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CURRENT Newsletter | 29 May 2014

May 29, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Financial Services/Marketplace News

News From Credit Unions

Chapter News 

League News

Marketing News

News About The Competition

Security/Fraud Prevention

Technology News

Headline News

CUNA RBC Letter Details Plan's Flaws, Urges Withdrawal

In a 47-page comment letter to the National Credit Union Administration, the Credit Union National Association Wednesday underscored the inherent flaws and damaging impact the agency's risk-based capital plan would generate, and recommended that the proposal be withdrawn. CUNA said the regulator has not provided an adequate justification for the major changes it is proposing.

The CUNA comment letter, signed by CUNA President/CEO Bill Cheney, emphasizes CUNA's willingness and desire to  work with the NCUA on both a comprehensive strategy and on a narrower new rule approach.

[READ MORE]
[RELATED: CUNA: Risk-Based Capital Plan has 'Serious Flaws,' Should Not Proceed]

Thirty-five comment letters were filed by Virginia-based credit unions in response to the National Credit Union Administration's proposal, as of noon yesterday. The deadline was midnight.

Your League's comment letter was among those forwarded to NCUA, and reads, in part: "[We] generally agree risk-weighted capital is an appropriate measure for financial institutions.  However, we are in strong disagreement with the Administration on the proposal in its current form. Further, we assert that credit unions and more importantly their members will be harmed if the proposed regulation is promulgated by NCUA. It has been estimated by the Credit Union National Association (CUNA) that credit unions will have to increase their current capital levels by more than $7 billion in a relatively short period of time as a result of the proposed regulation."

You can read your League's comment letter here:

[RELATED: Credit Union National Association: Federal Home Loan Presidents Comment on NCUA’s RBC Plan]
[RELATED: 5 Big Problems with the Risk-Based Capital Rule]

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Southeast Regional Directors Conference July 13-16; Hotel Reservation Deadline June 14

Credit union directors and volunteer officials: Join us in beautiful Savannah, Georgia, July 13-16 for the Southeast Regional Directors Conference. The agenda is packed with sessions designed to provide the necessary information to develop and enhance directors' leadership skills while fulfilling their fiduciary responsibilities.

For questions contact Dan Denning, Georgia Credit Union Association, dand@gcua.org, 770.476.3425 or (800.768.4282).
[Download the Information Flyer] (PDF, 230kb)

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East Coast Marketing Conference Returns to Virginia Beach Sept. 25-26

The East Coast Marketing and Business Development Conference returns to Virginia Beach Sept. 25-26 for two full days of education and networking opportunities of near-mythic proportions.

Topics include: Leveraging Your Credit Union's Competitive Advantage, Near-Future Tech Trends and Understanding Loyalty Drivers By Age Group. The Conference is being held in a brand new Hilton Garden Inn, a stone's throw from the ocean, the week of the Virginia Beach’s 41st Annual Neptune Festival.
[Download the Information Flyer]

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News About Credit Unions

Credit Union Access for All: What Banks Don't Want You to Know

The Huffington Post features an article on credit union membership eligibility, which notes it's easier than ever to join a credit union, to the great annoyance of bankers. [READ MORE]
[RELATED: The Big List of Credit Unions Open to Anyone]

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Financial Services/Marketplace News

Young Customers More Open to Banking Alternatives: Survey

Young banking customers are more interested in online banking than their older peers, according to a report from financial services consulting group Accenture. Accenture found that young retail banking customers between the ages of 18 and 34 are nearly twice as likely to consider switching to a branchless, digital bank.

The report, released Tuesday, also found that young people are more interested in opening checking accounts with technology companies. Nearly 80% of young customers in the U.S. said they would consider banking with companies that currently do not offer banking services, including Square, Paypal or Apple.

"Tomorrow's customer is coming of age with a very different perception in what a bank could be," Wayne Busch, a managing director of Accenture's North American banking unit, said in a press release. The study suggests that an openness to banking alternatives is driven, in part, by changes in expectations that consumers have for banking services.

Over 70% of those surveyed said they see banking as defined by simple transactions, including bill pay services and account statements, rather than a personal relationship with a banker. Yet while consumers expect less personal interaction, they are also demanding more personalized, digital assistance in managing their finances. (American Banker Online, May 28)
[RELATED: GoogleBank, Yes, Apple Bank, Not So Much, Say Millennials]
[RELATED: How Wal-Mart and Google Could Steal Young Customers from Traditional Banks]

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CUNA Survey Finds Parents Unsure of College Costs

A survey conducted by the Credit Union National Association found that more than half of parents of college-age students do not know how long it will take to pay off student loans or the average interest rate of that debt.

The online Financing Children's College Education Survey polled 717 parents of 17- or 18-year-olds who plan to or are seriously considering attending a college or university. According to the survey, 59% of parents of prospective U.S. college students are not able to guess the average rate of their future loans, 53% do not know how long it will take to pay off future loans and 25% do not know their children's expected debt at graduation. 

[READ MORE]
[RELATED: Filene: Financial Literacy, Debt Challenges Continue for Gen Y]

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Why FDIC Data Suggests a Lending Surge Is Coming Soon

Banks are still feeling negative effects from last year's sudden rise in medium- and long-term interest rates, but plenty of signs in the Federal Deposit Insurance Corp.'s latest industry update continue to point to a lending resurgence in the near future. Institutions took a definite hit in the first quarter as the higher rates — which took effect in the second quarter of 2013 — have caused mortgage refinancing to dry up, posing an immediate profit challenge.

But returning loan growth — particularly at community banks — is still persistent in other categories that had languished following the crisis, offering hope that the credit market is on its way again to producing revenue growth. "Consumer confidence is coming back gradually, even small business appetite for credit is coming back gradually. … Those real sectors that depend on banks are showing some gradual improvement in activity," said Richard Brown, the FDIC's chief economist, at a briefing Thursday to release the agency's Quarterly Banking Profile.

Despite modest loan growth overall, certain categories showed signs that banks are poised to accelerate expansion of their balance sheets. FDIC Chairman Martin Gruenberg noted that, unlike this past quarter, over the previous three years loan balances had declined in the first quarter. The 12-month growth rate in loan balances of 3.6% was a post-crisis high, while loan balances at community banks over the past 12 months have grown 6.7%, he said. (American Banker Online, May 28)

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Square's Cash Advance: Don't Call It a Loan

Square got its start by helping small businesses process credit card payments. Now the mobile payments platform is aiming to help small businesses grow by giving them an alternative to traditional loans. On Wednesday, the company announced Square Capital. The new service will provide small businesses quick access to cash.

[READ MORE]

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News From Credit Unions

Chartway FCU’s We Promise Foundation Donates $43,500 to Fully Fund EQUI-KIDS’ Annual Scholarship Program for Children

For the third year in a row, Chartway Federal Credit Union’s We Promise Foundation has fully funded scholarships for 40 children with disabilities, enabling them to benefit from equine-assisted therapeutic riding lessons. As an avid supporter of EQUI-KIDS, this generous grant from Chartway FCU’s We Promise Foundation will offer physical, mental, and emotional gains for special needs participants.

Weekly lesson sessions will help riders strengthen muscles, and improve their balance and coordination. Communication and socialization is also expected to be dramatically enhanced as the children have the opportunity to build ardent bonds with the horses - increasing trust and confidence for the pair with each session.

[READ MORE]

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ABNB Federal Credit Union Walks for 'March for Babies'

Employees and their families of ABNB Federal Credit participated in the annual March for Babies Walk supporting the March of Dimes. This year’s walk was held on Sunday, April 27.

“ABNB’s support of the March of Dimes increases annually,” said Melissa Hayes, Data Safe Operations Manager and March of Dimes Coordinator for ABNB.  “Everyone has been touched by someone who’s had a sick baby, and we are proud to continue in the March of Dimes annual ‘March of Babies Walk.’”

Through online contributions and a $5 jeans day, ABNB employees raised more than $550 for this annual event.  This money goes directly to the March of Dimes, and is used to fund important research and programs to help babies begin healthy lives.

[READ MORE]

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1st Advantage Welcomes Vickie Noel as Business Relationship Manager

1st Advantage Federal Credit Union is pleased to announce that Vickie Noel has joined the credit union as the new Business Relationship Manager. Noel has more than 25 years of banking experience with 14 years in business and commercial lending. Noel will be responsible for prospecting, acquiring, developing and retaining small business banking relationships for 1st Advantage.

[READ MORE]

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Chapter News

NoVA Chapter Meets June 9; Celebrates Cooperatives

The NoVA Chapter and National Cooperative Business Association will partner with Cabot Creamery to celebrate cooperatives during a June 9 event at Paradise Springs Winery in Clifton, Va. (13219 Yates Ford Rd.) Time: 5 p.m.-7 p.m. This event will take the place of the monthly chapter meeting. RSVP before June 2!

[LEARN MORE]

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Tidewater Chapter Meets June 26

Join the Tidewater Chapter June 26 for a program on fidelity bond coverage for directors and officers. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, 23320). Time: 6 p.m. social and 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 June 20.

[LEARN MORE]

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League News

Enjoy Kings Dominion, Carowinds at a Discount ... and Help Us Help Kids!

Plan your fun family outing to Kings Dominion or Carowinds and save on single day admission tickets for only $39 for any regular park operating day! And save even more July 1-15 with the VACUL Summer Special Days when tickets are only $35!

This information flyer has your special ordering codes. A dollar from each credit union ticket redeemed is rebated to us to help our local Children's Miracle Network Hospitals!

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Marketing News

CUs Need Tech to be Top of Millennials' Minds

When it comes to serving millennials, think pragmatism, not philosophy, and it wouldn't hurt to reinforce the difference between credit unions and other financial institutions. Debunking the idea that millennials base their purchasing practices on values, the May 28 Digital Fieldwork report contends that credit unions aren't high on the list because of a lack of awareness and a perception that they are behind the times technologically.

"Millennials are very pragmatic and have high expectations around technology," said Laurie Paleczny, co-founder of Digital Fieldwork. "If convenience and functionality aren't there, they'll do business with banks, even if they do not always respect their values."

"Strangers in the Night: Credit Unions, Millennials and Digital Behavior" examined thousands of online data points for 18- to 34-year-olds from January to April. Although millennials may have positive attitudes toward credit unions and negative ones toward banks, they still are confused about the differences.

[READ MORE]

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Attracting Teenage Members Takes Teenagers and Talent

Credit unions are taking innovative approaches to educating teens about personal finance and marketing themselves to teens. Florida's 121 Financial Credit Union, for example, has partnered with a local teen blogger.

It's an arms-length partnership, but the credit union is finding it an effective way to get teens interested in personal finance and money matters.

[READ MORE]

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News About The Competition

Bank Earnings Take Hit from Higher Interest Rates, FDIC Says

Declines in mortgage-related revenue and trading income helped pull first-quarter earnings down 7.6% from the industry's profit a year earlier, the Federal Deposit Insurance Corp. said Wednesday. Banks and thrifts earned $37.2 billion in the three-month period that ended March 31, $3.1 billion less than at the same point a year earlier.

It was only the second time in 19 quarters that year-over-year earnings fell for the industry. (American Banker Online, May 28)

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Security/Fraud Prevention

5 Scary Lessons Learned at CU InfoSecurity

An article from Credit Union Times notes that credit unions cannot afford to have their heads buried in the sand when it comes to information security.

“Don’t think you are not a target," said Demetrios Lazarikos, former chief information security officer at Sears’ Online Business Unit and now an expert with Bluelava Consulting.

In a former era, cybercriminals hunted for trophies; they wanted to brag about taking down a Chase or an Amazon. Bragging is so yesterday, suggested multiple speakers at the conference. Today, they said, it is all about stealing money and could mean more focus on credit unions, along with probes for weaknesses in defense. That was perhaps the most frightening take away from the conference.

“The criminals are not resting,” Lazarikos said. “Often they are moving faster than the good guys and you have to stay with them.” [READ MORE]

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Half of American Adults Hacked This Year

Hackers have exposed the personal information of 110 million Americans -- roughly half of the nation's adults -- in the last 12 months alone. That massive number, tallied for CNNMoney by Ponemon Institute researchers, is made even more mind-boggling by the amount of hacked accounts: up to 432 million.

The exact number of exposed accounts is hard to pin down, because some companies -- such as AOL and eBay -- aren't fully transparent about the details of their cyber breaches. But that's the best estimate available with the data tracked by the Identity Theft Resource Center and CNNMoney's own review of corporate disclosures.

[READ MORE]

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Technology News

Bank of America Releases New Mobile Features

Bank of America (BAC) has upgraded its mobile banking app. The new version includes a calendar feature that lets customers schedule appointments at local branches. The app synchs with mobile devices and provides users with calendar reminders, as well as a list of required documents to bring to their appointments.

The upgraded app also includes new self-service options. Customers can use it to order checks or replace lost or stolen debit or credit cards. The app also allows users to add bill-pay and money-transfer recipients directly from their mobile contact lists. (American Banker Online, May 28)

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