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CU System brief

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  • WASHINGTON (1/29/14)--The Consumer Financial Protection Bureau is accepting applications for two open slots on its Academic Research Council. The council, which the CFPB said was created to gather information from experts with diverse viewpoints, knowledge, and expertise, aids the CFPB by providing the agency's office of research with methodological and technical advice and feedback, suggesting new data collection strategies and methods of analysis and providing input into research strategic planning and the research agenda. The CFPB said council nominees should be tenured academics with world class research and publishing backgrounds and a record of public or academic service. Recognition for professional achievements and objectivity in economics, statistics, psychology or behavioral science is also a plus. Potential council members can also have strong methodological and technical expertise in structural or reduced form econometrics, modeling of consumer decision-making, behavioral economics, experimental economics, program evaluation, psychology, or financial choice, the CFPB added.

N.H. CUs meet with Rep. Kuster

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MANCHESTER, N.H. (1/29/14)--America's Credit Union Museum was the setting for Friday's meeting between New Hampshire credit unions and U.S. Rep. Ann McLane Kuster (D-N.H.).
U.S. Rep. Ann McLane Kuster (D-N.H.), center, met with representatives from six New Hampshire credit unions and New Hampshire Credit Union League President/CEO Paul Gentile last week. (New Hampshire Credit Union League photo)
Kuster, who represents the state's Second District, met with Paul Gentile, president/CEO, New Hampshire Credit Union League, and representatives from Bellwether Community CU, Manchester; Holy Rosary CU, Rochester; Northeast CU, Portsmouth; Service CU, Portsmouth; St. Mary's Bank CU, Manchester; and Triangle CU, Nashua.
The delegation discussed member business lending, supplemental capital, student loans, taxation and regulatory burdens (Daily Scan Jan. 26).  "The Congresswoman is clearly focused on helping the people and businesses of New Hampshire, and we think credit unions can play a part in that," said Gentile, who also serves as president/CEO for the Massachusetts and Rhode Island leagues.
The representatives explained the effect that the 12.25% cap on member business loans has on their efforts to serve small businesses. Kuster offered to communicate with the National Credit Union Administration regarding credit unions' business loan challenges and expressly rejected any suggestions that such lending was unsound, Daily Scan reported.
Gentile also thanked Kuster for co-sponsoring H.R. 1553, The Financial Institutions Examination Fairness and Reform Act, which would bring fairness to the examination and examination appeals processes.

Ark. CU stresses security standards for member data

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FARMERS BRANCH, Texas (1/29/14)--Retailers should be held more accountable for data breaches, such as the recent Target security breach, an Arkansas credit union CEO recently told the Cornerstone Credit Union League.
Like virtually every other credit union, Mil-Way CU, Texarkana, Ark., holds itself to high standards in protecting its members' personal data, Mil-Way CU CEO Allen Brown told the Cornerstone league, which serves credit unions in Texas, Oklahoma and Arkansas (Leaguer Jan. 28). Despite its best efforts, the $105 million-asset credit union was required to replace 500 debit cards in the wake of the recent Target security breach.
Unfortunately, when members swipe their debit cards at restaurants, gas stations or retailers, credit unions are at the mercy of the merchant to secure the network, Brown said.
"Mil-Way FCU performs its due diligence to keep our members and their personal data safe," Brown said. "We adhere to strict security policies and procedures. We have firewalls in place to prevent intruders from accessing our network. And we perform periodic penetration testing to ensure the systems we have in place are working.
"But more importantly, we had to restore member confidence," Brown said. "Anytime there is a data breach of this magnitude, it affects members' confidence. The last thing we want is for members to be afraid of using their debit card."
Members didn't necessarily understand that the credit union was not in any way responsible for the breach, so Mil-Way CU spent a significant amount of time briefing its member service team on the Target breach, so member representatives could could inform and educate members.
Brown said the credit union encourages members to monitor their accounts at least weekly-- if not daily--so they can identify fraudulent activity as early as possible.
Media continue to detail the effects in their regions with numbers drawn from the Credit Union National Association's survey on the Target data breach. The League of Southeast Credit Unions told the South Florida Business Journal that Florida credit unions have lost at least $1.41 million because of the massive Target customer data breach. The breach cost Alabama credit unions $400,000, LSCU told the Birmingham Business Journal.

The Pennsylvania Credit Union Association told Lancaster Online that state credit unions lost $1 million as result of the breach.

And, Politico noted the results of CUNA's survey in a Tuesday article "Banks, stores tout cards with chips as security cure: But chip wouldn't have stopped breach." Credit unions have incurred between $25 million and $30 million in initial costs due to the breach.

LSCU board adopts political endorsement policy

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (1/29/14)--The League of Southeastern Credit Unions' board of directors last week approved an official election endorsement policy.
It is a major election year in Alabama and Florida, the states served by the LSCU. Alabama and Florida have many high-profile federal races, races for governor and cabinet positions (eSignal, Jan. 27).
The league has three political action committees (PACs)--a federal PAC and one each for Florida and Alabama.
"Under the policy, official endorsements will be made by one of two state-specific brands developed by LSCU for advocacy purposes---the Alabama Credit Union Association or the Florida Credit Union Association," said Patrick La Pine, LSCU & Affiliates president/CEO. "This will raise the profile of credit unions since the endorsements will be for major races. It will also give us a foot in the door with the candidates once they win their election."
The process will be transparent, the league said. PAC trustees will make recommendations to the LSCU board on candidates to endorse. Each time the LSCU board endorses a candidate, member credit unions will be informed of the reasons for the endorsement.
Decisions on candidates will be made solely based on their position on credit union issues. 
LSCU will not state that endorsements are made by all 279 member credit unions or their 6.5 million members.
LSCU member credit unions can play a part in the process by attending chapter legislative events where candidates may appear or respond to league requests for endorsements.

Tax fight, merger voting requirements among NWCUA 2014 top priorities

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SEATAC, Wash. (1/29/14)--Although Washington credit unions don't face a declared battle on their tax status this year, protecting that status will be among the Northwest Credit Union Association's top state legislative priorities in 2014, NWCUA Vice President of Legislative Affairs Mark Minickiello told News Now last week.
"It's not specifically under threat, but it's always under threat because of the financial needs of our state," Minickiello. "Even though our tax status was reviewed in 2011 by the legislature, we want to continue to educate lawmakers about the great things credit unions are doing and the money that gets returned to our members and other Washingtonians through that tax status."
Among the credit union benefits that NWCUA and credit unions will share with lawmakers:
  • At a credit union, the typical interest rate on a 60-month auto loan is 1.49% lower than at a bank, so the member would save about $200 per year in finance charges.
  • Washington credit union members collectively paid $38.5 million less in new car finance charges than bank customers in the 12 months ending Sept. 30--and saved more than $38 million in credit card interest charges.
  • The interest rate on a "gold" credit card is typically 11.07% at a bank, but just 10.18% at a credit union.
Last year Washington credit unions helped pass Senate Bill 5302, which among other things, changed the voting requirement of a merging credit union's board to a simple majority, in parity with the Federal Credit Union Act. However, SB 5302 did not change the voting requirement of the merging credit union membership to a simple majority, as also required in the Federal Credit Union Act.

In 2014, Washington credit unions are supporting a bill that would change the membership voting requirement to simple majority. The bill passed out of committee earlier this month. "It's noncontroversial," Minickiello said. "It will probably pass pretty easily."
Another legislative hot button in Washington is marijuana banking. Small amounts of marijuana-related products are legal for most adults in Washington. The state taxes marijuana sales and designates the revenue for healthcare and substance-abuse prevention and education.
The state of Washington is considering creating a state bank for money generated from legal marijuana sales because credit unions and banks are not currently allowed to hold that money.

"We're in opposition to a state bank for thos purposes," Minickiello said. "We think it's premature. We want to wait for guidance from the federal government. It's got to be coming soon."
Minickiello said some Washington credit unions are interested in accepting marijuana deposits. "We have some members that want to get involved--not all of our members," he said.
"Some of our members are waiting for the green light, no pun intended, from the government to get involved, but I think what we are waiting for is guidance that is more immediate than legislation at the federal level, and that is guidance from the [National Credit Union Administration], Minickiello said.

CU pioneer Haynes honored during National Thrift Week

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CLEVELAND, Ohio (1/29/14)--Rita Haynes believes that everyone was put on planet Earth for a reason.

"There's a purpose in everybody's life," she said. Whether or not that's true, Haynes has certainly lived by that mantra. As the leader of the Cleveland-based Faith Community United CU for over five decades, from 1958 until 2012, she dedicated her life to helping her community access financial services it might have otherwise never been privy to.

Last week, she was honored for her life's work at a National Thrift Week event in Philadelphia, where she gave the keynote speech. At an event sponsored by a local charity, People to People Inc., and a New York-based think tank, the Institute for American Values, Haynes spoke about how she turned the credit union from a $500 church basement operation into a $12 million institution with its own branch.

"I just wanted to make sure that I was instrumental in helping to change lives," she said in a documentary about Faith Community United shown at the event. Haynes, who started managing the credit union shortly after joining its parent church, Mount Sinai Baptist Church, also discussed the profound responsibility she felt after receiving members' "total life's savings."

The credit union, which was founded in 1952, had its roots in the early days of the Civil Rights movement. As black servicemen returned from World War II only to find themselves discriminated against, they banded together to launch their own institutions like Faith Community United. Haynes explained this history and how it was difficult to inculcate a sense that the Mount Sinai parishioners, too, deserved access to institutions white communities took for granted.

"Once we got over that hurdle, everything went great," she said. "We were able to get the credit union on solid footing."

The spirit of solidarity and community that gave life to Faith Community United is reflected in financial products it offers. Its Grace Loans--a short-term credit line of up to $500, launched in 1999--and Mercy Mortgages--designed for members facing foreclosure--both offer the Cleveland area membership an alternative to the predatory lenders that crept into the void left in the inner city by conventional banks.

Members over the years appear to have responded positively. Since it was launched, Faith Community United CU has grown to become the largest minority-owned credit union in the state of Ohio. For that, Haynes was honored last week, given the marquee ahead of notable figures such as Philadelphia Mayor Michael Nutter and State Treasurer Rob McCord, a 2014 Pennsylvania gubernatorial candidate.

Severe weather closes some southeastern CUs

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TALLAHASSEE, Fla. (1/29/14)--As Winter Storm Leon beared down, the Deep South faced freezing rain, sleet and snow, which caused some credit unions to close Tuesday.
Snow was forecast to reach as far south as Pensacola, Fla.  The winter storm warning was in effect for all of southeast Mississippi, southwest and south central Alabama, and the western Florida panhandle until 6 a.m. today.
Keesler FCU, Biloxi, Miss., was monitoring the weather in the Gulf Coast and said on its website it would post operating hours this morning. Hope CU closed branches in Jackson and Utica, Miss., as well as its New Orleans branch.
The Birmingham, Ala., office of the League of Southeastern Credit Unions closed at noon Tuesday, said Mike Bridges, vice president of communications. It plans to reopen for normal hours today.
All branches of Army Aviation FCU, Daleville, Ala., are closed until Thursday "due to the fast-moving weather conditions," said the credit union on its website.
Pen Air FCU, Pensacola, Fla., closed at 11:30 a.m. Tuesday and will not reopen until Thursday. "We urge all members to check for updates before driving to any branch, as member safety is of upmost importance to us," the credit union said on its website.
In Warner Robins, Ga., HEA FCU and Robins FCU were among the mid-state businesses that planned late openings (The Telegraph Jan. 28).  TIC FCU closed its branches at noon Tuesday, said Mark Littleton, vice president and chief strategy/marketing officer for the Columbus, Ga., credit union. It reminded members that ATMs and phone, mobile and online banking are available (Ledger-Enquirer Jan. 28).
Heart of Louisiana CU, Pineville, closed branches last Thursday and Friday because of weather and closed again Tuesday, according to its Facebook page and website.
In Austin, Texas, Velocity CU notified its members of late office openings on its website and encouraged members to use online, mobile or phone banking systems.
The Cornerstone Credit Union League rescheduled a planned compliance seminar that was to be held in Houston Tuesday. It has been moved to Feb. 14 (Leaguer Jan. 28)
States of emergencies were declared in Alabama, Georgia, Louisiana, North Carolina and South Carolina, with Mississippi Gov. Phil Bryant closing state offices Tuesday ( Jan. 28).
As the storm moved north and east, other credit unions took precautionary measures. CPM FCU, North Charleston, S.C., closed branch locations in Orangeburg, Summerville, Charleston and Beaufort Tuesday with modified operating hours today.