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.

Having relocated recently, I've been looking about for a new credit union to join. High on my list of criteria in making a choice? Branches. Which is odd, since I visit my current CU about as frequently as Dick Cheney downloads Al Franken's radio show to his iPod.

Credit unions have been beefing up security on their side in an attempt to validate that it is, in fact the member who is trying to make an online transaction, not a criminal who has stolen the member's identity. Many have added a "challenge question" to the login process. Here are three reasons why credit unions need to change their focus from, "How do we know it's the member?" to "How does the member know it's us?"

I hesitate to re-enter the CU trade press frenzy surrounding CU-to-bank conversions. I've been criticized by both sides for some of my views. The Michigan Credit Union League (MCUL) has not changed its stance one iota on conversions. We think they should be permitted as long as they are done properly. We will continue to weigh in from time to time to make sure the process keeps getting better. That's what trade associations are supposed to do.

ALEXANDRIA, Va. – NCUA said Friday it barred two tellers from the credit union industry for thievery in separate cases. Heather Maier, a former teller at KYANG FCU, was convicted of stealing more than $50,000 from the Louisville, Ky., credit union and served six months in jail. Latrell Brousseau, a former teller at Louisiana Association of Educators FCU, in New Orleans, was also banned from the credit union industry.

VACAVILE, Calif. – Travis CU said it will award 20 $1,000 scholarships to deserving high school seniors who are member. The college grants are awarded as by the Mary Keith Duff Memorial Scholarship Fund, named for a long-time board member who passed away in December 2004. Students who live in the credit union’s 12-county field of membership and are not yet members may join the credit union and apply for a scholarship at the same time.

SALT LAKE CITY – Two men were arrested last week and charged with three armed robberies,–two at local credit unions–all three of which a robber fired a single shot into the ceiling to scare onlookers. William Harrison, 40, was arrested at a traffic stop and is accused of taking part in the three heist when around $19,000 was stolen. An alleged accomplice, Willie McNeil, was arrested earlier. The two were charged with the October hold-up at Mountain America CU in Layton, Chase Bank in Midvale in November, and a December heist at Cyprus CU.

DETROIT – Credit union activists were mourning last week’s passing of Ralph Bathanti, Sr., the founder of Motor City Co-Op CU, at the age of 98. Bathanti founded the now-$90 million credit union out of the living room in his Detroit home in 1946, finishing the first year with 175 members and $7,100 in assets. He served as its first treasurer/manager until his retirement in 1971 and was still serving on the credit union’s board of directors at the time of his death.

NEWPORT NEWS, Va. – 1st Advantage FCU and its President Casey Duplantier has pledged $10,500 over the next three years to support student research in the Virginia Institute of Marine Foundation’s Antarctica Long-Term Ecological Research project. The grant will allow on graduate student at VIMS and one at the College of William and Mary to conduct research at the U.S. Palmer Station. The students will study how changes in climate and sea ice affect the marine ecosystem of the west Antarctic Peninsula, where the area has warmed by almost 5 degrees since 1945, five times the global average.

ALBANY, N.Y. – The Federal Home Loan Bank of New York announced Friday that net income rose 25% for its fourth quarter, to $7 million, allowing the bank to boost its dividend for the quarter to a healthy to 7%. The cash dividend will be paid the New York Bank’s 291 members financial institutions, including 40 credit unions. The Bank paid a 6.25% dividend for its third quarter. The FHLBank of New York said it earned $285.2 million for the year, up 24% from 2005.

GLASTONBURY, Ct. – Open Solutions announced that its shareholders overwhelmingly approved the sale of the company to Carlyle Group and Providence Equity Partners, two leading private equity firms. The two private equity firms have agreed to pay $38 a share and the assumption of debt, a total of about $1.3 billion. The deal is expected to close on January 23.

OGDEN, Utah. – Alliance CU, one of the largest remaining state charters in Utah was approved to convert to a federal charter, NCUA reported Friday. The $85 million credit union joined an exodus that began almost four years ago when the state’s bankers heightened their attack on the tax-exemption and liberal field of membership rules for state charters. Alliance CU, now Alliance Community FCU, was granted a broad community charter encompassing three counties, according to NCUA. Since the onset of the bankers assault, virtually all of Utah’s state chartered credit unions have converted to federal charters, depriving the state of millions of dollars in sales tax revenues and supervisory fees a year.

TALLAHASSEE, Fla. – For the second time, NCUA last week certified a vote by members of Sunshine State CU to convert to a mutual savings bank. The federal regulator had cleared the conversion in 2004 but withdrew its approval after the departure of the CEO and other top officials left a lag in management. Officials of the $170 million credit union plan to eventually sell the credit union to the public in an initial public stock offering. The switch from credit union to bank is one of four in the works.

FRAMINGHAM, Mass. – A data breach at national retailer T.J. Maxx send hundreds of credit unions and banks across the country scurrying to recall and reissue hundreds of thousands of credit cards–even though no fraudulent activity had been detected yet. The recall meant that cardholders all over the country were unable to use targeted cards over the weekend. ‘Better safe than sorry,” is how one manager explained it of his credit unions plans to recall some 1,500 Visa credit/debit cards that had been flagged as compromised. T.J. Maxx., the parent of well-known discount chain Marshall’s, as well as Home Goods, HomeSense and A.J. Wright, said last week that someone had gained access to cards information on purchases at its stores between mid-2003 and December, compromising those accounts. The recall of cards was expected to costs credit unions hundreds of thousands of dollars at those institutions that took the precautionary measure, including ESL FCU, which announced a recall of 21,000 of its 285,000 cards; Summit FCU, which announced a recall of less than 5,000 cards; Alabama CU, which is recalling 2,900 cards; New York SEFCU; Cloverbelt CU, IC FCU and dozens of other credit unions.

RIVERSIDE, Calif. – Members of Raincross CU overwhelmingly voted last week to merge into nearby Visterra CU, even as city fathers threatened to end their ties with the credit union, originally sponsored to serve city employees. A handful of members turned out for a special meeting last Thursday where the $40 million credit union’s 476-57 vote to merge into the $440 million Visterra CU, formerly March Community CU, was ratified. In approving the merger, Raincress members rebuffed overtures from the Riverside City Council, which has been encouraging city employees and residents to patronize locally based businesses as part of their ‘Shop Riverside’ campaign. The council, which had encouraged city employees to join the 53-year-old local credit union, passed a resolution on Jan. 9 encouraging city residents and employees to use only Riverside-based credit unions. City council members had urged the credit union to combine instead with one of the city-based credit unions, including Altura CU, one of three other credit unions that considered merging with Raincross. Founded in 1954 as Riversde City Employees CU, Raincross, has just one office and has been losing members in recent years. The combination with Visterra CU, based in nearby Moreno Valley, will give members access to four branches and more services.

KENSINGTON, Md. – Angry members of Lafayette FCU said they have collected enough member signatures on a petition to force a vote on recall of the entire board of directors, which was forced last week to withdraw its bid to convert to a savings bank. Scott Stiens, who helped lead the fight against the bank quest, said member support for the board recall has grown in the days since the credit union announced it was withdrawing its application to convert charters, helping them to easily exceed the 750 signatures required for a special meeting. “We want to make sure we have more because we know they’re going to challenge some of them,” Stiens told The Credit Union Journal, of the Lafayette management and board who are fighting for their survival. Lafayette bylaws require the board to call a special meeting within 30 days of receiving a request by 750 members or more. Stiens said members angry over the failed bank conversion plan to field their own slate for the board so that they could immediately be seated if the current board is ousted at a special meeting. In one recent case, directors at DFCU Financial skirted a special vote on their recall by claiming their ouster would leave the credit union critically without leadership after that credit union’s ill-fated conversion to bank. That ploy has succeeded in holding off angry members of that $2 billion credit union through challenges in both the federal and state courts, so far. Stiens also said Lafayette members would insist that the special meeting be held in a location convenient for members, rather the remote site where the special meeting culminating the vote to convert was held.

ATLANTA – The Federal Reserve Bank of Atlanta said yesterday it has appointed Wendell ‘Bucky’ Sebastian, the well-known president of GTE FCU in Tampa, to the board of its Jacksonville branch Sebastian has served as president and CEO of the credit union for most of the time since 1989, and served as general counsel to NCUA during the Ed Callahan years, then helped Callahan found credit union consultant Callahan & Associates. His term on the local Fed board runs till 2009.

MOUNTAIN VIEW, Calif. – Intuit Inc. said yesterday that the Federal Trade Commission’s 30-day waiting period for its acquisition of Digital Insight under the Hart-Scott Rodino Antitrust Act had expired, basically clearing the deal for completion. Shareholders of Digital Insight will vote on the deal at a special meeting Feb. 6. Intuit has agreed to acquire Digital Insight, the provider of Internet banking services for more than 700 credit unions, for $39 a share, or about $1.35 billion.

RESTON, Va. – Student loan giant Sallie Mae reported yesterday that ‘core earnings,’ which measures the company’s operations, rose 13% for the fourth quarter to $326 million, while the company’s student loan portfolio soared to a new high of $142 billion at year end. But interest rate swings continued to whipsaw the company’s GAAP earnings, as major declines in the market value of the company’s huge hedging portfolio pushed down fourth-quarter earnings by 99% to just $18 million, or two cents a share, compared to $431 million, or 96 cents a share, for the fourth quarter last year. The hedging losses, $245 million for the fourth quarter and $339 million for the year, pushed down fiscal year earnings by 14% to $1.2 billion. The compares to hedging gains of $70 million for last year’s fourth quarter and $247 million for fiscal 2005. The company, now the largest originator of student loans, said it originated $23.4 billion in student loans last year and bought $34 billion in student loans, pushing up its loan portfolio by 16% for the year.

GLENDALE, Calif. – California CU announced the third round of its annual college scholarship program yesterday, for which it will award $1,000 to 35 students. The scholarships are open to any graduating high school senior in Los Angeles County or any Los Angeles County student transferring to a four-year college. Students do not need to be members of the credit union.