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Filed on September 3, 2009, published the first business day after.
- CUNA, NAFCU put forward unified corporate CU plan
- Judge may not order trial in Bellco UBIT case
- Obama loan mod program to be subject of hearing
- CU comment sought on Reg Z closed-end mortgage rules
- Inside Washington
- TJX Cos. settles data breach lawsuit with CUs
- N.Y. judge rules ‘free speech’ no shield in lawsuit
- CUNA calls for board nominations
- CNN, TheStreet.com, MarketWatch feature Hampel on economy
- It’s Nat'l. Preparedness Month. Where’s disaster plan?
- CUNA closed Monday for holiday, no News Now
- USA Today notes CU debit card program
- CUs get more press on state employee assistance
- Minnesota foundation elects board, officers
- Mission FCU helps schools bridge funds gap
- CU System briefs
- Market News
- News of the Competition
- Security expert: How to safely discard electronics
- SW Corporate has new Member Capture campaigns
- Products and Services briefs
CUNA, NAFCU put forward unified corporate CU plan
WASHINGTON (9/4/09)-- A unified credit union view of the future of the corporate credit union system is the product of a joint task force appointed by the chairs of the Credit Union National Association (CUNA) and the National Association of Federal Credit Unions (NAFCU).
The task force's detailed recommendations cover the major areas of the corporate credit union system: services, capital, structure, corporate governance, federal regulatory oversight and insurance of shares and deposits in corporates.
The task force's recommendations are offered as a comprehensive plan. The task force recognized that the suggestions being made represent a departure from the current corporate system. The proposed system implied by the task force's suggestions represents a future corporate system that the task force believes that natural person credit unions would support and use.
Some of the key findings of the joint CUNA-NAFCU task force include:
- Services of corporates should be limited to a defined set, including payments and settlements, liquidity and short-term investments. Further, longer-term, on-balance sheet investments should not be offered by corporates;
- Contributed capital should be required for membership and service use by credit unions; corporates will have to present a sufficiently compelling business case covering both the value of services provided and strong risk control;
- With limits on risk-taking, competition among corporates will be driven by efficiency, placing a premium on economies of scale and thus creating substantial pressures for consolidation;
- Insurance coverage for natural-person credit union (NPCU) shares and deposits in corporate credit unions must be limited to the maximum coverage for personal deposits and shares in the NPCUs;
- National Credit Union Administration (NCUA) oversight of corporates must be improved, with adequate qualified staff with special knowledge of the complex operations of corporate credit unions;
- Corporate board members must have sufficient expertise to govern their corporate consistent with the powers of the corporate credit union.
The task force delivered its views Thursday in a report to the NCUA board, and effort intended to maximize credit unions' impact on the NCUA's rulemaking process concerning corporate credit unions.
"The circumstances of the current corporate credit union system have had an enormous impact on the credit union industry, and we want to make sure going forward that credit unions have as much input as possible on how to best enhance the system for the future," said NAFCU Chair Brad Beal.
"We undertook this as a collaborative effort because we wanted to develop recommendations that were comprehensive and strategic. We strived to address the challenges of balancing risk and the needs of natural person and corporate credit unions in our recommendations," said CUNA Chair Kris Mecham.
The task force's recommendations, CUNA and NAFCU said in a release, are a departure from the current corporate system and represent a future corporate system that the task force believes that natural person credit unions would support and use
Use the resource link below to access the complete report.
Judge may not order trial in Bellco UBIT case
WASHINGTON (9/4/09)--Judge Christine Arguello asked both parties in the Bellco Credit Union V. U.S. unrelated business income tax case to reconsider their requests for a jury trial.
During oral arguments late last week in Denver, Arguello asked several questions of both sides during a two-hour session. The oral argument portion of the trial followed the filing of separate motions for summary judgment by both Bellco and the U.S. Department of Justice.
Bellco has challenged the assessment of unrelated business income tax (UBIT) on three of its products, and is seeking a refund of $199,293 that was paid on products such as accidental death and disability insurance (AD&D), credit life and disability insurance, and financial services such as investments in 2000, 2001 and 2003, plus statutory interest.
One disputed issue is whether the sale of credit insurance and investment products are substantially related to the granting of loans and the promotion of thrift, and whether income from the sale of AD&D qualified as a royalty not subject to UBIT. The government has asserted that neither credit insurance nor financial services were related to the exercise or performance of Bellco's tax-exempt purposes.
The government has also sought to exclude income from the sale of AD&D policies from being counted as royalty income.
Arguello said she may ask for further briefings on the issues surrounding the case before making her final decision.
The trial, if approved, would take place in December.
Obama loan mod program to be subject of hearing
WASHINGTON (9/4/09)—The House Financial Services subcommittee on housing and community opportunity will be turning the spotlight on the Obama administration's Making Home Affordable (MHA) Program later this month.
In a scheduled Sept. 9 hearing the subcommittee chaired by Rep. Maxine Waters (D-Calif.) will take a look at the outcomes for homeowners eligible for the program and what are the obstacles to the program's success.
The Making Homes Affordable Program was launched with the intention of easing the crush of home mortgage disclosures by encouraging lenders to execute more loan modifications for responsible borrowers.
However, the program has been criticized for not reaching enough troubled homeowners. For instance, a Sept. 1 article in CNN's Politics.com said that now, six months into the program, only 6% of four million homeowners identified as eligible have gotten help. The article says borrowers have expressed frustrations that some lenders just give them a runaround.
To help support credit union participation in the loan modification program, the National Credit Union Administration (NCUA) in June issued an interim final rule allowing credit unions to modify second mortgage loans to match the terms of modified first mortgages.
Although the Treasury had recently added a second lien program to its MHA, many credit unions could not participate due to an NCUA lending rule that imposed a 20-year maturity limit on second mortgage loans secured by the member-borrower's primary residence.
A witness list has not yet been made public for the subcommittee hearing.
CU comment sought on Reg Z closed-end mortgage rules
WASHINGTON (9/4/09)--The Credit Union National Association (CUNA) has issued a regulatory comment call on the Federal Reserve's proposal that will revise the disclosures that lenders must provide in connection with mortgage loans.
The proposal will require that Fed-published documents be given to consumers at the time of application and will revise the other current disclosures, which must be provided within three days after application, as well as three days before loan consummation. This information is intended to outline additional information about certain loan features, especially in connection with adjustable rate mortgages.
These changes, which would apply to disclosures for all closed-end credit transactions secured by real property, would also revise the annual percentage rate (APR) calculation to include most fees and settlement costs, many of which are currently excluded from the APR. The proposal will impose eligibility and disclosure requirements for credit insurance, debt cancellation, and debt suspension coverage.
In addition, the Fed would require lenders to notify borrowers 60 days before any changes to their monthly payments on adjustable-rate loans are made. The Fed currently rules require lenders to give consumers 25 days of advance notice.
Comments are due to CUNA by Dec. 10, and should be submitted to the Fed on Dec. 24.
To view the CUNA comment call, use the link.
Inside Washington
- WASHINGTON (9/4/09)--A hearing on the Securities and Exchange Commission's (SEC) handling of the Bernie Madoff fraud case has been scheduled for Sept. 10, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) announced Wednesday. The hearing will discuss a report released by an SEC inspector general Wednesday (American Banker Sept. 3). Dodd's committee plans to use the report to learn what went wrong in the SEC's oversight of the Madoff case, he said ...
- WASHINGTON (9/4/09)--Fannie Mae and Freddie Mac sent a letter this week to their regulator, the Federal Housing Finance Agency (FHFA), saying they object to several parts of a July 2 interim rule that requires them to submit all activities and products to FHFA for review (American Banker Sept. 3). The rule is ineffective and burdensome, the enterprises said. The rule also makes it difficult for the enterprises to help during a financial crisis. The letter signals one of the first times the enterprises have publicly contacted their regulator about an issue. Both were placed into conservatorship by FHFA last year ...
- WASHINGTON (9/4/09)--Members of the Federal Reserve Board's policymaking open market committee were split on whether to purchase mortgage-backed securities associated with adjustable-rate mortgages, according to minutes released this week from the Aug. 11-12 committee meeting. Some participants said the securities would be useful because they could reduce the large spreads between the adjustable-rate mortgages and yields on similar-duration Treasury securities. Others saw little benefit, given the small stock and limited issuance on fixed-rate mortgages. The committee also discussed reducing the pace at which the Fed buys Treasury securities, agency debt and agency mortgage-backed securities before the end of the asset purchase programs. Slowing the pace of the purchases could promote a smooth transition in markets, participants said. However, no decisions were made on purchasing mortgage-backed securities or tapering the pace at which the Fed buys Treasury securities ...
TJX Cos. settles data breach lawsuit with CUs
FRAMINGHAM, Mass. (9/4/09)--TJX Cos. has agreed to pay $525,000 to settle a lawsuit brought by two credit unions and two banks related to the huge data breach of its customers' information in 2005 and 2006.
The Framingham, Mass.-based company will reimburse HarborOne CU of Brockton, Mass., and Eugene, Ore.-based SELCO Community CU, as well as AmeriFirst Bank and Trustco Bank for part of the expenses they incurred related to the breach, TJX said in a press release Thursday.
The settlement agreement "will result in the dismissal of the putative financial institutions class action" and "all related litigation," TJX said.
The $525,000 reimbursement does not include attorneys' fees. It is part of $118 million that TJX had set aside during second quarter 2007 to cover costs related to the breach.
The settlement is the latest in a string of cases that have plagued the discount retailer for two and a half years. In June, TJX agreed to pay nearly $10 million to settle lawsuits filed by attorneys general in 41 states (ComputerWorld Sept. 3). In November 2007, it announced it would pay up to $40.9 million to Visa USA Inc. card issuers affected.
The breach forced thousands of credit unions and banks to reissue debit and credit cards for millions of member/customers whose information was compromised by the hacking. More than 45 million cards were compromised in what was at that time the largest data breach ever and one of the costliest. Since then breaches at Hannaford Bros. grocery chain and Heartland Payment Systems have exceeded that number of cards compromised.
Last week, a Miami man pleaded guilty to masterminding the attacks on TJX and other retailers, including Dave & Busters, BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. Albert Gonzalez, 28, faces between 15 and 25 years in prison (News Now Sept. 1).
TJX owns retail discount stores such as Marshalls and T.J. Maxx.
N.Y. judge rules ‘free speech’ no shield in lawsuit
NEW YORK (9/4/09)—In a rating agency case that may have broad implications, a U.S. District Court judge here rejected arguments by Moody's Investor Services Inc. and Standard & Poor's (S&P) that investors can't sue over deceptive ratings of private-placement notes because those ratings are protected by the First Amendment right of free speech.
In her decision, U.S. District Judge Shira Scheindlin declined to dismiss fraud charges brought by two investors, Abu Dhabi Commercial Bank and Kings County, Washington, against Moody's, S&P, and Morgan Stanley & Co. The ruling will force the three companies to respond to fraud charges in the class action suit that claims certain risks associated with securities backed by subprime mortgages were not exposed for investors.
The case could be of interest to credit unions because similar questions regarding rating agency responsibility and investors' right to sue the ratings agencies have circulated in the credit union movement regarding investments made by corporate credit unions.
"Although this court's decision is not technically binding on the myriad of similar cases currently pending against the ratings agencies, it likely will have some influence on other judges because the U.S. District Court for the Southern District of New York is influential in financial services law," assessed Michael Edwards, Credit Union National Association counsel for special projects.
"This case did not directly involve mortgage-backed securities per se, but the court's reasoning may be applicable to a variety of debt instruments rated by these companies. Because the National Credit Union Administration (NCUA) is the conservator of U.S. Central (FCU) and (Western Corporate FCU) WesCorp, NCUA may wish to examine this decision to analyze whether it opens any paths to recovery on behalf of the conserved corporates. Reaching any sort of conclusion, however, will take a lot of research and analysis," Edwards added.
Scheindlin did not rule on the merits of the lawsuit, which brings 32 counts of fraud against eight companies, but she did opine that free-speech rights cannot be used as a shield from lawsuits because the ratings firms opinions were not distributed generally to the public but rather to a select group of investors. She also noted that there is an unresolved question regarding whether the ratings agencies "genuinely or reasonably" believed that the ratings they assigned "were accurate and had a basis in fact."
CUNA calls for board nominations
WASHINGTON and MADISON, Wis. (9/4/09)--The Credit Union National Association (CUNA) is accepting nominations for its 2009-2010 Board of Directors in several district/classes.
They are:
- 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.
Leagues or credit unions eligible to run for an election will receive the Call for Nominations letter, which is being mailed today, or they can access the letter using the resource link.
To be an eligible credit union candidate for a CUNA Director position, the candidate 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.
Deadline for nominations and seconds is Oct. 16. 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 Oct. 23 and close on Dec. 18.
For more information, use the link.
CNN, TheStreet.com, MarketWatch feature Hampel on economy
NEW YORK and WASHINGTON (9/4/09)--Bill Hampel, chief economist for the Credit Union National Association, was quoted in three national publications regarding his perspectives on the economic recovery, the Federal Reserve's actions and the Federal Open Market Committee's (FOMC) August deliberations on the economy.
Several economists concur that the Fed, Congress and the Bush and Obama administrations should share the credit for steps taken to help end the recession, said CNN.com Thursday.
"The actions of the Fed and Treasury starting last October actually worked, regardless of how unpopular they were," Hampel told CNN.com. "It was messy. It was dirty. It required a lot of money. But they were successful in preventing the implosion of a lot of institutions."
The FOMC noted in its minutes and statement regarding its August meeting that it will keep its key interest rate at zero for "an extended period," said The Street.com Wednesday. If other factors remain relatively the same, that decision likely will result in an interest rate hike in the middle of 2010, Hampel told the publication.
"The Fed does a good job of being apolitical, but they're still in Washington, so I find it unlikely that they'll raise the fed funds rate until employment improves," Hampel said. "Don't expect the fed funds rate to increase till next summer."
And Hampel told MarketWatch Wednesday, "The bottom line is that until we see a demonstrable improvement in the labor market, they [the Fed] are not going to raise the fed funds rate."
He also told the publication that Fed officials were "less worried that they were too optimistic about a second-half recovery." Considering the high debt burden consumers are carrying, the recovery "will not be too much to write home about," he added.
On a related topic, Hampel told MarketWatch that deflation is unlikely to occur. However, the fact that federal officials are discussing it should indicate how remote the possibility is of inflation going up.
It’s Nat'l. Preparedness Month. Where’s disaster plan?
MADISON, Wis. (9/4/09)--September is National Preparedness Month, and the No.1 thing credit unions can do to prepare for a disaster is test their preparedness plans, according to the president/CEO of Agility Recovery Solutions.
"Most credit unions have a written plan in place for disaster recovery," Bob Boyd, president/CEO of Agility, told News Now. "But they really need to ask questions: What would happen if a piece of infrastructure didn't work? Does that plan help? Who will do what?"
To help credit unions with disaster planning, Agility is hosting several free webinars:
- Pandemic Planning--How to Prepare Your Business for the Upcoming Flu Season, Sept. 16 at 2 p.m.;
- Social Media--What Role Does It Play in Business Preparedness, Sept. 23 at 2 p.m.; and
- Creating a Culture of Preparedness, Sept. 30, 2 p.m.
Agility Recovery Solutions, a CUNA Strategic Service provider, also has partnered with the Federal Emergency Management Agency to encourage disaster preparedness.
Credit unions' apprehension about a possible H1N1, or swine flu, pandemic is increasing. However, most credit unions' disaster plans don't deal with swine flu. Boyd suggested credit unions prepare for a pandemic by cross-training staff and giving them the ability to work from home.
Credit unions won't hurt their business by preparing for swine flu. And while many credit unions may think that testing disaster plans is expensive, it doesn't have to be, Boyd added. "There are steps [credit unions] can take today," Boyd said. "If they don't do it now, they will be behind the gun, and that's when mistakes happen." Most credit unions find ways to improve each time they test a plan, he added.
The Massachusetts Credit Union League posted a message on its website encouraging credit unions to prepare for a possible epidemic.
"Whether the H1N1 flu virus will worsen with symptoms this fall or winter remains to be seen, but the Center for Disease Control reports that this is a new flu strain with little immunity amongst the citizenry," the league said. "As a result, at the very least, businesses should expect many more of their employees and members to come down with the flu this flu season."
Last week, a presidential advisory group of the nation's leading scientists and engineers released a report assessing the Obama Administration's preparations for this fall's expected resurgence of H1N1 flu and outlined key steps officials can take to minimize the disease's impact on the nation.
The report concluded that the H1N1 flu is unlikely to resemble the deadly flu pandemic of 1918-19. But in contrast to the benign version of swine flu that emerged in 1976, the report says the current strain "poses a serious health threat" to the nation.
The issue is not that the virus is more deadly than other flu strains, but rather that it is likely to infect more people than usual because it is new and few people have immunity. This means doctors' offices and hospitals could fill to capacity, the group said in a release.
Individuals should wash their hands frequently, and stay home from work when sick. "Workplaces could liberalize rules for absenteeism so employees don't feel pressured to come to work when sick," the group said.
Since it's hurricane season, credit unions and leagues also are preparing for potentially dangerous storms. The Texas Credit Union League (TCUL) added a storm tracker system with scrolling updates concerning weather developments on its website. Users can access storm preparation resources by clicking on a "Disaster Preparation" banner on the TCUL website.
Disaster recovery is also needed during power or phone outages, regardless of whether they are triggered by a natural disaster. Schools FCU, Los Angeles, recently experienced a phone outage, which prevented the credit union from accessing the Internet or its account database.
"The phone line went down on a Friday--payday--creating a potentially troublesome situation for our members who were likely to move thousands of dollars among their accounts," said Barbara Abraham, Schools FCU operations manager.
Although members could not conduct transactions at Schools' physical branches, they could make deposits and withdrawals through shared branching. While the phone line was being repaired, PSCU Financial helped credit union members conduct transactions through its call center and also helped staff maintain a transaction log.
"It is hard to forsee when a crisis will disrupt regular credit union workflow, but there is no need to reinvent the wheel in adverse scenarios to ensure effective and continuous service," said Peter Schmitt, PSCU Financial Services executive director.
The U.S. Small Business Administration (SBA) posted a message Tuesday on YouTube with Administrator Karen Mills reminding the public about National Preparedness Month and the effects of a disaster. She encouraged everyone to develop and implement preparedness plans.
"There's a tendency to think that a large-scale disaster is not going to happen ‘where I live,'" Mills said. "We should all realize that storms, floods, earthquakes, fires and man-made disasters can strike at any time and anywhere."
SBA's suggested disaster prep includes:
- An emergency response plan;
- Adequate insurance coverage;
- Copies of important records; and
- A disaster survival kit with a flashlight, portable radio, batteries, first-aid supplies, non-perishable food, bottled water, a basic tool kit, plastic sheeting and garbage bags, cash and a digital camera to take pictures of damage.
CUNA closed Monday for holiday, no News Now
WASHINGTON and MADISON, Wis. (9/4/09)--The Credit Union National Association's Washington, D.C., and Madison, Wis., offices will be closed Monday in observance of the Labor Day holiday.
News Now will not publish a Monday edition. It will resume regular publication on Tuesday.
USA Today notes CU debit card program
PALO ALTO, Calif. (9/4/09)--A credit union's debit card reward program was noted by USA Today Tuesday in an article about how debit-card issuers are instituting new reward programs as consumers use their debit cards more during the recession.
Addison Avenue FCU--a $2.375 billion asset credit union based in Palo Alto, Calif., primarily serving employees of high-tech companies--is offering new perks to members who use their debit cards a specified number of times, the nationwide newspaper said.
Addison started a checking account in July 2008 to pass on to members some of its income when debit cards are used, Benson Porter, Addison CEO, told the paper.
Credit union members earn 3.51% interest on their money in Addison's Dividend Rewards checking account if they make a minimum of 12 debit purchases per month, make one electronic deposit per month and agree to receive online statements, Porter told the paper.
CUs get more press on state employee assistance
WASHINGTON (9/4/09)--Credit unions nationwide received more media attention for helping state workers through challenging economic times.
A Thursday Stateline.org article noted Virginia CU, Richmond, Va., for its Virginia State Employee Loan Program, which the credit union operates in partnership with the Commonwealth of Virginia Campaign to help state workers who face emergency expenses and would benefit from a low-cost, emergency loan with a required financial education component. The loans have a 24.99% annual percentage rate, and are intended to prevent state workers with poor credit from using payday lenders--who could charge 300% or more in interest, the publication said.
Since the program was announced by Virginia Gov. Tim Kaine July 13, more than 1,620 employees have received loans.
North Carolina State Employees' CU, Raleigh, also was noted for its Salary Advance program that allows members to borrow up to $500 at a 12% interest rate. Members must repay the amount, plus interest, by the next paycheck. Since 2001, more than 111,800 individuals have borrowed $1.5 billion from the program with a default rate of 0.002%.
Hawaii State FCU, Honolulu also allows members who are furloughed or who have reduced incomes to borrow up to $5,000 from the credit union at a low interest rate.
More than 20 Pennsylvania credit unions offer low-interest or zero-interest loans to help state workers who were not getting paid. Some dropped off thank-you cards at one credit union to show their gratitude, Stateline.org said.
Several states have had budget impasses over the past few months that have affected state workers.
Minnesota foundation elects board, officers
ST. PAUL, Minn. (9/4/09)--The Minnesota Credit Union Foundation
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These board members will serve staggered terms:
- Chuck Albrecht, Mid-Minnesota FCU, Baxter;
- Mary Hansen, Mayo Employees FCU, Rochester;
- Lynn Kothe, North Memorial FCU, Robbinsdale;
- Kristi Mukomela, Novation CU, Oakdale; and
- Judy Root, Bluestone FCU, Eagan.
Mukomela will continue to serve as board chair, with Kothe continuing as vice chair and Root as secretary/treasurer.
Since attaining status as a public charity in 2007, the MNCUF board completed a strategic planning process to examine the overall organization to strengthen the foundation's governance structure and broaden its focus. It revised its bylaws, created and altered operational policies, and established a greater Web presence.
MNCUF will add two new board members this fall, bringing the total to seven. Lon Krueger, retired CEO from Accentra CU, is working for MNCUF as a volunteer to assist implementing the strategic plan.
Recently, MNCUF provided funds for:
- The Minnesota Credit Union Network's Small Credit Union Conference;
- The Cooperative Network's Youth Leadership Conference;
- Financial education activities and scholarships through the Minnesota Family Involvement Council;
- Charitable giving to Gillette Children's Specialty Healthcare through Minnesota Credit Unions for Kids;
- The Homes for Our Troops project to support construction of a home for a wounded Iraq War veteran;
- Disaster relief for credit unions in the state; and
- Educational grants for credit union professionals and volunteers.
Mission FCU helps schools bridge funds gap
SAN DIEGO (9/4/09)--Mission FCU is attempting to drum up extra financial support for local schools hit by budget cutbacks through its "Mission 4 R Schools" initiative.
For every new account opened at the $2 billion asset, San Diego-based credit union through Dec. 31, Mission FCU will deposit $25 in the new account and make a matching $25 donation to a school chosen by the new member (Reuters Sept. 1).
The matching funds can be used by local elementary, middle and high schools, and also colleges and universities, the credit union said.
"At Mission Federal, we are acutely aware of the critical need for additional funding sources for our local schools, so we developed this groundbreaking fundraising opportunity to show our support during these extreme budget times," said Tricia Link, Mission Federal vice president of communications and community relations, in a press release.
"The ‘Mission 4 R Schools' matching donation funds will be provided to schools by Mission Fed without any strings attached," she added. "Funds can be used for everything from classroom computers to museum field trips, instruments for the band to science equipment and classroom supplies."
CU System briefs
- HARTFORD, Conn. (9/4/09)--A bookkeeper for the now-defunct Meriden (Conn.) Franco-American CU pleaded guilty to embezzling more than $743,000 from the credit union. Melissa Laliberte, 39, of Wallingford pleaded guilty to embezzlement and filing a false income tax return. The credit union was placed into liquidation in July 2008 by the National Credit Union Administration (NCUA). At the time it had 206 members and less than $340,000. Prosecutors said Laliberte withdrew her salary multiple times each month; took loan payments from members to pay personal expenses; failed to post cash withdrawals from her and her husband's accounts; and falsified deposits to the accounts. She was ordered to pay restitution to NCUA, plus back taxes, penalities and interest to the Internal Revenue Service. Laliberte faces up to 30 years in prison and a maximum $1 million fine (WTIC.com and Associated Press Newswires Sept. 2) ...
- LIMA, Ohio (9/4/09)--A defendant's outburst in a courtroom and his family's reaction at his sentencing for a credit union robbery resulted in the family's eviction from the courtroom. Shortly before he was sentenced to the maximum 26 years in prison for robbing a bank and Superior FCU, Lima, Devonne Wilson cursed the judge and jury. His family began yelling and were evicted. Wilson calmed down and politely asked for an appeal. He was convicted of aggravated robbery with a gun in the March 9 holdup of Chase Bank and the March 20 robbery of Superior FCU. Wilson also was ordered to pay $19,000 in restitution to the two institutions (The Lima News Sept. 3) ...
- HARRISBURG, Pa. (9/4/09)--U.S. Rep. Kathy Dahlkemper (D-Pa.),
left, was welcomed by Erie FCU President/CEO and Pennsylvania Credit Union Association (PCUA) board member Norb Kaczmarek, right, during her recent visit to the credit union. They discussed several credit union issues but focused primarily on the Credit Card Accountability, Responsibility and Disclosures (CARD) Act and the act's effect on Erie FCU, and the costs associated with health reform. PCUA said Dahlkemper is a strong supporter of credit unions and has co-sponsored multiple credit union measures, including member business lending (Life is a Highway Sept. 2). (Photo provided by the Pennsylvania Credit Union Association) ...
- KANSAS CITY, Mo. (9/4/09)--More than a dozen Kansas City-area
credit unions met with U.S. Rep. Sam Graves (R-Mo.) Aug. 26 in Kansas City. Concerns about the Credit Card Accountability, Responsibility and Disclosures (CARD) Act dominated the discussion, reported the Missouri Credit Union Association (MCUA). Credit unions explained how the CARD Act hurts some consumers by including open-end lending. He indicated he would check into the issue (The Missouri difference Aug. 28). From left are Don Cohenour, MCUA; Suzie Sifuentes, Burlington Northtown Community CU; Pat Yokley, CommunityAmerica CU; Glenna Osborn, Missouri Central CU; Rep. Graves; Phil Weber, Central Communications CU; James Spafford, Postal and Community CU; and Rob Givens, Mazuma CU. Also attending from MCUA were Jean Hadley, Amy McLard and Peggy Nalls. (Photo provided by the Missouri Credit Union Association) ...
Click for larger view - SALT LAKE CITY (9/4/09)--Mountain America CU employees helped "Fill the Bus" to raise money and take donations of school supplies for students of an elementary school that was damaged by fire a month and half ago. Volunteers from the credit union and the Wal-Mart Distribution Center in Tooele, Utah, collected the items to replace items lost in the blaze at Grantsville Elmentary. More than $1,500 was raised. The fire occurred after teachers had set up their classrooms for the coming year and all their supplies were destroyed ...
Market News
MADISON, Wis. (9/4/09)
- As U.S. companies continue to trim expenses, more Americans than predicted filed jobless-benefits claims last week. For the week ended Aug. 29, applications dropped 4,000 to 570,000 but exceeded the 564,000 median forecast of economists surveyed by Bloomberg News, according to data provided by the Labor Department Thursday. Because of worker firings, consumer spending--which constitutes 70% of the U.S. economy--will have a difficult time becoming stronger, according to economists. Bloomberg's survey of analysts indicates they predict a Labor Department report due out today will show that August payrolls dropped 230,000--the smallest decrease in a year (Bloomberg.com Sept. 3) ...
- The Institute for Supply Management (ISM) Nonmanufacturing Index rose two points to 48.4 in August from 46.4 in July--the highest level recorded since September 2008. Readings below 50 indicate contraction. This is further evidence the U.S. economy is beginning to come out of the recession, analysts said. Business activity and new orders were healthy, but employment remained down, analysts said. Actions such as the "Cash for Clunkers" vehicle incentive program and the Federal Reserve's attempts to unfreeze credit are bolstering demand and could help the economy grow in the third quarter. However, rising unemployment and a record drop in wealth loom as problems because they dampen consumer spending, which is needed to provide a sustained economic recovery, analysts said (Moody's Economy.com and Bloomberg.com Sept. 3) ...
- Small-business owners' confidence in the U.S. economy in August has leapt to its highest level in 18 months, according to the most recent Discover Small Business Watch index provided by Discover Financial Services. The index increased 7.7 points from July to 89.8--the highest level since a 90.9 reading in February 2008. "For the past few months, small-business owners have shown rising confidence in the overall economy as well as an increasing sense that the conditions for their own businesses are improving," said Ryan Scully, Discover's business credit card director, in a press release. "This month we have a few more signs that they may be ready to start trying to grow their businesses again and that the worst may be over" (Reuters Aug. 31) ...
News of the Competition
MADISON, Wis. (9/4/09)
- The Federal Reserve is attempting to prepare the investor markets for the end of the Fed's housing-debt purchases, while also maintaining interest rates near zero. This is indicative of an economy coming out of a recession with little momentum, analysts said. Members of the Federal Open Market Committee (FOMC) considered extending the end date of the agency and mortgage-backed bond programs at the FOMC's Aug. 11-12 meeting, according to the FOMC minutes released Wednesday. The goal of such an action would be to avoid housing-credit disruptions at a time when prospects of recovery are threatened by escalating unemployment and slowing growth in wages, analysts said. For Minutes of Federal Open Market Committee, August 11-12, 2009, use the link (Bloomberg.com Sept. 3) ...
- U.S. mortgage rates for 30-year fixed-rate home loans fell to 5.08% this week from 5.14%, according to mortgage buyer Freddie Mac. The drop reduces buyers' borrowing costs amid indications of a stabilizing U.S. housing market, analysts said. Freddie's statement Thursday also indicated the 15-year rate was 4.54%. Low mortgage rates, declining home prices and a government tax credit for first-time home-buyers are sparking demand for housing, analysts said. In July, pending home sales and new-home sales increased more than forecast, and existing-home sales rose to the highest level in nearly two years (Bloomberg.com Sept. 3) ...
Security expert: How to safely discard electronics
WASHINGTON (9/4/09)--Don't toss out personal electronic equipment with account numbers and other sensitive information. Learn how to safely discard these devices--and protect yourself from identity theft--on Sunday's H&FF Radio show.
Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
- "Gadgets That Help You Use and Conserve Water Wisely," with Stacy Bass, utilities department public relations officer, and manager of education and outreach programs, Mesa, Ariz.;
- "Saving for College," with Jason Alderman, director, issues management, Visa USA, San Francisco, Calif.;
- "The Secrets of Money: A Guide for Everyone on Practical Financial Literacy," with Braun Mincher, entrepreneur and author, Fort Collins, Colo.;
- "Identity Theft and Safely Discarding Your Personal Electronic Equipment," with Jim Stickley, founder, chief technical officer and vice president of engineering, TraceSecurity, San Diego, Calif.; and
- Your Questions Answered: Simple ways to save gas, laddering certificates of deposit, and selecting a credit counselor.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.
For more information, read "Higher Credit Scores More Apt to See ID Theft" in Home & Family Finance Resource Center.
SW Corporate has new Member Capture campaigns
PLANO, Texas (9/4/09)--Southwest Corporate FCU announced the release of three customizable marketing campaigns that support its Member Capture remote deposit solution.
The campaigns are: "Say Yes," "Excuses" and "Whenever Wherever." They emphasize convenience and time savings. The campaigns were developed by a team of credit union marketers from credit unions of all asset sizes.
The corporate's campaigns offer a poster, brochure, postcard, statement stuffers, web graphic, newsletter article, message script and radio script for each campaign. Credit unions can view and download materials from the Southwest Corporate website.
Member Capture allows credit union members to deposit checks from home with a scanner, computer and access to the credit union's online home banking service. Member Capture is a recent addition to Southwest Corporate's remote deposit services (LoneStar Leaguer Sept. 3).
Products and Services briefs
- ST. PAUL, Minn. (9/4/09)--The Minnesota Credit Union Network (MnCUN) announced that Range Inc. has enrolled in MnCUN's Vendor Involvement Program (VIP). Range is a marketing services company specializing in creative solutions for credit unions. It also provides commercial printing services. The VIP provides organizations with an opportunity to work with MnCUN and increase their visibility among Minnesota credit unions. The program combines advertising, annual meeting packages and the opportunity to participate in MnCUN initiatives ...
- WESTBROOK, Maine (9/4/09)--Synergent said it provided more than 30 credit union representatives with connections to their peers through a live hosting site at the 2009 Symitar Educational Conference and Technology Expo, held Aug. 25-26. The virtual format allowed attendees to share ideas and information without traveling. The conference featured breakout sessions for management, information technology and finance staff. Synergent is a subsidiary of the Maine Credit Union League ...
- PORTLAND, Ore. (9/4/09)--CU Business Group, a business lending, deposit and consulting service for credit unions, hosted 130 attendees at its third annual national business services conference in Portland, Ore., last month. The theme was, "Navigating the Waters of Business Services." The conference focused on the commercial real estate market and featured presentations about enhancing business sales efforts and relationships. CU Business Group President/CEO Larry Middleman also highlighted industry member business lending trends and benchmarks. The group's next conference will be in the fall of 2010 in Portland ...
- NORTH CANTON, Ohio (9/4/09)--ATM manufacturer Diebold Inc. said it will sell its election systems business for $5 million in cash--plus future cash payments representing 70% of cash collected on outstanding accounts as of Aug. 31--to Election Systems and Software. Diebold's election systems business mainly consists of Premier Election Solutions Inc. in Allen, Texas. Diebold entered the U.S. election systems business when it purchased Global Election Systems in January 2002. Since then, the company has identified the business as non-core to its operations and has pursued strategic alternatives to ownership, including divestiture ...
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