JOURNAL NEWS BRIEFS

Corporate Assets Up 14%

WASHINGTON, D.C.-Corporate credit union assets were up by 14% ($45 billion) during the first quarter of 2000, according to analysis by Callahan & Associates.

The company cited a 17% increase in investments by natural-person credit unions as the driver behind that growth. Leading the way during the first quarter First Carolina Corp. (up 36.75%), TriCorp (up 35.43%), and Rocky Mountain Corp. (up 33.33%).

Security Newsletter Announced

SAN ANTONIO-Digital Defense, a network and Internet security firm, has introduced a new service that alerts credit unions to security threats, hacks, regulations and innovations. The service, called the CUSecure Network Security Newsletter, will be distributed through e-mail on a weekly basis to credit union executives and technical personnel worldwide.

This free newsletter can be subscribed to on-line at www.cusecure.com. By going to the link "Security News" and clicking on "Subscribe to the CU Secure Newsletter," visitors will be added to the mailing list.

1 CU Honored BY FHLB System

WASHINGTON, D.C.-One credit union was included among 24 institutions identified by the Federal Home Loan Bank System for its Community Partnership Awards program. Joining the 23 banks and trust companies recognized was Santa Cruz Community Credit Union, California, which joined with Mercy Charities Housing California to build a group residence for homeless teenagers.

The FHLBs contribute 10% of their earnings or $100,000 each year, whichever is greater, to the Affordable Housing Program, which amounted to some $200 million in 1999.

FMFCU, SB1 Form CUSO

BROOMALL, Penn.-Franklin Mint FCU, one of the leaders in the CUSO movement, said it has joined with SB1 FCU in Philadelphia, to form a new CUSO.

Members Mutual Investment Corp. will provide members of the two Philadelphia-area credit unions with a variety of financial services, including mutual funds, brokerages and insurance services.

Franklin Mint FCU has provided mortgage services for its members and 11 other area credit unions through its wholly owned State Financial Network Inc., CUSO since 1986.

CUSO For Subprime Loans

BAKERSFIELD, Calif.-Kern Schools FCU said it is exploring state and federal regulations in order to form a CUSO that will serve the subprime loan market, borrowers with blemished credit records.

Several credit unions are seeking to enter the subprime market through establishment of subsidiary CUSOs, in order to circumvent some federal regulations, particularly limits on interest rates. Kern Schools FCU, with $700 million in assets, currently operates a financial services CUSO for its members known as KSFCU Service Organization.

WesCorp Hits RUDE Milestone

SAN DIMAS, Calif.-WesCorp reported it has reached a milestone in reserves and undivided earnings (RUDE), surpassing $400 million in May. WesCorp is the first corporate credit union, including U.S. Central, to have built this amount in RUDE. "With RUDE at this level, WesCorp is able to continue to maintain its goal of self-sufficiency.

This allows WesCorp to pay 100% of its operating expenses from earnings on RUDE and fee income, and enables it to pay back nearly all investment earnings to its member/owners in the form of high yields on investments," said WesCorp, which has a regulatory capital ratio of more than 7%.

CU Gets Better Press Than Bank

MIAMI-A credit union here has been receiving some positive press indirectly as the result of a dispute between a Parent-Teacher Association (PTA) and Bank of America.

The dispute began with the discovery by the Weston Elementary School PTA that $13,800 in checks had been forged by the nanny for the PTA's former treasurer, according to Ft. Lauderdale Sun-Sentinel. Bank officials initially faulted the PTA treasurer for not locking up the checks.

The alleged thief, who is from New Zealand and is now believed to be in Australia, also forged a $2,000 check from the family checking account with Ryder Credit Union, which made good on the amount within one month.

The credit union's decision has appeared in media reports.

More than a year later, however, the bank continues to balk at any reimbursement, saying only the investigation is ongoing.

Capital Will Not Be Returned

FEASTERVILLE, Pa.-Former members of IGA FCU would forfeit the $15 million their credit union-turned-bank accumulated in capital if the converted credit union now known as IGA Federal Savings Bank is acquired by a rival bank.

Even though member/owners retained the right to those funds upon the 1998 conversion of the credit union to a mutual savings bank, the conversion again last October to a stock form of ownership would apparently erase the former members' rights to that capital, an official with the federal Office of Thrift Supervision (OTS) said.

The exception is in the unlikely scenario of the acquiring bank being liquidated and those funds are used to pay off depositors.

IGA's parent Jade Financial Corp. is being targeted for takeover by PSB Bancorp., the holding company of Philadelphia-based First Penn Bank.

OTS rules require PSB to wait until October, one year after IGA converted to stock form, before completing the acquisition.

Jack Henry Finalizes Symitar Deal

MONETT, Mo.-Jack Henry & Associates, the parent of The Peerless Group, said it finalized its acquisition of Symitar Systems Inc., for a total of $44 million in cash, about $4 million more than originally planned.

San Diego-based Symitar provides in-house data processing for 237 credit unions, giving Jack Henry a total of 327 credit union clients and 2,850 financial institution customers.

More Than $4M Raised For CMN

MADISON, Wis.-The credit union community topped all previous goals and raised a total of $4 million for the Children's Miracle Network, according to the National CU Foundation, which organized the fundraising drive among credit unions.

About 3,500 credit unions donated to the charity, which benefits 170 non-profit children's hospitals nationwide. This year's credit union total tops last year's figure of $3.7 million.

Agency Securities Are Growing

MADISON, Wis.-Credit unions continue to build their portfolios of agency securities, those issued by Fannie Mae, Freddie Mac, and other government sponsored enterprises.

Data compiled by CUNA shows that credit unions built their agencies portfolio by 7% the first four months of the year, adding $2.9 billion in new agency securities.

That makes a total of $42.3 billion, or 39% of the total investment portfolio, by far the biggest portion.

Next were corporate credit unions with 17.6%; commercial banks and S&Ls at 13.6% and Treasuries with just 4.4%, the lowest portion ever for U.S. government securities.

Credit unions have increasingly favored agency securities over the past few years because they generally pay 30 to 50 basis points more in yields than Treasuries.

Most New Charters Survived

ALEXANDRIA, Va.-The vast majority of credit unions chartered over the past decade have survived, according to documents at NCUA.

Data compiled by the agency shows that there were 119 new credit unions chartered between the years of 1990 and 1999. Of those 119, 95 are still active today-a success rate of about 80%.

During that period there were five credit unions chartered with 500 or fewer potential members and three remain active; and 11 credit unions with between 500 and 1,000 potential members and eight have survived.

PCUL Helps With Habitat

HARRISBURG, Penn.-Employees of the Pennsylvania Credit Union League and the state's CUs continued the tradition of credit unions' "people-helping-people" motto when they helped in the construction of a Habitat for Humanity house in West Philadelphia.

Rick Myxter, VP-credit union development, Jay Young, marketing manager, Phyllis Hurley, public relations specialist, and Jack Cunningham, CEO/Treasurer of Delaware Valley FCU, all contributed to the project.

Bank Debuts E-Safe Deposits

FORT LAUDERDALE, Fla.-BankAtlantic Bancorp of Ft. Lauderdale said that it has added a safe- deposit feature to its Internet banking site.

The feature reportedly will allow customers to access an inventory of items normally kept in their actual bank-site safe-deposit box. It will also allow customers to electronically store documents in the bank's backup network servers, safe from home-computer crashes and deletions, according to the bank.

The bank is charging $2.50 a month for the service, with six months free to customers who enroll from its home page.

The boxes come in sizes of 20 to 200 megabytes.

Neches Collects Cell Phones

PORT NECHES, Texas-Neches FCU has teamed up with U.S. Rep. Pete Sessions (D-TX) to spearhead the local effort of a national push to collect old cell phones for victims of domestic violence.

The campaign, Call to Protect is gathering the cell phones to be distributed to victims of domestic violence, providing them with a close-at-hand link to help in times of emergency.

Through donated wireless phones, batteries, phone charging cords or stands, this program allows victims to call for help when in threatening situations, enabling police to respond immediately, said Scarlett Garsea, marketing director at the $35-million CU.

Just think of the difference it could make in the life of a domestic violence victim, by providing a lifeline in an emergency and instant access to help.

Call to Protect is a joint campaign among Sessions office, the Wireless Foundation, the National Coalition Against Domestic Violence and Motorola. The goal is to collect one million wireless phones.

Alysis Upgrades Internet Billing

EMERYVILLE, Calif.-Alysis Technologies announced an upgraded version of its WorkOut Internet billing and statement distribution system.

The new version offers business-to-business oversized bill segmenting, canned and ad hoc reports, web traffic analysis, enhanced event-driven e-mail notification and customized installation.