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CU System Briefs (06/26/2013)

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  • BURLINGTON, Vt. (6/26/13)--A federal grand jury in Burlington, Vt., earlier this month indicted the former CEO of Border Lodge CU for embezzlement. Debra Kinney was the only employee of the Derby Line, Vt., credit union, which was closed by the Vermont Department of Financial Regulation in November (Barre Montpelier Times Argus June 25).   The credit union was first chartered in 1963 ...
  • BEDFORD, PA. (6/26/13)--Pennsylvania credit union leaders gathered in Bedford, Pa., last week for the Pennsylvania Credit Union Association's two-day Big Ideas Conference. Theran Colwell, CUNA Mutual Group's director of strategy business development, opened the first-day program and spoke about the use of data and predictive modeling in providing products and services for members. Stan Moeckli, CEO, and Lisa Farnen, vice president, marketing, both of Electro Savings CU, St. Louis, Mo., discussed member engagement and retention strategies. James Giffin, vice president, sales and marketing, North Jersey FCU, Totowa, N.J., shared his insights on member-centric innovation. The day's session ended with a group activity, moderated by Brenda Walker, director, Pacul Services Marketing, on how to take a big idea concept to implementation. On the conference's second day, Ron Shevlin, senior analyst of Aite Group, talked about the future of retail banking, and how the new competitive dynamic will be credit union performance. Also, Chuck Purvis, CEO, Coastal FCU, Raleigh, N.C., discussed the culture of innovation and his credit union's use of video banking to improve member efficiency and service hours (Life is a Highway June 19 and June 20) ...
  • FARMINGTON HILLS, Mich. (6/26/13)--Community Choice CU, based in Farmington Hills, Mich., has launched a $1 million member rewards program that gives back to members who make the credit union their primary financial institution. GetBigReward$ provides monthly credits to Emerald and Gold Level members, which can be used to offset potential fees. Any remaining credits are refunded annually and can be used for savings or withdrawn. In the program's first month, members collectively received more than $86,000 in credits, said Robert Bava, president/CEO. Eligible members can earn monthly reward credits, plus receive an annual loan interest rebate. In addition to the $108 in annual credits, the program also offers up to 10% annual loan rebate on interest paid on qualified Community Choice loans. Community Choice said it expects that the credits and rebates will total more than $1 million annually ...
  • SAN FRANCISCO (6/26/13)--Great Basin FCU, a $125 million asset credit union based in  Reno, Nev., is establishing its Small Business Administration (SBA) and member business lending program. Great Basin chose J.R. Bruno & Associates, a San Francisco-based consultant to SBA and member business lenders, to work with it during the next two years. It will provide services including underwriting, loan packaging, portfolio management and staff training. So far, the credit union has several SBA and member business loans in the works ...

Sen. Stabenow States Support For CU Tax Exemption

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WASHINGTON (6/26/13)--U.S. Sen. Debbie Stabenow (D-Mich.) has sent a strong statement supporting the federal credit union tax exemption to the Michigan Credit Union League.

U.S. Sen. Debbie Stabenow (D-Mich.) issued a strong statement supporting the federal credit union tax exemption, said the Michigan Credit Union League. (Photo provided by the Michigan Credit Union League)
"As a credit union member, I know first-hand how important credit unions' services are to people in Michigan and across the country," Stabenow said in the statement to MCUL & Affiliates (Michigan Monitor June 24). "That is why I am committed to preserving credit unions' traditional status as tax-exempt, not-for-profit, community-based organizations."

Congress is considering tax reform, saying it is starting with a blank sheet of paper, meaning any federal tax exemption is at risk, including credit unions'. Stabenow said that Congress has difficult work ahead to reform the tax code, but the credit union tax exemption is one tax break that must stay.

"As we look at how to reform the tax code, outdated or inefficient tax provisions must go," she said. "But tax provisions that are working well and benefitting middle-class families must be maintained. One such provision that I will work to preserve in tax reform is the credit union tax exemption, which ensures that community-based institutions can continue to provide quality financial services to their members."

Stabenow said she believes "there is solid support for preserving the exemption among my colleagues on the committee and in Congress, thanks in no small part to how engaged credit union members and leadership are in ongoing policy debates. Credit unions and credit union members should continue to stay engaged with their members of Congress to highlight the services and economic growth they provide."

Noting that Stabenow is a member of the Senate Finance Committee, which is overseeing tax reform in the Senate, League CEO David Adams said "our Michigan senator appears ready to take on the big bank lobbyists as they try to take away the consumer benefits of credit unions.

"Our country is fortunate to have a lawmaker who stands up for credit unions when they are under attack from bankers who, in an obviously self-serving way, lobby for the repeal of the credit union tax exemption," Adams said.

Credit unions are rallying their support for the Credit Union National Association's "Don't Tax My Credit Union" initiative.

For example, the employees at LANCO FCU, Lancaster, Pa., are wearing T-shirts with the "Don't Tax My Credit Union" message on Fridays throughout the summer. LANCO President/CEO Stacey Remick called for member action on LANCO's website and in an e-mail blast, and is promoting it in its upcoming newsletter and statement stuffers (Life  is a Highway June 24).
Staff at LANCO FCU, Lancaster, Pa., are doing their part to promote the Credit Union National Association's and state leagues and association's campaign to preserve credit unions' tax exempt status. They proudly sport their "Don't Tax My Credit Union" T-shirts on Fridays throughout the summer. (Photo provided by the Pennsylvania Credit Union Association)


Leagues are also pressing the case for preserving credit unions' tax exemption. New Jersey Credit Union League Director of Government Affairs Chris Abeel on Monday advocated that message with House Majority Leader Eric Cantor during a small lunch in Atlantic City hosted by U.S. Rep. Frank LoBiondo (R-N.J.).

In a Facebook posting after the lunch, Abeel said Cantor "understands the credit union difference. His advice, keep up the grassroots pressure."

The campaign combines traditional online e-mail campaign methods with newer media vehicles such as Facebook, a Twitter handle @CUNAadvocacy and hashtag #DontTaxMyCU, and social media microvideo site Vine.

Interactive Kiosks Central To Transforming the Branch

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RANCHO CUCAMONGA, Calif. (6/26/13)--Interactive kiosks are a key to transforming a credit union branch, according to a new white paper by CO-OP Financial Services that investigates and explores the benefits and realities of branch transformation for a typical credit union.

Gen Y will constitute 40% of banking transactions in three years and will have the most spending power of any demographic, says the paper, "Transforming the Branch: Understanding the Self-Service Consumer Landscape."

"With this market shift, progressive credit unions are transforming branch operations opting for interactive automated kiosks," the paper said. "The branch isn't entering an end cycle; rather it is evolving with more of a concentration on sales than service. This will require employees that remain on site to be well-versed in all sales channels as 'teller knowledge' may no longer suffice."

Although traditionally consumers have chosen credit unions instead of banks because of more personalized and competitive services--which is still the case--credit union CEOs are increasingly viewing branch employees as sales associates rather than in their traditional role as service-only personnel, the paper said.   

"How members interact with their credit unions has changed drastically during the last five years, and even more dramatically in the last one or two years in the context of mobile technology adoption," said Raja Bose, senior director of consumer transaction solutions for Diebold Inc. in the paper. "Increasingly, we're seeing members turn to online and mobile channels for most of their transactions."

When the National Credit Union Administration deemed interactive ATMs as regulated service facilities last August, it reflected the fact that the industry is indeed changing, the paper said.

"Credit unions need to embrace new technologies that allow them to improve and expand service," said NCUA Board Chairman Debbie Matz in the report. "Likewise, it is important for us, as the industry's regulator, to stay in sync with changes in the marketplace, including changes in technology. The use of video tellers as service facilities is sensible for both credit unions and consumers."

Technology and the shared-branching movement have, in part, driven the changing marketplace, which has engendered the transformation of credit union branches, said the paper.

"The best technology is the technology that is pushed as far down the food chain as possible, directly to the member/consumer," said Sarah Canepa Bang, chief strategy officer, CO-OP Shared Branching. "You have to offer 24/7 transaction access and remove three friction points: limited hours, humans and lack of convenient locations."

To read the paper, use the link.

CU Miracle Day Elects Mann As Leader

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WASHINGTON (6/26/13)--Theresa Mann, president/CEO of The Partnership FCU, Arlington, Va., is the new chairman of Credit Union Miracle Day.

CUMD is a nonprofit collaboration of credit union organizations engaged in fundraising activities to benefit Children's Miracle Network Hospitals and is the largest national credit union fundraising event for Credit Unions for Kids.

"The team really pulls together and works tirelessly for the kids," Mann said. She previously served as CUMD's vice chairman and chairman of the CUMD Marketing Committee, and is a founding member of CUMD.

Immediate Past Chairman Juri Valdov was lauded by the CUMD board for his 12 years of volunteer leadership to the organization. Valdov, retired president/CEO of Northwest FCU, Herndon, Va., will continue to serve on the board.

Other executive team members elected include:

  • Vice chairman--Charlie Mallon, president/CEO, Congressional FCU, Oakton, Va.;
  • Treasurer--Jan Roche, president/CEO, State Department FCU, Alexandria, Va; and
  • Secretary--Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.
All are incumbent board members.

Continuing to serve the board of directors are:

  • Valdov;
  • Fredda McDonald, executive vice president, PSCU Financial Services; and
  • Sarah Canepa Bang, president/chief operating officer of FSCC LLC and chief strategy officer, CO-OP Shared Branching.
Three board members are stepping down but continue to support and serve on committees or in an advisory capacity:

  • Chris McDonald, president/CEO of Northwest FCU, Herndon, Va.;
  • Chris Roe, senior vice president of CUNA Mutual Group; and
  • Casey Duplantier, retired president/CEO of 1st Advantage FCU, Newport News, Va.

July 1 Deadline To Nominate CU Rock Stars

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MADISON, Wis. (6/26/13)--The deadline to nominate a credit union rock star is July 1.

Credit Union Magazine is seeking unique individuals who demonstrate innovation in their areas of expertise--and make the credit union movement a better, more interesting place.

Those selected will be recognized and celebrated in a special issue of Credit Union Magazine.

Among the questions to consider in nominating credit union rock stars:

  • How has this person raised the bar on creativity, strategy and execution?
  • What makes this rock star unique?
  • What are the most admirable qualities about this rock star?
 To nominate a credit union rock star, use the link.

Sunday Is Deadline To Report Fin Ed Classroom Data

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MADISON, Wis. (6/26/13)--Sunday is the National Youth Involvement Board's (NYIB) deadline for credit unions to report data on financial-education classroom presentations, NYIB said.

The top presenters will be recognized at the NYIB's 2103 annual conference, July 29-Aug. 1, in San Diego. The NYIB conference also recognizes top ranking of states in outreach from data reported through the NYIB website.

NYIB was created in 1972 to create a national system to disseminate information and resources regarding youth participation in the credit union movement. Credit union leaders recognized the need to reach out to young people to ensure a bright future for the movement.

NYIB:

  • Serves as a resource of youth marketing materials and ideas for credit unions;
  • Encourages excitement and commitment to youth financial literacy;
  • Creates leadership opportunities for the credit union movement;
  • Develops strategic alliances that benefit the credit union movement in keeping with the NYIB mission; and
  • Provides an educational conference keeping with the NYIB mission.

ResCap Seeks Denial Of NCUA Claim On Corporate Losses

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NEW YORK (6/26/13)--Attorneys for Residential Capital have asked a federal bankruptcy court in New York to deny more than $200 million in claims filed by the National Credit Union Administration related to losses from residential mortgage backed securities (RMBS) sold to Western Corporate FCU and U.S. Central FCU.

ResCap filed its objection to NCUA's claims with the court on June 20, seeking to "disallow and expunge the claims filed" by NCUA on behalf of the two corporates, which NCUA liquidated on March 20, 2009.  NCUA had brought the claims as the corporates' liquidating agent.

NCUA filed 11 proofs of claim for about $200 million, according to the court document .Roughly 6,839 proofs of claim have been filed against the company in its Chapter 11 bankruptcy cases.

In suits filed in Kansas and California, NCUA argued that RMBS issuers and underwriters, including Residential Accredits Loans and Residential Funding Mortgage Securities II, abandoned underwriting standards and made misstatements in the funds' offering materials about the safety of the investments.

"The NCUA claims are untimely; the NCUA cannot allege--let alone prove--any material misstatement in the offering materials; and the credit unions' losses were caused by a market-wide collapse, not by any misstatement by the debtors," said ResCap's objection document.

ResCap argued that NCUA's claims don't meet the statute of limitations for filing a claim, that its complaints "contain no particularized factual allegations linking the NCUA's generalized theory about abandonment of underwriting standards to the specific RMBS securities the credit unions purchased, and said the corporates' losses were not caused by the revelation of any alleged misstatement."

It urged the court to "reject the NCUA's belated attempt to recover from the debtors (at the expense of the debtors' other creditors) for losses that highly sophisticated RMBS investors suffered when their ill-timed and risky bets went wrong."

NCUA has until July 12 to respond. A hearing date is set for July 24.

Check Fraud, Mortgages Top SAR Filings

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WASHINGTON (6/26/13)--Check frauds and mortgage loan frauds are at the top of Suspicious Activity Reports (SARs) filed into the Bank Secrecy Act (BSA) database during 2012, but mortgage loan fraud dipped significantly, according to numbers released last month by the Financial Crimes Enforcement Network's (FinCEN).

More than 1,582 million SARs were filed, an increase of 4% over 2011's reports, said  FinCEN's SAR Activity Review--By The Numbers. The number of legacy depository institution SARs rose roughly 8% in 2012, while non-depository institutions' reports decreased 13%. Non-depository institutions accounted for 42% of all reports filed, down 5% from 2011.

SARs filed by depository institutions totaled 860,858 last year, compared to 798,688 in 2011 and 288,343 reports in 2003.

Fraud-related activities--check,  commercial loan, consumer loan, credit card, debit card, mortgage loan and wire transfer fraud--accounted for 23% of the reports from depository institutions in 2012--a modest decrease, said FinCEN.  However, SARs in two of the seven fraud types--mortgage loan fraud and commercial loan fraud--decreased.

The most dramatic change was in the number of SARs filed for mortgage loan frauds.  This type of SAR dropped 29% in 2012--to 65,819, compared with 92,563 in 2011. Until 2012, mortgage loan fraud was the only summary characterization that had experienced an increase every year since 1996, with the past three years accounting for nearly 46% of all instances noted for this activity in the past decade, said FinCEN.

Commercial loan frauds also decreased--by 19%--to 2,381. In 2011, the category counted 2,945 SARs.

Although other payment systems are overtaking checks in the financial marketplace, check fraud SARs rose 6% in 2012--to 75,319. That gives check fraud the highest number of SARs last year. The total is up from 71,020 in 2011.

Consumer loan fraud, the third highest SAR category, rose 20% to 38,897 SARs, while credit card fraud rose 11% to 37,283 reports. Wire transfer fraud rose 34%--to 20,835, and debit card fraud rose 14% to 7,142.

For the full report, use the link.