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NEW: Court Dismisses NCUA's Federal Claims In Goldman Sachs, Grants Appeal

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LOS ANGELES (7/15/13 UPDATED 12:30 p.m. CT)--A federal judge in Los Angeles Friday ruled that National Credit Union Administration waited too long before filing some of its claims in a lawsuit against Goldman Sachs over $491 million in losses from residential mortgage-backed securities sold to U.S. Central FCU and Western Corporate FCU.
However, U.S. District Court Judge George Wu also said he would grant NCUA's request for an interlocutory appeal to the Ninth Circuit Court of Appeals on the time-barred issue. The decision affects the federal claims in the case, but not the state-based claims, which will still move forward.
"The court grants the motion for interlocutory appeal on the question of whether the Extender Statute applies to extend the statute of repose...because this issue is a controlling question of law, has generated a substantial degree of disagreement, and its resolution can materially advance this litigation," said Wu.
It was the second decision in a week that dismissed NCUA's claims against brokerage firms that sold or underwrote  residential mortgage-backed securities (RMBS) that caused the collapse of several corporates, including U.S. Central and WesCorp. A U.S. District Court in Kansas last week dismissed the agency's suit vs. Barclays Capital and reaffirmed the dismissal of 12 of 20 claims against Credit Suisse, saying the claims were time-barred and that NCUA had not filed the case in time. (See related story in News Now, Court Dismisses NCUA Lawsuit Over Corporate CU Losses Vs. Barclays).
In the Goldman Sachs suit, the agency claimed U.S. Central and WesCorp purchased 21 RMBS from Goldman Sachs, which also acted as the underwriter. NCUA alleged losses of more than $491 million in the case.
In each of the lawsuits, NCUA alleged that the offering documents for the securities sold to the corporates "systematically abandoned" underwriting standards and misled the corporates into making the investments.  U.S. Central and WesCorp were liquidated in 2009-2010 as a result of their losses.
The Tenth Circuit Court of Appeals in Kansas also is reviewing the time-barred issues in a separate suit NCUA filed against RBS Securities.

World CU Conference Kicks Off In Ottawa

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OTTAWA (7/15/13)--The 2013 World Credit Union Conference, presented by the World Council of Credit Unions, kicked off Sunday in Ottawa, Canada, with the opening ceremony and international flag parade.
More than 2,000 attendees were expected at the Ottawa Convention Center for the event, which ends Wednesday.
General Session keynote speakers this week include:
  • Today:  Ian Shelley, information technology and mobile payments expert and former partner at KPMG, who will discuss the future of mobile banking technology. Shelley has 20 years' experience with credit unions, banks, insurance agencies and regulators in Australia, Bermuda, Canada and the United Kingdom.
  • Tuesday: Charlene Li, New York Times best-selling author of Groundswell and Open Leadership, and social media and technologies expert, who will discuss social media and the financial sector.  The founder of the Altimeter Group, Li was named one of the 100 most creative people in business by Fast Company when she served as former vice president and principal analyst at Forrester Research.
  • Wednesday: Simon Sinek, corporate leadership strategist and author of Start With Why: How Great Leaders Inspire Everyone To Take Action, who will speak about corporate leadership strategy. Sinek is known for his theory of the "Golden Circle," a natural pattern grounded in the biology of human decision-making that explains why some people and organizations are more inspiring than others.
Preceding the opening ceremony, the Global Women's Leadership Forum met and heard speaker Sheryl WuDunn, Pulitzer Prize winner and co-author, along with her husband New York Times columnist Nick Kristoff,  of  Half the Sky: Turning Oppression into Opportunity for Women Worldwide.

The conference includes more than 30 breakout sessions with leaders from around the world in five educational tracks:  leadership and strategy, technology, international credit union experience, advocacy and governmental affairs, and innovative solutions.
News Now will provide coverage of the event, which ends Wednesday. To keep up with the conference on Twitter, use the hashtag #WCUC2013 or the handle @woccu.

CU System Briefs (07/15/2013)

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  • PITTSFIELD, Mass. (7/15/13)--A woman was sentenced to three years in prison for stealing $200,000 from a branch of Greylock FCU based in Pittsfield, Mass. After pleading guilty to charges of making false entries into corporate books and larceny of more than $250, Janine Shepard was sentenced Wednesday in Berkshire (Mass.) Superior Court. Shepard allegedly stole the money between Jan. 1, 2010, and Feb. 18, 2102, while she was a head teller at the $1.13 billion asset credit union, prosecutors said (The Sun Chronicle July 11) ...

World Council To Explore Haitian Utility Mobile Payments

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MADISON, Wis. (7/15/13)--The World Council of Credit Unions will be researching the feasibility of mobile bill payments for Haitian utility customers, after the U.S. Agency for International Development (USAID) in Haiti said it will fund the formation of Haiti's first electric utility to provide 24/7 power.

Click to view larger image The use of mobile money is growing in Haiti. Yvrose Joseph (pictured above), World Council director of financial products and services in Haiti, reads Digicel's TchoTcho Mobile instructions for its mobile wallet services at a recent event. World Council also is exploring mobile utility payments in northeastern Haiti and is working with the country's credit unions to implement the Boom mobile banking product. (Photo provided by the World Council of Credit Unions)
USAID's $24 million, three-year Pilot Project for Sustainable Electricity Distribution (PPSELD) program will provide electricity to at least 5,000 customers in northeastern Haiti. NRECA International Ltd. is managing the program, which involves World Council, ESD Engineering S.R.L. and The Cadmus Group Inc. as partners.

"The selection of World Council as part of the PPSELD program offers an exciting step forward in Haiti's mobile payment environment," said Brian Branch, World Council president/CEO. "Involving a financial service organization with ties to the country's locally owned caisses populaires [credit unions] demonstrates Haiti's commitment to developing true, homegrown mobile banking services for its people."

World Council will examine the preferences and availability of traditional financial services and mobile money options among current and potential customers in Caracol, Terrier Rouge, Trou du Nord and Limonade.

World Council has managed the Haiti Mobile Money Initiative (HMMI), funded by USAID and the Bill & Melinda Gates Foundation, since it began in 2010, six months after the country's devastating earthquake. HMMI is a $10 million incentive fund to jumpstart financial services via cellphones in Haiti and to expedite the delivery of cash assistance from humanitarian agencies to earthquake victims.

Digicel's TchoTcho Mobile, which received the HMMI's "first-to-market" award last year, gives people the ability to load, transfer and receive stored cellphone value and pay for goods using their cellphones. With substantial technical assistance from HMMI, Digicel's TchoTcho Mobile recently migrated its technology to a high-capacity platform and broadened its agent network to better support mobile money expansion in Haiti. The new platform includes a mobile bill payment system among other customized services.

In June, World Council provided software and technical assistance to the Le Levier Federation of credit unions to launch the Boom mobile banking product. It is the first mobile product in Haiti to connect user transactions to credit union current accounts rather than use stored cellphone value. Offered by more than 60 credit union locations nationwide, Boom provides Haitians the ability to register, deposit and transfer funds to registered and unregistered users for free and to make low-cost cash withdrawals within seconds via their cellphones.

Boom also allows Haitians to store and transfer larger amounts of funds than is otherwise available via mobile wallet solutions.

The Le Levier Federation is composed of 20 federated credit unions and 27 client credit unions collectively comprising 70 locations in all 10 departments of Haiti. Le Levier's affiliated credit unions serve more than 360,000 families nationwide.

Annual Report Highlights NCUF Activities For 2012-2013

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MADISON, Wis. (7/15/13)--The National Credit Union Foundation has released its 2012-2013 Annual Report with the theme "Helping Credit Unions Making the Difference."
Click to view larger image Click for larger view
The report highlights NCUF activities related to programs and grants during the past 12 months.
Among the programs the report highlights is NCUF's REAL Solutions initiative, which partners with state credit union leagues to help credit unions build member and consumer financial capability. REAL Solutions has worked with 12 states during the past three years and helped 801 credit union professionals become certified financial counselors. By the end of the 2013, that number will grow to 16 states with an additional 350 to 400 counselors.
In 2012, NCUF funded 19 new grants for $287,387. During the past year, NCUF also refocused the annual grant process moving from a variety of smaller grants to more-focused, larger grants for a bigger impact, the report said.
NCUF also sponsors the Credit Union Development Educator (CUDE) program. Two DE Training classes were held in 2012 and this year, 40 new CUDEs joined the ranks after attending the Spring 2013 DE Training in Madison, Wis. A second training will be held in September. Since the DE Program started, more than 1,000 credit union advocates from more 30 countries have graduated from DE Training.
NCUF reported assets of $6.1 million for 2013.
To download the report, use the link.

NEW: World CU Conference Opens With Canadian Fanfare

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OTTAWA, Canada (7/15/13 UPDATED 11:45 am. CT)--The World Council of Credit Unions welcomed 2,376 attendees from 61 countries at the Ottawa Convention Centre in Ottawa, Canada, Sunday evening for the opening ceremonies of its 2013 World Credit Union Conference.

Through Wednesday, participants will network and learn from top industry experts on topics such as mobile banking, social media and corporate leadership.

World Council Chair Manuel Rabines, general manager of Federacion Nacional de Cooperativas de Ahorro y Credito del Peru (FENACREP), the trade association serving Peru's credit unions, welcomed attendees to the event.

"During my travels here from Peru, I reflected upon the great differences that exist in this world that we share," Rabines said. "Despite those differences, there is a common denominator throughout -- the credit union model. This model offers a variety of solutions to common problems and is continuously evolving."

Conference attendees also heard from Member of the Canadian Parliament and Liberal Advocate for Co-operatives Mauril Belanger, who spoke in English, French and Spanish, recognizing the importance of the audience's international cooperative efforts.

"I've come to believe credit unions are an element to the solution to some of the world's economic challenges," Belanger said. "The principles on which cooperatives are built offer real solutions to the vast and complex problems facing humanity."

World Credit Union Conference co-host Credit Union Central of Canada (CUCC) is celebrating its 60th anniversary this year. World Council Treasurer Daniel Burns, CUCC chair, gave participants a brief lesson on Canada's cooperative history, which sparked growth in many other nations' credit union movements.

The 2013 World Credit Union Conference concludes Wednesday with a closing reception at the Canadian Museum of Civilization.

Special Report: CUs Innovate To Reach Out To Communities

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MADISON, Wis. (7/15/13)--Credit unions are innovative in reaching out to their communities and their members with the good they do. But they aren't the type to boast about it.  After all, the credit union difference is in their DNA, so what's the big deal?
It turns out to be a very big deal. The credit union difference is at the heart of credit unions' structure, their mission and philosophy, and their tax exemption. And raising awareness of the credit union difference is one of three central components of the Unite For Good campaign initiated by the Credit Union National Association and the state leagues to work toward the strategic vision in which "Americans choose credit unions as their best financial partner."
To that end, News Now today begins a new, occassional series of special reports outlining some of the more creative outreach efforts begun by credit unions. See related News Now story:  CU Adapts Mobile Banking To Serve Migrant Workers."

Staff asked the state leagues and associations what's new in community outreach efforts in their states. What success stories did they know about where a credit union made a huge difference in their community? Who in their state had tried a cutting-edge approach with particularly outstanding results?

In the first week after News Now's request, leagues in 16 states submitted names of more than 40 credit unions that fit that bill. Some provided contact information and brief descriptions of what makes their credit unions special. In addition, several leagues suggested News Now check out the winners of their state-level Louise Herring Philosophy in Action Award,  Dora Maxwell Social Responsibility Award  and the Desjardins Youth Financial Education and Adult Financial Education Awards. Any of these, they said, would be good candidates for the outreach series.

Several leagues, such as the Credit Union Association of the Dakotas, mentioned they too are collecting social good stories of their own, as is CUNA's Unite for Good website. The Northwest Credit Union Association produced a 38-page report about Oregon credit unions doing wonderful work and said its Washington state report was due the following week.

Many responses told of student-run credit unions, financial education efforts such as Reality Fairs for youth or young adults, efforts to serve the Hispanic community, and initiatives to woo young adults with new mobile banking services. Others have special savings programs with interesting twists--such as a round-up savings program--or offer financial education to blind or visually handicapped students, or provide invest-local certificates. Many help fund community resource centers or offer scholarships to reward students for voluntarism. All the efforts mentioned provide value to the member but also to the community at large.

Today's article features Ventura County CU in Ventura, Calif., discussing how it attracted 210 migrant workers and helped them save a combined total of at least $65,000. (See: CU Adapts Mobile Banking To Serve Migrant Workers.)

Credit unions that have interesting stories of their own programs can send their information to News Now at  or post them on the Unite For Good website. Use the links.

CU Adapts Mobile Banking To Serve Migrant Workers

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VENTURA, Calif. (7/15/13)--Ventura County CU in Ventura, Calif., began taking mobile banking devices out in the field two years ago to help migrant workers fulfill their financial needs. However, when it became evident in the first year of the program that it wasn't working, the credit union decided to move to use debit cards, ATMs and online banking to better meet the workers' needs.
Ventura County--about 60 miles north of Los Angeles--has 840,000 residents--including 40,000 agricultural workers. Most don't have a formal relationship with a credit union or bank, Joe Schroeder, president/CEO of Ventura County CU, told News Now
"I got here four years ago, and went out into the field and saw how hard the workers were working and knew they were being exploited by payday loan people and check cashers," Schroeder said. "So I went to our board ... and the board got behind the program. I felt the outreach to commit to agricultural workers in the county was important."
The $628 million asset credit union partnered with the World Council of Credit Unions after seeing a presentation of what World Council did in rural Mexico with mobile banking devices.
"The idea was that we would take mobile devices out into the field and open accounts in the field," Schroeder said. "We started out with mobile devices and a change-the-world 'Walt Disney' mentality. However, it didn't work that way."
Migrants don't always know when they are scheduled to work, and when they do, it is hard to get to them. Often there is no reception for electronic devices where they work, Schroeder explained. Many times workers are paid on how much they pick, and they work hard from dawn to dusk without a lot of time for banking in the field.
So the credit union moved away from mobile devices and migrated to debit cards, ATMs and some online banking for workers at two farms: the Boskovich Farm and the Ball Horticultural Co. farm.  In the past two years, the credit union has signed up 210 members at the two farms. None had previous financial relationships. "It was a dream, and we had to adapt the dream to reality--which is what you need to do," Schroeder said.
"We go to the farms where there is manufacturing and processing going on--not in the fields," Schroeder explained. "We go weekly and train the workers to use debit cards, ATMs and some online banking. Most of them want cash in their pockets or in their hands, so to get them to move to debit cards and ATMs is a big deal." 
"The credit union also is attempting to encourage the workers to save more," Natalie Bradley, Ventura County CU community development manager, told News Now. So far, of the 210 workers in the program, one has saved $11,000, seven saved $5,000 each, three saved $4,000 apiece, and seven each have saved $2,000 and $1,000, respectively.
"We've impacted these members for the rest of their lives by giving them a chance to be a financial partner in the community," Schroeder said. "We are working with them to get IDs, save money, and send money back to Mexico. So we help them avoid the abuses of check cashers and payday lenders."   
One hurdle the credit union must overcome every day is trust. "They don't trust financial institutions because of the abuse from check cashers and mobile check cashers," Bradley said. 
"You have to have the right people out there who understand what migrant workers' sensibilities are and what they are going through--someone whom they can relate to and trust," Schroeder said.
The program is not profitable. The credit union has invested roughly $100,000 in it since its inception, including hiring one additional staff person, he added. 
"We've made a commitment that is not insignificant," Schroeder said. "We're still refining it and still trying to keep adapting. Our mission is the same: We need to help people in the community and we will keep helping them."
Ninety percent of the workers at the Boskovich Farm facility are members of credit unions. "We need to make the investment and commitment--and then trust will come. We are in it for the long haul," Schroeder concluded.
[Editor's Note: This is the first of a series of special reports about credit unions' outreach efforts. See related News Now story, Special Report: CUs Innovate To Reach Out To Communities.] Awareness is one of the tenets of the Credit Union National Association's and the state credit union leagues' Unite for Good campaign toward "Americans choosing credit unions as their best financial partner."