RESOURCES
— CUNA's CPDOnline
CPDOnline is a web-based training service that includes everything you need to manage your credit union training program from start to finish.
— FACT Act Guidelines and Rules on Identity Theft “Red Flags” and Change of Address Discrepancies
— Compliance Frequently Asked Questions - April 2008 Publication
[More]
April 3, 2008
> An award-winning publication of the Virginia Credit Union League.
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CURRENT will be published again on April 17.
In Today’s Edition …
Headline News
Education & Networking Opportunities
Compliance/Regulatory Affairs News
Governmental Affairs News
League News
Chapter News
Financial Literacy News
News From Credit Unions
News About Credit Unions
Consumer/Marketplace News
Security/Fraud Prevention
Competition News
Headline News
Annual Meeting 2008 - See you in Norfolk next week!
Movement Leaders Confirmed for Annual Meeting Event
Your League is bringing together some of the nation’s foremost experts on issues of critical importance to credit unions. Our Annual Meeting business session (April 11) will feature a “State of the Credit Union System” panel discussion with Defense Credit Union Council President/CEO Arty Arteaga, National Association of State Credit Union Supervisors (NASCUS) President/CEO Mary Martha Fortney, CUNA Economist Bill Hampel, Missouri Credit Union Association President/CEO and American Association of Credit Union Leagues Chairman Roshara J. (Rosie) Holub, and National Credit Union Administration (NCUA) Director of Public and Congressional Affairs John McKechnie. Moderator Roger Ball, of Call Federal Credit Union, will elicit our distinguished panelists’ insights and forecasts on such issues as UBIT, the economy, CURIA/CURRA, the regulatory environment, Treasury’s plan to overhaul the financial services system, member service, grassroots political action, and much more!
Legislative Leadership Conference April 12
It’s not just the marketplace that’s deciding the future of our movement. Legislators, and by extension regulators, are playing an increasingly important role in the viability — and survival — of credit unions. Our Legislative Leadership Conference (LLC) (April 12) is your training ground for practical, proven political involvement and grassroots strategies that ensure the “credit union voice” is heard in Richmond and Washington, D.C.
Featured programming includes:
- Grassroots advocacy guru Amy Showalter will discuss how we can grow our grassroots team so that we’ll have more people helping communicate our message and doing so effectively. Whether you are new to grassroots advocacy or a seasoned veteran, you won’t leave this presentation without something you can use to become the most confident and compelling advocate possible on behalf of your credit union.
- It’s always been a dog-eat-dog world on Capitol Hill, but the stakes for credit unions have never been higher. Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan looks at the legislative issues that ought to be on every credit union’s radar and offers expert insight on the likely paths these issues will take.
VACUPAC Golf Tournament Tees Off April 10; Registration Deadline April 4
The 20th Annual VACUPAC Golf Classic will kick off the 2008 Virginia Credit Union League Annual Meeting on April 10, at the beautiful Bide-A-Wee Golf Course in Portsmouth. This tournament benefits the Virginia Credit Union Political Action Committee (VACUPAC), which supports legislative candidates of any party who support credit unions.
> For more information about the tournament, please contact David Deacon at 800.768.3344, ext. 634 or ddeacon@vacul.org.
> For registration and payment information, contact your League’s Cathy Baldwin at 800.768.3344, ext. 615, or cbaldwin@vacul.org
> Online registration is available here. Note: Registration deadline is Friday, April 4!
Special Thanks to Our VACUPAC Golf Tournament Sponsors
Special thanks to the following credit unions and organizations that have “stepped up to the tee box” as VACUPAC golf tournament sponsors:
Tournament Sponsor
FISERV EFT
Beverage Cart Sponsor
Credit Union Service Company of Virginia (CUSCVA)
Virginia Credit Union Services (VACUS)
Lunch Sponsor
Palmetto Cooperative Services
Breakfast Sponsor
NSWC Federal Credit Union
Virginia Credit Union
Prize Sponsor
BayPort Credit Union
Beach Municipal Federal Credit Union
Entrust Federal Credit Union
Hole Sponsor
ABNB Federal Credit Union
Apple Federal Credit Union
BayPort Credit Union
Bellwood Federal Credit Union
Belvoir Federal Credit Union
Bronco Federal Credit Union
Dominion Credit Union
Fairfax County Federal Credit Union
Fort Lee Federal Credit Union
Hampton Roads Chapter
Northern Star Credit Union
Northern Virginia Chapter
Peoples Advantage Federal Credit Union
Piedmont Chapter
Want a Sneak Peek at our Bid$ 4 Kids Silent Auction Items?
Your League’s Community Involvement Committee is hosting the “Bid$ 4 Kids” Silent Auction at this year’s Annual Meeting, and we’re counting on your support! The event takes place Thursday night (April 10) as part of the Annual Meeting Food Fair. You’re welcome to take a sneak peek at the close to 60 items we’ll have on hand. Point your browser here (Note: This pdf is about 5MB, so it may take a few minutes to download on slower Internet connections.)
> Questions can be directed to your League’s Mary Amyx at 800.768.3344, ext. 630 or mamyx@vacul.org. All auction proceeds benefit Children’s Miracle Network!
> Note to those delivering items at the Annual Meeting: The Community Involvement Committee will have a table set up near the Annual Meeting registration area (3rd floor, conference center foyer). Please drop off your items at that location. And thanks for supporting the Community Involvement Committee and Children’s Miracle Network!
Mica: Treasury's Perilous Plan Has Long Road
After reviewing details of the U.S. Treasury's long-term plan to overhaul the nation's financial institution regulatory structure, Credit Union National Association (CUNA) President/CEO Dan Mica remained convinced the plan is perilous for credit unions and consumers. Mica attended Treasury Secretary Henry Paulson's briefing Monday on the agency's regulatory restructuring blueprint. Paulson explained details in the 212-page report and the thinking behind its development. A summary of the report was leaked to the media during the weekend. During Monday's briefing in Washington, Mica explained to Paulson that the Treasury proposal would result in the demise of credit unions as they function today. Paulson rejected that assertion and said "If you read the executive summary, you'll see it is not our intent and that would not be the effect." Mica said the report's language indicates otherwise.
Frank Assures CUs on Treasury Proposal
Credit unions received a welcome message from a key leader in Congress Wednesday regarding the U.S. Treasury Department's proposal for financial institution regulatory restructuring: in a paraphrase, Congress backs credit unions. House Financial Services Committee Chairman Barney Frank (D-Mass.) introduced Credit Union National Association (CUNA) witness Harriet May at Wednesday's hearing on the Internet Gambling law. May is CEO of GECU, El Paso, Tex., and a CUNA board member. Frank then said to May, "Please tell my good friend and former colleague Mr. Mica not to worry about the Treasury proposal to eliminate credit unions. We would never do that. So please tell him not to worry about that."
Write to Treasury In Support of the CU Charter
We want Treasury to know just how damaging its proposal is to credit unions and the dual-chartering system. So, we are asking that all credit union board members and management team staff, members of the League governmental affairs committee, and other key contacts generate letters and e-mails to Treasury Secretary Henry Paulson expressing concern with his “Blueprint for a Modernized Financial Regulatory Structure.”
Hill Covered with CUNA's Treasury Blueprint Letters
As part of comprehensive actions to alert federal policymakers and legislators of concerns about the U.S. Treasury's blueprint for regulatory restructuring, Credit Union National Association (CUNA) President Dan Mica Monday sent a letter to every member of Congress. Mica expressed credit unions' grave concerns regarding the Treasury plan that ultimately would phase out the National Credit Union Administration (NCUA) and place banks and credit unions under one regulator's oversight, as well as merge various charters into a single charter type. "The strategy regarding credit unions reveals Treasury's apparent total disregard for the uniquely democratic and consumer-owned structure of credit unions and the pocket book benefits from better rates and services their consumer/members are provided," Mica said in the letter sent to each House and Senate member. He underscored the fact that credit unions have not contributed to the current housing and credit problems the nation is experiencing. Yet the Treasury proposal, he said, "would eliminate one of the few sectors of the financial services industry that has consistently acted in the best interest of consumers."
Nationwide Press Report Treasury Plan's Impact on CUs, Members
When Credit Union National Association (CUNA) President/CEO Dan Mica asserted to U.S. Treasury Secretary Henry Paulson on Monday that Treasury's reform plan would harm credit unions and more than 90 million Americans, the media were taking notes. Monday and Tuesday's overwhelming press coverage amplified the trade association's objections to the plan and reinforced the point that credit unions look out for the interests of average Americans.
Congressman 'Apprehensive' About Treasury's CU Plan
U.S. Rep. Paul Kanjorski (D-Pa.) raised strong concerns this week about the U.S. Treasury Department's long-term plan to consolidate regulation of credit unions with other financial institutions. "There is a need to put credit unions on a level playing field with other financial institutions in areas like capital standards and business lending," said Kanjorski, who chairs the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee. "But it should not come at the expense of eliminating the current regulatory system, which has worked well and serves the financial needs of more than 90 million Americans."
Treasury Would Take Away 'Hedge Against Unchecked Greed'
The National Association of Credit Union Service Organizations (NACUSO) is concerned that the Treasury Department’s regulatory agency overhaul proposal would not only do away with the credit union model but eliminate the movement’s “greatest hedge against unchecked greed.” Guy Messick, general counsel for NACUSO, pointed out that the Treasury proposal summary states that its goal is to eliminate all distinctions in structure and regulations between banks, thrifts and credit unions to “create a level playing field among all types of depository institutions where competition can take place on an economic basis rather than on the basis of regulatory differences.” “Unless banks are eager to become nonprofit entities, we can all guess that it will be the nonprofit cooperative credit unions that will cease to exist,” Messick said. “The nonprofit cooperative structure permits a financial institution to serve members without the constant quarterly earnings pressure that inhibits banks from innovation and giving back value to the members.” (Credit Union Times, March 31)
Line Items: Separating Long Shots from Layups in Treasury Plan
The Treasury Department plan to revamp financial services regulation is expected to produce some significant changes but fall far short of the massive overhaul Secretary Henry Paulson outlined Monday. In interviews with analysts, academics, regulators, bankers, and other industry representatives, there was widespread agreement that there is likely to be increased oversight of the mortgage market, including nonbank originators and brokers, in the near term. Looking farther ahead, many saw growing momentum for an expansion of the Federal Reserve Board’s powers to handle systemic market risks, a drive to merge the bank and thrift charters, and some limited regulatory consolidation. But few — other than Treasury officials — said there was much chance for more radical changes, including the creation of a single federal prudential regulator, the elimination of the federal credit union charter, and stripping direct bank supervision from the Federal Deposit Insurance Corp. Analysts gave a plan to eliminate the federal credit union charter virtually no chance. The credit union lobby is considered one of the most powerful in Washington, in part because it can mobilize members to contact their representatives directly. The industry’s representatives were already vowing to go to war if necessary. “In a nuclear battle, as many as half of the 90 million credit union members would come to our defense,” said Dan Mica, the president of the Credit Union National Association. “If there is ever a serious threat to shut down credit unions, we will not hesitate to use the nuclear option.” (American Banker Online, April 1)
Bankers Agree on Need for Change, Part on Details
Any proposal as sweeping as the Treasury Department’s plan to revamp the financial services regulatory system stands a high likelihood of drawing sharply mixed reactions and some significant heat. So it was noteworthy how readily many in the industry accepted the idea that the time had come for alterations to the regulatory system. Richard Kovacevich, Wells Fargo & Co.’s chairman, said, “I think directionally there is agreement that we need to make changes for how financial institutions are regulated that would be positive for both the customer’s standpoint, from the risk standpoint, and hopefully keeps us competitive” in “worldwide markets.” Still, though bankers were open to the idea of change in general, some complained about the particulars. Among executives at smaller institutions, enthusiasm ran highest about the idea of added oversight for nonbanks, which has been a sore point for years. Predictably, the closer the proposal hit to home, the more tempered the response, and support was hardest to find for the idea of eliminating the Office of Thrift Supervision — a subject some executives seemed reluctant to comment on at all — or the creation of a new federal charter. Institutions failing to receive the charter would not receive deposit insurance. (American Banker Online, April 1)
Paulson Plan Would Open Charters to All Comers
The Treasury Department's blueprint for revamping financial regulation would allow commercial firms of all stripes to own and operate banks. Where to draw the line between banking and commerce is a perennial debate, and the Bush administration's proposal released Monday would go further than advocates have dared. The blueprint recommends removing any limits on banking charter ownership by retailers and other nonfinancial firms, but it would subject them to tight oversight, including Federal Reserve Board supervision. A depository institution "should be able to affiliate with a broad range of firms, including other federally chartered financial firms and commercial firms," according to the proposal, tucked in the section of the Treasury's report devoted to longer-term reforms. "The history of commercial firms affiliating with insured depository institutions has not supported the view of greater risks present in such structures." The Independent Community Bankers of America has led the fight against mixing banking and commerce in general and repeated attempts by Wal-Mart Stores Inc. to own an industrial loan company in particular. The trade group's president and chief executive, Camden R. Fine, blasted the Bush administration's idea. "The federal regulatory agencies did such a great job of examining Citigroup and Bear Stearns that now the Treasury Department recommends that Wal-Mart and other commercial firms be allowed to own FDIC-insured banks," Mr. Fine said in an interview. "If the taxpayers enjoyed their dollars being put at risk in the Bear Stearns bailout, they will love having their tax dollars at risk with the largest commercial firms in the world." (American Banker Online, April 3)
Education & Networking Opportunities
Spring Compliance Conference May 6-7: Register Now
Two days of essential compliance training are on tap at this year’s Spring Compliance Conference, May 6-7, in Williamsburg. On day one, Mary-Lou Heighes, president of Compliance Plus, Inc., will review the most important regulatory issues for credit unions today, including the new rules and guidelines for Identity Theft Red Flags and Address Discrepancy Procedures and third party vendor due diligence. Tom Winn and Dan Summerlin, of Woods Rogers PLC, will spend day two on an in-depth discussion of Human Resources issues that affect credit unions. Location: Crowne Plaza Williamsburg at Fort Magruder.
[More here]
Teller Workshop Slated for April 15
Enhance the value of your tellers to both your credit union and your members by building and developing their skills. The April 15 Credit Union Teller A-Z Workshop is ideal for both new and experienced tellers, who’ll receive training in the following areas: handling challenging and difficult member situations with calm and professionalism; overcoming member objections to policies, procedures, and/or cross-sales efforts; dealing with negotiable instruments; and recognizing and protecting the credit union and members from forgeries, counterfeiting, scams, and other fraudulent schemes. Location: Sheraton Park South Hotel (Richmond).
[More here]
> Register online here or contact Don Graham at 800.768.3344, ext. 618 or dgraham@vacul.org.
All About Branding: Marketing Workshop Set for April 30
We have all heard that branding is about the logo, colors, print materials and promotions created in the Marketing Department. The truth is that branding is about the members’ experiences with your organization, which involves Member Services, Lending, Accounting and even the Information Systems Department. Come learn how branding is not just a “marketing thing” anymore at the Credit Union Marketing Council of Virginia’s April 30 workshop in Richmond. When: April 30, 10 a.m.—2 p.m. Where: Brandermill Country Club (Midlothian). Cost: $69 per person on or before April 11; $79 per person after April 11. Discount: Just $49 registration for each additional attendee from your credit union!
[More here]
[Register here]
CUNA Offers Training on BSA Issues
The Credit Union National Association (CUNA) is attempting to reach even more credit unions to help them meet the complex compliance requirements under the Bank Secrecy Act (BSA). This year CUNA will conduct two Bank Secrecy Act conferences, one in Washington, D.C., May 18-21, and the other in Atlanta, Ga., Oct. 19-22. CUNA has been designing annual BSA conferences since 2005 to provide credit unions with the most up-to-date information available.
Compliance/Regulatory Affairs News
New RESPA Plan Awaits CU Comments
It has been a long wait, but the Department of Housing and Urban Development (HUD) has issued its revised proposal to amend Real Estate Settlement Procedures Act (RESPA) rules. HUD has been working since the late 1990s on revising its rules implementing the 1974 RESPA law with a view to improving the mortgage process and to lower settlement costs for borrowers. The current proposal supplants one issued in 2002, scrapped by HUD after the Credit Union National Association (CUNA) and others noted that some of the proposed changes could be confusing to consumers and could have the opposite effect of the intended simplification. CUNA seeks credit union comment by May 2 on the on the recently issued proposed RESPA changes. HUD will accept public comment until May 13.
Input Sought on NCUA Reg Review List
The Credit Union National Association (CUNA) is asking credit unions to review their federal regulator's recently published 2008 Regulatory Review List to identify particular operational or compliance problems. Each year, the National Credit Union Administration (NCUA) examines one-third of its regulations as part of this annual review process. The NCUA's Office of General Counsel maintains the schedule that identifies the agency regulations up for review each year. Comments on this year's batch of regulations subject for review are due to the agency by August 1. The rules under scrutiny include: (1) Security Program, Report of Suspected Crimes, Suspicious Transactions, Catastrophic Acts, and Bank Secrecy Act (BSA) Compliance (Part 748); (2) Records Preservation Program and Records Retention Appendix (Part 749); (3) Loans in Areas having Special Flood Hazards (Part 760); and (4) Description of NCUA; Requests for Agency Action (Part 790).
CUNA: Internet Gambling Law's Burdens Need Hill's Action
Credit Union National Association (CUNA) board member Harriet May Wednesday urged Congress to address burdens that would be imposed on credit unions and other financial institutions seeking to comply with the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. The U.S. Treasury Department and Federal Reserve Board were jointly charged under the law with drafting implementing regulations, a task the Fed has publicly called "challenging." The Fed has noted that its challenge is to craft a role for financial institutions without having an adverse effect on the country's payment system. The UIGEA rules have not been finalized. May, testifying before the House Financial Services Committee, reiterated CUNA's concerns that credit unions could be swamped by the compliance burden associated with UIGEA.
Governmental Affairs News
Housing Bill Moves Forward…Without Bankruptcy Provision
After scrambling through the night and into Wednesday, Republican and Democratic senators reached a deal on a housing stimulus bill that would leave out some of the most aggressive measures, including a provision to let bankruptcy judges rework mortgages. Details of the bill were announced late Wednesday, and lawmakers were expected to begin debate on the bill today. Passage of a final package is expected next week. The housing bill would require enhanced mortgage disclosures; authorize $4 billion of block grants to let states buy foreclosed properties; modernize the Federal Housing Administration; and let state and local governments, in conjunction with housing authorities, ease restrictions on tax-exempt mortgage revenue bonds so that borrowers could refinance into cheaper loans. Absent from the deal, however, were more far reaching proposals to give bankruptcy judges the power to rework mortgages and to let the FHA purchase mortgages worth more than the appraised value of a house after a substantial writedown by the lender. (American Banker Online, April 3)
April Edition of The Advocate Now Available
The April 2008 edition of The Advocate – our governmental affairs newsletter – is available online. Topics covered include Treasury’s plan to revamp the financial services regulatory system and updates on chapter fundraising for the Virginia Credit Union Political Action Committee (VACUPAC).
Promote CUs at the Shad Planking April 16
You can help raise awareness of credit unions among politicians at one of Virginia’s premier political events - the annual Shad Planking held by the Ruritan Club in Wakefield. The event traditionally kicks off the Commonwealth’s campaign season. The League will set up a tent at the event and credit unions are encouraged to donate promotional items that we can give away to attendees. We could also use your help at the event to staff the tent and pass out credit union stickers. Contact your League’s Karin Sherbin at 800.768.3344, ext. 626, or ksherbin@vacul.org, to volunteer or to offer items.
Wolf: Financial Woes Must Be Faced
U.S. Rep. Frank R. Wolf (R-VA) thinks the nation had best face its looming financial crisis or else there are going to be huge problems ahead. Wolf said the Cooper-Wolf SAFE Commission Act bill is crucial for the country’s future because it addresses the nation’s financial woes and economic consequences through a bipartisan effort. During his appearance at the Winchester Rotary Club on Thursday, Wolf explained how the bill already had bipartisan support — it was co-sponsored by Democrat Jim Cooper of Tennessee and Wolf, the Republican who is Virginia’s longest serving congressman. He said the goals of the SAFE Commission are to take on the unfunded commitments for future spending, plus the future spending for Social Security and Medicare, which now are an estimated $53 trillion. Wolf said it was crucial to solve these financial woes so that future generations will have the same opportunities as those for current and former adults. (Winchester Star, March 28)
League News
CU Members Get Deep Discount on Kings Dominion Tickets
Your members can take advantage of deep discounts on Paramount’s Kings Dominion tickets on all weekends through May 18. Tickets are just $31.95 (regular admission) or $24.95 (juniors and seniors). View the promotional flyer with ticket ordering information.
Chapter News
Hampton Roads Chapter Meets April 17
Your League’s Kristen Tatlock will discuss the new requirements under the Fair and Accurate Credit Transactions Act regarding Identity Theft Prevention and changes of address and issuance of new debit/credit cards (the so-called ID Theft Red Flags regulations). Compliance is mandatory, regardless of asset size, by Nov. 1, 2008. Location: The Omni Hotel (1000 Omni Boulevard, Newport News). Time: Social begins at 5:30 p.m.; dinner and meeting follow at 6:30 p.m. Deadline for reservations is Friday, April 11.
Richmond Chapter Meets April 22
Workplace violence is a growing problem, and all too often its origins lie in cases of domestic violence. News accounts of tragic events seem to appear on media outlets daily, and businesses must incorporate proper planning to address this issue. Mike Berger, security operations manager with Virginia Credit Union, will offer a presentation on "The Manager’s Response to Domestic Violence” at the Richmond Chapter's April 22 meeting. Location: Brandermill Country Club (3700 Brandermill Parkway, Midlothian, 23112). Time: 7:30 a.m. registration; 8 a.m. welcome & breakfast; and 8:30 a.m. program. To register, contact Chris Burgess at cburgess@baylandsfcu.org or call 804.843.2520, ext. 138. Deadline to register is noon, April 17. When responding, please provide a list of those attending from your credit union.
Tidewater Chapter Workshop Set for April 26
The Tidewater Chapter will hold its annual workshop on April 26, at ABNB Federal Credit Union (830 Greenbrier Circle, Chesapeake). This year’s workshop offers topics that will appeal to both staff and volunteers, including: (1) Unclaimed Property - Melinda Barbish, Virginia Division of Unclaimed Property; (2) Plastic Card Fraud - Allen Trosclair; (3) Disaster Recovery - Betty Myers, National Credit Union Administration (NCUA); (4) Employment Issues - Heather Mullen, Attorney, Kaufman & Canoles; (5) Member Service - Annette Cain; (6) Supervisory Committee Duties - Jo Burkett, National Credit Union Administration (NCUA); (7) Investments 101 - Harry Simmerman, VACORP Federal Credit Union; and (8) BSA Refresher/CTRs/SARs - Mariann Beverly, Virginia League. Registration will start at 8 a.m. Cost of the workshop is $45, which includes lunch. For details, call Kenny Davis (Portsmouth VA City Employees Federal Credit Union) at 757.393.8863, ext. 6260 or e-mail davisk@portsmouthva.gov
Financial Literacy News
Youth Week April 20-26
National Credit Union Youth Week is soon approaching, and credit unions who haven't already registered for the National Youth Saving Challenge can do so on the Credit Union National Association (CUNA) Web site. This year's Youth Week, with the theme of "Got Green? Grow it at Your Credit Union," will take place April 20-26. "Each year National Credit Union Youth Week gives the movement the opportunity to get young members excited about saving money to reach personal financial goals," said Phil Heckman, CUNA director of youth programs. "It's the perfect opportunity to kick start the next generation's savings habit." Credit unions also can sign up for the National Youth Saving Challenge, which is an opportunity for credit unions to invite youth to open new accounts and deposit money. CUNA also will award 10 credit unions $100 each for their youth.
[More here]
> And be sure to let your state and federal lawmakers know what you are doing in providing financial literacy programming!
Entries Sought for League Financial Literacy Awards
Get recognized for your good works in delivering financial education! The Third Annual Virginia Social Responsibility Awards program recognizes all National Youth Involvement Board (NYIB) classroom presenters and will present the following financial literacy-related awards: Financial Literacy Visionary, Youth Advocate of the Year, Education Partner of the Year, and Class Act. The Awards Celebration will be held in Charlottesville on June 18. Deadline for submitting your entries is May 1! [Note: These awards are separate from the Desjardins Youth Financial Education Awards. Desjardins entries will be due Aug. 1, 2008. Details to follow.]
Money Smart Train-the-Trainer Workshops Offered for CUs
Your League is partnering with the FDIC to offer a series of free train-the-trainer seminars on the Money Smart personal finance program. This will prove especially useful for credit union personnel involved in conducting financial literacy programs or those working one-on-one with members in personal finance basics. Four dates are scheduled: April 17 (Richmond), May 7 (Manassas), July 23 (Virginia Beach), and Oct. 1 (Waynesboro). You’re welcome to attend any of the seminars. Each will run from 9 a.m. to approximately 4 p.m. Questions can be directed to Cathy Baldwin at 800.768.3344, ext. 615 or cbaldwin@vacul.org
> View the registration form here. (pdf, 86kb)
News From Credit Unions
Member One FCU Names New President/CEO
Member One Federal Credit Union is pleased to announce the addition of Frank G. Carter as the credit union’s newly appointed President/Chief Executive Officer. “We are excited to have Frank leading our organization. He has a proven track record of performance that matches the aggressive goals we have set for the credit union,” said Wilson Potts Jr., Chairman of the Board. Prior to joining Member One Federal Credit Union, Carter was the Senior Vice President of Grow Financial Federal Credit Union, a $1.8 billion credit union, where he managed several of the operational areas supporting the 18 branch locations serving 182,000
members.
Apple FCU Helping Students Learn Value of Saving
Students and their families at Cameron Elementary School in Falls Church, are able to participate in two savings programs offered by Apple Federal Credit Union. The Johnny Appleseed Junior Ecology Club is designed to create interest in ecology and to encourage students ages 5-12 to save on a regular basis. The other program is a student savings account that allows students to deposit money and earn a higher interest rate than a standard savings account.
DuPont Community CU Security Footage Helps Catch Vandals, Shooters
DuPont Community Credit Union (DCCU) reported acts of vandalism at its Lucy Lane office located at 140 Lucy Lane in Waynesboro on March 27. The vehicle of the vandals, which was an orange 1974 AMC Gremlin, was caught on the credit union’s exterior security cameras. The camera photo helped lead to the arrest of two teens charged with the credit union’s vandalism, firing into an occupied dwelling, and shooting at six vehicles on Interstate 64 near Waynesboro. During the early morning of March 27, while the office was closed, random shots were fired at DCCU. At least four bullets struck the building, a sign, and an unoccupied van. Credit Union officials contacted the Waynesboro Police Department upon discovering evidence in the morning when they opened for business. DCCU conducted business as usual under normal operating hours. No credit union employees or members were injured.
Kensics Joins Belvoir FCU
George Ksenics has joined Belvoir Federal Credit Union as Technologies Services Manager. Most recently he worked as independent consultant working with small- and medium-sized businesses.
News About Credit Unions
February Loan-to-Savings Ratio Drops to 80.7%
With savings growth overpowering loan growth, credit unions' overall loan-to-savings ratio decreased over two percentage points, to 80.7% in February from 83.2% in January, according to the Credit Union National Association (CUNA) monthly sample of credit unions for February 2008. "The drop in the loan-to-savings ratio was due to the month ending on a Friday payday, which boosted share draft accounts by 12.3%," said Steve Rick, CUNA senior economist. "Most of these funds will be used by members for monthly living expenses and therefore leave the credit union."
Kansas FOM Bill Leaves Opening for 'Banker Mischief,' Says Cuevas
The restrictive Kansas field of membership bill—likely to become law within days—presents an array of prickly problems for regulators and their credit unions, but any national spillover from new population thresholds contained in the legislation remains uncertain, a partner for Dollar Associates said Monday. In commenting on the anti-CU Kansas bill drawing national scrutiny, Kirk Cuevas, a lead CU consultant in the Birmingham firm and a former NCUA chief staff counsel, forecast state regulators would be “scratching their heads” in trying to apply rules to accommodate shifting population limits in MSAs in contrast to the federal “well defined community” language. Stressing he was not privy to the legislative process in enacting the Kansas bill now before Gov. Kathleen Sebelius, Cuevas faulted some of the bill’s language as “as a recipe for banker mischief.” In particular, he cited lengthy notice and comment rules for branch and merger applications following along bank regulatory lines. “That could be acrimonious and litigious,” predicted Cuevas. As for the one million population branching thresholds as contained in the Kansas bill, Cuevas said, “I don’t sense any effort at the federal level” to move in that direction and it was unclear whether banking foes might use the Kansas bill as a model in other states to limit CU member and branch expansion. (Credit Union Times, March 31)
CUNA: Banker Stance on Realtors CU Anti-Consumer
The operating principal behind cooperative financial institutions is that people lend to each other for their mutual benefit. To be successful there needs to be members from many financial stratums, the Credit Union National Association (CUNA) said in a recently published letter to the American Banker editor. Bankers "get that" and that is what stands behind their constant push to have credit unions serve only "people of modest means," the CUNA letter said. "(S)ince credit unions have no access to the capital markets, the only way to get the process going and to capitalize the institution is to have some members with money," according to CUNA General Counsel Eric Robert. The CUNA letter was submitted to express credit unions' "grave concern" regarding comments attributed by the newspaper to the head lobbyist for the American Bankers Association. Floyd Stoner was said to have hinted that the bankers association would challenge the application for a new credit union by the real estate agents' association. CUNA's letter responded that credit unions "stand ready to defend the rights of consumers to pool their resources, in a cooperative structure, to form a credit union."
USA Today Headline on Savings Rates: Consider a CU
Consumers looking to generate better savings rates should join a credit union, USA Today Tuesday advised in an article, "Shopping for decent savings rates? You might consider a credit union." The newspaper encouraged consumers looking to join a credit union to contact the Credit Union National Association (CUNA) or use the online credit union locator at www.findacreditunion.com.
Unconventional Branch Design, Building a Sales/Service Culture The Focus of Two New White Papers
Atypical approaches to designing a credit union branch and strategies for building a sales and service culture are the topics of two new white papers from the CUNA Councils. The papers are available online at www.cunacouncils.org; select the “Shared White Papers” link located in the “Shared Council Content” drop-down menu. Select the “OpSS” tab for the branch design paper or the “Marketing & BizDev” tab for the sales and service culture paper. From there, non-members should follow the non-member link to order.
Wegner Award Nominations Due June 17
Do you know anyone deserving of the credit union movement's highest national honors? The National Credit Union Foundation is calling for Wegner Awards nominations two months earlier than in previous years. The deadline for nominations is June 17. We anticipate attendance at the Wegner Awards Dinner will again reach the Grand Hyatt’s seating capacity – so award recipients will be announced two months earlier as well.
Filene Report Connects the Dots on Collaboration
Credit unions must trust each other and collaborate to survive--especially now when they are faced with diminishing margins, increasing expenses, fierce competition and declining memberships, according to a new report by the Filene Research Institute. The report, "Connecting the Dots on Credit Union Collaboration: A Colloquium at the Wharton School of the University of Pennsylvania," summarizes the key findings of a 2007 colloquium of academics, practitioners and consultants. The event was sponsored by Filene in conjunction with the Wharton School of the University of Pennsylvania.
CUs Mull Strategies To Offset Growing Auto Repos
As credit-market stresses move from mortgages and credit cards to auto loans, some members struggling to make their car payments are finding it easier to simply walk into the credit union and drop off their keys. “It’s escalated a bit in the last six months,” said Ed Gallagly, CEO of the $225-million Florida Central Credit Union. “Some members are coming in good faith and asking for voluntary repos saying they can’t make the payment anymore,” he said. Gallagly said that although the credit union doesn’t have an exceptional number of repos on hand, the current number of repossessed vehicles is about twice as much as he would expect in a normal year. Gallagly attributes the rising delinquencies and surge in repos to the economic downturn. Florida Central CU isn’t alone. The percentage of delinquencies on auto loans has followed a four-year increase. At the end of the third quarter of 2007, delinquencies on indirect auto loans hit 2.86%, the highest they’ve been since 1991, according to a report onwww.special-finance.com. Delinquencies on direct auto loans (those that were at least 30 days overdue) were also up in Q3 2007 standing at 1.81% but were slightly lower year over year.
[More here]
[More here, MSNBC – “Auto Sector Feels Pinch of Credit Crunch”]
Consumer/Marketplace News
New Mortgage Applications Fall 29%
Mortgage application volume tumbled 28.7% during the week ending March 28, according to the Mortgage Bankers Association's weekly survey. After a 41.1% jump in volume the previous week, the MBA's application index fell back in line with where it had been the previous three weeks. Refinance volume fell 38.1%, while purchase volume declined 11.8%. Refinance applications accounted for 53.4 % of total applications during the week ending March 28. The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom. An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 688.3 means mortgage application activity is 6.883 times higher than it was when the MBA began tracking the data. The average interest rate for traditional 30-year fixed-rate mortgages increased to 5.75% from 5.74% the previous week. The average rate for 15-year fixed-rate mortgages, often a popular option for refinancing a home, increased to 5.27% from 5.23%. The average interest rate for one-year adjustable-rate mortgages fell to 7% from 7.02%.
Credit Card Debt Increases in States Hit Hard By Housing Market Turmoil
In another sign turmoil in the housing market is seeping into other consumer finance businesses, fourth-quarter credit card debt increased at its steepest rate in several states that have been hit hardest by adjustable-rate mortgage resets, according to a study that TransUnion LLC published Tuesday. Florida led the pack with a 6.84% increase in average debt per cardholder from the third quarter, followed by Nevada, with a 5.98% increase, and California, with a 5.95% increase, the Chicago credit bureau said. Nationwide, the average card's debt rose 4.81%, to $1,694. Alaska had the highest average debt per cardholder, $2,342, while Iowa had the lowest, $1,272. TransUnion attributed state variances to differences in the cost of living and the disproportionate impact of the mortgage crisis. (American Banker Online, April 2)
Consumer Sentiment Points to a Recession
U.S. consumers' confidence fell to a 16-year low in March, pointing to recession, as worries over fading job prospects and rising inflation clouded the outlook, a survey showed on Friday. The Reuters/University of Michigan Surveys of Consumers said its final index of confidence fell to 69.5 in March — its lowest since February 1992, when it was at 68.8 — from the previous month's reading of 70.8. Economists polled by Reuters expected a reading of 70.0. The preliminary report showed the index of confidence at 70.5 in early March. The index of consumer expectations fell to 60.1, its lowest since January 1992, when it was at 59.1. In February this year it was at 62.4. The Reuters/University of Michigan Surveys of Consumers said in a release that "it is now nearly unanimous among consumers that the economy has already entered a recession."
Survey Says Consumers Plan Cutbacks
Discover Financial Services said Wednesday its consumer spending confidence index showed that more consumers are actively planning to cut back on discretionary spending to help make ends meet in a softening U.S. economy.
Hampel to Bloomberg: Home Equity Losses Affect Behavior
The economy slipped into a recession in December, and a big driver of that is the huge losses in home equity over the last couple of years that are impacting U.S. consumer behavior, Bill Hampel, chief economist at the Credit Union National Association, told Bloomberg TV Friday. "There has been a $3 trillion decline in home equity over the past couple of years that is dampening consumer behavior," Hampel said on the "Bloomberg on the Economy" show.
Will Americans Start to Save?
The subprime meltdown may not be all doom-and-gloom for Americans. The current crisis might just push U.S. consumers to once again become savers. It’s no secret that Americans aren’t saving as much as they once did. According to the Department of Commerce, Americans’ personal savings rate as a percentage of disposable income was 0.4 percent in 2007, down 3.2 percent from 1997, and down more than six percent from 1987. For banks, there is a powerful incentive to get consumers to turn that trend around: Boosting core deposits can make up for profits lost in mortgage and credit funds. (American Banker Online, April 2)
Survey: Gens X and Y Admit Savings Shortfall
Members of Generations X and Y, despite saying they know they need to save for retirement and believe they can achieve important financial goals, report that they know more about making their iPods work than they do about making their money work for them (AARP March 19). A report released this month by the American Savings Education Council and the Divided We Fail group (AARP, Business Roundtable, National Federation of Independent Business, and the Service Employees International Union) revealed a disconnect between what young adults know and what they practice. Even though 86% know they should be more prepared for financial emergencies, 40% report that they're more knowledgeable about their iPods than they are about filing taxes (26%), buying a house (21%), investing outside their employer (15%), and saving for retirement (15%). The report, "Preparing for Their Future: A Look at the Financial State of Gen X and Gen Y," indicates that young adults still aren't aligning actions with financial values and goals.
Net Gains: Are All of Your Savings Insured?
Two small banks have failed so far this year, and there are concerns that others could go belly-up as the fallout from the sub-prime mortgage crisis spreads. If you have a large amount of cash parked in your financial institution, you should take note of what happened to 33 account holders when the Federal Deposit Insurance Corporation took control of one of those failed banks, says ABC News. When state regulators shut down Hume Bank, a single-branch institution in Hume, Mo., on March 7, 33 unlikely clients may have lost a total of $1.1 million because their deposits exceeded the bank's coverage by the FDIC. The account owners may still recover part or all of their uninsured funds, but it will be a long process with no guarantees. The episode underscores why it is critical for consumers with deposits of $100,000 or more to understand how federal deposit insurance works, says ABC News.
Bernanke Sees Downturn Risk
Federal Reserve Chairman Ben Bernanke said Wednesday that the U.S. economy could shrink in the first half of the year - the closest that the nation's central bank chief has yet come to proclaiming a recession.
Foreclosures in Virginia Jump 558%
Horror stories abound about home foreclosures and plunging prices in Florida, California and Nevada. Hampton Roads, though sheltered from such shocks to its local economy because of government spending, has encountered its own share of rising foreclosures, notes Inside Business, the business publication covering Greater Hampton Roads. The two cities with the largest number of foreclosures are Norfolk and Virginia Beach. Home foreclosures in Norfolk rose to 200 for the first two months of this year from 46 for the same period in 2007, according to RealtyTrac, a firm that monitors home foreclosures nationally. Home foreclosures in Virginia Beach rose to 324 for the first two months of this year from 64 for the same period in 2007, RealtyTrac reported. Foreclosures in Virginia rose 558 percent, from 1,420 for the two-month period in 2007 to 9,339 for the same period this year. That compares to a 58 percent rise in home foreclosures for the entire country, RealtyTrac reported. (Inside Business, March 31)
Fed Unveils a Web Foreclosure Map
The Federal Reserve Board unveiled an interactive map Tuesday to help community groups, government agencies, and others identify foreclosure hot spots and target aid to those areas. The map, available at www.newyorkfed.org/mortgagemaps, lets users choose from 12 options to get a better sense of the subprime mortgage crisis. Users can view data on adjustable-rate mortgages, loans more than 90 days delinquent or in foreclosure, loans with no or low documentation, and other loan types on a national, state, or neighborhood basis. The Fed plans to update the data in the maps on a monthly basis. (American Banker Online, April 2)
New FICO Score Changes Will Help Lenders But May Further Confuse Members
FICO score calculation changes going into effect later this year are designed to help lenders by providing a clearer picture of an applicant's credit profile. Helping members understand how to improve their FICO Score is a key opportunity for credit unions. In response to recent criticism of their scoring system, Fair Isaac recently announced revised FICO Score calculations designed to eliminate loopholes and ensure the score's relevance in changing financial conditions. Lenders of all sizes today are examining their credit evaluation procedures to better anticipate lending risks and improve their decision-making. For credit unions, the question remains how to evaluate and weigh risk while balancing their goal of helping members in need.
Former Fair Isaac VP Starts Credit Score Education Site
Do you know what your credit score is, but aren't sure how it's calculated? Are you about to get married but don't know how to merge your credit? Andy Jolls, a former executive at Fair Isaac Corp., decided that people needed answers to such frequently asked questions, so he launched VideoCreditScore.com, a site with free instructional videos about credit scores. Jolls spent his four years as a vice president at Fair Isaac leading the myFICO.com credit scoring division. He recently left the business to start this endeavor, working to demystify the very system he helped create.
Second Chance for CUs at Student Loan Carve-Out
Representatives from three of the biggest student lenders among credit unions are scheduled to meet with key lawmakers next week in an effort to claim a place in last year’s carve-out for non-profits from the major cuts in federal student loan subsidies. The representatives from USC Federal Credit Union, University of Wisconsin Credit Union and University (Texas) Federal Credit Union hope to convince Congress to let credit unions replace the growing number of state agencies pulling out of the student loan market among the institutions exempt from the subsidy cuts, according to Michael Kim, head of student lending for USC FCU. (Credit Union Journal, April 3)
Security/Fraud Prevention
Cybersquatters Take Aim at CUs
When you’re talking about Web addresses, asking “What’s in a name?” is a loaded question. When that name ends in .com, .org, or .net, there’s likely to be a big difference. If your business has a Web site and you have never heard of the term “cybersquatters,” a hastily conducted Google search might be in your future.
Cybersquatting is a term used to describe the abusive registration of Internet domain names. In other words, entities exist in the world that buy up domain names that are similar to the Web addresses of actual businesses or products in an effort to divert traffic or force the owners of the original name or product to purchase that domain for a favorable price. Cybersquatters grab on to sites that are spelled the same with the exception of the suffix. So if the site of a legitimate company or product ends in .com, a cybersquatter will buy domains with the same name except they will end in .net, .org and so on. Another method is to leave out one letter or slightly misspell a Web address, so when Internet surfers make common spelling or typing errors, they will come across a cybersquatter’s site. Financial institutions are easy targets since the advent of Internet banking. Credit unions in particular have become the darlings of the cybersquatter industry, according to Andy Keeney and Bob Smartschan, partners at Kaufman and Canoles. “Through hearing from some of our clients, we came to the realization that the credit union industry was really a target,” Smartschan said.
[More here] (This site requires free registration)
New Fraud Schemes: One Targets CU Employees' Keystrokes
The National Credit Union Administration (NCUA) issued alerts to credit unions on fraud schemes, one of which is a new type of phishing scam the regulator said poses "a significant risk" to credit unions. The credit union regulator was notified by the Federal Bureau of Investigations about a new type of information attack, one that targets employees of credit unions. These schemes differ from other types of attacks in that the criminals seek to infect the employees' computers with malicious software secretly recording their keystrokes.
Advanced Auto Parts Notifying Customers Following Data Breach
A network intrusion at Advance Auto Parts has put the credit card, debit card and checking account information of up to 56,000 customers in jeopardy. Data security at 14 stores in Georgia, Ohio, Louisiana, Tennessee, Mississippi, Indiana, Virginia and New York, has been compromised, according to the auto parts retailer. The security breach is now the subject of a criminal investigation by state and federal agencies. The company is also conducting an internal investigation.
[More here]
> The Credit Union Journal is interested in talking to credit unions with members affected by this breach. Contact Lisa Freeman at 888-832-2929 or
lfreeman@cujournal.com.
ID Theft: Thwarted Online, Fraud Goes Low-Tech Again
The payoff from reducing identity-theft crimes through electronic channels has had some surprising twists. A new study from Javelin Strategy & Research found a continuing overall decline in fraud numbers and victims in the U.S., which is no doubt due to multifactor authentication and other fraud-fighting tools at the disposal of online banking customers. But the research found a significant disturbing new trend: More criminal enterprises are shifting toward off-fashioned “vishing” methods and other inexpensive alternatives to catching unwitting consumers off guard. Javelin’s report, which reported the third consecutive year of declining ID-theft-related fraud losses, jibes with a new Federal Trade Commission ID-theft analysis that reports similar figures, even though ID theft remains, at 32 percent, the third most prevalent fraud complaint. Phone and mail-fraud schemes are skyrocketing, as crooks migrate back to traditional offline scams. Vishing—in which fraudsters convince consumers in phone calls that they are bank representatives needing specific personal or account details — in particular, is flourishing. (American Banker Online, April 1)
Competition News
Fed Chief Won't Rule Out More Bear-Like Rescues
Federal Reserve Board Chairman Ben Bernanke strongly defended the central bank's rescue of Bear Stearns Cos. to skeptical lawmakers Wednesday and refused to rule out similar actions in the future. A dozen members of the Joint Economic Committee spent nearly three hours picking apart the Fed's backstopping of Bear, probing why the $29 billion arrangement was designed so quickly and whether it exposed taxpayers to significant risk. Mr. Bernanke insisted that a full-blown collapse of the investment bank would have been a large shock to the broader economy. (American Banker Online, April 3)
Banks to Shed 200,000 Jobs
Analysts at financial research firm Celent say the U.S. banking industry will lose 200,000 jobs during the next 12 to 18 months. The head of Celent's financial consultancy unit says the job cuts will occur as the subprime crisis hits other parts of the banking industry. (CNNMoney, April 1)
Southeast in Decline? Not These Markets
Despite the unrelenting bad news about collapsing real estate values in many markets in the Southeast, community banks can still point to a few cities and regions where real estate lending remains strong. In areas such as Hampton Roads, Va.; Savannah, Ga.; and Nashville, banks of all sizes are adding branches, loan offices, and lenders to meet steady demand for commercial and commercial real estate loans. The $1.9 billion-asset Gateway Financial Holdings Inc. is so bullish on the Hampton Roads area, for example, that it has roughly doubled its staff of lenders there in the last year and just last week announced that it has chosen Virginia Beach as the home for its corporate headquarters. Bankers are quick to say the robust markets are not immune to economic downturns, though they have shown a resiliency that they attribute to their diverse economies, geography, and, in some cases, picturesque locales that are tourist magnets. And unlike a number of areas in the Southeast, from Northern Virginia to Greater Atlanta to South Florida, that have backlogs of unsold homes, the real estate markets in these places did not overheat in the first place. Bankers say that their biggest challenge in these markets has been gathering enough low-cost deposits to meet the loan demand. (American Banker Online, April 2)
