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News Now

October 31, 2014

CUNA raises key concerns in meeting with White House economic policy staff

WASHINGTON (10/31/14)--Data security breach concerns, regulatory relief, risk-based capital for credit unions, housing finance reform and other issues were among the topics Credit Union National Association President/CEO Jim Nussle raised Thursday at the White House compound in a meeting with Seth Wheeler, assistant to the president for economic policy.  
Nussle emphasized that merchants have to take greater responsibility to protect consumers' personal financial data, an issue that credit unions raise time and time again. CUNA is pursuing efforts with the administration, the U.S. Congress and other policymakers to help ensure consumers' data provided to merchants is better protected and that credit unions are reimbursed for their costs when merchant breaches occur. (See related story: Home Depot breach costs CUs almost double Target breach.)
The CUNA leader discussed a number of issues regarding the National Credit Union Administration's risk-based capital proposal. He also highlighted legislation CUNA is seeking passage on before the end of the congressional session--bills that would eliminate annual privacy notices, provide share insurance parity for credit union IOLTA accounts and allow privately insured credit unions to become members of the Federal Home Loan Banks.
Nussle thanked the administration for reaching out to CUNA and credit unions regarding housing finance reform. CUNA will be advocating for credit union interests should further efforts to pursue meaningful housing finance reform continue in coming months on Capitol Hill and within the administration. 
The discussion also included credit union concerns about qualified mortgage loans and the recent Federal Housing Finance Agency proposal regarding Federal Home Loan Bank membership.     
Also attending the meeting for CUNA were Chief Policy Officer/Chief Economist Bill Hampel, General Counsel Eric Richard, Deputy General Counsel Mary Dunn and Senior Vice President for Legislative Affairs Ryan Donovan. CUNA staff indicated the discussion was useful and the meeting was productive in terms of ensuring the administration is apprised of credit unions' issues and concerns. CUNA will continue to follow up on all the matters raised in the meeting. ReadMore

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Supreme Court to hear mortgage rescission case next week

WASHINGTON (10/31/14)--Next week, the U.S. Supreme Court is set to hear arguments about how and when borrowers can request to rescind their mortgages.
Jesinoski v. Countrywide addresses how consumers can request a rescission--whether a borrower can simply send a notice or if they have to file a lawsuit, according to an Oct. 30 report in American Banker .

The Truth in Lending Act allows consumers to rescind the transaction three business days after the closing of a refinancing or home equity line of credit. The right of rescission is extended for up to three years if the mortgage disclosures are found to be inaccurate, the finance charge was understated or the lender failed to provide the borrower with the proper disclosures.
"Most lenders only have at the top of their minds the three-business-day timeline from when the initial disclosures are provided to the borrower when it comes to rescission," said Jared Ihrig, associate general counsel for the Credit Union National Association. "But in instances where there are inaccurate disclosures, opening the rescission period to a period of three years can take lenders by surprise and be costly, if exercised by a borrower or their counsel relating to a foreclosure."
Several U.S. appeals courts have ruled the borrower must file a lawsuit to exercise the extended right of rescission, American Banker noted, but other circuit courts have stuck to the literal language of only needing to file a written notice with the lender, resulting in a split among the courts.
"This is a very important case," Robert Lotstein, managing attorney, LotsteinLegal, told American Banker . "The plaintiffs' bar uses the right of rescission as a weapon to slow down or stop foreclosures. It can be an incredibly lengthy process. People have been able to stay in their homes for long periods of time while not paying their mortgage." ReadMore

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Nussle: We'll back off when retailers accept their breach responsibility

WASHINGTON (10/31/14)--Credit Union National Association President/CEO Jim Nussle strongly took issue Thursday with merchants' attempt to shirk the responsibility that is theirs in the serious and growing problem of exposure of customer data through information breaches at retailers.
Nussle was responding to a letter from the CEOs and presidents of the Retail Industry Leaders Association, the National Association of Convenience Stores, the National Retail Federation, the National Grocers Association, the Food Marketing Institute and the Merchant Advisory Group. That letter maintains, in part, that costs in breaches are borne roughly equally by financial institutions and retailers.

"As we have documented in two surveys this year, data breaches at retailers have cost credit unions and their members a minimum of $90 million--and those are the costs only for breaches at Target, for $30 million, and Home Depot, at nearly $60 million," Nussle declared Thursday.
"With the many other breaches that have also occurred--at Staples, Neiman-Marcus and others--certainly credit unions have incurred millions more in costs this year.
"In our most recent survey, released just yesterday, credit unions told us that--to date--they have received no reimbursements for the Target breach, now more than 10 months after the breach occurred.
"In short, we'll back off highlighting the costs of data breaches on credit unions when merchants step up and take responsibility, adopt the same data standards, and stop making consumers vulnerable."
(See related story: Home Depot breach costs CUs almost double Target breach.) ReadMore

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Inside Washington (10/31/14)

Click to view larger imageThe American Association of Credit Union Leagues' (AACUL) Regulatory Advocacy and Compliance Committee gathered in Washington this week to discuss with federal regulatory agencies key issues affecting credit unions. At left, Committee Chairman Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (far left), discusses issues related to the CFPB with bureau officials (left to right) CFPB Deputy Director Steve Antonakes; Dan Smith, director, Office of Financial Institutions and Business Liaison; and Jeff Swartz, business and trade liaison, Office of Financial Institutions and Business Liaison. At right, members of the committee meet with National Credit Union Administration Chair Debbie Matz. They are Pat Sowick, AACUL senior vice president of league relations (left); John Trull, director of regulatory advocacy, Northwest Credit Union Association; Greg Michlig president/CEO, New Jersey Credit Union League; Paul Gentile; head of the Massachusetts, New Hampshire and Rhode Island credit union leagues; Ken Ross, executive vice president and chief operating officer,  Michigan Credit Union League and Affiliates; National Credit Union Administration Chair Debbie Matz; Patrick Smith, vice president of communications and regulatory affairs, Illinois Credit Union League; Scott Simpson, president/CEO, Utah Credit Union Association; Mary Dunn, CUNA deputy general counsel; and La Pine. Click to see larger views.  (CUNA Photos)

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CUNA delivers: Sign up now for CU-relevant election updates

WASHINGTON (10/31/14)--Starting Nov. 5, the Credit Union National Association will deliver--straight to subscribers' inboxes--updates on the results of the mid-term elections, tailoring the periodic reports to the news credit unions will be most interested in.
Readers can sign up here , right now, by selecting the opt-in button for "election news."  The initial email will deliver comprehensive, credit-union relevant results of the Nov. 4 election, and subscribers will receive periodic updates on additional relevant results as they become known.
"CUNA, the state credit union associations, the Credit Union Legislative Action Council (CULAC) and credit unions together have done more in the 2014 cycle than in any previous election, backing a bipartisan group of candidates that are attuned to credit union issues," said Trey Hawkins, CUNA's vice president of political affairs.

"This election cycle is a true testament to the fact that credit unions stand firmly behind those public servants who support credit unions and their issues," Hawkins said.
Also watch News Now for election coverage and follow @NewsNowLiveWire and @cuna for live, election night tweets. ReadMore

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Widget FCU: Real-life crime busters, CEO tells story (Part 2)

LAS VEGAS (10/31/14)--It was 16 months between when Widget FCU submitted a complete record of eight suspicious accounts opened to the FBI and when CEO Gail Cook received a call from the FBI Special Agent Michael Thoreson saying Widget helped them crack one of the largest fraud conspiracies in history.

According to the FBI and the IRS, Widget's diligence helped them paint a picture of a wide-ranging conspiracy that resulted in tens of millions of fake IRS refunds and thousands of stolen identities.

"The IRS said to us, 'What you did is give us an Excel spreadsheet and you showed us the names and phone numbers and addresses, and I was able to go back and search the SAR [Suspicious Activity Report] database and requested a search on those names, addresses and phone numbers. And the request gave us so much information we didn't know where to begin,'" Cook said. "He told us how important the SARs are--that's what helped them put together the pieces together with all the financial institutions that were affected."

Seven credit unions, in addition to Widget FCU of Erie, Pa., with $264 million in assets, as well as P&C Bank are listed in the indictment as financial institutions affected by the fraud. According to the FBI, roughly 3,000 fraudulent accounts at 600 to 700 financial institutions, including at least one in every state, have been affected.

"The FBI told us the vast majority of those credit unions and banks have not been informed that they had fraudulent activity going on at their institutions," Cook said. "The media contacted some of the financial institutions in the indictment after a press release went out, and most of them said they had filed SARs and contacted the FBI, which is true, and some of that information was very helpful. But Agent Thoreson said, 'No one gave us the information and provided the research you did to show us how to crack the case.'"

Doherty Kushimo, Saburi Adeyemi, Abiodun Bakre, Adetunji Gbadegeshi and Adebola Mejule were indicted in April on charges of conspiracy to commit wire fraud and aggravated identify theft. According to the indictment, the five defendants submitted fraudulent federal tax returns in the names of individuals whose identities the conspirators stole, then opened accounts using other stolen identities, using those to hold the refunds.

The indictment alleged that approximately $21 million in fraudulent tax refunds was sought from the IRS, $10 million of which was paid.

Cook said closer inspection of new accounts, including the use of ChexSystems Qualifile product, which verifies identities, might have caught the red flags sooner. 

"What we learned was, we really needed to look at ID verification and ChexSystems Qualifile reports. If we had read them a little closer, and if it doesn't look right, we need to start asking questions," Cook said. "Our reports showed that information was used to request a number of accounts at financial institutions around the country, and that should have been a red flag right there."

Since the case, Widget FCU has taken additional verification measures, including:
  • Using one department to open all online account applications received;
  • Performing call-back verifications on new accounts to verify phone numbers and speak to an actual person; and
  • Verifying anything that looks suspicious with ID verification and ChexSystems Qualifile.
"One other thing we're working on is we have adapted a more sophisticated detection system for our online activity for IP addresses," Cook said. "If we're starting to see different IP addresses on an account, we'll call the member."

Cook presented Widget's story at the Credit Union National Association Bank Secrecy Act Conference in Las Vegas this week, which was held in partnership with the National Association of State Credit Union Supervisors (NASCUS).

"One of the frustrations of BSA compliance is you do a lot of work and some of it seems to go down the rabbit hole--you file your SARs and nothing ever comes of it--so we try to have one session every year that focuses on the results," said Brian Knight, NASCUS general counsel. "This is a success story for this credit union. They tugged on a little thread and tumbled a nationwide tax fraud." ReadMore

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Home Depot breach cost CUs nearly double those from Target

WASHINGTON (10/31/14)--The data security breach at Home Depot stores in September cost credit unions nearly $60 million to reissue cards, deal with fraud and cover other costs, according to the results of a new survey of credit unions, released Thursday by the Credit Union National Association.

The Home Depot breach was reported on Sept. 18.

The CUNA survey, which asked credit unions to report the effects of the Home Depot breach, found that 7.2 million credit union debit and credit cards were affected. The survey shows that the cost per card reissued by credit unions was $8.02, which included costs for reissuing, as well as fraud and other costs such as additional staffing, member notification, account monitoring and others.

Conducted from Oct. 1 to Oct. 24, the CUNA survey is the second this year by the nation's largest trade group for credit unions to gauge the impact of data breaches on credit unions.

In January, CUNA conducted a similar survey in the wake of the massive information leak at Target stores in December. That survey found that the Target breach cost credit unions nearly $30 million. The Home Depot breach costs--at $57.4 million nearly twice as much as the Target breach--affected more credit union debit and credit cards and the cost per affected card was considerably higher than even in the Target breach.

Further, the most recent CUNA survey found that, to date, credit unions have not been reimbursed for the costs they incurred as a result of the Target breach. 

"The cost to credit unions of data breaches--which seem to be occurring with increasing regularity--is rising, as the CUNA surveys clearly demonstrate," said CUNA President/CEO Jim Nussle. "The bottom line is that credit union members end up paying the costs--despite the fact that the credit unions they own had nothing to do with causing the breach in the first place."

Nussle added that all participants in the payment process have a shared responsibility to protect consumer data. "However, the law and the incentive structure today allow merchants to abdicate that responsibility, making consumers vulnerable," Nussle said.

"Congress has a role to play in addressing the issue of merchant data breaches by making sure all of the participants are playing by the same set of data security rules, and that merchants who hold consumer data and allow that data to be breached, are responsible for the costs incurred by others.

"Congress must act to protect consumers by taking steps to enhance data security standards for merchants," the credit union leader said.

CUNA Chief Economist Bill Hampel, who conducted the survey, said the results show that more than four in every five (80.1%) of credit unions affected by the breach have reissued or will reissue all affected cards. Nearly one in five (18.5%) will reissue or have selectively reissued cards in response to member requests or other factors. The remainder (1.4%) do not plan to reissue any cards.

"Card reissuance is an expensive proposition, representing about a quarter of the total costs to credit unions of these breaches," Hampel, who is also CUNA chief policy officer, said. "But our latest survey found that fraud is the most expensive component of costs, amounting to $4.89 for each card, or 60% of the total costs."

Credit unions responding to the survey (835 total) have issued a total of 20.1 million cards outstanding, comprised of 14.9 million debit cards and 5.2 million credit cards. The total represents 28.2% of the 53 million debit cards issued by credit unions, 32.5% of the 16 million credit cards outstanding, and 29.2% of the total of 69 million cards outstanding.

Click here to see a "Preliminary Results" sheet for additional information. ReadMore

NCUA to consider separate interest-rate risk proposal in response to RBC comments

ALEXANDRIA, Va. (10/31/14)--Responding to comments from credit unions, credit union leagues and the Credit Union National Association that interest-rate risk (IRR) should not be addressed in risk weightings in the risk-based capital (RBC) proposal, several officials at the National Credit Union Administration are seriously considering a separate IRR proposal. This approach would remove IRR from certain risk weights in the upcoming RBC proposal the agency is developing.

The IRR rule would supplement current supervisory IRR efforts and is intended to target credit unions with the heaviest exposure to IRR that might, under economic duress, become undercapitalized.

The agency received a record 2,056 comment letters on the RBC proposal, and many, including CUNA, disagreed with its approach to IRR. The proposal would have accounted for IRR through investment risk weights.

"By focusing exclusively on concentrations of longer-term assets, the proposal fails to account for how the maturity structure of liabilities can mitigate interest-rate risk. Further, it does not follow the general approach of Basel with respect to interest-rate risk," CUNA's May 28 comment letter pointed out.

The agency has preliminarily consulted with asset and liability management practitioners, registered investment advisers credit union derivatives practitioners and others prior to beginning the design of such a rule.

According to the NCUA, its staff is now in the process of producing a proposed RBC rule for eventual board review and potential action, which may be issued in in the coming months.

The American Association of Credit Union Leagues' (AACUL) Regulatory Advocacy and Compliance Advisory Committee met with NCUA officials Thursday to discuss credit union issues, including the RBC proposal. They also discussed examination concerns, NCUA's budget, NCUA's mission and concerns regarding the Consumer Financial Protection Bureau.

Those in attendance included: Pat Sowick, AACUL senior vice president of league relations; John Trull, director of regulatory advocacy, Northwest Credit Union Association; Greg Michlig, president/CEO, New Jersey Credit Union League; Paul Gentile, head of the Massachusetts, New Hampshire and Rhode Island credit union leagues; Ken Ross, executive vice president and chief operating officer, Michigan Credit Union League and Affiliates; NCUA Chair Debbie Matz; Patrick Smith, vice president of communications and regulatory affairs, Illinois Credit Union League; Scott Simpson, president/CEO, Utah Credit Union Association; Mary Dunn, CUNA deputy general counsel; and Patrick La Pine, president/CEO, League of Southeastern Credit Unions. ReadMore

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GDP estimate shows broad-based strength with 3.5% gain

WASHINGTON (10/31/14)--Seasonally adjusted annualized real gross domestic product (GDP) growth fell in the third quarter by 1.1% to 3.5%, according to an early estimate by the U.S. Department of Commerce.
The Bureau of Economic Analysis report released Thursday showed that the decline was largely attributed to decreased spending on inventories, which held back overall economic growth by 0.57%.

Decelerations of growth in fixed investment also contributed to the slowdown. Residential investment in the third quarter fell to 1.8% from 8.8% while nonresidential investment dropped to 5.5% from 9.7%.
The data does indicate, however, that the economic recovery is gaining momentum. Moody's analysts said that economic growth is "above trend" at almost 3%. In four of the last five quarters, real GDP has grown more than 3%, with recent broad-based monthly job gains averaging almost 225,000 ( Oct. 30). The ratings and research firm also noted that job openings have significantly increased since the start of year.
Contributing to growth in the third quarter were net-exports and government spending. The former, at 1.3%, was driven by a decrease in spending on imports, which fell by 1.7% after an 11.3% increase in the second quarter. The latter grew by 10%, up from 0.9% in the second quarter--pushed higher by a 16% increase in defense spending.
Moody's analysts said that government spending made its largest contribution to growth since 2009, potentially leading to higher numbers than expected. The Wall Street Journal had predicted that real GDP would increase in the third quarter by 3.1% (Oct. 30).
Almost mirroring the drop in real GDP growth was a fall in real disposable income. It fell from 2.7% to 4.4% despite a decrease in inflation growth to 1.2% from 2.3%.
The savings rate rose slightly by 0.1% to 5.4% while growth in real personal consumption expenditures fell to 1.8% from 2.5%.
The preliminary reading could be revised down when the BEA's second report on the third-quarter, based on more complete data, comes out Nov. 25. The Wall Street Journal pointed out that many Americans are barely seeing wage increases keep pace with inflation since the recession wiped out much of their wealth. The paper also noted that the Federal Reserve announced Wednesday that its quantitative easing program has been terminated. Economists, the Journal stated, could similarly dampen their outlook with economic woes in Europe and East Asia. ReadMore

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Consumer Rates


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 0.37% 0.15% 0.22%
NSF Fee $27.91 $30.91 $-3.00
Personal MMDA $2,500 0.17% 0.10% 0.07%
Business MMDA $2,500 0.17% 0.09% 0.08%

Consumer Loan Products Credit Unions Bank Average Difference
Unsecured Personal Loan - $5,000 - 4 Years 10.18% 10.30% -0.12%
New Auto Loan - 5 Years 2.61% 3.83% -1.22%
Used Auto Loan - 2 year Old - 4 Years 2.77% 4.02% -1.25%
HELOC - 80% LTV - $50,000 4.13% 4.42% -0.29%
HE Loan - 80% LTV - $50,000 - 15 Years 5.66% 5.92% -0.26%

Mortgage Loan Products Credit Unions Bank Average Difference
30 Year Fixed Conforming 3.99% 4.06% -0.07%
30 Year Fixed Jumbo 4.08% 4.06% 0.02%
5/1 Year ARM Conforming 2.92% 2.86% 0.06%

Credit Card Products Credit Unions Bank Average Difference
Platinum 8.89% 10.45% -1.56%
Annual Fee $25.00 $31.00 $-6.00
Maximum Late Fee $25.54 $33.45 $-7.91
Reward 10.03% 13.68% -3.65%
Annual Fee $26.71 $99.76 $-73.05
Maximum Late Fee $22.61 $33.62 $-11.01

Indirect Auto Loan Products Credit Unions Bank Average Difference
Indirect A Tier New Auto Loan - 5 Years 3.59% 3.70% -0.11%
Indirect B Tier New Auto Loan - 5 Years 5.31% 5.21% 0.09%
Indirect C Tier New Auto Loan - 5 Years 7.46% 6.67% 0.78%

Averages displayed are straight averages of all institutions within the Informa Research Services database for the selected region as of Thursday, October 30, 2014. For detailed disclosures click here.


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Business Rates

Daily Financial Rates -- 2014-10-31

Financial Rates

Friday, October 31, 2014

03:55 AM CDT

(based on the $1 million market)

1 month0.
3 month0.
6 month0.
1 year0.
2 year0.480.480.420.410.41
3 year0.910.930.840.810.82
5 year1.581.611.531.511.52
7 year2.022.031.971.941.96
10 year2.322.342.302.272.29
20 year2.772.792.792.752.77
30 year3.


Results of the October 27, 2014 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million

Mon, 10/27
Week Ago
Mon, 10/20
13 weeks0.0200.020
26 weeks0.0550.050


3.25% Last changed December 16, 2008


near closing bid0.0700.0400.0700.0700.070
effective rate20.1100.1100.1100.1000.100

FREDDIE MAC (Mortgage commitments, 30 days)

30 year0.

FANNIE MAE (Mortgage commitments, 30 days)

30 year3.5793.5683.5593.5483.497


1 month0.229000.228000.232000.229000.22800
3 month0.377000.376000.379000.376000.37600
6 month0.536000.537000.538000.537000.53700
1 year0.838000.838000.839000.839000.83900

COMMERCIAL PAPER (Financial, 90 days)

TermWeek ended
Week ended
90 days0.230.23

NA: Data not available at time of page generation (shown at top of page)

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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CUs consistently trustworthy, Harris Poll reinforces

CU System
NEW YORK (10/31/14)--Credit unions as a whole continue to be held in high regard by consumers when it comes to trustworthiness, according to a Harris Poll released Thursday.
Nearly half of respondents said their trust in credit unions has remained consistent over the past few years, and 25% said they trusted credit unions more. Meanwhile, 50% reported having less trust in banks, and 57% had less trust in Wall Street.
The Harris Poll surveyed 2,537 U.S. adults online between Aug. 13 and 18.
Credit unions, which keep money and services local, appear to benefit from location as more than three-quarters of respondents had some or a great deal of trust in local credit unions.
Local credit unions are most trusted by the 69-and-over demographic and baby boomers at 85% and 83%, respectively. However, all age ranges--from 18 to 69-plus--put credit unions above regional banks, local branches of big national banks, big national banks and online-only banks.
Two-thirds say that personal experience drives the level of trust with financial institutions, which aligns with the member-focused service that credit unions pride themselves on.
Credit unions come in with a solid 33% of respondents as members. Similar numbers were seen this summer as the Credit Union National Association tracked the movement's 100-millionth membership, a number equating to a third of the U.S. population.
Big national banks, despite being among the least trustworthy, still hang on to 45% of respondents as customers. Only 1 in 10 report using an online-only bank. ReadMore

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NWCUA's $114 Pay It Forward campaign priceless to recipients

CU System
SEATAC, Wash. (10/31/14)--Credit unions save Northwest households $114 on average annually, and that amount was given to unsuspecting recipients by credit unions during the Northwest Credit Union Association's Pay It Forward campaign.
Click to view larger image The $114 given by Renee Gehring of Valley CU, Salem, Ore., (left) to Family Building Blocks during the Northwest Credit Union Association's Pay It Forward campaign represents the average savings credit unions provide to Northwest households annually. (Valley CU Photo)
Held on International Credit Union Day, the no-strings-attached cash giveaway focused on giving back to the community.
For instance, Adam Hermosillo had a past-due heating bill and no way to bring it current ( Anthem Oct. 28). He happened to be in the Klamath Lake Community Action Services office when in walked Janet Buckalew, vice president of member advocacy and business development, Pacific Crest FCU, Klamath Falls., Ore.
She handed Hermosillo a stack of bills worth $114. "He could not believe it," Buckalew said. The amount was enough to get his electric bill current and help a friend with his electric bill, she added. Hermosillo was not a member of the $149 million-asset credit union, but he did say he would look into what credit unions had to offer.
Linn-Co FCU, Lebanon, Ore., with $81 million in assets, paid it forward to 18 people in three towns--Lebanon, Albany and Sweet Home.  Kathleen Burt, public relations officer, and Rebecca Grizzle, chief sales officer, focused on job-seekers. "We liked the idea of employment offices," Burt said, "because these were people looking for work."
When they saw a young woman filling out a job application at a restaurant, they gave her the money. "People were stunned, grateful and frozen with disbelief," Burt said.
Pay It Forward cash also went to community organizations that address the homeless, child abuse and neglect prevention, and advocacy for people with intellectual and developmental disabilities.

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Operational efficiencies focus of new CUNA program

CU System
MADISON, Wis. (10/31/14)--The Credit Union National Association and FI Strategies LLC have partnered in a commitment to improve processes and bolster efficiencies for credit union sales and service teams using the Process Analysis and Optimization (PAO) program.

The PAO program sharpens self-sustained process optimization in credit union managers and in select employees.

As a result, CUNA says, credit unions that participate will experience a significant and immediate improvement in efficiencies and, at the same time, form a common "production and efficiency" language that permanently improves their cultures.

"I've seen countless credit unions get bogged down in complex processes when they could be streamlining their operations and establishing a sales and service culture that will continue to improve itself in the long run," said Meghann Dawson, CUNA director of learning events.

"Process Analysis and Optimization is all about doing more with less," Dawson said, adding that she's looking forward to watching the program shift credit unions' focus and enable "leaders to spend more time on worthwhile pursuits and less on the ineffectual tasks that are actually costing money."

FI Strategies travels to individual credit unions to teach managers the PAO program through interactive sessions. FI also works with in-house staff to make sure the new routines are firmly adopted.

During the program, participants will learn to:
  • Measure and improve production quality;
  • Forecast future volumes and capacity;
  • Improve processes through analysis and flow charts;
  • Measure the economic impact of improved processes;
  • Effectively record and track vital performance data; and
  • Differentiate between batch and demand tasks.

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Rates, relationships drive growth at Ala. CUs

CU System
HUNTSVILLE, Ala. (10/31/14)--Credit unions are growing more popular in north Alabama, as a poll by (Oct. 30) recently found that there has been a steady growth trend in credit union membership, assets and loan volume since 2011.

Spurred by data from the League of Southeastern Credit Unions (LSCU) that found that 1 in 3 Alabamians belong to a credit union--pushing total membership near 2 million-- decided to check out to five major credit unions in the northern part of the state.

What they found was that each has posted solid gains over the past year.

The credit unions surveyed by were:
  • Redstone FCU, Huntsville, with $3.7 billion in assets;
  • North Alabama Educators CU, Huntsville, with $85 million in assets;
  • Family Security CU, Decatur, with $531 million in assets;
  • TVA Community CU, Muscle Shoals, with $295 million in assets; and
  • Listerhill CU, Muscle Shoals, with $645 million in assets.
The five credit unions gained nearly 20,000 new members last year, found, calling on data from LSCU and the Alabama Credit Union Administration. The jump in membership continued a trend of 15 straight quarters of positive membership growth.

Further, growth in assets has surged as well, as assets among the five credit unions climbed by $196 million between the final quarter of 2013 and the second quarter of this year.

Lending also posted strong gains over the same stretch, with the credit unions posting rising loan growth of about $104 million, or 7.1%.

The credit unions also hold an average net worth ratio of 10.76%.

Kristen Mashburn, Listerhill CU vice president of marketing, says the member vs. customer relationship at credit unions accounts for much of the growth.

"Part of it is the fact that we are not-for-profit," Mashburn told . "People see value in working with a member-owned credit union. They like the feel of being seen as members." ReadMore

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Community outreach focus of revamped Ohio league alliances

CU System
COLUMBUS, Ohio (10/31/14)--Supporting credit unions' work in community outreach areas--financial literacy, scholarship funds or charitable giving--is a key reason the Ohio Credit Union League is shifting to an outreach alliance model from the chapter system.
The evolution to an alliance model will move the burden of training and political advocacy to the league.
The message to chapters is: "Let us do all the heavy lifting," Patrick Harris, league director of legislative affairs, told News Now . "You focus on your credit union, your community and the great work you are doing."
The collaboration effort will begin in earnest in January, and today is the deadline for chapters to express their intent to become an alliance within the league.
An alliance's principal responsibilities are: coordinating at least one major community outreach initiative per year; conducting appropriate fundraising to fuel community outreach initiatives; organizing volunteers and work groups; and sparking collaboration by implementing outreach initiatives that generate a positive impact for the community and the credit union movement.
Outreach alliances will operate under the direction and oversight of the league board and receive marketing support from the league.
When those two "bubbles" of training and advocacy are lifted from the shoulders of chapters, "the sky is the limit" for what credit unions can do in their communities, said Laura Busque, league director of membership engagement.
There is a great deal of pride and ownership in the work chapters have done over the years, Harris said, and the change does not imply whatsoever that chapters were doing anything wrong.
Should a chapter choose not to focus solely on community outreach--for instance, if it excels in professional development--it will continue to receive the league's support but not be part of the alliance program. ReadMore

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Halloween, CUs a boo-tiful pair

CU System
MADISON, Wis. (10/31/14)--Credit unions are leaving the tricks to the banking industry. On Halloween, for their members and communities, it's all about the treats.

Element FCU, Charleston, W. Va., is offering zombie-themed debit cards to celebrate Halloween this year. (Element FCU Photo)
Nationwide on this spooky day, credit unions have carved out special family events, contests and other ghastly promotions to celebrate Halloween. has compiled a list of 12 credit unions that are offering scary good deals and hauntingly fun events for their members.

Element FCU, for example, is offering a zombie-themed debit card that it's calling "A No Brainer" because of the low fees and high rates it carries. Members of the $27 million-asset, Charleston, W.Va.-based credit union can choose from five zombie-themed designs.

Summit CU, Madison, Wis., with $2 billion in assets, meanwhile, hosted its fifth annual Haunted Hustle this week, a series of races that included a kid's race, a stroller derby, a 5K, 10K, half and full marathon.

Many credit unions are also holding costume contests, both at their branches and through social media, such as City and Police FCU, Jacksonville, Fla., with $62 million in assets, which is holding a City Kid's Club member Halloween photo contest.

The winner gets a $25 deposit into their jack-o-lantern pail (also known as a City Kid's Club savings account at the credit union).

CitizensFirst CU, Oshkosh, Wis., with $402 million in assets, is jumping all over the pumpkin spice craze by offering its own Pumpkin Spice Loan promotion that allows members to switch over their current vehicle loans to get lower rates, and to let the member hold off payments until January.

And in West Jordan, Utah, Mountain America CU, with $3.9 billion in assets, is giving away pumpkins and handing out vouchers for local Halloween attractions like The Haunted Village. ReadMore

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Millennials and housing: What you need to know

WASHINGTON, D.C. (10/28/14)--Almost half of young adults with student loan debt say that debt is hindering them from buying a house, according to a survey by NeighborWorks America (Oct. 22).
While student loan debt can be a concern for many, another new study shows that that for some it isn't interfering with their home-buying plans at all. Four out of 10 millennials still plan to purchase a house within five years (Origination News Oct. 22).
If you're looking to purchase your first home you should understand:
  • The difference between being prequalified and preapproved. Prequalification simply involves a rough calculation of the mortgage payment you can afford. Your credit union lender can help you with this. Preapproval means you're essentially good to go. You formally apply for the mortgage and pay an application fee. The lender determines that you are eligible for a mortgage of a certain amount. It's called preapproval, rather than approval because, before making a final commitment to you, your lender must verify your information regarding employment and salary;
  • The difference between a fixed-rate mortgage and an adjustable-rate mortgage.With a fixed-rate mortgage the interest rate stays the same throughout the life of the loan, typically 15, 20 or 30 years. Your monthly payment will remain the same during that time. With an adjustable-rate mortgage the interest starts at a lower level and then may go up or down at specified intervals. A lender at your credit union can suggest the best option for you;
  • The difference between an appraisal and inspection. An appraisal determines a property's market value. An objective appraisal assures the lender that the property's value is at least equal to the mortgage amount. Note that a real estate agent's market valuation is not equivalent to a formal appraisal. A home inspection examines the condition of the house and its mechanicals. The purpose is to protect you, the buyer, from nasty surprises. Hire a professional inspector and ask for references;
  • Closing costs. No later than three days before closing, your lender will provide a statement showing you the final figure and a breakdown of all the costs (you got an estimate shortly after your loan was approved). Look over the statement to be sure all is in order. Usually, you'll need to provide a cashier's or certified check for the closing amount (plus the down payment) at the closing; and
  • Insurance needs. If you own a home, you have the potential to suffer property damage or liability loss. Ask your credit union lender and insurance agent about: homeowners' insurance, private mortgage insurance, title insurance, mortgage life insurance, and flood insurance. Insurance needs will vary for each individual homeowner.
For related information, read "$50 Winner: What Newbie Homeowners Need to Know" in the Home & Family Finance Resource Center. ReadMore

Newtek remains largest nonbank SBA 7(a) lender

NEW YORK (10/31/14)--The leading subsidiary of Newtek Business Services kept its status as the largest non-bank Small Business Administration (SBA) 7(a) lender, the company reported Wednesday.

Newtek Small Business Finance Inc. concluded its fiscal year, which ended Sept. 30, as the biggest type in its class by dollar volume of approved loans.
President/CEO Barry Sloane said that while nationwide SBA 7(a) lending volume has increased by 7.4%, Newtek "recorded an over 27% increase in dollar volume of total approved loans."
"The continued robust growth in this industry as well as our individual growth illustrates the strong demand for these loan types," he said, adding the trend represents a tremendous opportunity for the company to support the growth and expansion of the small- and medium-sized businesses nationwide.
Sloane put the volume of total SBA 7(a) loans at $19.2 billion.
The company also said that it remained in the overall top 10 SBA 7(a) lenders by dollar volume of approved loans.
Newtek, the Small Business Authority is a CUNA Strategic Services alliance provider. ReadMore

LEVERAGE consolidates 2 audit services groups

BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (10/31/14)--A subsidiary of the League of Southeastern Credit Unions and Affiliates is merging its two audit service companies.
LEVERAGE, the league-owned entity, said that its Audit and Compliance Group and CU Audit and Compliance Group (CUACG) would merge to take the name of the latter. The move will form the largest firm of its kind in the southeast, with auditors spread across Alabama, Florida and Tennessee.
The firm said that the merger, which took effect Oct. 1, should reduce clients' confusion by offering a subsidiary with a single name.
CUACG, LEVERAGE said, will still offer multiple types of audits, member account verifications, U.S. Treasury Office of Foreign Asset Control (OFAC) assessments, tax planning and 5300 Call Report filing assistance.
"What makes CUACG unique is that it serves only credit unions and is solely focused on providing value to its business partners," said LEVERAGE President/CEO Patrick La Pine. "The strong and unique relationships our staff has with the NCUA and state regulators, along with our current industry specific certifications, ensure that our staff brings credit unions relevant and timely insight."
The company said that the formerly separate audit companies have already performed more than 400 audits in five states between January and October. ReadMore

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