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CU System Briefs (04/26/2013)

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  • LUBBOCK, Texas (4/26/13)--Jeffrey B. Hensley, 42, of Lubbock, Texas, has been arrested as a suspect in three local robberies, including the Feb. 13 holdup at Alliance FCU in Lubbock.  Hensley has been charged with one count of credit union robbery. He is also a suspect in robberies on Sept. 14 of First United Bank and Dec. 18 of PlainsCapital Bank. In all three robberies, the holdup man slipped a threatening note to tellers and fled with cash (Lubbock Avalanche-Journal April 25)  If convicted, Hensley faces up to 20 years in prison (Associated Press via San Francisco Chronicle April 25) ...
  • WESTBURY, N.Y. (4/26/13)--NEFCU is celebrating its 75th anniversary by reaching the $2 billion milestone in assets. The Westbury, N.Y.-based credit union began in 1938 as Valley Stream Teachers FCU with nine members and $45 in deposits and served employees of Valley Stream Schools and their families. Today it serves more than 150,000 members. It took nearly 70 years to reach the $1 billion asset mark and six years to double those assets. "While we recognize that many aspects of our business will change, through it all, our mission has and will continue to remain the same--to ensure than our membership and their families achieve financial success," said Edward P. Paternostro, NEFCU president/CEO. In celebration, NEFCU is offering Long Islanders a home equity line of credit with an 0.75% annual percentage rate (APR) for six months and personal loans for $500 to $20,000 with terms from six to 60 months at rates as low as 6.75% APR. It also is offering $75 to those who open a free checking account with direct deposit ...
  • BASKING RIDGE, N.J. (4/26/13)--Beth Degnan, assistant vice president of external affairs and financial education for Affinity FCU, Basking Ridge, N.J., has been appointed to the New Jersey Coalition of Financial Education (NJCFE) Board of Directors. NJCFE Chair Maryanne Evanko made the appointment during the coalition's Annual Membership Meeting in Hamilton Square, N.J., said the New Jersey Credit Union League (The Daily Exchange April 25) ...

Illinois, Louisiana Leagues Tell Why CUs Are Tax Exempt

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MADISON, Wis. (4/26/13)--The Illinois and Louisiana Credit Union Leagues and Alabama CU weighed in on the tax status battle to tell why credit unions are tax exempt in two publications Wednesday.

Illinois Credit Union League President/CEO Daniel Plauda, in an opinion-editorial in Wednesday's State Journal-Register, noted banking associations' media campaign to pursue taxing credit unions.

"Stripping credit unions of their tax-exempt status won't deliver the revenue Illinois needs," Plauda said. "Worse, such a move would pick the pockets of almost three million state residents who rely on credit unions to provide them with affordable financial services."

Credit unions are member-owned, democratically run financial cooperatives; they typically offer loans with lower interest rates than those at for-profit banks and pay higher interest on savings accounts, he said.

"As not-for-profit, member-owned entities, credit unions are exempt from federal and state income taxes," Plauda wrote, noting credit unions "pay property, sales and payroll taxes." All excess revenue is returned to the member through better rates and more affordable services. As new bank fees have proliferated, Americans "have moved to credit unions in droves." For the full article, use the link.

Banks are fighting credit union's tax-exempt status while forgetting about the growing sector of banks operating as Subchapter S organizations, said the Louisiana Credit Union League and Tuscaloosa Ala.-based Alabama CU in Wednesday's Credit Unions Online.com. Use the link to access the article.

Banks should examine their complaints and take the tax issue off the table, said Connie Major, Louisiana league executive vice president, noting  Subchapter S organizations "aren't paying as much taxes either." Competition drives a healthy marketplace, Major said. She urged banks "to consider converting to a volunteer board. Credit unions and banks operate through an entirely different model where banks are for profit and have stock holders--we're just completely different from one another."

Banks bring up the tax issue virtually any time credit unions seek additional powers such as trying to raise their member business lending cap, said Alabama CU President/CEO Steve Swofford. "Banks believe that by threatening the loss of the tax exemption they can force credit unions to operate under laws passed over 50 years ago," he said, adding they use any federal or state government fiscal crisis as an opportunity to raise the issue. The amount of money that would result from taxing credit unions "is truly minimal."

Protecting credit unions' tax exempt status is the top priority of the Credit Union National Association. To help credit unions talk about the value of credit union membership and why credit unions are tax exempt, CUNA has created a Tax Status Advocacy Toolkit, which contains newsletter articles, radio and print ads, credit union data, state-level updates on tax issues, member communication pieces and more.

Members who understand the value of their membership will stand to defend the tax exemption of credit unions, maintains CUNA President/CEO Bill Cheney said. For more information, use the link.

League To Reach Out To New Commerce Director

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COLUMBUS, Ohio (4/26/13)--The Ohio Credit Union League plans to reach out to the state's new director of commerce, Andre Porter, to begin gauging his understanding of credit unions and their unique role in the financial services industry.

Gov. John Kasich appointed Porter, who served as a member of the Public Utilities Commission of Ohio, to the position earlier this month, said the league (eLumination Newsletter April 17). Porter is also a former attorney.

The Ohio Division of Financial Institutions, which regulates state-chartered credit unions, is part of the Department of Commerce.

CUAD's CU Social Good Teams With CU4Kids

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BISMARCK, N.D. (4/26/13)--CU Social Good, the Credit Union Association of the Dakotas' (CUAD) new website, is linked with the Credit Unions for Kids (CU4Kids) website and features stories about the fundraising activities credit unions do for their local Children's Miracle Network Hospitals. 

The collaboration is designed to bring attention to both CU Social Good and the CU4Kids organization. The CU Social Good website now has a category for CU4Kids stories. The CU4Kids website will link back to CU Social Good for its Fundraising Highlights link. 

"The support Credit Unions for Kids gives to children's hospitals is truly remarkable" said Robbie Thompson, CUAD president CEO. "Hopefully these stories will encourage even more in our industry to support this great organization."

CU Social Good was launched in January. The website has already posted more than 700 stories about credit unions charitable donations, fundraising activities, volunteer work, financial literacy efforts and scholarships. 

CU4Kids is a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide engaged in fundraising activities to benefit 170 Children's Miracle Network Hospitals. Credit unions are the third-largest corporate sponsor of the hospitals. 

"As the stories on CU Social Good clearly display, credit unions are truly about 'people helping people,' and we are proud and honored to benefit from their generosity and commitment to their communities," said Joe Dearborn, Children's Miracle Network Hospitals senior director of corporate partnerships.

Connecticut House OKs Savings Raffles

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HARTFORD, Conn. (4/26/13)--The Connecticut of House of Representatives passed legislation Wednesday that would allow the state's credit unions and community banks to offer savings promotions raffles, under certain conditions.

House Bill 5564 now goes to the state Senate for consideration (Associated Press April 25).

The Credit Union League of Connecticut supported the bill, Kelly Fuhlbrigge, league vice president of government relations, told News Now. "We lobbied in support of the bill and submitted testimony as well," she said.

"We are committed to educating our members, and potential members, to become better educated consumers of financial services," Anthony L. Emerson, president/CEO of the league, told News Now. "We support this bill because it embodies the mission of credit unions to help and educate our members."

The league sent out a release to state member credit unions Wednesday. It read: " ... the state House of Representatives unanimously passed House Bill 5564, An Act Encouraging Increased Savings Deposits. This bill, if also passed by the Senate and then signed into law by the governor, would encourage individuals who are age 18 or older, who don't normally save money, to begin making or to increase the frequency of their deposits into a savings account or other savings program offered by a Connecticut credit union or community bank through a lottery type program.

"This bill was based on a National Credit Union Foundation program and promotes savings by allowing credit unions and community banks, who choose to provide this program, yet another vehicle through which they can reach out and educate members on the importance of saving," the league added.

House Bill 5564 stipulates that participating credit unions and community banks would have to disclose the terms and conditions of the raffle and maintain records that could be audited, if necessary, said the AP. Only financial institutions that have secure finances, as determined by the state's banking commissioner, could offer raffles.

Participants who deposit a minimum amount in a savings account or program would have the chance to win designated prizes, the AP added.

Several other states, including Michigan, Nebraska, North Carolina and Washington, offer savings raffle programs (News Now March 28).

Study: Finance Industry Top Hacker Target

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NEW YORK  (4/26/13)--Financial organizations were the top target of cybercriminals in 2012, with 37% of data breaches, according to Verizon's 2013 Data Breach Investigations Report.

Finance led the overall incident count, but once ATM skimming incidents were filtered from the mix, the finance sector dropped to just above the middle of the pack, said the New York-based Verizon.

The report comes just as the Credit Union National Association is warning credit unions about a potential denial of distributed service attack expected in May. (See News Now story, "CUNA Warns Of Potential Denial Of Service Attack.")

Ninety-two percent of last year's breaches were perpetrated by outsiders, and 14% by insiders. That finding has been consistent through each year of the study but bucks the general opinion that insiders commit more fraud, said the report.

"All in all, 2012 reminded us that breaches are a multi-faceted problem, and any one-dimensional attempt to describe them fails to adequately capture their complexity," said the company.

During 2012, Verizon analyzed more than 47,000 reported security incidents and 621 confirmed data breaches. Since its study began nine years ago, it has reviewed 2,500 data breaches and 1.1 billion compromised records.

Last year's breaches were in a number of forms: 52% engaged in some form of hacking; 76% network intrusions exploiting weak or stolen credential; 40% malicious software (malware); 35% physical attacks; 29% social tactics; and 13% privilege misuse or abuse. The first three decreased since the 2012 study covering 2011's breaches. Physical attacks and social tactics increased.

Certain commonalities existed among the breaches. Seventy-five percent of the breaches were for financial motives, 71% targeted user devices; 54% compromised servers; 75% were considered opportunistic attacks; 78% of initial intrusions were rated as low difficulty; 69% were discovered by external parties; and 66% took months or longer to discover.

What can credit unions and others do to mitigate breach activity? The report made eight suggestions:

  1. Eliminate unnecessary data and keep tabs on what's left.
  1. Ensure essential controls are met and regularly check them.
  1. Collect, analyze and share incident data to create a rich data source to drive security program effectiveness.
  1. Collect, analyze and share tactical threat intelligence--especially indicators of compromise--that can aid defense and detection.
  1. Without deemphasizing prevention, focus on better and faster detection through a blend of people, processes and technology.
  1. Regularly measure data such as number of compromised systems and mean time to detection in networks, and use them to drive security practices.
  1. Evaluate the threat landscape to prioritize a treatment strategy. Avoid the one-size-fits-all security approach.
  1. If you are a target of espionage, don't underestimate the tenacity of the adversary or the intelligence and tools at your disposal.

Ohio League State Award Winners Announced

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COLUMBUS, Ohio (4/26/13)--The Ohio Credit Union League announced  its 2013 Leadership Recognition Awards earlier this month.

Stan Barnes, CEO of Canton School Employees SE FCU in Canton, was named Professional of the Year (eLumination Newsletter April 3).

Other first-place award-winners were:

  • Atomic CU, Piketon---Desjardins Youth Financial Education Award;
  • BMI FCU, Dublin--Desjardins Adult Financial Education Award;
  • Faith Community United CU, Cleveland, and Kemba CU, West Chester--Dora Maxwell Social Responsibility Community Service Award;
  • State Transportation Employees, Columbus;  Day Air CU, Kettering; and the Central Ohio Chapter--Louise Herring Philosophy-in-Action Member Service Award; and
  • Fiberglass FCU, Newark--Cutting Edge Marketing Brilliance Award for non-agency entries.

CUNA Warns Of Potential Denial of Service Attack

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MADISON, Wis. (4/26/13)--With the increasing prevalence of Distributed Denial of Service (DDoS) cyberattacks, the Credit Union National Association is alerting credit unions to "chatter" that has been detected about a potential widespread attack that could be planned for May 7.

"It is not possible to assess the veracity of the threat at this time, but it is important that credit unions be aware and prepared at all times.  Also, some of the largest credit unions are included in a list of targets for the purported May attack so heightened awareness is warranted," said CUNA Vice President of Information Technology Tom Nohelty Thursday.

DDoS attacks are attempts to disrupt or suspend online service by saturating a target's network with external communication requests to overload its server.

If a credit union is subject to an attack, Nohelty explains, it will see a "very large spike" in Internet traffic to its website from one or more IP addresses and their website will become unresponsive. Proactive measures a credit union can take include:

  • Alerting its network team to actively monitor in-bound Internet traffic that day.  The team should be prepared to block traffic from specific IP addresses in an effort to maintain their website's ability to respond to normal business requests;
  • Consider alerting members about the Internet threat for May 7 and asking members to execute critical online banking business on a different day or come into the credit union office;
  • Educating call center staff on the symptoms of a denial of service attack so they can better serve the members and notify their network teams if an attack is underway.  The call center staff should be prepared with alternatives to serve the members.
The National Credit Union Administration stepped into Washington's cybersecurity discussions earlier this year and identified policies and procedures to guard against DDoS attacks in a new credit union risk alert (13-Risk-01). The alert notes that the sophistication of such attacks require the vigilance of credit unions offering Internet-based financial services. (See resource link to read NCUA tips on mitigating issues presented by DDoS attacks.)

Also of note, the CUNA Technology Council is offering a free May1 webinar entitled, "Mitigating and Responding to a Distributed Denial of Service Attack."  Speakers Bill Podborny, chief security officer of Alliant CU in Chicago, and Glen Roberts, information security researcher of University FCU in Austin, Texas, will lead the session, which is scheduled for 1 p.m. (CT).

CUs Educate With 'a Giggle' During Youth Week

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MADISON, Wis. (4/25/13)--Credit unions are in mustache and mystery mode this week in celebration of the National Credit Union Youth Week theme, Savings Sleuth: Solve the Mystery.

"This year we certainly are pulling out the playful, even silly, side of Youth Week--but that's our secret weapon," said Joanne Sepich, Credit Union National Association Youth Week coordinator. "With a wink, a smile, and a giggle, credit unions are introducing basic money management skills to children of all ages this week."

Among the ways credit unions and credit union organizations celebrated youth and saving this week:

  • Savings Safari Club members (kids 12 and under) and Xtreme Teen Savers Club members (ages 13 to 18) at Belco Community CU, Harrisburg, Pa., are treated to free giveaways, prizes and refreshments when they visit one of the credit union's branches. With every deposit of $10 or more into their youth club account during April, kids receive an entry to win an Apple iPad mini. If Belco meets its National Youth Saving Challenge goal, the credit union will donate $1,000 to the Ronald McDonald House.
  • Click to view larger image IRCO Community FCU of Phillipsburg, N.J., is celebrating Youth Week with a Mystery Scavenger Hunt. Kids Club members were provided a detective kit and a clue list to find coins. When they deposit the correct coins into their Kids Club account, they are entered in a drawing for movie tickets. They also can get their photos taken as a detective, complete with moustache, hat and trench coat. (Photo provided by New Jersey Credit Union League)
    CUNA staff celebrated Youth Week with a "Name that 'Stache" contest in which employees were asked to identify colleagues wearing mustaches. Employees also were provided with finger 'stache tattoos, treats, and snapshots of credit union Youth Week celebrations nationwide.
  • The Michigan Credit Union League's 10th Annual Financial Literacy Legislative Challenge pairs lawmakers with credit unions in their communities to schedule joint youth financial education events during National Financial Literacy Month in April. The challenge is a cooperative effort to build relationships between Michigan legislators and their constituents in the credit union community while teaching youth money management skills (Michigan Monitor April 15).
  • At Freedom CU, Warminster, Pa., members can take part in the credit union's "Savings Sleuth Scavenger Hunt" by answering a Freedom trivia question each day. The credit union posts the questions on its website and Facebook page. Twenty-five young people who answer all five questions correctly by the end of the week will be randomly selected to win $50 each.
  • Click to view larger image Employees of Rivers Edge Community CU in Allen Park, Mich. donned mustaches and organized a slate of events for National Credit Union Youth Week. They also assisted a local Reading is Fundamental Program. The credit union distributed identification kits, ran a penny-counting contest and offered incentives for new accounts. (Photo provided by Rivers Edge Community CU)
    Employees of Fremont (Ohio) FCU visited local second-grade classrooms to help children understand the difference between wants and needs and discuss the ways kids can earn money. The classes will have the opportunity to tour two of the credit union's branches.
  • Employees of Meadville (Pa.) Area FCU will be dressed today for Clown Day and serve popcorn and refreshments, the Pennsylvania Credit Union Association said (Life is a Highway April 24). Throughout the week, children who make a deposit of $5 or more into their youth account will receive one entry into a weekend drawing. Any youth account opened during Youth Week will receive an introductory prize.
  • Lebanon (Pa.) FCU will host a meet and greet Saturday with 14-year-old Amber Britto, who drives the No. 43A car at local and area racetracks. Amber will have her "slingshot" car on display (Life is a Highway April 25).
  • Click to view larger image Nearly 100 students from Alief Hastings Ninth Grade Center High School, Houston, attended a REAL Solutions Financial Reality Fair sponsored by People's Trust FCU, and the People's Trust Foundation, the Texas Credit Union League said (Lone Star Leaguer April 22). The fair is made available for free to Texas REAL Solutions credit unions as a result of donations from the league, Texas Credit Union Foundation, the Friends of Consumer Freedom and the National Credit Union Foundation. (Photo provided by the Texas Credit Union League)
    The Dunn County News published an opinion-editorial by WESTconsin CU, Menomonie, Wis., describing credit union's Youth Week activities. In the editorial, the credit union also offered "clues" to help children save. WESTconsin CU hosted on-site and off-site financial literacy activities within the communities it serves. The credit union offered games, learning activities and treats. To read the editorial, use the link.
  • Achieva CU, Largo, Fla., posted a video of its Youth Week activities. Use the link.
National Credit Union Youth Week was created by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. It teaches the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

CUNA also conducts the National Youth Saving Challenge throughout April. The challenge rewards 10 savers with $100 cash prizes.