Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

September 16, 2014

Balance needed between 'safety/soundness,' credit availability, CUNA tells FHFA

Washington
WASHINGTON (9/16/14)--Safety and soundness should not be used as a justification to create additional regulatory burden, the Credit Union National Association told the Federal Housing Finance Agency (FHFA) in a letter sent Monday. The FHFA is currently collecting comments on its 2015-19 strategic plan.

The agency stated three goals when planning its 2015-19 strategy: ensuring safe and sound government-sponsored enterprises and Federal Home Loan Banks (FHLBs); ensure liquidity stability and access in housing finance; and to manage the ongoing conservatorships of Fannie Mae and Freddie Mac.

CUNA supports "the vast majority of the concepts enumerated in the agency's strategic plan," but offered several suggestions to improve the plan for credit unions.

Chief among CUNA's concerns is a recent proposal that would revise membership requirements for FHLBs.  The proposal would require all credit unions to hold 10% of assets in residential mortgage loans on a constant basis to become and remain members of the FHLB system. Currently, the rule requires the 10% to be held only at the time membership is approved.

"Based on a very preliminary assessment, the proposed regulation would make it much more difficult for credit unions to maintain access to the FHLB system," reads the letter, signed by Mary Dunn, CUNA's deputy general counsel. "If adopted, this regulation will create another compliance task for affected credit unions as they will be forced to maintain a close watch over their balance sheets to ensure they meet an arbitrary requirement on an ongoing basis."

CUNA's longstanding position on FHLBs, as well as Fannie Mae and Freddie Mac, is that any government regulations should ensure lenders of all types and sizes have access to liquidity on equitable terms. The letter notes that this is reflected in the FHFA's draft strategic plan.

But the plan also makes several references to changing mortgage servicing standards, a topic of concern for CUNA. While CUNA believes that home-retention initiatives and loss-mitigation programs are beneficial, it urges the FHFA to refrain from imposing additional mortgage servicing requirements on behalf of Fannie and Freddie.

CUNA expressed support for several of the agency's recent actions, such as the introduction of Freddie Mac's Structured Agency Credit Risk debt notes, and the development of a common securitization platform, which has been included in the draft strategic plan.

"We applaud the agency's creativity, and encourage the agency to pursue similar initiatives," the letter reads.

Use the resource link below to access the full letter. ReadMore

Other Resources

New NCUA videos fight financial exploitation of seniors

Washington
ALEXANDRIA, Va. (9/16/14)--Aiming to combat the trend of millions of American seniors who become victims of financial abuse, the National Credit Union Administration has released two videos to help consumers recognize this kind of fraud. The videos were released Monday on the agency's YouTube Channel.

The first, titled "Scams Targeting Seniors," is a dramatization of how a consumer can become the victim of a typical scam. The video offers advice to credit union members who suspect they may have been targeted.

The second, titled "Reporting Elder Financial Abuse or Exploitation," explains to credit union managers and staff how to spot, prevent and report cases of financial elder abuse.

"An educated consumer is the first line of defense against fraud or exploitation," NCUA Chair Debbie Matz said. "Research suggests financial abuse is the most common form of elder abuse, and perpetrators can be scam artists, dishonest financial advisors or even caregivers. Our new videos are the latest effort to help credit unions and members understand how this can happen and how to steer clear of trouble."

The agency recently announced an alliance with AARP for a two-year plan of financial education initiatives ( News Now Sept. 12). It also sent a letter to credit unions in September 2013 urging them to review their policies and procedures and ensure staff were trained to recognize signs that financial abuse or exploitation may be occurring.

Use the resource links below to access the videos. ReadMore

House lawmakers seeking breach answers from Home Depot exec

Washington
WASHINGTON (9/16/14)--A bi-partisan coalition of House lawmakers is seeking some answers from Home Depot about its data security practices.

Home Depot confirmed Sept. 8 that a breach of its payment systems  occurred, one that could have affected customers in its 2,200 U.S. and Canadian locations. The company is still determining the full scope and scale of the breach.

Reps. Joe Barton (R-Texas), Jan Schakowsky (D-Ill.) and Bobby Rush (D-Ill.), members of the House Privacy Caucus, sent a letter Monday to  Depot Chief Executive Officer Frank Blake requesting more details about the breach than the company has made public so far. The legislators want that information, and answers to a series of questions, by Oct. 13 ( Bloomberg BNA Sept. 15).
 
The congressmen want the Home Depot executive to detail what lessons, if any, his company learned from earlier breaches--like the Target breach that compromised 40 million credit and debit card accounts as well as personal information for 70 million customers in late 2013.
 
What security measures, the trio asks in their letter, has Home Depot implemented in the wake of that breach and others--like one at Neiman Marcus Group Ltd. The lawmakers also wanted to know about Home Depot's procedures for screening vendors before giving them access the company's sensitive data.
 
The Credit Union National Association strongly advocates on behalf of legislation that would protect financial institutions and consumers from the harm such breaches cause by subjecting merchants to the same federal data protection standards to which credit unions and other financial institutions are already subject. ReadMore

Other Resources

NCUA offers 'road map to success' for FCU organizers

Washington
WASHINGTON (9/15/14)--Groups looking to apply for a federal credit union charter have a new resource from the National Credit Union Administration.

The NCUA's Federal Credit Union Charter Application Guide offers step-by-step instructions to help potential credit union organizers get information on what the process entails, and what the NCUA expects in a charter application.

"This new guide is essentially a road map to success, explaining in detail how to complete the process," said NCUA Chair Debbie Matz. "It also helps organizers focus on key actions, from finding their niche in an increasingly complex and competitive marketplace and raising capital to preparing an effective application."

The guide breaks down the chartering process into five steps:
  • Part 1: Researching a federal charter, selecting a credit union name, establishing a field of membership, deciding what kind of charter to request and determining whether to seek a low-income designation;

  • Part 2: Identifying subscribers, securing funding for start-up costs, finding a location and surveying the potential membership;

  • Part 3: Finding support resources, identifying credit union officials and management, creating a business plan, deciding on what products and services to offer, management, recordkeeping, establishing policies and continuity planning;

  • Part 4: How the NCUA acts on charter applications; and

  • Part 5: Checklists, worksheets and sample forms.
It also includes answers to frequently asked questions about the amount of time required to obtain a charter, the amount of start-up capital necessary and the availability of consulting services from NCUA's Office of Small Credit Union Initiatives.

Use the resource link below to access the complete guide. ReadMore

Inside Washington (09/16/2014)

Washington
  • WASHINGTON (9/16/14)--The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, has announced a settlement of $550 million with HSBC North America Holdings Inc., related companies and specifically named individuals. The settlement resolves claims alleging violations of federal, Virginia and District of Columbia securities laws in connection with private-label mortgage-backed securities purchased by Fannie Mae and Freddie Mac during 2005-2007.  Pursuant to the agreement, HSBC will pay $374 million to Freddie Mac and $176 million to Fannie Mae. Only two of the 18 lawsuits FHFA filed in 2011 have not been resolved ...

  • WASHINGTON (9/16/14)--An Internet-based operation that finds potential borrowers for mortgage refinancing lenders will pay a $500,000 civil penalty to settle Federal Trade Commission charges that it deceived consumers with ads that falsely claimed they could refinance their mortgages for free. The FTC charged that the Colorado-based Intermundo Media, LLC, using the name "Delta Prime Refinance," designed and distributed the deceptive refinancing ads as a part of its lead generation service. Delta Prime Refinance made deceptive and unsupported claims in its advertisements that overstated how much consumers could reduce their payments if they refinanced their mortgages, how low their annual percentage rate would be, and how easy it would be for them to qualify for refinancing, according to the complaint. In addition to paying the $500,000 civil penalty, Intermundo Media is prohibited from: misrepresenting the terms and conditions of any financial product or service, and any term or condition of a mortgage credit product and disclosing, selling, or transferring the consumer data obtained through the Delta Prime Refinance lead generation service ...
ReadMore

Other Resources

CUNA: SBC testimony 'important step' toward reg. relief bills' passage

Washington
WASHINGTON (9/16/14)--The Credit Union National Association will testify before the Senate Banking Committee today in a hearing titled "Examining the State of Small Depository Institutions."

CUNA's testimony will be focused on the current regulatory burdens facing credit unions, bills it supports heading into the final months of this Congress and concerns with proposals from the National Credit Union Administration and the Federal Housing Finance Agency.

"We're hopeful this hearing is an important step toward preparing House-passed bills for Senate consideration during the post-election 'lame duck' session," said Ryan Donovan, CUNA's senior vice president of legislative affairs. "This is the time of year we hear a lot of discussions about potential packages of legislation that could be considered before Congress adjourns."

Dennis Pierce, CEO of CommunityAmerica CU, Lenexa, Kan., $1.9 billion in assets, and chair of the CUNA board, will testify on behalf of CUNA. He will speak about the effect that the more than 180 regulatory changes from at least 15 federal agencies since the start of the financial crisis have impacted credit unions, particularly small ones.

"It's not that any particular regulation presents an unmanageable situation for credit unions, but the accumulation of regulatory requirements and the frequency with which these requirements change that contributes to a degradation of member service because it diverts finite resources away from our purpose and mission," he said.

CUNA will recommend that the Senate take up the following bills:
  • Privacy Notice Modernization Act (S. 635), which would require financial institutions to send privacy policy notifications when the policy is changed, rather than on an annual basis, as is currently required;

  • Credit Union Share Insurance Fund Parity Act (S. 2698/2699), which would extend share insurance coverage on Interest on Lawyer Trusts Accounts and other similar trust accounts; and

  • Capital Access for Small Financial Institutions Act (S. 1806), which would allow state-chartered, privately insured credit unions to apply for membership in the Federal Home Loan Bank (FHLB) system.
Pierce will also speak to CUNA's concerns with the NCUA's risk-based capital proposal--concerns that have been echoed by many members of Congress (News Now Sept. 9)--and concerns with new proposed rules governing membership in the FHLB program.

Use the resource link below to access Pierce's written testimony that has been submitted by the committee. ReadMore

This week: Economic hearings, House to consider reg. relief bills

Washington
WASHINGTON (9/16/14)--This week likely marks the final pre-election sessions for Congress, and while the top priority is to pass a bill to fund the government past the end of the year, a number of other bills are likely to be considered.

The House will consider several bills under suspension of the rules this week. The Credit Union National Association is closely following the Insurance Capital Standards Clarification Act, which includes CUNA-supported language relating to points and fees calculations in the Consumer Financial Protection Bureau's ability-to-repay rule.

The House is also expected to consider the American Savings Promotion Act (H.R. 3374), which would allow financial institutions to offer raffle-based, prize-linked savings accounts. CUNA testified in support of this bill in July ( News Now July 16).

CUNA will be among several financial services organizations testifying at a Senate Banking Committee hearing today, along with federal regulators including the National Credit Union Administration. See News Now 's coverage of the hearing in today's issue.

Other hearings for this week include:
  • Wednesday, 10 a.m. (ET): House Financial Services Committee, "Oversight of the Financial Stability Oversight Council (FSOC)." The hearing will discuss the FSOC's operations, policies, and procedures. Patrick Pinschmidt, FSOC deputy assistant secretary, and Nicole Clowers of the Government Accountability Office, will testify;

  • Wednesday, 2:30 p.m. (ET): Senate Banking subcommittee on economic policy, "Who is the Economy Working For? The Impact of Rising Inequality on the American Economy." The witnesses will be: Heather McGhee, Demos; Amir Sufi, University of Chicago; and Claudia Viek, California Association for Micro Enterprise Opportunity. Additional witnesses may be added; and

  • Thursday, 11 a.m. (ET): Senate Banking Committee, "Assessing and Enhancing Protections in Consumer Financial Services." The witnesses will be: Travis Plunkett, The Pew Charitable Trusts; Sheri Ekdom, Lutheran Social Services of South Dakota; Oliver I. Ireland, Morrison and Foerster; and Hilary Shelton, NAACP.
ReadMore

Other Resources

CFTC fines Morgan Stanley for alleged 'red flags' failures

Washington
WASHINGTON (9/16/14)-- The U.S. Commodity Futures Trading Commission (CFTC) announced Monday that it has imposed a fine against Morgan Stanley Smith Barney LLC (Morgan Stanley) for failure to "diligently supervise" the opening and handling of accounts under "know your customer" rules.
 
The CFTC said its order requires Morgan Stanley to pay a $280,000 civil monetary penalty and to disgorge commissions it earned from the subject accounts in order to address its "unlawful conduct."
 
Specifically, the CFTC order finds that Morgan Stanley "failed to diligently supervise its officers', employees', and agents' opening and handling of accounts held at Morgan Stanley in the name of a family of companies called SureInvestment."
 
SureInvestment is purported to operate a hedge fund based, in part, in the British Virgin Islands, which is deemed a "high-risk jurisdiction" under Morgan Stanley's compliance procedures. That designation, said the CFTC, should have subject the entity's accounts to special scrutiny and due diligence, assuring that employees were alert to any red flags by SureInvestment's account opening documents.
 
The CFTC order found that despite numerous red flags presented by SureInvestment's account opening documents, which the agency said included audits "filled with typos and other suspicious irregularities for an entity that turned out not to exist," Morgan Stanley opened the accounts. The order alleges that that these accounts were ultimately used by the owner of SureInvestment to continue an ongoing $35 million Ponzi scheme based in the United Kingdom. Earlier this year, that owner was sentenced to seven years imprisonment after pleading guilty to criminal charges brought by the U.K. Financial Conduct Authority, a CFTC release said. ReadMore

Other Resources

FOMC meeting watch: Change in forward guidance expected

Market
WASHINGTON (9/16/14)--Should the Federal Open Market Committee's (FOMC) quantitative easing program come to an end in October as many predict, the Federal Reserve's monetary-policy making body likely then must decide how it will determine when to raise interest rates from near-zero levels.

Evidence of what will go into that decision could emerge Wednesday when the FOMC concludes a two-day meeting and releases its always-anticipated policy statement.

Some economists believe at the end of the meeting the Federal Reserve will announce an alteration to the forward guidance that will shape that decision, often referred to as its "exit strategy."

But as mere statements about monetary policy from the Fed can shake up markets dramatically, there's no guaranteeing what the FOMC will release, Paul Ashworth, Capital Economics chief North American economist, told Forbes.com .

"Whether or not the forward-looking guidance will be tweaked at this upcoming meeting, is nevertheless, still up in the air," Ashworth said. "It is possible that officials can't reach an agreement on the exact wording. With the first rate hike still at least six months away, a decision doesn't need to be taken immediately."

The Fed has maintained that it plans to keep interest rates pinned down long after the asset-purchase program expires, especially if "projected inflation continues to run below the committee's 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored" ( MarketWatch Sept. 15).

If that language is removed from the policy statement this week, however, that could signal a hastening of when the FOMC plans to raise those rates from mid- to late 2015 to perhaps March of next year, according to some.

"We expect the Fed will begin to set the stage (this) week by signaling that its zero-bound interest rates policy will soon be history," Bernard Baumohl, chief global economist at The Economic Outlook Group, told MarketWatch . ReadMore

Other Resources

Business Rates

Market
Daily Financial Rates -- 2014-09-16

Financial Rates


Tuesday, September 16, 2014

03:55 AM CDT

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

TermTue
9/16
Mon
9/15
Fri
9/12
Thu
9/11
Wed
9/10
1 month0.010.010.010.010.01
3 month0.020.020.020.020.02
6 month0.050.050.050.050.05
1 year0.110.110.110.110.11
2 year0.580.580.580.580.56
3 year1.061.071.071.071.06
5 year1.801.831.791.791.76
7 year2.262.292.222.222.19
10 year2.602.622.542.542.50
20 year3.093.103.023.012.97
30 year3.343.353.273.263.23

TREASURY BILLS

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

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

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermTue
9/16
Mon
9/15
Fri
9/12
Thu
9/11
Wed
9/10
high0.3120.3120.3120.3120.312
low0.0500.0500.0500.0400.050
near closing bid0.0800.0800.0700.0800.070
offered0.1000.2700.0900.2700.270
effective rate20.1000.1000.1000.1000.100

FREDDIE MAC (Mortgage commitments, 30 days)

TermTue
9/16
Mon
9/15
Fri
9/12
Thu
9/11
Wed
9/10
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermTue
9/16
Mon
9/15
Fri
9/12
Thu
9/11
Wed
9/10
30 year3.8703.8423.8073.8053.784

LIBOR

TermTue
9/16
Mon
9/15
Fri
9/12
Thu
9/11
Wed
9/10
1 month0.214000.210000.209000.211000.20900
3 month0.365000.363000.361000.361000.36100
6 month0.539000.539000.537000.537000.53600
1 year0.845000.845000.844000.846000.84400

COMMERCIAL PAPER (Financial, 90 days)

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

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

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


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

Other Resources

Consumer Rates

Market

Informa Research Services, Inc.
Daily Rate Comparison

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

Consumer Loan Products Credit Unions Bank Average Difference
Unsecured Personal Loan - $5,000 - 4 Years 10.17% 10.33% -0.16%
New Auto Loan - 5 Years 2.61% 3.82% -1.21%
Used Auto Loan - 2 year Old - 4 Years 2.77% 4.02% -1.25%
HELOC - 80% LTV - $50,000 4.13% 4.40% -0.27%
HE Loan - 80% LTV - $50,000 - 15 Years 5.66% 5.96% -0.30%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 4.22% 4.28% -0.06%
30 Year Fixed Jumbo 4.30% 4.23% 0.07%
5/1 Year ARM Conforming 2.95% 2.94% 0.01%

Credit Card Products Credit Unions Bank Average Difference
Platinum 9.01% 10.48% -1.47%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.95 $33.42 $-7.47
Reward 9.99% 13.66% -3.67%
Annual Fee $26.71 $99.74 $-73.03
Maximum Late Fee $22.66 $33.73 $-11.07

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.78% -0.19%
Indirect B Tier New Auto Loan - 5 Years 5.32% 5.31% 0.01%
Indirect C Tier New Auto Loan - 5 Years 7.48% 6.76% 0.73%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Monday, September 15, 2014. For detailed disclosures click here.

ReadMore

Other Resources

Hession--in 100M T-shirt--hits home run with anthem rendition

CU System
NAPERVILLE, Ill. (9/16/14)--Clad in a "100 Million Memberships" T-shirt, Illinois Credit Union League (ICUL) President/CEO Sean Hession delivered a stirring rendition of "The Star-Spangled Banner" before Sunday's game between the Chicago White Sox and the Minnesota Twins.
 
Nearly 900 credit union advocates celebrated the movement's 100 million memberships milestone during Illinois Credit Union Day at U.S. Cellular Field in Chicago.


 
"This was a great day for Illinois credit unions and the national credit union movement," said Hession, who also happens to be a former principal first tenor and tenor soloist for the National Men's Chorus in Washington, D.C.
 
"With 100 million members, credit unions are a very big deal, and we will continue telling our story about how credit unions make a difference every day in the lives of their members and consumers," he said.
 
Credit unions hit more than 100.1 million memberships, a number equating to one-third of the U.S. population, according to the Credit Union National Association's June survey of monthly credit union estimates.
 
Prior to the game, the Chicago White Sox paid tribute to longtime ICUL lobbyist Dick Lockhart as a "Hero of the Game" for his service in World War II in the U.S. Army, and for his experience as a prisoner of war. The 90-year-old Lockhart is still active lobbying Illinois state lawmakers. He has spent 38 years supporting the interests of Illinois credit unions.
 
He was instrumental in the formation of the Credit Union Political Action Council in 1976 and structuring the grassroots lobbying system for Illinois credit unions. Lockhart also assisted with the re-codification of the Illinois Credit Union Act in 1979 and field of membership expansion legislation for community-chartered credit unions in 1985. ReadMore

Member growth continues despite mill closure

CU System
EVERETT, Wash. (9/16/14)--For the last 75 years, even in the most difficult of times, Mill Town CU has been there for the community it serves.

Julie Benson, treasurer-manager of what was then called the Scott Employees CU, assists a member in 1974. Now called Mill Town CU, the Everett, Wash.-based financial institution celebrates its 75th anniversary this year. (Mill Town CU Photo)
That included when the Kimberly-Clark mill, which employed many of the Everett, Wash.-based credit union's members, closed in 2012, impacting the town far and wide. 

"The closing of the (mill) was hard on our membership, but we worked with anyone that needed help," Laura Leuze, president/CEO of the $47 million-asset credit union, told The Herald Business Journal this week (Sept. 15).

Mill Town granted extensions, reduced payments and shifted to interest-only payments to aid former mill employees until they gained solid financial footing, according to The Herald Business Journal.

It's that type of commitment and service by credit unions that has helped fuel membership increases across the country, as the credit union movement recently surpassed 100 million memberships nationwide.

In Everett, even after those who had lost their jobs moved away, they still came back to the credit union to do their banking. The credit union still serves more than 2,800 members.

"They would always run into people they had worked with and they would catch up," Cathy Vanderberg, board member for Mill Town CU, told the Business Journal. "About 50 people watched the demolition of the oldest mill building from the credit union building. It was very emotional."

Since opening in 1939, the credit union has helped residents with mortgages, college tuition and auto loans, among other services.

While the credit union's membership base was extended beyond mill workers in the early 2000s, the people who worked at the mill, the same people who founded the credit union, continue to serve as the bedrock of the membership base. 

"The credit union was started by people before we were even born," Leuze told The Herald Business Journal. "We have generations of memberships coming from just former mill employees. We have to be good at what we do and get to personally know everybody."

Festivities to celebrate Mill Town CU's 75th anniversary are scheduled for later this fall. ReadMore

No stretch for CU to loan to fledging yoga studio

CU System
NEWPORT NEWS, Va. (9/16/14)--Bayport CU was recently able to secure a $50,000 member business loan for members Sue and Michael Blei, helping the couple open a yoga studio after they had been turned away by local banks.
 
The Bleis' story and their experience with $1.3 billion-asset Bayport CU, Newport News, Va., was featured in the Sept. 14 edition of The Virginian-Pilot .
 
"It's the business loans like this that really makes this job enjoyable," Denise Owen, Bayport CU commercial banker, told News Now . "Fifty thousand dollars is not a huge business loan, but it really made a difference in their lives. It's always worth the effort."
 
The seeds of the Bleis' dream of opening a studio were planted in 2008 when Sue began practicing yoga to relieve back problems and sleep better. She enjoyed yoga so much she became an instructor and began teaching classes in the Chesapeake and Suffolk areas.
 
She wanted to open a studio to help people relieve their aches and pains, she told The Virginian-Pilot . But without any business experience, the Bleis' business loan applications were turned away by local banks. 
 
But Owen took a personal interest in the Bleis' member business loan application. She noticed that Michael had been a member of the credit union for more than 30 years, and the couple had a strong personal credit history. Owen enlisted the couple in the U.S. Small Business Administration's Express Loan program, which guarantees 50% of loans to qualified borrowers.
 
With a minimum amount of paperwork, the Bleis were finally on the path to serenity.

To read the full article, use the link. ReadMore

PCUA, Pittsburgh FHLB pursue cooperative benefits, Part 2

CU System
HARRISBURG, Pa. (9/16/14)--The Pennsylvania Credit Union Association (PCUA) and the Federal Home Loan Bank of Pittsburgh, through recent collaborative efforts, have initiated a partnership onto which each organization hopes to build. 

( Editor's note: This is the second of a two-part series on the Federal Home Loan Bank system. Part One was called "Where FHLBs can fit in CU operations" and ran Sept. 15. See resource link ).
 
Given the cooperative, member-owned structure of both credit unions and the Federal Home Loan Banks--and thanks to a recent pickup in credit union membership at the FHLB of Pittsburgh--the relationship that's building between the Pennsylvania league and the FHLB of Pittsburgh seems to both to be a natural fit.
 
Christina Mihalik, PCUA vice president of government affairs, told News Now that when the association detected growth in credit union membership in the FHLBank, it reached out to strengthen the relationship there.
 
"If credit unions are partnering with a third party, we figured it would benefit us to reach out and establish that relationship," especially because we have like-minded, cooperative issues we can work on with the Federal Home Loan bank, Mihalik added.
 
That collaborative work has ranged from general advocacy on common issues such as regulation, consumers and housing, to efforts to address specific issues such as the National Credit Union Administration's risk-based capital proposal. Very notably, the FHLB system's leaders wrote a comment letter to the NCUA earlier this year outlining its concerns over the proposal and how it might affect its credit union members.
 
And on the operations side, of course, the cooperative banks help their members by offering funding for liquidity for short-term needs, lower-cost funding for mortgages and asset-liability management, and funds for housing and community development ( News Now Sept. 15).
 
"We are really a business partner to financial institutions, and they've come to realize that's exactly what we are. It's a symbiotic relationship; it's a partnership," John Foff, FHLB of Pittsburgh's business development manager, told News Now .
 
The first building block of the relationship, described by both organizations now as growing, may have occurred when FHLB of Pittsburgh's CEO Winthrop Watson spoke at the league's annual conference two years ago.
 
"The managing officers of the local credit unions appreciated his words, and I think that that's helped us in our relationship with credit union financial institutions," Foff said. 
 
More recently, the cooperative bank has reached out to credit unions in Pennsylvania by coordinating efforts such as setting up a booth at the PCUA's annual fall leadership conference.
 
Mike Wishnow, PCUA senior vice president of communications and public relations, says that the FHLB of Pittsburgh has been reaching out to credit unions regularly.
 
"The FHLB banks deserve a lot of credit because they're doing the outreach," Wishnow told News Now . They reach out by "sponsoring efforts, helping in advocacy, and keeping credit unions informed on what they're doing."
 
Whatever the spark, over the last few years the FHLB of Pittsburgh has witnessed credit union membership rise substantially. Just a few years ago, only four credit unions in the state utilized the cooperative bank.
 
That number has jumped to 37, and about a dozen credit unions are interested in becoming members as well, according to Foff. 
 
"As more and more (credit unions) use their services and are pleased with their services," the more the word is spread, Mihalik told News Now . "Word of mouth is everything. A credit union referral is the best way" to spread the word. ReadMore

Fin. lit. ideas percolate during NerdWallet TweetChat

CU System
MADISON, Wis. (9/16/14)--In a rapid-fire discussion Monday on Twitter, credit union leaders from across the country imparted loads of advice on how to ramp up financial literacy for high school and college students.

The host of the "TweetChat," personal finance website NerdWallet.com , fired off a round of questions during the hourlong session, and a number of the most tuned-in financial literacy minds in the credit union movement were on hand to give their answers.


NerdWallet , using its Twitter handle @NW_Banking and the hashtag #CUFinLit, first asked, "How are credit unions currently working to improve the (financial literacy) of young adults in their communities?"

Among the responses, Tena Lozano, executive director of the Richard Myles Johnson Foundation, tweeted: "Many CUs offer Reality Fairs--a financial simulation where teens take the role of an adult."

Later, NerdWallet asked: "How do you engage with parents and incentivize them to help educate their children or finances?"

Answered representatives from Christian Financial CU: "Parents are key decision-makers for teens. We use every opportunity to get in front of parents, like parent orientation meetings."

To read more questions and answers, search Twitter for the hashtag #CUFinLit.

Other participants included:
  • Ken Worthey, financial literacy and outreach analyst, National Credit Union Administration's Office of Consumer Protection;
     
  • Gigi Hyland, executive director, National Credit Union Foundation;
     
  • Rebekah Monroe and Shannon Bartlett, marketing manager and marketing specialist, respectively, Christian Financial CU, Roseville, Mich., with $325 million in assets;
     
  • Samantha Salazar and David Rodriguez, financial education instructor and financial education manager, respectively, Generations FCU, San Antonio, with $519 million in assets;
     
  • Jess Bedsole, social media producer, Alliant CU, Chicago, with $8.2 billion in assets;
     
  • Wendy Loeber, loan officer, CU Community CU, Springfield, Mo., with $94 million in assets; and
     
  • Alysha Klein, Young and Free Florida spokester, Tropical Financial CU, Miramar, Fla., with $566 million in assets.
ReadMore

Filene survey: Economy still challenging consumers

CU System
MADISON, Wis. (9/16/14)--Macro-economic data indicates the economy is on the mend, but a recent survey by the Filene Research Institute found that 36% of the "every day people" respondents still think the economy is in a recession or depression.
 
Filene noted that the Absolute Strategy Research survey will not tell credit unions what to do, but will help them understand Americans' changing feelings about saving and borrowing.
 
U.S. households stubbornly remain risk averse, despite the stock market delivering annualized 20% growth. Forty-two percent said they are not prepared to take any risks with their savings--higher than that recorded in June 2009, the survey found.
 
"Perhaps still stung by the losses in real estate and equity markets, most respondents want to accept little risk in their savings," the report noted. "Despite four years of strong investment returns, credit unions' arrays of risk-free savings in the form of share accounts, certificates, and IRAs align with this risk aversion."
 
Regarding income inequality, 61% responded that the difference in incomes between rich and poor has increased, and 63% said that the difference in income between rich and poor has become too large.
 
Of those who carry debt, 54% plan to reduce it in the coming year, and 30% don't plan to access additional credit. Forty-two percent of borrowers still think their level of debt is too high compared with their income level. ReadMore

CO-OP webinar covers tokenization, Apple Pay

CU System
 RANCHO CUCAMONGA, Calif. (9/16/14)--CO-OP Financial Services will present a free webinar on "Tokenization, NFC and Apple Pay" at 1 p.m. (ET) Sept. 24.

The webinar will explore new member engagement and revenue opportunities that tokenization and Apple Pay may offer credit unions.

"The Sept. 9 announcement on Apple Pay has generated almost unprecedented interest by consumers and institutions alike in this new mobile payment system, and on the facilitating tokenization process and [near-field communication] standard," said Stan Hollen, CO-OP Financial Services president/CEO. "We believe this important industry development means greater security for members and new revenue opportunities for credit unions."

The webinar will be presented by Michelle Thornton, CO-OP manager of core products, and Caroline Willard, executive vice president of markets and strategy.

Among the issues the webinar will address:
  • Card tokenization, NFC and Apple Pay terms and technology;
  • Questions about enrollment;
  • Benefits to members and opportunities for member engagement; and
  • Revenue and growth opportunities for credit unions.
To register, use the link. ReadMore

Metro CU mortgage program provides hope for neglected housing segment

CU System
CHELSEA, Mass. (9/16/14)--A new mortgage program from $1.3 billion-asset Metro CU, Chelsea, Mass., is offered with the hope of revitalizing a city faced with housing challenges.

The city of Lawrence, near Chelsea, has been hit with a wave of foreclosures and blighted by fire in recent years ( Eagle Tribune Sept. 15.)

The "At Home in Lawrence" program, offered by Metro CU in conjunction with MassHousing and the city of Lawrence, is aimed at making it easier for city residents to obtain mortgages and avoid foreclosure. At the same time, the cost of renovations and repairs can be covered within the mortgage.

Insured by MassHousing and financed by Metro CU, the program offers expanded loan-to-value ratios and less restrictive reserve and credit requirements for low- and moderate-income borrowers.

"Our relationship with MassHousing shares many common goals. One of the strongest is to give affordable lending options to residents in our communities and help them achieve their own financial goals," said Robert Cashman, Metro CU president/CEO. "The At Home in Lawrence Program further enables Metro to expand efforts regarding property revitalization and home ownership growth in the city of Lawrence."

"Lower- and moderate-income borrowers now have one combined resource for city programs, homebuyer education and mortgage financing to help qualified homebuyers purchase homes and help homeowners renovate their homes and revitalize their neighborhoods," said MassHousing Executive Director Thomas R. Gleason. ReadMore

Millennials: Rethink credit vs. debit

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

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

CUNA Mutual's TruStage protecting 15M members

Products
MADISON, Wis. (9/16/14)--CUNA Mutual Group announced that its TruStage Insurance Program now protects more than 15 million members. 
 
Click to view larger image Members of the TruStage team in CUNA Mutual Group's Madison, Wis., office gather with CEO Robert Trunzo to recognize TruStage reaching 15 million members insured. From left, Naheed Bleecker; Sarah Farino; Susan Sachatello, senior vice president of TruStage; Trunzo; Nick Mason; and Krischelle Howl. (CUNA Mutual Group Photo)
More than 1 million credit union members have been added to the TruStage program in the last year--a rate of 2,700 newly insured members each day, CUNA Mutual said.
 
"We are committed to helping consumers learn about insurance and confidently choose coverage in a way that is accessible and empowering. In the years ahead, we look forward to welcoming even more consumers to TruStage," said Robert N. Trunzo, CUNA Mutual Group president/CEO.
 
The 15 millionth member belongs to $5 billion-asset CEFCU, Peoria, Ill. The member purchased a TruStage accidental death and dismemberment insurance policy using TruStage's FastApply AD&D online application process. Introduced in 2013, FastApply AD&D is an option for members who prefer to research, apply and buy entirely online--usually in three minutes or less. 
 
CEFCU uses TruStage online advertising on its website, promoting insurance products designed for members and leading them to TruStage.com.
 
In the past year, TruStage has offered members more digital options that include learning and engagement opportunities on Facebook and a streamlined mobile experience. Similarly, credit unions have incorporated TruStage digital assets on their websites to educate members about the brand's protection products. ReadMore

Other Resources

RSS print
News Now LiveWire
Member growth at #creditunion continues despite mill closure #NewsNow http://t.co/rNRjLBjvX9
14 minutes ago
CA/NV league pres/CEO Dykstra in @sacbee_news: Retailers should hold accountability in data breaches http://t.co/odyHd9N2OG
1 hours ago
Fin. lit. ideas percolate during .@NW_Banking #tweetchat #NewsNow http://t.co/nSS9Iiw0e0
1 hours ago
New video from @mncreditunions Minnesotans share why they love their #creditunions http://t.co/ywfHfVcqm4
1 hours ago
.@BankOnMo hits the gas with social contest at Mo. #creditunions https://t.co/dxfkgq5xDv
2 hours ago