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CU System briefs (08/29/2011)

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* MOBILE, Ala. (8/30/11)--A newly pregnant woman who pleaded guilty to embezzling $135,000 from members' accounts at America's First FCU, Mobile, Ala., has received a sentence tailored to her pregnancy. Danielle Krystan Winkler, 29, was sentenced to four months in federal prison to start immediately so she will be out of prison by the time she gives birth (Mobile Press Register and Associated Press Newswires Aug. 28). Winkler pleaded guilty in April to the thefts through 164 withdrawals from members' accounts. She also was ordered to pay $5,000 to the credit union and $126,259 to the credit union's insurance company … * MADISON, Wis. (8/30/11)--CUNA Mutual Group has added to its lending compliance resources by hiring Anneke Diem as compliance manager, Lending Service Products. Diem will focus on lending and deposit laws and regulations, and the resulting compliance challenges facing credit unions. Most recently Diem served as an associate attorney in the Corporate Services Group of Quarles & Brady LLP, Chicago, where she worked with financial institutions on regulatory compliance issues, capital raising and strategic acquisitions and dispositions. She was named an Illinois Super Lawyers Rising Star for each of the past three years … * HARRISBURG, Pa. (8/30/11)--Carol Humenick, senior vice president of Citadel FCU, Exton, Pa., died Saturday after a battle with cancer, reports the Pennsylvania Credit Union Association (Life is a Highway Aug. 29). Humenick, 54, was former chairman of the Credit Union Executives Society Board of Directors and served on the board for nine years. In addition to her husband, Todd, she is survived by a sister, brother, and nieces and nephews. Funeral services will be Thursday at Corpus Christi Catholic Church, Lansdale, Pa. …

Maine CUs prepare fall awareness campaign

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PORTLAND, Maine (8/30/11)--Maine credit unions are gearing up their fall statewide awareness campaign, said the Maine Credit Union League. SURF ATM network and Shared Branching radio ads recently hit the airwaves to remind consumers of the convenience that comes with these services, the league said (Weekly Update Aug. 26). Also returning will be statewide television advertisements sharing the reasons to "Look Into Maine's Credit Unions." They will include topics such as lending, technology, convenience, shared branching, savings and locality, as well as point out that members are always welcomed at credit unions. The lending message will air most often in the ad rotation to reflect today's economic environment, the league said. Maine's credit unions will also sponsor a fall staple in Aroostook County, the WAGM Potato Pickers Special, and reach out to wildlife enthusiasts throughout the state by sponsoring the Wildfire program. When seasons change, the sports scene also changes. Maine's credit unions will continue sponsoring two teams: the Maine Red Claws and the Portland Pirates, the league said. Also, Maine's Young & Free Spokester Seth Poplaski will share the value of credit unions with 18-25 year olds throughout the state at college orientations, end of summer celebrations and financial fitness fairs. Maine's credit unions will continue their presence on the website and with website, Facebook and Google advertising, the league added.

Michigan CUs lead nation in the classroom

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LANSING, Mich. (8/30/11)--Michigan credit union representatives are leading the nation in the number of financial education presentations made in classrooms, said the Michigan Credit Union League. For the period ending June 30, Michigan credit unions made 1,909 classroom presentations, bringing the state in first place ahead of Texas' 1,898 presentations, according to the National Youth Involvement Board (NYIB) annual report (Michigan Monitor Aug. 29). Nationwide, 452, 369 students learned money management skills and heard the credit union message at 14,202 presentations during the year. Those totals are up 9.4% and 4.6% respectively from the same period last year. Michigan also came in second for total number of students reached: 45,985, compared with North Carolina's 64,008. Credit unions can report their youth financial education presentations to NYIB's website.

Minimal damage from Irene reported by CUs

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MADISON, Wis. (8/30/11)--Hurricane/Tropical Storm Irene's swath through the East Coast states this weekend left the credit union movement in 15 states Monday taking stock of damages from wind and water, flooding, and power and telecommunications outages. The conclusion so far: no CUs were seriously impacted with damages. "Credit unions generally fared well through Hurricane Irene," said Phil Tschudy, media relations manager at CUNA Mutual Group. "As of 4 p.m. [Monday], CUNA Mutual has had no reports of any major losses to credit unions," he told News Now. "This doesn't mean credit unions were left untouched, as many are still without power and may be for several days," Tschudy said. "However, based on what we currently know, we do not anticipate any major losses to credit union structures or operations. "What we will likely see over the next few days are minor losses involving water damage to ATMs, power outage claims involving data processing systems, and minor building claims," he said. Irene hit landfall at 7:30 a.m. at Cape Lookout, N.C., as a Category 1 hurricane that was more than 500 miles wide. During its journey up the East Coast of the U.S. into Montreal, Canada, at least 21 people died in storm-related incidents. An estimated 4.5 million to 6 million people were without power during at least part of the weekend (U.S. Today Aug. 29). Although downgraded to a tropical storm by the time it reached New York City, several states were hard hit by flooding, especially in New Jersey, Vermont, and eastern Pennsylvania. Agility Recovery reported on Monday morning that 126 of its clients were on alert status, working with it to weigh their options for operating, with 386 total locations on alert. As of 9 a.m., 13 disasters had been declared. Loss of power and connectivity were the primary reasons for the declarations, Agility said. Three credit unions in New Jersey, Rhode Island and North Carolina were in the recovery process. Calls were coming into Agility's client services at the rate of every 10 to 15 minutes for updates, declarations and stand down situations, said Scott Teel, marketing director. (See related article, "Southeastern CUs reporting power outages from Irene," which discusses the hurricane's impact on North Carolina and Virginia credit unions. And see "NCUA addresses CU disruptions caused by Irene" in the Washington section.) The following is a wrap-up of credit union reports in other states. Vermont: Although state government declared the storm brought the worst statewide damage in 84 years, "Vermont credit unions seem to have fared the passing of Tropical Storm Irene relatively unscathed," said the Association of Vermont Credit unions. "As of noon Monday, AVCU had made contact with most of our members and learned that damage caused by Irene across much of the state has not directly affected our credit unions," said John Cote, director, information services at AVCU. "Some locations, however, are experiencing power and telecommunications outages that have temporarily affected normal operations. As a result, we've so far been unable to check the operational status of one credit union in central Vermont whose main office and branches are in one of the hardest hit regions," said AVCU. Also, several locations were hampered by the reported closing of more than 260 roads statewide, with the Vermont Department of Transportation saying that number could go as high as 300 once local roads and streets have been surveyed. Delaware: The Delaware Credit Union League contacted all Delaware credit unions, and all weathered the storm well, Alice Smith, league communications/governmental affairs director, told News Now. At Seaford (Del.) FCU, Kathy Decker, program and systems manager, reported that there was no damage or water issues--just technical ones. Seaford’s main telephone number was not working and it had no Internet at the main branch. The Millsboro branch had Internet but no data processing. Telephone and information technology professionals were reportedly on their way to fix the problems. Kim Gilson, manager of Peninsula Methodist FCU, reported having to walk through knee deep water to check on his church where the credit union’s records are kept. The credit union is located in Crisfield, Md., on the Eastern Shore, where there was quite a bit of evacuation due to the storm. Although the credit union is located in Maryland, it belongs to the Delaware League, Smith said. Luckily, everything at Peninsula Methodist was fine, Smith added. All Delaware credit unions were back to business Monday, Smith said. New York: The Credit Union Association of New York, located along the storm's path, was open on Monday. "We're all safe and working today at the association with no problems," said Bonnie Sklar, public relations coordinator. Early that morning the association "reached out to credit unions to see if they were impacted by Irene." So far, no credit unions had reported problems. New Jersey: "Our league office is up and running," said New Jersey Credit Union League President/CEO Paul Gentile. The league office is located in Hightstown, which had flooding featured in an Associated Press article picked up in several states. "While Hightstown has flooding issues, fortunately we don't," he told News Now. "We are still assessing New Jersey credit union issues," he said, adding, "Basically there is a lot of flooding in New Jersey and a lot of streets are closed, making access to some buildings difficult. I do know of some credit unions that are operating in business contingency mode." The website of Atlantic FCU, in Kenilworth, N.J., noted that "due to the effects of Hurricane Irene," all Atlantic Federal offices were closed Monday. It said the credit union would re-open today at 8 a.m. ET. Maine: In Maine, the league was temporarily affected by a power outage caused by the storm. "The Maine Credit Union League and our service subsidiary, Synergent, briefly went on generator power Sunday, but power was soon restored later that day," said Diana Dionne, communications and marketing specialist. "Credit unions experienced sporadic outages, but are now all operational without any significant damages. In Maine, 204,000 were left without power from the storm." Maryland and District of Columbia: “While credit unions were well prepared with contingency plans, we are relieved to report that outside of scattered power outages, there appears to be no major damage in the wake of Irene,” said Jennifer Simmons, interim CEO and chief membership officer for the Maryland & District of Columbia Credit Union Association. Massachusetts, New Hampshire and Rhode Island: Credit unions in Massachusetts, New Hampshire and Rhode Island “for the most part fared pretty well,” based on information received as of Monday afternoon, Donna Bevilacqua, director of communications and community relations for the Massachusetts Credit Union League, told News Now. There were some minimal power outages, as well as some credit union branches that still were out of power Monday, but members were sent to other branches, she said. “One branch in Western New Hampshire had a foot of water in the basement, but it's open,” Bevilacqua said. “Also, there were some power outages at Rhode Island and Massachusetts credit unions, but power was returned in most areas affected,” she added. Pennsylvania: The Pennsylvania Credit Union Association (PCUA) noted that high winds brought down power lines, causing power outages in central and eastern parts of the state and that Philadelphia was dealing with flooding rivers and creeks. The association put out a call Monday morning for credit unions to report damages. The PCUA office was without power from Saturday evening to early Monday morning, but power was restored by opening time, said the association.

Southwest Bridge and Ga. Corporates merger OKd

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Duluth, Ga. (8/30/11)--The merger between Southwest Bridge Corporate and Georgia Corporate received approval from the National Credit Union Administration (NCUA) Board of Directors. The board addressed the corporates’ merger request during a closed meeting Monday afternoon. NCUA confirmed to News Now that the merger had been approved. “This approval is the culmination of many months of hard work, and we could not be more pleased,” said Lin Hodges, chairman of Georgia Corporate and president/CEO of Associated CU, Norcross, Ga. “The NCUA set a very high standard for ensuring that the merger would result in a successful corporate--one that is able to achieve regulatory capital and retained earnings targets as well as other new requirements designed to reduce risk to the credit union system,” said Hodges, who is also slated to take the helm as chairman of the resulting Catalyst Corporate on Sept. 6th. “I continue to believe that this partnership with Georgia Corporate, along with the key changes to the business model outlined in the plan, is the best possible way to serve the interests of member credit unions,” said Kerry Parker, chairman of the Executive Committee for Southwest Bridge Corporate’s Member Advisory Council and president/CEO of A+ FCU, Austin, Texas. The Member Advisory Council approved the merger strategy late last year. “The Catalyst model represents a combination of traditional and progressive thinking,” said Greg Moore, president/CEO of Georgia Corporate. “The support of our members, and now the approval of the NCUA Board, demonstrate a growing awareness that the cooperative corporate model continues to be extremely valuable, but that in the future it must be highly efficient and able to achieve success with less balance-sheet risk.” The strong financial performance of Southwest Bridge Corporate since its chartering in late 2010 shows the importance, and viability, of a highly efficient model, he added. Obtaining the NCUA’s approval is one of three key steps that the merging corporates seek to accomplish this week. The others include a vote on the merger in a special meeting today by the Southwest Bridge Corporate membership, and final approval from the Georgia Corporate Board, set for Wednesday. “We are looking forward to a very successful consolidation over the holiday weekend,” said Moore. “We will open our doors as Catalyst Corporate on Sept. 6th and be ready to provide seamless, world-class service to our members on day one.” Together Southwest Bridge Corporate and Georgia Corporate have raised $92.7 million in perpetual contributed capital from 875 members. “While this is more than sufficient to launch and sustain the Catalyst Corporate business plan, further membership growth is expected,” said Hodges.

IWash. PostI Local CUs report uptick in mortgages

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WASHINGTON (8/30/11)--Credit unions in the Washington, D.C., area are reporting an increase in mortgage applications because record-low interest rates are spurring members to refinance their mortgages or buy a house. The surge in mortgage refinancings is proceeding despite heightened worries of a double-dip recession (The Washington Post Aug. 27). NASA FCU in Upper Marlboro, Md., has seen a 50% increase in mortgage applications and loans, Bill White, the credit union’s vice president of real estate lending, told the Post. Roughly 70% of the mortgage applications submitted to NASA FCU in the first three weeks of August were for refinancings, although new-purchase submissions also have gradually risen, White added. At OAS FCU in Washington, D.C., mortgage applications for new homes are increasing, Carlos Calderon, OAS president/CEO, told the newspaper. Nearly 75% of mortgage applications submitted to the credit union are for new homes, he added. Based on the uptick of applications since the start of August, the credit union expects its mortgage portfolio to further expand, Calderon told the paper. OAS had expanded its total mortgage portfolio nearly 25% before the latest dip in rates. The Credit Union National Association and the Maryland and District of Columbia Credit Union Association provided some of the credit union contacts for the article. To read the article, use the link.

Southeastern CUs reporting power outages from Irene

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MADISON, Wis. (8/30/11)--After assessing damage in the wake of Hurricane Irene on Monday, credit unions in the southeast U.S. emerged relatively unscathed, with limited branch closings caused primarily by power outages. Irene hit landfall at Cape Lookout, N.C., as a Category 1 hurricane with 80-115 mph winds. It became a tropical storm near New York City and New Jersey. In North Carolina, branch closures and some damage were reported near the direct path of the storm, but the main impact to operations was the loss of electrical power, according to the North Carolina Credit Union League. State Employees’ CU, based in Raleigh, reported by mid-morning Monday that six branches were closed. Another branch was scheduled to open at noon. Leigh Brady, SECU vice president of member education, said some branches could remain closed today and Wednesday because of power outages. She stressed members can access the credit union’s contact center and ATM network around the clock. Brady said two SECU branches suffered minor water damage, but overall the credit unions was “very, very fortunate.” Marine FCU, Jacksonville, N.C., reported that three branches were closed due to a lack of power. All locations were near the direct path of Irene and would be closed until power was restored. “They are all along the main roads, so we're hoping it won’t be too long,” said Marine FCU Chief Operating Officer Jeff Clark. Clark added that there was slight property damage, but branches would reopen when power was restored. The drive-through at Telco CU in Tarboro was closed as a result of damage from fallen tree limbs. Cleanup was underway and the branch lobby was open, the credit union reported. Tree limbs also snapped power lines at First Carolina People’s CU in Goldsboro and the branch was closed. Cleanup was underway, and branch staff reported that the credit union drive-through would be open Tuesday even if power had not yet been restored. “We’ll continue to follow up with the credit unions impacted to ensure they have all the resources they need,” said NCCUL President/CEO John Radebaugh. “With nice weather in the forecast the next several days, hopefully the credit unions will be able to get back to normal operations in the very near future.” Although no credit unions had reported property damage, Virginia credit unions were dealing with widespread power outages, according to the Virginia Credit Union League. “Dominion Power reports that 600,000 customers are still without power in Greater Hampton Roads, Richmond and Northern Virginia,” said Lewis Wood, vice president of public relations and communications for the Virginia league. “This has forced the closure of some branches in Greater Hampton Roads and Richmond. I don’t know of any Northern Virginia credit unions affected as of noon [Monday] by outages. At the height of the outages, Hurricane Irene had knocked out power to nearly 1 million customers in Virginia.” Chartway FCU, based in Virginia Beach, Va., has branches along the coast as far south as Florida and as far north as Rhode Island. It opened all branches as scheduled on Monday. “It was not as bad as we expected,” Chartway FCU President/CEO Ron Burniske said of Hurricane Irene. “We received a lot of rain but not the big winds that were forecasted.” Also, the National Credit Union Foundation (NCUF) on Monday was working with state leagues to determine the need for relief efforts, according to Christopher Morris, NCUF director of communications.

Presidential candidate to speak at Iowa CU convention

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DES MOINES, Iowa (8/30/11)--Texas Gov. and Republican presidential candidate Rick Perry will speak at the Iowa Credit Union Convention at 12:15 p.m. (CT) on Sept. 16, the Iowa Credit Union League announced Monday. “We hope to be able to share some of the issues that are affecting our industry,” said Patrick S. Jury, president/CEO of the Iowa Credit Union League. Perry will share his thoughts on credit unions and the economy, and will also take questions from convention attendees. The announcement comes after Jeff Disterhoft, CEO of University of Iowa Community CU, had the opportunity to visit with President Barack Obama at a White House forum on job creation in Peosta, Iowa. Disterhoft spoke with Obama to garner support for legislation that would raise the credit union business lending (MBL) cap to 27.5% of assets from the current 12.25%. The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.