CU/System

• 105 indicted for Florida mortgage fraud
• Biz-lending collections topic of CUNA Council paper
• Calif. CU's card terms haven't changed in years, media told
• CU's op-ed: Teach young adults to manage credit
• Piedmont Advantage CU has a hit with 6.9% credit card
• Pa. large-CU CEO forum addresses challenges
• Springfield chapter prepares for the flu season
• California DFI shuffles CU division staff
• CU System briefs

105 indicted for Florida mortgage fraud

TAMPA, Fla. (11/6/09)--Roughly 105 individuals have been charged with fraudulently procuring more than $400 million in loans on more than 700 properties in Florida as a result of a nine-month Mortgage Fraud Surge investigation, announced the U.S. Attorney's Office for Middle Florida.

Those being charged with fraud for property and/or housing, or fraud for profit include lenders, real estate brokers, multiple borrowers, realtors, sellers, financial institution branch managers, financial institution employees, contractors, mortgage brokers and loan originators, the office said in a press release issued Wednesday..

Of the 105 defendants, 32 arrests were in Ft. Meyers, 30 in Tampa, 19 in Orlando and 24 in Jacksonville. The cases involve both mortgage schemes designed to defraud mortgage lenders and foreclosure-rescue schemes that prey on homeowners distressed by the economy. Some credit unions are believed to be among the victims.

There currently are already 500 defendants in federal mortgage fraud cases around the nation.

The newest investigation was conducted by the U.S. Attorney's Office and the Federal Bureau of Investigation (FBI) Tampa and Jacksonville divisions and spanned 15 different agencies, including the Florida Office of Financial Regulation.

The announcement said it is the first phase of a continuing effort to investigate and prosecute not only mortgage fraud professionals and other individuals engaged in multiple fraudulent mortgage transactions, but also larger organizations and even financial institutions.

Biz-lending collections topic of CUNA Council paper

MADISON, Wis. (11/6/09)--A rare confluence of events is occurring in the American economic landscape that offers credit unions once-in-a-lifetime business lending opportunities, according to the CUNA Lending Council.

Banks and other lenders are restricting credit to established business owners and the growing pool of new entrepreneurs laid off from corporate and other jobs during the recession. Evidence indicates that credit restriction will continue. The CUNA Lending Council recently released a white paper, "Business Lending Collections," which offers insight into the specialized field of collections.

The paper contains interviews with credit union lenders about the state of business lending and collections in the industry. Also included is information on third-party collections, negotiating with business owner members, recognizing red flags, creativity in collections and telephone call tips.

Several credit unions view the current environment as an opportunity to lend to small business owner members. They are ramping up their business lending portfolios and fine-tuning their business lending collections departments. Business collections--like business lending--succeed or fail depending on the quality of the relationship developed and nurtured.

"The key to effective business-lending collections is relationships--how you treat people," notes Bill Klewin, associate general counsel, CUNA Mutual Group, Madison, Wis. "You have to find people who work well with others, who have exemplary people skills."

An August Federal Reserve survey in reported that 55% of banks said their lending standards for business loans would remain tougher than long-term average levels until the second half of 2010. In the same survey, one in four banks said they decreased the limits for business credit cards over the past three years. Most bankers said their standards for credit card loans to their best customers would remain tighter than normal into 2011 and beyond.

Resource Links

Business Lending Collections white paper (lending tab)

CUNA Councils

Calif. CU's card terms haven't changed in years, media told

BAKERSFIELD, Calif. (11/6/09)--Many banks and credit card issuers are hiking their fees and rates to beat the clock before all provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 take effect. An article about that trend points out that one California credit union hasn't changed the terms of its credit card rates in years.

The proposed acceleration of the act's implementation date from Feb. 22 to Dec. 1 has prompted a hike in complaints and inquiries about credit card companies increasing their rates, says the California Attorney General's office (Bakersfield Californian Nov. 4).

The acceleration was absolutely necessary, Donna Severs, CEO of Bakersfield (Calif.) City Employees FCU, told the newspaper. Some lenders, including predatory lenders, "were rushing to circumvent the intent of the law by putting in place exactly the kinds of changes that the law would make illegal," Severs said.

She noted that the credit union hasn't changed the terms on its Visa cards in years.

Kern Central CU CEO Carl Trejo told the newspaper Kern Central increased rates on some cards in October but the timing wasn't related to the new law or delinquencies. Trejo said the credit union performs quarterly surveys and it found it was below market.

The article noted that Chase Bank has recently converted some of its fixed-rate cards to adjustable rates. Wells Fargo notified cardholders in October that most would see interest rates climb up to 3% beginning Nov. 30. Bank of America wouldn't boost its rates again before February unless the borrower misses two or more payments in 12 months.

Analysts said that consumers will see more initially low promotional offers that increase their interest rates significantly after several months and that consumers will need to stay on top of when the promotional rates end because some banks charge interest retroactively if the balance isn't paid off by the expiration date.

Resource Links

Bakersfield Californian original article

New Law Shows CU Cards Still the Best statement stuffer

CUs in the Media

CU's op-ed: Teach young adults to manage credit

ROCK HILL, S.C. (11/6/09)--Teaching young adults how to prudently manage their credit before they go into the real world is vital in today's economy, according to an opinion piece by a local credit union staffer in a South Carolina newspaper.

"With the economy being at such a low point, young adults need to learn how to build and maintain good credit," wrote Jennifer Panther, a certified financial counselor for the $231.7 million-asset Family Trust FCU in Rock Hill, S.C., in a Thursday op-ed article in The Herald.

"Before helping your children establish credit, teach them about credit," she continued. "Explain to them the concept of credit, the responsibilities that come with using credit, and the reason credit is out there. Start by showing them one of your credit card statements. Show them how to read it, how interest accrues, and how late fees and over-limit fees can apply.

"Stress to them that every swipe of their card will count and appear on the statement," she added.

To read the article, use the link.

Resource Links

The Herald op-ed

CUNA Resources for Youth & Young Adults

Create a College Budget statement stuffer

CUs in the Media

Piedmont Advantage CU has a hit with 6.9% credit card

WINSTON-SALEM, N.C. (11/6/09)--Piedmont Advantage CU is offering a credit card with a 6.9% fixed rate and without annual fees. The credit union has opened nearly 700 Visa accounts and approved $3 million in balance-transfer requests.

Most credit union members who are transferring balances are trying to find a financial partner to understand their circumstances and help them, the credit union said.

"One member is dealing with cancer and had to charge some surgeries on her credit card accounts," said Judy Tharp, Piedmont Advantage president/CEO. "Not only was she having to deal with being sick, she had to worry about making ends meet with a 15% variable card."

Most people who transfer their balances to Piedmont have good credit histories, but have seen their interest rates skyrocket as their card providers try to turn a profit during the recession, Piedmont said.

"Our members have shown a lot of enthusiasm for this new product," Tharp said. "It's very simple to understand--no tricks, no gimmicks, no gotcha fees."

Piedmont said it researched other cards and could not find a lower rate. The average annual percentage rate on a credit card is around 9.5%, according to Bankrate.

"Many lower-interest cards are hard to get now since credit is so tight," Tharp said. "And others come with fees that don't make them a very good deal."

Piedmont Advantage CU has $238 million in assets.

Resource Links

Credit Cards: Switch & Save statement stuffer

New Law Shows Credit Union Cards Still the Best statement stuffer

Pa. large-CU CEO forum addresses challenges

HARRISBURG, Pa. (11/6/09)--Attendees at the Pennsylvania Credit Union Association's (PCUA) Large Credit Union CEO Forum in Hershey, Pa., Wednesday discussed the challenges the credit union movement is facing.

Rep. Jim Gerlach (R-Pa.), who is a member of the House Financial Services Committee, updated attendees on pending legislation regarding a proposed Consumer Financial Protection Agency, credit card reform and systemic risk (Life is a Highway Nov. 5).

Stan Hollen, CEO of CO-OP Financial Services, provided an overview of the payment systems marketplace and future innovations using CO-OP's Next Generation Network, fast branch kiosks and mobile services.

Hollen commended credit unions for their iBelong campaign to attract membership.

"You're doing it right with the focus on membership," Hollen said. "If membership is growing, everything else is okay."

Other speakers included Dr. Terry Madonna, political professor and pollster, who spoke about elections in the state for the U.S. Senate and governor; and State Treasurer Rob McCord, who restated the State Treasury's commitment to PCUA's Credit Union Better Choice program. Credit Union Better Choice is a payday lending alternative program.

McCord said he is "honored to be a credit union friend" and that "credit unions are fulfilling consumers' flight to quality and need for trust."

The forum was scheduled to finish Thursday with a speech by CUNA Mutual Group President/CEO Jeff Post about why the credit union system is needed now more than ever.

Resource Links

iBelong campaign

We're Here for You drive-up envelope

Springfield chapter prepares for the flu season

SPRINGFIELD, Mo. (11/06/09)--The Springfield (Mo.) Chapter of Credit Unions met Oct. 30 for its fall breakfast to discuss the fears of H1N1 and a severe pandemic flu season, which are dominating news coverage in Missouri.

Brent Davis (standing) of Postal Federal Community CU shares his flu season disaster-recovery plan with members of the Springfield (Mo.) Chapter of Credit Unions. (Photo provided by the Missouri Credit Union Association)

Brent Davis, internal audit officer at Postal Federal Community CU, Springfield, shared the credit union's pandemic flu disaster recovery plan with the group, according to the Missouri Credit Union Association (MCUA) (The Missouri difference Nov. 4).

Davis advised attendees to be informed, take preventative measures, communicate with staff, and expect increased staff absenteeism.

"This is a level-headed and measured approach that will remove confusion and fear to allow your credit union to continue providing great member service. Now, go wash your hands," he said.

MCUA encouraged its member credit unions to implement these precautions to help stop the flu from spreading:

• Provide hand sanitizers in the office, especially on the front lines where tellers interact frequently with the public;

• Encourage ill employees to stay home if they have flu-like symptoms;

• Offer reimbursements to employees who get the flu vaccine; and

• Send employees information on how to prevent the flu. MCUA provided a sample brochure.

Resource Links

CUNA Disaster Preparedness/Pandemic information

California DFI shuffles CU division staff

SACRAMENTO, Calif. (11/6/09)--The California Department of Financial Institutions (DFI) announced management changes in its Credit Union Division.

The changes may affect a credit union's point of contact for administrative applications--such as field of membership expansions, bylaw amendments, merger applications, statutory approvals and regulation variances, said the DFI.

The changes also may affect examination scheduling, and other relevant dialogue regarding a credit union's strategic business plans and general financial condition, DFI said.

Also, two new regional portfolio management positions were established to provide better coverage for the increasing workloads of regulatory matters relating to state-chartered credit unions, DFI added.

In Northern California, Lara Leung will be joining Lana Tom, out of San Francisco, as the two portfolio managers for that area.

In Southern California, Les Thompson will be joining Joni Kimbrell, as the two portfolio managers for that area.

For more information, use the link.

Resource Links

California Department of Financial Institutions Directory of State-chartered CUs

CU System briefs

• NEWARK, Del. (11/6/09)--Newark Delaware City Employees FCU (NDCEFCU) has merged into Louviers FCU, announced Louviers President/CEO James E. Everhart Jr. (Together Nov. 4). The merger will allow NDCEFCU members to take advantage of several branch locations and additional products and services such as mortgages, internet banking and bill payment, student loans, checking accounts, credit and debit cards, and small business financial services. "It's a positive move for Louviers as we reach out to serve more members of the greater Newark, Delaware and Cecil County, Md., areas," he said ...

• SAN DIEGO, Calif. (11/6/09)--John Tippets has been hired as the new president/CEO of North Island CU based in San Diego, the credit union announced. He started Thursday, and replaces Michael Maslak who retired in January. Tippets is former CEO of the American Airlines FCU, Dallas, which has $5.4 billion in assets and is the ninth largest credit union in the nation. He retired in June 2008 after 42 years in the airline industry, the last 17 as the credit union's CEO. "North Island Financial CU has long been recognized for its strength and innovation in providing high quality financial services to consumers and businesses in San Diego," said California and Nevada Credit Union Leagues President/CEO Bill Cheney. He noted that Tippets " is a highly regarded national credit union leader who will continue that tradition" and is a "welcome addition to the California credit union community" ...

• VENTURA, Calif. (11/6/09)--Joseph Schroeder, a long-time leader in the California credit union movement, is the new president/CEO of Ventura (Calif.) County CU (VCCU). He will replace Carol A. Harris, who recently retired after 22 years at VCCU. Schroeder has more than two decades of senior-level credit union management experience as president/CEO at three of southern California's largest credit unions, and as a vice president over both operational and marketing departments. VCCU has $483 million in assets ...

• TACOMA, Wash. (11/6/09)--Tacoma, Wash., Mayor Bill Baarsma declared Oct. 27 as "TAPCO CU Day." The credit union celebrated its 75th anniversary that day, thanking its board, employees and members for helping the credit union through the nation's economic crisis. TAPCO has $243.9 million in assets. From left are: Denis Timmerman, supervisory committee chair; board members Jeanne Werner-Spaulding, Richard Williams, Pat McElligott (in front), and Rob Masko; David Smith, credit union service organization board member; John Bechtholt, CEO; Mike Weinman, consultant; and Mike Fitzgerald, supervisory committee member. (Photo provided by TAPCO CU) ...

• YUBA CITY, Calif. (11/6/09)--Sierra Central CU evacuated its staff and members at about 9:15 a.m. Thursday because of a strange odor that caused individuals to have eye irritation (TheUnion.com Nov. 5). Firefighters were searching the building to find the source of the odor. Credit union Manager Tamara Salas told The Union that some thought the smell was chemical or like burnt wiring. The credit union's employees were checked out by an emergency medical technician to make sure they were okay. Sierra Central CU, Yuba City, Calif., has $651 million in assets ...