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CURRENT Newsletter | 23 May 2013

May 23, 2013 by Lewis Wood

News and Information For About Virginia's Credit Union System

May 23, 2013
  • Your comments and submissions are always welcomed. E-mail
Headline News News About Credit Unions Compliance/Regulatory Affairs News Governmental Affairs News Financial Services/Marketplace News Education & Networking Opportunities News From Credit Unions Chapter News Financial Education News Marketing News News About The Competition Security/Fraud Prevention

Headline News

CUNA Nationwide Webinar Rallies CUs For Grassroots Tax Battle

Credit union efforts will have to be bigger, louder, and stronger than ever to preserve the credit union tax exemption as tax reform discussions gain momentum in the U.S. Congress. In a nationwide webinar Wednesday, the Credit Union National Association urged credit unions to engage their 96 million members and help them join the fight to support the credit union tax status.

"We're talking about delivering one message, millions of times, starting today...and the message is simple; the message to Washington is 'don't tax my credit union," CUNA President/CEO Bill Cheney said.

He noted that CUNA research has found that two-out-of-three credit union members--potentially 63 million members--are willing to email the U.S. Congress when asked by their credit unions.

"We just have to ask them to do so," CUNA Senior Vice President of Political Affairs Richard Gose said. Credit unions are vying with 400 other groups that are also working to preserve their own tax preference, CUNA staff noted.

To ensure we are heard above the din, CUNA, the leagues, and credit union supporters and members will need to be persistent.

"Our action will need to be sustained at least through the end of the year, perhaps longer. The tax status will not be secure until the process is complete," Cheney said.

CUNA has joined with affiliated state credit union leagues to launch a large-scale, nationwide grassroots-mobilization campaign urging credit union members across the country to deliver a united message to the U.S. Congress: "Don't tax my credit union!"

"Preserving the credit union tax exemption is the single highest priority for your League and CUNA,” said League President Rick Pillow. “Many are saying discussions now taking place in Washington represent the greatest threat to our tax status in well over two decades. We continue to educate lawmakers about the benefits of our tax exemption, but the reality is that only our grassroots might will enable us to prevail in this fight. This is no time to sit on the sidelines; this fight demands a real commitment from all of us.”

To help in member engagement efforts, we suggest credit unions:

  • Encourage members to visit where they can watch our educational video and take action to email their member of Congress; 
  • Encourage members to download the CUNA Advocacy App for iPhone and Android smartphones; and,
  • Work with CUNA and their state leagues to set up Vine campaigns in their credit union branches and offices (see CUNA tax advocacy toolkit for more information on Vine).

 [read more]
Don't Tax My Credit Union Site
CUNA Credit Union Tax Advocacy Toolkit

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Credit Unions Care Foundation Accepting Donations to Aid Oklahoma Tornado Victims

The Credit Unions Care Foundation of Virginia is accepting donations to aid those in Oklahoma impacted by this week's tornadoes. Credit unions and individuals can forward donations to the Foundation at PO Box 11469, Lynchburg, 24506. Please make note that your donation is for Oklahoma Tornado Relief. Individual donations may be tax deductible; consult your tax professional.

> NCUA Activates Disaster Relief For Oklahoma
In the wake of this week's tornadoes, the National Credit Union Administration has activated its disaster relief policy to aid impacted credit unions and their members. [read more]

> Tinker FCU Branch Destroyed, Assisting Staff And Members
For nearly two dozen staff and members of Tinker Federal Credit Union's branch in Moore, Okla., Monday afternoon had its moment of reckoning. A half-mile wide tornado bore down on the branch and they took cover in the credit union's safe deposit box vault. After it was over, they were safe and sound, and the only thing left standing was the vault.

Tinker FCU's human resources department is now gathering information for assisting employees directly impacted by the tornado. "All staff  have been accounted for, and they're OK," Stratton said. However, about 25 employees have some damage to their homes, and four employees' homes were destroyed. [read more]

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League Attends Fundraiser for Sen. Kaine

League President Rick Pillow and Director of Governmental Affairs Karin Sherbin attended a fundraiser for Sen. Tim Kaine at our lobbying firm of Hunton & Williams in Richmond Monday morning. Hunton lobbyist Heidi Abbott hosted the event, which was attended by about a dozen people in addition to League representatives. League staff updated the Senator on our campaign to preserve the credit union tax exemption and our member business lending legislation. [read more]

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News About Credit Unions

Payday Loans by Small Number of Credit Unions Come Under Fire

A top regulator is vowing to curtail short-term, high-cost consumer loans at federally chartered credit unions. Debbie Matz, the chairman of the National Credit Union Administration, promised action in response to new research by consumer groups. Nine federal credit unions are allegedly making loans with what are effectively triple-digit annual percentage rates, the groups say. 

The products resemble payday loans made by banks that have drawn fire from other regulators. (American Banker Online, May 20)
[related: Credit Union CEO Defends Payday Loan Program]

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Credit Unions Still a Better Deal When It Comes to Fees 

Credit unions continue to have a competitive advantage when it comes to fees, according to a new report. The report, the 2013-2014 CUNA Fees Report, released last week, found that CUs are less likely than banks to charge fees and when fees are charged the fees are lower.

Among the findings:
* As a percent of total income, noninterest income, which includes fees, grew from an average 20.1% in 2009 to 28.6% in 2012.
* 82% of CUs offered free checking in 2012, vs. 39% of banks offered free checking.
* As a percentage of non-interest income NSF and overdraft fees at CUs contribute the largest portion (34%), followed by ATM and debit card fees (12%), first mortgages (8%), other loans (8%), and credit cards (6%).
[read more]

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Unite For Good: National Media Wake Up To CUs' Positive Power

As credit unions Unite for Good to get the good word out about the value of credit unions, the Credit Union National Association has succeeded in nabbing credit unions their share of the spotlight among nationwide media the past few weeks. Since April 1, more than 14 of the nation's most prominent media outlets have featured CUNA and credit unions on topics ranging from student lending, the value of the credit union alternative, member business lending, financing automobiles, CUNA's regulatory agenda and more. That doesn't count the background provided and interviews for upcoming media stories to be released soon or articles generated locally by credit unions and leagues. [read more]

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Compliance/Regulatory Affairs News

CUNA Suggests Further Fixed-Asset Improvements to NCUA

The Credit Union National Association has spoken in support of National Credit Union Administration proposed fixed-asset rule changes, but is urging that more improvements be made to the rule, in a comment letter filed Monday. The CUNA comment letter responds to a March NCUA proposal that makes plain language revisions to the agency's fixed asset rule, and adds new definitions and rewordings.

The changes would impact NCUA's current fixed-assets rule, Section 701.36, which allows federal credit unions to purchase, hold and dispose of property necessary or incidental to their operations. These fixed assets include office buildings, branch facilities, furniture, computer hardware and software, and ATMs. [read more]

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CUNA Urges Qualified Mortgage Changes In Letter To Congress

Qualified mortgage rules must be changed to ensure credit unions will be able to meet their members' borrowing needs in a way that minimizes risk and default, Credit Union National Association President/CEO Bill Cheney wrote in a letter submitted to the U.S. Congress on Tuesday.

The letter was submitted to House Financial Services financial institutions and consumer credit subcommittee chair Shelley Moore Capito (R-W.Va.) ahead of a hearing entitled: "Qualified Mortgages: Examining the Impact of the Ability to Repay Rule. [read more]

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The Politics Behind the Senate's Vote on Cordray

Senate Majority Leader Harry Reid is bringing the battle over the Consumer Financial Protection Bureau back to the forefront with a long-awaited confirmation vote on Richard Cordray, the agency's director. Democrats and Republicans have been at a stand-off over Cordray's nomination two years ago as the GOP fights for structural changes at the agency that Democrats staunchly oppose.

Cordray was appointed the position last year during a Congressional recess. Two federal appeals court have overturned recess appointments made on the same day as Cordray's, with critics arguing it's only a matter of time before Cordray is embroiled in a similar legal fight. (American Banker Online, May 17)

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Governmental Affairs News

Bipartisan CU MBL Bill Spreads Freedom, Business Group Writes

Credit union member business lending (MBL) legislation should be cheered not just because of its bipartisanship, but because it "spreads freedom" and "lifts regulatory barriers to an untapped source of capital for startups: America's credit unions," Competitive Enterprise Institute Senior Fellow for Finance and Access to Capital John Berlau wrote in a recent blog post. Berlau in his post noted that credit unions have stepped up to fill the funding void felt by many small businesses and startups. [read more]

Email Congress now in support of MBL legislation (H.R. 688 and S. 968).

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Financial Services/Marketplace News

Consumer Borrowing Hits Five-Year High

Strong demand for new cars has boosted consumer borrowing to its highest level since 2008, according to a new report from Equifax. In its latest study on consumer credit trends, Equifax said that consumers took $141 billion of new loans in the first two months of this year, up 12% from the same period in 2012 and 33% from three years earlier, when borrowing hit a recession-era low. Automobile loans, which rose 13% year-over-year, to $70 billion, accounted for nearly half of the total, according to Equifax. (American Banker Online, May 21)

This Housing Upturn Looks Like the Real Thing

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Ever since the recovery began in 2009, a weak housing market has held back the U.S. economy. The first rebound in home prices was lackluster and after only a year was followed by another dip. But the recent upturn in home prices looks like the real thing. One clear sign of a turning point: In March, homeownership hit a 17-year low, while the 12-month gain in home prices was the biggest in seven years. Those two extremes suggest that the market has hit bottom. [read more

[related: Existing-Home Sales Remain Below Underlying Demand]
[related: Could QM Hurt Mortgage Borrowers?]
[related: Mortgage Apps Tumble, Refis Drop to Lowest Since Late March]
[related: Existing Home Sales Highest in Almost Three-and-a-Half Years]

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Millennials Say Debt Stalls Retirement Savings

More than half of millennials -- 54% -- surveyed by a Wells Fargo & Co. retirement unit said their "biggest financial concern currently" was longer-term debt, mainly student and credit card debt. With the cost of college continuing to rise, about 64% of the 22- to 32-year-olds surveyed said they paid for school with loans.

And 42% of the millennials said their debt was "overwhelming," twice the rate of baby boomers who were surveyed for comparison. The $1 trillion in outstanding student debt and low wages in the weak economy are causing the latest rounds of college graduates to put away less money for retirement. [read more]
[related: Student Debt is Soaring, But Repayment Options Offer Hope]

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Education & Networking Opportunities

Leadership Workshop June 5

Companies spend thousands of dollars to recruit and train new managers, while the individuals who will lead your organization in the future are likely working for you right now.

In our June 5 Leadership Workshop, we will discuss the keys to preparing your employees for advancement -- including creation of a career path, offering effective feedback, becoming a mentor, and putting employees into leadership situations before they step into leadership positions. [learn more]

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Emerging CU CEO Roundtable Slated for June 12 in Richmond

Your League will be participating in a Emerging CUs CEO Roundtable on June 12, in Richmond. On the agenda: a session on branding, competitive pressures faced by smaller institutions, member engagement, and League resources. This workshop is specially tailored for credit unions with assets less than $40 million. [learn more]

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Latest Employment Law Hot Topics Focus of June 13 Human Resources Workshop

Join nationally recognized employment law attorneys Dan Summerlin and Tom Winn, of Woods Rogers PLC, for a full-day workshop on essential human resource management topics. Scheduled for June 13 in Richmond, this workshop will cover new developments coming out of the Equal Employment Opportunity Commission, the Department of Labor and the National Labor Relations Board. [learn more]

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News From Credit Unions

BayPort Credit Union Awards More Than $50,000 to Scholarship Recipients

BayPort Credit Union hosted its annual scholarship banquet May 14, at the Mariners’ Museum and awarded more than $50,000 to deserving scholastic recipients. This year’s banquet honored 20 winners from across the Greater Hampton Roads area and Quaker Hill, Connecticut.  Chris Reckling, local TV personality from WAVY-TV 10’s Hampton Roads Show was this year’s guest speaker and spoke about his experiences on television as well as his educational journey. [read more]

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URW Community FCU Celebrates Grand Opening of New Facility

When URW Community Federal Credit Union held a grand opening May 1 for its new facility, the well-wishers included lawmakers who represent the legislative districts in URW’s field-of-membership. Speaking at the event were Rep. Robert Hurt (R-5), who recognized the need of more private capital to boost jobs in the local communities, as well as Sen. Bill Stanley (R-20), who recalled that a credit union gave him his first loan.

Dels. Danny Marshall (R-14) and Don Merricks (R-16) also attended, as did Virginia Credit Union League President Rick Pillow. [read more]

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Chartway's Bruce Bryan Honored by National Eagle Scout Association

The National Eagle Scout Association (NESA) recently honored Bruce Bryan, the regional president of HeritageWest, SouthWest Community and Utah Central credit unions, with one of the scouting organization’s highest and most prestigious awards during their Annual Scout-O-Rama Conference. This honor acknowledges Eagle Scouts who have demonstrated outstanding achievement in their profession or vocation by making a positive impact close to home.

As the regional president for the three Utah-based divisions of Chartway Federal Credit Union, Bryan currently leads all retail-related activities. In this capacity, he has helped further the organization’s mission by supporting the communities served by the credit unions financially and philanthropically. [read more]

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Chapter News

Tidewater Chapter Meets June 6

Speaker Shelley Winegrad (BayPort Credit Union) will present a program on Virginia's Financial Industry Business at the Tidewater Chapter's June 6 meeting. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, 23320). Time: 6 p.m. social; 6:30 dinner and meeting. Early bird registration of $30 until May 29. [learn more]

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Tidewater Chapter to Host July 26 Charity Golf Tournament

Join the Tidewater Chapter July 26 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. Fee includes a hot dog lunch, cart, range balls, green fees and cookout dinner. Shotgun start at 1 p.m. Proceeds will benefit Children’s Miracle Network Hospitals.

Sponsorships are also available, ranging from $250 to $1,000, and your support is greatly appreciated! [learn more] (Word document, 930kb)

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Roanoke Valley Chapter Plans June 11 'Night at the Ballpark'

Join the Roanoke Valley Chapter June 11 for a night of baseball action, courtesy of the Salem Red Sox. Picnic begins at 6 p.m.; game time is 7:05 p.m. Cost: $21 with $2 discount for kids ages 4 through 12; ages 3 and under are free. RSVP by noon, May 31 with the names and ages of attendees to Jim Scott

NoVA Chapter Meets June 13

Jeffrey Larroca, Attorney at Law, will offer a program on "Trends and New Developments in Employment Law," at the NoVA Chapter's June 13 meeting. Larroca focuses his practice on labor and employment and litigation.

Additionally, Jeffrey has significant insurance experience, including coverage litigation, premises liability litigation, personal injury, fidelity relating to employee dishonesty claims, and surety. Deadline for reservations is June 10. [read more]

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Richmond Chapter to Host 19th Annual Susan J. Adams Memorial Golf Tournament to Benefit CMN Hospitals

The 19th Annual Susan J. Adams Memorial Golf Tournament tees off July 29 to benefit Children’s Miracle Network Hospitals. The Chapter has renamed this event to honor the hard work and dedication of the late Susan Adams, who coordinated this event for 18 years. She made this tournament a great success, raising more than $200,000 during those 18 years! [learn more]

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Financial Education News

Youth 'Stached Their Cash--All $25.2 Million--With CUs

Young credit union members deposited about $25.2 million into their share and savings accounts during this year's National Youth Saving Challenge, sponsored by the Credit Union National Association. The 224 credit unions participating this year collectively saw 117,244 youth deposit an average of $214 each.

In 2009, the Saving Challenge expanded beyond National Credit Union Youth Week to run the entire month of April. Credit union staff told CUNA that a week wasn't long enough. This year, more than half (60%) of the participating credit unions ran the challenge for the entire month--giving them more time to open 6,173 new youth accounts. [read more]

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Marketing News

10 Simple Ways Any Credit Union Can Build Advocacy

"I think credit unions (and smart community banks) can be advocates of those they serve, but it meansdoing something, not simply saying something," writes Bryan Clagett on

So how do you, the average credit union manager, bring advocacy to life? Here are 10 simple ideas, in no particular order, that you can put to use today. [read more]

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Welcome to the One-Screen World

According to a recent survey by Adobe, 45% of marketers say their firms still don't have a mobile presence, writes Mitch Joel for the Harvard Business Review. "Businesses are still splitting hairs of what is the web, what is the smartphone, what is the tablet, and what is TV. Instead of hunkering down and figuring out what the customer's new expectations are when everything from their washer and dryer to their television and smartphone are hyper-connected to one another, most marketers are just worrying about how they're going to advertise on a mobile screen. Advertising?

That's not the revolution here. Now, brands don't just advertise on someone else's mobile site, they can build their own apps, tools, and programs of engagement that make mobile a different kind of media. They can create value through offering a mobile service or app that is truly useful. They can touch their consumers in ways that are both contextual and location-aware.

This is the proverbial "last mile" that all marketers were hoping for: contextual, personal, and by location. If ever there was a time to embrace the notion of the one-screen world, this would be it. Increasingly, consumers are rolling these screens up into one." [read more]

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News About The Competition

To End Big-Bank Subsidies, Fix the FDIC’s ‘Off' Switch

The unanimous Senate vote last year mandating a Government Accountability Office study of the subsidy allegedly enjoyed by the largest banks sent the clearest possible signal that both sides of the aisle think the "too big to fail" problem is as bad as ever. So far, much industry attention has focused not on this subsidy, but rather on one response to it – the Brown-Vitter legislation.

The bill raises many important questions, but the "subsidy" premise lies not just at its root, but also as the base rationale for many regulatory actions far more likely to happen first.  Is there a big-bank subsidy? No, at least not along the $14 billion to $83 billion lines Bloomberg News recently calculated.

But, the answer will be yes -- big banks are still TBTF -- if regulators do not quickly build the infrastructure needed for Dodd-Frank's no-bailout liquidation regime to protect taxpayers, writes Karen Shaw Petrou for American Banker. "This is hard to do, but three years after Dodd-Frank was enacted the orderly liquidation authority is still on the drawing board, leaving many to wonder if it can ever be made to work." [read more]

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Security/Fraud Prevention

'Grandparent Scams' Steal Thousands from Seniors

Be sure to share this with your members: Across the country, law enforcement officials are warning seniors to beware of so-called "grandparent scams," in which fraudsters are impersonating a grandchild in distress -- and begging for cash. Such scams have become increasingly common.

 In 2009, the Federal Trade Commission recorded 743 incidences of scammers impersonating a family member or friend in need of money. Since 2010, the FTC has recorded more than 40,000 and it is estimated that many more go unreported. [read more]

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