FORT MYERS, Fla. – The failure of two Midwest credit unions after their involvement in Florida land speculation has brought another new challenge to the burgeoning credit union market for loan participations. One of the two credit unions, Norlarco CU, was sued in federal court in Denver three weeks ago by a Wisconsin credit union, Superior Choice CU. Norlarco sold Superior Choice CU participation in a multimillion dollar construction loan to finance a massive residential development that went bust. Norlarco, based in Fort Collins, Colo., and Huron River Area FCU in Lansing, Mich., made hundreds of millions of dollars in construction loans to investors in the Cape Coral and Lehigh Acres developments here, which have since gone sour. In asking for repurchase of its $12.1 participation and triple damages, Superior Choice CU claims Norlarco did not adequately disclose all provisions of the loan deal. Loan participations, known as syndications among banks, recently have come under scrutiny due to the failure of subprime auto lender Centrix Financial–which forced dozens of credit unions to fight amongst themselves over the spoils of the bankrupt company. In one recent settlement the Credit Union of Texas was forced to buy back $13 million of a $90 million participation pool it had sold to Mission FCU. Gary Elliott, president of Superior Choice, refused to comment on the dispute, saying only the case is being litigated. But according to allegations in the suit, Superior Choice was induced to participate in the loans because it was told the project’s developer, First American Mortgage, guaranteed the construction loans on behalf of the home buyers. Later, an independent consultant hired by the Wisconsin credit union, Counter Intelligence Associates, reiterated the existence of the builder guarantee as grounds for participating in the loan. But neither Superior Choice CU nor CIA was told of a new addendum to the agreement between Norlarco and First American Mortgage that eliminated the guarantee. As a result of the Florida mess, Norlarco, which was secretly taken over by NCUA in May, reported a 31% delinquency rate for its real estate loans and losses of $5.2 million at mid-year. Huron River Area reported a 13.2% delinquency rate for its real estate loans and losses of $58.9 million.

FORT WORTH — American Airlines FCU said it awarded one lucky member a 2007 Ford Escape hybrid, one of five vehicles the credit union giant is giving away to help increase sales. The credit union's "Road to Success Sweepstakes" offers members an entry into a drawing for one of the five vehicles by opening one or multiple new accounts or products. The first winner was Kenneth Phelps, a retired American Airlines pilot and a credit union member since 1955. The sweepstakes began July 1 and will run through Nov. 30. The $4 billion credit union will be giving away one new vehicle each month until then, including a Ford Edge, Chevrolet Silverado, Chevrolet Tahoe and Toyota FJ Cruiser.

MINNEAPOLIS – Wolters Kluwer Financial Services said yesterday it has acquired AppOne Companies, a provider of indirect loan technology. AppOne’s offerings include systems that automate indirect lending, credit approval and compliance for lenders and independent auto dealers. Wolters Kluwer provides standard and customized forms, electronic documents and other services to a majority of top-tier U.S. auto finance lenders and plans to integrate its compliance content with AppOne’s process automation suite. Financial terms of the deal were not disclosed.

LOS OLIVOS, Calif. – William Foley, the man who earned more than $300 million from the split up of Fidelity National Information Services from Fidelity National Title, is going into the wine business full time with the purchase of Firestone Vineyard from Brooks Firestone, the heir of the tire manufacturing company. Foley, who already runs a small vineyard, has acquired the Firestone brand name as well as 480 acres in the Santa Ynez Valley. The Firestone vineyards currently produce about 150,000 cases of wine per year. Fidelity National Information is one of the leading credit union outsourcers.

BUFFALO, N.Y. – Three suspects arrested last week for the armed robbery at Lancaster Depew FCU may be involved in a string of as many as four other credit union hold-ups in recent months. Arrests have been made in the earlier robberies, but authorities are investigating whether the suspects are working together. There has been a rash of credit union robberies in the area over the last four months, at: Olean Area FCU, Tonawanda Community FCU and two at Financial Trust CU.

FORT WORTH, Texas – American Airlines FCU said it awarded one lucky member a 2007 Ford Escape hybrid, one of five vehicles the credit union giant is giving away to help increase sales. The credit union’s “Road to Success Sweepstakes” offers members an entry into a drawing for one of the five vehicles by opening one or multiple new accounts or products. The first winner was Kenneth Phelps, a retired American Airlines pilot and a credit union member since 1955. The sweepstakes began July 1 and will run through Nov. 30. The $4 billion credit union will be giving away one new vehicle each month until then, including a Ford Edge, Chevrolet Silverado, Chevrolet Tahoe and Toyota FJ Cruiser.

ALEXANDRIA, Va. – The former manager of Dover Spanish-American FCU was barred from the credit union industry by NCUA for stealing more than $20,000 from inactive accounts. Yvis Rosario, 25, was convicted of theft and ordered to pay restitution and complete 50 hours of community service. Also barred from the industry were: Nina Kizekai, former teller at Pawtucket (R.I.) CU; Lauretta Lipkin, former lending and financial services manager, and Adrea Swainey, former employee, at Capital Trust FCU in St. Paul, Minn., and Valerie Saloney, former employee at Merho FCU, in Johnstown, Penn.

McLEAN, Va. – Mortgage rates declined about one-tenth of a percent across the board last week, continuing recent declines, Freddie Mac said yesterday. The average for the benchmark 30-year, fixed-rate loan fell to 6.52%, from 6.62% last week; while the average for the 15-year, fixed-rate mortgage slipped all the way to 6.18%, from 6.30% last week. ARM rates also moved lower, with the average for the one-year ARM dipping to 5.60%, from 5.67%; and the average for the five-year ARM falling a single basis point to 6.34%. Frank Nothaft, chief economist for Freddie Mac, attributed the lower rates to the fall in Treasury yields and the Fed’s decision last week to cut the discount rate by 50 basis points, to 5.75%.

CHARLOTTE, N.C. – Four men were arrested yesterday and charged with planning to detonate a bomb at a local school to distract police so they could rob a credit union. The four, who were arrested while they slept early yesterday morning, planned to rob the local branch of Founders FCU later in the day, police said. Two pipe bombs were seized at the house where the arrests were made. Authorities don’t know which school was targeted. The men were arrested based on a tip from the local Crime Stoppers hotline. Charged in the alleged plot were: Timothy Eddington, 35, his 18-year-old son Steven Eddington, and the father’s nephew, 19-year-old William Puckett, and 19-year-old Edgar Williams.

FORT MYERS, Fla. – NCUA is still tallying hundreds of millions of dollars in losses accrued by two credit unions–one in Michigan, one in Colorado–the federal regulator took over earlier this year. The loan losses came after thousands of homebuyers walked away from failed real estate developments near Florida’s Gulf Coast–thousands of miles from the credit unions’ home offices. NCUA is trying to sell the two credit unions, Huron River Area FCU of Ann Arbor, Mich., and Norlarco CU of Fort Collins, Colo., both of which are buried by real estate construction loans in Cape Coral and Lehigh Acres. Norlarco, Colorado’s eighth-largest credit union with almost $400 million in assets, has seen its real estate charge-offs rise ten-fold this year to almost $60 million, with similar mortgage losses accruing at Huron River. The two credit unions were among a handful of lenders that provided mortgages to speculative investors far afield–in Philadelphia, Miami and Georgia–who ended up defaulting on the loans when the value of the property plummeted over the past two years, according to several lawsuits filed in the case. It’s not clear how the speculators qualified for membership in the Michigan and Colorado credit unions. So far, at least 29 suits have been filed in Lee County Superior Court and a class action suit was filed in federal court. For Huron River Area, most of the loans were acquired from an originator called Commercial Loan Inc. The two real estate developments, which once held promise while property values boomed here, have become ghost towns as investors in the properties have walked away from the loans by the thousands, according to one local observer. "There’s huge numbers of houses just vacant," said the observer. The Michigan credit union, which made thousands of loans for the properties amounting to more than $200 million, was taken over by NCUA in February because of the weight of the losses. Norlarco was also taken over by NCUA in May.

Mortgage delinquencies at credit unions crept up in the first half, holding down net income for the second quarter, the National Credit Union Administration reported Wednesday.

HONOLULU – Hawaii State FCU was the second largest corporate donor to the American Cancer Society’s annual Relay for Life, raising more than $50,000 for the charity. The funds were raised throughout the year at the credit union’s six facilities. The 88 corporate teams raised a total of $230,000 in this year’s event.

TURKEY – Authorities hope the recent arrest of a Ukrainian man here with information from millions of accounts stolen from TJX will help them crack the biggest data breach in U.S. history. The U.S. Postal Inspection Service said Maksym Yastremskiy was arrested several weeks ago for selling stolen credit card numbers on Internet chat rooms. A significant number of the accounts turned out to be from TJX, which said last year hackers stole information from as many as 45.6 million accounts. The breach caused credit unions and banks all over the country to cancel and reissue millions of credit cards from people who had shopped at one of the retail giant’s TJ Maxx, Marshall’s, Home Sense, Homegoods and AJ Wright’s stores. Yastremskiy allegedly sold card numbers through online forums hosted overseas, sometimes in Cyrillic or that were password protected. He is likely the largest seller of stolen TJX numbers. Earlier this year, 10 individuals in Florida were charged with using TJX data, some of it purchased from Yastremskiy, to steal $8 million in transactions at Wal-Mart and other stores.

MOLINE, Iowa – IH Mississippi Valley CU has installed its own no-envelope ATMs, the first in the Quad Cities area. The image-enabled NCR PS90es will allow members and non-members to make deposits of cash or checks without using an envelope. The credit union unveiled the first machine this month and plans to install a second one later this month at its Davenport branch.

WASHINGTON – CUNA derided NCUA’s recent proactive regulatory agenda yesterday and urged the NCUA Board to reject a proposal to set up the regulator as the enforcer of federal credit union bylaw disputes. In a letter citing recent attempts by NCUA to increase credit union transparency, CUNA said NCUA’s proposal to reestablish the bylaws as regulatory in nature–with NCUA as the arbiter–is “too undefined and inconclusive." CUNA said it supports NCUA intervention in certain instances, such as when members seek to block conversion to a mutual savings bank, but does not want NCUA to adopt broad authority to mediate all bylaw disputes. CUNA, which also opposes NCUA initiatives to increase member access to books and records and information about management compensation, wondered whether these efforts to expand credit union transparency are an indication of a “more proactive regulatory posture.” NAFCU also urged NCUA to reject the bylaws proposal, saying NCUA monitoring of bylaw disputes "can create a slippery slope to overly burdensome and ineffective regulatory oversight." In its comment letter signed by chief lobbyist Dan Berger, NAFCU said it believes in the notion of members’ rights but does not believe those rights should be federally regulated.

FERNDALE, Mich. – Credit Union ONE said yesterday it has signed with TRC Interactive to provide it with online training for its staff through CreditUnionTrainingOnline. Credit Union ONE will have full use of Training Central, the training program’s Learning Management system. Credit Union ONE is a $780 million CU with 117,000 members and 21 offices in the Detroit and Grand Rapids areas.

SAN DIMAS, Calif. – Members of two regional corporates, Tennessee’s Volunteer Corporate CU and Colorado’s SunCorp Corporate FCU, approved the combination of the two corporates into WesCorp FCU, continuing the consolidation of the corporate network. The combination will add about $4 billion to WesCorp’s $32 billion in assets, and as many as 900 new credit union members to the corporate giant’s 1,200 members. The combination is scheduled to be completed by year-end. Member approval of the two deals comes on the heels of Members United Corporate FCU’s acquisition of the Central CU Fund, the nation’s oldest corporate, and in front of the merger of Southwest Corporate FCU with Northwest Corporate FCU.

TUSCALOOSA, Ala. – While credit unions around the country are making advertising points with subtle digs against their banking rivals, there’s nothing subtle about the Alabama CU campaign to get consumers to dump their banks. The multi-media ads play off the troubles consumers may have with their banks, with separate spots reading: ‘Lose my account number,’ or ‘You can keep the toaster,’ and underneath both the web address: DumpYourBank.com, where consumers can learn more about credit unions. The ads also introduce a new character to the bank-credit union wars: a Dr. H. Gruber, a financial relationship therapist who helps consumers cope with breaking up with their bank. One ad shows the good doctor as the ‘Grubinator,’ a half-man, half-cyborg who is hellbent on financial wellness. The ad features 11 steps to financial wellness (reasons why credit unions are better than banks), an e-mail intervention to help friends get out of unhealthy relationships with their banks and a game where users catch falling bankers in a dumpster. The TV, print, outdoor and online ads were designed by Sullivan-St. Clair, out of Mobile, Ala.

NEW YORK – Millions of commuters to Manhattan and upstate will be greeted by a new credit union pitch this fall, to coincide with International Credit Union Week. As part of a three-week ad campaign run, TV and radio spots will be airing in Albany, Buffalo, Syracuse and Long Island, and billboards will be placed in communities surrounding New York City to tout the credit union difference, "Open to You, True to You." The ads, coordinated by the New York CU League, were designed by Oklahoma-based Third Degree Advertising, which has created media campaigns for Tinker FCU, Mission FCU, Allegiance FCU and Delta Community CU, as well as the Oklahoma CU League. Bonnie Sklar, spokesperson for the New York League, said the focus of the campaign is to educate consumers about credit unions and eligibility to join. The visual cornerstone of the campaign is a blue marker, with which consumers will be challenged to ‘make their mark’ to control their finances. The League is passing out tens of thousands of blue markers with the website, CreditUnionsFORYOU.com, where consumers can find a CU near them. The league also will be making supplementary materials available to credit unions, including four-color posters, web banners and buttons, branded markers, and the use of radio spots, two in English and one in Spanish. “This is the first time we have done ads targeting consumers and the general public," said Sklar, noting a recent ad campaign targeted state lawmakers.

CALABASAS, Calif. – Shares in ailing home lender Countrywide Financial Corp. surged more than 20% in after-hours trading last night after Bank of America announced a $2 billion equity investment in the firm. Under terms of the deal, BofA, which had discussed a possible acquisition of Countrywide in the past, acquired $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25% annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions. Countrywide shares, which had been battered the past two weeks, jumped more than 20% to $26.25 in after-hours trading. Before Countrywide's announcement, the shares had closed the regular session up three cents to $21.82.