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Occupy anniversary Anti-bank sentiment still strong

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NEW YORK (9/19/12)--Monday's protests to mark the first anniversary of the Occupy Wall Street, a movement that attacked arrogant big banks' policies, fees and bailouts among other things, were a shadow of the events of a year ago. However, the estimated 1,000 people at the scattered protests indicate dissatisfaction with big banks still exists.

Credit unions likely will pay attention to anything sparked by the protests in case a good marketing opportunity develops, as it did last year when anti-bank sentiment and dissatisfaction with bank fees expressed on Facebook and other social media morphed into a nationwide Bank Transfer Day, a day set aside on Nov. 5 to switch accounts from big banks to credit unions and small local banks.

That resulted in something of a lovefest for credit unions, with unsolicited member testimonials and the media praising the benefits of credit unions.  The positive press resulted in heightened consumer awareness of credit unions, with a huge boost of membership and deposits for credit unions as consumers switched their accounts to credit unions.

American Banker Tuesday reported that the resurgence this week indicates many people "still hold strong negative feelings toward all things capitalist--especially banks."  However, The New York Times and ABC News (Sept. 17) noted the police presence was stronger and that 185 people were arrested as protesters tried to block access to the New York Stock Exchange. Some were also arrested at a Bank of America branch and at Goldman Sachs headquarters.

They also noted that the Occupiers seemed less focused, and crowds of protesters numbering in the hundreds caused little disruption on Wall Street as they marched and chanted, among other things, "We got sold out, banks got bailed out."

Credit unions continued to see growth sparked by last year's Bank Transfer Day publicity well into the first half of 2012, with 1.3 million new members added to credit unions, a sign that the Credit Union National Association said shows more and more consumers are eager to take advantage of the financial benefits they can realize at credit unions (News Now Aug. 31).

The National Credit Union Administration reported a membership increase of 643,322 during second quarter of 2012, with 93.1 million credit union members nationwide depositing an additional $2.7 billion in savings into their credit unions.

Green efforts take many forms at CUs

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MADISON, Wis. (9/19/12)--Credit unions' efforts to sustain the environment go beyond asking members to reduce paper and gasoline use by switching to online and mobile banking and e-statements. Across the country, credit unions are finding ways to help the environment, encourage members to do the same, and support their communities.

Here are few examples of credit unions' work with sustainable projects and how they reward their members for using green products and services.  Credit unions are:

Providing auto loans for hybrids and conversions to alternative sources of gas. In Oklahoma City, Okla. Communication FCU and Allegiance CU offer loans to help defray the cost of converting vehicles to run on compressed natural gas (CNG). They've teamed up with a CNG station to finance loans for buying new vehicles vehicle conversions or hybrids and will also finance converting a member's existing vehicle to CNG.

The $836 million asset Communication FCU will finance up to the manufacturer's suggested retail price plus the cost of the conversion, with some loans as low as 1.99%, the credit union told the Tulsa World (NewsOK.com Sept. 8). For pre-owned or member-owned existing vehicles, it will finance up to 115% of the National Automobile Dealers Association's retail value. For those who don't have sufficient equity in their vehicles to cover the CNG conversions, the credit union has a program that can finance the conversions at rates as low as 5.99% APR.

Allegiance CU, with $234 million in assets,, noted that CNG conversions offer drivers serious savings and Allegiance offers low-cost signature loans (Tulsa World).

Columbia CU, Vancouver, Wash., rewards members for driving "environmentally gentle" autos designated by the U.S. Environmental Protection Agency (EPA) as SmartWay and SmartWay Elite. The $865 million asset credit union reduces the auto loan rate by up to 0.50% APR, gives the loan recipients a 90-day break from payments, and requires them to opt for electronic statements to get the discount.

Offering loans to make the home more energy efficient. Summit CU, a $1.9 billion asset credit union in Madison, Wis., has partnered with Green Madison to provide residents a special loan for increasing the energy-efficiency of their home. To get the loan, the member must live in the city and have an owner-occupied or nonowner-occupied single-family home, duplex or condo of three units or less; prove the building is owned by an individual and not a trust, limited liability corporation or a business; and be up to date on property tax payments. Also, the potential energy savings must be 15% or more at the initial assessment, and the homeowner must agree to install a mix of recommended measures to achieve that percentage.  The range of loans can be $1,000 to $15,000, with low rates and flexible repayment terms, said Summit's website.

Changing workplace/staff behavior. Philadelphia-based American Heritage FCU has a dedicated "Green Team" of credit union employees and management that initiates green efforts such as providing bike racks for employees to reduce traffic pollution; offering a commuting subsidy to staff members and implementing a telecommuting program; and installing Geo-thermal heating and cooling in its new building projects (Life is a Highway Sept. 10), as well as participating in the Adopt-A-Highway Program and other recycling efforts.

Redwood CU, a $2 billion asset credit union in Santa Rosa, Calif., has earned a host of awards for its environmental efforts, including the Silver LEED Certification. It uses recycled paper products, including letterhead, envelopes, and restroom and kitchen supplies; prints marketing materials on econ-friendly soy-based inks and recycled paper; installs Energy Star appliances and copy/printing machines, including multi-function devices that increase scanning and double-sided printing capabilities; and uses electronic formats on many notices and correspondence.

Incorporating energy efficiency in new or remodeled credit union branches. When First Capital FCU opened a one-story, 4,160-square-foot building in South York, Pa., in August 2009, it incorporated sustainable strategies in its use of energy, lighting, water and materials. This year it became the first retail facility in York to achieve the Leadership in Energy and Environmental Design (LEED) GOLD certification, established by the U.S. Green Building Council and verified by the Green Building Certification Institute.

Columbia CU, an $865 million asset credit union in Vancouver, Wash., also received a LEED GOLD certification for its Grand Central and Washougal branch buildings, the first LEED GOLD for Washington State.  It purchases more than 50% of its electricity through a renewable energy program, uses compact fluorescent lighting in all its facilities, prints marketing materials on uncoated, recyclable paper with soy-based inks, and recycles at all locations, said its website.

Redwood CU's branches and facilities also use recycled business supplies and recycled or renewable construction, environmentally friendly paints and finishes, uses technology to enhance and maximize climate control and energy efficiency, uses natural light and senor-based office lighting to decrease energy use, and has water-efficient restroom facilities and landscaping practices.

 

Growing green as community service.
The $1.25 billion asset American Heritage FCU in Philadelphia established an Employee Gardens on its grounds. The vegetables grown by employees are sold back to employees in the credit union lunch rooms with all proceeds going to Philabundance and Aid for Friends, said the Pennsylvania Credit Union Association (Life is a Highway Sept. 12).

Columbia CU sponsors local tree plantings through Vancouver Urban Forestry. Many credit unions participate in landscaping and planting community service activities as well.

Investing in earth-friendly and socially responsible investments. Santa Fe, N.M.-based Permaculture CU, with assets of $5.4 million, shows that a credit union doesn't have to be huge to follow a sustainability philosophy. It pools its financial resources "in the ethics of permaculture--care of the earth, care of people and reinvestment of surplus for the betterment of both," says its website.  It offers earth friendly and socially responsible loans and investments, and provides educational opportunities to learn more about sustainable practices. It provides loans for home energy improvement, small business support and fuel-efficient vehicles and micro-loans to farmers through the Santa Fe Farmer's Market Institute and Permaculture Guild.

Educating members and the public about acting green. All the credit unions here engage in educating members and the community about going green. Many websites provided links to more information about acting environmentally, included articles in their newsletters and encouraged members to think green.

Redwood CU said on its website it is committed to the environment. "Simply put, we believe in 'doing the right thing,' so we practice and encourage green-friendly efforts that contribute to a healthy and sustainable environment for all."

"If everyone did one thing 'green,' it would make a huge impact," urged Columbia CU on its website.

IHuffPoI on election Break up big banks support CUs

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WASHINGTON (9/19/12)--Credit unions should be supported at the expense of big banks, a columnist in the Huffington Post said Monday.

"We need to break up big banks, which nearly brought down our economy, and instead support the local banks and credit unions that invest in the businesses and homes of our communities," wrote Sarah van Gelder, editor of Yes magazine, in the Post.

Van Gelder was writing about the five things on which this fall's presidential election should focus.

Her comments about credit unions were made under the No. 1 item: "Rebuild the economy, starting with the middle class and poor, not Wall Street and CEOs."

Placing more earning and spending power with the poor and middle class is a step needed to get the U.S economy up to speed, van Gelder wrote.

"We need small and medium-sized businesses that are rooted in their communities, not giant transnational corporations," she added. "Government should help veterans, recent graduates, and the unemployed to launch their own businesses and cooperatives, and back employees who take over companies that are threatening to close their doors."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (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.

To read the column, use the link.

42 CU pros become CUDEs

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MADISON, Wis. (9/19/12)--The Credit Union Development Education (DE) Training program graduated 42 credit union professionals with the designation as Credit Union Development Educators (CUDEs) last week.

The training was held on the University of Wisconsin campus in Madison, Wis.

Graduates of the Fall 2012 Credit Union Development Educators Training stand outside of the World Credit Union Center Campus in Madison, Wis. (Photo provided by the National Credit Union Foundation)

Incorporating challenges that credit unions face today, DE Training provides lessons in cooperative principles and credit union philosophy. Participants in this month's week-long program were involved in group exercises, field trips, and discussions with speakers from throughout the credit union system. Participants are required to complete team projects proposing solutions for credit unions to help alleviate or eliminate challenging situations in any given area.

"During the entire DE training experience, we work to ensure applicability of the credit union philosophy and relevance to current events," said Lois Kitsch, DE mentor and national program director for the National Credit Union Foundation.

"For example, for the final case studies, participants worked through and presented solutions to critical issues that included social media and virtual banking, mergers and small credit unions, payday lending, small-credit union growth, National Credit Union Administration's low-income designation, and credit union development in Great Britain," she added.

"I entered DE Training as the frustrated CEO of a small credit union, unsure how much more energy we had to fight," said Chris Blough, president/CEO of Wayne County Community FCU in Smithville, Ohio. "I left DE recharged and refocused on my mission to not only empower my own small credit union, but to work to strengthen the credit union system nationwide." 

Eight program facilitator and mentors guided the Fall 2012 graduating class, which included credit union movement representatives from across the U.S., the Caribbean, Scotland, and South Africa. The South Africa representative participated through the African DE Scholars Program. To read a list of the graduates, use the link.

The next DE Training will be held at the Lowell Center in Madison, Wis., May 1-8. For more information, e-mail cude@ncuf.coop.

NWCUAs Hein visits Korean CU headquarters

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FEDERAL WAY, Wash. (9/19/12)--Dan Hein, vice president of administration and finance for the Northwest Credit Union Association (NWCUA), spent a day in August meeting with representatives of the National Credit Union Federation of Korea (NACUFOK), the hub of the Korean credit union system.

Tae-Jong Zhang (left), chairman and president of the National Credit Union Federation of Korea, visited with Dan Hein, vice president of administration and finance for the Northwest Credit Union Association, at Korean credit union headquarters in Daejeon, South Korea. (Photo provided by the Northwest Credit Union Association)
Hein's visit to South Korea was essentially a first step, an opportunity to develop a friendship between NACUFOK and the NWCUA and to share knowledge about each organization (Anthem Recap Sept. 13).

NACUFOK was established in 1964 and is the fifth-largest national credit union trade association or federation in the world, with roughly US$42.8 billion in assets, 5.86 million members, and 955 total credit unions as of 2011.

In many ways, the Korean credit union system resembles the U.S. credit union movement, with a mission founded on the same principles of cooperative finance that guide credit unions worldwide. Headquartered in the city of Daejeon in a skyscraper owned by the federation, NACUFOK is essentially Korea's equivalent of the U.S.'s Credit Union National Association (CUNA). However, instead of working with autonomous state and regional leagues and associations, NACUFOK has a number of regional branches serving credit unions on a more local level.

Hein met with NACUFOK Chairman and President Tae-jong Zhang to discuss the two countries' credit union systems and general financial industries.

Hein also talked to NACUFOK's information technology (IT) manager, who led him through the restricted-access server room. In the year 2000, NACUFOK developed and launched the Intra-Network system, which connected all of the country's credit unions onto one core system. By comparison, John Lass, senior vice president, strategy & business development at CUNA Mutual Group, recently estimated that 92 different core processors are used by credit unions in the U.S.

In 2008, NACUFOK also implemented a new IT financial system. Because of these efforts to unify the nation's credit union operations, the server room Hein toured houses all servers that process all Korean credit union transactions, online banking services, and other IT-related activities. Servers are grouped together based on their primary function.

Later in the afternoon, Hein met with NACUFOK's planning and coordination department staffers to discuss the U.S. credit union movement.

"They were very interested in the challenges that U.S. credit unions are facing and how they are working to best meet those challenges," Hein said. "They also asked about the NWCUA and our role with credit unions and how we are helping the industry."

The department also was interested in the U.S. credit union system structure, asking specifically about the credit union tax exemption. In Korea, credit unions are not taxed, and credit union members pay lower tax on interest income for certificates of deposit.

NACUFOK's nationwide marketing and public relations efforts is a unified approach that has helped create more credit union brand awareness for each credit union, Hein learned.

PCI Security Standards Council issues mobile guidance

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WAKEFIELD, Mass. (9/19/12)--As credit unions prepare for a predicted explosion in the mobile payments markets by developing their own mobile apps--amid member concerns about the security of mobile transactions--the PCI Security Standards Council (PCI SSC) last week released best practices for mobile payment acceptance security.

PCI SSC is the standards body that oversees the Payment Card Industry Data Security Standard (PCI DSS). PCI is the standard that the major credit card companies--Visa MasterCard, Discovery and American Express--use to make consumers' credit and debit card payments secure.

The PCI Mobile Payment Acceptance Security Guidelines offer software developers and mobile device manufacturers guidance on designing appropriate security controls so merchants can accept mobile payments securely, the organization explained.

At a presentation to the industry in Orlando, Fla., Nicholas J. Percoco, senior vice president, Trustwave SpiderLabs demonstrated some of the top attacks that threaten the security of payments over mobile acceptance devices.

The document released by PCI organizes the mobile payment-acceptance security guidance into two categories: best practices to secure the payment transaction itself, which addresses cardholder data as it is entered, stored and processed using mobile devices; and guidelines for securing the supporting environments, which addresses security measures essential to the integrity of the broader mobile application platform environment.

Among the recommendations:

  • Isolate sensitive functions and data in trusted environments;
  • Implement secure coding best practices;
  • Eliminate unnecessary third-party access and privilege escalation;
  • Create the ability to remotely disable payment applications; and
  • Create server-side controls and report unauthorized access.
"Applications are going to market so quickly--anyone can design their own app today that can be used to accept payments tomorrow," said PCI SSC Chief Technology Officer Troy Leach in his presentation to meeting attendees. "It's our hope that in educating this new group of developers, as well as device vendors on what they can do to build security into their design process, that we'll start to see the market drive more secure options for merchants to protect their customers' data."

The council plans to release further guidance in 2013 to help merchants leverage mobile payment acceptance securely, while continuing to collaborate with industry subject matter experts to explore how card data security can be addressed.

Ex-lawmaker charged with ID theft ploy defrauding CUs

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LOS ANGELES (9/19/12)--Federal Bureau of Investigation special agents Monday arrested former California state assemblyman Carl Washington, who allegedly stole thousands of dollars from credit unions and banks by pretending to be a victim of identity fraud.

Washington, who works for the Los Angeles County Probation Department, was charged with defrauding LA Financial FCU, First City CU, Los Angeles, and Farmers and Merchants Bank (LA Observed Sept. 18). The $360 million asset LA Financial FCU is based in Pasadena and has branches in Los Angeles. First City CU is a Los Angeles-based credit union with $492 million in assets.

He was charged with three counts of bank fraud and three counts of making a false statement to federally insured financial institutions.

Washington allegedly would use credit cards and loans from the credit unions and banks to purchase goods and services (Press-Telegram Sept. 18). According to the indictment, he would then allegedly file a police report with the Los Angeles Sheriff's Department, falsely claiming to be the victim of identity theft, and report that the credit cards and loans had been opened by someone else.

The suspect also allegedly provided a copy of the false police report to Experian, one of the three major credit reporting agencies, and request that the credit cards and loans be removed, although many of them had unpaid balances, according to the indictment. When Experian removed the items, Washington allegedly applied for new credit cards without disclosing the unpaid balances.

Washington did make several payments toward the credit cards before claiming they were the result of identity theft, according to the indictment.

CUANY Economic Forum adds speakers

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ALBANY, N.Y. (9/19/12)--The Credit Union Association of New York has announced the slate of speakers for its 2012 Economic Forum, Nov. 1-2 in Albany, N.Y.

John Lass, senior vice president of strategy and business development for CUNA Mutual Group, Madison, Wis., and Nick Perna, resident economist at Alloya Corporate FCU,  Albany, N.Y., and economics professor at Yale University, will discuss the most significant challenges and opportunities facing credit unions.

Perna specializes in economic analysis, forecasting and strategy. His Nov. 2 presentation, How Ben Bernanke Will Affect Your Credit Union During the Coming Year and Beyond, will explore the impact of Federal Reserve monetary policies on the day-to-day and longer-term running of credit unions.

Lass and Perna join keynote speaker Mark Sievewright of Fiserv, Brookfield, Wis.

Breakout speakers and topics include:

  • Tim Bruculere, Alloya Corporate FCU, Why Now is the Time to Be Thinking About Liquidity;
  • Andrew Kohl, Alloya Corporate FCU, 2013 U.S. Economic Outlook: Economic Growth & Interest Rates; and
  • Kristina Muller and Gregory Perry, Balance Sheet Solutions, Warrenville, Ill., Investing in an Uncertain World.
The 2012 Economic Forum is open to credit union leaders nationwide.

CU System briefs (09/18/2012)

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  • CONCORD, N.H. (9/19/12)--A Sanbornton, N.H., woman has been sentenced in federal court to three years in prison and three years' supervision after pleading guilty to aiding and abetting robberies at a jewelry store and at Manchester-based Northeast CU last year. Shyloe Piper Johnson allegedly admitted being the getaway car driver for a robbery of Kay Jewelers, Tilton, and providing surveillance and other assistance for the credit union robbery. The robberies occurred in November and December. Johnson's alleged boyfriend, Walter Williams of Compton, Calif., pleaded guilty to the robberies as well as to another jewelry store robbery in October. He is scheduled to be sentenced Nov. 26. A third person, Prince Sage, Brooklyn, N.Y., also pleaded guilty to the credit union robbery and will be sentenced Nov. 29. Other individuals have been arrested for the jewelry store robberies and for lesser offenses related to the heists, said a Department of Justice press release …
  • LEWISTON, Maine (9/19/12)--U.S. Rep. Michael Michaud (D-Maine) was guest of honor at a reception attended by nearly 30 credit unions and guests on Sept. 6. Fifteen credit unions were represented at the event hosted by the Maine Credit Union League (Weekly Update Sept. 14). "Congressman Michaud has stood with Maine's credit unions time and time again since he was first elected to Congress in 2002," said league President John Murphy, noting that Michaud "has been a true friend in his support of credit union issues in Congress." Michaud said, "My association with credit unions goes back to when I was a teenager, and I have always appreciated what credit unions have done for me and for all members. The support that the league and Maine's credit unions have provided me, first as a member of the Maine Legislature and, for the past 10 years as a member of Congress, has been tremendous." He noted that credit unions "played a big role" in his first congressional campaign and he thanked them for "what you have done for me, and for what you do for the people in the communities you serve." …
  • BOSTON (9/19/12)--Three Boston area credit union executives have been named 2012 Credit Union Heroes by Boston-based Banker & Tradesman, a publisher of banking and real-estate data (lowellsun.com Sept. 17). They are Steve Jones, vice president of community development at Jeanne D'Arc CU of Lowell; Nichole Curtin, assistant vice president and marketing and communications manager at Workers CU, Fitchburg; and Nancy Sequin, assistant vice president and human resources manager at Workers' CU.  The three were noted for their outstanding contributions to the industry and for their volunteerism, community service and charity …
  • FLINT Mich. (9/19/12)--The Flint, Mich., chapter of credit unions' second legislative breakfast of the year attracted 42 credit union professionals, four lawmakers and one legislative staff member, said the Michigan Credit Union League (Michigan Monitor Sept. 17). The breakfast was at the ELGA CU Administration Building in Burton. Lawmakers included Sen. John Gleason (D-Flushing), shown at left in the photo; and Reps. Kevin Daley (R-Lum); Jim Ananich (D-Flint), and Charles Smiley (D-Burton), who was accompanied by Legislative Aide Tim Sneller. The breakfast buffet was followed by discussion of a number of state and financial issues. According to the league, legislative breakfasts are a great way to build relationships with lawmakers and educate them about credit union issues. (Photo provided by the Michigan Credit Union League) …