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CURRENT Newsletter | 30 May 2013

Jun 21, 2013 by Lewis Wood

News For and About Virginia's Credit Union System

May 30, 2013
  • Your comments and submissions are always welcomed. E-mail pr@vacul.org

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

Chapter News

Community Involvement

Marketing News

News About The Competition

Headline News
Chapter Officers Get Update on Chapter Structure Changes, League Board Expectations

Twenty-eight chapter officers, representing all 10 League chapters, gathered in Richmond Wednesday to review recently approved changes to chapter organization and to brainstorm ideas for improving educational offerings, boosting community involvement and mobilizing grassroots advocates. Provisions governing chapter structure were stripped last month from the League's Bylaws by a vote of the membership.

The elected League Board will now set chapter structure as Board policy to provide chapters greater flexibility in how they organize, while providing credit unions the option of joining any chapter in which they have a branch office.

"Our Chapter Task Force did a remarkable job of drafting a plan to give chapters the flexibility to mold and shape their organizations to better meet the realities of today's credit union system," said League President Rick Pillow. "This reality includes the fact that the number of credit unions is dwindling, many of our credit unions now have operations that stretch across multiple chapters areas, and in some cases, there's interest in pursuing mergers among the chapters." [read more]

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CU First Quarter Results Show Good Loan, Membership Growth

The National Credit Union Administration just released figures that claim the fastest first-quarter loan growth for federally insured credit unions in five years, as well as membership growth of more than 800,000 new members. The agency also reports a decline in delinquencies and charge-offs in the first quarter of 2013, and says the first quarter data reflect "continuing overall improvement in the credit union industry's performance." "As the economic recovery continues, American families are re-gaining their financial footing and so are federally insured credit unions," NCUA Chair Debbie Matz said. [read more]

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NCUA's Office of Small Credit Union Initiatives Offers Video Overview of Services; 'Stars' Virginia-Based CUs

The National Credit Union Administration's Office of Small Credit Union Initiatives has produced a video overview of services offered to small and low-income-designated credit unions. While it's true OSCUI offers a wealth of fantastic resources, you'll also appreciate all the Virginians "starring" in the video! [view it here]

CU Grassroots Tax Status Advocacy Effort Builds

Credit unions and their members already are heeding the call from the Credit Union National Association and the state credit union leagues to deliver this message to federal lawmakers: Don't Tax My Credit Union. And CUNA continues to add resources to its Tax Status Toolkit to support advocacy efforts by credit unions and their members. CUNA and the leagues have launched the large-scale, nationwide grassroots-mobilization campaign just at a time when the U.S. House and Senate have made broad-based tax reform a major priority. 

Social media contacts are among the key components of this grassroots campaign, making results difficult to precisely calculate; however, CUNA's Richard Gose says early indications show the campaign is off to a strong start. He reports that credit union advocates already have initiated 20,000 contacts on the credit union tax status with federal lawmakers via e-mail directly through a special CUNA website alone. Also, there have been 23,000 visitors to that site, DontTaxMyCreditUnion.org, since it was launched just two weeks ago. [read more]

As of Monday, Virginia-based credit unions had generated 487 emails to our Congressional delegation in response to the Don't Tax My Credit Union campaign. But those numbers are certain to pick up as more credit unions mobilize their memberships!

  • Additional information on the “Don’t Tax My Credit Union’ campaign is available at www.donttaxmycreditunion.org.
  • CUNA’s Credit Union Tax Status Advocacy Toolkit is available here.

> You can follow Argent Credit Union's good example in mobilizing supporters! The credit union sent an email to all board and supervisory committee members, associate directors, and management to view the information on the www.donttaxmycreditunion.org website and to contact their congressman and senators.

In addition, a similar email was forwarded to all employees of Argent, asking for them to do the same. The credit union will be adding the Don't Tax My Credit Union informational video to their website with a request for members to send in their email as well.

> Blue Eagle Credit Union (Roanoke) tells us it has drawn up a communication plan for its Don’t Tax My Credit Union campaign. It has produced a FAQ on the credit union tax exemption and the political history of the credit union movement as part of that campaign. It also has posted its campaign on its website to give members a chance to have their voice heard, too.  

> While visiting Richmond on Wednesday, we heard about Virginia Credit Union, Henrico Federal Credit Union, and Entrust Federal Credit Union phasing in their local campaigns. They are starting out with urging their staff members and volunteers to contact lawmakers, and have or will put on their websites the http://www.donttaxmycreditunion.org website button so that members can make their contacts.

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News About Credit Unions

Credit Unions in Top Spot in Latest Foresee Online Satisfaction Report

Credit unions are No. 1 when it comes to online customer satisfaction and customers are generally highly satisfied with their financial mobile sites, according to ForeSee’s Financial Services Benchmark report released Wednesday. Of the five financial segments measured, credit union sites scored the highest, with average satisfaction scores of 82 on a 100-point scale.

However, this new score is four points lower than what the benchmark study reported in 2011 when credit unions scored 86 in customer online banking satisfaction, one point less than the score earned by large banks. ForeSee said its numbers come from data from more than 335,000 surveys from the first quarter of 2013 in which consumers shared their experiences with online websites, mobile websites and mobile applications. [read more]

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CUNA's E-Scan: Mobile Services Head Three Of Top 10 Trends

Mobile banking, mobile payments and mobile malware head up the list of Top 10 trends credit unions will need to consider as they create their strategies and goals, according to the Credit Union National Association's just-released 2013-2014 Credit Union Environmental Scan. The 86-page E-Scan is a strategic planning tool that boards and senior management can use during their strategic planning sessions in the summer and fall, said CUNA Editorial Director Steve Rodgers. Mobile payments "is a new ballgame," according to the E-Scan.

"Members used to come to credit unions to get cash and credit union-branded checks or plastic cards. But members won't be coming to credit unions to get their mobile payment-branded devices. Mobile payments will be driven by access, not devices. The challenge will be to retain your members in a mobile payments world." [read more]

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Compliance/Regulatory Affairs News

CUNA Urges FASB To Drop Credit Impairment Plan

A Financial Accounting Standards Board (FASB) proposal that would change the methodology for recognizing credit impairment would be detrimental to the credit union system and could have serious, unintended consequences for borrowers and the economy, the Credit Union National Association warned Wednesday, urging the accounting board to abandon the plan.

The FASB proposal is "the most critical regulatory concern credit unions have faced in quite some time, including rules or proposals that have been issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act," CUNA President/CEO Bill Cheney underscored in a letter to the board. [read more]

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CFPB Issues Exemptions To Ability-to-Repay Rule

The Consumer Financial Protection Bureau (CFPB) Wednesday finalized changes to rules issued in January that require lenders to determine a borrower's ability to repay before writing a mortgage loan. The changes are designed to make it easier for some credit unions and other small creditors to make mortgage credit available to their communities by exempting them from some provisions of the rule.

The CFPB noted that the amendments are intended to facilitate access to credit by creating the specific exemptions and modifications to its Ability-to-Repay rule for small creditors, community development lenders, and housing stabilization programs. Credit Union National Association President/CEO Bill Cheney, who was contacted by CFPB Director Richard Cordray personally before the amendments were announced, welcomed the changes, noting, "We are hopeful these adjustments will enable more credit unions to continue to meet their members' borrowing needs in a way that minimizes risk and default." [read more]

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Derivatives Plan Concerns Include Fee Structure

While it considers it a positive that the National Credit Union Administration is seeking comment on a proposal to allow eligible credit unions to use simple derivatives to hedge against interest rate risks, the Credit Union National Association says concerns with the proposal are surfacing. In its May 28 issues of theCUNA Regulatory Advocacy Report, CUNA says the hottest issue surrounding the proposal right now is whether only those who want to participate in the program should bear the costs of applications and the supervision and examination costs associated with it.

"One of the concerns about the possible fees is that such a requirement could set a precedent for a new fee structure from NCUA for other new authority or services that a credit union is permitted to do if NCUA concludes the activity introduces more risk to the National Credit Union Share Insurance Fund," the CUNA  publication notes. CUNA also notes that restrictions, such as a limit on notational value at 100% of net worth for a Level I credit union and 250% for a Level II credit union, as well as interest rate and maturity caps, have also raised concerns. [read more]

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Governmental Affairs News

Del. Orrock Visits Virginia CU Branch

Del. Bobby Orrock (R-54) is in a primary fight, and has earned the endorsement of the League. Earlier this week, Virginia Credit Union offered its support by inviting the delegate to visit its Fredericksburg branch, which is in his district, later posting a photo of the visit on its Facebook page.

[view it here]

> This is an easy way for credit unions to show support to our legislative friends! Contact Karin Sherbin atksherbin@vacul.org if your credit union wishes to host a legislative visit.

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Why Cybersecurity Legislation Will Likely Come Up Short -- Again

The threat of cyberattack is an increasingly hot topic in Washington, but political interest alone appears unlikely to provide enough momentum to get cybersecurity legislation supported by financial institutions passed this year. The issue continues to gain widespread attention in the wake of numerous attacks on financial institutions and other companies in recent years, with some, including former Defense Secretary Leon Panetta, warning about the prospect of a future "cyber-Pearl Harbor" that could cause widespread damage to financial networks, the power grid or other key sites.

But a debate over how much information private companies should share with the government has divided lawmakers and complicated the push for a bill. (American Banker Online, May 29)

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Financial Services/Marketplace News

Consumer Confidence Surges to Five-Year High

Consumer confidence surged this month to its highest level in more than five years as optimism increased about the state of the economy and its prospects for the rest of the year, according to a closely watched private barometer released Tuesday. The Conference Board's Consumer Confidence Index jumped to 76.2 in May from the previous month's upwardly revised reading of 69. The figure exceeded analyst expectations of a more modest increase.

The last time the index was this high was in February 2008, at the start of the Great Recession. The index now has risen two straight months after plunging in March amid concerns about the effect of tax increases that kicked in at the start of the year as well as the federal budget cuts known as sequestration. [read more]
[related: Sequester Not Biting District Yet]

Equifax: Auto Loan Originations At Eight-year High

Auto-loan originations and the number of new-auto loans in the U.S. each set eight-year highs during January and February, according to Equifax Inc.'s National Consumer Trends Report, released Wednesday. The two months saw $69.6 billion originated in new credit for auto loans--more than 70% above the recession low of $40.2 billion for the same period in 2009, said the Atlanta-based credit information company. Equifax noted that 3.5 million new-auto loans originated in January and February, with the total number of loans at 59.8 million, nearly a four-year high. [read more]

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Consumers Spending Less But Not Saving More: Report

Consumers have curbed their spending in the wake of the financial crisis, but few are saving more and many still struggle to make ends meet, according to a new report from the Financial Industry Regulatory Authority. The report, released Wednesday by Finra's Investor Education Foundation, found that consumers nationwide have reduced spending slightly since Finra conducted its last "financial capability" study in 2009. However, 19% of Americans still spend more than they earn and more than half of respondents said they do not have "rainy day" funds to cover three months of expenses. (American Banker Online, May 30)

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Mortgage Rates are Highest in a Year

Mortgage rates have hit their highest level in more than a year, making homes more expensive for buyers who finance their purchases. The rate on a 30-year fixed-rate mortgage jumped 0.22 percentage point to 3.81% this week, according to Freddie Mac. That's up 15% from the record low of 3.31% set the week of Nov. 21, 2012. The 30-year rate was as low as 3.35% in early May. The 15-year fixed-rate mortgage also spiked, up 0.21 percentage point to 2.98%. [read more]

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Is Service Really Better at Small Institutions?

The long-held notion that community banks, by definition, provide exceptional customer service is getting debunked. Having local ties certainly gives small banks a strategic leg up, but a community connection alone does not guarantee excellent customer service, industry experts note. Rather, it requires extensive planning and smooth execution, experts say.

"Every bank hangs out a shingle saying they give the best service," says Don Macaulay, executive director of enterprise expansion and market development at Affinity Advisory Group. "Yet, when you call the bank, you can't get a live person on the phone. To me, great service is when you anticipate a customer's needs and you do something without having to be asked."

recent study by CS Consulting Group found that small banks that focus on service, rather than offering the lowest pricing, had more success. (American Banker Online, May 29)

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Education & Networking Opportunities

Latest Employment Law Hot Topics Focus of June 13 Human Resources Workshop

Join nationally recognized employment law attorneys Dan Summerlin and Tom Winn, of Woods Rogers PLC, for a full-day workshop on essential human resource management topics. Scheduled for June 13 in Richmond, this workshop will cover new developments coming out of the Equal Employment Opportunity Commission, the Department of Labor and the National Labor Relations Board. [learn more]

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Leadership Workshop Date Change

Companies spend thousands of dollars to recruit and train new managers, while the individuals who will lead your organization in the future are likely working for you right now.

In our Sept. 10 Leadership Workshop, we will discuss the keys to preparing your employees for advancement -- including creation of a career path, offering effective feedback, becoming a mentor, and putting employees into leadership situations before they step into leadership positions. [learn more]

> Please note that the date of our workshop has changed. This was previously scheduled to take place June 5. Our apologies for any inconvenience.

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Chapter News

Tidewater Chapter Meets June 6

Speaker Shelley Winegrad (BayPort Credit Union) will present a program on Virginia's Financial Industry Business at the Tidewater Chapter's June 6 meeting. Location: Greenbrier Country Club (1301 Volvo Parkway, Chesapeake, 23320). Time: 6 p.m. social; 6:30 dinner and meeting. [learn more]

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Tidewater Chapter to Host July 26 Charity Golf Tournament

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)

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Roanoke Valley Chapter Plans June 11 'Night at the Ballpark'

Join the Roanoke Valley Chapter June 11 for a night of baseball action, courtesy of the Salem Red Sox. Picnic begins at 6 p.m.; game time is 7:05 p.m. Cost: $21 with $2 discount for kids ages 4 through 12; ages 3 and under are free. RSVP by noon, May 31 with the names and ages of attendees to Jim Scott atjscott@memberonefcu.com.

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NoVA Chapter Meets June 13

Jeffrey Larroca, Attorney at Law, will offer a program on "Trends and New Developments in Employment Law," at the NoVA Chapter's June 13 meeting. Larroca focuses his practice on labor and employment and litigation.

Additionally, Jeffrey has significant insurance experience, including coverage litigation, premises liability litigation, personal injury, fidelity relating to employee dishonesty claims, and surety. Deadline for reservations is June 10. [read more]

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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]

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Community Involvement

Credit Unions Care Foundation Accepting Donations to Aid Oklahoma Tornado Victims

The Credit Unions Care Foundation of Virginia is accepting donations to aid those in Oklahoma impacted by the recent tornadoes. Credit unions and individuals can forward donations to the Foundation at PO Box 11469, Lynchburg, 24506. Please make note that your donation is for Oklahoma Tornado Relief. Individual donations may be tax deductible; consult your tax professional. Individuals can also donate by credit card. Visit this webpage to do so.

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Marketing News

Half of Bank Customers At Risk Of Switching

Within the next six months, 10% of retail banking customers worldwide say they likely will leave their bank, and an additional 41% of customers say they are unsure if they will stay or go, according to the World Retail Banking Report 2013. That indicates one out of every two banking customers are at risk of switching, said the report. Credit unions will want to take steps to make sure the people who do switch banks, switch to credit unions. Meanwhile, banks are being told to make their customers a more important concern. [read more]

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NCUA Marketing Webinar Now Available Online

The NCUA’s Office of Small Credit Union Initiatives webinar, “Driving the Bottom Line: Results through Marketing,” is now available online. Sandi Carangi, Director of Credit Union Marketing Services at the Pennsylvania Credit Union Association, and Gustavo Grüber, VP of Coopera Consulting, Inc., discussed marketing strategies to help credit unions improve outreach to current and potential members, including:

  • Developing core components of an effective marketing plan;
  • Understanding how marketing goals and strategies can affect a credit union’s financial performance ratios;
  • Analyzing consumer data and developing market research to help credit unions identify potential members; and
  • Using marketing strategies to reach the growing Hispanic population.

More than 700 participants joined the 90-minute webinar. A link to an archived audio recording and written transcript of the webinar is now publicly available online here.

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News About The Competition

The Real Story Behind Banks' $40B Record Earnings

On the surface, a regulatory report noting banks' first quarterly profit of $40 billion shows an industry that seems fully recovered from the financial crisis and primed for future growth. But a closer examination of the Federal Deposit Insurance Corp.'s industry update released Wednesday tells a different, and more dispiriting, story -- institutions that are still having trouble making profits from loans. Indeed, much of the record profit appeared due not to a suddenly resurgent industry, but a couple of idiosyncratic balance-sheet items at top-tier banks.

The rest of the report showed a trend that has been constant over the past several quarters, with banks facing flat interest-related revenue and making money mostly from reductions in loan loss provisions, an income booster that will soon run dry. " (American Banker Online, May 30)

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