RICHMOND, Va. – Members at as many as a dozen Virginia credit unions stand to gain thousand of dollars in inactive account fees and back-interest if an NCUA ruling on federal preemption is allowed to stand. The Virginia Treasury Department is reviewing the NCUA ruling, a legal opinion that states federally chartered credit unions need not comply with state laws on dormant accounts, as long as they comply with federal rules. Christopher Anuswith, president of Guardian FCU, said his and more than a dozen other credit unions have been notified by the state that their practice of waiving dormant account fees and/or paying back-interest on reactivated dormant accounts violates the state’s laws on escheat, which requires that accounts be declared dormant after a year of inaction and be turned over to the state after five years. “We’re a military credit union, so our guys are somewhat mobile and they change addresses a lot,” said Anuswith, whose membership is based around the Coast Guard. But state officials cried foul at the Portsmouth-based credit union’s practice of waiving the dormant account fee, a figure in excess of $75,000 over a ten-year period. Numerous other credit unions were also cited by the state, one with a dispute ‘over six figures,’ according to Anuswith. “We’ve always tried to reunite the members with their money,” he told The Credit Union Journal yesterday. “If we can reunite the members with their money and refund the fees, then what’s the foul?” Reginald Jones, a Richmond lawyer representing the Virginia CU League in the dispute, said if the NCUA legal ruling is allowed to stand it will raise another dispute on the issue of parity, because Virginia’s 40 state chartered credit unions would still be bound by the state law. “If it’s going to be a preemption for federal charters then we have to get the same deal for state charters,” he said.

WILKES-BARRE, Pa. – A 37-year-old local man was given a 151-year prison sentence for four area bank robberies, including two at credit unions. Keith Golomb, of Moutnaintop, Pa., pleaded guilty to the four robberies and one attempted robbery. The robberies included the August 18 2006 hold-up at Wilkes-Barre Postal FCU, where he stole $12,000; and the August 28th heist at Vantage Trust FCU, when he escaped with $7,050.

BATON ROUGE, La. – Campus FCU said yesterday it has implemented Financial Industry Computer Systems’ Commercial Servicer, a commercial real estate loan servicing system. The $330 million credit union began a commercial loan program in 2006. The system interfaces with the credit union’s core processing system, by XP Systems.

ATLANTA – The Federal Home Loan Bank of Atlanta reported yesterday that net income for its first quarter declined 6%, to $95.8 million, due mainly to a drop in net interest income and other income. The first quarter financials resulted in a dividend of 6.25%, down from 6.74% paid for the first quarter last year. The Atlanta Bank is one of the largest of the 12 FHLBs, by membership, and claims more than 1,200 members, including 135 credit unions.

JOPLIN, Mo. – Great Plains FCU said it has agreed to acquire the assets of Communities United CU, the 11-year-old community development credit union, that was declared insolvent four months ago. Communities United , which had just 1,900 members and $2.3 million in assets, was in and out of financial trouble over the past few years, which were marked by public please for financial assistance from credit unions. Great Plains has $225 million in assets and 11 branches in Kansas, Missouri and Texas.

ALEXANDRIA, Va. – Pentagon FCU announced yesterday it has signed a three-year multi-million dollar telecommunications contract with AT&T. AT&T will upgrade existing data infrastructure and extend its voice and data capabilities at 26 domestic and international location for the $10 billion credit union. AT&T will also continue to provide voice and data service to Pentagon FCU through its OneNet Service.

HARRISBURG, Pa. – The former head of the Harrisburg Housing Authority and CEO of Greater Harrisburg Community CU pleaded not guilty Tuesday to charges of lying to a grand jurt probing the diversion of $500,000 in federal housing money to the now-failed community development credit union. Carl Payne, 66, is charged in a federal indictment with creating and backdating documents to obstruct a grand jury probe into the diversion of the housing funds. Payne is also charged with lying about receiving $134,000 from the housing authority for his work running the tiny CDCU. Greater Harrisburg Community CU was chartered to much fanfare in 2001 to serve low-income residents surrounding the state capital, but was declared insolvent under the weight of bad loans in February 2006 and shuttered by NCUA. The credit union reported more than $265,000 in losses on just $1.6 million in assets for the first nine months of 2005.

WASHINGTON – President Bush yesterday nominated two bankers to the seven-member Federal Reserve Board of Governors, including Betsy Duke, the former chairman of the American Bankers Association and an ardent credit union critic. During her year as ABA Chairman, Duke traveled the country to defeat credit union legislation and testified before Congress in 2005 against credit union provisions in the Regulatory Relief Act, passed in the last Congress. At the time, Duke, who is now chief operating officer at TownBank, in Portsmouth, Va., was executive vice president of Wachovia. President Bush also nominated Larry Klane, president of global financial services at Capital One Financial Corp., to the other vacancy on the Fed Board. Both nominees must be approved by the Senate.

WALL STREET– A former executive at investment bank Oppenheimer & Co. pleaded guilty yesterday to a multi-million dollar scheme to gain illegal access to the initial public offerings of as many as 65 mutual savings bank–including six that were former credit unions. Federal prosecutors and the Securities and Exchange Commission said that 63-year-old Bert Fingerhut. his nephew Bruce Fingerhut, his lifelong friend Robert Danetz and Danetz’s brother Stephen Danetz, conspired to gain depositor status at dozens of mutual thrifts around the country in the expectation the mutuals would convert to stock form. Bert Fingerhut put up the money and earned more than $11 million from the scheme, while Robert Danetz and Bruce Fingerhut traveled the country to set up nominee accounts at the various mutuals, sometimes using phony identification cards and fake utility bills to satisfy in-state residence requirements. The 65 stock offerings were all oversubscribed, meaning a limited amount of stock was available for legitimate depositors, some of whom received less stock than they requested or were shut out altogether. Among the 65 offerings were the 1999 IPO for Jade Financial (IGA FCU); the 2002 IPO for First PacTrust Bancorp (Pacific First FCU) and of Synergy Financial (Synergy FCU); the 2003 IPO for Rainier Pacific Financial Group (Rainier Pacific CU); the 2004 IPO for K-Fed Bancorp (Kaiser Permanent Amployees FCU) and of Atlantic Coast Federal (Atlantic Coast FCU); the 2005 IPO for Heritage Financial Group (AGE FCU) and the 2006 IPO for Viewpoint bank (Community CU). Mutual bank conversions have proven to be hot investments, as newly issued stocks are generating substantial profits. The most recent IPO of a credit union convert, Viewpoint Bank, for example, has ‘popped’ 80% since its introduction last October. As a result, depositors usually are oversubscribing to new issues, and are often being shut out. The scheme earned the group more than $12.5 million, according to the SEC. Under a plea agreement, Bert Fingerhut has agreed to forfeit $11 million in ill-gotten gains from the scheme. This is the second case brought by the SEC over the past year for illegal access to mutual thrift IPOs. Four New Yorkers were charged with earning millions of dollars in profits from the New Alliance Bancshares by paying accomplices to open nominee accounts for their benefit.

NEWARK, N.J. – The long-time manager and sole employee of tiny La Cassa FCU was charged in federal court this week with siphoning more than $200,000 from member accounts, pushing the credit union into insolvency. Gisela Rivera, 50, was charged with manipulating the books of the $500,000 credit union to hide the scheme. Rivera was the manager and sole employee of the credit union between 1987 and 2005. The 33-year-old credit union was merged into North Jersey FCU last November.

ATLANTA – Federal antitrust regulators approved CheckFree Corp.’s acquisition of Corillian Corp., marrying the two providers of online banking services to banks and credit unions, CheckFree announced yesterday. The company said it then completed the $5.15-a-share, $245 million acquisition of Corillian. It was the second major deal in the last two months for CheckFree, which acquired Carekker Corp. for $180 million in March.

HARTFORD, Ct. – Constitution Corporate FCU said yesterday it has successfully processed incoming image files from bank of America using Check 21 software and interface provided by VSoft Corp. The VSoft software will check the images against Constitution’s member credit unions for posting. The exchange allows the $2 billion corporate credit union to eliminate the middle man in the transaction, reducing processing time and costs. VSoft said Constitution is its first customer to accept check image files from a third party other than the Federal Reserve or an exchange organization.

CARSON CITY, Nev. – Greater Nevada CU said yesterday it has contributed $50,000 to Western Nevada Community College to help build a new baseball facility. The funds will pay fo 400 seats needed to complement the stadium. Stadium seats are being sold to individuals for $1,000 each. Purchasers will have their names engraved on them.

BREMERTON, Wash. – Kitsap CU said yesterday it has installed Symantec’s Control Compliance Suite. The suite helps staff of the $650 million credit union to quickly identify and remedy security deficiencies in systems across the organization. From a single console, the system manages the process of data gathering and reporting on the security of operating systems, directories, applications and databases.

BURNSVILLE, N.C. – State Employees CU said yesterday its SECU Foundation has contributed $170,000 to help build a computer lab with high-speed Internet access for this impoverished rural community. The SECU Information Gateway will serve residents who cannot afford a home computer or high-speed Internet access and will also provide a resource center for people who have lost their jobs in the hard-hit manufacturing facilities in the area. There will be about 40 personal computers in the center. The SECU funding will help in the renovation of a 1920's historic building that will house the Yancey County Library. Yancey County has lost 800 manufacturing jobs in recent years, pushing the unemployment rate up to 12%. SECU said it is looking at the project as a possible pilot for similar initiatives around the state.

SAN FRANCISCO – Visa USA announced yesterday that named interim chairman and CEO Joseph Saunders, the former head of Providian Financial, to the permanent job. Saunders, the former head of card services at Washington Mutual, after WaMu acquired Providian in 2005, will lead the card giant through a reorganization, which will culminate in an initial public offering in the third quarter. Saunders also as head of card services at FleetBoston and of Household International, before that. Visa, the largest payments system in the world, is currently controlled by the largest banks, just like its main competitor MasterCard, which went public a year ago.

PHOENIX – Deseret Schools FCU is offering the ultimate wedding gift for spring nuptials: wedding insurance. According to Travelers, which underwrites the policy, today’s weddings have an average cost of $27,000; yet, too often weddings are marred when a favorite bridal shop closes or bad weather causes the ceremony to be postponed. Desert School’s Wedding Protector Plan offers a variety of coverages, including cancellation or postponement; additional expenses; lost deposits; photos and video; gifts and special attire. The coverage is being offered through the credit union’s wholly owned CUSO, Desert Schools Financial Services.

ST. PAUL, Minn. – 3M unveiled a new material yesterday that allows the design of the first truly transparent, fully functionality ATM payment cards. Visa International has recently approved 3M as a manufacturer of a transparent inlay for use in Visa-branded payment cards worldwide. The infrared Vikuti Clear card Filter will provide credit unions and banks with a powerful new marketing tool and business opportunity, allowing issuers to highlight brand names. Typography, solids, patterns illustrations all reproduce well on the clear plastic, which accepts four-color printing on the cards, which contain the traditional magnetic stripe.

DENVER – Flatiron Financial Services, the former Centrix Financial, tried yesterday to reassure more than 130 credit union participants in its subprime auto loan program that millions of dollars in payments will continue to keep flowing as the once high-flying broker tries to reorganize itself under bankruptcy. “Credit unions have continued to receive the proceeds of insurance claims regularly from Everest Insurance. We continue to facilitate the claims fully and claims continue to get paid,” said Kevin Barry, the former director of servicing for Centrix and now the CEO of Flatiron Financial. Barry acknowledged the concerns about whether the insurer will continue to pay default protection insurance claims, in light of last week’s public plea by NCUA to the insurer. “The trepidation, I think, is understandable,” Barry told The Credit Union Journal yesterday of the potential halt in coverage, while Everest presses its civil fraud case against Centrix founder and former CEO, Robert Sutton. Barry said Sutton continues to serve on the Flatiron board but no longer has a day-to-day role in the company he created. Credit union executives around the country continue to hold their breath as they wait to see whether Everest is no longer legally bound to cover credit union claims, as Sutton claims in one of several suits pending in the Centrix case. “I think there would be great concern if Everest were to decide there was no coverage,” said Christian Onsager, a Denver lawyer representing credit union giants Easter Financial Florida CU and Landmark CU. Barry acknowledged the high default rate of subprime loans credit unions bought through Centrix, an average as high as 38%, but said most of the remaining $1.3 billion portfolio is seasoned beyond 30 months, so the defaults are expected to fall. “The worst is in the rearview mirror,” he said.

SAN JUAN CAPISTRANO, Calif. – One or more thieves use a blowtorch to break into an Orange County Teachers FCU ATM here last Saturday. The thieves used a blow torch to break into the building housing the ATM, and then used the torch to cut open the back of the machine, police said. Because of the heat build-up from the blow torch, a small explosion blew out a panel of the machine. A ‘substantial’ amount of cash was stolen. The break-in was similar to one that occurred at a Wells Fargo ATM last week. In that case, the suspect or suspects likely used a sledgehammer to break through a stucco wall, then used a blow torch to cut through the back of the ATM.