WILMINGTON, Del. – The FBI is probing the theft of information on hundreds of accounts of credit union and bank customers they believe came from a local drug store. Credit unions in Delaware and Pennsylvania have shut dozens of accounts and reissued cards for members they believe may have shopped at the local Rite Aid, authorities said yesterday. Members at DPL FCU, Delaware First FCU, Franklin Mint FCU, as well as Wachovia, Wilmington Trust, PNC, Commerce Bank and Delaware National Bank, have bene affected by the new breach. Customers at the banks and credit unions said they noticed fraudulent activity showing up on their accounts at the end of January, with cash withdrawals being made from area ATMs in WaWa convenience stores.

WASHINGTON – The build-up of credit union reserves to an all-time high poses several questions for credit union management and somewhat of a dilemma for the congressional lobby, which is lobbying to ease current capital requirements. CUNA reported earlier this week that net worth had grown to 11.4% at year-end, a new high. To CUNA economist Bill Hampel, the record amount of capital reserves is too high. “You don’t need to have that much net worth,” said Hampel. “It means the credit union is taking too much out of its members.” The new standard could cause problems politically too, coming as it does when credit unions are asking Congress to reform their minimum capital rules and replace them with a risk-based system. “This just illustrates there isn’t any need for capital reform for credit unions. They are holding, on their own, lots of capital,” said Keith Leggett, senior economist at the American Bankers Association, who said the bankers will oppose the impending credit union regulatory relief bill, known as CURIA. The ABA, he said, supports a risk-based capital system for credit unions, but not the one proposed in last year’s version of CURIA, which lowered the minimum capital to 5% from 7%. Such a large build up of capital in the credit union systems indicates that a 7% minimum leverage ratio of 7% should be adequate, Leggett told The Credit Union Journal.

WASHINGTON – CDCU champion Martin Eakes joined civil rights leaders Jesse Jackson and the head of the NAACP before Congress yesterday to call on lawmakers to pass national standards to protect subprime mortgage borrowers from predatory lending practices. Eakes, who grew up in predominantly African-American south Greensboro, N.C., told members of the Senate Banking Committee that millions of Americans will default on subprime mortgages they purchased over the last few years–a disproportionate number of them African-Americans, Hispanics or other minorities. This trend “threatens to deprive more African-American families of their homes than did Hurricane Katrina, but it will be a silent threat,” said the founder of Self Help CU, the largest and most influential community development credit union in the country, who was appearing on behalf of the credit union’s affiliate Center for Responsible Lending. Jackson, the head of Rainbow/PUSH Coalition, said “people of color are economically exploited” by predatory mortgages sold by many subprime lenders, citing statistics showing that half of African-Americans and 46% of Hispanics, but only 17% of white borrowers are in homes bought with subprime mortgages. The hearing, the panel’s second in two weeks over lending practices, made it clear that new chairman Chris Dodd, a Democratic candidate for president, will use the committee as a focal point on populist issues, like predatory lending, credit card abuse, and home foreclosures. Eakes, who helped write the anti-predatory lending bill in North Carolina, called on lawmakers to draft a national law that will bar some predatory practices and require lenders and brokers to consider a borrower’s ability to repay the loan, something they have lost their motive to do because lenders now sell most of their mortgages on the secondary market and no longer hold them to maturity.

FORT WORTH – Texas Business Lenders Group, a CUSO owned by six Texas credit unions, said yesterday it has signed with Cypress Software System to automate its business lending program for members credit unions with its BixMark platform.

ATLANTA – John H. Harland Co. said three more credit unions have signed to implement the company’s UltraData Enterprise core processing system. Harland delivers UltraData in both in-house and outsourced environments to more than 600 credit unions. The new credit union clients are: Employees CU, Dallas, Ledge Light FCU, Groton, CT. and Louisiana USA FCU, Baton Rouge.

JOHNSTON, Iowa – EFT Network SHAZAM announced yesterday it has signed with TriCipher to implement the company’s TACS multi-factor authentication platform for the standard for its 1,600 participating financial institutions, including about 500 credit unions. TriCipher will protect both institutions and members against online security threats and phishing attacks and will ensure that non single institution can access another institution’s database. As part of the platform, SHAZAM has integrated Computer Associates’ SiteMinder application into its authentication system, allowing credit unions and banks to manage their own set-up, access and control settings.

RESTON, Va. – Albert Lord, the chairman of student loan giant Sallie Mae, raised $185 million last Thursday and Friday with the sale of 400,000 Sallie Mae shares. The shares were sold at prices between $45.75 and $46.03, just before Monday’s news of proposed federal cuts in the student loan program pushed the share price down below $42. Lord, who led the privatization of the former government sponsored enterprise, sold the share to raise money for various business commitments, the company said in a statement. As a result of the sale, Lord owns about 1 million Sallie Mae Shares and options to acquire another 7.3 million shares, putting his financial stake in the company at over $500 million.

JACKSONVILLE, Fla. – Fidelity National Information Services, the provider of back-office services to credit unions that has undergone numerous restructurings over the last few years reported yesterday that fourth quarter earnings rose 15% to $75.1 million, or 39 cents a share, compared to the same period last year. However, fourth quarter results include last February’s consolidation with transaction processor Certegy, and the recent decoupling of the company from Fidelity National Title, the nation’s largest title insurer. The combination with Certegy helped push fourth quarter revenues up 56% to $1.1 billion. For the full year, FIS reported a 50% rise in revenues to $4.1 billion, and a 32% surge in net income to $259.1 million, or $1.37 a share. Because of the dilution caused by the Certegy merger that’s down from the $1.54 a share earned for 2005. FIS is a conglomeration of seven credit union and bank outsourcers.

SAN ANTONIO, Texas – Clarke American Checks, which is preparing to merge with John H. Harland Co., said it is closing its Charlotte, N.C., call center that employs 230 people. The facility is scheduled to be shut down in April. Clarke American’s parent M&F Worldwide is in the process of acquiring Harland and its check-printing business, which will make the combined companies the largest check printers in the U.S., exceeding Deluxe Corp.

BETHLEHEM, Pa. – Edentify, provider of a suite of identity protection tools, said yesterday it has acquired Zelcom Group, a privately held Schaumburg, Ill., provider of data analytic solutions. The deal adds Zelcom's advanced data analysis service to Edentify's portfolio of identity theft and fraud prevention products, IDAssess, IDScreen, and IDAlert. The data analysis service makes Edentify's Identity Quotient Index risk scoring technology more robust, further developing the company's products into cutting-edge identity fraud detection and prevention tools. The acquisition also enables Edentify to target Zelcom's customers, which includes top mortgage firms such as Aegis Mortgage of Houston. Financial terms of the acquisition were not disclosed.

SAN DIEGO – North Island Financial CU, in preparation for a new headquarters, sold its current home in Chula Vista for $27.4 million. The $1.3 billion credit union will vacate the 15-year-old office building over the next two years when it completes construction on a new headquarters. That facility, a six-story office building, is being built in nearby Kearny Mesa.

HERNDON, Va. – The National Automated Clearing House Association, or NACHA, announce dit has started assessing credit unions and banks a fee for all automated clearing house transactions, except ‘on-us’ transactions. NACHA is charging a fee of $0.0001 on all ACH transactions, as well as an annual charge of $42. Transaction fees will be assessed on all originated and received ACH credits and debits, including non-dollar transactions. The new fees will help pay for operations of the network, including maintenance and enforcement of NACHA operating rules, risk management programs, development of new rules, communications, marketing, research and data collection.

RALEIGH, N.C. – State Employees CU announced yesterday it is now offering members a variety of Vanguard mutual funds through credit union-owned XCU Capital Corp. The brokerage services will be offered by registered representatives of XCU Capital who are also salaried employees of the credit union. The services are being offered on a non-commission basis. XCU is a 20-year brokerage that was chartered by Xerox FCU and is now owned by 26 credit unions.

ONTARIO, Calif. – CO-Financial Services unveiled a new tool yesterday to help credit union monitor credit cards that have been flagged for potential fraud. The Compromised Card Activity report will help credit unions review activity for at risk card numbers identified through Visa CAMS or MasterCard Alerts. The report, which is available in a password-protected section of CO-OP's Web site (www.co-opfs.org), is updated daily.

MADISON, Wis. – CUNA Mutual Group said its losses due to reported credit card fraud increased about 11% last year to $98.7 million. The increase was much smaller than the 56% surge to $89 million the credit union insurer reported in 2005, and was much less than the $120 million projected last winter when numerous cases of data breaches were popping up around the country. The company said they believe security measures instituted in the second half of last year helped reduce some of the losses. Still, credit unions, which are reporting fewer incidents because of higher deductibles and premiums, probably realized at least as many losses, as much as $100 million that were not reimbursed by their insurer.

WASHINGTON – A group of consumer advocacies, including the Center for Responsible Lending, an affiliate of the leading community development credit union Self Help CU, called on the Department of Defense yesterday to reject requests from the credit union and banking lobbies for broad exemptions from the new 36% cap on all consumer loans to military personnel. In a comment letter filed with the Pentagon, which is writing rules for the new anti-predatory lending law, the group said that carving out exemptions for credit unions and banks on voluntary products and services and exempting fees from the calculation of the rate would undermine the intent of the new law. “The 36% cap on interest rates leaves plenty of room for banks and credit unions to do business responsibly,” said Col. Michael Hayden, deputy director of government relations for the Military Officers Association of America. The request, coming after CUNA asked for a variety of loopholes for products and services, threatens to broaden the rift between credit unions and consumer groups, like the Consumer Federation of America and Consumers Union, which fought the credit union-backed effort for a bankruptcy reform bill.

KENSINGTON, Md. – Lafayette FCU has filed a multi-million dollar lawsuit against its former CEO and his son for their alleged role in the credit union’s ill-fated conversion to mutual savings bank, the latest in a series of moves aimed at exacting retribution for the conversion debacle. In a suit filed in state court in Maryland, the credit union attorneys claim former CEO Bill Brooks violated the terms of a 2004 separation agreement in which he agreed not to speak or write negatively about the credit union, its officers or directors; and also claim Brooks and his son, Bill Brooks Jr., were responsible for two Lafayette member websites that successfully fought the conversion to banks. The sites allegedly published ‘false, defamatory and disparaging information’ about the credit union, its officers and directors, according to the suit, which asks for damages of $6 million from both men. The action comes a week after the credit union closed the checking account and cut off access to its ATMs for Scott Stiens, a leader of the conversion opponents, for his efforts to collect petition signatures at Lafayette branches for the recall of the board of directors. Earlier credit union attorneys threatened to sue The Credit Union Journal for its coverage of the special meeting of members where the 90-day ballot was culminated. The suit claims that Brooks Sr., who was well-known in the industry for his service on the NAFCU board, violated the ‘non-disparagement clause’ in his separation agreement and asked the court to order him to repay $314,000 in severance and pay $3 million in damages for the alleged harm to the credit union’s reputation and business prospects resulting from the failed conversion. The suit was filed by the credit union’s local law firm, of which Lafayette Chairman Arnold Roesnthal’s brother is a principal partner.

FORT WORTH, Texas – Texas Business Lenders Group, a CUSO owned by six Texas credit unions, said yesterday it has signed with Cypress Software System to automate its business lending program for members credit unions with its BixMark platform. The CUSO will provide a centralized small business lending system for its credit union participants at its Forth Worth headquarters. The participating credit unions are: Community Resource CU, Dallas Telco FCU, First Community CU, Firstmark CU, EECU, and United Heritage CU.

SAN DIMAS, Calif. – Financial Service Centers Cooperative said three of its credit union members have deployed Check 21 self-service kiosks produced by Ensenta. Ensenta’s Check 21 Express provides real-time automated image deposit review and adjustment tools and transmits the image to WesCorp FCU for processing. The credit unions are: Star One CU, L.A. FCU and California Center CU. Each of the kiosks is wired and includes a wireless broadband connection to support FSCC’s disaster recovery and business continuity plan.

KANSAS CITY, Mo. – K.C. Police CU announced yesterday it has signed with Lending Solutions to implement the company’s loan-by-phone and wen lending services. The $90 million credit union will plug into Lending Solutions’ National Loan Processing Center, the company call center that originates and processes consumer and mortgage loans.