PLEASANTON, Calif. (7/21/14)--Thirty-nine member service fees erased. Balance transfer: gone. Card replacement: gone. Early mortgage payoff: gone. It's all part of $4.1 billion-asset Patelco CU's mission--to remove any barriers to creating a great experience of banking for its members. And it's a mission driven by Erin Mendez as she closes in on her first anniversary of being president/CEO of the Pleasanton, Calif., credit union.
"We are returning Patelco to its roots of being a credit union that stands behind the credit union member and does what's best for the member," Mendez told
"The majority of our members are just middle-class people from all walks of life," she said. The fees--which created a "bill environment"--were a nuisance to members and to the staff tasked with collecting them.
The one fee that has been most obvious to members is the plastic card replacement fee, Mendez said. The credit union's branches are equipped with instant issue systems for ATM, credit and debit cards, which means no mailing costs. "That's the one members say, 'Oh my gosh, thank you,' when we can hand them their new card without charging them," Mendez said.
Some might wonder how Patelco will recoup the $800,000 reduction in fee income. Mendez said it will be balanced by deepening the relationships with their members. "We believe in 'banking on trust'--we won't nickel and dime our members," she said.
"To me it's critical to have enriched our members' lives and provide them with service and value," Mendez told
. "We are rallying to do the right things for the members."
FARMERS BRANCH, Texas (7/21/14)--Representatives from the Cornerstone Credit Union League and a group of El Paso-area credit unions last week met with Consumer Financial Protection Bureau (CFPB) Director Robert Cordray and his staff to discuss the impact on credit unions of recent regulatory changes by the agency.
The forum was part of several roundtables in the El Paso area with different groups to discuss issues pertaining to the CFPB's operations (
Several credit unions indicated that they would continue to write non-QM loans because members are unable to qualify for loans under the QM rules. Cordray expressed support for non-QM loans, as many lenders have shifted to only issuing QM loans due to perceived risks.
Cordray also addressed remittance transfers, and how the CFPB believes misinformation about the new requirements convinced many smaller entities to leave the market. Several of the credit unions indicated that they no longer provide remittance services as a result of the rule, due to vendor issues and possible risk in the error resolution process.
Much of the discussion centered on "pain points" created by the implementation of the Dodd-Frank Act, especially the new ability-to-repay and qualified mortgage (QM) rules. Cordray asked about specific staffing issues at each credit union, and how staffing changes were incorporated into operations.
Cordray expressed confidence that credit unions could continue to provide remittances under the new rule, and would lend the CFPB's assistance in working with vendors to fix remittance issues. He stressed the importance of financial service providers participating in the remittance process. Their departure might force members to look to less reliable services for remittances, he said.
Overall, Cordray praised credit unions for their efforts in assisting low-income consumers, especially those in the El Paso area. He encouraged credit unions to continue to be a market leader in providing short-term, small-dollar loans as a preferred alternative to predatory payday lenders. With the CFPB assuming regulatory authority over nonbanking entities, including payday lenders, he also asked that credit unions partner with the CFPB in reporting any abusive practices by these companies.
WASHINGTON (7/21/14)--Concerned that credit unions in his state will be facing increased capital requirements under the National Credit Union Administration's proposed risk-based capital (RBC) rule, Sen. James Risch (R-Idaho) became the latest lawmaker to submit a letter to the agency.
Risch's main concern is that the rule would be "unduly burdensome" to credit unions offering agricultural, small business and residential mortgage loans.
"Nationally, over 4,000 credit unions offer mortgage products that equate to a little over 6.5% of the entire mortgage market and enjoy loss rates well below the national average," he wrote. "The proposed rule could force credit unions to reduce the availability or affordability of loan products, restricting credit availability to their members, especially those that live in rural and low-income areas."
He went on to say that credit unions in Idaho would face increase capital requirements of approximately $44 million to remain well-capitalized. Several credit unions have suggested to Risch that the rule would prompt changes in the way they operate in order to maintain their capital buffers.
The NCUA concluded the last of three Listening Sessions Thursday, and RBC was the primary topic during every session. The agency said it will release wrap-up information on the sessions this week.
NCUA Chair Debbie Matz said during the sessions that "everything is on the table" as far as changes to the proposal, and has already indicated the 18-month implementation period spelled out in the proposal will change.
WASHINGTON (7/21/14)--The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) has released the inaugural
technical bulletin, which examines data from Suspicious Activity Reports (SARs) filed by financial institutions. The bulletin is a successor publication to The SAR Activity Review: By the Numbers, which was issued once or twice a year starting in 2003.
The July issue features data from more than 1.3 million SARs filed from March to December 2013. This data is used for law enforcement investigations and regulatory compliance at the state and federal levels, as part of a larger set of data pertaining to the Bank Secrecy Act (BSA).
"In the first six months of 2014 alone, over 350 unique agencies representing a broad cross section of federal, state, and local law enforcement, regulators, self-regulated organizations and state attorney offices operating nationwide accessed Bank Secrecy Act data via FinCEN's portal," the report reads. "Thousands of agents, analysts and investigative personnel from each of these entities have conducted in excess of one million queries against the database during that period."
The SAR Narrative Spotlight this month examines bitcoin, a type of virtual currency. Because bitcoin isn't overseen by a central authority, its anonymous nature makes possible illegal activities harder to detect.
The bulletin notes that while bitcoin is a virtual currency, financial institutions of all types can play a role in the life cycle of the purchase, use and sale of bitcoin for standard currencies.
"This may include depository institutions that house the accounts of virtual currency users, administrators and exchangers; additionally, depending on the transaction, correspondent banks may also be involved," the report reads. "Each institution has a unique vantage point from which to observe these transactions and identify suspicious activity."
This puts financial institutions in position to observe everything from bitcoin dealers who may be acting as unregistered money service businesses to funds stolen from compromised accounts that are being converted into bitcoin.
"Altogether, SARs filed by the various filing entities may provide valuable information related to accounts, ownership, and other identifying information, and bitcoin addresses associated with suspicious activity," the report reads.
The Credit Union National Administration will host a BSA conference Oct. 26-29 in Las Vegas. The annual conference will bring together BSA compliance officers, state and federal examiners, industry experts and regulators to discuss BSA compliance issues.
Throughout the four days of session, FinCEN, the National Credit Union Administration and the Office of Foreign Assets Control will provide the latest information relevant to credit unions.
Use the resource links below for more information.
WASHINGTON (7/21/14)--Meeting a July 18 deadline set by Rep. Patrick McHenry (R-N.C.), the National Credit Union Administration Friday sent the chair of the House Financial Services subcommittee on oversight and investigations the clarifications he requested on the agency's risk-based capital (RBC) proposal.
In his request for more detail and an explanation of the agency's reasoning when drafting the RBC plan, McHenry wrote that as "a matter of fairness and transparency," the public deserves the opportunity to understand the logic behind this "far-reaching" proposal.
The NCUA's proposal would require credit unions to hold capital at 8% of risk-based assets in order to be considered adequately capitalized and 10.5% to be considered well-capitalized. This is in addition to the 6% and 7% leverage ratio requirements to be adequately and well-capitalized. The NCUA would also reserve the right to require credit unions on a case-by-case basis to hold additional capital. The proposal would apply to federally insured "natural person" credit unions with more than $50 million in assets.
The agency response, signed by Chair Debbie Matz, includes a
Summary Table of Changes in Risk Weights
that flows over six pages. It names almost 40 asset categories and states the current risk weights inferred under the NCUA's net worth rules, those of the Federal Deposit Insurance Corp.'s rule for banks, and the risk weights under the NCUA's proposal. At the end of each asset line is the agency's rationale for risk weighting under the proposal.
The NCUA chair's letter--six pages even without the risk-weight charts--said the rationale behind the RBC plan overall is to require that credit unions with a higher appetite risk hold enough capital to match that risk. That requirement, Matz wrote, is intended to protect the National Credit Union Share Insurance Fund and the whole credit union system from losses.
Other areas covered in Matz's letter include the agency's view of the cost to credit unions in terms of maintaining a capital buffer, a cost-benefit analysis of the proposal, and an explanation of the extent to which NCUA examiners would be empowered to assess and make capital recommendations to credit unions that might deviate from the new RBC standards.
The NCUA, through a series of three Listening Sessions and other public statements, has made it clear its RBC proposal will be revised before a final rule is approved. One point of change--highlighted as a concern by McHenry in his letter and by many others--is that an implementation period will be longer than the currently proposed 18 months.
The Credit Union National Association, also a proponent of that change, has thanked the NCUA for its willingness to address problems within the current proposal. However, CUNA has also expressed concerns that the changes the agency is contemplating be significant enough to bring the kind of improvements credit unions need in a final regulation.
BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (7/21/14)--A contingent of 10 officials from five Costa Rican credit unions and FEDEAC, the Costa Rican credit union trade association, gained insight on effective lobbying and formulating a unified message during a four-day visit with the League of Southeastern Credit Unions (LSCU) in Tallahassee, Fla.
During four day of meetings with League of Southeastern Credit Union, a contingent of Costa Rican credit union representatives meet with members of Florida Gov. Gov. Rick Scott's staff. (League of Southeastern Credit Unions Photo)
The Costa Rican visitors also toured the state Capitol, met with the governor's staff and toured three Tallahassee area credit unions.
During the visit to the Florida Capitol, the league showed Costa Rican credit unions how the committee process works and then how the final vote takes place on the floor. While meeting with Gov. Rick Scott's staff, the credit union officials toured the lieutenant governor and governor's offices. They met with Scott's Director of Legislative Affairs Darrick McGhee to learn more about the governor's priorities, the issues facing the state and how the league interacts with government offices.
"The league really wanted to give our Costa Rican credit union partners an upfront look at how we lobby our state lawmakers," said LSCU President/CEO Patrick La Pine. "By showing the Costa Rican officials how we formulate our messages and then having them go to the capitol to see how the process ties together, they gain a better understanding of how a unified message can influence policy."
Discussion during the visit included how the league interacts with the Legislature on behalf of credit unions, how it organizes grassroots campaigns and how it taps credit unions to assist in the lobbying process--all practices the Costa Ricans were looking to bring back to their country.
The three credit unions the group visited were: Tallahassee-Leon FCU, with $43 million in assets; First Commerce CU, with $400 million in assets; and Envision CU, with $279 million in assets. Each stop gave the Costa Rican credit unions an opportunity to see how each credit union takes part in advocacy on the state and national level. Costa Rican credit unions were interested in the U.S. credit unions' technology, specifically mobile banking and remote deposit capture.
BEAVERTON, Ore. and MOUNTAIN VIEW, Calif.--(7/21/14)--The second annual Dave and Dan Classic, presented by First Tech FCU and OnPoint Community CU, raised a record $408,000 for Credit Unions for Kids, which benefits Children's Miracle Network Hospitals.
The tournament took place at The Reserve Vineyards and Golf Club in Aloha, Ore., July 14.
The golf tournament was created under the leadership of Tom Sargent, former First Tech president/CEO, and is named after NFL Hall of Fame inductees Dave Wilcox and Dan Fouts. This year's edition featured 28 celebrity guests including fellow Pro Football Hall of Famers Ronnie Lott, Mel Renfro and Kellen Winslow.
"This tournament would not have succeeded without the support of our corporate sponsors, credit unions, volunteers and friends of the Children's Miracle Network Hospitals," said Greg Mitchell, president/CEO of First Tech CU, Mountain View, Calif., with $6.6 billion in assets. "Through the years, the tournament has not only given credit unions the chance to collaborate, but to also make a meaningful impact in the lives of others by helping children get out of hospital beds and onto the playground. I'm proud to say we've raised more money this year for Credit Unions for Kids than ever before."
Formerly known as the "Hank and Moose Open," the tournament has raised more than $3 million during the past 14 years to become one of the biggest credit union-sponsored events supporting Credit Unions for Kids, a nonprofit organization under which America's credit unions raise funds for Children's Miracle Network Hospitals.
"The Dave & Dan Classic is an outstanding event and the money raised is a huge benefit to Credit Unions for Kids," said Rob Stuart, president/CEO of OnPoint Community CU, Portland, Ore., with $3.4 billion in assets. "We firmly believe in the credit union philosophy of 'people helping people' and this is one example of how credit unions come together to give back to our communities. We are proud to be involved and support Children's Miracle Network hospitals and the children and their families who benefit from their care."
Said John Lauck, president/CEO of Children's Miracle Network Hospitals: "Our credit union partners never cease to amaze us, and First Tech and OnPoint are no exception. I am honored to be involved with the Dave and Dan tournament and grateful for the generosity that allows our member hospitals to provide life-saving care to local kids. Donations from this event will directly impact families in the First Tech and OnPoint communities by funding pediatric rehabilitation treatments and cancer research among other critical services, equipment and charitable care."
Tournament proceeds benefit several children's hospitals including the Doernbecher Children's Hospital, Portland, Ore.; Sacred Heart Medical Center, Eugene, Ore.; Seattle Children's Hospital; Oakland Children's Hospital, Oakland, Calif.; and UC Davis Children's Hospital, Sacramento, Calif.
ALEXANDRIA, Va. (7/21/14)--The video recording of the National Credit Union Administration's June open board meeting is now available on its website. Videos of past board meetings also are available.
The meeting's agenda included five items:
- A final rule reducing administrative burdens on credit unions that voluntarily liquidate;
- A proposed rule expanding the powers of federal credit unions by allowing qualified institutions to securitize loans they have originated;
- A proposed rule creating safe-harbor protection for certain securitized assets and protecting investors in cases of conservatorship or liquidation;
- A proposed rule to assist underwater borrowers by allowing federally insured credit unions to refinance or modify real estate loans without obtaining an additional appraisal; and
- A request by $355 million-asset Mainstreet CU, Lenexa, Kan., to convert to a federal charter.
Videos are generally posted several weeks after the meeting, due to required efforts to make them accessible for the hearing and visually impaired.
Use the resource link below to for videos of NCUA board meetings.