Executive Summary 18 June 2008

By Christian Mullins

Executive Summary:

John M. Tippets, CEO of America Airlines Federal Credit Union, has announced his retirement, effective June 30.  He will be succeeded by current AAFCU President Angela K. Owens.  Tippets has served as CEO since 1991, overseeing the growth of the credit union from $1 billion to $4.8 billion.  Prior to 1991, he served 8 years on the credit union’s Board of Directors.

Yesterday, we reported a data breach regarding two credit unions in South Bend, Indiana.  Today, it appears that the breach has grown in scope, as police have now confirmed that seven local financial institutions have suffered account breaches.  Four additional FIs have reported account breaches but have not yet been confirmed by police.  The source of the breach has yet to be determined.

International Summary:

• Nothing to report today.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• Tammy Lyn Law, 33, pleaded guilty to embezzling $420,000 from Pioneer Federal Credit Union in Mountain Home, Idaho.  Law managed the credit union’s collection department from 2002 until 2008.  She is scheduled for sentencing on September 15.

Executive Summary 17 June 2008

By Christian Mullins

Executive Summary:

In South Bend, Indiana, over 100 members from two credit unions have reported fraudulent PIN-based transactions on their accounts over the weekend. Teachers Credit Union confirmed 97 members had been affected, while Notre Dame Federal Credit Union had at least 10 affected members. The withdrawals ranged in size, from $100 to $1,300, and were concentrated at ATMs in Russia, Ukraine, and Nigeria. Police are investigating the source of the data breach.

Kaiperm Federal Credit Union, based in Oakland, California, is the third Bay Area credit union to seek a merger due to losses from real estate loans. They are currently in negotiations with Alliant Credit Union, a $5.33 billion asset financial institution based in Chicago (Chicago?), Illinois. Kaiperm, with $96 million in assets, has lost $6 million since the start of 2007. The merger is expected to be completed by September.

International Summary:

• Nothing to report today.

Robbed:

• Greater Cincinnati Credit Union, Cincinnati, Ohio, Monday. Two men, one armed with a handgun, wearing polo shirts entered the credit union just before 4:00 pm Monday and demanded money. A GPS device was planted inside the bag, but it was discovered and discarded. No one was injured.
• Universal One Credit Union, Springfield, Ohio, Monday. A man dressed in black and wearing purple gloves robbed the credit union at gunpoint around 1:00 pm. While escaping with an undisclosed amount of cash, police say the dye pack given with the money did explode. No one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• Richard Thomas Wright, 44, allegedly robbed First Choice Community Credit Union outside Knoxville, Tennessee Monday, only to run out of gas during his getaway. A Sheriffs Deputy pulled alongside the car about 10 minutes after the robbery took place, and found the stolen cash inside. Wright never displayed a gun, and no one was injured during the robbery.

Executive Summary Weekender 14-16 June 2008

By Christian Mullins

Executive Summary:

1st Liberty Federal Credit Union of Great Falls, Montana, has absorbed 335 member, $900,000 asset Electric City Federal Credit Union. ECFCU had converted to a community charter several years ago but were unable to attract the necessary membership. 1st Liberty FCU is a $113 million asset financial, and will be able to offer Electric City’s members online banking and bill pay, as well as several other services.

Belco Community Credit Union, a $260 million asset financial institution based in Harrisburg, Pennsylvania, is believed to be the first credit union in the nation to specifically offer a savings account for pet expenses. While an additional savings account has always been available to members, Belco’s aptly named ‘Critter Club’ account has accumulated 112 club members since debuting in May. Similar to a holiday account, members are encouraged to make automatic deposits until the funds are needed for pet expenses.

International Summary:

Barbados:

At a speech honoring St. Mark’s Co-operative Credit Union’s 45th Anniversary, Prime Minister David Thompson stated that 45% of Barbados’ population were supporting the credit union movement. The 130,000 members are spread out over 37 credit unions, with approximately $1 billion in assets.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• Christopher Cook, 34, was arrested for the Wednesday robbery of Community Credit Union in Lewiston, Maine. He was arrested in South Yarmouth, Massachusetts, after a jump off of a Motel rooftop resulted in a fractured foot. Police recovered $760 of the more than $2,000 taken in the robbery.
• A Rochester, New York man was sentenced to 6 years in prison for the second degree robbery of ESL Federal Credit Union in January. Gary J. Beshures, 48, robbed the credit union, then crossed the street and stole an auto from a woman waiting in line for a car wash.
• The alleged ‘Straw Hat Bandit’ has been arrested. Police believe that Michael Osgood is responsible for 7 robberies in the Sacramento, California area, including Sterlent Credit Union on May 12, and one in the Stockton area.

Executive Summary 13 June 2008

By Christian Mullins

Executive Summary:

It’s a ‘doom and gloom’ day here at ES, as the latest mortgage news is in…

Year over year foreclosures have risen for the 29th consecutive month, according to RealtyTrac, an online marketer of foreclosed properties.  In May alone, 73,000 homes were lost to repossession, an increase of 158% from May 2007.  Florida and California continue to be hit hard, with nine of the ten hardest hit cities located in those states.  Las Vegas, with 1 home in some state of foreclosure for every 96 residences, rounded out the top ten.

The 30 year fixed mortgage rate jumped 23 basis points in the last week, averaging 6.32% with 0.7 point.  It is the highest average mortgage rate in 8 months, when the week ending October 25 averaged 6.33%.  Last year at this time, the rate averaged 6.74%.  The 15 year rate climbed 28 basis points to 5.93% with 0.6 point.  Last year, the rate averaged 6.43%.  The jump is being attributed to comments by the Federal Reserve Board, indicating inflationary concerns could lead to a rate hike.

Salmon Falls Community Credit Union completed its merger into Service Credit Union on June 1, after the New Hampshire credit union’s members overwhelmingly approved the merger with a special vote in May.  Salmon Falls Community’s location will be the first for Service in the city of Somersworth.  Service Credit Union is the largest in New Hampshire, with assets exceeding $1.2 billion.

International Summary:

• Nothing to report today.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• One of three men responsible for the June 6 robbery of Central Credit Union in Pensacola, Florida was arrested Wednesday.  James Johnson, 33, was arrested and charged with armed robbery, theft, aggravated assault, and felon in possession of a firearm.  The other men remain at large.

Executive Summary 12 June 2008

By Christian Mullins

Executive Summary:

According to the Center for Responsible Lending, up to 80% of individuals would rather be denied a purchase at the register than suffer an overdraft privilege charge, a service that allows a purchase without covering funds in their checking account.  The financial institution charges a fee on par with their overdraft charge for each use of the service.  This finding supports the Federal Reserve’s efforts to allow individual account holders to opt out of overdraft privilege programs should they wish it.  The Fed is accepting public comment on this matter until August.

International Summary:

• Nothing to report today.

Robbed:

• Community Credit Union, Lewiston, Maine, Wednesday.  A man entered the credit union around 1:45pm and demanded cash.  He intimated he was armed, though no weapon was displayed.  He fled on foot with an undisclosed amount of cash.  No one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• Nothing to report today.

Executive Summary 11 June 2008

By Christian Mullins

Executive Summary:

More than 4 million Social Security and Supplemental Security Income recipients without deposit accounts at a financial institution will now have the option of receiving a prepaid MasterCard debit card instead of a paper check.  The move, designed to help them avoid check cashing fees, could also help the government save as much as $42 million in costs.  Dallas, Texas based Comerica Bank will issue the cards.

After falling for three consecutive weeks, mortgage applications are on the rise, even with an increase in loan rates.  The Mortgage Bankers Association reports that there is increased demand for both purchase and refinance homes this week.  This can be partially attributed to an increase in the number of foreclosures, negatively affecting prices, which are down between 12%-17% since their peak in 2006.  This comes in spite of the 30 year fixed mortgage rate rising 0.07% to 6.24%.  Last year at this time, the rate was 6.60%.

International Summary:

• Nothing to report today.

Robbed:

• Norwalk Hospital Credit Union, Norwalk, Connecticut, Tuesday.  The credit union was victim to their first robbery in its 32 year history when a man armed with a handgun entered the credit union demanding cash.  He escaped with a little more than $1,000.  No one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• Nothing to report today.

Executive Summary 10 June 2008

By Christian Mullins

Executive Summary:

There’s good news (sort of) on the troubled mortgage market. Pending sales of previously owned homes rose in April to the highest level in six months. Foreclosures flooding the market have driven down prices to the point where bargain hunters have begun to enter the market in force (that’s the sort of). Despite the good news, sales were 13.1% below levels from April 2007.

International Summary:

Australia:

Qantas Staff Credit Union (QSCU) has been awarded Money Magazine’s Readers Choice Award For Service Excellence, coming out on top of not only the nation’s credit unions, but banks as well. The 80,000 member credit union is open to employees of the travel and leisure industry, as well as public servants.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• David Stevenson Boyd II was arrested in connection with the December 2007 robbery of Market USA Federal Credit Union in Mauldin, South Carolina. He has been charged with armed robbery with a deadly weapon, grand larceny, and several other weapons charges.

Executive Summary Weekender 6-9 June 2008

By Christian Mullins

Executive Summary:

Caroline F. Domanski, 62, former Vice-President of First Nebraska Educators Credit Union, has been accused of ‘fraudulently and unlawfully taking’ more than $900,000 from the financial institution. She was fired May 3 for “falsifying general ledgers and then falsifying a pattern of fraudulent entries” to hide the money. It is believed to be Omaha’s largest alleged embezzlement in two decades.

Fitchburg Federal Credit Union, based in Fitchburg, Massachusetts, is offering members a 0% APR loan of up to $10,000 for the installation of qualified energy efficient products. The $27 million asset financial has partnered with MassSAVE, a program financed and operated by the Massachusetts Department of Public Utilities and the Massachusetts Division of Energy Resources.

Consumer debt rose $8.9 billion in April, more than 25% higher than the $7 billion expected. Leading the charge were an $8.7 billion increase in fixed payment loans, such as student or auto loans. Revolving credit loans rose about $300 million. The government excludes mortgage and home equity loans in this report. In all, Americans’ personal debt stands at about $2.6 trillion.

International Summary:

Canada:

Six years ago, Island Savings Credit Union and Coastal Community Credit Union (then Nanaimo and District CU) failed to merge after their members voted down the proposal. Now, the two Vancouver Island credit union’s are considering merging once again. A successful merger would create a credit union serving 120,000 members, with 35 branches, 28 insurance offices, almost 1,000 staff, and $2.6 billion in assets, making it the 4th largest credit union in British Columbia.

Robbed:

• Central Credit Union, Pensacola, Florida, Friday. Three suspects entered the credit union shortly after noon, robbing the credit union of an undisclosed amount of cash. The suspects fled in a maroon sedan. No one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• Eric Scott Bradley, 32, Tina Marie Rogers, 24, Joshua Dale Douglas, 23, were arrested in South Carolina Friday afternoon, accused of robbing First Choice Community Credit Union in Magnet, Tennessee on May 28. One of the men entered the branch and threatened staff with a serrated blade. They fled with roughly $2,000.
• Tamara Navarrette, 28, pleaded guilty to embezzling $48,000 from senior members at Tucoemas Credit Union in California. She will spend four months in federal prison, followed by four months of home detention and three years of supervised release. Navarrette has made full restitution to the credit union and their members, who ranged in age from 65-97.

Executive Summary 5 June 2008

By Christian Mullins

Executive Summary:

The Credit Union Association of Oregon (CUAO) has named Troy Stang as their President/CEO, effective July 1. The CUAO lost their Chief Executive of 32 years, Gene Poitras, to retirement on November 30. Stang is currently an executive with Arizona Federal Credit Union, and has previously served in the U.S. Treasury Department and in the Texas Credit Union League as Vice President of staff and public relations.

Alabama State Employees Credit Union says their ClearCheck card is the catalyst for their recent growth spurt. Since the introduction of the award winning transparent check card, ASECU has seen their growth rate double, from 200 to 400 new members each month. The cards, printed with permission from American Express, cost $3.25, nearly three times the $1.25 cost of a regular check card.

Florida Governor Charlie Crist signed a bill into law allowing the state’s credit unions to sell debt cancellation products. Credit Union members purchase the optional coverage for a fee, stipulating the debt can be suspended or canceled under certain conditions, such as death, disability, or unemployment. The coverage shifts the risk of default from the debtor to the financial institution.

International Summary:

• Nothing to report today.

Robbed:

• Associated Credit Union of Texas, Pearland, Texas, Tuesday. A man left with an undisclosed amount of cash after handing a note to a teller demanding money inside a grocery store branch. No weapon was shown and no one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• Adan Betancio Guerrero was arrested in Phoenix, Arizona after allegedly using a woman’s Social Security Number to obtain two houses and two vehicles with a combined value of over $700,000. Authorities were alerted to Guerrero after it was discovered that the SSN given to a credit union on a $33,000 vehicle loan belonged to another member. While being incarcerated, Guerrero told police to go arrest ‘real criminals’. Um, mission accomplished.
• Keith Kelsey, 21, was arrested four hours after allegedly robbing the Hudson Heritage Federal Credit Union in Washingtonville, New York, Wednesday. Police recovered the $5,150 stolen from the CU, the displayed gun, and the ski mask worn during the robbery. Kelsey, on parole since May 5, presumably robbed the credit union to pay for damages he caused to his girlfriend’s vehicle Tuesday night.
• Arrests have been made in the May 9 robbery of New Horizons Credit Union in Foley, Alabama. Jarvis McAllister, 22, and Richardo Eason, 17, entered the financial, fired a shot into the ceiling, and stole an employees car, which was later recovered.
• Brandon K Hall, 22, was arrested in Chester, Pennsylvania Wednesday for the robberies of a credit union and bank located in Delaware and Maryland, respectively. Hall allegedly robbed the Chestnut Run FCU in August 2006. He was caught after placing a toddler in front of a closet door and throwing covers over himself.

Executive Summary 4 June 2008

By Christian Mullins

Executive Summary:

In a study released by Mercator Advisory Group, Inc, credit unions are leading the pack when it comes to mobile banking. Of the 260 financial institutions studied, 39, or 15%, offered mobile banking to their account holders. Of large financial institutions, 23% of credit unions offered mobile banking, 17% of banks, and 0% of community banks. Overall, approximately 2 million Americans were mobile banking subscribers, just more than half of predictions, though that number is still expected to swell to 33 million by 2012.

This year, as more Americans are feeling the pinch of the credit crunch, credit card usage is undergoing a fundamental shift. Frivolous charges, like lunch or knick knacks, are less frequent items on credit card statements, though necessity charges are becoming more common. According to Gail Cunningham, Spokeswoman for the National Foundation for Credit Counseling, “(Cardholders are) not living large. They’re charging their living expenses”.

International Summary:

Bahamas:

The island nation is the latest with growing concerns over increased foreclosures on their mortgage market. The global economic slowdown coupled with skyrocketing food and fuel prices are the main culprit. The Bahamas, unlike the United States, never entered the subprime market, however, so neither a widespread ‘bottoming out’ of the mortgage market nor bank/credit union failures are expected at this time.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• Preston Barham, 57, who admitted to robbing three financial institutions, including Heritage Credit Union in Galesburg, Illinois last June, was sentenced to 70 months in prison. He will also be required to pay restitution totaling $18,000 to the credit union and two banks.