CURRENT Newsletter | 28 March 2013
March 28, 2013
- Statewide Awareness Campaign Webinar April 4; Video to Be Unveiled
- League Offers Online Info Tool on New Mortgage Lending, Servicing Regulations
- Annual Meeting 2013: Education, Networking and a Chance to Do Good
- CUNA To Testify At April 10 CU Burden House Hearing
- Sen. Warner Signs on to Privacy Notification Legislation
- Credit Unions Ranked Highly In Satisfaction Survey
- Small Banks Developing Ways to Compete Against Payday Lenders
- CU MBL Questions Answered In Regulatory Advocacy Report
- Website Recommends CUs For Short-Term Loans
News About Credit Unions
- aSmarterChoice Profile: Ensure You Get Noticed
- CUNA: Credit Union Hiring Returned to Historic Norms in 2012
- NCUF Opens 2014 Wegner Award Nominations
- SBA Gets Results from Overhaul of Loan Program
- 'Unite for Good' Prompting Discussion And Ideas
- CUNA Mutual Posts 4th Straight Year of Earnings Growth
Compliance/Regulatory Affairs News
Governmental Affairs News
Financial Services/Marketplace News
- U.S. Economy Climbs Off the Mat
- Do Millennials Stand a Chance in the Real World?
- Fiserv Launches Answer to Square
- Car Dealers Fight Back Against CFPB Auto Financing Rule
- Auto Loan Growth a Top Priority for Some CUs: TransUnion
- US Home Prices Rise in January by Most Since June 2006; Housing Recovery Strengthens
- Why Banks Love Debit Cards Again
- A Reward Credit Card for Those Who Carry a Balance
Education & Networking Opportunities
- NoVa Town Hall Set for April 3
- April 2 Webinar: Meeting the Requirements for Capital Adequacy and Contingency
- April 3 Webinar: The Key to Cross Selling and Member Retention
News From Credit Unions
- Freedom First Holds Groundbreaking Ceremony for West End Project
- NAE FCU Donates $6,000 to Make-A-Wish Foundation
- Fort Lee Federal Credit Union, AFFN Team Up to Help Richmond Fisher House
- Argent Credit Union Contributes Funds to Support the Lucy Corr Foundation
Financial Education News
News About The Competition
Exciting things are happening behind the scenes while your League is putting the final touches on the viral video and our collaborative website, www.QuitTheHit.com. We are excited to share with you the final products.
To ensure the viral video successfully directs the consumer to our website, www.QuitTheHit.com (launching soon!), we are conducting one last round of consumer testing on the video this week. You are invited to our webinar for the unveiling of the video and website on April 4 at 1 p.m.
This webinar will cover:
- Unveiling of the viral video and website
- Logos and other resources for the Campaign
- Specifics on the viral strategy and how your credit union can help make it even more successful
The Consumer Financial Protection Bureau (CFPB) has finalized a series of new and amended regulations that will significantly impact mortgage lending and servicing. The majority of the new regulations will not go into effect until January 2014, but there are a few that will go into effect as early as June 2013.
All credit unions engaged in mortgage lending or servicing should become familiar with the new regulations now to determine whether, and to what extent, their own lending and servicing activities will be affected. The new regulations are summarized in the document noted below, and the League’s compliance team has prepared an online tool that will help credit unions make sense of the new regulations.
To download the tool, logon to InfoSight (http://va.leagueinfosight.com/), click on the “VACUL Publications & Guidance” subheading in the left menu, and follow the instructions. Or, if you have your InfoSight logon information readily available, click here.
We've got a bit of everything on tap at this year's Annual Meeting (April 17-19 in Roanoke). With 14 educational opportunities, a host of networking options and a chance to do some good by either supporting the Credit Unions Care Foundation's inaugural golf tournament or by volunteering at a local food bank, you simply don't want to miss this event!
The Credit Union National Association expects to testify at an April 10 House Financial Services financial institutions and consumer credit subcommittee hearing on the regulatory burdens facing credit unions.
The credit union hearing, which is part of a 2013 series to study, in part, the impact of the Dodd-Frank Act, will take place one week before an April 16 hearing on bank regulatory issues. John Magill, CUNA Executive Vice President of Government Affairs, said a hearing focused on credit union issues is highly significant.
"We're breaking new ground here. Years ago, we would have been a side dish," he said. Even at a member business lending hearing in the last Congress, credit unions shared the day with banks. "Not so this time," he noted. CUNA is working to select a witness for the credit union regulatory burden hearing. [read more]
In a joint letter with other financial trade groups, CUNA urged the Senate to vote on bipartisan legislation (S. 635) to end the redundancy of privacy notices "without further delay and amendment." Sen. Mark Warner's office reports that he was one of the original co-sponsors.
The bill is similar to legislation that passed the U.S. House (H.R. 749) recently by voice vote and with broad bipartisan co-sponsorship, including two Virginians: Reps. Robert Hurt (R-5th) and Jim Moran (D-8th).
Credit unions as an industry have finished atop one research firm’s Customer Experience Ratings. The survey of 10,000 consumers by the Temkin Group, here, found overall satisfaction with financial institutions improved during 2012, as it also did in the two years prior to that. Credit unions took first place in the financial services industry for the second straight year with a rating of 79%. (Credit Union Journal, March 27)
[related: CUs Garner More Good Media Coverage In NY Times, NerdWallet, Go Banking]
More community banks are preparing to fight payday lenders and technology upstarts for a bigger share of short-term, small-dollar loans. For smaller institutions such One PacificCoast Bank in Oakland, Calif., and National Bank & Trust of Sycamore in Illinois, the battle isn't about booking loans.
Rather, the goal is to win back fee income that community banks have ceded to others in recent years. Payday lenders, for their part, wonder why it took community banks so long to realize the need to go on the offensive. Still, small banks are ignoring demand for short-term liquidity services at their own risk, says Robert Giltner, a consultant at Velocity Solutions who advises banks on retail products.
Bigger banks like Fifth Third (FITB) and Regions Financial (RF), along with credit unions and other nonbanks, are developing small-dollar loan products, he says. (American Banker Online, March 28)
The Credit Union National Association continues to receive questions following the February release of member business lending (MBL) waiver clarifications, and CUNA addresses some of those questions for its members in the latest edition of the Regulatory Advocacy Report. To answer the credit union queries, CUNA consulted the National Credit Union Administration's supervisory letter on MBLs. In the report, CUNA details the basics of the MBL waiver process. [read more]
Credit unions are a good, lower-cost option for consumers with short-term loan needs, according to a website that links consumers with payday lenders and is touting credit unions as a good alternative. The site, PaydayLoan-Lenders.com, has published a list of alternatives to payday lending for individuals living in any state that prohibits payday loans or who need "low-cost options for borrowing," the New York-based site said in a press release. [read more]
> Virginia's credit unions launched an initiative last year called Reality Check that seeks to aid credit unions in launching or rebranding their micro-loan products. Learn more here.
News About Credit Unions
Maximize your credit union’s profile at aSmarterchoice.org. This consumer site, run by CUNA and the Leagues, connects consumers to credit unions for membership. In 2012, nearly 218,000 consumers found credit unions via aSmarterChoice.
A benefit of membership is an enhanced profile to ensure your credit union gets noticed! Your League recently put this data to good use, as aSmarterChoice data will be powering the search features of our QuitTheHit website (see above)!
> If you need your password to update your field-of-membership and contact information, drop an email to your League's Mary Amyx for assistance – firstname.lastname@example.org.
For the first time since 2008, credit unions added a significant number of new employees to their payrolls. According to information released Monday by CUNA, the number of full-time equivalent employees in the credit union industry increased to 249,399 in 2012, representing a 2.9% increase over 2011. CUNA sourced NCUA financial performance reports, as well as other sources that reported employees at privately insured credit unions, to reach its conclusions.
The nearly 3% gain marks a return to historic norms, said CUNA Chief Economist Bill Hampel. The nearly 250,000 full time equivalents is higher than the peak figure of 244,245 reported in 2008, as the recession was beginning to take its toll on credit unions.
However, that comprehensive gain has come from more full-time employees, with 233,596 reported in 2012, up from a high of 227,077 reported in 2008. Comparatively, there were just 31,605 part time employees in 2012, still below a peak of 34,809 in 2007. [read more]
Credit union supporters are encouraged to nominate individuals and organizations for the Herb Wegner Memorial Awards to be presented by the National Credit Union Foundation (NCUF).
Winners will be honored at NCUF’s annual awards dinner on Feb. 24, 2014 in conjunction with the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C. Nominations can come from individuals and/or organizations. The following are the three steps needed to make a nomination:
1. Complete the Wegner Awards nomination form on the NCUF website (www.ncuf.coop).
2. Gather at least five letters of recommendation citing examples of the nominee’s achievements relevant to the award criteria.
3. Send the nomination form and recommendation letters electronically to NCUF by June 28.
Questions about the Wegner Awards can be directed to Josie Collins at email@example.com or 800.356.9655, ext. 4374.
It took the Small Business Administration a couple of tries, but banks and other lenders are starting to show more interest in making smaller, government-backed business loans. SBA officials established the "Small Loan Advantage" program in February 2011, and its selling point then was that it would offer a streamlined application process to select lenders that committed to making loans of less than $250,000.
The response was tepid at best, in part because only a few hundred "preferred lenders" were eligible to use the program. So in June of last year, the SBA opened the program to all its lenders, further streamlined the application process and raised the maximum loan amount to $350,000.
The result: Through the first five months of this fiscal year, the SBA approved more loans under the program than it did in the previous two fiscal years combined. (American Banker Online, March 27)
[resource: SBA Small Loan Advantage Program]
[resource: SBA Lenders in Virginia, including credit unions]
More in the credit union community are commenting and offering suggestions on "Unite for Good," the new initiative to rally credit unions around a shared vision for growth and success. It's a development welcomed by Credit Union National Association President/CEO Bill Cheney, who debuted the initiative at CUNA's Governmental Affairs Conference last month.
This week, credit union consultant Scott Butterfield, principal with Your Credit Union Partner, discussed the Unite for Good initiative in a column appearing on the CU Insight news and opinion aggregation site. He agreed Unite for Good's service component must go beyond consumer satisfaction surveys and pricing advantages for credit unions to truly gain measurable market share.
"Seek out opportunities with the greatest potential impact, activities that improve the quality of life for consumers and communities," Butterfield advises credit unions, citing activities such as micro-enterprise lending, financial counseling for low- and moderate-income consumers, alternatives to predatory financial products, and programs that help members build financial assets.
"Unite for Good is spot on," Butterfield adds, "and I believe it represents the best opportunity to leverage our collective brand for advocacy, differentiation and growth. If we do this right, we have the opportunity to demonstrate in a very big way that the credit union brand is clearly different and better." [read more]
CUNA Mutual Group’s strong operating results in three of its core credit union businesses led to the company’s fourth consecutive year of earnings growth in 2012. Consolidated GAAP operating revenue, net income and capital levels all increased over 2011. CUNA Mutual Group recorded $150 million of net income (GAAP) in 2012, compared to $83 million in 2011. [read more]
Compliance/Regulatory Affairs News
The recent, and some say extremely onerous, social media compliance rules proposed by the Federal Financial Institutions Examination Council join a bevy of existing rules from regulators such as FINRA and the SEC.
Unless a financial institution has a large pool of employees who can monitor social media activity, it will need to use some kind of social media compliance software to monitor not only what its employees are saying on social media, but what the public is saying about the bank - even if it's made a conscious decision not to engage on Twitter, Facebook and the like.
The FFIEC calls for a thorough social media risk management program anyway. The FFIEC rules also mandate that banks' social media activity comply with existing consumer protection laws, of which there are many.
For example, the Truth in Savings Act mandates certain disclosure requirements for advertisements using trigger words such as "bonus" or "APY." Software can automatically identify such words in tweets, blogs or Facebook posts and help provide the disclosures. (American Banker Online, March 28)
[resource: NCUA news release on social media rules]
Governmental Affairs News
The retirement of Senate Banking Committee Chairman Tim Johnson at the end of next year has already prompted an elaborate guessing game about who will succeed him at the helm of the panel. But perhaps the biggest question is who among the potential successors actually wants the position.
If the Democrats hold the Senate in 2014, the next member of the committee behind Johnson in line for the gavel is Jack Reed of Rhode Island. But Reed is widely expected to prefer the top spot on the Armed Services Committee, which will also open up after the midterm elections.
And the next two members behind Reed -- New York's Charles Schumer and New Jersey's Robert Menendez -- are also said to be considering different promotions than ascending to the top spot on the banking panel. That has already shifted the spotlight to the fourth most senior member: Sherrod Brown of Ohio.
Among the chamber's more liberal members, Brown is one of the most outspoken senators on the issue of "too big to fail," and his rising to become chairman would bring even more attention to legislation to break up the big banks. (American Banker Online, March 27)
Financial Services/Marketplace News
U.S. economic growth was weak at the end of last year but better than previously thought, according to the government's third and final report on the fourth quarter. Gross domestic product rose at a mere 0.4% annual rate in the quarter -- better than the previous estimate of 0.1% and the initial reading, which showed a 0.1% decline.
Among the reasons: Stronger construction activity. Investment in non-residential buildings grew at a 16.7% annual rate, nearly triple the previous growth estimate. [read more]
My grandmother was born in 1917 and entered the work force during the Great Depression. I’ve been thinking of her generation -- the one that saved rather than spent, preserved rather than squandered -- a lot lately, writes Annie Lowrey for the New York Times.
"In the past year or so, data have come in regarding how my own generation, often called Generation Y, or the millennials, has adapted to our once-in-a-lifetime financial crisis -- the one that battered career prospects, drove hundreds of thousands into the shelter of schools or parents’ basements and left hundreds of thousands of others in continual underemployment. And some of that early research suggests that we, too, have developed our own Depression-era fixation with money." [read more]
A new service from Fiserv Inc. promises to give credit unions a more active role in the revolution that is significantly expanding consumer payments in the U.S. SpotPay is a merchant payments option inexpensive and portable enough to make accepting credit and debit cards possible for a much larger number of merchants and credit union members, the company said.
"I think in effect we are seeing a revolution in what is meant in the term 'merchant',” explained David Keenan, general manager of network services for Fiserv in Brookfield, Wis. “Now, with SpotPay, your babysitter can take debit card payments at the end of the night.”
SpotPay is much like Square, another merchant processing solution that is effectively expanding the footprint for credit and debit card payments. The service is branded to the partnering credit union and provides the credit union a share of the interchange income the company earns with every transaction, making participating credit union both the recipient and payer of card interchange. [read more]
Auto dealership advocates are warning that costs will rise for borrowers if the Consumer Financial Protection Bureau presses financial institutions to curtail auto loan markups determined by dealers.
The warning followed the CFPB's bulletin this week that said FIs are responsible for discrimination if their partner dealers mark up the interest rates on loans for minority borrowers or engage in other fair lending abuses. The agency is encouraging lenders to adopt a flat-fee model for dealer compensation. But dealer industry representatives said doing so would hurt competition and ultimately boost car prices. (American Banker Online, March 25)
According to a new survey from TransUnion, credit union executives believe auto loans will be their biggest opportunity to grow their loan portfolios this year. TransUnion said it administered the survey to 104 credit union executives at CUNA’s Governmental Affairs Conference held in Washington in late February. More than half of the respondents said auto loans have the greatest potential for loan growth.
union respondents also said their biggest challenges to meeting loan growth goals were competition from large banks and captives (40%), regulation (27%) and the lack of prospects (17%). Meanwhile, in a sign that the housing market may be improving, the survey found that some credit union executives believe their best opportunities for loan growth are with mortgage (18%) and small business (13%) loans. [read more]
U.S. home prices rose in January at the fastest annual pace since June 2006, just before the housing bubble burst. The gain shows the housing recovery is strengthening ahead of the all-important spring buying season. The Standard & Poor’s/Case-Shiller 20-city home price index climbed 8.1 percent in the 12 months ending in January. That’s up from a 6.8 annual gain in December. Prices rose in all 20 cities. [read more]
Debit cards were supposed to be toast. The industry started writing their obituary when financial reform targeted overdraft fees and interchange or “swipe” fees, which had made debit cards extremely lucrative for banks. So why is it that banks are now pushing debit cards like never before? Financial institutions are even adding back debit card rewards programs, which many had discontinued in anticipation of the hit the regulations would deliver to their bottom lines. [read more]
Bank of America just rolled out a new type of reward credit card for people who carry a balance. The BankAmericard Better Balance Rewards card gives customers $25 cash back each quarter if they pay more than the minimum required each month and make that payment on time.
“There was definitely a need for this that was not being met,” said Titi Cole, Bank of America’s senior executive for retail products. “It rewards customers for what they’re trying to do, which is pay off their balances and manage their debt responsibly..." [read more]
Education & Networking Opportunities
The last of this year's Town Halls is slated for April 3 in NoVa at Justice Federal Credit Union. Your League will offer updates on our Strategic Plan, including enhancements to our governmental affairs program.
Capital adequacy requirements are changing. There is new regulatory emphasis on the responsibility of the board and senior management to determine capital adequacy based on the specific risk to the credit union. Our April 2 webinar will discuss an easy-to-follow methodology for completing the stress test, components of a capital contingency plan, and options for raising capital. [learn more]
Long-term success for your credit union is based on your commitment and ability to gain and maintain satisfied members. Studies have proven that the more products and services owned, the greater the member retention.
Our April 3 webinar will cover the steps toward influencing decision making in your credit union’s favor, while providing a non-threatening, highly-effective approach to cross selling. Discover how to give members the “I have no reason to look elsewhere” mentality. [learn more]
News From Credit Unions
Freedom First Credit Union (FFCU), along with the City of Roanoke and the West End Center for Youth, held a groundbreaking ceremony recently to celebrate the beginning of construction for the West End revitalization project. Plans for the site include an urban mix of commercial and meeting space, a community pavilion with a full-service production kitchen, and gardens to encourage and promote healthy financial and physical lifestyles. [read more]
NAE Federal Credit Union and its members donated $6,000 to the Make-A-Wish Foundation at the credit union's recent Annual Meeting. NAEFCU also presented the Lifetime Achievement Award to Ms. Katy Stillman, in recognition of her 47 years of service and dedication to the credit union and its membership. [read more]
Fort Lee Federal Credit Union, in partnership with Armed Forces Financial Network (AFFN), was honored and delighted to donate $1,000 in gift cards to the Richmond Fisher House. The credit union and AFFN proudly support the Richmond Fisher House, a “comfort home” for families to stay free-of-charge while veterans receive care at the Richmond Veterans Administration Medical Center (RVAMC).
This home enables family members to be close to their loved one at the most stressful times--during the hospitalization for an unexpected illness, disease, or injury. [read more]
Argent Credit Union and other partners to the Credit Unions Care Foundation raised $23,000 during a charity car raffle last year, a portion of which was donated to the Children’s Miracle Network Hospitals serving the Commonwealth of Virginia, with the remaining funds supporting financial education, disaster relief and local charity initiatives.
The Foundation honored participating credit unions that sold the most tickets each month during the four-month car raffle. Argent Credit Union received money back from the Foundation to support a charity of its choice. Argent shares in its ticket sales efforts by selecting the Lucy Corr Foundation as the beneficiary of the $500 from the Foundation. [read more]
Join us at the Tidewater Chapter's April 11 meeting for a "Meet Your League" event. Clark Jefferson, Tim Hesson, Dorshey Coleman, Karin Sherbin, Jeanne Sullivan and Lewis Wood will provide an overview of your League's products, services and programs, with particular focus on new initiatives. Don't miss this opportunity to hear about what's new and noteworthy at your League!
Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, 23320.) Time: 6 p.m. Social; 6:30 p.m. Dinner and Meeting. Make your reservations early! To RSVP, contact Ginnie Riddle by email at VRiddle@bayportcu.org or by phone at 757.873.4047. Deadline is noon, April 5.
Financial Education News
The National Credit Union Foundation (NCUF) is inviting credit union organizations to hold a “Financially Fit Day” on April 3, 2013 to kick off National Financial Literacy Month. This fundraising day is part of a relatively new campaign, titled “Credit Unions Support Financial Education: Leading the Way to Financial Freedom.” In order to join in this initiative, credit unions can carry out either (or both) of the following activities to fundraise among staff and members:
- holding a “Financially Fit Day” on Wednesday, April 3, 2013
- fundraising throughout the month of April
News About The Competition
American Express (AXP) has just given its checking account alternative, Bluebird, more bank-like checking account features. It has added FDIC insurance, increased the amount of money a customer can place in an account and added physical checkbooks.
The New York credit card company said Bluebird customers who can already deposit checks by snapping a picture from their smartphones, electronically pay billers and send cash to friends, can now place up to $100,000 into their accounts annually.
Previously, a customer could only keep $10,000 in an account at any one time. The desired effect is to make Bluebird an even closer competitor to banks. The prepaid card account, built on top of Amex's Serve platform, is already a potential disruptor to retail banking. (American Banker Online, March 27)
What’s old is new again, sighed John Buzzard, an executive with FICO’s Card Alert Service. The occasion was the release of a new FICO report that tracks card fraud. The big trend: fraud is up, said Buzzard, and old-fashioned skimming at bank and credit union ATMs is leading the way.
“Criminals are attacking financial institution-owned ATMs,” said Buzzard, referring to the use of skimmers affixed to ATMs to gather magnetic stripe data. Usually there’s an associated pinhole camera to get PINs. In an era dominated by technology anxieties – Zeus, DDoS and Chinese Advanced Persistent Threats for instance – it is sobering to be reminded that a lot of ongoing theft is skimming, which dates back 30-plus years and is technically about as simple as using a sheet of carbon paper to make a copy of a document. [read more]
During a National Credit Union Administration webinar Wednesday that, in part, focused on concerns about the operational risks triggered by new technology, the agency's deputy director of the Office of Examination and Insurance said credit unions can expect a Letter to Credit Unions within the next few months that will address "eBanking."
The agency's Tim Segerson also said the NCUA is training its examiners in coming weeks on an "eBanking area work program," and that credit unions should expect examiners to integrate this into their examinations starting in the second half of 2013. [read more]