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Central States Mortgage files for receivership

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MILWAUKEE, Wis. (3/31/09)--Central States Mortgage Co., which provided mortgage services to more than 250 credit unions, has filed for receivership and plans to liquidate its assets. The Wauwatosa, Wis.-based company, which closed its doors March 9, filed its liquidation receivership petition in Milwaukee County Circuit Court late Friday (The Business Journal of Milwaukee and Milwaukee Journal Sentinel March 28). The filing is similar to a federal bankruptcy, with the company liquidating its assets with oversight from a court-appointed receiver. Central States is asking that Philip Ostroski, managing director of MorrisAnderson & Associates, be appointed receiver. The filing did not summarize Central States' assets and liabilities. Dean Wilson, chairman of Central States' board of directors and CEO of Focus CU, Menomonee Falls, Wis., said the company was taking the action to protect customers creditors and former employees by providing an orderly transition of business. The filing will help ensure that everyone involved is protected and treated as fairly as possible in the process, Wilson said. The company is working with AmeriCU Mortgage Co., based in Troy, Mich., to close and fund mortgage loans that had stalled when Central States closed its operations. (SEE RELATED: "New mortgage co. opens in Central States offices" in News Now's System section.) Central States wrote more than $500 million in loans last year. When it closed, about 220 people in five states lost their jobs. Wisconsin's Department of Workforce Development says that Central States' closure notification was dated the same day it shut down its Wauwatosa office and it is conducting an investigation. The agency said it filed a $3 million wage lien against the company to cover possible violations of the law (TMJ-4 Milwaukee March 30). The mortgage servicer was largely owned by credit unions. It recently sued its former CEO and founder, Richard Jungen, and several former executives, alleging that the group ran a business that caused $15 million in losses for the company.

New mortgage co. opens in Central States offices

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MILWAUKEE, Wis. (3/31/09)--AmeriCU Mortgage, a Troy, Michigan-based provider of mortgage services to credit unions, has opened an operations center in Wauwatosa, Wis.--in the offices formerly held by the now-defunct Central States Mortgage Co. AmeriCU said Sunday that it had received approval from the state Department of Financial Institutions on March 18 and immediately began operations. Within 72 hours, it had hired 45 staffers and worked with local credit unions to close 15 loans for homeowners who were in danger of losing funding. "AmeriCU hit the ground running as fast as it possibly could," said Dean Wilson, president/CEO of Focus CU, Menomonee Falls, Wis. "They were able to support many families that had closed on their mortgages but were still in the rescission period, by processing and financing these loans. "Their willingness to step in and work with data that came from applications that had been processed by another company as well as computer systems that were not their own helped many families realize their dreams of home ownership," Wilson added. According to AmeriCU CEO Don Calcaterra Jr., "We believe the most effective lending is done locally, through people in the community who understand the unique needs of its residents. We find those people by working with credit unions." The center is currently staffed by 13 employees. AmeriCU also hired 27 mortgage professions throughout Wisconsin and is looking for additional staff for its operations center. AmeriCU Mortgage is a division of Towne Mortgage Co., a privately held mortgage banking company providing residential and commercial real estate financing in a number of states. It provides mortgage origination and servicing support, membership and income growth strategies, mortgage loan asset valuations and sales, and default management services. See the related story, "Central States Mortgage files for receivership."

Azerbaijan Uzbekistan now WOCCU members

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MADISON, Wis. (3/31/09)--The credit union associations of Azerbaijan and Uzbekistan have joined the World Council of Credit Unions (WOCCU). WOCCU’s board of directors approved applications from the two countries’ national organizations earlier this month. “The entrance into membership of two more former Soviet satellite [countries’ movements or associations] that began as WOCCU development programs speaks to the strength credit unions can bring to developing nations,” said Pete Crear, WOCCU president/CEO. The Azerbaijan Credit Union Association (AKIA) represents 56 of the 70 credit unions serving the country. AKIA’s member institutions serve 90% of the country’s estimated 9,800 credit union members. The association is the first to receive WOCCU’s new affiliate member designation, designed to admit credit union associations without the financial resources to support direct memberships. “On behalf of all Azerbaijan credit unions, we will do all the work necessary to promote the development of credit unions in our country,” said Elchin Bagirov, AKIA's chairman. “We plan to start our work immediately.” WOCCU's board also accepted the Credit Union Association (CUA) of Uzbekistan as a direct member of the organization. CUA was formed by 11 credit unions in 2005 as the first phase of WOCCU's development program in the Central Asian nation ended. WOCCU began working in Uzbekistan in 1998, laying the foundation for a national credit union movement. In 2002, Uzbekistan’s first credit union law was passed with the assistance of WOCCU and guidance from its Model Law for Credit Unions publication. The first three credit unions formed that same year. Today, Uzbekistan has 78 credit unions that serve more than 99,000 members. The institutions hold $80 million in assets and 4.6% of domestic retail savings accounts. “We are honored to be part of the WOCCU community,” said Nizomiddin Muradov, CUA executive director. “We will put all our efforts forth to add value to the development of credit unions and their members worldwide.” As new WOCCU members, AKIA and CUA join Ghana Co-operative Credit Union Association and Seychelles CU, which were admitted as members effective Jan 1. On that same date, Abacus Australian Mutuals became Australia’s member to the global trade association, assuming the role formerly occupied by Cuscal Ltd. Representatives from the new member associations will be introduced and given the opportunity to speak to delegates at WOCCU's next Annual General Meeting at the World Credit Union Conference, July 26-29, in Barcelona, Spain. For more information, use the link.

Pennsylvania CUs 4Q loan growth strong

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HARRISBURG, Pa. (3/31/09)--Loan growth for Pennsylvania credit unions continues to be strong, according to the just-released Pennsylvania Profile Fourth Quarter 2008, despite the U.S. economy, which contracted at a 6.2% annual rate during the fourth quarter of 2008. Overall credit union loan growth totaled 8.1%, with business loans increasing by 35.7%, first mortgages by 17.9%, and used-car loans by 8.7%. The only loan category seeing negative loan growth was new-car loans, falling 4.9% due to lower consumer demand in the marketplace (Life in a Highway March 30). “While others in the marketplace have restricted their extensions of credit, credit unions continue to accept deposits and make loans to members,” said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association. “Many of Pennsylvania’s credit unions were born out of the Great Depression when average consumers found it difficult to get credit,” McCormack added. “So it’s not surprising that as we are in the deepest recession since the 1930s, credit unions are still a strong source of consumer and small business credit in communities throughout Pennsylvania.” Pennsylvania credit unions also experienced increased deposit numbers and growth in membership during the quarter. Against a difficult economic backdrop, Pennsylvania credit unions reported a 31 basis point return on assets (ROA), down from 77 basis points in the third quarter. For the full year, Pennsylvania credit unions reported 65 basis points in ROA--above the national average of 31 basis points.

Bystander shot during robbery getaway

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LENEXA, Kan. (3/31/09)--A man who may have witnessed a robbery at Credit Union of Johnson County's branch in Lenexa, Kan., was shot several times about two blocks from the credit union as the robber fled the scene Saturday morning. The victim was rushed to the hospital. His condition is unknown, said several local news sources. The credit union was robbed just after 9 a.m. Saturday, when a lone man entered the branch, vaulted the counter and displayed a silver pistol, said a spokeswoman with the Federal Bureau of Investigation (Kansas City Star March 28). He left the credit union driving a light-colored sport utility vehicle with Colorado license plates. About two blocks from the credit union, the robber shot the victim several times. It was unclear whether the victim was a member of the credit union or if he had followed the robbery suspect. Conflicting reports had the victim's age in the sixties or as 71 (WDAF via and WIBW TV March 28).

N.D. CU moves to escape flood NCUA activates help

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FARGO, N.D. (3/31/09)--Fargo (N.D.) VA FCU will move into another Fargo credit union on Wednesday to escape flood waters from the Red River. Fargo VA will move into Freedom Community CU for three days--Wednesday, Thursday and Friday--Jana Thune, Fargo VA CEO, told News Now. On Thursday night and early Friday morning, the credit union moved some of it records from the basement of the VA Hospital where it is located, up to the second floor to avoid any potential flood waters, she said. The credit union was closed Friday, Monday and today to comply with the city’s request that all non-essential businesses be closed for three days. “We will likely open Wednesday and be there through Friday,” Thune said. “We’re open 10 a.m. to 2 p.m., Wednesday and Thursday, a full day on Friday--which is a big VA processing day. We’ll just sign on and work out of Freedom Community’s facility. It uses the same data processing facility that we use.” Although no flood waters have affected the VA Hospital--which sits right next to the Red River--as of Monday afternoon, the potential threat of flooding caused the credit union to relocate its operations, Thune said. None of the other 15 Fargo credit unions had plans to relocate as of Friday, according to Tony Richards, CEO of Mid-America Credit Union Association. Many places in the state, including the association, were closed Monday due to a heavy snowstorm. After reaching a historic high level of 40.82 feet over the weekend, the river dropped below 40 feet Sunday and could drop to 38 feet by the end of the week, meteorologists said (USA Today March 30). The National Credit Union Administration (NCUA) has activated its disaster relief policy to assist credit unions and their members affected by the severe weather and flooding in North Dakota and Minnesota. President Barack Obama has declared an emergency exists in the two states and has ordered federal aid to supplement state and local response efforts. Under its disaster assistance policy, NCUA will, where necessary:
* Encourage credit unions to make loans with special terms and reduced documentation to affected members; * Reschedule routine examinations of affected credit unions if necessary; * Guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund; and * Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
NCUA works with individual state league organizations and state regulators to ensure all federally insured credit unions are aware of NCUA’s available assistance. NCUA Region IV examiners are in close contact with affected credit unions to offer advice and assistance. During disaster conditions, NCUA personnel operate under three priorities:
* Determine the safety of credit union staff and operational condition of credit unions; * Provide needed material and technical assistance to affected credit unions; and * Return credit unions to normal operations as quickly as possible.

N.J. group endorses municipal deposits bill

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TRENTON, N.J. (3/31/09)--The New Jersey State League of Municipalities voted to endorse a proposed municipal deposits bill amendment last week and include it among its legislative priorities. The measure would allow New Jersey credit unions to accept municipal deposits. It would allow credit unions in the state to become eligible depositories for public entities such as county and municipal governments and school boards (News Now Nov. 20). Representing the state’s 566 municipalities, the League of Municipalities is highly regarded by the legislative and executive branches of state government, said the New Jersey Credit Union League. The endorsement lends weight to the legislation’s credibility and is considered almost crucial to favorable action on legislative matters relating to local governments, the league added (The Weekly Exchange March 23). In addition, three legislators have indicated their intent to sign on as prime cosponsors of the bills in their respective houses: State Sen. Robert Singer (R-30), State Rep. John Wisniewski (D-19) and Assembly Deputy Speaker Uprenda Chivukula (D-17). Singer is on the Senate Commerce Committee where the bill will be considered before being reported for a vote by the full Senate. He is also a Republican, which gives the legislation bipartisan sponsorship in the upper house, the league said. Wisniewski is a member of the Assembly Financial Institutions and Insurance Committee where the bill will be considered before being reported for a floor vote. With Assembly Deputy Speaker Chivukula’s co-sponsorship, the measure has leadership support in both houses of the legislature.

CU System briefs (03/30/2009)

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* ST. LOUIS (3/31/09)--The Missouri Credit Union Association (MCUA) has canceled its 2009 Managing in the Middle Conference, which was to be held at Lake of the Ozarks April 21-23. MCUA made the announcement in its newsletter, The Missouri Difference March 27) … * RALEIGH, N.C. (3/31/09)--More than 25 North Carolina credit union professionals from the Tarheel, Northeast and Southeast chapters trekked to Raleigh last week to discuss issues facing credit unions with their state legislators. They visited 41 legislative offices and discussed the health of credit unions, safety and soundness of members' accounts, and steps credit unions are taking to secure members in their homes. The North Carolina Credit Union League said this message was well-received by all legislators and was a bright spot considering the economy. State Senate Majority Leader Tony Rand, third from left, heard the positive message from credit unions during one visit. (Photo provided by the North Carolina Credit Union League) … * HARRISBURG, Pa. (3/31/09)--Maria LaVelle, CEO of Westmoreland Community FCU, Greensburg, Pa., has been elected as board director for District 4 for the Pennsylvania Credit Union Association (PCUA), announced PCUA Board Chair Diana Roberts (Life is a Highway March 30). LaVelle has been CEO of the credit union since 2001. She serves on the Pennsylvania Credit Union Foundation board and is vice president of the Greensburg Chapter of Credit Unions. She began her credit union career in 1996 at Allegent Community FCU. LaVelle succeeds retiring director Lanny Horn. Her term will begin in May at the conclusion of PCUA's Annual Convention … * RALEIGH, N.C. (3/31/09)--State Employees' CU (SECU) has received the Employer Support of the Guard and Reserve's (ESGR) State Chairman's Above and Beyond Award. The award is presented to employers who exceed legal requirements in providing support to service members in the Guard and Reserve. The credit union was nominated by lst Lt. Benjamin Liebermann, an SECU employee currently deployed with the National Guard. From left are: Mark Twisdale, SECU senior vice president of human resources; Kelly Liebermann, wife of Lt. Leibermann; Lori Waters, SECU Network Operations manager; and Jamie Applequist, SECU senior vice president in Jacksonville and master sergeant in the Air Force Reserves. (Photo provided by State Employees' CU)… * DES MOINES, Iowa (3/31/09)--Michael Rowan Knutson, 42, of Mason City, Iowa, a suspect in a July 14, 2007, robbery of the Mercy-City-Lehigh Family CU in Mason City, was sentenced to two consecutive life imprisonment terms for armed robbery at another financial institution. The robbery for which Knutson was convicted occurred May 16, 2007, at First Bank, West Des Moines. He and another suspect, James Stenger, who was convicted in a separate trial, brandished weapons in a takeover style robbery at the bank. Evidence at the trial included evidence from other robberies, including the credit union heist. The sentencing was mandatory under the federal "three strikes" law because Knutson had at least two prior crimes of violence (US Fed News March 28) … * HARRISBURG, Pa. (3/31/09)--Madeline Judge, widow of former Pennsylvania Credit Union Association (PCUA) President/CEO Mike Judge, died Saturday at the age of 80. She was well-known throughout Pennsylvania and the nation because she often accompanied her husband to credit union events, said PCUA. Services will be Wednesday at 10 a.m. at St. Margaret Mary Alacoque Church, Harrisburg (Life is a Highway March 30) …