News Now Archive
Published on February 26, 2013.
- NEW: Bachus to GAC: Congress May Revisit Interchange Cap This Year
- NEW: Fryzel: CU 'Common Purpose' Is Powerful Legacy
- NEW: Hensarling Vows To Stand With CUs in Preserving Tax Exempt Status
- At GAC, Cheney Calls On CU System To 'Unite For Good'
- CUNA Chair Mercer Bids Farewell, Cheney Highlights CUNA Priorities
- Matz Outlines 'New' NCUA At GAC
- NBC's Chatzky: CUs Can Help With Fin. Lit. Problem
- Brokaw at GAC: Nation Needs 'Unity' For 'Prosperity'
- Financials Show a Healthy CUNA: Strong Projections For 2013
- Member Benefits Awards Demonstrate CU Difference At CUNA GAC
- Congress This Week: Housing, Monetary Policy On the Agenda
- CFPB Student Lending Work Is One Topic of CUNA Regulatory Advocacy Report
- NCUA Improves Consumer Outreach With New Sites, Video
- Survey: Members Delay Financial Decisions On Life's Big Moments
- Pat Wesenberg Is New CUNA Board Chair
- OMG! One In Three CUs Abandoned Twitter Accounts
- New York Times: Big Banks Are Allies With Online Payday Lenders
- U.S. Rep. Braley Backs MBL At League Conference
- Leagues Providing GAC Coverage For Folks Back Home
- CU System Briefs
- CU CEOs' Confidence In Economy Rosier, Says Catalyst
- FTC Retools Used-Car Buyers Guide
- CUNA Mutual Unveils AskAuto App
- CSS Calendar Program Donates To CU4Kids On Behalf Of CU
NEW: Bachus to GAC: Congress May Revisit Interchange Cap This Year
WASHINGTON (2/27/13, UPDATED: 12:45 p.m. ET)--Federal lawmakers may revisit the topic of interchange fee cap legislation this year, Rep. Spencer Bachus (R-Ala.) said in a Tuesday speech before the Credit Union National Association's 2013 Governmental Affairs Conference in Washington.
Bachus, who is the the immediate past chairman and still a senior member of the House Financial Services Committee, said the interchange fee cap affected local institutions, and basically didn't affect larger financial institutions. "It affected debit cards and things that you market, and not so much the credit card," he said. Earlier today, committee chairman Rep. Jeb Hensarling (R-Texas) said he "will not rest" until Congress repeals interchange fee cap provisions. "Federal price controls were wrong yesterday, federal price controls are wrong today, federal price controls will be wrong tomorrow," Hensarling said of the interchange fee cap.
The Dodd-Frank Wall Street Reform Act, which Bachus said was a result of "the behavior of a few and not main street institutions," punishes credit unions and small financial institutions that were innocent victims. "We're going to look very hard [at Dodd-Frank]," and credit unions could see bipartisan support for taking off some unnecessary, needed, uncalled for parts of Dodd-Frank that impact credit unions and other small financial institutions, he added.
The structure of the Consumer Financial Protection Bureau is another topic that could soon be addressed in a bipartisan manner, Bachus said. He noted that House and Senate members are in serious talks to form a bipartisan commission to govern the bureau. "I think that you will find that approach much fairer and less dictatorial," he said.
NEW: Fryzel: CU 'Common Purpose' Is Powerful Legacy
WASHINGTON (2/26/13, UPDATED 11:11 a.m. ET)--National Credit Union Administration board member Michael Fryzel told a crowd of more than 4,200 credit union officials that their joint vision and values rescued the industry from the recent recession and honored what their predecessors had created.
He was addressing the Credit Union National Association's 2013 Governmental Affairs Conference held here through Thursday.
Fryzel said that during the country's recent financial crisis, the "people who made up the credit union system held together, and because of that, the system held together."
"We all rolled up our sleeves. All of us hauled new timbers. We rebuilt the system ourselves, a system that is going to last," he said.
The NCUA board member also applauded credit unions for continuing to lend to their members and members' families to help them through difficult times. The credit union audience got a pat on the back for being part of a system that accepts challenges together and can take pride in their accomplishments.
Fryzel encouraged the credit union representatives to continue to live out their vision.
"Vision" is a powerful theme of this year's GAC. During the Monday morning session, CUNA President/CEO Bill Cheney presented a bold new, overarching strategic vision for the credit union movement: A vision in which "Americans choose credit unions as their best financial partner."
He outlined this strategic vision, and how credit unions can "Unite for Good" to achieve it, was the focus of the CUNA leader's remarks to the 4,200 participants at the opening general session of CUNA's 2013 Governmental Affairs Conference.
Cheney stressed that developing a vision where Americans choose credit unions as their best financial partner stemmed from more than one year of discussions with credit union and league leaders, credit union system partners, and CUNA's own leadership.
NEW: Hensarling Vows To Stand With CUs in Preserving Tax Exempt Status
WASHINGTON (2/26/13, UPDATED 10:55 a.m. ET)--House Financial Services Committee Chairman Jeb Hensarling (R-Texas), speaking Tuesday at the Credit Union National Association's Governmental Affairs Conference in Washington D.C. said he will help credit unions preserve their tax exempt status.
Hensarling blamed bad policy, specifically excessive taxation, as among the key reasons for feelings of doubt that many American feel toward their economic prospects.
"But if I have anything to do with it, it will not be taxation on our credit unions," Hensarling declared to the credit union audience. More than 4,200 credit union representatives are attending this year's GAC.
Hensarling also said that he "will not rest" until the U.S. Congress repeals a provision of the 2010 Dodd-Frank Act that caps the fees financial institutions and card networks can charge retailers when a customer uses a debit card.
"Federal price controls were wrong yesterday, federal price controls are wrong today, federal price controls will be wrong tomorrow," Hensarling said of the interchange fee cap.
Hensarling also attacked the regulatory complexity created by Dodd-Frank. He said Dodd-Frank was based on the premise that regulators lacked the authority to prevent Wall Street from taking outsized risk, but that diagnosis, he said, was wrong.
"You can find very few instances of lack of regulatory authority contributing to the financial crisis," Hensarling said. "Instead at the epicenter of the crisis is a Federal Reserve that kept money too cheap too long because of the housing bubble and federal policy, particularly the affordable housing goals of the [government sponsored enterprises] that promoted and incented financial institutions that were lending to people to buy homes they could not afford."
Hensarling put Dodd-Frank regulations into two categories: "Those that create uncertainty and those that create certain economic harm."
Among the chief risks facing financial institutions today is federal regulatory risk, Hensarling said. "And ladies and gentlemen, with your support, I plan to end that," he added.
Hensarling, a critic of the authority granted Dodd-Frank granted the Consumer Financial Protection Bureau, said the regulatory burden inflicted by the bureau will stifle innovation and curtail lending. "The way to protect consumers is through competitive, transparent innovative markets that vigorously police for fraud, and it's time to empower credit union members not bureaucrats in Washington."
At GAC, Cheney Calls On CU System To 'Unite For Good'
WASHINGTON (2/26/13)--Credit Union National Association President/CEO Bill Cheney on Monday presented a bold new, overarching strategic vision for the credit union movement: A vision in which "Americans choose credit unions as their best financial partner."
Outlining this strategic vision, and how credit unions can "Unite for Good" to achieve it, was the focus of the CUNA leader's remarks to the 4,200 participants at the opening general session of CUNA's 2013 Governmental Affairs Conference.
Cheney stressed that developing a vision where Americans choose credit unions as their best financial partner stemmed from more than one year of discussions with credit union and league leaders, credit union system partners, and CUNA's own leadership.
All agreed a new vision must be rooted in credit unions' shared values, including collaboration, a focus on members, community involvement, and a dedication to financial well-being. Cheney told a packed GAC audience that he is presenting a broad vision for the movement now because the time for credit unions has never been better.
Cheney explained that a cultural shift is happening in America that aligns perfectly with the credit union movement. "People want to do business with people who have their best interests at heart...This cultural shift is right in our wheelhouse." People are interested in more values-based decision making and there is a move away from big corporations and big banks, he said.
The CUNA CEO cited Nationwide Insurance, which now touts "doing what's right for our members" in ads, as one prominent example of this cultural shift toward values-based businesses. Bank Transfer Day in late 2011 was another example, one that grew out of consumer frustration with new fees from big banks and prompted consumers by the thousands to discover credit unions through aSmarterChoice.org, the new CUNA/league consumer website.
"Our advantage is a values-based business model of credit unions…People over profit, banking with a conscience, focusing on members, an organization that's built around your needs," Cheney added.
To realize a vision where Americans choose credit unions as their best financial partner, the credit union system will need to work collaboratively to advance three broad goals:
Cheney said these efforts can create a major accomplishment for the credit union system over the next decade.
Two key measures of success, he offered, would be to:
CUNA will be working with leagues and credit unions in the coming weeks and months to advance this common vision. And Cheney announced that a new web page, uniteforgood.org, has already been launched with an overview of the initiative and a video on why the time is so right for credit unions to unite for good, with more resources and key information still to come.
"We need to unite for good. We need to unite for the good that credit unions do. Unite for good, so that Americans will choose credit unions as their best financial partner," Cheney told the GAC audience.
For the new website, use the resource link.
CUNA Chair Mercer Bids Farewell, Cheney Highlights CUNA Priorities
WASHINGTON (2/26/13)--Outgoing Credit Union National Association Chairman Mike Mercer urged credit union leaders to continue fighting for legislative issues critical to credit unions, while CUNA President/CEO Bill Cheney highlighted CUNA's priorities for 2013 at CUNA's 79th Annual General Meeting.
|Outgoing CUNA Chairman Mike Mercer, who is president/CEO of Georgia Credit Union Affiliates, called for more collaboration among credit unions during CUNA's 79th Annual General Meeting. (CUNA photo)|
Credit unions must be willing to cooperate with each other, said Mercer, who is president/CEO Georgia Credit Union Affiliates.
One initiative on which they can collaborate is CUNA's "Unite for Good," a strategic vision unveiled by CUNA's Cheney earlier in the morning. (See related story this issue.)
In Cheney's address to the AGM, the CUNA leader reiterated that CUNA's No. 1 priority for 2013 is preserving credit unions' tax exemption. That emphasis reflects the Obama administration's focus on tax issues, he said. Cheney urged GAC attendees to take up that cause with their Congress members in the Capitol Hill visits while in Washington this week. "We have a great story to tell we just need to be prepared to tell it," Cheney said.
Reducing regulatory burden is also a priority for CUNA. The association has worked with the National Credit Union Administration, The Consumer Financial Protection Bureau and Department of Treasury to express concerns on behalf of credit unions. CUNA's enhanced weekly Regulatory Advocacy Report summarizes key issues and is available free to CUNA members.
Cheney said enhancing the credit union charter remains a top priority for the association. He noted that the 113th Congress will address capital reform. "We want those reforms to include capital access options as well as risk-based options," Cheney said.
CUNA's goal is to push MBL legislation "beyond the five-yard line" in 2013. In February, Rep. Ed Royce (R-Calif.) reintroduced legislation that would increase the credit union MBL cap to 27.5% from the current 12.25% of assets. The bill, if enacted, would help credit unions lend an additional $14.5 billion to small business in the first year, and help small businesses created more than 158,000 new jobs.
Under the direction of new CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile, CUNA will focus on strengthening communications in 2013. CUNA has launched The Cheney Report, which offers the CUNA president's latest thoughts on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs each Friday.
CUNA is also working with the American Association of Credit Union Leagues to improve credit unions' political effectiveness, Cheney said. "We need you get out of the stands and on field to help us win for credit unions," he said. "We need you involved with your local officials in every way possible."
Matz Outlines 'New' NCUA At GAC
WASHINGTON (2/26/13)--Saying that the agency has to modernize to keep up with the growth of the credit union industry, National Credit Union Administration Chairman Debbie Matz announced plans for "modernizing and revitalizing'' the agency in areas such as examinations and allowing more innovative products and services.
"We're modernizing and revitalizing NCUA for an industry that is newly vibrant, increasingly complex and rapidly changing," Matz said at Monday's session of the Credit Union National Association's Governmental Affairs Conference. "NCUA is reassessing and retooling our business model. The rules of the road that guided credit unions in earlier decades may not meet your needs or your members' needs today. We must stay ahead of the curve." CUNA said it looks forward to working with Matz and her agency on those initiatives.
Matz noted that the agency has streamlined examinations for smaller credit unions and
|NCUA Chairman Matz unveils a major initiative at the CUNA GAC, telling her credit union audience that they will see a "new" NCUA--modernized and revitalized. (CUNA Photo)|
Matz, who was named chairman by President Obama in 2009, said the agency needs to be especially vigilant, even though the financial crisis is over. She said the industry faces several key challenges, including:
- Interest-rate risk from long-term, fixed-rate loans;
- Interest-sensitive deposits;
- New technologies like mobile banking; and
- Concentration of assets in the largest credit unions.
"Sometimes U.S. regulatory bodies put the brakes on change until the regulators can catch up. But that's not the choice NCUA is making--not on my watch," Matz added. "We can either try to slow it down, or we can do everything in our power to move forward ourselves."
Matz noted that the industry is financially strong and said that return on average assets is 86 basis points, up from 18 basis points in 2009. Net worth is 10.4%. Loans have grown for seven consecutive quarters and charge-offs have fallen for four consecutive quarters.
She added that the growth, combined with the added services that many credit unions offer, has forced the agency to deal with new kinds of risks.
"Some risks are always there. Others arise with new realities. But either way, being the best of a time that's passed is not good enough,'' she noted.
Matz compared the challenge that forced the NCUA to modernize with challenges facing auto manufacturers in trying to modernize cars, such as the 1965 Aston Martin featured in many James Bond films. That car didn't have seatbelts, air bags and anti-lock brakes.
She noted that "just plain cool as those cars were, you probably wouldn't choose to buy a car without those safety features today.'' And added that the "rules of the road that guided your credit unions in earlier decades may not meet your needs or your members' needs today."
NBC's Chatzky: CUs Can Help With Fin. Lit. Problem
WASHINGTON (2/26/13)--Award-winning journalist and best-selling author Jean Chatzky said there is a pressing need for financial literacy among consumers, and that credit unions are in a position to do something about it.
Chatzky, who is the Personal Financial Editor on the NBC's TODAY Show, said studies suggest about half of all Americans are "financially fragile." She said the test is that a sudden $2,000 debt for consumers would most likely result in a financial crises for nearly half of those involved.
She made the observation during a speech before the Credit Union National Association's Governmental Affairs Conference, which runs through Thursday.
"Financial literacy is the big problem," Chatzky added.
She said financial education programs help raise the awareness of basic financial services and helps both the institutions and consumers. "There is a need to give people a better knowledge of basic financial services," she told the meeting. She said credit unions do a great service when they help.
Chatzky said lenders must be aware that there are deep-seated emotional and psychological factors involved when consumers approach them for a loan.
She said that lenders who become sensitive to this can do a better job for the consumer when a person walks into the office and begins discussing a loan. She suggested that each potential borrower reacts differently--some even illogically--and lenders should be aware of this so they can best serve the consumer.
"You don't want to treat everybody like your grandmother," she told the audience. Chatzky said that both financial advisors, like herself, and credit unions are "in the business of granting requests without being intimidating.
"All of you are in a tremendous position to help," Chatzky said, adding there is no doubt that credit union have a reputation for helping the consumer. "But much more needs to be done," she concluded.
Brokaw at GAC: Nation Needs 'Unity' For 'Prosperity'
WASHINGTON (2/26/13)--World-renowned journalist and author Tom Brokaw said the nation badly needs a return to the spirit that helped us win a world war, and inspired an era of unprecedented prosperity, and world leadership. He said the unity and progress of those years becomes even more enviable at a time when political progress is measured by such phrases as "kicking the can down the road."
Brokaw, in a speech Monday before the 4,200 credit union attendees at the Credit Union National Association's 2013 Governmental Affairs Conference, was referring to a currently popular phrase that has become part of the lexicon during the present partisan deadlock over spending and tax issues. "I've been doing this for a long time," he told the audience about his observations of the country's political affairs, "but I have never seen the nation in such a state of disrepair."
He received a standing ovation after his a speech, in which he discussed his impressions stemming from 50 years of journalism and politics. Brokaw proposed creating a new educational system built around institutions committed to training leaders in all aspects of public service.
"There is a longing," he told the audience, "to find an idea that will pull us all together." Brokaw said he was especially concerned today by the partisanship that currently exists in Congress. "You can't even be seen with your arm around a member of the other party member," he said.
During a question-and-answer session, Brokaw said the surge of technology in recent years has been boon for the news organizations and consumers.
"The state of the news outlets in some ways was never better because of access to the Internet, the iPad and the other technology.
"You can no longer be a couch potato, and get up and sit around drinking a cup of coffee while getting the news from daily newspaper."
Financials Show a Healthy CUNA: Strong Projections For 2013
WASHINGTON (2/26/13)--The improved finances of credit unions in 2012 gave them more money to spend on the Credit Union National Association's products and services, which triggered an increase in revenues for the association last year, CUNA Treasurer Susan Streifel said at the Annual General Meeting at yesterday's opening session of the CUNA Governmental Affairs Conference. CUNA offers members a comprehensive array of resources and training options.
Streifel noted that the association's unaudited results indicated that it had $52.4 million in revenues last year, compared with $49.8 million in 2011 Last year's expenses were $49.9 million, compared with $48.2 million in 2011. The operating margin was $2.5 million in 2012 and $1.6 million in 2011.
In 2012, the association had $31.3 million in assets, $22.5 million in cash, cash equivalents and investments, $14.5 million in working capital, and net assets of $13.7 million.
Streifel, the president/CEO of Woodstone CU of Federal Way, Wash., said CUNA projects its finances will be strong again this year.
She said CUNA projects net revenues will be $53.8 million. Of that, $25.4 million will come from dues, $24.1 million from fees based services and $4.3 million will come from other sources. Expenses are projected to be $52.9 million and the operating margin is projected to be $900,000.
Member Benefits Awards Demonstrate CU Difference At CUNA GAC
WASHINGTON (2/26/13)--The credit union difference was front and center as Credit Union National Association Chief Economist Bill Hampel presented this year's CUNA Member Benefits Awards on Monday.
The awards, which went to the credit unions that provide members with the best bang for their buck, were presented during the afternoon session of CUNA's 2013 Governmental Affairs Conference.
To determine the award winners, CUNA asked GAC-registered credit unions for their rates on various loans and deposit accounts. CUNA then examined that information, along with call report data on the amounts of credit unions'loans and deposits. The credit union information was then compared with third party info on bank rates to calculate how much members from given credit unions saved as a result of using their credit union instead of local banks.
From first to third place, the credit unions with $75 million in assets and less that provided maximum benefits per member household were:
- United Health CU, Burlingame, Calif.;
- Valley CU, Salem, Ore.; and
- First Class American CU, Fort Worth, Texas.
- Boston Firefighters CU, Dorchester, Mass.;
- St. Louis Community CU, St. Louis, Mo.; and
- Community Financial CU, Broomfield, Colo.
- Melrose CU, Briarwood, N.Y.;
- Southwest Airlines FCU, Dallas, Texas;
- Alliant CU, Chicago, Ill.
Fostering service excellence is a key pillar of CUNA's new strategic vision for the credit union system, which was unveiled on Monday. CUNA President/CEO Bill Cheney stressed that the system must work together so that credit unions across the board can offer a complete set of forward-looking and constantly improving financial services to members of all backgrounds and life stages. These changes will help the credit union system reach the goal of $20 billion in member benefits, and 50 million members that consider credit unions their primary financial institutions, by 2023. (See News Now story: Cheney Calls On CUs To 'Unite For Good')
Congress This Week: Housing, Monetary Policy On the Agenda
WASHINGTON (2/26/13)--As the Credit Union National Association's 2013 Governmental Affairs Conference got started here Monday, members of the U.S. Senate and House were returning to Washington after a ten-day recess for the Presidents' Day holiday.
The Senate calendar will be dominated by consideration of a sequester replacement bill and a vote on the nomination of former Sen. Chuck Hagel to be Secretary of Defense. The sequester will take effect on March 1 unless Congress and the president are able to reach a deal this week.
Committee meetings of most note for credit unions this week include:
- The Federal Reserve's Humphrey-Hawkins semi-annual reports in both Senate and House on monetary policy. Fed Chairman Ben Bernanke will address the Senate Banking Committee Tuesday and the House Financial Services Committee on Wednesday; and
- On Thursday, the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on "Addressing FHA's Financial Condition and Program Challenges, Part II."
CFPB Student Lending Work Is One Topic of CUNA Regulatory Advocacy Report
WASHINGTON (2/26/12)--This week's edition of the Credit Union National Association's Regulatory Advocacy Report draws attention to the always-active Consumer Financial Protection Bureau's work to address student lending issues, and a CUNA comment call on those issues.
The CFPB is accepting comment from students, parents, lenders and educators on financial services specifically marketed to higher education students. CUNA is collecting information from credit unions on the questions asked by the CFPB most directed at credit union activities. This information will also give CUNA a clearer picture of the types of products and services credit unions are offering to students. For the comment call, use the resource link.
This month's Regulatory Advocacy Report also outlines CUNA's recent comments on the CFPB's ability to repay rule, and recaps the CFPB Consumer Advisor Board meeting that was held last week. Cyber security issues and the National Credit Union Administration's guidance for credit unions facing such issues, National Credit Union Administration /National Association of State Credit Union Supervisors recent low income credit union work, and Financial Crimes Enforcement Network news is also covered in the report.
The Regulatory Advocacy Report includes the in-depth content readers expect from CUNA, and updates credit unions on where they stand on key credit union issues and what CUNA has done to advocate for them.
Employees or volunteers of CUNA/state credit union league-affiliated credit unions can sign up to receive the report.
The Regulatory Advocacy Report is archived on cuna.org.
NCUA Improves Consumer Outreach With New Sites, Video
ALEXANDRIA, Va. (2/26/13)--The National Credit Union Administration Monday unveiled updated versions of its consumer websites MyCreditUnion.gov and Pocket Cents.
"We've made two valuable consumer tools better," NCUA Board Chairman Debbie Matz said.
Both sites provide consumers with the information needed make better financial decisions for their lifestyles and goals, she added.
Consumers can now also keep up with the latest personal finance tips from the NCUA through a new agency Twitter feed, @MyCUgov. Matz was also featured in a new NCUA Consumer Report video that reminds viewers of the importance of developing and keeping good savings habits. "That's an important step towards building a solid financial future," Matz said.
The new resources and website changes were released to coincide with America Saves Week and Military Saves Week. For more on the NCUA resources, use the link.
Survey: Members Delay Financial Decisions On Life's Big Moments
WASHINGTON (2/26/13)--Credit union members--especially younger ones--are taking longer to make decisions, causing major purchases and subsequent life events to be delayed, a survey released Monday by TruStage, the consumer brand of CUNA Mutual Group, has revealed.
The survey of more than 1,600 credit union members asked about major financial life events they face in 2013. It focused on the financial decisions members made regarding vehicle purchases, home buying, the birth of a child and planning for college, weddings and retirement.
"When we took a deeper look at the survey results, we were surprised to see that it's taking longer to make major financial decisions and purchases," said Alan Bergstrom, TruStage brand and creative services director. "Given the nature of our fast-paced culture, we anticipated those decisions to happen faster, but the results show many people are actually slowing down and taking more time to plan and decide."
The survey uncovered several generational trends in making major life purchases and decisions. For instance:
- Generation Y (18-34 year-olds), typically the most connected and tech-savvy demographic, actually takes 18 days longer, on average, to shop for a car than those who are 45-54 years old.
- People date much longer now before marrying, therefore delaying wedding-related purchases and big life events such as buying a home or a car.
- Current 18-44 year-olds have underestimated how long it will take to graduate from college, despite rapidly increasing tuition costs and student-loan debt.
- Retirements are taking longer to reach. For those planning retirement, the expected retirement age is nearly 64 years. For those already retired, the average retirement age was 59 years.
The survey also found 18-34 year-olds plan to retire at a significantly older age than preceding generations, with 71% starting to make retirement plans earlier in life--starting, on average, at age 24.
"This presents an opportunity, as our survey indicated this generation considers credit unions to be one of several 'trusted sources' for help in planning retirement," Bergstrom said.
Credit unions should ask some very important questions, he said. "What does this information mean for credit unions?" he asked. "How are economic, social or cultural factors affecting decisions and life event plans? What role does instant access to information and mobile technology play in the decision-making process? When we learn about members' mindsets and behaviors and how they continue to change, we can apply that knowledge to member connections and relationships."
For more information, use the link.
Pat Wesenberg Is New CUNA Board Chair
WASHINGTON (2/26/13)--Pat Wesenberg, president/CEO of Central City CU in Marshfield, Wis., was elected Monday as chairman of the Credit Union National Association Board of Directors, during a board meeting at CUNA's Governmental Affairs Conference in Washington, D.C.
"I look forward to working with our board under Pat's leadership as we strive to have more Americans choose credit unions as their best financial partner," said CUNA President/CEO Bill Cheney. "I have always valued Pat's perspective and insight, and the way both are energized by her passionate belief in the ability of credit unions to improve people's financial well-being."
Wesenberg succeeds outgoing board Chairman Mike Mercer, president/CEO of the Georgia Credit Union Affiliates.
Other newly elected board officers are:
- Vice Chair: Dennis Pierce, president/CEO, CommunityAmerica CU, Kansas City, Mo.;
- Secretary: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
- Treasurer: Rod Staatz, president/CEO, SECU of Maryland, Linthicum, Md.; and
- At-large Member: Pat Jury, president/CEO, the Iowa Credit Union League.
- Brad Green, president/CEO, Listerhill FCU, Muscle Shoals, Ala., replacing Laida Garcia, Floridacentral CU, Tampa, Fla.;
- Bill Mellin, president/CEO, the Credit Union Association of New York, replacing Paul Gentile, former president /CEO, the New Jersey Credit Union League;
- Troy Stang, president/CEO, the Northwest Credit Union Association, replacing Dennis Tanimoto, president/ CEO, the Hawaii Credit Union League; and
- Scott Sullivan, president /CEO, the Nebraska Credit Union League, replacing Marla Marsh, president/CEO, the Kansas Credit Union Association.
OMG! One In Three CUs Abandoned Twitter Accounts
WASHINGTON (2/26/13)--Nearly one in three credit unions that once had an active presence on Twitter have abandoned their accounts, according to a survey released Monday by marketing research firm, The Financial Brand.
The survey does not answer the question of why they've stopped tweeting. However, the numbers give several clues that indicate a Twitter following may not yield the marketing potential that many assume it does.
The credit unions surveyed with still active Twitter accounts averaged about 400 followers, 20% of whom are from inactive or spam accounts. The average credit union with such accounts added about 100 new followers last year and sent roughly 500 all-time tweets, with 200 of those sent last year.
"While some of the larger banks and credit unions have been able to find traction on the world's No. 2 social media network, the overwhelming majority have enjoyed little to no success," said the company (thefinancialbrand.com Feb. 25).
As a group, credit unions' Twitter audience is about 0.79% of their aggregate membership. In other words, a credit union can expect, on average, one follower for every $1.5 million in assets, or one follower for each 126 members.
In 2011, about 3.1% of the credit unions with accounts resurrected an account they had previously abandoned, only to abandon it a second time.
Many followers of Twitter are "deadwood"--fake followers such as spam accounts or inactive ones. The average percent of Twitter deadwood for all credit unions is 18.2%, with 4.2% of them fake followers and 14.67% inactive, said The Financial Brand. Anyone anywhere can follow a financial institution's Twitter account, including social media self-promoters (5% of the deadwood), consultants and industry insiders (another 5%) and other credit unions and banks (5%-15%), it said.
That means the average credit union on Twitter will have potential marketing value from 50% to 60% of their followers.
The survey was conducted during the fall of 2012 and is based on 350 credit unions or roughly 5% of all U.S. credit unions. For more details from the survey, use the resource link.
New York Times: Big Banks Are Allies With Online Payday Lenders
NEW YORK (2/26/13)--With 15 states banning high-interest payday loans, big banks have become a critical link for online payday lenders who sometimes charge rates exceeding 500%, according to The New York Times.
Although the big banks don't make the loans, they allow automatic withdrawals for payments of the payday loans, which often trigger overdraft fee--even in states that have banned such loans.
The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau are examining banks' roles in Internet payday loans, said the article (Feb. 23). The New York State's Department of Financial Institutions is investigating how banks enable online offshore payday lenders to make the loans in New York, which caps the interest rates at 35%.
Credit unions are often noted as lower-cost alternatives to payday loans for members needing to borrow funds short-term, the Credit Union National Association points out. They don't charge exorbitant interest rates, and some tie their programs to loans that put back funds into a savings account as a condition of the loan, helping the borrower build wealth, or they have a financial counseling component.
More payday lenders are setting up business offshore to evade statewide caps on interest rates, but they couldn't do business without giants like J.P. Morgan Chase, Bank of America and Wells Fargo, said the Times.
"In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals," said the Times.
About 27% of payday loan borrowers surveyed by Pew Charitable Trusts say that the loans caused them to overdraw their accounts, forcing fees.
The article points out that the loans are easy to obtain but hard to stop. One Chase customer told the Times she had six Internet loans. When she asked Chase to close the account in March, it kept the account open between April and May. In the meantime the lenders tried to withdraw funds from the account 55 times. Chase charged her $1,523 if fees--44 insufficient funds fees, extended overdraft fees and service fees.
U.S. Rep. Braley Backs MBL At League Conference
DES MOINES, Iowa (2/26/13)--
"I believe the work you do matters," he told more than 100 Iowa credit union representatives convened in Des Moines Feb. 19-20 to learn more about the legislative issues affecting the credit union industry and to interact with their legislators.
"The people you serve are an important part of our state," Braley said, adding he believes in the value of MBL and thinks there should be enough room for all parties involved. "To me, there should be plenty of room at the table for lenders doing commercial and business lending," he said.
Credit unions, the leagues and the Credit Union National Association are urging Congress to help credit unions make even more business loans by raising their MBL cap to 27.5% of assets, up from 12.25%. Doing so would help boost the economy by generating $14.5 billion in new loans and 158,000 new jobs, says CUNA, all without costing the taxpayer a dime.
|Iowa State University Head Football Coach Paul Rhoads likened building blocks for a team to that of credit unions at Iowa Credit Union League's annual Legislative and Regulatory Conference last week. (Photos provided by the Iowa Credit Union League)|
Rhoads spoke about the importance of building a team with mental toughness, willingness to continuously improve and that have a commitment to teamwork. "Credit unions have a similarity in the building blocks I use for my team. Smart decision makers. Be accountable. Trust." He explained that "You can't accomplish anything without people--especially in credit unions and the work they do for their members."
Also speaking to attendees were CUNA Chief Economist Bill Hampel, who provided the economic outlook for credit unions; Ed Wallace, deputy director of Workforce Development; and Amy Hudson, director of business development for CoOportunity Health.
Leagues Providing GAC Coverage For Folks Back Home
WASHINGTON (2/26/13)--While News Now and other media and social media channels at the Credit Union National Association are covering CUNA's Governmental Affairs Conference in Washington, D.C., this week, several leagues are generating some GAC buzz on their own, by providing daily videos and other coverage about the activities for the folks back home.
The Michigan Credit Union League's online video portal, CUBE TV, is providing "Live From the GAC" updates each day about the activities, including interviews with league personnel and credit unions. Roughly 125 credit union leaders are attending from Michigan, which the league says is one of the largest delegations from the state in recent years.
The League of Southeastern Credit Unions is podcasting a daily video "LSCU from the CUNA GAC" on its eSignal Weekly for credit unions in Alabama and Florida. Each day it posts a video chronicling the day's events. LSCU's first video set the stage for the next four days, with two credit union officials talking about what they hope to accomplish this week. More than 130 credit union officials from Alabama and Florida are attending the GAC.
Several leagues are covering the events for their daily online or e-mail newsletters. The Credit Union Association of the Dakotas brought highlights and photos to its publication, the Memo from Monday's general session and from the CUNA Strategic Services Board meeting. About 50 CUAD members are participating in the GAC this year--28 from North Dakota and 22 from South Dakota.
The North Carolina Credit Union League's online newsletter The Daily Conversation recaps the Twitter links shared by the league, North Carolina's credit unions and other sources. More than 80 advocates from 20 North Carolina credit unions are attending.
Also covering the events: the Texas Credit Union League's LoneStar Leaguer, the Pennsylvania Credit Union Association's Life is a Highway, the New Jersey Credit Union League's The Daily Exchange and more.
For CUNA's extensive multimedia coverage, see related story "CUNA To Deliver Extensive On-Site Coverage Of Action-Packed GAC" in Monday's News Now.
To see the Michigan and LSCU videos, use the link.
CU System Briefs
- RALEIGH, N.C. (2/26/13)--SECU Foundation at Raleigh, N.C.-based State Employees' CU has partnered with the NC Rural Economic Development Center Inc. to fund 35 paid internships for college students from rural North Carolina this summer. The four-week internships will go to students who will be sophomores or juniors at state universities or community colleges. The member-funded foundation will contribute $7,500 per participant for the program's costs, with a total initiative cost of $262,500. Applications will be accepted in March, with interns selected in April, said SECU ...
CU CEOs' Confidence In Economy Rosier, Says Catalyst
PLANO, Texas (2/25/13)--Credit union CEOs appear confident the economy is on the mend, said Catalyst Corporate FCU's quarterly CU CEO Confidence Index for fourth quarter 2012. The index topped 26 points for the third time in the past five years.
Fourth quarter's index was 26.66, up 2.63 points from third quarter. The average has been 20.09 since the recession began in fourth quarter 2007.
"There's no question that the fourth quarter survey shows CEOs' sentiment improving on current and future financial conditions," said Brian Turner, Catalyst Strategic Solutions' director and chief strategist. "This suggests that surviving the depths of recession and its accompanying protracted low-rate environment may have toughened CEO skins a bit and strengthened their internal countenances."
CEOs' optimism about their credit union's current financial condition saw the largest increase--4.74 points. The smallest uptick--1.11 points--was in expectations of share deposit growth six months into the future. Less than 3% of the responses across six questions fell into the negative category.
"Hopefully, they have come to realize how resilient their balance sheets truly are and have begun to adopt real-world relative value and return strategies, rather than applying remedies that suppress the volume of longer-term earning assets retained on their balance sheets," said Turner.
"CEO expectations are most likely on target," he said. "With economic growth projected to be around 2% for 2013, consumer spending is not likely to be much higher than it was in 2012. For 2013, this would portend moderate growth in loan demand and growth comparable to last year in shares."
CEOs' outlook for improvement at their credit union outpaced the outlook for members' future financial condition, even though CEOs indicated greater optimism in both, said Turner.
Although the overall credit union industry reported a 4.5% increase in loans outstanding for 2012, Turner said 85% of credit unions did not experience loan growth. "CEOs are expecting share growth to continue as members look for safety, rather than rates, on their funds."
Mark Herter, president/CEO of Farmers Insurance Group FCU, a $614 million asset, Los Angeles-based credit union heavily involved with business lending, told Catalyst he sees some improvement in the economy.
"In terms of number of loans booked, we continue to see increases year over year, but the speed at which mortgages are prepaying has increased," Herter said. "When we see large loans paid off early, we assume that members are doing well financially. We want to see our members improve their financial situations. The result, however, is that the credit union has ample liquidity, and our focus has to be on growing our loan portfolio."
Share growth in 2012 "significantly exceeded our projections, so we will not aggressively seek deposits until we see a loan-to-share ratio that makes us uncomfortable," Herter said. Roughly 98% of the credit union's field of membership is connected to Farmers Insurance Group. Even so, members' perceptions of the economy can vary widely, Herter said, because membership consists of both self-employed agents and corporate employees.
He noted that "the agents tend to be the borrowers, and the corporate employees tend to be the savers. The agents get more pessimistic about the economy when premiums increase, but they understand that it has to happen for the company to remain viable."
Catalyst's survey was based on responses from 259 member credit unions in January. It asked CEOs to evaluate current financial condition of members and the credit union; anticipated financial condition of both in six months, and the credit union's anticipated loan demand and share deposit growth in six months. For more information, use the link and go to "Links & Forms."
FTC Retools Used-Car Buyers Guide
NEW BEDFORD, Mass. (2/26/13)--The Federal Trade Commission (FTC) is asking for input about proposed revisions to the Used Car Buyers Guide--window stickers the FTC requires dealers to place on used cars. The proposals contain some good news for consumers but could make it harder to find some information or to hold dealers responsible in cases of fraud (SouthCoastToday Feb. 17).
The existing Buyers Guide contains basic information about the car, tells whether or not the dealer offers a warranty and informs potential buyers of their legal rights. If a dealer offers a warranty, it must list the terms and conditions, including coverage duration, what percentage of total repair costs the dealer will pay and which vehicle systems the warranty covers.
Under the proposed changes, if a car still is covered by a manufacturer's or a third-party warranty, the dealer would have the option of marking check boxes located on the back of the Buyers Guide to indicate whether:
- The manufacturer's warranty still applies.
- The manufacturer's used vehicle warranty, such as a manufacturer's certified used car warranty, applies.
- Some other used vehicle warranty applies.
And, if any warranties apply, the dealer would not have to provide copies. It would be up to the potential buyer to track down and pay for reports about the vehicle's history by consulting the National Motor Vehicle Title Information System (NMVTIS). The information also is available from private providers such as Autocheck or Carfax. Access to these services requires computer access and a credit card.
Another potential area of change is language that would define the "as-is" selection on the sticker: "The dealer won't pay for any repairs. The dealer is not responsible for any repairs, regardless of what anybody tells you." The National Association of Consumer Advocates, Washington D.C., points out that this language is confusing--under state law in all 50 states, if dealers commit fraud they might have to pay for repairs and be liable for refunds or punitive damages.
Consumer Action, San Francisco, is also concerned (Feb. 8) that the new rules would not require dealers to inspect a vehicle before sale or even to disclose known defects.
The FTC invites comments during the proposal's public comment period, which runs through March 13. Post your comment on the FTC.gov website.
Regardless of FTC proposals and the final rule, it's always up to you to look for hidden damage and potential problems when buying a used vehicle. No database, whether the NMVTIS or a commercial service, has consistently up-to-date or complete information about a particular vehicle. Disregard verbal promises by friendly salespersons, check the car's history and have the vehicle inspected by an independent mechanic before you sign a sales contract. Consider arranging loan preapproval from your credit union to avoid pricey, shady, or confusing financing deals.
For more information, read "Avoid Buying a Flood-Damaged Used Car" in the Home & Family Finance Resource Center.
CUNA Mutual Unveils AskAuto App
WASHINGTON (2/26/13)--New technology that assists credit union members in shopping for and purchasing a vehicle was unveiled Monday by CUNA Mutual Group at the Credit Union National Association's Governmental Affairs Conference in Washington D.C.
"It's easy to use, and will help credit union members shop and buy smart," said Steve Hoke, CUNA Mutual director of loan growth products and product leader for AskAuto. "This technology gives members the ability to apply for a loan anytime, anywhere using their smartphone."
By scanning the vehicle identification number, the member learns basic vehicle information, including average retail cost of the new or used vehicle and Environmental Protection Agency mileage estimates. The application saves the information along with the member's notes and ranking preferences so the member can compare vehicles before a purchase. The member can also submit a credit union loan application through AskAuto.
The comparison feature is really important to members, Hoke said. Forty-four percent of likely car buyers plan to use a smartphone to compare prices on the dealer lot ("Mobile Auto Insights," Greystripe Inc., April 2011).
"AskAuto also gives credit unions the ability to send messages to their members while the member is on a car dealer's lot using GPS technology," Hoke said. AskAuto uses patent-pending technology to do this, Hoke explained. The messages are customizable and can provide members guidance on the best loan available from their credit union.
The technology uses CUNA Mutual's loanliner.com product, which is employed by more than 500 credit unions nationwide.
The loanliner.com application system leverages CUNA Mutual's LOANLINER lending solutions to ensure the application presented to the member complies with all appropriate state and federal regulations and required disclosures. Where available, the loanliner.com application system interfaces with credit union's loan-origination system to provide an underwriting decision back to the member in seconds, and then transports application data back to the loan-origination system.
More than $600 million in loan requests have been submitted through CUNA Mutual Group's smartphone loan technology since it debuted in June of 2011, and 45% of smartphone loan applicants express interest in payment-protection products, Hoke said.
Early adopter credit unions will begin using AskAuto in March, and the full release is scheduled for early this summer.
CSS Calendar Program Donates To CU4Kids On Behalf Of CU
"This year's sales enabled CUNA Strategic Services Inc. (CSS) to make a $1,000 donation on behalf of MembersOwn CU in Lincoln, Neb.," said Wes Millar, CSS senior vice president. "We plan to make another donation next year as well."
The calendar program, administered by CSS, resulted in $2,500 in credit union donations in 2012. More than 94,500 of the calendars have been sold since 2010, with more than $7,500 in donations going to the Credit Unions for Kids program.
Children's Miracle Network Hospitals in Nebraska will get an extra benefit, because of a commitment from CSS to donate a percentage of its net proceeds from sales of the specially branded calendar. One purchasing credit union was randomly selected to receive the donation.
"CUNA Strategic Services has not only raised critical funds for our Children's Miracle Network Hospitals, but they've also helped drive awareness of the Credit Unions for Kids program through the sale of their calendar," said Joe Dearborn, senior director for Children's Miracle Network Hospitals.
Credit Unions for Kids has raised more than $100 million for Children's Miracle Network Hospitals since its inception in 1996. It ranks only behind Walmart and Costco as one of the largest donors to the program, which assists children and their families.
For more information, use the link.