Indiana Credit Union League, Indianapolis, through its Indiana's Credit Union for Kids program has raised more than $57,000 for James Whitcomb Riley Hospital for Children. This year's contribution is targeted for the Medical Service Area, an outpatient clinic which is currently under construction. The new MSA will offer rehabilitation services on an outpatient basis. Financial Resources Federal Credit Union, Bridgewater, N.J., has raised $25,000 to benefit Arc of Somerset's Camp Jotoni during the annual Golf Classic held at the Deal Golf and Country Club here. Camp Jotoni is an organization for children and adults who are medically or environmentally at risk for learning disabilities. The money raised will be used to continue bringing services and activities to the camp's participants. FRFCU has $250 million in assets and serves 40,782 members....

Core One Credit Union, Columbus, Ohio, has awarded HBE Financial Facilities a $2.98 million contract to design and build its new home office. The two-story, 14,275 square foot building is scheduled to be completed in the spring of 2001. COCU has $124.7 million in assets and serves 9,362 members. Fort Community Credit Union, Fort Atkinson, Wis., has awarded the Redmond Company in Waukesha a contract to design and build its new Whitewater branch. The 3,800 square foot facility is scheduled to be completed in November 2000. FCCU has $64.4 million in assets and serves 11,555 members. Nazarene Credit Union, Brea, Calif., has approved the financing of $2.5 million to help construct the new Nazarene District Center for the Los Angeles District Church of the Nazarene. The new building will be a three-story structure with over 23,230 square feet of space. Nazarene Credit Union has more than $112 million in assets and serves 15,645 members. Fiscal Federal Credit Union, Glendale, Calif., has announced the grand opening of its new Warner Center branch in Woodland Hills. During the ribbon-cutting ceremony, Fiscal FCU received congratulatory scrolls from L.A. County Assessor, Rick Auerbach, and the offices of L.A. County Supervisor Zev Yaroslavsky and Councilwoman Laura Chick. FFCU has $107 million in assets and serves 15,859 members....

Heritage Community Credit Union, Sacramento, Calif., has awarded the first Susan L. Blakeman Memorial Scholarship to Michele S. Rogers, a California State University, Sacramento student. Named after the credit union's late former senior vice president, the scholarship has been established to bridge a partnership with the educational community. Rogers has received a $1,000 award which will help finance her final year in the teacher preparation program. She plans to become a middle school science teacher by 2001. HCCU has $186 million in assets and serves over 30,000 members. Electro Savings Credit Union, St. Louis, has awarded $1,000 scholarships to three members of its teen savings club, New Attitudes. Cynthia Pozzo of Oakville Senior H.S.; Laura Neff of Mehlville Senior H.S.; and Amy Lazalier of Parkway West High School were chosen based on their academic achievement, extra-curricular involvement, and a written essay on what they hope to accomplish through furthering their education. ESCU has $60.4 million in assets and serves 16,629 members....

RANCHO CUCAMONGA, Calif. - The California Credit Union League will hold a conference, Aug. 16-17, for call center managers that will focus on emerging call center operation strategies, technologies, services and applications. Among the list of speakers for the two-day conference at the Hyatt Regency Long Beach are Rhonda Clerkin, senior manager of the call center for clothing retailer Lands' End; Gayle Watson, president, Performance Solutions Inc.; and Dee Sanford, president, Dee Sanford and Associates, Customer Interaction Specialists. The Call Center Summit is a program of the Call Center Managers Network, a league-sponsored network of credit union professionals who are responsible for credit union call center issues. The network is one of four that the CCUL coordinates through its chapters and professional networks section. - ekingoff@cutimes.com...

SALT LAKE CITY - A last minute add-on provision-unrelated to field-of-membership-to the state's credit union act is at the center of a legal appeal fracas concerning member business lending brewing between Mountain America Credit Union and the state regulator. At issue is the question of whether CUSOs are included in the intent of the MBL-related provisions in Utah Credit Union Act Amendments, S.B. 237 that were passed by the state legislature in 1999 (CU Times, March 31, 1999.) Specifically the law allows that for a CU to approve a member business loan: * a person must be a member at least six months prior to the date of the loan; * an individual cap of $250,000 or $1 million if secured by shares and deposits or federal guarantee' * a credit union's aggregate member-business loan cap is 1.25 times the sum of the actual undivided earnings-lower than the one adopted by NCUA of 12.25% of assets)-and the actual reserves other than the regular reserves. In addition, if a credit union approves a participation loan for a member, the person must have been a member of each of the participating credit unions for at least six months. On one side of the table is Mountain America CU, the second largest credit union in the state. President/CEO Gordon Dames argues that, "the law was designed just for credit unions, there's no mention of CUSOs." Facing Dames is state regulator Ed Leary who is sticking to his premise that, "CUSOs cannot do what credit unions are not allowed to do, even though CUSOs are not addressed in the law." "That's what CUSOs are supposed to do, that's why they're formed," Dames responded, and that's just what Mountain America's CUSO-Mountain American Service Organization, had been doing, until Leary issued his directive. At press time, Bruce Reading, attorney for MACU and MASO said the CUSO had agreed not to make any additional MBLs until there is a final determination. Prior to reaching that agreement, the CUSO had made two MBLs, one for $769,000, another for $525,000. There are no applications pending. Before S.B. 237 was passed, MACU made its own member business loans and they accounted for about 5% of the credit union's $722.6 million in assets. Reading said Mountain America knew in advance of notifying Leary about the CUSO's intent to make MBLs, what the regulator's position was "because of his predilections about credit unions and CUSOs making member business loans which he'd expressed several times previously." The business intent of a CUSO is just one of three issues involved in the case, Reading said. Another concerns the MBL cap. Since there's already a limit on how much a credit union can invest in a CUSO-5% of capital in surplus-that satisfies the legislature's intent, he said. Lastly, Reading explained that the banks' main dispute with credit unions providing MBLs revolved around credit unions' tax-exempt status. Since CUSO's are tax-paying entities, "that interest is satisfied," Reading said. "The law itself is well defined, but there are a lot of peripheral issues that aren't," said Dames. "The CUSO aspect is one of them. The reason of the law was to restrict credit unions from granting member business loans, there is no mention of CUSOs." At press time, Reading intended to file a complaint against Leary's directive in Third District Court on July 6. -...

RICHMOND - Who's representing credit union members, bank, insurance, telephone and other utility customers in the state regulator's office? That's a question state legislators hope to be able to answer by the time they complete a two-year study launched June 29. The study, say legislators, could result in a new mission for the State Corporation Commission and a breaking up of its powerful and far-reaching authority over many of the state's industries. We have a State Corporation Commission that clearly is one of the most powerful organizations in the state of Virginia, said Sen. Kenneth Stolle (R-Virginia Beach). He is one of 10 legislators on the panel. The General Assembly ordered the study at the request of Sen. Thomas Norment Jr. (R-James City), a leader of an earlier successful effort to deregulate the electric utility industry. Another panel appointee is Delegate Eric Cantor (R-Henrico). The study will be conducted by a legislative subcommittee that includes representatives of regulated companies. There will be no consumer advocates on the subcommittee. At press time, no credit union representatives were chosen for the panel, even though the state's credit unions and banks are regulated by the Bureau of Financial Institutions, an arm of the SCC. The SCC was created an an independent body in the 1992 state constitution to counter the political influence of the state's railroad industry. Its mission have evolved and grown since then to include regulation of industries such as credit unions, banking and insurance, securities and investments, electric, gas and communication companies. So far, the State Corporation Commission has hired an Ohio-based consultant to hire its organization, structure and processes. The consultant is not evaluating the SCC's policies. Those are defined by the state constitution and legislative actions. -...

House Banking Committee subcommittee members express their outrage to NCUA over the agency's proposed community action plan........................................Page 4...

California credit unions are target of ABA's latest round of verbal attacks on CU expansion..................................Page 10...

SACRAMENTO, Calif. - A bill that among its provisions would require financial institutions to "organize, develop, and implement a model training program available...for purposes of elder and dependent financial fraud prevention, detection, and reporting," was among the list of bills scheduled to be heard by the state Senate Judiciary Committee before the July 4 holiday and whose hearing was canceled at the request of the author. A.B. 2253 was introduced by state Assembly Member Hannah-Beth Jackson (D-35) in February. It was passed by the full Assembly in May and was referred to the Senate committee. It was originally scheduled for its first hearing there June 21. The bill is sponsored by the California Bankers Association and supported by the California Credit Union League. A.B. 2253 would allow people who work for any types of state-chartered financial institution and who suspect a member or other consumer of being financially abused, to disclose certain information on that person to the appropriate government authorities for investigation purposes. The bill also provides that the financial institution and its officers, employees and agents are not liable to any person for disclosing information and facts. Existing state law makes it a misdemeanor the withholding of or failure to report "physical abuse, abandonment, isolation, financial abuse, or neglect of an elder or dependent adult." Another bill also pending a hearing in the Senate Judiciary Committee is A.B. 1973 which seeks to regulate payday lenders. A.B. 1973 was introduced in February by Assembly Member Herb Wesson (D-47). It was passed by the full Assembly 66-3 in May. Existing state law requires that the face amount of a deferred deposit check not exceed $300 and that a deferred deposit transaction be made after receiving written agreement. A.B. 1973 would cap the face value of a check at $300 or 25% of a customer's gross monthly income, whichever is less. The bill would also require a check casher provide the Department of Justice with specified information, and permit the customer who enters into a deferred deposit agreement to rescind the transaction at no cost at any time prior to the close of business following the date of the transaction by paying the check casher back the amount advanced. Check cashers would be required to make credit counseling information to their customers. Not included under the provisions of the bill are check cashers associated with state-chartered credit unions or state or federally-chartered banks or savings associations. -...

BOSTON - As part of what he referred to as "an ongoing effort to educate consumers on the perils of payday loans," Commissioner of Banks Thomas Curry, along with Consumer Affairs Director Jennifer Davis Carey have released a report they say "strongly" cautions consumers to avoid Internet payday lending companies. With an Internet payday loan application, a payday lender electronically transfers funds into a consumer's checking account. At the close of the loan term, usually following the deposit of the consumer's next payroll check, the payday lender automatically deducts the loan amount and interest charged from that account. As a result of the Massachusetts Commonwealth's Small Loan Law's usury cap on small loans, no payday lenders are physically located in Massachusetts. However, said Curry, a growing number of companies are offering payday loans over the Internet. These companies aren't licensed by the Division of Banks, so they're subject to little or no regulation. Consumers who have been victims of doing business with an unlicensed Internet payday lender have little or no recourse if they run into problems with the lenders. Curry said he's also concerned about the amount and type of information many Internet payday lenders require. "I can see no legitimate reason why companies would require such personal information as your ATM PIN, license plate number, social security number, mother's maiden name, height, weight or eye color." In comparison, Internet payday lenders provide little or no information about themselves, said Curry. Copies of the report, "Internet Payday Loans - Risky Business" are free and available by calling the division at (800) 495-2265, extension 502. It's also available on the Division's Web site - www.state.mas.us/dob/....

WAUKESHA, Wis. - For many Americans, the main obstacle standing between them and owning a home is being able to save enough money for a downpayment. For the 78,000 members of Landmark CU, the dream of owning a home has become reachable. Landmark CU, the largest credit union in the state-$486 million in assets-is making a new Zero Down Home Loan product available to members to complement the credit union's First Time Home Buyers Program. The new loan has a fixed-rate and it waives all closing costs for buyers who have never owned a home or have not owned one for at least three years. Coupled with the First Time Buyers Program which Landmark has offered for seven years, members are able to purchase a home with no down payment, no closing costs, and no escalating interest rate. "We find many young couples with excellent income levels and good credit records who have not been able to save for a down payment because they have had a lot of `starting out in life' expenses," said Betty Feierstein, vice president of the credit union's mortgage department. "If they live in a nice apartment, the monthly rent can be more than an average mortgage payment. So buying a home is in their best interest." The Zero Down Home Loan has an amortization of up to 30 years. There is no maximum income limit or first-time buyer counseling required. The borrower must have at least two months reserve of their principal, interest, taxes and insurance payment. The first mortgage is for 95% of the value, as is at Landmark's standard interest rates. The remaining 5% is loaned as a second mortgage at approximately 1 1/2% higher than the first mortgage rate. The loan is restricted to single family, detached, owner occupied homes and is available to all CU members. All applicants must pass the same income and credit standards of the credit union as other mortgage product applicants. With attractive terms like these, why would any of Landmark's members choose to take out a different type of mortgage loan with the credit union? To reduce their monthly payments, said Feierstein. "Why would anyone choose to finance 100% of their home if they don't have to?" At press time, the Zero Down Home Loan product was barely one month old and Feierstein said 15 members had already applied for it. Landmark has $139 million in mortgages on its books. Another $350 million in mortgages are owned by Fannie Mae. Its total loan portfolio is $429 million. -...

JEFFERSON CITY, Mo. - The seven-person state Credit Union Commission met June 30 by conference call and approved field-of-membership expansion requests for five credit unions. Approved for FOM expansion were applications from Spirit of St. Louis CU (to add St. Louis City, St. Louis County and St. Charles County); Missouri National Guard CU (to add Moniteau, Callaway, Osage and Cole counties); Alliance CU (to add St. Charles and St. Louis counties); First Community CU (to add St. Louis, St. Charles and Jefferson counties, as well as some zip codes); St. Louis Postal CU (to add various zip codes and well as an expanded definition of immediate family.) All of the populations included in each of the FOM applications exceeds the 3,000 limit, as defined in the state's credit union law. However, the commission has the authority to waive that limit. John Smith, director of the commission said, "the 3,000 limit is merely a threshold to determine whether a new credit union should be formed. The law allows that when there is no group to form a new credit union, the commission can approve the application and send it to the director." Smith will publish notice of the application approvals in the August edition of the Missouri Register. After that it will go through a 10-day comment period before Smith reaches his decision....

DALLAS - May 9, 2000 could prove to be a historic day for both credit unions and Muslims throughout the state of Texas. It was on that date that members of the Dallas-Ft. Worth Muslim community met with Texas credit union authorities to discuss the possibility of setting up a very unique financial institution. So unique, in fact, that no credit union like it exists. This institution would lend to its members without charging interest. While such a practice is unheard of to the majority of Americans, it is an answered prayer for local Muslims. According to the Koran, the sacred book of the Islamic faith, Muslims are strictly prohibited from receiving or paying interest. The creed stems from a strong sense of community and the conviction of Muslims to contribute to that community. This includes financial contributions. An individual earning interest is looked upon as hoarding a valued commodity that could otherwise be used for the common good. When the ramifications of this Islamic tenet are examined, it becomes obvious that the things that most Americans take for granted are next to impossible for the devout Muslim. Buying a home or owning a car are distant dreams. Buying Homes Interest Free Ahmad A. Sbaiti, president/CEO of Alshall International USA in Dallas, is one Muslim businessman who wants to change all that. Sbaiti is one of 80,000 Muslims residing in the Dallas-Ft. Worth area. He is spearheading a grassroots effort to form a credit union that would cater to the special needs of the Muslim community. So how would it work? What would this credit union look like? While it's true that no credit unions in this country currently give non-interest loans to members, there are a few institutions that attempt to reach the Muslim market segment. The Bank of Kuwait, for example, operates a branch in New York City and had a representative present at the May 9th meeting. The planned credit union would start by offering only savings and checking accounts and later expand its offerings to include non-interest loans for cars, homes and businesses. The checking and savings accounts would not earn interest, but rather pay dividends - an acceptable form of profit under Islamic law. But how does one get around interest-based mortgages? This is where the Bank of Kuwait and other financial companies that cater to Muslims serve as a model. When buying a home, both the member and the credit union would make the purchase. The Koran dictates that borrowers cannot pay back more than the actual loan amount. So the credit union member would pay rent on the house and repay the credit union for its ownership share. Purchasing an automobile would be handled in a similar manner. There is one Islamic restriction, however, that has yet to be overcome, according to Sbaiti. Credit cards will probably not be offered by the credit union. This form of payment remains taboo for the faithful Muslim, since there is no way to guarantee that an individual will pay off the balance each month. Putting the Plan to Action Sbaiti's plan looks good on paper. But how does he intend to make it a reality? A group of like-minded Muslim businessmen have coordinated their efforts to lay the groundwork for this promising endeavor. The group has sought the assistance of Tom Hodge, vice president of the Texas Credit Union League's Credit Union Consulting Services and Sales, to take the necessary steps to establish this sorely-needed institution. Hodge was instrumental in arranging the May 9th meeting, which proved to be a turning point that would set the wheel in motion. Harold Feeney, Texas Credit Union Commissioner, was among those present. "The purpose of the initial meeting was to see if we had any adverse reaction to the formation of this type of credit union," Feeney explains. "They didn't want to go to the trouble of developing a business plan if we weren't in tune with what they are trying to do." Whether or not the Texas Credit Union Department is completely in tune with Sbaiti's group remains to be seen. But Harold Feeney is optimistic. The business plan and requisite documents will demonstrate the economic feasibility of the venture. "There is a great interest and apparently a great need for financial services," says Feeney. "So we sincerely hope that it would be viable." Now the organizers of this would-be credit union are hard at work developing the two-year business plan required in order to get a state charter. The Texas Credit Union League is coming alongside the group to get all their ducks in a row. Prior to writing a business plan, several things must be accomplished - like assembling a board of directors. A field-of-membership must also be defined and approved. Along those lines, surveys have been sent to Muslim individuals in an effort to ascertain the interest level in the community. Tom Hodge would like to see 300-500 of these surveys returned to get a representative sampling. It is the desire of the organizers that the new credit union open its doors to the 80,000 members of Muslim mosques throughout Dallas County. Hodge's concern is that this may be a bit ambitious. He would rather see the charter limited to four or five mosques and expand when the credit union is ready for growth. However, he says if enough interest is generated, it would be difficult to discourage the group from seeking the full field of membership. Finally, three primary expenses of the undertaking must be addressed. There is the overhead associated with paying employees, installing and maintaining computer hardware and software, and the physical location of the credit union. Once the research is done, Sbaiti will contact Hodge to take the next step. "We might even be able to submit the plan to the state before the end of this year," says Hodge. If so, Sbaiti's goal of opening the credit union in the summer of 2001 just might come to fruition. With it would come life-changing opportunities for a group of Muslims for whom the advantages of car and home ownership were previously unavailable. -...

STRATFORD, Conn. - Sikorsky FCU, which has applied to become the first federal credit union in the state to convert to a state charter (CU Times, May 3) has now filed an amendment with State Banking Commissioner John Burke's office to expand the field-of-membership of its pending application which already includes a statewide FOM with the specific exclusion of the existing FOM's of 11 smaller state-chartered credit unions. The amendment filed June 26 adds to that FOM, "Out-of-state employees of current select employee groups and employees of this credit union, persons retired as pensioners or annuitants from the above employment, members of their immediate families, households, and organizations of such persons." At a public hearing held in early June, representatives from the state's credit unions voiced their opposition to the proposed charter. At press time, Dave Tedeschi of the commissioner's office said Burke has given no indication when he'll decide on Sikorsky's charter conversion and FOM application....

WASHINGTON - American's incomes in May rose twice as fast as their spending, pulling the country's personal savings rate up to its highest point since the beginning of the year. The U.S. Commerce Department reported that personal income, including wages, interest and government benefits, rose 0.4% in May. That's slightly higher than the 0.3% gain analysts were predicting. At the same time, spending increased only 0.2%. Some analysts are reading this as a sign that the intent of the Fed's interest rate increases-to slow down consumer spending and thereby slow the economy-might be working. Consumer spending accounts for two-thirds of all economic activity. It was the second consecutive month that incomes rose faster than spending. The personal savings rate rose 0.6% in May from 0.4% the previous month. May's rate was the highest since 0.8% in January....

FEASTERVILLE, Pa. - The $210 million IGA Federal Savings Bank, the former IGA FCU, may wind up being owned by PSB Financial Corp., the parent company of the $255 million First Penn Bank. IGA FCU was the first credit union to convert to a stock-owned thrift. The former credit union is owned by Jade Financial Corp. Jade came under intense criticism earlier this year from a couple of large shareholders who questioned Jade's $2 million investment in BankZip.com, a bank owned Web site that offers online services to other banks. The investors said Jade should sell its stake in BankZip.com and focus on its core community banking business. Now, according to an American Banker report, PSB Financial has an option to buy 7.4% of Jade Financial's stock from Lawrence Seidman, one of the investors who was upset by Jade's $2 million investment in BankZip.com. Buying 7.4% of Jade's stock would be a major step toward acquiring Jade, which competes with PSB in the Philadelphia area. Last month, NCUA approved the first merger between a bank and a credit union. Caney Fork Coopeartive was approved to merge with Beacon Federal Mutual Savings Association, East Syracuse, N.Y., the former Beacon FCU....

Herndon, Va. - NACHA - The Electronic Payments Association will hold its third annual electronic check conference on September 11-12 in New Orleans. At Electronic Check 2000, leading retailers, billers, financial institutions and service providers will share solutions on the challenges of converting paper checks to electronic transactions. The sessions during the two days will cover the latest advances in electronic checks, such as the implementation of electronic check conversion at the point-of-purchase; corporate check conversion; Internet checks; authorization issues, and legal and regulatory frameworks. The conference offers two days of general sessions, breakout sessions, workshops, lunches and social events. Additional information about the conference is available on NACHA's Web site, www.nacha.org or by calling (800) 487-9180....

WASHINGTON - Voting began the week of July 3 to fill 11 open seats on the CUNA Board. Eighteen nominations were received by the association. They are for: District 1 (Northeast) - three nominations Class C (CUs over 40,000 members); one nomination Class D (leagues). District 2 (Mideast) - two nominations Class A (up to 10,000 members). District 3 (Southeast) - two nominations Class B (CUs 10,000-40,000 members). District 4 (Midwest) - two nominations Class A; three nominations Class C. District 5 (Plains and Rockies) - one nomination Class B, one nomination Class D. District 6 - (West and Pacific) - 1 nomination Class A; one nomination class B; and one nomination class D. Credit unions can vote through Aug. 8....

SACRAMENTO, Calif. - The state Department of Financial Institutions approved two more credit unions, the week of June 26, to convert from a federal to a state charter. ACU FCU, Redwood City filed in November 1999 to convert. It has $34 million in assets and about 8,500 members. Alliance FCU, San Jose-one of the largest federal credit unions in the state, with $186 million in assets and more than 43,000 members, filed its application this past May. At the same time the DFI approved charter conversion applications, it accepted new ones from 1st City Savings FCU, Glendale; Kaiser-Lakeside FCU, Oakland; Marine Corps West FCU, Camp Pendleton and Unipac FCU, San Francisco. That brings to 17 the total number of applications DFI has accepted so far this year from federal credit unions to convert to state charters. The DFI also accepted merger applications from Anaheim Area CU into Orange County's CU, Santa Ana; Central Coast CU and Las Flores CU, both in San Luis Obispo, into County City CU; and Placer Nevada Grange CU, Auburn into Butte FCU in Biggs....

NEW YORK -Testifying recently in the Justice Department's antitrust suit against Visa and MasterCard, Kenneth I. Chenault, president and chief operating officer of American Express Co., said that his company is interested in offering an offline, signature based debit card, "that would be priced lower than Visa and MasterCard" but had no strategy to release it because the banks fear they could lose access to the associations' ATM networks, Cirrus and Plus. "I would like to give our customers a choice of debit products," Chenault said. He said that MasterCard and Visa rules stand in the way of Amex offering a viable debit product. According to Chenault, his company's goal is to get bank card issuers to issue American Express cards in addition to Visa and MasterCard, to increase transaction volume over the Amex network. The bank pitch is that their profitability will increase because Amex charges merchants a higher fee and Amex customers generally spend more on their cards. Lawrence Popofsky, a Visa attorney, challenged Chenault's version of events citing Amex's recently launched online bank, Membership Banking, with about 30,000 customers who have access to online debit cards as proof that the company has the opportunity to increase its market share in many ways that do not involve partnerships with U.S. banks. Popofsky then contended that Amex had its own exclusionary rules, such as the co-branding deal between American Express and Costco, the retailer cannot accept any other card brands at its stores. Chenault said the rule was made at Costco's request but when pressed as to the reasons behind the brand exclusion, Chenault said he did not know the full details of the contract....

Fairborn, Ohio - Patrick Gantt, CEO of Wright Patt CU died of a sudden heart attack July 1. Gantt was 49. He'd been with Wright-Patt for over 22 years, serving as senior vice president before being named president in 1998. Gantt was also recently selected to serve on the board of directors of Corporate One CU; was president of the Dayton Area Credit Union Managers Association (DACUMA) and was associated with the Miami Valley Economic Coalition. Gantt is survived by his wife, daughter, son, daughter-in-law and grandson. The funeral was held July 5....

WASHINGTON - Looking for a specific NCUA regulation? Having difficulty finding a federal credit union law? By the end of the summer, credit unions will be able to trace that type of information - and more - through CUNA's "E-Guide to Federal Laws and Regulations" on the association's Web site. Information to be included in the e-guide will cover about four dozen regulations and laws broken down by topic. Credit unions will be able to retrieve summary information about the regulation or law, as well as review answers to frequently asked questions. There will also be an "Other Resources" section that will direct credit unions to links where they can access the specific related NCUA regulation. The new tool will be available to CUNA members only. By the time it's published, CUNA's e-guide will complement NCUA's examiners guide for credit unions that's available now on the agency's Web site. The last time the examiners guide was updated was June 1997, so credit unions browsing the site can expect to find a lot of changes to related information, especially in the chapters on CUSOs and lending. The new electronic format means it is easier for NCUA to update the guide and provide the most current information, "so there's more of a comfort factor," Katherine Thompson of CUNA said. "It's better than having to read through more than 1,200 pages of text." NCUA plans to continue to make the printed version of the examiners guide available to credit unions. It costs $85....

ALEXANDRIA, Va. -Four federally chartered credit unions were lost to state charters from merger activity in May and two changed sides as a result of a charter conversion, recently released NCUA regional director activity data indicated. In addition, the May "Regional Directors' Actions Taken Under Delegation of Authority" report showed that a region-wide total of another 8 multiple-SEG FCUs converted to federal community charters in the month for a total potential membership of almost 950,000 people. Year-to-May 31 there have been 28 multiple-SEG-to-federal community charter conversions approved at the regional level and four at the NCUA Board level for a total potential membership of 3.5 million. The May regional director figures now bring the year-to-May 31 FCU-to-FISCU conversion total to seven and the total federal charter losses from merger activity for the same period to 15. During that period only one FISCU converted to a federal charter. Perceived FCU flight from federal to state charters is an increasing concern of CUNA and especially NAFCU, with both trade associations pressing NCUA to take steps to bolster the value of the federal charter....

MADISON, Wis. - CUNA Mutual has unveiled a new Web-based HR tool. "MyWave,'' is currently available to customers of CUNA Mutual's Employee Benefits program. "MyWave'' offers a library of information geared at answering common insurance questions, including benefits, labor law and health issues. "MyWave'' also provides updates on federal labor legislation and administrative information on federal programs, including forms and frequently asked questions related to COBRA, HIPAA AND FMLA. "CUNA Mutual's consulting services deliver the latest in technological advances,'' said Mike Evert, Employee Benefits Brokerage Manager. "With `MyWave,' credit union HR managers can transfer the burden of information gathering and get on with more important issues. TheInternet has provided that link," he said. For more information on MyWave call (800) 333-2644....

GLENDALE, Calif.- CUShopper, provider of an online credit union member shopping network, has named Brian L. Heess vice president of Information Technology. Heess will be responsible for all technology issues and telecom projects and planning for CUShopper. Heess was co-founder of Vanguard InterActive, a Web development and marketing company. He was responsible for all technical aspects of Vanguard's operations. Heess also helped establish EarthLink Network, Inc., the second largest Internet service provider in the world, where he was the first network operation manager. Former CUShopper CEO and current chairman, Adam Walker, also came from EarthLink Network....

CORVALLIS, Ore. - Two new interfaces developed by credit union data processor SUMMIT provide its CU clients with virtually unlimited access to third-party products and services, according to SUMMIT. Based on an open architecture approach, the Secure Interface Module (SIM) and the Secure Third Party Transaction (STTI) interfaces integrate SUMMIT system data and third-party product functionality. Based on an agreement among SUMMIT and the participating credit union, the third-party provider creates a "plug" to fit the Summit system interface "socket." Once activated, the interface accesses and delivers the set of data for the third-party product as defined by the credit union. SIM is the conduit for real-time monetary and inquiry transactions initiated via third-party audio response, Internet banking systems and via future technologies. The interface handles account inquiries, transfer of funds, bill-payment, and more. Each interaction with the SUMMIT system via SIM or STTI is encrypted and decrypted using the Data Encryption Standard ("DES"). DES uses 72,000,000,000,000,000 (72 quadrillion) or more possible encryption keys. Each encryption key is unique. SUMMIT currently has 310 CU clients. -...

MADISON, Wis. - After months of wrangling in court, on May 17, a Wisconsin judge upheld a previous decision by the five-member Credit Union Review Board agreeing that a credit union service organization has the legal authority to offer business loans to credit union members. The Business Lending Group was formed last May by Banta Community CU of Menasha, Citizens First CU of Oshkosh and Fox Community CU of Appleton as a CUSO to originate member business loans up to $1 million. The Wisconsin Bankers Association, a Madison-based trade group representing more than 400 banks, questioned the legality of forming such a group, and the organization proceeded to file a lawsuit in January accusing the credit unions of violating the state's credit union statutes which stipulate that services provided by a CU corporation such as BLG, are limited to the "services associated with the routine operation of credit unions and credit union organizations" (CU Times, July 29, 1999.) The WBA along with Anchor Bank of Madison and F&M Bank of Kaukauna had their initial complaint thrown out late last year by the Credit Union Review Board, an advisory group appointed to serve as liaisons to the state's Office of Credit Unions. Similarly, the Wisconsin Department of Financial Institutions, the agency that regulates banks also dismissed the complaint. At this point, the banking trade group has chosen not to appeal, said Rose Oswald Poels, vice president of legal affairs for the Wisconsin Bankers Association. "Our reason for not appealing further was not that we weren't concerned but because the legality of our suit was overruled at two stages," Poels explained. Poels said the association "will continue to monitor the activities of the Business Lending Group to make sure the [company] isn't crossing any lines." Meanwhile, the Business Lending Group will proceed with business as usual, said David Coggins, the group's president. After the last dismissal by the DFI, Coggins said they've "tried to keep a low profile and tried not to inflame" an already inflammatory relationship. "We were hoping it would quietly go away," Coggins added, "because the issue for us has always been to provide a much-needed service to credit union members." Coggins said two area businesses will be issued loans in August but declined to name the companies. While the DLG is "protective of its chartering information," Coggins said he's talked to credit unions in Colorado, Utah, Michigan and Florida who have expressed interest in forming similar business lending venues. -...

RANCHO CUCAMONGA, Calif. - The California Credit Union League is licensing its line of equity loans products that are part of its equity lending system, to other leagues. State leagues can subscribe to one or more of four equity loan programs: Equity Entree, for open and closed-end home equity loans; Auto Equity, for closed-end, fixed-rate vehicle loans; Equity Advantage, for closed-end, fixed-rate signature loans; and Equity Card, for credit cards. All the equity loans are written to the credit union's loan standards. The loans in the Equity Lending System are potentially tax-deductible because the credit union records show a deed of trust as an abundance of caution against the member's home. So members can deduct interest paid on various types of loans from their taxes. No appraisal or title insurance is required. State credit union leagues can modify the equity loan program to suit their state's rules and regulations governing equity loans. Research shows that credit union members with equity loans use an average of 5.3 services from their credit union, compared to an average of 2.5 services used by members without equity loans, said Brett Martinez, CCUL senior vice president, marketing and communication. So aside from saving members money, equity loans promote member loyalty and increase their perception of their credit union as their primary financial institution. -...

At first glance, credit unions and business lending may not seem to be a good match. Most credit union loans are provided for such items as cars, education and homes. But member business loans have been part of the credit union movement since the inception of credit unions in the United States more than 90 years ago, and are an indispensable element of the purpose of credit unions. The unique role of credit unions has always included providing people a source of credit they cannot affordably get elsewhere, to improve their lives and their communities. Making loans to members so that they can start, improve or expand a business is perhaps the most direct way in which credit unions, regardless of field of membership, can benefit an entire community. New businesses mean new jobs, new incomes and a broader tax base, all of which spread prosperity throughout a community. Credit unions - particularly community development and faith-based credit unions - make loans to small start-up businesses, homeless shelters, battered women's shelters, private schools and minority self-help housing projects, for maintenance of equipment such as fishing boats, tractor trailers and agricultural machinery, and for church construction. We make these loans now for the same reason we did 90 years ago: we are a resource for organizations and fledgling entrepreneurs that banks choose not to lend to. Today, there is another reason for credit unions to meet the business needs of their members. Mergers between big and medium-sized banks reached an unprecedented level in the last decade. These megabanks often bought up smaller, local banks. The result is that in many cases loan decisions are not made at the local level, where aspects of the borrower's character can carry as much weight as statistical data. Banks want to curb credit union member business lending for two reasons: to limit competition, and an erroneous belief that credit unions' mission does not include member business loans. Banks may also incorrectly suggest that credit unions don't understand the risks associated with these loans. Member business loans do present unique risks, but credit unions have demonstrated that they are adept at managing them. In fact, during debate over H.R. 1151, the Treasury Department indicated that member business loans do not constitute a safety and soundness problem. According to NCUA, as of year-end 1999, approximately 14% of federally insured credit unions offered member business loans. In all, federally insured credit unions had $3.9 billion in member business loans outstanding at the end of 1999. These loans made up only 1.27% of all federally insured credit unions' outstanding loans - hardly a threat to banks or to credit union safety and soundness. Unfortunately, the ability of federally insured credit unions to make member business loans has been sharply curtailed due to the first-ever cap on such loans, which was included in the language of H.R. 1151. Credit unions are now more strictly regulated in making business loans than any other loan-making institutions in the financial services sector. The banking industry, not credit unions, sought the loan cap of 12.25 percent of assets. The credit union movement and its advocates in Congress vigorously opposed a cap of any kind as unnecessary and damaging. Still, it is important to remember that a House of Representatives committee nearly passed an amendment that would have eliminated member business lending altogether. Credit unions were forced into the unwanted and undesirable position of either accepting restrictions on member business lending or losing H.R. 1151, a necessary legislative fix to a specific threat to the movement at that time. But expedient compromise does not mean forever accepting an undesirable situation. That is why California Congressman Ed Royce (R) recently introduced H.R. 4701, the Faith-Based Lending Protection Act. This bill, co-sponsored by 11 House members and supported by the California and Nevada Credit Union Leagues, would exempt from the 12.25% cap loans that credit unions make to faith-based, non-profit organizations. Many faith-based credit unions are exempt from the cap, but loan participations by other credit unions often make these faith-based loans possible. H.R. 4701 allows other credit unions to participate in these loans without moving closer to the cap. The Royce bill, and its companion bill in the Senate, is a much-needed modification to restrictions on member business lending. It will ensure that there is a source of capital for worthy projects that cannot obtain funding from other financial institutions. It is a beginning, and a good one. Business lending is part of credit union history, is consistent with credit union philosophy, and fills a growing need. We must and will continue to find additional ways of making the regulations governing member business lending more flexible....

Time for another potpourri look around the world of credit unions: * The Credit Union House in Washington, D.C. is moving along much more quickly than most observers thought it would. It appears that it will be a classy operation, in a premier location, with the size and flexibility to meet a growing range of credit union needs in the nation's capital. Kudos to CUNA for coming up with the idea and bringing it to fruition in record time. The $2.4 million, 8,300 square foot, multi-purpose structure is expected to be operational in 2001. When up and running, Credit Union House is going to be a first class credit union nerve center. I am continually amazed at the greatly increased visibility credit unions have achieved in recent years. I well remember the days when credit union representation in Washington consisted of little more than a retired general and a couple of support staff tucked away in an off-the-beaten-path office building. It's a shame that not all state leagues got behind CUNA on this worthwhile project. But apparently the door is still open to obtain 100% league support. Credit unions in those 15 or so leagues not signing on need to ask their leadership, "why not?" * Turning from the positive to the negative, one has to wonder what is going through NCUA Board Vice Chairman Yolanda Wheat's head these days. Out of the blue, she has resurrected one of Chairman Norm D'Amours' and the banking industry's high-priority goals, namely to get credit unions under the Community Reinvestment Act (CRA). Despite her good intentions, it's simply a very bad idea. Call it what you will (a rose by any other name), community action plan (CAP), CRA-Lite, or just plain CRA, it is unneeded and unwanted. It also has the potential of causing grave harm to credit unions. Plus, it already has irritated those that support CUs, like Senate Banking Committee Chairman Phil Gramm (R-Texas). Credit unions need less regulation as in RegFlex, not more. Wheat has opened Pandora's Box! Wheat, like D'Amours before her, has gone from regulating safety and soundness to micro managing credit unions. She appears to be utilizing her NCUA position to set social justice goals for credit unions. CAP will fail, but not before it encourages even more credit unions to dump their federal charter. *Conversion numbers should convince anyone that the state charter has become the charter of choice. The fact that some credit union leaders are so fed up with NCUA that they are clamoring for a recreation of the credit union share insurance fund, and have already stepped forward to put their money where their mouth is ($1,000 a pop), is further proof that grassroots credit union patience is rapidly running out. If the new entity gets off the ground, it will be private. That translates into state-charter credit unions no longer having to have any relationship whatsoever with federal regulator NCUA. More specifically, state charters will no longer have to subsidize a federal regulator that continues to grow as the number of credit unions decline. Nor will they need to endure double regulation without representation. * Speaking of NCUA and their outstanding ability to spend credit union money, it's a sure bet that behind closed doors NCUA officials are fuming at CUNA's creation of a commission to study the agency's budgeting process, something that is also of major concern to NAFCU. NCUA probably doesn't like the smell of this project any more than CUNA and NAFCU would appreciate NCUA appointing a commission to study the budgeting process of the credit union trade groups. Unfortunately, NCUA's actions and attitude made it come to this. Credit unions everywhere, check books in hand, will be eagerly awaiting the outcome of the deliberations. I'd say don't hold your breath. When all is said and done, NCUA will probably say, "thank you very much for your interest and attempt to help us manage this federal regulatory agency." And then conduct business as usual! * Finally, as proof that CUNA seems to be almost everywhere the word credit union is mentioned these days, they are also devoting some resources and leadership to an initiative that is long overdue. It's another commission. This one will be dealing with taking a close look at the ultimate horse and buggy of the credit union world, the 1934 Federal Credit Union Act. In a pro-active approach, about two dozen credit union leaders will be appointed to come together as the Credit Union Renaissance Commission. They'll huddle regularly with CUNA staff and leadership to take a look at where credit unions came from, how they got there, and most important what needs to happen legislatively and with regulations to have a successful future. I for one am excited to finally see an effort being made to do something positive for credit unions, rather than only going after those who throw up roadblocks to credit union modernization and their ability to better serve the American consumer. The banking industry got H.R. 10. Credit unions fought to salvage what they could after a disastrous Supreme Court decision. It's called H.R. 1151. It is not an H.R. 10. It is not what credit unions would have proposed if they hadn't had to mount a massive defense instead of a thoughtful offense. The Renaissance Commission knows all that and that's why it will be a positive action program, not another exercise in keeping the wolves from the door. I'll have much more to say on all these topics, especially the Renaissance Commission as it gets rolling. For now, the big thing I see wrong with Renaissance is not including NAFCU and NASCUS. CUNA alone, although admittedly the dominant player, is not the entire credit union industry. This undertaking is too important not to involve other key players that can make a significant contribution. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail mwelch@cutimes.com....

Multiple common bond expansion 5/1/2000-5/30/2000 Region...

FISI-Madison, a financial services provider, has named Robert C. Vedder national sales manager of its credit union division. ACTON Group, a financial services marketing consulting group, has named Jeff Platter regional sales manager. Premier Systems, Inc., a data processing service provider, has appointed Christi Green client response center representative. Southwest Business Corporation, an insurance and financial service provider, has named Dennis Miller vice president of account services for the state of Florida....

Kitsap Financial Services, Bremerton, Wash., a wholly owned subsidiary of Kitsap Community FCU, has named Susan Harrington manager. Bellco First Federal Credit Union, Greenwood Village, Colo., has promoted Phil Smith to senior vice president of sales and service. U-Lane-O Credit Union, Eugene, Ore., has promoted Lee Chase to senior loan manager; Ethan Nelson to senior loan officer; and Tiffany Van Tuyl to training coordinator. Stanford Federal Credit Union, Palo Alto, Calif., has named Mark L. Lovewell chief financial officer....

Delaware Credit Union League, New Castle, has elected the following officers to the board: Charles W. Miller, chairman; Joseph Rach, vice chairman; Cheryl H. Chilcutt, treasurer; and Dorlene Fox, secretary. In addition, Richard Gaidis has been named the 1999 Outstanding Credit Union Volunteer and Pamela Slater has been named the 1999 Credit Union Professional. Western Division Credit Union, Williamsville, N.Y. has named Deborah Baker vice president of lending. Baltimore Washington Credit Union Direct Lending Cooperative, a joint venture CUSO, has elected the following officers to the board: Mid-Atlantic FCU CEO Charles W. Thomas, chairman; State Employees Credit Union CEO Teresa Halleck, vice chairman; SSAFCU CEO Jack Houseknecht, treasurer; and Arlington Virginia FCU Vice President of Finance Ben Brown, secretary....

Texas Credit Union League, Farmers Branch, has elected Government Employees Credit Union of El Paso President Harriet May director of credit unions with more than $100 million in assets. Fort Bliss Federal Credit Union, El Paso, Texas, has re-elected Timothy V. Coffey, chairman; Dr. Linda Ann Riley, vice-chairman; and Thomas Vereb, director. EECU Credit Union, Fort Worth, Texas, has named Brenda Chancellor loan audit manager....

Indiana Credit Union League, Indianapolis, through its Indiana's Credit Union for Kids program has raised more than $57,000 for James Whitcomb Riley Hospital for Children. This year's contribution is targeted for the Medical Service Area, an outpatient clinic which is currently under construction. The new MSA will offer rehabilitation services on an outpatient basis. Financial Resources Federal Credit Union, Bridgewater, N.J., has raised $25,000 to benefit Arc of Somerset's Camp Jotoni during the annual Golf Classic held at the Deal Golf and Country Club here. Camp Jotoni is an organization for children and adults who are medically or environmentally at risk for learning disabilities. The money raised will be used to continue bringing services and activities to the camp's participants. FRFCU has $250 million in assets and serves 40,782 members....

Core One Credit Union, Columbus, Ohio, has awarded HBE Financial Facilities a $2.98 million contract to design and build its new home office. The two-story, 14,275 square foot building is scheduled to be completed in the spring of 2001. COCU has $124.7 million in assets and serves 9,362 members. Fort Community Credit Union, Fort Atkinson, Wis., has awarded the Redmond Company in Waukesha a contract to design and build its new Whitewater branch. The 3,800 square foot facility is scheduled to be completed in November 2000. FCCU has $64.4 million in assets and serves 11,555 members. Nazarene Credit Union, Brea, Calif., has approved the financing of $2.5 million to help construct the new Nazarene District Center for the Los Angeles District Church of the Nazarene. The new building will be a three-story structure with over 23,230 square feet of space. Nazarene Credit Union has more than $112 million in assets and serves 15,645 members. Fiscal Federal Credit Union, Glendale, Calif., has announced the grand opening of its new Warner Center branch in Woodland Hills. During the ribbon-cutting ceremony, Fiscal FCU received congratulatory scrolls from L.A. County Assessor, Rick Auerbach, and the offices of L.A. County Supervisor Zev Yaroslavsky and Councilwoman Laura Chick. FFCU has $107 million in assets and serves 15,859 members....

Heritage Community Credit Union, Sacramento, Calif., has awarded the first Susan L. Blakeman Memorial Scholarship to Michele S. Rogers, a California State University, Sacramento student. Named after the credit union's late former senior vice president, the scholarship has been established to bridge a partnership with the educational community. Rogers has received a $1,000 award which will help finance her final year in the teacher preparation program. She plans to become a middle school science teacher by 2001. HCCU has $186 million in assets and serves over 30,000 members. Electro Savings Credit Union, St. Louis, has awarded $1,000 scholarships to three members of its teen savings club, New Attitudes. Cynthia Pozzo of Oakville Senior H.S.; Laura Neff of Mehlville Senior H.S.; and Amy Lazalier of Parkway West High School were chosen based on their academic achievement, extra-curricular involvement, and a written essay on what they hope to accomplish through furthering their education. ESCU has $60.4 million in assets and serves 16,629 members....