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NEW: Fryzel: CU 'Common Purpose' Is Powerful Legacy

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WASHINGTON (2/26/13, UPDATED 11:11 a.m. ET)--National Credit Union Administration board member Michael Fryzel told a crowd of more than 4,200 credit union officials that their joint vision and values rescued the industry from the recent recession and honored what their predecessors had created.

He was addressing the Credit Union National Association's 2013 Governmental Affairs Conference held here through Thursday.

Fryzel said that during the country's recent financial crisis, the "people who made up the credit union system held together, and because of that, the system held together."

"We all rolled up our sleeves. All of us hauled new timbers. We rebuilt the system ourselves, a system that is going to last," he said.

The NCUA board member also applauded credit unions for continuing to lend to their members and members' families to help them through difficult times. The credit union audience got a pat on the back for being part of a system that accepts challenges together and can take pride in their accomplishments.

Fryzel encouraged the credit union representatives to continue to live out their vision.

"Vision" is a powerful theme of this year's GAC. During the Monday morning session, CUNA President/CEO Bill Cheney presented a bold new, overarching strategic vision for the credit union movement: A vision in which "Americans choose credit unions as their best financial partner."


He outlined this strategic vision, and how credit unions can "Unite for Good" to achieve it, was the focus of the CUNA leader's remarks to the 4,200 participants at the opening general session of CUNA's 2013 Governmental Affairs Conference.

Cheney stressed that developing a vision where Americans choose credit unions as their best financial partner stemmed from more than one year of discussions with credit union and league leaders, credit union system partners, and CUNA's own leadership.

NEW: Bachus to GAC: Congress May Revisit Interchange Cap This Year

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WASHINGTON (2/27/13, UPDATED: 12:45 p.m. ET)--Federal lawmakers may revisit the topic of interchange fee cap legislation this year, Rep. Spencer Bachus (R-Ala.) said in a Tuesday speech before the Credit Union National Association's 2013 Governmental Affairs Conference in Washington.

Bachus, who is the the immediate past chairman and still a senior member of the House Financial Services Committee, said the interchange fee cap affected local institutions, and basically didn't affect larger financial institutions. "It affected debit cards and things that you market, and not so much the credit card," he said. Earlier today, committee chairman Rep. Jeb Hensarling (R-Texas) said he "will not rest" until Congress repeals interchange fee cap provisions. "Federal price controls were wrong yesterday, federal price controls are wrong today, federal price controls will be wrong tomorrow," Hensarling said of the interchange fee cap.

The Dodd-Frank Wall Street Reform Act, which Bachus said was a result of "the behavior of a few and not main street institutions," punishes credit unions and small financial institutions that were innocent victims. "We're going to look very hard [at Dodd-Frank]," and credit unions could see bipartisan support for taking off some unnecessary, needed, uncalled for parts of Dodd-Frank that impact credit unions and other small financial institutions, he added.

The structure of the Consumer Financial Protection Bureau is another topic that could soon be addressed in a bipartisan manner, Bachus said. He noted that House and Senate members are in serious talks to form a bipartisan commission to govern the bureau. "I think that you will find that approach much fairer and less dictatorial," he said.

At GAC, Cheney Calls On CU System To 'Unite For Good'

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WASHINGTON (2/26/13)--Credit Union National Association President/CEO Bill Cheney on Monday presented a bold new, overarching strategic vision for the credit union movement: A vision in which "Americans choose credit unions as their best financial partner."

Click for slide show Community outreach is a key part of CUNA's new vision for the credit union system, says President/CEO Bill Cheney. \"Credit unions aren't just from the community, or in the community that they serve, credit unions are of the community. We quite literally were formed by the community. Whether your community is a parish, or a city, or a county, or a state, or a company, or an association, you are part of that fabric of that community, and that is an important fabric,\" he tells his GAC audience. (CUNA photo)

Outlining this strategic vision, and how credit unions can "Unite for Good" to achieve it, was the focus of the CUNA leader's remarks to the 4,200 participants at the opening general session of CUNA's 2013 Governmental Affairs Conference.

Cheney stressed that developing a vision where Americans choose credit unions as their best financial partner stemmed from more than one year of discussions with credit union and league leaders, credit union system partners, and CUNA's own leadership.

All agreed a new vision must be rooted in credit unions' shared values, including collaboration, a focus on members, community involvement, and a dedication to financial well-being. Cheney told a packed GAC audience that he is presenting a broad vision for the movement now because the time for credit unions has never been better.

Cheney explained that a cultural shift is happening in America that aligns perfectly with the credit union movement. "People want to do business with people who have their best interests at heart...This cultural shift is right in our wheelhouse." People are interested in more values-based decision making and there is a move away from big corporations and big banks, he said.

The CUNA CEO cited Nationwide Insurance, which now touts "doing what's right for our members" in ads, as one prominent example of this cultural shift toward values-based businesses. Bank Transfer Day in late 2011 was another example, one that grew out of consumer frustration with new fees from big banks and prompted consumers by the thousands to discover credit unions through, the new CUNA/league consumer website.

"Our advantage is a values-based business model of credit unions…People over profit, banking with a conscience, focusing on members, an organization that's built around your needs," Cheney added.

To realize a vision where Americans choose credit unions as their best financial partner, the credit union system will need to work collaboratively to advance three broad goals:

  • Remove barriers: This will require actively participating in credit union grassroots activities and the political process. The CUNA/League "Plan to Win," which offers detailed involvement prescriptions and accountability measures for credit unions, leagues and CUNA, can help provide a roadmap for success.
  • Raise awareness: Credit unions can achieve this by expanding their outreach and image in their community, taking greater advantage of social media, becoming a trusted resource with their local media, and participating in state and regional co-operative advertising campaigns. These avenues can lead to success. Credit unions can use tools, programs and channels that already exist to share their stories in local communities.
  • Foster service excellence: Cheney stressed that the system must work together so that credit unions across the board can offer a complete set of forward-looking and constantly improving financial services to members of all backgrounds and life stages.

Cheney said these efforts can create a major accomplishment for the credit union system over the next decade.

Two key measures of success, he offered, would be to:

  • Increase PFIs: He suggests the movement aim for raising the number of members who consider their credit union to be their primary financial institution (PFI) from today's 40 million up to 50 million by 2023. Another 10 million in 10 years is achievable, and would be clear evidence that more Americans are choosing credit unions as their best financial partner, Cheney explained. The credit union movement will gain immeasurably from all the attendant benefits--in advocacy, growth, and strength--that emanate from PFI relationships, he noted.
  • Provide more member value: He offered a goal for member value--what consumers save in better rates and lower fees by using credit unions rather than banks--of $20 billion annually by 2023. Today, that figure is about $6 billion. But Cheney noted the second goal compliments the first: The more PFI members we have, the more value we return. And the more value they see, the more people are attracted to credit unions, he said.

CUNA will be working with leagues and credit unions in the coming weeks and months to advance this common vision. And Cheney announced that a new web page,, has already been launched with an overview of the initiative and a video on why the time is so right for credit unions to unite for good, with more resources and key information still to come.

"We need to unite for good. We need to unite for the good that credit unions do. Unite for good, so that Americans will choose credit unions as their best financial partner," Cheney told the GAC audience.

For the new website, use the resource link. 

NEW: Hensarling Vows To Stand With CUs in Preserving Tax Exempt Status

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WASHINGTON (2/26/13, UPDATED 10:55 a.m. ET)--House Financial Services Committee Chairman Jeb Hensarling (R-Texas), speaking Tuesday at the Credit Union National Association's Governmental Affairs Conference in Washington D.C. said he will help credit unions preserve their tax exempt status.

Hensarling blamed bad policy, specifically excessive taxation, as among the key reasons for feelings of doubt that many American feel toward their economic prospects.

"But if I have anything to do with it, it will not be taxation on our credit unions," Hensarling declared to the credit union audience.  More than 4,200 credit union representatives are attending this year's GAC.

Hensarling also said that he "will not rest" until the U.S. Congress repeals a provision of the 2010 Dodd-Frank Act that caps the fees financial institutions and card networks can charge retailers when a customer uses a debit card.

"Federal price controls were wrong yesterday, federal price controls are wrong today, federal price controls will be wrong tomorrow," Hensarling said of the interchange fee cap.

Hensarling also attacked the regulatory complexity created by Dodd-Frank.  He said Dodd-Frank was based on the premise that regulators lacked the authority to prevent Wall Street from taking outsized risk, but that diagnosis, he said, was wrong.

"You can find very few instances of lack of regulatory authority contributing to the financial crisis," Hensarling said. "Instead at the epicenter of the crisis is a Federal Reserve that kept money too cheap too long because of the housing bubble and federal policy, particularly the affordable housing goals of the [government sponsored enterprises] that promoted and incented financial institutions that were lending to people to buy homes they could not afford."

Hensarling put Dodd-Frank regulations into two categories: "Those that create uncertainty and those that create certain economic harm."

Among the chief risks facing financial institutions today is federal regulatory risk, Hensarling said. "And ladies and gentlemen, with your support, I plan to end that," he added.

Hensarling, a critic of the authority granted Dodd-Frank granted the Consumer Financial Protection Bureau, said the regulatory burden inflicted by the bureau will stifle innovation and curtail lending.  "The way to protect consumers is through competitive, transparent innovative markets that vigorously police for fraud, and it's time to empower credit union members not bureaucrats in Washington."

NCUA Improves Consumer Outreach With New Sites, Video

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ALEXANDRIA, Va. (2/26/13)--The National Credit Union Administration Monday unveiled updated versions of its consumer websites and Pocket Cents.

Consumers can now also keep up with the latest personal finance tips from the NCUA through a new agency Twitter feed, @MyCUgov. Matz was also featured in a new NCUA Consumer Report video that reminds viewers of the importance of developing and keeping good savings habits. "That's an important step towards building a solid financial future," Matz said.

The new resources and website changes were released to coincide with America Saves Week and Military Saves Week. For more on the NCUA resources, use the link.

CUNA Chair Mercer Bids Farewell, Cheney Highlights CUNA Priorities

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WASHINGTON (2/26/13)--Outgoing Credit Union National Association Chairman Mike Mercer urged credit union leaders to continue fighting for legislative issues critical to credit unions, while CUNA President/CEO Bill Cheney highlighted CUNA's priorities for 2013 at CUNA's 79th Annual General Meeting.

Outgoing CUNA Chairman Mike Mercer, who is president/CEO of Georgia Credit Union Affiliates, called for more collaboration among credit unions during CUNA's 79th Annual General Meeting. (CUNA photo)

The AGM was held at CUNA's Governmental Affair's Conference, which runs through Thursday in Washington, D.C.

Credit unions must be willing to cooperate with each other, said Mercer, who is president/CEO Georgia Credit Union Affiliates.

One initiative on which they can collaborate is CUNA's "Unite for Good," a strategic vision unveiled by CUNA's Cheney earlier in the morning. (See related story this issue.)

In Cheney's address to the AGM, the CUNA leader reiterated that CUNA's No. 1 priority for 2013 is preserving credit unions' tax exemption. That emphasis reflects the Obama administration's focus on tax issues, he said. Cheney urged GAC attendees to take up that cause with their Congress members in the Capitol Hill visits while in Washington this week.  "We have a great story to tell we just need to be prepared to tell it," Cheney said.

Reducing regulatory burden is also a priority for CUNA. The association has worked with the National Credit Union Administration, The Consumer Financial Protection Bureau and Department of Treasury to express concerns on behalf of credit unions. CUNA's enhanced weekly Regulatory Advocacy Report summarizes key issues and is available free to CUNA members.

Cheney said enhancing the credit union charter remains a top priority for the association. He noted that the 113th Congress will address capital reform. "We want those reforms to include capital access options as well as risk-based options," Cheney said.

CUNA's goal is to push MBL legislation "beyond the five-yard line" in 2013. In February, Rep. Ed Royce (R-Calif.) reintroduced legislation that would increase the credit union MBL cap to 27.5% from the current 12.25% of assets. The bill, if enacted, would help credit unions lend an additional $14.5 billion to small business in the first year, and help small businesses created more than 158,000 new jobs.

Under the direction of new CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile, CUNA will focus on strengthening communications in 2013. CUNA has launched The Cheney Report, which offers the CUNA president's latest thoughts on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs each Friday.

CUNA is also working with the American Association of Credit Union Leagues to improve credit unions' political effectiveness, Cheney said. "We need you get out of the stands and on field to help us win for credit unions," he said. "We need you involved with your local officials in every way possible."

Financials Show a Healthy CUNA: Strong Projections For 2013

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WASHINGTON (2/26/13)--The improved finances of credit unions in 2012 gave them more money to spend on the Credit Union National Association's products and services, which triggered an increase in revenues for the association last year, CUNA Treasurer Susan Streifel said at the Annual General Meeting at yesterday's opening session of the CUNA Governmental Affairs Conference. CUNA offers members a comprehensive array of resources and training options.

Streifel noted that the association's unaudited results indicated that it had $52.4 million in revenues last year, compared with $49.8 million in 2011 Last year's expenses were $49.9 million, compared with $48.2 million in 2011. The operating margin was $2.5 million in 2012 and $1.6 million in 2011.

In 2012, the association had $31.3 million in assets, $22.5 million in cash, cash equivalents and investments, $14.5 million in working capital, and net assets of $13.7 million.

Streifel, the president/CEO of Woodstone CU of Federal Way, Wash., said CUNA projects its finances will be strong again this year.

She said CUNA projects net revenues will be $53.8 million. Of that, $25.4 million will come from dues, $24.1 million from fees based services and $4.3 million will come from other sources. Expenses are projected to be $52.9 million and the operating margin is projected to be $900,000.

Matz Outlines 'New' NCUA At GAC

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WASHINGTON (2/26/13)--Saying that the agency has to modernize to keep up with the growth of the credit union industry, National Credit Union Administration Chairman Debbie Matz announced plans for "modernizing and revitalizing'' the agency in areas such as examinations and allowing more innovative products and services.

"We're modernizing and revitalizing NCUA for an industry that is newly vibrant, increasingly complex and rapidly changing," Matz said at Monday's session of the Credit Union National Association's Governmental Affairs Conference. "NCUA is reassessing and retooling our business model. The rules of the road that guided credit unions in earlier decades may not meet your needs or your members' needs today. We must stay ahead of the curve."

She noted that the agency has streamlined examinations for smaller credit unions and

Click to view larger image NCUA Chairman Matz unveils a major initiative at the CUNA GAC, telling her credit union audience that they will see a "new" NCUA--modernized and revitalized. (CUNA Photo)
created an Office of National Examinations and Supervision to improve the way it supervises larger credit unions. In addition, the agency plans to continue its efforts to provide more consistency in the examination process.

Matz, who was named chairman by President Obama in 2009, said the agency needs to be especially vigilant, even though the financial crisis is over. She said the industry faces several key challenges, including:
  • Interest-rate risk from long-term, fixed-rate loans;
  • Interest-sensitive deposits;
  • New technologies like mobile banking; and
  • Concentration of assets in the largest credit unions.
She reminded attendees that in the past year the agency had made key changes, supported by CUNA, such as fixing the rules on Troubled Debt Restructuring, streamlining the rules for Low Income Credit Union designation and raising the threshold for small credit unions from $10 million in assets to $50 million in assets.

"Sometimes U.S. regulatory bodies put the brakes on change until the regulators can catch up. But that's not the choice NCUA is making--not on my watch," Matz added. "We can either try to slow it down, or we can do everything in our power to move forward ourselves."

Matz noted that the industry is financially strong and said that return on average assets is 86 basis points, up from 18 basis points in 2009. Net worth is 10.4%. Loans have grown for seven consecutive quarters and charge-offs have fallen for four consecutive quarters.

She added that the growth, combined with the added services that many credit unions offer, has forced the agency to deal with new kinds of risks.

"Some risks are always there. Others arise with new realities. But either way, being the best of a time that's passed is not good enough,'' she noted.

Matz compared the challenge that forced the NCUA to modernize with challenges facing auto manufacturers in trying to modernize cars, such as the 1965 Aston Martin featured in many James Bond films. That car didn't have seatbelts, air bags and anti-lock brakes.

She noted that "just plain cool as those cars were, you probably wouldn't choose to buy a car without those safety features today.'' And added that the "rules of the road that guided your credit unions in earlier decades may not meet your needs or your members' needs today."

Brokaw at GAC: Nation Needs 'Unity' For 'Prosperity'

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WASHINGTON (2/26/13)--World-renowned journalist and author Tom Brokaw said the nation badly needs a return to the spirit that helped us win a world war, and inspired an era of unprecedented prosperity, and world leadership. He said the unity and progress of those years becomes even more enviable at a time when political progress is measured by such phrases as "kicking the can down the road."

Brokaw, in a speech Monday before the 4,200 credit union attendees at the Credit Union National Association's 2013 Governmental Affairs Conference, was referring to a currently popular phrase that has become part of the lexicon during the present partisan deadlock over spending and tax issues. "I've been doing this for a long time," he told the audience about his observations of the country's political affairs, "but I have never seen the nation in such a state of disrepair."

He received a standing ovation after his a speech, in which he discussed his impressions stemming from 50 years of journalism and politics. Brokaw proposed creating a new educational system built around institutions committed to training leaders in all aspects of public service.

"There is a longing," he told the audience, "to find an idea that will pull us all together." Brokaw said he was especially concerned today by the partisanship that currently exists in Congress. "You can't even be seen with your arm around a member of the other party member," he said.

During a question-and-answer session, Brokaw said the surge of technology in recent years has been boon for the news organizations and consumers.

"The state of the news outlets in some ways was never better because of access to the Internet, the iPad and the other technology.

"You can no longer be a couch potato, and get up and sit around drinking a cup of coffee while getting the news from daily newspaper."

NBC's Chatzky: CUs Can Help With Fin Lit Problem

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WASHINGTON (2/26/13)--Award-winning journalist and best-selling author Jean Chatzky said there is a pressing need for financial literacy among consumers, and that credit unions are in a position to do something about it.

Chatzky, who is the Personal Financial Editor on the NBC's TODAY Show, said studies suggest about half of all Americans are "financially fragile." She said the test is that a sudden $2,000 debt for consumers would most likely result in a financial crises for nearly half of those involved.

She made the observation during a speech before the Credit Union National Association's Governmental Affairs Conference, which runs through Thursday.

"Financial literacy is the big problem," Chatzky added.

She said financial education programs help raise the awareness of basic financial services and helps both the institutions and consumers. "There is a need to give people a better knowledge of basic financial services," she told the meeting. She said credit unions do a great service when they help.

Chatzky said lenders must be aware that there are deep-seated emotional and psychological factors involved when consumers approach them for a loan.

She said that lenders who become sensitive to this can do a better job for the consumer when a person walks into the office and begins discussing a loan. She suggested that each potential borrower reacts differently--some even illogically--and lenders should be aware of this so they can best serve the consumer.

"You don't want to treat everybody like your grandmother," she told the audience. Chatzky said that both financial advisors, like herself, and credit unions are "in the business of granting requests without being intimidating.

"All of you are in a tremendous position to help," Chatzky said, adding there is no doubt that credit union have a reputation for helping the consumer. "But much more needs to be done," she concluded.

CFPB Student Lending Work Is One Topic of CUNA Regulatory Advocacy Report

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WASHINGTON (2/26/12)--This week's edition of the Credit Union National Association's Regulatory Advocacy Report draws attention to the always-active Consumer Financial Protection Bureau's work to address student lending issues, and a CUNA comment call on those issues.

The CFPB is accepting comment from students, parents, lenders and educators on financial services specifically marketed to higher education students. CUNA is collecting information from credit unions on the questions asked by the CFPB most directed at credit union activities. This information will also give CUNA a clearer picture of the types of products and services credit unions are offering to students. For the comment call, use the resource link.

This month's Regulatory Advocacy Report also outlines CUNA's recent comments on the CFPB's ability to repay rule, and recaps the CFPB Consumer Advisor Board meeting that was held last week. Cyber security issues and the National Credit Union Administration's guidance for credit unions facing such issues, National Credit Union Administration /National Association of State Credit Union Supervisors recent low income credit union work, and Financial Crimes Enforcement Network news is also covered in the report.

The Regulatory Advocacy Report includes the in-depth content readers expect from CUNA, and updates credit unions on where they stand on key credit union issues and what CUNA has done to advocate for them.

Employees or volunteers of CUNA/state credit union league-affiliated credit unions can sign up to receive the report.

The Regulatory Advocacy Report is archived on

Congress This Week: Housing, Monetary Policy On the Agenda

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WASHINGTON (2/26/13)--As the Credit Union National Association's 2013 Governmental Affairs Conference got started here Monday, members of the U.S. Senate and House were returning to Washington after a ten-day recess for the Presidents' Day holiday.

The Senate calendar will be dominated by consideration of a sequester replacement bill and a vote on the nomination of former Sen. Chuck Hagel to be Secretary of Defense. The sequester will take effect on March 1 unless Congress and the president are able to reach a deal this week.

Committee meetings of most note for credit unions this week include:

  • The Federal Reserve's Humphrey-Hawkins semi-annual reports in both Senate and House on monetary policy. Fed Chairman Ben Bernanke will address the Senate Banking Committee Tuesday and the House Financial Services Committee on Wednesday; and
  • On Thursday, the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on "Addressing FHA's Financial Condition and Program Challenges, Part II."
Many of the 4,200 credit union representatives attending CUNA's GAC will be making trips to Capitol Hill to speak with their federal lawmakers about key credit union issues, such as charter enhancements and the public policy reasons that support the credit union tax status.

Member Benefits Awards Demonstrate CU Difference At CUNA GAC

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WASHINGTON (2/26/13)--The credit union difference was front and center as Credit Union National Association Chief Economist Bill Hampel presented this year's CUNA Member Benefits Awards on Monday.

The awards, which went to the credit unions that provide members with the best bang for their buck, were presented during the afternoon session of CUNA's 2013 Governmental Affairs Conference.

To determine the award winners, CUNA asked GAC-registered credit unions for their rates on various loans and deposit accounts. CUNA then examined that information, along with call report data on the amounts of credit unions'loans and deposits. The credit union information was then compared with third party info on bank rates to calculate how much members from given credit unions saved as a result of using their credit union instead of local banks.

From first to third place, the credit unions with $75 million in assets and less that provided maximum benefits per member household were:

  • United Health CU, Burlingame, Calif.;
  • Valley CU, Salem, Ore.; and
  • First Class American CU, Fort Worth, Texas.

The award winners for credit unions with between $75 million and $250 million in assets were:

  • Boston Firefighters CU, Dorchester, Mass.;
  • St. Louis Community CU, St. Louis, Mo.; and
  • Community Financial CU, Broomfield, Colo.

Award winners with more than $250 million in assets were:

  • Melrose CU, Briarwood, N.Y.;
  • Southwest Airlines FCU, Dallas, Texas;
  • Alliant CU, Chicago, Ill.

The benefits offered by these and other credit unions are the types of benefits that helped members nationwide save $6 billion last year, Hampel said. The benefits were offered by credit unions in a low interest rate environment--and the difference between credit union and bank interest rates will become more pronounced as base interest rates increase in the future, he added.

Fostering service excellence is a key pillar of CUNA's new strategic vision for the credit union system, which was unveiled on Monday. CUNA President/CEO Bill Cheney stressed that the system must work together so that credit unions across the board can offer a complete set of forward-looking and constantly improving financial services to members of all backgrounds and life stages. These changes will help the credit union system reach the goal of $20 billion in member benefits, and 50 million members that consider credit unions their primary financial institutions, by 2023. (See News Now story: Cheney Calls On CUs To 'Unite For Good')