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Court upholds sending part of breach suit to Fla.

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BOSTON (5/8/09)--The lst U.S. Circuit Court of Appeals has upheld a Maine federal court's decision to remand one of the class action lawsuits it received involving the Hannaford Bros. data breach back to a Florida court for litigation. The case was remanded under the Class Action Fairness Act (CAFA) home state exception to federal jurisdiction ( May 7) in an opinion Friday by a three-judge panel. More than 20 lawsuits were filed against the supermarket chain and its affiliates after a data breach exposed more than four million credit and debit card numbers to hackers last year. The Maine U.S. District Court had consolidated a number of cases from New England, New York and Florida, where the hacked supermarket accounts were located. The plaintiff in the remanded case had sued Kash 'N Karry Food Stores Inc., which does business as Sweetbay Supermarket and Sweetbay Liquors, in a Florida court,. Kash 'N Karry had the case removed to a Florida federal court under the CAFA provision. That case eventually was combined with the multidistrict litigation because corporate entities related to the grocery faced similar claims. Credit unions in New England, New York and Florida were among the financial institutions that reissued cards for members whose accounts were compromised in the Hannaford Bros. breach. 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 made public by Hannaford on March 17, 2008.

2009 Youth Saving Challenge smashes record

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MADISON, Wis. (5/8/09)--The Credit Union National Association’s (CUNA) 2009 National Youth Saving Challenge has more than doubled last year’s record in deposits. The challenge brought in more than $26 million in deposits, compared with $12 million brought in last year.
Click to view larger image Preschoolers from the Jefferson DeFrees Family Center got to peek in the vault of WACOPSE FCU, in Warren, Pa., during Youth Week. (Photo provided by WACOPSE FCU)
“By more than doubling the amount they saved last year, our young members have told us loud and clear that they believe in the future,” said Dan Mica, CUNA president/CEO. “Their willingness to set money aside for their goals during a severe recession should inspire the rest of us to redouble our efforts to advance the credit union principles of thrift and the productive use of credit. This phenomenal vote of youthful optimism could not have come at a better time.” About 397 credit unions reported receiving deposits from 139,669 young members, including 10,006 who opened new accounts. This year’s results average out to $190 deposited per child. Last year’s nearly $11.8 million savings total averaged $156 deposited per child, up from $87 per child in the 2004 inaugural year. For the first time, credit unions had the option of hosting the challenge throughout April, which was National Financial Literacy Month.
Click to view larger image Bubbles the Clown taught financial literacy concepts through magic tricks at an annual kid’s night during Credit Union Youth Week at Atlantic Financial FCU in Hunt Valley, M.D. (Photo provided by Atlantic Financial)
“We didn’t limit it to National Credit Union Youth Week to give credit unions more flexibility," said Lin Standke, CUNA’s manager of youth programs. “There is good news coming out of this economic mess we’re in, and it's that youth are learning to save at their credit unions.” CUNA also selected 10 credit unions at random from those who reported their results to receive $100 each, to award to the young saver of their choice. The winning credit unions are:
* PCM Employees CU, Green Bay, Wis.; * St. Pius X Church FCU, Rochester, N.Y.; * Good Shepherd CU, Lincoln Park, Mich.; * Eastmill FCU, East Millinocket, Maine; * Mountain Laurel FCU, Saint Marys, Pa.; * Service Plus CU, Riverside, Calif.; * Two Harbors (Minn.) FCU; * Service 1 FCU, Muskegon, Mich.; * Canton (Ohio) Police and Firemens CU; and * Portland (Mich.) FCU.
Next year’s Youth Week will be April 18-24.

Speaker Streamlined loan process can ease Reg Z change

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MILWAUKEE (5/8/09)--Understanding their lending process and simplifying it to accommodate applicants and staff will help credit unions determine how multi-featured open-end lending can benefit them and their members. So says Robert Israelite, CUNA Mutual sales specialist, speaking to members of the Wisconsin Credit Union League Thursday at the league’s annual convention in Milwaukee. Israelite, who serves credit unions in southern Wisconsin and nine other states, provided information for the group on compliance changes to Regulation Z, which deals with how credit unions conduct their lending business. The Federal Reserve Board recently issued regulatory changes that specifically affect multi-featured, open-end lending--a practice used for nearly 30 years that allows a credit union and a member to have a single lending contract covering multiple lending products. Under the plan, the member can have multiple sub-accounts with different program features and rate structures. The final rule keeps the multi-featured, open-end lending program intact with the several commentary changes:
* Each sub-account is not required to have a self-replenishing credit limit; * Language was retained that views the plan as a whole while some features may be used infrequently; and * Credit unions are permitted to verify information in certain circumstances to assure continued creditworthiness.
Although credit unions have until July 1, 2010, to comply with the new rules, Israelite cautioned the group to “understand your entire lending process across all delivery channels from start to finish” to ensure the maximum benefits of multi-featured open-end lending. “The loan experience should be engaging and efficient,” he said. “Look at how many times a loan is handed off before it is closed. Each hand-off makes the entire process that much more complicated.” To illustrate, Israelite showed a complex diagram of what might be considered a typical lending transaction. “If this looks like your lending process, you probably need to simplify what you’re doing,” he said. Changes to the regulation may also require credit unions to change their policies, procedures and documents. Israelite urged the group to “work with business partners who understand these changes and whom you can trust.” Despite challenges to the practice of multi-featured open-end lending by some other financial institutions, Israelite stressed the importance of the ability to provide this product to credit union members. “Multi-featured open-end lending is still a viable and legal way to conduct lending transactions,” said Israelite. “The Federal Reserve Board had an opportunity to do away with multi-featured open-end lending by removing the commentary all together. They chose to keep it in.” The Credit Union National Association and CUNA Mutual will continue to analyze the recent Regulation Z changes to determine the extent that they may impact multi-featured, open-end lending.

Auto leaser CU Fleet files to dismiss bankruptcy

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MILWAUKEE (5/8/09)--CU Fleet, a Wisconsin-based auto lease dealership that filed for Chapter 11 bankruptcy in early April, has filed a motion to dismiss the case (The Business Journal of Milwaukee May 1). The auto dealership is partly owned by Richard Jungen, founder and former CEO of Central States Mortgage Co. and by the dealership's general manager, Tom Burns. The mortgage company filed for receivership in March. It was 70% owned by credit unions (News Now April 13). CU Fleet filed for bankruptcy April 3 in the U.S. Bankruptcy Court in Milwaukee, allegedly owing three credit unions--Guardian CU, West Allis; Prime Financial CU, Cudahy; and Landmark CU, New Berlin--at least $2.8 million combined. The West Allis, Wis.-based company filed the motion to dismiss on April 20. Papers said the three credit unions support dismissing the Chapter 11 reorganization, said the business journal.

Tech Council seeks best practices awards applicants

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MADISON, Wis. (5/8/09)--Nominations are being sought for the CUNA Technology Council’s Best Practices awards. No fees are required for entry, and entries are due by June 12. The awards recognize outstanding approaches to technology challenges with potential for universal application across the credit union movement. Judges will choose award winners from Credit Union National Association (CUNA)-affiliated credit unions, without regard to asset size. The awards will be based on strategy, process, application and results in several categories:
* Technology Infrastructure--looks at the technical and procedural environment for safely accessing infrastructure, how the system monitors this access, and its current and future storage-management capabilities; * Information Security/Privacy--examines the technical and procedural environment to minimize the possibility of internal and external unauthorized access to member information; * Member Service/Convenience--emphasizes the benefits to members and employees, and covers the technical environment and system integration technologies that allow members to open accounts or receive information about existing accounts across all delivery channels; * Sales Management/Marketing Automation--recognizes the use of innovative automated systems to manage member information, create personalized product offers, plan and track sales leads, measure return on investment, and so forth; * Miscellaneous--for any technology success story that does not fit the other categories.
Award winners will be recognized at the 14th annual CUNA Technology Council Summit, Aug. 5-8 in San Francisco. For more information, use the link.

CUs pledge to continue Chrysler support

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LIVONIA, Mich. (5/8/09)--America’s credit unions, through the “Invest in America” program, are pledging their support for Chrysler LLC during its comprehensive restructuring announced last week. Because Chrysler Financial will cease to provide financing for an undetermined time, credit union loans will become an even more important source of auto financing, according to the Michigan Credit Union League (MCUL). Through an expanded partnership between Chrysler and CUcorp--a marketing company based in Livonia, Mich., and wholly owned subsidiary of MCUL--participating credit union members will receive either a $1,000 incentive on five of the most popular Chrysler, Jeep and Dodge vehicles or a $500 incentive on seven additional vehicles. These discounts are on top of their best deal, accompanied by low-rate financing provided by a credit union. The expansion increases the cash incentive and applies it to a broader range of cars and trucks through June 1. More than 1,500 credit unions, representing 40 million credit union members in 50 states, have been promoting Chrysler’s Credit Union Member Cash program, said the league. With credit remaining tight for domestic autos, credit unions boast more than $160 billion in liquidity available for member loans of all types, including new car loans. “About 86,000 vehicles have been purchased in the first three months of this year through Invest In America, and about 72,000 have been financed through credit unions,” Dave Adams, CEO of CUCorp and MCUL president, told participants in a conference call Thursday. “New-car loans financed through credit unions nationwide have risen to 25% in March of 2009 from 14% in March of 2008.” “Credit unions indeed are prepared to fill the void left by Chrysler Financial shutting down and the overall credit crisis [nationwide], so people can buy new vehicles with affordable financing rates,” Adams concluded. Invest in America is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The campaign includes contractual credit union member incentives from GM and Chrysler. GM is offering supplier pricing, which averages about $1,500 per vehicle, with its Credit Union Member Discount. Chrysler is offering $500 or $1,000 rebates through its Credit Union Member Cash program.

KCUA Kansas treasurer sponsor money camp

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TOPEKA, Kansas (5/8/09)--The Kansas State Treasurer’s office is partnering with Kansas credit unions and others to sponsor a Money$mart Financial Management Camp today at Atchison (Kan.) Middle School. It aims to teach students about the importance of sound personal financial practices. Kansas State Treasurer Dennis McKinney said he believes in the importance of encouraging fiscal responsibility for all Kansans. “One of the biggest advantages we can provide our children is a basic education in finances,” McKinney said. “This outreach educates students on responsible use of a credit card, saving, budgeting and cash management.” The Money$mart camp was created with the Kansas Credit Union Association (KCUA) for Kansas middle school students. Other co-sponsors include Students In Free Enterprise at Wichita State University, and KCUA’s Northeast Chapter of Credit Unions, which worked with the school to make the event possible. Credit unions participating include:
* Bradken CU, Atchison; * CU of Leavenworth County, Lansing; * Eagle FCU, Atchison; * Free State CU, Lawrence; * Frontier Community CU, Leavenworth; * Jayhawk FCU, Lawrence; * Kansas University FCU, Lawrence; * Leavenworth (Kan.) Teachers and Community CU, * McCormick Midwest Employees CU, Atchison; * Meritrust CU, Wichita; * Midwest Regional CU, Kansas City; * USPLK Employees FCU, Leavenworth; and * Wakarusa Valley CU, Lawrence.
Participants in the Money$mart camp will include 120 students in seventh grade.

Even Doonesbury knows a good benefit--CUs

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MADISON, Wis. (5/8/09)--Even comic strips know credit unions are a good, desired employee benefit. Garry Trudeau’s comic strip “Doonesbury” mentions credit unions Tuesday as a perk when an employee asks a human resources staffer at the Central Intelligence Agency (CIA) about his CIA employee benefits. Credit unions are part of a “basic civil service package” he’s told. To view the comic strip, use the link.

Missouri CU Division Director Branson to retire

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ST. LOUIS (5/8/09)--Missouri Division of Credit Unions Director Sandra Branson will retire at the end of the month, the Missouri Credit Union Association (MCUA) said. Branson has served as director since 2005. She previously held the position from 1987 to 1993. She also was president/CEO of Missouri State CU, Jefferson City, between the two state tenures (The Missouri Difference May 7). During her tenure, Branson “encouraged open dialogue between the state regulator” and credit unions in Missouri, according to Rosie Holub, MCUA president/CEO. MCUA and the division have had a good relationship, and Branson’s door was always open to talk about credit union issues, Holub added.

CU System briefs (05/07/2009)

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* MADISON, Wis. (5/8/09)--CLARIFICATION: In an April 24 System News story, "CU Museum holds financial literacy fair," News Now reported the wrong credit union involved with the CU 4 Reality Financial Literacy Fair at America's Credit Union Museum. The story should have said the credit union was New Hampshire FCU of Concord, N.H. News Now regrets the error. … * ALBANY, N.Y. (5/8/09)--The New York Credit Union
Click to view larger image Click for larger view
Foundation has launched its redesigned website at In addition to the redesign, the site features additional content. Visitors can learn about the foundation's education programs, apply for grants, learn about foundation-supported projects, and read its bi-annual newsletter, Solutions. The website also features a secure online contribution capability, via a "Donate Now" button. (Photo provided by the New York Credit Union Foundation) … * HARRISBURG, Pa. (5/8/09)--Representatives from First Commonwealth FCU, Bethlehem, Pa., and the Pennsylvania Credit Union Association (PCUA) visited lawmakers Wednesday in Harrisburg (Life is a Highway May 7). They met with Reps. Dick Hess (R-78), Doug Reichley (R-134), Gary Day (R-187) and Joseph Brennan (D-133). Hess, the minority chair of the House Commerce Committee, was interested particularly in credit union member business lending and how it helps businesses needing financial assistance. All the lawmakers were pleased to learn how the credit union is helping members in their areas, said PCUA. Pictured from left are: John Cathers, First Commonwealth vice president, sales and service; Molly Snody, director, business advisory services at PCUA; Dave Yandrasitz, business lending and services manager at First Commonwealth; and Rep. Hess. Not pictured was Christina Mihalik, PCUA vice president governmental affairs. (Photo provided by the Pennsylvania Credit Union Association) … * RANCHO CUCAMONGA, Calif. (5/8/09)--Valley First CU, based in Modesto, Calif., has opened its newest branch in Madera and plans a ribbon cutting soon. The branch was formerly with Valley Oak CU, based in Three Rivers. Valley Oak handed the branch to Valley First in an unusual move aimed at providing continual service to members. Valley First assumed the branch, employees, and members. "We are eager to serve the Madera community, and help members become financially savvy and successful even in these tough economic times," said Valley First CU President/CEO Hank Barrett. It will support the local community and join the local Chamber of Commerce, Barrett said …