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September 19, 2014

TCCUSF update, tech amendments approved by NCUA

Washington
ALEXANDRIA, Va. (9/19/14)--A light agenda greeted new National Credit Union Administration board member J. Mark McWatters Thusday for his first monthly board meeting.

The meeting consisted of a report on the Temporary Corporate Credit Union Corporate Stabilization Fund, during which NCUA again stated there will be no assessment this year and future assessments are also highly unlikely, some technical amendments and the approval of a community charter expansion.

The Corporate Stabilization Fund currently stands at $51.2 million, a $91.6 million improvement from the $40.4 million deficit at the end of the first quarter. This is the first positive balance for the fund.

Mary Ann Woodson, chief financial officer of the NCUA, said the improvements to the fund are due primarily legacy assets from the agency's Guaranteed Notes Program, as well as recent corporate credit union litigation settlements.
Click to view larger image New NCUA board member J. Mark McWatters listens to a presentation from NCUA Associate General Counsel Frank Kressman at the board's monthly meeting Thursday. (CUNA Photo)

"Based on information we have at this time, the fund remains stable and is acting consistent with our expectations," Woodson said.

NCUA Chair Debbie Matz added that rebate possibilities cannot be addressed until final accounting on the fund is done, which would likely be in 2020 or 2021.

The board unanimously approved technical amendments to parts 701, 706 and 790 of the agency's rules and regulations.

The changes are:
  • A repeal of the NCUA's rulemaking authority governing unfair or deceptive acts or practices, located in 12 CFR part 706, due to the Dodd-Frank Act;

  • An amendment to part 790 of the agency's rules and regulations, which conforms them to the NCUA's current central and field office structures; and

  • Amending the agency's payday alternative loans regulation to replace the terms "short-term, small amount loans" and "STS loans" with the terms "payday alternative loans" and "PAL loans."
Frank Kressman, associate general counsel for the NCUA, said because the rule is "non-substantive and technical," it is exempt from the notice and comment period provisions in the Administrative Procedures Act.

The rules will be considered final once they are published in the Federal Register .

The meeting also included approval of expansion of the community charter for First Service FCU, Groveport, Ohio, with $136 million in assets. The expansion will allow it to serve people who live, work, worship or regularly conduct business in Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Pickaway and Union counties.

"Approval of this expansion would provide access to credit union services to an additional 115,000 people residing in 189 census tracts in underserved areas," said Leilani Stamper, NCUA consumer access analyst. "Members will benefit from the credit union's no monthly service fee checking account program, short-term loans, shared secured Visa and financial literacy and education programs."

First Service FCU was first chartered by the NCUA in 1956 as Lockbourne FCU, to serve Lockbourne Air Force Base. It converted to a community charter in 1984 to serve a portion of Columbus, Groveport, Canal, Winchester, Pickerington and Rickenbacker Industrial Park. In 1999, its charter was expanded to serve Franklin County, Ohio.

The NCUA also announced Thursday that the board unanimously voted to name Rick Metsger board vice chair. Mestger was first nominated for the NCUA board in May 2013, and his term will expire in August 2017.

Use the resource link below to access the board documents from Thursday's meeting. ReadMore

Fed plans no debit fee cap change

Washington
WASHINGTON (9/19/14)--The Federal Reserve Board Thursday said it will not propose any changes to its cap on debit card interchange fees. The Fed said the decision is based on results of its survey of costs associated with debit card transactions, a survey it executes every two years.
 
This most recent survey, based on 2013 data, indicates that 64% of card issuers covered by the Fed's interchange fee rules had an average cost for authorizing, clearing and settling (ACS) transactions that fell below the Fed's cap.
 
Implementing a provision of the 2010 Dodd-Frank Act, the Fed set a cap on debit interchange fees for issuers with assets of $10 billion or more at 21 cents, and allows certain other charges to cover fraud losses and fraud prevention.

The 64% is "slightly lower than the 66% of covered issuers with average ACS costs below the maximum interchange fee in 2011," the Fed noted in Thursday's release. "Covered issuers with average ACS costs below the maximum interchange fee in 2013 processed over 99% of all reported covered transactions, the same proportion as in 2011."

Also in the report, the Fed estimates that debit-card fraud losses to all parties--merchants, cardholders, and issuers--was $1.57 billion in 2013, with an average loss of approximately 8 basis points as a share of transaction value. That was up slightly from 2011.

Use the resource link to access the Fed release and access the survey. ReadMore

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Carolinas league asks for 2nd RBC comment period

Washington
RALEIGH, N.C. (9/19/14)--John Radebaugh, president/CEO of the Carolinas Credit Union League (CCUL), has written to the National Credit Union Administration to request a second comment period on the agency's risk-based capital (RBC) proposal.

In his letter, sent earlier this week, Radebaugh expressed CCUL's support of a more comprehensive RBC effort but said the current proposal could "negatively impact the credit union system by jeopardizing member access to competitive and safe financial products and services."

The letter cites the more than 2,000 comment letters received by the NCUA, including those from more than 350 members of Congress. It also mentions the agency's previously stated willingness to revise risk weightings, which could have an impact on credit unions' strategic planning.

"Through the comment period and beyond, the NCUA has responded to inquiries, acknowledged necessity of changes to the revised rule and participated in ongoing conversations with credit union stakeholders, actions that indicate NCUA's awareness that revisions to the RBC rule will have a significant impact on the industry," Radebaugh wrote. "Given the strength of the credit union system, there is no dire need for rapid adoption of a final risk-based capital structure."

The CCUL believes that the issuance of a supplemental rule with a comment period would be "most appropriate" and in the best interest of the credit union system. ReadMore

CFPB has mortgage scammers, nonbank auto lenders on radar

Washington
WASHINGTON (9/19/14)--The Consumer Financial Protection Bureau is proposing to oversee nonbank auto finance companies, and it also announced a lawsuit against an online payday lender this week.

The bureau also released a supervision report that details auto lending discrimination against banks, resulting in approximately $56 million in redress for as many as 190,000 consumers.

The proposed rule would allow the bureau to supervise nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases in a year. The CFPB would be supervising them to ensure they are complying with federal consumer financial law.

According to CFPB estimates, about 38 auto finance companies would be subject to this new oversight. These companies originate around 90% of nonbank auto loans and leases, and in 2013 provided financing to approximately 6.8 million consumers.

Currently, the bureau supervises large banks making auto loans, but not nonbank auto finance companies. Under the Dodd-Frank Act, it has authority to supervise certain nonbanks the bureau defines through rulemaking as "larger participants" in a market.

The bureau's report details auto-lending discrimination uncovered at banks under CFPB supervision over the past two years.

Examiners found that these indirect auto lenders had discretionary pricing policies that resulted in discrimination against African-American, Hispanic, Asian and Pacific Islander borrowers. As a result, these borrowers paid more for their auto loans than similarly situated non-Hispanic white borrowers.

The CFPB announced in a separate statement that it is taking action to halt operations of an online payday lender. The bureau alleges that the Hydra Group is running an "illegal cash-grab scam," using information bought from online lead generators to access consumers' checking accounts to illegally deposit payday loans and withdraw fees without consent.

According to the CFPB, the Hydra Group then uses falsified loan documents to claim that the consumers had agreed to the phony online payday loans.

At the request of the bureau, a U.S. District Court judge has temporarily ordered a halt to the operation and frozen Hydra Group's assets. The lawsuit also seeks to return the ill-gotten gains to consumers and levy a fine on the company.

Use the resource links below for more information. ReadMore

NCUA's McWatters says new RBC comment period is needed

Washington
WASHINGTON (9/19/14)--National Credit Union Administration board member J. Mark McWatters, in a meeting with senior Credit Union National Association staff Thursday, confirmed that he would not vote in favor of any risk-based capital (RBC) proposal if it does not include a second comment period.

CUNA interim President/CEO Bill Hampel, along with General Counsel Eric Richard and Deputy General Counsel Mary Dunn, met with McWatters after the NCUA's monthly board meeting today.

McWatters, who joined the NCUA board in August, told the CUNA officers that he supports a second comment period for the agency's RBC proposal out of respect for the credit union industry and because of the bipartisan support given credit union concerns by members of the U.S. Congress.

The Thursday meeting was the latest in CUNA's advocacy efforts regarding the risk-based capital proposal. CUNA staff also met with NCUA board member Rick Metsger on the subject yesterday.  One of CUNA's top priorities is to see a second comment period for a revised version of the rule, a version that takes into account concerns raised by the more than 2,000 comment letters submitted to the NCUA.

CUNA's efforts have included:
  • Filing a 47-page comprehensive comment letter with the agency May 28, detailing the many concerns CUNA has with the proposal;
  • Advocating for changes, including the second comment period, in individual meetings between CUNA staff and NCUA chair Debbie Matz, board members Rick Metsger and McWatters and past board member Michael Fryzel;
  • Meeting with NCUA senior staff to express the same concerns;
  • Testifying before the House Financial Services committee July 17 and the Senate Banking Committee Sept. 16;
  • Discussing the need for a second comment period with members of Congress, who in turn have included it in their letters to the agency. More than 350 members of Congress have signed or written a letter to the NCUA regarding the risk-based capital proposal; and,
  • Addressing the need for a second comment period in in CUNA briefings of credit union league Hike the Hill visits and in league briefings before the three agency Listening Sessions during the summer.
ReadMore

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Business Rates

Market
Daily Financial Rates -- 2014-09-19

Financial Rates


Friday, September 19, 2014

03:55 AM CDT

TREASURY YIELD CURVE
(based on the $1 million market)

TermFri
9/19
Thu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
1 month0.010.010.010.010.01
3 month0.020.020.020.020.02
6 month0.040.050.040.050.05
1 year0.120.120.130.110.11
2 year0.590.590.550.580.58
3 year1.101.081.041.061.07
5 year1.851.821.781.801.83
7 year2.322.292.262.262.29
10 year2.632.622.602.602.62
20 year3.123.123.113.093.10
30 year3.363.373.363.343.35

TREASURY BILLS

Results of the September 15, 2014 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million

TermLatest
Mon, 9/15
Week Ago
Mon, 9/8
13 weeks0.0150.020
26 weeks0.0450.045

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermFri
9/19
Thu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
high0.3120.3120.3120.3120.312
low0.0600.0700.0700.0500.050
near closing bid0.0800.0700.0800.0800.080
offered0.2800.2800.2800.1000.270
effective rate20.1000.1000.1000.1000.100

FREDDIE MAC (Mortgage commitments, 30 days)

TermFri
9/19
Thu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermFri
9/19
Thu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
30 year3.8813.8583.8553.8703.842

LIBOR

TermFri
9/19
Thu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
1 month0.213000.213000.212000.214000.21000
3 month0.371000.369000.366000.365000.36300
6 month0.540000.537000.536000.539000.53900
1 year0.846000.846000.845000.845000.84500

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
9/16
Week ended
9/9
90 days0.230.23

NA: Data not available at time of page generation (shown at top of page)

Sources:
Wall Street Journal
U.S. Dept. of the Treasury


All rates are from the previous business day unless otherwise noted. ReadMore

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Housing starts slide 14.4% in Aug.

Market
WASHINGTON (9/19/14)--After swelling in July, housing starts dropped by 14.4% in August to 956,000, according to numbers from the Commerce Department Thursday.

The biggest decline came in multifamily, or apartment construction starts, which fell by 31.5% for the month. Single-family starts slid 2.4% in August, but are still up 4.2% year-over-year ( Economy.com Sept. 18 ).
Overall starts remain 8.3% above their year-ago levels as well.

"Regionally, the decline in housing starts was broad-based, with all four census regions showing monthly declines," said Andres Carbacho-Burgos, Moody's analyst ( Economy.com ).

Housing completions, meanwhile, climbed 3.2% in August up to 892,000, which is 16.9% higher than the pace seen this time last year. The gain was driven by multifamily completions, however, as single-family completions fell.

Privately owned housing permits dropped by 5.6% from July to 998,000, but remain 5.3% higher than last year.

Despite the weaker data in August, many analysts chalk it up to mere volatility in the housing market.

"Overall, the weakness in this report reflects the expected giveback from the unexpected surge in activity the month before, and is not an indication of weakening underlying momentum in the sector," Millan Mulraine, deputy head of U.S. research and strategy for TD Securities, said ( MarketWatch.com Sept. 18). ReadMore

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Consumer Rates

Market

Informa Research Services, Inc.
Daily Rate Comparison

Informa Research Services, Inc.
Deposit Products Credit Unions Bank Average Difference
12 Month CD $10,000 0.46% 0.28% 0.18%
Personal Savings $1,000 0.20% 0.10% 0.10%
Personal Interest Checking $2,500 0.36% 0.15% 0.21%
NSF Fee $27.90 $32.03 $-4.13
Personal MMDA $2,500 0.17% 0.10% 0.07%
Business MMDA $2,500 0.17% 0.09% 0.08%

Consumer Loan Products Credit Unions Bank Average Difference
Unsecured Personal Loan - $5,000 - 4 Years 10.16% 10.33% -0.17%
New Auto Loan - 5 Years 2.61% 3.82% -1.21%
Used Auto Loan - 2 year Old - 4 Years 2.77% 4.02% -1.25%
HELOC - 80% LTV - $50,000 4.13% 4.41% -0.28%
HE Loan - 80% LTV - $50,000 - 15 Years 5.66% 5.95% -0.29%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 4.24% 4.30% -0.06%
30 Year Fixed Jumbo 4.31% 4.29% 0.02%
5/1 Year ARM Conforming 2.94% 2.94% 0.00%

Credit Card Products Credit Unions Bank Average Difference
Platinum 9.01% 10.48% -1.47%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.95 $33.42 $-7.47
Reward 9.99% 13.66% -3.67%
Annual Fee $26.71 $99.74 $-73.03
Maximum Late Fee $22.66 $33.72 $-11.06

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.78% -0.18%
Indirect B Tier New Auto Loan - 5 Years 5.32% 5.32% 0.00%
Indirect C Tier New Auto Loan - 5 Years 7.49% 6.77% 0.72%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Thursday, September 18, 2014. For detailed disclosures click here.

ReadMore

Other Resources

League-backed data protection bill on N.J. docket

CU System
TRENTON, N.J. (9/18/14)--Data breach protection and electronic lien/titling (ELT) bills, two legislative priorities for the New Jersey Credit Union League, were introduced in the state Senate this week.
 
Thursday, the Assembly Financial Institutions and Insurance Committee considered league-supported legislation (A1239), sponsored by Assembly Speaker Vincent Prieto (D-Seacaucus), that would prohibit a retail sales establishment from retaining or storing magnetic-stripe data obtained from a credit or debit card after a sales authorization request has been answered ( The Daily Exchange Sept. 18).
 
The bill also provides that a business or public entity responsible for a security breach will be liable to a card issuer for the costs incurred in protecting customers' personal information or providing on-going financial services to impacted customers.
 
A companion bill (S965), sponsored by Sen. Shirley Turner (D-Mercer, Hunterdon), is pending committee consideration in the upper house.
 
On Monday, Sen. Linda Greenstein (D-Cranbury) introduced a Senate companion bill (S2423) to league-supported Assembly legislation (A3211) that would require the New Jersey Motor Vehicle Commission (MVC) to establish an ELT system to replace the state's paper-based system.
 
Introduced in May, the Assembly bill is sponsored by Assemblymen Craig Coughlin (D-Woodbridge), chairman of the Assembly Financial Institutions and Insurance Committee.
 
This legislation requires the MVC to complete a study that will determine whether it has the resources and capability to establish and implement ELT within one year of the bill's enactment. If the chief administrator determines that the commission does not have the necessary resources and capabilities, the commission must contract with a qualified private-sector ELT provider.
 
The bill also mandates that within one year of the date that ELT becomes operational, all lien holders must participate in the system, except individuals and those lien holders who are not normally engaged in the business of financing motor vehicles and are administratively exempted by the MVC. ReadMore

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CU employee for the day: PCUA's Conway

CU System
DANVILLE, Pa. (9/19/14)--Members strolling into Service 1st FCU, Danville, Pa., on Wednesday may have encountered a friendly but unfamiliar face at the teller window: That of Pennsylvania Credit Union Association President/CEO Pat Conway.

Pennsylvania Credit Union Association President/CEO Pat Conway shadows Nicole Hoyes, assistant branch manager at Service 1st FCU, Danville, as an employee of the credit union for the day. (Pennsylvania Credit Union Association Photo)
The $234 million-asset credit union offered Conway an opportunity to experience a day as an employee of the credit union, and Conway took advantage by dabbling in a number of different roles ( Life is a Highway Sept. 18).

At the outset of the day, Conway was greeted by Bill Lavage, Service 1st's president/CEO, and joined him for a meeting with the credit union's leadership team for a discussion on the important business items for the day and an overview on the progress of several upcoming and long-term projects.

After the meeting, Conway met with the credit union's branch managers to discuss operation strategies, cooperative support and meeting member needs.

When shadowing Nicole Hoyes, assistant branch manager at the Corporate Center office in Danville, Conway experienced how employees interact, educate and provide service to Service 1st members.

"One of the things I love must about credit unions is our collective passion for improving our members' financial lives," Conway said.

At the end of the day, Conway sat down with Brett Johnson, vice president of lending, to learn about what strategies, techniques and challenges credit unions face when providing member service.

Conway said the day provided first-hand experiences that allowed him to gain an even better understanding of the association's membership. ReadMore

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Look here: Last day to submit News Now survey

CU System
WASHINGTON (9/19/14)--"If you haven't taken the News Now survey yet, today is the day to tell us what you think," says Lisa McCue, CUNA vice president of communications and News Now editor.

Noting that the survey closes tonight, McCue says, "The News Now writers and editors really want to hear from all our readers about what works well in News Now and what changes could enhance our readers' experience.  Please let us know what you think."

News Now , the daily online news publication from the Credit Union National Association.
 
Please submit the survey only once. If you completed the survey sent by email earlier this week, thank you for your participation.
 
Respondents may enter a drawing for a $50 Amazon gift card. Use the link to access the survey.
ReadMore

ECCU's free e-book clarifies credit score mystery

CU System
KALAMAZOO, Mich. (9/19/14)--To help its members navigate the often murky waters of building solid credit, Educational Community CU, Kalamazoo, Mich., has produced an educational e-book called "A Comprehensive Guide to Your Credit Score."

The book illustrates how critical credit can be in everyday life, and teaches individuals what a credit score is, why it's important and what factors cause it to rise and fall.

"The public is barraged daily with messages about credit, ranging from free credit to no money down, or easy preapprovals," said Jeff DeShane, vice president of lending for the $414 million-asset credit union. "As a financial institution, it's up to us to take a responsible role to educate our members and community about the wise use of credit."

Readers also are taught why it's important to check their credit reports on a regular basis, how to correct errors, and what steps to take to ramp up poor scores.

The e-book is part of a broader array of financial literacy initiatives undertaken by Educational Community, as the credit union also has launched credit seminars in area high schools for upperclassmen to prepare them for their financial futures.

Those efforts soon will be expanded to communitywide programs for participants of all ages, according to DeShane.

"With our educational roots, it only makes sense to take this approach to serving our members," DeShane said. "While we can't always approve every member for a loan, we can offer a plan to help improve their credit score so they can hopefully secure a loan in the future." ReadMore

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Herring legacy carried forward with merger

CU System
CINCINNATI, Ohio (9/19/14)--At the end of the day, the planned merger between Cincinnati Arts CU and Cincinnati Central CU is about what's in the best interest of the members, the CEOs of both credit unions are quick to note.
 
Click to view larger image Louise McCarren Herring helped found more than 500 cooperatives. Saturday marks her 105th birthday. (Communicating Arts CU Photo)
But the story behind the merger--and the story behind the history of the credit unions--is about family.
 
Bill Herring, president/CEO of $93.5 million-asset Cincinnati Central CU, and Catherine Herring, president/CEO of $61 million-asset Communicating Arts CU, are brother and sister. Both will retire when the credit union merger is final April 15.
 
What's more, both credit unions were founded by their mother, credit union pioneer Louise McCarren Herring, who also had a hand in establishing roughly 500 other cooperatives. Saturday, Sept. 20, marks what would have been Louise McCarren Herring's 105th birthday.
 
Despite the trail their mother blazed and the legacy she left behind, neither Bill nor Catherine set out to follow in her footsteps. Bill had applied for the Peace Corps upon graduation from college when he temporarily took over management duties of Cincinnati Central at his mother's request in 1969.
 
Catherine similarly started her career on a "temporary" assignment 40 years ago. She took over the president/CEO role of the Communicating Arts CU in 1987.
 
Discussions of the merger began as Bill and Catherine both contemplated retirement within the past couple years.
 
Click to view larger image Bill Herring, president/CEO of $93.5 million-asset Cincinnati Central CU, left, and Catherine Herring, president/CEO of $61 million-asset Communicating Arts CU, are brother and sister. Both will retire when credit unions merge April 15. The credit unions were founded by their mother, Louise McCarren Herring. (Communicating Arts CU Photo)
The two credit unions have more than a family connection. They've shared the same building since 1987.  They share the same data processing and online banking platform, operating under a credit union service organization formed in 1999. Employees of the credit unions even share lunch room and training space.
 
"More than a year ago, I started talking to the board about what the long-term future of the credit union is, recognizing that it isn't me," Catherine told News Now . "Having been here 40-some years, I've been here in the long-term past and the present, but I'm certainly not the long-term future. So we had a very conscious and deliberate conversation that progressed each month though our board meetings, brought in advisers and talked about options."

Bill was also eyeing retirement from his position has president/CEO at Cincinnati Central. Add to the mix a costly upcoming home-banking conversion, and a merger started to look like an attractive option for both credit unions.

"I draw an analogy that there were three trains going on three tracks at different speeds, and not always with an awareness of what the others were doing," Catherine told News Now . "But it was never a foregone conclusion that we would merge. As conversation evolved, here was a unique opportunity to consider."

"They talked to us first, and I think it made a lot of sense for both memberships," Bill told News Now.

The credit unions will approach the merger as a partnership of equals. While Cincinnati Central will be the surviving credit union, the new institution will take on a new brand.

"There's much more enthusiasm for the idea of being part of something new," Catherine said. "To be honest, my board didn't have a lot of enthusiasm about just being part of something bigger. This way, we're taking the history and tradition of both credit unions and forming something new. That's very exciting for everyone involved."
 
But most importantly, both say the merger will serve the best interests of the memberships going forward.
 
"The cost of business continues to increase, and there's not a lot of ways to influence that outside of scale," Catherine said.
 
And both are certain their mother would be delighted with the merger.
 
"It was always about the member," Bill said. "She believed strongly in the individual dignity of each member regardless of economic status. You need the economic resources to maintain that standard in this day and age, especially in this climate when margins are so thin."
 
"My mother believed strongly in collaboration and cooperation among cooperatives, and she believed strongly that credit unions needed to offer modern products and services," Catherine explained further. "I think she would be delighted that these credit unions will only work more closely together and continue to provide products and services that our member-owners want, need and deserve." ReadMore

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Smacked by 100K compromised records, Maine CUs help members

CU System
MADISON, Wis. (9/19/14)--Credit unions nationwide are taking a proactive strategy in protecting members from any fraudulent activity resulting from the Home Depot data breach, which the retailer confirmed Thursday compromised 56 million unique payment cards.

In Maine, credit unions have issued thousands of new cards to protect members from possibly fraudulent charges. Banks have taken "a more measured approach," and not issued cards proactively, centralmaine.com reported.

Centralmaine.com also reported Thursday that a black market website is selling nearly 100,000 credit and debit card numbers stolen from Home Depot stores in Maine.
 
John Murphy, president/CEO of the Maine Credit Union League, said the situation in his state has been exacerbated by breaches at a series of local merchants in addition to Home Depot and other nationwide incidents.
 
"A combination of these large breaches as well as these breaches on small merchants have credit unions scrambling to do a couple things," Murphy told News Now . "One is to limit the fraud exposure. But more important is to be sure members continue to have access to their accounts while their cards are being reissued."
 
Visa Inc. and MasterCard have alerted thousands of card-issuing financial institutions to monitor their members' and customers' accounts for fraudulent transactions related to the Home Depot breach, The Wall Street Journal reported (Sept. 16).
 
Credit unions nationwide have already responded. Members of Westerra CU, Denver, with $1.2 billion in assets, who used their debit or credit cards at Home Depot store between April 1 and Sept. 7, will receive reissued cards, according to the credit union's website.
 
Our Community CU, Shelton, Wash., with $288 million in assets, also informed its membership that it has obtained a list of members' card numbers that have been affected by the Home Depot breach. Those members will be contacted and reissued new cards within 15 business days, according to a message on the Our Community CU website.
 
University FCU, Austin, Texas, with $1.7 billion in assets, is alerting members about card replacements on its website and in a recorded phone message, The Wall Street Journal reported. Debit cards used at Home Depot "during the compromised time frame" will be deactivated on Sept. 25. Credit cards used at the retailer will be deactivated on Sept. 30, the credit union said.
 
While its members have not experienced any fraudulent activity, Evansville (Ind.) Teachers FCU, with $993 million in assets, also is issuing new debit cards to its members proactively, WFIE-TV reported. Home Depot provided the credit union with a list of members who may be affected.

The Credit Union National Association is urging credit unions to record breach-related activity and costs as they receive and process breach notifications in the upcoming weeks. CUNA's upcoming survey will collect data to inform lawmakers, regulators, media and others about the effects of the data breach on credit unions.
 
The home improvement retailer confirmed Thursday that 56 million cards had been compromised, making it the largest data breach to date. Last year's Target breach affected 40 million cardholders.

Among the information CUNA will collect on the Home Depot breach:
  • Number of debit and credit cards affected;
  • Costs incurred for card reissuance;
  • Costs related to additional staffing, member notification, account monitoring, etc.;
  • Changes in call volume;
  • Changes in staffing; and
  • Any specifically identifiable fraud-related losses.
CUNA strongly advocates on behalf of legislation that would protect financial institutions and consumers from the harm such breaches caused by subjecting merchants to the same federal data protection standards to which credit unions and other financial institutions are already subject. ReadMore

Waiting game for CU after Weed, Calif., wildfire

CU System
YREKA, Calif. (9/19/14)--Residents of Weed, Calif., are sifting through the rubble after Monday's wildfire engulfed the small town, and the nearest credit union--Siskiyou Central CU--is on standby to help them recover.
 
"Our time is going to be after this when our members know their full loss and what their insurance will cover," Becky Ives, CEO of the $59 million-asset credit union, told News Now . "We are heartbroken at the devastation and loss."
 
The credit union's two branches in Yreka and Mount Shasta are within 25 miles of the town of 2,967.
 
The grass fire moved so quickly that residents barely had time to evacuate. "Some people had less than 10 minutes to get out of their house," Ives said.
 
Officials estimate that the fire destroyed 110 homes and damaged another 90 in the small northern California town ( Associated Press Sept. 18). Ives said she expected a huge loss of RVs and other vehicles too.
 
The Roseburg Forest Products mill is Weed's second-largest employer. Although the main processing area and facility were not destroyed, a number of buildings on the complex were damaged, the company reported.
 
Until Siskiyou Central knows how many members it will have to work with for loan modifications or extensions, it is providing "the littlest things," Ives said.
 
The two branches are serving as donation centers for pet food and supplies. It handed out 20 $50 gift cards to any victims who needed immediate help. Volunteers are standing by, waiting for the call for assistance.
 
"We're collecting information that people might need, too," Ives said, adding, "When people ask what is needed, it's things like can openers for all the donated canned food." ReadMore

CU System briefs (09/19/2014)

CU System
  • GRANDVILLE, Mich. (9/19/14)--Credit unions are known for going the extra mile for their members, but First United CU, Grandville, Mich., found out its message had gone even further--more than 1,000 miles . Nancy and Sanford Robinson, Foxcroft-Dover, Maine, found a First United balloon on their lawn Monday. Mark Richter, president/CEO of the $28 million-asset credit union, surmised the red balloon came from one of the events it sponsored this summer-- the Jenison Triathlon or YMCA Buck Creek Run. "Or, since we give them out daily, a child may have let the balloon go from our office," he said (First United CU Photo) ...
     
  • ALBANY, N.Y., and ST. PAUL, Minn. (9/19/14)-- Bruce Beaudette, president/CEO, Sunmark FCU, Latham, N.Y., announced he will retire from the $404 million-asset credit union at the end of the year . Beaudette has been at the helm of Sunmark for 28 years, during which he also was a member of the Filene Research Institute National Council, a co-founder of UsNet and a board member for the former Members United Corporate FCU. "Bruce was--and continues to be--a true leader both in his community and within the credit union movement," said William J. Mellin, president/CEO, Credit Union Association of New York ( The Point Sept. 18). "We will certainly miss Bruce's passion and commitment here at the association, but we wish him all the best in his retirement." Executive Vice President Frank DeGraw will assume the role as interim president/CEO after Beaudette's departure. In St. Paul, Minn., Theresa Malone is now the president of $102 million-asset Associated Healthcare CU. She replaces former president Jerry Ziegler, who retired . Malone comes to Associated Healthcare after serving as president/CEO for St. Paul (Minn.) FCU, with $129 million in assets ...
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Millennials: Rethink credit vs. debit

Consumer
NEW YORK (9/16/14)--There is a generational divide when it comes to shopping: A CreditCards.com survey indicates that boomers and millennials both choose plastic, but for the older cohort the word is "credit" and for the younger, it is "debit" (MarketWatch.com Sept. 2).
 
Both systems work well but boomers might point out to their juniors that using debit to the exclusion of credit has its handicaps. Millennials prefer debit over credit by a ratio of nearly 3 to 1, according to the survey, even though debit cards offer fewer protections and rewards and don't help young people build credit.
 
Matt Schulz, senior industry analyst at CreditCards.com, suggests that psychology may be a factor in the decision; consumers may be trying to limit spending to the money they have by using a debit card, which pulls money directly from a checking account. But if a scammer gets hold of a debit card, the consumer could be liable for unauthorized charges of $500 or more. Credit card holders are only responsible for up to $50 and can report a bogus purchase as fraud.
 
"If your debit card information gets stolen, somebody can take real money out of your account that you won't be able to use to make a car payment or a doctor's bill," Schulz says. "That money may be gone for a week or two."
 
Credit Union National Association Center for Personal Finance editors point out that, by choosing "debit" and entering a personal identification number, your transaction is treated as an ATM transaction.
 
The editors advise, "Instead, when you're making retail purchases with your debit/ATM card, choose 'credit.' You'll bypass any potential fees--and the funds still come out of your share draft/checking account."
 
Another good reason: Credit transactions require a signature, which helps guard against fraud.

For related information, read "Gotta Have It? Check Impulse Spending" and "What Will EMV (Chip) Credit and Debit Cards Mean for You?" in the Home & Family Finance Resource Center. ReadMore

CO-OP's CardNav gives cardholders mobile control

Products
RANCHO CUCAMONGA, Calif. (9/19/14)--CO-OP Financial Services will introduce CardNav by CO-OP, a mobile-card control and alert application, during a webinar Oct. 22, and roll out the product for credit unions later in the month.
 
"CardNav by CO-OP empowers credit union members to decide when, where and how their mobile credit and debit cards are used in advance and in real-time," said Stan Hollen, CO-OP Financial Services president/CEO. "This application for smartphones and tablets simultaneously addresses two key demands of today's member--greater functionality in mobile payments and greater personalized control and security."
 
The webinar will be held at 2 p.m. (ET) Oct. 22, and presented by Pat Yarmulnik, CO-OP senior product manager, and Ryan Zilker, senior manager of market analysis. To register, use the resource link.
 
CardNav helps credit unions provide their members with full control of their credit and debit cards. User-specified controls for card use include on/off, location, spending limits and transaction and merchant types, with the same parameters governing real-time alerts. ReadMore

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