MT. LAUREL, N.J. – PHH Corp., the mortgage bank that acquired CUNA Mutual Mortgage, reported yesterday that it expects to report a loss of $29 million for its fiscal year. PHH reported major declines across the board in its mortgage business last year, including an 14% drop in closings, an 21% decline in refinancings, a 11% fall in loans sold. The company, which acquired 100,000 residential mortgages as part of the CUNA Mutual deal, has been struggling with its financial reporting since its spin-off last year from Cendant Corp. The spin-off included Cendant’s fleet management business, as well as PHH Mortgage, one of the biggest mortgage banks in the country.

NEW YORK – Bisys announced yesterday that its Alternative Investment Services unit has signed with Markit Group Limited to provide independent pricing for complex over-the-counter financial derivatives. The deal, which will help financial institutions to determine the proper value of swaps, options and other popular derivatives, expands a relationship between the two companies in force since 2004. Derivatives have become increasingly popular among credit unions for hedging of long-term interest rate risk and other purposes.

DALLAS – Resource One CU said yesterday it has signed a new three-year contract with AT&T for networking and managed telecommunications services. AT&T will implement an MPLS-based Virtual Private Network, as well as Managed Internet Services at the credit union’s multiple locations, providing increased bandwith and always-available Internet, and establishing a convergent, Internet Protocol-based network. The VPN will allow the $200 million credit union to prioritize data for greater network efficiency. The increased bandwith will allow the credit union to adopt Voice over Internet Protocol technology.

GREELEY, Colo. – An employee for Colorado State CU was shot to death as she was leaving work Tuesday and police arrested and charged the wife of a Weld County Sheriff’s deputy with the shooting. The victim, identified as Heather Garraus, was the wife of a Greeley Police officer. The suspect in the shooting, identified as Shawna Nelson, a former police dispatcher and wife of a Weld County sheriff's office worker. Police would not speculate on a motive for the killing. Nelson was being held over night and is scheduled to be charged in the shooting this morning.

ALEXANDRIA, Va. – A ruling by NCUA that a director with financial interests in a credit union vendor was in violation of the agency’s conflict of interest rule forced the director to resign from the board. NCUA said in legal opinion to First Community FCU, that a director who owned the credit union’s indirect loan vendor and brokered insurance deals with the credit union was in violation of the agency’s rules. “He was getting money from every indirect loan that we did,” said Cheryl DeBoer, president of the $270 million credit union. The director, who DeBoer would not identify, resigned last May, just after NCUA issued its legal opinion. In its opinion, made public yesterday, NCUA said the purpose of the conflict of interest rule its to ensure that no officer or director of a federal credit union is influenced in his duties on behalf of the credit union by the potential for personal financial gain. The director, according to NCUA, not only owned interest in a company that provides indirect lending services for Parchmont, Mich., credit union, but also in a separate company that brokers insurance products to the credit union. The former director’s companies continue to do business with the credit union.

ROCHESTER, N.Y. – ESL FCU, the credit union giant that was once a savings and loan, announced yesterday it will pay members a $7 million Owners Dividend for 2006, the 11th straight year its paid an extraordinary dividend. The payout is the largest ever for the $2.9 billion credit union, founded in 1920 as a thrift for workers of Eastman Kodak, comparing to last year’s $6 million payout. Each member’s share of the Owners Dividend will be computed based on the total amount of interest (dividends) earned on savings and interest paid on loans last year. Funds will be deposited into the members’ accounts today. The credit union has paid out more than $50 million in Owners Dividends since 1995.

NEW ORLEANS – ASI FCU’s initiative to help rebuild the city’s upper Ninth Ward, flattened by Hurricane Katrina, received a $300,000 boost from NeighborWorks, the quasi-public housing foundation announced yesterday. The grant will help the $240 million CDCU provide new housing in the blighted St. Claude’s neighborhood of the city’s upper Ninth Ward, which was mostly destroyed by Hurricane Katrina. The NeighborWorks funds will be used by ASI’s fledgling community development corp., known as A Shared Initiative Inc., which acquired 10 condemned homes from the city of New Orleans that it plans to demolish and replace with 11 modular homes, according to Sarah Taylor, director of ASII. The credit union will then offer the neighborhood’s low-income low-interest mortgages to buy the properties. “Before Hurricane Katrina, we didn’t even consider housing a major need,” Taylor told The Credit Union Journal. “Since then, it’s exploded as a need, with all of the homes that have been destroyed and the increase in rents.” The project’s site is opposite the Musician’s Village, an affordable housing project being developed by famous New Orleans trumpeter Wynton Marsalis and bandleader Harry Connick Jr. with Habitat for Humanity. ASI’s efforts in the upper Ninth Ward’s St. Claude neighborhood got a boost last summer with a $100,000 grant from the National Federation of CDCUs to help it buy and renovate a community center, which will include a credit union branch. The neighborhood, one of the poorest in New Orleans, sustained the worst damage by Hurricane Katrina, sending thousands of its inhabitants fleeing to other towns and states. ASI itself lost 16,000 of its 90,000 members as a result of the flight.

RALEIGH, N.C. – State Employees CU said yesterday it has signed with Handshaw Inc. to implement the company’s Lumenix PI Suite of Internet-based learning programs for employees. The PI Suite includes Lumenix PI Developer, a learning content management system, and Lumenix PA Administrator, a learning management system to develop, deliver and manage e-learning. SECU purchased the systems to convert its paper-based testing program to an online format. Handshaw is based in nearby Charlotte, N.C.

LOUISVILLE, Ky. – L&N FCU, the city’s biggest credit union, said it has plans to open its first new branch in 10 years. The credit union has also signed with Wal-Mart to open two branches in Wal-Mart stores. The credit union has more than $400 million in assets and about 60,000 members.

BELLINGHAM, Wash. – Whatcom Education CU donated $10,200 to local non-profit organizations as part of its annual Social Responsibility program. Donations went to: Marianne’s House; Support Officer Community Care; Kulshan Community Land Trust; GRADS Teen Parent program; Lighthouse Mission Ministries; Whatcom Hispanic Organization; Bellingham Childcare & Learning Center; and to the National Alliance on Mental Illness The credit union’s Social Responsibility Committee oversees monetary donations and participation in sweat equity projects. The program supports education, health and community-related projects.

ST. LOUIS – A Canadian software has filed suit in federal court here against Fiserv and three client Federal Reserve Banks claiming that Fiserv is infringing on its patent for check fraud software. Advanced Software Design, of Richmond Hill, Ontario, claims that Fiserv’s FraudGuard Secure Seal Positive Pay check fraud software, which it has licensed to the Federal Reserve Banks of St. louis, Philadelphia and Atlanta, infringes on three of its patents. The suit, filed Jan. 22, seeks a court order preventing Fiserv from further infringement on the patents and for compensation.

GLASTONBURY, Ct. – The Carlyle Group and Providence Equity Partners announced yesterday they have completed the acquisition of Open Solutions Inc., taking the credit union outsourcer private. The two private equity funds paid $38 a share for OSI, making the total value of the deal, with the assumption of debt, $1.4 billion. As a result of the going private deal, OSI stock ceased trading on the Nasdaq yesterday and will be listed.

NORTH CANTON, Ohio – Diebold Inc., announced yesterday it has signed a worldwide licensing agreement to use four of DataTreasury Corp.’s patents involving the electronic processing of checks and other financial instruments. The patents include systems for the capture, transmission, encryption, storing and retrieval of electronic images generated form checks. Financial terms of the license were not disclosed. DataTreasury, a small privately owned Plano, Texas, company, has signed check image licenses with several major players in the industry, including JP Morgan Chase, Merrill Lynch, NetDeposit, RDM Corp. and Community Banking Systems.

DAYTON, Ohio – ATM maker NCR Corp., in the midst of a corporate restructuring, announced yesterday it has signed a five-year contract with Solectron Corp to manufacture its ATMs and self-checkout systems. As part of its recently announced global realignment, NCUA will transfer its manufacturing in the Americas to Solectron sites in Columbia, S.C., Guadalajara, Mexico and Jaguariuna, Brazil by the end of the year. Solectron has been producing and assembling data warehouse servers for NCR’s Teradata subsidiary for seven years. NCR is in the process of spinning off Teradata to shareholders, which is expected to occur in the third quarter of the year.

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. Data provided by the National Clearing House, which provides settlements for 608 financial institutions nationwide, show the number of items exchanged for 2006 more than tripled from the previous year to 670 million with a value of $626 billion. And images settled as a percent of total number of NCHA’s overall volume went from less than 1% in 2005 to 27% for 2006. Dallas-based NCHA also provides settlements for the Endpoint Exchange and Viewpointe networks. SVPCO-Electronic Clearing Services, which provides settlements for 17 of the world’s biggest banks, reported that the number of checks exchanged electronically in 2006 through its system surged 15-fold and the dollar value grew five-fold, compared to 2005. In comparison, the Federal Reserve reported just a 40.8% increase in dollar value for electronic image.

DENVER – First Data Corp. announced it has developed a personal computer-based point-of-sale payment system in partnership with Microsoft and Hewlette Packard. The First Data POS Value Exchange is designed to replace the cash register and traditional point-of-sale terminal with a PC-based system that will provide a complete store management system with greater data security, speed of transaction and more flexible payment options for customers. The system combines First Data’s processing capabilities with Microsoft’s point-of-sale software and retail sales hardware from HP. The system features a touch-screen display and ability to accept all forms of payment and provides retailers with the ability to track purchase behavior and identify marketing trends to control inventory and save time.

WASHINGTON – A life-sized mannequin wearing a raincoat and boots and toting an umbrella stands in the lobby of the federal office building at 1111 Constitution Ave. as a reminder of the day last summer when the IRS headquarters and the main branch of IR FCU were flooded by torrential rains that soaked the basement and shut down the branch. Two days of heavy rain in the Washington area last June 24th and 25th left as much as 25 feet of water in the basement and sub-basement at IRS headquarters, forcing a closure of the building until this week while furniture, equipment, carpeting and drywall were all replaced. Along with IRS headquarters, the branch was reopened yesterday, celebrating a new name for the $220 million credit union, FedChoice FCU, and a new TIP charter, allowing it to serve some 250,000 federal employees in the Washington corridor, stretching all the way to Baltimore and Philadelphia. “We are thrilled to be home again, this time on dry ground,” exclaimed Karen Sandor, executive vice president of FedChoice. “We’re looking for a flood, but this time we hope it will be a flood of new members.”

ATLANTA – M&F Worldwide, the holding company controlled by corporate raider Ron Perelman, first contacted John H. Harland about a combination of the number two and three check printers as early as last March, beginning a courtship that would culminate in a merger of the two companies, documents filed Friday with the Securities and Exchange Commission show. But preliminary offers by M&F, which had acquired check printer Clarke American the year before, were rebuffed as inadequate, the filings show. On October 25, the Harland board rejected a $50-a-share offer from M&F but told the company it would only enter into serious negotiations if a deal could be assured of being highly likely to pass regulatory and antitrust review. On Nov. 17 M&F raised its bid to $52.50 a share and agreed to pay a ‘reverse break-up fee’ of $40 million if the combination is not approved by antitrust regulators. M&F sweetened the offer on Nov. 22 to $52.75 a share and to raise the break-up fee to $52.5 million, while also agreeing to take on $12 million in retention bonuses to top Harland executives. The terms were enough to satisfy the Harland board, which unanimously approved the deal on Dec. 19.

CALABASAS, Calif. – Countrywide Financial CEO Angelo Mozilo reported that he exercised 23,000 options yesterday at $9.60 each, then sold the shares for $41.27 each, earning a quick $707,000. Mozilo, co-founder of what is now the world’s largest mortgage bank, has followed a profitable 2005 and 2006 with a very profitable first month of 2007, earning $11.3 million by exercising 1.2 million options at just $9.60, according to documents filed with the Securities and Exchange Commission. Mozilo earned more than $85 million on his options last year, and almost $120 million on options in 2005.

WALL STREET – Well-known speculator Mario Gabelli reported he raised his stake in Internet services provider Digital Insight over the past few weeks to 6.3%, buying up another 300,000 shares just under the $39-a-share price the company has agreed to be acquired for by Intuit. As a result, Gabelli, who has acquired more than two million Digital Insight shares, stands to earn more than $1.2 million on his Digital Insight stake when the deal is completed, according to a filing with the Securities and Exchange Commission. Digital Insight shares closed at $38.81 yesterday, just below the $39 acquisition price. The deal has obtained clearance from antitrust regulators at the Federal Trade Commission. Digital Insight is one of the best known outsourcers for credit unions and provides Internet banking services for about 700 credit unions.