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CURRENT Newsletter

October 2, 2015

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News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

News From Credit Unions

Chapter News

Marketing News

Security/Fraud Prevention

Headline News

Gov. Terry McAuliffe Helps Virginia Credit Union League, Virginia-Based Credit Unions Celebrate Grand Opening of New Richmond Facility

Gov. Terry McAuliffe joined the Virginia Credit Union League for the grand opening of the Credit Union House of Virginia in downtown Richmond on Sept. 30.

The $4 million Credit Union House of Virginia project was completed earlier this month. The facility houses employees of the League and provides office space to other lobbyists and organizations.

"I'm a huge fan of credit unions," said Gov. Terry McAuliffe. "I ran for governor to grow and diversify Virginia's economy and I appreciate the role credit unions play in providing much-needed credit to help us create jobs."

Gov. McAuliffe also made note of the strength of Virginia's credit union system, which boasts more than 9.6 million members.

"Credit Union House is a cooperative endeavor of Virginia's 150 member-owned credit unions to advance our advocacy work," said Rick Pillow, president of the Virginia Credit Union League. "We view our presence in Richmond as an opportunity to build on our already excellent working relationships with regulators, lawmakers, state government agencies and other organizations for the benefit of the 9 million-plus member-owners of Virginia-based credit unions. Credit unions will continue to face legislative and regulatory challenges, but this facility is a measure of our resolve to meet those challenges head-on."


THANKS!!! Many thanks to the 200-plus credit union supporters who made our grand opening events at the Credit Union House of Virginia such a success! CUHouseVA is your home and we're grateful for your support and to have had so many of you join us for the grand opening ceremonies on Tuesday and Wednesday or for our open house events on Thursday and Friday. Our door is always open (at least 8:30 a.m. until 5 p.m. anyway!), so if you didn't have the opportunity to visit us this week, make a point to stop by next time you're in downtown Richmond! 

Loan-Loss Rule Change Nears, Despite Critics' Howls

A controversial proposal to change the way financial institutions tally how much to set aside for bad loans is nearing completion, and critics are turning up the volume.

Accountants, investors and lobbyists are voicing their opposition to the Financial Accounting Standards Board's plan to require FIs to estimate future losses on all loans they make. After years of debate, the rulemaking process has entered the homestretch, and the standards board said it plans to issue a rule by yearend.

The proposed rule would require FIs to provision for projected losses over the lifetime of a loan on the day they book it, instead of the current practice of adding to provisions only when losses start to accrue. Critics say estimating losses is speculative and impractical, especially for community financial institutions with limited resources.

The opposition is coming not just from the financial services industry, which has stood against the rule from the start, but from inside the FASB itself. Two of its seven board members have committed to vote against the rule change, and more than half the members of the FASB's own Investor Advisory Committee say the model needs to be revised. This opposition, however, appears to be heading for defeat. A FASB representative said the group expects to approve the rule before the end of the year.

[READ MORE] (American Banker subscription may be required)
[RELATED: FASB Credit Losses Proposal Opposed; Withdrawal Urged]
[RELATED: CUNA's Comment Letter on FASB's Credit Losses Proposal]

CEOs Roundtables Offer Opportunity for Open Dialogue with Key NCUA, CFPB Leadership

Our friends at the Maryland/DC Credit Union Association are extending an invitation to Virginia credit union CEOs interested in attending CEO Roundtables this month with leadership at the Consumer Financial Protection Bureau (Oct. 9) and the National Credit Union Administration (Oct. 28). They ask that you RSVP as soon as possible if you would like to attend.


Huge Political, Legislative Challenges Face Credit Unions:  Voice Your Questions, Comments at Free Legislative Forum Oct. 7

Our annual Legislative Forum is around the corner. It’s free, but you do need to register to aid us in planning. We have heavy political and legislative challenges facing us, and our Forum is the ideal opportunity to join the discussion on addressing those challenges.


Fall Compliance Conference Oct. 14-15

Regulatory expectations are rapidly evolving and growing, making it essential for you to stay on top of compliance.

Register today for the Fall Compliance Conference being held Oct. 14-15 in Williamsburg. Take advantage of this two-day event with speakers Mary-Lou Heighes and Nathan Bowden.

Register today at  

News About Credit Unions

FHLBank Atlanta Holding Elections: Eligible Institutions Must Vote By Oct. 23

The Federal Home Loan Bank of Atlanta (Bank) is conducting an election to fill one member directorship and two independent directorships on its board of directors. Eligible institutions in the Bank’s district at-large will elect two independent directors. Institutions have until Oct. 23 to submit their completed ballot.


Compliance/Regulatory Affairs News

Lenders Must Make 'Good Faith' Effort on Mortgage Disclosures: Regulators

Federal examiners will expect institutions to show that they made a "good faith" effort in preparing for the implementation of the new integrated mortgage disclosures that go into effect on Oct. 3, regulators said.

"During initial examinations for compliance with the rule, the agencies' examiners will evaluate an institution's compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance," CFPB Director Richard Cordray wrote in a letter. "Examiners will expect supervised entities to make good faith efforts to comply with the rule's requirements in a timely manner. Specifically, examiners will consider: the institution's implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early technical problems or other implementation challenges."

The guidance from regulators does not to settle the debate entirely, as industry representatives continue to express fears lenders could face private lawsuits if they make errors.

"While this is certainly helpful, the industry will still be subject to litigation for errors due to the fact that the underlying rule itself is flawed," said Anne Canfield, president of Canfield & Associates, which specializes in regulatory affairs. (American Banker, Oct. 2)
[RELATED: Lawmakers Ask CUNA, Partners to Inform of TRID Enforcement Actions]
[RELATED: TRID Effective Oct. 3: Here’s What You Need to Know]

Feds Near Creation of Student Loan Servicing Regime

The government appears to be speeding toward establishing uniform standards for student loan servicers in light of reports of pervasive problems in the administration of both private and federal loans.

Three federal agencies issued a joint framework Tuesday for developing servicing reforms as one of them — the Consumer Financial Protection Bureau — says it is considering industrywide rules. The joint statement of servicing "principles" came out the same day that the CFPB released results of a public inquiry that sought comments from consumers on their loan-servicing experiences. (American Banker, Sept. 29)

Lawmakers Give CFPB's Cordray Earful Over Auto Lending Crackdown

Lawmakers from both political parties on Tuesday sharply criticized the Consumer Financial Protection Bureau's attempt to restrict or eliminate auto dealers' ability to mark up a loan by citing their partnering lenders, arguing it would result in higher prices for consumers.

At a hearing, House Financial Services Committee members keyed off of stories in American Banker that referenced internal agency documents in which officials acknowledged sometimes overestimating the amount of bias at lenders and detailed efforts to target the dealer markup.

They argued the agency is unfairly pursuing auto lenders and dealers, even though dealers are exempt from the CFPB's jurisdiction, and raised questions about its disparate impact methodology, in which lenders are cited for unintentional discrimination if statistics show minorities receive higher rates at the dealership. (American Banker, Oct. 1)

Governmental Affairs News

Boehner's Exit a Mixed Bag for Financial Services

House Speaker John Boehner's surprising announcement that he will resign from Congress raises fresh questions about several key banking priorities. Some observers say the Republican-controlled Congress and the White House could find themselves in an even more intense standoff.

"We believe that Speaker Boehner's resignation materially increases the likelihood of a volatile fiscal fight in late November which will foster both political uncertainty and market volatility," said Isaac Boltansky, an analyst at Compass Point Research & Trading, in a note to clients Friday. "Markets have grown comfortable with fiscal cliffs due to the repetitive nature of the debates and the known cast of characters. Speaker Boehner's resignation removes a known quantity from the market's debt ceiling calculus which is a concerning development."

Increased tensions could also jeopardize dealmaking behind the scenes around Sen. Richard Shelby's regulatory relief package. Shelby, chairman of the Banking Committee and a senior appropriator, added the legislation to the Senate's financial services spending bill over the summer in an effort to potentially push the proposal through as part of an omnibus, yearend spending deal. (American Banker, Sept. 29)

[RELATED: Obama Signs Funding Bill Averting Government Shutdown — For Now]

CU MBL Bills Receive Bipartisan Support in Hill Op-Ed

Two organizations from both sides of the political fence united to express support of credit unions’ member business lending (MBL) legislative initiatives as good public policy in an opinion-editorial Tuesday in The Hill.

“It’s hard to find common ground between two parties in Washington these days, but getting America out of this protracted entrepreneurial slump should be an urgent national priority. Here’s one idea that ought to appeal to both sides: Enable the nation’s credit unions to invest more in new and small businesses,” wrote John Berlau and Lindsey Lewis.


Defecting Dems Surface in CFPB Battle

A handful of moderate Democrats supported a controversial bill to restructure the Consumer Financial Protection Bureau, helping the House Financial Services Committee approve the legislation.

The debate highlights a growing divide among some party moderates and more progressive lawmakers who remain opposed to changing core aspects of the Dodd-Frank Act. The Financial Product Safety Commission Act would establish a five-person board structure, replacing the single director currently at the helm of the consumer agency.

"A bipartisan commission is common throughout the federal government," said Rep. Randy Neugebauer, R-Texas, a lead sponsor of the bill. "A bipartisan leadership structure can help address regulatory imbalances, imperfections or in some circumstances, political policy decisions."

[READ MORE] (American Banker subscription may be required)

Financial Services/Marketplace News

Jobs Report Signals Fed on Hold Until 2016

Stocks were rocked Friday and investors ran to the safety of Treasurys after a disappointing jobs report pushed off expectations for a Fed rate hike into 2016 and signaled the U.S. economy may be feeling the impact of weakness overseas.

"This is the shoe we did not expect to drop," said Ward McCarthy, chief financial economist at Jefferies.

The U.S. economy added just 142,000 jobs in September, and the new hires were revised down to 136,000 in August.


U.S. Auto Sales Soar, But Volkswagen Struggles

U.S. automakers enjoyed a robust sales performance in September — with Volkswagen a notable exception. Ford reported a 23% increase, compared to the same period a month earlier. General Motors posted a 12% gain, and Fiat Chrysler extended its sales streak to 66 consecutive months of gains with a 14% rise. Toyota enjoyed a 16% increase.

Subaru's hot streak continued as the automaker posted a remarkable 28% rise.

But Volkswagen, embroiled in a scandal involving its diesel cars, reported an increase of only 1%.


News From Credit Unions

Freedom First Receives $1 Million From National Federation of Community Development Credit Unions

Freedom First will receive $1 million in secondary capital from the National Federation of Community Development Credit Unions.

The funding comes from an investment of $10 million by Bank of America in the Federation’s Community Development Investing Program, a program that funds investments focused on helping low-income people and communities achieve financial independence through credit unions.

Freedom First will use these funds to help ensure continued success of its Affordable Housing Program. 


Freedom First Takes Two First-Place Awards in Social Responsibility Competition

Freedom First has received two first place awards in the annual state-level Dora Maxwell and Louise Herring awards sponsored by the Virginia Credit Union League.

  • The Desjardins Adult Financial Literacy Award honors credit unions for their commitment to teaching personal finance basics in local communities. Freedom First’s Responsible Rides program, awarded first place, is a partnership with local non-profit agencies that provides a sustainable solution to increase car ownership for low-income working families.
  • The Dora Maxwell Social Responsibility Award recognizes credit unions for their charitable projects and community service. Freedom First won the top award in this category with their outreach program, “Scoop” the Freedom First Ice Cream Truck – Giving back to the community, one scoop at a time. The idea of using “Scoop” was to create awareness of the Freedom First mission, to create joy, and to start conversations about finances and prosperity.


Langley FCU Announces VP of Marketing

Langley Federal Credit Union is pleased to announce the addition of Fred Hagerman as Vice President of Marketing. Hagerman will oversee all of the Marketing activities for the credit union.

“We enthusiastically welcome Fred to the Senior Management Team at Langley Federal Credit Union,” said Langley President/CEO Tom Ryan. “We are delighted to have him as our Vice President of Marketing and are confident that the credit union will undoubtedly benefit from the marketing experience and expertise that he brings to our institution.”


UVA Community CU Expands Business Banking Services

The University of Virginia Community Credit Union recently announced that it has appointed Ethan A. Dunstan to serve as vice president of business banking. Mr. Dunstan will be responsible for leading the expansion of the credit union’s commercial deposit and treasury management services, as well as commercial online banking.


Chapter News

Roanoke Valley Chapter To Hold Legislative Dinner Oct. 22

The Roanoke Valley Chapter will hold its annual legislative dinner in the Pocahontas Room at the beautiful Hotel Roanoke, with cocktails beginning at 6 p.m. This legislative dinner provides an opportunity for your credit unions to meet with area legislators to voice concerns and support for legislation that impacts how we do business.

This is an important event for us to be able to reach our legislators and your participation is greatly appreciated! Please RSVP to Ryan LaFountain at by Oct. 16, with the names of attendees and their menu selections. Cost is $45 per plate.

Please provide payment by either mailing a check payable to the Roanoke Valley Chapter of Credit Unions (RVCCU) to 1019 Preston Street, Radford, Virginia 24141 or by paying at the door.


Marketing News

LGBT Community Presents Significant Growth Opportunity

For many credit unions, reaching out to the LGBT community could present a significant growth opportunity, according to a new study by the Filene Research Institute.

The statistics in “Understanding the LGBT Opportunity in Financial Services” tell a compelling story:

  • The lesbian, gay, bisexual and transgender population in the United States is estimated at between 8.5 to 10 million individuals.
  • Same-sex households are less likely than heterosexual households to own property and hold mortgages.
  • Credit discrimination is a major pain point for the LGBT population.
  • A majority of the LGBT population in one survey have strong or moderate concerns about being denied a home mortgage because of their sexual orientation, not their credit scores.

“Today, even amid marriage equality, there are still 29 states where it is still completely legal to take sexual orientation into consideration when extending credit,” said Andrew Downin, Filene’s innovation director. “For Americans who don’t face this on a daily basis, I know that’s a shock. Even in states where such discrimination is prohibited, there may still be the perception that inclusion and acceptance just isn’t on credit unions’ radar.

[READ MORE] (Credit Union Journal subscription may be required)

Big Data: Mind-Boggling Facts Everyone Must Read

Big data is not a fad. We are just at the beginning of a revolution that will touch every business and every life on this planet.

But loads of people are still treating the concept of big data as something they can choose to ignore — when actually, they’re about to be run over by the steamroller that is big data.

Don’t believe me? Here are stats that should convince anyone that big data needs their attention:

  • The data volumes are exploding, more data has been created in the past two years than in the entire previous history of the human race.
  • Data is growing faster than ever before and by the year 2020, about 1.7 megabytes of new information will be created every second for every human being on the planet.
  • By then, our accumulated digital universe of data will grow from 4.4 zettabyets today to around 44 zettabytes, or 44 trillion gigabytes.
  • Every second we create new data. For example, we perform 40,000 search queries every second (on Google alone), which makes it 3.5 searches per day and 1.2 trillion searches per year.
  • This year, over 1.4 billion smart phones will be shipped – all packed with sensors capable of collecting all kinds of data, not to mention the data the users create themselves.

At the rate at which data and our ability to anlayze it are growing, businesses of all sizes — large and small — will be using some form of data analytics to impact their business in the next five years. The question isn’t whether or not big data is here to stay; the question is are you ready.


Security/Fraud Prevention

Experian Breached; 15M Consumers Affected

A server containing sensitive consumer information at Experian has been breached, with the records of as many as 15 million T-Mobile customers stolen, the companies said Thursday.

There is no evidence that the stolen information has been used for fraud, the firms said.

The breach underscores the escalating cyber threat facing the financial services industry, which businesses and consumers entrust to protect valuable private information.

In the incident at Experian, the affected customers had applied for device credit or credit checks from T-Mobile from September 2013 through mid-September of this year. The breach was "an isolated incident" limited to one Experian client, T-Mobile, at an Experian unit called Decision Analytics, and did not affect the information services giant's consumer credit bureau business, the company said. (American Banker, Oct. 2)

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