CURRENT Newsletter | 28 Feb 2013
- Sen. Warner, House Majority Leader Cantor & Other Delegation Members Address CU Advocates at Congressional Luncheon
- Governor Signs Credit Union Legislation
- Durbin Exemption Fails to Protect Credit Unions From Impact
- Annual Meeting Early Bird Registration Ends Friday, Register Now and Save Big!
- CU Miracle Day Presented with Wegner Award
- Survey: Life's Big Moments Happening Later, Taking Longer
- Home Prices Shoot Higher
- Young Adults are Too Broke to Get Loans
- The Smoking Hot Market for ‘Gently-Used’ Cars
- Americans Anxious About Retirement
- March 5 Webinar: What You Need to Know about Guarantors, Co-Signers, Personal Guarantees
- March 6 Webinar: Fair Lending Comparative File Review
- March 7 Webinar: The 'Anonymous' Bank Hack - Lessons Learned & Actions to Take Now!
- Compliance Webinar March 13
- Justice FCU Offers Special Assistance for Members facing Federal Government Sequestration
- Northwest FCU Offers Zero-Interest Loans to Members Affected by Sequestration
- Chartway Federal Credit Union Announces 2013-2014 Board of Directors
- Belvoir Federal Hosts 4th Annual Family Fun Day
- CUNA's Bill Cheney to Speak at March 14 NoVa Chapter Meeting
- Tidewater Chapter Meets March 14
- Richmond Chapter to Host March 23 Charity Bowl-A-Thon
- Bank Earnings in 2012 Were Second Highest on Record, FDIC Says
- Major Banks Aid in Payday Loans Banned by States
- How Risky Is Mobile Banking? Depends on Customer Behavior
- Google Glass Could Spur Mobile Banking on Steroids
Sen. Warner, House Majority Leader Cantor & Other Delegation Members Address CU Advocates at Congressional Luncheon
More than 120 credit union advocates from around the Commonwealth converged in Washington Wednesday for the League’s annual Congressional Luncheon. Most of Virginia’s delegation attended the event. Many of the comments made by the lawmakers at the event centered on the upcoming prospect of sequestration and the nation’s debt.
They all found common ground in praising credit unions for their work on behalf of their members and communities. [read more] (via The Advocate Blog, Feb. 28)
[related: GAC Brings CUs To Washington At 'Critical' Time: House Majority Leader Cantor]
[related: Sen. Warren: CU 'Reliable' Model a Bright Spot In Economy]
[related: Waters Pledges Support For CU Charter Enhancement Bills]
[related: Boehner Zeroes In On Tax Reform At CUNA GAC]
Governor Signs Credit Union Legislation
League President Rick Pillow reports that the House versions of our two parity bills - HB 1351 and HB 1686 – have been signed by Gov. Bob McDonnell. They will take effect in July.
We thank all the credit union advocates who helped with our General Assembly efforts this year. Your efforts helped ensure our legislation marched through both chambers without opposition. (via The Advocate Blog, Feb. 21)
Durbin Exemption Fails to Protect Credit Unions From Impact
Roughly 15 months after the Durbin amendment went into effect, the controversial legislation that capped debit card interchange for issuers with over $10 billion in assets has painted a mixed picture for most credit unions.
Regulations implementing the Durbin amendment came into effect Oct. 1, 2011. In the shadowed part of the picture, interchange rates per debit card transaction appear to be definitely falling, according to payment processor and CUSO executives who track debit trends. In the lighter part of the image, overall debit interchange income has not fallen as much or has actually risen as credit unions added more debit cards or enacted programs to hike debit card usage.
But the executives maintain that despite that lighter side, the overall debit interchange picture remains darker than they would like because at some point credit unions will reach the limit of the number of new cards they can issue or the number of times their members can use the cards while the debit interchange rates will remain capped and other market changes the amendment mandated that the executives said hurt credit union interchange income will remain in place. [read more]
Annual Meeting Early Bird Registration Ends Friday, Register Now and Save Big!
Don't forget: Early bird savings for the 2013 Annual meeting ends March 1, so register now!
Among the 14 education sessions on tap: Your League's Robert Sparrow will deliver Financial Literacy Training for Volunteers.
Each director, regardless of background, has an obligation to understand the credit union’s financial condition. Your League Compliance Team can help board members and volunteer officials meet the NCUA's financial literacy requirements.
CU Miracle Day Presented with Wegner Award
Credit Union Miracle Day (CUMD) was presented a Herb Wegner Memorial Award as Outstanding Program on Tuesday at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C. Credit Union Miracle Day (CUMD), through its family of races benefiting Children's Miracle Network Hospitals, has made a significant impact in the credit union industry, said NCUF.
CUMD is the largest national credit union event for Credit Unions for Kids, a nonprofit collaboration of credit union organizations engaged in fundraising activities to benefit the hospitals. Since 2002, Credit Union Miracle Day has generated more than $5.5 million for 136 Children's Miracle Network Hospitals nationwide.
News About Credit Unions
SBA to Expand Access to Loan Programs
The Small Business Administration is considering a series of rule changes that it hopes will encourage more lenders and business owners to use its loan programs.
In a notice published in the Federal Register Monday, the SBA proposed streamlining the application process for its 7(a) and 504 loan programs and broadening the definition of small business so that more companies could qualify for its programs.
Compliance/Regulatory Affairs News
'We’ve Only Just Begun:' NCUA, CFPB on Consumer Protections
In a lively GAC breakout session chaired by CUNA Deputy General Counsel Mary Dunn, top officials from the Consumer Financial Protection Bureau and the NCUA made it clear that the federal government’s efforts to better protect consumers in their financial dealings are not going away, indeed they are likely to intensify.
But the showstopper quote came from panelist Marcus Schaefer, CEO of the $1.6 billion Truliant Federal Credit Union in Winston-Salem, N.C.: “We [in credit unions] have the same mission as CFPB,” which he defined as heightening consumer protections against unfair practices of some financial services providers.
Matz Tells GAC: A 'New' NCUA Is Coming
National Credit Union Administration Chairman Debbie Matz Monday announced her plan for a "new" NCUA, one that will be more responsive to emerging risks, industry challenges and credit unions' needs. She delivered her message in a keynote address this week at the Credit Union National Association's 2013 Governmental Affairs Conference.
"We're modernizing and revitalizing NCUA for an industry that is newly vibrant, increasingly complex and rapidly changing," Matz said. "NCUA is reassessing and retooling our business model. The rules of the road that guided credit unions in earlier decades may not meet your needs or your members' needs today. We must stay ahead of the curve."
Governmental Affairs News
Should Credit Unions Have to Pay Income Tax?
Bankers are certainly gloating today. Their recent ad campaign calling for the taxation of credit unions garnered the attention of Time.com, which ran an article titled, "Should Credit Unions Have to Pay Income Tax?" It tackles any number of weighty issues for credit unions, including service to those of modest means and member business lending.
Senate Confirms Jack Lew as Treasury Secretary
The Senate confirmed White House Chief of Staff Jack Lew to serve as the next Treasury Secretary by a vote of 71-to-26 on Wednesday night. Lew, who will be the 76th Treasury Secretary, has held a number of key government positions, including serving as director for the Office of Management and Budget twice. (American Banker Online, Feb. 28)
Financial Services/Marketplace News
Survey: Life's Big Moments Happening Later, Taking Longer
Some major purchases and subsequent life events are being delayed as credit union members – especially younger ones – are taking longer to make decisions, a survey released this week has found. TruStageTM, the consumer brand of CUNA Mutual Group, released a survey of more than 1,600 credit union members and asked about major financial life events they face in 2013.
The survey focused on the financial decisions members made regarding vehicle purchases, home buying, the birth of a child and planning for college and weddings. The survey uncovered several enlightening generational trends when it comes to making major life purchases and decisions.
Home Prices Shoot Higher
The housing market recovery picked up steam as prices shot up 7.3% in 2012, according to a closely-watched reading released Tuesday. The report from S&P Case-Shiller covered home prices across 20 major housing markets nationwide in the final three months of the year.
The home price increase marks the third straight quarter of year-over-year gains in prices. Before the market began to turn around, there had been only two quarters over the previous five years that showed improved pricing. [read more]
Young Adults are Too Broke to Get Loans
Young adults are in less debt than they were a decade ago, but that's not a good thing. It's not because legions of Americans under age 35 have suddenly become fiscally responsible. It's more likely that their shaky economic foundations either prevent them from qualifying for a loan or even thinking about applying for one, according to those studying the trend. [read more]
[related: Bernanke: 6% Unemployment Rate Still 3 Years Away]
[related: 10 Best Ways to Earn More Interest on Your Savings] (credit unions are featured!)
[related: US Economy Expanded, Barely, at End of 2012]
[related: 1 in 4 Americans Have More Credit Card Debt than Savings]
[related: Americans Still Aren't Saving Enough]
[related: Millennials Are Paying Off Debt – But That’s Not Necessarily Good News]
The Smoking Hot Market for ‘Gently-Used’ Cars
Are you in the market for a fuel-efficient used car? Then you probably have competition--not just from other drivers, but from car dealerships. The auto industry had a strong year of new-auto sales in 2012, and another huge year for car purchases is expected for 2013. Forecasts call for more than 15 million new-car purchases in the U.S. this year, up slightly from 2012 and a sharp rise compared to the 10.5 million new vehicles sold in 2009.
Rising new-car sales generally mean an increased inventory of used cars, thanks to trade-ins. Yet as the Wall Street Journal reported recently, there don’t seem to be nearly enough “gently used” cars around to keep up with marketplace demand. Dealerships have resorted to stalking Craigslist for owners interested in unloading used cars--especially those that are just a few years old.
Used-car lot managers are paying good money for these secondhand wheels due to confidence that they’ll still be able to flip them quickly at a profit. [read more]
[related: New Cars Increasingly Out of Reach for Many]
[related: Auto Loan Delinquencies Hover at Historic Lows]
Americans Anxious About Retirement
Even as the economy slowly improves, the vast majority of Americans remain deeply worried about their ability to achieve a secure retirement, according to a new survey. The poll, released by the National Institute on Retirement Security (NIRS) at a conference on Tuesday, found that 55 percent of Americans are “very concerned” that the current economic conditions are harming their retirement prospects.
An additional 30 percent reported being “somewhat concerned” about their ability to retire. The level of anxiety Americans feel about their preparation for retirement has continued to peak in the recession’s aftermath, a finding that the poll’s sponsors said highlights the need for policymakers to bolster the nation’s retirement programs.
Education & Networking Opportunities
March 5 Webinar: What You Need to Know about Guarantors, Co-Signers, Personal Guarantees
There is often confusion regarding the distinction between a guarantor and a co-signer, and the situations where it is permissible to require a guarantor or a co-signer on a loan. Do you understand the legal prohibitions against requiring a spouse to be a guarantor or co-signer?
Besides reviewing the related laws and regulations, our March 5 webinar will explain the proper procedures to use when evaluating the use of a guarantor or a co-signer and when proving that applicants applied for joint credit. This webinar will also address the proper procedures to obtain a security interest in jointly-held collateral while not violating the laws and regulations.
March 6 Webinar: Fair Lending Comparative File Review
Although cases of overt discrimination are few and far apart, disparate treatment can happen inadvertently. Awareness and periodic monitoring of lending procedures can lessen the possibility of fair lending issues in your credit union. Examiners expect credit unions to conduct ongoing fair lending comparative file reviews. Our March 6 webinar will walk you step-by-step through a comparative file review and provide worksheets and a report format to make it easier.
March 7 Webinar: The 'Anonymous' Bank Hack - Lessons Learned & Actions to Take Now!
On Feb. 4, the world learned of a large-scale data breach involving approximately 4,600 bank executives. The hacktivist group, known as “Anonymous,” claimed responsibility for this incident and posted data publicly on the Internet. It has since been confirmed that the publicized information was obtained from the Federal Reserve’s Emergency Communications System (ECS).
Our March 7 webinar will provide some additional details about the breach and why this hack is more important than you may realize. [learn more]
Compliance Webinar March 13
Your League's Compliance Team will be hosting a free webinar on March 13 at 2:30 p.m. The webinar will cover the latest compliance hot topics. Register by emailing firstname.lastname@example.org.
News From Credit Unions
Justice Federal Credit Union Offers Special Assistance for Members facing Federal Government Sequestration
Justice Federal Credit Union is ready to assist their Federal government members that are threatened with government furloughs. The credit union announced that it will offer all employees from the Department of Justice and the Department of Homeland Security special assistance.
Existing members with direct deposit will be offered special unsecured loans up to $10,000 at a rate of 0% for the first 60 days. After that time, the rate will convert to 4.90% and the term will be 24 months.
Credit Union Offers Zero-Interest Loans to Members Affected by Sequestration
Herndon-based Northwest Federal Credit Union will provide no-interest loans up to $10,000 to credit union members who may be furloughed because of massive federal budgets cuts scheduled to take effect on Friday.
In addition to zero-percent loans, the credit union also will waive early withdrawal penalties on any certificate of deposit for members who need immediate access to their savings.
Chartway Federal Credit Union Announces 2013-2014 Board of Directors
On Feb. 21, Chartway Federal Credit Union held its 54th Annual Meeting at its Corporate Center in Virginia Beach. During this time, four individuals were elected to the Board: Judy Sparrow, Bob Holmes, Melvin Mizelle and Richard Ahlborn.
Following the Annual Meeting, the Board of Directors met to hold an organizational meeting - during which time, the following slate of officials was established:
- Wayne Foshay (Chairman of the Board)
- Judy Sparrow (1st Vice Chairman)
- Bob Holmes (2nd Vice Chairman)
- Melvin Mizelle (Treasurer)
- Lou Gull (Secretary)
Belvoir Federal Hosts 4th Annual Family Fun Day
On Feb. 23, Belvoir Federal Credit Union hosted its 4th Annual Family Fun Day located at the South Post branch on Fort Belvoir.. The event welcomed hundreds of parents, students, and military members who enjoyed a cookout, entertainment from BIG 100.3 Classic Rock, an inflatable Money Machine, and activities for children. [read more]
CUNA's Bill Cheney to Speak at March 14 NoVa Chapter Meeting
Credit Union National Association President/CEO Bill Cheney will be the featured guest speaker at the NoVa Chapter's March 14 meeting. Location: Marriott at Fair Oaks (11787 Lee Jackson Memorial Highway, Fairfax 22033). Time: 5:30 p.m. networking; 6 p.m. meeting; 6:30 p.m. dinner; and 7:30 p.m. speaker. Please RSVP by March 11 to email@example.com.
Tidewater Chapter Meets March 14
Kevin Paasch, of CommonWealth Financial Partners, will offer a program titled, "How to Increase Non-Interest Income, Decrease Expenses and Increase Yield on Investments" at the Tidewater Chapter's March 14 Meeting.
Location: Greenbrier Country Club. Time: 6 p.m. social; 6:30 p.m. dinner and meeting.
Cost: $30 per person if registration is received by March 6; $35 per person if received after March 6. Make your reservations early! To RSVP contact Ginnie Riddle by email at VRiddle@bayportcu.org or by phone at 757.873.4047.
Richmond Chapter to Host March 23 Charity Bowl-A-Thon
The Richmond Chapter of Credit Unions’ Community Involvement Committee will host its annual Bowl-A-Thon in support of Children's Miracle Network Hospitals on March 23. The fundraiser begins at 9 a.m. with registration and a 10 a.m. game time at Uptown Alley; located at 6101 Brad McNeer Pkwy, Midlothian, 23112.
What Consumers Want in PFM Tools (Hint: Not Pie Charts)
The 21st century called -- it's over for the Quicken-like personal finance management (PFM) user experience that originated nearly four decades ago. "The PFM of 1980 is not the PFM of 2013 and beyond," Mark Schwanhausser, director of multichannel financial services at Javelin Strategy & Research, tells BTN.
"The old definition won't give [banks] the acceptance that they want. …If you stick to an idea that PFM is a Quicken-like tool or bury [PFM] in a tab online, count the 12 people using it." Indeed, a broader definition of what software features fit into the PFM category is needed in order to attract a larger audience to what has been a niche service to date, finds new research announced Wednesday by Javelin.
In its latest study, Javelin estimates that 21% of U.S. consumers (or 49.3 million adult users) mix and match PFM software from online banking, desktop software and outside websites like Mint.com, while only 8% of consumers (or 18.9 million U.S. adults) use bank or credit union PFM to date. The research is primarily based on data from an online sample of 3,000 consumers in August 2012.
What consumers said they want most is a feature some banks, like Citi, already allow: the ability to pull information from all accounts into one place. Indeed, 49% of respondents expressed desire to use such account aggregation capability, according to Javelin's data. However, consumers also expressed interest in tools that offer deeper insights and guidance into their everyday finances, which most financial institutions have yet to launch. (American Banker Online, Feb. 27)
News About The Competition
Bank Earnings in 2012 Were Second Highest on Record, FDIC Says
Banks and thrifts earned $34.7 billion in the fourth quarter to close out 2012 with the second biggest full-year profit ever, the Federal Deposit Insurance Corp. said Tuesday. The annual net income of $141.3 billion last year was a 19% increase from the previous year's earnings, and trailed only the 2006 total, according to the FDIC's Quarterly Banking Profile.
Major Banks Aid in Payday Loans Banned by States
Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.
With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.
While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals. [read more]
How Risky Is Mobile Banking? Depends on Customer Behavior
Smartphone technology, thanks to consumer demand, is poised to become the most significant technology disrupter since the Internet and will forever change how financial institutions serve consumers.
Smartphones appeal to FI executives because of their labor-saving potential and because they provide another point of competitive distinction as banks race to create innovative handheld applications. Given the recent cyberattacks on U.S. banks however, one might ask "how safe is smartphone banking?"
The answer to that question – indeed to the overall profitability of smartphone banking itself – lies with the consumer. One threat challenging the success of smartphone applications has to do with the physical location of the consumer.
If their smartphones are operated through cellular data networks, then consumers are, for the most part, immune to cyberattacks. That's because major carriers are adding encryption to their voice and data service in anticipation of a spike in smartphone-based activity. The new encryption initiatives will support smartphones and tablets.
If, however, smartphone connections are made through Wi-Fi networks, such as wireless access points in the home, at coffee shops or in airport lounges, then the risks of unsafe networks emerge. It is the endpoint of any Internet connection where risks rise dramatically and, for smartphone users, Wi-Fi can make consumers vulnerable to hacking attacks that may result in the theft of their login credentials. (American Banker Online, Feb. 28)
Google Glass Could Spur Mobile Banking on Steroids
Since their inception, computers have morphed. Once bulky, now small. Once obvious, now discreet. Soon they will be wearable. So, when you walk down the street, a message will brilliantly appear in the corner of your eyewear:
Look, an ATM! What seems like a futuristic fantasy could become reality later this year. Google's latest foray into wearable computing, Glass, is ripe for financial services innovation. It is similar to what you'd imagine to be the heads up display inside a fighter pilot helmet.
But the internet-connected head-mounted computer, which responds to voice commands, takes advantage of a translucent square piece of, well, glass sitting on its edge and mounted frames. Some of the mobile app features financial institutions already offer, including augmented reality, account information lookups, and geolocation, could eventually be incorporated into Glass. (American Banker Online, Feb. 26)
Human Resource Management
It's Full Speed Ahead for Health Care Reform Compliance
The outcome of the presidential election and the U.S. Supreme Court’s June 2012 decision to uphold the Affordable Care Act should signal a green light for employers to move full-speed ahead to comply with new health care reform mandates and those going into effect later in 2013 and beyond, a CUNA Mutual Group product executive told a CUNA Governmental Affairs Conference audience Tuesday. [read more]