McLEAN, Va. – Long-term mortgage rates were virtually unchanged this week, for the third week in a row, according to Freddie Mac. The average for the 30-year, fixed-rate loan held steady at 6.16%; while the average for the 15-year, fixed-rate mortgage dipped slightly to 5.86%, from 5.90% last week. ARM rates were mixed, with the average for the one-year ARM rising slightly to 5.43% this week, from 5.40% last week; and the average for the five-year ARM dipping to 5.88%, from 5.91%. "Despite concerns about possible spillovers from the troubles in the subprime market, rates on 30-year fixed-rate mortgages remained stable," said Frank Nothaft, chief economist for Freddie Mac. He noted the conflicting signals, with the drop in February new-home sales "suggesting that more time will be needed before a housing recovery takes place," while the rise in existing-home sales "offered some hope of firming in housing demand."

PURCHASE, N.Y. – Quorum FCU said yesterday it has hired advertising agency VogtGoldstein to provide it with print and direct response services. The 70-year-old credit union was formerly known as Kraft Foods FCU and had no previous ad company. Ad spending was not disclosed. VogtGoldstein is based in Westport, Ct., and lists clients such as BMW, Oxford Health Plans and Southern Connecticut State University.

DALLAS – The Texas CU Foundation, which helped pass a mandatory financial education requirement for high school students, will join the National Endowment for Financial Education today to launch a statewide initiative to bring a financial literacy curriculum to the state’s schools. Today’s event, to be held at Texas Dow Employees CU, will feature an overview of the statewide initiative, dubbed Project NEFE, and of plans to train high school teachers in the financial curriculum. The new credit union-backed law requires that all school districts incorporate personal financial literacy training into their curriculum beginning this year. Dozens of credit unions, as well as the Texas CU League and Texas CU Department, have signed on to participate in the project to help train the teachers.

WASHINGTON – The House Financial Services Committee approved a new regulatory scheme for the secondary mortgage market, but not before debating the guaranteed line of credit, the so-called federal subsidy, for Fannie Mae and Freddie Mac. Republican Ron Paul of Texas, a self-proclaimed Libertarian, argued that the federal government should not be subsidizing the huge government sponsored enterprises, which it does through the credit line, lowering borrowing costs by as much as 25 basis points on billions of dollars in publicly floated debt. “It’s not necessary to have this subsidy,” said Paul. “It encourages business, lenders and purchasers to do things they wouldn’t do otherwise.” But Massachusetts Democrat Barney Frank, who chairs the Financial Services panel, said he is convinced the two secondary market giants pay back the subsidy by the variety of homeownership programs they operate for low- and moderate-income buyers, as well as a new affordable housing grant program, projected at as much as $500 million a year, that will be required under the proposed bill. Paul’s proposal was defeated. The bill, which now goes to the full House for debate, would also create a new regulator for Fannie, Freddie and the 12 FHLBs; set new capital standards for the housing GSEs; and allow the regulator to order divestiture of some of the huge mortgage portfolios held by Fannie and Freddie if questions of safety and soundness arise. The House passed a similar bill in the last Congress, but it was never voted by the Senate.

APPLE VALLEY, Minn. – For Wings Financial FCU, the TIP charter it received in December 2003 enabling it to serve the entire air transportation industry has become as much of a hindrance to growth, as an enabler. That’s because NCUA rules will only allow the $1.6 billion credit union, formerly Northwest Airlines FCU, to merge with another credit union with the same charter–and there are only three others; American Airlines FCU, FAA First FCU and Continental FCU. Combined with the shrinking air transportation industry–which has lost 20% of its base over the past five years–the credit union’s growth potential is severally diminished, according to Paul Parish, president and CEO of Wings Financial. In fact, those four credit unions combined had virtually no member growth over the past five years. “I think our opportunities for growth are very limited,” Parish told The Credit Union Journal yesterday, of his ardent pursuit of the much smaller Continental FCU. Parish said the board of the airline credit union investigated other options, including converting to a community charter, but that would require giving up the existing groups they serve around the country, where their branch network is already situated. A conversion to mutual savings bank was also reviewed, but rejected. “It is not part of our plan now. We are focused on the TIP and our board of directors is committed to that direction,” he said. Parish is convinced a combination of the two credit unions would be the best thing for members of both institutions. “Frankly, neither credit union can do what the two can do collectively,” he said.

EL SEGUNDO, Calif. – In staving off a hostile takeover from the much larger Wings Financial FCU, management of Continental FCU sees the embattled credit union’s future closely intertwined with its airline sponsor’s blue collar workers. That’s where a variety of new products, including a low-balance money market fund, is targeted, according to Tom Glatt, president of the $180 million credit union. “We want people with grease under their fingernails,” Glatt told The Credit Union Journal. “We want people who work outside, who get their hands dirty.” He described them as baggage handlers, maintenance people, and ramp workers. The new money market fund, to be introduced in the next two weeks, will have minimum balances starting at $100, not the $2,500 required of many such funds. A recent CD promotion helped bring in $6 million in new shares in the first two months of the year. “We’ve got several other kinds of promotions planned,” said Glatt. “We’re doing a lot of the right things because we listen to our membership.” Glatt is trying to convince Continental members that the board of directors made the right decision in rejecting the takeover offer from Wings Financial FCU and committed to a strategy of expanding services, including full-service brokerages, additional ATM access, and shared branching. “We want to make it a value proposition for everybody,” said Glatt.

NEW YORK – Money manager Ahmet Okumus said yesterday he has boosted his stake in financially troubled Bisys Group to 10.4% and has asked the company for a board seat. “While I have the utmost confidence in the ability and intentions of the current Board and Management, I believe that my perspective as a financial professional and representative of a significant shareholder on the Board would provide the Board with practical insight and guidance in considering the Company's strategic alternatives,” said Okumas in a March 23 letter to the Bisys management. Bisys, which provides back-office securities and insurance services for hundreds of banks and credit unions, reported a 36% decline in net income for its fiscal second quarter ended December 31, mostly as a result of its ongoing securities litigation. In October, Bisys agreed to pay shareholders $66 million to settle civil fraud claims over the misstatement of earnings, and in September the company agreed to pay $21 to the Securities and Exchange Commission to settle fraud charges that it made illegal kickbacks to brokers that were recommending its mutual funds to customers.

ST. MARY’S, Fla.– Two sisters were arrested and charged with depositing fraudulent payroll checks in three different branches of United First FCU. The two, identified as Tiffany Barnett and Sunny Lee Barnett, were arrested after they entered the credit union’s Wal-Mart branch and attempted to cash more phony checks, police said. But credit union employees detained the two suspects until police arrived and arrested them.

PENSACOLA, Fla. – PenAir FCU said yesterday it has signed a five-year processing agreement with PSCU Financial Services. The $740 million credit union will convert 16,000 credit card accounts from an in-house program to the CreditAbility platform in August.CreditAbility is a full-service offering that includes 24/7 support from PSCU Financial Services’ awarding-winning Contact Centers and reduced exposure to fraud through the use of advanced predictive technology that evaluates each credit/debit transaction as it is taking place so that fraud can be detected and prevented.

WEST POINT, Va. – BayLands FCU said yesterday it has implemented Hyland Software’s OnBase enterprise content management suite at its three branches. The $70 million credit union has integrated OnBase with Harland Financial Solution’s UltraData core processing system and Touche Analyzer member relationship management tool.

MANITOWOC, Wis.– Shoreline CU said it has hired La Macchia Group LLC to design and build a new headquarters for the $70 million credit union. Construction began recently and will be completed later this year. La Macchia Group is based in Milwaukee.

PORTLAND, Mich. – Portland FCU broke ground on a project to build a new administrative offices. The new building will serve as the headquarters for the $175 million credit union. The facility will be a two-story, 28,000 square-foot building with five drive-thru lanes and an ATM. Completion is slated for next March. Clark Construction will build the project. The credit union plans to sell its 40-year-old headquarters building.

MONTPELIER, Vt. – Members of Vermont State Employees CU voted down a proposal to change the name of the state’s second largest credit union to Veristate CU, the second time members rejected a name change. Almost 11,000 of the $375 million credit union’s 38,000 eligible members cast a vote, with the name-change, which required a two-thirds majority, losing by a 52% to 48% margin. Members also voted against a name change in 2001, when only those voting in person were allowed to cast a ballot. Since then the credit union has changed its bylaws to allow mail-in balloting. Last month, members of University of Iowa Community CU also voted to reject a name-change, just hours before it was scheduled to take effect. In both cases, Weber Marketing Group had developed the proposed new names.

WASHINGTON – The House Financial Services Committee turned away a proposal yesterday to have the 12 Federal Home Loan Banks, known as ‘Fhlubbies’ distribute as much as $500 million a year in affordable housing funds collected from Fannie Mae and Freddie Mac under a pending reform of the secondary mortgage market. Rep. Spencer Bachus, the ranking Republican on the committee, made the suggestion because he and other Republicans in Congress worry that the proposed affordable housing funds will be used by liberal-leaning housing advocates to further their agenda and they feel the FHLBs, which already distribute $100 million a year in affordable housing money, would be a better judge of funding. Some Republican lawmakers likened the proposed fund to a new tax on even robbery. But Barney Frank, the chairman of the committee who developed the affordable housing proposal, said the idea has yet to be explored, so he convinced Bachus to withdraw the proposal until it could be reviewed in hearings. The proposal was one of several debated yesterday during the drafting, or mark-up, of a bill to set a new regulatory scheme over the secondary mortgage market and its main players, Fannie, Freddie and the FHLBs. The mark-up is scheduled to be completed today, as Congress adjourns for its Easter Recess.

SAN DIEGO – CUSO Financial Services LP, which provides broker-dealer services for more than 100 credit unions, announced yesterday it paid out $4 million of its $6 million net for 2006 to its credit union partners as a partnership dividend. The 10-year-old broker-dealer for credit unions reported revenues of $47 million in 2006 and net income of $6 million. Credit unions are limited partners in the general partnership.

ATLANTA – In a deal that will shrink the number of check printers again, shareholders of John H. Harland Co. approved the takeover of the third largest check printer by M&F Worldwide, the company controlled by corporate raider Ron Perelman, which bought Clarke American check printers in 2005. The deal, for $52.75 a share, or a total of $1.7 billion, will eliminate yet another competitor from the market, following Harland’s 2005 acquisition of Liberty, and have the combined Harland/Clarke American operations exceed Deluxe Corp. as the nation’s largest check printer. The combination of the two is still subject to approval by federal regulators who are examining the deal for antitrust implications. The takeover of Harland, one of the most popular outsourcer for credit unions, follows closely recent deals for such credit union outsourcers as Open Solutions, Digital Insight, Corillian and PHH Corp.

CHATSWORTH, Calif. – Teleses Community CU announced yesterday it has agreed to acquire Autoland, which provides car-buying services for more than 300 credit unions in California, Oregon and Washington. Earlier this year, Telesis acquired sole ownership of AutoSeekers, a used car broker, after buying out its partner, California Bear CU. The newly formed operation will retain the name Autoland, created in 1971 as the first car-buying service for credit unions.

NEWARK, N.J. – Three weeks into a hostile takeover battle for Continental FCU, few of the members at the embattled credit union’s Newark International Airport outpost even know of the offer by Wings Financial FCU to acquire the credit union. And almost none of the four dozen members interviewed here this week by The Credit Union Journal know the details of the credit union movement’s first hostile takeover battle. “I haven’t heard about it, and I’m here all the time,” said Connie Hellake, one Continental member, who said the credit union is “just like any other bank. You bounce a check, they charge a fee; it’s no different.” None of the members interviewed were aware of the $200 offer from Wings that the pursuing credit union has published on a special website and explained in offer sheets handed out at Newark and at Continental FCU outposts in Houston, Tempe, Ariz., and El Segundo, Calif. “I haven’t seen anything and I go there nearly every day,” said Carlos Aquino, a worker in Continental’s air postal service at Newark. Several members said they participated in member surveys over the telephone in recent days but were never asked about the Wings offer. Tom Glatt, president of Continental FCU, said yesterday the credit union has sought to provide information on the Wings pursuit, posting details on its website, in the member newsletter and on a special website. “We’ve kept our members informed all along,” said Glatt. Glatt said he visited Continental branches in Houston last week and spoke with as many as 300 members, and plans to repeat the effort at his other branches. Still, despite broad coverage in the credit union press and the mainstream media, fewer than 75 members turned out for Continental FCU’s annual meeting Tuesday night, where top officials explained the board’s rejection of the latest offer from Wings Financial.

TALLAHASSEE, Fla. – Credit Union 24, the regional credit union EFT network, said yesterday it has contracted for a comprehensive research of credit union participants. The credit union-owned network wants to gain a better understanding of credit unions’ perceptions and preferences regarding network and transactions processing services. Network officials will discuss the results at its April 25 Executive Summit in Orlando.

BETHPAGE, N.Y. – Bethpage FCU announced yesterday it has hired Gila Group, out of Austin, Texas, to collect on delinquent auto loans. Gila Group will handle all repossessions for the $2.4 billion credit union. Collections agents will act as de facto employees of the credit union giant, said Bethpage.