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Three CU Centrals finalizing merger in Canada

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WINNIPEG (4/12/10)--Credit union centrals from three Canadian prairie provinces--Manitoba, Saskatchewan and Alberta--will vote later this year on finalizing a merger into a single prairie central, according to Winnipeg Free Press (April 9). The move is the result of the trend in financial cooperatives toward consolidation. With fewer, but larger credit unions, the three centrals are finding it more difficult to perform their roles and meet the needs of small, medium and large credit unions together, said Garth Manness, CEO of Credit Union Central of Manitoba, in the article. A combination of the three would result in an entity with 1.7 million members, $46.8 billion assets, 155 credit unions and 709 branches, said the publication. For more information, use the link.

Texas CU Department reports hike in complaints

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AUSTIN, Texas (4/12/10)--The Texas Credit Union Department says that it saw a spike in written complaints about state-chartered credit unions in that state during the fiscal year 2009. The department handled 100 written complaints, up 30% from 77 the year before, according to the department's newsletter (March 31). The report did not say whether the complaints generated were actionable or whether consumers had misunderstood the credit unions' procedures and generally accepted practices. Although credit unions are consistently noted throughout the country for their low fees and better interest rates than banks, there is still some trickle down from the overall dissatisfaction with financial institutions in general during the financial crisis and economic recession. The nation's financial crisis and economic recession, coupled with the bombardment of consumers throughout much of 2009 with negative messages about financial institutions' fees, overdrafts, disclosures, and credit card practices, have set the stage for a more involved, angry consumer. Because of the tightening of credit, housing woes and job layoffs, many consumers spent 2009 on high alert, worried about finances and complaining more. In Texas, overdraft fees were the most common complaint, said the state regulator. Those complaints said the fees were too high, made too frequently and unfairly, and were charged when members had funds in their accounts. Some questioned the timing of deposits and withdrawals and whether that generated fees, according to the department. Another common complaint centered on the placement of collateral protection insurance, said the regulator. Members complained that insurance was added to the loan unjustifiably and that refunds were not calculated fairly. Others complained about customer service or the failure to grant or refinance a loan. Other complaints were about the use of cross-collateralization clauses. Some did not understand the effect of interest accrual when they used skip pay or made late payments. And one member questioned the rate increase on a credit card. Still, the number of complaints about credit unions is small. The department oversees 207 credit unions with state charters. It was not clear from the report whether the complaints were about a few credit unions or many.

N.Y. CUs to Assembly Support muni-deposit choice

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ALBANY, N.Y. (4/12/10)--The Credit Union Association of New York (CUANY), New York credit unions and a coalition of local government groups will be at the State Capitol for the next three days, calling on State Legislature to pass municipal deposit reform. Municipal deposit reform would allow local government entities such as towns, counties, school districts, fire districts and public libraries the option of depositing tax dollars in local credit unions or community savings banks. Currently, corporate banks have a monopoly on municipal tax deposits. The three-day government affairs advocacy conference, which begins today, will include legislative briefings, a press conference on Tuesday and visits to state legislators. "We are asking the State Assembly to join the Governor and State Senate in supporting municipal deposit choice," said William J. Mellin, president/CEO of CUANY. Calling the reform "much needed," Mellin said it would "help local governments save revenue, encourage more funds to stay local through community reinvestment, and create more opportunities for local residents to take out personal or small business loans." Mellin continued, "We're hoping that Speaker (Sheldon) Silver (D-64) and the Assembly--all of whom represent local governments, districts with credit unions, and thousands of credit union members--will do the right thing and support municipal deposit choice in the final budget. In short, municipal deposit puts more public dollars back on Main Street." Most states, including Connecticut and New Jersey, allow municipal deposit choice. Credit unions have the potential to help state and local officials in a way that doesn't cost state or local taxpayers anything, said CUANY.

Texas league board make-up to change

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FARMERS BRANCH, Texas (4/12/10)--The Texas Credit Union League’s (TCUL) board of directors in 2012 will undergo significant changes in its make-up, the league said. At Friday’s business meeting, the voting delegates approved restated bylaws effective in 2012; and an amendment to provide for the transition in electing asset category directors for a one-year term in 2011, effective immediately (LoneStar Leaguer April 8). The recently approved board composition consists of four directors in the asset category of $250 million-plus; four directors in the asset category of $50 million to $250 million, and four directors in the less than $50 million asset category. The current board composition consists of 10 directors in the asset categories of $100 million to $250 million and $250 million-plus; five directors in the asset category of $50 million to $100 million; three directors in the asset category of $20 million to $50 million; two directors in the asset category of $10 million to $20 million; and one director in the up to $10 million asset category. Prior to voting, Randy Smith, president/CEO of Randolph-Brooks FCU, Universal City, and chair of the league’s Corporate Governance Task Force, indicated the task force determined:
* The league board structure could be reduced; * Current technology enhances communications among credit unions; * Asset categories are the best way for credit unions to be represented on the board; * Geographic representation should be built into the structure; there is value in credit unions being represented like credit unions with some geographic relationship, and * With a smaller board, expenses could be reduced from league dues by as much as $50,000 a year.

Top topic at Vt. legislator event credit card bill

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MONTPELIER, Vt. (4/12/10)--A delegation of Vermont credit union leaders from across the state met Thursday with Gov. Jim Douglas, Speaker of the House Shap Smith, and House Commerce Committee Vice-Chairman Michael Marcotte before the credit unions' annual Legislator Appreciation Reception. The No. 1 topic: S. 138, a credit card bill that passed from the Senate to the House last week.
Vermont Gov. Jim Douglas talks with Karen Thomas-Cedergren, vice president of branch administration, River Valley CU, Brattleboror, Vt., at Thursday's Legislator Appreciation Reception.
The bill will be sent to the House Commerce Committee, the Association of Vermont Credit Unions (AVCU) learned, and will fall under the supervision of Rep. Marcotte (R-2), said AVCU's Newslines Express (April 9). Marcotte owns a convenience store in Newport and as a store owner like Sen. Richard Mazza, who expressed serious concern over the Senate legislation, Marcotte understands the complexity of the electronic payments system, said AVCU. He told credit union leaders that when the legislation reaches the committee, he would ensure it receives extensive input from all concerned parties and studies thoroughly the possible consequences before a vote is taken on the measure.
Dozens of Vermont state representatives and senators attended Thursday's Legislator Appreciation Reception hosted by the Association of Vermont Credit Unions.and the state's credit unions. (Photos provided by the Association of Vermont Credit Unions)
Speaker of the House Smith spoke about many challenges facing the House during the rest of the legislative session, which tentatively is set to end in early May. Among other topics of discussion, Smith said he is aware of the controversial issues around S. 138 and confirmed that it would be sent to Commerce. During a 15-minue meeting with Gov. Douglas in his ceremonial office, Douglas gave a brief legislative affairs status report. At one point, he semi-seriously told the group he hoped some of them would seek election to the legislature so the state government could benefit from their leadership, business experience, and the care and compassion with which they treat their members. He expressed concern that if SB 138 passed, it could separate Vermont from the rest of the country in terms of credit and debit card acceptance. He later stopped at the reception to continue chatting with credit union leaders. S.B. 138 would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards; * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card in the state; and * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
The provisions are detrimental for credit unions, their cardholders and Vermont's economy, Bergeron has said (News Now April 5 and April 2).

BBB includes Better Choice as option to payday lending

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HARRISBURG, Pa. (4/12/10)--The Better Business Bureau of Western Pennsylvania listed Credit Union Better Choice as an option to payday lending, according to the Pennsylvania Credit Union Association (PCUA). The bureau had issued a press release warning consumers about online payday lenders who claim they are not required to follow state or federal laws regarding licensing requirements, debt collection practices or interest rate caps (Life is a Highway April 9). PCUA provided information to the bureau about Credit Union Better Choice, where credit unions have issued more than 28,000 short-term loans totaling more than $13.4 million since 2006. Members saved nearly $10 million dollars by using the program instead of a traditional payday lending product (News Now March 3).

ATM attacks more sophisticated says Javelin

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PLEASANTON, Calif. (4/12/09)--ATM attacks have become more sophisticated--shifting from traditional skimming to use of malware inside ATMs or ATM networks, fraudulent mobile alerts and account takeover from stolen information, according to a new report. Attacks have been reported in which maintenance crews opened up ATMs and installed malware, according to a Javelin Strategy and Research study. ATM manufacturer Diebold issued a security update last year for its ATMs after they were attacked by criminals who installed malware to steal sensitive customer information (Financial Services Information Security News April 6). Individuals can gain access to sensitive information in ATMs via administrative privileges to encrypted personal identification number (PIN) data, then use a computer to reverse the PIN encryption, said Robert Vamosi, analyst at Javelin Strategy and Research. Other attacks have involved sending customers fake message alerts asking for account information. Criminals then use the information to create a cloned card, the publication said. The financial services industry is moving toward Triple Data Encryption Standard for all ATMs that will help prevent such attacks. Other steps financial institutions can take to protect their ATMs include using security software that guards against malware and using encrypted PIN pads in ATMs that are Payment Card Industry Data Security Standard-compliant, Vamosi added. About 10% of fraud victims experienced fraudulent ATM withdrawals, Javelin said. About 23% of those with the fraudulent withdrawals left their primary financial institution.

IKiplingersI Dr. Oz tout CUNA locator website

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MADISON, Wis. (4/12/10)--Two national financial publications last week told consumers to check the Credit Union National Association’s website and credit union locator to find credit unions to join in their area. Kiplinger.com on Thursday also said, “Read our August 2009 article ‘Banks That Put You First’ for a sampling of the special deals and better terms that consumers are discovering as they switch to local banks and credit unions.” Doctoroz.com told readers in an article titled “Financial Health Plan”: “Community banks and credit unions offer up to 20% lower rates and may allow you to transfer your balance for no extra fee. Visit cuna.org to locate the credit union in your area. To read the articles, use the links.

Mississippi becomes sixth Young and Free region

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JACKSON, Miss. and CHILLIWACK, B.C. (4/12/10)--The Mississippi Credit Union Association (MSCUA) and Currency Marketing are partnering to offer the Young & Free program in Mississippi, which will pick a young spokesperson for the state’s credit unions. Mississippi, with 21 credit unions participating, joins Alberta, Canada; Texas; South Carolina; Alabama; and Tennessee to become the sixth Young & Free region in North America. Young & Free helps credit unions reach young adults through social media. The goal of Young & Free Mississippi is to help credit unions connect with young adults and help the association understand how it can serve the under-25 Mississippi crowd, said Charles Elliott, MSCUA CEO. Young & Free provides an individual aged 18 to 25 with an opportunity to become a spokesperson for Mississippi credit unions. The program aims to educate young adults about money. The individual will receive a full-time contract with an annual salary, a laptop computer, an iPhone and a video camera. The job includes traveling, attending and speaking at events throughout the state, and posting daily blog entries and weekly video blogs on the Young & Free Mississippi website. “We launched Young & Free Mississippi because we felt strongly that young people were not being well-served by large faceless financial institutions,” said the Young & Free Mississippi website. “Young people in Mississippi didn’t have a voice when it came to getting what they needed financially.” Mississippi credit unions encourage youth to visit the website, add comments to the blog, submit events to the calendar and ask questions. Every interaction on the site earns visitors entries into monthly prize drawings. Participating credit unions also will offer the Free2B Account, a line of free products and services for members age 18 to 25. The account offers free checking, debit and direct deposit. Interested 18 to 25-year-olds can submit a 60-second YouTube video, write a blog post and complete an application at YoungFreeMississippi.com by May 10. Applicants will be narrowed to three finalists, and site visitors will vote for the finalist starting May 14.

Prospera CU restructures closes branch

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APPLETON, Wis. (4/12/10)--Prospera CU, Appleton, Wis., is closing one of its branches and two of its GoodMoney payday lending loan alternative sites as a part of a restructuring plan. The credit union said Thursday it would close its Grand Chute branch June 5. Two GoodMoney sites inside of Goodwill stores in Green Bay, Wis., will close June 4. Six positions will be eliminated (Appleton Post-Crescent April 8). The closures are not a result of economics, Sheila Schinke, interim CEO for Prospera, told the newspaper. Trends within the industry show a preference toward automated and electronic branch services, the credit union said. About 50% of Prospera’s Grand Chute members used online account access and 36% used direct deposit. The credit union will continue to maintain locations in Appleton, Neenah and Menasha. Prospera also will continue to offer its GoodMoney services at its remaining locations. GoodMoney services launched in 2006.

Missouri CUs raise walls for wounded vets home

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COLUMBIA, Mo. (4/12/10)--Missouri credit unions built a specially adapted home in Columbia, Mo., for wounded Staff Sgt. (SSG) Robert Canine and his family during a three-day building blitz this past weekend as part of The Homes for Our Troops (HFOT) program. The HFOT Build Brigade brought volunteers together to build the home from a concrete foundation to a weather-tight structure in three days, said the Missouri Credit Union Association (MCUA) (The Missouri difference April 9). The Friday-through-Sunday Build Brigade began with a procession through Columbia
Staff Sgt. Robert Canine and his wife, Jennifer, and their son, Sebastian, look forward to life in Columbia, Mo., in their new home built by Missouri's credit unions and Homes For Our Troops this past weekend.
Missouri credit unions helped bring this concrete slab on Staff Sgt. Robert Canine's lot to a weather-tight home as part of a project built this past weekend by the Homes For Our Troops and the Missouri Credit Union Association. (Photos provided by the Missouri Credit Union Association)
that included SSG Canine and his family, Patriot Guard Riders, National Guard Humvees, and police escorts. Starting at Lowe’s Home Improvement, which served as a registration site for volunteers in January, the procession ended at the build site. An opening ceremony welcomed volunteers and officially kicked off the project. Special guests included U.S. Rep. Blaine Luetkemeyer (R-Mo.), State Sen. Kurt Schaefer (R-19), State Reps. Chris Kelly (D-24) and Mary Still (D-25), Columbia Mayor Darwin Hindman, and Sarah Barfield, a representative from U.S. Sen. Kit Bond’s (R-Mo.) office. As a surprise for SSG Canine, soldiers from his unit in Fort Riley, Kan., served as Color Guard, and his commander, Lt. Col. John Vermeesch, addressed the crowd. Before the first wall was raised, SSG Canine expressed his appreciation for the home-building effort. “I’m so thankful for what Homes for Our Troops and the Missouri Credit Union Association are doing for me,” Canine said. “The MCUA basically made this home happen for me …This is unbelievable. I want to thank everybody for coming out. I am so honored by this whole event.” The Build Brigade follows two years of fundraising by Missouri credit unions. This is the first of two specially adapted homes that Missouri credit unions have committed to build in the state with HFOT. Several state leagues and the Credit Union National Association have teamed up with HFOT for projects in other states.

Wisconsin banks decline CUs increase biz loans

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PEWAUKEE, Wis. (4/12/10)--Wisconsin credit unions experienced a 13% increase in business lending in 2009 while Wisconsin banks’ saw a 15% decrease over that same period. However, while the void for affordable business credit has shifted greater responsibility to credit unions to make the kind of loans the state needs to stimulate the economy and preserve jobs, credit unions can’t do more because of an arbitrary federal cap of 12.25% of total assets on their business lending, said the Wisconsin Credit Union League. The drop in lending by Wisconsin banks aligns with a national trend described by The Wall Street Journal as the largest since 1942. Credit unions have rushed to lend to firms turned down by banks because the requested loan was deemed “too small” and to entrepreneurs whose bank lines of credit were suddenly and inexplicably pulled. But credit unions are hard pressed to do more, the league said in a press release. Some credit unions are bumping up against a federal cap that limits how much they can lend to businesses; others can’t offer business loans at all because the cap prevents them from recovering the costs of doing so. Prior to 1998, when the cap was put in place, credit unions had no statutory limits on their business lending and had been making safe, secure business loans for more than 80 years. Credit unions’ business loan loss rate today is just one-ninth of that seen by Wisconsin banks. Credit unions have acted so responsibly that federal regulators have voiced support for increased credit union business lending, said the league. “If the current cap were lifted, credit unions could offer $362 million of new business credit and add 3,937 jobs in Wisconsin in the first year alone,” said Brett Thompson, league president/CEO. “Nationally, credit unions could offer $10 billion in new credit in the first year, creating 108,500 new jobs. And this can be done without expanding government and at no additional cost to taxpayers.” Bills in the U.S. House and U.S. Senate would raise the cap to 25% of total assets and raise to $250,000 the threshold for a loan to be considered a member business loan. Wisconsin U.S. Reps. Steve Kagen, Tammy Baldwin and Tom Petri are co-sponsors of the House bill. “Banks’ opposition to this effort is an affront to the average person on Main Street who has already paid dearly for the sins of those on Wall Street,” Thompson said. “Considering many credit unions’ business borrowers were denied by banks, it’s incredible that banks will stand in their way of receiving credit from a willing source--all to the detriment of job creation and our state economy as a whole.” Thompson also noted that Wisconsin credit unions’ average business loan is around $170,000 and most credit union business loans are to households with annual incomes below $50,000. “There’s no way banks can continue to distance themselves from the credit crisis when their actions--and the latest data citing banks’ failure to lend--prove otherwise,” Thompson added. “Banks aren’t competing with credit unions for the same loans, so they should get out of the way of the credit unions that are willing to help small businesses.”