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CU System Briefs (07/24/2013)

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  • EL CAJON, Calif. (7/24/13)--A man accused of robbing an El Cajon, Calif., credit union branch of California Coast CU, based in San Diego, was arraigned Friday in county court. Richard Raul Bareno Jr., 35, allegedly threatened tellers with a pistol and fired it into the air during the robbery. Bareno was arrested in a parking lot outside a Chula Vista, Calif., fast-food restaurant at 10 p.m. July 16, police said. He has been in custody in lieu of $155,000 bail. A man with a large dark tattoo on his face entered the $1.7 billion asset credit union on July 9, fired a shot from a handgun, leapt onto a service counter, pointed the weapon at tellers and shouted at them to give him cash, police said. The tellers complied, and the man fled with an undisclosed amount of money, police said. There were no injuries (kusi.com July 19) ...
  • TEMPLE , Texas (7/24/13)--Karl Dean Moore, 47, of Temple, Texas, who was arrested for a robbery at Killeen, Texas-based Texas Partners FCU, made an initial appearance Monday in federal magistrate's court in Waco, Texas. Moore went before U.S. Magistrate Jeffrey C. Manske, who scheduled an arraignment and detention hearing on Thursday (KWTX.com July 23). Moore was arrested Friday on an unrelated theft warrant and then was charged in the credit union's robbery. He allegedly handed a teller a note demanding money about 4 p.m. Thursday. He did not show a weapon and did not claim to have one, police said ...

NEW: 'Don't Tax' Message Hits Its Mark: More Than 800,000

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WASHINGTON (7/24/13 UPDATED 11:10 a.m. ET)--More than 875,397 people, including members of Congress and their Twitter followers, saw the "Don't Tax My Credit Union" message on the Credit Union National Association's DontTaxMyCU Tuesday.
 
The message that lit up Twitter reached its mark with 2,171 tweets that specifically mentioned a member of Congress's Twitter handle and the #DontTaxMyCU hashtag, according to CUNA's analysis.
 
In addition, more than 500 messages were tweeted with the hashtag but without mentioning a specific member of Congress.
 
"The overwhelming grassroots response on social media just shows how strongly the public--and especially credit union members--oppose taxing credit unions," said Paul Gentile, executive vice president of strategic communications and engagement. "Credit union members nationwide understand that a tax on credit unions is just another tax on them, and they are telling their representatives in Washington: 'Don't tax my credit union.'"
 
The Don't Tax My Credit Union messages included tweets from two congressmen--Rep. Lloyd Doggett (D-Texas) and Rep. David Scott (D-Ga.)--who tweeted their agreement with the message. See today's News Now story Even Lawmakers Tweet: 'I Agree #Don'tTaxMyCU.'

Even Lawmakers Tweet: 'I Agree #DontTaxMyCU'

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MADISON, Wis (7/24/13)--The "Don't Tax My Credit Union" message lit up Twitter yesterday--the day the Credit Union National Association declared as DontTaxMyCU Tuesday. And at least two congressmen were willing to join in--tweeting agreement with the "Don't Tax" message, and one adding that credit unions are an "essential banking option" to consumers in his state.
 
U.S. Rep. Lloyd Doggett (D-Texas) tweeted his support of credit unions' tax exemption.
U.S. Rep. Lloyd Doggett (D-Texas) tweeted  in support of credit unions tax-exempt status from his handle@RepLloydDoggett with these words: "I support credit unions as essential banking options to all Texans. Having worked with #creditunions for 3+ decades, I agree #Don'tTaxMyCU."

Also, Rep. David Scott (D-Ga.) tweeted a reply directly to Delta Community CU's post.  The lawmaker agreed that the credit union's members, many of whom reside in his district, "should not be taxed for using a non-for-profit CU."
 
CUNA's staff was busy Tuesday monitoring the day-long deluge of tweets in CUNA's one-day social media campaign to send a unified message to Capitol Hill that a tax on credit unions would be a tax on 96 million member-owners.
 
"Things are still in progress, but we're happy with what we're seeing so far," said Trey Hawkins, CUNA's vice president of political affairs. CUNA will have a report today about the number of contacts made with the nation's lawmakers expressing the need to preserve credit unions' tax-exempt status, he told News Now Tuesday.
 
Members went to bat for their credit unions.  Some examples:
  • Stacy Hovan @stacysiglin Banks needed bailout money, give profits to shareholders & bonuses to CEOs. #Creditunions give profits to members & community. #DontTaxMyCU
  • THE Brian Trotter @btrott3232s: @SenAlexander I am a member-owner of a TN credit union. Taxing it will take $$ from my pocket. Please #DontTaxMyCU #DontTaxMyCU
  • Dizzy Felkel @DizTrain; @LindseyGrahamSC @RepTomRice @SenatorTimScott Big banks won't make our loans, they're "too risky" Americans need credit unions #donttaxmycu
  • Dave Boden @dboden6m Don't hurt American consumers! #DontTaxMyCU @alfranken @amyklobuchar
  • Mike Wilson @mwilly3311m @SenTedCruz @JohnCornyn TX Senators take the lead! PLEASE #DontTaxMyCU CU's are a great source for the underserved, don't take that away!
  • Jeremiah DeGollon @JJDeGollon1m @RepSeanDuffy Please support my credit unions tax status! My family saved $795 last year because we bank with @SummitDoMore #DontTaxMyCU
  • Mike Wilson @mwilly338m Good info for the #DontTaxMyCU drive http://www.donttaxmycreditunion.org/  CUs are a great source of employment & financial support in their communities.
State leagues also helped coordinate the efforts, providing lists of legislators' Twitter addresses and the #DontTaxMyCU and #DontTaxTuesday hashtags. Many of them also tweeted.
 
Even service providers and other organizations got in the grassroots mood. Grand Rapids, Mich., based CU*Answers and its cuasterisk.com network urged staff and client credit unions to take part in the CUNA-sponsored campaign and tweet their legislators. "This tax exemption is crucial in maintaining the credit union difference  as it allows credit unions to offer their members lower loan rates and fees and higher savings rate," said the technical solutions provider.
 
News Now also spotted tweets from the National Credit Union Foundation staff, Credit Union House, CUNA Mutual Group, and more.
 
The event, of course, drew the attention of bankers.  The Independent Community Bankers Association tweeted : "ICBA to #Senate: tax exemption 4 large CUs, opp to broaden #tax base, raise revenue & improve fin svcs marketplace."

The mass media, meanwhile, are paying attention to credit unions' battle to preserve their tax exemption in their own publications and broadcasts. See related News Now story Mass Media Paying Close Attention To Tax Battle.

Ohio CUs' Marching Raises $136K For Hospitals

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COLUMBUS, Ohio (7/24/13)--Ohio credit unions raised $136,000 for the Children's Miracle Network Hospitals through the 2013 Ohio Credit Unions: Marching Miles for Miracle Kids campaign.
 
Credit unions and chapters held fundraisers and participated in regional events and sponsorships to raise the funds, said the Ohio Credit Union League (eLumination Newsletter July 10).
 
Funds raised during the rest of the year will count towards the 2014 total. That includes Miracle Jeans Day, Sept. 18, when credit union associates nationwide can donate $5 to wear jeans in support of their local Children's Miracle Network Hospital.
 
The charity raises funds and awareness for 170 children's hospitals.
 
Credit unions support the hospitals through Credit Unions for Kids, and are the third-largest corporate sponsor of the hospitals, behind only Walmart and Costco, the league said. The effort helps children regardless of their family's ability to pay.
 
Funds raised help support new facilities, equipment, research programs, patient services, special patient needs and health education programs benefiting 17 million children annually.

Wisconsin Gov. Signs CUSO, Funds Transfers Bills

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MADISON, Wis. (7/24/13)--Wisconsin Gov. Scott Walker signed two credit union-supported bills into law at the Wisconsin State Capitol July 5.
 
"Over a number of years, Congress and state legislatures have created a legal and regulatory framework for credit unions that can make serving members and their communities very challenging," Tom Liebe, vice president of government affairs for the Wisconsin Credit Union League, told News Now. "Gradually undoing or correcting the crisis of creeping complexity--as a practical matter--is going to be done in increments.
 
Click to view larger image The Wisconsin Credit Union league's Tom Liebe, vice president of government affairs, and Sarah Wainscott, government affairs specialist  (second and fourth from left, respectively) are joined by Wisconsin State Senate Committee on Financial Institutions and Rural Issues Chair Dale Schultz (R-Richland Center, third from right) and representatives from the Department of Financial Institutions and Wisconsin Bankers Association as Gov. Scott Walker (seated) signs Assembly Bill 58, which makes key credit union service organization updates. (Photo provided by the Wisconsin Credit Union League)
"Governor Walker signing two pieces of legislation recently represents more steps in the right direction and builds on Wisconsin credit unions' continued streak of passing positive legislation and killing negative proposals," he added.
 
Act 22 (2013 Assembly Bill 58) allows the Office of Credit Unions (OCU) to expand the list of permissible services provided by credit union service organizations (CUSOs) without going through the lengthy and complicated "Clearinghouse Rules" process.
 
"In many cases, the circuitous rule adoption process state agencies need to follow can be a barrier for adopting, eliminating or modifying regulations," Liebe said. "In this case, eliminating that arcane process will allow the OCU to expand the list of permissible activities of CUSOs in a matter of weeks or months instead of years."
 
The league worked diligently to turn back opposition of a powerful trade association to get this important change adopted, he said. Thanks to the work of Wisconsin Credit Union activists and the Assembly and Senate Financial Institutions chairs, both houses passed the AB 58 with unanimous votes, Liebe said.
 
2013 Act 33 (Senate Bill 116) provides clear guidance for some funds transfers for credit unions. A Dodd-Frank Act amendment left incomplete guidance for some remittance transfers. The Credit Union National Association attempted to avoid this problem when it provided a comment letter on the Reg. E amendments to implement some Dodd-Frank changes, Liebe explained. The Federal Reserve Board failed to heed CUNA's advice to avoid the problem and states have been left to adopt Article 4A of the Uniform Commercial Code, he added.
 
"Regulatory compliance is complicated enough without the government providing either contradictory guidance, or worse, none whatsoever," said Liebe. "While adoption of Act 33 may seem modest on its face, it helps remove uncertainty for credit unions for certain transactions."
 
Liebe and league Government Affairs Specialist Sarah Wainscott were present as Walker signed the bills into law.

Mass Media Paying Close Attention To Tax Battle

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MADISON, Wis. (7/24/13)--While the "Don't Tax My Credit Union" message was the focus Tuesday for credit unions, the mass media also took note this week of the battle to preserve credit unions' tax exemption. Credit unions and leagues told why credit unions are exempt in a number of articles. Here's a roundup of the coverage.
 
With Washington debating "sweeping" tax reform, the old credit unions vs. banks argument about the tax exemption is heating up, according to Albany, N.Y.'s CBS affiliate Monday. "If credit unions were taxed, it would basically be the end of the credit union charter as we know it," Mike Lanotte of the Credit Union Association of New York told CBS. "Credit unions' mission, to serve members who work in certain organizations or specific employers or live in certain communities, has not changed," he said.
 
The station also announced that the Credit Union National Association's "Don't Tax My Credit Union Tuesday" held yesterday was "being heavily promoted on social media." (See related story, Even Lawmaker Tweets: 'I Agree #DontTaxMyCU,' in today's News Now.)
 
The tax exemption is "absolute crucial to the financial health of credit unions," Wayne Tew, president/CEO of Las Vegas-based Clark County CU told the Las Vegas Business Press (July 22). "If taxed, the credit union's ability to grow would be severely impaired, he said.
 
Las Vegas credit unions said that banks' efforts were "an attempt by banks to eliminate competition and consumer choice. The tax exemption is crucial to credit unions, which by law can't raise capital through public stock offerings like banks can." 
 
If the exemption is eliminated, who would remain to hold the banking industry accountable, Tew asked. "Let me stress that our members receive the benefits of our profits."
 
In the Clarion Ledger Saturday, Mississippi Credit Union Association President Charles Elliott Jr. told what would happen if credit unions lost that exemption: "We would go out of existence. There's no way we'd be able to stay in business" as credit unions, he warned.
 
Russell Clower Jr., a credit union member who is on long-term disability, told the Ledger his credit union typically waives service charges on depositing his checks because he can't visit local branch to do so. He has a credit card from the credit union that he might not have received otherwise, he told the Ledger.
 
Although Jackson-based Magnolia FCU has grown, it hasn't departed from its core mission of working with members banks won't deal with, CEO Steve Pollman said. Credit unions "don't have shareholders. We can't go out and sell stock the way a bank can to make capital improvements. The tax-exempt status allows us to be a better financial institution," he told the publication.
 
Banks have attacked Hope CU in Jackson for its aggressive lending, the article said. However, the numbers reflect the recession's impact on lower-income residents' ability to get accounts and service from banks, said Bill Bynum, Hope's CEO. They turned to credit unions. That highlights the continued need for tax-exempt credit unions, he said.
 
WEAR TV also covered the battle (July 19), noting that banks hope to "cripple the credit unions using Washington to crush the competition," and adding, "Consumers should hope that the big banks don't succeed."
 
Use the links to access the coverage. For more media coverage, see "News Coverage Helps Poke Holes In Banks' Attacks," in Monday's News Now.

CUs Come To The Rescue With Sequestration Aid

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MADISON, Wis. (7/24/13)--Federal budget limitations in the U.S. are leading to many employee furloughs this summer. Credit unions are responding to requests from members for help with lighter paychecks.
 
Robins FCU in Warner Robins, Ga., with assets of $1.74 billion, is offering members who work at the Robins Air Force Base several services to help them through their furlough periods. They include special furlough loans, refinancing car loans, home mortgage-loan assistance, a skip-a-payment option and extending terms of current loans (The Telegraph July 18). 
 
Because federal budget cuts resulted in 11-week furlough period that began last week, employees at the base are being furloughed one day per week through September, which cuts their pay for that period by 20%, The Telegraph said.
 
CBC FCU, a $405 million asset, Oxnard, Calif.-based credit union, is providing a line of credit for about 5,000 civilian employees at Naval Base Ventura County to help them get through furloughs (Ventura County Star July 12).  
 
The credit line is available for up to two months of applicants' net pay, Patrick Miller, CBC FCU president/CEO, told the Star. If the line of credit is repaid by the end of 2014, financing is interest free. After that it converts to 9.9% interest, he added.
 
Other sequestration-aid programs by credit unions include:
  • SAC FCU in Bellevue, Neb., will offer many tools for financial management to assist members facing pay decreases due to the furloughs. The $675 million asset SAC will provide financial counseling, loan modifications, skip-pay options, emergency short-term loans, and no penalty for early withdrawal of share certificates, the credit union said in a release. "Our goal is to serve our members, whatever the situation," said SAC FCU President/CEO Gail DeBoer.
  • Keys FCU, in Key West, Fla., with $124 million in assets, is offering those affected by sequestration the ability to skip one payment on an existing loan for no additional fee, penalty-free withdrawal on share certificates, a debt review to help members reduce their monthly expenses, and a sequester loan in which members can borrow up to $5,000 at 1% annual percentage yield for 36 months (The Key West Citizen July 21).
  • Northern CU in Watertown, N.Y., this month began assistance programs to help civilian employees at Fort Drum manage reduced paychecks, owing to an 11-week furlough period that began the week of July 8 (Watertown Daily Times July 22). The programs at the $188 million asset credit union include 60-day no-interest loans, 30-day loan deferment, loan refinancing and financial consulting.

CU Reports Fraudulent Transactions From China

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FAIRLAWN, Ohio (7/24/13)--At least half a dozen members of Towpath CU, a $115 million asset credit union in Fairlawn, Ohio, experienced fraudulent transactions originating in China on their accounts last week.
 
Towpath warned that six and possibly eight members saw transactions averaging $800 from a merchant--believed to be a bar--in Shanghai, the credit union told the Beacon Journal  (July 19).
 
Members began reporting the transactions Thursday afternoon, and the credit union has been reviewing its accounts for other potential victims, said the newspaper.  Towpath is replacing the cards and returning the money stolen from the accounts to the member when they sign an affidavit about the loss,
 
Towpath's website said it has shut down its Towpath CU Debit and Visa cards in China to avoid more potential fraud. No other areas have been impacted. The site provided telephone numbers for the credit union and for Visa to report suspected fraudulent activity.
 
Towpath CEO Rose Bartolomucci  told the newspaper that the national company that handles debit cards for  financial institutions including Towpath sent an alert in June about similar fraud originating in China.
 
The newspaper said the scam is unusual because the scammers swiped actual debit cards with the member's account number on them to complete the bogus transaction. When an actual card is swiped, the financial institution can't charge back the funds to the merchant as it could if only a stolen account number had been used for the transaction.
 
The credit union urged consumers to monitor their transactions and immediately notify their financial institution if they suspect fraudulent activity.

SECU's Mortgage Program Offers Tax Benefits

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RALEIGH, N.C. (7/24/13)--In 2012, members of Raleigh, N.C.-based State Employees' CU buying their first home with SECU's program saved an average $1,100 per household in federal income tax credits by participating in the North Carolina Housing Finance Agency's  (NCHFA) Mortgage Credit Certificate (MCC) program.
 
More than 200 SECU first-time homebuyers have participated in the program since 2009, said SECU.
 
The MCC program, authorized by Congress in the 1984 Tax Reform Act, is offered in the state by NCHFA to eligible borrowers through lenders such as SECU.  Qualifying buyers can take a federal tax credit of 30% of the mortgage interest they would pay annually, up to $2,000, each year they occupy the new home.
 
Homeowners also are eligible to claim an interest deduction on the remaining 70% of the interest they pay, said SECU.  Those who meet regional sales price and income limits can use MCC with most fixed-rate mortgages, as well as with SECU's two-year adjustable-rate mortgage.
 
The program "helps qualified borrowers keep more of their hard-earned income through decreased tax liability, while they acquire their dream of first-time ownership," said SECU Chief Lending Officers Jerry Harmon.  "As a trusted financial provider for our member-owners, it is vital that we bring awareness to and assist members with the programs and services that can help strengthen them financially," he said.

Irish CUs' Resolution Plan Extended Until December

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DUBLIN, Ireland (7/24/13)--A resolution plan to make Ireland's 400 credit unions more stable will be extended until December, the European Commission said Tuesday.
 
Despite slight modifications, the plan, first approved in December 2011, remains consistent with the commission's guidance to assist credit unions and to help support the Irish economy, said the commission (Irish Examiner July 23).
 
The commission created the plan to provide financial stability and minimize economic losses if a credit union becomes unable to meet the regulatory requirements set by the Irish Central Bank.
 
Under the plan, a failing credit union would transfer all assets and liabilities to an acquirer in a competitive process.
 
A resolution fund will provide a financial incentive for the acquirer, if necessary, said the commission. The state will make an initial repayable contribution to the resolution fund, which will over time be funded by levies on credit institutions, it added.

The resolution fund is financed with nearly $660.6 million from the government. The plan allows credit unions to appoint a new manager, modify liquidation and transfer credit unions assets and liabilities.