Navy FCU To Surcharge Outsiders
VIENNA, Va.-Navy FCU, which joined the CO-OP Network last week, said it will begin surcharging non-CO-OP cardholders for the use of its ATMs beginning in May. Brian McDonnell, president of the world's largest credit union, said they reversed their "no-surcharge" policy because too many outside users of Navy's 300 ATMs were being subsidized by the $17-billion credit union, while other credit unions were surcharging Navy members to use their ATMs.
"We had to give in; people were making money off of us," McDonnell told The Credit Union Journal. The new fees are expected to earn Navy as much as $3 million a year.
CU Convert Devours Former Brethren
SYRACUS, N.Y.-Beacon Federal Savings Bank, one of the first credit unions to convert to a mutual thrift, has a unique growth strategy-it is acquiring small credit unions. Earlier this month the $245-million mutual acquired nearby Salt City Hospitals CU, an $8 million Syracuse credit union, the bank's third credit union acquisition in two years.
That follows 2001 deals to acquire Professional Teachers CU, McMinnville, Tenn., and tiny Caney Fork Cooperative CU, also in McMinnville, Tenn. Several other credit unions converts are also reported to be interested in acquiring credit unions.
One Less Corporate After Merger
BIRMINGHAM, Ala.-The corporate network will shrink by one less corporate after the planned merger of Alabama Corporate CU into Southeast Corporate FCU, The Credit Union Journal has learned. The deal to create a regional corporate with more than $4 billion in assets has been tentatively approved.
The only issue remaining is whether state- chartered credit unions in Alabama will continue to be able to deduct their corporate dividends from their state excise taxes, according to sources. Florida-based Southeast Corporate bested four other corporates bidding to acquire Alabama Corporate.
Members Get $5-Million Payday
ROCHESTER, N.Y.-Members of credit union giant ESL FCU will share in the credit union's biggest ever payout--a $5 million bonus dividend. The payout will be based on a percentage of total dividends earned and interest paid on loans, with the average mortgage holder getting a payback of more than $200. This is the seventh year in a row the $2.4 billion credit union will pay a bonus dividend.
Community Development CU Seized
SPRINGFIELD, Mass.-NCUA took under conservatorship D. Edward Wells FCU, a well-known community development credit union here.
The credit union, headed by outspoken former Federation of CDCUs chief Carol Aranjo, had serious operational deficiencies and failed to provide NCUA examiners with full access to its books, NCUA said in announcing the federal takeover.
NCUA will run the $3-million, 2,600-member credit union until it decides on a permanent resolution.
Terrorist Suspects Laundered Funds
TAMPA, Fla.-A University of South Florida professor was charged in federal court last week with laundering funds through several U.S. financial institution, including USF FCU here, to aid the Palestinian Islamic Jihad, an organization linked to terrorist bombings in Israel and other countries. Sami al-Arian, 45, a Kuwaiti-born computer science teacher, was arrested last week, along with three others in the latest crackdown on U.S.-based financing of Middle East terrorist operations.
A 121-page federal indictment charges that al-Arian used USF FCU, as well as predecessors of Bank of America and Wachovia, to launder funds for the terrorist group, the first known tie between U.S. credit unions and international terrorism. The indictment charges that al-Arian transferred $5,000 from a credit union account on June 1, 1993 to a Tampa bank, then made four separate $2,000 wire transfers to his account at a bank for use by spouses of jailed PIJ bombers. Federal authorities have been watching al-Arian for years trying to collect enough evidence to charge him with criminal activities.
Langley FCU Plans New Headquarters Project
NEWPORT NEWS, Va.-Fast-growing Langley FCU is planning to move its headquarters from nearby Hampton to a new office development being built in the city center at Oyster Point. The credit union will occupy 25,000 square feet of the 80,000 square-foot $10 million project to be called Fountain Plaza Three. The $820 million credit union will maintain its existing Hampton offices, where it has been since 1985, as an operations center.
