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Interchange, Exams, Tax Status Top 2013 News Now Reader Topics

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MADISON, Wis. (1/2/14)--Debit interchange, National Credit Union Administration supervisory exams and the credit union tax status were the most in-demand topics for News Now readers in 2013, with each making multiple appearances in monthly Top 10 lists.

As News Now brought the latest developments in credit union news to readers each day, other hot topics throughout the year included the Credit Union National Association's Don't Tax My Credit Union and Unite for Good campaigns, the NCUA's settlements in mortgage-backed security lawsuits, student lending, supplemental capital and overdraft legislation, as well as the end-of-the-year Target debit card breach.
 
The top two articles for each month in 2013 included:
 
January
 
NCUA Letter to CUs Cites 2013 Exam Goals

ALEXANDRIA, Va. (1/31/13)--Increased clarity in its guidance to it examiners and more consistency in its examination practices is a key supervisory focus of the National Credit Union Administration this year, said NCUA Chairman Debbie Matz in a Letter to Federally Insured Credit Unions released today.
 
ABA Targets Tax Exemption For 2013, CUNA Primed To Protect

WASHINGTON (1/25/13)--As if there were any doubts about what the banks are up to this year, an American Bankers Association  lobbyist was quoted today by Bloomberg BNA  that a "chief" goal for banks in 2013 is to push for legislation to change or eliminate the credit union federal tax status.
 
February
 
CUs' Mobile Banking Enters Second Generation: Special Report

MADISON, Wis. (2/20/13)--Mobile banking is here to stay at credit unions. Today, about one-third of all credit unions offer mobile banking. The rest are likely to roll it out within the next 48 months. By comparison, online banking took about twice as long to reach similar numbers.
 
Strong NCUSIF, TCCUSF Performances Decrease Premium Chances

ALEXANDRIA, Va. (2/21/13)--The strong performance in 2012 of the National Credit Union Share Insurance Fund and the Temporary Corporate Credit Union Stabilization Fund, reported by the National Credit Union Administration today, decreases chances for a premium assessment this year.
 
March
 
HarborOne Members Vote To Convert To Bank

BROCKTON, Mass. (3/18/13)--Members of HarborOne CU in Brockton, Mass., have voted to convert the $1.9 billion-asset credit union to a mutual cooperative bank charter.
 
NCUA Liquidates I.C.E. FCU

ALEXANDRIA, Va. (3/15/13)--I.C.E. FCU, Inglewood, Calif., has been liquidated by the National Credit Union Administration.
 
April
 
CUNA Warns Of Potential Denial Of Service Attack

MADISON, Wis. (4/26/13)--With the increasing prevalence of Distributed Denial of Service cyberattacks, the Credit Union National Association is alerting credit unions to "chatter" that has been detected about a potential widespread attack that could be planned for May 7.
 
Surcharge Bans Continue To Gain Momentum

MADISON, Wis. (4/2/13)--The number of states considering bans on imposing a surcharge on credit/debit cards is gaining momentum. At least 18 states are considering such proposals, with one measure reaching a governor's desk. That's in addition to 10 states with laws already on their books.
 
May
 
Tinker FCU Branch Destroyed, Assisting Staff And Members

OKLAHOMA CITY, Okla. (5/22/13)--For nearly two dozen staff and members of Tinker FCU's branch in Moore, Okla., Monday afternoon had its moment of reckoning. A half-mile wide tornado bore down on the branch, and they took cover in the credit union's safe deposit box vault. After it was over, they were safe and sound, and the only thing left standing was the vault.
 
Oklahoma League On Tornado: 'We're Prepared To Get Through This'

OKLAHOMA CITY, Okla.  (5/22/13)--Three credit unions in Moore, Okla., saw different outcomes when Monday's EF5 tornado swept through with 200 mile-per-hour winds that leveled thousands of homes and businesses in an area as much as two miles wide and 17 miles long.
 
June
 
Senate Finance Committee's 'Tax Options' Paper Notes CUs

WASHINGTON (6/13/13)--The release today of the Senate Finance Committee's "tax options" paper on exempt organizations--with the elimination of the credit union tax status written clearly in black and white as a reform option--should be a wake-up call for action by credit unions, Credit Union National Association President/CEO Bill Cheney said in immediate response to the paper's release.
 
NCUA Approves Loan Participation Rule

WASHINGTON (6/20/13)--The National Credit Union Administration's final approved rule on loan participations implemented a number of changes sought by the Credit Union National Association and is now a much more workable framework for credit unions to utilize loan participations, said CUNA President/CEO Bill Cheney.
 
July
 
Court Rejects Fed Interchange Cap Rule

WASHINGTON (7/31/13)--The U.S. District Court for the District of Columbia issued a decision today striking down the Federal Reserve's price caps on debit interchange fees. U.S. District Court Judge Richard Leon said in his ruling that the Fed did not follow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment.
 
NCUA To Re-align Regional Supervisory Authority In 2014

ALEXANDRIA, Va. (7/19/13)--To maximize operational efficiency, the National Credit Union Administration says it will re-align its regional supervision of federally insured credit unions in nine states, effective Jan. 1, 2014.
 
August
 
Alloya Corporate CEO Walby Resigns, Effective Sept. 15

WARRENVILLE, Ill. (8/26/13)--Alloya Corporate FCU announced Monday that Bill Walby will resign as Alloya's CEO for personal reasons. His resignation is effective Sept. 15, 2013.
 
What CUs Need To Know About Wednesday's Interchange Developments

WASHINGTON (8/22/13)--Federal Reserve Board General Counsel Scott Alvarez on Wednesday said the Fed plans to appeal a recent district court decision that invalidated the agency's debit interchange fee rule. The U.S. District Court judge currently handling the case said that he would allow the status quo to be maintained for now.
 
September
 
NCUA Approves Final Version Of Fixed-Asset Reg Changes

ALEXANDRIA, Va. (9/12/13)--The National Credit Union Administration just minutes ago approved a final version of fixed-asset regulation changes.
 
NCUA, Fed Agencies Release Elder Abuse Prevention Guidance

WASHINGTON (9/24/13)--The National Credit Union Administration today joined six other federal financial regulators to clarify that financial institutions may report suspected elder financial abuse to appropriate authorities.
 
October
 
CLF And Fed Discount Window Are Only Sources For Emergency Liquidity In New NCUA Rule

ALEXANDRIA, Va. (10/24/13)--A final rule addressing emergency liquidity and contingency funding plans for credit unions has just been approved at today's National Credit Union Administration open board meeting.
 
NCUA Unveils Upcoming CU Exam Changes
 
ALEXANDRIA, Va. (10/8/13)--Changes that will streamline credit union examination reports and improve the overall exam process by setting clearer expectations for credit unions and examiners will be introduced on Jan. 1, the National Credit Union Administration said in a letter to credit unions (13-CU-09) released this afternoon.
 
November
 
No TCCUSF Assessment In 2014

WASHINGTON (11/21/13)--The National Credit Union Administration will not charge a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment in 2014. The National Credit Union Share Insurance Fund assessment for 2014 will be between zero and five basis points, the agency added.
 
JP Morgan To Pay $13B Settlement

ALEXANDRIA, Va. (11/19/13)--The National Credit Union Administration has added another settlement to its victory pile related to lawsuits to regain costs associated with losses to the corporate credit unions brought by residential mortgage-backed securities of alleged questionable quality. The U.S. Department of Justice has just announced that JP Morgan Securities would pay $13 billion in total.
 
December
 
CUNA Working To Determine Impact Of Target Breach On CUs

WASHINGTON (12/20/13)--The Credit Union National Association's regulatory staff is working with CO-OP Financial Services, CUNA Mutual Group and others, including PSCU, Financial Services Information Sharing (FS-ISAC), Visa and MasterCard, to determine the potential impact on credit unions and their members related to the massive data breach confirmed Thursday at retail giant Target.
 
 
Market Reaction To Fed Taper Bodes Well For Loans, Says CUNA

MADISON, Wis. (12/19/13)--The market reaction to the Federal Open Market Committee's decision Wednesday to taper its asset-buying program is good news for housing and auto lending, according to a Credit Union National Association economist.

Target Breach Effect on Payment Systems Under Debate

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MADISON, Wis. (1/2/14)--While credit unions and other financial institutions reissue millions of debit and credit cards compromised by the Target data breach last month, security and payments industry experts are debating the implications of the breach on payment systems.
 
The debate centers around two issues: Will debit cards suffer from a drop in consumer confidence as a result of the breach? And would having the EuroPay MasterCard Visa (EMV) chip-standard technology in place have helped protect consumers data?
 
Several sources say the security breach, which compromised 40 million debit and credit cards and included stolen encrypted PIN data, will impact how consumers pay with plastic.  Some are even predicting the demise of the debit card.
 
The breach has shaken consumers' confidence in using debit cards at physical retail stores, said Karen Webster, CEO of Market Platform Dynamics, in an analysis on Pyments.com (Dec. 30).  "Consumers understand that they are protected from financial ruin if the bad guys get hold of their credit card account number. The picture is a bit muddier when it comes to debit," she wrote. "Federal law doesn't provide much protection. Visa and MasterCard require issuers to have zero liability rules for consumers with signature for signature transactions. But protections for PIN debit are much more varied."
 
Consumers already are more nervous about using debit cards, because the cards link directly to their checking accounts. "So the recent news about the Target breach also included PIN information might just be the finishing blow to the already shaky consumer confidence in debit cards as a secure method of payment anywhere," Webster said.
 
Consumers already say they won't use their debit cards again for purchases because of the breach, wrote  Mark Calvey, a columnist for the Washington Business Journal Online (Dec. 30). "In my opinion, the Target breach is going to focus renewed attention on debit card security," he wrote. However, he noted the push in the financial industry to replace magnetic stripe technology "with more secure, but costly, digital chips." In that case, he wrote, the breach would not be the end of debit cards but would be the end "of the debit card as we know it."
 
Opinions are mixed on whether having EMV chip-based technology, instead of the less secure magnetic stripe technology on cards, would have helped protect data in the Target breach.  Major credit card companies are pushing merchants and financial institutions to switch to EMV by October 2015, and will make them liable for any fraudulent charges if they haven't converted by that date.
 
EMV has been slower to be adopted in the U.S. than in other nations.  According to Tammy Fleiger, vice president of operations at Spokane (Wash.) Teachers CU, it is a "chicken and egg thing." It doesn't make sense to upgrade the credit union's cards until merchants can accept the technology, "and merchants don't want to upgrade their terminals until they have the card," she said in Northwest News Network (Dec. 27). The credit union plans to issue chip cards this year.
 
Some analysts say that even EMV would not have prevented Target's situation because EMV does not encrypt card data transmitted between the card swipe at the terminal and the acquirer of the transaction. Market Platforms Dynamic's Webster in her column said EMV "does nothing to prevent the risk that card information can be intercepted in the merchant environment. Underwriters Laboratory security experts that said when a merchant terminal and/or point-of-sale system is hacked, an EMV chip still would have provided enough information to be used by criminals online. She noted that in countries using EMV technology, fraud is down at stores, but online fraud has increased.
 
Webster and others have indicated a layered approach to data security, involving both tokenization and encryption, should be at the forefront in future discussion about fraud solutions.
 
One group that will help provide structure for EMV changes in the U.S., is the Debit Network Alliance of 10 U.S. PIN debit networks, including CO-OP Financial Services. Formed last month, it will provide structure for the governance, deployment and implementation of the EMV debit standard to facilitate adoption of the standard in the U.S. (News Now Dec. 12).
 
In the Target breach aftermath, credit unions whose members' accounts were compromised are being urged by the Credit Union National Association to collect data about the costs they incur in replacing cards and assisting members. CUNA will have a website up soon to assist in the efforts to track the costs imposed by the breach.
 
Meanwhile, credit unions continued this week replacing debit and credit cards for members whose information was stolen.  The Northeast Florida Chapter of the League of Southeastern Credit Unions said Monday that local credit unions were issuing replacement cards to roughly 58,000 members. They are bearing the full cost of issuing new cards and new card numbers (Jacksonville Business Journal Online (Dec. 30).

Belvoir FCU in Woodbridge, Va., is among the latest credit unions to alert members of the breach, and American Southwest CU, Sierra Vista, Ariz., said it will replace 877 Visa debit cards compromised at no cost to members, even though no fraudulent activity has shown up on its cards. Taking proactive steps will diminish future fraud on the cards, the credit union said.

News Now Director Leigh Gregg Retires

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MADISON, Wis. (1/2/14)--News Now Director of Online Editorial Leigh Gregg will post her last story today, retiring after more than 28 years with the Credit Union National Association's Madison, Wis., office.
 
She joined CUNA in 1985 as a public relations writer, before moving in 1986 to a senior editor position at Credit Union Magazine. Gregg became editor of CUNA's bimonthly Credit Union Executive Journal and served in that position until 2001, when she joined News Now, CUNA's online daily news service, as editorial director.
 
"There is no other single person to whom News Now owes more for its reputation for quality, and depth and breadth of credit union news coverage than Leigh Gregg," said Lisa McCue, CUNA vice president of editorial communications. "She will be missed for her dedication, her superior skills, her love of credit unions, and for the easy way she works with people."
 
Prior to joining CUNA, Gregg taught journalism and mass communications for 12 years at Rutgers University, the University of Wisconsin-Madison, Salem College, and West Virginia University. She also worked at daily newspapers in Ohio and Pennsylvania.
 
She is succeeded by Michelle Willits, who returns to News Now after serving as manager of new alliances for CUNA Strategic Services and advertising supervisor for Credit Union Magazine.

Gentile: Continue to Tell the CU Story

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MADISON, Wis. (1/2/14)--As Paul Gentile exits his post as the Credit Union National Association's executive vice president of strategic communications and engagement, he names this as his proudest accomplishment during his year at CUNA: "Telling the great story of credit unions to the media."  
 
Gentile leaves CUNA to succeed Dan Egan as president/CEO of the Massachusetts, New Hampshire and Rhode Island credit union leagues on Jan. 6. He recently discussed his accomplishments with Credit Union Magazine Editor Walt Laskos.
 
"Credit unions have such a great story to tell," he says. "We've been under the radar for a number of years, and I really think that's changing. If you look at the mainstream press, we're out there.
 
"Credit unions should embrace that, and the best way to do that is to tell their story in the local market."
 
Another key to success, Gentile notes: Doing the right thing for members all the time.

"People are frustrated with big business and with banks," Gentile says. "People are more values-based today: Going green, going lean, organic locally grown foods, and all that. We fit right in there. That's who we are: Locally owned institutions that do good things for the community. More people want to join credit unions when they hear that great story."
 
During his time at CUNA, Gentile helped launch a number of new national communication vehicles, including The Cheney Report and Inside Exchange.
 
Prior to joining CUNA, Gentile was president/CEO of the New Jersey Credit Union League.

Use the resource link to access the full, eight-minute video interview, and to link to The Cheney Report and Inside Exchange videos on such topics as the credit union tax battle, the debit interchange issue, corporate credit union assessments, and much more.

Consumers Should Be Wary of 'Financial Amnesia'

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WASHINGTON (1/2/14)--It's easy to make New Year's resolutions, but it can be harder to carry them out, especially when it comes to financial planning.
 
In a recent poll by the National Foundation for Credit Counseling, 56% of the respondents said they would be better off financially this time next year. The positive outlook was more than three times the number of those who said their financial situation would be about the same.
 
It's good to be optimistic about your financial health, but it takes more than hope and a New Year's resolution, said Gail Cunningham, spokeswoman for the non-profit foundation that represents credit counselors nationwide.
 
"People need to guard against financial amnesia, the affliction of too quickly forgetting the financial mistakes and pain of the past," she said. "Although the future can't be predicted, consumers can protect themselves from financial unknowns by making smart money decisions today."
 
Credit unions continue to be a resource for members who want to improve their money management skills (See Tuesday's News Now story "CUs Help with New Year's Financial Resolutions.")

Cunningham suggested consumers start by building a financial plan that includes:
  • The unexpected emergencies. Tuck away 10% of each paycheck into a rainy-day fund, the foundation said.
  • Long-term savings. If unemployment strikes, bridge money will be needed to cover a minimum of six month's expenses.
  • Known periodic expenses. Set aside money for the fun--birthdays, anniversaries and holidays--and the necessary--vehicle registration and insurance premiums--that occur at the same time each year.
  • Charitable giving. Review your previous charitable contributions to estimate this year's donations.
  • Health insurance choices. Review changes to insurance plans for any impact on cost of prescriptions, co-pays or other medical expenses.
  • Investing. Disciplined investing is critical to building wealth long term.
  • Debt reduction. Instead of allocating minimum monthly payments into the budget, set a date by which all current credit card debt will be eliminated. This step will free up money to go toward satisfying goals such as saving or investing.

Ascentra CU Donates $25K to Iowa Foundation in Honor of Late CEO

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DES MOINES (1/2/14)--The Iowa Credit Union Foundation received $25,000 from Ascentra CU in honor of the credit union's late CEO, Paul Lensmeyer.
 
Lensmeyer, who died May 20, was an "extremely strong advocate" of the foundation's work, said Dale Owen, president/CEO of the Bettendorf, Iowa, credit union.
 
"This gift will advance ICUF efforts around financial literacy, matched savings programs and other ICUF activities," Owen added. "An example like this is what defines our difference and reminds all of us we work in a wonderful credit union community."
 
As president of the $292 million asset credit union, Lensmeyer promoted reading through partnerships with schools and libraries.
 
"On behalf of the Iowa Credit Union Foundation, we are all honored and humbled to receive this generous donation from Ascentra CU in Paul's name," said Jim Niederhauser, vice president of member services, Iowa Credit Union League.
 
Donations help the foundation achieve its mission of helping Iowans build wealth, responsibility and independence.