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LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

December 23, 2014

IOLTAs now fully insured by NCUA, Matz announces

Washington
ALEXANDRIA, Va. (12/23/14)--The federal credit union regulator has met President Barack Obama's signature of the Credit Union Share Insurance Fund Parity Act with encouragement, declaring that lawyers' trust accounts at federally insured credit unions are now insured to the limit by the Share Insurance Fund.

NCUA Chair Debbie Matz said the agency will make changes to its regulations to fully conform with the act.

"Credit unions now have parity with banks and, effective immediately, can fully insure lawyers' trust accounts up to $250,000 for each owner of the funds, which they could not do before," Matz said. "An attorney who is a member of the credit union where the trust account is opened now has a choice of financial institutions for that trust account. This enhances public confidence in both the banking and the credit union systems now that federal share and deposit insurance programs administered by NCUA and the [Federal Deposit Insurance Corp.] are the same."

Previously, interest on lawyer trust accounts (IOLTAs) could only be held at a credit union if each person involved with the account was a member of the credit union. According to the NCUA, this placed credit unions at a competitive disadvantage because it was impractical to require attorneys to establish multi-client lawyers' trust accounts in different credit unions to ensure full share insurance coverage.

The bill allows IOLTAs and similar accounts to be held at a credit union if either the administering attorney or the escrow agent is a member.

The passage of the bill has been lauded by credit unions, particularly as an avenue to welcome law firms and other businesses who traditionally could not establish a business relationship due to a credit union not being able to offer IOLTAs.

"I would like to thank President Obama for signing this into law and Rep. Ed Royce (R-Calif.) and Rep. Ed Perlmutter (D-Colo.) for their leadership," Matz said. "Sen. Angus King (I-Maine) and Sen. Mark Warner (D-Va.) played important roles moving this through the Senate. I am also pleased Congress adopted NCUA's recommendations regarding this legislation."

The Credit Union National Association was a longtime advocate for the bill, writing several letters urging 113th Congress to pass the bill before it adjourned and addressing the matter in a meeting with White House economic policy staff. ReadMore

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CUs should be exempt from MLA proposal, says CUNA

Washington
WASHINGTON (12/23/14)--A revamped Military Lending Act (MLA) could negatively affect the delivery of high-quality, reasonably priced financial products to servicemembers, reads a joint letter from numerous credit union stakeholders, including the Credit Union National Association.

The Department of Defense (DOD) proposal would place a 36% cap on the military annual percentage rate (APR) of interest for credit products, as well as other protections.

"From our perspective as credit unions' advocates, any changes to the current rules should curtail and eliminate the unscrupulous business practices of organizations targeting our military personnel--and not harm credit unions that are dedicated to the financial well-being of their member-owners," reads the letter, which was also signed by the leaders of the African-American Credit Union Coalition, Defense Credit Union Council, National Association of Federal Credit Unions and the National Association of State Credit Union Supervisors.

The letter goes on to say that the services and products that have been cited as the need for the proposal are generally not offered by credit unions. None of the lenders mentioned in the proposal are credit unions.

This--along with the fact that credit unions face a number of other compliance burdens from the current MLA rule, the Dodd-Frank Act, the National Credit Union Administration, the Consumer Financial Protection Bureau (CFPB) and state regulators--is reason enough that credit unions should be exempt from the proposal.

"The credit union industry strongly urges DOD to exempt credit unions completely from the proposed changes, including new coverage under an expanded definition of 'consumer credit,' which would apply to certain open-end credit products. In this case, credit unions would remain covered by the existing MLA rule," the letter reads.

The letter also urges the DOD to work with the NCUA to ensure the agency's Payday Alternative Loans (PAL) product can continue to be offered, and are "properly excluded" from the proposal changes. NCUA Chair Debbie Matz wrote to the DOD last week with a similar request.

Credit unions support further efforts to educate servicemembers, the letter concludes, and the DOD is encouraged to collaborate with entities such as the CFPB. The letter pledges credit union assistance for financial education outreach at the national and local levels. ReadMore

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Senators urge HUD's Castro to lower FHA loan fees

Washington
WASHINGTON (12/23/14)--Eighteen senators have written to U.S. Department of Housing and Urban Development Secretary Julian Castro asking for lower fees on Federal Housing Administration (FHA) loans.

The legislators cite the agency's most recent Mutual Mortgage Insurance Fund (MMIF) report, which shows the fund has seen a $21 billion improvement over the last two years, and is on target to meet the congressionally mandated 2% excess reserve by fiscal year 2016.

The improved outlook of the fund has led the legislators to believe that this is the right time to examine premium levels, saying appropriately priced fees may produce greater revenue and restore the capital ratio more quickly.

"While preserving the solid footing of the reserve fund is essential, reducing fees does not necessarily conflict with this goal," the letter reads. "As any business knows, just as a price that is set too high will lead to less profit, not more, lowering the premium on qualified borrowers may actually produce greater revenue and fully restore the capital ratio more quickly."

The FHA has increased the annual premium paid by borrowers for FHA guaranty by 145% since 2010, meaning a borrower taking out a $200,000 loan pays $1,600 more per year in fees.

According to the National Association of Realtors, these higher fees may have priced out as many as 375,000 potential homebuyers from buying a mortgage in 2013.

The letter was signed by Sens. Barbara Boxer (D-Calif.), Robert Menendez (D-N.J.), Charles Schumer (D-N.Y.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Barbara Mikulski (D-Md.), Dianne Feinstein (D-Calif.), Patty Murray (D-Wash.), Richard Durbin (D-Ill.), Ben Cardin (D-Md.), Bernie Sanders (I-Vt.), Jeanne Shaheen (D-N.H.), Kirsten Gillibrand (D-N.Y.), Richard Blumenthal (D-Conn.), Chris Murphy (D-Conn.), Mazie Hirono (D-Hawaii), Edward Markey (D-Mass.) and Cory Booker (D-N.J.). ReadMore

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3.3M total foreclosure preventions completed since 2008: FHFA

Washington
WASHINGTON (12/23/14)--Approximately 72,700 foreclosure prevention actions were taken by Fannie Mae and Freddie Mac in the third quarter, according to the Federal Housing Finance Agency's quarterly report.

That number brings the total foreclosure preventions since September 2008 to more than 3.3 million, which helped nearly 2.8 million borrowers stay in their homes, and includes 1.7 million permanent loan modifications.

The quarterly Foreclosure Prevention Report includes data on Fannie and Freddie home retention actions, delinquencies and real estate-owned inventory.

Highlights include:
  • The number of 60-plus day delinquent loans declined 3% to the lowest level since the start of conservatorships;

  • The serious delinquency rate fell to 2%;

  • Approximately 34% of all permanent loan modifications helped to reduce homeowners' monthly payments by more than 30% in the third quarter;

  • About 22% of borrowers who received permanent loan modifications in the third quarter had portions of their mortgage balance forborne;

  • Nearly 12,900 short sales and deeds-in-lieu were completed in the third quarter, bringing the total to approximately 594,200 since the start of the conservatorships;
  • Third-party sales and foreclosure sales fell 9% to nearly 39,100 while foreclosure starts dropped 13% to approximately 74,600 in the third quarter; and

  • The real estate-owned inventory of Fannie Mae and Freddie Mac declined 9% during the quarter to nearly 120,100 as dispositions continued to outpace acquisitions.
ReadMore

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NEW: NCUA sues Wells Fargo as trustee of mortgage-backed securities

Washington
ALEXANDRIA, Va. (12/23/14, UPDATED 12:45 p.m. ET)--The National Credit Union Administration has filed a lawsuit suit in federal court against Wells Fargo Bank National Association, alleging the bank has failed to fulfill its duties as trustee for 27 residential mortgage-backed securities trusts.

The agency is suing in its capacity as liquidating agent for five failed corporate credit unions.

"Like other trustees against whom NCUA is pursuing claims, Wells Fargo neglected its statutory and contractual obligations to certificate holders, including the five corporate credit unions," said NCUA Chair Debbie Matz. "This litigation is intended to hold Wells Fargo accountable for losses caused by that neglect."

The NCUA's complaint states the value of the securities depended on the quality of the pooled mortgage loans the trusts contained, and the bank, as trustee, had contractual and statutory duties to protect the interests of certificate holders.

The complaint states that, despite knowing about defects in the mortgage loans, Wells Fargo failed to provide required notices to certificate holders and other parties. It also failed to take timely action to force the repurchase, substitution or cure of defective mortgage loans or otherwise preserve trust remedies.

"We are gratified the agency continues to take efforts to lessen losses to credit unions. We have been encouraging NCUA to take all reasonable actions necessary to maximize recoveries from the institutions that were responsible for the events that contributed to the corporate failures," said Eric Richard, Credit Union National Association general counsel. "Ultimately, we are hopeful that credit unions will share in the fruits of these efforts when the liquidations of the corporates is complete and all funds owing to the Treasury have been repaid."

Five corporate credit unions--U.S Central, WesCorp, Members United, Southwest and Constitution--purchased approximately $2.4 billion in residential mortgage-backed securities issued from the trusts between 2004 and 2007.

Those securities were faulty and lost substantial value, contributing to the failure of all five corporates.

The NCUA's complaint seeks damages to be determined at trial. ReadMore

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Inside Washington (12/23/14)

Washington
  • WASHINGTON (12/23/14)--Federal regulatory agencies have announced annual adjustments to the thresholds used to define certain institution sizes under Community Reinvestment Act regulations. "Small bank" or "small savings association" means an institution that, as of Dec. 31 of either of the prior two calendar years, had assets of less than $1.221 billion. "Intermediate small bank" or "intermediate small savings association" means a small institution with assets of at least $305 million as of Dec. 31 of both of the prior two calendar years, and less than $1.221 billion as of Dec. 31 of either of the prior two calendar years. The annual adjustments are based on the change in the average of the Consumer Price Index for urban wage earners and clerical workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million ...

ReadMore

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CFPB files consent order for servicemember debt abuse

Washington
WASHINGTON (12/23/14)--Three companies have been accused of using illegal debt collection practices against American servicemembers and are the subject of an enforcement action from the Consumer Financial Protection Bureau (CFPB).

Freedom Stores Inc., Freedom Acceptance Corp. and Military Credit Services LLC and their chief officers are the subject of a consent order that would require them to provide more than $2.5 million in consumer relief and to pay a $100,000 penalty.

"Freedom Stores and its affiliated companies were filing thousands of lawsuits in Virginia against consumers not from there, taking money from some consumers' bank accounts without permission, and using the military chain of command to pressure and humiliate servicemembers," said CFPB Director Richard Cordray in a statement announcing the action.

Freedom Stores, also known as Freedom Furniture and Electronics, is a Virginia-based retailer that sells furniture and electronics. According to the CFPB, Freedom Stores offers credit to consumers purchasing its merchandise and transfers the contract to the affiliated Freedom Acceptance Corp.

The owners of those companies, John Melley and Leonard Melley Jr., also own Military Credit Services, a financing company that primarily caters to servicemembers.

A CFPB investigation found the following illegal practices:
  • Illegally filing more than 3,500 lawsuits in Virginia for out-of-state contracts from July 2011 to December 2013. These were filed against consumers who had not signed their financing contracts in Virginia and did not live there when the suits were filed. Almost all of those lawsuits resulted in garnishment of consumers' wages or liens on their bank accounts;

  • Double-dipping into servicemembers' funds by accepting payment via military allotment, as well as erroneously taking payments from an authorized backup account. This was as a result of the companies relying on reports from a payment processor that were sometimes incorrect;

  • Contacting commanding officers to pressure servicemembers into repayment due to a clause buried in the purchase contract. The companies would contact the officers in writing and by phone to disclose the debts, humiliating the servicemembers and putting their careers and ability to get a security clearance at risk; and

  • Illegally debiting bank or credit card accounts of consumers' family and friends after a one-time payment on a consumer's behalf was authorized. The companies would keep the payment information in their systems, and then debt collectors would later take funds from those accounts without authorization or notification.
The attorneys general of North Carolina and Virginia helped the CFPB bring the action against the companies. ReadMore

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News of the Competition (12/23/14)

Market
  • NEW YORK (12/23/14)--Ocwen Financial came to an agreement with New York regulators this week to pay $150 million to settle allegations that it doctored foreclosure documents in order to deny borrowers adjustments to mortgage loans (National Mortgage News Dec. 22). The majority of cases involved borrowers who had received letters--which were dated 30 days prior to arriving--stating their mortgage loan adjustment applications had been denied. Because borrowers only have 30 days to appeal such a denial, by the time notification arrived, the appeal period had ended. The company will pay $100 million of the settlement to New York State as a civil penalty, and $50 million to current and former New York homeowners whom Ocwen had filed foreclosures against between January 2009 and December 2014. According to National Mortgage News, Ocwen also announced this week that its founder and executive chairman, William Erbey, will step down after 30 years with the company ...
ReadMore

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Nov. existing-home sales falter: NAR

Market
WASHINGTON (12/23/14)--After consecutive months of positive gains, existing-home sales regressed in November, dropping 6.1% to 4.93 million annualized units sold from 5.25 million in October (Economy.com Dec. 22).

November's performance comes in 2.1% higher than last year's number nationally, but only two of the four census regions posted numbers higher than last year's pace. And all four regions recorded monthly declines in sales in November.

While Lawrence Yun, chief economist for the National Association of Realtors, said November's poor sales performance was an aberration--caused by stock market swings that scared away investors--Janet Yellen, chair of the Federal Reserve, said last week that she continues to be surprised the housing market has not recovered more robustly, and suggested that tight credit was partly responsible (MarketWatch Dec. 22).

By region, sales fell 4.2% in the Northeast, 8.9% in the Midwest, 3.2% in the South and nearly 10% in the West.  

Nationwide, condos, co-ops and single-family homes all posted fewer sales in November.

Inventory fell in November as well, dropping to 2.09 million units from 2.24 million in October, or a 6.7% decline. The supply of homes, meanwhile, held steady at 5.1 months between October and November.

Further, the median sales prices of single-family homes dropped slightly in November to $206,200, which is still higher than the price seen in November of last year.

Annually, single-family home prices have climbed 3.9%. ReadMore

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Business Rates

Market
Daily Financial Rates -- 2014-12-23

Financial Rates


Tuesday, December 23, 2014

03:55 AM CST

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

TermTue
12/23
Mon
12/22
Fri
12/19
Thu
12/18
Wed
12/17
1 month0.010.010.040.030.03
3 month0.050.040.040.030.03
6 month0.160.110.120.110.11
1 year0.280.260.250.230.21
2 year0.710.670.670.620.58
3 year1.131.101.101.060.99
5 year1.671.661.681.611.53
7 year1.981.982.011.931.85
10 year2.172.172.222.142.07
20 year2.472.482.542.462.40
30 year2.752.772.822.742.69

TREASURY BILLS

Results of the December 22, 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, 12/22
Week Ago
Mon, 12/15
13 weeks0.0550.035
26 weeks0.1550.110

PRIME RATE

3.25% Last changed December 16, 2008

FEDERAL FUNDS

TermTue
12/23
Mon
12/22
Fri
12/19
Thu
12/18
Wed
12/17
high0.3120.3120.3120.3700.312
low0.0500.0700.0700.0700.070
near closing bid0.1000.1200.1200.1000.100
offered0.2700.2700.2700.1300.120
effective rate20.1500.1500.1500.1400.130

FREDDIE MAC (Mortgage commitments, 30 days)

TermTue
12/23
Mon
12/22
Fri
12/19
Thu
12/18
Wed
12/17
30 year0.000.000.000.000.00

FANNIE MAE (Mortgage commitments, 30 days)

TermTue
12/23
Mon
12/22
Fri
12/19
Thu
12/18
Wed
12/17
30 year3.4073.4303.4373.3943.348

LIBOR

TermTue
12/23
Mon
12/22
Fri
12/19
Thu
12/18
Wed
12/17
1 month0.232000.242000.239000.240000.24100
3 month0.391000.389000.388000.387000.38600
6 month0.544000.544000.542000.543000.53900
1 year0.847000.846000.846000.845000.84300

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
12/23
Week ended
12/16
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 0.48% 0.28% 0.20%
Personal Savings $1,000 0.20% 0.10% 0.10%
Personal Interest Checking $2,500 0.36% 0.15% 0.21%
NSF Fee $27.96 $30.68 $-2.72
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 9.99% 10.31% -0.32%
New Auto Loan - 5 Years 2.62% 3.90% -1.28%
Used Auto Loan - 2 year Old - 4 Years 2.78% 4.10% -1.32%
HELOC - 80% LTV - $50,000 4.11% 4.37% -0.26%
HE Loan - 80% LTV - $50,000 - 15 Years 5.66% 5.90% -0.24%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 3.90% 3.89% 0.01%
30 Year Fixed Jumbo 4.03% 4.01% 0.02%
5/1 Year ARM Conforming 2.99% 2.93% 0.06%

Credit Card Products Credit Unions Bank Average Difference
Platinum 8.85% 10.46% -1.61%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.65 $31.83 $-6.18
Reward 10.08% 13.11% -3.03%
Annual Fee $26.81 $96.89 $-70.08
Maximum Late Fee $22.34 $32.97 $-10.63

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.61% -0.02%
Indirect B Tier New Auto Loan - 5 Years 5.33% 5.19% 0.14%
Indirect C Tier New Auto Loan - 5 Years 7.47% 6.64% 0.84%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Monday, December 22, 2014. For detailed disclosures click here.

ReadMore

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CUs honor fallen soldiers with wreaths

CU System
WOODBRIDGE, Va., and NAPERVILLE, Ill. (12/23/14)--To honor servicemembers and their sacrifices for this country, a number of credit unions in Illinois and one in Virginia donated their time and money to lay wreaths at the gravesites of military veterans this holiday season.

Wreaths placed at the gravesites of servicemembers at the Abraham Lincoln National Cemetery in Elwood, Ill. (Illinois Credit Union League Photo)
Employees and family members of Belvoir FCU, Woodbridge, Va., with $313 million in assets, participated in a day coordinated by the nonprofit organization Wreaths Across America where citizens placed wreaths at various national cemeteries.

The Belvoir group set wreaths at the graves of soldiers buried in Quantico National Cemetery.

"The ceremony was touching and the displayed respect from the crowd was moving," said Tisha Wallace, chief operations officer for Belvoir FCU. "There were many silent tears for those fallen and prayers going out for those currently serving our country."

In all, the group laid more than 50 wreaths, as part of an event that included hundreds of participants who collectively laid 1,500 wreaths at the cemetery on the day. 

This was the third year the credit union participated in the event. Wreaths Across America's mission is to one day place a wreath at every grave in Arlington National Cemetery and all other national cemeteries.

The Illinois Credit Union League (ICUL) also initiated a new effort this year to raise money for Wreaths Across America.

The effort proved fruitful, as nearly $3,000 was raised by Illinois credit unions to lay wreaths at veterans' graves in Illinois and Washington, D.C.

Credit unions, staff members and employees raised more than $1,900 to purchase 193 wreaths that were placed at Abraham Lincoln National Cemetery in Elwood, Ill., and a number of individuals representing the credit union movement in Illinois volunteered at the wreath-laying event last week.

LSC, ICUL's service organization, provided an additional $1,000 for wreaths to be placed at Arlington National Cemetery.

The coordinated effort to encourage credit unions and their members to participate in the wreath fundraising event was the first activity led by ICUL's recently formed Community Outreach Committee.

The committee was created due the strong desire by league staff members to make a difference in their communities, ICUL said.  ReadMore

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Keep holidays merry, avoid being hacked with tips from CUNA

CU System
WASHINGTON (12/23/14)--To help consumers avoid fraud this holiday season, and every season, the Credit Union National Association released a list of helpful tips to keep their personal information out of the hands of criminals.
 
"With the immense number of data breaches that occurred at retailers in 2014, and a grim forecast for 2015, it's essential to arm consumers with tips they need to protect themselves," said CUNA President/CEO Jim Nussle. "Knowing how to protect yourself from hackers, and what to do if you get hacked, can help you keep your hard-earned money and give you peace of mind."
 
CUNA's www.StoptheDataBreaches.com contains a list of helpful ways for consumers to remain vigilant and protect their personal data when shopping in retail stores and online, including:
  • Don't respond to email, texts or telephone calls asking for personal or financial information;
  • Frequently review account activity and immediately report unauthorized transactions;
  • Place an initial fraud alert with credit bureaus if fraud has occurred;
  • Enroll and opt-in for transaction monitoring;
  • Use card on/off switches (if available); and
  • Enroll in Verified by VISA/MasterCard Secure Code.
In 2014 there have been more than 744 data security breaches, a 24.8% increase over 2013 which saw 596 breaches. In fact, a recent poll conducted by The Wall Street Journal and NBC News found that nearly half of all Americans have been notified by a credit card company, financial institution or retailer that their credit card information had possibly been stolen as part of a data breach.

Staples announced just last week that it has suffered a breach that affected 1.16 million customers. In the case of a data breach at a retailer such as Staples, credit unions are limited by law in disclosing many of the circumstances of the breach and often are not able to disclose the merchant responsible--yet the credit union is left to clean up the mess when a retail data breach occurs by informing its members of the breach, protecting their members from fraudulent charges and reissuing new credit and debit cards.
 
"Arming consumers with tips to protect themselves is helpful, but what's necessary to change the state of consumer protection is a change in policy," said Nussle. "Merchants are not subject to the same federal data protection standards as financial institutions, making them more susceptible to attacks.

"The best course of action to reduce data breaches would be for Congress to establish federal data-protection standards for retailers that are equal to financial institutions under the Gramm-Leach-Bliley Act," he said. ReadMore

CUNA offices closed through Friday, News Now returns Monday

CU System
WASHINGTON, D.C., and MADISON, Wis. (12/23/14)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Wednesday through Friday, reopening on Monday, Dec. 29.
 
News Now will not be published while the offices are closed, but it will be published Monday. ReadMore

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Deadline extended to Jan. 9 for Crash the GAC applications

CU System
MADISON, Wis. (12/23/14)--The deadline has been extended an extra week to Jan. 9 for those interested in applying for Crash the GAC.
                                                                                                           
The program offers young credit union professionals from all 50 states and the District of Columbia an opportunity to experience the Credit Union National Association's Governmental Affairs Conference in a way like no other.
 
CUNA and The Cooperative Trust have received applications from 39 states and the District of Columbia, with a goal of having a crasher from every state. Each crasher receives a scholarship for full conference registration, courtesy of CUNA, for the March 8-12 event in Washington, D.C. All other costs are the responsibility of the attendee and their credit union.
 
Some state credit union leagues are providing additional travel support for crashers. Interested applicants can check the website for more information.
 
The 11 states currently without applicants are: Alabama, Georgia, Hawaii, Kentucky, Maryland, Nebraska, New Hampshire, North Dakota, South Dakota, Utah and Wyoming. ReadMore

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Branches remain vital: Mercator Research

CU System
BOSTON (12/23/14)--Despite advancements in mobile banking technology and other innovations in the financial services industry, physical branches remain important, according to a new report from Mercator Advisory Group.

The report, called "The Evolving Branch Banking Strategy," covers the importance of face-to-face communication when discussing financial services and products that, at times, for members and consumers can be complicated.

Conversations centering on subjects such as loans, time deposits and investments, the report argues, are often better to have in person.

"Even while many banks, credit unions and other financial institutions are right-sizing or otherwise reconfiguring their branches, most realize that in-person service is still important to their customers and members," said Ed O'Brien, author of the report and director of Mercator Advisory Group's banking channels advisory service.

Highlights of the report include:
  • The effort by credit unions and banks to create branches that meet and exceed member/customer needs by balancing the desire for in-person expertise with around-the-clock access to digital solutions;
     
  • A new branch strategy brought about because of the recent shift by financial institutions to reduce the number of branches they operate;
     
  • New variations in branch layouts, including open designs with dedicated areas for traditional transactions; self- and assisted-service interaction; private areas for advice-based services; and teller automation; and
     
  • Changes in the fundamental roles of tellers and other staff members through expanded sales and service training aimed at promoting cross- and up-sell efforts and improving overall member/customer satisfaction.
ReadMore

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Holiday spirit strong with CUs' commitment to communities

CU System
MADISON, Wis. (12/23/14)--Credit unions are known for the "people-helping-people" philosophy that they live all year long. The holiday season is particularly imbued with a sense of giving as credit unions collect toys, distribute food and otherwise care for those in need.

nn122214_1.jpg
Click for slideshow IBM Southeast Employees' FCU, Delray Beach, Fla., with $862 million in assets, hosted the 45th annual Christmas party for the Georgia Head Start Association. (IBM Southeast Employees' FCU Photo)
The efforts listed below are just a small representation of the many ways credit unions celebrate the season with giving.
  • For the third year in a row, $12 million-asset North East (Pa.) Welch FCU hosted a Project Love Angel Tree in its main office. More than 400 tags that had a child's name, clothing size and gift ideas were distributed as part of the project that brought donations from credit union employees and members alike (Life is a Highway Dec. 16);
     
  • Throughout the year, employees of Gulf Coast Educators FCU, Pasadena, Texas, with $517 million in assets, hold jeans days where those who donate $5 can dress in denim at work (Leaguer Dec. 8). The fund raised more than $7,500 overall, and staff allocated $3,500 to purchase toys this holiday season;
     
  • During December, Ocean Communities FCU, Biddeford, Maine, will collect new or gently used laptops and iPads for Grahamtastic Connection, a nonprofit that provides free technology to children with cancer and other serious illnesses (Fosters.com Dec. 11). High school students from Sanford and Westbrook will refurbish the donated computers. The $154 million-asset credit union also donated $1,000, which will allow Grahamtastic Connection to purchase a new iPad and one year of Internet access for a local child;
     
  • FAA CU, Oklahoma City, with $563 million in assets, fulfilled the Christmas lists of 10 teens in the Youth Services for Oklahoma County's Supporting Kids in Independent Living (SKIL) program (Leaguer Dec. 9). President/CEO Steve Rasmussen said he is impressed with the staff's generosity each year. "They see the need, and they continue to open their hearts to these young adults facing issues no teen should have to face," he said. The SKIL program supports teens who are homeless through no fault of their own and who are dedicated to completing high school and furthering their education;
     
  • Peach State FCU, Lawrenceville, Ga., with $265 million in assets, collected Toys for Tots at each of its 12 branches. "Through our seven-county footprint, we were able to collect a truckload full of toys that will help make the holiday season a little brighter for less fortunate children in the community," said President/CEO Marshall Boutwell;
     
  • In Albany, N.Y., Colonie Senior Service Centers and Capital Communications FCU, with $1 billion in assets, will come together to help more than 200 seniors during the holiday. The program supports elderly individuals to maintain their independence and live safely on their own;
     
  • Icon CU, Boise, Idaho, with $169 million in assets, and Arsenal CU, Arnold, Mo., with $201 million in assets, focused on keeping people warm. Arsenal CU purchased and donated new hats, gloves and mittens. Icon CU is collecting socks for its fifth annual Warm Hearts, Toasty Toes drive, which has collected more than 7,000 pairs for local charities (Gem Dec. 1);
     
  • Four-legged friends aren't forgotten during the holiday season thanks to $6.5 billion-asset San Diego County CU. Its goal is to raise $10,000 by Dec. 31 for the San Diego Humane Society and Society for the Prevention of Cruelty to Animals (San Diego Union-Tribune Dec. 22); and
     
  • Who needs reindeer and a sleigh when you have a cargo bike? USAgencies CU, Portland, Ore., with $74 million in assets, collected more than 360 toys--five times its past amount--for the annual KGW Great Toy Drive. Once collected, the toys were loaded into Portland Pedal Power cargo bikes to be delivered in an eco-friendly, community-centric style (Anthem Dec. 19).
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Mo. CDFI training offers inspiration

CU System
JEFFERSON CITY, Mo. (12/23/14)--During a roundtable and training for all community development financial institution-certified (CDFI) credit unions in the state of Missouri, participants shared ideas that left them inspired and looking toward a bright future.

On Dec. 4-5, the Missouri Credit Union Charitable Foundation and Missouri Credit Union Association hosted a roundtable for all community development financial institution-certified credit unions in the state of Missouri. (Missouri Credit Union Association Photo)
The Dec. 4-5 session was hosted by the Missouri Credit Union Charitable Foundation (MCUCF) and Missouri Credit Union Association (MCUA) and facilitated by the National Federation of Community Development Credit Unions. The event was held at MCUA's offices in Jefferson City, Mo.

Representatives from 11 CDFI-certified credit unions attended the roundtable. Participants received in-depth training in topics such as low-income designation, leveraging CDFI certification, developing CDFI strategies, writing competitive grants and building community partnerships (Missouri Difference Dec. 15).

Missouri has 27 credit unions that have attained CDFI certification, which makes Missouri the state with the most CDFI-certified credit unions. In the past two years alone, these CDFIs have received more than $7 million in U.S. Treasury grants. These certifications and grants help build the capacity of credit unions to serve moderate- to low-income people and distressed communities lacking the access to credit and financial services.

The Missouri CDFI program is an initiative of MCUCF, which provides training resources and opportunities to all Missouri credit unions. ReadMore

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Okla. CU board approves 50% cut in 2015 assessments

CU System
FARMERS BRANCH, Texas (12/23/14)--The Oklahoma State Credit Union Board approved a 50% discount in assessments collected from Oklahoma state-chartered credit unions with assets of $100 million or less, and a 30% discount for those with more than $100 million in assets.
 
State Bank Commissioner Mick Thompson presented a proposed budget to the board that reflected how the department can continue its efficient operations even with the reduction in assessments, the Cornerstone Credit Union League reported (Leaguer Dec. 22). This is the third year in a row that the board approved reduced assessment rates for state-chartered credit unions. In 2012 and 2013, assessments were discounted by 15% and 10, respectively.
 
"These discounts are intended to reflect increased efficiencies that the department has achieved as well as a reduction in the regulatory burden on state-chartered credit unions," Thompson said. "The savings experienced by credit unions can be redirected toward service to their members."
 
Oklahoma Credit Union Association President Nate Webb said of the decision: "This is clearly good news for Oklahoma's state-chartered credit unions. I compliment Commissioner Thompson for working with credit unions in an effort to identify and reduce redundancies in the examination process. These efforts save our credit unions both time and money." ReadMore

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End of year smart time to review retirement goals

Consumer
McLEAN, Va. (12/23/14)--The end of the year is a timely opportunity for everyone to review financial goals or set new ones (USA Today Dec. 17).
 
But especially if you're planning to retire in the next few years, it's important to spend some time reviewing finances. Here's advice that can help you prepare for success:
  • Develop a spending plan. It's essential to know what your expenses are going to be and to develop a spending plan. There are software programs and apps that can make this easier; your credit union might have its own savings app. You might think you'll have fewer expenses than during your working years, but savings can be more than offset by expenses for medical care and insurance.
  • Scrutinize health care costs. Don't just look at what Medicare will cover. Health care costs can affect retirement savings tremendously, and many retirees don't plan accordingly or else underestimate expenses.
     
  • Evaluate your financial relationships. Look at the relationships you have with a financial adviser, accountant, attorney, insurance agent--and financial institution. If you're not happy with a relationship, start researching different options. If you're not already a member of a credit union, join one. On top of better customer service, credit unions often have lower interest rates and fees.
     
  • Look at your 401(k). Review options for what you can do with this investment after you retire. Talk to a specialist in your human resources department as well as a financial planner for help making the best decision.
     
  • Review beneficiary designations. The end of year is a great time to review beneficiary designations. Marriage, divorce, births and deaths are all events that can change your family dynamic.
     
  • Start thinking about withdrawing from your nest egg. People spend a lot of time thinking about retirement savings but think less about retirement withdrawals. Have a plan in place for how much you think you'll need to withdraw each year and be realistic about it. Talk to a retirement specialist at your credit union to work out a plan that suits you and your lifestyle.
For related information, read "Protect Your Nest Egg From Nursing Home Expenses" in the Home & Family Finance Resource Center. ReadMore

PCI council releases PIN security requirements

Products
WAKEFIELD, Mass. (12/23/14)--The Payment Card Industry (PCI) Security Standards Council has released v2.0 of PIN Security Requirements.
 
The program contains a complete set of requirements for the secure management, processing and transmission of personal identification number (PIN) data at ATMs and attended and unattended point-of-sale (POS) terminals.
 
PCI PIN Security Requirements v2.0 aims to enhance usability and understanding by stating the requirements in a more granular manner, the council said.
 
The update includes incorporation of testing procedures into the requirements, which resulted in two versions of the document--PCI PIN Security Requirements v2.0 and PCI PIN Security Requirements and Test Procedures v2.0. The council said that including testing procedures in a separate version will facilitate a smoother evaluation and deeper understanding of the requirements.
 
The council also has published a summary of significant changes document that provides a high-level look at the modifications to the requirements.
 
Examples of common vulnerabilities for PIN theft addressed by the requirements include:
  • PINs that are not protected by use of a secure PIN block;
  • Failure to use approved cryptographic devices for PIN processing;
  • Cryptographic keys that are not random and not unique to each point of interaction device, and keys that never change;
  • Few, if any, documented PIN-protection procedures; and
  • Audit trails or logs that are not maintained.
"Criminals are actively targeting the point of sale and it's up to us as a community to stop them in their tracks," said Stephen W. Orfei, general manager of PCI Security Standards Council. "The requirements enhance the protection of devices that accept PINs with the end goal of securing cardholder data at the POS."

PIN Security Requirements is included in the current PIN Security Transaction security requirements. Program requirements and a list of approved devices are available for download. ReadMore

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