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CURRENT Newsletter | 11 July 2014

Jul 11, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

Chapter News

Marketing News

Security/Fraud Prevention

Technology News

Headline News

CU, League Reps Visit Estonia; Participate in Regional Credit Union Meetings

A delegation of credit union representatives from Virginia spent a week in Estonia recently as part of the Virginia League's partnership with its counterpart, the Estonian Union of Credit Cooperatives.

League President Rick Pillow led the delegation, which celebrated the launch of a software platform for clearing transactions and providing access for Estonia's small, but growing system of credit cooperatives to the central banking system in Eastern Europe. This has been the signature project of the partnership between credit unions in Virginia, credit cooperatives in Estonia and the World Council of Credit Unions (WOCCU).

The project was spearheaded by Baltic Shared Services, a company formed in 2010 to establish the clearing system. With such access, Estonia's credit cooperatives are better positioned to offer ATM and card services, and eventually expand into online banking. The Virginia League's service corporation is a majority stockholder in Baltic Shared Services.

"As cooperatives, we see it as our duty to ensure the credit union movement grows and prospers, and Virginia's credit union system is proud to partner with the World Council of Credit Unions in helping reestablish cooperative financial institutions in Estonia," said League President Rick Pillow.

[READ MORE]

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RBC Rule's Implementation Timeline Will Likely Change, Says Matz

The room was packed and the concerns were earnest at the National Credit Union Administration's Listening Session in Chicago Thursday. (A final NCUA listening session is scheduled for next week in Alexandria with League President Rick Pillow and Senior Vice President David Miles planning to attend.)

As expected, the primary topic of the day was the NCUA's proposed risk-based capital rule. NCUA board member Michael Fryzel helped open the meeting by reminding the more than 160 people in attendance that the current RBC rule is just a proposal, and that when it comes to changes, "everything is on the table."

"We want a rule that provides safety and soundness without unduly limiting credit union operations," he said. NCUA Chair Debbie Matz said both the Office of the Inspector General and the Government Accountability Office have pushed the NCUA to get an RBC system in place. 

"We are going forward with risk-based capital, but we will address the issues that have been identified," she said. Matz said the 18-month implementation period for the new rule will likely be changed.

[READ MORE]

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Registration Open for VACUPAC Golf Classic, Legislative Leadership Forum

Registration is now open for the 26th Annual VACUPAC Golf Classic (Sept. 30) and the League's Legislative Leadership Forum (Oct. 1). The Forum is free but we do ask that you register to aid us in planning for meals and meeting space. This year's Forum features a keynote by Bob Holsworth, nationally known political analyst, and state and federal legislative updates.

The VACUPAC Golf Tournament is our signature fundraising event in support of the Virginia Credit Union Political Action Committee, a non-partisan political action committee dedicated to the preservation and advancement of Virginia’s credit unions.

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Contribute to VACUPAC and (Possibly) Win $500!

Contribute to the Virginia Credit Union Political Action Committee (VACUPAC) for a chance to win $500!

VACUPAC is a non-partisan, voluntary effort to support political candidates who support credit unions and the issues that matter to us. A $500 winner will be randomly selected on Oct. 1 at the Legislative Forum. Credit union employees/volunteers who have contributed to VACUPAC on or before Sept. 15, 2014 get a chance to win! You need not be present to win!

[LEARN MORE]
[DOWNLOAD THE FLYER FOR DISPLAY AT YOUR CU]

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Credit Unions Care Foundation Helping Sponsor Anthem LemonAid Campaign; Last Chance for Your CU to Register

The Credit Unions Care Foundation of Virginia has contributed $10,000 to the Anthem LemonAid Campaign benefiting the Children's Miracle Network Hospitals in Richmond and Hampton Roads. On July 18-20, LemonAid stands will be springing up in both areas of the state in hopes of putting the squeeze on childhood cancer.

Each dollar raised during the campaign will be donated to Children's Hospital of the King's Daughters (Norfolk) and Children's Hospital of Richmond at VCU to help treat kids battling cancer. Credit unions in both areas are encouraged to participate in the campaign.

[READ MORE]

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Get Recognized for Your Good Works! Entries for Desjardins, Dora Maxwell and Louise Herring Awards Due July 28

The Desjardins, Dora Maxwell and Louise Herring awards are CUNA programs conducted through the state Leagues. The entries highlight the good that credit unions do and are useful in showing your members and communities that the “People Helping People” motto is not a phrase, but a genuine call to action in your day-to-day business. 

Both CUNA and the Leagues use the submitted entries to prepare, publish, and provide proof to media inquiries and our governmental officials that we are committed to our mission to serve our members.

Your award entry (whether it’s a winner or not), helps us demonstrate the Credit Union Difference to those who assume all financial institutions are alike. There are four award entry categories. Two are for financial education outreach (youth and adults); one is for community outreach (social responsibility); and one is for credit unions who adhere to credit union philosophy.

[DOWNLOAD THE ENTRY PACKET] (Entries due by July 28)

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News About Credit Unions

6 Graphs About The Online, Mobile Landscape at Credit Unions

The popularity of online mobile banking continues to grow. In a 2014 Trends in Consumer Mobility Report by Bank of America, 23% of survey respondents said they complete the majority of their banking transactions at a brick-and-mortal branch.

Nearly half, 47%, use either mobile or online channels as their primary method of banking. creditunions.com explores the online and mobile landscapes at credit unions.

[READ MORE

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Governmental Affairs News

House Democrats Unveil Alternative GSE Bill

Reps. John Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., introduced a new housing finance bill Thursday designed to provide an explicit government backstop for the market, while increasing private sector participation.

The three Democrats first highlighted their plan in January. Back then, lawmakers in both the House and Senate were actively debating a set of competing bills on a housing finance structure to replace government-sponsored enterprises Fannie Mae and Freddie Mac.

The fight over mortgage finance reform has since lost steam, especially after key senators opposed a bipartisan bill authored by Sens. Tim Johnson, D-S.D., and Michael Crapo, R-Idaho. Their bill passed the Senate Banking Committee, but failed to attract the overwhelming support likely needed to advance to the full Senate. But the three House lawmakers say there is still need for a plan that can bridge the ongoing political divide over how to reform the mortgage finance system.

"By maintaining a government guarantee, introducing private sector pricing and increased taxpayer protections, our legislation can bring both sides of the aisle together," Delaney said in a press release. "Neither side has a monopoly on good ideas and I look forward to working with my colleagues and stakeholder groups so that we can stabilize the housing finance market for decades to come."

Their bill would create an insurance program through Ginnie Mae to back the mortgage market. The private sector would take a 5% first-loss position on guaranteed mortgage-backed securities, with the remaining 95% shared between Ginnie Mae and a private reinsurer. (American Banker Online, July 11)

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Financial Services/Marketplace News

Wells Fargo is Lending its Mountain of Cash (in a Good Sign for Mortgage Lending)

Mortgage lending is back. In its second quarter earnings report Friday, Wells Fargo showed a solid jump in loan and deposit growth. The firm's loan ramp up is good news because it signals that the bank has confidence in the economy and that the housing market might be more robust than previously thought. As the largest mortgage lender in the country, economists often look to Wells Fargo's data as a bellwether for the real estate market.

[READ MORE]

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Consumer Delinquency Rates Keep Bouncing Along the Bottom

The percentage of U.S. consumers who are late on their loan payments remained at near-record lows in the first quarter, according to a new report by the American Bankers Association.

The delinquency rate on bank-issued credit cards fell to 2.44%, from 2.6% in the fourth quarter, while late payments on a composite index of eight types of closed-end loans rose to 1.63% from 1.59%, the ABA said.

After the fluctuations, the two rates were both just a few basis points above their all-time low levels. ABA Chief Economist James Chessen predicts that rates of late payments will continue to bounce along the bottom for some time, as consumers remain mindful of the damage that high debt levels caused during the Great Recession. (American Banker, July 10)

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More Virginians Than Ever are Stuck in Car Title Loans they Cannot Afford

The Virginia Bureau of Financial Institutions just published data about car title loans made in Virginia in 2013 and it isn’t pretty.

Among the findings: there has been a 23% increase in car title loan stores:  from 395 to 489.  The number of loans has increased more than 10%: from 161,264 to 177,775. More than 17,000 Virginians had their cars taken by car title lenders and many of those people lost their independence and their ability to work.

[READ MORE]

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Millennials: Super Savers or Dogged by Debt

Young consumers, depending on the survey, can provide a contradiction in financial terms. Millennials either are "super savers" with an eye on retirement or so dogged by debt that they don't know which way to turn. They are the digital do-it-yourself generation of "super savers," according to a study by the Transamerica Center for Retirement Studies.

That study offered a shocking tidbit: about 70% of millennials are starting to save for retirement either through employer-sponsored plans or outside the workplace. The median age they start saving is 22 years old, far younger than many baby boomers who started saving at a median age of 35 years old, according to the Transamerica Center study.

For research purposes, the report defines the millennial group as those born between 1979 and 1996.

But others say we cannot lose sight that Americans owe more than $1.2 trillion in student loans and many younger consumers are reluctant to spend. More than half of millennials say they are living paycheck-to-paycheck and are unable to save, according to a survey prepared for Wells Fargo. About 39% of millennials indicate that they feel overwhelmed with the current amount of debt they have to pay off.

[READ MORE]

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Education & Networking Opportunities

League Payments Workshop Aug. 13

The payments marketplace continues to evolve. Join us Aug. 13 in Richmond at your League’s Payments Workshop for an overview of the legislative, regulatory, legal, and market forces shaping payments.

[LEARN MORE]

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League Offers ‘Board Boot Camp’ Aug. 20

The pressure of being a credit union board member is increasing. Your League’s Aug. 20 Board Boot Camp will provide you the tools and resources to help you better understand the expectations of today’s board member.

Sessions will include Board Governance and Liability Issues, Volunteer Recruitment and Development, Internal Fraud, and Understanding Your Credit Union’s Financials.

[LEARN MORE]

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East Coast Marketing Conference Returns to Virginia Beach Sept. 25-26

The East Coast Marketing and Business Development Conference returns to Virginia Beach Sept. 25-26 for two full days of education and networking opportunities.

Topics include: Leveraging Your Credit Union's Competitive Advantage, Near-Future Tech Trends and Understanding Loyalty Drivers By Age Group. The Conference is being held in a brand new Hilton Garden Inn, a stone's throw from the ocean, the week of the Virginia Beach’s 41st Annual Neptune Festival.

[Download the Information Flyer]

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Chapter News

Roanoke Valley Chapter to Host July 30 'Family Night at the Ballpark'

Join the Roanoke Valley Chapter July 30 for a night of baseball action at Salem Memorial Baseball Stadium. Cost is $22 per person ($20 for kids ages 4 through 12). Picnic begins at 6 p.m.; game time is 7:05 p.m. Register by noon on July 25. 

[LEARN MORE]

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Tidewater Chapter Hosting 2nd Annual Charity Golf Challenge

Join the Tidewater Chapter Sept. 18 for its 2nd Annual Golf Challenge at Sewells Point Golf Course in Norfolk! Format will be four-man captain’s choice, with an entry fee of $125 per player.

Cost includes a continental breakfast, cart and greens fees, range balls, and cookout lunch. Shotgun start at 8 a.m. Proceeds will benefit Children’s Miracle Network Hospital. Sponsorships are also available, ranging from $250 to $1,000. Sponsorships open to credit unions and business partners!

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Marketing News

Connecticut Bank, Credit Union Join in Effort to Snag Millennials

A Connecticut bank is working with a credit union and a team of business school students to find ways to connect with millennials.

 Savings Bank of Danbury and Greylock Federal Credit Union are providing advisory services to the University of Connecticut's "Financial Accelerator Project," an initiative designed to improve understanding of how millennials interface with mobile banking. Fiserv, which has been eager to add more innovative apps to its app store, has also joined in to the effort, which recruited its first student researchers earlier this year.

The team participated in weekly meetings in recent months, where members tested hypotheses with Fiserv product managers and representatives from the bank and credit union. In particular, the team researched regional banks, finding that many lagged behind in the use of social media and data analytics, says Michael Maczka, one of the students who participated in the project.

"The project gave us the opportunity to do a deep dive into the banking software industry," adds Maczka, who recently accepted a position at eBay. "We did a lot of research in the first phase of the project and found that smaller regional banks face very different challenges than their nationwide counterparts."

"Millennials are the hardest for us to capture," says Kathleen Romagnano, president and chief executive of the $827 million-asset Savings Bank of Danbury. "They don't naturally gravitate towards banks the way customers of previous generations did. … They are the future generation that we want to get into banking early. We hope to have long-term relationships with them."

The business school students set out to find deficiencies in financial institutions' strategies, identifying plenty of gaps at smaller banks and credit unions. (American Banker Online, July 3)

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Security/Fraud Prevention

Latest ATM Scam is Heading to the U.S.

Using special devices to "skim" ATM data is an old trick, but advances in the technology is making them more dangerous than ever. The European ATM Security Team is warning about new skimmers that are almost impossible to detect with the naked eye, according to Krebs on Security. Thanks to a slimmed-down profile, the devices sit within the throat of an ATM card slot, capturing data when a consumer slides her card inside.

A spy camera then tapes the customer as she enters her PIN number on the keypad. Some older skimmers fit on top of the card-reader slot, obscuring the slot's flashing light and generally making them easier to detect for consumers on the lookout.

Several of the newer, almost invisible types have been found in European ATMs, although criminals are now being thwarted in those countries thanks to the rollout of so-called "chip and PIN" technology, which makes it harder to duplicate stolen cards. Because the U.S. is one of the last countries to move to the chip-and-PIN cards, the new skimmers are migrating the U.S., the report notes.

[READ MORE]

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Technology News

Pa. Credit Union Lets Members Access Accounts with a Fingerprint

Service 1st Federal Credit Union, in Danville, Pa., recently installed fingerprint scanners in its branches, to give members quick access to account records. "When our members 'give us the finger,' it's typically a good thing," says Service 1st Federal Credit Union's Chief Information Officer Jay Reed.

The $237 million CU offers the biometric authentication to its 23,500 members in eight branch locations. Fingerprint scanners are placed at teller windows. Once a member has enrolled his fingerprint, providing a driver's license for the initial authentication, the fingerprint scan can be used as the sole means of identity verification from that point on. (American Banker Online, July 10)

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