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CURRENT 20 Feb 2013

February 20, 2013

  • Your comments and submissions are always welcomed. E-mail pr@vacul.org
Headline News News About Credit Unions Governmental Affairs News Financial Services/Marketplace News Education & Networking Opportunities News From Credit Unions Chapter News Financial Education News Marketing News Security/Fraud Prevention Technology News

Headline News

CU Charter Enhancements Are Unveiled For 113th Congress

Two key pieces of legislation that would enhance the credit union charter were introduced in the U.S. House last Thursday: One bill (H.R. 688) would address the credit union member business lending (MBL) cap, and another (H.R. 719) would improve credit unions' access to secondary capital.

"Credit union membership grew by at least 2.4 million in 2012--the greatest membership growth in 15 years," said CUNA President/CEO Bill Cheney. "These two key pieces of legislation represent tools that will give credit unions greater options for serving their growing memberships--including small business owners in search of credit to keep their businesses and their communities thriving." [read more] (via The Advocate Blog)

> You can take action on these bills here, encouraging your Congressman to sign on as a co-sponsor.

[related: Reps. King, Sherman Introduce Supplemental Capital Bill]
[related: Credit Union MBL Bill Is Reintroduced]

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And the Winners Are...

The Virginia Credit Union League is proud to recognize award winners in the 2012 social responsibility contests. Credit unions earned recognition in the following programs:

  • The Desjardins Financial Education Awards recognize the leadership of individual credit unions and chapters (or groups of credit unions) on behalf of youth and adult financial education.
  • The Dora Maxwell Social Responsibility Recognition Program promotes social responsibility among credit unions by formally recognizing their community service projects and charitable good works.
  • The Louise Herring Award for Philosophy in Action promotes credit union's "People Helping People" philosophy by formally recognizing credit unions that demonstrate -- in an extraordinary way -- the practical application of that philosophy.

"Credit unions have a proud history of helping their members and working toward the betterment of the communities they call home," said Virginia Credit Union League President Rick Pillow. "Each year, we are amazed at the commitment of time, energy and resources our credit unions devote to community service projects, financial education initiatives and member-focused programs that truly exemplify our 'People Helping People' philosophy."

First Place Award winners in each asset category advanced to the national competition sponsored by the Credit Union National Association. All of our award winners will be recognized at the League's 2013 Annual Meeting (April 17-19) in Roanoke. National award winners will be recognized next week at CUNA's Governmental Affairs Conference in Washington, D.C.

Congratulations to the following credit unions:

Louise Herring Philosophy in Action

(Greater than $1 Billion Asset Category)

($250 Million - $1 Billion Asset Category)

($50 Million - $250 Million Asset Category)

Dora Maxwell Social ResponsibilityAward

(Greater than $1 Billion Asset Category)

($500 Million - $1 Billion Asset Category)

 ($250 Million - $500 Million Asset Category)

Desjardins Financial Education Award - Youth

(Greater than $ 500 Million Asset Category)

($50 Million - $150 Million Asset Category)

Desjardins Financial Education Award - Adult

(Greater than $500 Million Asset Category)

($50 Million - $150 Million Asset Category)

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Congressional Luncheon Feb. 27; Friday Deadline for Registrations

Friday (Feb. 22) is the registration deadline for our Congressional Luncheon in Washington on Feb. 27. Confirmed attendees are:

  • House Majority Leader Eric Cantor
  • Rep. Gerry Connolly, the only Virginian to co-sponsor our member business lending legislation
  • Rep. Bob Goodlatte
  • Rep. Scott Rigell
  • Rep. Bobby Scott
  • Rep. Rob Wittman

We have 95 advocates registered to date, but we'd love to fill the room, so please register today!
[Register Online]

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League Announces Slate of Candidates for 2013 Director Elections

The Nominating Committee of the Virginia Credit Union League has named candidates for 2013 election to the League’s Board of Directors. This year three regional seats are open for election along with two At-Large positions.

Official ballots for casting your vote will be mailed by March 20, as required by our bylaws. Ballots will instruct credit unions to vote for nominated individuals as appropriate or to write-in another eligible candidate. The term for each open seat provides that the elected director shall serve for three years.

[read more]

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League Board, Bylaws Committee Propose Amendments to Articles, Bylaws

Membership to Vote on Measures at 2013 Annual Meeting
The Virginia Credit Union League’s Board of Directors seeks member approval to amend the corporation’s Articles of Incorporation and Bylaws at the 2013 Annual Meeting. Credit union delegates will be asked to vote on six proposed changes. The three proposed changes to the Articles of Incorporation require a 2/3 affirmative vote for passage.

The three proposed changes to the Bylaws require a 3/4 affirmative vote for passage. A brief summary of the changes are provided for your review. A complete mark-up of the League’s Articles and Bylaws will be provided to delegates at the Annual Meeting.

[summary of proposed amendments]

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Help Us Tell Your Story; Report Your Micro-Lending Efforts

One of the best tools we have in communicating credit unions' good works is our Reality Check Impact Report. Using the data you provide, we're able to give lawmakers a more accurate look at the impact we have in serving low-wealth member households and in meeting the emergency financial needs of members. We're collecting data for 4th quarter 2012/calendar year 2012 right now.

Our thanks to the credit unions that have taken time to complete the survey, and we hope you'll follow their good example and aid us in our advocacy work on your behalf. Only aggregate data is used. We would also love to share your stories about members helped by your small loans. Photos of the members you've helped would also be appreciated! Email them to Lewis Wood at lwood@vacul.org.

[Click here for the online survey
We have a downloadable version of the survey as well! (PDF, 434kb) 
[view the latest Impact Report] (PDF, 2.3MB)

"Thank You!" to the following credit unions for completing the survey:

  • Argent FCU
  • Beacon CU
  • Belvoir FCU
  • Celco FCU
  • Chesterfield FCU
  • CommonWealth One FCU
  • DuPont Community CU
  • Fairfax City FCU
  • Fedstar FCU
  • First NRV FCU
  • Fort Lee FCU
  • Freedom First FCU
  • Martinsville DuPont CU
  • Mountain Empire FCU
  • Old Dominion University CU
  • Peoples Advantage FCU
  • Resources FCU
  • Richmond Fire Department FCU
  • Sperry Marine FCU
  • URW Community FCU
  • Virginia CU

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League Schedules Town Hall Meetings; Last Chance to Register for This Week's Events

Credit union CEOs and Board Chairs should have recently received special invitations to join the League for our 2013 Town Hall meetings. Your League will offer updates on our Strategic Plan, including important enhancements to our governmental affairs program. Feel free to pick a date that best accommodates your schedule. The program will be the same at each location.

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Annual Meeting Education Session: Deciphering the Smartphone Wallet

New technology related to smartphone wallets could constrict interchange income for credit unions and insert another brand name between you and your members.

At this year's League Annual Meeting, David Schropfer of The Luciano Group will offer a no-holds-barred look at the emerging business models that will add more pressure to your revenue and why. You will also learn how mobile wallet companies are going to make money, and whether to partner with them or struggle against them.

[learn more about the League Annual Meeting]
[register for the League Annual Meeting]

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News About Credit Unions

America's Credit Unions Sponsor USA Track & Field Women's 10 Mile Championship Hosted by the Credit Union Cherry Blossom Ten Mile Run

Credit Union Miracle Day, the sponsor group of a Family of Races, in cooperation with the Credit Union National Association and the National Association of Federal Credit Unions, has secured the naming rights of the USA Track & Field Women’s 10 Mile Championship designation for the Credit Union Cherry Blossom Ten Mile Run® being held on April 7 in Washington, D.C.

The championship name will say it is Presented by America’s Credit Unions.

“We are delighted to be connected with this nationally recognized women’s sporting competition,” said Charlie Mallon, President/CEO of Congressional Federal Credit Union and Chairman of the Credit Union Race Committee for the Credit Union Cherry Blossom Ten Mile Run. “This designation elevates not only this world-class running event, it also raises awareness of credit unions’ commitment to serving their 95 million member-owners and communities.”

[read more]

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CUs Have Near-Record Year For Membership Growth

Membership growth slowed in December from its record pace, but not until credit unions across the nation added a near all-time best of about 2.4 million members for 2012, according to preliminary estimates by CUNA.

December's growth was just 100,000 new members, but that appears to be the fewest new members added during any of the 12 months, when credit unions averaged 200,000 new members per month.

Those figures compare to the best years ever for membership growth, including 1986, during the height of the savings and loan crisis when an estimated 2.6 million members joined credit unions; and 1999, just after the national "Campaign for Consumer Choice," when some 2.3 million Americans joined a credit union.

The flood of new members last year was fueled by the November 2011 Bank Transfer Day movement, when troubled bank depositors fled the high fees charged by big banks for lower-cost alternatives. (Credit Union Journal, Feb. 13)

[related: Virginia-Based Credit Unions Have Record-Setting Performance for 3rd Quarter 2012]

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CUs Help As Study Says Nation Struggles To Save

While many credit unions are assisting a nation that still struggles to save, a new study points out why it is necessary to keep educating overly optimistic consumers about managing their finances and making saving a life-long habit.

Credit unions help consumers in many ways: with better savings rates, lower interest rates on loans, short-term loan alternatives to payday lending, special programs such as savings lotteries, contests, affordable mortgages, and providing business loans to new entrepreneurs, to name a few.

But most of all, they stand out in member-centric financial education. Americans are treading water and need financial management skills, according to the second Allstate Life Tracks Poll by Allstate Financial.

Half of Americans surveyed have money left over after paying for essentials each month, but more than 41% live paycheck to paycheck. Another 8% don't earn enough to pay for essentials. Consumers' debt is increasing, said the report. Sixty-five percent of Americans with credit card debt say their debt level has increased or remained the same in the past year.

Of those surveyed, 49% pay credit card debt; 43% pay mortgage payments; 36%, car payments; 17%, student loans; and 15%, medical debts. Of the 51% who are expecting tax refunds this year, 45% intend to pay off debt with the refund.

[read more]

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Governmental Affairs News

100% for VACUPAC

Petersburg Federal Reformatory Credit Union has 100% VACUPAC pin participation from Board, Supervisory Committee and staff. Many thanks to the credit union for its support of the Virginia Credit Union Political Action Committee (VACUPAC).

VACUPAC is the political action committee for the Virginia credit union system, collecting contributions from supporters that are then used to support candidates for political office who believe in credit unions and our mission. A contribution of at least $25 earns the individual contributor a VACUPAC pin.

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Warner, Warren Looking to Aid Consumers in Correcting Credit Report Errors

Sens. Mark Warner (D-Va.) and Elizabeth Warren (D-Mass.) say they will ask the FTC and Consumer Financial Protection Bureau to provide recommendations on ways to aid consumers in correcting credit report errors.

A new Federal Trade Commission study reveals that more than 20 percent of consumers found errors in the information compiled about them by the three major credit bureaus.

Alarmingly, five percent of consumers found mistakes that were significant enough to result in higher costs for loans and insurance. And, in too many cases, the Consumer Financial Protection Bureau has found that correcting the record is a cumbersome process that costs consumers both time and money.

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Eight States Seek To Join Lawsuit Challenging Key Provisions Of Dodd-Frank

Eight states filed a motion asking a federal district court to allow them to join a lawsuit that challenges the constitutionality of the Dodd-Frank Wall Street Reform Act, particularly the formation of the Consumer Financial Protection Bureau  (CFPB) and Financial Stability Oversight Council (FSOC) and the establishment of their Orderly Liquidation Authority, which allows the government to liquidate the largest banks if they failed.

The addition will bring the total of states involved in the lawsuit to 11.

 [read more]

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Financial Services/Marketplace News

Mortgage Applications Continue to Sink

Mortgage applications continued to sink, dropping 1.7% from last week according to data from the Mortgage Bankers Association. Following the rise from previous weeks, the average interest rate for a 30-year fixed-rate mortgage with a conforming loan balance rose to 3.78%, the highest rate since August 2012. This is up from 3.75% from a week earlier.

Additionally, the 30-year FRM with a jumbo loan balance dropped from 3.98% to 3.94%, while the 30-year FRM backed by the FHA increased to 3.54% from 3.53% the week before. The 15-year, FRM increased from 3.01% to 3.03%, which is the highest rate since September 2012. The average 5/1 ARM remained unchanged from the decline last week and stayed at 2.66%.

[read more]

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Housing Recovery Momentum Continues to Build

Momentum continues to grow in a snowball effect manner, with housing prices rising to a two-year high in December, according to the latest FNC report. Battling a deceleration in economic growth, the housing recovery maintained a steady pace, shooting FNC’s residential price index up 5.4% year to date.

The recovery of the underlying property values is strongly influenced by a stabilizing foreclosure market. While many markets that were hardest hit still face challenges, there are signs that foreclosure prices have bottomed out.

[read more]
[related: Why Some Homeowners are Turning Down Free Money]

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Education & Networking Opportunities

Feb. 26 Webinar: Guidelines for OREO

Financial regulators are reviewing your institution’s Other Real Estate Owned (OREO) policies and procedures during safety and soundness examinations.

They expect management to have developed an OREO policy that provides guidelines for acquiring, holding, and disposing of OREO in accordance with credit union regulations and guidance statements, instructions for preparation of the call report, as well as compliance with generally-accepted accounting principles.

Our informative Feb. 26 webinar is directed to senior management including CEOs, CFOs, as well as treasurers, risk managers, auditors, loan review personnel, and anyone responsible for analyzing and documenting OREO transactions.

[read more]

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Feb. 27 Webinar: Advanced Collection Techniques That Reduce Delinquency, Loss

The recession has affected most Americans and impaired many consumers’ ability to repay their debts. Many borrowers are having difficulty keeping payments current or have simply given up.

These conditions have had a dramatic impact on financial institutions’ delinquencies, charge-offs, and losses – which has put increased pressure on collection staff. It’s possible that 2013 could be the most difficult year ever to collect delinquent accounts.

Financial institutions must find proactive ways to collect delinquent accounts, retain loyal borrowers, and minimize losses. Join us Feb. 27 to learn advanced collection techniques that focus on tools and methodologies to effectively identify how to reduce delinquency, avoid loss, and maintain borrowers’ loyalty.

[learn more]

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Save The Date: Spring Compliance Conference May 1-3 in Richmond

Details coming soon!

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Compliance Webinar March 13

Your League's Compliance Team will be hosting a free webinar on March 13 at 2:30 p.m. The webinar will cover the latest compliance hot topics. Register by emailing compliance@vacul.org.

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News From Credit Unions

Freedom First Rebranding Effort Includes 'Blue Envelope' Campaign

Freedom First is pleased to announce its “Where People Bank for Good” initiative--a comprehensive rebranding effort that exemplifies the growing company’s ongoing commitment to investing its resources in programs, projects, and partnerships that benefit the entire community.

In addition to a new logo and message, almost 2,000 blue Freedom First-branded envelopes containing varying amounts of cash will begin appearing randomly at area businesses and street corners throughout the region, changing hands from one person to another in a small-scale demonstration of what the credit union does behind the scenes every day.

[read more]

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Chapter News

CUNA's Bill Cheney to Speak at March 14 NoVa Chapter Meeting

Credit Union National Association President/CEO Bill Cheney will be the featured guest speaker at the NoVa Chapter's March 14 meeting. Location: Marriott at Fair Oaks (11787 Lee Jackson Memorial Highway, Fairfax 22033). Time: 5:30 p.m. networking; 6 p.m. meeting; 6:30 p.m. dinner; and 7:30 p.m. speaker. Please RSVP by March 11 to pollardj@jfcu.org.

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Financial Education News

NCUA: CUs Can Educate During America Saves, Military Saves Week

Credit unions can educate members and their families about the importance of saving during this year's annual America Saves and Military Saves Week, Feb. 25-March 2, said National Credit Union Administration (NCUA) Chairman Debbie Matz Thursday.

"Having a savings account is the first step towards financial stability, but a recent study indicated a little more than 29% of America's households do not have a savings account," Matz said. "People need to learn more about how to save and have a place to save," she said. "This year's campaign is a perfect opportunity for credit unions to educate and empower their members and their families so they can balance their budgets, buy a home, or put money aside for their children's educations."

[read more]

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Marketing News

How Many Credit Union Staff are Credit Union Members?

How many of your credit union's staff, from front line customer service providers to back office analysts and information technology specialists, have a relationship with your credit union or another financial institution?

FactorTrust, a firm which aggregates data on financially underserved consumers, has found that fully 12% of workers in financial service firms, such as banks, credit unions and insurance firms, don't have relationships with a financial institution and remain, in fact, among the financially underserved.

[read more]

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Your Bank: Love It or Leave It?

An important relationship to evaluate is the one you have with your financial institution. That's because there's a good chance you're not satisfied. More than 70% of consumers say they would like to break up with their bank, according to a recent survey of 1,050 people by McGraw-Hill Federal Credit Union, which has 20,084 members worldwide and serves more than 120 companies.

Survey respondents cited high or hidden fees, lack of relevant products and services, and the belief that their bank doesn't listen, resolve issues or provide clarity as the top reasons for their dissatisfaction. In fact, more than one-third compared dealing with their "bank" to interacting with their in-laws, and another 30% likened their "bank" interactions to dealing with the cable guy. 

[read more]

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Visa Targets Underbanked with Mobile Money Technology

Visa's launch of a plug-and-play mobile money platform speaks to a rapidly maturing trend of using mobility to spread financial services to underbanked consumers and developing countries.

The new system allows Visa, which has been gradually building up to target underbanked consumers, to host and fully manage all aspects of a mobile money platform on behalf of the provider, including user interface design, consumer enrollment, transaction processing, authorization, clearing and settlement--targeting domestic or globally interoperable mobile money services. (American Banker Online, Feb. 14)

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Security/Fraud Prevention

NCUA Provides CUs With Cybersecurity Guidance

The National Credit Union Administration has stepped into Washington's cybersecurity discussion, identifying appropriate policies and procedures to guard against distributed denial-of-service (DDoS) attacks in a new credit union risk alert (13-Risk-01).

"The increasing frequency of cyber-terror attacks on depository institutions heightens the need for credit unions to maintain strong information security protocols," the notice said.

DDoS attacks are attempts to disrupt or suspend online service by saturating the target's network with external communication requests to overload its server. The NCUA letter noted that such attacks are sophisticated, requiring the vigilance of credit unions offering Internet-based financial services. [read more]
[related: Financial Industry Gives Obama's Cybersecurity Order Mostly Good Reviews]

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Technology News

Personalization Is Focus of Wells Fargo's New ATM Design

The new automated teller machine design Wells Fargo & Co. (WFC) announced Monday is meant to provide a more customized experience for customers, an executive at the bank says.

"I think what you'll see slightly different is that we have really customized the entire experience," says Alicia Moore, Wells' head of ATM banking. "We set favorites for customers, but in the new design we have really taken what customers have told us."

For instance, customers have asked for larger ATM buttons and faster performance. Wells Fargo, which creates all its own ATM software, formulated the new ATM features over the past two years in concert with its customers, Moore adds. "It's not just about putting colors together and putting a design together," she says. "It's about creating, and continuing to create, an experience."

As abstract as that sounds, the San Francisco bank's new ATM design shows an intense attention to detail. For instance, a YouTube video shows that every screen is personalized to the customer. There are options for emailed ATM receipts. There are also highlighted green transaction buttons that sit at the top of a person's ATM screen, indicating what folks are most likely to use the device for.  (American Banker Online, Feb. 20)

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