CUAO CEO Gene Poitras to Retire

NEW YORK - Citibank is reporting significantly increased credit costs within its consumer banking business, with some analysts saying the losses are a signal of broader problems among consumers. The bank said it also has boosted reserves to cover some losses "not yet visible" and to address "declining new residential sales." "This quarter, we continued to see higher delinquencies in our overall consumer mortgage portfolio, and our reserve increase reflects these trends," said Citibank's CFO Gary Crittenden. The company had nearly $6 billion of unexpected losses and charges in the third quarter. Approximately 44% of the charges and losses, or $2.6 billion, came in the form of higher credit costs, largely related to its consumer portfolio. The $2.2-trillion bank boosted its loan loss reserve by $245 million.

CU Journal explored the advantages larger CUs have over their smaller brethren. Now, CUJ focuses on how some small CUs are not only surviving, but thriving.

SAN FRANCISCO - Wells Fargo Merchant Services LLC and Discover Financial Services announced an agreement to offer full-service processing for all Discover transactions through Wells Fargo Merchant Services. Wells Fargo customers will have seamless card payment processing for a broader range of payment options at the point of sale.

WASHINGTON - A bill aimed at reforming abusive overdraft protection practices could reform the service right out of credit unions-eliminating an important source of non-interest income for many CUs.

A few months ago I had the pleasure of visiting Boston for the first time. Not having ever been to Boston, I chose to hit the streets and begin my aimless pursuit of a mug of Boston's finest.

In recent months credit unions have found it difficult to improve their margin position - the difference between what is earned on loans and investments and what is paid on members' deposits.

Does your credit union have various programs in place to help members with the various "steps" in their lives? Chances are you do. But does your CU also let those same members do your marketing for you by offering in-branch testimonials on how the credit union has helped them move from one step to the next? It's just as likely you do not.

Frank Diekmann's column in the Sept. 17 issue of the Credit Union Journal referenced bloggers on the Internet who had written, "I hate my credit union." I'd like to add my own personal perspective. Apparently these individuals were incensed about having to stand in line waiting for what seemed to be an eternity to process their financial transaction because credit unions have failed to staff appropriately.

ORLANDO, Fla. – The $438-million Insight Financial Credit Union has made a $1 million donation to the Seminole Community College Foundation. The contribution will be used toward the future construction of a signature building on SCC's Sanford/Lake Mary Campus.

CHANTILLY, Va. – Online Resources has partnered with Fair Isaac to make its web-based collections tool available to hundreds of collection agencies and debt buyers via Fair Isaac's ScoreNet network. “The partnership will allow ScoreNet users to access an Internet connection product while providing an easier exchange of account data between the two firms,” the companies said. ScoreNet provides managed access between more than 1,300 creditors and third-party business providers. The two firms' connection links all parties in the debt collection chain. Online Resources' suite includes its Virtual Collection Agent, a 24/7 web product that works to reduce losses from delinquent consumers accounts and CollectPay, an integrated online payment service that increases consumer options while lowering processing costs.

MADISON, Wis. – CUNA Mutual Group has signed an agreement with the World Council of Credit Unions that it will provide $100,000 in annual support for 2007 and 2008 for the World Council of Credit Unions. The agreement includes an international development grant to create the CUNA Mutual Group Fund for Leadership and Innovation to support credit union “strengthening where needs are greatest and the CUNA Mutual Group Global Credit Union Disaster Relief Fund to assist WOCCU with disaster relief efforts,” according to CUNA Mutual. The grant also will support WOCCU’s annual World Credit Union Conference. CUNA Mutual Group reported its support of WOCCU’s “Building Trust in Cambodia” initiative is “putting credit union buildings on the ground, helping increase lending capacity and providing members with a secure place to save.”

WASHINGTON – Backers of legislation in Congress that would limit ownership of industrial loan companies did not find the kind of support they were hoping for in a hearing last week. The leading opponent of the bill, Sen. Robert Bennett (R-UT), has said he will put a stop to any bill that would ban commercial companies from owning ILCs. Utah, along with Nevada, home to Sen. Harry Reid (D-NV) who also is a critic of such limits, is home to the charters of numerous ILCs. Banks have been lobbying Congress to limit ILCs, which allow other commercial interests to own banking subsidiaries or subsidiaries that conduct financial transactions. One key hang-up: which agency would have oversight of ILCs?

READING, Penn. – Another major bank is boosting its provisions for loan losses and citing deterioration in the consumer credit market, along with volatility in mortgage backed securities, as the reason. Sovereign Bancorp said it will boost its provision for credit losses to between $155 million and $165 million from between $104 million and $114 million. The bank said approximately $50 million of the increase is related to the bank's remaining correspondent home equity loan portfolio, and about $40 million of the increase is related to the company's decision to increase reserves in its indirect auto-lending portfolio. Sovereign’s move follows a similar loan loss provision boost by Citibank last week.

FALL RIVER, Mass. – Three female employees at St. Michael Credit Union here are being credited with foiling a robbery by pinning the alleged robber on the ground and sitting on him until police arrived. The man, identified as Jose Dias, had entered the credit union with a fake gun with the intention of robbing. Police did not release details, but Sergeant Paul Bernier of Fall River Police said the three women were able to wrestle the man to the ground and hold him.

WASHINGTON – Congress is revisiting bankruptcy reform even though it just passed a major overhaul of bankruptcy laws. Leading to Congress’ rekindled interest in an issue many were glad to put behind them is fallout from a larger problem that already has been the subject of separate hearings: the crash of the subprime mortgage market. A House Judiciary subcommittee already has approved a bankruptcy-related bill, and two, similar new bills have been submitted in the Senate. All of the bills create a distinction for mortgages within bankruptcy proceedings and at least one bill, from Sen. Richard Durbin (D-IL), would allow borrowers to rescind a mortgage if the lender violated the Truth in Lending Act or any other state or federal consumer protection law. The Durbin bill also would give bankruptcy court judges the power to reduce the interest rate on home mortgages and extend the maturity of it up to 30 years. Sen. Arlen Spector (R-PA) has introduced a bill that would allow mortgages to be modified only if they were underwritten before Sept. 26. In both cases, analysts are critical of the proposals, arguing it modifies the status of an asset for a financial institution.

WASHINGTON – The House has voted overwhelmingly, 386-27, in favor of providing tax relief to borrowers having trouble paying their mortgages. The bill would free borrowers from income tax on up to $2 million of debt forgiven on a primary mortgage. It also would extend the allowance of mortgage insurance deductions through 2014. President Bush already has indicated he supports similar legislation, but added he wants the change to be temporary. The Mortgage Forgiveness Debt Relief Act passed the House Ways and Means Committee unanimously, reported American Banker.

DUBUQUE, Iowa – The $460-million Dupaco Community Credit Union became the first financial institution in the state of Iowa to approve a Patriot Express loan to a member of the military community. The Patriot Express Loan was developed to help veterans and members of the military community who want to establish or expand a small business. “The Patriot Express is a terrific loan program for our members who are veterans and reservists," said Steve Baumhover, Dupaco's vice president of business services. "The program allows Dupaco to make loans available at reasonable rates with flexible terms. SBA has streamlined the application process, allowing it to be completed in just a few days." Dupaco's Patriot Express Loan was made to Asbury Family Chiropractic, owned and operated by Dr. Greg Crowley, a veteran of the U.S. Navy.

MADISON, Wis. – CUNA Mutual has entered into an alliance with Liberty Mutual to enhance its workers’ compensation line. Liberty Mutual is the nation’s second-largest workers' compensation provider. Liberty Mutual will underwrite policies, process claims and provide loss prevention services, while CUNA Mutual will continue to manage the program and distribute the product to credit unions. CUNA Mutual’s new offering in conjunction with Liberty Mutual becomes effective for new policies Jan. 1, 2008, and for policy renewals beginning March 1, 2008. For info: www.cunamutual.com.

SECAUCUS, N.J. – NYCE Payments Network said it will begin offering mobile banking and payments services to financial institutions, saying it will be the first commercially available service from a U.S. debit card payments network. Monitise Americas and Metavante Corp. have signed an agreement through which NYCE will deliver the Monitise Americas platform directly over its existing network architecture. Monitise Americas is a mobile banking and payments system for North America formed by the joint venture between Metavante Corp. and Monitise plc, a provider of mobile banking and payments services. NYCE said it will deliver the mobile banking and payments service across multiple mobile carriers, so most consumers would be able to use the service without having to switch carriers or handsets. Planned services include balance inquiries, funds transfers, mini-statements, text message alerts and bill payment. It said several financial institutions will launch services beginning in the fourth quarter of this year.