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CURRENT Newsletter | 20 December 2013

Dec 20, 2013 by Lewis Wood

News For and About Virginia's Credit Union System

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

News From Credit Unions

Chapter News

News About The Competition

Headline News

League Issues Operations Releases on Fixed Asset Regs, Liquidity Funding, CUSOs

Your League has issued three new operations releases to guide you through upcoming changes: Operations Release No. 282: NCUA Amends Fixed-Assets Regulation; Operations Release No. 283: New NCUA Regulation on Liquidity and Contingency Funding; and Operations Release No. 284: NCUA Amends Its CUSO Regulation.

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League Thanks CUNA Mutual Group for Support, Commitment to Credit Union Movement

In today's hyper-competitive business world, you need partners you can trust. For more than 75 years, CUNA Mutual Group has worked tirelessly to deliver product and service solutions that meet the unique challenges and needs of credit unions and their members. Their vision has been unwavering: to be a trusted business partner that delivers service excellence with customer- and member-focus , coupled with best-in-class products and market-driven innovation.

CUNA Mutual Group shares your League's commitment to the success of your individual credit union, as well as the system as a whole. Your use of CUNA Mutual Group's products and services provides your League the opportunity to share in a pool of marketing dollars set aside for state Leagues. If not for this financial commitment to preserving the credit union system, your League dues would be significantly higher.

In fact, CUNA Mutual Group contributed more than $39 million to credit union organizations last year, including sponsorship of almost every major League initiative -- from our Annual Meeting to the recent Quit The Hit statewide awareness campaign to The Credit Union House of Virginia.

But beyond their financial commitment, CUNA Mutual Group must be praised for its people. Our interactions with organizations are often through the people they employ. CUNA Mutual is indeed fortunate to have caring and compassionate people dedicated to the success of the credit unions they serve. They understand their success is dependent on doing the right thing for the credit unions they serve and the Leagues with which they partner.

As the organization begins a leadership transition from the retiring Jeff Post to Bob Trunzo, we know the service excellence and innovation for which CUNA Mutual Group is known will continue. Jeff did an exemplary job guiding CUNA Mutual Group through extremely challenging times for credit unions, and we thank him for his service. The Recession brought CUNA Mutual Group its share of challenges as well, but Jeff and his team's commitment to the success of the credit union system never faltered.

CUNA Mutual Group finds itself in good hands as Bob transitions in January to his new role as President/CEO. He knows the organization and credit unions, and believes passion, integrity, courage, focus, innovation and collaboration must continue to be the values that drive and guide CUNA Mutual Group.

The New Year will hold its share of opportunities and challenges for credit unions, but rest assured CUNA Mutual Group and your League are always in your corner, ready to serve and support you and your members!

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CUNA Extends Exam Survey Deadline

The Credit Union National Association will let neither rain nor snow nor holiday dishes nor the late timing of a credit union's 2013 state or federal regulatory examination stand in the way of a credit union's desire to participate in the latest survey on experiences and impressions of the examination process. CUNA and the state credit union associations have extended the deadline for completion to Jan. 10.

"We are responding to credit union requests by pushing the deadline into the new year," said CUNA Chief Economist Bill Hampel Tuesday. "Credit unions want to tell their examinations stories via our survey, but some have not yet had their 2013 visit from examiners. They want to include their most recent experience in their survey responses--and that is information CUNA finds worth waiting for." Credit union responses may be completely anonymous.
[take the survey]

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Bills of Interest to CUs Filed Already for 2014 General Assembly Session

Some bills have been filed already for the 2014 General Assembly session. These are the bills we are tracking to date:

  • HB 12, R. Marshall: Patent infringement: creates a cause of action for damages and an injunction against a person threatening to bring legal action for alleged patent infringement. Sounds like Del. Marshall is catching the wave of the national debate on patent trolling.
  • HB 90, R. Marshall: Allows the governor to declare a state of emergency in response to a federal government shutdown. Would allow the governor to ask the Supreme Court to stop creditor process if it involves a federal employee.
  • HB 93, R. Krupicka: A prospective employee may not be asked if he has ever been arrested or charged with a crime unless the inquiry takes place after the prospective employee has received a conditional offer of employment.

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Target Data Breach Has Become a Card Data Fire Sale

Retail giant Target confirmed Thursday morning that the credit and debit card data of 40 million of its shoppers has been compromised. The company says the problem has been identified and resolved. But meanwhile, although there are no signs yet of actual fraud committed on these cards, the thieves are selling the card account information as fast as they can on underground sites, according to security blogger and expert Brian Krebs, who first broke this story Wednesday. 

In a statement, Minneapolis-based retailer Target reported that approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15 of this year. All 1,800 physical stores were affected. Target is partnering with a third-party forensics firm to conduct an investigation of the incident, it said.

Little is known yet about how the data was compromised. Now that the story has broken and issuers are thinking about cancelling the cards, the deadline pressure is on for the hackers. Card issuers could go into these underground forums and start buying up some of the cards to learn more about the theft, Krebs suggests. The price for the freshest card account data runs about $44 apiece. (American banker Online, Dec. 20)

[related: What to Do Next if You're a Target Card-Theft Victim]
[related: CUNA Working to Determine Impact of Target Breach on CUs]

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Annual Meeting 2014 Early-Bird Registration Underway

We're celebrating our 80th anniversary in grand style! Your League's 80th Annual Meeting is April 2-4, 2014, in Williamsburg. With 20-plus education sessions, keynotes from former CNBC economist Marci Rossell and corporate lobbyist-turned-comedian Mark Mayfield, plus a half-dozen networking opportunities, you can't afford to miss it!

Register now and save $50 off regular registration costs and take advantage of deep discounts at our host hotel, The Williamsburg Lodge.

[learn more]

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Sponsorship Opportunities for The Credit Union House of Virginia Announced

Speaking of Richmond...The leadership of all of our credit unions have been informed about sponsorship opportunities for The Credit Union House of Virginia. We're excited about the response to date, as we've raised almost $900,000 in sponsorship funds, but there's still plenty of opportunities for credit unions, chapters and even individuals to get involved.

Earlier this year, your League Board approved a plan to renovate buildings the League purchased in downtown Richmond. An important component of that plan is creation of a meeting and event facility that showcases the strength of the commonwealth's credit unions - The Credit Union House of Virginia. Learn how you can contribute here.

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News About Credit Unions

Credit Union Auto Loans Set to Cap Year Past $200 Billion Mark

Thanks to a number of favorable conditions for members, credit unions could see their total vehicle loan portfolio surpass $200 billion by the end of the year. The industry reached that mark at the end of October, according to CUNA Mutual Group’s December Credit Union Trends Report, which tracked data through October. Since October 2012, the $20.3 billion increase in vehicle loans held by credit unions has accounted for nearly 49% of all credit union loan growth, the report noted.

New vehicle loans were up 12% year-over-year through October. While this portfolio segment was up $12 billion or 21% from its early 2012 low, it remained almost $20 billion (22%) below its early 2007 peak, according to the trends report.

[read more]

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Low-Income Credit Unions Top 2,000 Mark; NCUA to Host Webinar Jan. 15

The number of credit unions nationwide carrying low-income designations has risen to more than 2,000, the National Credit Union Administration reported Thursday. The 2,002 NCUA-approved low-income credit unions (LICUs) hold a combined $176 billion in assets and have nearly 20 million members. They individually hold as many as $1 billion in assets. This LICU growth "could provide additional opportunities for investment in local economies," NCUA Chairman Debbie Matz said Thursday.

"These credit unions can promote greater financial security for their members by providing loans to support a small business, purchase a house or send family members to college," she added. To qualify as a LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data.
[read more]

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Compliance/Regulatory Affairs News

Obama to Nominate McWatters for NCUA Board

Mark McWatters will be President Barack Obama's pick to fill a National Credit Union Administration board seat when it is vacated by board member Michael Fryzel, whose term ended Aug. 2 this year. The president announced his intent to nominate McWatters today. To achieve the NCUA slot, McWatters will go through a process that includes a nomination hearing by the Senate Banking Committee and a confirmation vote by the full U.S. Senate. McWatters was a member of the TARP Congressional Oversight Panel in Washington, D.C. from December 2009 to April 2011. 

[read more]

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CFPB's Mind Already Made Up on Arbitration, FIs Charge

Banking groups fear the Consumer Financial Protection Bureau is already gearing up to write tough new rules restricting the use of arbitration clauses despite promises by agency officials that a study on the issue was only "preliminary" and not designed to pass judgment. The agency released a report Thursday that found arbitration clauses that lenders commonly put in contracts for credit cards and other products frequently disadvantage consumers.

Officially, the agency said only that the report indicated further study, but industry observers said the way the CFPB collected and presented the data — in addition to comments by CFPB Director Richard Cordray — signaled more definitive action is on the way. (American Banker Online, Dec. 13)

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Governmental Affairs News

VACUPAC Will Unveil New Pin in 2014

You asked for it, you got it. VACUPAC next year will offer a $52 contribution level recognized by a design unique among our other pins. Originally we had offered a $50 pin but that category was deleted when we revamped our suggested giving levels earlier this year. People said they wanted that level back, and we listened, adding a twist suggested by our Governmental Affairs Committee Chairman Mike Flanary.

The $52 pin represents a donation of $1 weekly to the only political action committee set up to support credit union allies on the state level.

[learn more]

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70 Attend Richmond Chapter's Legislative Breakfast

About 70 people attended the Richmond Chapter's annual legislative breakfast Thursday morning and heard House Majority Kirk Cox highlight legislative successes and continuing challenges.

[read more]

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Influential Speakers Keynote CUNA’s 2014 GAC

The CUNA Governmental Affairs Conference is the premier conference to attend for political impact, credit union networking and industry insights. This year’s keynote speakers include a recently announced major international figure, and Madeleine Albright, former Secretary of State of the United States. The 2014 GAC will take place Feb. 23-27 at the Washington Convention Center in Washington, D.C. For more information, visit gac.cuna.org.

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Financial Services/Marketplace News

US Growth Hits Fastest Stride in Nearly 2 Years in Q3

The U.S. economy grew at its fastest pace in almost two years in the third quarter while business spending was stronger than previously estimated, pointing to some underlying strength that should be sustained. Gross domestic product grew at a 4.1 percent annual rate instead of the 3.6 percent pace reported earlier this month, the Commerce Department said in its third estimate on Friday. That was the quickest pace since the fourth quarter of 2011 and beat economists' expectations for an unrevised 3.6 percent rate.

[read more]
[related: Economy Grew At Brisk Pace In Third Quarter]

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'Far From Over': Retailers Renew Swipe Fee Battle in Appeals Court

The docket at the U.S Second Circuit Court of Appeals quickly attracted appeals to Judge John Gleeson's Dec. 13 ruling to approve the class-action swipe-fee settlement on an antitrust case that has lingered in his court for nearly nine years.

Home Depot Inc. and the Constantine Cannon LLC law firm, representing various merchants, had filed appeals Friday in New York, not long after Gleeson's ruling, which, on the surface, would effectively put an end to merchants' claims of interchange price fixing and eliminate their ability to bring future legal action against the card brands.

Home Depot and other merchants sought to appeal the ruling in its preliminary stages a year ago, but the circuit court refused to expedite the appeal process until the settlement had received Gleeson's final approval. Gleeson's ruling last week allows merchants who did not opt out of the settlement to receive payment from a fund now valued at $5.7 billion, down from the original $7.25 billion proposal because fewer merchants stayed involved in the process. (American Banker Online, Dec. 20)

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Banks Should Disclose All College Marketing Pacts, CFPB Says

The Consumer Financial Protection Bureau wants financial institutions to publicly disclose their agreements with colleges and universities that allow them to market debit, prepaid and other retail products to students. The request, announced Tuesday, expands on previous requirements for financial institutions to disclose campus agreements related to credit card marketing. A 2009 law restricting credit card practices, known as the CARD Act, curtailed predatory credit card marketing to students. But the CFPB remains worried that other products like debit and prepaid cards, which were not included in the statutory reforms, can still be risky. (American Banker Online, Dec. 20)

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How E-Mortgages Are Changing the Bank Branch

Survey data show that by mid-year 2013, Internet-based mortgage sales in the U.S. increased 75% year-over-year, leading to a 16% decline in branch sales. Accenture's 2013 annual survey of 2,001 retail banking customers across the United States compares results of the same pool of respondents contacted in 2012. The research also shows mobile banking increased 50%. Together these changes are forcing banks to reconsider their retail branching strategies.

"Branches need to be re-imagined as one aspect of a radically new approach to consumers," says Mike Goodson, a managing director and head of management consulting for Accenture's North America banking practice.

Online banking, regardless of its specifics, represents an opportunity for banks to recover profitability and reduce costs as much as a chance "to establish a much more sustainable relationship with customers and better retention of market share into the future," he says. (American Banker Online, Dec. 20)

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News From Credit Unions

ABNB Raises Over $20,000 for Typhoon Haiyan Relief

ABNB Federal Credit Union has supported the efforts in aiding the Philippine typhoon relief by donating $21,492 to the American Red Cross. ABNB established a resource at its branch locations and electronically to allow individuals to donate to support this effort. For every dollar raised, ABNB matched all donations up to $20,000. 

[read more]

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Belvoir Federal and Elementary School Partner Ramp up Efforts for Financial Education

Belvoir Federal Credit Union and partner, Fort Belvoir Elementary School, ramped up efforts for financial education by kicking off a student-run credit union branch and introducing a financial education presentation to students, parents and faculty. The student run branch officially opened on Dec. 5, 2013 with 14 student tellers.

[read more]

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Belvoir Federal Provides Thanksgiving Dinner to Soldiers on Fort Belvoir

On Thanksgiving Day, Belvoir Federal Credit Union sponsored and provided a catered Thanksgiving dinner to 30 soldiers and 20 others who were not able to leave their post during the holiday season on Fort Belvoir. Belvoir Federal employees and their families arrived Thanksgiving evening to serve a delicious holiday dinner, including turkey, ham, mashed potatoes, traditional stuffing, vegetables, macaroni and cheese, rolls, and assorted desserts, on Thanksgiving evening.

[read more]

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Northern Star Helps Provide Christmas to Local Victims of Domestic Violence

Northern Star Credit Union has made a $3,000 corporate contribution to the H.E.R. Shelter’s Annual Silent Nights campaign fund.  This contribution celebrates over 10 years of support for the shelter by Northern Star Credit Union and is used by the H.E.R. Shelter to provide Christmas dinners and presents for their residents, in addition to any other financial need directly supporting Hampton Roads victims of domestic violence.

[read more]

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Justice FCU Offers Special 0% APR on All VISA Purchases to Ease Expenses for Members this Holiday Season

This holiday season Justice Federal Credit Union is providing members with “a little more jingle to enjoy” in the form of a 0% annual percentage rate on all VISA Credit Card purchases through Jan. 31, 2014. Members will have until May 1, 2014 before the annual percentage rate reverts to their cards current terms and conditions. “Our No. 1 concern is with our members and their families. We realize the financial consequences of the recent Federal Government shutdown and ongoing sequestration orders continue to be of genuine concern to the financial well-being of our members,” said Peter Sainato, President/CEO.

[read more]

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OFN, Citi Foundation Announce Class of 50 CDFI Professionals for 'Citi Leadership Program for Opportunity Finance'

Opportunity Finance Network (OFN) and the Citi Foundation recently announced the selection of 50 Community Development Financial Institution (CDFI) professionals to take part in the Citi Leadership Program for Opportunity Finance. Freedom First Credit Union’s Nicole Pendleton is one of the professionals selected for this program. The 10-month course begins in January. Nicole Pendleton, Community Development Analyst at Freedom First, was chosen from more than 120 applicants nationwide. 

[read more]

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Chapter News

Southside Chapter's Seventh Annual Benefit Golf Tournament Raises Over $23,000

Southside Chapter of Virginia Credit Unions’ Fourth Annual Golf Tournament, held on Sept. 13, 2013, at the Cardinal Golf Course on Fort Lee, raised over $23,074 to support the Children’s Miracle Network of Richmond and the Virginia Credit Union Political Action Committee (VACUPAC).

[read more]

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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News About The Competition

Deposit-Account Fraud Cost Banks $1.7B Last Year

Banks lost $1.7 billion to deposit-account fraud, according to an American Bankers Association survey. Debit card fraud accounted for 54%, or $943 million, of the industry's fraud losses, according to the March-July 2013 survey of 145 banks with $6.2 trillion in total assets. Check fraud accounted for 37%, or $648 million. Online banking and electronic transactions fraud made up the remaining 9%, or $153 million, of losses. The damage could have been a lot worse, according to the survey.

Banks' preventative measures were said to have stopped $13 billion in potential fraud losses. Banks halted $7 billion in losses from check fraud, $5 billion from debit card fraud and $1 billion from other forms of fraud including online banking and Automated Clearing House payments. (American Banker Online, Dec. 20)

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