Car Buying Tips

Buying a new or used vehicle is a major transaction for most consumers. Decisions made while buying a vehicle can impact the owner for many years to come. Shopping smart is good for any purchase but it is especially beneficial when buying a vehicle.

The high cost of vehicles makes it absolutely imperative that buyers do their homework BEFORE closing a deal on a new or used vehicle. If buying a new vehicle, find out what the invoice price is for that vehicle and what the cost over invoice is normally charged for the vehicle being considered. The sticker price on the window, or retail price, should not be used as a bargaining point for what the sale price should be. Consumer Reports and Edmunds are good resources for determining a fair price on a new vehicle. NADA and Kelly Blue Book are good resources for used vehicle pricing. Again, the "average retail" price is not the price value that consumers should be negotiating from. A fair price on most used vehicles would be splitting the difference between the "average retail" value and "average trade-in" value of the vehicle being considered. For example if the "average retail" price is $15,000 and the "average trade-in" value is $11,900, a fair sale price would be $13,450 for that particular vehicle.

Price negotiations for purchases and any trade-ins should be held mutually exclusive. A fair price should be sought for both transactions. Dealers are infamous for providing high prices for trade-ins and then adding the overage amount to the cost of the new purchase. This practice is also what causes many owners to become upside down on their vehicles, meaning that they owe more than the vehicle is worth.

The Credit Union would encourage members to shop our rates and terms first before shopping for a vehicle purchase. Our loan rates are publicly posted on our web site under the "LOAN RATES" tab. It is not uncommon for members to be told by a dealer that our rates are higher than the dealer rate when in reality the opposite is true. We recently had a good credit score member who was quoted a rate of 10% APR at a local dealer when the member was actually eligible for our advertised rate of 2.99% APR. North Alabama Educators Credit Union does have risk-based pricing for loan rates that are based upon the member's credit score. Even our "D" rated credit score members would be eligible for a fixed rate of 8.99% APR!

The fact is that dealers get paid from other lenders to push their financing to buyers. This is why dealers generally don't want members to finance their vehicles with the credit union. North Alabama Educators Credit Union would rather reward our member-owners with lower rates than to pay dealers $200-$300 for an automobile loan. At times, dealer financing may have a lower rate than the credit union especially when the financing is for a new vehicle. The key though is to verify available rates and terms independent of the dealer. Trust but verify is always a good policy to follow!

Merry Christmas from NAECU

Merry Christmas from your friends at

North Alabama Educators Credit Union.

Best wishes to you and your family

for a joyous and safe Christmas.

Christmas Loan

If you find yourself coming up a bit short on cash for the holiday season, our Christmas Loan is a nice gift. Qualified members can borrow up to $1,000 at a low fixed rate as low as 5.99% Annual Percentage Rate for a term up to 12 months. Consumers have been doing a much better job of reducing debt and increasing the amount saved throughout the year. The key to borrowing money is try to avoid it if possible. Shopping with your own cash is always more preferable than shopping with someone else's money and paying interest for the use of those funds. If you must borrow money, shopping for a good loan rate is worth the time and effort. Some credit cards, especially department store cards, have increased their finance rates considerably during the economic downturn over the past few years.

Our Christmas Loan will be available through the end of January 2012. The joys of Christmas shopping in December can often be soured by the credit card bills that arrive in January. Our Christmas Loan as well as other loan programs for higher balances could be used to greatly reduce finance charges being paid on outstanding debt.

Members of North Alabama Educators Credit Union who are interested in the Christmas Loan can review the rates and terms available on this and other loans at http://www.naecu.org/rates/loanrates.html.

PTA Members & Students Eligible for Membership

People often associate North Alabama Educators Credit Union as a financial institution available only for teachers or school employees. While we do serve many school employees in the area, we also offer credit union eligibility to students and PTA members. Specifically, all students living within the Alabama counties of Madison, Morgan, and Limestone are eligible for membership. PTA groups (also PTO's and PTSA's) of our eligible school sponsors are also eligible. The eligible public school systems are Huntsville City Schools, Madison City Schools, Madison County Schools, Limestone County Schools, Athens City Schools, and Decatur City Schools. PTA's themselves can open an account with North Alabama Educators Credit Union. (Some PTA accounts have moved to North Alabama Educators Credit Union to avoid the fees being charged at their previous banking institution).

For PTA officers, membership eligibility in North Alabama Educators Credit Union is a great additional benefit to relay to current and potential PTA members. Consumers have become largely dissatisfied with the larger traditional banking institutions. North Alabama Educators Credit Union is truly locally owned and operated since the credit union is owned by the members who use the services of the credit union. Our members have not seen the rising fees and account restrictions that have been highlighted by the media stories on banking over the past few months.

North Alabama Educators Credit Union would love to provide credit union literature and information to the eligible PTA groups in the area. We have staff available, myself included, who can attend PTA meetings and briefly announce the additional benefit of credit union membership through North Alabama Educators Credit Union. In short, PTA members can save money with an account at North Alabama Educators Credit Union and we can demonstrate specific examples of those savings.

Any PTA officers interested in additional information can send an email to feedback@naecu.org or contact our Market Coordinator at 256-534-2423.

Home Break-ins on the Rise

A weak economy breeds an increase in criminal activity. The Huntsville Police Department (HPD) and the Huntsville Community Watch Association (HCWA) are trying to get the word out about home break-ins taking place within the City of Huntsville. Similar criminal activity is no doubt taking place outside of Huntsville in the surrounding cities and counties.

Huntsville is reporting that there have been 241 home break-ins between September 30, 2011 to October 31, 2011. People are advised to watch their neighborhoods closely and look for suspicious activity. If you see a stranger backing into a driveway, popping a trunk, and/or wearing a backpack, please contact your local police non-emergency number. In Huntsville city limits, the number to call is 256-722-7100.

Criminals are approaching front doors, ringing door bells or knocking, and if NO answer they are going to the back of the house and kicking in a door to gain access to the home. Common items being stolen include flat screen TVs, laptop computers, and video game systems. These break-ins are occurring between 7:00 AM and 2:00 PM.

If you do see suspicious activity, contact the police and remember to note description information on the people involved (clothing, appearance, race, hair color, gender) and vehicle (color, make/model, tag) if possible.

Unfortunately the upcoming holiday season will most likely intensify criminal activity. Remember to not leave large boxes from new electronics on the street for trash pickup. An empty box from a new flat screen TV only serves as a carrot to a thief canvassing a neighborhood for likely targets.

Hardest Hit Alabama Program

Earlier this year Alabama Governor Robert Bentley announced the creation of Hardest Hit Alabama (HHA), a new consumer relief program providing $162 million for the prevention of foreclosures in Alabama.

The U.S. Department of Treasury's "Hardest Hit Fund" awarded the $162 million to the Alabama Housing Finance Authority to provide targeted assistance to Alabama's unemployed homeowners. The fund itself was authorized under the Emergency Economic Stabilization Act of 2008.

Eligible owners can receive assistance to pay their current mortgage payments and all other mortgage related expenses, including payments on any subordinate liens, while unemployed. HHA will provide up to 12 monthly mortgage payments not to exceed $15,000, per household.

Alabama homeowners who receive unemployment compensation benefits may apply. To qualify, applicants must have a total annual household income of less than $75,740, and the unpaid principal balance on their home's mortgages must be less than $258,690.

HHA funds have also been extended to Alabama victims of the 2011 April tornadoes. Storm victims who have been unable to return to work following the April tornadoes may be eligible for increased assistance of up to 18 consecutive monthly payments, or $25,000, through Hardest Hit Alabama.

North Alabama Educators Credit Union has signed on as a registered financial institution participant in the program and we encourage any unemployed Alabama residents to contact Hardest Hit Alabama for possible relief assistance.

For more information on the Hardest Hit Alabama program, visit http://www.hardesthitalabama.com/ or call 1-877-497-8182.

Retailer Victory on Interchange Rates

The recent Dodd-Frank Financial Regulation Bill that is now law greatly reduced the debit card interchange fees paid by merchants to financial institutions. Lost in all the media discussions and consumer backlash over new banking fees has been the considerable financial windfall to merchants and retailers who accept debit cards as a means of payment.

Since October 1st, merchants and retailers have been enjoying reduced costs when consumers use their debit cards. Are we seeing lower prices with these merchants and retailers yet? An informal review of the prices of milk, bread, and cereal both before and after October 1st do not reveal that any cost savings are being passed along to the consumer. Consumers should look closely at 4th quarter earnings later this year for major retailers as there will be a significant increase in net incomes being reported as a result of the debit card interchange fee reductions.

The retail industry is the group who lobbied hard for the debit card fee reductions. They won that fight and are now enjoying the fruits of that victory. It remains to be seen however if the consumers will share any benefits of that retailer victory. Time will tell on that issue.

Those banking institutions most affected by the reduced income of the debit card interchange changes are passing along those costs to their consumers. North Alabama Educators Credit Union has not been forced to initiate new checking and debit card usage fees because our income has not been affected yet by the changes. Legislators in Congress were fully informed of probable new banking fees to consumers if the Dodd-Frank Financial Regulation Bill became law so it is quite disingenuous for legislators to now appear surprised by new banking fees.

Celebrate Credit Union Day

North Alabama Educators Credit Union will be celebrating Credit Union Day on Friday, October 21st. Register to win a $75 cash drawing during the entire week of October 17 -21 at each of our office locations. (One entry per day max). The drawing for the $75 will be held on the afternoon of Friday, October 21st. Complimentary refreshments will be available all day that Friday.

In conjunction with the Credit Union Day activities, North Alabama Educators Credit Union is also sponsoring a free "Shred-it Day" on Friday, October 21st. There is no cost for the shredding service. Please limit your shred items to 40 pounds or less of paper records. Document Destruction Services will be on-site at the following times/locations;

Sparkman Office - 11:00 AM to 1:00 PM

2100 Sparkman Drive

Huntsville, Alabama 35810

Main Office - 3:00 PM to 5:00 PM

2309 Whitesburg Drive South

Huntsville, Alabama 35801

Shredding personal items is a very important tool in preventing identity theft. Take advantage of this free shredding service and protect your good name and reputation!

The theme of this year's Credit Union Day is "Credit Unions Build a Better World". We also believe that our credit union members build a better credit union. We appreciate our credit union members and invite the membership to stop by during the week and on Friday, October 21st as we celebrate Credit Union Day.

Mystery Shopper Scams

Have you ever considered working as a "mystery shopper" to evaluate a product or service? There are valid secret shopper programs out there. Beware of scams related to mystery shopper programs that often are advertised as a work from home employment offer. Below is a summary of how the "mystery shopper" scam works;

A person responds to an email or sees a job offer online to be paid for working as a mystery shopper.

The mystery shopper then receives a large check in the mail or by overnight mail service.

Included with the check is a list of small items to be purchased and instructions to send the majority of the money via Western Union or wire transfer to a named individual in the letter or by telephone instructions. The "mystery shopper" completes an evaluation form included in the mailing and rates the service level of the small purchases and money transfers. For their work and effort the "mystery shopper" is allowed to keep a portion of the funds sent to them, usually several hundred dollars or so.

The scam reveals itself when everyone finally realizes that the large check sent by the mystery shopper program is a counterfeit check. The counterfeit notification process from the Federal Reserve can take days or weeks depending upon the bookkeeping oversight of the company whose checks were counterfeited. The person who deposited the counterfeit check is responsible for any loss of funds associated with the return of the deposited check. There is also a criminal aspect as well since it is a crime to possess and negotiate a counterfeit check.

The best way to spot a fake "mystery shopper" program is this fact - no legitimate company will ever mail a check to a prospective "mystery shopper" in advance of any work completed. The average payment for a real "mystery shopper" program is also only $15-$20 and that is received only after an extensive evaluation form is completed and returned to the company. A real company would never send a valid large check to a stranger and hope that the stranger would return the money.

The poor economy of the past few years has intensified these type of scams since victims are usually unemployed or needing to increase their household income. The lure and ease of earning money from home can sometimes cloud the judgment of financial caution. We don't want anyone to become a victim. Members are encouraged to bring any suspicious checks and associated correspondence to the credit union for a review by credit union management BEFORE attempting to deposit any such items.

Fall Newsletter

Our latest newsletter has quite a bit of information. The latest issue has information on School Supply Loans, VISA Gift Cards, Skip-a-Payment program, Decatur Branch info, Charity Cookbook, Credit Union Day, Free Shred-it-Day, Scam Alert, Holiday Closing Schedule, Investment options, and more. You can view the newsletter online. It will also be mailed to member households in the next week.

Check it out: http://www.naecu.org/images/Fall_2011_Newsletter.pdf

GAP - Guaranteed Auto Protection

Being in an accident and having a vehicle totaled is traumatic enough. Imagine the scenario where the insurance settlement amount on the totaled vehicle is not sufficient to cover the loan payoff. This can and does happen as more and more vehicle loans are “upside-down” over time, meaning that the value of the vehicle is less than what is owned on the vehicle loan. This “upside-down” situation is especially prevalent on purchases where a trade-in was financed into the new purchase. Certain vehicle makes/models also depreciate faster than others. The credit union has a VisualGAP tool that illustrates any current and projected differences between values and loan balances over the life of a loan.

Guaranteed Auto Protection (GAP) is a valuable product that North Alabama Educators Credit Union offers our members to minimize a total vehicle loss situation. GAP helps to cover the difference between the actual cash value paid by the primary insurance claim settlement and the vehicle loan balance at the time of the loss. Another benefit of GAP is that any deficiency balance caused by the borrower’s deductible will be reimbursed up to $1,000, where permitted. Without GAP, borrowers may be subject to owing anywhere from a few hundred dollars to several thousand dollars on a vehicle that they no longer have. Many primary insurance companies are now using a “local market value” analysis to determine the claim settlement amount which is sometimes lower than an average NADA price.

The best part about the credit union’s GAP product is the price. Members can purchase GAP coverage (as of September 2011) through North Alabama Educators Credit Union at a price of $195 for each loan covered. Automobile dealers routinely sell their GAP products for $400-$700 at their finance offices. The credit union helped one of members earlier this year with a vehicle refinance and that member received a prorated refund of roughly $600 from the GAP product that had been purchased at the dealership.

Members can purchase GAP coverage for their vehicle loan at the time of loan inception or anytime afterwards as long as there has not been a total loss situation prior to the date of purchase. If GAP is purchased after the loan inception date, the coverage is not retroactive but the coverage would begin on the GAP purchase date and cover the remaining term and balance. Loan Officers are available at any office to present the VisualGAP illustration to help in any GAP purchase decision. The GAP product is yet another example of how the credit union can save money for the membership.

Rising Fees at Banks - Not at NAECU

Fees are on the increase with many of the big, traditional banking institutions as they work to recoup lost revenues from recent regulatory changes to the industry. Some institutions are starting to charge a monthly fee for checking accounts. Others are raising the account requirements, such as a larger average balance, to avoid having a monthly service fee. It was reported that Wells Fargo Bank is experimenting in a few markets with a $3.00 monthly charge for Debit card users if the consumer uses their Debit card at least once during the month. Some institutions are beginning to charge a monthly fee if an account statement is mailed instead of being delivered to the consumer by e-statement online.

The trend is clearly moving towards more fees back to the account holder. The good news is that North Alabama Educators Credit Union is not looking at adding any of the fees cited above. Our business model has always been to reward our member-owners with lower fees, higher rates on deposits, and lower rates on loans. While there have been regulatory changes that have affected North Alabama Educators Credit Union, the overall financial impact so far has not been sufficient enough to require additional fees at this time.

Consumers who have account relationships at multiple financial institutions are advised to look closely for any "change in terms" notices or new fee schedules that may be delivered from the institution. North Alabama Educators Credit Union is experiencing a good increase in new members recently as more and more consumers move their business away from these higher fees being charged elsewhere.

ATM Security Considerations

Automated Teller Machine (ATM) users should be aware that several security threats are taking place in the north Alabama area. Multiple robberies have taken place at Huntsville ATM locations where the customer was using an ATM at night. A criminal is approaching people as they are using the ATM and either taking their cash at that time or requiring the victim to withdraw funds to give to them. The common theme is that the crimes are occurring at night when the cover of darkness is allowing the criminal to remain unseen until the robbery takes place.

ATM users are cautioned to be very alert to their surroundings when using ATM's. Avoid ATM transactions at night if at all possible, especially at more remote locations where traffic or other patrons are not very visible to the ATM. Do not count your cash at the ATM itself - move away from the ATM and wait until you are safely in your vehicle away from the machine. If you are involved in a confrontation with an assailant who demands money, comply with demands and do not do anything that might provoke the criminal. If you have a debit card, remember that you can receive "cash back" at a merchant point of sale which would be safer than a late night ATM transaction.

Another ATM security threat is where criminals are watching people use ATM's from a short distance and viewing the ATM PIN used for the transaction. If the ATM user leaves the ATM and does not clear out the menu option of "do you want to perform another transaction" or something similar, the thief can go to that same ATM and enter the victim's PIN (that they just saw used) and perform a cash withdrawal from the victim's account. Video surveillance at several ATM locations in Huntsville have recorded a criminal stealing money in this fashion. Please note that ATM's of North Alabama Educators Credit Union do require that the card be swiped again before a new transaction can be performed. ATM menu's vary though so be sure that all menu options are cancelled out before leaving an ATM that has been utilized. This type of ATM fraud also reinforces the importance of paying attention to the surroundings when using an ATM.

Criminals are out there in our area looking for victims. Be smart. Be safe.

Service Highlight : CO-OP Surcharge Free ATM's

Credit unions do a really good job of working with other credit unions. The credit union philosophy of "people helping people" extends between credit unions as well. The CO-OP Surcharge Free ATM Network is an excellent example of credit unions working together for the common good of credit union members in general.

Basically, the CO-OP ATM Network is a collection of credit unions throughout the country that allow participating credit unions to access their ATM's without a surcharge fee. There are other ATM's within the network, like Publix Grocery Store ATM's, that are also surcharge free but the bulk of the ATM's are owned by credit unions.

There are currently over 28,000 ATM's nationwide where members of North Alabama Educators Credit Union can withdraw cash without a surcharge fee or internal fee. Totally free to the member. In the Tennessee Valley area, most Redstone Credit Union ATM's and Publix Grocery Store ATM's are surcharge free. Always look for the CO-OP Network Logo (shown above) on the ATM. You should also not have to click "yes" to a surcharge fee at the terminal if the ATM is part of the CO-OP Network.

Locating a surcharge free ATM can be done in several ways. Members can locate a CO-OP Surcharge Free ATM through an online ATM locator, iPhone Application, Text Messaging, or GPS. Below is a direct link to the ATM Locator page for the CO-OP ATM network. This CO-OP link is posted on our credit union home page as well.

http://www.co-opfs.org/public/locators/ATMlocator/index.cfm

School Supply Loans - 0.00% APR

North Alabama Educators Credit Union is once again offering School Supply Loans where qualified members can borrow up to $500.00 at a 0.00% Annual Percentage Rate.* These loans are paid back over a maximum term of 10 months on payroll deduction. A small processing fee does exist on these loans. If you need to borrow money, this is one of the best deals you will find.

These School Supply Loans have been very popular over the years to teachers and parents in assisting with their school expenses. Frankly the loans can be used for any worthwhile reason. We have had members to use these loans to pay off costly payday lenders and check cashing loans.

The first three days that this loan was available this year (started July 11th) the credit union provided over $52,000 in School Supply Loans to our members. Availability of this loan will continue through September 30th.

This School Supply Loan is another excellent example of the value of credit union membership in North Alabama Educators Credit Union. You will not find this type of loan offer with the large traditional banking institutions. Credit union membership does have its privileges.

*We are an Equal Credit Opportunity Lender. Qualifications must be met on all loans. Rates and loan availability are subject to change without notice. Your loan interest rate will be determined by your credit worthiness as well as other factors, such as the length of your loan.

National Debt Ceiling

The current legislative debate over whether or not to raise the national debt ceiling is a frustrating process to witness. There are federal obligations that must be paid that will exceed our current revenues and available funds on hand. While I agree that the national debt ceiling must be raised in the short term to meet these current obligations, there seems to be no real efforts or urgency to reduce current expenses (that are not obligations) and increase revenues. We all know how school systems must deal with budget shortfalls. They are forced to lay off employees, reduce employee benefits, reduce operating expenses, consolidate various operations within the system, and look for additional revenues through property taxes and other/or other tax plans. This federal debt ceiling problem has been known for some time. Why have efforts not been undertaken already to reduce expenses and increase revenues? Businesses and other state and local governments must balance their budgets so it should be no different for the federal government.

Fear in financial markets is obviously not a good recipe for stable financial activity. Investors are understandably concerned by the possibility of debt defaults by the government and the negative impacts that would occur. Senior citizens are fearful that they will not be receiving their monthly social security checks. Fear needs to be eliminated to insure a stable financial system going forward.

The national debt problem must be addressed. The current national debt did not occur overnight and a quick fix will not be available. A reasonable plan to reduce the national debt over a period of time should be attainable. The eyes of the nation and the world will be watching Congress and our President on this debt ceiling/debt reduction issue. Hopefully our leaders in Washington will choose diplomacy and create a solution to our nation’s debt problem.

Review of Beneficiaries

Members are encouraged to review the beneficiaries currently listed on their financial accounts to insure that existing names and distribution percentages are still valid. The credit union has had members to pass away with a previous spouse still listed as the account beneficiary or joint owner. By law, the credit union is required to distribute funds from a deceased account according to the existing status on the account at the time of death. If one or more multiple joint owners exist on a deceased member's account, any surviving joint owners would receive the funds. If there are no surviving joint members on an account, the credit union is then required to distribute funds according to the account beneficiaries listed on the most recent membership card. Please understand that beneficiaries can be different for the share and IRA accounts. Beneficiaries can be changed at any time by the primary member or IRA account owner.

The death of a loved one is difficult enough. Nobody wants a problem with an outdated beneficiary or joint owner being listed on a deceased account. Stop by any branch office to review the existing account beneficiaries and/or joint owners on your accounts. If changes need to be made, now is the time to address these name changes for beneficiaries and joint owners on your account(s).

Alert: Insurance for your water lines?

The Better Business Bureau (BBB) of North Alabama sent out an alert concerning consumer concerns about solicitations for water service line insurance coverage that are being circulated in our area. These offers are not affiliated with any local utility company and only offers a service contract that covers the main water line going from the utility company connection to your home. As with any product or service solicitation, consumers are cautioned to read all of the terms and conditions of any offer that they are considering.

One of the water service line insurance solicitations provided a number of important exclusions that appeared in the fine print of the mailing. Some of these exclusions included: Acts of God, thawing of frozen pipes, repair of covered parts, equipment and/or systems due to reduction in performance caused by normal wear and tear, repairs when parts are obsolete, etc, etc. (These reasons alone are some of the more common reasons why a water service line would fail!).

Consumers are urged to research unknown companies with their local Better Business Bureaus before making a purchase or signing a contract. One of the water service line warranty firms had a C- rating due to 492 complaints that have been registered in the past three years, 51 of which have been determined by the BBB to be serious in nature.

Buyer Beware is the best advice here.

Tools for Schools

North Alabama Educators Credit Union is assisting the WHNT News 19 Tools for Schools program this year. The Tools for Schools program collects school supplies from the community to give back to the various school systems in the Tennessee Valley. While actual supplies are still requested by the community in the program, a new wrinkle this year is the availability of donors making a monetary donation towards the program. Financial donations made to Tools for Schools will be distributed by the WHNT News 19 fundraiser team to the school superintendents in 12 counties of north Alabama. North Alabama Educators Credit Union has established a "Tools for Schools" account to receive financial donations either online or at one of our five branch offices. North Alabama Educators Credit Union also has donation boxes at each office location for school supplies to be donated.

Here is the direct link to the "Tools for Schools" page where monetary donations can be made via PayPal. Credit and debit cards can also be used to submit a donation.

http://www.naecu.org/toolsforschools.html

Please pass the donation link on to anyone that you think might be able to assist with a monetary donation. The educational budgets are tighter than ever so your assistance with providing school supplies would be greatly appreciated!

VISA Debit Card Fraud Monitoring

Behind the scenes of every VISA debit transaction, our fraud prevention team is monitoring every transaction and scoring the potential fraud risk associated with each transaction. The fraud prevention system tracks member card activity and looks for unusual changes in card usage behavior or locations. Members may be contacted either by telephone or mail by our Fraud Prevention Center to confirm suspicious transactions. The Fraud Prevention Center telephone number is 1-800-262-2024 which is open nights and weekends. We recently had a member to receive a mailed inquiry about possible suspicious activity on their VISA Debit card from the Fraud Prevention Center. The 1-800-262-2024 telephone was provided in the letter. The member contacted the credit union first to verify that the letter was legitimate and then contacted the Fraud Prevention Center. The member had recently traveled to Gulf Shores and there were a few back to back transactions at a WalMart that appeared suspicious. (Most card users would make one purchase and move out of the store). The Fraud Prevention Center provided all the details of the transactions and asked no confidential information during the member call. No fraud was evident and the potential fraud case was closed.

Key Points: Never provide personal information in response to a fraud inquiry. Our Fraud Prevention Center will just need your name and zip code. They will then provide the details of any suspicious transactions. If you receive a telephone call from 1-800-262-2024 (The Fraud Prevention Center number), inform the caller that you will call them back at the same number since incoming calls can be spoofed (fake) and not actually be the Fraud Prevention Center. The published number for the Fraud Prevention Center is listed on the bottom of our home page at www.naecu.org. Members are welcome to contact any credit union office location for assistance as well.

There are MANY fraudulent emails, text messages, phone calls, and letters circulating that are designed to steal personal information. Be careful out there!

Interchange Amendment Fails - Canada Example

A replay of the Senate debate on the interchange rate fix legislation was covered last evening. It is disappointing that the final vote failed although we are pleased that both Alabama Senators voted for the bill. We thank Senator Richard Shelby and Senator Jeff Sessions for their support on behalf of Alabama consumers.

Senator Durbin noted in his comments that Canada retailers do not pay any interchange rates, implying that that system is superior to the system in the United States. Perhaps Senator Durbin should have compared the consumer side of the equation in Canada. A quick online search of Canadian credit unions show a considerable increase in the amount of banking fees paid by account holders as compared with credit unions in the United States. Monthly service charges range from $15 to $6, depending upon the type of checking account. Electronic transactions in Canada generally offer 5 to 10 free transactions per month and then a per transaction fee of $1 or more is charged. There were also several examples found where $500 daily electronic transaction limits were in place. This limit is most likely due to minimizing the fraud exposure on behalf of the institution.

It would be interesting to compare retail prices of products on common items sold in Canada as opposed to the United States. Given the fact that interchange rates are not being paid by retailers in Canada, they should be selling their products for a lessor price. My guess is that prices are not that much different though. Certainly not enough to cover the additional banking fees being paid by consumers in Canada.

If credit union members want a glimpse of how interchange rate changes can affect their bottom line, look online at credit unions in Canada and look over their fee schedules. It is unfortunate that Congress did not choose to perform a consumer impact study that would have been required in the interchange fee legislation that was ultimately voted down.

Refer a New Member - Earn $10.00

Membership Months for North Alabama Educators Credit Union is now in effect through September 30th. What does this mean to existing members? Existing members can refer potential new members to North Alabama Educators Credit Union and earn $10.00 for each qualifying new member who opens an account. Some of our best sales people are our own members. Share your good experiences and stories to relatives (any family member of an existing member can join) and encourage them to join the credit union. If you have three children who don't have accounts, that is $30.00 to get them started on a savings plan PLUS you would earn $30.00 as well for referring the new accounts! Membership coupons can be printed out on our web site - CLICK HERE.

Don't forget that friends and co-workers may be eligible to join the credit union as well. The page link above provides a resource for membership eligibility qualifications. As an example, PTA members of sponsor schools are eligible and anyone can become a member of the PTA. All students in the counties of Madison County, Morgan County, and Limestone County are also eligible for credit union membership. There are numerous other eligibility methods.

Become a salesperson for North Alabama Educators Credit Union and earn some green while helping the credit union to continue our membership growth.

Capturing Photos, Photo ID's, and Signatures

North Alabama Educators Credit Union is committed to protecting your financial accounts from fraud and identity theft. It is our responsibility and obligation to insure that all financial transactions being completed are being performed by the members authorized for access to a particular account. The credit union is financially liable for any fraudulent or erroneous transactions posted to a member’s account.

Our credit union staff are digitally capturing photos, photo ID’s, and signatures to help prevent errors and fraud on our membership. This information is only used for the purpose of verifying our members upon subsequent visits. Please keep in mind that identity thieves can counterfeit photo ID’s in an attempt to steal account funds if they know your account number. Having this information on file also can assist members if they have lost their own photo ID and need to perform a transaction. This exact scenario occurred at our Athens branch following the April 2011 tornadoes when a member’s identification was lost but we were able to verify the member’s photo and signature on file.

We also hear from longer term members who do not want to have to show their photo ID when performing a transaction. With nearly 12,000 members it is impossible for our staff to recognize every member of the credit union. This photo retention process can assist those longer term members since we will have the photo ID available on file to the credit union staff member.

Please keep in mind that we are simply trying to protect member accounts. The information is not being shared with anyone outside of the credit union. We are already seeing the information when we post member transactions now. We would appreciate your cooperation in our efforts to secure and protect your membership account(s).

Request for Legislative Help - Interchange Rates

This afternoon I will be meeting with Congressman Mo Brooks and other credit union CEO’s in the area to discuss the interchange fee issue from the credit union perspective. Credit union members will be negatively impacted down the line if interchange fee rates are drastically reduced. Retailers may want to pay less for accepting debit and credit cards, but they give no guarantees and the law provides no guarantees that consumers will reap any of the benefits of lower interchange fees from the retailers. Those savings will go straight to the retailer’s bottom line and they will be under no obligation to lower retail prices for the goods and services they sell.

If the credit union receives less income on our debit card program due to a reduction in interchange rates, that lost income will either have to be created somewhere else or current services will have to be altered or terminated. Either way, our members would see a distinct difference in some fashion. I doubt that our members would see any difference in the prices that they pay with their local retailer.

The last thing that consumers need right now is less money in their own pockets. The economic impact of the changes to interchange rates has not been evaluated and studied. Our fragile economy does not need laws that could curtail consumer spending. The credit union industry is simply asking Congress to delay implementation of the Durbin Act section that deals with setting a price on interchange rates to allow time for a financial impact study. We will be asking Congressman Mo Brooks for his support of HB 1081 to allow such a study. I agree that some reform is probably necessary in the card payment system but the current pricing solution is woefully inadequate since the pricing model did not address all costs associated with providing a card program.

FYI – Previous posts have addressed the interchange rate fee issue in more detail. If any members have questions or comments over the interchange rate issue, feel free to contact me.

Thoughts and Prayers for our Community

The events that have unfolded since the first tornado siren last Wednesday will forever remain in the hearts and minds of our local community. The devastating storms throughout Alabama have literally changed the face of communities. Loved ones have been lost, homes have been swept away, and communities have been brought to a standstill with crippling long-term power outages. Through it all though we have also seen neighbors helping neighbors, people helping people.

Our thoughts and prayers go out to those impacted by the storms. Together, the communities will rebuild and our lives will return to a level of normalcy that we have come to expect.

We appreciate the patience of credit union members in our process of bringing offices and services back online. The credit union will be helping members in the coming weeks and months to minimize the negative financial impacts of the storms and power outages. An overview of credit union assistance plans are available on our home page now. Additional assistance steps will added as new member needs are identified.

People helping people - it's just the right thing to do.

Overdraft Privilege for ATM's and Debit Cards

Unlike many financial institutions in the country, North Alabama Educators Credit Union has never automatically covered a debit card transaction and charged a fee equivalent to an insufficient funds fee. If the money was not available in the checking account, the debit card transaction was declined.


Federal law was enacted in 2010 that now requires consumers to consent or "opt-in" to the availability for overdrawing their checking account with a debit card for ATM transactions or everyday debit card transactions. This was good consumer legislation since it placed the power of the available overdraft privilege access with a debit card in the hands of the credit union member. North Alabama Educators Credit Union now offers Overdraft Privilege on debit cards with a maximum overdraft privilege amount of $500 to qualified members. CLICK HERE for full details and the OPT-IN form on the NAECU program.


Percentage wise, the numbers range from 50-75% of credit union members signing up nationwide for this service. This doesn't mean that 50-75% of credit union members are routinely overdrawing their checking accounts with a debit card. A much smaller percentage of members will actually ever use overdraft privilege, period. Opting-in to Overdraft Privilege for ATM transactions and everyday debit card transactions costs nothing if the service is never utilized.


Why opt-in to Overdraft Privilege for ATM transactions and everyday debit card transactions? It provides a safety net should an emergency occur. Consider an emergency visit on a weekend where that $150 co-pay is due on the spot and you don't have $150 available in your checking account until payday. Also consider the scenario where you have a cart full of groceries and your debit card is declined at the checkout line due to an insufficient checking balance as a result of a mathematical balancing error or unrecorded transaction. An embarrassing situation can be avoided with the Overdraft Privilege service.

Overdraft Privilege is not a loan and should not be considered a line of credit. The credit union offers traditional overdraft loan protection that all checking account members should pursue to lessen the cost of an overdraft. Members are also encouraged to use our free CU-Online Home Banking and free Memberlink Audio Response services to monitor their available balances and prevent unwanted overdrafts.

Email Data Breach - Epsilon

A data breach at third-party marketer Epsilon has exposed the email addresses and names of customers at major credit card issuers and national retailers. Members of North Alabama Educators Credit Union should know that we were not involved in the email data breach and have no vendor connection to Epsilon.

There is a genuine concern that an increase in phishing attacks, or fake emails, will occur with the intent of stealing personal information from consumers. The normal phishing attempt is to try a shotgun approach and hope to hit on a victim who actually is a client of the business in the fake email. With this email data breach however, the scammers will know exactly what companies the victim does business with. The email data breach greatly increases the odds of fooling consumers into thinking that they are communicating with a company that they are familiar with, when in reality they are not. The breach can also increase the odds of spreading computer viruses and spyware when victims click on embedded links in the fake emails.

Consumers should NEVER respond to an unsolicited email, telephone call, cell phone text, or mail request for personal information. If you have questions over a request received, please contact the company involved at a published telephone number to verify the request. Also do NOT click on links or open videos from emails from trusted sources unless you are 100% certain of the source of the email. Maintaining a good anti-virus program on your computer is an absolute requirement these days.

Be careful out there - things are not always what they appear to be!

Fraud Alert - Fake ACH transaction alert

"The ACH transaction (ID: 8067914072656), recently initiated from your checking account (by you or any other person), was rejected by the Electronic Payments Association." The above communication is an example of a fake email received by one of our members. The email had a fake link included with the message. Please look over the warning message provided below from the National Automated Clearing House Association (NACHA). Further to its notice of February 22, 2011, NACHA has received reports that individuals and/or companies continue to receive fraudulent emails that have the appearance of having been sent from NACHA. These emails vary in content and appear to be transmitted from email addresses associated with the NACHA domain (@nacha.org). Some bear the name of fictitious NACHA employees and/or departments. NACHA itself does not process nor touch the ACH transactions that flow to and from organizations and financial institutions. NACHA does not send communications to persons or organizations about individual ACH transactions that they originate or receive. Be aware that phishing emails frequently have attachments and/or links to Web pages that host malicious code and software. Do not open attachments or follow Web links in unsolicited emails from unknown parties or from parties with whom you do not normally communicate, or that appear to be known but are suspicious or otherwise unusual. If malicious code is detected or suspected on a computer, consult with a computer security or anti-virus specialist to remove malicious code or re-install a clean image of the computer system. Always use anti-virus software and ensure that the virus signatures are automatically updated. Ensure that the computer operating systems and common software application security patches are installed and current.

Op-Ed Letter to the Huntsville Times

Below is the text of a Op-Ed submitted to the Huntsville Times on the interchange fee debate. It has not been published as of this date.

There is an intense debate between financial institutions and retailers over the cost of interchange fee rates paid when a consumer uses their credit or debit card. Retailers think that the cost per transaction is too high. The Federal Reserve has formulated a flat 12 cents per transaction fee that would be paid by the retailer to the financial institution. Currently, the interchange rate fee varies between 1-2 percent of the transaction amount with the average interchange fee costing 42 cents.

The Federal Reserve did not calculate the overall costs of a credit or debit card program, it just computed what the electronic cost was to receive, authorize, and settle the one-time card transaction. The problem with this approach is that the major costs of operating a card program are not being considered. Data processing, 24-hour fraud prevention and detection, personnel, licensing, compliance, and a major expense – fraud, were all costs ignored by the Federal Reserve in computing the flat rate of 12 cents per transaction.

Here’s an example of what the Fed is not taking into consideration: A $2,000 stolen debit card is used at a major retailer to buy a big screen television. Who pays the fraud? Often times the retailer never looks at the card being used. That’s because they are not responsible for the theft amount. The financial institution is left holding the bag for covering the amount of the loss once the unauthorized card transaction is reported. How many 12-cent transactions does it take to cover that $2,000 loss realized by the financial institution? Card fraud occurs every year and retailers pay very little, if any, of the cost.

If the 12-cent flat rate interchange fee is implemented, consumers can expect to see caps placed on purchase amounts to reduce the increased fraud loss exposure. Some have suggested caps of $250 or less on debit and credit card transactions. That major retailer can then enjoy the risks of accepting a $2,000 personal check for that big screen television.

House Bill H.R. 1081 and Senate Bill S. 575 have been introduced by Congress to delay the proposed changes to interchange rates and allow a study to realistically consider the impact on financial institutions and consumers. Financial institutions are hopeful that any changes are done only after a careful analysis of the impact of such legislation is completed. Consumers have shown they want to use debit cards; so let’s not rush to a set price that will ultimately hurt the consumer.

Sincerely,

Greg Olmsted, President/CEO

North Alabama Educators Credit Union

Financial Institutions versus Retailers

Previous posts have discussed the ongoing feud between financial institutions and retailers over the issue of interchange fees. An interchange fee is a fee paid by merchants when they accept a debit or credit card for payment of a purchase. The merchants now pay a percentage between 1 and 2 percent of the transaction amount depending upon the product or service. The Federal Reserve is now proposing to set a flat rate of $0.12 per transaction on all debit and credit card transactions.

The retailers say that they will pass along the savings from the reduced interchange rates back to the consumers through lower prices of their products and services. This may or may not occur in the short term following the pricing change, but will the savings still be there 5 years down the road when no one is talking about interchange rates anymore?

Institutions will lose revenue if this Federal Reserve proposal is implemented. There is no doubt about that. Our existing card program costs (that were not considered by the Federal Reserve) such as fraud, personnel, data processing, licensing fees, compliance, and 24-hour monitoring will still be there. Additional fees would have to be implemented on checking accounts and credit cards to make up the lost revenue.

Credit unions are urging Congress to step back and conduct a compete analysis of all costs associated with maintaining a debit and credit card program. There should be an economic impact review of this Federal Reserve proposal. It may be time for changes in the interchange fee structure, but the process used to calculate the proposed $0.12 flat rate is flawed and will cause more harm than good to consumers.

Scale Back Auto Loan Sale - as low as 2.99% APR

How does a fixed rate as low as 2.99% Annual Percentage Rate (APR) on terms as long as 60 months sound?? Our "Scale Back Auto Loan Sale" going on now through April 30th offers this great loan rate for new AND used automobiles financed during the promotion. The loans themselves can be for purchases or refinances from another financial institution. Qualified members can also delay their first loan payment up to 90 days. Wouldn't be nice to not have a car payment for a few months? That money could be used to pay down other debt, pay for a special project, or just provide a little money for a Spring Break trip. It is important to note here that loan interest would accrue during the loan deferment time frame.

The theme of the loan promotion is similar to the "Scale Back Alabama" weight loss campaign in that cutting your costs is a smart idea. We have money to lend so if you are going to borrow money make sure that your costs are minimized. Weigh your options, trim your budget, and lose high interest rates with a low cost loan from North Alabama Educators Credit Union!

As with all loans at the credit union, we are an Equal Credit Opportunity Lender. Qualifications must be met on all loans. Your actual loan interest rate will be determined by your credit worthiness as well as other factors, such as the term length of your loan. For a 60-month term as referenced above, the payments would be as low as $18.00 per $1,000 borrowed. Please keep in mind that well qualified borrowers with a credit score of 748 and over can actually receive a lower loan rate than advertised above. To refinance a loan already financed with NAECU, an additional $2,500 must be added to the existing balance to qualify for the reduced rate.

Visit our web site at www.naecu.org for rates and terms available.

$10,000 Donation to American Cancer Society

North Alabama Educators Credit Union presented a $10,000 check to the American Cancer Society for the benefit of breast cancer awareness in the Tennessee Valley. The donation was given during our 55th Annual Membership Meeting that was held on Monday, February 7th. Liz Payne of the American Cancer Society (pictured above) was presented the check.

Many thanks are extended to our employees and members who have participated in the many fundraiser ideas throughout the year. These fundraiser ideas ranged from a bass fishing tournament, group yard sale, jewelry party, pictures with Santa, pictures with the Easter Bunny, a DIRECTV drawing, Alabama and Auburn gift basket drawings, and breast cancer awareness merchandise sales. Our employees have generated many creative ideas over the years for these fundraiser events. Good job by the employees and members of NAECU!!

Caller ID Spoofing

The Better Business Bureau of North Alabama is warning residents about Caller ID Spoofing cases taking place in the Tennessee Valley. The purpose of the calls may vary but the troubling issue is that the number appearing on the consumer's caller ID appears to be a local number - in fact in many cases the number is only one digit away from their own number. It might even be the local number for the hospital, fire department, or the credit union.

In reality, the caller is using technology to alter the information that appears on a call recipient's Caller ID display - a practice known as Caller ID Spoofing. The recipient of the calls reads their caller ID display and sees a familiar number or local number and chooses to answers the call.

Consumers are advised to be aware of Caller ID Spoofing technology and understand that the caller's number displayed may not always be the true origin of the call. Some of these spoofing attempts are trying to sell services but others are outright scams designed to trick people into providing personal information. ID theft is one purpose of these type of calls.

Never give out any personal information to a company or individual unless you know with 100% certainty of who you are dealing with. If you receive a call that claims to be from a trusted source, like the credit union, you should not be asked to provide any personal information. If you receive any suspicious calls you should contact the associated organization using a known published telephone number to verify the nature of the initial call.

There have been cases of Caller ID Spoofing where the caller spoofed a local financial institution's name and telephone number. Trust but verify is the best policy!

Alabama Securities Commission

It was a pleasure to listen to Joseph P. Borg, Director of the Alabama Securities Commission (ASC), speak at a luncheon meeting earlier today. Various investment fraud examples were discussed as well as a need for general investor educational resources. The current economic environment is almost a perfect storm for fraudsters. You have very low yields on traditional investments so investors are looking to earn a higher yield on their liquid cash. The volatile markets of real estate, rising oil prices, and rising gold prices have also created opportunities for investment fraud in these areas. This does not mean that investments in these areas are a bad choice, just that scammers use the headlines to sell legitimacy and to gain trust.

Investments that offer very high yields should always be reviewed and researched very closely. How many times have we heard "if it sounds too good to be true, it probably is". One of the fraud examples given during the presentation offered investors a doubling of their investment within 18 months. This simply is not realistic and sure enough the investors lost all of their investment dollars. Do not allow the lure of a high yield prospect to cloud good financial judgement.

The ASC website has valuable resources, investor alerts, and links to help educate investors in making a sound financial investment. Here is their website - http://www.asc.state.al.us/index.htm . Check it out!

Electronic Pickpocketing

A few members have contacted the credit union about national news media stories on the issue of "electronic pickpocketing" and concerns over data theft. For those who have not heard about electronic pickpocketing, it is basically theft of data from a plastic card that possesses a RFID (radio frequency identification) chip. The RFID chip sends out a short wave radio signal so that merchant readers can receive the signal and authorize transactions on the card without the need for a physical swipe of the card. Scammers have realized that a cheap portable card reader could be used to obtain someones card information while the card is still secured in the person's wallet or purse. In a crowded mall or shopping area, someone could be standing within a few feet and electronically obtain some of the card information. There are a multitude of videos online that demonstrate this type of data theft. The card number and expiration dates can be stolen with this type of technology.

North Alabama Educators Credit Union does not utilize RFID chips with our VISA Debit Cards. The VISA Credit Cards issued through our partner Elan also do not utilize RFID technology. As a result, there is no threat of data theft from electronic pickpocketing on our member cards.

It is important to note that the 3-digit security code on the back of cards cannot be obtained via electronic pickpocketing. The majority of Internet transactions with a credit or debit card would require the correct 3-digit security code to complete a transaction. For those who do possess cards with an RFID chip there are special protective card sleeves available that would block transmission of the short wave signal.

Regardless, it is still unnerving to say the least that someone could electronically steal card information from your wallet or purse just by standing close by.

Again, North Alabama Educators Credit Union does NOT utilize RFID technology for either our debit or credit cards.