ALEXANDRIA, Va. – NCUA reported it awarded three credit unions a total of $280,000 in low-interest (1%) loans through its community development loan fund. The three credit unions are: Island Tradition FCU, Honolulu ($130,000); Workers United FCU, New York ($100,000) and Choices FCU, St. Louis ($50,000). The agency has made a total of six loans for $725,000 so far this year.

AUBURN, Mass. – Members of Central CU Fund, the tiny corporate credit union, with just $270 million in assets, voted overwhelmingly at Tuesday’s special meeting to merge the Centrail CU Fund, the nation’s first corporate, into Members United Corporate FCU. Members United is the nation’s second largest corporate, with $13.5 billion in assets and serving 2,100 credit unions nationwide. Central CU Fund served 210 credit unions in Massachusetts.

NEWARK, N.J. – Dozens of credit union CEOs can rest easier now that Everest National Insurance Co. has assured them they will continue to pay default protection insurance on failed subprime auto loans made through Centrix Financial Services, even though the company’s legal obligation to make the payments is in dispute. Everest made the assurance to NCUA in response to an unusual public plea from the credit union regulator last month that Everest continue to pay millions of dollars in DPI payments, while it litigates the matter, according to a source who has seen the letter. Everest did not return phone calls seeking comment. If Everest had shut off the DPI payments, it could cause millions of dollars of losses on more than 100 credit unions still working off Centrix loans. The Centrix case threatened to unwind further this week when The Credit Union of Texas agreed to buy back $13 million of subprime Centrix loans it had sold to Mission FCU in a participation deal. Numerous other credit unions are negotiating similar repurchases, potentially leaving a handful of large credit union originators of Centrix loans with millions of new losses. Everest has filed a civil fraud suit against Centrix and its founder, Robert Sutton, claiming Sutton violated his contract to reimburse Everest for losses on Centrix loans. Sutton, through a wholly owned company, called Founders Insurance, had agreed to indemnify his insurers–in effect agreeing to reinsure his own insurers.

KANSAS CITY – A group of bandits believed responsible for as many as seven area heists hit United Catholic CU here Monday, for the second time in less than a month. The group, dubbed the Countdown Robbers because one stays in the lobby counting the time that has passed as the second one rifles the cash drawers, is believed to be armed and dangerous, according to a bulletin issued by the FBI. Although the physical description of the thieves varies, their method is the same, leading authorities to believe it is the same group involved in the other hold-ups. The FBI offering a reward of $10,000 for information leading to the arrest of one or more of the robbers.

ENGLEWOOD, Colo. – Aimbridge, the provider of indirect lending services for credit unions, said yesterday it has changed its name to Aimbridge Lending Solutions to reflect an expansion beyond indirect auto loan services. The company began marketing the use of its decision-making system for sue in credit card applications through the Illinois CU League. The decision-making software, which creates a scorecard for applicants. Aimbridge provides indirect auto loan services to credit union in Colorado, Texas, Florida, Ohio and several other states.

GLASTONBURY, Ct. – Open Solutions Inc. announced yesterday it has agreed to acquire IA Systems Inc., a provider of online lending solutions for credit unions, from Securian Financial Group. As part of the deal, OSI will offer insurance products through Securian. IA Systems markets the StreamLend and Velocity product lines of online lending tools. Securian is the parent of Minnesota Life Insurance, Allied Solutions and Advantis Capital Management.

BOULDER, Colo. – Elevations CU, the former University of Colorado FCU, has applied to state regulators to convert to a community charter serving almost 350,000 residents of the two surrounding counties, Boulder and Broomfield. The $700 million credit union was chartered in 1952 to serve employees of the University and converted earlier this year to a state charter. The state Financial Services Board will hold a public hearing next month on the field of membership expansion request.

BASKING RIDGE, N.J. – Affinity FCU said it has added almost 400 members at its new Saint Peter’s University Hospital branch, a year after the branch was opened. The $1.4 billion not only offers hospital employees full financial services, but also financial education workshops. About 600 members are served at the in-hospital branch.

MONTEREY, Calif. – Members of Monterey County Employees CU are being warned not to respond to an email asking them for personal account information. The latest phishing attempt is being sent on the credit union’s letterhead and promises members a $20 gift certificate for participating in a survey, but the link to the email directs the members to a website that collects their personal information. Credit union officials are reminding members not to disclose personal information to the scammers.

PROVIDENCE, R.I. – Three foreign nationals who flew in from Los Angeles pleaded guilty last week to a scheme to alter the PIN-pads at point-of-sale machines in Stop & Shop supermarkets, which drained more than $130,000 from accounts at four area credit unions and banks. The three confessed to replacing PIN-pad terminals at the check-out lanes at six area Stop & Shops and replacing them with skimmers, which were used to glean credit card PINs, then drain cardholders accounts. As they entered the stores, one of the suspects would distract a clerk while the others swapped terminals–in as little as 12 seconds. Several days later they returned to the stores and replaced the original terminal, making off with the skimmers and the account information. The three, and a fourth accomplice, were arrested Feb. 26 while they were engaged at the Stop & Shop in Coventry. The fourth accomplice is still awaiting trial. The scheme drained more than $100,000 from Citizens Bank customers, and $10,000 from members at Coventry CU and $5,000 from members at Centreville CU. The three who pleaded guilty are: Arutyun Shatarevyan, Gevork Baltadjian and Arman Ter-Esayan.

SAN DIEGO – In a deal that could send a chill through the market for credit union loan participations, Mission FCU announced yesterday it had reached agreement with The Credit Union of Texas to buy back more than $13 million in Centrix Financial-related subprime auto loans Mission FCU had acquired in a loan participation with the Dallas credit union. Mission FCU, one of the hardest hit credit unions from the Centrix fallout, exercised its rights under the participation because the loans, with high default rates, were sold with mistatements of fact, the credit union reported. Ron Martin, president of the $2 billion credit union, said yesterday the loans were part of a $90 million pool his credit union had participated in with Texas credit union. The $13 million represents the remaining balances on the loans as of April 30. “We’re not calling it recourse, but they have agreed to repurchase the loans,” Martin told The Credit Union Journal. Brad Pizer, a Beverly Hills lawyer representing Mission, said the standard loan participation agreement requires the repurchase if the loans have been sold with any mistatement of fact, even if it is unintentional. “It would be irresponsible for Mission not to reallocate the losses to the originating credit union,” said. The deal has the potential to force a handful of the Centrix originators, like The Credit Union of Texas, to accrue millions in new losses and could even roil the multi-billion-dollar market for credit union participations, where recourse of large sums is rare. Officials with The Credit Union of Texas did not respond to phone calls for comment. Several other credit unions are believed to be mediating their differences on Centrix-related participation agreements, which could result in other multi-million dollar settlements. Mission FCU, which has wracked up significant losses on its Centrix loans, is also pursuing repurchase with as many as a half-dozen other credit union originators, said Martin.

BOSTON – Gov. Deval Patrick, dealing with the highest foreclosure rate in the state’s history, filed legislation yesterday which would criminalize mortgage fraud, bar foreclosure rescue scams and create a central repository on foreclosures. The bill, the result of a broad industry task force that included credit union representatives, would require lenders provide homeowners with an intent to foreclose and a right to cure a default. The notice of intent to foreclose would have to be filed with the state Division of Banks. The bill would also require lenders who steer borrowers to subprime ARMs to allow the borrowers to opt out of a fixed-rate loan. “We must help homeowners facing foreclosures,” said Gov. Patrick. “The problem is complex and requires a comprehensive approach that provides for greater education and information for consumers before securing a mortgage; a more responsive legal framework for homeowners facing foreclosure, and clear consequences for those who engage in mortgage fraud.” The state is also exploring other efforts to rescue homeowners, including a multi-million dollar fund that would provide low-cost refinancing.

RIVERWOODS, Ill. – Discover Financial Services, in the process of being spun off by Morgan Stanley, announced yesterday it has contracted with First Data Corp. to issue an administer its new branded payroll cards. The Discover-branded payroll cards will be aimed at the underbanked market and will provide them with prepaid debit use, check writing capabilities, access to a large network of ATMs, direct deposit and money transfers to Mexico and Latin America. Discover Financial is the parent of PULSE EFT, a network for more than 4,0000 credit unions and banks.

DENVER – First Data Corp., in the process of one of the biggest corporate takeovers ever, announced yesterday it has completed its own takeover of FundsXpress, the provider of Internet services for credit unions and banks. The deal is one of a flurry that have buffeted the funds processing giant, which recently completed the acquisition of Wells Fargo’s ATM network, Instant Cash Services. First Data is in the process of being acquired by private equity giant Kohlberg Kravis Roberts & Co. for $29 billion. FundsXpress is based in Austin, Texas and provides a variety of services, like Internet banking, electronic payments and fraud prevention, to more than 500 credit unions and banks.

PHOENIX – FirstCorp CU said yesterday it has signed with Diversified Check Solutions to provide an automated clearinghouse product for Check 21 to its credit union members in four surrounding states. Diversified’s ACHeck21 product suite will allow FirstCorp’s 70 credit unions to deploy an intelligent ACH web-based remote capture system. The system allows a fast and convenient way to convert check payments into ACH transactions through the use of a magnetic ink character recognition reader and easy-to-use software. Diversified is based in Lake St. louis, Mo.

FAYETTEVILLE, N.C. – Bragg Mutual FCU said yesterday it will offer comprehensive identity theft prevention and resolutions free to its members through Identity Theft 911. The service will provided one-on-one counseling to members affected by identity theft; assist with credit bureaus and collection agencies; provide credit monitoring and optional credit freezes. Identity Theft 911 is based in Scottsdale, Ariz.

GLENDORA, Calif. – In one of the first deals of its kind, officials with the United Pentecostal Church said they have signed a deal with America’s Christian CU making the $225 million credit union the Church’s preferred financial provider for the whole denomination. The officials said the credit union technologies and services from remote locations and automated processes will make managing finances easy for churches of all sizes. America’s Christian CU has been serving people and ministries since 1958.

DENVER – Security Service FCU announced yesterday it has expanded its market in Colorado with the acquisition of New Horizons Community CU, which failed last year due largely to its exposure to subprime auto loans provided by Centrix Financial Services. Texas-based Security Service has operated in Colorado since 1980 and currently has nine branches in the state. The $4 billion credit union will acquire the assets of the Denver-based credit union in a purchase and assumption agreement from NCUA, which has operated New Horizons Community CU under conservatorship since last April. During that time the credit union’s has worked off as much as half of its assets, with Security Service acquiring $152 million in assets of the smaller institution. New Horizons was chartered in 1934 and operates four branches in Colorado.

ELKHART, Ind. – Teacher’s CU was warning about an automated phone call purporting to be from the credit union asking for credit card and account numbers. The pharming effort, then notified the members their account had been overdrawn and asked them to call one of two numbers, where they were asked for additional information about their accounts. Police said more than 200 credit union members notified them of the scam. Credit union officials were warning members not to give out any personal information over the phone.

WASHINGTON — Lawmakers have begun an investigation into a new online scam with which banks and credit unions are being asked to process and accept unsigned checks created by criminals. In letters to NCUA and the federal banking agencies, two leading Congressmen are asking whether this emerging fraud is being monitored for and whether the acceptance of remotely accepted checks is a safe and sound banking practice. The probe comes as credit unions and banks are diving into new technology to take advantage of the Check 21 law, which made electronic check images legal tender. In one remote check scheme, a criminal calls a consumer and announces the consumer has won a cash prize, then asks for the necessary information to deposit the prize in the consumer’s account. The criminal then ‘deposits’ the check in the ‘winner’s’ account, giving the criminal access to withdraw funds form the account. The lawmakers, Barney Frank, chairman of the House Financial Services Committee, and Ed Markey, a senior member of the House Energy and Commerce Committee, ask the regulators whether online fraud such as this has been increasing or decreasing? who pays for these type of losses? how widespread is the use of remotely created checks in the payments system? and should be address by the Federal Reserve, according to a copy of the letter obtained by The Credit Union Journal.