ANN ARBOR, Mich. (12/11/13)--Credit unions continue to hold a high reputation in customer satisfaction, resulting in a 3.7% increase this year over last year's ranking in the American Customer Satisfaction Index (ACSI).
For 2013, credit unions have an ACSI benchmark of 85--significantly higher than the bank rating of 78. Banks may have inched upward by 1.3% from 2012, but credit unions' increase in the approval rating --at 3.7%--was triple that of banks, according to the cross-industry survey of customer satisfaction.
"Credit unions continue to be recognized as trusted financial providers that put member service first," said Paul Gentile, executive vice president of strategic communications and engagement, Credit Union National Association. "The credit union cooperative model centers around helping consumers improve their financial lives, and these survey results reflect how important that is for consumers in today's challenging economic environment."
Free checking and lower interest rates are among the reasons why the credit union rating rose, ACSI reported, and the historically better member experience continues to buoy service ratings. Courteous and helpful staff notched a score of 93--higher than the bank rating at 91--followed by quick and efficient transactions at 90, where banks stood at 88.
"Credit unions continue to benefit from a very strong emphasis on customer service," David VanAmburg, ACSI director, told News Now.
Credit unions' local feel and the ability of staff to make members feel valued and welcome also are reflected in the results, he added.
Credit union members do believe their current credit union offers competitive interest rates (85), compared with bank customers who ranked their institution at 73. "This is an interesting psychological area," VanAmburg said. "Bank customers must be thinking about credit unions and community banks when it comes to the comparison.
"Conversely, credit union members are clearly looking at big banks and finding a welcome prospect at their credit union."
Banks got their uptick in the satisfaction rating this year, though modest, despite it being a year filled with stories about big banks continually hiking fees and about multimillion-dollar settlements regarding allegations that some megabanks played a role in setting the financial crisis on fire by allegedly misleading investors about the quality of the home loans at the heart of mortgage-backed securities. (See related story, Court Approves $500M MBS Settlement by BofA/Countrywide, in today's Market News section of News Now
). Banks have now reached the score they had in 2007 prior to the financial crisis.
The ACSI Finance and Insurance Report 2013 is based on interviews with 5,296 customers, chosen at random and contacted via telephone and email between July 10 and Sept. 4.
MERIDEN, Conn. (12/11/13)--In a video interview with the Credit Union League of Connecticut, a congresswoman from Connecticut shared tips for credit unions wanting to ensure their position on preserving their tax status is heard and supported in Congress.
U.S. Rep. Elizabeth Esty (D-Conn.), who is a supporter of credit unions' tax status, told Kelly Fuhlbrigge, league vice president of government relations, in the short video that "it is really important to reach out to your own member of Congress. I pay the most attention to the voices from my own towns and my district." She tracks the visits, e-mails and calls from constituents, she said.
"If you're in Washington, stop by the office; or stop by the local community office." A special tip, she said: "Call the local office in your own state so then we know that local folks care."
"Grassroots really do matter. Voices from home count for a lot," she said.
Esty's interview comes on the heels of another interview with U.S. Rep. John Larson (D-Conn.), who told the league credit unions must maintain close contact with their legislators during the tax reform process (News Now
The league aims to collect a video from each member of the Connecticut delegation, said Fuhlbrigge.
The full video can be viewed on the league's new CUBE TV page by using the link.
MADISON, Wis. (12/11/13)--Credit unions can be an important educational venue for consumers and merchants to learn about credit card surcharges, including what's acceptable and what's not compliant.
Since Jan. 27, 2013, merchants have been allowed to add surcharges to purchases made with a credit card. Both Visa and MasterCard have FAQs on their websites regarding merchant surcharges, and Visa has a form available to file inquiries about potential non-compliance. The Credit Union National Association is providing resources to educate consumers and merchants alike. See the links below.
"Letting credit unions know about these surcharges falls right under our consumer protection umbrella," said Michele Johnson, CUNA director of federal legislative affairs.
The 2012 settlement between the payment industry and retailers provided that merchants can surcharge card transactions but only if they follow a strict set of rules:
The surcharge can only be placed on a credit card transaction, not debit or prepaid;
The surcharge has to be relative to the amount of purchase and cannot exceed the cap of 4% of the transaction;
Customers must be notified of any surcharge before they make a purchase. This can include signage at the store entrance, at the point of sale or, if online, on the first page that references credit card brands; and
Surcharge fees must disclosed on sales receipt.
"We don't want members to be charged surcharges when they shouldn't be," said Rod Staatz, president/CEO, SECU, Linthicum, Md. If members have a place to report non-compliance, he added, then Visa can take care of the issue with the merchant.
Visa is currently the only card company providing a direct link to report non-compliance.
Credit card surcharges are not allowed in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
NOTTINGHAM, U.K. (12/11/13)--The proliferation of new payment channels was cited as the biggest issue for the payment and card industry in a survey by Compass Plus, an international provider of retail banking and electronic payments software to processors and financial institutions.
About 28% of respondents cited new payment channels as the No. 1 payments issue. A closely related area--the growth of near field communication/contactless technology--was the second-most cited issue, mentioned by 26% of respondents.
The annual survey--which was conducted at the international CARTES Secure Connexions Event 2013 in Paris. About 70 executives representing financial institutions, mobile operators, payment processors and other industry professions responded.
Credit unions monitoring mobile payments issues will be interested to learn that mobile payments offer the biggest opportunity for card providers in 2014, according to the survey. At the same time, many respondents said they hedged about the immediate prospect for mobile payments. About 40% of respondents do not expect the mass adoption of mobile payments to take place for two to three years.
About 28% of survey respondents said mobile would account for 20%-30% of payment channels in two to three years, and nearly a quarter thought mobile would be used for 30%-40% of payments.
About 32% of executives expected the mass adoption of mobile payments to take place within one to two years, according to the survey.
The wide range of forecasts for mobile's adoption may be explained by its quick rise on the financial industry's radar. It did not make the top five in Compass Plus' 2012 survey.
Card-not-present fraud was cited by 34% of respondents as posing the greatest payment fraud threat, followed by Internet banking and phishing, both at 24%.
WASHINGTON (12/11/13)--Rep. Mel Watt (D-N.C.) has been confirmed by a 57 to 41 vote in the U.S. Senate to become the director of the Federal Housing Finance Agency.
Earlier in the day, the Senate approved a series of procedural votes that cleared the way for the final approval of Watt's nomination.
The Obama administration's success in getting its nominee for FHFA director through the confirmation process owes a nod to the recent changes in the Senate's filibuster rules.
The chamber voted a reported 57 to 49 to move Obama's FHFA choice forward. Prior to the filibuster rule changes, it would have required 60 votes to move ahead—a near impossibility in Watt's case where support and opposition were clearly delineated along party lines.
Watt was nominated by President Barack Obama in May. Watt has served in the U.S. Congress since 1992, and is a veteran member of the House Financial Services Committee. If confirmed by the Senate, he would replace FHFA Acting Director Edward DeMarco, who has led that agency since Sept. 1, 2009.
WASHINGTON (12/10/13)--As credit unions prepare to comply with pending Consumer Financial Protection Bureau mortgage regulations, the Credit Union National Association continues to answer key questions: CUNA staff addressed one credit union's concern about semi-monthly payments, and provided general details on changes to mortgage loan originator (MLO) regulations and disclosure changes in this month's CompBlog Wrap-Up.
First, the credit union query: How can a credit union comply with the periodic statement requirements in the CFPB's Mortgage Servicing final rule if it permits members, as a courtesy, to make semi-monthly payments on certain mortgage loans?
The answer is simple: CUNA compliance staff noted that credit unions may still issue one monthly statement covering the entire month or may decide to issue statements that reflect the semi-monthly payments in situations where the legal obligation requires a monthly payment, but semi-monthly payments are permitted for the convenience of the member. More details, as spelled out in the rule itself, are provided in the Wrap-Up.
Up next, CUNA provides a refresher on MLO regulations: The Wrap-Up details how credit unions can determine whether potential loan originators are qualified for the job, and what credit unions can do to ensure that MLOs receive appropriate training in connection with offering closed-end consumer credit transactions secured by a dwelling.
Outlines of the CFPB's integrated Truth in Lending Act and Real Estate Settlement Procedures Act disclosures, which were released last month, are also included in the Wrap-Up.
The Wrap-Up also lays out five things credit unions must know about the homeownership counseling list requirement included in the new CFPB mortgage rules, and provides information on the National Credit Union Administration's new fixed assets rule and supervisory letter on enterprise risk management.
And, as it does every month, the CompBlogUp lists the upcoming effective dates of new regulations, important compliance articles and reports to read, as well as CUNA training programs.
For more of the CUNA CompBlog Wrap-Up, and other compliance gems, use the resource link.
WARRENVILLE, Ill. (12/11/13)--Todd Adams, who has served as interim CEO of Alloya Corporate FCU since September, has been named the corporate's CEO, assuming leadership of the corporate immediately, announced Alloya Corporate's Board of Directors Tuesday.
"This appointment brings continuity to the corporate and best ensures that we will continue to build on the positive momentum of the past two years," said Amy Sink, Alloya's chair, who said the corporate conducted a national search and interviewed many candidates. "The corporate has a great story to tell in terms of the value it returns to members, and the corporate is now poised for even stronger success in the future," she said.
Adams, who joined Alloya in 2003, previously served as its senior vice president and president of Balance Sheet Solutions, Alloya's wholly owned investment and investment advisory credit union service organization. He has diverse experience within the financial services industry, is a certified public accountant and a member of the American Institute of Certified Public Accountants. His bachelor's degree in business administration/accounting is from the University of Iowa.
"Alloya's cooperative business model is 100% focused on supporting credit union success," Adams said. "Through aggregration of resources, Alloya is able to offer over $5 billion in advised lines of credit, a full suite of cash management and investment products, access to a wide range of efficient payment services through Premier View, and free education through Connection webinars. I believe in the future of the credit union movement and the important role that Alloya plays to support credit union members," Adams added.
MADISON, Wis. (12/11/13)--The Disclosures, a credit union music duo, have released a new financial education album to teach kids that the path to wealth is paved with hard work and discipline.
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With the tongue-in-cheek title, "The Secret to Being Rich," the album includes 10 original songs that incorporate core financial literacy concepts including saving, responsible spending, the importance of charity, dangers of "too good to be true" advertising and even the basics of how loans work.
"We've found that music and humor can be very effective ways of reinforcing learning," said band member Christopher Morris, who also serves as director of communications with the National Credit Union Foundation. "Since we both work closely with financial education programs in our day jobs, we knew this was an important direction to take our music in and help a wider audience."
Morris's fellow band member, Chad Helminak, is Web and member development strategist for the Wisconsin Credit Union League.
The Disclosures also have developed discussion materials for teachers and parents, as well as a classroom performance, which they will debut in a Texas elementary school tour in February.
For their second album, Morris and Helminak enlisted additional credit union talent for production and artwork. The album was mixed by Squirrel Trench Audio, owned by Morriss Partee of the marketing firm EverythingCU.com. The album's artwork was created by Sissybird Design, owned by Lesley Clark of Tinker FCU, Oklahoma City, Okla.
"The credit union industry has been very supportive of our music since we started, so we thought it was important to 'keep it in the family' and were fortunate to call on the talents of Morriss and Lesley to improve our sound and look for kids," said Morris.
"The Secret to Being Rich" album is available for download on all major digital music stores such as iTunes, Amazon and others. Physical CDs also can be purchased at cdbaby.com, and The Disclosures will also process bulk orders of CDs at discount for purchase by financial institutions, schools or youth organizations.