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Perimeter Most malware attacks originate in U.S.

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MILFORD, Conn. (9/5/12)--A report from CUNA Strategic Services provider Perimeter E-Security puts the kibosh on the commonly held belief that most malicious software, or malware, attacks come from overseas.

During the first six months of 2012, more than half (55.6%) of  all attacks and security threats originated in the U.S., said the report from the Milford, Conn.-based company, which provides security services to credit unions and other financial institutions.

The report indicates that the number of security incidents among its 861 financial institution clients increased steadily from January to May, with a slight decline recorded in June. During the reporting period, 1,619 likely and confirmed compromises were found, with about 56% of Perimeter's clients reporting at least one security incident. Perimeter E-Security suggested that the attacks and threats are more likely to take place in spring, rather than winter (American Banker Sept. 4)

The report attributed two reasons for the trend in U.S. generated threats: Most of its clients block traffic to and from non-U.S. internet service providers, and nearly all the financial institutions under scrutiny are based in the U.S.

Most of the security threats involved Trojan-related malware infections.

Perimeter E-Security and CSS will conduct a webinar Sept. 18 on E-mail Security and Credit Unions: The Ins and Outs of E-mail Encryption. For more information, use the link.

Survey In 20 years half of todays CUs may disappear

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WASHINGTON (9/5/12)--What will the credit union movement look like in 20 years? According to one analysis of growth trends over the past five years, the credit unions of 2032 could look "remarkably different" than today, with half of today's credit unions disappearing.

A review of asset, member and branch trends in credit unions from 2007 through 2012 points to a massive shift with serious strategic implications, according to marketing strategy specialists at (Sept. 4). The site specializes in marketing strategies for banks and credit unions.

Among the trends it noted in its credit union outlook from the past five years:

  • Asset growth. Credit union assets have increased to more than $1 trillion today from nearly $761 billion in 2007.  Today, 194 credit unions having more than $1 billion in assets, up 57% from 123 in 2007.  The top 100 asset credit unions have 38% of all assets in the industry as of 2012.
  • Number of credit unions. Credit unions' numbers have dropped 14% since 2007. Then, 8,332 credit unions existed, with 85% of those having less than $100 million in assets. In 2012, there are 7,165 credit unions, with 79.6% having assets totaling less than $100 million. The industry is losing about 20 credit unions per month, the site said.
  • Branches.  In 2012, for the first time ever, the number of branches declined, with 27 fewer than last year, said the study.  In 2007, credit union branches totaled 20,694, compared with 21,406 in 2012. Last year, credit unions had 21,433 branches.  Although branch growth is generally flat, the top 100 asset credit unions added 552 of the 712 new branches reported in the past five years.
  • Membership.  Membership in credit unions rose to 93.7 million in 2012 from 88.5 million in 2007, or 5.87% over five years. The top 100 asset credit unions in 2012 added 1.3 million new members, or 84.4% of all new members in the entire credit union industry.  The membership gains at the top 100 are offset for the most part by collective membership losses realized by the rest, said
  • Small credit unions. Credit unions with less than $100 million in assets have lost $5 billion in assets and nearly six million members the past five years. Today 80% of all credit unions are in this asset category, down from 85% five years ago.
What do these trends say for the future? The site says if growth continues, there would be 1,218 credit unions in 2032 with assets of $1 billion or more--or 31.3% of all credit unions compared with today's 2.7%. It also predicts the industry's assets would double to $2.2 trillion if the 4% annual growth rate continues and that membership growth will continue to be the biggest challenge credit unions face.

To view the report, use the link.

Hudson Valley hearing held on mortgage recording tax

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ALBANY, N.Y. (9/5/12)--Oral arguments in Hudson Valley FCU's legal challenge against New York state's mortgage recording tax  (MRT) were made Tuesday before the Court of Appeals of the State of New York--the state's highest court.

Attending the hearing on behalf of the Credit Union National Association (CUNA) and the Credit Union Association of New York (CUANY) were CUANY President/CEO William Mellin, CUANY General Counsel Mike Lanotte and CUANY Associate General Counsel Henry Meier.

Eli Mattioli, a partner in K&L Gates LLP, a law firm representing the Poughkeepsie, N.Y.-based credit union, emphasized before the court that the language of the Federal Credit Union Act and Supreme Court precedent exempt federal credit unions from paying the mortgage recording tax.  

CUNA, CUANY, the National Association of Federal Credit Unions, and the Justice Department filed amicus briefs in support of Hudson Valley.

A lower court had ruled that the credit union was not exempt from paying the MRT and the credit union appealed.

The state stuck to its argument that New York state law is not a property tax and therefore is not a tax that's forbidden by the Federal Credit Union Act, Meier told News Now.

The court has 30 to 60 days to render its decision in the appeal, said Meier. A summary of the case is live on the court's website. Use the link and scroll to Hudson Valley FCU v. New York State Department of Taxation and Finance.

Also, a webcast of the arguments will be made available on the court's oral argument archives on its website after next Monday. Use the link, then access "oral argument review" under "Live Oral Arguments Webcast" to the right of the home page.

Trunzo new president of CUNA Mutual subsidiary

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MADISON, Wis. (9/5/12)--Robert N. Trunzo has been promoted to president of CMFG Life Insurance Co. at CUNA Mutual Group, a role in which he is responsible for the products, distribution and service of the company's U.S. credit union businesses as well as its 401(k) business.

UNA Mutual Group's Asset Accumulation and Retirement Services businesses, along with the company's Information Technology area, now report to Trunzo. With this promotion, Trunzo is responsible for nearly 3,000 of the company's 4,500 employees and about $2 billion of CUNA Mutual Group's annual revenues.

His promotion follows a board of directors meeting in which the board sought to create a more effective, efficient and aligned organization after the departure last month of former Executive Vice President Kenn LaLonde, who left to become chief executive of another company. 

"Since joining the company in 2005, Bob has built a strong leadership team and improved the products and services we deliver to credit unions and their members," said Jeff Post, president/CEO of CUNA Mutual Holding Co., the parent of CMFG Life. "Bob is well-suited to take on additional responsibilities to help us continue this momentum in our core businesses."

Trunzo continues to report to Post. As part of the organizational change, Mike Connealy, president/CEO of ProAg, CUNA Mutual Group's crop insurance subsidiary, now reports to Post as well.

Trunzo's priorities are focused on the top three needs identified by credit unions: Lending, compliance and income.

"The credit union system has momentum. Member growth, improving [return on assets] and stronger capital have created a growing sense the system has weathered the economic storm," Trunzo said. "The focus of the credit union business at CUNA Mutual Group is to help continue this momentum and prove to consumers that switching to a credit union was the right decision."

Under Trunzo's leadership, the company has added and expanded programs to support credit union lending, including the development of Smartphone Loans. In 2012, CUNA Mutual Group is on pace to generate more than $1 billion in loan volume for credit unions.

Also, the company is expanding its consumer business to help credit unions grow income and membership under the newly launched TruStage  brand, with which CUNA Mutual Group aims to grow its consumer insurance and investment business by expanding its awareness with the more than 95 million credit union members. The new brand also seeks to introduce non-members to credit unions.

Trunzo has held a variety of public and private sector leadership positions during his career. Previously at CUNA Mutual Group, he was executive vice president and chief operating officer.

He joined the company in 2005 after serving in a variety of insurance leadership roles. He also served as Secretary of Commerce under former Wisconsin Gov. and current U.S. Senate candidate Tommy Thompson. In addition, Trunzo served as chairman of Southeast Wisconsin Professional Baseball Park District, the board which oversaw the design, financing and construction of Miller Park, home of the Milwaukee Brewers.

CU System briefs (09/04/2012)

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  • HARRISBURG, Pa. (9/5/12)--Leaders from three Pittsburgh area credit unions attended a meet and greet hosted by WEST-AIRCOMM FCU at its Moon Township branch for State Senate candidate D. Raja, a Republican candidate for the 37th District. Leaders from WEST-AIRCOMM FCU, Pittsburgh Central FCU and PA HealthCare CU discussed credit union issues with Raja, an entrepreneur who is supportive of credit union lending to small businesses, said the Pennsylvania Credit Union Association (Life is a Highway Aug. 29). Raja also said he favored the continued tax exempt status of credit unions. He faces State Rep. Matt Smith in November. From left are:  Lynn Stephenson, vice president of lending at WEST-AIRCOMM; Paul Fero, CEO, PA HealthCare CU; Patty Morrissey, CEO, Pittsburgh Centeral FCU; Ray Brunner, CEO, WEST-AIRCOMM; Raja; and WEST_AIRCOMM staffer Vice President Margie Ruffalo, Moon Branch ManagerJoanne Lindner and Beaver Branch Manager Scott Brunner. (Photo provided by the Pennsylvania Credit Union Association) …
  • WASHINGTON and MADISON, Wis. (9/5/12)--Susan Parisi has been promoted to senior vice president and associate general counsel of the Credit Union National Association (CUNA), announced CUNA General Counsel Eric Richard. Parisi had been vice president and associate general counsel in charge of Legal-Madison. She has been with CUNA for 25 years and took the reins of the Madison, Wis., legal office last year …

Top 10 INews NowI stories for August (09/04/2012)

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MADISON, Wis. (9/5/12)--A story about how consumers were moving money out of banks and into credit unions long before Occupy Wall Street protests and Bank Transfer Day was the most read News Now article in August.

The top 10 articles in August included:

10. New E-Scan highlights top 10 trends for CUs

MADISON, Wis. (8/3/12)--The Credit Union National Association has released its 2012-2013 Credit Union Environmental Scan, a high-level view of the credit union competitive landscape that credit unions can use as strategic planning tool.

9. Bank fees survey: Fees are rising

FOSTER CITY, Calif. (8/15/12)--"The fee environment worsened for bank customers in virtually every way possible in the first half of the year," according to a new survey from that says banks' fees are rising ( Aug. 14).

8. CUNA has concerns about mortgage servicer proposal

WASHINGTON (8/13/12)--The Credit Union National Association has some serious concerns with the possible regulatory burden and added compliance costs of the proposed regulations for mortgage servicers that the Consumer Financial Protection Bureau issued on Friday.

7. CFPB proposes more rules on mortgage servicers

WASHINGTON (8/10/12)--Credit unions and other mortgage servicers would have to provide clearer monthly statements and would have to take additional steps before foreclosing on a property, under proposed regulations unveiled today by the Consumer Financial Protection Bureau.

6. Employee kidnapped, taken to CU for robbery

FORT WAYNE, Ind. (8/29/12)--A Fort Wayne, Ind., credit union employee was allegedly kidnapped from her home Monday evening and taken to the credit union, where suspects forced her to provide them access to cash before leaving the scene with her car.

5. Study: More debit card usage, more overdrafts likely

LAKE FOREST, Ill. Wis. (8/16/12)--A recent study indicates that debit card use is growing. With that, financial institutions can expect an increased possibility consumers will overdraft their checking accounts, thanks to a "financial tsunami" enacted in 2003, the study said.

4. NEW: CFPB issues final rule on remittance disclosures

WASHINGTON (8/7/12)--The Consumer Financial Protection Bureau (CFPB) just released its long-anticipated rule implementing provisions under the Dodd-Frank Wall Street Reform and Consumer Protection Act that require remittance transfer providers to disclose fees upfront, as well as the exchange rate and the amount to be received by the recipient.

3. Police shoot man who took 12 hostages at CU

LAKEWOOD, Wash. (8/28/12)--Police officers shot and critically wounded a man as he attempted to flee after he held a dozen people hostage, including his estranged wife, at gunpoint inside a Washington state credit union Saturday.

2. CFPB could require option of no-point, no-fee mortgages

WASHINGTON (8/20/12)--After floating the concepts earlier this year, the Consumer Financial Protection Bureau last Friday took the next step and issued a 369-page proposal on new loan origination standards and compensation rules for mortgage loan officers.

1. Study: Deposits at large CUs outpacing banks

CHARLOTTESVILLE, Va. (8/6/12)--Consumers were moving money out of banks and into credit unions long before Occupy Wall Street protests and Bank Transfer Day, according to a study by financial research firm SNL Financial.

July MCUE CU earnings and loan balances rise

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MADISON, Wis. (9/5/12)--Credit unions nationwide collectively saw their earnings and loan balances rise in July, and those trends should continue this year, according to a Credit Union National Association (CUNA) economist's analysis of CUNA's monthly sample of credit unions for July.

"The credit union movement's capital-to-asset ratio jumped to 10.3% in July from 10.1% in June due to capital growing much faster than assets," Steve Rick, CUNA senior economist, told News Now. "Capital levels rose over 1% in July from stronger earnings, while assets fell 0.7%. In July, credit union annualized return on assets came in strong at 1.28%, up from 0.82% for the first seven months of the year.  Earnings keep rising as provision for loan losses keep falling," he said.

"Higher earnings will allow credit unions to grow their assets faster while maintaining a given capital-to-asset ratio," Rick added.

The total dollar amount of capital for credit unions is $105 billion.

Credit union loans outstanding grew 0.4% in July 2012, the same as June. Credit union loans totaled $597.8 billion in July, compared with $579 billion in July 2011. Unsecured personal loans led loan growth with a 1.2% increase, followed by new-auto loans (1%), andadjustable-rate mortgages and used-auto loans, which each rose 0.9%. Credit card loans grew 0.7%, while home-equity loans and fixed-rate mortgages declined 0.3% and 0.5%, respectively.

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"Credit quality has improved significantly over the last year," Rick said. "The credit union delinquent loans-to-total-loans ratio came in at 1.29% in July, down from 1.59% in July 2011. This ratio is expected to fall further as the economy recovers and loan growth picks up. We expect credit union loan balances to grow 3% in 2012 and 5% in 2013.

"Faster loan growth will help counter the recent reduction in credit unions' net interest margins," Rick added.       

Credit union savings balances fell 0.9% in July, compared with a 0.8% increase in June. Credit union savings in July totaled $880.7 billion--or $50 billion more than the $830.7 billion in July 2011. Money market accounts led savings growth with a 1% gain. On the decline were one-year certificates (-0.2%), individual retirement accounts (-0.4%), and regular shares (-0.7%). Share drafts fell 6.4%.  

Regarding liquidity, credit unions' loan-to-savings ratio increased slightly in July to 68% from 67% in June.

Spencer named MCUL board chairman

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LANSING, Mich. (9/5/12)--Howard Spencer, chairman of Northland Area FCU's board of directors, has also been named board chairman for the Michigan Credit Union League (MCUL).

The Oscoda, Mich.-based Northland and MCUL & Affiliates said Spencer accepted his new post during the MCUL Annual Convention and Exposition, in Traverse City, Mich.  

"MCUL made an excellent choice," Northland CEO Pete Dzuris said. "Howard has an unwavering belief in the credit union cause and its ability to help hard-hit communities rebuild. He is a tremendous advocate for the people of Michigan" (Michigan Monitor Sept.4).

Personal achievements include a previous appointment as board chair for the National Association of Credit Union Chairmen and inclusion in the MCUL Hall of Fame.

"Howard Spencer has a long and distinguished record of service and brings decades of experience and commitment to the credit union movement," said MCUL CEO David Adams, who also thanked outgoing board Chair George Isola for his work.

"Credit unions provide a real service to the communities of Michigan," Spencer said. "And I believe in having a strong trade association that stands firm for the rights of our members. It's important for credit unions to engage politically with the elected officials who make the rules for all of us. Northland's been standing tall for its members for years, and I'm proud to be a part of MCUL on behalf of all Michigan credit union members."

NYSE chief Small biz lacking capital

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MADISON, Wis. (9/5/12)--More than 80% of U.S. small business leaders said that lack of access to capital, economic uncertainty and other burdens are having a significant impact on their ability to create jobs, Duncan L. Niederauer, NYSE Euronext chief executive officer, said in a report released last week.

Two-thirds of U.S. small business owners say they may not add jobs in 2013, with some anticipating reductions in their work force, said the "NYSE Euronext 2012 CEO Report."

About 53% of U.S. small business owners surveyed believe that reducing tax rates on businesses would be the most effective solution to accelerate the growth of permanent jobs, the report said.

When asked about policy actions that would accelerate the growth of permanent jobs, U.S. small business owners suggested increasing funding for programs targeted to small businesses, providing tax credits for hiring workers and offering incentives for the repatriation of jobs. 

The 2012 NYSE Euronext CEO Report, conducted this past July by ORC International and presented in cooperation with FOX Business Network, reflects the insights of 340 CEOs from companies listed on NYSE Euronext markets from 26 countries and 285 U.S. small-business owners.

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%. 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.

N.C. CU staff visit Mexicos Caja Yanga

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RALEIGH, N.C. (9/5/12)--Credit union staff from North Carolina visited Aug. 19-25 with representatives of Mexico's Caja Yanga to share marketing best practices. World Council of Credit Unions (WOCCU) coordinated the visit to the 71,000-member credit union, located in Veracruz, a state in Southern Mexico.

Members of the Semilla Cooperativa group in the village of Amplacion Pozorron, Mexico, gather to make deposits and loan payments. Javier Contreras (left) of Caja Yanga processes the member transactions. The North Carolina Credit Union League and the World Council of Credit Unions' representatives accompanied Contreras as part of their week-long visit with the credit union in Mexico.  (Photo provided by the North Carolina Credit Union League)

Ashley Ruffin, senior vice president of marketing for Local Government FCU in Raleigh, N.C., and Jeff Hardin, director of communications for the North Carolina Credit Union League, met with representatives of the board of directors, senior management and marketing teams of Caja Yanga throughout the week. Joshua Fetting, WOCCU international partnerships officer, joined Ruffin and Hardin for the week's events.

Caja Yanga has made great strides in marketing by hiring a group of graphic designers and marketing staff, Ruffin said. "Previously, the credit union outsourced quite a bit of its design work, but more recently it has brought all that work in-house," he explained. "The quality and consistency of its materials made an immediate leap forward by doing so, and its work is comparable to many large credit unions in the U.S."

Caja Yanga operates seven branches in the western part of Veracruz state. The economy there is largely farm-based, with coffee and sugar cane two of the major crops. Several small-to-medium sized cities contain a growing professional class of workers who increasingly rely on the credit union for services, the North Carolina league said.  

For more remote farming communities, accessing financial services can be difficult due to lack of transportation and as a result, many people in rural areas have traditionally been unbanked. To help bridge that gap, Caja Yanga employs the Semilla Cooperativa methodology that WOCCU developed several years ago.

Semilla Cooperativa--or "cooperative seed"--is a series of mostly small savings and lending circles located throughout the Caja Yanga service area. Once each month, a field officer from Caja Yanga travels to each Semilla Cooperativa group to accept deposits and loan payments. The U.S. visitors traveled to one such group during the week.

"The Semilla program looks a lot like the U.S. credit union movement did 100 years ago," said Hardin. "Members of these small groups know each other personally, and they come together each month and transact business. As such, there's transparency and a real accountability factor in play."

Although separated by language, the meetings between the U.S. and Mexican groups pointed out many similarities in service delivery and cooperative values. "The North Carolina League and Caja Yanga have been long-term partners with the World Council, and we are glad to see them collaborate and share techniques to achieve membership growth through targeted marketing and awareness campaigns," said WOCCU President/CEO Brian Branch.

Branch added that "exchanges such as this help World Council build the global credit union community."

The week of meetings may be the start of a series of visits between Caja Yanga and North Carolina credit unions. "These visits enrich North Carolina credit unions and help them to be more successful," said league President/CEO John Radebaugh. "As such, we are always open to these types of exchanges."

15 CU professionals designated International CUDEs

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MADISON, Wis. (9/5/12)--The fourth class of International Credit Union Development Education (I-CUDE) designees was recognized by the seven international Credit Union Development Educator (CUDE) programs and the World Council of Credit Unions (WOCCU) at the recent 2012 World Credit Union Conference in Gdańsk, Poland.

World Council of Credit Unions Director Scott Kennedy recognized International Credit Union Development Education designees at the 2012 World Credit Union Conference in Gdańsk, Poland. (Photo provided by National Credit Union Foundation)
Fifteen credit union professionals received the I-CUDE distinction. They include:

  • Sharon Angus-Crawshaw, North Wales CU, United Kingdom (U.K.);
  • Mercedes D. Castillo, VICTO National, Philippines;
  • Richard L. "Dick" Ensweiler, Texas Credit Union League, Farmers Branch, Texas;
  • Carlene Frimer,  United Communities CU, Canada;
  • Kathy Garner, Catalyst Corporate FCU, Duluth, Ga.;
  • Angela Hampson, Glasgow CU, U.K.;
  • Mary Henderson, Glasgow CU, U.K.;
  • Terri Hendrix, S.C. Telco FCU, Greenville, S.C.;
  • Alan Hignett,  Hull & East Yorkshire CU, U.K.;
  • Robert Kelly,  NHS CU, U.K.;
  • Barbara Main, Main Communications, Madison, Wis.;
  • Jill Nowacki,  Maps CU, Salem, Ore.;
  • Kelly V. Schermerhorn, CES CU, Mount Vernon, Ohio;
  • Edwina Sykes, No. 1 CopperPot CU/North Yorkshire CU, U.K.; and
  • Kevin Waters, Staffordshire CU, U.K.
The Development Education program encourages an international exchange of ideas and opportunities around credit union philosophy. The seven international CUDE programs offer their development educators the opportunity to achieve an I-CUDE designation.

To achieve this distinction, development educators must:

  • Complete their local Development Education (DE) program;
  • Complete an independent studies project appropriate to the learning objectives of the DE program;
  • Participate in an international program, conference or training opportunity. This may include but is not limited to an international DE program, an international immersion program or an international volunteer assignment; and 
  • Attend WOCCU's World Credit Union Conference or a regional confederation conference.
The seven international DE programs are based in Asia, Australia, the Caribbean, Europe, Great Britain, the Philippines and the U.S. Those holding local DE certification who are interested in applying for international certification should contact local program leaders, including:

  • Asia--Ranjith Hettiarachchi, CEO, Association of Asian Confederation of Credit Unions, Thailand;
  • Australia--Peter Mason, Credit Union Foundation Australia;
  • Caribbean--Melvin Edwards, CEO, Caribbean Confederation of Credit Unions, West Indies;
  • Europe--Marlene Shiels, chief executive, Capital Credit Union Ltd., Scotland;
  • Great Britain--Mary Henderson, Glasgow CU, U.K.;
  • Philippines--Mercedes D. Castillo, VICTO National, Philippines; and
  • U.S.-- Christopher Morris or Lois Kitsch, National Credit Union Foundation.