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September 18, 2014

Today's NCUA meeting is 1st for new board member McWatters

Washington
ALEXANDRIA, Va. (9/18/14)--Today's National Credit Union Administration board meeting only has a few items on the agenda, but it is the first meeting with new board member J. Mark McWatters, who replaced Michael Fryzel in August.

McWatters said Tuesday to a group of credit union advocates from the League of Southeastern Credit Unions, the Idaho Credit Union League and the Georgia Credit Union Affiliates that he favored a new risk-based capital rule be written by the agency. (See News Now story: Fall sweep: CU message hits Hill hard before sesson ends.)

Today's agenda will include a request to expand the community charter for First Service FCU, based in Groveport, Ohio, with $136 million in assets, and a quarterly report on the Corporate Stabilization Fund.

It will also include discussion of a final rule containing technical amendments to three parts of the NCUA's rules and regulations.

These technical amendments will likely involve:
  • A section of the Dodd-Frank Act that stripped the NCUA of rule-writing authority for unfair or deceptive acts and practices;
  • Changes to central office and regional structures; and
  • Using the term "payday alternative loans" to describe payday and small amount, small dollar loans.
The meeting will take place at the NCUA's Alexandria headquarters, starting at 10 a.m. (ET).
ReadMore

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Congress should listen, act on reg. relief concerns, lawmakers say at forum

Washington
WASHINGTON (9/18/14)--The three lawmakers present at Wednesday's The Hill forum agree on at least one thing: that credit unions are an integral part of the country's financial services landscape. Reps. Denny Heck (D-Wash.), Brad Sherman (D-Calif.) and Rob Woodall (R-Ga.) spoke at the forum, which was sponsored by the Credit Union National Association.

The three legislators admitted that banking industry representatives are often pushing them and others to reconsider credit unions' tax status.

"I think the economic revenue that would come with taxing these institutions would be far less than the economic benefit we see now," Sherman said. "And that's not even taking into account the fact that a credit union that charges a little less interest, or pays a little more interest on deposits, is generating personal income tax. If you can make 2% on that account, Uncle Sam is getting a piece of that."
Click to view larger imageFrom left, Reps. Brad Sherman (D-Calif.), Rob Woodall (R-Ga.) and Denny Heck (D-Wash.) speak to The Hill's Kevin Cirilli about the role of credit unions in today's financial landscape. (CUNA Photo)

He added that while some opponents of credit unions advertise an additional $2 billion to $3 billion in revenue, the Joint Committee on Taxation has estimated the number to be almost 40% less than that.

Heck said he has a standard response to banking officials that keep pushing him to re-examine credit unions' tax status, paraphrasing a famous quote from economist Walter Heller on supply-side economics.

"To keep coming to us and asking for that, waiting for it to happen, is a little bit akin for leaving the landing lights on for Amelia Earhart," he said. "Credit unions are not taxed the same as banks as a matter of policy."

Woodall said he has an answer prepared as well, should the question be put to him.

"If they believe the credit union structure is so advantageous that it must be changed in order for you to maintain your competitive edge, maybe just join the credit union movement," Woodall said. "I think it's a red herring to suggest that the playing field we have today is somehow uneven."

When the topic shifted to ideas for regulatory relief, Heck admitted that "there's an appetite in the United States House of Representatives for regulatory relief," but the process has been difficult.

"As credit unions have become a bigger and more integral part of the fabric of the community, their concerns about the regulatory environment have grown over time, and I think it behooves Congress to listen to that and act on it," he said.

The second part of the forum, moderated by CUNA interim President/CEO Bill Hampel, featured Steve Pociask, president of the American Consumer Institute, and Michael Mandel, chief economic strategist of the Progressive Policy Institute.

Both were asked about the consequences of overregulation on credit unions, and how this overregulation can affect recovery from the economic crisis as a whole.

Pociask pointed to the 12.25% member business lending cap for credit unions as a regulation that could be slowing recovery. He emphasized the importance of credit unions for picking up their small business lending by 38% since the onset of the recession, while banks have reduced their small business lending by 17% over that same time period.

"As banks were dropping their lending to small businesses, credit unions were stepping up and increasing that lending," he said. "Why is that important? Because if you look at how the cycle works, 65%-70% of jobs created in the upturn are jobs from small businesses. So it's very important to get capital to them. There's definitely demand for it, but the banks aren't meeting it."

With regard to the National Credit Union Administration's risk-based capital proposal, Mandel said it was a "classic case of regulatory oversight."

"It's tightening up regulations just when we need more lending. We saw this after 2000, with the change in accounting rules, which was an overreaction that imposed a lot of costs, but it didn't stop the next financial crisis," he said, adding, "This is the same type of thing, imposing extra costs without doing what needs to be done."

Mandel didn't mince words when he said that the post-crisis reaction of targeting institutions like credit unions "is going to turn out in retrospect to be a disaster. Because it misses the point about what caused this disaster." ReadMore

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Senate Banking leaders request FHLB membership comment extension

Washington
WASHINGTON (9/18/14)--The top Democrat and Republican of the Senate Banking Committee are asking the Federal Housing Finance Agency (FHFA) to apply the brakes on a recent proposal that would change Federal Home Loan Bank (FHLB) membership rules.
 
Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) Tuesday asked FHFA Director Mel Watt to extend the comment period for the proposed rule by 60 days.
 
On Sept. 2, the FHFA issued a notice of proposed rulemaking that would, in part, require all credit unions to hold 10% of assets in residential mortgage loans on a constant basis to become and remain members of the FHLB system. Currently, the rule requires the 10% to be held only at the time membership is approved.
 
In a letter to the agency, the senators wrote, "Given the important role the Federal Home Loan Banks play in providing liquidity to small financial institutions and supporting community development efforts ... any change to membership criteria should only be undertaken after thorough consideration."
 
The Credit Union National Association backs a longer comment period. In a Sept. 8 letter to Watt, CUNA interim President/CEO Bill Hampel warned the proposal "could create significant barriers to credit union membership in FHLBs."  The letter went on to cite the critical role FHLBs play as a source for credit union liquidity.

"The FHFA has not explained why this proposal should be processed on an accelerated basis and thus, we are not aware of the need to expedite it now, particularly since the Advance Note of Proposed Rulemaking was initially issued almost four years ago," the letter reads.

CUNA is deeply concerned that credit unions are not given membership parity with community banks that are not required to maintain the 10% threshold on an ongoing basis in order to retain their FHLB membership.
ReadMore

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Inside Washington

Washington
  •  WASHINGTON (9/18/14)--Julian Castro, who was sworn in to lead the U.S. Department of Housing and Urban Development (HUD) in July, told a housing summit here that mortgage lending standards have become too tight and added that it must change (American Banker Sept. 18). It is time for policymakers to expand the housing market and remove the "stigma" associated with promoting homeownership, he told the Bipartisan Policy Center. The article noted that HUD's Federal Housing Agency will move ahead with a proposed housing counseling program that can help FHA borrowers save thousands of dollars over the life of their loan. Castro also said he supports a Senate housing reform bill, introduced by top Senate Banking Committee members, Chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho), which would wind down Fannie Mae and Freddie Mac while developing a new government backstop for the private securitization market ...
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Comments on CFPB's consumer complaint data narrative due Sept. 22

Washington
WASHINGTON (9/18/14)--Comments are due by Sept. 22 on the Consumer Financial Protection Bureau's consumer complaint narrative proposal, the Credit Union National Association reminds credit unions.

The bureau's original deadline was Aug. 22, but it extended the comment period by a month in response to a number of requests.

Currently, the CFPB discloses on its public database certain complaint data it receives regarding consumer financial products and services.

The proposal would expand the disclosure to include unstructured consumer complaint narrative data. Only those narratives for which opt-in consent has been obtained, as well as application of a personal information scrubbing standard and methodology, would be subject to disclosure.

The proposed policy would supplement the CFPB's existing policy statements establishing and expanding the consumer complaint database.

CUNA has worked with the CFPB to address credit union concerns regarding the complaint database, warning that sensitive or confidential business or consumer information could be inadvertently disclosed when consumer complaints are filed in the database and has urged the bureau to minimize privacy risks and other unintended consequences. CUNA will be filing further comments with the bureau.

Use the resource link below for the full proposal. ReadMore

NEW: Fed plans no debit fee cap change

Washington
WASHINGTON (9/18/14, UPDATED 12:24 p.m. ET)--The Federal Reserve Board today said it will not propose any changes to its cap on debit card interchange fees. The Fed said the decision is based on results of its survey of costs associated with debit card transactions, a survey it executes every two years.
 
This most recent survey, based on 2013 data, indicates that 64% of card issuers covered by the Fed's interchange fee rules had an average cost for authorizing, clearing and settling (ACS) transactions that fell below the Fed's cap.
 
Implementing a provision of the 2010 Dodd-Frank Act, the Fed set a cap on debit interchange fees for issuers with assets of $10 billion or more at 21 cents, and allows certain other charges to cover fraud losses and fraud prevention.

The 64% is "slightly lower than the 66% of covered issuers with average ACS costs below the maximum interchange fee in 2011," the Fed noted in a release today. "Covered issuers with average ACS costs below the maximum interchange fee in 2013 processed over 99 percent of all reported covered transactions, the same proportion as in 2011."

Also in the report, the Fed estimates that debit-card fraud losses to all parties--merchants, cardholders, and issuers--was $1.57 billion in 2013, with an average loss of approximately 8 basis points as a share of transaction value. That was up slightly from 2011.

Use the resource link to access the Fed release and access the survey. ReadMore

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Fed rate changes hinge on economic expansion, Hampel says

Market
WASHINGTON (9/18/14)--The Federal Open Market Committee (FOMC) announced Wednesday that interest rates likely will be held low for a "considerable time" after the asset-purchase program ends, which the Federal Reserve expects will happen next month.

While the committee didn't tip its hand on when exactly it will begin to increase rates, it did offer a bit of insight into what will go into making that decision.

"Chair (Janet) Yellen didn't tell us when rates would start to rise--no surprise--but she did suggest that the timing of the increase will depend on how rapidly the economy expands," said Bill Hampel, interim president/CEO of the Credit Union National Association. Hampel will resume his responsibilities as the trade association's chief economist Monday.

"If monthly job gains average more than 250,000 for the next several months, the increase could come as early as next spring," Hampel added. "If they fall back below 200,000, it could be the fall or later. In between, we're looking at next summer."  

For the past six months, monthly job gains, or nonfarm payrolls, have climbed by an average of 226,000. If that pace holds up, Hampel said, the Federal Reserve likely will begin pushing up rates at mid-year.

In its policy statement released at the conclusion of its two-day meeting Wednesday, the FOMC said the economy is expanding at a moderate pace, and inflation continues to stay below its longer-run goal.

Officials also elevated their estimate for the federal funds rate at the end of 2015 by 25 basis points. By the end of 2017, the Fed said, the rate will be at 3.75% (Bloomberg.com Sept. 17). ReadMore

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Business Rates

Market
Daily Financial Rates -- 2014-09-18

Financial Rates


Thursday, September 18, 2014

03:55 AM CDT

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

TermThu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
Fri
9/12
1 month0.010.010.010.010.01
3 month0.020.020.020.020.02
6 month0.050.040.050.050.05
1 year0.120.130.110.110.11
2 year0.590.550.580.580.58
3 year1.081.041.061.071.07
5 year1.821.781.801.831.79
7 year2.292.262.262.292.22
10 year2.622.602.602.622.54
20 year3.123.113.093.103.02
30 year3.373.363.343.353.27

TREASURY BILLS

Results of the September 15, 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, 9/15
Week Ago
Mon, 9/8
13 weeks0.0150.020
26 weeks0.0450.045

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermThu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
Fri
9/12
high0.3120.3120.3120.3120.312
low0.0700.0700.0500.0500.050
near closing bid0.0700.0800.0800.0800.070
offered0.2800.2800.1000.2700.090
effective rate20.1000.1000.1000.1000.100

FREDDIE MAC (Mortgage commitments, 30 days)

TermThu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
Fri
9/12
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermThu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
Fri
9/12
30 year3.8583.8553.8703.8423.807

LIBOR

TermThu
9/18
Wed
9/17
Tue
9/16
Mon
9/15
Fri
9/12
1 month0.213000.212000.214000.210000.20900
3 month0.369000.366000.365000.363000.36100
6 month0.537000.536000.539000.539000.53700
1 year0.846000.845000.845000.845000.84400

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
9/16
Week ended
9/9
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 0.46% 0.28% 0.18%
Personal Savings $1,000 0.20% 0.10% 0.10%
Personal Interest Checking $2,500 0.36% 0.15% 0.21%
NSF Fee $27.90 $32.03 $-4.13
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 10.16% 10.33% -0.17%
New Auto Loan - 5 Years 2.61% 3.82% -1.21%
Used Auto Loan - 2 year Old - 4 Years 2.77% 4.02% -1.25%
HELOC - 80% LTV - $50,000 4.13% 4.40% -0.27%
HE Loan - 80% LTV - $50,000 - 15 Years 5.66% 5.96% -0.30%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 4.25% 4.27% -0.02%
30 Year Fixed Jumbo 4.31% 4.23% 0.08%
5/1 Year ARM Conforming 2.95% 2.93% 0.02%

Credit Card Products Credit Unions Bank Average Difference
Platinum 9.01% 10.48% -1.47%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.95 $33.42 $-7.47
Reward 9.99% 13.66% -3.67%
Annual Fee $26.71 $99.74 $-73.03
Maximum Late Fee $22.66 $33.72 $-11.06

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.78% -0.18%
Indirect B Tier New Auto Loan - 5 Years 5.32% 5.32% 0.00%
Indirect C Tier New Auto Loan - 5 Years 7.49% 6.77% 0.72%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Wednesday, September 17, 2014. For detailed disclosures click here.

ReadMore

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Ex-NFL player Hoge, CNN Hero Pregracke headline Iowa league convention

CU System
DUBUQUE, Iowa (9/18/14)--Former NFL player Merril Hoge and 2013 CNN Hero Chad Pregracke will headline the Iowa Credit Union Conference, hosted by the Iowa Credit Union League (ICUL), this week in Dubuque.
 
More than 500 credit union CEOs, directors, executive staff, guests and exhibitors are expected to attend this year's conference, themed "Unite for Good."
 
Iowa Gov. Terry Branstad and Dubuque Mayor Pro Tem Karla Braig welcomed attendees Wednesday evening.
 
Pregracke opened the convention today, sharing how he and his team have removed more than 7 million pounds of garbage from U.S. rivers. An ESPN analyst and former NFL star, Hoge will speak on Friday about how he achieved his goals despite career-ending concussions and cancer.
 
In addition, ICUL's Iowa Innovation Group participants will kick off Friday's opening keynote session by sharing their new ideas and prototypes that could be implemented for the benefit of Iowa credit unions.
 
Fifteen breakout sessions will cover topics ranging from innovations in compliance technology, succession planning, loan growth and Europay-Mastercard-Visa chip-card technology.
 
The Iowa Credit Union Foundation will host a benefit Mississippi river boat cruise tonight. All proceeds go toward ICUF's mission of helping Iowans build wealth, responsibility and independence.
 
For real-time updates on Twitter, follow the convention hashtag at #IACUConv. ReadMore

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Your opinion wanted: News Now survey

CU System
WASHINGTON (9/18/14)--A readership survey from News Now, the daily online news publication from the Credit Union National Association, is open for comments through Friday.
 
  Please submit the survey only once. If you completed the survey sent by email Monday, thank you for your participation.
 
Respondents may enter a drawing for a $50 Amazon gift card. The deadline for submitting responses is Friday. Use the link to access the survey.

"News Now is hoping to hear from every reader so we can work to tailor our news coverage to our readers' needs and wants," says Lisa McCue, CUNA vice president of communications and News Now editor.

ReadMore

Tech. advances don't dampen consumer cybersecurity concerns

CU System
SANTA CLARA, Calif. (9/18/14)--While many consumers believe technology will continue to advance in the next decade, most worry that cybersecurity will still pose a problem, a study by McAfee called "Safeguarding the Future of Digital America in 2025" found.

Nearly 7 out of 10 Americans worry about how effective cybersecurity will be in 11 years, with two-thirds citing that the biggest problems will be identity theft, monetary theft and fraud, according to the study.

Up to 77% of consumers fear their families could be victimized by hackers over the next decade. More than 1,500 U.S. consumers were polled for the study.

"People have just started to understand that their personal data is not some ethereal thing," said Brian Johnson, Intel futurist. "They haven't quite figured out what's appropriate for others to know about that data."

This despite a prevailing belief that advancements in technology will continue to grow.

Nearly 3 out of 5 consumers said they will encounter a house that speaks or reads to them in the next 11 years. More than 60% believe their refrigerators will automatically add food to running grocery lists when a product is running low.

And 84% said their home security systems will be connected to their mobile devices.

"As technology, especially the Internet of Things, continues to rapidly advance and increasingly connect our everyday lives, we understand consumers are concerned about how these changes will impact their safety and privacy," said Gary Davis, McAfee chief consumer security evangelist.

Additional findings:
  • By 2025, 38% of Americans believe they will unlock their mobile devices using eye scan or thumbprint technology; and
     
  • One in 3 consumers said they think they will pay for items using fingerprint technology, while 22% said they will use their mobile device, and 26% said they will still be using a debit or credit card.
ReadMore

EMV rollout gains steam at CUs

CU System
MADISON, Wis. (9/18/14)--As security breaches such as the one at Home Depot make both consumers and financial institutions more wary of existing fraud prevention technology, credit unions have begun issuing cards equipped with the Europay-MasterCard-Visa (EMV) technology standard to their members.
 
These cards, which are already common in Canada, Europe and Asia, rely on microchip technology that is more secure than the magnetic strip technology that today's cards employ.
 
Spokane Teachers CU, Liberty Lake, Wash., with $1.9 billion in assets, has begun offering the more secure chip cards to its credit card holders, the Northwest Credit Union Association (NWCUA) reported (Anthem Sept. 16).
 
Merchants have to upgrade their systems to read the new cards, and adoption in the United States has been slow. However, credit card networks have set a deadline of Oct. 1, 2015, for merchants to adopt the technology. Merchants who miss the deadline will face increased liability for fraudulent purchases.
 
"Until merchants upgrade their terminals the new cards won't help protect from these data breaches," said Katie Clark, NWCUA regulatory and compliance analyst. "We'll most likely see the upgrade to the new cards accelerate as we approach next October, when the liability for fraudulent in-person purchases could shift to the merchants."
 
STCU's updated cards will include both the traditional magnetic strip and the new microchip, so they will work whether or not a merchant has upgraded.
 
Initially, STCU is issuing the more secure cards to members who often travel internationally, where the cards are standard. By the end of 2015, though, all STCU credit cards will be equipped with EMV technology.
 
Beginning Oct. 1, First South Financial CU, Bartlett, Tenn., with $476 million in assets, will roll out credit cards embedded with EMV technology to its membership as well.
 
First South Financial President/CEO Craig Esrael told the Memphis Daily News (Sept. 17) that the motivation behind the EMV technology rollout is to help members mitigate some of the risk of data getting hacked in incidents such as the Home Depot breach.

Esrael said the in light of the most recent data breach announcement, card holders will soon be able to use the chip technology as big issuers lay out their strategy for EMV implementation.
 
First South's cards will also include the mag stripe. ReadMore

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Fall sweep: CU message hits Hill hard before session ends

CU System
WASHINGTON (9/18/14)--State leagues and credit unions are making the most of the last days before Congress goes into its mid-term election recess with Hike the Hill visits and meetings with their federal regulator.
 
Click to view larger image (CUNA Graphic)
This week alone, credit union professionals and volunteers from 14 states have trekked to the U.S. Capitol to state their case for regulatory relief, data security standards and preserving the credit union tax status, among other topics.
 
National Credit Union Administration (NCUA) board members Rick Metsger and J. Mark McWatters shared their views of the regulator's risk-based capital (RBC) proposal with delegates from the Georgia Credit Union Affiliates, the Idaho Credit Union League and the League of Southeastern Credit Unions Tuesday.
 
McWatters indicated that a new RBC rule should be written with a "de novo" approach. He also cited the number of comment letters from credit unions and the letters from Congress as a sign that a second comment period is needed, the league's eSignal reported (Sept. 17). Metsger said that the release of the next draft is far down the road because of the sheer volume of comment letters submitted to the NCUA.
 
Members of the House Financial Services Committee, including ranking member Rep. Maxine Waters (D-Calif.) and Rep. Ed Royce (R-Calif.), met with delegates from the California and Nevada Credit Union Leagues.
 
The Wisconsin Credit Union League thanked soon-to-be-retired Rep. Tom Petri (R) for his support of member business lending during a Tuesday reception at Credit Union House. Wisconsin credit unions also met with Sens. Tammy Baldwin (D) and Ron Johnson (R).
 
Earlier in September, credit union leagues from Ohio, Iowa and New Mexico made the trip, and upcoming visits are scheduled by Montana, Illinois and the Dakotas. The Ohio Credit Union League met with 17 of the state's 18 congressional delegates, including meetings with Republican Reps. Steve Stivers and Brad Wenstrup (eLumination Sept. 17).

Over the course of the year, 32 states will have brought the credit union message to elected representatives and federal regulators through the program, sponsored by the Credit Union National Association and state leagues.
 
With congressional delegates heading back to their districts, there are still plenty of opportunities for credit unions to connect, however.
 
"With important issues on the federal and state level, such as our tax exemption, data breaches, payday lending and foreclosure concerns, talking to our elected officials in district is crucial to making sure our voice is heard in Washington and Lansing," said Dave Adams, president/CEO, Michigan Credit Union League (Monitor Sept. 17).
ReadMore

Experian: Financially marginalized need credit building opportunities

CU System
COSTA MESA, Calif. (9/18/14)--A new study from Experian confirms that building a credit history is beneficial to financially marginalized communities.

In partnership with Credit Builders Alliance (CBA), Experian sought to understand the potential impact of loan repayments being reported to them by CBA's members, who are nonprofit lenders.
 
The average client served by a CBA member is high-risk, with about 40% classified as subprime. The study's overarching conclusion showed that consumers who opened a credit product offered by a CBA member--and paid as agreed--experienced a significant shift into a more desirable credit risk segment, raising their credit score and qualifying for additional credit.
 
Experian research estimates that there are 64 million consumers with limited credit history to no credit history that are "unscoreable" or "credit invisibles." Lacking a credit report hurts these consumers' opportunities for gaining employment and qualifying for loans, often resulting in higher deposits for services such as cell phones and utilities.

Quite simply, credit invisibility means fewer economic opportunities for these consumers, when, in fact, low- and moderate-income families need more financial options.
 
"This first-ever national study of CBA's membership has confirmed exactly what our experience has shown to be true--when people pay regularly on their credit obligations and these payments are reported to a credit bureau, those individuals will benefit through building stronger credit reports and scores," said Dara Duguay, CBA executive director. "Ultimately, a better credit score will help individuals gain increased access to safe and affordable mainstream financial products and build assets."
 
Key findings from the study include:
  • Fifty-eight percent of the borrowers experienced increases to their VantageScore credit scores (VantageScore was created in collaboration among the three major credit bureaus as a generic proprietary credit score model);
  • The prime population increased by 5%;
  • More than 20% moved to a lower-risk category; and
  • More than 73% of consumers increased their active, open trades.
Experian said the indicators confirm the relationship between building credit and increasing credit scores, which lowers consumers' risk category and helps qualify them for additional sources of credit. Consumers benefit since an overall more positive credit report tends to result in lower costs of credit. ReadMore

CU System briefs (09/18/2014)

CU System
  • PHOENIX (9/18/14)--Arizona State CU, Phoenix, with $1.6 billion in assets, awarded $38,000 to 19 students and alumni of Arizona universities and colleges through its community leaders scholarship and loan reduction grant program. The seventh annual grant and scholarship program supports the credit union's ongoing commitment to provide financial assistance to students and alumni of in-state colleges and universities. "The credit union's cooperative culture stems from our focus on what we can do to help Arizona residents and community members," said David E. Doss, Arizona State CU president/CEO. "Our scholarship program has been in place for seven years, and is one of the many ways we give back to the community" ...
  • CHANDLER, Ariz. (9/18/14)--Authorities are searching for a man who fled on bike after allegedly robbing San Tan CU, Chandler, Ariz., with $9 million in assets. After entering the branch, the suspect placed a burgundy-and-gray drawstring bag on the teller counter and demanded the teller "to give him all the money," azfamily.com reported (Sept. 17). The suspect reportedly stated he was armed but did not display a weapon. The teller handed over a known quantity of cash and the suspect fled the branch, then rode off on a black mountain bike ...
  • WICHITA, Kan. (9/18/14)--The Kansas Credit Union Association's Wichita office is relocating to 2544 N. Maize Court in northwest Wichita. After 3:30 pm (CT) Friday, phone and fax lines will be unavailable. Access will resume on Monday, Sept. 22. The league will continue to be available by email Friday. For urgent Expandachek-related issues between 3:30 and 5 p.m. (CT), email expandachek@kcua.org and leave a phone number ...
ReadMore

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Millennials: Rethink credit vs. debit

Consumer
NEW YORK (9/16/14)--There is a generational divide when it comes to shopping: A CreditCards.com survey indicates that boomers and millennials both choose plastic, but for the older cohort the word is "credit" and for the younger, it is "debit" (MarketWatch.com Sept. 2).
 
Both systems work well but boomers might point out to their juniors that using debit to the exclusion of credit has its handicaps. Millennials prefer debit over credit by a ratio of nearly 3 to 1, according to the survey, even though debit cards offer fewer protections and rewards and don't help young people build credit.
 
Matt Schulz, senior industry analyst at CreditCards.com, suggests that psychology may be a factor in the decision; consumers may be trying to limit spending to the money they have by using a debit card, which pulls money directly from a checking account. But if a scammer gets hold of a debit card, the consumer could be liable for unauthorized charges of $500 or more. Credit card holders are only responsible for up to $50 and can report a bogus purchase as fraud.
 
"If your debit card information gets stolen, somebody can take real money out of your account that you won't be able to use to make a car payment or a doctor's bill," Schulz says. "That money may be gone for a week or two."
 
Credit Union National Association Center for Personal Finance editors point out that, by choosing "debit" and entering a personal identification number, your transaction is treated as an ATM transaction.
 
The editors advise, "Instead, when you're making retail purchases with your debit/ATM card, choose 'credit.' You'll bypass any potential fees--and the funds still come out of your share draft/checking account."
 
Another good reason: Credit transactions require a signature, which helps guard against fraud.

For related information, read "Gotta Have It? Check Impulse Spending" and "What Will EMV (Chip) Credit and Debit Cards Mean for You?" in the Home & Family Finance Resource Center. ReadMore

CUAnswers reports growth, dashboard release

Products
GRAND RAPIDS, Mich. (9/18/14)--CU*Answers, a credit union service organization based in Grand Rapids, Mich., reported stockholder growth has increased and the release of a new patronage comparison dashboard.
 
The core processor to 200 credit unions nationwide also announced a "Cost of Compliance" contest.
 
CU*Answers added eight new stockowners during the 2014 business year. In the last five years, the 100% credit union-owned core processor has added more than 50 new owners, matching the number of owners added in the 10 years prior. In that same five-year period, the price of new stock ownership has increased by $100,000. CU*Answers currently has 126 credit union owners.
 
CU*Answers also recently introduced a new patronage comparison dashboard, which allows credit unions to instantly compare the participation of two specific segments of the credit union membership, narrowed down any number of ways.
 
Population segments can be defined by the type of membership, reason for joining the credit union, gender, age range, tiered service level and balance range, then compared side-by-side on account activity and products used.
 
The tool allows credit unions to better align future marketing campaigns with products and services, CU*Answers said.  
 
The CU*Answers "Cost of Compliance" contest is sponsored by its compliance division, AuditLink. Open to all credit union CEOs and chief financial officers, the contest asks participants to create a template that provides a standard way of calculating the cost of compliance.
 
The template should list the costs of compliance and provide a way of tracking the costs. Participants are also asked to provide an implementation plan for their standard of calculating the cost of compliance.

Submissions are due Oct. 15. Contest winners will be announced at CU*Answers CEO Strategies conference in November. The first-prize winner will receive $2,500, the second-prize winner will be awarded $1,500, and $1,000 will go to the third-prize winner. ReadMore

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