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CU System briefs (09/28/2009)

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* MECHANICSBURG, Pa. and WASHINGTON (9/29/09)--Two scams have been reported involving targeted credit unions. Members 1st FCU, Mechanicsburg, Pa., is warning about a texting scam that says the credit union has blocked recipients' credit cards. The message instructs recipients to call a number and "unblock" their card by entering their card number and other information (WPMT-TV Sept. 27). Also, the American Bankers Association (ABA) is alerting consumers that cash prize letters claiming to be from ABA are a fake-check scam. The fake checks for amounts ranging from $1,000 to $5,000 are listed as being from ABD FCU, Warren, Mich., but ABA says it believes other financial institutions may be targeted (The Daily News Sept. 26) … * ROCKVILLE, Md. (9/29/09)--During October, MCT FCU will conduct a video contest for elementary, middle or high school students in Montgomery County, Md., to stress saving. Students submit short (less than two minutes) videos that answer the question, "Why do you need to save money?" Deadline for video entries is Oct. 30 at 5 p.m. ET. MCT FCU will select winners for each type of school. Each winner will receive $500 and designated $250 of the winnings for a favorite school organization. Winning videos will be posted on MCT's website. Videos will be judged on creativity and originality, overall impact to inspire individuals to save, and message clarity and relevance to the topic … * DUBLIN, Ohio (9/29/09)--Ohio HealthCare FCU is offering Mobile Banking so members can access their accounts via their cell phone as part of its enhanced online banking package, CU@Home. Features added include account to account transfers between financial institutions; automated transfers between two accounts at the credit union; account alerts and enhanced security. Its new PayBills@Home online bill-pay service now offers eBills, automated payments and expedited payments. This fall, the Dublin, Ohio-based credit union also will roll out its DeposZip service to allow select members to make deposits to their accounts from their home … * RALEIGH, N.C. (9/29/09)--Allegacy FCU, based in Winston-Salem, N.C. will open a student-operated credit union Monday at R.B. Glenn High School, Kernersville, N.C. The partnership aims to give students experience in personal finance so they can make educated decisions about money. Sen. Kay Hagan (D-N.C.), whose first piece of legislation in Congress would provide states with incentives to expand financial literacy education, will attend the opening (Associated Press Newswires Sept. 28) … * GARLAND, Texas (9/29/09)--Sometimes the early bird doesn't get the worm. Case in point: a masked man with a gun tried to hold up America's CU branch in Spanaway, Texas, Friday. But he arrived before the credit union opened for business. When an employee at the $1144.2 million asset credit union refused to let him inside, then ran and hid in the back of the credit union, he left empty handed. The incident was reported at about 8:15 a.m. Friday (The News Tribune Sept. 26) …

Combined CUNA WOCCU conference to double the impact

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MADISON, Wis. and WASHINGTON (9/29/09)--The 1 Credit Union Conference--next year's combination of America's Credit Union Conference and Expo with the World Credit Union Conference--will provide a concentrated use of resources to help credit unions nationwide and worldwide with strategies for the challenges they face. The 1 Credit Union Conference--one of the industry's largest conferences--is slated for July 11-14 in Las Vegas at the MGM Grand Hotel on the Las Vegas Strip. Its theme: One world, one event. Its sponsors: the Credit Union National Association (CUNA) and the World Credit Union Council (WOCCU). CUNA expects more than 2,500 attendees from 60 countries at the global event. By budgeting now, attendees can take advantage of various discounts on early bird registration discounts before May 20, 2010. Also, special discounts are available for attendees from small credit unions under $35 million in assets, from developing countries, from the younger-than-35 set, and more. The single professional development investment in attending will yield greater benefits, according to CUNA President/CEO Dan Mica. He noted that challenging times have meant that education and development dollars "need to bring a greater return than they ever have in the past. Our combined conference provides the best and most economical opportunity we can offer for all of us to find the resources we need to help our credit unions survive and thrive. The combination is unprecedented. It also marks the first time the World Credit Union Conference has met in the U.S. in more than a decade, said Pete Crear, WOCCU president/CEO. For more information or to register, use the link.

Pa. Commonwealth Court rules in favor of CUs

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HARRISBURG, Pa. (9/29/09)--The Commonwealth Court of Pennsylvania Monday overwhelmingly affirmed the state Department of Banking's procedures and decision to grant two credit unions--TruMark Financial CU and Freedom CU--expansions of their fields of membership (FOM) to community charters. The case began in 2003 when both credit unions received community charters to serve members in five counties in the Philadelphia metropolitan area. Banks and their state trade association intervened and a series of hearings before the department and court cases made their way through the state court system. The current case was remanded from the Supreme Court. The central concern of this case was the definition of a "well-defined local community" in determining whether the credit unions could expand. The banks claimed the banking department's decision was not supported by substantial evidence and denied them due process by limiting their access to only documents voluntarily disclosed by the credit unions. The court was not persuaded by any of the banks' arguments. Instead, Judge Robert Simpson cited the federal parity provision found in the state law that "allows a state-chartered credit union to create, amend or expand its field of membership as authorized by Section 109 of the Federal Credit Union Act, 'subject to reasonable conditions, limitations and restrictions as may be imposed by the department including, but not limited to, conditions, limitations and restrictions based on safety and soundness.'" "We reject banks' contention that this statutory language was meant to limit the department's discretion in dealing with community membership conversions. To the contrary, the plain language of the federal parity provision preserves for the department discretion to impose its own reasonable conditions, limitations and restrictions," wrote Judge Simpson. Neither the federal regulation nor NCUA Manual provides a clear method to assess integration and shared community interests in determining the community, said the decision. The term "local" is "not as narrowly interpreted as banks would like. The federal regulation…specifically provides that charters consisting of 'multiple counties or local areas with populations of any size' may meet the community requirements… In view of the expansive language of the federal regulation, we cannot state that the department's broad application is prohibited," said the decision. The court noted that "a reasonable mind could conclude based on the evidence presented that the proposed community is a well-defined local community for purposes of credit union field of membership. Therefore, we must reject banks' assertions that substantial evidence does not support the department's orders approving credit unions' conversion notices." One argument made by banks was that the department failed to undertake an analysis of the tax consequences of the credit unions' expansion. The court found "no indication that the General Assembly harbored an unexpressed intention that the department undertake a tax analysis," and said "an implied duty of tax analysis is inconsistent with the department's express duty to act on matters within the narrow 60-day time period provided in the Credit Union Code…We presume the General Assembly did not intend such an unreasonable result." The banking department "did not deny banks due process," said Simpson, citing credit unions' voluntary disclosure to banks of information about whether the five-county area was a "well-defined local community." "After notice, there was a full hearing on this issue… Thus, the issue of well-defined local community was robustly litigated here, and all parties received all process due on that issue." The court noted the "current controversy between banks and credit unions arises from the federal parity provision. Therefore, it is helpful to keep in mind the process available where a federal-chartered credit union seeks to convert its membership field. Usually there is no disclosure of confidential credit union information, even where there is a Freedom of Information Act request." He noted "our conclusions regarding the process due in proceedings before the department may therefore be compared to process due before the NCUA." The court also rejected banks argument that their right to intervene based on public interest extends beyond safety and soundness to an inquiry of all requirements for community charter conversions in the NCUA Manual. The "language of the Credit Union Code does not support such a broad reading…" and "in the absence of clear direction from our Supreme Court or from the General Assembly, we are reluctant to allow the unelected administrators of the NCUA to redefine the 'public interest' which triggers due process protections in proceedings before the department." Banks also "did not prove that the community-based credit unions will have an unfair competitive advantage or that they will lose customers to credit unions." Banks had a chance to prove harm in the original jurisdiction part of the case but discontinued the alternate proceedings. Judge Simpson noted that the procedures in the case included "additional safeguards which reduce any risk of erroneous deprivation of the public interest." The safeguards included a full hearing on "well-defined local community," which addressed the General Assembly's "basic requirement of a common bond for all credit unions," and the department's receipt of evidence from banks as to the safety and soundness of credit unions' proposed conversions. Unless the banks appeal this decision to the Pennsylvania Supreme Court, all of the field of membership cases brought by the banks against the Department of Banking will have ended in a final disposition and/or been dismissed.

Bridge account eases from savings to investing

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RALEIGH, N.C. (9/29/09)--State Employees’ CU (SECU) Bridge account, introduced in 2007, is helping transition savers into investors, says the credit union. The account provides an avenue for saving without the risk of loss associated with the stock market by offering the security of National Credit Union Administration insurance. With earnings tied to the quarterly change in the Standard & Poor’s (S&P) 500 Index, the account can earn as much as 3% per quarter and did so for the second quarter of 2009. With only one week left in the third quarter, it is likely that maximum earnings also will be paid for this quarter, SECU said. More than 4,500 members of the $16.7 billion asset, Raleigh, N.C.-based credit union have Bridge accounts with assets totaling more than $3.5 million. Accountholders are working toward accumulating funds needed to open investment accounts at SECU, which have grown in recent months, SECU said. Bridge accounts can be opened with a minimum of $25 and will accept deposits up to $3,000. If market returns are positive during a quarter, dividends will be paid up to the maximum rate of 3% --or a 12% annual percentage rate/12.55% annual percentage yield. If market returns are negative, no dividends will be declared for that quarter, but there also will be no loss, SECU said. “The SECU Bridge account is an excellent no-risk tool to help members establish the savings needed to ultimately become investors,” said Joan McCool, SECU senior vice president of individual retirement account and investment services.

Two Hawaii CUs receive CDFI Native American grants

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WASHINGTON (9/29/09)--Two federal credit unions were among the 10 awardees receiving $4.4 million from the Department of the Treasury’s Native American Community Development Financial Institutions (CDFI) Assistance (NACA) Program. First Hawaiian Homes FCU, Hoolehua, Hawaii, was awarded $225,000, and Molokai Community FCU, Kaunakakai, received $470,000, according to the NACA website. Neither credit union has received official notification of the awards, and therefore are declining comment at this time, a spokeswoman for First Hawaiian Homes FCU, told News Now Monday. The CDFI Fund’s Native Initiatives work to increase access to credit, capital and financial services in communities by creating and expanding CDFIs primarily serving Native communities. This is achieved through two initiatives:
* A funding program--the NACA program--targeted to increasing the number and capacity of existing or new Native CDFIs; and * A complementary series of training programs, called “Expanding Native Opportunities,” that seeks to foster the development of new Native CDFIs, strengthen the operational capacity of existing Native CDFIs, and guide Native CDFIs in the creation of important financial education and asset building programs for their communities.
The Treasury’s CDFI Fund announced the awards are being made with fiscal year 2009 appropriated dollars. The awardees are in eight states--Alaska, Arizona, Hawaii, New Mexico, North Carolina, Oklahoma, South Dakota and Wisconsin. “The growth in Native CDFIs is a remarkable accomplishment and their increasing reach and impact within the Native communities they serve have been tremendous,” said CDFI Fund Director Donna J. Gambrell. “We are committed to working with Native CDFIs to increase economic opportunities and bring all Native communities into the nation’s economic mainstream,” she added. “I am confident that the CDFI Fund’s new five-year Native Initiatives Strategic Plan, which lays out our long-term, comprehensive strategy to overcoming the barriers to capital in Native communities, will greatly advance these commitments.”

CDFI application help session scheduled

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WASHINGTON (9/29/09)--The U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund is offering a webinar workshop Wednesday to assist with applications for the 2010 round of the CDFI program. The webinar is intended for all CDFIs interested in applying for Financial Assistance (FA) or Technical Assistance (TA) grants. CDFI staff will discuss the application process and will be available to answer questions during the 2 p.m. (EDT) webinar. The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit, and credit unions are eligible for certification. The Fund recently announced that it will make a total of $113 million in funding available through the upcoming year. That funding round, marking the CDFI’s fifteenth year, is the largest-ever annually appropriated funding round. Last week, National Credit Union Administration Chairman Deborah Matz encouraged credit unions to use the CDFI program as a means to "expand service to low-income consumers." “Consumers across the income spectrum benefit when credit union service is made more accessible, and CDFI has been a reliable partner for many credit unions in making this a reality," Matz added. The CDFI will post an archived version of the webinar on its website. To register, use the link.

D.C. area CUs post stellar earnings says journal

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WASHINGTON (9/29/09)--Credit unions in the Washington, D.C., area posted “stellar” earnings in the second quarter, mostly due to substantial refunds from the federal government, the Washington Business Journal said Friday. Local credit unions’ median net income shot up 860% from a year ago to $155,728--and up from a first-quarter loss of $100,637. Also, median assets at credit unions went up 49% from a year ago to $46.2 million, leading to 20% growth in median loan portfolios from year ago to $25.2 million, according to a Journal analysis of second-quarter data from the National Credit Union Administration. The refunds came about after federal regulators changed the way credit unions would be charged to replenish the National Credit Union Shared Insurance Fund, the Journal said. Originally, credit unions were required to pay the entire expense in one year, but new legislation allows them to spread out payments over seven years. As a result of the change, credit unions that had paid most or all of the stabilization expense in one year, received a substantial portion of that money back through refunds in the second quarter, said the Journal. The refunds helped 83% of the 128 locally based credit unions move into profitability for the second quarter--a marked improvement from the first quarter when only 24% posted a profit. That indicates credit unions are doing the right thing and continuing to lend during the credit crunch, Mike Beall, CEO of the Maryland and District of Columbia Credit Union Association, told the Journal.

Three nominations in for CUNA Board

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MADISON, Wis. (9/29/09)--The Credit Union National Association (CUNA) has received three nominations for its 2009-2010 board elections. All are current incumbents. Nominees and their district categories are:
* John A. Graham, Kentucky Employees CU, Frankfort, Ky., District 2, Class A; * Marla S. Marsh, Kansas Credit Union Association, Wichita, Kan., District 5, Class D; and * Susan Steifel, Woodstone CU, Federal Way, Wash., District 6, Class A.
Deadline for nominations is Oct. 16. Nominations are being accepted in eight categories:
* District 1, Class C; * District 2, Class A; * District 3, Class B; * District 4, Class C; * District 5, Classes B and D; and * District 6, Classes A and D.
Eligible candidates must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district. Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds. To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district. CUNA's Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will begin Oct. 23 and close on Dec. 18. For more information, use the link.