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CURRENT Newsletter | August 8, 2014

Aug 8, 2014 by Lewis Wood

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

Headline News

News About Credit Unions

Compliance/Regulatory Affairs News

Governmental Affairs News

Financial Services/Marketplace News

Education & Networking Opportunities

News From Credit Unions

Chapter News

Marketing News

Security/Fraud Prevention

Technology News

Headline News

Credit Unions, League Reps Visit Congressmen Connolly, Scott

Credit union representatives and League staff met with Congressman Bobby Scott (D-3) and Congressman Gerry Connolly (D-11) in separate district meetings this week.

The head of Virginia Credit Union’s member business lending program, Mike Noble, and a member of the Board of Directors, Roscoe Roberts, joined League President Rick Pillow and Senior Vice President David Miles in meeting with Scott in Richmond on Monday. Staff reported the meeting went well, and Scott requested additional information on member business lending. Scott most recently showed support for credit unions by signing on to the House letter voicing concern about the risk-based capital proposal from the National Credit Union Administration (NCUA).

On Tuesday Belvoir FCU staffers Gaye DeCesare (who is also a League board member) and Jason Lindstrom, along with the League’s director of governmental affairs Karin Sherbin, met with Connolly in his Annandale office.  They thanked the Congressman for his credit union support, as demonstrated by his co-sponsoring the bill to raise the cap on member business lending, and his co-signing the House letter to NCUA on its capital proposal.  The credit union delegation updated Connolly on the NCUA’s pledge to make changes in the proposal. [READ MORE]

Quit The Hit Rolls Into Watermelon Festival on Sunday...Stop By and Say, 'Hi!'

Quit the Hit is back in action and ready to hit the road for a second tour! Your League is planning to attend various festivals and events throughout Virginia this Fall to showcase Quit the Hit and continue to drive consumers to QuitTheHit.com to learn more about credit unions.

The first stop is the Carytown Watermelon Festival in Richmond on Aug. 10! So come out and enjoy the fun and get your photo taken at the Quit The Hit booth.

Registration Open for VACUPAC Golf Classic, Legislative Leadership Forum

Registration is now open for the 26th Annual VACUPAC Golf Classic (Sept. 30) and the League's Legislative Leadership Forum (Oct. 1). The Forum is free but we do ask that you register to aid us in planning for meals and meeting space. This year's Forum features a keynote by Bob Holsworth, a nationally known political analyst, and state and federal legislative updates.

The VACUPAC Golf Tournament is our signature fundraising event in support of the Virginia Credit Union Political Action Committee, a non-partisan political action committee dedicated to the preservation and advancement of Virginia’s credit unions. Sponsors and golfers are needed for the golf tourney. Learn more here.

Special thanks to the following credit unions and organizations for having signed on as sponsors: CUNA Mutual Group, Virginia Credit Union, Martinsville DuPont Credit Union, Entrust Financial Credit Union and Peoples Advantage Federal Credit Union!

Contribute to VACUPAC and (Possibly) Win $500!

Contribute to the Virginia Credit Union Political Action Committee (VACUPAC) for a chance to win $500! VACUPAC is a non-partisan, voluntary effort to support political candidates who support credit unions and the issues that matter to us. A $500 winner will be randomly selected on Oct. 1 at the Legislative Forum. Credit union employees/volunteers who have contributed to VACUPAC on or before Sept. 15, 2014 get a chance to win! You need not be present to win!

[LEARN MORE]
[DOWNLOAD THE FLYER FOR DISPLAY AT YOUR CU]

100 Million Memberships Sparks Much Media Attention

The Credit Union National Association's announcement that America's credit union membership has topped 100 million was cause for celebration, and one that was noticed by media outlets across the nation.

Today, volunteers from NoVA Chapter credit unions are volunteering at the monthly Truckeroo event in D.C., passing out koozies in celebration of the 100 Million Membership milestone! Truckeroo is a popular event celebrating the city's best food trucks! [READ MORE]

[RELATED: Nation's Credit Unions Celebrate 100 Million-Membership Milestone!]

Number of Low-Income Credit Unions Passes 2,100 Mark

Two years after the National Credit Union Administration announced its low-income credit union initiative, 2,107 federally insured credit unions now have the low-income designation, the agency said today. Together, these credit unions have 23.6 million members and $218 billion in assets. The designation offers several benefits to credit unions, including:

  • An exemption from the statutory 12.25 percent cap on member business lending, which expands access to capital for small businesses and helps credit unions diversify portfolios.
  • Eligibility for Community Development Revolving Loan Fund grants and low-interest loans.
  • Eligibility for nomination for free NCUA consulting.
  • Ability to accept deposits from non-members.
  • Authorization to obtain supplemental capital.

[READ MORE]

News About Credit Unions

Rates Down, Stay Short: Catalyst

Declining consumer loan rates and narrowing spreads in both 15- and 30-year fixed-rate mortgages mean credit unions should stay short in their funding and focus on quality assets, according to the July monthly Credit Union Rate Survey from Catalyst Strategic Solutions in Plano, Texas.

According to Catalyst’s corresponding July Market Overview and Data Report, the pace of inflation increased in June, both on the producer and consumer levels, but remains well within the acceptable upper limit established by the Federal Reserve.

[READ MORE]

Mission Impossible? The ROI of Social Media

It's not enough to just have a presence on social media platforms. It's like that GEICO commercial: “Everyone knows that.” There has to be a strategic plan, though, and between compliance guidelines, new platforms, revamped algorithms for Facebook–and the list goes on–proving the return on investment in those new channels has remained elusive.

“It's time credit unions used social media with a purpose to produce a revenue stream and valuable ROI.Any CEO, director or member would get very excited about that,” said Deb Schaeffer, business development manager at Chatter Yak!, a marketing CUSO that specializes in social media, website development and branding reports.

Facebook contests using Chatter Yak's Yak! Tracker, a third-party social media contest management application designed to gather statistics, analytics and demographics about entrants, have been the key to success for Oshkosh, Wis.-based CitizensFirst Credit Union. Since January 2013 the $402 million credit union has grown its Facebook fan base by more than 3,900 to 5,813. With that strategic goal met, February 2014 began a focus on generating loan leads, which has so far resulted in closing an additional $498,000 in loans from that channel alone, Schaffer said.

[READ MORE]

Credit Unions Captured More of Auto Loan Market in 1Q2014 Vs. 2013

Credit unions captured 15.3% of the auto loan market in the first three months of 2014 compared to 14.3% in first quarter 2013. Virginia-based credit unions saw their share of auto loans rise 8.7 percent in the first quarter of 2014, compared to 1Q2013.

[READ MORE]

Compliance/Regulatory Affairs News

NCUA Approves Proposed Fixed Asset Rule

The NCUA Board last Thursday approved a proposed rule that would eliminate the 5% cap existing on fixed assets. “An FCU that chooses to exceed the 5% aggregate limit may do so without prior NCUA approval, provided it implements a fixed assets management (FAM) program that demonstrates appropriate pre-acquisition analysis to ensure the FCU can afford any impact on earnings and net worth levels,” said the proposed rule approved at the board’s monthly meeting.

“An FCU’s FAM program is subject to supervisory scrutiny and must provide for close ongoing oversight of fixed assets levels and their effect on the financial performance of the FCU,” the text of the rule also said.

A federal credit union’s board would also be required to establish a written policy that sets a limit on the aggregate amount of the institution’s fixed assets.

[READ MORE]

Governmental Affairs News

Richmond Chapter Reaches VACUPAC Goal

Congratulations to the Richmond Chapter for reaching 101% of its chapter goal under the former VACUPAC schedule. As you may recall, we are doing a transition year in 2014, switching from the old to new goals, and crediting chapters for making one or both of these goals. Richmond has raised $25,488, making it the first chapter this year to reach its milestone.

Thank you everyone in the Richmond chapter for your commitment to credit unions throughout the Commonwealth. This year the chapter wanted to reach a goal more quickly than before, and committed members made that vision a reality. Congratulations and well done!

100 Percent for VACUPAC

Congratulations to BayPort Credit Union, which has 100% participation from board members in the Virginia Credit Union Political Action Committee (VACUPAC) -- all at the pin level (at least $25). The support of credit unions, like BayPort, enables us to support lawmakers in Richmond and Washington who are supportive of credit unions and willing to hear us out on the issues that matter most in our service to our members.

Financial Services/Marketplace News

Credit Scoring Gets a Shake-Up

Financial institutions may start offering more affordable loans to a broader range of Americans because of changes in the way credit scores are calculated. FICO will place less weight on unpaid medical debt and exclude all overdue bills that have been settled with collection agencies, according to news reports.

"The moves follow months of discussions with lenders and the Consumer Financial Protection Bureau aimed at boosting lending without creating more credit risk," the Wall Street Journal reports. People whose credit scores had been damaged by medical debt may get a particularly big boost from the new model. (American Banker Online, Aug. 7)

'Payment Shock' on HELOCs May Be Overblown: TransUnion

Concerns that borrowers could default en masse on home equity lines of credit are overblown, according to a report released Thursday by the credit bureau TransUnion. Though some borrowers will suffer from payment shock when home equity lines reach their end-of-draw-period after 10 years, the risks are isolated, TransUnion found.

Fewer than 20% of home equity lines have an "elevated risk" of default in the next few years. Many borrowers pay interest only on home equity lines and may be unable to absorb a higher payment that includes principal. Still, many financial instituions, credit card and auto lenders have tools to identify which consumers can absorb the higher payments. (American Banker Online, Aug. 7)

Millennials Buying More New Cars than Gen X

Millennials would prefer to text rather than drive, recent studies suggest, but they’re apparently beginning to buy cars in increasing numbers. Gen Y now is generating a larger share of U.S. new vehicle sales than older Gen Xers, according to a survey by J.D. Power and Associates. But both groups still lag well behind Baby Boomers, who continue to be the largest group of car buyers in the U.S.

[READ MORE]

20 Surprising Facts About How Americans Pay for Things

OK, so they're not likely to surprise credit unions, but still, there are a number of interesting factoids in this article.

  • The average yearly spending on a consumer debit card is $10,885.
  • Nearly 9 billion checks were deposited through "image deposits," such as through mobile phones.
  • Just 7 percent of credit cards in force had EMV or "smart chips." That number has grown substantially since 2012, and many experts expect that number to move to 70 percent by the end of 2015.
  • There were 2.5 billion online or mobile bill payments made in 2012. Just 7 percent were done via mobile, either through an app or text message.
  • Americans made 5.8 billion ATM withdrawals, totaling $687 billion.
  • The average ATM withdrawal was $118.

[READ MORE]

Looking For Keys to Membership Diversity

As credit unions approach the 100 million membership milestone, the diversity of credit union membership has never shined brighter. The Credit Union National Association's 2014 National Member and Nonmember survey reveals exactly how diverse that membership is.

"Our national research helps credit unions discover the demographic segments that represent their greatest opportunities and challenges," Jon Haller, CUNA's director of corporate and market research told Credit Union Magazine in a recent article.

Overall, credit union members are an attractive consumer market. Four of 10 have college degrees, compared with 24% of nonmembers. More than half (54%) of members are employed full-time, while only 39% of nonmembers have full-time jobs. And 76% of members are homeowners, compared with 52% of nonmembers.

[READ MORE]

Education & Networking Opportunities

League Payments Workshop Aug. 13

The payments marketplace continues to evolve. Join us Aug. 13 in Richmond at your League’s Payments Workshop for an overview of the legislative, regulatory, legal, and market forces shaping payments.

[LEARN MORE]

League Offers ‘Board Boot Camp’ Aug. 20

The pressure of being a credit union board member is increasing. Your League’s Aug. 20 Board Boot Camp will provide you the tools and resources to help you better understand the expectations of today’s board member.

Sessions will include Board Governance and Liability Issues, Volunteer Recruitment and Development, Internal Fraud, and Understanding Your Credit Union’s Financials.

[LEARN MORE]

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.

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]

News From Credit Unions

ABNB Raises Over $63,000 For CHKD

ABNB is pleased to announce that it has raised over $63,000 to benefit the Children's Hospital of the King's Daughters from the proceeds of its 11th Annual Fishing Fest. Donations continue to come in, so ABNB anticipates the final donation amount being even higher. [READ MORE]

ABNB, Guardian Federal Credit Unions to Partner

ABNB Federal Credit Union and Guardian Federal Credit Union are pleased to announce they will be merging as of Nov. 1, 2014. At a Special Meeting conducted by Guardian Chairman Richard Losea on July 23, Guardian member-owners voted in favor of the merger by an overwhelming margin. Together, these two well-established credit unions will be able to further strengthen their presence in the community. [READ MORE]

ABNB Insurance Agency Principal Wins 2014 Young Professional of the Year

ABNB is proud to announce that Robert N. Grandy, III, principal of ABNB’s insurance agency, Members Assurance Property & Casualty, was honored with the 2014 Young Professional of the Year award by the Professional Insurance Agents Association of Virginia and the District of Columbia (PIAVA/DC). [READ MORE]

Virginia Credit Union Recognized by CIO Magazine

Virginia Credit Union will be honored in the annual CIO100 list in CIO Magazine, published by the International Data Group. Given to organizations for excellence in information technology, the award will be presented to Chris Saneda, the credit union’s senior vice president and chief information officer. [READ MORE]

Chapter News

Tidewater Chapter Hosting 2nd Annual Charity Golf Challenge

Join the Tidewater Chapter Sept. 18 for its 2nd Annual 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.

Cost includes a continental breakfast, cart and greens fees, range balls, and cookout lunch. Shotgun start at 8 a.m. Proceeds will benefit Children’s Miracle Network Hospital. Sponsorships are also available, ranging from $250 to $1,000. Sponsorships open to credit unions and business partners!

Marketing News

FIs Need to Engage Millennials with Mobile Devices: FICO

Banks need to develop effective ways to engage millennials, a growing segment of the population, and the best way to do this is through mobile devices, according to Fair Isaac. FICO released a survey this week that found millennials are less loyal to their primary banks than other consumers.

The survey revealed that millennials are five times more likely than Baby Boomers to close all accounts with their primary bank. Out of the 911 bank customers surveyed by the vendor known as FICO, one-third of millennials cited excessive service fees as the single reason for switching to a new bank. Meanwhile, bad experiences with online and mobile devices made a much worse impression on millennials than on other age groups.

This is because millennials are significantly more likely to transact with their banks through mobile applications. For example, FICO said that 63% of millennials surveyed used their bank's mobile application, while this figure dropped to 54% for Generation X consumers and 36% for baby boomers.

Furthermore, 83% of the survey respondents who use a bank's mobile application at least once a week expressed satisfaction with their financial institution. By comparison, 71% who do not utilize mobile devices to do banking were satisfied with their bank. (American Banker Online, Aug. 4)

Security/Fraud Prevention

NCUA Video Series to Help Credit Unions Prevent Employee Dishonesty, Fraud

In a new series of videos, staff from NCUA’s Office of Small Credit Union Initiatives, in partnership with CUNA Mutual Group, will discuss how credit union managers and volunteers can detect employee dishonesty and deter fraud. Credit union managers and volunteers will also learn how to identify potential clues that are warning signs for fraud.

The first three episodes of the Deterring, Preventing and Detecting Employee Dishonesty series provide an overview of the series and outline the importance of maintaining a policy on employee fraud and conducting surprise cash counts. The three videos are posted on NCUA’s YouTube channel and can be viewed here.

Banking Groups Push for Senate Cybersecurity Vote

The banking industry is stepping up pressure on the Senate to pass a cybersecurity bill this fall that would expand information sharing on cyber threats between private companies and the federal government. The Intelligence Committee approved the measure 12-3 last month in a closed-door vote, but it remains unclear whether the full chamber will take up the Cybersecurity Information Sharing Act this year.

The financial services industry has largely been supportive of the measure, arguing that greater information sharing across different sectors and the government is necessary to fend off future attacks. But the legislation still faces hurdles, especially due to ongoing concerns by privacy advocates over a lack of consumer protections in the bill. (American Banker Online, Aug. 1)

CUs Alert, but Skeptical, After Hackers Find 1.2B Passwords

Credit unions are on alert but also taking a wait-and-see approach following news that a gang of Russian hackers have amassed 1.2 billion sets of user names and passwords.

The biggest risks for CUs are likely to come from spamming and spear phishing, Jeff Johnson, senior vice president of information technology at Baxter Credit Union in Vernon Hills, Ill., and a member of the executive committee for the CUNA Technology Council, said in an interview.

If the hackers have e-mail addresses, "they can start spearphishing our members or our employees to gain even further access," he said. "So that's a point of attack I'd be worried about," Johnson said. Another concern is the hackers' ability to use those e-mail address to send out botnets and using those botnets for malicious purposes, he said. (Credit Union Journal, Aug. 7)

Technology News

New GTE Mobile App Helps Members Save And Pay Down Loans

GTE Financial has a new mobile application that lets members save cash, and with a few taps on their smart phones, apply that money to their credit union mortgage or auto loan. Called Future Change, the app for Android and Apple users rounds up every debit purchase to the next dollar and places the money in a special savings account. With a swipe of a finger, that money can then be directed to pay down a loan's principal balance.

The app addresses a number of objectives, according to GTE.

"It's a debt reduction, savings and financial literacy tool all in one," said Chad Burney, chief information officer and senior vice president of virtual banking, who said that the $1.6 billion credit union is a strong proponent of member financial literacy. "And we expect the program will also drive debit interchange." (Credit Union Journal, Aug. 6)

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