PATRIOT Rules Delayed
WASHINGTON, D.C.-The Treasury Department did not issue final rules implementing USA PATRIOT Act by the Oct. 25 statutory deadline, and Treasury said it may be six more months before rules related to accountholder identification requirements are finalized.
"The Department will publish regulations called for by the PATRIOT Act within the next six months," the Treasury said in a statement. "This includes not only regulations called for by section 352 of the Act, but also other provisions, such as section 326, which requires financial institutions to develop procedures for identifying and verifying the identity of accountholders."
The PATRIOT Act requires credit unions to: Verify a person's identity at account opening; maintain records of the information used to verify the person's identity; and, determine whether the person appears on any lists of terrorists provided by any government agency.
Brokerage Suit Filed
BATON ROUGE, La.-In the first civil case brought over rogue broker Bentley Financial Services, Ascension School Employees CU has charged its accounting firm with failure to detect the fraud authorities believe was perpetrated by the Paoli, Pa., CD broker.
The suit, filed in state court here, claims that Provost, Salter, Harper & Alford LLC failed to confirm the existence of financial institutions Bentley allegedly invested the $4 million of the credit union's fund with. Instead, the auditors sought confirmation of the investments with a front company Bentley created, the credit union claims.
Bentley, which brokered CDs for 120 credit unions, was taken over last April by federal regulators who allege the firm operated a massive Ponzi scheme by selling CDs to institutional investors claiming the CDs were bank issued, when in fact, the funds were used by Bentley to buy CDs in its own name at higher rates than those advertised to its clients.
A receiver for Bentley told The Credit Union Journal he expects credit unions and other investors to recover about 95% of their investments.
CU Helps Nab Murder Suspect
ROCHESTER, N.Y.-The $2.4-billion ESL FCU has assisted Atlanta police in arresting a murder suspect. The credit union had been contacted by Atlanta police Detective Vince Velazquez after a member of the credit union who lives in Atlanta was found murdered.
The credit union found that the member's debit card continued to be used, and police asked that ESL FCU leave the account open. ESL Security Manager Robert Lukasiewicz launched an investigation into the purchases and found the card was being used only at gas stations in the Atlanta area, and more often as each day passed. ESL Electronic Services Manager Tari Hilliker, with the help of the third- party vendor, had developed a program that would notify ESL within one minute of debit card "pre-authorizations," and card activity was immediately forwarded to Detective Velazquez.
After being informed of a 12:35 a.m. purchase, Valezquez and several Atlanta police officers apprehended the suspect with the card and was taken into custody.
UofC FCU In Homeownership Plan
BOULDER, Colo.-U of C FCU said Wednesday it has joined Thistle Community Housing to create a non-profit initiative to buy area homes and turn them into affordable homes in what is believed to be the first such partnership in the country.
The "Alliance for the American Dream" aims to raise $2.5 million over the next five years which will be used by Thistle, a non-profit, to buy apartments, townhouses and single-family homes. The $550-million credit union has donated $25,000 to the project and will manage the fund account, process contributions and assist with fundraising. Thistle has helped 2,500 families buy affordable homes since 1988.
The Journal's SEG & Business Development Conference-March 9-11, 2003 in San Diego. Watch for details.
