Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Pennsylvania group arrives in Haiti

 Permanent link
HARRISBURG, Pa. (10/1/10)--A delegation from the Pennsylvania Credit Union Foundation arrived Monday in Port-au-Prince, Haiti, for a two-week visit to evaluate damage from Hurricane Matthew and the January earthquake and explore opportunities for credit unions to help repair the remittance system between the U.S. and Haiti. The delegation includes foundation Executive Director Joe Wambach, his wife Maryse, and Chris Woods, foundation board member and president/CEO of Keystone FCU, West Chester (Life is a Highway Sept. 28). The foundation said Wambach sent a text message indicating he was "stunned by the rubble and conditions, and there's still no electricity." The loss of electricity was due to the hurricane, which hit the country last week. On Tuesday, the group met with World Council of Credit Unions (WOCCU) officials and CARE International. The team also met officials from the relief group Plan International, which is conducting Cash for Work programs and other microfinancing iniatives through Fonkoze, Haiti's Alternative Bank for the Organized Poor. Fonkoze is the largest microfinance institution in Haiti, serving more than 45,000 women borrowers, most of whom live and work in the countryside. The institution has more than 200,000 savers served by a network of 41 branches throughout the country (Life is a Highway Sept. 30). On Wednesday the team traveled to L'Hopital de Canape Vert (Canope Verte Hospital) in Port-au-Prince. The hospital, which was nearly destroyed during the Jan. 21 earthquake, lost many staffers. Months later, there is still insufficient space and resources to treat patients. Most of the medical records were destroyed and computers are scarce to rebuild the system, said the report. Thursday the group was scheduled to visit two credit unions. The Pennsylvania Credit Union Association will provide updates during the visit.

Capital funds a milestone for CDCUs says federation

 Permanent link
NEW YORK (10/1/10)--News of the U.S. Treasury Department's investment of nearly $70 million through its Community Development Capital Initiative (CDCI) with 48 community development credit unions (CDCUs) was welcomed by National Federation of Community Development Credit Unions Thursday. "The Treasury Department's CDCI is a milestone in the history of the CDCU movement," said federation President/CEO Clifford N. Rosenthal. "The federation has worked for more than two decades to win support for credit unions that serve low-income communities across the country. The establishment of the CDFI Fund in 1994 was a great victory. This is another," Rosenthal said, adding the initiative "will strengthen credit unions and enable them to expand services to low-income communities at a critical time in our nation's recovery. I also want to thank the Credit Union National Association for the support they provided the federation during what was at times a rather challenging process." Although the funding and authority for CDCI is provided by and through the Treasury Department's Troubled Asset Relief Program (TARP), this should not be considered by any means a "bailout" program, Rosenthal stressed. "Credit union applicants were subjected to rigorous review by the National Credit Union Administration (NCUA), the Treasury Department, and the CDFI Fund to ensure that they are both financially viable and are focused on serving low-income communities," he noted. CDCI awards are not grants, but rather secondary capital loans, which for low-income credit unions are classified as net worth, subject to certain conditions, on their balance sheets. Secondary capital is vital for low-income credit unions, because they-- like other credit unions--lack the power enjoyed by banks to build capital by selling stock, said the federation. Eligible credit unions were allowed to apply for up to 3.5% of their total assets, or $35,000 in secondary capital for every million in assets. The basic structure of the investments made to CDCUs through this program includes a rate of 2% for the first eight years, escalating to 9% for an additional five years, should credit unions choose to retain the loans. "We expect that most participating credit unions will repay the loan by the eight-year mark, if not earlier," Rosenthal said. Recipients of the loans include some of the smallest credit unions in the country, with assets of $1 million or less. The largest credit unions participating had several hundred million in assets. All the CDCU recipients were required to have both low-income designation from their credit union regulator and CDFI certification from the Community Development Financial Institutions Fund. "The statutory constraints governing TARP unfortunately limited participation," said Rosenthal. "But we appreciate everything the federal agencies did to make this program available even to some of the smallest, most resource-poor credit unions in the country." Jackson, Miss.-based Hope FCU, a $129 million asset CDCU serving nearly 24,000 members across Mississippi, Arkansas, Louisiana, and Tennessee, was the first CDCU to be approved for CDCI funds. Hope FCU CEO Bill Bynum called the investment a breakthrough for low-income communities. "By investing in credit unions and other community development financial institutions, Treasury is supporting a key segment of the nation's finance sector," he said. "Hope [FCU] has experienced steady increase in demand for credit over recent years as many traditional lenders have restricted their lending." He noted it would help insure "that the nation's hardest hit communities have access to the financing needed to stimulate economic recovery." Genesee Co-op FCU, $9.5 million asset CDCU in Rochester, N.Y., was also among the first round to close on CDCI funds. "CDCI secondary capital is making it possible for our community development credit union to grow," said CEO Melissa Marquez. "Without this investment, Genesee Co-op FCU was trying to shed deposits, making it more difficult to lend since our loans-to-shares were already at 80%. The $300,000 we received in CDCI secondary capital enables us to serve more members and reach out to other underserved neighborhoods in our community. We can increase our deposits and make affordable loans because our net worth is stronger as a result of this infusion of secondary capital." The federation represents more than 230 CDCUs nationwide. It and others in the CDFI movement worked with the Treasury Department on developing the CDCI program, which launched in February. Since then, the federation has provided technical assistance and support to more than 100 credit unions applying for CDFI certification and CDCI funding. It also worked with the NCUA, the CDFI Fund and the Treasury Department to structure investments to generate the most impact for CDCUs and their communities. For more information about the Treasury's announcement, see related story, "Treasury announces new $570M round of CDCI funds" in News Now's Washington section. For an unofficial list of CDCI recipients on the federation's website, use the link.

Phish attacks vs.CUs at lowest level says report

 Permanent link
BEDFORD, Mass. (10/1/10)--Phishing attacks against U.S. credit unions dipped during August to their lowest level, although phishing attacks overall rose to 17,935 attacks from July's 16,756, says a new report for August. RSA's Online Fraud Report, released monthly by the Bedford, Mass. firm, reported that phishing attacks launched worldwide in August increased 7% from July, the fourth highest spike since August 2009, when the total was 16,164 attacks. Credit unions suffered just 3% of the attacks, a three percentage point drop from July and a significant plunge from 24% of attacks recorded by the firm in August 2009. They slipped from double digits recorded through most of 2009, into single digits in March 2010, when they accounted for 4% of the phish targets. Credit unions have been between 4% and 6% of attacks the past six months. Other financial institutions saw attacks against their brands increase. For the sixth consecutive month, nationwide U.S. banks climbed 1%--they were targeted in 65% of attacks recorded by RSA in August. Regional U.S. banks climbed 2% to comprise 32% of the attacks. A year ago national banks had only 31% of the attacks, and regional banks accounted for 45% of the phish targets. RSA said the bulk of the August increase in overall phishing resulted from attacks targeting a handful of financial institutions. Phishers prefer to focus their effort on a targeted group rather than spread their attacks across the board, said RSA's report. The number of brands attacked in August totaled 216, compared with July's 217 and June's 216. The number of brands attacked less than five times in August totaled 122, a 7% increase from July, said the report. Sixty percent of attacks in August were hosted in the U.S. The report also provided examples of information recently stolen by cyber thieves. It said the line between use of consumer and enterprise computers is blurring, and that trend is introducing more challenges for those trying to protect information. Use the resource link for more details.

Past NASCUS chairman Reynolds receives Pierre Jay Award

 Permanent link
SAN ANTONIO (10/1/10)--George Reynolds, past National Association of State Credit Union Supervisors (NASCUS) chairman and retired state regulator from Georgia, is the 2010 NASCUS Pierre Jay Award recipient. Reynolds was honored with the award Thursday during the NASCUS State System Summit. Recipients of the award best demonstrate outstanding service, leadership and commitment to NASCUS and the dual-chartering system. The Pierre Jay Award, first awarded in 1997, is named after the first Commissioner of Banks in Massachusetts. After a 34-year career with the Georgia Department of Banking and Finance, Reynolds retired in May as the senior deputy commissioner of banking. Reynolds served as NASCUS chairman, a National Institute of State Credit Union Examination trustee and an active participant in the NASCUS Accreditation Program. During his chairmanship, Reynolds was instrumental in developing the first regional interstate branching agreement and advancing many NASCUS strategic initiatives, NASCUS said. He also testified on behalf of NASCUS and state regulators several times before the House Financial Services Committee and Senate Banking, Housing and Urban Affairs Committee. “George exemplifies the meaning of the Pierre Jay Award, and I can't think of anyone more deserving,” said NASCUS Chairman Tom Candon (Vermont). “His contributions to NASCUS have clearly strengthened this organization.” Last year, NASCUS awarded the Pierre Jay to Catherine Tierney, president/CEO of Community First CU, Appleton, Wis.

CU System briefs (09/30/2010)

 Permanent link
* HARRISBURG, Pa. (10/1/10)--U.S. Rep. Charlie Dent (R-Pa.) met with Pennsylvania credit union leaders at an event hosted by First Commonwealth FCU, Bethlehem, according to the Pennsylvania Credit Union Association (PCUA) in its newsletter, Life is a Highway (Sept. 29). The group discussed a variety of credit union and consumer issues. Pictured from left are: Jo Ann Broderick, president/CEO at First Commonwealth FCU; John Cathers, vice president sales and service; Dent; Alan Musselman, chief financial officer; Janet Weinhofer, chief operating officer; and John Kilduff, PCUA vice president, credit union services. (Photo provided by the Pennsylvania Credit Union Association) ... * SPRINGFIELD, Mass. (10/1/10)--The former president of Western Mass. Electric Co. (WMECO) CU pleaded guilty Tuesday to stealing $225,000 from the $33.8-million asset, Springfield-based credit union by falsifying expense records (Associated Press via Boston Herald Sept. 29). Robert Koss was charged with embezzlement and filing a false tax return while running the credit union. As part of a plea bargain, Koss will pay restitution. Sentencing is set for Jan. 21 in the federal court. Koss retired from the credit union in 2006 ... * DULUTH, Ga. (10/1/10)--Georgia Central CU is hosting its fourth annual ALM Conference Nov. 2, with experts in investment and asset-liability providing information about asset-liability modeling tools. Cory Johnston, senior vice president and chief investment officer for the corporate credit union, said the event will enhance the "ability to interpret ALM reports and communicate more effectively with regulators, boards of directors and asset-liability committees." "This year we are bringing back a regulatory perspective to the agenda. Credit unions clearly benefit from knowing what their examiners will be looking for when their interest-rate-risk reporting is reviewed, so Lisa Boylen from First Carolina Corporate will be on hand to talk attendees through how to prepare," Johnston said. Sessions include strategies in the current low-interest rate environment, to how to develop sound modeling assumptions, to recent system upgrades on services provided by Georgia Central ... * ATLANTA (10/1/10)--Georgia's Own CU President/CEO Charlotte S. Ayers will retire at the end of the year, after 11 years at the helm and 41 years with the Atlanta-based credit union. She is credited with transforming the 76-year-old financial institution from $600 million in 1999 to $1.5 billion assets today. Her tenure saw membership increase to 160,000 from 79,000 and the credit union's service extend to all of metro Atlanta, and parts of Savannah and Augusta. Her retirement is part of a transition process she initiated in 2008 to ensure the credit union has strong leadership. David Preter, previously executive vice president, of the credit union, has been named president/CEO (The Weekly Sept. 20) ...

Senate candidate in Ohio MBL is a no-brainer

 Permanent link
COLUMBUS, Ohio (10/1/10)--Lee Fisher, Ohio Lt. Gov. and U.S. Senate candidate, thanked the state’s credit unions for their support, for “doing what [they] do,” and pledged to support credit unions’ increased lending to small businesses, during a meeting with credit union leaders, hosted by the Ohio Credit Union League.
Ohio credit union leaders met with Lt. Gov. and U.S. Senate candidate Lee Fisher (center), who hopes to champion credit unions if elected to the upper chamber. (Photo provided by the Ohio Credit Union League)
Fisher said he is committed to not only support credit unions if elected to the Senate, but also to be a champion of credit union causes. As a champion, he told the league, he will work to get others to support credit union issues (eLumination Newsletter Sept. 22). Fisher told the league he remains convinced that the basis of the economic recovery lies in helping small businesses, and that increased member business lending (MBL) authority for credit unions is a “no-brainer” and overdue. Raising the MBL cap to 27% from 12.25% would be a “good start,” but Fisher said he would like to see the cap removed entirely. As a former employee of a not-for-profit organization, Fisher said he understands the importance of credit unions’ tax exemption, and said that it was deserved and should be maintained.

CUs in Southeast N.C. close in record rains

 Permanent link
GREENSBORO, N.C. (10/1/10)--Record rainfalls closed several credit unions in southeast North Carolina early Wednesday and Thursday, according to the North Carolina Credit Union League. No damage was reported through midday Thursday from the credit unions.
Carolina Beach, N.C., residents walk down a flooded street early Thursday morning amid storms that produced a record 20 inches of rain in some areas. The storm forced some credit unions to close early Wednesday and Thursday. (Photo provided by the North Carolina Credit Union League courtesy of the Wilmington Star-News)
The rainfall broke records in Wilmington dating back to Hurricane Floyd 11 years ago, said the league. Wilmington and New Hanover County were in the bull's-eye of the rainfall, receiving more than 20 inches of rain from Sunday through early Thursday (Weekly Update Sept. 30). Most of eastern North Carolina received more than five inches of rain, while many areas near the coast saw more than 10 inches. "For the most part, major roads are OK; however, it's the side roads that are the concern," East Coast CU President/CEO Lisa Pope told the league. East Coast, located in Wilmington, announced it would close at 1 p.m. Thursday. Some credit unions in the area were also closed early Wednesday afternoon during the height of the storm. Schools throughout most of eastern North Carolina also were closed or delayed. Many businesses curtailed their business hours. Even the Battleship USS North Carolina in downtown Wilmington was forced to close by high water levels during high tide Thursday afternoon, the league said. Greensboro, where the league is located, picked up more than four inches of rain. By Thursday afternoon rain began to diminish but a new problem, high winds already at 50 mph, threatened to uproot trees and cause power outages. "It is raining hard now and the wind is really blowing, so who knows what is to come," reported Donna Dash, branch manager of Greenville-based Welcome CU. She told the league that some streets and county roads were flooding throughout Pitt County. The heavy rainfall is expected to end today. Some flooding is expected. Some of the areas hit by the flooding had their driest September on record with drought conditions through August and September--until the rain began to fall Sunday.