News Now Archive

Filed on October 28, 2009, published the first business day after.

• CUNA witness Staatz to testify at overdraft hearing
• ‘Too big’ bill unlikely to address CUs: CUNA
• Pew credit study shows the CU difference, Mica says
• SBA program extension bill moves forward
• Inside Washington
• ABA convention attracts 5,000 bailout protesters
• WesCorp sells $1.5 billion in three-year notes
• Panama CUs learn advocacy benefits from Iowa league
• New Mexico CUs to launch Savings Revolution
• Suze Orman site: Look at CU credit card options
• Oklahoma league opens ‘CU House’
• Wings Financial takes flight to diversify membership
• CUs root for their World Series teams
• CU System briefs
• Market News
• News of the Competition
• Minnesota network, CUDL enter into marketing agreement
• Diebold launches ValiTech security for ATMs
• PSCU Financial offers holistic member-support approach

CUNA witness Staatz to testify at overdraft hearing

WASHINGTON (10/29/09)—Rod Staatz, president/CEO of SECU in Maryland, will testify Friday on overdraft issues before the House Financial Services Committee on behalf of the Credit Union National Association (CUNA) and credit unions.

The hearing will zero in on H.R. 3904, a newly introduced bill that would amend the Truth in Lending Act with the intent of establishing fair and transparent practices related to overdraft protection programs offered by depository institutions.

CUNA supports the ability of credit unions to offer overdraft privilege programs as a way to serve members' financial needs and to help them resolve short-term financial problems. CUNA promotes "best practices" standards to distinguish credit union overdraft services from many bank programs that have been marketed to boost fee income without regard for the best interests of consumers.

The House bill was introduced by Reps. Carolyn Maloney (D-N.Y.) and Barney Frank (D-Mass.), and is cosponsored by Reps. Luis Gutiérrez (D-Ill.), Gary Ackerman (D-N.Y.), Michael Capuano (D-Mass.), Keith Ellison (D-Minn.), Anna Eshoo (D-Calif.), Rubén Hinojosa (D-Texas), Paul Hodes (D-N.H.), Walter Jones (R-N.C.), Paul Kanjorski (D-Pa.), Daniel Maffei (D-N.Y.), Brad Miller (D-N.C.), Gwen Moore (D-Wis.), Jackie Speier (D-Calif.), and Maxine Waters (D-Calif.).

Similar legislation has been introduced in the Senate, and the Federal Reserve is also reportedly working to address overdraft protections. House Financial Services Chairman Rep. Barney Frank (D-Mass.) has also indicated that the Consumer Financial Protection Agency, the plan for which could come to the House floor within the next month, could itself create new overdraft rules.

The committee had not announced a full witness list for the hearing at press time.

Resource Links

Back in the Black: Tools to Keep Your Checkbook on Track statement stuffer

‘Too big’ bill unlikely to address CUs: CUNA

WASHINGTON (10/29/09)--Commenting on recently introduced draft legislation aimed at controlling systemic risk in the financial system, Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said that CUNA "does not believe credit unions pose a systemic risk to the financial system."

He added that credit unions will likely not be "covered by or affected directly by the legislation.

"If even one of the largest credit unions were to fail, as costly as that might be to the credit union system, it would not threaten the overall financial system," he added.

The draft bill, which was released by House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) earlier this week, would create a monitoring system intended to reduce the threats that systemically risky firms pose to the financial system. The legislation also would establish a process for shutting down large, financially troubled nonbank financial institutions in a way that minimizes impact on U.S. taxpayers and the financial system. The bill also contains general provisions aimed at overhauling the country's financial regulatory system.

The Federal Reserve Board would be granted oversight, regulatory, and enforcement powers over systemic firms under the legislation, which would also create an interagency regulatory council to advise legislators on financial regulation, American Banker reported.

The National Credit Union Administration would serve on this regulatory board, if established.

The Fed also may be granted the power to impose uniform standards for liquidity, risk-based capital, and leverage, American Banker added.

CUNA is currently analyzing the legislation.

Pew credit study shows the CU difference, Mica says

WASHINGTON (10/29/09)--A recently released Pew Charitable Trusts study on unfair or deceptive credit card practices "underscores that a consumer in need of a credit card would do well to look to credit unions," Credit Union National Association President/CEO Dan Mica said.

"This study is another example of an independent third party which has confirmed that credit unions, on their own and without prompting from regulators, provide their members with honest, fair deals," Mica said. He added that "it is further evidence that all the new regulations coming down on financial services are unlikely to change the behavior of credit unions since they are already doing the right things."

However, Mica said, "credit unions are concerned that the costs of complying with these new regulations will affect the deals they are able to offer their members."

The Pew study, which gathered information on about 400 credit cards issued by the 12 largest banks and the 12 largest credit unions, found that credit cards offered by credit unions provide their members with more reasonable annual percentage rates, cash advance fees, late fees, and other fees. The report also found that penalty fees at the largest credit unions are nearly half those assessed by larger banks.

The report also suggested that many of the terms of credit union credit cards could provide "useful benchmarks" as the Federal Reserve Board creates new "reasonable and proportional" penalty rules, as required by the CARD Act.

According to the Pew report, 99.7% of bank cards allowed the issuer to raise interest rates on outstanding balances by changing the account agreement unilaterally. Additionally, 90% of bank cards had penalty interest rates that could be triggered by late payments or over-limit transactions, according to the study.

Further, 95% of bank cards allowed issuers to apply payments to low interest balances first, hampering a cardholder's ability to pay down higher interest balances. The other 5% did not disclose the issuer's policy, Pew reported.

Commenting on the Pew report, Wisconsin Credit Union League President/CEO Brett Thompson said the study confirms what many credit union members "already know--that by owning the financial institution where you borrow and save, you're protected from unnecessary fees.

"Because there are no shareholders expecting profits--just members leveraging their ownership of the cooperative for better deals on financial services--credit unions consistently earn high marks for fairness to consumers," he added.

The league has communicated the results of the Pew study to local media and has also shared information with credit union insiders for further distribution.

SBA program extension bill moves forward

WASHINGTON (10/29/09)--The House and Senate each passed legislation Wednesday that would temporarily extend U.S. Small Business Administration programs.

The Senate approved S. 1929 and in a statement following the passage of the bill, author Sen. Mary Landrieu (D-La.) said that the extension is intended to ensure "that the agency has the stability it needs to provide our innovators and job creators the assistance they need to remain successful."

The House then approved a similar bill, clearing the way for the authorization to be sent to the White House for the president's signature once differences are worked out between the two bills. The House measure extends the programs through January and the Senate bill pushes them into April.

Rep. Nydia Velázquez (D-N.Y.), chairwoman of the House Committee on Small Business, said of the House action, "This will allow small businesses to go on using the valuable services of the SBA, while the House and the Senate continue our work to comprehensively reauthorize the Small Business Administration." She noted that later this week the House will consider H.R. 3854, a bill to comprehensively update the SBA's capital access initiatives.

The SBA late last month also extended its Gulf Opportunity Pilot Loan Program, which provided 301 loans to small businesses in areas affected by Hurricanes Katrina and Rita, for a total of $25.2 million in funds during 2008. That program will continue until Sept. 30, 2010.

Small business lending has also been a focus of the Obama administration, with the president last week announcing a series of initiatives aimed at spurring small business lending.

Credit Union National Association President/CEO Dan Mica has offered CUNA's assistance in the event that the administration, the U.S. Treasury Department, Congress, and the SBA decide to "achieve higher limits for key SBA programs, such as 7(a) and 504 programs." Credit unions can provide loans to businesses through these programs.

However, CUNA also steadfastly recommends that legislators lift the current cap on member business lending (MBL) by credit unions to 25% of a credit union's total assets, a move which CUNA has estimated could provide as mush as $10 billion in new small business loans. A bill that would lift the MBL cap, H.R. 3380, is currently awaiting action in the House Financial Services Committee.

Inside Washington

• WASHINGTON (10/29/09)--National Credit Union Administration (NCUA) board member Michael E. Fryzel visited Lake Michigan CU, Grand Rapids, Mich. "It was a pleasure discussing the success story of

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  this outstanding credit union with the officials responsible for its forward movement," Fryzel said. "They are true to their philosophy of providing financial products and services that bring superior value, security, and convenience to their members." Lake Michigan CU serves residents in 36 counties in western Michigan. It has 26 branch locations, 67 ATMs, and is Michigan's largest credit union. "Lake Michigan CU recently was ranked No. 12 in the U.S. in returns to members among credit unions over $1 billion in assets, and for the second year in a row was named one of West Michigan's ‘Best & Brightest' companies to work for," Fryzel added. From left are: Julie Blitchok, senior vice president of retail operations and marketing; Jeremiah Kossen, vice president of operations; Michael Winks, senior vice president of lending; Fryzel; Sandy Jelinski, president/CEO; Bill Schirmer, executive vice president/chief financial officer; and Michael DeFors, vice president of information services at the Michigan Credit Union League. (Photo provided by the National Credit Union Administration) ...

• WASHINGTON (10/29/09)--Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) are proposing legislation that would place a 30% withholding tax on income at foreign banks that do not disclose the identity and content of accounts owned by Americans (American Banker Oct. 28). The bill aims to boost an Internal Revenue Service (IRS) program where foreign institutions agree to confirm American depositors' identities and alert the IRS of earned income in the accounts. President Barack Obama said he supports the bill. Treasury Secretary Tim Geithner said it would narrow tax gaps and create a better tax system. The withholding tax is one of 13 provisions geared to punish tax havens, which could generate $9 billion during the next 10 years. Tax evaders cost the U.S. tens of billions of dollars per year in unpaid taxes, Baucus said ...

ABA convention attracts 5,000 bailout protesters

CHICAGO (10/29/09)--About 5,000 demonstrators from 20 states marched on the American Bankers Association convention in downtown Chicago Tuesday to express frustration with the banking industry's lack of transparency and accountability regarding $350 billion in federal bailout money.

The protestors included union members, community activists and taxpayers from 48 groups, including the Service Employees International Union (SEIU) and the AFL/CIO.

The march culminated three days of demonstrations demanding that banks stop lobbying against financial reform, end extravagant executive bonuses and halt home foreclosures that are ruining neighborhoods across the nation, said participants (PRNewswire and The Christian Science Monitor Oct. 27).

They also picketed the Chicago offices of Goldman Sachs Inc. and Wells Fargo & Co., and demanded that banks "end their over-reliance on greed and profits, and commit to using their taxpayer bailouts and backstops to help America's economy recover," said an SEIU press release.

Attendees at the ABA convention told The Wall Street Journal (Oct. 27) that the anger is misplaced and should not be directed at the group since ABA represents mostly community banks. A spokesperson for ABA issued a statement that said "bankers want smart regulation" and look to the government to fill the "gaps in the regulation of non-bank lenders," said the Christian Science Monitor.

The events kicked off Sunday with a gathering of hundreds of individuals who have lost their homes, jobs and pensions during the economic crisis. On Monday, Federal Deposit Insurance Corp. (FDIC) Chair Sheila Bair addressed nearly 1,000 of the group and reaffirmed her support for the proposed Consumer Financial Protection Agency (Reuters Oct. 27).

WesCorp sells $1.5 billion in three-year notes

NEW YORK and WASHINGTON (10/29/09)--Western Corporate (WesCorp) FCU Wednesday sold $1.5 billion in three-year government-guaranteed notes, according to IFR, a Thomson Reuters news service.

The National Credit Union Administration Wednesday morning confirmed that the $18 billion asset, San Dimas, Calif.-based WesCorp was offering the notes guaranteed by NCUA under the Temporary Corporate Credit Union Liquidity Guarantee Program.

J.P. Morgan and Bank of America were to serve as lead underwriters for the issuance, according to John J. McKechnie III, NCUA's director of public and congressional affairs, said Wednesday morning.

The medium term notes (MTN) issuance secures another source of funding to ensure bonds can be held to recovery, McKechnie said in an e-mail to News Now staff. "Given that much of the current corporate funding is short-term, the MTN issuance will enhance stability," he said. "The issuance is part of a normal process to maintain a balanced asset/liability mix, McKechnie said.

According to Reuters, the 1.75% notes were priced at 99.875 to yield 1.793%, or 35.9 basis points over comparable U.S. Treasuries.

Earlier this month, U.S. Central FCU, Lenexa, Kan., completed a similar offering of $4 billion in MTN. That issuance was completed Oct. 14.

Several corporate credit unions have issued debt in the form of commercial paper. Both U.S. Central and WesCorp had previously issued MTNs.

In other developments, Corporate America CU, based in Birmingham, Ala., filed a lawsuit Oct. 20 in a U.S. District Court in Alabama alleging that U.S. Central forced it to buy $9 million in paid-in-capital shares in U.S. Central several weeks before NCUA required U.S. Central to write down its mortgage-backed securities by $1.2 billion and injected $1 billion into the corporate (Kansas City Star Oct. 26).

Three months after Corporate America CU bought the securities, federal regulators placed U.S. Central into conservatorship.

NCUA's Corporate Stabilization Plan

Panama CUs learn advocacy benefits from Iowa league

DES MOINES, Iowa (10/29/09)--Advocacy and legislative activities topped the agenda for Panamanian credit union and trade association representatives who last week visited their counterparts at the Iowa Credit Union League (ICUL). The visit was part of World Council of Credit Unions' (WOCCU) International Partnerships Program.

A delegation from Panama recently met with representatives from the Iowa Credit Union league (ICUL). From left, are Murray Williams, ICUL chief operating officer; Leonor Samudio, COFEP board secretary; Thom Belekevich, World Council of Credit Unions consultant; Jacinto Villarreal, COFEP CEO; Patrick Jury, ICUL president/CEO; and José Montenegro, COFEP chair. (Photo provided by World Council of Credit Unions)

Representatives from the Corporación Fondo de Estabilización y Garantía de Cooperativas de Ahorro y Crédito de Panama, R.L., known as COFEP, met with the league to better understand and apply advocacy, and gain ideas for new products and services for Panamanian credit unions.

Effective lobbying can be challenging in many Latin American countries, including Panama because interactions with government officials are often seen as signs of corruption or under-the-table dealings. COFEP sought ICUL's advice on ways to keep legislative activities transparent and leverage member needs to positively influence legislation.

"In the U.S., credit unions have found advocacy to be a vital component of our movement's success," said Patrick Jury, ICUL president/CEO. "Everything credit unions do is impacted by the political process, so we must have a strong collective voice. Our goal is to help Panama's credit unions feel more comfortable in this process and create more urgency in their engagement with elected officials."

The delegation from COFEP, which began its WOCCU partnership with ICUL in 2006, included José Montenegro, chairman; Leonor Samudio, board secretary; and Jacinto Villarreal, CEO. The meetings helped determine how different products and services offered by ICUL and its subsidiaries might be adapted for use in Panama.

Also, the delegation studied cooperative business lending, matched savings programs using individual development accounts and ways to reach underserved populations.

The delegates met with Iowa Corporate Central CU representatives to discuss CD Access, a liquidity product. CD Access is a mechanism that credit unions needing liquidity can use to buy certificates of deposit from credit unions with excess liquidity.

The group discussed Iowa credit unions' success with investing in certificates of deposit at other institutions and how that process could work in Panama. COFEP delegates will present a CD Access to their board of directors and may engage ICUL in a webinar early in 2010 to promote the product.

The delegates also toured Iowa's Capitol and visited 1st Gateway CU, Camanche, and EdCo Community CU, Des Moines. Pat Drennen, 1st Gateway president/CEO and ICUL chair, discussed the credit union's goals for its products and services. 1st Gateway aims for each member to use 2.8 products and/or services by the year-end, Drennen said.

The credit union also analyzes service popularity for future planning.

The visit concluded with a planning session in which COFEP, ICUL and WOCCU mapped the next steps for the partnership in 2010. These steps may include a translated webinar on CD Access and/or cooperative business lending, a credit union-to-credit union partnership and a return visit to Panama by an ICUL delegation.

Resource Links

World Council of CUs

New Mexico CUs to launch Savings Revolution

ALBUQUERQUE, N.M. (10/29/09)--The Credit Union Association of New Mexico (CUANM) was awarded a $40,500 grant from the National Credit Union Foundation to launch a statewide Savings Revolution challenge.

Kathy Darwin, REAL Solutions consultant for the Credit Union Association of New Mexico (CUANM), and Mike Athens, CUANM vice president of association services, look over a $40,500 grant from the National Credit Union Foundation to launch a statewide Savings Revolution challenge. (Photo provided by Credit Union Association of New Mexico)

The year-long Savings Revolution is like Weight Watchers for your wallet, said Mike Athens, CUANM vice president of association services (CUANM Network October).

The program allows people to overhaul their financial lifestyles to save money and reduce debt with strategies supported by their credit union collaboration. The New Mexico challenge is the first statewide challenge, with six credit unions participating, Athens added.

"It comes under the umbrella of REAL Solutions to reach out to low-wealth individuals, new Americans and youth," he said. "Players will have financial issues and will benefit from the challenge."

The winner will receive a cash prize. The savings challenge targets families or individuals chosen by the six participating credit unions, although other members can get involved, said Kathy Darwin, REAL Solutions program coordinator for CUANM.

The Savings Revolution has two main components:

1. A savings challenge in which about 15-18 selected credit union members will compete to achieve defined savings and debt reduction goals, and build their credit. The participant(s) most closely reaching or exceeding their financial goals win the competition and receive a cash prize.

2. In the meantime, through online communications and other channels, other members can take the challenge using the same techniques. One goal is to have members network to set goals, share notes with those facing similar challenges and see how others respond to those challenges.

Participating credit unions are:

• Chino FCU, Silver City;
• LOCO CU, Alamogordo;
• High Plains FCU, Clovis;
• Guadalupe CU, Santa Fe;
• Everyone's FCU, Tucumcari; and
• Rio Grande CU, Albuquerque.

Each family or participant will have a credit union coach who will meet with them monthly to advise them, monitor progress and help them adjust their plans along the way, Darwin said. An outside accounting firm will tally the final numbers, looking for reduction in debt and an increase in savings and credit scores to find the winner.

"This is a fun way to help entire communities learn more about financial literacy and managing their finances as they do the same thing the contestants will be doing: reducing debt, and building their credit," Darwin said.

Resource Links

REAL Solutions

Are Your Savings Ready for Anything statement stuffer

Suze Orman site: Look at CU credit card options

MADISON, Wis. (10/29/09)--Personal finance expert Suze Orman is urging consumers to look into credit union credit cards as an alternative to the credit cards offered by large banks.

"I think what many of the major banks are doing to their credit card holders is a travesty," Orman says on her website, referring to the high fees and rates that some charge. "To fight back, I want all of you to look into credit union credit cards as an alternative."

Orman's website also features a blog posting by Ondine Irving, founder of Card Analysis Solutions. The posting is listed under "The Suze Scoop."

"Your best bet is to get a credit card from a credit union that owns its own program," Irving writes. Of the roughly U.S. 8,000 credit unions, about half have their own card programs, she said.

"I am strongly opposed to credit unions selling their card portfolios to banks," Irving added. "But in all fairness, some credit unions needed capital to either build new branches or utilize the funds for other purposes."

Credit unions offer the following with their cards, according to Irving:

• Fixed interest rates ranging from 7.95% to 17.95%, based on FICO scores. Federally chartered credit unions cannot charge more than 18%;

• Late fees of $20 to $25 with a five-day payment grace peiod;

• No penalty annual percentage rates (APR);

• No separate cash advance or balance transfer APRs;

• No annual fees; and

• Generous rewards programs, including points that can be redeemed on any airline with no blackout dates.

For more information, use the links.

Resource Links

Suze Orman website

The Suze Scoop featuring Ondine Irving

Credit Cards: Switch & Save statement stuffer

Oklahoma league opens ‘CU House’

OKLAHOMA CITY, Okla. (10/29/09)--More than 100 credit union professionals, volunteers and partners gathered to mark the official grand opening of Oklahoma Credit Union House Friday in Oklahoma City. The day, Oct. 23, also marked the Credit Union Association of Oklahoma's (CUAOk) 75th anniversary.

More than 100 people gathered at the official grand opening of Oklahoma Credit Union House Friday in Oklahoma City. Among them were, from left: Aaron Owen, Miller Tippens Construction; Doug Aldrich, building committee, Tulsa (Okla.) Teachers CU; Gary Bartley, building committee, Credit Union Service Centers; Gina Wilson, board of managers, Oklahoma Central CU, Tulsa; Michael Kloiber, board of managers, Tinker FCU, Oklahoma City; Kelly Diven, Board of Managers, 66 FCU, Bartlesville; Steve Rasmussen, chairman, CUAOk board of directors, FAA CU, Oklahoma City; DJ Morrow Ingram, president/CEO, CUAOk; Brent Taylor, board of managers, WEOKIE CU, Oklahoma City; Whit Todd, architect, kinslow, keith & todd; and Bill Lavin, building committee and board of managers, Credit Union One of Oklahoma, Oklahoma City. (Photo provided by the Credit Union Association of Oklahoma)

"This is a historic day for the Oklahoma credit union movement and our association," said Kelly Diven, chairman of the board of managers for Oklahoma Credit Union House and president/CEO of 66 FCU, Bartlesville. "It perfectly symbolizes the cooperative nature of credit unions and our partners."

Twenty-four Oklahoma credit unions gathered to create the limited liability corporation that built Oklahoma Credit Union House, Diven told the crowd. The 8,300 square foot building is debt-free and serves as a meeting and training facility for Oklahoma credit unions and houses CUAOk, formerly the Okahoma Credit Union League.

Oklahoma Credit Union House is one story and features a mezzanine with a balcony that boasts a view of Oklahoma's State Capitol building located about six blocks away. On the main floor is a meeting room that features state-of-the art technology that can accommodate 100 people classroom-style and is divisible by a movable wall. The association's board room can accommodate a meeting of up to 30 participants. The mezzanine offers a meeting area. The entire building has wireless Internet access.

"Our close proximity to the State Capitol serves to underscore the importance of advocacy to our association," said Steve Rasmussen, chairman of the CUAOk board of directors. "We will hold our annual State Government Affairs Legislative Reception here and will no doubt host many other legislative-related events and meetings."

Along with the 24 investor credit unions, a number of credit union partners and individuals invested in naming rights to rooms in the facility.

DJ Morrow Ingram, president/CEO of CUAOk, said there are a few remaining naming rights opportunities available. A paving brick program--where individuals or companies can purchase an engraved brick to be installed on the flag plaza--is ongoing.

In her remarks to the crowd prior to the ribbon cutting, Morrow Ingram said: "This house is your house. It will long serve as a powerful visual reminder that Oklahoma credit unions and the millions of members that they serve are an important piece of Oklahoma's commerce and one that will be a part of the political, business and consumer scene for a long time."

Wings Financial takes flight to diversify membership

APPLE VALLEY, Minn. (10/29/09)--Wings Financial FCU, which has primarily served employees of the airline industry, has taken flight to serve a larger and more diverse membership in the Midwest.

Wings Financial FCU, the largest credit union in Minnesota with $2.2 billion in assets, now serves individuals in 13 counties near the Twin Cities. It also can serve members in St. Croix and Pierce counties in Wisconsin (Star Tribune Oct. 26).

Apple Valley-based Wings, which is one of the U.S.'s largest credit unions, has 18 branches nationwide. Many are located in airports to serve those working in the air transportation industry, the newspaper said.

Mark Cummins, president/CEO of the Minnesota Credit Union Network, told the Tribune that credit unions--like Wings--that once served a narrower group of individuals may have asked themselves, "Is there going to be a nucleus of people within this one group that allows us to continue to offer services to a level that we want to be able to provide to our members?"

The credit union, chartered in 1938 to serve Northwest Airlines workers, serves employees of 30 air transportation companies--including 54 airlines--and has 123,000 members, the newspaper added.

Wings' latest partnerships include JetBlue, Colgan and SunCountry airlines. The credit union also received significant media attention when it attempted to take over Continental FCU, El Segundo, Calif. in 2007. Continental's board of directors rejected the merger proposal (News Now March 22, 2007).

CUs root for their World Series teams

HARRISBURG, Pa. and HIGHTSTOWN, N.J. (10/29/09)--Word Series mania has hit Pennsylvania and New York, and one state is caught in the middle--New Jersey. One credit union has embraced this rivalry by creating a World Series-themed fundraiser that will benefit children's hospitals.

Hamilton Horizons FCU, in Hamilton Township, N.J., has created a fundraising opportunity that embraces the rivalry between its members regarding the World Series, which kicked off Wednesday night in Yankee stadium. For each dollar donated to the Children's Miracle Network, the credit union will place a baseball under the donator's favored team--the Philadelphia Phillies or the New York Yankees. (Photo provided by Hamilton Horizons FCU)

Hamilton Horizons FCU, located in Hamilton Township, N.J.--which is in the middle of New York and Pennsylvania--has created a fundraiser that will run throughout the series. For each dollar a member donates to Children's Miracle Network, the credit union will place a red Philadelphia Phillies or blue New York Yankees baseball on the wall of the credit union under the team of the donator's choice. The funds raised will be split evenly between Children's Hospital of Philadelphia and Children's Specialized Hospital in Brunswick, N.J.

The New Jersey Credit Union League's 2009 Turnpike World Series predictions indicate that the state's bets on the series are split. About half--52.2%--said New York will win in six games. Another 21.7% predict New York will win in five.

Roughly 8.7% predicted Philadelphia will win in six games, and another 8.7% think the team will win in seven. New York was predicted to win in seven games by 4.3%, and Philadelphia in five by 4.3% (Weekly Update Oct. 28).

The series, which kicked off Wednesday night in Yankee Stadium, also has inspired a bet between credit union association CEOs in the teams' states. Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack and New York Credit Union Association President/CEO Bill Mellin have bet placed on the winning team that will leave one of them wearing either blue or red pinstripes. The loser will wear the color of the winning team at the Credit Union National Association's Governmental Affairs Conference in February (Life is a Highway Oct. 28).

CU System briefs

• OGDEN, Utah (10/29/09)--A nineteen-year-old was sentenced to 45 days in jail and ordered to pay restitution of nearly $10,000 for her part in a check-kiting scheme against three credit unions. Britney Kylie Thorp is one of four young women charged since June with communications fraud for opening checking accounts with bad checks. She was ordered to pay more than $4,592 to Weber CU, Riverdale, Utah; more than $4,006 to America First CU, Ogden; and more than $959 to Mountain America CU, West Jordan. The defendants allegedly used the funds to pay bills and cover expenses as opposed to buying big-ticket items, said police. Others charged included sisters Kelli Ann and Kari Marie Foprd, 19 and 20, respectively, and Jessica Ann Richardson, 21, of West Valley City. Their cases are pending. Richardson pleaded guilty earlier this month and will be sentenced Nov. 18 (Standard-Examiner Oct. 28) ...

• ST. LOUIS, Mo. (10/29/09)--A gym full of children counted down 3-2-1, the scissors cut the ribbon, and Gateway Metro FCU of St. Louis

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  opened its second student-assisted branch in an elementary school, this time at St. Ferdinand School in Florissant. At the opening, Gateway Metro President David Barton spoke to students from all grade levels about the importance of saving and the impact the new branch will have on their school. Here, credit union staff and students cut the ribbon on the new branch, which will open every Thursday from 11:30 a.m. to 1 p.m. Students will be entered in a drawing for a $50 Target gift each time they deposit $5 in their credit union account. In 2006, the credit union opened its first student branch at Our Lady of Guadalupe School. (Photo provided by Gateway Metro FCU) ...

• WICHITA, Kan. (10/29/09)--Beginning this week, Wichita's Southeast High School students can open a savings or checking account, use their debit card or apply for a 0% interest laptop loan at school through Credit Union of America's new Buffalo Branch. The branch is named for the school's mascot. It is the first financial institution branch inside a Wichita high school (The Wichita Eagle Oct. 28). Credit union President Bob Thurman told the newspaper he hopes the branch will help students establish credit by teaching real-world skills such as balancing a checkbook and paying bills on time. Students 15 and older can open a savings account with $5. Most other accounts require a signature from a guardian or parent. Students 16 and older can open a checking account without a co-signer if they complete an online tutorial and pass a test ...

• RALEIGH, N.C. (10/29/09)--State Employees' CU (SECU) members, through the SECU Foundation, have pledged $500,000 to the Vital Connections Capital Campaign for the expansion of the Hospice and Palliative CareCenter (HPCC) in Winston-Salem. HPCC will use the funds to add a Palliative Care Clinic and a new 10-bed wing to the Kate B. Reynolds Hospice Home, increasing the number of beds to 40 ...

Market News

MADISON, Wis. (10/29/09)

• Sales of new U.S. homes in September unexpectedly dropped--following five consecutive monthly increases--because tighter credit and fears of unemployment kept buyers from making purchases, analysts said. Single-family home sales dropped 3.6% below August sales levels to a seasonally adjusted annual rate of 402,000, the Commerce Department said Wednesday. A survey conducted by Dow Jones Newswires indicated that September sales were expected to rise 2.6% to 440,000. September sales have fallen back to the mid-year pace. Months of supply are flat at 7.5, and the median sales price is down 9% year-over-year. Despite the September downturn, the recent stabilization in the housing market--which caused the worst recession since the 1930s--is expected to help the U.S. economy return to growth in the third quarter, analysts said (Moody's Economy.com and the Wall Street Journal Oct. 28) ...

• For the fourth time in the past six months, orders for U.S. durable goods increased in September, signaling that factories are helping to usher in an economic recovery, analysts said. September saw a 1% increase, following the previous month's downwardly revised -2.6% (previously -2.4%). The September report ends the third quarter, with new orders rising at annual rate of 12.3%--up from the second quarter's 4% and the strongest since 2007, analysts said. Manufacturing gains are a reason economists are anticipating that a report due out today will indicate that the economy expanded in the third quarter at the fastest pace in two years, analysts said. "It's an encouraging bounce-back," said Sal Guatieri, a senior economist at BMO Capital Markets. "In the current market, the economy will be supported by a pickup in business investment. The recovery has some legs, albeit weak ones" (Bloomberg.com and Moody's Economy.com Oct. 28) ...

• For the week ending Oct. 23, the Market Composite Index--a measure of mortgage loan application volume--decreased 12.3% on a seasonally adjusted basis from one week earlier, according to the Weekly Mortgage Applications Survey released Wednesday by the Mortgage Bankers Association. The index dropped 2.8% on an unadjusted basis compared with the previous week, which included the Columbus Day holiday. The Refinance Index decreased 16.2% from the previous week, and the seasonally adjusted Purchase Index decreased 5.2% from one week earlier. The unadjusted Purchase Index rose 4.8% compared with the previous week, which was a holiday-shortened week, and was 15.4% lower than the same week one year ago. For Mortgage Applications Decrease in Latest MBA Weekly Survey, use the link ...

• States report that they have used federal stimulus money to save or create more than 388,000 jobs in 2009, according to a USA Today review of reports from 33 states and Puerto Rico. The report includes construction workers, teachers and others whose jobs were funded by stimulus money given to the states. This supports the Obama administration's claims that the $787 billion federal stimulus program has had a substantial effect on the economy, analysts said. The states' reports suggest that schools were impacted by the stimulus the most. More than 156,000 jobs have been saved or created, according to school job numbers reports from 23 states. On Friday, the administration intends to release reports from all 50 states, which would provide the most comprehensive accounting to-date of the impact of the stimulus plan, analysts said (USA Today Oct. 27) ...

News of the Competition

MADISON, Wis. (10/29/09)

• Kenneth Feinberg, special master for Troubled Asset Relief Program (TARP) executive compensation at the Treasury Department, last week announced steep cuts--about 50%--in total compensation at finance and auto companies under his control. However, he substantially increased regular salaries when banks complained, according to a Wall Street Journal analysis. Feinberg oversees seven companies: GMAC Inc., American International Group Inc., Citigroup Inc., Bank of America Corp., General Motors Co., Chrysler Group LLC and Chrysler Financial. All 136 employees and executives working at the seven companies under Feinberg's purview will earn significantly less this year than in 2008, even after factoring in the increase in base salaries (The Wall Street Journal Oct. 28) ...

• GMAC Financial Services Inc., a beleaguered consumer finance company, is in talks with the Treasury Department to see if the government will give the lender its third taxpayer bailout and provide the government a majority stake in the company, said sources familiar with the matter. The federal government is likely to inject $2.8 billion to $5.6 billion of capital into GMAC, following the $12.5 billion that the company has received since December, the sources said. Any new injection of government money into GMAC would likely take the form of a conversion of the government's existing preferred shares into common stock, the sources added (The New York Times and The Wall Street Journal Oct. 28) ...

Minnesota network, CUDL enter into marketing agreement

ONTARIO, Calif. (10/29/09)--The Minnesota Credit Union Network (MnCUN) has entered into a marketing agreement with CUDL, an indirect auto lending network for credit unions.

The two will market CUDL's auto lending products and services to credit unions in Minnesota. The partnership includes marketing CUDL's AutoSMART vehicle research website and program; the DecisionManager product; and CUDL risk management tools.

The goal of the partnership is to improve credit union member loan penetration in Minnesota, the companies said in a release.

CUDL, based in Ontario, Calif., services more than 700 credit unions and 9,000 dealerships nationwide.

Diebold launches ValiTech security for ATMs

NORTH CANTON, Ohio (10/29/09)--ATM manufacturer Diebold has released ValiTech, a two-factor authentication technology that uses a secure USB device to identify and authorize technicians who service ATMs.

Attacks against ATMs and customer transaction data are becoming increasingly sophisticated, so authenticating all users at the self-service channel is growing more critical by the day for financial institutions, Diebold said.

Prior to ValiTech, Diebold service technicians had to secure a temporary password, provided by the financial institution, each time they had to access the system level of the ATM. This practice holds true for any service technician accessing an institution's ATM, requiring multiple calls and generating numerous temporary passwords, Diebold said.

ValiTech links each authorized technician to a USB hardware device, using a digital certificate. Access is further controlled through a personal identification number or pass phrase, set by and known only to the technician, which ties the technician to the digital certificate and the USB device.

Through ValiTech, the ATM can identify the authorized Diebold associate accessing the system and grant restricted authorization to the unit's system functions based on the technician's role and status. ValiTech then creates an audit trail documenting each time a technician is granted access and recording all menu activities executed during the service call.

Resource Links

Diebold/CUNA Strategic Service

PSCU Financial offers holistic member-support approach

ST. PETERSBURG, Fla. (10/29/09)--PSCU Financial Services is offering a holistic approach to member support through its Total Member Care solution. The cooperative reported a 40% increase in member-service related call volume at its contact centers during the last two months.

The cooperative has 250 credit unions that outsource calls to Total Member Care representatives. The representatives handle account inquiries, balance transfers, password resets, loan applications, new member enrollment, account initiation and other topics. Member Care staff also can boost revenue through collections, outbound calling campaigns and cross-selling additional financial services

Total Member Care also offers advanced scripting models to help anticipate and address members' concerns.

Total Member Care builds an online database for each credit union's products, policies, procedures, locations, events, promotions and other services. The information is readily accessible to contact center representatives.

Thirty-three of the credit unions using the contact centers have more than $1 billion in assets. The centers handle 16 million calls a year for 1,300 financial institutions.

PSCU Financial Services is a credit union service organization based in St. Petersburg, Fla.