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CURRENT Newsletter

May 14, 2015

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CURRENT Newsletter | 14 May 2015

May 14, 2015 by Bethany Scott

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

Headline News

Compliance/Regulatory Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

League News

Technology News

Headline News

Shelby Bill Receives Praise from CUs, Trades

When credit union trade associations spoke, Sen. Richard Shelby (R-Ala.) and his staff apparently listened. As a result, industry leaders are pleased with the draft of the Senate Banking Committee’s proposed Financial Regulatory Improvement Act of 2015 and its inclusion of specific guidance regarding credit union regulatory issues.

CUNA also was pleased with the bill, according to President/CEO Jim Nussle, who thanked Shelby for offering so many credit union solutions.

"The draft bill includes three credit union-specific provisions that will allow budget transparency for the NCUA, allow privately insured credit unions to become members of a Federal Home Loan Bank (FHLB) and provide parity for all credit unions with under $1 billion in assets to join the FHLB system,” Nussle said in a prepared statement. “These common sense provisions have wide bipartisan support, and I urge Congress to work together to advance these important provisions.”

The more than 200-page bill contains eight separate sections, including changes to Dodd-Frank that would mandate tougher capital and oversight standards on banks with more than $50 billion in assets. The provisions affecting credit unions are contained primarily in the first section, which contains 25 different measures to provide regulatory relief for credit unions and community banks.


American Banker: How the Senate Banking Fight OverReg Relief Will (Likely) Play Out

The ball is now firmly in Democrats' court, following the release of the Senate Banking Committee Chairman Richard Shelby's sweeping regulatory reform bill.

But the biggest test for lawmakers on both sides of the aisle will come May 21, when the bill is scheduled for a committee vote.

American Banker looked at three possible scenarios for the markup.

Option 1: Shelby and Brown strike a deal.

Perhaps the best-case scenario for the banking industry would be for Shelby and Sen. Sherrod Brown, D-Ohio, ranking member on the panel, to put aside their differences and come to the table on a compromise bill that could sail through the House and be signed by President Obama.

Option 2: Shelby wins over a few moderate Democrats.

Even without the support of their ranking member, it's possible some moderate Democrats on the panel could opt to work out a deal with Shelby to bolster their contacts with the industry.

Observers are keeping a careful eye on Sens. Mark Warner of Virginia, Jon Tester of Montana, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana.

A spokeswoman for Warner said that that the legislation appeared "at first glance to be a significant overreach."

"Senator Warner thinks that is a shame, because there are a number of commonsense, bipartisan fixes that Democrats and Republicans alike want to enact," she added.

Heitkamp said in a statement Tuesday afternoon that the bill "was drafted without any input" from Democrats and noted that she's "still reviewing" the legislation.

"I hope we can actually work together to negotiate strong, bipartisan policies that best support community banks and credit unions," she said. 

Option 3: The committee vote proceeds along party lines.

While there's still time for a deal to be struck, analysts said there's a decent chance the legislation ultimately passes the committee by a party-line vote.

"Unless there are some meaningful changes, the sheer breadth of it gives political cover for Democrats to stick together," said Edward Mills, a policy analyst at FBR Capital Markets. "What you'll probably get out of the markup next week is a lot of qualified no-votes on the Democratic side."

That would make winning a floor vote on the bill much harder. But Shelby does have an ace up his sleeve—the ability to use the appropriations process if necessary to pass certain provisions. Such a maneuver would spark a partisan clash later this year, but Shelby could make it work, potentially adding measures to a must-pass spending bill. The threat of such a move could force at least some Democrats to deal.

(American Banker, May 13)
[RELATED: White House Threatens to Block Shelby Reg Relief Bill] (Credit Union Journal subscription may be required.)

Attorneys for CU, Banks Plan Informational Call on Target-MasterCard Settlement

Many credit unions and banks have had questions and concerns about a settlement announced on April 15, 2015 between Target and MasterCard for losses suffered in the Target data security breach. The settlement provides a maximum $19 million of recovery for all MasterCard issuers.

Should a financial institution choose to accept this payment, it must release all other claims against Target, including those pending in the Target Corporation Data Security Breach Multidistrict Litigation (“MDL”). Those who decline to participate will maintain all their legal rights and will not be required to release their claims. Furthermore, those institutions that decline the settlement may well remain eligible to seek appropriate recovery under MasterCard’s ADC program, which does not require the release of any claims to participate.

Court-appointed lead counsel representing payment card issuers will hold a conference call for financial institutions affected by the Target Data Breach on Monday, May 18 at 12:30p.m. 

During the call you will be able to ask questions regarding the settlement, as well as its present and future legal implications.

The dial-in information is listed here. (A password for the League website is required. Register here if you need one.)

House Version of NCUA Budget Transparency Act Introduced

A U.S. House bill was introduced Tuesday night (H.R. 2287) that would require the National Credit Union Administration to open its budget process to the public.

Reps. Mick Mulvaney (R-S.C.) and KyrstenSinema (D-Ariz.) introduced the bill, which is the House companion to a bill introduced in the Senate (S. 924) in April by Sens. Dean Heller (R-Nev.) and Mark Warner (D-Va.).

The bill would require the NCUA to make a copy of its draft operating budget publicly available. It would also require the agency to provide notice of a public hearing, conduct the hearing and allow the public to submit comments on the budget.

“We are grateful to Sen. Warner for supporting credit unions by introducing the Senate version of this bill, and pleased to now see a companion bill in the House as well as inclusion in the Sen. Shelby’s regulatory relief package,” said League President Rick Pillow. “We believe that credit unions -- which fund almost all of NCUA's budget -- deserve the right to comment on the agency's proposed budget."   

[RELATED: NCUA Budget Transparency Bill Strengthens Agency’s Mission: CUNA]

Janine Fowler Joins League as Compliance Analyst

Janine Fowler has joined the Virginia Credit Union League as a Compliance Analyst. In her new position, she will analyze new and proposed regulation and legislation for their impact on credit unions. Janine will also provide assistance to credit unions by researching and answering compliance-related questions.

Other duties will include Bank Secrecy Act (BSA) training for credit unions and chapters, BSA audits, and writing the League’s popular Operations Manual releases.


Compliance/Regulatory Affairs News

CFPB Issues Fair Lending Guidance

New guidance issued Tuesday by the Consumer Financial Protection Bureau (CFPB) is designed to help lenders avoid illegal discrimination against consumers receiving public housing assistance.

According to the bureau, the guidance was issued to ensure non-discriminatory access to credit for applicants whose income includes vouchers from the Section 8 Housing Choice Voucher (HCV) Homeownership Program.


CFPB's Cordray Confident New Mortgage Disclosures Won't Be Disruptive

A new mortgage disclosure regime due to take effect on Aug. 1 is unlikely to cause closing delays, according to Consumer Financial Protection Bureau Director Richard Cordray.

Under the new disclosures mandated by CFPB, homebuyers must receive the new closing disclosure three days prior to the closing. Lenders fear if they must make changes to the document, it could effectively cause a delay in closing.

But Cordray insisted that wouldn't be the case.There are only three circumstances that would delay a closing: an increase to the annual percentage rate by more than one-eighth of a percent for fixed-rate loans or more than one-fourth of a percent for variable-rate loans; the addition of a prepayment penalty to the loan; or a change in the basic loan product, such as moving from a fixed-rate loan to a variable-rate loan. (American Banker, May 13)

Financial Services/Marketplace News

This Is a Horrible Realization About Retirement

Retire at 65? Yeah, right. Multiple surveys reveal that Americans are getting increasingly jaded about their prospects for enjoying a relaxing retirement, so much so that many are throwing in the towel and not even bothering to plan for it at all.

According to a survey of 2,000 Americans conducted for Allianz Life, 84% of them characterize the idea of a retirement where they can do what they want as a “fantasy.”

A second study, this one from the TransAmerica Center for Retirement Studies, also finds that one in five Americans thinks they’ll have to keep punching the clock until they literally can’t work anymore, and 37% expect wages earned from working to be part of their “retirement” income. More than 80% of workers who have already hit the 60-year milestone expect to work past 65, already are or don’t plan to retire at all.


Education & Networking Opportunities

Spring Compliance Conference Set for May 20-21; Still Time to Register

The Spring Compliance Conference is slated for next week (May 20-21) and features a full day of employment/HR-related hot topics on Day 1 and sessions on several potentially troublesome regulatory issues on Day 2.


Here’s the full rundown on this not-to-be missed program!


HR & Employment Law Update - (Dan Summerlin& Tom Winn, Esq.)

  • Session 1 - Recent Changes and Developments at the Equal Employment Opportunity Commission (EEOC) and Department of Labor (DOL) 
    These sessions will provide attendees with recent developments at the two primary agencies that impact employment at credit unions. This will include recent developments at the EEOC (pregnancy discrimination, religious issues, and reasonable accommodations under the ADA) and the DOL (FMLA changes, workplace violence and enforcement initiatives). 
  • Session 2 - Social Media
    The world of social media continues to evolve on almost a daily basis. This session will provide the latest information on what credit unions should be doing to stay in control of this ever-changing media such as the proper elements of a social media policy and what employee behaviors are subject to discipline. 
  • Session 3 - Fair Labor Standards Act (FLSA) and Mortgage Loan Originators  
    Another year has brought another court decision that directly impacts the proper classification of MLOs in your credit union. This session will provide the latest turn of events and how you should be classifying MLOs and related positions.       
  • Session 4 - Discipline and Termination
    This session will provide a refresher on handling discipline and terminations at your credit Union. In today’s world, discipline and termination needs to be handled carefully to ensure the maximum protection for your credit union.  


  • Session 1 - TILA/RESPA Integrated Mortgage Disclosures - (Hazel Wong, Esq.)
    Discussion will center on the changes to the disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) that are scheduled to go into effect Aug. 1, 2015. Attorney Hazel Wong will discuss what loans are covered under the new rule and what changes you will need to make to your policies/procedures when the change goes into effect.  
  • Session 2 - New Foreclosure Regulations - (Brian Dolan, Esq.)
    The CFPB's new mortgage servicing rules have drastically changed the way foreclosures should be processed. Learn more about the new rules and what they mean for your credit union and your members. 
  • Session 3 - Trust Accounts & Powers of Attorney [POA] - (Alexander Powell Jr., Esq.)
    There are a host of issues surrounding trust accounts and powers of attorney. What's required in the handling of a trust account? Are there membership requirements when accepting a trust? What information should be gathered when accepting a power of attorney? What should you review before accepting a power of attorney? Learn the answers to these important questions in order to protect your credit union.
  • Session 4 - Business Lending - (Dustin DeVore, Esq.)
    Being able to analyze, evaluate and structure a business loan is only part of the member business lending process. There are also very real compliance issues that must be addressed, including requirements for documentation, policies and procedures. Ensure all your "i's" are dotted and "t's" crossed before making your first loan.


Workshop on Do's and Don'ts in Marketing Compliance Coming May 21

As part of this year's Spring Compliance Conference, we're hosting education sessions that specifically target marketing compliance issues! Attorney Todd Sherpy will cover a variety of topics from advertising to website/publication compliance to issues surrounding sweepstakes and contests.

Your League's Dawn Lindley will follow Sherpy's sessions, facilitating a discussion of best practices for the SMART Credit Check campaign.

LOCATION: Embassy Suites (Richmond).
TIME: 9 a.m. until 2 p.m.


News From Credit Unions

Member One FCU Supports Renovation Project at Carilion Clinic Children's Hospital

A ribbon cutting ceremony for the renovated "Teen Room" at Carilion Clinic Children's Hospital (CCCH) was held May 8. Mark Hudzik, Director of Business Lending represented Member One and symbolically cut the ribbon. 

The renovation was a collaboration between Fox 21/27 and Member One Federal Credit Union, who partnered this past Fall on a series called “Your Red Band Society” to share with the community stories of hope and healing from patients in our area treated at CCCH and to raise money for this project.


Call Federal Announces Winners of 2015 Alice S. Pearce Scholarship Awards

Call Federal Credit Union is awarding $2,500 scholarships to four outstanding students in the Metro Richmond area. The Alice S. Pearce Scholarship Award recognizes the contributions of Call Federal Credit Union’s first manager, Alice S. Pearce, who served from the credit union’s founding in 1962 until her retirement in 1991.


NARFE Premier FCU CEO Challenges Staff to Tell CU's Story

As NARFE Premier Federal Credit Union celebrates its 80th Anniversary, President and CEOMarty Wye challenged credit union employees to write “Our Story” in 300 words or less.

The most compelling entry would receive a $100 gift card. The stories Mrs. Wye received from her staff far exceeded her expectations. She ended up awarding one $100 gift card and five $50 gift cards. The stories were personal and unique! Here are highlights from some of the stories. 

Belvoir Federal Breaks Ground on New Ft. Belvoir Branch

Belvoir Federal Credit Union on Monday held a groundbreaking ceremony for its new branch located on the Ft. Belvoir military base. 

Patricia Kimmel, CEO/President of Belvoir Federal, stated during the groundbreaking ceremony: “It has been a long time coming since we asked for land to build a new branch on Ft. Belvoir, but now we have the land and we are prepared to build a great branch filled with the latest technological advancements for our members and soldiers.”


League News

CUNA Mutual Group, AACUL Agree to 3-Year League Marketing Agreement

CUNA Mutual Group and state credit union leagues, represented by the American Association of Credit Union Leagues (AACUL) Executive Board, have agreed in principle to a new three-year $64 million marketing agreement.

The agreement, effective Jan. 1, 2016, will help ensure credit unions have a strong local voice to advocate on their behalf. The marketing agreement, which will be finalized with each league, comes as CUNA Mutual Group prepares to make significant investments in the company's products, technology and services for the benefit of policyholders, many of whom are credit union members.


Technology News

Cyberattacks Target Mobile Banking

Reports of 2.2 billion malicious attacks on computers and mobile devices in 2015’s first quarter and an evolving Dyre Wolf malware threat are reminders of the continuing need for financial institutions to remain vigilant.

In an epic quarter, Moscow-based security firm Kaspersky Lab released the “IT Threat Evolution Report for Q1 of 2015.” It discovered 2.2 billion malicious attacks blocked during the quarter on computers and mobile devices. That doubles the amount detected in Q1 of 2014. Kaspersky also detected 1,527 new mobile banking Trojans, 29% more than in Q1 of 2014.


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