LISBON, Maine - Just three months ago, Lisbon Community FCU offered a scant array of mortgage products. The small CU's hands were tied from selling mortgage loans to the secondary market and accepting simplified applications from members over the Internet. Pre-approvals weren't possible and mortgage rates weren't attractive. It took an expert to pick apart its rate structures.

AUSTIN — The CEO of the Texas Credit Union League said the trade association will not wilt as banks attempt to use their political power to impose regulations on CUs.

If you're a Fiserv exec you can count on at least one of two comments being made to you by a credit union CEO: "Man, I wish I had gotten in on the ground floor with your stock," and "How long before you merge all those credit union business units."

KANSAS CITY – H&R Block, the nation’s largest tax preparer, announed Friday it has finally found a buyer for its troubled subprime mortgage unit, Option One Mortgage Corp. for what is being described as a fire-sale price. The sale to a private investment group organized by Cerberus Capital Management LP in New York is expected to be completed by Oct. 31. Block said costs and reductions in assets associated with the sale, and a related decision to shut down its separate H&R Block Mortgage Corp. operations, would wipe out the company’s tax preparation and other financial services profits for the fiscal year ending April 30 and produce a loss.

SYRACUSE, N.Y. – It took five-year-old Madalynn Davis all of the 60 seconds allotted to her but she was able to grab $219 inside the ESM-NS CU cash vault. The East Syracuse Elementary kindergartner, who was chosen from a pool of 350 pupils who opened accounts with the credit union this year, practiced grabbing handfuls of scraps of paper her mom blew around with a hair dryer. The practice paid off for the tot, whose goal was $100. Madalynn pledged to donate some of her catch to the local food pantry at St. Mathew’s Church. A classmate will get a chance to grab $3500 in June as part of the credit union’s promotion.

SPARTANBURG, S.C. – An armed robber who hit five banks and credit union in five different cities, sometimes dressed as a woman, was sentenced Friday to more than 40 years behind bars. Lionnel Dyches, 36, confessed to five armed robberies, including the December 2006 hold-up at State CU in Greenwood, S.C. Dyches brandished a handgun and used stolen cars to get away during the heists, more than one time dressed as a woman.

SAN DIMAS, Calif. – Two founding board members of Christian Community CU were celebrated at the credit union’s golden anniversary. The two founders, Earl Riley and Lloyd Wagner, were presented with commemorative clocks. Also honored was Chairman of the Board Charles Hughes, Jr., for 40 years services to the credit union. Hughes was honored by CEO John Walling, who will be celebrating 35 years with the credit union in June. The $440 million credit union was chartered in 1957 when a handful of Baptist ministers formed the American Baptist Ministers CU, then the name was changed three years later to American Baptist CU, before becoming Christian Community CU in 2001 to reflect the larger field of membership serving the larger Christian community.

MACON, Ga. – Atlanta Postal CU will more than double its current space when it moved into a former site of Rivoli Bank in the downtown. The credit union will move from its current 2,400 square foot space to one offering more than 7,500 square feet. Credit union officials expect to make the move this summer. The bank site was vacated when Rivoli Bank was acquired in 2005.

WASHINGTON – CUNA reported Friday it made contributions to 58 different House members last month, nine of whom would subsequently sign on as co-sponsor of CURIA, the CU Regulatory Improvements Act. Among those receiving CUNA contributions were: Ed Royce, the California Republican who helped draft the bill ($2,500); Carolyn Maloney, the New York Democrat who is chair of the Financial Services Committee that will hear the bill ($2,500); Brad Sherman, the California Democrat who helped draft provisions of the bill ($2,500) and Steve Chabot, the Ohio Republican who was among the 12 original co-sponsors ($2,500). CUNA has made a total of $35,500 in contributions so far this year to 17 of the bill’s 53 co-sponsors. CUNA also made contributions last month to several leadership PACs, including Gorwth and Prosperity PAC, run by Alabama’s Spencer Bachus, the ranking Republican on Financial Services ($5,000); Prosperity PAC for Paul Ryan, the Wisconsin Republican ($5,000) and Victory Now PAC, for Maryland Democrat Chris Van Hollen ($5,000).

WASHINGTON – CUNA reported Fridat it made contributions to 58 different House members last month, nine of whom would subsequently sign on as co-sponsor of CURIA, the CU Regulatory Improvements Act. Among those receiving CUNA contributions were: Ed Royce, the California Republican who helped draft the bill ($2,500); Carolyn Maloney, the New York Democrat who is chair of the Financial Services Committee that will hear the bill ($2,500); Brad Sherman, the California Democrat who helped draft provisions of the bill ($2,500) and Steve Chabot, the Ohio Republican who was among the 12 original co-sponsors ($2,500). CUNA has made a total of $35,500 in contributions so far this year to 17 of the bill’s 53 co-sponsors. CUNA also made contributions last month to several leadership PACs, including Gorwth and Prosperity PAC, run by Alabama’s Spencer Bachus, the ranking Republican on Financial Services ($5,000); Prosperity PAC for Paul Ryan, the Wisconsin Republican ($5,000) and Victory Now PAC, for Maryland Democrat Chris Van Hollen ($5,000).

ALEXANDRIA, Va. – NCUA reported Friday it approved 29 mergers last month, including an unusual number of huge credit unions acquiring much smaller ones, five involving billion-dollar credit unions. That included: Eastern Financial Florida FCU ($2.3 billion) acquiring Omni Community FCU ($50 million); Landmark CU ($1 billion) acquiring Belle City CU ($4 million); Kinecta FCU ($3.5 billion) acquiring Santa Monica School Employees CU ($9 million) Mountain America FCU ($2.1 billion) acquiring S.P. Sparks Employees FCU ($24 million) and GTE FCU acquiring Louisiana Association of Educators FCU ($1.4 million). Last month’s mergers claimed another 17 small credit union under $5 million in assets, a total of 47 of which have been merged out of existence so far this year. Increasing numbers of billion-dollar credit unions are turning to mergers to fuel growth, with 20 approved for mergers over the past six months.

COLONIE, N.Y. – Capital Communications FCU, with $540 million, announced Friday it has agreed to acquire $80 million Excelsior CU. Excelsior is one of the oldest credit unions in the country and was founded in 1915 as the Borough of Brooklyn CU, but financial struggle sin the 1970's prompted it to move to the state capital, to Albany, in 1978. The Capital Communications name and brand will be retained after the merger is complete because it is larger and the better known of the two.

NEW YORK – More than a dozen waiters in Chinatown and in Chinese restaurants in the northeast were arrested Friday and charged with stealing more than $3 million from the credit cards of more than 1,000 unsuspecting diners. The waiters stole the information off of diners’ cards using handheld skimmers, then shared the information for use in making bogus cards, according to authorities. The cards were used to buy high-end electronic equipment, which was sold to electronics and computer stores in Queens. An indictment obtained by The Credit Union Journal shows twelve men and one woman were charged Friday, including alleged ringleader De-Ziang Huang, 34, from Brooklyn. Police seized $200,000 in cash, giant flat-screen televisions, a cache of Rolex watches and Luis Vuitton and Gucci handbags when they raided his apartment last week. Waiters were paid $35 to $50 for each card they skimmed. The information was used to encode magnetic stripes on high quality forged credit card blanks. The stolen information was used to create several different cards on each identity. As much as $20,000 was charged on each of the counterfeit cards, drawn on both bank and credit union accounts, authorities said. The ring flew ‘shoppers’ all around the east coast to make the cards purchases on trips that included overnight hotel stays, car rentals and airline flights.

MIAMI – Six members of a sophisticated identity theft ring that siphoned millions of dollars from credit union and bank accounts were sentenced to prison last week as part of a five-year federal investigation known as ‘Operation Felony Lane.’ The defendants, along with three accomplices who have pleaded guilty and are awaiting sentencing, operated a ‘cash and grab’ scheme in which they stole purses and wallets then used the identities of their victims to manufacture phony IDs. The victims included members of Merck, Sharp and Dohme FCU, BrightStar CU, Tropical FCU, Keys FCU, as well as customers of Wachovia, Bank of America, Union Planters Bank, Capital One, SunTrust and Washington Mutual. But investigators said dozens more institutions were affected, too. Investigators call the ring ‘Felony Lane’ because the fraudsters use the farthest lane in a credit union or bank drive-thru--because of they are the farthest from security cameras and tellers–to cash phony checks. The ring also opened new card accounts on the unknowing victims, then used the cards to charge millions in purchases. The thieves obtained the identities first by pickpocketing purses and wallets in public places. One of the places targeted was a local hospital, which the thieves infiltrated by impersonating patients in wheel chairs. More than 80 people in Felony Lane have been charged so far in a scheme authorities say may have stolen as much as $8 million. The defendants sentenced last week were: Shameca Walters, the ringleader; Theresa Mason; Anita Proby; Jerri Marini; Edith Baker and Diana Leathers.

RESTON, Va.–The pace of corporate takeovers in the credit union tech industry continued at a frenzied rate last week with the latest deal by two private equity funds and banking giants JP Morgan Chase and Bank of America to acquire Sallie Mae, the dominant player in the market, for a whopping $25 billion.The deal will not only give the two major competitors in the student loan market access to millions of young customers, but also defacto control over the secondary market for student loans, which Sallie Mae created and controlled, spreading fear among credit unions, many of whom have been squeezed out of the market by Sallie Mae.“It’s still kind of early to say how it may affect us because Sallie Mae has never really been a big competitor (in) Texas,” said James Nastars, SVP- lending at University of Texas FCU, one of the biggest student lenders among credit unions. “But BofA is; they’re No. 2 on the Texas campus. And Chase is up there among the leaders.”“That’s what we’re looking at,” said Nastars, whose credit union makes about $55 million a year in loans to UT students, about a fourth of all the loans made in the University system. “Sallie Mae is not much of a player in the Austin market. But BofA and JP Morgan are.”Other CUs relying on student loans had similar fears last week. When USC FCU sold its credit card portfolio to MBNA it chose the monoline bank because it didn’t want to be competing with the giant lender on other products, according to Gary Perez, president of the $300-million credit union. But then MBNA was sold to Bank of America, which competes with credit unions in almost every market.Under the deal, two private equity funds, J.C. Flowers, headed by ex-Goldman Sachs banker Christopher Flowers, and Friedman Fleischer & Lowe, will team to own 50.2% of the equity in Sallie Mae, while BofA and JP Morgan Chase will each own 24.9%. The group will pay $60 a share, a whopping 33% premium from the price the shares were trading before word of the giant takeover leaked out.As part of the deal, the two banking giants announced plans last week to provide a $30-billion line of credit to Sallie Mae to finance its securitizations, the key component of the secondary loan market. The deal comes as Congress is expected to cut federal subsidies and guarantees on student loans, squeezing even more small competitors like CUs and community banks. In addition, a probe of inducements paid by participants in the student loan market by the New York Attorney General continues to spread, with Sallie Mae among those that have agreed to settle charges by ending what were described as deceptive sales arrangements and pay $2 million into a fund to help students understand financial aid availability.To USC FCU’s Perez, the Sallie Mae takeover conjures up the whole MBNA deal. He worries that not only will the banking giant gain access to its members’ information, but also that key services provided by Sallie Mae, like servicing and securitization, will be affected.“The purpose of selling (the credit card portfolio) to a monoline was that we wouldn’t be selling to a competitor,” Perez said, likening it to ‘sleeping with the enemy.’ While Sallie Mae had grown from a credit union partner on student loans to a major competitor, its business was mostly restricted to student loans, said Perez. BofA and JP Morgan Chase compete with credit unions in every market, he noted.“One of the fears I’ve always had was being squeezed out of the market,” said Leo Ditchcreek, president of Notre Dame FCU, the dominant lender on the University of Notre Dame campus, with more than 80% of the market. But Sallie Mae is also one of the school’s six preferred lenders and also buys the CU’s loans and provides servicing.But the expansion of the role of BofA and JP Morgan Chase into the $85-billion student loan market is also a good sign for Notre Dame FCU’s Ditchcreek. “It appears to me that the student loan market is still a viable market for credit unions,” he said. “The fact that private firms like Chase and Bank of America are getting deeper involved gives me an indication that there’s still money to be had.” The demand for student loans is growing and will continue to grow in the near future, he added. “I hope with the Sallie’s Maes of the world and the Citibanks of the world that the competitiveness will maintain,” said Ditchcreek. “I hope they don’t squeeze out the other players.”

BOSTON–Too much emphasis may be being placed on the stagnant membership growth at credit unions. Several experts at Credit Union Journal’s Business Development and SEG Conference at the Hyatt Hotel here stressed that, with few exceptions, the issue isn’t new members but two bigger problems: household attrition and not getting sufficient business from current members. “Retention is the primary driver of growth,” Mark Riddle of Raddon Financial Group said. “ It’s not that you’re not bringing in new households, it’s that you are not retaining the households you already have.”Riddle wasn’t alone in urging credit unions to pay more attention to the members they already have. “You have a huge opportunity internally that you are not mining today,” said Harland Financial Solutions’ Chris Braccia. “It costs 25% more to acquire a new member than retain a current member.”

WEST PALM BEACH, Fla.–Credit unions of all shapes and sizes have been struggling with stagnant growth, so Credit Union Journal brings readers this special report exploring ways credit unions are working to beat back this trend.

APPLE VALLEY, Minn. – Wings Financial FCU announced this afternoon it is withdrawing its controversial hostile takeover offer for Continental FCU because of NCUA ruling earlier this week nullifying the offer’s $200 payment for each of Continental’s members. “Once the payment’s gone it kind of makes it difficult to make the offer work,” John Wagner, a spokesman for the $1.6 billion credit union, told The Credit Union Journal today. Wings has been soliciting members of Continental FCU with offers of better service and expanded products, as well as $200 apiece, which would come from the Continental capital, if the merger were to go through. They had hoped to convince members to solicit Continental’s board–which had rejected four prior merger offers from Wings–to put the offer to a member vote. NCUA ruled earlier this week that the $200 payment was illegal because it violated provisions in the Federal CU Act prohibiting pre-merger dividends. The unprecedented hostile takeover offer had attracted the ire and consternation of credit union leaders who insist that all merger deal among credit unions and other cooperatives are friendly in nature.

IRVINE, Calif. – Autobytel, the provider of car-buying services for credit unions, announced yesterday it has signed with Wilson Automotive Group, to create a national online customer referral program. Wilson Automotive has 15 dealerships in California and Arizona and is the nation’s 13th largest dealer group.

SAN DIMAS, Calif. – WesCorp FCU announced yesterday it has signed a multi-year pact with MoneyGram International to provide check and money order services to its 1,000 credit union members. MoneyGram is based in Minneapolis.