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CURRENT Newsletter | 27 February 2014

Feb 27, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Governmental Affairs News

Financial Services/Marketplace News

News From Credit Unions

Chapter News

Financial Education News

Community Involvement

Marketing News

News About The Competition

Headline News

Risk-Based Capital Rule Comments Due 90 Days From Today; Special Education Session at League Annual Meeting to Cover NCUA Proposal

The risk-based capital rule proposed by the National Credit Union Administration at its February open board meeting -- and hotly discussed by credit unions since – has been published in the Federal Register, signaling thestart of the 90-day comment period. The Credit Union National Association urged the NCUA from the start to address credit unions' "deep-seated concerns" regarding the risk-based plan. In fact, CUNA President/CEO Bill Cheney encouraged the regulators earlier this month to hold public hearings on the plan. [read more]

> As we announced this week, we've also scheduled a special session on this topic for April 3 at the League Annual Meeting. Presenters for this session will be the movement's foremost experts (outside of NCUA) on this proposal – CUNA's Mary Dunn and Bill Hampel. You need not be registered for the League Annual Meeting to attend this one education session, but we do ask – whether registered for the Annual Meeting or not – that you drop us an email at pr@vacul.org to let us know you plan to attend.

This will aid us in booking sufficient meeting space.
[related: CUNA, League Announce Tool to Drive Home CU Compliance Concerns: GAC]

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Andy Janning Joins Annual Meeting 2014 Lineup; Early Bird Deadline Feb. 28

Andy Janning joins our presenter's list at the League Annual Meeting. The popular training coach will keynote our Lunch and Learn session on April 3, with a session titled "Listen, Fight, Praise, Lead: Proven Methods to Solve Problems, Lead Well, Improve Relationships, and Get Stuff Done." Based on the leadership and communication model that earned its creator three nominations for the Nobel Peace, Prize, Listen, Fight, Praise, Lead will equip you with:

  • A proven listening technique that’s been used to broker peace treaties between warring nations…and was even the basis of an entire Everybody Loves Raymond episode,
  • Leadership lessons from some of the most famous tales ever told, and
  • A simple three-step method that works for either confronting or praising anyone.

Don't miss it! And don't forget, the early bird discount for the League Annual Meeting ends this Friday, Feb. 28!

[Learn more and register]

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Still Time to Register, Help Sponsor Foundation's April Charity Golf Tournament

The Credit Unions Care Foundation of Virginia will host its annual charity golf tournament on April 2! There's still time to register to play or to sponsor the tournament.

> Learn more here about sponsorships.
> Register to play.

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Delegates to League Annual Meeting to Vote on Proposed Amendments to Articles of Incorporation, Bylaws

The League Governance Committee is proposing amendments to the Articles of Incorporation and Bylaws of the Virginia Credit Union League. Delegates to the League Annual Meeting will be voting on the amendments. Learn more here.

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Winners Announced in League Social Responsibility Awards

The Virginia Credit Union League is proud to recognize award winners in our social responsibility contests. Credit unions earned recognition in the following programs:

- The Desjardins Financial Education Awards recognize the leadership of individual credit unions and chapters (or groups of credit unions) on behalf of youth and adult financial education.

- The Dora Maxwell Social Responsibility Recognition Program promotes social responsibility among credit unions by formally recognizing their community service projects and charitable good works.

- The Louise Herring Award for Philosophy in Action promotes credit union's "People Helping People" philosophy by formally recognizing credit unions that demonstrate -- in an extraordinary way -- the practical application of that philosophy.

"Credit unions have a proud history of helping their members and working toward the betterment of the communities they call home," said Virginia Credit Union League President Rick Pillow. "Each year, we are amazed at the commitment of time, energy and resources our credit unions devote to community service projects, financial education initiatives and member-focused programs that truly exemplify our 'People Helping People' philosophy."

First Place Award winners in each asset category advanced to the national competition sponsored by the Credit Union National Association. National award winners were recognized this week at CUNA's Governmental Affairs Conference. All of our state-level award winners will be recognized at the League's 2014 Annual Meeting (April 2-4) in Williamsburg.

1st place Awards (State Level)

2nd Place Awards (State Level)

3rd Place Awards (State Level)

Tax Committee Staff Clarifies: No Intention to Impose Additional Tax on CUs -Including UBIT

The specific credit union tax status is left untouched in a tax reform plan released Wednesday by House Ways and Means Committee Chairman Dave Camp (R-Mich.), and staff of the tax writing committee have clarified that the proposal has "no intention of imposing any additional taxes on credit unions." The discussion draft of the tax reform plan does not change or eliminate the specific credit union federal tax exemption. CUNA President/ CEO Bill Cheney said the association considered that to be "an endorsement of our long-held position that credit unions' cooperative, not-for-profit structure remains the bedrock upon which the tax exemption is built."

"Reinforcing our position over the past nine months were the actions by CUNA, state associations and credit unions, which together amassed 1.3 million contacts with lawmakers urging them 'don't tax my credit union,'" Cheney added.

However, as CUNA experts were reviewing the details of the discussion draft of the proposal yesterday afternoon, they found that the provisions addressing taxes on unrelated business activities (or UBIT) seemed to subject federal credit unions to the tax for the first time. CUNA senior staff, early Wednesday evening, contacted senior staff of the House Ways and Means Committee, pointing out the impact of the UBIT provisions on federal credit unions and asking why the provision had been applied.

"As a result of our discussion, the Ways and Means Committee senior staff members told us that it was never their intention to impose any additional taxes on federal credit unions," Cheney said after the discussion. "Further, they told us that anything that would impose taxes on credit unions--including UBIT--was unintentional and that is why they have established a process that includes release of a discussion draft."

[read more]

[related: Risk-Based Capital Rule Comments Due 90 Days from Today]
[related: Millions Exposed to 'Don't Tax' Message by CUNA Social Media Blitz]

"This is good news indeed for credit unions," noted League President Rick Pillow. "But it is important we remember this is one step on a very long journey. We will continue to push for preservation of our tax exemption as we reach out to our Congressional delegation, and you can help us by providing the information we need to show how credit unions earn their tax exemption each and every day."

Our Reality Check and Community Involvement surveys take only a few minutes each to complete, but they provide valuable information about our service to members and our communities, information our lawmakers need and want to hear.

Help us out by completing your survey today!

And many thanks to the following credit unions for having already completed the Reality Check survey!

  • Fairfax County FCU
  • URW Community FCU
  • Richmond Fire Department CU
  • Freedom First CU
  • Argent CU
  • Member One FCU
  • Virginia United Methodist CU
  • PWC ECU
  • Celco FCU
  • Resources FCU
  • Chesterfield FCU
  • CommonWealth One FCU
  • Peoples Advantage FCU
  • Norfolk Fire Department FCU
  • First NRV FCU
  • DuPont Community CU
  • Fort Lee FCU
  • Park View FCU
  • Mountain Empire FCU
  • Assurance FCU
  • Blue Eagle FCU

And here are those that completed the Community Involvement Survey...Thanks!

  • Hopewell Chemical FCU
  • Bronco FCU
  • Park View FCU
  • Connects FCU
  • Argent CU

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News About Credit Unions

Credit Unions Share Low Income Strategies

Three credit union CEOs stressed that collaboration is key to successfully reaching out to low income communities during an afternoon break-out session at CUNA's Governmental Affairs Conference Tuesday afternoon. Paul Phillips, president/CEO of the $315 million Freedom First Credit Union of Roanoke, Va., Kathy Geary, president/CEO of the $155 million HEW Federal Credit Union of Alexandria, Va. and Patsy Van Ouwerkerk, president/CEO of the $2.1 billion Travis Credit Union of Vacaville, Calif., sat on a panel that was moderated by Gigi Hyland, executive director of the National Credit Union Foundation.

Phillips described how Freedom First cooperated with local non-profit organizations to put a credit union branch in a building the organizations would share in the most economically depressed part of the community.

[read more]

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Small CUs Often Overlook Two Money Pots, CEO Says

Small federal credit unions can improve their bottom lines by tapping into two often overlooked sources of funds, a CEO who has taken advantage of them told attendees a CUNA Governmental Affairs Conference. Debie Keesee, head of $10.4 million-asset Spokane Media Federal Credit Union, pointed to her institution's own success at becoming eligible for the grants, low-interest loans and other benefits that go with receiving a low-Income designation by the NCUA even though she was first told SMFCU didn't meet the member threshold.

Keesee said members who only had post office boxes listed as their mailing addresses weren't counted by NCUA. So she contacted them, got street addresses and Spokane Media was awarded the designation.

In December, NCUA said the number of credit unions classified as "low income" continued to rise, with more than 2,000 institutions across the nation now certified as low-income. To find out how close a federal CU is to low-income status, an institution can email NCUA's Office of Consumer Protection at dcamail@ncua.gov or call 703-518-1150.

To learn other ways than converting members' post office box listings to street addresses to get the designation, she advised contacting the Office of Consumer Protection and NCUA's Office of Small Credit Initiatives (oscuimail@ncua.gov) or by calling 703-518-1160.

Federal credit unions can also miss out by failing to apply for the small employer health insurance credit, according to Keesee. "It takes an hour's worth of time to fill out the necessary part of an IRS Form 990T. I got a $1,100 check from the IRS," said Keesee. (Credit Union Journal, Feb. 27)

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New CFPB Mortgage, Credit Card Rules On Horizon: CUNA

Credit unions should expect new Consumer Financial Protection Bureau rules on mortgage closings and credit reports this year, a panel at CUNA's Governmental Affairs Conference warned attendees Tuesday. CUNA Associate General Counsel for Regulatory Advocacy Jared Ihrig said the regulator is likely to come up with a framework in 2015 for the mortgage-closing process, which can require cumbersome documents for members to sign, and if they are unusually diligent, to review. The CUNA regulatory attorney is also predicting new CFPB rules on overdraft fees.

"A lot of credit unions rely heavily on overdraft income and a lot of members rely on overdrafts so they are not embarrassed at the grocery checkout line," he noted, adding the agency is concerned about credit unions automatically enrolling credit card holders in overdraft programs. (Credit Union Journal, Feb. 26)

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Governmental Affairs News

Royce to Intro New MBL-Related Legislation This Week

Legislation that would exempt certain housing loans from the member business lending cap will be introduced this week, Rep. Ed Royce (R-Calif.) told 2014 Credit Union National Association Governmental Affairs Conference attendees this morning. The bill, known as the Credit Union Residential Loan Parity Act, would exempt one-to-four-unit non-occupied dwellings from the cap.

"We should take a closer look at [the MBL regulation] and where it doesn't work, fix it," Royce said. "While this legislation is not a panacea to your biz lending woes it will provide relief," he added.

The regulatory relief measure would also help increase affordable housing stock, Royce said. These type of housing loans make up around 20% of CU MBL balances, he noted.

[read more]

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Financial Services/Marketplace News

Banks Report Steep Drop in Mortgage Originations

Retail single-family loan originations by banks and thrifts plunged 39% in the fourth quarter to the lowest level in five years, according to data released by the Federal Deposit Insurance Corp. on Wednesday. The agency said institutions originated $86.5 billion in single-family loans in the fourth quarter, down from $141.4 billion a quarter earlier and off 57% from the same point in 2012.

Refinancings were strong during the first half of the year and retail originations hit $196.6 billion in the second quarter. But the market has rapidly declined over the rest of the year. (American Banker Online, Feb. 27)

[related: New Homes Selling At Fastest Rate Since July 2008]
[related: Home Prices Rose 11.3% in 2013]

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Consumer Confidence Falls in February

U.S. consumer confidence sagged in February as expectations worsened, according to a private sector report released on Tuesday. The Conference Board, an industry group, said its index of consumer attitudes fell to 78.1 from a downwardly revised 79.4 in January. Economists in a Reuters poll had expected 80.0. The expectations index fell to 75.7 from a downwardly revised 80.8 last month. But the present situation index rose to 81.7, the highest since April 2008.

[read more]

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Most Americans Making 'Fair' or 'No' Progress in Savings

Stagnant wages, and prolonged unemployment and underemployment have meant that many Americans continue to struggle to save. Finding it difficult to build wealth through homeownership has also impeded many individuals and families from making progress in meeting their savings needs, according to a national survey released Monday.

The survey found that only about one-third of Americans say they're making "good" or "excellent" savings progress, while nearly two-thirds are making only "fair" or "no" progress. The survey found the issue for many Americans, regardless of income level, is the ability to spend less than they make and save the difference.

[read more]

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News From Credit Unions

Virginians Capture Trailblazer Awards from CU Times

Credit Union Times this week announced its 2014 Trailblazer Award winners, which feature two Virginians – Farifax County Federal Credit Union's Joe Thomas and Nicole Bowen!

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The Sports Backers Announce 5th Annual Connects FCU Corporate 4-Miler June 5

The Sports Backers announced last week that registration for the 5th Annual Connects Federal Credit Union Corporate 4-Miler is now open. This 4-mile corporate run/walk will be held at the Innsbrook Office Park finishing on Dominion’s campus on Thursday evening, June 5. This event is a perfect opportunity for employers to promote the message of employee health and wellness. In 2013, 225 companies from the Richmond area participated. Registration is now open at www.sportsbackers.org.

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Blue Eagle® Credit Union Sponsors St. Jude Radiothon with New Country 107.9

Blue Eagle® Credit Union is pleased to team up with New Country YYD 107.9 to sponsor a radiothon fundraiser for St. Jude. The radiothon will take place on New Country YYD 107.9 Feb. 27 & 28, 2014. Anyone can contribute during the radiothon by dialing 1.800.795.1800 or through an online donation link at www.newcountry1079.com.

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Belvoir Federal Provided Ft. Belvoir Fisher House with $1,000 in Gift Cards from AFFN

Belvoir Federal Credit Union in conjunction with the Armed Forces Financial Network (AFFN) awarded Fort Belvoir’s Fisher House $1,000 in gift cards from the 2014 AFFN “Thank You” Military Community Support Program. The AFFN Military Community Support Program is celebrating a milestone this year as the program, in partnership with AMBA Banks and DCUC Credit Unions, has donated over $2 million directly to U.S. Service Members and their families.

[read more]

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Chartway Federal Credit Union Announces 2014-2015 Board of Directors

Chartway Federal Credit Union, one of the largest credit unions in the country known for providing money-saving solutions and competitive rates, is proud to announce that on Thursday, Feb. 20, it held its 55th Annual Meeting at its Corporate Center in Virginia Beach. During this time, the following three individuals were elected to the board of directors: Wayne Foshay, George Sauer, and Bob Cook.

[read more]

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Chapter News

Tidewater Chapter to Host March 15 Workshop

All credit unions are invited to attend the Tidewater Chapter's March 15 Workshop in Norfolk. On tap are education sessions covering subprime lending, the NCUA's IT exam basics, teaching personal finance to young people, an update on EMV and the evolving world of payments, board member duties, and much more.

Location: Old Dominion University campus.

Time: Registration begins at 2 p.m.; dinner and door prizes will wrap up about 7:30 p.m.

Educational Investment: $75 per person until Feb. 28; $85 thereafter.

[Download the brochure here]
[Vendors/Business Partners: Be a Part of This Exciting Event! Learn more here

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Financial Education News

How Vacations Can Make Your Kids Financially Savvy

Vacation planning has special advantages as a vehicle for teaching money smarts, according to Stuart Ritter, a senior financial planner at T. Rowe Price. "Parents can try to engage them in college planning and other things, but vacations are very real, very immediate things that they are interested in," he said. 

Another advantage of using vacations to learn about money is that there are ways to involve kids with different levels of financial knowledge, Ritter said.

[read more]
> This might prove helpful for your members as an feature in your newsletter!

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Community Involvement

We Need Your Help: League Community Involvement Committee Seeks Financial Contributions for Annual Meeting Fundraiser

Please consider a financial contribution to aid us in purchasing items for our Charity Raffle (we're calling it the "Raffle-A-Rama") which will take place at this year's Annual Meeting (April 2-4 in Williamsburg). What we're asking...

  • Chapters: We're asking for a financial contribution of not less than $250.
  • Credit Unions ($100 million or more in assets): Please consider a financial contribution of at least $250.
  • Credit Unions (Less than $100 million in assets): Please consider a financial contribution of at least $50.

[read more]

> We would be most grateful for contributions mailed prior to March 7! Thanks!

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Marketing News

Coopera White Paper: 5 Misconceptions CUs Have about Hispanics

Misconceptions about the Hispanic market may be hindering credit unions' ability to better serve this growing demographic, according to a new white paper from Coopera. Written by CEO Miriam De Dios, the paper outlines five common misconceptions--ones that hamper progress for Hispanics and the businesses that want to serve them.

[read more]

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News About The Competition

Why the Bank Tax Proposal Matters (Even If It Won't Pass)

Congress is unlikely to pass a big bank tax into law this year, but House Republicans' surprising embrace of the idea suggests it is likely to return later to haunt the industry. Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, released a wide-ranging plan to reform the tax code on Wednesday, which includes a key provision charging a small quarterly tax on the largest financial institutions.

The move was a reversal from the GOP posture toward President Obama's own bank tax plan, laid out in his annual budget proposals dating back to 2010, which has been heavily criticized by Republican lawmakers and some Democrats. (American Banker Online, Feb. 27)

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