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CURRENT Newsletter | 8 May 2014

May 8, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

News From Chapters

News About The Competition

Security/Fraud Prevention

Technology News

Headline News

Six Virginia Congressmen Sign on to RBC Letter to NCUA

Two additional members of our House delegation have signed on to the bipartisan letter that will be sent to the National Credit Union Administration (NCUA) to express concerns about its risk-based capital proposal. The latest members of Congress to sign on are Reps. Frank Wolf (R-10) and Rob Wittman (R-1).

They join fellow Reps. Jim Moran (D-8), Bobby Scott (D-3) and Robert Hurt (R-5), who is a member of the House Financial Services Committee. Rep. Gerry Connolly (D-11), ever the credit union champion, was first to sign the letter. The deadline for members of Congress to participate is May 9.

The League continues to reach out to House members asking for their assistance on the capital proposal.

 If your Congressmen hasn’t yet signed the letter, you can send him a message by going to www.mycuisme.com. Click on the Federal Issues topic on the left-hand menu. There is prewritten text available that you can personalize by using the name of your credit union and other information you would like to include. If your Congressmen has signed on, you can go to www.mycuisme.com’s Federal Issues icon and send a thank-you note!

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2013 a Record-Setting Year for Virginia-Based Credit Unions

Virginia's 166 not-for-profit, member-owned credit unions continued to see healthy increases in loans and new members in 2013, according to information from credit unions' federal  regulator, the National Credit Union Administration. Having emerged from the financial crisis and recession with healthy balance sheets,

Virginia-based credit unions were well-positioned to be consumers' lender-of-choice once the economy rebounded.

"Consumers are finding they like credit unions' consumer-friendly loan products, superior service and fewer fees," said Virginia Credit Union League President Rick Pillow. "Virginia-based credit unions had a solid performance last year as members turned to us to meet their credit needs and to take advantage of our safe, federally insured options for savings."

A record-setting $52 billion in loans were originated by Virginia-based credit unions in 2013, a 14 percent increase over 2012's total. Aggregate loan balances jumped a healthy 10.8 percent in 2013, reflecting strong growth in first mortgages, new automobile loans and credit cards. Credit unions' aggregate loan portfolio was up 12 percent for the year thanks to the robust loan growth. The growth in first mortgages and credit card balances were the fastest seen since 2008.

[READ MORE]

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Virginia's Credit Unions Represent $828 Million Benefit for Members

With better loan and savings rates, and fewer fees than for-profit banks, Virginia-based credit unions delivered $882 million in direct financial benefits to their members in 2013. That and other information about Virginia-based credit unions is included in the Virginia Credit Union League's latest Impact Report, which covers calendar year 2013.

"As member-owned financial cooperatives, our mission is simply to serve our members and work toward the betterment of our communities," said Rick Pillow, president of the Virginia Credit Union League, the trade association for the Commonwealth's 166 credit unions. "Our credit unions touch the lives of millions each day, meeting their needs for home loans, car loans and many safe, insured options for retirement savings."

[READ MORE]

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Credit Unions Care Foundation of Virginia Donates $5,000 to the Foodbank of the Virginia Peninsula

The Credit Unions Care Foundation of Virginia recently donated $5,000 to the Foodbank of the Virginia Peninsula to support various programs, including the Kids Cafe, BackPack Program, and mobile pantry initiatives that deliver food to local senior and low-income living sites.

"Food insecurity and hunger are painful realities for many in our communities," said Foundation Chief Operating Officer David Miles. "We appreciate the good work of the Virginia Peninsula Foodbank and its partner agencies in ensuring those in need don't go hungry, and salute them for the innovative programs that specifically aid young people and seniors in their service region who might not otherwise have access to nutritious meals." 

[READ MORE]

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CFPB's 'Minor' Changes to Mortgage Rules May Have Major Impact

The Consumer Financial Protection Bureau proposed several changes to its biggest mortgage rules last Wednesday, which would effectively allow lenders to get more loans defined as "qualified mortgages." The changes addressed key areas that the financial services industry has raised concerns about since the rules took effect in January, including giving more flexibility for loans to meet QM status despite its cap on points and fees and its restrictions on debt-to-income ratios. (American Banker Online, May 1)

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Credit Union Reg Relief Bills Pass House

Three credit union regulatory relief bills were adopted by the U.S. House by voice vote on Tuesday. The bills, two of which are stand-alone credit union measures, are all important steps in the Credit Union National Association's larger relief agenda and attack credit union regulatory burden from a number of fronts. Under suspension of the rules, these CUNA-backed bills were passed: 

  • H.R. 3584, the Capital Access for Small Community Financial Institutions Act, introduced by Reps. Steve Stivers (R-Ohio) and Joyce Beatty (D-Ohio). This bill corrects a drafting error in the Federal Home Loan Bank (FHLB) Act thereby allowing state-chartered, privately insured credit unions to join the FHLB system. The change would give 132 privately insured credit unions across the country additional opportunities to provide mortgage credit to their members, CUNA has noted.
  • The Community Institution Mortgage Relief Act (H.R.  3468). Reps. Ed Royce (R-Calif.) and Ed Perlmutter (D-Colo.) introduced this bill to provide National Credit Union Share Insurance Fund (NCUSIF) coverage for trust accounts, such as Interest on Lawyer Trust Accounts (IOLTAS) and other similar accounts. CUNA backed this bill as necessary because the National Credit Union Administration has interpreted that the Federal Credit Union Act does not permit it to extend such coverage. H.R. 3468 would provide parity in the insurance treatment of trust accounts offered by credit unions with the treatment of similar accounts offered by banks.
  • H.R. 2672, which grants credit unions and other lenders greater input into rural-area designations made by the Consumer Financial Protection Bureau. The rural county designations determined by regulators can impact the types of products credit unions may offer their members in those areas, and CUNA maintains that any time credit unions can gain an additional opportunity to provide input into the process, they should do so.

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Payments Workshop Slated for May 21

Make plans to attend the Payments Workshop, May 21 in Richmond. Sessions include The Branch of the Future, The Future of Payments System, and ACH Rule Changes.
[REGISTER ONLINE]
[LEARN MORE HERE]

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News About Credit Unions

Bank, Credit Union Regulators Split Over Payday Loan Products

It's rare to see any financial regulator these days praise an institution for offering products similar to payday loans. But that's exactly what National Credit Union Administration Chairman Debbie Matz did recently when she commended a credit union in Ohio for offering small-dollar advances and other products for struggling depositors as it was seeking a significant charter expansion to reach 1.8 million people.

Her comments highlighted a key difference between the banking and credit union sectors, where many bankers feel their regulators are actively chasing them away from deposit advance products. (American Banker Online, May 2)

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Governmental Affairs News

100% for VACUPAC

Virginia Credit Union has 100% pin participation from Board and senior management in support of the Virginia Credit Union Political Action Committee (VACUPAC).

We thank the credit union for its continued commitment to Virginia credit unions’ only state political action committee.

Learn more about VACUPAC here

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'Ability to Repay' Rule Passes Committee, Other Votes Pushed Back

Legislation that addresses some credit union concerns regarding points and fee definitions in the Consumer Financial Protection Bureau's amended final "Ability to Repay" rule was passed, and votes on other financial services bills were delayed, during a Wednesday House Financial Services Committee markup.

Lead sponsor Bill Huizenga (R-Mich.) said his Mortgage Choice Act of 2013 (H.R. 3211) aims to "help low- and middle-income borrowers as well as prospective first-time homeowners realize a portion of the American Dream: owning their own home."

[READ MORE]

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Financial Services/Marketplace News

Another Bad Sign for America's Middle Class

You don't have to be an economic victim of the Great Recession to know that America's middle class is being squeezed in an unprecedented manner. Not only is the U.S. middle class no longer the world's richest, according to recent research, but millions of families who were once financially secure are now living hand-to-mouth. What's going on?

A new report from the National Employment Law Project finds that, nearly five years after the recession officially ended, most of the jobs that have been created during the recovery offer lower wages. Such positions made up 22 percent of jobs lost in the recession, but have accounted for 44 percent of employment growth.

The labor research and advocacy group also found that, from the outset of the recession in late 2007 to its low point in February of 2010, "employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries." By contrast, mid-wage positions, which composed 37 percent of the jobs cut in the recession, have made up only 26 percent of those recovered. High-wage industries, which made up 41 percent of recession jobs lost, reportedly had a 30 percent recovery growth.

[READ MORE]

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Seniors Pile Up Mortgage Debt: CFPB

Mortgage debt held by the elderly has soared over the past decade, driven in part by the foreclosure crisis, the Consumer Financial Protection Bureau said in a report Wednesday. Seniors "put themselves at risk of losing their nest eggs and their homes" by carrying high levels of debt into retirement, CFPB Director Richard Cordray said in a press release that accompanied the report.

The bureau's Office for Older Americans found that the percentage of homeowners 65 and older with mortgage debt rose to 30% in 2011 from 22% in 2001. Median balances increased during the same period, to $79,000 from $43,000. (American Banker Online, May 7)

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For Millennials, Retirement Beats Home Ownership

When we think of financial security, the prospect of a home of one's own is often top of mind. But for millennials, not so much. In a new survey of American adults commissioned by the National Endowment for Financial Education, half the respondents said retirement savings were their top financial goal, and just 13 percent said home ownership was a top priority. That's a shift from 2011, when 47 percent prioritized retirement and 17 percent focused on home ownership.

For respondents ages 18 to 34, the millennials, the difference was less pronounced—but the shift over time was notable. In 2014, 29 percent said retirement savings was their top goal, and home ownership was tops for just 21 percent of them. Three years earlier, home ownership was the top goal for 26 percent of millennials, while adequate retirement savings mattered most to 25 percent. Not only that, the share of millennials whose top priority is retiring early has jumped from 6 percent in 2011 to a whopping 26 percent this year.

[READ MORE]

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Education & Networking Opportunities

Free Seminars on Shaping Your Loan Portfolio Available

The economy has begun to stabilize in many areas, but credit unions are still feeling the impact of the financial crisis both directly through non-performing loans and indirectly through regulatory pressure to understand the concentrations of risk that could be hiding in their loan portfolios. The sessions will explore methods to uncover risks and opportunities within your loan portfolio using data analytics.

Location: June 24 - Department of the Interior (Kiowa Room, Basement Level) (1849 C Street NW, Washington D.C. 20240). June 23 – Maryland & D.C. Credit Union Association (Columbia, Md.) Seminar starts at 9:45 a.m. both dates. Contact Interior Federal Credit Union's Bill Kennedy to register – bkennedy@doifcu.org.

[LEARN MORE]

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News From Credit Unions

Chartway Federal Credit Union Makes Home Buying Easier for Hometown Heroes

The dream of home ownership just got more affordable and accessible for public service employees – from teachers and fire fighters, to law enforcement officers, military members, and civil servants – thanks to a new, creative mortgage program offered by Chartway Federal Credit Union.

Called the “Hometown Hero Mortgage Loan Program,” these dedicated workers can step into a home loan with no down payment, 100% financing, no mortgage insurance, and low closing costs. The program is available to qualified applicants regardless of previous home ownership.

[READ MORE]

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UVA Community Credit Union Donates Biz Kid$ Box Set for CMN Hospital

When Credit Unions for Kids & the National Credit Union Foundation (NCUF) recently partnered to enhance the financial education opportunities for patients and families at every Children's Miracle Network (CMN) hospital in the U.S., UVA Community Credit Union immediately jumped on board by donating a box set of Biz Kid$ DVDs to the University of Virginia Children’s Hospital.

[READ MORE]
[RELATED: Credit Unions Can Provide Local CMN Hospital with DVD Box Set of Biz Kid$ TV Show]

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Enterprise Car Sales, Argent Credit Union Partner on Spring Car Sale May 15-17

On May 15–17, Enterprise Car Sales and Argent Credit Union will once again host their springtime Deals on Wheels Used Auto Sales Event at 3611 Oxbridge Road, N. Chesterfield, 23236. During this event, members can experience the Perfect Used Car Package® with Enterprise Car Sales and great low rates as low as 1.49% APR from Argent Credit Union. [READ MORE]

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Newly Elected Members Take Seats on Belvoir FCU's Board of Directors

Belvoir Federal Credit Union announced the winners of their annual election at the Annual Meeting held on April 15. With four candidates running for three positions, Belvoir Federal members named two incumbents and one new member to the Board of Directors. Balloting was conducted online and by mail to allow eligible members the opportunity to participate in the election. Of the 22,000 eligible voters, members who were 16 years old and older, over 8.5% of the ballots were returned.

[READ MORE]

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Park View Federal Credit Union Ranks No. 1 in Virginia for Mortgage, Home Equity Loans

Park View Federal Credit Union (PVFCU) was ranked first in Virginia for first mortgage and home equity penetration among credit union members for 2013. PVFCU was ranked 12th in the nation for home equity penetration. “Jonathan Tieszen and Julie Yoder are extremely committed and dedicated to ensuring members receive the best service available in our local mortgage loan industry,” said John Beiler, CEO of PVFCU.  “They have excellent expertise and knowledge of mortgage lending and work to find solutions that meet the needs of our members.” 

[READ MORE]

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News From Chapters

Central Virginia Sets Annual Meeting for May 14

The Central Virginia Chapter Annual Meeting and Elections will be held Wednesday, May 14 at the Best Western Inn & Suites Inn in Waynesboro, Virginia. 

Registration will be from 5:30 p.m. to 6 p.m., dinner will begin at 6 p.m. followed by the meeting and elections at 6:45 pm.

Dinner will include: soup, sandwiches, cheese & crackers, fresh fruit, brownies, ice tea and coffee. The fee is $15 per attendee.

Please email Tracy Brown at tracybrown@uvacreditunion.org to attend.

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News About The Competition

Bank Customer Satisfaction Is Up

The newly released 2014 J.D. Power U.S. Retail Banking Satisfaction Study says banks are doing a better job, with customer satisfaction rising. Overall, the trend was positive, although banks received mixed results in several areas. In aggregate, customer satisfaction improved by 22 points, to 785, on J.D. Power's proprietary 1,000-point scale.

Among this year's positives: service fees, long the bane of banks' existence, seem to be gaining greater customer acceptance. In terms of serving the affluent, banks appear to be falling down due to a failure to provide the sorts of experiences the wealthy are accustomed to in luxury hotels and first-class airline cabins, according to Jim Miller, J.D. Power's director of banking services.

The industry group that J.D. Power defines as midsize banks--those with $2 billion to $33 billion in deposits--fell behind others. The midsize institutions are getting squeezed between smaller banks' superior customer service and their biggest rivals. They appear to be struggling especially with minorities and millennials, who are defined as customers born between 1977 and 1995. (American Banker Online, May 10)

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Security/Fraud Prevention

Credit Unions Invited to Participate in Elder Financial Abuse Prevention Program

Filene Research Institute -- a consumer finance think and do tank -- is looking for credit unions to test the True Link Card prototype starting in July -- a tool to help credit unions proactively identify, triage, and alert elder members to potential financial fraud.

Filene is hosting a free, informational webinar on May 22 for credit unions to learn more about the True Link Card prototype and test opportunity. The prototype is a prepaid card product designed to prevent elder financial abuse from San Francisco startup True Link.

[Click for More Information & to Register for Webinar]

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Technology News

Nice Systems Debuts Real-Time Voice Authentication for Bank Call Centers

Nice Systems (NICE) in Ra'anana, Israel has developed voice recognition software that significantly reduces the time a call center employee needs to authenticate customers. The Nice Real-Time Authentication solution screens customers during their conversation with an agent using their voice as a unique identifier, avoiding the need to enter PINs or passwords.

It combines voice biometrics with a customer's interaction history that serves as a second layer of authentication. Nice's patent-pending Seamless Passive Enrollment process uses previous call recordings to create a voice print that automatically confirms the caller's identity, the company said.

Already tested by several large financial institutions across the globe, according to a press release, Nice's technology enables users to reduce fraud by identifying both customers and known fraudsters through an interface designed to use voice biometrics analysis to manage non-enrolled callers and authentication anomalies. NICE's Contact Center Fraud Prevention offers Nice Actimize's Remote Banking fraud protection across all remote banking channels, including phone, web and mobile. (American Banker Online, May 2)

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