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CU System briefs (03/18/2009)

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* MERIDEN, Conn. (3/19/09)--Contributions from strategic business partners, the Connecticut Credit Union Solutions Foundation and the Credit Union League of Connecticut's dues-discount program have raised $25,000 for the league's Small Credit Union Support Fund, exceeding its goal. "It's heartening to know that a variety of financial services-related organizations understand the important role small credit unions play in this industry," said league President/CEO Tony Emerson. He noted that "especially with the current challenges credit unions are facing, small credit unions continually seek to serve their members faithfully day after day, member by member. Any support we can provide them strengthens the entire credit union movement" … * RALEIGH, N.C. (3/19/09)--Members of State Employees' CU (SECU), via the SECU Foundation have provided a $750,000 grant to Home Health and Hospice Care Inc. for the expansion of Kitty Askins Hospice Center in Goldsboro, N.C. The grant will be used to expand the center by 13,000 square feet, doubling its facilities from 12 beds to 24. The new wing will be named SECU House at Kitty Askins … * SOUTHBRIDGE, Mass (3/19/09)--Southbridge (Mass.) CU has named Jeffrey Davenport as president/CEO to succeed Thomas J. Smalarz, who will retire March 31. Smarlarz had been with the credit union for 35 years, serving the last 15 as president/CEO. During his tenure, assets grew to $166 million from $102 million. Davenport has been a regional sales manager for CUNA Mutual Group the past six years. Before that, he headed County FCU, Caribou, Maine and held lending and management positions at two banks. He also was director of the Massachusetts Share Insurance Corp. (Worcester Business Journal March 17) … * VIRGINIA BEACH, Va. (3/19/09)--Carl M. Atkinson, founding board member (emeritus) of Chartway FCU, died Sunday in Virginia Beach. He was 82. Atkinson served on the $1.206 billion asset credit union's board for 44 years and was employed with M&T Co. He is survived by his wife, three sons, seven grandchildren, three great-grandchildren, and seven half brothers and sisters (The Virginian-Pilot & The Ledger-Star March 16) …

State Treasurer CU discuss Better Choice on NBC

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HARRISBURG, Pa. (3/19/09)--Pennsylvania's Credit Union Better Choice payday loan alternative was the topic of a news report featuring the state's treasurer and a credit union on Philadelphia's NBC 10, according to the Pennsylvania Credit Union Association. The payday loan alternative was developed in conjunction with the state Treasury Department. The program features State Treasurer Rob McChord and Anthony Silvi of Warminster-based Freedom CU describing how the program is helping people avoid payday lenders. To view the video, use the link.

Poland CU campaign Dont blame us were not banks

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WARSAW (3/19/09)--Poland's credit unions, called SKOKs, have launched a new campaign promoting the credit union difference and aimed at convincing consumers that they are not responsible for the problems experienced by the country's banks. The campaign's motto: "Don't blame us, we are not banks." The campaign emphasizes that savings cooperatives and credit unions are based on family capital and that SKOKs offer unbeatable deposit rates (Polish News Bulletin March 18). The SKOKs hope to attract individual members and small firms having difficulty finding financing from banks in the current economy.

Michigan Financial Literacy Challenge has lawmakers interest

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PLYMOUTH, Mich. (3/19/09)--More than two dozen lawmakers have expressed interest in partnering with credit unions for the Michigan Credit Union League’s (MCUL) Financial Literacy Legislative Challenge, an April initiative that pairs lawmakers with schools and credit unions in their district for financial education events. Credit unions holding events in April can contact MCUL, to be matched with a legislator. About 27 state legislators have responded (Michigan Monitor March 16). In its sixth year, the program helps build relationships between credit unions and lawmakers through collaborative financial education presentations to students or visits to student-run credit union branches. The challenge takes place throughout April to coincide with National Financial Literacy Month. The third week in April is National Credit Union Youth Week as well as Michigan's Money Smart Week--an initiative of the Federal Reserve Bank of Chicago.

CUs functioned fine without a biz cap says Schenk

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RALEIGH, N.C. (3/19/09)--Credit unions were operating very well before 1998 when Congress mandated a cap on business loans at 12.25% of a credit union’s total assets, said Mike Schenk, senior economist at the Credit Union National Association (CUNA). “For almost 100 years, credit unions have been making business loans,” Schenk told the Raleigh, N.C., News & Observer Wednesday. “For all but 10 of those years, there wasn’t a cap.” If the cap were removed, credit unions nationwide could loan an additional $10 billion to businesses, according to CUNA estimates, the newspaper said. Living under the cap is causing a lot of frustration for Coastal FCU, Pete VanGraafeiland, vice president of business lending, told the newspaper. Coastal turned down more than $30 million in loans during the past 90 days because it hit the limit. Coastal is a $2.087 billion asset, Raleigh, N.C.-based credit union. Small-business owners are “the people who are beating on our doors” because their lines of credit have been cut back or canceled by other financial institutions, VanGraafeiland told the paper. “It’s kind of heart-rending,” he added.

NCUF federation post foreclosure survival report

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WASHINGTON (3/19/09)--The National Credit Union Foundation (NCUF), in partnership with the National Federation of Community Development Credit Unions, has posted a report for credit unions to address one of their most pressing issues: Helping Members Avoid or Survive Foreclosure. The report is free on the REAL Solutions Impact Center. Use the resource link. “Foreclosures are having a devastating impact on communities,” Mark Lynch, REAL Solutions field coach and U.S. Department of Housing and Urban Development (HUD) technical assistance consultant, told 30 state credit union league liaisons on the latest REAL Solutions conference call. To gauge the magnitude of the problem: One million families--one out of every 200 homeowners--will enter foreclosure this year, according to the Mortgage Bankers Association. Lynch stressed the importance of credit unions developing a proactive communications strategy. “Getting the correct information and education to members and potential members at the right time is vital,” he emphasized. “The key message to credit unions is to be proactive. Don't wait for members to come to you for assistance and advice; then it may be too late. If a member has a delinquent mortgage with your credit union, certified housing counselors should work to determine the best way for the member to stay in the home. Most often, this is the best option for both the member and the credit union.” Some credit unions will refinance mortgage loans with up to 80-year terms if it will help members lower their monthly payments enough to keep their homes. But rather than expecting members to pay out those longer terms, credit unions plan to reduce the terms once members can afford their regular payments again. Bucky Sebastian, CEO of GTE FCU, Tampa, Fla., explained how this works in a video. (Use the second resource link.) “Every credit union can help its members with basic, accurate information and appropriate referrals, even if the credit union is not a mortgage lender,” said Terry Ratigan, senior consultant and coordinator of the federation’s national housing counseling program. “Many members in distress will turn to their credit unions as trusted advisors, so every credit union must be prepared to connect its members to the appropriate resources.” Despite credit unions’ desire to help their members, the federation warned that credit unions should not try to serve as counselors unless they are trained and certified to do so. “Because of the complex legal issues that arise with potential defaults, and because policies and workout options are changing almost daily, credit unions should not give individual advice,” cautioned Lisa Williams, director of the federation’s CDCU Mortgage Center LLC. “Doing so could put the credit union itself at risk.” Williams recommended that credit unions identify housing counseling agencies in their communities that have been approved by HUD, and refer members to those organizations. Other resources for credit unions are being developed by the federation, whose website includes a new CU Homeownership Counseling clearinghouse to help credit unions find local, certified housing counselors. (See resource link.) The site includes a list of certified credit union housing counseling agencies, links to the national HOPE Now hotline, scripts to help explain the latest federal loan modification programs, and more. As a HUD-approved National Housing Counseling Intermediary, the federation can assist credit unions and affiliated non-profits interested in becoming approved counseling agencies. Once approved, credit unions can apply for federal grants to support the cost of counseling activities. For more information, check the federation’s website or contact Ratigan at or 800-437-8711, ext. 251.

CUs warn of rash of automated phishing calls

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MADISON, Wis. (3/19/09)--Several credit unions nationwide are reporting an uptick in the number of automated phishing calls seeking to obtain personal information from members. Some recent incidents:
* Several Wisconsin credit unions report scam artists are using automated phone calls with recordings that ask members to divulge personal financial information, according to the Wisconsin Credit Union League. Phishing calls reported Tuesday claimed the member’s credit and/or debit card had been locked and asked for the card number to unlock it. The Credit Union National Association also noted variations on scam tactics and said unsolicited requests for personal information have circulated under the subjects: “Account Deactivation,” “Account Status Alert,” “Changes to Terms and Conditions,” and “Irregular Activity.” * Brazos Valley Schools CU, Katy, Texas, reports its members are being inundated with phishing e-mails saying the recipient’s debit card or ATM card has a problem. Other messages say illegal access to the cards was attempted (SPAMfighter March 18). * Several people in Tennessee said they received calls after normal business hours supposedly representing a credit union. The calls included instructions to use the keypad of a telephone to enter the customer’s debit card number. The caller told the recipient that this would help clear up problems with the customer’s account ( March 17). * A phish that looks like an official notice from a Virginia credit union tells members that their primary e-mail address registered at the local credit union was changed on March 16. They are told to sign on to an Online Account Access and to correct it. * GPO FCU, New Hartford, N.Y., posted an alert for members that said: “There’s a telephone scam going on, and the callers want to rip you off. We’ve heard from people who received a call around 8 p.m. Monday. It was from an automated message that claims their card has been compromised and then asks [recipients] to enter their card number and personal identification number.” The credit union tells members that the call is bogus and to hang up (The Real Deal-News Channel 9 WSYR March 11). * Scam artists are promoting a fake credit union on the Internet, dubbed Communal CU in Dearborn, Mich. The Michigan Office of Financial and Insurance Regulation (OFIR) ordered a cease-and-desist order for the bogus credit union. OFIR officials found an empty storefront when they visited the Dearborn address for the credit union (Detroit Free Press March 12). * Several Utah credit unions said their members have been targets of a new “phishing” or “smishing” scam after several Utah-based accounts were accessed in February for fraudulent transactions in California. Identity thieves, posing as credit unions, sent out fake alerts to members through automated phone calls and e-mail and text messages. The message asserts the member’s account has been suspended and tells the member to verify account information to reactivate the account (StandardNET March 1). * Using automated phone calls, scammers attempted to elicit personal information from members of Consumer CU, Greeneville, Tenn. “No one is making authorized calls from Consumer CC or would ever do so,” Consumer President Sam Miller told media. “Please give no one your account number. We already have it.” The credit union received about 100 calls from members contacted by the automated calls ( March 17). * Several Vermont financial institutions, including Central Vermont Medical Center Inc. CU, Barre, Vt., have been referenced in a spate of fraudulent calls, according to Vermont State Police. An automated messaging system claims the call recipient’s credit card information has been accessed. The message then asks for credit card information to fix the problem, police said ( March 16). * Dozens of members of Greylock FCU, Pittsfield, Mass., were the target of a phone scam last weekend, but few fell for it, according to Greylock Senior Vice President John Bissell. A pre-recorded message claiming to be the credit union sought credit card account and personal identification numbers to verify an alleged claim of fraudulent purchases against the member’s card. Greylock issued an alert to its weekend answering service and called in staff to deal with members who had concerns or who had given out their credit card numbers (The Berkshire Eagle March 16).

More consumers underwater on auto loans

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MADISON, Wis. (3/19/09)--As the economy continues to struggle, more credit unions are reporting an increase in vehicle repossessions, as members discover they owe more than the car is worth. MidFlorida CU, Lakeland, Fla., this week opened MidFlorida Wholesale Auto Sales to sell some of its repossessed vehicles. The credit union had previously run an auto sales service that was opened one day per week, but expanded to five days a week. The credit union sees about 40 to 50 repossessions per month, up from about 30 to 40 last year, Kevin Jones, MidFlorida CEO told News Now. Jones said he frequently talks with the credit union’s collection manager, and says the cars are repossessed because of divorce, death, or lost jobs. “Our repo numbers are pretty modest for our asset size,” he added. MidFlorida has $1.2 billion in assets. MidFlorida is not having many problems with delinquent home loans, so it’s not seeing as much spillover from the mortgage market’s assets on the auto loan side, Jones said. Colorado’s Norbel CU and Public Service CU told The Coloradoan that the number of cars they have taken back has increased this year. Norbel took back 15 cars last year, and had five repossessions in January and February, Norbel CU CEI Ed Bigby told the newspaper (March 16). Public Service CU, Denver, also has experienced a spike in repossessions. But credit unions are still making loans, which is good news, Public Service CU President/CEO David Maus told the newspaper. He added that auto dealers may have to close their doors if there weren’t credit unions to finance vehicles. Jim Craft, director of lending, Oregon Community CU, told the Associated Press that the credit union created a car lot recently for repossessed vehicles. Many members have lost their vehicles because of the recession, and many were “great members,” he told the AP (March 7). SELCO CU Director of Lending Jim Mau told the Associated Press that the credit union’s auto loan defaults were 0.5%, but the figure increased to 0.72% last year. Though defaults have risen, it’s expected with the economy, he said. The credit union still wants to make loans, he added. The AP also noted a statistic from the American Financial Services Association that says credit unions or other lenders lose about $8,000 on each repossessed vehicle. According to Trans-Union, the national 60-day auto delinquency rate edged up between the third and fourth quarter of 2008 to 0.86% from 0.80%. However, 14 states experienced a drop in year-to-year rates, compared with a national 8.86% increase.

CUNA Council honors three CU women

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MADISON, Wis. (3/19/09)--Three women were honored for their credit union marketing and business development achievements at the CUNA Marketing and Business Development Council (CMBDC) Conference last week in San Diego. Mary Olson, vice president of marketing for Delta Community CU, Atlanta, was the 2009 Hall of Fame inductee. She led Delta Community through a rebranding effort to match its look and message with the credit union’s new community charter. She also helped launch an aggressive branch expansion effort and a “Standing Strong” certificate of deposit promotion that brought in $278 million and 1,274 new members in six weeks. A charter member of CMBDC, Olson served as chair and vice chair of the executive committee, served on her league’s cooperative advertising committee and as a board member for the financial literacy organization, Operation Hope. She also has held positions with CUNA Mutual Group, Georgia Credit Union Affiliates, and the Credit Union National Association. Kathryn Davis, senior vice president of marketing for Xceed Financial CU, El Segundo, Calif., won the Marketing Professional of the Year Award. Davis headed a rebranding and name change that refocused the credit union and sought to reach out to working people in the credit union’s community. She used innovative e-mail, Web strategies and guerilla marketing techniques that connected with the audience. Davis has expertise as a conference speaker and is a member of the Filene Research Institute’s i3 team dedicated to stimulating the development of new ideas and innovations for credit unions. Nancy Hutchinson, senior vice president of marketing and business development for Minnesota Power Employees CU, Duluth, Minn., was presented the Business Development Professional of the Year Award. During her 12-year tenure at her credit union, Hutchinson developed programs that increased membership by 41% and more than doubled asset size. She also introduced a model to increase membership penetration in select employee groups, and created branding strategies, a new website and a youth financial literacy program for her credit union. For more information on the CMBDC awards, use the link and choose the appropriate links on the “Events” pull-down menu.

Top 10 INews Now Istories for February

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MADISON, Wis. (3/19/09)--Here are the Top 10 News Now stories most requested by readers during February. Use the link to review the entire story online. 10. House panel OKs bill with permanent insurance increase WASHINGTON (2/5/09)--The House Financial Services Committee Wednesday approved H.R. 786, a bill designed to make permanent the $250,000 deposit and share insurance increase enacted as part of the Emergency Economic Stabilization Act of 2008. 9. CUNA audio conference: NCUA must explore options WASHINGTON (2/5/09)--Credit Union National Association (CUNA) President/CEO Dan Mica told participants on an audio conference call Wednesday that while CUNA recognizes federal regulators had no choice but to take action on behalf of the corporate credit unions, CUNA opposes the means chosen to fund the corporate credit union stabilization. 8. Corporate CU Task Force backs CUNA alternatives WASHINGTON (2/13/09)--The Credit Union National Association (CUNA) Corporate Credit Union Task Force Thursday reaffirmed strong support for using the Central Liquidity Facility (CLF) and TARP funds as a back up to help fund corporate credit union liquidity. 7. NCUA approves stabilization efforts for corporates ALEXANDRIA, Va.(2/29/09)--The National Credit Union Administration (NCUA) Wednesday took steps to "enhance and support" the corporate credit union system. 6. New data breach hits another card processor 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. 5. Cramdown provisions in Obama's foreclosure plan WASHINGTON (2/19/09)--The Credit Union National Association (CUNA) is reviewing President Barack Obama's Homeowner Affordability and Stability plan, which was released Wednesday and includes a provision for mortgage cramdowns. 4. Alternatives to premium assessment urged by CUNA WASHINGTON (2/2/09)--Federal regulators must consider alternatives to their plan to assess a share insurance premium to help fund a stabilization plan for corporate credit unions, the Credit Union National Association (CUNA) urged. 3. New info required in March 2009 call report WASHINGTON (2/4/09)--Credit unions will be required to supply more information on delinquencies, foreclosures, and repossessions on the quarterly form 5300 "call report"-- which is no surprise given the current market pressures. 2. CUNA site compiles NCUA stabilization program info WASHINGTON (2/6/09)--The Credit Union National Association (CUNA) has compiled information that may be useful to credit unions regarding the National Credit Union Administration's (NCUA) Corporate Stabilization Program. 1. New: CUNA concerned about costs of NCUA corporate plan WASHINGTON (1/30/09, UPDATED 10:30 a.m. ET)—The Credit Union National Association (CUNA) said that is does not welcome federal regulators' action to support corporate credit union liquidity by extracting a high price from credit unions, but does understand the need for the agency to act. To receive News Now headlines on your desktop free each morning, simply enter your e-mail address in this page's upper-left box. Click on the resource link below to learn more.

CUSOs foundation to help staff with hardship

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ST. PETERSBURG, Fla. (3/19/09)--PSCU Financial Services has created a foundation to enable its employees to help colleagues overcome financial hardships. The PSCU Financial Services Employee Hardship Foundation will be funded by voluntary employee contributions through check or payroll deduction. Any employees with at least 90 days of service can apply to the foundation for grants to cover hardship expenses from illness, loss of income, benefits, repossession of a primary vehicle or foreclosure. A team of employees will review applications and make funding decisions. “The goal of this foundation is to reduce the stress created by financial emergencies and to ensure that our employees know they can rely upon each other in times of need,” said David J. Serlo, president/CEO, PSCU Financial Services. PSCU is a credit union service organization serving more than 1,300 financial institutions nationwide.

New CUNA scholarships to defray training costs

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MADISON, Wis. (3/19/09)--As the current economy forces many credit unions to trim their training budgets, the Credit Union National Association (CUNA) announces a new scholarship program to cover tuition for its on-site schools and conferences. To be eligible, applicants must:
* Be an affiliated credit union employee or volunteer; * Demonstrate a financial need; and * Stay at the designated conference hotel.
Scholarship applications and supporting materials for eligible CUNA schools and conferences must be received by the CUNA Scholarship Committee at least 45 days prior to the program. For more information, use the link.