MILFORD, CT. – GE Employees FCU has filed suit against a San Francisco mortgage broker claiming that she improperly used $400,000 from three mortgages she was supposed to sell, instead of selling them on the secondary market as promised and remitting the proceeds. The credit union said says it contracted with Lorraine Legg and two companies she runs to sell some mortgage loans it held in the secondary market but that Legg stole the mortgages and used the funds to benefit herself and two of her companies. The credit union is asking for $7 million in damages.

DALLAS – TNB Card Services announced yesterday it has acquired four more credit union cards portfolios, from Northeast Panhandle Teachers FCU, Southern Lakes CU, American FCU and Saugus FCU. The latest deals make a total of 21 portfolios acquired from credit unions in 2006. TNB Card Services is a wholly owned unit of Town North National Bank.

LAUREL, Md. – Tower FCU said yesterday it has implemented Dynamic Card Solutions’ CardWizard instant card issuing. Tower has implemented CardWizard in all of its branches and trained 75 representatives on the system. The system allows the $1.5 billion credit union to issue or reissue new cards within minutes, or overnight to members anywhere in the world.

ALEXANDRIA, Va. – Agriculture FCU said yesterday it has contracted with Lending Solutions Inc. to outsource its member service support. Also signing for LSI’s new Member Service solution is Members CU, in Cleburne, Texas. The Member Service solution combines LSI’s advanced technology with highly trained member service specialists to process almost every member service function for a credit union.

OLYMPIA, Wash. – The Department of Financial Institutions approved special no interest/no dividend accounts for members lacking a Taxpayer Identification or Social Security number. Such accounts are being provided at numerous credit unions for undocumented or unbanked immigrants. In approving the accounts, the CU Division of the DFI. NCUA has also approved similar accounts for federally chartered credit unions, and at least one credit union, Desert Schools FCU, has begun offering them recently.

PALO ALTO, Calif. – Addison Avenue FCU, the credit union for Hewlett-Packard companies, said yesterday that it has hired J. Benson Porter, an executive at Washington Mutual, as its new president and CEO. Porter, formerly the chief administrative officer and head of corporate affairs at WaMu, will succeed Steve Lumm, who is retiring as head of the $1.9 billion credit union at the end of the month. Porter has more than 20 years in financial services and currently sits on the Fannie Mae Housing Impact Advisory Council and the board of the Federal Home Loan Bank of San Francisco.

WASHINGTON – The Internal Revenue Service has begun setting more formal guidelines on taxable practices for state chartered credit unions under its Unrelated Business Income and credit unions are protesting. In Technical Action Memoranda sent to credit unions in Alabama and Connecticut in recent days, the IRS ruled that net income earned on a variety of insurance products, including credit life disability, health, dental, as well as on annuities and on ATM fees earned from non-members is taxable under UBIT, according to CUNA, which has reviewed the long-awaited rulings. But CUNA, which has been negotiating on UBIT guidelines for decades, believes the IRS is misguided and that those listed activities should be non-taxable as essential parts of the delivery of services to its members, according to CUNA General Counsel Eric Richard, who predicted a legal challenge to the rulings. “We believe we are going to have to file litigation,” Richard told The Credit Union Journal yesterday. More than a dozen credit unions in the two states have received notices for payment of taxes dating back as far as 1999. Federally chartered credit unions, defined as instrumentalities of the federal government, do not pay UBIT.

ALEXANDRIA, Va. – NCUA said it approved a charter last month for a new credit union in Fort Wayne, Ind. The Union Baptist Church FCU will serve about 225 members of the Fort Wayne parish. The credit union was only the eighth chartered last year, one of the leanest years for new credit unions since the signing of the Federal CU Act. There were nine new credit unions chartered in 2005, and 12 in 2004.

WASHINGTON – Army officers joined medical personnel and family members of stricken soldiers yesterday to dedicate a new Oncology Palliative Care suite at Walter Reed Army Medical Center, which was built by the Pentagon FCU Foundation. The center will provide short-term housing for families of soldiers being treated for cancer at the U.S. military’s preeminent medical facility. Despite plans to close the medical facility and merge it into nearby Bethesda Naval Hospital in the next five years, officials with the credit union foundation and Walter Reed acted to build the new hospital wing now. “We wouldn’t want to sit around and do nothing just because the hospital is going to move,” said Rocky Mitchell, president of the credit union foundation, which provided $400,000 for the hospice unit. The funding was raised by individual and corporate donations, as well as the Foundation’s annual ‘Night of Heroes’ gala and ‘Military Heroes’ golf tournament.

WASHINGTON - The credit union community has pledged $2 million to help build and maintain a memorial to the Rev. Martin Luther King that is being built in Washington.

ALEXANDRIA, Va. - Can a $1.2-million all-volunteer-run credit union serving low- income members be likened to Navy FCU, the world's larger credit union?

NEW PHILADELPHIA, Pa. - The former CEO of Eastern CU was sentenced last week to 13 months in prison and ordered to pay $98,200 in restitution for stealing from the credit union. Dawn Smith-Wisnieski pleaded guilty to embezzling $106,000 from the $4.5-million credit union between 2003 and 2005. Smith-Wisnieski embezzled the funds by making 10 phony loans in six names. The criminal investigation resulted from her confession in her personal bankruptcy case that she embezzled the money. No member funds were compromised.

MIRAMAR, Fla. - The information technology team at Eastern Financial Florida CU spends more and more money every year-nearly 20% of its 2006 budget-protecting member information.

ONTARIO, Calif. - Consolidation to a single credit union switch is one step closer with CO-OP Financial Services' purchase of a controlling interest in shared branching entity CU Service Corp (CUSC), Atlanta.

ORANGE, Calif. - Video killed the telephone at a $50-million credit union here, and now bridges the communication gap between employees at remote branches-and a board member clear across the country.

Events

WASHINGTON - Maybe the third time's the charm with CURIA.

AUSTIN, Texas - Velocity CU has filed suit in state court claiming a $10 million retirement plan it established for top executives will not pay out as promised.

S1 Rebrands 3 Divisions

Throughout 2007, the Credit Union Journal is profiling the credit unions of each U.S. state and D.C. Rather than appear in alphabetical order, the states are being featured in the order they became states.