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CURRENT Newsletter | 14 March 2014

Mar 14, 2014 by Lewis Wood

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

March 14, 2014

Headline News

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Chapter News

League/CUNA News

Marketing News

Technology News

Headline News

Virginia-Based Credit Unions Donate $406,236 to CMN Hospitals in 2013; Surpass $2 Million in Donations Since 2003

Virginia-based credit unions donated a record $406,236 in 2013 to the Children's Miracle Network Hospitals serving the commonwealth. The state's credit union system also played a role in the $483,000 raised for the Washington, D.C.-based Children's National Medical Center through sponsorships and participation in the Credit Union Cherry Blossom Ten Mile Run, a popular foot race that credit unions nationwide use as a fundraising vehicle for their local CMN Hospitals.

"We are proud to partner with Children's Miracle Network Hospitals in support of their mission to provide the finest medical care and treatment for children and engage in research that is paving the way for new treatments and even cures for many life-threatening illnesses," said David Miles, chief operating officer for the Credit Unions Care Foundation of Virginia, a non-profit formed in 2009 by Virginia's credit union system to coordinate credit unions' charitable giving, community development efforts and education initiatives.

Since the start of the partnership with CMN Hospitals in 2003, Virginia-based credit unions have collectively donated $2,086,236 to the charity.

[read more]

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NCUA Reminds CUs of March Liquidity Compliance Deadline

The National Credit Union Administration has sent a reminder to credit unions that its new liquidity and contingency planning regulation will become effective March 31 (Letter to Credit Unions 14-CU-05). The NCUA letter includes a supervisory letter and examination questionnaire for examiners to use when reviewing liquidity risk management at credit unions.

These resources will give credit unions further insight into how the NCUA will examine for compliance, the agency said.

[read more]
[related: CUNA eGuide resource]

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Congress Supports Credit Union Cherry Blossom Ten Mile Run at Record Level

The number of members of Congress supporting the April 6 Credit Union Cherry Blossom Ten Mile Run has skyrocketed to a record breaking 210, representing 47 states, American Samoa, D.C. and Guam. Among the legislators are 37 U.S. Senators and Speaker John Boehner.

The Virginia delegation is well-represented on the list of honorary race chairs, with the following lawmakers signed on: Sens. Mark Warner and Tim Kaine, as well as Reps. Rob Wittman (R-1st), Scott Rigell (R-2nd), Robert Hurt (R-5th), Frank Wolf (R-10th) and Gerry Connolly (D-11th).

[read more]

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H.R. 4226, CU Residential Loan Parity Act, Introduced

Rep. Ed Royce (R-Calif.), as expected, introduced a credit union relief bill Thursday that would exempt loans for one- to four-unit non-occupied dwellings from the member business lending cap. The "Credit Union Residential Loan Parity Act"--now also known as H.R. 4226-- is co-sponsored by Rep. Jared Huffman (D-Calif.).

Royce unveiled his intention to introduce the MBL-related bill when he addressed the 4,400 credit union advocates attending the Credit Union National Association's Governmental Affairs Conference late last month. Royce has explained that his bill fixes a disparity between how credit unions and banks can account for certain loans.

"When a bank makes a loan to finance the purchase of a small apartment building it is called a residential real estate loan. When a credit union makes the same loan it is called a business loan," and thereby falls under the low 12.25%-of-assets MBL cap, Royce has noted.

He's estimated that enactment of his bill would allow credit unions to lend an estimated additional $11 billion to small businesses, and would free up "much needed private sector financing for commercial businesses and rental housing without costing taxpayers a dime."

[read more]

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Warren: Housing Reform Too Big an Issue to Rush Legislation

Sen. Elizabeth Warren, D-Mass., urged Banking Committee leaders Thursday to give the panel's members ample time to consider a pending bill to overhaul the housing finance system before bringing the legislation to a markup.

Committee Chairman Tim Johnson, D-S.D., and Mike Crapo, R-Idaho, the ranking member, announced an agreement earlier this week on legislation to wind down the government-sponsored enterprises Fannie Mae and Freddie Mac and replace them with a new government backstop for the secondary mortgage market. Legislative text for their plan, which is based on an earlier bill introduced last summer by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., is expected to be released as early as today.

The committee is reportedly aiming to bring the bill for a markup before the Senate departs for its spring recess on April 11. But Warren, a member of the committee who could prove to be a key vote in determining whether the bill reaches the Senate floor, advised Johnson and Crapo against rushing a markup until the committee has had time to engage in a "full, open discussion" on the proposal. Senate Banking Committee leaders are proposing to capitalize a new mortgage cooperative with a government loan to ensure small and even regional lenders can sell their loans for cash.

One of its key attributes in the Johnson-Crapo plan is the formation of a mortgage cooperative to help smaller institutions. While the committee has released few details on the structure of the cooperative, sources briefed on the matter have begun fleshing out some of the specifics. For example, they said the Johnson-Crapo bill will allow regional banks with up to $500 billion of assets to be members — a figure that includes all but the largest five banks in the country.

The details of the co-op are likely to be very important as the debate over the bill moves forward, industry representatives said. Some were quick to praise what they've heard so far, including the initial reliance on a government loan to fund the co-op's creation. (American Banker Online, March 13)

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CU PolicyPro Maintenance This Weekend

This weekend, CU PolicyPro will be unavailable for 36-48 hours for system maintenance.  Maintenance will begin at approximately 10 p.m. on Friday, March 14 and will continue through Sunday evening. The site will be up and running Monday morning. We apologize for any inconvenience this may cause. 

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Compliance/Regulatory Affairs News

McWatters Pledges 'Straightforward' Regulatory Approach

If confirmed, National Credit Union Administration board nominee J. Mark McWatters said he will "work diligently to ensure the continued integrity and safety and soundness of our nation's credit union system in an ever-evolving marketplace." McWatters made his remarks at yesterday's Senate Banking Committee nomination hearing. Committee Chairman Tim Johnson (D-S.D.) said McWatters will hit the ground running with an eagerness to learn more about credit unions.

He called for all nominees at today's hearing to be confirmed quickly. McWatters has served on the TARP Congressional Oversight Panel, as counsel for Rep. Jeb Hensarling (R-Texas), and as dean for graduate programs at Southern Methodist University's School of Law. If confirmed, McWatters would replace board member Michael Fryzel, whose term ended Aug. 2. Fryzel will continue to serve until McWatters is confirmed.

[read more]

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Governmental Affairs News

'Thankful Thursday' Continues CUs' Social Media Support of Tax Status

Credit unions and their members continue to contact federal lawmakers about preserving the credit union tax status--and this time it was to thank House Ways and Means Committee members for not touching credit unions in the committee's draft tax code reforms.

More than one-quarter of a million Twitter users were potentially exposed to the credit union message yesterday through the Credit Union National Association's latest social media blitz, "Thank You Thursday."  It was the latest innovation launched under CUNA's successful "DontTaxMyCreditUnion" campaign, which started in 2013.

[read more]

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Financial Services/Marketplace News

Consumer Sentiment Dips as People Fret about Future

Consumer sentiment dipped modestly in early March, entirely due to reduced expectations for the future, a survey said on Friday. The preliminary Thomson Reuters/University of Michigan overall index of consumer sentiment fell to 79.9 in March, down from the 81.6 final reading in February. That was below analyst expectations for a reading of 82 and the lowest level for that index since November.

[read more]

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Car Loans Surge at CUs as Buyers Reach for Longer Terms, Leases

For new-car buyers conforming to the growing trend in auto sales, it might be six years--or 72 months of car payments--before they own their vehicles outright. As USA Today reported Wednesday, consumers have been selecting lengthier lease terms at a higher clip lately, with six-year loans--or longer--jumping 19% in the fourth quarter, to about 20% of all new vehicle loans. Just last month about one-third of all new vehicle sales fell into the long-term loan category of 72 months or longer.

"Longer-term loans, coupled with the current low-interest rate environment, increases the affordability of new vehicles for consumers," said J.D. Power in a statement to ABA Banking Journal . "This is resulting in strong demand for new vehicles and also record transaction prices."

[read more]
[related: Why the DOJ Won’t Back Down on Auto Lenders]

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Education & Networking Opportunities

Spring Compliance Conference, Marketing Workshop Registration Now Open

Our popular Spring Compliance Conference takes place April 30-May 2 in Richmond, and this year features a companion Marketing Workshop (May 1). Topics include marketing compliance, foreclosures, auto loan collections, e-signatures and documents, intellectual property and patent law, and much more. Needless to say, a not-to-be-missed educational opportunity, priced right at $145 per day for days 1 and 2; $65 for day 3.

The Marketing and Business Development Council's Marketing By The Numbers Workshop features sessions on building better member relationships, cost-efficient branding and prototyping, and finding "member-friendly" fee income. Cost - $149.

[Spring Compliance Conference]
[Marketing By The Numbers]

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Annual Meeting Education Sessions Target Growth

This year's Annual Meeting features 20 education opportunities that will appeal to volunteer officials, management and staff. Among the sessions in the "Strategy Track:"

  • Boosting Non-Interest Income To Serve More Members, Increase Revenue & Improve Your Capital Ratio
  • View from the Trenches: Growth and Profitability Solutions for Smaller Credit Unions
  • The Biggest Opportunity For Credit Unions: The Hispanic Market

Learn more about these and our other sessions online here. Registration is open until March 28.
[register here]

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News From Credit Unions

VACU Offers Teacher Training March 27

Virginia Credit Union and the Virginia Credit Union League will offer a free training for public and private school educators on tools and instructional resources to teach the new state-required course in economics and personal finance for high school students. The Real Money Experience event will be held Thursday, March 27, from 8 a.m. – 3 p.m. at Virginia Credit Union, 7500 Boulder View Drive in the Boulders Office Park. There is no cost to attend, but space is limited.

Teachers who wish to attend must register online at https://www.vacu.org/Education_Resources/Seminars.aspx or call 804.323.6800. Pending local approval, teachers that complete the training may be eligible for up to six recertification points for professional development.

[read more]

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Chapter News

Tidewater Chapter Meets April 10

Tracy Marks, of Lender Select Mortgage, will offer a program of the Consumer Financial Protection Bureau and the current mortgage lending environment at the Tidewater Chapter's April 10 meeting. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, 23320). Time: 6 p.m. start. Cost: $35, if registered by April 2; $40 thereafter. RSVP to Ginnie Riddle at vriddle@bayportcu.org or by phone at 757.873.4047. 

[learn more]

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League/CUNA News

CUNA Launches Nationwide Search for New President/CEO

A national search for a new president/CEO of the Credit Union National Association will be launched immediately, the association's chairman said, to find a successor to Bill Cheney, who is returning to California in June to be president/CEO of SchoolsFirst Federal Credit Union in Santa Ana. CUNA Chairman Dennis Pierce said the search would consider candidates from both inside and outside of the credit union movement.

[read more]

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Marketing News

More Consumers Take Mobile into Account When Switching Banks: Study

More and more consumers are deciding where to bank based on how enamored they are with the bank's mobile offerings, according to a new report from AlixPartners. The AlixPartners Mobile Financial Services Tracking Study conducted in the fourth quarter found that up to 60% of smartphone and tablet users who switched primary banks said mobile banking capabilities were "important" or "extremely important" in their decision.

Asked the same question earlier in 2013, 48% of consumers who switched banks said that mobile capability was a determining factor. The results illustrate just how quickly U.S. consumers are embracing mobile banking, the global business-advisory firm said in a press release. Currently 28% of U.S. banking consumers use mobile banking, up four percentage from the previous quarter, and nine percentage points from the fourth quarter survey of 2012.

"Mobile is now mainstream," said Teresa Epperson, managing director in the financial services practice at AlixPartners, adding that she expects consumers' migration to mobile to continue. The report also found that remote deposit capture adoption is growing steadily among smartphone or tablet owners of all ages, up to 22%, from 18% in early 2013. (American Banker Online, March 13)

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Technology News

Missed Alarms and 40 Million Stolen Credit Card Numbers: How Target Blew It

The biggest retail hack in U.S. history wasn’t particularly inventive, nor did it appear destined for success. In the days prior to Thanksgiving 2013, someone installed malware in Target’s security and payments system designed to steal every credit card used at the company’s 1,797 U.S. stores.

At the critical moment—when the Christmas gifts had been scanned and bagged and the cashier asked for a swipe—the malware would step in, capture the shopper’s credit card number, and store it on a Target server commandeered by the hackers.

[read more]

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