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Former OFIR Commissioner Named EVP/COO At Michigan League

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LANSING, Mich. (8/20/13)--Ken Ross, who served as commissioner of the Michigan Office of Financial and Insurance Regulation (OFIR), has been named the new executive vice president and chief operating officer of the Michigan Credit Union League.

"Ken is a true professional who brings a wealth of experience and expertise that would be the envy of any organization in the financial industry," said MCUL & Affiliates president/CEO David Adams.

"As Michigan's first chief regulator of financial institutions with a credit union background, Ken understands the industry, the challenges we face in a today's complex regulatory environment and the services we provide in the community."

Ross was appointed OFIR commissioner by Gov. Jennifer Granholm in 2008 and continued serving under Gov. Rick Snyder until 2011.

As commissioner, Ross helped pass a legislative package that protects Michigan consumers from mortgage fraud by requiring the registration of mortgage loan officers. He also oversaw the passage of the re-codified Michigan Uniform Securities Act that provides enhanced penalties against perpetrators of securities fraud.

Ross served as the league's vice president of regulatory and legal affairs before his time at OFIR. OFIR today is today called the Department of Insurance and Financial Services.

CU System Briefs (08/20/2013)

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  • NEW HAVEN, Conn. (8/20/13)--Washington, D.C.- and Connecticut-based nonprofit Innovations for Poverty Action is accepting proposals for new financial products that will help "low and moderate-income populations pay down debt, build assets, and increase financial resilience." Groups whose proposals are approved will receive up to $15,000 in individual grants to help with product implementation and other pilot program costs (Focus eNewsletter Aug. 19) ...
  • CHEYENNE, Wyo. (8/20/13)--Kim Withers, president/CEO of Cheyenne, Wyo.-base Meridian Trust FCU was First Place in the Wyoming Business Report's 2013 "Wyoming Women of Influence Award.  The award recognizes female leadership in the state and honors the accomplishments of 10 women for their leadership and outstanding contributions to their fields. Withers received the honor in the category of Banking and Finance. From left are, MJ Clark, executive editor, Wyoming Business Report; Withers; and Belinda Nelson, publisher of the publication. Withers has served Meridian Trust since 1991 and has been CEO since 1994.  During her tenure, the credit union's assets have grown 500%, branches have increased from two to eight, and thousands of individuals, businesses and associations have become members. She also has served as chairman of SunCorp Corporate CU board and been active with the Mountain West Credit Union Association. (Photo provided by Meridian Trust FCU) ...

Survey: Banks' No-fee Checking Accounts Drop Since 2009

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FOSTER CITY, Calif. (8/20/13)--The percentage of banks offering free checking dropped again in the first half of the year, a clear indication that credit unions remain the smarter choice for fee-conscious consumers.

Less than 30.31% of banks surveyed had no monthly maintenance fee--the lowest percentage since 2009, when MoneyRates.com launched its Bank Fees Survey. That figure is a drop from 36.6% recorded at the end of 2012.  In 2011, roughly 34.7% reported charging no fees--the lowest percentage until now. 

Online banks were more likely to have fee-free maintenance of checking accounts (78.95%) than brick and mortar banks (27.70%), findings that were attributed by the report to the lower overhead costs of online banks.  The average monthly service fee for a checking account was $12.43.

Not only are fewer banks offering free checking, they have increased the fees they charge for overdrafts, said MoneyRates.com.  The average overdraft fee rose in 2013 to $31.60, compared with $30.01 at year-end 2012.

If a checking account customer overdrafts an account three times within a year, the charge would be $243.96 in monthly and overdraft fees for that year, said MoneyRates.com.

According to the Credit Union National Association's 2013-2014 CUNA Fees Report, there is no contest on where consumers can go to avoid paying checking fees: 82% of credit unions surveyed offered free checking in 2012, similar to previous fees reports.

MoneyRates.com also found that the size of the financial institution also affected whether a consumer would pay a checking account fee, but the difference wasn't as great as the difference between online and traditional banks. Large banks charger higher monthly and ATM fees than smaller and medium-sized counterparts and are less likely to offer free checking. Overdraft fees tend to be lowest at large banks and highest at small banks, with medium-sized banks in the middle, said the study.

The survey includes no credit union data. Instead, it is based on the MoneyRates Index, a sampling of 100 banks consisting of the 50 largest U.S. retail banks by deposit and 50 smaller banks.

New York Kicks Off 'Don't Tax' Week

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ALBANY, N.Y. (8/20/13)--The Credit Union Association of New York (CUANY) is sponsoring a campaign this week urging state credit unions to engage their staff and members in contacting Congress with the "Don't Tax My Credit Union" message.

To build additional awareness, a Don't Tax My Credit Union Rally will be held at CUANY headquarters in Albany Thursday. Beginning at 10:30 a.m. ET, credit unions leaders will speak about the importance of the credit union tax exemption.

Among the speakers are:
  • William Mellin, CUANY president/CEO;
  • Paula Stopera, president/CEO of CAP COM FCU, Albany;
  • Curt Cecala, CEO of TCT FCU, Ballston Spa;
  • Lucy Halstead, senior vice president/chief operating office of First New York FCU, Albany; and
  • Michael Tobler, president/CEO of Albany (N.Y.) Firemen's FCU.
CUANY invited credit union professionals, volunteer leaders and members to attend.

The association has posted several resources on its website from campaign links to social media resources.

CUANY is also coordinating a statewide Don't Tax My Credit Union postcard campaign. Nearly 100 credit unions are collecting staff and member signatures on postcards to be hand-delivered by CUANY to the offices of U.S. Sens. Charles Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.)

Wis. League Sponsors Tweet Chat About Social Media Today

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PEWAUKEE, Wis. (8/20/13)--The Wisconsin Credit Union League is sponsoring a free Tweet Chat at 11 a.m. CT today about using social media for credit unions across the nation. Participants can use the hashtag, #WICUchat to learn what works and what doesn't in social media.
 
The league said it wanted to give U.S. credit unions an opportunity to exchange ideas and learn about social media issues. The event will be co-moderated by CUNA Mutual Group Media Relations Manager of New Media Michael Ogden.
 
The chat will also allow Wisconsin credit unions to discuss some topics that will be covered at the league's September Innovators in Outreach Roundtable. The chat is open to anyone interested in social media for credit unions.
 
A tweet chat is when a group of people all tweet about a topic at a designated time using a specific hashtag.  To participate, log onto Twitter at 11 a.m., type #WICUchat in the search box, and all of the tweets with that hashtag will appear. Then read, tweet and retweet, being sure to use the #WICUchat hashtag.  Or follow along @WICULeague.
 
Questions will be tweeted by the league @WICULeague using a Q1, Q2 and more format, with replies in the corresponding A1 and A2 formats.  For more information, see the link.

League Bill On CU Civil Penalties Signed Into Law In Illinois

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NAPERVILLE, Ill. (8/20/13)--Legislation that addresses interpretive issues involving the Illinois Department of Financial and Professional Regulations' (IDFPR) civil penalty process as it relates to credit unions was signed into law Friday by Illinois Gov. Pat Quinn.

HB 1572 will ensure that due process, fairness and objective standards are applied consistently, said the Illinois Credit Union League, which backed the measure.

Passage of the bill--now PA 98-0400--was unanimous through both chambers of the Illinois General Assembly (IGA): on May 22 with a vote of 55 to 0 in the Senate and a vote of 112-0 in the Illinois House on April 11.

The bill amends the Illinois Credit Union Act to ensure the civil penalty assessment process is fundamentally fair and consistently applied. The intent in establishing the process was that civil penalty orders would be reserved for extraordinary circumstances in which the credit union's conduct was egregious and constituted a willful and material disregard of applicable standards.  That was the reason for the procedural due process provisions regarding prior notice and an opportunity to cure, the league said.
 
In the short time since the civil penalty process has been in place, interpretive issues have arisen regarding key operative terms.  HB 1572 addresses those issues by adding substantive due process criteria to provide objective standards of materiality and quality assurance and a cure opportunity before any assessment of a civil penalty, the league said.
 
In consultation with State Rep. Lou Lang (D-16, Skokie), who sponsored the bill in the Illinois House, the league worked with IDFPR Acting Secretary Manny Flores and Division of Financial Institutions Credit Union Supervisor Francisco Menchaca to fully address the concerns of the credit union movement, said the league. As a result, the department, which oversees the banking and credit union divisions that regulate all Illinois-chartered financial institutions, including 271 credit unions, supported the legislation.
 
"We are very pleased the Illinois General Assembly concurred with the sentiment expressed by Acting Secretary Manny Flores that the issuance of civil penalties should be handled on a consistent and fair basis by all divisions within the department," said Stephen Olson, ICUL general counsel and chief operating officer.

CU, CUNA Chair Op-Eds: Exemption Based On Structure, Not Assets

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HOUSTON (8/20/13)--While Congress debates tax reform, Credit Union National Association Chairman Pat Wesenberg and an Illinois credit union have written opinion-editorials in Texas and Illinois publications pointing out why credit unions should keep their tax-exempt status.
 
Wesenberg, who is also president/CEO of Central City CU in Marshfield, Wis., pointed out that  credit unions look out for the interest of hard-working Americans in her column, entitled "Tax reform should put consumers first--not banks" in Houston's Memorial Examiner (July 31).  She wrote a similar guest column on the issue in New Jersey's Star Ledger (News Now July 19).
 
Credit unions' federal tax exemption is based on their structure  as cooperatives, not their asset size, Dennis Schaefer, president/CEO of SIU CU, Carbondale, Ill., wrote in an op-ed for TheSouthern.com (Aug. 13) , in response to a guest opinion by a banker, Martin Rowe of Legence Bank.
 
"Mr. Rowe raised an old and tired argument that credit unions have 'vastly outgrown their special treatment,'" wrote Schaefer. "The problem with that argument is the growth limitation banks seek to impose on credit unions is nowhere found in the law that regulates them.
 
"The structure of the credit union, not its size, is the reason it receives its tax-exempt status," he added. "Credit unions are exempt from income tax because of their cooperative structure, but still pay property (just like your neighbor on his home), payroll, and sales taxes and regulatory fees."
 
Banks hold 92% of financial institution deposits in Illinois. To avoid federal income tax, nearly one out of three banks in the state elects Subchapter S status, Schaefer wrote. "Those banks also pay stockholder dividends and director fees far in excess of the estimated federal income tax credit unions would pay," he added. "It is disingenuous for the banks to complain about the lack of a level playing field.
 
If they truly thought credit unions had unfair competitive advantages, banks would restructure to credit unions, Schaefer wrote. "None of them do because that would expose them to democratic ownership and control, and a far more restrictive regulatory regime, including higher capital standards," Schaefer concluded.
 
Removing barriers and raising awareness are two components of CUNA's and the state leagues' Unite for Good campaign, which, along with fostering service excellent, aims to move toward a strategic vision where Americans choose credit unions as their best financial partner. For more information, and to read the op-eds, use the links.

CUDE Program Awards Presented

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MADISON, Wis. (8/20/13)--Three Credit Union Development Education (DE) Program Awards were presented last week at a special reception during the annual DE Workshop in Raleigh, N.C.

The DE Program Awards go to those certified Credit Union Development Educators (CUDEs) who exemplify what the program stands for through their individual or cooperative efforts to make a difference in their credit union, community or on a national/international basis.

"The DE program encourages action around the credit union philosophy and this year's winners exemplify what being a CUDE is all about," said Lois Kitsch, NCUF national program director.

More than 75 CUDEs gathered at the workshop to help the National Credit Union Foundation present these awards:
  • Individual Achievement Award--Paul Thompson. Thompson was honored for his book, "Development of the Modern U.S. Credit Union 1970-2010."  A former speechwriter for the Credit Union National Association, he authored the book, which examined the technology, legal and regulatory changes; competitive pressures; and other factors that have seen the industry grow from small, limited-service institutions run by volunteers, to full-service, professionally staffed operations that now serve more than 96 million members.
  • Cooperative Spirit Award--North Carolina CUDEs. Collectively, the North Carolina CUDEs have created and offered a History and Philosophy Conference for North Carolina credit union professionals to enrich their understanding of credit union values and principles. More than 150 people have attended the conferences, with many going on to become CUDEs. The conference also is becoming a template for other credit union groups.
  • Lifetime Achievement--Bob Schumacher. Schumacher constantly promotes the DE program at CUNA's Government Affairs Conference, World Council of Credit Unions' meetings, state credit union league events and other credit union venues. He also has influenced many people to become CUDEs. As a mentor for the program, Schumacher has inspired students and helped facilitate the program. In 2010, under the guidance of NCUF, Schumacher and eight other DEs guided the formation of a new body to revitalize the DE program. This group, known as the Credit Union Development Education Advisory Council, elected Schumacher as its first chairman. During the next two years, the DE program has flourished, said NCUF.

Mobile Banking Use Up 4.19% In July

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AUSTIN, Texas (8/20/13)--U.S. mobile banking use in July continued to strengthen, rising at a 4.19% average month-over-month growth rate for credit unions and banks that have been in operation at least one year, according to a recent survey.
 
Credit unions and banks surveyed in July reported between 37% and 39% of their total households or deposit accounts use the mobile banking SmartApp, said the Monkey Insights Mobile Banking  Smart Device Usage survey released last week by mobile banking company Malauzai Software.
 
Other findings are:
  • End-users are engaged. About 72.5% of end-users who register for mobile banking employed the SmartApp within 90 days. The numbers vary for Apple and Android, with Apple end-users at 73.09% and Android end-users at 69.70%. For year-to-date usage, the number of active end-users jumped to 92% of registered end-users.
  • iOS devices dominate. Counter to expectations, 66% of registered end-users are on the iOS platform. There are many more Android devices in the market, but clearly mobile banking end-users are on iOS devices, said the report.
  • Android sessions--middle of the night. The only time there are more Android end-users using mobile banking than iOS end-users is between 2 a.m. and 3 a.m. This is one of many indicators that Android end-users are different.
  • Session engagement is up. Mobile banking SmartApp users log in an average of 3.7 times per week, with an average session duration of one minute 14 seconds. This is up from a year ago when the average was 3.15 sessions per week and one-minute-5-second sessions. Android sessions are longer, averaging one minute 46 seconds.

Catalyst: All CUs--Even Smaller Ones--Should Move On Mobile

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PLANO, Texas (8/20/13)--All credit unions should move forward with a mobile strategy, because 32% of U.S. adults now bank using their mobile phones, said Brad Ganey, chief operating officer of Catalyst Corporate FCU in Plano, Texas.
 
Ganey made his remarks to about 50 credit union leaders at a recent Shapiro Summit in Ontario, Calif. The summit, sponsored by the California and Nevada Credit Union Leagues, provides education for credit unions with assets of $50 million and less.
 
Ganey's presentation featured a case study of a $35 million Texas credit union that launched mobile banking and mobile capture services to its membership in April. After four months, the credit union is experiencing a monthly growth rate in active users of 42.2%.
 
Ganey mentioned key considerations the credit union faced in its due diligence process, including determining whether the service would align with the credit union's overall strategy, Ganey said.
 
"The first question the credit union had to answer for its board was whether its membership really needed mobile banking," he said. "The CEO made the case effectively that without mobile, the credit union was not likely to attract new members in the 50-and-under age range and would risk losing current members anxious to take advantage of mobile banking services."
 
Other strategic decisions, Ganey said, focused on the cost effectiveness of mobile. "Part of this credit union's decision-making process was to determine whether mobile banking could serve as an alternative to branch expansion or to spending $20,000 to upgrade to an image-enabled ATM," he said. "For many members, their cell phones never leave their sides. By incorporating mobile capture into this service, these members are able to deposit checks at any time, without locating a branch or an ATM."
 
Ganey offered several strategies for "mobilizing" credit unions:
  • Understand your membership--use frontline staff;
  • Establish buy-in from your board through industry and mobile usage data;
  • Establish baseline requirements and longer-term goals for functionality;
  • Ensure alignment with overall strategy and philosophy (member demographics, branch and growth strategies);
  • Set vendor selection criteria (their vision and yours, integration with other systems, training and ongoing support, implementation assistance, analytics, cost); and
  • Determine if mobile can be justified financially (with revenue and/or growth opportunities, expense reallocation and expense reduction).