A new email scam is making the rounds.  Recipients are told to enter account #, expiration date and PIN # in order to restore their account.  The email has the  First Class American logo on it and supposedly is being sent from the accounting department.  This is mail is NOT from First Class American Credit Union.  NEVER respond to any email, text or phone call asking for this kind of privileged financial information.

WHAT’S NEW AND WHAT IS COMING AT YOUR CREDIT UNION

 This year we have spent a great deal of time on expanding our currentservices and implementing new services.  Most recently  we have expanded our mortgage program to increase the types of mortgages to meet our member’s needs.  During the first quarter of the year we began offering FHA loans.  Most recently we have been approved to offer VA loans to our members, through our mortgage partner, CU Members Mortgage.

VA financing has many benefits for home buyers.  VA loan financing  has many benefits to consider when choosing your mortgage loan.

•  Financing is usually 100% with no down payment
• Private Mortgage insurance is not required.
• There are no penalties assessed if you prepay the loan
• All closing costs can be paid by the seller
• Competitive interest rates
• Competitive terms of financing options and lengths as compared to traditional loans.
• Level principal and interest payments for the full term of the loan.
• Allows for higher loan amount qualification and enhanced buying power.

VA financing is a good choice if you are:

• A Veteran wishing to take advantage of your VA home loan benefits
• You need your monthly payments to remain fixed over the life of the loan.
• You are seeking 100% financing (no down payment).
• You plan on staying in the home long-term.

If you are searching for a mortgage product, check out your credit union.  Through our mortgage partner, CU Members Mortgage, we offer not only conventional mortgage loans, FHA financing and VA loans.  You can apply online through our website, just click on the mortgage application icon.

Additional products that we will soon have available are remote deposit to your account at the credit union.  Soon we will have available two different ways in which you can deposit to your account through our 1stBranch banking, without having to come to the CU, or visiting a shared branch location, to make a deposit to your account.  If you have a scanner at home, or work, you will be able to use our Express Deposit and scan your deposit in through 1^st Branch banking and have the deposit credited to your account.  You will keep the original check to make sure the deposit hits your account, and once the check is in your account, and we confirm receipt you can shred the check.  The second way to deposit through 1stBranch is by Priority Deposit.  When using Priority Deposit you will deposit the check through 1^stBranch banking, print the specially generated deposit slip and mail the check and the system generated deposit slip to the credit union.  You will have 10 days to get the check to the credit union.  These two services, Priority Deposit and Express Deposit allow you to make deposits to your account, without having to make a trip to the credit union.

Later this year we will also have Mobile 1^st banking available.  This service will allow you to have access to your account at the credit union through your PDA/Smartphone or cell phone.  You can receive text messages from your account, check your balances, and access your account through 1^st Branch on your hand held device.

We continue to look for ways to make your account at the credit union convenient, and be truly, available anytime, anywhere.  We continually look for ways to serve you, and striving to continue to meet our vision to you,

1^st in Service

      1^st in Quality

            1^st in Value

Members and non members are now receiving cellphone text messages stating that First Class American has closed their account and directing the person to a website where they are asked to input confidential information including debit card number and PIN.  This is a Phishing SCAM and the website that people are being directed to is a FAKE site.  Do not respond. As mentioned in previous posts NO financial institution, including FCACU, will ever ask you for this kind of information via text or email.

Beware of FAKE FCACU Website and Login

Members are receiving emails stating the member has a MESSAGE ALERT and to log in to online banking.  A link is provided to a FAKE First Class American website.  When the member logs in to the FAKE online banking the member is asked for information such as Name, debit card number and ATM PIN. DO NOT RESPOND. Financial Institutions will NEVER ask for this type of information. This is a SCAM. One indication that you are on the FAKE website, is when you log in to online banking you do not see the security question page. Our website is SECURE. When logging in to online banking on our FCACU site you will always be asked a security question.

MESSAGE FROM THE CEO

Business as Usual at First Class American

r     Recently there has been coverage in the media regarding the National Credit Union Administration (NCUA) take over of two big credit unions.  These two credit unions, U.S. Central Federal Credit Union in Lenexa, KS and WesCorp Federal Credit Union in San Dimas, CA, are not regular credit unions like ours that serve the consumer.  They are “corporate” credit unions that provide liquidity, investment and payment services to other credit unions.  These two corporate credit unions, like many other financial institutions, have seen their investments decline in the current economic downturn, and the losses were significant enough that the NCUA had to step in and place these credit unions into conservatorship, which means the credit unions continue to operate, but the NCUA has taken them over. First Class American does not have deposits in either of these two corporate credit unions, so we remain the strong financial institution our members expect us to be.

What does this mean for members of First Class American?

r     It is business as usual.  You can expect the same level of service from your credit union.  Our service to you is not affected by these actions of NCUA

.

r     Your funds are perfectly safe with First Class American. Your deposits are insured up to $250,000 by the National Credit Union Share Insurance Fund, and backed by the full faith and credit of the U.S. Government, just as FDIC does for bank deposits.  No credit union member has ever lost a dime of federally insured funds.

r     Credit unions that serve the consumer are very strong and the credit union sector over all is strong and healthy.  Why?  Because credit unions that serve consumers do not typically participate in the questionable loan practices that have gotten so many banks in trouble.

r     First Class American is very well capitalized and still has money to lend. As of December 31, 2008 our capital-to-assets ratio was 8.59%, well above the 7% industry standard for being “well capitalized”.

r     Credit Unions have been serving member for 100 years, through good times and bad.  With our solid capitalization and sound, fiscally responsible philosophy, First Class American is well positioned to weather this economic downturn.

A credit union member in Bishop received an email yesterday purportedly from the National Credit Union Administration (NCUA) advising that her account has been frozen because of five failed login attempts within a 24-hour period.  She was told that in order to reactivate her debit card, she would need to call a number that was provided in the email.  Fortunately, the suspicious member contacted her credit union instead; thereby avoided becoming the victim of a vishing scam. 

Vishing is similar to phishing in that both scams rely on e-mail as a means of delivering bait.  However, the two use different hooks in order to obtain personal data. In phishing, the email recipient is driven to a fraudulent web site; whereas in vishing, the email recipient is advised to contact a particular institution by phone in order to resolve an issue or re-secure personal data.   People who call the provided number will be asked to provide the same types of data phishers attempt to procure. Ironically, vishing e-mails may even attempt to reassure recipients of their legitimacy by stating that the institution in question would never request customer financial data via e-mail or IM.

Identifying phony email messages is not always easy and the criminals who use them are becoming more sophisticated about creating them.  Here are some tips for spotting fraudulent emails:

• Urgent or threatening tone — often, these emails claim that your account may be closed if you fail to confirm or authenticate your personal information immediately;
• Request for personal or financial information — fraudulent emails often claim that the financial institution has lost important security information that needs to be updated; they also may request that the user call a number provided in the email or visit and update this information online and link you to a counterfeit website; and
• Misspellings and poor Grammar — fraudulent emails often use improper grammar and contain misspellings.

The email received by the credit union member in Bishop contained numerous misspellings and was signed by “Chair Brad Beal, president National Credit Union Administration.”  Beal is actually president and CEO of Nevada FCU and the chair of the NCUA is Michael E. Fryzel.

The best defense against phishing or vishing is a little common sense.  Here are some tips consumers can use to avoid becoming a victim of cyber fraud:

• Do not respond to unsolicited (spam) e-mail;
• Do not click on links contained within an unsolicited e-mail;
• Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders;
• Avoid filling out forms in e-mail messages that ask for personal information;
• Always compare the link in the e-mail to the link that you are actually directed to;
• Log on to the official website, instead of “linking” to it from an unsolicited e-mail; and
• Contact the actual business that supposedly sent the e-mail to verify if the e-mail is genuine.

In the last 90 days the media has flooded consumers with a lot of information concerning the state of the economy, and what has caused the uncertainty in our economy, and the recession that we are currently in.  Much attention has been given the state of the “subprime borrower”.  What exactly is a subprime borrower, and are you one?

Subprime refers to the quality of the credit of the individual applying for credit.  Generally an individual with a credit score of less that 600 is considered a subprime borrower.  There is another term used, called non-prime, that refers to those consumers whose credit score is below 650.  These scores are calculated based on how an individual conducts the handling of their credit, or their borrowing capacity.  Borrowing capacity means, based on your monthly income, the amount of repayment you can comfortably handle before you begin to feel a pinch in your monthly cash flow.  Do you have enough left over from your net paycheck, after satisfying recurring monthly obligations to easily pay for your household needs, and have any set back for those emergency expenditures, such as unplanned car repairs, an emergency medical expense, vacation, or Christmas.

If you find yourself relying on a credit card to meet your monthly needs, then you could be facing a serious issue concerning future extensions of credit.

So, how do you avoid becoming financially strapped, manage your monthly expenses, and avoid getting caught up in building excessive debt.

Budget

Write down your monthly expenditures.  It is easy to loose track of how you spend your money, unless you write it down.  Once you write it down, and see it on paper can you fully realize what you’re spending.  Take one week, write down every time you spend money, if you paid cash, or had to result to a credit card. 

Limit your debt

Keep total debt to no more than 35 percent of your gross income.  That 35 percent should also include your monthly rent or mortgage obligation.  A good rule of thumb to ensure that you are not purchasing more home than you can afford, is to keep your mortgage payment less than 25 percent of your gross monthly income.  (In this instance, we are referring to a conforming, 30-year mortgage in which both, principal, income, and escrow are being satisfied.  If you are paying your mortgage and you are only paying interest, you could find yourself in a situation in which you loose control of the values of your home if property values begin to decline.)  Another rule of thumb when purchasing a home is to keep the purchase price within two times your annual income (if married, combined annual income).  For instance, if you make $50,000 per year, a mortgage of $100,000 you could safely handle on your income level.

Good debt

Different types of debt will affect your financial well being.  Taking out a mortgage is good debt, student loans are good debt as schooling will ultimately raise your overall earning ability.  Car loans are good debt, a necessary evil for transportation to work.  Remember that auto payment must also be factored into that 35 percent debt parameter.

Bad debt

Debt is considered bad debt if it is used to buy something that loses value over time.  Monthly expenses should never be paid by using a credit card to incur more debt.  Unsecured debt, such as credit cards, should never be more than 10 percent of your income.  Accordingly, if you make $50,000, more than $5,000 in credit card debt can start to eat away that monthly cash flow.  Instead of buying that new HD TV, begin to save for that purchase.  Remember, the interest you pay to make that purchase, is factored into the cost of that purchase.

Live off half

Another way to look at your income is how much you have to live on.  If you take away 30 percent for taxes/social security/Medicare, 10 percent for what you are giving, and 10 percent for what you are saving, that leave 50 percent remaining.  When you are budgeting, do not make the mistake of calculating the budget based on your gross income, but on your net for those required payroll deductions.

And lastly, once you have properly addressed your borrowing capacity, how do you keep your credit score pristine?  First, and most importantly, pay your monthly obligations on time.  If you are in the habit of paying your bills late, this will drive your credit score down.  As your credit score drops, the amount of interest you begin being charged when you do borrow begins to rise, increasing your cost and reducing your purchasing power.  How you pay your debts makes up almost 40 percent of what your credit score is based on.  Other factors include what makes up your debt, are you heavily loaded with credit cards, are those credit cards at their limits, are those credit cards with credit card issuers that are known to be subprime credit card issuers, and have steady/stable employment. 

To get a copy of your credit report go to www.freecreditreport.com.  You can also purchase a report showing your credit score for a small fee.

Before heading out to the mall to buy gifts for all those folks on your list, take some time to prepare so you don’t end up with a maxed-out credit line or a checking account without enough cash in it to buy even one candy cane.

1. Be organized. Before you start shopping, have a budget, a shopping list and some back-up gift ideas in case you cannot find your first choice.

2. Stay within your spending limits. Determine the amount you will spend for each person on your list. Carry your gift list with you so you can keep track of purchases.

3. Don’t wait until the last minute.

4. Organize your receipts. Keep all holiday receipts, and store them in one place.

5. Discuss gift giving. Talk with family and friends about drawing names for a gift exchange, setting dollar limits on gifts or not exchanging gifts among adults. Another option would be to make gifts by hand or give gift certificates promising your time or talents.

6. Check your checkbook. If you are shopping with a debit card, balance your checking account frequently to avoid overdrafts. Use your online account to track your recent expenses and your account balance.

7. Surf safely. When shopping online, stick with merchants you trust.

8. Wait for the sales. Put off some gift giving until after the holidays. You may agree in advance with family and friends to exchange gifts after the holidays.

9. There’s always next year. It’s never too early to start planning for next year. Begin by taking advantage of after-holiday sales, and don’t forget to sign up for a Christmas Club for the following holiday season.

The economy is turbulent, consumers are struggling to find substantial alternatives and answers are getting more and more difficult to discover.  The credit union movement has remained an important financial institution for millions but what about for those non-members who may be looking to join?  Steve Santiago, reporter and writer for Bankrate.com, examines the credit union impact on non-members in his article Is it Time to Join a Credit Union? and delivers a convincing stance on the merits of credit unions.

Santiago applauds the staying power credit unions have exhibited throughout time and commends them on being one of the few healthy survivors of the recent subprime mortgage crisis.  The recent announcement of deposits in share accounts being insured up to $250,000 now through the National Credit Union Share Insurance Fund (NCUSIF) has certainly added to the appeal of the credit union industry.  After briefly discussing some of the key differences between credit unions and banks, Santiago then moves into the advantages a credit union brings with its membership, key among them being:

• “Credit unions can offer their members a better deal because any extra profits are returned to members in the form of dividends or lower fees after operating expenses and capital reserves are accounted for,” Santiago writes;
• According to a June 2008 survey conducted by the National Credit Union Administration (NCUA), average interest rates for credit union-issued fixed-rate cards was 11.75 percent versus 13.17 percent for banks; and
• “Because they have no stockholders to answer to, credit unions are not pressured to get involved in risky investments, such as mortgage-backed securities,” Santiago adds.

The complete article may be read at http://articles.moneycentral.msn.com/Banking/BetterBanking/Is-it-time-to-join-a-credit-union.aspx.

(article provided by the Texas Credit Union League 11/06/2008)