WASHINGTON (12/6/13)--Do credit unions need to add inbound PayPal transactions to the tally as they determine whether or not they will meet the 100 transfer threshold for coverage under new remittance regulations? No, the Credit Union National Association compliance team noted in a recent CUNA's Compliance Myths blog post on CompBlog
A credit union does not have to count international automated clearinghouse transactions when it is the receiving depository institution, the CUNA post clarified.
One example highlighted in the blog post is an inbound PayPal transaction that debits a member's account. "Remember that the remittance transfer provider must be 'directly engaged with the sender to send a transfer of funds to a person in a foreign country," CUNA wrote. In this case, PayPal, not the credit union, is directly engaged with the sender as the originator of the ACH.
The Consumer Financial Protection Bureau has confirmed that this is a correct interpretation.
The CFPB's remittance rules, which became effective on Oct. 28, require financial institutions to provide consumers with prepayment and receipt disclosures that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.
Credit unions will not be considered remittance transfer providers under the rule if:
- They provided 100 or fewer remittance transfers in the previous calendar year; and
- If they provide 100 or fewer remittance transfers in the current calendar year.
When tallying the 100, credit unions must count all the various types of remittance transfers covered by the rule together. However, transactions that do not count toward this 100 transfer total include:
- Domestic wire/ACH transactions;
- Transfers where the credit union is the recipient institution of the wire/ACH;
- Debit card purchases from a merchant located in another country;
- International transfers sent by businesses;
- Prepaid cards purchased in the U.S. that are not delivered to a recipient abroad; and
- Online bill payments to recipients located in another country where the agreement states that payments will be made solely by check, draft or similar instrument.
For more CompBlog
compliance gems, use the resource link.
WASHINGTON (12/6/13)--Credit risk guarantee fees charged by government-sponsored enterprises Fannie Mae and Freddie Mac must not be used as a potential revenue source during budget reconciliation talks, the leadership of the Senate Banking Committee urged the leaders of both the House and Senate Budget Committees Thursday.
"The guarantee fees are charged to cover losses in incurred by Fannie Mae and Freddie Mac," wrote Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho), of the banking committee.
"Each time they are increased and diverted for unrelated spending, homeowners are charged more for their mortgages and taxpayers are exposed to additional risk," the senators wrote Thursday.They added that each of the offsets makes reforming Fannie and Freddie more difficult because it increases the price tag of any legislation.
The Credit Union National Association also strongly opposes the use of the fees as a revenue source and has communicated that opposition in letters to federal lawmakers.CUNA has argued that guarantee fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans. Increasing guarantee fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages, CUNA has warned.
In the senators' letter, Johnson and Crapo noted that earlier this year an amendment, cosponsored by every member of the Senate banking panel, was included in the Senate Budget Resolution by unanimous consent.
"As you continue to negotiate an agreement on a budget, we urge you to uphold the intent of our bipartisan amendment and refrain from using guarantee fees as an offset," they concluded.
The letter was sent to Sens. Patty Murray (D-Wash.) and Jeff Sessions (R-Ala.) and to Reps. Paul Ryan (R-Wis.) and Chris Van Hollen (D-Md.).
WASHINGTON (12/6/13)--The U.S. House's Thursday approval of The Innovation Act of 2013 (H.R. 3309) "is welcome news for credit unions who have become a target of patent trolls, particularly with regard to ATM and check processing technology," Credit Union National Association President/CEO Bill Cheney said.
The bill was approved by a 325 to 91 vote and will now move on to the Senate.
H.R. 3309, which was introduced by Rep. Bob Goodlatte (R-Va.) in late October, would remove some of the financial incentives sought by firms that assert low-quality patents in the hope of quick settlements. So-called "patent trolls" continue to use low-quality patents to try to extract settlements from credit unions and others. Credit unions have been sued for the use of certain ATM technologies, check imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones.
The Thursday bill included several provisions important to credit unions, including language that gives the Patent and Trademark Office Director discretion to waive filing fees for Section 18 appeals. A CUNA-supported amendment that would require patent trolls to identify their parent entity when making a patent infringement claim was also included in the passed legislation.
Cheney said CUNA and credit unions appreciate the strong bipartisan vote. "This is welcome news for credit unions who have become a target of patent trolls, particularly with regard to ATM and check processing technology. The legislation is a strong step in the right direction, and we look forward to working with the Senate as they consider this issue," Cheney added.
CUNA and coalition partners on Wednesday supported H.R. 3309 in a letter sent to all House members. (See Dec. 5 News Now
story: CUNA to House Leaders: Patent Bill Goes in 'Right Direction'.)
ALEXANDRIA, Va. (12/6/13)--A final rule on charitable donation accounts will lead the day when the National Credit Union Administration holds its final open meeting of 2013 on Dec. 12.
The agency in September released a proposed rule that would permit credit unions to invest in hybrid charitable and investment vehicles known as charitable donation accounts (CDAs). These CDAs will allow federal credit unions to make investments that are otherwise prohibited, provided that the proceeds are primarily for charitable purposes.
The proposed rule would limit total investment in CDAs to 3% of the credit union's net worth for the duration of the accounts. A minimum of 51% of the total return from such an account would have to be distributed to one or more qualified charities. Distributions could be made to qualified charities no less frequently than every five years.
The Credit Union National Association approved of the NCUA proposal, which would "allow federal credit unions to do well by doing good." However, CUNA suggested some improvements that would facilitate credit union participation without raising safety and soundness concerns. Suggested changes included:
- Making CDA disbursements on an annual basis;
- Allowing corporate credit union to take part in CDAs; and
- Allowing credit unions to recover their costs so that these do not impact the total investment return.
Other items on the December open board meeting agenda include:
- A board briefing on a supplemental interagency rule on appraisals for higher-priced mortgage loans;
- A final rule that will make technical amendments to the corporate credit union rating system;
- The 2014 Temporary Corporate Credit Union Stabilization Fund oversight budget; and
- A proposed rule addressing requirements for federal credit union examination sites.
The Thursday open meeting is scheduled to begin at 10 a.m. (ET).
Supervisory activities, personnel issues and an appeal under Part 701.14(e) and Part 747, Subpart J of the NCUA's Rules and Regulations are on the closed board meeting agenda.
Parts 701.14 and 747 of NCUA regulations address senior executive officer changes.
For the full agenda, use the resource link.
WASHINGTON (12/6/13)--Third quarter Gross Domestic Product (GDP) growth was revised upwards Thursday by the U.S. Commerce Department to a seasonally adjusted annualized rate of 3.6%.
The estimated advance reading, 2.8%, was changed after the department's Bureau of Economic Analysis received a more complete dataset. The new numbers revealed strong growth in inventory investment that contributed 1.7% to overall growth, making up the entire revision.
Overall economic growth last quarter was also boosted by a deceleration of imports, and a faster pace of state and local public spending.
Third-quarter inflation rose by 2%. Core inflation--subtracting fuel and food--increased by 1.5%.
The sharp rise in inventory growth, however, casts a shadow over the fourth quarter, according to Moody's (Economy.com
Dec. 5). Bolstering anxiety is the fact that real final sales of domestic product--GPD growth which doesn't account for inventory investment--fell to. 1.6% from 1.7% on an annual basis, the weakest reading in three years. The measure's growth contracted to 1.9%, from 2.1% on a quarterly basis.
Gross domestic income growth also fell to 1.4%, a year-low, and corporate profits grew by just 1.8%--down from 3.3% in the second quarter.
The effect of October's partial government shutdown will also be felt in the fourth quarter. It is expected to shave a half percentage point off GDP growth.
Another round of budget and debt-ceiling negotiations coming in the new year could shock consumer confidence and bring a new round of austerity measures, which were at their most intense this year since the end of World War II (Economy.com
Moody's analysts did say that expectations for increased consumer spending and residential investment should see GDP growth accelerate gradually next year, despite the current inventory glut.
Daily Financial Rates -- 2013-12-06
Friday, December 6, 2013
03:55 AM CST
TREASURY YIELD CURVE
(based on the $1 million market)
Results of the December 3, 2013 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||0.050||0.060||0.080||0.070||0.050|
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.
ST. PAUL, Minn. (12/6/13)--Nearly 30% of Minnesota residents are credit union members after the state's cooperative financial institutions increased membership by nearly 16,000 in the third quarter of 2013, reaching an all-time high of 1.6 million.
The membership growth in the third quarter--a growth rate of 1%--continues a trend that began during the financial crisis, when consumers took action and moved to credit unions in their dissatisfaction with large banks.
"Minnesota consumers and businesses continue to choose credit unions as their primary financial institution--much as they choose other local, community-focused businesses," said Mark D. Cummins, Minnesota Credit Union Network president/CEO. "By making the switch, consumers are demonstrating their trust for credit unions rather than banks and selecting a financial institution that is aligned with their values."
Bank fees ignited the grassroots movement Bank Transfer Day, Nov. 5, 2011, which helped prompt a gain of 2.2 million new member accounts at credit unions (News Now
"These results show that we have been successful and that consumers are choosing credit unions more and more as their trusted financial partner," said Cummins. "As the trade association for Minnesota's credit unions, our strategy focuses on advocating for and creating an environment where credit unions can compete and grow their market share."
MADISON, Wis. (12/6/13)--Credit unions measure a lot of data. Knowledge management--employee expertise--is not among the data they are particularly adept at quantifying, but that should change, according to a Filene Research Institute Report.
Linking employee knowledge to individual and organizational performance can improve the bottom line, according to the report: "Knowledge Transfer Review: The Case of Credit Unions."
Filene and Credit Union Central of Canada contracted with the Institute for Intellectual Capital Research in Ontario to conduct a research study focusing on knowledge transfer in the credit union system. The study collected data from eight credit unions in Canada and seven in the U.S. ranging from $350 million to $3.5 billion in assets.
Just as it's advisable to track loan delinquencies among similar credit unions, credit unions can measure knowledge management best practices and compare them with benchmarking groups, according to the study.
Choosing the right metrics and then measuring them over time is the only way to turn haphazard knowledge management into deliberate knowledge management, the study said.
While some credit unions only sporadically practice knowledge management, virtually all credit unions have sufficient information technology infrastructure in place to implement a knowledge management system.
Credit unions may never spend as much time on knowledge management as they do on loan portfolios, capital ratios or net income, the report acknowledges. But neglecting those measures has consequences and allows good employees to drift away and bad employees to slip by.
The study offers models, metrics and benchmarking reports that participating credit unions used to measure employee knowledge.
Use the resource link for more information on the report.
NASHVILLE, Tenn. and LOUISVILLE, Ky. (12/6/13)--Volunteer Corporate CU (VolCorp) and Kentucky Corporate FCU (Kentucky Corporate) have announced plans to merge.
VolCorp, based in Nashville, Tenn., will be the surviving entity and will maintain a presence in Kentucky with operations and staff at Kentucky Corporate's current base in Louisville, Ky.
"VolCorp is financially strong, enjoys strong member support, and is located close to Kentucky Corporate's current location in Louisville," said Kentucky Corporate Board Chairman Alan Butler. "We believe this merger will provide our members with a broad range of services to help them provide value-added services to their members."
The merger must be approved by members and regulators.
VolCorp President/CEO Rich Veach cited the benefits the merger would create for members of both corporate credit unions. "Moving forward, this merger will allow us to broaden our product offering and provide us the ability to continue paying a premium dividend on the capital investment in VolCorp," he added.
MADISON, Wis. (12/6/13)--Small or large, near or far, credit union efforts to spread the message of "people helping people" grow even stronger during the holidays.
| Larry Jackson, president/COO of CU Companies, New Brighton, Minn., shows the final total of the interstate food drive among three credit union service organizations. Houston-based CU Alliance and CU Community in Oak Ridge, Tenn., challenged CU Companies, and local food pantries were the winners. (Photo provided by CU Companies)|
A Minnesota credit union service organization (CUSO) led the charge in an interstate fight against hunger. CU Companies, New Brighton, Minn., went up against the team of Houston-based CU Alliance and CU Community in Oak Ridge, Tenn. The challenge? Who could collect the most food during a month-long food drive.
This is the ninth year for the food drive challenge between CU Alliance and CU Companies. This year, CU Community joined forces with CU Alliance to even the number of employees participating. The end result was 7,661 items, distributed among the CUSOs' respective community food pantries. "Bringing our CUSOs together to help our individual communities in an extension of our intentions to help each other fill a need in the financial realm," said Adrian Dominguez, CU Alliance president/CEO.
- In Austin, Texas, a 76-year-old widow will benefit from the connection made between a credit union employee and the community. Jenny Voigt, an employee at Amplify CU, volunteers for Family Eldercare, a program that helps elderly who have limited resources. Family Eldercare, and by extension the credit union, were selected as part of the Austin American-Statesman's Season for Caring campaign (Dec. 2). The $626 million-asset credit union has adopted families in past Seasons of Caring. Because of Voigt's relationship with Ethel Black through Eldercare, Voigt made a case for the credit union to help her specifically. Now, the credit union is working to help make Black's home safer, with repairs to uneven flooring, ceiling and fencing.
- A pediatric unit in Yakima, Wash., got a new set of wheels thanks to Solarity CU. The $499 million-asset credit union presented $22,000 and a wagon filled with toys to Yakima Valley Memorial Hospital. The unit will use the Radio Flyer wagon for field trips, and the toys will help make children's stays a little brighter (KIMATV.com Dec. 3).
- Three Wisconsin credit unions are among the sponsors for the Oshkosh Celebration of Lights along the shores of Lake Winnebago. Visitors will drive through the display of twinkling lights for free on four evenings this holiday season (Oshkosh Northwestern Nov. 24). The 2013 Community Nights sponsors are Community First CU, Appleton, $1.8 billion assets; Fox Communities CU, Appleton, $947 million assets; and Winnebago Community CU, Oshkosh, $78 million assets.
- Alabama Telco CU, Hoover, Ala., is working with the Cell Phones for Soldiers group this holiday season. Members started donating used cell phones before the program was officially launched , according to Stanton Davis, vice president of the $606 million-asset credit union (The Birmingham News Nov. 17). Proceeds from the recycling program go to the purchase of 60-minute pre-paid phone cards that go to service members.
Credit unions can share their stories about demonstrating the credit union difference on the Unite for Good website.
TAMPA, Fla. (12/6/13)--Members of $5.4 billion-asset Suncoast Schools FCU, Florida's largest credit union, approved a proposal to convert from a federal to a state charter in a preliminary vote Thursday afternoon.
In a special meeting held yesterday, 77% of the voting membership approved the charter change.
Suncoast Schools FCU President/CEO Tom Dorety told News Now
a desire for a more "simplified field of membership" as the reason for the charter change.
The change has been approved by both the National Credit Union Administration and the state regulator, Dorety said.
"We are the largest community financial institution headquartered on the west coast of Florida," Dorety told News Now. "Under the federal charter, we have expanded through select employee groups, immediate family members, but the membership is not very simple. Our bylaws have about 100 pages naming our field of membership. Under the state charter, we will switch to a community charter in all of counties in which we operate today. It is a far simpler way for us to operate."
Suncoast serves 15 Florida counties, Dorety said. He anticipated that the credit union "will probably pick up" two additional counties, but does not have immediate plans for further expansion.
"We are focused on the west coast of Florida," Dorety said. "Through our foundation we give more to support public education than any other private organization in the 15 counties we serve, and we will continue to expand on that."
If the charter change is approved, the credit union will change its name to Suncoast CU, effective Jan. 1.
ST. LOUIS (12/6/13)--Although the Missouri General Assembly doesn't go into session until Jan. 8, the Missouri Credit Union Association (MCUA) already is preparing for what the new year will bring.
One of the biggest concerns is a potential change in legislation regarding the Financial Institution Data Match program, which tracks parents who are delinquent in child support payments, according to Amy McLard, association senior vice president of advocacy.
When the program was implemented in 2001, financial institutions were encouraged to participate but were not penalized if they didn't. It's anticipated that 2014 legislation will set penalties for non-compliant financial institutions, McLard said.
Many credit unions across the state already are working with the Division of Child Support Enforcement program, but "we want to make sure all credit unions have that process in place," she told News Now
"Efforts to fully implement this program in advance of legislation will demonstrate credit unions' willingness to work towards compliance with the agency and lawmakers," said MCUA President/CEO Don Cohenour (Missouri Difference
Because 2014 is an election year, MCUA will monitor initiative petitions--one of which would potentially limit who could contribute to political actions committees, McLard said. "We want to make sure nothing that goes on a ballot would limit credit unions' opportunity to be part of the political process," she added.
There may not be any credit union-specific legislation on the horizon yet, given that legislators just started pre-filing bills Dec. 1. Whatever comes up, the association will be on the watch, McLard said, adding, "We work really hard because we work in the best interest of the consumer."
NEW YORK (12/3/2013)--Between juggling student loan payments, rent, and other bills, you might be tempted to skip a credit card payment. Don't do it. Missing a payment can lower your credit score, which can lead to difficulty getting a loan or even a job (nytimes.com
Millennials, young adults ages 19 to 29, actually have the fewest number of credit cards and the lowest average balance on them, according to Experian's annual state of credit report. But, they also have the lowest credit scores and frequently make late payments on their cards.
The average overall credit score in Experian's report is 681; the average for millennials is 628. Shorter credit histories and high utilization rates are two factors that account for the low scores.
To learn more about your credit score and give it a boost, understand:
What makes up a credit score--Payment history, amounts owed (especially as a percentage of credit available--the utilization factor), length of credit history, new credit, and types of credit in use determine your credit score.
How to improve your credit score--Pay all bills on time, every time. Also consider using a secured credit card. A secured card trades access to credit for your commitment to keep a certain amount of money in a savings account. The professionals at your credit union can set you up with a secured card.
How to get your credit report--You can request one free credit report a year from each of the three major credit reporting bureaus by visiting annualcreditreport.com, the only website authorized to provide these free reports. You also can call 877-322-8228 or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.
For more information about cleaning up your credit, read "Six Slam-Dunk Ways to Trash Your Credit Score" in the Home & Family Finance Resource Center
WASHINGTON (12/6/13)--Home & Family Finance Radio this week explores the world of online promotion, whether it's marketing a business to potential customers or yourself to a potential mate.
In Sunday's episode, which you can listen to on the Internet, host Paul Berry, Washington, D.C. journalist and broadcaster, discusses these topics with special guests:
- "Market Effectively Online." Social media expert John McDougall, president of Internet marketing firm McDougall Interactive, Danvers, Mass., explains how to get started marketing yourself or your company online.
- "Fall In Love Over the Internet." Pamela Riley, dating and marriage expert, New York, explains the dos and don'ts of online dating.
Home & Family Finance is a resource center for personal finance information at the Credit Union National Association. The radio show is sponsored by CO-OP Network, the national credit union ATM network; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide.
Home & Family Finance airs Sundays at 3 p.m. (ET) on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 97 million members, and is presented by CO-OP Network.
CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
For related information, read "Holidays Are Rich with Teachable Money Moments" and "Retirement: More to Prepare Than Finances" in the Home & Family Finance Resource Center
NEW YORK (12/5/13)--Lending technology provider LendKey has surpassed $500 million in loan volume originated and serviced on its cloud-based platform.
LendKey is a CUNA Strategic Services provider.
"Lenders today face significant challenges in effectively deploying their capital into the retail lending market," said Vince Passione, CEO of LendKey. "Surpassing $500 million in loans originated through our platform is a testament to the demand that lenders have for this solution. We're excited to continue to help lenders innovatively solve this problem through student lending, as well as many other potential asset classes down the road."
LendKey, founded in 2008, has primarily provided financial institutions with lending platforms for private student loans and private student loan consolidations. The company provides the student lending infrastructure for more than 260 financial institutions as a technology and business process outsourcing provider, which includes marketing and demand generation support in addition to loan origination and servicing.
ALBANY, N.Y. and ELIZABETHTOWN, Ky. (12/6/13)--The Credit Union Association of New York (CUANY) has entered a strategic partnership agreement with vendor management solution provider Digital Compliance.
Through the partnership, credit unions served by CUANY and its affiliates can access Digital Compliance's online vendor management hub for compliance documentation, contract management and guided exam report preparation.
"As part of our ongoing commitment to reducing credit unions' compliance burden, we have been actively seeking a provider that can simplify and streamline the vendor management process credit unions face," said CUANY President/CEO William J. Mellin. "Digital Compliance is a leader in this arena, and we are very excited to launch this new partnership."
Digital Compliance's Venminder, is an online vendor management tool with modules for contract management, document acquisition, exam preparation and risk assessment.
CUANY affiliates Covera, CUC Mortgage Corporation and UsNet will also use Venminder to provide client credit unions with their required vendor due diligence documentation.