Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

CU System Briefs (03/14/2013)

 Permanent link
  • LANSING, Mich. (3/14/13)--Michigan state-chartered credit unions' regulation, the Office of Financial and Insurance Regulation, or OFIR, will be renamed the Department of Insurance and Financial Services, or DIFS, effective Sunday, said OFIR's website. It regulates the state's financial industries, including credit unions, banks, insurance and mortgage companies.  Watch for its revamped website …
  • LATHRUP Village, Mich. (3/14/13)--Michigan First CU, based in Lathrup Village, Mich., is seeking its third Young & Free Spokester, announced President/CEO Michael Poulos. The winner will serve as spokesperson for the credit union's education-focused program for younger members for one year. The spokester will create daily blogs and weekly videos to encourage smart financial behavior, and participate in local events and presentations with the college age crowd throughout lower Michigan The person hired will get a $27,500 salary with an opportunity for a $5,000 bonus, an Apple MacBook Pro, and HD video camera and a smart phone, and enjoy the use of the Young and Free car.  Entrants must be 18 to 25 years old, able to work full-time and reside in metro Detroit from June 2013 to June 2014. Applicants should submit a 60-second video demonstrating why they should be the spokesperson and an entertaining blog on a financial topic. Entries are due by noon April 15. A public vote from April 16 to 25 will determine 10 finalists, who will be invited for a meet up event before the final decision …

Size Has Nothing To Do With Tax Status, CU Tells Oregon Public Broadcasting Debate

 Permanent link
CORVALLIS, Ore. (3/14/13)--"Size has nothing to do with [credit unions'] tax exemption; it's all about structure,"  said Scott Burgess, CEO of Beaverton, Ore.-based Rivermark CU, in a debate aired on Oregon Public Broadcasting's "Think Out Loud."

The show featured Burgess and Lewis & Clark Bank Co-President/CEO Trey Maust discussing three bills in the Oregon legislature that would impose an excise tax on large credit unions as well as require Community Reinvestment Act-type disclosures from credit unions about their service to low-income residents.

"As credit unions, we're not-for-profit and member-owned financial cooperatives," Burgess said. "We're owned  and governed by members and don't have stockholders. We return our earnings to members through lower rates for loans, higher rates for deposits and no or lower fees."

The tax exemption has nothing to do with the type of products and services offered or the size of the credit union, "but everything to do with the not-for-profit, financial cooperative structure-- and we earn that every day."

Taxation "would be devastating to Oregon credit unions and ultimately to credit unions in the rest of the U.S.," Burgess said, adding credit unions "have done a wonderful job" of showing value in the services provided members.  "[Oregon] credit unions put $120 million back in the wallets of our 1.4 million members," he said. Credit unions  offer a choice and competition. "Just being out there and competing with banks has put money in the consumers' wallets."

Protecting and defending credit unions' tax exempt status is the No. 1 legislative priority for the Credit Union National Association for 2013.

The debate also centered on the CRA-type of requirements in two of the bills that would require disclosures. "Giving back to our communities and serving low- to moderate-income members is in our DNA," Burgess said.

He cited statistics that showed loans growing 11% at credit unions since 2007, while banks cut loans 4.2%. In 2005, according to Home Mortgage Disclosure Act data he cited, 66% of mortgage loans at credit unions were to low- to moderate income consumers, compared with 56% at other financial institutions.

The data show "that credit unions have already done an outstanding job" of service, and that passing the two bills would be "overregulation. It addresses a problem that doesn't exist" at credit unions, Burgess added.

Maust noted that community bankers, which act very similar to credit unions, get lumped in with big banks unfairly. When asked if credit unions are the correct target for the banking industry, he said that the priority should be reducing the concentration of assets in large institutions.

The show's website received several dozen comments, with nearly 73% favoring credit unions,  12% favoring banks and the rest making anti-bank statements without addressing credit unions.

To listen to the full report, use the link.

New Lawsuit Takes Aim At ADA Accessibility Rule For ATMs

 Permanent link
ATLANTA (3/14/13)--A class action lawsuit filed in a federal court in Atlanta alleges that two bank branches do not meet the Americans With Disabilities Act (ADA) accessibility requirements for serving blind customers.

The suit was filed Feb. 28 by a law firm that represented plaintiffs in a number of the lawsuits filed over the past two years against credit unions and banks about missing ATM fee signage that allegedly violated the Electronic Funds Transfer Act (EFTA). The volume of those lawsuits prompted the Credit Union National Association to seek legislation to remove the signage requirement, which President Barack Obama signed into law at the end of 2012.

CUNA is warning that, if the EFTA cases are any guide, this lawsuit could be the start of a trend as plaintiffs' lawyers seek out ADA violators. CUNA recommends that credit unions use this case as an opportunity to check their compliance with ADA regulations concerning ATMs. (For more information on how to comply with these regulations, use the resource links to CUNA's compliance e-Guide, CompBlog and Credit Union Magazine at the bottom of this article.)

In the suit, a blind woman alleges she was denied access at two ATMs owned and operated by Winston-Salem, N.C.-based Branch Banking and Trust Co. (BB&T) in Snellville, Ga., and Lilburn, Ga. The machines had no voice-guidance feature, included no Braille instructions for initiating speech mode, and the function keys did not have tactile symbols required under the ADA.

The complaint states that "if a given ATM does not include the accessibility features that are mandated by federal law, blind consumers like plaintiff cannot use the ATM independently and are thus faced with the prospect of having to share private banking information with other individuals to complete a banking transaction at the ATM."  A similar invasion of privacy argument was used in several earlier ADA lawsuits against credit unions and banks. 

The complaint noted that on a previous occasion when the plaintiff requested assistance in making an ATM withdrawal and provided her personal identification number, her ATM card was stolen and her account looted.

"Though defendant has centralized policies regarding the management and operation of its ATMs, defendant does not have a plan or policy that is reasonably calculated to cause its ATMs to be in timely compliance with Chapter 7 of the 2010 Standards," said the court document.

The lawsuit seeks an injunction and payment of attorney's fees.

Sievewright: Technology Is a Loyalty Builder

 Permanent link
Credit unions can continue to capitalize on advances in payments technology, Mark Sievewright, president, credit union solutions, at Fiserv, told the New Jersey Credit Union League's first Executive Leadership Session of the year. (Photo provided by the New Jersey Credit Union League)  
HIGHTSTOWN, N.J. (3/14/13)--Statistics indicate that technology is a loyalty builder, and while credit unions have done a good overall job embracing that concept, there is room for improvement, a Fiserv executive told the New Jersey Credit Union League's first Executive Leadership Session of the year.

Although financial institutions have not been on the cutting edge of payments innovations, credit unions are doing a decent job with mobile banking and online banking, said Mark Sievewright, president, credit union solutions, at Fiserv (The Daily Exchange March 13).     

With the increasing availability of technology, financial institution interactions with members are not decreasing as one may expect, but rather increasing--although some face-to-face communications will be replaced technologically, Sievewright explained. 

The adoption of technology is uneven, with some credit unions describing the use of smartphones to deposit checks as "yesterday," while others view it is as ground-breaking, Sievewright said.

Credit unions can parlay technology into revenue by charging for services such as on online transactions and by using information provided by members for cross-selling and making referrals, he said.

Washington DFI Issues Interpretation On Two Rules

 Permanent link
OLYMPIA, Wash. (3/14/13)--The Washington Department of Financial Institutions (DFI) has issued what Northwest Credit Union Association Director of Regulatory Advocacy John Trull described as "favorable" guidance on two regulations impacting state-chartered credit unions.

"It's encouraging to see the positive working relationship we have developed with regulators continuing to develop, and we expect that relationship to continue to translate into better outcomes for credit unions," Trull said (Anthem Recap March 11) .

One of the clarification released last week related to credit unions' use of the terms "audit committee" and "supervisory committee." The other outlined credit unions' investment options and restrictions for funding employee-benefit obligations.

The terms "audit committee" and "supervisory committee" are seen as interchangeable for regulatory purposes as long as the committee is compliant with supervisory committee regulations, DFI Division of Credit Unions (DCU) Director Linda Jekel explained in a letter addressed to Trull (Anthem Recap March 11).

"The Division of Credit Unions is of the view that a state credit union may use the term 'audit committee' synonymously and in place of 'supervisory committee' in its bylaws as long as it complies with the same requirements for a supervisory committee contained in the Act and all applicable rules for a supervisory committee of a federally insured credit union," Jekel wrote.

The second letter was in response to an inquiry from Parker Cann, BECU's general counsel. State-chartered credit unions in Washington may fund employee benefit trusts with investments typically unavailable to credit unions, as long as those investments are not made by the credit union for its own financial gain. This gives state-chartered credit unions permissions already available to credit unions with federal charters, wrote Joseph Vincent, DFI's general counsel,

Vincent clarified that National Credit Union Administration (NCUA) regulations still apply, saying that "in making such investments, a state credit union is subject to all of the limitations set forth in the aforementioned NCUA regulations and other NCUA authority interpreting or applying those regulations."

New England Leagues Name 13 Rising Star Award Recipients

 Permanent link
MARLBOROUGH, Mass. (3/14/13)--Thirteen people have been named Rising Star recipients in the credit union industry by the Massachusetts Credit Union League, New Hampshire Credit Union League, Credit Union Association of Rhode Island, and CenterPoint magazine.

New England credit unions were asked to nominate individuals during the past few months.

The 2013 Credit Union Rising Stars award recipients, said the Massachusetts league, are:

  • Sean Capaloff-Jones, UMassFive College FCU, Hadley, Mass.;
  • Ellen Coughlin, Leominster (Mass.) CU;
  • Laura Cummings, AllCom CU, Worcester, Mass.;
  • Vyrick Eng, Jeanne D'Arc CU, Lowell, Mass.;
  • Bryce Jackson, Navigant CU, Smithfield, R.I.;
  • Anne Labeta, CPCU CU, Somerville, Mass.;
  • Traci Michel, Metro CU, Chelsea, Mass.;
  • Elizabeth Mulcahy, Jeanne D'Arc CU;
  • Tim Mullen, Bellwether Community CU, Manchester, N.H.;
  • Mychelle Phillips, Leominster CU;
  • Maria Porto, Hanscom FCU, Hanscom Air Force Base, Mass.;
  • Joshua Rakiey, Hanscom FCU; and
  • Debra Lee Surface, St. Jean's CU, Lynn, Mass.
The individuals will be honored April 24 at The Great New England Credit Union Show, during a special "Credit Union Rising Stars Awards Breakfast" sponsored by Macpage.

Illinois League Convention To Host Young Professionals

 Permanent link
NAPERVILLE, Ill. (3/14/13)--The Illinois Credit Union League will once again welcome a group of young professionals to its annual convention, April 18-20.

The initiative is a spinoff of the league's inaugural effort to attract young professionals to last year's conference in partnership with The Cooperative Trust (formerly The Crash Network).  The idea is to create a low-cost event within ICUL's major credit union conferences and provide networking opportunities for credit union employees under age 30. 

An application process open to young professionals 30 and younger took place last month to determine the recipients.

Sponsored by ICUL, the program will give young credit union professionals the opportunity to participate in the event by attending the full convention and additional mentor sessions with industry thought leaders while building relationships with other young credit union professionals.  After a welcome on Thursday prior to the 83rd Annual Convention kick-off, the group will attend several sessions, a lunch and a dinner.

Mark Sievewright, president of Fiserv Inc.'s credit union solutions, will present a keynote address on "How the Future of Credit Unions Will Evolve in the Next 20 Years." He will also present a breakout session, "Competing to Win:  Seven Strategies for Seven Trends in U.S. Financial Services." Bill Hampel, Credit Union National Association senior vice president of research and chief economist, is also among the conference speakers.

CU Saves Member Thousands, Stops Fraudulent Check

 Permanent link
FARMERS BRANCH, Texas (3/14/13)--A Texas credit union office manager's vigilant eye stopped a fraudulent check and helped save a member thousands of dollars in potential losses.

The member received a cashier's check for $6,500 along with a letter informing her that she had been hired for a personal assistant position that would pay her $500 a week for working from home.  The member was instructed to deposit the cashier's check into her personal checking account so she could write personal checks for her new employer, the Texas Credit Union League reported (LoneStar Leaguer March 13). 

The woman made the deposit; however, she was not able to write personal checks for her new employer because she hadn't yet received her checkbook, Wendy McMillian, office manager at Shared Resources CU, Pasadena, Texas, told TCUL.

Although the cashier's check had a watermark, two signatures, a routing number and account number, McMillian noticed some red flags. The number sequence for the account number looked suspicious and there was no remitter on the check.

The credit union put a hold on the check, and, once confirmed, notified the member that the cashier's check was fraudulent.  The member arrived at the branch and showed staff the letter she had received from her "new employer."  The letter included several misspellings, McMillian said.

When the member phoned her "new employer" about the trouble with the cashier's check, he suddenly complained of a bad phone connection.

McMillian said she shared the story with the Texas league in hopes of preventing other unsuspecting credit union members from falling prey to similar scams.