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CU System briefs (03/31/2010)

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* ST. LOUIS, Mo. (4/1/10)--The Missouri Senate has confirmed Gov. Jay Nixon's appointment for the attorney member of the Missouri Credit Union Commission. Stephanie Grise, a senior associate with Armstrong Teasdale LLP, was confirmed on March 25, according to the Missouri Credit Union Association. She will serve a five-year term that ends Jan. 1, 2015. The commission is comprised of seven members, each appointed by the governor. Its mission is to spread regulations related to credit unions; hear appeals of orders or decisions pertaining to the chartering, relocation, branching or membership of credit unions; and consult with and advise the director of the Division of Credit Unions (The Missouri difference March 31) ... * PHOENIX (4/1/10)--Desert Schools FCU, based in Phoenix, is offering a $10,000 reward for information leading to the arrest and conviction of the "Mummy Bandit." A man wrapped in bandages and walking on crutches entered a branch located inside a Wal-Mart in Phoenix on Jan. 30. He approached the teller counter, drew a semi-automatic pistol and demanded the tellers open the drawers. He then vaulted the counter, removed cash from the drawers and filled a plastic grocery bag. He fled on foot without the crutches. He had yellow or jaundiced eyes and white bandages on his head, face, hands and right foot ( March 30) ... * FARMERS BRANCH , Texas (4/1/10)--Curtis Parkerson, former board chair of PrimeWay FCU, Houston, died Feb. 24, the Texas Credit Union League reported (LoneStar Leaguer March 31). Parkerson joined the Supervisory Committee of PrimeWay FCU in 1984 and served 25 years with the credit union. In 1996 he was named board chairman, a position he held for 11 years. Declining another term as chairman, he served in the director position for the last two years of his credit union service. He was honored with the 2009 Golden Service Award by the National Association of Credit Union Supervisory Auditing Committees ...

Social-networking voters pick CUs Gen Y spokesman

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NORTH CHARLESTON, S.C. (4/1/10)--South Carolina FCU's new Young & Free South Carolina spokesperson won the job by earning votes from the community at large in a social networking campaign, according to the North Charleston-based credit union. Darryl LePlante, 22, of Goose Creek won the credit union's dream job search and became the second Young & Free South Carolina spokesperson. Young & Free South Carolina is a Web-based effort to address the unique financial needs of young adults ages 18 to 25. At, the credit union will host financial tips and money management strategies relevant to Generation Y. LePlante, a 2009 graduate of Winthrop University with a bachelor of science degree in theatre performance and a minor in business, was informed that he won the position during a surprise luncheon with family and friends. Other finalists were Alexa Chloe Villavicencio, 22, of Goose Creek, and Danielle Delain of Cayce. All three finalists conducted broad social networking campaigns to gain public votes at LePlante had the most votes and won the job, which includes a salary, Toyota Prius, MacBook Pro, HD Video camera and an iPhone.

Great Lakes CU requires fin ed to open young adult account

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NORTH CHICAGO, Ill. (4/1/10)--Great Lakes CU (GLCU), based in North Chicago, has introduced a series of customized accounts for young adults, ages 16-23, that requires completing financial education modules in order to qualify for opening the accounts. The On Your Way accounts currently include a free On Your Way checking account with debit card, On Your Way student Visa, and computer loans, with student loans offered soon. Accountholders have access to online and mobile banking, and exclusive access to the On Your Way website, which is loaded with financial advice and articles, as well as opportunities to earn rewards for big-ticket items for visiting the website, contributing website content and using GLCU's products and services. To qualify to open both the checking account and student Visa, young adults must successfully complete online educational modules on "checking account management" and "credit matters." The self-guided modules include a quiz to measure understanding of the content. "Young adults need financial literacy and, at the same time, have a strong preference for personal contact," said Vikki Kaiser, president/CEO of the $543 million asset credit union. "Many young people will avoid a financial purchase until they meet with a professional," Kaiser said. "Purchasing financial products via the Internet or telephone rates low with these consumers, but they use these media to get educated on products and services that may be appropriate for them. GLCU has taken this into account by providing young adults with high-touch interactions alongside online resources."

Ireland finance minister extends CUs long-term lending

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DUBLIN (4/1/10)--Ireland's Minister of Finance Brian Lenihan announced that the government will extend longer-term limits for credit unions, which would allow credit unions to reschedule loans to help members with financial difficulties. Currently credit unions in Ireland are restricted from having more than 20% of their loan portfolio outstanding for more than five years and only 10% of their portfolios may be for more than 10 years. Under the new measures, the limits would increase to 30% and 15%, respectively (Irish Independent and Evening Herald March 31). Also, the Registrar of Credit Unions would have the authority to impose requirements on credit unions related to lending practices and require credit unions to have procedures in place to monitor compliance with the lending act. The Irish League of Credit Unions President Mark Bailey said the league welcomed the changes, which will allow credit unions to ease the position of members while safeguarding credit unions' financial position "accompanied by honest, prudent and transparent accounting practices" (Evening Herald).

N.Y. senator adds voice to municipal deposits

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BROOKLYN, N.Y. (4/1/10)--A New York state senator who introduced a municipal deposits choice bill last year reiterated his support Wednesday for municipal deposit choice, adding to the swell of support the issue has been receiving. New York Sen. Kevin Parker sent an opinion editorial to News Now outlining the reasons why the municipal deposit bill he is co-sponsoring with Assemblyman Rep. Carl Heastie would be good news for taxpayers and local government. In his letter he cites a recent study prepared by the Credit Union Association of New York (CUANY), which shows that the savings to taxpayers could reach $18 million to $24 million every year. "Benefits like this are only the beginning," he wrote. "Because they are locally owned financial cooperatives, credit unions tend to keep their deposits local and pay local property taxes to the very same local government entities that would benefit from municipal deposit choice." The senator represents many underserved areas that have a large credit union presence in those neighborhoods, his office told News Now. The Parker-Heastie bill is the same as the language in the state's proposed budget bill. The state Senate last week endorsed the language in its budget resolution. CUANY supports municipal deposit choice, which would allow public entities to make deposits in local credit unions and community banks. It is also pursuing municipal deposits through the state budget process, in which talks are ongoing, said Amy Kramer, vice president of governmental affairs for the association. The state legislature, which is on a recess, will return to Albany on April 7. The issue has seen a growing groundswell of support with resolutions from various municipality organizations such as firemen and councils. The latest resolution of support came from the New York City Council and New York Mayor Michael Bloomberg last week (News Now March 30).

WOCCU to Basel Committee Consider CU difference

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BASEL, Switzerland (4/1/10)--Credit unions worldwide have weathered the global financial crisis better than their larger, for-profit counterparts and, in many countries, have helped stabilize and counter-balance inherent weaknesses in the financial services systems.
Click to view larger image David Phillips, left, president/CEO of Credit Union Central of Canada, and Grzegorz Bierecki, president/CEO of Poland's National Association of Cooperative Savings and Credit Unions, took the credit union message to the Basel Committee on Banking Supervision in Switzerland this week.
Those were some of the key messages a World Council of Credit Unions (WOCCU) delegation raised on Monday during three meetings with members of the Basel Committee on Banking Supervision and the Financial Stability Board to address pending revisions to the Basel II capital accord. "Over the past decade, the Basel Committee's capital rules affecting banks and credit unions have been adopted by financial regulators in more than 100 countries," said Dave Grace, WOCCU vice president of association services. who led the multi-national delegation. "It is imperative that the Basel Committee's guidance not only does no harm to financial cooperatives, but that it actively promotes the diversity and benefit those cooperatives bring to the marketplace." he said. The delegation also included WOCCU Second Vice-Chair Grzegorz Bierecki, president/CEO of Poland's National Association of Cooperative Savings & Credit Unions, and David Phillips, president/CEO of Credit Union Central of Canada.
Click to view larger image It's imperative the Basel Committee's guidance recognizes the diversity and benefit that financial cooperatives bring to the marketplace, said Dave Grace, World Council of Credit Unions vice president of association services. (Photos provided by the World Council of Credit Unions)
The group met with Basel Committee and Financial Stability Board officials to discuss capital and liquidity standards and other issues that affect credit unions. In the interest of promoting proper oversight of financial cooperatives, the delegation raised specific issues regarding credit unions' capital structure and governance policies. It also raised credit union reactions to the financial crisis and learned that Basel officials were not aware of credit unions' efforts. WOCCU has advocated for the past several years that the Basel Committee recognize the credit union difference. The current consultative documents, adapted with guidance from the Group of 20 (G-20) nations in response to the global economic meltdown, recognize for the first time the difference between large for-profit financial corporations and non-joint stock companies, which includes mutuals, cooperatives and credit unions. Input from credit unions on the issues raised during the delegation's meeting is critical to ensure that those standards appear in the final guidelines, delegation officials said. To follow up the meetings, WOCCU will host a webinar on April 7 for WOCCU member organizations and regulators with participation from the Basel Committee's staff. Comments from both the visit and webinar will be incorporated into a formal letter WOCCU will submit in response to the Basel Committee's consultative documents on behalf of the global credit union movement. The deadline to submit comments in response to the current consultative documents is April 16. "WOCCU continues to be the voice of the international credit union community," said Bierecki, noting that what credit unions have to say "is being heard by people in positions to make a difference."

Pa. CUs 2009 growth exceeds national stats

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HARRISBURG, Pa. (4/1/10)--Pennsylvania credit unions showed an increase in total assets, loans, savings and members at year-end 2009, exceeding the national rate in all four categories for the same time period, according to the Pennsylvania Credit Union Association (PCUA). The Pennsylvania Profile Fourth Quarter 2009 indicated that total asset growth was 13.7%, ahead of the 8.9% national rate. Loan growth was 9.4%, roughly eight times the national 1.2% increase. Savings rose by 15%, ahead of the 10.3% national rate. Membership at Pennsylvania credit unions grew at 2.3%, compared with 1.4% nationwide (Life is a Highway March 31). Pennsylvania credit unions also recorded 12% growth in credit cards--nearly double the 6.4% national rate. Used-auto loans grew 10.8%, compared with 3.9% nationally, first mortgages reached 23.9% compared with 4.3% nationally, and member business loans grew 18.7%, almost double the 9.9% national rate, PCUA said. The average net worth-to-asset ratio for credit unions dropped to 10.6% in 2009 from 11.4% in 2008. As of Dec. 31, there were 557 credit unions in Pennsylvania with combined assets of $31.9 billion and more than 3.5 million members.

NCUF opens 2011 Wegner Award nominations

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WASHINGTON (4/1/10)--Credit union supporters can nominate individuals and organizations for the 23rd Annual Herb Wegner Memorial Awards to be presented by the National Credit Union Foundation (NCUF). Nominations are due by June 18 for the following 2011 awards:
* The Individual Achievement Award, which honors an unsung hero for innovative concepts or accomplishments that have significantly impacted the national or international credit union movements within the past 10 years or have a significant impact now. Nominations must cite a specific subject of achievement. Examples include financial literacy, service to the underserved, alternatives to predatory lending and new products; * The Outstanding Organization/Program Award, which honors an organization or program for innovative concepts, products or services that have significantly impacted national or international credit union movements; and * The Lifetime Achievement Award, which honors an individual who has dedicated his or her life to promoting the credit union philosophy of “People Helping People.” The individual must have created innovative concepts and provided leadership that has significantly impacted the national or international credit union movements.
Nominations can come from individuals or organizations. Forms are available on the NCUF website. Five letters of recommendation that cite examples of a nominee’s achievements relevant to award criteria are required. Winners will be honored at the awards dinner in conjunction with the Credit Union National Association’s 2011 Governmental Affairs Conference in Washington, D.C.

CUs find ways to cut health care plan costs

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MADISON, Wis. (4/1/10)--Despite tight budgets from the economy and the escalating costs of providing health care coverage, credit unions continue offering this prized employee benefit. Like past years, 65% of credit unions provide health insurance to their employees--and nearly all credit unions with $50 million or more in assets offer it, according to the Credit Union National Association's (CUNA) recently released 2010-2011 Credit Union Staff Benefits Report.
Click to view larger image Click for larger view
The full impact of health care reform on health care coverage as an employer-provided benefit is not yet clear. However, employers currently providing this benefit will continue to face challenges fairly soon, with percentage cost increases projected to return to double-digit levels in 2010 and 2011. Half of credit unions saw 2010 health insurance costs increase at least 10% over 2009 costs. Credit unions trying to reign in costs are most likely to increase employee cost-sharing for health care coverage, increase/enhance employee communications, study health care data for cost of use patterns, or add/increase use of their wellness program. "It’s encouraging that credit unions are finding ways to reduce costs and persist in providing health care insurance as an employee benefit," said Beth Soltis, senior research analyst for CUNA. "The employee benefits package is an essential recruitment and retention tool, and health care insurance is arguably its most crucial component," she said. "It is vital for credit unions to understand the impact of health care reform and monitor cost trends in order to maintain a cost-effective health care plan and preserve its place in the employee benefits package." The survey provides nationwide data on benefit trends, costs, and program structures for health care coverage, wellness programs, retirement/savings plans, life and disability insurance, work/life and ancillary benefits, and paid leave. The report is available in print or Adobe PDF format. For more information or to order the print or PDF versions of CUNA's 2010-2011 CU Staff Benefits Report, use the links.

Secret good-doer is a CU

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BIRMINGHAM, Ala. (4/1/10)--For the past six weeks, a group of “do-gooders” have been treating Birmingham, Ala.-area residents to random acts of kindness--paying for their groceries, and meals, and offering discounts on gasoline for their cars.
Click to view larger image Legacy Community CU, Birmingham, Ala. anonymously performed random acts of kindness to individuals in its community during a six-week marketing campaign. Legacy recently revealed itself as the “do gooder” during a promotion at a local gas station. The campaign and reveal were well-received, Legacy said. (Photo provided by Legacy Community CU)
Last week, the group revealed itself--as Legacy Community FCU. The reveal took place on the credit union’s 55th anniversary. “There was no catch,” said Joseph McGee, Legacy CEO. “We just wanted to do something for the community.” Legacy anonymously performed acts of kindness for individuals in the community as a part of its marketing campaign, Do Something Good Today. The campaign was so secretive Legacy didn’t even tell all of its employees. Keeping it secret for so long “was an accomplishment in itself,” McGee told News Now. Legacy worked with a local marketing agency, Think Positive, to come up with a new tagline for the credit union--“Do Something Good With Your Money.” The tagline ended up blossoming into a bigger concept--to perform acts of kindness within the community with the hopes of inspiring others to do the same. “Someone has to plant the seed,” McGee said. Legacy revealed itself on March 25 at a local gas station, where the $317 million asset credit union offered gas to individuals for $1.99 a gallon for two hours. “Over the past six weeks, people from have been all over the Birmingham area doing good deeds and random acts of kindness, all to inspire our community--everything from filling up gas tanks, to paying for meals, groceries or haircuts, to buying toys for kids who recently lost everything in a fire at their home,” McGee said. “Legacy created as a way to give back to the community that has given so much to us since our founding back in 1955.” The reveal was received favorably. Legacy worried that some might think it was a catch--but everyone loved it, McGee said. Some of the individuals who received discounted gas were members, and judging by activity at the credit union’s branches that day--some became members, he added. The campaign was so successful that it has been extended into the Legacy For Good Foundation, which will continue the random acts of kindness. Legacy also will launch the Legacy Initiative for Financial Endowment (LIFE) to offer college scholarships, McGee said. Social media proved to be a huge part of the campaign’s success. Do Something Good Today was advertised on billboards, but much of its buzz was generated by those who had received acts of kindness and wrote about it on their social media sites. Legacy also set up a Facebook page where members became fans of the credit union and its campaign, said Michelle Willis, vice president of marketing and business development. When conducting this type of campaign, make a budget and stick to it, Willis said. “It was tough to cut off the gas promotion,” she said. “It’s also tough to go into a restaurant and pay for 10 meals when there are 20 people waiting in line,” she said. Willis noted that AltaOne CU, Ridgecrest, Calif., conducted a similar campaign that ran for four weeks. Legacy accepts ideas to help others from those who visit and nominations for individuals that need help. The website also features video diaries to track the good deeds, and their recipients’ reactions. “With the economy, there are so many people out there who are hurting,” Willis said.

Connecticut lt. governor addresses CUs student reality fair

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MERIDEN, Conn. (4/1/10)--Connecticut Gov. Michael Fedele addressed more than 400 high school students during a financial reality fair sponsored by 17 Connecticut credit unions and 105 volunteers from credit unions and local businesses statewide.
Click to view larger image Connecticut Lt. Gov. Michael Fedele spoke at a financial reality fair hosted by Connecticut credit unions and local businesses. From left are: Kelly Fuhlbrigge, Credit Union League of Connecticut vice president of government relations; league President/CEO Tony Emerson and Fedele.
Click to view larger image More than 400 students participated in a financial reality fair at Central Connecticut State University, which was sponsored by Connecticut credit unions. (Photo provided by the Credit Union League of Connecticut)
“What you are going through today will help you face the challenges that await you as you enter your adult life,” Fedele said, who was introduced by Credit Union League of Connecticut President/CEO Tony Emerson. During the fair, held at Central Connecticut State University, credit unions and businesses helped students make real-life choices in areas such as transportation, housing, food, entertainment, travel and other extras. Students in personal finance, economics, marketing and other business classes prepared for the fair by studying budgeting, the league said. Students attending received annual starting salary and budget based on an occupation that interests them. They visited booths to make life choices, and completed budget worksheet and met with a financial counselor to see if their choices were within the budget. Financial reality fairs enhance financial literacy among youth in preparation for life’s challenges, financial or otherwise.

CU System briefs (03/30/2010)

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* PENSACOLA, Fla. (3/31/10)--Pensacola police and the Santa Rosa Sheriff's Department are looking for the former boyfriend of a woman who was carjacked at a credit union's night deposit early Sunday morning. Sarah Magnes, 21, was one of two pizza parlor employees making a night deposit at Pen Air FCU in Tiger Point. The first car pulled away. After Magnes deposited the funds, a masked man put a gun to her head, demanded money and, when she said she had just deposited the funds, he stole her car. Gulf Breeze police spotted the stolen car and gave chase, joined by Pensacola police. The suspect, Tirek Robinson, 22, allegedly jumped from the stolen vehicle just before it went into the bayou. He was still at large Tuesday (Northwest Florida Daily News March 29 and March 30) ... * HARRISBURG, Pa. (3/31/10)--Harold F. Brown, former CEO of what is now Tri State Rail FCU, Erie, Pa., died Saturday. He was 87. Brown was employed by Standard Stoker Co., and was treasurer of the company's credit union before moving to New York Central FCU, which became Penn Central FCU, then Conrail, then Tri State Rail FCU. Brown was CEO of the credit union for more than 65 years. He was active in the credit union movement, holding positions of treasurer, president and national director of the Pennsylvania Credit Union League before it became Pennsylvania Credit Union Association (PCUA). According to PCUA, he served on the association's board for 23 years and was board chairman from 1972 to 1974 (Life is a Highway March 30). He was pioneer of five credit unions and active in the Erie chapter. In 1981, he was named the league's Credit Union Professional of the Year. He also was president and chairman of PACUL Services from 1975 to 1980. Funeral services are at 10 a.m. today at Christ United Methodist Church, Erie (Erie Times-News March 28) ...

Minn. public funds measure still in legislative process

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ST. PAUL, Minn. (3/31/10)--A Minnesota bill that would have given credit unions and community banks a preference to receive state deposits has been withdrawn by its sponsor, Rep. Tim Mahoney (DFL-St. Paul). However, the overall issue is still alive in several forms, according to the Minnesota Credit Union Network (MnCUN). Mahoney's bill, which was supported by MnCUN, would have given local credit unions and community banks a price advantage in bidding to win deposits from state agencies and called for a study to determine the benefits of directing public deposits to them (News Now March 23). “As for public deposits--the preference legislation did not meet the legislative deadlines this year, and that part of the bill has died," said Mara Humphrey, MnCUN vice president-governmental affairs. "However the study portion of the bill is still moving forward through the legislative process. "This portion of the bill would investigate how to split up the state’s large accounts into smaller ones that community financial institutions could hold, and it studies the economic benefits to local units of government for using community financial institutions more," Humphrey said. Also still moving is a bill that would establish a pilot program for Minnesota state colleges and universities to transfer deposits from the state treasury to a “community financial institution” located within 25 miles of the campus. The pilot program would include eight institutions, she said. MnCUN "supports efforts to give credit unions additional opportunities to hold public funds. We believe that the legislature acknowledges the importance and potential benefits of keeping funds in local financial institutions,” Humphrey noted.

Second TJX hacker sentenced to seven years

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BOSTON (3/31/10)--A second Miami, Fla., man has been sentenced for his role in the TJX Cos., BJ's Wholesale Club and Dave & Buster's restaurant data breaches. Christopher Scott, 27, was sentenced Monday to seven years in prison plus three years of supervised release after he pleaded guilty to conspiracy, unauthorized access to computer systems, access device fraud and identity theft (Associated Press via The New York Times March 30). Scott was described as a "lieutenant" of Albert Gonzalez, the key figure in a number of huge data breaches that affected thousands of credit union members and credit unions, as well as other companies and financial institutions. Scott helped Gonzalez hack into wireless data networks of several national retailers (The Boston Globe March 30). TJX Cos., the Framingham, Mass., owner of retail stores such as T.J. Maxx and Marshalls, said it lost $171.5 million in the breaches, including the cost of settling litigation after the breach. BJ's lost between $11 million and $13 million. Gonzalez was sentenced Thursday and Friday to more than 20 years in prison for heading up the breaches. It is one of the longest sentences ever ruled for a hacking or ID theft case, said The Globe. Several other conspirators who played minor roles in the data breaches also were recently sentenced. They are:
* Jeremy Jethro, 29, sentenced earlier this month to three years probation and six months of home confinement for supplying a code that helped Gonzalez break into TJX and other companies. * Humza Zaman, 33, sentenced earlier this month to 46 months in prison for helping Gonzalez launder about $700,000. * Stephen Watt, 26, a former programmer with Morgan Stanley, sentenced in December, to two years in prison for tweaking hacking software for Gonzalez.

WOCCU backs introducing stevia crop in Kenya

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KISUMU, Kenya (3/31/10)--Soft drinks' popularity is creating an economic crisis for the world's tea leaf growers, with many seeing a significant drop in demand for their crop. Thanks to help from World Council of Credit Unions (WOCCU), Kenyan farmers in Kisumu, northwest of Nairobi, are now growing stevia, a natural sweetener that could one day overtake its artificial counterparts.
Click to view larger image Brian Branch, left, executive vice president and chief operating officer of the World Council of Credit Unions, examines the stevia crop of Kenyan farmer Samwel Kirui and his wife while the plants dry in the sun before being sold to processors.
Stevia, a member of the sunflower family, originated in South America and grows as far north as Arizona, New Mexico and Texas. Sometimes known as "sweetleaf" or "sugarleaf," stevia's leaves have a natural sweetness 30 to 45 times that of regular sugar. It is widely used as a sweetener in Japan and as a food additive or dietary supplement in other countries, said WOCCU. Medical testing has shown that stevia can be an effective sugar substitute with a positive impact on obesity and high blood pressure, said WOCCU. It also has a negligible effect on blood glucose levels, making it attractive as a sweetener for people on low-carbohydrate diets. The U.S. Food and Drug Administration approved stevia extract as a sugar substitute in December 2008. With the help of funding from the U.S. Department of Agriculture, WOCCU has introduced stevia varieties grown on small plots by poor rural farmers who are members of Kenya's Ndege Chai Savings and Credit Co-operative (SACCO), or credit union. After two years of testing, Kisumu's stevia growers are bringing their crop to market through a business alliance with Finlays, a Scottish company with extensive tea growing operations in East Africa and Sri Lanka. "The majority of Kenya's poor still live in rural areas, and many of them are small landowners and subsistence farmers looking for crops that will provide additional household income. Stevia is a crop that has the potential for strong demand," said Brian Branch, WOCCU executive vice president and chief operating officer, who has worked with Kenya's stevia farmers. "Poor farmers with the least amount of training can produce stevia sustainably and profitably on their small landholdings. The challenge will be achieving the scale of production necessary to match stevia's market potential," Branch said.
Click to view larger image The stevia plant is widely used as a sweetener and food additive or dietary supplement. (Photos provided by the World Council of Credit Unions)
Most Kenyan farmers start their stevia crop on a half-acre. The stevia, which grows to be three feet tall, requires two-and-one-half months of cultivation. The leaves are stripped from the plant, dried, and then sold to be ground into a fine white powder that is the basis of the sweetener. The very soft drink companies that are competing with tea leaf production are the world's largest users of sugar and sweeteners, offering tremendous potential for stevia growers. But to tap that market requires significantly more stevia than the farmers can currently grow. Ndege Chai currently finances operations for 1,500 members growing stevia and anticipates that number could grow to 2,000 by the end of 2010. Crop demand projections suggest that 25,000 area farmers could be growing stevia in five years, a capacity far beyond the financial capabilities of Ndege Chai and other small SACCOs. Business alliances with companies like Finlays could provide the capability necessary to raise Kisumu's stevia production to the levels needed to attract the attention of major soft drink conglomerates, according to Branch. "As a substitute for the tea crop, which is declining in popularity, stevia helps poor Kenyan farmers bridge their income gaps," Branch added. "The potential of stevia to help these same farmers raise their earning potential appears to be unmatched by any other crop."

Virginia CUs hit 1 million for kids hospitals

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LYNCHBURG, Va. (3/31/10)--Virginia credit unions have donated their first $1 million to Children’s Miracle Network, a non-profit organization that raises funds for 170 children’s hospitals, including seven in Virginia.
Click to view larger image Virginia credit unions raised more than $1 million to benefit Children’s Miracle Network hospitals. Pictured from left are: Erin Hildreth, Children’s Miracle Network; Virginia Credit Union League staffers Jeanne Sullivan, director of lending and insurance products; Lewis Wood, director of public relations and communications; and Mary Amyx, executive assistant; Patty Jasper-Zellner, Children’s National Medical Center, Washington, D.C.; Brenda Kuntz, Children’s Hospital of the King’s Daughters, Norfolk; Amy Wicks-Horn, University of Virginia Children’s Hospital, Charlottesville; and Rachel Bruni, representing network hospitals serving greater Richmond. (Photo provided by the Virginia Credit Union League)
The Virginia Credit Union League named Children’s Miracle Network its “charity of choice” in 2003, encouraging its member credit unions to raise funds and serve as volunteers in support of the charity. The $1 million was raised during the seven-year partnership. “This $1 million milestone represents a tremendous effort on the part of our credit unions,” said league President Rick Pillow. “Each year, the league’s Community Involvement Committee and our member credit unions hold dozens of fundraisers in support of Children’s Miracle Network, including golf tournaments, auctions, and branch and lobby promotions. It’s those efforts and the support of credit unions’ staff and members that made this possible.” Virginia credit unions also sponsor the Credit Union Cherry Blossom Run in Washington, D.C. Credit unions use their sponsorship to raise funds for Children’s Miracle Network, with more than $1 million donated nationally in 2009 alone. Credit unions have raised more than $3.6 million since assuming the title sponsorship of the race in 2001. Virginia credit unions also donated more than $880,000 to local nonprofits last year, said The Richmond Times-Dispatch (March 28).

Trial date set in Corporate America-U.S. Central case

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BIRMINGHAM, Ala. (3/31/10)--A U.S. District Court judge in Alabama Thursday set the trial date--Dec. 6--in Corporate America CU's lawsuit against individual director defendants of U.S. Central FCU. U.S. District Judge Inge Johnson set the jury trial for 9 a.m. ET in Birmingham, Ala. A pretrial conference was scheduled for Nov. 29, according to the order filed by Johnson. In the lawsuit, Corporate America alleges that U.S. Central violated the Securities and Exchange Act of 1934 and state laws by soliciting Paid-in-Capital (PIC II) funds from member credit unions. The corporate claims U.S. Central concealed the extent of its investment losses. Defendants' answer denying the claims was filed with the court on Friday.

Oregon governor signs public funds bill

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BEAVERTON, Ore. (3/31/10)--Oregon Gov. Ted Kulongoski Monday signed a bill that lifts the $250,000 cap on the amount of public fund deposits Oregon credit unions can receive from municipalities. The bill will be effective Jan. 1, 2013. The credit union movement of Oregon applauds Kulongoski for “acknowledging the value of extending an additional choice for public entities to seek a fair and competitive rate of return on the people’s money,” said the Credit Union Association of Oregon (CUAO). “This issue has been worked on since 1981, and is a testament to the movement’s resolve to advance the credit union charter, and to continue seeking new avenues to serve their local communities,” said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations. About 4,000 public agencies in Oregon receive public funds and use financial institutions to house the funds.

MCUL OFIR meet on loan modification issues

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PLYMOUTH, Mich. (3/31/10)--Michigan Credit Union League (MCUL) representatives and regulatory affairs staff met with state Office of Financial and Insurance Regulation (OFIR) Commissioner Roger Little and Assistant Director John Kolhoff on March 23 to discuss trends in Michigan’s credit union industry.
Michigan Credit Union League staff met with state Office of Financial and Insurance Regulation (OFIR) Commissioner Roger Little (left) and Assistant Director John Kohloff at the league’s headquarters in Lansing, Mich. (Photo provided by the Michigan Credit Union League)
The first bi-annual meeting of the year, held in Lansing, Mich., covered topics including loan modifications, foreclosures and member business lending. OFIR said its watch list has seen an uptick because net worth across Michigan credit unions continues to decline as delinquencies and charge-offs increase, according to the league (Michigan Monitor March 30). OFIR said it is concerned about interest-rate risk, and that loan modifications and troubled debt restructurings are not being reported according to generally accepted accounting principle requirements. To help credit unions understand these issues, Kolhoff will participate in a “Troubled Debt Restructuring: Panel Discussion” session at the league’s annual convention May 21. Little encouraged credit union CEOs to contact OFIR supervisory examiners and his office to discuss unresolved differences concerning exam issues and examiner conduct. MCUL meets with OFIR and National Credit Union Administration (NCUA) staff twice per year. A follow-up summary of the meeting will be sent to all CEOs and posted to the league’s website after an April 20 meeting with NCUA Supervisory examiners Andrew Healey and Dennis DeMilner.

Wheres my Census form CUs can help

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WASHINGTON (3/31/10)--The 2010 Census questionnaires are out and while many members may have already mailed their questionnaires back, the Census Bureau is asking credit unions' assistance in encouraging stragglers to send in their forms and helping others get a questionnaire. One credit union is going the extra distance to help make sure people are counted.
Battle Creek, Mich.-based United Educational CU's bilingual census assistant, Elizabeth Tutewiler, will assist individuals in answering the Census Bureau's questionnaire to help ensure everyone is counted. (Photo provided by the Michigan Credit Union League)
United Educational CU, a $97 million asset credit union based in Battle Creek, Mich., is providing a bilingual Spanish and English staff member, Elizabeth Tutewiler, to serve as a census representative. She will provide assistance to individuals who may have trouble reading or understanding the questionnaire, according to the Michigan Credit Union League (Michigan Monitor March 29). United Educational CU, which has a diverse membership and many Latino/Hispanic members, has spent several months stressing the importance of the census. "Each year, the federal government allocates more than $400 billion to communities for road and community improvements, education, public health services and more," said President/CEO Fran Godfrey. "These funds support our communities and bring jobs as well, which are vitally important. Michigan will likely realized a population decline, due to the tough economy, so we are putting our best efforts toward getting everyone counted," she told the league. If members haven't received a questionnaire form--or if they've misplaced it--credit unions can let them know they can still be counted by going to a Be Counted site or a Questionnaire Assistance Center to pick up another form in their preferred language. Until April 19, members can go online (use the link) to find the nearest Questionnaire Assistance Center. Once on the site, they should click the second arrow to locate the "Find a Questionnaire Assistance Center." Then they can type in their ZIP code to locate the nearest center. After April 12, credit unions can inform members they can order a replacement questionnaire through the Telephone Questionnaire Assistance line at 866-872-6868. The Telephone Questionnaire Assistance Line will be operational until July 20. In May, census workers will start door-to-door canvassing to contact people who haven't sent in their questionnaires by then. Credit unions can help by warning their members that door-to-door canvassers may be in their neighborhood to help them answer questions. Credit unions also can educate members on what to expect from a census taker. The census workers will begin May 1 and continue through late summer to follow up on addresses with non-responses. The Credit Union National Association is a Census 2010 partner.

Latest CUs-in- the-media roundup

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MADISON, Wis. (3/30/10)--Consumers are getting all kinds of financial advice in the media and credit unions head the list as good deals. For example:
* AARP's Bulletin for March told consumers that Michigan credit unions' prize-linked Save to Win program turned Communicating Arts CU member Barbara Cornish of Detroit into a regular saver. Last year, eight Michigan credit unions pooled resources to award a $100,000 grand prize and smaller monthly cash prizes in a savings raffle, the article said. "Save to Win has been so successful, with 11,700 account holders putting away $8 million, that the program will continue this year," said AARP. Save to Win was the No. 6 suggestion in an article on "Eight Fun Ways to Save Money." Use the resource link. * Friday's issue of expounds on "Credit Union Credit Cards: The Bad, the Good and the Excellent." The article lists these upsides for credit union credit cards: excellent customer service, competitive rates, consumer-friendly terms. Downsides: stricter underwriting, lower credit limits and less robust rewards programs. The article mentions the Pew Charitable Trusts study's findings that credit unions have much lower advertised rates than banks. See resource link. * The latest article addressing the "move your money" campaign for consumers to send big banks a message by moving their accounts to a credit union or community bank appeared in Sunday's Chicago Tribune. The article mentions credit unions and directs readers to to find a new institution. * Readers of the St. Louis Post Dispatch may think they're in a time warp when they see the First Community CU's share draft rate of 4%, which will fall to 3% during April, said (March 28). The newspaper says bankers haven't taken "happy pills"; they're just staying competitive in a competitive banking market. * McGraw-Hill FCU, East Windsor, N.J., is among the institutions discussing the trend for homeowners to turn to home equity lines of credit (HELOCs), which have cheaper interest rates, to pay for home renovations, student loans and other loans (The Star Ledger via March 29). Shawn Gilfedder, president of the credit union, noted that consumers are using the tax advantages of HELOCs to buy cars or pay tuition, or for refinancing a small first mortgage. Use the resource link.

CUNAs Mad City Money a hit in Sacramento

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SACRAMENTO, Calif. (3/30/10)--The Credit Union National Association's (CUNA's) Mad City Money life simulation game was a big hit with high school students, parents, teachers and credit union professionals in Sacramento, Calif., last week.
Click to view larger image Students from Gonzales (Calif.) High School and Santa Catalina High School, Monterey, Calif., participate in the Mad City Money life simulation session during the California and Nevada Credit Union Leagues' FOCUS 2010 CU EduConference in Monterey March 20.. The event was conducted by the California and Nevada Youth Involvement Network. (Photo provided by the California and Nevada Credit Union Leagues)
A coalition of credit unions took the game to Gonzales High School and Santa Catalina High School, where young adults learned how to manage their money. The students had to learn what many adults have trouble learning: How to balance the demands of work, family and a tight budget. "Having a program like this, where they're actually hands-on doing a simulation, I think they are learning so much more than just listening to an adult lecturing them about it," Carrie Birkhofer of Bay FCU told About 25 volunteers from the the California and Nevada Youth Involvement Network and credit unions in those states helped put the program on, which was also covered by The Herald of Monterey County. Andy Anderson, manager of corporate relations and government affairs for Travis CU, told the newspaper that his credit union had offered the Mad City Money simulation game five times, and "the kids really get involved with it. And when it's over, we get letters and phone calls from their parents, thanking us for teaching their kids how to balance a budget. I think it's a great thing." The program occurred during the California and Nevada Credit Union Leagues' FOCUS 2010 CU EduConference in Monterey on March 20. The event was conducted by the California and Nevada Youth Involvement Network, said the California league.

Laptop theft hits 3.3M with student loans

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ST. PAUL, Minn. (3/30/10)--Personal data on about 3.3 million people with student loans were stolen from Educational Credit Management Corp. (ECMC) in St. Paul, Minn., a nonprofit guarantor of federal student loans, during the weekend of March 20-21. The information was on a portable media device. It was not a hacking incident--rather, it was a “simple, old fashioned theft,” said ECMC spokesman Paul Kelash (The Wall Street Journal March 29). Sixteen percent of credit unions offered Federal Family Education Loans, and 12% offered private student loans as of December 2008, according to the Credit Union National Association Department of Economics and Statistics. ECMC services and insures about $11 billion in student loans for the Department of Education. The theft could affect up to 5% of federal student loan borrowers, the newspaper said. The incident is the latest in a series of consumer financial data thefts in the past few years. More than 347 million records with sensitive consumer information have been compromised in the U.S. since 2005, according to statistics the newspaper cited by Privacy Rights Clearinghouse. In 2006, about 1.7 million computer records held by Texas Guaranteed Student Loan Corp. were breached, and a U.S. Department of Education website bug compromised data on 21,000 individuals.

CU System briefs (03/29/2010)

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* RANCHO CUCAMONGA, Calif. (3/30/10)--The Richard Myles Johnson (RMJ) Foundation, the state credit union foundation in California and Nevada, has given five community service grants totaling $26,500 to three California credit unions and two community organizations for financial literacy efforts. Recipients are: Antelope Valley FCU, $3,500 for a financial education program for junior and high school students; Mid-Cities FCU, $2,500 for its new youth financial education program; Redwood CU, $500 to continue its Financial First program; and California Counsel on Economic Education and ClearPoint Credit Counseling Solutions, $10,000 each, for their youth financial literacy programs ... * ST. PAUL, Minn. (3/30/10)--Minnesota Credit Union Network (MnCUN) Vice President-Communications Kristina Wright was named to the Minneapolis-St. Paul Business Journal's 40 Under Forty list for 2010 Thursday. Wright was selected from among nearly 300 nominees evaluated on their professional and community accomplishments. Initiatives she has worked with include: overhauling MnCUN's website, establishing a networking group for young credit union professionals, creating a vendor advertising program for companies working with Minnesota credit unions, acting as staff liaison to MnCUN's international partnership with a credit union association in Paraguay, representing credit unions and MnCUN as vice president of the Minnesota Jump$tart Coalition for Personal Financial Literacy, working with the University of Minnesota Extension to host financial education training; and being involved with Minnesota Financial Fitness Network, National Youth Involvement Board and the Minnesota Family Involvement Council ... * RANCHO CUCAMONGA, Calif. (3/30/10)--CO-OP Financial Services is encouraging general interest business publications to include coverage of credit unions when dealing with personal finance issues, the credit union-owned cooperative network services provider said in a news release. Its release provides general public media with information about credit unions' history, structure and philosophy ... * HEATH, Ohio (3/30/10)--Hopewell FCU President Alan P. Smith has retired after a 43-year credit union career, 27 of them with the Heath, Ohio-based Hopewell. Smith led the credit union in converting its charter from an occupational charter to a community credit union in 1994 (Newark Advocate March 28). He was honored in 1999 as the Ohio Credit Union League's Credit Union Professional of the Year. Hopewell FCU's board of directors has unanimously appointed James G. Johnson, executive vice president and chief operations officer, as the $70 million asset credit union's next president ...

Illinois governor appoints state CU board

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NAPERVILLE, Ill. (3/30/10)--Leaders from several Illinois Credit Union League affiliates were recently appointed by Illinois Gov. Patrick Quinn to the Board of Credit Union Advisors, according to the league. The board makes recommendations on rules and policies related to credit unions, and on appointments of the state’s supervisory panel. It also consults with, advises and makes recommendations to the governor and director on matters that pertain to credit unions, and advises upon appointments and employment of personnel, the league said. Those elected to the board include:
* Chair Peggy Cummins, CEO, Three Rivers Community CU, Mount Carmel; * Alice Clements, director, Consumers Cooperative CU, Waukegan; * Brian McDaniel, director, Argonne CU, Romeoville; and * Karen Woods, marketing manager, Decatur Earthmover CU.
“Illinois credit unions have enjoyed a positive working relationship with Gov. Quinn throughout his political career and his support continues to this day,” said Dan Plauda, league president/CEO.

Barbados CUs move forward on deposit insurance

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BRIDGETOWN, Barbados (3/30/10)--Credit unions in Barbados last week accepted the World Council of Credit Unions' (WOCCU) design for a program that will implement deposit insurance for the country's financial cooperatives. The program's implementation will not only strengthen the Caribbean nation's credit union movement, but enable it to compete more effectively with foreign banks that currently dominate the island, said WOCCU.
Click to view larger image Barbados Cooperative Credit Union League (BCCUL) and World Council of Credit Unions (WOCCU) officials met to discuss a WOCCU-proposed deposit insurance program. From left are Anthony Pilgram, BCCUL CEO; Dr. Delisle Worrell, governor, Central Bank of Barbados; Dave Grace, WOCCU vice president of association services; and Dean St. Hill, BCCUL president.
"Credit unions are Barbados' only locally owned financial institutions and serve more than two-thirds of the population," said Dave Grace, WOCCU vice president of association services, who led the design of the deposit insurance system. "It's time that credit union member deposits were given the same level of government guarantee with deposit insurance as those held by foreign-owned banks." Credit unions' unanimous support for the program came after a series of meetings Grace held with Barbados' policymakers and officials. Meeting participants included Dr. DeLisle Worrell, governor of the Central Bank of Barbados; Dr. David Eastwick, the government's minister of economic affairs; Warrick Ward, CEO of the Barbados Deposit Insurance Corp.; and Ronald Bascombe, secretary of special projects for the Ministry of Finance. In February, officials from the Barbados Cooperative Credit Union League (BCCUL) attended the Credit Union National Association's Governmental Affairs in Washington, D.C., and participated in Capitol Hill visits with the Iowa Credit Union League. The delegation also met with WOCCU representatives to discuss its deposit insurance design draft and visited with officials at the National Credit Union Administration to better understand the workings of the National Credit Union Share Insurance Fund.
Click to view larger image Credit union officials joined Barbados Minister of Economics Affairs Dr. David Eastwick, third from right, in the Barbados Parliament. (Photos provided by the World Council of Credit Unions)
Last July BCCUL contracted with WOCCU to design and help advocate for deposit insurance implementation. The deposit insurance design delivered last week calls for credit union members to maintain a minimum of BDS$25,000 (US$12,500) in deposit insurance, which will use the Barbados Deposit Insurance Fund (BDIC). But the design also advocates for establishing a credit union fund separate from the commercial bank fund within the agency, and it requires credit unions to attain minimum financial standards to enter into the deposit insurance system. WOCCU and BCCUL hope to have the needed legislative changes enacted later this year. "It is an important initiative in this era of global financial instability to further strengthen the safety and soundness of the local credit union sector," said Dean St. Hill, BCCUL president. "We're happy with the overall response of key stakeholders. All of us are working together to ensure that members' money is safer than ever."

Marketing and BD Council announces 2010 exec committee

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MADISON, Wis. (3/30/10)--The CUNA Marketing and Business Development Council announced its executive committee and officers during the council’s 17th annual conference last week in Washington, D.C. Anne Legg, vice president of marketing, Cabrillo CU, San Diego, will remain chair. Sean McDonald, director of business development and marketing, Liberty Savings FCU, Jersey City, N.J., was named vice chair. Michelle Hunter, senior vice president of marketing and development for Credit Union of Southern California, Whittier, is secretary/treasurer. New executive committee members include: Yvonne Garand, vice president of marketing and business development, Vermont State Employees CU, Montpelier, and Nancy Hutchinson, senior vice president of marketing and business development, Minnesota Power Employee CU, Duluth. They replace outgoing members: Susan Miller, business development representative, Delta Community CU, Atlanta; and Rene McKee, vice president of marketing, California Coast CU, San Diego. Also on the committee are:
* Lesley Carrell, vice president of marketing, Fibre FCU, Longview, Wash.; * Amy Davis, vice president of marketing, Red Canoe FCU, Longview; * Kathryn Davis, senior vice president of marketing and human resources, Xceed Financial CU, El Segundo, Calif.; * Tyler Disburg, chief administrative officer, Montana First CU, Missoula; * Tim Draper, vice president of marketing, Navigant CU, Smithfield, R.I.; and * Carol Payne, vice president of communications and marketing for the California and Nevada Credit Union Leagues.

TODAY features COOs multigenerational lifestyle

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NORTH CHARLESTON, S.C. (3/30/10)--The chief operating officer of South Carolina FCU and his family will be featured today on a TODAY Show segment during the 8 a.m.-9 a.m. ET segment.
Click to view larger image Troy Hall, chief operating officer of South Carolina FCU, is filmed by NBC's TODAY Show while writing his blog, "Life in the Hallway," about multigenerational living.
Click to view larger image Troy Hall, second from left, and his wife, Vicki, pose at their home with the TODAY Show crew. (Photos provided by the South Carolina FCU).
Troy Hall and his family will be spotlighted as a family with four generations living under the same roof. NBC Producer Max Paul found Hall and his family while researching a series on the 2010 Census and was looking for a multi-generational family living in the same home. Paul stumbled on a recent Post and Courier article featuring the Hall family and Hall's blog,, about multigenerational living. With the help of TODAY Show correspondent Miguel Almaguer, the Halls shared their story in their Hanahan, S.C., home last week. "Life in the Hallway is about four generations of folks who have come together to commune in one home out of some common needs ... financial, medical, emotional and biblical," said Hall. "With an understanding built on love and our faith in God, we have joined forces to live under one roof and try to make it work," he continued. South Carolina FCU is a $1.3 billion asset credit union located in North Charleston, S.C.

NYC Council resolution supports municipal deposit choice

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ALBANY, N.Y. (3/30/10)--The New York City Council Thursday unanimously passed Resolution 17, which encourages the state legislature to allow municipalities to deposit public funds in credit unions. “It is time for New York to allow the city to invest its money in community development financial institutions,” said Al Vann, chair of the council’s committee on community development. “While major commercial banks have decreased their lending, local community development financial institutions have provided lending opportunities in neighborhoods throughout New York City. “Many of these institutions have given a lifeline to New York City’s small businesses that are struggling to find capital, while also offering individuals traditionally without bank accounts banking and financial services,” he added. “Allowing these institutions to accept municipal deposits will only strengthen the communities they serve by offering competition and an alternative to commercial banks, whom often have no significant relationship to the communities they serve.” The Credit Union Association of New York applauded the resolution. The current law addressing municipal deposits was enacted in 1909 before credit unions existed, said William J. Mellin, association president. “We hope New York’s legislative body will do the right thing and support municipal depository choice in the final budget,” he said. New York Mayor Michael Bloomberg also issued a statement supporting Resolution 17. “Today’s city council resolution strengthens our message, and I applaud the members of the council for joining with us in this effort,” he said. “If Albany lifts the ban, our administration will fulfill the commitment I made in my recent State of the City speech by depositing $25 million in city funds in federally insured and regulated credit unions that pay the same interest rate as commercial banks. This will allow credit unions to increase the number of loans they issue to low-income families and small neighborhood businesses across the city.” Last week, the New York State Senate passed a municipal deposits bill.

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.”

CUs growth rates and MBLs are media topics

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MADISON, Wis. (3/26/10)--Credit unions got several ringing endorsements this week in the media, which featured articles about growth, member business loans, credit card rates, benefits of credit unions and more. In Everyday Cheapskate ( March 25), an e-mailed newsletter from personal finance expert Mary Hunt, Hunt is asked, "Which do you believe is better for regular, everyday banking and savings: a standard bank or a credit union?" Her answer: "I am a huge fan of credit unions. The only difference between a bank and a credit union is who owns it." Hunt explains credit unions' structure and philosophy and notes their lower fees, better rates, and customer-friendly service. "Credit unions are as safe as banks, but a whole lot better in my opinion, because they operate for the benefit of the account holders." Other articles:
* In North Carolina, the state's credit unions have joined the nationwide push to raise the member business lending cap to 25% of assets from 12.25%.. North Carolina Credit Union League's Dan Schline explains why in "The business of borrowing" ( March 25). Two small business members with loans at Marine FCU explain why they support giving credit unions the ability to help more businesses through the economy. Use the link for the full story. * In Sioux Falls, S.D.,'s story, "The Big Difference in Credit Cards," notes credit union credit cards are "an option that might save you a few bucks." Sioux Falls FCU President Fran Sommerfeld explains "we haven't raised our rates, we haven't cut any credit limits, we haven't added any new fees," and member Marya Leber tells why she switched to a credit union credit card. Use the link. * A letter to the Chicago Daily Herald notes that "Credit unions have benefits over banks." The letter, from Jim Peterson of Hoffman Estates, says he belongs to three credit unions because "they (unlike banks) care about customer service, they don't rip you off and your money is safer in a credit union." He advises, "If you want to fire your bank, ask at any local credit union how to search for one you can join." Use the link. * Bob Marquette, president/CEO of Members 1st FCU, Mechanicsburg, Pa., was featured on Harrisburg’s abc27. “In a year when financial institutions got a public relations black eye, Members 1st satisfaction surveys went up. More than 98% approve,” he said. Use the "Local Banker Smashes Stereotypes" link. * In a profile of the career of Jim Ritter, CEO of Valley 1st Community FCU and former consultant with the Pennsylvania Credit Union Association for 18 years, Ritter said working at the credit union gives him a chance to create a better life for the members (Valley Independent March 24).

TMG client CUs eliminate overlimit card fees

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DES MOINES, Iowa (3/26/10)--Card portfolio managers at 95% of TMG's card-issuing credit unions have discontinued the authorization of overlimit credit card transactions, says TMG. TMG, a wholly owned subsidiary of the Affiliates Management Co. owned by Iowa credit unions and their members, said the other 5% of clients continuing to allow overlimit authorizations will do so without assessing a fee. TMG attributed the trend to proposed rules in the final portion of the Credit Card Responsibility, Accountability and Disclosure (CARD) Act. The rules would permit assessment of overlimit fees only on cardholders who agree to the fees. The proposal would become effective Aug. 22. "There's no doubt that some cardholders will miss the ability to spend over their limits," said Sara Petty, TMG vice president of strategic initiatives. "However, removing the temptation to overspend really makes sense for credit unions as they lead the country's efforts to return to thrift and financial responsibility," Petty added. Citing opt-in program costs among the reasons for eliminating the overlimit authorizations, TMG clients predict several challenges in the maintenance of two cardholder groups--those opting in and those opting out of overlimit fees. "To complicate matters, the two groups would be in constant flux, as cardholders maintain the ability to change their minds," Petty added. "If, for instance, a cardholder has opted in, he has the right to opt-out each time he receives a statement containing an overlimit fee." Also, credit unions offering fee-based overlimit services have been asked to present their fee models to the Federal Reserve Board in order to weigh in on the Fed's final rules regarding the reasonability of fees. "The complexities of defendable fee calculations make fee-based opt-in program compliance insurmountable for many card-issuing credit unions," Petty said. TMG's experiences mirrors the Credit Union National Association's (CUNA) belief that many credit unions will chose to either disallow the service or pay overlimit transactions without charging a fee, since the CARD Act requires the member to opt-in before such a fee can be charged. The burdens of doing so will not likely be worth the additional fees that may be collected, said CUNA.

CUs applaud N.Y. Senate support for deposits

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ALBANY, N.Y. (3/26/10)--The New York state Senate this week passed a budget resolution including support for municipal deposit choice--a move the Credit Union Association of New York (CUANY) applauds. The Senate joins Gov. David Paterson, New York City Mayor Michael Bloomberg, and local elected officials statewide in support of the measure. It allows local government entities such as cities, towns, counties, public schools, fire districts and public libraries the option of depositing public funds in local credit unions or community savings institutions. CUANY now asks the state Assembly to join the Senate and governor in passing a “win-win” for state and local governments, and local communities and taxpayers. “Municipal deposit choice allows public funds to stay local, allows for more reinvestment in our communities, helps local governments increase revenue, and creates much-needed savings for New York taxpayers,” said William J. Mellin, CUANY president/CEO. “In short, municipal deposit choice puts more public dollars back on Main Street.” While a majority of states allow municipal deposit choice, and the Federal Credit Union Act explicitly authorizes federal credit unions to accept local government deposits, commercial banks in New York State currently hold a monopoly on such deposits. “In recent months, a variety of publications and organizations have been urging consumers to ditch their ‘big banks’ in favor of credit unions or community banks,” said Mellin. “This broad support and shift from Wall Street to Main Street, confirms that the local credit unions’ member-owner operating model works, and I’m confident that New York’s local government entities, like more and more consumers and localities in other states, will soon be jumping on the credit union bandwagon as long as they are given the freedom to do so.” Credit unions have the potential to help state and local officials in a way that doesn’t cost state or local taxpayers anything, but instead will save them money and increase the range of available financial options local governments desperately need, CUANY said. Allowing credit unions to accept municipal deposits will only strengthen the communities they serve by offering competition and an alternative to commercial banks, said the association.

CUs help youth get in the savings game

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MADISON, Wis. (3/26/10)--April is National Financial Literacy Month and nearly 300 credit unions to date have registered to celebrate with a savings challenge for youth sponsored by the Credit Union National Association (CUNA). The seventh annual National Youth Saving Challenge teaches youth under age 18 the importance of starting--and maintaining--a life-long savings habit. This year’s theme is “get in the saving game” and uses sports to illustrate the concept of saving for future wants and needs. The Saving Challenge is run in conjunction with National Credit Union Week, officially recognized April 18-24, although credit unions celebrate it throughout the month. “There are no losers in this game,” says Lin Standke, manager of product training in CUNA’s Center for Personal Finance. “Youth win financial smarts. Credit unions win as their trusted financial advisor. And the publicity we get for credit unions is, well, something banks can’t buy.” In the savings challenge, credit unions are offering prizes for young people under age 18 who make deposits. Prizes include giveaways and gift certificates with a sports theme. Some credit unions are supporting schools in their communities with donation jars for contributions to sports programs. Others are collecting new and used sports equipment for Special Olympics. Lobbies will be decorated with team pennants, sports equipment, and pictures of local athletes. Branches will host engaging activities such as basketball dunks, putting practice, and coloring contests to make visiting the credit union fun and memorable for young members. Family events range from a bowling night to carnivals in the parking lot. “Credit union employees are getting in the game by wearing specially designed savings game jerseys or local team uniforms,” Standke noted. CUNA will award 10 prizes of $100 nationwide in early May to young members participating in the Saving Challenge. Last year, credit unions posted a record Saving Challenge score when nearly 140,000 young members deposited $26.5 million into their savings accounts. And 10,006 of these were new accounts.

Ohio league announces 2010 state awards

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COLUMBUS, Ohio (3/26/10)--The Ohio Credit Union League has presented its Leadership Recognition Awards for 2010. The awards are given to recognize leadership, political action, youth financial education, social responsibility, philosophy and marketing. The awards included (eLumination Newsletter March 24):
* Louise McCarren Herring Lifetime Achievement Award--Claude Clarke, who wrote the Ohio Credit Union Act and was the first part-time manager of the league; * Volunteer of the Year--Jerry Gramke, board chair of Cincinnati Police FCU; * Professional of the Year--Bill Burke, CEO of Day Air CU, Kettering; * Claude Clarke Political Inspiration Award for an individual and credit union--Phil Buell, CEO of Superior FCU, Lima, and Seven Seventeen CU, Warren; * Desjardins Youth Financial Education Award for leadership on behalf of youth financial education--Unity Catholic FCU, Parma, and Day Air CU; * Dora Maxwell Social Responsibility Award for campaigns to assist local residents and organizations--Community Star CU, Elyria; Directions CU, Sylvania; and the Central Ohio Chapter; * Louise Herring Award for Philosophy in Action for extraordinary practical applications of the People Helping People philosophy--Toledo (Ohio) Police FCU and Wright-Patt CU, Fairborn; and * Cutting Edge Marketing Brilliance Award for agency and non-agency entries: Members First CU, Columbus, and Wright-Patt CU.
The winners will be honored at the Ohio Credit Union League ZENITH10, April 15-16 in Cincinnati. To see the winning award entries, use the link.

CU System briefs (03/25/2010)

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* BRATTLEBORO, Vt. (3/26/10)--Gary Ellis, former president/CEO of River Valley CU, was sentenced Wednesday to six months in prison after pleading guilty to embezzlement from the Brattleboro, Vt.-based credit union. Chief U.S. District Judge William K. Sessions III also ordered Ellis, 57, of Newmarket, N.H., to serve five years of supervised release after the prison term, including an additional four months of home confinement, and ordered him to pay restitution of $120,000 to $200,000. A hearing later will determine the exact amount. Ellis was CEO until spring 2005. His Dec. 3, 2008, indictment said he took extra salary, bonuses and other payments from about January 2001 through early 2005, said the U.S. Attorney’s Office for the District of Vermont (Targeted News Service March 24) ... * TRENTON, N.J. (3/26/10)—New Jersey’s Senate has confirmed Tom Considine, a former Metlife vice president and government relations counsel, to head the state’s Department of Banking and Insurance. He has served as acting commissioner since late January, said the New Jersey Credit Union League (The Daily Exchange March 25). Also, Gov. Chris Christie this week nominated Garret Komjathy, a corporate finance professional most recently from the media sector, as director of the Division of Banking. His experience includes capital markets, cash management and treasury products at GE Commercial Finance, Fleet Bank and HSBC, said the league ...

42 charged in Fla. fraud ring targeted CUs

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ORLANDO, Fla. (3/26/10)--Florida law enforcement authorities are looking for the ringleader of a fraud and identity theft ring involving 42 people who stole more than $200,000 from five Orlando area credit unions over three years. Authorities made 21 arrests in "Operation Long Hair" and charged the suspects with various frauds, said the Florida Department of Law Enforcement (FDLE). Twenty-one others--including accused ringleader Vanessa Rideau--are still at large (Orlando Sentinel and March 24). Rideau, 41, allegedly recruited people to open accounts at a local credit union. When the recruits received their ATM cards, they would sell the cards and personal identification numbers to her for a fee. Then Rideau would deposit a fraudulent check or empty envelope into the account via an ATM--and immediately withdraw cash. Later, the check didn't clear and the credit union would contact the account holder, who would say the card had been stolen. Rideau is accused of making more than 40 transactions at the credit unions, said FDLE. The investigation began when one credit union complained to the agency about suspicious ATM transactions. The frauds occurred from 2005 to 2008 and targeted these credit unions: Insight FCU, Martin FCU, Central Florida Educators CU, McCoy FCU, and Fairwinds FCU. According to ABC Action News, many of the suspects are also suspects in a food stamp fraud.

2010 Diamond Award winners named

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MADISON, Wis. (3/26/10)--Co-op Services CU, Livonia, Mich., was named “Competition’s Best”--the highest “Best of Show” award in the CUNA Marketing and Business Development Council’s Diamond Awards competition. The winners were acknowledged during the council’s 17th annual conference, which ended Thursday in Washington, D.C. Entered in the Complete Campaign category, Co-op Services sought to inspire people to give back to the community by randomly offering individuals $100 over 100 days to increase brand exposure and new members. The campaign netted 1.7 million non-paid media impressions throughout the Detroit-area media market. This year’s awards competition received nearly 1,000 entries. Judges awarded four entries as Best of Show, along with 165 Diamond Awards and 188 Awards of Merit. Other Best of Show honorees included:
* Best Association Entry: Richmond Chapter and Southside Chapters of the Virginia Credit Union League, Richmond, Va., for its league marketing campaign, “What If Credit Unions,” which aimed to educate locals about the credit union alternative and seize the opportunity created by the current economic environment. * Best Use of Art: Dupaco Community CU, Dubuque, Iowa, for its “Sycamore Street Experience” entry in the Retail Merchandising category. The “Sycamore Street Experience” branch tribute was a way to educate members on the history and uniqueness of the credit union and preserve the memories of the Dubuque Packing Company for area residents. * Best Use of Humor: Directions CU, Sylvania, Ohio, for its “Life is Easier with Directions” television spots. Through a series of TV ads, Directions emphasized that the credit union is there for its members during different life stages. The spots helped increase membership by 5,526 members and name awareness by 37%.
The Diamond Awards, representing the pinnacle of credit union marketing and business development, feature 34 categories, ranging from direct mail and website marketing to public relations and political action. Judges evaluated entries based on strategy, design and production, creative concept, copy and communication, and results. For a complete list of award winners, use the link.

Illinois kicks off third year of REAL Solutions

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NAPERVILLE, Ill. (3/26/10)--Illinois credit unions started their third year participating in REAL Solutions with a meeting that addressed topics centered on membership growth, said the Illinois Credit Union league (ICUL). Topics included:
Click to view larger image Wednesday Medlen, business development officer from Community Plus FCU, Rantoul, Ill., discussed her credit union’s involvement in Volunteer Income Tax Assistance and Money Smart Week efforts as an outcome of its participation in REAL Solutions during an Illinois Credit Union League meeting this week in Naperville. (Photo provided by the Illinois Credit Union League)
* Student Interns: Representatives from Robert Morris University discussed the opportunity for credit unions to engage student interns--paid and unpaid positions--to help with special projects, such as marketing and business development projects. * Financial Education and Girl Scouts: The Girl Scouts of Greater Chicago and Northwest Indiana discussed the volunteer opportunities for credit unions to help teach financial education programs to girl scouts. They highlighted Journey World--an experiential, hands-on environment to immerse students in a new way of learning. * Financial Education--CU4 Reality: Scott CU, Collinsville, shared the credit union’s experience implementing the CU4 Reality program--also known as a “reality fair” or a “reality store”--for 200 high school seniors. Materials were developed by America’s Credit Union Museum. Scott CU is adapting the program to reach middle school students, high school students and newly enlisted military members. * Financial Education--Money Smart Week: The Federal Reserve Bank of Chicago hosts Money Smart Week (MSW) in seven areas of Illinois during April of each year. MSW is a public awareness campaign to help consumers better manage their personal finances. Businesses, financial institutions, schools, libraries, not-for-profits, government agencies and the media come together to stress the importance of financial literacy. These groups provide free educational seminars and activities throughout MSW.
Field coach Mark Lynch also provided an update regarding REAL Solutions activities nationwide. The next meeting for Illinois REAL Solutions partner credit unions will be held June 9 at the ICUL offices in Naperville. Also, other scheduled Illinois REAL Solutions gatherings include two education sessions, including one on Mad City Money, as part of ICUL’s 80th Annual Convention April 29 through May 1 in Chicago. “The topic of reality fairs is very timely for us, given we are looking to expand our efforts with local high schools,” said Tom Pierce, CEO of Canals & Trails CU, Lockport. “We have been very happy with REAL Solutions, as it has provided help to implement our payday loan alternative program, as well as to explore youth marketing and providing income tax assistance.” ICUL and the Illinois Credit Union Foundation have teamed up with the National Credit Union Foundation to offer the “REAL Solutions for Low Wealth Households” program in Illinois. Currently, 48 credit unions in the state participate. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is being operated in 27 states nationwide.

Fundraising for quake victims totals 854983

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MADISON, Wis., and WASHINGTON (3/25/10)--Credit unions, learning more about the plight of colleagues and their 404,000-plus members in Haiti, are still donating to the Haiti Credit Union Disaster Relief Fund to assist victims of the Jan. 12 earthquake that devastated the country. So far, the Worldwide Foundation of Credit Unions, affiliated with the World Council of Credit Unions (WOCCU), has received in hand $854,983 from credit unions and organizations worldwide, said Valerie Breunig, executive director of the foundation. Of that total, U.S. credit unions and organizations have raised $442,142.54 through the National Credit Union Foundation's (NCUF), said Jill Stevenson, marketing and communications coordinator at NCUF. The overall total is actually higher "because Canada is holding money for us that we don't want to count until it is in hand, probably next week," Breunig told News Now. "Our campaign is still progressing with donations arriving from around the world," she added. On-the-scene reports from WOCCU's staff in Haiti indicate a number of credit unions were damaged and some destroyed, but many more are expecting capital problems as their members' situations become more evident. (See related story in News Now's System section: "Haiti's CUs face grave issues on capital"). Credit unions still standing have used their existing network to help displaced members of damaged institutions access their accounts with biometric identification cards, allowing them to receive much-needed remittances. WOCCU has helped credit union staff with funds to provide immediate relief, including food, clothing, and tents for shelter and offices. It has partnered with Food for the Poor to provide general relief to people in the hard-hit Port-au-Prince area. Once damage to all credit union facilities has been assessed, a formal rebuilding program will begin so credit unions can open their doors and help more members. Meanwhile credit unions and organizations continue to raise funds to help:
* The Georgia Credit Union Foundation collected more than $25,000 for the Haiti relief effort, thanks to more than two dozen credit unions, one chapter and three individuals in the state. "So many people were affected by this earthquake and we were glad to do what we could to support WOCCU's efforts to help those in need during these very difficult and sad times," said Dan Denning, executive director of the foundation. * Earlier this month the Maine Credit Union League and credit unions raised nearly $3,000 in one week, bringing total funds raised for Haiti by Maine credit unions to more than $20,000. "The need for contributions has not diminished in the two months since the earthquake, and Maine's credit unions remain committed do doing all that we can to help," said Jon Paradise, governmental and public affairs manager for the league. * California Bear CU, in downtown Los Angeles, said its staff and volunteers donated $955.31 to the WOCCU fund, which the credit union matched with a $1,000 donation of its own. CEO Jennifer Oliver noted the credit union chose the WOCCU Relief Fund "because making our donation to a credit union organization would embrace the spirit and support the international development of the credit union movement."
Credit unions and organizations also are collecting for efforts to assist Haiti's general public. Credit unions in Charleston, S.C. pooled resources and collected $25,000 to give to Water Missions to send a complete water treatment system to Haiti. MAFCU in Brookline, Mass., contributed $6,100 to Partners in Health to provide medical care. CPCU, in Somerville, Mass., used coin counting machines to collect money and raised $5,359 for the American Red Cross. MoneyGram, a CUNA Strategic Services provider, announced last week that its Global Giving program expanded its support to include a minimum $250,000 grant to the American Red Cross. Through June 30, it will donate $2 from every transaction sent to Haiti as a donation for relief services. Many credit unions, however, are concentrating their efforts to the WOCCU fund so their efforts help colleagues and their members. To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc., 5710 Mineral Point Road, Madison, WI 53705, USA. Donations also can be made online with a credit card at For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the NCUF's CU Aid at For more information, use the links.

Michigan credit unions saw record growth in 2009

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LANSING, Mich. (3/25/10)--While other institutions pulled back or closed their doors during 2009, credit unions in Michigan saw strong growth in members, deposits and small-business lending, reports the Michigan Credit Union League (MCUL). Members' savings deposits at the state's credit unions grew by 12.2% to $32.5 billion in 2009, according to year-end statistics compiled by the National Credit Union Administration (NCUA). The best measure of industry strength--net worth-to-assets ratio--showed credit unions at 10.9%--above the 7% ratio considered well-capitalized by regulators and a percentage point higher than the 9.9% average for credit unions nationwide. Credit unions' total loans were up 4.1% while other lenders reported sharp drops in lending, said the league. New-auto loans rose 19.7%, used-auto loans 12.5%,, credit card loans 4.5% and first-mortgage loans 2.8%, despite Michigan's depressed real estate market. Michigan credit union auto lending benefited from the industry's participation in the Invest in America program, which offers member discounts on General Motors and Chrysler vehicles in return for credit unions' promotional efforts supporting domestic automakers nationwide. "Michigan's credit unions have stepped up to the plate to make small loans at a time when other institutions have cut back," said MCUL President/CEO David Adams. "As other lenders have struggled to make credit available to consumers and businesses in Michigan, or as banks have added new fees on credit cards and other products, credit unions have continued to offer consumer-friendly products and services, and continued to lend." he said. He noted that their small-business loan growth and record membership growth "particularly demonstrates that more and more people are turning to credit unions as their trusted financial institutions of choice during tough economic times." Small-business loans grew 18% to $838 million, and credit unions in the state have pledged $43 million in business loans as part of the state's entrepreneurship program, the Small Business Financing Alliance, in partnership with Gov. Jennifer Granholm and the Michigan Economic Development Corp. Adams pointed out that Michigan households are turning to credit unions in record numbers. Membership had flat growth since 2001 while Michigan's population shrank. In 2009, however, membership grew by more than 37,000 to more than 4.4 million members. He attributed the recent growth to "public outcry over Wall Street and big bank abuses nationally."

CU System briefs (03/24/2010)

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* YOUNGSTOWN, Ohio (3/25/10)--Howard Shreve, the last charter board member of Associated School Employees CU (ASECU) has resigned from ASECU's board of directors after more than 50 years' service. Shreve helped found Austintown School Employees CU on 1959 in Youngstown, Ohio. It was renamed later. During his tenure, the credit union has merged six credit unions, expanded its field of membership twice, and built two new branch facilities. Currently ASECU has eight branches, serves more than 20,000 members and has more than $150 million in assets. "Howard has helped build this credit union from a small operation in the basement of his home to the successful venture it is today," said President/CEO Michael J. Kurish ... * NORFOLK, Va. (3/25/10)--A Chesapeake, Va., man was convicted in a U.S. District Court on 30 felony counts related to a dozen bank and credit union robberies or attempted robberies and faces up to 383 years in prison. Leonard Earl Roulhac, 39, was found guilty Monday of the robberies, which occurred during a six-month robbery spree last year. He was apprehended in May after an off-duty police officer chased him after the last armed robbery. The financial institutions lost about $36,000 in the heists. He will be sentenced in June (The Virginian-Pilot and The Ledger Star March 24) ... * ORLANDO, Fla. (3/25/10)--Orlando-based Insight Financial CU has shortened its name to Insight CU, effective in May, according to Florida Today (March 19). Credit union officials told the publication they hope the new logo and new outdoor signs and name will boost branch location awareness. The $459 million asset credit union has 10 branches in Central Florida ... * PHOENIX, Ariz. (3/25/10)--Arizona State CU has been named the No. 1 credit union for the fourth consecutive year in the 2010 Ranking Arizona: The Best of Arizona Business, published by Arizona Business Magazine. The rankings are based on voters' opinions in the largest business opinion poll taken in the state. This year, the $1.3 billion asset credit union has opened a new location in Scottsdale, introduced an online account opening service for new and existing members, and responded to changing community needs resulting from the area's economic difficulties by launching a community forum,, for Arizona residents ...

Oral arguments in N.Y. mortgage case postponed

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MANHATTAN, N.Y. (3/25/10)--Oral arguments originally scheduled for today in Hudson Valley FCU's challenge against a New York state assessment requirement on credit union mortgage loans have been postponed until April 13. Credit Union National Association (CUNA) General Counsel Eric Richard and Counsel for Special Projects Michael Edwards were en route to New York Wednesday to attend the hearing when the postponement was announced. Oral arguments next month will be heard before the Supreme Court for New York County, a trial-level court located in Manhattan. Judge Judith Gische will preside. At issue is whether a federal credit union (including its members) must pay a mortgage registration tax to New York to record its mortgages with the state. The Poughkeepsie-based credit union filed the suit on May 15, 2009, against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna, and the State of New York. CUNA will continue to monitor developments in the case and News Now will provide updates.

Ohio CUs push public funds bill at CU Day at Statehouse

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COLUMBUS, Ohio (3/25/10)--Legislation that would provide townships, schools, libraries and other public entities the choice of depositing their funds in Ohio credit unions--H.B. 317--highlighted discussions between more than 120 credit union leaders and the Ohio General Assembly during the 2010 Credit Union Day at the Statehouse Tuesday. A record number of participants attended 105 legislative meetings, stressing the benefits of keeping local government deposits within the communities they serve.
Click to view larger image Ohio House Majority Floor Leader Tracy Maxwell Heard (center) (D-Columbus) met with representatives from Telhio CU, Bethel Community FCU, Credit Union of Ohio, Kemba Financial CU, Members First CU, and the Ohio Credit Union League during the league's 2010 Credit Union Day at the Statehouse, held on Tuesday. (Photo provided by the Ohio Credit Union League)
H.B. 317 would amend the Ohio Revised Code to provide local governments a safe alternative for their investments--their local credit union. At a March hearing of the Ohio House Financial Institutions, Real Estate and Securities Committee, House Majority Floor Leader Tracy Maxwell Heard (D-Columbus) and State Rep. Peter Ujvagi (D-Toledo) provided testimony in support of the legislation, urging their colleagues to give local governments an option when choosing a financial institution. Opponents of the legislation argue credit unions have “an unfair tax advantage.” “Last year, the message to our state representatives and senators was that credit unions are safe, sound, and secure amidst the difficult economy,” said John Kozlowski, general counsel of the Ohio Credit Union League. “This year, in H.B. 317, we have legislation crucial to the ability of our credit unions to invest in the communities and small businesses they serve each and every day.” Meetings with legislators also focused on the overall strength of credit unions as financial institutions. Attendees provided their local representatives with statistics showing Ohio credit unions have strong capital (11.2% net worth), strong liquidity (71.2% loan-to-share ratio), sound portfolios (1.42% delinquency), and secure bottom lines (0.45% return on assets). Also, attendees urged their representatives to contact Congress to support raising the member business lending cap on credit unions from 12.25% to 25% (H.R. 3380/S. 2919). Before attendees met with legislators, Rep. Heard discussed her sponsorship of H.B. 317, which, she said, “follows the philosophy of credit unions. Who better to understand the needs of a local school district or a local township trustee than an institution that is right in the midst of that community?” Heard was followed by Assistant Minority Whip Cheryl Grossman (R-Grove City) and H.B. 317 co-sponsor Rep. Carlton Weddington (D-Columbus), who stressed “credit unions make a difference today, tomorrow, and in the future.” During a lunch reception, attendees heard from the leaders of the Ohio Democrat and Republican parties, Chris Redfern and Kevin DeWine, respectively. Redfern and DeWine emphasized the importance of sharing credit union values with legislators before laying out the agenda for their parties and discussing impending races on the state and federal level in advance of the May 4 primary.

Louisiana Corporate loss at 7.4M still well-capitalized

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METAIRIE, La. (3/25/10)--Louisiana Corporate CU’s (LaCorp) auditors have completed the corporate’s 2009 audit, issuing an opinion that the corporate still is well-capitalized. In 2009, LaCorp experienced a net loss of $7.4 million, resulting entirely from writing off all of its capital in U.S. Central FCU. However, even with the writedown, LaCorp continued to be well-capitalized with total capital at $8.4 million, or 5.99%--well above the National Credit Union Administration’s 4% minimum for corporate credit unions. “We believe our members have the right to timely information for their due diligence, so we worked with our certified public accountant firm to get the audit completed and released promptly,” said David Savoie, president/CEO. “As far as we know, LaCorp is the first to release its audited 2009 audit opinion.” “LaCorp has generated strong earnings for yea-to-date 2010, in keeping with our primary objective of providing the most cushion possible between our members’ capital and any further systemic charges,” Savoie said. “While 2009 was a challenging year for all financial institutions, including the credit union sector, I’m pleased that we are on track for positive earnings this year.” The auditors were Rebowe & Company, certified pubic accountants.

LifeLock to pay 12M in false-claims settlement

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WASHINGTON (3/25/10)--LifeLock Inc. has agreed to pay $11 million to the Federal Trade Commission (FTC) and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services. It is one of the largest FTC-state coordinated settlements on record, said FTC. LifeLock and its principals will be barred from making deceptive claims and required to take more stringent measures to safeguard the personal data they collect from customers, FTC said. The company and its co-founders, Richard Todd Davis and Robert J. Maynard Jr., are barred from misrepresenting the "means, methods, procedures, effects, effectiveness, coverage, or scope of any identity theft protection service." The settlements also bar misrepresentations about the risk of identity theft and the manner and extent to which LifeLock protects consumers' personal information. The settlements also require LifeLock to establish a comprehensive data security program and obtain biennial independent third-party assessments of that program for 20 years. Since 2006, LifeLock's ads claimed it could prevent identity theft for consumers willing to sign up for its $10-a-month service, said the FTC. The agency noted that LifeLock's fraud alerts on customers' credit files protected against only certain forms of identity theft and gave no protection against the misuse of existing accounts; that they did not protect against medical identity theft or employment identity theft; and that they could not provide absolute protection against new account fraud, where fraud alerts are most common. Other claims made--that LifeLock could prevent unauthorized changes to customers' address information, that it constantly monitored activity on customer credit reports, and that it would ensure the customer always received a telephone call from a potential creditor before opening a new account--were also false, said FTC. The FTC said it will use the $11 million it receives from the settlements to provide refunds to consumers. It will send letters to current and former LifeLock customers who may be eligible for the refunds, and instructions for applying. For fuller detail, use the resource link.

Haitis CUs face grave issues on capital

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PETIONVILLE, Haiti (3/25/10)--Nine of its member institutions were seriously damaged in a Jan. 12 earthquake and three were destroyed, reported officials at La Fédération des Caisses Populaires Le Levier, an organization serving 50 caisses populaires, or credit unions, throughout Haiti.
Click to view larger image Staff members and workers dig through the wreckage of KOTELAM's Magoire Ambrose caisse populaire--or credit union--branch office in Port-au-Prince, Haiti, following a Jan. 12 earthquake. The building was destroyed.
One institution, KOTELAM, was reduced to rubble. However, the remaining institutions, many in rural areas, face even greater challenges in the coming months, said World Council of Credit Unions (WOCCU). Many of Haiti’s 120 credit unions survived the earthquake with minimal damage, but that’s not necessarily the case for their members. Members who died or faced a complete loss of personal assets could undermine the financial well-being of their credit unions. Increasing loan defaults could lead to the financial collapse of some credit unions, many of which are struggling to restore their operations. “Haiti’s credit unions are already facing physical challenges that include structural damage, logistics and computer connectivity,” said Greta Greathouse, chief of party for the Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program administered in Haiti by WOCCU. “But many of them will soon be facing grave issues regarding their capital position.” Most credit unions in Haiti are self-funded, with members’ savings as the only source of capital on their balance sheets. Members whose homes were destroyed, assets lost and relatives killed in the earthquake no longer can repay their loans. Each default drives the credit unions closer to financial ruin. “If members can't repay their loans, credit unions could lose all of their net worth ... and then some,” said Greathouse.
Click to view larger image Greta Greathouse (center), who heads up World Council of Credit Unions’ (WOCCU) program in Haiti, explains the challenges facing credit unions to Barry Lennon, WOCCU senior vice president (left), and Dave Richardson, WOCCU senior manager of technical development, in one of WOCCU’s temporary Haiti offices inside an art gallery. (Photos provided by World Council of Credit Unions)
HIFIVE, a three-year, $34.4 million multi-partner program funded by the U.S. Agency for International Development through the Academy for Educational Development and administered by WOCCU, is designed to strengthen enterprise development and promote job creation in rural Haiti. HIFIVE is working with the financial sector to bring savings, credit and remittance-linked products to underserved areas of the country and provide technical training to micro-, small- and medium-sized enterprises. WOCCU's Haiti office is undergoing its own logistical challenges. It is operating out of temporary space in two locations, one on the veranda of an apartment building and the other inside Gallerie Expressions, an art gallery in the Port-au-Prince suburb of Petionville. Permanent office space has been rented, but will require significant refurbishing before it becomes functional. “We hope to be in the new space in a few weeks, but then we had hoped to be in March 1,” Greathouse said. Meanwhile, logistical connectivity issues continue to challenge daily operations and escalating prices have caused additional hardship for the staff, most of whom live in tents near the sites of their homes. WOCCU staff stability will continue to be critical in the program’s efforts to help the country’s credit unions, she added. “If employees have a house or tent, chances are they have between five and 20 relatives living with them,” Greathouse said. “With prices climbing since the earthquake, our budget has been challenged and it’s become that much harder for staff to care for family members’ needs.” Haiti’s credit unions also are strapped for critical resources and face similar challenges. Regulators at the Central Bank of Haiti have already earmarked 15 struggling caisses for closure, a number that could climb to as high as 50 of the country’s roughly 220 financial cooperatives. Any type of assistance judicially administered could help the struggling movement continue serving members, according to Evans Jerome, the Central Bank's assistant director. “Before the earthquake, many of [the credit unions] needed help,” Jerome said. “Now they will appreciate that help even more.” (See related story in News Now's System section, "Fundraising for quake victims totals $854,983.")

Its flood season Agility warns CUs

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CHARLOTTE, N.C. (3/24/10)--Isolated weather events in several sections of the country caused several of Agility Recovery Solutions' members to stage alerts or declare disasters last week. None were credit unions. However, Agility is reminding credit unions that it's time to take stock of what to do before the weather packs a wallop, starting with a flood preparedness checklist. Floods in the Northeast last week plagued many businesses, including two financial institutions and members in New England, reported Agility, a business recovery and continuity service provider based in Charlotte, N.C., and a CUNA Strategic Services (CSS) provider. Both banks experienced severe flooding in their basements. Agility helped them set up recovery assets, with one requiring a small mobile unit and both banks were operating. Flooding near Fargo, N.D., resulted in one client asking Agility to stand ready to deliver 50 laptops and a mobile unit, if needed. "Disaster recovery is more than bits and bytes. It's very personal," said Agility CEO Bob Boyd. "The reality is these businesses are vital to the economic success of our communities, yet 90% of small and mid-sized businesses are unprepared for an interruption." Businesses are more likely to flood than burn down, said Agility. Most businesses can save between 20% and 90% on the cost of stock and moveable equipment by taking action to prepare in advance of flooding. Agility provides a flood preparedness checklist that goes over what to do before the flood, during the event, afterward, and how to communicate with your staff. Use the Agility/CSS link to access the checklist. Agility also sends out a tip each week relating to disaster recovery and preparedness. Use the link to sign up for the tips. In addition to its North Carolina headquarters, Agility Recovery Solutions also has distributions centers in Atlanta, Ga., and Mississauga, Ont. It has been in alliance with CSS since 2006. It serves 339 credit unions with 478 branches.

Average APY for rewards checking accounts 3.3

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NEW YORK (3/24/10)--Consumers are looking for ways to boost their interest earnings in a low-rate environment, and credit unions might consider offering rewards checking accounts. Bankrate.comprojects the accounts will be a more popular option for deposits in coming years. "Rewards checking accounts offer very compelling yields, so long as consumers are able to meet each of the account requirements each month, said Greg McBride, senior financial analyst for Bankrate, which announced results of its first annual 2010 Rewards Checking Survey. The average annual percentage yield (APY) for rewards checking accounts has maxed out at 3.3%, according to the study. The survey examines what to expect if opening a rewards checking account from a credit union or bank and what to look for to make sure the account gets the maximum yield. Credit unions will want to take note what others are doing in the field. Other findings:
* The average default APY if the account holder does not keep up with the minimum requirements was 0.16%, a significant drop off, said Bankrate. * The balance cap for earning the high APY was, most commonly, $25,000. * Of the accounts surveyed, 95% required the account holder to make a certain number of debit card transactions month to receive the highest APY. The average number of debit card transactions required was 11, but the most common requirement was 10 per month. * Roughly 91% of the rewards checking accounts have requirements for direct deposit and/or bill pay, but 48% require only one or the other, not both. One direct deposit per month is the standard requirement. * About 35% demand a mandatory bill pay requirement, ranging from logging in to as many as four bill payments per month; however, one bill payment per month is the most common requirement.
The study surved more than 211 banks and credit unions across the nation.

HeartlandTJX hacker sentencing is this week

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BOSTON (3/24/10)--Prosecutors plan to ask for a 25-year prison sentence--the maximum allowed--this week for the computer hacker who helped orchestrate several of the largest thefts of credit and debit card data in U.S. history, costing consumers, credit unions, other financial institutions and insurance companies more than $200 million. Albert Gonzalez, 28, a former federal informant from Miami, pleaded guilty last year to separate hacking cases in Massachusetts, New Jersey and New York that involved a number of high profile data breaches. He is to be sentenced on Thursday and Friday in a U.S. District Court in Boston, where several cases were consolidated (Associated Press March 23). The cases included hackings at: TJX Cos., BJ's Wholesale Club, Heartland Payment Systems, Hannaford Brothers, 7-Eleven stores, OfficeMax, BostonMarket, DSW, Barnes & Noble, Sports Authority and the Dave & Buster's restaurant chain. Authorities said that just two of Gonzalez's servers contained more than 40 million distinct credit and debit card numbers. Maximum sentences in the TJX , Office Max and DSW case would be 25 years. He also faces 20 years for the Dave and Buster's attack, and up to 25 years for the Heartland, Hannaford and 7-Eleven cases.

New Wash. law aims to keep financial info safe

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OLYMPIA, Wash. (3/24/10)--Washington Gov. Christine Gregoire Monday signed a law that will encourage financial institutions to take extraordinary measures to protect consumers from identity theft and financial fraud, said the Washington Credit Union League. H.B. 1149 removes the financial burden of reissuing compromised cards and accounts from credit unions and banks affected by large-scale data breaches, and encourages them to actively intervene on behalf of consumers. It also encourages businesses conducting credit and debit transactions to be careful with consumer data. “Washington credit unions have spent millions of dollars cleaning up the mess left by merchants and data processors when large-scale data compromises occur," said league President/CEO John Annalorao. "The private financial information these third-party processors hold has too often been negligently stored or transmitted. Credit and debit card fraud can be the result. “This new law thoughtfully addresses that responsibility by placing recovery costs back on the negligent party," Annalora said, noting it is "likely a national model for state data breach legislation,” Annaloro said. Under current Washington law, when a breach compromises a consumer's card data, the breached business must alert the consumer or the cardholder's financial institution unless the breach is part of an ongoing investigation. Because of reputation management issues and the cost of notifying customers, the breached business generally chooses to notify the card-issuing financial institution. At that point the financial institution has a choice--alert consumers of a possible risk of fraud or actively intervene. Either way, the financial institution unfairly bears the reputational and financial burden, said the league. The increase in frequency of large-scale data breaches, combined with the soaring reissuing cost of plastic cards---between $15 and $20---has stymied the once standard practice of blocking and reissuing cards, the league said. The new law seeks to revive this practice. “When the first notification of a data breach occurs, having the financial institution immediately begin blocking and reissuing compromised plastic is the most proactive step a credit union or bank could take to protect the consumer from harm,” said Annaloro. “Allowing financial institutions to recoup these costs from a negligent data-breacher removes the financial burden from affected financial institutions. This encourages institutions to always take action on consumers’ behalf,” he said. The highlights of the legislation are threefold:
* A business that processes more than six million debit or credit transactions per year is liable when it fails to exercise reasonable care through encryption of account information; * Vendors such as data processors are liable for damages due to a defect in the vendor’s software or equipment related to the encryption if the defect resulted in the breach; * Financial institutions may recoup from businesses or vendors reasonable actual costs of reissuing plastic cards to Washingtonians affected by a data breach.
Businesses are immune from action when the information they process is encrypted and the business itself is certified compliant. During the past five years, Washington has enacted several statutes to help consumers protect themselves from identity theft and financial fraud. This new law further improves consumer protections against these types of crimes, said the league. Washington is the second state to enact data breach legislation. Minnesota passed a similar law in 2007. Prime sponsors of the legislation include Rep. Brendan Williams (D-22), Rep. Dan Roach (D-31), and Sen. Jeanne Kohl-Welles (D-36). In addition to community banks, which had opposed the legislation until this year, this data breach protection legislation was supported by consumer groups and at least one national insurance company, CUNA Mutual Group.

Bankers MBL attacks fail scrutiny

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WASHINGTON (3/24/10)--Credit unions have been attacked by bankers with eight general claims against raising credit unions' member business lending (MBL) cap, but those claims do not stack up under scrutiny, according to an analysis by the Credit Union National Association (CUNA). The claims and the facts that poke holes in the bankers' arguments are the topic of a feature this week in CUNA's online legislative/regulative news analysis publication, Credit Union NewsWatch, which is published twice a month. One of the arguments centers on safety and soundness. Bankers say that raising the MBL cap to 25% of a credit union's assets (up from 12.25%) would undermine credit union safety and soundness. But data collected by the National Credit Union Administration (NCUA) and the Federal Deposit Insurance Corp. show that credit unions have a long history of engaging in safe and sound business lending, and that business lending is actually much safer at credit unions than at other institutions, says CUNA's Research and Policy Analysis. The data indicate:
* Credit union MBL net charge-off rates have been significantly lower than bank rates year-in and year-out for over a decade. Since 1997, credit union MBL net charge-off rates have averaged 0.15%, a figure that is roughly one-sixth of the 0.82% bank average during the same period. * More recently, with the increased losses at all lenders from the financial crisis and recession, the increase in loss rates at credit unions pales in comparison to bank results. During 2009, credit unions charged off business loans at a 0.59% rate--about one-fourth the 2.36% rate reported by banks over the same period. In 2008, credit unions charged off 0.33% compared with banks' 1.01%. and in 2007, the figures were 0.09% for credit unions and 0.52% for banks. * Compared to other loans at credit unions, business loan net charge-off rates are lower than net charge-off rates on credit union consumer loans and essentially identical to the net charge-off rates in credit union real estate loan portfolios. * Most credit unions have excess liquidity today that is depressing their overall earnings. Moving assets from low-yielding investments into higher-yielding MBLs, even after accounting for credit losses on those loans, will increase earnings, capital contributions and overall safety and soundness. * NCUA has indicated if the MBL cap were increased or eliminated, it would revise its regulation to ensure additional capacity in the credit union system would not result in unintended safety and soundness concerns.
To access the NewsWatch article (Members Only), use the link. To subscribe, use the second link.

Tech CU offers mobile banking security tips

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SAN JOSE, Calif. (3/24/10)--Consumers can significantly minimize the risk of fraud and help protect their identity while using mobile banking services by following some common-sense tips, said Technology CU, San Jose, Calif. “Fraudsters know that the key to their success lies in the consumer,” said Victor Smilgys, Technology CU assistant vice president of e-commerce and a mobile banking security expert. “So they are being very crafty in their approach to making the consumer believe an app is harmless and, in some cases, disguising it as a security safeguard. Better education is the key to minimizing these risks.” Tech CU’s Consumer Tips for Mobile Banking Security include:
* Password-protect your mobile device and lock your device when it's not in use. Keep your mobile device in a safe location. * Frequently delete text messages from your financial institution on your mobile device, especially if they contain sensitive information. * Never disclose personal information about your accounts via a text message, (i.e., account numbers, passwords, or any combination of information) that can be used to steal your identity. * Immediately contact your financial institution to change the details of your mobile banking profile if you change your mobile number or lose your mobile phone. * Do not hack or modify your device, since this will leave it susceptible to infection from a virus or Trojan. When possible, install mobile security software on your device if it’s available. Some mobile security solutions include: AhnLab Mobile Security, avast! PDA Edition, Kaspersky Mobile Security, and Norton Smartphone Security. * Be aware that malware exists and fraudulent applications will continue to pop up. Don’t download applications onto your phone without checking them out first. Verify the legitimacy of an application with your financial institution before downloading it to your Smartphone. Verify that the applications publisher or seller is your financial institution, or if possible, go through your financial institution’s website to download the application. * Report any banking application that appears to be malicious to your financial institution right away. * Monitor your financial records and accounts on a regular basis and consider having electronic alerts on account activity sent to your e-mail or mobile device. Regularly review your statements with online banking. This will enable you to spot any suspicious activity.
Victims of identity theft should contact their financial institution immediately. They also should place a fraud alert on their credit report and continue to review their credit reports, close their accounts that they know or believe have been tampered with or opened fraudulently, and file a complaint with the Federal Trade Commission. Using mobile banking can actually help deter some fraud because it gives consumers an easy way to check their account on a regular basis and notify their credit union or bank more quickly if they see suspicious activity, Smilgys concluded.

Gov. Quinn kicks off Illinois legislative day

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NAPERVILLE, Ill. (3/24/10)--Nearly 140 credit union activists are expected to be present when Illinois Gov. Patrick Quinn kicks off the Illinois Credit Union League’s (ICUL) annual legislative day and reception today in Springfield. Other event highlights will include:
* A regulatory update with officials from the National Credit Union Administration, including board member Michael Fryzel, and Robert Meza, director of the Division of Financial Institutions of the Illinois Department of Financial and Professional Regulation. Meza will provide an update on Illinois state-chartered credit unions; * ICUL staff Steve Olson, executive vice president, general counsel and chief operating officer, and Keith Sias, director of state governmental affairs, who will brief participants on current issues critical to credit unions; * State Capitol visits, where participants can personally call on their lawmakers at the Capitol; and * A legislative reception at the Governor’s Mansion--a new location for the event. More than 40 lawmakers from both sides of the aisle and other dignitaries will attend.
The Illinois General Assembly is scheduled to adjourn its spring legislative session on May 7.

IParadeI other media address trying a CU MBLs

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MADISON, Wis. (3/24/10)--Several media reports--including Sunday’s Parade magazine--this week focused on consumers trying a credit union, and credit unions’ push to increase member business loans (MBL) and lift their MBL cap. Some national media outlets advised consumers to take a good look at credit unions as an alternative financial institution. Some examples are:
* Sunday’s Parade magazine featured advice for consumers on “modernizing [their] money management.” One of the tips on building savings recommends that consumers look to credit unions to obtain higher interest rates. It points readers to to learn more. To read the article, use the link. * In a Tuesday Walletpop Walletblog post, consumers who are trying to obtain a car loan are told: “This might be a good opportunity to determine whether you qualify for membership in any of your local credit unions, as credit unions typically offer very competitive rates for auto loans.” To read the post, use the link. * A Sunday article from the NBC affiliate in Dallas and Fort Worth, Texas, highlights how consumers are moving to local credit unions and community banks from larger national banks, and how a national grassroots effort called “Move Your Money”--which promotes this move--is gaining popularity. “The benefits of being a member of the credit union is that you don’t have those fears that customers of larger banks typically have,” Dallas CU member Dizette Weathers-Maxfield told To read the article, use the link.
Other media outlets have chronicled how credit unions are attempting to expand their small-business loans by asking Congress to lift their MBL limit. Some examples are:
* The Arizona Capital Times mentioned Monday that because credit unions “have been less affected by recession than other financial institutions,” they are looking for more authority under regulations to make more business loans to their members ( “All they need is an act of Congress,” the article said, adding that “Arizona’s 54 credit unions serve more than 1.5 million members ...” * A letter to the editor by John Hirabayahsi, president/CEO of Community First CU, Jacksonville, Fla., published Sunday in urges an increase in the 12.25% cap on credit unions’ small business lending to 25%. “With a cap increase, credit unions would be able to infuse an additional $10 billion to assist struggling small businesses in the first year alone,” he wrote. Hirabayashi added, “All this will take is support from Congress to raise the credit union member business lending cap.” * A Thursday article on discussed how state of Washington credit unions are ready to issue more commercial loans to small businesses if Congress raises the lending cap. “As of now, Washington credit unions are responsible for 3.4% of business lending, whereas banks control over 96% of lending,” said KNDO. “Here … the demand for credit unions continues to grow, even for small businesses.” To read the article, use the link.

CU System briefs (03/23/2010)

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* YUMA, Ariz. (3/24/10)--An all-staff challenge issued by AEA FCU CEO Ken Bredemeyer last year resulted in AEA employees raising $28,000 for Children's Miracle Network, which raises funds for
Click to view larger image Click for larger view
children's hospitals. The latest donation brings the total donated by the credit union to $80,000 since 2008. Bredemeyer noted that the credit union's commitment to help others remains true even during tough economic times. "The credit union industry philosophy of 'People Helping People' is absolutely recession proof," he said. Employees' fundraisers include the traditional bake sales and raffles, plus candy grams, bingo nights, letters from Santa and sports pools. New in 2009 was a weekly Zumba exercise class, hosted by the credit union's Foothills branch, and the most successful fundraiser--for the second consecutive year--was the Roping Roundup hosted by the credit union's financial services staff. The three-day family event attracted 300 attendees and lassoed a record $4,500 for the hospital network (Photos provided by AEA FCU) ... * DOVER, Del. (3/24/10)--Del-One CU has surpassed the $250 million asset mark just shy of its 50th year. The accomplishment was achieved by remaining true to sound fiscal management practices and to its mission of providing "The One Way to a Better Life" for members, said the credit union. Duke Strosser, president/CEO, noted the "significant milestone could not have been accomplished without our members' continued loyal and trust..." The Dover-based credit union was founded as Delaware Highway FCU by a group of Delaware Highway employees who pooled their savings. Today it has seven branches statewide serving more than 30,000 members and more than 200 Delaware businesses ... * PORT HURON, Mich. (3/24/10)--Michele Myrick, executive vice president of E&A CU, died March 17 at the age of 40. She was the daughter of Roger Quitter, recently retired CEO of Christian Financial CU (Michigan Monitor March 22). Myrick joined the staff of the Port Huron, Mich.-based E&A CU in 1999 as vice president of finance and became executive vice president in January 2005. She previously managed the accounting and human resources departments at Financial Health CU--now Option 1 CU--for two years. She was active with the Metro East Chapter and in many Michigan Credit Union League (MCUL) committees and with the Metro East Chapter, said the league. She was vice chairman of the MCUL Political and Governmental Affairs Forum, a PAC trustee. In addition to her father, she is survived by her husband and two sons. Funeral services were Monday ...

Student loan bill overall wont affect private lending

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NEW YORK (3/23/10)--A student loan bill passed with the health care reform bill by the House Sunday won't affect private student loan providers overall, says a company that offers private student loan programs. "The bill overall doesn't affect private student lending, and even if it does, it helps the borrower, so it is a positive for the industry," said Chirag Chaman, chief operating officer of Fynanz, a New York, N.Y.-based provider of custom private student loans. Fynanz has a new alliance with CUNA Strategic Services to help credit unions in the private student loan market. It has 23 credit unions on board and 16 to be implemented in the next nine months, he said. "If [the bill] helps the students, it helps the customers of the credit union, and by helping them, it helps the credit union" meet members' needs, he told News Now. The bill revamps the federal student loan programs and eliminates fees paid to private banks to act as intermediaries in student lending. Instead, the government will expand a direct lending program and use the $61 billion that taxpayers would save over 10 years to increase Pell grants for students (The New York Times March 21). The bill sets automatic annual increases in the maximum Pell grant, scheduled to increase to $5,975 by 2017 from $5,350 this year. It also includes $13.5 billion to cover a shortfall caused by a steep increase in the numbers of students enrolling in college and seeking financial aid during the recession, said the Times. Chaman noted there are few changes from earlier versions of the bill. "There's nothing thrown in that's new," he told News Now. The Pell changes will provide aid, and "Need-based aid for students is important. The funds hadn't been growing the past few years and [the increases] were needed," said Chaman. He noted that the average student takes out a private student loan as a last resort. "They will take the federal loan aid, state grants, scholarships first. A private student loan is the last thing they should look at," he added. Private lending can still be among the options schools can present to students with their information, although schools cannot recommend one over the other. "And the bill has no extra regulatory burden other than what's already come down the pike" when Congress introduced Title X changes in loan forms, he said. The Credit Union National Association (CUNA) closely monitors student financial aid and loan consolidation matters. Many credit unions, particularly campus credit unions, are heavily dependent on federal subsidies so that they can offer student loans at reasonable rates. This issue has taken on added importance as the national credit crunch has dried up many lending pools for college students. In addition recent federal legislation has decreased federal student lending subsidies to financial institutions in favor of direct government to student loans, said CUNA. Student lending helps credit unions build their current and long-term lending base by reaching out to the college-student market, which is expected to reach record levels in coming academic years. Student lending helps credit unions attract members age 18-24 where credit union membership is weakest.

CU System briefs (03/22/2010)

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* YUMA, Ariz. (3/23/10)--AEA FCU said it will try to “strengthen its bottom line” by closing the lobby of its central office in Yuma, Ariz., on Saturdays. However, a drive-through will remain open at the location, as will ATM machines--one of which is a depository. Also, the credit union will close its downtown branch in mid-April and consolidate its services at the central office location. A call center that was located in the back of the downtown branch also will be moved to the central office in mid-April. AEA FCU has $376.7 million in assets ( March 20) … * ANCHORAGE, Alaska. (3/23/10)--An Anchorage fisherman who received an erroneous deposit of $230,000 in his credit union account and proceeded to spend the windfall was arrested by Alaska State Troopers at a local hotel. Timothy Boles, 37, a crew member of the Cascade Mariner, had received the check when Trident Seafoods employees initiated a wire transfer to the owner of the fishing vessel but put the wrong account number on the transfer. The funds ended up in Boles' Credit Union 1 account. By the time Trident reported the loss, the money was gone. Saying that the windfall "was 20 years coming," Boles allegedly withdrew $115,000 in cash, bought a $90,950 cashier's check, got $5,600 in traveler's checks, and paid off a $17,630 on a loan on his car, which he sold to a dealership to buy a new car. He is charged with a single count of first-degree theft for taking lost or misplaced property (Anchorage Daily News March 19) ...

WOCCU tents help Haiti office stay safe productive

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DELMAS, Haiti (3/23/10)--In post-earthquake Port-au-Prince, tents constitute valuable currency. World Council of Credit Unions' (WOCCU) initial efforts to send tents to survivors of the Jan. 12 Haiti earthquake, including staff of the HIFIVE project WOCCU administers, have brought valuable returns of good will and survival.
Click to view larger image Yvon Baptiste, Haiti World Council of Credit Unions staff member, stands next to the tent in which he and 11 family members sleep out of fear that their house will fall in on them during the night.
HIFIVE, the acronym for Haiti Integrated Financing for Value Chains and Enterprises, was launched last July in Haiti with funding from the U.S. Agency for International Development administered through the Academy for Educational Development. The program works across the financial sector to bring savings, credit and remittance-linked products to people living in poverty in underserved areas of the country. Within weeks after the earthquake, WOCCU delivered 42 tents of varying sizes to Haiti with the financial and logistical assistance of Asociacion de Instituciones Rurales de Ahorro y Credito (AIRAC), WOCCU's member organization in the Dominican Republic. Of that number, tents went to each of WOCCU's 19 employees on the ground in Haiti, as well as to other microfinance agencies in need. The result was greater security for staff and more open dialogue with the partners in WOCCU's program.
Click to view larger image A lone bicyclist travels amid the devastation that still characterizes downtown Port-au-Prince. (Photos provided by the World Council of Credit Unions)
"Our house did not really fall down, but we are afraid to sleep in it," said Yvon Baptiste, HIFIVE's deputy grants manager, who lives with 11 other family members in a tent pitched in the front yard of the house in which he lived that is owned by his father's cousin in Delmas, a suburb of Port-au-Prince. Baptiste and his family have lived in the red-and-white tent since the end of January, tapping the resources of the house but not spending any nights sleeping in the structure out of fear that it will fall down on them. Other WOCCU Haiti employees also share their tents with family members, meaning that as many as 150 people may be living in the WOCCU staff tents at any given time. Baptiste's house has been examined by Haiti's Ministry of Public Transportation and Communication, which categorized the house as safe to enter. However, the WOCCU employee and his family are still not comfortable with the idea that aftershocks or even another earthquake could bring the walls and ceiling down on them in their sleep. "The tent has no electricity or plumbing, and getting up to go to the bathroom in the middle of the night can be a nightmare," Baptiste said. "It's not comfortable, but comfort is not as important to us as our lives."

Canadas Central 1 CU net income up 275

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VANCOUVER, B.C. (3/23/10)--Central 1 CU, the central financial facility and trade association for credit unions in British Columbia and Ontario, reported its net income jumped 275% last year to $99.9 million from $26.6 million in 2008. Assets rose 29.2% to $11.1 billion at year-end 2009 from $8.6 billion the same period a year ago. The gains reflected significant growth in the liquidity of Central 1's member credit unions, Central 1 said in a press release. Return on equity was 19.6%, compared with 7.7% in 2008. "In the first full year of combined operation since the B.C. and Ontario credit union centrals merged in mid-2008, Central 1 performed very strongly," said Don Rolfe, president/CEO. "These results were achieved in a climate of market volatility and difficult economic conditions," he added. Central 1 took advantage of opportunities arising from an unusual combination of events in the financial markets, including declining interest rates and shrinking credit spreads. This resulted in mark-to-market gains in its holdings of financial instruments, which are mostly government and high-grade corporate bonds. The strong results for the year enabled Central 1 to pay a dividend of 10% on top of regular dividends of 2%. After taxes and dividends, Central 1 transferred $74 million into retained earnings, which totaled $262 million at year-end. It has a total capital of $551 million and a ration of regulatory capital to risk-weighted assets of 34.5%.

NuUnion Detroit Edison CUs to merge April 1

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LANSING, Mich. (3/23/10)--Regulators have approved the merger of NuUnion CU, Lansing, Mich., and Detroit Edison CU (DECU), Plymouth, Mich. The newly created Lake Trust CU will launch April 1. The Federal Trade Commission and the Department of Justice gave their necessary approval for the merger earlier this month to make sure--because of its size--that it didn’t violate federal anti-trust laws ( March 19). Also, approvals were granted by the National Credit Union Administration and Michigan’s Office of Finance and Insurance Regulation. The merger will create the fourth-largest credit union in Michigan--at $1.5 billion in assets--and positions the credit unions to serve both memberships with increased access to branches and ATMs, a stronger capital position and enhanced products and services (News Now Feb. 23). “The Lake Trust name is representative of the new organization which will stretch from Lake Michigan to Lake Huron and Lake Erie,” said Steve Winninger, NuUnion president/CEO. He will serve as the new credit union’s CEO, while DECU CEO William J. Thiess will become president.

Minn. bills would allow state deposits in CUs

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ST. PAUL, Minn. (3/23/10)--The grassroots swell of efforts to "Move Your Money" to smaller, local institutions has reached the Minnesota Legislature, which is considering several bills that would direct more public institutions' deposits into credit unions and community banks. HF 3205, authored by Rep. Tim Mahoney (DLF-St. Paul), would give credit unions and local community banks a price advantage in bidding to win deposits from state agencies. He plans to add a requirement that banks and credit unions would need assets of $2.5 billion or less to qualify (Minneapolis/St. Paul Business Journal March 19). The bill would mandate that state agencies discount bids from small, local institutions by 10% to even the playing field with large institutions (Finance & Commerce Marcy 19). The Minnesota Credit Union Network (MnCUN) is supporting the measure. "Minnesota credit unions support the bill because they welcome opportunities to partner with the state," said Kristina Wright, vice president of communications at MnCUN. "They are eager to work with legislators to investigate additional ways that more Minnesota financial institutions can have the opportunity to hold public funds," she told News Now. Mahoney also is proposing a resolution expressing the House's support for small community banks and credit unions, and creating a study to determine the benefits of directing public deposits to those institutions, said Finance & Commerce. Credit unions and community banks already hold 268 of the state's 397 small accounts, ranging in size from $5,000 to $50,000 from state parks, correctional facilities and deputy registrars. Local branches of Minneapolis-based U.S. Bancorp and San Francisco-based Wells Fargo & Co. have the rest, said the Business Journal. Small financial institutions in Minnesota are seeing some of the effects from the Move Your Money movement started by the Huffington Post, which advocated moving money out of large banks to local institutions because of behavior that led to the banking crisis. "We're seeing that movement gaining traction here, especially among young people, which has been a demographic that we've had a hard time reaching," Mark Cummins, MnCUN president/CEO, told Finance and Commerce. Credit unions saw a 10% increase in deposits and a $1 billion increase in loans to consumers and small businesses. Kyle Markland, CEO of St. Paul-based Affinity Plus FCU said new members are looking for relief from broad, complex menu of fees and penalties on deposit accounts and credit cards that are a major revenue source at big retail banks. They also are looking for more reliable lenders, he told the publication.

N.J. municipal deposits bill reintroduced

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TRENTON, N.J. (3/23/10)--Legislation that would amend New Jersey’s Government Unit Depository Protection Act to permit counties, school boards and municipalities to use credit unions as depositories was reintroduced by State Senate President Steve Sweeney (D-3), the state’s highest ranking legislator. Republican Conference Leader Bob Singer (R-30) has again signed-on as the prime co-sponsor, said the New Jersey Credit Union League (The Weekly Exchange March 15). Sweeney originally introduced the legislation in the 2008-2009 legislative session when he was majority leader. He also authored legislation enacted last year that allows the state’s director of investments to invest state cash management and pension funds in federally insured instruments offered by banks and credit unions. State Rep. Fred Scalera (D-36), together with Assembly colleagues Uprenda Chivukula (D-17), John Wisniewski (D-19) and five co-sponsors reintroduced the legislation in the state Assembly in January.

FBI reports 490 crimes at CUs during 2009

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WASHINGTON (3/23/10)--Of the 6,062 crimes reported to Federal Bureau of Investigation (FBI) by U.S. financial institutions last year, credit unions reported 490--including 470 robberies, 14 burglaries and six larcenies. The FBI’s report of 2009 bank crime statistics is not a complete statistical compilation of all bank crimes that occurred in the U.S, because not all bank crimes are reported to the FBI, it said. Loot taken totaled nearly $46 million in 5,514 (91%) of the 6,062 incidents. Total loot recovered after the incidents was slightly more than $8 million. The most popular day for crimes was Friday, and the most popular time period for them was 9 a.m. to 11 a.m. Some of the top methods used in the crimes were:
* Demand note used--3,269; * Firearm used--1,619; * Handgun--1,566; * Other firearm--56; * Other weapon used--105; * Weapon threatened--2,553; and * Explosive device used or threatened--193.
The crimes resulted in 140 injuries. Those most often injured were employees (79), perpetrators (27) and customers (21). All the deaths reported (21) in the act of the crime were perpetrators. Of the 94 incidents in which hostages were taken, 67 of the hostages were employees and 22 were members/customers. The top U.S. regions in which crimes (robberies, burglaries, larcenies and extortions) were committed were the South (2,048) and the West (1,793). To view the full FBI report, use the link.

No merger for Wyoming Colorado associations

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DENVER, Colo. (3/23/10)--The Credit Union Association of Colorado (CUAC) and the Credit Union Association of Wyoming (CUAW), which had explored a formal merger for the past year, will continue to maintain separate associations. The Wyoming association membership voted 10-12 to not support a formal merger. As a result, the Colorado association has suspended a vote among Colorado credit unions. The boards and management team of the associations will continue working together to ensure the needs of both states' credit unions and will collaborate to determine the best way forward in the coming weeks. "While Wyoming credit unions decided not to move forward with a formal merger, we have had a long and successful relationship with Colorado," said Marsha Tynsky, chairwoman of CUAW, "and as chairwoman, I look forward to charting a future course for our two associations." In 1998, the Colorado association began managing the day-to-day affairs of the Wyoming association. In 2003, Colorado purchased Wyoming's league service corporation. For the past few years, the two states joined their credit union foundations, and engaged in cooperative ventures in branding and marketing, payday loan alternatives, and the Credit Union Resource Group, a credit union service organization serving small credit unions. "Even though our two associations will remain separate organizations," said Mike Williams, vice chairman of the Colorado association, "we look forward to continuing our collaboration with Wyoming for the benefit of credit unions in both states."

Collections credit lawsuits up loan mods lower scores

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WASHINGTON (3/22/10)--Consumers' debts and foreclosures have prompted the number of lawsuits involving collection and credit issues to increase 53% during fiscal 2009. And in a separate trend, consumers trying lower their debt under the government's mortgage assistance program are learning one result of their participation is a lower credit score. First, the lawsuits. According to the Administrative Office of the U.S. Courts, suits filed by individuals or state regulators under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) climbed to 6,463 during the fiscal year ended Sept. 30 ( March 19). However, the numbers were lower than the record counted for the 2009 calendar year by WebRecon LLC. The research firm tallied 8,287 FDCPA cases alone. The courts' count may not have properly categorized all FDCPA and FCRA cases, the firm said. A significant number of the suits were against credit reporting agencies. The numbers of foreclosures brought in federal courts under the Truth-in-Lending Act tripled to 1,517 for the fiscal year, according to the courts' data. Now, the loan modifications. According to housing counselors in New York and Michigan, borrowers who make their payments on time but sign up for the Obama administration's "Making Home Affordable" program are finding their participation knocks as much as 100 points off their credit score (The New York Times March 19). Their scores take a dive when they enter the $75 billion program's trial period in which they must make at least three payments. Delinquent borrowers have damaged their scores already. But credit agencies maintain that a loan modification request signals to them that the homeowner, even if managing to pay bills, is having difficulty. The problem is more serious for those who enroll in the Obama program but are then ruled ineligible. Homeowners accepted into the program and who succeed in getting their loans permanently modified will see lenders updating the credit bureaus. Their new status neither helps nor hurts their score. If they continue to pay bills as agreed--they will see the score increase over time, one agency told the Times.

U.K.s co-opCU bill receives Royal Assent

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LONDON (3/22/10)--A key British credit union bill that would allow credit unions to serve more people left underserved by the global financial crisis and to mobilize secondary capital has received Royal Assent, according to the World Council of Credit Unions (WOCCU). Parliament announced the Royal Assent for the Cooperative and Community Benefits Societies and Credit Unions Act Thursday. Royal Assent--the monarch's agreement to make the bill into an act--is considered a formality but is required before the bill can become law. Dave Grace, WOCCU vice president of association services, has worked the past 18 months with the United Kingdom's (U.K.) working group and the Association of British Credit Unions Ltd. on drafting the bill. The U.K.'s Financial Services Authority (FSA), which regulates the country's credit unions, took steps to broaden financial cooperatives' abilities in recognition of their relatively stable position during the banking crisis, Grace said. The law will allow credit unions to serve a wider swath of consumers, issue interest-bearing shares, and gain access to alternative capital. Lawmakers also are increasing capital and liquidity requirements for the nation's 500 credit unions to provide greater protection for consumers, said WOCCU in a news release about the working group's proposal in November. Proposed regulations will raise the level of governance standards, increase minimum liquidity requirements for credit unions and raise capital-to-asset ratios for smaller institutions. The new regulations would be phased in over a two- to three-year period.

Governor signs FI-oversight bills in Wash. state

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OLYMPIA, Wash. (3/22/10)--Washington Gov. Chris Gregoire signed two bills designed to strengthen the regulation of the state-chartered credit unions and banks. "This legislation updates our existing laws and allows us to more effectively fulfill our mission as regulators," said Scott Jarvis, director of the Washington State Department of Financial Institutions (DFI). "In these times--more so than in just about any outside the Great Depression--effective financial regulatory oversight is crucial to maintaining sound financial services." Linda Jekel, director of DFI's Credit Union Division, noted that "While DFI has not had to close a credit union yet during the existing financial crisis, the credit union bill addresses some potential shortcomings in Washington's Credit Union Act." She said the bill "provides DFI with an improved regulatory toolbox in order to protect consumers' financial interests." For credit unions, EHB 2830 would:
* Add tools to permit stronger regulatory oversight and earlier enforcement of troubled credit unions; * Update and streamline early regulatory action for troubled credit unions by providing for early regulatory intervention when a credit union becomes undercapitalized; * Strengthen fiduciary duties of board members; * Give DFI authority to suspend credit union directors for harmful activities; * Authorize DFI to fine credit unions for material violations of credit union act or rules; and * Modernize DFI's conservatorship and receivership provisions for credit unions.
A similar bill, EHB 2831, addresses banks. It gives DFI enforcement powers over bank holding companies; improves the Division of Banks' authority when institutions are less than well-capitalized; brings DFI's enforcement authority in line with federal standards for prompt corrective action for institutions that are less than well-capitalized; and clarifies factors the division uses in closing an unsafe and unsound bank.

Filene report CUs inspire more loyalty

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MADISON, Wis. (3/22/10)--Credit unions consistently and significantly outperform banks in key areas including: quality of support, value, ease of conducting business and products and services, according to the Filene Research Institute. In Filene’s latest report, credit unions continue to improve in their Net Promoter Score (NPS), a loyalty measure for increasing member retention, repurchase and referral. Exploring Ongoing Member Loyalty: Net Promoter in Credit Unions shows not only that credit unions often engender more loyalty than regional and national banks, but how many of them do it. The report found that credit unions perform better when they measure loyalty and use the findings to drive change to improve the member experience. The report highlights case studies to illustrate how credit unions use Net Promoter to gain market share by focusing on what is most important to members. The authors, Dr. Laura Brooks, vice president of research and consulting at Satmetrix, and Michelle Bloedorn, executive director of the Member Loyalty Group, explore how credit unions create customer loyalty and deploy best practices by measuring NPS, which weighs a company’s promoters against its detractors. The report provides credit union case studies and data from high-performing credit unions. Among the findings:
* Credit unions outperform banks in quality of member service and support, and ease of doing business; * Credit unions that track their member feedback and proactively communicate that to employees influence behavior and improve performance; and * Members who are more likely to recommend the credit union to colleagues and friends are also more likely to hold more accounts, stay with the credit union longer, and be more profitable. Credit unions can increase members’ likelihood to recommend by identifying important member touch points (online, retail, contact center) and then improving these processes to exceed member expectations.
Brooks and Bloedorn say there is still room for credit unions to improve. The best-in-class credit unions used Net Promoter to differentiate their member experience and committed the time and resources necessary to act on the feedback and hold their employees accountable. Exploring Ongoing Member Loyalty: Net Promoter in Credit Unions is available free to members of the Filene Research Institute and is available for purchase by non-members. For more information, use the link.

ITimeI magazine reports Bethpages tips for small-biz

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BETHPAGE, N.Y. (3/22/10)--A Bethpage FCU executive told Time magazine that there are some alternatives business owners should consider when putting up their personal assets to get a loan from a financial institution. Every year, millions of business owners put their personal assets on the line for loans, according to Time (March 18). If the business doesn’t thrive, then the owners are in danger of losing their assets. The article’s author, Gigi Berman, told the story of her husband, whose credit line was cut by his bank. The bank told him and his business partner they had nine days to pay back a seven-figure amount the bank had loaned him. To avoid situations like these, Bethpage (N.Y.) FCU senior vice president Michele Dean suggested pledging accounts receivable and asking for a guarantee that gets smaller each year as borrowers build a credit history. “There are other bargaining chips in lieu of or to reduce the personal guarantee that banks may not go out of their way to reveal,” she told the magazine.

Sentencing of U.S. Mortgages McGrath delayed to May

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NEWARK, N.J. (3/22/10)--A U.S. District Court in New Jersey has again postponed the sentencing date of Michael McGrath, president of the former U.S. Mortgage/Credit Union National Mortgage company, for the fraud of nearly $140 million from credit unions and Fannie Mae. The sentencing date is reset for 10 a.m. ET on May 18 before Judge Katherine S. Hayden, according to the criminal docket for the case. At that time Hayden will determine whether to accept the recommendation for 12 1/2 to 20 years in prison made in a plea bargain. McGrath also is to pay restitution (News Now Jan. 11). McGrath pleaded guilty in June to one count of mail and wire fraud and one count of money laundering conspiracy in defrauding $139.6 million from 28 credit unions, Fannie Mae and others (News Now June 12). McGrath admitted to conspiring with others from January 2004 to January 2009 to fraudulently sell credit union loans and use the proceeds to finance U.S. Mortgage's operations and investments for himself and his company. He also admitted to diverting funds that should have been paid to credit unions for mortgage loans sold without authorization to Fannie Mae to help offset bad investments in mortgage-backed securities, according to prosecutors (Reuters June 11). Both U.S. Mortgage and Credit Union National Mortgage, which were based in Pine Brook, N.J., filed for Chapter 11 bankruptcy during February 2009 in Newark. They listed more than $200 million in debts to Fannie Mae and the 28 credit unions. The bankruptcies have led to several lawsuits by credit unions seeking to recoup losses against Fannie Mae and against insurance companies. McGrath pleaded guilty in June. Since then five sentencing dates have been set and postponed: Oct. 1, 2009; Nov. 30, 2009; Feb. 1; March 22; and April 19. On Thursday the court reset the date for May 18.

Arizona league names legislators of the year

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PHOENIX (3/22/10)--The Arizona Credit Union League hosted its annual State Governmental Affairs Conference March 9. The league also honored State Rep. Nancy McLain (R-3), House Banking and Insurance chairman, with the league’s Legislator of the Year Award.
Click to view larger image Arizona Secretary of State Ken Bennett provided a “Tissue Box Guide” to the state budget during the Arizona Credit Union League’s State Governmental Affairs Conference in Phoenix March 9. (Photo provided by the Arizona Credit Union League)
The conference was held at Arizona Central CU, Phoenix. Speakers and topics included:
* Sen. Debbie McCune Davis (D-14), Legislative Update on Payday Lending; * Christian Palmer, editor of Yellow Sheet/Capitol Times, Media in Advocacy; * Sen. Barbara Leff (R-11), 2010 Senate Update; * Arizona Secretary of State Ken Bennett, “Tissue Box Guide” to the Arizona state budget; and * Arizona Treasurer Dean Martin, Arizona state budget update.

CU System briefs (03/19/2010)

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* FEDERAL WAY, Wash. (3/22/10)--Washington State Rep. Sharon Tomiko Santos (D-37) Thursday was presented her 2009 Desjardins Award at a
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gathering in Tacoma of Washington credit union leaders and members of the state's financial education community. Because of legislative duties, Santos had been unable to accept her award during the Credit Union National Association Governmental Affairs Conference in Washington, D.C. last month. The award recognizes Santos' seven years of legislative leadership and innovation in the area of financial literacy. ( See News Now March 3 by using the link). "I could not do anything if I did not have the strength of the partnerships around this table. I am appreciative of the Washington Credit Union League, and obviously the Credit Union National Association for recognizing our work," Santos said. Gov. Chris Gregoire sent a letter of congratulations to be read at the gathering, and the group learned Santos was recognized in a proclamation by Rep. Adam Smith that was read into the Congressional Record. Santos is shown receiving the award from John Annaloro, left, league president/CEO, while her husband Bob looks on. (Photo provided by the Washington Credit Union League) ... * HIGHTSTOWN, N.J. (3/22/10)--The New Jersey Credit Union League's
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Cooperative Advertising campaign kicked off its latest efforts to reach new audiences with the credit union message (The Daily Exchange March 19). On March 15, the campaign--dubbed Ad Co-op--began appearing at 28 train stations throughout the state. Bus advertisements also can be found inside busses in Bergen, Hudson, Union, Middlesex, Mercer, Monmouth, Camden, Burlington and Atlantic counties. Shown here are ads in the Newark train station. Also, in today's issue of The New York Times, a special credit union advertorial will feature Ad Co-op advertising and an interview with league President/CEO Paul Gentile. (Photos provided by the New Jersey Credit Union League)

Environmental homes hitting mortgage wall

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HOT SULPHUR SPRINGS, Colo. (3/19/10)--A credit union in Hot Sulphur Springs, Colo., is finding that members who build unique environmental homes have trouble getting loans because they can't get appraisals. Earth-friendly homes made of earth, tires, concrete and recycled trash "have been no match for the new resolve of the banking industry after the housing bust," according to The Wall Street Journal (March 18). Banks are picky about examining sales of comparable homes before deciding whether and how much to lend. This leaves the odd-duck homes, no matter how well built, in a lurch. Case in point: Credit union members Jon and Laura Hagar are trying to refinance the line of credit into a long-term fixed-rate mortgage for their rural Colorado house made of 17,000 old tires, said the Journal. They stacked tire bales and plugged the gaps with cans, bottles, plastic plates and other junk, which was then covered with concrete, clay and stucco. In 2007, to pay for the construction, the Hagars took out a $240,000 line of credit from Red Rocks CU, Highlands Ranch, Colo., said the Journal. The appraiser at the time couldn't find a comparable home that had been recently sold but said the house would be valued at $500,000, based on a recently sold straw-bale home and other houses in their area. They moved in during 2008. When interest rates dived last year, the Hagars tried to refinance. However, last February, the credit union's loan officer, Bill Schimel, said they had hit a wall. No home built from tire bales had been sold recently in the state. Lenders said they can't value the property, which meant a regular mortgage was out of the question. Red Rocks CU Vice President Don Arkell is still looking for a way to refinance the Hagars' loan by testing the secondary market, but he told the Journal the house is so unusual he may not be able to sell the loan to investors. In that case, the credit union would have to keep the loan on its own books. That situation doesn't set well with regulators concerned about the health of small financial institutions. Red Rocks is focusing on making loans that would see easily if it needed to raise cash. Arkell told the Journal the situation is bleak for people in properties that are hard to value.

Texas CUs to develop small loans for modestlow incomers

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DALLAS (3/19/10)--The Texas Credit Union League is working with REAL Solutions-designated credit unions in the state and the National Credit Union Foundation (NCUF) to develop a small loan product geared toward low- and moderate-income borrowers. The program will be launched March 30. "Our goal is to get more money in the hands of the borrower," said Natasha Melugin, the league's REAL Solutions program director, noting that the short term loans will be affordable for low-to-moderate income Texans. The loan product, currently available only at participating REAL Solutions credit unions, includes:
* An interest rate capped at 18% instead of up to 400% annual interest rate charged by predatory lenders; * The ability to pay back the loan in installments up to 90 days instead of within one to two weeks required by payday lenders; * The ability to build a positive credit rating using the credit union; and * A forced savings component, requiring the borrower to deposit 10% of the loan into a savings account.
More than 50 Texas credit unions participate in the REAL Solutions, a signature program of NCUF.

Pennsylvania governor signs robbery law

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HARRISBURG, Pa. (3/19/10)--Pennsylvania Gov. Ed Rendell has signed a law that establishes robbery of a financial institution as a second degree felony regardless of the method used to commit the robbery. The Pennsylvania Credit Union Association (PCUA) supported the measure, which was introduced each session since 2005 by state Sen. Mike Waugh (R-York) (Life is a Highway March 18). Bank robbers often make threats verbally or with notes under the assumption that their crime will be considered less severe without a weapon, Waugh said. The new legislation's goal is to deter bank robberies. PCUA applauded the General Assembly and the governor's actions, saying that many credit unions throughout the state have experienced an increase in robberies. "Bank crime [experts list] Pennsylvania as third behind California and Texas in the number of bank robbery occurrences," said Christina Mihalik, vice president of governmental affairs. "Increasing state penalties for this crime will work to make financial institutions a safer place for customers and employees and their communities."

CU to sell auto business attacked by dealers

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RACINE, Wis. (3/19/10)--Educators CU has decided to divest its auto dealership, Educators Auto and Lease, and is in the final stages of a purchase agreement. “We hope to finalize it in the next week,” Jim Henderson, Educators CU senior vice president, told News Now. The dealership is being divested after the Wisconsin Automobile and Truck Association filed a complaint in 2008 with the Wisconsin Office of Credit Unions (OCU), saying that the state’s credit union charter statute does not allow credit unions to offer the service. Educators said it believed the complaint was filed to prevent competition--each year, more than 700 individuals purchase used vehicles from the credit union (News Now Nov. 4, 2008). The OCU initially ruled that the State of Wisconsin Credit Union Statutes allowed credit unions to only lease cars, not sell them. The credit union appealed the ruling, and had 18 months to have the law clarified or divest the business. The credit union worked with state legislators to add an amendment to the state budget bill that would allow the credit union to continue its business, but it was vetoed by Gov. Jim Doyle. The credit union then looked into a separate bill on the matter, and while legislators were more than willing to work on it, after talking to the governor’s office, Educators realized that it had no desire to change the law, Henderson said. With the sale of the business in process, Henderson said he doesn’t expect the business to undergo any material changes after the purchase. The new owner, Tim Stark, has said he plans to keep the program the same. The dealership offered consumers no-haggle pricing; a 60-day safety net, which covers the cost of most mechanical repairs for two months after the purchase; and a three-day return policy. The goal of Educators’ auto business had always been to provide consumers with a no hassle car buying experience, and help them find the right car for their needs instead of just selling them a vehicle, Henderson said. Stark currently manages the dealership and will rent the 100-car facility from the credit union. The entire dealership staff will become his employees (Journal Times March 18). “We’re not totally satisfied, but happy the program is continuing,” Henderson said. “The new owner is planning to keep it the same ... and we think it’s going to be successful for him, too.”

Vermont interchange amendment would hurt CUs

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MONTPELIER, Vt. (3/19/10)--An amendment to Vermont Senate bill S.138 has brought the controversy over merchant plastic card fees to the statehouse, and it would be a “disaster for credit unions,” said the Association of Vermont Credit Unions (AVCU). Prior to Tuesday’s press conference announcing the amendment, S.138 had primarily dealt with many of the same issues which the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 already addressed at the federal level (NewsLines Express March 19). Those provisions of the bill were removed, leaving only the amendment offered by the Vermont Grocers Association and Vermont Retail Association. The bill seeks to reduce fees that merchants pay to plastic card issuers such as credit unions, and networks and processors. It also seeks to allow merchants to disregard the rules of the credit card networks; rules that, in effect, ensure that a credit union debit card is honored and treated exactly the same way as a debit card issued by a large bank. Both sides of the amendment have already drawn national attention and received support from beyond Vermont’s borders, AVCU said. The Merchant Payments Coalition, which is backed by giant retailers such as Wal-Mart, is supporting the position of the grocers and retail associations. The credit union position--that this potential legislation would severely restrict consumer choice and damage small businesses--is supported by the Electronic Payments Coalition and the Credit Union National Association (CUNA). Select small business owners claiming that the card processing fees they pay every month are driving them out of business joined four state senators to speak about the proposed amendment to S.138 at Tuesday’s Statehouse press conference. They said the fees are confusing, unfair and “abusive.” “This legislation aims to help the Vermont consumer and store owner by prohibiting these abusive practices,” said Senate President Pro Tempore Peter Shumlin. AVCU President Joe Bergeron disagrees. “This amendment as proposed would have a significant negative impact on the very entities it seeks to help … Vermont consumers and small businesses,” he said. “And it would be a disaster for credit unions that are trying to provide the growing variety of card payment options their members demand.” Merchants are seeing rising costs for accepting credit and debit transactions because the sheer volume of these payments has grown significantly in recent years, AVCU said. With the decline of checks and growth of plastic, the responsibility for guaranteed payment has also shifted from the merchant to the card issuer. “Credit unions and other card issuers must absorb the costs of data breaches and fraud over which they have little control,” Bergeron said. “When a purchase is made with a fraudulent card, the merchant gets paid but the credit union takes the loss. Interchange provides help in offsetting a fraction of these ever-increasing costs.” Although the senators have the best interests of consumers and small business owners at heart, the proposed amendment would have unintended consequences that only those who are intricately familiar with card payment systems fully understand, Bergeron added. Vermont merchants now benefit from participating in a national marketplace, and state laws in this area could change that. Vermont merchants could discriminate against credit union-issued debit and credit cards, effectively harming credit unions and their members who depend on their debit cards and credit cards. Customers of Vermont businesses could face unknown circumstances each time they sought to use a card with a Vermont business, diminishing the usefulness of debit and credit cards to the consumer. “The plastic card payment system is a complex arrangement of issuers, processors, and data networks,” Bergeron said. “While we are not unsympathetic to rising small business costs, the solution needs to be studied in greater depth to ensure that this complex system remains equitable and fair for all of its component parts. We’ve already provided significant testimony and education to the legislature in this area and credit unions will continue to do so whenever asked.” CUNA opposes legislation that would affect interchange fees as such action would adversely limit consumer options, competition and technological innovation.

Arizona league applauds payday lenders defeat

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PHOENIX (3/19/10)--An Arizona State Senate committee Tuesday voted down a payday lending industry-sponsored measure that would have indefinitely continued payday lenders’ exemption from state laws that limit interest on loans to more than 36% a year. The move was applauded by the Arizona Credit Union League. The Senate Appropriations Committee killed the measure on a 5-3 vote. The exemption, approved about 10 years ago, expires June 30 ( March 17). Austin De Bey, Arizona league vice president of governmental affairs, was at the Tuesday hearing. “Arizona’s current payday lending model works against the credit union philosophy of ‘People Helping People,’” he told News Now. “As we began to see more and more members needing help after falling victim to the debt trap, it became time for the league and member credit unions to tell our legislature the ‘truth’ about the product. “Arizona credit unions stepped up once again and played a key role in defeating the latest attempt to remove the sunset date,” he concluded. “Our position is that credit unions see the harmful effects these loan products have on our members,” the league said in an e-mail to News Now. “We are often times the ones that are left to pick up the pieces after a member has fallen victim to a payday lending debt trap. The voters spoke in 2008 and it is time for the industry to either operate under the 36% usury cap or leave the state of Arizona.” Payday lenders were allowed to operate and had a special carve out to charge triple-digit interest rates starting in 2000, said the league. Arizona’s usury cap is 36% for all other lenders. When the law was created, lawmakers put into place a sunset date for 10 years after the law’s effective date. The sunset date is July 1. In 2008, the payday lenders attempted to circumvent the legislature with a voter protected initiative that would remove the sunset date, the league added. The campaign cost them $13 million. At that time, the Arizona league joined the opposing campaign, “No on Prop 200.” The league said payday lenders gave a misleading message that the law would reform the industry, when in truth it would allow payday lenders to continue to charge a 391% annual percentage rate. The proposition was defeated by a vote of 60% to 40% in the 2008 election, the league said. The league joined Arizonans for Responsible Lending, a coalition to oppose the removal of the sunset date again in 2010, and through its grassroots and lobbying efforts it was able to help the proposition.

BizKid aired on 99 of PBS stations

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FEDERAL WAY, Wash. (3/19/10)--BizKid$, the youth-focused and credit union-funded financial education show, is airing on 99% of PBS stations. The show began filming Season Four in January and has been shown on 340 of the nation’s 343 public television stations, including 74 of the top 75 markets. Episodes have been aired more than 70,000 times since the show first aired in January 2008, according to the Washington Credit Union Foundation. Many stations also created projects in their communities in partnership with area credit unions and their schools to extend the educational impact of the series, said Jamie Hammond, show executive producer. “This gives credit unions more face time with young adults,” added John Annaloro, foundation president. “This is a highly sought-after demographic, who will be the future consumers in the years ahead. Teaching them about the virtues of thrift and entrepreneurship, and linking this message to credit unions is so powerful for our movement.” Fundraising efforts for the new season are ramping up, with a goal to raise $1.3 million in the credit union community. The production team hopes to get 65 episodes, or five full seasons, at which time the show can run on a daily basis nationwide. The foundation manages the Biz Kid$ project. The show is underwritten by a coalition of America's Credit Unions, comprising more than 150 credit unions, credit union foundations and other supporting organizations. The largest funder is the National Credit Union Foundation. A new donation recognition system also was recently implemented so contributors will receive thank-you gifts for supporting the show. BizKid$ also has been invited by the New York Stock Exchange to ring the opening bell on April 28 to celebrate National Financial Literacy Month. Credit union representatives can be part of the ceremony.

CU System briefs (03/18/2010)

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* COLORADO SPRINGS, Colo. (3/19/10)--Ent FCU has launched its first free iPhone application--an Ent Service Center and ATM Location Finder--on iTunes. The Colorado Springs, Colo.-based credit union's members with an iPhone or an iPod touch can use the Ent Location Finder to find the nearest Ent Shared Branch, Ent ATM or CO-OP Network ATM throughout the U.S. "Unlike text-based locator tools and Web page listings, the iPhone's GPS functionality finds the closest locations automatically, eliminating the need to know their current ZIP code or nearest cross street," said Victoria Selfridge, director of marketing. The application displays the closest 18 ATMs and/or Service Centers, connects directly to Google Maps for driving instructions, and displays the location name, hours of operation and unique additional member services for each Ent Service Center ... * RICHMOND, Va. (3/19/10)--Dorothy J. "Dot" Hall, retired president of Virginia CU, Richmond, died Tuesday at her home in Hanover, Va. She was 79. She joined the credit union in 1957 as a bookkeeper and retired as president in 1999 after 42 years. She became treasurer of the board and the general manager of the credit union in 1972. Her title was changed to president in 1986. When she began working for the credit union, it had 2,500 members and less than $1 million in assets. When she retired, it had 123,000 members and more than $600 million in assets, and E. J. Face Jr., commissioner of the State Corporation Commission Bureau of Financial Institutions, noted her efforts as "an inspiration to her board, the staff of the credit union, and perhaps most important of all, to the membership of the credit union." "For many people, Dot Hall was the credit union," said Jane Watkins, who succeeded her as president/CEO. Hall also served as president of the Richmond Chapter of the Virginia Credit Union League, as a league director, and as a national director from Virginia ...

WOCCU Bolivia program expands service to rural areas

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LA PAZ, Bolivia (3/19/10)--World Council of Credit Unions’ (WOCCU) development program in Bolivia--a three-year-plus financial sector support program--ends March 31 after increasing financial access for Bolivia’s rural poor.
Click to view larger image World Council of Credit Unions (WOCCU) Bolivia Project Director Rolando Salazar speaks at the inauguration of the Center for Economic Initiatives Promotion, a microfinance provider in Santa Cruz that received funding from WOCCU's Rural Financial Expansion Grant program.
To engage Bolivia’s entire financial sector and extend services to marginalized rural areas, the program set out in 2006 to administer grants to credit unions and microfinance institutions that piloted innovative outreach initiatives. The program was funded by the U.S. Agency for International Development (USAID). This and other sector-wide initiatives, which addressed the needs of credit unions and other microfinance providers, drew nearly 25,000 people into formal financial institutions, said WOCCU. Other accomplishments of the $2.4 million program included the development of microinsurance, the formation of an association of financial associations to foster the sector's development, widespread consumer information campaigns and the launch of Bolivia's first member-owned ATMs. The Ohio Credit Union League (OCUL) and Corporate One CU, Columbus, Ohio, also participated in the development of Bolivia’s credit unions through WOCCU’s International Partnerships Program. OCUL representatives taught their Bolivian counterparts about financial services delivery methods, documentation processes and advocacy techniques. Corporate One created software that allowed Bolivia’s credit unions to manage their own liquidity needs.
Click to view larger image Banco Sol used a grant from World Council of Credit Unions’ program to help fund three full-service mobile banking units with two tellers and a driver in the Bolivian cities of La Paz, Santa Cruz and Cochabamba. (Photos provided by World Council of Credit Unions) .
The program received a grant in April 2007 to fund grants for financial expansion initiatives to disadvantaged populations. Thirty proposals were submitted from a variety of institutions with 15 awarded a total of $284,000 through September 2009. Participant organizations attracted more than 15,000 new savers and nearly 10,000 new borrowers, exceeding the original aggregate goal of 10,000 new savers and 4,700 borrowers. Banco Sol, a microfinance institution awarded one of the grants, used its funds to launch three mobile banking units in La Paz, Cochabamba and Santa Cruz. Trucks converted into full-service branches now travel to populations with little or no access to financial services. Grant funds covered about 30% of the $60,000 startup cost for each unit and the rest was paid by the institution itself. Also in 2007, the program began a market analysis to determine whether microinsurance should be offered through credit unions and other participating institutions. In 2008, agreements were drafted and three policies were launched. By July 2009, five policies had been launched, including the first micro auto insurance policies to reach the Bolivian market. The micro policies are more affordable than traditional insurance policies, WOCCU said. WOCCU’s Bolivia program also helped credit unions increase the depth of their services by installing ATMs in rural and fringe urban areas.

N.Y. association-supported candidate wins Senate seat

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ALBANY, N.Y. (3/19/10)--New York State Rep. Jose R. Peralta (D-Metropolitan) won a special election for a Senate seat Tuesday that was vacated by ousted State Sen. Hiram Monserrate. Peralta was endorsed by the Credit Union Association of New York. Peralta has always had a clear understanding of the issues credit unions face, the association said. He co-sponsored credit union bills that would allow credit union participation in municipal deposits and the excelsior linked deposit program. “With his history of championing issues important to our credit unions, the members they serve and the communities they live in, we are happy that Peralta will now have a voice in our state senate,” said William J. Mellin, association president/CEO. Peralta was elected to the state assembly in 2002. As chairman of the banking subcommittee, he has expanded the number of branches serving low-income communities.

Educator of Year to get years mortgage paid by CU

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PORTLAND, Ore. (3/18/10)--Some lucky teacher will get a year's worth of mortgage payments paid by OnPoint Community CU in its Prize for Excellence Education Contest. The Portland, Ore.-based, $2.8 billion asset credit union is partnering with KGW-TV to honor local teachers and their schools. It will award nearly $45,000 to deserving private and public K-12 teachers and their schools. In addition to paying the mortgage for one year for the Educator of the Year, the credit union will pay $5,000 for that teacher's school for resources and supplies. OnPoint, which was founded by teachers in 1932, continues to recognize that strengthening local education is one of the best ways to build thriving communities. The annual contest "celebrates extraordinary teaching methods that spark enthusiasm and passion in students and their parents," said OnPoint President/CEO Rob Stuart. Also, a Community Choice winner will be selected and awarded $1,500 cash, plus $1,500 for the teacher's school. Three finalists also will be selected and will win $1,500 and $1,500 for each of their schools. Five semi-finalists will be given $250 each for their school. Throughout the campaign, KGW-TV will run promos to support the OnPoint Prize contest. The credit union also will post contest updates on Facebook and Twitter. Winners will be announced June 4.

Egan Mortgage apps wont rise til unemployment addressed

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MARLBOROUGH, Mass. (3/18/10)--The slide in U.S. home loans last week despite low mortgage rates suggests it will take some time before housing industry recovers. Dan Egan, president of three credit union leagues, agrees, reports Reuters (March 17). The Mortgage Bankers Association index of purchase and refinance applications fell last week by a seasonally adjusted 1.9% to a three-week low-- despite the fact interest rates were at the lowest in more than three months, said Reuters. Bad winter weather was a factor. After a burst of housing demand last year, "the continuation of the [federal] tax credit [for homebuyers] was supposed to spur continued sales into 2010, and it just doesn't seem at this point to have done that," Egan told the publication. He is president of the Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island. "Not only are people unemployed but people are concerned about future employment," Egan said. "Until that really gets addressed, I don't think we'll see a significant rise in mortgage applications." For the full article, use the link. lists 10 places not to use a debit card

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MADISON, Wis. (3/18/10)--There are 10 situations where consumers should keep their debit card in their wallet, according to Susan Tiffany, the Credit Union National Association's director of consumer periodicals, provides some of the advice. "You don't use a debit card online," Tiffany told the publication. Not using debit cards online was No. 1 on the list. Since the debit card links directly to a checking account, "you have potential vulnerability there," Tiffany said. The Fox Business Network (March 17) also picked up the article. Tiffany also gave advice on using debit cards in restaurants. Most lists warn against letting a credit or debit card out of sight at a restaurant, but restaurants are one of the few places where the consumer must let the card out of sight to use it. Avoiding such situations isn't workable. "The conventional advice of 'don't let the card out of your sight'--that's just not practical," Tiffany said. As for using the card at gas stations and hotels, Tiffany said it depends on the individual business. Some gas stations and hotels will place holds to cover customers who may leave without settling the entire bill. That means that even though the consumer bought only $10 in gas, the hotel can have a temporary banking hold for $50 to $100, Tiffany said. The practice isn't as noticeable if paying with a credit card but can be problematic for debit card users with just enough funds in the account to cover the purchase. The article said not to use debit cards in 10 situations. Use the link to access the list.

CU System briefs (03/17/2010)

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* TREVOSE, Pa. (3/18/10)--Luke Lukashunas, vice president of fraud security at TruMark Financial CU, Trevose, Pa., has been appointed to the executive board of the International Association of Financial Crimes Investigators (IAFCI). IAFCI, which has 4,300 members worldwide representing all levels of law enforcement, banking and retail businesses, works to eradicate fraudulent financial transactions, promote the exchange of criminal intelligence, and apprehend and prosecute lawbreakers. Lukashunas will serve his term until December. His responsibilities include overseeing IAFCI's internal communications, its computer network system, and recording minutes at board meetings ... * KANSAS CITY, Mo. (3/18/10)--Rep. Ike Skelton (D-Mo.) met with 25 Missouri credit union representatives at a roundtable meeting held at CommunityAmerica CU, Kansas City, on March 15. Skelton addressed the nation's economic state and listened to credit union concerns and issues, particularly with credit unions' member business lending cap, and regulatory structuring and overdraft protection. He noted that some economic sectors are improving or leveling off, and that unemployment is still lagging but things seem to be turning around. "We are a great country with a great past and a great future. Even with all of the challenges right now, we cannot forget that," he told the group. From left are Pat Yokely, CommunityAmerica; Shelton; Dana Alderman, River Region CU; and Rod Gruenberg, Community/America. (Photo provided by Missouri Credit Union Association) ...

CUs Beetle helping spread fin ed

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REXBURG, Idaho (3/18/10)--Beehive FCU, Rexburg, Idaho, is driving back in time and using a 1972 stretch Volkswagen Beetle to attract younger members to the credit union, according to local media. Beehive wants to help young people become more financially independent, said If credit union members are financially successful, then credit unions will be financially successful, Shane Berger, Beehive FCU CEO, told the news service. Parents have an obligation to teach their children financial responsibility, and so do schools, Berger added. The credit union is not trying to replace schools or parents, but rather is trying to supplement whatever children learn in school, he said. KPVI also interviewed Thomas Cottam, 18, who said that in high school, in a math class one day, he had a 15 minute lesson on finances. “That was about it,” he told the news service.

Iowa foundation awarded 165K for IDA program

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DES MOINES, Iowa (3/18/10)--The Northwest Area Foundation (NWAF) has awarded the Iowa Credit Union Foundation (ICUF) a $165,000 grant for its Credit Union Family Partnership Individual Development Accounts (IDA) Program. ICUF will use the award to expand its IDA program and increase the number of Iowa credit unions offering financial education and savings accounts for families with low incomes, including those serving Latino communities, said the Iowa Credit Union League. ICUF is one of six recipients to receive a NWAF grant, said Marybeth Foster, ICUF executive director. “This grant will help us to extend our outreach efforts to low-income Iowans through our IDA program and ultimately help them acquire long-term financial stability,” she added. IDAs are matched savings accounts where a participant’s savings are matched by a grant from another organization. The saver uses the matching funds are to purchase a specific asset--such as a home, starting or expanding a small business, paying for education or job training, or purchasing a vehicle to get to work. Participants must meet income guidelines and participate in financial education seminars. “The recent recession has hit communities hard all across the Northwest area, but its impact has been especially harsh for those who were already struggling to make ends meet,” said Kevin Walker, NWAF president/CEO. “This set of grants is designed to support vital asset-building work in urban and rural places, and to leverage support from other sources.” About $665,000 was awarded by NWAF to six organizations that have demonstrated their ability to leverage investments made in their work.

Public favor shines on CUs says Philly Trib

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PHILADELPHIA (3/18/10)--There has been a resurgence of people moving to credit unions over the past five years, the Philadelphia Tribune said Monday. “The past five years have witnessed an explosion of interest in what has come to be called ‘slow living’--the oldest and most recognizable branch being the slow-food movement,” wrote Christopher Moraff in an article titled, “Credit Unions Enjoying a Resurgence.” “As the name implies, the mindset involves embracing all things small and local while rejecting the large, corporate and impersonal,” he added. “Since the near-collapse of the economy in 2008 and the recession that followed, consumers are increasingly taking the same concept to heart when considering what to do with their money. The result: There has been a measurable shift of personal wealth from large, corporate banks into smaller community banks and credit unions. “Credit unions posted 2% membership growth in 2009, according to the Credit Union National Association (CUNA)--the fastest pace since 2001; and 22% of consumers polled by Zogby consider a credit union their principle bank,” Moraff wrote. The growth of credit unions is “impressive and encouraging,” Debbie Matz, chair of the National Credit Union Administration, told the paper. “The ‘flight to safety’ that landed new deposits at credit unions during the economic downturn continues,” she added. However, despite the credit union renewal, many people still don’t know that much about credit unions, Mike Wishnow, executive vice president of communications and public relations for the Pennsylvania Credit Union Association, told the publication. “The No. 1 reason people don’t join a credit union is eligibility; they simply don’t know they can belong,” Wishnow added. To read the article, use the link.

Filene seeks directors for online governance survey

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MADISON, Wis. (3/18/10)--The Filene Research Institute asks current and former credit union board members to participate in a study to measure the effectiveness of credit union governance. Respondents can access the 20-minute, online-only survey by using the resource link. The password is “filene.” The survey will be open through Wednesday. Filene and researchers at the Clarkson Centre for Board Effectiveness at the Rotman School of Management, University of Toronto, seek to identify current strengths and weaknesses of credit union boards and directors, and to highlight governance trends during the past five years. A report summarizing the findings will be available this summer to interested credit union system organizations. “Credit union governance is perhaps our most important topic for rigorous academic research right now,” said George Hofheimer, Filene chief research officer. “The coming years will be pivotal for credit unions and credit union leaders. Only by gathering feedback from diverse perspectives can we best understand the characteristics and needs of credit union boards and directors.” The research is supported by the Credit Union Executives Society.

NCUF grants 13K to assess Better Choice impact

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HARRISBURG, Pa. (3/18/10)--The National Credit Union Foundation (NCUF) approved a $13,000 grant so the Pennsylvania Credit Union Association (PCUA) can conduct a Better Choice Impact Assessment.
The National Credit Union Foundation approved a grant for the Pennsylvania Credit Union Association to assess Credit Union Better Choice. Pictured are, from left: Joe Wambach, executive director, Pennsylvania Credit Union Foundation and REAL Solutions project coordinator; and John Kebles, REAL Solutions project manager. (Photo provided by the Pennsylvania Credit Union Association)
The assessment will measure how credit unions offering Credit Union Better Choice transition users into mainstream products and services. It also will help PCUA and Pennsylvania credit unions improve the Better Choice program’s viability for financial support from the state Treasury Department. The project will quantify the amount of money saved by each borrower as compared to traditional payday loans. It also will measure how users build savings, improve their financial stability and become mainstream financial service users, said PCUA (Life is a Highway March 17). NCUF project funds will support data processing activities and continue the presence of a REAL Solutions coach. REAL Solutions helps consumers with alternatives to avoid high-priced payday loans. The grant will be implemented in May and is expected to last one year.

Media roundup Positive press for CUs continues

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MADISON, Wis. (3/17/10)--Credit unions popped up in the press this week--in articles ranging from helping small businesses in California and Michigan, to Suze Orman's advice on where to go for a credit card, to looking at credit unions for all banking needs, and even to The Wall Street Journal's description of credit unions as among the "winners" in the proposal advanced Monday by Senate Democrats to overhaul financial markets. The articles included:
* Michigan Gov. Jennifer Granholm's promotion of the Michigan Small Business and Technology Development Center Mid-Michigan which will offer a 10-week training session to foster entrepreneurship .Granholm said the Michigan Credit Union League has become a partner with the small business and technology development centers to provide as much as $43 million in small-business loans (The Morning Sun March 9). * A report about Mission SF FCU, a $7 million asset credit union based in San Francisco, which assisted Ernest East of Miz Lynn's Pies when the recession cooled sales of his sweet potato pies before the business' 10th anniversary. East ran from big banks to non-profit business loan programs for cash to tide him over. Mission SF FCU helped him get a loan for $6,500 with an interest rate he could handle, and helped him repair his credit rating. Since then, he has hired two employees, bought more equipment and added two store partnerships ( March 8). * A speech by financial advisor, author and TV host Suze Orman at Club Nokia in Los Angeles, in which she advised those with a credit card balance to transfer the balance to a credit union credit card. She noted the interest rate at a credit union caps out at about 18% while traditional cards rates can be as high as 28% (Whittier Daily News and San Gabriel Valley Tribune March 15). * An article advising readers to "look into options of local credit unions for your banking needs as many offer better rates on things like mortgages, savings accounts and checking accounts." One area "that big banks suffer in is they are simply too large," said the article (Red, White and Blue Press March 11). Many big lenders are unable to provide one-on-one service in a way that is helpful to the vast majority of customers because there are too many, the article said. * The Wall Street Journal's article on the draft bill of the financial market overhaul proposed Monday by Senate Banking Committee Chairman Christopher Dodd (D-Conn.). It noted: "Among the winners, community banks and small credit unions would be financially able to compete, for perhaps the first time, against large competitors reined in by new restrictions on capital, complexity and size" (The Wall Street Journal March 16).

CUs service reps respond faster than big banks

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WASHINGTON (3/17/10)--Credit unions and community banks respond to member-customers faster than big banks, according to a survey of the time it takes to contact a member or customer service representative via phone. Robert Rubin, CEO of Facilitas, a company that helps consumers switch to new financial institutions, and creator of, decided to measure how long it takes big banks, community banks and credit unions to route a caller to a service rep, he wrote in Huffington Post (March 15). The group called 75 banks, nine credit unions and five online banks each three times--in the morning, during lunch time, and at the end of the day. Callers conducted the calls from March 3 to March 15. The result is Time2Talk (T2T), the average time of the three phone calls, Rubin wrote. The findings:
* It took 36 seconds longer to speak to customer services reps at big banks than at credit unions and community banks. Rubin noted there were many examples where pressing zero didn't connect to an operator. * Roughly 76% of credit unions and community banks managed to route the caller to a service rep in under two minutes. Only 56% of the big banks managed to do so. Rubin said under two minutes is a "reasonable expectation." * Twenty-nine percent of the credit unions and community banks routed the callers to a rep in under 30 seconds. "No big banks did," said Rubin.

Robbery suspect pleads guilty in shooting member

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KANSAS CITY (3/17/10)--A man pleaded guilty Monday in a Kansas City federal court to robbing CU of Johnson County, Lenexa, Kan., and shooting a 71-year-old member who pursued him in 2009. Nicholas E. Kamphaus, 26, pleaded guilty to one count of armed bank robbery, one count of discharging a firearm during a crime of violence and one count of attempted murder of a witness, said federal authorities (The Kansas City Star via Kansas March 16). The member, who was shot several times, survived (New Now April 27). Kamphaus entered the credit union on March 28, 2009, jumped the counter, took money from tellers and fled with an undisclosed amount of cash, the newspaper said. Once he left the building, Kamphaus was spotted by an elderly man who trailed him. A short time later, police found the man in his minivan with the hazard lights flashing, the paper said.

TJX-hacking co-conspirator sentenced to 46 months

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BOSTON (3/17/10)--A former Barclays information technology programmer was sentenced to 46 months in prison by a court in Boston for his role in several data thefts, including a big security breach disclosed in January 2007 at retailer TJX, based in Framingham, Mass. Humza Zaman also was sentenced to three years’ supervised release and levied a $75,000 fine after pleading guilty to one count of conspiracy last April ( March 15). The 33-year-old Zaman is believed to have assisted Albert Gonzalez, head of the criminal ring responsible for the TJX hacker attacks, by laundering up to $800,000 ( March 16). Gonzalez is facing a minimum sentence of 17 years after pleading guilty to a series of attacks on several firms--including TJX and Heartland Payment Systems. The data breaches affected thousands of credit unions, whose members’ credit and debit cards were compromised. Zaman laundered between $600,000 and $800,000 for Gonzalez, using ATM cards linked to bogus accounts to withdraw and repatriate Gonzalez’ funds from a bank account in Latvia, according to court documents (

MBLs in IMotley FoolI Boston Milwaukee spotlight

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MADISON, Wis. (3/17/10)--Credit unions’ lending to small businesses and the bill to increase credit unions’ member business lending cap were recently in the spotlight of three publications across the nation. U.S. Rep. Paul Kanjorski (D-Pa.) has a solution to the difficult problem small businesses face procuring loans they once readily obtained to expand their businesses and create jobs, he told The Motley Fool (March 9). The solution is “lifting the cap on credit unions’ loans to small businesses, allowing them to extend more loans to help the economy grow,” he told Jennifer Schonberger in an article titled “One Congressman’s Solution for Boosting Small Businesses’ Loans.” “When I spoke with Rep. Kanjorski about his proposal, he told me that credit unions lent wisely before the crisis, and are lending more now,” Schonberger said. “Credit union business lending grew by more than 11% in 2009. Now credit unions are facing a statutory cap on lending. To fill a void in business lending, Rep. Kanjorski says credit unions need Congress’ help.” “It seems eminently clear to me that would be the right thing to do: allow these credit unions to participate in the recovery program of the American economy,” Kanjorski told the publication. Increasing the cap on credit unions’ loans to small businesses is one of the top issues facing the credit union industry, Daniel F. Egan, president of the Massachusetts, New Hampshire and Rhode Island Credit Union Leagues, told the Boston Business Journal Monday in an article titled “Credit Unions Push to Lift ‘Artificial’ Cap.” “Initiatives in the House and Senate to boost the cap to 25% of assets, however, won’t be soon enough for the Community CU of Lynn (Mass.),” reporter Tim McLaughlin wrote. “In a rare move, the Lynn credit union began pursuing a state bank charter three years ago after maxing out its business lending. The credit union has the highest ratio of business loans, 11% of total assets, among Massachusetts credit unions, according to data from the National Credit Union Administration. The article also mentions business loans at Digital FCU, Marlborough, Mass., the largest Massachusetts credit union, which would like to see more room under the business cap to meet member needs. Brett Thompson, president/CEO of the Wisconsin Credit Union League, wrote an opinion piece Friday in a Milwaukee publication, The Business Journal. “Congress must lift arbitrary restrictions--currently capped at 12.25% of assets--that prevent credit unions from making more small business loans,” Thompson said. “If the current cap were raise to just 25% of assets, credit unions could offer $355 million of new business credit and add 3,865 jobs in Wisconsin in the first year alone,” he added. The Credit Union National Association (CUNA) is a big proponent of boosting the cap, The Business Journal said. CUNA says credit unions have been making business loans to members since the early 1900s. A statutory cap on business lending activity didn’t appear until passage of the Credit Union Membership Access Act of 1998, according to CUNA’s website, the Journal said. “There was no economic rationale for this limit in 1998 and there is no rationale now,” CUNA said. To read the articles, use the links.

Audio conference addresses CU business lending

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MADISON, Wis. (3/17/10)--The Credit Union National Association (CUNA) will host an audio conference March 25 on credit union business lending, with updates on the Small Business Administration programs. The conference, “Credit Union Business Lending: Working with the Small Business Administration (SBA) and the National Credit Union Administration (NCUA) to Make More Business Loans,” will be offered at 1 p.m. CDT. Tuition for the conference is $49. Speakers include: CUNA President/CEO Dan Mica, NCUA Chairman Debbie Matz, SBA Administrator Karen Mills, and Mary Dunn, CUNA senior vice president and deputy general counsel. The conference will discuss how credit unions can make SBA loans, how to expand SBA loan programs, and updates on SBA loan developments. It is geared toward credit unions already involved in business lending and those considering involvement. According to CUNA, credit union member business loan portfolios grew $3.1 billion in 2009--a one-year increase of 10%. That growth was more than consumer and mortgage loan portfolios, and made business loans the fastest growing segment of credit union loans in 2009. SBA lending, as a subset of total credit union member business lending, grew 15% in 2009, CUNA added. For more information, use the link.

Virginia legislature passes conversion bill

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RICHMOND, Va. (3/17/10)--A bill giving Virginia state-chartered credit unions the ability to convert to mutual savings banks if they choose was passed by the state’s general assembly last week. Under the bill, state credit unions have the same powers as federal credit unions. House Bill 482 and Senate Bill 440 passed both state chambers unanimously (Capital News Service March 15). The Virginia Credit Union League worked to turn the legislation into a charter-choice bill from an acquisition bill. The original version of the bill was drafted by bankers. The league’s and credit unions’ efforts resulted in a compromise bill, which was a substitute bill that the league drafted. “Obviously, we’re pleased with the final version of this legislation and we believe it represents a victory for the member-owners of Virginia’s credit unions,” said Virginia League President Rick Pillow. “We viewed the original version of this legislation as nothing less than an acquisition bill, designed to give for-profit banks the authority to buy up not-for-profit credit unions, without providing adequate safeguards for member-owners. “The original language would have put for-profit banks in the driver's seat; the substitute bill we drafted, and which passed the legislature, puts charter choice firmly in the hands of credit union member-owners, where it belongs,” he said.

MSU FCU hosts governor for debt settlement forum

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PLYMOUTH, Mich. (3/17/10)--A press conference calling for the regulation of debt-settlement agencies was conducted by Michigan Gov. Jennifer Granholm, Office of Financial and Insurance Regulation Commissioner Ken Ross and GreenPath CEO Jane McNamara March 5 at Michigan State University FCU in East Lansing.
At a press conference about debt settlement at Michigan State University FCU are from left: Ken Ross, Office of Financial and Insurance Regulation commissioner; Jane McNamara, GreenPath CEO; and Michigan Gov. Jennifer Granholm. (Photo provided by the Michigan Credit Union League)
The three promoted the work of debt management organizations, including GreenPath Debt Solutions. MSU FCU is one of several credit unions that works with GreenPath and other state-licensed organizations to provide debt-management consulting to members (Michigan Monitor March 15). The leaders want to regulate debt-settlement agencies that push consumers toward paying money upfront to the company and ignoring creditors. Working with unregulated debt-settlement agencies can contribute to poor credit scores and it can become harder for reputable organizations to help individuals with their debt, said the Michigan Credit Union League’s newsletter. “Protecting Michigan citizens from unregulated debt-settlement programs is part of my administration’s ongoing effort to safeguard consumers and their pocketbooks,” Granholm said. “As consumer debt grows, the number of unregulated and financially dangerous debt-settlement companies is increasing dramatically. It’s now more important than ever for consumers to be aware that safe and sound debt-relief assistance is available.”

Australias ATM-fee reg prompts boycott of banks

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SYDNEY, Australia (3/16/10)--Less than one year ago, new regulations went into effect requiring Australia's credit unions and other financial institutions to display their ATM fees on screen. In January, Australian consumers made six million fewer transactions at "foreign" ATMs than they did in January 2009. Overall ATM withdrawals are down a record 6.9% from a year ago, according to the Reserve Bank of Australia (Sunday Telegraph March 14). The number of withdrawals at "own bank" ATMs rose slightly while "other bank" ATM withdrawals dropped 18%. The data was released Friday as some Cashcard ATMs hiked their fee to $2.50 for a single transaction. The standard fee for foreign ATMs has been $2 since the reforms became effective. Consumers are shunning ATMs due to high fees, fear of scams and convenience, say analysts. Many are withdrawing extra cash at the point of sale when they shop. Once fees become transparent, consumers became more conscious about paying them and they voted with their feet, said Christopher Zinn, a spokesman for Choice, a consumer advocate group. Australians used ATMs more almost 66 million times in January 2010.

CU System briefs (03/15/2010)

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* HIGHTSTOWN, N.J. (3/16/10)--A Northeaster that killed six people and knocked out power for 900,000 utility customers in New York and New Jersey Saturday night knocked out power and communications at the New Jersey Credit Union League headquarters. The league said Monday it was "operating fully in its business continuity mode" and serving New Jersey credit unions (The Daily Exchange March 15) ... * RALEIGH, N.C.(3/16/10)--Members of Raleigh-based State Employees' CU (SECU) provided a $125,000 grant through the SECU Foundation to Friends of the North Carolina Museum of Natural Sciences to continue production of Exploring North Carolina. The five-time Emmy-nominated program is a series of mini-adventures featuring plants, animals, geology and history of North Carolina places on UNC-TV, North Carolina's only statewide network. The series is distributed nationally on the Apple Computer's "iTunes U" network ... * NILES, Mich. (3/16/10)--A signage business in Niles, Mich., closed abruptly and the business manager has disappeared, leaving a credit union with only one of two signs it commissioned as a remodeling project. The credit union, Greater Niles Community FCU, paid a hefty down payment--$12,000--for the order in October. The business, Elkhart-based Sign Image & Design, has gone bankrupt, said the owner, Jeanette Cross Ryman. Her husband, Lyle Ryman, had represented himself as the company owner when he took the credit union's money and disappeared. His wife has filed for a divorce (South Bend Tribune March 14) ...

Online crime losses more than doubled in 2009

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WASHINGTON (3/16/10)--Online crime losses more than doubled during 2009, reaching $559.7 million, according to the Internet Crime Complaint Center (IC3). That compares with $265 million lost during 2008. IC3 is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). The number of complaints also rose--to 336,655 complaints, or 22.3% more than the 275,284 complaints filed in 2008. Complaints involved fraud and nonfraud categories including auction fraud, nondelivery of merchandise fraud, credit card fraud, computer intrusions, spam/unsolicited e-mail, and child pornography, said IC3. In 2009, IC3 implemented a new complaint classification system, separating complaints into 79 categories. This resulted in a number of changes to the way the system gathers the data and classifies complaint data. Among the significant findings for 2009:
* E-mail scams that used the FBI's name to gain information represented 16.6% of all complaints submitted. Nondelivered merchandise and/or payment accounted for 11.9% of complaints, advance fee fraud made up 9.8%. Rounding out the top five categories were identity theft and overpayment fraud. * Of the top five categories of offenses reported, nondelivered merchandise and/or payment ranked 19.9%, identity theft, 14.1%, credit card fraud, 10.4%, auction fraud, 10.3%, and computer fraud (destruction/damage/vandalism), 7.9%. * Of the complaints involving financial harm and referred to law enforcement, the highest median dollar losses were found among investment fraud ($3,200), overpayment fraud ($2,500), and advance fee fraud ($1,500). * Among complainants, 54% were male, nearly two-thirds were between the ages of 30 and 50, and more than one-third resided in either California, Florida, Texas or New York. Ninety-two percent of the complaints were from the U.S. * Males lost more money than females. Men lost $1.51 to every $1 that women lost. Individuals who were between 40 and 49 years old on average lost more than other age groups.
For the full report, use the resource link.

Arizona senator notes CUs as payday loan option

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PHOENIX (3/16/10)--Credit unions are a viable low-cost alternative to payday loans, according to an Arizona legislator. State Sen. Debbie McCune Davis (D-Phoenix) said no one in Arizona should be able to take on high-interest payday loans--which will not be allowed in the state after June 30 unless a state senate panel approves legislation to keep the industry alive in Arizona ( March 11). She cited a New Mexico study, which found that 97% of those who took payday loans had lower cost alternatives. Others are ready to fill the gap if the payday lending law expires, she said. “I’ve talked with a number of credit unions that are ready to work with people to get them through short-term financial crises,” she told the paper. “They have a process in place and are open to it.” To read the article, use the link.

IWall Street JournalI report CUs say yes to lending

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NEW YORK (3/16/10)--At a time when the overall number of consumer loans are contracting, credit unions nationwide are saying “yes” to lending, The Wall Street Journal said Saturday. In Saturday’s article titled “Where to find the money,” Ruth Simons and Maurice Tamman said that credit unions and community banks nationwide are stepping up to help those seeking loans. Simons spoke to Bill Hampel, chief economist at the Credit Union National Association, about lending trends at credit unions. Hampel also supplied her with several credit union leads. “In the wake of the financial crisis that saddled banks with huge losses, the largest 10% of banks by asset size shrank their consumer lending by 4.7% last year, tightening the spigot on loans that aren’t backed by the government,” the two wrote. “At many smaller banks and credit unions, though, cash continued to flow. Consumer loans grew nearly 3% at financial institutions that fall in the bottom 50% of the industry in assets, according to the Journal's analysis of financial-institution data filed with regulators. “Some smaller banks and credit unions continued to ramp up their business in mortgages, auto loans and credit cards and gain from the pain of their larger rivals,” they added. State Employees CU, a $17 billion asset Raleigh, N.C.-based credit union, offers mortgages with a fixed rate for the first two years that adjust every two years afterwards, the Journal said. Rates start at 3.75% and “can increase by no more than than one percentage point every two years and by no more than eight percentage points over the life of the loan,” the paper added. Piedmont Advantage CU, a $239 million asset, Winston-Salem, N.C.-based credit union, lowered its credit card rate to fixed 6.9% from 8.9% “to help it members struggling in the weak economy,” the paper said. The Journal also noted OnPoint Community CU, Portland, Ore., for its credit cards, and DFCU Financial, Dearborn, Mich., and Antelope Valley CU, Lancaster, Calif., for auto loans. To read the article, use the link. The newspaper also ran a front-page story Monday, noting that small businesses say banks are too conservative in their lending policies.

Texas foundation prepping for financial literacy push

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DALLAS (3/16/10)--The Texas Credit Union Foundation (TCUF) begins another campaign, “Make the Difference” to promote financial literacy next month. It will distribute $10,000 in grants to credit unions and community organizations to help teach people about managing money. April is National Financial Literacy Month, and TCUF will use the month-long effort to promote financial education efforts, according to the Texas Credit Union League (LoneStar Leaguer March 2). The grants will be offered for up to $500 each to “Make a Difference” efforts that include but are not limited to credit union partnerships with local community groups or classroom instruction. “We debuted the ‘Make the Difference’ campaign in 2009 and were amazed at the enthusiasm and collaboration among credit unions, chapters, partner organizations and educators in [Texas],” said Courtney Nickles, executive director. “Credit unions are making a difference in their own communities every day, true to the philosophy of ‘people helping people.’ April presents the perfect opportunity to join forces, make the difference and further strengthen financial education in Texas.” TCUF also is working with its Project NEFE Network, a group of members implementing local financial education programs and offering National Endowment for Financial Education (NEFE) High School Financial Planning Program training sessions statewide. Last year, TCUF and Project NEFE Network members reached roughly 80,000 students through financial literacy efforts. TCUF will track activities, so credit unions and partners can report their activities to win prizes and receive recognition. Nickles was recently interviewed by Texas-based radio station KERA regarding the campaign. She told KERA Morning Edition Host Sam Banker that she thinks the current recession and mortgage crisis stem from financial illiteracy. Budgeting is a huge problem, she said. “Lots of families do not live by a budget and just kind of fly by the seat of their pants on a daily, weekly, monthly basis,” she said. The foundation hopes to make its members financially fit and savvy, she added. “You’re talking about delinquencies, bankruptcies--you just want your members to be smart and savvy and I think that benefits everyone involved,” she said. “TCUF likes to think that we teach from cradle to grave,” she added. Even preschool-age children can learn how to save through a piggy bank, she said.

Washington governor signs CU public funds law

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OLYMPIA, Wash. (3/16/10)--Washington Gov. Chris Gregoire signed legislation Friday that allows public units to deposit funds in state-chartered credit unions. The new law--Senate Bill 6298, which goes into effect July 1, 2011--adds state-chartered credit unions to the roll of eligible public depositories. The legislation adds 70 local Washington-grown credit unions to the list of 105 public depositories and brings with it more community-based bank choices for the state public units, said the Washington Credit Union League. The new law also strengthens the safety of those public dollars by diversifying risk at a time of increasing bank failures and when most of the state’s public funds are maintained in too-big-to-fail financial institutions, the league said. “State leaders need more options for public funds in top tier financial institutions,” said John Annaloro, league president/CEO. “Additionally, the state has a fiduciary responsibility to return the nest rates on their investments. This is a smart change.” Credit unions generally offer better rates of return on savings and investment products than banks, according to some studies, the league said. The new law, however, will limit public deposits in credit unions by any single public unit to $100,000, and credit unions are not required to participate, the league said.

Pa. Maxwell Herring Desjardins winners named

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HARRISBURG, Pa. (3/16/10)--The Pennsylvania Credit Union Association announced state winners of the Dora Maxwell Social Responsibility Award, Louise Herring Philosophy in Action Award and the Desjardins Youth Financial Education Award. Awards will be presented to the 2010 winners May 17 (Life is a Highway March 15). First place Dora Maxwell Social Responsibility Award winners are:
* Greater Pittsburgh Police FCU, $20 million to $50 million asset category; * Meadville Area FCU, $50 million to $100 million in assets; * Cross Valley FCU, Wilkes-Barre, $100 million to $200 million in assets; * Erie FCU, $200 million to $500 million in assets; * American Heritage FCU, Philadelphia, more than $500 million in assets.
First place Louise Herring Philosophy in Action Award winners are:
* Superior CU, Collegeville, less than $50 million in assets; * Erie General Electric FCU, $50 million to $250 million in assets; * TruMark Financial CU, Trevose, more than $250 million in assets.
First place Desjardins Youth Financial Education Award winners are:
* Keystone FCU, West Chester, $35 million to $75 million in assets; * AmeriChoice FCU, Mechanicsburg, $75 million to $250 million in assets; * TruMark Financial CU, more than $250 million in assets.

Detroit editorial Use CUs MBLs not state-owned bank

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DETROIT (3/16/10)--A state candidate's proposal to open a state-owned bank in Michigan to assist the state's economy prompted an editorial in The Detroit News that said Michigan is in no position to open such a bank and that credit unions' program to assist the credit crunch makes more sense. "Last month, Gov. Jennifer Granholm unveiled a state partnership under which 335 Michigan credit unions will help ease the money crunch by lending at least $43 million to small businesses," said the editorial (March 15). "That kind of public-private format, while modest at this point, makes more sense than adding a state-owned bank to a bureaucracy that's already $1.6 billion costlier than its projected income," said the newspaper. The newspaper noted that "while times call for bold plans, this one should fizzle." The proposal was based on the Bank of North Dakota, the only state-owned bank in the nation. Some cash-strapped states have considered the idea of such a bank, saying it could inject money into the economy by making business loans, student loans, buying down small banks' endangered mortgages and issuing credit cards. The proposal was made by Virg Bernero, who is running for the Democrat candidacy for governor (News Now March 11). Other states looking into state-owned banks include Vermont, Florida, Oregon and Washington.

WOCCU unites Mexico Canada CUs on managing ATMs

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ALBERTA, Canada (3/16/10)--Caja Popular de Ahorros Yanga, better known as Caja Yanga, became one of the first rural Mexican financial cooperatives to launch surcharge-free credit union-owned ATMs, said the World Council of Credit Unions (WOCCU).
Click to view larger image Aida Maceda, (left) information technology manager, and Liliana Gonzalez, ATM manager for Caja Yanga, are pictured next to a Servus CU ATM during a technical internship between Canada-based Servus and Mexico-based Caja Yanga that focused on ATM policies and procedures. Caja Yanga recently launched rural Mexico’s first surcharge-free ATMs. (Photo provided by the World Council of Credit Unions)
It turned to Servus CU in Alberta, Canada, for help. Caja Yanga and Servus established a relationship in 2009 through WOCCU’s International Partnerships Program, and the Mexican credit union asked about a technical internship. In March, Servus welcomed Aida Maceda, Caja Yanga information technology (IT) manager, and Liliana Gonzalez, ATM manager, to Edmonton to study the daily maintenance and operations of ATMs in Servus branches. “These technical visits really crystallize the value each party brings to the partnership,” said Vern Albush, Servus director of corporate social responsibility. “Our goal for this technical internship was to help Caja Yanga successfully launch its first cash dispensing ATMs and gain a better understanding of the process involved in making the IT and banking system expansion decisions necessary to address rapidly growing demand.” The two Caja Yanga delegates spent seven working days with Servus employees, learning to manage in-branch ATMs and discussing everything from proper balancing procedures and machine troubleshooting to the physical security of the ATM itself. Servus stressed the importance of dual custody of combinations and showed how proper security procedures for staff working with ATMs help boost confidence and reduce liabilities that employees shoulder when dealing with the machines. The pair also job-shadowed Servus employees during a typical daily ATM check and balance at a local branch. “Having access to Servus technical staff is extremely beneficial given their decades-long experience in administering ATM operations,” Maceda said. “I learned a great deal, especially why planning for growth is so important instead of simply concentrating on immediate needs of the ATM network and card services.” The Mexican credit union installed new computer servers in December and is updating many of its system. The visitors also looked at the credit union’s IT and communications infrastructure. Maceda took particular interest in server software and usage and commercial electronic messaging options. Maceda and Gonzalez identified areas in which Caja Yanga can implement some of Servus’ operating practices. Gonzalez will change the way ATMs are serviced and balanced and implement stricter policies and procedures, including surprise cash counts. Maceda will make changes when she reviews the new e-mail and communications infrastructure for the credit union.

National CU Youth Week just a month away

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MADISON, Wis. (3/15/10)--National Credit Union Youth Week, sponsored by the Credit Union National Association (CUNA), is one month away. As credit unions prepare to celebrate Youth Week and participate in the National Youth Saving Challenge, they should keep in mind that the takeaway from the event is more than just saving money for a designated period. Youth Week runs April 18-24, while the National Youth Saving Challenge will take place the entire month of April. Lin Standke, CUNA Youth Week manager, said when she thinks about Saving Challenge activities, she also thinks about Mother’s Day. “The Saving Challenge is like Mother’s Day. You celebrate your mom on Mother’s Day, but you’re thinking about her all year,” she said. “That’s really the lesson from this. The challenge is a designated event where people are inspired to save their money, but we really want them to make deposits all year long.” This year’s theme for Youth Week is “Get in the Savings Game.” School District 3 FCU, Colorado Springs, Colo., will celebrate Youth Week by collecting money through donation jars in the lobby to support two local high schools’ sports programs. During the week, the credit union also will pay $1 for each “A” earned on report cards, waive coin counting fees for kids who bring in their piggy banks to deposit the money into the accounts, said Theresa M. Schutts, vice president of operations. Bell West Community CU, Westchester, Ill., is raffling off two family fun packs from a local minor league baseball team, the Windy City Thunderbolts. The credit union also is sponsoring a youth baseball team in one of its communities.

CUs banks overtake captives in auto financing

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MADISON, Wis. (3/15/10)--Credit unions and banks have emerged as some of the winners in auto financing, according to Experian Automotive’s AutoCount ranking. Lenders in credit union categories increased their share of outstanding auto loans. Credit unions’ portfolios jumped 1.2% to $149 billion in 2009 (Automotive News March 11). Credit unions and banks received the “upper hand” because of frozen credit markets, and they had better liquidity than some captives and independent finance companies, the newspaper said. The top auto lenders in the U.S. and their market share in 2009 were:
* Chase Auto Finance, 6.75% market share; * Toyota Financial Services, 6.14%; * Wachovia Dealer Services, 4.3%; * American Honda Financial Services, 4.26%; * GMAC Financial Services, 3.7%; * Ford Motor Credit Co., 3.46%; * Nissan Infiniti Financial Services, 2.29%; * Bank of America, 1.99%; * BMW Financial Services, 1.84%; and * Capital One Auto Finance, 1.76%.

CU System briefs (03/12/2010)

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* ST. LOUIS (3/15/10)--Missouri credit unions and hundreds of volunteers will have the opportunity to help build Staff Sergeant (SSG) Robert Canine’s home April 9 through April 11 during the Build Brigade. The Build Brigade--part of Homes for Our Troops, a nonprofit organization that builds specially adapted homes for severely injured service members--takes the home from a concrete foundation to a weather-tight structure in just three days. By the end of the last day, the home will have interior walls framed, windows installed, doors hung, roof shingled and siding installed. The brigade will kick-off with a special ceremony on April 9. Credit union representatives, legislators, community members, local media and Canine’s family are expected to attend, said the Missouri Credit Union Association (The Missouri difference March 12) … * DETROIT (3/15/10)--Paul Bashi, Royal, Mich., pleaded guilty to charges of conspiracy and to commit wire fraud in relation to a $6.2 million loan fraud scheme. During a plea hearing Thursday, he admitted that from 2006 to 2008, he recruited straw borrowers and helped them apply for loans to buy homes based on false information (WDIVDetroit March 11). Loans totaling $480,000 were issued by area credit unions and banks, which were not paid back. Bashi faces seven to nine years in jail ... * CINCINNATI (3/15/10)--A former employee of Cincinnati-based Good Samaritan Employees CU pleaded guilty Thursday in a U.S. District Court to defrauding the credit union of more than $245,432. Ann Bryson, 63, of Cincinnati, allegedly wrote checks and money orders from 1998 to 2005 to pay personal expenses. She used several methods to manipulate records in the credit union's ledgers. Bryson faces up to 30 years in prison and up to $1 million in fines. Her sentencing is set for July 1 ( March 11) ... * KANSAS CITY, Mo. (3/15/10)--Six team members from Mazuma CU taught 150 girl scouts in grades six through 12 how to manage a checking account and debit/ATM cards during a financial education workshop called Making Cent$ in the City. The event was on Feb. 27 at the University of Missouri-Kansas City. The sessions were also available to parents to help them teach young people about money and the importance of saving and preparing for college. The workshop was sponsored by The Women's Foundation of Greater Kansas City and the Girl Scouts of NE Kansas and NW Missouri ...

Adjusting currency for blind would impact ATMs CUs

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MADISON, Wis. (3/15/10)--Credit unions could be impacted by proposed changes to U.S. currency that would make denominations easier to read for the visually impaired. The U.S. Bureau of Engraving and Printing is working to redesign banknotes after the U.S. Court of Appeals in the District of Columbia in 2008 upheld a 2006 lower court ruling that the federal government violated the U.S. Rehabilitation Act by not providing meaningful access to banknotes for the blind and visually impaired (Payments Source March 9). The Treasury is proceeding to redesign currency and will soon seek comment on the proposed designs. The comment period is expected to last about 90 days, said James Hanisch, executive vice president of CO-OP Financial Services in Rancho Cucamonga, Calif., a credit union service organization. Currency size could change, or the size could remain the same with the inclusion of a Braille feature. The inclusion of a Braille feature could have a modest impact. If the size is changed, it could have a “fairly material impact,” Hanisch told News Now. Depending on which design the Treasury proposes and what denominations will be affected, the changes could be a “fairly expensive proposition” for credit unions. The $20 bill is the most commonly dispensed at ATMs, and its change would have the largest impact. The $1 bill will be exempt, and the $100 bill will be grandfathered in the next redesign, Hanisch said. Changes in currency sizes could mean adjustments to cash drawers, vaults, and ATM canisters and dispensers. ATM manufacturers already have the capabilities to change the machines, since many countries have already adjusted their currency sizes for the visually impaired, he added. The technology in Diebold’s ATMs, which include the Opteva and the IX, is designed to support global currencies, Rebekah Smith, Diebold spokesperson, told News Now. The ATMs also are equipped to handle currencies of different sizes, materials and thickness. “Diebold is confident in the design of its ATMs,” she said in regards to the proposed changes. Diebold is a CUNA Strategic Services provider. Currency changes could cost $3,000 to $5,000 per ATM, depending on the denomination. CO-OP offers about 28,000 ATMs, Hanisch said. At minimum, the changes are a year a way. “It’s just starting to sink in how significant this could possibly be,” Hanisch said.

NCUF board approves DE Fund for CIF investors

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WASHINGTON (3/15/10)--National Credit Union Foundation (NCUF) board members approved the creation of a new Development Education Fund during their January board meeting. The fund allows investors in the Community Investment Fund (CIF) to designate future investments to support the Credit Union Development Education (DE) Program. The new Development Education Fund within CIF joins three others: the African-American Credit Union Coalition (Pete Crear Fund); the World Council of Credit Unions (International Development Fund); and the NCUF and State Credit Union Foundations (General Fund). The DE program is recognized within the credit union movement as a training program that fosters credit union values and philosophy and applies these fundamentals in the DE training curriculum. More than 900 credit union professionals have participated and are now certified Credit Union Development Educators. “The value and success of the program is evident in what DEs have gone on to accomplish within their credit unions, state leagues and foundations,” said Tom Candell, NCUF interim executive director and managing administrative director. “The interest in attending training and the expense of running the program deem it crucial to establish this fund to help financially support the program.” An investment designation in the DE Fund supports:
* Annual training programs focusing on credit union philosophy, cooperative principles, and credit union development; * Aid to international credit union and small credit union staff so they may attend development education program; and * The strengthening of cooperative social responsibility within the credit union movement.
Celebrating its 11th year, the CIF enables credit unions to leverage their investments to support innovative credit union programs. Credit unions invest in a CIF account at their corporate credit union. Each corporate invests in corresponding CIF accounts at U.S. Central FCU. Then, each quarter, half of the CIF dividends is returned to investing credit unions. The other half is donated to NCUF. In turn, NCUF disburses its half of the CIF dividends accordingly. When credit unions designate NCUF and State Credit Union Foundations (General Fund), NCUF grants half of its NCUF dividend to the credit union’s state foundation or league. NCUF uses the remainder to support its national programs. When credit unions designate the Credit Union Development Education Fund, Pete Crear Fund, or the International Development Fund, half of the CIF dividend that goes to support the activities of these funds is disbursed as 42.5% directly to the particular fund, 42.5% to the credit union’s state foundation or league and 15% to NCUF as a maintenance fee. For more information, contact your corporate credit union, state credit union foundation, league or NCUF Resource Development and Donor Relations Director Josie Collins at or at 800-356-9655, ext. 4397.

Arrest ends High Country Bandits four-state spree

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PHOENIX (3/15/10)--Two Linden, Ariz., men were arrested Thursday in connection with 16 bank robberies in four states that involved credit unions. Joel Jay Glore and Ronald Michael Capito are believed to be the “High Country Bandits” suspected in the armed robberies of credit unions and banks in Arizona, Colorado, New Mexico and Utah that began in September. They were apprehended after a week of surveillance by Federal Bureau of Investigation agents and local law enforcement officials ( March 12). The robbers got the name “High Country Bandits” because the initial robberies occurred in Northern Arizona, the TV station said. Armed with semi-automatic handguns, the bandits usually would enter a credit union or bank near closing time and demand cash from the teller drawers, Navajo County Sheriff K.C. Clark told the station. The men involved in the heists would tell everyone in the credit union or bank to “kiss the ground” before they left on all terrain vehicles, which were loaded onto a van before leaving the area, the station said.

NCCUL CEO WOCCU in Romania to aid CU growth

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CURTEA DE ARGUS, Romania (3/15/10)--John Radebaugh, North Carolina Credit Union League (NCCUL) president/CEO, and Brian Branch, executive vice president and chief operating officer and for the World Council of Credit Unions (WOCCU), traveled to Romania last week to assist its growing credit union movement.
John Radebaugh (center), president/CEO of the North Carolina Credit Union League, traveled extensively through Romania last week as part of a World Council of Credit Unions (WOCCU)-sponsored trip. He is pictured with representatives from a Romanian credit union and Brian Branch (second from right), WOCCU executive vice president and chief operating officer. (Photo provided by the North Carolina Credit Union League)
The visit to the Eastern European nation is the second WOCCU-sponsored trip in the past few months, said the league (Weekly Update March 12). Radebaugh and Branch traveled extensively through the country with Florin Simion, the Romanian Federation of Credit Unions (FEDCAR) president/CEO. “Our mission is to help Florin increase his membership and develop services he can offer to the Federation’s members,” Radebaugh said. Romanian credit unions have no government oversight--and some 2,000 credit unions in the country have no verifiable internal controls. Separate from this group are 17 credit unions that are members of the FEDCAR that work together and have adopted PEARLS standards. PEARLS is the internationally recognized credit union monitoring system aimed at helping the world's credit unions be more safe and sound. Radebaugh and Branch visited Casa de Ajutos Recirpoc Concordia in Curtea de Arges, a city of about 25,000 people. A Casa de Ajutos Recirpoc (CAR), which translates as a “Mutual Help House,” is Romania’s equivalent of a credit union. “We learned a lot about their credit union and the challenges they face--some very similar to the challenges credit unions in North Carolina face every day,” Radebaugh said. Radebaugh and Branch asked why CAR members do business at the credit union instead of a bank. “We have heard the same answer at each credit union we have visited--trust,” Radebaugh said. “Members trust credit unions and they don’t trust banks.” In November, Jeff Hardin, NCCUL’ director of communications, and Victor Corro, senior manger of WOCCU’s international partnerships, visited the credit unions and made recommendations to FEDCAR aimed at helping the Romanian movement grow. Radebaugh and Branch also met with the head officials of the County of Alba. They also were interviewed by four TV stations. They also met with a meeting with several credit union officials to discuss FEDCAR and with Omar Corneliu, a member of Romania’s House of Representatives.

MCUL Michigan Association of CUs to combine

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LANSING, Mich. (3/15/10)--The Michigan Credit Union League (MCUL) and the Michigan Association of Credit Unions (MACU) will become one united trade association, they announced Friday. The organizations had completed the first year of a two-year agreement, and a special MACU membership meeting was held Feb. 19 in Mt. Pleasant to review the progress of the alliance and determine future steps MACU membership considered the level of service provided by the league and voted to authorize the MACU Board of Directors to begin the complete integration with the league and begin dissolving MACU before the agreement expires. “Consolidation in our industry continues to challenge associations nationwide, and that is why the MCUL and MACU alliance was formed--to provide a single voice for all Michigan credit unions with one strong trade association,” said David Adams, president/CEO of MCUL. “This arrangement offers member credit unions a united voice in Lansing and Washington, D.C. It also provides great value to all credit unions by creating a single source of funding and support for trade association services. This is particularly important in this climate of economic challenges and opportunities,” Adams added. MCUL Board Chairman Andy List noted that the current financial services environment requires a unified credit union trade association. “This is good news for Michigan credit unions and their members," List said. "The MACU credit unions cover a wide range of asset sizes and geographic locations. They have much to contribute to our state association by participating in the legislative lobbying process, networking with colleagues in the MCUL family and contributing ideas for strengthening our credit union community through the power of association.” During the past 12 months, 18 MACU member credit unions have benefited from MCUL’s advocacy efforts, information and education services, fee-based services and networking opportunities.

.org domain to add security to protect donors

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WASHINGTON (3/15/10)--Credit unions and nonprofit organizations using the .org Web domain will see beefed up security on the domain beginning in June. The Public Interest Registry will add a layer of security known as DNS Security Extensions (DNSSEC) to the domain to protect millions of non-profit organizations and their donors from hacking attacks known as cache poisoning. ( March 11). Cache poisoning refers to the practice of hackers redirecting visitors from a legitimate website to a bogus one without the website operator or end user knowing about the switch. The practice stems from a flaw in the Domain Name System (DNS) disclosed in 2008 by a security researcher. The registry will support DNSSEC for first and second-level .org domain names. "There are credit unions that use .org ... and there are non-profit organizations that are in fundraising and have been targets for attacks, some of them quiet public," said Alexa Raad, CEO of The Public Interest Registry. DNSSEC will allow customers who require security to have it, she told DNSSEC is an emerging standard that allows websites to verify their domain names and corresponding internet provider addresses using digital signatures and public-key encryption. Other domains deploying DNSSEC include .gov and country code top-level domains operated by Brazil, Bulgaria, Puerto Rico and Sweden. VeriSign will deploy DNSSEC in the .edu domain by second quarter of this year. The .net domain will deploy it in fourth quarter and the .com domain during first quarter 2011.

CU System briefs (03/11/2010)

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* ST. PAUL, Minn. (3/12/10)--Steven Lee Olson, 48, of South St. Paul, Minn., pleaded guilty in Minneapolis to robbing the Wakota FCU on Oct. 30 of $1,514. He admitted he robbed five other institutions--all banks in Minnesota and Wisconsin--between Sept. 25 and Oct. 21. He also said he tried to rob a sixth bank in St. Paul on Oct. 20, but the teller refused his demands for money, even though he pointed a handgun at her. He fled without the money. Olson was apprehended after the credit union robbery when a witness followed his car. His sentencing has not been set (Star Tribune March 9) ... * HOUSTON (3/12/10)--A former credit union manager was sentenced Wednesday in a U.S. District Court in Houston to 15 months in federal prison without parole for embezzling more than $56,862 from the former Saint John Vianney FCU (now San Antonio CU). Donna Gonzalez, 40, of Houston pleaded guilty on Oct. 20 to the embezzlement. She used her position to steal from dormant accounts between Sept. 22, 2006 and Feb. 22, 2008. She also was ordered to pay $56,862 in restitution to San Antonio CU. The prison term will be followed by a three-year supervised release (The Police News March 11) ... * MANHATTAN, N.Y. (3/12/10)--Two executives of Mount Vernon (N.Y.) Money Centers, a financial company that administered ATMs and provided armored car and payroll services, were indicted Wednesday on charges they stole $50 million from two credit unions, banks and other institutions. Robert Egan, 64, Bedford, the firm's president and owner, and Bernard McGarry, 50, Yonkers, chief operating officer, were charged with six counts of bank fraud and one of conspiracy. Among the victims cited in the indictment were Actors FCU and ADP FCU, as well as Webster Bank, Bank of America U.S. Bank, and New York Community Bancorp. The indictments said the two used clients' cash from the company's vaults to play the float and co-mingled clients' funds that were supposed to be kept in individual accounts. If convicted, each man faces up to $30 years in prison. (The Journal News March 11) ...

States vary widely on 09 loan growth--CU financial summary

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MADISON, Wis. (3/12/10)--The Credit Union National Association (CUNA) has compiled its state-by-state Credit Union Financial Summary--highlighting the financial trends of the past year for credit unions and gleaned from the National Credit Union Administration's final call report release of 2009. While the weak economy of the past 12 months continued the recent trends of depressed earnings, strong savings growth and weak loan growth , the latest state level financial summary report also shows there is tremendous variation across the country, said CUNA's economics and statistics analysts. For example, while loan growth overall was rather anemic (at 0.8%), several states posted loan growth on par with industrywide asset growth numbers. Arkansas in particular saw loan growth in the double digits--at 11%. In fact, each of the top 10 states in terms of loan growth outpaced the median asset growth (7.2%) of the country's credit unions as a whole. To access the financial summary for December 2009, use the resource link.

Missouri DOT tells 10 CUs to vacate offices

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JEFFERSON CITY, Mo. (3/12/10)--The Missouri Highways and Transportation Commission approved a staff recommendation Wednesday to sever ties with the 10 credit unions located in Missouri Department of Transportation (MoDOT) facilities in the state, according to the Missouri Credit Union Association (MCUA). The credit unions were told Jan. 21 that they would be required to vacate their locations by Sept. 30. They would no longer be able to process payroll and benefits through MoDOT after that date. Credit union employees were on MoDOT’s salary and benefits plan but credit unions fully reimbursed MoDOT for those costs, MCUA said. Following pressure from MCUA, state lawmakers and the Missouri Division of Credit Unions, the final proposal offered to the Highway Commission for approval extended the move-out date to Dec. 31, 2012, and included waiving billing for salary and benefits for one quarter--totaling about $325,000 for the credit unions. However, the credit unions were asked to begin paying rent on their space in MoDOT facilities beginning Jan. 1, 2011. The commission ratified MoDOT staff’s recommendation. At the commission meeting, representatives of MCUA testified on behalf of the credit unions and asked that the decision to sever ties with the credit unions be revisited. Legislators speaking on behalf of credit unions included: Rep. Tom Loehner (R-112), Rep. Mike Parson (R-133), Rep. Tom Shively (D-8), and Rep. Larry Wilson (R-119). Also attending were Rep. Paul LeVota (D-52) and Rep. Bill Deeken (R-114). Testifying on behalf of credit unions were Board Chairman Norm Beeman, District 4 Highway CU, and credit union members Jim Reser, Steve Torbet and Forrest Wrisinger. About 90 people attended the meeting. Peggy Nalls, MCUA senior vice president of public and legislative affairs, said: “We can find no logical, rational reason for this decision. MoDOT claims that it doesn’t know anything about running financial institutions. “They don’t have to; the regulators and NCUA, the insurer, take care of that,” she said. “MoDOT claims that credit unions are not part of their core transportation mission. Credit unions are an employee benefit,” she said. “MoDOT provides dry cleaning services and boot subsidies and any number of other employee benefits,” Nalls continued. “What’s the difference? The only reason we can see for MoDOT taking this action is that Gov. [Jay] Nixon told them to cut full-time employees. They cut employees that work for the credit union so MoDOT won’t have to cut their workforce and won’t have a reduction in personnel expenses.” MCUA CEO Rosie Holub called MoDOT to ask how it announced its intention to sever ties to the credit unions. “The first issue is a lack of inclusion of the state credit union regulatory agency on the impact of this decision on the safety and stability of the affected credit unions,” she said. “The Missouri Division of Credit Unions was neither informed nor consulted prior to [MoDOT] taking a course of action that displaces 10 independent financial institutions totaling $138 million in assets and 18,000 members," Holub added. “If any of these credit unions experience safety and soundness issues, it will be because of MoDOT’s actions and it will be their responsibility,” she said. “MoDOT’s actions are unconscionable.” MCUA will continue working with legislators and the governor’s office on the issue. It also will work with the credit unions, their MCUA assigned field representatives and the Missouri Division of Credit Unions to assist the credit unions through any transition. Credit unions affected by MoDOT’s decision include:
* District One Highway CU, St. Joseph; * District Two Highway CU, Macon; * Division Three Highway CU, Hannibal; * District Four Highway CU, Lee’s Summit; * District Five Highway CU, Jefferson City; * Division Six Highway CU, Chesterfield; * District Seven Highway CU, Joplin; * District Eight Highway CU, Springfield; * District Nine Highway CU, Willow Springs; and * Division 10 Highway CU, Sikeston.

First Tech Addison Avenue CUs to merge

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PALO ALTO, Calif. and BEAVERTON, Ore. (3/12/10)--The boards of Addison Avenue FCU, Palo Alto, Calif., and First Tech CU, Beaverton, Ore., have approved a merger agreement between the two organizations. The agreement is the first formal step in the merger process. State and federal regulators and First Tech members must approve the merger. Addison Avenue and First Tech are independently strong, well-capitalized institutions that are recognized leaders in innovative financial services delivery to the high-tech sector and individual, the credit unions said. Both institutions share a heritage in serving members from high-tech companies such as Hewlett Packard, Microsoft, Agilent, Intel, CH2M HILL and Nike. The combined credit union would have assets of $4.6 billion, 38 branches, and 320,000 members nationwide. It would offer members an expanded branch and ATM network and online offerings, and continue to offer a product line including mortgage, investment and insurance services. The continuing credit union would use Addison Avenue’s federal charter with the addition of First Tech’s fields of membership. The combined credit union would operate as First Tech FCU with corporate offices in Palo Alto, Beaverton and Rocklin, Calif. Tom Sargent, First Tech CU president/CEO, is scheduled to retire this spring. “As Tom’s retirement approached, our board sought a replacement who would lead First Tech with the same integrity, passion, and commitment to innovation that Tom has demonstrated at First Tech for 25 years,” said Carolyn Strong, First Tech board chairman. “During our search, we also explored other strategic alternatives and a partnership with Addison Avenue presented a great opportunity.” “This partnership is a tremendous opportunity to create more value for our combined membership and sponsor companies,” said Benson Porter, Addison Avenue president/CEO. “Both institutions share great similarities, starting with our strong member-centric cultures focused on serving the high-tech sector and individual.”

Minnesota lobby day shines light on CU priorities

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ST. PAUL, Minn. (3/12/10)--Acknowledging credit unions’ dedication to serving communities, members of Minnesota’s House and Senate leadership praised credit unions during Minnesota Credit Union Network’s (MnCUN) Credit Union Day at the Capitol Tuesday.
Click to view larger image During the Minnesota Credit Union Network’s Credit Union Day at the Capitol in St. Paul, state House Majority Leader Tony Sertich commended Minnesota credit unions for the key role they play as “stable institutions in our communities.” (Photo provided by the Minnesota Credit Union Network)
The annual advocacy event, which welcomed more than 130 professionals and volunteers, reminded elected officials that Minnesota credit unions’ priorities align with the state’s efforts to strengthen the local economy, said MnCUN. During the day, credit unions received political insight from several legislative leaders, including House Majority Leader Tony Sertich (DFL-Chisholm), House Commerce Committee Chair Joe Atkins (DFL-Inver Grove Heights), Senate Minority Leader David Senjem (R-Rochester), and State Rep. Debra Hilstrom (DFL-Brooklyn Center). Amid talk about jobs creation and the state’s dismal economic forecast, the legislators expressed appreciation for the support and assistance credit unions offer to Minnesotans throughout the state. “You all play a key role as stable institutions in our communities,” Sertich said. “I commend you for that.” Atkins applauded credit unions for their resilience during the recession, stating that they’ve “weathered the storm better than anyone else out there.” Senjem also acknowledged the contributions credit unions make to the quality of life in Minnesota. “You are part of what makes our state great,” Senjem said. “Know this--you’re a vibrant part of the state. Know that you have friends at the state Capitol.” The lawmakers also encouraged credit unions to continue telling their story at the state Capitol. Throughout the legislative session, MnCUN and credit unions work to provide elected officials insight into how proposed legislation will impact consumers and the credit union movement. With the theme “Serving Main Street, Not Wall Street,” this year’s Credit Union Day at the Capitol reminded lawmakers of the role credit unions play in serving “Main Street Minnesota.” During the day, credit unions shared real members’ stories that highlight credit unions’ efforts to help strengthen the state’s economy. “Currently, legislators are faced with difficult decisions as they work to lead the state out of the recession,” said Mark D. Cummins, MnCUN president/CEO. “During Credit Union Day, we were able to remind lawmakers that every day credit unions are doing their part to assist Minnesotans as they get back on their feet.” The event also offered sessions that discussed credit unions’ 2010 legislative priorities, social media advocacy and the legislative process.

Ohio public funds bill has second third hearings

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DUBLIN, Ohio (3/12/10)--Legislation in Ohio to include credit unions as a choice of depositories for public funds underwent its second and third hearings before the state House Financial Institutions, Real Estate and Securities Committee on March 3 and again on Wednesday, said the Ohio Credit Union League.
Click to view larger image Attending a hearing on Ohio's House Bill 317, which would include credit unions as a choice of depositories for public funds, were, from left: John Kozlowski, Ohio Credit Union League General Counsel; State Rep. Ted Celeste (D-Grandview Heights), Greg Kidwell, Members First CU CEO; and Grandview Heights Mayor Ray Degraw. Kozlowski and Degraw testified in favor of the bill.
Click to view larger image Ohio credit union leaders showed their support for Ohio legislation that would include credit unions as a choice for depositing public funds by attending a March 3 hearing on House Bill 317. A similar group also supported testimony on behalf of the bill in a hearing conducted on Wednesday. (Photos provided by the Ohio Credit Union League)
Testifying in favor of House Bill 317 and on behalf of credit unions on March 3 was Hardin Community FCU Matt Jennings and Board President Dick Wilcox. Each stressed the importance of community and choice, and the important role the credit union plays in the community and lives of the people in Hardin and Logan Counties. Hardin Community FCU is a $60 million asset credit union based in Kenton, Ohio. Also testifying on behalf of credit unions was Ray Degraw, mayor of Grandview Heights, located in central Ohio. DeGraw testified that the legislation would give his city a true choice of depositories and a local option within his community. League General Counsel John Kozlowski stated in his testimony that the league has long advocated including credit unions as eligible depositories for public funds and for their inclusion in lending and savings programs available through the Treasurer of State's office. Testifying in opposition to H.B. 317 was Scott McComb, president of Heartland Bank, and Joan Jones, president of Peoples Bancshares. Both advocated taxing credit unions to offset what they called credit unions' "unfair advantage" and to "level the playing field." Kozlowski, in his testimony, addressed that issue, saying that credit unions pay property taxes and payroll taxes, and state-chartered credit unions also pay sales and use taxes. He noted credit unions don't have an unfair advantage. "If this were true, why do credit unions have only 0.81% of the total assets in financial institutions in Ohio and hold only 6.7% of deposits in the state?" During Wednesday's hearing, the Ohio Bankers League and two bankers testified in opposition to the bill. They argued that credit unions had an unfair tax advantage and deviated from their original mission and that their common bond had eroded. They also suggested credit unions' interest in public funds stemmed from lack of liquidity and need for funds. Also testifying Wednesday in favor of the bill were Seth Michael, clerk of court for Jackson County, and Terry Scott, auditor for the city of Mount Vernon. They testified in favor of the choice HB 317 would present their public entities and noted the safety and soundness of credit unions. Knox County Commissioner President Bob White also submitted a letter to the committee on behalf of himself and two other commissioners stating they were in favor of HB 317.

Good to Great author keynotes The 1 CU Conference

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MADISON, Wis. (3/12/10)--Bestselling author Jim Collins will tell credit unions how to go from “good to great” at The 1 Credit Union Conference in Las Vegas July 11-14. Collins, author of “Good to Great: Why Some Companies Make the Leap...and Others Don’t,” will keynote the conference. The event is a one-time joint effort by the World Council of Credit Unions (WOCCU) and the Credit Union National Association. It combines America’s Credit Union Conference and Expo and the World Credit Union Conference. Collins is a former Stanford Graduate School of Business professor and management consultant. His book was on bestseller lists for the New York Times, Wall Street Journal and Business Week in 2001. It has been translated into 35 languages and has sold more than three million copies worldwide. His latest work, “How the Mighty Fall: And Why Some Companies Never Give In,” was released in May. Collins, who accepts few speaking engagements, will address his first credit union audience at the event. He is scheduled to speak during the Monday morning session of the conference. For more information, use the link.

CU Profile notes liquidity asset quality trends

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MADISON, Wis. (3/12/10)--Credit union liquidity increased and asset quality decreased, according to the U.S. Credit Union Profile report, the Credit Union National Association’s (CUNA) summary of National Credit Union Administration (NCUA) call report data released March 1. The profile report of edited NCUA data confirms the broad trends NCUA reported and also reveals some trends and details that were not highlighted by the agency’s news release, said Mike Schenk, CUNA vice president of economics and statistics. For example:
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* Credit union liquidity increased in 2009 as savings inflows exceeded loan growth by a wide margin. Savings grew at a doubledigit rate (+10.3%) while loans increased a modest 1.2%. Loan-to-savings ratios fell from 83.2% to 76.3% and the liquid asset ratio remained near 33%--about 10 percentage points higher than the level at year-end 2005. * Asset quality deteriorated marginally in the year as delinquencies jumped 0.45% (to 1.82%) and net chargeoffs rose by 0.37% (to 1.21%).
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While these increases were large, they paled in comparison to those seen in the commercial banking sector. U.S. banks saw year-end 2009 delinquencies rise to a stunning 5.37%, and bank net chargeoffs in the year were 2.49%--double the level experienced by credit unions. Credit union bankruptcies increased from 2.6 per thousand members in 2008 to 3.6 per thousand members in 2009. The 2009 level is nearly equal to the levels seen immediately prior to passage of bankruptcy reform in 2005. * Interest rate risks seemed to moderate if only slightly in 2009. Credit union long-term assets declined to 31.6% of total assets (from 31.9% in 2008). Credit unions sold more than half of their mortgage originations into the secondary market in 2009--which helped to keep this exposure at manageable levels. Also, core deposits rose slightly--from 36.2% of total deposits in 2008 to 36.9% in 2009. Share drafts grew 15.4% in 2009 and regular shares increased by 11.7%. While credit union rate-risk exposure moderated somewhat in 2009, the risks appear greater than they did four or five years ago, which will mean that interest-rate risk management will be a point of emphasis in the coming exam cycle.
CUNA’s Profile report also includes a snapshot of recent economic activity, which reflects strong fourth quarter growth, vastly improved labor market conditions, more stable home prices and tame inflation--obvious signs of progress toward a self-sustaining recovery, Schenk said. The profile’s economic outlook summary reflects economic improvement in 2010 but a continued steep yield curve--which will help keep credit union interest margins high. The prospect of faster loan growth, slower savings growth and obvious asset quality improvement later in the year are clear signs that the biggest challenges are behind us, Schenk said. To view the profile report, use the link.

Hackers target small-biz online-banking accounts

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WASHINGTON (3/11/10)--Credit unions seeking ways to serve members with small businesses need to be alert to cyberattacks against the online banking accounts belonging to small and mid-size businesses and make sure their authentication processes can handle the attacks. During fourth quarter 2009 alone, cyberthieves stole more than $150 million from small and midsize business accounts, says the Federal Deposit Insurance Corp. (FDIC). The scope of the thefts has raised questions about authentication and fraud-detection measures used by financial institutions. Several banks are fighting lawsuits from business customers seeking to recoup some of their losses, according to Computerworld (March 10). Almost all the incidents reported to FDIC involved malicious software (malware) on online banking customers' personal computers (PCs) that trick a victim into visiting a malicious website or downloading a Trojan horse program that provides access to the business' banking passwords, according to David Nelson, FDIC examination specialist who spoke at an RSA conference in San Francisco last week (IDG News Service March 8). Banks require their business customers to use several forms of authentication, but online banking customers may rely too much on authentication and layers of controls-- because hackers are still stealing, said Nelson. Hackers are targeting higher-balance accounts and looking for small businesses where controls might be lax, said Nelson. This is problematic not only for the business facing losses but for the financial institution serving that business. Businesses do not have the deposit reimbursement protections that consumer deposits do if funds are stolen from their accounts. Instead, they eat the losses from fraud in wire transfers and in the automated clearinghouse system--and some file lawsuits against their banks. Typically the suits claim the banks failed to detect and stop transactions that were patently fraudulent. Hillary Machinery Inc. sued its bank, Plains Capital, after cybercrooks stole more than $800,000 from the company's account last year. Hillary charges the banks did not stop the wire transfers, which involved foreign bank accounts and dollar amounts that were not typical for the company. The suit alleges that Hillary had a reasonable expectation that the bank would protect the company's account. It also argues that a small business should not be expected to have significant expertise on data security issues. In another case, after it lost $560,000 from its account to cyberthieves, Experi-Metal Inc., a Michigan-based firm, sued Comerica Bank, alleging the bank did not heed the red flags that signaled fraud was occurring. Several years ago the Federal Financial Institutions Examination Council issued guidelines suggesting financial institutions upgrade their single-factor authentication processes based on usernames and passwords by adding a stronger, second level of authentication. However, many banks are not using these solutions. The growing and more sophisticated hacking attacks are testing the token-based authentication measures than many banks have used for years, Paul Smocer, vice president of security at BITS, told Computerworld (March 10). BITS is an industry consortium representing the 100 largest financial institutions. It is advising its members to work with law enforcement to determine patterns used by the money mules working the accounts for the cyber criminals. Other organizations advise financial institutions to review their internal security controls and implement multiple security layers to help them detect fraud on their members' accounts.

CUNA phone calls are a smelly phish scam

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PARK HILLS, Mo. (3/11/10)--Phone calls about ATM cards, purporting to be from the Credit Union National Association (CUNA), flooded the Park Hills, Mo., area last weekend, said a local newspaper. The calls are a phishing scam and are not from CUNA. The automated messages hit Sunday morning and told recipients that their ATM or debit card had been deactivated, said the Daily Journal (March 9). Several recipients contacted the newspaper. The calls went to customers and members of a variety of financial institutions, including people who do not have an ATM or debit card. One woman called the number in the message and was asked for her bank account number. She knew her bank wouldn't call and ask for information it already had, so she hung up. Others who called the number were asked for their bank account number, PIN and the card's security code. The calls allegedly came from overseas. Similar calls were received in Greeley, Colo., this time using the names of Weld Schools CU, a Greeley-based credit union, and the local Wells Fargo Bank (Greeley Tribune March 9). The credit union told the local newspaper it had received 200 calls about the calls, which were directed to both members and non-members. Authorities warned consumers not to give out numbers and key information to callers.

Michigan candidate proposes state-owned bank

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LANSING, Mich. (3/11/10)--The Michigan Credit Union League will monitor a proposal made by a state gubernatorial candidate who announced a plan Tuesday to create a state-owned bank to serve as a lending "backstop" and help ease the credit crunch. The plan, according to Lansing Mayor Virg Bernero, a Democrat running for governor, would mimic the state-owned Bank of North Dakota, which works with banks in that state to help finance business growth, provide student loans and offer other banking services (The Grand Rapids Press and March 10). "On the surface, we're opposed to the concept of a state bank that would compete against credit unions," David Adams, president/CEO of the Michigan Credit Union League, told News Now. "However, we remain open to studying the proposal further to see if this is something we might support," he added. The Bank of North Dakota is backed by the state, not by the Federal Deposit Insurance Corp. A proposed Michigan bank would be capitalized with assets of the state and a bond sale, said Bernero. North Dakota's bank has existed since 1919, when residents organized it, along with a state-owned grain elevator and mill, in defiance of big out-of-state banks and mill operators hindering the state's farmers early in the 20th century. In February, the Association of Vermont Credit Unions (AVCU) addressed that state's House Ways & Means Committee because state lawmakers were interested in exploring how a state-owned bank similar to the Bank of North Dakota would work in Vermont (News Now March 1). AVCU said its president/CEO, Joe Bergeron, and others addressing the panel had more questions than answers about the merits and practicality of a Bank of North Dakota clone. The association said that other legislatures--primarily in Florida, Oregon and Washington--were also looking into a state-owned bank.

Federation offering 1M to match CDCI investments

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NEW YORK (3/11/10)--To help more community development credit unions (CDCUs) qualify for Community Development Initiative (CDCI) funds, the National Federation of Community Development Credit Unions' board has voted to make an additional $1 million in secondary capital available as matching funds for member CDCUs that might not be immediately eligible for CDCI investments. The initiative from the U.S. Department of the Treasury has launched a program in which low-income credit unions (LICUs) certified as Community Development Financial Institutions (CDFIs) can obtain up to 3.5% of their assets as secondary capital, which will count toward their regulatory net worth. Eligibility for the CDCI program will be determined by the National Credit Union Administration (NCUA) along with the Treasury Department. Highly rated credit unions that are well-capitalized are expected to qualify readily, in the absence of material negative trends. Credit unions that fall below that standard may still qualify for funds if they can obtain matching secondary capital from non-governmental sources. Federation Board Chairman Randy Chambers, chief financial officer of Self-Help CU in Durham, N.C., commented on the Treasury’s new initiative. “We believe the CDCI program is a unique opportunity for low-income credit unions to rebuild the net worth that was eroded over the past year by the corporate meltdown, share insurance charges, and the troubled economy,” he said. “While our resources are limited, we plan to do whatever we can to help our members access these funds.” The federation has been the primary private-sector provider of secondary capital since 1996. Based on Treasury’s guidelines, the CDCI program will invest secondary capital at 2% for eight years, after which the rate escalates to 9% as an incentive for institutions to repay the money. “We have no doubt that most credit unions will repay CDCI funds by the eight-year mark, so they won't be encumbered by the high rate of funds for the last five years,” said Cliff Rosenthal, federation president/CEO. Applications are due April 2. Credit unions that are not yet CDFI-certified and want to apply for CDCI must submit their certification applications to the CDFI Fund by April 15. They also must submit a secondary capital plan to NCUA by May 3, Rosenthal said. The federation will help CDCUs apply for CDCI funds by providing technical assistance to its members on all aspects of the program and its applications. The federation also offers extensive consulting services to other credit unions interested in applying. For more information, use the link or contact Associate Director of Membership Development, Pablo DeFilippi at or call 800-437-8711, ext. 304.

CUs are the hot thing in Mississippi

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JACKSON, Miss. (3/11/10)--There are many reasons why credit unions “have skyrocketed in popularity” with Mississippi consumers, according to Charles Elliott, president/CEO of the Mississippi Credit Union Association. “First, I would say that people’s awareness of credit unions has increased significantly in the past few years,” Elliott told the Mississippi Business Journal (Feb. 22) in an article headlined “Bye-bye banks? Credit unions are the hot thing.” “Media coverage has been very positive,” he added. “I think people have a lot of confidence and trust in credit unions.” There are 96 credit unions with more than 555,000 members in Mississippi, the publication said. Elliott said he believes there has been a backlash against large banks after some of their lending practices led the economy to slump. Still, credit unions are not viewed as major competitors to banks, he told the Journal. “[Credit unions] only make up about 6% of the money market,” Elliott said. “That number hasn't changed in the past few years.” “Banks are owned by people who have stock in the bank and whatever profits the bank realizes must be paid to the stockholders,” Elliott said. “Our rates and fees are favorable and a large portion of financial institutions have stopped lending. We’ve never stopped lending. Every member owns the credit union.” A Jackson, Miss., credit union manager agreed with Elliott. “We don't have the overhead that banks do,” Charlotte Hutchison, who manages the Mississippi Highway Safety Patrol FCU in Jackson, told the Journal. “… Since members own the credit unions, we return profits to members and not shareholders.”

CU System briefs (03/10/2010)

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* ST. LOUIS (3/11/10)--Rep. Russ Carnahan (D-Mo.) met with 15 Missouri credit union
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representatives at Neighbors CU, St. Louis, to discuss credit union issues, with a focus on member business lending (MBL). Carnahan, a co-sponsor of H.R. 3380, which would raise the MBL lending cap, said, "I've always believed in what credit unions offer the community, but credit unions are especially critical in this turbulent financial climate. Credit unions are uniquely equipped to help make loans to small businesses, and credit unions are going to be part of the solution going forward. He also listened to credit unions' concerns about interchange fees, overdraft protection, mortgage cramdown and the proposed community reinvestment act. Most of the detrimental issues facing credit unions don't have traction in Congress, he said. From left: Mike O'Brien, St. Louis Community CU; John Servos, Neighbors CU; Brian Eyestone, Southpointe CU; Laura Alfeldt, First Community; Charlie Waalkes, American Eagle; Rep. Carnahan; Rosie Holub, Missouri Credit Union Association (MCUA); Larry Giesing, Neighbors, Nina Pilger, lst Financial FCU; Dennis Sommer, Alliance CU; Lisa Farnen, Electro Savings CU; Hubert Hoosman Jr., Vantage CU; Micki Milonas, West Community CU; Jana Wolfe, First Missouri CU; and Doug Macias, MCUA. (Photo provided by the Missouri CU Association) ... * LATHRUP VILLAGE, Mich. (3/11/10)--Michigan First CU last week launched its online business banking website,, for small businesses (Investment Weekly News March 6). The new program, branded as the Business+Community business banking program, offers financial tools and resources that businesses need to grow. It offers products traditionally found at big banks plus other more unique products such as flexible loans, low-cost business checking or an innovative financial solution ... * HUTCHINSON, Kan. (3/11/10)--The board of directors at Hutchinson (Kan.) CU voted to distribute a combined $83,000 to members in the form of a member participation bonus. The bonus was paid Feb. 28 and based on the amount of dividends a member earned and/or interest that was paid on loans during 2009. "The credit union's volunteer leadership is credited with having the spirit to make the bonus decision, balancing it against the demands of regulatory requirements, growing expenses and today's economic uncertainties," said a letter in March 9) ... * FLINT, Mich. (3/11/10)--Robert C. White of Mt. Morris, Mich., died Feb. 18 at the age of 81. He was general manager of the Flint (Mich.) Area School Employees CU for more than 30 years, said the Michigan Credit Union League (MCUL) (Michigan Monitor March 9). White began his career with the credit union as a part-time employee in 1957 and was hired as the credit union's first, full-time general manager in 1959. Under his management, the credit union grew from $1.9 million in assets and less than 2,500 members to a $120 million institution with nearly 20,000 members before he retired in 1993. According to Pat Hagedorn of the credit union, White was"instrumental in laying the groundwork for the credit union and "taught many of us through his example" about the credit union philosophy. White was active in the credit union movement and heavily involved in MCUL committees and Flint Chapter activities. Funeral services were held in Mt. Morris. White is survived by his wife, five children and many grandchildren, nieces and nephews ...

Georgia regulator former NASCUS chair to retire

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ATLANTA (3/11/10)--George Reynolds, senior deputy commissioner of the Georgia Department of Banking and Finance and a former chair of the National Association of State Credit Union Supervisors (NASCUS), is set to retire May 1. Reynolds has worked for the department for 34 years as an examiner, deputy commissioner for supervision, and as senior deputy commissioner. The department oversees regulation of state-chartered credit unions. “We will certainly miss him,” Judy Newberry, Georgia’s deputy commissioner for legal affairs, told News Now. “He has made tremendous contributions to the department.” Reynolds was elected to the NASCUS board in 2006 and served as chair from 2007-2009.

Plant closing to have no impact on CU

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ATHENS, Pa. (3/11/10)--An Ingersoll-Rand plant closing in Athens, Pa., scheduled for December, will have no impact on Ingersoll Rand FCU in the city, said the CEO. The company is going to consolidate its Athens plant into its operation in Southern Pines, N.C., Ingersoll Rand said Monday (The Daily March 9). The credit union has more than 7,000 members with several select employee groups, and only a small percentage of its membership--about 199 members--were employed by Ingersoll Rand, said Michael Viselli, CEO of the credit union. The credit union is poised to help members affected by the plant closure, Viselli told News Now. “We’ll basically perform a one-on-one analysis of their whole financial picture,” he explained. “Based on that, we’ll set up a strategy to review their assets and to keep up with their financial obligations with us and others. Some tools we could use would include loan extensions, modifications and temporary interest rate changes. “Whatever is at our disposal, we’ll put to their benefit,” he added. With the imminent plant closing and the fact that the credit union serves other diverse groups, Ingersoll Rand FCU could have a name change, Viselli said. “We’ve considered it before, but put it on the back burner because we have a 49-year history with the name,” he added. “With these changes we could possibly look at alternatives that reflect what we are now, as opposed to what we were before.” Ingersoll Rand FCU has $56.8 million in assets.

WYCUP celebrates 10 years serving young CU pros

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MADISON, Wis. (3/11/10)--The World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) Scholarship Program celebrates its 10th anniversary this year.
Click to view larger image Young Credit Union People Scholarship Program winners during last year’s ceremonies were, from left: Amy Stanton, U.S.; Carolyne Luvembe, Kenya; Ross Lambrick, Australia; Julie Ferguson, Ireland; and Jeff Rout, Canada. Presenting the honors at the 2009 World Credit Union Conference (WOCCU) in Barcelona were WOCCU President/CEO Pete Crear (third from right); WOCCU Chair Barry Jolette, U.S.; and WOCCU Director and Awards Committee Chair Ron Hance, U.S. (Photo provided by World Council of Credit Unions)
WOCCU is accepting nominations for this year’s WYCUP program, which promotes international education and networking opportunities for credit union professionals and dedicated volunteers under age 35. The deadline for nominations is June 7. “The WYCUP program was an excellent opportunity to broaden my perspective through networking with peers from around the world,” said Carolyne Luvembe, education and training officer for Kenya Union of Savings and Credit Cooperatives, Nairobi. She earned a WYCUP scholarship at the 2009 World Credit Union Conference in Barcelona, Spain. “It also provided an opportunity for me to learn how to think in a more dynamic way,” she added. More than 400 young credit union professionals and volunteers have passed through the program, said WYCUP founder Dave Grace, WOCCU vice president of association services. “We’ve seen national programs in Australia, Canada, Ireland, Poland and, more recently, in the U.S. begin as a result of WYCUP's influence and effectiveness,” Grace said. The program seeks individuals who have already made significant contributions to the development of their credit unions or regional or national credit union systems and who have demonstrated the potential to employ their talents at the international level. Credit unions and credit union organizations that are WOCCU members can nominate their next generation of leaders to compete for the WYCUP Scholarship. To be eligible for the scholarship, nominees must:
* Be sponsored by their credit union or credit union organization to attend The 1 Credit Union Conference--a combination of WOCCU's World Credit Union Conference and the Credit Union National Association’s America's Credit Union Conference--in Las Vegas, July 11-14; * Be 35 years old or younger on Jan. 1; and * Submit a completed nomination form to WOCCU with all the necessary supporting materials by June 7.
The WYCUP Scholarship, which consists of an all-expense-paid trip to the 2011 World Credit Union Conference in Glasgow, Scotland, will be awarded to five recipients at the 2010 Las Vegas conference. WYCUP nominees, regardless of award status, will be formally recognized in Las Vegas and invited to take part in events and networking sessions organized specifically for participants under age 35. All conference registrants age 35 and under also qualify for a discounted registration fee. For more information, use the link. For questions about WYCUP, contact Liliana Tangwall or call 608-395-2043.

Report Did credit crisis hurt lenders accurate pricing

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NEEDHAM, Mass. (3/10/10)--Credit union members, like other consumers, have shifted from spenders to savers during an all-time low interest-rate environment. Now credit unions must prepare to deal with members' price sensitivity on both the deposit and lending sides--while trying to rebuild balance sheets damaged by the economy and a record low interest rate environment. Lenders may have forgotten the importance of accurately pricing products and services in the wake of the credit crisis, according to TowerGroup, a Needham, Mass.-based research and consulting firm. The trend, which is affecting all financial services providers, was noted in a TowerGroup Viewpoint by Bobbie Britting of the firm's consumer lending division (TowerGroup Newsletter March 9). The reinvented, more sophisticated forms of pricing management such as price optimization and profit-based pricing can help institutions adjust to the new economy, Britting said. TowerGroup recommends that lenders make better use of data and analytics to offer the right product and price for each member/customer segment. Key findings include:
* Sophisticated pricing capabilities can take the new account decision from "Yes or no?' to "What level of profitability can the institution except to achieve based on the deal structure?" * In the midst of the recession, many lenders in the U.S. and the United Kingdom abandoned their emerging price optimization capabilities. * The flight of consumer funds into insured deposits continued from early 2008 through 2009 as consumers moved from borrower to saver economy. * Some institutions are winning the race to grow balances, but only a handful of banks are able to forecast consumers' price sensitivity and factor this demand variable into their pricing strategies. * Adoption of sophisticated pricing strategies on both sides of the balance sheet will best position institutions to differentiate on factors beyond pricing. * Financial services institutions in countries that were less affected by the credit crisis-- such as Australia, Canada and South Africa--have continued to adopt advanced pricing and profitability management strategies.

Three men charged with gas pump card skimming

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LOS ANGELES (3/10/10)--Prosecutors Monday charged three men suspected of stealing $2 million by using credit card skimming techniques at gas pumps in the Los Angeles area. The trio--Albert Jose Gonzalez, Josue Gustavo Albizuras and Cesar Vasquez--have pleaded not guilty to nearly two dozen criminal charges of conspiracy, grand theft, identity theft and computer access fraud (L.A. Now March 8). The three were arrested Feb. 25 after a three-year investigation by the L.A. County Sheriff’s Department and Federal Bureau of Investigation. The suspects are being held on bail of $2 million each. They are accused of using skimming devices on pay pumps at gas stations to record credit and debit card information and then downloading the information to computers and other devices to steal money, the newspaper said. Police recovered 10,000 stolen credit and debit card numbers, and computers, digital storage devices, cell phones and other equipment used to make and encode credit and debit cards. The men face a maximum of 20 years in state prison if convicted on all counts.

Illinois CUs new partner to help with Hispanic outreach

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NAPERVILLE, Ill. (3/10/10)--The Illinois Credit Union League (ICUL) and Iowa-based Coopera Consulting have partnered to help Illinois credit unions with Hispanic outreach. The league is collaborating with Coopera Consulting to strengthen its Hispanic outreach program because Coopera has developed a comprehensive tool that complements its REAL Solutions efforts. Dan Plauda, ICUL president/CEO, said he is confident the collaboration will elevate ICUL’s underserved initiatives and help expand credit union service to a segment of the population that needs it most. “Without the benefits of a credit union relationship, these consumers are forced into a fringe economy that preys upon the working class,” he said. Coopera Consulting will help motivate and assist credit unions in successfully serving the Hispanic community. As a REAL Solutions participating league, ICUL is committed to a partnership with the National Credit Union Foundation, to help Illinois credit unions better help underserved populations. The Illinois Credit Union Foundation also has committed to providing grant dollars to help credit unions reach underserved populations and pursue other strategic initiatives. Coopera created the Hispanic Opportunity Navigator (HON), an assessment of the opportunities and challenges in Hispanic outreach that are unique to a credit union. After completing the assessment, a credit union will have the prioritized steps necessary to become the financial institution of choice serving Hispanics within its field of membership, said the league. Depending on the size of the credit union and the breadth of services, the cost of the HON and a year of Coopera’s consulting typically ranges from $400 to $1,300 per month. Illinois credit unions can apply for league grants to partially offset the costs. The Credit Union National Association also has a partnership with Coopera for Hispanic outreach.

IUSA TODAYI Check out cards issued by CUs

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MADISON, Wis. (3/10/10)--Consumers should check out credit cards issued by credit unions to cope with an environment of new credit card fees and rules changes, USA TODAY said Tuesday. In a column titled, “How to cope with new fees, rules changes on credit cards,” Sandra Block, the newspaper’s personal finance columnist, cites a July 2009 survey by the Safe Credit Card Project at The Pew Charitable Trusts. “Check out cards issued by credit unions. Only 11% of cards issued by the largest credit unions charge an annual fee, versus 16% of cards from major banks ...” Block said. “The median annual fee for credit union-issued cards was $15, versus $50 for cards issued by the largest banks, the survey found," she wrote. “Credit cards issued by credit unions also have lower penalty fees,” she added. “The median late payment fee for credit union cards is $20, versus $39 for bank-issued cards, the survey found.” To read the column, use the link.

Robbery bill passes Pennsylvania House

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HARRISBURG, Pa. (3/10/10)--A bill that would expand the definition of a robbery has passed the Pennsylvania House, according to the Pennsylvania Credit Union Association (PCUA), which supported the measure. SB 605, commonly known as the Robbery Bill and sponsored by Sen. Mike Waugh (R-York), passed the state House unanimously, 193-0 (Life is a Highway March 9). The bill would expand the definition of a robbery of a financial institution to include verbal or written threats. The offense for a crime using these methods would be moved from a misdemeanor, with no mandatory sentencing, to a felony. PCUA said that due to a notable increase in robberies, it worked diligently with members of the General Assembly for the legislation.

CU System briefs (03/09/2010)

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* HARRISBURG, Pa. (3/10/10)--More than 70 people met with U.S. Rep. Paul Kanjorski (D-Pa.) Monday night at a special event in Old Forge in Pennsylvania. Event co-chairs included Deb Peters, CEO, Incol CU; John Kebles, retired CEO, Choice One Community FCU; and Jim McCormack, Pennsylvania Credit Union Association (PCUA) president/CEO. Kanjorski updated the group on bills affecting credit unions in Washington. He told the group that the member business lending (MBL) legislation (seeking to raise the MBL cap from 12.25% to 25% of assets) will probably be attached to a futures job bill, and that overdraft and interchange bills will probably not move this year ... * ABERDEEN, Md. (3/10/10)--Thanks to donations from its members and the Barnes & Noble bookstore in Bel Air, Md., Aberdeen Proving
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Ground (APGFCU) collected more than 500 news books and educational items for local schools and charitable organizations as part of the credit union's "Jump Start to Reading" book drive in January. The Aberdeen, Md., based credit union distributed the items in February and early this month to its partner schools in Harford and Cecil Counties, the Spousal Abuse Resource Center, and Faith Communities and Civic Agencies United Homeless Shelter in Harford County. In the photo, APGFCU'S Education Team shows off some of the donated books. (Photo provided by Aberdeen Proving Ground FCU) ... * SPOKANE, Wash. (3/10/10)--Global CU, based in Spokane, and Gonzaga
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Athletics have teamed up for the fifth year to invite fans to Follow the Zags to the WCC Basketball Championships. This past weekend the $370 million asset credit union footed the bill for airfare and hotel accommodations for Mary and William Shelton to attend the championships in Las Vegas. There, the Sheltons cheered on their team with Gonzaga advancing to the title WCC Championship Game, which will air Monday at 6 p.m. on ESPN. From left, Global CU Senior Vice President Ron McKay presents the Sheltons with the trip, which was announced during the final Gonzaga Men's Basketball game of the regular season on March 2. (Photo provided by Global CU) ... * ARNOLD, Mo. (3/10/10)--Eric Setzer, who worked with small credit unions in eastern and central Missouri from April 1992 through August 2002 as a field rep with the Missouri Credit Union Association (MCUA), died Feb. 18 after a five-month battle with a brain tumor. He was 62. In 1993, Setzer helped organize a new credit union--Southwest Counties School Employees CU--in Neosho, Mo. During his tenure at MCUA, he and fellow field rep Rich Wymore conceived the idea of holding Small Credit Union Roundups around the state every fall. In October 1996, Setzer spent three weeks in Swaziland, Africa, working with the World Council of Credit Unions. He is survived by his wife, daughter and father ...

Cybercrooks step up targeted attacks by 50

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NEW YORK (3/9/10)--Cybercrooks or eCrime syndicates are expanding the base of the brands they exploit for online fraud far beyond major financial institutions and online merchants, said the Anti-Phishing Working Group (APWP) in its fourth quarter Phishing Activity Trends Report. Now they're targeting the big phish hoping to hook key individuals in corporations and institutions. The number of hijacked brands reached a record 356 in October, up nearly 4.4% from the previous record of 341 in August 2009, said APWG. "No brand is safe from the threat of spoofing for the purposes of online fraud," said APWG Secretary General Peter Cassidy. "Once, only the largest banks were targeted. Now, every kind of enterprise from banks and credit unions of all sizes to charities, to, in a recent case, a hardware manufacturer, are now seeing their brands exploited in all manner of fraud scheme," he added ( March 8) . The number of unique phish reports declined nearly 29% from 40,261 in August. However, the decline masks a trend that is of "grave concern" to APWG members: a substantial increase in phishing focused on high-value targets--such as personnel with treasury authority. The increase in spear-phishing and whale phishing, which target individuals inside of corporations or those who are of "high net worth," means phisher and malware attackers are trying to gain access to corporate online banking systems, corporate virtual private networks or VPNs, and other online resources, according to APWG. While some research indicates the volume of phishing e-mails is decreasing, it is important to note that these attacks are targeting more varied industries with the intent on generating greater financial success, says Cyveillance, a cyber intelligence company. While banks and credit unions continue to be the top targets of phishers, governments and the technology and energy industries are now seeing growing number of attacks, said the company. During the second half of 2009, Cyveillance found that first time phishing targets grew to 399 brands, nearly double the number during the first half of 2009 (Investment Weekly News March 13). More than 36,000 confirmed, unique attacks were noted per month in the same period, said Cyveillance. That means phishing attacks continued to reel in their victims--despite advances made in consumer education and added protections implemented by security departments within the targeted organizations.

Michigan regulator Ponzi scheme by CUSO broker

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LANSING, Mich. (3/9/10)--Michigan's Office of Financial and Insurance Regulation (OFIR) issued a cease-and-desist order against a broker who sold unregistered securities in a multi-million dollar Ponzi scheme while operating out of a credit union service organization in Ann Arbor. OFIR also has issued orders to revoke securities and insurance licenses of Mark Carpenter, who sold investment products through his company, TGBG Financial, while employed with CUSO Financial Services from June 2007 through October 2008. CUSO Financial maintained a securities branch office inside MidWest Financial CU. The credit union and CUSO Financial were not involved in the scheme. "This was a multi-headed Ponzi hydra," said OFIR Commissioner Ken Ross in a press release. "Bank records indicate that Carpenter got scammed and then set up his own scam. We found fraud within fraud involving working people who were robbed of their life savings. These were not high rollers," he added. OFIR said the investments totaled at least $5 million. It identified at least 12 investors who were MFCU members and 20 investors who were also CUSO Financial clients. An OFIR investigation found that in December 2007, Carpenter became a victim of a Ponzi scam involving bogus Arab crude oil bonds and operated by Michael Winans Jr. and his father, gospel singer Michael Winans Sr. of Detroit. Carpenter then sold interests in the phony crude oil bonds to his own clients, forming TGBG (for "To God Be Glory") to funnel funds into the Winans scam, said the OFIR. Carpenter also was involved with other frauds including an alleged gold mine developed by Ronald Brito and his company, GetMoni.Com, a Nevada-based corporation, and an Orlando, Fla. real estate development called the Blue Rose Orlando Project, OFIR said. The regulator said Carpenter transferred large sums to his personal bank accounts and used funds to invest in GetMoni, pay his personal and TGBG's expenses and pay interest or principal payments that were due to earlier investors in a classic Ponzi scheme style. The Winans, Brito and GetMoni.Com also have received cease-and-desist orders from the Michigan OFIR. Carpenter allegedly promised investors they would double their investment with 60 days (or 1,200% annually) and "guranteed" the returns. OFIR said it has accounted for $5 million that Carpenter and TGBG received in the schemes for investment. Roughly 47% was received by GetMoni, 18% by Carpenter and TGBG, 17% by Mike Winans and the Winans Foundation, and 4% by a friend, James Smith and his businesses. The remaining 14% was disbursed to investors as alleged interest payments, said OFIR. OFIR has handed the results of its investigation to law enforcement agencies. Violations of the Uniform Securities Act are subject to a criminal penalty of a maximum of $25,000 for each violation, or imprisonment of up to 10 years, or both.

NASCUS wants larger state role in corporate rules

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ARLINGTON, Va. (3/9/10)--The National Credit Union Administration (NCUA) will need to balance reconsideration of regulatory oversight of the corporate system with the ability of the system to recapitalize going forward, said the National Association of State Credit Union Supervisors (NASCUS), in a comment letter Friday about NCUA's proposed rule, Part 704, Corporate Credit Unions. NASCUS is also seeking enhanced joint federal and state oversight as well as state law preservation over certain areas of corporate regulation and governance, the letter said. During the rulemaking process, NASCUS state regulators worked with NCUA to provide the state regulatory system's perspective. NASCUS commended NCUA for moving forward toward a final rule and made these recommendations:
* Restore diversity to the corporate system by allowing state regulations to vary from NCUA's section 704; * Provide state regulators access to federal corporate credit union books and records; * Amend the proposed Prompt Corrective Action (PCA) provisions to mirror the natural person credit union PCA provisions regarding consultation and cooperation with state regulators; * Limit governance provisions to federal corporate credit unions; and * Promulgate the stress testing and asset liability management provisions as thresholds rather than inflexible limits.
NASCUS--as did the Credit Union National Association in its comment letter to NCUA--identified legacy assets as a critical area to consider. (See related story: "With tweaks, NCUA corporate plan protects system.") For NASCUS' full comment letter, use the link.

Fowler named South Carolina league presidentCEO

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COLUMBIA, S.C. (3/9/10)--The South Carolina Credit Union League board of directors has named Steve Fowler the new president/CEO of the South Carolina Credit Union League & Affiliates (SCCUL). Fowler has 38 years of experience in the state’s credit union movement. “This is a critical time in the credit union industry and the leadership role at the association has never been more important,” said league Chairman Scott Woods, who is president/CEO of South Carolina FCU in North Charleston. “We worked hard to align our strategy for strong advocacy at the association level with an individual who understands the needs of our member credit unions.” Fowler has been interim CEO since Jan. 1 and is a veteran to the credit union political scene, having served as the league executive vice president and principal lobbyist. In that position, Fowler already led SCCUL member services such as conferences and training, internal audit services and accounting services. His role includes management of the South Carolina Service Corp., which provides fee-based services to league-affiliated credit unions. Fowler joined SCCUL as an auditor in 1971. Since then, he has worked in member services and managed the league’s service corporation and corporate credit union--now merged with First Carolina Corporate CU in Greensboro--before moving into advocacy and association services.

Maryland lawmakers join Move Your Money groundswell

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ANNAPOLIS, Md. (3/9/10)--The Maryland General Assembly is considering legislation that would give credit unions and state-chartered banks an advantage when bidding to serve state agencies or local governments. The potential legislation comes in the wake of The Huffington Post’s recent Move Your Money campaign, which tells consumers to switch their deposits to credit unions or small banks from big banks that benefited from taxpayer bailouts and now are reluctant to lend ( March 7). “While you should switch banks only if it makes financial sense, the Move Your Money campaign does nudge us to review our relationship with banks,” wrote Eileen Ambrose, personal finance columnist for the newspaper. “That’s something all of us should do more regularly.” “Credit unions also are fans of the Move Your Money campaign, and some have started using the theme in their marketing, Mark Wolff, spokesman with the Credit Union National Association,” said in the article. The New York Times also noted consumer animosity toward big banks in an article titled “A Banking Battleground,” by Hannah Fairfield. “Tales of reckless lending and huge compensation for executives have led to major animosity toward major banks,” Fairfield wrote. “A ‘Move your Money’ groundswell was ignited in January by Arianna Huffington of The Huffington Post and Rob Johnson, director of the Economic Policy Initiative at the Roosevelt Institute. Their hope is to spur reform at megabanks by encouraging people to move their money to smaller community banks and credit unions.” To read the articles, use the links.

Good Samaritans hit by check scam

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SHEBOYGAN, Wis. (3/9/10)--Two Good Samaritans fell victim to a check scam outside of a Madison, Wis. credit union, according to local media reports. On two different occasions, a man approached a credit union member and asked for help in cashing a personal check. The man said he and his family were stranded in Madison on their way back from New Jersey. He needed to cash a check to get back home and didn’t have an account with the credit union or an ATM card. He said the credit union wouldn’t cash the check (The Sheboygan Press Feb. 28). The man suggested that he could write a personal check payable to the members, who could cash the checks and keep $10 for their trouble. Both members fell for the scam, and neither kept the $10. The checks were for $480 each. The scammer received $960 because the checks were from with an account closed because of nonsufficient funds, the newspaper said. Last month, Wisconsin Attorney General J.B. Van Hollen warned Wisconsin consumers to be on the lookout for fake check scams. Some scams affecting consumers include those that require individuals to pay taxes on contest winnings, or those that involve a person in a foreign country asking for help in transferring a large sum of money to the U.S. The victim is sent a check to initialize the transfer, but after the money is sent back, the individuals usually discover the check was forged. The victim loses money as a result.

Students get lesson in investment fraud

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TREVOSE, Pa. (3/9/10)--With little or no credit history, high school students are prime targets of identity theft scams, says TruMark Financial CU. To address the growing problem, the Trevose, Pa.--based credit union sponsored an investment fraud presentation to more than 400 seniors at Plymouth Whitemarsh High School, Plymouth Meeting, Pa. Doug Hassenbein, representative from the Pennsylvania Securities Commission, discussed investment scams, identity theft, and affinity fraud through social media and other online channels. As part of TruMark Financial's financial literacy program, credit union employees visit local high schools and discuss topics such as identity theft, budgeting, and the potential of credit card debt. The presentations provide third-party expertise and complement the existing personal finance curriculum. TruMark Financial has more than $1.2 billion in assets and 90,000 members.

CU System briefs (03/08/2010)

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* SAN ANTONIO (3/9/10)--Matt Bonner, forward/center for the San
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Antonio Spurs in the National Basketball Association, visited Lana Longworth’s class at Harmony Elementary School in East Central San Antonio to read a special book. The visit was a reward for the young winners of the grand prize in the High Five Readers Challenge, presented annually by San Antonio FCU (SACU) and other sponsors. The $2.8 billion-asset SACU is the “Official Credit Union of the San Antonio Spurs,” and has been involved with the High Five Readers Challenge for eight consecutive years. Bonner read Tacky and the Winter Games by Helen Lester, which coincided with the Winter Olympic Games held last month in Vancouver, British Columbia. The High Five Readers Challenge is extended to all Bexar County elementary schools each year. Its purpose is to help students in first through fifth grade to exercise their minds and imaginations by spending more of their free-time reading (Photo provided by San Antonio FCU) … * CLAYMONT, Del. (3/9/10)--Eagle One FCU gained 186 new members
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during a recent membership drive where individuals who signed up with the credit union received a $10 reward and were entered into a drawing to win a flat screen TV, according to the Delaware Credit Union League (Together March 1). Eagle One is based in Philadelphia but also serves members with a branch in Delaware. Names of members who signed up for any new e-services during the drive were placed into a drawing to win a $100 gas card. Winners were drawn on Dec. 31. Pictured are Alecia Grantham, grand prize winner, and Jose Rosario, credit union loan officer. (Photo provided by the Delaware Credit Union League) ...

CUNA sets record straight on CU tax treatment

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WASHINGTON and MADISON, Wis. (3/8/10)--Credit Union National Association (CUNA) economists have analyzed a study in Georgia about the impact of credit unions' tax exemption and determined the study is not a complete look at the exemption. The study report--written by Thomas G. Noland of the University of South Alabama and Edward H. Sibbald, a BB&T executive in residence at Georgia Southern University--was published in Southern Business Review (Winter 2010) and compares credit unions in Georgia with similar-asset Georgia banks. They state the "original justification for the tax exempt status of credit unions was the idea that credit unions served lower income borrowers and depositors." "This is not, however, a complete list for the justifications for tax exemption," CUNA Senior Economist Steve Rick wrote in an analysis for CUNA. "They left out that credit unions are not-for-profit, democratic, financial cooperatives, owned by their members. And, credit unions' boards of directors are mostly unpaid volunteers, elected by members." The paper also omitted "that credit unions, with limitations on who they can serve and restrictions on products and services, also have a social mission to provide service to people of modest means as part of their member base," Rick wrote. The Internal Revenue Code acknowledges that credit unions are recognized as tax-exempt "because they issue no capital stock. Under the IRS comments for 501(c)(14) Credit Unions and other Mutual Financial Organizations, the IRS provides a very clear link between tax exemption and the lack of capital stock," said Rick. The Georgia report said the "business model of a credit union is fundamentally different than a commercial bank," but Rick noted the comparison is "apples to oranges," with no attempt to control for the different asset and liability mix between credit unions and banks. The credit union operating platform is designed and staffed to handle large volumes of smaller accounts and smaller loans, Noland and Sibbald said. Banks have eschewed this business area due to the excessive costs--and lower profitability--involved. They note that consumer loans have declined and account for only about 7% of a bank's loan. Credit unions have stepped into the lending void to provide credit to many low-income borrowers who cannot get credit at a bank. Rick cited 2008 HMDA data showing credit union loan approval rates are about 10% higher than non-credit union lenders (69.7% overall to 59.1%, respectively). For low income populations, credit unions' mortgage approval rates were 57% compared with banks' 47.3% , he said. In a "Tax Exemption Benefits" section, Noland and Sibbald list four possible ways the tax exemption benefit would accrue to credit union members: higher deposit rates, lower loan rates, broader extension of consumer credit, and higher retained earnings to boost capital. "The authors excluded from their list, the higher operating costs needed to service many small balance checking accounts and savings deposits, and the lower fees charged by credit unions as compared to banks," said Rick's analysis. The authors write that a previous study used aggregate data does not support the first two benefits, but Rick notes "a quick analysis of bank vs. credit union interest rates, either in your local newspaper or from a reputable interest-rate data source like Datatrac, completely disproves this assertion." Georgia credit unions on average charge 1.94 percentage points less on a used-car loan than did banks during third quarter 2009, according to Datatrac. "This resulted in a $41 million savings for Georgia borrowers," said Rick. "On the deposit side, Georgia credit unions paid 0.42 percentage points more than Georgia banks on money market accounts," a $7 million benefit for Georgia's savers. The authors' conclusion that Georgia banks grew faster than credit unions in the five-year study "is one piece of evidence for the argument that credit unions' tax exempt status has not put banks at a competitive disadvantage," Rick said. The report also concluded that "Banks are generally more profitable than credit unions, but due to the credit unions' tax exempt status, banks wind up earning less income as a percent of assets." "That is exactly what is to be expected from the credit union tax exemption: credit union serving high-cost low-profitability customers, which leads to relatively low earnings," said Rick, "but being able to accumulate capital at a faster pace than banks because credit unions cannot rely on shareholders for additional capital, cannot issue preferred stock and cannot count on capital contributions for a parent holding company." The Georgia report raises a fundamental policy question: "How the federal government can justify backing the National Credit Union Administration's guarantee on deposits with the full faith and credit of taxpayers when these institutions do not pay federal taxes." "The answer is simple," said Rick. "The benefit credit unions offer millions of Americans in the form of lower and fewer fees, lower loan interest rates and higher deposit interest rates is greater than the foregone federal tax revenue. "Also, let's not forget that the cost of the federal government's bailout of the Federal Savings and Loan Insurance Corp. (FSLIC) two decades ago far exceeded the federal taxes paid by the savings and loan industry during its entire history," Rick concluded.

CUNA Mutual contribution to Haiti relief hits 45K

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MADISON, Wis. (3/8/10)--Due to a tremendous response from employees, CUNA Mutual Group's contribution to the Haiti credit union disaster relief efforts has reached $45,000, said CUNA Mutual Thursday. More than 225 CUNA Mutual employees donated a total $15,000. CUNA Mutual's corporate contribution and matching funds increased that amount to $45,000. The contribution will assist the Caribbean country's recovery from the January earthquake. It will be administered through the U.S. credit union community's CUAid for Disaster Relief in Haiti. was activated by the National Credit Union Foundation (NCUF), in conjunction with the World Council of Credit Unions' Worldwide Foundation for Credit Unions, after the earthquake struck.. Donations raised through CUAid for Disaster Relief in Haiti will be disbursed by the Worldwide Foundation. Jill Stevenson, marketing and communications coordinator for NCUF, told News Now Friday that total donations raised via CUAid system is $418,416.62. That is in addition to funds raised through the Worldwide Foundation. The overall total from the Worldwide Foundation is just over $800,000, said Valerie Breunig, foundation executive director. Others reporting philanthropic efforts related to Haiti include Andrews FCU, Suitland, Md., which collected more than $7,100 in donations from employees and members for the effort. "The need for assistance is ongoing, and we are proud to support the Worldwide Foundation for Credit Unions and these other organizations in their efforts," said Chris McDonald, Andrews FCU president/CEO. Some credit unions have also given to the American Red Cross. On Feb. 26, Altura CU, based in Riverside, Calif., presented a $42,000 check to that organization for Haiti earthquake relief after CEO Mark Hawkins issued a call for each member to contribute $1. It used online banking to make giving easier. "By pooling our donations, we were able to make a significant contribution," he said. Students, teachers and staff at Riverside Unified School District schools also contributed more than $21,000 to the fund. "It was really wonderful to see our members embrace this concept and contribute what they were able to, to help others," said Hawkins. To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to:

Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705, USA

Donations also can be made online with a credit card at For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions can support WOCCU's relief efforts by donating through For more information, use the links.

CU System briefs (03/05/2010)

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* COLORADO SPRINGS, Colo. (3/8/10)--Pueblo City (Colo.) Employees FCU officially merged with Aventa CU, Colorado Springs, March 1. Both credit unions serve employees of utility and water departments, firefighters, police officers and other city administration staff (Colorado Springs Business Journal March 4). The resulting credit union, which will retain Pueblo’s name, will have $150 million in assets and 18,000 members (News Now Oct. 27) ... * ATLANTA (3/8/10)--Delta Community CU raised more than $323,000 to help Children’s Miracle Network, Healthcare of Atlanta, American Cancer Society Relay for Life and five area high schools. The figure is part of the $344,000 total the credit union donated to community initiatives in 2009. The credit union raised the money through local and out-of-state branch fundraisers (The Citizen March 4). Delta Community CU, Atlanta, has $3.5 billion in assets ... * HARRISBURG, Pa. (3/8/10)--A credit union branch manager from Valley 1st Community FCU, Monessen, Pa., helped an ill man who collapsed at a Walmart where the branch is located, according to the Pennsylvania Credit Union Association (Life is a Highway March 5). PattyLynn Mavrakis saw a man leaning against a wall inside of the store. She approached him and asked him if he needed help. She asked her staff to bring him a chair, and the man collapsed in her arms. She tried to keep him comfortable until paramedics arrived. Mavrakis said working for a credit union has made her more sensitive to helping people, and that her staff calls her "Nurse Ratched" from “One Flew Over the Cuckoo’s Nest.” She is always ready to help someone, Mavrakis said ... * FARMERS BRANCH, Texas (3/8/10)--Former Texas Credit Union League employee Marilyn Haisten Dumont died Feb. 25. She worked as editor of the Texas Leaguer from March 1978 to December 1982 (LoneStar Leaguer March 5). Dumont also has worked at America’s CU, Garland, Texas, for the past 10 years as vice president and general counsel. She is survived by her husband, daughter and two granddaughters ...

SW Corporate Frustration with banks fuels deposit surge

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FARMERS BRANCH, Texas (3/8/10)--The first quarter usually means an increase in liquidity at credit unions--but last year, the liquidity surge of the first quarter never abated, according to the Texas Credit Union League. A number of reasons have been suggested to explain the rise in liquidity--but one that has not been mentioned is anger with banks, the league said. “There is a lot of anecdotal information that points to consumer frustration--and even anger--about banks,” said Dan Abdill, senior investment officer at Southwest Corporate Investment Services (LoneStar Leaguer March 5). “Consumers are mad at banks and are putting their money into credit unions,” he said. In 2009, $72 billion “poured into credit unions,” according to the league, citing data from the National Credit Union Administration. Of that amount, $14 billion came in the fourth quarter. Stock market uncertainty coupled with the low--or non-existent--rates of return offered to depositors may also play a part in the liquidity surge. “But I tend to think people are voting with their pocketbooks, and they are voting for credit unions,” Abdill said. The article cited three studies indicating consumers’ dissatisfaction with banks and satisfaction with credit unions: the University of Michigan’s American Customer Satisfaction Index, and a study conducted by J.D. Powers and Associates in 2009, and the American Customer Service Index (ACSI). Last year, Southwest Corporate helped credit unions place more than $3.6 billion in term certificates, bank CDs or bonds through its brokerage services department. It also helped more than 700 credit unions complete more than 6,500 investment transactions. “2009 was a very busy year; 2010 looks to be even more so,” Abdill said. Abdill added: “One of the trends we see as credit unions are looking to maximize the return on their investment portfolio is more of them placing funds in bonds. Throughout 2009, and now into this year, we have seen a consistent increase in credit unions investing in agency bullet and callable securities, as well as agency mortgage-backed securities.”

HEW FCU partners with CU in U.K.

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Click to view larger image HEW FCU, Alexandria, Va., and Partners CU Ltd. of the United Kingdom have entered into a partnership. Pictured are from left, Patricia Ellis, chairman, HEW FCU; Kathleen Geary, president/CEO, HEW FCU; and Tracey Schuler, CEO, Partners CU Ltd. (Photo provided by HEW FCU)
ALEXANDRIA, Va. (3/8/10)--HEW FCU of Alexandria, Va., and Partners CU Ltd of Liverpool, Merseyside, U.K., have entered into an international partnership. The two worked collaboratively for two years to develop a strategy to solidify relations between the two organizations. The credit unions seek to enhance their knowledge base of the international credit union movement while “increasing brotherhood among credit unions throughout the world,” HEW said in a release. HEW FCU serves the areas of Washington, D.C. and Maryland and Virginia. Partners serves Merseyside, including the city of Liverpool in the U.K.

Canada proposes to expand CUs as federal entities

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TORONTO (3/8/10)--Canada’s credit unions may be able to expand countrywide if budget proposals released Thursday by the Canadian government to allow credit unions to incorporate as federal entities are approved. Credit unions in Canada currently are provincially regulated. The proposal would put credit unions on a level playing field with big banks, which currently dominate Canada’s financial industry, said Bloomberg (March 5). Credit union market share varies in each province, but credit unions have a strong presence in British Columbia--where credit unions hold up to 25% of residential mortgages. If credit unions are approved to become federal entities, they would face the same rules as banks--which would give them the ability to offer new products. However, like banks, they would not be allowed to sell insurance in their branches, Bloomberg said. The Canadian Bankers Association said in a statement that the industry welcomes new competition into the marketplace, but at the same time, the association said it is essential that “any new type of national financial institution operate on a level playing field with other players in the marketplace.”

Converts sing praises of CUs on IMSNMoney.comI

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NEW YORK (3/5/10)--When MSN columnist Diane Mapes switched her credit card account to a credit union after a bank hiked her credit card interest rate, she began collecting "stories of people who've suffered the last straws and switched" to credit unions. Mapes reported that when she went to the credit union, she got a 6.99% interest rate card and was told there was no balance transfer fee. "That's all it took for me to switch," she wrote ( March 4). There are other reasons to switch. She noted others pointed to "better customer service, higher interest rates on checking or savings accounts or the 'unfair or deceptive' practices used by 100% of bank credit cards" as "reasons they've kicked big banks to the curb." The article includes stories from consumers across the nation singing the praises of credit unions. Mike Phinney of Baltimore switched after his bank changed ownership and his banking contract, and depleted his two accounts by charging penalties for inactive accounts. Liz Washer of Amherst, Mass., said she had been with the same bank for eight years when a mistake resulted in an overdrawn account and penalty fees. A year later it happened again, and the bank' s strident, smug reaction prompted her to move to a credit union. The credit union's policies are more accommodating, and she isn't charged a fee every time she uses an ATM. Heather Murphy of Chandler, Ariz., moved to a credit union after her bank raised its interest rate for cards to 23% when she made one late payment on an account she normally paid off in full each month. The bank told her she wasn't the kind of customer it wanted; it made money by charging fees for customers who were late paying their bills. Michael Hanley, an accountant with small business clients, said credit unions offered his clients better loan rates and business practices. The story mentioned only two drawbacks to credit unions: technology--some credit unions' online banking systems don't interface with QuickBooks--and fewer branches. Mapes' conclusion: the pluses of credit unions outweigh the minuses for many. For the full story, use the resource link.

TCUF awards 136240 in grants

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FARMERS BRANCH, Texas (3/5/10)--The Texas Credit Union Foundation (TCUF) announced it dispersed $137,240 in grants in the first quarter. TCUF’s grants program benefited all Texans, and helped with credit union and chapter grants, disaster relief and financial literacy initiatives (LoneStar Leaguer March 4). The 2010 grants recipients include Texas Credit Union League’s (TCUL) REAL Solution’s program. TCUF has supported the ongoing initiative since its inception in 2007. “The REAL Solutions initiative, whose goal is to empower low-wealth consumers and migrate them from economic uncertainty into economic stability, has been a resounding success among both the credit unions in Texas and the millions of members they serve,” said Mike Delker, TCUL vice president of credit union relations. “It is only with the assistance of the TCUF, both monetarily and operationally, that this has been possible,” he added. Additional grants totaling $90,190 include, but are not limited to:
* Sponsorship of the BizKid$ Financial Education Series on PBS (fourth season); * “Make the Difference” grants to encourage financial literacy during April; * Four Junior Achievement partnerships with credit unions; * A disaster grant for the Haiti earthquake relief efforts; * Two chapter grants to assist with programs; * Two training and conference scholarships for credit union staff and volunteers; and * Sponsorship of the National Youth Involvement Board’s Annual Conference.
Financial Literacy grants totaling $20,050 include:
* Newspapers in Education programs on financial education in El Paso; * A partnership with Cornerstone Financial Education and Texas Youth Commission to educate at-risk teens; and * Financial education programs initiated by credit unions.
“TCUF provides grants and scholarships to support its three areas of focus; financial literacy, professional development and disaster relief,” said Courtney Nickles, TCUF executive director. “We are able to make a difference in the lives of many Texans because of the generous support from Texas credit unions, the Texas Credit Union League and its affiliate, Credit Union Resources, Inc., credit union chapters, corporate sponsorships, Community Investment Fund investors, industry groups and individual donations.” General grants include training calendar grants for credit unions with more than $20 million in assets and Community Service grants. A Community Service grant allows credit unions, chapters, and credit union-affiliated and/or collaborating organizations to assist in local community service activities or financial literacy projects.

Chiles CUs spearhead earthquake recovery

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SANTIAGO, Chile (3/5/10)--The massive 8.8-magnitude earthquake that struck southern Chile Feb. 27 has displaced 1.5 million people and is estimated to have claimed more than 700 lives. Chile's financial cooperatives, assisted by the country's largest credit union, have undertaken efforts to assist their members with emergency relief despite the fact that many credit unions and their branches were damaged or destroyed.
Click to view larger image Chile's Feb. 27 earthquake seriously damaged a branch office of COOPEUCH CU south of the city of Concepcion.
Click to view larger image Chile's earthquake caused significant damage, as seen in this shot taken from the doorway of a COOPEUCH CU branch. (Photos provided by the World Council of Credit Unions)
COOPEUCH, Chile's largest credit union and Latin America's second largest financial cooperative, is collecting funds through its charitable foundation, Fundación COOPEUCH, to help credit unions and their members affected by the quake nationwide rebuild their homes and businesses. World Council of Credit Unions (WOCCU) will make a donation to the credit union foundation from its own disaster relief funds and invites interested individuals and credit unions to contribute funds for Chilean credit union rebuilding and relief. WOCCU staff members are trying to assess earthquake damage to the country's credit unions but have struggled with communication issues, according to Brian Branch, WOCCU executive vice president and chief operating officer. "It is difficult to get information for regions affected by the earthquake because communications capabilities have been destroyed in many parts of the country," Branch said. "But we are encouraged by the fact that COOPEUCH has assumed such a strong leadership role even with many of its own branches damaged or destroyed." Santiago-based COOPEUCH, which has 85 branches that serve 417,000 members nationwide and holds US$1.8 billion in assets, is still collecting information from its damaged branch offices in and near Concepción, 70 miles from the earthquake's epicenter. COOPEUCH is one of Chile's five federally regulated credit unions, part of a movement that also includes dozens of smaller, unregulated institutions from which WOCCU has been unable to collect data. Funds collected through Fundación COOPEUCH will be used to assist all credit unions in rebuilding. The credit union is postponing member dues, minimizing credit card payments and offering reconstruction loans to help members cope with the crisis. In addition, the foundation is helping plan a telethon in Chile to raise a goal of 15 billion Chilean pesos (about US$29.1 million) to finance the construction of 30,000 houses for people whose homes were destroyed by the earthquake. Those interested in making a contribution to Chile's earthquake relief efforts can send their donation via check, credit card or wire to:

Worldwide Foundation for Credit Unions

5710 Mineral Point Road

Madison, WI 53705, USA

Donations may be made online with a credit card. Use the resource link..For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions, 608-395-2055 or Please indicate that your donation is for "Chile Disaster Relief."

Fath Cummins named to CSS board

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MADISON, Wis. (3/5/10)--CUNA Strategic Services (CSS) has two new members on its Board of Directors, announced CSS Board Chair Pat Wesenberg. Sylvia Fath, senior vice president, business services of the California and Nevada Credit Union Leagues, has been appointed to the ex officio position, representing League Service Corporations. Fath replaces Drew Egan, president/chief operating officer of Michigan's CUcorp, who served on the board the past two years. Mark Cummins, Minnesota Credit Union Network president/CEO, was elected to serve a two-year term on the CSS board. He replaces Pat Jury, president/CEO of the Iowa Credit Union League, on the board.

Pa. Lifetime Achievement Award winners named

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HARRISBURG, Pa. (3/5/10)--The Pennsylvania Credit Union Association has announced its Lifetime Achievement Award winners. The awards will be presented during the closing banquet of PCUA’s 76th Annual Convention, May 18 in Atlantic City, N.J. Peggy Bosma-LaMascus, CEO, Patriot FCU, Chambersburg, has been named the 2010 William W. Pratt Professional of the Year (Life is a Highway March 4). In an unprecedented move, PCUA selected two recipients of the 2010 Joseph A. Moore Volunteer of the Year Award: Paul Nyman, Horizon FCU, Williamsport, and John Marisic (posthumously), Pennsylvania State Employees CU (PSECU), Harrisburg. Bosma-LaMascus has been involved in the credit union movement for more than 30 years, and has served as president/CEO of Patriot FCU since 1982. She served on the PCUA’s board from 1987 through 2001. She also was elected as a Credit Union National Association (CUNA) director from 1993-1997. Nyman has volunteered for more than 25 years at credit unions and has served on the board of Horizon FCU since 2000. He is involved in the Susquehanna Valley Chapter of Credit Unions and various community organizations. He also is a member of PCUA’s Governmental Affairs Committee. Marisic, who passed away in early January, most recently served as vice chairman of the board at PSECU, and was involved with the credit union for more than 30 years. He worked as an advocate to support credit union legislative priorities at the state and national level. He was a member of PCUA’s Governmental Affairs Committee from 2003 to 2009.

Governments grant is a scam says CU

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WYOMISSING, Pa. (3/5/10)--Letters from a company called Investors Group claiming to offer grants from the U.S. government as part of a second stimulus package are a scam, according to Discovery FCU, Wyomissing, Pa. A member brought a letter to Discovery dated Feb. 25 from Investors Group Thursday. The group, which said it has offices in Washington, D.C., London and Asia, offered the member a $15,000 grant as a part of the stimulus package. According to the letter, the grant is part of a pilot program that is being implemented by the government through select financial companies. Enclosed with the letter was a check for $2,880. The taxes and administrative fees on the grant were $2,380, with $500 left over for the member to repay outstanding bills. The letter encouraged the member to keep the grant confidential until the fund is disbursed and to contact Grant Processing Officer Tim Young at 202-621-0113 upon receipt of the package. Upon receiving the letter from the member, Discovery prevented the member from being a victim of fraud. “This is a classic scam that asks the recipient of a check to pay the taxes on an award up front and keep any excess funds,” Edwin Williams, president/CEO, told News Now. “We were able to stop the member from negotiating this check and actually called the person on the letter who hung up when pressed for information.”

CU System briefs (03/04/2010)

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* HARRISBURG, Pa. (3/5/10)--Jim Kanaley of Tobyhanna Army Depot FCU, Scranton, was re-elected to the PaCUSC Board, according to the Pennsylvania Credit Union Association (Life is a Highway March 4). His new term will begin at the close of the service corporation's shareholder meeting in May ... * RALEIGH, N.C. (3/5/10)--For the past year, State Employees' CU's 801 Hillsborough Street branch in Raleigh has featured artwork created by 40 students in grades K-12 at North Carolina's Governor Morehead School (GMS) for the Blind and Visually Impaired. The school is a division of the state's Department of Health and Human Services (DHHS). DHHS employees are within the credit union's membership. "Displays like the one at SECU help the community learn about our school and extend the learning environment for our students," said Barbria Bacon, director of the school. Ann Speck, vice president at the branch, noted that the credit union has partnered with GMS to provide financial education for its students and has conducted numerous workshops there. (Photo provided by State Employees' CU) ... * MECHANICSBURG, Pa. (3/5/10)--David S. Colyer, 39, a former president of the Northern Football Booster Club and his wife, Judith A. Colyer, 38, the club's former treasurer, have been charged with stealing more than $16,000 of the organization's funds and spending the amount on personal items. The official charges are theft, receiving stolen property and criminal conspiracy to commit theft and access device fraud. In January, the booster club discovered discrepancies in the treasurer reports and outstanding bills after an annual football banquet. When its board reviewed the club's account at Members lst FCU, Mechanicsburg, Pa., they discovered that the Colyers had obtained an unauthorized debit card. The board said more than $16,417 was missing from the account (York Daily Record March 4) ... * PHILADELPHIA (3/5/10)--Harry S. Nutter, chairman of Sun FCU, died Friday of a heart attack in Philadelphia. He was 77. Nutter, a retired supervisor at Defense Personnel Support Center, Philadelphia, was chairman for 15 years of the board of Defense Supply of Philadelphia FCU, which merged with Maumee, Ohio-based Sun Federal. Since 1995, he had been chairman of the credit union's South Philadelphia Advisory Board. He had been a board member of Sun FCU since 2005. A funeral mass will be at 11 a.m. Saturday at St. Therese of the Child Jesus Church. (The Philadelphia Inquirer March 4) ...

Indiana CULServicecorp take steps to help CUs

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INDIANAPOLIS (3/5/10)--The Indiana Credit Union League and its Servicecorp subsidiary are taking additional steps to provide financial support to affiliates during the economy’s impact on the state’s communities.
Click to view larger image The Indiana Credit Union League and its Servicecorp relocated their headquarters to save $90,000 in leasing expenses annually as a step to help credit unions in today’s economy. (Photo provided by the Indiana Credit Union League)
Efforts underway include:
* A 2010 dues rebate of $38,000. Affiliates will pay their 2009 dues amount for 2010. This is the same approach the league took the previous year, when a dues rebate was provided so credit unions could pay the 2008 dues amount in 2009, said John McKenzie, Indiana league president. * A transfer of $250,000 from the league’s general retained earnings to the Stabilization Reserve, which is a board-designated reserve account on the league’s balance sheet, so more money is available to help credit unions with financial needs. The league board authorized financial assistance totaling $16,000 to help affiliates attend the Credit Union National Association’s Governmental Affairs Conference. The league helped affiliates attend the conference because it considers advocacy a top priority. * Relocation of the league and Servicecorp’s headquarters, reducing leasing expenses by $90,000 annually. * Promotional rebates from Servicecorp to credit unions participating in league webinars, teleconferences and planning sessions. A 20% rebate will be applied on registration costs up to $20,000. * Coverage by Servicecorp of $57,881 in First Data programming expenses required for statement and disclosure compliance due to the Credit Card Accountability, Responsibility and Disclosures Act of 2009 legislation. * A premium holiday for clients of Servicecorp’s CUCare group health insurance program. Excess premiums totaling $1.4 million were refunded to credit unions and another $609,000 is scheduled to be refunded this year.

Move Your Money hits Montana

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HELENA, Mont. (3/4/10)--The Move Your Money campaign urging consumers to move their funds from large national banks to more local credit unions and community banks for better service has drifted West to Montana, reports the Montana Credit Union Network. A segment on KFBB TV, which serves the Great Falls and Helena areas, noted "Why more Montanans trust their money to credit unions." And in a letter to the editor of The Missoulian, a member tells why he ditched Chase to join a credit union. On the KFBB-TV segment, Kathy Briggs, manager of Family First CU, Great Falls, explained that most people realize that their money benefits the owners of the banks, not the customers. "So they turn to a credit union where the members are the owners, and we're not trying to generate an artificially high profit for someone who will never walk through the doors," she said, noting credit unions "epitomize the Main Street versus the Wall Street dichotomy." The station interviewed Bill Garcia, who switched from a larger chain bank to Great Falls Teacher's FCU. "I walked in the door this morning, and Julie at the desk said, 'Hi, Bill.' It's just something you don't typically see." He asked for a motorcycle loan and liked the personal service so much he brought his other accounts--and a few friends--to the credit union. "It's actually uplifting. If you're having a bad day, just come in and check your balance and you'll feel better," Garcia said. Julie McCamley of Teacher's FCU said consumers get lost in a larger institution, but the credit union strives to prevent that. "We don't want them to be just another number. We want to know their names. We want them to be comfortable." In his letter to the Missoulian posted Feb. 27, Joe Splinter of Billings wrote that he moved his funds from "too-big-to-fail" Chase Bank, which received government bailouts that made him "appalled." He moved "all my money to a wonderful, local, welcoming, caring, not-for-profit credit union right here in Billings." He urged the state, local and county governments to put their funds in small, local banks and community-owned credit unions. To access the television segment and the letter, use the links.

SBA names USC CU staffer as 2010 Financial Services Champ

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LOS ANGELES (3/4/10)--USC CU and its vice president of commercial services, David Mellman, have been named the 2010 Financial Services Champion of the Year by the Los Angeles District Office of the U.S. Small Business Administration (SBA). Champion awards will be presented by SBA as part of National Small Business Week Awards Ceremony this summer. "Through the work of lenders and advocates like yourself, jobs are created, families live fuller lives and whole communities are transformed," said Albert Alvarado, district direction of the L.A. office. Since launching its SBA program in 2007, USCCU has funded numerous SBA loans for members of the USC and Los Angeles communities. "We don't close loans; we establish relationships with our borrowers because of our shared connection with the Los Angeles community," Mellman said. "Our goal is to provide each and every one of our clients with opportunities to access the necessary capital that will insure their success." Nominations are evaluated on these criteria:
* Outside of regular business duties, the amount and quality of assistance given small businesses to obtain financing; * Advocacy for changes in the financial services industry to assist small companies; * Encouragement of the flow of investment capital to small ventures; * Active support for legislative or regulatory action designed to help small firms; and * Other significant contributions through the advocacy efforts of the financial services or accounting industries to advance small business interests.

Kanjorski to Pa. auto dealers Try CUs for loans

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SCRANTON, Pa. (3/4/10)--One auto dealer in Northeast Pennsylvania is seeing the benefits that increased business lending for credit unions could offer the rest of the economy. After being rejected by nine banks, Ertley Dealership in Scranton, was approved for a loan by Cross Valley FCU. Dealership President Ron Ertley got the loan after taking the suggestion of Rep. Paul Kanjorski (D-Pa.) (Scranton Times-Tribune March 3). Kanjorski, meeting with a group of local auto dealers having difficulty accessing credit from banks, suggested they try credit unions. The story noted Kanjorski’s work to expand credit union business lending through legislative means. Credit union business lending increased by over 11% last year, and Kanjorski told the Times Tribune that credit unions need Congress’s help “to fill a void in business lending.” Kanjorski is sponsor of HR 3380, the Promoting Lending to America's Small Business Act, which would enable credit unions to make more small-business loans.

CU System briefs (03/03/2010)

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* HERNDON, Va. (3/4/10)--Northwest FCU Foundation plans to award $90,000 in scholarships by April 15th. The foundation has two scholarship programs: the Ben DeFelice--named for Northwest FCU's longest-serving board member--and the CIRA scholarships. This year, the foundation will award 15 Ben DeFelice scholarships of $5,000 each and six $2,500 CIRA scholarships to students demonstrating leadership, dedication and commitment in the home, school or community. Since the program's first recipients were honored in 2005, the foundation has awarded $239,000 in scholarships ... * NAPERVILLE, Ill. (3/4/10)--Hawthorne CU has formed a Student Advisory Committee (SAC) to learn more about the banking experiences and needs of Generation Y consumers. The committee, with 16 local individuals ages 18-29, meets once a month to discuss issues such as what Gen Y-ers look for in a financial institution, their preferred forms of communication, the types of programs that appeal to them, and how credit unions can become more appealing to them. The group's first meeting, in February, identified the most important factors for choosing a financial institution--convenience and trust. The group said convenience translates into technology that allows them to access accounts via computers and mobile phones. They didn't want to be tricked or nickeled and dimed with fees, preferred a financial institution that looks out for their interest, and would stick with a financial institution as their needs grow. SAC members are paid a stipend per meeting, with an added bonus for perfect attendance ... * WARMINSTER, Pa. (3/4/10)--Freedom CU has launched its official Twitter page as part of an overall social networking initiative aimed at educating and adding value to its members. The Warminster, Pa.-based credit union hopes to broaden its marketing reach by informing members about credit union news, community events and product offers via tweets. To become a follower, visit PA. Freedom CU also can be found on Facebook ...

CUs asset quality shows some deterioration

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MADISON, Wis. (3/4/10)--Credit union asset quality continued to deteriorate in January, with the delinquency rate rising six basis points to 1.92% from year-end 2009, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions for January. “The last time credit union loan delinquency rates were this high, Ronald Reagan was president,” Steve Rick, CUNA senior economist, told News Now. “Over the recent business cycle, credit union delinquency rates reached their nadir in April 2006 with a reading of 0.53%. “Credit unions should expect loan delinquency rates to rise further over the next few months,” Rick added. “Expect job creation to be weak for the next six months because firms are still reluctant to bring on new workers during this time of great economic and government-economic-policy uncertainty. In other words, firms are having a hard time determining the marginal benefit and marginal cost of an additional worker.”
Click to view larger image Click for larger view
The rise in long-term unemployment is a serious concern for credit unions’ asset quality, Rick said. “There are currently more than six million people who have been unemployed for more than six months, up from one million two years ago,” he explained. “And the number is still rising. Many long-term unemployed are facing severe financial difficulties with little hope of landing a job anytime soon.” Credit union loans outstanding decreased 0.5% during January, down from a 0.3% increase during January 2009. Fixed-rate mortgages led loan growth, rising 0.4%, while used-auto loans and home equity loans each declined 0.1%. Unsecured personal loans dropped 0.5%, followed by other mortgages (0.9%) and new-auto loans (1.5%). Credit card loans also decreased 1.5%, and adjustable-rate mortgages fell 1.9%.
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“Credit union loan balances fell for the third consecutive month in January,” Rick said. “Weak loan demand on the part of members and loan sales on the part of credit unions is responsible for the remarkably low 0.2% growth in loan balances over the last year.” Credit union savings balances decreased 0.4%, down from a 1.7% increase during January 2009. Money market accounts rose by 1.5%, followed by regular shares, which increased less than 0.1%. Individual retirement accounts declined 0.8%, followed by one-year certificates and share drafts, which dropped 1.1% and 2.7%, respectively. The loan-to-savings ratio remained at 76%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--stayed at 19%. The movement’s overall capital-to-asset ratio in January remained at 10%. The total dollar amount of capital is $90 billion.

HFOT projects see progress in Missouri Mass.

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MARLBOROUGH, Mass., and ST. LOUIS (3/4/10)--Two credit union projects with Homes for Our Troops (HFOT), which builds specially adapted homes for severely injured veterans, have made significant progress in Massachusetts and Missouri. At a ceremony attended by 200 supporters, SSG Michael Downing and his family received the keys to their new home in Middleboro, Mass., reported the Massachusetts Credit Union League's E-Weekly March 3). Downing lost both legs to a road side bomb in Afghanistan. The Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island were among the contributors making the project possible. Credit unions from the three leagues began their involvement with the project in Spring 2009 with a commitment to sponsor the Annual Gala for HFOT. The three leagues raised $190,000 and were recognized at the ceremony by HFOT founder John Gonsalves. "Our credit union community is proud to be able to be of service to Staff Sergeant Downing, an individual who has given so much to all of us," said the leagues' President/CEO Dan Egan. Other major sponsors were Cape Cod Lumber and Falconeri Construction, which donated time, labor and expertise for the project. Among those attending the ceremony were U.S. Sen. Scott Brown (R-Mass.) and Major General Joseph Carter, commander of the Massachusetts National Guard. Halfway across the country, the Missouri Credit Union Association (MCUA) reported that with donations and labor pouring in, HFOT expects to start excavation work this week on a home in Columbia, Mo., for SSG Robert Canine. Canine lost both legs below the knee during an explosion in May during his second stint in Iraq (The Missouri difference March 3). Missouri credit unions are leading the effort to build the home. The next step in the process is a three-day build brigade, which brings the house from a concrete foundation to a weather-tight structure within three days. Credit union representatives, volunteers, community members and the media will take part in that actively, which likely will occur in April, said MCUA. Credit unions, leagues and the Credit Union National Association also partnered with HFOT and the national presidential conventions in Minnesota and Colorado for similar home projects in those states in 2008.

N.J. state ad campaign kicks off this month

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HIGHTSTOWN, N.J. (3/4/10)--The New Jersey Credit Union League’s Statewide Advertising Campaign will branch into some new areas this month. The campaign will include advertising on New Jersey Transit buses and in train stations, radio ads on 95.5 FM WPLJ and, and ads in The New York Times Sunday edition, said the league (The Daily Exchange March 3). On March 14, an ad will appear in The New York Times’ New Jersey section. Another ad will appear in the March 22 issue, which is dedicated to credit unions and will feature an interview with league President/CEO Paul Gentile. On March 15, New Jersey Transit buses will feature credit union advertising, as will several train stations statewide. The ads will run for 26 weeks. Also on March 15, Radio station 95.5 FM WPLJ will begin airing the league’s 30-second general information radio commercial via on-air and Internet streaming stations. The ads will run through the beginning of September. Running through the start of September will be the league’s Internet advertising, which will reach more than four million state residents per month. By the end of March, the league should roll out its Banking You Can Trust toolkit. It will provide credit unions access to customizable ads and other marketing materials focusing on the products and services. The customization is free to credit unions. Printing of materials--if necessary--is the only cost.

Invest in America adds DIRECTV Miracle Network

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LIVONIA, Mich. (3/4/10)--America’s credit union members can invest, donate and save all at the same time when they sign up with a nationwide satellite TV service, while helping sick and injured children in local community hospitals. A new partnership between Invest in America and DIRECTV will launch April 1. Through the exclusive members-only program, credit union members will receive $5 off per month on the first 12 months of a DIRECTV subscription, in addition to any other DIRECTV promotions. Also, $15 will be deposited into their credit union savings or checking account. Through this partnership, CUcorp will also donate $10 for each new subscriber to Children’s Miracle Network, a nonprofit organization credit unions work with to benefit children’s hospitals. CUcorp, a marketing company based in Livonia, Mich., holds contracts with U.S.-based companies for exclusive credit union member discounts through the Invest in America program. DIRECTV has been America’s No. 1 satellite TV provider for the past 15 years, delivering programming to more than 18 million households, said CUcorp. Children's Miracle Network is an international non-profit that raises funds for 170 children's hospitals. The hospitals provide state-of-the-art care, research, preventative health education and treatment for seriously ill children. Credit unions have been one of Children’s Miracle Network’s top contributors since 1996 when the Credit Unions for Kids program launched nationwide. Since its inception, the Credit Unions for Kids program has generated more than $75 million for children’s hospitals. “The evolution of Invest in America is to add new partnerships,” David Adams, CUcorp CEO, told a teleconference Wednesday. “This is an exciting new enhancement to the program in which credit union members will benefit from another opportunity to save a few dollars because of their credit union membership. “This will be a catalyst for deepening the credit union relationship, giving members more reasons to do business with credit unions,” Adams added. “This credit union-DIRECTV campaign is just one more example of how credit unions are giving back to their local communities,” said Joe Dearborn, senior managing director for Children’s Miracle Network and the Credit Unions for Kids program. “Last year alone, the credit union movement raised almost $8.5 million for Children’s Miracle Network, which allowed affiliated children’s hospitals to provide care for 17 million kids.” In addition to DIRECTV, Invest in America partners include General Motors, Chrysler, Sprint, Costco, FTD, CU Benefits Express, Allied Moving and Storage, CompleteTax and ELS Vacation Destinations.

Wis. CUs win 4th Governors Award for investment ed

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PEWAUKEE, Wis. (3/4/10)--Wisconsin credit unions are receiving their fourth Governor’s Financial Literacy Award in five years--this time for an investor education project involving 3,520 employees from 80 credit unions in more than 30,000 hours of online investment education. The effort is the largest of its kind by financial institutions there, said the Wisconsin Credit Union League, and is part of an ongoing study of how investor education can motivate investing behavior. It positions the co-ops to urge their 2.2 million members to greater investing. “Even though more Americans began saving and paying down debt last year for fear of losing a job, too few are investing regularly--something they’ll need to do to stay afloat financially beyond their working years,” said Brett Thompson, league president/CEO. The league is coordinating credit union involvement in the effort. By educating more of their staff on their own savings and investment options, credit unions "could be more proactive in helping steer members toward resources, whether in-house, online or within their communities,” he said. Studies have found that most Americans appear not to have done any retirement planning. The project, dubbed “RP3,” for REAL Progress & Pathways to Prosperity, kicked off in October and will continue through early 2011. Participants took roughly 10 hours of online learning about investing concepts such as setting goals, distinguishing among investment vehicles, managing risk, diversifying a portfolio, maximizing tax advantages, understanding mutual funds and working with investment professionals. The first phase involved 53 credit unions, whose 1,623 employees completed the courses in December and achieved passing grades averaging 88.17%. Their knowledge of investing concepts had increased 28.27%. In January, another 1,897 employees from 56 credit unions began the coursework. At its conclusion, the 18-month project will have collected enough data to measure the extent that learning had on participants’ investing behavior and what factors--such as income and age--influenced success. The study is conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, University of Wisconsin-Madison; Precision Information; the Wisconsin Credit Union League; Governor Jim Doyle’s Council on Financial Literacy; and the Wisconsin Department of Financial Institutions. It is funded by a grant from the Investor Protection Trust (IPT), a nonprofit organization devoted to investor education. Wisconsin credit unions have earned three other Governor’s Financial Literacy awards: in 2009, for their 86 in-school credit union branches instilling in students the habit of regularly saving money; in 2008, for providing free to all Wisconsin public high schools a lifestyle money magazine and online tools for teachers and students to support state teaching standards for financial literacy; and in 2006 for their overall, statewide REAL Solutions initiative teaching families to save and build wealth.

CUs 2009 Roll Your Change deemed most successful

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AKRON, Ohio (3/4/10)--Towpath CU’s “Roll Your Change” campaign was deemed the most successful last year in the U.S., according to America Saves officials. America Saves is a program by a national nonprofit group to highlight the importance of saving money. Last year, the program worked with leaders in Akron, Ohio, to offer an Akron Roll Your Change Week, with which Towpath was involved. America Saves 2010 was held last week. Fairlawn, Ohio-based Towpath garnered $266,000 in loose change with 833 new deposits and 188 new accounts over a four-day period last year (The Beacon Journal Feb. 28). About 70% of the accounts that were opened during its loose change promotion have remained into 2010. The project also is being nominated for a leadership recognition award through the Ohio Credit Union League, said the newspaper. Although Towpath did not participate in the campaign this year, it is looking to get its own coin counter and offer a program later this year. The credit union had borrowed a coin counter last year and offered a 10% match to anyone depositing money into an account--up to a maximum $100. Towpath also gave $100 three-month share certificates to the highest coin depositors. Towpath has $67.7 million in assets.

CUs launch Perus first member-owned ATMs

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AYACUCHO, Peru (3/4/10)--Santa Maria Magdalena CU celebrated the launch of its first ATMs last week in Ayacucho, Peru. The launch was a landmark for the $50 million asset credit union, which is piloting ATMs for expansion to credit unions throughout the country, said the World Council of Credit Unions (WOCCU).
Click to view larger image Celebrating Peru’s first credit union-owned ATMs at Santa Maria Magdalena credit union in Ayacucho were, from left: James Chira, Kuskanet general manager; Miguel Zevallos, FENACREP board president; Mark Cifuentes, World Council of Credit Unions vice president of technical services; and Roque Montero, Santa Maria Magdalena board president. (Photo provided by the World Council of Credit Unions)
“The ATM launch puts Peru’s credit unions on par with other financial institutions in a race to the forefront,” said Mark Cifuentes, WOCCU vice president of technical services. “The credit union’s goal has always been to offer members the same services bank clients receive. The ATMs help bring them the financial dignity all people deserve.” Santa Maria Magdalena’s ATMs mark the next step forward for Peru’s first credit union-owned network, launched in October 2008 as “Kuskanet.” Kuska means “together,” Kuskanet is a credit union services group wholly owned by WOCCU; Federacion Nacional de Cooperativas de Ahorro y Credito del Peru (FENACREP), Peru’s national credit union association and a WOCCU member; and mostly rural credit unions. “Working closely with FENACREP, WOCCU’s program in Peru laid the foundation for the advancements we celebrated in Ayacucho last week,” added Brian Branch, WOCCU executive vice president and chief operating officer. “Farmers, small business owners and people living in rural areas are now experiencing financial access as they thought only bank clients could.” Kuskanet can give credit unions the tools necessary to offer the same financial services as banks at more affordable rates. When Kuskanet launched, no credit unions in the country offered ATM or debit card services. Very few credit unions provided members the opportunity to perform inter-branch transactions, which were possible only through credit union-to-credit union agreements. Shared supply and demand among network members has enabled small credit unions to offer new products and services, WOCCU said. Santa Maria Magdalena’s ATMs will serve 60,000 members in largely rural areas, and members in urban centers near Lima. Kuskanet chose Santa Maria Madgalena to pilot the ATMs because of its commitment to using new technology to expand product and service offerings to members. Kuskanet offers ATMs, point-of-sale (POS) devices and shared branching services to its 20 member credit unions. There are three credit union-owned ATMs in operation--in Santa Maria Magdalena’s main office, one in a branch office and a third at a credit union in Tarapoto. On Saturday, Kuskanet will celebrate ATM launches in Rioja province, an area high in poverty between the Amazon rainforest and the Andes Mountains. The network plans to install 45 credit union-owned ATMs and 200 POS devices throughout Peru by the end of 2010. Kuskanet grew out of WOCCU’s first technical assistance program in Peru, funded by the U.S. Agency for International Development.

Post office cutbacks could affect CUs marginally

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WASHINGTON (3/3/10)--Mounting costs and dwindling business this year have the U.S. Postal Service pushing for changes in delivery schedules and prices. Some of the changes--if implemented--would result in credit unions adjusting their operations and members adjusting their expectations. The Postal Service is facing an estimated $238 billion in losses in the next 10 years. Last fiscal year it experienced a 13% decrease in mail volume--more than double any previous decline. Last year alone the service lost $3.8 billion. Postmaster General John E. Potter is seeking changes such as an end to Saturday deliveries, longer delivery time for letters and packages, and increases in the prices of postage stamps (The Washington Post March 2). The changes aren't a done deal. According to a statement from the post office obtained by Dupaco Community CU, Dubuque, Iowa, the proposals made to legislators have not moved on, and there is nothing definite. Still, News Now asked credit unions how such changes would impact them. Dupaco Community CU, which had $777.8 million assets at the end of 2009, has 55,000 members, said Tami Rechtenbach, director of member service delivery at the credit union. She addressed the issue of losing Saturday delivery first. "Saturday's not a big day for outgoing mail for us. We mail from 2,100 to 2,400 pieces of mail every day on Monday through Friday. On Saturday, we mail only 10 or 15 pieces," Rechtenbach told News Now. "So from a processing point, not much would be changing." Most of the credit union's branches are open 8:30 a.m. to 12:30 p.m. on Saturday. A branch open Saturday and Sunday in a store does its processing on regular business days anyway, she said. However, skipping a day of delivery on the weekend means it will take at least a day longer for mail to get to a member. One option is to go electronic. Dupaco Community has a "very robust and very popular" online banking program, with online statements. "We do try to get people to use electronic delivery on statements, but a lot of folks stand by their paper statements," Rechtenbach said. "Those with certified CD notices and certificate maturities who are expecting a check will want the same service," even though the check may take four days to arrive instead of the next day. "We can push electronic payment as a quicker delivery method," she said, "especially to those who want their checks right away." "We'll have to pay attention to deadlines and adjust placing the mail accordingly," she said. "We would have to make sure we've allowed time to enable members to receive it." ORNL FCU, Oak Ridge, Tenn., doesn't see much impact from the proposed changes in terms of budget or delivery. "Over all, I don’t think it will affect us too much," said Nancy J. Ballard, public relations director at ORNL FCU, Oak Ridge, Tenn. "If the changes go through as planned, we would just make adjustments as needed. For example, with our members, we have been encouraging the shift to electronic services such as e-Statements, Web Bill Pay, and newsletters online, for quite some time," she told News Now. Delays in direct mail marketing pieces may be delayed if mail service isn't available or if layoffs at the postal service affect the speed of delivery. "If we see a delay in delivery of an item, then we may adjust our editing and printing deadlines to accommodate a timely arrival of our news or promotional pieces." Ballard did not envision having problems with third party vendors because of the proposed delays. "We have very good relationships with our third party vendors and would be able together to avoid any bumps in the road," she said. "With our budget, we usually do a good job of predicting what we will spend. If costs are over our projections, we have ways to adjust," Ballard added.

Arizona CUs raise more than half a million for hospitals

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PHOENIX (3/3/10)--Arizona credit unions raised $558,574 for Credit Unions for Kids, the credit union movement's program for raising money and supporting Children's Miracle Network hospitals, said the Arizona Credit Union League. In 2009, Phoenix credit unions raised $493,341 to benefit Phoenix Children's Hospital, while Tucson credit unions raised $65,233 for Tucson Medical Center. Phoenix funds help support One Darn Cool School, a K-12 inpatient education program enabling kids to continue their regular classroom studies while at the hospital. Tucson funds help the Hands On Therapy program that ensures a child is not held back in development. Desert Schools FCU raised $324,476, the most money from any Phoenix credit union for the Phoenix hospital. It was followed by First CU ($45,500), TruWest CU ($28,806), AEA FCU ($14,000) and the league ($13,779). In Southern Arizona, AEA FCU was the top earner, bringing in $14,000. Rounding out the top five contributers were Pima FCU, $10,000; Arizona Central CU, $7,500; Hughes FCU, $6,618; and First CU, $5,000. Overall, fundraising in Arizona ranked fourth among all other states in the country, trailing only Texas, Oregon and California. Phoenix totals ranked third among all U.S. cities, said the league.

Development Education demand continues to rise

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MADISON, Wis. (3/2/10)--Despite predictions that credit unions would stay home and wait out the recession, the Credit Union Development Education (DE) training class scheduled for April 14-21 is already half-full. The first of this year’s DE training classes will have a new location: The Lowell Center, part of the University of Wisconsin-Extension in Madison, Wis. “DE Training in 2010 will incorporate emerging economic discussions while continuing to provide critical lessons in cooperative principles and credit union philosophy, all of which is applied to domestic and international development issues” said Tom Decker, DE training facilitator and director of social impact management for the National Credit Union Foundation (NCUF). "We plan to show this year’s trainees how the member-centric business model, as well as the principles of cooperative social responsibility, will enable credit unions to weather the economic storm better than most for-profit institutions,” he said. DE training is open to everyone. Participants will:
* Learn skills in credit union outreach initiatives, problem solving, technical assistance, team building, and public presentations; * Become certified as Credit Union Development Educators (CUDEs) and join a networking group of more than 1,000 graduates across America and in more than 30 other countries; * Realize that local issues are indeed global--and that global issues are local; * Understand that credit unions grow stronger by working cooperatively; and * Return to their jobs with new understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace.
“All financial institutions offer a commodity,” said 2008 graduate Lily Newfarmer, CUDE and president/CEO of Tarrant County CU, Fort Worth, Texas. “We are all trying to get the same loans, checking accounts, etc. What sets credit unions apart from our fierce competition are our cooperative principles and credit union philosophy. If we don’t embrace these differences and show our members that we’re better because we’re unique, our very existence is in jeopardy.” Scholarships are available through DE Educational Fund and through several state credit union foundations and leagues. Credit union advocates interested in a scholarship can contact their state foundation or league, or contact Decker at or 800-356-9655, ext. 4374. A list of states confirming DE scholarships is posted on the NCUF website. Use the resource link. NCUF is the primary sponsor of the DE program. Support is provided by CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions, state foundations and leagues.

CUSO CollaborationInnovation Award nominations sought

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NEWPORT BEACH, Calif. (3/3/10)--The National Association of Credit Union Service Organizations (NACUSO) announced Monday that nominations for the 2010 CUSO Collaboration and Innovation Award are being accepted from NACUSO members. The formal announcement and presentation of the award to the winning CUSO will be April 25 during the 2010 NACUSO Annual Conference in Las Vegas. Nominations are due by March 29. NACUSO will acknowledge all CUSOs that submit applications during the annual conference. The 2010 CUSO Collaboration and Innovation award will be judged using these criteria:
* A clear description of how the organization and the collaborative model have brought value to the industry, owners and credit union members; * Thought leadership and critical thinking; * Value created through use of collaboration; innovation in organizational design; * Implementation and execution; and * Results, outcomes and performance.
NACUSO will accept self-nominations; however, winners of any NACUSO award from 2007-2009 are ineligible. Nominations may be sent to NACUSO, PMB 3419 Via Lido #135, Newport Beach, CA 92663 or For more information, use the link.

CU System briefs (03/02/2010)

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* UNION, N.J. (3/3/10)--Rep. Leonard Lance (R-N.J.) Monday pointed out credit unions are the "good guys" and not responsible for the nation's banking crisis. He made the comments at a packed multi-chapter meeting hosted by the Union-Morris chapter of the New Jersey Credit Union League. "I do not think we should be doing anything to limit credit unions," said the congressman. "We should be strengthening credit unions. I would be opposed to anything that puts more limits on credit unions." Lance noted that credit unions "are well represented by your leadership. We will be continuing our conversation to better understand your concerns." He noted that New Jersey's delegation hiking the Hill during the Credit Union National Association Government Affairs Conference made him aware of the legislation to raise credit unions member business lending cap. He said he understands the importance of the MBL issue to credit unions and his office is evaluating the legislation. Lance is a member of the House Financial Services Committee and serves on its subcommittee on financial institutions and consumer credit. (Photo provided by the New Jersey Credit Union League) ... * ST. PAUL, Minn. (3/3/10)--The Minnesota Credit Union Foundation funded a $3,000 grant to ICOP, a non-profit direct service organization that provides affordable housing, financial education and wealth accumulation for low-incomers. The grant will provide financial literacy education for its clients. The classes are held in collaboration with West Financial CU, based in Medina. "IOCP has an excellent track record of integrating financial education into its larger goal of financial independence for low-income families," said Kristi Mukomela, foundation chair. ICOP expects to work with more than 30 individuals during its two financial education sessions, slated for May and October ... * ALBUQUERQUE, N.M. (3/3/10)--The Credit Union Association of New Mexico (CUANM) debuted its revamped website at last week. The site is now more user friendly, protects credit union professionals' information with passwords and helps credit union members or prospective members find out more about credit unions. The site will include key events and topics on the home page and an up-to-the-minute feed of important credit union issues and news, said Mary Beth King, communications coordinator at the league. It also will link to CUANM Learning Center, Kirby Kangaroo and CU Succeed youth services, a CUANM Twitter account, and other related sites. Credit union professionals can sign up for an account to access password-protected information and receive the CUANM Network newsletter ...

Mich. CUs at governors small-business roundtable

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LANSING, Mich. (3/3/10)--Michigan credit unions were part of a roundtable discussion held Feb. 24 in Grand Rapids by Gov. Jennifer Granholm to highlight examples of entrepreneurs who started their businesses with local sources of capital. The event was part of a push by Granholm to explain the state’s focus on linking budding businesses with loans and resources they need, including credit union business loans. Glenn Ray, director of public affairs for the Michigan Credit Union League, was part of the roundtable (Michigan Monitor March 1). An initial $43 million put forth by Michigan credit unions for loans to small businesses was mentioned during the discussion. “When other banks cut back on lending last year, Michigan credit unions increased business loans by 17%,” Ray told Granholm emphasized the need for Michigan to move from a “20th century economy” comprised mostly of big industry toward an economy built on entrepreneurs and small businesses.

Judge denies U.S. Central defendants motion to dismiss

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BIRMINGHAM, Ala. (3/3/10)--A U.S. District Court judge in Alabama Tuesday denied a motion to dismiss Corporate America CU's lawsuit against individual director defendants of U.S. Central FCU. U.S. District Judge Inge Johnson noted in the order that the "complaint raises complex factual issues that are more appropriately addressed in motions for summary judgment. The motion to dismiss is therefore denied." In the lawsuit, Corporate America alleges that U.S. Central violated the Securities and Exchange Act and state laws when it solicited Paid-In-Capital (PIC II) funds from member credit unions. It claims U.S. Central concealed the extent of its investment losses. Last week Judge Johnson denied a separate motion to dismiss filed by U.S. Central's accounting firm, RubinBrown LLP.

Arrowhead CU sells insurance subsidiary

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SAN BERNARDINO, Calif. (3/3/10)--Arrowhead CU, San Bernardino, Calif., sold its Sawyer Cook Insurance subsidiary Friday, according to local media reports. The subsidiary was sold to an undisclosed firm for an undisclosed amount (Daily Bulletin March 2). The firm kept 13 employees but laid off nine others, the newspaper said. The sale will generate $750,000 in revenues for the credit union, which had forecast $4 million to $5 million in profits this year. It suffered a $78 million loss between July 2008 and September. In the most recent quarter, Arrowhead reported $1.7 million in earnings. Arrowhead took several measures to raise its capitalization ratio last year, including closing four branches and laying off 60 employees, the newspaper added. Sawyer Cook offers homeowner, auto, health and other types of insurance.

CU Better Choice saved consumers 10M

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HARRISBURG, Pa. (3/3/10)--Through Credit Union Better Choice, a payday loan alternative, credit unions have issued more than 28,000 loans totaling more than $13.4 million dollars since 2006. Members saved nearly $10 million dollars by using the program instead of a traditional payday lending product. Credit Union Better Choice borrowers also placed $1.3 million into their savings accounts. Borrowers used loans for Christmas gifts, car repairs, traffic fines and funeral expenses. The program is offered through participating credit unions and is a partnership of the Pennsylvania Credit Union Association and the Pennsylvania Treasury Department. Since the program’s inception, 82 credit unions have agreed to offer Credit Union Better Choice loans, with more participants continuing to sign on. From July 1 thorough December 31, about 8,163 loans totaling $3.9 million dollars were issued. For all of 2009, there were 13,462 loans, totaling $6.5 million, issued. “In our rough economy, many Pennsylvanians are finding that their paychecks do not stretch far enough when unexpected expenses occur. I’m proud that credit unions offer an alternative to the high-cost payday lenders for short-term borrowing needs,” said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association. “More important, the credit unions are offering financial counseling to assist borrowers with money management and credit.” “Better Choice connects hard-working individuals with the quick cash they occasionally need for an unexpected expense or between paychecks, and helps them avoid the ‘debt trap’ of usurious loans--in fact, since inception, Better Choice has spared Pennsylvanians nearly $10 million in interest and fees,” Treasurer Rob McCord said. Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through a Credit Union Better Choice loan. That translates into more than $9.6 million that consumers kept in their own pockets by using credit unions that offer Credit Union Better Choice loans. Also, borrowers were able to place more than $1.3 million into savings accounts for future needs. To learn more about the program, use the link.

Md.D.C. Dollars and Sense Guide aimed at commuters

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COLUMBIA, Md. (3/3/10)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has partnered with The Washington Examiner to publish a 16-page supplement promoting the benefits of credit unions. They hope the supplement will reach more than a half million Washington, D.C.- area consumers. The supplement, “Dollars and Sense Guide: Credit Union's Resource for Financial Management,” was delivered to Washington, D.C.-area homes on Sunday, and around town on Tuesday, according to MDDCCUA. The supplement heightens consumer awareness of credit unions and features articles written by financial experts highlighting the distinct differences between credit unions and banks, credit union safety and soundness, financial literacy, and innovative products and services. It has been delivered to every legislative office on Capitol Hill and was unveiled during the state association’s annual luncheon at the Credit Union National Association’s Governmental Affairs Conference (GAC). “The supplement also showcases area credit unions to other credit unions on a national basis with distribution at last week’s GAC, and promotes the upcoming Dollars and Sense Expo scheduled for Saturday,” the association said. The Dollars and Sense Expo, which is sponsored by MDDCCUA and will take place in Washington, D.C., will offer consumers financial resources, free tax preparation for workers earning less than $48,000 per year, homebuying information, job interview skills and other activities. To view the supplement, use the link.

Wash. State Rep. Santos receives Desjardins award

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FEDERAL WAY, Wash. (3/3/10)--Washington State Rep. Sharon Tomiko Santos (D-37) has been awarded the national credit union system's Desjardins Youth Financial Education Award. The award recognizes her seven years of legislative leadership and innovation in financial literacy. Santos is the only state lawmaker in the nation to receive the 2009 award, which will be presented to her at an upcoming banquet. Santos, a member of the state Insurance, Financial Services and Consumer Protection Committee, first sponsored legislation in 2003 (HB 2009) requiring that financial education be added to the Washington schools' curriculum. It was an uphill battle, with few colleagues understanding the importance of financial literacy education in public schools. The bill failed, but during the next five years, Santos worked to educate lawmakers. The 2003 bill was followed in 2004 with HB 2455, which created the Financial Literacy Public Private Partnership (FLPPP)--now called the Financial Education Public Private Partnership (FEPPP). In 2006, SB 6386 provided the FLPPP with $50,000 in funding. "Without Rep. Santos' unwavering leadership, the public-private partnership would never have gotten off the ground in such a timely fashion, much less received state funding," said Washington Credit Union League President/CEO John Annaloro. "Washington can be proud of this state legislator." In 2007, Gov. Chris Gregoire included the $50,000 appropriation in her budget. Santos sponsored further legislation that expanded the partnership's responsibilities. "2007 was a milestone year for financial education in Washington thanks to the efforts of Rep. Santos," said Stacy Augustine, league senior vice president and a member of FEPPP. "It really shouldn't come as a surprise that as the economy declined, public interest and recognition of the importance of financial literacy have increased." In 2008, as the national economy began wavering, the legislature and educators looked to FEPPP for leadership. The Office of the Superintendent of Public Instruction began working with FEPPP to officially make financial education part of the state social studies standards in seventh grade. FLPPP, chaired by Santos, adopted content standards for personal finance for the state and developed a communication plan to reach teachers, parents, legislators and the media. Its professional development plan created a five-day teacher training workshop and specialist designation for teachers in financial education. Also in 2008, the state legislature passed SB 6272, expanding financial literacy through education and counseling to promote greater homeownership security. Santos served on a new financial literacy workgroup which made recommendations to the governor for legislative enactment in 2009. The group recommended a wide reaching, comprehensive approach to promote and education the public about financial literacy issues. Santos remains chairman of the FEPPP, which is creating a financial education specialist designation for Washington teachers.

U.S. Central depletes capital

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LENEXA, Kan. (3/2/10)--U.S. Central FCU's fourth quarter 2009 financials indicate the corporate's other-than-temporary impairment (OTTI) charges totaled $479.9 million for the quarter, bringing OTTI charges for the year to $1.8 billion--and depleting U.S. Central's capital. In addition to depleting U.S. Central's capital, the losses have a $331 million impact on the $1 billion infusion from the National Credit Union Share Insurance Fund (NCUSIF). That means U.S. Central has $669 million left from the capital fusion. "As a result of OTTI charges recorded in 2008 and 2009, U.S. Central's retained earnings have been fully exhausted, and all the PIC (Paid in Capital) and MCS (Membership Capital Shares) have been fully depleted," said U.S. Central's financial statement. "In addition, the NCUSIF capital note has been depleted by $331 million." The loss compares with a net loss of $4.9 billion in OTTI charges for fourth quarter 2008. However the 2008 charges reflect the full difference between amortized cost and fair value. The $497.9 million fourth quarter losses "were caused by further deterioration in many of U.S. Central's consumer-based investment securities, particularly non-agency residential mortgage-backed securities. Included in this amount are OTTI charges of $142.1 million on securities insured by Ambac--one of several insurers of securities in U.S. Central's portfolio." Management, after a review of Ambac, estimates that 80% of projected payments required of the insurer will be received and said it believes that U.S. Central will incur a credit loss on securities where, absent the effects of insurance, a loss of principal or interest is projected. Excluding the OTTI charges, U.S. Central recorded net gains on financial instruments of $16.2 million during the quarter, compared with losses of $27.1 million for fourth quarter 2008. Net interest income totaled $12.7 million for fourth quarter 2009, compared with $95 million for the same period in 2008, a decrease of $82.3 million or 86.7%. Fee income totaled $5.4 million, compared with $4.7 million for fourth quarter 2008. Operating expenses were $13.1 million, a decrease of $4.3 million or 24.5% from the same period in 2008. Assets as of Dec. 31, 2009, increased $8 billion or 29.3% to $35.1 billion. The increase primarily reflects an increase of $12.4 billion in cash held at the Federal Reserve Bank of Kansas City offset by a $1.7 billion decline in investment securities (carried at fair value) and a $2.7 billion decrease in loans.

CU limits withdrawals after 3M goes missing

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NEW CASTLE, Pa. (3/2/10)--The board of $6.5 million asset credit union in Pennsylvania that lost $3.4 million during fourth quarter 2009 has decided to limit the amount of money its members can withdraw from their accounts. New Castle, Pa.-based Lawrence County School Employees' CU's board resolution allows members to remove up to $5,000 in a week. Withdrawals that exceed the amount will require members to provide notice 10 business days in advance (New Castle News Feb. 2). The newspaper reported in another story the same day that federal auditors uncovered irregularities with the credit union's finances in late September. The credit union is working with the National Credit Union Administration and with First Choice FCU, Union Township, Pa., who is assisting with operations, said the report. The credit union's CEO, Holly Cowan, left the job about five months ago for undisclosed reasons. The National Credit Union Share Insurance Fund insures member accounts up to $250,000.

Younger crowd gets the GAC experience

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WASHINGTON (3/2/10)--Ken Worthey Jr., marketing specialist at Belvoir FCU, Woodbridge, Va., summed up his experience with Crash the GAC in Washington, D.C., last week like this: GAC was an eye-opening experience. Worthey was one of 20 young professionals who attended the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC) with “Crash the GAC.” Crash was organized by Brent Dixon, young adult adviser at the Filene Research Institute and consultant with REAL Solutions. Crashers received scholarships to attend the conference from the CUNA Center for Professional Development, paid for their own travel costs and stayed at a hostel courtesy of Palmetto Cooperative Services. Worthey, who started with Belvoir five years ago as a teller, said of the GAC: “It helped me to put in perspective how wide the scope of the industry is and the changes we make in the world. The Crash enabled us to collaborate with professionals our age and share ideas about the industry.” GAC recharged Matt Vance’s credit union batteries and gave him a sense of belonging. “We were able to have an impact on credit union leadership and show them that we do care about the future of our movement, we know more [about the industry] than just flashy Gen Y checking accounts and we’re willing to proactively learn what is needed to be in their position in the future,” said Vance, marketing coordinator at Industrial CU, Bellingham, Wash. Aside from learning that “[CUNA President/CEO] Dan Mica is listening to Norah Jones and Ray Charles on his iPod,” and “if you want a hot shower at a hostel, you need to wake up before 6:30 a.m.,” Vance said he learned about the heart and soul of the credit union industry--people helping people. Organizer Dixon said he learned there is a huge need for intergenerational collaboration. “Spending a week with pioneers of the movement really highlighted that our generation needs mentors. I think both age groups have a lot to learn from each other,” he said. Chad Helminak, crasher, Web producer and media relations manager for the Wisconsin CU League, said GAC was energizing. “The scope of credit unions across the nation--and globe--is very impressive and it brings a sense of pride to be a part of that. “As we networked and shared ideas with our fellow crashers and leaders of our movement, it was reaffirming to realize that there are so many people working towards the same goals as we are everyday: to improve the lives of our members and communities,” he said. Robbie Wright, founder of CU Innovators, Salem, Ore., is a GAC veteran. As a crasher, Wright said he felt more involved with industry people. “Between attending the general sessions and our crashers’ breakout sessions, we were very busy,” Wright said. “It introduced our group to a lot of people they may have never met had they not crashed the GAC. For example, I’d seen Gigi Hyland speak, but never got to speak with her one-on-one.” Dixon agreed. “One of the greatest things about attending an industry-wide conference is that it brings perspective,” he said. “Crashing the GAC got us out from behind our desks and showed us the scope of the movement. We spent time with Pete Crear [president/CEO of the World Council of Credit Unions] on the first day, and the work credit unions are doing in developing countries is unbelievable.” During GAC, crashers said they especially liked networking, discussion sessions and Capitol Hill visits to meet lawmakers. They also loved seeing the passion for credit unions from others at the conference, and meeting some of the movement’s pioneers. For some crashers, GAC was their first visit to Washington, D.C. But they’d also like to see the credit union movement be more active. Credit unions make up 6% of the financial marketplace--and crashers said they want to see the industry step up and increase that share. Crashers also want to move beyond their “Gen Y” stereotype. Instead of just being counted on by their credit unions to help sell products and services to youth, crashers said they are interested in bigger issues--like savings and lending. Credit union representatives who spent time with crashers noted their enthusiasm about the industry. “In my interactions with them, they struck me as incredibly passionate, intelligent and engaged young credit union professionals,” said Christopher Morris, Web manager for the CUNA Councils. “This group saw their Crash opportunity as great for their own professional development, but more than that--they really wanted the opportunity to network and grow their ability to help their members and credit unions,” said Meghann Dawson, CUNA instructional design manager. Dawson represented CUNA at the event and helped coordinate Crash. "They see their jobs as part of a movement and really want to be part of moving credit unions on to bigger and better things. If the Crash experience continues--they hope to also be seen as resources to the other GAC attendees.” “Part of CPD’s goal is to provide professional development assistance for our young members--so this was a great fit for us,” Dawson said. Some also plan to “crash” the 1 Credit Union Conference, sponsored by CUNA and WOCCU, in Las Vegas, July 11-14. Vance is one of them. “These crashes provide so much value for young credit union professionals,” he said. “By fostering the credit union passion in them at a young age, we have a better chance of keeping them in the industry and pushing us higher and higher into the future.” “It was such a great week,” Dixon added. “I wouldn't trade the new relationships and conversations we had for anything. By the end of the week we were talking about how to keep this momentum going among the group and across the industry. As we all went home, we agreed it was the beginning of something rather than the end. “The GAC is all about using the passion of our industry to make change,” he said. “Our group just wants to be there with the rest of you. We want to make change with you. We love the work credit unions are doing, and the sooner we can be deeply involved the better.” Dan Emery, marketing specialist at Maine State CU in Augusta, summed up his experience with Crash the GAC in Washington, D.C., last week with a well-known Confucius quote: “I hear and I forget. I see and I remember. I do and I understand.”

WOCCU trying to determine status of Chilean CUs

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MADISON, Wis. (3/2/10)--The World Council of Credit Unions (WOCCU) is attempting to find out the status of credit unions in Chile where a magnitude 8.8 earthquake ripped apart the country early Saturday. Chile has five credit unions, with 826,593 members out of a population of 16.6 million people--a 7.3% penetration rate, according to WOCCU's statistical information for 2008--the latest available. Chilean credit unions' trade association is not a member of WOCCU. Credit unions in Chile have combined assets of more than $1.5 billion. They make nearly $1.4 billion in loans. According to news reports, the death toll has reached more than 723, most of them in the Maule region, a wine growing country along the coast, where at least 541 deaths were reported. As much as 80% of some towns in the region was destroyed (The Wall Street Journal March 1). In Bio-Bio, at least 64 people died (CNN March 1). Chile's earthquake has had more than 100 aftershocks, ranging from 4.9 to 6.9 in magnitude, as well as a tsunami that killed at least eight people, with eight others missing, on the Chilean islands of Juan Fernandez and slammed into the country's coast areas. The city of Concepcion, the nation's second largest city and 70 miles from the epicenter, was hard hit, with a 15-story building collapsing. In the capital city, Santiago, which is farther north, more than 1.5 million people were without power, said CNN. The country's National Office of Emergency said Sunday more than two million people were displaced (The New York Times March 1). CNN said 500,000 homes were destroyed. Although Saturday's earthquake was much stronger and across a broader region than the recent earthquake in Haiti. Haiti's death toll--200,000--much higher. Chile has much stricter building codes for its buildings, which are built to withstand earthquakes.

WOCCU distinguished service nominations due soon

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MADISON, Wis. (3/2/10)--The nomination deadline for World Council of Credit Unions’ (WOCCU) Distinguished Service Award (DSA), the highest honor bestowed by the international credit union system, is April 5. Each year, the award honors the outstanding contributions of individuals or organizations to the global credit union movement. WOCCU’s vision is “Improving people’s lives through credit unions,” and the DSA recognizes the most distinguished achievements in support of that pursuit. WOCCU does not present the DSA honor every year; its presentation is governed by the viability and worthiness of candidates in the eyes of the judges. WOCCU presents no more than three individual awards and one institutional award in a single year. Award presentations this year will be made at The 1 Credit Union Conference, a joint enterprise of both WOCCU and the Credit Union National Association. The one-time conference, July 11-14 in Las Vegas, is expected to attract attendees from more than 60 countries. In the case of individuals, DSA nominees may be WOCCU and member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefited global credit union development. Institutional recipients may be organizations or agencies that have provided financial and technical assistance to develop international credit union movements and their service infrastructures over an extended period of time. In 2009, WOCCU bestowed the DSA to David Chatfield, former president/CEO of the California and Nevada Credit Union Leagues, and Wayne Nygren, former president/CEO of Credit Union Central of British Columbia, now Central 1 CU, Canada. In 2008, honors went to Chris Baker and Karen Schwartz, both economic development pioneers, from the U.S. and Credit Union Foundation Australia, respectively. DSA nominations must be made by a WOCCU member organization. For more information, use the link or contact Liliana Tangwall at or 608-395-2043.

Shuttered Washington bank was former CU

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TACOMA, Wash. (3/2/10)--A bank shuttered Friday by Washington state and federal regulators was a former credit union. Rainier Pacific Bank, Tacoma, Wash.--formerly Rainier Pacific CU--was closed Friday afternoon by the Washington Department of Financial Institutions (DFI), which appointed the Federal Deposit Insurance Corp. (FDIC) as receiver, reported the FDIC. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, based in Roseburg, Ore., to assume Rainier Pacific Bank's deposits. "For consumers wanting to change institutions given the closure, it is reassuring to recognize that community is served by a number of alternative institutions, including some exceptionally strong credit unions that have stayed true to their chartering roots and traditional mission," John Annaloro, president of the Washington Credit Union League, told News Now. "Rainier Pacific pursued a banking charter, for better or worse, and times were bad for them. The outcome is unfortunate," Annaloro added. The 14 branches of Rainier Pacific Bank will reopen as branches of Umpqua Bank, with depositors automatically becoming depositors at Umpqua. As of Dec. 31, Rainier Pacific Bank has roughly $717.8 million in total assets and $446.2 million in total deposits. Founded as Tacoma Teachers CU in 1932, the former credit union received its community charter in 1995. In late November, 2000, more than 70% of its 5,700 voting members voted in favor of converting to a savings bank charter. The credit union became Rainier Pacific Bank on Jan. 1, 2001. At the time of the conversion, the credit union's executives told News Now that Prompt Corrective Action regulations limited the credit union's ability to make mortgage loans. Roughly 55% of its loan portfolio were real estate-based loans (News Now Nov. 29, 2000).

N.C. league to move to Raleigh

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RALEIGH, N.C. (3/2/10)--The North Carolina Credit Union League announced Monday it will relocate its headquarters to Raleigh from Greensboro by April 2011. The move is designed to further enhance the trade association’s ability to serve its members in the areas of legislative and regulatory advocacy. The league also announced that staff would be offered relocation packages and that no positions would be cut in the move. “The board and management looked carefully at this decision over several months,” said President/CEO John Radebaugh. “With our Greensboro lease expiring next year, the board decided that now was the right time to act. Relocating positions the league for continued success and enhances our ability to meet the top priority of our members-- advocacy.” The league will combine Raleigh office personnel in place since 1997 with the entire staff under one roof. It is evaluating office space in downtown Raleigh, and expects to open the new space later this year. “Headquartering downtown puts the entire organization in the heart of our state’s political system,” Radebaugh said. “Opening the site later this year will offer Greensboro staff the transition time and flexibility they need. It also ensures that our credit unions will continue to receive the high level of service they’ve come to expect.” The league has operated in Greensboro since it was chartered in 1934. The league board noted that relocation offers key benefits to credit unions, including:
* A stronger voice with key decision-makers; * Higher visibility among legislators; * Greater ability to influence legislative and regulatory outcomes; and * Faster response times to legislative issues that arise.
“As the board and management team evaluated the options available to the league, the case for moving to Raleigh was very clear,” said league Chairman Ben Hill. “Over time, the league’s focus has shifted, and this commitment to Raleigh is really a commitment to being a more potent force for credit unions across North Carolina in the years to come.”

CUs all over ICBS NewsI this weekend

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NEW YORK (3/2/10)--Credit unions were featured in two stories on CBS News Sunday Morning last weekend, plus one on CBS Evening News with Katie Couric. One story highlighted the Move Your Money initiative, and another featured financial guru Suze Orman, who encouraged consumers to move their credit card accounts to credit unions. “Move Your Money” encourages consumers to move their accounts from large banks to smaller financial institutions such as credit unions. “Move Your Money,” launched by the Huffington Post, has received significant media attention and has noted credit unions as good alternatives to traditional banks. Orman encouraged viewers to find a good credit union near them. “Do you know by law federally chartered credit unions cannot charge you more than 18% interest rate?” Orman asked. “Get yourself a credit card at a credit union.” Credit unions offer an alternative to traditional banks and typically offer better rates than banks, CBS Evening News said. It mentioned First Community CU, Kalamazoo, Mich., which offers rates as low as 8% on credit cards. News Now reported last week that Ondine Irving, a bank adviser, told CBS that credit unions can offer cards without the high fees that banks charge, and still make a profit. “If credit unions can do it, banks should be able to as well. They are just choosing not to,” she said. The Costco Connection, a magazine for customers of wholesale retailer Costco, also featured Orman in its March 2010 issue. “Forget banks,” she told the magazine. “I prefer credit unions; their interest rates and fees tend to be a lot lower than what banks charge.” For more information, use the links.

IBoston GlobeI features CUs push on MBL cap

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BOSTON (3/2/10)--Credit unions are pushing to raise the member business lending cap for small businesses in the U.S. to help fulfill a pressing need in the economy, The Boston Globe reported Sunday. The newspaper conducted a wide-ranging question-and-answer session with Dan Egan, president of the Massachusetts, New Hampshire, and Rhode Island Credit Union Leagues, who was asked about the restrictions on the types of loans credit unions can offer members. “They can do just about any type of lending for consumers that is available anywhere else,” Egan replied to the Globe. “The big problem now is on the business side. We’re seeing a big increase in the number of people who are approaching credit unions for small business loans, and there’s an arbitrary cap on business lending for credit unions.” He was then asked if many credit unions have reached the limit. “Right now, in Massachusetts, one of the larger ones is close to the cap, and the others are staying away from the cap by cutting back on the loans they are offering,” Egan told the paper. “So, they are doing either Small Business Association guaranteed loans, which don’t count toward the cap, or they are doing only a limited number of loans. It’s presenting a barrier to credit unions. He noted that small business people “tell you if they are looking for a loan of less than $500,000, most banks don’t want to talk to them,” he added. “So you wind up with a lot of people coming to credit unions for loans. The average business loan for credit unions in this state is $254,000.” To read the article, use the link.

CUNA MBL push in prominent spot in IUSA TODAYI

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WASHINGTON (3/2/10)--Credit unions' push to lift the cap on member business lending (MBL) took front-page position in USA TODAY's "Money" section Monday.
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In "Credit Unions: Lift Cap on Small Business Loans," Credit Union National Association (CUNA) President/CEO Dan Mica said banks "have huge losses in their portfolio and our business loans are rock solid." The economic downturn presents credit unions' "best opportunity" to persuade lawmakers to lift the MBL cap to 25% from 12.25%, the national publication reported. It noted credit unions have picked up the slack as banks have pulled back on lending, It cited CUNA statistics in comparing loans of banks and credit unions. Banks' outstanding loans to small businesses fell 3.9% in the year ended June 30, while credit union loans rose 11% to $36 billion the first nine months of 2009. CUNA Chief Economist Bill Hampel told the publication that lifting the MBL cap to 25% from 12.25% would free an extra $25 billion or so in loans over three years and add nearly 100,000 jobs the first year. CUNA's witness from Friday's House Financial Services Committee hearing, Ron Covey, CEO of St. Mary's Bank CU, Manchester, N.H., told USA Today that the cap means he can't fund $4.8 million in loans. The article also told about Corvallis, Ore., restaurant owners who were rejected by three banks before OSU FCU approved a loan. The story was paired with a feature on how finances always are on the minds of small business owners. One business owner commented in that article that "in this climate, it is astoundingly hard to secure financing for anything."

Top 10 INews NowI stories for February

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MADISON, Wis. (3/2/10)--The Credit Card Accountability, Responsibility and Disclosures Act, member business lending, fraud and the “Move Your Money” campaign topped News Now's Top 10 Stories for February. Here are last month’s top stories: 10. CUNA ire on administration’s plan noted in American Banker WASHINGTON (2/9/10)--The Credit Union National Association's ire on behalf of credit unions when a recent Obama administration plan proposed to funnel $30 billion into community banks for business lending--but do nothing for credit unions--was highlighted in Monday's "People" section of American Banker. 9. Compliance: CUNA answers CARD Act credit concerns WASHINGTON (2/16/10)--In this month's Compliance Challenge, the Credit Union National Association addresses whether the Federal Reserve's recent Regulation Z final rule, which covers provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 that become effective on Feb. 22, contain any exceptions for share-secured credit card accounts with regard to determining an underage consumer's "ability to pay." 8. Fed to clarify rules under Regs E, DD WASHINGTON (2/22/10)--The Federal Reserve on Friday released a series of proposals that would clarify the portions of Regulation E, Electronic Fund Transfers, and Regulation DD, Truth in Savings, that address overdraft services. 7. Regulators reveal hot exam topics for 2010 WASHINGTON (2/24/10)--Staff from the National Credit Union Administration and two state-level financial regulators revealed some of the hottest exam topics that they will focus on this year—including indirect lending and risk concentration, which NCUA will soon provide guidance on in Letters to Credit Unions. 6. CUNA analyzes CARD Act rule for CUs WASHINGTON (2/2/10)--A comprehensive breakdown of the Federal Reserve Board's recently published final rules that restrict a number of credit card practices has been posted to the Credit Union National Association's website. 5. says to ‘Take this bank and shove it’ NEW YORK (2/12/10)--Angry consumers' big-bank bashing over bailouts, bonuses, and nickel-and-diming continues in the media, with credit unions singled out as a haven from fees. In "Take this bank and shove it," discusses consumers’ disenchantment with banks and highlights several people who switched from banks to credit unions. 4. Tax refund fraud is among latest scams WASHINGTON (2/18/10)--Credit unions should warn members that tax-filing season brings out tax-preparation frauds. The latest scheme involves tax refunds transmitted as a direct deposit or automated clearing house credit. 3. Problem CUs continue to be an NCUA focus ALEXANDRIA, Va. (2/1/10)--National Credit Union Administration Chairman Debbie Matz Friday expressed concern at the agency's open board meeting about the high number of CAMEL 3, 4, and 5 credit unions and the percentage of insured shares that they represent. 2. CUs outraged over biz lending snub by administration WASHINGTON (2/3/10)--Credit unions are outraged, baffled and feeling "snubbed" by the Obama administration's proposal to funnel $30 billion into smaller banks for business lending--but do nothing for credit unions, Credit Union National Association President/CEO Dan Mica said Tuesday. 1. CUNA compiles FAQ on CARD Act queries WASHINGTON (2/22/10)--As promised, the Credit Union National Association on Friday posted a list of frequently asked questions related to the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which becomes fully effective today.