ANCHORAGE, Alaska (7/24/12)--Eleven people have been indicted in connection with a scheme to use stolen Puerto Rican identities to file tax returns and obtain $19 million in fraudulent income tax refunds in Anchorage, Alaska, said the Justice Department's Tax Division there.
They also have been charged with tax fraud, identity theft and other financial counts, as well as cocaine distribution and international money laundering (Loansafe.org and the Federal Bureau of Investigation July 20). The charges include making false statements to banks and credit unions, submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, passing forged U.S. Treasury checks and aggravated identity theft.
The indictments alleged that between January 2012 and March 2012, the defendants engaged in a conspiracy to defraud the U.S. by filing false tax returns and claiming millions of dollars in refunds to which they were not entitled.
The suspects, whose names were not released, allegedly obtained the names and Social Security numbers of individuals from Puerto Rico and fabricated individual income tax returns in those names. Three defendants allegedly obtained laptops loaded with the information of 2,600 stolen identities and identified $19 million in fraudulent refund claims. The group allegedly contacted other conspirators in New Jersey and Puerto Rico, requesting that fraudulent refund checks be sent to Anchorage under false names.
The indictment alleges that the defendants negotiated the refund checks at financial institutions in Anchorage. One bank employee has been charged with assisting in the conspiracy by opening bank accounts in false names and negotiating forged U.S. Treasury checks.
NEW YORK (7/24/12)--The Consumer Financial Protection Bureau's (CFPB) report on improving private student lending is an "accurate, historical view of the industry prior to 2007" and its recommendations are "widely in practice now," says Vince Passione, CEO of Fynanz, which powers the CUStudentLoans.org website.
Fynanz is a CUNA Strategic Services provider.
The CFPB report said Congress could revise the Truth in Lending Act to clarify the definition of "private student loans" to improve the market for students, families, schools and financial institutions. The report found loosened lending standards between 2005 and 2007 made private student loans risky for many consumers and led to many students borrowing more than they needed to finance their educational expenses. CFPB is recommending full transparency in private student lending, with the loans 100% certified by the schools.
Prior to 2007, there were lax underwriting standards by some lenders, schools were not actively involved in the lending process and career preparatory schools were not ensuring students could find employment after school, Passione told News Now. As a result many students and their parents ended up with extensive student loan debt. "But the industry has learned from it."
"In post-2007, industry regulations and pressures on the industry shifted," he said noting that loan volume has gone down--from a $23 billion student loan industry to $11 billion and then $6 billion as all lenders tightened their underwriting standards.
Fynanz launched its private lending program, Credit Union Student Loans, in 2009 and the 215 credit unions it works with have incorporated these lessons, working with schools and with families and educating students about the student lending process so they don't go into excessive debt. The CUStudentLoans.org website is one example of the financial education aspect of private student lending.
"The [school certification] concept is very important, and as far as our program, it's already being done. The defaults are very low, Passione said.
"The school certification is highly recommended and is widely in practice now," he told News Now. "That is a good thing," he said, because "there is a need for these loans, which make up for the significant gap" between the coverage by federal loans and the actual cost of the education.
"The average cost is $34,000 per year. Even if you maximize Stafford loans, and have government involvement, families still need the ability to finance the gap," Passione said.
Of the 150 credit union lenders Fynanz works with and the 50 who do their own private student loans, all these are 100% certified by the schools and it helps ensure that the student has exhausted all the federal avenues before tapping into a private loan.
It will be important to process lending electronically to track the financial aid. "If you have a scholarship that's $10,000, a Pell grant of $5,500 and an unsubsidized Stafford loan, and the student is applying for too big of a private student loan, the school must go back and tell the lender that the loan is too high." It gives the student full transparency, he added.
"There is a need for these loans," said Passione. "If they are done correctly, they are good for the student, good for the school, and good for the lending institutions."
MADISON, Wis. (7/24/12)--In an article Saturday, The Wall Street Journal highlighted credit unions for the favorable rates they pay on certificates of deposits in comparison to banks.
An analysis of 8,300 credit unions and banks conducted for The Wall Street Journal shows that CUs often beat out banks for better rates.
Credit unions and small banks on average pay 0.4% to 0.5% percentage points more on three- and five-ear certificates of deposits than big banks, the article said. Typically, credit unions offer even better rates than smaller credit unions.
Roughly, 18% of credit unions beat the best online rates for CDs--with Fort Knox FCU, Radcliff, Ky., offering the best rates at 2.25% on a 59-month certificate.
The University of Iowa CU, Iowa City, Iowa, offers a 1.75% rate on a 22-month certificate, and a 2.5% rate on 44-month certficate, with a 0.2 percentage bonus for deposits of more than $250,000.
American Airlines FCU offers a five-year certficate at 2.27%.
Connexus CU, Wausau, Wis., pays 2% for a five-year certificate to members with active checking accounts.
NORTH CANTON, Ohio (7/24/12)--Two Ohio credit unions that serve Methodists and employees of the Akron Beacon Journal newspaper merged earlier this month.
East Ohio Methodist Conference CU, based in North Canton, Ohio, with $51.5 million in assets, merged operations with West Ohio United Methodist CU in Cincinnati, with $20 million in assets, to become United Methodist Financial CU (Akron Beacon Journal July 21).
The three branches--the headquarters in North Canton, one in the Beacon Journal building in Akron and one in Cincinnati--will remain with a combined 17 employees to serve members, the newspaper said.
The merger culminates three years of discussions and will create economies of scale, with the larger credit union being better able to handle regulatory demands and bottom-line pressures, R. Wayne White, CEO of the former East Ohio United Methodist Conference CU, told the paper.
White will be the CEO of the new combined credit union. When he retires in a few years, the Rev. Russ Abbott, former CEO of West Ohio United Methodist CU and now chief operating officer of United Methodist Financial CU, will succeed White, the paper said.
FORT LAUDERDALE, Fla. (7/24/12)--South Florida credit unions are rated more financially sound than credit unions nationwide, according to a new report from Weiss Ratings.
Florida banks trail the U.S average, according to the South Florida Sun-Sentinel (July 23). Credit unions were less exposed to banks in bad real-estate loans, analyst said.
Nationwide, Weiss rated 70.9% of credit unions fair or better in the first quarter, an increase from 67.8 last year. Weiss rated 42 credit unions based in South Florida and 7,120 nationwide in the first quarter.
BISMARCK, N.D. (7/24/12)--Three Dakota credit union leaders were recognized at the Credit Union Association of the Dakotas (CUAD) Annual Summit in Rapid City, S.D.
Michael J. Janke, volunteer of Dakota Plains CU, in Edgeley, N.D., was honored as the North Dakota Volunteer of the Year. Janke has served on the credit union's credit committee since 2003. He was a loan officer at the credit union for seven years.
Robert Feller, a director at Black Hills FCU in Rapid City, S.D., was honored as the South Dakota Volunteer of the Year. Feller has been a board member for Black Hills FCU since 1986. He has served as chair, vice chair, treasurer and secretary during his 26 years of service.
Deborah Larson, branch manager of Dakota Plains CU in Enderlin, N.D., was honored as the Professional of the Year. Larson is a member of the marketing committee for Dakota Plains CU and is instrumental in providing financial education for local teens in conjunction with Enderlin High School.
SAN ANSELMO, Calif. (7/24/12)--With the consumer backlash over the debit fees that big banks tried to charge last fall, it may come as a surprise that some consumers say they would pay a fee for certain "lifestyle" services of value, according to a new study.
More than 82% of consumers surveyed indicated they would buy identity theft alert services from their credit union or bank at an average monthly fee of $4.07. More than 73% said they likely would buy credit score reporting services at an average of $3.39 a month.
Revenue from fees for traditional banking services are shrinking. For example, income from deposit service fees declined 13% between 2007 and 2012, said Dan Geller, executive vice president of Market Rates Insight.
Traditionally, financial institutions based decisions about setting service fees on the competitive landscape for similar services, said the firm in a press release. "However, consumers have demonstrated they are no longer interested in paying fees for services that have no perceived value." The study points to a new approach: assessing consumers' preferences on price sensitivity with the competitive landscape to reveal what consumers want, what they are willing to pay for, and where market opportunities lie.
The study encompassed seven lifestyle services: credit score services, identity theft protection, personalized couponing, prepaid reloadable cards, overdraft protection, personal money transfer and mobile remote deposit capture.
- IDAHO FALLS, Idaho (7/24/12)--Brad Bauges has been selected as president/CEO of East Idaho C, based in Idaho Falls, announced the $253 million asset credit union's board. Bauges brings more than 12 years of experience in the financial services industry, eight of which was in senior management positions. Most recently he served as senior vice president and chief operations officer at the $850 million asset Columbia CU, Vancouver, Wash. While there he oversaw many facets, including branches, call center and employee training. He also has served at vice president of branch services at Texas Dow Employees FCU, Lake Jackson, Texas. Bauges began his position on Thursday …
- HARRISBURG, Pa. (7/24/12)--The Pennsylvania Credit Union Association (PCUA) has added three new employees to its management staff, PCUA announced in Life is a Highway (July 23). Glenn Cermak has been named director of education and professional development. He has a background in public education and training, said PCUA. Ryan Shumaker is director of information technology (IT) and will oversee IT functions at the association. He previously managed IT functions in several education facilities. Also, Megan Strausbaugh has been named communications specialist and will serve as Key Notes editor and perform other communication duties. Her background is in marketing and graphic design from the hotel industry …
- HARRISBURG, Pa. (7/24/12)--Frank Alcamo, co-founder of C-B-W Schools FCU in Sidman, Pa., died July 14. He was 92. Alcamo was one of the original seven members who each purchased a $5 share to pay the $35 fee necessary to apply for a charter. The certificate of organization was issued in November, 1956. Alcamo was the credit union's first president, said the Pennsylvania Credit Union Association (Life is a Highway July 23). While working to get the credit union solvent, Alcamo taught high school in Wilmore, Beaverdale, South Fork and Triangle. He retired as principal of Windber Area High School. He served on the credit union's board for 56 years …