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CU System Archive

CU System

Bellco U.S. file summary judgment briefs in UBIT case

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DENVER (6/30/09)--Bellco CU and the U.S. Department of Justice filed separate motions for summary judgment Friday in a U.S. District Court in Colorado in Bellco's challenge of the unrelated business income tax (UBIT) on three of its products. Bellco, a Greenwood Village, Colo.-based credit union, filed suit in May against the U.S. government over the Internal Revenue Service's interpretation of UBIT for three products--accidental death and disability insurance (AD&D), credit life and disability insurance, and financial services such as investments. The credit union is suing for a refund of $199,293 it paid in UBIT on the three products in 2000, 2001 and 2003, plus statutory interest. The judge may grant the summary judgment motions since both sides have indicated that there are no facts in dispute, which would bypass the need for a trial. The key legal issues discussed in the brief were whether sales of credit insurance and investment products were substantially related to the granting of loans and the promotion of thrift, and whether income from the sale of AD&D qualified as a royalty not subject to UBIT. The government's brief, filed by the U.S. Department of Justice, and Bellco's brief both center their arguments on whether the products in question were "substantially related" to the credit union's tax-exempt purposes of making loans at fair rates and promoting thrift. The government asserts that neither credit insurance nor financial services was substantially related to the exercise or performance of Bellco's tax-exempt purposes, and that the income from the sale of AD&D was not royalty income even though the credit union's insurance partner directly marketed and serviced the product. Both Bellco and the government had until last Friday to file their briefs moving for summary judgment. Each will have at least 10 days to respond to the other's brief.

CU System Briefs (06/29/2009)

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* LARGO, Md. (6/30/09)--Money One FCU has merged with $15 million asset KC Councils FCU of College Park, Md., to create a $97 million asset credit union with over 14,000 members. KC Councils' current location will serve as a branch of Money One. and the combined credit union is scheduled to open a new branch in Greenbelt, Md., this November (FOCUS Newsletter June 29) ... * PHILADELPHIA (6/30/09)--Christopher Larue, who was convicted of robbing the Warrington branch of Bristol, Pa.’s $80 million assets Bucks First FCU, as well as four other financial institutions, will serve more than 12 years in prison for bank robbery. Larue, who knocked off all five financial institutions within one month, also will pay more than $7,000 in restitution and will be subject to five years of supervised release once his sentence has been completed (US Fed News June 29) ... * PHILADELPHIA (6/30/09)--A convicted robber who collected over $58,000 in cash from Phillipsburg, N.J.-based Baker FCU, other financial institutions, and assorted convenience stores and gas stations during a seven-month thieving spree across the mid-Atlantic states will serve more than 11 years in a federal penitentiary. John Snuggs, 42, previously confessed to robbing 13 assorted businesses, one of which he robbed three times. Snuggs will pay nearly $60,000 in restitutions and special assessments (US Fed News ...

La Pine named League of SE CUs CEO

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TALLAHASSEE, Fla. (6/30/09)--Patrick La Pine, executive vice president of association services at the Michigan Credit Union League (MCUL), was named president/CEO of the newly created League of Southeastern Credit Unions, it was announced Monday. The League of Southeastern Credit Unions comprises the Florida and Alabama credit union leagues. La Pine will replace retiring CEOs Guy Hood of the Florida league and Gary Wolter of the Alabama league. Florida and Alabama league members voted in March to combine into a single entity representing 332 credit unions with combined total assets of $55 billion (News Now March 6). While executive vice president of association services at the Michigan league, La Pine managed the MCUL governmental affairs, education, public affairs, information services and membership relations functions. La Pine also serves as executive director of the CURE Defense Fund, which was formed by MCUL to engage in ongoing extraordinary defense strategies to promote the credit union movement in legal and legislative arenas and advocacy activities. While La Pine “has big shoes to fill,” it was clear that he was the right candidate to lead the League of Southeastern Credit Unions, according to Mary Wood, league executive search committee chair. “He has a proven track record and is an experienced credit union leader,” Wood added.

Pa. governor recommends CUs at budget conference

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HARRISBURG, Pa. (6/30/09)--State workers should seek out programs offered by credit unions to help their members if the state budget doesn’t pass, said Pennsylvania Gov. Edward Rendell during a press conference last week (Life is a Highway June 26). State workers will not receive paychecks if the state’s budget does not pass by Wednesday. Several Pennsylvania credit unions have said they will help members affected by the potential budget impasse. Pennsylvania State Employees CU (PSECU) has created a special loan program for its members who are state workers. Employees who stay on the job, but don't receive a paycheck can apply for a 0% Annual Percentage Rate (APR) loan (Life is a Highway May 29). For members who meet the credit criteria, the 0% rate will be available for up to 60 days after the governor signs the new budget into law. After 60 days, the loan will begin accruing interest at 3.9% APR until paid in full. Members participating in the loan program will have the option of borrowing up to $1,000 per pay period. Members 1st FCU, Mechanicsburg, Pa., will offer affected members the option to either “skip” a payment on any existing loans at no charge, or take advantage of a special 3.9% APR line of credit if they meet credit approval criteria (Life is a Highway June 8). The rate will be effective through July 31, and the first payment will be deferred until August. Qualifying members can borrow up to the amount of their normal paycheck, the credit union told Life is a Highway.

Mica touts CUs credit cards on Fox

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NEW YORK (6/30/09)--Credit Union National Association President/CEO Dan Mica emphasized the benefits of credit union credit cards during Fox Business Network’s “Money for Breakfast” program, which aired Saturday. Mica and Adam Levin of credit.com were featured on the show to provide insights on recently passed credit card legislation, The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. Mica noted that the legislation would bring change to the credit card industry--including lower fees. Credit union credit cards are the best deal for consumers, according to a Harvard University study, Mica said. Credit union credit cards offer lower fees and better service for their members. “[Credit cards] can be done in a way to give consumers a break,” Mica said. “The best deal is with a credit union. We’ve proven you can do it without gouging the customer--our member.” To see a video of Mica speaking on Fox, use the link.

Rockefeller foundation deposits 250000 in CDCU

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COLLEGE STATION, Ark. (6/30/09)--The Winthrop Rockefeller Foundation will make a $250,000 deposit into $69 million-asset Hope Community CU, Jackson, Miss. (PR Newswire June 29). The gift is part of the foundation’s ongoing effort to help Arkansas families move from poverty to prosperity. HOPE and its nonprofit sponsor, Enterprise Corporation of the Delta (ECD), have offered affordable financial services and technical assistance to Arkansas’ working families, homeowners, entrepreneurs and small businesses for 15 years. The deposit is part of the Winthrop Rockefeller Foundation’s “Moving the Needle” strategy aimed at closing the educational and economic gaps that leave many Arkansas families in persistent poverty, according to President/CEO Sherece West. “The board is committed to moving low-income Arkansans from poverty to prosperity and knows that HOPE will put our money to work supporting affordable housing, business development and other services in distressed areas,” West said. “At the same time, our funds are safe and earning market interest rates.” HOPE plans to use the deposit to boost its ability to offer commercial loans, mortgages and consumer financial services to low-wealth people and communities. West said the deposit reflects a trend among both individuals and institutions to invest in socially responsible financial institutions that combine financial returns with community development. HOPE CEO Bill Bynum said he hopes the foundation’s deposit will inspire others to invest in ways that result in stronger communities.

Mid-Atlantic Corporate elects board

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MIDDLETOWN, Pa. (6/30/09)--Richard C. Burtnett of Pennsylvania Grange FCU, Camp Hill, Pa., was elected chairman of the board at Mid-Atlantic Corporate FCU’s annual meeting on June 19. Other officers are Vice Chair Michael P. Pastirik, United Community FCU, West Mifflin, Pa.; Treasurer Joan M. Moran, Department of Labor FCU, Washington, D.C.; and Secretary Brian J. Vittek, Destinations CU, Baltimore, Md. (Maryland and District of Columbia Credit Union Association’s FOCUS Newsletter June 29). Re-elected to three-year board terms were Burtnett; Dennis Flickinger, First Capital FCU, York, Pa; and J. Charles Forney, Members 1st FCU, Mechanicsburg, Pa. Joining Flickinger on the Supervisory Committee will be Jerry King, DEXSTRA FCU, Wilmington, Del., and James F. McCaw, Viriva Community CU, Philadelphia.

Three Columbia CU members win loan payments for a year

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VANCOUVER, Wash. (6/30/09)--Columbia CU’s “Payment Free Promotion” will give three borrowers a year’s worth of mortgage payments, home equity loan payments or auto loan payments (BusinessWire June 26). To qualify for one of the promotion’s three grand prizes, borrowers must take out a mortgage, home equity loan or auto loan by Nov. 30. Borrowers who opt to make payments directly from a Columbia CU checking account are automatically entered in the contest, which covers 12 months of payments on the corresponding loan. The contest sends the message that $770 million-asset Columbia CU “has money to lend and at today’s low rates, really, everyone’s a winner,” according to Colleen Boccia, senior vice president of marketing. Loan applications will be accepted at the credit union’s 12 Clark County branches or online. Information and official rules are available at Columbia CU’s Web microsite for the promotion, www.WinLoanPayments.com.