HEADLINE NEWS

Holiday Spending Tips
     With December 25^th less than a month away, the Credit Union National Association (CUNA) and the Consumer Federation of America (CFA) suggest the following tips to avoid getting deep in debt during the holidays:
§      Budget Holiday Spending: Right now, decide how much you can afford to spend and stay within that budget.
§      Make a List: Staying within this budget will be much easier if you make a price list of all gifts and other holiday items you plan to purchase. It's easy to overlook extra expenses for holiday foods, party clothes, holiday décor and postage.
§      Comparison Shop: You can easily save more than 10% on most items, sometimes considerably more, by comparing prices at different stores. The easiest way to do this is to identify sellers using the Yellow Pages, then call several. Or use the Internet and compare offers online.
§      Pay Off Debts Quickly: If you must make holiday purchases using credit, early next year pay off this debt as soon as possible. Remember that credit card debt is relatively expensive. You may not realize your card's grace period – the time between your purchase and when interest is charged – doesn't apply if you're carrying over a balance. And if you only make the 2% required monthly payment, you may never pay off the debt.
§      Plan for Next Year by Opening a Christmas Club/Holiday Account: While these accounts do not pay much interest, they provide a practical way to save small amounts over time. Ask your credit union to automatically transfer funds from your checking to your Christmas Club account every month. The discipline of saving reinforces your good budget intentions.
     CFA and CUNA also offer these tips about using gift cards and the Internet this holiday season:
§      Be Smart About Gift Cards: If you give or receive a gift card, read the fine print. There may be a fee for checking your balance as well as a monthly inactivity, maintenance, administrative, or service fee. For example, some store cards deduct $1 per month after 24 months of nonuse. And remember, a gift card is handy and convenient, but like cash, if you lose it, it's gone.
§      Protect Yourself From ID Theft: Don't be "phish" food while holiday shopping online. If you get a pop-up or e-mail message requesting personal or financial information – it may be bogus. Don't reply or click on the link in the message. Initiate all contacts with companies to make certain you are accessing their websites, not phony ones. Also, review statements for accuracy as you receive them. If they're late, call the company to confirm billing address and balance. Use antivirus software and keep it up-to-date. Run a firewall, particularly if you have a broadband connection. Take advantage of free software "patches."
§      Shop Wisely Online: Be sure when you make a purchase to do so from a secure site  – look for "https" in the website address and the locked padlock icon on the toolbar. Also, whether shopping online or at the "brick and mortar" location, make sure you understand a store's return policy; for electronic items, this can often be especially important.  

COMPLIANCE UPDATE

Cost of Non-Compliance Under the Bank Secrecy Act
     On November 8, 2005, Bank of New York (BNY) agreed to pay $38 million to avoid prosecution in two criminal cases in relation to Bank Secrecy Act (BSA) violations. The agreement was released to the public, and the case involved money laundering, unlicensed transmission of billions of dollars, and fraudulent loan applications. The charges against the bank include failure to recognize, investigate, and report the criminal and suspicious activities that occurred.
      The BNY penalties and other recent non-compliance assessments serve as a strong reminder for credit unions to review and enhance their systems for detection, investigation, and reporting of criminal or suspicious activities under the Bank Secrecy Act. Regulators stress that credit unions must perform a risk assessment in connection with BSA compliance. In relation to the risk assessment, regulators require that credit unions go above and beyond CIP requirements in an effort to “know their members.” In fact, regulators expect credit unions to analyze members, their accounts, and routine transactions in order to better identify unusual or suspicious behavior. In addition to reviewing activity that may uncover money laundering, regulators expect credit unions to be able to provide reports to show compliance with the “risk assessment” requirement.
     For more information on compliance with BSA, contact Susan Fallon at the League office.

Hood and Hyland Sworn in at NCUA
     It’s official: the National Credit Union Administration (NCUA) board has three members. Gigi Hyland took her oath of office on November 18, following by three days the swearing-in ceremony of Rodney Hood.
     Hyland has 14 years of credit union experience, most recently as general counsel for Empire Corporate FCU, Albany, New York. She previously was executive director for the Association of Corporate Credit Unions. Hood’s experience spans 17 years in the public and private sector. Most recently, he served as associate administrator of the Rural Housing Service at the U.S. Department of Agriculture.

HSA Cost of Living Adjustments for 2006
     The Treasury Department and the Internal Revenue Service (IRS) issued new guidance on the maximum contribution levels for Health Savings Accounts (HSAs) and out-of-pocket spending limits for High Deductible Health Plans (HDHPs) that must be used in conjunction with HSAs. These amounts have been indexed for cost-of-living adjustments for 2006. The new levels are as follows:
Annual Contribution Levels for HSAs:
§      For 2006, the maximum annual HSA contribution for an eligible individual with self-only coverage is $2,700. The maximum contribution for any individual is the lesser of the indexed amount or the deductible of the HDHP.
§      For family coverage the maximum HSA contribution is $5,450.
§      The catch-up contribution for persons 55 or older is increased by statute to $700 for 2006.
     Both the HSA contributions and catch-up contributions apply pro-rated, based on the number of months of the year a taxpayer is an eligible individual.
New Amounts for Out-of-Pocket Spending on HSA-Compatible HDHPs:
§      The maximum annual out-of-pocket amounts for HDHP self-coverage increase to $5,250, and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $10,500.
Minimum Deductible Amounts for HSA-Compatible HDHPs:
§      For 2006, the minimum deductible for HDHPs increases to $1,050 for self-only coverage and $2,100 for family coverage.

CUs Pay More for Postage, Beginning January 8
     Credit unions will pay 5.4% more in postal rates and fees beginning January 8, according to the U.S. Postal Service. It is the first rate increase since 2002. Some of the new mail rates are:
§      First-Class Letter, one ounce, 39 cents, up from 37 cents
§      First-Class Letter, two ounces, 63 cents, up from 60 cents
§      Postcard, 24 cents, up from 23 cents
§      Priority Mail, one pound, $4.05, up from $3.85
§      Certified Mail, $2.40, up from $2.30

CREDIT UNION SYSTEM

Plenty to Be Thankful For
     As we approach the Thanksgiving holiday, it is appropriate to take stock not only of our individual lives, but our collective credit union movement situations as well. Here is an update from John McKechnie, CUNA’s senior vice president of governmental affairs.
     “So, as many of us are still reeling from the Ways and Means Committee hearing, that seems like an appropriate place to start. While a stern message was sent to credit unions on various topics, the clearest message was that Chairman Thomas has no plans to tax credit unions. And as a result of all of our hard work, we secured many new public pledges of support to retain our tax-exempt status. That is plenty to be thankful for.
      “After nine years of hard work, we finally have a new bankruptcy abuse reform law, even though there were several occasions on which we thought the bill was to become law only to see our efforts go for naught. That is plenty to be thankful for.
      “Just last week, the House Financial Services Committee unanimously passed its version of a regulatory relief bill. The bill included a title devoted just to credit unions. That is plenty to be thankful for.
     “And the new, improved version of CURIA has so far garnered 103 co-sponsors—the same rate of co-sponsorship as with H.R. 1151. And during that time, in spite of fierce banker opposition, more and more members of Congress have become convinced that credit union prompt corrective action should be assessed on some form of a risk-based system. That is plenty to be thankful for.
     “Finally, the Senate has confirmed the two nominees to the NCUA Board, who have now been sworn in and make up a completed, three-person board. That, too, is plenty to be thankful for.” 

Phishing Scams Get More Sophisticated
     The Internet Crime Complaint Center (IC3) has issued an alert, warning consumers about a new level of sophistication in phishing scams. The alert explains that a typical phishing scam is a three-step process:
     1.       The phisher deploys a web site, which mimics portions of a legitimate financial institution or other e-commerce website.*
     2.       The phisher crafts an e-mail message which appears to be from the organization represented on the phishing website. The e-mail message notifies potential victims of a problem with their account and instructs them to log into the phishing site where the account information will be “verified.”
     3.       Utilizing spam, the phisher sends this e-mail to hundreds of thousands of potential victims. If the victims fall for the scam, they end up divulging their account, credit card, and other identity theft related information. This information is then collected by the phisher and used to commit credit card fraud and other identity theft related offenses.
     A new phishing technique, the alert says, adds another step to the process. It utilizes the log-in credentials entered by the victim to connect to the authentic website and downloads unique identifying victim information such as first and last name. This data is then used to populate portions of the phishing website. By doing so, the phishing site appears more legitimate; therefore, the victim is more likely to divulge sensitive information.
     *Recently, “phishers” have posed as CUNA, NCUA, and “America’s Credit Unions.” If you have received a fraud or similar e-mail, please file a complaint at www.IC3.gov, CUNA, or NCUA. 

CUNA Mutual Offers Tools to Combat Fraud
     CUNA Mutual Group has many tools to help policyowners combat fraud. CUs should sign up to receive “risk alerts” from CUNA Mutual, which are intended to notify CUs of scams in our area.
     Also available is a check fraud online training tool. This tool is a useful resource for teller training awareness to help prevent check fraud. This eLearning course is comprised of three 30-minute modules:
     1.       Protecting Against Check Fraud: Member Interaction – typical tactics of check fraud scam artists and ways to defend your CU.
     2.       Protecting Against Check Fraud: Reg. CC – using check holds to prevent fraud losses.
     3.       Recognize and Prevent Common Check Fraud Schemes.
     CUs can sign up for these services through the website, www.cunamutual.com. For additional assistance, contact the Credit Union Protection Customer Response Center at 800-637-2676.

DELAWARE NOTES

Support League GAC Fund When Paying League Dues. Congratulations to FIRST STATE REFINERY FCU and PENINSULA METHODIST FCU, which were the first Delaware CUs to pay their 2006 DCUL and CUNA annual dues. Remember that all CUs are asked to include a voluntary contribution of three cents per member to fund the League Governmental Affairs Committee’s activities next year. With banks pursuing their goal of the taxation of CUs, the need is clear.

Disaster Relief Efforts. The Delaware League has joined with Delaware CUs in donating funds to help credit union members and staff devastated by the recent hurricanes. Delaware CUs reporting their efforts have been Delaware State Police, Diamond State, Dover, DPL, and Newport Site Employees. The League contributed $1270.92 to the National Credit Union Foundation; some of the funds were contributed from the fall Business Mixer Golf Outing. Individual and institutional donations can still be made online at www.ncuf.coop.

§      Full-time Position for Experienced Collector. Must be familiar with court filings and be comfortable representing the credit union in court. Must have bankruptcy knowledge. Position will include other duties in full-service credit union. Modern benefit package. Send resume to the attention of Kathy Greenwood, Seaford Federal Credit Union, P.O. Box 120, Seaford, DE 19973, or call 302-629-7852, ext. 12. 

§      Collector Position. Newark-based credit union seeking experienced individual for a full-time collector position. Must have high-school diploma, valid driver’s license, two years collection experience and/or experience working for credit unions. Fax resume and salary requirements with cover to: VP of Operations, 302-368-4036, or mail to Collector Position, ATTN: VP of Operations, P.O. Box 7739, Newark, DE 19714-7739.

EDUCATIONAL OPPORTUNITIES

CEO Summit – Cosponsored with our neighboring leagues. January 14-17 in Naples, Florida. Early bird registration fee is $495 if sent by December 2. Call Alice Smith for a brochure.

Mortgage/Home Equity Council – December 7 at the Delaware League, 10 a.m. Topic: credit reports & the FACT Act. No fee for council members; $65 for non-council members.

December QuickBites Teleconferences
12/13    Building Member Loyalty
12/20    Overcoming Negativity
The fee for these one-hour sessions is $99, and the time is 11 a.m.-noon. Deadline to register: one week prior to the session. Call Bernadette to enroll.

One-Hour BSA/ACH Compliance Webinars
These courses are now being offered in an “on demand” format. That is, your CU can hook into them on the Internet at the time and place you choose. In addition, the next set of live webinars includes:

R Federal Regulation Compliance Series
12/6      Bank Secrecy Act, 2 p.m.
12/8      USA Patriot Act, 2 p.m.
12/13    Form Completion CTR & SAR, 2 p.m.
12/15    Form Completion OFAC & FinCEN, 2 p.m.

R ACH Management Series
12/20    Annual ACH Audit, 2 p.m.
12/21    ACH Risk Management, 2 p.m.
12/22    ACH Payments/Verification, 9 a.m.

The fee for each session is $100. For more information or to enroll, phone Don Baumann of the co-sponsor Verisure at 315-638-4334.

TOGETHER is published on the 15^th and 30^th of each month by the Delaware Credit Union League, 4 Quigley Boulevard, New Castle, DE 19720. Information to be published should be sent or phoned into the League no later than the Monday of the week preceding the publication date. Telephone: (302) 322-9341 or (800) 292-7875. This newsletter can also be found on the League website: www.dcul.org. Hard copies of the newsletter will be mailed to each credit union CEO/manager for distribution to those without computer access. Readers can receive a reminder when the newest edition is posted to the Web by emailing susan@dcul.org. Editor: Alice Smith (alice@dcul.org).