News and Information For and About Virginia's Credit Union System
- NCUA Sets Corporate Assessment at 8 Bps
- NCUA Reduces 2013 Spending Plan
- Credit Union Members Make 504,901 Contacts To Congress!
- Credit Unions Take '#DontTaxMyCU' Message to Twitter
- The Hill: Senators Promised Half-Century of Secrecy for Taxation Feedback
- Senate Relief Bill Would Help CUs
News About Credit Unions
- Free Checking No Longer Enough to Woo New Members: Report
- CUs Prepare To Unite For Good On 2013 ICU Day
Governmental Affairs News
- Sign Up for VACUPAC Golf Early and Enter Raffle for Free Greens Fees
- Do We Need a National Data Breach Law? Tech Groups Debate
Financial Services/Marketplace News
- Report: Economy Will be Flat Until 2015
- Why Slower U.S. Home Sales Signal a Good Recovery
- Americans Gambling on Rates with Most ARMs Since '08
- Mortgage Delinquencies Take a Sharp Turn Up
Education & Networking Opportunities
News From Credit Unions
- Roanoke Valley Chapter Plans Aug. 23 Golf Tournament to Benefit VACUPAC
- Tidewater Chapter to Host Sept. 19 Charity Golf Tournament
The National Credit Union Administration this morning set this year’s corporate stabilization assessment at 8 basis points, or $700.9 million, a sign that the multi-year resolution program may be winding down. This year’s assessment, the lowest of the four annual charges set by NCUA, brings to $4.8 billion the amount NCUA has collected from credit unions over the past four years to fund the corporate stabilization fund.
It also brings to almost $11 billion the cost of the corporate resolution program (to date), including $5.6 billion of credit unions’ capital erased before NCUA took over and liquidated the five failed corporates, including U.S. Central Federal Credit Union and WesCorp Federal Credit Union. Last year's assessment was 9.5 bps or $790 million.
NCUA said it will use $650 million of the assessment to repay borrowings from the U.S. Treasury, which is funding the majority of the corporate stabilization fund with low-rate federally guaranteed loans. This will leave outstanding borrowings to Treasury at no more than $4.075 billion. Credit unions must account for the payment in their third quarter financials. Payment is due in October.
(Credit Union Journal, July 25)
[CUNA's Summary of the July 25 NCUA Board Meeting] (Word document, 16kb)
The National Credit Union Administration today approved changes to its 2013 operating budget, reducing that budget by $2.6 million. The $2.6 million savings will help offset costs of the 2014 budget, the NCUA said.
The budget decrease brings the total 2013 budget to $248,811,780. This is the fourth mid-year budget decrease the agency has approved.
Across the nation, there have been 504,901 contacts made to Congress with the message: "Don’t Tax My Credit Union." Virginia ranks 9th in the total number of contacts with 14,135. Keep up the good work!
Click on www.donttaxmycreditunion.org to write your lawmakers, and ask someone else at work or home to do the same.
The "Don't Tax My Credit Union" message lit up Twitter Tuesday--the day the Credit Union National Association declared as DontTaxMyCU Tuesday. More than 875,397 people, including members of Congress and their Twitter followers, saw the "Don't Tax My Credit Union" message.
The message reached its mark with 2,171 tweets that specifically mentioned a member of Congress's Twitter handle and the #DontTaxMyCU hashtag, according to CUNA's analysis. In addition, more than 500 messages were tweeted with the hashtag, but without mentioning a specific member of Congress.
The Senate’s top tax writers have promised their colleagues 50 years worth of secrecy in exchange for suggestions on what deductions and credits to preserve in tax reform.
The promise of confidentiality was revealed just two days before the deadline for senators to participate in the Finance Committee’s “blank slate” process, which puts the onus on lawmakers to argue for what credits and deductions should be kept in a streamlined tax code.
A Finance Committee aide said Sens. Baucus (D-Mont.) and Hatch (R-Utah) were trying to prove to colleagues that they were making secrecy a priority. Officials on the panel circulated the news to senators in a memo that was dated last Friday. [read more]
> There's still time to go to bat for credit unions and write Sens. Mark Warner and Tim Kaine, asking that they work to preserve the credit union tax exemption. Drop them an email:
Put in Subject line: Did you meet the July 26 deadline?
Then in body: Dear Senator (name):
Sen. Baucus had asked Senators to tell him by this Friday what tax exemptions they want to keep in the tax code. Are you asking him to retain the credit union tax exemption?
Here's the necessary contact info:
Sens. Jon Tester (D-Mont.) and Jerry Moran (R-Kan.), both members of the Senate Banking Committee, are preparing to introduce a bill that would provide some regulatory relief for both community banks and credit unions.
Although the title of the Senate bill will be the same as similar legislation in the House, the Community Lending Enhancement and Regulatory Relief Act (CLEAR Act), the bills are not identical. The House bill was introduced this Spring by Rep. Blaine Luekemeyer (R-Mo.).
Nevertheless, like the Luetkemeyer bill, the Senate CLEAR Act would provide regulatory relief to credit unions and community banks, though it focuses on banks. The Senate bill includes four key provisions, two of which would benefit credit unions. Those provisions would:
- Eliminate an escrow requirement for high-priced, first lien mortgage loans; and
- Provide a safe harbor from the Qualified Mortgage regulation to loans made by financial institutions under $10 billion and held in portfolio for more than three years.
News About Credit Unions
As the number of members joining credit unions continues to grow, keeping the momentum going may mean offering more than free checking accounts to keep them around. Through the first five months of 2013, total membership was up 1.4 million to 97.4 million, according to CUNA Mutual Group’s July Credit Union Trends Report, which tracked data through May.
The year-to-date increase in 2013 is roughly 300,000 above YTD 2012 results. While the membership count is up 2.3 million year-over-year and 3.8 million since the impact of Bank Transfer Day in 2011, credit unions might have to continue to do more to keep new members loyal.
“We do not believe these gains are sustainable unless new members are joining for access to credit,” said Dave Colby, chief economist for CUNA Mutual. “If they come for free checking only, we likely lose money on marginal deposits and the account servicing costs.” Making loans to these new members should be the top priority for the foreseeable future, Colby offered, adding, as it benefits the new members as well as the credit union’s bottom lines and capital growth.
The theme of this year's International Credit Union (ICU) Day, Oct. 17, is "Credit Unions Unite for Good," the Credit Union National Association announced. This year's theme conveys the credit union movement's shared vision of uniting behind its worthwhile cause.
The message speaks to the powerful global network of credit unions and the advantages that result from sharing challenges, experiences and solutions to better serve members, CUNA said.
Governmental Affairs News
The Crossings is graciously donating green fees to a team of golfers for our VACUPAC tournament. Any team that signs up by Sept. 3 is eligible for the raffle. We have a great day of golf ready for you on Sept. 24, including a sit-down buffet of pulled pork and sides. Sign up here to play and to sponsor the event!
In a hearing held by a House subcommittee last week, trade groups representing technology companies shared their views on a point of keen interest to financial institutions: whether or not Congress should turn the hodgepodge network of existing state laws on data breaches into one, national law. Forty-six states have their own data breach notification laws.
While in principle these laws are similar (sensitive customer data must be encrypted and/or redacted; customers must be notified if their data might have been viewable by an unauthorized party), no two state data breach laws are exactly the same and many conflict with each other. (American Banker Online, July 22)
Financial Services/Marketplace News
The labor participation rate, the percent of the civilian population in the labor force, is expected to remain flat through at least the end of 2014, according to a new survey.
If true, this would mean the U.S. economic recovery will stay about where it is for another year and a half. Since the end of the Great Recession, the unemployment rate has improved primarily because of a drop in the labor participation rate and not the number of people getting new jobs. From 2006 to 2013, the rate dropped by 2.75 percent, from 66.1 percent to 63.4 percent.
According to a study by Macroeconomic Advisers of St. Louis, that is unlikely to change any time soon. Even before the recession the participation rate was expected to go down for what are called structural reasons. These are changes in demographics such as baby boomers' retiring and younger people staying in school longer. What exacerbated the drop was cyclical factors like people being laid off and giving up on finding a new job.
Sales of previously owned homes may have slowed, but don't take it as a sign that the housing recovery has hit a bump. On Monday, the National Association of Realtors reported sales fell 1.2% in June from the previous month; it warned higher home prices and mortgage rates could hit buyers in the coming months. Sales may indeed slow, but that probably will have less to do with higher costs than with the drop-off seen in purchases by big investors.
Firms such as Blackstone Group have been buying properties at deep discounts, with plans to rent them out until the time is right to sell them for a profit. That has gone on for more than a year, but now current homeowners looking to buy are returning to the market; they' re driving sales again.
It's a positive signal the housing industry is returning to normal, albeit very slowly: In June, current homeowners were the only group that saw its share of home purchases rise to a three-month average of 44.6% from the previous month's 43.8%, according to the Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey, which tracks home purchases by investors, current homeowners and first-time buyers. Meanwhile, investors' buying power in the housing market continued to slide.
In the second year of the U.S. housing recovery, the loans that helped trigger the housing bust are making a comeback. Applications in late June for adjustable rate mortgages rose to the highest level since 2008 after the Federal Reserve sent fixed rates surging by signaling it may curtail bond buying credited with pushing borrowing costs to the cheapest on record.
The average 30-year fixed-rate mortgage jumped 1.2 percentage points in mid-July from May to the highest level in two years, adding about $200 a month to payments on a $300,000 mortgage. (American Banker Online, July 24)
After five straight months of improvement, mortgage delinquencies rose dramatically in June. The national delinquency rate is 6.7 percent, up nearly 10 percent from May and the highest level since February, according to a report from Lender Processing Services.
This data follows another read on the mortgage market showing that nearly half of the loans modified in 2009 under the Obama administration's housing rescue program defaulted again.
Education & Networking Opportunities
Can you believe the East Coast Marketing Conference is just seven weeks away? We'll be in the beautiful city of Asheville, North Carolina at the famous Grove Park Inn. Have you made your reservations? Don’t miss out on reserving your room at this historical hotel. Once our block of rooms are gone, you may not have access to that low room rate.
And a reminder: Don’t forget our after-hours Paint & Mingle night.
We return to Williamsburg for this year's Fall Compliance Conference on Oct. 16-18. Topics will include fair lending and internal/external fraud prevention.
[learn more] (PDF, 84kb)
News From Credit Unions
ABNB is pleased to announce that it will be donating more than $84,000 to the Children's Hospital of the King's Daughters through Children's Miracle Network Hospitals from the proceeds of its 10th Annual Fishing Fest. Nearly 130 participants along with top local radio personalities gathered on June 21 for a half-day fishing excursion out of Rudee Inlet, followed by a barbecue luncheon.
Join the Roanoke Valley Chapter for a day on the links to benefit the Virginia Credit Union Political Action Committee (VACUPAC). Proceeds will help the chapter meet its 2013 VACUPAC goal and support the governmental affairs and advocacy mission of Virginia's credit union system.
Location: Hanging Rock Golf Club
Date: Friday, Aug. 23
Time: 8 a.m. registration; 9 a.m. shotgun start.
Lunch will be provided and follows play.
Registration fee is $75 per golfer and a number of sponsorship opportunities are available for credit unions and their business partners!
[Download the tourney packet for details] (pdf, 944kb)
Note new date! 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 Miracle Network Hospitals. Sponsorships are also available, ranging from $250 to $1,000.
Financial marketers often assume Gen Y is the most likely segment to open checking accounts online. Turns out that’s not true. When a community bank recently decided to deploy an online account opening solution, their VP of marketing said their primary rationale was that this method was what younger consumers preferred.
This is a reasonable assumption, because young consumers are indeed more digitally centric than older segments of the population. But…There’s an adage about online buying behavior: Consumers are only comfortable purchasing products or services online that they completely understand.
And the reality is that many younger consumers shopping online for banking products have little- to no experience with banking products.
The new Javelin study is blunt: consumers crave online and mobile account opening but financial institutions are stumbling and uncertain in their embrace of this trend.
And that is a mistake, suggested Javelin’s Mark Schwanhausser, director, Omnichannel Financial Services, and an author of the report. Financial institutions, he suggested, need to rethink the account opening process and what it means to both the institution and the consumer.
The report notes: “The fact that 88.5 million Americans attempted to open an account online or with a mobile device in the past 12 months underscores how far digital account opening has come. Nonetheless, its potential remains largely untapped.”
A key finding in the Javelin research is this: “Digital account opening is forcing face-to-face bankers to evolve.” Financial services executives have traditionally seen in-branch account opening as the key that unlocked selling other products and so the question is, when consumers open online, how to sell them?
Answers won’t necessarily come easy, suggested Schwanhausser in an interview, but they will have to come because a growing number of consumers want to open accounts without a branch visit.