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CU System briefs (05/20/2010)

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* WISCONSIN RAPIDS, Wis. (5/21/10)--Bull's Eye CU was awarded nearly $85,000 of $540,000 allegedly embezzled by the former president of Rapids Municipal CU, Wisconsin Rapids, in a settlement agreement filed in a U.S. District Court in Madison, Wis. Bull's Eye acquired Rapids Municipal CU in December 2008 after authorities discovered the money missing. Rapids Municipal's former president, David K. Henke, was indicted by a grand jury for bank fraud and embezzlement, but was found dead after he missed the plea hearing. The $85,000 Primevest investment account was held by his former spouse, Laurie Henke, who received it as part of their divorce. The government seized the account last year, saying it was directly traceable to the fraud. Bull's Eye claimed it was entitled to the money because it lost $540,000 to the embezzlement plus spent $166,000 to investigate it. The agreement reached Monday remains pending before U.S. District Judge William Conley (WisconsinRapidsTribune.com and Wausau Daily Herald May 20) ... * DES MOINES, Iowa (5/21/10)--The U.S. Small Business Administration (SBA) recognized Dupaco Community CU, Dubuque, Iowa, as its 504 First Mortgage Lender of the Year in Iowa during the Iowa Smart Conference in Des Moines May 6. SBA's 504 program provides long-term fixed-asset financing to small businesses. In it, lenders finance 50% of the cost and take a first mortgage position on the assets financed while an SBA certified development company finances 40% of the project. The small business provides a down payment that can be as low as 10%. The award goes to an SBA lender who demonstrates outstanding commitment to small businesses in the community through increased participation in multiple SBA 504 program loans. Dupaco was the first mortgage lender on three 504 deals in Dubuque in 2009. Its share of financing accounted for more than $849,000 but made available more than $1.5 million in total project dollars, creating 14 jobs and retaining eight others. Also, Dupaco approved 14 loans for $362,000 in 2009 ... * BATTLE CREEK, Mich. (5/21/10)--Inspire Community Development CU opened Monday in Battle Creek, Mich., with 13 new accounts opened. The new credit union aims to help low-income people get out of debt and save for the future, said Battle Creek Inquirer May 19). Members can start a savings account with $5 and staff will teach them how to pay down debt, apply for loans, save for emergencies and other financial skills. Its grand opening will be June 14 ...

Heartland MasterCard in 41.1M settlement

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PRINCETON, N.J. (5/21/10)--Heartland Payment Systems Inc. has agreed to pay MasterCard Worldwide $41.4 million to resolve claims from MasterCard and its issuers related to the 2008 breach of Heartland's payment system environment. The announcement comes five months after Heartland agreed to pay up to $60 million to issuers of Visa-branded credit and debit cards (News Now Jan. 11). Heartland also entered into settlements of $3.6 million with American Express and $2.4 million in a consumer cardholder class action lawsuit (News Now Dec. 21 and Dec. 29). Under the newest agreement, alternative recovery offers totaling $41.4 million will be made to eligible MasterCard issuers for losses they claimed as a result of the breach. Also under the agreement, MasterCard will recommend that eligible MasterCard issuers accept such offers. Like the Visa settlement, the MasterCard settlement is contingent upon financial institutions representing 80% of the claimed-on MasterCard accounts accepting the alternative recovery offers. The issuers have until June 25 to accept the settlement offer. This latest settlement also includes mutual releases between Heartland and its sponsoring bank acquirers on the one hand--and MasterCard and the accepting issuers on the other. Issuers that accept the alternative recovery offer must waive rights to any other recovery for claims of losses related to the breach from Heartland and its sponsoring bank acquirers through litigation or other remedies. They also must release MasterCard, Heartland and its sponsoring bank acquirers from all legal and financial responsibility related to the intrusion. All eligible issuers will receive notification from MasterCard with full details of the settlement agreement and how to accept their alternative recovery offers before the offers expire. The breach, which was announced in January 2009, exposed information from 130 million credit and debit cards--the largest breach on record. Its ramifications are still being felt. Last month, MidFlorida CU in Lakeland, Fla., said it would reissue 12,000 debit cards after recent fraud attempts stemming from the Heartland breach (News Now April 6). And CUNA Mutual's Risk Protection Center reported in January that fraudsters were still testing and successfully accessing the numbers not blocked or canceled in the Heartland breach (News Now Jan. 12).

American woman in Nigerian prison for forged checks

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LAGOS, Nigeria (5/21/10)--An American woman was sentenced Wednesday to a 24-year prison term with hard labor by a court in Lagos, Nigeria, for forgery and counterfeiting that involved foreign checks--including those of a credit union. Sharon Denis Thorpe, 27, pleaded guilty to 12 counts of forgery and counterfeiting 200 foreign bank checks. A Nigerian, Musediku Kehinde, was charged alongside her with 13 counts of forgery and counterfeiting (All Africa Global Media May 19). The two were accused of possessing 200 foreign bank checks, and fraudulently forging eight foreign banks cashier checks valued at $40,223. Included with the checks were those of Mountain America FCU, West Jordan Utah. Thorpe and Kehinde were arrested in February in Lagos while trying to export the checks.

CU workers in N. Dakota win 250K in lottery

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JAMESTOWN, N.D. (5/21/10)--Roy Musland, 17 fellow employees of First Community CU in Jamestown, N.D., and one former employee of have been pooling their money and playing the lottery for the past six years. It finally paid off. On Wednesday, Musland arrived at work and saw an e-mail from a co-worker, Sharmon Zachrison, saying he and some other employees needed to participate in a conference call later that morning. “I was wondering what was going on,” Musland told News Now. “Then, during the conference call, Sharmon said we matched five of five lottery numbers.” The group won $250,000. The winning numbers were 11-13-19-37-40. Zachrison is in charge of buying the tickets. There are two drawings per week at a contribution of $2 per person, Musland said. When he and his colleagues realized they had won, it was “total pandemonium,” he said. “People were laughing, crying, and rolling around on the floor. I kept saying, ‘You’re kidding me, you’re kidding me.’” Musland, his 17 co-workers, and the former employee, who will each receive about $9,100 after taxes, exchanged stories about what they plan to do with the money. Some will use the winnings to pay bills, take trips, or a combination of the two. One woman at First Community who got married several years ago plans to use the money so she and her husband can take a honeymoon. Their win--a one-in 3.9-million chance--was also the first for the state of North Dakota for Mega Millions, which is great for the state and community, Musland said. The employees plan to continue playing the lottery. “We’re all here today,” Musland said. “We’re not quitting our jobs. The most fun part of it is that there are so many people who are happy for us, and so many members who are excited for us.” First Community CU has $323 million in assets.

Wisconsin CUs program to boost investing by underserved

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PEWAUKEE, Wis. (5/21/10)--An investor education project that, since last fall, has provided online investor education to Wisconsin credit union employees, is taking on a new challenge. Credit union staff statewide will complete advanced investor education online, then try to motivate the least likely investors to make positive financial strides--financially underserved or low-wealth individuals. As many as 5,000 such citizens could benefit in the first year alone, said the Wisconsin Credit Union League. “Most Americans haven’t done any retirement planning,” said Brett Thompson, president/CEO of the league, which is coordinating credit unions’ effort. “But we can’t afford to let the failure of entire generations to plan for their futures become a public burden. That burden would be enormous--totally unsustainable. So we can’t afford to let the average citizen--those who live paycheck to paycheck--think they can’t become successful investors.” In July, up to 25 credit union employees statewide--who completed basic investor education online in an ongoing study of 3,520 credit union staff from 80 credit unions--can apply to enroll in 50 additional hours of online investor training this fall. The graduates will earn a Certified Financial Educator (CFEd) designation valued at $1,700. Each grad will then train at least 100 financially underserved or low-wealth individuals to turn modest contributions to investment accounts into significant assets. “By offering advanced training, we’re applying a basic concept of investing--exponential growth--to the challenge of expanding our reach,” Thompson said, noting that the program can make swift in-roads to bring investing tools and financial success to people who might otherwise never attempt to advance their financial position. “Modest wage earners often mistakenly believe that they can’t ever get ahead because they feel they have too few dollars to invest,” he added. “That’s one of many fallacies our training corrects. Every person with income, no matter how modest, can secure a solid financial future through investing.” The basic investing project kicked off last October and will continue through early 2011. Dubbed “RP3,” or REAL Progress & Pathways to Prosperity, the project engaged participants in roughly 10 hours of online learning about investment concepts, including setting goals, distinguishing among investment vehicles, managing risk, diversifying a portfolio, maximizing tax advantages, understanding mutual funds and working with investment professionals. The first phase involved 53 credit unions, whose 1,623 employees completed the courses in December with passing grades averaging 88.17%. Their knowledge of investing concepts increased 28.27%. In January, another 1,897 employees from 56 credit unions began the coursework. Upon completion of their studies in April, that group achieved an average passing grade of 87.69% and improved its knowledge an average of 23.31%. Credit unions are participating in the RP3 project as part of their REAL Solutions initiative, which helps people of all income levels build wealth. Both phases of the program are being conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, the University of Wisconsin-Madison, Precision Information, the Wisconsin Credit Union League, Gov. Jim Doyle’s Council on Financial Literacy and the Wisconsin Department of Financial Institutions. Funding for the latest phase includes a $15,000 grant from the National Credit Union Foundation and a $53,000 grant from the Investor Protection Trust (IPT), a nonprofit organization devoted to investor education.

TruMark Financial ad campaign takes on big banks

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TREVOSE, Pa. (5/21/10)--TruMark Financial CU has launched a public awareness campaign about an alternative to big bank bailouts, mergers and acquisitions, and excessive compensation among executives. The $1.2 billion asset, Trevose, Pa.-based credit union said such concerns have caused consumer confidence in big banks to plummet and frustration to soar. TruMark Financial began airing three TV commercials in the Philadelphia region on May 12. The spots tout the credit union as the trusted source for consumers’ financial needs and depict the lifestyle enjoyed by big banks’ leadership at their customers’ expense--a sore spot for many consumers. More than 40% of 1,050 households polled by Polk-Lepson Research Group on behalf of TruMark Financial said they were “very concerned” about big bank executives receiving excessive compensation. The research results also underline the public’s distrust and discontent with big banks following government bailouts, the collapse of the housing market, skyrocketing interest rates on credit cards, and increasingly higher fees. More than one-third of those polled expressed concern over big banks closing credit card lines and raising credit card interest rates, the credit union said. In contrast, TruMark Financial’s public awareness campaign reinforces the benefits of switching to TruMark Financial--no hidden fees, competitive rates and superior service. To complement the TV commercials, a series of radio commercials are airing on Philadelphia area stations and billboards are in place throughout Southeastern Pennsylvania. Ads also are displayed on buses. The commercials will run over nine weeks, and the billboards will remain in high-traffic areas for six months. While each spot is unique, the underlying message is the same: TruMark Financial is focused on its members. “At TruMark Financial it’s about you. Your family. Your money. No bailouts. No greed. No hassles,” proclaims one radio commercial. “Based on the data, we feel this is an appropriate time to let consumers know TruMark Financial has no hidden fees, has no credit card tricks, provides superior service, has competitive rates, and is a strong financial institution,” said Richard F. Stipa, TruMark Financial CEO.

CU-backed candidate loses bid in Oregon

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BEAVERTON, Ore. (5/21/10)--A credit union-backed candidate lost his bid for state treasurer in Oregon, but the Credit Union Association of Oregon (CUAO) said it was thrilled so many credit unions reached out to support him. Sen. Rick Metsger (D-Ore.) had run for state treasurer in Tuesday’s state primary election. Several credit unions in the state had placed messages of thanks on their websites to support Metsger, a longtime credit union friend. “While the election didn’t turn out as we had hoped for Metsger, we were thrilled that so many credit unions reached out with a message in support of Metsger through their websites and social media tools,” said Laura Wieking, CUAO communications director. “Oregon has a very active advocate base and as technology advances, we’re encouraged to try new tactics to support friends of credit unions who are running for office,” he said. “We believe it is important to support those who have supported credit unions, and Metsger was our leading advocate in the Senate for many years.” Credit unions supporting Metsger included:
* Valley Health and Postal CU, Salem; * Unitus Community CU, Portland; * Northwest Community CU, Eugene; * OSU FCU, Corvallis; * Oregon Community CU, Eugene; * OnPoint Community CU, Portland; * Advantis CU, Portland; and * US Agencies CU, Portland.

Phish attacks vs. CUs decline 8 in March

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BEDFORD, Mass. (5/21/10)--Phishing attacks against U.S. entities decreased 5% in March, with attacks targeting credit unions declining 8%, according to the most recent RSA Online Fraud Report. The April Fraud Report, which covers March, was released by the Bedford, Mass.-based RSA Anti-Fraud Command Center. The study counted 17,559 attacks during March. Also declining were fast-flux attacks, with the number of attacks using this method decreasing 57%, said the report. RSA said the shift has had links to the diminished activity of the Rock Phish ganag and a cut-off of the AS-Troyak infrastructure that disconnected numerous malicious networks from the Internet. RSA continues to watch for a comeback by the Rock Phish gang, which is known to deliver attacks solely over its fast-flux infrastructure and bulletproof hosting. Fast flux refers to a method by which a domain name used by phishers has multiple internet provider (IP) addresses assigned to it. Phishers switch domains quickly among the addresses. That means the address is not easy to shut down. Instead of asking one IP provider to shut down the address, authorities must go to the domain name register, which is more time consuming. In March the number of brands attacked totaled 275--a decrease from February's 282 brands attacked. Brands that were attacked five times or less make up 56% of the total, RSA said. The number of entities experiencing their first phish attack in March dropped to 20 from 31 in February. This could indicate a focus by phishers to launch a larger number of attacks on a smaller number of brands, the company said. Regional bank brands--after being the most targeted among the financial sector in the U.S. for nine consecutive months--finally got a break. Nationwide bank brands became the most targeted brands in March, with a 29% hike in attacks, while regional banks fell 21% and credit unions fell 8%. Credit unions accounted for 4% of the attacks in March, compared with 22% of attacks in March 2009. Regional banks were targeted in 39% of phishing attacks, compared with 56% a year earlier. Nationwide U.S. banks bore the brunt of 57% of the attacks, compared with 11% in March 2009.

CUNA Mutual celebrates classic 75th anniversary

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MADISON, Wis. (5/21/10)--CUNA Mutual Group employees celebrated the 75th anniversary of the company’s incorporation Thursday with activities aimed at recognizing the company’s history serving credit unions and their members.
Click to view larger image A classic car show Thursday in Madison, Wis., was one of the events CUNA Mutual employees participated in as part of the company's observance of its 75th anniversary. The restored 1935 Chevrolet was used in “Public Enemies,” a film about John Dillinger's life of crime, starring Johnny Depp. (Photo provided by CUNA Mutual Group)
Employees at the company’s Madison, Wis.; Waverly, Iowa; and Fort Worth, Texas, locations picnicked and participated in other activities commemorating CUNA Mutual’s incorporation on May 20, 1935. “This is a special year for CUNA Mutual as we recognize and celebrate our company’s 75th anniversary,” said Jeff Post, president/CEO of CUNA Mutual. “Thursday was perfect picnic weather and a great day to celebrate our enduring partnership with credit unions and the communities in which we operate.” In Madison, more than 20 classic cars were displayed by employees and others. One vehicle, a 1935 Chevrolet Two-Door Standard, was used in the filming of “Public Enemies,” shot primarily in Wisconsin and starring Johnny Depp. The car, owned by Wayne and Linda Schuette, was accompanied by memorabilia from the movie, based on John Dillinger’s legendary life of crime. At a companywide staff forum, CUNA Mutual displayed a commendation from Wisconsin Gov. Jim Doyle, who acknowledged the company’s contributions to the community and the marketplace it serves. Hundreds of employees staked out picnic areas early and took part in outdoor games. They also participated in indoor games, including the “Heritage Challenge,” a historical interactive game that tested employees’ knowledge of the credit union movement and the company's close ties to the not-for-profit financial cooperatives. CUNA Mutual has other anniversary recognition events planned for June, in August when the company opened for business, and in October when it paid its first claim for $40 on the death of a Milwaukee Road railroad switchman.