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CU System Archive

CU System

10 reasons to love CU blog shows a need to educate

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MADISON, Wis. (3/11/08)--An article by a freelance writer on the SavingAdvice.com blog (March 9) touts "10 Reasons Why I Love Our Credit Union." The author's credit union isn't identified, but she says it is based in Washington State. And here's what her credit union does right:
* Offers high initial interest rate on checking and savings. * Offers interest on a checking account. * Has no monthly fees. * Provides automatic overdraft protection (even though she always has money to cover her transactions). * Offers a variety of other services: credit cards, auto loans, mortgages, certificates, money market accounts. * Makes it easy to transfer funds among accounts. * Has a co-op structure. * Profvides quality service. * Offers financial classes. * Provides scholarships and grants.
However, the author consistently calls her credit union a "bank." Her use of the term prompts comments from readers debating what a "bank" and a "credit union" are. Some comments are misinformed, while others try to correct the misinformation. The exercise brings home the point that while members love their credit union, credit unions still must do a better job of educating their members about the credit union difference. To review the entire article and the comments, use the resource link.

Judge considers ruling on Centrix bankruptcy

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DENVER (3/11/08)--A federal bankruptcy judge has suspended taking depositions, in order to rule on whether to dismiss a financial reorganization of subprime auto lender Centrix Financial LLC. More than two-thirds of Centrix's portfolio is owned by about 230 credit unions across the country (News Now Jan. 23). The court order signed March 6 by U. S. Bankruptcy Court Judge Elizabeth E. Brown for the District of Colorado is in response to a March 4 request by Centrix founder and former president Robert Sutton, plus two other individuals and a limited liability corporation to the terms of a financial reorganization. Sutton and the other parties seek to stop the Chapter 11 financial reorganization of the failed lender, and instead have the judge convert Centrix to Chapter 7 dissolution of the company, according to court records. The court also vacated a March 14 scheduled non-evidentiary hearing, and set a deadline of April 22 for Centrix’s responses to several other motions. The case has been going on since 2006. The reorganization plan is facing a six-week vote by creditors, many of them credit unions. The sale of Centrix’s assets for $30 million had been approved Jan. 17 by Brown in Denver (News Now Jan 23). Brown said the approval for the sale--to Kendrick CF Acquisition Inc., an investment group made up of Centrix's senior lender and CEO--is conditional on the resolution of minor credit union issues, said attorneys. (TheDeal.com Jan. 22). Once Centrix resolves the issues, the court will enter its official order (News Now Jan. 23). In the deal, Centrix's senior lender Falcon Investment Advisers would trade more than $30 million in secured debt for control of Centrix's portfolio, which has $1.9 billion in subprime auto loans, mostly from credit unions. Falcon would receive 70% of Centrix's new equity. Everest Reinsurance Holdings Inc. would receive 25%. Centrix CEO Robert Sutton would get 5%. No other companies bid on the company's assets at a recent auction.

Canadian CU rejects banks takeover attempt

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EDMONTON, Alberta (3/11/08)--Albert-based Community Savings CU’s board of directors decided Friday not to forward a takeover offer from Western Financial Group to its members for a vote. The board instead unanimously supported a proposed three-way merger with two other Alberta credit unions (Canada.com March 8). The credit union had proposed merging with Servus Credit and Common Wealth CUs. The three--among the four largest credit unions in Alberta--announced Feb. 8 they were considering a merger because they faced competition from British Columbia-based credit union, Vancouver City Savings, Canada's largest credit union (News Now March 7). The driving force behind the decision was that Western Financial wanted to turn the credit union into a bank, said Murray Haubrrich, Community Savings president/CEO. Western Financial’s bid was a surprise to Community Savings. Its members were scheduled to meet March 18 to vote on the merger with two other credit unions. Western Financial President/CEO Scott Tannas said the company asked that its offer be included on the agenda at the credit union's membership meeting (Canada.com and Edmonton Journal March 6). The company offered an unspecified "cash windfall" for members, job security for employees and maintenance of the products, prices, service levels and branches that exist today, Tannas said.

CU System briefs (03/10/2008)

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* TALLAHASSEE, Fla. (3/11/08)--The Florida Credit Union League (FCUL) and FCUL Service Group received six Fifth Annual Service Industry Advertising Awards (SIAA) for their communications and marketing efforts. Receiving gold awards were Florida Credit Union News, a quarterly magazine, and Survey Says!, a brochure with the 2007 member dues packet. Silver awards went to Telecom Recovery Webcast Promo, a postcard; and the Florida Credit Union Foundation logo. Bronze awards went to 2007 KNOWMORE Learning Opportunities and to the 2007 Annual Convention & Exposition (The Real Bond theme). SIAA is the only advertising award program recognizing achievements of the service industry. It received 2,000 entries. "Our communications and marketing teams are top notch," said Guy Hood, FCUL president/CEO. "With our members in mind, they have made winning awards for our communications and marketing efforts commonplace." … *
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TALLAHASSEE, Fla. (3/11/08)--Florida's Chief Financial Officer Alex Sink presented a resolution at a State Cabinet meeting designating the week of Feb. 24 as Florida Saves Week. The cabinet recognized Cassandra Grayson of the Florida Credit Union League as a representative of credit unions and her work as a member of Sink's Financial Literacy Council. From left are: Attorney General Bill McCollum; Gov. Charlie Crist; Sink; Charles Bronson, commissioner of agriculture; Elaine Courtney, University of Florida extension agent; Sherry Campbell, Okaloosa County commissioner; John Venable, Department of Financial Services bureau chief for consumer outreach; Grayson; and Cliff Long, Department of Financial Services consumer outreach coordinator. (Photo provided by the Florida Credit Union League) … * BALTIMORE (3/11/08)--Monday was the 100th birthday of Richard Rhinehart, a director with Destinations CU (formerly MTA CU). He has served the credit union for nearly 60 years, much of the time on the board of directors. When he decided to step aside several years ago, he was made an "honorary director." He still attends every meeting, and can be seen running up and down stairs all day to bring in supplies and set up the meeting room. A few months ago, he helped rebuild the $45 million asset credit union's storage room. Rhinehart, whose career was with Baltimore Transit Co., is the oldest person in Maryland (and quite possibly the country) with a commercial driver's license. He has many volunteer activities and says a positive attitude is the key to success and longevity … * PASADENA, Calif. (3/11/08)--Pasadena FCU has named Ron Berry as president/CEO (Pasadena Star News March 7). Berry was formerly production director for the San Gabriel Valley Newspaper Group and has been with that company for nearly 30 years. He will succeed Shruti Miyashiro, who left in late October to become president/CEO of Orange County's CU. Berry has been active with the $116.6 million asset Pasadena FCU's board of directors for 20 years. He served as board chairman from 1993 through 2007 …

Woman 80 and Harbor One thwart ID thieves

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RANDOLPH, Mass. (3/11/08)--An 80-year-old woman and Harbor One CU, Brockton, Mass., recently teamed up to stop an attempted identity theft on the woman’s accounts. Last month, Irene Romano received a phone call from an individual who claimed to work for her insurance company. The individual said the company would visit her home for an inspection Feb. 21 (The Patriot-Ledger March 7). Romano was suspicious of the visit, so she called her insurance company to verify the appointment. The company said no appointment had been scheduled. Romano called the police, the newspaper stated. At the same time, the $1.520 billion asset Harbor One CU began receiving requests about Romano’s financial accounts. Leo MacNeil, senior vice president of marketing at Harbor One, said the credit union received money transfer requests via a hearing-impaired phone connection. Because the connection was hearing-impaired, there was no caller identification, he told the newspaper. The credit union didn’t honor the requests for money, and it alerted local police. Romano also said she received other phone calls asking for personal information, but wouldn’t give out her information. In another unrelated scam, individuals are called and asked for the last four digits of their credit card number. After the four digits are given, the automated message says that the number is incorrect and a full credit card number must be provided, MacNeil told the Patriot-Ledger.

Maryland CU reps testify on card security fin-lit bills

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ANNAPOLIS, Md. (3/11/08)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) testified last week before two Maryland House Committees on legislation regarding financial literacy and plastic card security. On March 4, Mike Beall, MDDCCUA CEO; Suzanne Curren, director of member education for Andrews FCU; and Dorothea Stierhoff, senior public affairs specialist for MECU of Baltimore Inc., testified in favor of House Bill 1242. It would create a statewide task force to craft a plan resulting in including financial education in the public school curriculum (FOCUS Newsletter March 10). The task force would include representatives from the state General Assembly, credit unions, banks, teachers’ unions, and the State Superintendent of Schools. On March 6, the state’s House Economic Matters Committee heard testimony on the Plastic Card Security Act (HB 129), which would prohibit businesses that accept credit cards for transaction from keeping the data on the card’s magnetic stripe. For transactions in which the personal identification number is used--like a debit card--the strip information can be held for up to 48 hours after the transaction has been authorized. Testifying in support of the bill were: Beall; MDCCUA Advocacy Committee Chairman Rod Staatz, president of State Employees’ CU of Maryland; and Larry Blanchard, senior vice president of CUNA Mutual Group. Any business that holds data after the allowed period will be found in violation of the law. If a consumer’s private data is shared or divulged because of the violation, the business must reimburse these costs to the financial institution that issued the credit or debit card:
* Canceling or reissuing the card; * Closing any account, stopping payment, and blocking any transaction involved with the account linked to the card; * Refunding or crediting any fees that cardholders paid to cover the cost of an authorized transaction; * Notifying cardholders; and * Reimbursing any funds paid to cardholders whose private data is breached or divulged.

38 arrested in bogus cardsID theft ring

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QUEENS, N.Y. (3/11/08)--Several credit unions were among the financial institutions affected by an identity theft ring that was broken up by New York police last week. The ring, dubbed “House of Cards,” created fraudulent credit cards with stolen personal account information that were used to purchase high-end merchandise. The merchandise was later re-sold. Thirty-eight individuals were arrested by the New York Police Department in connection with the ring, according to Queens District Attorney Richard A Brown. Of those 38, seven are currently at large, according to Brown’s press office. The ring resulted in more than $1 million in losses for the affected financial institutions. According to the indictment, affected credit unions include: Navy FCU, Vienna, Va.; American Airlines FCU, Dallas; U.S. Senate FCU, Alexandria, Va.; Pentagon FCU, Alexandria, Va.; and another credit union in Texas that asked not to be identified. “Our losses were modest,” said John Tippets, CEO of American Airlines FCU. There are multiple identity thieves out there and “we would like them in jail,” he said. The cases can be difficult to investigate, so Tippets said he applauds the police and investigators. Other affected institutions include: First National Bank, Capitol One, Independent Bankers Bank, Franklin Templeton Bank, Iowa State Bank, First Mariners Bank, First Data Bank, BB & T Bank, Suntrust Bank, Washington Mutual, Wachovia, Banknorth, State Farm Insurance Bank, Bank of America, Wells Fargo, Citibank, Chase, US Bank and National City Bank. Credit card companies, including Visa, MasterCard, American Express and Discover, also were affected. The defendants obtained account holders’ checking and debit account numbers from a supplier in China. The numbers were used to make fraudulent credit and identification cards, which were then given to “shoppers” in New York, Texas, Arizona and other areas of the U.S. The shoppers purchased high-end electronics and merchandise, which were later were re-sold. Thirty-four defendants were charged in a second, 150-count identity theft indictment. A third, 13-count indictment charges five defendants with operating a separate and smaller identity theft and credit card operation. Kwok Chow has been listed as the “boss” of the ring. Chow allegedly obtained the account numbers and then distributed them to his Queens-based “production crew.” The “production crew” allegedly consisted of writers, embossers, and identification card makers. Once the cards were made, they were distributed to “shopping crews,” which consisted of a manager, leader and shoppers. Thirty-one of the indicted defendants were arraigned Wednesday in Queens Supreme Court. They face up to 25 years in prison ( SCMagazineUS.com March 7).

Neighborhood CU featured on NBCs Today show

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DALLAS, Texas (3/11/08)--Dallas-based Neighborhood CU was featured on the national "Today" show on NBC Monday morning as one of the best financial institutions in the nation for Baby Boomers. The segment, in the 'Money' section of the program, was about financial institutions that have special deals for the over-50 set. Reporter Jean Chatzky named four institutions: Wachovia, SunTrust, Capital One and the $245 million asset Neighborhood CU. Chatzky noted, "A lot of credit unions are doing this." To view the segment, use the resource link.

Virginia State Assembly passes payday lending bill

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RICHMOND, Va. (3/11/08)--Virginia's state legislature passed a compromise package of payday lending reforms Thursday that place broad restrictions on short-term, high-interest lenders. The bill limits how many loans a borrower can get each year and extends the amount of time a borrower has to repay the loan. It would establish a database to track payday loans. Borrowers would be limited to one loan at a time and would have two pay cycles to repay it (Associated Press via Thomson Financial March 7). Borrowers taking out five loans during a six-month period would either be prohibited from receiving another loan for 60 days or be required to enter a 60-day extended payment plan. They would then be barred from taking out another loan for an additional 90 days. Borrowers can request the extended payment plan and its 150-day lockout at any time, but only once each year. The measures allow lenders to charge 20% of a loan, plus 36% interest and a $5 fee to cover the cost of the tracking database. The bill passed the House, 91-9, and the Senate 37-2, with one abstention. Gov. Timothy M. Kaine indicated he would sign the legislation. He has 30 days in which to do so. If he signs, the bill would become law effective Jan. 1, 2009.