WHATEVER HAPPENED 2004

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Families Start Moving In Along Border

YUMA, Ariz.-In less than three months since it began participating in the "Arizona Border Initiative"-a program designed to increase home ownership along the Arizona-Mexico border-AEA Federal Credit Union has helped several families qualify for mortgage loans.

The Arizona Border Initiative, which includes Fannie Mae and the Federal Home Loan Bank, allows minority and immigrant families who are lacking the downpayment on a home and/or a poor credit history to meet flexible lending options. This includes a "sweat equity" program, which allows families to work on the construction of their own homes and trade their labor for a reduced down payment.

Teresa Laurent, AEA FCU's vice president of member service, told The Credit Union Journal five families already have qualified to buy a house. "If the program had not been available, we couldn't have done it," she said.

The families qualified for grants from the Federal Home Loan Bank, Laurent explained. AEA FCU is a member of a Federal Home Loan Bank-sponsored program that distributes grants to the Comite de Bien Estar - Spanish for "Committee for Well Being." AEA handles the grant money and releases it to the Comite as the project develops.

"Comite is a local non-profit organization supported by grants and donations," said Laurent. "The loans probably will be underwritten in the first part of 2005. Once we make sure they qualify, then building will begin."

According to Laurent, mortgage applications at AEA have tripled since the CU announced its participation in the program in late August. "It made so many more people aware these things are available," she said.

For people with credit that is not the best, the interest rate is slightly higher. However, if the borrowers make 24 consecutive on-time payments, the rate is reduced.

AEA recently conducted two Spanish-language seminars for first-time homebuyers. Two attendees of the first seminar have qualified for home loans, and several participants from the second seminar have made appointments with the CU's loan officers.

"It is hard to describe the feeling you get when you see someone's face and they say: 'We can buy a house?' It makes it all worth it," said Laurent. - Michael Bartlett

An Ironic Suitor For One CU's Closed Branch

SEASIDE, Calif.-Central Coast Federal Credit Union has decided its branch in nearby Marina, Calif., - which was robbed three times in four months earlier this year-will remain closed permanently.

When The Credit Union Journal first reported this story May 24, officials from the credit union had decided to close the Marina Branch for 90 days following a May 5 robbery that resulted in an injury to an employee. The branch manager was struck in both feet by shrapnel from a single bullet.

Bruce Adams, CEO of Central Coast FCU, said management discussed installing special doors or security cameras in an effort to keep the branch open.

However, the decision to close was made by the fact people no longer felt safe being there. Police still have not found the perpetrators of two of the robberies, and the only suspect arrested in the third turned himself in.

"It's too bad, because you hate to let the robbers have the upper hand, but in this situation, we had no choice," he said. "Our employees didn't want to work there. Many of our members didn't want to go there or bring their families there-and the credit union is for families."

Central Coast FCU has three other branches. Adams said each of those has been robbed at different times: "Of course that's going to happen over 24 years." But nothing to compare to the three-times-in-four-months spree that took place at the Marina branch.

Adams said the credit union is attempting to sub-lease the space where the branch was located.

He added an ATM still is on the premises, and will remain there even after the next tenant moves in.

"Ironically, a gun shop is interested in the space," he said. - Michael Bartlett

Two Penn. CUs Sign On For Check-Cashing

HARRISBURG, Pa.-In the first month since offering a check-cashing services program to member credit unions, the Pennsylvania Credit Union League has two takers-one expected to sign on in January-and "10 serious inquiries," according to Mike Wishnow, PCUA SVP-communications and marketing.

Certegy of Tampa, Fla., first introduced the program called "Paycheck Accept" in 1999 to the supermarket industry.

Consumers with proper identification could cash payroll and government-issues checks upon electronic approval via special counter terminals.

The league's new partnership with Certegy now allows credit unions to offer those same services for a $1,000 installation fee and 80 basis point fee for a guarantee of coverage on each check.

"We like the idea that we can offer through our credit unions a lower cost check cashing option," Wishnow said, calling it a win-win situation as it gives participating institutions the added opportunity of educating users of the service about credit unions.

With limited regulations protecting consumers against predatory lenders, league and state government officials agree, this program is a worthwhile option. - Lauralee Ortiz

Electric Co-op Helps The Financial Co-op

WEST LAFAYETTE, Ind.-Advertising efforts are in full swing for unique field of membership arrangement between Purdue Employees Federal Credit Union and Tipmont Rural Electric Membership Corp., a cooperative that provides electric power to 20,000 rural households and commercials sites, including PEFCU.

PEFCU CEO Bill Connors said both partners are promoting the arrangement that encourages TREMC members to join Purdue Employees FCU.

As a customer of TREMC who receives his bills electronically, Connors said, he has been pleased to see "very positive messages about opportunities for membership at our credit union" included in the last three correspondences to him. TREMC has also provided information about the CU in employee paystubs, he said.

He said the CU has added 50 news members from the campaign, so far.

While the NCUA granted the arrangement in April, Connors said it has taken many months to work out details and get marketing materials together.

As part of the arrangement, anyone who utilized TREMC for electricity, long-distance or Internet services is now eligible for membership at PEFCU. - Lauralee Ortiz

'Freedom Loans' For Vets Nets $1.1M

NORTH ANDOVER, Mass.-A product introduced in July by Merrimack Valley FCU that gives veterans and active military personnel discounted loan rates and reduced mortgage costs has generated $1.1 million in new loans, said Roger Allard, VP-lending.

"We've been very happy with the program and plan to continue it," Allard said, explaining that MVFCU plans to devote more staff time to promoting its "Freedom Loans" and add more direct and print advertising to spread the word about it.

The $382 million credit union serves 38,000 members and has promoted the product through presentations to veterans 'groups, newspaper advertising, lobby merchandising, and its website

Allard Merrimack Valley expects to launch a second product for the same target group-a credit card that gives additional bonus points and a rate reduction-during the first quarter of the new year, he said.

If the Freedom Loans are any indication of success, he expects the credit card will do very well. "Our Freedom Loans have been a real big help (to the military personnel)," he said. "I'm looking forward to some good growth in 2005."

Freedom Loans give a 1% discount on consumer loans and $1,000 off closing costs for any mortgage program.

Allard, a veteran whose own son was expected to end a yearlong tour of duty in Iraq by the year's end, said he was pleased the credit union could help military personnel and their families. - Lauralee Ortiz

Sender Of Postcards Remains Mum

TALLAHASSEE, Fla.-Credit unions across the country may recall receiving a postcard from a man in Boca Raton, Fla., looking to join a credit union in order to open a CD account. Several trade associations issued warnings to credit unions, suggesting they believed the postcard was bank-sponsored attempt to "catch" a credit union overstepping its field of membership bounds.

Although banking groups denied having anything to do with the hundreds of postcards sent to credit unions as far away as Hawaii, ties between the Boca Raton investment advisor, Mark Dern, who sent the postcard, and the Florida Bankers Association were discovered. Dern and his father run Dern Capital Management, and the firm's general counsel has also acted as counsel for the Florida Bankers Association.

While it is believed that most credit unions simply ignored the postcard, some credit unions did respond-and now the attorney is believed to be a credit union member.

"We don't know of any credit union to which he was not eligible to join that agreed to do business with him, but apparently some credit unions did send him information on their criteria for joining the credit union and told him if he fit any of those categories, he was welcome to join," said Mark Ivester of the Florida Credit Union League. "I don't know which credit unions, but I heard it through the grapevine that he has put some money in credit union that he was eligible to join. Living in Boca Raton, he was eligible to join several Palm Beach County-area credit unions."

In fact, Ivester called Dern to ask him why he was sending postcards to CUs as far away as Hawaii, when there were a number of local credit unions he was eligible to join.

"He didn't talk with me for very long, and mostly it was 'no comment,' but he was very mysterious," Ivester related. "It was like talking to a scared government employee about some sort of expose. He was whispering as if he wasn't supposed to be talking with me." - Lisa Freeman

Bank, CU Can't Save Historic 'Freedom Tree'

BROCKTON-Even the proposed collaboration between a local bank and credit union couldn't save a 200-year-old sycamore that marked the spot on the Underground Railroad where slavery abolitionists gathered to hear speeches. The famous landmark, known as the "Liberty Tree," was felled last week after Security Federal Savings Bank, which owned the property where the tree sat, and adjacent HarborOne CU, over whose parking lot much of the tree acted as a canopy, and local historic preservationists couldn't come up with a rescue plan. "We talked to them (the bank) briefly; we talked to the historical society, but it was beyond repair," Leo McNeil, head of marketing at the credit union, told The Credit Union Journal. The 300-year-old tree had opened a six-foot crack in its trunk from a recent storm, rot had set in and its huge branches were in danger of falling. But that doesn't mean the famous landmark will die off, as local historians were seen gathering up pieces and others were said to be selling them as memorabilia, said McNeil.

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