Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

March 31, 2015

CUNA's Hampel reminds Operation Comment can help with RBC2 letters

Washington
WASHINGTON (3/31/15)--Bill Hampel, CUNA's chief policy officer, reminded credit unions on Monday that credit unions should let their thoughts and suggestions on the National Credit Union Administration's revised risk-based capital proposal (RBC2) be known. Less than a month remains before the April 27 comment deadline.

"It's very important for credit unions, now that they've had two months to consider the proposal, to weigh in with comment letters." Hampel said. "It is quite a bit improved from the first proposal, but we're not there yet."

CUNA posted a new RBC2 comment letter guide online last week. The guide includes the major areas credit unions should consider when commenting, CUNA's position on those issues and how to submit comment letters.

In addition to submitting comments through mail, fax, email, the NCUA's website and the federal eRulemaking portal, credit unions can use Power Comment , which will automatically format and send comment letters to the NCUA.

FFIEC: Ways to ID, mitigate cyberattacks that use malware

Washington
WASHINGTON (3/31/15)--Information on how financial institutions can identify and mitigate compromised user credentials and malware was released Monday by the U.S. Treasury's Federal Financial Institutions Examination Council (FFIEC).

According to the FFIEC, theft of credentials and the introduction of malware have often types of cyberattacks that have been increasing in severity and frequency over the past two years.
 
Compromised user credentials can be those of consumers, employees and third parties, and can be used to access secure systems or system credentials that could allow broader access.
 
The introduction of malware can come through downloading attachments, visiting compromised websites, connecting external devices such as USB drives or through the installation directly into a system by unauthorized parties with stolen credentials.
 
In accordance with FFIEC guidance, all financial institutions should:
  • Securely configure systems and services;
  • Review, update and test incident response and business continuity plans;
  • Conduct ongoing information security risk assessments;
  • Perform security monitoring, prevention and risk mitigation;
  • Protect against unauthorized access;
  • Implement and test controls around critical systems regularly;
  • Enhance information security awareness and training programs; and
  • Participate in industry information-sharing forums, such as the Financial Services Information Sharing and Analysis Center.
The FFIEC has also posted a number of resources online with information designed to strengthen user awareness of safe online practices.
 
According to the FFIEC, the statements released Monday do not contain new regulatory expectations--they are intended to alert financial institutions of specific risk mitigation tips.

Lawmakers question CFPB on Aug. TILA-RESPA date

Washington
WASHINGTON (3/31/15)--Why have compliance disclosure reforms gone into effect during what is traditionally the busiest month for home closings?

That's the question two key lawmakers asked the Consumer Financial Protection Bureau (CFPB) Monday regarding the bureau's Truth in Lending Act-Real Estate Settlement Procedures Act (TILA-RESPA) integrated disclosures rule, which is scheduled to be implemented Aug. 1.

CUNA has urged the CFPB to allow a lengthy implementation period for the TILA-RESPA rule due to the complexity of the issue.

Rep. Blaine Luetkemeyer (R-Mo.), chair of the House Financial Services subcommittee on housing and insurance, and Rep. Randy Neugebauer (R-Texas), chair of the House Financial Services subcommittee on financial institutions on consumer credit, expressed their concerns about such a major change taking place during peak homebuying season.

The legislators said that, since many homebuyers look to move into new houses before the start of the school year, 10 of the 25 busiest days for existing home closings in 2014 were in August. Conversely, 19 of the slowest days for home closings in 2014 were in January or February.

"We strongly encourage you to make the Aug. 1, 2015 to Dec. 31, 2015 timeframe a 'hold harmless' period of restrained enforcement and liability," the legislators wrote. "This would allow all parties to better understand the changes associated with [TILA-RESPA] and help ensure consumer confidence and stability in the nation's housing market."

House could consider relief bills in April: CUNA looks to work with Senate

Washington
WASHINGTON (3/31/15)--Passage of nine CUNA-backed regulatory relief bills by the U.S. House Financial Services Committee last week is a good sign, but CUNA will be stepping up its advocacy efforts to get the bills onto the next step. Both the Senate and House are on spring recess this week and next.
 
"What we expect to happen next is when the House comes back in April they will take up these bills in some form or fashion, either individually or in some sort of package, I think that question remains to be determined," said Ryan Donovan, CUNA's chief advocacy officer. "We're encouraging the House to pass all of these bills quickly and get them over to the Senate so that we can work through that process as well."
 
The nine bills would provide a measure of regulatory relief to credit unions. Several, including the Helping Expand Lending Practices in Rural Communities Act (H.R. 1259), have companion pieces in the Senate.
 
Like its House companion, the Senate's version (S. 871) would direct the Consumer Financial Protection Bureau to establish an application process determining whether an area should be designated as a rural area if the CFPB has not designated it as one.
 
CUNA wrote to Sens. Mitch McConnell (R-Ky.), Rand Paul (R-Ky.), Dean Heller (R-Nev.) and Shelley Moore Capito (R-W.V.) Monday in support the bill. CUNA President/CEO Jim Nussle thanks the legislators for the bill and says CUNA looks forward to working with the legislators to secure its enactment.

CFPB Student Scorecard should focus on consumer benefits, CUNA says

Washington
WASHINGTON (3/31/15)--CUNA supports the Consumer Financial Protection Bureau's (CFPB) plan to create a Safe Student Account Scorecard as a tool for colleges and universities to ensure that financial product offerings marketed to their students are "superior to those generally available," the trade association said in a March 30 comment letter to the bureau.

However, CUNA also said that the proposal could be improved if it included transparency to the students regarding the decision the educational institution ultimately reaches.

CUNA believes that student access to that information will help ensure "the educational institutions are in fact basing their selection on what is in the students' best interests and not on other factors, such as financial incentives."

CUNA also urged the bureau to clarify that the optional scorecard would be intended to assist educational institutions in choosing partners, and that the scorecard will not establish any minimum standards. The letter also questioned whether the information addressed in the CFPB's draft scorecard could be better delivered through bureau guidance.

CFPB should increase relief in 'rural' definition rule: CUNA

Washington
WASHINGTON (3/31/15)--The Consumer Financial Protection Bureau's (CFPB) proposal regarding rural and underserved areas is a positive step, but CUNA urged the agency to take further regulatory relief steps, in a comment letter filed Monday.

The CFPB in January proposed a broader definition of "small" credit union and bank, as well as an expanded designation for what comprises a "rural" area.  If finalized, the proposal would, in part, increase the number of financial institutions able to offer certain types of mortgages in rural and underserved areas by exempting more small creditors from the CFPB's tough new mortgage rules.

CUNA generally supports the proposal, calling the bureau's overall approach "positive and appreciated."
 
However, CUNA offered a number of changes to make the proposal more favorable toward credit unions and other small servicers.
 
This includes providing favorable regulatory relief to creditors that manage their lending programs, in addition to the thresholds of asset size and loans originated. This could be achieved by considering the default rates on covered loans, CUNA suggests.
 
CUNA also recommends the small creditor thresholds, which can exempt institutions from certain requirements under Regulation Z (which implements the Truth in Lending Act), be analyzed. The new threshold proposed by the CFPB would raise the thresholds to 2,000 loans originated in a year, up from 500.
 
"Raising the limit is commendable but we encourage the agency to provide impact analyses that demonstrate how communities, consumers and creditors would be affected if the limit were raised to 2,500, 3,000, 3,500 or 4,000 as well as the proposed threshold of 2,000 so that stakeholders and the agency would have more informed comments regarding what the new limit should be," the letter reads.
 
The CFPB's proposal would not raise the asset limit for small creditors, which is currently set at $2 billion. CUNA believes the number is arbitrary and too low, and urges the bureau to consider raising the threshold to $10 billion.
 
CUNA supports most other aspects of the proposal, including:
  • Adding a grace period to the annual asset limit and original limit to allow a creditor that exceeds those limits to operate as a small creditor for loan applications received before April 1 of the current calendar year;
     
  • Expanding the definition of "rural" to include a county that meets the current definition of a rural county or a census block that is not in an urban area as defined by the U.S. Census Bureau; and
     
  • The inclusion of safe harbor provisions for creditors related to the use of CFPB tools to determine whether a property is located in rural or underserved areas and to determine if a property is located in an urban area.

Pending-home sales at highest since June 2013: NAR

Market
WASHINGTON (3/31/15)--Pending-home sales doubled-down in February with a second straight month of gains, as the National Association of Realtors (NAR) reported its pending-sales index climbed 3.1% for the month to 106.9 ( Economy.com March 30).

Further, the pending-home sales index, a leading indicator for the housing market, sits 12% higher than its level in February 2013.

While the index rose to its highest level since the summer of 2013, "the bulk of the improvement in housing demand continues to be supported by investors and all-cash buyers, as evidenced by the tepid recovery in mortgage purchase applications," said Brent Campbell, Moody's analyst ( Economy.com ).

Campbell also said that first-time homebuyers remain absent from the market, as sales have been driven by households who already own homes and are interested in upgrading or downgrading.

By region, the Midwest and West posted pending-home sales increases of 11.6% and 6.6% respectively, while sales dropped by 1.4% in the South and 2.3% in the Northeast.

Pending-home sales in each region have outperformed their year-over-year paces, however, with the West climbing 18.3% above its year-ago level, the Midwest rising 13.8% and the South and Northeast jumping 10.8% and 4.1% respectively on an annual basis.

"Several markets remain highly competitive due to supply pressures, and realtors are reporting severe shortages of move-in ready and available properties in lower price ranges," said Lawrence Yun, NAR chief economist. "The return of first-time buyers this year will depend on how quickly inventory shows up in the market."

Business Rates

Market
Daily Financial Rates -- 2015-03-31

Financial Rates


Tuesday, March 31, 2015

03:55 AM CDT

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

TermTue
3/31
Mon
3/30
Fri
3/27
Thu
3/26
Wed
3/25
1 month0.020.020.020.020.03
3 month0.040.040.030.040.02
6 month0.140.120.130.110.11
1 year0.270.270.280.250.24
2 year0.580.580.610.590.58
3 year0.930.920.980.940.91
5 year1.411.421.471.411.37
7 year1.741.741.811.731.68
10 year1.961.952.011.931.88
20 year2.322.292.372.282.24
30 year2.552.532.602.502.46

TREASURY BILLS

Results of the March 30, 2015 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, 3/30
Week Ago
Mon, 3/23
13 weeks0.0350.020
26 weeks0.1350.105

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermTue
3/31
Mon
3/30
Fri
3/27
Thu
3/26
Wed
3/25
high0.3120.3120.3120.3120.312
low0.0700.0500.0700.0700.060
near closing bid0.0800.0900.0800.0700.070
offered0.1000.1200.1000.2700.270
effective rate20.1400.1300.1400.1400.130

FREDDIE MAC (Mortgage commitments, 30 days)

TermTue
3/31
Mon
3/30
Fri
3/27
Thu
3/26
Wed
3/25
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermTue
3/31
Mon
3/30
Fri
3/27
Thu
3/26
Wed
3/25
30 year3.3123.3433.2893.2133.247

LIBOR

TermTue
3/31
Mon
3/30
Fri
3/27
Thu
3/26
Wed
3/25
1 month0.236000.238000.236000.234000.23700
3 month0.385000.387000.389000.389000.38600
6 month0.534000.535000.537000.536000.53600
1 year0.838000.839000.840000.839000.83900

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
3/31
Week ended
3/24
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.

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 0.49% 0.27% 0.22%
Personal Savings $1,000 0.20% 0.09% 0.11%
Personal Interest Checking $2,500 0.36% 0.15% 0.21%
NSF Fee $28.04 $30.72 $-2.68
Personal MMDA $2,500 0.18% 0.10% 0.08%
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 10.08% 9.80% 0.28%
New Auto Loan - 5 Years 2.60% 3.65% -1.05%
Used Auto Loan - 2 year Old - 4 Years 2.73% 3.88% -1.15%
HELOC - 80% LTV - $50,000 4.11% 4.34% -0.23%
HE Loan - 80% LTV - $50,000 - 15 Years 5.62% 5.83% -0.21%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 3.75% 3.75% 0.00%
30 Year Fixed Jumbo 3.84% 3.79% 0.05%
5/1 Year ARM Conforming 3.02% 2.93% 0.09%

Credit Card Products Credit Unions Bank Average Difference
Platinum 8.86% 10.43% -1.57%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.47 $31.67 $-6.20
Reward 10.23% 13.60% -3.37%
Annual Fee $38.33 $93.90 $-55.57
Maximum Late Fee $23.10 $33.45 $-10.35

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.55% 3.57% -0.02%
Indirect B Tier New Auto Loan - 5 Years 5.25% 5.17% 0.07%
Indirect C Tier New Auto Loan - 5 Years 7.47% 6.66% 0.81%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Monday, March 30, 2015. For detailed disclosures click here.

LCUL's Cochran: 'Old' CU benefits attract young, new members

CU System
HARAHAN, La. (3/31/15)--A new generation of Louisiana residents, inspired by "old school" services and pricing and the cooperative business model, are starting to discover the credit union difference, Louisiana Credit Union League President/CEO Anne Cochran wrote in a opinion editorial that appeared in the Lafourche Parish Daily Comet (March 27).

Millennials--consumers born between the early 1980s and early 2000s--are choosing credit unions because of the benefits and personal services offered," Cochran wrote. "Millennials are drawn to 'old' credit union features that now seem 'new': free checking, no minimum deposit accounts, fewer fees, better interest rates (in some cases nearly two percentage points lower than competitors) and personal service."

This growth among the younger generation was spurred by the positive response credit unions received coming out of the financial crisis, Cochran said.

"Many Americans saw credit unions as a safe haven in the financial services sector when credit unions continued to lend to consumers, homebuyers and small businesses while other lenders were unable or unwilling to do so," she wrote.

She cited statistics that say an overwhelming majority of credit unions offer free checking in comparison with banks.

As cooperatives, credit unions return their earnings, minus operating expenses, to their members through higher interest rates on deposits and lower loan rates.

This not-for-profit philosophy that reinvests earnings with a credit union's members generates an economic benefit of $8 billion to $10 billion each year for the U.S. economy, according to CUNA.

"These monies make it easier for families to buy a new home through lower interest rates or for a small business owner to expand and buy new equipment," Cochran wrote.

Louisiana residents are getting the message. State credit unions saw an 8% increase in loans in 2014.

CUNA marketing, biz dev. council honors excellence winners

CU System
MADISON, Wis. (3/31/15)--The CUNA Marketing & Business Development Council Conference honored credit unions and executives at its annual conference March 25-28 in Las Vegas.

Hilary Reed, senior vice president/chief relationship officer, Inspire FCU, Bristol, Pa., was recognized with the Marketing Professional of the Year Award.

Carol Payne, vice president/communications and marketing, California and Nevada Credit Union Leagues, Ontario, Calif., won the Hall of Fame Award.

Teea Reed, director of marketing and business development, Union Square FCU, Wichita Falls, Texas., won the Rising Star of the Year Award. This new award recognizes and honors a rising professional with two or fewer years of experience in the credit union industry.

Sandi Carangi, CEO, Mercer County Community FCU, Hermitage, Pa., was presented with the Volunteer of the Year Award. Carangi serves on the Member Resources Committee.

The Excellence awards recognize outstanding new marketing and business development approaches with potential for universal application across the industry. This year's winners are (by category):
  • Business Development: Summit CU, Madison, Wis., for its free financial wellness initiative, CUatWork;
  • Community Outreach and/or Political Advocacy: Local Government FCU (LGFCU), Raleigh, N.C., for its Leading for Results program. This year, LGFCU reinvested in its partnership with the University of North Carolina-Chapel Hill School of Government to offer credit union employees leadership training. The goal of the LGFCU Fellows program is to provide development and management skills to mid-level executives; and
  • Miscellaneous: Inspire FCU, Bristol, Pa., for its brand re-animation and name change. Inspire FCU's brand strategy is to build meaningful "Inspirerelationships" with members and the community, encouraging financial literacy and economic growth through relationship development. To reflect its brand strategy, Inspire FCU underwent a complete makeover of its brand this year.

Maine CU membership growth continues record pace

CU System
WESTBROOK, Maine (3/31/15)--Credit unions in Maine saw healthy membership expansion in 2014, as total credit union memberships rose to more than 651,000, a new record for the state, according to numbers released by the Maine Credit Union League ( Weekly Update March 26).

In addition to membership gains, assets, loan growth and deposits recorded solid years as well.

Combined assets at Maine's credit unions climbed 4.7% for the year to $6.4 billion, while loan growth increased by 6.3%, an increase of more than $260 million.

The share to savings ratio rose by 4% during the year, translating to a $210 million increase in savings to $5.45 billion, while memberships for the year expanded by 14,026, or 2.2%.

John Murphy, league president, said that the membership gains could be attributed to a variety of factors, including convenience, the cooperative structure and the commitment by credit unions to embrace advancements in technology.

"The cooperative structure of credit unions, where every member is an owner, provides consumers with the best value in financial services, a fact that more and more consumers realize and appreciate," Murphy said.

The state's credit union awareness campaign Young and Free Maine also played a huge role in "raising the awareness of what credit unions offers and provide to consumers of all ages," he added.

Albuquerque biz journal highlights N.M.'s CU culture

CU System
ALBUQUERQUE, N.M. (3/31/15)--Readers of Albuquerque Business First may nearly be experts on all things credit union, as the business publication recently dedicated wide swaths of print space to illustrate the relative state of credit unions in New Mexico.  

The coverage included Q-and-A profiles with the heads of two credit unions in New Mexico: Robert Chavez, president/CEO, Sandia Laboratory FCU, Albuquerque, and Winona Nava, president/CEO, Guadalupe CU, Santa Fe.

A third story covered recent branding changes that have been unveiled by a number credit unions in the state. The story also discussed the different ways credit unions are positioning themselves to grab the attention of younger consumers in order to stay relevant.

"Millennials definitely factor into rebranding," Hilary Reed, executive committee member of CUNA's Marketing and Business Development Council, told Albuquerque Business First (March 27). They don't want to be associated with the old, stodgy reputation of banks, she added.

Other ways credit unions separate themselves from banks is by eliminating the term credit union from their names, such as Erie (Pa.) General Electric FCU, which now operates under the name Widget Financial.

"Credit unions are more widely known than they were before the recession," Reed said. "...The ones that I'm seeing rebrand are very edgy, and banks don't necessarily have the ability to do that."

In his Q-and-A, Chavez spoke about the day-to-day operations of a credit union president/CEO, why Sandia Laboratory FCU has had such success in the state, and the general differences between credit unions and banks.

"Within the first six months I was at this credit union, I remember sitting in a meeting with our CEO and (chief financial officer), and we were talking about giving up revenue off of our credit cards," Chavez told Albuquerque Business First . "You don't have those conversations in a bank."

Nava spoke about the growth Guadalupe CU has seen over the last 24 years under her leadership, and about how the credit union serves the underbanked as a community development financial institution.

"There are a large number of our members who are underserved by the traditional banking system," Nava said, adding, "We do have members who are living in the financial mainstream, but 65% of our members are living below the designated poverty line."

Financial Fitness Day kicks off fin. lit. month

CU System
MADISON, Wis. (3/31/15)--Wednesday is Financial Fitness Day--and also the start of National Financial Literacy Month and National Credit Union Youth Month.
 
To celebrate Financial Fitness Day, the National Credit Union Foundation invites credit union organizations to participate in the daylong fundraising activities.

To participate in the event, which raises funds for the foundation and for state credit union foundations in order to support their respective financial literacy initiatives, credit union organizations could hold one or more of the following fundraisers:
  • A jeans or casual day for staff, where staffers donate money to wear casual clothing to work;
  • A bake sale for staff or members; and
  • A "Deduct or Donate a Buck" event, where credit unions ask their staff and members to consider making a voluntary donation as they complete their transactions, or deducting a certain amount of money from their checking or savings account.
Resources for the fundraisers can be found at financialfitnessday.com . Donations made during the day will be split evenly between the foundation and state credit union foundations.

Responding to demand from credit unions for a month-long celebration, National Credit Union Youth Week grows into National Credit Union Youth Month in 2015. The month-long celebration extends the time in which credit unions can connect and convey to their members the importance of financial education at a young age.

The month's theme, "Wild About Saving," was chosen from ideas submitted by credit union staff nationwide.

Click to view larger image Trish Fuller, loan officer at Abbeville (S.C.) Community CU, is prepared for National Credit Union Youth Month's "Wild About Saving" theme. (Abbeville Community CU Photo)
Abbeville (S.C.) Community CU has already decorated its branch with inflatable jungle animals in celebration of the theme.
 
CUNA will also sponsor its annual National Youth Saving Challenge during April. The contest will reward 25 savers with $100 cash prizes. Last year, 8,844 new accounts were opened, and 94,466 young members deposited more than $20.5 million into savings accounts during the month-long challenge.

Redwood CU (RCU), Santa Rosa, Calif., will celebrate National Credit Union Youth Month with two contests to promote good saving habits for children and teenagers.

RCU members ages 13 through 17 are invited to submit a 150-word description of their current saving plan and goal. One winner from each Redwood branch will be picked to demonstrate sound saving principles. Each winner will receive a $50 deposit to his or her savings account. An overall winner will also have his or her submission published in RCU's Jr. Partner Post , a quarterly newsletter for RCU's teen members.

Members 12 or younger can participate in a coloring contest by downloading and completing a "What Are You Saving For?" coloring sheet featuring RCU's mascot Reddy the Redwood. Each coloring sheet features a word bubble where kids can write or draw what they are saving for, and one winner from each branch will have $50 deposited into his or her savings account.

The credit unions of the Cornerstone Credit Union League's Pineywoods Chapter are giving free movie tickets to each member who opens a new youth account in April ( Leaguer March 27).

Using images designed by CUNA specifically for National Credit Union Youth Month, the chapter developed a wrapper for Sunday's edition of the local newspaper.

As National Financial Literacy Month, April also provides credit unions with an opportunity to help their members understand that financial education is the first step toward financial independence.
 
The National Credit Union Administration plans to introduce new information resources, including a Financial Literacy Resources webpage and a video on understanding payday lending, during April.
 
"An educated consumer can make better choices to build financial security, and creating those educated consumers is an important part of NCUA's mission," NCUA Chair Debbie Matz said. "During Financial Literacy Month, we encourage credit unions to take advantage of NCUA's financial literacy resources and programing to help their members become more informed."
 
The agency will also host a webinar for credit unions, "Your Mission into Action: Developing Youth Financial Literacy and Savings Programs," April 22, beginning at 2 p.m. (ET.) On the same day, will moderate a financial literacy Twitter chat at 11 a.m. (ET).
 
NCUA will participate in the Financial Literacy Day event on Capitol Hill April 24 to educate lawmakers, congressional staffers, and the public about federally insured credit unions and the role of NCUA.

Recognizing National Financial Literacy Month, Justice FCU, Chantilly, Va., reminds its membership that it provides free access to money management and financial education services through ACCEL Members Financial Counseling.

Strongest savers in middle class: Bankrate

CU System
NORTH PALM BEACH, Fla. (3/31/15)--The most ardent savers can be found in the U.S. middle class, according to a recent survey by the personal finance website Bankrate.com .

One-fourth of middle-class households--earning between $50,000 and $75,000 annually--set aside more than 15% of their income, while only 17% of the highest earners put away more than 15%, the survey found.

By contrast, only 8% of the lowest earners in the survey saved more than 15%.

"Middle-class Americans (have) to do the saving, because nobody is going to do it for them," said Greg McBride, Bankrate's chief financial analyst. "They don't have the six-figure income to fall back on" for expenses such as household emergencies, long-term health care, education and retirement.

Millennials, on the other hand, have yet to get the picture on the importance of saving.

The survey found that people between 18 and 29 years old were the most likely to fail to save, with 37% saying they save 5% or less and 18% saying they save nothing at all.

"They don't see a correlation between where they are now and where they will be," Tiffany Aliche, independent budgeting expert, told Bankrate.com .

It appears they should take a page from those in the middle class.

In addition to the households saving more than 15% of their incomes, roughly 35% of U.S. households considered middle class put away more than 10%, according to the survey, while only 19% of the highest-earning households save at that rate.

CU System briefs (3/31/15)

CU System
  • WASHINGTON (3/31/15)-- A new app is available for those who want to keep pace with the  Credit Union Cherry Blossom Ten Mile Run and 5K Run-Walk, set for April 12 in Washington, D.C . The Credit Union Cherry Blossom app in available for iOS and Android devices. In addition to real-time tracking and results, the app also will have maps and an event calendar. Volunteer assignments and instructions also will be available on the app. Search for "CUCB" or "Credit Union Cherry Blossom" in the Apple App store or Google Play. The run raised nearly $500,000 for Children's Miracle Network Hospitals last year, and a record number of congressional delegates were honorary race chairs. This will be the 14th year running that credit unions have sponsored the event, which has raised more than $6.5 million in total  ...
     
  • MARLBOROUGH, Mass. (3/31/15)-- Massachusetts credit unions and their charitable partner, the Massachusetts Coalition for the Homeless, are ready to crack the cover on this year's children's book drive Wednesday ( Daily CU Scan March 30). The annual April event collects new and used children's books to distribute to nonprofits statewide. Last year, 40 credit unions collected more than 16,000 books, and since 2001, more than 268,700 books have been donated ...
     
  • LITTLE ROCK, Ark. (3/31/15)-- Andrew Pickett is the new president/CEO of VA Hospital FCU, Little Rock, Ark. ( Arkansas Business March 30). He previously worked at Arkansas FCU as an assistant service center manager ...
     
  • LIVONIA, Mich. (3/31/15)-- Herbert "Budd" Hall, former manager of Dow Ludington (Mich.) Employees CU (now Safe Harbor CU) died March 24 . He was 94 ( Monitor March 30). Hall was the credit union's manager from 1974 to 1986 and joined the supervisory committee after his retirement. He also served in the Paul Bunyan Chapter of the Michigan Credit Union League (MCUL), on the MCUL board for 10 years, and as league board chair from 1987 to 1989. According to his obituary he also was a delegate on the CUNA board for seven years ...

Don't take on student debt just because all the kids are doing it

Consumer
NEW YORK (3/31/15)--Student debt is now so common that the stigma once attached to owing tens of thousands of dollars is starting to evaporate.

In a recent interview young Hollywood actor Miles Teller admitted to having not paid off his student loans yet, and politicians from Ted Cruz to President Barack Obama have spoken about how late in life they still carried student debt ( MarketWatch March 27).

More and more Americans, in fact, are not only carrying student debt into their 30s and 40s, they're taking on more of it. Student debt held by those 65 and older jumped to $18.2 billion in 2013 from $2.8 billion in 2005, according to the Government Accountability Office ( The New York Times March 19).

Student debt isn't necessarily a trend you want to be a part of. If you're going to pursue continuing education, consider the following before you take out a loan:
  • See if your employer will chip in. Many employers will help pay for your graduate degree, especially if it will make you a more valuable, effective employee.
     
  • Evaluate your education as if it were an investment . Look at how much your salary is likely to increase after you complete your education--is it enough to justify the time and money you will devote to the degree? Make sure you're not overpaying for an education that won't advance your career.
     
  • Be wary of for-profit institutions . They market heavily to older Americans, and last year the Consumer Financial Protection Bureau sued one of the biggest for-profit schools, Corinthian Colleges Inc., for steering students into private loans with bad career advice and false promises of potential jobs.
     
  • Only borrow the amount you really need . When money is offered, it can be difficult to turn it down. Do some cost and income projections, and only borrow the amount you need to cover your expenses.
For related information, read "Many Colleges Can Be the 'Right Fit' for Your Student" in the Home & Family Finance Resource Center .

NFCC acquires Student Loan Alliance

Products
WASHINGTON (3/31/15)--The National Foundation for Credit Counseling (NFCC) has acquired the Student Loan Alliance (SLA).

SLA was formed in 2012 by seven current NFCC member agencies as a joint venture to build a national platform for student loan counseling. The agencies include ClearPoint Credit Counseling Solutions, Consumer Credit Counseling Service of San Francisco, GreenPath Debt Solutions, Money Management International, Navicore Solutions, Springboard Nonprofit Consumer Credit Management and Take Charge America.

The venture produced an online portal for consumer access to services and the framework for a more comprehensive counseling experience.

Student loan debt recently surpassed credit card debt at $1.3 trillion, and is now second only to mortgages in terms of total consumer debt. Among the 43 million total federal student borrowers, 7.3 million are at least 90 days delinquent on their loans, 5 million are in default and millions more are in negatively amortizing income-driven repayment plans.

"The need for a high quality, comprehensive and consumer-driven program to assist student loan borrowers is urgent," said Susan C. Keating, NFCC president. "Student Loan Alliance resources will help our member agencies fill that need for consumers in every state."

In the fall, the NFCC will launch a network of certified student loan counselors. All participating counselors will be required to complete specialized training that covers the complete inventory of student loan programs associated with repayment, forbearance or other forgiveness options.

In addition to the training requirement, counselors will have to successfully complete an additional round of examination to earn special certification.
 
RSS





print
News Now LiveWire
Consumer spending is slumping #Market #Economy http://t.co/RI4HS68IuJ
14 hours ago
April is #NationalFinancialLiteracyMonth & @TheNCUA Chair Matz urges #creditunions to help members learn to manage/protect their finances.
16 hours ago
Fed. FI regulators' statmnts on compromised credentials/destructive malware #cybersecurity http://t.co/f4uTBDm1PU http://t.co/zP5Iw6VxZc
18 hours ago
Home prices rising faster than wages: @RealtyTrac #NewsNow #Market http://t.co/wa74mnw3Cu
19 hours ago
.@Nussle dropped by the @ACUMuseum recently. Read about his visit http://t.co/bYe8RRgYLP
20 hours ago