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CUNA closed Monday for holiday no INews NowI (07/01/2010)

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WASHINGTON and MADISON, Wis. (7/2/10)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Monday in observance of the Independence Day holiday. News Now will not post a Monday issue but will resume regular production on Tuesday.

Irish league opposes Central Bank bill

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DUBLIN, Ire. (7/2/10)--The Irish League of Credit Unions (ILCU) has issued a statement expressing credit unions' opposition to Ireland's Central Bank Reform Bill, which was being debated in its legislature Thursday. The bill contains proposals that would change the day-to-day operations of credit unions, include too much red tape and result in extra costs that would hinder credit unions in helping their members reschedule loans, said ILCU (Business and Finance Daily News Service July 1). "We do not feel that our concerns and the concerns of our member credit unions have been taken into consideration either in the original bill or the subsequent suggested amendments to it," said the league. "Credit unions exist to help their members. New regulations designed for banks will prevent us from helping ordinary members with any financial difficulties." ILCU said it objects to sections that refer to the long-term micromanagement of credit unions by the regulator. Ireland's Central Bank has proposed conducting stress tests on some credit unions with loans in arrears and revising ILCU's Credit Unions Savings Protection Fund, which the registrar of credit unions said is inadequate for a widespread economic downturn (News Now June 25).

CU van on 8000-mile road trip

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ONTARIO, Calif. (7/2/10)--The California and Nevada Credit Union Leagues received a visit from a man embarking on a 100-day road trip to spread the word about credit unions. Mark DeBellis, president of California-based PSB Integrated Marketing, stopped at the leagues’ offices about 50 days into his trip. His journey is focused on visiting credit unions and promoting the credit union difference. “Throughout this journey, I’m constantly being reminded of how special the people that serve this industry really are,” he told the league. DeBellis now will drive to Arizona, New Mexico, Texas and Colorado. He has completed more than 8,000 miles in his trip through California and expects to double his mileage. His road trip kicked off in mid-April during the leagues’ 2010 Government Relations Rally in Sacramento, Calif. DeBellis’ van reads: “100 days, 8,000 miles and one man driving for a cause.” The van has soft chairs for DeBellis’ guests, a microwave, refrigerator, cabinets, table, a built-in bed and electric generator. He also has money saving tips, budget worksheets, press releases and educational materials. DeBellis has met credit union supporters at the credit unions he has visited and also has talked to passersby to tell them about credit unions. He is visiting as many credit unions and leagues as possible, according to the California league. For more information about DeBellis’ trip, use the link.

Hurricane Alex good reminder for CUs to be prepared

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FARMERS BRANCH, Texas (7/2/10)--Texas credit unions were spared from Hurricane Alex, which weakened to a tropical storm early Thursday while moving across northern Mexico after making landfall in Soto La Marina, Mexico, Wednesday at 9 p.m. CT. CUNA Mutual reported that none of its insured credit unions in Brownsville, Texas, suffered damages, Phil Tschudy, CUNA Mutual media relations manager, told News Now. Brownsville is 110 miles north of the landfall. Though the storm did not harm credit unions, Alex is a good reminder for them to be prepared, according to Dick Ensweiler, Texas Credit Union League president/CEO. The Texas league, the National Credit Union Administration, and CUNA Mutual Group took measures Wednesday to ensure credit unions were prepared for the storm. The league actively monitored Alex’s progress and encouraged credit unions in the area to review their contingency plans. Alex caused about 11 inches of rain to fall in Brownsville. It was the earliest Category 2 hurricane to hit Texas in more than 40 years (Associated Press July 1). No injuries or major damage was reported. Fewer than 2% of customers were without power, according to American Electrical Power.

CU System briefs (07/01/2010)

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* HARRISBURG, Pa. (7/2/10)--Alan Musselman of First Commonwealth FCU, Lehigh Valley, and a Pennsylvania Credit Union Association (PCUA) Governmental Affairs Committee member, and Christine Seitz of PCUA were among the community and business representatives on a team that interviewed two candidates for the 131st District state House seat at the Greater Lehigh Valley Chamber of Commerce in Allentown (Life is a Highway June 30). Justin Simmons (Rep.) and Mike Horton (Dem.) will face off in November's general election to fill the seat held by Rep. Karen Beyer, who was defeated in the primaries by Simmons. Topics discussed included financial regulatory reform; business taxes and expansion of the sales tax; transportation funding; and the candidates' priorities. Simmons said he is opposed to increasing financial regulations and business taxes; Horton was noncommittal, said PCUA ... * AUBURN, Mass. (7/2/10)--Police are seeking an aggressive suspect in a string of robberies in Auburn, Mass., including a robbery Monday morning of Central One FCU, based in Shrewsbury. The masked man, claiming to have a bomb, entered the credit union and pointed a gun at two employees, threatened their lives, demanded cash and ordered them to lie face down on the floor before fleeing with the money into the woods. They were the only people in the credit union at that time. In an earlier robbery of a bank June 6 the suspect threatened personnel with a gun and claimed to have a grenade. Police believe he is also responsible for two other robberies in Auburn and several banks in Worcester since 2007 (Telegram & Gazette Staff June 29 and June 30) ... * ST. PAUL, Minn. (7/2/10)--A South St. Paul, Minn., man was sentenced to 60 months in prison for robbing the Wakota Federal CU, South St. Paul, on Oct. 30, said the U.S. Attorney's Office for the District of Minnesota. Steven Lee Olson, pleaded guilty on March 9 to one count of credit union robbery in a plea agreement. Olson also admitted he had committed five other bank robberies and one attempted bank robbery from Sept. 25 to Oct 20, said prosecutors. (Targeted News Service June28) ... * SACRAMENTO, Calif. (7/2/10)--Employees and business partners of The Golden 1 CU contributed 15,989 rolls of toilet paper to benefit
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local nonprofits, the Sacramento-based credit union announced. The second annual United Way Toilet Paper Drive was on June 18. The credit union said toilet paper costs each agency thousands of dollars each year that could be spent on other forms of assistance. Sponsored by Golden 1, FOX40, AT&T, Foodlink, The Sacramento Bee and Hot 103.5 radio, the combined effort brought in 46,766 rolls of toilet paper, just short of the 50,000 goal. Last year the effort raised 35,000 rolls. Golden 1's contributions represented 35.5% of the total collected. Employees contributed 10,205 of those, with 5,784 from its supportive business partners. Pictured are, from left, front row: Bob Garrison and Scott Ingram, and back row, Lennie Gzesh, Ed Marr, CEO Teresa A. Halleck, Donna Bland, Tammy DAvis and Bill Thorla. (Photo provided by The Golden 1 CU) ... * GREELEY, Colo. (7/2/10)--Geraldine "Jeri" Clara Cranwell, 85, died in Greeley, Colo., on Sunday. She served as president/manager of School District 6 CU (now Weld Schools CU) from 1963 until her retirement in 1990. She was active in the Credit Union National Association and spoke at many conventions, according to the Greeley Tribune (June 30) ...

Merged CUs members get 9 dividend

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MADISON, Wis. (7/2/10)--As part of the merger of State Central CU, West Allis, Wis., with Summit CU, Madison, Wis., members of State Central are being paid a minimum 9% dividend--totaling $5.2 million--on balances they had as of Oct. 31. The amount of the dividend will depend on the size of the member’s account. State Central had 8,600 members (Milwaukee Journal-Sentinel June 30). The merger became effective at the close of business on Wednesday. State Central and Summit announced earlier this year that they intended to merge (News Now Feb. 25). “As a member-owner, you have helped build State Central CU and are the reason for its success,” the credit unions said in a statement to members when the merger was announced. “To recognize your contribution and thank you for your commitment, a special dividend will be paid to all open-deposit accounts.” State Central, which reopened as Summit on Thursday, has assets of about $68.8 million. Summit’s assets will grow to nearly $1.5 billion with the merger, the newspaper said. Both credit unions were profitable in 2009, said the newspaper.

Southwest Corporate reports record investment activity

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PLANO, Texas (7/2/10)--A large increase in deposits has sparked record-setting investment activity through Southwest Corporate FCU’s advisory and investment services, as credit unions seek to find alternatives to cash for their investment dollars, the corporate said. Nationally, credit union member deposits increased by more than $20 billion in first quarter 2010, according to National Credit Union Administration (NCUA) 5300 Call Report data. Credit unions have been able to lend about $1 billion of the “new money” to their members, leaving credit unions in a quandary about what to do with the remaining $19 billion, the Plano, Texas-based corporate said. The flood of cash into credit unions came despite many credit unions’ continued efforts to tighten deposit pricing, the corporate said. A further challenge occurred when investment yields continued to decline. Weak loan demand, the flood of cash, and incredibly low investment yields had an impact on portfolio decisions. Of the $19 billion in added liquidity, credit unions kept $11 billion in cash, increasing their cash positions to 8.79% of assets--the highest level in two years. The remaining $8 billion was placed predominantly in agency bonds. U.S. credit unions increased agency bond holdings by 12% in the first quarter, according to NCUA statistics. Agency bonds totaled $120 billion, or 38% of all credit union investments. The same trends played out at Southwest Corporate, said Mike McGinnis, Southwest Corporate Investment Services (SCIS) director of investment sales. Certificate balances remained constant through the first quarter, while overnight deposits increased by $1.5 billion, he said. Bond investments soared over the same period. McGinnis also noted that many new credit unions have been adding securities to their policies and portfolios, both through the SCIS advisory service--which has more than $10 billion in investments under advisement--and through Southwest Corporate's brokerage department, which is on track to place more than $1 billion in bonds this year through a partnership with CU Investment Solutions, Inc. “We saw a significant increase in credit unions placing bond investments through our advisors and investment officers,” McGinnis said. “In fact, total bond holdings purchased through our advisory service increased to $3.53 billion, the highest level in our 22-year history.” Southwest Corporate also experienced an increase in holdings with optionality and with maturities of between one and five years, he added. “When positioned properly, these securities can positively impact the portfolio and the overall balance sheet,” McGinnis said. “It is critical, however, that credit unions monitor cash flows and interest rate risk, as we anticipate a rising rate environment in early 2011. Because many credit unions are focusing on yield, we are ardently counseling investment managers to closely evaluate the impact of callable instruments and the prepayment/extension risk of mortgage-backed securities.”

Corporates interchange in top 10 INews NowI stories for June

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MADISON, Wis. (7/2/10)--Interchange accounted for six of the top 10 stories in News Now for June, but the month’s most-read story is about a charge the National Credit Union Administration (NCUA) plans to assess to repay corporate insurance coverage. Other top stories include Regulation DD, Regulation E, Bank Secrecy Act violations and corrective actions by NCUA. The stories are: 10. NCUA orders corrective actions ALEXANDRIA, Va. (6/14/10)--Sperry Associates FCU, of Garden City Park, N.Y., has been ordered by the National Credit Union Administration to take a series of corrective actions. 9. New interchange language, same concerns, says CUNA WASHINGTON (6/22/10)--The Credit Union National Association (CUNA) said Monday that credit unions “would almost certainly” have to oppose a final financial regulatory reform bill unless lawmakers remove or significantly change even the modified debit interchange provisions put forward yesterday by House conferees. 8. Financial institution assessed $1M penalty for BSA violations VIENNA, Va. (6/4/10)--The Financial Crimes Enforcement Network revealed Thursday that it assessed a $1 million civil money penalty against a savings bank in New Jersey for violating a number of Bank Secrecy Act requirements. 7. Interchange amendment report: Negative impact in five areas MAYNARD, Mass. (6/11/10)--The interchange amendment in the Senate version of the regulatory reform bill would have negative consequences in five areas, according to an independent industry study. 6. White House official, CUNA meet on interchange WASHINGTON (6/7/10)--A key White House official met with the Credit Union National Association Friday to hear the credit union position on pending legislation that would allow the government to set interchange fees. 5. CUNA ‘disappointed’ by reg reform bill’s interchange treatment WASHINGTON (6/28/10)--Credit Union National Association President/CEO Dan Mica on Friday said that he was “disappointed” that House and Senate regulatory reform conferees allowed legislation that would enable government intervention in interchange fee negotiations to remain in the final version of financial regulatory reform. 4. Frank underscores CU exemption from new interchange rules WASHINGTON (6/30/10)--House Financial Services Committee Chairman Barney Frank (D-Mass.), a central figure in the recently completed House-Senate financial regulatory reform conference report, assured his colleagues that the Federal Reserve's new rules governing interchange fees would not apply to credit unions or other small institutions with under $10 billion in assets. 3. Fed releases Reg DD, E clarifications WASHINGTON (6/1/10)--The Federal Reserve last week clarified some aspects of its Regulation E, Electronic Fund Transfers, and Regulation DD, Truth in Savings, that address overdraft services. 2. Senate conferees accept House option on interchange WASHINGTON (6/23/10)--The Credit Union National Association on Tuesday repeated its call for credit unions to oppose Congress’s final financial regulatory reform bill, as the House Senate lawmakers voted to accept a House proposal that retained portions of that bill that would modify current interchange practices. 1. NCUA assesses 13-bp charge to repay corporate CU coverage ALEXANDRIA, Va. (6/18/10)--Credit unions will soon be charged an assessment of 0.134% of insured shares as the National Credit Union Administration collects a portion of the funds necessary to pay for the costs of the corporate stabilization.

Ghana Louisiana CUs partner in WOCCU program

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NEW ORLEANS (7/2/10)--Louisiana credit unions will gain insights into their counterparts in the African nation of Ghana because of a new credit union-to-credit union partnership that’s part of World Council of Credit Unions (WOCCU) International Partnerships Program.
Click to view larger image Kusi Boachie, CEO of GESRO Co-operative CU in Ghana (left) and Mark Rosa, president/CEO of Jefferson Financial CU, Metairie, La., hold a banner commemorating their credit unions’ new partnership. The relationship is part of the World Council of Credit Unions’ International Partnerships Program. (Photo provided by World Council of Credit Unions)
Jefferson Financial CU in Metairie, La., and GESRO Co-operative CU in Sekondi-Takoradi, Ghana, signed an agreement of mutual support last week in New Orleans. This is the third WOCCU partnership for Louisiana. They include the partnerships between the Louisiana Credit Union League (LCUL) and the Russian Credit Union League, and between Barksdale FCU in Bossier City, La., and Russia’s Altai Credit Union Association. “These partnerships give us an opportunity to explore new solutions to old problems that we may have not yet thought of, but which others already have put into practice,” said Anne Cochran, LCUL president/CEO. Kusi Boachie, GESRO CEO, visited its New Orleans partner credit union for the first time last week. Boachie spent the week with Jefferson Financial President/ CEO Mark Rosa and his staff to learn about the credit union’s operations and discuss areas of cooperation for the partnership. Boachie took special interest in credit and risk management, and marketing and information technology. Rosa and his team also learned about GESRO during Boachie’s presentation. “This week has been important for Jefferson Financial because the partnership will allow us to not only benefit our members in Jefferson Parish here in Louisiana, but also members of GESRO Co-operative CU in Ghana,” Rosa said. Boachie also visited New Orleans Firemen’s FCU and the league offices, and attended a league chapter meeting. The two credit unions held a partnership planning session with WOCCU to map out activities and determine the partnership’s focus. Helping GESRO create a marketing strategy to increase awareness about its products and services and streamline its loan and collections process are high on the list of preferred accomplishments. The assistance will be accomplished through on-site training in Louisiana and in Ghana, as well as peer-to-peer communication among the credit unions’ staff members. “I have learned so much from Jefferson Financial CU and am convinced that this partnership will result in real growth, efficiency and sustainability for the benefit of our members and the African continent as a whole,” Boachie said. “This is not just a partnership, but a strategic alliance for mutual benefit.” Boachie also participated in the Louisiana/Mississippi Supervisory Committee Conference, where he attended a workshop on financial statements for cooperatives.