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CU System briefs (01/31/2014)

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  • FARMERS BRANCH, Texas (1/31/14)--Effective Monday, the Cornerstone Credit Union League will have a new phone system (Leaguer Jan. 30). Credit unions from all three of the league's states--Arkansas, Oklahoma and Texas--can use the league's toll-free number, (800) 442-5762, to reach an employee by name through the automated voice system ...
  • WEST JORDAN, Utah (1/31/14)--In yet another recognition of its workplace excellence, Mountain America CU was named one of the "Best Companies to Work For" by Utah Business magazine--its fifth such honor. The $3.6 billion-asset credit union also recently was honored with two national awards: Alfred P. Sloan Award for excellence in workplace efficiency and effectiveness, and the Achievers' 50 Most Engaged Workplaces Award. "We have established a great culture, work environment and we are committed to continue to be an outstanding organization," said Marshall Paepke, executive vice president of the West Jordan, Utah-based credit union ...
  • LONGVIEW, Wash. (1/31/14)--Cowlitz CU, a $41 million-asset credit union based in Longview, Wash., announced it will voluntarily merge with Red Canoe CU, a $586 million-asset credit union also in Longview. The board unanimously agreed to the merger, which brings the two credit unions back together. When Cowlitz CU was formed, it was managed by Weyerhaeuser CU, now known as Red Canoe, and the two kept their assets separate. Eventually Cowlitz CU had its own CEO. "It's becoming increasingly difficult to keep up with new regulations and the fast-paced technological developments in our industry," said Larry Anderson, Cowlitz CU board chairman. Red Canoe President/CEO David Spaulding announced all 15 of Cowlitz' employees will remain employed by Red Canoe ...
  • WESTBROOK, Maine (1/31/14)--A record number of players and teams hit the boards during the 20th Annual Dr. Noel Paradise Memorial Swish-Out Childhood Cancer Challenge Jan. 26. Maine's credit unions coordinate the annual charity basketball tournament that has raised more than $290,000 for the Maine Children's Cancer Program. This year, more than 300 players and 52 teams, including Orono-based University CU (pictured), raised a record-breaking $31,000--100% of which goes to the program to help children with cancer and their families, said Jon Paradise, league assistant vice president of governmental and public affairs ...

Biz Kid$ offering financial ed grants for CUs

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MADISON, Wis.  (1/31/14)--The National Credit Union Foundation (NCUF) is now accepting applications for Biz Kid$ financial education grants.
 
"There is a need to improve the financial literacy skills of the youth in America and Biz Kid$ is the perfect vehicle to address that need," said Danielle Brown, NCUF director of development and donor relations.
 
"We are looking to fund innovative programs that improve the financial education of youth through the use of the Biz Kid$ program and encourage you to apply," she added.
 
Biz Kid$ financial education grants may be used to fund innovative programs that use the award-winning TV series and associated content to improve the financial education of youth.
 
The objective is to engage the credit union movement in using Biz Kid$ and its curriculum to build students financial literacy and economic education skills while increasing awareness and usage of Biz Kid$.
 
Credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions are eligible to apply. The deadline is March 31.

Director's Newsletter examines risk management

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MADISON, Wis. (1/31/14)--The latest edition of Credit Union Directors Newsletter examines questions about risk management systems that may have been raised, rather than answered, in a recent National Credit Union Administration supervisory letter.
 
The Credit Union National Association's January edition of Directors considers enterprise risk management (ERM), as addressed by the NCUA in a Letter to Federally Insured Credit Union (13-CU-12).
 
NCUA pointed out that ERM might benefit larger, more complex credit unions and that examiners should make sure credit unions employ a comprehensive risk management approach. This might or might not include a formal ERM program, NCUA said.
 
To better understand ERM and traditional risk management, Joette Colletts, a senior manager in risk management for CUNA Mutual Group, compared the different approaches.
 
Traditional risk management encompasses only hazard and transactional (operational) risk exposures. There's no upside or positive outcome for these risks, other than the status quo.
 
ERM includes all the risks a credit union faces, regardless of source or potential outcome. With ERM, credit unions consider the upside of risk, such as the possibility of outperforming strategic goals.
 
ERM also removes the NCUA's key risk indicators (credit, interest rate, liquidity, transactional, compliance, strategic and reputational) from individual silos and addresses them as part of the overall strategy.
 
The ERM process optimizes risk-taking tied to strategic goals, while traditional risk management simply aims to prevent or reduce losses.
 
For example, ERM would include an assessment of competitive challenges, such as plans by competitors to build new branches within a credit union's market. It would also examine the potential impact of a significant reputational hit, such as a highly publicized data breach or a top executive being prosecuted for embezzlement.
 
NCUA acknowledges that most credit unions don't have the means for expensive ERM software and other tools used to consolidate and assess this broad swath of information. A basic understanding of how to transcend individual operational risk assessment can increase credit union value.
 
Risk responsibilities are distributed differently as well. In traditional risk management, the responsibility for managing all of a credit union's operational risk belongs to one department or one individual.
 
In ERM, the enterprise risk manager (often referred to as the chief risk officer) acts as a facilitator and educator about the ERM process. This person serves as a coach to all the risk owners in the credit union. in fact, all employees are risk managers for functions within their responsibility.

ERM allows information to flow throughout the credit union, avoiding information silos that prevent critical information from reaching key people. The "enterprise" in ERM includes all employees, management, board of directors, committees, members, the community and regulators.
 
The more employees know about the risks a credit union faces, the more they can participate in finding and executing solutions, and in capitalizing on opportunities, Colletts noted.

Filene adds Trust Card to financial services incubator

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MADISON, Wis. (1/31/14)--Neighborhood Trust FCU's debt management program, The Trust Card, has been selected as the fifth and final product for the Filene Research Institute's accessible financial services incubator.
 
The Trust Card, which is a joint program between the $8.7 million-asset credit union and New York's Neighborhood Trust Financial Partners, aligns financial counseling with reducing credit card debt.
 
The Trust Card consolidates existing unsecured debt, offers a fair interest rate and sets a fixed monthly credit card payment that is within a consumer's budget.
 
Since its trial rollout 18 months ago, the New York credit union has consolidated about $300,000 of debt for 45 Trust Card users. The program saved borrowers thousands in interest and generated substantial revenue with zero charge-offs.
 
"We searched nationwide to find innovative financial products that benefit low- and moderate-income U.S. consumers," said Cynthia Campbell, director of innovation labs at Filene. "The Trust Card joins four other products to be tested in areas like non-prime auto loans, small dollar loans and employer-based loans."
 
The other four products are:
  • "Pay Yourself Back," Innovations in Poverty Action. This program switches consumers from making monthly loan payments to making savings deposits once the loan is paid off.
  • Employer-sponsored income advance loan, NorthCountry FCU, Burlington, Vt. Employees of select employer groups are eligible for small dollar loans that are auto-deducted from direct-deposited paychecks.
  • Non-prime auto lending, National Credit Union Foundation. Purchasing reliable transportation can be a challenge for some consumers, but is necessary for access to employment, housing and education. This program helps lenders fairly price and manage non-prime auto loans.
  • "Borrow and Save," National Federation of Community Development Credit Unions. This also is a small dollar loan that includes a component for building emergency savings.
Filene is seeking credit unions to test the Trust Card, "Pay Yourself Back" and the employer-sponsored income advance loan.

Chatzky: Hope is not a financial strategy

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FARMERS BRANCH, Texas (1/31/14)--Hoping for the best is a positive approach to most situations in life, but not when it comes to personal finance, according to money expert Jean Chatzky who was a guest on the Cornerstone Credit Union League's "Your Money Your Matters" Blog Talk Radio show Wednesday.
 
Chatzky is headlining the Cornerstone Credit Union Foundation's FOCUS Summit Feb. 6-7 in Dallas. The two-day summit addresses the financial literacy problem in U.S., and is an opportunity for financial education advocates to network, share best practices, learn about available resources, and explore proven and strategies for deploying financial education into their local schools and communities.
 
The "Let's Talk Money" with Jean Chatzky episode can be heard on Cornerstone's Blog Talk Radio channel (Leaguer Jan. 30).
 
Rather than wishful thinking, personal finance is about making conscious choices, Chatzky told listeners. For example, paying down debt requires a plan.
 
"I've never seen a budget where I can't squeeze something out of it," she said. "There might be a cell phone with minutes not being used or cable channels you don't really need."
 
Wherever expenditures can be cut, savings can be applied toward paying down debt, Chatzky said. Ideally, a consumer should be able to come up with an extra $10 a day that can be used towards debt. But if $10 is too much, she suggests trying for $2 a day and working up incrementally to $10 a day.
 
If the goal is to save more for retirement, Chatzky encouraged listeners to take advantage of employee-sponsored 401(k) plans.
 
She also shared her thoughts on money management in an interview that is available on the league's YouTube channel.

Minn., R.I. policymakers win state Desjardins awards

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WASHINGTON (1/31/14)--This year, two state policymakers--Minnesota Commerce Commissioner Mike Rothman and Rhode Island General Treasurer Gina Raimondo--were awarded the Desjardins Financial Education Award for State Government Policymakers.
 
The award, which is determined by the Credit Union National Association State Credit Union Subcommittee, recognizes the leadership for financial education at the state level. Previously restricted to legislators who promoted youth financial education, nominations for the award have been expanded to any state government policymakers who promote financial education to individuals of any age.
 
In his nomination letter, Minnesota Credit Union Network President/CEO Mark Cummins commended Rothman's efforts to bring together 10 state agencies that had existing programs, outreach or policy interests in financial literacy. The Minnesota Financial Literacy Interagency Work Group was the first of its kind in the state. The work group sponsors and organizes financial literacy outreach and education efforts. Its annual Financial Literacy Roundtable brings together a broad group of interested parties to pursue new opportunities for financial literacy program development and improvement.
 
"Commissioner Rothman has been a tireless advocate for financial literacy in Minnesota since he was appointed Commerce Commissioner in 2011," Cummins wrote.
 
In Rhode Island, Raimondo launched the Empower RI initiative, which includes the Financial Coaching Corps (FCC). Nearly 20 credit unions, non-profits and small businesses work with the General Treasurer's office and the Capital Good Fund in FCC. The state also offers EverFi, a web-based financial literacy program for high school students. Raimondo also started the Smart Money Tour this year that reached more than 300 people during stops at senior centers, farmers' markets and malls.
 
"The association is pleased that Treasurer Raimondo is being recognized for the outstanding work that she has done to support financial literacy efforts in Rhode Island," said Paul Gentile, president/CEO, Rhode Island Credit Union League (Daily CU Scan Jan. 28).
 
CUNA's State Credit Union Subcommittee accepts nominations for this recognition annually and usually recognizes only one awardee.

 

 

Interactive GAC breakout session to explore risk-based capital proposal

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WASHINGTON (1/31/14)--In response to increased interest in the National Credit Union Administration's risk-based capital proposal, the Credit Union National Association added a special breakout session to its Governmental Affairs Conference in Washington, D.C.
 
During the Sunday, Feb. 23, session, CUNA staff will provide a breakdown and brief overview of the proposal, which imposes new requirements on credit unions with assets of $50 million and above. The session is set up with interactive polling for attendees. It will provide opportunity for participants to learn more and express concerns. (See related story: CUNA encourages CUs to weigh in on critical capital proposal.)

The session is in addition to the already scheduled "What's Next for Capital Reform?" breakout on Tuesday, Feb. 25.
 
Space is limited for the special breakout session.

Arch Capital Group completes CMG Mortgage Insurance Co. acquisition

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MADISON, Wis. (1/31/14)--Arch U.S. MI Holdings Inc. (Arch), the U.S.-based subsidiary of Arch Capital Group Ltd., Thursday completed the acquisition of CMG Mortgage Insurance Co. (CMG MI) from CUNA Mutual Group and PMI Mortgage Insurance Co.
 
The acquisition of CMG MI and the operating platform will form the foundation for Arch Mortgage Insurance Co. (Arch MI) to offer mortgage insurance nationwide.
 
This transaction was first announced in February 2013. Earlier this month Arch received approval from Fannie Mae and Freddie Mac for the acquisition of CMG MI and the expansion of its charter to conduct non-credit union mortgage insurance business.
 
With the completion of the transaction, Arch MI enters the market as a government-sponsored enterprise (GSE)-approved mortgage insurer.
 
As part of the transaction, CUNA Mutual Group will exclusively manage the distribution of mortgage insurance to credit unions. The CMG MI sales team will continue serving credit unions as CUNA Mutual Group employees. Credit union systems interfaces and key support personnel, including underwriters, will not change.
 
"This relationship with Arch MI allows CUNA Mutual Group to better focus on its strengths, while maintaining our commitment to delivering superior product solutions to the credit unions and members we serve," said Robert Trunzo, CUNA Mutual Group president/CEO. "Our marketplace knowledge and distribution abilities combined with Arch's strength as a global insurer and strong credit ratings will allow us to continue delivering superior service and a reliable private mortgage insurance product to credit unions."
 
The transaction does not affect any credit unions with existing CMG MI policies, the companies said. The transaction also provides that a CUNA Mutual Group affiliate will reinsure a portion of the post-closing mortgage insurance business issued by CMG MI to credit unions, under the terms of a quota share reinsurance agreement.