Texas CU Works To Recover From Debit Card Breach
AMARILLO, Texas-The People's FCU last week was working to recover from a debit card data breach that affected some member accounts. An organized crime group is suspected of being behind the breach, in which random debit card numbers were generated and then used to make purchases, primarily in California. Members lined up at branches to obtain new cards and to have their accounts made whole following the breach. In a statement, the credit union emphasized that no individual member data was obtained as part of the breach; it was also denying all signature requests made outside Texas. Charges on the breached cards ranged from a few hundred dollars to more than $1,000.
NJ, MD/DC Leagues Drop Plans To Pursue Merger
HIGHTSTOWN, N.J. and COLUMBIA, MD - The Maryland and District of Columbia CU Association and the New Jersey CU League said they will not pursue a merger and will remain independent of each other. The two associations had announced plans in February to form exploratory committees to explore a potential merger, and had hosted discussion groups with their respective affiliates about such a combination.
In a statement, the two leagues said, "While the merger committees found some compelling reasons to merge and regionalize as is occurring with leagues in other parts of the country, the boards determined at this time the best course of action for affiliated member credit unions was to remain independent. With much discussion between both parties it was decided the timing of a merger was not optimal."
The MDDCCUA serves 129 CUs; the NJCUL 153 CUs.
Kinecta Expands Mrtg. Operations
MANHATTAN BEACH, Calif. - Kinecta FCU, already the biggest check cashing outlet in Southern California, said last week it is opening a new mortgage center in nearby Newport Beach to fuel its expanding home loan business. The $3.5-billion credit union has purchased a 9,500-square-foot office where it plans to staff 30 positions and offer a variety of residential and commercial mortgages, and is hiring new loan officers to staff the project. Kinecta said it originated more than 6,000 mortgages worth $2.7 billion in 25 states last year.
NY May Create Carve Out
ALBANY, N.Y.--New York State, whose 25% cap on interest rates for short-term loans is one of the country's strictest usury laws, is considering carving out an exception for check cashers. In May the State Senate Banking Committee passed a bill that would allow check cashers to make loans for periods from 90 to 180 days with a maximum rate to be determined by the New York State superintendent of banks, according to American Banker, an affiliate of Credit Union Journal.
Consumer advocates call the legislation a backdoor attempt to allow payday lending in the nation's third-most populous state. The bill's progress, after several years of languishing, comes after Wells Fargo & Co. shelved a plan to offer its "direct deposit advance" loan in New York and other East Coast states following a public outcry. The annual percentage rates on that loan, which Wells offers in 26 states, range from 120% to 1,200%.
The check-cashing industry argues that strictly regulated short-term loans are a preferable alternative to the Internet payday loans that many low-income New Yorkers are taking out.
CU To Auction Country Club
WAREHAM, Mass.-Digital FCU has scheduled a public auction later this month for the Bay Pointe Country Club golf course it acquired in a foreclosure. The golf course sits on 138 acres of land and includes an 11,074-square-foot clubhouse. The auction is scheduled for June 22.
Sentencing In Dead Man Scam
MARLBOROUGH, Mass.-A local man was sentenced to a suspended jail term last week for cashing thousands of dollars of a dead friend's disability checks at St. Mary's CU. The sentence-two years in jail suspended for three years-came after Floyd Russell, 51, pleaded guilty to 25 counts. If Russell commits a crime during the three years, he will be jailed and ordered to serve the two years.
Russell was arrested in September 2009 after the credit union contacted police and told them a member had died but his disability checks were still being cashed. Russell told police he cashed the checks to cover the cost of the man's funeral.