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April 23, 2014

White House reps meet with CUNA on GSE reform

WASHINGTON (4/23/14)--White House officials requested an exclusive meeting with the Credit Union National Association Tuesday and CUNA leaders discussed credit union priorities regarding housing finance reform policy issues.
The meeting with CUNA was one of a series the White House scheduled with top financial industry trade associations and other key stakeholders, held in advance of a scheduled April 29 markup by the Senate Banking Committee of its extensive housing finance reform bill. CUNA has also participated in recent White House meetings with groups of stakeholders.
The Tuesday meeting involved members of the White House Interagency GSE Reform Working Group. 
CUNA underscored at the meeting that the top three issues for credit unions are:
  • The bill's regulatory burden on credit unions;
  • Ensuring that the housing finance market remains accessible to credit unions and other smaller institutions; and,
  •  Giving credit unions representation in governance of the new federal entities envisioned under the proposal.
CUNA reminded that restructuring the system is "unchartered and untested" territory and therefore raises numerous questions regarding fees and functionality when applied to the real-world marketplace.

Representing CUNA at the meeting were President/CEO Bill Cheney, Chief Economist Bill Hampel, General Counsel Eric Richard, Deputy General Counsel Mary Dunn, Senior Vice President of Legislative Affairs Ryan Donovan, and Assistant General Counsel for Special Projects Robin Cook joined in the meeting.

The Senate Banking Committee bill was drafted by its chairman, Sen. Tim Johnson (D-S.D.), and its ranking Republican member, Sen. Mike Crapo (Idaho).  It is currently the focus of a drive by its authors to build unshakeable bi-partisan support before the panel considers the draft.
Reports have circulated in recent weeks that the April 29 markup could be delayed, but it is widely believed that a vote will occur next week.

Also this week, CUNA Housing Finance Reform Task Force member Bill O'Brien, from Suffolk FCU, Medford, N.Y., is invited to a meeting on housing finance reform today with Department of Housing and Urban Development Secretary Shaun Donovan. ReadMore

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NCUF, Filene non-prime auto loan program gives hope on wheels

CU System
MADISON, Wis. (4/23/14)--The National Credit Union Foundation (NCUF), in partnership with Filene Research Institute, announced this week that a product incubator for its Non-Prime Auto Loans is full, with 14 credit unions across the country participating.
Non-Prime Auto Loans, an NCUF product, is one of five products in the Filene Research Institute's accessible financial services incubator funded by the Ford Foundation.
"Credit unions have a long history as being the proving ground for consumer-centric, innovative financial products," said Cynthia Campbell, director of innovation labs at Filene. "Partnering with the NCUF to test the viability of non-prime auto loans with mainstream financial institutions was a natural fit since their experience in working with low- to moderate-income consumers is extensive."
One of the 14 participating credt unions--Seasons FCU, Middletown, Conn.--has offered subprime auto loans since 2011. The $137 million-asset credit union joined the NCUF-Filene incubator initiative to share its experiences and learn from other credit unions, according to Senior Vice President Betsy Sommers.

One lesson Seasons FCU has already learned: Done right, subprime auto lending can change members' lives. Members give priority to their car loans because they use their vehicles for essential daily tasks such as getting to work and taking children to school, Sommers told News Now .

But unlike many subprime lenders, Seasons FCU takes a holistic approach to its relationship with its borrowers, according to Jeff Rindfleisch, vice president of financial services. "We really believe in developing a deeper relationship with the member," Rindfleisch told News Now . "We look at if they have direct deposit with us, if they have a debit card with us. If we're approving or denying a loan it's based on the relationship the loan officer has with that member."

"In a lot of cases when a member is struggling, they are more likely to go to the loan officer proactively," Rindfleisch continued. "We view it as a partnership. So it's about us getting the member into a car that makes sense at a payment that makes sense, and really being there to consult and advise the member."

The NCUF-Filene initiative comes at a time when obtaining a vehicle may soon become more difficult for subprime loan candidates. A new study by financial tracking firm Moody's shows that U.S. subprime auto lenders are "exercising more caution," especially when it comes to higher-risk customers ( NBC News April 22). Less competition from non-traditional subprime lenders decreases the need for independent finance companies to lend to subprime candidates, said Peter McNally, Moody's vice president senior analyst.
The other 13 participating credit unions are:
  • CALCOE FCU, Yakima, Wash., with $23 million in assets;
  • Cy-Fair FCU, Houston, with $191 million in assets;
  • Denver Community CU, with $256 million in assets;
  • EECU, Fort Worth, Texas, with $1.5 billion in assets;
  • Freedom First CU, Roanoke, Va., with $315 million in assets;
  • Laramie Plains Community FCU, Laramie, Wyo., with $38 million in assets;
  • Missoula (Mont.) FCU, with $383 million in assets;
  • SchoolsFirst FCU, Santa Ana, Calif., with $9.8 billion in assets;
  • Shreveport (La.) FCU, with $99 million in assets;
  • Soo Co-op CU, Sault Ste Marie, Mich., with $147 million in assets;
  • Summit CU, Madison, Wis., with $1.9 billion in assets;
  • University FCU, Austin, Texas,with $1.6 billion in assets; and
  • US FCU, Burnsville, Minn.,with $928 million in assets.

As a CU member, it's easy being green

CU System
MADISON, Wis. (4/23/14)--On Tuesday, credit unions focused their Earth Day messages by offering members solutions to be more environmentally responsible.
Spokane Teachers CU, Liberty Lake, Wash., put the word out that for every member who switches to e-statements until June 30, the $1.8 million-asset credit union will cover the cost to plant one tree along Deep, Coulee and Hangman creeks. The campaign, which was noted in Tuesday's Spokesman-Review , caught the attention of Twitter account holders.
Click to view larger image ( graphic)
Other credit unions shared their eco-efforts not with printed press releases but with their Twitter and Facebook accounts. Reliant Community CU, a $364 million-asset credit union in Sodus, N.Y., broke down its energy-saving practices of putting timers on its lights and its diligent participation in industrial recycling tweet by tweet.
Capitol CU, a $124 million-asset credit union in Austin, Texas, shared tips from in its Go Green to Get Green campaign. E-statements are one way members can quickly make a difference in the amount of paper they receive. Paperless statements and billing are cost- and tree-saving.

When possible, members should look at auto-bill payment programs that mean fewer checks to write each month, according to the April 22 blog post on . Even small acts such as saying, "No," to receipts at ATMs and checkout counters can make a difference.
Many credit unions hold true to the green theme throughout the year. Redwood CU, a $2.2 billion-asset credit union in Santa Rosa, Calif., has a sustainability committee that meets regularly to guide and promote environmental awareness. Its administrative offices are Leadership in Environmental and Energy Design certified, and it offers lower loan rates on qualified hybrid vehicles.
Redwood CU volunteers Wrynn Reynoso, left, and Brittany Gaddis plant a tree during the credit union's fifth annual Re-Leaf Day at Laguna de Santa Rosa, Calif. (Redwood CU photo)
Recently, 21 Redwood CU employees and family members joined community volunteers to plant more than 600 trees and shrubs along a degraded habitat near the freshwater wetlands of Laguna de Santa Rosa.
Credit unions also help keep thousands of pounds of paper out of landfills by holding shred days for their communities. Last year, Arizona State CU, Phoenix, sliced and diced more than 48,000 pounds of information-sensitive documents, and the $1.6 million-asset credit union has seven events scheduled for 2014.
Shred events help prevent identity theft by securely disposing of personal information, but, said Kristyn Dix, vice president of operations, Kemba CU, "We're recycling, and we're making a difference in our world" ( WLWT-TV 5 April 19). The $564 million-asset credit union collected more than 200,000 pounds of paper and documents during Saturday's shred event. All of the paper is recycled, saving more than 3,200 trees. ReadMore

NCUA circulates call report deadline reminder, warning

ALEXANDRIA, Va. (4/23/14)--The National Credit Union Administration is circulating this reminder and warning: Credit unions failing to meet the April 25 call report filing deadline are potentially subject to civil money penalties.

The NCUA put late-filers on notice in January with a Letter to Credit Unions (14-CU-03). The agency called filing tardiness a "serious problem" that impacts its ability to conduct effective off-site supervision and drains agency resources. Late filings also delay the release of quarterly industry data to the general public.

The NCUA attached that January letter to the reminder its sent Tuesday to credit union directors and CEOs.

Potential penalties for late filers include:
  • Up to a maximum of $2,000 per day for each day a required report is "minimally" late or contains uncorrected false/misleading information if the late or false/misleading filing is unintentional and the credit union has reasonable procedures in place to avoid such errors;
  • Up to a maximum of $20,000 per day for each day a required report is late or contains false/misleading information if the late or false/misleading filing is not covered by the "unintentional" safe harbor outlined above; or
  • Up to a maximum of $1 million, or 1% of total assets, whichever is less, per day if a federally insured credit union knowingly or with reckless disregard for accuracy submits a false or misleading report and fails to correct it.
Use the resource link to access the NCUA Letter to Credit Unions (14-CU-03).

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CU Social Good marks more than 2,000 'Unite for Good' stories

CU System
BISMARCK, N.D. (4/23/14)--CU Social Good, a campaign by the Credit Union Association of the Dakotas (CUAD), marked a milestone of collecting more than 2,000 stories of the good work that credit unions do in their communities.
"We are encouraged by the positive response we have received from so many unique credit unions," said Robbie Thompson, CUAD president. "Credit unions give back to their local communities in an amazing variety of creative and generous ways, but we don't always do a great job of telling these stories."
In just over a year, credit unions from 41 states and Canada have shared their stories on the CU Social Good website, noting everything food pantry donations in Michigan to building bikes for kids in Texas. Categories include charities, community work, Credit Unions for Kids, financial literacy and education, scholarships and environmental sustainability.
In addition to sharing their stories and photos, credit unions can receive good news in their email in-boxes by subscribing to CU Social Good's weekly newsletter. ReadMore

Green NCUA highlights mark Earth Day

ALEXANDRIA, Va. (4/23/14)--The National Credit Union Administration has had some real success in its green initiatives, the agency said Tuesday in a release that marked Earth Day.  The NCUA has worked to reduce consumption of electricity, cut water usage--resulting in a 423,000-gallon reduction from 2012's total--and institute in-office electronics recycling programs.

NCUA Chairman Debbie Matz said being a responsible corporate citizen and a good steward of the public trust is a priority for the agency, noting that the NCUA in 2013 not only took steps to reduce resource use, it also worked decrease the amount of waste produced, and make the agency more environmentally efficient.

Steps taken at the NCUA's central office included:
  • Receiving an ENERGY STAR certification from the U.S Environmental Protection Agency, scoring 86 out of a possible 100 points;
  • Beginning a load-shed program that reduces electrical consumption by using a generator to produce energy during high-demand days;
  • Reducing water usage by switching to low-flow faucets and toilets, resulting in a 423,000-gallon reduction from 2012's total water use;
  • Initiating a new recycling program for batteries, cell phones and small electrical devices; and
  • Reducing the number of print communications and replacing them with online versions.
"We encourage credit unions to make a similar commitment to increasing efficiency, reducing environmental costs and promoting greater environmental awareness in their operations," Matz said.
This year and every year credit unions mark Earth Day with a variety of community-oriented events and programs, ranging from planting trees to promoting tree-saving electronic statements to educating youth about the environment. ReadMore

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Senators seek GAO too-big-bank study refinements

WASHINGTON (4/23/14)--As it develops a second report on "too-big-to-fail" banks and the benefits they may have received due to "perceived government support," a pair of senators have encouraged the Government Accountability Office (GAO) to be mindful to "compare apples to apples."  

The senators encouraged the GAO to consider important criteria and relevant questions that will help members of the U.S. Congress properly evaluate the GAO report.

The letter to the GAO was sent by Sens. Tom Carper (D-Del.) and Mark Kirk (R-Ill.).  The lawmakers charged that the GAO's first report on "too-big-to-fail" banks was incomplete and that lawmakers did not find it all that useful to their oversight responsibilities.

They pushed the GAO to beyond determining whether or not a "perceived funding advantage" exists and explore instead whether there is a  competitive advantage created by that perception.

The senators requested that the GAO, in its analysis, consider how the Dodd-Frank Act and other regulatory reforms may have impacted credit ratings and investor confidence in the market. Other items that should be added to the GAO's analysis include:
  • Whether portions of Dodd-Frank that ban bailouts can be circumvented;
  • If stress test protocols developed and implemented by the Federal Reserve have impacted risks taken by relevant bank creditors, and if the stress tests reduce the likelihood of large bank failures; and
  • How the current capital positions of large financial institutions compare to those taken before the financial crisis.
The senators also encouraged the GAO to limit its analysis to only U.S. banks, the eight firms that the Financial Stability Board has labeled "systemically important." The GAO should also exclude non-financial firms such as insurance companies and asset managers from its analysis, they said. 

Carper and Kirk also asked if the competitive advantage seen in the banking industry is disproportionate to the advantages large firms enjoy in other industries. ReadMore

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