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Corporate America LaCorp withdraw merger plans

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IRONDALE, Ala., and METAIRIE, La. (9/18/12)--Corporate America CU and Louisiana Corporate CU announced today they no longer will pursue a merger. However, the two corporates will continue to collaborate on several projects.

Corporate America CU, based in Irondale, Ala., serves more than 500 member credit unions.  Louisiana Corporate CU, located in Metairie, La., serves more than 100 credit unions. In January of 2011, they had announced their intent to pursue a merger, which would have created a $3.9 billion asset Corporate America CU, with headquarters in Irondale, serving 514 member credit unions in 26 states.

"We began the merger process more than a year ago, and while it was approved by both boards of directors and state regulators, it has remained pending at [the National Credit Union Administration]," said David Savoie, president/CEO of LaCorp, in a joint press release.

"We feel it's time to move on with key initiatives at each of our organizations. For example, LaCorp independently has raised capital and eliminated all U.S. Central dependencies, while also making sure we continue to do a good job of serving our members," Savoie added.

Corporate America Interim President/CEO Dan Buckley noted that the shifts in the corporate landscape over the past year, including the impending closure of U.S. Central FCU, make it important to go forward with independent plans rather than continuing to be in "merger limbo."

"We're focused on addressing the issues facing all corporates, such as full compliance with the revised corporate rules," Buckley said. "Paramount for Corporate America is to ensure the strength, capabilities and staff skill sets needed to serve credit unions in a new regulatory area."

Even without the merger, Buckley and Savoie said, the two corporates will continue to collaborate on various projects, as they have for many years.

One project progressing will be the enactment of an agreement for LaCorp to partner with Corporate America for disaster recovery services. "It makes sense to work with Corporate America for business recovery and continuity services," said Savoie. "Our corporates have good proximity but are far enough away from each other to make it practical as a backup site."

Buckley noted that LaCorp's member credit unions "understand the value their corporate adds to their business. At Corporate America, we also recognize the value of partnering with LaCorp by leveraging our collective strengths in the delivery of products and services to our member owners," he said.

CU System briefs (09/17/2012)

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  • MUNCIE, Ind. (9/18/12)--A man has been sentenced to 20 years in prison for his role in a May 2011 robbery of Industria Centre FCU, Muncie, Ind. John D. Repass, 37, had pleaded guilty to armed robbery, a Class B felony that carried a standard 10-year sentence in a deal calling for him to testify against co-defendant Stanley DeWayne Wills, 33, of Muncie. The two are charged with being the masked men who held employees of the credit union at gunpoint and escaped with $250,000 (Muncie Star Press Sept. 15).  Wills was convicted in July of four charges in the robbery. Wills also was found guilty of being a habitual offender, which could add up to 12 years to his sentence. He is to be sentenced today.  The woman accused of being the driver of the getaway car, Maranda Zoe Conley, 31, is scheduled to enter a guilty plea to an unspecified charge on Oct. 22 …
  • WHEATON, Ill.  (9/18/12)--Hermila Garcia, 33, of Elgin, Ill., a former teller of Wheaton, Ill.-based DuPage County Employees CU has been charged with stealing $3,000 from the credit union. Garcia had been a teller for about seven years there. She is charged with two counts of theft over $500, two counts of financial institution fraud and two counts of misappropriation of financial institution property, said the DuPage County State's Attorney. The credit union discovered the theft during an audit of the vault. Garcia allegedly completed paperwork indicating she deposited money from her drawer to the vault but allegedly kept it for herself on at least two occasions, said the state attorney's office. (downersgrove.patch.com Sept. 14) …
  • MEDFORD, Ore. (9/18/12)--Rogue FCU, a $557 million asset credit union based in Medford, Ore., has made a positive impact on the campus of Southern Oregon University (SOU).  The university kicked off its 2012-2013 season last week with a new hardwood floor in the McNeal Pavilion, an arena used by the SOU Raiders for men's and women's basketball, women's volleyball, wrestling and other community events, thanks to the credit union. Rogue President/CEO is an alumnus of SOU. At the opening game against Oregon Tech, Rogue board chairman spoke on behalf of the credit unions' 54,000 members, noting that Rogue FCU started out as a teacher's credit union in 1956 and continues to support education in Southern Oregon. Through an agreement with the SOU Athletic Department, Rogue members will receive a $1 discount on all SOU sporting events through 2017 …

Inspire CU start-up merges into larger CU

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BATTLE CREEK and PARCHMENT, Mich. (9/18/12)--Inspire Community Development FCU in Battle Creek, Mich., a small start-up community development credit union (CDCU), merged into the larger First Community FCU in Parchment, Mich., on Aug. 31.

The $400,000 asset Inspire, which opened in 2010, was afflicted by start-up delays, eroding funds and understaffing. Those factors, along with a desire to expand its services, led to Inspire's decision to merge with a larger credit union (BattleCreekEnquirer.com Sept. 14).

First Community's commitment to serve low-income members made the $700 million asset credit union appealing to Inspire's board, when it was looking for a merger partner, Nancy Macfarlane, president of Inspire's board, told the newspaper.

Inspire offered several services geared to low-income consumers such as low-interest micro loans, automatic deposits and savings accounts. Those programs made Inspire eligible for federal funds to run under its CDCU designation, the paper said.

Because of understaffing, Inspire was only open three days a week, with limited hours, Macfarlane said.

Significant losses on the credit union's loans led the National Credit Union Administration (NCUA) to examine Inspire's books. Together, the credit union and NCUA decided a merger was the best path to take, Macfarlane told the paper.

IWall St. JournalI op-ed CUs need relief too

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NEW YORK (9/18/12)--Credit unions also need relief from government regulation, a St. Louis credit union executive wrote in a Monday op-ed in The Wall Street Journal, commenting on a Sept. 6 Journal op-ed by U.S former Secretaries of State George Schultz and Madeline Albright. That op-ed expressed concern about the Bangladesh government's intervention into the country's Grameen Bank and its organizational structure.

"But the virtues aren't exclusive to Grameen Bank," wrote Patrick K. Adams, president/CEO of St. Louis Community CU. "There is an entire not-for-profit, member-owned credit-union industry doing the same thing in the U.S. every day and we, too, are overrun with government regulation.

"Thanks to [the] Dodd-Frank [Act], regulation and compliance within the U.S. banking industry is much more onerous than what Bangladesh is proposing for Grameen," he added. "Unfortunately, regulation is eroding our impact in the middle- and lower-income communities we work so hard to help.

"Piling more regulation onto smaller institutions will ultimately manifest itself in the increased likelihood that people will have fewer choices in financial services. Such an occurrence ultimately serves to hurt the consumer," Adams wrote.

To read the whole op-ed, use the link.

Vermont CUs growth includes MBLs

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MONTPELIER, Vt. (9/18/12)--Vermont credit unions are growing and are highly ranked in six of eight key financial metrics, as well as seeing growth in member business lending (MBL).

Vermont's federally and state-chartered credit unions ranked in the top 10 in the categories of:
  • Asset growth;
  • Return on average assets;
  • Deposit growth;
  • Loan growth; and
  • Net charge-offs (delinquent loans) as a share of total loans (Times Argus Sept. 17).
Also, with banks--in particular large regional banks--implementing more stringent lending standards, credit unions have seen expansion in MBLs, Joe Bergeron, president of the Association of Vermont Credit Unions, told the newspaper.

Credit unions in the state have remained solid, partly because Vermont was able to avoid "the extremes of the economy" such as larges layoffs and plunging home values that hit other parts of the nation after the financial crisis of 2008, Bergeron told the paper. 

Although many Vermont credit unions rapidly are approaching the federal MBL cap of 12.25% of total assets, they are getting more requests for MBLs, Bergeron added.

Ten of the 26 credit unions in the state make MBL loans, with an average loan amount of $156,402, the paper said.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

WOCCU makes recommendations on FATF AML standards

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MADRID  (9/18/12)--The World Council of Credit Unions (WOCCU) last week made recommendations to the Financial Action Task Force (FATF) regarding how to limit regulatory burdens on credit unions in the FATF's forthcoming guidance papers about anti-money laundering (AML) standards.

Click to view larger image The Banco de Espana in Madrid, Spain, hosted a Financial Action Task Force conference on new anti-money laundering standards last week. The World Council of Credit Union presented on behalf of the international credit union movement.
The new standards will expand the international AML definition of politically exposed persons (PEPs) to include domestic and international organization PEPs, said WOCCU. They also will update existing FATF guidance on new payment methods (NPMs).

National AML authorities are expected to issue regulations to implement the new guidance next year. At that time, credit unions will be required to assess whether new and existing credit union members include high-ranking national, provincial or local politicians and civil servants, or high-ranking officials at international organizations such as the United Nations, World Bank and International Monetary Fund.

Credit union AML compliance procedures regarding NPMs, such as prepaid debit cards, mobile payments and remittances will also need to adjust to the new standards.

In February, FATF issued a revised set of its International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, better known as the "40 Recommendations," which expanded the definition of PEPs to include domestic and international organizations.

Before the update, the definition had applied only to foreign PEPs--high-ranking officials in foreign governments--and credit union common bond requirements generally limited credit unions' PEP-related compliance burdens.

World Council of Credit Unions' Michael Edwards made recommendations on how the new anti-money laundering guidance could ease regulatory burdens on credit unions. (Photos provided by the World Council of Credit Unions)
Under the new standards, even high-ranking local government officials such as mayors or members of local government councils are likely to be considered PEPs. The anticipated FATF guidance papers will clarify in detail the high-level principles on PEPs and NPMs.

Although many larger banks and credit unions currently use expensive software and vendor lists to determine who is a PEP, we related to FATF that many credit unions would be well aware of the high-ranking political officials in their local communities without needing to invest in possibly unaffordable vendor products," said Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs.

Edwards  represented credit unions at the FATF conference on the new AML standards  Sept. 13-14 at the Baco de Espana in Madrid, Spain.

While at the conference, he shared the credit union perspective on using new payment methods to promote financial inclusion as part of an effective risk-based approach to AML compliance, which focuses on payments with the highest risk of being related to criminal activity, terrorism or nuclear proliferation.

"World Council participates in forums such as these to advocate for streamlined anti-money laundering procedures for credit unions," said Brian Branch, World Council president/CEO. "Our goal is to help credit unions provide wider access to financial services and to reduce their regulatory burden for serving the underserved."

FATF is the international standard-setting body for rules to combat money laundering and the financing of terrorism and nuclear proliferation.

WOCCU contributed its remarks during a FATF conference, which was part of FATF's private sector outreach in preparation for issuing new guidance on PEPs and NPMs in early 2013.

First student-run CU in NE Ohio to be launched

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MENTOR, Ohio (9/18/12)--Cardinal Community CU, Newark, Ohio, will launch the first student-run credit union in Northeast Ohio at Lake Catholic High School in Mentor.

The branch will serve as the centerpiece of a financial literacy education program that promotes positive money management skills such as thrift, smart spending, informed use of credit, and the benefits of regular saving and investing, said the credit union.

Officially co-branded as the SmartStart Cougar Branch, the operation will be staffed by Lake Catholic student volunteers under the supervision of $25 million asset Cardinal Community CU.

Cardinal Community CEO Christine Blake is a Lake Catholic alumnus. "The student branch program is a boon to all involved," Blake said. "The students learn real-world skills in a positive, safe environment.

In concert with the branch initiative, the credit union will provide resources and work with the school to develop financial education programs and presentations in keeping with the Ohio Grade Level Content Standards and Lake Catholic High School's goals and objectives.

Programs will be designed to introduce relevant, hands-on financial literacy concepts to students. The curriculum may comprise classroom teaching, facilitated workshop content, financial literacy roundtables, Web-based interactive coursework, and an on-site simulation of real-world personal finance challenges.

Business lending up 11 in Northwest CUs

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BEAVERTON, Ore. and FEDERAL WAY, Wash. (9/18/12)--During the past 12 months, Oregon and Washington's credit unions have increased member business lending by 11%, infusing $235 million into the region's economy, according to the Northwest Credit Union Association (NWCUA).

MBL totals have increased 7.96% in Oregon and 13.1% in Washington.

The Northwest's financial cooperatives have more than $2.3 billion--$810 million in Oregon, $1.5 billion in Washington--in outstanding MBLs as of June 31 (Anthem Recap Sept. 17)

For quarter-over-quarter, MBLs rose 2% in Oregon and 2.8% in Washington. Credit unions nationwide experienced a 1.2% increase during 2012's second quarter, according to the NCUA.

"Credit unions in the Northwest and nationwide are filling an important societal need left when banks began exiting the business lending market after 2008, when business lending at banks reached a peak," said NWCUA CEO John Annaloro. "The divergent tracks of the for-profit versus not-for-profit banking sectors in this market in some ways have become less of a balance sheet issue and more of a patriotism issue."

Despite the need for more business lending, banks instead are buying U.S. Treasuries and have increased their holding to an all-time high of $1.84 trillion, according to a report by the Small Business Administration entitled "The Increasing Importance of Credit Unions in Small Business Lending." Banks have purchased $136.4 billion in T-Bills and government debt so far in 2012--more than double the $62.6 billion purchased in all of 2011, said the report cited by the NWCUA.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

NWCUA elects foundation board

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BEAVERTON, Ore. and FEDERAL WAY, Wash. (9/18/12)--The Northwest Credit Union Foundation (NWCUF) announced the result of its board of trustees elections.

Nine Foundation trustees are in place, with Northwest Credit Union Association (NWCUA) President Troy Stang joining eight credit union professionals who each represent one of the NWCUA's geographic districts. Five of the eight incoming trustees were unopposed.

In addition to the Stang, the board of trustees includes:

  • Helen Funk, Rogue FCU, Medford, Ore.;
  • Steve Wilder, Horizon CU, Spokane Valley, Wash.;
  • Kyle Frick, Mid Oregon CU, Bend, Ore.;
  • Jill Nowacki, MAPs CU, Salem, Ore.;
  • Barbara Mathey, IBEW & United Workers FCU, Portland, Ore.;
  • Lesley Carrell, Fibre FCU, Longview, Wash.;
  • Jane Parker, Woodstone CU, Federal Way, Wash.; and
  • Gayle Yost, Community Healthcare FCU, Everett, Wash.
The foundation is working with Weber Marketing to develop new branding and imaging. The organization will showcase its work with Web marketing at the 2012 NWCUA Convention and Annual Business Meeting in Oct. 2.

The foundation said it will expand the board to 17 members, adding three trustees representing credit unions by asset size, and five additional at-large trustees through a formal nomination and appointment process. A transitional executive committee also will be seated at the Oct. 2 meeting to serve through Dec. 31.

Pa. House candidate a former CU employee

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HARRISBURG, Pa. (9/18/12)--
Pennsylvania Credit Union Association Director Cookie Yoder, left, meets Erin Molchany, candidate for the 22nd District State House Seat. (Photo provided by the Pennsylvania Credit Union Association.)
A candidate running for the 22nd State House District in Pennsylvania is a former credit union employee and has strong ties to credit unions, according to the Pennsylvania Credit Union Association (PCUA).

If elected, Erin Molchany would represent portions of Allegheny County, said PCUA (Life is a Highway Sept. 17). 

Molchany worked in a credit union and is the daughter of Fred Molchany, a board director of People First FCU, Allentown. PCUA Director Cookie Yoder, CEO of City Co FCU, Pittsburgh, attended an event last week for Molchany.

PCUA said Molchany  is devoted to making her region a better place for entrepreneurs to invest their time, energy and passion, and believes that credit unions can play a part in the process.

On a federal level, credit unions are urging Congress to pass legislation that would raise their member business lending (MBL) cap to 27.5% of assets from 12.25% so credit unions can play a larger role in the economic recovery. The Credit Union National Association (CUNA) estimates that raising the cap would allow credit unions to inject $13 billion in new small-business loans into the economy and would create140,000 new jobs the first year, without cost to taxpayers.

Chartway celebrity gala golf net 750K for charity

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VIRGINIA BEACH, Va. (9/18/12)--
Actress Marisa Ramirez, left, and LPGA Player Anna Rawson, right, are shown with We Promise children Aishah, Nasia, Mackenzie and Kennedy. They helped Chartway FCU's We Promise Foundation raise more than $750,000 to make a wish come true for children with life-threatening illnesses.
Hollywood, rock and golf stars were among the celebrities who contributed to the success of Chartway FCU's We Promise Foundation 7th Annual Diamonds in the Sky Gala and 14th Annual Charity Golf Classic, which raised $750,000 to bring smiles to children with life-threatening illnesses.

The celebrities rocked out and teed off to make dreams come true for the children. Joining the Virginia Beach, Va.-based credit union's We Promise Foundation were:

  • Actress Marisa Ramirez, known for starring roles in "Spartacus," "Bones," "The Young and the Restless," "General Hospital," and "Against the Wall";
  • Three Dog Night, the legendary classic rock and roll band;
  • LPGA player and model Anna Rawson;
  • PGA player Marc Leishman, winner of the most recent Travelers Championship;
  • Washington Redskins alumni; and
  • More than a dozen We Promise children.
Gala volunteers welcome the We Promise Children to the Diamonds in the Sky Gala on a red carpet, and help the We Promise children celebrate a big day absent glaring hospital lights and needle pricks. Here, three-year-old Zoe gives high fives to volunteers.(Photos provided by Chartway FCU)
Ramirez served as Mistress of Ceremonies for the foundation's gala, in which 16 children donned tiaras and bow ties for the event.

The black tie event featured silent and live auctions, a gourmet dinner and a live musical performance by Three Dog Night, who performed for 90 minutes before mingling with the guests.

Rawson joined the Charity Golf Classic to help the foundation raise the most funds in its history and teed off with each group on Hole No. 5.

Other celebrities who donated items and memorabilia from their personal collections included NFL players Tom Brady, Brett Favre, Chris Cooley and Shawne Merriman; the Zac Brown Band, country singers Kellie Pickler, Sara Evans, Jake Owen, Chris Young and Josh Thompson; author Jodi Picoult; astronaut Buzz Aldrin; and Olympic gold medalist Bode Miller, among others.

"We are indescribably grateful for the support of these celebrities and sponsors such as FIS, MassMutual, GTI Systems Inc., Jack Henry & Associates, Sinclair Communications, Colliers and many others," said John Blum, chairman of Chartway's We Promise Foundation.

Since Chartway began raising money to provide moments of magic to the children, it has raised more than $4.5 million.