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CU System Briefs (12/12/2013)

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  • BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (12/12/13)--Credit union industry veteran Lisa Burroughs was hired as senior vice president of strategy and business operations with the League of Southeastern Credit Unions and Affiliates' service corporation. Burroughs' appointment was announced last week by the league. She was the chief operations officer at Michigan Schools and Government CU, based in Clinton Township, Mich., and worked there for 13 years before joining LEVERAGE, the LSCU Service Corp. Over the past two decades, Burroughs has served as vice president of marketing and president for credit unions with assets ranging from $60 million to the $1.3 billion-asset MSGCU. Burroughs also has served as president of Parkside CU, based in Livonia, Mich., and is a Certified Credit Union Executive and a Certified Financial Services Professional ...
  • WASHINGTON (12/12/13)--Federal Housing Finance Agency Deputy Director of the Office of Conservatorship Operations Jeffrey Spohn is set to retire next month. The announcement was made Wednesday by FHFA Acting Director Ed DeMarco. The agency will assimilate two offices that manage conservatorship-related matters into a new Division of Conservatorship. The agency said that the new combined division will be led by current Office of Strategic Initiatives Deputy Director Wanda DeLeo, who formerly oversaw strategic planning related to the future of housing finance and enterprise conservatorships. Spohn has led the Office of Conservatorship Operations since it was created in September 2008. In his role, he collaborated with FHFA, and Fannie Mae and Freddie Mac executives, the agency said, "on all matters relating to the conservatorships, including the management of business settlements on pre-conservatorship matters such as representations and warranties." ...
  • WASHINGTON (12/12/13)--Emerging risks and recent regulatory changes will be two topics taken on when the Federal Reserve hosts a free one-hour webinar today. The webinar, "Consumer Compliance Hot Topics--2013 Year in Review," is scheduled to begin at 2 p.m. (ET). The presentation will include a question and answer segment. ...

New Coalition Addresses EMV Debit Standards

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MONTVALE, N.J. (12/12/13)--Ten U.S. PIN debit networks have formed a new company, Debit Network Alliance (DNA), to provide a structure for the governance, deployment and implementation of the Euro Mastercard Visa (EMV) debit standard.
The collaboration is designed to help facilitate the adoption of an interoperable EMV standard for debit payments in the U.S.
"Formation of the Debit Network Alliance further advances a common U.S. debit application identifier (AID) and its harmonized profiles and parameters," said Stan Hollen, president/CEO of  CO-OP Financial Services, one of the alliance founders. "This is extremely important to credit unions because it preserves their routing and network choices in connection with the emerging EMV standard."
The group seeks to provide members equal access to EMV chip technology under terms that support competition, choice, innovation and delivery of value.
Members will share governance of debit application identifiers, including how the underlying technology is configured on the chip and terminal.
The group said it will provide support for all cardholder verification methods and access to technology that supports future developments.
The debit networks have a history of working collaboratively, usually on network security. The networks have worked together on chip standards under the support of the Secure Remote Payment Council's Chip and PIN Work Group since April 2012.
In addition to CO-OP Financial Services, the founding networks of Debit Network Alliance include:
  • AFFN;
  • ATH;
  • NETS;
  • NYCE;
  • Presto!;
  • PULSE;
  • SHAZAM; and
  • STAR.

States Look to Feds for Advice on Marijuana Loans

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WASHINGTON (12/12/13)--With the legalization of marijuana's recreational use in Colorado and Washington, concerns are now being raised about how merchants should be integrated into the financial mainstream.
State governors and congressional representatives said more guidance from regulators is needed, and they hope to get some answers from today's private meeting of the federal Bank Secrecy Act Advisory Group.
The Department of Justice (DOJ) approved the legality of the state's initiatives earlier this year. The Treasury Department now finds itself having to mitigate the risk of a currently cash-only business without watering down money-laundering protection.
Credit unions and other financial institutions are wary about being involved because marijuana possession is illegal at the federal level, thus subject to suspicious activity reports.
U.S. Rep. Denny Heck (D-Wash.) has been pressing for a "safe harbor from liability" of being accused of money laundering (The Seattle Times Dec. 11). He and U.S. Rep. Ed Perlmutter (D-Colo.) both are seeking a venue for financial transactions.  The two brought forth a "common sense" Marijuana Business Access to Banking Act, which remains in subcommittee.
Perlmutter said there is a need to "provide financial institutions assurance that they can make their own business decisions related to legal, financial transactions without fear of regulatory penalties or criminal prosecution."
A cash-only industry is an "open invitation to organized crime and tax avoidance," Heck told The Seattle Times.
Colorado Gov. John Hickenlooper and Washington Gov. Jay Inslee also want to implement a process so marijuana producers, processors and retailers operate like any other legal business (American Banker Dec. 11). This means processing payments via automated clearing house or credit and debit cards, and making deposits.
"Action by federal regulators to allow state-licensed marijuana businesses to fully access the national banking system would promote public safety and provide significantly better means of meeting the state and [U.S. Department of Justice] enforcement priorities," the two wrote in an Oct. 2 letter to the Treasury Department, the National Credit Union Administration, the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau, the Federal Reserve, and the Office of the Comptroller of the Currency.
They added, "Presently, there are a host of banks and credit unions in Colorado and Washington that we understand are willing to provide normal banking relationships to state marijuana licensees and who would submit to all special [enhanced due diligence] requirements of applicable federal banking regulators under their compliance programs for AML laws."

World Council DSA Nominations Due March 3

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MADISON, Wis. (12/12/13)--Nominations for the World Council of Credit Unions' 2014 Distinguished Service Award, the international credit union system's highest honor, are due March 3.
The award will be presented during the closing ceremonies of the World Credit Union Conference, which meets July 27-30 in Gold Coast, Australia. 
The DSA honors individuals and organizations that have provided outstanding service to credit union development outside their home country.
"Since 1986, World Council has recognized key players in advancing the international credit union movement to where it is today through the Distinguished Service Award," said World Council President/CEO Brian Branch. "The recipients each year remind us how important it is to extend financial access to people who need it most--not just at home, but around the world."
Those that have furthered World Council's vision of "building a global community" are eligible for nomination. Individual recipients are those whose actions benefitted global credit union development beyond their national boundaries, while institutional recipients can be organizations or agencies providing financial or technical assistance to develop international credit union movements and their service infrastructures over an extended time.
DSA is not an annual award, but presented on achievements and worthiness, as determined by the award committee.  World Council can present up to one institutional and three individual awards in a given year.
This year's award recipients will be provided complimentary conference registration and one companion registration for the 2014 World Credit Union Conference.
Nominations must be made by a World Council member organization. To download a brochure and nomination form, and see a list of past winners, use the link.

Anti-blight Bills Clear Michigan Legislature

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LANSING, Mich. (12/12/13)--Michigan credit unions and other financial institutions are exempt from bipartisan anti-blight legislation that won final approval last week from the state Senate last week.
The legislation was supported by the Michigan Credit Union League (MCUL).
"We worked to secure an exemption in committee, and once we obtained the exemption we supported the package," Ken Ross, executive vice president and chief operating officer of the league, told News Now Wednesday.
The legislation, which is expected to be signed by Gov. Rick Snyder, would take effect in March.
Credit unions and other lenders sometimes obtain blighted properties, often during the foreclosure process. Financial industry regulators strongly encourage institutions not to hold property on their books. Because of this, lenders such as credit unions are usually able to move quickly to rehab blighted property, which helps ensure those member deposits are returned back to the credit union and can be placed out into other loans.
If the exemption were not inserted into the package, credit unions and other lenders could have been responsible for blight violations caused by previous home owners, Ross told News Now. Additionally, if those violations were debated and potentially went unpaid, liens could have been placed against the property as a result.
The bills are designed to help cities clean up neighborhoods overrun with dilapidated houses, neglected lawns and abandoned cars by providing citizens and cities with stronger mechanisms for holding property owners accountable.
Civil and criminal penalties would be increased for owners who violate blight laws. Communities would have the power to create anti-blight bureaus to pursue criminal charges against property owners with more than $1,000 in unpaid fines. The legislation also would allow cities to deny owners permits to rezone areas or deny building permits to owners who were delinquent on blight fines.
If enacted by the governor, blight violators who are charged criminally could now be subject to fines of up to $1,000 and/or up to 93 days in jail.
MCUL also encouraged lawmakers to push for additional reforms on the related issue of scrap metal. Hundreds of foreclosed homes continue to be stripped of metal during the lengthy foreclosure process. Vandals sell raw pipes, fencing, and other goods for cash to local scrap metal dealers. HB 4593-4595, a bipartisan package of bills, was introduced in the Michigan House in April to combat the theft of scrap metal from foreclosed properties.
Those bills are currently in committee, Ross said.

In-Kind Contributions Increase CUs' Social Responsibility Image

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KANSAS CITY, Mo.  (12/12/13)--This month's "Community Collaboration" column from Mazuma CU focuses on how in-kind contributions support credit unions and their commitment to corporate social responsibility (CSR).
Brandon Michaels, president/CEO of the Kansas City, Mo.-based credit union, has been addressing CSR and how it is an asset to credit union growth.
In-kind contributions are the largest segment of corporate philanthropy and include resources, services, product donations and education.
"The optimal in-kind contribution for a credit union is to use the knowledge and experience of its employees to teach members of the community valuable lessons in financial literacy," he wrote.
Specifically he used the example of teaching young adults to read their credit scores.  A credit union can share how credit scores are used, what determines the score and ways to improve a less-than-desirable score.
"Using a credit union's inherent in-house expertise to educate on financial matters such as credit scores creates an auto-catalytic reaction," he said. By providing financial education and advice to the public, credit unions build their brands and create good will. It also increases  the number of financially literate potential customers who are more likely to make use of a credit union's services, he noted.
The next article in the five-piece series is "Why Giving Your Employees Financial Education Makes Smart Business Sense."

Youth Membership Strategies Topic of New OpSS Council White Paper

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MADISON, Wis. (12/12/13)--With 1.8 billion members, Gen Y, also known as Millennials, is the largest generation alive, representing not only significant buying power but also technological leadership and innovation. A new white paper from the CUNA Operations Sales and Service Council offers credit unions ideas for gaining Gen Y's trust and loyalty.
Among the tools it offers is a list of products and technologies credit unions must provide to meet Gen Y's demanding expectations, which were shaped in a time of instant downloads and one-click access. They include: 
  • Easy account opening. Millennials are twice as likely to apply for an account online, the white paper said. Opening an account is the first impression a new member will get of a credit union, so it's essential that it is an easy process that takes only a few minutes.
  • Powerful online tools. Millennials want the ability to do online all their banking, specifically payments to friends and mobile deposit, the paper said. They want the convenience and flexibility to manage their money online so they never have to enter a branch. For many, these capabilities are what constitute "good member service," because most never have the experience of working with someone directly at the branch.
  • Mobile banking. Millennials have demonstrated a paradigm shift in traditional thinking: Where older generations ask, "If my phone works, why do I need a new one?" Millennials ask," Are the new functions on the phone worth spending money on a new one, even though the one I have works perfectly well?" They are constantly looking for and demanding the new best thing. As more consumers access the Internet through their mobile devices rather than personal computers, credit unions must offer creative and effective ways to allow them to do their banking on these mobile devices.
  • New technologies. Global positioning, voice, integration across delivery channels and more intuitive mobile capabilities are among the technologies that Millennials expect to make their lives easier every day.
  • Easy loan solutions. Gen Y faces financial challenges that other generations did not. Many Millennials are un- or underemployed, burdened with student loan debt, but still anxious to become independent. Borrowing money--for a car, house or for education expenses--becomes a top concern. Credit unions must find a way to make borrowing easier, the paper concluded.
To download the paper, use the link.

CUNA Marketing and Business Development Council Seeks Award Nominees

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MADISON, Wis. (12/12/13)--Friday is the deadline to submit nominations for the CUNA Marketing and Business Development Council's Marketing Professional of the Year and Business Development Professional of the Year.
The awards honor individuals who exemplify excellence for the benefit of their employer and who successfully perpetuate the growth of credit union membership.
Nominations also are due Friday for the council's Hall of Fame Award, which recognizes marketing and business development professionals who have excelled throughout their professional careers.
Anyone can nominate a high-performing marketer or business development professional through the online process. However, all final nominees must be from a credit union affiliated with the Credit Union National Association and must be a current member of the CUNA Marketing and Business Development Council.
The deadline is Jan. 6 to submit entries for its Diamond Awards, and the final deadline for Excellence in Marketing and Business Development awards is Jan. 31.
Awards will be announced during the CUNA Marketing and Business Development Council Conference set for March 12-15 in Orlando, Fla.
To nominate people and submit entries, use the resource link.