SACRAMENTO, Calif.–The California State Senate’s Appropriations Committee on Thursday approved legislation designed to hold retailers responsible for protecting consumer information by a 14-1 vote. According to Keri Bailey, lobbyist for the California Credit Union League, the bill is expected move to the Senate floor on Sept. 5. Until then, she told the Credit Union Journal, “We will continue our lobbying efforts, first on the Senate floor, then, if approved by the Senate, to get any amendments approved by the Assembly. If the Assembly approves it, the bill moves to the governor’s desk. He has 30 days to approve or veto the bill, and we will be turning up the heat on him for every one of those 30 days.” The bill began in the California State Assembly, which approved it June 5 by an overwhelming, 55-2 vote. The legislation is supported by the California Credit Union League and is opposed by the California Bankers Association and other groups. The CCUL said the bill addresses three deficiencies the credit union movement sees in California’s existing data breach notification law.

McLEAN, Va. – Freddie Mac reported yesterday second quarter earnings fell 45% to $764 million, or $1.02 a share, as the secondary mortgage market giant set aside $320 million to allow for loan losses on new mortgages. In addition, deteriorating credit quality in the mortgage market caused Freddie to reduce the fair market value of its investments by $800 million. Revenues for the second quarter and for the first two quarters of the year were basically flat. Richard Syron, CEO of the mortgage giant, said the company currently is working with regulators and customers to develop, "a market-oriented response that will help provide stability, liquidity and affordability to the national housing and mortgage markets." Many observers are expecting a political and financial plan from Freddie Mac and its sister, Fannie Mae, as well as Congress and the president, to help prevent massive foreclosures on mortgages by millions of U.S. homebuyers with the weakest credit profiles.

WASHINGTON – The Department of Defense will issue final rules today implementing a new law capping interest rates for military personnel and has agreed to restrict the scope of the final rules to answer pleas by credit unions. The rules will limit the new 36% interest rate cap to just three types of loans: payday loans up to $2,000 and as long as 91 days in duration, auto title loans less than 181 days in maturity, and refund anticipation loans. The final rules represent a victory for credit unions and banks who lobbied to prevent the interest rate cap being applied to a variety of other open-ended loan products. As a result, the final rules do not apply to mortgage loans, including home-purchase transactions, refinancings, home equity loans and lines of credit, and reverse mortgages. They also don’t apply to purchase money vehicle loans, secured personal property loans, loans secured by qualified retirement accounts, and credit that is not "consumer credit" or not subject to Regulation Z disclosures. The final rules also clarify that credit cards are not subject to coverage. Fred Becker, president of NAFCU, which helped shape the final rules, praised the DoD for limiting the scope of the measure, which was intended to reign in payday lenders and other types of high-cost credit that prey on enlisted personnel. “We believe that this objective has been achieved and we want to thank DoD for taking a very thoughtful and judicious approach in drafting a narrowly tailored rule to focus on the specific products giving rise to the most significant concern,” said Becker. CUNA also lobbied to limit the scope of the rules. The rules take effect Oct. 1.

DALLAS — City CU, one of the largest credit unions in the Dallas-Fort Worth area, said yesterday it has agreed to acquire DART FCU.

SALT LAKE CITY – Nine suspects were charged yesterday with running a counterfeit check ring that created bogus business checks and cashed them at most of the city’s major credit unions and banks. The ring messed up though, when they tried to pass a check using the signature of the federal prosecutor who had signed previous papers charging the ringleader with forgery. The defendant in both cases is 38-year-old Justine Coppolino. Coppolino apparently scanned the prosecutor’s signature off the old document and used it on a counterfeit check, authorities said. The group created high-quality fake checks on home computers which were cashed at Mountain America FCU, America First FCU, Zions Bank, Wells Fargo and Chase Bank, among others. In all, 83 phony checks were cashed for more than $70,000. The group made out the checks to themselves, then cashed them at grocery stores or other businesses. The authorizing signatures on the checks were scanned in signatures of real people, including the CEO of one local credit union and the former chairman of the Utah Board of Pardons and Parole.

PORTLAND, Ore. – A York County woman was sentenced Tuesday to 29 months in prison for a sophisticated check kiting scheme that drained more than $45,000 from area credit unions and banks. Twenty-eight-year-old Cori Godin pleaded guilty to using several false Social Security numbers to open accounts, then draw checks on the accounts despite insufficient funds. Among the institutions at which she opened accounts: Salmon Falls Community CU, Ocean Communities FCU, York County FCU, as well as Ocean National Bank, TD Banknorth, Kennebunk Savings Bank, Biddeford Savings Bank and Bank of America.

DALLAS – City CU, one of the largest credit unions in the Dallas-Fort Worth area, said yesterday it has agreed to acquire DART FCU. City CU, founded in 1942 to serve Dallas employees, has $153 million in assets and serves 32,000 members. DART FCU, with almost $5 million in assets, was founded in 1939 and serves Dallas Area Rapid Transit, members of the Dallas Gay and Lesbian Alliance, and several select groups.

ROME, N.Y. – AmeriCU CU has applied to state regulators for permission to add three more branches to its current network of 11 outlets. The new branches would be in the upstate New York towns of Cicero, Lowville and Herkimer. The credit union has more than $600 million in assets and serves more than 100,000 members.

LOS ALAMOS, N.M. – Members of Del Norte CU are being targeted by a telephone solicitation to give out their personal account information, a so-called “vishing” scheme. Members have been receiving automated phone calls instructing them to call a toll-free number and provide their credit union debit or credit card account number. The credit union has assured its members account databases have not been compromised by this scam. Officials also reminded members Del Norte CU never contacts them to request private information regarding their accounts. Members who may already have responded to the scam are advised to contact the credit union immediately.

CHICAGO – Chicago Patrolmen’s CU said yesterday it signed with LifeLock to help prevent and resolve cases of identity theft among its members. LifeLock enables members to ‘lock’ their credit by setting and automatically renewing fraud alerts with the three major credit bureaus, removing member names from pre-approved credit card offers and junk mail lists, and providing a $1 million guarantee. LifeLock is based in Tempe, Ariz.

CINCINNATI – CINCO Family Financial Center CU said it has signed with Lending Solutions to enable online lending capabilities. CINCO is expanding its loan services to include LSI’s National Loan Processing call center. CINCO serves residents in three surrounding counties: Hamilton, Butler and Clermont.

FLINT, Mich. – DORT FCU said yesterday it has signed with Diebold to implement the company’s ImageWay Branch and ImageWay ATM systems to implement check imaging at its ATMs. The systems will allow the credit union to have image capture across channels. ImageWay Branch uses a secure, browser-based system with image capture software and hardware. ImageWay ATM allows members to deposit checks at the ATM.

ALBANY, N.Y. – The board of Excelsior CU has approved a bonus dividend and interest refund to members in the amount of $750,000, to be paid prior to the $90 million credit union’s merger with Capital Communications FCU. Payments will be posted to Excelsior members’ regular share draft accounts in mid-September. The pre-merger payout will be divided equally between savers and borrowers. This is the fourth merger for $560 million CapCom in the past three years.

FORT MYERS, Fla. – As regulators tally the losses of two failed Florida real estate developments that helped sink three credit unions, observers are wondering who will take the final hit on more than $500 million in loans made by the three credit unions to investors in the properties. NCUA, which may end up holding the failed loans, emphasized this week it has not yet assumed any of the assets of the two credit union failures it currently is running as conservatorships, Colorado’s Norlarco CU and Michigan’s Huron River Area FCU. "They’re still on the books of the credit unions," John McKechnie, spokesman for NCUA, told The Credit Union Journal. The two credit unions and a third failure, New Horizons Community FCU, were among a half-dozen lenders to “Millionaire University,” a real estate speculation scheme that promised investors in the developments here–known as Cape Coral and Lehigh Acres–a 14% annual return. Charge-off rates on the loans are soaring as investors are fleeing the failed developments. In addition, hundreds are suing the credit unions and other participants in the scheme to hold off foreclosure, promising additional charge-offs in the coming weeks and months. Still to be tallied is the effect on dozens of other credit unions that purchased participations in the real estate loan pools. Superior Choice CU in Wisconsin, which is suing Norlarco over a participation agreement, has seen its delinquencies leap from just $150,000 in the first quarter to more than $5.4 million at mid-year. If NCUA assumes ownership of the loans, as is widely expected, it could affect the entire credit union movement by eating into possible dividends for the National CU Share Insurance Fund.

DAYTON, Ohio – NCR announced yesterday the Internal Revenue Service has approved the pending spin-off of its Teradata data warehousing subsidiary as a tax-free transaction. The IRS ruling sets the stage for the spin-off of Teradata to NCR shareholders on a one-to-one share basis. The spin-off is scheduled to take place Sept. 14. Teradata will trade on the NYSE under the symbol TDC.

CLEARWATER, Fla. – Card Services for CUs said it will return a cash patronage dividend to member credit unions of $3.7 million, equal to 100% of its membership fees from 2006. Credit union-owned CSCU has 3,200 member credit unions representing more than 12.5 million accounts. President Bob Hackeny said the patronage dividend payment means CSCU is "essentially making membership free for the year."

NORTH HIGHLANDS, Calif. – SAFE CU said yesterday it has installed Integrated Media Management’s TotalChecks suite of software products for document output and signature capture. The suit also includes TotalAtlas and TotalReceipts. The paperless technology will connect to the $1.4 billion credit union’s 20 branches.

SYRACUSE, N.Y. – A member of Empower FCU was sentenced to two years in prison and ordered to pay restitution for a scheme by which she drained almost $67,000 from credit union ATMs. LaVoya Dixon, 27, was convicted on charges of bank fraud. Dixon enlisted 41 people in a scheme to make phony deposits with empty envelopes at ATMs, then withdrawing the cash based on the deposits.

ALBANY, Ga. – Meals on Wheels has a new delivery method thanks to SoDoCo CU, which donated a repossessed Nissan Pathfinder to the cause. The credit union usually sells its repos, but answered the call for help by the local Council on Aging. This is the second vehicle donated to the local Meals program. Meals on Wheels serves people in 14 counties.

FLINT, Mich. – Security FCU, the credit union for General Motors workers, said it has expanded the list of GM vehicles eligible for a 1% discount on auto loans. GM vehicles added to the credit union’s Community Support Program include all those with 3.6-liter V-6 engines built at GM’s Flint Engine South Plant. This includes 2008 models of the Buick Enclave, GMC Acadia, Pontiac G6, Saturn Aura and Saturn Outlook. The program, created in 2005, provides Security FCU members a 1% discount from regular auto loan rates for purchases of qualifying vehicles.