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]
May 1, 2008
> An award-winning publication of the Virginia Credit Union League.
> Your comments and submissions are always welcomed. E-mail pr@vacul.org.
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In Today’s Edition …
Headline News
Education & Networking Opportunities
Compliance/Regulatory Affairs
Governmental Affairs News
League News
Chapter News
Marketing News
Financial Literacy News
News From Credit Unions
News About Credit Unions
Consumer/Marketplace News
Competition News
Headline News
Fight's Not Over for CU Reg Relief
The Credit Union National Association (CUNA) said Tuesday that the fight on Capitol Hill for credit unions and their members will continue, despite banker attempts to derail the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) this week. "This is not over. We will continue to push for passage of CURRA," CUNA President/CEO Dan Mica said Tuesday. CUNA's lobbying team was on Capitol Hill early Tuesday morning after learning that a much-anticipated action on CURRA was pulled from the day's House voting schedule. CURRA's non-controversial status changed when the bankers disregarded House leadership wishes and objected to the credit union bill. House leaders had planned to pair the credit union measure with a regulatory relief bill for banks. "From our perspective, the bankers thumbed their noses at House and committee leadership by violating an agreement for each of our industries to get relatively modest regulatory relief legislation now and work on broader elements later," Mica said, adding that he had talked to the bill's key sponsors, Reps. Paul Kanjorski (D-Penn.) and Ed Royce (R-Calif.). They are determined to bring CURRA back to the House floor for a vote as soon as possible either on suspension or under regular order," Mica said. He noted that in coming days, CUNA will be holding private discussions with the two congressmen, as well as with Chairman Barney Frank (D-Mass.) of the House Financial Services Committee, to assess strategy and options.
League Asks CUs to Continue Pushing for CURIA Co-Sponsorships
“I want to personally thank our credit unions for rallying the troops this week to contact Virginia’s Congressional delegation in support of CURRA,” said League President Rick Pillow. “Obviously, we’re disappointed in the House leadership’s decision to pull the bill, but we’ll continue to soldier on in support of our credit union legislation. Specifically, we’re asking credit unions to continue e-mailing, calling and faxing Virginia’s lawmakers to encourage them to co-sponsor CURIA (H.R. 1537) and CURRA (H.R. 5519).” Use the My Credit Union Is Me Web site to e-mail your lawmaker (http://www.mycuisme.com), or click here for contact information for our Congressional delegation’s Washington and district offices.
Lawmakers Feared Being Caught Between CUs, Banks on CURRA Vote
Congressional staff members said privately this week that lawmakers pulled CURRA (H.R. 5519) from consideration so they would not be forced to choose between credit unions and banks. House Financial Services Committee Chairman Barney Frank said Tuesday that he has been focusing on fixing the foreclosure mess and had not realized the credit union bill would spark such controversy. He said he had raised the issue Monday with House Majority Leader Steny Hoyer, D-Md., who "decided to hold it off based on our conversation." At an Independent Community Bankers of America conference, Rep. Frank said he would tweak the credit union bill and push for separate measures that would provide relief to banks and thrifts. "I overestimated my ability to kind of work things out," the Massachusetts Democrat said. "I believe we'll probably be able to have a compromise that will make no one either wildly happy nor furious, which in my business is probably pretty good." Rep. Frank said he was unsure whether the credit union bill would be considered in committee or worked out behind the scenes before going to the full House. He promised to push for bank reforms next year, including letting them offer interest on business checking accounts and providing relief from anti-laundering filings. (American Banker Online, April 30)
Damage from Suffolk Tornado Exceeds $20 Million
A community shaken by a massive twister began to right itself Tuesday as weary, displaced residents were allowed to return to their battered neighborhoods and city and state leaders began to tally the damage. Fire Chief Mark Outlaw called it a blessing that no one was killed in Suffolk, where the largest of the state's six confirmed tornadoes struck Monday afternoon. The twister, a category EF-3 with winds reaching about 160 mph, cut a northeast swath of destruction through the 430-square-mile city. The cost of the damage rose throughout the day as city workers examined hundreds of homes. By 5 p.m., inspectors had surveyed 342 properties, and the city released a total damage estimate - thus far - at $20.1 million.
[MORE HERE]
CUs Weather Severe Storms, Tornadoes
We’re pleased to report that none of our Suffolk-area credit unions are reporting significant storm-related damages. Suffolk City Employees Federal Credit Union, Prime Care Credit Union, Portsmouth Virginia City Employees Federal Credit Union, ABNB Federal Credit Union, Bronco Federal Credit Union and BayPort Credit Union reported no major issues with operations in the wake of the storms. Some, of course, were hearing stories of the toll taken on members. Our Colonial Heights shared service center (located in Wal-Mart) also escaped the storm unscathed, suffering only a power outage. News coverage showed video of overturned cars in the Wal-Mart parking lot, but fortunately no serious injuries were reported.
LFCU Matches Donations for Suffolk Tornado Relief
Langley Federal Credit Union is matching contributions up to $10,000 in its newly created Tornado Relief Fund. Monetary donations are currently being accepted at all LFCU branches to aid victims affected by the recent tornado impacting the Suffolk community. Members and non-members may visit any LFCU branch to make contributions by cash or check throughout the month of May. Checks should be made payable to LFCU, reference Suffolk Tornado Relief Fund. All contributions will be donated to the Suffolk Chapter of the American Red Cross.
[MORE HERE]
> Langley branch locations available here.
Chartway Pledges to Relax Loan Decisioning Criteria for Tornado Victims
In an effort to help southeastern Virginia communities affected by the recent tornadoes, Chartway Federal Credit Union will be more flexible than ever for loan applicants affected by the storms that hit the region Monday afternoon. “We understand that cash flow is imperative for victims at a time like this, and sometimes federal funding just doesn’t come fast enough,” says Chartway President and CEO Ron Burniske.
Community Involvement Committee Launches ‘Fly The Flag’ Fundraiser
***Deadline May 2***
The League Community Involvement Committee is asking credit unions to participate in our Fly The Flag campaign to raise funds for Children’s Miracle Network. From June 7 through July 7, credit unions are asked to sell 4-inch by 6-inch stick flags and 4-inch by 6-inch American flag magnets as a charitable fundraiser. You can order these items directly from your League for $1 each for the stick flags or $3 each for the magnets. It’s a great way to raise funds for the Children’s Miracle Network hospitals in the Commonwealth, to show your patriotism, and to “decorate” your lobby for Flag Day (June 14) and Independence Day (July 4)! Orders must be placed by May 2 to guarantee timely delivery.
[MORE HERE]
Education & Networking Opportunities
How to Coach Your Employees
The role of manager/supervisor is one of the most challenging in the credit union movement. Your time and attention can be pulled in many directions, including member service, staffing and personnel issues, and operational decision-making. Join us May 13 for “Coaching Credit Union Employees For Peak Performance,” a unique program designed to help you improve your coaching abilities and boost your confidence. Location: Sheraton Park South (9901 Midlothian Turnpike, Richmond).
[MORE HERE]
[REGISTER HERE]
Creating a Member-Focused Sales/Service Culture
To fulfill our mission and to take our credit union’s service from average to “Wow!” we must be fast, accurate and friendly. We must also identify the member’s financial needs and learn how to effectively suggest how we can improve their financial life. Learn what it takes to put your credit union on the fast track to a true sales culture – one that’s driven by motivated employees, focused on service, and capable of producing a long-term bottom line impact. Date and Time: May 14; 9 a.m. until 4 p.m. Location: Sheraton Park South (Richmond).
[MORE HERE]
[REGISTER HERE]
REAL Solutions Training June 24
Your League and the National Credit Union Foundation have teamed together to offer a day of training on the Foundation’s signature project – REAL Solutions. REAL Solutions is about migrating low-wealth households toward economic empowerment. Our one-day training workshop will teach you about market-proven products you can offer that represent a real alternative to payday loans or check-cashing services, for example. You’ll also hear from credit union professionals who’ll share their story on serving emerging markets like immigrants and young adults. Date: June 24. Location: DoubleTree Hotel (Richmond Airport). Time: 10 a.m. until 3 p.m. Cost: $45.
[MORE HERE]
[REGISTER HERE]
4th Annual Financial Literacy Boot Camp June 19
Whether you are a “freshman” in financial education or a veteran, this year’s “Financial Literacy Boot Camp...and Beyond” has something valuable for you! The morning’s intensive Poverty Simulation shows your staff the barriers that people of modest means face each day. In the afternoon, attend the breakout session that suits your needs: reaching out to Latino communities, running a successful student branch, teaching Financial Literacy SOLs, or Financial Literacy 101 - a guide to getting started in financial education. Date: June 19. Location: DoubleTree Hotel (Charlottesville). Time: 8:30 p.m.-4:30 p.m. Cost: $89.
[MORE HERE (including registration form)]
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. Three training dates remain: 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)
Regional Marketing Workshop Sept. 24-25 in Roanoke
Marketing and business development pros must puzzle together many different tools – events, public relations/communications, technology, and sponsorships - to help build membership and create loyal members. Join your fellow credit union marketers from across the region in Roanoke Sept. 24 and 25, as we put the pieces together to strengthen our credit unions’ marketing efforts. The Credit Union Marketing Council of Virginia – in partnership with the Virginia League, North Carolina League and the North Carolina Marketing Council – will sponsor this two-day regional marketing conference at the Hotel Roanoke, featuring nationally-known speakers and tons of networking opportunities. Registration is now open!
> View the information flyer here. (pdf, 270kb)
CUNA Mutual Discovery Conference June 18-21
CUNA Mutual Group’s 2008 Discovery Conference will be held June 18-21, in Hollywood, Fla., at the Westin Diplomat Resort and Spa. Discovery 2008 offers more than 45 learning sessions, keynote presentations by Marcus Buckingham and Peter Sheahan and an abundance of networking opportunities. For complete information on Discovery Conference, accommodations, and to register, go to www.cunamutual.com/save. Direct questions to Linda Nesheim (linda.nesheim@cunamutual.com), 800-356-2644, ext. 8892, or Paula Shaw (paula.shaw@cunamutual.com) ext. 7505.
Southeast Directors Conference July 13-16
Join us as Mississippi hosts the 2008 Southeastern Regional Directors Conference for your opportunity to shine a light on the information you need to lead your credit union and member-owners to bright futures. The conference will be held July 13-16, at the beautiful Beau Rivage Resort in Biloxi, Mississippi. The event will feature informative educational sessions that will help directors better understand disaster planning, the regulatory environment, the political environment, and how the economy affects credit unions. In addition, directors can develop their own professional skills as well as their ability to lead credit unions with sessions on negotiations, the changing role of credit union boards and directors, the secrets of service professionalism, and more.
[MORE HERE]
Card Payments Conference June 8-11
Join us at the Card Payments ’08 Conference -- “Navigating for Success” -- hosted by Fiserv EFT and Fiserv Credit Processing Services. Visit www.2008cardpayments.com for more details and to register. This is one conference you can't afford to miss! Hosted at Disney’s spectacular Grand Floridian Resort & Spa, June 8–11, this promises to be Fiserv’s most beneficial annual conference ever, offering the following training and education:
· Discover credit and debit best practices that positively impact your card programs and improve your bottom line.
· Increase member retention and profits by launching a rewards program.
· Reduce risk for your institution by understanding emerging regulatory issues.
· Understand how bill payment can help retain customers and increase wallet share.
· Satisfy members with Prepaid cards -- without the huge investment.
· Learn about emerging technologies in the U.S. Payments market.
· Mitigate risk for both debit and credit programs.
Serving The Underserved/Latino CU Conference June 11-14
The 34th Annual Conference on Serving the Underserved and 5th Latino Credit Union Conference will be held jointly June 11-14 at the Westin City Center in Dallas, Texas. The conference is being sponsored by the National Federation of Community Development Credit Unions and the Network of Latino Credit Unions and Professionals. Program features include presentations by top-level federal officials, innovative credit unions, researchers, and more – as well as an awards luncheon celebrating the unsung heroes of the credit union movement. Bring your board of directors, senior management and volunteers.
[MORE HERE] (pdf, 550kb)
NYIB Conference Registration Now Open
The 2008 National Youth Involvement Board (NYIB) Annual Conference details and registration are available on the NYIB Web site (www.nyib.org). The conference is set for Caesar's Palace in Las Vegas, July 28-31. Access the conference details by clicking on "About the Conference" or by clicking on the link in the homepage welcome message.
WOCCU Launches Second Hispanic Marketing Immersion Program
Looking for a way to increase membership growth by reaching an emerging, but underserved market? World Council of Credit Unions has opened registration for its 2008 Hispanic Marketing Immersion Program, which offers credit union staff and executives the opportunity to become fully immersed in Mexico's rich culture while working within Mexican credit unions and exploring their marketing strategies. The 2008 Immersion program commences Sept. 20. Participants can choose either a one- or two-week session priced at $1,600 and $2,600, respectively. To register online, visit www.woccu.org/events/hmip. For print versions of the registration form, please contact Josh Fetting at jfetting@woccu.org or 608.395.2060.
Compliance/Regulatory Affairs
CUNA: Tips on Third-Party Due Diligence
The Credit Union National Association (CUNA) is offering a May 13 audio conference to help credit unions with issues surrounding one of federal examiners' key 2008 priorities--due diligence requirements for third party vendor relationships. The National Credit Union Administration (NCUA) has noted it will direct examiners to look at credit union efforts to assess, monitor, and manage risks associated with outsourced services at all stages of the relationship. Also upcoming, credit union professionals will be able to get answers to their pressing compliance questions during a May 29 "Pressing CU Compliance Issues" audio conference. The second audio session will address some of the most popular hot-topic compliance issues, as determined by comments received from credit unions. Participants may help build the agenda by e-mailing their questions to cucomply@cuna.coop before the conference.
[MORE HERE]
Governmental Affairs News
Dodd Introduces Credit Card Bill
Senate Banking Committee Chairman Chris Dodd unveiled sweeping credit card reform Wednesday that would cut off several common card practices. The bill would ban universal default, double-cycle billing, and charging interest on fees. It would also force issuers to apply payments to balances with higher interest rates first and to give 45 days' notice before rate increases. The bill comes just ahead of a proposal from the Federal Reserve Board and the Office of Thrift Supervision that would define unfair and deceptive card practices. The plan is due Friday. That proposal is expected to touch on many of the same issues, including forbidding issuers from increasing interest rates on existing debt for reasons unrelated to the cardholder's behavior on that account. Sen. Dodd's bill has the support of consumer groups but is opposed by the banking industry. It also faces long odds in the Senate, where two Banking Committee Democrats, Sens. Tom Carper of Delaware and Tim Johnson of South Dakota — states with prominent credit card issuers — are unlikely to support restrictive legislation. (American Banker Online, April 30)
Democrats Say Fed Card Rule Is Insufficient
Democrats pushing for credit card reform seized on early reports about the Federal Reserve Board's rule defining unfair and deceptive credit card practices to trumpet their legislation as stronger. Rep. Carolyn Maloney, the House Financial Services Committee's financial institutions chairwoman and Sen. Robert Menendez, a Senate Banking Committee member each issued statements Tuesday touting their respective legislative endeavors. “I'm pleased the Fed seems to have taken a page from my bill, The Credit Cardholders' Bill of Rights, and proposed curtailing abusive practices like retroactive repricing, double-cycle billing, and unfair payment allocation. But these abuses have been going on for years while the regulators - whose job it is to supervise the credit card industry — have done absolutely nothing. In fact, it seems the Fed has only been prodded to act because legislation to correct industry abuses is gaining support in Congress," said Rep. Maloney in a press release. (American Banker Online, April 30)
Let Lawmakers Know About Your Service to Military
May is Military Appreciation Month. Does your credit union do something special to aid military personnel and their families? Many of you do, so let your state and federal lawmakers know, and write your local paper. Need help? Contact Karin Sherbin at ksherbin@vacul.org.
Republicans Fail to Kill Frank's Foreclosure Bill
Republicans launched an-all-but-certain-to-lose fight last week to stop a foreclosure rescue bill during its first round of debate in the House Financial Services Committee. The bill sponsored by Committee Chairman Barney Frank would give borrowers on the cusp of foreclosure a break on their mortgage debt at the expense of lenders and investors, but the government would guarantee the rest of the loan through the Federal Housing Administration. Rep. Spencer Bachus, the panel's No. 1 Republican, who suffered criticism from his party's leadership after co-sponsoring a mortgage underwriting bill by Rep. Frank last fall, led his party's charge against the FHA refinancing proposal with a Republican substitute amendment. The amendment, which mostly regroups reforms that have already cleared the House, failed 34 to 23. (American Banker Online, April 25)
Rep. Akin Becomes 149th Co-sponsor of CURIA
The ranks of supporters of the Credit Union Regulatory Improvements Act (H.R. 1537, CURIA) grew Thursday when Rep. Todd Akin (R-Mo.) became the measure’s 149th co-sponsor. Akin, a fourth-term member from suburban St. Louis and a senior member of the Small Business Committee has long been a backer of credit unions. (Credit Union Times, April 28)
CUs Need Hill Action to Help Ease Credit Crunch
A Credit Union National Association (CUNA) witness testifying Wednesday on the effect of the credit crunch on small business access to capital said credit unions stand ready to support small businesses with more capital, but Congress needs to remove arbitrary legislative barriers. CUNA witness Carl Sorgatz, testifying before a House Small Business subcommittee, said that despite the apparent "credit crunch" with respect to small business and other lending, the chief obstacle for credit union business lending is not the availability of capital. "Credit unions are in general very well capitalized. Rather, the chief obstacle for credit unions is the arbitrary statutory lending limits imposed by Congress in 1998 and the burdens associated with many of the SBA (Small Business Administration) lending programs," he told the subcommittee on finance and tax. Sorgatz is president of Hawthorne Credit Union, Naperville, Ill.
[MORE HERE]
League News
3rd Annual Social Responsibility Awards Banquet June 18
A must for every credit union, this prestigious event recognizes winners of Virginia’s Desjardins Youth Financial Education Award, Dora Maxwell Social Responsibility Award, the Louise Herring Philosophy in Action award, all NYIB Classroom Presenters, the Financial Literacy Visionary Award, the Youth Advocate of the Year Award, Class Act Award, Education Partner of the Year, and more! Awards will be presented by League President Rick Pillow. Space is limited, so register early! Date: June 18. Location: DoubleTree Hotel, Charlottesville. Time: 6:30 p.m. Cost is $39 per person.
[MORE HERE]
Special Olympics Seeks Volunteers for June 6-7 Event
It’s that time again - Special Olympics Summer Games! Summer Games is the largest competition of the year featuring more than 1,200 athletes with mental disabilities from across Virginia. The Special Olympics Summer Games will be held June 6 and 7 at the University of Richmond, and you can help support these very special athletes by volunteering your time. Here is a listing of volunteer opportunities:
- Opening Ceremonies: Escorting athletes to the ceremony. (Friday evening – June 6)
- Track events: Track timers; buddies for the athletes; huggers and high-fivers (give athletes hugs, high fives and encouragement when crossing the finish line!)
- Softball, swimming, tennis, bowling and power lifting: buddies for the athletes; huggers and high fivers; all around helpers with sports events.
- Olympic town: pass out popcorn, sodas, snow cones, T-shirts, buttons and awards to the athletes.
- Closing Ceremonies: all around helpers assisting with the closing dance/party celebration (Saturday evening – June 7).
Friends and family are welcome to volunteer as well! Volunteers will need to be 18 years or older. If you are interested in volunteering, please complete the volunteer form and return it to Alianne Bauer (Virginia Credit Union) at alianne.bauer@vacu.org by Wednesday, May 14. Contact Alianne if you have questions!
> Download the volunteer form here.
Chapter News
Hampton Roads Chapter to Host May 15 Scholarship Night
The Hampton Roads Chapter will recognize its scholarship winners at its May 15 meeting, so please make plans now to attend. Location: Point Plaza Suites and Conference Hotel (Newport News). Time: 5:30 p.m. social; 6:30 p.m. dinner and meeting. Deadline for reservations is May 9.
[MORE HERE]
Marketing News
Aggressive Marketing, Shared Branching Key to Survival
It's an urging that has resonated within the system for quite some time: "marketing like mad men" and building strong shared branching alliances are the keys to credit union survival, Peter Duffy, associate director of Sandler O'Neill & Partners, told National Association of Credit Union Service Organizations (NACUSO) conference attendees this week. Sharing data on the credit unions with more than $100 million in assets, Duffy said net interest margin data showed members absolutely want the best rates, branches, ATM and "the correct answer the first time" from credit union employees. "With the exception of business loans, the balance sheet of banks and credit unions is a commodity," Duffy said. "So the question is how do you differentiate in a commodity business?" In 1993, 56% of credit unions' business came from regular shares and drafts, he said. Today, it's 44%. It costs credit unions 72 cents to 79 cents to produce one dollar a revenue today. For banks, it's 62 cents to 69 cents, Duffy pointed out. Indirect lending has not turned into long-term growth for some credit unions, Duffy said. As a result, credit unions are relying more on fee income. In 1998, credit unions generated 7.75% in fee income. In 2007, that increased to 13.3%. Banks went from 7.37% to 5.01% for the same period. "Be ravenous pigs for [to grow revenue] but not on the backs of members and market like mad men," Duffy advised. (Credit Union Times, April 29)
Financial Literacy News
League Updating Financial Literacy Directory; Your Information Needed!
Here’s your golden opportunity to get credit for your good works in the financial education arena. We are in the process of updating The Credit Union Financial Literacy Resources Directory - a vital part of your League’s Financial Education display, which exhibits to thousands of people at conferences and workshops across the Commonwealth. We need you to participate by providing us with basic information on your financial education initiatives. Once you do, you’ll get your very own directory page as a way to tell the world about your good works. Send an e-mail to your League’s Dawn Lindley at dlindley@vacul.org and ask for an electronic copy of the directory template. The template is a Microsoft Word document that you simply open to enter your information. When you have completed the page, e-mail it back to Dawn with an attached photo. It’s that easy!
> The directory also promises to be an important tool for educating lawmakers about our efforts, as well. But to be truly effective, we need you to participate!
[MORE HERE]
New Fin-Lit Resources on cunapfi.org
Does financial literacy education really work? What's on the minds and in the wallets of Generations X and Y? What advice do you have for the President's council of financial literacy mavens? These are some of the reasons to visit cunapfi.org, CUNA's financial literacy resource center. "We hope that financial literacy advocates throughout the credit union movement will use cunapfi.org as a jumping-off point for their efforts to help people of all ages and economic means make better use of their income and build wealth," says Mark Condon, senior vice president of CUNA's Research & Advisory Services.
[MORE HERE]
News From Credit Unions
Bronco FCU Announces Scholarship Winners
Bronco Federal Credit Union awarded six scholarships to seniors in the Class of 2008. The scholarship winners have demonstrated excellent community involvement and extracurricular participation, as well as strong academics throughout their high school careers.
[MORE HERE]
Apple FCU Breaks Ground on 12th Branch in Fairfax County
Apple Federal Credit Union broke ground March 18, on a Kingstowne location that will provide the organization’s full range of financial products and services. The branch will open in late 2008.
[MORE HERE]
Belvoir FCU Donates Food to Community Group
Belvoir Federal Credit Union employees donated 306 pounds of food items to Action in Community Through Service (ACTS), on April 22. Belvoir Federal employees collected the food as part of a team-building exercise at their quarterly training session. ACTS is a community organization whose mission is to alleviate hunger, homelessness, and domestic violence in the Prince William area.
[MORE HERE]
Belvoir FCU Supports Elizabeth Hartwell Eagle Festival
Belvoir Federal Credit Union supported the Elizabeth Hartwell Eagle Festival held on April 19, at Mason Neck. The park’s Eagle Festival celebrates the life of Elizabeth Hartwell’s efforts to preserve the bald eagle habitat at Mason Neck.
[MORE HERE]
Belvoir FCU Supports 5th Annual Pump and Run 5K
Belvoir Federal Credit Union supported the 5th Annual Pump and Run 5K held at Fort Belvoir Army Post on April 19. All competitors were required to bench press according to their body weight and finish a 5K race.
[MORE HERE]
NCUA Approves Large Merger
The National Credit Union Administration (NCUA) has approved the following merger: CommonWealth One Federal Credit Union ($229 million in assets) and City of Alexandria Employees Credit Union ($27 million in assets). The merger is awaiting the approval of the Virginia Bureau of Financial Institutions.
News About Credit Unions
Report: CUs Keeping Key Presence in Auto Loan Market
Credit unions' performance in the auto lending marketplace mirrored the performance of banks and other financial institutions in 2007, according to CU Direct Corp. (CUDL). The annual report, which highlights key credit union auto lending trends and statistics during the course of the previous year, indicated that credit unions maintained a significant market presence in 2007. Of all auto loans originated last year, 16.9% were through credit unions--down slightly from 18.0% in 2006, according to the report. Likewise, banks' market share declined to 32.6% in 2007 from 34.2% in 2006.
[MORE HERE]
[REPORT AVAILABLE HERE]
Investment in Community is the Best Investment
A credit union that has posted a robust 3.05% ROA in 2008 said it isn’t any one thing that has driven its success, it’s been a series of investments in its community. Ray Boss, CEO of Midland Community Credit Union in Texas, told Credit Union Journal’s Grow Show that in his two years at MCCU the credit union has invested significantly in getting its name out in its community, including partnerships with other local groups. Its focus has been on events tied to young families, while not turning its back on other groups. The strategy appears to be working, according to Boss. Membership growth in 2007 was 18.6%, and at the same time it has reduced the average age of members from 48 to 42. (Credit Union Journal, April 29)
CU Journal’s Grow Show: Return to Members is Key
A credit union that has added 100,000 members and more than $2 billion in assets over the past 18 months can boast strong financials, but chasing ROA isn’t one of its objectives. Gary Oakland, president/CEO of Seattle-based BECU, told Credit Union Journal’s Grow Show that it attributes its growth to a different three-letter acronym, RTM, for Return to Member. In 2003, BECU calculated it returned $166 in value per member. In 2007, that figure had risen to $300. Oakland said the credit union is projecting by the end of 2008, it will return $365 to members. “That translated into an accumulated value of $210 million that our members save by having their finances at BECU rather than another financial institution,” said Oakland. “That’s money that stays in the community and is really one of the differences we represent as a credit union.” Oakland made clear BECU stresses value to members, but it does not try to be all things to all people. “It finally occurred to us that who we are is how we operate, and we cannot be everything to everyone.” (Credit Union Journal, May 1)
Wall Street Journal, Other National Media Tout CUs
The Wall Street Journal, MarketWatch and Dow Jones News Service are among the national media piling on to recommend consumers check credit unions for better deals. Credit Union National Association (CUNA) chief economist Bill Hampel and California Credit Union League economist Daniel Penrod were quoted extensively in an article carried by the Journal and MarketWatch on Sunday and by Dow Jones on Monday. "When it comes to low fees and generous rates, credit unions match banks head-to-head," it said, noting that credit unions' products " should be among the options you consider when searching for savings and checking accounts, certificates of deposit, small-business, mortgage and auto loans, and credit cards--particularly now, given that credit unions in large part sidestepped the subprime crisis."
[MORE HERE]
CUs Lead Large Banks on Best Debit-Fraud Measures
Credit unions and community banks are leading large banks in terms of lowering debit card fraud losses, according to a study for ATM/debit network PULSE. Best-in-class debit card issuers achieved more than 55% lower fraud losses per gross dollar value than other debit card issuers in the debit card study, which was conducted by Oliver Wyman for PULSE, the network owned by Discover Financial Services.
[MORE HERE]
Payday Lending Alternatives, Top Loan Programs Subjects on White Papers
Credit unions can learn how to develop a payday lending alternative program and about the 2007 Excellence in Lending Award winners in two new white papers from the CUNA Lending Council. "Payday Lending: The Credit Union Way" guides credit unions through the process of developing a payday-alternative loan program. "Building on the Basics: 2007 Excellence in Lending Awards Recognize Results and Innovation" describes the consumer lending, mortgage lending, and lending to members of low-to-modest means programs of five credit unions. The papers are available online at www.cunacouncils.org; select the "Cross-Council White Papers" link located in the "Tools and Resources" drop-down menu and select the "Lending" tab.
Treasury Blueprint Still Has Long, Long Way to Go
National Credit Union Administration (NCUA) Senior Policy Advisor Gary Kohn had a bit of advice for those concerned about the future of credit unions under the Department of Treasury's Blueprint proposal: "don't lose any sleep over it." Kohn discussed some of the highlights of the proposal that includes a provision eliminating all charters, including the credit union model. "In order to get something like this done, there needs to be strong leadership from the president and Congress," Kohn said. "Don't lose sleep on this. Constantly let Congress know how you feel." (Credit Union Times, April 30)
Membership Growth Task Force Seeks Survey Participation
The Credit Union National Association's (CUNA) Membership Growth Task Force has announced that its online survey designed for credit unions to share experiences related to their membership-growth efforts can now be accessed. The short survey is on CUNA's Web site at http://advice.cuna.org/surveys/growthbestpractice.htm "The information provided by respondents will be analyzed and reported, and credit unions interested in sharing their membership-growth best practices and creative approaches may be featured in upcoming issues of News Now," said Jon Haller, CUNA's director of market and corporate research.
Consumer/Marketplace News
Hampel: Rate Drop May Be Last—Unless Economy Worsens
Credit unions may expect that Wednesday's 25-basis point drop in the target for the fed funds rate will be the last rate cut, pending no other economic downturns, says Bill Hampel, chief economist with the Credit Union National Association (CUNA). In a widely anticipated move, the Federal Reserve's Open Market Committee lowered the target for the federal funds rate, at which banks borrow from each other, by 25 basis points to 2%. That's the lowest rate since late 2004. The Fed also lowered the discount rate, at which banks borrow from the Fed, by 25 basis points to 2.25%. What does this mean for credit unions? "We continue to expect strong savings inflows and modest loan growth the rest of the year," Hampel said. "The fact that short-term interest rates have fallen below longer-term rates will provide a little bottom-line relief, but probably not enough to counter increases in loan losses at most credit unions," he added.
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Bair's New Idea: U.S. as Direct Lender
Federal Deposit Insurance Corp. Chairman Sheila Bair offered a new proposal Wednesday to let the Treasury Department lend directly to borrowers to save more than 1 million homes from foreclosure. Her plan, unveiled in a media campaign, caught many off-guard and did not appear to have been widely circulated on Capitol Hill or previously vetted with the Bush administration. Lawmakers and the White House are in the midst of negotiating a different plan for the Federal Housing Administration to insure loans worth more than the value of a home, and some saw Ms. Bair's gambit as muddying the waters. But they also hesitated to dismiss the idea out of hand, saying she is held in high esteem by Democrats and that her early warnings about the mortgage crisis presaged many of the government responses to date. (American Banker Online, May 1)
Economy Continues to Sputter
The nation's economy continued its sluggish growth in the first quarter, according to a government report Tuesday that showed a slightly better-than-expected gain in economic activity. The gross domestic product, the broad measure of the nation's economic activity, rose at an annual rate of 0.6% in the first three months of the year, when adjusted for inflation. That matched the rise achieved in the fourth quarter as well as the year-earlier period. Economists surveyed by Briefing.com had forecast growth would slow to a 0.5% gain in the most recent quarter. There has been growing belief among many economists that the economy has fallen into a recession, either late last year or during the course of the first quarter, as employers cut 232,000 jobs and consumers pulled back on spending in the face of higher prices.
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Consumer Confidence Drops in April on Inflation, Job Worries
Soaring gas prices and weaker job prospects made Americans gloomier about the economy in April, sending a widely watched measure of consumer sentiment to a five-year low, a private research group said Tuesday. The New York-based Conference Board said that its Consumer Confidence Index, which had plummeted in March, fell again to 62.3 in April, down from the revised 65.9 last month and 76.4 in February.
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Consumer Spending Up in March, But Likely Owed to Higher Costs
Consumer spending jumped in March, even as income grew at a slower pace, according to a government report released Thursday. The Commerce Department said personal spending by individuals in current dollars rose 0.4% in March, exceeding the 0.2% increase expected by economists surveyed by Briefing.com. February's gain was 0.1%. In inflation-adjusted dollars, personal income remained flat from the prior month. Personal spending, in inflation-adjusted dollars, was up only 0.1%, indicating that the jump in consumer spending was primarily driven by higher costs.
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USA TODAY Survey: We're in Recession, Economists Say
The U.S. economy is in recession, or soon to be in one, according to USA TODAY's quarterly survey of leading economists. Two-thirds of the 52 economists polled said the U.S. economy is in recession. Add those who believe the economy will be in recession soon, and 79% believe that the economy will contract at some point in 2008. The good news: The recession will be short and shallow, and inflation will abate, say the 52 economists surveyed.
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Foreclosures Spike 112% - No End in Sight
Foreclosure filings in the first three months of 2008 rose more than 112% over last year, according to a study released Tuesday. Real estate information firm RealtyTrac reported that nearly 650,000 foreclosure filings - which include notices of default, auction sales and bank repossessions - were issued in the first quarter. That represents 1 of every 194 households and marks a 23% increase from the last quarter of 2007. So far this year 156,463 families have lost their homes to repossessions. "Foreclosure activity hasn't slowed down yet," said Rick Sharga, spokesman for RealtyTrac. "But I was a little surprised that foreclosure filings more than doubled since last year." Foreclosures increased in 46 states and in 90 of the nation's 100 largest metro areas.
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Mortgage Applications Drop to 2008 Low
Applications for home mortgages slumped last week to their lowest since December in another sign the housing market is far from recovery, according to data reported by an industry group Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity dropped 11.1% to 567.0 in the week ended April 25, lowest since the week ending Dec. 28. The MBA's index of applications for loan refinancings fell 16.7% to 1,905.2. The gauge of loan requests for home purchases decreased 4.8% to 340.1.
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Vacant Homes for Sale Hit a Record High
The percentage of vacant homes for sale in the United States set a new record high in the first quarter of this year, the government said Monday. The Census Bureau report shows that shows that 2.9% of U.S. homes -- excluding rental properties -- were vacant and up for sale, compared with 2.8% in the fourth quarter of 2007. It was the highest quarterly number in records going back to 1956.
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Report Highlights the Recession, State by State
A report released Friday by the National Conference of State Legislatures shows a pattern of declining tax revenue in many states that threatens state provided services. The housing downturn means less revenue will be reaped in coming months, as consumers react to high gas and food prices by pulling back on housing related purchases like appliances and furniture, exacerbating the problem. (Credit Union Times, April 28)
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Paulson to Lenders: Fix Has to Come from You
Treasury Secretary Henry Paulson met in private with top lenders and servicers last week to warn them the housing market is continuing to deteriorate and press them for a new solution, several sources said Thursday. During the 90-minute meeting, Mr. Paulson urged lenders to come up with a plan to help so-called "underwater" borrowers, who owe more on their mortgages than the value of their home. "His goal was to prod us and figure out what was coming next and whether there was anything Treasury could do to help the situation," said one participant, who spoke on condition of anonymity. (American Banker Online, April 25)
On Balance, Many See Fed Efforts Taking Hold
The Federal Reserve Board began reaching into a reinvented bag of tricks in early December with the goal of nudging edgy markets back to normal. Over the last two weeks signs have finally emerged that the central bank has made progress toward its primary goal, and generated some significant side benefits, including coaxing new sources of bank capital off the sidelines. "They prevented the market from having a complete meltdown … and you have to give them credit for that," said Adam Schneider, credit crisis leader at Deloitte Consulting LLP. "And you notice all the capital infusions since then? Investors are spending money, and that's exactly what the Fed wanted to happen." Though the interbank funding market remains "clumsy," as one expert put it, spreads are shrinking, trading volumes are rising, and more investors are showing a willingness to take risks. "The Fed's moves did work. They took pressure off the market in a particularly bad moment and they convinced everyone that everything is OK," said Christopher Whalen, managing director of Lord, Whalen LLC's Institutional Risk Analytics. Of course, no one is sure the calm will last. (American Banker Online, April 30)
Rebates Might be Too Little, Too Late
Tax rebates are starting to arrive in bank accounts. But many economists doubt that they will keep the economy from recession. The stimulus package, passed with overwhelming bipartisan support earlier this year, will give rebates to about 130 million Americans, costing the U.S. Treasury more than $110 billion. Married taxpayers earning $150,000 or less will get up to $1,200 while single taxpayers earning $75,000 will receive up to $600. But since the measure passed Congress, there have been growing signs that the U.S. economy has already fallen into recession. "This is will not avert a recession, because it is too late," said Lakshman Achuthan, the managing director of the Economic Cycle Research Institute.
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Treasury Launches Plan for 'Unbanked'
The U.S. Treasury Department Tuesday launched an initiative to improve financial education efforts and increase access to credit union and bank accounts for Americans "currently outside of the financial mainstream." The Community Financial Access Pilot will provide low- and moderate-income people in selected communities with needed access to financial services. No Virginia communities are participating in the pilot program.
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Credit Card Rates Hustle Higher
Even as the Federal Reserve has cut interest rates, financial institutions have sharply raised rates for credit card customers — even those who pay on time — as they grapple with losses from other bad consumer loans. This month, Washington Mutual told some credit card customers that it was raising their rates by as much as 100%. Discover is lifting its penalty rate to 31%, effective May 1, and may apply that maximum to consumers who exceed their credit limit twice in a rolling 12 months. Bank of America (BAC) raised rates for some customers in March — triple, in some cases, though spokeswoman Betty Riess says, "It would be very rare."
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Survey Finds Most Satisfied with Financial Institution
A survey released Wednesday and sponsored by the American Society for Quality, a Milwaukee nonprofit, found that U.S. financial institutions are scoring well in customer service, even though more than a quarter of participants reported an account problem in the past year. The online survey of more than 1,000 adult “bank” customers, conducted in late March by Harris Interactive Inc. of Rochester, N.Y., found that 96% of the respondents rated the customer service at their bank "above average." And 85% said they were at least "satisfied" with the products and services offered by their bank. The survey, the first by the American Society for Quality on financial institutions, found that 27% of the participants had experienced a problem with their account in the past year. Of those, 68% said they were satisfied with how their bank addressed the issue. (American Banker Online, May 1)
Competition News
Wachovia Pays Price for Targeting the Elderly
Wachovia Bank has settled with the Office of the Comptroller of the Currency over allegations that it allowed telemarketers to take advantage of its elderly customers, agreeing to pay a total of $144 million to end the case. The bank will settle $125 million in claims, put nearly $9 million into consumer education programs and pay a fine of $10 million, yet maintains that it did no wrongdoing and the penalties will not affect its bottom line. (Credit Union Times, April 28)
