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Lake Charles Telco merges with Pelican State

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HARAHAN, La. (6/4/10)--Lake Charles (La.) TELCO CU will merge with Baton Rouge, La.-based Pelican State CU on July 1. The merger was approved last week in a unanimous vote of the membership and unified support from both credit unions' boards, according to the Louisiana Credit Union League (E-Weekly June 2). Pelican will retain all Lake Charles Telco employees and members. "We will work together to join the two credit unions as seamlessly as possible," said Jeffry K. Conrad, Pelican CEO. He added that service to Telco members will be uninterrupted. Telco's members will have access to products and services previously not available such as debit cards, online banking, cash services and access to more than 3,500 Credit Union Service Center locations nationwide. Conrad said more than 400 Pelican members reside in Lake Charles, where one of its select employer groups is W.O. Moss Regional Medical Center. Hospital employees are eligible for membership with Pelican and will benefit from the new local branch. Telco has roughly $1.9 million in assets and more than 600 members. Pelican has more than $172 million. On Jan. 1, Pelican merged with Pinekraft FCU based in Pineville.

Real-estate holding co. seeks CU charter in Texas

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AUSTIN, Texas (6/4/10)--The Texas Credit Union Department has received an application for a new credit union charter for iLife CU from Austin, Texas-based real estate group Tenura Holdings Inc. and its affiliates. The new credit union would serve employees and members of the boards of Tenura Holdings and its affiliates, employees of the credit union, and family members of the group and credit union, according to the department's May 31 newsletter.. Tenura's affiliates include One Percent Realty LLC; Ameripro Funding Inc., doing business as (dba) Land Mortgage; Privatus LLC, dba Private Label Realty; Reliant Title Agency LLC; and Amerifirst Insurance Agency LLC. Also, the credit union would persons receiving retirement, pension or other benefits as a result of prior employment with the companies or credit union, and spouses of those who died while within the credit union's field of membership.

Members file class action suit on NY mortgage tax

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NEW YORK (6/4/10)--Three members of Hudson Valley FCU who paid mortgage recording taxes (MRT) required under New York state law have filed a class action lawsuit against the credit union and title insurance companies in the U.S. District Court for the Southern District of New York, saying the taxes are unlawful under the Federal Credit Union Act (FCUA) and should not have been charged. Hudson Valley FCU is the $2.7 billion asset, Poughkeepsie, N.Y.-based credit union that previously filed a separate lawsuit in state court, in May 2009, against New York tax officials That lawsuit sought a declaratory judgment that the MRT cannot lawfully be charged to a federal credit union because of the FCUA's tax exemption. Last month, the judge in the declaratory judgment action ruled that federal credit unions and their members must continue to pay MRT and held that the FCUA tax exemption does not apply to that tax. Attorneys for the three plaintiffs in the class action lawsuit--Maria Milone and Thomas and Kelly Y. Morel, all of Poughkeepsie--filed the class action lawsuit on April 29. Despite the state court's decision that the FCUA tax exemption does not apply to MRT, the plaintiffs are essentially arguing that the credit union never should have required members to pay that tax. The lawsuit seeks class actions status for all members of Hudson Valley FCU who paid the MRT. Their class action complaint alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO), as well as fraud and breach of contract claims. RICO usually applies to racketeering organizations such as the Mafia, and RICO lawsuits have not been successful against credit unions in the past. For example, two 1990s lawsuits involving the former Rhode Island Central CU, brought under Rhode Island's version of RICO, resulted in summary judgments in favor of the credit union parties. The factual basis for these RICO and other claims, according to the complaint, are that the credit union and title insurance companies allegedly represented that the amount charged constituted a valid tax but plaintiffs maintain that "no tax was legally due in connection with the mortgages from plaintiffs and class members because Hudson Valley and the other federal credit unions are exempt from the tax pursuant to the Federal Credit Union Act of 1934." An attorney for the credit union, however, says it must pay MRT according to state law until the matter is resolved. "As soon as Hudson Valley FCU was advised by my firm that we felt they had a strong basis to claim exemption from the tax, they authorized us to research the matter thoroughly, and then to engage K&L Gates as co-counsel and commence legal proceedings," said Dale J. Lois, a partner at the law firm Quartararo and Lois, one of the law firms, along with K&L Gates, representing the credit union. "They did so for the benefit of their members and others similarly situated, and have expended considerable efforts and resources in the process," Lois said. "Unless and until New York State changes its policy with respect to this matter, neither Hudson Valley nor any other federal credit union can avoid payment of the tax upon the recording of its mortgage."

Charter issued for Ohios first Latino CU

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TOLEDO, Ohio (6/4/10)--Ohio has a new state-chartered credit union--Nueva Esperanza (New Hope) Community CU in Toledo, which is the state’s first Latino credit union. The Ohio Division of Financial Institutions issued the state charter, conditioned upon attaining share insurance and bond coverage. The credit union is in the process of obtaining both, with the National Credit Union Administration and CUNA Mutual Group, respectively, said the Ohio Credit Union League (eLumination Newsletter June 2). Founding Nueva Esperanza Community CU “has been a long and tedious process, and [the incorporators, VIVA South Toledo Community Development Corp., and leaders of the Latino community] are to be commended for seeing it through,” said Barry Shaner, CEO of Directions CU in Toledo, who played an instrumental role in making the new credit union a reality. “It has been many years since a new credit union charter has been granted in Ohio, and what you have accomplished is a very rare feat in today’s world. I know I speak for all the credit unions in Ohio when I say ‘Welcome!’" Shaner told the credit union. “We are anxious to help you in your next steps, and can hardly wait to see the good things you will do for your community.” The credit union will move into its renovated facility--a former library outfitted with furniture and fixtures donated by several credit unions across the state--later this month, and a “soft opening” is anticipated this summer. The Ohio Credit Union Foundation leveraged a $69,500 Innovation Grant from the National Credit Union Foundation to help charter Nueva Esperanza (News Now Jan. 22, 2009).

CUNA economist on 1Q Challenges but improvements seen

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MADISON, Wis. (6/4/10)--The Credit Union National Association (CUNA) has posted its U.S. Credit Union Profile for First Quarter 2010, a summary of credit union operating results, on its website. CUNA is "cautiously optimistic that credit unions have turned the corner on the way back to more favorable economic times, although there are still many challenges ahead," said Mike Schenk, CUNA vice president of economics and statistics. "First quarter data reflect a continuation of strong savings inflows and weak lending," he said. "Net income rebounded to an average of nearly 0.5% on average assets, and asset quality reflects modest improvement with declines in both delinquency and net chargeoff rates," Schenk continued. "Net worth ratios remain at 9.9%, and 94% of credit unions remain well-capitalized under PCA [Prompt Corrective Action] guidelines. "The current results show gradual improvement in many of the key metrics we examine, but they also make it abundantly clear that recent challenges haven't disappeared.. Nevertheless we clearly have a solid basis for future improvement and that makes it likely that full-year 2010 results will be substantially stronger than 2009 results," Schenk concluded. Credit unions across the nation totaled 7,636, with total assets at $909.8 billion, a 4.7% growth over 2009, according to CUNA's profile. Credit union loans totaled $574.8 billion at the end of the first quarter, a 12-month decline of 0.3%, while savings totaled $784.1 billion, an increase of 6.6% over the period. Total memberships grew 1% to nearly 92 million members. To access the full report, use the resource link.

Michigan league presents awards elects board

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DETROIT (6/4/10)--The Michigan Credit Union League (MCUL) presented awards to credit union professionals and elected board officers during the league’s 76th annual Convention and Exposition May 18-22 in Detroit. The general session began by recognizing MCUL and Michigan Credit Union Foundation award recipients, including:
* Distinguished Service Award, Robert Mackay, retired CEO of Berrien Teachers CU, Saint Joseph; * Credit Union Professional of the Year Award, Thomas Miller, president/CEO of Affinity Group CU, Pontiac; * Outstanding Credit Union of the Year Award, Michigan State University FCU, East Lansing; * Young Professional of the Year Award, Lori McCloud of Monroe County Community CU, Monroe; * Credit Union Youth Advocate of the Year Award, RuthAnn Albus of DFCU Financial, Dearborn; * Award for Excellence in Consumer Education, Susan Young of CP FCU, Jackson; and * Credit Union Community Involvement Award, Michele Myrick of E&A CU, Port Huron, accepted posthumously by her husband Scott.
The league also elected new board officers: Chairman George Isola, Ishpeming (Mich.) Community FCU; Vice Chairman Howard Spencer, Northland Area FCU, Oscoda; and Secretary/Treasurer Anthony Carnarvon, Co-op Services CU, Livonia (Michigan Monitor May 3).

Louisiana CUs gather for state GAC

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NEW ORLEANS, La. (6/4/10)--Roughly 70 Louisiana credit union professionals and volunteers from 22 credit unions statewide attended the 2010 Louisiana Credit Union League Governmental Affairs Conference May 18-19 in Baton Rouge.
Click to view larger image The Louisiana Credit Union League held its 2010 Governmental Affairs Conference May 18-19 in Baton Rouge. Pictured are Sandy Yelverton, CSE FCU; Clark Yelverton, CSE FCU; Sen. Willie Mount (D-27); Ken Gardner, CSE FCU; and from Access of La FCU, Kathy Bourgeois and Brian Burton; Jessica LaRocca, Calcasieu FCU; and Bruce Thomas, Calcasieu Teachers & Employees CU.
Click to view larger image Bobbi Bush, Shell New Orleans FCU; Rep. Jared Brossett (D-97); and Maureen Genovese, Shell New Orleans FCU, attended the Louisiana Credit Union League's Governmental Affairs Conference. (Photos provided by the Louisiana Credit Union League)
Coinciding with the conference, Louisiana Gov. Bobby Jindal declared May 18 as Louisiana Credit Union Day. The conference focused on the current climate of the state and federal legislature, upcoming legislation and the impact on credit unions, presented by Rob Rieger and Jeff Brooks of Adams and Reese LLP. Charles “Chuck” Johnson, a board member of the Louisiana Credit Union League and Barksdale CU, Bossier City, La., who died this year, also was honored by his friend, State Rep. Henry L. Burns (R-9), at the event. Five senators and 27 state representatives joined the credit union representatives at the conference. “The participation by our state legislators and our credit union volunteers and professionals was incredible,” said Connie Major, league executive vice president. “Opportunities to interact one-on-one with our state legislatures provides great inspiration to our credit union officials, showing them that their long-term commitment to political action and fundraising efforts truly do make a difference.”

PrimeWay TexasOne Community to merge

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HOUSTON (6/4/10)--PrimeWay FCU and TexasOne CU are merging, culminating discussions that began late in 2009. The Houston credit unions said they were intent on adding value to their membership rather than just growing (LoneStar Leaguer June 3). “There were a number of synergies that made this a good partnership,” Dale Roberts, CEO of PrimeWay FCU, told the Texas Credit Union League. “TexasOne had branches in key areas for our membership and we had key branch locations for their membership. That, combined with strong product offerings and new economy of scale, will help us bring greater value to our joint membership.” At $279 million in assets before the merger, PrimeWay is now among the city’s largest credit unions with combined assets of just over $400 million after assuming the $128 million in assets of TexasOne. TexasOne CU will continue to operate under the TexasOne name and logo through the end of 2010. The extra months will provide the credit unions time to combine operations and create a smooth transition for their members. “Members will begin to see value immediately in areas such as loan rates and decreased fees,” Roberts told the league. “Then, by first quarter 2011 when we have converted our core systems, members will have access to all of the joint locations and a larger product offering.”

Connecticut league GAC held Tuesday

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MERIDEN, Conn. (6/4/10)--The Credit Union League of Connecticut held its State and Federal Issues Governmental Affairs Conference
Click to view larger image Tony Emerson, Credit Union League of Connecticut president/CEO, left, speaks with Connecticut Attorney General and Democratic candidate for U.S. Senate Richard Blumenthal on the important role credit unions play in Connecticut’s economy.
Click to view larger image Credit Union League of Connecticut president/CEO, Tony Emerson, left, poses with U.S. Rep. and House Caucus Chair John Larson (D-1) before Larson addresses credit unions. (Photos provided by the Credit Union League of Connecticut)
Wednesday in Hartford, Conn. U.S. Rep. and House Caucus Chair John Larson (D-1), and Connecticut Attorney General and Democratic candidate for U.S. Senate Richard Blumenthal led a list of speakers who addressed national and local issues affecting credit unions. Among them were John McKechnie, National Credit Union Administration director of public and congressional affairs; State Comptroller Nancy Wyman; Connecticut Department of Banking official Howard Pitkin; State House Majority Leader Denise Merrill (D-54); and State Sen. and Banking Committee Chair Bob Duff (D-25). “This event provided an outstanding opportunity for Connecticut credit union leaders to discuss the interchange amendment and other vital issues of importance to the industry,” said Tony Emerson, league president/CEO. “Firsthand face-to-face information exchange with ample opportunity to ask pertinent questions made for a positive, informative and constructive meeting that credit unions can use to plan their future course,” Emerson added.

Main Line Health EFCU Franklin Mint to merge

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PHILADELPHIA (6/4/10)--The boards of directors of Main Line Health Employees FCU and Franklin Mint FCU have agreed to merge in the third quarter with Franklin Mint as the continuing institution. The merger is subject to regulatory approval and a membership vote. Main Line Health Employees FCU, Bryn Mawr, Pa., has $52 million dollars in assets, 7,000 members, three branches and 16 employees. Branches are located at Lankenau Hospital, Bryn Mawr Hospital and Paoli Memorial Hospital. Franklin Mint FCU, Media, Pa., has nearly $600 million in assets, more than 60,000 members and 28 branch locations, nine of which are in local hospitals and five in local high schools. Once the two credit unions merge, they will have 31 branch offices with a combined asset size of more than $650 million dollars.

Texas league helps Jamaican CUs on new regs

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MONTEGO BAY, Jamaica (6/4/10)--The need to strengthen and unify Jamaica’s credit unions has taken on greater importance in light of increased competitive pressures in the country’s financial markets, according to the Jamaica Co-operative Credit Union League Ltd. (JCCUL) and the Texas Credit Union League (TCUL).
Click to view larger image Jamaica’s credit unions have the vision necessary to accomplish their goals, said Mike Delker, vice president of credit union relations, Texas Credit Union League, at a joint planning session in Montego Bay, Jamaica.
Working effectively together to improve credit union operational efficiency was one of the issues dominating the recent strategic planning session between the two leagues. The two associations, affiliated through World Council of Credit Unions’ (WOCCU) International Partnerships Program since 2005, met late last month to help JCCUL plan the next five years of growth and development for Jamaica's credit unions. “The partnership between Jamaica and Texas continues to be successful, with a healthy exchange of ideas and growing assistance between the two organizations,” said Yvonne Ridguard, immediate past board president of JCCUL and a WOCCU director. “JCCUL has received tangible benefits from the Texas league, including helping establish 22 individual credit union partnerships between the two countries.” Last month’s planning session, a follow-up to an initial joint planning session in 2005, focused on readying Jamaica's credit unions for pending regulations. Also, planners discussed the need to: diversify income sources in the face of declining interest income, move to a more pro-active microlending program to strengthen credit unions' bottom lines and increase service penetration, develop stronger risk management awareness and programs, and re-engineer processes to cope with a changing environment. “Effective strategic planning plays a more important role in credit union success than ever, and I was impressed by the foresight and dedication displayed by JCCUL and its member credit unions during the planning session,” said Mike Delker, TCUL vice president of credit union relations. He traveled to Jamaica twice earlier to assist the country's credit unions. He noted their vision for Jamaica’s credit union movement was supported with goals and objectives that will enable them to even better serve their members in the future.
Click to view larger image Credit unions in Jamaica should focus on ways to collaborate effectively, Dave Grace, vice president of association services for the World Council of Credit Unions, told attendees during a joint Jamaica-Texas league meeting in Jamaica. (Photos provided by World Council of Credit Unions)
Session content, drawn in part from a prior survey of Jamaica’s credit unions and executives, emphasized overall strengthening of credit unions and the Jamaican movement. Ideas on ways to strengthen staff capabilities and improve operations--including merging institutions to result in fewer, yet stronger credit unions--were presented to more than 150 participants of the two-day event. “Jamaica’s credit unions have developed tremendous market penetration and public awareness over the past five years,” said Dave Grace, WOCCU vice president of association services, who helped facilitate the meeting. “As a result of the Jamaican government’s fiscal belt-tightening, the days of large margins have passed,” he added. “Jamaica's credit unions will have to focus on ways to make their operations more efficient through strategic, collaborative efforts designed to improve their market position and member-service capabilities.”

22 become CU development educators

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MADISON, Wis. (6/4/10)--Twenty-two credit union professionals have graduated from the Credit Union Development Education (DE) Training program held at the University of Wisconsin campus in Madison. The program is sponsored by the National Credit Union Foundation (NCUF), the World Council of Credit Unions, the Credit Union National Association, and CUNA Mutual Group.
Click to view larger image Twenty-two credit union professionals, shown with group facilitators, graduated from Development Education Training on the University of Wisconsin-Madison campus after undergoing a week-long program in which participants completed group exercises and other credit union-related activities. (Photo provided by the National Credit Union Foundation)
During the week-long program, participants completed team projects that proposed solutions for credit unions to help alleviate or eliminate challenging situations in any given area. “We have new case studies this year, incorporating challenges credit unions face today while continuing to provide critical lessons in cooperative principles and credit union philosophy,” said DE Training Facilitator Tom Decker, NCUF director of social impact management. DE training strives for timeliness “as participants work through critical issues that include expanding services to the underbanked, shifting of member demographics, national branding and succession planning,” he said. Thong Yang, loan officer, Marathon County Employees CU in Wausau, Wis., commented on his DE experience. “This event has had a huge emotional effect on me,” said Yang. “It not only taught me how I can improve my work life, but also how I can impact my community and the world.” The second of this year’s scheduled DE training classes will take place Aug. 11-18 at IslandWood located on Bainbridge Island in Washington. IslandWood is designed to use the environment as a classroom. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. Participants receive:
* Skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations; * Credit Union Development Educators (CUDEs) certification--more than 900 from America and 11 other countries have graduated from the training; * Realization that credit union issues are global--and that credit unions grow stronger by working cooperatively; and * Understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace.
Scholarships to attend the program are available through NCUF’s DE Fund and several state credit union foundations and leagues. “We realize that the economy is tough, so we are doing everything we can to make it easy as possible for credit unions to send representatives to DE training,” Decker said. For a list of graduates, use the link.