FORT COLLINS, Colo. – NCUA confirmed yesterday it had taken over troubled Norlarco CU in the face of mounting losses on its mortgage loans. The state’s eighth-largest credit union has seen a major increase in real estate delinquencies and in related losses in the second quarter. Mortgage delinquencies, most of them second mortgages and construction loans, rose from $6 million in March to $56 million in June, while net losses rose from $3 million in the first quarter to $5 million. The credit union reported $2.7 million in net income for 2006. NCUA confirmed it took over the $400 million credit union in May.

ALEXANDRIA, Va. – Mortgage failures for credit unions crept up at mid-year, holding down net income for the second quarter, NCUA reported yesterday. Real estate loans delinquent more than 60 days grew from 0.34% at year-end to 0.44% at mid-year, and foreclosed real estate loans rose to $213 million, NCUA said. Still, both the total charge-off ratio for credit unions, a mere 0.45%, and delinquency ratio, just 0.69%, remained near historic lows. The rising cost of funds, however, continued to push profitability down in the second quarter, with a return-on-assets of just 0.76%. That’s slightly higher than the first quarter, 0.73%, but down from 0.82% for 2006. Loans grew by 2.2% in the second quarter, up from just 0.2% for the first quarter; while savings growth was flat, less than 1%, down from 4% growth in the first quarter. The number of federally insured credit unions stood at 8,238 as of June 30, down from 8,305 on March 31.

SHERMAN, Texas — Employees at Texoma Educators CU got some help with their wardrobe, a $20,000 grant from retailer Lands' End to provide them with branded apparel.

WALL STREET – The crisis in the mortgage industry has been slow to take hold among credit unions, but credit unions around the country, especially those with relationships with the troubled lenders, are weighing the impact of the current mortgage meltdown. Countrywide, which announced lay-offs this week, has correspondent relationships with hundreds of credit unions. American Home Mortgage, which shut down two weeks ago, had loan offices in more than 50 credit unions after telling its credit union and bank customers it could no longer fund mortgages it had committed to. But observers were confident the contagion of the subprime fallout will be limited. Southwest Corporate FCU was circulating a memo this week asserting that since many credit unions retain their mortgages, they have not sustained major losses in the subprime market. “In fact, most are in a stronger position to increase their mortgage loan activities,” said the memo by Brian Turner, manager of Southwest Advisory Services. Strict requirements barring investments in subprime mortgage backed-securities is also expected to limit the downturn in the investment market. Ray Amarino, head of the bond desk at credit union bond house First Empire Securities, noted that the major affects in the mortgage backed market has been on subordinated tranches or non-Triple A-rated pieces of the mortgage bonds. “Triple A pieces have not been downgraded, and credit unions don’t get involved in subordinated bonds,” said Amarino, who stressed the vast majority of credit union bonds are agency-issued, and therefore, insured. “We have not sold any subprime paper to credit unions, or banks, for that matter. We just don’t traffic in that kind of paper.”

NEW YORK – Mortgage lenders were laying off employees by the thousands this week as the meltdown in the subprime market continued to spread. More than 11,000 job cuts have been announced since last Friday, according to one consulting firm. Capital One Corp. said it will close its GreenPoint Mortgage unit and terminate its 1,900 workers; SunTrust Bank announced 2,400 lay-offs, most of them in mortgage lending. Troubled Countrywide Corp., the nation’s largest lender, said it will trim almost 600 jobs. Bear Stearns, which was forced to close two hedge funds because of subprime mortgage losses, said it will cut 240 positions. Meantime, officials with Countrywide were reassuring depositors in its savings and loan unit yesterday that the parent company will be able to withstand the liquidity crunch that forced it to tap an $11.5 billion short-term line of credit. Depositors were lining up to withdraw funds from Countrywide Bank, the federally insured S&L, which has $107 billion in assets at 105 bank branches across the country. Shares in the beleaguered mortgage giant closed up 10% yesterday to $21.79, after losing more than 50% of their value over the past three months.

PALO ALTO, Calif. – Stanford FCU is offering $500 advances to members who are being affected by ongoing computer glitches at Wells Fargo that have delayed payroll processing for employees at the credit union’s primary sponsor, Stanford University. Those computer problems have extended into inability to access online bank accounts or get cash at some ATMs. Credit union members have gotten used to having their paychecks a day in advance, said Tina McMinn, vice president-operations with Stanford FCU. "It was not their fault or the fault of the University that payroll wasn't processed on time, so we're giving them immediate access to $500 today. Credit union personnel will verify that funds are pending prior to issuing the money," she told The Credit Union Journal.

WICHITA, Kan. – Mark Kasson, the former president of Credit Union Group, was sentenced to three months in prison Tuesday after pleading guilty to making a false report to NCUA. Kasson was charged with falsifying the credit union’s records to make it appear as though $3 million in loans had been sold to other credit unions. Prosecutors alleged Kasson falsified the reports in an attempt to improve the credit union’s financial image to examiners from the Kansas Department of CUs and NCUA. The state regulator placed the credit union into conservatorship in March 2006, partly due to the accusations against Kasson. The conservatorship was lifted earlier this year.

MONNETT, Mo. – Jack Henry & Associates, one of the few remaining independent credit union outsourcers, said yesterday earnings for its fiscal fourth quarter climbed almost 15%, to $29.1 million, or 32 cents a share. Fourth quarter revenues rose 12% to $181.3 million. For the year, Jack Henry reported a 16% rise in earnings to $104.7 million, or $1.14 a share, and a 13% increase in revenues, to $668.1 million.

COLUMBUS, Ohio – Corporate One FCU said it has signed with LogicManager to implement the company’s LogicERM enterprise risk management system. LogicManager allows institutions to provide their clients a system to mitigate risks they cannot transfer, which may include non-compliance of financial reporting, business continuity, readiness for rating agency risk management reviews and IT security. LogicManager is based in Boston.

RIVERWOODS, Ill. – Discover Financial Services, the electronic funds network spun off from Morgan Stanley two months ago, is recommending stockholders against participating in a ‘mini-tender offer’ launched for its shares, warning the offering price is too low. TRC Capital has offered $22 a share, below Tuesday’s $23.10 price, and well below the $28 the shares went public at on June 14. Mini-tender offers allow speculators such as TRC to underbid, a type of short-selling, for a company’s shares, without having to make proper disclosures to the public. Discover Financial is the parent of PULSE EFT, the cards network for 4,100 credit unions and banks.

PADUCAH, Ky. – IBEW Local 816 FCU said yesterday it has implemented Edcomm’s Banker’s Academy online learning program for BSA/AML compliance training, along with the company’s own Learning Link learning management system. Edcomm’s Focus on Compliance for Credit Unions is a computer-based, distance learning program which can be delivered over the Internet, Intranet or CD-ROM. Edcomm is based in New York.

BARTLESVILLE, Okla. – 66 FCU announced yesterday it has signed a three-year contract with AT&T to provide it with telecommunications network services. AT&T will serve as the primary network and data services provider and will integrate the company’s Multiprotocol Label Switching-based Virtual Private Network. 66 FCU said AT&T’s VPN will give it the infrastructure and enhanced bandwidth to meet its growing demand for voice and data applications, network redundancy and business continuity.

FOND du LAC, Wis. – Marine CU has made $1 million of no-interest loans available for victims of the recent flooding who need help with clean-up, supplies, temporary housing or day-to-day needs. Funds will be distributed on a first come basis and limited to $5,000 per borrower. No payments will be required for the first four months.

CUPERTINO, Calif. – TuVox, the provider of on-demand speech applications, announced yesterday it has been granted a patent on an interface between its voice recognition technology and existing database systems. The company says the system automatically takes information from existing sources, including data bases, and makes it accessible via a voice user interface. TuVox also said it has signed Boeing Employees CU as a new customer and has completed the implementation of a telephone banking application featuring natural language routing and Spanish support for American Airlines FCU.

SAN JOSE, Calif. – Valley CU now allows members to use their cell phones and mobile devices to conduct transactions. The credit union’s ‘Valley Mobile’ service allows members to download a program to their device and view all accounts simultaneously, transfer funds between accounts, track assets through graphic reports, and receive alerts and important updates through a secure e-mail feature. Online bill pay will be available in the second phase of the rollout. To use Valley Mobile, members will need three things: a data service plan from their carrier, the ability to download a software application, and a compatible device, which includes cell phones with Windows Mobile, a Palm with Java virtual machine, or a Blackberry. "Our goal is to increase members' ability to bank around their own schedule," said Ryan Barringer, AVP-marketing.

BEAVERTON, Ore. – More than 300 members of First Tech CU have been called by automated messages seeking to steal their account information. No one has been hit by the potential fraud, but 25 members have given out confidential information that could be used to access their accounts, police said. The credit union has taken steps to block those accounts. The message tells members their account has expired and provides a toll-free number to resolve the problem. This type of fraud is known as vishing because it is similar to an online phishing scam but uses virtual phone calls.

SAN FRANCISCO – Patelco CU said yesterday it has erased the red ink that plagued it in 2006 and earned net income of $11.9 million for the first seven months of 2007. The privately insured credit union giant, in response to an article in yesterday’s Credit Union Journal Daily Briefing about its troubled subprime auto loans, said it holds no subprime consumer or mortgage loans. The $4 billion credit union, which reported an $8.3 million loss for fiscal 2006, said its net worth remains strong with $419 million in capital. Patelco, the nation’s largest privately insured credit union, sold its subprime auto loan portfolio after realizing some $40 million in losses. "Given today’s credit market, that move has proven to have been fortuitous, ahead of the economy," said Patelco President Andrew Hunter, in an email message. The subprime auto loan losses, similar to those being accrued by other credit unions, were notable because they were unrelated to subprime lender Centrix Financial, which have plagued dozens of other credit unions. Patelco sold its subprime auto loan portfolio to CompuCredit Corp., a subprime lender which had acquired ACC Consumer Finance, which was partially owned by Patelco.

CHANTILLY, Va. – Online Resources Corp. announced yesterday it has signed to incorporate Fair Isaac & Co.’s ScoreNet network into its web-based collections system. Fair Isaac says ScoreNet is a communications platform in collections and recovery services and provides secure and managed access between 1,300 creditors and third-party business partners. Online Resources’ system includes the company’s Virtual Collection Agent, which integrates with the company’s CollectPay online payment service.

ST. PETERSBURG, Fla. – PSCU Financial Services said yesterday it has contracted with AT&T’s Sterling Commerce unit to offer its Gentran Integration business-to-business platform to credit unions. The Gentran platform gives PSCU the ability to automatically handle a variety of multiple management credit and bill payment services in a variety of file formats and protocols on one centralized platform. The company said Gentran allows companies to extend processes to their customers, partners and suppliers while maximizing existing and future IT systems and technologies.

SAN ANTONIO – Air Force FCU said yesterday it has contracted to convert its 30,000-plus credit, signature debit and PIN debit accounts to PSCU Financial Services. The credit union, which has $273 million in assets and more than 40,000 members, also joined the cooperative as a member-owner. The credit union will convert its users to PSCU Financial Services CreditAbility and DebitAdvantage programs in early 2008.