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July 11, 2014

Payday lender must refund $5 million for illegal practices

Washington
WASHINGTON (7/11/14)--One of the largest payday lenders in the country is the subject of an enforcement action announced Thursday by the Consumer Financial Protection Bureau, forcing it to provide $5 million in refunds and a $5 million penalty.

The CFPB found that Irving, Texas-based ACE Cash Express has been using illegal debt collection tactics, including harassment and false threats of lawsuits and criminal prosecution to pressure overdue borrowers into taking out additional loans.

"ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt," said CFPB Director Richard Cordray. "This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back. The CFPB was created to stand up for consumers, and today we are taking action to put an end to this illegal, predatory behavior."

ACE offers payday loans, check-cashing services, title loans, installment loans and other consumer financial products and services online and at many of its 1,500 retail storefronts in 36 states and the District of Columbia.

The CFPB found that ACE used the following "aggressive and unlawful" collections practices:
  • ACE debt collectors led consumers to believe they would be sued or subject to criminal prosecution if they did not make payments, even though ACE did not actually sue consumers or attempt to bring criminal charges against them for non-payment of debts;

  • Debt collectors told consumers in-house and third-party collection fees would be collected, despite corporate policy that states collectors cannot charge collection fees and cannot report non-payment to credit reporting agencies; and

  • Some ACE in-house and third-party collectors abused and harassed consumers by making an excessive number of collection calls, and in some cases, ACE repeatedly called the consumers' employers and relatives and shared the details of the debt.
These tactics were used to create a false sense of urgency to lure overdue borrowers into payday debt traps, according to the CFPB. ACE would encourage overdue borrowers to temporarily pay off their loans and then quickly re-borrow from ACE.

Even after consumers explained to ACE that they could not afford to repay the loan, ACE would continue to pressure them into taking on more debt. Borrowers would pay new fees each time they took out another payday loan from ACE.

The $5 million in consumer refunds will go to overdue borrowers harmed by the illegal debt collection tactics during the period covered by the order. These borrowers will receive a refund of their payments to ACE, including fees and finance charges.

The $5 million fine will be made to the CFPB's Civil Penalty Fund.

Use the resource link for more information. ReadMore

CUNA to drive home need for reg relief at House hearing

Washington
WASHINGTON (7/11/14)--The Credit Union National Association has asked Ohio credit union CEO Doug Fecher to speak for the credit union movement on regulatory relief before Congress Tuesday.

Fecher, president/CEO of Wright-Patt CU in Beavercreek, Ohio, with $2.8 billion in assets, will testify before the House Financial Services Committee's subcommittee on financial institutions and consumer credit at a hearing titled "Examining Regulatory Relief Proposal for Community Financial Institutions."

Fecher will address regulatory burden and its effect on credit unions. He will address topics such as the Federal Reserve's Regulation D, which places limits on pre-authorized withdrawals and transfers, risk-based capital, the Credit Union Residential Loan Parity Act, Consumer Financial Protection Bureau examination thresholds and more.

CUNA has testified more than a dozen times in the past three years on regulatory relief matters, and Fecher has testified on behalf of CUNA multiple times. The hearing is scheduled to start at 2 p.m. (ET). ReadMore

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Housing fin. reform must ensure CU access to markets: CUNA

Washington
WASHINGTON (7/11/14)--Credit Union National Association interim President/CEO Bill Hampel wrote to three U.S. representatives Wednesday asking for consideration for credit unions during the housing finance reform process.

The letter is addressed to Reps. John Delaney (D-Md.), John Carney (D-Del.) and James Himes (D-Conn.), sponsors of the Partnership to Improve Homeownership Act (H.R. 5055), which was introduced Thursday.

The bill would establish an insurance program through Ginnie Mae. All government-guaranteed, single-family and multi-family mortgage-backed securities would be supported by a minimum of 5% private sector capital, standing in a first-loss position. The remaining 95% of the risk would be shared equally between Ginnie Mae and a private reinsurer.

It would also wind down Fannie Mae and Freddie Mac, revoking their charter but allowing them to be sold and recapitalized as entities with different business plans without any of their current unique powers.

In CUNA's letter, Hampel thanks the congressmen for their support of housing finance reform, and praises their act for continuing the dialogue that will lead to the future mortgage finance system.

"As we have said throughout the housing finance reform debate, any legislation to reform the secondary mortgage market should ensure that credit unions have equal access to a well-regulated and well-capitalized secondary market, and should preserve the ability of borrowers to get mortgage products with predictable payments, like the 30-year fixed rate mortgage," Hampel's letter reads. "The new system should be durable enough to withstand economic distress and the transition to the new system should be reasonable and orderly."

Use the resource link below for the full text of the bill. ReadMore

IBEW Local 816 FCU closes

Washington
ALEXANDRIA, Va. (7/11/14)--The National Credit Union Administration announced late Thursday that it has liquidated IBEW Local 816 FCU, Paducah, Ky., after determining the credit union was insolvent and had no prospect for restoring viable operations.
 
The $6.3 million-asset credit union served 929 members. It is the sixth federally insured credit union liquidation in 2014.
 
The NCUA's Asset Management and Assistance Center will issue correspondence in the near future to individuals holding verified share accounts in the credit union. Members with additional questions about their insurance coverage may contact the center toll-free at 800-715-0777 between 8 a.m. and 5 p.m. (CT) Monday through Friday.
 
Member deposits are federally insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member's interest in all joint accounts combined is insured up to $250,000. The fund separately protects IRA and Keogh retirement accounts up to $250,000 and has the backing of the full faith and credit of the United States. ReadMore

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Ways and Means' Marchant, Sen. Banking's Heller voice RBC plan concerns

Washington
WASHINGTON (7/11/14)--New voices from both the House Ways and Means Committee and the Senate Banking Committee have joined the chorus of concerns regarding the National Credit Union Administration's proposed risk-based capital (RBC) plan. Republicans Rep. Kenny Marchant (Texas) and Sen. Dean Heller (Nev.) sent letters to the agency July 10 .
 
Ways and Means' Marchant asked the NCUA to:
  • Identify the statutory authority upon which the agency is relying to impose a higher risk-based capital requirement on well-capitalized credit unions;
  • Explain why the NCUA is attempting to regulate concentration and interest-rate risk thorough the addition on new capital requirements as opposed to relying on NCUA examiners to monitor risks of individual credit unions;
  • Identify the statute that gives the NCUA any authority to impose individual capital requirements on credit unions; and
  • Explain why 18 months, as proposed, is an adequate implementation time.
Senate Banking's Heller warns in his letter that the risk weights in the proposed rule may be "unduly burdensome" and could "reduce the availability or affordability of loan products and restrict credit" available through credit unions.
 
Heller added that credit unions in his state have warned him that the RBC plan, as written, will force a change in how they operate and require more time spent on regulatory compliance at a cost to helping the state's "struggling economy."
 
Other members of the Senate Banking Committee who have weighed in with concerns include its chairman, Sen. Tim Johnson (D-S.D.); its ranking member, Sen. Mike Crapo (R-Idaho); and Sen. Heidi Heitkamp (D-N.D.). From House Ways and Means, Rep. Erick Paulsen (R-Minn.) also has warned that credit unions in his state would be adversely affected by the NCUA's RBC proposal.
 
(See related story: NCUA gets more specific on RBC plan review at Chicago Listening Session.) ReadMore

CUs dig deep on RBC plan at Chicago Listening Session

Washington
CHICAGO (7/11/14)--The room was packed and the concerns were earnest at the National Credit Union Administration's Listening Session in Chicago Thursday. As expected, the primary topic of the day was the NCUA's proposed risk-based capital rule. NCUA board member Michael Fryzel helped open the meeting by reminding the more than 160 people in attendance that the current RBC rule is just a proposal, and that when it comes to changes, "everything is on the table."

"We want a rule that provides safety and soundness without unduly limiting credit union operations," he said.

NCUA Chair Debbie Matz said both the Office of the Inspector General and the Government Accountability Office have pushed the NCUA to get an RBC system in place.  "We are going forward with risk-based capital, but we will address the issues that have been identified," she said.

After initial remarks by the regulators, credit union attendees--sitting at round tables--were asked to identify by group what their primary concerns are.

Several credit union representatives requested a re-issue and new comment period for the proposal, since a number of significant changes are likely.  In response, Matz said that if after the NCUA reviews the proposed rule, if the rule's intent changes significantly it will require a new comment period. She also the 18-month implementation period for the new rule will likely be changed. A longer implementation period is one of CUNA's requests if the NCUA goes forward with a final rule.

Another credit union remarked that there would be a greater benefit if examiners were better trained than imposing an "unnecessary" new RBC rule. The NCUA responded by saying that a lot of resources go to examiner training, but the effectiveness is limited because of high rates of turnover.  The agency also invited credit unions' ideas on how to improve examiner training.

Several credit unions raised issues with the risk weights, particularly those that would be applied to member business loans, mortgages, and longer term investments.  One expressed concern that his credit union's members might be misled into believing his credit union was more risky than a bank with the same balance sheet because the bank's risk-based capital ratio would be higher under Basel rules than under NCUA's proposal. 

It was also a credit union concern that the RBC rule was trying to create a "no-risk-allowed system," which would devalue the credit union charter option.

A credit union with a significant business lending activity pointed out that applying higher risk weights to greater concentrations of MBLs ignored the wide diversity that can exist in a business loan portfolio.  NCUA Director of Examination and Insurance Larry Fazio said there was no way to make the RBC rule as precise as some credit unions have requested. He added that there will be more risk weight analytics available for credit union review in the final version of the rule.

Fazio also told the credit union crowd that the more robust the RBC system is, the more comfortable will examiners be with net worth ratios not substantially above 7%.

NCUA Chair Debbie Matz stated during the back-and-forth discussion that the agency has no intention to eliminate the separate 10.5% risk-based capital requirement for a credit union to be well capitalized.   The Credit Union National Association and other critics of the current RBC proposal have argued that the Federal Credit Union Act prohibits the NCUA from setting a higher capital requirement for well-capitalized credit unions than for those that are deemed adequately capitalized.

Other topics addressed at the session included fines for late Call Report filers and interest rate risk. Matz said the number of late filers is going down, but the NCUA has been too lenient in the past. She added that if there is a valid excuse for late filing, the credit union in question will not be penalized.

Matz also addressed the issue of interest rate risk. She said the NCUA went through the first quarter call reports to identify credit unions with more than $1 billion in assets, and while some had adequate interest rate risk, "there is still some work to do."

She followed that up by saying that the NCUA is focused primarily on credit unions that are large enough to pose risks that are too high.

Recordings of the session will be posted on the CUNA website when available. The NCUA's third and final Listening Session of the year will be July 17 in Alexandria, Va. ReadMore

Foreign buyers continue investing in U.S. housing market

Market
WASHINGTON (7/11/14)--It's been widely reported that cash sales in the housing market have increased considerably in recent months, and one factor that may be driving the surge is the influx of foreign investment.

As home prices remain low--despite steady but slow price growth this year--and as wealth in some places in the international community has expanded, many foreign buyers are coming to the United States to purchase real estate as a home or investment.

Between April 2013 and March 2014, total sales to foreign buyers topped $92 billion, a $24 billion increase compared with the prior year, a 35% jump, according to the National Association of Realtors (NAR) 2014 Profile of International Home Buying Activity.

"We live in an international marketplace, so while all real estate is local, that does not mean that all property buyers are," said Steve Brown, NAR president and co-owner of Irongate Realtors. "Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability and an incredibly opportunity for investment in the future."

Chinese nationals have particularly taken advantage of the market.

Nearly 1 in 4 dollars of foreign purchases come from Chinese buyers, according to NAR, and buying has risen more than 70% to $22 billion this year ( CNNMoney.com July 8). Further, nearly three-quarters of Chinese purchases were all-cash transactions.

But it's not only the Chinese that are gobbling up American real estate. About 28% of realtors reported working with international clients this year, with home buyers hailing from Canada, Mexico, India and the U.K.

Combined with China, those countries only made up 54% of international transactions, according to NAR.

About 39% of international buyers, meanwhile, said they intended to use the purchased property as their primary place of residence. ReadMore

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Business Rates

Market
Daily Financial Rates -- 2014-07-11

Financial Rates


Friday, July 11, 2014

03:55 AM CDT

TREASURY YIELD CURVE
(based on the $1 million market)

TermFri
7/11
Thu
7/10
Wed
7/9
Tue
7/8
Fri
6/27
1 month0.020.030.020.020.01
3 month0.020.030.030.040.04
6 month0.060.060.060.060.06
1 year0.100.110.110.120.11
2 year0.460.510.510.520.46
3 year0.930.970.990.000.90
5 year1.661.681.701.741.64
7 year2.152.172.192.242.14
10 year2.552.572.582.632.53
20 year3.103.103.123.173.08
30 year3.383.373.383.443.35

TREASURY BILLS

Results of the July 7, 2014 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million

TermLatest
Mon, 7/7
Week Ago
Mon, 6/23
13 weeks0.0300.025
26 weeks0.0600.050

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermFri
7/11
Thu
7/10
Wed
7/9
Tue
7/8
Fri
6/27
high0.3120.3120.3120.3120.312
low0.0500.0500.0500.0500.050
near closing bid0.0600.0700.0700.0700.060
offered0.2800.0900.2800.1000.280
effective rate20.1200.1200.1200.1200.120

FREDDIE MAC (Mortgage commitments, 30 days)

TermFri
7/11
Thu
7/10
Wed
7/9
Tue
7/8
Fri
6/27
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermFri
7/11
Thu
7/10
Wed
7/9
Tue
7/8
Fri
6/27
30 year3.7353.7873.8153.8213.752

LIBOR

TermFri
7/11
Thu
7/10
Wed
7/9
Tue
7/8
Fri
6/27
1 month0.224000.224000.221000.219000.14950
3 month0.379000.379000.376000.375000.23410
6 month0.544000.544000.543000.544000.32615
1 year0.856000.857000.857000.859000.54610

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
7/8
Week ended
6/24
90 days0.230.23

NA: Data not available at time of page generation (shown at top of page)

Sources:
Wall Street Journal
U.S. Dept. of the Treasury


All rates are from the previous business day unless otherwise noted. ReadMore

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Consumer Rates

Market

Informa Research Services, Inc.
Daily Rate Comparison

Informa Research Services, Inc.
Deposit Products Credit Unions Bank Average Difference
12 Month CD $10,000 0.45% 0.28% 0.17%
Personal Savings $1,000 0.21% 0.10% 0.11%
Personal Interest Checking $2,500 0.34% 0.15% 0.19%
NSF Fee $27.74 $31.91 $-4.17
Personal MMDA $2,500 0.17% 0.10% 0.07%
Business MMDA $2,500 0.17% 0.09% 0.08%

Consumer Loan Products Credit Unions Bank Average Difference
Unsecured Personal Loan - $5,000 - 4 Years 10.13% 10.43% -0.30%
New Auto Loan - 5 Years 2.58% 3.82% -1.24%
Used Auto Loan - 2 year Old - 4 Years 2.76% 4.02% -1.26%
HELOC - 80% LTV - $50,000 4.19% 4.41% -0.22%
HE Loan - 80% LTV - $50,000 - 15 Years 5.67% 6.01% -0.34%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 4.15% 4.20% -0.05%
30 Year Fixed Jumbo 4.24% 4.12% 0.12%
5/1 Year ARM Conforming 2.93% 2.88% 0.05%

Credit Card Products Credit Unions Bank Average Difference
Platinum 9.19% 11.04% -1.85%
Annual Fee $25.00 $48.60 $-23.60
Maximum Late Fee $26.21 $34.28 $-8.07
Reward 9.97% 11.94% -1.97%
Annual Fee $26.71 $99.75 $-73.04
Maximum Late Fee $22.51 $33.15 $-10.64

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.60% 3.77% -0.17%
Indirect B Tier New Auto Loan - 5 Years 5.34% 5.30% 0.03%
Indirect C Tier New Auto Loan - 5 Years 7.54% 6.72% 0.81%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Thursday, July 10, 2014. For detailed disclosures click here.

ReadMore

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Kindness alert: NEFCU starts 'Pay It Forward Friday' today

CU System
WESTBURY, N.Y. (7/11/14)--NEFCU is telling Long Islanders, "It's on us," this summer as the credit union this week announced a "pay it forward" initiative.
 
Starting today, the $2.2 billion-asset Westbury, N.Y.-based credit union will send local branch employees into the Long Island community to surprise residents with free lunches, coffee, treats and gas, and perform other good deeds.
 
NEFCU also will be helping three Long Islanders in need. Throughout the summer three local residents will receive up to $1,500 in assistance. NEFCU is asking for nominations of three people or families who would benefit most from the larger donations.
 
"Every Friday this summer, we'll be looking to bring a smile to hundreds of Long Islanders' faces and show them the power of 'paying it forward,'" said Edward Paternostro, NEFCU president/CEO.  "This is an exciting and enjoyable program for everybody involved as we go deep into the community--and deep into our pockets--to bring a little happiness and assistance to our neighbors."
 
The program kicks off today in Commack. Throughout the day, local NEFCU branch employees will be out in the community, looking for opportunities to  pay it forward, whether it's bringing meals to a senior center, providing balls to children in a town park or buying a late-running commuter a train ticket.
 
NEFCU's "Pay It Forward Fridays" team will also be handing envelopes stuffed with a $5 bill to passers-by in the hope that they, too, will use the money to brighten the lives of a stranger.
 
Following the Commack debut, the promotion moves to a different community each Friday.
 
For the three people or families selected to receive the large donations from NEFCU, each will be handed a check on a different Friday at a local NEFCU branch.
 
"We'll be looking to do so many little things that make a difference in the lives of our neighbors, but in three instances this summer, we hope to provide a little bit of hope for those who could use a helping hand or some assistance amidst some difficult times," said Paternostro. ReadMore

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CU System briefs (07/11/2014)

CU System
  • WASHINGTON (7/11/14)-- Four Washington, D.C.-area credit unions were recognized for their achievements associated with the April 6 Credit Union Cherry Blossom Ten Mile Run, which benefits Children's Miracle Network Hospitals . Constellation FCU, Reston, Va., with $181 million in assets, raised the most in the member donation challenge. Department of Labor FCU, Washington, with $71 million in assets, raised the most in the organizational donation challenge. NASA FCU, Upper Marlboro, Md., with $1.3 billion in assets, was the top credit union running team with the top credit union male runner and top credit union female runner. SECU, Linthicum, Md., with $2.8 billion in assets, was named the most spirited volunteer team. This year's race resulted in a $487,000 donation to Children's Miracle Network Hospitals ...
     
  • NEW CASTLE, Del. (7/11/14)-- The Delaware Credit Union League and NetDE Business Group will hold their first networking event for seasoned credit union professionals of all ages Tuesday in Newark, Del. The league said it envisions all participants can provide information and insight into their own generations ...
     
  • COLUMBUS, Ohio (7/11/14)-- John Florian, vice president of government and political affairs at the Ohio Credit Union League, is leaving the league after 23 years. Florian, who has a master's degree in theological studies from Washington Theological Union, will pursue his passion of spiritual ministry, according to the eLumination newsletter (July 9). "During his 23 years, John made many lasting contributions to the league and greater credit union movement," said league President Paul Mercer. "In particular, he laid many of the foundational blocks on which our advocacy business has grown strong."  Florian's last day is July 18 ...
ReadMore

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Fin. ed. for student body key part of Altura, UC-Riverside partnership

CU System
RIVERSIDE, Calif. (7/11/14)--Altura CU, Riverside, Calif., announced a four-year contract with the University of California-Riverside's (UCR) multimedia rights partner this week, an agreement that will allow the $731 million-asset credit union to provide the university's students financial education, among other services.

"We have strong ties to UCR and to the educational community throughout Riverside County," said Mark Hawkins, Altura CEO. "Working together, we can help them build the financial skills they will need to help them better manage their financial lives, now and in the future."

As UC-Riverside Athletics' official credit union partner, Altura will sponsor financial literacy and life skills education, offer Spirit Debit Cards, host in-game promotions at UCR athletic events, have access to branding opportunities and offer an ATM at the SRC Arena.

"We are fortunate to have such a vested partner in not only the UCR athletic program and our student-athletes, but to the entire student body through Altura Credit Union's involvement in financial literacy program, on-campus ATM and student- and affiliate-centric banking services," said Jim Wooldridge, UCR athletic director. ReadMore

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Time MONEY recognizes Olson for refugee fin. ed.

CU System
ST. PAUL, Minn. (7/11/14)--Sandy Olson, an employee of the charitable foundation of $1.7 billion-asset Affinity Plus FCU, St. Paul, Minn., has been recognized as a Time MONEY hero.
 
One person from each state and Washington, D.C., is recognized as a MONEY hero for helping others improve their personal financial situations.
 
Olson was nominated and selected as the MONEY hero in Minnesota for teaching financial education courses to refugees at MORE Multicultural School for Empowerment (MORE) for the past 11 years. The topics she covers in the courses include money management, budgeting, credit cards and lending.
 
"During each class, I provide refugees with tools that will help them understand our country's financial system, and then dive into specific topics like checking and savings accounts for example," said Olson. "Most importantly, I listen to their questions and concerns, and help them find answers. As the discussion develops, and their confidence and trust grows, so does our relationship."
 
"Olson has never been out of the country yet she teaches refugees from Bhutan to Ethiopia," the MONEY magazine article said in describing Olson's work. "Today the personal finance classes she teaches are the last of a series in which immigrants learn English and basic living skills. Olson explains budgeting and shows her students how to compare credit cards and real estate online; she discusses the link between credit reports and hiring. And she drives her students around because most don't have cars."
 
Olson told MONEY that providing rides for her students helped them develop a bond and build trust. "Trust is huge factor," she said. "They've been through so much."
 
Olson's dedication is inspiring. More than a dozen of her Affinity Plus co-workers have also volunteered at MORE, MONEY reported.
 
For more on Olson and her work, use the links. ReadMore

Debit rewards programs still valuable to members, CUs find

CU System
MADISON, Wis. (7/11/14)--Credit unions are finding success in offering debit reward programs to their members--three years after big banks bailed on the programs in the wake of interchange rule changes.

While most big banks jumped ship, community financial institutions--including credit unions--saw an opportunity: Debit cards account for nearly 50% more noncash transactions than credit cards. And consumers are more than happy to earn cash for spending money ( CreditCards.com July 9).
 
About one-third of financial institutions offer rewards tied to debit cards, according to Aite Group research.
 
Credit unions say the programs fit with their members-first philosophy, according to Ron Shevlin, Aite Group senior analyst. Most community financial institutions are using debit as a channel for growth, according to Shevlin. Among those with a debit card rewards program in place, 60% said the program helped drive usage.
 
At $1 billion-asset Hanscom FCU, based on Hanscom Air Force Base, Mass., the MemberPoints reward program has been popular with members since 2007, according to Steve Silva, the credit union's vice president of marketing.
 
Members earn one point for every $2 when they sign a receipt, or five points per transaction when they use a PIN. The program makes the credit union's checking product more appealing, Silva told CreditCards.com . Points are used to make purchases from a merchandise catalog.
 
Studies show that consumers prefer using debit cards to credit cards. About 49% of those polled said they preferred to pay by debit, while 34% said they preferred credit. Another 11% said they preferred paying by cash or check, according to a 2013 Consumer Payment Choice Study by the payments processing company TSYS.
 
At Directions CU, Sylvania, Ohio, with $598 million in assets, debit rewards are an added benefit for members with checking accounts but not necessarily a driver on their own, Julie Linch, senior vice president of retail delivery, told CreditCards.com . Consumers still expect other benefits, such as free checking, Linch said.
 
Bankrate's 2014 Credit Union Checking Survey found that 72% of the nation's 50 largest credit unions offer a free checking account, which means there are no monthly service fees or point-of-sale transaction fees associated with the account ( News Now March 4). ReadMore

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CU growth buoys hiring, pay increase plans: CUNA survey

CU System
MADISON, Wis. (7/11/14)--Burgeoning membership expansion and the potential for double-digit loan growth are incubating a stronger employment environment at credit unions--one that portends more hires and increased wages, according to research from the Credit Union National Association.
 
In the soon-to-be released 2014-2015 CUNA Staff Salary Report, nearly 30% of credit unions plan to add full-time employees to their payrolls in 2014--an increase from overall figures of 25% in 2013 and 20% in 2012.
 
In credit unions with $200 million or more in assets, a full 60% plan to expand their employee numbers this year.
 
"With credit union operating results in the aggregate, and by most means, back to pre-recession levels, credit unions are healthier than they have been in years," CUNA interim Chief Economist Mike Schenk told News Now .
 
Between trends of double-digit loan growth and 2.5% annual membership growth, "it's a pretty good indication that there would be a need for additional people and resources to serve new members," Schenk added.
 
On average, credit unions plan to add 3.9 full-time employees. That number rises with asset size, hitting 37 expected additions for credit unions with assets of $3 billion or more.
 
Part-time employees also play a part in 2014, with almost a quarter of credit unions planning to add part-time workers and an average 2.1 staff members. Fewer than 10% of credit unions plan to reduce full- or part-time staff, and the vast majority of those planning to make reductions are eliminating just one position.
 
This is the third year that nearly three-quarters of credit unions with $1 million or more in assets have plans for wage or salary increases. "As the job environment improves, credit unions will be paying more to keep their top-performing employees," said Jon Haller, CUNA director of market and corporate research.
 
Both actual increases and anticipated increases are somewhat more likely to be found among credit unions with assets of $20 million or more than among their smaller counterparts.
 
About 70% to 80% of credit unions provided salary/wage increases to each of the three following employee categories: CEO, management employees and non-management employees.
 
Similar percentages of credit unions anticipate providing such increases to each of these groups this year and in 2015.
 
Wage growth also is supported by a reduction in pay freezes, Haller noted. "Only 17% anticipate any wage freezes this year, a significant drop from the 2010 and 2011 high of 45% and the slide to 35% in 2012 and 2013," he said.
 
Those expected wage freezes are more likely to be encountered at credit unions with less than $20 million assets.
 
As credit unions look to a changing leadership demographic, 10% of CEOs--including about 25% to 35% who are currently age 60 or older--plan to retire in the next two years. Seventy-five percent of credit unions with CEO retirements on the horizon have succession plans in place.
 
The survey features compensation data for 90 positions, including CEO and 10 part-time positions. Data includes:
  • Base salaries;
  • Incentives;
  • Bonuses;
  • Total cash compensation;
  • Salary ranges; and
  • Asset categories for $1 billion to $3 billion, and more than $3 billion.
ReadMore

CUNA Councils reaches milestone of 6,000 total members

CU System
MADISON, Wis. (7/11/14)--The Credit Union National Association's nationwide organization for credit union executives--CUNA Councils--has reached the 6,000-member milestone.
 
"That's 6,000 credit union leaders collaborating and sharing insights, and 6,000 credit union leaders working together to drive the movement forward," said Jill Tomalin, CUNA executive vice president/chief operating officer. "If you're not already a Council member, connecting with this ever-growing community of credit union peers is something that will benefit you both professionally and personally."
 
Members have access to cooperative peer resources and experienced advice through the CFO Council; HR/TD Council; Lending Council; Marketing and Business Development Council; Operations, Sales and Service Council; and Technology Council.
 
The celebration and nationwide prize giveaway runs through Aug. 29. There are six ways to enter and six prizes, including a grand prize valued at up to $2,670. In the spirit of paying it forward, for each new member who joins by Aug. 29, the Councils will donate $6 to the National Credit Union Foundation.
 
Use the resource links for more information about CUNA Councils and to join the 6,000-member celebration. ReadMore

Global study finds 1 in 6 U.S. students financially illiterate

CU System
PARIS (7/11/14)--In a recent international study that looked at the financial capabilities of 15-year-olds, U.S. teenagers scored below average in financial literacy, and roughly 17.8% of American students were found to be financially illiterate, meaning they failed to complete even the most basic of tasks.

"This group of students can, at best, recognize the difference between needs and wants, make simple decisions about everyday spending, recognize the purpose of everyday financial documents, such as an invoice, and apply single and basic numerical operations," found the Organisation of Economic and Development, which administered the international assessment.

About 29,000 15-year-olds from 13 countries participated in the test, which gauged knowledge and financial skills such as reading and comprehending a bank statement, calculating the long-term cost of a loan or understanding how insurance works.

Americans scored just below the mean score of the 13 countries. The average score was 500, and U.S. teenagers averaged a 492.

Those from Shanghai-China posted the highest average score in financial literacy, above 600, with Belgium, Estonia, Australia, New Zealand, the Czech Republic and Poland behind them, though only 1 out of 10 students were able to handle complex financial situations across the board, including in the United States.

Students with bank accounts scored higher than those without them, the study found. In the United States, about 50% of 15-year-olds reported having bank accounts and in general performed better than those who didn't.

Other factors that influenced performance were:
  • Gender;
  • Wealth;
  • Cultural possessions and number of books at home;
  • Parents' highest occupational status and level of education;
  • Immigration status; and
  • School location.
ReadMore

Emergency savings bleak? Starting to save is key

Consumer
NORTH PALM BEACH, Fla. (7/8/14)--More than a quarter of Americans do not have an emergency savings account. Of those who do, two-thirds have less than six months' worth of living expenses, according to a Bankrate.com survey (Bankrate.com June 23).
 
The percentage of respondents who say they have no emergency savings has fluctuated between 24% and 28% since 2011. Student loan debt, high household expenses and flat wage growth all contribute to Americans' low savings rates (USAToday.com June 23).
 
If you have no emergency savings, getting started is the most important step. Follow this advice from the consumer publications editors at the Credit Union National Association in Madison, Wis., to cut spending and build your account:

* Get cooperation from family. Discuss money management with your partner, develop a spending plan together, and agree who will take financial responsibility for what. Be honest about your finances. Set SMART goals: specific, measurable, attainable, results-oriented, and with fixed time frames. Once you and your partner are the same path, involve your children. Make learning about money fun, be consistent in your teachings and be a good financial role model.

* Control living expenses. Try to reduce monthly expenses by evaluating TV, Internet and phone bills. Check with providers to make sure you're getting the lowest rates. Compare insurance policies. Check the Association of Insurance Commissioners website (naic.org) for price comparisons and the Insurance Information Institute (iii.org) for advice about picking reputable companies. Take a close look at what you're spending on food; cut back on going out for meals and picking up takeout. Buy ingredients for interesting meals and make extra for leftovers for lunches.

* Make your credit union your partner. Use direct deposit and automatic transfers from your checking into savings. Automate payments and transfers by using online or mobile bill pay. Refinance your home loan or car loans to take advantage of lower rates, if you qualify. The professionals at your credit union can help you get and stay on track with saving and prudent borrowing.
 
For related information, read "Practical Ways to Save Money" and "Live Simply, Reap Savings" in the Home & Family Finance Resource Center. ReadMore

CU Companies joins Minn. housing approved lender network

Products
NEW BRIGHTON, Minn. (7/11/14)--CU Companies has been approved as a Minnesota Housing lender, a designation which allows the company--on behalf of its partner credit unions and community banks--to assist low- and moderate-income Minnesotans with loan programs that deliver affordable financing options.
 
"There is a great need amongst our partner credit unions and community banks to have the ability to serve first-time homebuyers and homebuyers needing down payment assistance," said Andrew Panagos, CU Companies chief strategy officer. "As an approved lender, we can now help those individuals obtain a home they can afford."
 
CU Companies is a service organization that provides a mortgage lending platform for credit unions and community banks. By partnering with CU Companies, financial institutions can serve their marketplaces with a full-service mortgage program.
 
Minnesota Housing adds another level to the program by delivering Start Up, a first-time homebuyer loan offering fixed interest rates and three down-payment and closing-cost options for eligible borrowers. It also offers Step Up, which provides purchase and refinance loans for repeat homebuyers.
 
"This is an excellent way we can serve our community of financial institutions and for those partners to serve their individual communities; it's a home run for everyone," said Panagos. "Home ownership is a dream of many and we don't want the new regulatory burdens to keep credit unions and community banks from effectively serving their communities. Our internal loan officers and processors have been trained and are considered experts in the Minnesota Housing products, plus we have staff with experience in using the products. All of this adds up to giving our partners and their borrowers the confidence that these products will be delivered safely and efficiently." ReadMore

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