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CU System Archive

CU System

Three indicted in 1.24T extortion plot vs. CU others

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KINGSTON, N.Y. 97/7/10)--Three members of an anti-government group in New York state were indicted by a federal jury for allegedly trying to extort more than $1.24 trillion from Ulster County, three towns, several public employees and executives of a credit union that began foreclosure proceedings on one of the men's property. In April, Ulster County and public workers brought a racketeering case against six people accused of intimidating government employees by sending them fraudulent invoices and filing $143 billion worth of liens against their personal property. The extortion plot allegedly aimed to collect $1.24 trillion, said federal officials. The liens affected the credit ratings of those targeted, said the court documents (Times Herald-Record July 2). Three of the six were indicted: Richard Enrique Ulloa, 41, Stone Ridge; Ed George Parenteau, 53, Chenango County; and Jeffrey Charles Burfeindt, 47, Highland. Ulloa and Parenteau were arrested June 22. Burfeindt is still at large. Ulloa faces four counts of mail fraud. Parenteau and Burfeindt face mail fraud and conspiracy to commit mail fraud charges. The other three people named in the court documents have not been charged, said the article. The newspaper said the phony invoices and fraudulent liens began in 2009 after Ulloa and Parenteau received tickets in separate incidents for driving without licenses. Ulloa later said he had an international driving permit. But instead of taking their cases to court, the men and their alleged accomplices produced a flood of fake paperwork. Ulloa sent phony criminal invoices totaling $700 million to Rosendale Town Justice Robert Vosper, the court papers said. Parenteau filed a $62 billion federal lien against the Town of Lloyd and its police chief. Ulloa also allegedly filed a $2.82 billion lien against a top executive at Mid-Hudson Valley FCU, Kingston, which had begun foreclosure proceedings on his property. Court documents list 23 fake documents and liens sent by the men, who allegedly belong to a group called Restore America Plan, said the Times Herald-Record. The group doesn't believe in the legitimacy of documents such as drivers' licenses or birth certificates, doesn't believe in banks, and asks members to become guardians of free republics. In the invoices sent, local governments were called "fictions" of "private corporations." Ulloa, who is defending himself in the racketeering case signed each paper with: "I pray to our Heavenly Father and not this court that justice be done."

Mid-Atlantic Corporate reaches 115M in capital conversions

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MIDDLETOWN, Pa. (7/7/10)--Mid-Atlantic Corporate FCU announced that as of June 30, it had received capital conversion agreements from 626 credit unions, totaling about $115.5 million in capital. Of that amount, about $107.7 million is in Perpetual Contributed Capital (PCC) and another $7.8 million is in Nonperpetual Capital Accounts (NCA), the corporate said in an update on its website. Of the agreements, 583 are platinum level memberships. The conversions are part of the corporate's plan to create a new membership structure that would convert its existing membership capital into Tier-1 capital. The PCC will be considered Tier-1 capital under the National Credit Union Administration's (NCUA) proposed Regulation Part 704, according to Pennsylvania Credit Union Association's Life is a Highway and New Jersey Credit Union League's The Daily Exchange (July 6). The return of the agreements means Mid-Atlantic Corporate will have more capital holding members than under its previous membership structure, they said. "Mid-Atlantic has been a very conservative, well-run corporate, which provides critical financial services to smaller credit unions," said Bob Marquette, president/CEO of Members 1st FCU, a $1.7 billion asset credit union based in Mechanicsburg, Pa. "We also obtain some financial services from Mid-Atlantic--some of which are difficult to obtain elsewhere. "The losses we experienced at Mid-Atlantic were the result of the structure of the corporate system and the fact that all of the corporates were encouraged to use the expertise and services of U.S. Central FCU to achieve economies of scale. We believe Mid-Atlantic has been a good, solid, dependable business partner and deserves our support," Marquette added. The new membership levels and capital plans will take effect after the publication of NCUA's revised Regulation Part 704, according to Life is a Highway.

Iowa foundation launches its own website

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DES MOINES, Iowa (7/7/10)--The Iowa Credit Union Foundation (ICUF) announced the launch of its first stand-alone website, which will provide financial education resources, information on scholarships and grants, and individual development account resources. “We wanted to create an easy-to-navigate site that highlights ICUF’s core initiatives and puts greater emphasis on supporting our credit unions and their members,” said Marybeth Foster, ICUF executive director. The site design with straightforward navigation showcases ICUF’s credit union involvement, support and events. Features include:
* Information about scholarships and grants; * Information about donation opportunities; * Financial education resources; * ICUF news and announcements; * Resources for learning about credit unions; and * Stories of individual development account savers.
For more information, use the link.

Dallas editorial Free CUs from low MBL cap

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DALLAS (7/7/10)--The Dallas Morning News called for lifting the 12.25% of assets cap on credit union member business lending (MBL), saying, “Congress would be wiser to give credit unions broader authority to make the small-business loans that banks aren’t making.” Raising the cap is a solution that doesn’t involve taxpayer funds, the newspaper said in a Friday editorial, adding that Congress must let credit unions fill the lending void left by banks. The editorial addressed the typical argument coming from banks: “Predictably, bankers oppose the change, which they contend would encourage ill-advised loans and give the tax-advantaged, member-based credit unions an unfair advantage,” said the newspaper. “Not only is this argument disingenuous, coming from an industry still reeling from its own bad lending decisions, but it also threatens to stymie a valuable alternative for cash-starved small businesses.” The editorial then counters the bankers’ argument: “Despite bankers’ claims, credit unions aren’t a threat to their prosperity. Last year, credit unions held $36 billion in small-business loans, less than 5% of all such loans. Even if most credit unions reach the 25% cap, banks would still have more than 90% of the small-business market. And the only reason there is a cap today is that credit unions lost a lobbying battle with bankers 12 year ago.” The Credit Union National Association (CUNA) has asked credit unions and their small-business members to contact their legislators and ask them to support raising the cap. NOTE: Credit unions and CUNA are lobbying to increase the cap to 27.5% of total assets. Sen. Mark Udall (D-Colo.) last week introduced an amendment to a small-business stimulus bill that would raise the cap. See related Washington News item in News Now, "CUNA's Cheney to CUs: Keep the volume upon interchange, MBLs." To read the editorial, use the link.

MarylandDC conference elects officers honors Hash

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COLUMBIA, Md. (7/7/10)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) elected new officers and honored Bert Hash, MDDCCUA outgoing chairman, at its annual meeting and convention June 23-25 in Baltimore.
Click to view larger image Bert Hash, second from left, outgoing chairman of the Maryland and District of Columbia Credit Union Association (MDDCCUA), received the Wright Patman Hall of Fame award from MDCCCUA. Pictured are Rick Stoll, Jr., president/CEO of Anne Arundel Co. Employees FCU; Hash; Theresa Mann, president/CEO of The Partnership FCU; and Mike Beall, MDDCCUA president/CEO. Stoll and Mann received the Wright Patman award in 2006. (Photo provided by the Maryland and District of Columbia Credit Union Association)
The meeting, now called Connections Conference, drew 300 attendees. Officers elected to the board include:
* Chairman--Miguel Boluda, president/CEO, PAHO-WHO FCU, Washington, D.C.; * Vice chairman--Rod Staatz, president/CEO, SECU of Maryland, Linthicum, Md.; * Secretary--Theresa Mann, president/CEO, The Partnership FCU, Washington, D.C.; and * Treasurer--Chris Conway, president/CEO, Educational Systems FCU, Greenbelt, Md.
Also inducted to the board for three-year terms were:
* David Gilbert, chairman of Aberdeen Proving Ground FCU, Aberdeen, Md.; * Joe Sparacino, treasurer of Montgomery County Employees FCU, Germantown, Md.; and * Rick Wieczorek Jr., president/CEO of Mid-Atlantic FCU, Germantown.
Stepping down from the board were Joan Moran of Department of Labor FCU, Merrifield, Va., and Margaret Burdette, St. Agnes Employees FCU, Baltimore. Hash also received the Wright Patman Hall of Fame award. The award is named after John William Wright Patman, who served 12 years as chairman of the House Committee on Banking and Currency--now the House Financial Services Committee--and co-sponsored the original Federal Credit Union Act in 1934. During his 13 years in credit unions, Hash served on the Credit Union National Association Governmental Affairs Committee and CUNA Mutual Board of Directors, and served as chairman of the MDDCCUA and the African-American Credit Union Coalition. Herman Williams Jr., chairman of MECU, Baltimore, received the Volunteer of the Year Award. District Government Employees FCU, Washington, D.C., received the Christine DeWitt Memorial Award for Excellence in Marketing, Best of Show. MDDCCUA also presented 47 other awards to 23 credit unions.

Maine league announces Herring Maxwell Desjardins awards

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WESTBROOK, Maine (7/7/10)--Thirteen Maine credit unions were recognized as the 2010 state honorees for the Dora Maxwell Awards for Social Responsibility and the Louise Herring Philosophy in Action Awards and, for the first time, the Desjardins Award for Youth Financial Education.
Click to view larger image Chanel Coloumbe, (left), board chair at Atlantic Regional FCU, Brunswick, Maine, accepts the first-place Dora Maxwell Award for Social Responsibility for credit unions with assets of $200 million to $500 million from Richard Dupuis, board chair of the Maine Credit Union League. (Photo provided by the Maine Credit Union League)
Professionals from the Maine Public Relations Council judged the awards, which honor credit unions for community and/or member service efforts during the past year, which again saw the Maine credit unions accomplish achievements in community service and special initiatives for members, the league said. Credit Unions raised nearly $1.2 million for causes, including $375,923 for the Maine Credit Unions’ Campaign for Ending Hunger; $60,000 for Maine Special Olympics; $55,000 for the Children's Miracle Network; $50,000 for the Maine Children's Cancer Program; $30,000 for Haiti relief efforts and more. Maine credit unions also volunteered nearly 24,000 hours for community organizations and activities statewide. Credit unions provided special low or no-interest loans for fuel assistance, programs for financial education and other initiatives to help members in difficult times. The 2010 first-place recipients of the Dora Maxwell Award are:
* Community CU, Lewiston, $20 million to $50 million in assets; * Central Maine FCU, Lewiston, $50 million to $100 million; * Oxford FCU, Mexico, $100 to $200 million; and * Atlantic Regional FCU, Brunswick, $200 million to $500 million.
The 2010 first-place recipients of the Louise Herring Award are:
* Community CU, $50 million or less in assets; and * Central Maine FCU, $50 million to $250 million.
The 2010 first place recipient of Maine’s Desjardins Youth Financial Education Award is Community CU, $50 million or less in assets.

New Mexico CUs make more MBLs banks fewer

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ALBUQUERQUE, N.M. (7/7/10)--Credit unions in New Mexico and nationwide are making more member business loans while banks are making fewer, according to New Mexico Business Weekly. Friday’s article, “U.S., New Mexico credit unions woo small business borrowers,” tells the story of Andrew Mossman, who tried for four years to get a bank to refinance a loan on a small strip mall he built five years ago. After being turned down by banks, Mossman saw a direct mail flier for New Mexico Educators FCU and went to the credit union for help. Within a few months, the Albuquerque, N.M.-based credit union helped him refinance the loan. Ralph-David Raby, president of Raby Cos., shared a similar story with the newspaper. He tried to secure loans to renovate 54,000 square feet in two commercial buildings his firm owns. Although Raby had commitments from two banks, he got a loan from New Mexico Educators FCU after seeing the same direct mail flier Mossman saw because the credit union offered a better loan rate than the banks. New Mexico Educators FCU, which has $1 billion in assets, tripled its business loan portfolio to $15 million within the past year. It added two new business loan officers to its staff, the newspaper said. Business loans at New Mexico credit unions grew by 54% in the past year, while the loans decreased by 14% at commercial banks. This means businesses trying to borrow are finding that their financing is drying up, Bill Hampel, Credit Union National Association (CUNA) chief economist, told the newspaper. Of New Mexico’s 50 credit unions, 11 make business loans. Those credit unions have $200 million in outstanding business loans--about 4% of total assets. The average loan size is $240,000, and there is room to grow, Hampel said. Credit unions want to make member business loans, but are capped at making no more than 12.25% of their assets in such loans, Hampel added. Credit unions and CUNA are lobbying to increase the cap to 27.5% of total assets. Sen. Mark Udall (D-Colo.) last week introduced an amendment to a small-business stimulus bill that would raise the cap. Raising the cap will keep money flowing to small businesses, Hampel said. The problem for credit unions is that many slow down their lending when their loan portfolio hits 7% or 8% of assets. When credit unions hit that level, they are a year or two away from hitting the 12.25% cap, and must start rationing loans, Hampel noted.

CUs experienced with budget-impasse loans CUNA to IBloombergI

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MADISON, Wis. (7/7/10)--Credit unions are experienced with helping state workers caught in budget impasses, the Credit Union National Association (CUNA) told Bloomberg News Monday. California credit unions in particular have a lot of experience with helping state workers, said Pat Keefe, CUNA senior vice president of communications. Keefe spoke with Bloomberg after a state appellate court decision Friday upheld an order to reduce state employees’ pay to minimum wage--$7.25 an hour--until the state budget is passed. The decision affects about 200,000 state employees (News Now July 6). News Now reported Tuesday that The Golden 1 CU, Sacramento, will offer 0% interest loans to affected members. About 55,000 of its members may participate in the loan program, the credit union told Bloomberg. Schools Financial CU, Sacramento, also announced it will make 0% interest loans available to affected members whose pay is directly deposited into their accounts. Credit unions outside of California are also experienced in helping state workers affected by budget cuts. Pennsylvania State Employees CU, Harrisburg, offered state workers loans at 0% interest last year. This year, the state legislature passed its budget on time--a first in eight years, Bloomberg noted. To read the article, use the link.