm Beach, Fla., told the Palm Beach Post (Feb. 24) that about 2,600 members are receiving new debit cards in the mail. That will cost about $13,000, at a cost of $3 to $5 per card, said the credit union. In Endicott, N.Y., Visions FCU took out a newspaper ad acknowledging that some members were affected by the breach and emphasizing that the credit union itself experienced no breach of internal security. The credit union, which has more than 90,000 credit and debit cards, will reissue credit cards to protect members whose accounts are compromised (pressconnects.com Feb. 25). The publication also reported that Horizons FCU, Binghamton, N.Y., had taken measures to protect its members. The credit union said nearly one-third of its card base has been breached over the past three or four weeks--about 1,400 accounts. It has cost Horizons $15,000 so far to cover fraudulent charges, issuing new cards will cost between $3,000 and $4,000. Thieves in different parts of the country are buying items such as gift cards with the stolen data, Horizons President Mario DiFulvio told Press & Sun-Bulletin Tuesday (via pressconnects.com.

Hanscom offers members support for tough times

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HANSCOM AFB, Mass. (2/26/09)--Hanscom FCU is offering its members free credit score enhancements with a trained adviser. Members can avoid the fee normally charged for obtaining a credit score and receive a complete explanation of their credit reports, and advice on how to improve their scores, announced the $650 million asset credit union. The credit union also provides free financial counseling services through a partnership with the BALANCE financial fitness program. Members receive personalized advice on budgeting, getting out of debt, purchasing a new home or vehicle, and other topics. A no-fee debt-management service helps members consolidate debt and--in some instances--reduce interest rates and fees, said the credit union. In January, Hanscom FCU introduced CU Thrive, an account that offers a favorable rate when members build savings through a monthly automatic transfer from their checking accounts. “Individuals and families everywhere are looking to do the right thing with each and every dollar, and the financial institutions that serve them should be looking for ways to make that easier,” said Paul Marotta, Hanscom board chairman. “A responsible, educated membership can only be good for all of us as the country moves forward.”

Suncoast Schools awards 100000 grant to career center

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TAMPA, Fla. (2/26/09)--A Suncoast Schools FCU foundation awarded a $100,000 grant to fund a financial assistance program at a high school and middle school career center in Tampa. The Suncoast for Kids Foundation provided the grant to the career center of D.W. Waters schools to help fund a program dubbed “Project Success,” which aims to help students with financial or social obstacles (Tampa Bay Business Journal Feb. 24). Project Success will boost students’ financial literacy by helping them make good educational and professional decisions, said Mary Tlachac, foundation executive director. About 79% of D.W. Waters’ 290 students are economically disadvantaged, according to the school. Suncoast Schools FCU, based in Tampa, Fla., has more than $6 billion in assets.

Survey notes recessions adverse impact on savings

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WASHINGTON (2/26/09)--The second annual America Saves Week survey revealed declining percentages of Americans who believe they are saving enough for retirement and expect to pay off their home mortgage before retirement. However, the survey also found that more Americans are concerned about the impact of the current recession on their personal finances (77%) with over half (53%) being “very concerned.” The survey was commissioned by America Saves and the American Savings Education Council. It was conducted by Opinion Research Corp. Results were announced Monday. Comparing the data collected by the 2008 and 2009 February surveys reveals some of the impacts of the current recession on consumers:
* The proportion of respondents who indicated they are saving enough for retirement declined to 49% from 52%. Those who said they are saving for retirement in workplace programs fell to 51% from 55%; * Mortgage holders who said they expect to pay off their mortgage before retirement fell to 74% from 76%. And the proportion of Americans surveyed who said they own property and either have no mortgage debt or are paying down this debt declined--to 62% from 67%; and * The proportion of respondents who said they do not spend all their income but save the difference fell slightly--to 73% from 74%. Respondents who said they have “sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit” rose slightly to 72% from 71%.
“For most Americans, to-date recession-related financial concerns have been greater than financial losses,” noted Stephen Brobeck, Consumer Federation of America executive director and a leader in America Saves. “But tens of millions who still have their jobs and have suffered little or no loss of retirement savings worry that a deepening recession will eventually cost them income or even their jobs.” Americans can better prepare for an uncertain future by understanding their financial condition, developing realistic spending and savings plans, and saving automatically, survey analysts concluded. However, only about half the country have taken these prudent financial measures. The survey also indicated:
* Little more than half of respondents (54%) know their net worth, the same percentage as last year. * Three-fifths (60%) have a savings plan with goals, but less than half (47%) have a “spending plan that allows you to save enough money to achieve the goals of your savings plan.” These percentages are down a little from last year’s 62% and 49%, respectively. * Less than half of respondents (42%) save automatically, outside of work, through regular preauthorized transfers from checking to savings or investments. This percentage of “automatic savers” did not change from last year. * The good news is that more consumers are making an effort to pay down and pay off consumer debt. The proportion who said they are reducing this debt rose to 44% this year from 38% in 2008. And those who said they are now consumer “debt-free” rose slightly to 40% from 39%.
“Research shows that those who plan borrow less and save more,” said Brobeck. “And anyone, regardless of income, can develop useful spending and savings plans.” A number of credit unions across the country are active in America Saves Week, which ends Sunday.

Consumer complaints about banking industry up 15

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ARLINGTON, VA. (2/26/09)--The banking industry received the third-highest number of complaints in 2008 out of all U.S. industries, according to the 2008 annual report released earlier this month by the Better Business Bureau (BBB). Banks received 21,021 complaints, an increase of 15% over the previous year. It was the highest increase of all the industries studied. The cell phone industry was first in complaints and new car dealers ranked second. However, the BBB report indicates that these industries also have a higher rate of resolution with consumers than the average rate--73%--across all industries in 2008. Banks resolved 96% of complaints, the BBB report said. “While BBB saw a 7% increase in [overall] complaints, we also experienced a 15% increase in requests from consumers for pre-purchase information on the reliability of businesses,” said Steve Cox, BBB spokesperson. "Given the current economic recession, consumers are being more cautious on where and how they spend their money and are looking for objective information that helps them easily and quickly make informed decisions on the reliability of businesses,” he added. “Industries that do a large volume of business are naturally going to have a larger number of complaints. This is why it’s important to look at how a company responded when BBB approached them with consumer complaints, and not just the sheer number of complaints,” Cox said. Of the top 10 industries for complaints, only two saw a decrease in complaints: Internet services saw a 16% decrease, and furniture store complaints decreased 3%.

CU System briefs (02/25/2009)

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* FORT WORTH, Texas (2/26/09)--OmniAmerican Bank--a former credit union-- reported to the Federal Deposit Insurance Corp. that counterfeit cashier's checks bearing its name are in circulation. The items display a routing number--102000979, which is assigned to JPMorgan Chase Bank, Denver. While similar to authentic cashier's checks, the bogus items display a padlock icon and security feature statement on the right side, with the word "REMITTER" in the lower left corner. Authentic checks display the routing number 122234822, which is assigned to U.S. Bank in San Diego. OmniAmerican Bank issues its cashier's checks through MoneyGram International using a payable-through account at U.S. Bank. Authentic checks also display a thermochromic security feature at the end of the signature line in the lower right corner. OmniAmerican was created in 1956 as a credit union but converted to a bank in January 2006 … * WASHINGTON (2/26/09)--Seven credit unions in District of Columbia exhibited their products and services at U.S. Rep. Eleanor Holmes Norton's Tax Fair at the Washington Convention Center Feb. 14 (FOCUS Newsletter Feb. 23). Hundreds of D.C. residents received free tax filings and were encouraged to visit the exhibit hall to learn more about, and join, credit unions. During Norton's press conference, she thanked credit unions for participating. They included: Congressional, Department of Commerce FCU, DVA, HEW, HUD, Library of Congress and Signal Financial FCUs. Here, Holmes poses with Tracy Bailey, business development coordinator of HEW FCU. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * HARRISBURG, Pa. (2/26/09)--The Pittsburgh (Pa.) Chapter of Credit Unions has named Children's Hospital of Pittsburgh, a Children's Miracle Network hospital, as its official charity for 2008 (Life is a Highway Feb. 24). The chapter's credit unions, through a variety of fundraisers, raised nearly $20,267 for the hospital. Chapter representatives were given a personal tour of the new children's hospital after presenting the check Friday … * RANCHO CUCAMONGA, Calif. (2/26/09)--The California and Nevada Credit Union Leagues have promoted state and regulatory lobbyist Melissa Ameluxen to director of state government affairs. In her new position Ameluxen will oversee the state legislative and regulatory affairs for credit unions in the two states. She succeeds Keri Bailey, who is now vice president of government affairs for the California Grocers Association. Ameluxen will continue to work from the league's Sacramento office. She previously served as field representative, legislative assistant and district director for California State Assemblyman Russ Bogh, and as a campaign manager for various California state legislators, including Assemblyman Bill Emmerson …

FSCC shared branching adds CU in Micronesia

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SAN DIMAS, Calif., and MAITE, Guam (2/26/09)--Government of Guam Employees FCU, an associate member of the Defense Credit Union Council (DCUC) and based in Barrigada, Guam, is joining the Financial Service Centers Cooperative Inc.'s (FSCC) shared-branching network--just in time for a surging military buildup in the region. The credit union is the first credit union in Micronesia--a region stretching from Hawaii to the Philippines--to join a shared-branching network, said FSCC. The credit union will open its branches to thousands of military shared-branch members who are projected to travel to and through the region in the next few years. Guam is predicting 17,000 new residents will arrive on the island in the next five years. U.S. Marines stationed in Okinawa, Japan, will transfer to Guam by 2014, bringing with them thousands of new jobs and an economic boom. Already, the island reports it receives more than one million visitors a year. The credit union, which provides services to more than 40,000 of the island's 175,000 residents, will have easier access to stateside accounts and funds through the shared branch network, said FSCC. "Credit union members are demanding more access to their accounts," said Arty Arteaga, president/CEO of DCUC. "In particular, the millions of military members and their families who belong to credit unions that support the Department of Defense (DoD) need enhanced delivery channels to access their money and accounts through a quick and simple system. For many members, especially those of the DoD establishment, shared branching is a necessity," Arteaga said. Shared-branching services, which will be offered to civilian as well as military members, will be available on the island starting this spring.

Federation weighs in on corporate policy issues

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WASHINGTON (2/25/09)--The board of the National Federation of Community Development Credit Unions adopted resolutions supporting measures to sustain the credit union system, enhance the viability and capacity of low-income credit unions, and aid low-and moderate-income families hard hit by the economic crisis. The resolutions were made during a board meeting this week in Washington, D.C. "We are concerned about the consequences of reduced net worth and return on assets (ROA) that would necessarily result from the measures that the National Credit Union Administration (NCUA) has proposed," said federation President/CEO Cliff Rosenthal. To mitigate those effects, the federation is supporting these legislative and other proposals:
* Corporate credit unions should gain direct access to the Central Liquidity Facility for liquidity and capital; * Troubled Asset Relief Program (TARP) funds should be made available to the credit union movement; and * Share insurance premiums should be spread out over as long as eight years, on parity with other financial institutions.
"These actions will help all credit unions," Rosenthal said. "However, it is important to recognize that small and low-income credit unions are especially vulnerable during this crisis." Last year the pace of liquidations and mergers of low-income credit unions doubled and far exceeded that of the rest of the credit union industry. "If this trend continues," Rosenthal said, "the capacity our credit unions have painstakingly built up over the last 30 years will be dismantled, leaving many low-income communities with little or no access to affordable financial services." The federation expressed particular concern about the potential for a drop in net worth of credit unions resulting from the corporate stabilization measures. It is proposing that NCUA modify the policies of the Community Development Revolving Loan Fund (CDRLF) to enable it to make loans to low-income credit unions for secondary capital. Access to additional sources of secondary capital would help credit unions meet Prompt Corrective Action (PCA) capital standards, bring in additional deposits and expand lending in low-income communities, the federation said. "We are asking NCUA to take the necessary regulatory or policy steps to utilize the CDRLF for secondary capital loans," said Rosenthal, adding that the proposal would involve no additional taxpayer liabilities or expense.' The federation board also endorsed the "Helping Families Save Their Homes in Bankruptcy Act of 2009" (S. 61/H.R. 200). "Because this bill only applies to mortgages where foreclosure is imminent and where the borrower has requested a modification," Rosenthal said, "we believe it is a reasonable proposal."

Erie FCU earmarks 40 million for auto loans

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ERIE, Pa. (2/25/09)--Erie (Pa.) FCU has earmarked $40 million this year for auto loans. Because he thinks a shortage of money for car loans is a big reason for auto sales dipping in 2008, Erie CEO Norb Kaczmarek is pledging the largest amount the credit union has ever set aside for auto loans (Erie Times News Feb. 20). “It’s not going to be invested long-term [and] it’s not going to be put into the mortgage market,” Kaczmarek told the newspaper. “It’s set aside for [car loans]. “I just think there are a lot of people who aren’t lending anymore,” Kaczmarek added. He expects the $259.3 million asset credit union’s auto loan business to grow despite a significant slowdown in the auto industry, due to fewer sources of money being available to consumers, Kaczmarek told the paper.

Nominations open for NACUSO awards

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NEWPORT BEACH, Calif. (2/25/09)--The National Association of Credit Union Service Organizations (NACUSO) is accepting nominations for the 2009 CUSO Collaboration and Innovation Award from NACUSO members. The award will be presented to the winning CUSO on May 4 during the 2009 NACUSO Annual Conference in Las Vegas. Deadline for nominations is at the close of business on March 27. For more information on general rules, criteria and submission on nominations, visit the award link.

MarylandD.C. CUs in Roll in the Dough campaign

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BALTIMORE (2/25/09)--Five Maryland and District of Columbia credit unions are promoting the Roll in the Dough savings campaign. The Maryland and District of Columbia Credit Union Association (MDDCCUA) is a community partner in the program. The two-week campaign, which began Monday and will end March 7, aims to stimulate the public to initiate or increase their savings to reach their personal goals. Individuals can visit one of 52 participating locations and enter a free drawing that will award a $1,000 certificate of deposit, said MDDCCUA (FOCUS Newsletter Feb. 23). Participants include Andrews FCU, Clinton, Md.; FedChoice FCU, Lanham, Md.; HEW FCU, Alexandria, Va.; Money One FCU, Largo, Md.; and MECU of Baltimore. Maryland Gov. Martin O'Malley will proclaim the two weeks as "Maryland Saves Weeks" to bring savings awareness to all Marylanders. The campaign will run in Maryland, D.C., parts of Virginia and Pennsylvania. Other prizes include eight $100 prizes and other giveaways. The event is tied to America Saves Week, which ends Sunday.

Wisconsin league warns of scam targeting small biz

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PEWAUKEE, Wis. (2/25/09)--Scam artists again are taking advantage of current economic uncertainty with a new scam attempt targeting small businesses. The Wisconsin Credit Union League has sent a warning to credit unions in that state so they can alert members. The scam involves letters printed on what appears to be U.S. Small Business Administration (SBA) letterhead and claiming to be from the SBA. The letters request financial account information to qualify the small business for federal tax rebates under the Economic Stimulus Act. However, SBA has not authorized these letters. The scam serves as a reminder to small businesses and consumers that they should be especially wary of communications--whether by phone, e-mail or mail--that ask them to update, validate or confirm account information, said the league. The league sent the warning because many members use credit unions for their business loans or other financial services “Typically you’ll see scam artists posing as financial institutions trying to trick account holders into divulging personal information," said league President/CEO Brett Thompson. "In this case, the scammers are just trying to reach members of a financial institution using a different angle. But no legitimate business--including Wisconsin credit unions, the League or the SBA--would ever solicit financial account information via phone, mail or email.” Businesses receiving the letter should not respond but instead report the letter to SBA’s Office of Inspector General by calling 800-767-0385 or by e-mailing OIGHotline@sba.org.

Banking Commissioner testifies on N.J. CUs strength

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TRENTON, N.J. (2/25/09)--New Jersey Commissioner of Banking and Insurance Steven Goldman noted the strength of the state's credit unions when he testified at a legislative committee hearing on the global economic crisis and the condition of banking and financial services industry in the state. During his testimony before the New Jersey Assembly Financial Institutions and Insurance Committee, Goldman commented that "New Jersey state-chartered credit unions have a combined net worth ratio--that is, ratio of net work to total assets--of 13.83%, which is well above the minimum capital ratio of 6%," said the New Jersey Credit Union League (The Weekly Exchange Feb. 16). Committee Chairman Gary S. Schaer (D-36) noted that the state "is probably in better shape than many of us have thought and understood." Also testifying were representatives from the Federal Reserve Bank of New York, New Jersey Economic Development Authority, New Jersey Bankers Association, and WISS & Co.

New Jersey state funds legislation includes CUs

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TRENTON, N.J. (2/25/09)--A New Jersey legislator has introduced state legislation that would extend the range of investment vehicles used by the New Jersey Cash Management Fund and state pension fund moneys, provided the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF) guarantees the obligation. Existing statutes already grant the director of the New Jersey Division of Investment to place fund moneys in these investment vehicles, but they do not recognize NCUSIF insurance, says the New Jersey Credit Union League (The Weekly Exchange Feb. 16). The legislation (S-2552), introduced by Senate Majority Leader Steve Sweeney (D-3), would extend for up to one year the range of vehicles allowed for investments of the state funds that are intended for investment in fixed-income, debt securities and non-convertible preferred stock. Similar to municipal deposits legislation that Sweeney also has sponsored, the new measure marks the second time the state has proposed that credit unions be given equal footing with FDIC-insured depositories for state and local government funds. Sweeney said he hopes to spur economic growth by creating additional lending capacity among the state's depository institutions, enabling them to make more and cheaper capital available to small business and individual borrowers.

Ohio league board positions filled

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COLUMBUS, Ohio (2/25/09)--The Ohio Credit Union League’s (OCUL) Boards of Directors elected their 2009 officers and filled positions during the February quarterly meetings (eLumination Feb. 18). Positions filled were:
* Jennifer Ferguson, Bay Area CU, Oregon, was elected league chair; * Tim Boellner, AurGroup Financial CU, Fairfield, vice chair; * Barry Shaner, Directions CU, Toledo, treasurer; and * Stan Barnes, CSE FCU, North Canton, secretary.
On the OCUL Services Corp. board:
* Tamlyn Straight-Schervish, Unity Catholic FCU, Parma, was elected chair; * Bill Burke, Day Air CU, Kettering, vice chair; * Barry Shaner, Directions CU, Toledo, treasurer, and * Phil Meyer, Ohio University CU, Athens, secretary.
On the Ohio Credit Union Foundation’s Board of Trustees:
* Kathy Kanipe, Parish FCU, Toledo, was elected chair; * Bill Herring, Cincinnati Central CU, vice chair, * Sonja Delaney, Midwest Community FCU, Defiance, treasurer, and * Tom Furrey, Western CU, Columbus, secretary.

Oklahoma CUs new branches planned before economy sank

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TULSA, Okla. (2/25/09)--Three Tulsa, Okla.-based credit unions have recently opened new branches, which were planned a year-and-a-half to two years ago, but now expansion should slow as the economy has slowed down, according to a local newspaper. The $740 million asset Tulsa Teachers CU opened its 11th branch last month; the $423 million asset Tulsa Federal Employees CU opened a branch last month and expects to start construction on another later this year; and the $89.3 million asset Western Sun FCU plans a fourth location and hopes to absorb another credit union and turn it into a branch in April (The Journal Record Feb. 24). The credit unions’ efforts--during a time when many businesses have cut back or closed--represent positive growth steps and statements of continued faith in their business plans, the newspaper said. Tulsa Teachers CU’s new 3,000-square-foot Claremont, Okla., branch is in a rented space costing $367,000. The credit union has changed the way it intends to continue to grow branches, Kristi Brook Cohea, vice president of marketing and member relations, told the paper. Tulsa Teachers aims to run “very mean and lean,” operating with as small of a staff as possible. It will determine whether it would be better to occupy vacant buildings in the area instead of building new spaces, she added.

IBaltimore SunI Couple with credit woes should join a CU

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BALTIMORE (2/25/09)--A couple who is experiencing financial difficulties should join a credit union for help, consumer advocates said in a Baltimore Sun personal finance column Tuesday. Two years ago, Bank of America (BofA) gave Brian DeCunzo and his wife a $40,000 unsecured line of credit--two-thirds of their annual income. However, BofA recently lowered their credit limit to $24,300. Now the couple is maxed out. A bank official told them their credit limit was lowered because their debt level had gone up, the newspaper said. However, DeCunzo told the paper they have less debt now than when they first took out the line of credit. While a $40,000 unsecured line of credit is very generous, the bank’s sharp cut available credit was “heavy-handed,” consumer advocates told the paper. The DeCunzos should join a credit union to obtain more favorable credit terms, the advocates suggest.

In hard times people turn to co-ops CUs

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PORTLAND, Maine (2/25/09)--When economic times get tough, people often turn to cooperatives, including credit unions, according to an article in the Portland Press Herald Monday. In addition to credit unions, cooperatives also can include local grocers and food-buying clubs, and cooperatives to provide housing or to provide electricity, the article said. When difficult economic conditions arrive, consumers are seeking security and the ability to combine resources for savings--whether it is financial or otherwise, John Murphy, president/CEO of the Maine Credit Union League, told the newspaper. This trend has been evident in other economic downturns such as the 1980s and 1990s when consumers turned to credit unions for safety, security, local ownership and control--factors that provided people with a level of comfort, he added. Maine credit unions experienced 7.7% asset growth last year, compared with 6% the year before, the paper said. Also, credit union loans rose 5.1%--up from 4% the previous year. Savings grew 6%--down from 6.5%. Considering the troubled economic conditions, 2008 was a very good year for credit union growth in Maine, Murphy told the paper.

CU System briefs (02/24/2009)

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* WASHINGTON (2/25/09)--About 500 attendees at the Credit Union National Association's Governmental Affairs Conference (GAC) pledged their commitment to credit unions and raised $2,500 for the National Credit Union Foundation (NCUF). CUNA Mutual Group contributed $5 to NCUF for every GAC delegate who demonstrated the commitment by adding their signature to a "Sign of Commitment." The signature wall was displayed in CUNA Mutual's booth at the GAC. The funds will enable NCUF to sustain and grow its Development Education Program. From left are: Larry Blanchard, CUNA Mutual legislative consultant; Bob Trunzo, CUNA Mutual chief officer, sales; Steve Delfin, executive director, NCUF; and Steve Bosack, deputy director, NCUF (Photo provided by CUNA Mutual Group) … * MUSKEGO, Wis. (2/25/09)--The Corporate Central CU Board of Directors unanimously selected Jim Schrimpf, president/CEO of Brewery CU, Milwaukee, Wis., to fill its vacant board seat. Brewery CU is a $30 million asset, low-income-designated community development credit union serving Milwaukee and surrounding areas. Schrimpf has been active in the credit union movement for 30 years and is a past president of the Milwaukee Metro Credit Union Chapter. He also has served as a director of the Wisconsin Credit Union League and the League Services Corp., and is past president of the Milwaukee Chapter of the Appraisal Institute … * PLANO, Texas (2/25/09)--Southwest Corporate FCU Senior Vice President of Operations Jody Beck has announced she will retire, effective March 7, to build a new house and help build her husband's business. Beck has been with the corporate for 32 years, said the corporate's website. As part of Southwest Corporate's senior management, she built its information technology division from scratch, and helped the company move to new headquarters, negotiate merger opportunities, usher in the Check 21 era and maintain leadership as interim CEO for a year after Francis Lee left to head U.S. Central … * ST. LOUIS (2/25/09)--St. Louis Community CU was awarded a $3,000 grand prize for its efforts in the "You Make a Difference" advocacy program, announced the Missouri Credit Union Association (MCUA). To show appreciation for Missouri credit unions' advocacy efforts, MCUA conducted a drawing for all platinum-level recipients on Feb. 13. Here, from left, MCUA President/CEO Rosie Holub presents the check to the credit union's board Chairman Gerald Brooks and Mike O'Brien, senior vice president and chief marketing officer. (Photo provided by the Missouri Credit Union Association) …

Phish attack volume is up but not for CUs

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NEW BEDFORD, Mass. (2/25/09)--The volume of phishing attacks detected during 2008 grew 66% over the volume during 2007, said RSA Security Inc. However, attacks aimed at credit unions in the U.S. decreased 33% in December 2008 from the year before. Regional U.S. banks were the most-targeted financial institutions, with nearly 57% of that sector attacked in December--a 9% increase over November 2007. Credit unions accounted for 20% of total attacks, while nationwide banks accounted for 23% of the attacks. RSA attributed the overall increase in phishing attacks to do-it-yourself phishing kits. RSA's December 2008 statistics and report on key phishing trends and analysis for all of 2008 noted several findings:
* The number of phishing attacks detected by RSA's Anti-Fraud Command Center during 2008 totaled 135,426 attacks. That compares with more than 90,000 attacks detected in 2007. * The first half of 2008 signified the peak of attacks initiated by the Rock Phish Gang and other fast-flux initiated attacks. During that period, AFCC detected roughly 80,000 attacks. * Companies in the U.S. accounted for 68% of the worldwide attacks--10 times more than the number of brands attacked in the United Kingdom, which ranked a distant second with 6% of attacks. * During the year, phishing attacks moved to new territories such as South America, Central America and the Asia Pacific region. * In December 2008, the number of phishing attacks detected dropped by more than 20% to 8,040 attacks--the second lowest number of attacks during the year. * The number of financial institutions and other brands attacked during December 2008 dropped by almost 15%, with 178 brands attacked, compared with 207 brands attacked during November 2008.
For more information on the study, use the link.

New data breach hits another card processor

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NEW YORK (2/24/09)--Another payment processor has been hit with a data breach that is affecting credit unions and banks. It is the third major breach of a card processor since December and comes on the heels of what may be the largest data breach in history, the Heartland Payment Systems breach. Visa and MasterCard began notifying banks and credit unions Feb. 9 about credit and debit card accounts that were exposed in the most recent breach, involving a payment processor that they did not identify by name (SearchFinancialSecurity.com Feb. 23). The Pennsylvania Credit Union Association and Tuscaloosa (Ala.) VA FCU posted messages on their websites that a breach investigation is under way. Visa informed banks and credit unions that a vulnerability left potentially thousands of credit and debit card numbers exposed between February 2008 through January 2009, according to an alert from Tuscaloosa VA FCU. The report indicated the breach isn't as serious as the breach announced Jan. 20 by Heartland Payment Systems, but said that malicious software was placed on the processor's platform. There is no evidence so far that accounts were viewed or taken by the hackers, said the Tuscaloosa VA FCU. Computerworld (Feb. 23) said the notifications from the card companies indicated that as with the Heartland Payment Systems breach, no unencrypted personal identification numbers (PINs), card verification codes or customer Social Security numbers were exposed. It also didn't involve magnetic stripe data on the back of the cards. Alabama CU, also of Tuscaloosa, said Thursday it had been notified Feb. 17 of a breach at an unknown card processor. "We have been notified by Visa that a lengthy list of Visa ATM/debit card numbers was included as part of a data breach at an unknown vendor's location," said the credit union. The fraudulent transactions are primarily characterized as purchases of prepaid phone cards, prepaid gift cards, and money orders from Wal-Mart, and usually occur in $100 increments, said the credit union. As a result, Alabama CU decided to limit purchases on its cards to $99 per day. Replacement cards have been ordered for every card that is blocked. Cardholders will still be able to conduct PIN-based ATM transactions, up to $500 per day or the limit permitted by the ATMs.

CUs marketing campaign urges unbanking

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NORTH HAVEN, Conn. (2/24/09)--A credit union in Connecticut has developed an "Unbank" marketing campaign aimed at encouraging consumers to consider credit unions as a viable option to banks. The new campaign by Connex CU, a $337.4 million asset credit union based in North Haven, Conn., encourages people to go online and write about what frustrates them about banks (HartfordBusiness.com Feb. 23). The message board, located at www.UnbankNow.org has compiled more than 40 posts, many of which criticize banks for issues ranging from subprime lending to fees. The credit union is also trying to take advantage of headlines that large national banks have received during the economic downturn to try to increase its market share. Tansley Stearns, vice president of sales and service at Connex, told the newspaper that the credit union sees it's different from banks, but not a lot of people are aware of the differences. With the campaign, the credit union hopes to underscore its advantages and clear up misconceptions about credit unions. The article outlines the credit union difference.

Gentile New Jersey CUs want corporate in future

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HIGHTSTOWN, N.J. (2/24/09)--A recently held New Jersey Corporate Credit Union Forum made one point: New Jersey credit unions want a corporate credit union network in the future. That message “came through loud and clear” from the more than 30 credit union leaders in attendance, wrote Paul Gentile, president/CEO of the New Jersey Credit Union League (NJCUL), in the league’s newsletter (The Weekly Exchange Feb. 16). The National Credit Union Administration’s (NCUA) Advanced Notice of Proposed Rulemaking on corporate credit unions addresses potential structural changes at corporate credit unions. Some significant structural changes are being considered, Gentile said. “For example, should the payments processing functionality of corporates be stripped out and housed in a national credit union service organization to segregate the investment and payments businesses? NCUA also is looking at the number of corporate credit unions. Does the credit union movement need 28 corporates in a business that benefits from scale?,” Gentile asked. “One idea that is being floated is a regional-based corporate system,” Gentile wrote. “Under this model, there would be much fewer, larger corporates serving defined fields of membership. Some corporates are advocating that competition, while not being completely eliminated, is reduced by calling on credit unions to ‘pay to play,’ so to speak, by choosing a primary corporate, which would require the CU to keep a certain amount of capital at that corporate.” Capital is an issue to be considered with a new corporate network. The system has been undercapitalized for years, but has performed so well it has never been an issue, Gentile added. “Another key area is investment authorities,” Gentle wrote. “Some believe corporates should be limited to what they can invest in, given our current situation. However, credit unions should consider investment authorities very carefully and not just look at our current situation. “If we significantly limit authorities, it will be difficult for our corporate system to deliver a competitive investment offering that will bring value to credit unions,” he added. “Some believe the focus should be more on concentration risk. Many don’t think enough attention was paid to concentration risk, no matter what the investments were rated.”

Program helps homebuyers purchase foreclosed properties

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NEW BEDFORD, Mass. (2/24/09)--Officials in New Bedford, Mass., are offering a mortgage program intended to help home buyers purchase foreclosed properties in the city with assistance from state and local entities and private bank and credit union assistance. Several credit unions are involved. The "Buy New Bedford" mortgage product offers 30-year, fixed-rate mortgages with below-market interest rates, lower down payment requirements, and the possibility of cost savings by skipping private mortgage insurance (SouthCoastToday.com Feb. 21). New Bedford has hundreds of properties that have been foreclosed. Among the credit unions and banks participating in the program are two Fall River-based credit unions: Fall River Municipal Employees CU, with assets of $246.3 million, and St. Anne's of Fall River, which as $746.4 million in assets. Applicants for the loans must meet income limit guidelines set by MassHousing, a part of the Massachusetts Housing Finance Agency, a quasi-public state entity. Maximum income limits are $78,200 for families with one to two people, and $89,999 for families of three or more. They also must meet credit score guidelines. Some of the down payments are as low as 1% to 3%, and interest rates are one-fourth to one-half percentage point below market rates. The program provides education and foreclosure prevention counseling and other programs to support affordable home ownership.

12 Missouri CUs tout benefits at state Capitol

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JEFERSON CITY, Mo. (2/24/09)--Missouri lawmakers learned about the benefits of credit unions at Credit Unions in the Community Day Feb. 18 at the Missouri Capitol Rotunda.
From left, Treina Lind, St. Louis (Mo.) Community CU, talks with State Sen. Robin Wright-Jones (D-5) at Credit Unions in the Community Day Feb. 18 at the Missouri Capitol Rotunda.
Twelve Missouri credit unions displayed table topics that showed how credit unions help their members and their communities (The Missouri difference Feb. 20). “The lawmakers were very interested in payday loan alternatives considering the current financial condition,” said Heather Misuraca, St. Louis-based Gateway Metro FCU branch manager. “They took literature from our table to learn more, and most of them thanked us for coming.” The uniqueness of credit unions was also touted by lawmakers. Columbia-based Tigers CU Business Development Officer Laura Royse was introduced by State Rep. Mary Still (D-25) on the House floor during session. Tigers is one of only four student-run credit unions in the country, Still said.
Mary Still (D-25), left, introduced Laura Royse, Tigers CU, Columbia, on the Missouri House floor to recognize Tigers as one of only four student-run credit unions in the U.S. (Photos provided by the Missouri Credit Union Association)
“Rep. Still noticed the Mizzou sign at my table and wanted to share the concept of a student-run credit union with her fellow lawmakers,” Royse said. “It was exciting to be introduced during session and to spread the word about credit unions.” Credit Unions in the Community Day participants and topics included:
* Anheuser-Busch Employees’ CU, St. Louis--Serving the Underserved; * CommunityAmerica CU, Kansas City--Financial Makeover; * First Community CU, Chesterfield--Savings Programs for Children; * Gateway Metro FCU, St. Louis--Payday Loan Alternatives; * Mazuma CU, Kansas City--Identity Theft; * Mid Missouri CU, Fort Leonard Wood--Helping the Military Community/Homes for Our Troops; * Neighbors CU, St. Louis--Financial Education; * River Region CU, Jefferson City--Partnerships with Schools; * St. Louis (Mo.) Community CU--Volunteer Income Tax Assistance /Get Checking/REAL Solutions; * Tigers CU, Columbia--Student-Run Credit Unions; * United CU, Mexico--Budget and Financial Counseling/ACCEL; and * Vantage CU, Bridgeton--Scholarships;
Additional table topics included Biz Kid$, the Children’s Miracle Network, the Credit Union Difference and National Endowment for Financial Education.

McCormack receives AACUL Farley Leadership Award

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HARRISBURG, Pa. (2/24/09)--Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA), was honored Saturday with the Eugene H. Farley League Leadership Award, sponsored by the American Association of Credit Union Leagues (AACUL).
Jim McCormack, president/CEO of the Pennsylvania Credit Union Association, is joined by previous Eugene H. Farley Leadership Award winners, from left: Dick Ensweiler, 2006; Carroll Beach, 2002; Gary Wolter, 2003; McCormack; Mike Mercer, the first award recipient, 2001; and Eugene Farley (Photo provided by the Pennsylvania Credit Union Association).
The award was presented during an AACUL reception in Washington, D.C., prior to the CUNA Governmental Affairs Conference (Life is a Highway Feb. 22). McCormack was joined by all nine members of the PCUA board of directors, and staff who were in Washington, D.C., for pre-GAC meetings. “I’m surprised and honored to receive this award,” said McCormack, “But this award goes to all of the credit unions in Pennsylvania, association board members past and present, and the wonderful staff of our association.” The award recognizes the efforts of credit union leagues or associations that demonstrate the characteristics of Eugene H. Farley, who retired in December 1999 after 40 years of service to the Virginia Credit Union League.

NJCUL Corporate CU forum reveals survey results

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HIGHTSTOWN, N.J. (2/24/09)--The New Jersey Credit Union League (NJCUL) highlighted results from an online survey of its membership on corporates at its Corporate Credit Union Forum Feb. 19.
New Jersey Credit Union League (NJCUL) Chairman Shawn Gilfedder addresses attendees at NJCUL’s Corporate CU Forum. (Photo provided by the New Jersey Credit Union League)
The survey focused on National Credit Union Administration’s (NCUA) Corporate Stabilization Plan and NCUA’s Advanced Notice of Proposed Rulemaking (ANPR), which focuses on the restructuring of the corporate credit union network (The Weekly Exchange Feb. 16). The session was attended by 30 credit union leaders. NJCUL Chairman and McGraw Hill Employees FCU President/CEO Shawn Gilfedder led the session, explaining the survey results and presenting some structural changes to the corporate network for leaders to consider. Some of the survey findings regarding the stabilization plan:
* Roughly 38% of respondents said NCUA’s plan would be more acceptable to them if they knew it would result in corporate restructuring and new safeguards to prevent a repeat occurrence of the system’s losses; * The most popular alternatives to NCUA’s plan were: Passing legislation that would allow Central Liquidity Facility funding to go directly to corporates, assessing the National Credit Union Shared Insurance Fund premium in stages, and expanding the Credit Union System Investment Program to make it more attractive to credit unions; * The philosophical question of whether to accept government funds showed a strong divide with 27.5% strongly in favor of the credit union movement accepting Troubled Assets Relief Program funds, while 23.5% were strongly against it; * Nearly 40% felt strongly that taking federal funds would put the credit union tax exemption in jeopardy; * About 71.2% of respondents were in favor of allowing NCUA to bypass Generally Accepted Accounting Principles and pull capital directly from undivided earnings or regular reserves so this event doesn’t impact current performance; and * Some 58.8% said there wasn’t enough capital in the natural person credit union system to absorb corporate losses and fund future premium assessments.
The second part of the survey addressed the restructuring of the corporate system, which is the focus of NCUA’s proposed rulemaking notice. Some of the key findings:
* Nearly 77% of respondents said they still have confidence in their corporates; * Respondents were split nearly 50/50 on the potential of a corporate system broken into two charters: one for corporates that handle payment processing and one for those that handle investments; * 58.8% favored limiting corporates’ fields of membership to defined geographic regions; * 58.3% did not believe corporates’ primary role going forward should be payments processing; * 60% said they still will look to corporates for investments after this or any other NCUA plan is complete; * On the question of whether corporates should consolidate, response was 55.1% in favor and 44.9% against it; * 58.7% said there is a future role for U.S. Central; * 72.3% of respondents said they did not want to see corporates fall under the regulatory purview of Treasury; * 87.8% of credit unions surveyed said they plan to pursue investment options outside of the corporate network; and * 85.7% said they did not plan to pursue payment processing options outside of the corporate network.
NJCUL will continue to update its membership on the latest developments with the corporate system. NJCUL will focus on key aspects of NCUA’s Advanced Notice of Proposed Rulemaking and take a position on those areas. The league will then distribute that to its membership for comments. The ultimate goal is to provide an effective ANPR comment letter to NCUA that summarizes the consensus of New Jersey credit union leaders, NJCUL said.

Ralph Nader CUs an island of calm in casino capitalism

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WASHINGTON (2/24/09)--Consumer advocate and three-time presidential contender Ralph Nader and Credit Union National Association (CUNA) senior economist Mike Schenk explain how credit unions have avoided the financial crisis caused by banks in an article in Counterpunch (Feb. 23), a political newsletter. The article, written by Nader, begins: "While the reckless giant banks are shattering like an over-heated glacier day by day, the nation's credit unions are a relative island of calm largely apart from the vortex of casino capitalism." Credit unions didn't invest in speculative derivatives or offer people "teaser rates to sign on for a home mortgage they could not afford," Nader said, adding that credit unions are well-capitalized because they do not have an incentive to go for high-risk, highly leveraged speculation to increase stock values. He quotes CUNA's Schenk, who explained credit unions are portfolio lenders, which means they hold on to the portfolios most of the loans they originate. Although the deepening recession means has affected their surplus and deteriorated their asset quality a bit, most credit unions can live with those conditions without suffering dire consequences, Schenk said.. Nader also discusses the difference between natural person credit unions and corporate credit unions and notes that the credit union model can provide "contemporary lessons" such as "being responsive to consumer loan needs and down to earth with their portfolios." He noted little is being written about how credit unions' regulation, philosophy and behavior have largely escaped the current economic catastrophe. To view the article, use the link.

CU System briefs (02/23/2009)

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* LANSING, Mich. (2/24/09)--The Center for Financial Health moved its operations to the new Lansing headquarters of the Michigan Credit Union League (Michigan Monitor Feb. 23). The center continues to operate as a separate entity. It works with credit unions, other non-profits, banks, and governmental and legislative entities to provide homebuyer education, financial management classes and foreclosure prevention counseling. It has one full-time housing counselor and one part-time employee. Beth Troost, the league's financial education coordinate, will use part of her time to oversee the center as executive director. The league said it hopes to extend the center's services to more credit union members … * JACKSONVILLE, N.C. (2/24/09)--Seventeen-year-old Jacquelyn Lockard found quite a surprise in her account at Marine FCU--an extra $2.2 million dollars. She informed her father, and they called the Jacksonville, N.C.-based credit union to report the mistake. A credit union employee manually entered the wrong number of the huge deposit from the Internal Revenue Service, sending the funds into the teen's account instead. The credit union will give Lockard two days' of dividends--which will total about $125--on the funds as a reward for reporting the mistake (News 14 via Associated Content Feb. 20) … * SALEM, Mass. (2/24/09)--A veteran of the Iraq War was sentenced to three to six years in prison, plus two years of probation Friday after pleading guilty to robbing St. Jean's CU four times during seven weeks in 2008 to finance his drug addition. Derek M. Christiansen, 35, of Lynn, Mass., was charged in robbing the Lynn-based $114.5 million asset credit union on Feb. 7, March 5, March 18 and March 24. He was arrested March 24 after a police officer recognized his hat from a surveillance camera at the credit union (The Daily Item Feb. 20) … * BEAUFORT, S.C. (2/24/09)--Another new scam involving bogus checks from credit unions has surfaced. In the newest scam, a secret shopper service is mass mailing to individuals cashier's checks purporting to be from MCAS Beaufort FCU, a $75.7 million asset credit union in Beaufort, S.C. The checks, written for $2,940, are to pay the recipient for being a secret shopper. The checks are not from MCAS Beaufort, the credit union told the South Carolina Credit Union League …

Expert CUs prepaid cards better than Wal-Marts

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NEW YORK (2/23/09)--An article on a popular AOL website urges consumers to avoid Wal-Mart's "lower-fee" prepaid debit card and check out the cards at credit unions first. The article, written by Zac Bissonnette for on Wallet Pop (Feb. 18), points out that Wal-Mart is slashing the fees on its reloadable pre-paid debit cards. However, consumer advocate Remar Sutton, a former Credit Union Magazine columnist on auto lending and author of Don't Get Taken Every Time, noted that while using the Wal-Mart card is better than check cashing "rip off rates, consumers are still paying a monthly fee to use the card, plus other fees. "Get a free checking account and a free debit card at a credit union before locking yourself into the Wal-Mart card," Sutton told Wallet Pop. "These days, virtually anybody can join a credit union, and virtually all credit unions offer free checking and debit cards."

Michigan family thwarts CUs branch plans

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GRAND RAPIDS, Mich. (2/23/09)--The Grand Rapids Board of Zoning Thursday upheld an earlier decision by the city Planning Commission to reject a credit union's proposal to build a branch because of concerns about traffic congestion. Mike Buwalda and his family opposed Consumer CU's proposal to build the branch, which would have been located behind their home. Three of his school-aged children canvassed the neighborhood and collected more than 150 signatures opposing building on the site (mlive.com Feb. 20). The credit union had hoped to build a branch with three drive-thru teller lanes and two ATM lanes through the back of its site. Opponents argued that a bank branch across the street from Breton Village could create too much traffic congestion in a neighborhood already served by seven bank branches. They also said the drive-thru lanes would create too much noise and headlight glare behind their homes. The zoning board voted 8-0 to uphold the Planning Commission's decision to deny the branch. The credit union, which is headquartered in Kalamazoo and has $262.8 million in assets, told the newspaper it would not submit new plans for the site or appeal the board's ruling, but would "do what's right for the community and the neighborhood."

Young thieves siphon 62000 from CUs ATM

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ARLINGTON, Wash. (2/23/09)--Police are investigating a series of thefts at a Washington state credit union's ATM where thieves tricked the machine's software program into doubling the funds they withdrew, while giving credit to only half the amount. The machine, at Boeing Employees CU (BECU) in Smokey Point, Wash., dispensed nearly $62,000 over several months (The Seattle Times Feb. 13). Police used surveillance cameras at the ATM and records of the withdrawals to break the case. One 17-year old girl, who was caught on camera taking $16,000 out of the ATM, confessed and led police to other suspects, including her 18-year-old boyfriend who withdrew about $10,000. The thieves tricked the software program so that the machine did not recognize it had dispensed money and instead repeated the withdrawals. A $100 withdrawal would net the thieves $200. They used a combination of personal accounts and prepaid debit cards to access the funds. The credit union said the machine has been fixed.

500000 donation to fund Polish studies chair at Columbia

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BROOKLYN, N.Y. (2/23/09)--Columbia University will get a new chair of Polish Studies position, thanks to Polish & Slavic FCU (PSFCU), which Friday donated the final $181,000 toward the position's creation. That brings the total donated by the Brooklyn, N.Y.,-based, $1.89 billion asset credit union toward the program to $500,000 the past five years. Roughly $3 was raised to create the program. The program will provide the first Polish Studies curriculum at an Ivy League School, according to the credit union (PR Newswire Feb. 20). It will promote cultural and scientific achievements of Poland and the Polish people, and will work with the Council of Polish Supplementary Schools to help administer Polish Language Regents exams, taken annually by students attending the ethnic schools. PSFCU is the largest ethnic credit union in the U.S. and was one of the first to sign onto the project, with an initial donation of $20,000. "This is a prime example of what we like to call the 'credit union difference,'" said PSFCU CEO Bogdan Chmielewski. "We are deeply entwined in the lives of Polish-Americans, and we feel a strong responsibility to improving and celebrating their lives and heritage. We truly feel we make a difference in the lives of our members, and that's something no bank can do."

CUs participate in America Saves Military Saves Week

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WASHINGTON (2/23/09)--Credit unions and the rest of the nation are celebrating smart savings habits this week. The third annual America Saves Week and Military Saves Week kicked off Sunday and will focus on savings efforts through March 1. Today at noon EST, America Saves and the American Savings Education Council will release a survey of American's savings habits and progress. It will tell how Americans are responding to the recession, how they are managing everyday, emergency and retirement savings; how savings behavior has changed since last year's survey; progress on debt payments and key savings habits; and attitudes toward various savings practices and the use of tax refunds. America Saves Week is part of the America Saves campaign managed by the Consumer Federation of America. Last year, more than 75,000 people attended more than 1,800 events promoting savings during the week. Military Saves is a Department of Defense-level campaign, focusing on encouraging military members and their families to save every month to provide for their immediate and long-term goals. This year, the campaign has expanded to include Military Youth Saves program, geared to youth. The cornerstone of the Military Saves campaign is the Saver Pledge, a commitment to exercise good financial habits and encourage others to do the same. Savers who enroll online receive electronic newsletters and e-wealth coach advice (U.S. Fed News Feb. 17) . More than 80 defense credit unions and military banks have participated in activities in the past. Credit unions are participating in the events. For example, Aberdeen Proving Ground FCU, Aberdeen, Md., is a partner in Maryland Saves, a local savings campaign. It runs through March 7 and supports the America Saves and Military Saves national campaigns that encourage individuals and families to build wealth through savings. In the Maryland Saves campaign, participants will automatically be entered in a drawing to win one of two $250 12-month certificates, the credit union announced.

Shot fired in robbery at Heartland CU

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VERONA, Wis. (2/23/09)--A suspect fired a handgun while robbing the Verona, Wis., branch of Heartland CU Thursday, but no one was injured, police said. The suspect--a hooded man in his late 20s--fired one shot during the robbery (Wisconsin State Journal Feb. 20). The suspect fled the robbery scene on foot with an undisclosed amount of cash. Police said a vehicle driven by another man could be involved. The robbery resulted in the Verona School District locking down all of it schools and barring outside visitors. Heartland CU, based in Madison, Wis., has $146.7 million assets.

Vermont offers CUNAs certified fin counselor training

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SOUTH BURLINGON, Vt. ( 2/23/09)--The Association of Vermont Credit Unions (AVCU) Social Responsibility Committee informed credit union manager/CEOs in the state last week about a new program that gives every Vermont credit union the opportunity to have a Certified Credit Union Financial Counselor (CCUFC) on staff within a year. The Vermont CCUFC Training Program, using the Credit Union National Association’s (CUNA) Center for Personal Development resources, offers the opportunity free to every AVCU credit union as a membership benefit, provided the credit union CEO signs an enrollment form that commits at least one full-time employee to the program. Credit unions with sufficient resources can enroll additional employees to strengthen the core study group and magnify the positive effects and benefits of the program, AVCU said. The program will utilize CUNA’s self-study modules as its training base, supplemented by biweekly conference calls facilitated by project leader Ken King, an instructor at CUNA’s Certified Financial Counselor Schools. King also will lead a one-day conference in Vermont this fall to provide face-to-face counseling skills for students. The plan is for students to achieve their CCUFC designation within a year of the program’s planned April inception. “We are living in unprecedented economic times, and many people are worried about what the future holds,” said AVCU President Joe Bergeron. “We already have certified financial counselors at some of our credit unions, but this program will extend those much needed skills statewide to more than 280,000 Vermont credit union members. “It is our fervent hope that by making this program available to our credit unions at no cost, and without the expense and time needed to attend out-of-state schools, we can immediately help them provide solid financial counseling that will calm the fears of thousands of Vermont consumers,” he added.

IChicago TribuneI Dont overlook CUs for financing

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CHICAGO (2/23/09)--Consumers looking for hard-to-find credit in today’s economy should make sure not to overlook credit unions as a source for financing, according to a Chicago Tribune column Friday. The item also appeared in Sunday's Los Angeles Times. For those among the 90 million people who belong to a credit union, there may be mortgage money available for loans, columnist Lew Sichelman wrote. “Credit unions tend to be overlooked by borrowers, largely because they don’t employ a stable of loan officers, and real estate agents rarely recommend them to their clients,” Sichelman wrote. “In other instances, many members are simply unaware that their credit unions are in the mortgage business.” He also mentions how consumers can use the credit union locator to find credit unions. See the link.

Filene calls for innovators on economic stimulus initiative

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MADISON, Wis. (2/23/09)--Filene Research Institute is asking credit union volunteers to get involved with Filene’s Future Focus initiative, a 60- to 90-day review and innovation process focusing on the national economic stimulus package. The American Recovery and Reinvestment Act is intended to stimulate the U.S. economy in the wake of the economic downturn brought about by the subprime mortgage crisis and the resulting credit crunch. The bill includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education, health care, and infrastructure, including the energy sector. “Innovation is an inclusive process,” said Denise Gabel, Filene chief innovation officer. “Who knows, Filene may get a dozen or three thousand responses. Either way, credit unions and consumers need solutions now.” To deliver the anticipated outputs to policy-makers and credit union decision-makers, help is needed in four areas:
* Discovery--Identifying key areas like housing, lending and energy; * Ideas--Generating new solutions; * Shaping--Testing and narrowing the best ideas; and * Implementation--Bringing new solutions to market.
For more information, use the link.

CU System briefs (02/20/2009)

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* DEARBORN, Mich. (2/23/09)--Dearborn police and the Federal Bureau of Investigation were looking for a man who left a package inside a branch of Dearborn Financial CU during a robbery Thursday morning. The robber said the package contained a bomb. However, it contained no explosive materials, said police. Authorities evacuated the area while the package was dismantled. Police believe the suspect left the package to help secure his escape after the robbery, which occurred after 9:45 a.m. He fled with an undisclosed amount of cash (The Detroit News Feb. 19) … * PANAMA CITY, Fla. (2/23/09)--Tyndall FCU announced a casting call for its new television campaign. The deadline is today for submitting photos. The $884.4 million asset, Panama City-based credit union invited members and employees of all ages to submit photos for the pre-selection casting process. It's looking for members to act as a military family; older retired couple; three recent college graduates; a single male or female who is in the 20s; a family with three or four children; an intergenerational family; a dock or boat worker; a mid-40s male; and early 30s professionals … * DUBLIN, Ohio (2/23/09)--The Ohio Credit Union Foundation has awarded a $5,000 disaster relief grant to the World Council of Credit Unions for its Disaster Relief Fund for Australia, where a number of credit unions' employees and members lost their homes to brushfires last month (eLumination Newsletter Feb. 18). The fires killed at least 200 people, destroyed at least 7,000 homes and at least a dozen villages … * GORHAM, Maine (2/23/09)--Maine credit unions raised more than $25,000 in the 15th Annual Dr. Noel Paradise Memorial Swish-Out Childhood Cancer Challenge. The event, presented and coordinated by Maine's credit unions, is named for the late father of Jon Paradise, governmental and public affairs manager at the Maine Credit Union League. It was the second straight year the event has raised more than $25,000. Since its inception in 1994, it has raised more than $148,000 for the Maine Children's Cancer Program. The basketball tournament attracted 32 co-ed teams. University CU was one of several credit unions that participated. The team was led by Captain Joe Gervais, center, executive vice president. (Photo provided by the Maine Credit Union League) … * PEMBROKE PINES, Fla. (2/23/09)--School budget cuts have played up the importance of financial education programs, says Power Financial
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CU, a Pembroke Pines, Fla.-based credit union that has joined forces with the city's Chapel Trail Elementary to hold monthly Gator Teller Days during lunchtime. Here, students line up to make their monthly deposits at a mock teller station. A student teller, assisted by a credit union employee, takes the deposits. "By giving children these real-life financial experiences at an early age, we hope to educate them about money management and the responsibilities that come with it," said Allan M. Prindle, president/CEO of the $480 million asset credit union. "We believe that it's especially imperative now as our local public schools are facing severe budget cuts--they will rely on members of the community and we're glad to offer our assistance," he said. (Photo provided by Power Financial CU) … * ALBANY, N.Y. (2/23/09)--Philip Faller of Clifton, N.J., has joined the Credit Union Association of New York as a management consultant. He will work with credit unions in Queens, Manhattan, Westchester and Long Island on strategy development and operations, and act as a liaison between credit unions and the association. Faller previously was a senior business consultant for Members United Corporate FCU. Before that, he was a regional sales executive for Lorimac Corp., where he worked with credit unions to develop marketing plans for mortgage support services …

New WOCCU site matches savings combats poverty

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MADISON, Wis. (2/23/09)--The World Council of Credit Unions (WOCCU) has launched MatchSavings.org to give the public an opportunity to combat global poverty in a new way by matching the savings deposits of the poor in the developing world.
Celia Ortiz Ramos, a housewife and mother of one, is saving to repair drafty wooden walls in her kitchen. MatchSavings.org Givers will help her achieve the goal sooner by providing a savings match. (Photo provided by World Council of Credit Unions)
Despite the critical need for personal savings, the poor in developing countries are more likely to have access to loans than to basic savings accounts, WOCCU said. As tough economic times hit the developed world, foreign aid to developing countries is declining, fewer immigrants can afford to send funds home and employment opportunities are disappearing. With the costs of living continuing to rise, the need for reliable savings becomes increasingly vital, WOCCU said. People living in poverty are desperate to find affordable and accessible alternatives to cover necessary expenses like basic home repair, their children’s education, start-up expenses for a microbusiness and healthcare. A formal credit union savings account and a match incentive help working poor families develop regular savings habits, build assets and attain financial independence, WOCCU said. “Savings are about building wealth,” said Brian Branch, WOCCU executive vice president and chief operating officer. “Families are able to and want to build their savings because that provides them with a way to finance their own growth.” MatchSavings.org builds on WOCCU's global development programs. The first group of MatchSavings.org Savers is from rural Mexico, where WOCCU is helping credit unions deliver financial services by motorcycle, bus, boat and foot, directly to marginalized communities. Here's how MatchSavings.org works:
* Savers open their first savings account at one of WOCCU's partner credit unions in a developing country--currently rural Mexico. Savers establish a six-month savings goal and commit to make regular monthly deposits. * Givers go to MatchSavings.org, choose which types of savings accounts they want to match (housing, education, microbusiness or health) and make a donation. * At the end of the saving period, savers receive the givers’ match on their savings principal, realize their savings goal and become members of a credit union that will help them reach their financial goals in the future.
As the effects of the economic downturn ripple across borders, givers at MatchSavings.org create a counter-effort. Givers’ generosity allows the poor to lift themselves out of poverty through their own efforts and helps them get on a solid path for future, WOCCU said. As MatchSavings.org grows, WOCCU will expand the program to reach more people, communities and countries through its global network of credit unions. Participants can spread the word through their credit union, service groups, social networks, friends and family. Credit unions are not being asked to give to the program, but rather to promote it, WOCCU said. Start-up money for the program is coming from private donations to WOCCU’s foundation. For more information and to make a donation, use the link.

Two Wisconsin CUs cancel plans to merge

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MILWAUKEE, Wis. (2/20/09)--A proposed merger between two Milwaukee-area credit unions has been called off. The proposal, between $281.7 million asset Guardian CU, based in West Allis, and Prime Financial CU, a $200 million asset credit union in Cudahy, would have created the state's 10th largest credit union (Milwaukee Journal Sentinel Feb. 18). The two had planned to merge to create a wider market area and reduce operating expenses. However, Guardian CU notified the Wisconsin Office of Credit Unions that it was withdrawing from the proposal, said the Journal Sentinel. The newspaper said both credit unions were experiencing financial losses, caused by moving funds into loan-loss reserves to cover loans that potentially might turn bad. Prime Financial has hired Christine Dawe as its chief executive, replacing Richard Koenig. In 2007, Dawe served as a temporary CEO of Allco CU, West Allis, after it suffered losses related to subprime lending.

Federation UNFCU FA team up on services for CDCUs

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LONG ISLAND CITY, QUEENS, N.Y. (2/20/09)--Low- and moderate-income consumers in underserved communities across the country will gain access to a suite of financial programs and products at community development credit unions (CDCUs) through a new alliance between UNFCU Financial Advisors (UNFCU FA) and the National Federation of Community Development Credit Unions. "Our goal is to strengthen the capacity of CDCUs by providing them with the tools, expertise and resources they need to deploy sustainable financial solutions to low-income people," said Stephen J. Ryerson, president of UNFCU FA, a subsidiary of Long Island City, N.Y.-based United Nations FCU. "In this way, UNFCU FA is not only supporting credit unions that directly serve communities in need, but it is also fulfilling the UNFCU Board mandate to contribute towards the betterment of the human condition." The alliance enables the financial advisors group to gain deeper insight into the needs of low-income consumers to tailor programs, products and services for them, and for moderate-income individuals. Among the planned offerings are insurance services, investment and mortgage-related products, and real estate buying and selling assistance. The federation has focused the past several years on building bridges between credit unions of all types and sizes, explained federation President/CEO Cliff Rosenthal. "Our new partnership seeks to leverage our CDCU-members' knowledge of the low-income market with the scale and resources of this larger, more sophisticated financial institution," he said. "This collaboration will allow us to further our mission of helping low- and moderate-income people and communities achieve financial independence through credit unions." "UNFCU has a long history serving underserved members and credit unions throughoutAfrica and Latin America, as well as in low-income areas in the U.S., particularly in New York City," said Pablo DeFilippi, federation director of membership services . "We hope that this type of collaboration will create replicable synergies to better serve low-income communities across the nation." Last year the $2.688 billion asset United Nations FCU became the first credit union in the nation to participate directly in the federation's Community Development Investment Program (CDIP), with a $500,000 investment in CDCUs. CDIP has raised more than $46.2 million to invest in low-income credit unions across the U.S. While most of the federation's investment capital is from social investors, foundations, government, and banks, the federation has increasingly turned to the credit union movement for support. UNFCU was the first credit union in the nation to make a substantial investment.

CU National Mortgage Co. closes

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PINE BROOK, N.J. (2/20/09)--CU National Mortgage Co., based in Pine Brook, N.J., announced last week that it is closing, which will affect some credit unions nationwide (Life is a Highway Feb. 18). The company is a wholly owned subsidiary of U.S. Mortgage Corp., a mortgage banking organization, established in 1996. In 1999, CU National Mortgage was developed as a subsidiary of US Mortgage to serve the credit union industry. A message at the company said it is no longer taking calls.

Pa. banking secretary at budget hearing CUs are healthy

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HARRISBURG, Pa. (2/20/09)--Pennsylvania Secretary of Banking Steve Kaplan made it a point to include credit unions in responding to questions during a budget hearing for the Department of Banking, says the Pennsylvania Credit Union Association (PCUA). In responding to questions on credit cards, payday lending, the state of state-chartered banks and credit unions, Kaplan reassured the committee that all state-chartered credit unions and banks are safe, sound, and healthy (Life is a Highway Feb. 19). He also reiterated the new deposit insurance limits for banks and credit unions. Kaplan assured the committee that credit unions are healthy, but also alluded to the corporate credit union issues, adding that the corporates have been affected indirectly, like all financial institutions, said PCUA. Christina Mihalik, vice president of governmental affairs at the PCUA, attended the hearing.

Former Mexico president to keynote WOCCU conference

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MADISON, Wis. (2/20/09)--Vicente Fox, the former president of Mexico who helped energize that country's economy and strengthen its credit union movement, will keynote the 2009 World Credit Union Conference, the annual event of the World Council of Credit Unions. The conference will be July 26-29 in Barcelona, Spain. Fox is expected to address global economic challenges and the role credit unions can play meeting them. Fox served as Mexico's top elected official from 2000 to 2006 and was the country's first democratically elected president in 70 years. During his tenure, he increased public access to financial services and enacted legislation to strengthen Mexico's credit unions and increase access to their services. He left office with a 70% public approval rating. In 2007, Fox became co-president with Italy's Pier Ferdinando Casini of the Centrist Democrat International, a global coalition of more than 100 Christian Democrat parties. Before taking national office, Fox served as governor of the Mexican state of Guanajuato. During his administration from 1995 to 1999, he helped Guanajuato become the country's fifth most productive state, in certain sectors surpassing the national average. Fox also served as president of Coca-Cola Co. for Mexico and Latin America. For more information about the World Credit Union Conference, use the link.

Iowa league conference features Hyland Hampel

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DES MOINES, Iowa (2/20/09)--National Credit Union Administration (NCUA) Board Member Gigi Hyland was the keynote speaker at the Iowa Credit Union League’s Legislative and Regulatory Issues Conference held Tuesday and Wednesday in Des Moines. Hyland told the 120 participants that the event was her first face-to-face appearance with credit unions since the NCUA’s Corporate Stabilization Program was announced.
Click to view larger image National Credit Union Administration (NCUA) Board Member Gigi Hyland and Keith Morton, NCUA regional director of Region IV, discuss NCUA's Corporate Stabilization Program at the Iowa Credit Union League's Legislative and Regulatory Issues Conference Tuesday and Wednesday in Des Moines. (Photos provided by the Iowa Credit Union League)
Click to view larger image Credit Union National Association Chief Economist Bill Hampel explains the macro economic crisis facing the country and how it impacts credit unions at the Iowa Credit Union League's Legislative and Regulatory Issues Conference earlier this week.
Hyland and C. Keith Morton, NCUA regional director of Region IV, answered questions and provided further detail on the accounting treatments of the NCUA assessment. She said NCUA considered a number of other options to stabilization, including doing nothing, conservatorship and Trouble Asset Relief Program (TARP) funding, and the NCUA Board concluded that stabilization was the best, most immediate and least costly option for credit unions. However, NCUA is still open to reviewing all feasible and legal alternatives, Hyland said. Hyland pointed out the strong capital position of the credit union industry and that its culture has always been to build capital and maintain a relatively high return on assets. She emphasized that credit unions have built their capital in good times so that they could withstand the bad. Now more than ever, credit unions should use their capital to weather the storm and to operate business as usual as much as possible, she said. This sentiment was shared by first day featured speaker, Bill Hampel, Credit Union National Association chief economist. He told credit unions, “You need to let the capital protect you in times like these. Use it as an umbrella when it rains, and right now it’s pouring.” In addition, Hampel reviewed the macro economic crisis facing the country and how it is impacting credit unions. NCUA's Morton said that the National Credit Union Share Insurance Fund (NCUSIF) was developed to aid in challenging times like these. “If you’re not going to use it now, when will you?” He also explained how credit unions need to account for the NCUA assessment on their books. In answering audience questions, Hyland and Morton said NCUA does not know at this time if another assessment will be needed down the road. It largely depends on the performance of the securities in which the corporate credit unions have invested. NCUA examiners will treat the assessment as an “extraordinary event that was out of your control,” Hyland told the group. Regarding NCUA's Advanced Notice of Proposed Rulemaking (ANPR) for the corporate system, Hyland encouraged credit unions to “tell the NCUA how the Corporate Credit Union System is working for you and what you need from it in the future.” She urged credit unions to continue to support corporates now more than ever and said, “Failure to do so would be catastrophic.” Another featured speaker was John Caladim, managing director of CU Investment Solutions, an affiliate of U.S. Central. Caladim explained what caused U.S. Central’s other-than-temporarily-impaired losses and the role the corporate played in NCUA's actions, but reiterated that this is not a corporate credit union or industry-specific issue. “We are talking about a systemic problem that is worldwide,” he said. Iowa Credit Union Division Examiner Supervisor Ann Mulcahy described a letter the division issued Feb. 16 to Iowa credit unions indicating that before credit unions pay dividends on shares and interest on depsosits, they should provide for "required reserves, accrued and unpaid expenses, and established loan and lease losses, and as long as the charges do not cause the credit unions' legal reserve to fall below the required Iowa statutory level and the net worth ratio to fall below the well capitalized category.” Additional conference topics included mortgage lending fraud, federal consumer lending, state legislative panel, CUNA legislative update, and collection issues facing Iowa. On Wednesday evening, more than 150 legislators and credit union representatives attended a legislative reception.

NASCUS 2009 Summit set for Boston in August

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ARLINGTON, Va. (2/20/09)--The National Association of State Credit Union Supervisors (NASCUS) will celebrate the 100th anniversary of the state credit union charter at its annual State System Summit in Boston Aug. 20-22. Federal Deposit Insurance Corp. Board Member Tom Curry, National Credit Union Administration Board Member and NASCUS liaison Gigi Hyland, and Chip Filson of Callahan and Associates are among the event's confirmed speakers. As the nation faces an unprecedented economic environment, the NASCUS summit will offer system-wide collaboration on how state credit unions can continue to provide financial health solutions for the next 100 years and beyond. “For the past 100 years, beginning in Massachusetts in April 1909, state regulators and credit unions have worked together to develop innovative, safe and sound financial services for credit union members,” said Mary Martha Fortney, NASCUS president/ CEO. “We take great pride in this 100th anniversary and look forward to beginning the second century of a strong state credit union system.” Attendees who register early for NASCUS’ 2009 Summit can receive an “Early Bird” rate. Additional savings are available when three or more attendees are from a single organization. For more information, use the link.

Oklahoma CU board approves takeover of CU

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TULSA, Okla. (2/20/09)--The Oklahoma State Credit Union Board has approved the takeover of Tulsa’s Frisco Employees CU, Tulsa, by Western Sun FCU, Broken Arrow. The merger, which will take effect April 1, was approved by the board on Tuesday. The move will help Frisco obtain better services for its 2,109 members, said the Oklahoma Banking Department. Western Sun has 16,659 members (The Journal Record Feb. 18). After the merger, Western Sun will have about $100 million in assets.

County pulls 5 million comp funds from CU

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OREGON CITY, Ore. (2/20/09)--Clackamas (Ore.) County’s decision to withdraw the $5 million it had deposited at Clackamas Community FCU is hurting the credit union. The county had deposited the funds as part of its employee deferred compensation program, but now will invest the withdrawn money with ING, a Dutch financial conglomerate (blog.oregon.live.com Feb. 19). While the county’s decision to consolidate accounts and pare down fees that employees will have to pay is understandable, the matter could have been handled better, credit union officials told the news outlet. The withdrawal of the $5 million was a big hit for the $178.7 million asset, Oregon City, Ore.-based credit union to absorb, Barry Rotrock, Clackamas Community FCU board chairman, said. Rotrock said the credit union could have put together a very strong offer if it had been allowed to bid to manage the account.

IBoston GlobeI CUs paying for others mistakes

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BOSTON (2/20/09)--Credit unions nationwide are paying a price for poor decisions made by others, a Boston Globe columnist wrote Friday. “Why are credit unions suddenly on the hook for an investment meltdown that could easily cost the entire industry the kind of money it earns in a whole year or even more?” wrote columnist Steven Syre. “The answer isn’t about mistakes made by credit unions. Those small institutions are paying a price for decisions made somewhere else by someone else--calls that seemed reasonable at the time but worked out very badly.” Credit unions are being assessed special charges “to help bail out one large institution that serves their industry [U.S. Central] and bolster two dozen more [the other corporate credit unions in the U.S.] like it,” Syre wrote. The declining value of mortgage-backed securities are the main reason for the problem, Syre added. “Compared with the trillion-dollar rescue packages under negotiation in Washington, the new problems facing credit unions look like a rounding error,” Sayre continued. “And the vast majority of credit unions, which tend to maintain high capital cushions, will be able to eat the cost and move on if they must.” However, the corporate stabilization plan will still have repercussions for credit unions by making it harder for them to lend, said Michael Hanson, president of the Massachusetts Share Insurance Corp.--which insures credit union deposits in the state that exceed federal limits. “Recklessness by financial giants caused most of our problems. Your local credit union is paying a price just the same,” Syre concluded.

State lawmakers support Iowa CUs Little Guy

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DES MOINES, Iowa (2/20/09)--Iowa state legislative leaders showed their support for Iowa credit unions and credit union principles represented by the “Little Guy” at the Iowa Credit Union League’s (ICUL) annual Legislative and Regulatory Issues Conference Feb. Tuesday and Wednesday in Des Moines.
Attendees at the Iowa Credit Union League’s annual Legislative and Regulatory Issues Conference included, from left, (front row): Warren Morrow, Coopera Consulting; State Sen. Brian Schoenjahn (D-12); and Marybeth Foster, Iowa Credit Union Foundation. From left, (back row): Dick Noble, University of Iowa Community CU, Iowa City; Andy Hawkinson, DuTrac Community CU, Dubuque; Joe Hearn, Dupaco Community CU, Dubuque; Pat Jury, Iowa Credit Union League president/CEO; and Jason Norton, DuTrac Community CU, Dubuque. (Photo provided by the Iowa Credit Union League)
More than 100 Iowa credit union representatives convened at the conference to learn about legislative issues affecting the credit union industry and to interact with legislators. Conference participants and state legislators were introduced to “The Little Guy,” who represents hard-working men and women of Iowa that credit unions serve. Speakers included U.S. Rep. Bruce Braley (D-1), State Rep. Tom Schueller (D-25), State Rep. Kevin Koester (R-70) and State Sen. Jeff Danielson (D-10). Schueller praised the Iowa credit union movement for providing individual development accounts to help low-income Iowans acquire assets through a matched savings and financial literacy program. Danielson commended the credit union industry’s sustainable, community-oriented business and leadership model. He said he hopes Iowa’s Main Street values come to the forefront in these challenging times. Also, ICUL recognized State Sen. Brian Schoenjahn (D-12) with the league’s Youth Financial Literacy Award, given to state lawmakers instrumental in advocating for financial literacy. Schoenjahn, a former teacher, is passionate about improving the financial well-being of all Iowans through requiring financial literacy instruction in Iowa schools, ICUL said. Last year, historic legislation--Senate File 2216, which requires the teaching of financial literacy in all Iowa schools--was passed with his leadership and direction.

CU System briefs (02/18/2009)

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* LANSING, Mich. (2/19/09)--General Motors (GM) has announced it is supplying dealers with special incentives and a merchandising kit to support the Invest in America credit union auto loan program. A special Presidents Day Event offers incentives for buyers and dealers to use credit unions for financing through March 2, according to a letter to credit union CEOs from Mark LaNeve, GM vice president, vehicle sales, service and marketing, and David Adams, CEO of CUcorp and the Michigan Credit Union League. For more information about the nationwide auto loan program, visit www.lovemycreditunion.org … * HARAHAN, La. (2/19/09)--The Louisiana Credit Union League has scheduled several chapter informational sessions about the National Credit Union Administration's Corporate Stabilization Program. Lake Charles Chapter will meet Friday; Alexandria Chapter will meet March 4; Shreveport Chapter, March 5; and Monroe Chapter, March 10. The East and West Orleans Chapters and the Baton Rouge Chapter conducted sessions earlier this week … * SAN JOSE, Calif. (2/19/09)--San Jose police are seeking a man responsible for four armed robberies since Oct. 20 of two San Jose credit unions and a retailer. He is wanted in the Oct. 20 robbery at lst United FCU (now a branch of Sacramento-based The Golden 1 CU); an Oct. 30 heist of a shoe store; and the Dec. 10 and Jan. 14 robberies of KeyPoint CU (CBS5 Feb. 17 … * VIRGINIA BEACH, Va. (2/19/09)--A Virginia Beach, Va., man was sentenced to 38 years in prison Tuesday for robbing Virginia Beach Schools FCU, on July 20, 2006. Dwight G. Simpkins, 48, was convicted by a jury on armed robbery, armed burglary, and firearm charges in June. Simpkins walked into the credit union with a handgun and fled with $13,000. He was arrested three days later (The Virginian-Pilot and The Ledger Star Feb. 18) …

Tulsa Federal ECU changing to fed charter to expand biz lending

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TULSA, Okla. (2/19/09)--For the first time in 15 years, a state-chartered credit union in Oklahoma has received approval to change to a federal charter. The Oklahoma State Credit Union Board approved the charter change of Tulsa Federal Employees CU, a $423.1 million asset credit union based in Tulsa (The Journal Record Feb. 18). Tulsa Federal President Phil Hart told the newspaper the credit union sought the change for two reasons: to potentially expand its commercial business lending and to be regulated by the National Credit Union Administration, which regulates only credit unions. The Oklahoma Banking Department regulates both credit unions and banks. A federal charter would allow a loan participation waiver of the credit union's business and commercial loan limitations, boosting the amount from 12.25% of assets to the 20%. The credit union doesn't have a waiver and there is no provision under state law to get a waiver. The last credit union to switch from state to fed charter in Oklahoma was Oklahoma City-based Tinker FCU, which received a federal charter in 1994. A charter conversion means the state board would have 22 state-chartered credit unions to oversee out of the state's 98 credit unions.

Wisconsin CUs share view on foreclosures at hearing

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MADISON, Wis. (2/19/09)--Two Wisconsin credit unions provided the credit union viewpoint on foreclosures during testimony last week before a state Assembly Financial Institutions Committee hearing, according to the Wisconsin Credit Union League. Bob Bruemmer, executive vice president of Landmark CU, New Berlin, and Brian Punty, CEO of Antigo-based CoVantage CU, shared how they and other credit unions in the state have worked to help their members avoid foreclosures and stay in their homes (The League Feb. 18). "I believe our willingness to work with our members is common among credit unions," Prunty told the committee. "For instance, credit unions contacted and responding had heartwarming stories of success working with their members to keep them in their homes. In short, credit unions believe taking care and working with member-owners is a vital part of their missions." He explained how the $678 million asset CoVantage CU tried to help those facing foreclosure by other lenders. "Last fall, our board approved a 'Rescue Refinance' program, which … allows us to extend loans to families who are in foreclosure with another lender, or to those in trouble due to an extreme rate increase under an adjustable-rate mortgage with another lender," Prunty said. He noted the credit union can extend money to people with lower credit scores and limited equity, provided the debt ratio is within the guidelines. "In the four months that we have adopted this program, we have saved three families from potentially losing their home to out-of-state lenders," Prunty said. Bruemmer also shared stories about how the $1.2 billion asset Landmark CU helped members avoid foreclosures. Last year, he said, members of a Hmong family needed an interpreter to translate the loan documents. "They had taken out an adjustable mortgage for $110,000 two years ago and that loan had a current principal balance of $130,000. Their monthly payment was not sufficient to pay the interest due and the difference was just added to the loan balance. Their ‘real’ payment had increased to the point that when the reduced payment option ended, there was no way for them to make the required monthly payments. "They came to us and we were able to refinance their mortgage with a fixed-rate loan, pay off the other institution, and save their remaining equity," Bruemmer said. To read the full testimonies, use the links.

Woman arrested in 26-year-old CU embezzlement

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KENNEWICK, Wash. (2/19/09)--A woman suspected in a 26-year-old embezzlement case involving two credit unions was arrested at her Mesa, Ariz., home Tuesday. Two Kennewick, Wash., detectives arrested 70-year-old Barbara Kurz, who is accused of taking $106,000 from Tri City CU, Kennewick, and possibly $4,000 from GESA FCU, Richland, Wash. (thenewstribune.com Feb. 18). She was shocked but cooperative and said she “knew this day was coming,” Sgt. Ed Wessing, spokesman for the Mesa Police Department, told the newspaper. Kurz was an employee supervisor at GESA’s Kennewick branch, and used the office space there to do paperwork for her own business--Medical CU. She has lived in Arizona since 1985, according to court documents, and under a false name since 1991, the newspaper said. Kurz was 44 years old and a married mother with four children when she left her family and credit union job behind in 1983. She’s being held on a warrant for first-degree theft and faces extradition to Benton County in Washington.

Mortgage originations up 11 at Nevada CUs last year

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LAS VEGAS, Nev. (2/19/09)--Mortgage originations at Nevada credit unions went up 11% last year, bucking the national trend at most U.S. lending institutions during the national economic downturn, said the Nevada Credit Union League. Total mortgage loan activity grew 2.3% during the third quarter. Two forces are behind the growth: Credit unions have more funds, and they are willing to lend, said Daniel Penrod, industry analyst for the league (Las Vegas Review Journal Feb. 18). Credit union lending standards are the same as they have been in the past--whether it be three years ago, five years ago or 10 years ago, Penrod told the Journal. Credit unions didn’t lower their lending standards during the mortgage boom to garner more profits and therefore didn’t experience the troubles associated with more exotic loans that have plagued other institutions, he added. Overall, credit unions are remaining optimistic about growth this year--which will be dependent on whether federal government intervention pushes mortgage rates down, Penrod said. A substantial decline in interest rates could spark the refinancing market and entice new home buyers, he added. Credit unions will continue to see increased lending activity this year because of their conservative lending standards and their ability to accommodate increased demand for lending products, he told the Journal.

CU sees opportunity in down environment

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STOCKTON, Calif. (2/19/09)--Finance Center CU sees opportunity in the down economic environment, its leader told the Record newspaper Wednesday. The newspaper, which serves the San Joaquin, Calif., area, interviewed three banks and Finance Center CU about challenges in planning their future courses and surviving the economic downturn (Recordnet.com Feb. 18). “In times of crisis, you can utilize the crisis to do things you forget about doing in normal times, to make yourself more efficient, to rethink your processes, to analyze what the industry is doing and what your place in the industry is,” Michael Duffy, president/CEO, told the newspaper. The $285.7 million asset, Stockton, Calif.-based credit union made a decision as far back as 2004 not to purchase new products that would have made it more competitive in the real estate market at that time. When Finance Center CU decided to stick with 20% down on mortgages, “people laughed at us,” Duffy told the paper, adding that it’s now clear the decision was the right one.

Study Crisis effects bank customers satisfaction

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ANN ARBOR, Mich. (2/19/09)--Credit unions have outshone banks in yet another customer satisfaction survey, this one for fourth quarter 2008 when the full effects of the financial industry's credit crisis began hitting consumers. According to the American Customer Satisfaction Index (ACSI), customer satisfaction with overall finance and insurance sector services was up 0.7% to 76 on a 100-point scale during the fourth quarter. But not so for banks. Banks retreated from the previous year's results, dropping 4% to a score of 75. The study attributed customers' dissatisfaction to banks that "cut costs across services in order to offset large financial losses from the subprime mortgage crisis." Wachovia, included for the last time before becoming a part of Wells Fargo, saw satisfaction drop 4% to 76. Still, it led the banking scores. Wells Fargo climbed 4% to 72, leaving Citigroup, with a score of 69, at the bottom of the banking category. Credit unions debuted in the ACSI with a score of 84--much higher than banks, said ACSI. "Credit unions are typically smaller than most banks, and their higher customer satisfaction follows a pattern in many industries where smaller companies tend to offer a better and more individualized service," the index said in a press release. ACSI noted that as the current recession has deepened, consumer behavior has changed much more than in earlier economic slowdowns. Consumer spending has continued to weaken while savings have risen, suggested The index, produced by the University of Michigan's Ross School of Business in partnership with the American Society for Quality and CFI Group, is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the U.S. It is updated each quarter.

More lawsuits filed in Heartland breach

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MADISON, Wis. (2/19/09)--Two new lawsuits have been filed in the Heartland Payment Systems data breach, bringing the total to three lawsuits related to the breach, which affected credit unions and their members nationwide. The Philadelphia law firm of Berger & Montague filed a class action lawsuit in U.S. District Court for the District of New Jersey, alleging that Heartland failed to safeguard cardholder data when the company’s computer system was compromised and cardholder data were stolen. Fraudulent activity has occurred on some of the cards, the law firm said (bankinfosecurity.com Feb. 16). Schiller P.C., also a Philadelphia law firm, filed suit in February in U.S. District Court for the District of New Jersey against Heartland, alleging similar charges as the Berger & Montague lawsuit. Previously, a lawsuit was filed Jan. 27 in U.S. District Court for the District of New Jersey in Trenton, N.J., by Chimicles & Tilellis LLP of Haverford, Pa., on behalf of Alicia Cooper, a Woodbury, Minn., resident. The suit alleges that Heartland “made unreasonable, belated and inaccurate statements concerning the breach” (BankinfoSecurity Jan. 29). The Cooper complaint further alleges that Heartland didn’t offer any credit-monitoring services or other relief to consumers affected by the breach. The complaint also says “there are materially misleading statements and omissions in Heartland's public description of the breach and its consequences.” Card payments processor Heartland Payment Systems announced in January that its processing system was breached last year by a malicious software program in what could be the largest data breach to date, with possibly more than 100 million credit cards compromised (News Now Jan. 21). The information breached included card numbers and cardholders’ names. It did not include merchant data, cardholders’ Social Security numbers, unencrypted personal identification numbers, addresses or telephone numbers, said the Princeton, N.J.-based company in a press release.

GAC attendees can sign commitment to CUs

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WASHINGTON (2/19/09)--Attendees at the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) can pledge their commitment to credit unions and in the process raise money for the National Credit Union Foundation (NCUF). CUNA Mutual Group will contribute $5 each to NCUF for GAC attendees who demonstrate a commitment to credit unions by adding their signature to a “Sign of Commitment.” CUNA Mutual’s booth in the GAC exhibit hall (booth 401) will display a 5-by-8-feet signature wall. Everyone who adds their name to the Sign of Commitment will be given a wristband to wear as a symbol of their commitment to the credit union movement. “This challenging economic environment is the perfect time to remind ourselves of the cooperative character that binds us,” said Christopher Roe, CUNA Mutual’s senior vice president of corporate and legislative affairs. “The Sign of Commitment is one way CUNA Mutual wants to show support and reinforce the movement’s philosophy of ‘people helping people.’” NCUF Executive Director Steve Delfin said the additional support provided by CUNA Mutual will enable the foundation to sustain and grow the Credit Union Development Education (DE) program. “Over 800 credit union professionals and volunteers have experienced DE training, which helps put into action the cooperative values and principles that make credit unions uniquely socially responsible,” said Delfin. “CUNA Mutual’s ongoing commitment to NCUF and Development Education is greatly appreciated.” Throughout 2009, the centennial year of the first credit union law, CUNA Mutual plans to take the Sign of Commitment to other events as an opportunity to honor credit unions and their members.

Kinecta FCU youth wins 1100 from IGoogolplexI

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MANHATTAN BEACH, Calif. (2/19/09)--A 16-year-old member of Kinecta FCU in Manhattan Beach, Calif., is the first grand prize winner in a year’s worth of photo contests offered by C-Note, the high school level of the Credit Union National Association's (CUNA) online youth periodical, Googolplex.
Click to view larger imageRebecca Lin, age 16, accepts her $1,000 Googolplex grand prize from Kinecta FCU’s Shannon Doiron. Use the link to view her grand prize-winning photo. (Photo provided by CUNA)
Rebecca Lin’s entry, “A Walk in the Park--and Rain,” attracted the most reader votes in the first round of competition (Things I Like to Do for Free) and won $100. In the grand prize round against other $100 winners, Rebecca’s photo again garnered the most votes, and won an additional $1,000. "I'll definitely be saving the money in my Kinecta Youth Account to put toward college," she said. Kinecta Director of E-Commerce and Creative Services Shannon Doiron used the C-Note photo contest to help get young members involved in the credit union. “We’re trying to establish our website as a focal point, a primary communication channel, with more features and dynamic, age-segmented marketing. Googolplex allows us to add topical content regularly without us having to do everything," he said. "If we didn’t provide it, we’d have a lot less activity on our website," Doiron said. "When we pass young members off to Googolplex, they get what we want to give them to make good connections and build relationships for the future.” Other $100 contest winners and finalists for the $1,000 grand prize included:
* Tanya, 16, Heartland CU, St. Paul, Minn.; * Sammi, 14, Dairyland Power CU, La Crosse Wis.; * Alston, 14, First Choice CU, West Palm Beach, Fla.; * Alex, 13, Fox Communities CU, Appleton, Wis.; and * Lauren, 17, Cessna Employees CU, Wichita, Kan.
Googolplex’s "C-Note" photo contests are open to U.S. residents of the 50 states and the District of Columbia who are age 13-19 years old at time of entry. March 1 is the deadline for entries in the current contest (I Had to Look Twice) and to vote on finalists for the previous contest (My Hopes for 2009).

Pa. man charged in bilking 2 CUs with securities scheme

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BEAVER, Pa. (2/18/09)--The Pennsylvania Securities Commission has accused a Beaver, Pa., man of violating state securities laws for the past 16 years in a ponzi scheme that included defrauding two credit unions out of nearly $200,000. The commission, which did not identify the credit unions, said in an order filed Tuesday against Eugene Miley, doing business as Miley Financial Services based in Beaver, that he had offered and sold certificates of deposit to federal credit unions in the state since 1993 (timesonline.com Feb. 17). The order said Miley asked credit unions to wire money to him to buy the certificates. In return he would make monthly interest payments to the credit union and return the upfront investment when the certificates matured. However, the commission said Miley did not buy certificates but kept the up-front investment funds or made monthly interest payments to other credit unions. He would send phony confirmation letters to clients indicating he had bought the certificates. The two credit unions tried to collect their upfront investments when they matured in January. Each lost about $99,000, said the commission, which did not say how much was allegedly mishandled beyond the two credit unions. The commission ordered Miley to cease the alleged conduct, which violates state securities laws, or face charges.

First arrests made in Heartland breach frauds

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TALLAHASSEE, Fla. (2/18/09)--The first three arrests in a major theft ring have been made in connection with fraud stemming from the Heartland Payment Systems data breach announced in January. A number of credit unions throughout the nation had to reissue their members' credit and debit cards due to the what may be the largest data breach in history. Three men--Tony Acreus, Jeremy A. Frazier and Timothy Johns--were arrested Feb. 10 in Tallahassee, Fla., and charged with multiple counts of credit card fraud, police said creditcards.com Feb. 16 and SCMagazine.com Feb. 13). According to Leon County Sheriff's Office, the three allegedly used credit card information stolen from Heartland's records to electronically encode Visa gift cards. The gift cards were then used to make fraudulent purchases at local area businesses, including several Wal-Mart Stores in Tallahassee. The merchandise purchased with the fake cards was then sold for cash. The sheriff's office said total and declined fraudulent transactions were more than $100,000. However, the fraudulent charges are expected to be much higher and more arrests likely will be made in Florida and nationwide as the investigation continues. Authorities are investigating how the men obtained the data. It is not believed that they are the people responsible for the malicious software that sniffed the data from Heartland. John Maloni, a spokesman for the Princeton, N.J.-based Heartland Payment Systems, told The Tuscaloosa News Friday that the company won't know the number of accounts affected until it completes its forensic investigation in the next few weeks.

Year-end stats reflect strength of Maine CUs

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WESTBROOK, Maine (2/18/09)--Maine’s credit unions experienced a strong year in 2008, with assets, shares and loans all increasing, according to year-end statistics reported by member credit unions to the Maine Credit Union League. Asset growth for 2008 was 7.72%, compared with 6% in 2007, putting Maine credit unions on track to top $5 billion in assets later this year. Loans increased over $163 million or 5.13% for the period, and shares grew 6.11%--figures consistent with national trends. Credit union membership remained stable during the year at about 600,000 members. Nationally, Maine has been ranked as the fifth strongest state for credit unions in the past seven years. In difficult economic times, Maine consumers can trust that credit unions will remain safe, strong and growing in the many ways they work to serve their members, said John Murphy, league president. “Now more than ever, Maine consumers can save on financial services thanks to lower fees and better rates on dividends and loans offered by Maine’s credit unions,” Murphy said. “A recent study showed that Maine consumers can save $73 million each year by using a credit union. “When members use a Maine credit union, they not only receive a great value but also piece of mind knowing that Maine credit unions adhere to responsible lending practices and provide sound financial services,” he added.

IKiplingersI Banks cherry pick CUs open vaults

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WASHINGTON (2/18/09)--An article in an upcoming issue of Kiplinger's Personal Finance Magazine notes that credit unions have plenty of cash to lend and their rates beat banks' fees for loans. "While big banks continue to cherry-pick borrowers, credit unions are opening up their vaults," the article begins. "Thanks to conservative investing and lending policies that largely sidestepped the subprime-mortgage mess, credit unions have plenty of cash on hand. Plus, interest rates on most loans average at least one percentage point lower than at banks," it says. "Money for car loans, in particular, is flowing, as credit unions fill the void left by shuttered or frozen carmaker finance arms," writes associate editor Jessica L. Anderson. She outlines low rates, rebates from credit unions' Invest in America program, and refers readers to www.lovemycreditunion.org. The article also addresses home loans, and CUNA Mutual Group says the dollar volume of real estate loans jumped 11% last year. Bankrate.com's Greg McBride notes that although credit unions are more willing to lend, it's not because of lower underwriting standards. For the full article, in the April issue, use the link.

WOCCU G7 stresses crisis prep unified regulations

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MADISON, Wis. (2/18/09)--Credit unions worldwide see a greater “internationalization” of regulation, and credit union associations should prepare crisis communications plans to help both themselves and their member institutions cope with the worsening global economy, said World Council of Credit Unions’ (WOCCU) G7 members. Those resolutions topped the agenda for the WOCCU G7’s January meeting in Florida.
Click to view larger image Attendees at the 2009 World Council of Credit Unions (WOCCU) G7 meeting included, from left, Pete Crear, WOCCU president/CEO; Dave Grace, WOCCU vice president of association services; Kieron Brennan, CEO, Irish League of Credit Unions (ILCU); David Phillips, CEO, Credit Union Central of Canada (CUCC); Michael Alleyne, board president, Caribbean Confederation of Credit Unions; Uel Adair, ILCU board president Wictor Kaminski, vice president of National Association of Cooperative Savings & Credit Unions, Poland; Bill Knight, meeting facilitator; Melvin Edwards, WOCCU chair; Brian Branch, WOCCU executive vice president and chief operating officer; Barry Jolette, WOCCU first vice chairman; and Garth Manness, president of CUCC. Not pictured: Dan Mica, president/CEO of the Credit Union National Association. (Photo provided by the World Council of Credit Unions)
The WOCCU G7, comprising the world’s seven largest credit union systems, meets annually to discuss issues affecting financial services in general and credit unions specifically. Due to the severity of the global financial situation, the group also held conference calls last year to better understand and analyze the current financial crisis. “The financial issues facing credit unions today are as bad as they have ever been, not only for U.S. credit unions, but also for credit unions in many of WOCCU’s member countries,” said Pete Crear, WOCCU president/CEO. “Collectively, credit unions in WOCCU's G7 group serve nearly 115 million people worldwide. The actions taken by G7 members affect nearly 65% of credit union members globally.” Participants agreed that regulatory “internationalization“ presents challenges for credit unions and requires increased coordination at a global level. At the request of member organizations, WOCCU staff and volunteers regularly lobby before various government bodies. In 2008, WOCCU influenced credit union regulatory issues in Poland and Costa Rica. One of Africa's first credit union laws was passed in Kenya late last year, the result of a six-year effort by WOCCU, U.S. leagues and credit unions, and the Kenya Union of Savings and Credit Co-operatives Ltd.--the country’s credit union association. Taking a more unified approach to global credit union regulatory development would strengthen credit union systems and institutions so each could better serve members, the group agreed. Participants also stressed the need for crisis communication plans suitable for both associations and the credit unions they serve. Credit unions worldwide enjoy a high degree of member confidence and trust, G7 delegates said. Providing crisis plans will be critical to maintaining trust and service to members during tough times. WOCCU G7 representatives in attendance included: Dan Mica, Credit Union National Association, U.S.; David Phillips and Garth Manness, Credit Union Central of Canada; Kieron Brennan and Uel Adair, Irish League of Credit Unions; Wiktor Kaminski, National Association of Cooperative Savings & Credit Unions, Poland; and Michael Alleyne, Caribbean Confederation of Credit Unions (CCCU). Louise Petschler, Abacus Australian Mutuals, attended remotely. Representatives from Brazil, the seventh of the G7 countries, were unable to attend. In addition to Crear, WOCCU officials and executives participating included: Chairman Melvin Edwards, CCCU; First Vice Chairman Barry Jolette, U.S.; Executive Vice President and Chief Operating Officer Brian Branch; and Vice President of Association Services Dave Grace. The G7 will next meet in July during WOCCU's World Credit Union Conference in Barcelona.

United FCU video discusses bank bailouts

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ST. JOSEPH, Mich. (2/18/09)--United FCU (UFCU) is using a video as part of a new educational campaign to help the credit union let the public know that credit unions are a safe, smart and dependable option for financial services--one that is always there for members, especially in times of financial crisis.
Click for videoClick for video.
UFCU reported 11.5% loan growth in 2008, from the previous year, while bank lending saw record decline prior to the government’s bank rescue plan, UFCU said. The campaign appeared in key markets where bailouts are prominent, including Michigan, Ohio, North Carolina and Arkansas, and hopes to create a broader awareness and change the public's impressions of credit unions nationally. “Because banks have branches in every city--often in multiple locations--and ATMs on every corner, credit unions are frequently overlooked as an option,” said Gary Easterling, president/CEO of UFCU. “As an industry, credit unions are considered to be a relatively small player in the field of financial services because they don't have the physical presence that banks do.” The video mentions credit unions’ higher deposit rates, how credit unions do not chase profits but rather focus on the needs of members, and if the recession continues, credit unions will continue to meet the needs of members. By targeting the lack of understanding the public has about credit unions versus other financial service options, UFCU said it hopes to tell its story to eligible non-members who may not realize that credit unions even exist. UFCU also has invested in a website, which will provide more detailed information about the credit union and its membership advantages, and member testimonials, video clip messages from UFCU's CEO, and links to financial tools. UFCU, based in St. Joseph, Mich., has $849 million in assets.

CU System briefs (02/17/2009)

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* LANSING, Mich. (2/18/09)--Eight credit unions piloting Michigan's Save to Win program, which offers members a chance to win a $100,000 grand prize, plus other prices when they open a share certificate and deposit $25 or more, have been identified (News Now Feb. 11). The participating credit unions are: Central Macomb Community CU, Clinton Township; Christian Financial CU, Roseville; Communicating Arts CU, Detroit; E&A CU, Port Huron; ELGA CU, Burton; Frankenmuth CU, Frankenmuth; NuUnion CU, Lansing; and Option 1 CU, Grand Rapids … * LANSING, Mich. (2/18/09)--The Filene Research Institute has been invited back by a Michigan Senate Banking Committee studying foreclosures after Filene officials made recommendations Feb. 11 stemming from their survey of the depth of the foreclosure crisis in Michigan. Shown here during the testimony are, from left, George Hofheimer, Filene chief research officer, and Robert Manning, professor at Rochester Institute of Technology. Manning conducted the survey. Michigan Credit Union League President/CEO David Adams noted that the league will help arrange a future meeting to discuss further Filene's recommendations (Michigan Monitor Feb. 17). (Photo provided by the Michigan Credit Union League) … * LANSING, Mich. (2/18/09)--Lansing, Mich., Mayor Virg Bernero, visited with the Michigan Credit Union League's board of directors at the board's first meeting in the new league headquarters in downtown Lansing. Bernero thanked the group for continuing to support Lansing through its presence in the downtown area and expressed optimism about the local economy. The city is undergoing new development and urbanization (Michigan Monitor Feb. 17). The mayor, left, was accompanied by Robert Trezise, right, president/CEO of the Lansing Economic Development Corp. (LEDC), and Carl Dorshimer, LEDC vice president and director of downtown core. (Photo provided by the Michigan Credit Union League) …

Maine CUs well-positioned to absorb corporate plan

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KENNEBEC, Maine (2/17/09)--Credit unions in Maine are reassuring a local newspaper that they are well-positioned to absorb any hit in capital they'd take under the National Credit Union Administration's currently proposed Corporate Stabilization Program. Sebasticook Valley FCU, Pittsfield, noted that a higher premium to absorb losses in the corporate system would deplete its capital and it would have to delay some capital improvements. However, Sebasticook President Jim Lemieux and other credit unions told the Kennebec Journal Morning Sentinel (Feb. 15) that they have enough capital on hand to see them through increases in insurance premiums from the program. Rick Lachance, president of Maine Education CU, based in Augusta, told the publication the industry as a whole is well-positioned to absorb the premiums "if it comes down to that." Maine Credit Union League John Murphy told the newspaper that the premium is an issue from a budgeting standpoint. Credit unions nationwide currently have the average equity-capital of 11.2%. Assuming additional insurance fees would reduce the industry average to a 10.5% ratio. Waterville-based New Dimensions CU also assured the newspaper the credit union was prepared. The credit union, which has $46 million in assets, would see its insurance assessment increase by $305,000 under the stabilization plan, according to President Ryan Poulin. Augusta-based Maine State CU, with $245.1 million in assets, would likely assume $1.7 million more in insurance premiums in the corporate program. Maine State CEO Norman Dubreiul suggested holding corporate credit unions to the same conservative standards that govern natural person credit unions, according to the Journal.

Alarm triggers statewide disruption to CUs service

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SACRAMENTO, Calif. (2/17/09)--A fire alarm Friday triggered a five-hour disruption that shut down The Golden 1 CU’s 270 ATMs statewide and other services. The alarm in the Sacramento branch of the credit union went off at 7:15 a.m. and automatically triggered a power shutdown, said Scott Ingram, Golden 1 spokesman (The Sacramento Bee Feb. 14). The disruption not only took the ATMs offline, but also disabled the credit union’s website, automated call systems, call centers and online banking, Ingram told the newspaper. All operations were restored by 12:30 p.m. on Saturday. None of the credit union’s 77 branch locations were affected by the disruption, Ingram added. The Golden 1 is a $6.955 billion asset credit union, based in Sacramento, Calif.

Filenes IBlueprintsI catalogs innovation efforts

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MADISON, Wis. (2/17/09)--The Filene Research Institute has released Key Findings: Blueprints for Innovation, a report on the latest findings from Filene's i3 innovation group. The report, which features 12 new idea blueprints and three updated blueprints designed to fuel credit union growth, is authored by Denise Gabel, Filene's chief innovation officer. The report includes i3 (ideas, innovation and implementation) team outputs developed to help credit union members build wealth, navigate financial waters, meet life's milestones, make community connections and borrow. Three updated ideas are on topics gaining national traction: Prize-Linked Savings, The Savings Revolution, and Virtual Finance. "We encourage credit union innovators to keep this catalog of ideas at hand as they develop their organization's goals and tactics for today's challenging times," said Gabel, "and consider how these solutions may meet member needs." Credit unions can review the ideas and evaluate where they fit for their organizations, then consider how to improve the ideas or customize them in the spirit of open source innovation, Gabel said. Full concept documents are available at filene.org/home/innovation. Filene i3 is committed to strengthening the credit union system through the development of new products, services and business models. The work is accomplished by a team of executive-level volunteers supported by their individual credit union. Their aim is to drive open source innovation that benefits all, said Filene.

Arizona Federal closes four branches

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PHOENIX (2/17/09)--Arizona FCU announced Friday that it is closing four branches to deal with a decline in demand for financial services in the economy. The $1.894 billion asset, Phoenix-based credit union said a troubled economy contributed to a large fourth-quarter loss and an undercapitalized position (azcentral.com Feb. 13). No layoffs are anticipated, and the credit union plans to transfer employees from the closed branches to other locations, a company spokesman told the newspaper. “At Arizona Federal, we’ve experienced a decline in demand for financial services across our branch network, which has led us to a difficult but appropriate decision,” Ronald L. Westad, Arizona FCU president/CEO, said in a message on the credit union’s website. “We will be closing four of our branch locations effective April 4, 2009, consolidating them with other nearby locations,” he added. The branches that will close are:
* Greenfield branch, Mesa; * Fiesta Mall branch, Mesa; * South Mountain Branch, Phoenix; and * 48th Street in-store branch, Tempe.
“While we regret having to take this action, we do so as an appropriate step to ensure the long-term success of your credit union,” Westad said on the website. “The operating costs to maintain a 29-branch network in this economic environment are no longer prudent, given the reduced demand. “We remain committed to serving your financial needs, and we’ll re-examine our branch network from an expansion perspective when we return to better times, just as we have from a contraction perspective during these times,” he concluded.

Appeals court upholds life sentence in CU robbery

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WINSTON-SALEM, N.C. (2/17/09)--A North Carolina Court of Appeals has upheld the life sentence of a man convicted as a violent habitual felon in a 2006 robbery of Charlotte, N.C.-based Carolina Postal CU. Gregory Edward Stacey appealed the March 6, 2008 decision by Judge Edwin G. Wilson Jr. in Forsyth County Superior Court. He had been convicted in the Oct. 27, 2006, heist of the credit union, in which he placed a semi-automatic handgun on the counter and told the tellers to fill up a bag. He left with more than $4,229. Stacey had several prior records and served prison terms for previous robberies with firearms. He was convicted of attaining the status of a violent habitual felon and sentenced to life imprisonment without parole. The appeals court said the lower court did not err when it allowed inclusion of evidence related to previous crimes committed during the credit union case and that the evidence was not prejudicial. It overruled Stacey's motion for a new trial based on insufficiency of evidence that he had endangered the lives of the tellers. The appeals court also disagreed with the defendant's argument that the lower trial court abused its discretion in denying his motion for a mistrial after a jury twice informed the court it couldn't reach a unanimous court also was refused. And it said the life sentence did not violate the Eighth Amendment.

Man shot five times at CUs ATM

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SALISBURY, Md. (2/17/09)--A county official using an ATM at State Employees CU (SECU) of Maryland Inc. was robbed and shot up to five times Saturday. Theodore Shea II, Wicomico County director of administration, was in his van using SECUs’ drive-up ATM at the Salisbury branch when an armed man approached the vehicle and demanded money, said a law enforcement officer familiar with the investigation (delmarvanow.com Feb. 16). The suspect fired several times into the vehicle, and Shea was hit three-to-five times police said. The suspect then fled with an undisclosed amount of cash. Shea sustained injuries, including a gunshot wound to the leg, and was transported to a local hospital. His injuries required surgery, but appear to be non-life threatening, Jim Finneran, a spokesman for Wicomico County, told the newspaper. SECU of Maryland Inc has $1.793 billion assets and is based in Linthicum, Md.

Financial Education Resources Center to debut at GAC

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WASHINGTON (2/17/09)--For the first time, five national financial education providers will come together to present a Financial Education Resources Center at the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC). At the Washington Convention Center Feb. 22-25, the Financial Education Resources Center will feature adjacent booths in the Exhibit Hall with resources from these providers:
* CUNA offers resources for credit unions, youth, adults, and underserved consumers. CUNA’s Personal Finance Initiative (PFI) is a new interactive resource. PFI includes research and policy materials as well as best practices and networking opportunities. * The National Credit Union Foundation (NCUF) makes grants to credit unions and partners in innovative programs. NCUF’s largest grant is for Biz Kid$, the first national public television series underwritten by America’s Credit Unions. * The Washington Credit Union Foundation manages the Biz Kid$ program. Biz Kid$’ new season is airing in all 50 states on 97% of PBS stations. Credit union educators can download a curriculum for each episode. * The National Endowment for Financial Education (NEFE) supplies a turn-key curriculum for credit union educators to teach financial planning in high schools. NEFE is also bringing financial education into workplaces to reach young adults and at-risk workers. * The National Youth Involvement Board (NYIB) provides a platform for credit union educators to report on presentations to classrooms and other youth events. NYIB also shares marketing materials to help credit unions attract youth.
NCUF Executive Director Steve Delfin initiated the Financial Education Resources Center after serving on CUNA’s Financial Literacy Task Force. “All of our missions align around providing financial education,” said Delfin. “To carry on this cooperative movement, we must collectively promote financial literacy for Millennials and the next generations of credit union members.” (Millennials are people born between 1980 and 2000.)

New Mexico CUs raise awareness at state capital

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SANTA FE, N.M. (2/17/09)--About 75 New Mexico credit union professionals met in the state’s capital Feb. 4 during Credit Union Day at the Legislature to raise awareness about credit unions and their issues, and to get an update from lawmakers on the legislature now in session.
Showing off New Mexico House Memorial 18 proclaiming Feb. 4 as Credit Union Day are, from left, Credit Union Association of New Mexico (CUANM) Vice President of Governmental Affairs Juan Fernandez, CUANM CEO Sylvia Lyon, and New Mexico’s House Minority Floor Leader State Rep. Tom Taylor--who sponsored the bill. (Photo provided by the Credit Union Association of New Mexico)
The Credit Union Association of New Mexico (CUANM) hosted the event, which started with a luncheon, including guest speakers from the legislature, followed by a trip to the Capitol and an evening reception for lawmakers and credit union professionals. During the luncheon, Rep. Tom Taylor (R-San Juan County), House minority floor leader, announced the passage of House Memorial 18, proclaiming the day as Credit Union Day. The proclamation noted that credit unions serve more than 615,000 New Mexicans, and that credit unions encourage good financial practices and work cooperatively with each other and their members toward economic advancement. The proclamation also recognized the campaign New Mexico credit unions are conducting to raise $1 million for the state’s children’s hospital. The proclamation marked CUANM’s 50th anniversary and the service provided to members since credit unions were established in New Mexico in 1935. Other legislative guest speakers expressing their support for credit unions were State Rep. Al Park (D-Bernalillo County); State Sen. Kent Cravens (R-Bernalillo and Sandoval counties); State Rep. Rodolpho Martinez (D-Grant and Hidalgo counties), who is also a member of the Chino CU board; and Secretary of State Mary Herrera, a member of the Rio Grande CU board. Richard L. Anklam, president of the New Mexico Tax Research Institute, gave an overview of the state’s taxation and budget issues, and former lobbyist Jeff Rendell explained effective ways to communicate and spread awareness of credit union issues. During the luncheon, the New Mexico Little Guy, a redesign of the original Credit Union National Association Little Guy developed in 2007, was unveiled. The New Mexico Little Guy is dressed in a cowboy hat and boots, Zia belt buckle and turquoise bolo tie. He represents the average, hardworking New Mexico credit union member. Credit union also headed to the Capitol to deliver candy and touch base with lawmakers and their staff. Outside the Capitol, Andi Baum, CEO, Everyone’s FCU, Tucumcari; Phyllis Crawford, CEO, Four Corners FCU, Kirtland; and CUANM CEO Sylvia Lyon set up a New Mexico Little Guy standup figure and handed out cutouts and Post-It pads featuring the icon. Passersby expressed enthusiasm for both the new Little Guy and credit unions. Most said they were members of at least one credit union, CUANM said. More than 30 lawmakers attended the evening reception and mingled with the credit union contingent. “About a quarter of the legislative body of New Mexico attended the event and it was obvious from talking to them that they understand and approve of credit unions and the credit union philosophy and mission,” said Juan Fernandez, CUANM vice president of governmental affairs. “I think all our credit union professionals felt the event was an effective way to communicate with their lawmakers and raise credit union awareness.”

CU System briefs (02/13/2009)

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* BILLINGS, Mont. (2/16/09)--A North Dakota man was convicted Thursday of bank fraud, wire fraud, bankruptcy fraud, money laundering and aggravated identity theft. The money laundering involved money transferred from a bank in North Dakota to Wolf Point (Mont.) FCU. Todd Horob, 40, of Williston, N.D., lied about his assets in the cattle business to get loans, said prosecutors during a three-day trial in Billings, Mont. (Associated Press Newswires Feb. 12) … * HARRISBURG, Pa. (2/16/09)--A CO-OP Shared Branch mystery shopping program has given a perfect score--100% --to lst Choice Community FCU, Erie, Pa. (Life is a Highway Feb. 13). The credit union was rated on branch appearance, shared-branching signage, and office hours. Tellers were rated on ability to follow procedures-- such as requesting proper identification, Social Security number, and credit union--as well as on service quality--reviewing the member's receipt, making eye contact, and being professional and courteous throughout the transaction. The program ensures that tellers do not solicit the member to join their credit union or sell services. The credit union is the state's third to get a perfect score. Parkview Community FCU and Erie FCU received perfect scores in 2008 … * PHOENIX (2/16/09)--Arizona State CU has been named the No. 1 credit union in the state for the third year in a row by Ranking Arizona: The Best of Arizona Business, published annually by Arizona Business Magazines. The rankings are based on the largest opinion poll in the state and include more than 250 business and leisure categories. Voters are residents and business leaders throughout the state. Arizona State CU is a $1.3 billion asset credit union based in Phoenix (Business Wire Feb. 12) … * HARRISBURG, Pa. (2/16/09)--John Curdie III, CEO of Homestead, Pa.-based Financial Advantage FCU, has announced his retirement, according to the Pennsylvania Credit Union Association (Life is a Highway Feb. 13). He is working through a transition period with the new CEO, Helenann Kozminski. Kozminski was appointed Jan. 1. She has more than 17 years experience with the Keystone Valley FCU, which merged later with TriState Rail FCU …

Next wave in data security Protecting stored info

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TUKWILA, Wash. (2/16/09)--Protecting stored information is the next trend in data security, according to several industry analysts. Boeing Employees CU (BECU) in Tukwila, Wash., is at the front of that trend. The $8.474 billion asset credit union used to keep its stored data locked down, using an appliance to encrypt data before it was stored to tape (Computerworld Feb. 9). When BECU upgraded its system, it chose a simpler, more secure option--an application that encrypts tapes in the tape library while the data is "at rest." Now encryption is offered at every layer, Kathryn Antonetti, BECU's information technology systems and security manager, told the publication. The upgrade was less expensive--it eliminated maintenance and training costs for the appliance and other headaches, she said. Many companies, focusing on securing data at rest, are considering advances such as tape drive encryption, tape library encryption and enhancements in the way encryption keys are managed, said the article. Data security breaches cost companies roughly $202 per compromised record, according to the Ponemon Institute, which means more companies will look at protecting data at rest. Three techniques exist for protecting stored data, the article said: Encryption of the storage tapes, desktop-level encryption for data sitting in a desktop computer, and management of data encryption keys held on other vendors' key management systems.

Vermont CUs discuss impact of stabilization plan

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SOUTH BURLINGTON, Vt. (2/16/09)--Nearly 75% of Vermont's credit unions connected to a conference call hosted Wednesday by the Association of Vermont CUs (AVCU) on the National Credit Union Administration's (NCUA) Corporate Stabilization Program. Speakers from NCUA, the state regulator's office, and the league's accounting firm joined AVCU President Joe Bergeron in the session (Newslines Express Feb. 13). NCUA Region I Director Mark Treichel gave a brief background of the agency’s rationale for the plan, reiterating that, as mentioned in the Credit Union National Association's nationwide conference call last week, the NCUA board continues to be flexible to alternatives. “As long as they can get over three hurdles, and those hurdles are that they’re realistic, they’re responsible, and that they’re legal,” Treichel said, the NCUA board is “open to whatever scenarios that the credit union industry can come up with." Tricorp FCU CEO Steve Roy, said, “Right now, liquidity is the key." In addition to discussing the current situation, Roy explained that late summer of 2008 was one of the most challenging times for liquidity the corporate had experienced in a very long time. Tricorp performed well through those difficult times and that liquidity in February 2009 is still very good, he said. “We are very appreciative of the support of the membership of Tricorp,” Roy said. “We have all done very well collectively with our liquidity and I hope that continues because that will be the key to us moving through this market.” Tom Candon deputy commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration, which oversees state-chartered credit unions, discussed the effect that the NCUA program would have on Vermont credit unions. Under the current assessment plan, Candon said, two Vermont credit unions would likely drop below 7% capitalization and another 13 would suffer negative returns on assets, resulting in 68% of all state-chartered credit unions being severely adversely affected. “We know that this is a really challenging time here,” Candon said. “We see it on the bank side, our licensed lender side and I was honestly hoping that the credit unions would fair better. They have faired better to date. We need the credit unions there to help make loans to people who are so desperate right now, so this is just one more challenge for you.” Glen Bolster, CPA from the association's accounting firm, A.M. Peisch & Co., said he was in agreement with NCUA’s accounting instructions with respect to 2008 year-end financial statements, but said his opinions may change once the American Institute of Certified Public Accountants issues further guidance.

Loveless departs U.S. Central

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LENEXA, Kan. (2/16/09)--U.S. Central FCU confirmed Friday that its chief investment officer, Connie Loveless, departed earlier this month. Loveless left U.S. Central on Feb. 6, the second in senior management to leave the corporate wholesaler since U.S. Central announced a $1.1 billion loss on its 2008 portfolio. David Dickens, former executive vice president of asset/liability management, also left, it was announced Feb. 6 (News Now Feb. 6). U.S. Central told News Now that it does not comment on the circumstances of an employee's departure.

California towns CUs weathering economy

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BAKERSFIELD, Calif. (2/16/09)--Several Bakersfield, Calif.-area credit unions experienced losses last year--as did many U.S. financial institutions--as they weathered a down economy. While eight of nine Bakersfield credit unions lost money in 2008, the institutions are well-capitalized, their deposits are insured, and they will get through the downturn just fine, credit union executives said (bakersfield.com Feb. 11). All Bakersfield credit unions placed more cash into their rainy-day funds in 2008 than they lost on bad loans, the newspaper said. Bakersfield is trending along the same path as the rest of California, Daniel Penrod, industry analyst with the California Credit Union League, told the paper. Although the league hasn’t processed the state’s year-end financial data yet, areas that experienced the most wide-ranging real estate price swings are the one most impacted by the economic downturn, Penrod added. Financial results for Bakersfield’s nine credit unions in 2008:
* Kern Schools FCU, $1.7 billion in total assets, net loss: $24.3 million; * Safe 1 CU, $322 million assets, net income: $1.3 million; * Kern FCU, $265 million assets, net loss: $2.5 million; * Chevron Valley CU, $123 million assets, net loss: $240,000; * Kern Central CU, $39.1 million assets, net loss: $348,000; * Bakersfield City Employees FCU, $23.9 million assets, net loss: $124,000; * Espeeco FCU, $9.6 million assets, net loss $41,600; * Star Energy CU, $7.1 million assets, net loss $48,000; and * Bakersfield Community FCU, $3.3 million assets, net loss: $75,000.

Maine league featured on Portland TV

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WESTBROOK, Maine (2/16/09)--Jon Paradise, governmental and public affairs manager for the Maine Credit Union League, was featured in a primetime, five-minute segment during the “6 O’Clock News” on Portland-based TV station, WGME News 13. Over the past few months, the league has responded to a record number of media inquiries and requests for information and comment on a variety of topics, including safety and soundness, security, data breaches, credit union difference, youth financial education and--most recently--availability of credit, auto lending and the economy. During the segment, Paradise highlighted the availability of credit at Maine credit unions, noting some of the creative lending programs that credit unions offer. He detailed the participation of Maine credit unions in the Invest in America auto loan program and the opportunities it offers members for saving on new General Motors and Chrysler vehicles. “This program offers our members real savings, and credit unions are about value and savings for members,” Paradise told WGME Anchor Gregg Laguerquist. “It has also enabled a number of our credit unions to establish and strengthen relationships and partnerships with local auto dealers, as a number of dealers have reached out to credit unions regarding this program.” Laguerquist also asked for an update on lending at Maine credit unions. “Lending remains strong and has been particularly solid the past couple of months with members refinancing, and also mortgage lending,” Paradise replied. “The message is that Maine credit unions are extending credit to consumers and are ready, willing and able to provide any reasonable loan to members. “Maine credit unions remain focused on serving our members and that means working individually with each member to determine the needs and situation, and how the credit union can help,” he added. WGME replayed parts of the interview in later newscasts, including a prime position on its “News at 10” broadcast, a partnership the station has with the local FOX affiliate, airing the segment right after the conclusion of the top-rated “American Idol.” John Murphy, league president, added: “Our role is to provide information and serve as a resource for the media and consumers, especially in today’s uncertain and ever-changing economic environment. We have positioned Maine credit unions as very strong, solid and safe, and that is an important message for members and other consumers to hear.”

Heartland losses multiply for CU

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WATERVILLE, Maine (2/16/09)--Losses due to the Heartland Payments Systems data breach have tripled for one Waterville, Maine-area credit union. Healthfirst CU was first notified Jan. 12 that 261 of its members’ cards were compromised. Now, the credit union has learned that 550 more cards were affected--putting the total at more than 800, Lynda Quirion of Healthfirst CU, told BankInfoSecurity.com (Feb. 12). The total amount taken from member’s cards is between $60,000 to $70,000. Replacing the cards will cost the credit union $2,500, Quirion said. Healthfirst’s staff also is feeling strained by the breach. The credit union already has spent 300 hours contacting members and re-issuing cards, Quirion told the news outlet. Many of the fraudulent purchases were made at convenience stores, gas stations, and fast food restaurants, the credit union said. Healthfirst has $13 million in assets.

Kansas CUs meet with state legislators

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TOPEKA, Kan. (2/16/09)--More than 160 Kansas credit union employees and volunteers attended the Kansas Credit Union Association’s (KCUA) annual Day at the Capital Wednesday. The event gave credit union supporters statewide a chance to meet with state legislators and share information about credit union efforts to serve Kansas consumers. Credit union attendees heard from a panel of legislative leaders about the opportunities and challenges that face the 2009 Kansas legislature. The panel was composed of State Senate President Steve Morris (R-Hugoton), House Speaker Pro Tem Arlen Siegfried (R-Olathe), and House Minority Leader Paul Davis (D-Lawrence). Newly appointed State Treasurer Dennis McKinney (D-Greensburg) also addressed attendees and said his office is enthusiastic about working with credit unions on financial literacy efforts. “Financial literacy must be a national priority,” McKinney said. “Children who know the power of compound interest will be strong builders for the economy of the future. I look forward to continuing this partnership with the Kansas Credit Union Association to increase the financial literacy of Kansans.” KCUA has partnered with the Kansas state treasurer’s office for more than five years, bringing financial literacy programs to more than 2,500 students statewide. “In these trying economic times, it is more important then ever that legislators are aware of the extraordinary things that credit unions are doing to serve their members,” said Marla Marsh, KCUA president/CEO. “Meeting with their state legislators throughout the day, Kansas credit unions were able to spotlight the credit union difference. It was a great day for Kansas credit unions.”

Bank pulls plug CUs save winter festival

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BURLINGTON, Vt. (2/16/09)--Three credit unions stepped in after a bank pulled its support at the 11th hour on the 2009 Winter Festival in Burlington, Vt.
(Photos provided by the Association of Vermont Credit Unions)
Chittenden Bank had been a long-time major sponsor of the event. Festival organizers had been told the bank would fund the event again this year. However, the former Vermont bank was purchased last year by Connecticut-based People's United Bank, which pulled the funding for the sponsorship (Newslines Express Feb. 13). Three credit unions--Caswell CU, New England FCU (NEFCU), and NorthCountry FCU--all signed on to fill the void when panicked organizers contacted them a few weeks ago. Caswell CU, an $11.3 million asset credit union based in South Burlington, was already signed up to sponsor the festival for a third year in a row. The credit union, assisted by Association of Vermont Credit Unions (AVCU) Vice President Bryan Kent, connected the event's organizers at the University of Vermont (UVM) with the other two credit unions. NorthCountry FCU, a $218.3 million asset credit union based in South Burlington, and the Williston-based, $654.2 million asset NEFCU quickly added their sponsorship support, providing organizers with the funds needed to ensure the event took place as scheduled, said AVCU. This was the 17th year of the festival, which is organized by the event planning class of UVM's Community Development and Applied Economics Department. The event includes the Penguin Plunge to support Vermont Special Olympics, the Ice Walk on Burlington’s Church Street Marketplace, and other area events. The snow sculptors competed to represent Vermont in the National Snow Sculpting Competition in Lake Geneva, Wis. As a major sponsor, NorthCountry’s carving was located adjacent to the Church Street Marketplace piece which traditionally marks the start of the Ice Walk. A dozen sponsored carvings, including those done for Caswell and NEFCU, were located along a three block length of Church Street, with the Marketplace’s fourth and final block reserved for competitive snow sculptures.

Texas foundation hosts statewide NEFE training

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DALLAS (2/13/09)--The Texas Credit Union Foundation will host free, statewide "Train-the-Trainer" seminars to arm credit unions, educators, non-profit organizations and community leaders with skills to motivate youth into adopting positive savings and spending habits. The seminars will employ the National Endowment for Financial Education's (NEFE) curriculum. "There is a mounting body of evidence that suggests our youth have very little understanding of how to manage their personal finances," said Jill Pharr, executive director of the foundation. "Not realizing the importance of savings, wise use of credit, or the difference between the wants and needs can easily lead to financial disaster," she added. The program will help young people obtain a higher level of financial understanding so they avoid poor financial choices, she added. The High School Financial Planning Program (HSFPP), for use in the state's high schools, is sponsored by NEFE in partnership with the Cooperative State Research, Education and Extension Service; US Department of Agriculture, participant Land-Grant University Cooperative Extension Services, as well as the Credit Union National Association and America's credit unions. Courtney Nickles, associate director at the foundation, noted there is a tremendous demand from schools, educators and community organizations for financial education and that credit unions are taking a leadership rolein working with schools to provide the interactive, seven-unit HSFPP program. Nickels will lead seminars in Corpus Christi Feb. 20; Abilene March 20; Longview April 3; Waco May 8; Houston June 12; San Antonio July 17; Austin Oct. 16; and El Paso Nov. 13.

CU System briefs (02/12/2009)

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* WACO, Texas (2/13/09)--A man who sprayed a credit union teller with mace before robbing the credit union was sentenced Wednesday to more than 17 years in prison. Christopher Jerome Brinkley, 39, also was fined $2,000, after pleading guilty to robbing the Waco, Texas-based lst University CU on Sept. 30. Court records filed in U.S. District Court said Brinkley walked into the credit union at about 4 p.m., sprayed the teller, then swiped about $8,500 from the teller drawer. He was caught by police 15 minutes later while changing clothes (Tribune-Herald via Cox News Service Feb. 12) … * LINTHICUM, Md. (2/13/09)--A hologram missing from a driver's license of a person trying to deposit a $12,490 check in October made a staffer at State Employees CU of Maryland suspicious enough to call police. Police said Anthony Girrard Ward, 34, a special-education teacher, admitted to a plot to swindle more than $36,000 in student loans. He promised to meet police to disclose others in the plot but failed to show up. He was arrested Jan. 9, when he presented a fake driver's license during a traffic stop. Ward, who was put on administrative leave Monday by the school that employed him, is charged with 11 felony charges including identity fraud, property theft and forgery (The Washington Times Feb. 11) … * HARAHAN, La. (2/13/09)--The East Orleans and West Orleans Chapters of the Louisiana Credit Union League have scheduled a special meeting Tuesday morning in New Orleans so their credit unions can get their questions answered about the National Credit Union Administration's Corporate Stabilization Program. Jon Flagg, supervisory examiner with NCUA, will present information on the program and address questions (eNews Feb. 11) … * SYDNEY (2/13/09)--Australian Central CU said its net profit dropped 32% to $4 million in the last six months of 2008 while revenue rose 8.1% to $125.3 million. Assets under management increased 16.8% to $3.1 billion, and member deposits were up 8.7% to $3.1 billion. Managing Director Peter Evers noted that business is strong and still growing, with an increase in member deposits and assets under management. He said member demand for new loans fell the past several months with many lowering their debt levels. The loan portfolio saw no material increase in delinquency or write-offs, the credit union said. (Australian Company News Bites Feb. 11) …

Ratings groups react to corporate CU plan

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NEW YORK (2/13/09)--In light of the National Credit Union Administration's (NCUA) efforts to stabilize and support the corporate credit union system, Fitch Ratings Tuesday announced it has upgraded the "Support" and "Support Floor" ratings for all corporate credit unions to "1" and "A+," respectively. However, it also adjusted downward eight corporates' individual ratings. Use the link for the ratings. In upgrading the support level ratings, Fitch noted NCUA's proposal for a $1 billion capital contribution to U.S. Central FCU, its plan to infuse capital into all corporate credit unions, as necessary, from the National Credit Union Share Insurance Fund (NCUSIF), and the agency's development of plans to restructure the corporate credit union system (Business Wire Feb. 10). Fitch said it took action on ratings of individual corporate credit unions due to market dislocation reducing liquidity in the system and the possible sizeable realized losses in some investment portfolios. "By their nature as nonprofit cooperative systems," said Fitch in press release, "corporate credit unions are highly leveraged institutions that generate lean earnings. Meaningful realized security losses, including other-than-temporary impairment charges, could impair the capital positions of corporate credit unions." The ratings also consider the corporate credit unions' exposure to potential write-downs of their paid-in-capital (PIC) and PIC II investments in U.S. Central following its recent report of a $1.1 billion loss for 2008 and NCUA's intervention, Fitch said. Another ratings agency, Standard & Poor's (S&P), which took a tougher position, noted that NCUA's and the movement's support is important in rating the corporate credit unions. "This explicit support for the corporate system has become a major ratings factor for all rated corporates," S&P said. "We still believe that this support should provide U.S. Central and the corporates with the means to weather their current stress and fulfill their mission to members," S&P said. However, citing concerns over opposition to NCUA's corporate stabilization plan, S&P said it has placed counterparty credit ratings of nine corporate credit unions into "CreditWatch with negative implications" category. A 10th credit union is already at that rating. In announcing the ratings, S&P Credit Analyst Robert B. Hoban Jr. said the credit union system's opposition to NCUA's plan "could complicate the regulator's and the industry's efforts to address the deterioration in many of the corporate credit unions' holdings of mortgage-backed and other structure securities." S&P will monitor the progress of the efforts to get additional aid for credit unions from the federal government. It could affirm the ratings if the movement's efforts bear fruit, S&P said.

CUs are first in NCBA video series on co-op benefits

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MADISON, Wis. (2/13/09)--A video has been created to educate the media and general public about the value of credit unions, how they work and why they are different from banks. The eight-minute informational video, produced by the National Cooperative Business Association (NCBA) and Cabot Creamery Cooperative--a co-sponsor of Home & Family Finance Radio--features interviews with credit unions members, employees and industry executives. The credit union video is the first in a series of videos about the benefits of cooperatives to consumers. An accompanying online resource helps consumers locate credit unions in their area. “The credit crisis and subsequent bank bailouts reinforced consumer perceptions that large, for-profit financial institutions are indifferent or even hostile to the interests of their customers,” said Paul Hazen, CEO of NCBA. “Credit unions have stood apart during this crisis. While many banks have faltered due to high-risk, high-reward investment practices, credit unions stuck to their tried and true practice of making responsible loans to their members,” Hazen added. To view the video, use the link.

VITA programs at CUs help taxpayers avoid scams

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FARMERS BRANCH, Texas (2/13/09)--Credit unions nationwide are helping taxpayers avoid scams by offering Volunteer Income Tax Assistance (VITA) and Earned Income Tax Credit (EITC) programs.
United Way Tax Preparation volunteers work at Pacific Service CU, Fresno, Calif. Volunteers offer free tax preparation assistance for people with low- to moderate-income levels. (Photo provided by Pacific Service CU)
With tax season here, the Better Business Bureau is warning people about scams--such as tax reduction schemes, refund anticipation loans, and phishing e-mails--that can leave consumers even worse off in tough economic times (LoneStar Leaguer Feb. 11). Credit unions in many areas are making sure this doesn’t happen:
* Pacific Service CU, Fresno, Calif., is providing access to free tax preparation assistance for people with low- to moderate-income levels. Certified volunteers from the United Way and VITA programs will assist individuals with filling out tax returns and applying for the EITC. “The VITA Program is a great opportunity for the people of the Central Valley,” said Dennis Potts, Fresno branch manager. “The volunteers are certified, the program is free, and the taxpayers will receive their federal refunds quickly.” * First CU, Chandler, Ariz., is sponsoring three VITA sites at its Chandler Corporate branch, its Devonshire/Phoenix branch, and its Glendale branch. Internal Revenue Service-trained and certified volunteers will staff all three branches. * US FCU, Burnsville, Minn., is partnering for the sixth consecutive year with AccountAbility Minnesota to provide free tax assistance for low-income individuals. The credit union also offers Express Refund Loans that allow the taxpayer to access the tax refund in one-to-two business days. The interest-free loan is paid back through the direct deposit of a member’s refund. * GHS FCU, Binghampton, N.Y., is offering free VITA to help community members save money for necessary expenses such as household and childcare. The volunteer tax preparers are students from Broome Community College, Binghampton. GHS is offering free tax preparation from Feb. 2 through April 4. * WESTconsin CU, Menomonie, Wis., and the University of Wisconsin-River Falls Student Accounting Society are offering free return preparation assistance for individuals with an annual income of less than $30,000 per year.
Other ways that credit unions are helping people with taxes include offering tax seminars. BELCO Community CU, Harrisburg, Pa., is offering two. “Tax Management” helps attendees learn about the 2008 tax-return changes and first-time homebuyer’s credit. “Strategies for Reducing Taxes and Funding IRAs” educates attendees on investment strategies for a difficult market, and evaluating retirement plans.

BrightStar CU student branches spotlighted on radio

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MIAMI (2/13/09)--BrightStar CU’s student credit union branches at three schools in the Broward County, Fla., area were profiled in a recent radio story by WLRN/Miami Herald News. Pembroke Lakes Elementary, Flanagan High School and Terra Vella High School have BrightStar branches in their schools. The credit union uses the branches to teach students how to manage their money. Students can open accounts and work at the branches. BrightStar staff members also talk to students in the classroom about auto financing, credit cards and earning interest. One student that WLRN interviewed, Jessica Alvarez, works at the Flanagan High School branch. She plans to attend college to study business or finance. “It’s a really good experience and not everyone gets to do this,” Alvarez told WLRN. To hear the story, use the link.

GTE FCUs work pays off for Super Bowl security

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TAMPA, Fla. (2/13/09)--GTE FCU hosted the Super Bowl XLIII operations center where more than 200 representatives of 31 local, regional and federal law enforcement and emergency medical management agencies provided security Feb. 1.
A mobile command center was set up in the rear parking lot of GTE FCU, Tampa, Fla., to help with security operations during Super Bowl XLIII on Feb. 1.
The fourth floor of the GTE FCU administration building was used as a secure room to house security and emergency operations for Super Bowl XLIII. (Photos provided by GTE FCU)
The center was responsible for security operations during the game. There were no bomb threats, hazardous materials spills, terrorist attacks or other potential catastrophes at the Super Bowl. Because GTE FCU leadership was supportive, representatives from the National Football League, Tampa’s police and fire departments, the Federal Bureau of Investigation, Customs, Homeland Security and others worked under one roof for the first time in Super Bowl history, said Stephen Foster, GTE FCU vice president of real estate. He oversees security, facilities and land acquisition for the credit union. Two years of training and coordination--along with some sophisticated surveillance and communications equipment--ensured that all Super Bowl activities went according to the security and emergency team’s playbook, said the $2.189 billion asset Tampa, Fla.-based credit union. Several weeks before the Super Bowl, operations center team members began working in spaces on the second and fourth floors of the GTE FCU administration building, just north of downtown Tampa. A mobile command center also was set up in the credit union’s rear parking lot. Having all security personnel in one location kept costs down because additional facilities did not have to be built, as was the case in Arizona for last year’s Super Bowl, said Chauncia Willis, emergency coordinator for Tampa Fire Rescue. The only construction project needed for the Super Bowl XLIII security and emergency operations team was the building of a secure room on the fourth floor of the credit union’s administration building. “GTE FCU met a lot of the needs for different agencies,” Willis said. “The NFL felt very comfortable with our decision to use the facility to house multiple command centers for Super Bowl XLIII.”

Government settles V.A. data breach suit

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WASHINGTON (2/12/09)--A U.S. District Judge Tuesday approved plans by the government to pay $20 million to settle a class-action lawsuit brought by veterans whose personal information was compromised when a laptop computer was stolen from the home of a Veterans Affairs employee. Payments will range from $75 to $1,500 for up to 26.5 million veterans who incurred expenses related to obtaining credit monitoring or physical symptons of emotional distress (E-Commerce Times Feb. 11). The lawsuit had alleged invasion of privacy in what was the government's largest data security breach. The breach, coupled with breaches disclosed at TJX Cos. and a state government agency in Vermont, prompted credit unions to look closer at their own security. The V.A. breach occurred in Alabama and helped prompt the Alabama Credit Union League to offer credit unions a security breach response service (News Now Feb. 20, 2007). The stolen laptop contained Social Security numbers and birthdates of veterans and troops on active duty, but no financial account information. The laptop was recovered later intact.

No hats hoods policy considered in Iowa

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CEDAR RAPIDS, Iowa, and ST. LOUIS (2/12/09)--An Iowa town is considering adopting a "No Hats, No Hoods, No Sunglasses" policy to thwart robberies, and Missouri's policy received attention on Iowa TV, reports the Missouri Credit Union Association. Credit unions and banks with the policy ask members/customers to remove hats, hoods and sunglasses--a typical disguise for robbers--before entering the financial institution (The Missouri difference Feb. 11). KCRG-TV, the ABC affiliate in Cedar Rapids, Iowa, featured a news story about the policy in a Feb. 3 broadcast. A reporter traveled to Columbia, Mo., to talk with credit unions and banks that participate in the Missouri program. United CU, Mexico, Mo., was featured in the story. "It's not going to be a cure-all, and it's not something that's going to keep somebody from coming in," said the Betty Clark, president of the credit union. "It's just a deterrent like any other security measure is." At least nine states participate in a "no hats, no hoods" program.

Mich. foundation proposes foreclosure policy reforms

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LANSING, Mich. (2/12/09)--Policy recommendations from Michigan Credit Union Foundation-commissioned study on foreclosures were presented Wednesday before the State Senate Banking Committee. The foundation had commissioned the Madison, Wis.-based Filene Research Institute to examine the state's foreclosure problem and find areas where public policy can make a difference. Filene identified 10 policy proposals. "The Michigan Credit Union League (MCUL) will work with state and federal lawmakers and regulators to review the recommendations and look for ways to implement those policy recommendations that we believe will help move Michigan forward during this difficult economic situation," said David Adams, president/CEO of the Michigan Credit Union League. He added the league "recognizes the need to find a proper balance between helping homeowners stay in their homes and reducing the significant exposure that lenders have in this difficult housing market." The policy recommendations include legislative actions and public and private initiatives. The legislative proposals cover streamlining the foreclosure process, creating shared-equity loan modification programs, requiring lender accountability, strategic and judicious use of consumer bankruptcy filings, and establishing a mortgage modification database. The public and private initiative recommendations include the formation of local and state working groups, responsible debt relief programs, local debt summits and a consumer hotline for assisting homeowners in locating the mortgage holding company. Filene found that many of the national foreclosure initiatives adopted last year have limited effect and that some programs will require future loan adjustments. Michigan is experiencing economic distress faster than any other state, Filene found. Its mortgage delinquency rates are the seventh highest in the nation and its foreclosure rate is sixth highest. A copy of the recommendations is available on MCUL's website.

Missouri CUs raise 281432 for kids hospital

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ST. LOUIS, Mo. (2/12/09)--Missouri credit unions raised $281,432 for the Children’s Miracle Network, the Missouri Credit Union Association (MCUA) announced (The Missouri difference Feb. 11). Credit union donations by region include:
* Joplin--$5,954; * Columbia, Jefferson City--$12,269; * Springfield--$45,789; * St. Louis--$98,662; and * Kansas City--$118,759.
“The recession has many people struggling to make ends meet,” said Mike Augustine, Kansas City CU Chapter chairman. “Some have lost jobs, and with it, health insurance coverage for themselves and their family. That makes our commitment to raise money for seriously ill children more important.”

WOCCU steps up to aid Australian CUs hit by fires

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MADISON, Wis. (2/12/09)--The World Council of Credit Unions (WOCCU) has established a fund to help victims of Australia's brushfires, many of whom are members of the country's credit unions.
Click to view larger image Brushfires have devastated the Australian state of Victoria, already claiming nearly 200 lives. The World Council of Credit Unions has established a fund to help victims. (Photo provided by the World Council of Credit Unions)
WOCCU is working with Credit Union Foundation Australia to collect tax-deductible contributions that will be administered through the Red Cross Victorian Brushfire Appeal. “The brushfires in Australia already have claimed close to 200 lives,” said Brian Branch, WOCCU executive vice president and chief operating officer. “In the true cooperative spirit, we're asking the global credit union movement to support Australian credit unions as they strive to serve their members during this crisis.” The brushfires have ravaged Victoria state, threatening several credit unions, their branches and many of their more than 250,000 members, according to reports. Police in Victoria believe the fires may have been the work of arsonists. “We have a number of member organizations that have been directly impacted by the fires,” said Karen Smith, spokesperson for Abacus Australian Mutuals, the Australian credit union trade organization and a WOCCU member. “At this stage we have no reports of staff lost, but many members have lost their homes and there is potential that some of them may have perished in the fires.” Much-needed cash contributions from credit unions and individuals worldwide assist those whose lives have been devastated by the brushfires, said WOCCU. U.S. tax-deductible donations may be made with a credit card online. Use the link. Donations may also be sent by check to Valerie Breunig's attention at: Worldwide Foundation for Credit Unions, Inc., 5710 Mineral Point Road, Madison, WI 53705. In all cases, please indicate that the donation is designated for the Australian Brushfire Relief Fund. To wire funds or for more information, contact Breunig at 608-395-2055 or e-mail mail Valerie.

Canadas Desjardins Group to cut dividend 44

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MONTREAL, Canada (2/12/09)--Desjardin Group is attempting to conserve its capital amid the recession by cutting its cash dividend roughly 44%. Canada’s largest credit union will pay about 30% of it 2008 margins to members--down from 53% of its earnings in 2007, Andre Chapleau, Desjardin spokesman, said last week (Bloomberg.com Feb. 4). During the past six years, Desjardins has paid about $1.8 billion to members. Desjardins is attempting to bolster its capital base, and the most economical way to accomplish that is by placing more money in reserves, Chapleau told Bloomberg. The 5.8 million-member Desjardins reported a profit of about $448 million for the first nine months of 2008--a 33% decline from a year earlier. Desjardins Group is based in Montreal, Quebec, but also serves other Canadian provinces.

PCUA cuts annual meeting registration fees 50

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HARRISBURG, Pa. (2/12/09)--The Pennsylvania Credit Union Association announced Tuesday that it cut its 75th Annual Meeting and Convention registration fees by 50% in recognition of the challenging economy and impact of the National Credit Union Administration’s corporate stabilization actions on credit unions. The registration fee for credit unions over $20 million in assets will be $175, down from $350; for those with assets under $20 million it is now $100, down from $200. Credit unions receive an early-bird discount if they register by March 27. Ticketed events will remain at original prices. “As credit union CEOs, the association board members recognize that credit union budgets are tight,” said Association Chair Diana Roberts, president/CEO of Hershey (Pa.) FCU. “However, now more than ever, credit unions need to make the most of our cooperative spirit and collaborative strength through our trade association on behalf of the movement. “It is my hope that by reducing the registration fees, credit union leaders will attend the association’s annual convention to gain knowledge and exchange ideas toward enhancing their credit unions,” she added. The association’s Annual Meeting and Convention will be May 14-16 in Hershey, Pa. Keynoting the convention will be personal finance expert and author Jane Bryant Quinn. During the business session, the association will unveil the results of the board of directors’ strategic plan. Education breakout sessions include an economic update, state credit union forum, and sessions on fraud prevention, risk management, and student lending. Association president/CEO Jim McCormack applauded the fee-reduction decision. “Our country and credit unions are facing unprecedented times not seen since the Great Depression,” he said. “As we join to celebrate 75 years of serving members in Pennsylvania, I’m confident that credit unions will grow stronger and more relevant during these trying times.” McCormack added: “As the new Obama administration, Congress, and [Pennsylvania] Gov. Edward G. Rendell all look for solutions to budget deficits and regulatory changes, credit unions need a strong trade association to protect and preserve the rights of credit unions. Collectively, credit unions have strength in numbers and must continue to tell the credit union story.”

Texas league announces three new directors

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FARMERS BRANCH, Texas (2/11/09)--The Texas Credit Union League announced the re-election of two board members and the election of a new director. The three ran unopposed in the elections for their district (LoneStar Leaguer Feb. 10). They are:
* Carol Murray, president of Southeast Community CU, San Antonio, re-elected to the board for Asset Category A (assets of less than $10 million); * Kay Stewart, president of North East Texas CU, Lone Star, re-elected in Asset Category D ($50 million-$100 million assets); and * Buddy Schroeder, president of United Heritage CU, Austin, the new director for Asset Category E (assets of $100 million or more). He will serve the directorship now held by Wayne Vann, president of Navy-Army FCU, Corpus Christi, who chose not to seek re-election.
Their terms will begin in April, after the league's Annual Membership meeting. Elections are underway in two other races for Asset Category B (Assets of $10 million to $20 million) and Asset Category C ($20 million to $50 million assets).

Michigan CUs launch 100000 Save to Win account

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MADISON, Wis. (2/11/09)--Starting in February, members of eight participating Michigan credit unions have a chance to win monthly prizes, and a grand prize of $100,000 by saving throughout the year in a new Save to Win program. The program focuses on how much money people save, in contrast to most reward-type programs based on how much people spend. “The Michigan credit unions in this pilot program are leading the way by exploring new financial solutions to enrich the lives of their members,” said David Adams, president/ CEO of the Michigan Credit Union League. Save To Win aims to energize consumers’ savings habits through a federally insured savings account. Each deposit of $25 into the share certificate earns participants an entry into monthly and grand prize drawings. In addition to the grand prize, credit unions will give away $39,000 in monthly prizes. Those who don’t win a prize will still earn regular interest and build savings, the league said. The pilot program in Michigan is supported by a partnership with the Filene Research Institute, the D2D Fund, and the Michigan league. Save to Win has been championed by Harvard Business School Professor Peter Tufano, founder of the D2D Fund. The program is underwritten by a grant from the Center for Financial Services Innovation (CFSI). “The lack of savings in America can be partly explained by the fact that savings are simply not fun and the motivation to save has been stripped away,” says Denise Gabel, Filene chief innovation officer. “Offering prizes to build a solid financial future is a way to get people excited again.” Tufano said the program “is a modern American version of a program that has been used for more than three centuries to help people save.” “It’s no secret that we are in an economic crisis, especially here in Michigan, and as an industry we have to help people with real solutions,” Adams said, noting that credit unions’ mantra of people helping people “sets credit unions apart from other financial providers.” “CFSI invests in promising new initiatives like Save to Win that are potentially scalable and designed to help the financially underserved start saving and building assets,” said Sarah Gordon, CSFI nonprofit relationship manager. “Combining the concept of savings with the thrill of possibly winning $100,000 will hopefully inspire non-savers to open accounts and start a new habit.”

Wegner Awards Dinner has about 100 seats left

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WASHINGTON (2/11/09)--More than 1,000 credit union leaders and supporters have registered for the 21st Annual Herb Wegner Memorial Awards Dinner presented by the National Credit Union Foundation (NCUF) on Feb. 23. About 100 seats are still available. Seats can be reserved online through a secure page on the NCUF website. (Use the resource link.) Registrants also can download a printable form, complete it off-line, and fax or mail it to NCUF. “We truly appreciate the enthusiasm we’re seeing from credit union supporters who understand how important it is--even in the worst economic times--to share and celebrate the best practices and the best people that credit unions have to offer,” said NCUF Executive Director Steve Delfin. The dinner will take place at the Grand Hyatt Washington, two blocks from the Washington Convention Center, site of the Credit Union National Association’s 2009 Governmental Affairs Conference (GAC). Delfin said NCUF hopes to sell out the main ballroom with 1,100 people. The awards ceremony will showcase four of the credit union movement’s highest national honors:
* Lifetime Achievement Award: Bill Sterner, late president/CEO of Elevations Credit Union in Boulder, Colo. * Individual Achievement Award: Rita Haynes, treasurer, manager and CEO of Faith Community United Credit Union in Cleveland, Ohio. * Individual Achievement Award: Tom Sargent, president/CEO of First Tech Credit Union in Beaverton, Ore. * Outstanding Organization Award: Montana Credit Unions for Community Development in Billings, Mont.
Registration is also still available for the GAC. Use the resource link.

Australian CUs affected by bushfires set up fund

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VICTORIA, Australia (2/11/09)--Australian credit unions have set up a Bushfire Relief Fund to provide emergency relief to victims of devastating Australian bush fires, according to Abacus-Australian Mutual, Australia’s credit union trade association. The bushfires in Victoria have affected several credit unions and building societies (savings and loans) through their branch networks, staff and many of their more than 250,000 members in regional Victoria (Electronic News Publishing Feb. 9). Credit Union Foundation Australia is collecting donations, which are tax deductible and will be used to provide relief through the Red Cross Victorian Bushfire Appeal. Police investigators said arsonists may have set some of Australia’s worst-ever wildfires, with the death toll reaching 173 as of Tuesday (Associated Press Feb. 10). About 400 fires have ravaged Victoria state, driven by 60 mph winds and temperatures as high as 117 degrees, the news service said. About 850 square miles were burned, according to the Victoria Country Fire Service.

CU hopes to spark local economy with low-rate auto loans

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FRESNO, Calif. (2/11/09)--Educational Employees CU (EECU) will begin offering car loans Thursday with interest rates as low as 2.99%, which is several percentage points below the national average. The promotion ends Feb. 20. The deal offered by the Fresno, Calif.-based credit union includes the following conditions: the low rate is good solely in Merced, Calif.; the rate applies only to 2006 model vehicles or older; and members have to qualify to obtain the rate (Mercedsun-star.com Feb. 10). The rate applies for new purchases or refinances, and the credit union is offering 100% financing, EECU told the newspaper. It’s a good development to see financial institutions getting aggressive with auto financing because many banks are not lending or they’re just waiting while matters get worse, Perry Robinson, general sales manager at Merced Volkswagen Kia, told the paper. Several car buyers already had visited Robinson’s dealership Monday after the new rate was announced, Robinson added. EECU has $1.746 billion in assets.

40 CUs among 135 FIs reporting impacts by breach

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ARLINGTON, Va. (2/11/09)--A bank security website is tracking credit unions and banks that have publicly reported they've been affected by the Heartland Payment Systems data breach. As of Monday, of the 135 institutions listed on the site, 40 are credit unions. The site, bankinfosecurity.com, also listed, where available, the total number of cards compromised at the institution. Because the list depends on public announcements by the institutions, the list is considered a tip of the iceberg in terms of actual cards compromised. It is not known what resources the website reviews. The site recently added institutions headquartered in Guam, Canada, and Bermuda that reported their cards were impacted. The 40 credit unions are spread throughout the U.S. in 24 states. In Iowa, five credit unions reported their cards were comprised, the most of any state. Washington follows with four credit unions reporting they were impacted. Maine and Oregon each had three credit unions reporting. Heartland, the sixth-largest payments processor, announced Jan. 20 that its systems were breached in 2008. It processes on average about 100 million transactions a month for more than 250,000 retailers and merchants.

Washington league A.G. ask support on elder abuse bills

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OLYMPIA, Wash. (2/11/09)--The Washington Credit Union League and Washington attorney general are asking for support from the state legislature to strengthen the front lines of financial institutions, including credit unions, to help stop financial exploitation of the elderly. John Annaloro, league president/CEO, and Rob McKenna, state attorney general, asked the state legislature to support House Bill 1788 and Senate Bill 5639--a comprehensive bill introduced by the attorney general’s office to improve financial protections for seniors and those with disabilities--in an op-ed article published Tuesday in The Seattle Times. “For years, banks and credit unions have been on the front lines in the battle to prevent financial exploitation of vulnerable adults,” they wrote. “Tellers and branch managers are on guard, observing and reporting the rising number of suspicious transactions by those other than primary account holders. “Local banks and credit unions also have cultivated great working relationships with law-enforcement agencies,” they added. The bill, which has strong bipartisan support, would mandate training to improve the ability of credit union and bank employees to identify and report financial exploitation. It also would allow financial institutions to freeze accounts if they suspect suspicious activity, and to better share information with law enforcement. Also, it would increase penalties for those convicted elder abuse. The legislation was sponsored by State Sen. Jim Hargrove (D-Hoquiam), State Rep. Al O’Brien (D-Mountlake Terrace), State Sen. Dale Brandland (R-Bellingham), and State Rep. Barbara Bailey (R-Oak Harbor).

Freedom CU board member scouts in inaugural parade

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WARMINSTER, Pa. (2/11/09)--Freedom CU board member Charles Whiting marched in the president’s inaugural parade Jan. 20 in Washington, D.C., with a boy scout troop.
Click to view larger imageCharles Whiting, Freedom CU board member, marched in the president’s inaugural parade Jan. 20 with Boy Scout Troop 358 of Germantown, Pa. (Photo provided by Freedom CU)
Whiting and 33 scouts from Troop 358 marched behind the Ohio State University Marching Band. “The parade highlight was the excitement of passing the presidential viewing stand and seeing the kids being a part of this historic moment,” Whiting said. The troop, selected from more than 1,400 scout troops nationwide, represented the Boy Scouts of America, the credit union said. Freedom CU, Warminster, Pa., has $350 million in assets.

RMJ raises nearly 600000 distributes 300000 in 08

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RANCHO CUCAMONGA, Calif. (2/11/09)--The Richard Myles Johnson (RMJ) Foundation raised nearly $600,000 in 2008, distributing $300,000 to various organizations--including $100,000 to the Biz Kid$ television series and $87,850 in community service grants, according to the California Credit Union League. The foundation also provided $24,000 to Western CUNA Management School for scholarships, $25,000 for the California Credit Union League’s Annual Meeting and Convention, and $6,000 for the league’s Big Valley Educational Conference. Next year’s goal is to give away more community service grants by encouraging credit unions to participate in the numerous quality youth financial education programs available, said Tena Lozano, RMJ Foundation executive director. The foundation raised $595,835 in donations from credit unions, chapters, credit union-related organizations; fundraisers; and Community Investment Fund money. About $120,000 in scholarships were presented to staff and volunteers at smaller credit unions, allowing them to attend seminars, conferences and webinars focusing on operational and industry-related topics. The foundation also noted:
* Jones Methodist Church CU, San Francisco, received a $2,500 grant to continue its Financial Literacy Boot Camp, a third-year effort to provide a week-long summer day camp focusing on youth financial education. * The San Francisco Chapter of the California league and the San Francisco Unified School District received $20,000 toward a financial literacy consortium; * Sacramento District Postal Employees CU received $3,000 to continue its quarterly youth financial education newsletter; * Travis CU, Vacaville, received an $850 grant to defray the costs of transportation so youth from a low-income area could attend a workshop on the Cal Grant program and college budgeting; * National Youth Involvement Board received $1,000 for its annual conference; * The California & Nevada Youth Involvement Network received $500 to help recognize a California or Nevada school for exemplary efforts in youth financial education; * ByDesign Financial Solutions received $35,000 to continue its outreach to at-risk youth with its Financial Firsts program; and * The California Jump$tart Coalition received $5,000 toward its 2008 California Summit on Financial Literacy.
The foundation, established in 1958, is dedicated to providing Community Service Grants to support credit union efforts to spread the financial literacy message to youth.

Former KV FCU chairman opposes conversion to bank

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AUGUSTA, Maine (2/11/09)--Gerald C. Poulin, former board chair of Kennebec Valley FCU (KV FCU), is opposed to the credit union’s plan to convert to a bank, he wrote Tuesday in a letter to the editor of the Kennebec Journal. “For many years, this credit union has been a vital part of the Augusta community,” he wrote. “Today we are in danger of losing our credit union and, if allowed to happen, a big part of our community. Though I am no longer a volunteer, I am still a member and, as a member, I cannot support the credit union’s proposal to convert to bank and then merge with Kennebec Savings Bank. “The credit union was built by its members and it is the members’ assets that they are proposing to give away to the bank,” he added. The merger proposal was announced in September by Beverly W. Beaucage, president/CEO of KV FCU, and Mark L. Johnston, president/CEO of the bank (News Now Sept. 10). The credit union noted in the fall that the conversion and merger would significantly expand its capacity to meet the current and future needs of members. “We've continued to grow steadily since 1962 while maintaining a strong capital base and steadfast focus on member service,” said Beaucage in a September press release. “Our board determined that the long-term goal for KV was to build and maintain a strong presence in the Kennebec Valley offering our members a wide variety of financial services,” she added. To accomplish this, “it makes sense to consider combining our efforts with a local institution that has similar values.” The Maine Credit Union League called the vote of Kennebec Valley FCU's (KV FCU) board of directors to continue with its proposal to convert to a bank and immediately merge into another one “disappointing but just one step in a long process” (News Now Oct. 16). A group of members petitioned the credit union in late January to get access to board minutes related to the conversion proposal ( News Now Feb. 2). KV FCU, based in Augusta, Maine, has $51 million in assets.

Phony e-mail not from Federal Reserve or Treasury

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HARRISBURG, Pa. (2/11/09)--Several leagues are warning credit unions that an e-mail purportedly from the "Federal Reserve Bank System Administration" is bogus. The phony e-mail informs recipients that the U.S. Treasury Department has issued "new directions for U.S. Federal Wire and ACH (automated clearinghouse) online payments," according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Feb. 10). The message includes grammatical errors and informs recipients there are "definite restrictions on Federal Wire and ACH transfers till Feb. 20." The message includes a link to a fake website. It was not send from the Federal Reserve or the Treasury. Those receiving the message are being told, "Do not click on the links." Both PCUA and the Delaware Credit Union League alerted their credit unions to the scam.

CU System briefs (02/10/2009)

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* PALO ALTO, Calif. (2/11/09)--Addison Avenue FCU is offering advice to couples exchanging Valentines--learn to communicate about money. "Just as you shouldn't reserve 'I love you' for one day a year, the key to a financial partnership is regular communication," said Doug Marshall, senior vice president of the $2 billion asset credit union in Palo Alto. "This holds especially true in times of hardship; it's crucial to discuss your situation and plan ahead," he added. The credit union offers six tips to assist couples, including: plan the wedding; consolidate accounts and set expectations; buy a home; become debt free; set aside a "financial date night" to communicate; and optimize finances by cutting out unnecessary expenses and setting aside funds for the important things (Business Wire Feb. 10) … * SPOKANE VALLEY, Wash. (2/11/09)--Numerica CU employees donated more than $11,600 to three cancer care centers that serve Washington
Click to view larger image Click for larger view
and Idaho. The recipients are Cancer Patient Care, serving Spokane and North Idaho; the Tri-Cities Cancer Center; and The Wellness Place in Wenatchee. The funds were raised at Numerica's Annual Benefit Auction, an event it has coordinated for the past 18 years.; a silent auction; and raffles. On hand for the presentation of a check for more than $7,000 were, from left: Rex Reed, president of Spokane's Cancer Patient Care; Numerica employees Kimberly Hulse and Jessica Hildahl; and Cliff Evans, executive director of Cancer Patient Care. (Photo provided by Numerica CU) … * HARRISBURG, Pa. (2/11/09)--The Pennsylvania Credit Union Association (PCUA) has hired Joanne Broderick as a compliance and operations officer (Life is a Highway Feb. 10). Broderick will provide customized compliance solutions for credit unions in the Western part of the state under a new program that will be introduced later this month, said PCUA. Broderick formerly worked as compliance officer at SPE FCU, State College …

N.Y. Senate Majority Leader to banks Learn from CUs

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ALBANY, N.Y. (2/10/09)--The New York Senate Majority Leader cracked a joke at the beginning of his speech to the New York Bankers Association Monday. But the real punch line came later--when he told banks to think out of the box and learn something from their chief competitors--credit unions. Banks need to think outside the box in solving the financial and mortgage crises, said Sen. Malcolm A. Smith, (D-Metropolitan). He noted that credit unions have "by and large escaped problems of our mainstream banking system." The 100 or so bankers attending reacted with incredulous laughter and some eye-rolling, said "The Daily Politics" blog in The Daily News (Feb. 9). Smith told the group: "I know some of you are sitting here and you might say, 'How can you come to this room and talk about credit unions?' The fact of the matter is, business as usual has to change." "We are all in this together, whether they are competitors or not," he added. Smith later told reporters, "I'm not here to make friends. I'm here to do what’s right for the homeowners and people trying to purchase homes….When you think about it, the credit unions are the only ones who basically did not have a challenge in the financial markets, so they did something right. And these guys have to take their head up and say, 'You know what, maybe we need to take a look at what they're doing as well.'" Mike Smith, president of the bankers association, noted that everything was on the table "but clearly with this audience, the credit unions, there's always going to be a reaction." For the article, use the link.

Corporate plan would cost PolishSlavic FCU 7.5 million

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BROOKLYN, N.Y. (2/10/09)--The National Credit Union Administration’s (NCUA) corporate stabilization program would cost Brooklyn, N.Y.-based Polish and Slavic FCU (PSFCU) $7.5 million, PSFCU said. “This bailout will actually hurt us, as our insurance premiums to the National Credit Union Share Insurance Fund will increase $7.5 million just to prop up these failing institutions,” said Bogdan Chmielewski, PSFCU CEO, in a press release.. “Although we remain financially sound and have adequate reserve funds, this is going to negatively impact our bottom line.” PSFCU has 70,000 members and $1.2 billion in assets. It has joined several natural-person credit unions to support the demand that NCUA control the corporate credit union system. NCUA said it would provide $1 billion for the corporate stabilization program. The $1 billion injection is intended to provide reserves to offset anticipated realized losses on some mortgage- and asset-based securities held by U.S. Central, known as the “corporates’ corporate” (News Now Jan. 29).

Desjardins award rules forms for 2009 available

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MADISON, Wis. (2/10/09)--Entry forms for the Desjardins Youth Financial Education Award recognition program are available. The due date is Sept. 4--earlier than usual. The earlier deadline matches deadlines for two other competitions--Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action awards. Participating leagues will determine the entry deadlines for credit unions and chapters for state-level Desjardins competition judging. Details and entry forms are available on the Credit Union National Association (CUNA) website. Judges rate the entries by:
* Awareness and teacher training; * Youth instruction; * Collaboration; * In-school branch programs; and * Legislative and regulatory advocacy.
Last year’s winner, Sonoma County Grange CU, Santa Rosa, Calif., customized the National Endowment for Financial Education High School Financial Planning Program materials to be relevant to youth and adults in the local community. The credit union also teamed up with the local 4-H and participated in local agricultural events. The program reached more than 5,000 youth, CUNA said. For more information, use the links.

CU in Fiji provides 500000 to form insurance plan

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FIJI (2/10/09)--A credit union in Fiji announced it has presented $500,000 to start an insurance plan for credit unions in that country. The credit union is Fiji Public Service CU (FPS CU). The plan is through the Fiji Savings and Credit Union League (Fiji Times Online Feb. 9). According to Manoa Seruvakula, a former commissioner of insurance, Scuna Insurance LTD would apply to the country's reserve bank for an insurance business license and provide the insurance. The proposal aims to encourage savings among potential members of the credit union movement.

Pa. foundation to continue BizKid support

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HARRISBURG, Pa. (2/10/09)--The Pennsylvania Credit Union Foundation approved a grant of $10,000 to continue funding the BizKid$ Program during its fourth year of operation. BizKid$ is a public television series--underwritten by America's Credit Unions--that aims to teach youth about financial literacy. The grant reflected BizKid$’ successful entry into the Pennsylvania Public Broadcasting (PBS) market in 2008, a culmination of operational support of $30,000 previously received from the foundation (Life is a Highway Feb. 9). The BizKid$ grant signals the board’s optimism that Pennsylvania credit unions will take the opportunity to market their services and recruit new members through local contributions to PBS, the foundation told the Pennsylvania Credit Union Association. The program was broadcast on seven PBS stations in the Allentown/Bethlehem, Philadelphia, Pittsburgh, Harrisburg, Johnstown, Pittsburgh and Erie markets. It reached a potential audience of more than 8.1 million people in the state. At least four PBS stations are scheduled to continue broadcasting BizKid$’ year-two programs in 2009, with more expected to come on board.

CU System briefs (02/09/2009)

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* HARRISBURG, Pa. (2/10/09)--Due to overwhelming demand, Mid-Atlantic Corporate FCU and the Pennsylvania Credit Union Association (PCUA) have changed the location of their town hall meeting Wednesday. The meeting will be held at the Sheraton Harrisburg-Hershey, 4650 Lindle Road, Harrisburg, said PCUA. The meeting will address actions by the National Credit Union Administration (NCUA) about corporate credit unions and their impact on natural-person credit unions (Life is a Highway Feb. 9) … * JACKSONVILLE, Ark. (2/10/09)--Arkansas FCU President/CEO Larry Biernacki presented a check for $73,000 to Arkansas Children's Hospital Foundation Vice President Fred Scarborough at a press conference at the hospital Feb. 3. Arkansas Federal employees and members raise $36,500 in the past year through several fundraisers, and the credit union's board voted to match the money, bringing the total to $73,000. Since 1998, the credit union has contributed more than $415,000 to the hospital as part of the Credit Unions for Kids program, a national sponsor of the Children's Miracle Network. Pictured are, from left: Scarborough; Denise Goforth, marketing manager at Arkansas Federal; and the hospital's Kim Dupas, senior community development coordinator; Biernacki; and Gloriane Kabat, child life and education director. (Photo provided by Arkansas FCU) … * BOULDER, Colo. (2/10/09)--Danny Citron, 76, of Longmont, Colo., turned the key, the car started, and he walked away a winner in Elevations CU's $20,000 car giveaway promotion. Citron had the option of taking the car his key started--a Ford Explorer Eddie Bauer Edition vehicle--or selecting either a $20,000 credit at Automotive Avenues or $14,000 in cash. He opted for the cash. Five finalists in the event were Joy McElroy, 87, of Boulder; Christopher Church, 48, of Broomfield; Samantha Vazquez, 31, of Longmont; Rebekah Adams, 18, Longmont; and Citron. They became eligible by opening new accounts at the credit union between Oct. 1 and Dec. 31. Each attended a key-turning event. The promotion aimed to increase new membership, and Elevations reported a "sizeable increase" in new member growth compared with fourth quarter 2007 growth. (Photo provided by Elevations CU) …

Loose change turns to savings at Towpath CU

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FAIRLAWN, Ohio (2/10/09)--Towpath CU and five other financial institutions urged Akron, Ohio-area residents to turn their loose change into savings by bringing it in for deposit. The campaign netted $266,000 in coins at Towpath. The recent campaign, conducted by the $63.8 million asset Fairlawn, Ohio-based credit union, took the initiative a step further by placing coin-sorting machines at its two locations for members’ convenience (eLumination Newsletter Feb. 4). Towpath also made a 10% matching deposit on up to $1,000 in coin deposits. The added bonus required that deposits be placed in new or existing accounts and remain for 30 days. The member who made the largest deposit of change received a $100 three-month certificate. During the week of the campaign, Towpath accepted 833 deposits, opened 188 new accounts and collected $266,000 in coins. One area resident deposited more than $4,120 in loose change that her husband had accumulated over several years. Another resident--striving to win the $100 certificate-- deposited $4,279 in coins collected over 10 years, with pennies alone accounting for $1,300. The credit union told the Ohio Credit Union League that it was overwhelmed by the community’s participation in the program. “It was way more than we expected,” said Towpath CEO Alan McArthur. He assisted a member who brought in a five-gallon jug filled with coins, which was too heavy to put in the coin-counting machine. McArthur solved the problem by using a hammer and screw driver to punch a hole in the jug’s bottom so the coins could slide out. The credit union said it received significant media attention for the savings program.

Javelin Number of ID fraud victims up 22

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SAN FRANCISCO (2/10/09)--The number of identity fraud victims in 2008 increased 22% to 9.9 million adults in the U.S., according to the 2009 Identity Fraud Survey Report, issued Monday by Javelin Strategy & Research. However, the total annual fraud amount rose only slightly--7%--to $8 billion during the past year, the survey said (Business Wire Feb. 9). Javelin, based in Pleasanton, Calif., is an independent provider of quantitative and qualitative research focused on financial services topics. Other key survey findings:
* Overall identity fraud incidents increased in the U.S. The number of identity fraud incidents in 2008 rose by 22% over 2007, which brings the number back up to levels not seen since 2004. Javelin said the rise was due to economic misfortune. Historically, higher rates of fraud occur when the economy worsens. Identity fraud remains substantially lower overall when compared to the 2004 level of $60 billion. * Cost to consumers is down. The mean consumer cost of identity fraud decreased 31% to $496-- its lowest level since 2005--from $718 per incident. The lower cost per incident is attributable to faster detection of fraud, lower fraud amounts, and quicker resolution times thanks to industry efforts and consumer education, Javelin said. * Fraudsters are moving much more quickly. In cases where identity fraud was reported, 71% of the fraud incidents began occurring less than one week from when the data was stolen, up from 33% in 2005. The dramatic increase points to more sophisticated attacks by fraudsters and an increasing number of “attacks of opportunity” in which people or businesses leave data exposed. * Gender disparity. Women were 26% more likely to be victims of identity fraud than men in 2008. Women are making more purchases in stores, and more women than men experienced breaches last year. * Low-tech methods still most popular. Lost or stolen wallets, checkbooks and credit and debit cards were still the most likely avenues of fraudsters’ attacks. These avenues totaled 43% of all incidents in which the method of access was known. By protecting their information, consumers can significantly lower their risks, Javelin said.
Businesses and financial institution such as credit unions should continue working together and educating consumers on how to protect their data, Javelin added.

Delegates from Japan visit California CUs

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RANCHO CUCAMONGA, Calif. (2/10/09)--Representatives from Japan’s Agricultural and Fishery Cooperative Savings Insurance Corp. and the Norinchukin Research Institute visited with executives at three California credit unions last week to learn about the credit union cooperative business model. The group visited California Agribusiness CU, Buena Park, on Feb. 3. Then a member of the delegation visited two San Francisco-based community development credit unions--Mission SF FCU and Northeast Community FCU--to learn how they serve lower-income individuals.
Click to view larger image From left, front row: Mitsugi Nakashima, Agricultural and Fishery Cooperative Savings Insurance Corp. deputy director of the planning division; Hiroaki Funamoto, deputy governor; and Shinya Furue, Norinchukin Research Institute financial and investment division economist. Back row: Tena Lozano, director of credit union development, California Credit Union League; and California Agribusiness CU's Ruth Brock, Buena Park Branch manager; Adam Denbo, president/CEO; Gloria Lopez, vice president of business development; Lisa Mills, City of Industry Branch manager; and Mary Whipple, chief financial officer. (Photo provided by the California Credit Union League)
California Agribusiness CU CEO Adam Denbo, joined by his executive team and Tena Lozano, California Credit Union League director of credit union development, described the National Credit Union Share Insurance Fund (NCUSIF) structure; private vs. federal insurance; the difference between state- and federally-chartered credit unions; the corporate credit union structure; his credit union’s unique field of membership. They also discussed issues such as credit unions' continued fight to increase the member business lending cap, concerns about the increase to the NCUSIF insurance premium, and the need for a risk-based capital system. The executives learned that Japanese not-for-profit financial cooperatives have the same capital requirements as banks (4%). If they conduct international business, the requirement increases to 8%. “The meeting went far better than expected, with mutual sharing of information. We studied the culture and were well prepared, and they understood and valued our perspectives,” said Denbo. “We each shared our concerns about the global economy as well as ideas regarding how regulators could deal with current balance sheet risks of financial cooperatives.” The visiting delegation included Deputy Governor Hiroaki Funamoto and Deputy Director of the Planning Division Mitsugi Nakashima of the Agricultural and Fishery Cooperative Savings Insurance Corp.; and Shinya Furue, economist with the Financial and Investment Division of the Norinchukin Research Institute. Similar to the FDIC and National Credit Union Administration, the Agricultural and Fishery Cooperative Savings Insurance Corp. is similar to the Federal Deposit Insurance Corp. and the National Credit Union Administration. The corporation administers Japan’s savings insurance system. The research institute, an affiliate of The Norinchukin Bank, is the information center for Japan's Cooperative System for agriculture, forestry and fisheries. Both Funamoto and Nakashima asked questions about the present state of agricultural finance and how California Agribusiness CU fits into that marketplace. Furue expressed interest in taking the credit union business model back to Japan. He was particularly interested in learning how credit unions build and retain “firm relationships with members,” and how credit unions will address the economic crisis in terms of lending standards and underwriting. Furue then traveled to the San Francisco-based credit unions. At Mission SF FCU, Furue learned more about the credit union’s nonprofit business model, how it does outreach and marketing, its strategy for reaching low-income borrowers, and its Salva Vida/Lifesaver Loan—a payday loan alternative program. “He found out about us through our website, and he was interested in our work with low-income individuals,” said Ivan Barriga, outreach and financial education director with Mission SF Community Financial Center, affiliated with Mission SF FCU. “He is doing research on a hybrid model of banking that incorporates ‘corporate social responsibility’--and he thought our credit union was an excellent example of this because of our social mission and social impact," said Barriga. "We were flattered they wanted to talk to us--after all, this is a $20 billion bank asking an $8 million credit union for advice on strategy.” “I was particularly impressed with the depth of knowledge these gentlemen possessed concerning our industry and the latest issues we face,” remarked Lozano, who acts as a league liaison for international visitors. “It was wonderful to witness the exchange of ideas and to see their interest in the credit union business model.”

Lawmakers thank MarylandDC CUs for soundness

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COLUMBIA, Md. (2/10/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) hosted its Annual Maryland General Assembly Legislative Reception Feb. 2 in Annapolis, Md., and heard praise from state lawmakers.
Maryland Delegate Dana Stein (D-Baltimore County), left, co-chairman of the Maryland State Task Force on Financial Literacy, and Maryland and District of Columbia Credit Union Association President/CEO Michael V. Bell at the association's legislative reception.
Maryland House of Delegates Majority Leader Kumar Barve (D-Montgomery County) thanks credit unions for providing safe financial institutions. (Photos provided by the Maryland and District of Columbia Credit Union Association)
Majority Leader of the Maryland House of Delegates Kumar Barve (D-Montgomery County) applauded MDDCCUA and credit unions for providing Maryland with a safe, sound, and stable financial institutions (FOCUS Newsletter Feb. 9). Rod Staatz, CEO of SECU, Baltimore, as well as a member of the boards of MDDCCUA and the Credit Union National Association, said he was proud to be part of such a strong financial community. Delegate Dana Stein (D-Baltimore County) thanked credit unions for being among the first supporters of the State Task Force on Financial Literacy. Stein told about the task force's progress in working with the Maryland State Board of Education to implement financial literacy in Maryland's public schools. MDDCCUA President/CEO Michael V. Bell addressed the financial climate currently facing Maryland and the initiatives credit unions are taking to help the state weather it. More than two dozen credit unions gathered and discussed issues facing credit unions with members of the General Assembly. The occasion presented opportunities for credit unions to educate members of the General Assembly about the variety of services credit unions provide to Maryland consumers.

Filene names new Research Council members

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MADISON, Wis. (2/10/09)--The Filene Research Institute has named two new members to its Research Council--Barry Shaner and Shruti Miyashiro. Shaner is president/CEO of Directions CU, Toledo, Ohio. He has been with Directions for 13 years, first as chief financial officer. During Shaner’s tenure, Directions has grown from $80 million to over $500 million in assets, and completed two mergers with credit unions of comparable size. He has more than 20 years experience in the credit union movement. Shaner was a charter member of the Filene’s i3 innovation group. He is a board member of the Ohio Credit Union League (OCUL), and has chaired or served on numerous committees of the OCUL and its affiliates. Miyashiro is president/CEO of Orange County’s CU, Santa Ana, Calif. She has more than 15 years experience in the credit union industry. Prior to returning to the credit union, Miyashiro was president/CEO of Pasadena (Calif.) FCU and served in executive level positions at First City CU, Los Angeles, and Service Plus CU, Riverside, Calif. Miyashiro is a member of the Western CUNA Management School Board of Trustees. “We are confident that these prominent credit union professionals will make significant contributions to the deliberations of the council,” said Mark Meyer, Filene CEO. “And we appreciate their willingness to serve. The Filene Research Council is a distinguished group of credit union executives who individually and collectively play integral roles in the continued advancement of the Credit Union System.” The Institute’s Research Council is made up of 25 credit union CEOs. It determines the organization’s research priorities. Council members meet twice annually.

CU System briefs (02/06/2009)

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* OAKLAND, Calif. (2/9/09)--Spokane (Wash.) Teachers' CU is included as one of nine organizations with "best practices" for increasing the effectiveness of tuition assistance programs in a report by Bersin & Associates. The Oakland-based firm surveyed more than 400 companies across all industry segments. The study found that while 85% of companies have a tuition assistance program, most do not centrally manage their programs or align them with corporate talent needs (PR Newswire Feb. 5). The report also noted that dollars involved are significant, with the average expenditure for participating employees in such programs at $3,769 per employee, roughly three times what is spent on traditional corporate training … * ST. LOUIS (2/9/09)--Charlie Waalkes of St. Louis-based Anheuser Busch Employees CU served on the Missouri House Speaker's Task Force on the Housing Market, according to the Missouri Credit Union Association (The Missouri difference Jan. 30). The Speaker's office recently announced that as a result of the task force findings, the Missouri Housing Development Commission will offer a program to help homebuyers get a $7,500 federal first-time homebuyer tax credit. The credit will be available as an interest-free cash loan at closing … * LITTLETON, Colo. (2/9/09)--A Colorado man was sentenced to 19 years for a July 23, 2008, armed robbery of Bellco CU's Littleton branch in which two shots were fired. Tobias Archuleta, 23, also was ordered to pay restitution totaling $83,521 by the U.S. District Court, said the U.S. Attorney's Office for the District of Colorado. Archuleta pleaded guilty in October to charges stemming from the robbery. According to court records, Archuleta allegedly fired his firearm to get people's attention and ordered everyone in the credit union to get down on the floor. He demanded money from a teller, who complied. He then fired a second shot and ordered a second teller to get money from the credit union's vault before fleeing in a stolen getaway care. Archuleta surrendered later that day (States News Service Jan. 15) … * ROCKFORD, Ill. (2/9/09)--A former staffer at Rock Valley FCU was sentenced to three years and seven months in prison and five years of supervised release for a $1 million spending spree with money embezzled from the Loves Park, Ill.-based credit union. The sentence for Lisa Farel, 40, was lighter than the advisory range of four to six years outlined in a plea deal because she had no prior criminal history, said the U.S. District Judge (Rockford Register Star Feb. 5) …

Calif. DFI now closed on first and third Fridays

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SACRAMENTO (2/9/09)--California's Department of Financial Institutions (DFI) has started following the governor's budgetary mandate and will close offices on the first and third Friday of each month until further notice. The closures began Friday Feb. 6. DFI said it will close offices in Los Angeles, Sacramento, San Diego and San Francisco. The closures include the DFI Consumer Services Office, said the department in its January Monthly Bulletin. All offices will reopen the following Mondays at regular business hours. The closures are part of Gov. Arnold Schwarzenegger's Executive Order S-16-08, which mandates days off for about 200l000 employees in response to California's fiscal crisis. The state has a $42 billion budget gap.

Wisconsin CUs push change in Dominican Republic

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SANTO DOMINGO, Dominican Republic (2/9/09)--Executives from Wisconsin credit unions, the Wisconsin Credit Union League (WCUL), and World Council of Credit Unions (WOCCU) were in the Dominican Republic recently to help their counterparts there develop a better regulatory environment for the Caribbean nation's financial cooperatives.
Click to view larger imageFrom left, Brett Thompson, president of the Wisconsin Credit Union League; Dave Grace vice president, association services at World Council of Credit Unions, and Victoriano DeJesus, deputy administrator of IDECOOP, which represents Dominican Republic cooperatives, discuss credit unions. (Photos provided by the World Council of Credit Unions)
The visit was part of WOCCU's International Partnerships program. The officials met with leaders from Asociacion de Instituciones Rurales de Ahorro y Credito (AIRAC), the Wisconsin league's counterpart in the Dominican Republic. The organizations met with the country's Central Bank, its Superintendency of Banks and the Institute for Cooperatives to lobby for updating regulations and examination procedures that would better address credit union-specific needs in the Dominican Republic. The country's current legislation dates back to the 1960s. Credit unions hope to modernize it to match the industry's growth and manage risks that are inherent with larger-scale service in meeting growing member demands. "Credit unions in the Dominican Republic have an opportunity to significantly modify their legislative and regulatory environment for the first time in 45 years," said Dave Grace, WOCCU vice president of association services. "We are happy that WOCCU and the Wisconsin Credit Union League have been able to contribute to this effort and that industry input is being sought by the country's lawmakers."
Click to view larger imageParticipants in the World Council of Credit Unions' (WOCCU) International Partnerships visit to the Dominican Republic were: from left, Victor Corro, WOCCU International Partnerships senior manager; Kim Sponem, Summit CU; Mary Bliss, the Wisconsin Credit Union League; Brett Thompson, league president/CEO; Dean Wilson, Focus CU; Greg Hilbert, Fox Communities CU; and Tom Liebe, Wisconsin league
After the meeting, Pedro Silverio, CEO of the Central Bank, asked AIRAC to submit comments to the current bill before it is introduced to Congress later this year. The request marks a step forward for the country's credit unions, said Virginio Rafael Gerardo, AIRAC general manager. In addition to WOCCU executives, the Wisconsin delegation included: Dean Wilson, WCUL chair and CEO of Focus CU, Wauwatosa; Brett Thompson WCUL president/CEO; Mary Bliss, WCUL executive vice president/chief operations officer; Tom Liebe, WCUL vice president of government affairs; Kim Sponem, president of Summit CU, Madison; and Greg Hilbert, president of Fox Communities CU, Appleton. The group also met with two credit unions: Cooperativa Empresarial in Santo Domingo and Cooperativa Maimon, located in a rural area. The Wisconsin delegation also participated with their Dominican Republic counterparts in a seminar covering financial topics such as the U.S. economy and its global impact. WCUL's Liebe spoke on lobbying techniques, and an interactive panel of CEOs discussed mergers, financial products and services, and shared branching. The Wisconsin-Dominican Republic partnership may next offer an executive exchange program to teach credit union officials about their specific credit union responsibilities, officials said.

CUs shine in readers comments on bank battle

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MADISON, Wis. (2/9/09)--A story in a Madison, Wis., newspaper about credit unions battling banks for membership has generated a lot of positive credit union comments on the newspaper’s website. The article, “Credit unions duke it out with banks over market share,” was published Feb. 4. News Now covered the article Feb. 5. “Credit unions don't gouge people like banks do. Loan and savings rates are reasonable, but more importantly, they don't impose all the exorbitant fees that banks do,” according to one reader who posted in the newspaper’s comment forum. “I've been a credit union member for over 30 years and I've done almost all of my banking there. I couldn't be happier. I can't imagine ever going back to a bank.” One individual, who switched to Heartland CU in Madison, Wis., from U.S. Bank, explained why a credit union is preferable to a bank: “I switched last May from U.S. Bank to Heritage CU for several reasons,” the reader said. “Heartland charges no abhorrent fees, customer service is 10 times better, [I have] higher interest rates in my savings, and I’m less worried about my money being in a credit union than a for-profit bank.” Another individual, “LoveSummitCU,” paid $200 in yearly fees to a bank before joining Summit CU in Madison. “I’ve paid zero [fees] at Summit,” the reader said. “The best thing I can think of about Summit is that one day a teller and I were talking, and I happened to bring up that I wanted to buy a home. A loan officer dropped everything she was doing to talk to me right there and then. “She had another appointment, so she couldn’t talk long. But she actually called me later that night. I couldn’t afford [the home] quite yet, but I’m happy to say they worked with me for about a year on saving for a down payment, and I was able to buy my first house,” the reader added. To read the article and comments, use the link.

CUs recognized in report on whos hiring

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WACO, Texas (2/9/09)--Credit unions have been recognized as a growing sector of the U.S. economy that is hiring, according to Profiles International, a firm that specializes in employment evaluation and human resource management assessment tools. Credit unions are expanding, while traditional financial institutions continue to downsize their work forces, Profiles International said. The company is continuing to experience demand for personnel evaluations and assessments from clients such as credit unions that are looking to hire, Profiles International noted (PR NewsWire Feb. 6). Although the U.S. economy has not yet started its recovery, preemptive layoffs would actually hurt many companies in the long-term, said Jim Sirbasku, co-founder and CEO of Profiles International. “A strong staff and viable work force is the greatest asset a company can have because it's the biggest investment a company will ever make,” he explained. “Releasing talented workers in anticipation of an uncertain economic future is often a costly mistake that can mortgage a company’s future. It is far better that companies put off capital investments, which can always be made when the economic conditions strengthen,” Sirbasku added.

Biggest Loser Financial Edition contestants chosen

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BATON ROUGE, La. (2/9/09)--E FCU, in conjunction with Consumer Credit Counseling Services and TV stations NBC33, FOX44, CW21 and RTN19, recently announced four families have been chosen as finalists for The Biggest Loser: Financial Edition.
Click to view larger imageThe Hall family: Howard, Shawanga, and their children, Christian, K’Lynn, Connery and Kassidy, of Zachary, La., are one of four Baton Rouge, La., families participating in “The Biggest Loser: Financial Edition” sponsored by E FCU, Baton Rouge, and four area TV stations. (Photo provided by E FCU)
Throughout the eight-month competition, four Baton Rouge-area families will be challenged to improve their financial situation by saving money and reducing debt with the help of a team of financial coaches. The family that reaches or exceeds its financial goals by the greatest percentage will win $10,000 from the $214.7 million asset, Baton Rouge-based E FCU. Runners-up will win cash prizes as well--$5,000 for the second place family, $2,500 for third, and $1,000 for fourth. Most important, each family's members will have learned life-long financial lessons they'll never forget, the credit union said. The competing families are:
* The Hall family: Howard, Shawanga and their children, Christian, KfLynn, Connery and Kassidy of Zachary; * The Willis family: Chandler, Claire and their children, Evangeline and Gabrielle of Baton Rouge; * The Ridings family: Kevin, Susan and their children, Amanda and Kaitlin of Gonzales; * The Smith family: Kristi and her children, Shelby and Kalyn of Walker.
The families' progress will be chronicled on Tuesday nights during Fox News Baton Rouge at 9 p.m. CST and NBC33 News at 10 p.m. CST. The entire Baton Rouge community can "play along at home" and improve their financial status along with the families online. Through a website, community participants can read the families' weekly blogs, watch clips from televised interviews, sign up for monthly savings tips, join a family's booster club, and download the same tools and resources the competing families use to improve their finances. "With the current economic climate, many families in the area are struggling to reach financial goals," said Ken Bordelon, CEO of E FCU. "Our hope is that while we help the four families to succeed financially, we also reach many in our community and inspire them to improve their financial lives as well." E FCU also will host quarterly financial seminars open to the entire community on budgeting, financial planning, and identity theft with Consumer Credit Counseling Services. To see the three families not pictured here, use the links:

Pennsylvania budget has no CU provisions

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HARRISBURG, Pa. (2/9/09)--Pennsylvania Gov. Ed Rendell outlined a $29 billion budget Wednesday for 2009-2010 that--at this time--doesn’t appear to contain any proposals that would be detrimental to credit unions, the Pennsylvania Credit Union Association (PCUA) said. However, PCUA staff said they will continue to monitor budget negotiations (Life is a Highway Feb. 5). PCUA was part of a coalition of business associations that outlined a plan for the budget. Joining the coalition is just another way PCUA is protecting credit unions’ tax-exempt status, PCUA said (Life is a Highway Jan. 29). In his opening comments, Rendell noted that the budget “presents challenges the likes of which Pennsylvania and the nation have not seen since the Great Depression. “The worst economic crisis of our lifetime has dramatically reordered priorities in Washington, in Harrisburg, and most importantly, around the kitchen tables in homes all across our [state], where families are asking themselves questions that were unthinkable just six months ago: What happens next? Will I keep my job? What happens if I get sick? How will we survive?” he continued. The budget is a 2.5% increase over the 2008-09 budget. It calls for an increase in some taxes and cuts other programs, and reduces the number of state jobs by about 2,600. The budget also would withdraw hundreds of millions of dollars from the state’s “rainy day” contingency fund without draining it completely. It does not call for increasing any broad-based tax, PCUA said.

Oregon FIs work for heavier robbery sentences

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BEAVERTON, Ore. (2/9/09)--Oregon credit unions and banks are working together through the Financial Institution Security Taskforce (FIST) to help reduce robberies and other crimes committed against financial institutions, to ensure the safety of staff and members/customers, and to obtain stiffer sentences for offenders. FIST is a cooperative venture supported by the state’s credit unions and banks, and their respective trade associations--the Credit Union Association of Oregon (CUAO) and the Oregon Bankers Association. FIST works with representatives from local, state and federal law enforcement agencies whenever appropriate. When the public hears about a bank or credit union robbery, it is usually about the act itself. Rarely do they see the consequence for such a rash event, or the emotional toll that the bank or credit union customers and employees must pay, said CUAO. Four repeat offenders for credit union and bank robberies in the Portland metropolitan area recently received substantial sentences of 12 years or more through the federal court system for crimes committed in 2007 and 2008, CUAO said in a press release. When setting a sentence, the court is required to consider the impact on victims. And while most consider robbery a financial crime, the human toll is great, the association added. “Robbing a bank or a credit union has very real consequences,” said Ken Austin, FIST co-chair. “We were very pleased with the sentences that these four repeat offenders received. The public rarely sees the end result of a robbery. And we hope that this will act as a deterrent to others.” FIST co-chair Sandra Hess, loss prevention officer at Unitus Community CU, Portland, explained why credit unions and banks collaborate in this area. “There is definitely power in numbers when it comes to fighting crime,” Hess said. “Working together to help provide rewards for information on robberies, as well as working to prevent and lessen the impact of robberies for our state’s banks and credit unions is important to all of us.”

CUNA Mutuals retirement plan ranked No. 1

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MADISON, Wis. (2/9/09)--CUNA Mutual Group Retirement Plan Services was ranked No. 1 in the overall categories for “Recordkeeping/Administration” and “Investment Services” in the 401kExchange survey of 401(k) plan sponsors for 2008. CUNA Mutual has provided services to small retirement plans for more than 50 years and has been recognized as a top provider in surveys completed by 401kExchange and Boston Research Group since the surveys began in 2001. The groups surveyed more than 16,000 plan sponsors with total plan assets less than $1 million, and more than 25,000 sponsors with assets in the $1 million-to-$10 million range. In both asset categories, CUNA Mutual received the highest percentage of favorable (4 and 5) ratings. Overall, CUNA Mutual also ranked No. 1 in many underlying categories. Top rankings in plans from $1 million to $10 million included:
* Customer service; * Education/communication; * Investment options; * Fund performance; * Investment fees and recordkeeping fees; and * Plan administration.
“These top rankings across the board show that CUNA Mutual Group really knows its customer,” said Fred Barstein, president/CEO and founder of 401kExchange. “More importantly, it’s doing the right things to keep its customers happy.” Tom Eckert, vice president of retirement plan services for CUNA Mutual, credits the company’s success on focus. “We try to be the best when it comes to helping a participant successfully reach a financially secure retirement,” he said. “We tend to work with plan sponsors whose main goal is also helping their employees achieve retirement success.” Founded in 1996, 401kExchange is a source of business development, market intelligence, and due diligence services for the 401(k) and retirement industry serving the small- and mid-sized corporate market. Based in Palm Beach County, Fla., it helps connect plan sponsors, retirement advisors, broker/dealers and service providers with each other.

SECU explores partnering with Nobel winner

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RALEIGH, N.C. (2/9/09)--State Employees CU (SECU) is exploring the possibility of bringing a micro-credit lending system to North Carolina that would help low-income individuals.
Click to view larger imageState Employees CU (SECU), Raleigh, N.C., is exploring the possibility of bringing a micro-credit lending system to the state with Grameen America, a microfinance institution from Bangladesh. From left are: Mike Banks, SECU senior vice president, Raleigh-Blue Ridge Road branch; Muhammad Yunus, Grameen creator; Sue Douglas, SECU senior vice president and chief operations officer; and Jim Blaine, SECU president/CEO. (Photo provided by State Employees CU)
The system would be the result of collaboration between SECU and Grameen America, a microfinance institution started in Bangladesh by Dr. Muhammad Yunus, a 2006 Nobel Peace Price winner. The Grameen model provides low-income individuals who do not qualify for traditional credit the opportunity to receive loans. Grameen has achieved a 99.5% repayment rate, and has helped more than 7.5 million worldwide, SECU said. Grameen expanded its operation to Queens, N.Y., and is looking to move to North Carolina because of the state’s supportive financial community. Leaders from Raleigh-based SECU, the Self Help community development organization, banking organizations, and the North Carolina Administrator of Credit Unions support Grameen, SECU said. “Micro-credit lends for productive purposes and is not about giving people a break, it’s about giving people a chance,” said Jim Blaine, SECU president/CEO. “The Grameen model may not work in North Carolina, but it’s certainly a low-cost, low-risk opportunity to help create new jobs and help nurture local entrepreneurs.” The $16-billion-asset SECU has participated in a similar role since 2001 with Latino Community CU in Durham, N.C. “We are very hopeful that North Carolina will embrace this unusual experiment,” Blaine said.

U.S. Central announces AL management change

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LENEXA, Kan. (2/6/09)--U.S. Central Thursday announced that Dave Dickens, executive vice president of asset/liability management, has left the firm, effective immediately. The wholesale corporate's asset/liability division, which manages its $33 billion investment portfolio, will report directly to President/CEO Francis Lee. "This is a critical junction for U.S. Central," Lee said. "We will continue to evaluate our needs in portfolio management, and we will act accordingly based on our ongoing assessment." In assuming direct accountability for the division, Lee will direct eight portfolio managers and related staff who handle day-to-day portfolio functions. "We have an experienced asset/liability team that already handles portfolio operations effectively on a daily basis," said Lee. "I am confident it will continue to do so under my leadership." Last week the National Credit Union Administration announced a corporate stabilization plan that would include injecting a $1 billion capital note into U.S. Central. The corporate system was facing growing demands on liquidity and capital stemming from the dislocation of the market.

Economic turmoil brings more data scams

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MADISON, Wis. (2/6/09)--When members and other consumers face an economy in turmoil, they also face another beast: cybercriminals, who step up their financial scams to prey on people worried about their accounts, their houses, their jobs, and the future. For example, after Wachovia failed, e-mails began phishing Wachovia's current and former customers, asking them to install "new" Internet security certification and to provide crucial financial information to "activate" the installation. Also, the number of malicious software programs on the Internet tripled to more than 31,000 a day in mid-September, about the time the nation's financial sector began collapsing, say security analysts, who add the boom in cyberthreats could accelerate in an economy with an extended slump (USA Today Feb. 2). They predict a rise in phishing, vishing and smishing attempts and other con games to gather information from consumers considering switching financial institutions, pulling investments and retirement accounts, or wanting to know if their deposits are safe. All types of con games increased, according to government regulators, law enforcement officials and security firms. Last fall Trojan viruses began circulating more widely in e-mail and instant-message spam. These became embedded in thousands of websites and spread in a barrage of online ads. By clicking on the wrong thing, consumers downloaded the Trojan to steal information. And the trend in data breaches is more organized. several security experts have told various publications. Organized groups of cybercriminals are finding where huge masses of data are located and have begun hitting data processors, according to a survey of law enforcement officials and security experts reported by the newspaper. Credit unions already are dealing with these issues, and many use the data thefts as an opportunity to educate members that legitimate financial institutions don't ask for such information. But their members may be targets of wider schemes--for bogus computer virus protection, get-rich schemes and videos and ads that contain hidden software that can dump a malicious code into a computer--that can affect their accounts. Here are the latest scams hitting credit unions and their members: \
* A cell phone text message scam from "Piramid CU" spoofs the legitimate credit union, Pyramid CU, Tucson, Ariz. A similar text message poses as Vantage West CU, also of Tucson. The scam number has been traced to Michigan and an e-mail address traced to Germany. (Tucson Citizen Feb. 5). * First Choice FCU, New Castle, Pa. reported members and non-members received fraudulent messages via phone calls and text messaging. The messages indicate a third party has accessed the individual's debit or credit card account and ask the caller to contact the security department. Members have been hanging up and not providing the information (Life is a Highway Feb. 3). * Altoona Regional Health System FCU, Altoona, Pa., said its members received text messages on a cell phone indicating their credit union account was locked. They were told to call a phone number and provide information to access the account (Altoona Mirror.com Feb. 5). * Thousands of people in the Indianapolis area received fake bank alerts--including one supposedly from Indianapolis-based Forum CU--on their pagers and cell phones. Even the police received the messages. Several people reported fraudulent charges from their account (WTHR-TV via MSNBC.com Feb. 4).

Heartland breach costing CUs a bundle

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MADISON, Wis. (2/6/09)--The Heartland Payment Systems data breach, announced Jan. 20, is costing credit unions anywhere from thousands to hundreds of thousands of dollars. Public Service CU is reissuing about 25,000 cards, President/CEO David Maus told local media. Replacing the cards will cost the credit union $100,000. The cost is high, but the credit union wanted to protect its members, Maus told the Loveland Connection (Feb. 5). A student at the University of Wisconsin-Oshkosh reported to campus media that her account at the University of Wisconsin-Oshkosh CU was drained to $6 (The Advance-Titan Feb. 5). The student’s money was allegedly spent by a thief in Houston, the newspaper said. North Carolina State Employees’ CU, Raleigh, N.C., reported that about 50,000 of its 1.5 million members have been affected by the breach. The credit union is sending its members new cards and personal identification numbers (FayObserver.com Jan. 29). Fort Bragg FCU, Fayettebille, N.C., also is notifying affected members of the breach, but has not yet seen any fraudulent transactions. About 200 of the credit union’s members were affected, President David Elliot told the Observer. Other credit unions affected by the breach:
* Warren FCU, Cheyenne, Wyo., which reported to WyomingNews.com (Feb. 2) that 1,400 of its members were affected; however, no fraud has been reported; * CU Community CU, Springfield, Mo., which sustained $11,000 in fraudulent charges on members’ accounts (Bankinfosecurity.com Feb. 5); * HealthFirst FCU, Waterville, Maine, which reported that its members’ cards were compromised. About 130 members with Visa cards found money taken from their accounts, and 38 members with MasterCard credit cards were affected (Bankinfosecurity.com Feb. 5); * Spokane (Wash.) Media FCU, which reported that half of its membership’s 650 cards were compromised (Seattle Times Jan. 25); and * O Bee CU, Tumwater, Wash., which is reissuing cards at $10 per card. The credit union doesn’t know what the final cost will be, credit union President Bruce Cramer told the Seattle Times (Jan. 25).
The Washington Credit Union League has been in touch with its member credit unions, and some confirmed that they have blocked and reissued cards, David Bennett, Washington league director of public relations, told The Tacoma News-Tribune (Jan. 25).

First CU is first FI in immigration IMAGE program

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CHANDLER, Ariz. (2/6/09)--First CU announced it is the first and only financial institution in the nation to become a full partner in the U.S. Immigration and Customs Enforcement's (ICE) IMAGE Program. IMAGE is an acronym for ICE Mutual Agreement between Government and Employers. The goal of IMAGE is to help employers in targeted sectors develop secure and stable work forces, and to enhance fraudulent-document awareness through education and training. ICE has scheduled a press conference for Thursday in Phoenix to announce the launch of the new program. Speakers from ICE will explain the benefits to employers who achieve full partnership status. Full partnership status involved First CU’s Human Resources team conducting an extensive audit with ICE on I-9 Employment Eligibility Verification forms, demonstrating compliance with E-Verify laws, performing a Social Security number verification on current employees, writing a hiring procedure for review/approval by the Office of Special Counsel, and imaging all the I-9 forms into a secure system. Pat Richardson, First CU human resources manager, recently traveled to Washington, D.C., to take part in the formal signing ceremony and three days of intensive training. As part of the agreement, ICE will provide the employees of First CU with free document recognition and/or I-9 training as appropriate. First CU is based in Chandler, Ariz., and has more than $450 million in assets.

Select 1000 Financial Fitness idea winner

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MADISON, Wis. (2/6/09)--Voting began Sunday for the grand prize winner in the Home & Family Finance Resource Center 2008 Financial Fitness Challenge. The challenge solicited reader input throughout 2008 for money management ideas. “We received entries from hundreds of credit union members,” said Jim Hanson, vice president of center for personal finance at the Credit Union National Association (CUNA). “Each month, we selected and published five winning entries, with each winner receiving a $50 Visa gift card as thanks for the submission,” he added. The voting, which closes at 11:59 p.m. CST Feb. 28, will select the best of the field, with that winner taking a $1,000 award. “When we know the winner, we’ll send a check to the member’s credit union to make the presentation locally,” explained Michelle Dosher, managing editor for the resource center. “It’s been interesting all year to see how creative people are about managing their money--and all the ideas fit so well with family needs in today's economy.” The 2008 Financial Fitness Challenge chose 60 winners from 37 credit unions. Multiple winners came from American Airlines FCU (seven winners), Oklahoma Employees CU (five), NASA FCU (four), Midwest Financial CU (three), Keesler FCU (three), A+ FCU (two), and AlaskaUSA FCU (two). Anyone may vote, casting up to five votes daily, at any credit union site featuring CUNA’s Home & Family Finance Resource Center. Voters should also remember to register for the 2009 Financial Fitness Challenge, which again will award $50 Visa cards each month to five winners, chosen at random from that month’s registrants, Dosher said.

Texas foundation to debut difference campaign

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FARMERS BRANCH, Texas (2/6/09)--The Texas Credit Union Foundation (TCUF) will launch "Make The Difference," a campaign to promote financial education efforts among credit unions and their communities in the state, during National Financial Literacy Month in April. The foundation will use the month-long event as a springboard to encourage Texas credit unions to begin or expand their efforts to provide financial and consumer education to members, local schools and communities (LoneStar Leaguer Feb.5). Tuesday TCUF approved $10,000 for "Make the Difference" grants of up to $500 to credit unions and partner organizations to spur activities. Programs can include credit union-based programs or credit unions' work with local groups such as Junior Achievement, Boys & Girls Clubs, YMCA/YWCA, churches and schools. TCUF also is working with Project NEFE Network, a group of about 150 members implementing local financial education programs that offer the National Endowment of Financial Education (NEFE) High School Financial Planning Program (HSFPP) training sessions in the state. Last year the foundation and the project's members introduced HSFPP to more than 2,100 individuals and to tens of thousands of Texas high school students. The foundation will track the month's activities, with participants reporting activities to win prizes and receive recognition.

Student loan bill introduced in Connecticut legislature

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HARTFORD, Conn. (2/6/09)--A Connecticut low-interest student loan bill, developed by the state’s credit unions and Gov. M. Jodi Rell, has been introduced in the Connecticut General Assembly. General Assembly Governor’s Bill No. 842--“Credit Union League of Connecticut Student Loan Program”--will allow the Credit Union League of Connecticut and credit unions to offer low-interest rate loans to students who can’t obtain financing for post-secondary education because of restrictive underwriting criteria, reduced access to home equity loans or decreased market value of homes. The bill was introduced by State Sen. John McKinney (R-28) and State Rep. Lawrence Cafero (R-142). It has been referred to the assembly’s Committee on Higher Education and Employment Advancement. Credit unions started accepting applications for the loans when the program officially began Dec. 8, Gov. Rell announced (NorwalkPlus.com Dec. 8). About $17.5 million in loans was committed for the new program. The credit unions expect to offer rates ranging from 5.75% to 6%, which is below the 6.99% rate offered by the Connecticut Higher Education Supplemental Loan Authority. As of the end of last year, about 15 Connecticut credit unions were participating in the new state program (News Now Dec. 9).

SACU provides ATM service at rodeo

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SAN ANTONIO (2/6/09)--San Antonio FCU (SACU) is “getting ready to rodeo” as it installs ATM equipment for the 2009 San Antonio Stock Show and Rodeo. The rodeo opened Thursday and ends Feb. 22.
San Antonio FCU installed mobile ATM units for the 2009 San Antonio Stock Show and Rodeo throughout Feb. 5-22. (Photo provided by San Antonio FCU)
SACU is setting up 11 ATM locations, with seven stand-alone ATM units plus the SACU Mobile ATM. Two ATMs are permanently installed in separate buildings on the rodeo grounds. “As a long-time sponsor of the stock show and rodeo, SACU believes in their mission to raise money for scholarships, awarded to deserving student participants,” said SACU President/CEO Jeff Farver. “We want to do everything we can to make it easier for the public to participate in this unique San Antonio event,” he added. SACU is a $2.7 billion asset credit union, with more than 247,000 members.

CU System briefs (02/05/2009)

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* JANESVILLE, Wis. (2/6/09)--Blackhawk Community CU was one of the sponsors of a four-day visit to Janesville, Wis., by the Mexican Consulate out of Chicago in response to increasing demand for
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identity documents by Mexican immigrants. The consulate spent Jan. 29 through Feb. 1 assisting with visas, passports and other identifying documentation. Also sponsoring the visit was YWCA Rock County. According to Evelyn Woodring, YWCA immigrant outreach program director, many people assisted during the visit normally would have to travel to Chicago or Milwaukee for the services. From left are: Woodring; Francisco Vales, consul of Mexico; Carla Garcia, Blackhawk Community CU; Jim Drouge, Wisconsin Credit Union League; and Josh Fetting, World Council of Credit Unions. (Photo provided by Blackhawk Community CU) … * BATON ROUGE, La. (2/6/09)--LA DOTD FCU, which has sponsored several student-run credit unions with local schools, has opened its
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first student-run high school branch, The Hornet's Nest CU. The new branch, whose tagline is "We won't sting your pockets," opened this week at Scotlandville Magnet High School in the East Baton Rouge Parish Public School System. The branch is open Mondays and Wednesdays from 11 a.m. to 1 p.m., and offers savings and checking accounts, check-cashing, debit cards, deposit services and limited cash withdrawals. It is staffed by students, pictured here, in the school's Education for Careers class and is overseen by an LA DOTD FCU employee. Two seniors participating in Louisiana's Cooperative Education program have paid positions as part-time employees at Hornet's Nest CU …

PCUA announces department changes

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HARRISBURG, Pa. (2/6/09)--The Pennsylvania Credit Union Association (PCUA) has made several staffing changes and department realignments to meet the changing needs of its membership. Corinne Sherman will lead PCUA’s service corporation as vice president of fee services. She will oversee the cards department, shared branching and sales force. Sherman has been with the organization since 1986, most recently as vice president of business development.
Russell Evans was promoted to assistant vice president of business development, where he will be in charge of vendor relationships. Evans has been with the organization since 2007, most recently as an account executive. Monika Scott was promoted to senior account executive. She works with credit unions in the western counties of the state. Scott joined PCUA in 2001. Christina Mihalik was promoted to vice president, governmental affairs. Mihalik was formerly an assistant vice president and joined PCUA in 2000.
Christine Seitz was named director, political affairs and fundraising. Seitz joined PCUA in 2006 as a governmental affairs specialist. Diane Powell was named director of communications.

Fear anger prompt flight to Seattle CUs safety

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SEATTLE (2/5/09)--Members are moving into Seattle's credit unions to find a safe haven for two reasons: fear and anger (Crosscut.com Feb. 4). A wave of credit union memberships arrived on the heels of fear when Washington Mutual, which was based in Seattle, collapsed. Another wave arrived when consumers became angry about Wall Street financiers' actions in the financial system turmoil. Boeing Employees CU (BECU) told Puget Sound Business Journal the credit union experienced a 50% increase in membership growth during the last half of September, the article reported. "The ways in which credit unions differ from banks are especially appealing right now," said Crosscut.com. "Credit unions are less vulnerable than commercial banks to market swings, and they don't pay mega-bonuses to executives or fly bigwigs around in corporate jets." It also noted they're not involved in subprime lending and are less likely to inflate appraisals; deposits are federally insured up to $250,000 and they're more familiar, which is comforting in economic turmoil. John Annaloro, president of the Washington Credit Union League, added that membership is increasing because credit unions concentrate on consumer loans, credit cards and residential mortgages, are jointly promoting sales with automobile dealers. And Whatcom Education CU said credit unions remain strong because members and boards aren't driven by profit. Instead they are driven by a sense of community, good service and other intangibles. They also are limited in risk-taking. Despite the growth, the article said, credit unions are preparing for harder financial times ahead, setting aside funds for future loan and lease losses. To view the entire article, use the link.

CSMC sues founder former execs for racketeering

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WAUWATOSA, Wis. (2/5/09)--Central States Mortgage Co. (CSMC), one of Wisconsin’s largest mortgage bankers--partially owned by credit unions--is suing its founder and four other CSMC executives for racketeering and allegedly defrauding the company of at least $15 million. CSMC, founded in 1992 by Richard Jungen, also does business in Illinois. In 1997, the Wisconsin Credit Union League Service Corp. and 13 state-chartered credit unions in Wisconsin and Illinois acquired 53% of CSMC shares (Milwaukee Journal Sentinel Feb. 4). The remaining 47% of CSMC shares were held by Jungen and other former employees. Since 1997, the credit unions have acquired 72% of the shares. The Jungen group controls the rest. Jungen and others created Interim Funding--a limited liability corporation--that provided bridge loans to credit unions and sold them with CSMC. Jungen and the other defendants did not reveal their involvement in Interim to other CSMC officials, the suit alleges. Jungen was fired July 31, the lawsuit indicated. The others named in the suit were terminated within a few months. The lawsuit claims the $15 million in losses were the result of a conspiracy to shift distressed mortgage loans to CSMC from Interim, and that the transfer constituted a pattern of racketeering, including at least three instances of wire fraud and a breach of fiduciary duty.

CU System brief (02/04/2009)

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* HARRISBURG, Pa. (2/5/09)--Norb Kaczmarek, CEO of Erie (Pa.) FCU, and Ray Brunner, president/CEO of West-Aircomm FCU, Beaver, were re-elected to their seats on the board of the Pennsylvania Credit Union Association (PCUA). The announcement was made by PCUA Chair Diana Roberts (Life is a Highway Feb. 4). Kaczmarek will represent District 1 and Brunner, District 2. Neither nominee was opposed in the election. Candidates for a District 4 seat held currently by Lanny Horn of AK Valley FCU, Lower Burrell, are: Maria LaVelle, CEO, Westmoreland Community FCU, Greensburg, and A. Eugene Nagle, board chair of Allegheny-Kiski Postal FCU, New Kensington. Member credit unions in District 4 will receive ballots for that election by March 1 …

MCUA to distribute half million to its CUs

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ST. LOUIS (2/5/09)--The Missouri Credit Union Association (MCUA) board voted Tuesday to distribute $500,000 to affiliated credit unions “to help member credit unions address issues surrounding the volatile economy and stimulate growth.” The funds will be distributed to credit unions based on their dues. “Missouri credit unions have a long history of working together,” said board Chair Betty Clark, CEO, United CU, Mexico. “We have a strong, well-supported association, and as a board, we feel it is appropriate to assist member credit unions in these difficult economic times.” “The high affiliation rate of the MCUA is a testament to the association’s value proposition and member focus,” said board member Dennis Pierce, CEO, CommunityAmerica CU, Kansas City. “In this unprecedented time in our history, unity is paramount,” said Rosie Holub, MCUA president/CEO. “Credit unions need the support of their league and, as represented by this action, we understand the pressures and demands credit unions face financially. “The credit union system is facing a wide range of challenges from helping credit union members withstand the economic downturn to making certain we have a strong voice in the state assembly, in Congress, and with our regulatory agencies,” she added, commending the board for its action. Holub also reported that the board voted to recommend to membership at the 2009 annual business meeting that membership fees remain at the reduced 2009 level again for 2010. The reduced membership fee schedule was originally proposed at the MCUA 2008 annual business meeting. The reduction in fees represents another effort to assist credit unions in holding the line on expenses. MCUA management also announced Tuesday that the organization’s product and service focus in 2009 centers on three areas most critical to credit unions in the coming year: maximizing credit union income, reducing credit union expenses and minimizing risk.

Wisconsin banks CUs vying for market share

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MADISON, Wis. (2/5/09)--The Wisconsin Credit Union League's new Credit Union House located across the street from the State Capitol will command a front-row view of the struggle for market share of about $180 billion in assets held by Wisconsin's financial institutions, according to a Madison, Wis. newspaper. In 1990, credit unions counted 8% of total assets held among the state's financial institutions. Market share was 13% in 2003, but has since dropped closer to 10%, said Madison.com (Feb. 3). Since 2003, credit unions grew in assets 39% to $18.3 billion--less than the combined assets of Wisconsin's two largest banks. Assets in banks grew nearly 80% since 2003, to $158.9 billion, but the state's Department of Financial Institutions (DFI) maintains that the bank growth is just "normal growth patterns" and not extraordinary. Bank deposits grew at about the same 4.5% rate in 2006 and 2007. The article quoted Wisconsin Credit Union League President/CEO Brett Thompson, who discussed the new location and notes that membership in credit unions has grown. It also interviewed members of Heartland CU who moved their accounts from a bank to the credit union because of customer service. "The bank just kept charging more fees. They even wanted to charge me a fee to close my account," they said. Dean Wilson, CEO of Focus CU, Menomonee Falls and league chairman, told the newspaper that in today's economic times, credit unions have proved they offer a safe haven for consumers, "especially those whose financial needs are too small to drive corporate profits." In the article, a spokesman for a banking association took the opportunity to attack credit unions' tax-exemption status and service of people of "modest means." League spokesman Chad Helminak noted that credit unions' goal is "providing savings to all working people regardless of income." The article also discussed history of the credit union movement, including the Credit Union National Association. Use the link for the full article.

11 CUs aid Calif. workers in budget stalemate

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SACRAMENTO, Calif. (2/5/09)--California State Controller John Chiang announced an agreement Tuesday with 11 credit unions to provide lines of credit to Californians impacted by the state’s cash crunch, which has forced the controller's office to delay an estimated $3.3 billion in payments during February. “Without corrective action from the governor and legislature, this cash crisis will continue indefinitely,” Chiang said. “I applaud those in the financial services community who are stepping up to help Californians in a time of tremendous need.” Eroding revenues and a chronic structural budget deficit have depleted the state’s cash reserves. On Sunday, the controller’s office began delaying payments to preserve cash flow and make payments required by the state constitution, federal law or court rulings. Eleven credit unions collectively pledged at least $22.4 million to meet the needs of their affected members. They are:
* Alliance CU, San Jose, $250,000; * American First CU, La Habra, $1 million; * Cal State L.A. CU, Los Angeles, $1 million; * Central State CU, Stockton, $1 million; * Firestone Financial Services CU, Anaheim, $100,000; * First Entertainment CU, Hollywood, $5 million; * Health Associates FCU, Orange, $300,000; * SF Police CU, San Francisco, $250,000; * Stanford FCU, Palo Alto, $5 million; * Visterra CU, Moreno Valley, $1 million; and * Water and Power Community CU, Los Angeles, $7.5 million.
Other credit unions and banks have indicated they will--to the extent possible--provide lines of credit and other short-term borrowing solutions on a case-by-case basis to those affected by the cash crisis. The California Department of Finance promised to make available additional special funds for borrowing to pay small businesses on time in February. While these businesses represent a small portion of the state’s private sector contracts, the businesses face penalties up to 92% for each missed payment when a budget is in place.

Carolina CUs thrive in tough market

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CHARLOTTE, N.C. (2/5/09)--Carolina credit unions are toughing out the nationwide financial crisis. Sharonview FCU, Fort Mill, S.C., grew its deposits by 13% in 2008. The credit union also added $100 million to its assets, ending the year with $957 million (Charlotte Business Journal Feb. 2). Credit unions are very conservative with what they do, said John Carlson, Sharonview president/CEO. Carlson is cognizant of members’ apprehension about the future. There is “a lot of pain” out there, but the credit union will approach this year conservatively, he told the newspaper. Some credit unions are boosting their loan loss provisions to cushion themselves. Charlotte Metro CU increased its loan loss provision to $1.25 million in 2008, the paper said. While credit union members are experiencing tough times, the Charlotte branch of Raleigh-based State Employees CU (SECU), is ready to help. Credit unions “have a great opportunity to do what’s right and step up and help our members,” said Jerry Harmon, SECU Charlotte branch manager. Credit unions can grab market share because smaller banks will have a harder time raising capital, said University of North Carolina-Charlotte banking professor Tony Plath. The bottom end of the market will go to credit unions, and they can increase commercial real estate and local business lending, he told the paper.

Invest in America reports 25000 vehicle sales

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LANSING, Mich. (2/5/09)--The Invest in America campaign closed an estimated 25,000 vehicle sales since the program went nationwide Jan. 7, CUcorp, a national credit union marketing company, announced Wednesday. Invest in America is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The campaign includes contractual credit union member incentives from GM and Chrysler. GM is offering supplier pricing, which averages about $1,500 per vehicle, with its Credit Union Member Discount, and Chrysler is offering $500 or $1,000 rebates through its Credit Union Member Cash program. The nationwide program is on a 90-day pilot with GM and a 180-day pilot with Chrysler. All 8,000 U.S. credit unions are eligible to participate in and market the program to nearly 90 million credit union members. Of the 25,000 car and truck sales in the program in January, 90% were accompanied by credit union finance rates, David Adams, CEO of CUcorp and president/CEO of the Michigan Credit Union League, said in a conference call Wednesday. The program is on pace to generate 300,000- to one-million vehicle sales for GM and Chrysler by the end of the year, Adams said. This could result in a $12.5 billion sales boost for the auto manufacturers, and with 90% of the financing at credit unions, it would create a $10 billion loan surge for credit unions nationwide, he added. “There is $160 billion of liquidity as of September 2008 for credit unions nationwide,” Adams said. “About $80 billion is available for Invest in America. It’s projected that this could generate 3.2 million auto sales for GM and Chrysler.” So far, about 1,000 credit unions nationwide have participated in the program and 26 state credit union leagues are supporting it, he added. Credit unions’ market share of auto-loan financing has grown to more than 21% in December from 14% in March, according to Autocount, a national vehicle sales reporting company. Credit unions have shown strong loan growth and auto loan growth during the fourth quarter of last year. Fourth-quarter data are available for 20 of the largest U.S. credit unions, Adams said. “Loan volume has surged,” he said. “Some credit unions posted annualized growth rates of 20% in the fourth quarter. Loan growth is occurring across the board for these credit unions, including new car loans.” “Invest in America” also is a vehicle for membership growth, Adams noted. “In 2008, credit unions added two million new members on an existing base of 90 million,” he said. “Also, six of the 20 largest U.S. credit unions experienced membership growth in excess of 10% in 2008. “Invest in America should be a significant stimulus for the U.S. economy,” Adams concluded.

Citadel boosts arson relief fund by 20000

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THORNDALE, Pa. (2/5/09)--Citadel FCU has increased its contribution to an arson relief fund by $20,000 to assist victims of a rash of fires in Coatesville, Pa. The Thorndale, Pa.-based Citadel opened the Coatesville Family Fund after street fires on Jan. 24 destroyed 15 rowhouse homes. So far this year, 15 separate fires have been started in the area by arsonists. "Many members of our credit union have been affected by both the physical destruction of these meaningless fires as well as the continuing fear that they have caused," said Jeff March, Citadel president/CEO, who noted donations came from all around southeastern Pennsylvania. Citadel, which has more than $1 billion in assets, has created a webpage dedicated to the Coatesville Reward Fund. For more information, use the link.

UNFCU staffer receives NCUA award for service

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ALEXANDRIA, Va. (2/5/09)--National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood honored Timothy Challen, United Nations FCU (UNFCU) business development officer, with the Vice Chairman’s Award for Distinguished Service Jan. 30 in Geneva, Switzerland.
National Credit Union Administration Vice Chairman Rodney Hood (left) presented Tim Challen, United Nations FCU business development officer, the Vice Chairman’s Award for Distinguished Service. (Photo provided by the National Credit Union Administration)
“For his commitment and perseverance, Tim Challen truly personifies the credit union mission of ‘people helping people,’” Hood said. “After being shot by armed robbers in Nairobi, Africa, while working to open and establish a UNFCU office in East Africa, Mr. Challen made the decision to address the crime using positive change. “Through courage and dedication to a vision of a brighter future for the citizens of East Africa, Challen turned his vision into reality as founder of the Kilimanjaro Initiative,” Hood added. Using the positive impact of sports on youth and society, the Kilimanjaro Initiative provides the youth of East Africa with opportunities to take a constructive role in their communities. UNFCU, based in New York, has $2.6 billion in assets.

FORUM CU introduces SaveItUp program

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INDIANAPOLIS (2/4/09)--FORUM CU, based in Indianapolis, has launched a program designed to encourage people to save money, change spending habits, and become better money managers. The SaveItUp Program, which will run through Oct. 31, challenges participants to complete items in five different categories: budget, thrift, savvy, goals and education. Under the budget category, an example is to "create a realistic budget to help identify areas where you need to make a change." When participants complete an item, the credit union enters them in a drawing to win up to $5,000. "We realize that people are struggling to save money," said C. Andrew Mattingly, senior vice president of the $1.089 billion asset credit union. "Americans as a whole are spending more than they earn. It is our responsibility as a credit union to help our members and the community with their financial life. The SaveItUp Program encourages them to make a real change to improve their financial well-being," Mattingly said. Participants have access to information and tools through the SaveItUp website. Tools on the site include budget worksheets, savings blogs, and articles and resources from best-selling author and nationally syndicated radio show host Dave Ramsey.

Muslim woman accuses CU over no-hats policy

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SAN DIEGO and WASHINGTON (2/4/09)--The no hats, no hoods policy popular among some credit unions and banks trying to prevent robberies is being criticized by a national Islamic civil rights and advocacy group after a woman says she was denied service for wearing an Islamic scarf. The Council on American-Islamic Relations (CAIR) Monday called on the U.S. Department of Justice to determine whether a Mission, Calif., branch of Vienna, Va.-based Navy FCU violated the Muslim woman's civil rights. The woman, Amal Hersi, told local media she was standing in line when an employee approached her and told her to follow her (10news.com Feb. 2). Hersi said she felt singled out and when she explained the scarf was mandated by her religion, she was still asked to remove it. Navy Federal said it is trying to contact her to apologize. "Navy Federal values and respects all its members. Working with the law enforcement community, we have recently implemented a policy to make sure we can positively identify everyone we serve in our many branches," the credit union said in a statement. It "weighed very carefully the need to accommodate religious and cultural customs, as well as medical conditions. Our policy does not prohibit nor discourage the use of headscarves, and we will make sure it's thoroughly understood to all employees," the credit union said. "We have taken immediate action to re-emphasize to all Navy FCU employees the need to exercise good judgment and sensitivity in implementing this new policy," it continued. The credit union said it "is a diverse organization with branches, members and employees around the U.S. and the world. We are in the process of contacting Ms. Amal Hersi to apologize for the recent incident. We will assure her it was a mistake and that we value her membership…We regret that this occurred, and we have taken immediate action to ensure that all…employees understand and follow the Safety and Security Guidelines with sensitivity and care." CAIR-San Diego Public Relations Director Edgar Hopida called the no hats policy unconstitutional. Under the policy, he said, "no Muslim woman wearing a head scarf, no Sikh man wearing a turban, no Jewish man wearing a yarmulke, no Catholic nun wearing a habit, no cancer survivor wearing a scarf, no Amish woman wearing a bonnet, and no blind person wearing sunglasses may enter a Navy Federal CU branch nationwide." He said CAIR offers a booklet, "An Employer's Guide to Islamic Religious Practices," to help corporate managers gain a better understanding of Islam and Muslims. For more information, use the link.

Filene to pilot Virtual Finance in Ohio school

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MADISON, Wis. (2/4/09)--Students at Athens (Ohio) High School will be the first to experience a second life in the Filene Research Institute’s Virtual Finance program. Virtual Finance will be introduced to 100 Athens High School freshmen, sophomores and seniors in five classrooms this month, according to Filene. The program also will reach schools in Wisconsin, New York and Maryland this spring. Virtual Finance, created by the Filene i3 innovation group, offers financial education in a virtual classroom--specifically, an area called “Credit Union Island” located in the teen grid of Second Life. Second Life is the Internet’s largest user-created virtual world community, Filene said. “The Credit Union Island represents a commitment that credit unions made to consumers in the early 1930s--to improve their financial lives,” said Denise Gabel, Filene chief innovation officer. “What we see with this innovative i3 idea is a very modern way to deliver on that promise.” While on Credit Union Island, teens can interact with each other, send text or voice messages, play games, and build or explore the environment. Teens are represented by three-dimensional avatars that interact with car dealerships, open savings accounts and decide whether to rent or buy an apartment. “This has been a collaborative effort to enhance financial education for youth, while making it more engaging and more importantly more effective than traditional education methods,” said Scott Moriarty, project director. Credit unions involved with Credit Union Island include:
* Altra FCU, Onalaska, Wis.; * Members United Corporate FCU; * Ohio University CU, Athens, Ohio; * Point Breeze CU, Hunt Valley, Md.; and * Sunmark FCU, Latham, N.Y.
Moriarty is working with Members United Corporate FCU, Warrenville, Ill., to create a youth services company called Modoh. The company will become part of Nextworks, a credit union innovation and implementation company. To register, contact Moriarty at scott@nextworks.org or 804-366-7665.

More CUs offered Super Bowl ads

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MADISON, Wis. (2/4/09)--More credit unions are reporting aired Super Bowl television ads to News Now. Heritage CU, Newburgh, Ind., broadcast 30-second spots during the Super Bowl XLIII--three spots during the pregame and two spots during the game, according to Lynette McClusky, Heritage marketing communications manager. The ad, “Fast Paced Life,” was designed to appeal to 25- to 40-year-olds, McClusky told News Now. The ad depicts consumers as they move through their quickly-paced daily routines. “We will be monitoring new members in this age group as well as increased product purchases from our existing members in this age group,” she said. “We will continue to run the ad in rotation with two other ads during our morning news schedule--10 spots per month--plus our cable schedule.” The ad cost $500 to produce, she added. Envision CU, Tallahassee, Fla., ran an ad that is part of a three-month campaign to acquire new members. The ad was one of three spots the credit union will use in the campaign, Al Hammock, Envision CU president/CEO, told News Now. The ad explains how credit unions are different from banks and leads viewers to the credit union’s website. “The campaign was created after we did extensive research using an online survey with members and a telephone survey with nonmembers,” Hammock said. “We wanted to take advantage of the credit union strengths during a time when banks are so shaky.” The spot cost $5,000, “but it was budgeted from the beginning. And considering the viewership, it was a good investment,” Hammock added.

Southwest Corporate reports December financials

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PLANO, Texas (2//09)--Southwest Corporate FCU posted its unaudited financials for December 2008, noting that it had realized more losses during the month. Its net losses for 2008 total $7.9 million. The corporate recognized $31.1 billion higher net interest income for the year ending Dec. 31, 2008,, compared with the year ending in 2007, which it attributed primarily to the historically wide spread between LIBOR and Effective Fed Funds rates resulting from the current market dislocation. It recorded a net loss of $78.5 million for the year, comprised of other-than-temporary impairments (OTTI) of $71.8 million, net loss on mutual funds of $7.8 million, offset by gains of more than $1 million related to the redemption of Visa stock and early redemption of U.S. Central share certificates, the financial report said. Of the OTTI funds, which are deemed not likely to recover to par prior to maturity, $29.7 million related to Lehman Brothers' unsecured corporate debt, and $42 million related to 12 residential mortgage-backed securities. Southwest Corporate anticipates recognizing recoveries of about $20 million over time as the forecasted credit losses are expect to be less than the OTTI charges. The OTTI funds are recorded to the fair value at the impairment date according to SFAS 115. The residential mortgage-backed securities are still performing. However, collateral losses are expected to impact those securities in one to four years, said the report. The corporate's regulatory capital position is at 6.47% , well above the 5% required by the National Credit Union Administration, and higher than the 5.57% recorded at the end of December 2007. It's 2008 retained earnings ratio is 2.88%, compared with 2.50% in 2007. To access the complete report, use the link and click on the December 2008 financials.

Retail ECU operating normally despite Macys cuts

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ATLANTA (2/4/09)--Retail Employees CU (RECU) is assuring its members that their deposits are safe and that the credit union will continue operating within its normal structure, after Macy’s Inc. announced it will cut jobs. Macy’s recently announced 7,000 job cuts nationwide. About 850 are in Atlanta, and the Atlanta division will close. RECU serves 7,800 members through 27 Macy’s stores located in Georgia, South Carolina and Alabama. “RECU remains committed to meeting the financial needs of our members,” said RECU President Jeanne Kucey. “We are a Georgia state-chartered credit union and will continue to serve our membership through various delivery channels, including a Georgia-based headquarters.” RECU members can conduct business at more than 3,500 credit union service center locations worldwide. Members also have access to more than 50,000 surcharge-free ATMs. “We are currently researching ways to provide our members with even more convenience through the addition of branch and ATM networks,” Kucey said. All funds on deposit with RECU are insured by the National Credit Union Share Insurance Fund (NCUSIF), which covers shares on deposit at credit unions up to $250,000. “In the history of the NCUSIF, not one penny of insured savings has ever been lost by a member of a federally insured credit union,” Kucey said. “So RECU members can rest assured that their deposits are safe and sound. At RECU, we have been serving retail employees since 1938. We maintain one of the highest capital ratios in the entire state, with over two-and-a-half times the capital required by regulators. “We want to work with our members during these challenging times to improve their financial knowledge, increase their financial options, and provide peace of mind,” Kucey added. “While the rest of the economy is uncertain at best, RECU remains a safe harbor for our members.” Atlanta-based RECU has $29 million in assets.

New Iowa law earmarks IDAs for disaster recovery

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DES MOINES, Iowa (2/4/09)--Iowa Gov. Chet Culver Monday signed state legislation that appropriates $250,000 for disaster recovery efforts through Individual Development Account (IDA) savings accounts. Nine credit unions, in partnership with the Iowa Credit Union Foundation (ICUF) , are offering IDA accounts to help qualified members build assets and recover from last summer's floods and tornadoes. The Rebuild Iowa legislation would send the funds to the Iowa Department of Human Rights as matching dollars for the IDAs. An IDA is a matched savings account in which a participant's savings are matched by a grant from another organization. The funds must be used to purchase a specific asset, such as a home, start or expand a small business, pay for education or job training, or purchase a vehicle to get to work. The nine credit unions in the Credit Union Family Partnership IDA Program working to open IDAs are:
* Affinity CU, Des Moines; * Ascentra CU, Bettendorf; * Cedar Falls Community CU, Cedar Falls; * Community lst CU, Ottumwa; * Dupaco Community CU, Dubuque; * Dutrac Community CU, Dubque; * Employees CU, Estherville; * Linn Area CU, Cedar Rapids; and * Veridian CU, Waterloo.
"Iowa credit unions are in a unique position to offer no-cost savings accounts to families and individuals needing help to recover from last year's floods and tornadoes," said Marybeth Foster, executive director, ICUF. "Our immediate goal is to offer a method of saving for a specific asset, and financial education, especially during this time of economic hardship." The credit unions work with ICUF, the Iowa Credit Union League, the league's subsidiary Coop Consulting, and other statewide partners to advance the IDA program. The overall goal: to help demonstrate to low-income Iowans the importance of savings in an effort to end poverty and to help working Iowans become financially independent.

In-school branches continue growth CUNA reports

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MADISON, Wis. (2/4/09)--The number of credit union branches in schools continues to rise nationwide, according to the Credit Union National Association (CUNA). As of the end of last year, 218 credit unions in 34 states and the District of Columbia maintained branch offices in 746 schools. These numbers reflect increases from 2007 of 29%, 13% and 34%, respectively. “In-school branches can be the best way to influence young savers,” said Philip Heckman, director of youth programs in CUNA’s Center for Personal Finance. “The school is the workplace for K-12 students, and credit unions with a prominent presence where students spend so much time, gives the credit union message and the credit union brand special power.” In-school branches by venue include:
* Elementary school, 312; * Middle school, 86; * High school, 318; and * Other (K-12 school, youth center, college) 30.
States with the most in-school branches are:
* Michigan, 328; * Wisconsin 80; and * Virginia, 68.
Credit unions with the most in-school branches are:
* CP FCU, Jackson, Mich., 48; * Apple FCU, Fairfax, Va., 35; and * Education First CU, Southgate, Mich., 28.
Credit unions should report their in-school branches using CUNA’s online form and keep their directory entries up to date, Heckman said. “The credit union movement is rightfully proud of its financial literacy efforts,” he added. “But to be able to quantify that involvement is vitally important in convincing lawmakers that credit unions are, indeed, different and uniquely committed to improving members’ lives.”

Minnesota young CU pros meet young lawmakers

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ST. PAUL, Minn. (2/4/09)--Attendees of the third annual Minnesota Young Credit Union Professionals (MYCUP) at the Capitol traveled to the Minnesota State Capitol Jan. 27 to meet with young legislators and learn about the legislative process.
Click to view larger imageAt the Minnesota Young Credit Union Professionals at the Capitol event Jan. 27, State Rep. Larry Hosch (DFL-St. Joseph) encouraged young credit union professionals to engage their representatives in issues important to them. (Photo provided by the Minnesota Credit Union Network)
About 20 credit union professionals attended the event, which was geared toward credit union professionals under the age of 35. MYCUP is a networking group for credit union professionals of all levels. Held in conjunction with the Minnesota Credit Union Network’s (MnCUN) Credit Union Day at the Capitol, MYCUP at the Capitol provided young credit union professionals the opportunity to hear firsthand about life in Minnesota politics. State Rep. Larry Hosch (DFL-St. Joseph) and State Sen. Katie Sieben (DFL-Newport), both under the age of 35, spoke at the event. Both speakers encouraged attendees to develop relationships with their elected officials and to share information with them. “Your representatives are in no way the experts at everything,” Hosch said. “You are experts, and you should always engage your representatives in the issues important to you, your family, and your community.” Sieben agreed, saying that she always enjoys hearing from constituents and noting the issues important to them. Sieben provided her perspective on the state budget, which was released Tuesday. “We need all types of innovative ideas to help get us through this tough time,” Sieben said. MYCUP attendees also learned about the importance of credit union advocacy and ways to become involved in Minnesota’s GrassRoots Education & Action Team. MnCUN “needs all credit union professionals, regardless of their age or position, to be engaged in our grassroots efforts,” said Mark D. Cummins, MnCUN president/CEO. “The accomplishments of Rep. Hosch and Sen. Sieben illustrate that a person’s ability to be effective in politics is not dependent upon their age. These young legislators serve as an inspiration to MYCUP attendees to get involved in politics in their own way.”

CU System briefs (02/03/2009)

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* HIGHTSTOWN, N.J. (2/4/09)--The New Jersey Credit Union League has unveiled its new logo, which plays on the cooperative nature of credit unions. Designed by Greylock Marketing Group, a credit union service organization of Greylock FCU, the logo features colorful, equally sized blocks overlapping each other. "It really represents a variety of pieces coming together to form something that's bigger than the sum of all the parts," said league President/CEO Paul Gentile, noting the state has the league, large and small credit unions and leaders of all types. The logo also will also appeal to younger consumers, he said. The logo will be used in the league's advertising campaign, "New Jersey's Credit Unions, Banking You Can Trust." The league's service corporation, Professional Services Group, will deliver the message, "Services You Can Trust" in the tagline. The league also is rebranding its education department to EDGE (Education, Development, Growth and Essentials) … * COLORADO SPRINGS, Colo. (2/4/09)--ENT FCU employees raised $101,371 for the United Way campaign during 2008, beating its $95,000 goal, according to President/CEO Charles Emmer. Ent has supported Pikes Peak United Way for more than 15 years. It raised more than $90,000 during the past three years. The credit union's fundraising included creating themed gift baskets for an online auction. Each department and service center create a basket. Other activities included jeans days, barbeques, and tickets sold to a breakfast cooked by Ent's management staff. Pictured with baskets are Ent's 2008 campaign co-chairs, Gregg Caulfield and Liz Finn (Photo provided by Ent FCU)… * DES MOINES, Iowas (2/4/09)--A Des Moines man was sentenced to 58 years in prison for robberies of three financial institutions, including two credit unions. Michael Carlos Cooper Wiest, 20, who was convicted by a jury on Dec. 14, 2007, will also be on supervised release for five years after serving the sentence. He was also ordered to pay $600 to the Crime Victim Fund and $29,805 in restitution to the three institutions. The robberies, which occurred in 2006, were at Affinity CU on Dec. 18; Liberty Bank on Dec. 20; and Financial Plus CU, Dec. 22 (States News Service Feb. 2) …

NCUF Board approves additional grants for Biz Kid

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SEATTLE (2/4/09)--The National Credit Union Foundation (NCUF) Board approved additional grants for the "Biz Kid$" series on national public television. The action comes as "Biz Kid$’"new season airs on 334 PBS stations--97% of the U.S. public television market.
Click to view larger imageYoung actors and entrepreneurs share financial lessons in the "Biz Kid$" PBS series underwritten by America's Credit Unions. (Photo provided by the Washington Credit Union Foundation)
Throughout the first quarter of 2009, viewers of the show’s third season will see more complex lessons. Featuring sketches with young actors and real entrepreneurs, new episodes will demystify 13 topics including financial institutions, credit scores and economic cycles. The lessons are then translated into a curriculum for each episode. The curriculum is free to download from the Washington Credit Union Foundation (WCUF) website for credit union educators to promote financial literacy. Outreach Extensions, the creator of educational materials for "Bill Nye the Science Guy" and other public television series, developed the "Biz Kid$" curriculum using national financial literacy standards. Outreach Extensions has also developed a national campaign--including grants--that will be offered to PBS stations to extend the series’ reach into communities. Stations are encouraged to partner with local credit unions for volunteers to implement their projects. Outreach Extensions has secured $15,000 from the Annie E. Casey Foundation to fund two first-tier grants. Other station grants will be awarded this month. “We strongly encourage all credit unions to support this important project,” said WCUF Director and "Biz Kid$" Project Manager RoxAnne Kruger. “This can be either a monetary contribution or by volunteering to teach the curriculum at local public schools or after-school programs.” Every episode of "Biz Kid$" begins and ends with the narrator reminding viewers that “Production funding for "Biz Kid$" is provided by America’s Credit Unions, where people are worth more than money.”

States grapple with budgets CUs told Stay vigilant

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MADISON, Wis. (2/3/09)--State governments' budgets are in distress, which means credit unions will be staying vigilant on measures their states may consider in providing relief, according to several leagues. About 46 states are facing budget shortfalls this year, and leagues have the job of not only monitoring the credit union-specific legislation, but also what their states are doing to plug up the shortfalls. California, the world's eighth largest economy, has made headlines with its budget problems, stemming from a $15 billion deficit--roughly more than 35% of its general fund--and a $346 million shortfall this month, necessitating delays in state tax refunds, payments to contractors and disbursements to counties and agencies that provide social services (CNNMoney.com Jan. 31) . Wisconsin's budget has a $5.7 billion short fall--the largest in the state's history-- created by the economic crisis, according to Gov. Jim Doyle (Wisconsin State Journal Feb. 1). The budget was the topic of a panel discussion at the Wisconsin Credit Union League's 2009 State Government Affairs Conference in January. During the session, it was revealed that Wisconsin may receive $2.5 billion to help pay for health care and education from the federal economic stimulus package. "Now is a very volatile time for Wisconsin credit unions as banks vow to continue their pursuit of CRA-like legislation to be imposed on credit unions or new taxation of credit unions in light of state budget deficits," said the league in introducing its Wisconsin Credit Unions 2008 Annual Report (The League News Jan. 29). Pennsylvania has a deficit estimated between $1.6 billion and $4.1 billion (Life is a Highway Jan. 16), and Gov. Edward Rendell is set to unveil his budget today. Solutions offered by the House Democratic Caucus include using the rainy day fund, a federal fiscal stimulus, increased efficiencies, program cuts, and tax or fee increases. Pennsylvania Credit Union Association governmental affairs staff, attended a session recently conducted by members of the General Assembly to monitor suggestions from community leaders, residents, regarding the budget. In North Carolina, as the legislative session begins, the league and credit unions participated in several events that kicked off "what will surely be an interesting legislative long session," said the North Carolina Credit Union League (Weekly Update Jan. 29). To one function newly elected Gov. Beverly Perdue talked about her plans to work with state legislature to get that state's economy on track. In Missouri, Gov. Jay Nixon outlined five initiatives for the state this year. Of most concern to credit unions, said the Missouri Credit Union Association (MCUA), are the fiscal responsibility, and transparent and accountable government initiatives. Nixon reported a shortfall in fiscal year 2009 of more than a quarter billion dollars. His initiatives include cutting 50 programs, eliminating more than 1,300 positions, cutting $200 million from overhead by position elimination and cutting bureaucracy, getting tough on tax credit programs, and setting up an Economic Stimulus Council. "Credit unions will need to remain vigilant--and keep building relationships with legislators. We do not want one of the cost-saving actions to affect our independent state regulator," said MCUA (The Missouri difference Jan. 30).

Fitch adjusts U.S. Centrals ratings again

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CHICAGO (2/3/09)--Fitch Ratings has adjusted the ratings of U.S. Central FCU down a notch, reflecting last week's news that the National Credit Union Administration (NCUA) was implementing a corporate stabilization plan and injecting $1 billion into U.S. Central, Fitch said Monday. U.S. Central's Individual Rating is now "F" and it has been removed from Rating Watch Negative. All other ratings, including the long- and short-term Issuer Default Ratings (IDR) of "AA" and "F1+," respectively, are now on Rating Watch Negative as Fitch waits to see how NCUA's stabilization plan and possible restructuring of the corporate credit union system play out. “We have strived throughout our history to be good stewards of credit union funds, investing them in highly rated securities,” said Francis Lee, president/CEO of U.S. Central. “We regret that the historical downturn in the housing market and the related increase of loan defaults and delinquencies have adversely impacted the ratings of a portion of our securities--and, in turn, our own credit ratings, along with those of almost all rated financial institutions,” Lee said. Fitch said the new rating reflects the loss realized by U.S. Central and the impairment to its capital base "that necessitated support from the National Credit Union Share Insurance Fund. The net loss of approximately $1.1 billion for 2008 exceeds USC's retained earnings, the recently issued $450 million of Paid-In-Capital (PIC) II and a portion of the original PIC issuance." Fitch noted the prospect of future losses remains, limiting the company's future capital generation capability. The latest rating reflects Fitch's opinion that "USC would have ultimately defaulted had it not received significant external support." The "F" rating will be in place for short time only, Fitch said. "Once clarity is achieved on how the support measures, as well as the proposed restructuring of the corporate credit union system impacts USC's financial profile and business model, Fitch will reassess the Individual rating." NCUA's support for U.S. Central through the $1 billion capital note injection, its guarantee for all uninsured member depository shares, and other recent initiatives to inject liquidity into the corporate credit union system, "substantiate the high probability of external support that Fitch factored into USC's current long- and short-term ratings," Fitch said. However, the announcement that NCUA is soliciting input for reforms to the corporate credit union system "signals probable future changes to the system that could impact Fitch's view of future support." Use the link to access Fitch Ratings' press release.

Letters to media CUs a good alternative

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PROVIDENCE, R.I., and COLUMBUS, Ohio (2/3/09)--Two letters written to newspapers in Rhode Island and Ohio emphasize credit unions as good alternatives to banks. Cidalia Rocha, chairman of the board of the Credit Union Association of Rhode Island and president/CEO of Columbus CU, Warren, R.I., noted in a letter to the Providence Journal Sunday that the state has 26 member-owned credit unions that meet the financial needs of one-third of the state’s population. “The nation and Rhode Island do have locally owned and operated credit unions that are focused on bringing value to the communities they serve,” Rocha wrote, adding that coverage of large banks in the media often casts a shadow over credit unions. Another letter, appearing in The Columbus (Ohio) Dispatch Jan. 28, encourages consumers to join credit unions. The writer, R.M. Baker, of Columbus, said that banks received a bailout from taxpayers, while credit unions didn’t. “Credit unions are more than willing to loan money for automobiles and for the purchase of new homes,” Baker wrote. “Maybe all of us should be considering joining credit unions, where customer service is more of a priority,” Baker said.

Md. Board of Education accepts fin lit recommendation

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ANNAPOLIS, Md. (2/3/09)--The Maryland State Board of Education (MSBE) voted to accept the recommendations of the State Task Force on Financial Literacy and begin to implement financial literacy instruction within the voluntary curriculum. Bert Hash, CEO of MECU, Baltimore, and a Maryland and District of Columbia Credit Union Association (MDDCCUA) board member, and Thom Beck, CEO of MCT FCU, Rockville, serve on the task force (Focus Newsletter Feb. 2). Members of the task force petitioned MSBE Jan. 27 to adopt its recommendations and implement some form of financial literacy education within the voluntary statewide curriculum. State Delegate Dana Stein (D-11), Delegate Susan Krebs (R-9B), and State Sen. Katherine Klausmeier (D-8), spoke on behalf of the task force during the hearing, and answered questions from the state board. Krebs stressed how important the subject is, pointing out that “students need to be educated on such basic issues as what goes into a credit score.” Stein reiterated how the past year’s negative economic effects have created a “broad coalition of support for financial literacy” within the Maryland General Assembly. Klausmeier also urged the board to support the task force’s recommendations, stating that it will be difficult to implement financial literacy within Maryland’s schools “without the help of the board of education.” Stein, Krebs and Klausmeier were able to assuage the concerns of the board by pointing to non-profit programs currently in place that, at a minimal cost, could be used to both help train teachers in financial literacy instruction and implement financial literacy courses in schools, said MDDCCUA. It is expected that MSBE will reply to the task force recommendations by March 1.

Michigan governor pocket vetoes small claims bill

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LANSING, Mich. (2/3/09)--Michigan Gov. Jennifer Granholm pocket vetoed Senate Bill 786, which would have increased the jurisdictional monetary ceiling for filings in small claims court to $5,000 from $3,000 by 2011. The bill was supported by the Michigan Credit Union League (MCUL). SB 786, introduced by State Sen. Wayne Kuipers (R-Holland), passed the House with the Senate concurring in December. The bill then went to Granholm, but she did not sign it by the time the legislature adjourned. Normally, a bill not signed by the governor by the deadline becomes law, but when the legislature has adjourned at the end of the session, as it had in this case, bills not signed are vetoed (Michigan Monitor Feb. 2). “MCUL was successful in advocating for passage of this bill since its introduction in the fall of 2007,” said MCUL Executive Vice President Patrick La Pine. “The bill had strong support from both the House and Senate following amendments that would gradually raise the monetary ceiling over the next three years. “Unfortunately, while the MCUL continued to advocate for the bill, last-minute opposition from district court judges resulted in the governor choosing to abstain from signing and led to the pocket veto,” he added. Granholm’s spokesperson has indicated in a public report that the governor supported smaller increases to the monetary ceiling, spread over a longer period of time. SB 786, as originally introduced, would have increased the jurisdictional ceiling for small claims court to $6,000 from $3,000. A compromise in the Senate amended the bill to $5,000. While MCUL lobbied for this level, the district court judges worked with legislators to come up with a graduated increase over several years. As numerous versions of the increases were proposed as amendments, credit unions were successful in obtaining a higher-tiered threshold, MCUL said. The final bill would have raised the Small Claims Division monetary ceiling to $4,000 on July 1; $4,500 on July 1, 2010; and $5,000 on July 1, 2011. MCUL will continue to push for legislation that would raise the Small Claims Court monetary ceiling in 2009. It would help credit unions by allowing them to more frequently use the lower-cost, small-claims alternative in district courts, La Pine said.

WOCCU service award nominations due March 2

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MADISON, Wis. (2/3/09)--The nominations deadline for World Council of Credit Unions' (WOCCU) Distinguished Service Award (DSA) is March 2. The DSA recognizes the global credit union movement's most distinguished achievements. The award is presented to individuals and organizations that have offered exemplary service to the credit union movement and its practices. The DSA honor is not given every year; its presentation is governed by the viability and worthiness of candidates by the judges. All presentations are made at WOCCU's World Credit Union Conference, July 26-29 in Barcelona, Spain. “I encourage global credit union leaders to search within their own credit union communities to see if they have candidates who have distinguished themselves while serving the needs of others,” said Ron Hance, WOCCU awards committee chairman, a member of its board of directors and president/CEO of Heritage Family CU, Rutland, Vt. “DSA offers a wonderful opportunity to showcase one's past credit union achievements among his or her peers.” In the case of individuals, recipients may be WOCCU and member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefited global credit union development. No more than three individual awards is presented in a single year. Institutional recipients may be organizations or agencies that have provided financial and technical assistance to develop international credit union movements and their service infrastructures over an extended period. No more than one institutional award is granted each year. For more information, use the resource link.

CUs start setting goals for Youth Week Saving Challenge

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MADISON, Wis. (2/3/09)--Credit unions already are setting goals for this year’s National Credit Union Youth Week, April 19-25, sponsored by the Credit Union National Association (CUNA). The Saving Challenge will cover the entire month of April. Previously, the challenge was held during Youth Week. This year’s theme is “The Magic of Saving.” “We expanded the Saving Challenge to a full month at the request of credit unions,” Lin Standke, Youth Week manager, told News Now. “Now they can choose to run it as long as they want; one week or up to four. The good news is that results are only reported once, at the end of April. It's easier and more flexible for varying communities.” She encouraged credit unions setting savings goals to look at past savings history. If no history is available, credit unions can use reports of youth deposits for April 2008. “If you participated in previous years, start with a general goal of 10% more,” Standke said. Credit unions can report their results to be included in cash prize drawings and help draw attention to the efforts credit unions are taking to educate youth. Credit unions also can report any financial literacy presentations to the National Youth Involvement Board (NYIB). NYIB is an organization dedicated to helping youth become financially literate. Joanne Sepich, CUNA’s current Youth Week coordinator, will continue to assist during Youth Week as she transitions to coordinating International Credit Union Day. For more information, use the links.

NCUF meeting in Orleans marks recovery process

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NEW ORLEANS (2/3/09)--For the first time, the National Credit Union Foundation (NCUF) held its Annual Meeting in New Orleans. The location was chosen so NCUF board members could tour the city’s low-lying areas to see progress of recovery efforts from Hurricane Katrina.
National Credit Union Foundation board members touring New Orleans saw many signs of recovery from Hurricane Katrina. (Photo provided by National Credit Union Foundation)
From 2005 through 2008, NCUF worked with credit union leagues on the Gulf Coast to make over $3.6 million in Katrina relief grants--the largest disaster relief fundraising effort in credit union history. The 2009 NCUF Annual Meeting was hosted at the new headquarters of Jefferson Financial CU, Harvey, La., which invested $2 million in the Community Investment Fund (CIF) to support both NCUF and the new Louisiana Credit Union Foundation (LCUF). The meeting featured guest presentations by LCUF and New Orleans Firemen’s FCU. Both offered lessons from their disaster recovery experiences. In the wake of Katrina, millions of relief dollars left the credit union community because contributors were not aware of an option within the credit union system, Louisiana Credit Union League President/CEO Anne Cochran said. Cochran encouraged credit unions to raise future relief funds through CU Aid, the online fundraising platform developed by NCUF to assist credit unions and credit union people impacted by disasters. “With CU Aid, we keep all relief dollars in the credit union community,” said NCUF Chairman Allan Kemp McMorris. “CU Aid’s mission mirrors the credit union philosophy of ‘People Helping People.’ In times of disaster, CU Aid is all about credit unions helping credit unions.”

Officers elected by NCUF board

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NEW ORLEANS (2/3/09)--At its annual meeting last week, the National Credit Union Foundation (NCUF) Board elected a new slate of board members and officers. Two new board members were elected to three-year terms:
* Paul Mercer, president of the Ohio Credit Union League in Columbus, and; * Christopher Roe, senior vice president of corporate and legislative affairs for CUNA Mutual Group.
Three current board members were re-elected to new three-year terms:
* John Gregoire, president, Pro-Con Group Ltd., Madison, Wis.; * Allan Kemp McMorris, president/CEO, Oakland County CU, Waterford, Mich.; and * John Radebaugh, president, North Carolina Credit Union League.
Laida Garcia, executive vice president of Florida Central CU, Tampa, will serve as NCUF Treasurer and chair NCUF’s Investment Advisory Committee for a one-year term. Three current officers were re-elected to new one-year terms:
* McMorris will serve a second year as NCUF Chairman. He advocates credit union membership growth and financial education--key goals of the two largest programs receiving NCUF funding: REAL Solutions and Biz Kid$; * Gary Oakland, president/CEO, BECU, Seattle, will serve a second year as NCUF Vice Chairman. Oakland will also continue to chair NCUF’s Fundraising Committee. Oakland directed the Fundraising Committee to create a Community Investment Fund (CIF) Task Force to explore “alternative fundraising strategies that could complement the traditional CIF strategy.” * Francois Henriquez, senior vice president and general counsel for U.S. Central FCU, Lenexa, Kan., will continue to serve as NCUF Secretary. Henriquez will continue to chair NCUF’s Governance and Nominations Committee and will serve on the new CIF Task Force.

Super Bowl ads tout CUs

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MADISON, Wis. (2/3/09)--Two credit unions used ads that aired during Super Bowl XLIII Sunday to tout the advantages they provide for members. Charlotte (N.C.) Metro CU, a $176 million asset credit union, ran an ad featuring a “fee pig” during the game, not just because viewership ratings are up for the event, but because of “eyeball glue” that holds people to the ads, said Nathan Tothrow, Charlotte Metro marketing director (Charlotteobserver.com Jan. 30). Charlotte Metro, which first advertised during the Super Bowl last year, said the ads helped the credit union nearly quadruple its growth goals. The credit union writes scripts and creates storyboards in-house instead of using an advertising agency, to save money, Tothrow added, declining to say how much was paid to advertise during the game. Research indicated that the credit union’s target demographic—25- to 45-year-old women--are fond of “fuzzy creatures,” appreciate humor and like direct messages. Tothrow wrote the script for the “fee pig” commercial, which makes fun of bank fees, recent bank mergers and the Charlotte bourgeoisie, he told the paper. The commercial will be in regular rotation as Charlotte Metro gears up its marketing after the Super Bowl and launches smaller spots to highlight specific credit union services, Tothrow added. Another credit union also took advantage of the event to advertise. Boeing Wichita CU changed its name Sunday to Meritrust CU and promoted the change with five TV spots that feature the same ad during the Super Bowl (Lawrence Journal World Feb. 1). After originally planning to introduce the name change at the beginning of this year, the credit union decided to publicize it during the Super Bowl because Super Bowl ads get a lot of attention, and the opportunity to target specific markets was inexpensive, Bob Corwin, Meritrust president/CEO, told the newspaper. The total cost of the ad was less than what Meritust spent to switch out signs at its 15 branches, Corwin added. The credit union hopes the ad will promote the name change and also regenerate interest about Meritrust in the communities it serves, Corwin said.

CU System briefs (02/02/2009)

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* HARRISBURG, Pa. (2/3/09)--The Pennsylvania Credit Union Foundation benefited from the Pittsburgh Steelers' 27-23 cliffhanger win over the Arizona Cardinals in Sunday's Super Bowl LXIII. In a friendly wager between the Pennsylvania Credit Union Association and the Arizona Credit Union League, PCUA issued a challenge that the losing state would make a contribution to the winner's state foundation. In recognition of the Steelers' sixth Super Bowl championship, the Arizona league will make a $100 contribution to the Pennsylvania foundation (Life is a Highway Feb. 2) … * FARMERS BRANCH, Texas (2/3/09)--The Texas Credit Union League (TCUL) has once again been ranked in the top 20 Lobby Power Groups in the state by Capitol Inside magazine. The league was ranked No. 17 out of 1,200 Texas trade associations. The article cited Jeff Huffman, Carolyn Merchan-Saegert (now a contract TCUL lobbyist), and Buddy Gill in the listing. No other financial services trade group made the publication's Top 20, said the league (The Advocate Feb. 1) … * HAGERSTOWN, Md. (2/3/09)--A former contract worker at Fannie Mae pleaded not guilty Friday to planting a virus in a computer to destroy all 4,000 computer servers nationwide at the nation's largest mortgage finance company. Rajendrasinh B. Makwana, 35, of Glen Allen, Va., pleaded not guilty to one count of computer intrusion. The Justice Department said that if the virus had been released as planned on Saturday, it would have shut down operations for a week and cost millions of dollars. Makwana, an Indian citizen who has lived in the U.S. since at least 2001, was fired Oct. 24 from his computer programming job at Fannie Mae in Urbana, Md., for erroneously writing programming instructions that changed the setting or servers, said the Federal Bureau of Investigation (Associated Press Jan. 31) … * WORCESTER, Mass. (2/3/09)--A man is charged in the robbery last week of Digital FCU's Worcester, Mass., branch after the taxi he planned to use as a getaway car left the scene and he was apprehended running down the street. The suspect, Lewis D. James, 25, allegedly took a cab to the credit union and told the driver to wait for him. When he returned carrying a duffel bag, the cab driver became suspicious, locked his doors, and took off. James is charged with armed and masked robbery in the incident Thursday. He also was charged in the Jan. 13 robbery of a bank (Worcester Telegram & Gazette Jan. 31) … * FARMERS BRANCH, Texas (2/3/09)- Walter J. Costello, longtime board chairman of Philadelphia Inquirer & Daily News Employees FCU (now Media Members FCU), died last week. He was 87. Costello served as board chairman from the late 1960s to the late 1990s. He retired from the newspaper in 1989, where he was advertising art director. At his retirement, he was named director emeritus--the only person at the credit union to receive that honor. (Life is a Highway Feb. 2) …