Life Is A Highway...March 19, 2010

Student Lending In The Marketplace

With graduating high school students making preparations for college and President Obama’s student loan program currently moving through Congress, student loans is the topic of the next financial education segment of Pennsylvania Newsmakers, taped yesterday in Harrisburg.

Hosted by Dr. Terry Madonna, Ed Williams, CEO of Discovery FCU, and Mike Wishnow, Association SVP, Communications & Marketing, explained the various types of student loans available in the marketplace and the importance of choosing the right plan for the cost of higher education.

The segment can be seen across Pennsylvania on the following dates and stations, beginning Sunday:

Sunday, March 21, 11:00 a.m. – WGAL Channel 8 (Harrisburg and Lancaster)
Monday, March 22, 8:30 p.m. – WBPH (Lehigh Valley and Philadelphia)
Tuesday, March 23, 7:00 p.m. and Wednesday, February 17, 1:00 p.m. – CATV Channel 8
Saturday, March 27, 11:30 a.m. – WKBS 47 (Altoona)
Saturday, March 27, 11:30 a.m. – WPCB 40 (Pittsburgh)
 
Additional program information is available here.

Convention Attendees Should Get Absentee Ballot

For individuals attending the Association’s Annual Convention, May 16-18 in Atlantic City, this is a reminder that you should request an absentee ballot for the May 18 Pennsylvania Primary Election.

Click here for an absentee ballot, as well as information on locations to submit the completed form. Last day to apply for an absentee ballot is May 11, 2010.

If you’re not registered to vote, April 19 is the deadline to register for the Primary Election.  

For more information, visit www.votespa.com.

Certificate Program Awards

For a listing of individuals who recently earned certificates from the CUNA correspondence courses for professional development, please click here. Congratulations, everyone!

Employee Milestones

April McLeod, IT Specialist/Database Administrator, will mark her 10th anniversary with the Association on March 20. In her position, April oversees the database program and is responsible for creating reports to obtain specific data from the program. She started her career working in the Card Services Department.

Preparing For Future Leaders

A group of 20 young people caught the eyes of seasoned veterans when they appeared at last month's CUNA GAC wearing t-shirts. We previously reported on the Crash the GAC group, but in this week’s Keystone Extra, you can find out about the experience of two Pennsylvania young professionals who were crashers. With words like awesome, humiliating, great, and intimidating, Braden Young, Bucks First FCU, and Derek Garcia, CTCE FCU, provide insight into what they learned, what they did, and what they can offer to their credit unions for the future.

In another story about preparing leaders for the future, Sun East FCU shares information about its internal Leadership Development Program that helps current staff develop professional skills, as well as personal growth.
Read more

Get Chocolate, Support PAC

With temperatures on the rise, the chocolate fundraiser that benefits the Association’s PAC is winding down for the season. For more information about the chocolate sale, click here.

To place your order, please e-mail Lori Bebar at lori.bebar@pcua.coop, or call her at 800-932-0661, ext. 5219, no later than March 31. 

Frauds & Scams

Frauds & Scams

Suspicious Loan Application

Superior Credit Union in Collegeville, yesterday received an online loan application from a Peter Simms, using an address of 4 Forest Glen Road, Highland Park, NJ 08904. He requested a $5,000 line of credit, and is not a member of the credit union.

When the credit union began researching the request, they discovered that the individual had applied at more than 30 credit unions, including many in Pennsylvania, within the past week.

Superior officials believe that Simms’ Social Security Number was stolen and is being used for these numerous applications.

Phony Cards & Fraudulent Transactions

Lebanon FCU has flagged fraudulent debit card transactions appearing to occur mostly in Texas and Florida, with some reported in Wisconsin and Illinois. The fraud was discovered through the credit union’s security tools and in-house monitoring.

Glenn Rambler, EVP, said that STAR is currently investigating the fraud, and suspects a crime ring has created several thousand phony cards tied back to financial institution accounts. Rambler said as of Thursday the credit union was exposed to several thousand dollars from fraudulent transactions.

Check Fraud

A-K Valley FCU reports that its checks are being used in a fraud scam. A chiropractor was contacted via e-mail by an Emilia Luci, who was looking for chiropractic sessions for an Italian model, Mariana Machado, who would be in the area for a photo shoot. When the chiropractor received an advance check for the scheduled session, the check was for more than the sessions cost. The check was for $4,300 and the doctor was asked to wire the difference to a person in the U.S. who was handling the rental of some equipment. The doctor became suspicious of this request and contacted A-K Valley FCU since they were the financial institution on the check and found out the check was a fraud. 

Credit unions are advised to contact the financial institution on any check that appears suspicious. Anyone receiving a questionable check from A-K Valley FCU should contact the credit union at 724-335-2274.

Chapter News

Chapter News

The Harrisburg Chapter of Credit Unions held a Legislative Night on Thursday. A Silent Auction raised $438 for the Association’s PAC, CUPAC. Christina Mihalik, VP, Governmental Affairs, spoke to the group on how to become politically active, how to communicate with legislators, and provided an update on current legislation, including interchange, member business lending, and overdraft.

More than 100 people attended a St. Patrick’s Day BSA training session for credit unions in the Monongahela Valley Chapter. Joanne Broderick, Association Compliance & Operations Officer, presented the training program. She also recognized APS FCU on the occasion of its 75th anniversary. Pat Allen, CEO, accepted the clock and plaque on behalf of the credit union.

Keystone Extra Sneak Peek

Keystone Extra Sneak Peek

What’s the buzz from the GAC crashers?
How do employees participate in an internal Leadership Development Program?
When is the early-bird deadline to register for the Annual Convention & Expo?
What is CUDL AutoSMART?

Find answers to these questions and more in this week’s Keystone Extra Sneak Peek.  

Friday Tidbits

Friday Tidbits

Celebrate Spring

In the Northern Hemisphere, spring arrives with the vernal equinox on March 20 at 1:32 p.m.

On two days each year, on or around March 21 and September 23 (near the autumnal equinox), the Sun is directly above the equator. The seasons are opposite in the Southern Hemisphere.

Rita’s is celebrating the much anticipated arrival of spring with a FREE regular Ice and the launch of its new PEEPS Italian Ice. The 18th Annual First Day of Spring Giveaway from noon to 10:00 p.m. on Saturday, March 20. Each guest who visits one of the over 500 open Rita’s locations will receive a FREE regular size, 10 oz. cup of Italian Ice in the available flavor of their choice. Rita’s Franchise Company, headquartered in Trevose, PA, has partnered with Just Born, Inc., makers of PEEPS and other sweet favorites, to offer PEEPS Ice.

In Annapolis, Maryland, boatyard employees and sailboat owners celebrate the spring equinox with the Burning Of The Socks festival. Traditionally, the boating community wears socks only during the winter. These are burned at the approach of warmer weather, which brings more customers and work to the area. Officially, nobody then wears socks until the next equinox.

The Jewish Passover usually falls on the first full moon after the Northern Hemisphere vernal equinox. Passover begins March 30.

Christian churches calculate Easter as the first Sunday after the first full moon on or after the March equinox. April 4 is Easter Sunday.

Won’t You Be My Neighbor Day

The United Way of Allegheny County has designated Saturday, March 20, as a day to honor the late Mr. (Fred) Rogers, and encourage volunteerism in the Pittsburgh region. Rogers would have celebrated his 82nd birthday on March 20.

The United Way and Family Communications Inc., the nonprofit company that produced Rogers’ long-running PBS show, are partnering to try to recruit people to volunteer on a regular basis. They will be holding volunteer fairs around the region Friday and Saturday to give people information on volunteer opportunities. The campaign is also encouraging “neighbors everywhere” on Friday to wear their favorite sweaters, in honor of Mr. Rogers’ trademark wardrobe item.

National News

National News

NCUA proposes to tighten CU mergers, conversion process

ALEXANDRIA, Va. (3/19/10)—The National Credit Union Administration (NCUA) has proposed a significant rewrite of portions of Sections 701, 708a, and 708b of its rules to address the fiduciary duties of federal credit union directors, credit union-to-bank mergers, and charter and insurance conversions.

At its March board meeting held on Thursday the NCUA proposed new rules that would require federal credit union directors to "carry out their duties in good faith, and have, or gain, an understanding of basic finance and accounting practices." The NCUA would also prohibit federal credit unions from "indemnifying its officials or employees for liability associated with misconduct that is grossly negligent, reckless, or willful in connection with a decision that affects the fundamental rights of members."

The Credit Union National Association (CUNA) has called on the NCUA to better explain what "indemnifying" would entail under these circumstances.

Mergers and credit union-to-bank conversions would also be affected, with the NCUA proposing certain changes to its current standards governing "the information that credit unions seeking to convert must disclose to members." This includes the approval of a conversion proposal, the certification of a member vote on that conversion proposal, and the guidelines on how that vote must be completed. Rules governing the disclosure of a merger plan to credit union members and the NCUA are also affected, and the NCUA has also proposed altering some of the steps that follow an approved merger or conversion vote.

The NCUA board noted that these proposed changes are a response to alleged voter influencing by some credit union executives.

CUNA has pledged to review the NCUA's proposal to ensure that the proposed changes do not make the credit union-to-bank conversion process so burdensome that it is no longer an option for credit unions.

Some RegFlex provisions rescinded in NCUA plan

ALEXANDRIA, Va. (3/19/10)--Addressing the National Credit Union Administration's (NCUA) proposed plans to tighten some of its current regulatory flexibility standards, NCUA Chairman Debbie Matz said that while the NCUA would like to give credit unions as much discretion as possible, safety and soundness must also be considered.

The NCUA on Thursday approved a proposed rule that would rescind some exemptions related to fixed assets, member business lending (MBL), stress testing of securities, and the discretionary control of investments.

While there is a statutory 5% limit on fixed asset investments for credit unions that are over $1 million in assets, the RegFlex provisions permit some slackening of that limit in certain circumstances.

The NCUA, citing its own call report data, argued that "investing in higher levels of non-earning assets can materially affect a credit union's earnings ability and, therefore, its viability."

The collected call report data "shows a higher percentage of earnings problems among credit unions with more than 5% of shares and retained earnings invested in fixed assets," with the "percentage of earnings problems" increasing as "the level of fixed assets increases."

The NCUA has found similar losses in the MBL portfolios of some credit unions, with significant increases in delinquencies and charge-offs, and has proposed requiring that all credit unions obtain a loan principal's guarantee "as part of their own underwriting standards and best practices." The NCUA has also proposed that all credit unions, including RegFlex credit unions, stress test their securities "as a matter of safety and soundness and responsible business practices."

The NCUA currently allows RegFlex federal credit unions to "delegate discretionary control over the purchase and sale of its investments to certain persons outside the FCU" in excess of the 100% net worth cap that non-RegFlex federal credit unions must comply with. The proposed rule would rescind the 100% net worth exemption for RegFlex federal credit unions. However, NCUA examinations and insurance director Melinda Love said that if the proposal becomes a final rule, credit union total investments above the cap would be grandfathered into the rule.

Other portions of RegFlex addressing charitable contributions, nonmember deposits, zero-coupon securities, borrowing repurchased transactions, commercial mortgage related securities, and the purchase of assets from federally insured credit unions are currently being reviewed by NCUA staff, Staff Attorney Frank Kressman said.

The Credit Union National Association said that it recognizes the need for regulatory safety and soundness, but will examine the NCUA's proposals to develop recommendations on how well-run credit unions can maintain the regulatory flexibility that they deserve while maintaining the tools that the NCUA needs to address safety and soundness and other issues facing the credit union system.

BizKid$ aired on 99% of PBS stations

FEDERAL WAY, Wash. (3/19/10)--BizKid$, the youth-focused and credit union-funded financial education show, is airing on 99% of PBS stations.

The show began filming Season Four in January and has been shown on 340 of the nation's 343 public television stations, including 74 of the top 75 markets. Episodes have been aired more than 70,000 times since the show first aired in January 2008, according to the Washington Credit Union Foundation.

Many stations also created projects in their communities in partnership with area credit unions and their schools to extend the educational impact of the series, said Jamie Hammond, show executive producer.

"This gives credit unions more face time with young adults," added John Annaloro, foundation president. "This is a highly sought-after demographic, who will be the future consumers in the years ahead. Teaching them about the virtues of thrift and entrepreneurship, and linking this message to credit unions is so powerful for our movement."

Fundraising efforts for the new season are ramping up, with a goal to raise $1.3 million in the credit union community. The production team hopes to get 65 episodes, or five full seasons, at which time the show can run on a daily basis nationwide.

The foundation manages the Biz Kid$ project. The show is underwritten by a coalition of America's Credit Unions, comprising more than 150 credit unions, credit union foundations and other supporting organizations. The largest funder is the National Credit Union Foundation.

A new donation recognition system also was recently implemented so contributors will receive thank-you gifts for supporting the show.

BizKid$ also has been invited by the New York Stock Exchange to ring the opening bell on April 28 to celebrate National Financial Literacy Month. Credit union representatives can be part of the ceremony.
BizKid$

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