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CU System briefs (03/26/2010)

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* IOWA CITY, Iowa (3/29/10)--Members of the Hiawatha, Iowa-based Best of Iowa Community CU (BICCU) voted last week to merge with the Iowa City-based University of Iowa Community CU (UICCU), said theIowa City Press-Citizen (March 24). UICCU CEO Jeff Disterhoft told the publication the merger--which has been discussed informally since last fall and approved by the boards of both credit unions--will begin immediately and should be completed by Aug. 1. BICCU has two branches and 22 employees, who will be retained after the merger to keep both branches open. The additions will bring UICCU's branch total to 10. BICCU, with assets of $44.9 million, serves about 4,500 members while the $897 million asset UICCU serves about 67,000 members ...

Data-breaches hacker sentenced to 20 years

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BOSTON (3/29/10)--The hacker convicted of masterminding the world's biggest data breaches and stealing hundreds of millions of credit and debit card numbers was sentenced to 20 years and a day in prison Friday, to be served concurrently with another 20-year sentenced he received Thursday on related breaches. U.S. District Court Judge Douglas Woodlock Friday also ordered that Albert Gonzalez, 28, of Miami, Fla., pay a $28,000 fine for his role in stealing roughly 130 million card numbers from Heartland Payment Systems Inc., as well as the 7-Eleven stores and Hannaford Brothers, a New England grocery chain (Boston Globe via March 26). Thursday's sentence by Judge Patti Saris of U.S. federal court in Boston was for the theft of card numbers from retailer TJX Cos., Barnes & Noble, OfficeMax, BJs Wholesale Club and others (InformationWeek March 26). Prosecutors said the breaches result in more than $200 million in losses and damages in those cases. U.S. Attorney Stephen Heymann told the court that Gonzalez "shook up a portion of our financial system." In court documents, Gonzalez acknowledged he had a central role in the TJX case but said he had only a "peripheral" role in the Heartland case, which cost Heartland $129 million in losses related to upgrading its computer security systems, communicating with the public and fending off lawsuits. The breaches caused headaches for credit unions and other financial institutions across the nation who were forced to reissue cards to replace the ones compromised in the breaches as well as for members and other consumers whose accounts were invaded by cybercriminals as a result of the breaches.

Minn. CUs flooded with requests from small biz

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ST. PAUL, Minn. (3/29/10)--An article by Minnesota Credit Union Network President/CEO Mark Cummins notes small businesses are clamoring for loans, and credit unions can help to spur lending to them if member business lending limits are lifted. About 99% of the nation's 25.8 million registered businesses are considered small, he said in an opinion-editorial in Finance & Commerce (March 26). Only 40% of small business owners attempting to borrow in 2009 had all their needs met--lower than in the mid-2000s when up to 90% had so. "All of this leads one to draw the conclusion that low credit availability is exacerbating the effects of the recession," Cummins wrote, adding, "Credit unions can help." Cummins noted that credit unions are being innundated with requests from small businesses. "Despite the economic slowdown, credit union member business lending in Minnesota increased by 0.4% over the past year. While that might not seem like a large increase, any gain is impressive in today's economy. And we're originating more loans than ever before, with credit union business lending up 47% over the past four years." Credit unions are working hard to meet the demand, but "restrictive regulations limit our ability to do so," he wrote, noting credit unions' arbitrary business lending cap. Relaxing the artificial lending restriction would promote lending, spending and jobs creation, therefore increasing the flow of credit to borrowers and neighborhoods. He urged passage of such legislation currently before Congress. Cummins used remarks from House Financial Services Chairman Barney Frank (D-Mass.) and House Small Business Committee Chairwoman Nydia M. Velázquez (D-N.Y.) to illustrate his point. Both have recently commented on the importance of small businesses and ready access to capital. He also referenced the Obama administration’s recent emphasis on these issues in its economic agenda. “It seems that credit unions, consumers, Congress and the commander-in-chief all want the same thing,” Cummins concluded. “It is our responsibility to overcome the risks [of extending credit in a struggling economy] and expand lending-- and the credit unions of our state are willing to gamble on Minnesota.” Use the link for the full column.

Best practices honored by Marketing and BD Council

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MADISON, Wis. (3/29/10)--The CUNA Marketing and Business Development Council announced its Best Practices Award winners during the council’s 17th annual conference last week in Washington, D.C. The awards recognize outstanding new marketing and business development approaches with potential for universal application across the credit union movement. Without regard to asset size, a panel of judges selected winners based on strategy, process, application and results. This year’s winners are (by category):
* Business Development: Erie (Pa.) FCU, for finding new ways to serve the needs of its existing Business Affinity Partners (select employee groups) and their employees--specifically helping employees to overcome financial hardship and developing creative new services for businesses to help them survive during the economic downturn. The $298 million asset credit union offered more free seminars to members, which doubled attendance; created a new merchant indirect lending program; and increased business loans. The credit union also expanded its trade show and community-event participation to attract new business members, doubling its number of Business Affinity Partners. * Community Outreach: P&G Mehoopany Employees FCU, Tunkhannock, Pa., for its lock-in “All Night Party” for Tunkhannock Area High School students on graduation night. After a tragic automobile accident the previous year, which took the lives of three students, the $72 million-asset credit union worked with the high school and raised more than $7,500 in cash and prizes from more than 100 businesses and members of the community for the new event. * Miscellaneous: Bucks First FCU, Bristol, Pa., for Project Flipside. The objective of Project Flipside was to engage Generation Y and gain visibility within the community, and direct youth to a website, using social media and word of mouth marketing. Within six months, the $84 million asset credit union forged four new partnerships with high schools in the county, opened an in-school credit union branch based on Project Flipside, and partnered with other community organizations.
For more information, use the link.

Washingtons first Money Smart Week set

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SEATTLE (3/29/10)--Free classes and events helping consumers learn to manage their personal finances will be offered April 25 through May 1 statewide during Washington’s first-ever Money Smart Week. The week is coordinated by the Jump$tart Washington Coalition; Washington Credit Union League; Washington State Employees CU, Olympia; and the Washington Department of Financial Institutions, among others. It is designed to educate consumers about money management and generate awareness of financial education available on topics such as saving, investing and using credit wisely. Classes, seminars and activities will be presented by representatives from local community groups, financial institutions, not-for-profit organizations, businesses, schools, libraries, government agencies and media outlets. “There are many organizations in Washington providing financial education,” Jump$tart Washington Coalition President Amy O’Donnell said. “This is a way for them to coordinate, partner and share resources with their community while promoting financial education. We hope Washington residents will take advantage of the events to learn more about how to build and protect their personal finances--lessons they can pass onto the next generation.”

Kevin Carroll Exec Series at The 1 CU Conference

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MADISON, Wis. (3/29/10)--Attendees at The 1 Credit Union Conference in Las Vegas will be treated to two special events: Keynote speaker Kevin "the Katalyst" Carroll, author of the Red Rubber Ball series, and the return of the Executive Series of breakfasts with the authors/presenters at the conference. The conference, July 11-14, is the one-time-only combination of the World Council of Credit Unions' (WOCCU) World Credit Union Conference and the Credit Union National Association's (CUNA) America's Credit Union Conference. Carroll is founder of Kevin Carroll Katalyst LLC and author of Rules of the Red Rubber Ball, What's Your Red Rubber Ball?! and The Red Rubber Ball at Work, which inspire businesses, organizations and individuals to embrace their spirit of play and creativity to maximize their human potentiial to sustain meaningful business and personal growth. In his keynote session, July 14, entitled, "Credit Unions: Uncommon Catalysts Turning Dreams into Reality," Carroll will use his storytelling skills to challenge and enlighten attendees as credit union leaders to discover new ways of thinking and problem solving to build a productive, passionate credit union team to better serve members. Carroll, a former head athletic trainer for the Philadelphia 76s, became a creative change agent at Nike and was instrumental in the company developing a deeper understanding of athletic product performance, team dynamics and interpersonal communication. He has turned creative ideas into reality for the National Hockey League, ESPN, Nike, Starbucks (his words appeared on 17 million Grande cups), The National Basketball Association, Walt Disney Co., Mattel, Hasbro, Procter & Gamble, Discovery Channel, Capital One and more. He addressed dignitaries from 31 nations at the United Nations in 2005 about the importance of play in their developing countries. Also at The 1 Credit Union Conference will be the return of the popular series of learning and networking breakfasts, the Executive Series for credit union CEOs and executives. Participants will receive books of the presenters plus Carroll's book, The Red Rubber Ball at Work.
Presenters include:
* Monday July 12, 7:30-9 a.m.: "Unlock Your Purpose," Howard Mann, author of Your Business Brickyard: Getting Back to the Basics to Make Your Business More Fun to Run. * Monday July 12, 11 a.m. to 12 p.m.: "Bonus session: Q&A with Jim Collins: An Interactive Session for Credit Union Executives," Jim Collins, author of From Good to Great. Attendees will receive his recent book, How the Mighty Fall: And Why Some Companies Never Give In. This session is limited to the first 100 Executive Series registrants. * Tuesday, July 13, 7-9 a.m.: "Word of Mouth: The Most Effective Marketing in an Advertising-Drenched World," Tara Hunt, author of The Whuffie Factor: Using the Power of Social Networks to Build Your Business. * Wednesday, July 14, 7:30-9 a.m.: "New Small Business Market: Growth Potential for Any Credit Union," Pamela Slim, author of Escape from Cubicle Nation: From Corporate Prisoner to Thriving Entrepreneur.
The entire series and breakfasts cost $299. Conference attendees can register for the Executive Series once they have registered for The 1 Credit Union Conference.

Achievements by three marketingbd pros recognized

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MADISON, Wis. 3/29/10)--Three credit union professionals were honored for their credit union marketing and business development
achievements at the CUNA Marketing and Business Development Council (CMBDC) Conference, last week in Washington, DC. Joe Hearn, chief operating officer for Dupaco Community CU, Dubuque, Iowa, was the 2010 Hall of Fame inductee. Hearn started in marketing at Dupaco in 1985, when the credit union served 19,000 members, had $55 million in assets and offered just a handful of products. Now the chief operating officer, his credit union has $826 million in assets and serves more than 56,000 members through 10 branch locations. Kellie Terhune-Neely, vice president for Hughes FCU, Tucson, Ariz., won the Marketing Professional of the Year Award. Terhune-Neely has helped her credit union grow from more than 11,000 members and $53 million in assets to more than 58,000 members and $458 million in assets today. Sandi Carangi, vice president of business development for Erie (Pa.) FCU was presented with the Business Development Professional of the Year Award. Carangi has been at the credit union 22 years, having held her current position for the past 12 years, and has seen her credit union go from a private employer base to a community charter. The credit union saw 4.9% membership growth in 2008 and 2009’s growth was 9.86%. For more information, use the link.

Strong turnout at Maine CUs day at state house

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AUGUSTA, Maine (3/29/10)--With one of the highest turnouts of credit union representatives in years, the 14th Maine Credit Union Day at the State House accomplished its primary objective: connecting credit unions with legislators, said the Maine Credit Union League.
At Maine Credit Union Day at the State House in Augusta, Maine Credit Union League President John Murphy shares a light moment with state Rep. Paulette Beaudoin, who serves on the Insurance and Financial Services Committee. (Photo provided by the Maine Credit Union League)
Nearly 80 representatives from 35 credit unions joined the league in Augusta Thursday for the event. "It was great to see attendees representing credit unions from every region of the state at this year's event," said league President John Murphy. "Legislators want to meet with credit unions in their district and we were able to make those connections this year. A number of legislators mentioned how impressed they were at the strong participation from credit unions, and that was nice to hear," he added. About two-thirds of the legislature took the time to visit the Maine Credit Union display and speak with attendees. The House and Senate also passed a joint resolution recognizing the league and Maine's credit unions "for the positive contributions and significant role they have made with Maine people and their communities."

Stable structures will help Haitis CUs survive

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LEOGANE, Haiti (3/29/10)--Money funneled through World Council of Credit Unions (WOCCU) is aiding Haitian credit unions as they attempt to help people get back on their feet in the wake of a devastating earthquake earlier this year.
Click to view larger image Jean Gabriel Rousseau, board chair for CLEF credit union in Leogane, Haiti, inspects the wreckage that was the credit union’s office prior to the Jan. 12 earthquake.
As an example, members of Haiti’s CLEF caisse populaire, or credit union, line up outside a tent that has served as their credit union’s main office since the Jan. 12 earthquake reduced the original structure to rubble. At the sound of a desk bell, the member next in line enters the two-room tent to conduct business. Without the tent, provided by WOCCU through contributions, the credit union would not be able to help its members begin to rebuild their lives. While the tents may offer an effective temporary solution, April’s rains will soon come, followed by a May-to-November hurricane season with storms that could sweep the tents and their contents away, forcing Haiti’s people and its credit unions to begin again. In Leogane, the epicenter of January’s earthquake and home to the greatest damage, that could spell disaster for the future of CLEF and its members, according to board chair Jean Gabriel Rousseau.
Click to view larger image Jean Sanon Bozil, general manager for MAMEV credit unions in Haiti, conducts business from inside a tent provided by the World Council of Credit Unions.
In nearby Gressier, officials at MAMEV credit union face the same threats to their future. Located between Leogane and Port-au-Prince, MAMEV lost one branch and two employees were killed. The staff currently works out of a two-room WOCCU office tent, similar to the one occupied by CLEF, but pitched next to its original headquarters office, which suffered severe structural damage. The loan department conducts business on folding tables in the open air under a tarp set up behind the tent. The credit union’s first concern is the safety of its employees, according to Jean Sanon Bozil, its general manager. “It has been a disaster,” Bozil said. “Employees’ houses have been destroyed and they are living outdoors under the trees. They are operating at a reduced capacity because of fears about their living conditions and many need psychological counseling.” Fears of growing loan defaults that threaten credit union capital positions also exist, putting the future of both institutions in jeopardy. In the wake of the earthquake, members at MAMEV immediately began withdrawing savings to meet emergency needs. As members’ lives have stabilized, deposits have begun returning to the credit union, but not at the level necessary to offset portfolio losses.
Click to view larger image Loubeau Fleurenctin, chair for CECACHE credit union in Port-au-Prince, Haiti, stands beside the wreckage of his credit union, uncertain of the building and the institution's future. (Photos provided by World Council of Credit Unions)
Officials for both credit unions agree that more permanent structures--including possible repairs to MAMEV’s existing structure and entire replacement of CLEF's crumbled facilities--will become more critical in the face of the imminent rainy and hurricane seasons. “In Haiti, temporary solutions tend to become permanent ones,” said Loubeau Fleurenctin, chair for CECACHE credit union in Port-au-Prince. “I don’t know what kind of permanent shelters are available, but we need to move beyond the tents.” CECACHE, located near some of Port-au-Prince’s most damaged neighborhoods, remains upright, but just barely. One side is completely collapsed and the fate of the remaining structure is speculative at best. Officials from Haiti’s Ministry of Public Transportation and Communications inspected the remains of CECACHE last week, saying that the back half may be salvageable, but the front and side with the greatest damage, would need to be razed. Meanwhile, Fleurenctin and his staff operate out of a WOCCU office tent like many of Haiti’s other credit unions. And like other institutions, CECACHE worries about its financial future, estimating that the 9,500-member credit union’s loan portfolio is already US$14 million in arrears and growing. “Everything is transparent in our house,” Fleurenctin said of his loss disclosure and its impact on CECACHE's future. “A nice office is a good thing to have, but without adequate liquidity to support credit, we can’t operate.”