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CURRENT Newsletter

October 23, 2014

News and Information For and About Virginia's Credit Union System

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

News From Credit Unions

Chapter News

Community Involvement

Marketing/Brand News

Security/Fraud Prevention

Headline News

CU Days Are Coming Soon! Chapters, Set Your 'Day at the General Assembly'

The leaders of credit union chapters are busy now setting dates for when their groups will visit area lawmakers when the 2015 General Assembly convenes.

The session begins Jan. 14 and runs 45 days. To date, two chapters have reserved dates for their visits: Roanoke Valley on Jan. 20 and NoVA on Jan. 21.

Points to remember:

  • Chapters can choose the same date.
  • The League is planning on introducing one bill in 2015 that would allow credit unions to offer sweepstakes savings accounts.
  • As always, we ask that credit unions provide localized good news information to their lawmakers.
  • Chapters will be responsible for making the legislative appointments and assigning their advocates to particular lawmakers.
  • The League will provide packets for the lawmakers.
  • The League will provide lunch for the advocates.
  • Staff from the League or our lobbying firm of Hunton & Williams will sit in on visits to provide assistance as needed in the meetings.

We hope to see you for "CU Days at the General Assembly!" Questions can be directed to your League's Karin Sherbin at 800.768.3344, ext. 626 or ksherbin@vacul.org.

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NCUA Board Reaffirms: No NCUSIF Premium for 2014

The National Credit Union Administration Board reaffirmed today that there will be no National Credit Union Share Insurance Fund premium for 2014.  CUNA’s analysis earlier this year and previous indications from NCUA had already signaled a premium would not be needed. (Reported by CUNA Deputy General Counsel Mary Dunn.)  

News About Credit Unions

New OSCUI Website Will Allow CUs to Research Vendors, Service Providers

To assist small credit unions with researching credit union vendors and service providers, the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) will soon launch a service on its website. Called the CUSP (Credit Union Service Providers), the resource aims to save time and cost for small credit unions looking to expand or maintain their services. CUSP is currently open for vendor registration, and the website is expected to officially launch for credit unions in November. 

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Credit Unions Dominate Apple Pay List

On the launch day of Apple Pay, NCUA Vice Chairman Rick Metsger said the majority of financial institutions involved with the technology are credit unions.

“An initial list of financial institutions signed-up for Apple Pay on its launch day reveals that more than two-thirds are credit unions,” Metsger said in a keynote address to the American Institute of CPAs’ annual conference on credit unions in Denver Monday. “This demonstrates that America’s credit unions are ready, willing and able to meet the needs of American consumers for secure mobile payment systems,” he added. Apple Pay, Apple’s new mobile payment system that rolled out Monday, is only available on the new iPhone 6 and 6 plus as well as the iPad Air 2 and iPad Mini 3.

[READ MORE]

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CUNA Council Members Can Participate in Free Webinar on Apple Pay

On Oct. 29, Best Innovation Group's CEO John Best will share the latest information on Apple Pay -- from its components and historical model equivalents to discussions on Token Service Providers, Card On File and online merchants. This 2 p.m. webinar is endorsed by the CUNA Councils and is free to all CUNA Council members.

[LEARN MORE & REGISTER]

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Compliance/Regulatory Affairs News

CFPB Issues Final Points and Fees Error Resolution Rule

Mortgage lenders will have 210 days to fix errors in their calculations of points and fees and reimburse borrowers for any overages under a final rule issued by the Consumer Financial Protection Bureau.

CFPB originally proposed a 120-day period to correct and remedy charges that exceed the 3% points-and-fees cap under the qualified mortgage rule. However, the agency concluded a longer review period will give lenders an incentive to do post-closing audits to detect any errors.

[READ MORE]

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What the Final QRM Rule Means for FIs

The final risk retention rule may appeal to financial institutions more than regulators' original proposal, but a comeback for the private-label securitization market still faces enormous obstacles.

The agencies, to the industry's delight, will not include a down payment requirement in criteria for being exempted from risk retention, though they will review the impact of the rule every four years. That is in stark contrast to their original 2011 plan to limit the exemption to borrowers who put down 20%.

But despite the lighter approach, several analysts say the rule will likely have little impact on jumpstarting the private-label market since the secondary market is still dominated by Fannie Mae and Freddie Mac, and the new regulation effectively frees the government-sponsored enterprises from doing any risk retention.

(American Banker Online, Oct. 22)

Other coverage on the QRM rule:

The reviews are coming in on the final QRM rule and reaction is mixed. Financial services trade groups indicated they could live with the new rule, which doesn't require a down payment in its criteria for being exempted from risk retention. Former FDIC Chairman Sheila Bair, however, described the final version of the risk retention rule as "unfortunate" because "if the loan goes bad, you have much bigger losses with 0% down than 20% down."

Others worried that the rule will permanently ensure the federal government's role in the housing market. "It's certainly possible that this is only the beginning of government pressure to make loans with lower lending standards," American Enterprise Institute fellow Alex Pollock told the Journal. The "Heard on the Street" column in the Journal agrees with the naysayers, equating the new rule to the thinking of disgraced former Countrywide Financial honcho Angelo Mozilo, who declared down payments "nonsense."

"The new rule isn't just a small step back for mortgages, it is a giant leap backward for the financial system," John Carney writes in "Heard on the Street." (American Banker Online, Oct. 22)

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Governmental Affairs News

GSE CEOs Not Waiting on Congress to Make Reforms

While Fannie Mae and Freddie Mac wait for Congress to decide when and how to act on housing industry legislation, the government-sponsored enterprises are working with their regulator on "nonlegislative GSE reform" that will better prepare them to implement new laws.

"Nonlegislative GSE reform has been going on for several years, and continues going on today," said Freddie Mac CEO Donald Layton.

The goal of these efforts is to position Fannie and Freddie to respond to an inevitable change to the role of the secondary market giants, whatever that entails.

Such efforts are guided by the Federal Housing Finance Agency, and Layton said the annual GSE scorecards the regulator publishes are "the blueprint and manifesto of nonlegislative GSE reform."

Other GSE efforts include a renewed focus on customer service and support for small lenders, the CEOs of both Fannie and Freddie said during a joint presentation Monday at the Mortgage Bankers Association's Annual Convention.

The GSEs are leveraging technologies developed through recent loan and data quality initiatives to "facilitate the building of more systems and tools that will allow us to deliver risk management capabilities to the lenders," said Fannie Mae CEO Timothy Mayopoulos.

For example, Fannie Mae announced a new appraisal review tool for lenders to check data points before the appraisal is submitted. And Freddie Mac has added services like targeted community lender training and other resources for rural lenders.

[READ MORE]

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Financial Services/Marketplace News

The Clearing House to Build Real-Time Payments System

The movement to develop a faster U.S. payment system has a new, influential convert.

The Clearing House, a payments company and trade group representing 24 of the nation's largest commercial banks, announced Wednesday plans to build a real-time payment system to be used by all of the country's financial institutions. The effort will be a "multi-year endeavor," according to the group's press release.

"The only way a system like this will be successful is if it's ubiquitous and not just a small set of banks," Clearing House president and chief executive Jim Aramanda said. "So it's going to take a while — there are a lot of constituents involved."

The announcement comes in the midst of a broader push to improve the nation's payment system. The Federal Reserve is expected to lay out a multi-year road map for achieving a near real-time system in a paper to be published before the end of the year.

And Nacha, an industry trade group that sets the rules for the automated clearing house network, is working on an initiative that would allow ACH transactions to clear on the same day they're initiated, rather than a day later.

[READ MORE]

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Mortgage Applications in U.S. Jump 11.6% as Refinancing Surges

Mortgage applications in the U.S. soared last week as a plunge in borrowing costs led to biggest gain in home refinancing since January 2012. The Mortgage Bankers Association’s index rose 11.6 percent in the period ended Oct. 17, the biggest gain since January, after a 5.6 percent advance the week before, figures from the Washington-based group showed this week.

The refinancing gauge jumped 23.3 percent while the purchase applications measure dropped 4.6 percent. The average rate on a 30-year fixed loan declined for a fourth week to 4.10 percent, the lowest since May 2013. (Bloomberg News, Oct. 22)

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Middle-Class Adults Have $20K Saved for Retirement

Middle-class people in the USA have a median of $20,000 saved for retirement, far short of the $250,000 they think they'll need during that time of their lives, a new survey shows.

A third (34%) of working middle-class adults aren't contributing anything to a 401(k), IRA or other retirement savings plan, according to the survey of 1,001 adults, ages 25 to 75, with a median household income of $63,000. The survey was conducted by Harris Poll for Wells Fargo (WFC).

[READ MORE]

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News From Credit Unions

1st Advantage Spends Holiday Helping Local Non-Profits

1st Advantage FCU held its 7th Annual 1st A.I.D.E. Day on Oct. 13. While most financial institutions were closed for the Columbus Day holiday, 1st Advantage colleagues were hard at work assisting local non-profit organizations. 

[READ MORE]

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Langley Federal Credit Union Donates $5,000 to Support The Center for Child & Family Services

Langley Federal Credit Union presented a check in the amount of $5,000 to the Center for Child & Family Services, Inc. for support of their many programs that help individuals and families to improve their lives. Programs range from Mental Health and Child Abuse Counseling, Family Counseling, Financial Education, Child Care Training and Consultation, Domestic Violence and Youth Violence Prevention.

[READ MORE]

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Langley Federal Credit Union Donates $5,000 to Support Big Brothers Big Sisters

Langley Federal Credit Union presented a check in the amount of $5,000 to Big Brothers Big Sisters of the Greater Virginia Peninsula for support of their one-on-one mentoring program that serves at-risk youth ages 6-18 from Williamsburg to Hampton.

[READ MORE]

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Langley Federal Credit Union Opens First Virginia Beach Location

Langley Federal Credit Union will open its first Virginia Beach location in early 2015. The Hilltop Branch will be located at 741 First Colonial Road, Suite 101 in Virginia Beach, at the Hilltop Market Place Shopping Center at the corner of Laskin Road and First Colonial Road.

[READ MORE]

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16,000 Pounds Shred at Belvoir Federal’s Annual Community ShredFest

On Oct. 18, Belvoir Federal Credit Union hosted their Annual Community ShredFest event at the Woodbridge Branch. This free, two-hour community event was open to members and non-members. The 2014 ShredFest event was well attended and helped those in the community securely shred nearly 16,000 pounds of paper.

[READ MORE]

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CommonWealth One Using Quarterly Videos By CEO for Member Education

To enhance member education efforts, Charlotte Cash, president/CEO of CommonWealth One Federal Credit Union, is engaging members by producing quarterly videos on various subjects of financial interest to members. “When I first came to CommonWealth One, I learned right away that the credit union’s success was based on a top level commitment to member service and member education,” CEO Charlotte Cash said.

[READ MORE]

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Justice Federal Credit Union Offers High-Yield Certificate Nearly Three Times Greater Than the National Average

Justice Federal Credit Union is offering simple terms and strong returns on new money certificates with a 36-month term. New and existing members can earn an annual percentage yield of 1.50%, nearly three times the national average (0.51% APY as reported by Bankrate.com). Members may select their certificate of choice - Share, Traditional or Roth IRA with a minimum new money deposit of $500, and no maximum deposit. 

[READ MORE]

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Northwest FCU's Winky Burks Inducted into CUES Hall of Fame

Gerrianne "Winky" Burks, former president/CEO of Northwest Federal Credit Union, is being inducted into the CUES Hall of Fame in recognition of her lifetime of achievement and dedication to the credit union movement. She will be honored at CUES' CEO/Executive Team Network event next month.

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Chapter News

CUNA President Jim Nussle to Speak at NoVA Chapter’s Nov. 13 Meeting

CUNA President/CEO Jim Nussle will be the guest speaker at the NoVA Chapter’s Nov. 13 meeting. New to the post at CUNA, Nussle is a former member of Congress. Location: Clyde’s Restaurant (Tysons Corner, Vienna). Time: 5:30 p.m. networking; 6 p.m. meeting, with dinner to follow.

[LEARN MORE]

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Tidewater Chapter Sets Nov. 13 Meeting

Motivational speaker Harold Wood will be the featured guest speaker at the Tidewater Chapter's Nov. 13 meeting. Location: Greenbrier Country Club (Chesapeake). Time: 6 p.m. social. It’s also our annual Toys For Tots night, so please bring along a new, unwrapped toy!

[LEARN MORE]

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Community Involvement

Special Pricing for Credit Union Members for Halloween Haunt at Kings Dominion

Our friends at Kings Dominion just hooked up credit union members with special pricing Oct. 24-Nov. 2 on a Halloween Haunt package with admission to the theme park. Buy the two pack of tickets for $29.99 each vs. regular pricing of $35 each.

To get the deal, point your browser to www.kingsdominion.com/affiliates and enter the following in both the username and password fields: KDVACUL. Remember, a $1 from each ticket sold will go to Children's Miracle Network Hospitals.

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Marketing/Brand News

How Apple Pay Threatens Retailer, FI Brands

Apple Pay is a watershed moment that will do more to stimulate mobile commerce than the sum of all previous efforts. But it also has an impact on branding that should make it part of a broader mobile menu for financial institutions and retailers.

Apple Pay is a recipe that has been served before. Remember Quicken from 1996 to 1998?

Back then, Intuit offered participating financial institutions the opportunity to connect with their consumers online through Intuit’s popular platform, for a seven-figure price. 

FIs willingly paid these dollars (and welcomed the media buzz) to raise awareness and find early adopters while they developed their own Internet banking capabilities.

Shortly thereafter, once these same FIs realized how much the Quicken user experience subordinated their brands and commoditized their services, they rapidly devolved their relationships with Intuit and steered consumers to their own proprietary Internet banking services.

Apple Pay could be a recipe for mutual, long-term success if the model was based on a commitment to real partnership enabling each bank and retailer to create unique experiences for their customers on a shared platform. But that is not what Tim Cook showed us.

Instead, what we saw was a "fast food" payment service that pushed the payment function into the background of a standardized consumer experience while exacting a piece of interchange from issuers. If financial institutions or retailers don't have their own branded mobile alternative on soon, Apple Pay stands to insert its brand in front of up to 40% of the consumers 30 to 50 times each month, reducing the financial institution or retailer's brand to just another name on a list. (American Banker Online, Oct. 22)

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Bank Disgust Not Only Factor Driving CU Millennial Membership: Inc.

It might be easy to state that millennials don't like big banks, Vince Passione, columnist for Inc. magazine wrote in a recent article, given that polls show a handful of the largest U.S. banks consistently rank at the top of the generation's most-hated brands. 
But it's not only animosity that's driving millennials toward credit unions and away from banks. 

Credit unions, explains Passione, CEO/founder of LendKey, a cloud-based technology platform for lenders and investors, have evolved into the types of tech-savvy and versatile financial institutions that appeal to millennials.

[READ MORE]
[RELATED: Bankers Confronted by Wide Millennial-Generation Gap]

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Credit Unions Need a Convenience Strategy

Credit unions don’t need a digital strategy, they need a convenience strategy. That was the message from Erik Vandermause, VP of TruStage Innovation and Channels at CUNA Mutual Group, during his session Tuesday at the California and Nevada Credit Union Leagues’ annual meeting and convention.

“Today’s consumers prefer products and services that allow them to feel more in control of their time,” Vandermause said. However, he was quick to point out that convenience doesn’t always mean digital. This explains why, as mobile continues to explode, the number of credit union branches also continues to rise. “If you give people their time back, you’ll do well,” Vandermause concluded.

[READ MORE]

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Security/Fraud Prevention

At Least 46% of Merchants Ready for EMV

Industry experts have forecasted that more than 46% of U.S. merchant terminals will be enabled for EMV chip technology by the end of 2015.

That’s according to the Payments Security Task Force, a group that formed in March 2014 to continue the momentum of EMV chip implementation.

The estimates are based on forecasts provided by participating acquirers such as First Data, Bank of America Merchant Services and Wells Fargo, which represent approximately 80% of U.S. purchase volume, PST said.
[RELATED: Johnson, Crapo Want Regulators' Accounting of Cybersecurity Actions]

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