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CU System Briefs (03/19/2013)

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  • BAKERSFIELD, Calif. (3/19/13)--Golden 1 CU is offering a $10,000 reward for information that leads to the arrest and prosecution of three men who robbed its Bakersfield, Calif., branch on March 12. The robbery occurred at about 2:30 p.m., and the three suspects exited the building and fled in a 1990s-era silver Toyota Camry, which later was recovered as stolen. The men are shown fleeing toward the getaway car. The men all wore black ski masks, and hooded sweatshirts and tennis shoes. One wore sweatpants, one dark pants, and one dark shorts.  One was armed with a black semi-automatic gun. Anyone with information should call the Bakersfield Police Department at 661-327-7111, said the credit union in a press release.  (Photo provided by Golden 1 CU) …
  • TALLAHASSEE, Fla. (3/19/13)--Dan Clark, former CEO of Tallahassee-Leon FCU and a financial consultant with Dan Clark Associates LLC in Tallahassee, died on March 7. Clark served as CEO of the credit union from 1987 through 2005. He also served seven years from 1971 to 1978 as a regional examiner for Florida's Department of Financial Institutions and worked for the Florida Credit Union League (now the League of Southeastern Credit Unions) from 1978 to 1980 as an auditor and then led marketing at the league's service corporation. He was director of the Florida Council of the Credit Union Executives Society, according to his company's website …
  • NEWARK, N.J. (3/19/13)--Calvin Jackson, former director of St. James A.M.E. FCU and former director at the New Jersey Credit Union League died Saturday while exercising on a treadmill, according to the league.  In addition to his position as board member, Jackson also served as the credit union's loan officer and chairperson of its credit committee, as well as trustee and board member of the organization that manages housing projects owned by St. James A.M.E., a church and parent organization of the credit union (The Daily Exchange March 18). He served on the league's board from 2008 to 2011, was president of the Essex/West Hudson Chapter, and served as a CULAC trustee. In 2011, Jackson was named NJCUL's Volunteer of the Year …
 

CUNA, League On Bank Charter Vote: Members' Interests Matter Most

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BROCKTON, Mass. (3/19/13)--Members' interests matter most, said the Credit Union National Association and the Massachusetts Credit Union League upon learning Monday that members of Brockton, Mass.-based HarborOne CU had approved converting the credit union into a state-chartered mutual cooperative bank.

"CUNA strongly believes that the best financial services model for consumers is the credit union model, which offers better rates, lower and fewer fees, and superior personal service," said CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile. "All of that stems from the basic credit union structure of being not-for-profit, cooperatively owned and member-directed."

CUNA policy with regard to credit union conversion to a bank is that the decision is one for the membership to make since credit unions are cooperatively owned by their members, said Gentile. "It is important, however, for the members to be fully informed about what's being proposed and its implications prior to the conversion."

Roughly 62% of voting members of the $1.9 billion asset credit union cast ballots in favor of the change. The credit union has 139,078 members. Of that, more than 22.433--or 21% of eligible voters actually voted either by mailing in ballots or voting at a special member meeting on March 11 (Fort Mills Times and The Enterprise March 18).

While it is the prerogative of the membership to determine the fate of their credit union, members are best-served by a credit union operating with a credit union charter, the Massachusetts league noted Monday.

"Any charter conversion has to be approached from the viewpoint of the credit union's members--owners of the credit union," said league President Daniel F. Egan Jr.  "Unfortunately, in this case, the members seemed to have accepted the argument that the operational advantages of the bank charter outweighed their rights and privileges as credit union members."

The league said it strongly believes that the member-owner, not-for-profit credit union charters is the charter of choice. "Credit unions now have 2.5 million members in Massachusetts and 95 million members nationwide because they put the interests of the consumers first," said Egan.

"Under current laws and regulations, credit unions operate under more restrictions than banks," Egan said. "In particular, credit unions lack access to alternate sources of capital, face higher net worth requirements, are more restricted in business lending and serve a defined field of membership." 

"These issues are real and indicative of the challenges that credit unions face as they seek to meet the modern needs of today's consumers. It is vitally important that legislators and regulators pay heed to these challenges and work to adopt new laws and regulations that keep the credit union charter viable," Egan added.

HarborOne , the largest state-chartered credit union in New England, said it applied for the change after it had to turn down mortgage lending business because its charter was limited to four counties and prevented it from growing in the Boston market. It also said it was nearing its member business lending cap.

The National Credit Union Administration said the credit union had the alternative to petition the state to widen its geographic boundaries and that it was not near its MBL cap.

Patelco CEO To Resign

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PLEASANTON, Calif. (3/19/13)--Patelco CU President/CEO Ken Burns announced Monday that he will be leaving the Pleasanton, Calif.-based credit union.

"He will continue to lead the credit union over the next several months to ensure a smooth transition until a new CEO is secured," said a spokesperson for the $3.9 billion asset credit union.

Burns joined Patelco in 2009 "with the objective to turnaround the credit union during an economically challenging time in the nation," the spokesperson told News Now. "During his tenure, the credit union achieved its best performing year (2012) in the organization's history."

The spokesperson also said that "Patelco appreciates Ken's leadership, and we are thankful for his ongoing assistance during this transition. We remain committed to be the pre-eminent financial service provider to our valued members and community."

US Supreme Court Rejects Goldman Appeal On MBS

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WASHINGTON (3/19/13)--The U.S. Supreme Court Monday refused to hear an appeal by Goldman Sachs of a lower court's decision involving mortgage backed securities (MBS) in a case similar to lawsuits filed by the National Credit Union Administration against securities dealers, including Goldman Sachs.

Monday's case does not involve NCUA, but  has similar arguments that were argued in the lower courts before the nation's highest judicial body denied the case without comment. 

Goldman Sachs, an investment bank, asked the Supreme Court to overturn  a decision by the 2nd Circuit Court of Appeals in  a class-action lawsuit filed by NECA-IBEW Health & Welfare Fund. NECU's suit alleged Goldman Sachs provided false and misleading information about the securities it underwrote and issued before the financial crisis hit (The Wall Street Journal and American Banker March 18).

NECA-IBEW said it bought securities in 2007 and 2008 from two of 17 trusts that Sachs offered. It alleged that Sachs' materials for the offerings included misleading information about the practices of mortgage lenders and the appraisals of properties backing the securities.  NECA-IBEW also maintained that Goldman misled investors about the underwriting and appraisal standards of the banks originating the loans backing the MBS offerings.

A lower trial court dismissed claims involving securities from 15 trusts NECA-IBEW did not do business with. However, last year the New York-based Second U.S. Circuit Court of Appeals ruled NECA could bring a class action related to the other offerings.  In a separate case, the First Circuit Court of Appeals ruled that investors can't sue an issuer over MBS that they did not purchase.

NCUA, as a conservator of corporate credit unions that bought similar MBS offerings before they collapsed, has filed several lawsuits seeking compensation for losses to the National Credit Union Share Insurance Fund when the corporates closed.

Texas League Monitoring Bills Of Interest To CUs

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AUSTIN, Texas (3/19/13)--The Texas Credit Union League is monitoring several bills in the state  legislature that are of interest to credit unions.

March 8 was the last day for lawmakers to file legislation for this session. They filed more than 6,000 new bills, TCUL said (The Advocate March 15).

TCUL will be closely monitoring several for their potential impact on credit unions, but there are no bills filed that are a directly attacking the franchise tax exemption or other aspects of credit union operations, TCUL said.

Highlights of recent activity likely to be of the most interest to credit unions include:  

  • SB 244 passed favorably out of the Senate and was sent to the House. This is the Texas Credit Union Department's bill, which would increase the number of advisory/honorary directors for credit unions to six from three.
  • HB 560 was reported favorably out of the House Investments and Financial Institutions Committee and sent to the floor of the house. The stand-alone House bill increases the number of advisory/honorary directors.
  • HB 1602, which is identical to SB 244, was heard in the House Investments and Financial Institutions Committee. It's expected that it will be reported favorably out of the committee in the next week, said TCUL.
  • HB 1451 would require the Texas Credit Union Department to establish a program to encourage credit unions to make micro-loans to victims of domestic abuse.
  • SB 295 would require lenders to notify contractors of the suspension of a loan disbursement, with certain exceptions. At the moment, this legislation does not appear to have any momentum, but TCUL said it is watching it closely and is expressing concerns about the bill to the sponsor.
  • SB 385 proposes a new section in the law called "Property Assessed Clean Energy Act,"  TCUL said. The act would create a superior lien for loans that finance energy upgrades to the borrower's property.
  • SB 232 would permit the Office of Consumer Credit Commissioner to require Nationwide Mortgage Licensing System and Registry registration for additional industries, such as property tax lenders, credit access businesses, and pawnshops, under its jurisdiction
  • SB 247 gives the Finance Commission additional administrative powers over property tax lenders. Property tax lenders are prohibited from deceptive advertisements and must disclose all fees and charges in solicitations or for any subsequent transactions. Other entities such as credit unions, with pre-existing recorded liens on encumbered properties gain a regulated form and process to request a payoff from property tax lenders.
  • SB 474 would change financing statements that are filed to protect secured transactions to require lenders, including credit unions, to use new financing forms.

CNN Money: CU Is 'Best Bet' For Free Checking

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EW YORK (3/19/13)--Consumers' "best bet" for finding a free checking account is to go to a credit union, CNNMoney said in a Monday article.

If members meet certain conditions, 96% of credit union checking accounts are free or can become free, Bankrate.com said.

"Once again, free checking is the rule rather than the exception among the largest credit unions," said Greg McBride, Bankrate's senior financial analyst. "That's in stark contrast to the sharp year-over-year declines that we continue to see in the banking sector."

To read the CNNMoney and Bankrate.com articles, use the links.

Bankrate Busts Myths About CUs

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MADISON, Wis. (3/19/13)--A March 18 Bankrate.com article shatters the myth that switching to a credit union means sacrificing convenience.

Having a branch nearby is one of the most important criteria for many people when choosing a financial institution. A 2009 study by the Rand Corp. in Santa Monica, Calif., found that 59% of those surveyed ranked branch convenience as one of their primary reasons for why they choose chosen a financial institution.

The article also cites Credit Union National Association statistics in outlining how credit unions meet their members' expectations of convenience.

Credit unions have collaborated together to create shared branching networks, the Bankrate.com article explained. One credit union branch network, Credit Union Service Centers Network, has more than 5,000 branches nationwide and operates a 24-hour customer service call center.

Credit unions also offer access to an ATM network shared with other credit unions called the CO-OP ATM Network, which maintains nearly 30,000 ATMs nationwide, including more than 9,000 that can take deposits.

Also, some credit unions will waive out-of-network ATM fees and even reimburse members for fees charged by other ATM operators, Bankrates's 2013 Credit Union Checking Survey found.

Credit unions also leverage technology to offer convenience, said the article. About 85% of credit union members were satisfied with their access to online and mobile banking services, compared with 66% of customers of large national banks, according to 2012 survey by Boston research firm Chadwick Martin Bailey.

US Candidates Needed For International Leadership Program

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Click to view larger image Rodney Wilson, California and Nevada Credit Union Leagues legislative and regulatory lobbyist and a participant in the World Council of Credit Unions International Credit Union Leadership Program, shares best practices on government relations at a credit union conference in the Dominican Republic.  (Photo provided by the World Council of Credit Unions)
MADISON, Wis. (3/19/13)--The World Council of Credit Unions (WOCCU) is seeking U.S. credit union professionals to apply for a two-week credit union internship in Costa Rica, June 9- 22, through WOCCU's International Credit Union Leadership Program. The application deadline is April 12.

Twelve candidates will participate in the scholarship program, which covers all expenses except airfare.

The program "offers excellent opportunities for emerging credit union leaders to better understand how another country's credit unions reach underserved populations and support their communities through member education and other special projects," said Brian Branch, WOCCU president/CEO.

"At the same time, interns gain deeper cultural appreciation and foreign language practice while living with host families," he said.

The program facilitates idea exchanges, promotes foreign language skills, exposes participants to cultural diversity and improves problem-solving skills as they relate to the credit union industry. Participating U.S. credit union leaders learn about methods to better serve an increasingly diverse membership, including youth, businesses and low-income and Hispanic members.

In exchange, credit union professionals from Costa Rica can intern in the U.S. Twelve Costa Rican credit union professionals will begin their U.S. internships April 7. The program is part of the U.S. Department of State's Professional Fellows Program and is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges.

The leadership program provides each participant with credit union placement, lodging with a host family, meals and communication stipends, local transportation and traveler's insurance. Sponsoring U.S. credit unions must cover airfare of roughly $950.

For more information, use the link or contact Michael Suing at msuing@woccu.org or 608-395-2075.

CUANY And NYCUF Team To Attract Young Pros To Convention

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ALBANY, N.Y. (3/19/13)--The Credit Union Association of New York, through a partnership with the New York Credit Union Foundation, will offer two grants to assist credit union employees under the age of 35 in attending the association's Annual Meeting And Convention, June 13-16.

"Our convention provides an excellent background of the statewide credit union landscape for young professionals," said young professional Cara Carlevatti, Great Erie FCU, Orchard Park, N.Y. "It's a great chance to network with vendors, association staff and other credit union professionals.

The association's Young Professionals Commission (YPC) will once again host a networking event at the conference. The group will also manage the NYCUF booth.

"Convention is a central meeting place for New York's credit union leaders to gather and learn—together and from each other," said YPC Chairman Lisa Totaro, Sunmark FCU, Latham, N.Y. "Young professionals who attend convention alongside statewide leaders benefit from knowledge-sharing while also providing a fresh perspective on the issues confronting our industry today."