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CURRENT Newsletter

September 25, 2014

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Chapter News

Marketing News

News About The Competition

Headline News

Cybersecurity Sessions at Compliance Conference: Must-Attend Event for Compliance, CEOs, IT and Operations Staffers

Cybersecurity is a focal point for NCUA's examiners, so your League is offering special sessions on Day 2 of this year's Compliance Conference to help you prepare. In fact, these sessions are ideal not only for compliance staff, who'll benefit from understanding NCUA's expectations, but also for CEOs, IT professionals and operations executives, owed to the safety and security issues surrounding cybersecurity.

Two leading experts on credit union cybersecurity issues, attorney Bruce Jolly and NCUA Deputy Director Timothy Segerson, will provide their unique insights into key issues for credit unions, including:

  • Development of a cybersecurity response plan. Despite the rise in breaches, 27% of companies didn’t have a data breach response plan or team in place when they were hit.
  • Cloud Computing and the safety of data stored in the cloud;
  • Authentication techniques used to validate a member’s online banking session;
  • Spear-phishing from "Your CU Executives" to IT and Operations personnel;
  • SMS interceptions (which are on the rise);
  • Protecting data on phones, tablets, etc. owned by the credit union, obviously important should they become lost or stolen!
  • Ensuring your credit union isn't used as a gateway for criminals to gain access to your payments system or vendors.   
  • Importance of ongoing education for all employees;
  • Implementing appropriate vendor due diligence, patch management and network monitoring.

[Learn more and register here]

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Virginia Credit Union League Begins Construction of Richmond Headquarters

The Virginia Credit Union League proudly announces the start of a $2.6 million renovation project for its future headquarters in downtown Richmond. Richmond City Mayor Dwight C. Jones joined members of the League’s Board of Directors, representing credit unions from across the state, at a Sept. 17 ceremony to mark the start of the project, which is expected to be completed in May 2015.

[READ MORE]

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Young CU Professionals Invited to Networking Event in Richmond

WHEN: Wednesday, Oct. 29
5:30 p.m.-7 p.m.
WHERE: Sine Irish Pub and Restaurant | 1327 E Cary Street, Richmond

Join us for networking and happy hour (adult beverages, free appetizers, games, and prize drawings) with Virginia's outstanding young credit union professionals (ages 35 and younger). You are encouraged to come dressed for the occasion in your scariest Halloween costume!

RSVP by Oct. 21! Contact Young Professionals Network League Liaison Bethany Scott at bscott@vacul.org or 800.768.3344, ext. 628 for details.

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News About Credit Unions

Two CUs File Suit Against Home Depot

Two Northeastern credit unions have filed a pair of lawsuits against Home Depot, alleging that financial institutions nationwide have suffered millions of dollars in damages as a result of the data breach that befell the home improvement retail chain recently. 
The suits, likely headed for class action status that would include both banks and credit unions, both claim that personal payment data from an estimated 56 million consumers were compromised and accessible to cybercriminals for more than five months before Home Depot learned of the incident. 
One of the suits further alleges that Home Depot knew about the data breach for a week before it publicly announced the incident had occurred.

[READ MORE]

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Compliance/Regulatory Affairs News

NCUA's McWatters Won't Vote For RBC Without Second Comment Period

New National Credit Union Administration Board Member J. Mark McWatters believes a second comment period is needed on the regulator's proposed risk-based capital rule and he will not vote for any RBC proposal that does not include a second comment period.

That news, confirmed Friday by Credit Union Journal, was broken this morning in a "News Now" report from CUNA that McWatters told CUNA Interim President and CEO Bill Hampel and other senior CUNA officials last Thursday that he is in favor of a second comment period before the rule is finalized.

Hampel — along with CUNA General Counsel Eric Richard and Deputy General Counsel Mary Dunn — met with the new board member following McWatters' first NCUA Board meeting. Hampel told Credit Union Journal last week that after going over the issues CUNA has previously raised with the regulator, the topic of a second RBC comment period was raised.

"He said he agreed and said he would in fact not vote for the proposal if it were not reissued for comment," Hampel told Credit Union Journal. "I think his view was driven by the amount of feedback that the proposal has received in the form of comment letters." (Credit Union Journal, Sept. 19)

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Governmental Affairs News

100% for VACUPAC

A special thanks to WJC Federal Credit Union for having reached 100% participation from its volunteer officials in the Virginia Credit Union Political Action Committee (VACUPAC). All of the credit union's volunteer officials contributed at the pin level (at least $25).

And kudos to the credit unions of the Hampton Roads Chapter for reaching their 2014 VACUPAC fundraising goal! Well done! Your contributions to VACUPAC aid us in building relationships with lawmakers and political candidates at the state and federal levels.

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CUNA Opens Registration for 2015 GAC

Registration is now open for the Credit Union National Association's 2015 Governmental Affairs Conference (GAC), set for March 8-12 at the Washington Convention Center in Washington, D.C. 
  
CUNA's GAC is the credit union movement's largest conference, bringing more than 4,000 credit union executives and board members to advocate for credit unions in the nation's capital. 
  
In addition to political advocacy, the GAC offers attendees networking opportunities, keynote speakers, industry-focused breakout sessions and the largest financial services exhibitor showcase.

[READ MORE]

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Financial Services/Marketplace News

Auto Version of the 'Eviction Notice' Gains in Popularity

Auto lenders may finally have their own version of the eviction notice. The industry is in the early stages of adopting so-called starter interrupter devices, which allow lenders to disable the ignition of cars on which payments are late using a mobile app.

The app also lets lenders track the location of its cars, and is designed to be used to monitor primarily subprime borrowers. The CEO of First Castle Federal Credit Union in Covington, La., told the Times he once disabled a delinquent borrower's vehicle while the CEO was shopping inside Wal-Mart.

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Apple Pay Will ‘Chew Into’ Interchange Revenue

Apple Pay commands the attention of credit union executives, as evidenced by an overflow crowd at an impromptu breakout discussion about the potentially disruptive payments strategy at the joint CUNA Technology/Operations, Sales, and Service Council Conference in Las Vegas.

Three weeks after Apple’s announcement about the new product, credit union executives sought to clarify the potential impact of the new technology.

While many opportunities and challenges exist—and there are more questions than answers - the reality that Apple Pay transactions will chew into an already tenuous interchange revenue model makes most credit unions uneasy, says John Best, president of Best Innovation Group (BIG).

Apple Pay will take an “interchange shave” of 15%, along with additional fees levied by Visa and MasterCard, a variety of presenters confirmed. That represents a significant dent in credit unions’ already declining interchange revenue.

“When I started looking at the numbers, your nontaxable interchange shrinks to next to nothing if not negative,” says Leah Work, business development manager, products and technology, CO-OP Financial Services. “It’s not looking good.”

Also notable: Apple has partnered with the six largest card issuers in the U.S., which represent 83% of credit card purchase volume, and a host of major retailers who will provide point-of-sale terminals.

“iTunes has 800 million accounts, and we always wondered when Apple was going to use that information,” says Caroline Willard, executive vice president of markets and strategy, CO-OP Financial Services. “Here it is. Voila!”

[READ MORE]

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Four ‘Must Haves’ for Mobile Pay Technology

If you want to know what the future holds for mobile payments, think “wearable payments technologies,” Brian Scott, vice president for The Members Group (TMG), told attendees at The Money Event recently.

But regardless of how the mobile payments scene shakes out, Scott says there are four essential qualities of a desirable mobile payment application:

• Ubiquitous. Consumers will adopt mobile pay tools that allow them to pay anyone or any merchant regardless of the device.

• Easy. Only if an application is easier than swiping a card or scanning a barcode can a solution truly deliver value.

• Rewarding. If consumers don’t get “something else” out of it, they’ll have a hard time abandoning their traditional rewards cards.

• Secure. With payment data in high black-market demand, consumers are nervous about moving money through any application they don’t trust.

“Security has become table stakes for any new technology that deals in personal or financial data,” Scott says. “Consumers are becoming increasingly leery of sharing their information, financial or otherwise.”

[READ MORE]

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Millennials and Money: They Spend, Save Much Differently

There is a growing gap between the generations, between millennials and their parents.

It's not just in how they talk, text and tweet, but in how they spend, save and secure money.

America's rising generation is finding it harder to buy a car, finance a house, even secure a lease without a guarantor.

In many cases, research supports, it's because millennials are consciously steering away from the conventional financial models and institutions their parents and grandparents took for granted.

[READ MORE]

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U.S. Credit Card Debt Set To Reach Pre-Recession Levels

U.S. consumers racked up credit-card debt in Q2 twice as fast as at any time since the recession — and credit-card charge-off rates appear to be headed up too, according to new data from the Federal Reserve and FDIC included in a report by CardHub.

That puts U.S. credit-card debt on track for its biggest gain since the recession, and means consumers are predicted to end the year with $54.8 billion more in credit-card debt than they started with, or almost $900 billion. Consumers are also expected to default on $30.35 billion in credit-card debt in 2014, CardHub analysts said.

The big Q2 run-up follows a big pay-down that has become a regular pattern for the past few years.

[READ MORE]

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Education & Networking Opportunities

CEO Forum Slated for Oct. 21-23

Small credit unions face a daunting financial services marketplace, with challenging regulatory burdens, shrinking margins,  precious few marketing dollars, changes in member demands, fierce competition, and so much more! This year's CEO Forum is designed to provide you with ideas and tactics to help you overcome these challenges, and not just survive, but thrive! 

Join us at the beautiful, brand new Hilton Garden Inn, Virginia Beach Oceanfront. Take time to step away from the day-to-day responsibilities, challenge yourself to think in new ways, network with peers, and return to your credit union armed with new ideas!

Dates: Oct. 21-23
Location: Hilton Garden Inn Oceanfront Virginia Beach
Note: This conference is designed for CEOs of credit unions with less than $75 million in assets.

 [LEARN MORE & REGISTER]

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News From Credit Unions

BayPort Opens Four Student-Run Credit Union Branches

BayPort Credit Union went beyond traditional teen banking when it opened four student-run branches in Peninsula high schools this year.

When classes resumed for the school year, BayPort counters staffed by students in York, Heritage, Kecoughtan and Warhill high schools opened for business.

"I think it's good for everybody in this school to learn about saving money in this stage of life — before college," said teller Anna Fisher, a 16-year-old York High junior.

"You're going to have to deal with money for the rest of your life," added teller Spencer Bacon, a 17-year-old York senior. "Might as well start early."

[READ MORE]

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Virginia Credit Union Strikes Out Hunger with Richmond Flying Squirrels

Virginia Credit Union has contributed $5,015 to FeedMore, through the Strike Out Hunger program during the Richmond Flying Squirrels 2014 baseball season. Throughout the 2014 Richmond Flying Squirrels’ season, which ended Sept. 12, VACU raised attention for FeedMore and made a $5 donation for every strikeout thrown.

At the conclusion of the Richmond Flying Squirrels’ season, Richmond pitchers had racked up 1,003 strikeouts.

[READ MORE]

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Filene Welcomes Belvoir Federal's CMO to Prestigious i3 Innovation Program

Filene Research Institute welcomes Belvoir Federal’s Chief Marketing Officer (CMO) Jason Lindstrom to its i3 innovation program, which fosters the development of new ideas and innovations for credit unions. Jason, who will serve a two-year term, joins 19 other executives from credit unions and credit union service organizations across the United States and Canada.

The 2014 i3 program will begin at Filene’s big. bright. minds. event in November of this year.

[READ MORE]

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DCCU Welcomes New Mortgage Advisor Tina Coffey

DuPont Community Credit Union (DCCU) is pleased to announce the addition of Tina Coffey to DCCU’s mortgage team. Ms. Coffey holds the position of Mortgage Advisor and serves Waynesboro and the Augusta County area from DCCU’s Lucy Lane office.

[READ MORE]

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Chapter News

NoVA Chapter Sets Oct. 9 Legislator Appreciation Night

The Northern Virginia Chapter of the Virginia Credit Union League cordially invites you to the Chapter's Legislator Appreciation Night on Oct. 9. Join us as we salute our lawmakers for their service and educate them about the Credit Union Difference.

TIME: 5:30 p.m. to 8 p.m.

LOCATION: Fairview Park Marriott
3111 Fairview Park Drive, Falls Church, 22042

CHARITY FOCUS: Children’s Books for Local Children

There is no charge for this event.

Please RSVP by Monday, Oct. 6 to Shannon Tackett at stackett@belvoirfcu.org or call 703.730.1800 ext. 5155.

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Tidewater Chapter to Host Lawmakers at Oct. 9 Meeting

Join the Tidewater Chapter on Oct. 9 as we honor our lawmakers and share the "Credit Union Difference."

LOCATION: Greenbrier Country Club
1301 Volvo Parkway
Chesapeake, 23320

TIME: 6 p.m. social; 6:30 p.m. dinner and meeting

Cost: $35 per person if registration is received by Oct. 1; $40 per person thereafter. 
Make your reservations early! To RSVP contact Ginnie Riddle by email at VRiddle@bayportcu.org or by phone at 757.873.4047.

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Marketing News

Using Mobile Gaming to Score Points with Card Users

The Bank of Hawaii has launched a playful app to market its credit card program as financial institutions nationwide seek to take advantage of consumers' growing appetite for credit.

The game, SimpliSavvy, launched this month as a way to draw smartphone users' attention to perks associated with the Bank of Hawaii's two-year-old credit card program, MyBankoh. The bank, of course, hopes the app will make its brand top of mind with consumers who are more familiar with, say, Capital One, and who are less likely to come into one of its branches.

Its ambitions are serious, but bank officials joked about how they are trying to keep things in perspective.

"We don't expect to be Candy Crush," said Tony DeSanctis, Bank of Hawaii's senior vice president and credit card manager. (American Banker Online, Sept. 23)

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News About The Competition

Small Banks Hesitant to Make Waves: Fed Survey

Economic and regulatory forces have put a large percentage of community banks in a holding pattern, according to a new survey.

Smaller institutions are still trying to adapt to the slowly recovering economy, new government rules and other business challenges, according to the survey issued Wednesday by the Federal Reserve Board and the Conference of State Bank Supervisors.

As a result, a large number of banks have no plans to add new products in coming years. The risks of expanding technology products often overshadow the need to do so in their eyes. And while more banks are mulling mergers, the industry has yet to see a meaningful increase in activity.

Banks gave no clear indication when the limbo period will end.

The study also found that two-thirds of respondents had no plans to make non-qualified mortgages, or would only do so under special circumstances.

"Low- and moderate-income customers are negatively impacted," said Timothy Zimmerman, president and chief executive of Standard Bank, Monroeville, Pa., who also chairs the Consumer Financial Protection Bureau's community bank advisory council. "They aren't bad borrowers but now they probably can't get credit." (American Banker Online, Sept. 24)

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