News For and About Virginia's Credit Union System
July 3, 2013
- Your comments and submissions are always welcomed. E-mail email@example.com
The League office is closed July 4. Have a happy and safe Independence Day!
- Act To Secure CUs' Future
- NCUA Loan Participation Rule Now Effective Sept. 23
- Relief Bill A Good Step Toward CU Charter Modernization
News About Credit Unions
- CU Loans, Savings Up In May
- CUs On Top In New Savings Rate Study
- CU Board Director Pay: Most Not At All, Some Handsomely
- Payments Space Is Changing, CUs Need Good Timing
- Emerging Loss Trends Threaten Credit Unions' Financial Health
- Brace Yourself: Lending-Related CFPB Changes in Full Swing
Compliance/Regulatory Affairs News
Governmental Affairs News
Financial Services/Marketplace News
- Rising Mortgage Loan Rates Weigh on Refinancing, New Purchases
- Millennials’ Ball-and-Chain: Student Loan Debt
- How the DOMA Ruling Will Affect Gay Couples’ Finances
- Small Banks Overlook Numerous High-Demand Products
News From Credit Unions
- Fort Lee Federal Credit Union, AFFN Donate $3,000 to Fort Lee USO
- Virginia Credit Union Produces 'More' Stars
- Central Virginia Chapter to Hold Annual Meeting July 18
- Tidewater Chapter to Host July 26 Charity Golf Tournament
- Richmond Chapter to Host 19th Annual Susan J. Adams Memorial Golf Tournament to Benefit CMN Hospitals
- Mobile Banking Activity Rose in May
- Banking With Your Mobile? There Will Be a Fee for That...
- Bankers, Not Boomers, Fail the Online Challenge
- Google Glass Can Now Be Used to Browse Bank Websites
The time has come for credit unions and their members nationwide to take action to protect credit unions, reduce regulatory burdens and prepare for the future, Bill Cheney, president/CEO of the Credit Union National Association, told attendees in his opening remarks Monday morning at the 2013 America's Credit Union Conference (ACUC).
"Credit unions have done a tremendous job responding to and recovering from the financial crisis," Cheney said.
More than 700,000 net new members have joined U.S. credit unions in the first three months of this year, he noted. Three key initiatives are underway to help credit unions thrive in the future: Unite for Good, Don't Tax My Credit Union, and Plan To Win, Cheney said.
The "Don't Tax My Credit Union" national campaign has taken credit unions from defending the tax exemption to advocating for it, Cheney noted. The threat level has increased because Congress is taking a "blank sheet of paper approach" to tax exemptions. "We need to get back on that blank sheet of paper," he added. [read more]
> Many thanks to all of you who heeded the Don't Tax My Credit Union call-to-action! As of 3 p.m. yesterday, Virginia-based credit unions had generated 8,247 messages through the Don't Tax My Credit Union website and 172 phone calls to our Congressional delegation's offices. Keep up the good work and don't forget to make good use of CUNA's Tax Status Advocacy Toolkit, available here.
There is now a new, later effective day for the National Credit Union Administration's final rule on loan participations: Sept. 23. The Credit Union National Association strongly urged the agency to address the effective date to give credit unions flexibility to adequately prepare for the rule's changes.
The original effective date was July 25. "NCUA's effective date change and the numerous key changes in the final rule are important indications that the board is responding to reasonable concerns without sacrificing safety and soundness, which is a commendable approach to regulation," CUNA Deputy General Counsel Mary Dunn noted when the effective date change was announced today. [read more]
[resource: NCUA Release]
Rep. Gary Miller's (R-Calif.) Regulatory Relief for Credit Unions Act (H.R. 2572), introduced last Friday, "is a good first step toward modernizing the credit union charter," Credit Union National Association President/CEO Bill Cheney said.
In a letter to Miller, Cheney said the bill "recognizes that while credit unions were created for the specific purpose of promoting thrift and providing access to credit for provident purposes, the statute and regulations that govern how credit unions operate are in desperate need of modernization." Regulatory improvements included in Miller's bill include:
- Updating credit union investment authorities;
- Amplifying the National Credit Union Administration's authority to implement a risk-based capital regime;
- Providing the agency with flexibility to adjust leverage requirements;
- Allowing the NCUA to adjust capital requirements as needed; and
- Clarifying the insurance coverage of funds held in trust accounts at credit unions.
The bill would also request the NCUA to perform a cost-benefit analysis of rules, past and present. The Government Accountability Office would also study the need for improvements and modernization to the Central Liquidity Facility under the terms of the bill. [read more]
News About Credit Unions
Savings growth outpaced loan growth at credit unions in May, leading the credit union movement's aggregate loan-to-savings ratio to fall to 67.7% from 68% in April, according to the Credit Union National Association's Monthly Credit Union Estimates. Credit union loans grew by 0.5% in May--a 6% annualized rate.
Savings growth outpaced loan growth by a wide margin--though the disparity arose because May ended on a pay day and automatic payroll deposits caused share draft balances to increase dramatically. Savings balances increased by 9% in the month. [read more]
A just-released savings rate study comparing credit unions and community banks rates has found that "it is credit unions that do, in fact, come out on top," according to GoBankingRates.com (June 28). Credit unions offer an average 0.20% annual percentage yield (APY) savings account rate, while local banks provide a slightly lower 0.18% APY, said GoBankingRates.com. Its data averaged rates from 5,000 community banks and credit unions. [read more]
The reaction among the roomful of credit union board members was shock and awe. During the course of CUNA’s Credit Union Roundtable for Board Leadership in Chicago last summer, one person said that his credit union chairman was paid $10,000 a year and the vice chairman got $8,000 a year, said Gary Klotz, chair of the $500 million Community Choice Credit Union in Farmington Hills, Mich. “The reaction in the room was almost one of disbelief that they were paying them anything.”
Klotz, a proponent of volunteer boards, was also astonished to find out recently that the $18,000 the two board members received in compensation was modest compared to what dozens of credit union board members in other states received in compensation. [read more]
The payments market is rapidly changing, so credit unions need to monitor the market, evaluate payment platforms and channels, and determine where to enter and exit on the product life-cycle curve, said a CUNA Mutual Group speaker at the 2013 America's Credit Union Conference.
The conference, presented by the Credit Union National Association, runs through Wednesday in New York City. Seventy-five percent of credit union fee income is related to the payments space because products and services related to payments generate revenue, Theran Colwell, CUNA Mutual director, strategy and business development, said in a Discovery Breakout Session sponsored by CUNA Mutual Group. [read more]
Credit unions are becoming more susceptible to emerging loss exposures that can cause immediate losses or result in third-party claims, litigation and subsequent losses, a CUNA Mutual Group risk management specialist said Wednesday. Speaking to an America’s Credit Union Conference Discovery breakout session, Roger Nettie, senior risk management consultant, said credit unions face a two-pronged loss threat – by fraudulent acts committed directly against the institution and through litigation by third parties. [read more]
The Consumer Financial Protection Bureau (CFPB) is changing the fundamental nature of the way credit unions go about their day-to-day lending activities, CUNA Mutual Group’s Regulatory Compliance Manager Lauren Capitini told an America’s Credit Union Conference (ACUC) Discovery breakout session audience Tuesday.
“Credit unions need to act now to prepare for rapidly-approaching mandatory compliance dates, including those pertaining to mortgage changes and changes to international electronic transfers,” said Capitini. Capitini engaged ACUC session attendees in a discussion about how the CFPB is moving full speed ahead with new rules having an enormous impact on credit unions’ day-to-day activities. [read more]
[related: CFPB Issues 2014 List Of Rural And Underserved Counties]
Compliance/Regulatory Affairs News
During his confirmation hearing last Thursday before the Senate Banking Committee, NCUA Board nominee Richard Metsger dodged what might have been his most controversial question: is raising the member business lending cap a good idea?
The former Oregon state senator responded to the question from Rhode Island Democratic Sen. Jack Reed by saying, “I think it’s a good idea to recognize the purview of Congress to make such decisions."
Metsger was nominated to fill the NCUA Board position vacated by Gigi Hyland, who exited the board in October 2012 after serving beyond her term’s expiration. Following the confirmation hearing, Metsger must receive a majority vote by the full Senate before he is sworn in. [read more]
Governmental Affairs News
The Credit Union National Association, participating in Rep. Maxine Waters' (D-Calif.) housing finance market reform policy discussion session last Friday, made it clear that needed reforms must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly, cooperative way. CUNA Chief Economist Bill Hampel represented CUNA at the session, which was the second in Waters' housing finance reform series. [read more]
Financial Services/Marketplace News
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 11.7% in the group’s seasonally adjusted composite index, following a drop of 3% for the previous week.
Rates for all types of loans rose by more than 10 basis points during the week. The seasonally adjusted purchase index decreased by 3% from the most recent report. On an unadjusted basis, the composite index dropped by 12% week-over-week. [read more]
[related: Prepare for a Slowdown in Housing Prices]
[related: Scary Times Hit Mortgage Shoppers]
[related: Housing Recovery Hits Awkward Teenager Stage]
[related: Mortgage rates spike in response to Fed Statement]
[related: US Home Prices Rise in May by Most in 7 Years]
For many 20- and 30-somethings, paying off the cost of college takes priority. Marriage, a house and family will have to wait. Countless Millennials across the country find themselves tethered to crushing student loan debt , stuck between the desire to become fully independent adults and not being able to afford the financial and cultural milestones traditionally associated with young adulthood. [read more]
An historic Supreme Court rulings will have a ripple effect on the lives and futures of gay couples, especially when it comes to their personal finances. The Court’s decision on the Defense of Marriage Act means that people who marry and live in states with legalized same-sex marriage will have that union recognized by the federal government -- including the Social Security Administration, Internal Revenue Service, and so on.
Financial planners who work with same-sex couples say these are the biggest ways the Court’s decisions will affect them if they marry. [read more]
Community banks are leaving money on the table due to an inability or an unwillingness to offer a number of coveted financial products. Numerous consumers are clamoring for products such as mobile bill pay and person-to-person payments, according to Market Rates Insight. But most community banks have been slow to adopt such items.
Less than 10% of community bank customers use emerging financial services such as prepaid reloadable cards or low balance alerts, though 52% of people surveyed by Market Rates Insight expressed an interest in them.
Those customers are also interested in payment protection, where an issuing bank provides protection on credit card payments in instances where a customer is unable to pay due to unforeseen events.
About 75% of community bank customers surveyed by Market Rates Insight were keen on products dealing with digital safety and security, such as identity theft alerts and credit score reporting. Those types of products have the greatest growth potential, according to Market Rates Insight. (American Banker Online, June 28)
News From Credit Unions
Fort Lee Federal Credit Union, in partnership with Armed Forces Financial Network (AFFN) Matching Grant Program, was proud to donate $3,000 to the Fort Lee USO.
The donation was presented at Fort Lee Federal Credit Union’s annual meeting on April 30. The Fort Lee USO is a local branch of the USO of Hampton Roads and Central Virginia, which is a nongovernmental, but congressionally chartered organization. Their mission is to enhance the quality of life and public support for armed service members and their families. [read more]
Virginia Credit Union’s practice of using real members as actors in commercials continues with its newest campaign. The 30-second commercials are built around the theme of “What Would You Do With More?” “A little more money available each month, a little more time, a little more in savings -- these are the significant benefits of being a member of VACU,” explained Todd Feldman, Vice President of Marketing. “We wanted our commercials to demonstrate how more value comes with being a credit union member.” [read more]
The Central Virginia Chapter will host its Annual Meeting on July 18. On the agenda is the election of the Chapter's Governing Board. Time: 6 p.m. dinner; 6:30 p.m. business meeting. Location: Hampton Inn (Fishersville).
View the meeting announcement flyer. (pdf, 77kb)
Join the Tidewater Chapter July 26 for its Inaugural Golf Challenge at Sewells Point Golf Course in Norfolk! Format will be four-man captain’s choice, with an entry fee of $125 per player. Fee includes a hot dog lunch, cart, range balls, green fees and cookout dinner. Shotgun start at 1 p.m. Proceeds will benefit Children’s Miracle Network Hospitals.
Sponsorships are also available, ranging from $250 to $1,000, and your support is greatly appreciated! [learn more] (Word document, 930kb)
Richmond Chapter to Host 19th Annual Susan J. Adams Memorial Golf Tournament to Benefit CMN Hospitals
The 19th Annual Susan J. Adams Memorial Golf Tournament tees off July 29 to benefit Children’s Miracle Network Hospitals. The Chapter has renamed this event to honor the hard work and dedication of the late Susan Adams, who coordinated this event for 18 years. She made this tournament a huge success, raising more than $200,000 during those 18 years! [learn more]
Along with temperatures in most parts of the country, mobile banking activity continued to increase in May. The overall value of American Banker's Mobile Banking Intensity Index was 73.8 for that month, a significant increase over April's value of 70.4. Many of the bankers surveyed for the index said adoption of mobile banking continues to grow as more customers become comfortable with it. (American Banker Online, July 1)
As more and more customers are using their mobile devices to make deposits or pay bills, the banks are looking for ways to charge them for the service.
While fees for using mobile apps may be inevitable, the banks differ only over how to levy that charge. Some banks believe it should be a fixed cost per transaction, others believe fees should only come on products that present risks to the bank and provide unique services to the customer, such as Regions Financial for immediate funds, and Wells Fargo for emergency bill pay.
Still others -- who asked not to be identified because the strategy hasn't been announced -- have lobbied for a model resembling "Amazon Prime," where customers pay a flat fee for unlimited transactions. [read more]
Baby boomers are the brunt of a lot of technology jokes: We can't work a four-gadget, 60-button remote, we haven't figured out why Facebook has a timeline and a newsfeed, we don't really know what an Instagram is, and we're still slightly baffled as to how to text (or, Lord help us, "FaceTime") the grandkids for help.
There may be some truth to the stereotype, but when it comes to Boomers' high-tech online banking savvy, it's not the complexity or mystery that slow us down. The culprits are instead clunky, consumer-unfriendly websites, poor help systems, confusing interfaces and those security barriers (however necessary) that frustrate the heck out of us.
These are some of the findings of a recent study by the consulting firm West Monroe Partners, which surveyed customers about their online banking experiences with five financial institutions. Arguably there are potential pain points for customers of any age, but this study focused on the experience of people in the 49-to-67 age bracket. [read more]
An update to Google Glass that the search company began rolling out Monday will give users a new way to view and interact with financial institutions' websites. Previously, the early adopters (Explorers) and developers of Glass were only able to see simple Google search results after giving the device a voice command.
Glass, which is Google's first foray into wearable computing, is a device that contains a processor, 12 gigabytes of memory, a five-megapixel camera, a video camera, a touchpad, a high-resolution display, Bluetooth and wi-fi connectivity and a battery. It's attached to a pair of titanium frames and projects onto a tiny computer screen above the wearer's right eye. (American Banker Online, July 2)