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August 20, 2014

FSR: Unverified complaint narratives could work against consumers

Washington
WASHINGTON (8/20/14)--The Consumer Financial Protection Bureau's (CFPB) plan to allow consumer narratives in its complaint portal could likely work against consumers, as well as financial institutions, by spreading inaccurate information, according to the Financial Services Roundtable (FSR).

The FSR, which represents large integrated financial services companies, launched a campaign featuring social media and multimedia advertisements highlighting problems with the bureau's proposal.

The CFPB has accepted consumer complaints since it opened in 2011 and, to date, has handled more than 400,000 complaints. It announced the proposal to expand its consumer complaint database to include the consumer's narrative account of their experience and the problem they would like to see resolved.

The bureau said this would give context to complaints, spotlight specific trends and help consumers make more informed decisions. Those against the proposal worry it would spotlight inaccurate information without giving a named financial institution the chance to respond.

"The CFPB's plan will feature only one side of the story, and such one-sided accounts will not advance the CFPB's mission of better informing and helping consumers," said FSR President/CEO Tim Pawlenty.

The FSR cites the CFPB's own Consumer Response Report from 2013 that found, among other things, that almost 70% of all complaints filed were closed with a simple comment or clarification to the consumer.

According to the FSR, there are many unanswered questions in the CFPB's proposal, including how the CFPB plans to protect the identities of contributing consumers from the Freedom of Information Act and other public record requests and how the bureau will verify that a consumer is posting under a correct identity with an accurate account of what transpired.

On Aug. 6, the CFPB blog posted an item about universities in the Big Ten Conference that did not disclose partner contracts with financial partners for products. The report named four credit unions as failing to disclose details of the school and the financial institution it partnered with, but had to remove two credit unions from the article after it was found there was no such agreement in place.

The Credit Union National Association's Deputy General Counsel Mary Dunn took to the blog's comments to express concern that the blog entry, particularly the headline, made the impression that nondisclosure of a partnership meant these institutions were hiding information from consumers, when in fact many such disclosures are public, in accordance with state law or practices.

CUNA maintains that the other two credit unions should not have been named because there is no legal or regulatory requirement for such disclosures.

"There is no current regulatory requirement to publicly disclose a financial institution's contract with a college or university. Even so, some credit unions voluntarily choose to disclose these agreements, including two credit unions that were listed in your blog," Dunn wrote.

CUNA is currently pursuing issues related to consumer narratives being added to the CFPB complaint database with its consumer protection subcommittee. ReadMore

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Guidance on mortgage servicing transfers includes do's, don'ts

Washington
WASHINGTON (8/20/14)--New guidance issued by the Consumer Financial Protection Bureau (CFPB) illustrates things the bureau's examiners will look for loan servicing responsibilities are transferred. The CFPB's new mortgage servicing rules took effect Jan. 10 and are intended to protect borrowers from runarounds by loan servicers.

The guidance, issued by the bureau Tuesday, comes with several months of examinations under the new rules and highlights policies that are likely to get a financial institution flagged, as well as policies that meet the rule's requirements.

The new rule requires servicers to maintain accurate records, promptly credit payments, correct errors on request and maintain policies and procedures to facilitate handing over information when a servicer transfers a loan to a new company.

The CFPB currently has examination authority for financial institutions with more than $10 billion in assets. While that currently means only a few credit unions fall under the bureau's examination supervision, the new guidance is important for credit unions of all sizes, said Colleen Kelly, senior assistant general counsel for regulatory affairs for the Credit Union National Association.

"This guidance provides helpful compliance information for all credit unions that transfer mortgage servicing," she said.

The guidance lays out several specific scenarios in which CFPB examiners concluded that the servicers had engaged in unfair practices, including:
  • Failing to properly identify loans that were trial or permanent modifications with the prior servicer at time of transfer;

  • Failing to honor trial or permanent modification offers unless the servicer could independently confirm that the prior servicer properly offered a modification or that the offered modification met investor criteria; and

  • Borrowers subsequently receiving a new modification with inferior terms, and in one case, the servicer conducted a foreclosure sale.
According to the CFPB, the servicers in the scenarios above were directed "to adopt policies and procedures to prevent continued unfair practices in this area and to remediate harmed consumers."

CFPB examiners consider transferors flagging all loans with pending loss mitigation applications, as well as approved loss mitigation plans (including trial modification plans) as having met the new rule's requirements.

Transferees requiring the transferor servicer to supply a detailed list of loans with pending loss mitigation applications, as well as approved loss mitigation plans will also be considered at having met the new requirements.

Use the resource link below to access the full bulletin. ReadMore

NCUA audio from Chicago Listening Session available online

Washington
ALEXANDRIA, Va. (8/20/14)--The National Credit Union Administration has posted an audio recording of its July 10 Listening Session in Chicago to the agency's YouTube page.

The two-hour, 54-minute recording carries the entirety of the agency's second of three sessions held this summer.

More than 160 people attended the Chicago discussion, where the primary topic was the agency's proposed risk-based capital (RBC) rule. NCUA Chair Debbie Matz and board member Michael Fryzel, a Chicago native, were in attendance.

The NCUA also held Listening Sessions on June 26 in Los Angeles and on July 17 in Alexandria, Va.

Matz noted in this month's The NCUA Report that the agency received more than 2,500 comments on its RBC proposal, from comment letters and attendees at the Listening Sessions, which she called "an unprecedented volume of input."

The Credit Union National Association previously posted a recording of the Chicago session to its website ( News Now Aug. 8). The recording was provided by the Illinois Credit Union League.

CUNA also has made available a full audio recording of the NCUA's first Listening Session held in Los Angeles, as well as key audio clips of that session.

Use the resource links below to access the recordings. ReadMore

What NCUA examiners look for on cybersecurity efforts: NCUA Report

Washington
ALEXANDRIA, Va. (8/20/14)--With National Credit Union Administration examiners trying to identify and assess cybersecurity risks, the agency has released a list of cybersecurity areas examiners look at. The information is featured in this month's The NCUA Report .

The assessment includes the following questions:
  • Does the credit union have a board-approved information security policy commensurate with its size and complexity that meets the NCUA requirements?

  • Has management recently performed and documented an information security risk assessment to identity threats, assess potential effects and are risk-remediation plans in place?

  • Is the network and critical components such as servers and computers running updated virus and malware protection software?

  • Does the credit union have a password policy that meets or exceeds industry standards? According to the NCUA, this means passwords with at least eight alphanumeric and special characters; and

  • Is there a vendor management program, information security awareness training program, incident response and crisis management plan, and do they comply with NCUA regulations?
The article also recommends credit union management consider the possibility of cybersecurity insurance, which should cover costs associated with business interruptions, legal fees, public relations initiatives and hiring of additional staff or vendors.

A recent Ponemon Institute study cited by the agency estimates the average cost of a data breach is $3.5 million, which includes costs for investigations, notifications to members and reissuing credit and debit cards.

The NCUA Report also featured monthly commentary from Chair Debbie Matz. Her column listed several aspects of the agency's risk-based capital proposal that would likely be changed in response to feedback received through comment letters and the three Listening Sessions held during the summer.

She acknowledged that all risk weights in the proposal should be reviewed, and that the agency is considering lowering risk weights for investments, mortgages, member business loans, credit union service organizations and corporate credit unions.

"Examiners would have to undergo a rigorous process to convince their supervisory examiner, regional director and ultimately the NCUA board, if they believe a credit union needs to hold more capital than required by regulation," she wrote.

She also said the rule's implementation period will go "well beyond" the originally proposed 18 months, and that it would be enough time to give the NCUA time to update the call report system, train examiners on the revised rule and allow affected credit unions time to adjust their balance sheets.

This month's NCUA Report also contains:
  • A summary of the agency's fixed-assets proposal;
  • An update on the Office of Small Credit Union Initiatives FAQ+ search engine;
  • A summary of the $1.1 million in mid-year operating budget reductions;
  • A report on economic growth and rising interest rates;
  • The basics of media relations for credit union management; and
  • Information about the NCUA's video series on preventing fraud.
Use the resource link below to access the full issue. ReadMore

Circuit court reinstates opinion allowing NCUA MBS cases to proceed

Washington
WASHINGTON (8/20/14)--In a decision immediately called "good news for credit unions" by the National Credit Union Administration Tuesday, the U.S. Court of Appeals for the 10th Circuit reinstated its ruling that allowed the NCUA to sue several banks for alleged deceptive practices when selling mortgage-backed securities.
 
The NCUA has brought suit against certain banks while serving as the liquidating agent of several failed corporate credit unions, alleging that deceptive information was used to form, market and sell the mortgage-backed securities.
 
Banks have claimed in the case that the NCUA missed a three-year window to file suit. The Denver-based 10th Circuit Court of Appeals, however, sided with the federal credit union regulator, citing a past provision that extends the deadline for a government regulatory agency to sue on behalf of a failed financial institution.
 
But on June 16 the U.S. Supreme Court vacated and remanded for further consideration that 10th Circuit ruling.
 
The directive from the Supreme Court to the circuit court did not necessarily indicate a need for the 10th Circuit to change its opinion. Rather it instructed the lower court to look at its decision in light of a new Supreme Court ruling, established in an environmental case, which defined the difference between statutes of limitation and statutes of repose, and whether various forms of "pausing" the period of time set forth by statute apply to statutes of repose.
 
The Tuesday decision affects a total of six cases, allowing the NCUA to move forward.  There are a total of 13 related cases that are pending. One case is awaiting an appeal at the Ninth Circuit Court of Appeals on this same issue. Most of the others are in the discovery phase.

The bank defendants in the 10th Circuit case now will have to evaluate their next move, which could involve further appellate review, settlement, or discovery and further litigation and ultimately trial in the district court.
 
The NCUA has settled similar suits with J.P. Morgan, Bank of America, Citigroup, Deutsche Bank Securities and HSBC, resulting in more than $1.75 billion in settlements lost by the corporate credit union investments ( News Now June 17). According to the NCUA, the recovered funds are being set against any future corporate stabilization assessments on credit unions. ReadMore

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Business Rates

Market
Daily Financial Rates -- 2014-08-20

Financial Rates


Wednesday, August 20, 2014

03:55 AM CDT

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

TermWed
8/20
Tue
8/19
Mon
8/18
Fri
8/15
Thu
8/14
1 month0.040.020.030.040.04
3 month0.030.030.030.040.04
6 month0.050.050.050.060.06
1 year0.110.100.090.100.10
2 year0.460.440.420.420.43
3 year0.900.890.860.870.88
5 year1.591.581.551.581.59
7 year2.052.041.992.042.06
10 year2.402.392.342.402.43
20 year2.942.922.862.932.97
30 year3.213.203.133.203.24

TREASURY BILLS

Results of the August 18, 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, 8/18
Week Ago
Mon, 8/11
13 weeks0.0300.030
26 weeks0.0500.050

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermWed
8/20
Tue
8/19
Mon
8/18
Fri
8/15
Thu
8/14
high0.3120.3120.3120.3120.312
low0.0500.0500.0500.0700.050
near closing bid0.0800.0700.0700.0700.080
offered0.1200.1000.2800.1100.100
effective rate20.1100.1100.1100.1100.110

FREDDIE MAC (Mortgage commitments, 30 days)

TermWed
8/20
Tue
8/19
Mon
8/18
Fri
8/15
Thu
8/14
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermWed
8/20
Tue
8/19
Mon
8/18
Fri
8/15
Thu
8/14
30 year3.7263.7073.7133.7363.782

LIBOR

TermWed
8/20
Tue
8/19
Mon
8/18
Fri
8/15
Thu
8/14
1 month0.215000.214000.216000.214000.21600
3 month0.369000.365000.366000.366000.36800
6 month0.540000.534000.539000.539000.53900
1 year0.845000.841000.844000.842000.84400

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
8/19
Week ended
8/12
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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Housing starts swell in July

Market
WASHINGTON (8/20/14)--Housing starts jumped 15.7% in July up to 1.093 million annualized units, pushing starts 21.7% higher year-over-year, according to numbers released by the Commerce Department Tuesday.

While multifamily home starts have remained strong throughout 2014, singly-family starts also contributed to the surge in July, climbing 8% for the month ( Economy.com Aug. 19).

"This was a good month, but we are not out of the woods yet," said economists from IHS Global Insight ( MarketWatch Aug. 19).

Still, multifamily starts led the way, increasing 33% in July and reaching their highest mark since 2005.

All regions except the Midwest experienced gains in starts, according to Moody's, with a solid rebound in the South, which had seen starts fall flat in June ( Economy.com ). The Northeast and West posted strong numbers, but largely they were concentrated in multifamily starts.

Meanwhile, both house completions and permits for new houses also improved, the latter likely signaling that companies are planning to build in the near future.

Now at a nine-month high, permits jumped 8.1% from June and sit 7.7% higher year-over-year.

Completions of privately owned housing units climbed 4% to 841,000, a gain almost entirely driven by single-family housing units.

However, "the single-family market is progressing much more slowly, with permits running at only one-half their 2000 pace," said Gregory Bird, Moody's analyst ( Economy.com ). "Rental housing in benefiting from droves of young adults forming households as the economy has improved, preferring the flexibility of renting and lacking the financial wherewithal to become a homebuyer." 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 0.35% 0.15% 0.20%
NSF Fee $27.87 $32.04 $-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 10.14% 10.42% -0.28%
New Auto Loan - 5 Years 2.58% 3.83% -1.25%
Used Auto Loan - 2 year Old - 4 Years 2.76% 4.02% -1.26%
HELOC - 80% LTV - $50,000 4.14% 4.41% -0.27%
HE Loan - 80% LTV - $50,000 - 15 Years 5.68% 6.01% -0.33%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 4.11% 4.15% -0.04%
30 Year Fixed Jumbo 4.22% 4.06% 0.16%
5/1 Year ARM Conforming 2.93% 2.87% 0.06%

Credit Card Products Credit Unions Bank Average Difference
Platinum 9.02% 10.88% -1.86%
Annual Fee $25.00 $58.20 $-33.20
Maximum Late Fee $26.03 $33.92 $-7.89
Reward 10.00% 12.11% -2.11%
Annual Fee $26.71 $102.75 $-76.04
Maximum Late Fee $22.58 $33.20 $-10.62

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 7.52% 6.75% 0.77%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Tuesday, August 19, 2014. For detailed disclosures click here.

ReadMore

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Consumer inflation tapers after spring surge

Market
WASHINGTON (8/20/14)--After climbing briskly from April to June, the consumer price index edged up 0.1% in July, according to the Labor Department.

The slowdown was fueled by a 0.3% drop in the energy index, with all energy categories falling, including gasoline, electricity, fuel oil and natural gas ( Economy.com Aug. 19).

Tepid inflation growth, for some, reinforces a widely held view that the Federal Reserve won't begin raising short-term interest rates, which it has kept low to stimulate the economy, until inflation normalizes sometime next year.

"This latest inflation reading confirms our view that the Fed will wait until mid-2015 for a liftoff," Gregory Daco, Oxford Economics lead U.S. economist, told MarketWatch (Aug. 19).

Both headline and core inflation now sit at about 2% on a year-over-year basis, according to Moody's.

Consumer prices have advanced for nine straight months, but July's reading was the weakest since February.

Food and beverage prices rose 0.4% after a 0.1% gain in June and sit 2.6% higher year-over-year. Medical care, apparel and new-vehicle prices also all ticked up.

Used vehicles, tobacco, airline fares and household furnishings, however, all reported weak months.

"A sustained pickup in consumer prices is facing challenges because fresh weakness in the global economy is exerting deflationary pressures," said Arijit Dutta, Moody's analyst ( Economy.com ). "Import prices fell and producer prices barely rose in July, differing from the generally strong readings this year." ReadMore

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News of the Competition (08/20/2014)

Market
  • WASHINGTON (8/20/14)-- The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Wedbush Securities Inc., a Los Angeles-based securities and investment firm, for systemic supervisory and anti-money laundering violations . FINRA believes that Wedbush, one of the largest market access providers in the United States, negligently allowed direct market access and sponsored access to broker-dealers and non-registered market participants from January 2008 to August 2013 because it did not provide enough resources to ensure the integrity of the system. The oversight allowed market-access customers to pour into U.S. exchanges where they could make "thousands of potentially manipulative wash trades and other potentially manipulative trades," according to FINRA ...
ReadMore

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NFCC: Prevent holiday blues by checking budget now

CU System
WASHINGTON (8/20/14)--Don't want coal in your stocking for breaking the holiday budget? The National Foundation for Credit Counseling (NFCC) is encouraging consumers to assess their current financial status before heading into the holidays.
 
"Consumers may still be receiving the summer vacation and back-to-school bills, but should not lose sight of the fact that the holiday spending season is just around the corner.  This makes it vitally important for a person to understand their current financial situation before taking on new debt obligations," said Gail Cunningham, NFCC spokesperson. "Doing otherwise could result in damaging an already fragile financial situation."
 
The NFCC offered a financial checkup quiz as part of the assessment, where a simple true or false can give consumers an idea of where they stand.
 
True or false:  "Concerning my current financial situation, I ..."
  1. Know how much I currently owe on each credit card.
  2. Am receiving collection calls and notices.
  3. Have money saved to pay cash for holiday expenses.
  4. Will be adding new debt on top of old debt if holiday expenses are charged.
  5. Have reviewed my credit report and score in the past 12 months.
  6. Am near the maximum amount allowed on my lines of credit. 
  7. Am current on my vehicle payment.
  8. Have applied for a payday loan, title loan or credit card cash advance in the past 12 months.
  9. Have savings in addition to money earmarked for holiday spending.
  10. Have overdrawn my checking account more than twice in the past 12 months.
If the answers for the odd-numbered statement were true, consumers are in good shape. Answering true to the even-numbered statements means borrowers may be headed for choppy waters and should re-evaluate budgets before holiday spending begins. ReadMore

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La. league launches new biz development council

CU System
HARAHAN, La. (8/20/14)--The Louisiana Credit Union League recently announced the launch of its new Louisiana Marketing and Business Development Council, an organization the league hopes will equip professionals with the tools necessary to help propel the credit union movement in Louisiana.

Introduced last week during the league's annual meeting and convention, the council will provide a space for credit union professionals to work and learn from one another in a collaborative environment, while also providing access to resources and other opportunities that will help spark creativity.

"By pulling together individual experiences and knowledge, council members can evoke change," the league said in a press release.

Membership on the council and participation in any of the council's events, including webinars, conference calls, meetings and conferences, is open to all credit union employees and trade associations affiliated with the Louisiana league. Membership is now open.

Those who participate will have access to professional networking opportunities throughout the year, including:
  • Professional development opportunities;
     
  • Reduced registration fees for council events;
     
  • Periodic teleconferences with Louisiana credit union marketing professionals;
     
  • Networking opportunities with other Louisiana credit union professionals; and
     
  • Regular e-newsletter updates from the council.
Members of the advisory committee, which provides overall direction for the council, include:
  • Emily Beatmann, Section 705 FCU, Lafayette, with $33 million in assets;
  • Heather Escott, Lafayette Schools FCU, with $174 million in assets;
  • Kelli Green, Centric FCU, West Monroe, with $113 million in assets;
  • Jill Skaggs, Bossier FCU, Bossier City, with $157 million in assets; and
  • Ashley Varnam, Louisiana FCU, La Place, with $183 million in assets.
ReadMore

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CU, college relationships mean higher fin. ed.

CU System
MADISON, Wis. (8/20/14)--There may be a university logo on their debit cards, but collegiate credit unions also are integral to financial literacy efforts at their namesake institutions.
 
This week, the board of trustees for Seminole State College of Florida in Sanford approved a partnership with CFE FCU, Lake Mary, that will support financial education and scholarships.
 
The $1.4 billion-asset credit union will develop an on-campus financial literacy program, contribute to programs at the college's Career Development Center and host money management workshops. The sponsorship will provide up to $250,000 in annual support for Seminole State College over the next 10 years.
 
In 2015, CFE FCU will launch a special branded debit card with the college's logo. For each debit card purchase, the credit union will make a donation to the Foundation for Seminole State College. The foundation will use the proceeds of the donations to provide scholarships and support other programs.
 
Student members also benefit from belonging to their university credit union. Many offer free checking, access to surcharge-free ATM networks, shared branching and on-campus ATMs or branches. Universities with high populations of international students focus on free incoming wire or interbank transfers to help students get money from home.
 
Debit rewards programs are popular as well. Purdue FCU, West Lafayette, Ind., with $823 million in assets, offers a free student checking account that includes cash back for debit card usage. In a reward of a different kind, Harvard University Employees CU, Cambridge, Mass., with $452 million in assets, treats good students with good eats. Students who show their GPA of 3.5 or above will receive a $10 restaurant gift certificate from the credit union.
 
St. John's University, Collegeville, Minn., will have a student-run branch on its campus this fall, thanks to a grant from the Minnesota Credit Union Foundation. The branch of $11 million-asset Collegeville Community CU will be one of the first credit unions on a university campus in Minnesota.
 
The branch will be managed by a 2014 St. John's graduate and employ up to six students part time. The credit union also hopes to work with the school departments to offer real-life experiences, ranging from accounting to finance and marketing.
  ReadMore

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Youth align with CUs, building 100M memberships: Fox report

CU System
TAMPA, Fla. (8/20/14)--Stressed by economic doldrums and callous bank policies, young adults may be finding safe harbor in credit union membership, according to an Aug. 18 report by WOFL-TV , in Tampa Bay, Fla.
 
Chris Chmura, FOX 13 consumer reporter, recently interviewed Suncoast CU's Gary Vien, who Chmura called a "foot soldier" in the financial revolution.
 
 
 
"I think millennials choose credit unions because they connect to it, because they connect with the mission," said Vien, who is chief administrative officer at the $5.7 billion-asset Tampa, Fla., credit union. "We save people money."
 
As the credit union movement celebrates the milestone of 100 million memberships, its not-for-profit cooperative structure and better rates are attracting members like Larissa Dias-Lizarraga.
 
"Immediately, I felt the difference," said Dias-Lizarraga, a teacher who spent 10 years with a traditional bank paying fees for account maintenance and statements. "They were just trying to take my money, and that's not OK," she told Chmura.
 
"Our generation and credit unions share a lot of values," the 33-year-old added.
 
Though the movement has reached that membership milestone, it still is far behind the banking industry, with only 6% of U.S. deposits found in credit unions and one location for every 14 bank branches.
 
Chmura noted that this generation of financially and philosophically savvy adults will ask more of their financial institutions, which means, Vien said, banks will have to pick up their game.
 
In New York, the member-friendly missions of First Source FCU, New Hartford, N.Y., with $388 million in assets, and AmeriCU CU, Rome, with $1.2 billion in assets, also appear to have bolstered membership growth to the 100 million mark.
 
As a 28-year-old, Joe Leonard ditched his bank and joined First Source FCU. Now, at 43, he boasts of the "great personal service and one-on-one time" he gets from his credit union, his exclusive financial institution ( Utica Observer-Dispatch Aug. 16). "I tell people all the time how much better it is."
 
New York credit unions have notched a 5 million membership milestone as well this year ( News Now Aug. 13).
 
Judith Cowden, vice president of member relations and marketing, $1.2 billion-asset AmeriCU, Rome, credited recent success to the dissatisfaction with bank mergers and fees combined with the credit union's low loan rates and lack of fees.
 
"The bigger commercial banks have pulled out of this area and don't seem to be interested in us," Cowden told the Observer-Dispatch . "And the practices that have been put in place by those that remain have really alienated the average consumer. No one wants to have to pay so much to access their own money." ReadMore

CU House in Mo. welcomes summer Democratic caucus

CU System
JEFFERSON CITY, Mo. (8/20/14)--The Missouri Credit Union House in Jefferson City served as the host site for the Missouri House Democrats' summer caucus and reception last week.
 
Click to view larger image Rick Nichols, president/CEO, and Dana Alderman, vice president of member development, River Region CU, Jefferson City, left, talk with State Rep. Judy Morgan (D-Kansas City) and State Rep. Charlie Norr (D-Springfield) during the Missouri House Democrats' summer caucus, held in Missouri's own Credit Union House. (Missouri Credit Union Association Photo)
Credit union leaders had the opportunity to talk with a number of Democratic House members and candidates ahead of the September veto session and November general elections. House Minority Leader Jacob Hummel (D-St. Louis) and members of the House Financial Institutions Committee also attended ( Missouri Difference Aug. 15).
 
"Building relationships with lawmakers, sharing credit union concerns and telling our story is crucial for the future of the credit union industry," said Rick Nichols, president/CEO, River Region CU, Jefferson City, $99 million in assets. "This brought a large group of candidates and potential candidates together, which enables us to share key points about credit unions with them before the legislative session kicks in."
 
Also representing credit unions were Dana Alderman, vice president of member development, River Region CU; Greg Newsom, branch manager, United CU, Fulton, with $143 million in assets; and David Kent, director of state legislative affairs, Missouri Credit Union Association (MCUA).

Hummel also thanked MCUA for allowing the caucus to use the Jefferson City location. "Our members enjoyed interacting with leaders in the credit union industry and were grateful for the hospitality," he said.

More than a dozen groups and individuals have used Missouri Credit Union House for meetings this year. Upcoming events during the veto session include receptions by Paul Fitzwater (R-Potosi), who is a member of the House Financial Institutions Committee, Craig Redmon (R-Canton) and Lyndall Fraker (R-Marshfield).
  ReadMore

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CU System briefs (08/20/2014)

CU System
  • ST. PAUL, Minn. (8/20/14)-- The Minnesota Credit Union Foundation is accepting grants for this fall for credit unions to launch financial education projects. Non-credit union organizations may also apply for grant funding, but they must partner with a Minnesota credit union and demonstrate how the project will affect credit unions and their members. Applications will be accepted through Oct. 1 , and grants will be evaluated by the foundation's board of directors on credit union value, community impact, collaboration, creativity and past involvement in and support of foundation activities. Recipients will be announced by mid-October ...
     
  • HELENA, Mont. (8/20/14)-- Montana Credit Unions for Community Development (MCUCD) launched its new website that is intended to be a one-stop consumer resource and toolbox for credit unions, partner organizations, credit union members and Montana consumers. The website keys in on four areas: free tax services, matched savings accounts, consumer resources and financial education. MCUCD is a statewide nonprofit organization working with Montana's credit unions to improve the social and economic well-being of all Montanans ...
ReadMore

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Retirees: GAO finds managed account fees offset gains

Consumer
NEW YORK (8/19/14)--Any retiree wants the best return on retirement accounts. But trying to achieve strong returns by using managed investment accounts could backfire, according to a new Government Accountability Office (GAO) report (Marketwatch Aug. 5).
 
Managed accounts involve professionals making decisions about what vehicles the products invest in, versus passive investing that tracks common indices such as the Dow or a market sector such as small cap funds. That hands-on management requires investors to pay higher fees, which may offset some or all of the gains. The GAO report looked at eight managed account providers accounting for 95% of the market.
 
Since regulatory changes in 2007 gave employers the OK to automatically enroll 401(k) participants into managed accounts, these kinds of investments have become more popular, offered in 36% of plans in 2012, up from 25% in 2005. Many observers think the plans will only become more popular as baby boomers approach retirement, a time when many workers turn to the more tailored advice managed accounts offer.
 
The GAO observed that fees for managed accounts--fees in addition to the expense ratios participants already pay to invest in mutual funds--range widely, from nothing to as much as 1% of the account balance each year. As a result of the added fees, the GAO found that "401(k) participants who do not [consistently] receive higher investment returns from the managed account services risk losing money over time."
 
Some managed account providers claim the funds earn a bonus of as much as three percentage points a year. But the GAO study, citing Vanguard data, reported that "published returns for managed account participants" were "generally less than or equal to returns" of other popular 401(k) investments, including target date funds or balanced funds invested in a mix of stocks and bonds.
 
In addition, the GAO study noted a lack of standards allowing consumers to compare managed account performance with that of other 401(k) investments, leaving investors with no way to accurately size up an investment. The GAO report also noted that the Labor Department, the 401(k) plan regulator, does not mandate disclosure of performance benchmarking for managed accounts, although it does for other 401(k) investments.
 
The report also cited a possible conflict of interest for managed account providers, who may have a financial incentive in recommending that retirees stay in the former employer's 401(k) plan and continue to pay managed account fees. It might be a better choice for retirees to transfer assets to an annuity or individual retirement accounts, the GAO report noted.
 
The report noted, too, that some managed account providers might not serve as fiduciaries; a fiduciary must make decisions based on what's financially best for you and also has to disclose any possible conflict of interest. The Credit Union National Association's Home & Family Finance Resource Center has reported that, "Three-fourths of investors incorrectly believe that financial advisers are fiduciaries and two-thirds wrongly believe stockbrokers are fiduciaries ... That ignorance can be costly."
 
The Labor Department requires a managed account provider to act as a fiduciary, and assume liability for flawed advice, when participants are enrolled automatically in these accounts. But if participants opt in to managed accounts, the rules do not "have a similar explicit requirement," according to the GAO report. "[S]ome providers may actively choose to structure their services to limit their fiduciary liability," the report noted.
 
For related information, read "Making Dollars and Sense of Financial Planner Designations" and "Your 401(k) Manager Not Always Best Adviser" in the Home & Family Finance Resource Center. ReadMore

CSS' Silanis inks deal with Salesforce, Microsoft Dynamics

Products
NEW YORK (8/20/14)--Silanis announced Tuesday it has launched a new set of e-SignLive pre-integrated e-signature solutions developed for Salesforce and Microsoft Dynamics CRM (customer relationship management) software.

Integrating e-SignLive into these CRM systems allows business users to easily prepare, manage and send documents for an e-signature within their CRM environments, according to Silanis, a CUNA Strategic Services alliance provider.

The apps also enable sales and marketing teams to make business transactions faster while at the same time improve the customer experience.

"Organizations of all sizes are looking for competitive advantages in every aspect of their business," said Michael Laurie, Silanis vice president of product strategy and co-founder. "The contracting process is a great first interaction with e-signatures--it's where a business can see that e-signatures can help close the deal quickly while also creating a great customer experience."

Customers that use the new e-SignLive apps also will be able to:
  • Deliver and manage contracts and other documents in real-time;
     
  • Easily integrate e-signatures into their existing processes; and
     
  • Securely and legally sign and store documents.
Credit unions and other financial institutions that use e-SignLive for their customer-facing processes will have access to the same e-signature solution, but now with a tightly integrated CRM tool that can be used for signing non-disclosure agreements, statements of work, agreements and contracts, Silanis said. ReadMore
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