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CEO of U.K.s largest CU to resign after inquiry

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YORKSHIRE, U.K. (4/8/08)--The CEO of the largest credit union in the United Kingdom is resigning after an inquiry into lending activities at the credit union was made public. Sue Davenport, CEO of Leeds City CU (LCCU), will leave the position, effective next month. A statement issued by the credit union said she was pleased to have been part of the team who made Leeds one of the top credit unions in the country but wanted a quieter life (Yorkshire Post April 7). The newspaper reported an internal panel had been set up to investigate the credit union's management concerning loans made to a family member and to the credit union's staff. The newspaper said the loans were made on favorable terms in violation of the credit union's bylaws. A three-member panel of directors of the credit union was split on its findings but details of the majority and minority reports were unavailable.

2007 was a good year for Missouri CUs---Holub

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JEFFERSON CITY, Mo. (4/8/08)--2007 was a good year for credit union membership, despite difficult economic times, noted Missouri Credit Union Association (MCUA) President/CEO Rosie Holub as she delivered the “State of the State” address at MCUA’s Annual Advocacy and 79th Annual Business Meeting April 1.
Steven Brooke (left), Tigers CU--on the University of Missouri Campus, Columbia-- discusses student-run credit unions with Missouri State Rep. Mike Frame (D-15) at the Missouri Credit Union Association’s (MCUA) Annual Advocacy and 79th Annual Business Meeting April 1.
Credit union assets in the state increased $379 million--or 4.6%--to $8.7 billion. Membership growth was higher than the national average and the strongest since 2003, with most growth occurring in the fourth quarter of 2007. Holub highlighted the role credit unions play in the current national economic crisis. “Credit unions were formed and filled a need during the Great Depression,” she said. “We are well-positioned now with strong capital positions to reach out to help members and our communities during these economically challenging times.” Also announced at the meeting were patronage rebates of $123,500 from the Credit Union Partnership (CUP), which is the for-profit services corporation of MCUA. The rebates were distributed April 2 to reward member credit unions for their use of core fee-supported services.
From left: Derek Gebelhardt and Diane Powell of Poplar Bluff, Mo., FCU, share information with State Rep. Gayle Kingery (R-154) at the Missouri Credit Union Association’s (MCUA) Annual Advocacy and 79th Annual Business Meeting. (Photos provided by the Missouri Credit Union Association)
The four core products that provide revenue for CUP are League Item Processing, credit union shared-branch network, credit and debit cards, and CUNA Mutual Group insurance. “Credit Unions Make the Difference” was the theme for the meeting, and state lawmakers learned how credit unions make the difference for Missouri consumers during the two-day event. More than 50 state legislators attended MCUA’s legislative dinner reception March 31. Credit union staff and volunteers were formally recognized on the House and Senate floors at the Missouri Capitol April 1. Attendees visited with lawmakers, delivering gifts and credit union difference message. The annual meeting also provided an opportunity to recognize credit unions statewide for extraordinary efforts at a reception. Two credit unions received the first “You Make the Difference” Advocacy Program Awards. Neighbor CU, St. Louis, achieved both the bronze and silver level recognition levels for its advocacy activities, while Community Financial CU, Springfield, achieved the bronze level. Also, Missouri credit unions unanimously approved a modification to their dues formula that reduces dues from $1.50 to $1.25 per $1,000 in assets. It takes effect in 2009 and will have the greatest impact on smaller credit unions, resulting in as much as 17% savings for some credit unions.

Equifax Business fraud a growing problem

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ATLANTA (4/08/08)--Nearly 20% of financial institutions are unaware of their financial losses from business fraud, said a recent Equifax study. The results could be troublesome for some credit unions--who actively work to provide business lending services to their members. The study also indicated that many organizations are still in the early stages of addressing fraud. Nearly 75% of businesses rely solely on credit reports to check for fraud, Equifax said. To combat fraud, Equifax suggests that financial institutions:
* Verify the existence of a business; * Target accounts that have been flagged with suspicious fraud attributes and require further investigation; * Confirm the relationship between the business and applicant; and * Decrease potential for applicants to be flagged as fraudulent because of mis-keyed information.
Equifax has created the Business Fraud Advisor solution to help financial institutions prevent fraud. The solution uses LexisNexis and database information to validate a business’s identity and verify application data. Application fraud accounts for 65% of commercial fraud and is the most costly in terms of business impact, Equifax said. “While the prevalence of identity theft among consumers has been known for a long time, commercial fraud has only recently emerged as a major issue,” said Michael Shannon, president of Equifax Commercial Information Solutions.

Retired MCUL PresidentCEO LaChapelle dies

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NORTHVILLE TOWNSHIP, Mich. (4/8/08)--George R. LaChapelle, former president/CEO of the Michigan Credit Union League and former chairman of the Credit Union National Association (CUNA), died Feb. 14 at the age of 86. According to the Michigan league, LaChapelle had been in declining health. He died in Marquette, where he had resided since 2005 (Michigan Monitor (April 7). In 1952, LaChapelle became a charter member and treasurer of South Shore Employees FCU. He also was a charter member and volunteer at Marquette Catholic CU in 1953, and worked as a field representative in 1955 and 1956 for the Michigan league. From 1956-1974, he served as treasurer/manager of Iron Mountain-Kingsford Community FCU and on MCUL's board of directors. He was league chairman from 1967 to 1971 and CUNA chairman 1971-1973. In 1974, he became president/CEO of the league, a post he held seven years.

CUs difference explained in Long Island paper

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LONG ISLAND, N.Y. (4/08/08)--Credit unions compare well with other financial institutions, according to a Friday article in the Long Island Business News. A credit union’s main objective is to return value to its members, as opposed to for-profit companies that seek to primarily create value and income for shareholders, Kirk Kordelseski, CEO of Bethpage, (N.Y.) FCU, told the newspaper. Credit unions also offer business loans and other financial services to businesses, the article said. Many of Bethpage FCU’s business clients are members who started small businesses, such as plumbing or landscaping business, Kordeleski said. Bethpage FCU’s business loans are usually less than $100,000, he added. Credit unions offer a variety of services to employees of all sizes of businesses, Kordeleski said. Employees who start out using credit unions for checking accounts and auto loans often expand their relationship with credit unions to include mortgages, home equity loans and retirement plans, he added.

CU System briefs (04/07/2008)

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* SACRAMENTO, Calif. (4/8/08)--The new commissioner of California's Department of Financial Institutions (DFI) took office Monday, according to DFI. William Haraf, Ph.D., was named commissioner last month by Gov. Arnold Schwarzenegger. Since 2005, Haraf has been an independent consultant with the Promontory Financial Group and served as visiting professor of economics and finance at the Graduate School of Management, the University of California, Davis. He also served in positions at Banc of America Securities, Bank of America, Citicorp, and the American Enterprise Institute for Public Policy Research. Haraf was special assistant to the chairman of President Ronald Reagan's Council of Economic Advisors and senior staff economist to the council (Imperial Valley News March 10). One of his priorities: to appoint a deputy commissioner of credit unions … * NORTHVILLE TOWNSHIP, Mich. (4/8/08)--Michigan Credit Union League President/CEO David Adams speaks during a media tour last week with Gov. Jennifer Granholm (right), who signed into law a "Save the Dream" package of bills to help homeowners in danger of losing their homes. The tour made stops in Grand Rapids, Jackson and Detroit (Michigan Monitor April 7 and News Now April 2). Credit unions and other financial institutions will be able to provide mortgage refinancing products to homeowners struggling with payments under a program with the Michigan State Housing and Development Authority. (Photo provided by the Michigan Credit Union League) … * SALT LAKE CITY (4/8/08)--Salt Lake CU members will vote Wednesday on whether to merge the 67-year-old $256.1 million asset credit union with $2.301 billion asset Mountain America CU (The Salt Lake Tribune April 5). The voluntary merger is being proposed because it is increasingly harder to meet members demands for additional branches, services and ATMs, said the credit union. Salt Lake has 10 branches and Mountain America has more than 50 branches … * SAN LEANDRO, Calif.(4/8/08)--Arrow CU, a $2.7 million asset credit union that for years served employees of Oakland's Mother's Cookies before the bakery shut down in 2006, plans to merger into Spectrum FCU, a $136.1 million asset credit union based in San Francisco. The closure of the bakery hurt the smaller credit union, which has 482 members. Before the bakery closed, it had $5 million in assets and 738 members (East Bay Business Times April 4). Arrow CU filed a merger application with the California Department of Financial Institutions on March 14. A merger would need approval from both DFI and the National Credit Union Administration. After regulators approve the proposal, Arrow will take the measure to members for a vote … * HARRISBURG, Pa. (4/8/08)--Kim Neifert, former items processing manager of Mid-Atlantic Corporate FCU, Middletown, Pa., died Thursday at the age of 42. Neifert had worked at Mid-Atlantic for 15 years and was one of Mid-Atlantic's first employees in its share draft processing operation. She left her position in January 2006 after being diagnosed with cancer, according to the Pennsylvania Credit Union Association (Life is a Highway April 7) ...

Parent-teen power struggle over money in school branch

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SACRAMENTO (4/8/08)--SAFE CU, Sacramento, has never received any complaints about its in-school credit union branches. In fact, its program is lauded by the city and state. But the mother of one young SAFE CU member isn’t happy--because the credit union opened an account for her that her mother doesn’t have access to. The mother contacted local media with a list of questions regarding her concerns about the credit union’s school program. “It’s very unusual,” Paul Hersek, SAFE CU vice president of marketing, told News Now. “It’s not the norm. We’ve never had something like this happen.” The young woman, a minor, opened an account at a SAFE in-school branch to save money she earned at an after-school job. The member is “really responsible,” and declined an ATM card so she wouldn’t overspend, Hersek added. The member has a joint account with her mother, but wanted her own savings account. “The daughter wants to be independent,” Hersek said. SAFE CU contacted the mother about her concerns, but she had bypassed the credit union and spoken to the media, Hersek said. Credit unions can open accounts for minors, according to the California Department of Financial Institutions. The code reads: “A credit union may issue shares or certificates for funds to a minor of any age or maintain any other account authorized for credit union members for a minor, and receive payments thereon by or for the minor. “The minor is entitled to withdraw, transfer, or pledge any shares or certificates or other moneys owned by him or her and to receive from the credit union all dividends, interest, or other money due thereon in the same manner and subject to the same conditions as an adult.” “We’re not doing anything wrong,” Hersek said, adding the state, governor and Sacramento region have applauded SAFE’s program. “I don’t see us changing anything.” SAFE started its in-school branch program in 2003. “We’ve had great results,” Hersek said. Students who have a B average or above can work in the branches and also can compete for internships at the credit union’s corporate office. They learn marketing and accounting, and the credit union provides money to the school district for financial literacy programs. The credit union doesn’t aim to make a profit off of its school programs--rather, it seeks to improve its exposure among teachers, parents and students. Six student employees also have taken jobs at the credit union after graduation. “It’s a really rewarding program,” Hersek said. Though the mother’s complaint was a first for SAFE CU, credit unions should listen to parents’ concerns in these situations, Hersek advised. He also advised credit unions to look at the products and services offered to youth and ensure they are applicable. SAFE has customized some products and services to suit youth. For instance, students can open accounts labeled by what they are saving for, such as prom or a yearbook, and deposit money in each. SAFE also waives maintenance fees until members are 21 years old. “It’s those types of things,” he said. “Does the program make sense for those individuals?” Financial institutions can offer financial direction for youth, he added. Though it’s up to the parent to talk to children about financial education, a lot of children don’t get financial training at home. The credit union takes advantage of “any opportunity” it can to reach out and help students, Hersek said.

MCUA DesjardinsMaxwellHerring awards announced

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JEFFERSON CITY, MO. (4/8/08)--The Missouri Credit Union Association (MCUA) recognized the 2007 Missouri Dora Maxwell, Louise Herring and Desjardins Award winners at its Annual Advocacy and 79th annual Business Meeting April 1. The 2007 Desjardins Youth Financial Education Award winners are: First Place:
* $35 million-$75 million assets: Raytown-Lee’s Summit Community CU; * $75 million-$250 million assets: Arsenal CU, Arnold; and * More than $250 million assets: Vantage CU, Bridgeton.
Second Place:
Mazuma CU, Kansas City, took home three awards in the 2007 Missouri Credit Union award competition. Pictured are (from left): Mazuma’s Jose Diaz, supervisory committee member; David Kudrin, board member; Andrea Kellgren, branch manager; and John Walls, board chair; Rosie Holub, Missouri Credit Union Association president/CEO; and Mazuma’s Cynthia Little, branch manager, and Gerald Rosenblum, board treasurer. (Photo provided by the Missouri Credit Union Association)
* $75 million-$250 million: Alliance CU, Fenton; and * More than $250 million: Mazuma CU, Kansas City.
The 2007 Dora Maxwell Social Responsibility Recognition Award winners are: First Place:
* Chapter: Springfield Chapter of Credit Unions; * $5 million-$20 million assets: Joplin Metro CU; * $20 million-$50 million assets: Raytown-Lee’s Summit Community CU; * $100 milion-$200 million: Neighbors CU, St. Louis; * $200-$500 million: Mazuma CU; and * More than $500 million: American Eagle CU, St. Louis.
Second Place:
* Chapter: St. Louis Chapter of Credit Unions; * $100 million-$200million assets: Mid Missouri CU, Ft. Leonard Wood; and * More than $500 million assets: American Eagle CU.
Honorable Mention: $100 milion-$200 million assets: 1st Financial FCU, St. Charles. 2007 Louise Herring Philosophy in Action Award winners are: First Place:
* Less than $50 million: Raytown-Lee’s Summit Community CU; and * More than $250 million: Mazuma CU.