The following is an article reprinted with permission from the Winter 2008 edition of The WWR Letter:
The Quest to Go Paperless
By: Rob Rutkowski, Esquire
Attorneys, like credit unions, generate a great deal of paper. Eliminating some of that paper would be very positive for both the lawyer and the credit union manager. To this end, I have recently started a quest to eliminate paper both in my office and at home.
While the scale is much different for an organization seeking to go paperless versus an individual, the goals are the same. It is not just about eliminating paper, although that is certainly worthwhile. It is about changing paper into something that is ultimately more useful than paper stored via traditional means. When you create an electronic document from a piece of paper, it must be searchable and it needs to be stored in folders that can be easily accessed later.
Nowadays, optical character recognition software has achieved a high level of accuracy. Thus for my own personal project, when I scan documents, they are converted into PDF files that are also searchable. Previously, when these documents were sitting in a file cabinet or on my credenza, they were less useful than they are now. Using a “digital” file cabinet full of documents that are searchable gives you access to all of your documents all the time. Things that you may not even remember that you have can be used again.
Fortunately, PDF files have shrunk in size. After scanning thousands of pages for my own personal project, my entire file cabinet of PDF files is only 280 MB. This takes up less than a quarter of a CD-ROM! I anticipate that I could scan every document that I have both at my office and at home and not even fill a single DVD. The data is portable, is well organized and is searchable. In short, it’s much more useful than traditional paper.
For an organization to make this leap it is a question of magnitude. Instead of thousands of pages to scan, it may be tens of thousands or hundreds of thousands of pages. A personal scanner is not going to work in this sort of situation. The good news is that there are vendors that can help with the software and the equipment necessary to run such an operation.
I am just at the beginning of my paperless quest. I still have questions about security and backing up my data. I’m sure that there are things I have not yet even considered. There always are. This, however, will be the stuff of future articles.
Robert Rutkowski is the Managing Partner of WWR’s Credit Union department. Based in the Brooklyn Heights operations center, he can be reached at (216) 739-5004 or rrutkowski@weltman.com.
This is our 2nd anniversary of doing CIiCU! This month, Hal Scoggins is in for Brian Witt and Katherine Weber is in for Guy Messick. Here are the topics:
–How can you tell when a vendor is high risk? (3:45)
–Tips on building a marketing campaign around a specific product. (11:20)
–How law enforcement uses Suspicious Activity Reports. (19:15)
–Dormant accounts and escheatment: tips and traps. (26:10)
–Tips on using employee pictures in ads and for identification. (31:40)
–Dealing with requests to change how you report an account to a Consumer Reporting Agency. (34:55)
–RESPA reform proposal put out by HUD. (44:10)
The CIiCU hosts are:
Brian Witt
Member
Farleigh Wada Witt,
Attorneys at Law
121 SW Morrison Street, Suite 600
Portland, Oregon 97204
Telephone: 503-228-6044
Fax: 503-228-1741
http://www.farleighwitt.com
Guy Messick
Member
Messick & Weber P.C.
The Madison Building, 108 Chesley Drive
Media, Pennsylvania 19063-1712
Telephone: 610-891-9000
Fax: 610-891-9008
http://www.cusolaw.com
Faith Anderson
American Airlines Credit Union
P.O. Box 619001
MD 2100
DFW Airport, TX
75261-9001
(800) 533-0035
https://www.aacreditunion.org/default.asp
Robert Rutkowski
Shareholder
Weltman, Weinberg & Reis Co., L.P.A.
323 W. Lakeside Avenue, Suite 200
Cleveland, Ohio 44113
Telephone: 216-739-5004
Fax: 216-739-5642
http://thatcreditunionblog.com
http://www.weltman.com
Subcribe to the show via iTunes Music Store: http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=151785964&s=143441
The following is an article reprinted with permission from the Winter 2008 edition of The WWR Letter:
Criminal Forfeiture of Vehicles
By: Matt Young, Esquire
Under Ohio law, and in most states, vehicle owners may subject their vehicle to forfeiture upon conviction of certain felony offenses. These offenses most commonly include repeatedly operating the vehicle while impaired by drugs or alcohol (DUI/DWI), conviction of certain drug related offenses involving the vehicle subject to the forfeiture or driving with a suspended license (DUS) (includes knowingly permitting a person who is under suspension to drive the owner’s vehicle.)* As a lienholder of collateral, credit unions must be mindful of such laws and respond promptly when notified that such forfeiture may occur or risk losing its lien interest in the collateral.
Before an order of criminal forfeiture can be issued, the law enforcement agency that seized the vehicle must conduct a search of public records relating to the vehicle and identify any lienholder or other party with an ownership interest in the subject vehicle. The court is then required to notify the lienholder or other person(s) with an interest in the vehicle with a notice of the potential forfeiture and the manner by which the vehicle may be disposed. This notice must be sent via certified mail, return receipt requested, or by personal service.
The forfeiture cannot occur if the lienholder or other such person with an ownership interest can establish to the court, usually by motion, that:
· The lienholder or other person knew or should have known that the vehicle would be used or involved in the violation resulting in the issuance of criminal forfeiture
· The lienholder or other person did not expressly/impliedly consent to the use or involvement of the vehicle in that violation
· The lien or ownership interest was perfected pursuant to law prior to the seizure, and
· Attest that the lienholder (or other holder) will not return the vehicle to the person from whom the vehicle was seized or to any member of that person’s family.
Upon presentment of the above, a court will typically allow a lienholder to take possession of the collateral for purposes of repossession and sale.** This collateral must be sold in the same commercially reasonable manner as any other collateral repossessed by the credit union. When preparing requisite notices of sale, the credit union must be mindful of the court’s order not to return the vehicle to the offender or members of his or her family, and make the appropriate changes to the notice to reflect this fact.*** Further, the credit union must ensure the auction house or seller of the collateral is aware of the restrictions on the sale to avoid violating a court’s order.
Being aware of forfeiture laws and the related notices that result from these laws is important for the protection of the credit union’s lien interest in its collateral. Upon receipt of such a forfeiture notice from the court, immediately notify your legal counsel so that the appropriate measures can be taken and the credit union avoids forfeiting any legal interest it has in its collateral.
Matt Young is an associate in the Credit Union department in the Brooklyn Heights operations center. He can be reached at (216) 739-5726 or myoung@weltman.com.
* R.C. § 4503.234 provides a comprehensive list of forfeitable offenses
** Less commonly a court may order the vehicle to sale, the proceeds of which be must be paid to the lienholder or other holder, less any costs for the seizure, storage and maintenance of the vehicle.
*** Review these changes with your legal counsel to ensure the notices remain legally compliant.
The following is an article reprinted with permission from the Winter 2008 edition of The WWR Letter:
eBay Sales of Repossessed Cars
By: Jennifer Monty, Esquire
“Welcome to eBay—the next frontier in the sale of reposed cars?” Or, “Welcome to eBay, evidence of a sale being unreasonable?” With its rainbow colored headlines, attractive pictures, and ease of surfing, eBay is a favorite of buyers and sellers of electronics, shoes, clothing, and collectibles. But is eBay the best outlet for secured creditors to sell vehicles?
In Ohio, the Revised Code (“ORC”) governs both notice of the sale and the manner of the sale. The relevant portions of the ORC governing repossession and sale are modeled on the Uniform Commercial Code’s (“UCC”) Article 9.
In an ideal situation, the credit union (secured creditor) files its replevin action after a member defaults on its car loan. The court grants the credit union final judgment and possession of the vehicle. The credit union then notifies the member of the sale of the vehicle and conducts the sale in a “commercially reasonable” manner.
In Ohio, every aspect of the sale of collateral must be commercially reasonable including the method of the sale, the manner of the sale, and the time and place of the sale. If the disposition of the collateral is commercially reasonable, it can be done by public or private proceedings. The key to every aspect of the sale is that it be found “commercially reasonable.”
Notice
Every seller of repossessed property knows that a proper notice must be sent to the debtor. Notice not only gives the debtor the opportunity to redeem the vehicle, but also allows the creditor to collect any deficiency balance after a sale.
Notice is easy to give for the standard private and public sales. The ORC provides sample forms that contain all the required information, including information on:
· The debtor and the secured party
· The collateral that will be sold
· The method of the sale
· That the debtor can get an accounting of the unpaid balance and the charge, if any, for an accounting, and
· The time and place of the sale. The place must be identified by the place of the business or address that reasonably describes the location of a public sale or the time after which a private sale may be made.
Additionally, if the sale involves a consumer transaction, there must also be a description of:
· The liability for a deficiency
· A telephone number where the debtor can call to redeem the collateral, and
· A telephone number or mailing address where the debtor can get additional information regarding the sale
The sample form can be found at O.R.C. 1309.613 and O.R.C. 1309.614. The ORC also provides that notice must be sent after the default and at least 10 days before the sale.
Notice is more complicated when deciding whether a sale will be public or private because different information is required based on whether the sale is private or public. If a seller incorrectly states whether the sale is private or public, courts routinely hold that the entire sale was unreasonable. If a court finds that a sale is unreasonable, the creditor cannot collect on any deficiency balance.
By its very nature, eBay and other online sites are difficult to classify as public or private sales. Certainly accessing the Internet from the privacy of your home office would appear to be private, but the information, price, and bidding is all part of a public auction that anyone with an eBay password can view.
The official commentary to the ORC and UCC Article 9 discuss the difference between “public” and “private” sales. The commentary states that a public sale is a sale where the “price is determined after the public has had a meaningful opportunity for competitive bidding” and “competitive bidding” involves an advertisement or public notice of the sale.
Public notice of sales provide information to the general public about when, where and what will be sold. Courts often look to the most-widely read publication in the area— the Columbus Dispatch, Cleveland Plain Dealer, Cincinnati Enquirer, etc. A question remains whether merely advertising a vehicle on eBay provides sufficient notice to the general public. Notice of the sale posted on an online news site may be sufficient to show commercial reasonableness. Some Ohio courts look to who has access. A recent court found that an online auction that could only be viewed by dealers, although national in scope, was a private sale and a private sale notice must be provided.
The problem that remains is what type of notice the member should receive. Some scholars suggest giving a general notice and not identifying whether the sale is private or public, but merely that the sale will occur on eBay and providing the length of time of the sale and the web address. See, “eBay Actions of Repossessed Motor Vehicles”, 31 s. Ill. U. L. J 281.
Commercial Reasonableness of the Sale
Even if notice for the sale is given correctly, a challenge may still be made that the sale was not commercially reasonable.
Both UCC Article 9 and the ORC provide definitions of commercial reasonableness stating that a sale is reasonable if the sale is made:
(1) In the usual manner on any recognized market
(2) At the price current in any recognized market at the time of the sale or
(3) In conformity with reasonable commercial practices among dealers in the type of property that is the subject of the sale.
Recognized market is defined as a market where the prices are not subject to individual negotiation, and the commentary gives the example of the New York Stock Exchange. In contrast, the commentary provides that markets where there are price guides or where items are disposed of through dealer auctions are not recognized markets. Based on the definitions and commentary, the only way to show a commercially reasonable sale is if it is in conformity with the practices in the area.
A search of Ohio cases provides no assistance in the area of eBay sales of repossessed motor vehicles. Based on the lack of case law, either few secured creditors are opting to sell their vehicles on eBay or the debtors have not been challenging the sales.
Most credit unions probably remain wary to be the creator of new legal precedent for eBay sales of repossessed motor vehicles. Until Ohio courts definitively state whether eBay sales are private or public sales, determine the appropriate notice and explain sufficient advertising for online sales, credit unions must realize that eBay sales may subject the credit union to litigation on the reasonableness of the sale.
Jennifer M. Monty is an Associate in the Litigation & Defense department of the Cleveland office. She can be reached at (216) 685-1136 or jmonty@weltman.com.
How often do you use brainstorming as a creative tool? It is easy to do. Get five people together from the management team at the credit union and sit down for an hour in front of a white board. Ask questions and write down the group’s ideas on the white board. Brainstorming can be very productive. Here are some ideas that you could use to get started.
What do your members need? What characteristics are unique about your membership? What does the credit union need? Do your members need affordable real estate loans? When was the last time you targeted chattel loans? Remember the computer loan? Bring it back. Get your members to think about buying a new laptop and financing it at the credit union.
Do your members want no-fee credit cards with a strong reward program? What about your bread-and-butter business: car loans, boat loans and recreational vehicles. When was the last time you did a marketing piece on them? How can you spin something different about these products? Second car loans? Spoil yourself loans? What about home improvement loans? Spring is approaching; encourage your members to build new decks or sunrooms or additions and finance them at the credit union.
It doesn’t have to be limited to lending products either. If you have a competitive rate on a share certificate, think of a creative way to sell it. Are you offering a bill pay program? Some financial institutions are even offering a deposit-checks-at-home program. Do you have a particularly honest membership base? Build on it. You know your members better than anyone. How can the credit union improve their lives even in small ways?
Why not plan to launch a new marketing campaign on a particular loan product every quarter? Even if a loan program doesn’t get crazy results, who cares? You’re generating buzz and if you are creative enough, one of these programs will justify what you spend by itself. Look at how Apple Computer generates so much attention. It is always launching new products and holding press conferences. People get excited about Apples’ products. If you plan in advance, and pace yourself in terms of time and money, you can generate that kind of interest from your field of membership. Plus it doesn’t have to be expensive marketing. It can be done through your newsletter, posters in the branch, links on the website and cross-selling on the front line. You don’t need to hire outside help to do that.
Just the act of sitting down and brainstorming and writing down every idea no matter how silly will generate concepts that will benefit the credit union. You might even end up with something completely off topic that has more value than loan or savings promotions. Plus, the excitement you generate in your brainstorming session will spill over to your entire staff. Try it. What have you got to lose?
Filed under: CUNA GAC, Current Issues in Credit Unions, Fraud Prevention, accounts, credit unions, new media, pictures, podcast, social media
On Monday, I left for Washington, not for the CUNA GAC, but to speak on behalf of the Maryland and DC Credit Union League. Yet, I could not keep away from the GAC. I have been to the GAC for about eight years straight but I missed it last year.
In any event, I met Guy Messick, Katherine Weber and their friend Vic at the Vidialia restaurant on Monday night. Guy and Katherine had been at the GAC since it began last week. It was wonderful to see them and Katherine is expecting next month. She told me that she plans on working at home after she has her new baby. She is very ambitious! While I was in Maryland, I stayed with my brother-in-law, Tom, as he lives between the two league locations. He is always very nice about putting me up.
On Tuesday I gave my first seminar on Fortifying Your Front Line (Credit Union Accounts and Fraud Prevention) from 9 to 4. I really enjoy speaking for the Maryland and DC Leagues because the audiences are always there to learn (and maybe have a little fun too).
Tuesday night, Tom and I went to the Capital City Brewing Company to meet Morris Partee (I love that guy’s name) Ginny Brady and other credit union folks who have an interest in social media.
Morris organized the event.
Ginny is scheduled to appear on Current Issues in Credit Unions later this year. It was very nice to talk to everyone. I chatted with Brent Dixon about this year’s Partnership Symposium. While I don’t think, at this point, that I can make it, I’m going to revisit my schedule to see if there is some way I can attend. A conference about my two favorite things in the world, credit unions and technology, is hard to pass up despite the schedule pain.
On Wednesday, I gave my final seminar. We worked through lunch and got everyone out by 3. It was another great group to teach.
My drive back was uneventful. Although driving down seemed like a great idea having been stuck at Dulles Airport in the past, somewhere in Pennsylvania around 8 in the evening I was wishing that I had flown. Still, what an intense 48 hours! It is sessions like this that make me feel that working with credit unions is the best job in the world.
This month, on CIiCU, Katherine Weber sits in for Guy Messick! Brian and Rob host as well and Palmer Williams joins as a guest host. Here are our topics:
–Identity theft: new developments
–FACTA from the CUSO Perspective (7:30)
–Brian’s heads up: Pitfalls with HSAs (14:10)
–New proposed rule on the Family and Medical Leave Act (23:15)
–Special incentives for employees: should the CEO get a company car? (31:10)
–Employee cellphone use policy: how tough should you be? (39:00)
–Update on the proposed VA CUSO Reg (43:50)
–Does your credit union have Associate Directors? Should it? (54:25)
The CIiCU hosts are:
Brian Witt
Member
Farleigh Witt, Attorneys at Law
121 SW Morrison Street, Suite 600
Portland, Oregon 97204
Telephone: 503-228-6044
Fax: 503-228-1741
http://www.farleighwitt.com
Guy Messick
Member
Messick & Weber P.C.
The Madison Building, 108 Chesley Drive
Media, Pennsylvania 19063-1712
Telephone: 610-891-9000
Fax: 610-891-9008
http://www.cusolaw.com
Faith Anderson
American Airlines Credit Union
P.O. Box 619001
MD 2100
DFW Airport, TX
75261-9001
(800) 533-0035
https://www.aacreditunion.org/default.asp
Robert Rutkowski
Shareholder
Weltman, Weinberg & Reis Co., L.P.A.
323 W. Lakeside Avenue, Suite 200
Cleveland, Ohio 44113
Telephone: 216-739-5004
Fax: 216-739-5642
http://thatcreditunionblog.com
http://www.weltman.com
Subcribe to the show via iTunes Music Store: http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=151785964&s=143441
