Illinois Story Archive

Judge Rules Letter of Intent for Credit Union Merger Is Not a Binding Contract
Ruling does not end the legal dispute between Vibrant CU and Infinity FCU
Courtesy of Peter Strozniak, CU Times

March 21, 2022 — An Illinois federal judge ruled that a letter of intent for a proposed credit union merger is not a binding contract, but that did not end the legal dispute between the $1 billion Vibrant Credit Union in Moline, Ill., and the $336 million Infinity Federal Credit Union in Westbrook, Maine.

After the credit unions signed the letter of intent in 2018, they began negotiating a definitive agreement that Vibrant said would encompass certain terms, including a “cost clause” in which Vibrant agreed to cover the costs and expenses of the merger unless it did not take place or was cancelled. But the credit unions agreed to share the cost if the merger did not happen.
However, by September 2019, Elizabeth Hayes, Infinity’s president/CEO, wrote a letter to Matt McCombs, president/CEO of Vibrant, to terminate negotiations for a definitive agreement because of Infinity’s inability to reach an agreement with Vibrant on key aspects of the merger.

Vibrant is suing Infinity on a breach of contract claim for failing to pay its prorated share, or $121,247 of the $395,000 in costs of the called-off merger. The expenses were to be split based on the prorated percentage of each credit union’s assets at the end of their second quarter Call Reports in 2019.
Infinity asked Chief U.S. District Court Judge Sara Darrow in Rockland to dismiss the breach of contract claim arguing, in part, that the letter of intent provided that it is not a contract, that the credit unions did not regard the letter of intent as a contract, and that a potential definitive agreement would not have been substantially similar to the letter of intent.

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BCU Partners with Cristo Rey High School for Win-Win Corporate Work-Study Program
Courtesy of BCU

February 10, 2022 —  BCU recently partnered with Cristo Rey St. Martin College Prep High School in Waukegan, IL to participate in the school’s Corporate Work-Study Program (CWSP) to help mentor and develop high school students.

Through the program, Cristo Rey students in grades 9-12 spend one day per week developing their professional skills by working at a CWSP partner’s site. BCU has a team of four Cristo Rey students working in the Card Services and IT departments, earning a salary that goes directly toward paying their tuition for the private, Jesuit college prep high school.

“The students help us out tremendously,” Jorge Hurtado, Director of Consumer Lending Operations at BCU, said. “They’re quite impressive and bring ideas to the table that provide a whole new perspective that we can’t get anywhere else. That’s invaluable because soon, they and their generation will be our members.”

Hurtado also said he wants his students to work closely with auto loans and titles because they’ll gain knowledge to use in the real world. Additionally, the students are able to connect with employees who joined BCU right out of college to illustrate the variety of opportunities available after graduation.

Stephenie Southard, BCU’s Vice President of Information Technology, shared Hurtado’s sentiment. “The experience has been great for everyone involved and the students are more than willing and do whatever is requested of them,” she said, adding that, “One of the best things about working at BCU is the ability to participate in opportunities like this.”

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Financial well-being goes high-tech
Skill-building app provides path for ‘unmembered’ consumers.

December 7, 2021 Envisant (formerly LSC), a subsidiary of the Illinois Credit Union League, has invested in a fintech startup that offers marginalized consumers a path to financial recovery through mobile banking technology.

Cambio offers a subscription-based mobile account and alternative credit score. Through real-life in-app activities aimed at improving their financial skills, members earn access to cash rewards, credit-building services, and credit from Cambio’s network of credit union lenders.

“There are skill-building apps for stress relief, weight loss, and meditation—virtually any challenge we face in day-to-day life,” says Cambio Founder/CEO Blesson Abraham. “People build communities around them. We believe there’s a community to be built by people who want to lift themselves from within the underserved financial services market to rebuild their financial lives.”

Envisant services the Cambio accounts. “This was an opportunity to improve financial literacy and wellness across the U.S., and at the same time support credit union values,” says Libby Calderone, president/chief operations officer. “We’re happy to enable this great product with our own back-office services.”


#ILoveMyCreditUnion Twitter Campaign Reached Nearly 22-Million People, ICUS Reports

August 4, 2021 — The Illinois Credit Union System is reporting the #ilovemycreditunion Twitter campaign it championed nationally on July 30 reached more than 22-million people.

The campaign, an overview of which was highlighted in here, was designed to “inspire high energy conversation about why people love their credit unions,” according to the ICUS. Tom Kane, president of the ICUS, had the idea for the effort which eventually went national and even international.

“Driven by the cooperative spirit, more than 700 organizations across 48 states and nine countries participated,” the Illinois CU System stated. “These included credit unions, leagues, associations, and industry partners. They started the hashtag #ilovemycreditunion trending across social media platforms, raising awareness about the amazing things credit unions do every day for their members and communities.”

Said Kane, “I’m thrilled by the viral impact of the conversations about credit unions on July 30. Credit unions make a real difference to their members because they put people over profits. I want to thank everyone who joined us to make this effort such a resounding success,” said Kane.


Illinois Department of Financial and Professional Regulation Thanks Deborah Hagan for her Leadership as Secretary
Secretary Hagan retires after serving as IDFPR Secretary and more than 30 years in Illinois Attorney General’s Office

March 31, 2021 — CHICAGO – The Illinois Department of Financial and Professional Regulation wishes to thank Deborah Hagan for her service as IDFPR’s Secretary. Her leadership led to several historic accomplishments for the Department, along with improvements to the professional licensing process in Illinois and more consumer protections for its residents.

Appointed Secretary by Governor Pritzker in February 2019, Hagan came to IDFPR after more than 30 years in the Illinois Attorney General’s Office, where she served as leader of the Consumer Protection Division. Secretary Hagan created the Office of Innovation within IDFPR, which will help encourage innovation in financial development in the banking and fintech sectors here in Illinois. Another addition to IDFPR under Secretary Hagan was the military liaison position, an individual who helps military service members and their spouses obtain any professional licensure needed before transferring to Illinois. Hagan also increased leadership opportunities for women and minorities, resulting in one of the most diverse executive staffs among Illinois agencies.


Ransomware Attacks Extorting Sizeable Ransoms Continue as Predominant Cyber Issue

March 2021 — Ransomware developers and affiliates have been telling victims they must pay the ransom or stolen data and internal company secrets will be publicly released. Unfortunately, not everyone has been a believer. Six and seven-figure demands have become routine among ransomware attacks with the average ransom payment in quarter two of 2020 reaching $178,254, a 60% leap from the $111,605 average in quarter one according to the Coveware Quarterly Ransomware Report.

“Credit unions need to be looking out for ransomware techniques. These cyber-attacks have no boundaries and are truly a global issue,” reports Carlos Molina, Senior Risk Consultant at CUNA Mutual Group. “Ransomware has grown in frequency and severity significantly. The average ransom payments have climbed exponentially in the last few years.”

Ransomware payments in 2019 were three times as large as 2018 payments and four times as many extortion demands were paid in 2019 versus 2018, according to incidents reported to Beazley. In fact, ransomware claims increased 239% and the total cost of ransomware payments has increased by 228% from 2018 to 2019.

According to Derek Laczniak, Director of Cyber Liability at M3 Insurance, “Ransomware developers threatened to release stolen data in the past. However, now with the actual release of confidential information, credit unions need to treat these attacks more like data breaches. Business interruption from these events has become a regular occurrence leaving both reputational and financial impacts.”


Foreclosure moratorium legislation fails in Illinois
May 28, 2020 –The Illinois Credit Union League successfully fended off legislation that would have imposed burdensome requirements on credit unions and other mortgage lenders.  HB 5574 included harmful provisions such as the cancelation of debt during a moratorium period and mandatory loss mitigation which could include forgiveness of the forgone payments.

In response to League advocacy, the objectional language was removed from HB 5574 and the measure was ultimately defeated. The legislature did address the issue of foreclosures and evictions by including increased funding for rent and mortgage payment assistance in the state’s budget bill.

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