WASHINGTON – Lurking in the shadows of this week’s suit challenging NCUA’s new rules on conversions to banks is an adversary the agency has encountered before, but always behind-the scenes; long-time S&L lobbyist Jim Butera. Butera’s Washington firm has represented a Who’s Who of banking interests over the years, most recently the Federal Home Loan Banks of Chicago, Boston and Topeka, the troubled subprime mortgage lender Option One, and now the American Bankers Association. Butera, whose firm is representing the Coalition for CU Charter Options in its suit, also helped draft the unsuccessful bill to reign in NCUA’s authority over conversions to banks. He also represented several credit union-converts before Congress, including Community CU and DFCU Financial. A few years ago, Butera even sued NCUA for another purpose, to recoup severance pay due Karl Hoyle, after Hoyle was fired as executive director. Reached at his office, Butera refused to name any of the credit unions the Coalition claims are participants in the suit, but insisted neither America’s Community Bankers, the S&L trade group prominent in the effort to ease conversions to thrifts, or the ABA are party to the action. Lee Bettis, the former president of credit union-convert AGE FCU who is the spokesman for the Coalition, also refused to disclose the names of any credit unions or contributors to the group. The group’s constituency and whether it has legal standing to challenge the credit union rules is expected to be part of NCUA’s defense.

TAMPA, Fla. – The former senior advisor at Chamberlain High School was sentenced yesterday to 18 months probation for stealing money from her students’ prom fund and depositing it into her account at Suncoast Schools FCU. The 32-year-old Foster-Lawrentz, also a teacher at the school, was arrested after the credit union saw 21 checks going into her personal account. The money was raised by her students by washing cars, picking up trash and serving refreshments during the school’s sporting events. With the help of the credit union, which made good on the stolen funds, the senior prom went on anyway. Foster-Lawrentz was also ordered to pay restitution, for which she will have to sell her home.

NEWPORT NEWS, Va. – PSCU Financial Services said yesterday it has signed with two new credit union, including $1.2 billion Langley FCU, to convert their bill payment users to the CUSO’s PayLynx platform. PayLynx is an industry-leading online bill payment platform that offers same day and next day payments in addition to bill reminders and other user-friendly features. Langley also contracted for PSCU’s credit and signature debit processing. The other credit union addition is $38 million Nordstrom FCU.

TUKWILA, Wash. – Boeing Employees CU said yesterday it has gone live with UltiPro, a human resources management system provided by Ultimate Software. The system gives employees round-the-clock Internet access to their own human resources and payroll details, anywhere from a personal computer. The credit union giant projects the system will help it save as much as $250,000 in HR management costs over the next three years.

WASHINGTON – AFL-CIO Employees FCU said yesterday it has signed with Identity Theft 911 to provides it members with free identity theft prevention and resolution services. The service, which has enlisted a growing number of credit unions, provides a personal advocate to guide victims through the timely process of resolving cases of identity theft. AFL-CIO Employees FCU is an $85 million credit union serving 11,000 members.

DENVER – Colorado State Employees CU, one of the biggest auto lenders in the state, said yesterday it has signed with Aimbridge Lending Solutions’ Automotive Avenues subsidiary to provide it with an all-inclusive new and used car buying service, as well as a service and parts facility and on-site financing and leasing. The $1.7 billion credit union, which has a vehicle loan portfolio of $336 million-almost half its total loans–continues to grow its auto lending, despite a downturn in the market. Aimbridge provides auto loan services to hundreds of credit unions in more than a dozen states.

SAN DIEGO – North Island CU broke ground yesterday on a six-story, 130,000 square-foot headquarters that will feature many environmentally friendly features. The project, which will carry an island-inspired theme, will recycle water for irrigation, recycled materials incorporated in the construction and a focus on energy efficient mechanical systems which the $1.5 billion credit union hopes will qualify the building for a LEED Green Building Rating. The ‘Island’ them will include a landscape consisting of palms and other tropical plants and a plaza in front depicting the breaking surf. The exterior will feature a sea-foam green concrete walkway that becomes polished as it extends into the building. The building will be decorated with Island-themed paint colors and paneling. Members will be greeted in a two-story lobby with a large wooden structure reminiscent of a palm frond umbrella. The project will also include a community conference center, health club, cafe/lunchroom with outdoor seating, library/reading room, relaxation room with Zen garden and informal meeting spaces on each floor for employees.

DETROIT – Michigan First CU said it raised member awareness and loan volume for its bi-annual car sale with a telemarketing campaign that sent voice mail messages to all members. The campaign, conducted by GroupCast, included alerting all members of the sale by phone message, then following up with all members who are preapproved for a loan. GroupCast has the capacity to deliver over 70,000 messages per hour, which can also be used to deliver important announcements and updates to members. Michigan First CU contacted as many as 20,000 members a few weeks before the sale, then contacted about 100 members who were preapproved for a loan.

WESTBURY, N.Y. – A Nassau Educators FCU clerk was arrested at his home Tuesday night and charged with siphoning $155,000 from member accounts by electronically transferring the funds into his own accounts. Jones Jean, 34, a senior accounting clerk at the credit union, was charged with grand larceny. Jean allegedly made a series of money transfers beginning in April 2004 and continued to do so until last Friday, when the theft was discovered during an audit by a senior financial analyst who reported it to authorities.

SALT LAKE CITY – The 100% for Kids CU Education Foundation said it awarded 28 grants for a total of $68,000 to local schools and teachers, making more than $4 million in school funding provided by the Utah credit unions fund. In the last school year, the foundation, a subsidiary of the Utah CU League, awarded almost 900 grants for a total of almost $875,000 in the last school year. The foundation was created five years ago with funds the state’s credit unions–who converted to federal charters–would have paid to the state as sales taxes.

WASHINGTON – A credit union executive testified before Congress yesterday against a proposal to reign in runaway fees charged by banks and credit unions for overdraft protection. Mary Cunningham, president of USA FCU, said an attempt to count the overdraft, or bounce fees in the Annual Percentage Rate could prevent many credit unions from offering the service. “Depending on how the fee is defined and included in APR calculations, it could easily exceed the credit union’ statutory 18% interest rate ceiling,” said Cunningahm, who was representing CUNA before the House Financial Institutions subcommittee. Cunningham was testifying just an hour after New York Rep. Carolyn Maloney, chairman of the subcommittee, joined the credit union-backed Center for Responsible Lending in releasing a study showing that banks and credit unions now earn more from overdraft protection fees then they lend out to cover overdrafts–a whopping $17.5 billion in 2006. Maloney has introduced a bill that would bring overdraft fees under the Federal Reserve’s Truth in Lending regulation and require disclosure of an APR for the amount of the fees. It would also make it easier for consumers to opt out of overdraft protection and more prominently disclose fees.

ALEXANDRIA, Va. – A group purporting to represent credit unions filed suit in federal court here yesterday challenging NCUA’s new rules on the conversion to mutual savings bank. The self-styled Coalition for CU Charter Options has fought NCUA efforts to regulate conversions for at least three years and is represented in its suit by long-time thrift lobbyist Jim Butera, and is headed by Lee Bettis, former CEO of AGE FCU, which he helped convert to a thrift. Butera also represents the American Bankers Association, and he helped craft the proposal to ease credit union conversions to thrifts, which failed in the last Congress. Despite claims to represent credit unions, the group has yet to divulge any names of its credit union supporters or contributors, even in the court documents. “I can’t tell you who the credit unions are. There are many credit unions who are members of the coalition, and many credit unions who have contributed to the Coalition,” Bettis told The Credit Union Journal yesterday. “I can assure you, there are many, many credit unions.” The suit said NCUA violates provisions of the Federal CU Act which require it to adopt substantial regulations on conversions to other charter types required by other federal regulators. But NCUA’s 20 pages are substantially more stringent than the one-page guidelines posted by the Office of Thrift Supervision, for example, according to the suit. The group charges that NCUA’s motive in amending the rules three times in the last two years is to thwart conversions of credit unions. NCUA Chairman JoAnn Johnson responded to the suit by saying the conversion rules were aimed at protecting consumers/members of credit unions and she is confident they will stand up to the legal challenge. The new rule, adopted in December, requires the credit union to facilitate communications among members and expands members' access to information used to pursue a conversion, among other things.

FEDERAL WAY, Wash. –Ascend United, a broker of distressed loans for credit unions, announced yesterday plans to pool millions of dollars in credit union loans from failed subprime auto lender Centrix Financial to sell on the secondary market. The company, a subsidiary of the Washington CU League, has already obtained commitments of around $5 million in performing and non-performing Centrix loans from four credit unions and expects others of the hundreds of credit unions still holding Centrix loans on their books to participate, according to Phillip Slater, program manager for Ascend United. “There are a lot of credit unions out there who were involved in the Centrix implosion and there were a lot of losses along the way,” Slater told The Credit Union Journal. “So a sale of the Centrix accounts seemed like a natural fit for us.” The Ascend United initiative comes as dozens of credit union participation agreements in Centrix loan pools are unraveling. Recently, The Credit Union of Texas, one of the biggest Centrix participants, agreed to buy back $13 million of participated loans from Mission FCU. Dozens of other credit unions are also negotiating buybacks of participations pools. Ascend United is forming two pools of Centrix loans, one from performing loans, the other from non-performing loans.

ALEXANDRIA, Va. – A group of purported credit union representatives filed suit against NCUA in federal court here today asking the court to overturn the agency’s latest round of amendments to its rules governing conversions to mutual savings banks. The group, calling itself the Coalition for Credit Union Charter Options, asserts that NCUA overstepped its authority last year in passing the new rules, the third time NCUA changed the rules over a two-year period. The court filing purports to be on behalf of a number of credit unions and their members but does not say who those credit unions or members are. But the coalition has been financed in the past by America’s Community Bankers and various credit unions that had converted to mutual savings banks. The lawyers representing the group are Washington-based Butera and Andrews, the lobbyists for ACB and for several converted credit unions.

PARSIPPANY, N.J. – Garden Savings FCU, a $160 million credit union, agreed to a cease and desist order directing it to address various violations of anti-money laundering laws, NCUA said yesterday. The order requires the credit union hire a Bank Secrecy Act compliance officer, create a BSA compliance team and create a program to train employees, monitor for compliance with BSA, Currency Transaction Reports and Suspicious Activity reporting requirements. Garden Savings is the third credit union cited by regulators this week for lax money laundering compliance. Monday the New York Department of Banking entered into similar orders with two small credit unions, Niagara Frontier Federal Employees CU and Niagara Falls Penn Central Employees CU, on violations of the BSA.

ROCKLIN, Calif. – A teller at American River HealthPro CU was charged with stealing as much as $11,000 from members by creating duplicate debit cards. Lori Yaniro, 23, was arrested after she was found making duplicates of cards of at least three members. At American River HealthPro CU tellers can make cards at an instant issuing machine. Police said Yaniro would either watch when members entered their PIN, either memorizing the number or making a note of it. She used the cards to fund personal purchase, including tires, electronics and hair salon products.

HAGERSTOWN, Md. – Ongoing Operations, a CUSO that provides business continuity services, said yesterday it has signed with Teneros to provide a disaster recovery solution for Microsoft Exchange. Tenero’s Application Continuity Appliance is a plug-and-play application that assures 99.99% to 99.999% uptime for Microsoft infrastructure applications. Ongoing Operations provides continuity services to more than 40 credit unions around the country.

ALBANY, N.Y. – Gov. Spitzer signed a bill creating a new community development financial institutions program for credit unions and banks based in New York. Credit unions, particularly the National Federation of CDCUs Director Cliff Rosenthal, were largely responsible for the new state program. Rosenthal was also instrumental in development of the Treasury Department’s CDFI program, which has funneled more than $1 billion in grants, loans and tax breaks to CDFIs, including credit unions. The New York program was not funded this year but advocates expect to request money for grants and loans in next year’s state budget.

MONETT, Mo. – Jack henry & Associates announced yesterday it has acquired Gladiator Technology Services, an Atlanta-based provider of online security services for financial institutions. Gladiator’s services include network intrusion prevention, firewalls, server intrusion prevention and event logging, risk assessments, compliance and regulatory solutions, email filtering and encryption. Gladiator provides these services to more than 500 credit unions and banks, many of them already Jack Henry clients. Financial terms of the deal were not disclosed.

DENVER – First Data Corp. said yesterday that Michael Capellas, the well-known former CEO at MCI, will head the payments processing giant after completion of its ongoing takeover by private equity fund Kohlberg Kravis Roberts & Co. Capellas will succeed Henry ‘Ric’ Duques, who built First Data and came out of retirement to sell the company in 2005. Capellas served as CEO of MCI (formerly Worldcom) from 2002 until its acquisition by Verizon last year. He also served as CEO of Compaq Computer and as president of Hewlett-Packard after HP bought Compaq. Since ending his brief retirement, Duques has re-engineered First data, first spinning off its Western Union operations last year, then acquiring several other payments companies, before selling First Data to KKR for $29 billion, one of the biggest corporate buyouts ever.