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CURRENT Newsletter

January 29, 2015

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Headline News

Thanks for Making CU Day Events a Success!

Yesterday, the Central Virginia Chapter wrapped up our series of CU Day events at the General Assembly for the 2015 session, with representatives from CommonWealth One Federal Credit Union, DuPont Community Credit Union and UVA Community Credit Union participating.

"Our thanks to the 125 credit union advocates representing 35 credit unions who did an excellent job of serving as champions for our cause in visits to Richmond during the past two weeks," said League President Rick Pillow. "These efforts make a difference because lawmakers see credit unions as an active, engaged constituency."

Rick notes that the 2015 session has been a good one for Virginia's credit unions, with our two bills sailing through the legislative process. Crossover day now represents our last major hurdle. The Feb. 11 crossover day marks the period when the House and Senate will take up bills passed by the other chamber. We don't foresee issues with our legislation, but the League monitors the General Assembly until the final gavel falls.

This year, the League had two bills introduced on behalf of our credit unions - a bill to allow prize-linked savings programs (SB737 in the Senate and HB1487 in the House) and a parity bill to eliminate the need for state-chartered institutions to seek permission from the state Bureau of Financial Institutions to place or relocate ATMs (SB 875 and HB 1629).

Prize-linked savings programs provide an incentive to turn saving money into a habit. The programs offer prizes, including cash, to program participants who meet goals to save money.

They are particularly effective at encouraging savings for individuals that might not otherwise save money for an emergency or a major purchase, including the underbanked. Ten states currently allow such programs.

Participants' funds would be in federally insured accounts and they would not risk any of the money they've deposited and saved.

Our ATM legislation is a parity bill for state-chartered credit unions and banks. The League asked that the measure be introduced and state-chartered banks have since joined credit unions on the legislation. Federally chartered institutions are not required to seek regulatory approval in placing or removing ATMs.

"We view this bill as elimination of red tape for state-chartered credit unions, which could have found themselves at a competitive disadvantage in placing ATMs in prime locations," said League President Rick Pillow.

Your League continues to monitor almost two dozen other bills of interest to credit unions. See them here. You must be logged into the League website to view this information. Register here if you need a password.

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Candidates Sought for League Board Seats

The Governance Committee of the Virginia Credit Union League seeks your recommendations for candidates to be nominated for election to the Board of Directors. In 2015, four board seats are open.

[MORE HERE

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League Board Seeks Nominees for Kirsch, Farley Awards

The League Board is seeking your recommendations for prospective candidates for our annual awards. The Virginia Credit Union League Board will name the winners of the 2015 James P. Kirsch Lifetime Achievement Award and the Eugene H. Farley Award of Excellence at the annual meeting in Roanoke on April 16-17, 2015. 

[LEARN MORE]

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Credit Unions Care Foundation Hosting April 15 Charity Golf Tournament

The Credit Unions Care Foundation of Virginia will host its annual charity golf tournament on April 15! Register to play and sponsor the tournament, which supports the good work of Virginia-based credit unions' charitable foundation. 
Learn more here about sponsorships
Register to play.

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Visa Changes to BIN Licensing Program Will Affect Small Issuers; Plan Now to Address This Issue

Visa has announced changes to it BIN Licensing Program that may impact small credit union issuers who may not meet the new transaction standard, as well as potentially affecting CUs with new Business BINS, start-up programs, etc...  

Your League's David Deacon (800.768.3344, ext. 634 or ddeacon@vacul.org) is working to identify the Virginia-based CUs that could be affected by this change.

There are strategies these credit union could employ to either consolidate BINS, increase current usage and/or attract new cardholders. We're anxious to help these credit unions.

Click the link below or contact David to learn more.

[LEARN MORE]

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News About Credit Unions

Legal Battles Only Beginning After Key Rescission Ruling

Strange as it might sound, a recent high court decision allowing borrowers to skip courts when filing rescission actions may lead to more lawsuits, not fewer.

Although the decision makes it easier for borrowers to avoid litigation, it still allows banks to challenge an attempt through litigation. And because rescission attempts are expected to increase due to the lower bar to begin the process, lawyers said banks will increasingly turn more to the courts.

"The Supreme Court's decision is going to shift the burden on lenders to initiate a lawsuit," said Robert Lotstein, managing attorney of LotsteinLegal PLLC.

Before the decision, federal courts in many sections of the country expected homeowners to initiate a lawsuit to seek rescission. Under the Truth in Lending Act, consumers have three days after a refinancing or home equity line of credit closing to rescind and stop the transaction for any reason. There is another three-year window to rescind if the lender's mortgage disclosures are deemed inadequate.

But in the Jan. 13 decision in Jesinoski v. Countrywide Home Loans, the high court said borrowers can simply notify a lender by letter to exercise their rescission rights during the three-year period. The justices unanimously rejected the premise that borrowers must file a lawsuit.

Observers said the outcome of the case will result in more rescission attempts. Lotstein said the ruling will enable borrowers to slow down the foreclosure process. He noted that even the invalid notices, which banks can challenge before a judge, can be costly because servicers still might have to increase their reserves to cover the risk of a rescission. (American Banker, Jan. 28)

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Compliance/Regulatory Affairs News

April 27 is RBC2 comment deadline

The comment deadline is April 27 for the revised risk-based capital plan proposed Jan. 15 by the National Credit Union Administration.

[READ MORE]

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Governmental Affairs News

Four Takeaways from Watt's Grueling Return to Capitol Hill

Federal Housing Finance Agency Director Melvin Watt didn't receive quite the homecoming he may have hoped for when he appeared before the House Financial Services Committee on Tuesday.

Though they at times joked with their former colleague, GOP lawmakers hammered Watt.

Below are four crucial takeaways from his lengthy appearance before Congress.

The GOP is clearly frustrated with the 3% downpayment plan
Republican lawmakers were perhaps toughest on Watt's recent decision to reduce downpayment requirements for government-sponsored enterprise-backed loans to 3% from 5%, which they

Republicans are also angry about the housing trust funds
Watt faced more pushback from Republicans for his decision last month to turn on GSE contributions to the Housing Trust Fund and the Capital Magnet Fund. The two trust funds were established by a 2008 housing law, but never funded because Fannie and Freddie were quickly put into conservatorship after the law was enacted.

GOP lawmakers argued that the decision to divert some GSE profits to the housing trust funds violates language in the 2008 law.

Lawmakers from both parties dislike FHFA's proposal regarding the Home Loan Banks
Several lawmakers also voiced concerns about a controversial FHFA plan that would impose ongoing membership requirements on institutions that belong to the Federal Home Loan Bank System.

The proposal would require banks and credit unions with less than $1 billion in assets to hold at least 1% of their assets as mortgages, and bigger institutions to hold at least 10% of their assets as mortgages to remain in the system. (Your League opposes this change. Read our letter to the FHFA here.)

FHFA has yet to make a decision on G-fees or principal reductions
Watt reiterated earlier comments that he hopes the agency will announce a decision on mortgage guarantee fees by the end of March, though he warned that it "may slip" later into the spring.

The mortgage industry has long been awaiting a response from Watt on the issue of G-fees, after the FHFA director postponed an earlier decision to increase the fees under DeMarco. (American Banker Online, Jan. 28)

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Financial Services/Marketplace News

Mortgage App Surge Levels off as Rates Ebb

The law of physics prevailed last week and mortgage applications, riding high for the previous two weeks, returned to earth. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of loan applications volume, was 3.2 percent lower during the week ended Jan. 23 than it had been a week earlier. On an unadjusted basis the index was down 12 percent.

It was another week in which seasonally adjusted numbers were tweaked to account for a holiday, but the data was still an abrupt departure from the two full weeks that kicked off 2015. 

During the week ended January 16 the seasonally adjusted index rose 14.2 percent on top of an increase of 46.7 percent the week before. The unadjusted indices had been up even more dramatically, withincreases of 17 percent and 119 percent respectively.

Applications for refinancing had been especially strong during the previous two weeks but those too fell, dragging the Refinance Index down by 5 percent while the share of applications that were for refinancing decreased from 74 percent to 72 percent. 

[READ MORE]

[Related: Mortgage Loan Rates Ticked Higher Last Week]

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Free FICO Credit Scores: Options Grow for Consumers

It used to be that your credit score was a well-guarded secret, available only to lenders and banks, which used it to evaluate whether you were likely to pay back a loan. If you wanted to see your score, you typically had to buy it.

But this year, it seems, options are mushrooming for consumers to obtain a free FICO score, the widely used credit score created by the Fair Isaac Corporation. FICO says its scores are used in 90 percent of credit decisions in the United States.

Why the increase in availability? Nudging from federal consumer finance officials, combined with an “open access” program that FICO created in 2013, have pushed lenders to offer free scores to consumers who use their credit cards or who borrow money to finance cars or student loans.

[READ MORE]

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News From Credit Unions

Retired CEO of ABNB FCU, Former League Chairman Bob Morgan Passes Away

Robert “Bob” Morgan, former President/CEO and Board of Director Member of ABNB Federal Credit Union, passed away on Christmas Day. 

Morgan served as ABNB’s President/CEO from 1974-2002, and from 1994-2006 he served as the Treasurer Board of Directors, and was also a member of the Asset and Liability Management, Personnel, and Building Facilities Committees.

Morgan was an active force in the credit union system, serving on various credit union councils for many years. From 1991-2002, he served on the Virginia Credit Union League’s Board of Directors, including service as League chairman. 

[READ MORE]

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ABNB Donates to Two Local Non-Profits for the Holidays

Throughout the holiday season, ABNB supported fundraising efforts to benefit two local non-profit organizations. A coat drive was held to support The Salvation Army’s Hampton Roads chapter and monetary donations were collected to support The Edmarc Hospice for Children.

In addition, ABNB employees adopted stuffed teddy bears, dressed them, and donated them to the Edmarc families.

During the months of October through December, ABNB employees and members donated more than 250 coats for The Salvation Army, to be distributed to those in need throughout Hampton Roads. Plus, $1,000 and more than 50 teddy bears were collected for Edmarc. 

[READ MORE]

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Fairfax County FCU's Thuy Ngo Selected as Virginia Rep for Crash the GAC

We are pleased to announce Thuy Ngo, Application Support Analyst of Fairfax County Federal Credit Union, has been selected to attend "Crash the GAC" by The Cooperative Trust and Credit Union National Association. 

The Virginia Credit Union League is a supporter of "Crash the GAC" and is providing financial assistance to cover Thuy’s travel and hotel costs, while the Credit Union National Association covers the full conference registration.

[READ MORE]

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Chapter News

NoVA Chapter Meets Feb. 12

National Credit Union Foundation Executive Director Gigi Hyland will be the featured guest speaker at the NoVA Chapter's Feb. 12 meeting. Her topic will be corporate giving and the National Credit Union Foundation.

Location: Clyde's Restaurant (Tysons Corner, Vienna).

Time: 5:30 p.m. networking; 6 p.m. meeting and 6:30 p.m. dinner. Please RSVP online by Feb. 9 athttps://www.surveymonkey.com/s/LWT2PK6.

[MORE HERE]

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Tidewater Chapter to Hold Annual Meeting Feb. 12

The Tidewater Chapter will hold its Annual Meeting on Feb. 12. Chapter members will be electing the chapter's governing board. Your League's Lewis Wood will also present a program on the Credit Union House of Virginia, the League's downtown Richmond facility and Virginia-based credit unions' home near Capitol Square.

Come learn about this exciting initiative to boost credit unions' visibility with state lawmakers and regulators, as well as provide credit unions meeting space in the heart of downtown Richmond. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, VA 23320). Time: 6 p.m. social; 6:30 p.m. dinner and meeting. 
[LEARN MORE]

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Tidewater Chapter to Host Workshop on March 14

The Tidewater Chapter will host its annual workshop on March 14 on the campus of Old Dominion University. On tap are nine education sessions, plus an overview of the Credit Unions Care Foundation's SMART Credit Check program.

All credit unions, no matter your chapter affiliation, are welcome to attend. Sessions include Bank Secrecy Act/Anti-Money Laundering Regulations, Compliance Issues for Credit Union Boards, Skip Tracing and Bad Debt Collection, Enterprise Risk Management, and much more!

Registration is only $75 per person, or take advantage of registration discounts when you register a minimum of three people ($70 per person) or five people ($65 per person). Location: ODU's Constant Hall. Time: Registration begins at 8 a.m.; event ends at 1:30 p.m.

[DOWNLOAD THE BROCHURE] (pdf, 4 MB)

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Roanoke Valley Chapter to Hold Annual Meeting on Feb. 17

The Roanoke Valley Chapter will host its Annual Meeting on Feb. 17 at the Salem Civic Center.

The Chapter will elect its Executive Committee. Your credit union's voting delegate or an alternate will need to be present to cast your credit union's vote.

Contact your League's Debra Scott at dscott@vacul.org for information on your voting delegate and alternates. Time: breakfast begins at 8 a.m., with program to follow at 8:30 a.m. RSVP by noon on Feb. 13 to James Scott at jscott@memberonefcu.com.

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League News

League Seeks Compliance Analyst

The Virginia Credit Union League is seeking candidates for an open position with our organization. Primary responsibilities include researching compliance and operational issues that affect credit unions; developing training programs and publications to help credit unions understand the laws and regulations that apply to them; conducting on-site compliance audits; and preparing written audit reports for credit union management. Regular travel, mostly within Virginia, is required.

[LEARN MORE

Financial Education News

Googolplex Is Hiring Youth

Googolplex is seeking responsible young people with diverse backgrounds for 12 paid positions on its youth editorial board. No travel is necessary.

Board membership requires a one-year commitment, starting in June 2015. Payment is based on age level. Openings are available in three grade brackets (or homeschool equivalent) for the 2015-2016 school year:

In addition to getting paid, youth who are a part of the Googolplex editorial board gain experience creating and evaluating consumer-related projects (articles, infographics, or videos) and credit union-friendly online games. It's a fantastic way for kids to learn about money while also having fun.

To obtain an application, please contact Kory Seymour, Googolplex Youth Editorial Board Liaison,kseymour@cuna.coop, before Feb. 27. In the subject line please type Googolplex Youth Board Application; in the body of the email, please indicate anticipated grade level in the fall of 2015.

Membership on the youth editorial board is also open to credit union employees' children.

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Marketing News

Report Details CU, Bank Marketing Trends and Spends

Aite Group and The Financial Brand have collaborated for the third straight year to survey bank and credit union marketing executives, but this year's survey quantifies banks' and credit unions' marketing budgets in more detail than previous surveys did. You must be an Aite Group member or purchase the report to view it in its entirety.

[LEARN MORE]

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Security/Fraud Prevention

Spike in Fake ID Schemes Confounds FIs' Fraud Filters

Identity fraud, especially so-called synthetic schemes that use completely or partly made-up identities, is on the rise and hitting financial institutions hard.

In a classic example of synthetic identity fraud, fraudsters create fake IDs to obtain credit cards, diligently pay their bills for years and keep getting the credit limit raised. Once they've reached a certain threshold (say $50,000), they do a "bust out," where they take out a cash advance for $49,000 and skip town.

More recently, another type of synthetic ID fraud has emerged, fueled by the massive data breaches of 2014. In these schemes, hackers cross-reference data obtained from different sources — card numbers from Home Depot, for example, and Social Security numbers from another breached organization.

Then they call the financial institution and ask to change the PIN on the card account, which most banks will do for a customer who can provide a Social Security number and card number. (Some even offer automated systems to take care of this.)

Hackers can stitch all this data together and sell it on the black market as a fully emulated debit card that allows an individual to walk up to an ATM, enter the PIN and withdraw cash.

"We saw many instances of ATM fraud connected to the Home Depot breach where the PIN numbers weren't stolen," said Yaron Samid, founder and CEO of BillGuard, a provider of a card transaction monitoring services. "If you look at the Internet chat rooms, synthetic identities are the fastest moving."

[READ MORE]

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