ALBUQUERQUE, N.M. – Members of New Mexico Educators FCU donated $40,000 to the CNM Foundation of Central New Mexico College through the credit union’s Community Rewards Program. Half of the donation will go to the Rust Opportunity Scholarship at CNM, which provides emergency aid to students. The rest will be used to support the college. The Community Rewards Program allows credit union members to direct annual community donations among educational, health care, environment/wildlife, arts or community support services.

JACKSON, Mich. – American 1 FCU pledged more than $60,000 Friday to sponsor Jackson County’s annual Rose Parade, whose future had been in doubt. The credit union pledge comes after the Rose Festival’s budget was depleted after June’s parade and the board we left with $3,000 in bills. The credit union has also pledged help with community fundraising and volunteers. The Rose Parade, which includes a picnic and fireworks display, began in 1958 and allows schools, scout troups, churches, civic organizations and businesses to promote themselves.

MENASHA, Wis. – A member of Prospera CU was charged with extortion last week after he left a note at the credit union threatening to explode a bomb if the credit union didn’t pay him $3 million. According to police, the suspect was deeply troubled after losing his job a few days earlier and his wife is terminally ill. Officers used surveillance camera footage to identify the suspect, then surrounded his home and talked him into surrendering. Police say no explosives were detected.

HAMPTON ROADS, Va. – Navy FCU opened its newest branch here last week, as the world’s largest credit union sailed towards plans for 31 new outlets this year, the most ambitious credit union expansion ever. The Hampton Roads branch was the 10th to open so far this year for the $30 billion credit union, which operates 125 branches around the world. The Salem Road office is Navy Federal’s 12th branch in Hampton Roads and offers a full range of products and services including a full service ATM and drive thru with Sunday hours. On one day last month, Navy Fed opened four new branches in the Atlanta area.

ALBUQUERQUE, N.M. – Members of New Mexico Educators FCU donated $40,000 to the CNM Foundation of Central New Mexico College through the credit union’s Community Rewards Program. Half of the donation will go to the Rust Opportunity Scholarship at CNM, which provides emergency aid to students. The remainder will be used to support the college. The Community Rewards Program allows credit union members to direct annual community donations among educational, health care, environment/wildlife, arts or community support services.

MECHANICSBURG, Pa. – Members 1st FCU said it has contracted with Techman Solutions Co. to implement the company’s Contraxx enterprise management solution. Contraxx is a contract management solution that monitors the contract lifecycle, including initial request and contract creation, obligations management, and compliance enforcement. Techman Solutions is based in Pittsburgh.

HAMPTON ROADS, Va. – Navy FCU opened its newest branch here last week, as the world’s largest credit union sailed toward plans for 31 new outlets this year, the most ambitious credit union expansion ever. The Hampton Roads branch was the 10th to open so far this year for the $30 billion CU, which operates 125 branches around the world. The Salem Road office is Navy Federal’s 12th branch in Hampton Roads and offers a full range of products and services, including a full service ATM and drive-thru with Sunday hours. On one day last month, Navy Fed opened four new branches in the Atlanta area.

JACKSON, Mich. – American 1 FCU pledged more than $60,000 Friday to sponsor Jackson County’s annual Rose Parade, whose future had been in doubt. The credit union pledge comes after the Rose Festival’s budget was depleted by June’s parade and the board was left with $3,000 in bills. The credit union also has pledged to help with community fundraising and volunteers. The Rose Parade, which includes a picnic and fireworks display, began in 1958 and allows schools, scout troops, churches, civic organizations and businesses to promote themselves.

WASHINGTON – CUNA reported its top management personnel received average raises of 5% last year, moving CUNA President Dan Mica to the cusp of a $1 million salary. CUNA paid Mica $901,000 in 2006, up from $858,000 the year before, and retirement benefits of $71,000–for a total of $972,000. That’s three times the compensation NAFCU paid its CEO, Fred Becker, who earned $355,000 in 2006, including a $309,000 salary and $46,000 in retirement benefits.

RESTON, Va. – Shares in Sallie Mae continued to trade around $48 Friday, a 20% discount from the $60-a-share offered by a group of hedge funds and banks, as arbitragers speculate that pending government cuts in student loan subsidies will kill the $25 billion deal. At stake is a $230 million payout for Sallie Mae’s Chairman Alfred Lord, the man who built the student loan giant from a sleepy government sponsored enterprise. Lord realized a profit of $34 million August 9 with the exercise of 1.7 million options due to expire August 13, followed by the sale of 1.2 million of the shares on the open market. Two of the nation’s largest banks, JP Morgan Chase and Bank of America, along with hedge funds J.C. Flowers & Co. and Friedman Fleischer & Lowe, are reported to be hesitant completing the deal in light of the subsidy cuts–even after Sallie Mae shareholders voted last Monday to approve the takeover.

JACKSONVILLE, Fla. – William Foley, the man who created Fidelity National Information Services, earned $30 million last week when he cashed in 1.5 million FIS options, then sold them back to the company the following day. Foley said he will use the funds, along with $22 million earned from a sale of shares back to Fidelity National Financial, to make an investment in the wine industry. Foley, one of the highest paid executives in the country, created Fidelity National Information by acquiring a half dozen credit union and bank outsourcers, then merging them with Certegy Card Services, before spinning the operations off into a separately traded company last year. Foley earned more than $200 million from his role in the spin-off and the sale of options last year.

DUBUQUE, Iowa – Increasing risk in electronic commerce, especially online fraud, forced DuTrac Community CU to abandon its profitable merchant processing operation. DuTrac had been the only credit union in the nation to break into the market. "We just couldn’t afford the risk," Allan Schuester, vice president of the $300 million credit union, told The Credit Union Journal last week. The merchant acquiring business, dominated by banks, amounts to an institution with access to the payments systems clearing transactions for merchants. Schuester, who was working to control potential damage from the latest credit card breach, said the CU became convinced the legal liability of merchant acquirers was not worth the reward–about $1 million a year in profit. DuTrac Community operated the merchant acquiring business through an Independent Service Organization known as iMax Bancard for three years before deciding to exit. As many as two dozen area credit unions and banks last week were working to contain the damage of the growing credit card fraud problem, apparently caused by a breach at a local merchant. But MasterCard, which has notified institutions of the breach, has refused to disclose the source. An official with Premier bank in Dubuque said it also has recorded fraudulent activity on its member accounts and has begun cancelling cards. Robert Hoefer, president of Dupaco Community CU, said last week his credit union found fraudulent activity on at least 75 accounts and is working to contain the fraud by reissuing cards. As many as 100,000 cards in the Dubuque area may have been compromised, according to authorities.

SAN FRANCISCO – In news that could challenge the renascent market for private deposit insurance, Patelco CU, the largest privately insured credit union, reported it lost more than $8 million last year after writing off $41 million from its failed subprime auto lending program. The loss, disclosed recently in the $4 billion credit union’s annual report, comes as numerous credit unions are detailing millions of dollars in losses in their own subprime auto programs. But most of those were related to failed subprime lender Centrix Financial–Patelco’s was not. Patelco, which converted to private insurance in 2002, began its subprime program in 2004. However, losses accrued, forcing it to sell most of the portfolio, $195 million worth, to subprime lender ACC Consumer Finance, which it partially owned. Despite the losses, Patelco CU President Andrew Hunter reassured members as to the credit union giant’s solvency. "We know this is not a financial performance you expect from your credit union," said Hunter, of the $8.3 million loss for 2006. "We hope you are also aware that Patelco is still extremely well capitalized, with total capital exceeding $400 million." The Patelco disclosures come as private insurance, which all but dried up following the 1990 crisis in Rhode Island, is making a comeback, with regulators in Texas and Washington state preparing to once again allow state chartered credit unions to privately insure.

FORT LAUDERDALE, Fla.–Everything from UBIT and Reg Z modifications to balance-sheet issues and secondary capital were on tap at the NASCUS State System Summit here. In-depth coverage will be in upcoming print editions, but here’s a quick sampling of news coming out of that meeting.* Just days before the fifth of NCUA’s six Outreach Taskforce Town Hall Meetings, NCUA Board Member Gigi Hyland said one of the themes that has emerged at these events is concern about making sure what happens on a policy level at the NCUA Board trickles down to examinations in the field.* Dr. Jim Likens, dean of Western CUNA Management school and professor at Pomona College emphasized that credit unions must beef up their marketing efforts in order to continue growing. In a nod to ongoing coverage at Credit Union Journal on how small credit unions can not only survive but thrive, Likens discussed some of the disadvantages smaller credit unions face but insisted that they are not “doomed.”* Filene Research Institute’s Bob Hoel was joined by Dr. William Jackson, professor of finance and management at University of Alabama, and Larry Fazio, deputy director of NCUA’s Office of Examination and Insurance, talked about an issue near and dear to credit unions’ hearts: secondary capital. Fazio suggested the agency is open to alternative forms of capital but its authority on this issue is limited.* CUNA Mutual Group’s Larry Blanchard said the UBIT Steering Committee he chairs is looking for the perfect plaintiff for litigation related to the IRS’ interpretation of what products and services come under the Unrelated Business Income Tax at state-chartered credit unions.All this and more will be featured in upcoming editions of Credit Union Journal.

BALTIMORE–For scammers, their line of work is a full-time job. For credit unions, protecting against the damage such scammers can cause also needs to be, according to one analyst.Chetta Hebron-Byrd, risk manager for CUNA Mutual Group, told the African American Credit Union Coalition Annual Conference here that protecting the credit union and its members from fraud requires familiarity with current scams, use of fraud prevention tools and ongoing training for employees.“This is a full-time job for them. They don’t care if you’re young or old, rich or poor,” said Hebron-Byrd. “They’re out to defraud you and your members.”Among Hebron-Byrd’s advice for minimizing fraud losses:* Closely inspect the individual’s identification or driver’s license, including issue and expiration dates.* Compare the signature on the new-account application with that on the driver’s license.* Do not accept employment identification alone; ask for a second form of ID.* Review the full credit report for loan applications and compare the address and personal information the member provides to ensure it matches information on the credit report. Mismatched addresses may be a sign of identity manipulation that must be resolved before the account is opened.* Minimize credit card account takeover by establishing prudent address change procedures and flag members’ accounts to warn them an address change has been made on their account.Hebron-Byrd reminded urged CUs to ensure their own staffs were doing all they can to prevent members from being victimized by alerting them to the most common fraud schemes. One such scam cited by Hebron-Byrd is the “Overpayment Scam” in which a member selling merchandise is contacted by a fraudster posing as a legitimate buyer. The perpetrator sends a counterfeit cashier’s check for an amount substantially more than the purchase price. The member notifies the buyer of the mistake and is instructed to return the excess funds by wire transfer.“The member doesn’t realize the cashier’s check is worthless until after their money has been wired out,” Hebron-Byrd said. “Tellers should ask members if the cashier’s check was from an Internet sale and, if so, whether the buyer overpaid for the item and asked for the excess amount to be wired back.”She also described the “Bogus Lottery,” which occurs when victims are informed by mail or phone they have won a foreign lottery. Before they can collect, they are told they must pay lottery taxes and a fee. “This whole scheme doesn’t make sense. Why would you have to pay money to receive money? Yet, the greed factor plays a part in people continuing to fall for these schemes.”Hebron-Byrd recommended foreign checks be accepted for collection only by sending them “without entry” to the Federal Reserve or the financial institution where the funds are to be drawn upon.Yet another tactic used by fraudsters is the “U.S. Postal Service Money Order Scam” where the victim is contacted with a request to assist in negotiating U.S. Postal Service money orders in return for a percentage of the value of the money orders or a flat fee. The member is instructed to deposit the money orders, which are counterfeit, and to wire the balance of the funds.“It’s a big red flag any time multiple money orders are presented. Tellers should be trained to spot this scam and to verify their authenticity by contacting the Postal Service,” she said.

Bush Rejects Liquidity Bid for Mortgage MarketWASHINGTON–President Bush rejected a request by Fannie Mae to prop up the imploding mortgage market by increasing the amount of mortgages the secondary market giant is allowed to buy.The president said the administration will not increase mortgage limits on Fannie and its sister secondary market company Freddie Mac until impending reforms are enacted by Congress. First things first when it comes to those institutions, said the President. Congress needs to get them reformed; get them streamlined. Get them focused, and then I will consider other options.But reform of the secondary market, in the way of legislation to set new oversight of Fannie, Freddie and the 12 Federal Home Loan Banks, is not expected to come any time soon, and may even be dead because of the ongoing crisis in the market the so-called government sponsored enterprises were chartered to facilitate.Bush was responding to a request by Fannie Mae CEO Daniel Mudd to regulators with the Office of Federal Housing Enterprise Oversight to increase the limits on mortgages bought by the two companies–currently at $1.4 trillion–in order to pump liquidity to the stumbling mortgage market. Mudd’s request was joined by Democratic leaders, including senators Christopher Dodd and Charles Schumer and members of the House Financial Services Committee, all of whom have been involved in the efforts to reform the GSEs and the secondary market.The proposal was greeted with enthusiasm by the OFHEO and the Department of Housing and Urban Development, but officials in the two agencies abruptly reversed course after the President made his position public.Opportunities Seen in Imploding Mortgage MarketsBALTIMORE–Credit union representatives were confident that the ongoing crisis in the subprime mortgage market will spare them and some even see it as an opportunity.Marhuerite Lauderdale, vice president of mortgage lending at Washington State Employees CU, said while attending the African American CU Coalition’s annual conference. The opportunity is for credit unions to offer relief from some of the exploding ARMs borrowed elsewhere. “We’re trying to get people to refinance out of those funky ARMs,” said Lauderdale. The credit union has several products that may help those distressed borrowers, such as flat-fee mortgages or those with no private mortgage insurance requirements, she said.Bert Hash, president of Maryland Employees CU, said his credit union has been able to keep a steady beat despite the ongoing crisis in the mortgage market. “We’re refinancing some of the people who have been in subprime loans. It’s keeping our volume of (mortgage) loans pretty much as it has been all along,” said Hash. Most of those distressed borrowers are refinancing into long-term fixed-rate products.Credit Unions Approach Goal for Martin Luther King Memorial DonationsBALTIMORE–The credit union community is approaching $1 million in pledges to support the new memorial to Martin Luther King Jr., with more than $900,000 promised to help build the statute on the National Mall in Washington.“Our goal is $2 million and we expect to reach that next year,” said Hubert Hoosman Jr., president of Vantage CU in St. Louis, and treasurer of the African-American CU Coalition. The credit union gift will earn the movement a citation on the wall of the planned memorial, the first to recognize donors.More than 65 credit unions, as well as CUNA, NAFCU, CUNA Mutual Group, leagues and other vendors have pledged contributions to the new memorial.The King Memorial will be located on the National Mall on the Tidal Basin, adjacent to the FDR Memorial, and in a direct line between the Lincoln and Jefferson memorials. The site is also near the location of King's famous "I Have a Dream" speech, which took place more than 40 years ago. The memorial's design will honor King's life and work. Quotations from King's writing, sermons and speeches will be engraved on to the Memorial Wall. President Clinton signed a Joint Congressional Resolution in 1998 to create a four-acre memorial that will be the first on the National Mall to honor a person of color. The total cost of the memorial will be $100 million, and is expected to be completed by winter 2008.

WEST PALM BEACH, Fla.–The largest directory of its type will hit credit union leaders' desks this week.The Credit Union Journal's 2008 Factbook and Buyer's Guide is a comprehensive overview of everything related to America's growing credit union community, including listing the names, addresses, phone numbers and web addresses of more than 8,500 credit unions. In addition, the directory includes listings for trade associations, professional groups, corporate credit unions, national and state regulators, and much more. A calendar of events for all of the major meetings of 2008 is also available in this special issue, which is provided free as part of the subscription to the Credit Union Journal.The Factbook & Buyer's Guide also includes hundreds of listings of suppliers to credit unions categorized according to the products and services they offer, along with full contact information. The Journal's weekly news issue will resume publishing on Aug. 27.

McLEAN, Va. – Long-term mortgage rates moved slightly higher this week, after declining for three weeks in a row, even as mayhem continued in the market. The average for 30-year, fixed-rate loans rose to 6.62% this week, from 6.59% last week; while the average for 15-year, fixed-rate mortgages moved to 6.30%, from 6.25%, according to Freddie Mac. "Interest rates on prime conforming fixed-rate mortgages ticked up a little in the past week, in line with 10-year Treasury rates movements and retracing part of last week's decline," said Frank Nothaft, Freddie Mac's chief economist. "Problems in the non-prime mortgage market where funds are expensive and hard-to-get have not affected the prime conforming market." ARM rates also moved slightly higher, with the average for the five-year ARM rising to 6.35%, from 6.33%; and the average for the one-year ARM going to 5.67%, from 5.65%.

ALEXANDRIA, Va. – There has been little effort so far to fill the vacancy opened up on the NCUA Board with the Aug. 2 expiration of JoAnne Johnson’s six-year term, as Washington politics is widely expected to delay appointment until the next President takes office. That’s because the Democratic-controlled Senate is expected to confirm few Presidential appointments this close to an election year, when they hope a Democrat will win the White House. That would also tip the political scales on the three-member NCUA Board, where two members, including Johnson, are Republican appointees. Like her predecessor, Dennis Dollar, Johnson is expected to serve as a holdover until a successor is confirmed by the Senate. "The Chairman will continue to do the job until she’s told otherwise," said John McKechnie, chief spokesman for the agency. Dollar, who was appointed NCUA Chairman by President Bush, served more than a year as a holdover after his term expired before leaving for private industry.

WASHINGTON – In one of the final acts of the Senate last month, lobbyists for the nation’s biggest banks convinced members of the Judiciary Committee to pass a patent reform bill with a provision protecting them from litigation over Check 21 technology, a battle that has already cost them millions in license fees. The process to electronically process and exchange checks and other financial instruments currently is dominated by a handful of big banks, which not only control MasterCard and Visa, but the fledgling electronic exchanges. The patent provision, championed by the Financial Services Roundtable, the lobby for the big banks and the two card networks, would protect the banks from patent infringement suits involving electronic check clearing technologies. A lobbyist familiar with the bid said the provision is aimed at a tiny Texas company called DataTreasury, which holds several patents on the technology and has won millions in license fees by suing the banks and other providers. The company has filed suit against JP Morgan Chase, Zions Bank, as well as several other players in the Check 21 market, including NCR, Diebold and RDM Corp.