April 6, 2012
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The Time to Act Is Now: Contact Your Senators Today on MBL!
The Senate Majority Leader has promised a vote soon on legislation to raise the cap on credit union member business lending, so credit union supporters must act now to urge their U.S. Senators to vote for the bill.

 
     
  Call to Action Resource
Credit unions can use a short video on CUBE TV, featuring CUNA President/CEO Bill Cheney, to educate staff, volunteers and members about the member business lending call to action.

 
  State Legislative Session Wrap-Up
From the credit union perspective, it was an extremely busy Georgia legislative session. Here's a look at what passed and what didn't, and what it all means to credit unions.

 
  Four Quick Ways to Make the Most of the Off-Session
The Legislature has concluded its business and lawmakers are back in their districts. Here are some ideas for getting to know your legislators while they're nearby.

 
  Foreclosure Reforms to Widen
State and federal officials are looking at ways to extend mortgage lending reforms, already being applied at the country's five largest banks, to smaller financial institutions.

 
  Opportunity for Credit Unions? Surprising Demographic Struggling with Student-Loan Debt
The heavy burden of student-loan debt isn't just for the young anymore. A Federal Reserve study finds that many older Americans, including some in their 80s, are also dealing with this issue.

 
  Aftershocks Continue After News of Credit Card Data Breach
In the wake of a security breach that could put large numbers of cardholders at financial risk, Visa has said it will no longer employ the transaction-processing company at which the breach occurred.

 
  April Is Financial Literacy Month
Take advantage of several ideas for promoting saving and financial education during April, which includes National Credit Union Youth Week and is also an excellent time to plan for Board Financial Literacy Training.

 
  CUs Rank Among Top Finance Leaders in Georgia
Fourteen Georgia credit union leaders made this year's edition of the Atlanta Business Chronicle's annual list of the state's top 100 financial industry leaders.

 
 
 
The Time to Act Is Now: Contact Your Senators Today on MBL!

NowCredit unions across the country are responding to the nationwide call to action for MBL legislation, and the time to act is now. Before the Congressional recess began, Senate Majority Leader Harry Reid (D-NV)and Senator Mark Udall (D-CO) spoke to the Senate in favor of the legislation that will increase the credit union member business lending cap, and Senator Reid was very clear that there will be a vote. This news comes right on the heels of CUNA’s Governmental Affairs Conference, where Georgia credit union advocates (along with credit union advocates from across the country) pushed for the MBL legislation, which has been recently reintroduced as a standalone bill S. 2231. This bill was introduced under special rules that allow it to bypass all committee jurisdiction and it can be called up for a full vote by the Senate at any time; believed to be soon (possibly as early as the week of April 16th). Georgia credit unions are already engaged, but more action is needed by all credit unions.

Act NowWhat Is Needed:

Encourage Senator Saxby Chambliss (R) and Senator Johnny Isakson (R) to support Senator Udall’s Bill, S. 2231, when it comes to the floor for a vote. Neither Georgia Senator has signed on in support of this credit union legislation. Both Senators have shared that they are still studying the bill and are unwilling to commit (as they thought it would never come up for a vote).

How:

  1. It is very important that every credit union get involved by asking their executives, employees and volunteers to write to the two Senators. They can write to them here. It’s quick, and takes no more than 30 seconds, but can be a powerful way to let Georgia’s Senators know how many people are for this legislation (as the bankers are sending letters opposing this issue as you read this).
  2. If your credit union issues business loans, contact members – especially your small-business members – to reach out to the Senators and urge their support for the Credit Union Small Business Jobs Bill.
  3. As a way to increase the volume in support of credit unions, CUNA has set up a toll-free number (1-877-642-4223). Once a caller provides a zip code, the number automatically routes to the Senate offices. Talking points are provided in the call, but our ask is simple: “Please support Senator Udall’s bill S. 2231 when it comes to the floor for a vote.” A caller can share how this helps provide capital to small businesses in Georgia, but the message remains the same: Support S. 2231! It takes just a minute to place a call, but the impact is huge.

If you see either Senator during the next two weeks at civic and/or community events, be sure to share these sentiments in person! It will take all of us acting together to move this bill forward, and is positive for all credit unions, whether they provide member business loans or not. Engage your staff in contacting the Senators today!

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CheneyCall to Action Resource

Seeking a quick way to educate staff, volunteers or members on the call to action? Click here for a short video from CUNA CEO Bill Cheney on the call to action that can be found on CUBE TV, and why action is needed now for the credit union industry. This video can be utilized on your credit union’s intranet, on your website, and even on your Facebook page. If you want to embed this within your site, simply click on the embed icon under the video in CUBE TV for the code.

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Sine dieState Legislative Session Wrap-Up

The state legislative session adjourned as of midnight on Thursday, March 29th, bringing to a close one of the busiest state sessions on record for credit union interests. Unlike the close of the 2011 session, bills will not carry forward into the next year, so the slate starts clean in 2013. For credit unions, this was a session full of bills of industry interest: there were positive bills of note that were lobbied to pass, some that were amended in the process to make them more palatable (that either passed or failed), and other bills that were outright defeated along the way. A broad overview of what happened in the state legislature in 2012:

Bills that Passed in 2012

  • Garnishment Notices: The first bill that Governor Nathan Deal signed into law back in February was the Garnishment Notice Response Bill HB 683 by Representative Wendell Willard (R-Sandy Springs). The bill went into effect immediately, and is positive for credit unions and other businesses. This law gives businesses the legal ability to respond to garnishment notices without utilizing an attorney (and having that added expense). This law was sought as a remedy to the situation created as a result of a 2011 Georgia Supreme Court ruling that requires garnishment answers to be done by an attorney. Credit unions and the GCUA Government Influence Team worked hard to move this legislation forward, speaking one-on-one with legislators and testifying in hearing. Credit union advocates who attended the Grassroots Academy in January were also instrumental in asking their senators and representatives for their support on the issue (as well as the below HB 110).
  • Foreclosed Property Registry Standards: After almost two years of lobbying efforts, the Foreclosure Registry Bill (HB 110) by Rep. Mike Jacobs (R-Atlanta) passed and now awaits the Governor’s signature to become law. This bill will set uniform standards on how cities and counties can design foreclosure and/or vacant property registries, and is positive for credit unions as it will exempt financial institutions as owners of a property through foreclosure from registering (and paying fees), provided they file the deed within 60 days with required contact information sent to the city and/or county. If signed into law, the bill will go into effect on July 1, 2012.
  • State Tax Reform: The Georgia’s Jobs and Family Tax Reform Plan (HB 386) quickly passed in the last two weeks of the session, and is a pared-down version of the tax reform proposals of 2011. What is positive for credit unions: It does not retain the previously sought sales-tax expansion on services such as safe-deposit boxes and credit card membership fees (among others), nor does it remove the various tax credits that were sought last year. There is no language that disadvantages credit unions by altering the tax status for our industry. What it does: This bill removes the manufacturing energy tax, adds state sales tax to online purchases, decreases the married tax penalty, and removes the sales tax on vehicles. Replacing the tax on vehicles is a new title fee that would be applied to all car sales, new or used, regardless of how they are sold (applies to person-to-person sales also). It would also apply to any individual moving to the state when they change their title. For those who retain their current vehicles, annual ad valorem taxes still apply. For those who purchase a vehicle as of March 1, 2013, there is no ad valorem and the above title fee applies. From a credit union’s perspective, the bill states that the dealer of the motor vehicle will be charged with transmitting the application for title and fees. However, the corresponding rules have yet to be written, and will be analyzed when they are released.
  • Bankruptcy Exemptions: The Bankruptcy Exemption Reform Bill (SB 117) by Sen. Jesse Stone (R-Waynesboro) passed and awaits the Governor’s signature to become law. This bill will modestly increase the real property exemption from $10,000 to $21,500 ($20,000 to $43,000 for joint spousal debtors), and $21,500 for principal residences, slightly lower than the federal exemptions. What is positive for credit unions: This bill was amended to remove the steep increases originally sought in the personal, property and wild-card exemptions per debtor, and only increase the real property exemption. Although there have been attempts to drastically increase several exemptions each year, this is the first time the state has adjusted them in more than 10 years (due to the narrow focus and lower amounts sought). If signed into law, this bill will become effective upon the signature of the Governor.
  • Real Estate Lending: The Residential Real Property Rights Bill (SB 365) by Sen. Bill Hamrick (R-Carrollton), “carried” by Sen. Jesse Stone (R-Waynesboro), awaits the Governor’s signature to become law. The bill clarifies what is defined as an unauthorized practice of law: that attorneys are the sole entity that have the ability to close a purchase money real estate loan or initiate a foreclosure. What is positive for credit unions: This bill was amended in the process to ensure that it would not impact current operations in home equities, HELOCs, open-ended lending, and refinances (where there are no changes to existing deeds). It was amended early in the session to remove the original language that would require additional disclosures in loan agreements (with the possibility of voiding a mortgage and/or the opportunity for judicial foreclosure).
  • Anti-Robo-Signing Foreclosures: The Attorney General’s Robo-Signing Foreclosure Bill (HB 237) by Rep. Rich Golick (R-Smyrna) moved forward this year and now awaits the Governor’s signature to become law. This bill includes foreclosure documents in the list of materials that could be included in residential mortgage fraud cases. What is positive for credit unions: The bill maintains a safe harbor provision for innocent mistakes, and was amended to remove language that would have broadened subpoena powers.
  • Commercial Foreclosure Notices: The Commercial Foreclosure Notice Bill (SB 333) by Sen. Jesse Stone (R-Waynesboro) awaits the Governor’s signature to become law. This bill will require that the same foreclosure notification that is provided in a residential foreclosure be given in a commercial foreclosure. What is positive for credit unions: This bill outlines what many, if not all, credit unions currently provide today in notification of commercial/farm foreclosures (so no changes to operations). The bill was not amended to alter the manner in which the normal foreclosure process for residential properties.

Georgia HouseOther Bills of Note that Passed in 2012

  • DBF: One of the Department of Banking and Finance housekeeping bills, HB 945 by Rep. Sam Teasley (R-Marietta), now awaits the Governor’s signature to become law. What is positive for credit unions: While the bill opens a section of law that can change our industry, if amended, it passed without any amendments that would impact credit unions.
  • Derivatives: The Derivatives Exposure Bill HB 886 by Rep. Bruce Williamson (R-Monroe) awaits the Governor’s signature to become law. This bill applies to only those state banks that participate in derivatives, and allows them to be in compliance with the Dodd-Frank Act by permitting the exposure to be counted within the bank’s legal lending limits.
  • Insurance: The Insurance Protection Letter Bill SB 331 by Sen. David Shafer (R-Duluth) awaits the Governor’s signature to become law, and was at the request of Insurance Commissioner Ralph Hudgens to create a new type of instrument title insurance companies may issue to indemnify a buyer, lender or seller in transactions where title to real estate is being conveyed.
  • Criminal Justice Reform: The Governor’s Criminal Justice Reform for Georgians Bill HB 1176 by Rep. Rich Golick (R-Smyrna) enacted countless criminal justice reform measures, ranging from child abuse to mandatory reporting to best practices in supervising inmates. Of interest to credit unions: In the provisions, it clarifies what is considered forgery in regard to check writing in the first degree up to fourth degree, and what is defined as a felony in forgery. It also increases the amount of deposit account fraud limits that trigger different levels of imprisonment. This theme of higher triggers for imprisonment runs throughout the legislation.
  • Special Purpose Banks: The Merchant Acquirer Limited Purpose Bank Act (HB 898) by Rep. Earl Ehrhart (R-Powder Springs) was signed into law on March 28th. This law will provide Georgia companies such as Global Payments and TYSYS the ability to maintain their own settlement accounts in a narrowly defined bank charter, and does not impact credit unions as currently written. Another bill that sets up a “special purpose bank” is the Georgia Land Bank Bill SB 284 by Sen. Tim Golden (R-Valdosta). This bill allows for the creation of land banks to acquire and manage property. Neither bill impacts credit unions.
  • Condo Associations: There were several attempts this session by condo/homeowner association lobbying interests to supersede the priority lien status of financial institutions so as to recoup past-due association fees and fines (see related failed bills below). One of the “vehicles” to carry the condo/homeowner association language was SB 136 by Sen. Bill Hamrick (R-Carrollton). Although it passed, what is positive to credit unions is that it did not retain any of the language that would have superseded the lien status.
  • Co-Op Resolutions: This year, the state Legislature honored credit unions and cooperatives by passing two resolutions celebrating the International Year of Cooperatives (HR 1772 by Rep. Tom Dickson R-Cohutta and SR 1102 by Sen. Chip Rogers R-Woodstock). These resolutions honor cooperative groups worldwide and commemorate the impact they have on millions of individuals.
  • False Liens: the False Lien Statement Bill HB 997 by Rep. B.J. Pak (R-Lilburn) awaits the Governor’s signature to become law. This bill would make it a crime to knowingly make a false claim of debt against a public employee. There are situations where individuals are making “retaliatory” false-lien statements against judges who may have ruled against them, and this bill seeks to discourage this from happening.

Voting buttonBills that Failed in 2012

Foreclosure Process

  • Deficiency Judgments: The Fair Market Value Deficiency Judgment Bill HB 1047 by Rep. Matt Ramsey (R-Peachtree City) did not move forward, despite an attempt in the last two days of the session to attach the language to a moving bill (HB 129). This bill would have required any lender seeking a deficiency judgment prior a foreclosure to obtain a ruling of the fair market value of the property prior.
  • Foreclosure Tenant Provisions: The Tenant Provision Bill HB 445 by Rep. Andy Welch (R-McDonough) did not move forward. This bill would have expanded the rights of renters in a foreclosure, and was amended in the process to remove language that originally sought to force foreclosing parties to refund any security deposits that had been paid by a tenant.
  • Right to Cure Foreclosures: The Foreclosure Right to Cure Bill (HB 419) by Rep. Billy Mitchell (D-Stone Mountain) stalled in the last three days of the session and did not move forward. This bill had been amended from its original language that sought to increase the foreclosure notice period from 30 to 90 days, and was modified to only seek to outline a debtor’s right to cure a foreclosure (provided the debtor paid all past-due payments, late fees and fines in good funds prior to the date of the foreclosure).
  • Foreclosure Notice Period: The Foreclosure Deed Filing Acceleration Bill HB 1042 by Rep. Tommie Benton (R-Jefferson) did not move forward. This bill would have required any foreclosing party to file the deed under power within 45 days instead of 90 days, and would have added penalties and fines for non-compliance.
  • Commercial Foreclosures: The Commercial Loan Foreclosure Notice Bill SB 466 by Sen. Lindsey Tippens (R-Marietta) did not move forward. It would have required lenders of commercial loans in excess of $1 million to provide either a notice of foreclosure or a notice of a “cease funding” to contractors and subcontractors on the project, provided that they have previously provided their contact information to the lender.
  • Judicial Foreclosure: The Judicial Foreclosure Bill HB 781 by Rep. Dar’shun Kendrick (D-Lithonia) did not move forward. If it had, this bill would have changed Georgia from a non-judicial state to a judicial foreclosure state, which would require any foreclosure to go through the court system. In addition, the bill would prevent any financial institution from pursuing deficiency judgments. The Government Influence Team testified in a hearing against this legislation.

Lending Operations

  • Secondary Market: The Small Business Borrower Protection Act (SB 448) by Sen. Don Balfour (R-Snellville) did not move forward in the last hours of the session. This bill received much publicity, and was intended to rein in negative practices by some investment companies in the marketplace who are buying up large distressed asset pools of foreclosed properties with the intent of “only going after the debtors” before pursuing the properties. Although this bill was “high profile” and covered in the press, the Government Influence Team worked quietly with other interests and legislators to exempt all federally insured financial institutions and subsidiaries from the bill to avoid impacting the ability of financial institutions to sell portfolios on the secondary market if it had moved forward. 
  • Cosigner Notifications: The Cosigner Notification Bill HB 245 by Rep. Rusty Kidd (I-Milledgeville) did not move forward. This legislation would have required the notification of a co-signer whenever a loan was in default to the last known address, without penalties, nor impact on the debt obligation.
  • Lien Status: There were multiple unsuccessful attempts by lobbying interests for the condo and/or homeowners associations to amend bills to circumvent the lien priority status to force financial institutions to pay back fees and fines. There was the Condo Lien Assignment Bill SB 479 by Sen. Curt Thompson (D-Tucker) which if it had passed, would have required a purchaser of a condo in the event of a foreclosure to pay up to six months of past due fees/fines on the property owned by the previous owner. There were also unsuccessful attempts by the condo/homeowner association lobbyists to alter the above mentioned SB 136 by Sen. Bill Hamrick (R-Carrollton), as well as unsuccessful attempts to amend the Property Conveyance Fee Bill HB 129 by Rep. Doug McKillip (R-Athens).

LegislatureOther Bills of Note that Did Not Pass

The above is the overview of the activity on bills of note, but there were hundreds more that were monitored throughout the session. To review all the bills that were monitored on behalf of credit unions please access the Georgia credit union legislative tracking site. You can continue to follow key activity as it happens via Twitter @GCUAGov.
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Number fourFour Quick Ways to Make the Most of the Off-Session

This year is an election year, and state legislators are back at their home districts to not just to return to their (somewhat) normal lives, but to start campaigning, provided they are running for re-election. What does this mean for credit unions? This is an ideal opportunity to engage with your local legislators back home in the district. Many of these individuals will be in elected positions again, and/or seek higher positions. Many of our U.S. Congressmen were once state legislators. Legislators are much less likely to pass legislation that could negatively impact the businesses that they know well. Utilize the time after the close of the state session to get to know your legislators. Although time is a rare commodity, here are a few ideas (some that can be done in five minutes) that can build influence for your credit union:

  • Thank them. A short, handwritten thank you note thanking them for their time that they serve in the Legislature can be powerful. It takes just a few minutes, but few people take the time.
  • Invite them. Do you have an open house, a branch opening or a credit union event? Even if you do not, invite your legislators to visit your credit union.
  • Go where they are. Many legislators have town hall meetings in the districts to discuss issues. Get on the email list for your legislators to learn when and where these opportunities may arise.
  • Need an idea for a chapter meeting? Invite a local legislator to speak at your next meeting, or invite multiple legislators and have a legislator-focused meeting. If they are attending, please let a member of the Government Influence Team know.
Above all, keep an eye out for opportunities to engage with your legislators. During the election season there will be several opportunities as they will likely be making the rounds at civic meetings and community events. When you do engage with them, make sure they know you are a credit union person!
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ForeclosureForeclosure Reforms to Widen

State and federal officials who recently completed a $25 billion settlement with five of the nation’s largest banks over foreclosure practices have begun discussing how to apply some of the terms of that deal to a wider array of financial firms. The settlement (finalized in February) in part forces the five major banks to overhaul foreclosure practices:

  • forbids “robo-signing” of documents
  • provides a single point of contact to homeowners

Officials have repeatedly said they hope to see similar reforms at other banks and financial firms. “We want to apply the servicing standards to other servicers,” said Patrick Madigan, an assistant Iowa attorney general who helped to negotiate the recent federal-state settlement. “Loan servicing has been a mess for the past four or five years. Reforming that industry is very important and very challenging.” The settlement completed this winter – which also requires banks to reduce the loans of some borrowers, help others refinance their mortgages and pay restitution to some homeowners who faced foreclosure – was reached with Bank of America, Wells Fargo, Citigroup, J.P. Morgan Chase and Ally Financial.

Of note to credit unions: Madigan said officials began within the past week to strategize about which other firms to approach next and what shape negotiations will take. Just last week, a senior Federal Reserve official told lawmakers on Capitol Hill that regulators are preparing to levy fines against eight financial firms over foreclosure practices involving flawed and fraudulent documents. The companies facing those fines – SunTrust Bank, U.S. Bancorp, PNC Financial Services, EverBank, Goldman Sachs, OneWest, MetLife and HSBC’s U.S. bank division – were not part of the recent foreclosure settlement but were found by federal regulators to have undertaken a pattern of negligence and misconduct in the way they serviced mortgage loans. To read more, please click here for the April 2nd article in The Washington Post.
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Opportunity for Credit Unions? Surprising Demographic Struggling with Student-Loan Debt

The April 1st edition of The Washington Post expounded that the burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens. New research from the Federal Reserve Bank of New York shows that:

  • Americans 60 and older still owe about $36 billion in student loans.
  • More than 10 percent of those loans are delinquent.
  •  It is not uncommon for Social Security checks to be garnisheed or for debt collectors to contact borrowers in their 80s over student loans that are decades old.

Past dueThe student-loan debt carried by this demographic highlights what a growing chorus of lawmakers, economists and financial experts say has become a central conflict in the nation’s higher education system: the benefits of a college degree versus the rising tuition rates and the longevity of debt. Some of these older Americans are still grappling with their first wave of student loans, while others took on new debt when they returned to school later in life in hopes of becoming more competitive in the labor force. Many have co-signed for loans with their children or grandchildren to help them afford ballooning tuition.

The recent recession exacerbated this problem, making it harder for older Americans – or the young adults they are supporting in school – to get well-paying jobs. Unlike other debts, student loans cannot be shed in bankruptcy. As a result, some older Americans have found that a college degree led not to a prosperous career but instead to a lifetime under the shadow of debt.

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AftershocksAftershocks Continue After News of Credit Card Data Breach

On Friday, March 30th, GCUA shared with the EFT Council that a security breach at Atlanta-based Global Payments Inc., which processes credit card transactions for banks and merchants, has put countless cardholders at risk. Since then, there have been several articles in the press highlighting the security breach that may affect millions of cardholders of Visa Inc., MasterCard, Inc. and Discover Financial Services. The U.S. Secret Service is investigating the matter.

The aftershocks of this breach continue. As of Tuesday, April 3rd Visa announced that it has dropped Global Payments from its registry of providers that meet data security standards following the breach (Global Payments has stated, however, that they continue to process transactions despite being dropped from the registry). Members of Congress are calling for immediate action to pass data security legislation in the wake of the data-breach news. To read more, please click the above links to Atlanta Business Chronicle articles on the breach.
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Financial literacyApril Is Financial Literacy Month

During the entire month of April, credit unions will be engaged in the National Youth Saving Challenge. Is your credit union participating? You should be!

  • Click here to sign up and get your young members on board with saving this year.
  • National Credit Union Youth Week is April 22-28th. CUNA has lots of resources to help credit unions promote saving to youth and their parents. Click here for celebration ideas and to order promotional materials.
  • April is a great time to plan for Board Financial Literacy Training. This helpful and required training (for federally chartered CUs) is offered at GCUA Annual Convention.
Additionally, at the start of the month, NCUA kicked off a social media campaign on Twitter in conjunction with Financial Literacy Month. The campaign will run the month of April with several daily postings focused weekly themes like tax tips, money management for youth and home ownership. Another resource that consumers can check out year round is www.MyCreditUnion.gov. Launched last year, the Web site provides essential information and helpful tools for consumers to learn about money, protect financial assets and fight fraud. To follow NCUA’s postings for Financial Literacy Month, sign up @TheNCUA on Twitter.
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Atlanta Business Chronicle logoCUs Rank Among Top Finance Leaders in Georgia

Fourteen Georgia credit union leaders were acknowledged in the March 16th edition of the Atlanta Business Chronicle. Each year, the publication spotlights “Atlanta’s Top 100 Leaders in Finance.” This year, CEOs from credit unions across the state made the list. They include:

  • Marshall Boutwell of Gwinnett FCU
  • Warren Butler of Georgia United CU
  • Janet Davis of TIC FCU
  • Don DeCinque of Atlanta Postal CU
  • Rick Foley of Delta Community CU
  • Lin Hodges of Associated CU
  • Ray Hull of The Southern FCU
  • Chris Leggett of LGE Community CU
  • J. Brant K. Malone of Credit Union of Georgia
  • Betsy Mercier of CDC FCU
  • Annlouise Peroutka of The Coca-Cola Company Family FCU
  • Dave Preter of Georgia’s Own CU
  • Leta Stepp Reeves of Powerco FCU
  • John Rhea of Robins FCU
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