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Wall Street Journal other national media tout CUs

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NEW YORK and WASHINGTON (4/29/08)--The Wall Street Journal, MarketWatch and Dow Jones News Service are among the national media piling on to recommend consumers check credit unions for better deals. Credit Union National Association (CUNA) chief economist Bill Hampel and California Credit Union League economist Daniel Penrod were quoted extensively in an article carried by the Journal and MarketWatch on Sunday and by Dow Jones on Monday. "When it comes to low fees and generous rates, credit unions match banks head-to-head," it said, noting that credit unions' products " should be among the options you consider when searching for savings and checking accounts, certificates of deposit, small-business, mortgage and auto loans, and credit cards--particularly now, given that credit unions in large part sidestepped the subprime crisis." Hampel explained that credit unions' not-for-profit cooperative status means they don't charge as much. "We don't have to charge as much, we're not going for profit, and we don't have to pay taxes on the net income we do make," he said. Both Hampel and Penrod pointed out credit unions have weathered the subprime crisis better than some larger banks because credit unions didn't loosen their lending standards to boost profits. "Credit unions essentially make no subprime loans," said Hampel. "They made a few loans to borrowers who had subprime credit histories, but these were not under a subprime loan program." For the full article, use the link.

CU System briefs (04/28/2008)

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* COLUMBIA, Md. (4/29/08)--For the first time, the Maryland and District of Columbia Credit Union Association's (MDDCCUA) board elections will be conducted online (Focus Newsletter April 28). In 2007, MDDCCUA's members approved bylaws to allow it to conduct its election electronically. The election will employ a secure, third-party balloting system provided by VoteNet Solutions, which will also act as tellers of election. Five candidates are running for four seats, each with a three-year term. Candidates are: are Miguel Boluda Jr., incumbent, CEO, PAHO-WHO FCU; Chris Conway, incumbent, CEO, Educational Systems FCU; Charles Mallon, incumbent, CEO, Congressional FCU; Joe Sparacino, chairman, Montgomery County Employees FCU; and Rod Staatz, incumbent, SECU CU … * NORTHVILLE TOWNSHIP, Mich. (4/29/08)--Central Macomb Community CE has teamed up with the Clinton Township of Michigan Works to help the area's unemployed find new jobs. It is conducting an hour-long workshop on how to create a cover letter and resume, the importance of professional image and appearance, and how to answer tough interview questions. The workshop will be held the second Thursday of each month. The credit union is also organizing a clothing drive to assist job seekers inmaking a strong first impression (Michigan Monitor April 28) … * BAY CITY, Mich. (4/29/08)--For the third consecutive year, FinancialEdge Community CU has partnered with United Way of Bay County Retired Senior Volunteer Program (RSVP) and the Bay County Division on Aging to provide low- to moderate-income individuals and families with free access to file for state and federal income tax credits and refunds. The Volunteer Income Tax Assistance Program (VITA) is housed at the credit union. This year's program helped file 1,256 tax returns and brought $699,354 back to area residents. FinancialEdge also offered free tax filing online through "Just File It!" program, where taxpayers can file their return via the credit union's website … * RANCHO CUCAMONGA, Calif. (4/29/08)--A delegation of 11 CEOs and board chairman/presidents from India's cooperative banks visited credit unions nationwide this month, including Las Vegas-based Community One FCU and Los Angeles-based Water and Power Community
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FCU. The group met with Community One FCU President/CEO Alan Pughes and his board and executive staff at the $169.5 million asset credit union. Pughes provided the credit union's history, and Vice President of Marketing Jerry Rosen presented a marketing overview. At the $432.8 million asset Water and Power Community FCU, the group met with CEO Carl Stewart (sixth from right), Orange County’s CU CEO Shruti Miyashiro, USC CU Chief Information Officer Sona Bodiwala, and WesCorp Vice President of Marketing Kevin Lytle. The delegation also visited the National Federation of Community Development Credit Unions in New York; Credit Union Central of Canada and Credit Union Central of Ontario; and the World Council of Credit Unions, the Credit Union National Association and CUNA Mutual Group in Madison, Wis. (Photo provided by the California Credit Union League) … * DUBLIN (4/29/08)--The Irish League of Credit Unions marked its 50th anniversary during its annual general meeting in Limerick on Saturday. Uel Adair, president, addressed the conference on its developments since its beginnings in 1958. Nearly three million people are members of 521 branches of credit unions in Ireland (Evening Herald April 26) …

Washington State fin lit work group includes CUs

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OLYMPIA, Wash. (4/29/08)--The Washington Financial Literacy Work Group has been created and includes several representatives from the state’s credit union industry. The work group was developed in response to legislation sponsored by Gov. Chris Gregoire to assess financial literacy in the state. Group members from the credit union industry include:
* Stacy Augustine, senior vice president and general counsel, Washington Credit Union League; * Cathy Brorson, outreach coordinator, Kitsap CU, Bremerton, and chairman, Credit Union Youth Development Council of Washington; and * Linda Jekel, director, Division of Credit Unions, Washington Department of Financial Institutions.
Specifically, the group is tasked with addressing three issues presented in Senate Bill 6272, which the governor signed on Feb. 11:
* To identify current state-funded efforts to support financial literacy; * To assess whether there are opportunities to create a centralized location of information regarding the existing state efforts; and * To identify whether opportunities exist for expanding partnerships with other community entities that also provide financial literacy services.
The work group will determine the status of financial literacy in the state and define what action is necessary to increase financial literacy at all age levels. The group will provide regular interim reports on its findings and submit a final report to the governor and legislature by Dec. 1.

Volunteering alive and well in Maine CU movement

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WESTBROOK, Maine (4/29/08)--The Maine credit union movement’s volunteer program--Credit Unions Share for ME--released the final results of volunteer efforts by Maine’s credit unions in 2007, in celebration of National Volunteer Week, which began Sunday and ends Saturday. The six-year-old, award-winning program documented a record-setting 23,004.5 hours volunteered by credit union staff and directors in 2007, an increase of 18% over the previous year, according to the Maine Credit Union League, which coordinates the program. The value of time volunteered by Maine’s credit unions equaled $350,000 in 2007, based on figures from the Bureau of Labor Statistics, which calculates the value of one hour volunteered in Maine at $15.25. The amount of volunteers participating in the program also saw an increase of 13% from the previous year with 2,304 individuals from credit unions recording time spent volunteering in their communities. In 2007, the top five credit unions contributing the most volunteer hours were:
* Rainbow FCU, Lewiston, 2,517; * Saco Valley CU, Saco, 2,501; * Five County CU, Bath, 1,920.5; * Midcoast FCU, Bath, 1,698.5; and * Franklin-Somerset FCU, Skowhegan, 1,342.25.
The top five credit unions with the most volunteers were:
* Rainbow FCU, 215. * Five County CU, 191; * Saco Valley CU, 177; * Midcoast FCU, 172; * Ocean Communities FCC, Biddeford; and NorState FCU, Madawaska, 118;
Throughout the year, credit union representatives participated in a variety of community-service initiatives from delivering meals to seniors and donating blood, to youth athletics and serving as flag bearers at military funerals. In 2007, the program averaged 1,917.04 hours volunteered per month, with an average of 192 volunteers participating. The program tracks and updates the volunteer efforts of credit unions on a monthly basis. “By their very structure, credit unions are about volunteers, with each credit union governed by a volunteer unpaid board of directors,” said Jon Paradise, league governmental and public affairs manager. “Credit unions are not just about being located in the communities they serve, but truly being a part of them through involvement, for the simple reason of it being the right thing to do. “The program began during National Volunteer Week six years ago, so we announce the previous year’s figures at this time each year,” he added. “It highlights and recognizes the hundreds of individuals who volunteer and are involved with causes and activities in their communities throughout the year.

WOCCU heads off Costa Ricas anti-CU efforts

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SAN JOSE, Costa Rica (4/29/08)--World Council of Credit Unions (WOCCU) officials last week mounted an effort to head off anti-credit union sentiments among banks and other financial institutions in Costa Rica.
World Council of Credit Unions (WOCCU) and Alabama Credit Union League officials visited Costa Rica to protect the country’s credit unions’ tax-exempt status. From left: Pete Crear, WOCCU president/CEO; Manual Bolanos, CEO of the Federacion de Cooperativas de Ahorro y Credito de Costa Rica R.L.; Oscar Arias Sanchez, Costa Rica’s president; Gary Wolter, president/CEO, Alabama Credit Union League; Jose Eduardo Alvarado, CEO Coopenae CU; Victor Corro, WOCCU international partnerships manager; and Edwin Barboza, president, Costa Rica’s National Council of Co-ops. (Photo provided by the World Council of Credit Unions)
They also mounted an international lobbying effort against the threat of taxation facing the Central American country’s not-for-profit financial cooperatives. WOCCU officials and the Alabama Credit Union League visited with Costa Rican government officials, including President Oscar Arias Sanchez, at the request of the Federacion de Cooperativas de Ahorro y Credito de Costa Rica R.L. (FEDEAC), WOCCU’s Costa Rican member organization. The Alabama league and FEDEAC are partner organizations through WOCCU’s International Partnership program. Costa Rican banks have attacked the country’s credit unions because credit unions have grown rapidly and increased their market share from 3% to 12% in assets. The country’s credit unions also are growing membership 15% per year and have evolved from small storefronts to more sophisticated and competitive financial institutions. A few credit unions exceed some Costa Rican banks’ asset sizes, and the banking industry has lobbied the country’s government and presented the cooperatives as an untapped source of tax revenue. “No matter how successful they are and no matter where they’re located, credit unions are member-owned financial cooperatives and should not be taxed,” said Pete Crear, WOCCU president/CEO. “Our goal is to help Costa Rican lawmakers understand the differences between credit unions and banks and legislate appropriately.” Gary Wolter, Alabama league president/CEO, and Vicki Williams, league senior executive vice president and chief operating officer, met with Sanchez April 23. Sanchez spoke favorably about credit unions as a way to help the country’s rural poor. He appreciated the solidarity shown by WOCCU in support of Costa Rica’s credit unions and how external support might foster the growth of his country’s cooperatives, Sanchez added. Wolter and Williams also visited Costa Rica’s National Congress. WOCCU and FEDEAC officials pledged to monitor activities within Costa Rica’s legislature and respond to threats against the country’s credit unions. “Credit unions have been exceptionally important for the development of rural indigenous communities in this country,” said Jose Manuel Echandi, congressional representative for Costa Rica’s Independent Party. “Where communities previously were barely able to meet basic subsistence needs, they now have access to resources for building wealth and are expanding into new entrepreneurial activities.”

Former teller sentenced to eight-plus years embezzled 7 million

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NEW ALBANY, Ind. (4/29/08)--A former teller at Obelisk FCU was sentenced to eight years and one month in prison for embezzling $7 million from the credit union between 2003 and March 2007. The sentence was handed down by Chief U.S. District Judge David F. Hamilton at a hearing in New Albany, Ind. Patricia Helen Sherman, Louisville, Ky., pleaded guilty and received the minimum prison term under sentencing guidelines (Louisville Courier Journal April 26). The embezzlement loss led to the financial downfall of the decades-old credit union in New Albany, the newspaper said. Obelisk was taken over last summer by Central CU, a $717 million asset, Columbus, Ind.-based credit union. Hamilton also sentenced Sherman to five years of supervised release following her prison term, and ordered her to pay restitution of $7,012,900 to the credit union. Sherman hid stacks of $100 bills while inside the credit union vault and then regularly altered financial records to conceal the shortfall, authorities said. The thefts came to the attention of the credit union in March 2007 when an employee confronted Sherman about a discrepancy between the vault’s cash balance and the ledger, court records said.

Study Use of contactless payment cards to double

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SAN FRANCISCO (4/29/08)--Contactless technology will become mainstream for payment card transactions--with 57 million consumers using chip-embedded credit cards to make payments by 2013, more than doubling the 24.8 million in 2008, according to a recent study. The report, released by Javelin Strategy and Research, notes that the promotion of non-network payment products will drive acceptance, thwart competition and pave the path for mobile payments. The products will lead to radical changes in personal finance, Javelin said. However, consumers won’t benefit from contactless payments until the primary players--card networks, financial institutions, mobile carriers, merchants and handset manufacturers--work toward a unified solution, said Javelin Founder/President James Van Dyke. Progress in the contactless payments area has been slowed because there isn’t sufficient incentive for merchants and wireless carriers to make investments that will enable contactless infrastructure development and evolution to mobile payments. Card networks must create acceptance among merchants and migration among wireless carriers with a step-by-step contactless-to-mobile conversion strategy that builds on consumers’ needs for simplicity, integrated financial management and control, the report said. “To drive the next phase of contactless payments, card networks must help merchants create competitive, desirable products: closed-loop gift cards and private label cards,” said Bruce Cundiff, Javelin director of payments research and consulting. “This will create a robust contactless infrastructure, hinder the development of products and networks from threatening powerhouses such as PayPal and Google, and spur wireless carriers to push the speed of near field communications-based (NFC) technology.” NFC is a short-range high frequency wireless communication technology used to exchange data between devices within four inches of each other.

Papers address alternative payday loans lending excellence

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MADISON, Wis. (4/29/08)--Credit unions can learn how to develop a payday lending alternative program and about the 2007 Excellence in Lending Award winners in two new white papers from the CUNA Lending Council. “Payday Lending: The Credit Union Way” guides credit unions through the process of developing a payday-alternative loan program. The paper explains what payday loans are, who uses them, and possible alternatives to payday loans. The paper touches on options credit unions should consider when offering a short-term loan and includes an appendix to help with those decisions. The other white paper, “Building the Basics: 2007 Excellence in Lending Awards Recognize Results and Innovation,” describes the consumer lending, mortgage lending and lending to members of low-to-modest means programs of five credit unions: Sound CU, Tacoma, Wash.; 360 FCU, Windsor Locks, Conn.; Boulder Valley CU, Boulder, Colo.; Syracuse Cooperative FCU, Syracuse, N.Y.; and North Island CU, Chula Vista, Calif. CUNA Council members can receive complimentary copies of the papers; non-members can purchase the white papers for $50 per copy. For more information, use the links.

Florida CU regulator Sharon Whiddon to retire

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TALLAHASSEE, Fla. (4/29/08)--Sharon Whiddon, bureau chief of Florida's Bureau of Credit Union Regulation, has announced she will retire, effective June 30. Whiddon has been with the bureau since Sept. 11, 1972--nearly 36 years, she told News Now. She started out as an examiner I in banking, but has served in the credit union division since 1985. She has served as bureau chief for the past 20 years. The bureau, which is within the state's Office of Financial Regulation, regulates 83 state-chartered credit unions. Whiddon told News Now that her most memorable responsibility during her years of service occurred in the early 1990s, when Florida converted all of its then-150 credit unions from private share insurance to federal share insurance under the National Credit Union Share Insurance Fund. Although she is retiring from the bureau, she says she'd like "to work for several more years and stay in the (credit union) industry."