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CURRENT Newsletter | 27 June 2014

Jun 27, 2014 by Lewis Wood

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

Headline News

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Chapter News

Marketing News

Headline News

League Endorses Barbara Comstock in 10th Congressional District Race

The Virginia Credit Union League yesterday announced its endorsement of Barbara Comstock, who is seeking Virginia's 10th Congressional District seat. The endorsement follows face-to-face interviews between candidates for the 10th District seat and representatives of the League’s Board of Directors and Governmental Affairs Committee.

The candidates also completed a questionnaire that covered a variety of issues of importance to credit unions and their members, including tax reform, financial literacy and member business lending.

"Credit unions have had a long and productive relationship with Del. Comstock during her tenure in the Virginia House of Delegates," said Rick Pillow, president of the Virginia Credit Union League. "As a member of the key Virginia House committee that hears credit union legislation, she's proven time and time again that she is a friend to credit unions and their members. We know we can count on her to continue protecting the interests of credit union members as a member of Congress."

[READ MORE]

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Listening Session Reveals Risk Weight Changes

NCUA Chairman Debbie Matz said the National Credit Union Administration will likely reduce the risk weights on five specific asset classes in its final risk-based capital rule. Mortgages, member business loans, investments, CUSOs and corporates will get a second look and their risk weights will be “presumably lowered,” Matz said Thursday at the Westin Bonaventure Hotel in downtown Los Angeles.

Approximately 150 credit union executives attended the event, along with a large contingency of NCUA employees that included all supervisory examiners in Region V. The NCUA will review every risk weight, Matz said, not just the five specifically mentioned. However the five are “most obvious for change,” she added.

During the question and answer session, many credit union executives expressed concern about how the proposed RBC rule also requires compliance with compliance risk and interest rate risk components, and not just credit risk.

[READ MORE]

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Selfie Campaign Launches to Celebrate CUs' 100-Million Member Milestone

Collecting and displaying the faces of thousands, if not millions, of credit union members through "selfies," and to show the face of the credit union movement as it closes in on the milestone of 100 million memberships, is the aim of a new website unveiled today by the Credit Union National Association and the state credit union leagues.

The website,  www.americascreditunions.org , allows credit union members to upload their selfies--those ubiquitous photos or videos people take of themselves, typically with a smartphone or tablet--and post to the site.

The pictures submitted will be posted to the website. The website is part of CUNA's overall "100 Million Credit Union Memberships" campaign, aimed to draw attention to credit unions reaching the 100 million membership mark later this summer.

[READ MORE]

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CUNA Letter to WSJ Editor Published on Interest-Rate Risk

The Credit Union National Association's letter to the editor in response to the Wall Street Journal's article on interest rate risk was published June 21. The headline that appeared with the letter; Credit union risk is well-managed, and the subhead, credit unions have always taken a conservative stance in their stewardship of member assets in managing interest-rate and credit risk, helped set the record straight about this important issue.

You’ll recall that National Credit Union Administration Chairman Debbie Matz raised the interest-rate issue in a June 6 WSJ story.

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Compliance/Regulatory Affairs News

New NCUA Interest Rate Risk Resource Page, Video Now Available

Interest rate risk poses a significant threat to the credit union system, and the National Credit Union Administration this week launched a new web resource page for credit unions to use to better understand and prepare for changes in interest rates and the risk those changes present.

The new page includes videos, charts showing trends that affect interest rate risk, and links to NCUA regulations and letters to credit unions, interagency guidance, and best practice resources. NCUA’s newest video about interest rate risk and the questions credit unions should answer is also posted on the resource page and NCUA’s YouTube channel.

[READ MORE]

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Governmental Affairs News

Roll Call Highlights CULAC as a Top-Giving PAC This Election Cycle

The Credit Union National Association's Credit Union Legislative Action Council said May was its largest month for giving this election cycle, according to a report by Roll Call. CULAC gave out $229,000 and raised $3,035,732 this cycle placing it in the publication's top five most-active PACs for the month.

Roll Call also highlighted the strongly bipartisan nature of CULAC contributions, with 50.39% of contributions going to Republican candidates and 49.46% going to Democratic candidates.

[READ MORE]

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Financial Services/Marketplace News

Car Loans Becoming the Next Bubble in Banking

Warning - Auto Loans could be the next bubble in banking! The OCC's Semiannual Risk Perspective indicates that credit risk is building in supervised national banks and federal savings associations after a period of improving credit quality and problem loan clean-up. So, is another bubble forming already?

It will depend upon whether the continued unemployment and jobs data acts to reverse the trends which have been building. We won't know that for another few months.

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Consumers Finally Start Ramping Up Card Debt Again

U.S. consumers, whose use of revolving debt fell by more than 15% once the Great Recession hit, are finally re-embracing the credit card. The thaw appears to be in its early stages, but the trend line is now clear: borrowing with plastic is picking up steam.

"Going forward, we are expecting faster balance growth," says Mustafa Akcay, assistant director of consumer credit economics at Moody's Analytics. "U.S. consumers are becoming more comfortable in holding credit," adds Scott Anderson, the chief economist at Bank of the West.

April data from the Federal Reserve Board showed that revolving consumer credit jumped at a 12.3% annual rate, after accounting for seasonal differences. But even if that report overstated the magnitude of the rebound, as some observers suspect, other estimates also show that plastic-fueled debt is growing at rates unseen in several years. (American Banker Online, June 26)

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Consumers Said to Remain Befuddled on Overdraft Fees

Four years after banks were required to ask customers if they want overdraft protection, most consumers still don't know whether they've been enrolled in those plans, according to an advocacy group's new report. Because of the widespread confusion, the Consumer Financial Protection Bureau should require banks to be clearer in how they communicate with their customers about the optional overdraft plans.

That is one of several recommendations made by the Pew Charitable Trusts in its latest report on the banking industry. Additionally, banks should lower the fees they charge customers for overdraft protection to a "reasonable" level, Pew says. In Pew's survey results, more than half of respondents said they paid at least $30 in overdraft fees for each time they lacked sufficient funds. Twenty percent said they paid more than $100. (American Banker Online, June 27)

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Education & Networking Opportunities

League Payments Workshop Aug. 13

The payments marketplace continues to evolve. Join us Aug. 13 in Richmond at your League’s Payments Workshop for an overview of the legislative, regulatory, legal, and market forces shaping payments. The Credit Union National Association’s Michele Johnson will lead a discussion regarding the latest in payments, including:

  • Debit interchange regulation and the NACS v. Federal Reserve lawsuit
  • The credit card interchange settlement
  • Payments security, including EMV, encryption, and tokenization
  • Mobile payments
  • Developments in the States: Including EMV and surcharging

[LEARN MORE]

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League Offers ‘Board Boot Camp’ Aug. 20

The pressure of being a credit union board member is increasing. Your League’s Aug. 20 Board Boot Camp will provide you the tools and resources to help you better understand the expectations of today’s board member. Sessions will include Board Governance and Liability Issues, Volunteer Recruitment and Development, Internal Fraud, and Understanding Your Credit Union’s Financials.

[LEARN MORE]

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Save the Date: Fall Compliance Conference Oct. 8-10

Join us in Williamsburg for the League's Fall Compliance Conference Oct. 8-10. Topics will include Security Breaches/Cyber Security and an update on federal compliance issues.

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News From Credit Unions

Young Northwest Federal Members Deposit More Than $150,000

Youngsters throughout northern Virginia joined Northwest Federal Credit Union to celebrate National Credit Union Youth Week, an event designed to help area youth learn about money and the value of saving. During the event, Northwest Federal youth members made nearly 1,300 deposits, totaling $156,835. The event also resulted in the opening of 51 new youth accounts.

[READ MORE]

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DuPont Community CU Recognized for Online Banking Excellence

A leading international provider of electronic payment and banking systems, ACI Worldwide, recently awarded DuPont Community Credit Union (DCCU) the 2014 Online Banking Excellence Award for DCCU’s seamless online banking system conversion last year.

[READ MORE]

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Norfolk Southern Employees Credit Union Merges with NAE Federal Credit Union

On May 10, 2014, Norfolk Southern Employees Credit Union agreed to merge with NAE Federal Credit Union. Founded in 1928 to serve the employees of Norfolk Southern Corporation, the credit union grew to serve more than 950 members and held more than $2 million in assets at the time of the merger.

[READ MORE]

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Two ABNB Members Receive 2014 Jack E. O’Connor Memorial Scholarships

ABNB Federal Credit Union is pleased to announce that two of its members, Julia Rodil and Sarah Williams, were chosen as recipients of the 2014 Jack E. O’Connor Memorial Scholarship offered by the Tidewater Chapter of Credit Unions.

[READ MORE]

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Belvoir FCU Announces New Branch Managers

Belvoir Federal Credit Union has promoted two employees and hired a new individual to serve as Branch Managers.

[READ MORE]

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Chapter News

Richmond Chapter Publishes Latest Newsletter

The Richmond Chapter has posted its latest newsletter to its website: http://www.richmondccu.org/. See the link on the left column navigation window.

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Marketing News

In Courting Millennials, Think Transactions Before Deposits

Banking relationships traditionally begin with deposit accounts, but changes in retail banking, combined with a sputtering economy and the explosion of new technologies, have spawned a new breed of customers who are focused on transactions first. These transaction-oriented customers tend to be young — under 35 — and seek incremental financial value from everyday purchases and interactions versus traditional banking relationships.

This group has never experienced high or even normal interest rates, so deposit accounts mean little to them. They've grown up with cards and EFTs, not checks. And the Great Recession limited their demand for mortgages, car loans and other traditional loan products. Even when economic prospects improve and interest rates rise, their entrenched transactional habits may prevent banks from establishing traditional relationships with them. (American Banker Online, June 25)

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