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Court upholds corporates right to sue appraiser

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BIRMINGHAM, Ala. (9/24/10)--An appeals court in Alabama has upheld a corporate credit union's right to sue the appraiser who provided valuation of U.S. Central FCU's Paid-In-Capital (PIC) shares for conversion before U.S. Central suffered losses and went into conservatorship. The U.S. Court of Appeals for the 11th Circuit in Birmingham, Ala., ruled that the Alabama-based Corporate America CU can sue RubinBrown LLP, a St. Louis-based company hired to prepare a valuation of the PIC shares. The firm was hired after U.S. Central reported a write down in 2008 of mortgage-backed securities and its credit and debit ratings were downgraded, according to the court report. U.S. Central converted $450 million of member capital into PIC shares, which became worthless, said the suit. RubinBrown had challenged a lower court's rejection of its defense that Corporate America was bound by an arbitration clause as a third-party beneficiary. However, the appeals court ruled that a binding-arbitration clause in the agreement with the appraiser could not prevent the suit. "Corporate America is not a party to the contract between RubinBrown and U.S. Central ... After a review of the record, we conclude that these arguments are without merit," said the appeals court, which agreed the arbitration agreement in this case "was party specific." It also concluded that the corporate should not be compelled to arbitrate its claims under the doctrine of "equitable estoppel." "Equitable estoppel precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens that contract imposes," the court said. "The purpose of the doctrine is to prevent a plaintiff from, in effect, trying to have his cake and eat it too; that is, from relying on the contract when it works to his advantage by establishing the claim, and repudiating it when it works to his disadvantage by requiring arbitration," the appeals court said in the ruling. "Because Corporate America's claims are not intertwined with the contract between U.S. Central and RubinBrown, the court did not abuse its discretion in declining to compel arbitration under the doctrine of equitable estoppel," the ruling said.

Invest in America pledges 700K to Biz Kid

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LIVONIA, Mich. (9/24/10)--CU Village, through its Invest in America (IIA) program, has pledged $700,000 toward the national underwriting of Biz Kid$, an Emmy Award-winning, credit union-funded public television series that teaches kids about money management and entrepreneurship. IIA's pledge makes it one of the largest independent Biz Kid$ sponsors, alongside the National Credit Union Foundation (NCUF). Since the series launched in January 2008, the nationally broadcast program has delivered each week financial education to markets with more than 192 million households. It also has reached 1.2 million students and teachers via the companion classroom curriculum. In addition to the $700,000 contribution, to help achieve full funding for the program's fourth season and to jump-start Season Five funding, IIA is asking its credit union and league partners that receive Sprint marketing incentives to join it to raise the remaining $1 million needed to complete the 2010 season. This can be achieved if IIA partners donate 10% of their year-end rebate to support the program, said CU Village. "Since its inception, American's credit unions have exclusively funded Biz Kid$ as our industry's gift to financial education," said CU Village CEO David Adams. To date, $8.55 million has been contributed to fund the program, he added. In most cases a 10% donation will not impact IIA partners because the Sprint program has grown the past year, Adam said. He calculated that if each of the 2,600 credit union and 46 league IIA partners opts-in to participate, Biz Kid$ will see an additional $1 million in funding to complete its fourth season and establish a sustainable funding source for the future. "This is an incredible gift that CU Village has given the entire credit union system," said John Annaloro, president/CEO of the Washington Credit Union League, whose foundation currently administers Biz Kid$ on behalf of America's Credit Unions. "IIA's underwriting gift and future funding model ensure that the credit unions' gift of financial education can remain just that--the credit union system's exclusive gift. This is a shining example of what our system can do when we work together," Annaloro added. Biz Kid$ has been honored with a Herb Wegner Award, a Daytime Emmy Award, four Emmy nominations, a first place Telly Award and an Environmental Media Award. IIA was created to help credit unions grow, support U.S.-based companies such as General Motors and Sprint, and provide members with exclusive discounts. For more information, call 800-262-6285 or e-mail info@cu-village.com.

Thirty scholarships awarded to attend Community CU conference

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MADISON, Wis. (9/24/10)--Credit Union National Association (CUNA) and CO-OP Financial Services are announcing that 30 scholarships have been awarded to credit union professionals to attend the CUNA Community Credit Union & Growth Conference Oct. 6-9 in Boston. CO-OP Financial Services sponsored the scholarship fund. “Due to an overwhelming response and need by credit unions, we have tripled the scholarships being offered from 12 to 30,” said Todd Spiczenski, vice president of CUNA Center for Professional Development. “The conference is dedicated to helping industry professionals grow their credit unions, education that is essential in this difficult economic and changing regulatory environment,” said Stan Hollen, president/CEO, CO-OP Financial Services. Through the scholarship, credit union personnel can take advantage of educational and networking opportunities available at the conference. The conference offers educational sessions for credit unions looking to grow membership and revenue. Scholarship recipients have been notified, CUNA said. For more information, use the link.

MDDCCUA names Jennifer Simmons as interim CEO

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COLUMBIA, Md. (9/24/10)--Jennifer Simmons, with 20 years of credit union industry experience, has been named interim president/CEO of the Maryland and the District of Columbia Credit Union Association (MDDCCUA), announced the association's board of directors. Simmons' appointment will be effective Sept. 27. She will lead the organization from its headquarters in Columbia, Md., until a successor to outgoing MDDCCUA CEO Mike Beall is chosen. Simmons, who has been with the association since June 2006, currently serves as chief membership officer. Prior to her employment, she held management positions at Signal Financial FCU and was on the staff of NIH FCU and Montgomery County Teachers. Beall will remain as adviser to Simmons and the board through Oct. 22. He is leaving to become president/CEO of the Missouri Credit Union Association upon the retirement of Rosie Holub. The MDDCCUA board chose Simmons to lead the transition "because of her deep knowledge of area credit union leaders, her strong stewardship of the organization's strategic plan, and her ability to manage the staff to continue a strong level of service during this crucial time for credit unions," said MDDCCUA Chairman Miguel Boluda. Simmons pledged "to continue to help credit unions in the Maryland/D.C. region as they navigate the challenges of the economy and the current legislative and regulatory environment. "MDDCCUA will be starting its fall cooperative advertising effort, holding its Volunteer Leadership Conference and proceeding with budget and strategic efforts," she added. MDDCCUA said it has signed a contract with D. Hilton Associates, an industry executive search firm for the search for a new CEO. It will be taking steps on the search process over the next several weeks.

CU closes branch until more police added

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STEUBENVILLE, Ohio (9/24/10)--An Ohio credit union is closing one of its branches until police protection is restored. Valley One Community FCU, a $30.5 million asset credit union based in Steubenville, Ohio, is temporarily closing its Mingo Junction, Ohio, branch because of police layoffs and is telling members to use its Steubenville branch (WTOV9.com Sept. 23). The credit union said it had no comment on the matter when contacted by News Now. “Our board, at the last meeting, voted to close temporarily until more policemen were added,” Valley One First Vice President Dominic Duco told the TV station. Valley One Community board officials are worried because the Steubenville branch was robbed a few years ago, Duco added. The armed robbery occurred with a full complement of police officers present. The credit union said it was concerned about the safety of its employees. At times--such as paydays when it cashes checks--the credit union holds up to $100,000 in cash, Duco told the station.

Savings debate highlights WOCCU Pacific Tech Congress

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PORT MORESBY, Papua New Guinea (9/24/10)--Savings accessibility and other critical issues formed the focus of the World Council of Credit Unions’ (WOCCU) Pacific Credit Union Technical Congress, co-hosted by the Credit Union Foundation Australia (CUFA) and the Federation of Savings and Loan Societies of Papua New Guinea (FESALOS).
Click to view larger image From left, World Council of Credit Unions (WOCCU) Executive Vice President and Chief Operating Officer Brian Branch, Federation of Savings and Loan Societies Ltd. of Papua New Guinea (FESALOS) board Chair Michael Koisen and Credit Union Foundation Australia CEO Peter Mason met at WOCCU's Pacific Credit Union Technical Congress in Papua New Guinea last week. FESALOS became WOCCU's newest member in April.
Click to view larger image Alan Cameron, left, CEO of the Idaho Credit Union League and Federation of Savings and Loan Societies Ltd. of Papua New Guinea board Chair Michael Koisen discuss regulatory issues. The two organizations are paired in the World Council of Credit Unions’ International Partnerships Program. (Photos provided by the World Council of Credit Unions)
Eighty-four participants from Australia, the Federated States of Micronesia, Fiji, Papua New Guinea, Solomon Islands, Timor Leste, Tonga, Tuvalu, Vanuatu and the U.S. gathered last week in Port Moresby for the three-day event. Sessions ranged from the changing financial marketplace, to increasing scrutiny from regulators, to global trends in financial regulation. The topics also attracted local television news coverage. Credit unions in the South Pacific are responding to an increasing demand for savings products, but savings growth is hampered by legislation that caps the interest rates for credit union savings accounts to near 7%, while the inflation rate hovers near 10%. Banks have no restrictions on the savings account interest rates they can offer, causing credit unions difficulty competing for savings market share. Pacific credit unions also operate with a cap on loan interest rates at 1% per month and are working to adjust to greater regulatory scrutiny at their compliance with accounting standards, capital and liquidity requirements, and consumer protection standards, a situation that sounded familiar to conference participant Alan Cameron, president/CEO of the Idaho Credit Union League. “In Idaho, loan interest rates were once limited by state legislation,” said Cameron. “We had to show legislators that the interest rate controls prevented credit from flowing into Idaho and providing funding for local economic activity. When the limits were removed we had funding for more jobs and economic activity.” While credit unions in the South Pacific have not experienced the investment or delinquency losses that have affected other regions, they face increasing consumer pressure to demonstrate more professional management and internal governance. CUFA and WOCCU are working with the newly formed Oceanic Confederation of Credit Union Leagues to provide management certification training to credit union leaders and continuing education through the Pacific Congress. The two-year Manager Certification Program, held in conjunction with the congress each year, graduated 14 participants who completed their second year last year in Fiji. The program initiated a new group of 42 credit union leaders from Fiji, Papua New Guinea and Timor Leste. “Credit unions in the South Pacific are under tremendous pressure to update their model to keep consumer confidence, comply with regulations and compete with new technology,” said Brian Branch, WOCCU executive vice president and chief operating officer. “While the values of financial empowerment remain constant, the financial model, the products and the technology evolve.” The recently formed Global Women’s Leadership Network held a half-day Leadership Development Workshop preceding the congress for women credit union executives and board members interested in expanding their leadership capacity. Of the 23 congress participants, 18 women participated in a series of team-building exercises, group discussions and presentations that focused on strategic thinking, increasing self-confidence and improving public-speaking skills.

Wis. regulator seeks more staff to handle CU complexities

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MADISON, Wis. (9/24/10)--The Wisconsin Department of Financial Institutions wants to hire more staff to help it better monitor larger and increasingly more complex credit unions. The state’s financial industry regulator is looking to hire another examiner and a new staffer to help with expanded oversight of investment advisers (The Milwaukee Journal Sentinel Sept. 23). The department noted in its budget request that the larger size of credit unions--Wisconsin has six with more the $1 billion in assets--along with their expansion of services and increasing complexity, makes it harder to stay on pace with the exam schedule, the newspaper said. The examination staff is susceptible to extended illness, retirements and turnover, the department said. “It takes about a year to fully train an examiner, and particularly with the incredible changes in the rules as a result of the Dodd-Frank legislation, it requires quite a bit more training of all our examiners,” department chief Lorrie Keating Heinemann told the paper.

CU System brief (09/23/2010)

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* ST. LOUIS (9/24/10)--Janice Mosby, a member of St. Louis Community CU's Board of Directors for 40 years, died Tuesday. She served as a volunteer for the credit union in numerous capacities, including as chairperson, vice chairperson, a member of the Pension Oversight Committee and board member of the credit union's foundation. She joined the board in 1970 of what was then St. Louis Teachers CU with $10 million in assets and one location. Today it has $195 million in assets with eight locations and 40,000 members. A former principal for St. Louis Public Schools, she was an active volunteer in the community ...