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CUs Bill of Rights to attract new members

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HARRISBURG, Pa. (3/20/09)--Philadelphia FCU is using a "Bill of Rights" theme to attract new members on its micro website, The Bill of Rights theme captures the nation's populist mood and turn frustration with banks into consumer empowerment, said the credit union (Life is a Highway March 18). The credit union shot a video in front of Independence Hall that features people from demographic groups reciting concerns as account holders of large banks. Each person proclaims, "Enough!" and then declares a right, such as "I have a right to an education," or "I have a right not to be nickeled and dimed." PFCU's Bill of Rights then appears, linked to videos of member testimonials. Visitors can sign the Bill of Rights and enter a monthly contest with $500 as the prize, and sign up for an account at the credit union. The Bill of Rights provided a local-tie in, since it was signed in Philadelphia, said the credit union.

Fraud cases prey on economically distressed

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MADISON, Wis. (3/20/09)--Fraudsters are having a field day with consumers during the recession, as credit unions receive alert after alert about members and others who took the bait and found out the deal was too good to be true. During times of economic turmoil, consumers are especially vulnerable to fraud. This year, there are some new frauds. This report excludes phishing, vishing and smishing scams--News Now reported those on March 19. Here are the latest schemes:
* Consumers are being victimized while attempting to buy vehicles on the Internet, reports the Federal Bureau of Investigation (FBI). The victims find low-priced cars or trucks on Web classified ad sites. In a new twist, some scammers pose as members of the military who must sell the vehicle quickly and cheaply because they are being deployed overseas. Many scams include a third-party vehicle protection program to ensure a "safer" transaction. Victims are directed to send full payment, or a percentage, to the agent via wire. But no vehicle arrives. Credit unions can advise members to do as much due diligence as possible on such transactions and pay attention to the website's rules. If someone asks a member to break the site's rules, it is possibly a scam (LoneStar Leaguer March 11) . * There have been several incidents of fraudulent cashier's checks and members taken in by "Cash for Gold" advertisements in Pennsylvania, according to the Altoona (Pa.) Chapter of Credit Unions (Life is a Highway March 13). * Residents in Reading, Pa., have been targeted by work-at-home scams. These are especially popular during times of high unemployment. A letter from an entity purporting to be Truenorth Monitoring and Research Services of Quebec, Canada, informs the victims that based on a previous survey with Consumer Survey Specialist, they indicated an interest in part-time income. The letter offers employment as a Mystery Shopper to serve as a Consumer Service Evaluator of select retail stores. The victims would make purchases at the stores and evaluate the provider on a probationary basis. An application and a counterfeit check for $3,975 accompany the letter. The fraudsters aim to have the victim deposit the check, spend $150 at a retail store, then send money to another location via Western Union/Moneygram (Life is a Highway March 16). * Retirees attempting to recover from market losses are especially vulnerable to financial or investment scams, says Brent Neiser, certified financial planner and director with the National Endowment for Financial Education (NEFE) (LoneStar Leaguer March 12). According to the Securities and Exchange Commission, investment scams commonly used include: high-return or "risk-free" investments; pyramid schemes; "ponzi" schemes; promissory notes; Internet investment fraud; and affinity fraud. Credit unions should tell members to thoroughly research any person, organization or company that offers financial planning or investment advice or sells products or services. They should say no if seller: guarantees results; is in a hurry to close the deal; makes the offer via an unsolicited telephone call, post card or e-mail; or promises huge crude oil profit--a scheme particularly popular in Texas (LoneStar Leaguer March 13).

Self-Help gets 2.5 million to ease foreclosures

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DURHAM, N.C. (3/20/09)--Self-Help CU was awarded a $2.5 million grant Wednesday under a new federal program to help stem foreclosures. The grant is part of a Neighborhood Stabilization Program developed late last year by the U.S. Department of Housing and Urban Development. The program’s purpose is to assist areas hit hardest by the housing crisis. Self-Help’s grant was one of 20 in North Carolina announced Wednesday by Gov. Bev Perdue and awarded to local governments, nonprofits and other organizations in the state as part of the federal program. The Self-Help grant will fund two programs. One will provide provide low-interest loans to nonprofit and for-profit affordable housing developers to rehabilitate and purchase foreclosed properties. The other will allow the credit union to lend to members at or below 120% of area median income to help them purchase foreclosed properties. Self-Help, based in Durham, N.C., is a $333.4 million asset, community development credit union.

Canadas Central 1 posts 29.8 million net income

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VANCOUVER, B.C. and MISSISSAUGA, Ont. (3/20/09)--Central 1 CU, a Canadian central banking facility and trade association for credit unions, posted $29.8 million in net income for 2008. Central 1 was formed on July 1 when CU Central of British Columbia (B.C. Central) and Credit Union Central of Ontario (Ontario Central) merged (Marketwire March 19). The combined institution serves nearly 200 credit unions in the two Canadian provinces. In 2008, net income rose 22% from the record $22.4 million, posted alone by B.C. Central in 2007. “This demonstrates the benefits of consolidating the systems’ second-tier organizations,” said Don Rolfe, Central 1 president/CEO. Central 1 serves as the primary source of borrowed liquidity for credit unions, and facilitates access to other liquidity sources such as Canada Mortgage and Housing Corp.’s mortgage-backed securities programs. Under Central 1’s management, member credit unions sold $1.8 billion in assets through those programs in 2008. The financial margin grew to $47.1 million from $31.1 million in 2007, reflecting higher net interest spreads and the impact of the merger. Total assets exceeded $8.5 billion at year-end, up from $8.1 billion--or $5.7 billion for B.C. Central, and $2.4 billion for Ontario Central--at the end of 2007. Central 1 paid a dividend at an annualized rate of 5.76 % for the first half of 2008, and at an annualized rate of 4.13% for the second half, in line with its policy of paying a dividend equivalent to twice the average 90-day Treasury Bill rate.

WOCCU to Basel Rebalance capital requirements

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MADISON, Wis. (3/20/09)--World Council of Credit Unions (WOCCU) is calling for a fundamental review of the Basel II capital framework by the Basel Committee on Banking Supervision so smaller institutions and credit unions that fared better during the recession aren't subject to tougher capital requirements than larger, riskier institutions that present systemic risk. In three letters to Basel Committee Chairman Nout Wellink, Dave Grace, WOCCU's vice president of association services, urged the committee to "rebalance" inconsistencies outlined in its consultative documents, which classify small financial cooperatives together with large, more complex banks. The letters are in response to the Basel Committee's March 12 announcement that all financial institution capital levels will need to be raised to increase resilience to future economic and financial stress. Its process aims to increase not only the amounts, but also the quality of capital required; improve the risk coverage of capital structures; and enact supplementary protective measures. Cooperative financial institutions help spread economic risk over a greater number of institutions, said WOCCU. By contrast, existing industry risk-modeling standards have failed to keep large banks from hemorrhaging losses. Smaller institutions, especially member-owned financial cooperatives, hold smaller concentrations of funds, strengthening the global financial network by reducing the risk each institutions poses, WOCCU added. "While we understand the committee's interest in advancing risk modeling, the current crisis may indicate that existing models were not well-developed to begin with, causing many banking sectors to suffer high levels of concentrated risk among few institutions," Grace wrote in a March 13 letter. He noted that no financial cooperatives have been bailed out with taxpayer dollars. According to a 2007 International Monetary Fund study, financial cooperatives in general are more stable than commercial banks, especially considering threats to their viability based on earnings and capital. Basel II means larger entities could hold comparatively less capital than smaller institutions. However, the current crisis has shown many larger institutions are riskier and prone to greater systemic problems, Grace wrote. Failure to rebalance capital requirements within Basel II to appropriate levels will potentially weaken smaller institutions WOCCU's position also emphasized the need for stress-testing procedures appropriate to financial cooperatives. "Unfortunately, it's taken a crisis of the current magnitude to demonstrate our point that credit unions are conservatively managed institutions with lower risk profiles on average than larger commercial banks," Grace said. "Our message to the Basel Committee is essentially, 'Don't punish us--we're not banks.' Modifying the edges of Basel II as the proposals suggest may cover some existing gaps but will do little to lessen the blow of future problems in the financial sector." Capital-level compliance by global financial institutions in response to the announcement will not go under review until 2010 due to the financial industry's current inability to meet the newly defined capital levels. Grace will represent WOCCU at an April 15 meeting with Wellink in Amsterdam to ensure policymakers take into account credit unions' needs. To view the three letters in their entirety, use the link.

Ohio league state awards announced

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COLUMBUS, Ohio (3/20/09)--The Ohio Credit Union League announced winners of its 2009 state awards. Honors were given for political action, chapter effectiveness, youth financial education, social responsibility and marketing (eLumination Newsletter March 18). Award winners are:
* Catherine Herring, CEO, Communicating Arts CU, Cincinnati, and Seven Seventeen CU, Warren--Claude Clarke Political Inspiration Award for an individual and credit union, respectively; * Western Buckeye Chapter and Cincinnati Chapter--Spectacular Chapter Award in Categories One and Two, respectively; * Ohio University CU, Athens--Desjardins Youth Financial Education Award in more than $101 million-asset category; * Kent (Ohio) CU and AurGroup Financial CU, Fairfield--Dora Maxwell Social Responsibility Award, for their fundraising campaign to assist local organizations; and * Members First CU, Cleveland, and AurGroup Financial CU--Cutting Edge Marketing Brilliance Award for agency and non-agency entries.
Winners will be honored April 23-24 at the league’s Zenith09 conference in Cleveland.

Filene seeks sustainability project participants

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MADISON, Wis. (3/20/09)--The Filene Research Institute is seeking participants for a sustainability project involving credit unions. The report, “Sustainability: An Implementation Guide for CUs” by Coro Strandberg, is due out later this year and will provide credit unions:
* A business case for sustainability; * A detailed implementation guide on sustainability strategy; and * Several case studies of U.S. and Canadian credit unions and their experiences in sustainability.
The project is a continuation of research the institute already has presented on the topic. Three credit union case studies also will be included. Space is limited for participation, but all credit unions applying to participate will be able to review and comment on the initial draft of the report. Credit unions also are invited to take a poll for the project by March 27. For more information, use the link.

CU sees change in members defaulting on auto loans

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FORT COLLINS, Colo. (3/20/09)--Norbel CU, Fort Collins, Colo., has noticed a change in the kinds of members that have come into the credit union to give up their car keys. “Good members are having problems,” Ed Bigby, Norbel CEU CEO, told News Now. “My biggest fear is when a good member loses his job and the ability to pay.” Norbel has had five vehicle repossessions this year. However, its delinquency rates remain low, because the credit union has lended very conservatively, Bigby said. To help out “good” members who have endured financial hardships, such as a job loss, Norbel is offering a temporary forgiveness program. The program is offered on a case-by-case basis to members who have defaulted on loan payments. Under the program, Norbel will accept a loan payment from a member--anything he or she can afford--and put “everything back to principle,” Bigby said. “We forgive the interest.” About 12 members are using the program, which is offered “judiciously” because the credit union doesn’t want half of its loan portfolio on it. But although the credit union gives up some revenue by forgiving interest on loan payments, it’s creating member loyalty and gaining public relations, he said. A field examiner from Colorado recently asked Norbel to send a copy of the program to him. This could indicate that there are other credit unions in the area that could use a similar tactic, added. Norbel has 6,500 members and $115 million in assets.

Outreach survey reveals Ohio CUs dedication

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COLUMBUS, Ohio (3/20/09)--Not only do Ohio credit unions provide financial products and service to members, they also strive to improve people’s lives, according to the Ohio Credit Union League’s 2008 outreach survey (eLumination Newsletter March 18). The survey revealed:
* Two out of three Ohio credit unions provide free financial education in their communities, primarily to adults (57%), high school students (45%), and elementary students (37%); * Roughly only 20% offer financial education to college students; * The top four topics taught were budgeting (58%), checking and savings basics (48%), identity theft (47%), and credit concepts (45%); and * About 67% of Ohio’s credit unions incorporate the movement’s social mission into their strategic planning processes, and 39% offer special savings and alternative loan programs.
The report will be used as an advocacy tool to strengthen legislative, media and regulatory initiatives that impact credit unions, said the league. The results were mailed to all Ohio credit unions. For more information, use the link.

CU System briefs (03/19/2009)

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* JEFFERSON CITY, Mo. (3/20/09)--St. Louis-based Southpointe CU President Brian Eyestone visited with state lawmakers in Jefferson City March 9 to discuss bills impacting credit unions. He visited Sen. Jim Lembke (R-1), Rep. Sue Schoemehl (D-100) and Rep. Walt Bivins (R-97). Eyestone thanked Lembke for working with credit unions on a bill that would help protect a credit union's lien interest on motorized vehicles. State lawmakers are on their annual spring break and in their home districts through Monday. The Missouri Credit Union Association will have its Annual Advocacy and Business Meeting March 30-31 in Jefferson City (The Missouri difference March 18) … * DOVER, Del. (3/20/09)--Dover FCU CEO David Clendaniel and a team of 11 credit union representatives met in Washington, D.C., with Delaware's newest U.S. senator, Sen. Ted Kaufman, to discuss credit unions' viewpoint on several key bills preparing for a vote. The senator challenged Clendaniel on credit unions' tax exempt status, which gave Clendaniel the opportunity to explain the unique structure and philosophy of credit unions. He gave examples of how credit unions serve their community and invited the senator to visit Dover Federal branches to meet members and learn first-hand the credit unions difference. Also at the meeting were Philip Lynch, Dover Federal vice president of finance; a representative from the Delaware Credit Union League, and executives and volunteers from several other Delaware credit unions … * COLUMBUS, Ohio (3/20/09)--The small credit union 50% discount for the Ohio Credit Union League's ZENITH09 conference has been expanded so more leaders from small credit unions can attend. Now, credit unions with assets of $20 million or less can register an unlimited number of staff and volunteers to attend for half price, according to the league's eLumination Newsletter (March 18) … * SUITLAND, Md. (3/20/09)--Andrews FCU's overseas headquarters and Wiesbaden, Germany, branch received the 2008 Bronze Award for outstanding participation in the Combined Federal Campaign Overseas, an annual fundraising drive that allows all federal government personnel serving overseas, military and civilian, to donate to authorized charities. From left are: Gen. Carter F. Ham, commanding general, USAREUR and 7th Arm; Georgia Dismukes, Andrews Federal overseas training and development administrator; Alfred Johnson, Andrews Federal vice president of overseas operations; and Diane M. Devens, director, IMCOM-E. (Photo provided by Andrews FCU) … * WARMINSTER, Pa. (3/20/09)--Representatives from Freedom CU spoke to educators Saturday at the PFT Educational Conference: Programs for Teaching, sponsored by the Philadelphia Federation of Teachers Health and Welfare Fund. Kirby Wood, vice president, member services, and Shawn Murphy, new business development representative, presented the credit union's Learn & Earn program, a financial literacy program that uses the Internet to teach basic banking functions, allows students to open an online account and offers monetary incentives. They explained how the program incorporates financial literacy lessons taught in classes with the student's first banking account. Here, Murphy, second from left, discusses the program with educators from the Philadelphia School District. (Photo provided by Freedom CU) …