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CURRENT Newsletter | 10 January 2014

Jan 10, 2014 by Lewis Wood

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

Headline News

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Chapter News

Community Involvement

Marketing News

News About The Competition

Technology News

Headline News

Watt Delays Fannie and Freddie G-Fee Hikes

FHFA Director Mel Watt announced Wednesday he will delay planned increases to mortgage loan guarantee fees at Fannie Mae and Freddie Mac.

“The implications for mortgage credit availability and how these changes might interact with the new qualified mortgage standards could be significant,” said Watt, who was sworn into office on Monday. “I want to fully understand these implications before deciding whether to move forward with any adjustments to g-fee pricing,” he added. CUNA President/CEO Bill Cheney also released a statement lauding his trade association's advocacy efforts on the issue. "We urged FHFA not to go forward with fee increases and we are pleased to see that Director Watt has delayed any immediate increase on guaranteed home loan fees," he said.

[read more]
[related: Housing Reform Still a Concern in 2014, CUNA Notes]

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430 CUs Already Respond to Breach Survey: CUNA Wants More

The Credit Union National Association has already received 430 submissions to its recently released data breach impact survey, and CUNA continues to encourage credit unions to forward on their own information as it comes in.

Questions in the 14-item survey on the effects of the Target data breach include when credit unions were notified of the breach, how many of their cards were impacted by the breach, whether or not any of the affected cards were EMV cards, how much call volume has been affected by members asking about the Target breach, and whether credit unions have had to increase staffing as a result of the breach.

[read more]
[take the survey]

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Aid Our Advocacy Mission: Report Your Micro-Lending Initiatives

Credit unions: We're again collecting your micro-loan data through our Reality Check survey. We're asking you to report information on loans you've made of $3,000 or less, excluding credit cards, for Calendar Year 2013. Please give us a hand and provide this data, which we use to support our advocacy efforts! Report your aggregate micro-loan data at this web address: Online Survey

> 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 pr@vacul.org.
>> We have a downloadable version of the survey as well! (PDF, 267kb)

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Legislation Begins To Roll in for 2014 General Assembly Session

We’re starting to track legislation filed for the upcoming General Assembly session, which began Jan. 8. The League has no legislation this session (although we do have resolution in celebration of our 80th anniversary), and to date we have not seen any bills that we need to oppose.

[read more]

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Your League at the General Assembly

Senior Vice President David Miles reports that he attended the  Senate Republican Caucus Luncheon on Tuesday. He sat next to Sen. Steve Newman, who serves on the Senate Commerce and Labor Committee. Miles reports that Newman was interested in learning more about current financial services issues, such as Dodd-Frank on the federal level.

He also attended the first meeting of the House Commerce and Labor Committee, where Judge James Dimitri, of the State Corporation Commission, and Commissioner  Joe Face, of the Bureau of Financial Institutions, gave reports. 

UPDATED SCHEDULE OF CU DAYS

  • Jan. 21: Tidewater, Hampton Roads
  • Jan. 22: Central Virginia, Richmond, Roanoke Valley, Southwestern Va.
  • Jan. 23: Southside, Lynchburg, Piedmont
  • Feb. 5: NoVA

We have no big issues this session, but we are asking credit unions to provide the CU Day attendees with information showing how they demonstrate the CU Difference and how we still deserve our tax exemption. The League will provide scarves for legislators and a packet of general information on credit unions.

Please notify Karin Sherbin at ksherbin@vacul.org or 434.237.9626 of the headcount for your chapter’s CU Day group by next Tuesday.

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League Reps Attend Prayer Breakfast for Legislators

President Rick Pillow and Vice President for Public Relations Lewis Wood represented the League  Wednesday at the Commonwealth of Virginia Prayer Breakfast. This annual event is held the morning of the day that the General Assembly convenes. Pillow said the League was seated next to Del. Greg Habeeb, a past patron of our legislation and a member of the House Commerce and Labor Committee. Pillow also spoke with Del. Kathy Byron, who also is a past patron of our bills and is Vice Chairman of House Commerce and Labor. Pillow thanked Byron for serving as patron this session for the resolution congratulating the League on its 80th anniversary.

[read more]

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League Seeks Candidates for Board of Directors; Nominations Due By Jan. 27

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 2014, five board seats are open. Listed below are the positions slated for election:

  • Region II Director (Richmond and Southside Chapters) – Seat representing credit unions with less than $50 million in assets
  • Region II Director (Richmond and Southside Chapters) – Seat representing credit unions with $50 million or more in assets
  • Region III Director (Central Virginia and NoVA Chapters) – Seat representing credit unions with less than $50 million in assets
  • Two At-Large Director Seats

[learn more about the nomination process]

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Congressional Luncheon Feb. 26; Registration Now Open

Protect the credit union movement and promote our legislative agenda by attending the Feb. 26 Congressional Luncheon in Washington, D.C., held in conjunction with CUNA’s Governmental Affairs Conference.

[learn more and  register for the Luncheon]
[learn more and  register for the GAC]

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Latest Edition of The Advocate Available Online

The January edition of The Advocate – your League's governmental affairs newsletter -- is now available online.

Our latest edition features information on our 2013 Virginia Credit Union Political Action Committee (VACUPAC) fundraising efforts, for which we heartily congratulate three chapters for reaching or surpassing their VACUPAC goals last year: Southside, Richmond, and Hampton Roads. Also included is a preview of the General Assembly session, which convened Jan. 8.

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Credit Unions Care Foundation Offers CUs, Chapters Matching Funds on Charitable Fundraising Initiatives

The Credit Unions Care Foundation wants your credit union and Chapters (or groups of credit unions) to run their charitable donations through the Foundation. As an incentive, the Foundation will match 10% of your net proceeds, to as much as $2,500. In other words, here's a great opportunity to easily add as much as $2,500 to your charitable donations.

It's simple: you hold your fundraiser, send the Foundation a check for the net proceeds, and we'll in turn cut a check to your charity partner for that amount, plus 10% up to $2,500, which you can then present to your charity. Some restrictions do apply, although almost every (501)(c)(3) entity would qualify for the match. For additional details, contact David Miles at dmiles@vacul.org or R.B. Martin at rbmartin@vacul.org.

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Sweets for Sweethearts: Thanks for Your Support

Many thanks to the following credit unions for supporting our Sweets for Sweethearts/World's Finest Chocolate fundraiser this year! We've ordered 77 boxes of chocolate bars, which our credit unions will be selling in their lobbies to support Children's Miracle Network Hospitals. As soon as the candy bars arrive at the League (week of Jan. 20), we'll work on distributing the candy to participating credit unions.

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MD|DC|VA Credit Unions Unite for Good to Promote Financial Fitness at the NBC4 Health & Fitness Expo

Maryland, the District of Columbia and Virginia credit unions; the MD|DC Credit Union Association and its D.C. and Suburban Maryland chapters; the Virginia Credit Union League; the Credit Union Foundation of MD and DC; the National Credit Union Foundation; SavvyMoney; and the Credit Union National Association join forces this weekend to create credit union awareness and encourage financial fitness at the NBC4 Health & Fitness Expo.

Credit unions are working cooperatively to encourage consumers to resolve to get financially fit in 2014.

[read more]

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Compliance/Regulatory Affairs News

NCUA Offers Jan. 22 Exam Modernization Webinar

Credit unions of all asset sizes may participate in a free, Jan. 22 National Credit Union Administration webinar designed to give participants a better understanding of new procedures related to Documents of Resolution and examination reports. The NCUA recently made changes to streamline and improve the consistency of the examination report process.

The changes, effective Jan. 1, are intended to improve the overall exam process by setting clearer expectations for credit unions and examiners.

[read more]

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Governmental Affairs News

Warner Proposes Prepaid Fee Disclosure Bill

Sen. Mark Warner, D-Va., introduced legislation Thursday that would require banks to provide greater transparency around prepaid card fees. The Prepaid Card Disclosure Act of 2014 would mandate that issuers provide consumers with a basic fee table listing possible charges before they purchase the card and that they clearly display a toll-free number and website on the card itself where consumers can access additional fee information.

The legislation comes as banks continue to increase their presence in the prepaid market, despite indications that the Consumer Financial Protection Bureau could step up its oversight later this year. (American Banker Online, Jan. 10)

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Brown, Others Stoke Fears of GAO Bias in 'Too Big to Fail' Report

Members of the Senate Banking Committee and others are raising concerns about the credibility of a pending watchdog report analyzing whether some banks are still "too big to fail," suggesting some experts it relies on may be too closely tied to Wall Street. The Government Accountability Office is due this spring to release the second of two reports examining the issue, with this one focused on providing an estimate of the implicit subsidies the biggest banks maintain from a market belief the government will rescue them.

While the report is highly anticipated, some are questioning its value ahead of the release, citing the influence some experts tied to the banking industry could have in determining how that analysis is conducted. (American Banker Online, Jan. 9)

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Financial Services/Marketplace News

2013 Ends with Weakest Job Growth in Years

Job growth slumped sharply in December, falling far short of expectations. The economy added only 74,000 jobs in December, according to the Department of Labor. This was the weakest month for job growth since January 2011 and came as a huge surprise to economists, who were expecting an addition of 193,000 jobs.

For all of 2013, the economy added 2.2 million jobs -- on par with 2012's gains. Meanwhile, the unemployment rate fell to 6.7% in December, but the drop came mainly from workers leaving the labor force.

[read more]

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Consumer Borrowing Up $12.3 Billion in November

Consumers increased their borrowing in November, led by continued gains in auto and student loans. The Federal Reserve says consumers increased their borrowing by $12.3 billion in November to a seasonally adjusted $3.09 trillion.

That is a record level and follows an October increase of $17.9 billion. Almost all of the November increase came from an $11.9 billion rise in borrowing for auto loans and student loans. [read more]

[related: Americans' Confidence in Economy Has Jumped Since Government Shutdown]

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Many Economists Foresee More Strong Job Gains

Some economists are raising their forecasts for Friday's government report on December employment after a private survey found the strongest business hiring in more than a year.

[read more]

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Outsiders Challenge the Status Quo in Auto Lending

Most Americans finance an automobile purchase today the same way they have for decades. They traipse over to the local car dealer, sit down with a salesman and, if they're savvy, haggle over loan terms. Now TrueCar, a startup that has already moved much of the car-shopping process online, is looking to remake the borrowing experience, too.

The Santa Monica, Calif.-based firm announced last month that it had raised $30 million, which it will use largely to build infrastructure that will enable consumers to arrange vehicle financing over the Web.

"What we're talking about doing is allowing the consumer to apply for the car loan or the lease while they're sitting at home," says Scott Painter, TrueCar's chief executive officer. "It's designed to basically take a lot of that work that normally would be done at the dealership and do it in advance." (American Banker Online, Jan. 9)

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Could 'Lifestyle Loans' Be Among Keys To Growth In 2014?

Could wedding rings, caskets and dentures be among the keys to credit union growth this year? Credit unions must do a better job of packaging "lifestyle loans" if they hope to grow in 2014 — including loans for things like weddings, funerals and even dental work, according to one consultant.

"All those credit unions making money on mortgages, that's kind of died," said Paul J. Lucas. "Now maybe there are going to be some purchases, maybe some HELOCs, but everything still comes back to retail lending. It's all about getting the car loans — which are real tough these days — and credit cards and other lifestyle personal loans." (Credit Union Journal, Jan. 9)

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Chapter News

Tidewater Chapter Meets Jan. 16

Raddon's Eric Wittekiend will be the featured guest speaker at the Tidewater Chapter's Jan. 16 meeting. He'll discuss key insights into improving your sales culture. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake. Time: 6 p.m. social; 6:30 p.m. dinner and meeting.

[learn more]

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Community Involvement

Deadline Jan. 24 for Submitting 2013 Donations to CMN Hospitals

If you have not already done so, please send in your Credit Unions for Kids (CMN Hospitals) fundraising dollars as soon as possible: Jan. 24 is the deadline. Simply submit this form (which includes mailing instructions) along with your fundraising check. Children’s Miracle Network Hospitals requests credit unions send their funds directly to the CMN Hospitals’ Corporate Accounting Department where an accounting team carefully reviews the form you send with your check, notes that the funds came from your credit union and records the type of fundraiser(s) you held.

Every single dollar you submit will be returned to your local hospitalfrom the corporate office on a quarterly basis along with a detailed report of the credit unions who submitted the funds.

THANK YOU for submitting the simple form (which includes mailing instructions) and your funds in a timely manner. Most importantly, on behalf of the kids treated at our local Children’s Miracle Network Hospitals, THANK YOU for supporting the kids in your community!

If you have questions about fund remittance, please do not hesitate to contact Joe Dearborn,CU4Kids Senior Director, CMN Hospitals at JDearborn@CMNHospitals.org.

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Marketing News

Biz Owners Would Switch Banks for Better Mobile Banking: Study

When it comes to wooing small business owners away from their financial institutions, many say they would switch for a superior mobile banking product. That’s according to The ath Power Small Business Banking Study from ath Power Consulting, a Boston-based financial services research and strategy firm.

The sixth annual study assessed thesmall business banking customer experience at banks nationwide. Credit unions were not included in the report. Based on more than 839 in-branch visits by small business owners at banks across the U.S, the data showed that 66% of the respondents would likely to switch banks for one with a superior mobile offering.

Conversely, despite its growing prevalence and importance to small business owners, 37% of bankers in the study failed to even mention their bank’s mobile offering, according to ath Power.

[read more]

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News About The Competition

Major Banks to Continue Making Interest-Only, Non-QM Loans

The nation's top banks will all continue making interest-only mortgages — primarily to wealthy borrowers — even though such loans do not conform to new mortgage regulations that take effect this week. The Consumer Financial Protection Bureau's qualified mortgage rule that goes into effect Friday requires that lenders document a borrower's ability to repay a loan.

But interest-only loans are excluded from being considered ultra-safe "qualified mortgages" because borrowers often face payment shock once they are required to start paying principal, typically after five to seven years of paying just interest.

Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC), have all said they will continue to originate and hold interest-only loans on their balance sheets. Such loans to high-net-worth borrowers tend to have very low default rates. (American Banker Online, Jan. 8)

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Technology News

5 Mobile Banking Trends to Watch in 2014

Just five years ago, mobile banking seemed futuristic, the stuff of sci-fi; but today, it has emerged as a must have, and also potentially, as a way for small credit unions to compete with big banks. A regional credit union can’t have hundreds of branches, but for smartphone carrying members, there is a branch in every pocket.  

That is the game-changing magic of the technology. Mobile banking continues to evolve. Here, experts pinpoint five ways mobile banking in 2014 is likely to be very different from what you had known.

[read more]

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