WATERBURY, Vt. – State officials reported yesterday that a database containing Social Security numbers and account information for 70,000 people–most of them members of New England FCU–was hacked, exposing the individuals to potential fraud on their credit cards or accounts. The state’s largest credit union provided information for 58,800 of its members to Vermont’s Department of Human Services for the purpose of helping collect child support debt. The breach comes a few weeks after national retailer TX Maxx disclosed that its database had been hacked into and exposed hundreds of thousands of cards accounts at dozens of credit unions and banks to potential fraud. It also the thrid time in a month that Vermont officials have conceded a breach in their data security at a state agency. Officials of the $500 million Williston-based credit union said they will do everything they can to protect the affected accounts.

COSTA MESA, Calif. – Credit bureau Experian announced yesterday that it is now offering mobile credit checks for businesses. Experian said its mobile application, called BizGo, will provide instant access to a variety of databases, including its credit information for more than 19 million businesses, allowing companies to verify credit information on a company from a web-enabled cell phone, PDA or other hand-held device. Experian was spun-off from GUS plc. last year and is now an independent company listed on the London Stock Exchange.

SANTA ANA, Calif. – Orange County Teachers FCU joined city fathers and alumni of Cal State Fullerton College of Education in honoring the faculty, staff and alumni to commemorate the July 2004 founding of the college with a ‘Founders Wall’. The credit union giant contributed $25,000 of the $53,000 fundraising campaign. 531 individuals contributed $100 each to have their names mounted on the ceremonial wall. Of the $53,000 raised for the event, $50,000 will go to an endowment fund that will provide annual scholarships.

NORTH CHARLESTON, S.C. – South Carolina FCU announced yesterday it is launching a business services division for small businesses. The $1 billion credit union will offer a full range of services, including dividend-bearing checking accounts, business loans and business credit and debit cards. In addition, certain tellers at the credit union’s 23 branches will provide services tailored for business members. The expansion of business services is a significant step for the 70-year-old credit union that recently re-branded itself for ‘Life Simplified.’

LANCASTER, S.C. – Founders FCU announced yesterday it has expended its footprint in North Carolina with the acquisition of GT&R N.C. Employees FCU. Founded in 1971 as General Tire & Rubber North Carolina FCU, the Charlotte, N.C., credit union has about $20 million in assets and about 2,000 members. The merger will give the smaller credit union access to the 21 branches and three service centers in South Carolina and North Carolina operated by Founders, which claims $1.2 million in assets and almost 150,000 members.

WASHINGTON – Republican lawmakers are balking at a new proposal on the much-debated bill to reform oversight of the secondary mortgage market, particularly a provision to collect as much as $700 million a year from Fannie Mae and Freddie Mac to fund affordable housing projects by credit unions, banks and community development corporations. Alabama Rep. Spencer Bachus, the ranking Republican on the Housing Financial Services Committee, told new committee chairman Barney Frank of Massachusetts in a letter last week that he and many Republicans on the panel oppose the affordable housing bid because they see it as “a tax on lower and middle class homeowners to finance a government housing program.” Frank has said repeatedly he sees the fund as an important way to increase government funding for affordable housing and considers it a critical part of the bill. In a slight nod to the opponents, Frank has changed the funding formula in the draft version of the bill from a percentage of the net income of Fannie and Freddie to a sum based on the number of mortgages purchased by the two entities. The third government sponsored housing enterprise that will be included in the new regulatory structure, the Federal Home Loan banks, already provide 10% of their annual earnings in affordable housing funds.

WASHINGTON – Leading members of the House Financial Services Committee introduced a bill yesterday that would bar commercial firms like Wal-Mart Stores from entering into banking through back-door banks like industrial loan companies. The bill, co-sponsored by Democrat Barney Frank, new chairman of the financial services panel, and Republican Paul Gilmor, would bar a company from owning an ILC unless at least 85% of its business is already in financial services. Introduction of the bill, which was introduced in the final months of the last Congress, comes just two days before the FDIC is scheduled to debate whether to renew its moratorium on new ILCs, including Wal-Mart’s. Wal-Mart insists he has no plans to replace the 1,300 credit unions and bank branches in its stores with its own branches, but only wants the bank charter to allow it process the $2 billion a day in retail transactions conducted at its stores. Meantime, the retail giant has accelerated its push into financial services, receiving approval from state regulators earlier this month to offer ATM services in 31 Wal-Mart and Sam’s Club stores in Minnesota, and from Mexican regulators to open a bank south of the border, Banco Wal-Mart de México Adelante.

NEW YORK – Brokerage giant Merrill Lynch announced yesterday it has agreed to acquire First Republic Bank of San Francisco for $1.8 billion in cash and stock. The deal gives the biggest U.S. broker the ability to access to $10.7 billion of assets held by First Republic, which provides investment services including trust banking and luxury home lending. Merrill, which also owns a state chartered industrial loan company through which it accepts retail deposits, would not be affected by pending federal legislation to bar non-financial companies from the banking business. First Republic has 43 offices located in key metropolitan markets across the United States, including Silicon Valley, Los Angeles, Las Vegas, Portland, Seattle, Boston, Greenwich, Conn., and New York City and has $7.9 billion in deposits and $7.6 billion in loans.

WASHINGTON – Representatives of CUNA and NAFCU, meeting yesterday to discuss ongoing drafting of CURIA, had already agreed to leave out a provision eliminated at the last minute from last year’s regulatory relief bill which would have allowed privately insured credit unions to join the Federal Home Loan Bank System. The credit union lobby will try again to pass provisions not included in the regulatory relief bill, but not the FHLB bid, sources told The Credit Union Journal. The provision was a major priority of then-House Financial Services Committee Chairman Michael Oxley, who has since retired from Congress. The Ohio Republican was convinced of its merits by ASI, the lone surviving private provider of deposit insurance for credit unions, which is located in Dublin, Ohio, near Oxley’s district. But the measure was ardently opposed by several CURIA champions, including its chief sponsor Pennsylvania Democrat Paul Kanjorski, who invoked the crisis surrounding the failure of private deposit insurers for thrifts in Maryland, and for credit unions in Rhode Island, more than a decade ago.

WALL STREET – The National Federation of CDCUs said yesterday it is being forced by the Post-Sept. 11 reconstruction of Lower Manhattan to vacate its headquarters in the high-rent neighborhood of the New York Stock Exchange and JP Morgan, in the heart the city’s financial district. The trade association for low-income credit unions moved here 15 years ago when the owner Larry Silverstein–who also owned the World Trade Center buildings--offered below-market rents to dozens of non-profits in exchange for tax-breaks offered by the city after the stock market crash of 1987 caused high office vacancies. But the building, with its view of the East River, is now being renovated into high-end residential condominiums, forcing the Federation’s move to a new home four blocks north, at 116 John St., near Fulton St. The Federation, which represents about 220 CDCUs, will occupy the entire 33rd floor of the new site. The move will take place on February 16, but the Federation will retain its main phone number and email addresses.

EL PASO, Texas – The National CU Foundation and Fannie Mae announced matching $25,000 grants yesterday to help fund a savings campaigned targeted towards the burgeoning Hispanic population. Almost two dozen credit unions focusing on Hispanic communities will participate in ‘Hispanic America Saves,’ an affiliate of the Consumer Federation of America’s ‘America Saves’ campaign. It will be modeled after ‘El Paso Saves,’ a successful program developed two years ago by the El Paso Affordable CUSO, owned by eight area credit unions, that focuses on attracting new Hispanic members, enlisting the unbanked in mainline financial services and providing financial education. Each of the participating credit unions will be challenged to open at least 1,000 savings accounts for Hispanic households. Other participating credit unions include: Arrowhead CU, El Futuro FCU, Latino Community CU, OAS FCU, Self Help CU, West Texas CU, Border FCU. The National Federation of CDCUs will also participate in the savings campaign.

Best quote of a quote: "The best way to sum up the opinions (was) made by a college professor of mine: 'Great companies are built. Not bought.'"

FLORISSANT, Mo. - * John Chappel was arrested minutes after attempting to rob his own CU-First Community CU, here-by threatening to start a fire if his demands were not met. His first mistake was robbing his own CU, where the head teller knew him by name. His second mistake was in walking into an office rather than to a teller, as it meant someone else had to be called in to bring cash to him, which allowed time to inform the rest of the employees and the police. His third mistake was in asking for still more cash when a bag of bait money was given to him, thereby giving police more time to arrive on the scene. When he attempted to leave, the police were waiting for him and he calmly turned himself over to them.

SAN DIEGO - Linsco Private Ledger Corp., LPL Financial Services here has acquired the Charlotte, N.C. based UVEST Financial Services Group Inc., creating the nation's largest provider of third-party investment services.

TNB Card Services, Dallas, named John McMenamin vice president, regional sales executive.

CDCUs Now Have BALANCE

WASHINGTON - Four years after passage of Check 21, the federal law that makes electronic images the same as legal tender has apparently come of age, with conversion of paper-to-electronic transactions exploding in the latter part of 2006.

ONE: The credit union-to-bank conversion tide is stemmed as more members step up to oppose and even stop conversions (see related story, this page).

Events

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