News and Information For and About Virginia's Credit Unions
July 11, 2013
- Your comments and submissions are always welcomed. E-mail firstname.lastname@example.org
- Registration Open for Our Sept. 25 Legislative Leadership Forum
- Overdraft Price Study: CUs Still the Best Deal
- Congressmen Support Tax Exemption
- Aid Our Advocacy Mission: Report Your Micro-Lending Initiatives
- Help Us Improve Our Communication With Your Credit Union!
News About Credit Unions
- Sequestered: NCUA Economist Expects Some Loan Growth Impact
- Consumer Borrowing Surges In May, Credit Up At CUs
- TruStage™ Announces FastApply AD&D™
- Which Credit Unions Lead the Nation in Credit Card Penetration?
Compliance/Regulatory Affairs News
- Readiness Guide For CFPB Mortgage Rules Available Now
- NCUA, Agencies Propose Mortgage Appraisal Exemption
- CUNA Analysis Covers NCUA Loan Participation Rule
Governmental Affairs News
Financial Services/Marketplace News
- Push to Ban Credit Card Surcharges Sputters
- Debit Study: Interchange Rule Affected Regulated, Exempt Issuers
- The Battle for the Bank Account: And Why the Banks Will Probably Lose
- First Look: Moven Bank's Online Application
- Small Banks Overlook Wealth Management Opportunity with Women
- Are Millennials Less Materialistic or Just Cash Poor?
- Credit Card Delinquencies Lowest Since 1990
- Mortgage Lending Loosens in June
- Housing Market Conditions Are Better Than Last Year
Education & Networking Opportunities
News From Credit Unions
- Virginia-Based CUs Capture Golden Mirror Marketing Awards
- Morgan Takes Helm at Martinsville DuPont CU
- Member One FCU Excited to Announce New Real Estate Center
- Langley Federal Credit Union Announces Staff Additions
- Central Virginia Chapter to Hold Annual Meeting July 18
- Want to Play Some Golf for a Good Cause? Events This Month in Tidewater, Richmond!
- Southside Chapter Golf Tournament Tees Off Sept. 13
- Facebook's 'Graph' Could Be a Data Goldmine for FIs
- Amex Pushes Alerts to Cardholders' Facebook Pages
- CUs Should Act to De-Risk Social Media
This has been quite the year for political involvement! In Washington we have talk of our tax exemption in danger. On the state level, we have every House seat up for grabs, and election for all three statewide offices. Plus the League has re-launched our governmental affairs and VACUPAC programs.
To ensure our political advocates are up-to-date, and to hear what YOU have to say about advocacy practices and possible legislation for credit unions, the League is offering a free Legislative Leadership Forum. Come hear great speakers, including political commentator Dr. Bob Holsworth, our external lobbyists, and a vice president from the Credit Union National Association, and chime in yourself.
Did we mention it’s free? We will also toss in breakfast and lunch, on the house, and free parking in the garage of the building where we are holding the event. We are making it as easy and affordable for you as possible! Deadline to register is Sept. 10. We do require registration to aid in planning for meals.
> As part of the Forum, we're also sponsoring the 25th Annual VACUPAC Golf Classic on Sept. 24. You can register for the tournament and sponsorship opportunities online!
Use this link for all your VACUPAC golf needs: http://www.vacul.org/Education/League-Events-Calendar/VACUPAC-2013-Golf-Classic/
Details: Shotgun start at 1 p.m. at The Crossings golf course in Glen Allen. Sponsors: We need your support, since this is our biggest League-sponsored fundraiser for VACUPAC. You can sign up for a sponsorship at the same link. We have many sponsorship levels, and your support at any level is much appreciated. We already have our first sponsor: Virginia Credit Union has stepped up to be a tournament sponsor. Thank you Virginia CU! Deadline for player registration and sponsorship submissions is Sept. 10.
The national average price for overdrafts (ODs) on checking accounts rose to $30 as of June, matching the national average charged by banks the past four years. The cost of overdrafts has risen steadily since 2009, according to a new study, which shows credit unions again remain the best deal for consumers.
Credit unions' average for 2013 is $28, one dollar higher than in December 2012, but still considerably lower than what banks have charged the past five years studied, according to data from Moebs Services, a Chicago-area economic research firm specializing in financial services. Banks have charged an average $30 since 2010, when they increased the price from $29. Credit unions charged $25 from 2009 through 2011 before increasing the fees in 2012 to $27. [read more]
Earlier this week League President Rick Pillow attended a fundraiser for Del. Kathy Byron, a Lynchburg delegate who sits on House Commerce and Labor. Her special guest was Congressman Bob Goodlatte (R-6), who told Pillow that he supports the tax exempt status for credit unions. We also read in the Eastman Credit Union newsletter that Congressman Morgan Griffith came out in support of retaining credit unions’ federal tax status.
All good stuff, but let’s keep the messages coming so our federal lawmakers continue to stand by us as pressure builds during the tax reform debate! Go to www.donttaxmycreditunion.org to contact your congressman and our senators.
And ask other credit unions members to do the same. Virginia-based credit unions have generated 9,044 contacts to our Congressional delegation's offices in support of the credit union tax exemption!
Credit unions: We're again collecting your micro-loan data through our Reality Check survey. Basically, we're asking you to report information on loans you've made of $3,000 or less, excluding credit cards.
Please give us a hand and provide this data, which we use to support our advocacy efforts! Report your micro-loan data for the first six months of 2013 at this web address: Online Survey
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 email@example.com.
We have a downloadable version of the survey as well! (PDF, 267kb)
We use this information to produce our Impact Report, the latest version of which we've been distributing to lawmakers!
Your League wants to ensure we have up-to-date contact information for your employees who are responsible for various areas and departments within your credit union. We're working to establish email distribution lists based on certain areas of responsibility, like marketing, enabling us to disseminate relevant information to your credit union in a timely manner.
We know you're busy, so our hope, too, is that we're able to make communicating League information an easier and simpler process for you! You will find a brief survey online here: http://www.surveymonkey.com/s/CU_Contact_2013, or download the print version here: http://www.vacul.org/Media/Files/Contact-Form-2013.
And thank you for aiding us in this endeavor!
News About Credit Unions
Nearly 700,000 Department of Defense civilian employees began once-a-week furlough days Monday that will cut their pay by roughly 15%. NCUA Chief Economist John Worth said that over the next three months, it’s “reasonable to assume” the pay cuts will have an impact on loan growth at affected credit unions.
Worth said that while just less than 2% of federally chartered credit unions have primarily military-based fields-of-membership, their relatively large size means they represent about 21% of federal credit union assets. The 82 FCUs that claim a military common bond include the nation’s largest credit union, the $54 billion Navy Federal, and the third largest, the $16 billion Pentagon Federal Credit Union.
“I would expect weaker loan growth and potentially some transitory higher delinquencies, because we might have some people who haven’t effectively planned for this,” the NCUA economist said. “But, because these are furloughs, and not layoffs, that income will return in October.”
U.S. consumer credit in May surged by the biggest amount in a year, and borrowing in all areas at credit unions also increased, according to the Federal Reserve's Consumer Credit report released Monday. Overall borrowing increased $19.6 billion--following a $10.9 billion gain in April--to reach nearly $2.84 trillion, seasonally adjusted. Total revolving debt hit $856.5 billion--a $6.6 billion gain from 849.9 billion in April.
Total nonrevolving debt--which comprises student and auto loans but not real estate loans--increased $13 billion to nearly $1.93 trillion in May. At credit unions, members borrowed $252.8 billion in May, up from $251.2 billion in April and $231.2 billion at the end of the second quarter, not seasonally adjusted.
TruStage TM is making it fast and easy for credit unions to reach as many as 43 million credit union members who are eligible for their complimentary accidental death and dismemberment (AD&D) insurance coverage. In three minutes or less, members can apply for this no-cost benefit through TruStage’s new FastApply AD&DTM -- entirely online.
According to the July 2012 “Death in the United States” report from the Centers for Disease Control and Prevention, accidents are the leading cause of death in the U.S. for people 44 and younger and accidents claim a life every four minutes, TruStage has made it easier for credit union members to take advantage of this coverage, which is paid for by their credit union.
Two Virginia-based credit unions rank in the Top 10 nationally in credit card penetration: NAPUS Federal Credit Union (No. 4) and Entrust Financial Credit Union (No. 5). Credit card penetration helps credit unions measure the percentage of members that have credit card loans at the credit union. Credit card lending has increased at credit unions as consumer spending and income have risen consistently over the past year.
Nationally, the credit card penetration rate is 15.3%, up 55 basis points from the previous year and 95 basis points higher than five years ago.
Compliance/Regulatory Affairs News
Credit unions and other mortgage lenders got some help recently as they work to meet all the Consumer Financial Protection Bureau's new mortgage rules. The bureau on Monday released the first edition of its 2013 Dodd-Frank Mortgage Rules Readiness Guide, developed to help institutions of all sizes evaluate their readiness for the impending mortgage rule changes.
The guide provides high-level topics that institutions should consider as they implement these rule changes, the CFPB said.
Your League has prepared a tool to assist credit unions in determining which of the regulations are applicable to their operations and understanding what they must do to comply. To download the tool, visit our compliance homepage - http://www.vacul.org/Compliance/, log into our website with your League-issued password, then visit the VACUL Publications & Guidance page.
Loans of $25,000 or less, certain "streamlined" refinancings, and certain loans secured by manufactured housing would be exempted from Dodd-Frank Act appraisal requirements for higher-priced mortgage loans under a proposed rule released by the National Credit Union Administration and fellow regulators on Wednesday. Comments on the proposal will be accepted until Sept. 9.
However, the agencies said comments regarding a related Paperwork Reduction Act analysis will be due 60 days after the rule is published in the Federal Register.
The full details of the National Credit Union Administration's final rule on loan participations, which was approved at the agency's June open board meeting, are laid out in a new Credit Union National Association final rule analysis. The rule features many improvements suggested by CUNA.
Governmental Affairs News
Funding for the National Credit Union Administration's Community Development Revolving Loan Fund (CDRLF) program would total $500,000 in 2014 under the House Financial Services and General Government Appropriations bill, released Tuesday.
Funding for the Community Development Financial Institutions Fund and the Consumer Financial Protection Bureau are also addressed in the bill.
Financial Services/Marketplace News
In a setback for credit card issuers and a win for retailers, legislation that would bar merchants from charging customers to pay with plastic has stalled in about 15 states. The wave of state bills, which were introduced earlier this year, came in reaction to new rules from Visa and MasterCard that let merchants impose so-called checkout fees.
That concession by the two giant card networks was part of the proposed settlement of a lawsuit over the fees card companies charge merchants when consumers swipe their credit cards. The new rules essentially allow retailers to more directly pass on the cost of swipe fees to customers who use credit cards. But the state-level legislation would have effectively overturned, on a state-by-state basis, the impact of those rule changes. The card industry quietly supported the bills, which they drew strong opposition from merchants.
Utah did impose a ban on credit card surcharges this year, but that law expires in a year, which will give Beehive State lawmakers a chance to revisit the issue in 2014. Similar bills stalled before the end of the legislative sessions in Arkansas, Hawaii, Illinois, Indiana, Kentucky, Maryland, Nevada, New Mexico, Rhode Island, South Carolina, Tennessee, Vermont, Washington and West Virginia. (American Banker Online, July 11)
Debit-card issuing financial institutions experienced continued growth in their debit business, but both regulated and exempt issuers saw decreases in their interchange revenues since regulations enforcing the Dodd-Frank Act capped that revenue, according to the 2013 Debit Issuer Study commissioned by PULSE. The cap on interchange rates reduced the debit interchange revenue for issuers with at least $10 billion in assets--the "regulated issuers."
The average rates declined by 59% for signature debit transactions--to 23 cents from 52 cents on average--and by 32% for PIN debit transactions--to 23 cents from 32 cents--since the regulations went into effect, the study found. Although "exempt issuers" with less than $10 billion in assets--which includes most card-issuing credit unions--are not directly subject to the interchange cap, they, too, have seen average interchange rates decline.
Exempt issuers in the study cited competitive dynamics as a cause of the two-cent decrease in their average rates for both signature and PIN debits, said PULSE's report. What's more, one in three exempt issuers in the study said they expect further declines in debit interchange.
Brett King, best-selling author, explores the end-game in the emergence of the mobile wallet and what it means for the humble "bank" account. With more than 60% of the world's population without a bank account, with the ubiquitous nature of mobile phone handsets and the increasingly pervasive pre-paid 'value store' - will traditional financial institutions still be able to compete?
Jim Bruene, of netbanker.com, offers a look at Moven Bank's online application, noting that other financial institutions could learn a thing or two. See details of the experience online.
Community banks are trying to figure out what women want -- in wealth management, anyway. A number of small banks have entered the wealth management business in recent years as they try to find new revenue sources amid low interest rates. They recognize that women now control a greater share of U.S. wealth -- even if they may fail to recognize when certain biases creep into their marketing.
"You would be missing a huge piece of your potential client base if you ignored the decision power already in play from women," says Renee Newman, wealth management director at the $9.3 billion-asset Sterling Savings Bank.
"There are more women in the workplace," says John Depman, national leader of regional and community banking at KPMG. "More women are breadwinners and more are controlling household finances. There's an increased need to address this customer base."
Roughly 40% of U.S. households with children under the age of 18 have a mother who is the sole or primary breadwinner, according to a study by the Pew Research Center. This is quadruple the proportion in 1960 and the highest ever recorded. Other research could serve to help banks tailor their marketing of wealth management services to women.
For instance: women are less confident than men about their knowledge of financial products and slightly more likely to use a financial advisor, according to a survey by Prudential. Just 20% of female breadwinners feel very well prepared to make wise financial decisions, highlighting an opportunity for financial institutions to better serve female clients, industry experts say. (American Banker Online, July 10)
Among the millennial-aged, frugal, purposeful living is in. And there are a number of studies that show they're not the only ones who feel this way. In a New York Times column posted June 14, Alina Tugend cites one of the most recent surveys, published by American Express in May, that found that more people these days claim to care less about acquiring money and material things and more about improving their relationships and health.
Tugend suggests that this latest crop of research could mean people really are moving away from consumerism and toward a more conscientious, less materialistic way of life. [read more]
Credit card holders are more responsible about paying their bills than they've been in more than 22 years. Delinquencies on bank-issued credit cards -- on accounts that were 30 days or more overdue -- fell to 2.41% in the first quarter of 2013, the lowest level since 1990, according to an American Bankers Association report released Tuesday.
Delinquencies in 10 other lending categories, ranging from car loans to personal loans, also shrunk during the quarter, according to the report.
Mortgage lending eased a bit in June, with credit becoming more widely available when compared to recent years, the Mortgage Bankers Association said. According to the MBA's Mortgage Credit Availability Index report, which analyzes data from AllRegsMarket Clarity product, the MCAI ticked up to an index score of 109.8 last month, growing almost 1% from 108.9 in May. The index evaluates credit scores, loan types, loan-to-value ratios to compute the score.
The May figure is well above the benchmark score of 100. Although mortgage credit availability increased from May to June, it trended relatively lower throughout 2012 and is close to levels seen in 2011, when the MBA first started releasing the index.
About 70 percent of a group of Virginia Realtors who participated in a survey say that housing market conditions were slightly or significantly better in the first quarter of this year, according to a report released Wednesday by the Federal Reserve Bank of Richmond. A similar share of respondents also indicated that the inventory of housing was very low or somewhat low, an improvement from a year earlier.
“These survey responses indicate that the housing market conditions have improved notably, compared to last year,” Richmond Fed regional economist Andy Bauer said in a statement.
Education & Networking Opportunities
The challenges of today's hyper-competitive business environment require collaborative leadership skills more now than ever before. Join us Sept. 10 for your League's Leadership Workshop -- a high-energy, fun and informative seminar offering invaluable skill-building in interpersonal relationships, managing difficult conversations, group problem-solving and decision-making.
Set in the context of peer-to-peer leadership, this seminar will define and shape your mandate for leadership and collaboration regardless of your formal or informal position of authority. [learn more]
Next week, we have three Webinars on tap:
- A Simple Guide to Asset Liability Management That Everyone Can Understand (July 16)
- Avoiding Loss at the Teller Line (July 17)
- Interagency Appraisal and Evaluation Guidelines: Including New Requirements Effective Jan. 18, 2014 (July 18)
News From Credit Unions
Credit Union Executives Society is pleased to announce the 2013 CUES Golden Mirror Awards winners. The Golden Mirror Awards are presented annually to individuals who exemplify marketing excellence in a variety of categories, including business development, digital marketing and social media. This year the GMA judges awarded 153 entries, including the following entries from Virginia-based credit unions:
- Award of Merit: Annual Reports
- Award of Merit: Staff Training Programs
- First Place: Direct Marketing
- Second Place: Direct Marketing
- Award of Merit: Coordinated Campaign
- Award of Merit: Digital Marketing
- Award of Merit: Direct Marketing
- First Place: Innovation
Member One FCU
- Second Place: Digital Marketing
- Second Place: Direct Marketing
- Award of Merit: Television
D. Lee Morgan has been named President/CEO at the $270 million Martinsville DuPont Credit Union. Morgan has 20 years of experience in the financial services industry, most recently leading Southeastern Federal Credit Union, a $177 million institution headquartered in Valdosta, Georgia.
Member One Federal Credit Union in Roanoke, Virginia, is proud to announce the new Real Estate Center located at the Main Office location in Downtown Roanoke. The new state-of-the-art Real Estate Center is phase-one of the renovations of Member One’s Administration Building. Employees, members and others in the community came out on June 27 for the Grand Opening to see the new space interior.
Langley Federal Credit Union is pleased to announce that Michael McNabb has been named as Vice President of Consumer Lending. McNabb will join the LFCU senior management team and report to the new SVP of Lending who will join Langley in mid-July. McNabb will be responsible to provide strategic direction for the entire consumer lending area.
Langley Federal Credit Union is also pleased to announce the addition of Gary Hudgins as Graphic Designer to the Marketing team, while Michelle Pierce has joined LFCU as the Branch Manager for the Chesapeake Office.
The Central Virginia Chapter will host its Annual Meeting on July 18. On the agenda is the election of the Chapter's Governing Board. Time: 6 p.m. dinner; 6:30 p.m. business meeting. Location: Hampton Inn (Fishersville).
View the meeting announcement flyer. (pdf, 77kb)
Two of our chapters are sponsoring charity golf tournaments this month and you're invited to participate! The Tidewater Chapter event tees off July 26; the Richmond Chapter event is July 29. Both tournaments are raising funds for their local Children's Miracle Network Hospital.
The Southside Chapter will hold its 7th Annual Golf Tournament on Sept. 13. Proceeds will benefit Children's Miracle Network Hospitals and the Virginia Credit Union Political Action Committee (VACUPAC). Last year was a TERRIFIC event! Thanks to the tremendous support the Chapter received, it raised over $15,000 to support Children’s Miracle Network and VACUPAC.
We’re hoping to top that number this year! A special thanks goes out to our returning Platinum Event Sponsor, CUNA Mutual Group, as well as our Gold Sponsor,PW Campbell. Location: Cardinal Golf Course, Fort Lee. Registration and sign-in begin at 10:30 a.m. with a shotgun start at 12:30 p.m. Captain's Choice format.
Facebook's new search tool, Graph, could eventually be a treasure trove for financial institutions. The engine could be used to pair sales reps with prospects that have shared interests. Facebook's Graph APIcould help a FI meet Know Your Customer requirements before opening an account (in combination with traditional data sources).
The tool could help FIs target new members/customers who are already friends of existing patrons.
In a pioneering social media move that financial institutions could emulate, American Express is offering customers the option of receiving statement information via Facebook. The New York credit card company told its cardholders in an email Tuesday that they can sign up for a service that links their Amex accounts to their Facebook account.
After signing up, customers will receive notifications in Facebook when their statement is ready, when they need to make a payment and when that payment has been received. (American Banker Online, July 10)
Credit unions should implement policies and procedures to protect themselves against possible liability related to their use and their employees' use of social media, said attorney Kevin Funnell of Bieging Shapiro & Barber LLP at a Discovery Breakout Session during the 2013 America's Credit Union Conference. Some legal risks when a financial institution markets to a member/customer through social media include:
- Deceptive advertising;
- Intellectual property infringement/plagiarism;
- Defamation/trade libel;
- Disclosure of trade secrets or private information; and
- Is it a conversation or advertising?
Legal risks when an employee uses a financial institution's social media include:
- Leaking confidential information;
- Committing defamation;
- Admissions against the financial institution's interest;
- Binding the financial institution to a promise;
- Legal and regulatory violations;
- Inability to regulate communication; and
- Reputational risk.
Credit unions and financial institutions need to have clear internal written policies regarding copyright infringement, defamation, trade libel, use of non-public personal information and dishonesty (deceptive trade practices). "The key is to enforce policies consistently" to avoid any legal problems regarding unfairness of their application, Funnell said.
A couple big of Community Involvement events are just around the corner! Next week, the annualAnthem LemonAid Campaign kicks off, with credit unions in Richmond and Greater Hampton Roads participating. There's still time to sign up for physical and virtual LemonAid stands!
Miracle Jeans Day 2013 is scheduled for Sept. 18 (or a day of your choosing). Go casual for a good cause! Awesome new T-shirt design this year...Check it out.
And don't forget: We're again partnering with our friends at Kings Dominion and Carowinds to offer discounted, good-any-day tickets to the Richmond and Charlotte, North Carolina theme parks, with $1 of each redeemed ticket being donated back to Children's Miracle Network Hospitals.