News Now Archive

Published on January 8, 2013.

NEW: CUNA says CU difference must show in CFPB rulemaking

WASHINGTON (UPDATED: 3:15 P.M. ET, 1/8/13)--The Consumer Financial Protection Bureau (CFPB) should bring its awareness of the credit union difference into play as it develops any new rules, the Credit Union National Association (CUNA) urged in a letter to agency director Richard Cordray today.

CUNA President/CEO Bill Cheney wrote that credit unions do not always expect to be exempt from new regulations. However, he added, "There are a number of factors unique to credit unions that support liberal use of the CFPB's exemption authorities for our members, and we urge the agency to be as proactive as possible in considering how those authorities should be applied.

"We urge the agency to help direct its appreciation of the way credit unions operate into meaningful regulatory relief for credit unions so that they can do even more to serve their communities," he added.

CUNA also urged the bureau to focus more attention in 2013 on regulating entities in the financial marketplace that engage in abusive practices, such as payday lenders, that have been unregulated or under-regulated to date.

The call for a honed approach to regulation comes just before the CFPB is expected to release final versions of several mortgage regulations required under the Dodd-Frank Wall Street Reform Act.

The CUNA CEO said credit unions are most concerned about:

Cheney highlighted CUNA's advocacy efforts, which include supporting a delayed compliance date of up to 18 months, or 24 months in some cases, for new mortgage regulations. CUNA also has urged the CFPB to provide coordinated and achievable compliance dates with as much time as possible for institutions to reprogram systems and deal with the operational challenges the new mortgage rules will present, he noted.
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Exam survey sparks big response of CUs' stories

WASHINGTON (1/8/13)--More than 1,100 credit union representatives have responded to the Credit Union National Association's (CUNA) examination survey, illustrating the importance of the issues being addressed. However, there is still time for more voices to be heard as the Jan. 15 deadline approaches.

The survey gives credit unions a chance to detail their experiences with on-site regulatory examinations and discuss how satisfied they are with National Credit Union Administration (NCUA) and state examiner performance, and the results of those exams. Credit unions can also describe the strengths and weaknesses of their state and federal regulatory examination experiences.

"The strong response is no surprise," CUNA Senior Economist Mike Schenk said Monday. "We know there are issues out there. We are confident that the survey results will assist us in working with NCUA and state regulators to improve the exam process for credit unions."

Schenk said CUNA is eager to start working through the responses and "doing what it can to support credit unions from a regulatory advocacy standpoint." Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and credit union leagues. (See related story: A closer look: CUNA 2013 goal is a better regulatory environment)

Survey replies are confidential, and identifying information from individual credit union respondents will not be seen by individuals outside of CUNA's Market Research Department. Only summary results will be reported.

The exam survey has been sent to all CUNA-affiliated credit unions except those in NCUA Region II, whose league already executed a similar poll.

CUNA members may use the resource link below to access the exam survey.

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A closer look: CUNA 2013 goal is a better regulatory environment

WASHINGTON (1/8/13)--"Credit unions need and deserve significant regulatory relief," Credit Union National Association (CUNA) President/CEO Bill Cheney emphacizes when talking about CUNA's goals for the year.  "That is why CUNA's 2013 regulatory advocacy initiatives and efforts will concentrate on improving the examination process, minimizing restrictions and maximizing flexibility for credit unions."

Cheney added that CUNA will continue efforts to coordinate with the state credit union leagues and CUNA Councils on regulatory advocacy issues and that CUNA will challenge regulatory burden on the legislative front as well.
 
On the regulatory side, CUNA, working closely with the New Jersey Credit Union League, developed a survey asking credit unions to describe the strengths and weaknesses of their state and federal regulatory examination experiences. The deadline for responses is Jan. 15. (CUNA members can use the resource link below to access the survey.)
 
In encouraging credit unions to participate, CUNA has said the survey results will provide a good picture of the current state of the exam process and help shape CUNA's discussions with the National Credit Union Administration (NCUA) and state supervisory authorities. (See related story: Exam survey sparks big response of CUS' stories.)
 
In addition to exam issues, CUNA's 2013 regulatory advocacy, including with the NCUA and the Consumer Financial Protection Bureau (CFPB), will be focusing on:

When regulators take positive actions that facilitate the ability of credit unions to serve their members, CUNA will ensure credit unions are aware of those steps. Likewise, when there are concerns about a rule or other agency actions, CUNA will continue to identify those concerns to its credit union members and work with members to address them.

Also throughout the year, CUNA will be encouraging the NCUA and other regulators to utilize industry-based working groups to address regulatory issues and determine if a new rule is even needed or how it could be tailored to achieve the best results for credit unions and regulators alike. In 2012, the NCUA successfully used that approach when it formed a working group to allow credit unions to restructure a member's loan under the Troubled Debt Restructuring rule, a move CUNA strongly supported.

CUNA will also continue to address concerns about the NCUA budget and its process, specifically cost containment and accountability. In 2012, CUNA urged the agency to do more to make its resource allocation decisions transparent and to increase accountability to credit unions regarding its budget decisions. NCUA has established a new webpage with information about the agency's budget that previously was not available.

Use the resource link below for more from CUNA's regulatory advocacy department.

Last week, CUNA's Cheney identified the top priorities that will drive CUNA's action agenda in 2013: Protecting credit unions, easing their regulatory burden, and helping them prepare for the future.

News Now is featuring an in-depth look at each area of CUNA's 2013 priorities. This article is the second in that series. The first unveiled CUNA's legislative priorities.


Use the resource links below to read more about CUNA's 2013 action agenda and legislative priorities.

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CUNA to address CFPB mortgage field hearing as rules unfold

WASHINGTON (1/8/13)--The spotlight is set to shine this week on much-anticipated Consumer Financial Protection Bureau (CFPB) mortgage rule changes and the Credit Union National Association (CUNA) announced Monday that SECU of Maryland President/CEO Rod Staatz will testify on behalf of CUNA and credit unions at the CFPB Jan. 10 mortgage-policy field hearing in Baltimore, Md.

Also, CUNA anticipates that the bureau will release a number of its mortgage rule changes Wednesday, just ahead of that session.

Over the last two years, the Federal Reserve and the CFPB have issued a series of proposals to implement rule changes dictated by the 2010 Dodd-Frank Wall Street Reform Act. The regulators are now pushing up against a Jan. 21 deadline for adopting some of the final rules.

The reforms issues include:

New escrow disclosure and waiver requirements are also expected to be finalized by the CFPB early this year. A final version of integrated Truth in Lending Act/Real Estate Settlement and Procedures Act disclosures, and accompanying rules, should be finalized by mid-2013.

CUNA continues to meet with the CFPB and urge improvements in all of these proposals and will keep credit unions posted as the new rules are issued, Dunn said.

For more on the CFPB hearings, use the resource link.
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NAFCU's Becker to retire; Berger named successor

ARLINGTON, Va. (1/8/13)--After 13 years at the head of the National Association of Federal Credit Union (NAFCU), Fred Becker has decided to retire effective July 31, 2013.

The NAFCU board of directors has named Dan Berger, NAFCU executive vice president of government affairs, to succeed Becker as president/CEO.

Berger joined NAFCU in January 2006 as senior vice president of government affairs. Three-and-a-half years later he was named executive vice president and in that post has managed five divisions.  Prior to joining NAFCU, Berger was vice president of government relations for America's Community Bankers and, before that, chief of staff for U.S. Representative Katherine Harris.

Credit Union National Association President/CEO Bill Cheney, hearing Becker's news, said Monday, "When I served as a member of the NAFCU board, I worked with Fred on a variety of issues. Congratulations to him on his service to the credit union movement; I wish him well in his future endeavors. I also look forward to working with Dan when he assumes his new role."

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CFPB credit access reg gets CUNA support, with tweaks

WASHINGTON (1/8/13)--The Credit Union National Association (CUNA) supports a Consumer Financial Protection Bureau (CFPB) plan to address credit-access issues, but suggested some simple tweaks in a comment letter to improve the regulatory change.

For purposes of Regulation Z's ability-to-pay requirement, the CFPB proposal would allow credit card applicants who are 21 years of age or older to list funds of a spouse or partner to which the applicant has access. The proposal would change portions of Regulation Z that have in some cases limited the ability of stay-at-home spouses to secure new lines of credit.

CUNA in the comment letter suggested the agency clarify how credit unions and other credit card issuers will apply this revised standard once implemented.

The CFPB as it develops a final version of the proposal should also clarify that credit card issuers have sole discretion in determining:

Further, the CFPB should provide supplemental guidance in regard to factors an issuer may choose to consider in determining "reasonable expectation of access," CUNA said.

The proposal applies to all applicants regardless of marital status, and the Bureau expects that it will ease access to credit particularly for stay-at-home spouses or partners who have access to a working spouse or partner's income.

For the full CUNA comment letter, use the resource link.
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Tiny Milwaukee CU closed by regulator

ALEXANDRIA, Va. (1/8/13)--New Covenant Missionary Baptist Church CU, a Milwaukee, Wis., credit union with a tiny membership of 294, has been liquidated by the National Credit Union Administration (NCUA). The credit union held $585,000 in assets.

The NCUA Monday reported that the Wisconsin Office of Credit Unions moved to close the credit union after it determined New Covenant was in an unsafe and unsound condition to transact its business and had no prospect of restoring viable operations. The NCUA was then appointed as liquidating agent.

The credit union was chartered in 1982 and served members of the New Covenant Missionary Baptist Church and related groups.

This was the first liquidation of a federally chartered credit union in 2013. There were 13 federally insured credit union liquidations in 2012.

For the full NCUA release, use the resource link.

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New Congress, same issues early on

WASHINGTON (1/8/13)--After last week's swearing in ceremonies, members of the 113th U.S. Congress are preparing to take up many of the same tense issues faced by the last session.

Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan said the mood on Capitol Hill during last week's swearing-in ceremonies seemed upbeat despite looming fights over such things as the country's debt ceiling and tax laws.

For now, Congress is out of session.  But federal lawmakers are scheduled to return before the inauguration of President Barack Obama on Jan. 21.

After that, Congress will hold organizational meetings for its myriad committees. The first regular meetings of those committees will likely take place in early February.

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Regs, consumer protection are topics of NCUA/CFPB webinar

WASHINGTON (1/8/13)--The changing environment for financial regulation and consumer protection issue will be addressed during a Feb. 5 National Credit Union Administration (NCUA)/Consumer Financial Protection Bureau (CFPB) webinar.

NCUA Chairman Debbie Matz, who will host the free webinar, said the event will give credit unions a unique opportunity to ask questions directly to CFPB Director Richard Cordray.
The town hall is scheduled to begin at 3 p.m. ET.

The webinar agenda includes discussion of new developments in financial regulation, including CFPB's recently finalized regulations, proposed rules, and enforcement efforts, an agency release said.

The NCUA is accepting questions ahead of the webinar. Questions can be submitted to WebinarQuestions@ncua.gov. The agency asks that participants use "NCUA-CFPB Town Hall" in the subject line of their submitted questions.

To register for the webinar, use the resource link.

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Inside Washington

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CUs' true advantage--trust--will win new members--CUNA's Gentile

WASHINGTON (1/8/13)--Credit unions should tap into their true advantage--trust--rather than their fee and rate advantages to woo new members during 2013, says the Credit Union National Association (CUNA) in an editorial in CU Insight.
 
"For too long the credit union system has hung its hat on its rate and fee advantage over banks," wrote Paul Gentile, CUNA's executive vice president of strategic communications and engagement. "While being competitive is always important, we need to promote our true advantage--trust," he said.
 
"As nonprofit financial cooperatives that exist solely to serve the lending and savings needs of consumers, credit unions' value proposition is trust. Whether we are in booming economic times or a recession, credit unions operate the same way. We learned that during the most recent recession. While banks reined in their lending, credit union lending expanded."
 
Many leaders say consumers "don't care about anything but the best deal they can get," he wrote. "In this low-rate environment, that has probably never been less true. Credit unions are the best deal more often than not, but in today's era of corporate mistrust we should think bigger than that. Reputation matters. Credit unions everywhere should be talking about their cooperative history and with that our value proposition of trust will shine through."
 
The credit union system's core mission is advancing financial literacy/education. "I have witnessed first hand how credit unions can win over people in their community, not just members, by offering financial education sessions on everything from retirement to financing college," he wrote. "We are already deep into the trust game and should be sure consumers are aware of it."
 
CUNA has already established a channel to get the credit union message out: aSmarterChoice.org--"a landing pad for consumers and press alike to learn about all the great things credit unions do for members, and all the reasons credit unions are 'trusted' financial providers."
 
Gentile encouraged credit unions to visit the site, read stories that colleagues contribute and find a story they can contribute."Together, we can build aSmarterChoice into a comprehensive repository of 'trust' stories that will help us win consumers over."
 
To read the full article, check out aSmarterChoice, or review News Now stories about surveys where credit unions' reputation stood out during 2012, use the links.

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November membership growth is best in 15 years

MADISON, Wis. (1/8/13)--Credit union membership grew 0.2% in November to a record 96.12 million, according to the Credit Union National Association's (CUNA's) Monthly Credit Union Estimates. That's a 2.5% annualized growth rate--the best in a decade and a half. 
 
"You would have to go back 15 years to find comparable membership growth," said Mike Schenk, vice president of CUNA's economics and statistics, during CUNA's press call Monday morning.  "Consumers are continuing to vote with their feet," he said.
 
November added 140,000 memberships, up from the 95.98 million memberships recorded in October by CUNA's monthly report. Credit unions reported phenomenal growth in 2011, with a boost from Bank Transfer Day, but that growth has continued, indicating that consumers trust credit unions with their financial business.
 
Other notable numbers reported in the estimates included:

In 2013, credit unions can expect faster loan growth and savings growth of about 5% to 5.5% each, said Schenk.
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Wash. Post: Shiloh of Alexandria FCU lives the CU difference

ALEXANDRIA, Va. (1/8/13)--Shiloh of Alexandria FCU was cited in a Sunday Washington Post article as an example of a trusted financial institution serving a small community in an age dominated by too-big-to-fail debates and Capitol Hill reforms.
 
Small credit unions are often "lost in the shuffle," in the age of large financial institutions said Bill Cheney, president/CEO of the Credit Union National Association, told the Post. Banking regulations don't take into account the interests of smaller financial institutions, Cheney said.
 
The 20-year-old, $2.4 million assets credit union, based in Alexandria, Va., is run by volunteers and serves Shiloh Baptist Church of Alexandria, one of the country's oldest African American churches.
 
It provided more than $700,000 in loans, during 2012 according to the National Credit Union Administration.
 
The credit union's mission is to combat predatory lending and to promote wealth-building, the John DuPree, the credit union's manager, told the Post.
 
DuPree gathers with the credit union's president and vice president to review loan applications each Wednesday night. Most applications are to consolidate and pay off other debts, such as payday loans with prohibitively high interest rates.
 
The credit union also helps members meet their financial goals, such as purchasing a car or making home repairs, DuPree said.
 
The credit union is open on Saturday and Sunday morning. Many members do their banking when they attend church on Sunday.

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Author of White House 9/11 account to speak at CUNA ACUC

MADISON, Wis. (1/8/13)--The author of a book about developments in the White House during the terrorist attacks on Sept. 11, 2001 will keynote a session of the Credit Union National Association's (CUNA) 2013 America's Credit Union Conference (ACUC) this summer.
 
Retired White House Military Officer Lt. Col. Robert Darling will speak at the Sunday June 30 session.  CUNA's ACUC will take place June 30-July 3 at the Hilton New York in New York City.
 
"We hear from attendees that ACUC is their conference choice to get energized and equipped with big ideas," said Jill Tomalin, senior vice president of association services at CUNA. "Lt. Col. Darling is sure to evoke action with his unique insights and inspiring experiences."
 
Lt. Col. Darling chronicled developments during the attack in his book, 24 Hours Inside the President's Bunker, 9/11/01: The White House, a minute-by-minute account of that day's events.
 
As a presidential pilot with Marine Helicopter Squadron One, he was handpicked in 2000 to work for the White House Military Office, Airlift Operations Department. He was in this position during the Sept. 11 attack and supported the president, vice president and national security adviser in the underground President's Emergency Operations Center, where he witnessed unprecedented events and decision making.
 
He retired from the U.S. Marine Corps in 2007 after more than 20 years of active duty. Earlier in his career he piloted attack helicopters in Desert Shield and Desert Storm.
 
Today Darling is president of the Military Officers Association of America Heritage Chapter in Quantico, Va., and vice president for business development for Zenetex, an information technology service management company in Herndon, Va.
 
For more information, use the links.

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NCUF April Financial Education campaign in the works

MADISON, Wis. (1/8/13)--The National Credit Union Foundation (NCUF) will roll out a new initiative this spring to help credit unions nationwide draw attention to their financial education activities and the importance of financial education.
 
"Supporting financial education is essential to the success of not only the credit union movement, but our country as well," Christopher Morris, NCUF director of communications, told News Now. "We hope this campaign allows even more consumers to achieve financial freedom."
 
Last April, NCUF and the Texas Credit Union Foundation (TCUF) piloted "Credit Unions Support Financial Education: Leading the Way to Financial Freedom" in partnership with other state credit union foundations. It aimed to raise awareness of financial education and raise funds for NCUF and state foundations.
 
"The results were encouraging and now this year--after some retooling--we are inviting everyone to participate," Morris explained.
 
The State Credit Union Foundation Network encouraged NCUF to broaden the campaign for next year. NCUF is inviting state and member credit unions to participate in the next campaign taking place in April, which is also National Financial Literacy Month.
 
NCUF hopes the leagues will help promote the campaign to their credit unions.
 
"We're hoping the credit unions can be creative," Morris said.
 
To join the initiative, credit unions must commit to raising funds among staff and members through one or both of these activities:

The campaign will kick off April 3, a dedicated day for credit unions and their members to become financially fit. Credit union staff also can encourage members to support financial education with a monetary contribution. Credit unions can become financially fit by participating in several FUNdraising activities during the month.
 
Additional FUNdraising ideas are included in a toolkit at financialeducation.coop, the website created for the initiative. The site includes optional pledge forms and campaign resources such as sample newsletter articles, sticker and wall pin-up templates, a sample flyer and statement stuffer, Web buttons, and more to come, said NCUF.
 
For more information, use the link.
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Kansas CUs end 3Q with higher than average growth

WICHITA, Kan. (1/8/13)--Total outstanding loan balances at Kansas credit unions increased 6.5% in September from the same time a year earlier, according to the Kansas Credit Union Association (KCUA).
 
Kansas credit unions posted higher than average growth rates and exceeded national credit union rates in both loans and share draft balances in the third quarter, KCUA said.
 
Used auto loans, the largest component of the loan portfolio, increased 7.4% from September 2011. New auto loans increased 8.6%, compared with a 5.8% increase at credit unions nationwide. The overall auto loan portfolio in Kansas increased 7.6% over the past year to $1.9 billion.
 
The average member relationship rose to $12,100, a 5.5% increase. The increase is an indication that Kansas credit unions are gaining a higher share of wallet among their members, said Janeeen Smalley, KCUA vice president of member and strategic services. "I think it's clear that more consumers are seeing credit unions as their primary financial institution," Smalley added.
 
Other highlights cited by the KCUA:

"In difficult financial times, it's important the financial institutions have a financial safety net," Smalley said. "That said, Kansas credit unions are poised to put their capital to use in a way that will serve the best interests of their members."
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CU System briefs

 
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Market News

MADISON, Wis. (1/8/13)

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News of the Competition

MADISON, Wis. (1/8/13)

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Better than a resolution: Set financial goals

NEW YORK (1/8/13)--Do you want to whip your finances into shape in 2013? Skip the vague, overwhelming New Year's resolution and set realistic short-term goals instead.
 
The top seven financial resolutions include starting an emergency fund, ditching expensive bank fees, saving for retirement, paying off debt, developing a budget, fixing credit, and talking with family about money (ABCNews.com Jan. 1). However, University of Scranton research suggests that only 8% of consumers actually achieve their New Year's resolutions (Forbes Jan. 1). 
 
Resolutions are easily abandoned--one misstep and your resolve is shot. But setting simple, specific annual goals, and keeping them front and center throughout the year, may be the ticket to success.
 
These actions can help you stay on track:

Bottom line: Don't attempt an extreme makeover in a short time. Set small, attainable goals throughout the year. Come December, instead of failed resolutions you'll see tangible results.
 
For more information, read "Credit counselors say resolutions not right for everyone" in the Home & Family Finance Resource Center.
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CU*Answers completes Dashboard Deep Dive

GRAND RAPIDS, Mich. (1/8/13)--Grand Rapids, Mich.-based credit union service organization CU*Answers will hold its final Dashboard Deep Dive session today.
 
The company has held three sessions of its weekly initiative hosted by CU*Answers CEO Randy Karnes and other experts focused on helping credit union's use the company's flagship core data processing system, CU*BASE, more efficiently.
 
The Deep Dive session hosted on Dec. 12 focused on member retention by age group by year opened--allowing credit unions to grasp when individuals are opening memberships and tracking what the retention is over time.
 
On Dec. 19, Karnes explored account retention by age group and year opened--a similar function, but specifically for review of sub-accounts.
 
On Dec. 27, CU*Answers reviewed the relationship analysis tool--a way to segment the membership by age ranges and gender for use in analytics or member communications.
 
The company also held a Jan. 3 Deep Dive session.
 
Also, CU*Answers has published a new reference booklet for in-house processing credit unions. The Statement Processing & Verification Tasks handbook is a compilation of all the procedures, tips, and knowledge about what CU*Answers does each month to ensure member statements are issued efficiently.

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