Vol. 9 No. 7 July/August, 2005
Rhode Island Credit Union League holds annual meeting
Vol. 3 No. 1 January, 1999
T The Rhode Island Credit Union League’s
71st annual meeting was held June 21, 2005
at the Squantum Association in East Providence.
On behalf of Representative John Savage who
pics but other great programs such as the Credit
At the annual meeting, four directors were
re-elected to three year terms. They are: Will-
was unable to attend at the last minute, outgo- iam Brownell, President/CEO, Dexter Credit
ing Chairman Ken Poyton welcomed everyone Union; Eugene Leco, Treasurer/Manager, Kent
in attendance and called the meeting to order. County Memorial Hospital Employees Federal
In his remarks, Poyton addressed his apprecia- Credit Union; Joan Saunders, Treasurer, Com-
tion for all the unified effort that the credit munity & Teachers Federal Credit Union; and
unions of Rhode Island undertake to make life Stephen White, President/CEO, Westerly
in the Ocean State better. Community Credit Union. Ellen Ford, Presi-
Elizabeth Whitehead, National Credit dent/CEO, People’s Credit Union was elected
Union Administration Associate Regional Di- to serve on the board for a three year term.
rector of Programs in Region I congratulated Also during the annual meeting, Colum-
everyone on a successful annual meeting and bus Credit Union received an anniversary
was pleased to be part of this year’s event. plaque for 55 years.
Special Olympics Rhode Island Executive Following dinner, former Attorney General
Director Michael McGovern and Special Olym- Arlene Violet gave a lively and entertaining Arlene Violet was the featured after dinner speaker at
pian/Global Messenger Kelly Burdon both speech, entitled “The Curley Factor in Rhode the annual meeting and gave an enlightening speech
spoke to the group. They highlighted the spe- Island Politics,” that was extremely well received regarding old time politics from the “Curley” days.
cial partnership that the League has with Spe- by the attendees. She also commended the
cial Olympics Rhode Island as well as thank all credit unions for the wonderful work they do Inside . . .
the credit unions for all they do for their com- for their communities in the state.
munities in not only supporting Special Olym- Additional photos on Page 3. Bank Secrecy Act/Anti-Money
Laundering Examination Manual
Credit union volunteers
participate in Summer Games
Rhode Island credit unions
present Special Olympics
Rhode Island with $45,000
. . . and more!
Special Olympian/Global Messenger Kelly Burdon speaks to the group during the annual meeting.
Legislative & Regulatory Notes
banking agencies played a consultative role.
The Office of Foreign Assets Control (OFAC)
Bank Secrecy Act/Anti-Money collaborated on the development of core
overview and examination procedures
Laundering Examination Manual addressing compliance with regulations
enforced by OFAC.
The FFIEC BSA/AML Examination
The National Credit Union Administration The FFIEC BSA/AML Examination Manual emphasizes a banking organization’s
(NCUA) together with the Federal Financial Manual was developed by the Board of responsibility to establish and implement risk-
Institutions Examination Council (FFIEC) Governors of the Federal Reserve System based policies, procedures, and processes to
released the Bank Secrecy Act/Anti-Money (Board), Federal Deposit Insurance Corporation comply with the BSA and safeguard its
Laundering Examination Manual (BSA/AML (FDIC), National Credit Union Admini- operations from money laundering and terrorist
Examination Manual) recently. It is posted on stration (NCUA), Office of the Comptroller of financing. The BSA/AML examination
the Internet at: http://www.ffiec. the Currency (OCC), and Office of Thrift procedures will guide examiners through an
gov/pdf/bsamanual.pdf. The manual’s release Supervision (OTS) (collectively referred to as evaluation of a banking organization’s BSA/
marks an important step forward in the effort the federal banking agencies) in collaboration AML compliance program regardless of its size
to ensure the consistent application of the BSA with the Financial Crimes Enforcement or business lines. The majority of the FFIEC
to all banking organizations including Network (FinCEN), the delegated administra- BSA/AML Examination Manual provides
commercial banks, savings associations, and tor of the BSA. In addition, through the narrative guidance and resource materials rather
credit unions. Conference of State Bank Supervisors, the state than specific examination procedures. This
includes an overview of the BSA requirements
FACT Act interim final and the federal banking agencies’ supervisory
expectations in this area.
The Board, FDIC, OCC, OTS, and
rules on medical information FinCEN have planned a series of events to brief
the banking industry and field examiners on
T The National Credit Union Administration
(NCUA), in cooperation with the federal bank
and thrift regulatory agencies, issued interim
final rules under the Fair Credit Reporting Act
other needs. A proposed rule was published
for comment on April 28, 2004.
The interim final rules create exceptions to
the general statutory prohibition on obtaining
the FFIEC BSA/AML Examination Manual.
These events include nationwide conference
calls, regional outreach meetings, and a simulcast
via the Internet. Registration details for the
industry calls, regional outreach meetings, and
(FCRA) that create exceptions to the statutory and using medical information. The provisions
prohibition against obtaining or using medical are similar to those contained in the proposed the simulcast will be communicated shortly to
information in connection with credit eligibility rule and include exceptions for the use of the banking industry via separate notice.
determinations. The interim final rules also medical information that is also financial
address the sharing of medically related information typically considered in credit Horizons
information among affiliates. The effective date underwriting. As authorized by the FACT Act, is a monthly publication of the
for these rules is nine months after the date of the agencies have expanded the scope of the Rhode Island Credit Union League
publication in the Federal Register (June 9, rules so that the exceptions will apply to all 20 Altieri Way
2005). creditors, not just to creditors ordinarily Warwick, RI 02888
Section 411 of the Fair and Accurate Credit regulated by one of the agencies. (800) 842-1242
Transactions Act of 2003 (FACT Act) amended Section 411 of the FACT Act also amended Fax (508) 481-3586
the FCRA to provide that a creditor may not the FCRA to limit the ability of creditors and www.riculeague.org
obtain or use medical information in others to share medically related information
Chairman of the Board
connection with any determination of a among affiliates, except as permitted by the Kenneth Poyton
consumer’s eligibility, or continued eligibility, statute, regulation, or order. The interim final Providence Postal Federal Credit Union
for credit, except as permitted by regulations or rules specify the circumstances in which
the FACT Act. However, the FACT Act also creditors may share medically related President
requires the agencies to prescribe regulations information among affiliates without becoming Daniel F. Egan, Jr.
that permit creditors to obtain and use medical consumer reporting agencies.
information for credit eligibility purposes when The interim final rules are being issued by Editors:
necessary and appropriate to protect legitimate the Board of Governors of the Federal Reserve Marguerite A. Thorsen
Donna M. Bevilacqua
operational, transactional risk, consumer, and Continued on Page 7.
Credit union volunteers participate in Summer Games
S Sometimes the relationship with a charitable
organization is little more than the act of mail-
ing a check and the momentary warm feeling
that simple act generates. The more than sixty
credit union volunteers that worked at the Sum-
ics, athletics, bowling, cycling, gymnastics,
powerlifting, and unified soccer.
League support of the Summer Games is part
of an ongoing commitment to this worthy cause.
The credit union volunteers included:
Augusto Rojas; People’s Credit Union - Ellen
Ford, Jimmy Ford, Peter Quin, Shannon
Melchione, April Boyd, Bob DaSilva, Michael
Carroll, David Connor, Lyn Dawley, and
Courtney Hunter; Rhode Island Credit Union
mer Games had the opportunity to bask in that Columbus Credit Union - Cidalia Rocha, Liz League - Robert Kimmett and Al Ricci; Rhode
warm glow all day Friday, June 3 at the Univer- Medeiros, and Linda Prevost; Credit Union Island Credit Union - Gina DePalo, Diane
sity of Rhode Island’s (URI) Kingston campus. Central Falls - Keith Antunes, Paula Carlin, Santos, Melissa Edwards, and JoAnna Zackarian;
The volunteers were assigned to “clerking,” walk- Kathy Gugletti, Randy Sacilotto, Cheryl Silva, Wave Federal Credit Union - Paul Archambault,
ing, and running events. Officially, that task Steve Soderlund, Suzanne Pinarreta, Donna Dolores Relvinha, Richard Walker, and Adele
involves checking the athletes in and gathering Wood, Robin Woods, and Charlie Zawacki; Moreau; Westerly Community Credit Union -
them into groups for their “heats” and then es- Dexter Credit Union - Filomena Almeida, Bill Mary Ellen Buckley, Peter Desillier, June
corting them to the track so that they can com- Brownell, Marisol Garcia, Bob Leblanc, Laura Mulcahey, Jason Buckley, Kris Kinder, Lisa
pete. Unofficially, it involves cheering, kidding Lopes, and Laurie Robinson; Kent County Me- Peltier, Diane Goulet, Missy Rhodes, and Meg
with and fetching drinks for the athletes, as they morial Hospital Employees Federal Credit Sisco.
get ready. Union - Cam Malone-Allen and Frank Allen; The League Board and Social Responsibility
Many athletes achieved their personal best Pawtucket Credit Union - Robert Andrade, Committee would like to thank the volunteers
in their events, a credit to their skills and hard Becky Book, Anne LaFleur, Frank McFarland, that participated in the Special Olympics Rhode
work, and their coaches’ commitment to train- Dick Kanaczet, Anne Tremblay, Laurie Island Summer Games on behalf of the League
ing in the months leading up to the games. Flaxington, Brian Regan, Donna Gregson, and their credit unions.
Athletes from across the state competed in aquat- Madeline Glaude, Bill Slade, Patti Webb, and
Rhode Island...annual meeting - Continued from Page 1.
League Chairman Ken Poyton delivers his outgoing Attendees are engaged in the message that was delivered by Special Olympian/Global
chairman’s report. Messenger Kelly Burdon.
League Chairman Ken
Poyton presents Cidalia
Credit Union with a 55
year anniversary plaque.
Annual meeting attendees listen as League Chairman Ken Poyton gives his report.
Rhode Island credit unions present
Special Olympics Rhode Island with $45,000
R Rhode Island Credit Union League mem-
bers increased the green when they presented a
$45,000 check made payable to the Special
Olympics Rhode Island at the Annual Rhode
total amount raised this year by credit unions,
members, vendors, etc. The goal, set in Sep-
tember 2004, was $40,000 and the Social Re-
sponsibility Committee worked extremely hard
Crestwood Country Club was the culmination
of a fantastic fundraising effort. One hundred
thirty two golfers and more than 40 sponsors
combined to make the Annual Rhode Island
Island Credit Union Charity Golf Tournament to exceed it. Credit Union Charity Golf Tournament a tre-
on July 18, 2005. These funds represented the This year’s golf tournament held at mendous success.
After the tournament, Special Olympics
Rhode Island Executive Director Mike
McGovern along with Special Olympian
Michael Lucca graciously accepted the “Special
Check for $45,000” from representatives of the
Social Responsibility Committee and the Rhode
Island Credit Union League. On behalf of Spe-
cial Olympics Rhode Island, Mike expressed his
appreciation to the Rhode Island Credit Union
League and its member credit unions.
The Rhode Island credit unions can be
proud of these efforts that have been made in
helping Special Olympics Rhode Island con-
tinue to provide quality sports training and ath-
letic competitions to over 2,500 children and
adults with intellectual disabilities in the State
of Rhode Island. The League will continue these
efforts next year and will keep you posted on
the upcoming events.
Pictured left to right: Ken Poyton, Providence Postal Federal Credit Union; Paul Archambault, Wave Federal
Credit Union; and Dan Egan, Rhode Island Credit Union League present Michael Lucca and Mike McGovern
from Special Olympics Rhode Island with a check for $45,000 at the conclusion of the golf tournament.
Golf tournament results... Best-Ball Scramble Format
Rhode Island Credit Union
The pre-tournament rain shower and the ex- coveted Team Trophy for the Low Gross score
Henry Godin, Barry Levin, Paul Valliere, and
treme afternoon heat and humidity did not de- of 66 went to the Credit Union Central Falls
Herve Champagne, Jr.
ter the golfers from enjoying a great game and team of Gary Furtado, Gil Dubois, Dr. John
Men’s Longest Drive
the spirit of giving to a worthy cause. Maynard, and Al Degen. The team of Dick
Special Olympian Michael Lucca was on Beretta, J.R. Beretta, Richard Beretta, and Bob
Anchor Federal Credit Union
hand this year to play the 18th hole with each Liguori from Adler Pollock & Sheehan won the
Women’s Longest Drive
team. Low Net Team honor. In addition, many indi-
“Friendly competition” ruled the day. The vidual skills contests were won:
Credit Union Central Falls
Low Gross Individual
Closest to the Pin Contests
Frank Doheny, 76
Hole Number 3
Pawtucket Credit Union
Low Net Individual
Adler Pollock & Sheehan
Fran Castrovillari, 64
Hole Number 5
Colagionvanni Law Offices
Dexter Credit Union
Three members of the winning Hole Number 15
foursome from Credit Union Dick Beretta
Central Falls were on hand to Adler Pollock & Sheehan
accept the trophy following the Hole Number 17
tournament. Bob Rebussini
Ocean State Financial
Golf tournament photos...
Messenger Michael Lucca gets
ready to putt on the 18th hole.
The foursome from Empire
Corporate Federal Credit
Union takes a moment by
their hole-in-one sign before
Phil Maniaci from Credit Union Direct Lending smiles for the
camera as they head out to the tee. The foursome from People’s Credit Union found tournament volunteers Kathy Guadagni
(left) and Dante Benedetti (left) from their credit union and stopped for a group shot.
Columbus Credit Union recognized as Outstanding
Fundraising Credit Union at golf tournament
C Columbus Credit Union received the “Out-
standing Fundraising Award” at the Rhode Is-
land Credit Union Charity Golf Tournament
on July 18, 2005. The credit union raised
Gold - $2,500 - $4,999
Anchor Federal Credit Union
Columbus Credit Union
People’s Credit Union
Providence Postal Federal Credit
$.84 per member. Following in order be- Wave Federal Credit Union
hind the credit union was Anchor Federal Silver - $500 - $2,499
Credit Union, Cranston Municipal Employ- Alliance Blackstone Valley Federal
ees Credit Union, Wave Federal Credit Union, Credit Union
Lincoln Town Employees Federal Credit Cranston Municipal Employees
Union, and Providence Postal Federal Credit Credit Union
Union. Dexter Credit Union
The Rhode Island Credit Union League’s Greater Woonsocket Federal Credit
Social Responsibility Committee recognized Union
and thanked all the credit unions for their Lincoln Town Employees Federal
efforts in raising funds for Special Olympics Credit Union
Rhode Island. Rhode Island Credit Union
Credit Union Fundraising Levels Bronze - $100 - $499
Titanium Level - $10,000+ Community & Teachers Federal
Credit Union Central Falls Credit Union
Platinum - $5,000 - $9,999 Journal Employees Federal Credit
Pawtucket Credit Union Union
Cidalia Rocha from Columbus Credit Union accepts the Outstanding
Westerly Community Credit Union Fundraising Award from League Social Responsibility Committee
Newport Columbian Federal Credit
Chairman Paul Archambault at the charity golf tournament. Union
Pawtucket Credit Union marks grand opening of branch with
$10,000 fundraising drive to benefit The Tomorrow Fund
I In celebration of the grand opening of its
new branch in Cranston, Pawtucket Credit
Union (PCU) announced a collaboration with
The Tomorrow Fund (TTF), which offers
financial and emotional support for children
with cancer and their families throughout
Rhode Island and southeastern Massachusetts.
In addition to an initial donation of $2,500,
Pawtucket Credit Union will also donate $25
to The Tomorrow Fund for every new account
opened before August 18, 2005, up to 300
“It is our hope that new account holders
will be pleased to join a financial institution
with an enduring goal of serving the people of
Rhode Island and southeastern Massachusetts,”
said Pawtucket Credit Union President/CEO
Kark A. Kozak.
“Pawtucket Credit Union has been a
dedicated supporter of The Tomorrow Fund
over the years,” said Dr. Edwin Forman, a
founder of The Tomorrow Fund and the
Director of Hematology and Oncology at Pictured (l to r) front row: The Tomorow Fund kids - Cameron Hennessey, Colin Hennessey, Ashley Zannini
Hasbro Children’s Hospital. “PCU’s generous and Connor Hennessey. Back row (l to r): Shannon Lund, TTF kid; PCUCranston Branch Manager Donna
gift and fundraising drive demonstrate their Wierzbicki; PCU Executive Vice President/COO, Robert Andrade; PCU President/CEO Karl Kozak; Chief of
ongoing commitment to their community and Pediatric Oncology, Hasbro Children’s Hospital and founder of TTF Dr. Ed Forman; and Executive Director
of TTF Barbara Ducharme.
to helping others.”
Rhode Island Credit Union League scholarships awarded
T The Rhode Island Credit Union League
recently awarded eight scholarships to students
that were either entering or returning to college
this autumn. The recipients were chosen from
The student winners are:
Mary P. Bean of Narragansett, sponsored by
Wave Federal Credit Union; Hunter Dufrane
of Rehoboth, MA, sponsored by Columbus
sponsored by Pawtucket Municipal Employees
Federal Credit Union; and Patrick Wood of
Newport, sponsored by People’s Credit Union.
hundreds of applications submitted to credit Credit Union; Stefanie Ferreira of Cumberland,
unions from throughout Rhode Island. sponsored by Dexter Credit Union; Lee
Applications were evaluated on a variety of Hathaway of Westerly, sponsored by Westerly
criteria including the students’ academic Community Credit Union; Lia Marcoux of
performance, financial need, extracurricular North Providence, sponsored by Credit Union
activities, and the quality and content of an Central Falls; Vanessa Scialabba of Cranston,
essay that addressed the applicant’s intended sponsored by Rhode Island Credit Union;
major field of study and career goals. Christopher M. Wildenhain of East Providence,
Credit Union Central Falls awards scholarships
F For the past six years, Credit Union Central
Falls (CUCF) has awarded $10,000 in annual
scholarships to graduating seniors from area high
schools. Since the start of this program, the
Ryan Cipriano from Central Falls. Ryan will
be attending Bryant University in the Fall to
further his studies in Business Administration.
For the past five years, Credit Union Central
Central Falls since June of 2004 and is the Vice
President of Commercial Services. Jessica
Reinhardt is from Riverside and will be
attending American University in Washington,
credit union has awarded more than $60,000 Falls has awarded the Albert E. Landry D.C. and plans on majoring in broadcast
to area high school and college students. Every Memorial Scholarship to recognize children of journalism and psychology.
year the Credit Union Central Falls Scholarship employees of Credit Union Central Falls for Credit Union Central Falls congratulates all
Committee reviews applicants on a combined their academic, extracurricular, and community recipients and has confidence that their
basis of grades, community involvement, achievements. Jessica Reinhardt is the 2005 determination and passion will lead them to
financial need, and a personal essay illuminating recipient and is the daughter of Fred & Ellen their dreams and that their spirit will touch the
the applicant’s goals and aspirations. This year’s Reinhardt. Fred has worked at Credit Union lives of all those around them.
recipients strive for excellence in their academic
and personal lives and possess the determination
to succeed, the courage to follow their passions,
and the generosity to share their vision with
others. Their commitment to learning and
dedication to their communities exemplify life
qualities which the credit union values. Each
scholarship recipient received a check for
$2,000 and a $25.00 deposit in a newly opened
The 2005 CUCF scholarship recipients are:
Stacy Lima from Lincoln. Stacy will be
attending Stonehill College in the Fall where
she will study biology and neurology.
Stefanie Ferreira from Cumberland. Stefanie
will attend the University of Rhode Island this
Fall where she plans to major in pharmacy.
Anthony Silva from Cumberland. Anthony
will be attending Bryant University in
Danielle Cortesa, from Uxbrige, MA. In
September, Danielle will be attending Boston Pictured left to right: Richard Bessette, CUCF Board of Directors; Anthony Alex Silva; John DeGoes, CUCF
Board of Directors; Stefanie Ferreira; Jessica Reinhardt; Danielle Cortessa; Stacy Lima; Ryan Cipriano; Gary E.
Furtado, CUCF President/CEO.
Credit union people. . . Continued from Page 2.
M Mike Urgo has joined Westerly Community
Credit Union as a Mortgage Officer. He will
be responsible for the outside
mortgage origination, allowing
has a bachelor’s degree in communications from
the University of Rhode Island and an associate’s
degree in business management
from Community College of Rhode
System, Federal Deposit Insurance Corpora-
tion, National Credit Union Administration,
Office of the Comptroller of the Currency, and
Office of Thrift Supervision. The rules of each
mortgages to be opened anywhere or Island. Mike is on the Planning agency are substantively identical.
anytime that is convenient to the Committee for the American The rules are being issued as interim final
member. Cancer Society’s Westerly Relay for rules to allow for public comment on their
Mike has managerial and financial Life, Treasurer of the Misquamicut expanded scope.
experience, most recently working at Business Association, and a member Link to the Interim Final Rules on Medical
Valenti Toyota as a Business Manager, of the Planning Committee for the Information at: http://www.ncua.gov/
as well as being owner of the Tiki Westerly Community Center. RegulationsOpinionsLaws/RecentFinalRegs/
Guy’s Surf Supply in Westerly. He final_regs.
Empire Corporate Federal Credit Union has
two exciting conferences on tap for this Fall
C Credit union executives understand the
value of education and being “in the know”
about what is happening in this fast-paced
financial world. For this reason, Empire
bonus, all sessions will repeat later in the
morning. The day is capped off with an Empire
tradition that everyone enjoys, some exciting
of time-challenged operations professionals.
Empire understands the demanding and fast-
paced field of operations and is pleased to offer
its second annual Ops Outlook Conference -
Corporate Federal Credit Union is pleased to On Thursday, September 15, the final day designed specifically for the operations
invite all credit union executives to attend its of the conference, Empire concludes with a community. The exchange of information and
upcoming credit union conferences this Fall. session no one will want to miss: “Managing ideas is vital to credit union operations
Each conference is jam-packed with speaker Your Balance Sheet in Uncertain Times.” This professionals everywhere.
presentations and information important to session will provide valuable insight into how Highlights of this conference include:
maximizing a credit union’s efficiency and to effectively manage a credit union’s balance • The track advantage - Ops Outlook’s track
bottom line. sheet during times of economic volatility, all format expands the possibilities by allowing
from a regulatory standpoint. individuals to choose learning sessions best
Financial Strategies Conference suited to their credit union’s needs. Choose
Including new strategies to achieve balance Ops Outlook Conference from a Compliance Track, a Payments Track, or
sheet management goals Operations Professionals: This conference is a CU Exchange Track.
When: September 13-15, 2005 all YOURS. • A Special Bonus Track - This new Bonus
Where: Newport Marriott, Newport, RI When: October 18-19, 2005 Track will feature the conference’s most in-
Registration deadline: August 26, 2005 Where: Marriott Hotel, Albany, NY demand topics.
Contact name: Linda Riddle, 800-253-0053, Registration deadline: September 30, 2005 • Exchange made easy - Swap ideas, learn from
ext. 3997; email@example.com Contact name: Sandra Gingell, 800-253-0053, each other, and make connections during the
The conference kick starts with an optional ext. 4113; firstname.lastname@example.org tradeshow, meals, the cocktail reception, and
pre-conference session (for an additional fee) This concentrated one-and-a-half day between learning sessions.
on Monday, September 12, that drills into ALM Empire conference is designed to serve the needs
functionality, including a hands-on segment.
When it comes to enhancing the financial health
of a credit union and satisfying the regulators,
it makes strategic sense to know as much as
possible about Asset/Liability Management
(ALM). Senate poised to address data security
On Tuesday, September 13, the conference
moves into full gear with a morning session The Senate Commerce Committee said it access code, password, or other personal identi-
entitled “11 Steps to Controlling Expenses.” would mark up legislation that would require fication that would allow access to an
This session will explore the impact that the Federal Trade Commission to develop data- individual’s account. The second bill mandates
expenses have on credit unions and how to security rules for all non-governmental entities that banks and credit unions, many retailers,
control them. that handle sensitive personal data. This move data brokers, and credit bureaus notify con-
The next session, “Leading with Lending,” follows the introduction of two data security sumers when their sensitive personal financial
will explore the challenges of managing a bills in the House recently. information is placed at risk by a data security
profitable loan portfolio given today’s economic Among the pending bill’s provisions, it: breach.
conditions. The after-lunch session, “Life After • Would create a national “breach-notification” The Credit Union National Association
Greenspan” is sure to draw attention. This standard requiring companies to notify con- (CUNA) supports requiring the major credit
session will explore the implications of Chairman sumers and law enforcement of security lapses card companies to notify financial institutions
Greenspan’s impending retirement on financial that put their customers’ personal data at risk; when a breach has occurred, and for financial
markets and institutions. • Includes a “security freeze” provision that institutions to be able to disclose the source of
Rounding out the day, “Reaching New would enable consumers to prevent creditors the breach to the consumer, according to CUNA
Heights in Business Services” will relay what with whom they do not have existing accounts Legislative Affairs Vice President Gary Kohn.
small business owners really want from their from accessing their credit reports. For additional information on this topic, go to
financial institution, and how to deliver those Recently, two separate bills were introduced the following websites: Issues 2005: Data Secu-
services with proven credit union strategies and in the House. One would require companies to rity (http://www.cuna.org/gov_affairs/legisla-
best practices. warn consumers if a breach were “reasonably tive/issues/2005/data_security.html) and Iden-
The second day of the conference, likely” to result in transaction fraud if the com- tity Theft Resources for Credit Unions (http://
Wednesday, September 14, keeps up the promised data included a financial account www.cuna.org/initiatives/idetheft.html).
momentum with exciting breakout sessions that number in combination with a security code,
highlight some of Empire’s professional
management team members. And, as an added
Project LEAP aims to help credit Broad Regulatory
unions in rising rate environment Relief Bill
A A new educational initiative designed to help
credit unions succeed in a rising rate
environment by coordinating national and state
training, research, and publishing resources on
To provide relief from problems associated with
a declining interest margin, credit unions have
a variety of time-tested strategies they can
pursue. Among other things, credit unions can:
H House lawmakers introduced a broad bill
designed to provide regulatory relief to credit
unions, banks, and thrifts. House Financial
Services Committee Members Jeb Hensarling
strategies that strengthen credit union bottom • Drill deeper into the smaller loan needs of (R-Texas) and Dennis Moore (D-Kan.) intro-
lines has been introduced by CUNA. deserving members, and implement an duced the Financial Services Regulatory Relief
Project LEAP: Showcasing Lending aggressive marketing and training effort to make Act of 2005. The Senate is expected to unveil
Excellence and Performance was formed by more unsecured debt that might otherwise be a regulatory relief measure, but not until Con-
CUNA and supported by the CUNA Mutual financed by high-interest credit cards or gress returns from its August recess.
Group and the American Association of Credit predatory lenders. The Credit Union National Association
Union Leagues (AACUL). It serves as a • Implement a risk-based lending program to (CUNA) strongly supported this bill which
reference to products and services offered make more loans and earn a higher yield. includes a new net worth provision that would
through CUNA and the state leagues that help • Adopt a rate-change model that quickly allow credit unions to continue pooling their
credit unions to address overall growth reacts to Federal Reserve rate changes as well as capital after mergers, but excludes a proposal
strategies, reshape their asset/liability portfolios, rate changes made by competitors. by the National Credit Union Administration
boost non-interest revenue, build membership, • Create a lending incentive program that (NCUA) for a risk-based capital system.
grow consumer loan portfolios, and invest in rewards staff for making “second” loans to The NCUA capital proposal is included in
developing a sales and service culture that better members applying for a loan. the Credit Union Regulatory Improvements
markets and cross-sells products and services. • Maximize non-interest revenue Act (CURIA, H.R. 2317), as well as a provi-
Even with a capital-to-asset ratio of almost opportunities by selling loan-related ancillaries sion that would increase credit union member
11 percent at year-end 2004, credit unions’ such as credit insurance, or other products and business lending limits to 20%, up from
return-on-assets (ROA) averaged 95 basis services that provide fee income and are a low- 12.25%.
points — a drop from 98 year-end 2003. cost source of funds such as share drafts. The Financial Services Regulatory Relief Act
CUNA economists project that the average Project LEAP explores and emphasizes these of 2005 carries a number of benefits for credit
ROA could drop to 85 basis points this year, strategies and more, such as evolving unions approved in earlier House votes:
and 80 basis points in 2006. More than 3,500 socioeconomic and technologic trends that will • Privately insured credit unions to become mem-
credit unions have an ROA of less than 40 basis alter the demographic makeup of credit union bers of a Federal Home Loan Bank;
points, and more than 1,400 have a negative membership, and influence the financial needs • Leases of land on federal facilities for credit
ROA. of members and their service preferences. The unions;
Credit union share portfolios are heavily bottom line is to enable credit unions to grow • Investments in securities by federal credit unions;
weighted in favor of short-term, low-cost and prosper in a dynamic environment. • An increase in general 12-year limitation of
deposits that will re-price quickly as rates rise. For more information, go to www.cuna.org term of federal credit union loans to 15 years;
Loan portfolios, on the other hand, re-price and click on the link to Project Leap, located • An increase in 1% investment limit in credit
more slowly and are heavily weighted towards under the “CUNA Initiatives” banner or e-mail union service organizations;
long-term loans that yield lower rates of return. email@example.com. • Member business loan exclusion for loans to
non-profit religious organizations;
• Check cashing and money transfer services of-
Compliance starts at the teller line fered within the field of membership;
• Voluntary mergers involving multiple common
bond credit unions;
League Senior Vice President Paula Dion regulation but implementation is vital,” • Conversions involving common bond credit
has spent a good deal of time over the past stated Dion. “Too often our frontline people unions;
year working with credit unions to help are asked to implement these procedures • Credit union governance;
management get Bank Secrecy Act policies without the background knowledge • Providing the NCUA with greater flexibility
and training programs implemented. She required to fully ensure that the complex in responding to market conditions;
praised management for their efforts to meet regulations are followed.” A training • An exemption from pre-merger notification re-
the very specific training guidelines in the program that focuses on the “why” of the quirement of the Clayton Act; and
act. However, she has witnessed that there is procedures as well as the “how” can make a • Treatment of credit unions as depository insti-
challenge in getting tellers and other huge difference in successful tutions under securities laws.
frontline personnel up to speed on the implementation. The bill also would streamline the process
procedures that must be followed in order For more information on effective of filing currency transaction reports and sus-
to stay in compliance. compliance training, please contact Paula picious activity reports as required by the Bank
“Written policies and procedures are an Dion at the League, (800) 842-1242. Secrecy Act.
essential component of compliance in any
Agency Update scam
MemberClose grows…and grows!
T The League has received a number of calls
from area credit unions concerning a type of e-
mail fraud attempts disguised as correspondence
from the National Credit Union Administration
(NCUA). These fraudulent e-mails are aimed
I In May of 2004 Members Insurance Agency
launched its MemberClose home equity program.
One year later, it announced Leominster Credit
Union as the 50th credit union to begin using
• Legal & Vesting Report: A legal description
of the property is available in the event that the
credit union cannot obtain one from the
member or the county website.
at the consumer with the intent of getting them
to disclose personal financial information. The
following information, which appears on the
NCUA website, explains the fraud
methodology and the NCUA’s practices
the web-based program to gain efficiencies in • Flood Certifications: There are four (4) flood
processing home equity loans. There are now certification providers built into the regarding e-mail communication.
over 60 credit unions using MemberClose and MemberClose platform. This ensures the highest
that number is sure to continue to grow. probability of an automated flood certificate. From The NCUA Website
MemberClose is not only growing in the • Documentation Preparation: Once the back Recently, there have been multiple e-mail fraud
number of participating credit unions, it is office processing of the loan is complete, the attempts, known as “Phishing,” that were
growing in the scope of services. In addition to credit union can point & click the Doc Prep tab initiated via e-mail sent to both the general public
the initial service offering (detailed below), and their customized and compliant loan and to some credit union members that appeared
credit unions are now using MemberClose to do documents are produced. The information that to be from NCUA. This false e-mail asked for the
nationwide, anywhere, anytime lending. is resident in MemberClose pre-populates the recipient to click on a link to verify their credit
This is especially useful for credit unions documents which greatly eases the preparation union account registration. If the recipient
that may have a significant member population process. proceeded to do so, the link directed them to a false
in other states. Many credit unions do not • Closing Services: For members for whom website and asked for their credit union account
actively market to those members for equity closing at the credit union is not practical or number and PIN, along with other personal
lending. In fact, they shy away from it because convenient, a suite of closing services is available. information.
the process is too cumbersome and confusing These services include the signing of the NCUA does not ask credit unions’ members for
for both the credit union and the member. documents, the dispersing of the funds, and such personal information. Anyone who receives
MemberClose provides a fast, easy, and reliable the execution of any discharges. an e-mail that purports to be from NCUA and
way to process these loans. Everything is • Recording Services: Through MemberClose, asks for account information should consider it to
provided from the appraisal to the closing the credit union can follow the documents be a fraudulent attempt to obtain their personal
documents. Through the system, the closing along a 7-point tracking system. This is available account data for an illegal purpose and should not
and the recording of the documents are ordered. in all of the more than 3,600 recording follow the instructions in the e-mail.
Having MemberClose will allow credit unions to jurisdictions. If you responded to such an e-mail and provided
actively pursue these new markets. MemberClose provides for the ultimate in any confidential account information, please
The complete MemberClose list of services flexibility. Credit unions simply log onto our notify your credit union immediately of the scheme.
include the following: secure website and then point & click their way You should also change your account’s PIN, and
• Credit Bureau: Credit unions are licensed through the lending process. The credit union take any additional action recommended by your
with all three of the major credit repositories. selects only the specific services it needs for each credit union to protect your account.
The reports are available instantaneously and loan that it makes. Formal complaints can be filed with http://
are formatted in an easy-to-read manner. Getting started with MemberClose is easy too. www.IC3.gov
• Automated Valuation Model (AVM): There There are no enrollment fees and there are no
are seven (7) AVM providers that work in a minimum transaction levels that must be met.
cascading fashion to ensure the highest possible Once the decision is made to start using
“hit ratio.” MemberClose, a training session is scheduled.
• Mortgage Loan Report (MLR): This is a The training is short and simple, because the
credit based report that negates the need for system is so easy to use. On-going training and HOLIDAY
the credit union using an attorney to conduct a telephone support is provided to all users.
title search. The report, along with a system- If you would like a demonstration of The League office will be closed on Mon-
generated Borrower’s Affidavit, will insure the MemberClose, please call Bill Smith of Members day, September 5 for Labor Day. The
credit union’s lien position. Insurance Agency at 1-888-746-2476. League’s regular office hours are Monday
through Friday 8:00 a.m. to 5:00 p.m.
ID theft worries on the rise
N Ninety-five percent (95%) of consumers are
worried about being fraudulently impersonated
and having their credit ruined and debts run
up – an increase of 20% from 2000. According
A majority of consumers surveyed – 87%
— believe that companies that do not protect
personal information should be required by law
to pay to restore credit ratings. Fines on these
“People need to be more protective of their
personal information, particularly with whom
and how they share it, whether online, over the
phone or in person,” said Dan McCabe, vice
to Chubb Group of Insurance Companies, companies were supported by 65%, with president of Chubb & Son. If such thefts
more than 20% of the more than 1,850 survey criminal charges desired by 63%. Sixty-four occur, 28% believe it would take more than a
respondents reported they had been victims of percent of the respondents said they disclosed year to rectify the problem and 40% think it
identity theft or fraud. Twenty-seven percent confidential information by phone or online in would cost more than $1,000.
said their credit card or one of their family the past six months.
members’ cards had been fraudulently used –
up from 19% in 2000.
Bankruptcy filings jump in first quarter
G Government figures show a 7.9% increase
in bankruptcy filings during a three-month
period ending March 2005. Information
posted by the Administrative Office of the U.S.
Courts in June showed 401,149 bankruptcies
McLain said recently that the last quarter figures
are the real indication of what is likely to occur
in terms of bankruptcy activity during this year.
“The number of filings is likely to rise later
this year as debtors’ attorneys are expected to
changes in the new “means test,” language for
reaffirmations of debt, and eventually in
Regulation Z, Truth in Lending Act, disclosures.
They also will be required to provide a toll-free
number so members can find out how long it
for that period compared to 371,668 during advise debtors to file before a new law, The will take to pay off debts if they pay only the
the previous quarter. Bankruptcy Abuse Prevention and Consumer minimum requirement. While credit unions
A release from the Administrative Office Protection Act of 2005, goes into effect in mid- can continue providing credit counseling,
focused on an overall drop in bankruptcy filings October,” said McLain, who is assistant general bankruptcy trustees must approve the agencies
over a twelve month period, but the Credit counsel and senior compliance counsel for providing the mandatory counseling for filers.
Union National Association’s (CUNA) Mike CUNA. He said credit unions can expect
CUNA stuffer explains new bankruptcy laws
W With almost every new law, consumers are
bombarded by messages from both advocates
and detractors of the change, which can muddy
their understanding of how the changes will
a fee-based lending product designed to help
credit union members meet their loan
obligations during a number of unforeseen
circumstances. “Debt Cancellation Pays, When
new contribution limits that came to fruition
through the tax cuts. The stuffer also highlights
the differences between the traditional and the
truly affect them. Because the recently passed You Can’t” (stock number 26759) provides an New surveys and current tax deduction
Bankruptcy Abuse and Prevention and introductory view of the product and how it figures for home equity loans were included in
Consumer Protection Act of 2005 is no can help in times of disability, unemployment, the most recent version of “Home Equity Loans
exception, CUNA created a new statement and death. Put Your House to Work” (stock number
stuffer to provide a clear and unbiased As additional provisions of the Fair and 20055). It also defines the loan versus the line
explanation of how the law will affect credit Accurate Credit Transactions Act (FACT Act) of credit, re-payment terms and conditions, and
union members. of 2003 have now taken effect, the “Your Rights potential risks for consumers to consider.
The “What Bankruptcy Reform Means to Under the Fair and Accurate Credit Finally, “Helping Your Teen Become
You” statement stuffer (stock number 25113) Transactions Act” statement stuffer (stock ‘Accountable’” (stock number 23103) offers
illustrates how abuses in the system cost families number 25740) was revised to include the new tips and advice for parents to help introduce
as much as $550 a year in higher prices for developments and how they will help basic money management topics to their teens
consumers, higher loan rates, lower savings consumers. Overall, the stuffer helps credit such as how to choose the right checking
yields, and higher fees. The stuffer addresses union members understand and protect the account and manage spending.
consumers in general as well as credit union information in their credit reports and details For more information, to view a PDF version
members in particular and explains the three how to get help when their financial of the statement stuffers, or to buy online, go
key elements of the new law that received strong information has been stolen, plus it details the to buy.cuna.org, type “stuffers” in the search
support from credit unions. new responsibilities financial institutions will box or a specific stock number in the product
have under the FACT Act. finder box. To order through CUNA Member
Other new and revised stuffers include: “IRA Changes Power Your Savings” (stock Service, call (800) 356-8010, press 3, and use
The second new statement stuffer overviews number 23655) was revamped to reflect the the stock number as a reference.
Calendar of Events
Webcast Seminars Empire Corporate Federal What the Future Holds
August 17 - Generating & Keeping Loans Credit Union’s Strategies Conference for the Financial Industry
September 28 - How to Read and Sell from September 13-15, 2005 September 21, 2005
a Credit Report Newport Marriott Radisson Hotel
Newport, RI Milford, MA
QUICKBITES (one hour telephone
conferencing) Credit Union Employee Boot Camp Empire Corporate Federal Credit
August 31 - Only the Paranoid Lenders September 20, 2005 Union’s Ops Outlook Conference
Will Survive Empire Corporate Federal Credit Union October 18-19, 2005
September 20 - Robbery and the Security Warwick, RI Marriott Hotel
Awareness -or- Albany, NY
September 29 - Marketing: Creating a October 17, 2005
Credit Union Center Fall Conference
Marlborough, MA October 28-30, 2005
Cliff House Resort & Spa
City of Boston Credit Union, a $212
million, state-chartered credit union located in
Boston, is seeking a Marketing Director to direct
the development, implementation, and
Classifieds maintenance of its marketing, public relations
and sales programs. Reporting to the CEO,
this position will be directly responsible for all
marketing programs and developing tactical
plans consistent with the overall objectives of
CEO/President Chief Lending Officer the credit union. Duties will include developing
The Board of Directors of a Providence, Massachusetts State Employees Credit copy and materials for promotional offerings,
Rhode Island based credit union is currently Union (MSECU) is seeking a Chief Lending ongoing products and member communica-
seeking a new CEO/President for this finan- Officer. This is an excellent management career tions. This position will also be responsible for
cially sound $190M credit union. Successful opportunity for the right person. We are looking developing internal sales programs to increase
candidates must have at least 5 years of broad for a dynamic individual to assume product sales and cross-sell ratios.
based financial and management experience responsibility for all consumer and mortgage Interested candidates should be prepared
with a prior leadership role in the credit union lending activities. Strong background in all to provide a portfolio of materials that they have
industry and/or banking industry of compa- lending functions and proven management developed from prior experiences. A Bachelors
rable size plus a minimum of a Bachelor’s de- experience are required. Marketing sensitivity Degree in Marketing or five (5) years experience
gree. Successful candidates will be responsible and the ability to implement, monitor and in a marketing management position, preferably
for the implementation of the strategic vision manage various cross selling programs necessary. within the credit union or banking industry, is
set by the Board of Directors and oversight of Position reports directly to the CEO. MSECU required. A working knowledge of credit union
the credit union’s lending, financial and opera- is an equal opportunity employer. Please email regulations pertaining to marketing and
tional activities. This credit union is an equal your resume and salary requirements to advertising is also required
opportunity employer. For confidential consid- firstname.lastname@example.org. You may also fax to City of Boston Credit Union offers a
eration candidates must submit resume no later (617) 227-6696 or mail to Mr. John J. Morrissey, competitive compensation and benefit package.
than August 15, 2005, including salary history President/CEO, Massachusetts State Employees For consideration, please send your resume to
and salary requirements to: Search Committee, Credit Union, 101 Merrimac Street, Boston, Human Resources, City of Boston Credit Union,
P.O. Box 28007, Providence, RI 02908-9939. Massachusetts 02114. One Union Street, 3rd floor, Boston, MA 02108
or fax to (617) 635-1367.