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LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
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RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

January 23, 2015

Work with management to address risk, Matz tells CU volunteers

Washington
ALEXANDRIA, Va. (1/23/15)--Credit union volunteers are the "first line of defense" against losses to the credit union system, National Credit Union Administration Chair Debbie Matz said Thursday.

Speaking at a Volunteer Leadership Institute event in Kauai, Hawaii, Matz credited credit union volunteers with helping guide their institutions through the financial crisis.

"Engaged volunteers have led credit unions diligently, from recession through recovery. You have turned unprecedented challenges into enduring opportunities," she said. "With the financial crisis behind us, we need to discuss the challenges ahead, including interest-rate risk, cybersecurity and the need for credit unions to hold adequate capital."

Interest-rate risk for the credit union system is now higher than it was before the crisis, Matz claimed. Net long-term assets have risen to 35% today from 25% of all assets 10 years ago.

The Credit Union National Association has agreed that interest-rate risk is an area credit unions should be concerned about, but believes that it can be handled in the context of existing rules, particularly since the NCUA's last interest-rate risk rule took effect just two years ago.

Matz also address the "alarming rate" of growth of cyberattacks, as the number, variety and sophistication of fraudsters and terrorists increases. She warned that hackers could use a vulnerable credit union as an entry point into the larger financial system.

CUNA has urged President Barack Obama and the U.S. Congress to work on enacting data breach legislation that would set a national notification standard for notifying consumers of breaches, as well as hold merchants to the same data security standards as apply to credit unions.

Matz also reviewed changes in the NCUA's revised proposed risk-based capital rule, saying the agency is required by law to make such a rule, and that its implementation is good public policy.

"We also need to fix the problem of inadequate capital in high-risk outliers in the credit union system," she said. "A modern rule would have helped more credit unions avoid failure and reduced losses to the Share Insurance Fund, which your credit unions all had to pay."

While CUNA believes the revised risk-based capital proposal has many positive changes compared with the original proposal, the organization has remaining concerns. A variety of information on the proposal is available at CUNA's Risk-Based Capital Action Center.

31 CUs fined total of $12,820 for 3Q late-filing

Washington
ALEXANDRIA, Va. (1/23/15)--Thirty-one federally insured credit unions will be subject to civil money penalties for filing late third-quarter 2014 call reports, the National Credit Union Administration announced Thursday. Those 31 have consented to pay a total of $12,820, according to the NCUA.

Individual penalties range from $138 to $1,878, with a median penalty of $176. Those funds are sent to the U.S. Treasury by the NCUA, as mandated in the Federal Credit Union Act.

Assessment of penalties primarily depends on the credit union's asset size, its recent call report filing history and the length of the delay. According to the NCUA, one of the credit unions assessed penalties had been late in a previous quarter.

Of the 31 credit unions paying penalties in the third quarter, 19 had assets of less than $10 million; seven had assets between $10 million and $50 million; and five had assets between $50 million and $250 million. No credit unions with assets greater than $250 million filed late in the third quarter.

A total of 47 credit unions filed call reports late for the third quarter. After the NCUA consulted regional offices and state supervisory authorities to review each of those cases, 42 credit unions were advised they could reduce their penalties by signing a consent agreement.

The NCUA granted waivers for 11 of those credit unions and the remaining 31 credit unions consented.

Seventy-five credit unions filed late reports in the second quarter of 2014, with 44 eventually paying a total of $17,111 in penalties. In the first quarter, 104 credit unions missed the deadline, and 62 were eventually fined a total of $57,750.

The NCUA started the civil money penalties for late filers in the first quarter of 2014, which Chair Debbie Matz said are meant to deter late filers. The third quarter of 2013 saw more than 1,000 credit unions miss the deadline, and Matz said a large portion of those credit unions were chronic late filers.

Consumers fear inaccurate info lingers on credit reports, says FTC study

Washington
WASHINGTON (1/23/15)--Most consumers reporting unresolved errors in their credit scores believe that inaccurate information is still on their credit report, according to a study from the Federal Trade Commission (FTC).

The study, released Tuesday, is the sixth and final congressionally mandated study on national credit report accuracy from the FTC.

A full 23% of those with lingering problems told the FTC that they just do not have the time to continue the fight to get the errors cleared up.

An earlier study--one in 2012--found that 20% of consumers had an error on at least one of their three credit reports that was corrected by a credit reporting agency (CRA) after it was disputed. That study also found that approximately 20% of the consumers who identified errors in their credit reports saw a later improvement in their score that resulted in a lower credit-risk tier.

This week's study is a follow-up to the 2012 study, and it focuses on 212 consumers who had at least one unresolved dispute in the 2012 study. The 2015 report found that 37 of those consumers (31%) found the disputed information had been corrected.

The other 84 consumers continue to believe some of the disputed information on their reports is still inaccurate. Thirty-eight of those consumers (45%) said they plan to continue their dispute, 42 (50%) said they would abandon their dispute and the remaining four said they are undecided.

The 42 consumers who plan to abandon the process are involved in 93 total disputes. Of those, 40% said they were not interested in pursuing the matter, or the inaccurate information is not important. As mentioned, another 23% of those consumers indicated they do not have enough time to continue the dispute.

The 2015 study recommends that:
  • CRAs review and improve the dispute results notification process to ensure notices and explanation of investigation results are provided to consumers;

  • CRAs continue to explore efforts to educate consumers regarding their rights to review their credit reports and dispute inaccurate information; and

  • Consumers continue to examine their credit reports annually by using AnnualCreditReport.com and follow the Federal Credit Reporting Act dispute process when inaccuracies are identified. Following the resolution of a dispute, consumers should continue to check their credit reports for potential rare instances of reinsertion.
According to the FTC, "due to the relatively small number of consumers who participated in the follow-up interview, the commission has determined not to recommend any specific legislative action regarding credit reporting accuracy at this time."

JPMorgan Chase, Wells Fargo to pay $35.7M for mortgage kickbacks

Washington
WASHINGTON (1/23/15)--Consent orders proposing $35.7 million in payments from Wells Fargo and JPMorgan Chase were filed Thursday in federal court by the Consumer Financial Protection Bureau (CFPB).

The bureau, along with the Maryland Attorney General, took action against the two firms for what it alleges is an illegal marketing services kickback scheme with the now-defunct Genuine Title.

The CFPB alleges Genuine Title gave the banks' loan officers cash, marketing materials and consumer information in exchange for business referrals. According to the bureau, these were offered in order to increase the amount of loan business generated.

"These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly," said CFPB Director Richard Cordray. "Our action today to address these practices should serve as a warning for all those in the mortgage market."

The proposed consent orders would require $24 million in civil penalties from Wells Fargo, $600,000 in civil penalties from JPMorgan Chase and $10.8 million in redress to consumers whose loans were involved in the scheme.

An investigation by the CFPB revealed more than 100 Wells Fargo loan officers in at least 18 branches, mostly in Maryland and Virginia, participated in the scheme.

The investigation also found that at least six JPMorgan Chase loan officers in three different branches in Maryland, Virginia and New York were involved in referring settlement business on almost 200 loans to Genuine Title.

Action also has been taken against former Wells Fargo employee Todd Cohen and his wife, Elaine Oliphant Cohen, for their involvement. The bureau alleged that Cohen took "substantial cash payments" in exchange for referrals. Genuine Title allegedly made tens of thousands of dollars in payments to Oliphant Cohen "in an effort to disguise the kickback nature of the payment."

The two would be required to pay a $30,000 penalty under the consent order, and Cohen would be banned from participation in the mortgage industry for two years.

House subcommittee to examine 'sound data breach legislation'

Washington
WASHINGTON (1/23/15)--The House subcommittee on commerce, manufacturing and trade will examine what potential data breach legislation should look like in a hearing scheduled for Tuesday.

Subcommittee Chair Rep. Michael Burgess (R-Texas) has said that working toward a federal data breach solution is a top priority for the 114th Congress.

"Data theft is a real and serious threat facing American families. With cybercrimes growing in size and scope by the day, we have a responsibility to improve cyber safeguards," Burgess said in a statement. "We need a plan in place that will help prevent data from being stolen in the first place, and will also alleviate consequences for consumers if hackers are successful. I am encouraged by the president's recent focus on this issue and call for a national standard, and I agree."

The stated goal of the hearing is to determine what elements should be included in federal legislation--legislation that the subcommittee said it hoped will result in uniform standards and better consumer protection.

"We hope that any legislation that is enacted requires merchants to follow the same type of data security standards that credit unions and other financial institutions must follow, enables consumers to be notified in a timely manner and ensures that credit unions are reimbursed for costs they incur as a result of merchant data breaches--all issues CUNA has been voicing to Congress," said Credit Union National Association President/CEO Jim Nussle in response to President Barack Obama's call for data breach notification legislation.

The hearing is scheduled to start at 10 a.m. (ET) Tuesday and will be streamed on the House Energy and Commerce Committee's website.

The full House Financial Services Committee will host a hearing, also at 10 a.m. (ET) Tuesday, titled "Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency."

The hearing is likely to feature agency Director Mel Watt speaking on the future of housing finance, particularly the future of government-sponsored enterprises Fannie Mae and Freddie Mac.

NEW: Registration closing soon for CUNA's Jan. 26 RBC2 webinar

Washington
WASHINGTON (1/23/15 UPDATED 12:15 p.m. ET)--Registration closes soon for the Credit Union National Association's Jan. 26 webinar on the National Credit Union Administration's revised risk-based capital proposal (RBC2).

CUNA President/CEO Jim Nussle, Chief Policy Officer Bill Hampel and Deputy General Counsel Mary Dunn will discuss how and to what extent the new proposal addressed the significant concerns of CUNA members raised with the first proposal.

The webinar will feature the CUNA economic team's analysis of the impact the proposal will have, as well as other areas of continuing concern.

CUNA staff will show credit unions what they need to assess their own outcome under the proposal and broader implications for the credit union community.

In addition to CUNA staff, NCUA Director of Examination and Insurance Larry Fazio will break down the proposal, including the NCUA's view of why they made some changes from the original proposal.

Nussle, Hampel, Dunn and Fazio will also answer questions from participants, as time allows.

The free, 60-minute webinar is scheduled for 1 to 2 p.m. (ET).

The RBC2 proposal was released at the NCUA's Jan. 15 board meeting, almost a year after the original proposal was introduced. While it contains improvements over the original, it is still a "solution in search of a problem," Nussle said.

The proposal will have a 90-day comment period, which will begin once it is published in the Federal Register, which is expected in the coming weeks.

Inside Washington (1/23/15)

Washington
  • WASHINGTON (1/23/15)--The Internal Revenue Service has released a video highlighting a "dirty dozen," a list of tax scams that are active during the 2015 filing season. Phone scams featuring aggressive IRS impersonators remain near the top of the list, as well as other scams used during peak filing season. The video is also available in Spanish and American Sign Language, and in podcast form in English and Spanish. The Treasury Inspector General for Tax Administration said nearly 3,000 victims have collectively paid over $14 million as a result of one particular phone scam since October 2013, where callers pretend to be IRS officials and demand payments sent via prepaid debit cards ...

Nov. home prices climb; mortgage rates still slipping

Market
WASHINGTON (1/23/15)--House prices edged up by 0.8% in November on a seasonally adjusted basis, according to the Federal Housing Finance Agency, a slightly quicker rate of appreciation than October's 0.4% increase.

Annually, home prices rose 5.3% in November, though they remain 4.5% below the April 2007 peak.

Broken down by the nine U.S. census divisions, monthly price increases in November ranged from -0.9% (New England) to 1.8% (East South Carolina). Though, each division posted positive annual increases in home-price appreciation in November.

Current mortgage rates, meanwhile, continue to dwindle.

The 30-year fixed-rate mortgage rate fell to 3.63% for the week ending Thursday, down from 3.66% the week prior and 4.39% the year prior, according to the Freddie Mac Primary Mortgage Market Survey (Housingwire.com Jan. 22).

The 30-year rate as tracked by Freddie Mac hit its lowest mark since May 2013, when the rate averaged 3.59%.

The 15-year fixed-rate mortgage rate also dropped, falling to 2.93% from 2.98% for the week, and from 3.44% annually.

"Mortgage rates continued to fall, albeit at a slower pace," said Frank Northaft, Freddie Mac vice president/chief economist (Housingwire). "Housing starts picked up in December coming in at a seasonally adjusted 1.089 million-unit pace and beating market expectations. Meanwhile, the drop in energy prices pushed the producer price index down 0.3% in December and the consumer price index fell 0.4%."

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.83%, compared with 2.9% the prior week and 3.15% the prior year.

Further, the one-year Treasury-indexed adjustable-rate mortgage stood pat at 2.37%.

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 0.48% 0.28% 0.20%
Personal Savings $1,000 0.20% 0.10% 0.10%
Personal Interest Checking $2,500 0.37% 0.15% 0.22%
NSF Fee $28.03 $30.69 $-2.66
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 10.10% 10.20% -0.10%
New Auto Loan - 5 Years 2.61% 3.89% -1.28%
Used Auto Loan - 2 year Old - 4 Years 2.75% 4.04% -1.29%
HELOC - 80% LTV - $50,000 4.11% 4.37% -0.26%
HE Loan - 80% LTV - $50,000 - 15 Years 5.63% 5.90% -0.27%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 3.68% 3.73% -0.05%
30 Year Fixed Jumbo 3.77% 3.87% -0.10%
5/1 Year ARM Conforming 2.96% 2.89% 0.07%

Credit Card Products Credit Unions Bank Average Difference
Platinum 8.85% 10.43% -1.58%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.51 $31.75 $-6.24
Reward 10.10% 13.02% -2.92%
Annual Fee $28.50 $94.15 $-65.65
Maximum Late Fee $22.21 $33.02 $-10.81

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.63% -0.04%
Indirect B Tier New Auto Loan - 5 Years 5.30% 5.20% 0.10%
Indirect C Tier New Auto Loan - 5 Years 7.46% 6.65% 0.81%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Thursday, January 22, 2015. For detailed disclosures click here.

Business Rates

Market
Daily Financial Rates -- 2015-01-23

Financial Rates


Friday, January 23, 2015

03:55 AM CST

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

TermFri
1/23
Thu
1/22
Wed
1/21
Tue
1/20
Fri
1/16
1 month0.020.010.010.020.03
3 month0.030.030.030.030.03
6 month0.080.080.080.070.08
1 year0.170.170.170.170.16
2 year0.530.530.530.490.44
3 year0.900.870.850.800.75
5 year1.391.351.311.291.22
7 year1.691.661.611.601.53
10 year1.901.871.821.831.77
20 year2.212.202.152.172.12
30 year2.462.442.392.442.40

TREASURY BILLS

Results of the January 20, 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
Tue, 1/20
Week Ago
Mon, 1/12
13 weeks0.0250.025
26 weeks0.0750.085

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermFri
1/23
Thu
1/22
Wed
1/21
Tue
1/20
Fri
1/16
high0.3120.3120.3120.3120.312
low0.0300.0300.0600.0400.030
near closing bid0.0500.0800.0800.0400.060
offered0.1000.1200.1000.0900.270
effective rate20.1300.1300.1300.1300.130

FREDDIE MAC (Mortgage commitments, 30 days)

TermFri
1/23
Thu
1/22
Wed
1/21
Tue
1/20
Fri
1/16
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermFri
1/23
Thu
1/22
Wed
1/21
Tue
1/20
Fri
1/16
30 year3.2583.1943.1903.0243.181

LIBOR

TermFri
1/23
Thu
1/22
Wed
1/21
Tue
1/20
Fri
1/16
1 month0.233000.236000.234000.231000.23300
3 month0.384000.384000.385000.384000.38600
6 month0.539000.539000.541000.538000.54000
1 year0.840000.841000.840000.837000.84000

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
1/21
Week ended
1/13
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.

Northern Eagle FCU sees healthy growth in 1st year

CU System
NETT LAKE, Minn. (1/23/15)--Northern Eagle FCU, developed last year to serve members of the Bois Forte Band of Chippewa in Minnesota, has accomplished a lot in its first year of operation.

The Nett Lake, Minn.-based credit union has so far amassed more than 350 members and handed out roughly $250,000 in consumer and vehicle loans combined.

Operating out of the Bois Forte Tribal Government Building and Fortune Bay Casino, the new credit union also has served more than 120 people with one-on-one budget, debt-counseling and credit-building services through both its credit builder program and its financial education counseling and workshops.

"Northern Eagle is committed to its mission of helping members of the Bois Forte community achieve their goals of financial independence and security, and we are working towards that goal one member at a time," said Nikki Pieratos, Northern Eagle president/CEO.

This year, Northern Eagle plans to introduce checking accounts and online banking to its line of products and services. The credit union is piloting these services with staff and Northern Eagle's board of directors.

Looking forward to the coming year, Pieratos said: "Our members regularly tell us that we have helped them build their credit score, which allows them access to affordable credit--especially for purchasing vehicles and homes--and that we have provided them hope for the future."

In addition to all Bois Forte Band members and non-tribal members who belong to the immediate households of a band member, Northern Eagle also serves all employees of the tribal government, Fortune Bay Resort Casino, C-Store, Y-Store, the local radio station, and Nett Lake Elementary School employees, students and their families.

The low-income designated credit union was chartered in 2013.

Ga. CU advises how to beat fake check scams

CU System
WARRENVILLE, S.C. (1/23/15)--Love hurts. Though in the case of one South Carolina resident, it can also hurt financially.

Health Center CU, Augusta, Ga., with $49 million in assets, was recently tapped by a local news station to give expertise about fake checks after a woman was tricked into wiring money overseas.

Tina Stephens, a resident of Warrenville, S.C., had recently struck up an online romance with someone from Nigeria who claimed to be a member of the military (WRDW-TV Jan. 21).

One day, Stephens received a message from this individual saying he had the opportunity to come home, but could not pay for the trip because he had lost his debit card.

Stephens then gave him her routing and checking account information, and soon after a check for $5,200 appeared in her account, which she then wired overseas to this individual.

But the check the individual had deposited into her account was fake and, with her legitimate money gone, it left Stephens on the hook for the full amount.

"If you deposit a bad check into your account and your financial institution receives that check back, you have to make good on it," Stacy Tallent, Health Center CU president/CEO, told WRDW-TV.

Tallent also said that it can be difficult to spot fake checks, however, even for tellers.

"The quality of these checks are getting to be so good," he said.

Tallent listed the following clues for consumers who are suspicious of a check's validity:
  • The check is printed on poor quality paper;
     
  • The check lacks a watermark; and
     
  • The check does not have an address for the bank it has been drawn on.
Health Center CU also offers additional information on how to avoid being scammed online or with fake checks on its website.

CU System briefs (1/23/15)

CU System
  • CONCORD TOWNSHIP, Ohio (1/23/15)--A restaurant in Concord Township, Ohio, is being auctioned after being forfeited by its owner who has been connected to the 2013 collapse of  Taupa Lithuanian CU, Cleveland (The Plain Dealer Jan. 22). John Struna, 52, pleaded guilty to conspiracy to commit bank fraud, bank fraud, making false statements and money laundering. As part of his plea, Struna must forfeit the Sunny Street Cafe, a condo and a car--all allegedly purchased with proceeds from the fraud, according to court documents. Alex Spirikaitis, the former CEO of the now-defunct credit union, was sentenced in December to more than 10 years in prison and $15 million in restitution for his role in fraudulent activity at the credit union (News Now Dec. 3). According to court documents, Spirikaitis allegedly embezzled more than $4 million personally from the credit union between 2011 and 2013. Taupa Lithuanian CU had 1,150 members and $24 million in assets at the time it was liquidated by the Ohio Division of Financial Institutions and the National Credit Union Administration in July 2013 ...
  • ST. LOUIS (1/23/15)--Neighbors CU, St. Louis, with $304 million in assets, paid a special dividend equal to 1.15% APY on regular savings accounts in December--1% more than its regular 0.15% APY. Roughly $171,000 was distributed back to members. "We had another great year and would like to thank our members," said President/CEO John Servos ...
  • MADISON, Wis. (1/23/15)--The new year has begun with a number of credit union mergers on the horizon. On Monday, members of $6 million-asset Morrison (Ill.) Community FCU approved a proposed merger with 1st Gateway CU, Camanche, Iowa, with $95 million in assets. The combined First Gateway CU will be headquartered in Camanche with five branches in eastern Iowa and western Illinois (The Quad-City Times Jan. 22). Community CU, La Crosse, Wis., with $117 million in assets, announced its intention to become a division of $402 million-asset CitizensFirst CU, Oshkosh. In 2014, CitizensFirst created a collaborative consolidation model with Lakeview CU, Neenah, and Best Advantage CU, Brillion. Approval from members and regulators is needed before the merger can be complete. The boards of Horizon CU, Spokane Valley, Wash., with $601 million in assets, and United Health Services CU, Spokane, Wash., with $101 million in assets, voted unanimously to pursue a merger. Horizon CU is completing a merger with EdTech FCU, Butte, Mont., with $71 million in assets (Anthem Jan. 20). Technology CU, San Jose, Calif., with $1.8 billion in assets, is merging with Sunnyvale (Calif.) FCU, with $17 million in assets (San Francisco Business Times Jan. 21) ...

N.Y. league surveys Cuomo's remarks for CU opportunities

CU System
ALBANY, N.Y. (1/23/15)--The New York Credit Union Association closely monitored Gov. Andrew Cuomo's State of the State address Monday, paying particularly close attention to his property tax program, which incentivizes local governments to keep property taxes below the proposed cap.
 
The association believes the program--which would serve as a permanent extension of the temporary program launched in 2011--can tie in with pro-credit union legislation that would authorize municipalities to make deposits at credit unions, as local governments look for ways to maximize their returns (The Point Jan. 22).
 
Cuomo's $145 billion budget would increase the state minimum wage to $10.50 per hour by 2017. The proposed budget will increase spending by 2.8% to pay for new education initiatives, infrastructure investments and tax relief programs for homeowners.
 
The budget will be sent to the Legislature for approval prior to the March 31 deadline.

3Q membership growth outpaces Pa. population rate

CU System
HARRISBURG, Pa. (1/23/15)--Pennsylvania credit unions reported stronger membership and loan growth in the third quarter as well as solid earnings, high asset quality and increased capital ratios, according to the Pennsylvania Credit Union Association (PCUA).
 
Membership in Pennsylvania credit unions increased by 1.1% in the third quarter, up from a 0.9% advance in the second quarter, and a 0.8% increase in the year-prior, based on National Credit Union Administration data, the PCUA reported (Life is a Highway Jan. 22). Total membership at all 463 Pennsylvania credit unions finished the period at 3.83 million. The 1.6% 12-month growth in membership is more than two times higher than the state's population growth rate.
 
Lower unemployment and pent-up demand boosted credit union loan portfolios in the third quarter. The 2.7% quarterly jump was higher than the 2.2% second-quarter increase. New vehicle lending again led the way reflected by a 7.2% quarterly increase--eclipsing both the 5.9% second-quarter and 2.4% year-prior growth rates.
 
Used-auto portfolios grew by 4% in the third quarter, followed closely by unsecured personal loans increased at 3.5%. Pennsylvania credit union member business loan portfolios and first-mortgage portfolios each increased at roughly a 3% pace in the quarter, while credit cards were up 2.1%.
 
Earnings were healthy with an annualized return on assets (ROA) totaling 0.56%, a marginal decline over the second quarter's 0.60% ROA, but well above the 0.44% level recorded in the third quarter of 2013.
 
Strong earnings and modest asset growth pushed the Pennsylvania credit union aggregate capital ratio to 11.4% at the end of the third quarter--up from 11.2% at the end of the previous quarter. The state's aggregate ratio now stands at its highest level since 2008.

CU support helps drive Va. prize-linked savings bill

CU System
RICHMOND, Va. (1/23/14)--With the support of state credit unions, a prize-linked savings (PLS) bill passed the Virginia House of Delegates Wednesday by 97-0 vote.
 
In addition, a state Senate version of the bill is expected to pass as early as today, the Virginia Credit Union League reported.
 
"Our credit unions have done a wonderful job in Richmond lobbying for our legislation," said Rick Pillow, league president/CEO. "This week, 80 representatives from credit unions all across the commonwealth met with their respective delegates and senators, not only on our credit union bills, but on dozens of other bills that affect our operations."

Credit unions that participated in this week's Credit Union Days at the General Assembly include:
  • 1st Advantage FCU, Yorktown, with $606 million in assets;
  • ABNB FCU, Chesapeake, with $438 million in assets;
  • BayPort CU, Newport News, with $1.3 billion in assets;     
  • Beach Municipal FCU, Virginia Beach, with $110 million in assets;
  • Beacon CU, Lynchburg, with $120 million in assets;
  • Belvoir FCU, Woodbridge, with $313 million in assets;
  • Bronco FCU, Franklin, with $182 million in assets;
  • Commonwealth One FCU, Alexandria, with $323 million assets;
  • Fairfax (Va.) County FCU, with $293 million in assets;
  • Freedom First FCU, Roanoke, with $355 million in assets
  • Hampton Roads Educators' CU, Hampton, with $29 million in assets;
  • NARFE Premier FCU, Alexandria, with $151 million in assets;
  • NSWC FCU, Dahlgren, with $315 million in assets;
  • Member One FCU, Roanoke, with $665 million in assets;
  • Piedmont CU, Danville, with $53 million in assets;
  • PortAlliance FCU, Norfolk, with $89 million in assets; and
  • ValleyStar CU, Martinsville, with $273 million in assets.
Next week, credit unions from the Richmond, Charlottesville and Waynesboro areas travel to Richmond for their lobbying days.
 
The league is also tracking progress on a parity bill for state-chartered credit unions and banks, which would eliminate the need for state-chartered institutions to seek permission from the state Bureau of Financial Institutions to place or relocate ATMs. The league asked that the measure be introduced and state-chartered banks have since joined credit unions on the legislation.
 
"We view this bill as elimination of red tape for state-chartered credit unions, which could have found themselves at a competitive disadvantage in placing ATMs in prime locations," said Pillow.
 
Prize-linked savings programs are intended to boost the country's annual savings rate--around 4.1% (News Now Dec. 12). Through these products, credit union members and others can receive entries into a cash prize sweepstakes for depositing a certain amount of money into their savings accounts.  The programs have appealed to unbanked and under-banked consumers who were not previously inclined to save money.

In December, the U.S. Senate passed legislation that would allow credit unions and other financial institutions nationwide to offer PLS accounts.

President Barack Obama signed the American Savings Promotion Act into law Dec. 18.

Ten states allow prize-linked savings programs: Connecticut, Indiana, Maine, Maryland, Michigan, Nebraska, New York, North Carolina, Rhode Island and Washington.

Savings more attractive to consumers in 2015, says America Saves

CU System
WASHINGTON (1/23/15)--Consumers are more committed--and capable--of putting money into savings this year, according to America Saves' Personal Savings Index (PSI).
 
Consumers' interest in savings stands at 70% compared with 65% a year ago, according to the group's triannual survey.
 
Savings effort came in at 61% this year compared with 58% last year, and savings effectiveness also edged higher at 59% compared with 56% a year prior.
 
"Last year at this time, we suggested that a post-holiday financial hangover helped explain the decline in savings interest, effort and effectiveness from September 2013 to January 2014," said Stephen Brobeck, executive director of Consumer Federation of America and founder of America Saves. "But the fact that the decline did not occur between September 2014 and January 2015 suggests that Americans are now feeling better about their financial condition."
 
Substantial increases in the savings interest, effort and effectiveness of low- and middle-income households account for almost all of the overall PSI increases.
 
"Our new data suggest that low- and middle-class Americans are feeling more optimistic about their financial situation now than a year ago," Brobeck noted. "Instead of being distracted by heavy holiday spending and debts, they are nearly as interested and active saving today as they were this past September."
 
After learning that the survey dealt with "personal saving for goals ranging from a rainy day fund to retirement," respondents were asked to rate their personal savings interest, effort and effectiveness on a 10-point scale.
 
This year's theme for America Saves and Military Saves weeks is "Set a Goal. Make a Plan. Save Automatically." The Credit Union National Association is among the organizations promoting good savings behavior and a chance for individuals to assess their own saving status during the annual campaign, set for Feb. 23-28.

1 suit vs. Home Depot becomes 2: Judge separates consumers, FIs

CU System
ATLANTA (1/23/15)--Similar to how the data breach case against Target is being handled in Minnesota, a federal judge in Atlanta peeled financial institutions and consumers apart in their class action lawsuits against Home Depot for its role in the massive data breach to hit its stores last year (The National Law Journal Jan. 22).

The two groups, which include at least nine credit unions on the financial institution side, have sued Home Depot for failing to properly protect consumer personal and payment information, leading to 56 million compromised credit and debit cards nationwide.

The incident cost credit unions alone nearly $60 million to cover the reissuing of compromised cards and other breach-related activity, according to numbers compiled by the Credit Union National Association in the aftermath of the incident.

Credit unions were on the hook for just over $30 million as a result of the Target breach.

Home Depot has retained two separate law firms to handle the parallel lawsuits.

"While many of the legal issues and much of the discovery are common to the claims of both, the cases present significant, distinct factual and legal issues," wrote Thomas Thrash, Northern District of Georgia chief judge (The National Law Journal). "Accordingly, to manage the litigation most efficiently, the court hereby creates separate tracks for the consumer and financial institution cases."

Home Depot spokesperson Stephen Holmes said in an email: "Throughout the investigation and mitigation of the breach, our primary focus has been on our customers. We'll continue to deal with any legal matters in due course and in the proper venue."

CUNA continues pressing lawmakers to pass legislation that would require merchants such as Target and Home Depot to meet the same strict personal payment data standards that are imposed upon financial institutions.

Get employed in today's hot job market

Consumer
McLEAN, Va. (1/20/15)--2014 was a great year to land a job. Employers in the United States advertised more job openings last year than they had in the past 14 years, according to the Labor Department (USA Today Jan. 13).
 
This increase suggests that businesses are confident that strong economic growth will continue and that there will be increased demand for products and services. To remain competitive, employers might offer higher pay to attract qualified applicants.
 
If you're a job seeker, don't make these mistakes on your resume, during the interview and when you're following up (College USA Today Jan. 16):
  • Typos. A 2013 CareerBuilder survey found that 58% of resumes have typos. Read your resume out loud to yourself and then have someone else read it. Typos can indicate laziness. It may seem trivial, but a typo could cost you the job if it's between you and another just-as-qualified candidate;
  • Pretty white lies. Don't think prospective employers won't follow up on what's on your resume--they will, and often during the interview. Even if there's a skill you "want" to learn more about, telling an employer you already have that skill doesn't work;
     
  • Not tailoring your resume. Don't submit the same resume and cover letter for every job you apply for. Take the time to tailor these items to demonstrate that you're the best hire;
  • Writing a novel. It might be hard to narrow your abilities and past experience, but employers want highlights of what's compelling about you. Of course you'll list important attributes, but save details for the interview;
     
  • Using the wrong company name. Take an extra peek to be positive that you're sending the right cover letter to the right company. Saving a separate document for each cover letter may help instead of just replacing the company name each time you create a letter;
     
  • Repeating your resume on your cover letter. Employers will read your resume. Your cover letter should be a quick overview of why you're applying for the job and why you're the best candidate;
     
  • Talking negatively about former employers. Doing this only will make the interviewer think you'll do it again--when you're leaving this company. Have some class and remain neutral or positive about previous jobs, especially when you're asked why you're leaving a position; and
     
  • Following up on social media. This can seem impersonal and lazy. Develop a well-written email soon after the interview, and for extra kudos send a hand-written note.
For related information, read the Turning Point "Get Back in the Game After Losing a Job" in the Home & Family Finance Resource Center.

AllPoint, Star networks renew surcharge-free ATM relationship

Products
HOUSTON (1/23/15)--Allpoint Network and STAR Network have renewed a relationship through which STARsf financial institutions and their cardholders have unlimited access to the surcharge-free ATM Allpoint network in the United States.
 
Allpoint is an affiliate of ATM owner/operator Cardtronics Inc. First Data's STAR Network has more than 2 million retail and ATM locations.
 
When established in 2007, the STAR-Allpoint relationship expanded nationwide surcharge-free ATM access by 32,000 U.S. locations for STARsf cardholders. Since that time, Allpoint has grown its U.S. footprint to more than 43,000 ATMs, bringing the total for the STARsf program to more than 50,000 ATMs.
 
"Linking STARsf to Allpoint surcharge-free ATMs has always been about putting STAR financial institutions in a better competitive position," said Pete Korpady, general manager, STAR Network. "Surcharge-free ATM access continues to be a key decision point for consumers when choosing a bank or credit union. Through ongoing expansion of its network, which is focused on convenient retail locations where consumers already live, work and shop, Allpoint has demonstrated its commitment to adding value to the STARsf program, its member financial institutions and ultimately their cardholders."
 
Added Bill Knoll, Allpoint managing director: "Since the STAR Network first linked the STARsf program to Allpoint, we have worked together to help financial institutions deliver the nationwide surcharge-free ATM access their cardholders demand. With the STAR-Allpoint relationship set to move forward, we're expanding and enhancing our joint marketing efforts."

CU Direct shareholders to receive 10th consecutive dividend

Products
ONTARIO, Calif. (1/23/15)--CU Direct, a provider of lending, automotive and strategic solutions to credit unions, will distribute a 3% cash dividend to its 104 credit union shareholders--the 10th consecutive year the company has paid a dividend to its shareholders.
 
In 2014, CU Direct signed new agreements with 68 credit unions, to drive efficiencies, increase loan originations and generate revenue.
 
At year's end, 1,074 credit unions--serving 41 million members--were using the company's lending solutions, including mobile and lending platforms, analytics and reporting, auto-buying tools and retail lending products.
 
"We continue to deliver innovative lending solutions that help credit unions improve member auto-buying and lending experiences, and grow their loan portfolios," said Tony Boutelle, CU Direct president/CEO.
 
CU Direct credit unions funded more than 1 million loans through CU Direct's CUDL lending platform, generating $22 billion in credit union auto loans in 2014. The company helped its credit unions increase loan growth 29% in 2014, and as a result CU Direct credit unions, as an aggregate, became the third-largest auto lender in the nation, after being ranked the sixth largest in 2013.
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