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Australias ATM-fee reg prompts boycott of banks

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SYDNEY, Australia (3/16/10)--Less than one year ago, new regulations went into effect requiring Australia's credit unions and other financial institutions to display their ATM fees on screen. In January, Australian consumers made six million fewer transactions at "foreign" ATMs than they did in January 2009. Overall ATM withdrawals are down a record 6.9% from a year ago, according to the Reserve Bank of Australia (Sunday Telegraph March 14). The number of withdrawals at "own bank" ATMs rose slightly while "other bank" ATM withdrawals dropped 18%. The data was released Friday as some Cashcard ATMs hiked their fee to $2.50 for a single transaction. The standard fee for foreign ATMs has been $2 since the reforms became effective. Consumers are shunning ATMs due to high fees, fear of scams and convenience, say analysts. Many are withdrawing extra cash at the point of sale when they shop. Once fees become transparent, consumers became more conscious about paying them and they voted with their feet, said Christopher Zinn, a spokesman for Choice, a consumer advocate group. Australians used ATMs more almost 66 million times in January 2010.

CU System briefs (03/15/2010)

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* HIGHTSTOWN, N.J. (3/16/10)--A Northeaster that killed six people and knocked out power for 900,000 utility customers in New York and New Jersey Saturday night knocked out power and communications at the New Jersey Credit Union League headquarters. The league said Monday it was "operating fully in its business continuity mode" and serving New Jersey credit unions (The Daily Exchange March 15) ... * RALEIGH, N.C.(3/16/10)--Members of Raleigh-based State Employees' CU (SECU) provided a $125,000 grant through the SECU Foundation to Friends of the North Carolina Museum of Natural Sciences to continue production of Exploring North Carolina. The five-time Emmy-nominated program is a series of mini-adventures featuring plants, animals, geology and history of North Carolina places on UNC-TV, North Carolina's only statewide network. The series is distributed nationally on the Apple Computer's "iTunes U" network ... * NILES, Mich. (3/16/10)--A signage business in Niles, Mich., closed abruptly and the business manager has disappeared, leaving a credit union with only one of two signs it commissioned as a remodeling project. The credit union, Greater Niles Community FCU, paid a hefty down payment--$12,000--for the order in October. The business, Elkhart-based Sign Image & Design, has gone bankrupt, said the owner, Jeanette Cross Ryman. Her husband, Lyle Ryman, had represented himself as the company owner when he took the credit union's money and disappeared. His wife has filed for a divorce (South Bend Tribune March 14) ...

Online crime losses more than doubled in 2009

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WASHINGTON (3/16/10)--Online crime losses more than doubled during 2009, reaching $559.7 million, according to the Internet Crime Complaint Center (IC3). That compares with $265 million lost during 2008. IC3 is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). The number of complaints also rose--to 336,655 complaints, or 22.3% more than the 275,284 complaints filed in 2008. Complaints involved fraud and nonfraud categories including auction fraud, nondelivery of merchandise fraud, credit card fraud, computer intrusions, spam/unsolicited e-mail, and child pornography, said IC3. In 2009, IC3 implemented a new complaint classification system, separating complaints into 79 categories. This resulted in a number of changes to the way the system gathers the data and classifies complaint data. Among the significant findings for 2009:
* E-mail scams that used the FBI's name to gain information represented 16.6% of all complaints submitted. Nondelivered merchandise and/or payment accounted for 11.9% of complaints, advance fee fraud made up 9.8%. Rounding out the top five categories were identity theft and overpayment fraud. * Of the top five categories of offenses reported, nondelivered merchandise and/or payment ranked 19.9%, identity theft, 14.1%, credit card fraud, 10.4%, auction fraud, 10.3%, and computer fraud (destruction/damage/vandalism), 7.9%. * Of the complaints involving financial harm and referred to law enforcement, the highest median dollar losses were found among investment fraud ($3,200), overpayment fraud ($2,500), and advance fee fraud ($1,500). * Among complainants, 54% were male, nearly two-thirds were between the ages of 30 and 50, and more than one-third resided in either California, Florida, Texas or New York. Ninety-two percent of the complaints were from the U.S. * Males lost more money than females. Men lost $1.51 to every $1 that women lost. Individuals who were between 40 and 49 years old on average lost more than other age groups.
For the full report, use the resource link.

Arizona senator notes CUs as payday loan option

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PHOENIX (3/16/10)--Credit unions are a viable low-cost alternative to payday loans, according to an Arizona legislator. State Sen. Debbie McCune Davis (D-Phoenix) said no one in Arizona should be able to take on high-interest payday loans--which will not be allowed in the state after June 30 unless a state senate panel approves legislation to keep the industry alive in Arizona ( March 11). She cited a New Mexico study, which found that 97% of those who took payday loans had lower cost alternatives. Others are ready to fill the gap if the payday lending law expires, she said. “I’ve talked with a number of credit unions that are ready to work with people to get them through short-term financial crises,” she told the paper. “They have a process in place and are open to it.” To read the article, use the link.

IWall Street JournalI report CUs say yes to lending

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NEW YORK (3/16/10)--At a time when the overall number of consumer loans are contracting, credit unions nationwide are saying “yes” to lending, The Wall Street Journal said Saturday. In Saturday’s article titled “Where to find the money,” Ruth Simons and Maurice Tamman said that credit unions and community banks nationwide are stepping up to help those seeking loans. Simons spoke to Bill Hampel, chief economist at the Credit Union National Association, about lending trends at credit unions. Hampel also supplied her with several credit union leads. “In the wake of the financial crisis that saddled banks with huge losses, the largest 10% of banks by asset size shrank their consumer lending by 4.7% last year, tightening the spigot on loans that aren’t backed by the government,” the two wrote. “At many smaller banks and credit unions, though, cash continued to flow. Consumer loans grew nearly 3% at financial institutions that fall in the bottom 50% of the industry in assets, according to the Journal's analysis of financial-institution data filed with regulators. “Some smaller banks and credit unions continued to ramp up their business in mortgages, auto loans and credit cards and gain from the pain of their larger rivals,” they added. State Employees CU, a $17 billion asset Raleigh, N.C.-based credit union, offers mortgages with a fixed rate for the first two years that adjust every two years afterwards, the Journal said. Rates start at 3.75% and “can increase by no more than than one percentage point every two years and by no more than eight percentage points over the life of the loan,” the paper added. Piedmont Advantage CU, a $239 million asset, Winston-Salem, N.C.-based credit union, lowered its credit card rate to fixed 6.9% from 8.9% “to help it members struggling in the weak economy,” the paper said. The Journal also noted OnPoint Community CU, Portland, Ore., for its credit cards, and DFCU Financial, Dearborn, Mich., and Antelope Valley CU, Lancaster, Calif., for auto loans. To read the article, use the link. The newspaper also ran a front-page story Monday, noting that small businesses say banks are too conservative in their lending policies.

Texas foundation prepping for financial literacy push

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DALLAS (3/16/10)--The Texas Credit Union Foundation (TCUF) begins another campaign, “Make the Difference” to promote financial literacy next month. It will distribute $10,000 in grants to credit unions and community organizations to help teach people about managing money. April is National Financial Literacy Month, and TCUF will use the month-long effort to promote financial education efforts, according to the Texas Credit Union League (LoneStar Leaguer March 2). The grants will be offered for up to $500 each to “Make a Difference” efforts that include but are not limited to credit union partnerships with local community groups or classroom instruction. “We debuted the ‘Make the Difference’ campaign in 2009 and were amazed at the enthusiasm and collaboration among credit unions, chapters, partner organizations and educators in [Texas],” said Courtney Nickles, executive director. “Credit unions are making a difference in their own communities every day, true to the philosophy of ‘people helping people.’ April presents the perfect opportunity to join forces, make the difference and further strengthen financial education in Texas.” TCUF also is working with its Project NEFE Network, a group of members implementing local financial education programs and offering National Endowment for Financial Education (NEFE) High School Financial Planning Program training sessions statewide. Last year, TCUF and Project NEFE Network members reached roughly 80,000 students through financial literacy efforts. TCUF will track activities, so credit unions and partners can report their activities to win prizes and receive recognition. Nickles was recently interviewed by Texas-based radio station KERA regarding the campaign. She told KERA Morning Edition Host Sam Banker that she thinks the current recession and mortgage crisis stem from financial illiteracy. Budgeting is a huge problem, she said. “Lots of families do not live by a budget and just kind of fly by the seat of their pants on a daily, weekly, monthly basis,” she said. The foundation hopes to make its members financially fit and savvy, she added. “You’re talking about delinquencies, bankruptcies--you just want your members to be smart and savvy and I think that benefits everyone involved,” she said. “TCUF likes to think that we teach from cradle to grave,” she added. Even preschool-age children can learn how to save through a piggy bank, she said.

Washington governor signs CU public funds law

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OLYMPIA, Wash. (3/16/10)--Washington Gov. Chris Gregoire signed legislation Friday that allows public units to deposit funds in state-chartered credit unions. The new law--Senate Bill 6298, which goes into effect July 1, 2011--adds state-chartered credit unions to the roll of eligible public depositories. The legislation adds 70 local Washington-grown credit unions to the list of 105 public depositories and brings with it more community-based bank choices for the state public units, said the Washington Credit Union League. The new law also strengthens the safety of those public dollars by diversifying risk at a time of increasing bank failures and when most of the state’s public funds are maintained in too-big-to-fail financial institutions, the league said. “State leaders need more options for public funds in top tier financial institutions,” said John Annaloro, league president/CEO. “Additionally, the state has a fiduciary responsibility to return the nest rates on their investments. This is a smart change.” Credit unions generally offer better rates of return on savings and investment products than banks, according to some studies, the league said. The new law, however, will limit public deposits in credit unions by any single public unit to $100,000, and credit unions are not required to participate, the league said.

Pa. Maxwell Herring Desjardins winners named

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HARRISBURG, Pa. (3/16/10)--The Pennsylvania Credit Union Association announced state winners of the Dora Maxwell Social Responsibility Award, Louise Herring Philosophy in Action Award and the Desjardins Youth Financial Education Award. Awards will be presented to the 2010 winners May 17 (Life is a Highway March 15). First place Dora Maxwell Social Responsibility Award winners are:
* Greater Pittsburgh Police FCU, $20 million to $50 million asset category; * Meadville Area FCU, $50 million to $100 million in assets; * Cross Valley FCU, Wilkes-Barre, $100 million to $200 million in assets; * Erie FCU, $200 million to $500 million in assets; * American Heritage FCU, Philadelphia, more than $500 million in assets.
First place Louise Herring Philosophy in Action Award winners are:
* Superior CU, Collegeville, less than $50 million in assets; * Erie General Electric FCU, $50 million to $250 million in assets; * TruMark Financial CU, Trevose, more than $250 million in assets.
First place Desjardins Youth Financial Education Award winners are:
* Keystone FCU, West Chester, $35 million to $75 million in assets; * AmeriChoice FCU, Mechanicsburg, $75 million to $250 million in assets; * TruMark Financial CU, more than $250 million in assets.

Detroit editorial Use CUs MBLs not state-owned bank

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DETROIT (3/16/10)--A state candidate's proposal to open a state-owned bank in Michigan to assist the state's economy prompted an editorial in The Detroit News that said Michigan is in no position to open such a bank and that credit unions' program to assist the credit crunch makes more sense. "Last month, Gov. Jennifer Granholm unveiled a state partnership under which 335 Michigan credit unions will help ease the money crunch by lending at least $43 million to small businesses," said the editorial (March 15). "That kind of public-private format, while modest at this point, makes more sense than adding a state-owned bank to a bureaucracy that's already $1.6 billion costlier than its projected income," said the newspaper. The newspaper noted that "while times call for bold plans, this one should fizzle." The proposal was based on the Bank of North Dakota, the only state-owned bank in the nation. Some cash-strapped states have considered the idea of such a bank, saying it could inject money into the economy by making business loans, student loans, buying down small banks' endangered mortgages and issuing credit cards. The proposal was made by Virg Bernero, who is running for the Democrat candidacy for governor (News Now March 11). Other states looking into state-owned banks include Vermont, Florida, Oregon and Washington.

WOCCU unites Mexico Canada CUs on managing ATMs

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ALBERTA, Canada (3/16/10)--Caja Popular de Ahorros Yanga, better known as Caja Yanga, became one of the first rural Mexican financial cooperatives to launch surcharge-free credit union-owned ATMs, said the World Council of Credit Unions (WOCCU).
Click to view larger image Aida Maceda, (left) information technology manager, and Liliana Gonzalez, ATM manager for Caja Yanga, are pictured next to a Servus CU ATM during a technical internship between Canada-based Servus and Mexico-based Caja Yanga that focused on ATM policies and procedures. Caja Yanga recently launched rural Mexico’s first surcharge-free ATMs. (Photo provided by the World Council of Credit Unions)
It turned to Servus CU in Alberta, Canada, for help. Caja Yanga and Servus established a relationship in 2009 through WOCCU’s International Partnerships Program, and the Mexican credit union asked about a technical internship. In March, Servus welcomed Aida Maceda, Caja Yanga information technology (IT) manager, and Liliana Gonzalez, ATM manager, to Edmonton to study the daily maintenance and operations of ATMs in Servus branches. “These technical visits really crystallize the value each party brings to the partnership,” said Vern Albush, Servus director of corporate social responsibility. “Our goal for this technical internship was to help Caja Yanga successfully launch its first cash dispensing ATMs and gain a better understanding of the process involved in making the IT and banking system expansion decisions necessary to address rapidly growing demand.” The two Caja Yanga delegates spent seven working days with Servus employees, learning to manage in-branch ATMs and discussing everything from proper balancing procedures and machine troubleshooting to the physical security of the ATM itself. Servus stressed the importance of dual custody of combinations and showed how proper security procedures for staff working with ATMs help boost confidence and reduce liabilities that employees shoulder when dealing with the machines. The pair also job-shadowed Servus employees during a typical daily ATM check and balance at a local branch. “Having access to Servus technical staff is extremely beneficial given their decades-long experience in administering ATM operations,” Maceda said. “I learned a great deal, especially why planning for growth is so important instead of simply concentrating on immediate needs of the ATM network and card services.” The Mexican credit union installed new computer servers in December and is updating many of its system. The visitors also looked at the credit union’s IT and communications infrastructure. Maceda took particular interest in server software and usage and commercial electronic messaging options. Maceda and Gonzalez identified areas in which Caja Yanga can implement some of Servus’ operating practices. Gonzalez will change the way ATMs are serviced and balanced and implement stricter policies and procedures, including surprise cash counts. Maceda will make changes when she reviews the new e-mail and communications infrastructure for the credit union.