The CUJ Journal Daily
PSECU Sues BJ's Over Theft
HARRISBURG, Penn.-Pennsylvania State Employees CU has sued BJ's Wholesale Club to recover the $98,000 it cost the credit union to replace credit cards this Spring when a breach in security caused consumer information at dozens of East Coast financial institutions to fall into the wrong hands. Officials at the credit union giant said they tried to recover the costs through negotiations but were unsuccessful.
Officials at dozens of institutions, including several CUs, said the security breach resulted in hundreds of thousands of illegal charges in their customers'/members' names. PSECU claims that BJ's and its merchant processor, Fifth Third Bancorp, violated Visa's regulations by retaining information on its databases off the magnetic stripes of Visa cards. That data can be used to make counterfeit cards or fraudulent purchases over the phone or Internet.
Debit Cards Compromised
LANSING, Mich.-About 2,000 Michigan State University FCU members had their Visa check card accounts potentially compromised when a local restaurant stored the card numbers, in violation of Visa policy. The restaurant, which has not been disclosed, faces a fine of up to $500,000 by Visa as a result of the breach of policy. MSUFCU has begun replacing the cards even though officials do not know of any misuse of data. Customers at other area financial institutions have also been affected.
Activists Seek CDCU's Rebirth
DENVER-Founders of the Denver Community Development Credit Union are asking a federal bankruptcy court to unwind the merger and liquidation of the 10-year-old CDCU, almost two months after state regulators approved the purchase and assumption of the failed institution into Denver Community FCU.
Thomas Foster, who helped charter the credit union and was one of the dissenting directors in the merger vote, has filed a petition with the U.S. Bankruptcy Court for an involuntary Chapter 11 to reorganize the credit union, which was taken under conservatorship by the state Feb. 9, then merged on June 25.
But state regulators assert that federally insured financial institutions are exempt from federal bankruptcy laws and have asked the court to dismiss the unusual petition.
"This is an effort to unravel the merger, to get the credit union back, But we feel it's too late. The merger is done," David Paul, commissioner of the Division of Financial Services, told The Credit Union Journal.
Net capital in the $2.7-million credit union had declined to 3.3% by Dec. 31, well below NCUA's minimum capital requirement under PCA, and to less than 1% at March 31, according to Paul. "There was no viable plan to return it to an adequate capital level," he said.
CO-OP Wins Another Billion-Dollar CU
ONTARIO, Calif.-The CO-OP Network signed Coastal CU, the $1.4-billion former IBM employees credit union, as a member.
Under the deal, the credit union-owned network will provide full access to Coastal members for its 19,000 ATMs and debit network, and the Raleigh, N.C.-based credit union will add its 375 ATMs in North Carolina to the CO-OP Network. The network claims more than 1,725 CU members.
Thieves Lose Stolen ATM
MISSOULA, Mont.-Two daring bandits hooked a chain to a Missoula FCU ATM and tore it away from its foundation at a local retail store, then sped away in a stolen Chevy Suburban, before losing the machine along the highway as they made their getaway.
The heavy machine apparently broke free of the chain and tumbled off the side of the road as the thieves drove away, according to police.
The cash inside the machine remained intact. The stolen getaway vehicle was recovered.
SECU Eliminated Number of Fees
RALEIGH, N.C.-State Employees' CU said it eliminated the service fees on a number of products, saying it was seeking to make basic financial services more cost effective for members. Fees for check copies and statements, debit card reissues and travelers checks have all been dropped. In the case of the fee for check and statement copies, for example, SECU had been offering the copies free via the secured section of its website, but members who needed to order paper copies were charged 50 cents for the first two copies and $1 additional copies.