WASHINGTON (7/23/14)--Financial literacy has been a core mission of the Consumer Financial Protection Bureau, and the bureau outlined several of its strategies to further this mission in its second annual financial literacy report to Congress.
According to a study conducted by the National Center for Education Statistics, called the Program for International Student Assessment, American 15-year-olds are in the middle of the pack when it comes to financial literacy. Students scored worse than seven countries, better than three countries and "not measurably different" from the other seven countries measures (
The CFPB report notes that credit unions have participated in financial literacy by helping combat elder financial exploitation. The National Association of Community Development Credit Unions presented a webinar on elder financial abuse which featured speakers from the Office of Financial Protection for Older Americans, New York County District Attorney's Office and a former director of the Kansas Department of Social and Rehabilitation Services.
The report also discusses how the CFPB has expanded financial literacy programs to schools, libraries, the workplace, social service organizations and the military.
Use the resource link to access the report.
WASHINGTON (7/23/14)--Rep. Blaine Luetkemeyer's (R-Mo.) bill known as the Access to Affordable Mortgages Act would provide regulatory relief for heavily burdened credit unions and increase access to mortgage credit for middle- and low-income borrowers, the Credit Union National Association said in a letter of support for H.R. 5148.
"By providing an exemption from the Truth in Lending Act appraisal requirements for properties with transaction values of $250,000 or less for loans held on portfolio for at least three years, the bill would provide both regulatory relief to mortgage lenders as well as increase access to mortgage credit availability for borrowers purchasing lower cost dwellings," the letter reads. "The bill would also amend the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to exempt this same category of higher-risk mortgages from the standards prescribed by the federal interagency appraisal requirements, as long as such mortgage loans are held on a lender's portfolio for at least three years."
CUNA supports this bill because it would allow credit unions that offer mortgage loans secured by covered properties to better serve middle to lower income members.
The letter reiterates points made by CUNA witness Doug Fecher, president/CEO of $2.8 billion-asset Wright-Patt CU, Beavercreek, Ohio, at a hearing held by the House Financial Services subcommittee on financial institutions and consumer credit last week. CUNA has testified more than a dozen times in the past three years to fight for regulatory relief for credit unions.
Use the resource link below for more information.
WASHINGTON (7/23/14)--The U.S. Treasury's Community Development Financial Institutions (CDFI) Fund has announced five free webinars starting in August on the topic of financing community health centers (CHCs) in underserved communities.
According to the most recent CDFI Fund report, credit unions represent 177 of 811 CDFIs active at the end of 2013.
The webinars are scheduled as follows:
- "Trends in Health Care," 2 p.m. (ET) Aug. 6. An overview of the American health care delivery system and the role CHCs play within it. The session highlights the major shifts occurring in the health care industry, including affordability and cost, and the importance of CHCs providing access to affordable health care;
- "Defining the CHC Landscape," 2 p.m. (ET) Sept. 9. A historical perspective of the CHC movement and the essential elements to be a federally qualified health center. This webinar will help CDFIs understand the types of patients that health centers serve, the services provided, and the types of revenue and funds generated by community health centers;
- "Primary Credit Needs of CHCs and Sources of Credit," 2 p.m. (ET) Sept. 24. Highlights the primary types and uses of loan products that CHCs request and summarizes the major sources of capital for community health centers, including those provided by public, private and philanthropic entities;
- "CHC Financial and Operational Metrics and Trends," 2 p.m. (ET) Oct. 7. Provides an overview of community health centers' operating structures, composition of revenue streams and typical expenses (including staffing structures and how they impact revenues and productivity); and
- "Underwriting CHCs," 2 p.m. (ET) Oct. 22: Highlights common risks and mitigations in lending to community health centers and how CDFIs should incorporate the financial ratios discussed in the "CHC Financial and Operational Metrics and Trends" webinar in the credit analysis process.
The free webinars are open to the general public. Advanced registration is required to access the presentation. Registration may be completed up until the start time listed for each individual session.
Future webinar opportunities will be posted as they are finalized to the "Financing Community Health Centers" webpage.
Use the resource link below to register and for more information.
ALEXANDRIA, VA. (7/23/14)--The civil money penalty process and how it applies to late call-report filers are detailed in the July issue of
The NCUA Report
, which was published Tuesday. More than 100 credit unions filed their quarterly call reports late in the first quarter of this year, which could result in penalties of varying amounts.
According to the NCUA, 104 credit unions filed late in the first quarter of 2014. The represents and 80% decrease in late filers from the previous quarter.
After the filing deadline for each quarter's call reports, the NCUA generates a report identifying credit unions that missed the deadline, how many days late each institution is, and whether the credit union has been late previously.
Agency staff then manaully verifies the list of late filers, consulting with NCUA regions and state supervisory authorities for state-chartered credit unions. This helps to identify whether any extenuating circumstances contributed to missing the filing deadline.
Once an institution is confirmed, the civil money penalty matrix is applied. The agency's Office of Examination and Insurance sends letters to each credit union with the proposed civil money penalties. The letters are accompanied with legal documents allowing a late-filing credit union to consent to paying a reduced fine to avoid litigation, as well as contact information for an NCUA program officer who will listen to appeal from institutions that believe there are valid reasons for missing a deadline.
Examples of circumstances that may warrant a waiver of penalties include failure of a credit union's core processing system, natural disaster or incapacitation of a key employee.
A penalty is not final until a credit union has signed a consent order agreeing to pay a reduced penalty or an administrative judge has ruled in the NCUA's favor. The names of credit unions paying civil money penalties, along with the amount paid, will be made public, as mandated by federal law. These will be published approximately 11 weeks after the quarterly filing deadline.
All civil money penalties go to the U.S. Treasury, per federal law. No funds are retained by the NCUA for its own use.
According to the NCUA, the hope is that the process will allow examiners to spend time on safety and soundness, as opposed to chasing down late filers.
The deadline for second quarter call reports is Friday. Use the resource link below to access the June
WASHINGTON (7/23/14)--A study from George Washington University's Regulatory Studies Center estimates that the Consumer Financial Protection Bureau will add 462 new employees this year and another 172 in 2015.
The study, which reviewed budget requests from President Barack Obama for fiscal year 2015, also estimates that the bureau will increase its budget to $622 million in fiscal year 2015, up from $481 million in fiscal year 2014. The 27.1% increase from 2014 to 2015 is less than the 32.7% increase to 2014 from 2013, according to the study.
The bureau has grown steadily over the past few years, with more of an emphasis on becoming fully staffed. This study indicates that the Obama administration is contemplating additional growth over the next two years.
The Credit Union National Association continues to dialogue with the CFPB on many regulatory issues that impact credit unions, and has urged the bureau to exempt credit unions from many overly burdensome regulations designed to push back against the abuses that caused the financial crisis.
ATLANTA (7/23/14)--Chip-embedded credit and debit cards are gaining steam for financial institutions card issuers, merchants, acquirers and others, according to a post in the Federal Reserve Bank of Atlanta's Portals and Rails blog.
In October 2015, parties that make investment in deploying Europay-MasterCard-Visa (EMV) cards with embedded chips will be protected from financial liability from card-present counterfeit fraud losses.
The EMV standard would replace the previous cards with magnetic strips, which can leave financial institutions, particularly small ones, more vulnerable to fraud.
The EMV Migration Forum estimates that approximately 100 million EMV cards--9% of the card base--will be issued by the end of 2014. Javelin Strategy and Research estimates that 52% of point-of-sale terminals will be EMV-enabled by the end of 2015.
The Credit Union National Association continues to monitor developments and advocate for credit unions on payments and security issues.
NEW YORK (7/23/14)--National housing market numbers may have underwhelmed lately, but one bright spot has been mortgages approved by the U.S. Department of Veterans Affairs (VA), which offer attractive home loans to current and former military servicemembers.
Accounting for 8.1%, or $19.5 billion, of all mortgages issued in the first quarter, according to
Inside Mortgage Finance
, after jumping more than 25% in the last two years, VA mortgage loans' share of the market has reached a 20-year high (
"On Facebook, my friends have started posting: 'I got my VA loan, I got my house," Staff Sgt. Claude Hunter, told
. "Everybody is just ready. A lot of them have done their jobs overseas and are coming home."
VA mortgage benefits can be accessed by veterans, their surviving spouses, active military members and reservists who have served at least six years or who have been called up for 90 days.
The loans pose less risk to lenders, as the government promises to cover a portion of any losses, normally up to 25% of the loan amount.
Unlike the Federal Housing Administration, which will allow down payments of as little as 3.5%, the VA also doesn't levy monthly insurance premiums, and upfront cost can be combined with loan balances.
Hunter, for example, paid $219,000 for a four-bedroom home in May with VA mortgage financing, and he didn't have to make a down payment, according to
About 90% of VA mortgages don't require down payments.
Michael Litzner, real estate broker for Century 21 Homes, told
"It's really the only avenue out there for people who are completely cash-strapped to be able to get into a home."
Daily Financial Rates -- 2014-07-23
Wednesday, July 23, 2014
03:55 AM CDT
TREASURY YIELD CURVE
(based on the $1 million market)
Results of the July 21, 2014 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million
||Last changed December 16, 2008 |
|near closing bid||0.070||0.060||0.070||0.070||0.060|
FREDDIE MAC (Mortgage commitments, 30 days)
FANNIE MAE (Mortgage commitments, 30 days)
COMMERCIAL PAPER (Financial, 90 days)
: Data not available at time of page generation (shown at top of page)
Wall Street Journal
U.S. Dept. of the Treasury
All rates are from the previous business day unless otherwise noted.
HOUSTON (7/23/14)--First Community CU has extended its partnership with Houston Texans linebacker Brian Cushing, who will continue as spokesperson for the $1 billion-asset Houston-based credit union through 2016.
Cushing will continue his participation in First Community CU's annual "Stars in the Classroom" program, which rewards 10 deserving teachers for going above and beyond in the classroom. The teachers are awarded football tickets, sideline passes and an autographed jersey. In addition, a $500 donation is made to each teacher's school district and Cushing or one of his teammates visits the teacher's classroom. The nominating student receives an autographed Houston Texans football.
Cushing served as the credit union's spokesperson last year and was part of the financial institution's award-winning TV commercial, radio and print ads as well as billboards and other promotions. First Community is developing a new marketing campaign for 2014-2015 with Cushing as the creative centerpiece.
Cushing has played in the NFL since 2009 after being drafted from the University of Southern California as the Texans first-round pick. Since entering the league, Cushing has been voted NFL defensive rookie of the year, selected to the Pro Bowl and named the Texans' most valuable player in 2011.
First Community CU also is the official credit union of the Houston Texans and the exclusive provider of Texans Checking, which features a customized Texans debit card, chances to win autographed merchandise and access to exclusive events.
SALT LAKE CITY (7/23/14)--To help viewers understand how credit bureaus calculate credit scores, Sterling Nielsen, president/CEO of Mountain America CU, West Jordan, Utah, with $3.9 billion in assets, offered up some insight during a recent appearance on
's "Studio 5 with Brooke Walker" in Salt Lake City.
"There are three main (credit reporting agencies), and they all look at things just a little bit differently," said Nielsen.
"First of all you need to make sure that you watch that credit history," he advised. "Make sure that you make your payments on time; they're going to look at how often you make a late payment, how late that payment is (and) how many accounts are late. These all play a big part in your credit score."
Next, Nielsen said, consumers should pay attention to their levels of credit utilization and make sure they're not using too much of their limits.
"A lot of people think, 'Hey, I have a $5,000 credit card (limit), I might as well charge it all up,'" Nielsen said. "But that hurts your overall credit score. You're better off keeping your utilization down to about 30%," even if you pay off your balance every month.
Finally, consumers should work to build a strong credit history, Nielsen said.
"You want to show a period of time when, not only were you paying your bills on time, but you were managing credit responsibly," Nielsen said. "The length of time is quite important in managing your credit score."
Nielsen added that consumers with credit scores of 700 or above likely will receive the most advantageous interest rates, while those with credit scores below 600 will not fare as well.
DES MOINES, Iowa (7/23/14)--It might be reasonable to assume most U.S. citizens believe college is important, but many still often struggle with figuring out how to finance such a major expense.
In response to survey by the Iowa Credit Union League that once again demonstrated the value people place on a college education--70% of Iowans said a college degree is worth the financial investment--the Iowa Credit Union Foundation (ICUF) has offered up tips on how to tackle paying for school.
"With tuition costs on the rise, it's important for consumers to begin planning their financing as soon as possible," said Jamie Miller, ICUF executive director. "There are many college financing options available, and which one you choose will depend on your individual needs."
The foundation proposes several tips for financing a college education including:
- Start saving now: Whether you're months, years or decades away from paying for college, start saving today, as the earlier the money is put away, the more time it has to grow. Take advantage of college savings calculators to determine how much you will need to save.
- Seek assistance: Speak with an experienced financial adviser about college savings goals and financing options who can present the advantages and disadvantages to each possible method.
- Do the research: There are several options available to finance a college education, including scholarships and grants, prepaid tuition plans, 529 college savings plans, work-study programs and individual retirement accounts. Look into each option and meet with a financial adviser to learn the full benefits of each.
FARMERS BRANCH, Texas (7/23/14)--Hispanics are likely to have clear financial goals but are unsure about how to achieve them, according to a recent survey by Prudentia, thus giving credit unions an opportunity to start conversations about how they can support these goals.
Prudential's "Hispanic American Financial Experience" report found that personal debt is culturally taboo--62% indicated there is no such thing as "good debt"--and the desire by almost half of respondents to pay for items with cash.
However, nearly 70% recognize that living debt free is not possible, which may create educational opportunities for credit unions and other financial institutions, the report noted.
The Prudential study was conducted Oct. 28-Nov. 18 and polled 1,023 Americans age 25-70 who self-identified as Hispanic, had a household income of more than $25,000 and had some involvement in household financial decisions.
Through increased community involvement and financial literacy opportunities, credit unions can engage the Hispanic community in setting goals. This is a tactic taken by some credit unions in the Cornerstone Credit Union League's Juntos Avanzamos program.
"There is a great financial opportunity for credit unions in the Hispanic market," said Bob Peterson, chair of Cornerstone's International Relationship Committee (
July 17). "However, if we want to earn their business, we have to be at the forefront of educating them on how we can help them meet their financial goals."
Peterson is also president/CEO of $90 million-asset OneSource FCU, El Paso, Texas--one of 28 credit unions that have received the Juntos Avanzamos (Together We Advance) designation.
The Prudential survey also asked what financial institutions could do to better meet Hispanics' needs. The leading answer was to be more involved in the community, followed by having the ability to communicate in Spanish; offer financial education for the community; tailor products/services to the community; provide jobs for Hispanic workers; and use easy-to-understand language.
Southwest 66 CU, Odessa, Texas, has tailored products and services to its local Hispanic community. President/CEO Sean Cahill said the $85 million-asset credit union--also a member of the Juntos Avanzamos program--has created a number of specialty loans including a "borrow and save" loan to combat payday lending and establish savings behaviors and a quinceanera loan to cover the cost of celebrations held for girls' fifteenth birthdays (
"The thing we are most proud of is our citizenship loan, as it combines funding with community partnerships," Cahill said. "There are five unique stages to this loan, and each stage requires a commitment from the member before the next portion is funded. We use a local attorney to ensure the member is protected, and make local (English as a Second Language) partnerships to bring the greatest value to the member. We even offer a loan for a suit or dress for the member to wear while attending their citizenship ceremony."
MADISON, Wis. (7/23/14)--Because they hold credit unions in such high regard, credit union members are more likely than bank customers to keep a greater portion of their holdings with their financial institution--an encouraging development as credit unions continue to seek ways to expand member outreach, according to a new Filene Research Institute white paper.
"The Consumer Experience: Financial Institution Preference and Usage Factors," which analyzed McKinsey and Co. survey data from 2013, found that 85% feel their assets are completely safe at their credit union, while only 68% of bank customers feel the same about their institution.
"Credit unions can't prevent every member from shifting their funds or closing their account, but the current outlook for growth is extremely promising," the report noted. "Research is showing how effective credit unions are at creating trust with their members.
"As long as this trust is sustained, there is no reason to think credit unions can't grab more market share," the report continued. "We have learned that consumers choose financial institutions based on income, age and attitudes toward service offerings. These preferences are always subject to change. The onus will be on credit union leaders to ensure they don't."
"Lessons learned" in the report included:
- Credit union members keep a greater portion of their holdings with their primary financial institution than bank customers;
- Wealthy consumers with more than $150,000 in annual income tend to keep a smaller proportion of their personal assets at their primary financial institution;
- Consumers with less than $20,000 in household income keep 80% to 100% of their total assets with their primary financial institution;
- Consumers who use a credit union as their primary financial institution are much more likely than bank customers to agree strongly with positive statements about their primary financial institution;
- Forty-eight percent of credit union members feel their credit union rewards them for remaining loyal to their brand, compared with 34% of bank customers;
- Between 75% and 90% of consumers use websites to check balances;
- Those who use a credit union as their primary financial institution consistently report the highest level of satisfaction with various attributes of their primary financial institution;
- Only 14% of respondents with incomes of less than $20,000 switched financial institutions for better products, rates, fees or returns; and
- Forty percent of respondents with more than $150,000 in annual income switched to find better products, rates, fees or returns.
To download the white paper, use the link.
PORTLAND, Ore. (7/23/14)--The credit union community is offering assistance to victims of the Carlton Complex fire in central Washington, with an initial $5,000 donated by the Northwest Credit Union Foundation (NWCUF).
NWCUF also is encouraging online donations--a similar effort earlier this year resulted in $108,000 in contributions from credit unions and leagues across the nation for victims of the Oso mudslide.
The fire burned another 7,000 acres overnight Monday, the Northwest Credit Union Association reported Tuesday (
July 22). An estimated 150 homes have been destroyed. The Carlton Complex fire is the largest of several wildfires burning in Washington and Oregon this week.
"Credit unions in our region have shown time and time again that they understand how important it is to provide immediate support and they always step up when there is a disaster," said Kim Vu, NWCUF executive director. "We always realize that these are not just members of our credit unions, but they also part of the local communities we serve who could be losing their homes and this is when they most need us."
Credit unions are raising funds and offering financial assistance to members who may be directly affected by the wildfires. Spokane Teachers CU, with $1.9 billion in assets, Liberty Lake, Wash., is leveraging a longtime relationship with the American Red Cross and a local television station to raise emergency funds for fire victims.
Numerica CU, with $1.3 billion in assets, Spokane Valley, Wash., reached out to members through its popular Facebook site to offer both financial assistance and personal support. A spokesperson for Numerica CU reports that as many as 30 members in the Patero location live in one of the active fire zones and could be at risk.
Numerica CU also encouraged employees to support the fundraising. For a donation to help victims of the wildfires, employees will receive "Casual for a Cause" coupons valued at $25.
In addition, the credit union is sponsoring the Rain Down Hope Benefit Concert today to benefit the Chelan Valley Hope Fire Relief Fund.
Credit unions and employees interested in making a donation can donate directly through the NWCUF to benefit the Community Foundation of North Central Washington's Fire Relief Fund.
MINNEAPOLIS (7/23/14)--In response to Target Corp.'s attempt to delay discovery in multidistrict litigation regarding last year's data security breach, plaintiffs filed a joint memorandum opposing Target's request.
Earlier this month, the retail giant requested a stay of discovery for the multidistrict litigation, citing a desire to wait until rulings are made on motions to dismiss the class-action lawsuits brought by consumers and financial institutions. This could push discovery until as late as November.
"Given the burden that discovery regarding potentially moot questions would impose on the parties and this court, good cause exists for continuing the discovery stay for a few months until the motions to dismiss can be resolved," the retailer said (
However, last week, plaintiffs fought the attempted delay of discovery with a joint memorandum filed in the U.S. District Court in Minnesota. "Fact discovery should begin and should not be delayed," the memorandum says, adding that "federal courts disfavor staying discovery while a motion to dismiss is pending, and here, Target has not met its burden of demonstrating that its anticipated motion to dismiss will resolve all claims in its favor."
The memo adds, "Target's arguments that Financial Institution Plaintiffs' claims will be dismissed and that Consumer Plaintiffs lack standing are premature and incorrect. Neither argument warrants a stay of discovery. Accordingly, this Court should deny Target's Motion."
Financial institution plaintiffs' consolidated complaint will be filed Aug. 1, and Aug. 25 is the due date to file the consumer plaintiffs' consolidated complaint.
In May, U.S. District Judge Paul Magnuson said "big, long, indefinite stays" for the class-action lawsuits would not be appropriate (
Target revealed Dec. 19 that about 40 million debit and credit card numbers were compromised as was the personal information of as many as 70 million customers.
A survey by the Credit Union National Association found that credit unions incurred $30.6 million in costs directly related to the breach--not including fraud costs. CUNA is pressing federal lawmakers to address data security relative to merchants, who are not held to the same standards of security as credit unions and other financial institutions.
NEW YORK (7/22/2014)--College is just around the corner for newly graduated high school seniors, which means the first tuition bills will appear at any moment.
To help guide families who are using 529 plans to pay for tuition, the College Savings Plans Network (CSPN) offers these guidelines (July 10):
Start early. Find out from your plan how long the funds transfer will take, whether the plan will send a check to you or directly to the college, and if there's anything else you should know as you start withdrawing funds. Once your beneficiary decides on a school, the earlier you start the process, the better.
Know before you go. Tuition due dates vary--some are not until after the course add/drop period, some are before the semester starts. Check with your school to find out its due date for tuition payment, and make sure you start withdrawing your funds well in advance.
Do your homework. Make sure to check with your plan to find out what it defines as qualified higher education expenses. This generally includes tuition and fees, room and board, and the cost of books, supplies, and equipment required for enrollment or attendance. If you are unsure if any specific item qualifies, ask your plan administrators.
Keep a record. For tax purposes, keep records and documentation of higher education expenses for any withdrawal you intend to treat as qualified.
Be prepared. Make sure your distributions do not exceed your higher education costs. If the distribution does not exceed the amount of the student's qualifying expenses, you do not have to report it as income on your tax return. But if the distribution exceeds those expenses, you must report the earnings on the excess as "other income" on your tax return.
For related information, read "Money 101: School Your College-Bound Child" and "The College Affordability and Transparency Website: Tools to Make Informed Choices" in the Home & Family Finance Resource Center
DES MOINES, Iowa (7/23/14)--The SHAZAM Network Tuesday announced an agreement to make the Europay-MasterCard-Visa (EMV) debit solution available to all of its participants.
The EMV chip card adoption is designed to decrease card fraud and increase transaction security. The agreement provides all SHAZAM Network participants with EMV licenses for MasterCard products, helping to achieve the goal of a more secure U.S. payments environment.
"The objective of our collaboration with MasterCard was to provide merchants and issuers routing choice for contact and contactless payments supporting PIN, signature or no cardholder authentication," said Terry Dooley, SHAZAM chief information officer. "We're confident this objective has been accomplished through the agreement we've reached with MasterCard."
Carolyn Balfany, MasterCard senior vice president of product delivery--EMV, said "Through this agreement the SHAZAM Network and MasterCard have taken another step to advance the U.S. migration to EMV. By streamlining the complexity of EMV implementation, we can advance greater debit card security."