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Filed on October 8, 2009, published the first business day after.
- Altering interchange fees could reduce consumer choice, CUNA testifies
- CFPA up for Oct. 14 committee vote
- Fed further amends check processing operations
- NCUA chair to testify on ‘state of the industry’
- Inside Washington
- ICU Day broadcast to celebrate global CU heritage
- FBI Phish Phry reels in 53 scam suspects
- President of Poland visits Polish & Slavic FCU
- Indiana CUs top banks in branching
- CU sues McNair's estate for SUV
- City, CU offer small biz start-up incentives
- Three more nominations received for CUNA Board
- Ohio deputy CU superintendent to take CU's helm
- Missouri chapters donate $56,000+ to kids’ hospitals
- MembersFirst CU helps schools prevent flu
- CU System briefs
- Market News
- News of the Competition
- H&FF Radio experts offer tips for tough times
- First Data, PayPal offer online payment to STAR clients
- Mass. league teams with College Week Live to promote SUM ATMs
Altering interchange fees could reduce consumer choice, CUNA testifies
WASHINGTON (10/9/09)--Testifying on behalf of the Credit Union National Association (CUNA), Local Government FCU Executive Vice President Mark Caverly told legislators assembled at a Thursday hearing on interchange fees that changing those fees would "reduce consumer choice for payment options, allow merchants to discriminate against credit unions and other small issuers," and allow merchants to assess deceptive and perhaps illegal surcharges on their customers.
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| Testifying on behalf of CUNA, Mark Caverly told legislators that changing interchange fee systems would limit options for consumers. Pictured right: CUNA's Ryan Donovan. |
"In short, the benefits merchants receive from accepting our cards far exceeds any interchange fees we receive," he added.
Caverly's credit union, which is based in Raleigh, North Carolina, currently holds $957 million in assets from 178,000 members, and issues 173,000 debit cards and 16,000 credit cards. LGFCU receives just over 14% of its monthly income from interchange fees, Caverly added.
Caverly questioned the motives of merchants and associated groups that seek to avoid paying their fair share of transactions, and opined that some merchant organizations may be trying to "drive credit unions... out of the payment card business." Portions of the act which would abolish the ""honor all cards" rule would, if passed, create "mass confusion" for customers and would "make it impossible" for Caverly's credit union to attract or retain members through a "competitive card program" for consumers.
Additionally, while merchants and merchant groups have decried interchange fees as overly costly, Caverly said that the fees have remained "relatively flat" over time.
Rep. Jeb Hensarling (R-Texas) expressed caution that both H.R. 2382 and H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009 , which was discussed during a later portion of the hearing, could "exacerbate" the credit crunch at a time when small businesses are already having difficulty getting access to credit.
However, Rep. Peter Welch (D-Vt.) spoke up in favor of H.R. 2382, which he introduced, saying that the legislation represented "basic fairness and reasonable regulation of credit card and large bank practices."
Rep. Bill Shuster (R-Pa.) also lent his support to both pieces of legislation, saying that "action is needed to help level the playing field between consumers, small businesses, and credit card companies by requiring greater transparency and prohibiting unfair and abusive practices when it comes to interchange fees."
While she said that she understands the opposition of credit unions and small banks to any interchange fee changes, Rep. Maxine Waters (D-Calif.) said that there "have to be some changes" to the current interchange fee structure. While the "overall problems and abuses" of the interchange fee system trump some of the issues cited by credit unions and small banks, Waters promised to take their concerns into account as legislation moves forward.
CFPA up for Oct. 14 committee vote
WASHINGTON (10/9/08)—The discussion draft of the Consumer Financial Protection Agency (CFPA) Act of 2009 (H.R. 3126) is among four bills slated for a vote by the House Financial Services Committee on Oct. 14.
Also on the committee's list: H.R. 3606, to amend the Truth in Lending Act to make a technical correction to an amendment made by the Credit CARD Act of 2009.
In a recent letter, the Credit Union National Association (CUNA) urged lawmakers to support H.R. 3606, introduced by Rep. Peter Welch (D-Vt.). The legislation would change troublesome Section 106 of the CARD Act, a provision that prohibits creditors from treating payments as being late unless the creditor adopts reasonable procedures to ensure that periodic statements are mailed or delivered to the consumer no later than 21 days before the payment due date.
Regarding the CFPA proposal, CUNA has expressed credit union concerns to legislators over the examination and enforcement authorities that could be conveyed to the CFPA.
CUNA also seeks clarification that the chairman of the National Credit Union Administration will be given a seat on the CFPA Oversight Board and direction that the CFPA director would take into account disclosure requirements under other laws in order to enhance consumer compliance and reduce regulatory burden.
Also up for a committee vote next Wednesday are:
- Discussion draft of the Over-the-Counter Derivatives Markets Act of 2009; and
- H.R. 3763, to amend the Fair Credit Reporting Act to provide for an exclusion from Red Flag Guidelines for certain businesses.
Fed further amends check processing operations
WASHINGTON (10/9/09)—The Federal Reserve on Thursday announced that on October 17 it will transfer its check processing operations from the head office of the Federal Reserve Bank of Dallas to the Federal Reserve Bank of Cleveland.
The Fed announced that effective November 14 it will also transfer to Cleveland the check processing operations of the Los Angeles branch of the Reserve Bank of San Francisco.
The moves reflect an overall restructuring of the Fed's check processing operations, and are a response to consumers' and businesses' shift from using paper checks toward electronic payments. According to the Fed, all check processing will be handled by the Cleveland office by early next year.
For the full Fed release, use the resource link.
NCUA chair to testify on ‘state of the industry’
WASHINGTON (10/9/09)--Deborah Matz will make her first appearance before Congress as National Credit Union Administration Chairman during an October 14 Senate financial institutions subcommittee hearing on the state of the banking industry.
The hearing, which will take place at 2:30 p.m. ET in room 538 of the Dirksen Senate Office Building, will also feature testimony from Federal Deposit Insurance Corporation Chairman Sheila Bair, Comptroller of the Currency John Dugan, Federal Reserve Governor Daniel Tarullo, Office of Thrift Supervision Deputy Director, Examinations, Supervision, and Consumer Protection Timothy Ward, and North Carolina Commissioner of Banks and Conference of State Bank Supervisors Chairman Joseph Smith.
While the financial regulatory reform debate continues in Washington. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said recently that any plan to combine financial institution regulation under a single regulator would not apply to credit unions.
Inside Washington
- WASHINGTON (10/9/09)--The Federal Housing Administration (FHA)--which insures mortgages with low down payments--may need a government bailout, Bloomberg.com reported Thursday. FHA has $54 billion more in losses than it can handle, said a former Fannie Mae executive. The agency may need a bailout in two to three years, said consultant Edward Pinto. FHA's volumes have quadrupled in the last three years as private insurers and lenders scale back in a struggling housing market. However, FHA Commissioner David H. Stevens said the agency doesn't need a bailout. FHA's reserves exceed more than its insurance--$30 billion, he said. About 14.4% of FHA's loans were delinquent as of June 30, and 2.98% were in foreclosure, according to the Mortgage Bankers Association ...
- WASHINGTON (10/9/09)--Fannie Mae and Freddie Mac will likely incur steeper funding costs if the Federal Reserve Board stops purchasing debt and mortgage-backed securities from the enterprises and the Federal Home Loan Banks March 31, financial observers say. The Senate Banking Committee was scheduled to meet Thursday to discuss the enterprises' future and what role they would take in the mortgage markets after the economic crisis passes. If the Fed stops buying debt and securities in the first quarter, it will be a mistake because the change could drive up interest rates, said Joe Murin, managing director of the Collingwood Group. The Fed has said it would buy $1.25 trillion of mortgage-backed securities and $200 billion of debt from Fannie and Freddie. So far, the central bank has bought $882.6 billion in mortgage-backed securities and $131.2 billion in debt (American Banker Oct. 8) ...
- WASHINGTON (10/9/09)--The delay on enacting regulatory reform of the financial services sector may not be a bad thing, according to Sheila Bair, Federal Deposit Insurance Corp. (FDIC) chairman (American Banker Oct. 8). It could give the nation extra time to find the roots of the crisis, Bair said during a speech Tuesday. She supports an Obama administration plan to create a consumer protection agency, although she has said it should not have oversight over banks. Rather, it should focus on nonbanks that made subprime loans--which triggered the financial crisis. Also on Tuesday, Bair said bank failures would probably continue through 2010. Banks are still working through loans they shouldn't have made. Regulators want lending to continue, but only prudent lending, she said ...
- WASHINGTON (10/9/09)--A plan to regulate over-the-counter derivatives has divided regulators and House Financial Services Committee Chair Barney Frank (D-Mass.). During a Wednesday hearing, regulators from the Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) said Frank's bill was too weak. He acknowledged the criticism and said he would make some changes. He said he was unsure about a concern regarding a provision to allow end users to enter into derivatives contracts without using a clearinghouse. Market participants should be able to profit off of derivatives, Frank said. Also during the hearing, CFTC Chair Gary Gensler suggested ways to improve the bill. Standardized derivative contracts should be traded on electronic trading platforms or exchanges, he said. He also said that instead of having regulators require clearance of standard derivatives, lawmakers should enforce clearance. Frank's bill also left out some regulatory oversight, according to Henry Hu, SEC director of the division, risk, strategy and financial innovation. Frank said he could accommodate requests, but did not want to require that end users clear standard derivatives. The Obama administration also has drafted a derivatives bill. The legislation is tougher than Frank's because it would not give banks and others much flexibility to avoid using a clearinghouse for derivatives hedged for risk ...
ICU Day broadcast to celebrate global CU heritage
MADISON, Wis. (10/9/09)--The continuing contributions of the worldwide credit union movement will be the topic of the annual International Credit Union Day (ICU Day) broadcast sponsored by the Credit Union Development Educators (CUDE) and the World Council of Credit Unions (WOCCU).
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| Pete Crear, World Council of Credit Unions president/CEO, will discuss credit unions' global impact in the face of the ongoing economic crisis as part of an annual International Credit Union Day broadcast Thursday. (Photo provided by World Council of Credit Unions). |
Pete Crear, WOCCU president/CEO, will headline an hour-long Thursday discussion moderated by Paul Berry, a former Washington, D.C., television news anchor who hosts Home & Family Finance, a weekly radio program sponsored by the Credit Union National Association. Crear will discuss credit unions' global impact in the ongoing economic crisis.
While credit unions everywhere are affected by fallout from the economic crisis, credit union presence continues to expand globally, said Crear. Rather than contribute to ongoing economic problems, credit unions have diversified risk and provided consumers with safe alternatives when facing their own financial issues.
WOCCU is increasing its efforts to reach consumers in urban and rural environments and in countries with significant economic and social challenges, including Afghanistan, Kenya and Sri Lanka, he added.
"Worldwide, more than 54,000 credit unions in 97 countries serve more than 186 million members," said Crear, citing data from WOCCU's 2008 Statistical Report released in June. "Our mission is to support financial independence and economic democracy through credit unions for people around the globe, and we're making great strides in achieving that goal."
The webcast will allow time at the end of Crear's interview for questions. International webcast listeners also will be able to e-mail questions to be answered on the air.
The webcast begins at 2 p.m. EDT Thursday and runs until about 3 p.m. It is open to the public and may be accessed by registering at www.wescorp.org or www.woccu.org. The program will be recorded and available for viewing on WOCCU's website.
FBI Phish Phry reels in 53 scam suspects
WASHINGTON (10/9/09)--The Federal Bureau of Investigation (FBI) began arresting 53 individuals in the U.S. Wednesday on charges of conducting a vast financial fraud based on phishing or tricking Internet users into revealing their bank account information at two of the nation's largest banks--Bank of America and Wells Fargo.
Operation Phish Phry netted arrests in Southern California, Nevada and North Carolina, said the FBI. In addition, 47 co-conspirators in Egypt are being charged by authorities there.
This is the largest number of defendants ever charged in a cybercrime case, said the FBI in a press release. The group allegedly stole at least $2 million from 2007 through September 2009 from hundreds and perhaps thousands of the banks' customers.
Indictments in a U.S. District Court in Los Angeles accuse three California residents of masterminding the U.S. portion of the scam--Kenneth Joseph Lucas, 25; a friend, Jonathan Preston Clarke; and Nichole Michelle Merzi, Lucas' former girlfriend. They directed associates to recruit "runners" to set up bank accounts to receive funds stolen from the compromised accounts.
The online component of the scam initiated in Egypt, where defendants sent mass e-mail messages that appeared to come from the banks, said the FBI. Recipients who clicked on a link in the messages were sent to a fake website identical or similar to the banks' sites, where they were asked to enter information such as their account numbers, passwords, Social Security numbers and drivers' license numbers.
The U.S. group would transfer funds into their own accounts and remit money back to accomplices in Egypt.
Each of the 53 defendants named in the indictment is charged with conspiracy to commit bank fraud and wire fraud, which carries a maximum penalty of 20 years in prison. Various defendants also are charged with bank fraud; aggravated identity theft; conspiracy to commit computer fraud, specifically unauthorized access to protected computers in connection with fraudulent bank transfers; and domestic and international money laundering.
Some analysts said the arrests won't have much impact on the number of online banking scams that have hit businesses, including credit unions. Many other groups are involved in similar fraudulent phish schemes, they said (The New York Times Oct. 8).
President of Poland visits Polish & Slavic FCU
BROOKLYN, N.Y. (10/9/09)--Polish President Lech Kaczynski visited the Polish & Slavic FCU (PSFCU), Brooklyn, N.Y, while he was in New York last week for the opening of the United Nations General Assembly.
His visit marked the first time an acting head of state had met with executives and employees of the 33-year-old credit union. Kaczynski shared stories about his credit union roots and the role U.S. credit unions played in Poland's march toward democracy 20 years ago (earthtimes.org Oct. 8).
"This is undoubtedly the greatest tribute we have even been awarded," said Bogdan Chmielewski, CEO of PSFCU. "I cannot express the level of pride that all our employees and our 70,000 members are experiencing as a result of this visit. This visit is a testament to our success as the largest financial institution serving Polish people outside of Poland, and the work we do toward improving the lives of so many Polish-Americans."
In his speech to PSFCU guests and employees, Kaczynski remarked how proud he remains having been the first chairman of the Polish Credit Union Foundation in Poland, and the role that U.S. credit unions played in the emerging Polish government a generation ago.
"The Polish & Slavic FCU is an institution that has been well-known to me for years," Kaczynski said. "As a matter of fact, 20 years ago, a group of my 20-year-old associates left for the U.S., and brought back the idea and the knowledge of credit unions. They decided to establish such a movement in Poland, and truth be told, it is the largest Polish social/financial success since 1989."
Chmielewski told his guests that the Brooklyn-based credit union's members retain strong ties to Poland, and that the credit union itself continues to work closely with the Polish Cooperative Savings and Loan (SKOK) organization.
Much of the initial success of the SKOK can be attributed to the assistance yielded by its American counterparts, Kaczynski said.
At the conclusion of Kaczynski's visit, representatives from the PSFCU board of directors presented him with a commemorative statuette--a silver and gold replica of the PSFCU membership book, which grants him an honorary membership.
"You are a movement that's very dear to me," Kaczynski said.
Indiana CUs top banks in branching
INDIANAPOLIS (10/9/09)--The cooperative nature of Indiana's credit unions has created a milestone--they now offer the largest branch network in the state.
By partnering with Credit Union Centers of Indiana (CUCI), the networked credit unions provide members access to 201 shared Indiana locations. That's more branches than any other financial institution doing business in the state, including large regional players JP Morgan Chase, PNC/National City and Fifth Third, said CUCI.
"This really speaks to the power of credit unions, and the cooperation among Indiana credit union leaders," said CUCI President Karol Griffin of Teachers CU, South Bend. "By sharing resources, credit unions can keep costs down and offer a great convenience to their members while staying extremely competitive."
The network enables even the smallest credit union to compete with the largest banks in the region on convenience and access, said Dan Davis, Credit Union Centers executive vice president and chief financial officer.
CUCI also is expanding in Illinois. Paul Simons of Rantoul, Ill.-based Credit Union 1 noted the credit union has partnered with CUCI "to begin building the largest branch network in Illinois. Credit unions continue to be a great choice for consumers, and by banding together and building a large shared-branch network, it will make joining a local credit union the smart choice." Credit Union 1 operates 13 of the 64 shared-branch locations operating in Illinois.
CUCI is part of Credit Union Service Centers, a national shared-branching network that offers access to more than 3,800 shared branch locations nationwide.
CU sues McNair's estate for SUV
NASHVILLE, Tenn. (10/9/09)--A credit union has sued the estate of former Tennessee Titans Quarterback Steve McNair for outstanding payments on a sport utility vehicle he bought the woman who killed him two months later.
Old Hickory CU, based in Old Hickory, Tenn., is seeking $43,000 for outstanding payments, attorney fees, and towing and storage for a Cadillac Escalade that McNair bought jointly with, his girlfriend, Sahel Kazemi, on May 7 (NewsChannel5.com Oct. 8).
In early July, the couple was stopped in the SUV in downtown Nashville. Kazemi was jailed and charged with driving under the influence. McNair bailed her out. Two days later, Kazemi shot McNair to death, then committed suicide.
McNair left no will.
City, CU offer small biz start-up incentives
DRYDEN, N.Y. (10/9/09)--The town of Dryden, N.Y., has teamed up with Alternatives FCU, based in Ithaca, to help local entrepreneurs start up their businesses or invest in them with a savings match program.
The town and credit union will provide residents with Individual Development Accounts (IDA)--matched savings accounts that help moderate-income people save for asset purchases. For every dollar a person saves, the town will contribute $2 (Ithaca Journal Oct. 7).
A maximum of $1,000 can be matched, which means a resident can get $3,000 for a start-up or expansion of their business. The business must be located in the town of Dryden and owned by Dryden residents.
The funds are from payments of a loan the town provided several years ago to Cayuga Press. It received $400,000 in federal HOMES grant money. As Cayuga Press pays back the loan, the town is reinvesting part of the payments in other local businesses, starting with $30,000 for the IDA venture, the town board told the newspaper.
Participants in the IDA match program are required to complete finance and business classes offered by Alternatives FCU, which developed an IDA program for both business and personal investments.
More than 300 people have saved and made asset purchases through the program the past 10 years, said Alternatives CEO Tristram Coffin. That included 70 home purchases, he told the newspaper.
Three more nominations received for CUNA Board
MADISON, Wis. (10/9/09)--The Credit Union National Association (CUNA) has received three more nominations for its 2009-2010 board elections.
The new nominees and district categories are: Dennis K. Tanimoto, Hawaii Credit Union League, Honolulu, Hawaii, District 6, Class D; Robert M. Cashman, Metro CU, Chelsea, Mass., District 1, Class C; and Kris J. Mecham, Deseret First CU, Salt Lake City, Utah, District 5, Class B.
Already nominated are:
- Laida Garcia, Florida Central CU, Tampa, Fla., District 3, Class B.
- Dennis E. Pierce, CommunityAmerica CU, Kansas City, Mo., District 4, Class C;
- 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.
The 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 Dec. 18.
For more information, use the link.
Ohio deputy CU superintendent to take CU's helm
COLUMBUS, Ohio (10/9/09)--Rose Bartolomucci, who has served as deputy superintendent of credit unions for the Ohio Division of Financial Institutions since 2007, will assume the CEO position at TeleCommunity CU in Akron, Ohio.
She will take on the role as CEO later this month, replacing CEO Jack Sarver, who is retiring, according to the Ohio Credit Union League.
"Rose served as an excellent regulatory leader for Ohio's credit unions and provided the best in regulatory leadership, including open communications, commitment to safety and soundness, modern credit union supervision practices, and strong credit union representation," said Paul Mercer, league president.
Prior to joining the division, Bartolomucci was CEO of Vantage Financial CU, now Best Reward CU, Brook Park, and Kent CU (Ohio).
Missouri chapters donate $56,000+ to kids’ hospitals
SPRINGFIELD and KANSAS CITY, Mo. (10/9/09)--Missouri credit unions in Springfield and Kansas City recently donated more than $56,000 to the Children's Miracle Network for children's hospitals.
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| Members of the Springfield Chapter of Credit Unions present a donation--raised at an annual golf tournament--to the Children's Miracle Network. (Photo provided by the Missouri Credit Union Association) |
The Springfield Chapter of Credit Unions and the Kansas City Chapter of Credit Unions both sponsored golf tournaments in September to raise funds for the network (The Missouri difference Oct. 7).
Springfield credit unions raised a record-breaking $30,700 at the 13th Annual Benefit Golf Tournament Sept. 11. The event included more than 120 golfers and major sponsors.
The Greater Kansas City Credit Unions for Kids held its 14th Annual Tee Off for Tots Golf Classic in Independence Sept. 10, raising $26,000 for the network.
Both credit union chapters used a Miracle Match from CO-OP Financial Services to increase their donation totals.
MembersFirst CU helps schools prevent flu
COLUMBUS, Ohio (10/9/09)--MembersFirst CU in Grandview, Ohio, has partnered with a local school district to provide a year's supply of alcohol-free foam sanitizer for students and faculty to use to help prevent the spread of flu and H1N1 viruses.
The credit union donated the sanitizer and 25 dispensers. The sanitizer is a better alternative to alcohol-based sanitizer because it is certified "log kill 5," which means it will kill bacteria and keep hands sterile for up to 30 minutes after each use, compared with 10 seconds for regular sanitizers, the credit union said.
The dispensers and sanitizers have been placed in all three Grandview Heights City district schools. The sanitizers will help emphasize the health and well-being of students, faculty and staff without financial burden, according to MembersFirst.
"Expanding our partnership with the Grandview Heights City School District by funding the placement of hand sanitizer units throughout the district's school buildings allows us to fill a vital need at a time when preventing influenza outbreaks is a top public health concern," said Greg Kidwell, MembersFirst treasurer and CEO.
CU System briefs
- ST. LOUIS (10/9/09)--Vantage CU, with assets of $628 million, and the $50 million asset Spirit of St. Louis CU will merge, announced Vantage CU President/CEO Hubert Hoosman Jr. The merger will be final Dec. 1. "This merger is a mutually beneficial endeavor for both credit unions," said Hoosman. "It's a positive move for Vantage CU in that we'll be able to expand our reach out to Eureka and better serve our West County members." Spirit of St. Louis members will benefit from new locations, additional services and conveniences such as mortgages, investment services, and free money-management and educational services, he said. Vantage, which has more than 111,500 members, is based in St. Louis. Spirit of St. Louis, with 8,000 members served by two locations, is located in Eureka, Mo. It was founded in 1933 by a group of Kroger Food Stores employees in St. Louis. Vantage will now serve members from 16 branches in the greater St. Louis region and 19 counties in eastern Missouri as well as Madison and St. Clair Counties in Illinois ...
- KANSAS CITY, Mo. (10/9/09)--More than 60 attendees of the Kansas City Chapter of Credit Unions Legislative
Breakfast Tuesday met face-to-face with state representatives and discussed credit union and state issues, including the shortfall in state revenue (The Missouri difference Oct. 7). Glenna Osborn, Missouri Central CU, Lee's Summit, noted that one legislator said credit unions need to continually educate representatives about credit union issues and issues impacting their members. Among the lawmakers present were state Reps. Gary Dusenberg (R-54), Jeff Grisamore (R-47), Paul LeVota (D-52), Jerry Nolte (R-33), Bryan Pratt (R-55) and Ray Salva (D-51). Pictured here are, from left: Laura Eblen of Central Missouri Community CU; Dusenberg; Judy Jett of Central Missouri Community CU; and Billy Wilson and Bob Durbin of Mazuma CU. (Photo provided by the Missouri Credit Union Association) ...
- TEMPE, Ariz. (10/9/09)--A backpack left in a trash can inside Tempe (Ariz.) Schools CU by a man who robbed the credit union had a fake bomb inside it, according to police. The man, armed with a handgun, walked into the credit union at about 10:40 a.m. Wednesday and demanded money from the teller. As he left, he deposited the backpack in the trash can before fleeing on foot. The credit union was evacuated and the Mesa bomb squad responded. The squad discovered the back pack contained a large battery that was smaller than a car battery. No one was injured (The Arizona Republic Oct. 8) ...
- FARGO, N.D. (10/9/09)--Denver Lee Tergesen, 25, who pleaded guilty to robbing the First Community CU of Jamestown, N.D. in December, was sentenced to 40 months in prison by a federal court judge and ordered to get mental health treatment. Defense attorneys argued that Tergesen suffers from chronic post traumatic stress disorder as a result of 14 months' military service in Iraq and has a gambling addiction. He robbed the credit union of about $10,000. He was arrested in a stolen car near Detroit Lakes, Minn. (Associated Press Newswires Oct. 7) ...
- CAPITOLA, Calif. (10/9/09)--BAY FCU was named Business of the Year by the Aptos (Calif.) Chamber of Commerce Sept. 25. Chamber
Executive Director Karen Hibble noted Bay Federal's "strong support to many local organizations and schools through donations and volunteerism" and said it is "remarkable that 100% of employees have participated in community support activities for each of the last six years." "We are very proud of our dedicated and community minded employees--they are the reason that Bay Federal continues to make a real difference in Santa Cruz County," said Carrie Birkhofer, president/CEO of Bay Federal. Shown from left are: Maureen McCarty, a representative of California Sen. Abel Maldonado's office; California Assemblyman Bill Monning; Santa Cruz County Supervisor Ellen Pirie; and Birkhofer. Behind the podium is Renee Kilmer, vice president of Cabrillo College and Aptos Chamber president. (Photo provided by Bay FCU) ...
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Market News
MADISON, Wis. (10/9/09)
- One year after the U.S. housing bubble burst, triggering the economic downturn, the availability of consumer credit is still being pared down by financial institutions. Total consumer credit outstanding--encompassing everything from credit card debt to loans for recreational vehicles--declined $12 billion in August-- a 5.8% seasonally adjusted annual rate, the Federal Reserve reported Wednesday. The drop constituted the seventh consecutive month of declines--the longest such stretch since 1991. The stretch illustrates how--because of their own exposure to the troubled real estate market--financial institutions are limiting the amount of credit being made available, analysts said. It also is indicative of how reluctant U.S. consumers are to carrying large debt levels at a time when the job market and housing values have turned downward, they added (The Wall Street Journal Oct. 8). Credit unions had $241.5 billion in outstanding consumer credit in August, up from $238.9 billion in July, according to Fed data. At credit unions, outstanding revolving credit increased to $34.1 billion from $33.6 billion in July, and outstanding non-revolving credit--loans for cars and boats--was $207.4 billion, up from July's revised figure of $205.4 billion in June ...
- The number of U.S. first-time claims for unemployment benefits fell for the week ended Oct. 3 to the lowest level since January, the Labor Department said Thursday. Applications declined by 33,000 to 521,000--lower than predicted--from a revised 554,000 the prior week. Meanwhile, for the week ended Sept. 26, continuing claims fell 72,000 to 6.04 million. These developments signal the labor market is eroding at a slower pace as the economy comes out of the recession, analysts said. "Companies are now in a situation where they've cut enough jobs, but they're still not hiring enough," said Harms Babholz, a U.S. economist at UniCredit Global Research. "Consumer spending will be very slow until the middle of next year. We're in a moderate recovery" (Bloomberg.com Oct. 9, Moody's Economy.com Oct. 8, and The New York Times Oct. 9) ...
- For the first time in 13 months, U.S. retail sales rose in September, as discounts enticed shoppers back to stores and sales at Kohl's Corp. and American Eagle Outfitters bested estimates, analysts said. However, sales in major retailing categories are only at 2005 levels. For U.S. chain stores open for at least one year, sales increased 1.1% last month, according to Retail Metrics Inc. About 70% of retailers reported sales that exceeded average estimates compiled by Retail Metrics, said Ken Perkins, company president. Although shoppers have diverted their spending away from big-ticket items, retailers have had opportunities during the past year to vary their product assortments and offer low prices, said Richard Hastings, a consumer strategist for Global Hunter Securities LLC. "The consumer has less spending capacity, but the industry's learning ability is very strong," Hastings said. "The consumer is less frightened than [he or she] was one year ago" (Bloomberg.com Oct. 8 and The New York Times Oct. 9) ...
News of the Competition
MADISON, Wis. (10/9/09)
- For the second consecutive week, U.S. 30-year, fixed-rate mortgage loans dropped, pushing borrowing costs to near-record lows. The average 30-year rate fell to 4.87% from 4.94% for the week ended Oct. 2, and the 15-year rate was 4.33%, Freddie Mac said Thursday. The falling rates helped propel home applications last week to the highest level since May. Mortgage applications to buy a home increased 13% in the week ended Oct. 2, and the refinance gauge jumped 18% (Bloomberg.com Oct. 8) ...
- Two private equity firms are leading a group of four investors that have joined forces with the Federal Deposit Insurance Corp. (FDIC) to purchase $4.5 billion of Chicago-based Corus Bankshares Inc.'s real estate assets. Starwood Capital Group LLC and TPG led the group that won the auction for loans and properties of the failed Chicago lender. They offered $554 million, the FDIC said Tuesday. The group will assume a 40% stake in Corus and manage the portfolio, while the FDIC will retain 60% and lend the buyers up to $2.39 billion to finalize the sale, analysts said. The FDIC likely will make similar arrangements for future sales, Chairman Sheila Bair said Wednesday (Bloomberg.com Oct. 8) ...
- FirstFed Financial Corp. obtained approval to increase its share count to five billion from 100 million at a special stockholder meeting last week. An offering is in the works, analysts said. Substantial losses in the past six months have depleted the California company's capital, and FirstFed is warning that its survival is uncertain, analysts said. The company has a large volume of adjustable-rate mortgages and needs to raise capital, analysts added (American Banker Oct. 8) ...
H&FF Radio experts offer tips for tough times
WASHINGTON (10/9/09)--Policy experts on Sunday's H&FF Radio show tackle a range of issues facing families during these tough times: helping military families get--and stay in--their homes; helping lower-income families save for homes, education, or small business ventures; and helping survivors cope when a spouse dies.
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:
- "Military Homeowner's Assistance Program," with Katie Savant, deputy director, government relations, National Military Families Association, Alexandria, Va.;
- "Fueling Fair Practices: A Road Map to Improved Public Policy for Used-Car Sales and Financing," with John Van Alst, attorney, National Consumer Law Center, Boston;
- "Individual Development Accounts (IDAs)--A Savings Account for You?" with Leigh Tivol, senior program manager, CFED-Expanding Economic Opportunity, Washington, D.C.;
- "Coping With Change When Your Spouse Dies," with Susan Tiffany, director, consumer periodicals, Center for Personal Finance, CUNA, Madison, Wis.; and
- Your Questions Answered: Money Smart Things to Do With Your Income Tax Refund; Identity Theft; Three Ways to Waste Money on a Car.
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 (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide.
For more information, read "Turning Points: Rebuild Your Life After a Life Partner Dies" and "Tough Times Series: Services, Sites Help Veterans Navigate Benefits Maze" in Home & Family Finance Resource Center.
First Data, PayPal offer online payment to STAR clients
ATLANTA and SAN JOSE, Calif. (10/9/09)--First Data announced an agreement with PayPal that will allow debit cardholders in First Data's STAR Network--which some credit unions use--to link their STAR debit card to a PayPal account online.
Consumers can enroll in PayPal, an online payment service, through their financial institution's online banking site. They then use their debit card to fund their PayPal account to make online purchases without having to enter debit card information or expose their card number to merchants for each purchase. Member financial institutions, including credit unions, authenticate information for each cardholder to add another layer of security.
JM Associates FCU in Jacksonville, Fla., participated in a pilot program with the STAR Network earlier this year. The partnership built member relationships through promotion of the credit union's brand with each transaction, while allowing members to purchase items online securely, according to CEO Jim Ryan.
Consumers are not as comfortable using debit cards for online shopping as they are with credit and prepaid cards, according to the 2008 Study of Consumer Payment Preferences, by Hitachi Consulting and the Bank Administration Institution.
Credit cards have the highest penetration of all payment methods on the Internet, while debit cards and payment services like PayPal have the second highest penetration. The service seeks to address consumers' fears about using online debit cards, said Julie Saville, STAR Network vice president.
"As more and more consumers move to online shopping and banking, and we continue to see an increase in e-commerce, this new service gives our issuing institutions one more way to grow relationships with their customers, reduce their costs and increase revenues," Saville said.
First Data is an electronic commerce and payment services provider.
Mass. league teams with College Week Live to promote SUM ATMs
MARLBOROUGH, Mass. (10/9/09)--The Massachusetts Credit Union League has partnered with a virtual college fair to promote the SUM program of surcharge-free ATMs to students and families looking at colleges or universities in New England.
The fair, College Week Live, is scheduled for Thursday. The event is free and will feature hundreds of colleges and universities, who will set up virtual exhibits on the Internet. During the event, students, parents, counselors and colleges will discuss the college experience (eWeekly Oct. 7).
The SUM ATM virtual exhibition booth will have links to SUM's website, promote a $5,000 sweepstakes, and play a video. A live financial literacy presentation and a question-and-answer segment on financial management tips for prospective college students and their parents also will be offered. Massachusetts league President Dan Egan is scheduled to speak during the presentation.
SUM will be visible in the fair's virtual lobby and theater. The program also is being promoted on hundreds of College Week Live radio spots statewide.
Other partners of the SUM Program include a Massachusetts banking trade group and the NYCE Corp.
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