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CURRENT Newsletter

March 19, 2015

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Headline News

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

News From Credit Unions

Community Involvement

Marketing News

Headline News

'Time Is of the Essence' to Save Small Institutions, Lawmakers Warn

The House Financial Services Committee renewed its look at regulatory relief for small financial institutions on Wednesday, pressing bankers and credit union representatives for details about their compliance burdens.

Rep. Jeb Hensarling, R-Texas, chairman of the committee, warned that "time is of the essence" for community banks and credit unions that are struggling with the costs of additional rules under the Dodd-Frank Act and other provisions.

"It is not an exaggeration to say that they are literally withering on the vine," Hensarling said. "We are losing more than one a day and they are not perishing of natural causes. The sheer weight, volume, cost, complexity and uncertainty of federal regulation is a burden that is killing them off."

The chairman added that he would be willing to take up any "legitimate, bipartisan piece of legislation to provide needed regulatory relief to community financial institutions" introduced before the panel.

Lawmakers in both chambers have been working for years to address concerns about the regulatory burden, and it's unclear what kind of deal can be brokered in the GOP-led Congress.

Although Democrats have said they are wary of widespread relief that undermines Dodd-Frank, they have also said they support the need for targeted legislation.

Rep. Maxine Waters, D-Calif., the ranking member on the panel, for example, signaled her support Wednesday for lifting the member business lending cap on credit unions from the current limit of 12.25% of total assets. There have been several efforts in recent years to more than double the cap to 27.5%.

Adam Levitin, a professor at Georgetown University, argued that problems facing community institutions span beyond Dodd-Frank, noting that consolidation began well before the financial crisis. He suggested that lawmakers should instead focus on restraining the Wall Street banks if they want to level the playing field for smaller institutions.

"If this committee really wants to help community financial institutions, the single best thing it could do, would be to pass legislation that would tax or break up the megabanks," he said. "Additional regulatory exemptions for community banks are insufficient to save this industry because no amount of exemptions will sufficiently level the playing field for community banks. Moreover, these exemptions will come at the cost of consumer protection." (American Banker Online, March 19)

Annual Meeting 2015: 20 Education Sessions With Board, Strategy, Operations Focus; Don't Miss Out!

We're excited to be returning to the Star City for the 2015 Annual Meeting (April 15-17)! This year we bring you 20 education sessions, three keynote addresses and a host of networking opportunities!

Credit Unions less than $50 million in assets can register at a discounted rate of $425. Credit unions with $50 million or more in assets pay just $525. Guest registration is $350.

Our conference hotel is the historic Hotel Roanoke.
110 Shenandoah Avenue
Roanoke, VA 24016

Phone: 540.985.5900

Questions about hotel reservations can be directed to Mary Amyx at 800.768.3344, ext. 630 or mamyx@vacul.org.

We look forward to seeing you in Roanoke!

Foundation's Charity Golf Tourney Tees Off April 15; Register Now!

There's still time to register to play in the 3rd Annual Credit Unions Care Foundation Golf Classic (April 15). Registration fee is $125 per player. We also need sponsors! Learn more here about playing or serving as a sponsor!

Notice to Voting Delegates: Items Available for Your Review

All credit union delegates to the League Annual Meeting: please note that a number of items for your review are now available on the League website.

Royce Introduces 2015 CU Residential Loan Parity Act

Rep. Ed Royce (R-Calif.) reintroduced the CUNA-supported Credit Union Residential Loan Parity Act this week. Under current law, when a bank makes a loan to purchase a 1-to-4 unit, non-owner occupied residential dwelling, the loan is classified as a residential real estate loan. However, when a credit union makes the same loan, it is classified as a business loan and is therefore subject to the 12.25%-of-assets cap on member business lending under the Federal Credit Union Act.

"I thank Rep. Royce for his continued support to help bring parity to residential loans made by credit unions," said Jim Nussle, president/CEO of CUNA. "This much needed legislation would enable credit unions to better serve members who purchase rental properties and contribute to the availability of affordable rental housing."


CUNA Welcomes Senate Exam Fairness Bills

Sens. Jerry Moran (R-Kan.) and Joe Manchin (D-W. Va.) reintroduced a bill (S. 774 ) intended to enhance safety and soundness by increasing the consistency and fairness of the regulatory examination system this week.
Your League and CUNA support the legislation as a needed step toward improving the federal examination process, with CUNA testifying in support of it this week at the House Financial Services Committee hearing on regulatory relief.


You Are Invited: CFPB Hosting Credit Unions-Only Roundtable March 26 in Richmond

The Consumer Financial Protection Bureau plans to hold a credit unions-only roundtable in Richmond on March 26. The CFPB is stilling confirming meeting rooms, but the event will likely be held at a downtown Richmond location, beginning at 10:30 a.m.

You will have the opportunity to discuss regulations and how they affect your operations with CFPB staff during the 10:30 a.m. roundtable.

CFPB staff will also host a payday lending forum at noon at the same location, which you are also welcome to attend. The payday lending event will be open to the public.

Please register for the roundtable by contacting your League's Dorshey Coleman at 800.768.3344, ext. 618 or dcoleman@vacul.org. Also kindly note if you plan to stay for the public forum on payday lending.

Summary Details:CFPB Roundtable

Location: TBD (downtown Richmond)
Time: 10:30 a.m.
Purpose: Discuss regulations impacting your operations with CFPB staff.
Register: Contact your League's Dorshey Coleman 800.768.3344, ext. 618 or dcoleman@vacul.org. Kindly note if you plan to stay for the public forum on payday lending, which starts at noon.

Fed's Yellen: Can't Rule Out a Rate Increase in June

The Federal Reserve removed 'patient' from its latest policy statement on Wednesday but said there would be no rate hike in April. Fed Chair Janet Yellen said the language change did not indicate a June rate hike was coming either, though she also said it could not be ruled out.


[RELATED:Fed Removes 'Patient': Prepare for an Interest Rate Hike]
[RELATED:This Week's Fed Meeting Really Matters]
[RELATED: ‘Hell Will Break Loose’ if the Fed Loses its ‘Patience’]
[RELATED: Forget Rates! Weak Earnings, Wobbly Economy Signal a Correction]
[RELATED: Anticipation is High on Whether Fed Stays 'Patient' on Rates]

Compliance/Regulatory Affairs News

CFPB's Card Study Could Set Stage for New Regulations, Enforcement

The Consumer Financial Protection Bureau announced Tuesday that it's seeking public comment ahead of a second study on the credit card market that could pave the way for new regulations or enforcement actions.

The CFPB is required to perform a study of the market every two years to gauge how rules have affected credit card terms and disclosures, among other things.

But for this go around, the agency added two additional topics it wants to examine: debt collection practices, specifically for debt being charged off or sold, and how issuers are applying ability-to-repay standards to applicants. Though the study is required by Congress, it's also a tool in helping the CFPB determine whether the market needs further rulemaking.

Industry observers said the study is a precursor to what the CFPB may crack down on next year in the card market.

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

Governmental Affairs News

100% for VACUPAC!

Our thanks to the following credit unions for their leadership in protecting and promoting the "Credit Union Difference," through their support of the Virginia Credit Union Political Action Committee (VACUPAC).

  • Henrico Federal Credit Union has 100% participation from Board and committee members (pin level) and staff.
  • Richmond Postal Credit Union has 100% participation from the Board (pin level).
  • Petersburg Federal Reformatory Credit Union has 100% participation from Board, committee members and staff (pin level).
  • Richmond Virginia Fire Police Credit Union has 100% participation from Board, committee members and staff (pin level).
  • Fort Lee Federal Credit Union has 100% participation from Board and staff (pin level).
  • Call Federal Credit Union has 100% participation from Board, committee members and senior staff (pin level).
  • Freedom First Credit Union has 100% participation from staff.
  • Belvoir Federal Credit Union has 100% participation from Board and senior staff (pin level).

VACUPAC is Virginia-based credit unions' political action committee. We collect contributions from credit union supporters, which we then use to support political candidates who support credit unions!


Financial Services/Marketplace News

No Spring in Mortgage Application Volume Yet

Applications for both home purchases and refinancing were lower during the week ended March 13 in spite of falling interest rates.

The Mortgage Bankers Association (MBA) said this week that its Market Composite Index, a measure of application volume, decreased 3.9 percent on a seasonally adjusted basis from the week ended March 6. The index has lost ground in six of the past eight weeks. On an unadjusted basis, the Index fell 4 percent.

The Refinance Index decreased 5 percent from the previous week and the refinance share of mortgage activity declined 1 percentage point to 59 percent of all applications, the lowest share since last October.

[RELATED: Mortgage Rates Lowest in 2 Weeks Ahead of Fed]

News From Credit Unions

Chartway Federal Credit Union’s CEO Announces Retirement

Chief executive officer of Chartway Federal Credit Union and its divisions of HeritageWest and SouthWest Community, Ron Burniske, has informed the board of directors that following 31 years of distinguished leadership, he plans to retire on Aug. 1, 2015.

“Although the decision was indescribably difficult, I know in my heart that the time is right,” said Burniske. “Our organization is financially strong, operationally prepared, and strategically well positioned to continue serving members for generations to come...”


Ribbon Cutting for Northwest Federal’s Newest Branch Set for March 26

The official ribbon cutting ceremony for Northwest Federal Credit Union’s Village Center branch is scheduled for March 26 at 5 p.m. Village Center is Northwest’s second Herndon location, serving the Herndon community, including local businesses.

“Northwest Federal is committed to serving consumers and businesses in Herndon and helping them succeed no matter their financial goals,” said Chris McDonald, Northwest Federal’s CEO.


Community Involvement

Raffle-A-Rama Deadline March 20

Note: The deadline for contributions to the Credit Unions Care Foundation's Raffle-A-Rama is Friday (March 20). Please consider a contribution...We need your help!

Your Credit Unions Care Foundation and its Community Involvement Committee are sponsoring our annual Raffle-A-Rama in support of the Federation of Virginia Food Banks and its partner agencies.

Please consider a financial contribution to our Raffle-A-Rama event, which will take place at this year’s Annual Meeting (April 15-17) in Roanoke.

We’ll use your financial contributions to put together spectacular packages that we’ll then raffle.

What We Need...

  • Chapters: We’re asking for a financial contribution of at least $250.
  • Credit Unions ($100 million in assets or more): Please consider a financial contribution of at least $250.
  • Credit Unions (Less than $100 million in assets): Please consider a financial contribution of at least $50.

Here’s How You Can Help...

Make checks payable to the Credit Unions Care Foundation of Virginia and forward them to the following address by March 20:

Credit Unions Care Foundation of Virginia
Attn: Mary Amyx
PO Box 11469
Lynchburg, VA 24506

Reach Mary at mamyx@vacul.org if you have questions.

Marketing News

The Best and Worst Credit Union Apps

Access to mobile banking has become an important part of any member/customer credit union or bank relationship. Consumers want easy access to their funds and the ability to check balances on the go, make transfers in transit and deposit checks without heading into a local branch.

Credit unions often get an unjust reputation as being behind the technological curve, but a 2014 analysis by Magnify Money shows 8 of the top 10 mobile banking apps were from credit unions.

Data on the 50 largest banks, 50 largest credit unions and a selection of top online banks were used in the survey. The bank and credit union apps were ranked on a scale of 1 to 5 using data from iTunes and Google Play during the week of Nov. 20. A weighted average of ratings from iOS and Android were used to create the final overall rating.


B of A Looks to Take the Pain Out of Changing Channels

One third of Bank of America customers — 17 million people — bank on their mobile devices, and the number is growing at a rate of 150,000 per month.

Yet customers have not given up more traditional channels. Ten million customers a week call one of the bank's contact centers; seven million walk into one of its branches.

Understanding that dichotomy is important, and many of the popular explanations for it are wrong, warns Steve Beasty, consumer banking technology executive.

"We all [assume of] people walking into the branch, 'That's my mother,' while the digitally active customers are like my 20-year-old daughter," he said. "But when we dig into this deeper, that's not what's going on. The digital customers are doing basic transactions online and on mobile — checking balances, depositing checks. But they're also using our physical branches and our call centers when they have a concern about something in one of their accounts or they've got a problem — 'I tried to deposit a check at the ATM and it shredded my check.' "

Other times these customers are looking for advice, perhaps to help choose a mortgage.

Beasty's team is working to smooth the experience as customers cross from the digital to the physical outlets of the bank.

"They come to the branch or contact center to finish something they started in mobile," Beasty said.

His first goal is to make the transition effortless. "Digital customers don't want to have to type in numbers or information," Beasty said. "We just want to click, tap or swipe. So it needs to be pretty automatic."

The second goal is for customers only to have to authenticate themselves once.

"We do it differently in each channel. In the ATM, it's a PIN. It's security questions in the call center. It's a password to get online," Beasty said. "Once that customer has come through those doors, we don't want to make them go through that again."

The third element of the ideal cross-channel experience is understanding and recognizing what brought the customer from a digital channel to the branch or call center.

"What were they doing, or what did we do to them?" Beasty said. "Say their account got hit with a fee last month. We have to look at that and turn it into insight for that employee in the branch."

The bank is creating specific "connected experiences" in the effort to meet those goals.

One is a "Click-to-Dial" feature for preferred banking customers. They will tap a button in the mobile banking app and get connected to a specialist in the call center.

The specialist does not have to ask any security questions and can see what the customer was doing in mobile banking.

"So rather than starting with 'Who are you and what do you want?', it's 'Welcome to Bank of America, Mr. Beasty. We see you were reviewing your credit card data in your mobile banking application. Is there something there I can explain?' [It is] a much smoother transition and experience for those customers." (American Banker, March 12)

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