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CPDOnline is a web-based training service that includes everything you need to manage your credit union training program from start to finish.

— FACT Act Guidelines and Rules on Identity Theft “Red Flags” and Change of Address Discrepancies

[More]

 

— Compliance Frequently Asked Questions - April 2008 Publication
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April 17, 2008


> An award-winning publication of the Virginia Credit Union League.
> Your comments and submissions are always welcomed. E-mail pr@vacul.org.
> Visit the Virginia Credit Union League Homepage

> Previous Issue

 

In Today’s Edition …

 

Headline News

Education & Networking Opportunities

Compliance/Regulatory Affairs News

Governmental Affairs News

League News

Chapter News

Financial Literacy News

News From Credit Unions

 

News About Credit Unions

Consumer/Marketplace News

Technology News

Security/Fraud Prevention

Competition News

 

Headline News

 

Retired Member One FCU CEO Dick Williams Wins Farley Award

Credit union leader and financial literacy advocate Richard L. “Dick” Williams has been honored with the Virginia Credit Union League’s prestigious Eugene H. Farley Jr. Award of Excellence for his service to Virginia’s credit union community. The award was presented April 11 at the League’s 74th Annual Meeting in Norfolk. Williams recently retired as President/CEO of the $365 million, Roanoke-based Member One Federal Credit Union, after a more than 40-year career in the credit union movement.
[MORE HERE]

 

Belvoir FCU’s Marciniak Honored for Volunteer Service with 2008 Kirsch Award

Virginia’s credit unions saluted longtime volunteer Frank Marciniak for his service to the movement during a special presentation April 11 at the Virginia Credit Union League’s 74th Annual Meeting. Marciniak was awarded the League’s prestigious James P. Kirsch Lifetime Achievement Award, which recognizes individuals for extraordinary service to their credit union and the greater credit union community.

[MORE HERE]

 

Virginia League, Estonian Cooperatives Sign Partnership Agreement

Virginia’s credit unions will participate in a partnership to provide technical assistance and support to credit cooperatives operating in the Baltic republic of Estonia. The partnership agreement was signed during an historic ceremony at the Virginia Credit Union League’s Annual Meeting on April 11, and is being coordinated by the World Council of Credit Unions (WOCCU). WOCCU’s International Partnerships Program brings together credit union movements from around the world to exchange ideas and technical expertise with the goal of building stronger institutions for the benefit of their members.

[MORE HERE] 

 

2008 CU Cherry Blossom Run Raises a Record-Setting $1 Million for CMN

Credit Union Miracle Day, Inc. (CUMD), sponsors of the 36th annual Credit Union Cherry Blossom Ten Mile Run®, has exceeded its goal of raising $1 million to benefit Children’s Miracle Network and its 170 affiliated children’s hospitals nationwide. Your League is a proud sponsor of the Cherry Blossom Run. “We are very pleased with these results which clearly demonstrate our commitment to helping children who need it most to get quality medical treatment,” said Juri Valdov, Chairman of Credit Union Miracle Day, Inc. “It reconfirms the credit union philosophy of ‘People Helping People’ and the credit union cooperative spirit.  Through our 130 partnering credit unions and business partners in 30 states, we were able to hit this mark. Our lead partner, PSCU Financial Services, has underwritten the title sponsorship expenses which allows us to send more contributions dollar-for-dollar back to local children’s hospitals.” 

[MORE HERE]

 

Annual Meeting News & Notes


League Election Results

The following individuals were elected to the League Board of Directors.

  • Barbara Lockard (Partners Financial Federal Credit Union) retained her Region 2 seat, representing credit unions with $50 million or more in assets. She will serve a three-year term.

  • Cheryl Dickerson (Fairfax City Federal Credit Union) retained her Region 3 seat, representing credit unions with less than $50 million in assets. She will serve a three-year term.

  • Incumbent Audrey Bollinger (Peoples Advantage Federal Credit Union, Region 2) was elected to a three-year term on the League Board as an At-Large Director.

  • Gaye DeCesare (Belvoir Federal Credit Union, Region 3) was elected to a three-year term on the League Board as an At-Large Director. This is her first term on the board.

  • Paul Phillips (Freedom First Federal Credit Union, Region 4) was elected to a two-year term on the League Board as an At-Large Director. This is his first term on the board.

 

Board Elects Executive Committee

During its reorganization meeting on April 11, the League Board of Directors elected the following officers.

  • Chairman – Stan Leicester (BayPort Credit Union, Region 1 Director, representing credit unions with $50 million or more in assets)

  • Vice Chairman – Bob Petty (Bronco Federal Credit Union, At-Large Director)

  • Treasurer – Suzanne Hughes (University of Virginia Community Credit Union, Region 3 Director, representing credit unions with $50 million or more in assets)

  • Secretary – Michael Guida (membersTrust Credit Union, Region 1 Director, representing credit unions with less than $50 million in assets)

  • Immediate Past Chairman – Cliff DeMars, having completed a three-year term as Chairman, will continue to serve on the League Executive Committee as Immediate Past Chairman. DeMars represents Region 4 credit unions with $50 million or more in assets.

 

Virginia Credit Union Services Inc. (VACUS) Officers Elected

The League Board elected the following officers for Virginia Credit Union Services Inc. (VACUS).

  • Chairman – Bill Cook (Northwest Federal Credit Union, At-Large Director)

  • Vice Chairman – Audrey Bollinger (Peoples Advantage Federal Credit Union, At-Large Director)

  • Treasurer – Suzanne Hughes (University of Virginia Community Credit Union, Region 3 Director, representing credit unions with $50 million or more in assets)

  • Secretary – Barbara Lockard (Partners Financial Federal Credit Union, Region 2 Director, representing credit unions with $50 million or more in assets)

 

League Bylaw Amendments Approved

Voting delegates approved three bylaw amendments at the Annual Meeting:

  1. Delegates voted to eliminate Virginia residency as a requirement to be a League director. Given that the actual member of the corporation is the “credit union,” an individual’s home address shouldn’t play a role in his or her qualifications to serve on the League Board, notes the League Board.

  2. Delegates approved an amendment whereby the bylaws now expressly deny the League President voting privileges as an ex-officio member of the League Board. Although the League President traditionally does not have voting rights, Robert’s Rules of Order suggest an ex-officio member should have voting rights unless specifically prohibited.

  3. Also approved was an amendment automatically naming the credit union CEO as a voting delegate unless notified otherwise by the member credit union. This change will serve to validate more ballots and will not restrict the ultimate authority of the credit union to name its delegate(s).

 

VACUPAC Golf Tourney Raises $14,660

Thank you for a successful 20th Annual Virginia Credit Union Political Action Committee (VACUPAC) Golf Tournament. This was the second year we’ve scheduled the tournament as part of the Annual Meeting, and thanks to your support, we raised $14,660! Special thanks to the 106 golfers who joined us, and to the stellar lineup of sponsors who made it possible for all golfer registration fees to go directly to VACUPAC. Here’s the list of our fine sponsors:

 

Tournament Sponsor

FISERV EFT

 

Beverage Cart Sponsor

Credit Union Service Company of Virginia, LLC (CUSCVA)

Virginia Credit Union Services, Inc. (VACUS)

 

Lunch Sponsor

Palmetto Cooperative Services, Inc.

 

Breakfast Sponsor

NSWC Federal Credit Union

Virginia Credit Union

 

Prize Sponsor

BayPort Credit Union

Beach Municipal Federal Credit Union

Celco Federal Credit Union

Entrust Federal Credit Union

Northwest Federal Credit Union

 

Hole Sponsor

ABNB Federal Credit Union

Apple Federal Credit Union

BayPort Credit Union

Bellwood Federal Credit Union

Belvoir Federal Credit Union

Bronco Federal Credit Union

Celco Federal Credit Union

Dominion Credit Union

Fairfax County Federal Credit Union

Fort Lee Federal Credit Union

Hampton Roads Chapter

Martinsville DuPont Credit Union

Northern Star Credit Union

NoVa Chapter

Peoples Advantage Federal Credit Union

Piedmont Chapter

 

Community Involvement Committee’s Silent Auction Raises Almost $6,800

Your League’s Community Involvement Committee raised $6,795 through its Bid$ 4 Kids Silent Auction on April 10 at the League Annual Meeting. The funds will benefit the Children’s Miracle Network (CMN) hospitals serving the Commonwealth. Many thanks to all the credit unions, chapters and vendors that participated by providing auction items. We had an astounding 88 items! This was the Community Involvement Committee’s first Silent Auction and we appreciate your help in making it such a success!

 

CMN Salutes Virginia’s Credit Unions!

CMN Presentation to Virginia's CUs  

Brenda Kuntz, program director for Children's Miracle Network at Children's Hospital of The King's Daughters in Norfolk, saluted Virginia’s credit unions on April 11, with a special presentation recognizing our $248,961 donation to CMN in 2007. Accepting the plaque is League Community Involvement Committee Vice Chairman Ben Gravely, of Martinsville DuPont Credit Union.

  

Brenda Kuntz, program director for Children's Miracle Network at Children's Hospital of The King's Daughters in Norfolk, saluted Virginia’s credit unions on April 11, with a special presentation recognizing our $248,961 donation to CMN in 2007. CMN has been the League’s charity-of-choice since 2003, during which time Virginia’s credit unions have collectively donated some $665,000.

 

 

 






League Recognizes Retiring Lobbyist Chuck Zuver

Virginia’s credit unions recognized the service of “retiring” League lobbyist and consultant Chuck Zuver with a special resolution and presentation at the Annual Meeting Banquet. For the past few years, Zuver – who previously lobbied for the Credit Union National Association before retiring – has served as our lobbyist in Washington, D.C. and has been a key consultant in the development of our strategy on federal issues. “We’ve truly been fortunate to have the benefit of Chuck’s experience and his many contacts in Congress,” notes League President Rick Pillow. “We’ve been blessed to be one of the few League’s with a presence on Capitol Hill and we appreciate Chuck’s efforts in helping us build a rapport with Virginia’s Congressional delegation.”

 

CUSCVA Election Results

Three incumbents are returning to the Board of Directors for the Credit Union Service Company of Virginia (CUSCVA), which runs Virginia’s shared branching operation. Re-elected to three-year terms (expiring 2011) are: Chris Anuswith (Guardian Federal Credit Union), Rose Gilliam (DuPont Fibers Federal Credit Union), and Carl Ratcliff (ABNB Federal Credit Union). CUSCVA will elect officers at a future meeting.

 

League Annual Report Available Online

Those interested in viewing the electronic version of the League’s 2007 Annual Report can download a pdf copy at this location: http://www.vacul.org/about_us/

 

Mark Your Calendar

Mark your calendar … We return to Reston next year for the 75th Annual Meeting of your League! Dates: May 7-9, 2009. We’ve got big plans for our 75th anniversary, so don’t dare miss it! 

 

CUs Make Most of Shad Planking; Reach Out to Politicians

On Wednesday, credit union representatives showed up in force at the annual Shad Planking in Wakefield. The fish fry is the traditional start to Virginia’s election season. Credit union members busily handed out credit union promotional items to visitors to the League booth, and volunteers “stickered” almost all of the 3,000 attendees with the slogan "My Credit Union Is Me." Former Gov. Mark Warner, who is now running for the U.S. Senate, told credit union members that he is grateful for credit unions' past support. "I remember!" he said. Credit union members also greeted former governor and current U.S. Senate candidate Jim Gilmore, as well as state Delegates Riley Ingram (R-Hopewell), Steve Shannon (D-Vienna), Bill Barlow (D-Smithfield), Bobby Mathieson (D-Virginia Beach), and Steve Landes (R-Weyers Cave). Credit union supporters also had the chance to greet state Sen. Steve Martin (R-Chesterfield).

> Progress-Index: The trio of Senate hopefuls were the stars at the 60th Shad Planking.

[MORE HERE]

 

Education & Networking Opportunities

 

All About Branding: Marketing Workshop Set for April 30

We have all heard that branding is about the logo, colors, print materials and promotions created in the Marketing Department. The truth is that branding is about the members’ experiences with your organization, which involves Member Services, Lending, Accounting and even the Information Systems Department. Come learn how branding is not just a “marketing thing” anymore at the Credit Union Marketing Council of Virginia’s April 30 workshop in Richmond. When: April 30, 10 a.m.—2 p.m. Where: Brandermill Country Club (Midlothian). Cost: $69 per person on or before April 11; $79 per person after April 11. Discount: Just $49 registration for each additional attendee from your credit union!
[MORE HERE]
[REGISTER HERE]

 

Spring Compliance Conference May 6-7: Register Now

Two days of essential compliance training are on tap at this year’s Spring Compliance Conference, May 6-7, in Williamsburg. On day one, Mary-Lou Heighes, president of Compliance Plus, Inc., will review the most important regulatory issues for credit unions today, including the new rules and guidelines for Identity Theft Red Flags and Address Discrepancy Procedures and third-party vendor due diligence. Tom Winn and Dan Summerlin, of Woods Rogers PLC, will spend day two on an in-depth discussion of Human Resources issues that affect credit unions. Location: Crowne Plaza Williamsburg at Fort Magruder.
[MORE HERE]

[REGISTER NOW] (Deadline is April 30)

> Or, download the registration form (pdf, 17kb)

 

How to Coach Your Employees

The role of manager/supervisor is one of the most challenging in the credit union movement. Your time and attention can be pulled in many directions, including member service, staffing and personnel issues, and operational decision-making. Join us May 13 for “Coaching Credit Union Employees For Peak Performance,” a unique program designed to help you improve your coaching abilities and boost your confidence. Location: Sheraton Park South (9901 Midlothian Turnpike, Richmond).

[MORE HERE]

[REGISTER HERE]


Creating a Member-Focused Sales/Service Culture

To fulfill our mission and to take our credit union’s service from average to “Wow!” we must be fast, accurate and friendly. We must also identify the member’s financial needs and learn how to effectively suggest how we can improve their financial life. Learn what it takes to put your credit union on the fast track to a true sales culture – one that’s driven by motivated employees, focused on service, and capable of producing a long-term bottom line impact. Date and Time: May 14; 9 a.m. until 4 p.m. Location: Sheraton Park South (Richmond).
[MORE HERE]  

[REGISTER HERE]

 

Missed 'CU Response to Economy' Webinar? Replay It!

Don’t worry if you missed the first of a series of Webinars on "CU Responses to the Current Economy" presented Thursday by the Credit Union National Association's (CUNA) economists. The Webinar will be archived and credit unions who missed it can replay it. And they can sign up for the rest of the e-School series, which starts at 1 p.m CDT on Thursdays for six weeks. The first session provided a 45-minute overview by CUNA chief economist Bill Hampel and senior economists Mike Schenk and Steve Rick, followed by a discussion by participants.

[MORE HERE]

 

CUNA Mutual Discovery Conference June 18-21

CUNA Mutual Group’s 2008 Discovery Conference will be held June 18-21, in Hollywood, Fla., at the Westin Diplomat Resort and Spa. Discovery 2008 offers more than 45 learning sessions, keynote presentations by Marcus Buckingham and Peter Sheahan and an abundance of networking opportunities. For complete information on Discovery Conference, accommodations, and to register, go to www.cunamutual.com/save. Direct questions to Linda Nesheim (linda.nesheim@cunamutual.com), 800-356-2644, ext. 8892, or Paula Shaw (paula.shaw@cunamutual.com) ext. 7505.

 

Southeast Directors Conference July 13-16

Credit unions are charged with guiding their member-owners to financial paths that change lives and lead to prosperous futures. Through knowledge of industry trends and environments, credit union directors become better equipped to make decisions that positively influence a credit union’s ability to light the paths to financial well-being. Join us as Mississippi hosts the 2008 Southeastern Regional Directors Conference for your opportunity to shine a light on the information you need to lead your credit union and member-owners to bright futures. The conference will be held July 13-16, at the beautiful Beau Rivage Resort in Biloxi, MS. The event will feature informative educational sessions that will help directors better understand disaster planning, the regulatory environment, the political environment and how the economy affects credit unions. In addition, directors can develop their own professional skills as well as their ability to lead credit unions with sessions on negotiations, the changing role of credit union boards and directors, the secrets of service professionalism, and more.

[MORE HERE]

 

Compliance/Regulatory Affairs News

 

CUNA, Treasury Meet on CU Issues

Credit Union National Association (CUNA) representatives met Monday with U.S. Treasury Assistant Secretary for Financial Institutions David Nason and other Treasury official to further discuss CUNA's opposition to certain provisions of the agency's regulatory reform ideas. The CUNA team also discussed prompt corrective action reform proposals, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), which contains a PCA reform provision, and the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) with Nason, his deputy assistant secretary Jeremiah Norton and other Treasury representatives. The CUNA contingent included President/CEO Dan Mica, Senior VP of Legislative Affairs John Magill, General Counsel Eric Richard, and Deputy General Counsel Mary Dunn.

[MORE HERE]

 

CUNA Files FOIA for Treasury Plan

CUNA has filed a Freedom of Information Act request for documents submitted to the U.S. Treasury Department from banking associations as part of the process to develop the Department's recent proposal for sweeping regulatory overhaul. Part of that proposal included eliminating the credit union charter, as well as the thrift charter, and several media sources have speculated on the roles different trade organizations might have played in the proposal's development. (Credit Union Times, April 7)

 

Regulatory Expert: How NCUA Safeguards Your Money

How safe is your money when you deposit it at the credit union? National Credit Union Administration (NCUA) Vice Chairman Rodney Hood explained the ins and outs of deposit insurance and what it means for consumers during the Home & Family Finance radio show on the Radio America Network.

[MORE HERE]

 

Third-Party Info Distributed to CUs

A new questionnaire that National Credit Union Administration (NCUA) field staff will use to complete the evaluation of credit union third-party relationships has been distributed by the agency to federally insured credit unions. Examiners will evaluate third-party relationships based on the risk of each relationship and will use the questionnaire to document the review. The questionnaire names the following three elements of an effective program, as discussed earlier by the NCUA in an enclosure to a December 2007 letter (07-CU-13.) The three elements are: (1) Risk Assessment and Planning; (2) Effective Due Diligence; and (3) Risk Measurement, Monitoring, and Control.

[MORE HERE]

 

Compliance: CU Boards' Role in Third-Party Relationships

A credit union board of directors has an important role in assuring third-party relationships further a credit union's mission, and every director should be on top of the issues involved, advises a compliance article in the April issue of Credit Union Magazine. The article notes that the National Credit Union Administration (NCUA) has designated third-party relationship reviews a 2008 regulatory "hot topic," backed by a 2007 supervisory letter on evaluating vendor relationships.
> The Credit Union National Association (CUNA) is sponsoring a May 13 audio conference called "Due Diligence with Third Party Vendors – Getting it Right!"

[MORE HERE]

 

NCUA Offers Counsel on Reclassifying Construction Loans

Credit unions may reclassify a construction and development loan as a member business loan when the level and kinds of risks for which those limits are in place are no longer present, the National Credit Union Administration (NCUA) recently advised. (Credit Union Times, April 7)
[MORE HERE]

 

CUNA Seeks Comment on NCUA Honesty Standard

The Credit Union National Association (CUNA) is asking credit unions to comment on a federal regulatory proposal designed to clarify a law that bans dishonest persons from working at credit unions. It has requested comments by May 22. The proposed rule by the National Credit Union Administration (NCUA) seeks to explain more precisely the meaning of a section of the Federal Credit Union Act intended to accomplish that objective.

[MORE HERE]

 

Governmental Affairs News

 

Lt. Gov. Bill Bolling Visits League Office

Lt. Gov. Bill Bolling visited the League office on Tuesday to talk to League President Rick Pillow about credit unions and our role in the marketplace. “We appreciate Lt. Gov. Bolling taking time out of his busy schedule to visit with us,” said League President Rick Pillow. “I think it speaks volumes of the respect he holds for credit unions and our grassroots influence that he reached out to us to schedule the visit.” Topics covered included payday lending and the alternatives credit unions have developed to save consumers on fees and help them avoid the cycle of debt so common with payday loans from for-profit operations. Rick noted that while credit unions have always offered small loans, the last few years have brought an increase in formal payday loan alternative programs, mostly because they are more easily marketed.

[MORE HERE]

 

100% for VACUPAC

We are proud to report Virginia Credit Union Political Action Committee (VACUPAC) “100%” donations (all pin level) for the following credit unions:
* Belvoir Federal Credit Union - executive staff

* DuPont Community Credit Union - board

* Martinsville DuPont Credit Union - board and volunteer committee members

* Virginia Credit Union - board and volunteer committee members

* Virginia Educators Credit Union - board

Thank you for your support!

 

Legislators Appreciate Apple FCU, Fort Lee FCU Updates on Financial Literacy

April is Financial Literacy Month, so Apple Federal Credit Union took advantage of the opportunity to contact state Sen. Jill Holtzman Vogel (R-Winchester) with information on what Apple is doing to help teach people how to manage their finances. The senator responded: "It is really nice of you to take the time to send me this update. I am impressed and appreciate what a good corporate citizen you are." Fort Lee Federal Credit Union reports that an aide to Sen. John Warner (R-VA) personally called them to thank the credit union for its efforts in promoting financial literacy. Way to go!
> April is Financial Literacy Month AND Small Business Month. May is Military Appreciation Month. Use these designations as a natural opening to contact your state and federal legislators to let them know what your credit union is doing on these fronts.

 

Lawmakers Send Assurances to CUs

The chairman of the House Financial Services Committee and a high-ranking Republican member of that panel have each sent credit unions their assurances that Congress values the unique role of financial services cooperatives. Chairman Barney Frank (D-Mass.), in a letter to the Credit Union National Association (CUNA), wrote that the U.S. Congress appreciates the role credit unions play in the country's financial services system. Frank acknowledged CUNA's concerns regarding the devastating affect the U.S. Treasury Department's proposal for financial institution regulatory restructuring could have on credit unions. He said that any proposal to do away with credit unions is a proposal that will go nowhere. On April 7, Rep. Ron Paul of Texas, who is the ranking member on the House Financial Services subcommittee on domestic and international monetary policy, trade, and technology, wrote similar assurances to the Texas Credit Union League. Paul wrote that he opposes a provision in the Treasury's plan, which would eliminate the credit union charter and the independent federal credit union regulator. "Eliminating separate charters for credit unions, banks, and thrifts could deny the benefits of credit union membership to millions of Americans," Paul wrote.

[MORE HERE]

 

Write to Treasury In Support of the CU Charter

We want Treasury to know just how damaging its proposal is to credit unions and the dual-chartering system. So, we are asking that all credit union board members and management team staff, members of the League governmental affairs committee, and other key contacts generate letters and e-mails to Treasury Secretary Henry Paulson expressing concern with his “Blueprint for a Modernized Financial Regulatory Structure.”

[MORE HERE]

 

CUNA Offers Online Training for Political Involvement

The Credit Union National Association (CUNA) has developed new online training courses for credit union supporters. These courses are designed to educate AND motivate members to become more politically active. Two courses are available now: Communicating the Credit Union Difference and Direct Lobbying at the Grassroots Level. The courses are FREE and are accessible here. You will need to register to use the CUNA Web site. That registration is free also.

 

Housing Stimulus OK'd 84-12 By Senate

Voting 84 to 12, the Senate passed its housing stimulus package last Thursday clearing the way for the House and Senate to begin working out differences between their two versions of similar legislation. The Senate bill, known as The Foreclosure Prevention Act of 2008, would provide $4 billion to cities for the purchase and rehabilitation of foreclosed properties and almost another $13 billion in targeted tax breaks to spur additional home buying and ease the troubles of the housing industry.

[MORE HERE]

 

Dodd-Shelby Split Broadens in Foreclosure-Bill Hearing

The prospect of quick Senate passage for legislation to stem home foreclosures is fading as the gap between Senate Banking Committee Chairman Chris Dodd and the panel's lead Republican, Sen. Richard Shelby, widens. At a hearing Wednesday, Sen. Shelby raised myriad questions, some rhetorical and most designed to support his contention that rescue efforts would do little more than help undeserving borrowers and reckless lenders. He also questioned whether the Federal Housing Administration, pivotal in every plan being floated to help troubled homeowners, has the resources and safeguards to handle such a huge increase in its workload. (American Banker Online, April 17)

 

GAO Study Sought on Fair Lending Laws

Sixteen Democrats on the House Financial Services Committee, including Chairman Barney Frank of Massachusetts, sent a request to the Government Accountability Office seeking a study on fair lending laws. In their letter to GAO Acting Comptroller General Gene Dodaro, the House lawmakers specifically asked Congress' investigative arm for a comprehensive review of the current state of the federal enforcement of the Equal Credit Opportunity Act (ECOA), the Home Mortgage Disclosure Act (HMDA) and the Fair Housing Act (FHA), and other related fair lending laws. The review is to assess the monitoring and enforcement efforts of the Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, Department of Justice, and Department of Housing and Urban Development.

[MORE HERE]

 

Tax Measure Could Add HSA Burden for CUs

The House Ways and Means Committee passed the Taxpayer Assistance and Simplification Act of 2008 last week, but the measure could threaten credit union participation in Health Savings Accounts (HSAs), according to the Credit Union National Association (CUNA). Although the bulk of the measure is not cause for concern for credit unions, John Hildreth, CUNA senior legislative representative, said Thursday that it contains a provision that "would be very detrimental to HSAs and would drive many credit unions out of this market."

[MORE HERE]

 

League News

 

CMN Richmond in 'Quest for the Triple Crown;’ CUs Urged to Participate

Join Children’s Miracle Network-Richmond as it celebrates "The Quest for the Triple Crown" at its Annual Spring Reception on May 16. The evening will be filled with live music, traditional Derby samplings, a silent auction and a competitive race for the Triple Crown. They encourage traditional Derby attire, so pull out that seersucker suit and large hat and join them at the races! The celebration takes place at the DoubleTree Hotel (Franklin Street, downtown Richmond) at 7 p.m. Tickets are available for $30 per individual or $50 per couple. For more information, e-mail rpwestcott@chva.org. To have a race or participating horse named in your honor, or for other sponsorship opportunities, please contact Ryan Corrigan or 804.228.5929 or rcorrigan@chva.org.

 

CU Members Get Deep Discount on Kings Dominion Tickets

Your members can take advantage of deep discounts on Paramount’s Kings Dominion tickets on all weekends through May 18. Tickets are just $31.95 (regular admission) or $24.95 (juniors and seniors). View the promotional flyer with ticket ordering information.
> Kings Dominion will donate $1 to Children’s Miracle Network for each CU ticket purchased!

 

Chapter News

 

Piedmont Chapter Meets April 24

Your League’s Jeanne Sullivan will be the guest speaker at the Piedmont Chapter’s April 24 meeting. Jeanne will provide an overview of CUNA Mutual lending products. Location: Dutch Inn (Collinsville). Time: 6 p.m. social; 6:30 p.m. dinner. To register, contact Martinsville DuPont Credit Union’s Ben Gravely at 800.475.6328 on or before April 21.

 

Richmond Chapter Meets April 22

Workplace violence is a growing problem, and all too often its origin lies in cases of domestic violence. News accounts of tragic events seem to appear on media outlets daily, and businesses must incorporate proper planning to address this issue. Mike Berger, security operations manager with Virginia Credit Union, will offer a presentation on "The Manager’s Response to Domestic Violence” at the Richmond Chapter's April 22 meeting. Location: Brandermill Country Club (3700 Brandermill Parkway, Midlothian, 23112). Time: 7:30 a.m. registration; 8 a.m. welcome & breakfast; and 8:30 a.m. program. To register, contact Chris Burgess at cburgess@baylandsfcu.org or call 804.843.2520, ext. 138. Deadline to register is noon, April 17. When responding, please provide a list of those attending from your credit union.

[MORE HERE]

 

Tidewater Chapter Workshop Set for April 26

The Tidewater Chapter will hold its annual workshop on April 26, at ABNB Federal Credit Union (830 Greenbrier Circle, Chesapeake). This year’s workshop offers topics that will appeal to both staff and volunteers, including: (1) Unclaimed Property - Melinda Barbish, Virginia Division of Unclaimed Property; (2) Plastic Card Fraud - Allen Trosclair; (3) Disaster Recovery - Betty Myers, National Credit Union Administration (NCUA); (4) Employment Issues - Heather Mullen, Attorney, Kaufman & Canoles; (5) Member Service - Annette Cain; (6) Supervisory Committee Duties - Jo Burkett, National Credit Union Administration (NCUA); (7) Investments 101 - Harry Simmerman, VACORP Federal Credit Union; and (8) BSA Refresher/CTRs/SARs - Mariann Beverly, Virginia League. Registration will start at 8 a.m. Cost of the workshop is $45, which includes lunch. For details, call Kenny Davis (Portsmouth VA City Employees Federal Credit Union) at 757.393.8863, ext. 6260 or e-mail davisk@portsmouthva.gov

 

Richmond Chapter Legislative Committee Plans Trip to Orioles, Yankees Game

Join the Richmond Chapter’s Legislative Committee for its annual Major League Baseball outing on Aug. 23. You’ll see the Baltimore Orioles take on the New York Yankees at Camden Yards. Tickets are $65 per person, but act fast, as only 50 seats are available on the bus. Contact Bill Dawson if you’re interested - 804.740.6925 or wbd51@aol.com.

[MORE HERE]

 

Financial Literacy News

 

League Updating Financial Literacy Directory; Your Information Needed!

Here’s your golden opportunity to get credit for your good works in the financial education arena. We are in the process of updating The Credit Union Financial Literacy Resources Directory - a vital part of your League’s Financial Education display, which exhibits to thousands of people at conferences and workshops across the Commonwealth. We need you to participate by providing us with basic information on your financial education initiatives. Once you do, you’ll get your very own directory page as a way to tell the world about your good works. Send an e-mail to your League’s Financial Literacy Director Dawn Lindley at dlindley@vacul.org and ask for an electronic copy of the directory template. The template is a Microsoft Word document that you simply open to enter your information. When you have completed the page, e-mail it back to Dawn with an attached photo. It’s that easy!

> The directory also promises to be an important tool for educating lawmakers about our efforts, as well. But to be truly effective, we need you to participate!

[MORE HERE]

 

CUs Ready for Youth Week

Credit unions around the nation are preparing for the Credit Union National Association's (CUNA) National Credit Union Youth Week, April 20-26. Some have already launched financial literacy activities to honor April as Financial Literacy Month.

[MORE HERE]
> Youth Week resources available here: http://finlit.cuna.org/youth_week.html

 

Entries Sought for League Financial Literacy Awards

Get recognized for your good works in delivering financial education! The Third Annual Virginia Social Responsibility Awards program recognizes all National Youth Involvement Board (NYIB) classroom presenters and will present the following financial literacy-related awards: Financial Literacy Visionary, Youth Advocate of the Year, Education Partner of the Year, and Class Act. The Awards Celebration will be held in Charlottesville on June 18. Deadline for submitting your entries is May 1! [Note: These awards are separate from the Desjardins Youth Financial Education Awards. Desjardins entries will be due Aug. 1, 2008. Details to follow.]

[MORE HERE] (pdf, 128kb)

 

Money Smart Train-the-Trainer Workshops Offered for CUs

Your League is partnering with the FDIC to offer a series of free train-the-trainer seminars on the Money Smart personal finance program. This will prove especially useful for credit union personnel involved in conducting financial literacy programs or those working one-on-one with members in personal finance basics. Three training dates remain: May 7 (Manassas), July 23 (Virginia Beach), and Oct. 1 (Waynesboro). You’re welcome to attend any of the seminars. Each will run from 9 a.m. to approximately 4 p.m. Questions can be directed to Cathy Baldwin at 800.768.3344, ext. 615 or cbaldwin@vacul.org
> View the registration form here. (pdf, 86kb)

 

Study: Financial Literacy Down for High School Seniors

High school seniors' knowledge of finance has dropped the past two years, says a new study. That doesn't mean, however, that credit unions' financial education efforts are for naught. High school seniors, on average, answered correctly less than half (48.3%) of the questions about personal finance and economics in a nationwide survey released last Wednesday by the Federal Reserve. The survey is conducted every two years by the Jump$tart Coalition for Personal Financial Literacy, an organization that promotes financial competence for students. The score compares with 52.4% answered correctly in the 2006 study.

[MORE HERE]

 

Financial Legislation on Radar as Congress Heads to Crunch Time

Legislation dealing with a variety of financial issues, ranging from mortgage lending to financial literacy, are on the agenda as Congress heads into what many believe is the crucial part of the session. Caught amid distractions by the Presidential campaigns and rising concerns about the national economy, Congress is in the middle of an eight-week period that is expected to be its best chance this year of working toward agreements on difficult issues.

The timeline is tight and pressures increase as recess breaks and the summer political conventions near, limiting the time for further deliberations. Credit unions have an important stake in this week's agenda, which will include floor votes on legislation dealing with student loans and health savings accounts. Meantime, committee hearings are set for legislation relating to the credit markets, financial literacy, emergency mortgage loans, impact of the credit squeeze on small business, and foreclosure prevention and other mortgage servicing issues.

[MORE HERE]

 

Majoring in Plastic

As the economy worsens, largely because so many people took out mortgages they could not afford, the nation is questioning how credit could have been made so easily available and why consumers were so eager to accept it. But experts say it is behavior that begins at an early age. Decades ago, it wasn't until one had a career, a spouse, even a child that credit cards typically entered the picture. Now, once people turn 18, they are bombarded with credit card offers. College campuses have become breeding grounds for new consumers of credit, with companies using free T-shirts, sandwiches, even iPods to entice potential customers. "Most adults already have too many credit cards," said Ed Mierzwinski, program director for U.S. PIRG, a federation of state Public Interest Research Groups that defends consumers. "It's expensive to market to people who have credit cards with other companies. College students are an attractive market." Consumer advocates say college students can least afford to graduate with debt these days, with an unstable job market.

[MORE HERE]

 

News From Credit Unions

 

Synergy One FCU Plants a Money Tree at Stonewall Middle School

It’s YOUTH WEEK at Synergy One Federal Credit Union and what better way to celebrate than to plant a money tree at the Stonewall Middle School (SMS) branch on April 22! National Credit Union Youth Week, April 21 through April 26, is an annual event designed to promote the benefits of saving at an early age. All activities are FREE and open to youth ages 17 and under and at Synergy One, every youth deposit made during the week is rewarded. In celebration of Youth Week and in honor of Earth Day that falls on April 22, Stonewall Middle School and Synergy One will plant a tree on the school grounds.

[MORE HERE]

 

Diabetes Cost Prince William County $688 Million in 2007; Synergy One FCU Hopes to Help

$174 billion - that’s how much diagnosed cases of diabetes cost the U.S. in 2007. With an additional 6 million people believed to have diabetes but not yet diagnosed, the actual cost of diabetes may be much greater. The total cost of diabetes in 2007 for people in Prince William County alone is estimated at $688 million. To address this concern on a local level, William H. White, CEO/President of Synergy One Federal Credit Union, is hosting a Corporate Breakfast to share how corporations can learn more about the fight against diabetes and the American Diabetes Association’s Prince William County Step Out: Walk to Fight Diabetes. This Corporate Breakfast will be held on Wednesday, April 23.

[MORE HERE]

 

DuPont Community CU Helps Youth Members 'Get it in Gear'

“I didn’t realize that having a car cost so much.” “No way…you mean…I have to pay back all that interest?” “I guess I really don’t need a brand new car, huh?” These are just a few of the comments that DuPont Community Credit Union (DCCU) has heard from teens since the introduction of its newest Financial Education Class – “Get it in Gear.” This fast-paced, highly-interactive class is designed for youth 15 and older, and is part of the credit union’s Milestones Youth Program. The curriculum is a comprehensive introduction to lending and teaches teens everything they should know about buying their first vehicle -- but it doesn’t stop there.

[MORE HERE]

 

DuPont Community CU Sponsors 'Your Community Cares' Program

DuPont Community Credit Union recently sponsored the ‘Your Community Cares’ event with the City of Staunton Parks and Recreation Department. The event was host to more than 50 pre-teen and teenage girls. More than 15 area businesses were there to support the conference’s mission – empowering girls to reach their full potential.

[MORE HERE]

 

Apple FCU Student Branch Wins High Praise

Maybe U.S. Treasury Secretary Henry Paulson should pay a visit to Cameron Elementary School in Burgundy Village. He might learn a thing or two about establishing and managing a sound financial institution. Under the guidance of sixth grade teacher Ellanor Peck, her students have established a joint partnership with Apple Federal Credit Union (FCU) offering a new program to not only encourage savings but also learn banking and financial procedures.

[MORE HERE]

 

Apple FCU Opens Second Loudoun County Location

Apple Federal Credit Union’s second Loudoun County branch in less than a year, located in Ashburn Town Center at 43330 Junction Plaza (Claiborne and Ashburn Farm Parkways, near Giant), is now open and it’s time to celebrate! All current and potential Apple FCU members in the Ashburn area are invited to join the credit union, Saturday, April 26, for a series of special events to commemorate the occasion.

[MORE HERE]

 

Bronco FCU Financial Advisor Named 2007 Rep of the Year

Leah-Beth Williams, a Financial Advisor at Bronco Federal Credit Union, registered through CUNA Brokerage Services, Inc., has the honor of being named the 2007 Registered Member Financial Services Representative (rMSR) of the Year.

[MORE HERE]

 

Pentagon FCU’s Norm Rappaport Passes Away

Norman Rappaport, a well-known figure in the credit union movement who served as a volunteer at Pentagon Federal Credit Union for 30 years, passed away last week at 82. Rappaport joined the credit union's board in 1974 and served as secretary for several years and then as vice chairman for 21 years. He also served as chairman of the marketing committee, vice chairman of the financial management committee and chairman of the planning committee for more than 15 years. At the time of his death, Rappaport was working on the celebration of the 100th anniversary of the beginning of the credit union movement in the United States. (Credit Union Journal, April 17)

 

CU Mergers Approved

The Virginia Bureau of Financial Institutions announced the following mergers:
- L.O.M.H Federal Credit Union has merged into Prime Care Credit Union ($12.4 million in assets), effective April 7.

- Smithfield Packing Employees’ Credit Union has merged into Home Town Community Credit Union ($2.5 million in assets), effective March 24.

 

News About Credit Unions

 

Stash The Cash

The good news: some credit unions have grown anywhere from 10% to 30% in asset size over the last two months. The bad news: what to do with all that extra cash? Credit Union Journal turned to the same people credit unions do to find out: the corporate credit union system. “Credit unions have a ton of liquidity, a ton of deposits. I have heard of credit unions growing 10% to 30% in the last month and a half, so they have a ton of cash,” said Cory Johnston, chief investment officer for Georgia Central Corporate CU. “They’re investing it, of course, but yields are low on most products. The best yields right now are in brokered CDs. Brokered CDs do really well in a falling-rate environment because they tend to lag what the Fed is doing.” But the biggest–and most tempting–mistake is to chase yield. “Rates are falling so yields are low, and it’s very volatile, so we recommend evaluating an investment for the proper structure instead of just looking at the yield because you’re flush with cash. The Fed is still in the process of lowering rates, so we’re telling credit unions don’t buy the yield, buy the structure.”

[MORE HERE]

 

CUs Tell of Innovations in Biz Services

Business lending is not an area credit unions should ignore, according to speakers at the second annual CU Business Group national convention in Scottsdale, Ariz. Speakers at the convention, themed "Innovation in Business Services," discussed how they have maximized business lending opportunities.

[MORE HERE]

 

Stimulus Law Could Broaden MBL Opportunities

New tax breaks for small business included in the recently enacted economic stimulus package could provide opportunities for credit unions interested in promoting member business lending, according to the Credit Union National Association (CUNA). The law raises the amount small businesses can deduct for new equipment to encourage such expenditures. It also liberalizes depreciation rules. The purpose of the legislation is to give a boost to the nation's ailing economy. The Credit Union National Association (CUNA) urges credit unions to check out the new law for new lending opportunities, but stresses that credit unions should consult first with tax advisors.

[MORE HERE]

 

Pending IASB Standards May Hurt Small CUs, Says WOCCU

Certain provisions in the International Accounting Standards Board's (IASB) proposed accounting standards for small- and medium-sized enterprises (SMEs) could be detrimental to credit unions, according to the World Council of Credit Unions (WOCCU). WOCCU made its position known to IASB officials last week in a letter written by Dave Grace, vice president of WOCCU Association Services. WOCCU's concerns focus on the draft's failure to clearly identify to whom the standards apply and its failure to significantly simplify reporting requirements for smaller institutions, according to Grace.

[MORE HERE]

 

Consumer/Marketplace News

 

Fears of Long Recession Rising

There is little debate about whether the U.S. economy is in a recession. The question is how painful and long the downturn will be. There is a growing fear among some economists that the recession will be particularly bad. "We just can't believe it's going to be short. The question is how bad can it get? The situation is moving more towards severe than towards mild," said Allen Sinai, chief global economist for Decision Economics. According to the National Bureau of Economic Research, the firm that officially determines when recessions begin and end, the last two recessions (2001 and 1990-1991) each lasted 8 months. But Sinai and other economists cited numerous economic headwinds, including tight credit, falling home prices and mounting losses for banks, as reasons why this downturn could last longer and be more painful than seen in those last two recessions, with more job losses and a sharper drop in economic activity.

[MORE HERE]

 

Credit Crisis Seen Past Halfway Point

Goldman Sachs Group Inc. chief executive officer Lloyd Blankfein said the credit crisis that has created almost $250 billion of losses and write-downs at the world's biggest financial companies may be approaching an end. "We're closer to the end than the beginning," Mr. Blankfein, 53, said Thursday at the company's annual shareholder meeting in New York. "We're maybe at the end of the third quarter, or the beginning of the fourth." Mr. Blankfein's comments came after similar remarks by Morgan Stanley chief executive officer John Mack, who said this week that the end of the credit market contraction that began with subprime mortgages may be in sight. It would probably last "a couple of quarters" longer, he said. (American Banker Online, April 14)

 

Break Free from Wallet-Squeezing Fees … Join a CU

Consumers paid over $38 billion in banking fees in 2007, according to the Federal Deposit Insurance Corporation. And in some cases, bank, thrift and credit union fees have risen by double digits, according to a report released last month by the U.S. Government Accountability Office. You may not even be aware you're paying these fees, notes an article from CNN. It also notes, however, that credit unions usually have lower fees than commercial banks.

[MORE HERE]

 

Americans Still Grip Wallets Tightly

Consumers, beset by a credit crunch, rising energy and food costs and a prolonged housing slump, stayed away from the malls in March. Retail sales posted only a small increase after a big drop in February. The Commerce Department reported Monday that retail sales edged up 0.2 percent in March after a 0.4 percent decline in February.

[MORE HERE]

 

Consumer Confidence Falls to New Low

Americans' confidence in the economy fell to a new low, dragged down by worries about mounting job losses, record-high home foreclosures and zooming energy prices. According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low. "Consumers are very pessimistic," said Mark Vitner, economist at Wachovia. "There are not a lot of happy campers out there."

[MORE HERE]

 

Consumers: Can't Get Ahead, Hard To Keep Up

Offering the gloomiest assessment of economic well-being in close to half a century, a new survey has found that most Americans say they have not made progress over the past five years as their incomes have stagnated and they have increasingly borrowed money to finance their lifestyles. As many Americans struggle with declining housing values, increasing food and energy prices and growing unemployment after a long period of flat wages, well over half of respondents said they are either losing ground economically or are stuck in the same place, according to the report released recently by the Pew Research Center. Only four in 10 said they have moved forward in the past five years -- a record low, Pew says, and far off the record 57 percent who in 1997 said they had moved forward in the previous five years.

[MORE HERE]

 

AP Poll: Mortgage Payments Worry Many

One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home's value is shrinking, according to a poll showing widespread stress from the nation's housing crisis. In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won't a buy a home in the next two years. That was up from 53 percent who said so in an AP-AOL poll in September 2006.

[MORE HERE]

 

Foreclosures Seen Up by 71% in 1Q

Lenders repossessed 210,280 homes in the first quarter, affecting about 0.3% of U.S. households, according to data released Monday by Foreclosures.com. Foreclosures were up 70.6% from a year earlier, the foreclosure-information company said. An additional 0.7% of homes were in some stage of default that could lead to repossession, the Sacramento company said. (American Banker Online, April 15)

 

Hope Now: Few Five-Year Rate Freezes

Of the 140,562 subprime adjustable-rate mortgages scheduled for a rate reset in January and February, only 2%, or 3,364 loans, received a five-year fast-track modification, according to statistics the Hope Now alliance released last Thursday. The Treasury Department announced the modification plan in December, saying that 600,000 loans could be eligible for a five-year rate freeze. At that time critics said the number was likely overblown. The statistics released Thursday represented Hope Now's first attempt to offer data on how many borrowers received a freeze. However, the alliance also said that 43% of subprime ARMs facing a reset in the first two months of the year were refinanced or paid off through a sale, and 2,243 others received a modification but not a five-year rate freeze. (American Banker Online, April 11)

 

FDIC Starts Survey on Underbanked

The Federal Deposit Insurance Corp. has begun a voluntary survey aimed at assessing institutions' efforts to reach out to underbanked communities. The survey, mandated by deposit insurance reform legislation enacted in 2006, is to involve a sample of 1,300 FDIC-insured institutions, including up to 30 that will participate in more in-depth case studies, the agency said on Friday. Reaching out to underserved areas is "a win-win on both sides. It's a market opportunity for the industry, and it obviously holds significant potential benefits for people to get access to insured financial institutions," Vice Chairman Martin Gruenberg said in an interview. The new survey is to accept volunteered responses until early June, and the agency is expected to publish findings before yearend. (American Banker Online, April 15)

 

How Loan Woes Will Play Out in Court

Veterans of the aftermath of the S&L crisis anticipate three waves of lawsuits precipitated by the current credit crunch. The first wave, and the one that will produce the largest number of suits, will involve the most immediate pressure points: mortgages and secondary securities based on mortgages. The litigation will focus on the mortgages and securities issued from the peak in the housing market until the onset of the crisis — from mid-2005 to mid-2007. As with the S&L crisis, we will see large numbers of suits over individual mortgages. The second wave, which has yet to develop, will flow from companies under stress. Over 200 mortgage lenders have gone out of business since 2006. Suits may be brought by their bankruptcy trustees. And even the directors and officers of lenders, MBS issuers, and investment advisers that remain in business may face suits seeking to hold them personally liable for losses incurred by shareholders. The third wave, which will develop some months from now, will flow from the solutions that regulators and legislators impose. Regulators will close some banks and insurance companies, sue the insiders and their significant advisers, and try to manage the portfolio of litigation against entities that had been under stress. (American Banker Online, April 11)

 

Report Claims Bias by Card Issuers

A study of credit bureau data by Ethan Cohen-Cole, an economist at the Federal Reserve Bank of Boston, has uncovered evidence of "race-based differences in the availability of credit" from card issuers. Mr. Cohen-Cole wrote in a Feb. 26 report, "Credit Card Redlining," that he studied "a unique and proprietary database of credit histories from a major credit bureau," which he did not identify. "After controlling for the influence of such other place-specific factors as crime, housing vacancy rates, and general population demographics," he found "qualitatively large differences in the amount of credit offered to similarly qualified applicants living in black versus white areas." Moreover, "the results suggest that the observed differences in credit lines by racial composition of neighborhood are largely driven by issuer decisions rather than by demand," Mr. Cohen-Cole wrote in the report. (American Banker Online, April 4)

 

Technology News

 

Study Sheds Light on Multi-Factor Authentication

A new study sponsored by Credit Union Journal and released April 7 sheds light on the costs and challenges being felt by credit unions as they administer and support multi-factor authentication (MFA) and other authentication products and services. The study, conducted by Sestus Data Co., found that credit unions that implemented software certificates or software toolbar authentication methods experienced the greatest increase in support costs and the greatest decrease in online member activity. Credit unions that implemented virtual tokens experienced the smallest increase in support costs (less than 1%), and it was the only method that reported no decrease in online member activity. The next best solution was geo-location solutions, with a reported 11.65% increase in support costs and 11.67% decrease in online activity. So-called "challenge/response" and "secret image" solutions were the most widely deployed methods, but credit unions deploying those solutions reported an average increase in support costs of 18.3% and a corresponding average decrease in online member activity of 16.77%. (Credit Union Journal, April 7)

 

Security/Fraud Prevention

 

CU Shooting Suspect Charged in I-64 Shootings

A 19-year-old Virginia man charged with allegedly firing gunshots into a closed credit union also has been charged in shootings that injured two people on Interstate 64 between Waynesboro and Charlottesville, Va. Slade Allen Woodson, 19, of Alton, Va., now is facing 17 felony counts, 15 in Albermarle and two in Waynesboro (C-ville.com April 8). DuPont Community CU (DCCU), Waynesboro, reported that during the night of March 27, while the office was closed, shots were fired at the building and a repossessed car on the premises (News Now March 31). No credit union employees or members were involved or affected. A surveillance tape of the credit union's parking lot helped pinpoint a suspect vehicle, an AMC Gremlin.
[MORE HERE]

 

FinCEN Reports 44% Jump in Mortgage Fraud Reporting

The Financial Crimes Enforcement Network (FinCEN) reported a 44% increase in suspected mortgage fraud activity during the 12-month period framed in its latest review of such information. In an executive summary of its findings, FinCEN noted that in 2006, financial institutions filed 37.313 SARS citing suspected mortgage loans fraud. That 44% increase compared to a 7% increase in overall SAR filings. "One reason for this increase may be that lenders are increasingly identifying suspected fraud prior to loan approval and reporting this activity. Suspected fraud was detected prior to loan disbursements in 31% of the mortgage loan fraud SARs filed between April 1, 2006 and March 31, 2007, compared to 21% during the preceding ten years," FinCEN reported.

[MORE HERE]

 

Competition News

 

Mortgages: Exodus Creates Opportunity

The persistent credit crisis continues to sap financial institutions' willingness to take on risk and has created a negative view of mortgages among executives, but as consumer lending opportunities shrink across all lines, mortgages are still seen as the best available path to growth. For the first time since the fourth quarter of 2004, more respondents to the Financial Services Executive Forum survey, conducted by American Banker in partnership with Greenwich Associates, said they would not seek to expand their overall consumer lending in the coming year than said they would. But sentiment was markedly different between small and large companies: 51% of the small companies said they would not expand, but just 33% of large companies (a smaller sample of respondents for this question) said they would not.

Market turmoil, subprime losses, and tightening credit standards have also affected risk management; a significantly larger number of respondents are saying their institution has changed its approach. Mortgages, though seen as most negatively affected by the recent credit and economic environment, surpassed home equity lines of credit as the consumer finance product most likely to fuel growth. This year, 34% of companies surveyed said that mortgages were their best opportunity for consumer lending growth; 20% gave that ranking to home equity lines, which had been by far the most popular growth vehicle in previous years' surveys. (American Banker Online, April 14)

 

Wachovia Shows Credit Crunch Isn't Over

Wachovia's dour numbers should end any fantasies that the credit crunch is almost over. The Charlotte, N.C., bank delivered a big dose of bad news to investors Monday. Wachovia swung to a surprise first-quarter loss and set plans to raise $7 billion in capital by selling common and preferred stock. Wachovia also cut its quarterly dividend by more than 40%, just two months after executives made a point of saying the payout was safe. But most jarring was Wachovia's decision to boost its reserves for future loan losses by billions of dollars.

[MORE HERE]