INDIANAPOLIS – The Federal Home Loan Bank of Indianapolis said yesterday it is lifting its dividend for the fourth quarter to 5.0% for its B-1 stock and 4.0% for its B-2 stock. That compares to payouts of 4.75% and 3.80%, respectively, for the fourth quarter in 2006; and to 4.25% and 3.4%, respectively, for the third quarter in 2006. The dividend will be paid on January 23. The Indianapolis Bank has 440 members, including 94 credit unions.

HERSHEY, Pa. – Hershey FCU said it is building a third branch here, which will also serve as its new corporate headquarters. The $35 million credit union currently has its main office on East Chocolate Ave., in Derry Township. The new branch/main office is scheduled to open in July. The branch will be its third.

PORTSMOUTH, N.H. – Service CU said it open a new full-service branch in the local Wal-Mart, the fourth of seven branches planned for Wal-Mart stores in New Hampshire. The $1 billion credit union already operates branches in Wal-Marts in Newington, Salem and Manchester, and plans to open additional facilities in Wal-Marts in Rochester, Hooksett and Hillsborough. Service CU serves anyone who lives or works in New Hampshire (excluding Coos County), four towns on Cape Cod, Mass., and all branches of the U.S. military and Department of Defense employees and their families.

PEMBROKE PINES, Fla. – Power Financial CU announced yesterday it has completed its merger with Pan Am Horizons FCU, creating a credit union with $500 million in assets serving 60,000 members. Henry Prior, president and CEO of Power Financial, will commemorate the merger next Tuesday by unearthing a time capsule that was buried 25 years ago at Pan Am Horizons offices, and he will be accompanied by Roscoe Warren, mayor of the city of Homestead, other elected officials and Florida CU League President Guy Hood. The newly combined credit unions, to be known as Power Financial CU, will bury a new time capsule to be opened in 25 years.

PHOENIX – Desert Schools FCU said yesterday it has terminated its credit card servicing agreement with Bank of America’s MBNA and moved the portfolio to U.S. Bancorp’s Elan Financial Services. A credit union official attributed to change to BofA’s change of the MBNA name to FIA Card Services, but also to the fact that Elan offered the $2.7 billion credit union a better package of services. The portfolio includes more than $100 million if receivables.

ONTARIO, Calif. – Plans for CO-Financial Services to combine its shared branching network with CU Service Centers brings the decade-long move to consolidate the disparate credit union networks into a single national switch nearer completion. The combination follows closely last year’s deal by CO-OP to acquire ENCORE shared branch/ATM network in suburban Washington, D.C. CO-OP’s merger with the CUSC leaves just a single shared branch network in competition, Financial Service Centers Cooperative. And only one credit union-owned ATM network, Credit Union 24, continues to survive outside of the CO-OP, from what was once more than two dozen credit union networks. CUSC President Carroll Beach acknowledged as much. “The synergies resulting from this coming together offer the credit union movement a one-stop shop for EFT services, which are the cornerstone of convenient delivery for credit unions,” said Beach. “To compete successfully with banks and their growing branch networks, credit unions have to supply services over a vast area–essentially wherever members live, work and travel,” said Stan Hollen, president of the CO-OP. “National shared branching plays a key role in fulfilling the need for convenience for credit union members.” The combination of the CO-OP’s and CUSC systems will create a national network with 1,050 credit unions providing some 1,500 branches in 40 states.

RALEIGH, N.C. – In a departure from traditional credit union services, State Employees CU said yesterday it is partnering with NC GreenPower, a local rural electric cooperative, to support cleaner, renewable energy alternatives for North Carolina. The credit union giant, which is already offering ‘green’ auto and home loans, has agreed to fund 1 kilowatt hour of renewable energy production through its non-profit SECU Foundation for each of its 1.3 million members annual over the next four years. The investment, $150,000, will help NC GreenPower to generate renewable and alternative energy from sources such as the sun, wind and methane gas, according to Jim Blaine, president of the $14 billion credit union. “It’s the right thing to do,” Blaine told The Credit union Journal, of efforts to fund cleaner energy sources. The credit union is also launching a major education campaign to support the initiative, which will include energy savings tips in the member newsletter. “If we can help our members to save just $30 a month in energy costs over the next four years, that’s $1 billion in savings,” said Blaine.

WASHINGTON –Lawmakers will grappled with the growing numbers and size of credit unions converting to mutual savings bank as part of the debate over a new regulatory relief bill for credit unions, according to one key House member who will be involved in the debate. Congressman Paul Kanjorski, who co-sponsored HR 1151, the CU Membership Access Act, a decade ago, said he plans to include a provision in his new bill, the CU Regulatory Improvements Act, or CURIA, that will set a minimum voting requirement for the controversial charter switch. “If I had my choice I set it at 50% (of the members),” Kanjorski told The Credit Union Journal. But the Pennsylvania Democrat acknowledged that such a high voting threshold is not likely to pass and a much smaller one, like 20%, is more likely. Kanjorski said he will not pursue a proposal he discussed earlier, recapturing the taxes from a credit union that eventually sheds its tax-exempt status, but he worried about the financial benefits accruing to a handful of insiders who eventually convert the mutual savings bank to publicly owned bank. “We can’t bar them from doing it (converting),” he said. “But we shouldn’t allow it to become profitable.”

WASHINGTON – The new Democratic majority is expected to approve a bill today that would cut interest rates on guaranteed student loans in half, at the expense of banks, credit unions and other student lenders. The measure would reduce the rate on subsidized Stafford loans from 6.8% to 3.4% over the next four years and put new pressures on the few credit unions that continue to participate in the guaranteed loan program. Under the Democrats’ plan the $6 billion in estimated savings for students would be made up in higher fees on participants in the student loan program. President Bush says he is opposed to the Democratic bill, saying he believes it will encourage even more borrowing by debt-laden students. Hundreds of credit unions have abandoned the student loan program over the past five years as the market has become increasingly dominated by huge layers, including Salle Mae, the former government sponsored enterprise that has become the leading provider of student loans.

COLUMBUS, Ind. – Centra CU introduced a new concept in savings yesterday–a prize-based savings account. The $600 million credit union is believed to be the first financial institution in the country to offer financial rewards in exchange for savings. Participants in the credit union’s ‘Super Savings’ program are eligible for 10 different monthly drawings offering prizes of up to $1,000 each month. In exchange for the opportunity to win prizes, the accounts pay a lower rate of interest than the credit union’s regular share (savings) account. The Super Savings account pay 0.50%, while the regular share accounts pay 1.4%. “This is something we believe that will appeal to small savers,” said Nancy Morrow, vice president of corporate development for Centra CU, who got the idea from the Filene Research Institute’s i3 Group on innovations.”We’ve test-marketed this at two branches for two months and rolled it out at all of its 20 branches two weeks ago,” Morrow, who was named to the i3 Group in November, told The Credit Union Journal yesterday. So far the innovation has shown promise. More than 300 accounts were opened during the two-month test in the branches. The average balance on the accounts is small, about $185. In addition to the monthly drawings for $1,000 of prizes, the credit union will stage a quarterly drawing that will award the winner a prize that doubles their savings, up to $1,000. A grand prize valued at $5,000 will be awarded for the year.

AUSTIN – 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.

ONTARIO, Calif. – CO-OP Financial Services announced this afternoon it has agreed to combine its shared branching operations with Atlanta-based CU Service Corp. The combination will form the nation’s largest shared branching network in the country, with 1,457 branches in 40 states. CO-OP, which runs the largest electronic funds network for credit unions, is the parent of Service Centers Corp., the pioneer in shared branching, which it acquired three years ago. The new network will include 1,052 credit unions, representing 80% of all credit unions participating in shared branching. The deal calls for CO-OP to own 51% of the combined entity, which will be called CUSC, and for CUSC to continue managing and marketing the network.

ONTARIO, Calif. – CO-OP Financial Services announced this afternoon it has agreed to combine its shared branching operations with Atlanta-based CU Service Corp. The combination will form the nation’s largest shared branching network in the country, with 1,457 branches in 40 states. CO-OP, which runs the largest electronic funds network for credit unions, is the parent of Service Centers Corp., the pioneer in shared branching, which it acquired three years ago. The new network will include 1,052 credit unions, representing 80% of all credit unions participating in shared branching. The deal calls for CO-OP to own 51% of the combined entity, which will be called CUSC, and for CUSC to continue managing and marketing the network.

MILWAUKEE – Metavante announced it has acquired Valutec Card Solutions Inc., a Franklin, Tenn.-based gift card supplier and processor. The deal gives Metavante's financial institution clients the ability to offer merchant-branded cards and services to their customers. Valutec has more than 13,000 merchants in its client network. Terms of the deal were not disclosed. Metavante is a unit of Marshall & Ilsley, a bank holding company.

MINNEAPOLIS – Check printer Deluxe Corp. said last week it will cut 145 additional jobs in the second round of lay-offs aimed at reducing expenses. The jobs are mostly in the information technology and financial departments. In November the company announced an initial round of 250 lay-offs. Deluxe is trimming expenses as its core check printing business continues to decline, in the face of increasing use of electronic commerce.

ALBANY, N.Y. – SEFCU, formerly State Employees FCU, said it is expanding with two additional branches in the Binghamton area, one in Vestal and one in Chanango. The two branches will both be 2,500 square feet and are scheduled to open in July. SEFCU has $1.3 billion in assets and 143,000 members.

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. In an action filed in Travis County District Court, the credit union claims that Standard Insurance Co. and Benefits Unlimited Co. mishandled the retirement plan. Houston-based Benefits Unlimited brokered the policy for Standard Insurance, which is based on Portland, Ore.

SAN DIEGO – USA FCU said it os offering $7,500 in college grants through its Martin P. Cassell Scholarship program. The program will award five $1,500 scholarship in 2007. The program is named after the credit union’s former CEO, who died in an automobile accident in 2000.

NEW PHILADELPHIA, Pa. – The former president and 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.

WASHINGTON – The Federal Housing Finance Board said Friday it has terminated the rare supervisory agreement it had with the Federal Home Loan Bank of Seattle, which barred it from paying dividends for three years without regulatory approval, or from approving any stock redemptions before the mandatory five-year period. But the Bank’s compliance with the terms of the supervisory agreement, which included its exit from the secondary loan market, and improved financials, which allowed it to pay a slight dividend for the third quarter, prompted the regulator to lift the supervisory agreement. The Seattle Bank has also brought in new management, including former Office of Thrift Supervision Director James Gilleran, who was hired as its president and CEO. The Seattle Bank reported net income of $19.6 million for the first three quarters. The Bank has 375 members, including 75 credit unions.