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CURRENT Newsletter | 22 May 2014

May 22, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Community Involvement

Security/Fraud Prevention

Headline News

League Files Comment Letter on Risk-Based Capital Proposal

More than 1,000 comment letters reached the National Credit Union Administration by Wednesday morning on the agency's Risk-Based Capital proposal. Your League's comment letter has been forwarded to NCUA.

You can read it here:

That's a tremendous number of letters, to be sure, but CUNA and NAFCU have both urged NCUA to extend the comment deadline, a request that's been denied. The credit union trade associations have been vocal that the rule's current draft limits many institutions' ability to lend, serve members and grow. (Credit Union Journal, May 22). You have until May 28 to file your own letter.

[RELATED: CUNA: Why CUs Below $50 Million Threshold Need to Comment on RBC Proposal]

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Risk-Based Capital Rule Time Frame Not 'Etched In Stone,' Says Matz

As comment letters on the proposed risk-based capital rule flood into NCUA, the agency said it may consider delaying the rule's effective date. NCUA confirmed to Credit Union Journal that Chairman Debbie Matz, speaking at the annual meeting of the Hawaii Credit Union Association Friday, said the 18-month timeframe, following a final risk-based capital rule, is not "etched in stone." Matz stated that if "sensible reasons" are raised by comment letters to delay the effective date, the agency will consider that step. (Credit Union Journal, May 20)

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Quit The Hit Campaign Wins National Best-of-Show, Social Media Awards

The Virginia Credit Union League's Quit The Hit social media campaign has taken top honors in the Credit Union National Association's Blockbuster Awards. The campaign won the competition's "Best of Show" and "Best Use of Social Media" awards.

"Our credit unions are deservedly proud of this campaign. Quit The Hit was a bit unconventional in its approach, but our credit unions' commitment to funding and promoting the campaign continues to pay dividends more than a year after the campaign's launch," said Rick Pillow, president of the Virginia Credit Union League, the state trade association for Virginia's 166 member-owned credit unions.

More than 1 million consumers, mostly Virginians, learned more about credit unions and their benefits through the Quit The Hit awareness campaign, which was created and funded by the commonwealth's credit unions. 

[READ MORE]

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Credit Unions Care Foundation Contributes $10,000 to Aid Anthem LemonAid Campaign Benefiting Children's Miracle Network Hospitals

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, Va. 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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Young Members at Virginia-Based CUs Deposit $233,063 in Savings Challenge

Young members at nine Virginia-based credit unions deposited $233,063 into new and existing savings accounts during the month of April as part of the CUNA and League-sponsored National Youth Savings Challenge. In total, 2,590 young people participated at a Virginia-based credit unions, which also yielded 51 new youth accounts.

Two Virginians were also among the 25 young savers nationwide who won $100 prizes as part of the challenge: Renesia, age 17, of Richmond, Va., from Henrico Federal Credit Union and Ryan, age 3, of Herndon, Va., from Northwest Federal Credit Union.

[RELATED: Youth Tuck Away More Than $20.5M During Saving Challenge]

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News About Credit Unions

Credit Union CEO Confidence Soars Behind Economy’s Lift

A number of factors have credit union CEOs feeling the most confident about the economy since 2007. That’s according to the First Quarter 2014 Credit Union CEO Confidence Survey from Catalyst Corporate Federal Credit Union, which collected data from 207 CEOs. “We’ve had a bevy of good economic news over the past few weeks, namely a sizeable drop in the nation’s unemployment rate, new historical highs in the stock market and stable consumer prices, including cheaper gas prices,” said Brian Turner, director and chief strategist for Catalyst Strategic Solutions.. The index rose more than three points for the second consecutive quarter to 30.32 points making it the first time the gauge has topped 30 since the third quarter of 2007 when it was at 34.27.

[READ MORE]

[RELATED: Why the Long Face? It's the Economy, Stupid]

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NCUA’s Small Credit Union Consulting Nominations Due May 31

Nominations for credit unions to receive free consulting services from the NCUA’s Office of Small Credit Union Initiatives close on May 31 at 5 p.m. The NCUA’s consulting services, provided by experienced economic development specialists, offer assistance to credit unions in the areas of budgeting, marketing, policy development, strategic planning, and operational or regulatory areas. Selected credit unions receive assistance for a six-month period. 

To qualify a credit union must fall into one of the following categories: total assets of less than $50 million; a new charter (fewer than 10 years); designation as a Minority Depository Institution; or designation as a low-income credit union. For additional information, click here.  

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Nominate a Stand-Out Future Leader for the 2014 CUES Next Top Credit Union Exec Challenge

The industry’s first competition recognizing the incredible young leaders of the credit union movement is back for a fifth year! The search is on for the 2014 CUES Next Top Credit Union Exec. Nominations are being accepted May 20 to June 6, at www.ntcue.com/nominees. Nominate a rising star—even yourself!

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Compliance/Regulatory Affairs News

Consumer Lawsuits Claim Banks Helped Payday Lenders Break Law

Financial institutions have started to rid themselves of ties to industries that regulators deem unsavory, from pornography to gun sales to payday loans. But it may not be enough to fully cleanse FIs of legal liabilities. A recent spate of judicial rulings suggests that the next worry may stem from a potentially costly group of related lawsuits filed on behalf of consumers.

These plaintiffs make a core argument that should send a chill down many executives' spines: the banks should have known that their payday-lender customers were doing illegal things and thus were helping them break the law.

Consumers have sued 10 banks and a credit union for allegedly helping online payday lenders break usury and other laws by processing transactions for those companies. As banking lawyers have described the cases, they are "nearly identical" in their allegations and seek class-action status. The lawsuits, all filed last year in federal court, recently survived critical hurdles in the judicial process, such as judges dismissing FIs' motions to throw out the cases. (American Banker Online, May 21)

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How FOM Rule Could Impact Indirect Lending

The National Credit Union Administration's proposal to amend the agency's chartering and field of membership rules could slow indirect lending at some credit unions, say industry insiders. The new rule may also prompt a number of credit unions to switch to a community or state charter to avoid the guideline's reach.

The proposal amends NCUA's process to evaluate a request from a federal credit union having a single associational FOM, or multiple common-bond FOM, to add an associational group. It may also impact CUs' existing associational relationships, analysts said.

The proposed rule would subject many associations to additional scrutiny, adding a "threshold requirement" that would reject associations created primarily for the purpose of expanding an FCU's membership. The rule, as well, would add an eighth factor to NCUA's "totality of the circumstances" test used when analyzing a request to add an association, explained Steven Van Beek, attorney at Howard & Howard.

"This new factor would analyze numerous sub-factors to determine if there is sufficient corporate separateness between the association and the FCU." (Credit Union Journal, May 21)

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Financial Services/Marketplace News

'Modern' Families Struggle More Financially Than Conventional Ones, Study Says

Nontraditional families, such as those headed by single parents or same-sex couples, are in far worse financial shape than conventional households headed by married heterosexuals with children, according to a new study. Nontraditional families fare much worse across a variety of measures, including their ability to save money for emergencies and their own sense of economic well-being, according to the survey by insurance company Allianz.

Only 3 in 10 non-traditional households have a high degree of confidence in their financial well-being vs. 41% for their conventional counterparts. Nearly half of so-called modern families, for example, live paycheck to paycheck. That compares with 41% of conventional households, according to the survey. The financial woes of modern families are a big issue given the growth of nontraditional structures in recent decades.

Only 19.6% of U.S. households are composed of married heterosexual couples with children, down from the 40.3% in 1970, according to Allianz.

[READ MORE]

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Financial Worries Challenge Nation's Servicemembers

A large majority of U.S. military service personnel worry about their income and job security, according to a National Foundation for Credit Counseling (NFCC) survey, which was administered in recognition of Military Appreciation Month. More than 75% of the servicemembers polled worry about their finances, while 57% said they're very concerned that defense cuts and downsizing may jeopardize their salaries and jobs. Conducted last month, the NFCC polled 267 adults ages 18 and older who are currently enlisted members of the U.S. military.

"Unfortunately, the survey findings indicate ongoing financial concerns for many military families," said Joe Freeman, CEO of Pioneer Services, the division of MidCountry Bank that sponsored the survey. The survey also found that 28% of service people are more concerned than they were a year ago about how their financial situations will affect their future in the military. Additionally, 55% reported feeling unprepared for a financial emergency.

[READ MORE]

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Existing Homes Sales Post First 2014 Increase

There were stirrings of a spring market in April as both existing home sales and the inventory of available homes increased. The National Association of Realtors® (NAR) said that home price growth also slowed, anencouraging sign of continued affordability.

Existing home sales which include completed transactions on single family and town homes, condominiums, and coops,rose 1.3 percent in April to a seasonally adjusted annual rate of 4.65 million. It was the first increase thus far in 2014 and sales remain 6.8 percent below the 4.99 million unit rate in April 2013.

[READ MORE]

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[RELATED: Nearly 10 Million Mortgaged Homes are Still Underwater]

Housing Market Improving Despite Dismal Sales Numbers

The bad news? Hampton Roads home sales have been down for four consecutive months compared to last year. The good news? Foreclosures and short sales continue to leave the market.

[READ MORE]

[RELATED: Fannie Mae: 'Housing Remains Worrisome']

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Report: Consumers Going Back to Spending Ways

That didn’t take long: Spending money is back and saving it is passe. Consumers’ interest in spending, not saving, is coming back with a vengeance as spending on consumer items has topped $10 trillion for the first time, even surpassing pre-recession levels, according to an analysis by market research firm Mintel. Consumer spending is expected to take off 3.6% this year, Mintel says.

[READ MORE]

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American Express CEO Ken Chenault: 'There's a $25 Trillion Opportunity'

An interesting read from CNNMoney in an interview of American Express CEO Ken Chenault on the power of mobile. "What's happening is a gigantic opportunity," says Chenault. "Mobile will redefine how commerce is done. Steve Jobs redefined the retail experience. I think commerce and mobile will do an even more transformational job in an exponential way."

[READ MORE]

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Education & Networking Opportunities

CUNA Mutual Group Webinar Explores New Auto Purchasing Trends

As we accelerate into the summer auto-buying season, CUNA Mutual Group’s MemberCONNECT Program is hosting a timely webinar for credit unions that will explore how consumers are searching, browsing and paying for vehicles in ways unimagined years ago.

“Changing Lanes: The New Paths to Car Buying” will be held at 1 p.m. and 3 p.m., on Tuesday, June 3. The webinar is open to all credit unions at no cost.

[READ MORE]
[RELATED: Auto Loans Rev Past 13-Year-Old High]

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News From Credit Unions

Langley Federal Credit Union Awards $20,000 in College Scholarships

Langley Federal Credit Union recently presented four deserving young members with the Jean M. Yokum $5,000 College Scholarship award for academic achievement. The four winners are Seare Farhat, Lucy Jin, Patrice Malone and Bethany Wissmann.

[READ MORE]

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1st Advantage Awards $10,000 in Scholarships

1st Advantage awarded a total of $10,000 in scholarships to well deserving Greater Peninsula high school students. In honor of their academic achievements, each scholarship winner received $2,000 to help fund their continued education.

[READ MORE]

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DuPont Community CU Recognized for Commitment to Innovation

Leading card processing company, Payment Systems for Credit Unions (PSCU), recently awarded DuPont Community Credit Union (DCCU) the 2014 MoPro In-Action Innovation Award based on DCCU's online banking and credit card products.

[READ MORE]

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Record Crowd for Annual PVFCU Neighborhood Connection

More than 1,200 members came out to “get the scoop” at the Annual Park View Federal Credit Union (PVFCU) Neighborhood Connection on May 1. Members enjoyed a complimentary dinner that included a make-your-own ice cream sundae bar. Close to 800 members attended one of the 4 shows that included a Ted & Co. TheatreWorks performance of short skits, including one created uniquely for PVFCU.

[READ MORE]

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Chartway Federal Credit Union’s We Promise Foundation Announces 2014 – 2015 Board of Directors

Chartway Federal Credit Union’s charitable arm, the We Promise Foundation whose mission is to put smiles on children’s face by making their dreams come true, is proud to announce its 2014 – 2015 board of directors.

[READ MORE]

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Fort Lee Staffer Earns NYIB National Scholarship

Congrats to Jimia Jones, Financial Literacy Coordinator at Fort Lee Federal Credit Union, who recently earned the CU National Youth Involvement Board's 2014 Scholarship for the Southern Region. The scholarship includes attendance at NYIB's national conference (July 30-Aug. 1) in Grand Rapids Michigan.

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Community Involvement

Use Giving to Brand Credit Union Locally

Credit unions should consider how well their support for charitable causes fits with their overall missions, attendees were told at a session at the CO-OP Financial Services’ THINK 14 conference.

Gigi Hyland, executive director of the National Credit Union Foundation and former NCUA board member, kicked off the discussion by urging the executives attending a Monday session at the New Orleans conference to use their philanthropic efforts to build awareness about their existence in their communities.

[READ MORE]

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Security/Fraud Prevention

Study Finds Little Risk in Remote Deposit

Most banks find mobile check deposit poses little risk, a new survey from Remotedepositcapture.com has found. In the survey of 246 financial institutions (80% of them banks, 20% credit unions), 80% said no losses have occurred at their institution through the use of remote deposit. The primary and some say only risk to mobile deposit capture is duplicates — the same physical check being deposited more than once.

A customer might deposit a check by taking a picture of it on her smartphone, then bring that same check to a Walmart or bank branch to cash it. "Fraudsters are out there and they're going to try to exploit all the different channels they can," says John Leekley, founder and CEO of RemoteDepositCapture.com.

"When it comes to mobile RDC, duplicates are an issue, but fortunately the industry is managing the risks." More could be done, however. "It's a bit of a Wild West when it comes to duplicates and which financial institution incurs the loss," says Scott Carter, chief marketing officer at Mitek. "It's not clearcut or simple."

Reg CC and clearing laws are being reviewed for possible changes to clarify who is liable. To prevent duplicates, most (84% of) banks set deposit value limits (e.g. a customer can't deposit more than $3,000 a month). Almost three-quarters (71%) use image quality analysis to detect fraud. More than half (59%) examine the courtesy and legal amounts on each check for a mismatch. Deposit volume limits (curtailing the number of checks deposited) are also applied at 54% of banks. Banks also manage their mobile deposit funds availability to minimize risk.

Only 9% offer immediate funds availability; 19% will make funds available the same day if the deposit is made before a certain time. The majority (51%) offer next-day funds availability. A small number make customers wait two (16%) or three or more (9%) days for their money. (American Banker Online, Many 22)

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