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Four CUs others sue MetaBank over 4M CD fraud

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SIOUX CITY, Iowa (7/14/09)--Four credit unions are among the eight groups that have sued MetaBank over fraudulent certificates of deposit (CDs) they bought from a former bank employee between 1995 and 2008, according to MetaBank's filing with the Securities and Exchange Commission (SEC). The former employee, Charlene Marie Pickhinke, 48, of Sac City, Iowa, pleaded guilty Thursday in U.S. District Court in Sioux City, Iowa, to stealing $4.2 million from as many as 50 credit unions and banks through wire fraud, making a false statement in a bank's records, money laundering and aggravated identity theft (Des Moines Register July 11). She faces up to 82 years in prison and a fine of $8 million Pickhinke worked for the bank from 1979 to May 18, 2007. In its SEC quarterly filing, MetaBank's parent company, Meta Financial Group based in Storm Lake, Iowa, disclosed the fraud. It said Pickhinke used the funds of new victims to pay off the previous victims in her scheme. The SEC filing named four credit unions among those suing to recover funds related to the phony CDs. They are:
* Guardian Angel CU, a $40 million asset credit union basedBerlin, N.H. It filed a class action complaint in the U.S. District Court in New Hampshire on July 14, 2008. The suit says the credit union deposited $99,000 in April 2005 with MetaBank in exchange for a CD. The credit union renewed the CD twice before being notified by the bank about the fraud. Its complaint estimates more than 50 institutions bought the CDs. * Coreplus FCU, a $188 million asset credit union based in Norwich, Conn. It filed a civil action in the Superior Court for New London County, Conn. on Nov. 18, 2008. The Des Moines Register said the case was dismissed by the two parties voluntarily in March. * Hamilton FCU, a $27 million asset credit union in Novato, Calif. It filed a class action suit in March in the U.S. District Court for the Northern District of California; * East Idaho CU, Idaho Falls, Idaho. The $206 million asset credit union filed its suit in District Court for the Seventh District of Idaho.
These and several cases filed by banks arose "after MetaBank was contacted by another institution but could find no record of the CD it had allegedly purchased, and commenced an investigation," said the SEC filing. The bank's parent company said that Pickhinke sold the CDs, using MetaBank's name, to the financial institutions via an independent broker. She instructed purchases to wire the purchase money into one of a number of false accounts she created at the bank.

PCUA Be Green task force makes recommendations

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HARRISBURG, Pa. (7/14/09)--A report to the Pennsylvania Credit Union Association (PCUA) outlines how the state's credit unions can practice and implement "green" programs and initiatives to benefit members. PCUA's "Be Green" task force chairs Joe Wambach and Bret Davis submitted a report and recommendations to PCUA President/CEO Jim McCormack (Life is a Highway July 13). The task force explored these areas:
* Cap-and-Trade and additional federal regulations; * Pros and cons of green construction and building renovations; * Future Commonwealth of Pennsylvania offerings and incentives through the Department of Environmental Protection; * Significance of Generation Y preference for green initiatives, marketing and lending opportunities; and * Establishment of a comprehensive list of "Be Green" best practices applicable to any size credit union and its individual members.

CUNA Mutual CEO speaks about economy strategies

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HIGHTSTOWN, N.J. (7/14/09)--The global economy and CUNA Mutual Group's strategic path were among the topics discussed by CUNA Mutual President/CEO Jeff Post during a visit with 45 New Jersey credit union leaders at an open form last week. Post said he was concerned about the economic downturn, specifically in Florida, California and Nevada, but noted that all states have signs they are hurting in areas such as housing, reported the New Jersey Credit Union League in its new daily newsletter, The Daily Exchange (July 13). Last year was the first year that the company's mortgage insurance business lost money, he told the group. This was due to the housing downturn but credit unions have felt the impact less than other lenders because of their solid underwriting and relationships with their members, Post added. Other topics he discussed:
* The company's philosophy on claims. CUNA Mutual looks for ways to pay claims, but, for the good of all credit unions, CUNA Mutual should not be in the business of paying questionable claims, Post said. The company may even need to turn some credit unions down for bond coverage if they do not have certain safeguards in place or are in financial trouble, he added. * Demutualization. CUNA Mutual has no plans to demutualize, he emphasized. Instead, it is committed to the credit union space and looks to continue as an industry partner. The company gives back roughly $50 million a year to the credit union industry, he said, noting the example of its work when a Wisconsin credit union succeeded in proving to a U.S. District Court jury that its core products should not fall under the unrelated business income tax. * Support of credit unions hit by fraud in the CU National Mortgage bankruptcy case. CUNA Mutual is providing legal support for credit unions whose mortgage loans were fraudulently sold to Fannie Mae. * A national branding campaign. Post would consider supporting a national branding campaign if the industry could provide a unified proposal. He commended New Jersey credit unions for their support of the "New Jersey Credit Unions, Banking You Can Trust" cooperative advertising campaign.

CU Central of Canada to offer Filene reports

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MADISON, Wis. (7/14/09)--Credit Union Central of Canada (CUCC), the national voice and trade association for Canada’s credit unions, announced its sponsorship of the Filene Research Institute, a consumer finance think tank for the North American credit union system. Its financial commitment makes Credit Union Central of Canada Filene’s newest Silver Benefactor. “The time for innovation has never been more urgent and our increased affiliation with the Filene Research Institute will benefit all Canadian credit unions,” said Cheryl Byrne, Credit Union Central’s vice president of knowledge services. In addition to the electronic access to seven research reports each year, CUCC’s member credit unions will have immediate access to Filene’s CU Tomorrow Project, a 13-report series completed over two years to document the emerging needs of young adult credit union members, professionals and volunteers. “Credit unions across North America share remarkably similar challenges,” said Mark Meyer, Filene CEO. “We appreciate CUCC’s confidence in the Filene Research Institute.” Credit Union Central of Canada immediately will begin work with Filene’s i3 innovation group and with the institute to identify important research topics for Canadian credit unions.

CU System briefs (07/13/2009)

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* TACOMA, Wash. (7/14/09)--Members of Tacoma-based $59 million asset MilePost CU have approved a merger with Sound CU, a $419 million asset credit union also in Tacoma, according to both credit unions' websites. MilePost, which held a special membership meeting June 30, said the approval rate was over 90%. The merger will be effective Sept. 1, said Sound CU. According to a local newspaper, the combined credit union will have about $477 million in assets. MilePost has 6,600 members and Sound has 37,400. There will be no branch closures or layoffs (The News Tribune July 11). Sound has 13 previous mergers under its belt … * YOUNGSTOWN, Ohio (7/14/09)--Two Ohio credit unions have announced they will merge, effective Aug. 1. The Greater Warren Community FCU, Warren, will become part of the Associated School Employees CU, Youngstown, and will adopt Associated School's name, they announced (Business Journal Daily). The combined credit union will have $150 million in assets and more than 20,000 members. Greater Warren Community President Brian McCue will become chief financial officer of the combined credit union, with Michael J. Kurish remaining president/CEO. All eight offices will remain open and all employees will keep their jobs, said Kurish.

Experience Learning Live Conference adds sessions

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MADISON, Wis. (7/14/09)--Credit union training and human resources topics were added to the 2009 Experience Learning Live Conference as it integrates with the Credit Union National Association’s Human Resource Management School. The new conference will be Oct. 25-28 in Nashville, Tenn., for credit union training and human resource professionals. This year’s opening general session speaker Robin Crow will outline a seven-step process for creating leaders who will make a difference. Crow, studio owner of Dark Horse Recording, will share examples from his experiences with major label recording artists. His studio has recorded albums from artists including Amy Grant, Trace Adkins, Neil Diamond, Martina McBride, Montgomery Gentry, Faith Hill and others. The closing general session, “Once Upon a Time: Using Story Telling to Build Teamwork and Inspire Passion,” will teach attendees how to tell their organization’s story in a way that enhances its public image, creates a next level branding or marketing tool, and attracts new members. Margaret Moreford, president of consulting and training company The Edge Inc., will explain how to use imagery to connect with employees and co-workers on a deeper, emotional level. Training-focused sessions will explore: four generations in one workplace, emotional intelligence, credit union university, developing internal strategic partners, instructional design, assessing the need for training and making training stick. Human resource sessions will address: conducting effective performance reviews, retention coaching, unleashing creativity, aligning human resource strategies with credit union strategic plans, conducting effective workplace investigations, human resources measurement and metrics, employment law updates, and workplace diversity. Winners of last year’s ELLy awards give presentations on their award-winning training ideas. The ELLys are the only national awards presented to credit union trainers for their work in professional staff development. For more information, use the link.

Greylock FCU offers financing for Edith Wharton home auction

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KANSAS CITY (7/14/09)--A Pittsfield, Mass., credit union is offering financing for four of five luxury condominiums that used to be American Pulitzer Prize-winning novelist Edith Wharton’s former summer home, known as Pine Acres. The condos were put up for auction Saturday. The condominiums, located in Massachusetts’ Berkshire Hills area, are now referred to as The Gables and range in size from 2,000 to 3,000 square feet (PR-inside.com July 5). As depicted in many of Wharton’s novels, including :The Age of Innocence” and “Ethan Frome,” the grandiose lifestyles of the wealthy were a cornerstone of the Berkshires in the 19th century. Online bidding for the auction was provided by Proxibed, and financing options are available through Greylock, a $1.127 billion-asset credit union and United Country Home Mortgage. Owners of the individual condominiums put them up for sale themselves, so it is not known if any were sold during Saturday’s auction, Lisa Trybus, Greylock vice president of mortgage origination, told News Now. So far, no one has applied for financing for any condo purchases through the credit union, she added.

CU pilots Va.s state employee loan program

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RICHMOND, Va. (7/14/09)--Virginia Gov. Tim Kaine announced Monday a short-term lending program that allows state employees to take out low-interest loans up to $500 to meet emergency needs during the current economic crisis. The pilot program is a partnership between Virginia CU (VACU) and the commonwealth of Virginia Campaign--a nonprofit, 501(c) organizations that coordinate the charitable giving of state workers (Richmond Times-Dispatch and WCAV19 July 13). State workers who are members of Virginia CU, a $1.689 billion asset, Richmond, Va.-based credit union, are eligible for the program, which will not cost any taxpayers money. Borrowers would have up to six months to repay the debt through payroll deductions, the newspaper said. “The governor hopes this will be a model for private companies to use for their employees,” Gordon Hickey, Kaine’s press secretary, told the paper. Meanwhile, banks and other traditional lending institutions have been reticent to extend credit as the national recession continues, and usually do not provide the smaller emergency loans that are made available through the program, the newspaper said. The program garnered the attention of Forbes.com, which picked up the story. Use the link.

IWSJI ICNNI Seek credit cards at CUs

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NEW YORK (7/14/09)--Consumers should seek credit cards at credit unions to obtain better rates and terms according to The Wall Street Journal and CNNMoney.com. A small-business owner asked Kelly Spors in her Wall Street Journal column, “Small Talk,” what to do because the owner’s credit card company announced it would stop taking new charges. “A good strategy is to approach community banks and credit unions rather than major national banks, says Ruth Sheets, a consultant to small and midsized businesses,” Spors wrote Monday. “These smaller local lending institutions suffered less from the financial mess on Wall Street and are using the credit crunch to strengthen their ties with local business owners. “Smaller banks and credit unions often carry their own branded credit cards and charge lower fees than large banks,” Spors added. “If you can’t qualify for a regular card, you may at least be able to get a secured card, which requires cash up front as collateral.” With credit card reforms signed into law by President Barack Obama in May, consumers need to protect themselves from a credit card backlash, and credit unions are an option, advised a Friday CNNMoney.com column. If consumers carry a balance [on a credit card] and have a credit score of 730 or above, they should move their big-bank card into secondary status and rotate in a regional bank or credit union card, Curtis Arnold of Card Ratings.com advised in the column. Because these institutions employ stricter underwriting standards, they offer lower rates and rarer rate hikes. While the average major bank card currently has a 13.76% interest rate, National Institutes of Health FCU, a $396.9 million asset, Rockville, Md.-based credit union, is advertising a Visa Platinum Rewards card at 8.9%, Arnold said.