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CU System

Austin chapter receives CUs for Kids Leadership Award

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RANCHO CUCAMONGA, Calif. (5/1/09)--The Austin Chapter of Credit Unions was awarded the Credit Unions for Kids Leadership Award for outstanding service to the Children's Miracle Network by CO-OP Financial Services during its THINK 09 conference. CO-OP President/CEO Stan Hollen presented the award to chapter President Kelly Atkinson of University FCU. The chapter's credit unions raised nearly $350,000 in 2008 for the Dell Children's Medical Center. The chapter raised $170,000 at an auction party and golf tournament in October, which qualified it for an additional $25,000 from CO-OP's Miracle Match program. In June, Austin credit unions held a raffle and raised another $150,000. CO-OP matched $520,000 in financial support for Credit Unions for Kids last year, said Hollen. In 2008, CO-OP and its member credit unions raised $250,000 with the Miracle Match program. In the program, CO-OP matches up to $1 million in funds raised by credit unions each year. Since 2008, CO-OP and 70 participating credit unions have presented $1.5 million to Children's Miracle Network through the Miracle Match program. This year, more than 110 credit unions are participating in the program. Collectively, credit unions are the third-largest contributor to Children's Miracle Network, raising more than $9 million in 2008.

Sarasota Coastal ends merger talks with MidFlorida

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SARASOTA, Fla., and LAKELAND, Fla. (5/1/09)--Two Florida credit unions--Sarasota Coastal CU of Sarasota and MidFlorida FCU of Lakeland--say they have ended their merger talks. The $235 million asset Sarasota Coastal and the $1.283 billion asset MidFlorida had announced April 8 they were in merger talks. They had expected a regulatory review to be completed by Thursday and had aimed for a merger completion by June 30 (NewsChief.com and Herald Tribune April 29). Under the merger proposal, MidFlorida was to keep its name and Sarasota was to operate as Sarasota Coastal CU. Sarasota President Tom Randle was to become MidFlorida senior vice president of government affairs. MidFlorida did not state a reason in its announcement. Kevin Jones, president/CEO of MidFlorida, told NewsChief.com that he credit union's board had decided to move forward from converting its charter from federal to state to allow it greater flexibility in expanding. Randal told the Herald-Tribune that Sarasota Coastal called off the merger when MidFlorida failed to seat two Sarasota directors on its board.

More info available on disaster pandemic planning

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MADISON, Wis. (5/1/09)--With the cases of swine flu increasing and hurricane season beginning in less than a month, News Now has compiled an updated list of links for credit unions to access information related to disaster recovery and planning and pandemic planning. Overall disaster preparedness:
* Overall Disaster preparedness. This includes pandemic information and a link to the National Credit Union Foundation Disaster Relief Fund.
Pandemic planning:
* CUNA's Disaster Preparedness: Pandemic Information. Includes websites for governmental information, information for individuals and families, prevention posters, business guides, financial services industry advice, pandemic resources and pandemic flu fact sheets. * CUNA Technology Council "Pandemic Planning" white paper provides credit unions with information on social distancing, addressing absenteeism, hygiene matters, connecting with employees, equipping leaders for crisis communication, supporting telecommuting and alternative work arrangements, notifying members about operations and remote options, testing the plan, and links to pandemic Web sites, resources and bibliography. Complimentary to CUNA Council members, non-members pay $50. * CUNA Councils' Disaster/Pandemic Planning White Paper Package. Five white papers contain information on Pandemic Planning; Business Continuity Planning, Trends and Planning; Disaster Preparedness Training; Disaster Communications; and The Lessons of Disaster Recovery. Complimentary to CUNA Council members. Non-members pay $149.
CUNA Strategic Service providers:
* SunGard Systems/CUNA Strategic Service. Business continuity planning software and consulting. * AgilityRecovery Solutions/CUNA Strategic Service. Agility provides business recovery and continuity solutions for credit unions.
Regulatory:
* National Credit Union Administration. *Small Business Administration Disaster Assistance. Provides information on how to go about applying for a disaster loan, available disaster assistance programs, and disaster recovery plans. * RESCU--Relief Effort and Support for Credit Unions. The credit union movement's effort to prepare for and respond to large-scale natural and man-made emergencies and business interruptions.
Credit unions looking for assistance:
* CUAid. Individuals can make donations through this website to benefit credit union employees and members affected by disaster. CUAid is a program with the National Credit Union Foundation. One hundred percent of the donations go to help credit union members and employees in need. * National Credit Union Foundation.
Other links:
* CUNA Mutual Group. CUNA Mutual provides risk alerts and information for policyholders.

Irelands CU movement posts solid 2008 financials

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BELFAST, Ireland (5/1/09)--Ireland credit unions posted solid 2008 financial results, but warned that declining investment values could hurt their performance in 2009. Affiliated credit unions recorded overall growth in assets, loans and membership in 2008, said the Irish League of Credit Unions (ILCU), which represents 508 credit unions in Ireland (The Belfast Telegraph April 16). Member loans rose for the second year in a row---up 6.7%. In Northern Ireland the average loan was up 6.8% from the previous year, while in Ireland the average loan rose 8.7%. Total credit union assets grew 0.2%, meaning the overall loan-to-asset ratio at the end of 2008 was 50.7%, up from 47.8% a year earlier. Member savings remained stable, the ILCU said. However, Kieron Brennan, chief executive of the ILCU, told the newspaper the economic downturn and writedowns in global investment values will have a negative impact on credit union dividends in the year ahead. “In keeping with accounting procedure and best practice, each individual credit union will have to recognize the current value of its investment assets on its annual financial accounts,” Brennan told the paper. “What it will mean in accounting terms is that the trading surplus for a number of credit unions will be reduced for the 2009 financial year ending in September, and there will be a number that will be unable to pay a dividend next year. “This should not be taken as an indication of any serious problems in the movement generally, rather it is an indication of the very rigid prudential structure in which the movement operates,” he added. “The movement remains financially robust despite its exposure in that area, and the Registrar of Credit Unions has confirmed that fact.”

Loans assets spike at Ohio CUs in 08

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COLUMBUS, Ohio (5/1/09)--Ohio’s 412 credit unions continued to lend amidst a national credit crunch and made significant gains in assets last year, according to a 2008 year-end report by the Ohio Credit Union League. In 2008, loan growth increased more than 7.4%, compared with a negative loan growth in 2007 and an increase in growth of nearly 5% in 2006. Assets grew by nearly 7.4% over the same time period, compared with 1.4% in 2007 and 4.9% in 2006. The loan growth posted by Ohio credit unions was nearly 0.75% higher than the national credit union average. Ohio credit union mortgage originations in 2008 rose 29.2% despite a weak housing market, which saw home sales fall 13.1% in the state. While auto sales also continued to slow, outstanding auto loans at Ohio credit unions bucked the trend, posting a 4.8% growth in 2008. “It is apparent that more and more Ohioans have turned to not-for-profit financial institutions for lending as other institutions reduced credit,” said Paul Mercer, president of the league. “Our cooperative approach to financial services allows us to weather economic decline. Credit unions are safe, sound and secure, and our capitalization levels are nearly double the regulatory requirement.” Capital levels at Ohio credit unions remain strong, with the average net worth-to-assets ratio at more than 12.1%--higher than the national average of 10.9%. Credit unions with a ratio at or above 7% are considered well-capitalized. Loan delinquencies rose slightly in 2008 to 1.32%, still below the national average of 1.37% and well below the national bank average of 2.01%. Membership in Ohio credit unions declined -.03%, with the total number of credit union members in Ohio at more than 2.6 million. Year-end data from 2007 and 2006 shows similar membership growth, declining 2.8% and 1.3%, respectively. The stagnant membership growth is attributed to an increase in credit union mergers--19 in Ohio in 2008--and slower population growth. The average credit union in Ohio has more than 6,300 members, nearly $45 million in assets, and more than $28 million in loans. Ohio credit unions employ more than 6,800 Ohioans, who receive more than $138.5 million in annual compensation combined.

Iowa Discovering Untapped Markets meets next week

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DES MOINES, Iowa (5/1/09)--The third annual Discovering Untapped Markets Conference to help Iowa credit unions examine how financial education can be used to reach underserved communities will be held Tuesday and Wednesday in Des Moines. The program features Sharon Lechter, financial education advocate and co-author of the best-seller Rich Dad, Poor Dad, and the Rich Dad series. Lechter will share her views on teaching children and adults to take control of their personal finances. “Many people need accurate information about personal finance, and we are very excited to hear our experts’ insight and knowledge first hand,” said Marybeth Foster, executive director of the Iowa Credit Union Foundation. “The goal is to have our attendees take away some new ideas and tools for their credit union to implement.” Also, a panel of financial experts will discuss “Youth Financial Education and the President’s Advisory Council on Financial Literacy Report” and conduct sessions on how to reach underserved groups such as the disabled and immigrants. Ferzana Hashmi of Hashmi Law Firm in Des Moines and Coopera Consulting will discuss the U.S. naturalization process to help participants better understand the experience that many unbanked Hispanics and other immigrants go through. Coopera Consulting’s presenter “will demonstrate the importance of personal finance and reaching out to untapped and underserved markets in Iowa to help credit unions create loyalty among these audiences,” said Warren Morrow of Coopera Consulting.

Make most of CU advantage Russian CUs told

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SOCHI, Russia (5/1/09)--Russian credit unions suffering the effects of the global economic crisis can learn from problems that plagued financial institutions in the U.S., said a delegation of U.S. credit union executives last week at the Third Russian Credit Union Forum.
Click to view larger image Speaking at the Russian CU League annual general meeting were, from left, Rod Taylor, president/CEO, Barksdale FCU, Bossier City, La.; Anne Cochran, president/CEO of the Louisiana Credit Union League; and Eric Richard, executive vice president and general counsel of the Credit Union National Association. (Photos provided by the World Council of Credit Unions)
The delegation included Anne Cochran, president/CEO of the Louisiana Credit Union League and member of the World Council of Credit Unions' board; Eric Richard, executive vice president and general counsel of the Credit Union National Association (CUNA), and Rod Taylor, president/CEO of Barksdale FCU, Bossier City, La.. The three-day forum was sponsored by the Russian Credit Union League (RCUL) and took place at Sochi, a city on the Black Sea. "This is a tough time for U.S. credit unions, as it is for financial institutions worldwide," said Cochran, "If we in this room have any advantage over our competitors, it is that we represent financial institutions that are member-owned and member-operated." The Louisiana league has partnered with the Russian league in WOCCU's International Partnerships Program since September 2007. In addition to updating attendees about WOCCU, Cochran spoke about good governance and the importance of strong supervisory oversight.
CUNA's Eric Richard described U.S. credit union challenges to 160 credit union leaders attending the Russian Credit Union League annual general meeting.
"U.S. credit unions face a complicated situation," CUNA's Richard told the forum attendees. "We did not contribute to the current crisis, but we are suffering collateral damage from it." He noted that in the U.S., CUNA has been "urging credit unions to take a calm and restrained approach to the situation." Richard also outlined in detail the struggle U.S. credit unions currently face and drew parallels between the U.S. and Russian situations. Taylor addressed the importance of capital and the value of member ownership. Other session topics included: developing a cooperative network, managing diversity, and accounting and taxation issues facing cooperative systems. The three delegates expressed cautious optimism about the strength and stability of credit unions, noting signs that an economic turnaround may be forthcoming. "Patience and wisdom are the orders of the day," Richard said. "We are just beginning to see some small signs of possible recovery in the economy. Our goal is to hang on as the environment improves." Cochran agreed. "It is my hope that through our combined strength, credit unions will continue serving members well no matter what economic issues come to bear on the global credit union movement." More than 160 credit union leaders from Russia and several neighboring countries attended the forum, which covered subjects such as external regulation and self-regulation, legislation, accounting, taxation and governance in crisis situations. Before the forum, Cochran met with Vadim Kalinichev, RCUL CEO, to help the league develop strategies to face new challenges. RCUL, a member organization of WOCCU, offers services such as loan and savings insurance, and regional credit union association development. It has 160 credit union members and eight credit union association members that collectively serve more than 268,000 members.

Americas CU Conference adds pressing-issues sessions

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MADISON, Wis. (5/1/09)--With so many fast-changing legislative, regulatory and economic issues now on credit unions' front burners, the Credit Union National Association (CUNA) has added a new slate of sessions to the already packed America's Credit Union Conference and Expo, scheduled for June 21-24 in Boston. "This is one of the most difficult years most professionals will ever have to face in a lifetime of credit union involvement," said Dan Mica, CUNA president/CEO. "The issues seem to change almost daily, and the information needed to be proactive is in a constant state of change, which is why we felt it was important to add these sessions to help prepare credit unions for the balance of this year and next," he added. New breakout sessions will include:
* Critical issues update with CUNA President/CEO Dan Mica; * Legislative/regulatory update--covers key credit union policy issues including spreading out credit unions' costs associated with the corporate credit union network, bankruptcy, regulatory restructuring, and interchange fee income; * TARP 101--analyzes the Treasury Department's Troubled Asset Relief Program for banks and its impact on credit unions; * Net worth restoration plan primer--explores the issues behind developing a restoration plan and what it means in terms of restoring net worth; * Facing up to problems in the Credit Union System--examines the future of corporate credit unions, the National Credit Union Administration's approach to assisting them, and the effect on credit unions; * "How to" on the Obama mortgage modification plan; and * New examination issues.
For more information or to register for the America's Credit Union Conference and Expo, use the resource link.

Oregon association reports CUs soundness at Rogue FCU

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MEDFORD, Ore. (4/30/09)--Oregon's credit unions have seen growing deposits and membership as a result of the nation's best-known banks running aground financially last year. During Rogue FCU's 52nd Annual Meeting April 21 in Medford, Credit Union Association of Oregon CEO Troy Stang noted that Oregon's credit unions during 2008 experienced 2% growth statewide, most of it in the last two quarters, according to a press release from the credit union. Rogue FCU also benefited from the flight from banks. "As members moved more and more of their funds to a safe, local alternative, we saw deposits grow 5.44% or by almost $19 million in 2008," Rogue Federal President/CEO Gene Pelham reported. Pelham assured members that the credit union is well-positioned for the economic difficulties faced in the community. It has more than $38 million in reserves and a net worth ratio of 9.36%, Pelham said. Rogue Federal has more than $439 million in assets and $339 million in its loan portfolio.

Georgia affiliates CUs had 12000 more loans in 08

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COLUMBUS, Ga. (4/30/09)--Consumers don't have to wait until banks ease credit to get a loan in Georgia. There are plenty of credit unions who can meet their needs, says an article in the Columbus Ledger-Enquirer (April 29). A report released by the Georgia Credit Union Affiliates Tuesday shows the state's 170 credit unions approved 12,000 more loans in 2008, than in 2007. The number of loans approved rose to 360,000 from 348,000, said the paper. In 2008, the credit unions combined loaned $4 billion, down from $4.1 billion the year before. The average loan amount dipped to $11,029 from $11,874. Eric Jenkins, senior vice president of growth services at the affiliates, told the newspaper that during 2008, credit unions have few mortgage applications and car loans and more personal consumer loans. MEA FCU, Columbus, noted that it saw smaller loans last year, but more of them. Members are reluctant to borrow because of fears about jobs, said CEO Polly Bell. The credit union's capital-reserve level is at 18%. In the state, credit unions' average capital reserve rate stands at 14%, well above the 7% minimum required by regulators.

CUNA Mutual flu alert stresses continuity planning

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MADISON, Wis. (4/30/09)--CUNA Mutual Group sent a RISK Alert Tuesday to its policyholders about the swine flu, emphasizing the importance of business continuity planning and disaster plans. "News of the recent Swine Flu outbreak in Mexico and several U.S. cities raises the issue of our industry's preparedness for a pandemic flu," said the alert. "Distinct from many disaster scenarios, the primary concern during a flu pandemic is not for the loss of equipment, operating infrastructure or facilities, but rather for your employees' health and their ability to support your credit union's operations," it said. "It's important to ask, 'Does our business continuity and disaster plan include a pandemic flu response?'" said the alert. It provided these guidelines:
* Review your business continuity/disaster plan to determine the impact long-term illnesses would have on your operations; update your disaster plan accordingly. *Appoint a pandemic leader and/or team with defined roles and responsibilities. * Identify critical functions and employees essential to required operations by location.
* Cross-train employees from multiple locations with minimal face-to-face contact to be able to fill these critical roles.
* Determine which functions could be performed remotely and enable secure access. * Review personnel policies for sick leave compensation and return-to-work procedures. * Share information from public health officials and health care providers including the signs and symptoms of a specific disease outbreak and recommend prevention and control actions.
* Educate your employees about proper health/hygiene procedures. * Encourage good health habits including eating a balanced diet, exercising daily, and getting sufficient rest.
* Collaborate with authorities and leverage their expertise to understand potential threats; invite them to participate in your planning process.
The guidelines are mean to be a sample of activities needed to properly prepare for a pandemic flu. (Editor's Note: CUNA Strategic Services provider Agility Recovery Solutions is sponsoring a "Pandemic Planning--What Steps Can We Take to Prepare?" webinar today at 3 p.m. ET. For more information, use the Agility/CSS resource link.)

18 CUs deliver fin ed during Money Smart Colorado Week

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DENVER (4/30/09)--Eighteen credit unions in Colorado demonstrated their commitment to financial education and community involvement during Colorado’s Money Smart Week. Beginning with a proclamation signed by Colorado Gov. Bill Ritter, Money Smart Week Colorado was held last week and offered state residents free events and programs aimed at increasing financial education at all age levels. Nearly half (35 of 84) of the educational events offered statewide were planned and hosted by Colorado credit unions. “Coloradoans saw more credit unions participating in the state’s Money Smart Week than any other financial industry group,” said John Dill, president/CEO, Credit Union Association of Colorado. “Supporting this important financial literacy program is one of the many ways Colorado credit unions invest in our local communities.” The week is aimed at building Coloradoans’ financial knowledge, enabling them to confidently and wisely manage their personal finances. The week is sponsored by Jump$tart Colorado, a non-profit financial education coalition, and is supported by credit unions and other financial institutions, businesses, schools, libraries, non-for-profits, government agencies and local media.

Michigan foreclosure expert testifies in state Senate

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LANSING, Mich. (4/30/09)--In his second appearance before the Michigan Senate Banking and Financial Institutions Committee, Robert Manning, Ph.D., from the Rochester Institute of Technology, shared findings in his continuing work on Michigan’s foreclosure crisis and pointed out the opportunity for credit unions as a solution.
Robert Manning, Ph.D., briefed the Michigan Credit Union League's Governmental Affairs Conference Wednesday on his research about the foreclosure crisis in Michigan. He also briefed the Michigan Senate Banking and Financial Institutions Committee on the research, conducted for the Filene Research Institute and commissioned by the Michigan Credit Union Foundation. (Photo provided by the Michigan Credit Union League)
Dr. Manning's presentation Wednesday focused on solutions that work in the shared interests of lenders and borrowers and that would ultimately create new confidence in the mortgage system. “For homeowners, the most important step is to be able to build wealth through increasing the equity in their home,” Manning said. “Vital for all involved parties is rebuilding trust in the homeownership system--specifically that home values are not inflated and the ratings on mortgage-backed securities and other securities are valid. There is an opportunity for credit unions and borrowers to benefit through a shared equity program.” Much of the talk focused on problems that will persist if housing prices continue to operate with a soft floor, meaning that instability in the system will leave both homeowners and mortgage lenders without a sense of the true value of their property. Manning recommends a compromise that redistributes the incentives to keep financial institutions and mortgage holders invested in maintaining the property. He uses a shared-equity approach to spread the risk and incentive between the lender and borrower. Senators, including committee chair Sen. Randy Richarville (R-Monroe), were engaged in the presentation and lent their support to continuing the dialogue between legislators, financial institutions and homeowners. The group agreed that the situation would not solve itself in the short-term, and that the best solutions would involve stabilizing housing prices and giving all parties incentives to avoid foreclosure. Among the points he made are that credit unions are much more likely that other financial institutions to hold mortgages rather than selling them on the secondary market, and that credit unions can be leaders by taking advantage of shared equity, a program that avoids large write-downs that accompany foreclosures and cramdowns and that significantly reduce the principal of a loan. The Filene Research Institute study conducted by Dr. Manning was commissioned by the Michigan Credit Union Foundation. The study is entitled "Keeping People in Their Homes: Policy Recommendations for the Foreclosure Crisis in Michigan."

Corporates Members Health Network ceases operations

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WARRENVILLE, Ill. (4/30/09)--Members Health Network, a stand-alone subsidiary of Members United Corporate FCU, ceased operations as of Monday, the corporate announced on its website. The action has no significant impact on the corporate and does not affect the corporate's ability to serve its member credit unions, the corporate said. Members Health was launched in June 2007 to help credit unions attract Health Savings Accounts to their balance sheets. "Unfortunately, many start-up companies fail to attract enough business during their formative periods," said the corporate. "Oftentimes, market conditions change significantly, causing the best business plans to fail. That was the case for Members Health Network." In February, the corporate said it would not contribute new capital to the subsidiary but would seek credit union ownership to attract member involvement and new capital. However, the subsidiary was unsuccessful in gaining supporters, which the corporate said "is understandable given the costs surrounding the corporate stabilization plan and the uncertainties of a weakened economy." Members Health Network operated as a separate company from the corporate.

Collaboration studied in latest Filene report

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MADISON, Wis. (4/30/09)--Credit unions may be pressed to consider a shift in their operations at a time of turbulence in the financial services industry. The most recent Filene Research Institute report suggests an entirely new model of operation may ultimately emerge. One component of such a shift could be greater collaboration. In “A Road Map for Credit Union Back-Office Collaboration,” Filene examines the potential for a shared back-office utility that would be owned, operated, and governed by several credit unions. Author Michael Taylor, SchellingPoint LLC, developed a road map for large-scale back-office credit union collaboration. Taylor interviewed more than 150 senior executives in small, medium and large credit unions, and consultants, vendors, and credit union trade association executives. His road map has three steps:
* Make the business case: Areas such as compliance, card services, and bulk purchases are prime candidates for collaboration; * Design the collaboration: Consider the various collaborative business model elements, including the right organizational structure and models to scale a collaborative venture; and * Conduct the collaboration: Some interviewees are already engaged in a collaborative credit union venture. The most common issues to arise are partner competency concerns, metrics and measures of success, the fostering and maintaining of partner relationships, and specific technology barriers and enablers.
“This report gives credit unions a tool with which to document the success and failure of existing collaborative ventures through effective case study development,” said Filene Chief Research Officer George Hofheimer. “It also helps them develop business metrics that tie their collaborative efforts to improvement of the member experience and cost savings. And it helps them increase the role of operational excellence. A balance between member service and efficiency needs to be struck, and collaboration may hold the key,” Hofheimer added. He suggested that initial collaborative efforts focus on processes that can be standardized to help multiple credit unions achieve a common, shared goal. The first step of any collaboration, he said, begins with a small step. “This study suggests that large-scale collaboration may be one of the actions necessary to assure long-term survival,” he added. For more information, use the link.

KCUA launches REAL Deal bestows awards

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WICHITA, Kan. (4/30/09)--Kansas credit unions were introduced to the national theme, “Credit Unions are the REAL Deal” at the 74th Annual Meeting and Convention of the Kansas Credit Union Association (KCUA).
Click to view larger image Kansas credit union volunteers assisted Easter Seals Capper Foundation in setting up for its annual fundraising event.
Each participant learned the four pillars of the REAL Deal Outreach Program and the value of expanding their own outreach efforts. REAL Deal was developed by state credit union leagues, the Credit Union National Association and the National Credit Union Foundation (NCUF) to leverage NCUF’s REAL Solutions program. The program works through state credit union leagues to help them offer services that have proved successful for people of modest means and low wealth. “Our founders took seriously the responsibility of not just creating another bank, but an alternative that would deliver a real deal for consumers,” said Marla S. Marsh, KCUA president/CEO. “The simplicity of an organization run not only for the people it serves, but also by the people it serves creates immeasurable value, especially in today’s marketplace. We have an enormous opportunity to show America the true value of credit unions.”
Eric Bruce accepts the Hall of Fame honor on behalf of his father, Dale Bruce, at the Kansas Credit Union Association awards banquet. (Photos provided by the Kansas Credit Union Association)
In the spirit of the REAL Deal, 20 attendees volunteered for KCUA’s designated charity activity, helping prepare for the Easter Seals Capper Foundation annual fundraiser, “An Evening as a Child.” “Without the members of the KCUA, our event truly could not run as seamlessly as it does,” said Julie Smhra, marketing coordinator for the foundation. In addition to volunteering, KCUA gave awards to three credit union activists for their contribution to the credit union movement. Dale Bruce was honored posthumously as an inductee to the Kansas Credit Union Hall of Fame for his lifetime of contributions to the Kansas movement. Bruce helped credit unions understand the Truth and Lending requirements, and he helped create and implement a system of open-end lending that simplified borrowing for many credit union members. William “Mike” Lackey, chairman of the board of directors of CU 1 of Kansas, was awarded the John Michener Volunteer of the Year Award. During the previous year, he supported innovative changes with a new core computer system, the remodeling of CU 1’s main office in Topeka, and new facility updates in each of the credit union’s branches. Roy Doonan, Credit Union of America, Wichita, was presented the Political Involvement Award for his commitment to Kansas credit unions during the 2008 legislative session and election cycle.

EasCorp conducts conference elects board

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BURLINGTON, Mass. (4/30/09)--Eastern Corporate FCU (EasCorp) provided stories of innovation and insights on how today's economic troubles came about, and elected new board officers at its Partnership Conference and 31st Annual Meeting April 7 in Boston. Keynoters sharing perspectives on how to navigate the financial industry's difficult waters were entrepreneur Arkadi Kuhlmann, president/CEO of ING DIRECT; and economist Robert Litan, vice president for research and policy for Kauffman Foundation. Kuhlmann explained how he led ING DIRECT to become the nation's largest online bank, with 20 million customers worldwide. His key? Developing the company to be a "rebel with a cause," he said. "To do well, you have to think of customers and their beliefs. A company with a cause that turns itself into a self-actualizing brand has a spiritual dimension." Dr. Litan, author and co-author of 25 books and more than 200 articles on government policies affecting financial institutions--including the just-released The Great Squeeze-- lent context to the current financial crisis. "The gasoline that fired this enormous recession was excessive leverage. Everybody had borrowed too much--consumers…Wall Street…the banking system…. And now we're in the middle of a forest fire." The way to get out: "The Fed has giant water hoses," he said. During EasCorp's annual meeting, President Jane Melchionda noted that the current uncertain economy provided a unique backdrop for EasCorp's conference. "Market turmoil isn't new to credit unions--we came into our own during the Great Depression. Now, in the midst of modern upheaval, credit unions will continue to fulfill the mission of helping people of average means with their financial needs. This event provides an opportunity to reaffirm and celebrate what makes our partnership work," she said. EasCorp also elected its 2009 board of directors. Re-elected to three-year terms were Leonard Broderick, president/CEO of Tremont CU, Braintree, Mass., and John Young, president/CEO of New Hampshire FCU, Concord. Other board members are:
* Audrey Phinney, president/ CEO, Bridgewater (Mass.) CU; * James Regan, president/CEO, Digital FCU, Marlborough, Mass.; * Joseph Bean, president/CEO, Hingham (Mass.) FCU; * David Sprague, president/CEO, Hanscom FCU, Bedford, Mass.; and * Stewart Steele, Quincy (Mass.) CU.
Nearly 200 guests representing 84 credit unions attended. The conference was held at the John F. Kennedy Presidential Library and Museum.

Ohio league honors three at ZENITH09

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COLUMBUS, Ohio (4/30/09)--Leaders, ideas and cooperative philosophies within the Ohio Credit Union movement were recognized by more than 500 credit union leaders during Ohio’s credit union convention, ZENITH09, last week in Cleveland.
Click to view larger image Claude Clark Political Inspiration Award winner in the individual category Catherine Herring, CEO of Communicating Arts CU, Cincinnati, thanks her board, which considers political advocacy a core responsibility. “Don’t let inexperience prevent you from spending a day at the Statehouse or in Congress,” she said.
Click to view larger image Gary Soukenik, CEO of Seven Seventeen CU, Warren, accepted the Claude Clark Political Inspiration Award in the credit union category. He noted, “numerous legislative issues at both the state and federal levels that impact credit unions’ ability to serve their members. It is clear that we must not only maintain, but step up our efforts to fight for the interests of credit union members throughout Ohio and across the country.”
Click to view larger image Member Development Specialist, Tricia Hale, Ohio University CU, Athens, accepted the Desjardins Youth Financial Education Award on behalf of her credit union. “It is truly rewarding to help the students in our area understand the importance of financial education,” Hale said. (Photos provided by the Ohio Credit Union League)
Catherine Herring, CEO of Communicating Arts CU, Cincinnati, and Gary Soukenik, CEO of Seven Seventeen CU, Warren, received Claude Clark Political Inspiration Awards in the individual and credit union categories, respectively. Ohio University CU, Athens, received the Desjardins Youth Financial Education Award and the Western Buckeye and Cincinnati Chapters each received a Spectacular Chapter Award. Herring was chosen as the 2009 individual recipient for her life-long dedication to credit union advocacy before local, state and federal elected officials. Ohio University CU was recognized for leadership on youth financial literacy. The credit union has worked to inform teachers, school officials, elected officials, the media, and the public about the lack of youth financial education by offering programs like Mad City Money, Bobcat Savings Club, and CU Succeed Teen. After the 75th Ohio Credit Union League annual meeting, the winners of the 2008 Dora Maxwell Social Responsibility and Cutting Edge Marketing Brilliance Awards were announced. They are:
* Kent (Ohio) CU, which helped coordinate a fundraiser called “Hats Off to Hattie,” which raised $4,700 for the Hattie Larlham Foundation, a local non-profit organization for those affected by mental retardation and developmental disabilities; * AurGroup Financial CU, Fairfield, which raised $2,500 for the Butler County Special Olympics by selling Sweets and Hearts (candy and paper hearts) to Fairfield High School students; * Members First CU, Columbus, which created an Owners’ Manual, accentuating the benefits of credit union membership, and differentiating the credit union from for-profit institutions; and * AurGroup Financial CU, which created the Convergence Program, combining classroom presentations with Web-based learning and one-on-one consulting to help the community better understand credit.

Kansas association officers installed rebates dues

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WICHITA, Kan. (4/30/09)--The Kansas Credit Union Association (KCUA) installed four incumbent board members and two new board members, and presented its membership with a 10% dues rebate during its 74th Annual Business Meeting held Friday and Saturday in Topeka, Kan.
U.S. Rep Lynn Jenkins, (R-Kan.), addressed credit unions at the Kansas Credit Union Association annual business meeting held Friday and Saturday. (Photos provided by the Kansas Credit Union Association)
Before the start of the meeting, U.S. Rep. Lynn Jenkins, (R-Kan.) shared insight into the issues before the House Financial Services Committee and expressed her gratitude for the continued support of the credit union movement in Kansas and nationally. In light of the National Credit Union Administration’s recent action to conserve U.S. Central FCU and Western Corporate FCU (WesCorp), the KCUA board of directors presented the membership with a 10% dues rebate to help mitigate the financial impact to Kansas credit unions. “Although Kansas credit unions have seen increases in deposit and loan growth as consumers looked for a trusted financial partner, credit unions now face challenges arising from an economic crisis they did not create,” said K. Erich Schaefer, departing chairman of the KCUA board of directors. “We want to help support each Kansas credit union’s efforts to meet member needs during these trying times.” The following incumbents were re-elected to serve a two-year term on the KCUA board:
* Jim Holt, CEO, Mid American CU, Wichita; * Richard Montgomery, president, Farmway CU, Beloit; * Robert Reeves, board chairman, Kansas State University FCU, Manhattan; and * Jessica Stormann, business development manager, Kansas Super Chief CU, Topeka.
The association also installed two new directors during the annual business meeting:
* John Beverlin, CEO, CU of Johnson County, Lenexa; and * Don Napell, president, Farmers CU, Hays.
The board elected three people to serve on the executive committee:
* Chairman Larry Damm, manager of Cessna Employees CU, Wichita; * Vice-chairman Don Homan, volunteer for Frontier Community CU, Leavenworth; and * Secretary/Treasurer Erich Schaefer, president of Golden Plains CU, Garden City.

Tampa Bay expands mortgage loans in refinance surge

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TAMPA, Fla. (4/29/09)--Tampa Bay FCU says it's expanding its real estate lending/servicing division so it can handle the surge in the refinancing market for mortgages serviced by Fannie Mae. "In the first quarter of 2009, we have seen a surge in new clients taking advantage of refinancing their Fannie Mae mortgages," said Dean Clark, manager of real estate lending/servicing for the credit union, a Fannie Mae-approved loan servicer. If Fannie Mae owns the mortgage, "the homeowner can pretty much go with any new finance options, which gives incredible advantages in the declining real estate market," Clark said. (PRNewswire April 27). In March, the Treasury Department released guidelines and updates for a Homeowner Affordability and Stability Plan, which Fannie Mae was quick to adopt with a Refi Plus program. The Refi Plus program provides easier loan-to-value guidelines so more homeowners can take advantage of current lower interest rates. The advantages of a refinancing with the credit union include having a local lender, local servicer and local decision-maker, said the $278 million asset credit union. The Refi Plus loan also lowers closing costs, provides exemption from intangible state tax, includes no origination, underwriting or processing fees, and no third-party broker fees and comes with competitive interest rates, the credit union added.

Peer-to-peer lender back with service to connect FIs

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NEW YORK (4/29/09)--Peer-to-peer lender Prosper Marketplace Inc. Tuesday relaunched a new service, "Open Market," which will enable financial institutions to resell loans to its investors, including small businesses. By offering loans to investors willing to bid on them, banks, credit unions, auto-finance companies and others gain access to funds they could use to make loans to more people, at a time when capital markets have largely been frozen, said the company (The Wall Street Journal April 28). Prosper shut down most of its peer-to-peer lending operations last October, according to the Journal, after it and similar lenders fell under increased scrutiny from regulators. Peer-to-peer lending still contains risks, said the article. The average lender return since the company was established in 2006 is 2.8%, after defaults. In March 2007, Prosper began providing more information about borrowers' credit and employment histories, and that improved lender returns to 4.8%. Prosper says investors benefit with potentially higher interest rates on loans that have already been vetted by a financial institution, are current, or have at least three months' payments already paid. But unlike traditional securitization markets that package loans into complex bundles and sell them to investors, Open Market will provide details about each loan to investors. Because Prosper's registration process is still ongoing with the Securities and Exchange Commission, it is operating under an intra-state exemption from the California Department of Corporations. That means only California residents and businesses can lend or invest in Prosper's loans, although it accepts loan applications from borrowers across the country. After the SEC registration is complete, however, financial institutions and lenders in other states will be able to use Open Market.

CU real-estate loans to grow 12.1 CUNA tells Dow Jones

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WASHINGTON (4/29/09)—Don't rule out credit unions for mortgage loans, Mike Schenk told Dow Jones Tuesday. Schenk is senior economist for the Credit Union National Association (CUNA). At a time when the economy is struggling and mortgage credit from some sources is all but dried up, Schenk noted that credit unions are expecting to increase their overall lending by 6% in 2009, compared to the previous year. He noted that real-estate lending by credit unions is expected to grow 12.1% compared to 2008, according to CUNA projections. Schenk explained that credit unions largely didn't make the kinds of risky subprime loans that have rocked the nation’s economy. And since they engaged in prudent lending practice, Schenk said credit unions are in a better position to lend. Schenk advised consumers to choose a mortgage wisely and to factor in all costs when comparing mortgages. He added the warning: If something seems too good to be true, it probably is. The CUNA economist made his remarks in an article spotlighting that it is becoming harder and more expensive for consumers to get mortgage loans.

Illinois league kicks off legislative day today

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NAPERVILLE, Ill. (4/29/09)--Nearly 160 credit union activists are expected today at the Illinois Credit Union League's (ICUL) annual legislative day and reception in Springfield. At the event, National Credit Union Administration (NCUA) Chairman Michael Fryzel will discuss "Current Issues With NCUA," said the league. Other highlights:
* Robert Meza, director of the state Department of Financial and Professional Regulation Credit Union Division, will provide an update on Illinois' state-chartered credit unions; * Legislative leaders from the Senate and House Financial Institutions committees will discuss issues pending before the committees; and * ICUL staffers Steve Olson, executive vice president, general counsel, and Keith Sias, director of state governmental affairs, will brief participants on current issues critical to credit unions;
Participants also will visit lawmakers at the State Capitol and expect to meet more than 40 lawmakers at a legislative reception. The Illinois General Assembly is scheduled to adjourn its spring legislative session on May 31.

Voting ends Friday on ICU MagazinesI CU Hero

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MADISON, Wis. (4/29/09)--Voting for Credit Union Magazine's 2009 Credit Union Hero of the Year will end Friday. Credit union leaders have nominated four credit union heroes:
* Carla Hedrick, CEO, Denver Community FCU; * John Herrera, senior vice president of Latino/Hispanic affairs, Self-Help FCU, Durham, N.C.; * Regina McIlrath, president, Table Rock FCU, Shell Knob, Mo.; and * Cathie Tierney, CEO, Community First CU, Appleton, Wis.
To read about the nominees and vote, use the resource link. The winner will be posted on creditunionmagazine.com by June 15 and will be honored at the Credit Union National Association's 2009 America's Credit Union Conference & Expo June 21-24 in Boston.

Schenk Flu has potential to affect economy

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MADISON, Wis. (4/29/09)--The global swine flu outbreak has the potential to impact the economy, according to an economist with the Credit Union National Association. Analysts interviewed in Investor's Business Daily predicted a modest economic impact overall from the virus. Some sectors will be more affected than others. The virus "has the potential to have a significant effect on economic activity," as it hits the airline and tourism industries, said Mike Schenk, senior economist and vice president of economics and statistics at CUNA. The virus could also hurt consumer and investor confidence, he told the publication (April 28). The article pointed out the unfortunate timing of the flu--arriving just as the economy was leaning toward recovery. Concerns that the flu could delay a rebound were reflected in queasy markets, with the Standard & Poor's 500 dropping 1%, the Nasdaq down 0.9% and the Dow down 0.6% on Monday, the article said. Some sectors--such as the pharmaceutical industry--likely will do well during a pandemic, because demand for drugs to treat the flu symptoms would increase, said the article. According to USA Today, all 50 states will have received antiviral drugs by Sunday. On Tuesday, the Centers for Disease Control recommended that U.S. travelers avoid non-essential travel to Mexico, which has been hardest hit by the swine flu. The global airline industry--before the flu hit--was expected to lose $4.7 billion this year. Meanwhile, Tuesday afternoon the World Health Organization (WHO) said that almost all cases of the swine flu outside of Mexico were among people who had recently traveled to Mexico. It upgraded its alert level to phase four, consistent with a sustained human-to-human transmission. A level five would signify a pandemic (ComputerWorld April 27). Gartner Inc. analyst Rick DeLotto told ComputerWorld that WHO's phase-level increase won't affect businesses but could affect decisions to close schools and elderly health care. DeLotto is advising companies to check their telecommuting capabilities and to make sure assistant managers can take over if needed. Pandemic planners warned in the past that high demand from people accessing the Internet at home could lead to online usage restrictions. The U.S. Centers for Disease Control reported Tuesday that the number of confirmed cases in the U.S. jumped to 64 cases in five states Tuesday. New York City has 45 cases; California has 10; Texas, 6; Kansas, 2; and Ohio, 1. The case rate has increased about 20 a day since Sunday. Monday night the cases totaled 48 and Sunday night cases totaled 20. Other cases are reported but have not been confirmed with the centers, said USA Today and The New York Times (April 28).

CUNA offering webinar ItodayI on swine flu

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MADISON, Wis. (4/29/09)--"Swine Influenza Outbreak: What Your Organization Needs to Know Right Now" is the topic of a webinar today from The Credit Union National Association (CUNA). The webinar airs today at 4-5:30 p.m. ET; 3-4:30 p.m. CT; 2-3:30 p.m. MT; 1-2:30 p.m. PT; and 8-9:30 p.m. GMT. Presenters include Michael T. Osterholm, director of the Center for Infectious Disease Research & Policy (CIDRAP) and director of the Minnesota Center of Excellence for Influenza Research and Surveillance within CIDRAP, and Dr. Myles Druckman, vice president, medical services, Americas Region, International SOS Assistance Inc., Santa Monica, Calif. Osterholm and Drucker will answer these questions:
* How concerned should you be? * Can this virus cause a pandemic? * How are national and international leaders responding? * Will we continue to see new cases? * Should you lower your concern level because the new virus is causing mild illness among the cases in the U.S.? * What do likely public health measures such as isolation and quarantine, border closings, and interruptions in travel and trade mean for your business? * What should you do right now? * What if you don't have a plan?
Participants can ask questions during an extended live question and answer period. The webinar is geared to professionals with responsibilities for pandemic influenza and business continuity planning, communications, risk assessment and mitigation, strategic and crisis planning, corporate governance, operations, human resources, supply chains, legal issues, security, employee safety and travel management, and public-private sector partnerships. For more information, use the link.

CU System briefs (04/28/2009)

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* SAN FRANCISCO (4/29/09)--Ken Burns has been named CEO of San Francisco-based Patelco CU, the $4.1 billion asset credit union announced Monday. His appointment will be effective Friday. Burns succeeds Andy Hunter, who announced in July he intended to retire in mid-2009. Burns is currently serving his 13th year as CEO of the $1.3 billion asset Technology CU, based in San Jose. A former auditor for what is now known as McGladrey and Pullen Accountancy Corp. Burns also has served as chief financial officer at Bay FCU, Santa Cruz, where he was also CEO for six years until 1995. Hunter joined Patelco in 1990 to work under a progressive CEO, the late Ed Callahan. When Callahan retired in 2003, Hunter took the helm. Burns and Hunter will work together for a short period to ensure a smooth transition. Burns is a past chapter president of the California Credit Union League … * NORFOLK, Va. (4/29/09)--A former finance manager at a now defunct used-car dealership has been sentenced to 33 months in prison for defrauding a credit union of more than $500,000. Ashley Wynn, 28, of Virginia Beach, was sentenced after pleading guilty to consipiring to commit credit union fraud. Wynn was the finance manager for Car Store, which operated in Virginia Beach. She regularly obtained car loans for applicants from a credit union by preparing false loan applications and documents regarding their income, expenses, employment and living arrangements. According to the U.S. Attorney's Office for the Eastern District of Virginia, 61 car loans totaling more than $1.1 million were obtained through fraud (The Virginian-Pilot April 27) …

Space Coast announces intent to merge EEFCU

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MELBOURNE, Fla. (4/29/09)--Space Coast CU has announced its intent to merge with a credit union that's in conservatorship, Eastern Financial Florida CU (EFFCU). However, regulators aren't confirming or denying any merger application between the two. "We won't confirm or deny any merger application between Eastern Financial Florida CU and any other institution," said John McKechnie, National Credit Union Administration (NCUA) director of public and congressional affairs. "We will say that, like in any conservatorship, merger is an option, along with liquidation or eventual return of control to its members, and that NCUA is considering all options in the matter," McKechnie told News Now Monday. Space Coast told its members in a letter posted on its website that it had "signed an agreement that states the credit union's intention to merge." A letter of intent merely signals to membership and others that the credit union plans to apply for a merger. If the merger application is approved by members and regulators, the $1.6 billion asset Space Coast, headquartered in Melbourne, Fla., would remain as the surviving institution. Space Coast also said it has "entered into an agreement to function as interim management for EFFCU until the time of a merger." According to Space Coast President/CEO Doug Samuels, a merger would provide both credit unions with expanded service area and branches and ATMs along the I-95 corridor and beyond in Florida. EFFCU, headquartered in Miramar, is a $1.6 billion asset credit union with 22 branches and 193,000 members--the 64th largest credit union in the country. NCUA assumed control of the credit union in an effort to shore up its financial stability and protect its assets after the Florida Office of Financial Regulation placed EFFCU in conservatorship on April 24 (News Now April 27). At the time the conservatorship was announced, Credit Union National Association President/CEO Dan Mica noted the federal regulator's decision to step in and take over the daily operation "demonstrates that the regulatory system put in place to protect the members of our nation's credit unions really works." If a merger is approved, the consolidated credit union would have more than 350,000 members and more than $3 billion in assets. It would boast 60 branches and 150 ATM locations in the state. Space Coast said it would appoint Timothy M. Antonition, its executive vice president of retail operations, to act as integration team leader for the merger application and implementation process. News Now called EEFCU to confirm but had not heard back from the credit union at press time.

Federation to host CDFI webinars Wednesday

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NEW YORK (4/28/09)--The National Federation of Community Development Credit Unions will host two free webinars Wednesday for Community Development Financial Institutions (CDFI). At 1 p.m. ET Wednesday, it will host a webinar for CDFI-certified credit unions that want to apply to the CDFI Fund's Fiscal Year (FY) 2009 Supplemental Round. It will address what's new in the supplemental round application process, tools from the federation to facilitate the application process and federation resources to help submit a competitive grant application. At 3 p.m. ET the federation will host a webinar for credit unions that are not yet certified as CDFIs but hope to apply for certification. It will address the value of CDFI certification for credit unions, the process to obtain the designation, and federation resources to assist with certification. Recently the U.S. Treasury Department released details for the CDFI Fund Recovery Act Implementation Plan, which will provide nearly $400 million in capital to CDFIs by year-end 2010. It is the largest pool of funds ever made available to financial institutions serving predominantly underserved communities, said the federation. The fund also has issued a Notice of Funds Availability (NOFA) for the FY2009 Supplemental Funding Rounds of its CDFI Program and Native American CDFI Assistance (NACA) Program,. The program provides an additional $63 million that will be available for financial assistance awards. The FA awards total $55 million for the CDFI Program and $8 million for NACA. The awards are open to any CDFI-certified credit union that did not submit an application under the regular FY2009 round, or those that applied only for a technical assistance award. The federation said that currently, 819 CDFIs exist. Of those, 146 are credit unions. Most are members

Members United Corporate resets financial update webinar

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ALBANY, N.Y. (4/28/09)--Members United Corporate FCU has rescheduled its Financial Update webinar from Wednesday to Monday, May 4, at 11a.m.-noon ET (10a.m.-11 a.m. CT). The change will enable key members of Members United's executive leadership team to attend U.S. Central FCU's Town Hall Meeting, to be conducted Wednesday by U.S. Central's new CEO, James Nance. Some of these individuals are also Financial Update presenters. Part of Monday's Financial Update will include information provided at U.S. Central's meeting, said the corporate. The Financial Update webinar is free and will include:
* A summary of the U.S. Central Town Hall Meeting; * A review of the markets; * An update of financials for Members United; and * A question and answer session.
Credit unions already enrolled for Wednesday's cancelled session are automatically enrolled for the updated Monday session.

CU in Oregon closing four branches in Portland

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PORTLAND, Ore. (4/28/09)--Oregon Community CU, based in Eugene, Ore., will close all four of its branches in Portland during the next month, according to local media. Credit union officials told KMTR.com (April 23) that 26 employees would be affected by the closures. The decision was a business decision--only 15% of members in Portland actually used the branches. Many members do their banking online banking, said the station. Officials emphasized the credit union isn't under financial distress and that the institution is solid. However, the economy has hit Oregon hard with more than 12% unemployment, the nation's second-highest unemployment rate.

St. Louis newspaper CUs tackling payday loans

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ST. LOUIS (4/28/09)--Credit unions in St. Louis are tackling payday lending loans by offering low cost alternatives, according to the St. Louis Post-Dispatch (April 24 and 26). The article features the payday alternatives of two credit unions--St. Louis Community CU and Gateway Metro CU. St. Louis Community CU offers a "Freedom Line of Credit," up to $500 and lasting 90 days, which charges less interest--an annual percentage rate of 25%--than payday loans It places part of the proceeds into a savings account for the member. Gateway Metro offers a "Quick Cash" loan of up to $600 for 31 days. The credit union charges a flat $40 fee and is cheaper for larger amounts. The average payday borrower takes out nine payday loans a year, but the credit unions' programs build up savings so the member eventually will no longer need the payday loan. The loans get the borrowers "off the treadmill," Patrick Adams, president of St. Louis Community CU, told the newspaper. Suzanne Gellman, consumer economics specialist at the University of Missouri Extension Service, told the newspaper that the credit union alternatives are "a significantly better deal."

Risk expert E-fraud advances require new techniques

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WAIKOLA, Hawaii (4/28/09)--Credit unions, their members and third-party providers of electronic funds transfer services need to improve their online security because of advances in online fraud involving personal and financial institutions computer systems, a CUNA Mutual Group risk management expert said Friday. Electronic fraud losses are caused primarily by consumer account compromises through online banking systems and system intrusions at third-party providers of electronic services, Ken Otsuka, risk manager, told attendees at the Hawaii Credit Union League 71st Annual Convention.
Ken Otsuka, risk manager with CUNA Mutual Group, discusses electronic fraud with attendees at the Hawaii Credit Union League 71st Annual Convention Friday. (Photo provided by CUNA Mutual Group)
"Phishing scams have become a mainstream activity for fraudsters," Otsuka said. "Consumers continue to be duped by this e-mail scam and provide their account numbers and online banking passwords." Account compromises occur when members respond to phishing e-mails by clicking on embedded links that take them to bogus Web sites imitating the credit union's site. "The branding is remarkably good, and consumers are fooled" into providing information that would allow fraudsters to open accounts with the victim's information," he said. Other contributing factors to account compromises include:
* Successful social engineering attempts by fraudsters to have consumers' online banking passwords reset, and * Consumers' computers infected with malicious keyloggers, which monitor keystrokes and return the data to the fraudsters. Otsuka urged credit unions to increase controls over requests for password resets and to notify members of the importance of using up-to-date antivirus and anti-malware security programs to protect their computers.
Once a fraudster hacks into a consumer’s account, funds are transferred to accounts at other financial institutions using the bill pay, ACH, or wire transfer service offered through online banking. "It’s important for credit unions, corporate credit unions and third-party providers of electronic funds transfer services to adopt suitable authentication methods to prevent costly unauthorized transactions,” he added. The common multifactor authentication method that involves a computer’s Internet Protocol (IP) address and challenge questions is no longer reliable due to the risk of malicious software infecting the computer or an entire system, Otsuka said. For example, if the keylogger resided on the member’s computer at the time the member enrolled for online banking, it would return the member’s username, password, and answers to the challenge questions. Otsuka advised credit unions to take these steps to help reduce electronic fraud:
* Take advantage of the authentication method third-party providers of electronic funds transfer services offer; * Restrict IP addresses of credit union users with third-party vendors; *Adopt multifactor authentication, such as tokens; * Implement monetary transaction limits for third-party ACH credit files and wires; * Implement monetary transaction limits for online payment services; and * Avoid resetting member online banking passwords based on telephone requests from members.
Members also play an important role in reducing fraud. Otsuka recommended credit unions pass along these tips to members:
* Install up-to-date software on home computers to prevent infection from viruses, spyware and malware. * Use strong passwords with a minimum of seven characters, alphanumeric, and include special symbols (such as, !,@,#,$,%,<, .="" *="" never="" use="" computers="" accessible="" to="" the="" public,="" such="" as="" in="" libraries="" and="" hotels,="" to="" access="" accounts.="" *="" be="" careful="" when="" using="" a="" wireless="" network="" –="" make="" sure="" it’s="" secure="" before="" accessing="" accounts="" online.="">
Additional loss mitigation and prevention information, guidelines and RISK Alerts are available to CUNA Mutual policyholders in the company’s Protection Resource Center.

Leagues CUs prepare for the flu

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MADISON, Wis. (4/28/09)--Recent reports of an outbreak of a new swine flu strain have some state credit union leagues reviewing their pandemic planning operations. There were 40 confirmed cases in five states--including 28 in New York by Monday evening, sparking such actions as school closings in some areas. Outbreaks have been reported in California, Kansas, New York, Ohio and Texas (USA TODAY April 27). “We haven’t had a lot of communication with leagues yet, but we’re sending out a compliance alert tonight,” Valerie Edgington, compliance manager with the Ohio Credit Union League, told News Now Monday. “The alert will be sent to member credit unions, compliance staff and credit union CEOs. “At a league meeting last week, I had mentioned there were three flu pandemics during the last century, and asked for a show of hands if anyone had [response] plans ready, and there were very few hands raised,” she added. The alert sent out Monday night dealt with pandemic planning and resources, Edgington said. It links to various resources such as a business planning checklist, the Credit Union National Association’s (CUNA) Disaster Preparedness page on pandemic information, and U.S. Homeland Security and National Credit Union Administration (NCUA) information on pandemic planning, she added. The Kansas Credit Union Association (KCUA) also is taking steps to prepare credit unions. “We have issued a compliance alert to our credit unions today,” Kim Wheelock, senior vice president of KCUA, told News Now. “We reminded credit unions about the pandemic planning--some of the previous letters--provided by NCUA. We also told credit unions about information from the Kansas Department of Health and Environment and the U.S. Office of Health and Environment.” The Texas Credit Union League (TCUL) has updated it website with information about the swine flu emergency, and provided several links to pandemic- and disaster-related resources, Linda Webb-Manon, director of public relations for the league, told News Now. TCUL also will publish an article in its daily league publication today to let credit unions know there is information available to them, she added. The California Credit Union League (CCUL) has nothing to report yet, Matt Buck, CCUL communications specialist, told News Now. “It’s too early yet,” he said. CUNA has a long-term business continuity plan (BCP) and has created a BCP Committee, an internal staff committee that addresses the key components of a pandemic or business interruption, Harley Skjervem, CUNA senior vice president of human relations and company pandemic response organizer, told News Now.

Northwest CUs for Kids wine auction raises over 157000

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VANCOUVER, Wash., and SAN DIMAS, Calif. (4/28/09)--The sponsors of the 2009 Oregon and Washington Credit Unions for Kids Wine Auction announced Friday they had raised more than $157,000 at the event April 17. “Our goal was $150,000 and frankly, we weren’t sure we could achieve that this year,” said Roger Michaelis, CEO of iQ CU in Vancouver, Wash., and the event’s main sponsor. “To say we are overwhelmed is an understatement.” The national Credit Unions for Kids program, which originated in Oregon, Southwest Washington and Texas, raises money for 179 Children’s Miracle Network hospitals including Doernbecher Children’s Hospital, Sacred Heart hospital in Eugene, Ore., and the Rogue Valley Medical Center in Medford, Ore. More than 5,000 of the nation’s 8,000 credit unions participate. The NW Wine Auction is one of program’s biggest events. The auction was held at the Governor Hotel in Portland with about 150 attendees. Co-hosts Roger Michaelis and Sarah Canepa Bang, CEO of Financial Service Centers Cooperative Inc., entertained the crowd. Bang shared her perspective on spending, “Whenever I’m worried about spending too much money on something, I ask myself, ‘When I die, how long will I be dead,’ and then nothing seems too expensive.” Auction Coordinator was Lisa Stokman, iQ CU, Vancouver, who is frequently called upon by other event coordinators for “best practices” for similar auctions. The NW Wine auction, which follows the California Credit Unions for Kids wine auction and the Credit Union Cherry Blossom Ten Mile race in Washington, D.C., is the third in a series of Credit Unions for Kids fundraisers. In less than one month, these three events have raised nearly $1.4 million for children’s hospitals nationwide.

CU System briefs (04/27/2009)

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* SOUTH BURLINGTON, Vt. (4/28/09)--The Third Annual Vermont Credit Union Legislator Appreciation Reception Wednesday was "tremendously successful," says the Association of Vermont Credit Unions (AVCU) (Newslines Express April 24). According to AVCU President Joe Bergeron, the event "was packed with legislators and credit union leaders…The number of engaged conversations I witnessed shows that now more than ever, legislators are really looking to credit unions to help Vermonters." Bergeron presented State Rep. Michel Consejo (D-5) with a Garmin GPS Navigation device Consejo won in a drawing during Credit Unions in the Statehouse Day March 19. The reception and the statehouse day events are critical parts of AVCU's overall advocacy plan. (Photo provided by the Association of Vermont Credit Unions) … * COLORADO SPRINGS, Colo. (4/28/09)--Ent FCU, a $2.595 billion asset
Click to view larger image Click for larger view
credit union, awarded its 2009 Youth Endowment Series (YES) program grants to 17 local Colorado Springs non-profit organizations last week. The program, established in 2000, provides grants to organizations that benefit youth in the Pikes Peak region. Since its inception, the program has provided more than $370,000 in grants. This year's grants program received 54 applications. The credit union also received 13 applications from Pueblo non-profits for its Pueblo YES grant program. Those grants will be announced later this week. Pictured are: members of the Ent volunteer employees panel that evaluated the applications (bottom three rows); representatives of the organizations receiving the grants at a reception Thursday; and Ent's board and senior managers (back row). (Photo provided by Ent FCU) … * GREENSBORO, N.C. (4/28/09)--The Carolinas Credit Union Foundation (CCUF) has granted a $10,000 Micro Community Grant to Generations Group Home, a residential group home for at-risk boys. The home, founded in 1991 by Kathleen Reynolds, houses up to 58 youth ages 10-19 caught in a cycle of abuse and who exhibit inappropriate behaviors. Generations has treated more than 600 boys since it opened and reports a 98% success rate. CCUF's funds will enable Generations to purchase and install security grates and fencing for its campuses to help residents and employees feel safe and secure. "As credit unions, it is our nature to care about our communities," said CCUF President/CEO John Slack. "These are wonderful young men who just need a chance." The Piedmont Chapter of the South Carolina Credit Union League and Greenville FCU assisted Generations with the grant proposal. Since it began in 2005, the grant program has awarded more than $750,000 to agencies in North and South Carolina …

Minnesota committees announce volunteers of year

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BLOOMINGTON, Minn. (4/28/09)--The Minnesota Credit Unions for Kids (MnCU4Kids) and Minnesota Family Involvement Council (FIC) committees recently honored two credit union individuals for time and effort spent on their respective committees. Steve Oien of Minnco CU, Cambridge, and Lynn Meisner of City-County FCU, Brooklyn Center, received their volunteer awards April 18 at a banquet during the Minnesota Credit Union Network’s (MnCUN’s) 2009 Annual Meeting & Convention.
During the Minnesota Credit Union Network’s (MnCUN) Awards Banquet on April 18, MnCUN President/CEO Mark D. Cummins presented awards to Lynn Meisner, Family Involvement Council Volunteer of the Year, and Steve Oien, Credit Unions for Kids Volunteer of the Year. (Photos provided by the Minnesota Credit Union Network)
Oien has served as president/CEO of Minnco CU for 18 years. He joined the MnCU4Kids committee in 2003 and was co-chair from 2004 to 2008. Oien received the honor for his involvement in the committee’s golf, annual meeting, and Bowl-O-Rama subcommittees and other activities, and regular meeting attendance. Meisner earned the FIC award for her service on the committee, which she joined in 1991. She has been the accounting manager at City-County FCU for eight years. Meisner served as vice chair of the FIC from 1996 to1999 and secretary from 1999 to 2005. Meisner also received the committee’s Volunteer of the Year Award in 1997. Today, she is instrumental in coordinating the FIC’s Start 2 Go program, which assists credit unions in creating kids, teens and seniors clubs. She is also involved in the committee’s silent auction, scholarship program and other projects.

Greylock FCU forms youth advisory board

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PITTSFIELD, Mass. (4/27/09)--Greylock FCU, Pittsfield, Mass., has assembled a Youth Advisory Board to help the credit union create products and services that will help youth better their savings habits. The group comprises 16 students from schools ages 13 to 18. The youth board members were selected through an application process. While the credit union hopes to gain insight from the board to help it promote financial literacy, it also seeks to educate the board members about banking (Berkshire Eagle April 21). The board’s first project will be to help Greylock communicate its financial literacy program, Fusion, which was created for young adults. The Fusion program offers college funding information, a subscription to a teen financial magazine, a financial literacy brochure, and a college savings share certificate, the newspaper said. The board’s first meeting, April 20, consisted of a discussion about credit scores with Greylock Loan Officer Darrell M. Colvin. Michael E. Fazio, senior vice president and financial adviser, also talked to the group. Greylock has been creating youth financial programs for five years, after finding that there is a “significant” lack of financial literacy among adults, John Bissell, Greylock senior vice president of marketing and administration told the paper. Greylock has $1.1 billion in assets.

Convicted thief escapes drug treatment center robs CU

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ANNISTON, Ala. (4/27/09)--A convicted armed robber escaped a drug treatment center April 20 and then robbed Fort McClellan CU Tuesday. Glasco Stephens, 34, remained at large last week after robbing the $106.2 million asset, Anniston, Ala.-based credit union (The Anniston Star April 23). A corrections officer made two poor decisions--having only one officer transport Stephens from a jail to the treatment center, and unloading inmates at the wrong door of the treatment center--that helped Stephens escape, Sheriff Larry Amerson told the newspaper. Calhoun County had 18 deputies and a K-9 [dog] unit searching the area last week for Stephens, who authorities still believe is in the area near Anniston, Amerson told the paper. Stephens was awaiting trial for a 2008 armed robbery and was previously convicted of a 2002 armed robbery. He was sentenced to three years in jail, along with 17 years on probation and undergoing a drug treatment program, the paper said.

NCUA examiners discuss key rules with Michigan league

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LANSING, Mich. (4/27/09)--Michigan Credit Union League (MCUL) representatives and MCUL regulatory affairs staff met with National Credit Union Administration (NCUA) supervisory examiners April 14 at MCUL’s Lansing headquarters to discuss regulatory areas--loan losses, collection practices, investment policies, mergers and the examination process. “One of the concerns raised by the league during this meeting was the unique and often challenging economic climate of individual communities in Michigan, and how this might affect the examination process,” said MCUL Executive Vice President Patrick La Pine (Michigan Monitor April 20). “The examiners noted that NCUA is aware of local economic conditions, and if a credit union's financial strength, management and strategic plan are sound, this can result in more flexibility when that credit union is facing a tough local economy,” he added. The regulators reported an increase in loan losses since the last time the two parties met in fall of 2008, but the credit union “watch list” continues to remain short. The loan losses appeared to reflect situations in which a credit union was not adhering to its underwriting standards--more so than functions of where the credit union was doing business. For indirect auto lending--which has seen an uptick in volume at some credit unions-- losses resulted from the purchase of low-quality loans; and for member business loans, a relaxation of credit standards was typically the cause followed by inadequate monitoring of loan performance. MCUL staff meets twice a year with senior staff from NCUA and the Michigan Office of Financial and Insurance Regulation to discuss trends, issues of concern and ways MCUL can use its resources to head off negative practices and otherwise assist in problem resolution.

CUNA Mutuals Jolicoeur caps 34-year career

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MADISON, Wis. (4/27/09)--Bill Jolicoeur, who spent more than half his life as a CUNA Mutual Group employee, is retiring May 1 from the business that took him around the world. For 34 years, Jolicoeur was an advocate for the credit union movement with a career that ranged from a sales representative in Easton, Mass., to vice president and product executive in Madison, Wis. “People have asked me why I stayed with one company for 34 years,” Jolicoeur said. “My answer is always the same. When your company helps its customers be better at their core business through product development and related support, that’s a win-win. CUNA Mutual is a customer-focused company with commitment and pride. I can’t think of another organization I’d have wanted to work for.” Jolicoeur, 57, joined CUNA Mutual Sept. 1, 1975, as a sales rep in Massachusetts with more than 300 credit unions in his territory. After relocating to Maine, where he “spent a good amount of time offering Collateral Products (CP) to my credit unions as a lending solution,” Jolicoeur was promoted to manager of the company’s CP program. The promotion, four years after joining the company, included relocation to the CUNA Mutual headquarters in Madison. As Jolicoeur moved up in the company, he made his mark on the credit union movement through his accomplishments at CUNA Mutual. Among the highlights:
* Establishing and leading CUNA Mutual’s Life, Health, Individual Property and Casualty brokerage operation; * Establishing and leading CUNA Mutual’s internal corporate risk management and safety/loss program, where he played a prominent role in the permanent affiliation of the Century Companies of America and CUNA Mutual Insurance Society (CUMIS); * Leading CUNA Mutual’s Bingham Farms, Mich., operation, where he oversaw the sale of CUMIS General and the CUMIS auto program to Liberty Mutual; and * Leading the growth of CUNA Mutual’s MEMBERS Auto and Home program to include more than 3,200 credit unions and nearly 40 million eligible members, where he was directly responsible for today’s strong relationship with Liberty Mutual.
“Bill developed a strong working relationship with our partner Liberty Mutual and helped build and grow a book of business that benefited all parties,” said Randy Kohout, CUNA Mutual’s vice president of organization capability. “His excellent record with the MEMBERS Auto and Home products made him the natural choice for the larger lending products role, where he again demonstrated his passion and business savvy.” Jolicoeur plans to stay busy after retirement. “There is a huge need in our country for alternative housing options for younger adults with disabilities,” he said. “My second career will focus on raising money for this cause, hopefully creating a foundation in the near future.”

Illinois league elects officers at annual convention

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NAPERVILLE, Ill. (4/27/09)--The Illinois Credit Union League (ICUL) elected its table officers for the coming year, each to their second one-year terms, at its 79th Annual Convention April 16-18 in Chicago. Also, the ICUL Service Corp. elected one new director to its board. The Illinois Credit Union Foundation (ICUF), the Credit Union Political Action Council (CUPAC), and the Illinois Youth Involvement Council (IYIC) elected officers and directors to their respective boards. John Bratsakis, senior vice president of business development for Baxter CU in Vernon Hills, was re-elected as chairman for a one-year term. He also will serve in this capacity for the ICUL Service Corporation (LSC). Bratsakis has served on the league board since 2001 representing the Thomas W. Doig Chapter of Credit Unions. During this time, he also was chairman of the legislative committee, a member of the executive committee, and a member of the Credit Union Support Group (CUSG) committee. Dennis Hall, CEO of I.H. Mississippi Valley CU in East Moline, was re-elected as vice chairman. Hall started his credit union career more than 20 years ago and has been CEO for the past 11 years. He has been on the league board representing the Illinois Quad Cities Chapter of Credit Unions since 2001 and during this time was also a member of the legislative, executive, and Credit Union Support Group (CUSG) committees. Hall also will serve as LSC vice chairman. Geraldine Burek, CEO of South Division CU in Evergreen Park, was re-elected as secretary/treasurer. Burek has served as ICUL director representing the Southeast Chapter of Credit Unions since 2003. During that time, she was also chairman of the annual convention and legislative committees, and served on the executive committee and the CUPAC board for 21 years. Libby Calderone, CEO of Earthmover CU, Oswego, was elected to a three-year term as director of the ICUL Service Corp. (LSC). The LSC is a subsidiary of ICUL that provides electronic funds transfer, credit, debit, and prepaid card products, merchant, and collection services to more than 2,000 credit unions in 45 states. Also as part of the convention, the ICUF held its annual meeting and re-elected its officers and elected two new directors. Officers included:
* Ed Jacob, ICUF chairman and CEO, North Side Community FCU, Chicago; * Greg Worthen, ICUF vice chairman and director of lending, Olin Community CU, Bethalto; and * David Mooney, ICUF secretary/ treasurer and CEO, Alliant CU, Chicago.
Thomas Pierce, CEO, Canals & Trails CU, Lockport; and Michael Lee, president, Midwest region, Members United Corporate FCU, Warrenville, were each elected to a three-year term as a result of two directors retiring from the board. CUPAC elected a new chairman and board of directors at its annual meeting. Officers elected to one-year terms include:
* Karen Woods, CUPAC chairman and marketing director, Decatur Earthmover CU, Decatur; * Brenda Crane, CUPAC vice chairman and chief operating officer, Credit Union 1, Rantoul; * John Fiore, CUPAC secretary and CEO, Motorola ECU, Schaumburg; and * Tom Enos, CUPAC treasurer and business development director, First Northern CU, Chicago.
Board members re-elected to one-year terms include:
* Christine Dickover, CEO of H-F CU, Country Club Hills; * Pete Fauth, vice president/chief financial officer, Financial Plus CU, Ottawa; * Mike Frye, chairman, Shell Community FCU, East Alton; * RaeAnn Love, CEO, Commonwealth CU, Bourbonnais; * Frank Padak, CEO, Scott CU, Collinsville; and * Robert Schroeder, CEO, Illinois Community CU, Sycamore.
The IYIC re-elected its executive committee, also during the convention. The members include:
* Melissa Brown, DHCU Community CU; * Shelli Chesnutt, Aurora Policemen CU, Aurora; and * Jeri Hansen, Danville Consolidated CU, Danville.

CU System briefs (04/24/2009)

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* LENEXA, Kan. (4/27/09)--A man who tried to kill a witness during a robbery of Credit Union of Johnson County March 28 was indicted by a federal grand jury (Kansas City Star April 23). Nicholas Kamphaus, 26, also is charged with armed bank robbery. Kamphaus is accused of shooting a 71-year-old man several times after he robbed Credit Union of Johnson County. The man survived ... * BIRMINGHAM, Ala. (4/27/09)--The Alabama Credit Union League honored four retiring league board directors during the 76th annual membership meeting in Destin, Fla., April 14-16. The directors are: Hillard Sparks, Valley CU, Tuscumbia; James Dill, Tri-Rivers FCU, Montgomery; David Eubanks, Community CU, Gadsden; and Linda Cencula, Alabama Telco CU, Birmingham. Each was honored with a resolution that listed their accomplishments and a gift for service ... * TRENTON, N.J. (4/27/09)--The New Jersey Association of Counties last week endorsed legislation that would allow state credit unions to be depositories for municipalities (The Weekly Exchange April 20). The association is the second trade group to support the legislation. In March, the New Jersey League of Municipalities voted to include the legislation in its priorities. Lawmakers will return after the legislature’s annual budget recess ... * RALEIGH, N.C. (4/27/09)--State Employees’ CU (SECU) Foundation representatives and other community members attended a groundbreaking ceremony April 16 for the SECU Hospice House of Johnston Health in Smithfield, N.C. SECU members, through the SECU Foundation, donated a $1 million grant to the hospice house. From left are: Patti Hooper, senior vice president, SECU Smithfield branch; Mark Twisdale, senior vice president, SECU human resources and SECU Foundation executive director; Shirley Bell, SECU board chairman; and David King, SECU Foundation board chairman. (Photo provided by State Employees’ CU) ...

Texas report examines traits of payday borrowers

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FARMERS BRANCH, Texas (4/27/09)--A Texas report surveyed payday borrowers in Austin, Dallas, Houston and San Antonio to examine the demographics of those using payday loans in the state and the reasons why--and can provide credit unions with insights into consumers seeking loans. Low- and moderate-income families, and single women, are the primary users of payday loans, according to the survey. Texas Appleseed announced the release of the new report--Short-term Cash, Long-term Debt: The Impact of Unregulated Lending in Texas (LoneStar Leaguer April 15). Respondents said they used a payday lender because it is quick and easy. While payday and short-term auto title lenders provide immediate access to cash, it comes at a high price: often $20 or more per $100 borrowed in a two-week period. The Texas Appleseed report finds that 58% of payday loan borrowers had to roll over or extend loans at least once before paying them off. The rollover percentage is even higher (72%) in a 2007 national survey. Key findings of the study:
* The majority of survey respondents who needed short-term credit used it to pay for recurring basic expenses such as utilities, food and housing; * 13% of those surveyed use payday loans for short-term credit needs; * Nearly one in 10 payday borrowers uses payday loans monthly; * Over half of the payday borrowers roll over or extend their loans at least once before they can pay them off--and nearly one in four payday borrowers surveyed roll over loans multiple times. As a result, the cost to borrow money frequently exceeds the original loan principal; * A majority of payday borrowers are in their 20s and 30s; * 59% of borrowers are women, many of them single women and single mothers; * Although payday borrowers include all major ethnic groups, a disproportionately high percentage are African American and Hispanic; * Payday loan use declines with age, with two exceptions: Payday loan use increases for single women and for Caucasians in their 50s.
To read the full report, use the link.

Irish CUs told to keep 10 of assets in reserves

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DUBLIN, Ireland (4/27/09)--Irish credit unions have been advised by their national financial regulator to keep a reserve ratio of at least 10% of their assets by September 30, or they will face restricted operations. The Irish Examiner reported Wednesday that the rule applies to each individual credit union. The office’s decision was based on a difficult economic environment, the newspaper said. “The recent turmoil in global financial markets has highlighted the importance for all financial institutions to ensure they have sufficient reserves to support their undertakings and maintain confidence in the financial system,” said a document from the Office of the Registrar of Credit Unions. “Furthermore, the difficult economic environment that credit unions are currently experiencing places increased emphasis on the requirement for credit unions to ensure they are maintaining adequate reserves.” In some cases, credit unions may be required to hold more than 10% in assets at the request of the registrar. Credit unions that cannot meet the reserve requirement must have:
* 8% of reserves by September 30; * 9% of reserves by Sept. 30, 2010; and * 10% of reserves by Sept. 30, 2011.
The reserves must be “non-distributable and unrestricted,” the newspaper added.

CUs on the Tube PLCU announces winner of video contest

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SAN DIEGO (4/27/09)--Point Loma CU (PLCU) recently announced that Shelbi Kepler, 18, of Temecula, Calif., won its “PLCU in:30” video contest, which was open to anyone 18-23 years old. Kepler’s commercial depicted a group of friends on a road trip in California that were enjoying their free time--and easy access to the PLCU accounts. Kepler won an Apple iPhone and will appear on “San Diego Living.” Her commercial will air during one month on a San Diego television station during shows such as “Gossip Girl,” “One Tree Hill,” “90210” and “The Simpsons.” PLCU has $481 million in assets. To see Kepler’s video, use the link.

WOCCU CUs should not be penalized

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AMSTERDAM, The Netherlands (4/24/09)--Credit unions should not be penalized by tougher capital requirements than those faced by larger, riskier institutions that present systemic risk to the global financial system, Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU), told the Basel Committee on Banking Supervision. Crear and Dave Grace, WOCCU vice president of association services, met with Basel Chairman Nout Wellink April 15. The visit followed three letters WOCCU sent to the Basel Committee regarding proposed rules on stress-testing procedures and capital level requirements. The committee believes that increased capital reserves are necessary to foster greater global resilience to future episodes of economic and financial stress, and has made a series of recommendations for increasing reserves by 2010, WOCCU said. “We didn't want credit unions and financial cooperatives to pay an unfair price as part of the solution to a crisis they had no hand in making,” Crear said. “Chairman Wellink was very receptive to our comments and assured us that he would bring our concerns forth to his fellow committee members.” In some cases, the proposed standards for credit unions exceed levels required for large, complex banks, which prompted WOCCU to call for a “rebalancing” of inconsistencies. WOCCU addressed these issues in a fourth letter it sent to the committee after last week's visit. Cooperative financial institutions play a vital role, not only in serving the financial needs of 857 million consumers worldwide, but by spreading economic risk over a greater number of institutions, WOCCU said. By contrast, existing industry risk-modeling standards have failed to keep large banks from hemorrhaging losses that have fed the global economic downturn. Smaller institutions, especially member-owned financial cooperatives, hold smaller concentrations of funds, strengthening the global financial network by reducing the risk each institution poses, WOCCU added. “We want to ensure at the implementation of these rules that financial supervisors recognize that credit unions are different from banks,” Grace said. Under Basel II guidelines, larger financial institutions may hold comparatively less capital than smaller institutions. However, the current crisis has shown that many larger institutions are riskier and prone to greater systemic problems. Failure to rebalance capital requirements within Basel II to appropriate levels will potentially weaken smaller institutions. Fair capital requirements for institutions of all sizes not only aid financial cooperatives' operating capabilities, but they strengthen the soundness and stability of the international banking system, WOCCU added. “Chairman Wellink told us the pendulum was swinging toward more stringent regulation and expressed concern that it may swing too far,” Crear said. “We've offered WOCCU as an information resource on financial cooperatives to the committee in hopes of keeping credit unions from being unfairly penalized for the current situation.” To read the letters, use the link.

CU Museum holds financial literacy fair

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MANCHESTER, N.H. (4/24/09)--Students learning about personal finances applied their in-class studies to a real world setting at the CU 4 Reality Financial Literacy Fair held at America’s Credit Union Museum in Manchester, N.H. This is the fifth year students from Rundlett Middle School in Concord, N.H., participated in the CU 4 Reality Program, but the first year students learned the effects of a job loss on their spending plans (BusinessWire April 22). The CU 4 Reality Financial Literacy Program is a financial literacy curriculum that is taught to Rundlett students in partnership with New Hampshire FCU, Concord, N.H., and America’s Credit Union Museum. After completing in-school studies, more than 375 eighth-graders met on April 16-17, and 17 eight-graders gathered at the museum to test their classroom lessons. The CU 4 Reality curriculum creates an interactive learning environment in which students can practice specific financial management skills and learn early on the consequences of getting in over their head when it comes to financial matters, said Polly Saltmarsh, New Hampshire FCU marketing manager. At the fair, students receive a folder that details their personal career information, including starting annual salary. Then, students progress through the fair interacting with salespeople, volunteers, and vendors as they acquire bills for housing, transportation, food, clothing, insurance, entertainment and more. Students also must spin the “Wheel of Reality,” which could provide a financial windfall, such as additional income from refereeing or babysitting, or it could prove a financial disaster. In keeping with the economic hard times this year, students could spin the wheel and lose their jobs. Students had to face the consequences and meet with credit counselors to collect unemployment, and figure out how to make ends meet.

Survey CU members trust CUs more than banks

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SAN DIEGO (4/24/09)--A majority of credit union members--88%--said they trust credit unions more than banks, according to CUTS Performance Marketing, a performance marketing network for credit unions, which released the results Wednesday of a survey conducted in partnership with Kelton Research. Even for members who use their banks more often, nearly 7 out of 10 (69%) still find credit unions more trustworthy than banks. Also, 61% of members said they enjoy being a member because they believe credit unions will keep their money safe, while 43% find that credit unions adhere to higher standards than other financial institutions (MarketWire April 22). “It comes as little surprise that most credit union members trust their credit unions more than any other financial institution,” said Jeff Plumer, president of CUTS Performance Marketing. “With issues like insolvency and corruption among today's financial headlines, it’s no wonder members highly value the benefits and standards of their credit unions.” The survey also indicated that nearly 3 out of 4 members (72%) say belonging to a credit union has more advantages than being a bank customer. In fact, more than one-third (35%) said their preference of a credit union over a bank is one of the chief reasons for joining. Of the top credit union advantages, 62% said the best one is knowing their money is safe, followed by access to special discount offers on non-traditional products that fall outside of typical banking offerings (55%) and convenient branch locations (51%). Even though access to special discounts on non-traditional products ranked high and nearly all members (95%) said they trust special discount offers from their credit union, nearly 4 in 5 (79%) still purchase them somewhere other than their credit union. Only a small percentage of products are purchased directly through the credit union's branch or website, including auto insurance (4%), tax preparation software (3%), event tickets (3%) and personal finance management software (2%). Still, there is evidence that the availability of discount offers would increase credit union use, the survey indicated. Almost four in ten (37%) members would use their credit union more than they currently do and a majority of members (85%) expressed a desire to see more special discounts from brand-name companies offered by their credit union. “These survey findings reinforce the immediate opportunity credit unions have to build on the strength of their members’ unique trust and loyalty,” said Van Barker, CUTS senior vice president. “By offering savings on non-traditional products and services, credit unions can broaden the benefits of membership while further differentiating themselves from other types of financial institutions.”

CU System briefs (04/23/2009)

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* DUBUQUE, Iowa (4/24/09)--DuTrac Community CU has been recognized by Iowa Gov. Chet Culver as a leading lender for its participation in the Iowa Finance Authority’s FirstHome Program in 2008. DuTrac’s commitment to homeownership programs is vital to state growth, Culver said. “DuTrac Community CU’s First Time Home Buyers program strives to offer federal and state programs combined with the most attractive rates to help Iowans achieve their dreams of homeownership,” said Andy Hawkinson, DuTrac president/CEO ... * ST. PAUL, Minn. (4/24/09)--The Minnesota Credit Union Network (MnCUN) announced the Outstanding Credit Union Professional of the Year and the Outstanding Credit Union Volunteer of the Year April 18. The Volunteer award was given to Paul Jacobsen, TopLine FCU, Maple Grove. Jacobsen has volunteered at TopLine for 14 years, serving as board vice chair, chair of the executive committee and member of the supervisory committee. Bill Raker, US FCU, Burnsville, received the Professional Award. He is on the MnCUN board of directors and has served on boards and committees, including the Credit Union National Association (CUNA) Governmental Affairs Committee, CUNA’s Due Diligence Task Force and the Credit Union Service Centers Executive Committee. He also is active in the World Council of Credit Unions ... * RALEIGH, N.C. (4/24/09)--State Employees’ CU (SECU) demonstrated its support in making North Carolinians more environmentally aware by participating in the second annual Planet Earth Celebration in Raleigh, N.C. During the event, SECU highlighted its green products--such as the Green Mortgage, Green Vehicle Loan, and its online e-statements and bill pay. “SECU feels strongly about supporting the advancement of green initiatives to improve the environment and quality of life in North Carolina and globally,” said Bobby Hall, SECU senior executive vice president. He added that SECU hopes to work with NC Electric Membership Cooperative to promote solar hot water systems. (Photo provided by State Employees' CU) ... * HERNDON, Va. (4/24/09)--Northwest FCU Foundation (NWFCU) will host a “Night of Magic” ball for patients at Children’s National Medical Center, a Children’s Miracle Network hospital. The ball coincides with prom season and aims to provide patients who may miss their prom a chance to dress up and attend a dance. The foundation is collecting party attire for children of all ages from toddler to 21. NWFCU will collect donations through the end of May. Children’s National Medical Center is located in Washington, D.C. ...

Texas Senate passes revision to state CU Act

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AUSTIN, Texas (4/24/09)--The Texas Senate sent to the Texas House revisions sought by the Texas Credit Union Department (TCUD) and credit unions to the state Credit Union Act on Wednesday by a 30-0 vote. The House Pensions, Investments, and Financial Services Committee also heard the House companion bill--House Bill 3200 by State Rep. Dan Flynn (R-2) Wednesday. The Texas Credit Union League (TCUL) thanked the Senate bill sponsor--State Sen. Kip Averitt (R-22)--for his leadership in getting the bill through the Senate Business and Commerce committee and the Senate chamber (LoneStar Leaguer April 23). Every few years, the TCUD is charged with reviewing the act and rules to keep them modernized. The last major revisions to the state Credit Union Act occurred in the 2003 session. The bill has a number of sections dealing with TCUD powers, credit union powers, and board governance issues. Current law provides for both regulatory oversight and corporate governance of credit unions. The bill amends the finance code to provide for additional regulatory oversight of credit union activities and addresses provisions concerning corporate governance. It also adds provisions to the finance code for regulatory coordination between state and federal agencies. The bill provides the credit union commissioner additional regulatory and supervisory oversight of credit union activities and amends various provisions relating to the administration and operation of credit unions.

Alabama CU league honors presidentCEO

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BIRMINGHAM, Ala. (4/24/09)--The Alabama Credit Union League honored league President/CEO Gary Wolter during the league’s annual meeting in Destin, Fla. Wolter, who will retire in July, was recognized for his 47 years of service to the credit union industry with a league Distinguished Service Award. The Gary B. Wolter Lifetime Achievement Education scholarship also was established. “Alabama’s credit unions, indeed credit unions across the world, would not be where they are today without Gary’s vision and contributions,” said League of Southeastern Credit Unions Chair-elect Joe McGee. The Alabama league and Florida league recently combined to form the league. The Distinguished Service Award is the Alabama league’s highest honor and has been given to three other recipients. The scholarship will allow credit unions to attend educational seminars, conferences and workshops.

League of Southeastern CUs holds first meeting

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (4/24/09)--The board of directors of the newly formed League of Southeastern Credit Unions (LSCU) assembled April 13 for its first face-to-face meeting. Brought together in time for the Alabama Credit Union League’s 76th Annual Membership Meeting & Education Symposium in Destin, Fla., the meeting allowed the new board to spend time together and move the consolidation process forward. The League of Southeastern Credit Unions, formed from the consolidation of Alabama and Florida member credit unions, represents 332 credit unions with combined total assets of $55 billion. As the LSCU, the coming together of these two entities will create an even stronger, more strategically situated organization, LSCU said. Chairman-elect Joe McGee presided over the meeting for Board Chairman Rich Helber. Helber was unable to attend due to a schedule conflict. “This meeting was a historic step in the transition process of our new entity,” said McGee. “This time together enabled the LSCU board to get to know one another better and determine how we will work best to further the success of our credit unions in both states. In the next few months, we will be spending quite a bit of time together, particularly as we continue through the transition process.” With both Alabama President/CEO Gary B. Wolter and Florida Credit Union League President/CEO Guy M. Hood retiring at the end of July, the meeting also provided the opportunity for both leaders to address the new board and staff members.

St. Marys Bank hosts 100th shareholder meeting

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MANCHESTER, N.H. (4/24/09)--St. Mary’s Bank, the nation’s first credit union, conducted its 100th annual shareholder meeting April 14 with more than 260 members, employees, board members and elected officials attending. Elected officials included New Hampshire Gov. John Lynch, State Rep. Carol Shea-Porter (R-23), Manchester Mayor Frank Guinta, and other state representatives from Manchester, Hudson and Nashua. Both Lynch and Porter commended St. Mary’s long-time commitment to New Hampshire residents. “St. Mary’s--in my mind, is so much more than a financial institution,” Lynch said. “It’s a really good neighbor. It’s out there trying to make a difference in the lives of people it serves.” During the meeting, St. Mary’s officials listed the credit union’s accomplishments during the past year. The credit union’s core operations are doing well--especially in lending. St. Mary’s has experienced strong commercial, consumer and mortgage activity in the first quarter of 2009, according to St. Mary’s President/CEO Ronald Covey. “We are ahead of our 2009 business plan for both deposits and loans, and we are ahead of where we were last year at this time,” he said. During the past year, St. Mary’s provided:
* $186 million to members through new loans; * $460 million in total loans; and * $470,000 in savings by not charging ATM fees.
The credit union also had $520 million in member deposits in 2008, the credit union said. During the meeting, St. Mary’s elected Joseph G. Fremeau; Suzanne Vachon; and Ronald Rioux, former president/CEO of St. Mary’s, to three-year terms on the board. Guy Chapdelaine was elected to a two-year term. St. Mary’s Bank, based in Manchester, N.H., has $652 million in assets.

Conn. league highlights CU accomplishments

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MERIDEN, Conn. (4/24/09)--The Connecticut Credit Union League (CCUL) improved its income position, increased legislative visibility and increased participation in league events over the past year, according to CCUL President/CEO Anthony Emerson.
Connecticut Credit Union League President Anthony Emerson listed the league’s accomplishments this past year--including increased income and legislative visibility--during the league’s annual meeting April 17-18. (Photo provided by the Connecticut Credit Union League)
Emerson provided a rundown of the league’s accomplishments during his speech at the annual meeting April 17-18 in Ledyard, Conn. The league’s meeting was held in conjunction with the annual meeting of Constitution Corporate FCU, Wallingford. Emerson said the league:
* Established a strategic partnership program, reorganizing league internal operations and responsibilities, and acquiring reaffiliations; * Developed a Small Credit Union Support program, which includes creating a Small CU Task Force with representatives from every chapter to oversee policies and procedures and establish and monitor fundraising efforts; * Added products and services--such as the CT Compliance Solutions program with a full-time regulatory compliance Answer Person and compliance updates--vendor management policy and a software program free to affiliated credit unions; * Established marketing, finance, and compliance member councils; * Increased league staff contact with affiliated credit unions; * Developed an innovative dues-discount program for multiple-year affiliation with options to underwrite support for the small credit union program; * Responded to inquiries from and assisted out-of-state leagues and organizations requesting information on league programs that are successful with Connecticut member credit unions; and * Created subject-dedicated publications and developed sources for communicating breaking news and events--such as fraud, robbery, and legislative alerts.
The meeting offered educational sessions and 43 vendors exhibited products and service. The official business meeting--where Emerson spoke--broke attendance records, the league said.

S.C. CUs elect new director six incumbents to board

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COLUMBIA, S.C. (4/23/09)--South Carolina credit unions have elected one new director and six incumbents to the South Carolina Credit Union League (SCCUL) Board of Directors. Election results were announced at the April 18 business session of the SCCUL & Affiliates 2009 Annual Meeting in Myrtle Beach, S.C. New to the board is Jim McDaniel, president/CEO of Heritage Trust FCU, Summerville. Re-elected incumbents are:
* Faye Crocker, CEO, Greater Abbeville FCU, Abbeville; * Isaac Dickson, board chairman, Carolina Foothills FCU, Spartanburg; * Paul Hughes, president, Greenville FCU, Greenville; * Jerry Miller, president/CEO, Carolina Trust FCU, Myrtle Beach; * Brad Rustin, president/CEO, Charleston Area FCU, Charleston; and * Ed Templeton, president/CEO of SRP FCU, North Augusta.
The new board also selected for its executive committee:
* President Scott Woods, president/CEO, S.C. FCU, North Charleston; * Templeton, first vice chairman; * Rustin, second vice chairman; * Treasurer Linda Weatherford, vice president, SPC Cooperative CU, Hartsville; and * Secretary Patti Seymore, vice president, SC Telco FCU, Greenville.
As former chairman, Love will serve as an ex officio member of the executive committee.

Alabama league holds membership meeting bestows awards

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BIRMINGHAM, Ala. (4/23/09)--The Alabama Credit Union League (ACUL) hosted its 76th Annual Membership Meeting and Education Symposium April 14-16, in Destin, Fla. More than 227 credit union executives, staff and volunteers attended, with an additional 104 guests and 43 vendor organizations represented. Many credit unions attended the meeting, “which in essence is the last Annual Meeting for the Alabama Credit Union League,” said League President/CEO Gary B. Wolter. “Over the years, we have grown the movement, sometimes swiftly and sometimes achingly slowly. But by working together, we have all moved it forward. Now we are entering a new era of growth and prosperity and are looking forward to growing our partnership with the Florida Credit Union League as the League of Southeastern Credit Unions (LSCU).” Wednesday began with the league’s annual membership meeting, which addressed league business and recognized credit unions and individuals who have, in the past year, excelled or made outstanding contributions to the credit union movement and their communities. Featured guest speakers at the business session included Florida Credit Union League President/CEO Guy Hood, Credit Union National Association Chairman (CUNA) Kris Mecham, National Credit Union Association (CUNA) Regional Director Alonzo Swann, CUNA Mutual Regional Sales Manager Robin Kolvek and Manuel Bolanos, CEO of FEDEAC R.L., the trade association for Costa Rica’s credit unions. Bolanos mentioned the momentum credit unions in Costa Rica have had--in giving thanks to the partnership with ACUL and its member credit unions--and his hopes that the LSCU will continue the partnership. Wednesday continued with a line-up speakers and educational sessions. The Opening General Session featured Dr. Edmund J. Seifried, who spoke about “Today's Economy and the Impact on Your Credit Union,” which addressed the state of the economy and trends that affect our credit unions. The league also announced winners of the Merit Awards. Those winning the award represent excellence in service, financial performance, system, and community involvement. The league enlisted CUNA to judge all submissions and select the winners. Merit Award winners are:
* Class One category: FOGCE FCU, Eutaw, Ala.; * Class Two category: Alabama Postal CU, Birmingham, Ala.; * Class Three category: East Alabama Medical Center FCU, Opelika, Ala.; * Class Four category: Health CU, Birmingham, Ala.; * Class Five category: Valley CU, Tuscumbia, Ala.; * Class Six category: North Alabama Educators CU, Huntsville, Ala.; * Class Seven category: ACIPCO FCU, Birmingham, Ala.; and * Class Eight category: Family Security CU, Decatur, Ala.
The 2008 Chapter Excellence Award was awarded to the Montgomery Chapter of Credit Unions. Representing 11 credit unions, the chapter awarded educational scholarships, implemented a cooperative advertising campaign, and sponsored a golf tournament which raised more than $26,000 for local charities. The chapter also maintained a focus on credit union issues and advocacy, featuring speakers and programs of import to credit unions statewide.

REAL Solutions program signs four new states

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WASHINGTON (4/23/09)--Surpassing its goal to reach 33 states by year-end 2009, REAL Solutions--the signature program of the National Credit Union Foundation (NCUF)--is now reaching 34 states and 1,200 credit unions. In the first four months of 2009, four more states have agreed to offer REAL Solutions: Georgia, Idaho, Pennsylvania and Vermont. NCUF’s REAL Solutions National Program Director Lois Kitsch has set a new personal goal to bring REAL Solutions to 40 states by year-end. At the Pennsylvania Credit Union Association (PCUA), REAL Solutions liaisons are witnessing a new phenomenon: Credit unions are already signing up for REAL Solutions even before PCUA’s meeting to introduce the program. “In this uncertain economy, credit unions are looking for new ways to help members build good credit, grow savings, and gain assets,” said Kitsch. “The need for REAL Solutions has never been greater.” At the same time, NCUF is providing “virtual solutions” accessible to credit unions in every state. The online REAL Solutions Impact Center (see link) features new toolkits, podcasts, monographs, blogs, and many other resources to help credit unions offer sustainable products and services for members with low wealth. Low-wealth members include people with low income or modest means, and people with moderate and middle incomes who are struggling to save or hold onto assets. Surveys on the Impact Center indicate how REAL Solutions’ participating credit unions are saving members tens of millions of dollars. “The most successful products and services are not only affordable for consumers, but also sustainable for credit unions,” Kitsch explained. “Sustainable products and services become a permanent part of credit unions’ business plans--as opposed to ‘loss leaders’ that must be limited in volume or subsidized by other parts of the credit unions’ operations.” “As credit unions seek resources to better serve low-wealth households and emerging markets, REAL Solutions has become an even more critical business strategy for credit unions growing their memberships by serving the underserved,” said NCUF Executive Director Steve Delfin. “Now that the strategies are detailed online on the REAL Solutions Impact Center, thousands more credit unions can benefit from our shared experiences across the country.” NCUF, state credit union foundations and leagues are funding REAL Solutions through the Community Investment Fund (CIF), which won the Association of Fundraising Professionals’ Award for Fundraising Excellence. CIF investments are structured to earn dividends for each investing credit union while making charitable donations to NCUF and state credit union organizations.

Man killed at State Employees CU ATM

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LUMBERTON, N.C. (4/23/09)--Police are investigating the shooting death of a man who was discovered slumped over in his truck after making an early morning withdrawal Tuesday from an ATM at the Lumberton, N.C., branch of State Employees’ CU (SECU). Charles Rozier, 46, was discovered about 2:30 a.m., near the ATM with a gunshot wound to his chest, said Lumberton Police Lt. Johnny Barnes. A receipt indicated that Rozier withdrew money from the SECU ATM at 2:11 a.m. (Associated Press April 22). “We are cooperating with authorities in the investigation,” Leigh Brady, SECU senior vice president of education services, told News Now. “We continually do inspections to make sure areas around credit unions are well-lit.” Police didn’t know the amount of money Rozier withdrew, but said his wallet was with him and contained cash. Barnes said the shooting was recorded on a poor-quality surveillance tape, according to the Associated Press. The tape showed two men approaching Rozier when he got back in his truck after making the ATM withdrawal. The men opened a truck door and one of them shot Rozier before they ran away, the tape showed.

CUNA audio conference helps develop strategic plans

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MADISON, Wis. (4/23/09)--Credit union volunteers can find out how to create viable strategic plans in a challenging economy during the first of several upcoming audio conferences offered by the Credit Union National Association. During the “Board Scenario Planning for a Challenging Economy” audio conference Tuesday, board members can learn what information they should pay attention to create, adapt or reconfigure their strategic plans in a viable way. The session will identify trends of savings and loan activity, weigh the influence of future economic events on growth patterns in 2009, and analyze and establish standards against which credit union performance can be measured. “Board Scenario Planning for Developing and Maintaining an Effective Collections Department,” scheduled for May 5, will examine successful and effective credit union collections programs with member service as the focus. The session also will provide creative tools for assisting members in financial need while creating a more efficient collections process. “Working Your Portfolio Using Loan Modifications in This Economy” walks attendees through underwriting practices and creative ways to minimize effects of charge-offs, repossessions, and bankruptcies. The May 11 audio conference also will feature success stories from credit unions that are using loan modifications to help the member during a financial crisis. On May 14, volunteers can learn about check-hold time frames and how they can be used to help protect credit unions from fraud during “Regulation CC: Check Holds and Other Checking Account Issues.” The offering also covers holds on cash, Check 21, notices, disclosures and stop payments. “Delinquencies and Loan Loss Reserve Funds” on May 18 offers regulatory perspective on how to adequately and fairly fund a credit union’s allowance for loan and lease losses account. The impact of the current economy on lending and collections and loan portfolio diversification will be discussed. Credit union professionals can receive answers to compliance questions during “Pressing Credit Union Compliance Issues” May 21. The conference will address the most popular hot-topic issues--as determined by feedback received from credit unions. Participants can e-mail their questions to cucomply@cuna.coop before the conference.

Two Mass. CUs explore merger

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BROCKTON, Mass. (4/23/09)--HarborOne CU and NationsHeritage FCU, two Boston-area credit unions, are exploring a merger. HarborOne’s members voted in favor of the merger last week, and NationsHeritage members were scheduled to vote on the proposed merger Wednesday night. The credit unions are proposing to merge because they share the same philosophies on member service and the community, and the merger would enhance convenience and service for members, Jim Rice, HarborOne senior vice president of marketing, told News Now. NationsHeritage also is “adjacent to HarborOne’s marketing footprint” in the Boston area, Rice said. If the merger is approved, the resulting credit union would retain the HarborOne name. It would have 15 branches, 28 ATMs and 138,000 members. HarborOne is the larger credit union of the two, with 12 branches and 23 ATMs. The merger would not be finalized until after May 5 because of regulatory approval, Rice said.

Personal finance guru lauds CUs

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MADISON, Wis. (4/23/09)--Credit unions are safe and practice excellent customer service, said Dave Ramsey, a personal finance expert with Gatehouse News Service, in a response in his column to a reader’s question. “Considering the current state of the economy, [my husband and I] were wondering if a credit union would be a safer place than a traditional bank for some of our savings?” a reader asked (Norwich Bulletin.com April 22). Ramsey said that the National Credit Union Administration increased insurance coverage limits for deposits in 2008, just as the Federal Deposit Insurance Corp. did for banks. “The biggest thing you want to look at is the ‘hassle factor’ if your institution goes broke and closes up shop,” Ramsey wrote. “I haven’t done business with big banks for years, primarily because of the awful customer service you get at most of them. I like local, community banks, and I believe whole-heartedly in credit unions. As a rule, these institutions practice excellent customer service. Plus, most of them didn’t get mixed up the sub-prime debacle. “Community banks and credit unions are both safe, and in most cases, they’re both fabulous places to put your money,” he concluded.

Colo. association elects board of directors

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DENVER (4/23/09)--The Credit Union Association of Colorado (CUAC) announced that it has elected three incumbent board members during its annual meeting in Colorado Springs. The incumbents are:
* Charles Emmer, president, Ent FCU, Colorado Springs; * Keith Cowling, president, CU of Denver; and * Steve Pearson, president, Fellowship CU, Lamar.
The board also elected board members to the following leadership positions:
* Chairman, Doug Ferraro, president/CEO, Bellco CU, Greenwood Village; * Vice Chairman, Michael Williams, president/CEO, Colorado CU, Littleton; * Treasurer, Keith Cowling, president/CEO, CU of Denver, Lakewood; and * Secretary, Eva Gaudio, president/CEO, St. Vrain Valley CU, Longmont.

North Island CU to close three branches

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SAN DIEGO (4/22/09)--North Island CU, San Diego, plans to close three branches next month as part of a plan to reduce expenses by 26%. The branches scheduled to close are Vista, Carlsbad, and Clairemont Square. Clairemont will be combined with the Kearny Mesa branch, which is about four miles away. The lease for the Clairemont branch’s space was set to expire next month, Kelli Beck, North Island vice president of marketing, told News Now. Clairemont will close May 15, Carlsbad will close May 22 and Vista will close May 29. Staff who work at the three locations will be laid off. Members who use those branches can bank online or visit the Mira Mesa or Scripps-Poway branches, Beck said. North Island experienced positive net income January and February, and plans to have positive income again in April. The credit union also adds about 750 to 800 members per month, Beck said. North Island has $1.5 billion in assets and 98,000 members.

CU rewards members by planting trees

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DENVER (4/22/09)--Bellco CU has partnered with PayItGreen, which will reward members who use online banking by planting a tree in their honor. “Bellco CU and its employees are committed to constantly identifying positive ways in which we can preserve the environment,” said Laura Higgins, Bellco director of marketing. Consumers who receive electronic bills and statements and who pay electronically can reduce their greenhouse gas emissions by 171 pounds annually, a savings equivalent of:
* Planting two tree seedlings and allowing them to grow for 10 years; * Preserving 24 square feet of forestland; and * Avoiding emissions by not driving 169 miles or consuming 8.8 gallons of gas.
Using electronic bill pay also can guard against identity theft. About 85% of identity theft cases are due to “offline” transactions such as lost checkbooks or stolen bills and statements, Bellco said. Partnering with PayItGreen is just one effort the credit union has undertaken to become more environmentally friendly. Bellco has a comprehensive recycling program, renovated its Greenwood Village branch with motion senor light switches, owns two Priuses, and distributed free compact fluorescent bulbs to employees. It also has 36,000 members who use e-statements instead of paper, the credit union said. Bellco, headquartered in Greenwood Village, Colo., has $2 billion in assets.

Oregon association testifies for financial education

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BEAVERTON, Ore. (4/22/09)--Two bills related to financial literacy were heard simultaneously in the Oregon Capitol during the week of April 13. The Credit Union Association of Oregon (CUAO), along with Carlyn Roy, executive vice president and chief operating officer of OSU FCU, Corvallis, provided testimony in support of the legislation. The bills--Senate Bill 441 and Senate Bill 501--were up for a hearing in the Oregon Senate Education Committee. In March, CUAO and Roy provided testimony in support of SB 501 which would add “finances” to essential learning skills and requires school district to provide curriculum in finances. During the hearing, concerns were raised by the Department of Education and the school lobby. State Sen. Rick Metsger (D-26) introduced an amendment to SB 441 which would basically eliminate the bill, and create a new one with new language. The new bill would define “finances” to mean “curriculum designed to achieve financial literacy and to give students personal financial management skills by teaching the basic principles involved with earning, spending, savings and investing money.” The amendments would require that of the three credits of social sciences needed to obtain an Oregon high school diploma, one-half credit would be in “finances.” In essence, the amendments would add financial education requirements back into the high school diploma requirements. “We support Senator Metsger’s efforts to push Financial Education, and we were pleased to provide testimony during the hearing in support of his amendment to SB441,” said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations.

Invest in America approaching 100000 vehicles sold

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LANSING, Mich. (4/22/09)--The Invest in America credit union member auto discount program is approaching 100,000 in vehicles sold, according to the Michigan Credit Union League. The nearly 100,000 vehicles represent sales through the first three months of 2009. More than 1,300 credit unions nationwide have adopted the program since its inception last fall and have brought $2.1 billion in revenue to General Motors (GM) and Chrysler through the sale of 85,847 vehicles, the league said. About 80% of vehicles sold through Invest in America have been financed through credit unions. This equates to about $1.27 billion in new auto loans, which has raised the credit union market share to 25%, up from 14% this time last year. Credit unions hold about $85 billion in new car loans nationwide. They write about $23 billion in auto loans per year--and about $8.5 billion of that amount finances GM and Chrysler autos. Chrysler is offering $500 rebates on select vehicles which also will be layered on top of its Employee Pricing. GM continues to offer supplier pricing combined with the new “GM Total Confidence” program; the most comprehensive customer protection plan in the industry. GM has also extended its “Invest in America “contract through Dec. 31. CUcorp, the Michigan league’s service corporation and the automakers are working toward extending the “Invest in America” program as a long-term relationship while offering these short-term, special promotions exclusively for credit union members. “The partnership between America’s credit unions and the domestic automakers has been impressive,” said David Adams, CEO of CUcorp. “GM indicated how much the program means to its business by extending the partnership through the end of the year. Chrysler continues to say their credit union rebates are the best deal they offer.” “Credit union members are an increasingly important part of our customer base, and we’re very pleased with the results we’ve seen with ‘Invest in America,’” added Jim Bunnell, GM executive director.

MnCUN elects five incumbents to board

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BLOOMINGTON, Minn. (4/22/09)--The Minnesota Credit Union Network (MnCUN) elected five incumbent representatives to its board of directors during its annual meeting April 17-18. The representatives are:
* Chuck Albrecht, Mid-Minnesota FCU, Baxter; * Jim Carrier, Buckbee-Mears Employees CU, St. Paul; * Nick Meyer, Minnesota Valley FCU, Mankato; * Patrick Pierce, City and County CU, St. Paul; and * Harry Carter, TopLine FCU, Maple Grove.
The board also re-elected table officers for 2009:
* Chairman Carter; * Vice Chairman Kyle Markland, Affinity Plus FCU, St. Paul; and * Treasury/Secretary Pierce.
Kris Mecham, Credit Union National Association chairman, spoke to attendees of the Minnesota Credit Union Network’s annual meeting April 17-18. He encouraged credit unions to act cooperatively to get through tough economic times. (Photo provided by the Minnesota Credit Union Network)
The annual meeting also featured guest speakers Keith Morton, National Credit Union Administration Region IV director, and Kris Mecham, Credit Union National Association board chair. Morton pledged to provide credit unions with open and direct information about the Corporate Stabilization Program. He urged credit unions to promote confidence in the system among, communities, volunteers and employees. “By working together in collaboration, we can get through these tough times,” Morton said. “However, we need to act cooperatively to get through this. “Consumer confidence in credit unions has never been greater--seize that recognition,” Mecham added.

Study Satisfaction with online services improves

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ANN ARBOR, Mich. (4/22/09)--Credit unions considering online financial services may want to take note of a recent study that measured satisfaction with online financial institutions--including credit unions, banks, credit card websites and investment websites. Customer satisfaction improved during the past year, even as the financial sector of the economy deteriorated, according to a report from ForeSee Results and Forbes.com released Tuesday (BusinessWire April 21). The 2009 Online Financial Services Study--which employs the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI)--is the fifth report since the inaugural study in 2003, and shows that despite a weak economy, bank bailouts and tighter credit, financial institutions are using their websites to increase customer loyalty, account activity and positive word of mouth. “It’s not an easy environment for financial institutions to do business. Given all the problems that these companies are having, we might expect satisfaction to slip,” said Larry Freed, president/CEO of ForeSee Results. “But the basic blocking and tackling that these companies are doing online is proving effective. “They don’t need to reinvent the wheel or their website strategy just because the economy is in crisis,” he added. “Focusing on the right fundamentals makes a big difference to the customer experience over time. And it turns out that online satisfaction actually has huge implications for the whole industry.” The improvement for online satisfaction is good news for financial institutions because websites have a large impact on multi-channel operations and future financial success, the study said. Satisfied online customers are more profitable, more loyal, and more likely to engage in positive word of mouth. Highly satisfied customers are significantly more likely than less-satisfied customers to purchase additional services and open more accounts, increasing share of wallet. Also, highly satisfied customers are more likely to increase engagement with the website for information or transactions, introducing cost savings by establishing a user preference for the most efficient service channel. Online financial services companies still have room for improvement. The research identified site performance and functionality as areas where credit unions and banks could maximize return on investment. Functionality and portfolio management are priority areas for investment websites to improve satisfaction, while improving transaction processes and bill-payment features are top priorities for credit card websites.

CU System briefs (04/21/2009)

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* ALBUQUERQUE, N.M. (4/22/09)--The Credit Union Association of New Mexico (CUANM) announced that it has added two new employees: Carey Shorty and Devon Van Hecke. Shorty is the Association Services assistant and will provide clerical assistance and support to staff. Van Hecke joined the CUANM Youth Marketing Team as an operations specialist and staff writer ... * EULESS, Texas (4/22/09)--A man who had one of his arms in a sling and walked with a limp robbed Omni American CU after slipping a note to the teller. He told the teller that he had a gun (Fort Worth Star-Telegram April 20). The man took an undisclosed amount of cash. Police are not sure if the man was disabled or was pretending to be injured, the newspaper said ... * SAN ANTONIO (4/22/09)--San Antonio CU (SACU) reported that it saved more than 1,250 trees by shredding almost 148,000 pounds of paper during a four-hour shred day event held at nine of its branches. More than 2,400 people took advantage of the free service and donated more than $3,500 to benefit San Antonio’s Dress for Success program. Dress for Success is an organization that helps women gain skills to re-enter the workforce. SACU has $2.7 billion in assets ...

Colorado Texas CUs announce merger

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SAN ANTONIO and AURORA, Colo. (4/22/09)--Officials of the San Antonio-based Security Service FCU (SSFCU) announced Monday that it merged with Aurora Catholic Federal CU (ACFCU). Approved by the National Credit Union Administration, the merger became effective March 31. The ACFCU board of directors voted to join operations with SSFCU to provide improved and expanded products and services that would be more accessible to its members in its field of membership--parishioners of Catholic parishes, and schools and organizations that serve Catholic parishioners in Aurora. The ACFCU board concluded that Security Service’s products and services, service delivery channels, and locations would provide its members improved access to financial tools and growth opportunities. SSFCU’s field of membership includes the Denver, Colorado Springs, Pueblo and Corpus Christi Catholic dioceses. SSFCU has more than $5 billion in assets and more than 680,000 members. As a result of the merger, Security Service gained an additional $13.7 million in assets and more than 2,200 members. Security Service also gained a service center with the addition of the former ACFCU location in Aurora, its sixth location in the Denver area. The credit union operates 13 other Colorado locations, including Denver, Pueblo, Colorado Springs and Fountain. Security Service has operations in South Texas with 32 service centers in and around San Antonio and other South Texas areas, including Corpus Christi and the Rio Grande Valley.

West Virginia league elects new officers

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CHARLESTON, W.Va. (4/22/09)--The West Virginia Credit Union League elected Tom Walker as chairman of its board of directors. The elections were conducted following the league's 73rd annual meeting held Saturday in Charleston, W.Va. Walker is a director of Universal FCU in Huntington. He is a 40-year veteran of the credit union movement serving as a volunteer director, and is a retired CUNA Mutual sales representative where he served for 28 years. Other officers elected included:
* First Vice Chairman, Dave Van Middlesworth, Eastern Panhandle FCU, Martinsburg; * Second Vice Chairman, Donna Gordon, Mercer Co. WV FCU, Bluefield; * Treasurer, Doris Cunningham, Members Choice WV FCU, Charleston; and * Secretary, Mike Tucker, West Virginia Central CU, Parkersburg.
Also at the meeting, Kenneth Truax, First Choice Community FCU, Weirton, received the league’s highest annual recognition of a volunteer, the William Bryan Hawkins Award. Receiving the Pacesetter Award was Charlene Gaither, Eastern Panhandle FCU. The award symbolizes excellence among paid credit union staff in West Virginia.

CU System briefs (04/20/2009)

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* SWARTZ CREEK, Mich. (4/21/09)--Two Michigan credit unions are pitching in to help teach money management to local students. Raul Alvarez, marketing director at Financial Plus FCU, Flint, Mich., is helping teach a money management class at Swartz Creek High School (Mlive.com April 14). Security CU, another Flint-based credit union, also sends two staff members once a week to help teach a money course at the GASC Technology Center. Michelle Williams, head teller and Michelle Gauthier, member service representative, have helped the class for three years. A December 2008 law signed by Mich. Gov. Jennifer Granholm allows financial literacy classes to count toward math credits ... * ABILENE, Texas (4/21/09)--Abilene (Texas) Teachers FCU donated $95,000 to the Boys and Girls Club of Abilene this month through donations from members who participated in a holiday “Skip a Payment” program (Abilene Reporter-News April 4). Members were given the option of skipping one or two loan payments during the Christmas season for a fee of $10. The money was then donated to the club. The $233 million-asset Abilene Teachers FCU has given more than $400,000 to the club in the past six years ... * SEATTLE (4/21/09)--Police are looking for a man who dressed as a woman to rob Kitsap County CU April 13. The robber has been dubbed the “Man Hands Bandit” by authorities because of a “Seinfeld” TV episode where the show’s main character, Jerry, dates a woman with “man hands.” The robber wore a black wig, blank pantsuit, white skirt and white shirt. The suspect stole an undetermined amount of cash from the credit union after handing a note to the teller. Kitsap County, Bremerton, Wash., has $781 million in assets ...

Wisconsin league announces new directors

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PEWAUKEE, Wis. (4/21/09)--The Wisconsin Credit Union League’s director elections came to an end after an election season that included a runoff election in Region 5. Newly elected directors include:
* Class A (less than $20 million in assets). Carol Pecsi, First CU, Oak Creek; *Class B ($20 to $100 million in assets). Kimberly Youngblood, Focus CU, Menomonee Falls; * Class C ($100-$500 million in assets). Daryl Gessler, Connexus CU, Wausau; * Class D (over $500 million in assets). Paul Kundert, University of Wisconsin CU, Madison; * Region 1. Kevin Hauser, Westby (Wis.) Co-op CU; * Region 2. Jack Gill, First Community CU of Beloit (Wis.); * Region 3. Jennifer Schilling, Empower CU, Milwaukee; * Region 4. Patrick Lowney, Lakeview CU, Neenah; and * Region 5. Mike Mallow, Sheboygan (Wis.) Area CU.
All nine directors will assume their roles on the league board at its meeting during the 75th annual convention this May.

After attack CU CEO focuses on employee safety

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DURHAM, N.C. (4/21/09)--Martin Eakes, co-founder and CEO of Self-Help CU, Durham, N.C., is focusing on employee safety after he was robbed and severely beaten by four men in a parking garage as he left his Durham, N.C., office Nov. 24. Eakes has credit union employees monitoring downtown Durham parking efforts, and hired an off-duty police officer to make sure Self-Help employees reach their parked vehicles safely (The News & Observer April 18). When Eakes was attacked, he suffered multiple bruises to the head and face, a gash to his forehead that required 15 stitches and a torn bicep (The Herald-Sun Nov. 30). The incident occurred at night as he was about to enter the parking garage used by employees of Self-Help. The men delivered between 20 and 30 blows, targeting Eakes’ head and face. They took his wallet and cell phone. Eakes told the newspaper he did not know the men or whether they were waiting for him in particular. The city-owned parking garage, located in Durham’s center city, has generated several complaints about safety (News Now Dec. 2).

Wash. CUs help senator advance fin-lit bill

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FEDERAL WAY, WASH (4/21/09)--U.S. Sen. Patty Murray (D-Wash.) is touring the state of Washington to advance her Financial and Economic Literacy Improvement Act of 2009--and has asked three credit union executives to help. The executives are: Washington Credit Union League President/CEO John Annaloro, who spoke at Foster High School; Richland-based Gesa CU President/CEO Christina Brown, who appeared in Pasco at Columbia Basin College; and Spokane Teachers CU President/CEO Steven Dahlstrom, the Washington League said. Starting at Tukwila’s Foster High School, Murray traveled the state, speaking to groups about her legislation, which is co-sponsored by Sen. Thad Cochran (R-Miss). The bill aims to promote age-appropriate courses and activities for K-12 students and those attending two- and four-year colleges. The bill also would distribute $250 million per year for five years to states for financial literacy programs at the K-12 level, and at two- and four-year colleges. Washington credit unions are hosting a forum today for teachers to explore, reveal and problem-solve financial issues affecting youth. The forum seeks to develop and implement solutions to meet youth’s financial needs.

Former Iowa league president dies

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DES MOINES, Iowa (4/21/09)--The Iowa Credit Union League announced that Alvin W. (Al) Jordan, former league president/CEO, died April 18 at the age of 101. Jordan committed his life to furthering the credit union movement and lived by the philosophy of “people helping people,” the league said. “Al Jordan was one of the greatest credit union advocates in the 20th century,” said Patrick Jury, league president/CEO. “He was the central figure in the development of the Iowa Credit Union League, and our industry mourns his passing.” "Al Jordan had a tremendously positive influence on the careers of many in the credit union movement over his own long and fruitful tenure," said Dan Mica, president/CEO of the Credit Union National Association. "A pioneer for credit unions, he will be much missed--but is certainly appreciated." Jordan’s credit union career spanned seven decades. He served as treasurer of the old Western Union Employees CU from its founding in 1938 until he joined the staff of the league in 1953. While with the credit union he served as vice president of the league board and president of the Central Iowa Chapter of Credit Unions. He started at the league as a special representative, more commonly known in those days as a “field man.” In this position, he helped organize new credit unions and assisted existing credit unions in the area of operations--much as the league’s management consultants do today. When the managing director--the league’s chief executive--resigned in 1953, the board named Jordan temporary managing director. The appointment was made official in 1954, with the title later being changed to president. In the early 1950s, when Jordan took over, the league had only four employees, offered limited services and operated out of rented office quarters. By the time he retired 28 years later, in 1981, the Iowa Credit Union League had emerged as a national leader in the credit union movement, the league said. The National Credit Union Foundation presented Jordan with its highest honor, the Herb Wegner Memorial Award, to recognize his national cooperative leadership. Also, in 1995, the National Cooperative Business Association bestowed Jordan its highest honor by inducting him into its Hall of Fame at the National Press Club in Washington, D.C. More than any other individual, Jordan was responsible for the development of the league’s data processing center. He traveled throughout the state talking to credit union groups, explaining how the center would work and what it would allow credit unions to do. “Al Jordan was a wonderful diplomat because he was the consummate gentleman,” said Tom Griffiths, former league CEO. “His genuine interest in the ideas and requirements of others allowed him to move comfortably and with respect among leaders in highly competitive situations. Today, many of his competitors are only remembering Al as their friend.”

Study Vendor partnerships key to fighting fraud

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BOSTON (4/21/09)--Credit unions plan to increase their efforts to fight fraud, and vendors should work on creating strategic partnerships to present more complete solutions, according to a recent study. Fraud is a serious concern for financial institutions, and credit unions spend millions of dollars each year on solutions to prevent attacks, Boston-based Aite said in its new report, “Fraud Management at Retail Banks and Credit Unions: The Vendor Landscape.” "The sheer number of fraud management vendors used by financial institutions speaks to a lack of ability for any one vendor to address the gamut of fraud management needs," said Nick Holland, senior analyst with Aite Group and author of the report. "Vendors looking at the fraud management landscape for financial institutions should realize that institutions are likely to gravitate to vendors that can provide fewer touchpoints to the overall fraud picture. Vendors should explore strategic partnerships in order to present a more complete offering,” he added. The report is based on a November 2008 survey of executives at 23 of the top 150 U.S. financial institutions. It reveals financial institutions’ perceptions of fraud management technology vendors and ranks vendors in four areas: new account opening fraud detection, ID verification, authentication and ID fraud monitoring; fraud database; enterprise fraud case management; and check fraud detection.

CUs help youth celebrate the magic of saving

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MADISON, Wis. (4/21/09)--Credit unions are helping youth celebrate the “magic of saving” during the Credit Union National Association’s (CUNA) National Credit Union Youth Week, which kicked off Sunday and continues through Saturday.
NuVista FCU, Montrose, Calif., celebrated National Credit Union Youth Week with a pinata at the credit union. The credit union also offered goody bags, a free movie, games, hotdogs and soda for youth. (Photos provided by NuVista FCU)
Youth at NuVista FCU, Montrose, Calif., wore magician’s top hats to celebrate this year’s National Credit Union Youth Week, which is themed, “The Magic of Saving.”
“Youth Week began in 2001 as an opportunity for credit unions across the country to focus on the financial needs of young people and provide financial literacy education,” said CUNA President/CEO Dan Mica. “The Savings Challenge was then added in 2004 as an opportunity to bring youth to the credit union to open new accounts or make deposits into existing accounts.” For the first time, the Savings Challenge will run throughout April. During the challenge, credit unions invite youth to open savings accounts and deposit their money. Ten credit unions also will win $100 each to pass along to their youth. “This year’s theme [The Magic of Saving] celebrates the magic of one of the most basic, albeit most fundamental, pillars to financial independence,” Mica said. “Now more than ever, it is vital that credit unions emphasize the importance of saving to our nation’s youth to build for their future financial health and freedom.” Youth Week activities include:
* Downriver Community FCU, Ecorse, Mich., has rented a bowling alley for an evening and invited youth account holders and their parents. The credit union will offer bowling, a pizza party and prize drawings; * Horizon Community CU, Green Bay, Wis., sent a direct mailing to youth with a list of Youth Week events, a coloring page and an invitation to a magic show. Youth who refer new members under age 18 in April will receive a $5 deposit coupon; * Bell West Community CU, Oak Lawn, Ill., is supplying Thrive by Five materials to parents, which explain the importance of saving to children as young as two years old; * Beaver Valley FCU, Beaver Falls, Pa., set up tables in the lobby with magician’s capes, top hats, gloves and magic wands. On Friday, the credit union will offer refreshments, magic tricks and give away four $100 savings bonds; * First CU, Chandler, Ariz., is offering a “Good Start Guide to Money” to youth and will offer refreshments, gifts and a $5 opening deposit to youth; and * Andrews FCU, Suitland, Md., launched a “Kid$ Boot Camp” which offers products and information that teach money management. Members under age 12 can join the “Cadet$ Club” and 13- to 17-year-olds can join the “Money $quad” with a free checking account, Visa Check Card, and Visa Platinum card.

Filene report examines mortgage risks and rates

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MADISON, Wis. (4/21/09)--Credit unions concerned with mortgage risks and questionable interest rates that are circulating among lenders and borrowers can consult the Filene Research Institute’s latest report. Mortgage Borrower Risk Profiles, Delinquencies and Interest Rates in 2005-2008 reviews demographic information across a surveyed group from the three previous years and provides some findings for credit unions to implement in future operations (LoneStar leaguer April 20). The report is the third in a series of Consumer Finance Research briefs derived from research and discussions from Ohio State University’s Consumer Finance Monthly. The report examined and interpreted findings based on questions, including:
* What might a simplified mortgage pricing model look like? * How do delinquency rates vary across borrowers’ financial characteristics? * How do delinquency rates vary across demographic groups? * Did mortgage pricing based on rising house prices contribute to delinquencies? and * How can both underpriced and overpriced mortgage loans be avoided?
For more information, use the link.

Economy hitting San Diego CUs

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SAN DIEGO (4/20/09)--Credit unions have sidestepped the nation's economic turmoil by "sticking to their knitting of making mortgage, auto, consumer and some business loans at good rates to members," says a San Diego-based newspaper. But now, local credit unions are bracing for stiff winds. Of the 11 largest credit unions in San Diego, three made money in 2008, said the San Diego Union-Tribune (April 17). They were Mission Federal, Pacific Marine and San Diego County CUs. The stiff winds the credit union faces involve the impact of the conservatorship of U.S. Central FCU and Western Corporate FCU (WesCorp) and the assessments to shore up the National Credit Union Share Insurance Fund (NCUSIF) on credit unions in the area. The article noted that California credit unions in particular will be affected. Chris Collver, regulatory and legislative analyst with the California Credit Union League, told the newspaper that WesCorp has about 1,100 cedit union members, with a little less than 500 in California. He also pointed out that credit unions in California and nationwide have near historic levels of capital. The newspaper interviewed North Island Financial CU co-CEO Geri Dillingham and Kim Reedy, chief financial officer and co-CEO, about the assessments the credit union would face due to the corporate stabilization plan's impact on the National Credit Union Share Insurance Fund. Also interviewed was Mary Cunningham, CEO of USA FCU, who noted that without relief from Congress, the credit union would drop from well-capitalized to adequately capitalized because of the assessments to replenish NCUSIF. Marla Shepard, CEO of California Coast CU, noted in the article that her credit union lost $23.7 million last year--its first-ever loss--but it remains well-capitalized. Joseph Schroeder, CEO of San Diego Metropolitan CU, said he is managing growth to start rebuilding the credit union's capital ratio in "the most extraordinary financial event I've ever seen." For the full article, use the resource link.

Illinois league honors CUs individuals

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NAPERVILLE, Ill. (4/20/09)--A number of individuals and credit unions were honored during the Illinois Credit Union League's 79th Annual Convention Friday at its Keynote and Awards Program. Desjardins Youth Financial Education Award first-place winners include:
* Prairie Trail CU, Joliet, in the $35 million-$75 million asset category; * NuMark CU, Joliet, $75 million to $250 million in assets; and * Great Lakes CU, North Chicago, more than $250 million assets.
Dora Maxwell Social Responsibility Award first-place honorees included:
* Rock Valley FCU, $50 million-$100 million assets; * Financial Plus CU, Ottawa, $100 million-$200 million assets; * Scott CU, Collinsville, $200 million-$500 million; and * Consumers Cooperative CU, Waukegan, more than $500 million.
Louise Herring Philosophy in Action Award first-place winners were GCS FCU, Granite City, in the $50 million-$250 million asset category, and Consumers Cooperative CU, in the more than $250 million asset category. Hall of Fame inductees were: James Bright, inducted posthumously as CEO of Scott CU, and William Reidel, retired CEO of Consumers Cooperative CU. Lifetime Achievement Award recipient was Janet Francoeur, CEO of Riverside Community CU, Kankakee. Employee of the Year was Ann O'Neill, executive vice president of Prairie Trail CU, and Volunteer of the Year was Dave Harris, supervisory committee chairman on the board at NuMark CU. The Illinois Credit Union Foundation recognized tribute scholarships in honor of Robert Nelson, board member of Members Choice CU, Peoria, and Vic McCauley, board member of MembersAlliance CU, Rockford. Also recognized posthumously with a memorial ward was Mary Sue Sours, manager of St. John Employees CU, Springfield. Raymond Schulenberg, director of the board of Motorola Employees CU, Schaumburg, received a Perpetual Tribute Award.

Texas CUs OK league dues schedule restated bylaws

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AUSTIN, Texas (4/20/09)--Delegates at the Texas Credit Union League's (TCUL) 75th Annual Membership Meeting Thursday voted in favor of the 2010 league dues schedule and in favor of adopting the league's restated bylaws. They also gave the league board authority to adopt a balanced or a deficit budget (LoneStar Leaguer April 17). Board Secretary/treasurer Jim Minge reported the consolidated 2008 financials reflect a net gain of about $322,000, which, he said, was significant given the punches the economy has taken the past year. He noted the consolidated TCUL, including Credit Union Resources Inc., met the annual budget for 2008 and continued to provide quality services and products. TCUL President/CEO Dick Ensweiler outlined a three-phase plan to reduce expenses while not compromising the integrity of the organization. "Fiscal responsibility has never been more critical than it is today," he told attendees. "With consistent and cautious navigation, we have and will continue to fill our mission to protect credit unions, and promote your growth, unity and strength."

27 New Mexico CUs waive unemployment fees

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SANTE FE, N.M. (4/20/09)--The CU Anytime Network, which has 27 credit unions in New Mexico, is partnering with the state Department of Workforce Solutions to waive ATM surcharge fees on unemployment insurance debit cards. The fee waiver begins today for so-called “foreign transaction fees,” which normally are charged to members for transactions outside their financial institution’s ATM network (Associated Press April 16). CU Anytime will now waive the $1.75 fee for those transactions. However, Bank of America fees still apply to those transactions.

CEOs expect reversal in consumers savings habits

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PLANO, Texas (4/20/09)--Credit union CEOs are expecting their members to respond to economic uncertainties with a sharp reversal in savings habits, according to results of the April 2009 Credit Union CEO Confidence Survey, conducted by Southwest Corporate FCU, Plano, Texas. Share deposit growth expectations for the next six months climbed 15.38 points from the last report, compared with a drop half that size for the previous three quarters combined (LoneStar Leaguer April 17). The share growth barometer offered some hope in an otherwise unenthusiastic economic outlook, said the corporate. Projections for loan demand in six months declined to -3.75 from zero in November, and the overall CEO Confidence Index landed at its lowest level in five years, falling to 7.9 in the April report from 10.5 in November. “Had we not lowered savings rates, share growth was tracking at a 60% increase this year,” said Steve Rasmussen, president of FAA CU, Oklahoma City, Okla. “I expect loan demand to remain steady throughout the year, and possibly increase slightly as a result of indirect lending. We have, however, projected higher delinquencies and charge-offs.” His region of the country is fortunate, compared to some, he acknowledged that members are feeling the pinch. “The general atmosphere is not overly optimistic for 2009. Most members are just looking to get through this year,” he added. More so than in the past, CEOs registered weakening certainty in their own institutions’ financial condition in the April report, lowering marks for their current position by 13 points and for their projected position six months from now by 10 points. CEOs also recorded a further decline in confidence for their members’ current financial condition, with the index falling 3.33 points to -5.37 this quarter. Members’ financial conditions in six months also dipped further into the negative range, to -10.59 in April from -10.46 in November. “Given the current state of affairs, these results are not surprising,” said Brian Turner, Southwest Corporate’s director of advisory services. “Lower market rates and higher loan delinquencies are contributing to lower asset yields and tighter net interest margins. Add to that recent and pending write-downs associated with the National Credit Union Share Insurance Fund, and you get less-than-stellar optimism. “Share growth is positive, but could be transitional,” Turner added. “Credit unions typically experience the highest concentration of shares during the first quarter, and loans generally half that growth over the next three quarters. Many economists anticipate weak loan demand for 2009, however, so the short-term financial result for some natural person credit unions may be unprecedented. “The good news is that early signs indicate the downward trend in the economy is beginning to slow,” Turner continued. “Many market economists project higher interest rates by the end of this year, which will continue--and possibly accelerate--over the next few years. “Higher interest rates underpin an expectation that the economy will rebound, stronger loan demand will return, and net interest margins will begin to widen. Unfortunately, most credit unions likely will have to wait until 2010 to fully experience that result,” he concluded.

National foundation offers new Innovation Grants

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WASHINGTON (4/20/09)--Credit union organizations now are eligible to apply for new Innovation Grants from the National Credit Union Foundation (NCUF) through June 30. Innovation Grants are aligned with NCUF’s signature program, REAL Solutions. While participation in REAL Solutions is not required to apply for a grant, NCUF is seeking grant applications for innovative projects in any of REAL Solutions’ five service areas:
* Education--Innovation grants assist credit union organizations participating in national financial education programs including Biz Kid$ and the National Endowment for Financial Education. They also support other initiatives consistent with the education components of REAL Solutions: financial counseling, product awareness and staff training. * Transaction Services--The grants support transaction services that help credit unions attract underserved consumers. Examples include check cashing, money orders, prepaid stored value cards, remittances, second chance/fresh start checking, and tax preparation. * Savings--The grants support programs that help credit union members with low wealth establish and maintain savings. Examples include prize-based savings, safe accounts, savings challenges and step-up share certificates. * Credit--The grants support initiatives that help non-prime borrowers build and improve credit through credit unions. Examples include alternative credit reports, citizenship loans, first and last rent loans, flexible loan policies, non-prime used car loans, score builder loans, and thin file loans. * Homeownership--The grants support programs that help credit unions members with lower credit scores qualify as first-time homebuyers. Examples include foreclosure assistance loans, green loans, Home Loan Payment Relief mortgages, Individual Taxpayer ID Number loans, and timely repayment rewards.
Eligible applicants include credit unions, credit union service organizations, state credit union associations, state credit union foundations, and other organizations owned or controlled by credit unions. Applications will not be accepted from organizations outside the credit union movement. “Both our Grants Committee and our Board voted unanimously to narrow the eligibility this year,” explained new NCUF Grants Committee Chairman John Gregoire. “These actions ensure that all Innovation Grant dollars will directly benefit the credit union community.” “Based on what we’re hearing from credit unions that want to apply for grants this year, their needs are greater than ever,” said NCUF Deputy Director Steve Bosack. “We’re fortunate that our foundation is in a strong position to help credit unions reach new members and deliver innovative services.” The grant dollars available will depend on how much credit union organizations invest in the Community Investment Fund.

SECUs VITA tax service sees huge volume hike

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RALEIGH, N.C. (4/20/09)--State Employees’ CU (SECU) of North Carolina reported that its Volunteer Income Tax Assistance (VITA) program staff completed more than 25,000 returns, generating more than $33 million in total refunds during this year’s tax season. Last year, News Now reported that SECU helped 15,000 qualifying individuals claim more than $8 million in tax credits over a three-month span (April 25, 2008). “The dramatic increase in the volume of returns processed through SECU’s VITA program this year is proof of the positive difference SECU is making for North Carolinians,” said Josh Kelly, SECU senior vice president of tax preparation services. About $3.75 million was saved in preparation fees typically charged by for-profit tax preparation services, SECU said. The VITA program also generated $15.7 million in tax credits, including $9.7 million in Earned Income Tax Credits and $5.2 million in Child Tax Credits. SECU offered consumers a tax refund anticipation loan with the VITA program, which saved members $50,000 in interest expense costs, compared with a traditional refund anticipation product. By promoting e-filing and direct deposit, SECU also helped consumers avoid $175,000 in refund anticipation loan costs. All 223 SECU branch locations served as VITA sites, with three credit union staff members trained as VITA preparers at each branch.

CDCUs prepare 3500 tax returns for low-incomers

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NEW YORK (4/20/09)--The National Federation of Community Development Credit Unions worked closely this tax season with 16 credit unions
Members of Santa Cruz (Calif.) Community CU receive free tax preparation services from a credit union volunteer.
to help low-income people across the country file their taxes for free. The coalition--made up of nine credit unions new to the Volunteer Income Tax Assistance (VITA) program and seven with previous experience--prepared more than 3,500 tax returns totaling more than $5 million. The amount includes $2.5 million in Earned Income Tax Credits (EITC). The coalition VITA sites helped residents of low-income communities save nearly $400,000 in tax-preparation fees, said the federation. Coaltion members included: Alternatives FCU, Ithaca, N.Y.; ASI FCU, Harahan, La.; Border FCU, Del Rio, Texas; Communicating Arts CU, Detroit; District Government Employees FCU, Washington, D.C.; El Futuro CU, Porterville, Calif.; Family FCU, Wilmington, Calif.; Halifax County Community FCU, South Boston, Va.; Ka'u FCU, Na'alehu, Hawaii; NRS Community Development FCU, Birmingham, Ala.; OUR FCU, Eugene, Ore.; Santa Cruz (Calif.) Community CU; Tongass FCU, Ketchikan, Alaska; Triumph Baptist FCU, Philadelphia, Pa.; Winthrop (Mass.) FCU; and Women's Southwest FCU, Dallas.
Sharon Saulters, seated, manager of Triumph Baptist FCU, Philadelphia, with her credit union VITA volunteers, from left: Diane Wilson, Hannah Wallace, Deborah Powell and Latasha Foster. (Photos provided by the National Federation of Community Development Credit Unions)
"We commend the Internal Revenue Service (IRS) for recognizing the value of credit union VITA sites and look forward to working closely with them in coming years to help even more low-income people retain their hard-earned cash," said Cliff Rosenthal, federation president/CEO. Many of the credit unions would have been unable to offer the service without support from the IRS, Rosenthal. "These types of programs require significant staff time and many credit unions simply do not have the excess liquidity to support the added expense," he said. The coalition was made possible by a $125,000 grant from the IRS to the federation, the only national tax coalition exclusively representing credit unions. The federation provided technical assistance and financial support to the credit union VITA sites.

CUNA Mutual to Texas CUs Build future with Gen Y

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AUSTIN, Texas (4/20/09)--Credit unions are missing an opportunity to build their future if they aren’t working to attract young members and their business, Kris Wickline, consumer program manager at CUNA Mutual Group, told members of the Texas Credit Union League Thursday. Wickline spoke to a group of credit union leaders during the league’s annual meeting in Austin. Credit unions that ignore this consumer segment do so at their peril, as complacency will result in this generation building relationships with other financial institutions, Wickline said. “You can’t afford to wait until they are the most profitable customer segment or have the most income power,” she said. “By then, they will have established financial relationships, and it will either cost you more to get them or you risk not getting them at all.” Also called Millenials, Generation Next, Generation Net or Gen O, members of Gen Y were born between 1977 and 1995, making them 14 to 32 years old. A close second to Baby Boomers in volume--roughly 76 million in Gen Y to 77 million Boomers--this generation’s income is poised to outpace Boomers’ by roughly $500 million in about eight years. In the meantime, Gen Yers represent the borrowers of the future to credit unions with their peak borrowing years right around the corner. Credit unions have an advantage in seeking to serve Gen Yers financial needs because credit unions are trusted and have experience and a long history of advocacy, which are attractive characteristics to Gen Y, Wickline said. Also, developing a business strategy around this generation isn’t enough; credit unions must turn that strategy into action by appealing to the unique consumer behavior of Gen Y, she added. Wickline said this generation is worth attracting because of three distinct Gen Y characteristics. They are:
* Influential--Since they are early technology adopters, they technologically influence the rest of society, including their Boomer parents; * Active--Gen Y members are active consumers of financial products. They are more likely to experience life events that trigger financial decisions--relocation, marriage, job change; and * Efficient--Because this generation has grown up with technology, they expect immediate action. While some businesses worry about serving this demanding demographic, Gen Y members also are more efficient to serve. They are more likely to transact and serve themselves using the least expensive channels.
“So the question becomes whether you want to spend the money to acquire them now or spend the money trying to woo them away from Bank of America later,” Wickline said. “I can tell you which will cost less.” Serving their basic needs--building or repairing credit, debt management, money management and asset building--will create a more lasting relationship with this generation because it tends to favor one-stop shopping for their financial needs, she added. Wickline outlined five specific identities of this generation to help credit unions develop their plans to attract this demographic, and gave scenarios of how to make plans successful:
* “I expect big things!” Because this generation was raised to believe they were special and could do anything, they come with big expectations. The first big expectation is their education. Wickline cautions not to ignore the significance of student lending in developing a longer-term relationship. * “I connect to transact, communicate and express myself.” This generation doesn’t know life without computers, Internet service or mobile phones. The members spend more time on the Web than watching television and communicate with peers through text messages and social media, including Facebook and MySpace. Because technology pervades every aspect of their lives, developing and maintaining functional websites is critical to attracting and keeping their business. “Make transacting quick and easy while communicating with them simply and where they’re at,” Wickline said. * “I research, seek opinions, buy and leave opinions.” In making buying decisions, they do their own research, but seek reinforcement from family, friends or the institutions selling a product. Wickline suggested credit unions provide user recommendations on their websites to help influence Gen Y decisions regarding financial services. * “I can save the world, for real.” Gen Y was raised with a strong sense of community and taught to think in terms of the greater good. More schools encourage volunteering, supporting the message of social and environmental responsibility and making this generation the most socially conscious consumers to date. Wickline said credit unions should promote their values and community activities, and explore opportunities to either facilitate or engage young adults in community activities. * “I love my helicopter parents.” Wickline reminded the audience of the hovering nature of Boomer parents. Never before has a generation been so nurtured as Gen Y. Given this reality, Wickline said parents can function as both the influencer and the decision-maker with their Gen Y children, depending on the product and consumer’s age. She suggested leveraging marketing, communication and promotional efforts with parents when appropriate.

CU System briefs (04/17/2009)

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* KENNEWICK, Wash. (4/20/09)--A 70-year-old woman has been sentenced to six months in jail and fined $90,000 for stealing $106,000 in 1983 from Tri-City Medical CU and Gesa CU in Kennewick, Wash. Barbara Kurz, who had fled to Arizona under an assumed name and was recently arrested in Mesa, Ariz., pleaded guilty Thursday in Benton County Superior Court. Her jail term was about double the top of the standard range (Seattle Post-Intelligencer and Tri-City Herald April 17). The Medical CU was her own business and she had been a supervisor at Gesa's Kennewick office … * HOUSTON (4/20/09)--Two men pleaded guilty Thursday in a federal court to aggravated robbery of Investex CU, Houston, in November. Dominque Sherrard Ervin and Carl Edward Preston Jr. told the court they worked with credit union employee Dorcell Devon Johnson in planning the holdup, which yielded more than $202,000. They face up to 25 years in prison. During the robbery, Ervin and Preston brandished weapons, pointing them at a security guard, at Johnson, and others, and Ervin fired his weapon. The Federal Bureau of Investigation said that police became suspicious of Johnson when they watched surveillance tapes of the heist because he appeared unafraid during the incident. Johnson is being tried separately (Houston Chronicle via chron.com April 16) … * SANTA ROSA, Calif. (4/20/09)--Redwood CU (RCU) recently sponsored
Click to view larger image Click for larger view
the Cesar Chavez Health Fair in Santa Rosa, an annual event that centers on health education and awareness for families, particularly among the Hispanic community. Volunteers from RCU were on hand to provide information about financial wellness in reducing stress, anxiety and other potential health issues. Rene Meza, branch manager for RCU's Mendocino Avenue branch, noted the $1.8 billion asset credit union has supported the health fair for the past five years. "Our message of financial well-being is particularly relevant in today's challenging economy," Meza said. Here, RCU's mascot, Reddy the Redwood, and staff help entertain children and promote the message that saving is fun. (Photo provided by Redwood CU) … * SOUTHBRIDGE, Mass. (4/20/09)--Southbridge CU has appointed Jeffrey Davenport as president/CEO. Davenport was a director of the Massachusetts Share Insurance Corp. and served as a trustee of the New York Credit Union Foundation. He also is active in community groups. Southbridge is a 71-year-old credit union with more than $166.1 million in assets (Worcester Telegram & Gazette via telegram.com April 12) …

CU System briefs (04/16/2009)

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* HARRISBURG, Pa. (4/17/09)--Hidden River CU, Pottsville, Pa., hosted two separate interviews of candidates for the State House District 124th special election (Life is a Highway April 16). The candidates are Bill Mackey (D), retired pipe-fitter, and Jerry Knowles (R), former aide to then-Rep. David Argall. The seat is vacant because Argall was elected to fill the seat of state Sen. James Rhoads, who was killed in an auto accident last year. Hidden River Board Chairman Charles Lantz, and Christine Seitz, director of political affairs and fundraising for the Pennsylvania Credit Union Association, asked each candidate about their thoughts on regulations imposed on financial institutions and maintaining the credit union tax-exempt status. Other business groups also participated as interviewers … * CLARK, N.J. (4/17/09)--FAA Eastern Region FCU announced that it has changed its name to Aspire FCU to "better reflect who we are now and to achieve a better fit for our future visions," said Thomas J. O'Shea, president/CEO. The credit union was founded 60 years ago by a small group of federal employees involved in aviation, according to the New Jersey Credit Union League. Today the credit union has more than $170 million in assets and serves roughly 200,000 members from 200 select employee groups (The Weekly Exchange April 13) …

Texas league meeting features Fryzel NASCARs Waltrip

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FARMERS BRANCH, Texas (4/17/09)--NASCAR driver Michael Waltrip may be thankful he didn't take his NAPA racing helmet to the Texas Credit Union League's Annual Meeting and Expo this week in Austin because National Credit Union Administration (NCUA) Chair Michael Fryzel joked, "I might need it." It was Fryzel's first public speech since U.S. Central FCU and Western Corporate FCU (WesCorp) were placed into conservatorship in March. Waltrip and Fryzel were keynote speakers, addressing 650 credit union leaders, during the opening general session Wednesday (LoneStar Leaguer April 16). Fryzel called on credit unions to gain legislative support for NCUA's plan to replenish the National Credit Union Share Insurance Fund (NCUSIF). He also described the agency's ongoing efforts to stabilize and improve the corporate network. "To say these are challenging times is an understatement," he said. "But this movement was built by people working together, and by working cooperatively, we will make it stronger." While the movement has been under serious stress due to the corporate dislocations, Fryzel assured attendees that the NCUA has been and will continue to be interested in hearing from any and all responsible voices with ideas on how to mitigate the costs and renew the corporate network. He urged credit unions to roll up their sleeves and use their tradition of grassroots activism to help enact the NCUA bill's plan. Texas league President/CEO Dick Ensweiler noted that credit unions "will continue to work together to mitigate the impact of the corporate stabilization program on credit union bottom lines, including seeking legislation in Congress to spread any costs out over several years." Waltrip told attendees he knew very little about the credit union movement when he was asked to headline the session. He said he was equally impressed with Fryzel's candor, as well as the passion that seems prevalent in those who serve credit unions. "It takes a lot of courage to face challenges head on," Waltrip told the crowd. "But through resilience, the right attitude, confidence and enthusiasm, I firmly believe you can come out ahead."

Irish league Many CUs may forego dividends

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DUBLIN, Ire. (4/17/09)--Although the financial health of Ireland's credit unions is "robust," a number of credit unions will not pay a dividend to members this year because of the poor performance of their investments, according to the Irish League of Credit Unions. League CEO Kieron Brennan said that typically more than half of the country's credit unions pay members a dividend. However, they would have to make substantial writedowns in the year to September 2009 on the value of investment assets, and this would effect dividends (Business and Finance Daily News Service April 16). Still, Brennan described the movement's financial health as "robust," and said there was no danger of credit unions suspending services. Loans by credit unions grew 6.7% to 7 billion euros (US$5.3 billion). The number of loans in arrears rose slightly, with 6.5% of outstanding payments more than 10 weeks late. Savings remained unchanged at 11.9 billion euros ($9 billion) and total assets grew 0.2% to 13.9 billion euros ($10.5 billion).

Warn members about skimmers Grandma its me scams

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MADISON, Wis. (4/17/09)--Credit unions may want to warn their members about two types of scams circulating recently: ATM skimmers and scammers preying on older consumers by posing as a grandchild in trouble. ATM skimmers, which are attached to ATMs or terminals to read unsuspecting consumers' card data as they use the machines, have seen attention the past two weeks. Skimmers at three JPMorgan Chase & Co. ATMs--two Chase-branded ones in New York and a Washington Mutual-banded one in West Hollywood, Calif.--were discovered and reported by consumers using the machines (American Banker April 15). The Chase-branded skimmers mimicked the translucent green material used to make the card slot in the NCR Corp. machines. The one in the WaMu machine was made from opaque gray plastic. Since the cardholder's data personal identification number (PIN) isn't stored in the card's magnetic stripe, the skimmer must be paired with a camera on or near the ATM to record the numbers the consumer types on the keypad. One consumer, who didn't spot the skimmer until his card snagged on it, found a camera behind a mirror stuck on the ATM (Bank Technology News April 13). The latest scam circulating in Ohio is the "Grandma, it's me" scam, says the Ohio Credit Union League (eLumination Newsletter April 15. Scammers call unsuspecting seniors and in a highly excited or anxious voice say, "Hi Grandma/Grandpa, it's me." The senior will reply with the name of their grandchild (for example, "Oh, Johnny, what's wrong?") The scammers pick up on whatever name the victim uses and pretend to be a grandson. The "grandson" claims to be in trouble and needs money wired immediately to bail him out of jail or for a hospital bill. "This is a financially and emotionally devastating scam and has occurred throughout Ohio," said the league. "Routinely educate your staff and members about circulating scams to avoid others falling victim."

Despite economy CUs opening new branches

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MADISON, Wis. (4/17/09)--The economy hasn't dampened some credit unions' plans for expanding. A number have announced new branches recently, despite the recession. Most of the branch openings are the result of long-time planning; others are acquired through mergers. The latest comes from Denver, where Public Service CU (PSCU) has announced it will open two new branches--in Brighton and Greeley. One is the result of an April 1 merger with Brighton Cooperative FCU. The other had been planned for some time. "We are excited to now have the opportunity to serve these two communities," said David Maus, president/CEO of the more-than-$1 billion asset credit union, in a news release (PRNewswire April 16). "It's important to provide people a safe and secure choice in these troubled economic times." Tyndall FCU, Panama City, Fla., announced Wednesday it will expand into Dothan, Ala.--its first physical presence outside of Florida. The $940 million asset credit union had received approval earlier this year from the National Credit Union Administration (NCUA) to expand into Houston County, which includes Dothan and surrounding communities. It now has the ability to serve 10 counties in two states. Tyndall plans to enter the Alabama market with two branches, ATMs and drive-through banking along with its full service website. Its goal is to have the branches operating this summer. The two Dothan branches will join branches in nine Florida cities (WMBB News 13 April 15). Catholic CU, a $169 million asset credit union based in Yakima, Wash., has signed an agreement to open an in-store branch at a new Wal-Mart in West Valley. The new branch will have extended hours, including hours on Saturday (YakimaHerald.com April 16). Texans CU, based in Richardson, Texas, recently held the grand opening of its Carrollton branch, an event that attracted more than 300 people (LoneStar Globe April). In January, the New Mexico Educators FCU opened its 14th branch office to better serve members in Albuquerque's South Valley, according to the Credit Union Association of New Mexico's newsletter, CUANM Network (March). The full-service office replaced a former branch two miles away. It held its grand opening on March 7 with about 300 members and prospective members. Polish & Slavic FCU, based in Brooklyn, N.Y., opened its sixth branch in New Jersey to keep up with members' mobility--many are moving out of the Brooklyn area.. The Trenton branch will serve Central New Jersey and the Philadelphia area. In Franklin, Ohio, MidFirst CU Inc., is opening its first office, a full-service location that will employ five people--in Kettering (tcnewsnet.com April 16). The Kettering office will help MidFirst continue to expand into the Dayton area, James Miles, president/CEO, told the publication. "It's a competitive market," he said, adding the credit union has already developed a strong foothold in

Crains Ohio CUs program a payday loan alternative

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CLEVELAND (4/17/09)--Ohio credit unions' StretchPay program is featured in Crain's Cleveland Business (April 13) as an alternative to payday lenders. "Ohio's credit unions--long considered a conservative bunch--say they are seeing growing interest in their StretchPay program, which is geared to short-term borrowers," said the article. In Northeast Ohio, 11 credit unions offer the program, with terms varying and with an annual rate of 18%. Crain's interviewed three credit unions: TeleCommunity CU, Akron; Community United CU, Strongsville; and Eaton Family CU, Euclid. Veronica Cromer, vice president of lending at TeleCommunity CU, told Crain's there had been a slight increase in business from people who used payday lenders in the past. She added that people don't understand how much payday lenders really cost them. The credit union explains to them how much they're paying when they visit check-cashers. "It's probably five times higher," she said. Julie Gee, CEO of Community United CU, saw a pattern of young adult borrowers making bad financial decisions and wanting to improve their credit. The loans under StretchPay can be used to boost credit ratings, she said. Fred Siegel, marketing manager at Eaton Family CU, said payday lending alternatives still have a long way to go because payday lenders are "still in the game."

CUs fund for fallen policemen prompts hundreds of letters

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PITTSBURGH (4/17/09)--Since three Pittsburgh police officers were fatally shot on April 4, a fund opened by Greater Pittsburgh Police FCU for the victims' families has raised more than $200,000 so far--and generated hundreds of poignant letters. The total doesn't include funds raised at a Penguins game and a Pirates opener. Since the shootings, said Sandy Lazzara, CEO of the $45 million asset credit union, mail carriers have often walked into the credit union and dropped several brick-sized packages of letters on the front counter (Pittsburgh Tribune-Review April 15). The letters, with gifts, cash and checks written out to the Fallen Heroes Fund, started pouring in soon after police officers Eric Kelly, Stephen J. Mayhle and Paul J. Sciullo II were shot in Stanton Heights. Kelly and Sciullo were members of the credit union (See News Now April 8). The letters surprised, shocked, flabbergasted, and pleased Lazzara, she told the newspaper, because police usually aren't seen as heroes. "Our last president told me, "People are always happy to see a firefighter, but they're never happy to see a police officer." The letters come from mostly Western Pennsylvania. But donations have arrived from California, Colorado, Missouri and Texas. Most of them are short. "Thank you," said one. "God Bless you all," said another. Others are longer. One letter was from a couple whose son-in-law is in law enforcement. They knew the dedication and commitment officers make daily, they said. While some checks were for hundreds, others varied. One man couldn't afford to send cash, so he sent Pirates tickets instead. Another contributed money, saying he wanted to send more but he'd been fired from his job. A child sent $5. Another person sent $3, wishing it could be more. The letters are being saved in a large cardboard box. The police have talked about binding the letters into three massive books and presenting them to the families, the article said.

Tippets Rogers inducted into Texas CU Hall of Fame

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FARMERS BRANCH, Texas (4/17/09)--The Texas Credit Union League (TCUL) Wednesday inducted John Tippets, retired CEO of American Airlines FCU, and Bob Rogers, retired CEO of EECU, into the 2009 Texas Credit Union Hall of Fame. Tippets and Rogers, both of Fort Worth, were honored during a special award ceremony at TCUL’s 75th Annual Meeting & Expo, held this week in Austin (LoneStar Leaguer April 16). The awards were initiated in 1998 to honor those in the credit union movement who reflect a history of service to Texas credit unions. Tippets and Rogers were selected for their achievement in their credit union and for achievements benefiting the movement as a whole. Rogers retired from ECCU in 2006 after a credit union career that began more than 30 years ago when he accepted a position with the Texas Credit Union Department. Tippets served at the helm of American Airlines FCU from 1991 to July 2008. Prior to that, he served on its board of directors for eight years. During his tenure as president/CEO at the credit union, American Airlines FCU experienced substantial service innovations, and membership, lending and asset growth.

Florida newspaper notes growing movement toward CUs

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FORT LAUDERDALE, Fla. (4/17/09)--The South Florida Sun-Sentinel noted “a growing movement towards banking with your local credit union” in a Wednesday article about managing credit card debt. When looking out for their financial needs, consumers are turning more to credit unions because they save consumers money, the newspaper said. The savings come through credit cards with lower interest rates. Credit unions’ not-for-profit nature allows them to offer lower rates on cards, which allows consumers to pay back their balances quicker and get out of debt faster--making the cost of credit less expensive, the paper adds. Melina Young and Jamie Chase, co-owners of Credit Union Strategic Planning--set out to see how credit unions nationwide were saving consumers money with balance transfer programs, the paper said. Young and Chase, along with friend Scott Butterfield--a member of the Paragon Group, a planning consultancy that advises credit unions--noted that credit union members were saving an average of $200 monthly by transferring their credit card debt from a big bank to a credit union, the paper said. “I’m really passionate about this,” Chase told the paper. “It’s credit unions helping people to help themselves in desperate times. It’s our chance to do something to make a difference right now, to make life better for our members and neighbors.”

Harvard University CU partner on student loans

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CAMBRIDGE, Mass. (4/17/09)--Harvard University Employees CU (HUECU) announced the launch of a custom loan program with Harvard University that will provide assistance to students at all 13 of the university’s graduate schools. The program--available to domestic and international students--features competitive loan terms and flexible repayment options, HUECU said. “Today’s volatile economic environment has wreaked havoc on many lenders in the private student lending industry, leaving students with little access to fair-value financial aid,” said Gene Foley, HUECU president/ CEO. “But as a not-for-profit credit union that is completely focused on serving the Harvard community, not only are we surviving the current economic downturn, but we are in a position to step up and deliver an even higher level of service to Harvard students at a time of critical need,” Foley added. HUECU developed the custom loan program for Harvard’s graduate students with Credit Union Student Choice, a credit-union-owned organization that offers school-certified private and affordable student lending solutions to more than 50 credit unions. The program provides students with an online application and 24/7 call center support. The objective is to ensure that a Harvard graduate education remains accessible to talented students, said Dan Shore, Harvard’s chief financial officer. “The agreement with the Harvard credit union creates multiple lending options for our students at a time of significant uncertainty in the global credit markets,” he added. The agreement is another example of a credit union leveraging its balance-sheet lending capability to become a strong player in private student lending and deliver superior value to borrowers, according to Jon Jeffreys, president of Credit Union Student Choice. “In America, credit unions were born from the Great Depression and have a philosophy and corresponding business model that can help them weather economic storms,” Jeffreys said. “As balance-sheet lenders, credit unions are much less exposed to liquidity concerns and capital market fluctuations. By using proper risk management and working within the cooperative network provided by Student Choice, it makes them uniquely positioned to redefine value in private student lending.”

Illinois league welcomes two new directors

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NAPERVILLE, Ill. (4/17/09)--Two new directors were sworn in to the Illinois Credit Union League (ICUL) board Thursday by ICUL Chairman John Bratsakis during ICUL's annual Delegates' Meeting.
From left, Kerry Fearn, CEO of Area Educational CU, Mattoon, Ill., and John Hansen, CEO of Rockford Bell CU, Rockford, are sworn in as new directors of the Illinois Credit Union League (ICUL) by league Chairman John Bratsakis during ICUL's Delegates' Meeting Thursday. (Photo provided by the Illinois Credit Union League)
John Hansen, CEO of Rockford Bell CU, Rockford, and Kerry Fearn, CEO of Area Educational CU, Mattoon, are the new directors. Hansen was elected at the Feb. 24 meeting of the Rockford Area Chapter of Credit Unions. Fearn, representing the R.W. Boyle Chapter of Credit Unions, was elected at the Jan. 26 chapter meeting. Their terms began immediately after the meeting. The Delegates' Meeting was part of ICUL's 79th Annual Convention, being held through Saturday in Chicago. Also on Thursday's agenda was the grand opening of the exhibit hall, with nearly 75 vendors. More than 780 individuals from 125 credit unions are attending ICUL's convention, which has a theme of "Shake, Rattle, n' Roll."

Education CU Council elects officers

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SAN DIEGO, Calif. (4/17/09)--Truman Baird of Oregon Community CU, Eugene, Ore., was elected president of the Education Credit Union
Click to view larger image Education Credit Union Council Inc.'s newly elected directors and officers for the 2009/2010 year are, from left: Carol Wagner; Truman Baird, president; Gene Szymczak; Sally Fontenot, secretary; Leo Ditchcreek; Lynn Huether, vice president; and Gerald Martin, treasurer. (Photo provided by the Education Credit Union Council Inc.)
Council Inc. at its 36th Annual Conference in San Diego, Calif. Other officers elected include:
* Vice president, Lynn Huether, Class Act FCU, Louisville, Ky.; * Secretary, Sally Fontenot, Virginia Beach Schools FCU, Virginia Beach, Va.; and * Treasurer, Gerald Martin, The Tennessee CU, Nashville.
Other council board members elected are Leo Ditchcreek, Notre Dame (Ind.) FCU; Eugene Szymczak, Educators CU, Racine, Wis.; and Carol Wagner, Community Schools CU, Muskegon, Mich. Baird is a board member at his credit union and served many years as chairman. He retired after 35 years with the Oregon Department of Higher Education, and has been a credit union volunteer for more than 30 years. He was on the credit committee and the board of the Willamette Chapter of the Credit Union Association of Oregon.

CU dedicates community room to Kanjorksi

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WILKES BARRE, Pa. (4/17/09)--Cross Valley FCU, Wilkes Barre, Pa., recently held a special community room dedication ceremony at its main office to honor U.S. Rep. Paul E. Kanjorski (D-Pa.) as the credit union kicked-off its 40th anniversary.
From left, Len Shimko, president/CEO, Cross Valley FCU; U.S. Rep. Paul Kanjorski; Joseph Shimko, vice chairman; and Al Baloga, board secretary at a ceremony to dedicate Cross Valley FCU’s community room in Kanjorski’s honor. (Photo provided by Pennsylvania Credit Union Association)
Kanjorski was an original co-sponsor of H.R. 1151, also known as the Credit Union Membership Access Act of 1998, as well as the Credit Union Regulatory Improvement Act (CURIA) and the Credit Union Regulatory Relief Act (CURRA) (Life is a Highway April 16). “With great respect for his dedication to the credit union movement, we are delighted to be able to honor Congressman Kanjorski by naming our new community room in his honor,” said Len Shimko, Cross Valley president/CEO. The room will be used for special credit union events, and is open to other local credit unions and organization for training or seminars.

MCUA elects Moeckli as board chair

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JEFFERSON CITY, Mo. (4/17/09)--The Missouri Credit Union Association (MCUA) elected Stanley Moeckli as its new board chair at the MCUA 80th Annual Advocacy and Business Meeting in Jefferson City.
Betty Clark, out-going Missouri Credit Union Association board chair, congratulates Stan Moeckli on his election as new board chair. (Photo provided by Missouri Credit Union Association)
Outgoing board Chair Betty Clark, United CU, Mexico, Mo., officially transferred the job to Moeckli March 31. Moeckli served as president/CEO for three credit unions during his 31-year credit union career, including his current position with St. Louis-based Electro Savings CU. “Having worked in a credit union of under $500,000 as the only employee, I understand the challenges and importance of small credit unions,” said Moeckli. “As a credit union professional and volunteer, I have made a commitment to credit union people and the movement.” Moeckli said there are great challenges on the horizon for credit unions. “The MCUA is the primary source for political action, information and a unifying voice for all the credit unions in Missouri, both big and small,” he said. “In the new reality of a different economic environment, the MCUA must provide leadership and technical support to credit unions. “When credit union people come together we can accomplish amazing things and make remarkable progress toward building even better communities,” Moeckli added. Other newly elected board officers include:
* Dennis Pierce, first vice chair, CommunityAmerica CU, Kansas City; and * Brian Eyestone, second vice chair, Southpointe CU, St. Louis.

Eight cities encourage low-incomers to use FIs

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WASHINGTON (4/16/09)--Eight cities are encouraging low-income consumers to use financial institutions through a Bank on Cities campaign that will include credit unions and banks. The campaign, sponsored by the National League of Cities (NLC) in Washington, D.C., aims to help the 28 million unbanked and 44 million underbanked Americans--who lose $11 billion annually to payday loans (Nation Cities Weekly April 13). NLC’s Institute for Youth, Education, and Families (YEF Institute) selected the cities to participate in a second phase of the campaign, which provides technical assistance for municipal leaders so they can connect low- and moderate-income families with mainstream financial services. The cities are:
* Bryan, Texas; * Denver; * Gaithersburg, Md.; * Indianapolis; * Louisville, Ky.; * Newark, N.J.; * Rapid City, S.D.; and * St. Petersburg, Fla.
Teams from each city will receive assistance from YEF Institute staff and will participate in monthly conference calls, Web seminars and cross-city meetings. Many Americans do not have a credit union or bank account, according to Clifford M. Johnson, YEF Institute executive director. “Because a city’s economic health depends on the financial security of its residents, cities have a lot to gain by partnering with banks and credit unions to expand financial opportunities for families, especially in these uncertain economic times,” he said. John Fischer, assistant director of economic development for the city of Louisville, was recently appointed to oversee the campaign. Fischer said he would like to have all Louisville credit unions and banks involved (The Courier-Journal April 14). The campaign was inspired by a 2006 Bank on San Francisco initiative, which allowed financial institutions in the city to promote low-cost financial products. The program has helped residents open 16,000 accounts at financial institutions. In 2008, the first phase of Bank on Cities assisted 10 cities in developing initiatives to expand access to free and low-cost bank accounts and financial education.

Report 90 breaches compromised 285 million records

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BASKING RIDGE, N.J. (4/16/09)--Financial institutions and other corporations fell victim during 2008 to some of the largest cybercrimes ever, with 285 million compromised records stemming from 90 confirmed data breaches, according to a new study released Wednesday by Verizon Business. More electronic records were breached in 2008 than the previous four years combined. The financial services sector accounted for 93% of all compromised records and 30% of the breaches analyzed, said the "2009 Verizon Business Data Breach Investigations Report." More than 90% of the compromised records saw a strong involvement of organized crime. Most (74%) data breaches were caused by external sources, while 32% were linked to business partners, the study said. Contrary to widely held beliefs that most fraud is from inside, the study found that only 20% of the breaches last year were attributed to insiders. Most breaches resulted from a combination of events rather than a single action, said the study's executive summary. Of the breaches, 64% were by hackers who used a combination of methods. In most successful breaches, the attacker exploited a mistake committed by the victim, hacked into the network and installed malware to collect data from the victim's system. In 68% of the cases, the breach was discovered by third parties. During the past five years, few victims discovered their own breaches, said Verizon. Nearly all records compromised in 2008 were from online assets. Despite concern about desktops, mobile devices and portable media, 99% of all breached records were attributed to compromised servers and applications. In last year's cases, about 20% involved more than one breach. Multiple distinct entities or locations were individually compromised as the result of a single case. Half consisted of interrelated incidents often caused by the same individuals. A staggering 81% of the victims were not compliant with the Payment Card Industry Data Security Standard (PCI-DSS), the study found. What's more, 83% of the attacks were not highly difficult, and 87% were considered avoidable through simple or intermediate controls. In 2008, Verizon said attacks targeting personal identification numbers (PINs) exploded. The big money for cybercriminals is in stealing PIN information with associated credit and debit card accounts. "This report should serve as another wake-up call that good security and a proactive approach are paramount to running a business in this day and age--particularly since the economic crisis is likely to trigger a further increase in criminal activity," said Dr. Peter Tippett, vice president of research and intelligence at Verizon Business Security Solutions. "The financial services firms were singled out and fell victim to some very determined, very sophisticated and, unfortunately, very successful attacks in 2008," he noted. "This report shows it's not about clever or complex security protection measures. It really boils down to ensuring the basics are met from planning to implementation to monitoring the data," Tippett added. Verizon offered several recommendations for businesses:
* Change default credentials often; * Avoid shared credentials; * Review user accounts; * Employ application testing and code review; * Patch comprehensively; * Assure human resources uses effective termination procedures; * Enable application logs and monitor; * Define what's "suspicious" and "anomalous."

Putting members first CU gives branch to another CU

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THREE RIVERS, Calif. (4/16/09)--CEO Paula Estep and the board of directors at Valley Oak CU in Three Rivers, Calif., turned over one of the credit union’s branches to another credit union to ensure its members would continue to be served--and served by the same staff they have come to know. Valley Oak CU’s Madera County branch presented an economic and geographic hurdle for the credit union--it was 65 miles away from the next closest branch. But rather than close the branch, let the staff go, and watch members trickle off to competitors in the area, Estep contacted Hank Barrett, CEO of Modesto, Calif.-based Valley First CU. She asked if his credit union would consider assuming the branch, its employees, and Valley Oak’s Madera-based members. “I have been through a branch closure before, where we just had to pull out of the geographical area,” Estep said. “It was so unpleasant for the membership and the employees. If we were just to pull out, our members would move to a bank. We wanted to keep the credit union industry alive and going. I didn’t even consider [handing over our branch and our members to be] that big of a deal. It just felt like the right thing to do.” Barrett said he was blown away by the request. “To turn over your membership to someone else is truly a testament that you are looking out for your members’ well being,” he said. “I have to take my hat off to Paula for being such a true credit union professional.” Barrett’s board agreed to take over the branch, and a joint letter from the $60.2 million- asset Valley Oak and $296.7 million-asset Valley First was sent to Madera-based members announcing the switch. Estep said members were pleased to find they would still see the same employees they knew. On April 1, Valley First officially moved into the Madera branch. It is now a shared branch through the end of April to allow members to open new Valley First accounts before the branch becomes a part of Valley First. Estep encourages other credit unions to make a similar choice if they can. “Instead of just having those members bleed off and go to competitors in the area, why not keep it in the credit union industry? It’s a win–win for everybody,” she concluded.

ILA TimesI pulls ads for bogus First Star CU

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LOS ANGELES (4/16/09)--The Los Angeles Times has pulled ads for a fake credit union after readers called the newspaper and said they could not access the credit union’s website. Readers also found negative comments about First Star CU online (Los Angeles Times April 15). The address given in the advertisement is the address of a shopping mall, the newspaper said. The Times pulled the ad from its Monday and Tuesday editions. The advertising department “verified that the website was not working and the phone was not working,” newspaper spokesman John Conroy said. Other newspapers also have pulled the advertisement, the Times said. The National Credit Union Administration (NCUA) Wednesday issued an alert about First Star CU and an advance fee loan scam. NCUA encouraged anyone who has been victimized by the loan scam to contact the agency. Friday News Now reported that the Michigan Office of Financial and Insurance Regulation (OFIR) issued a cease-and-desist order against a fake credit union, “First Star CU,” claiming to be a Pennsylvania-based credit union. OFIR said the institution is a fraudulent financial institution. News Now reported this week that the Pennsylvania Department of Banking issued a consumer scam alert about First Star CU. The department warned about an advance fee loan scam after two consumers who applied to First Star and First Star Lending Services for loans were asked to pay several hundred dollars in upfront fees (Life is a Highway April 10). “First Star Lending Services” and “First Star Credit Union,” claim to be located at 1800 Loucks Rd., Suite 850, York, Pa. However, no such address exists there. First Star Lending Services claims to offer first and second mortgages, consumer loans and other financial products, but it is not licensed by the Pennsylvania Department of Banking. There is no First Star CU chartered by state or federal regulators, the department said.

Greylock fights fraud with education technology

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PITTSFIELD, Mass. (4/16/09)--While news of the huge number of records compromised last year by data breaches hits the public, Greylock FCU knows it is playing a leading role in helping Berkshire County, Mass., residents protect their financial information. "In the past three years, as fraud worldwide has increased, we have actually seen a decrease in the impact to our members, thanks to continued education and investments in new technology," said President Angelo Stracuzzi. The Pittsfield, Mass.-based Greylock Federal has invested more than $200,000 in security initiatives, "and we have saved millions of dollars for Greylock and our member/owners, thanks to these measures," said Stracuzzi. Greylock's behind-the-scenes investments include firewalls and other technology. "Every financial institution has to make these investments," Stracuzzi said. "We have never had a breach of our systems, and we take every precaution to protect member information." It has taken several other measures to protect its members' information. For example, it was the first financial institution in Berkshire County to offer license and signature scanning. The scans enable front line staff to prevent impersonators from accessing funds or information. It has more than 52,000 licenses and signatures on file electronically. Also, Greylock Federal posted hundreds of alerts on its websites, published articles in newsletters and held forums about information security. It also produced educational radio ads that air frequently throughout the country. "We have a continuous education program to help our members protect their own information, and it seems to be working," said Marilyn Sperling, senior vice president of member services. "Sadly, there are some people who fall prey to these fraudulent schemes, but the numbers re small and seem to get smaller each time." In addition, the credit union has invested in a 24/7 fraud monitoring service for its Visa credit and debit card holders. The service tracks purchasing patterns and if those patterns change, the service may disrupt a transaction and immediately contact the member directly to verify the legitimacy of the purchase. "It's a great system and has prevented more than $1 million in potential fraud," said Sperling. "When a member is contacted by the monitoring service, it is much different than when these scammers call. The service asks you a series of yes and no questions but does not ask for any account numbers, PINs or security codes. I have been contacted myself, and it works well," she added. The $1.127 billion asset credit union also offers advice to members with tips placed daily in branches, newsletters, Web alerts, radio ads and all other communications channels. The advice is shared here, so credit unions can pass it along to their members. Among the advice:
* If you receive a call, e-mail or Internet inquiry asking for account-specific information, do not respond. Hang up and alert your financial institution as soon as possible. * Watch out for scams that promise something for nothing. If it sounds too good to be true, it is. * Lock up or shred any documents with personal information. * Review your account statements regularly and order a credit report at least once a year. * Never use your Social Security number as a bank account or driver's license number. * Avoid sending checks from your home mailbox. Use a secure U.S. Postal Service mailbox or your credit union's online banking and bill-pay services. * Online, never open links in an e-mail unless you are 100% sure who sent it. It is safer to type in the Web address yourself. Your credit union will never send you an e-mail with a link. * Have your driver's license and signature scanned. That way, no one else can claim to be you.

Moodys adjusts four corporates short-term ratings

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MADISON, Wis. (4/16/09)--Moody’s Investors Service adjusted the short-term ratings of four corporate credit unions Tuesday to Prime-3 from Prime-1. The rating actions affected:
* Members United Corporate FCU, Warrenville, Ill.; * Central Corporate CU, Southfield, Mich.; * Corporate Central CU, Muskego, Wis.; and * SunCorp Corporate CU, Westminster, Colo.
The rating actions reflect Moody’s view that the corporates’ baseline credit assessments, a measure of their stand-alone credit profiles, have weakened. In particular, the eventual impairment of the corporates’ capital investments--member capital shares and paid-in capital--in U.S. Central FCU, and potential losses in their securities portfolios, will lead to capital ratios that are weak and would be inconsistent with an investment grade rating on a stand-alone basis, Moody’s said in a press release. However, Moody's views the probability of external support from both the U.S. government and the credit union network for the corporate credit unions to be high, resulting in significant lift to their short-term ratings, which are Prime-3. The short-term ratings also consider the senior position of debt obligations relative to member shares, which provides substantial added protection for third-party creditors. The Prime-3 ratings and developing outlooks reflect the uncertainty of potential regulatory and/or structural changes to the Corporate Credit Union Network, and the risk that such changes may diminish the relevance of these firms upon the restoration of normal market and economic conditions. In January, the National Credit Union Administration (NCUA) issued an “Advance Notice of Proposed Rulemaking” (ANPR) and request for comment. Under the ANPR, the NCUA sought public comment as to the appropriate business functions, geographic reach, capitalization, permissible investments, risk management and corporate governance of corporates. The NCUA also is considering whether there should continue to be a two-tiered corporate network, which has U.S. Central as the only wholesale credit union in the U.S. Tuesday’s rating actions are consistent with Moody’s recent announcement that it is recalibrating some of the weights and relative importance attached to certain rating factors within its current bank rating methodologies. Capital adequacy, in particular, takes on increasing importance in determining stand-alone ratings in the current environment, Moody’s said.

Arizona Federal to close two more branches

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PHOENIX (4/16/09)--Arizona FCU said Tuesday it expects to close its two Tucson, Ariz., branches on unspecified dates. “When final actions and dates are determined, we will communicate directly with our members,” said Christopher Paterson, the credit union’s community relations manager, in a prepared statement (Tucson Citizen April 14). Arizona FCU, based in Phoenix, has $1.739 billion in assets, with 23 of its 25 branches in the greater Phoenix area, the newspaper said. In February, the credit union announced it closed four branches to deal with a decline in demand for financial services in the economy. At the time, Arizona FCU said a troubled economy contributed to a significant fourth-quarter loss and an undercapitalized position (News Now Feb. 17).

CU System briefs (04/15/2009)

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* ALBUQUERQUE, N.M. (4/16/09)--The New Mexico Credit Union Education Foundation has awarded scholarships totaling $48,600 to 81 students in the state for the 2009-2010 school year. Each student received $600. More than 400 students applied for scholarship, and 41 recipients were re-applicants. Applicants must be residents of the state and meet requirements such as a grade point average and full-time enrollment. The foundation is a scholarship program formed through special legislation that allows credit unions to use abandoned funds for educational or charitable purposes. Since it was established in 1992, the foundation has presented 870 scholarships totaling $430,600 to students attending accredited vocational or technical school, college or university in New Mexico … * PLANO, Texas (4/16/09)--Southwest Corporate FCU has named Jerry Delezen as senior vice president of information technology (IT) and Brad Ganey has senior vice president of payment services, announced John Cassidy, president/CEO. Jody Beck, the former senior vice president of operations, has retired after 32 years with the corporate. Her responsibilities included oversight of both the IT and Payments Services departments. Delezen, with more than 30 years' experience in IT and management, will direct IT department and be responsible for developing, integrating, operating and supporting the corporate's automated systems, databases, and voice and data communications. Ganey will oversee item processing, electronic payments and correspondent services. He is also responsible for support services, remote deposit services, funds transfer operations and ACH, and card services. He has more than 23 years' experience in the financial services industry … * HARRISBURG, Pa. (4/16/09)--Jeannette Rubber FCU has merged with Elliott FCU, effective April 1. Both credit unions are in Jeannette, Pa. According to the Pennsylvania Credit Union Association, the Jeannette Rubber branch was renovated and services expanded. Members of the combined credit union now have three branches for their financial needs (Life is a Highway April 15) … * NEENAH, Wis. (4/16/09)--Evergreen CU is living up to its name, by celebrating Earth Day April 22. The $23.9 million asset credit union is promoting and using environmentally friendly products, such as the scooters from Metro Motorcylces on display in its lobby for its "Wheel Make It Happen" vehicle campaign. Four employees at the credit union have purchased scooters. LaVerne Beyer, aka Mrs. GreenJeans, encouraged youth members in The Seedling Club to turn in an Earth Day coloring picture to claim one of the potted Evergreen Trees pictured. Earth-friendly information and prizes will be part of the Earth Day celebration Wednesday. (Photo provided by Evergreen CU) … * OKLAHOMA CITY, Okla. (4/16/09)--Wanda Prater, who became the first manager of the Department of Public Safety FCU in Oklahoma City in 1958, died at her home April 11. She was 79. Prater worked at the credit union for 35 years. Funeral services were Wednesday (The Oklahoman April 14) …

Illinois leagues 79th convention kicks off today

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NAPERVILLE, Ill. (4/16/09)--More than 700 executives representing 125 credit unions are expected to kick-off the Illinois Credit Union League’s (ICUL) 79th Annual Convention today.
Click to view larger image Click for larger view
The event runs through Saturday in Chicago. It’s theme is “Shake, Rattle n' Roll.” The convention will begin today with the Delegates’ Meeting, which will include the swearing in of two new ICUL directors. The Exhibit Hall Grand Opening, with more than 70 vendors, will follow. During Friday’s keynote--by speaker Al Mosocco of PulseBeat Marketing--and awards ceremony, a number of credit unions and individuals will win accolades for their accomplishments in the past year, including three Hall of Fame inductees, Spirit of Service (Employee of the Year and Volunteer of the Year) recipients, and recipients of the ICU Foundation’s Memorial and Tribute awards. Winners of the state-level Dora Maxwell, Louise Herring, and Desjardins awards and supporters of the Credit Union Political Action Council (CUPAC) also will be recognized.

NBC affiliate discusses using CUs vs. banks

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EVANSVILLE, Ind. (4/15/09)--A local NBC affiliate, 14 WFIE, asks the question, "Should you use a bank or a credit union?" and credit unions received several positive comments. The article quotes Todd Mark with the Consumer Credit Counseling Service, who notes that it’s a fundamental financial decision. He points out that banks are for profit and credit unions are owned by their members. "They're not looking to turn that profit for shareholders. It's going back to you as a member," he said. The station also interviewed credit union members Chasity Crawley, who used her credit union to buy a car because it had a cheaper interest rates, and Birdie Reyes, who said she earns more on her savings accounts. The recent average rate on a bank savings account was 0.36%, while it was 0.54% at credit unions, the station said. The differences add up, especially with big purchases, Mark said. The only positive thing mentioned about banks was convenience in number of branches and ATMs, but the article also pointed out that credit unions are joining ATM networks. For more, use the link.

Former CEO seeks 3M after CUSO deal cancelled

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MILWAUKEE, Wis. (4/15/09)--The former president/CEO of Prime Financial CU, Cudahy, Wis., is seeking nearly $3 million from Guardian CU, West Allis, Wis., in a lawsuit alleging breach of contract stemming from the two credit unions' cancelled merger. Rich Koenig left Prime Financial CU in December. His suit alleges he signed a 10-year contract with Guardian to become its president of consulting service development, where he would run its credit union service organization (The Business Journal of Milwaukee April 10). The credit unions announced in October that they intended to merge (News Now Oct. 10). However, Koenig left Prime Financial in December to pursue other interests, the credit union announced in February. The proposed merger was cancelled in February (News Now Feb. 20). In March, citing management issues, the Wisconsin Office of Credit Unions took control of Prime Financial and dismissed its board of directors (BizTimes.com March 3). Koenig also resigned in December as chairman of Central States Mortgage Co., a mortgage company co-owned by 25 credit unions. Central States closed shop in March and filed for a conservatorship liquidation earlier this month.

Capital CU sets up 500000 endowment fund

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KIMBERLY, Wis. (4/15/09)--Capital CU has created the Capital CU Charitable Giving Fund that is being financed through a $500,000 endowment. The $324.3 million asset, Kimberly, Wis.-based credit union received a $437,000 settlement as part of a class action lawsuit over a contaminated supply and used the money along with another $63,000 that it donated to establish the endowment (The Post-Crescent April 11). The fund is designed as a perpetual endowment fund--which means each year about 5% of the fund will be available for eligible 501(c)3 nonprofit organizations applying for funds, Alan Zierler, Capital president/CEO, told the newspaper. “With the state of the economy, more and more of our friends, neighbors and relatives are facing difficult times,” Zierler told the paper. “The main objective of this fund is to provide for basic needs [food, shelter, clothing and medical care] making a positive impact on many lives.”

CEOs testify for inclusion in NY underserved areas

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ALBANY, N.Y. (4/15/09)--Credit union CEOs from throughout New York State provided testimony on behalf of the Credit Union Association of New York and state credit unions at a series of regional hearings recently held by the state Banking Department. The hearings are part of the department’s review of the Banking Development District Program (BDDP), a program created in 1998 to encourage banks to set up branches in under-banked and underserved areas. Credit unions currently are not included among the financial institutions authorized to participate in the program.
Click to view larger image Linda Levy, CEO, Lower East Side People’s FCU, New York, provides testimony at a public hearing in New York City on the Banking Development District Program.
Linda Levy, CEO, Lower East Side Peoples FCU (LESPFCU), New York, gave testimony last week in New York City at the first hearing. Levy provided an overview of why credit unions are experts in serving low-income and underserved areas, and as such, are uniquely positioned to help the state achieve the goals of the BDDP. LESPFCU was founded in 1986 as a result of the closing of the last commercial bank within a 100-square-block area. The credit union opened with $350,000 in assets. Today it has two branches and has grown to $22 million in assets. “We found a way to serve this underserved community against tremendous odds,” Levy said. “We have over $14 million out in loans for affordable, income- and resale-restricted cooperative apartments, maintaining affordable housing across the five boroughs of New York City. Imagine how much larger we could have been, how many more affordable housing loans we could have made, had we been part of the BBDP.” In the Capital Region and Central New York area, the banking department requested written testimony be submitted. Susan Commanda, CEO, Hudson River Community CU, Corinth, and Ron Ehrenreich, CEO, Cooperative FCU, Syracuse, provided written testimony.
Click to view larger image In Buffalo, the New York State Banking Department listens to testimony on the Banking Development District Program from Al Frosolone, CEO, Niagara’s Choice FCU, Niagara Falls. (Photos provided by the Credit Union Association of New York)
Al Frosolone, CEO of Niagara’s Choice FCU, Niagara Falls, gave his testimony at a hearing Monday in Buffalo. “Membership in state and federal credit unions in New York is limited by law,” Frosolone said. “It may be based upon a common employer, association, school, union, or community. This local-ownership component created another aspect to their mission--namely reinvesting in and the betterment of local communities they serve. “Credit unions can also provide benefits to the state’s municipalities,” he continued. “By enabling credit unions to participate in the BDDP, municipalities have the option to invest in not-for-profit financial institutions that keep investments local. In turn, the municipal deposits would be used to provide much-needed lending capital to potential borrowers in the community.” Each representative countered bank arguments that credit unions’ tax-exempt status should keep them out of the program. They testified how, like any other not-for-profit organization, credit unions do not pay income tax because they have no income to tax. Credit unions do pay income tax, and members pay tax on any dividends they receive. They also pointed out that since 2002, about 131 underserved (low-income) areas have been added to the charters of 60 credit unions in the state. Each one of the 131 areas now has a credit union branch where members can get low-cost financial services. Credit unions want to serve more underserved communities, which is why the Credit Union Association of New York supports current legislation sponsored by State Rep. Francine DelMonte (D-Niagara) and State Rep. Hakeem Jeffries (D-Metropolitan)--A.166 and A. 168, respectively. These measures would authorize credit unions to participate in the BDDP.

14 Iowa CUs participate in Money Smart Week

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DES MOINES, Iowa (4/15/09)--Credit unions are among the financial institutions, government agencies, not-for-profit organizations and community groups across Iowa who have banded together to present the second annual Money Smart Week. Money Smart Week is a week of events developed to help central Iowans of all ages better manage their finances, said the Iowa Credit Union League. The Federal Reserve Bank of Chicago and nearly 100 partners will offer more than 95 free financial seminars April 18-25 in Cedar Rapids/Iowa City, greater Des Moines and the Quad Cities. Topics range from financial literacy for youth to retirement planning and investment options for senior citizens. Fourteen events will be sponsored by credit unions:
* Personal Finance Class--Budgeting and Saving, Community lst CU; * CreditAbility: Build a Strong Credit History, Advantage CU; * Build a Basic Budget: The Five-Step Spending Plan, Village CU; * Educational Seminar--Build a Basic Budget, Midland CU; * Starting a Small Business, Community Business Lenders; * Get Your Savings Matched, Affinity CU and the Iowa Credit Union Foundation; * Build A Basic Budget: The Five-Step Spending Plan, Metco CU; * First Time Home Buying Made Easy, Linn Area CU; * Credit Union Basics, Dupaco Community CU; * Cookin' Up a Good Credit Score, Linn Area CU; * Financial Fun and the Family Museum with the Family CU, The Family CU; * Estableciendo Su Futuro Financiero…Establishing Your Financial Future, Ascentra CU; * Retirement Solutions Seminar, Ascentra CU; and * Planning for Retirement, IH Mississippi Valley CU.

CUNA Mutual annual report available online

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MADISON, Wis. (4/15/09)--CUNA Mutual Group’s 2008 Annual Report is available online. The report contains information about CUNA Mutual’s financial strength and how the company is navigating challenging economic times. This is the second consecutive year the report is available exclusively online, saving money and environmental resources. Interactivity is part of the report design, as videos and audio clips allow readers to hear directly from company leaders and customers. CUNA Mutual said it recorded strong revenue growth--6.8%--and overall operating results--a gain of about $151 million--in 2008. For example:
* The company recorded revenue growth of nearly 7% last year and an operating revenue gain of more than $150 million; * Investment losses offset operating earnings as the company recorded a net income loss in 2008; * However, even with investment losses, the company policyholder surplus remains at more than $1.2 billion.
The company’s total asset size was $13.2 billion in 2008. CUNA Mutual’s 2008 operating results remained strong during the current economic downturn, the company said. For example:
* Retention of credit union customers on CUNA Mutual’s core products was 98.2%; * Crop insurance--a new product--delivered $246 million of revenue; * Underwriting was strong across products, including mortgage insurance; and * Product diversification created product resilience.
CUNA Mutual is a provider of financial services to credit unions, their members and customers worldwide. To access the 2008 Annual Report, use the resource link. Readers also can access a printable PDF online.

Single mom gets help restoring burnt home

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SAN ANTONIO (4/15/09)--Security Service FCU helped a single mother qualify for a loan to restore her San Antonio house, which was nearly burned to the ground last June. After the fire, the city was ready to bulldoze the ruins. Elizabeth Llanas would not have qualified for a traditional loan to restore her historic home, built around 1905, said the credit union.
Click to view larger image Elizabeth Llanas points to where the fire that nearly burned her home to the ground started and what’s left of her son’s room. Security Service FCU was part of a community effort to help her rebuild the historic home. (Photo provided by Security Service FCU)
However, through an ongoing partnership between Security Service FCU and Neighborhood Housing Services (NHS) of San Antonio, the credit union was able to provide the first loan on the home, with NHS providing the second lien and construction management services. “Because Security Service FCU is a completely local institution with a membership and depositor base that is ‘puro San Antonio,’ they saw the whole picture of the proposed transaction clearly,” said Robert Jodon, NHS executive director. “Because Security Service’s lending is local, loan products are designed to match local market conditions and characteristics. “So instead of being frozen within the general malaise of the mortgage market place, Security Service was nimble and able to step to the fore when we needed them,” he added. At a groundbreaking ceremony held April 8, San Antonio Councilwoman Mary Alice Cisneros was joined by architect Jose Garcia de Lara, who provided pro bono services to Llanas. Also present was Keith Sultemeier, Security Service chief financial officer. “We are honored to be able to participate in this project with NHS,” Sultemeier said. “Liz is a truly remarkable woman, and this is a truly remarkable project. It’s a perfect and encouraging example of a community coming together to support one another.” Security Service FCU, based in San Antonio, has more than $5 billion in assets.

CUs maintain strong presence in auto lending

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ONTARIO, Calif. (4/15/09)--Credit unions continued to maintain a strong market presence in the auto lending arena in the first quarter of this year, with a 24.8% market share in February, according to CUDL. CUDL is a point-of-sale and indirect auto lender for credit unions. It became the third largest lender of auto loans in January, behind Chase Auto Financing and Toyota Financial Services. About 936 U.S. dealerships closed last year due to lack of financing. Lenders who relied on asset-backed securities to make auto loans have run out of funds because there are fewer financing sources, according to Joe James, CUDL market research analyst. Credit unions continue to lend, even though some major lenders do not. Auto loans make up one-third of credit unions’ portfolios, James said. General Motors (GM) and Chrysler were the top cars financed in the first quarter of 2009 on the CUDL platform, at 19% and 18%, respectively. This is because of the Invest in America program, James said. Invest in America is a credit union auto loan discount program that offers incentives to credit union members who buy qualifying GM and Chrysler vehicles. Credit unions have seen an increase in charge-offs and delinquencies, but it’s much lower than that of banks, he added. “Credit unions are still offering low [interest] rates to members,” James said. Loan terms also have shifted. Right now, 60-month loans are the most common for credit unions--a shift from 72 months last year. “Credit union members are seeking shorter terms,” James said.

Still accepting nominations for WYCUP

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MADISON, Wis. (4/15/09)--Alison Carr worked for Point West CU in Portland, Ore., when she was nominated for World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) Scholarship Program in 2006. Being named a winner at first was a surprise to Carr, but no more so than the benefits she realized from receiving one of WOCCU's top honors. “I wasn't listening when my name was first called, but the resulting experience has dramatically changed my life,” said Carr, who now serves as director of learning events for the Credit Union National Association’s Center for Professional Development. “Winning the award was highly emotional for me, and the advantages I've gained in career development have been enormously beneficial.”
Click to view larger image World Council of Credit Unions (WOCCU) Chairman Melvin Edwards (left) and President/CEO Pete Crear (third from left) congratulate 2008 WOCCU Young Credit Union People winners Joe Agro, Anna Corona, Rafal Sokolowski, Nicholas May and Rachel Milan at last year's World CU Conference in Hong Kong. (Photo provided by the World Council of Credit Unions)
WYCUP, open to credit union professionals age 35 and younger as of Jan. 1, is still accepting nominations for the 2009 program. Nominations will be accepted through June 15. Recipients will be recognized at WOCCU's World Credit Union Conference, July 26-29, in Barcelona, Spain. WYCUP is open to individuals who have already made significant contributions to the development of their own credit unions, regional or national credit union systems and have demonstrated the potential to employ their unique talents at the international level. “The WYCUP honor has provided confirmation of my beliefs in the cooperative movement and increased my commitment to my job and to the credit union system,” said 2008 winner Rachel Milan, director of marketing and community investment for Teachers CU, Hamilton, Ontario, Canada. “I have become more confident in my work, which fuels my desire to help our credit union grow during these difficult times.” Nominees also must be sponsored by their credit union or credit union organization to attend WOCCU’s 2009 World Credit Union Conference in Barcelona in July. WOCCU will award the WYCUP scholarship--an all-expense-paid trip to the 2010 World Credit Union Conference--to five recipients at the 2009 conference in Barcelona. All nominees, regardless of award status, will be formally recognized in Barcelona and invited to take part in events organized specifically for participants age 35 and younger, including a special networking session. Conference registrants in this age group also qualify for a discounted registration fee regardless of whether they compete for the scholarship. “If you're passionate about the contribution you make to the credit union movement, you'll find WYCUP a wonderful experience,” Carr said. “You quickly realize we're all unified in the challenges we face. I really appreciate WOCCU's commitment to continue making this opportunity possible.”

Huffington Guess whos a bright spot in banking

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MADISON, Wis. (4/15/09)--Credit unions are a “bright spot on the banking front,” Arianna Huffington wrote on her blog Monday in The Huffington Post (April 13). “They’re lending, their balance sheets are solid, and their capital levels are near record highs,” Huffington added. She also wrote that credit unions are owned by shareholders, put member service ahead of profits and have avoided the subprime loan fiasco. Huffington mentioned on her Facebook page and to her followers on Twitter that she was going to write about credit unions, and asked readers to send in their thoughts. Some reader responses posted on her blog:
* “My own experience suggests that if you are looking for a secure financial institution in these turbulent times, think small and think local ... look for banking and credit institutions that have ties to your community,” a reader wrote about his positive experience going to a credit union. * “A credit union saved me from Bank of America. Every day BoA had a way to take some amount of money from me--every day a fee ranging from 25 cents to 35 dollars. Once I went credit union, transparency came back into my life. I woke up with the same amount of money I went to bed with ... The robbery was over. I will never trust a large bank again.” * “All I can say is that nothing beats the personal attention a credit union offers. It’s the ‘Cheers’ bar where everybody knows your name.” * “My 19-year-old daughter, with no previous credit history, was unable to get a car loan even when she was putting 50% down. Our credit union came through for her.”

Mid-Atlantic CEO named to Primary Financial Co. board

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WESTERVILLE, Ohio (4/15/09)-- Primary Financial Co. LLC, a credit union service organization owned by 27 corporate credit unions, announced that Jay Murray, president/CEO of Mid-Atlantic Corporate FCU, is its newest board member. Murray fills an open seat. His term will expire in 2011. He has been with Mid-Atlantic since 1991, and has been president/CEO since July 2008. At Mid-Atlantic, he served previously as corporate account manager, vice president of member services, and senior vice president and chief operating officer. Murray also sits on the boards of Impel Consulting Group, a credit union consulting company; My CU Services, Mid-Atlantic's electronic bill payment company; and Sollievo Group, Mid-Atlantic's benefits and insurance company. Other directors include: Board Chairman, Lew Lambert, president, Minnesota operations, Members United FCU; Lee Butke, president/CEO of Corporate One FCU; Greg Moore, president/CEO, Georgia Central CU; and Kathy Garner, president, Northwest region, Southwest Corporate FCU. Primary Financial Co. has offices in Westerville, Ohio, and Columbus, Ind. It serves more than 4,000 credit unions throughout the U.S. with more than $9 billion in credit union investments outstanding.

CU System briefs (04/14/2009)

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* RICHARDSON, Texas (4/15/09)--Texans CU announced Tuesday that interim chief executive Mike Sauer has been named president/CEO, effective immediately (The Dallas Morning News April 14). Sauer, a former manufacturing executive, has served on the Richardson, Texas-based credit union's board since 1992. He was chairman of the board between 2002 and 2006. Sauer succeeds David Addison, who stepped down in January after five years. During that time, Texans increased its business lending significantly before the economy hit its slump. As of Dec. 31, Texans' delinquent loans and repossessed real estate amounted to 8.4% of total assets, up from 5.6% as of Sept. 30 … * HIGHTSTOWN, N.J. (4/15/09)--New Jersey credit unions were represented at the ribbon cutting/open house for the district office of U.S. Rep. Leonard Lance (R-N.J.) in Flemington. Lance, a freshman, was named to the House Financial Services Committee, said the league (The Weekly Exchange April 13). Attendees included, from left, Lance; Affinity FCU's Beth Degnan; and New Jersey Credit Union League Director of Government Affairs Chris Abeel.(Photo provided by the New Jersey Credit Union League) … * COLORADO SPRINGS, Colo. (4/15/09)--After Ent FCU relocated its Schriever AFB service center to a larger, more centrally located facility in January, its Schriever location experienced a 229% increase in new accounts and an 80% hike in consumer lending. The credit union opened 47 new accounts in 30 days as a result of its grand opening military appreciation promotion. Katherine Nester, the credit union's Schriever center manager, noted the larger, more convenient center and new drive up ATM offer greater convenience for members on base … * FORT WAYNE, Ind. (4/15/09)--David L. Thieme, 49,former CEO at General CU, Fort Wayne, was charged with one count of fraud against a financial institution for authorizing loans to members that were not paid back, said records filed Monday in Allen Superior Court (The Journal Gazette and News-Sentinel April 14). Thieme, who worked for the credit union for 20 years, became CEO in 2004. He was terminated in April 2008 after three employees reported irregularities in his loan transactions. Authorities say that between May 2004 and April 2008, Thieme allegedly engaged in schemes to conceal loan delinquencies, including modifying loan obligation dates and delaying payment dates. He also allegedly overpaid a member for contracted janitorial services and used the excess payments to reduce the member's loan balance, the records indicated. The credit union lost about $1.6 million, less than 2% of the credit union's assets; however, no member suffered losses because Thieme allegedly misapplied credit union funds, not members' account funds. Within a week of his termination, Thieme paid $800,000 on the loans he oversaw. … * HARRISBURG, Pa. (4/15/09)--TruMark Financial CU's Springfield shared branch scored a perfect 100% during a recent mystery shop. The score is based on branch appearance, signage, teller appearance, and procedures. It was the fourth Pennsylvania shared branch to receive a 100%, said the Pennsylvania Credit Union Association. Mystery shops are conducted at every shared branching location at least once a year (Life is a Highway April 14) … * TAMPA, Fla. (4/15/09)--Cornelius Bryant, 30, of Tampa was sentenced to 22 years in federal prison on charges of bank robbery and violation of a supervised release, according to the U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives. The robbery occurred June 23, 2008, at MidFlorida FCU, Lakeland, Fla. At the time of the robbery, Bryant was serving a term of federal supervised release for a prior bank robbery conviction in 2002 (US Fed News April 11). He was convicted by a jury on Dec. 11. Sentencing was by U.S. District Judge Richard A. Lazzara …

Michigan foundation OKs 5000 grant to BizKid

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LANSING, Mich. (4/14/09)--The Michigan Credit Union Foundation Board of Trustees has approved a $5,000 grant for the PBS Biz Kid$ financial education program as part of the foundation's efforts to support financial literacy programs. "BizKid$ is a quality, worthwhile tool for financial education outreach and something the foundation wanted to support," said Patrick LaPine, executive vice president of the Michigan Credit Union League (Michigan Monitor April 13). The program, underwritten by America's credit unions for the past three years, promotes financial literacy to middle- and high school-age students and is aired in 97% of the U.S. public television market. "In this economy it's imperative to continue to contribute financially to programs that are important in the long-run, and this is an example of something that can be very helpful for credit unions in their financial literacy efforts," LaPine said.

Filene report tracks mortgage risk delinquency rates

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MADISON, Wis. (4/14/09)--The Filene Research Institute has released a research brief, Mortgage Borrower Risk Profiles, Delinquencies, and Interest Rates in 2005-2008, to help assess the three critical issues for both lenders and borrowers. The brief, by Mark C. Meyer, CEO of Filene, and Luis G. Dopico, Macrometrix, provides marketplace analysis of mortgage pricing strategies, a review of delinquency rates across borrower characteristics and demographics from the period's survey data, and concludes with several strategic implications for credit unions. One strategy suggests that credit unions may benefit from studying delinquency rates for mortgages and other loan types using in-house data reflecting their field of membership. For instance, changes in the national unemployment rate may have very different impacts on credit unions servicing federal employees, state employees, private companies, communities or nationwide professional groups affected by each recession in varying degrees. "This type of analysis and data may also be of particular importance when institutions are facing especially large changes in their customer bases--for instance, following a merger, the expansion of a credit union's FOM, or the launch of a new product for a new set of customers," says the report. The report, third in a series of Consumer Finance Research briefs based on information from Ohio State University's Consumer Finance Monthly, explores several research questions:
* What might a simplified mortgage pricing model look like? * How do delinquency rates vary across borrowers' financial characteristics? * How do delinquency rates vary across demographic groups? * Did mortgage pricing based on rising house prices contribute to delinquencies? and * How can both underpriced and overpriced mortgage loans be avoided?
"The ongoing mortgage crisis provides a painful reminder that financial institutions cannot assume that low delinquency rates during economic expansions will continue indefinitely," said Meyer. "As this brief points out, many financial institutions underpriced mortgages in the mid-2000s. The interest rates they charged were not enough to cover eventual loan losses. These mounting losses, and the uncertainty surrounding their eventual size, mean that many financial institutions are now in deep disarray," he said. Meyer noted that the temptation during a housing crisis is to err on the side of extreme safety. Many financial institutions try to avoid underpricing mortgages in the future by charging interest rates that reflect today's delinquency rates, or by rejecting more loan applications altogether. However, credit unions need to approach such measures with caution, and to recognize opportunities to serve members, he said. For more information, use the resource link.

Jamaica CUs studying development banks fee proposal

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KINGSTON, Jamaica (4/14/09)--Jamaican credit unions are studying a proposal offered by the Development Bank of Jamaica (DBJ), which refused their request to increase loan spread and instead proposed credit unions raise their fees on the loans. Jamaica Cooperative Credit Union League General Manager Glenworth Francis said the issue is not settled (Jamaica Gleaner Online April 12). DBJ distributes loan capital through approved financial institutions and stipulates that the interest rate to end users can be no more than 3% higher than its rate to the institutions. Credit unions, however, say they need about an 8% spread; otherwise it is unprofitable to distribute the DBJ funds. Instead of raising the spread, DBJ proposed that credit unions add fees to the loans to cover their costs. Discussions about the spread surfaced last year when credit unions began opting out of a $1 billion program to funnel funds to small- and medium-size enterprises, saying the cost to administer the funds were 5% higher than the allowed spread, according to the article.

Tax credit packs CUs homebuyer seminars

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MADISON, Wis. (4/14/09)--UW CU, Madison, Wis., has experienced an increase in participants at its homebuyer seminars, held in conjunction with the local housing authority, because of the government’s $8,000 tax credit for first-time homebuyers. Those attending the seminars want to know how the credit can be used, how they can get the money and if the credit union does anything with it, according to UW CU Director of Mortgage Lending Julio Rios (Wisconsin State Journal April 13). About 700 UW CU members have applied for and received pre-approval for mortgages during the past three months. This figure is twice of what the credit union processed last year at this time and includes many first-time homebuyers, the newspaper said. Taxpayers who purchase their first home before Dec. 1 can receive the credit on their 2008 or 2009 tax returns. The home must be their primary residence for three years after purchase. UW CU has $1.08 billion in assets.

Youth Week begins Sunday

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MADISON, Wis. (4/14/09)--The Credit Union National Association’s (CUNA) National Credit Union Youth Week kicks off Sunday, with more than 400 credit unions signed up for the savings challenge. About 435 credit unions have signed up as of Monday morning, said Lin Standke, CUNA Youth Week manager. The Savings Challenge takes place during Youth Week. During the challenge, youth deposit money into savings accounts at credit unions. Credit unions also can win $100 from CUNA for one of their youth members. Last year, more than 76,500 young members deposited nearly $12 million into their accounts. About 6,748 were new accounts. This year’s Youth Week theme is “The Magic of Saving.” Several credit unions have planned activities:
* Aberdeen Proving Ground (Md.) FCU is hosting a month-long series of promotions for Youth Week. Magicians will appear at the credit union’s branches Saturday, and a “Magic of Saving” contest will run all month long. Members 18 years and younger can participate to win $100 cash or a $250 savings bond; * Marshall (Mich.) Community CU will host a Kids Day event April 18 with a Bike Safety jamboree, a magician, and a presentation on managing money for kids and adults. Youth also can enter contests to receive $50 savings bonds and tickets to local amusement parks and events; * Prime Financial CU, Cudahy, Wis., will host a coloring and essay writing contest. When youth make deposits to their savings accounts, they also will be enrolled to win $100; and * The Michigan House and Senate declared April to be Financial Literacy Month (Michigan Monitor April 6). The Senate resolution was co-sponsored by State Sen. Randy Richardville (R-Monroe) and State Rep. Andy Coulouris (D-Saginaw).
The Michigan Credit Union League’s Financial Literacy Legislative Challenge also is underway and credit unions can partner with a lawmaker in their district to host an education event. The program builds relationships between credit unions and lawmakers through presentations to students or visits to student-run credit union branches (Michigan Monitor April 6). So far, about 18 lawmakers have expressed interest in partnering with a credit union, the league said.

Countys schools transfer summer pay program to CU

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ROCKVILLE, Md. (4/14/09)--Montgomery County (Md.) Public Schools (MCPS) will move its summer pay program, which allows employees to set money aside throughout the school year for summer expenses, to MCT FCU, Rockville, starting next school year, 2009-2010. "This will help the school system save money in administrative costs and enable MCPS employees to earn interest," said Sue DeGraba, MCPS chief financial officer (FOCUS Newsletter April 13). Funds saved through the program will be disbursed to the county schools' employees during the summer of 2010 in five equal payments on July 2, July 17, July 31, Aug. 14 and Aug. 28. The payment schedule mirrors the credit union's current summer pay program payout schedule, said the Maryland and District of Columbia Credit Union Association. MCT FCU's summer pay program is similar to the county schools' program in that it allows employees to deduct as much as they wish from each paycheck during the school year. However, MCT offers 2% annual percentage yield on all funds saved through its program, while the current MCPS program doesn't pay interest. Although the school district recommends its employees save through the credit union's program, employees have the option of making summer savings arrangement with any financial institution of their choice.

PSCU Financial Services issues 45.4 M dividend

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ST. PETERSBURG, Fla. (4/14/09)--PSCU Financial Services issued $45.4 million to its member credit unions--the largest dividend ever paid by any credit union service organization, PSCU Financial said. Member-owner credit unions received 85% of the dividend in cash. The distribution included cash dividends of $35 million from the sale of Visa and MasterCard stock. Financial savings of $12.6 million also were passed along throughout 2008, PSCU Financial said. PSCU Financial reported 2008 revenue of $633 million--an increase of 12% over 2007. “The difficult economy can be the perfect storm for our industry,” said David J. Serlo, PSCU president/CEO. “It’s time for credit unions to expand programs and offer new services that drive members to make their credit union their primary financial institution.” PSCU Financial Services provides credit, debit, ATM, prepaid, bill payment, home and mobile banking, lending, collections and contact center solutions.

Chattanooga branch serving Hispanics to close

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CHATTANOOGA, Tenn. (4/14/09)--The economy has taken a toll on a credit union branch that served Hispanics in Highland Park, Chattanooga, Tenn., the past two years. Because of the economy, Holston Methodist FCU, based in Knoxville, will close its Highland Park branch, located in St. Andrews Center, on April 30, officials told the Chattanooga Times Free Press. However, CEO Janet Tidwell said she hopes to consider opening another branch in Chattanooga when the economic situation improves. Most of the branch's 223 accounts and 160 members are Hispanic, Stacy Johnson, member development director of the credit union, told the newspaper. She is also director of La Paz, a neighborhood group. She noted there are ways for the branch's current members to keep their accounts with the credit union, but if they choose to close, the credit union is directing them to other institutions that serve the Latino community. Mike Feely, director of the St. Andrews Center, praised the credit union's excellent service and said he is looking for a credit union or other lender interested in a partnership. For many of the members of the branch, the credit union was their first involvement with a financial institution, Feely said in the article.

GM extends Invest in America to end of year

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PLYMOUTH, Mich. (4/14/09)--General Motors (GM) has expanded its participation in Invest in America until Dec. 31. Previously, GM planned for the promotion to run through the end of March. Invest in America is a credit union auto loan discount program offered by GM and Chrysler. Under the extension, consumers will receive discounts on any eligible new vehicle through the end of the year. “As over 1,200 credit unions continue to promote the ‘Invest in America’ credit union member discounts, the automakers are seeing great results with first-time and returning buyers,” said David Adams, CUCorp CEO. “This is causing them to take this program serious. The contract extension reflects GM’s satisfaction with the program and we continue to hope for a long-term, mutually beneficial partnership between GM and credit unions.” Chrysler is offering a Credit Union Member Cash Discount through June 30. Invest in America launched in December. More than 73,000 vehicles have been sold through the Invest in America program, according to the Invest in America website, lovemycreditunion.org.

CU System briefs (04/13/2009)

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* LYNCHBURG, Va. (4/14/09)--Alcoa Richmond FCU, which served employees of Alcoa in Richmond, Va., has merged with Virginia CU, also based in Richmond. The merger was effective April 1. Members of the $2.1 million asset Alcoa Richmond voted March 6 in favor of the merger after its sponsor company announced it was phasing out its Richmond operations. Virginia CU had assets of nearly $1.7 billion before the merger (Richmond Times-Dispatch … * ST. PAUL, Minn. (4/14/09)--Fort Snelling FCU (FSFCU), Minneapolis, has merged resources with Hiway FCU, a $739.5 million asset credit union in St. Paul. The merger became effective March 31. The combined credit union will retain the Hiway name. Fort Snelling had more than $33.6 million in assets and 5,500 members. "During this time of economic challenge, we looked to align ourselves with another credit union to create a stronger, sustainable financial organization," said Diane Menton, FSFCU president/CEO. She noted its members "will now have access to Hiway's expansive array of products, services and benefits." Hiway President Jeff Schwalen said the credit union "will keep all members up to date on the integration of our organizations through our website, newsletters and by mail." … * MERIDEN, Conn. (4/14/09)--Thirteen credit unions from Connecticut and 10 private businesses participated April 1 in a REAL Solutions Financial Reality Fair for area high schools, held at Central Connecticut State University. More than 200 students from eight high schools went through the paces of making real world financial decisions as independent adults. Students such as those pictured here chose an occupation that interests them and researched their salary, then made living choices in areas such as housing, transportation, food and clothing, insurance, entertainment and other budget categories. "We feel strongly that we have a responsibility to provide financial education," said Andrew Klimkoski, president/CEO of Achieve Financial CU, Berlin, and chairman of the organizing committee. (Photo provided by the Credit Union League of Connecticut) … * HIGHTSTOWN, N.J. (4/14/09)--The New Jersey Credit Union Foundation has granted money to Junior Achievement (JA) to host a JA Day program at Abington Avenue School, Newark on May 28. The one-day event provides elementary school students with the five-lesson JA elementary curriculum, which teaches financial literacy to students. The foundation and JA are seeking credit union staff and volunteers to help bring the program to 10 classes of fourth and fifth graders. Volunteers will be assigned a class and will team up with a local JA staffer to teach the lessons, said the foundation …

Conficker worm has been reprogrammed

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NEW YORK (4/13/09)--The Conficker worm, which infected three million to 12 million computers worldwide, has been reprogrammed to make it stronger while it seeks to control more computers, reported Computerworld Thursday. The worm, dubbed the Internet's No. 1 threat, takes advantage of a vulnerability in Microsoft software that permits it to infect computers forming a huge "botnet" or suite of machines to send spam and attacks against websites. However, the worm needs to receive new instructions to continue attacking. It does this by picking up instructions on a website or by receiving a file over a peer-to-peer network (P2P). The security community had succeeded in hampering Conficker in getting directions via a website, but late last week, researchers at two organizations noted some computers infected with Conficker received a P2P binary file. The new file tells Conficker to contact MySpace.com, MSN.com, eBay.com, CNN.com, and AOL.com. The P2P function indicates more sophistication. The new update, which is programmed to stop running May 3, tells Conficker to contact a domain affiliated with another botnet, called Waledec, which was used to send spam and grew similarly to the Storm worm. Security experts said that indicates the same group is linked to all three botnets. So far, the worm hasn't been used for malicious purposes. The two organizations that discovered the reprogrammed binary update said their findings are preliminary because they're still analyzing the update. Perimeter, a CUNA Strategic Services provider, has a blog about the latest Conficker update. Use the link to read the latest.

Fake CU also prompts alerts in Pennsylvania

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HARRISBURG, Pa. (4/13/09)--The Pennsylvania Department of Banking has issued a consumer scam alert about an entity calling itself "First Star Lending Services" and "First Star Credit Union," believed to be the same entity that received a cease-and-desist order from a Michigan regulator last week. The Pennsylvania department warned about an apparent advance fee loan scam using the names at www.firststarlendingservices.com (Life is a Highway April 10). Two consumers said they applied to the company for loans ranging from $7,000 to $10,000. When they were asked to pay several hundred dollars in upfront fees to receive their loans, they became suspicious and did not send any funds. The companies claim to be located at 1800 Loucks Rd., Suite 850, York, Pa. However, no such address exists there. First Star Lending Services claims to offer first and second mortgages, consumer loans and other financial products, but it is not licensed by the Pennsylvania Department of Banking. There is no First Star CU chartered by state or federal regulators said the department. Friday News Now reported that the Michigan Office of Financial and Insurance Regulation issued a cease-and-desist order against a fake credit union, "Firststar CU," claiming to be a Pennsylvania-based credit union. OFIR said the institution is a fraudulent financial institution (News Now April 10).

Frisco area Internet cell outage closes FIs

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SAN FRANCISCO, Calif. (4/13/09)--Silicon Valley took a hit Thursday when someone severed eight fiber-optic cables, knocking out cell phone, landline and Internet service in a number of areas around San Jose and San Carlos, Calif., and the South County region. The outage affected ATMs, card transactions, police and hospital databases and 911 lines, and brought credit unions and banks operations to a standstill. The outage, which occurred at about 1 a.m. Thursday, affected six AT&T cables, one Sprint Nextel Corp. cable, and Verizon Communications. It was a reminder of how dependent society is on telecommunications. The cables wiped out telecom service to tens of thousands of homes and businesses, hospitals and police stations. Bank and credit union officials said they had to shut down on the advice of police because of a potential difficulty of reaching law enforcement in the event of a robbery. Commonwealth Central CU, based in San Jose, said its Morgan Hill branch was closed. It posted a sign on the door directing members to other branches in San Jose, according to the San Francisco Chronicle (April 10). President/CEO Craig Weber told the newspaper that the credit union has procedures to be able to operate without communication with its host system. "Really, the situation was security for both employees and members," he said. Because of safety concerns, police doubled their number of officers patrolling the streets and set up mobile stations throughout the city of Gilroy and Morgan Hill. Officers personally went into every financial institution in Gilroy (Gilroy Dispatch April 9). South Valley National Bank on First Street had long as security concerns heightened. Because of security system glitches, an inability to call 911 in case of emergency, and inoperable ATMs, bank employees only let one or two people into the building at a time. The event also reduced retailers to cash only transactions, forced students to go without texting, and put the kibosh on online classes. AT&T posted a $100,000 reward for information leading to an arrest but upped the amount to $250,000 when the extent of the problem became evident.

CSMC ex-CEOs CU Fleet files bankruptcy

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MILWAUKEE, Wis. (4/13/09)--CU Fleet, a Wisconsin auto dealership partly owned by the former CEO of Central States Mortgage Co., filed for a Chapter 11 bankruptcy last week, allegedly owing three Wisconsin credit unions at least $2.8 million. The West Allis, Wis.-based dealership was purchased last summer by Richard Jungen, Central States' founder and former CEO, and Thomas Burns. CU Fleet's major secured creditors listed in court filings are Guardian CU, based in West Allis; Prime Financial CU, Cudahy; and Landmark CU, New Berlin. Prime and Guardian are owed at least $800,000, and Landmark is owed at least $2 million, according to court records (Milwaukee Journal Sentinel April 9). The creditors are questioning transactions involving CU Fleet and another dealership, Donald Driver Motors in Campbellsport. Jungen and Green Bay Packers receiver Donald Driver are co-owners of the Driver dealership. Burns is general manager of the Driver dealership, said the Journal Sentinel. CU Fleet's bankruptcy filing is the latest court saga involving Jungen and Central States Mortgage Co., a mortgage company that was 70% owned by credit unions. Last week Central States went into receivership and attorney Michael Polsky was appointed receiver to oversee the mortgage company's liquidation (News Now April 10). Also last week, Central States' parent company, CSMC, dropped a $15 million lawsuit against Jungen and several former CSMC executives over losses the company said it experienced while Jungen was CEO. The suit was dropped "without prejudice," which means it can be brought up again. Last week Bankruptcy Court Judge Pamela Pepper ordered CU Fleet to provide detailed records about its inventory and its more than $200,000 in cash and receivables, said the Journal Sentinel.

Follow ACUC on Twitter during conference

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MADISON, Wis. (4/13/09)--The Credit Union National Association (CUNA) launched a Twitter page for America’s Credit Union Conference and Expo (ACUC) and is offering registrants $200 off if they “tweet” a rule for credit union success. This year’s ACUC will be held in Boston June 21-24 with the theme of “Revolution.” In order to receive the credit, registrants need to tweet their No. 1 rule for revolutionary credit union success. It can be a specific policy or an idea to aspire to, CUNA said. Twitter is a social networking tool where users can provide links and other information through status updates, or “tweets.” Users can “follow” other Twitterers to see their status updates and information. For more information about the ACUC Twitter page, or the ACUC in general, use the links.

Fee-sweep suit settled Illinois CUs get 6.2 million

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SPRINGFIELD, Ill. (4/13/09)--Illinois credit unions will receive a collective $6.2 million in cash and reduced regulatory fees after Illinois Gov. Patrick Quinn signed a bill April 6 that settled a lawsuit the Illinois Credit Union League and other financial industry groups had filed against the former Illinois governor and his administration. The lawsuit involved escalated regulatory fees that credit unions, banks and thrifts in Illinois paid to cover supervisory fees, according to Steve Olson, general counsel for the league. In 2003, former state Gov. Rod Blagojevich raised the fees by 50% for credit unions and 27% for banks in an effort to generate state revenue. He also amended a state law so that it would permit the money generated from the fees to be placed into the state’s revenue funds and used for expenses other than supervision. Credit unions and other state-chartered financial institutions were outraged, Olson said. The regulatory fee arrangement that credit unions and banks had with the state was that they would pay fees to cover supervision--nothing more and nothing less. “Credit unions didn’t want to be used by the state to pay for things not related to credit unions,” Olson told News Now. The Illinois state government also began “sweeping” the money collected from the fees and transferring it into the general revenue fund. The league worked to get credit unions’ escalated fee dropped to 27%, which was what banks were paying, but the institutions were still unhappy. After almost a year of trying to negotiate a compromise, the Illinois league, the Illinois Bankers Association, Community Bankers Association of Illinois and Illinois League of Financial Institutions filed suit against Blagojevich and his administration in December 2004. The plaintiffs argued that the escalated costs breached a pre-existing arrangement the institutions had for supervision fees. In March 2005, the league and its co-plaintiffs were granted an injunction against the state to prohibit further sweeps while the case was being prosecuted. The injunction restricted transfers from the dedicated funds to ordinary and contingent expenses of regulatory supervision. Because credit unions and banks were still paying higher rates, money began to accumulate in the dedicated funds. But the state couldn’t get at the funds due to the injunction--so the state pursued a settlement with the league and co-plaintiffs. A resolution was reached in March 2008. However, the settlement was contingent on legislation because credit union regulatory fees are set by statute. S.B. 2513 was introduced and eventually enacted April 6. The bill, sponsored by Sen. Terry Link and Rep. Joseph Lyons, implements the reduction of regulatory fees going forward. The group is still working on administrative details for how the money will be paid back. The state doesn’t have a protocol in place yet for the payment. About 1,000 entities will receive money, Olson said. Once the payment process is complete, the injunction will be resolved. “We’re 95% there,” Olson said. The process could be done in the next three weeks, he said. “We want to make sure credit unions get their money as quickly as possible,” he said. The largest credit unions could receive up to $260,000 each in a check from the state, and $45,000 a year in reduced fees going forward. The fees are based on asset size. Credit unions are excited about the reduced rate. “It’s not going [determine] the success or fail of the credit union, but it helps,” Olson said. “It’s a fair and reasonable compromise.” Illinois’ current governor, Quinn, understands credit unions, Olson said. Quinn is an active credit union member and has spoken at many Illinois league events. “He is very much a consumer advocate,” Olson said. For that reason, Olson said the league expects the reduced fees to remain in place. The regulatory fees case is unique because it enabled credit unions, banks and thrifts to work together instead of working against each other. “We were able to come together to work in a unified way and that helped us,” Olson said. The cooperation sent a message to the state, Olson said. He noted that the bill enacting the reduced fees passed unanimously. “This has been a long journey,” concluded Illinois league President/CEO Dan Plauda. “The credits paid to credit unions couldn’t come at a better time in light of current economic conditions.”

CU System briefs (04/10/2009)

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* OREM, Utah (4/13/09)--A computer consultant hired to help Family First FCU with computer upgrades has been indicted on one count of bank fraud for stealing $1 million in deposits from the Orem, Utah-based credit union. Zeldon Thomas Morris, 42, was arrested Wednesday. The Federal Bureau of Investigation says he worked with the credit union from June 13, 2008, through mid-January and allegedly used the passwords to create accounts and transfer money to himself. Morris is co-owner of Lee & Morris Enterprises LLC. He was arrested after a business partner became suspicious. Morris faces a potential maximum sentence of 30 years in prison and a $1 million fine (ksl.com April 10) … * SACRAMENTO and SALINAS, Calif. (4/13/09)--The Golden 1 CU, based in Sacramento, has received approval from the California Department of Financial Institutions (DFI) to merge Steinbeck CU, a $50 million asset credit union in Salinas, into its operations. The merger proposal now goes to Steinbeck's members for a vote later this month. It needs a majority vote before the merger can proceed (Sacramento Business Journal April 8). Steinbeck management sought the merger to expand the products and services offered to members at affordable prices. DFI said The Golden 1 filed for the merger March 18 and received approval on March 25. Its CEO, Teresa Halleck told the newspaper that Steinbeck's two branches will be retained … * RALEIGH, N.C. (4/13/09)--State Employees' CU (SECU) has donated a tract of land to the city of Brevard, N.C., to aid in the development of the Davidson River Trail, which connects the local community to the Pisgah National Forest. The trail, designed to join Davidson River Campground and the forest, provides an opportunity for the credit union to give back and help educate others on the amenities in their local state forests, SECU said. Pictured is a sketch of the proposed trail located in front of SECU's Brevard branch. (Photo provided by State Employees' CU) … * NEWPORT NEWS, Va. (4/13/09)--BayPort CU of Newport News, Va., hosted the local community Shred-It Day March 28 at its Hampton and
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Chesapeake branches to raise awareness of identity theft and to assist local foodbanks. The credit union teamed with Wavy TV, Shred-It and ARMA International to sponsor the free service while appealing to participants to donate non-perishable foods to area foodbanks. More than 30,000 pounds of paper was shredded, and regional foodbanks received almost 4,500 pounds of canned goods, plus $350 in donations. The fofbank estimates the event will provide 5,300 meals for local residents in need. (Photo provided by BayPort CU and the Virginia Credit Union League) … * ST. LOUIS (4/13/09)--Five St. Louis credit unions have teamed up to sponsor a cooperative shred day to raise awareness of identity theft. The event is organized by the St. Louis Chapter of Credit Unions. Hosting shred trucks on April 25 with eight drop-off locations will be at Vantage CU, First Community CU, lst Financial FCU, St. Louis Community CU and West Community CU … * BURNSVILLE, Minn. (4/13/09)--USFCU raised $11,222 plus 7,115 pounds of food during its MN FoodShare campaign held throughout
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March. This year's 2009 FoodShare theme emulated the Parker Brothers game, Monopoly. Throughout the month the credit union's 200 employees traveled around the game board as they raised money and collected food. Bill Raker, president/CEO, noted that "even in times of financial difficulty," employees and members "still seek to make a positive impact in our community." In the photo, USFCU employees are shown helping to deliver food donations to the local food shelf. (Photo provided by US FCU) …

IChicago TribuneI Call CU if need cash

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CHICAGO (4/13/09)--The Chicago Tribune advised in an article published Friday that cash-strapped consumers may want to check with their local credit unions to refinance their mortgages and take out cash. The article, “Tips for tapping home equity,” quoted Eric Tyson, personal financial expert and co-author of “Mortgages for Dummies.” He suggested that credit unions may be a good place to find loans. If consumers don’t have access to a credit union through their employee, they are likely to find one in their geographical area. The Tribune suggested visiting the Credit Union National Association’s website, at www.cuna.org, for more information. To read the full article, use the link.

SECU works ahead of curve on reverse mortgages

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RALEIGH, N.C. (4/13/09)--State Employees’ CU (SECU), Raleigh, N.C. is working to provide its members with reverse mortgages that are different from and better than the industry standard. Reverse mortgages are loans against a residence to provide cash to help a homeowner with living expenses--usually in the form of a lump sum or monthly disbursement. Applicants must be 62, use the home as their primary residence, and receive consumer education from a mortgage counselor to quality. SECU’s loan is different than a typical reverse mortgage because it has a fixed interest rate, an origination fee of 1%, no mortgage insurance and no monthly service fees, SECU said. “While this type of loan will not benefit all members, the ones who need this option can rest assured they are getting a product that will not be detrimental to their financial well-being,” said Phil Greer, SECU senior vice president of loan administration. SECU has closed 50 reverse mortgage loans totaling $5 million since August, when the program was introduced. The loan can help with bills, freeing up needed money, said SECU member Oma McKee. “We’ve worked hard all our lives and we have this house, so we might as well let is work for us now,” she said.

CUNA HRTD Council announces exec committee

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MADISON, Wis. (4/13/09)--The CUNA HR/TD Council announced its executive committee and officers during the council’s 15th annual conference April 6-9 in Las Vegas. Jennifer Morse, vice president of human resources, training and development for Empower FCU in Syracuse, N.Y., moved from vice chair to chair. She replaces Kent Streuling, vice president of human resources for America First FCU in Riverdale, Utah, who reached the council’s term limit. Suzanne Oliver, senior vice president of educational services and chief learning officer for Mountain America FCU in West Jordan, Utah, was named the new vice chair. Diana Wozniak, human resource manager for Tampa Bay FCU in Tampa, Fla., is the new secretary/treasurer. One incumbent and one new face were elected to the executive committee. Oliver and newcomer Kathy Spahr, human resources, training and development director for EECU in Jackson, Mich., will both fill three-year terms. Rounding out the board are:
* Jennifer Godel, assistant vice president of human resources and training for Desert Schools FCU, Phoenix; * Michelle Greear, assistant vice president of training and career development for Technology CU, San Jose, Calif.; * Jeffrey Duke, leadership development consultant for BECU, Seattle; * Michael Nicholas, vice president of human resources for United FCU, Buchanan, Mich.; * Robert Davis, senior vice president of human resources for Vystar CU, Jacksonville, Fla.; and * Danielle Brown, senior vice president of operations for the Credit Union Association of Oregon, who serves as the board’s league representative.

Ethical operations critical conference told

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ST. GEORGE’S, Grenada (4/13/09)--Ethical operations are critical to the success of organizations of all sizes and especially credit unions, said Dr. Anthony Emerson, president/CEO of the Credit Union League of Connecticut (CULCT), during a recent leadership conference in Grenada.
Click to view larger image Tillman Thomas, (center) prime minister of Grenada, attended the Co-Operative Credit Union League of Trinidad and Tobago’s annual leadership conference with Connecticut credit union representatives. From left are: Kathy Chartier, Keith Weimert, Carol Bayreuther and Anthony Emerson. (Photo provided by the World Council of Credit Unions)
Firms that don't operate ethically are soon found out and may soon find themselves out of business. “Better to start small than to not start at all. Ethics are a scalable solution that can and should be used by organizations of all sizes,” Emerson said. Emerson and representatives from three Connecticut credit unions participated in the four-day conference as part of CULCT's role as the Credit Union League of Trinidad and Tobago (CCULTT) partner through World Council of Credit Unions' (WOCCU) International Partnerships Program. In addition to Trinidad & Tobago, the conference drew attendees from credit union movements and government offices in Barbados, Grenada, Jamaica, St. Lucia and St. Vincent, including Tillman Thomas, prime minister of Grenada. The April conference came at a crucial time for Caribbean credit unions because they are finding an increasing need to develop new strategies and find new tools to tackle growing economic challenges, Emerson said. “Caribbean credit unions are watching from afar,” Emerson said. “They have seen an uptick in unemployment and delinquencies as the result of declining economies. They are looking for new ideas for growth.” Kathy Chartier, president/CEO of Members CU, Stamford, Conn., also led a session on the importance of engaging the youth market during tough economic times. Prior to the conference, Carol Bayreuther, president/CEO of Hartford (Conn.) Healthcare CU, and representatives from new partner San Fernando Community Credit Co-operative Union Society Ltd., Tobago, met face-to-face for the first time. Keith Weimert, president/CEO of Seasons FCU, Middletown, Conn., attended a branch opening of partner COPOS CU Cooperative Society Ltd., Tobago. Janet Brooks-Duncan, the island's administrator of enterprises and business development, also attended the opening. CULCT and CCULTT have been partnering participants in the WOCCU program since 2001.

IHuffington PostI columnist got loan at CU

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WASHINGTON (4/10/09)--A columnist advocating action to get banks lending again noted in The Huffington Post Thursday that people are still managing to get loans. His example: His wife's loan at Arlington Virginia FCU. "If one could reduce the point of all the massive government planning and intervention and bailouts down to a single pressing need, it's this: We must take action in order to get the banks lending again," wrote Jason Linkins. However, "people are still managing to get loans," he said. Earlier this year, his wife needed a loan to pay for her spring semester tuition. "We went to the Arlington Virgina FCU to get the needed monies. We knew that the terms were good because we'd used them as a lender before, " Linkins wrote. "We knew that they would give us a loan despite the economy, as well. How'd we know that? AVFCU said so, in a television advertisement. It was the first ad I had ever seen for our credit union." Linkins noted that the ad said the same thing that CEO Brenda Turner told members on the credit union's website. "AVFCU remains well capitalized as defined by federal regulations," she wrote, adding there has been no need for a taxpayer bailout. "We have never engaged in subprime mortgage lending or high-risk investments. Because we have no pressure to earn large profits to satisfy greedy shareholders, we have never lost sight of our core purpose--prudently serving the financial needs of our member owners," she wrote. Linkins' column asks a series of questions, including "Were you turned down by a bigger bank before getting a loan with your credit union?" and asks readers to tell about it in 150 words or less.

Michigan fraudster pretending to be CU is closed

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LANSING, Mich. (4/10/09)—The Michigan Office of Financial and Insurance Regulation (OFIR) has slapped a cease-and-desist order on an entity claiming to be a Pennsylvania-based credit union, but which the regulator believes to be a bad actor stealing both money and identities. OFIR alleges that “Firststar CU” is a fraudulent financial institution, which advertised in Michigan newspapers and encouraged customers to apply for loans by providing upfront payments and personal information. It also advertised via a website, which was shut down after OFIR contacted the Web host. The state regulator urged consumers to have personal contact with a financial institution before entering into a business contract. It also recommended that consumers with questions could verify the identity of credit unions, banks and thrifts, through state or federal regulators. The Firststar case represents the second time in less than a month that Michigan's credit union regulator has issued a cease-and-desist order against a fake online credit union. In March, OFIR discovered a bogus credit union called Communal CU of Dearborn after consumers complained about its website. OFIR said that scam artists were promoting the fake credit union on the Internet to consumers looking for a break on a loan or wanting to refinance their mortgage. Consumers told OFIR they were asked to provide two pay stubs, Social Security numbers and bank account numbers, information that could be used for identity theft and unauthorized access to financial and card accounts.

Wharton Digital FCU launch custom international student loans

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PHILADELPHIA (4/10/09)--The Wharton School of the University of Pennsylvania and Digital FCU, Marlborough, Mass., announced a custom loan program to help international students receive funds for school. The loans will cover tuition and living costs at Wharton and will be available to first-year international students for their second year of study. The loans carry no origination fees. Digital FCU developed the program for Wharton’s international MBA students with Credit Union Student Choice, a credit-union owned organization that offers school-certified private student lending solutions to credit unions nationwide. The credit union has a “unique business model that makes it suited to meet the private loan needs of international students,” said James Regan, DCU president/CEO. About 40% of Wharton’s MBA students are international, and the school has 84,000 alumni in 139 countries. The global economic crisis has hurt many financial institutions who traditionally offered private student loans, according to Anjani Jain, vice dean of Wharton’s Graduate Division. News Now reported Jan. 26 that CitiAssist and Sallie Mae international student loan programs had been pulled because of the economic crisis. The article noted that MIT FCU, Cambridge, Mass., started a loan program with Credit Union Student Choice to help students pay for school. Digital FCU has $4 billion in assets.

Central States assigned receiver drops suit

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MILWAUKEE, Wis. (4/10/09)--A Milwaukee judge Tuesday appointed Milwaukee attorney Michael Polsky as receiver to oversee the liquidation of Central States Mortgage Co., and Central States' parent company dropped its $15 million lawsuit against the company's founder. The Wauwatosa, Wis.-based mortgage company, which was 70% owned by credit unions, closed on March 9 and filed for receivership March 27 in Milwaukee County Circuit Court. Its parent company, CSMC Ind., had asked the court to appoint another Milwaukee attorney, Philip Ostroski, as receiver (Milwaukee Journal Sentinel April 7). CSMC filed a notice Tuesday it was dropping its racketeering lawsuit against founder and former CEO Richard Jungen and four other former executives. The company's attorney, David Meany, said Wednesday the action was dropped for now to enable the receivership to proceed. The lawsuit had alleged that Jungen and others used another business called Interim Funding to funnel bad mortgages to Central States, causing a $15 million loss. The dismissal motion was filed "without prejudice," which means CSMC could revive the matter during the receivership case (The Business Journal of Milwaukee April 8). A receivership is a state court proceeding that allows the liquidation of a company in a manner similar to a federal bankruptcy.

WesCorp subs annual meeting forums with town halls

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SAN DIMAS, Calif. (4/10/09)--Western Corporate FCU (WesCorp) announced it had canceled its Future Forum and CFO Forum conferences and will replace its annual meeting with a member "town hall" meeting in another city. The corporate, which federal regulators recently placed into conversatorship, scheduled the member town hall meeting for May 18 at Sheraton Fairplex Hotel, Pomona, Calif. "This year will be a challenging one for credit unions financially, and we have been told by members that their travel budgets have been reduced," said WesCorp in a release on its website. WesCorp will conduct subsequent town hall meetings in the following weeks in various Western states, with details announced as they become available. The corporate told its members the meetings were a chance to meet new CEO Phil Perkins and learn about overall performance from other WesCorp leaders. They also will discuss the economic environment, the likelihood of a recovery in 2009 and WesCorp's position.

IWSJI Banks card fee hike prompts move to CU

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NEW YORK (4/10/09)--Tamara Smith of Burlington, Vt., told The Wall Street Journal Thursday she is opening a new credit card account with a credit union instead of a bank to protect herself from banks’ pursuit of higher interest income. Smith reacted to a Bank of America notice that her 7.9% interest rate would increase to nearly 13% by calling the bank to opt out of the change. That allows her to retain the 7.9% rate, but prevents her from using the card for new purchases, which would trigger the higher rate on her full balance of approximately $2,000. Bank of America recently announced plans to raise interest rates to double-digit levels for credit-card customers who carry a balance every month instead of paying off the card in full. The bank attributed the move to higher costs for offering credit,. Citigroup Inc., J.P. Morgan Chase & Co. and American Express Co. already have implemented similar policies, which typically allow cardholders to opt out of higher rates by ceasing to use the card or closing the account. Financial educators encourage consumers who face increases to pay down balances, but warn against closing accounts because it can negatively impact credit scores, said The Journal. Banks are increasing rates now to avoid new regulatory limits on credit-card increases that take effect in July 2010. Congress is pondering bills containing stronger restrictions with a shorter timeline. Banks have protested those proposals, claiming tighter rules would force them to restrict access to credit and promotional rates.

PCUA REAL Solutions may complement Better Choice program

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HARRISBURG, Pa. (4/10/09)--Leaders from the Pennsylvania Credit Union Association (PCUA) and the state’s Treasury Department recently discussed how the national REAL Solutions program can complement Pennsylvania’s Credit Union Better Choice Program. The REAL Solutions program offered by the National Credit Union Foundation (NCUF) works with state leagues to help credit unions serve people of modest means with products such as alternatives to payday lending, volunteer income tax assistance and home loan payment relief.
Sharing information about AmeriChoice FCU’s student branch at Central Penn College were, from left, Mike Wishnow, Pennsylvania Credit Union Association senior vice president, communications and marketing; Keith Welks, the state’s deputy treasurer; Kim Bindl, AmeriChoice financial literacy manager; Jim Williamson, the state treasury’s director of policy; and Carol Fastrich, AmeriChoice vice president of marketing. (Photo provided by the Pennsylvania Credit Union Association)
The Better Choice program, which grew out of a collaborative effort between PCUA and the Pennsylvania Treasury Department, offers short-term loans that help people make the transition away from high-cost payday loans to fairly priced credit union services. Deputy Treasurer Keith Welks and Director of Policy for Treasury Jim Williamson discussed the complementary programs at a meeting hosted by PCUA (Life is a Highway April 9). Earlier, Treasurer Rob McCord met with members of Pittsburgh FCU in Mount Oliver to learn how Better Choice payday lending alternatives helped them save money. McCord noted that Better Choice loans save borrowers an average of 80 cents in fees and costs per dollar borrowed. A payday loan for $500 typically costs consumers $15 for every $100 borrowed for a two-week term, which adds up to $450 over 90 days. In comparison, a $500 Better Choice loan costs consumers $42.50 for 90 days and leaves them with 10% of the loan, or $50, in a savings account at the end of that term. The list of the 79 credit union participants is on PCUA's website. To date, participating credit unions have made nearly 15,000 loans worth a combined $6.8 million. The Treasury Department’s Welks and Williamson also visited in-school branches operated by Members 1st FCU at Mechanicsburg High School and by AmeriChoice FCU at Central Penn College.

NCUF receives 100000 from Premier Club supporter

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WASHINGTON (4/10/09)--The National Credit Union Foundation (NCUF) has received $100,000 from Fidelity National Information Services, Visa and Card Services for Credit Unions. The group jointly made the donation, and joins four other NCUF 2009 Premier Club supporters. Others include the Credit Union National Association, CUNA Mutual Group, The Corporate Credit Union Network, and jointly: Harland Clarke, CO-Op Financial Services, and Western Corporate FCU. "We've been able to count on CSCU, Visa and Fidelity National each year for their support which is vital during these uncertain economic times," said Steve Delfin, NCUF executive director. "We appreciate their commitment, thank them for their sustaining support, and urge others to follow their example."

CUs can offer better rates than banks on auto loans savings

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DALLAS (4/10/09)--Credit unions can offer their members better rates on savings accounts and auto loans than commercial banks, according to a DFW news story in Dallas. The NBC affiliate compared credit unions with banks to see which is a better deal for consumers. On average, credit unions offer 5.38% interest on four-year auto loans, compared with 6.68% with banks. Credit unions also offer an average of 0.54% return on savings, compared with 0.36% at banks. “The differences may seem small, but can add up,” the news outlet said. DFW advised consumers to get to know someone at their financial institutions so that they can have someone to turn to when they need help. To see the video of the news story, use the link.

CU System briefs (04/09/2009)

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* ALBANY, N.Y. (4/10/09)--Diane LaVigna-Wixted, executive director of the New York Credit Union Foundation, has been appointed to serve on the National Credit Union Foundation's (NCUF) grant committee by NCUF Chairman Allan Kemp McMorris. The committee approves or recommends for approval grant requests and oversees the grants process as well as develops and approves the annual grants portfolio. As part of her duties with the New York foundation, LaVigna-Wixted works with credit unions, schools and community organizations to improve financial literacy. The state foundation also offers financial support to credit unions through four grant-making programs: professional development grants, financial fitness grants, smart money grants and organizational grants. In 2008, it awarded 109 grants totaling $136,102. LaVigna-Wixted is also a volunteer member of the executive committee of the State Credit Union Foundation Network … * HARAHAN, La. (4/10/09)--ASI FCU celebrated the grand opening of its newest branch in Mid-City at an open house March 23. The branch provides full services to the Spanish-speaking residents of New Orleans and to ASI's overall membership (eNews April 8). The Mid-City branch offers both a full-service bilingual branch and Spanish-English materials to the community. City Councilmember Shelley Midura and State Rep. Austin Badon Jr. addressed the crowd. The branch also was welcomed by Darlene Kattan of the Hispanic Chamber of Commerce and Martin Gutierrez of the Catholic Charities and the Hispanic Apostolate of the Archdiocese of New Orleans. (Photo provided by the Louisiana Credit Union League) … * SARASOTA, Fla. (4/10/09)--Sarasota (Fla.) Coastal CU and MidFlorida FCU, Lakeland, announced that they are merging. The new credit union will be called MidFlorida FCU. All Sarasota Coastal employees will be offered jobs with MidFlorida (Herald-Tribune.com April 8). Sarasota Coastal’s branches will be remodeled and staff will be increased at each office. The merger is slated to close June 30. Sarasota Coastal has $224.5 million in assets. MidFlorida has $1.28 billion in assets ... * ODESSA, Texas (4/10/09)--Southwest 66 CU has presented two members with loan forgiveness awards. James Magness of Odessa and Miranda Castilleja won the awards. Magness won $4,988.07 for a loan he’d taken out for home improvement, and Castilleja, a single mother, received $19,687.05 to pay off her auto loan (Odessa American April 8). Southwest 66 has $50 million in assets ... * ATLANTA (4/10/09)--A man who robbed CDC FCU in Atlanta Aug. 23 wearing a Dracula mask and possessing a semi automatic weapon has been sentenced to more than 20 years in prison. Nathaniel Little Jr. of Decatur, Ga., also must pay restitution of $14,669. Little pleaded guilty Nov. 12 to the robbery (AJC.com April 9). Little is accused of robbing the $185 million asset credit union twice--once in August, and once in September ...

Kansas governor signs membership act

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TOPEKA, Kan. (4/10/09)--Kansas Gov. Kathleen Sebelius Wednesday signed into law S.B. 72, which clarifies state credit union membership eligibility components. The bill clarifies that eligibility components--such as family members and volunteers--are protected. These components were only referenced in the grandfathered portion of the statute, and until the act was enacted, it wasn’t clear whether they were allowed. The Kansas Credit Union Association (KCUA) sought the changes to eliminate confusion about Kansas credit unions’ ability to continue serving groups that credit unions have served in the past and to protect their interests. The clarification is important for credit unions’ planning efforts and regulatory purposes, according to Haley DaVee, KCUA director of state legislative and public affairs. “KCUA wanted to make sure there are no misinterpretations of the law and how it should be applied,” she said.

ACH payments top 18.2 billion in 2008

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ORLANDO, Fla. (4/9/09)--The number of automated clearinghouse (ACH) payments in 2008 topped 18.2 billion--a 1.2 billion increase over payments in 2007, reports NACHA-The Electronic Payments Association. More than 15,000 depository financial institutions, including credit unions, originated and received ACH payments last year. NACHA announced the statistics at its PAYMENTS 2009 conference Monday, noting that payments via the ACH Network grew, despite the slower economy. The portion of volume passing through the ACH Operators increased to nearly 15 billion transactions--7.1% more than in 2007. The dollar value of these transactions totaled $29.96 trillion, a 4% increase over 2007's dollar value. Internet-initiated ACH debits rose by 19.7% to nearly 2.1 billion payments. When combined with consumer-initiated credit payments, the dollar value of consumer ACH payments via the Internet totaled $939 billion in 2008. Business-to-business and financial EDI payments saw more than one billion addenda records transmitted last year, a 14.6% increase over 2007. Back office conversion, the newest e-check transaction to be available for the full year, grew by 1.772% in 2008--to nearly 78.5 million payments. The federal government used the ACH Network for more than 30 million direct deposits as part of last year's economic stimulus package. This contributed to a 10.2% growth of federal government ACH payments to 1.145 billion payments in 2008. For more information, use the resource link.

Oprah millionaire contest is a scam

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MADISON, Wis. (4/9/09)--Credit unions should warn their members about a new scam that involves fraudulent e-mails telling recipients they’ve been nominated for the “Oprah Millionaire Contest Show.” Recipients are asked to provide their contact information, including address, telephone phone and e-mail, though no mailing address is provided. Recipients also are told they need to purchase transportation and a ticket to attend the show and complete another contest form with personal questions. The Federal Bureau of Investigations (FBI) warns consumers not to open unsolicited e-mails or embedded links because they may contain viruses or malware. Providing personal information also will compromise one’s identity, the FBI said in a press release.

CU System briefs (04/08/2009)

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* SANTA ROSA, Calif. (4/9/09)--Redwood CU turned off all nonessential lighting during Earth Hour March 28 to join individuals and business worldwide in making a statement about global climate change. Students at Rincon Valley Middle School invited Redwood CU to participate in the event. The $1.8 billion asset credit union has won recognition for sustainable practices from several organizations and in 2008 received silver level Leadership in Energy & Environmental Design (LEED) certification for its administrative offices … * HARBOR, Ore. (4/9/09)--American Airlines’ Sky Radio will feature a segment on Chetco FCU throughout the month of April. The interview with Jason Dias, vice president of creative services, highlights the $357 million asset credit union’s services as well as the difference between banks and credit unions (Oregon Outlook April edition). The interview will reach millions of travelers on American’s domestic and international flights … * MUSKEGON, Mich. (4/9/09)--Dorothy M. Lester announced her retirement as CEO of First General CU at the credit union’s annual meeting in March (Michigan Monitor April 7). Lester’s 48 years of credit union service included leading First General since 1979. During her tenure First General built its main office in Norton Shores, expanded it twice, and opened its first branch in downtown Muskegon. Lester also oversaw mergers with Andaconda CU and Bennett Pump CU. She continues to chair the board of trustees at Muskegon Community College. Assistant Manager Timothy Hichue was promoted to CEO on April 1 … * TAMPA, Fla. (4/9/09)--John W. Thompson Jr., senior vice president of information technology (IT) at GTE FCU, died April 3 in Tampa at age 54. Thompson was responsible for the operation and maintenance of all aspects of the credit union’s network. Thompson was innovative and forward-thinking, according to Barry Artis, vice president of IT communications at GTE FCU. "He was always looking for a way to incorporate new technology into the credit unions," Artis said. Artis has known Thompson for 25 years, according to GTE FCU. Thompson joined GTE FCU in 1991 from Space Coast CU in Melbourne, FL, where he was data processing manager. A memorial service was held in Lithia, Fla. ... * LIVONIA, Mich. (4/9/09)--H. Bernard Vance, a board member at Co-op Services Credit Union, died in March. Vance was involved in the credit union system for 32 years (Michigan Monitor April 7). He joined Co-op in 1976 as a member. He then became chairman of Co-op Services CU’s advisory board in 1980 and joined the board of directors a year later. His board service included working on the planning, delinquent loans, executive and insurance committees. Before his retirement in 1988, Vance worked for Heritage Hospital as director of human resources ...

Florida coalition Front load tax credit for homebuyers

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TALLAHASSEE, Fla. (4/9/09)--The Florida Credit Union League (FCUL) is involved with a coalition that is advocating for the state to allow homebuyers to use a $8,000 tax credit for first-time homeowners as a down payment, a move the group has dubbed as the “Florida Formula.” “Lenders are eager and ready to make mortgage loans, but they can't put down payment money in buyers' hands,” said Andy Price, FCUL senior vice president. “When details of the Florida Formula are crafted, thousands of first-time homebuyers who otherwise would have to wait years to save their down payment money will be able to afford to do it in 2009. That will help them, of course, but it also will help stimulate Florida's sagging economy,” said Price. The federal stimulus bill states that first-time buyers--defined as a person or couple who has not owned a home for at least three years--must complete the closing on their purchase by Dec. 1, 2009, to qualify. The group estimates that 8,000 to 12,000 prospective first-time homebuyers in Florida could benefit if the federal tax-credit stimulus provision were accessed on the front-end. Tens of thousands of single-family homes across Florida are in foreclosure, and Florida currently has a 20-month supply of homes--or more than 300,000 units on the market-- according to the Florida Home Builders Association. The Florida Home Builders Association, Florida Bankers Association and the Florida Association of Realtors also are involved with the initiative.

Survey Most entities dont trust contact data

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MADISON, Wis. (4/9/09)--About one-third of financial institutions admit they do not have an adequate contact data strategy, according to a recent report. Experian’s “Contact Data Management: the Wise Investor” explores the data strategies that financial institutions use to contact members or customers. Experian conducted survey research that included responses from CEOs, vice presidents, directors, managers and administration staff. The information found in the report is relevant to credit unions because credit unions send direct mailings to members--including disclosure forms, loan forms, personal identification numbers and ATM cards. If contact information isn’t correct for a member, a credit union can waste time and money sending materials incorrectly. Experian’s research indicated that 33% of financial institutions don’t have a documented data quality strategy. “Organizations that can’t trust their data should be worried,” the paper said. “Without accurate customer information, effective retention strategies are difficult.” Consumer spending has tightened and organizations are struggling to retain their existing customers. They must understand who their consumers are and how to communicate with them. Recent high profile mergers and acquisitions create overlap of member data that must be consolidate and migrated, Experian said. About 25% of organizations can’t list the top users of their products and services. However, 71% of financial institutions said they plan to invest the same or more in data quality initiatives in the next six months. Pitching to a board for investment is not an easy task, Experian said. The paper provided several ways that credit unions can receive approval from their boards to expand their budgets for better data strategies. “Position data quality as a solid foundation for improving business performance,” said Jonathan Hulford-Funnell, Experian global managing director. “Be careful how you use the term ‘innovation.’ Some senior managers are wary of it as it suggests an element of risk, but when harnessed correctly, it can deliver great results.” The paper also cited a case study that could apply to credit unions involving an e-commerce site. The site was being charged expenses by shippers for providing inaccurate information and incomplete addresses on shipments. After realizing the biggest errors came directly from the consumers, the site deployed an address verification solution, which validated the information upon entry. The software prompted the user for missing information, such as a street number. After one year of using the software, the retailer realized more than $1 million in savings. Customer satisfaction also increased, Experian said.

Oregon to participate in REAL Solutions

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BEAVERTON, Ore. (4/9/09)--The Credit Union Association of Oregon (CUAO) announced that it is participating in the REAL Solutions initiative, which provides credit union services to people in need. Oregon’s participation is underwritten by a grant from the Oregon Credit Union Foundation, CUAO said (Oregon Outlook April). With REAL Solutions, Oregon consumers can gain solid financial footing to remain self-supporting, contributing members of the state’s economy. The program reaches out to people with low or moderate incomes, new Americans, and the unbanked. The service helps increase financial literacy, improve personal finance management, encourage saving, build creditworthiness and improve the financial and economic well-being of communities.

CUs exempt from Ohio cramdown bill

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COLUMBUS, Ohio (4/9/09)--Ohio credit unions are among the key stakeholders who successfully lobbied the Ohio legislature to tone down a proposed bill aimed at reducing mortgage foreclosures. The revised version of House Bill 3 introduced this week still imposes a six-month moratorium on foreclosures, but credit unions and community banks are exempt if they service the loans as part of the local institution’s portfolio. The latest version also reduces common pleas judges’ ability to modify mortgages and takes away judges’ authority to “cramdown” a loan’s principal. Those changes are in line with positions taken by the Ohio Credit Union League, which continues to examine the bill’s impact on credit unions. “We do not believe there should be judicial loan modification,” said league General Counsel John Kozlowski. He said legislators like Rep. Mike Foley, the chairman of the Ohio House of Representatives’ Housing and Urban Revitalization Committee and the bill’s co-sponsor, understand that credit unions already use workouts and modifications to help members stay in their homes. That message was reinforced last week when more than 80 leaders from Ohio credit unions visited the state Capitol to meet with legislators. Kozlowski said mortgage legislation was often the focus during meetings with Rep. Foley and other legislative leaders.

N.Y. CUs advocate on Municipal Deposits Action Day

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ALBANY, N.Y. (4/9/09)--Representatives from New York credit unions and the Credit Union Association of New York met in Albany March 31 for Municipal Deposits Action Day to discuss legislation that would allow municipalities to deposit funds at credit unions.
Click to view larger image New York credit unions and the Credit Union Association of New York met with legislators last month to discuss legislation that would allow credit unions to accept municipal deposits. From left are: William J. Mellin, president/CEO, the association; Steven Kohlman, associate vice president, Teachers FCU, Farmingville; Barry Stilwell, CEO, Canandaigua (N.Y.) FCU; Amy Kramer, vice president, the association’s governmental affairs and Leona Haberstro, association advocacy specialist; Rep. Sam Hoyt (D-Buffalo) and Cheryl Halter, CUANY legislative analyst. (Photo provided by the Credit Union Association of New York)
New York law requires state and local governments to deposit their funds in commercial banks. Two bills--S.1793 and A.4370--in the state’s Senate and Assembly would allow state and federal credit unions, savings and loan institutions and federal savings associations to accept municipal deposits. Two other pieces of legislation, S.717 and A.4319, contain an option in which the local governing body would designate the financial institution by resolution. The option also limits the amount that each financial institution can accept for deposit up to $1 million per municipality. Representatives met with their legislators and reiterated how credit unions play a vital role in the state economy. Credit unions told legislators they are approached by representatives from local fire departments, libraries, schools and villages about deposits. Municipalities facing tight budgets could see financial benefits from working with credit unions and taxpayers’ funds would stay local, the association said.

WSECU Munny Bunny Accounts draw TV coverage

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OLYMPIA, Wash. (4/9/09)--Washington State Employees CU (WSECU) is helping members "recession-proof" their children's futures with a
Click for video Featured on KCTS-TV ‘About the Money’
Click for video Featured on KGO-TV ‘View from the Bay’
new savings account for minors. The Munny Bunny Accounts have drawn coverage on two television stations, says the credit union. The account comes with gifts--a keepsake munny journal and plush munny bunny for ages 12 and under. The munny journal is filled with easy-to-understand information about long-term savings planning to get kids hopping down the money trail to a lifetime of sound money management, said the credit union. "We want all our member moms and dads to start WSECU Munny Bunny savings accounts for their children," said Kristina Walters, WSECU vice president of marketing and business development. "It is more than just cute. The journals are filled with information that educates parents about starting young to save smart." Financial advisor Brad Dugdale created www.munnyjournal.com and partnered with WSECU for distribution throughout Washington state. KGO-TV featured the program on its "View from the Bay" show, and KCTS-TV spotlighted the program on its "About the Money" show.

Southwest Corporate comments on ANPR proposal

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PLANO, Texas (4/8/09)--Southwest Corporate FCU made a number of recommendations in a comment letter to the National Credit Union Administration Board Friday on the Advanced Notice of Proposed Rulemaking for Corporate Credit Unions. NCUA is evaluating corporates' role in the Credit Union System and considering whether to amend the corporate credit union regulation (Part 704) to clarify or revise provisions that include capital, permissible investments, management of credit risk and liquidity, and corporate governance. In the letter, Southwest Corporate President/CEO John Cassidy acknowledged that multiple factors contributed to the current market dislocation and the resulting issues facing all financial institutions, including corporate credit unions. "There is clearly a need to apply the lessons learned and to take a fresh look at corporate credit union operations," Cassidy said. "Regulatory changes must be done in a thoughtful and prudent manner to ensure corporate credit unions can continue to provide valuable products and services to their member credit unions." Cassidy's letter addresses the role of corporates in the Credit Union System as it relates to payment systems, liquidity and liquidity management, field of membership, expanded investment authority, and the two-tiered system structure. It also addresses corporate capital issues--including core capital, membership capital, and risk-based capital and contributed capital requirements. Other areas with recommendations include permissible investments, credit risk management, asset liability management, and corporate governance. For payment systems, the Plano, Texas-based corporate made two recommendations: 1) Address payment systems risks through enhanced liquidity management practices, capital requirements and investment management, and 2) neither segregation of payments processing operations nor establishment of separate corporate credit union charters is necessary to mitigate payment systems risks. Southwest Corporate made four recommendations regarding liquidity and liquidity management:
* Providing liquidity to member credit unions should remain a core service provided by corporate credit unions; * Enhanced liquidity management practices should be implemented; * As a risk-limiting constraint, use cash flow gap rather than cash flow duration; and * Broaden the Central Liquidity Fund's lending capabilities.
As for field of membership, Southwest Corporate recommended that corporate credit union restructuring is necessary, but it should be an evolutionary process driven by ANPR reforms and decided by member credit unions. It also recommended keeping national fields of membership. Expanded investment authority included three recommendations: Expanded investment authorities are needed for diversification; require minimum total capital ratio requirements for expanded investment authorities; and maintain the authority for qualified corporate credit unions to engage in derivative transactions. As to the two-tiered structure of the corporate system: U.S. Central should not continue in its current form, and U.S. Central should evolve into a new role, not as a wholesale corporate credit union but as a credit union service organization (CUSO) provider of off-balance-sheet products and services, wrote Cassidy. Southwest Corporate's core capital recommendations included increasing capital ratio requirements at all corporates; establishing a minimum operating income target of at least 15 basis points; requiring all credit unions using corporate credit unions' products and services to contribute capital; and granting a reasonable transition period. Membership capital recommendations included:
* Require all credit unions using products and services offered by corporates to contribute capital, comprised of PIC (part of core capital) and MCS (part of total capital); * Extend the notice period on MCS to five years. * Base credit union member contributed capital on a percentage of a member credit union's asset size; and * Grant a reasonable transition period.
The letter also recommended that a risk-based capital requirement be implemented. Two recommendations were made under permissible investments: Establish concentration limits by investment sector and individual obligor, and major changes in current investment authorities are not warranted due to the combined impact of ANPR recommendations and broad global reforms. Under credit risk management, Southwest Corporate recommended that NCUA: Continue to rely on Nationally Recognized Statistical Rating Organizations' (NRSROs) ratings but with additional requirements; adopt further regulatory requirements regarding the use of ratings; adopt additional concentration limits; and test sensitivities to credit spread widening and standards to apply to that effort. The corporate made one recommendation each in asset liability management (ALM) and corporate governance. For ALM, require the use of net interest income modeling and stress testing. For governance, ensure that representatives from a corporate's member-owners continue to be the appropriate persons to serve on the corporate's board. The letter went into detail about each recommendation. To review further, use the resource link.

Supreme Court rules for suspect in CU robbery confession

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WASHINGTON (4/8/09)--The Supreme Court ruled Monday that confessions obtained by federal authorities before a suspect's first court appearance may be inadmissible if more than six hours pass between the arrest and the court date. The case before the court , Corley v. U.S., was brought by a prisoner who had confessed to robbing a credit union in Norristown, Pa. The prisoner, Johnnie Corley, was arrested as a suspect in the June 2003 robbery of Norsco FCU. However, the arresting agents, from the Federal Bureau of Investigation agents, waited 29 1/2 hours before his court appearance. During that time Corley confessed to the robbery (Associated Press April 6). He was later convicted and sentenced to 170 months in prison. The court ruled, 5-4, that long delays before a suspect sees a judge can provide the government with too much leverage over the person arrested. "Federal agents would be free to question suspects for extended periods before bringing them out in the open, and we have always known what custodial secrecy leads to," said Justice David Souter, who wrote the majority opinion. Federal law and court precedence indicate that confessions obtained within six hours of an arrest are presumed to be valid and may be used at a trial. The question before the court was what to do with confessions when there is a delay before the first court appearance. The court ordered lower courts to examine whether Corley's confession occurred during the first six hours he was in custody. If not, they would have to throw out the confession if the delay in the court appearance was "unreasonable or unnecessary." Voting with Souter were Justices Stephen Breyer, Ruth Ginsburg, Anthony Kennedy and John Paul Stevens. Opposed were Justice Samuel Alito, who wrote the dissenting opinion; Chief Justice John Roberts; and Justices Antonin Scalia and Clarence Thomas. Alito said that confessions that are voluntary should be admitted into evidence, regardless of the time elapsed. He noted that providing Miranda warnings have largely dealt with concerns about coerced confessions.

CU System briefs (04/07/2009)

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* NEW YORK (4/8/09)--At least 19 CUs offer accounts to accept case for wedding gifts, the Wall Street Journal reported yesterday, citing figures from the Filene Research Institute. The story, headlined “Something Borrowed, Something Green,” offered advice and proper etiquette for when the bride and groom want cash for gifts. Referencing the specially designated accounts at the credit unions, The Wall St Journal added, “These institutions market their service as MatriMoney, a name licensed by North Island Credit Union in San Diego. The credit union accounts typically offer an annual interest rate and have no fees.” In today's economy, the story noted, an increasing number of brides and grooms want “cold, hard cash” as wedding presents ... * HARRISBURG, Pa. (4/8/09)--Richard C. Harclerode, former board chairman at LANCO FCU, Lancaster, Pa., died April 3 at age 75. Harclerode led the LANCO board for more than 35 years. During his tenure, LANCO’s operations moved from occupying the back of a classroom at Hempfield High School into four locations that provide a full range of services to people who live or work in Lancaster County. In 2002, the credit union recognized Harclerode’s contributions by dedicating a flagpole in his honor (Life is a Highway April 7) ...

SandPs adjusts ratings for six corporates

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NEW YORK (4/8/09)--Standard & Poor's Ratings Services took action Monday by lowering the ratings of six corporate credit unions and keeping them on CreditWatch Negative. The action was prompted by the impact of National Credit Union Administration's (NCUA) recent actions on corporate credit unions' capitalization, said S&P, noting that the corporates' capitalization was "severely impaired as the result of the expected write-down of their capital investments in U.S. Central CU." The ratings service said it withdrew the ratings of two of the six corporates--Eastern Corporate FCU (EasCorp) and Central Corporate CU (Cencorp)--at their request. The remaining corporates credit unions are:
* Southeast Corporate FCU; * Southwest Corporate FCU; * Constitution Corporate FCU; and * SunCorp Corporate CU.
The remaining corporates will stay on Credit Watch Negative "because of continued negative pressure on the ratings from weak capitalization, the potential for further securities write-downs in the near term, and uncertainty as to the direction and form of future regulatory action toward these companies," S&P said. It said NCUA's program to guarantee all member deposits through December 2010 "is crucial to the corporate credit unions' creditworthiness." For more information about the ratings, use the resource link.

League of Southeastern CUs board elects officers

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (4/8/09)--The League of Southeastern Credit Unions (LSCU) Board of Directors Monday elected its first Executive Committee, with Rich Helber, GTE FCU, Tampa, Fla., presiding as chairman of the board. In addition to Helber as chairman, new officers are:
* Chairman-Elect: Joseph L. McGee, Legacy Community FCU, Birmingham, Ala.; * Vice Chairman: Marry Ott Wood, Florida West Coast CU, Brandon, Fla.; * Treasurer: Dale Dalbey, Mutual Savings CU, Birmingham; and * Secretary: Steve Swofford, Alabama CU, Tuscaloosa.
Members of the Executive Committee will serve for one year. The LSCU board consists of eight Alabama credit union representatives and eight from Florida credit unions. Each state's previous board chairman became a member of the new combined board and selected seven board members from the respective states to serve on the LSCU board. The board will have its first face-to-face meeting at the Alabama Credit Union League's Annual Meeting, which will meet Monday through Thursday next week. LSCU was recently formed through consolidation of the Alabama and Florida Credit Union Leagues.

County official shot at CU returns to work

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SALISBURY, Md. (4/8/09)--Wicomico County Administrator Theodore Shea has returned to work after spending almost two months recovering from a shooting at $1.8 billion asset State Employees CU (SECU) of Maryland (Associated Press April 7). Salisbury police are still searching for the man who shot Shea in his van on Feb. 14 while Shea was using the drive-up ATM at SECU’s Salisbury branch. The man approached Shea’s van and demanded money before firing several shots into the vehicle. Shea received a gunshot wound to the leg and now walks with a cane. His return to work came during the budget season for Wicomico County, which is struggling to deal with a projected $12 million decrease in revenue. Shea is the second-highest official in Wicomico County government.

Vote for ICU MagazinesI 2009 CU Hero of the Year

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MADISON, Wis. (4/8/09)--Credit Union Magazine is celebrating the credit union movement’s heroes by asking the movement to help select its 2009 Credit Union Hero of the Year. Credit union leaders have nominated four credit union heroes:
* Carla Hedrick, CEO, Denver Community FCU; * John Herrera, senior vice president of Latino/Hispanic affairs, Self-Help FCU, Durham, N.C.; * Regina McIlrath, president, Table Rock FCU, Shell Knob, Mo.; and * Cathie Tierney, CEO, Community First CU, Appleton, Wis.
To read about the nominees and vote, use the resource link. Voting ends May 1. The winner will be posted on creditunionmagazine.com by June 15. The Credit Union Hero of the Year will be honored at the Credit Union National Association's 2009 America’s Credit Union Conference & Expo June 21-24 in Boston.

Pittsburgh Police FCU sets up fund for slain officers

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PITTSBURGH, Pa. (4/8/09)--Greater Pittsburgh Police FCU is accepting donations from across the nation on behalf of three Pittsburgh officers who were killed in an ambush on April 4 while responding to a domestic dispute. The $45 million asset credit union worked with the Fraternal Order of Police Lodge No. 1 to set up the Pittsburgh Fallen Hero Fund to accept donations, according to CEO Sandy Lazzara. All money collected with go to the families of Officers Eric Kelly, Stephen Mayhle and Paul Sciullo II. Lazzara told News Now that Kelly and Mahley were credit union members who were familiar faces to the staff. Kelly was known for offering a friendly hug, while Mahley was the last member in the credit union lobby conducting business on the day before he died. “It’s a shock for our entire community,” Lazzara said. She said the community has responded generously with donations “pouring in” from individuals as well as prominent businesses such as the Pittsburgh Pirates baseball team and the Pittsburgh Penguins hockey team. To date, the largest donations have come from fellow law enforcement officers throughout Allegheny County, although law enforcement organizations from coast-to-coast have called for information on how to contribute. Lazzara said she is thankful for the prayers and support that have been directed to the credit union and its 5,500 members. She is using the widespread media attention directed to the credit union for its role in collecting donations to express appreciation for law enforcement officers. “I want to thank our officers for being on that street 24/7 every day,” Lazzara says. “That’s the most important, because the public only pays attention when a tragedy happens.” Contributions should be made payable to the Pittsburgh Fallen Hero Fund and mailed care of Greater Pittsburgh Police FCU, 1338 Chartiers Ave., Pittsburgh, PA 15220.

NYIB forges partnership with Biz Kids program

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COLUMBIA, S.C. (4/8/09)--Credit union educational staff and volunteers who use the curriculum from the Biz Kid$ series on national public television can now earn credit for their presentations from the National Youth Involvement Board (NYIB).
The cast of Biz Kid$, the public televsision show , teaches youth about managing money. (Photo provided by the National Credit Union Foundation)
NYIB provides a platform for credit union educators to report on presentations to classrooms and other youth events. As a volunteer network of more than 700 credit union professionals, NYIB also collects and shares materials, resources, and insight to help one another educate youth and attract young members. Now on the NYIB website, Biz Kid$ is among the programs in the drop-down menu for reporting presentations. In its third season with exclusive underwriting by America’s Credit Unions, Biz Kid$ is the first national public television series promoting financial education for middle and high school students. The 39-episode series is now airing in 97% of the U.S. public television market--reaching more than 230 million people over the age of two-- through 334 PBS stations serving all 50 states. Each episode comes with teaching materials, lesson plans and activities that meet national financial literacy standards. Credit union professionals and volunteers, as well as school teachers and after-school programs are teaching Biz Kid$' lessons in classrooms and communities. All ready-to-use curriculum and collateral materials are available on CD-ROM or via free download on the Biz Kid$ website. The core curriculum for five modules is available in both Spanish and English. “Biz Kid$ is a valuable addition to the NYIB presentation reporting platform,” said NYIB Chairman Brandon Pugh, director of communications and public relations for the South Carolina Credit Union League. “Biz Kid$ is an outstanding program that reaches key target audiences and complements the materials we feature from many other financial education providers.” “Curriculum development and community educational outreach have always been an important component of this project,” explained Biz Kid$ Project Manager RoxAnne Kruger, executive director of the Washington Credit Union Foundation and senior vice president of member and business development for the Washington Credit Union League. She noted that outreach materials represent 78 classroom hours for students in the fourth to eighth grades. “We’ve also created a new Biz Kid$ Teacher Professional Development Kit,” Kruger continued, adding the modular kit was unveiled to thousands of teachers last at the Conference for Teaching and Learning in New York City. The kit is available for public broadcast stations and station partners to download and use in their training initiatives with schools, after-school programs, and other informal educational settings. Teachers, parents and credit union trainers also will have access. Production of the Biz Kid$ TV series, website, and educational outreach materials were funded by a coalition of nearly 200 credit unions, credit union foundations, and other non-profits, service providers and individuals. Funds are needed now to finalize America’s Credit Unions national underwriting obligations. “The economy is tight, but please do all that you can to dig a little deeper to help secure final funding for an innovative financial literacy program that has never been more in need,” urged NYIB Member Heather Harris, vice chairman of the Michigan Credit Union League’s Financial Education Council. The new partnership was facilitated by the National Credit Union Foundation (NCUF). NCUF Executive Director Steve Delfin put together a Financial Education Resources Center at the Credit Union National Association’s (CUNA) Governmental Affairs Conference. Participants included Biz Kid$, CUNA, NCUF, NYIB, and the National Endowment for Financial Education (NEFE). “All of our missions align around providing financial education,” said Delfin, who also served on CUNA’s Financial Literacy Task Force. “To carry on this cooperative movement, we must collectively promote financial literacy for millennials and the next generations of credit union members.”

WesCorp former board wont contest conservatorship

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SAN DIMAS, Calif. (4/7/09)--The former board of directors of Western Corporate FCU (WesCorp) Monday announced its unanimous vote against contesting the recent decision by the National Credit Union Administration (NCUA) to place WesCorp into conservatorship. The former board met four times to review legal options since the NCUA took conservatorship action on March 20, said the corporate in a press release. "Counsel was received from multiple law firms across the country, and the board unanimously concluded that any legal challenge to the establishment of the conversatorship would be very problematic and the cost extraordinarily high, given the likely outcome," WesCorp said. Bob Harvey, former chairman of the board, said, "We received encouragement and support from many WesCorp members, but the former board, after careful consideration, believes litigation is not a viable alternative. "At this point in time, the best way to minimize losses to the share insurance fund and member credit unions is to support the NCUA in its strategy to hold US Central and WesCorp investments to maturity," Harvey added.

BizKid host closes out NASDAQ

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NEW YORK (4/7/09)--Biz Kid$ host Austin Siedentopf, accompanied by executive producers and biz kids from the popular television show sponsored by America's Credit Unions, helped ring the closing bell at the NASDAQ stock market at New York's Times Square Monday afternoon. The group attended the closing bell at 4 p.m. EDT. The event was beamed onto the huge screens at Times Square, with Biz Kid$ promotions airing in 30-second intervals from 3:30 to 4:30 p.m., and is available on the Internet. Biz Kid$, which teaches youth about money, is broadcast on more than 334 PBS stations, roughly 97% of the U.S. public television market. It 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

MDDCCUA testifies against state card rates bill

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ANNAPOLIS, Md. (4/7/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) testified in opposition to a state bill that would prohibit card companies from placing clauses in consumer contracts that would allow the companies to retroactively change credit card interest rates. House Bill 1048 would create an unlevel playing field between state and federally chartered credit unions because federal credit unions would be pre-empted by federal law, said MDDCCUA (Focus Newsletter April 6). House Bill 1048, as drafted, would place state-chartered credit unions at a disadvantage because federal credit unions would be pre-empted, said Brian Tate, vice president of legislative affairs at MDDCCUA, testifying Thursday before the Maryland State Senate Finance Committee. However, he told the committee that the association does not support universal default. In addition, the bill would go beyond the intent of the bill's sponsor, Del. William Frick (D-Montgomery County), and impact consumer contracts in general, including areas such as default provisions in promissory notes, which can be triggered by events unrelated to a borrower's activity such as the borrower's death, the association said. Credit union representative Jim Brown also testified against the bill, pointing out that 10 years ago state law regarding credit union regulation was amended to mirror federal law. Joining MDDCCUA in opposing the bill were a number of associations, including the Maryland Bankers Association. They testified that the bill's reach exceeds its intent.

Study Shared branching positively impacts margins

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ATLANTA (4/7/09)--Shared branching positively impacts credit unions' profitability, according to research findings from Raddon Financial Group released at CO-OP Financial Services' THINK 09 conference. Fifteen credit unions from various regions, asset sizes and peer groups participated in the study, conducted by Raddon in conjunction with CO-OP Shared Branching. The study found that retaining and gaining members via shared branching increases the profitability of surveyed credit unions through their own cross-sales channels. Other key findings:
* Shared-branch users represent 23% of surveyed credit unions' overall profitability. While statistics range by individual credit union, one participant noted 13% of members using shared branching at the credit union represented 65% of its overall profitability. * The "middle market" segment accounts for 28% of shared-branch user households. The market is comprised of young to middle-aged members with incomes ranging from $30,000 to $100,000 and who have built up enough in household balances to offer good profit potential in both savings and borrowing. * Shared-branch households generated an average profit of $119.10 among those credit unions surveyed, while non-user households averaged $28.47. Factor in the costs of shared branching, and user households still average a significantly higher profit of $73.17. * While 30% of overall households are profitable, 38% of shared-branch households are profitable. * Shared branching can be considered a profit center for acquiring institutions (those that welcome guest members into their own branches). Based on study findings, shared branch net income totals nearly $23,000 per credit union annually. * Deposits are the most common shared-branching transaction type, with an average of $784 per transaction. * Transfers and loan payments are significant in shared branching--line of credit advances or loan disbursements on average are $2,454 per transaction among the credit unions surveyed. * With 13% of transactions occurring after 5 p.m., extended hours continue to be important to shared-branch users. * Members of credit unions in the study used 428 different locations.
"Many credit unions are already aware of the benefits of shared branching. But as organizations look to cut costs during these tough times, this study shows that shared branching has never been more important," said Carroll Beach, president/chief operating officer of CO-OP Shared Branching.

WOCCU lowers hotel rates for World CU Conference

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MADISON, Wis. (4/7/09)--The World Council of Credit Unions has lowered the hotel rates for the World Credit Union Conference in Barcelona July 26-29. This year, more than ever, credit union leaders worldwide need the opportunity to come together and learn from each other, said WOCCU. It worked with all three conference hotels to reduce the rates. At the Hilton Diagonal Mar, the price has been reduced from 200 euros to 150 euros ($269.81 to $202.36) for single or double occupancy. Prices for both the AC Barcelona and the Barcelona Princess have been reduced from 165 euros to 110 euros ($222.60 to $148.40). The reduced rates are valid for registrations received by May 20. For more information, use the resource link.

MCUA annual advocacybusiness meeting marks 80 years

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JEFFERSON CITY, Mo. (4/7/09)--Keith Morton, National Credit Union Administration (NCUA) regional director and a member of the U.S. Central conservatorship board, fielded credit unions’ questions
NCUA Regional Director Keith Morton answers questions March 31 during the Missouri Credit Union Association's Annual Advocacy and Business Meeting.
Missouri State Sen. Wes Shoemyer (D-18) looks at his playing cards while meeting with Heather DeMint and Donna Evans of United CU.
Recognized during the Missouri Credit Union Association business meeting were, from left: new Board Chair Stan Moeckli, Electro Savings CU ; outgoing Board Chair Betty Clark, United CU; and departing board member Hubert Hoosman Jr., Vantage CU. (Photos provided by the Missouri Credit Union Association)
about NCUA corporate credit union actions at the Missouri Credit Union Association’s (MCUA) Annual Advocacy and 80th Annual Business Meeting, held March 30-31. Morton said supporting the corporate system is “a reality of the situation” facing credit unions. He added that while natural person credit unions are “taking a hit,” they are in good position to weather the storm. “The issue before us is so large and so complex, to think that credit unions wouldn’t be impacted by what’s happening in the global economy is not really possible,” Morton said. MCUA President/CEO Rosie Holub also emphasized economic challenges during the business meeting. “We are in for a long recovery, with unprecedented government intervention as legislators and regulators try to stabilize the economy,” Holub said. MCUA is helping ease the economic strain on credit unions in 2010 by maintaining the reduced dues formula it introduced in 2009. In February, the MCUA board voted to assist member credit unions by distributing $500,000 based on a percentage of dues paid. “Credit unions are capable of handling things on our own without asking for a government bailout,” said outgoing MCUA Board Chair Betty Clark of United CU, Mexico, Mo. Newly elected board officers include:
* Board Chair Stan Moeckli of Electro Savings CU, St. Louis; * First Vice Chair Dennis Pierce, CommunityAmerica CU, Kansas City, Mo.; and * Second Vice Chair Brian Eyestone, Southpointe CU, St. Louis.
Bob Eike, Century CU, St. Louis, was elected to the board, while Hubert Hoosman of Vantage CU, Bridgeton, stepped down after 11 years of service. Moeckli; Tony DiGiovanni of CSD CU, Kansas City; and Carolyn Ross of Northland Teachers Community CU, Gladstone, were re-elected to three-year board terms. The event emphasized legislative action, with almost 50 state legislators and staff members attending a dinner reception. Credit union representatives visited the Missouri State Capitol to present lawmakers with decks of playing cards personalized with the lawmakers’ pictures and a message about the credit union difference.

Iowa CU leaders appointed to CU Review Board

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DES MOINES, Iowa (4/7/09)--Three Iowa credit union leaders were confirmed by the Iowa Senate for positions on the state Credit Union Review Board in the Department of Commerce, Credit Union Division. Dave Cale, CEO of Financial Plus CU, Des Moines, and Tim Marcsisak, CEO of Nishna Valley CU, Atlantic, were confirmed to two open positions on the board. Denise Dolan, board chair off Dupaco Community CU, Dubuque, was reappointed to her position on the review board. The board oversees the operations of the Iowa Credit Union Division and approves any administrative rules proposed by the superintendent. The terms of these volunteer positions will begin May 1 and expire on April 30, 2012. "Iowa credit unions will be well represented by these individuals and I thank them for their service," said Patrick S. Jury, CEO of the Iowa Credit Union League.

WOCCU chair leads overseas delegation to DE training

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DELAVAN, Wis. (4/7/09)--Melvin Edwards, chairman of the World Council of Credit Unions and an international credit union ambassador from the Caribbean, is among the overseas leaders registered to attend Credit Union Development Education (DE) training May 13-19. “Participating in the U.S. DE program will enable me to commence applying Caribbean and worldwide experiences of the past 27 years into academic thought and frameworks, especially in the unprecedented trauma facing the global economy and financial sector,” Edwards said.
Click to view larger image Melvin Edwards, WOCCU chairman, will be among the international leaders participating in Development Education training. (Photo provided by the World Council of Credit Unions)
Inspired by the 2008 joint launch of an international designation between WOCCU and the National Credit Union Foundation (NCUF), Edwards hopes to work with other graduates to start a sustainable Caribbean DE program. DE-designated programs already exist in Asia, Australia, the Philippines and the United Kingdom. DE training in 2009 will incorporate emerging economic discussions while continuing to provide critical lessons in cooperative principles and credit union philosophy, according to DE Training Facilitator Tom Decker, who also serves as NCUF’s director of social impact management. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. The May session will be held in the new location of Lake Lawn Resort in Delavan, Wis. The lakefront resort is about 50 minutes from either Madison or Milwaukee and less than two hours from Chicago. Scholarships are available through NCUF’s DE Fund and several state credit union foundations and leagues (News Now March 11). For more information, contact your state foundation or league, or contact Decker at tdecker@ncuf.coop or 800-356-9655, ext. 4374. NCUF is the primary sponsor of the DE program, with support from CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions and state foundations and leagues.

Congressman to CUs I cherish what you do

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ORLANDO, Fla. (4/7/09)--U.S. Rep. Alan Grayson (D-Fla.) recently told a group of credit union representatives at Orlando (Fla.) FCU that he cherishes what credit unions do. “Credit unions are special,” Grayson said. “They’ve avoided the problems that have laid our economy low. They did it in a simple way--by making the right decisions.” Credit unions made the right decisions because they support their communities, the congressman said. Many institutions and businesses are focused on making as much money as quickly as they can, but that model doesn’t work anymore, Grayson added. The model that does work is the one credit unions use--working together to make people’s lives better. Grayson said he’d like to see more cooperatives, and “I’d like to see more credit unions,” he added. For a video of Grayson’s speech, use the link.

INY TimesI advertorial highlights benefit of co-ops

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WASHINGTON (4/7/09)--A four-page “advertorial” in the front section of yesterday’s New York Times spotlighted the various types of cooperatives, including credit unions, as a better business model in the economy today both in the U.S. and abroad. Headlined “Power to the People: Cooperatives Spread the Benefits,” the feature noted U.S. cooperatives today run the gamut from multibillion dollar agribusinesses to tiny food co-ops and worker-owned businesses. But whatever the type, the Times noted, the traits they share are member-ownership and earnings that go back to the members rather than outside stockholders. “It’s all about mission,” emphasized Roberta MacDonald, senior vice president, marketing, for Vermont-based Cabot Creamery Cooperative. “People involved in cooperatives believe they are on a mission--we really do!” Added Glenn English, CEO of the National Rural Electric Cooperative Association, “There is no finer business model.” Paul Hazen, CEO of the National Cooperative Business Association, predicted continued growth as more Americans discover co-ops. NCBA spearheaded the New York Times initiative as part of its effort to raise awareness about co-ops after the paper published a similar advertorial about credit unions in January. A half-page NCBA ad accompanying yesterday’s piece steers readers to www.thebetterchoice.coop, a site where they can learn more about credit unions and other co-ops. The co-op advertorial also included a section on credit unions, which The New York Times called “perhaps the most visible of cooperatives on the American scene.” Credit unions are based on the idea of people helping people, explained Mike Ness, CEO of New York University FCU, one of the CUs featured. “We did not issue toxic mortgages. That wouldn’t benefit our members. We are usually very conservative in our lending.”

CU System briefs (04/06/2009)

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* NORTH PHILADELPHIA, Pa. (4/7/09)--TruMark Financial CU has opened a new branch to reach underserved residents of a predominantly Latino community in North Philadelphia (Life Is A Highway April 3). The branch was developed with partners that include Asociacion Puertorriquenos en Marcha (APM), which was turned down by several banks before approaching TruMark. The community has lacked a financial services provider for almost 60 years. Participating in the opening ceremony were, from left, Mike Wishnow, senior vice president of the Pennsylvania Credit Union Association (PCUA); Pennsylvania Secretary of Banking Steve Kaplan; TruMark CEO Mark Stipa; TruMark Board Chair Hugh Bray; and PCUA Vice President Christina Mihalik. (Photo provided by Pennsylvania Credit Union Association) … * SPRING GROVE, Pa. (4/7/09)--Glatco CU recently held a ribbon-cutting ceremony to open a student credit union branch at Spring Grove High School. Student Melissa Pendleton, right, was the first to open an account at the branch, assisted by Teller Missy Altland and CEO Bill Bowker. The student branch and a cooperative store located nearby help boost financial education for high school students (Life Is A Highway April 3). David Stricker, superintendent of the Spring Grove School District, noted that Glatco CU has close ties to the community, including several board and staff members who are Spring Grove High alumni. Spring Grove joins 21 other student branches operating in the state. (Photo provided by Pennsylvania Credit Union Association) … * ABILENE, Texas (4/7/09)--Abilene Teachers FCU has presented $95,000 raised by its holiday “Skip-a-Payment” program to the Boys and Girls Clubs of Abilene. Members who elected to skip one or two loan payments in the months of November, December or January paid a fee of $10 per month (Reporternews.com April 3). During its six-year history, the “Skip-a-Payment” program has raised more than $400,000 for Abilene’s Boys and Girls Clubs, which will use the 2009 gift to provide summer programs and support operating costs. Abilene Teachers CEO James Boyd said credit union members look forward to the event all year … * DALLAS (4/7/09)--U.S. District Court Judge Reed O’Connor has sentenced the former president of the defunct Texas Department of Transportation-Wichita Falls CU to 71 months in prison (Times Record News April 3). Joanna Lynn McGee must also pay restitution of $2.6 million for embezzling at least $850,000 from the credit union for herself, family members and friends from 2001 to 2008. McGee, 40, used names from dormant accounts and dead members to obtain 129 fictitious loans worth approximately $3 million during the seven-year period. During the sentencing, Reed told McGee that she “crashed an entire credit union” (Texomashome.com April 3). Mandi Nicole Shook, another credit union employee who has pleaded guilty to embezzlement in the same case, still awaits sentencing … * GRAND RAPIDS, Mich. (4/7/09)--The former general manager of Plainwell Community FCU has been ordered to serve nearly four years in prison for money laundering and embezzlement. Ronald Alan Tran, 45, also must pay almost $1 million in restitution for money channeled from the credit union into personal accounts. Discovery of a fraudulent loan approval led authorities to uncover Tran’s embezzlement, which occurred over a four-year period …

Todays INY TimesI to feature co-op advertorial

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NEW YORK (4/6/09)--Today's edition of The New York Times features an advertorial on cooperative business in the front section of the nationwide newspaper. The National Cooperative Business Association (NCBA) worked last fall on a cooperative advertorial after the Times asked the NCBA for a list of national and regional credit unions to participate in a January advertorial. The advertorial will feature an in-depth view of cooperatives written by Robert McGarvey of the Times. He interviewed John Dunn, NCBA's vice president of international development, and Paul Hazen, NCBA's president/CEO, for the editorial. NCBA will receive a copy of the advertorial to place on its website on Tuesday. The advertorial includes a number of advertisers, including NCBA; Cabot Creamery, which is a co-sponsor of the Home & Family Finance Radio Show every Sunday on public radio; and New York University CU.

Syndicated columnists tax-refund advice includes CUs

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PITTSBURGH, Pa. (4/6/09)--A syndicated column about what to do with a tax refund tells taxpayers to check out high yielding money market accounts or try credit unions. "Credit unions tend to offer higher rates than banks, but limit their membership," wrote Gail Liberman and Alan Lavine, in their "Family Finances" column, which appeared in the Pittsburgh Post Gazette April 3. They tell readers to go to www.cuna.coop to find a credit union they may be eligible to join. For the full article, use the link.

Central States Mortgage receiver hearing is Tuesday

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MILWAUKEE, Wis. (4/6/09)--A hearing has been scheduled for Tuesday in Milwaukee County Circuit Court to appoint a receiver to oversee the liquidation of mortgage lender CSMC Inc., the parent of the now defunct Central States Mortgage Co. Central States provided mortgage services to more than 250 credit unions before it closed its doors on March 9. A majority of CSMC is owned by credit unions. It filed for a liquidation receivership late on March 27 (News Now March 31). Judge John DiMotto told more than a dozen lawyers in a two-hour hearing Wednesday to return to court Tuesday so he could appoint a receiver. DiMotto said he had not received financial information needed from CSMC to set the bond for the receiver (Milwaukee Journal Sentinel April 1). The Wauwatosa, Wis.-based CSMC has requested the court to appoint Philip Ostroski, managing director of MorrisAnderson and Associates, as receiver. However, attorney Stephen Kravit told the court Wednesday that the court should pick the receiver. Kravit represents former Central States founder and CEO Richard Jungen and three other executives who were ousted after the mortgage servicer discovered they were operating another company. Central States sued the former executives, alleging the business caused $15 million in losses, according to the Journal Sentinel. Kravit also argued that a receiver should be appointed as soon as possible because the company's board is split and operating illegally, the article said. CSMC attorney David Meany said the firm is properly governed by its board and he asked the court to postpone the hearing for 10 days to provide time to work out issues with the company's largest creditors. Nineteen of the 20 largest creditors are credit unions. Kravit also questioned the decision to bring in a company from Michigan to service pending loans without disclosing the financial arrangement and the hiring of a public relations firm. A receivership is a state court process similar to a federal bankruptcy court liquidation. In addition to the receivership, CSMC has sued Jungen and the former executives. Recently another court froze more than $2 million of Central States' assets at the request of a creditor.

Altura CU announces two branch closures staff cuts

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RIVERSIDE, Calif. (4/6/09)--Altura CU announced Friday that it will close two branch offices, transition a third branch to an electronic branch, and cut staff to reduce expenses. The San Jacinto branch will close May 5 and the Coachella branch will close May 7. The Corona branch will transition to electronic May 6. After the changes, the credit union will have 14 branches. The credit union also will cut 35 staff positions, representing 13% of Altura’s workforce. “All affected employees were offered severance packages, outplacement services and Altura loan modification packages to assist them in this transition,” said Altura President/CEO Mark Hawkins. Sixteen branch positions and 19 positions at Altura’s headquarters were cut. About 27 open positions at the credit union also have been eliminated over the past year, representing 20% of Altura’s work force, the credit union said. “The Inland Empire has been hit especially hard [by the economy],” Hawkins said. “The area’s high unemployment and foreclosure rates have created some real challenges for all financial institutions, and we’re no exception. Our delinquencies and losses are the highest we’ve seen in nearly three decades. Our provision costs are also up sharply. “Everyone knows these are tough times,” he continued. “And we are adopting a proactive approach to address them. Altura has a 51-year history in this community and we take this responsibility very seriously. In order to assure our future is as successful as our past, we have had to take some difficult steps to reduce our expenses.” Beginning with senior management, the credit union also has reduced benefits and compensation for all employees. Altura also estimates that its support to the National Credit Union Share Insurance Fund to help stabilize the corporate credit union system will cost more than $9 million. “With all these factors converging at once, reducing our expenses had to be done,” Hawkins said. Altura, Riverside, Calif., has $889 million in assets.

Carolina state senator praises work of CUs

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RALEIGH, N.C. (4/6/09)--State Sen. Sam Queen, a proponent of affordable housing as a means of building wealth and strengthening the middle class, praised the work of North Carolina's credit unions in this critical area and in several other areas last week. The Democrat, who represents the 47th Senate District in western North Carolina, offered glowing remarks about credit unions during the Annual State Capital Connections program April 1. The remarks were made in an on-camera interview with Dan Schline, senior vice president of association services for the North Carolina Credit Union League. The video is displayed on the league's Weekly Update website.


Queen noted credit unions' efforts in assisting struggling homeowners and said they "haven't been in subprime lending…they haven't been in these derivatives…they've just been doing good old-fashioned lending to help people build homes and build solid families." He also praised their financial literacy efforts and expressed gratitude to credit unions for how they educate and help families. Credit unions are a "very important institution," he said, adding that they are "in great shape." "Credit unions do a great job of serving the people that do business with them…that save and borrow there," he told the league.

Filene recruiting applicants for i3 program

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MADISON, Wis. (4/6/09)--The Filene Research Institute is recruiting 15 new members to join its i3 innovation program for two-year terms beginning in fall 2009. Application deadline is May 31. "Now is exactly the time to focus on tomorrow because so many institutions have to focus on today," said Denise Gabel, chief innovation officer at Filene. Filene is looking for those who thrive on creative energy, believe that challenging times bring opportunities, enjoy implementing new ideas, and aspire to take credit unions to the next level of service and success. Good candidates are innovative, insightful and passionate credit union professionals who have not yet reached the CEO level but who are in positions of substantial responsibility, said Filene. Filene i3 members reflect diversity in experience, job responsibilities, geography and credit union membership. For more information or to apply, use the resource link or call 608-231-8550, or e-mail karenh@filene.org.

Deadline for Wegner Award nominations is June 19

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MADISON, Wis. (4/6/09)--The National Credit Union Foundation (NCUF) is encouraging credit union supporters to nominate individuals and organizations for the 22nd Annual Wegner Awards. “With all the negative news swirling around the financial industry, it is more important now than ever to showcase the positive impact credit unions make on consumers,” said NCUF Executive Director Steve Delfin. “We encourage credit union supporters from every state to nominate their best and brightest for the national Wegner Awards.” Nominations are due by June 19 for these awards:
* The Individual Achievement Award, which honors an unsung hero for innovative concepts and/or accomplishments that have made a significant impact on the national and/or international credit union movements within the past 10 years--or have a significant potential impact now. Nominations must cite a specific subject of achievement. Examples include financial literacy, service to the underserved, alternatives to predatory lending, and/or new products. * The Outstanding Organization/Program Award, which honors an organization or program for innovative concepts and/or products/services that have made a significant impact with measured results on the national and/or international credit union movements. * The Lifetime Achievement Award, which honors an individual who has dedicated his/her life to promoting the credit union philosophy of “People Helping People.” This person must have created innovative concepts and provided leadership that has made a significant and lasting impact on the national and/or international credit union movements.
Nominations can come from individuals and/or organizations. To make a nomination, take four steps:
* Print out the Wegner Awards nomination form on the NCUF website at www.ncuf.coop; * Fill out the nomination form; * Gather at least five letters of recommendation citing examples of the nominee’s achievements relevant to the award criteria: and * Send the nomination form and recommendation letters to NCUF by June 19.
Winners will be honored in conjunction with the Credit Union National Association’s 2010 Governmental Affairs Conference in Washington, D.C.

Free tax prep pays off for Bethpage member

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BETHPAGE, N.Y. (4/6/09)--A Bethpage FCU member recently received a hearty tax refund with the help of the Volunteer Tax Assistance Program after a commercial tax prep service told her she’d have to pay more than $200 to get a $400 refund. Danielle Clemente, a 26-year-old mother of three, received $1,018 with the help of the volunteer assistance program at Bethpage FCU’s Bay Shore branch. Clemente said she decided to use the program because she thought she would be getting more than $400 in refunds from the commercial service, according to Newsday (April 3). The Volunteer Tax Assistance Program operates out of eight Bethpage branches. Anyone with an income of less than $40,000 is eligible to participate. The program helped more than 500 people with refunds this year, the newspaper said.

CUs for Kids wine auction raises 175000 for hospitals

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DANA POINT, Calif. (4/6/09)--The fourth annual California and Nevada Credit Unions for Kids Wine Auction raised $175,000 for 11 Children’s Miracle Network-affiliated hospitals in the two states. More than 175 attendees from 55 credit unions attended the March 27 event. The event’s special guest was Sammy Heim, 11, from Children’s Hospital Orange County. Heim was diagnosed with a soft tissue tumor and underwent 40 weeks of treatment. She is currently in remission. The event also included a cash paddle bid in memory of Ed Callahan, credit union industry leader and retired CEO of Patelco CU, died a week before the auction. In 2008, credit unions and state leagues raised more than $9.3 million for the network through the Credit Unions for Kids program. About 5,000 credit unions fundraise for the program, according to the network.

Oregon CU advocates converge for CU Day at Capitol

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BEAVERTON, Ore. (4/6/09)--More than 200 credit union supporters converged on Oregon's state capital March 16 to educate members of the House and Senate on credit unions' functions, contributions to the state's economy and service to 1.4 million members. Credit Union Day is one of the largest lobby days at the state
Click to view larger image The Little Guy was evident at the Credit Union Association of Oregon's display during Oregon's Credit Union Day at the Capitol March 16. (Photo provided by the Credit Union Association of Oregon)
Capitol. This year's theme was "Oregon Credit Unions Safe, Sound and Working for our communities." Credit union advocates met with nearly every legislative office to discuss the current credit union legislative agenda, said the Credit Union Association of Oregon (CUAO). Credit union booths drew traffic from legislators, staffers and Capitol visitors, helping spread the message that credit unions are a highly visible and active presence in their communities, and vocal advocates and active participants in the state political process. Speakers included Senate President Peter Courtney, Senate Republican Leader Ted Ferrioli, Speaker of the House Dave Hunt, and Sen. Rick Metsger. "No one illustrates the credit union difference, and the work our credit unions are doing in their communities during this tough economy, better than credit union advocates," said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations. "Oregon legislators always appreciate the opportunity to meet with representatives from their districts." The day ended with a reception at during which legislators visited with credit union leaders in a more casual setting.

CU System briefs (04/03/2009)

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* RANCHO CUCAMONGA, Calif. (4/6/09)--For the eighth straight year, California credit union leaders and vendors are participating in the annual Newport to Ensenada International Yacht Race. The group is seeking contributions for the Richard Myles Johnson (RMJ) Foundation--the foundation for credit unions in California and Nevada. Honda FCU CEO and foundation board member Jim Updike will be crew skipper. Teammates include Todd Lane, California Center, California; Don Gensler, CUNA Mutual Group, Wisconsin; Chris Gunnare, Matt Flynn and Brian Scott, The Members Group, Iowa; and Tim Sidley, WesCorp, California. The team will cover all racing expenses, so 100% of the funds raised will go to support the foundation's financial education efforts. So far, the group has raised more than $61,000 for various causes. Last year it raised more than $7,000 for the foundation. The 62nd annual 125-mile competition will begin April 24 … * FRISCO, Texas (4/6/09)--Texas State Sen. Florence Shapiro visited the Career and Technical Education (CTE) Center in Frisco, Texas, March 27. Part of the visit included a tour and discussion session at Texans CU's CTE branch, which opened in August 2008 as part of Texans' financial literacy community initiative. Texans CU is based in Richardson, Texas. Shapiro, right, a former public school teacher, talked with, from left, Texans employees Dara Stork and BreAndrea Adevereaux about their studies and duties at the student-operated branch. (Photo provided by Texans CU) … * RALEIGH, N.C. (4/6/09)--The Western, Foothills and Piedmont Chapters of the North Carolina Credit Union League shared the positive credit union message with lawmakers in Raleigh Wednesday as part of the annual State Capital Connections program (Weekly Update April 3). "Credit unions shared how they are assisting their members throughout North Carolina during the recession," said Dan Schline, league senior vice president of association services. More than a dozen credit union representatives shared details of loan workouts for members who have lost jobs, examples of financial counseling programs and other efforts to help members through tough times. They also sent a "clear strength, safety and soundness message," said Schline. Pictured from left are: Bob Cathey and Patty Idol of Mountain CU; state Sen. Tom Apodaca; Mike Whitmire of Ecusta CU; and Chris Angel of Mountain CU. (Photo provided by the North Carolina Credit Union League) … * FAYETTEVILLE, N.C. (4/6/09)--Bragg Mutual FCU President/CEO Jean Stultz received the state's Order of the Long Leaf Pine, honoring her 40 years of service to the Fayetteville, N.C.-based credit union and the Cumberland County community. The recognition was presented March 31 during the credit union's 57th Annual Meeting by Rep. Margaret Dickson and Sen. Tony Rand on behalf of Gov. Beverly Perdue. Stultz also received a congratulatory letter from the North Carolina Senate. From left are Dickson, Stultz and Rand. (Photo provided by Bragg Mutual FCU) …

Financial Literacy Month focuses on youth

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MADISON, Wis. (4/3/09)--Financial Literacy Month kicked off this week in a number of states, with gubernatorial proclamations, fitness fairs and educational workshops for youth, television shows to educate the public, and plans for motivating young members to save. Leagues reported that Maine Gov. John Baldacci, Washington state Gov. Chris Gregoire, and Pennsylvania Gov. Ed Rendell made special proclamations, observing the month as Financial Literacy for Youth Month, Financial Literacy Month or Financial Education Month, respectively.
Kerry Hayes, president/CEO of Lewiston (Maine) Municipal FCU, helps a student with her credit at the Credit Booth at a Financial Fitness-Money Management Experience, coordinated by Maine's credit unions, at Central Maine Community College in Auburn. (Photo provided by the Maine Credit Union League).
In Maine, the Norm Nolette Chapter of Credit Unions, with support from the Jeannette G. Morin Chapter of Credit Unions, held the Sixth Annual Financial Fitness Money Management Experience at Central Main Community College Wednesday. It was the 22nd fair in Maine since credit unions founded the event in 2004. Nearly 140 students from nine area high schools attended the half-day event, during which students checked in and received a scenario packet of their life at age 22. Jon Paradise, governmental and public affairs manager of the Maine Credit Union League and this year's master of ceremonies, noted, "With the troubled economy on the minds of many, there couldn't be a better time to educate students on the importance of being financially fit." Maine's credit unions will conduct two more Financial Fitness Fairs during the month. Pennsylvania Newsmakers, a television show hosted by Dr. Terry Madonna, featured Steven Kaplan, the state's secretary of banking, and Mike Wishnow, Pennsylvania Credit Union Association senior vice president of communications and marketing, discussing Financial Literacy Month (Life is a Highway April 2). Kaplan said there is a need to make financial education a lifelong learning process, beginning in kindergarten and continuing through adulthood. The program can be seen April 5-11 on television stations throughout the state. In Washington state, the Department of Financial Institutions is promoting financial education. Boeing Employees CU (BECU) is involved, offering a contest for elementary school students. During the month, students send in their best savings tip and are entered into a drawing. Fifteen winners will attend a BECU Savings Clinic at a Seattle Mariners' game. AmeriCU CU, based in Rome, N.Y., is expanding the Credit Union National Association's National Credit Union Youth Week (April 19-25) to a month-long celebration. It will use the Youth Week theme, "Magic of Saving," to encourage youth to save and manage their own money. The credit union will have magicians at select branches, and will offer prizes, literacy workshops, games and more to engage youth ages 5 to 18. Wright-Patt CU, Fairborn, Ohio, will conduct a community book drive to benefit literacy programs and schools near its 22 member centers. "Many organizations in the Miami Valley are facing a shortage of necessary supplies in these difficult economic times," said Jeff Carpenter, vice president of membership and development. "What better way to celebrate National Credit Union Youth Month than to invite our young members to help others in their own communities?" Wright-Patt will join others across the country in the National Credit Union Youth Saving Challenge. Others promoting the National Saving Challenge to encourage youth about financial matters and including special activities such as workshops and magicians include New Mexico Educators FCU, Albuquerque; DuPont Fibers FCU, Chesterfield, Va.; and Frontier Community CU, Leavenworth, Kan.

CU System briefs (04/02/2009)

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* DORCHESTER. Mass. (4/3/09)--Two people were arrested in connection with a robbery Wednesday of Tremont CU, Dorchester, Mass. Charges are pending, and the identities of the suspects had not been released, as of Wednesday, a police spokeswoman said. Two men wearing gray hooded sweatshirts and sunglasses walked into the credit union and said they had a bomb. The robbers demanded money and left with at least $200,000 stuffed into a bag before fleeing the scene (The Boston Globe April 2) … * FLORENCE, S.C. (4/3/09)--A 72-year-old woman, a former lending director at a South Carolina credit union, received a six-year sentence for embezzlement after taking out fraudulent loans in other people’s names and stockpiling more than $1 million between 1998 and 2006 to pay medical bills for her sick husband. Christine McLamb created new loans to pay off existing ones, altered records of members whose identities she stole so they wouldn’t notice and also to protect their credit, prosecutors said. McLamb stole the money from Health Facilities FCU, Florence, S.C., by creating 90 loans in members’ names, prosecutors said (The State.com April 1) … * RALEIGH, N.C. (4/3/09)--State Employees' CU has renovated more than 100 branches across North Carolina, equipping them with a handicap-accessible teller window. While its newer branch buildings incorporate the design, SECU chose to retrofit all its branches. The project took more than a year to complete. The new windows prompted member Tai Martin, who uses the Boone-New Market Street branch, to say that "it's nice to be able to actually see who I'm dealing with in the branch. With the lowered countertop, I don't have to use my knee to sign my name." Patty Munns, senior vice president of SECU's Facilities Services department said, "We have members who are confined to a wheelchair or have limited mobility, and whether they need this service temporarily or permanently, SECU is committed to making all branches member-friendly and convenient for everyone." … * TAMPA, Fla. (4/3/09)--Ed Gallagly, former CEO of Tampa-based Florida Central CU for 44 years, died Tuesday at home after a battle with cancer. He had served on the board of directors of PSCU Financial Services the past 11 years. Gallagly was one of the founders of the Filene Research Institute and served on its research council from 1990 to 1996. He was a director of Southeast Corporate CU from 1977 to 1980 and was a delegate to the World Council of Credit Unions for more than 30 years. He also created the annual Management Perspectives Seminar, which provided the opportunity for boards and CEOs to study international cooperative banking systems abroad. He authored Fair Deal, a book offering credit union alternatives to fringe banking abuses. Gallagly received the prestigious Herb Wegner Award for individual achievement, and was selected as CUES CEO of the Year. In 1997, he was inducted into the Florida Credit Union Hall of Fame. Services are at 10 a.m. ET today in Tampa (Tampa Tribune March 31) …

SECU mortgage program helps 1400 struggling members

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RALEIGH, N.C. (4/3/09)--Since its Mortgage Assistance Program (MAP) began in February, State Employees CU (SECU), Raleigh, N.C., has helped 1,400 members with loan balances totaling $140 million improve their financial situation. In many cases, members modified their mortgages and reduced their rates by 2% to 3%, which resulted in decreased monthly payments of several hundred dollars, SECU said. MAP helps members who may be in a delinquency or possible foreclosure situation, and who anticipate income loss soon. Options include mortgage loan extensions, mortgage loan modifications or refinances and partial-payment alternatives. Budgeting, financial counseling and debt restructuring also are part of MAP. Job loss, divorce and medical crises led to many delinquencies, SECU said. “As unemployment rates continue to rise and the job market wanes, more members are facing the difficult task of paying bills with less income,” said Phil Greer, SECU senior vice president of loan administration. “Some are facing home foreclosure, and SECU will do everything we can to keep that from happening.” SECU also developed the SECURE Mortgage. Members can consolidate their SECU mortgage balances and any other loans owed to SECU under a low-interest, first mortgage loan. Financing may be up to 100% of the value of the member’s primary residence. With a SECURE Mortgage, funds of up to $5,000 may also be advanced for an emergency savings account. SECU has $17 billion in assets.

Illinois CUs invest nearly 100 million in student loans

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NAPERVILLE, Ill. (4/3/09)--Illinois-based credit unions will invest nearly $100 million in securities issued by the Illinois Student Assistance Commission (ISAC) to finance low-interest, federally secured loans through the Federal Family Education Loan Program to Illinois students and their families. The loans will make college affordable for thousands of Illinois students for the second straight year. Twelve credit unions so far have committed to lending with the $100 million in funds secured last September. The figure could grow as new participants join and commitment levels increase in the next six months. The announcement of these funds will be made at a press conference today at Chicago-based Alliant CU, one of the participating credit unions. "Our message to Illinois' college-bound students and their families is that we will have plenty of money to lend you to go to school," said ISAC Executive Director Andrew Davis. "We salute our partner credit unions and the Illinois Credit Union League for again recognizing the importance of higher education for the public good and making sure Illinois students have access to federally backed, low-rate student loans," Davis added. The league played a critical role in security credit unions' support. "We are pleased to once again team up with ISAC and continue backing its efforts to help students get a quality education," said Dan Plauda, league president/CEO. In addition to Alliant CU, credit unions participating include:
* Baxter CU, Vernon Hills; * Citizens Equity First CU, Peoria; * CommonWealth CU, Kankakee; * Corporate America Family CU, Elgin; * Credit Union 1, Rantoul; * I.H. Mississippi Valley CU, Moline; * ISU CU, Normal; * Motorola Employees CU, Schaumburg; * Scott CU, Collinsville; * SIU CU, Carbondale; and * University of Illinois Employees CU, Champaign.
"The credit unions stood tall in providing the backing for us to meet the rising demand for student loans in the state of Illinois," said Illinois Designated Account PUrchase Program (IDAPP) Director Steve DiBenedetto. He invited students to explore their options at a newly redesigned website, IDAPP.com. Last year, a lack of liquidity, increasing tuition costs and federal policy changes cut lender profits and disrupted student lending in some states. State student loan agencies in Minnesota, Massachusetts and Pennsylvania ceased student lending operations, while IDAPP continued to lend through the year with the backing of credit unions.

CU capital continues downward decline

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MADISON, Wis. (4/3/09)--For the third consecutive month, credit union capital declined in February, according to Steve Rick, Credit Union National Association (CUNA) senior economist. The movement’s overall capital-to-asset ratio dipped slightly to 10.2% in February from 10.5% in January, according to the February CUNA monthly sample of credit unions. “The total amount of credit union capital now stands at $88.5 billion, down from the high water mark of $90.8 billion set last November,” Rick told News Now. “Credit union capital as a percent of total assets fell to 10.2 % in February, down from 11.1 % a year earlier. “With the recession expected to boost savings and asset growth to double digits in 2009, the overall credit union capital-to-asset ratio could fall to around 9% by year end,” he added. “Credit union buffers have not been that low since 1993.”
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Credit union savings balances rose 2.8%, to $728 billion in February from $708 billion in January. Share drafts led savings growth (7.7%), followed by individual retirement accounts (4.3%) and regular shares (3%). Money market accounts and one-year certificates increased 2.5% and 0.9%, respectively. “Credit union savings growth is off to a strong start in 2009,” Rick said. “Savings balances increased 4.4% through February, up from 3.8% for the similar period in 2008. Individual retirement accounts and money market accounts grew the fastest over the last year, rising 17.5% and 16%, respectively. “Share certificate growth has slowed to 3% over the last year as credit union members were unwilling to lock up their funds into a low-rate term deposit and had expectations of interest rates rising over the next few months,” he added.
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Credit union loans outstanding decreased 0.14% during February 2009, compared with 0.06% during the same period last year. Fixed-rate mortgages led loan growth, increasing 1%, followed by home equity loans (0.4%). Used-auto loans fell 0.01%, as did new-auto loans (0.55%) and adjustable-rate mortgages (0.66%). Credit card loans and unsecured personal loans dropped the most, 2.69% and 1.89%, respectively. The loans-to-savings ratio declined to 79.9% in February from 82.2% in January. The liquidity ratio increased to 19.9% in February from 18% in January. Credit unions’ 60-plus day delinquencies remained constant at 1.5% in February.

Judge hears arguments on Hannaford data breach trial

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PORTLAND, Maine (4/3/09)--A U.S. District Court judge heard arguments Wednesday and said he would decide in a few days whether supermarket giant Hannaford Bros. is potentially liable for damages from a data breach that exposed more than four million credit and debit card numbers to hackers last year. Judge D. Brock Hornby's upcoming ruling will determine whether parts or all of the suit, which was filed against the Scarborough, Maine-based grocer last year, will go to trial. Attorneys for Hannaford asked the judge to dismiss the case, while attorneys for the plaintiffs asked the judge to certify the case as a class-action suit and let it proceed to trial (Portland Press Herald and Maine Sunday Telegram April 2). The case examines two central questions, which Hornby said are "fascinating and difficult issues": To what extent are merchants responsible for security the electronic data that gets processed with every card-based purchase, and what should the consequences be when the data are stolen? Between Dec. 7, 2007, and March 10, 2008, cyber criminals hacked into Hannaford's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stores in Florida. Of the four million cards compromised, at least 1,800 numbers were stolen and used for unauthorized purposes. The breach was discovered Feb. 27, 2008, and Hannaford made the breach public March 17, 2008. Credit unions in New England, New York and Florida were among the financial institutions that re-issued cards for members whose accounts were compromised (News Now April 17, 2008). More than 20 lawsuits were filed after the breach. They were consolidated and assigned to the Maine court. Plaintiffs' attorneys seek damages for thousands time and money lost dealing with the theft, as well as damages because Hannaford allegedly knew about the breach at least three weeks before making a public announcement. The delay, said the attorneys, exposed consumers accounts to more fraud.

Pa. Senate passes robbery felony bill on to House

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HARRISBURG, Pa. (4/3/09)--A Pennsylvania bill that would establish robbery of a financial institution as a second-degree felony regardless of the method used to commit the robbery garnered support of the state Senate Wednesday. Senate Bill 605, introduced by State Sen. Mike Waugh (R-York), passed on a 49-1 vote (Life is a Highway April 2). “There is great concern with the lack of uniformity of sentences for robbery of a financial institution,” Waugh said. “Considering our current law does not specifically define and classify such robberies, it has been left to the courts to make the determination on a case-by-case basis.” S.B. 605 amends Title 18 (Crimes and Offenses) of the Pennsylvania Consolidated Statutes. The legislation addresses the specific action of taking or removing money of a financial institution, and would classify such a robbery as a felony of the second degree. Language is also included in S.B. 605 to ensure equal classification of all bank robberies, regardless of how the demand for money is made--orally or in writing. S.B. 605 now goes to the state House for consideration. The Pennsylvania Credit Union Association is in support of the bill (News Now March 26).

Florida state regulator issues ceasedesist against CU

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TALLAHASSEE, Fla. (4/3/09)--The Florida Office of Financial Regulation (OFR) has issued a cease and desist order against Eastern Financial Florida CU, a $1.69 billion asset credit union based in Miramar, Fla. The March 19 order, which the credit union consented to, outlines 15 practices the credit union must cease and orders the credit union to improve its capital level, establish a complete and effective management team, and deal with problem loans, including member business loans (South Florida Business Journal April 1). Last year, the credit union lost $40.2 million, which meant its net worth-to-total asset ratio fell dropped to 6.5%, below the regulator's 7% ratio required for a well-capitalized credit union. OFR's order requires Eastern Financial Florida to submit a plan to restore its net worth to well-capitalized levels. The credit union has not had a permanent CEO since Stephen McGill left the position in February 2008. OFR ordered it to evaluate all executive positions for weaknesses and hire additional ones, including a CEO. Other issues, said OFR, included operating without effective leadership or oversight; operating without adequate core deposits; operating without adequate policies to fund future losses of problem loans; operating without adequate loan writing standards and loan reviews; and carrying an excessive concentration of member business loans. According to the article, the credit union said it is addressing the concerns "quickly and fixing them so we can come out of this recession sooner than other financial institutions." The credit union's statement added it is proud of the work its staff has already done to mitigate the impact of the state and national economy.

NCUF posts free payday lending toolkit

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KANSAS CITY (4/3/09)--To help credit unions build sustainable payday loans as low-cost options for consumers, the National Credit Union Foundation (NCUF) has posted a toolkit of payday lending alternatives. Payday Lending: A REAL Solutions Implementation Guide is available for free download on the REAL Solutions Impact Center. The 121-page toolkit was developed by former Credit Union National Association Chairman Nancy Pierce, president of Tipton Research Group in Kansas City and a field coach for NCUF’s signature program, REAL Solutions. As one of five REAL Solutions field coaches, Pierce has worked with eight state credit union leagues to help more than 100 credit unions develop products and services for working families with low wealth and modest means. The guide is intended to develop solutions that are appropriate for each credit union and its membership, Pierce said. “It’s not a one-size-fits-all toolkit; several turn-key products are featured as examples," she added. "Ten credit union models were selected to offer a broad array of loan features, pricing structures and underwriting criteria.” The toolkit includes sample procedures and marketing materials, collection techniques, and time-tested loan results. It also includes interactive Excel worksheets to help each credit union make pricing decisions on open-end and closed-end loans. “Credit unions can be part of the solution to high-cost payday lenders,” said REAL Solutions National Program Director Lois Kitsch. “Payday loan alternatives enable credit unions to reach out to members who are struggling financially and help them break the cycle of debt.” Credit unions that research members’ other credit obligations find that 10% to 20% of members have outstanding debt at payday lenders, Kitsch said. She said members typically cite three reasons:
* Some members admit in focus groups they’re afraid their credit union will turn them down because they have credit issues; * Other members believe their credit union’s hours and/or location aren’t convenient when they need quick cash; and * Most members say their credit union doesn’t offer small, short-term unsecured loans that can be accessed quickly and conveniently.

iBelong commercials to air on Spanish radio

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HARRISBURG, Pa. (4/3/09)--Latino communities throughout Pennsylvania will soon be hearing “Yo pertenezco” (iBelong) radio commercials about the benefits of joining a credit union as part of Pennsylvania’s iBelong campaign.
The staff of WLCH Radio Centro in Lancaster, Pa., record iBelong radio spots in Spanish. (Photo provided by the Pennsylvania Credit Union Association)
The Pennsylvania Credit Union Association has announced that, beginning Monday, it will air two Spanish-language 30-second radio spots. The spots use a similar style and the same music from the original spots, and were recorded using voice talent from the staff of WLCH Radio Centro in Lancaster. The spots--“Never Knew” and “People are Great”--can be heard from the iBelong website. Mike Kaczenski, committee chair and CEO of Sun East FCU, Aston, said that sharing the iBelong message with the Hispanic community throughout Pennsylvania was recommended by the Advocacy Marketing Steering Committee. The spots will run as part of the campaign’s 2009 media plan, and will air in the Erie, Lancaster, Lehigh Valley, Philadelphia and Pittsburgh media markets.

Polish CUs Were Not Banks campaign nets results

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SOPOT, Poland (4/3/09)--Poland’s “Don’t Blame us. We’re not banks” campaign has generated significant publicity for credit unions in the country. The tagline appeared on billboards, newspaper ads, and in radio and television commercials. Major Polish newspapers and television news programs also reported on the two-week campaign. The message, developed by Poland’s trade association for credit unions, the National Association of Co-operative Savings and Credit Unions (NACSCU), also attracted anger from Polish banks. “The banks wanted the campaign banned,” said Pawel Grzesik, head of NACSCU’s Warsaw office. “They said the ads suggested Poland’s banks were not secure, something we never said. “We were right in defining ourselves as conservative institutions, and the current economic trends are paying us back for that position,” he added. “The Polish middle class has become very disillusioned with the banking industry.” About 70% of Poland’s banks are based in other countries. Grzesik said he expects foreign economic issues to affect Poland. “Poland is not an island, and we wanted to clearly differentiate ourselves from the banking industry’s challenges,” Grzesik said. “We received word that some of these institutions already are on the edge of liquidity crises, and we assume that financial problems in Rome, Frankfurt and Paris will soon find their way to Poland.” It’s important to spread the message that there is a different type of financial institutions, according to Grzegorz Bierecki, NACSCU president and treasurer of the World Council of Credit Unions’ board of directors. “People want to do business with institutions that will not hurt them,” he said. “Credit unions are local, member-owned institutions and the only ones people currently can trust.”

Heartland faces class action suit from investors

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NEW YORK (4/2/09)--Yet another class action lawsuit stemming from last year's data breach has been filed against cards processor Heartland Payment Systems, this time on behalf of investors who purchased or acquired the company's securities. Murray, Frank & Sailer LLP filed the lawsuit in the U.S. District Court for the District of New Jersey on behalf of investors who acquired securities between Aug. 5, 2008 and Feb. 23, 2009 (Business Wire March 27). The complaint charges Heartland and some of its executives with violations of federal securities laws, saying that during the period, Heartland made false and/or misleading statements and failed to disclose material adverse facts about its business, operations and prospects. Specifically, the complaint alleges, the company misrepresented or failed to disclose that:
* Its safety and security measures designed to protect consumers' financial information were inadequate and ineffective; * Its payment processing system had been infected with malware as early as May 2008; * It was aware of a potential breach of its payment processing network; * It faced liabilities associated with the breach and increasing costs associated with implementing appropriate security measures; * It was at risk of losing customers; and * It lacked adequate internal controls.
On Feb. 24, when Heartland reported its earnings for fiscal year 2008 and fourth quarter 2008, it disclosed it might incur losses form the security breach.

CUs in three states sue Heartland Payment Systems

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WEST PALM BEACH, Fla. (4/2/09)--Four credit unions from Florida, Alabama and Louisiana have filed a $5 million class action lawsuit against Heartland Payment Systems Inc., seeking damages from what could be the nation's largest data breach. The credit unions are PBC CU, West Palm Beach, Fla.; Gulf Winds FCU, Pensacola, Fla.; Alabama Rural Electric FCU, Montgomery, Ala.; and First Castle FCU, New Orleans. The suit was filed on their behalf Thursday in U.S. District Court for the Southern District of Florida in West Palm Beach. In the complaint, the credit unions allege that Princeton, N.J.-based Heartland, which publicly announced the breach on Jan. 20, was slow to notify its clients about the breach and that the delay caused additional damages. Heartland first learned of a possible breach in October of 2008. "Not only has Heartland kept its merchants, consumers and credit card issuers in the dark publicly, but it also has not informed many of them in private," the complaint alleges. Each credit union said it had to re-issue a substantial number of credit and debit cards to members whose accounts were compromised in the breach, which occurred sometime in 2008. The breach compromised credit and/or debit card numbers, expiration dates, internal bank codes, personal identifying information and/or confidential financial information of numerous consumers. The complaint did not specify how many cards each credit union re-issued. The credit unionseek reimbursement of the costs associated with replacing the cards and notifying members of the breach, time spent by employees on the issue, harm to reputation and goodwill, and fraud and misuse of the compromised information. The complain alleges that Heartland's actions constitute violations of the New Jersey Consumer Fraud Act; amount to a breach of implied contract or contracts to which the credit unions and other class members are intended third-party beneficiaries; and are negligent. The lead attorneys in the case are Gregory Scott Weiss and Theodore Jon Leopold of Palm Beach Gardens, Fla.-based law firm Leopold Kuvin.

Perimeter Creative Conficker worm brings challenges

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MADISON, Wis. (4/2/09)--The Conficker worm wasn't exactly an April Fool's Day joke. It didn't live up to its hype, according to media reporting the progress of the computer worm. That didn't surprise Kevin Prince, chief architect of Perimeter eSecurity, a CUNA Strategic Services provider. In his network security blog (see the resource link), Prince said he didn't expect anything significant to happen Wednesday. "Conficker is a fairly new worm that infects unpatched Microsoft systems turning them into 'zombies'--a computer under the command and control of someone else. Understand that when a system is compromised, the remote attacker now has higher level privileges on the system than the user does. When many zombies are 'harvested' (exploited by the malicious software worm), the cyber criminals organize them into what is known as a botnet," Prince said. A botnet is simply many compromised systems under the control of an individual or group. Botnets can range in size, but an average botnet compromises 250,000 computers, Prince said. "Conficker has been estimated as high as 10 million or more, but with a concerted effort over the last few months to tame Conficker, the estimates are between one and three million." However, any worm with several million computers under its command can "do some pretty significant damage," he said. That could include taking areas of the Internet offline in a distributed denial of service attack. But most of the time, botnets are used to send out large quantities of SPAM. Researchers and security professionals play cat and mouse to find new ways of identifying and removing malicious software such as Conficker, while the cyber criminals develop new ways of counteracting these tactics. "As a result, you get different variations of the worm. Just like a flu bug that changes from year to year, Conflicker is modified from time to time." A fourth variation on Conficker (the "C" variant) was set to be unleashed Wednesday. "We knew this because researchers had broken into the worm's code and detected that beginning April 1, the software would begin using several new enhancements," Prince said. The enhancements are what credit unions should be concerned about. They include new methods for communicating back to a master command and control system, which is much more difficult to stop than previous versions, Prince said. They also include new ways to spread from one system to another. This only affects systems that are already infected with the malware. With these enhancements in place, it would enable the cyber criminals in control of Conficker to perform some attack or use these systems more effectively while spreading/harvesting additional systems. " April 1st was simply the day the software gets enhanced. It has nothing to do with when the systems would be used for attacks. We simply can't know when they will use this botnet for their nefarious purposes. April 1st simply marks the day when they COULD do something," Prince said. "The good news is that all this media attention has put a spotlight on the issue and made a lot of people aware of this malware," he said, adding that patches, scanners and other tools are available to protect systems by detecting and removing the worm from infected systems. "There are now even scanning tools available for IT administrators to scan entire networks and detect infected systems so it no longer has to be done system by system," he said. "As a result, I believe the number of infected systems is going to be reduced significantly. Keep in mind that the majority of compromised systems are believed to be in Asia and India where pirated Microsoft operating systems are heavily used." "The bad news is that this variant of the worm has some very creative communication methods and other enhancements that post significant challenges to researches to stop this and future worms like it." Although nothing significant happened on April Fools Day with Conficker, the attention paid to it makes the world "a little bit safer," Prince said. Many will probably think of this as a cyber fire drill that worked fairly well. In another development Wednesday, authorities arrested three teenage ex-software developers they believe are the Conifer worm hackers (yourfindit.com April 1).

Top 10 INews NowI stories for March

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MADISON, Wis. (4/2/09)--Here are the Top 10 News Now stories most requested by readers during March. Use the link to review the entire story online. 10. NCUA starts stakeholder reports on corporate CUs ALEXANDRIA, Va. (3/30/09)--The National Credit Union Administration (NCUA) Friday began what it said would be periodic reporting to stakeholders on the status of the corporate credit union system. 9. House approves cramdown bill WASHINGTON (3/6/09)--The U.S. House of Representatives yesterday voted 234-191 in favor of H.R. 1106, Helping Families Save Their Homes Act, which contains a mortgage cramdown provision that will affect credit unions. 8. Flexible accounting stance may come from NCUA WASHINGTON (3/30/09)--If an accountant is willing to be flexible about when a credit union books the cost of its 1% premium being assessed to replenish the National Credit Union Share Insurance Fund, the National Credit Union Administration said it will be okay with that. 7. NCUA to consider corporate CU issues Thursday ALEXANDRIA, Va. (3/24/09)--A special closed meeting has been called for Thursday morning by the National Credit Union Administration to look at possible plans to spread out the cost to natural person credit unions of the agency's corporate credit union stabilization efforts. 6. New NCUA bill would spread out replenishment ALEXANDRIA, Va. (3/27/09)--The National Credit Union Administration announced Thursday that it has drafted legislation allowing credit unions to spread the cost of the National Credit Union Share Insurance Fund replenishment over as many as seven years 5. NCUSIF shows preliminary accounting decisions ALEXANDRIA, Va. (3/2/09)--The most recent monthly National Credit Union Share Insurance Fund report showed the fund booked both the expenses and the income associated with the corporate credit union stabilization plan in January. 4. Details to Obama loan mod plan released WASHINGTON (3/5/09)--The Obama administration released details Wednesday of its mortgage loan modification program first announced Feb. 18. 3. CUs get accounting guidance for corporate plan costs WASHINGTON (3/11/09)--The American Institute of Certified Public Accountants yesterday issued guidance on how credit unions may account Corporate Stabilization Plan. 2. NEW: Corporate CUs: Corporate costs must be spread out, Mica says WASHINGTON (3/23/09, UPDATED 11:30 a.m. ET)--The Credit Union National Association called on the federal credit union regulator and lawmakers to mitigate the costs of its decision to place two corporate credit unions into conservatorship. 1. CUs urged: Contact NCUA before corporate action today WASHINGTON (3/26/09)--Credit unions are asked to urge each National Credit Union Administration board member to provide greater transparency regarding a report by Pacific Investment Management Company LLC (PIMCO) on corporate credit unions.

Member who was shot tried to follow robber

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KANSAS CITY, Kan. (4/2/09)--A man who was shot several times after Credit Union of Johnson County, Lenexa, Kan., was robbed may have been shot while following the man who held up the credit union. Federal charges were filed Tuesday in Kansas City against Nicholas E. Kamphaus, 26, for one count of armed bank robbery. Kamphaus was arrested Sunday. Kamphaus allegedly entered the credit union Saturday and demanded money from one of the tellers, according to a criminal complaint. He took money from two of the teller stations and fled in a sport utility vehicle, the Department of Justice said in a release Tuesday. After the robbery, a member tried to enter the credit union’s building. An employee told him that a robbery had taken place and the lobby was closed. The man said he’d seen the robber and was going to follow him, according to the press release. Lenexas police then responded to a report of shots fired near the credit union. They found a man in a grey minivan with gunshot wounds. The victim told police he’d been shot by the robber. The next day, police received information from a witness that the robber’s vehicle was parked at a house near the credit union. Police went to the residence and uncovered shell casings from the vehicle that matched the casings found near the minivan. Kamphaus faces a maximum penalty of 25 years in federal prison and a fine up to $250,000.

Pennsylvania couple sues CUMIS

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PITTSBURGH (4/2/09)--A Pennsylvania couple is suing CUNA Mutual Insurance Society (CUMIS) through a class action lawsuit that alleges CUMIS was in error when it stopped disability insurance coverage for credit union loans. The suit alleges that CUMIS incorrectly stopped disability coverage 10 years after the loan began--rather than 10 years after the man who took out the loan lost his job (USA Today March 31). Ronald and Donna Ogrizovich of Aliquippa, Pa., filed the suit, which also claims CUMIS doesn’t adhere to Pennsylvania law by warning customers when such policies don’t cover the entire loan term. When the couple got a second mortgage from their credit union in October 1997 they agreed to pay extra for disability insurance, the newspaper said. The couple claims they were told the insurance would pay for 10 years of mortgage payments in the event the policy holder became disabled. The suit alleges the couple made payments--biweekly payments of $238 until August 2003, when Ronald Ogrizovich--an airport baggage handler--lost his job due to severe arthritis, the paper said. The lawsuit says that CUMIS stopped payments in October 2007, asserting the 10-year policy began when the loan did, the paper said. “We don’t believe that the suit has any merit,” Maripat Blankenheim, CUNA Mutual Group spokeswoman told News Now. “We certainly are defending [our position] and believe we will be successful in that defense.” The case has been moved to U.S. District Court in Pittsburgh, the paper said.

Ohio lawmakers hear message CUs safe sound secure

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COLUMBUS, Ohio (4/2/09)--Nearly 80 Ohio credit union leaders converged on the state Capitol Square Tuesday to share insight into credit union initiatives with their state legislators during Credit Union Day at the Statehouse.
Rose Bartolomucci, assistant superintendent of credit unions for the Ohio Division of Financial Insitutions, addresses credit unions at Ohio's Credit Union Day at the Statehouse.
In all, they conducted 82 meetings with Ohio General Assembly members. Discussions centered on mortgage moratoriums and allowing credit unions to accept municipal deposits. Attendees also heard top state legislative and political leaders discuss their agendas. Speakers included House Speaker Armond Budish (D-Beachwood), Senate Finance and Institutions Chair John Carey (R-Wellston), state Treasurer Kevin Boyce, and state Auditor Mary Taylor. Credit union regulators from the Ohio Division of Financial Institutions also addressed the group. "We have great credit union leadership in the state of Ohio, and they understand the importance of building relationships with their local leaders," said Ohio Credit Union League General Counsel John F. Kozlowski. "With so many pieces of legislation focused on financial institutions, we need to make sure our state leaders understand that our credit unions are safe, sound, secure, and ready to lend," he said. A reception, sponsored by OCUL Services Corp., was held after the meetings.


From left, Tamlyn Straight-Schervish, CEO of Unity Catholic FCU in Cleveland, Ohio House Speaker Armond Budish (D-Beachwood), and Jennifer Ferguson, CEO of Bay Area CU, Oregon, Ohio.

Aaron Michael of Atomic CU, Waverly, Ohio, discusses credit union legislative initiatives with Ohio state Rep. Kris Jordan (R-Powell).(Photos provided by the Ohio Credit Union League)

Alabama league introduces data security legislation (04/01/2009)

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BIRMINGHAM, Ala. (4/2/09)--The Alabama Credit Union League (ACUL) introduced a bill in the Alabama legislature to protect consumers’ financial data. Senate Bill 545 is sponsored by State Sen. Roger Bedford (D-6), and House Bill 797 is sponsored by State Rep. Tammy Irons (D-1). The legislation, originally introduced in the 2008 session, generated significant discussion in the legislature, said the league. “We knew going into this that legislation of this magnitude takes multiple sessions to pass,” said Gary B. Wolter, ACUL CEO. “However, with new breaches still occurring, such as the Heartland [Payment Systems] breach, it is imperative that we keep pushing this important piece of legislation, gaining momentum and traction in the legislative process. Credit unions and their members appreciate the hard work of Sen. Bedford and Rep. Irons for their dedication to this important bill.” The bill contains three major provisions to address the growing problem of sensitive financial information being compromised. It:
* Requires that entities experiencing a data breach must notify consumers. Alabama is among a shrinking number of states that has no notification requirement, leaving financial institutions and consumers with inadequate information to protect accounts after a breach, ACUL said. * Prohibits the retention of sensitive consumer financial data, such as the content of a magnetic stripe on a plastic card, a personal identification number, or a card validation code. The requirement follows the existing standards from the Payment Card Industry Data Security Standard. * Requires any entity that experiences a breach and that has held such prohibited data reimburse the issuing financial institution for the cost of reissuing cards and /or take appropriate steps to protect accounts at risk.
“This legislation will help ensure that anyone who uses this most sensitive account information must be as careful with it as are credit unions,” Wolter said. “Essentially, the bill protects consumers and ensures a fair environment for everyone because when someone other than the consumer’s financial institution stores all the keys to a person’s account, it creates problems. It is not a question of if there will be a serious breach, only when it will be and how bad will it be.”

CU System briefs (04/01/2009)

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* SHREVEPORT, La. (4/2/09)--National Credit Union Administration (NCUA) Vice Chairman Rodney Hood is scheduled to speak at the 2009 Annual Membership Meeting for Shreveport (La.) FCU Tuesday, announced Helen Godfrey Smith, president of the credit union. "Mr. Hood has a thorough understanding of the needs of credit unions during these times of economic uncertainty," said Godfrey Smith. "He recognizes the opportunities facing the credit union industry going forward. Our members and guests will gain an in-depth understanding of financial issues and the safety and soundness of credit unions," she added … * CEDAR RAPIDS, Iowa (4/2/09)--The shutdown of a Sealed Air Cryovac manufacturing plant in Cedar Rapids, Iowa, has prompted the merger of Cryovac Employees CU with Dupaco Community CU, based in Dubuque. Cryovac's office in the plant closed Tuesday after the merger was approved overwhelmingly by members at a special meeting Saturday. The merger was effective Wednesday, with Cryovac members having access to Dupaco's full products and services. State and federal credit union regulators approved the merger. Cryovac had 638 members and more than $2.7 million in assets. A full-time employee at Cryovac has joined the staff at Dupaco, which has $546.1 million in assets (Cedar Rapids Gazette March 31) … * WESTBROOK, Maine (4/2/09)--Maine CUs' Campaign for Ending Hunger made its largest, one-time donation--$19,000--to the Good Shepherd Food-Bank. The amount represents the 19 years the credit unions have raised funds for ending hunger. The contribution, made in memory of JoAnn Pike, founder of the food bank, brings the total raised in her memory to $81,000 and the total raised over the 19 years of the campaign to more than $375,296, a record. From left are Luke Labbe, president/CEO of PeoplesChoice CU and chair of the Maine Credit Union League's Social Responsibility Committee, and Rick Small, executive director of Good Shepherd Food Bank. (Photo provided by the Maine Credit Union League) … * GREENVILLE, Tenn. (4/2/09)--A woman convicted of embezzling $105,900 from member accounts at the Rogersville, Tenn., branch of Kingsport-based Appalachian Community FCU, has been sentenced to 30 months in prison, followed by five years of supervised release. Trena Bledsoe, who pleaded guilty to embezzlement and making a false statement in connection with a bankruptcy, faced a maximum sentence of 30 years in prison and $1 million in fines. The embezzlements occurred between April 2006 and August 2007. Court records indicated Bledsoe placed an electronic flag on three members' accounts, which prevented the credit union from mailing statements to the members. (TimesNews.net March 31) …