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September 15, 2014

CUNA-sponsored Hill forum to examine legislative, regulatory future for CUs

WASHINGTON (9/15/14)--The policy implications of credit unions reaching 100 million memberships will be explored at a forum Wednesday in Washington, D.C. The Hill publication will host the forum, sponsored by the Credit Union National Association, titled "The New Financial Services Landscape: A Policy Discussion."

The forum will feature Reps. Denny Heck (D-Wash), Ed Royce (R-Calif.), Brad Sherman (D-Calif.) and Rob Woodall (R-Ga.). The legislators will speak to The Hill 's Kevin Cirilli about the financial services landscape from a lawmaking perspective.

The event will also feature a roundtable discussion with CUNA interim President/CEO Bill Hampel, Steve Pociask of the American Consumer Institute and Will Marshall of the Progressive Policy Institute. This discussion will examine the regulatory burden facing credit unions.

The event is scheduled to begin at 1:45 p.m. (ET) Wednesday and will be streamed online.

Use the resource link below for registration information. ReadMore

Showcase cultural partnerships during Hispanic Heritage Month

CU System
MADISON, Wis. (9/15/14)--Today is the first day of National Hispanic Heritage Month--an opportunity for credit unions to showcase their involvement and commitment to Hispanic members, communities and businesses.
National Hispanic Heritage Month runs through Oct. 15 and celebrates the histories, cultures and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America.
Today--Sept. 15--is significant because it is the anniversary of independence for the Latin American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Mexico and Chile celebrate their independence days Sept. 16 and Sept. 18, respectively.
"Knowing the cultural makeup of your Hispanic community can influence how and on what days you may choose to celebrate or the content you develop for staff and members," said Anna Pena, client relations manager for Coopera.
Start by welcoming Hispanic members to an open house at your credit union, Pena advised. If you can't do an event on your own, consider partnering with a local business or organization that is trusted by the Hispanic community.
For example, AmeriCU CU, Rome, N.Y., with $1.2 billion in assets, is a sponsor of Tuesday's sixth annual Latino Upstate Summit, which presents networking opportunities with professionals who are immersed in the Latino culture and sharing ideas for connecting with Hispanics.
"Don't be afraid to share your objective with event organizers," Pena said, adding, "Bringing fair, dignified and trustworthy financial services to the Hispanic community is an honorable undertaking." A credit union that is committed to its Hispanic community will tailor its services to meet those needs.
Sebastian Aroca, managing partner with marketing firm Hispanic Market Advisors, suggested companies acknowledge the diversity within their own walls. It is important to recognize the contributions that come from Hispanic employees of different cultures and backgrounds, he said. ReadMore

Where FHLBs can fit in CU operations, Part 1

CU System
PITTSBURGH (9/15/14)--The Federal Home Loan Bank (FHLB) system, made up of 12 regional cooperative banks that are governed by Congress, offer secured loans, called advances, to local lenders to help finance housing, jobs and economic growth.
This allows the banks to offer their members, which include a growing number of credit unions nationally, liquidity for a financial institution's short-term needs; lower-cost funding for mortgages and asset-liability management; and also funds for housing and community development. 
While the Federal Home Loan Bank system has seen membership rates among credit unions climb over the past few years, the participation rate might not be as high as you think, at least for now.
One reason for the gap could be that some credit unions aren't yet fully aware of the benefits these cooperative banks can provide.
"Many credit unions who are not bank members are unaware of the vast type of products the home loan bank offers," Christina Mihalik, vice president of government affairs for the Pennsylvania Credit Union Association, told News Now.
John Foff, business development manager for the Federal Home Loan Bank of Pittsburgh, says that, in the past, credit unions often only looked within the credit union system when seeking liquidity solutions, though that trend might be changing.
Foff noted that in talking with FHLBs throughout the country, many report credit unions have become their fastest growing segment of membership, especially larger credit unions.
"What they've come to realize today ... is that we can be a business partner in liquidity (as well)," Foff told News Now
At the end of June, 1,246 credit unions were members of one of the 12 regional banks, with 441 as active borrowers. Currently, credit unions comprise 10.3% of FHLB members.
Among those credit unions involved, $30 billion in advances have been secured from the FHLBs, up from $27 billion year-over-year.
Credit unions are also represented on several FHLB boards, with two board members on the FHLB of San Francisco, including Richard A. Heldebrant, president/CEO, Star One CU, Sunnyvale, Calif., with $6.7 billion in assets; and two on the FHLB of Seattle: J. Benson Porter, president/CEO, BECU, Tukwila, Wash., and Robert Teachworth, president/CEO, Denali Alaskan FCU, Anchorage, with $544 million in assets.
Credit union participation may also be on the rise, Foff added, because of the National Credit Union Administration's proposal last year that requires credit unions to ramp up access to liquidity for emergency situations.
Although the NCUA did not specifically recognize FHLBs as an eligible source of emergency liquidity in its rule as urged by the Credit Union National Association, the rule itself has sent credit unions in search for alternative liquidity resources.
Credit union consideration of FHLB membership has recently found another challenge. Whether it makes sense for a credit union to utilize the banks or not, a recent proposal by the Federal Housing Finance Agency threatens to make it harder for smaller credit unions to access the services they provide in the first place.
If approved, the proposed rule would require all credit unions to carry 10% of assets in residential mortgage loans to retain membership status, which could prove difficult for smaller credit unions.
CUNA is fighting hard against tougher FHLB membership requirements for credit unions. CUNA Deputy General Counsel Mary Dunn earlier this month said CUNA is urging the FHFA to provide relief for credit unions on this point (News Now Sept. 5).
"The FHLBs are a very important source of liquidity for credit unions in the mortgage marketplace, and it is important all credit unions and their member-owners have access to these resources," Dunn said. "CUNA is working with representatives of the FHFA and three of the banks to assure access."
This is Part One of a series that will cover the relationship between credit unions and the Federal Home Loan Bank system. Part Two, which will run Tuesday, will feature the growing relationship between the FHLB of Pittsburgh and the Pennsylvania Credit Union Association. ReadMore

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FinCEN issues advisory with human trafficking, smuggling red flags

WASHINGTON (9/15/14)--To support law enforcement's efforts to fight smuggling and trafficking, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has released an advisory on possible financial red flags. The information is intended to help financial institutions identify and report suspicious financial activity connected to human smuggling and trafficking.

Human smuggling is defined as acts to bring unauthorized aliens into the United States, transport them within the country or conspire to commit those acts. Human trafficking is defined as the act of recruiting, harboring, transporting a person for forced labor or commercial sex acts through the use of force, fraud or coercion.

FinCEN's bulletin acknowledges similarities between legitimate financial activities and those that could be supporting human trafficking. It recommends evaluating indicators of human smuggling or trafficking in combinations with other red flags and factors.

The new FinCEN advisory tells financial institutions to be on the lookout for such things as:
  • Multiple wire transfers, generally kept below the $3,000 reporting threshold, sent from various locations across the United States to a common beneficiary located in a U.S. or Mexican city along the Southwest border;

  • Multiple, apparently unrelated, customers sending wire transfers to the same beneficiary. These wire senders may also use similar transactional information including common amounts, addresses and phone numbers. When questioned to the extent circumstances allow, the wire senders may have no apparent relation to the recipient of the funds or know the purpose of the wire transfers;

  • Frequent exchange of small-denomination for larger-denomination bills by a customer who is not in a cash-intensive industry; and

  • A customer's or member's account appears to function as a funnel account, where cash deposits occur in cities or states where the customer does not reside or conduct business. Frequently, in the case of funnel accounts, the funds are quickly withdrawn the same day after the deposits are made.
To report suspicions of human smuggling and trafficking, FinCEN requests  financial institutions include one or both of the key terms in the Narrative and the Suspicious Activity Information: "Advisory Human Trafficking" and/or "Advisory Human Smuggling."

The narrative should also include an explanation of why the institution knows, suspects or has reason to suspect that the activity is suspicious.

Use the resource link below to access FinCEN's full advisory, and for more information about the Credit Union National Association's Bank Secrecy Act Conference. ReadMore

Lights, camera, action: League videos spotlight 100M memberships

CU System
MADISON, Wis. (9/15/14)--Credit union leagues across the country are challenging each other to create videos that highlight the 100 million memberships milestone.

Georgia Credit Union Affiliates started the trend by recording interviews with members of $981 million-asset Georgia United CU, Duluth, Ga., who described in their own words what consumers like best about credit unions (News Now Aug. 28).

The Georgia league challenged the California and Nevada Credit Union Leagues, which responded with a video of its own. The California and Nevada leagues' video features a fictional Mrs. Jones who is deemed the credit union movement's 100 millionth member. Mrs. Jones envisions herself as a newly discovered celebrity, but all that is really required of her is a selfie--and Mrs. Jones is OK with that too.

The League of Southeastern Credit Unions also got in the act with a video featuring two women in a work lunchroom discussing how credit unions have surpassed the 100 million memberships mark. They share the story with some of their colleagues and eventually ask the audience to upload their selfies to

The Cornerstone Credit Union League, serving credit unions in Arkansas, Texas and Oklahoma, weighed in with a video, featuring credit union members introducing themselves and recommending credit union membership. The video also includes humorous bloopers and outtakes.

The Cornerstone league has challenged the Ohio Credit Union League to come up with a 100 million memberships video of its own. News Now awaits its response.

Also, the Credit Union National Association will host a 100 Million Membership Forum with The Hill Wednesday in Washington, D.C. "The New Financial Services Landscape: A Policy Discussion" will highlight credit union membership growth, the implications of said growth for continued credit union service to members and overall education on the mission and value of credit unions. (See related story: CUNA-sponsored Hill forum to examine legislative, regulatory future for CUs.)

CUNA also offers a 100 Million CU Memberships campaign advocacy toolkit to help educate credit unions and their members about the campaign and its purpose. The toolkit provides a draft email from a CEO to members, an email from a CEO to employees, and a communication plan that contains several recommendations when  advertising the campaign to members. Use the link. ReadMore

NerdWallet hosting today's TweetChat on CUs, fin. lit.

CU System
MADISON, Wis. (9/15/14)--Hop on Twitter and join NerdWallet for a one-hour TweetChat this morning about the various ways credit unions can, should and do help raise the level of financial literacy among high school and college students.

The Q&A-style chat begins at 11 a.m. (PT), and the discussion can be tracked using the hashtag #CUFinLit and following @NW_Banking.

Credit unions, students, financial literacy organizations and the general public are encouraged to participate and share ideas.

Featured participants include:
  • Ken Worthey, financial literacy and outreach analyst, National Credit Union Administration's Office of Consumer Protection;
  • Gigi Hyland, executive director, National Credit Union Foundation;
  • Tena Lozano, executive director, Richard Myles Johnson Foundation;
  • Rebekah Monroe and Shannon Bartlett, marketing manager and marketing specialist, respectively, Christian Financial CU, Roseville, Mich., with $325 million in assets;
  • Samantha Salazar and David Rodriguez, financial education instructor and financial education manager, respectively, Generations FCU, San Antonio, with $519 million in assets;
  • Jess Bedsole, social media producer, Alliant CU, Chicago, with $8.2 billion in assets;
  • Wendy Loeber, loan officer, CU Community CU, Springfield, Mo., with $94 million in assets;
  • Alysha Klein, Young and Free Florida Spokester, Tropical Financial CU, Miramar, Fla., with $566 million in assets; and
  • Sharon Taller, community outreach manager, Patelco CU, Pleasanton, Calif., with $4.1 billion in assets.

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Maine league educating state CUs, consumers about data breaches

CU System
WESTBROOK, Maine (9/15/14)--The Maine Credit Union League and its credit union service organization, Synergent, hosted a conference call last week to apprise the state's credit unions about the latest information on data security breaches at the Home Depot and other retailers.
Nearly 50 credit unions heard from the league's President/CEO John Murphy and Vice President of Governmental and Public Affairs Jon Paradise, as well as Synergent representatives Rebekah Higgins, assistant vice president of card services;  Gary Glenn, executive vice president; and Ben Jordan, vice president of technology services (Weekly Update Sept. 12).
"Breaches are happening on a near-daily basis, so remaining vigilant is essential," Higgins noted, adding that in some of the breaches, criminals are taking data to access accounts in other ways.
She advised credit unions: "Monitor, watch and tighten up real-time settings is advice that cannot be stressed enough. We are continuing to take steps to help in any way we can, including making sure we have enough plastics on hand to handle these issues."
The league also has been tapped as a subject-matter expert for various media in the state such as the Portland Press Herald, Sun Journal, Bangor Daily News, WCSH-TV 6, WLBZ-TV 2, WMTW-TV 8 and WGME-TV 13.
"Reinforcing what credit unions are doing to help consumers is an important message that we are getting out and we will continue to do so," Murphy said. "Credit unions are well-positioned by focusing on protecting consumers as a result of these stories." These media opportunities highlight the sophistication and expertise of credit unions, he added. ReadMore

CFPB to supervise larger nonbank remittance providers as of Dec. 1

WASHINGTON (9/15/14)--Effective Dec. 1, larger nonbank international money transfer providers become subject to the Consumer Financial Protection Bureau's remittance rules that were adopted in 2013.

"Last year, our new protections for consumers sending money abroad took effect," said CFPB Director Richard Cordray in announcing the new rule. "Today's rule gives us oversight of the larger marketplace and allows us to ensure that consumers are actually receiving those protections."

The CFPB estimates that nonbank providers transfer approximately $50 billion annually through about 150 million individual international money transfers. The bureau further estimates that the rule, proposed in January and adopted Friday, will bring new oversight to about 25 of the largest providers in the market.

The CFPB's remittance rule requires transfer firms to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers are also required to investigate disputes and correct errors.

Credit unions and other financial institutions are already subject to the CFPB's remittance rule.

The Credit Union National Association remains concerned that many credit unions have reduced or eliminated international payment services in light of the remittance rule generally. CUNA continues to urge an exemption from the rule beyond the current 100 transfers per year threshold that the rules currently provide, as well as additional flexibility for credit unions. ReadMore

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