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November 25, 2014

Who's buying? CUNA-CFA survey results suggest 3%-3.5% bump in holiday spending

Washington
WASHINGTON (11/25/14)--More consumers say they plan to spend less money in 2014 compared with 2013, according to a survey conducted by the Credit Union National Association and the Consumer Federation of America (CFA).  However, such good intentions don't always translate into thrifty actions. This is the 15th year the two organizations have conducted the annual holiday spending survey, which interviewed 1,009 adults by phone from Oct. 30 to Nov. 2.

CUNA Vice President of Economics and Statistics Mike Schenk and CFA Executive Director Stephen Brobeck held a press conference Monday morning to discuss the results. A number of media outlets were in attendance, including CNBC, ABC Radio, Voice of America and American Banker.
Click to view larger imageA breakdown of how consumers plan to spend this holiday, according to a CUNA-CFA survey.

"Top-line results from an economic perspective are encouraging, and holiday spending almost certainly will increase this year," said Schenk.

"However, elements of our survey underscore the fact many consumers continue to reflect significant concerns about their personal finances--most especially in the realm of weak income gains.

"Because of this we expect the increase in holiday spending this season to be modest."

Schenk said the projected increase in spending this holiday season will be approximately 3% to 3.5%, adding that the survey responses don't always correlate with an increase or decrease in spending.

"What consumers say they'll do doesn't always correspond to what they actually do. Over time, consumers generally say they'll reduce spending rather than increase spending, often by a wide margin. For most, it's almost instinctive not to plan to overindulge," he said.

"However, actual holiday spending almost never decreases. In fact, in every year of our survey, there's been only one period where holiday spending declined, that was 2008 in the teeth of the recession," he added.

According to the results, 10% of consumers said they would spend more, compared with 13% in 2013. Approximately 33% said they would spend less, compared with 32% in 2013. In 2008, 55% said they planned to spend less.

Cautious financial attitudes may have helped credit union growth over the past year. Credit union membership, which recently passed the 100 million memberships mark, grew by approximately 3% last year, compared with an approximate 1% growth in population.
Click to view larger imageThe CUNA-CFA survey showed that households making less than $25,000 a year reported a lower income increase than households making more than $100,000. This chart reflects changes in household incomes overall. 

"Credit union memberships are growing at a rate roughly three times the rate of population growth. The reason for that is, as not-for-profit cooperatives, we return our earnings to our members, which means essentially, credit union members get a better deal," Schenk said.

"Consumers are engaged, but they are undoubtedly, experiencing some difficulties, and part of the answer to those difficulties is shopping around for the best value proposition. More and more they're finding that value at credit unions," he added.

Brobeck agreed, saying, "It's quite clear that low- and moderate-income consumers can get a better deal at credit unions."

According to the survey results, nearly twice as many of those with low incomes (37%), than of those with high incomes (19%), said they would spend less money this year than last. ReadMore

RBC revisions expected Jan. 15: 90-day comment period likely to follow

Washington
ALEXANDRIA, Va. (11/25/14 )--Jan. 15 is the likely date that the National Credit Union Administration will take up a new risk-based capital (RBC) proposal for discussion. NCUA Chair Debbie Matz late Friday announced that she will ask the agency board to consider a revised RBC plan at that time--and said a 90-day public comment period would likely follow.

Credit Union National Association President/CEO Jim Nussle responded immediately to the announcement: "We appreciate that the NCUA intends to support a 90-day comment period, which is consistent with how we thought this process would work. CUNA looks forward to seeing the details of the revised rule when it is proposed. We plan to be an active participant in what we hope will be an open process that will fully examine the effect the revised proposal will have on credit unions."

Responding to an inquiry by CUNA after the chair's announcement, NCUA Vice Chair Rick Metsger said he supports Matz's position. He stated that with the arrival of the holiday season, he and his senior policy advisor want to make sure all have an time to evaluate the "voluminous material" associated with a new plan.

He said that putting the RBC discussion on the January meeting agenda, rather than December as some were anticipating, "allows all three board members two months to evaluate the final proposal and make suggested changes before it is presented."

The third NCUA board member, J. Mark McWatters, was sworn into his post at NCUA in late August. He also has voiced support for a 90-day comment period. He told CUNA that he will carefully review and analyze the revised proposed risk-based capital rule once he receives it. 

Earlier this month he outlined his areas of focus for revised RBC plan.

"We asked the chairman to allow us to present this in January and she totally understood, agreed, and moved forward," Metsger told CUNA. Matz had indicated in a Nov. 19 letter to Sens. Debbie Stabenow (D-Mich.) and Thad Cochran (R-Miss.) that a revised risk-based capital plan could be issued by the NCUA "before the end of 2014." Her letter to the senators responded to the lawmakers' concerns that a new plan keep in mind any potential effects on agricultural lending. (News Now Nov. 24)

In making the timing announcement Friday, Matz said, "During the six months since the comment period closed on the original proposed rule, we've taken the time to carefully review and methodically evaluate the many thoughtful comments received from stakeholders.

"We've also considered the input received during three Listening Sessions across the U.S. this summer. We're getting closer to issuing the revised proposed rule, which I now anticipate will be presented in January 2015--one year since the original proposed rule.

"To provide the public ample time to review this important safety and soundness rulemaking, I intend to support a 90-day comment period," she added.

CUNA has strongly advocated for a reasonable comment period of at least 60 days, given the amount of structural changes that had been mentioned by NCUA, including longer implementation period and revised risk weights for mortgages, investments, member business loans, credit union service organizations and corporate credit unions.

More than 2,000 comments were received from credit unions, members of the U.S. Congress and other stakeholders during the proposal's original comment period.

(Editor's note: This article is reprinted from the Nov. 24 issue of News Now.) ReadMore

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Huffington announced for CUNA GAC: Senate will be in session

Washington
WASHINGTON (11/25/14)--Entrepreneur Arianna Huffington will speak at the Credit Union National Association's 2015 Governmental Affairs Conference (GAC), scheduled for March 8-12 in Washington, D.C.

The Senate will also be in session during the GAC, according to the 2015 schedule released by incoming Senate Majority Leader Sen. Mitch McConnell last week.

"Efforts to reach out to Congress during the GAC will be strong, despite the release last week by the House majority leader of a schedule showing the House out of session during the conference," said CUNA President/CEO Jim Nussle. "The Senate will be in session during those dates, and key House and Senate staff members will certainly be on the Hill. Our meetings with these professionals have traditionally been very valuable."

Huffington is the co-founder and current editor-in-chief of The Huffington Post. She has written more than a dozen books, and her latest debuted at No. 1 on The New York Times bestseller list. She also heads a public interest group dedicated to alternative-fuel cars, is a board member for the Center for Public Integrity and ran as an independent candidate for governor of California in 2003.

Huffington was named to the TIME 100 in 2011, Vanity Fair's 2011 Powers That Be list; Fast Company's list of the 100 Most Creative People in Business; Financial Times' 50 Faces That Shaped the Decade, Newsweek's Top 10 Thought Leaders of the Decade, and Forbes' Most Influential Women in the Media (2012) and The World's 100 Most Powerful Women (2012 and 2013).

Last week it was announced that Stanley McChrystal, retired U.S. Army general and former commander of U.S. and international forces in Afghanistan, would also speak at the conference.

"There is plenty going on at the GAC, and I hope to see a large portion of the credit union community join us to take part in the full range of activities and advocacy on behalf of credit unions," Nussle said.

More than 4,000 credit union stakeholders are expected to attend the conference, which will be held at the Walter E. Washington Convention Center. Registration for the GAC is currently open.

(Editor's note: This article is reprinted from the Nov. 24 issue of News Now.) ReadMore

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Things get hairy at CUs during Movember

CU System

HIGHTSTOWN, N.J. (11/25/14)--Tuck away the electric razors and trimmers, as credit unions and their male staff members grow out their facial hair for "Movember," a month-long event dedicated to raising awareness for men's health.

New Jersey Credit Union League President/CEO Greg Michlig took the Movember challenge along with other league staff and New Jersey credit union leaders. If all of the New Jersey participants steer clear of razors until Sunday, the league will donate $1,000 to the Movember Foundation. (New Jersey Credit Union League Photos)

The month also encourages fundraising for prostate cancer, testicular cancer and mental health programs.

The New Jersey Credit Union League has decided to take an especially proactive role this year, with Greg Michlig, league president/CEO, John Hendery, league business consultant, and Austin Rigby, the league's fall intern, shelving the shavers in hopes that member credit unions will take up the cause with them (The Daily Exchange Nov. 20).

"As Thanksgiving weekend and the final days of Movember coincide ... I encourage all to reflect on the things for which we are MOst thankful and also bring awareness to issues that matter MOst," Michlig wrote in The Daily Exchange.

The league will donate $10 to the Movember Foundation for each person, or "Mo Bro," who participates in the event. The league also will donate $1 for each day each participant doesn't shave.  

So far, the league has had 25 participants from New Jersey credit unions sign up, including a number of staffers from Aspire FCU, Clark, with $183 million in assets; Essex County Teachers FCU, Bloomfield, with $14 million in assets; Garden Savings FCU, with $292 million in assets; and Rutgers FCU, New Brunswick, with $82 million in assets.

If each participant remains unshaven for the full 30 days in November, it will amount to a $1,000 donation from the league to the cause.

Affinity FCU, Basking Ridge, with $2.3 billion in assets, has 12 employees participating. The group has been divided into two groups called Team Joe and Team John. The two teams are competing to raise money to support free prostate cancer screenings at Rutgers Cancer Institute of New Jersey.

Follow the progress of those participating in the league's event on its Facebook page. Mo Bros also can participate on Twitter using the month's universal hashtags #Movember or #Movember2014.

ReadMore

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Conforming loan limits to remain at $417K in 2015, says FHFA

Washington
WASHINGTON (11/25/14)--Maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain unchanged in most of the country, the agency announced Monday. The limit will be $417,000 for one-unit properties.

The limits are established under the terms of the Housing and Economic Recovery Act (HERA) and are calculated each year. HERA sets maximum loan limits as a function of median home values. 

Loan limits will rise in 46 counties because those counties experienced increases in local home values. Although other counties experienced home value increases in 2014, after other elements of the HERA formula were accounted for the local-area limits were left unchanged, according to FHFA.

The Credit Union National Association urged FHFA Director Mel Watt not to reduce the loan limits.

A list of the 2015 maximum conforming loan limits for all counties and county-equivalent areas in the country has been posted to the agency's website. ReadMore

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CUs honored with national Maxwell awards for social responsibility

CU System
MADISON, Wis. (11/25/14)--The Credit Union National Association's National Awards Committee recently selected the recipients of the 2014 Dora Maxwell Social Responsibility Community Service Award. The awards, which are given in several credit union asset sizes, were selected among the winning entries at a league level.
 
Dora Maxwell was an original signer of CUNA's constitution and a tireless organizer of hundreds of credit unions throughout the United States. She also developed volunteer organizer clubs and worked diligently with organizations on behalf of the poor.
 
The Maxwell Award is presented to credit unions and a chapter of multiple credit unions for outstanding social responsibility projects in their communities. Activities may include: solving core community problems, coordinating supply drives for the needy, raising money or organizing special events for charitable organizations, or mentoring students.
 
Credit unions recognized include:
 
$5 million to $20 million in assets:
  • First place: Virginia United Methodist CU, Glen Allen, Va., with $19 million in assets; and
  • Second place: Clarence (N.Y.) Community & Schools FCU; with $20 million in assets.
 $20 million to $50 million in assets:
  • First place: Casco FCU, Gorham, Maine, with $47 million in assets;
  • Second place: Financial Health FCU, Indianapolis, with $29 million in assets; and
  • Honorable mention: Cove FCU, Edgewood, Ky., with $46 million in assets.
 $50 million to $100 million in assets:
  • First place: Natco CU, Richmond, Ind., with $69 million in assets;
  • Second place: Voyage FCU, Sioux Falls, S.D., with $75 million in assets; and
  • Honorable mention: HealthCare First CU, Johnstown, Pa., with $59 million in assets.
 $100 million to $200 million in assets:
  • First place: Lake State CU, Moose Lake, Minn., with $188 million in assets;
  • Second place: Assemblies of God CU, Springfield, Mo., with $141 million in assets; and
  • Honorable Mention: Mid Oregon FCU, Bend, Ore.; with $185 million in assets.
 $200 million to $500 million in assets:
  • First place: Credit Union of New Jersey, Ewing, N.J., with $333 million in assets;
  • Second place: Merck Sharp & Dohme FCU, Chalfont, Pa., with $529 million in assets; and
  • Honorable mention: Five County CU, Bath, Maine, with $216 million in assets.
 $500 million to $1 billion in assets:
  • First place: FAA CU, Oklahoma City, with $563 million in assets;
  • Second place: Alabama CU, Tuscaloosa, Ala., with $640 million in assets; and
  • Honorable mention: Credit Union 1, Anchorage, Alaska, with $893 million in assets.
More than $1 billion in assets
  • First place: MECU of Baltimore, with $1.2 billion in assets;
  • Second place:  Indiana Members CU, Indianapolis, with $1.4 billion in assets; and
  • Honorable mention: Desert Schools FCU, Phoenix, with $3.8 billion in assets.
Credit union chapters or multiple credit union groups:
  • First place: Utica-Rome (N.Y.) Credit Union Chapter;
  • Second Place: Sioux Falls (S.D.) Area Credit Unions; and
  • Honorable mention: Kansas City (Mo.) Chapter of Credit Unions.
News Now will publish the national winners of the Louise Herring Philosophy in Action Award and the Desjardins Financial Education Award programs in upcoming issues. ReadMore

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Dykstra receives AACUL Eagle Award, Lyons re-elected chairman

CU System
WASHINGTON, D.C. (11/25/14)--Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, received the American Association of Credit Union Leagues' (AACUL) highest honor--the Eagle Award--at the organization's annual meeting last week.
 
AACUL members also elected their board during the annual meeting.
 
Mike Mercer, president/CEO of the Georgia Credit Union Affiliates and member of the Eagle selection committee, presented the award to Dykstra, who has led the leagues for four years.
 
The Eagle Award, which has been presented only 20 times, is bestowed on a league president who:
  • Has an outstanding record of achievement at the league level;
  • Is willing to speak out and take a stand on critical, controversial issues;
  • Demonstrates leadership beyond the league level;
  • Is innovative in creating or implementing new ideas; and
  • Maintains an unremitting dedication to credit union and personal principles, and an unflagging focus on important issues.
Mercer lauded Dykstra's leadership for her focus on constant improvement, on pushing forward to improve what is good to be even better; not being afraid to "rock the boat" by taking controversial stands; her commitment to member engagement; and her constant search for collaboration opportunities that are in the best interest of the entire movement. 
 
He specifically cited:
  • California and Nevada's more than 500,000 congressional contacts during the movement's Don't Tax My Credit Union campaign;
     
  • The creation of PowerComment and subsequent partnership with the Credit Union National Association to take the program nationwide; and
     
  • Her leadership to create Plexity, a partnership among her leagues, the New Jersey Credit Union League and the Maryland and D.C. Credit Union Association with a mission to consolidate back office operations of the four organizations to reduce costs, while maintaining the identify and uniqueness of each of the states.
"While Diana has been a league president for just four years, she has already had a significant impact in California and Nevada along with CUNA and all 42 leagues," said AACUL Executive Director Susan Newton.
 
AACUL Chairman Wendell Lyons said, "I cannot think of a better person to receive this high honor from our association."

Dykstra was elected to AACUL's executive board, replacing Carolinas Credit Union League President/CEO John Radebaugh who stepped down after six years on the board.
 
Lyons, who is president/CEO of the Kentucky Credit Union League, was re-elected as chairman. Other members of the board are:
  • First vice chairman: Tracie Kenyon, president/CEO, Montana Credit Union Network;
  • Second vice chairman: Mark Cummins, president/CEO, Minnesota Credit Union Network; and
  • Treasurer: Scott Simpson, president/CEO, Utah Credit Union Association.
Ex officio members are Newton and immediate past chairman Bill Mellin, president/CEO, Credit Union Association of New York.

(Editor's note: This article is reprinted from the Nov. 24 issue of News Now.) ReadMore

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Colo. authorities OK first-ever marijuana-focused CU

CU System
DENVER (11/25/14)--The Colorado Division of Financial Services (CDFS) approved an unconditional state charter for The Fourth Corner CU last week, setting the stage for the establishment of the first-ever credit union that will serve the marijuana industry (Denver Post Nov. 20).

With the charter in hand--the first issued by the CDFS in nearly a decade--the only hurdles left in Fourth Corner's way are to obtain insurance from the National Credit Union Administration, and to receive a master account from the Federal Reserve System.

While the NCUA review could take up to two years, according to Mark Mason, one of the marijuana credit union's key organizers, the credit union may begin operations starting Jan. 1, as Colorado law permits credit unions to open their doors while an application for share-deposit insurance is pending. 

The credit union would serve all marijuana-related businesses, such as growers and transportation companies that support the industry, and also those legal enterprises that sell it at retail shops.

The Mountain West Credit Union Association (MWCUA) has been monitoring the development of the state's first marijuana-industry credit union, and plans to stay apprised as the process with the NCUA and federal regulators unfolds.

"Ever since Amendment 64, legalizing the recreational use of marijuana in Colorado, was passed and went into effect, we have been monitoring the challenge of providing financial services to businesses in this industry," said MWCUA President/CEO Scott Earl in a statement to News Now. "While this first-of-its-kind charter would serve legal marijuana businesses in Colorado, it will be some time before we know if the credit union has approval from the NCUA for deposit insurance."

Mason said federal regulators will likely pay special attention to the credit union's business plan, the insurance and a fidelity bond, and its safety and soundness.

"We are building a whole new structure to deal with an industry that still violates federal law," Douglas Friednash, who incorporated the credit union soon after the charter was approved, told the Denver Post. Federal law enforcement and bank regulators can still punish the industry, and until that gets resolved, it will continue to have a cloud over it, he said.

(Editor's note: This article is reprinted from the Nov. 24 issue of News Now.) ReadMore

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CUNA CFO Council accepting applications for inaugural CFO Award

CU System
MADISON, Wis. (11/25/14)--CUNA Councils announced Monday that applications for the inaugural CFO Awards, hosted by the CUNA CFO Council, are now available. The new CFO Awards will honor credit unions and individuals demonstrating financial management excellence.
 
"Without proper financial management, credit unions would be unable to function and make an impact in their members' lives," said John Meeker, CFO Council membership committee chair and senior vice president/chief financial officer, Caltech Employees FCU in La Canada Flintridge, Calif., with $1.2 billion in assets.

"It's for that reason that we feel it is especially important to honor those responsible with the finance awards for all the hard work they put in. There is no better way to show your appreciation than to nominate your team members for an Excellence in Finance or CFO Professional of the Year Award," Meeker added.
 
The Excellence in Finance Awards will recognize finance departments with innovative solutions and successful approaches in financial management. The awards will honor achievements in board education, collaboration, credit risk management, expense reduction and control, financial literacy, portfolio management, interest-rate risk management and project management. Entry materials are due March 20.
 
The CFO Professional of the Year Award recognizes an individual who consistently exemplifies excellence in credit union financial management. Nominations must be submitted by Feb. 27, and entry materials are due April 1.
 
The award winners will be announced and receive the awards at the 2015 CUNA CFO Council Conference in New Orleans on May 17-20. ReadMore

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