News and Information For and About Virginia's Credit Union System
- Young Professionals Network Hosting June 25 Event in NoVA...and You're Invited!
- Credit Union Membership to Hit 100 Million This Year
- League President Pillow Represents Credit Unions at Annual House Republican Retreat
- Sponsorship Opportunities for The Credit Union House of Virginia: Be a Part of History
- Get Recognized for Your Good Works! Now Accepting Entries for Desjardins, Dora Maxwell and Louise Herring Awards
- Credit Unions Care Foundation Helps Sponsor Biz Kid$ Videos for Local CMN Hospitals
News About Credit Unions
- Credit Unions Post Solid Growth for Q1, Earn $2.1 Billion
- A Touch of Tech Helps Even Small CUs Outperform Their Peers
Governmental Affairs News
- Johnson, Crapo Call for 'Clear, Well-Calibrated, Effective' RBC Rule
- Capitol Hill Takes Hard Look at Student Lending
Financial Services/Marketplace News
- Expect Good — Not Great — Lending Conditions In Second Half
- Experian: 73- to 84-Month Auto Notes Growing
- Customer Service Won't Save Community Banks
- Trulia Reveals Almost Half of Millenial Homebuyers Plan to Ask Parents for Down Payment
- Many Americans Still Struggling to Cover Housing Costs: Report
- See the Economic Recovery in 17 Charts
- Schenk: Retirement Planning a Huge Opportunity for CUs
- Stunning Study on Dementia, Couples and Money
- Merchants Seek More Time to Take Debit Cap Case to Supreme Court
News From Credit Unions
- UVa Credit Union Says Focus on Members Secret to 60 Years of Business
- Langley Federal Credit Union Donates $5,000 to Support Child Abuse Treatment Program
- CommonWealth One FCU Hosts Record Shred Days
- $4,000 in Education Scholarships Awarded by Belvoir Federal and GEICO
- Belvoir Federal Launches Business Checking and Lending to Members
- Beach Municipal FCU Announces Education Scholarship Recipients
Calling all NoVA-area young credit union professionals (age 35 and under)! You are invited to the Virginia Credit Union League’s Young Professionals Networking Mixer on June 25 at Uncle Julio’s in Woodbridge, Va. Come network with other young professionals from local credit unions, play some games, enjoy food and drinks, and grab some info about Virginia’s Young Professional Network (YPN)!
CUNA Mutual Group’s May Credit Union Trends Report, based on March 2014 data, shows credit union membership was up 457,000 in March. At 99.4 million, total membership is up 1 million YTD and 2.8 million since March 2013. Expect gains to continue, but at a more sustainable pace. Membership is expected to hit 100 million later this summer.
League President Rick Pillow and Senior Vice President David Miles earlier this week attended the three-day annual retreat of the state House Republicans, an event that gave them the opportunity to reconnect with almost all the members of the caucus, including legislative leaders. Pillow said he spent time talking with House Speaker Bill Howell, Majority Leader Kirk Cox, and chairman of Commerce and Labor Terry Kilgore, as well as delegates such as Jimmie Massie.
At dinner Monday evening Pillow sat with Del. Rob Bell, who is vice chairman of the Courts of Justice Committee, which sometimes handles credit union legislation, and a member of Commerce and Labor, the committee that handles most bills of interest to credit unions. Also at the dinner table was Del. Rick Morris, a member of the Courts of Justice Committee.
The League also sponsored a golf clinic at the retreat that was well-received. Many of the legislators asked about the progress on the League’s Richmond office, saying they would take advantage of the reception space when it’s completed.
Sponsorship opportunities for The Credit Union House of Virginia are still available! We're excited about the response to date, as we've raised almost $900,000 in sponsorship funds, but there's still plenty of opportunities for credit unions, chapters and even individuals to get involved.
Earlier this year, your League Board approved a plan to renovate buildings the League purchased in downtown Richmond. An important component of that plan is creation of a meeting and event facility that showcases the strength of the commonwealth's credit unions - The Credit Union House of Virginia.
Get Recognized for Your Good Works! Now Accepting Entries for Desjardins, Dora Maxwell and Louise Herring Awards
The Desjardins, Dora Maxwell and Louise Herring awards are CUNA programs that are conducted through the state Leagues. The entries highlight the good that credit unions do and are useful to show your members and communities that the “People Helping People” motto is not a phrase, but a genuine call to action in your day-to-day business. Both CUNA and the Leagues use the submitted entries to prepare, publish, and provide proof to media inquiries and our governmental officials that we are committed to our mission to serve our members.
Your award entry (whether it’s a winner or not), helps us demonstrate the Credit Union Difference to those who assume all financial institutions are alike. There are four award entry categories. Two are for financial education outreach (youth and adults); one is for community outreach (social responsibility); and one is for credit unions who adhere to credit union philosophy.
Based on the generosity of credit union organizations, all 158 Children’s Miracle Network (CMN) Hospitals in the United States have been provided with entertaining financial education videos through the Emmy Award-winning TV show Biz Kid$.
This is the result of a recent partnership between the National Credit Union Foundation (NCUF) and Credit Union for Kids (CU4Kids) to enhance the financial education opportunities for patients and families at CMN Hospitals. During the past three months, leagues, state credit union foundations, chapters and credit unions alike donated box sets of Biz Kid$ to their local CMN Hospital with CO-OP Financial Services underwriting half the cost. Biz Kid$ is the credit union funded public television series that teaches kids about money management and entrepreneurship.
The Credit Unions Care Foundation of Virginia helped make possible Biz Kid$ video set donations to the CMN Hospitals in Richmond, Norfolk, Lynchburg and Roanoke. UVA Community Credit Union sponsored the Biz Kid$ video set for the Charlottesville hospital.
News About Credit Unions
The National Credit Union Administration (NCUA) is reporting that credit unions posted solid growth over the last year. Total assets grew $42.6 billion, or 4.0 percent, from the first quarter of 2013, reaching $1.1 trillion. Share and deposit accounts rose 3.6 percent over the year to $943.1 billion, compared to $910 billion at the end of the first quarter of 2013. In the first quarter of 2014, outstanding loan balances were up 8.8 percent from the first quarter of 2013 to $652.7 billion.
The increase in loans was broad-based. Credit unions reported net income of $2.1 billion for the first three months of 2014. Interest income was up $226 million from a year ago to almost $9 billion. Total interest expenses fell by 9 percent over the year to slightly more than $1.43 billion. But non-interest income fell by roughly $234 million year-over-year to almost $3.4 billion.
[RELATED: Big Drop in First Quarter Mortgages, 'Great Divide' Goes On: NCUA]
[RELATED: Mortgage Originations Drop Nearly 60%]
[RELATED: NCUA Q1 Report Highlights CU Loan, Membership Growth]
[RELATED: Monthly CU Survey Indicates Double-Digit Loan Growth]
Tech-savvy small credit unions (and Callahan lists five key things that make one a tech-savvy credit union) generally have better product penetration compared to all peers, and boast higher loan, share and member growth rates.
Governmental Affairs News
The leadership of the Senate Banking Committee has asked federal credit union regulators to carefully consider any negative impact their risk-based capital proposal could have on credit unions' agricultural lending and on their ability to raise and maintain certain capital levels. Sens. Tim Johnson (D-S.D.), the banking panel's chair, and Mike Crapo (Idaho), its ranking Republican member, were addressing the National Credit Union Administration's plan that would replace existing risk-based net worth requirements with new risk-weighted asset and capital requirements.
The rule, issued for comment in January, would apply to federally insured "natural person" credit unions with more than $50 million in assets. The senators sent a letter Wednesday to urge the NCUA to finalize rules that are "clear, well-calibrated, and work effectively with other prudential requirements to ensure that there are no unintended consequences." "The NCUA should also provide clear guidance on how credit unions should plan for supervision going forward and provide sufficient time for credit unions to adjust and comply with any new standards," the legislators wrote.
The NCUA reports it has received more than 2,000 comments on the risk-based capital (RBC) plan. The Credit Union National Association, in its comment letter, said, "(T)he economic and legal issues spawned by the proposal are numerous, the policy questions are real, and, as evidenced by the overwhelming level of interest in this rule, the stakes for credit unions and their 99 million member-owners could not be higher."
Lawmakers appear increasingly concerned about issues related to student lending, including the possibility that the record level of student loan debt could end up damaging the economy.
The Senate held two separate hearings on the issue on Wednesday, covering everything from bank ties to universities to trouble with student loan servicers. Following are three key takeaways from Capitol Hill's interest in the subject:
- Policymakers are worried about bank partnerships with universities
- Lawmakers fear the economic impact of student loan debt
- Some lawmakers want to compel the government to release more data.Lawmakers have also focused on ways to help students refinance existing debt or provide more financial information to students upfront under the premise that it would ultimately reduce costs. For example, Democratic senators Mark Warner and Ron Wyden along with Republican Marco Rubio have introduced a bill that is designed to streamline information on higher education, such as loans and employment prospects.
(American Banker Online, June 4)
Financial Services/Marketplace News
Credit unions can expect reasonably good lending conditions as the financial crisis gets a little further in the rear-view mirror during the second half of this year, but they will continue to be challenged by regulatory pressure. Dave Colby, chief economist at CUNA Mutual Group, predicted vehicle lending will "continue to be excellent," although he cautioned auto loans no longer will see an accelerating growth rate because at some point the growth rate will peak.
First mortgages are "really dominating" growth for CUs, he added, noting total first mortgages are up to 25% of credit union assets, while fixed-rate first mortgages now are 18% of assets.
"NCUA is concerned about risk from mortgages, but credit unions are making good income. I do not see a substantial change in interest rates in the second half, short or long," he said. "I do not see spread compression until the middle of 2015, when short-term rates will start to climb rapidly."
If credit unions can be as good at purchase mortgages as they have been with refis, Colby said they should do well. He said booking a 4% mortgage with a 25 basis point cost of funds is a better return than any current investment.
Car loans with seven-year terms are becoming more of the norm as consumers yearn for lower monthly payments. That’s according to Experian Automotive’s latest State of the Automotive Finance Market report released Monday, which showed the average car loan term in the first quarter reached 66 months for the first time since the firm started publicly reporting data in 2006.
The analysis also showed that loans with terms extending out 73 to 84 months made up 24.9% of all new vehicle loans originated during the quarter, growing 27.6% since Q1 2013.
Community bankers often argue that customer service is the differentiator between their small institution and the national bank down the street. They hold up the promise of personal, one-on-one engagement with customers as the best weapon in their effort to triumph over big banks' convenient locations and high-tech tools. But the strategy is not working. Even if large national banks do provide inferior customer service, it's not slowing their growth.
The number of small banks – those under $10 billion in assets—declined 24% between 2000 and 2013, according to a report from the Mercatus Center at George Mason University. Almost 2,000 small banks disappeared during that time period. While community banks' share of domestic deposits was nearly cut in half, the five largest national banks more than doubled their market share.
The five largest banks now hold 44% of U.S. banking assets and 40% of domestic deposits—up from 23.5% and 19.5%, respectively, in early 2000. Moreover, while some customers may vow to ditch big banks because of poor customer service, they rarely make good on the threat. Forty-three percent of megabank customers say they are unsatisfied with their institution, according to the 2014 Consumer Banking Insights Study.
But 63% of those customers said they had never considered switching to a local community bank or credit union. They stick with their banks despite dissatisfaction because it's simply "too much of a hassle" to change, according to 59% of respondents. It's also true that customer experience at big banks is getting better. National banks have focused on improving customer service since their reputations took a blow during the most recent financial crisis. And they have been successful.
Consumer satisfaction with big banks now sits at an all-time high, according to the J.D. Power 2014 U.S. Retail Banking Satisfaction Study. While big banks have historically trailed small banks in customer satisfaction, the gap between big banks and smaller ones has narrowed each year. (American Banker Online, June 4)
Trulia, a leading online marketplace for home buyers, sellers, renters, and real estate professionals, today issued the findings from its latest consumer survey with millennial home buyers. For sixty percent of young adults, aged 18-34, their finances are the single biggest obstacle standing between them and homeownership. As a result, 50 percent have to go to family members for help in achieving their dream.
Lack of savings, debt and poor credit are all reasons why millennials are unable to pull together the necessary down payment for a house themselves. In response, half of the millennials surveyed said they would ask their parents or even their grandparents for help. [READ MORE]
Economists and housing experts maintain that the housing crisis is long over, but many Americans beg to differ. In a survey of housing attitudes conducted by the John D. and Catherine T. MacArthur Foundation, 51% of respondents said they believe that the country is still in the midst of the housing bust and another 19% think the worst is yet to come.
Only 25% of respondents believe that "the housing crisis is pretty much over," according to the survey, which was conducted in April and was released this week. (American Banker Online, June 4)
Employers have been creating new jobs for more than four years now. Add up all the monthly gains, and we're just a hair away from recovering the 8.7 million jobs lost in the financial crisis. That said, the economy still needs even more jobs to keep up with population growth.
Economists surveyed by CNNMoney expect it could still take two to three years to get back to "full employment," with an unemployment rate around 5.5%.
Financing a comfortable retirement is one the biggest life issues facing most consumers—and yet most are ill-prepared and ill-equipped to deal with this challenge, says Mike Schenk, vice president of CUNA’s economics and statistics department.
“For many, saving for retirement isn’t even on their radar,” Schenk says. “Even those who are aware and concerned, the commitment they’ve made it pathetic: Only half of U.S. families have any kind of retirement account, and among those who do, the median amount is roughly $45,000.”
This could be an important topic for your next money management seminar. A new study of Americans over 50 and their spouses between 1998 through 2008, by economists Joanne W. Hsu of the Federal Reserve Board and Robert Willis of the University of Michigan, found that as cognition declines for the “financial decision maker,” money management is eventually turned over to his (or her) “cognitively intact” spouse. No surprise there.
But Hsu and Willis said that handoff from the dementia victim often doesn’t happen until “well after difficulties handling money have already emerged” and “even after he is aware of his difficulties handling money or has even received a diagnosis of a memory-related disease.”
Merchants seeking a court ruling that would cause the Federal Reserve Board to re-establish debit cap fees at a lower rate want more time to consider bringing the case to the U.S. Supreme Court. Merchants have been challenging the Federal Reserve's 24-cent debit fee cap since it took effect in October 2011. (Credit Union Journal, June 2)
News From Credit Unions
Improvements to digital customer services and a bricks and mortar expansion are the centerpieces of the University of Virginia Community Credit Union’s growth strategy. Officials recently shared their vision at the credit union’s annual meeting, which marked the start of the organization’s 60th year.
“All the decisions that are done are for the membership as a whole, not what’s best for someone who has stock in the company,” said credit union spokeswoman Janine Williams. “That’s our overall philosophy of people helping people, because that is the concept of how we’re formed.”
Langley Federal Credit Union presented a check in the amount of $5,000 to Children’s Hospital of the King’s Daughters (CHKD) for their Child Abuse Treatment Program. The program provides assessment and treatment services for children throughout greater Hampton Roads and outlying areas who are suspected of being abused and/or neglected.
The main program in Norfolk is supported by satellite offices in CHKD Health and Surgery Centers in both Newport News and Virginia Beach. The program’s team of professionals cares for approximately 1,000 children each year.
CommonWealth One’s Annual Community Shred Days were held on April 26 in Harrisonburg and May 3 in Alexandria. In Harrisonburg, a record number of pounds of paper were shredded with 8,020 total pounds by H&R Contractors, 3,520 pounds more than last year. There were 11,400 pounds shredded at the Alexandria event by Safeguard Shredding.
Belvoir Federal Credit Union and GEICO partnered together to award $4,000 in education scholarships. One graduating high school senior and one continuing education student will each receive $2,000 towards their educational expenses.
Belvoir Federal Credit Union has introduced Business Checking accounts and Business Lending options to members. “We are excited to offer Business Checking accounts. It opens new opportunities for our members and allows them to save money with their business accounts just as they do with their other Belvoir Federal saving and loan products,” stated Michael Ligon, Chief Financial Officer of Belvoir Federal Credit Union.
Beach Municipal Federal Credit Union is pleased to announce that Trudee Wiltshire and Jordan Barnes are the recipients of this year’s Beach Municipal Federal Credit Union Education Scholarships.
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.
Consumers born since 1980 have a significantly different perspective on financial services than previous generations, and credit unions should pay close attention to those differences, according to CO-OP Financial Services.
The financial technology company, based in Rancho Cucamonga, Calif., presented results of its “Unlocking the Millennial Mystery” survey at its THINK 14 conference in New Orleans. For millennials, positive customer experiences are largely driven by the basics – deliver on expectations and treat people with respect, according to the survey of 500 consumers.
“The competition among financial service providers to attract millennials is fierce and getting more so as technology-based products seem to change the market environment almost daily,” said Stan Hollen, president/CEO of CO-OP Financial Services.