Login to View Full Member Content:

CURRENT Newsletter | 22 August 2013

Aug 22, 2013 by Lewis Wood

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

August 22, 2013

Headline News

News About Credit Unions 

Compliance/Regulatory Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Chapter News

Financial Education News

Marketing News

Community Involvement News

News About The Competition

Security/Fraud Prevention

Headline News

Fed to Appeal Interchange Ruling; Requests Stay Extension

Federal Reserve Board General Counsel Scott Alvarez on Wednesday said the Fed plans to appeal a recent district court decision that invalidated the agency's debit interchange fee rule. The U.S. District Court judge currently handling the case said that he would allow the status quo to be maintained for now.

Following the afternoon hearing, Credit Union National Association President/CEO Bill Cheney said CUNA is relieved to learn that the Fed is defending its rule.

"Although the Fed's rule is far from perfect for credit unions, the district court's decision compounds Durbin's already negative consequences and is the wrong result for consumers. We appreciate that the Fed is prepared to take this issue to the next level, and CUNA will do everything it can to ensure the D.C. Circuit Court of Appeals is aware of credit union concerns as the case moves forward," he added.

The Fed will also file a motion to expedite this appeal. An expedited appeal could bring the case to its conclusion within nine months to one year, litigators at the hearing said.

[read more]

> back to top

IRS Portal Brings Anti-Tax-Shelter Law FATCA Closer to Reality

This week, the Internal Revenue Service launched its new online registration system for American and foreign financial institutions that need to comply with the Foreign Account Tax Compliance Act. The new IRS system sends a clear signal to financial institutions: You have to sign up. The website, according to reports, was one of the final steps the IRS needed to take before the anti-tax evasion law takes effect in July 2014.

Passed at the beginning of this decade, FATCA is meant to curb tax evasion among U.S. residents using offshore accounts. While American regulators can't force foreign banks to comply with U.S. tax laws, they face reputational and business risks from working with tax cheats. In addition, U.S. institutions receiving funds transfers from overseas will have to withhold 30% of the cash for Americans who aren't following the rules.

[related: Will Congress Repeal FATCA Before It Takes Effect?]
[related: IRS FATCA Final Regulation Applicable to Non-U.S. & U.S. Credit Unions (WOCCU)]
[resource: World Council's Summary of the IRS FATCA Final Regulation]
[resource: CUNA's overview and comment letter on FATCA]

> back to top

Virginia-Based Credit Unions Report Reaching 21,000 Students With Lessons in Personal Finance Basics

Virginia-based credit unions reached 21,174 students during the 2012-2013 school year with lessons on personal finance basics. Educating young people about budgeting, the importance of saving for the future, and the wise use of credit has been a priority of Virginia's not-for-profit credit unions for decades.

The efforts of the commonwealth's credit unions were recognized recently by the National Youth Involvement Board, capturing the 6th place ranking nationally in number of students reached (21,174) and 7th place nationally in the number of classroom presentations conducted (499).

NYIB collects financial education data each school year from the nation's credit unions, asking credit union employees and volunteers to report the number of personal finance presentations made to students, the specific topics covered, and the number of students reached during each presentation.

"Few decisions affect us more directly than the ones we make about our money," notes UVA Community Credit Union's Rebecca Cardwell, chairwoman of the Credit Unions Care Foundation of Virginia's Financial Education Committee. "And as we've learned the past few years, financial illiteracy not only takes a terrible toll on the individual, it can also have a deep and lasting impact on our communities and society as a whole."

[read more]
[related: NYIB: CUs Educated 400,097 Students In 2012-13 School Year

> back to top

CU Advocate Meets with Rep. Frank Wolf

Fairfax County Federal Credit Union CEO Joe Thomas took advantage of the Congressional August recess to meet with Rep. Frank Wolf (R-10) on Monday. Wolf, a credit union member himself, co-sponsored the milestone Credit Union Membership Access Act (H.R. 1151) in 1998, demonstrated his usual caution when asked about supporting the credit union tax status if debate arises on the subject.

He noted his past credit union support, but said he would have to see legislation before re-affirming support for the credit union tax exemption.

[read more]

‘Don’t Tax My Credit Union’ Is Rocking

 With more than 700,000 contacts made with Congress since mid-May when CUNA and the leagues launched our “Don’t Tax My Credit Union” campaign, it is clear that credit unions have embraced the effort to protect our tax exemption.

An important point about those numbers: These are the contacts we count that are delivered through the systems developed by CUNA and the Leagues. Contacts made directly by credit unions and their supporters to their lawmakers are not included.

There are likely thousands more contacts beyond the number we count. Meanwhile, credit unions are also taking to the Internet to express their support for the tax exemption: The number of “Don’t Tax My Credit Union” videos on YouTube is growing steadily.

> Here in Virginia, our contact tally stands at 16,135, so many thanks for your efforts! We hope you'll keep up the good work as we prepare for what promises to be an interesting stretch in Washington once Congress returns next month and gets back to a long agenda, including tax reform. Congressional leaders who head the tax-writing committees in both houses say they're committed to making reform happen, so our work to protect the credit union tax exemption must continue!

> back to top

News About Credit Unions 

CUNA Seeks Comment On NCUA Minority CU Preservation Program

Could the National Credit Union Administration's plan to create a Minority Depository Institution (MDI) Preservation Program have unintended consequences for credit unions? Could program requirements be modified to make the program more successful? Credit unions can answer these and other questions regarding the program in a new Credit Union National Association comment call.

The comment call follows the agency's July 25 release of an Interpretive Ruling and Policy Statement (IRPS 13-1) that lays out the design of a potential MDI Preservation Program, and its eligibility criteria, initiatives and benefits. Under the program, credit unions with high percentages (50% and above) of minority members and management would be eligible to receive minority credit union status from the agency.

This status would grant them access to NCUA Office of Small Credit Union Initiatives resources, including grant program eligibility. The goal of the program, which is mandated by the Dodd-Frank Act, is to promote and preserve minority ownership in the credit union industry. The program should not create any new burdens or requirements for credit unions. Comments are due to CUNA by Sept. 20.

[read more]

> back to top

Deloitte Warns Banks and Credit Unions to Change (While They Still Can)

Credit union and bank executives continue to be challenged to improve effectiveness of product & service pricing.  This certainly holds true as it applies to checking accounts – the staple of a banking relationship and the stepping-stone to a deeper banking relationship. Although many surveys seem to indicate that the vast majority of consumers hold a negative view of Banks and Credit Unions (FIs) and their practices, the reality of consumers’ actions are very different. More interesting, very few consumers are willing to change behavior in any way to maintain their current level of pricing.

Just 40% are willing to exchange low fee structure for a digital banking plan wherein in-person services are limited in favor of digital channels, and all other pricing models fared even worse. Notably, consumers apparently want nothing to do with their bank’s or credit union’s social media sites, so much so, that just 22% would be willing to engage with direct compensation.

[read more]

> back to top

Compliance/Regulatory Affairs News

New Mortgage Exam Procedures Set Out By CFPB

Updated examination procedures for Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). The latest updates address exams for Ability-to-Repay/Qualified Mortgage, high-cost mortgage, and appraisals for higher-priced mortgage loans regulations. New amendments related to the escrows rule and credit card regulation changes are also covered in the exam procedure update.

The exam procedures, according to the CFPB, will help financial institutions and mortgage companies understand how they will be examined for CFPB rules that:

  • Require lenders to evaluate a borrower's ability to pay back a loan;
  • Ban or limit certain points, fees, and risky features;
  • Require servicers to provide monthly statements and disclosures;
  • Restrict dual-tracking;
  • Require access to servicing personnel and a fair review process; and
  • Require creditors use a licensed or certified appraiser.

The CFPB has now released exam procedures for mortgage origination rules issued through May 29 and mortgage servicing rules issued through July 10. More releases are planned. For more on the exam procedures, view the CFPB Release.

[related: CFPB Slams Mortgage Servicers Over 'Sloppy' Tactics] (American Banker Online, Aug. 22) (subscription may be required)
[related: CFPB Says Mortgage Servicing Still Riddled with Problems]

> back to top

Small-Entity Compliance Guide Available For CFPB QM/ATR Rule

The Consumer Financial Protection Bureau last Wednesday updated its small entity compliance guide for the Ability-to-Repay and Qualified Mortgage (ATR/QM) rule to incorporate clarifications and amendments to the ATR/QM rule issued on May 29 and July 10. Changes made in the May 29 amendments include:

  • The creation of a transitional period when small lenders can make balloon mortgage loans under certain conditions. These balloon mortgage loans would still qualify as QM loans; and
  • Extending QM status to held loans that are made by credit unions and community banks that have less than $2 billion in assets and make 500 or fewer first-lien mortgages annually, even if the borrower's debt-to-income ratio exceeds the rule's 43% QM threshold.

The July 10 amendments addressed servicing provisions, implementation dates for adjustable-rate mortgage servicing, exclusions from requirements on higher-priced mortgage loans, some small servicer exemptions, and other issues.
The QM rule is scheduled to go into effect January 2014.

[read more]

> back to top

Financial Services/Marketplace News

Consumer Sentiment Falls Back in August

After hitting a six-year high last month, consumers lost some of their gusto in August as news of slower job growth and the latest slide on Wall Street probably sapped some optimism. A closely followed index of consumer sentiment dropped to 80 this month after climbing to a post-recession high of 85.1 in July, according to a survey by the University of Michigan and Reuters, released Friday.

Analysts on average were expecting a slight improvement in sentiment for early this month, reflecting a dip in gas prices and continued gains in the housing market. But the recent retreat in stock prices may have dampened confidence.

[read more]
[related: If You Feel Like You're Earning Less, It's Because You Are, Report Shows]
[related: Why the Improving Economy Has Done Nothing for Retirement Saving]

> back to top

US Existing Home Sales Jump to 3-Year High

U.S. home resales rose in July to their highest level in over three years, suggesting a sharp increase in borrowing costs is having only a limited impact on the housing market's recovery. The National Association of Realtors said on Wednesday that existing home sales jumped 6.5 percent to an annual rate of 5.39 million units.

That was well above analysts' expectations and marked the fastest pace of sales since November 2009, when a home buyer tax credit was expiring.

[read more]
[related: Mortgage Apps Take New Hit as Surging Rates Bite]
[related: Housing Recovery Remains a Local Phenomenon]

> back to top

Fed Debated Ways to Prolong Easy-Money Policies

The Federal Reserve debated changing its plans for raising interest rates so that it could keep its easy-money policy in place longer, according to documents released Wednesday.

The minutes of the Fed’s policy-setting meeting in July show that officials discussed at length for the first time whether they should alter the terms of their landmark promise to keep short-term rates near zero at least until inflation reaches 2.5 percent or the unemployment rate hits 6.5 percent. The ideas broached included lowering the target for unemployment and establishing a floor for inflation. The Fed also considered providing more detail about what it would do once its existing thresholds are met.

[read more]

> back to top

Families Scramble to Pay for College

Families are still losing the college savings race: More are tucking away money, but they're falling painfully short as tuition continues to climb. A record 69% of families say they've started saving for college, according to a Fidelity survey released Wednesday of more than 2,000 families with children who are 18 years old or younger.

At the same time, the average family expects it will have to foot the bill for 62% of college costs, with the rest coming from other sources like financial aid and loans. Last year, the survey found families expected to have to pay 57% of costs. With an average savings of $5,000, families are on track to reach only about a third of their savings goal.

[read more]
[related: Look Who's Still Living With Mom and Dad]

> back to top

Education & Networking Opportunities

Upcoming League Events:

Other Educational Opportunities:

  • Woods Rogers Law Firm – Labor and Employment Seminar (Lynchburg) (Oct. 1)
  • Woods Rogers Law Firm – Labor and Employment Seminar (Danville) (Oct. 8)
  • Woods Rogers Law Firm – Labor and Employment Seminar (Charlottesville) (Oct. 10)
  • Woods Rogers Law Firm – Labor and Employment Seminar (Richmond) (Oct. 17)
  • Woods Rogers Law Firm – Labor and Employment Seminar (Roanoke) (Oct. 22)
    • Discounts available on Woods Rogers seminars for League affiliates
    • VACUL32 --50% off all registrations
    • 32NEW -- Anyone bringing someone new will receive 10% off their registration

> back to top

NCUA Sets Two September MBL Webinars

Member business lending (MBL) underwriting, strategy and policy will be addressed in a pair of upcoming National Credit Union Administration webinars. The first webinar, which will address MBL strategy and policy, is scheduled for 2 p.m. on Tuesday, Sept. 17. MBL underwriting will be the topic of the next webinar, which is set for 2 p.m. on Wednesday, Sept. 25.

[read more]

> back to top

Free Symposium On ‘Battle For The American Consumer’

CUNA Mutual Group said it has lined up a “powerful lineup of speakers” for a one-day, complimentary Symposium on credit union member centricity to be held Sept. 24 in Tampa, Fla. Headlining the free event open to credit unions, “Battle for the American Consumer: A Symposium on Member Centricity,” will be Don Peppers, one of the world’s leading authorities on customer centric strategies. CUNA Mutual’s John Lass will speak on how credit unions can win the battle for their members’ business.

Dorothy Leaderer and Jennifer Norr of CUNA Mutual Group’s Customer Operations unit will present a workshop on measuring the "customer" experience and using that data to become more member centric.

The Symposium begins at 7:30 a.m. and concludes by 4 p.m. Credit union staff wanting to attend must register with Catie Shannon at catie.shannon@cunamutual.com or 608.665.8374.

> back to top

News From Credit Unions

Virginia-Based CUs Win Golden Mirror Award for Marketing, Biz Development Excellence

Congratulations to the following Virginia-based credit unions for capturing Golden Mirror Awards from the Credit Union Executives Society. The Golden Mirror Awards are presented annually to individuals and credit unions 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. Our Virginia winners are:

  • Belvoir FCU 
    Award of Merit: Annual Reports
    Award of Merit: Staff Training Programs
  • Dominion CU  
    First Place: Direct Marketing
    Second Place: Direct Marketing
    Award of Merit: Coordinated Campaign
    Award of Merit: Digital Marketing
    Award of Merit: Direct Marketing
  • Justice FCU 
    First Place: Innovation
  • Member One FCU  
    Second Place: Digital Marketing
    Second Place: Direct Marketing
  • Northwest FCU  
    Award of Merit: Television

[read more]

> back to top

Park View Credit Union CEO Celebrates 25 Years

John Beiler, president and CEO of Harrisonburg-based Park View Federal Credit Union, was honored on Aug. 4, for 25 years of service at a celebration attended by 150 credit union members, employees and board members.

[read more]

> back to top

NSWC Federal Credit Union Appoints Interim CEOs

The Board of Directors of NSWC Federal Credit Union has appointed Virginia Sebastian Storage and Charles Armstrong as Interim co-CEOs until a permanent CEO is selected. Mrs. Storage and Mr. Armstrong will be handling the duties of the former CEO, Harry C. Ovitt, who passed away on Aug. 8. 

[read more]

> back to top

AACUC Elects Lynette Smith New Chairperson

The African-American Credit Union Coalition has elected Lynette Smith, president/CEO of the $89 million Washington Gas Light Federal Credit Union, as its new board chairperson. Smith is familiar with the organization, having previously served as vice chair.

[read more]

> back to top

Young Leaders at Belvoir Federal to Serve on VACUL's YPC and YPN

The Virginia Credit Union League asked two of Belvoir Federal’s young leaders, Courtney Brown and Amy McConnell, to serve on the Young Professional’s Network (YPN). The League Board of Directors then appointed Amy McConnell to serve on the League's Young Professional’s Committee (YPC) for a one-year term.

[read more]

> back to top

New Director of Product Management Named to Chartway FCU Leadership Team

Chartway Federal Credit Union has promoted Derek Tinsley as their new director of product management. Tinsley previously served as the director of business lending for the credit union and will begin his new role immediately. With more than 20 years of experience in the financial services industry, Tinsley has an extensive background in business, sales and investment management.

[read more]

> back to top

Chapter News

NoVA Chapter Meets Sept. 12

World Council of Credit Unions Vice President Victor Corro will be the featured speaker at the NoVA Chapter's Sept. 12 meeting. Since 2004, Corro has worked to develop, coordinate and oversee WOCCU's International Partnership program, which currently includes 20 partnerships spanning 21 countries.

Among those partnerships is the 5-year-old relationship between the Virginia Credit Union League and credit cooperatives in the Baltic nation of Estonia. Location: Marriott Fair Oaks. Time: 5:30 p.m. networking; 6 p.m. meeting.

[learn more]

> back to top

Tidewater Chapter to Hold Sept. 12 Meeting

Dr. Larry Filer, of Old Dominion University, will be the featured speaker at the Tidewater Chapter's Sept. 12 meeting. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake). Time: 6 p.m. social; 6:30 p.m. dinner and meeting.

[learn more

> back to top

Tidewater Chapter to Host Sept. 19 Charity Golf Tournament

Join the Tidewater Chapter Sept. 19 for its Inaugural 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 hot dog lunch, cart, range balls, green fees and cookout dinner.

Shotgun start at 1 p.m. Proceeds will benefit Children's Hospital of the King's Daughters, the area's local Children’s Miracle Network Hospital. Sponsorships are also available, ranging from $250 to $1,000.

[learn more]

> back to top

Financial Education News

Youth Week 2014 Seeking a Theme

The Credit Union National Association is asking credit unions  nationwide to help it choose a theme for National Credit Union Youth Week 2014. The week, April 20-26, is CUNA's official designation of an annual, national celebration for credit unions that support youth financial literacy all year long.

It's an opportunity to formally acknowledge young members and encourage them to start and maintain a savings habit.

[read more]

> back to top

Marketing News

Avoiding Social Media Will Cost Members

Today's banking industry is more competitive than ever before. Consumers no longer feel they have to remain loyal to their financial institution and have no reservations about switching to a provider that is more effective at delivering what they want. Financial institutions have lost control of the sales process, thanks to social media channels.

Rather than meeting with a sales representative to discuss offerings and services, consumers are relying on Facebook, Twitter, Google+ and other channels to decide what brand they want to bank with.

[read more]

> back to top

Creating Loyal Gen Y Members

Creating loyal Gen Y members (also known as Millennials) can be tough. Younger members of the demographic set (typically 18- to 23-year-olds) are focused on their education or finding jobs in a challenging economy. And the older group (generally 24- to 35-year-olds) is overwhelmed by new responsibilities and lifestyle changes.

Nevertheless, $2.4 billion Veridian Credit Union in Waterloo, Iowa, successfully recruited these groups during a two-year campaign. In 2012, it increased Gen Y membership by 6% over 2011, and pushed retention to more than 90% for the first time. (Credit Union Magazine, Aug. 10)

[read full article] (subscription may be required)

> back to top

CUNA Mutual Marks MemberCONNECT’s 30th Anniversary

To help credit unions serve members who were historically underserved by insurance companies, CUNA Mutual Group launched MemberCONNECT 30 years ago.

“In the early 80s, we saw how credit unions had difficulties making products and services available beyond their core competencies,” said Kevin Lentz, vice president of Direct to Consumer for CUNA Mutual Group. He added, “Since then, the MemberCONNECT program has grown into one of the industry’s preferred methods of connecting credit union members with insurance protection.”

In 30 years, the program has grown to help protect nearly14 million members, according to CUNA Mutual. For credit unions, more than $66 million in noninterest income was paid in 2012 alone.

[read more]

> Learn more about MemberCONNECT by contacting your League's David Deacon at 800.768.3344, ext. 634 or ddeacon@vacul.org.

> back to top

Community Involvement News

Miracle Jeans Day Sept. 18

Credit unions: Sign up now to participate in Miracle Jeans Day Sept. 18, and help raise funds for your local Children's Miracle Network Hospital!

[learn more]

> back to top

News About The Competition

Banks' Mediocre Customer Service Beats Most Industries: Survey

Banks, known for subpar customer service, fare decently when compared with other industries, a new survey suggests. Of the 16 banks included in Temkin Group's customer service survey of 235 companies, 12 scored at or above 50% — a middling benchmark — in customer satisfaction. The survey asked 10,000 U.S. consumers to evaluate recent customer service interactions.

"Overall, banks were actually among the higher-performing industries in the survey," says Temkin Group managing partner Bruce Temkin. "But most were still in the mediocre range for customer service."

Personalized interactions and streamlined online and mobile services distinguished the banks at the top of the heap, Temkin says.

[read more]

Survey: Banks' No-Fee Checking Accounts Drop Since 2009

The percentage of banks offering free checking dropped again in the first half of the year, a clear indication that credit unions remain the smarter choice for fee-conscious consumers.

Less than 30.31% of banks surveyed had no monthly maintenance fee--the lowest percentage since 2009, when MoneyRates.com launched its Bank Fees Survey. That figure is a drop from 36.6% recorded at the end of 2012. The average monthly service fee for a checking account was $12.43.

Not only are fewer banks offering free checking, they have increased the fees they charge for overdrafts, said MoneyRates.com.  The average overdraft fee rose in 2013 to $31.60, compared with $30.01 at year-end 2012.

[read more]

> back to top

5 Hurdles an “Occupy”-Branded Banking Product Must Clear

The news that an Occupy Wall Street-affiliated group wants to launch a prepaid debit card has generated some media chatter lately, mostly centered around whether or not an anti-establishment, anti-bank group can (or should) try to offer financial services. The more fundamental question to ask is: Can it succeed?

There’s a lot of appeal to the idea of populist, alternative banking, but the barriers to entry — not to mention success — are high. The Occupy Money Cooperative says it plans to offer a prepaid debit card with low, clearly disclosed fees.

[read more]

> back to top

Security/Fraud Prevention

FinCEN Mortgage SARS Down 25% In 2012

The total number of mortgage fraud suspicious activity reports (SARs) filed declined by 25% between 2011 and 2012, the Financial Crimes Enforcement Network (FinCEN) reported Tuesday. FinCEN received 69,277 mortgage loan fraud (MLF) SAR filings in 2012, and 92,561 in 2011. The 25% decline in 2012  stands out when compared with the high rate of 2011 filings.

The 2011 filings were mainly due to mortgage repurchase demands on banks, FinCEN said.

[read more]

> back to top

Winning the War on Cybercrime: The Keys to Holistic Fraud Prevention

Cybercriminals are stepping up their attacks on financial institutions by gaining control of consumer devices with sophisticated malicious software installed on a computer or mobile device to secretly read online credentials. The criminals then conduct real-time credential theft and take over accounts.

Current technologies are simply not capable of identifying and preventing these attacks and are overloading bank fraud prevention operation teams with unnecessary false positive alerts. A holistic platform to prevent fraud must be built on four key elements that ensure sustainable prevention of cybercrime in light of the rapidly evolving threat environment.

[read more]

> back to top

Comments

Add New Comment