Issues, Initiatives, and Solutions: September 2008
Challenging Credit Unions to “Think Big” As An Industry
It’s Fall again, and we’re all trying to become a bit more “strategic” as we do planning and budgeting for the next year. Summers always go fast in Michigan and as we get older, it seems that each year flies by. The year 2008 is no different. We’re also in the midst of a presidential election at a time where the theme is “change”. Approval ratings are at all-time lows for President Bush and the U.S. Congress and both presidential candidates are posturing to see who can come across as the best change agent. Tough economic times with record-high foreclosures, a rising unemployment rate, high gas prices, increased poverty, international tensions, falling home prices and a slumping stock market – all make for a pretty challenging scene in America.
Now, during the past two weeks, we are witnessing a financial services meltdown on Wall Street that is causing the federal government to consider an unprecedented record-high bailout that could approach $1 trillion before the dust settles. The good news, if there is any, is that credit unions have a huge opportunity to promote themselves as a conservative and compassionate sector of the financial services industry that is ready to help members save and borrow responsibly for the future.
So, as credit union leaders approach our individual spheres of influence, how big are we willing to think? Will we tweak our plans and try to stay the course as conservatively as possible, or will we try big new ideas? Big ideas come with some risk for sure. But credit unions and all financial institutions are in the business of managing risk. Credit unions have more opportunity than ever to find ways to take measured risks on behalf of their members and communities. My team and I have ideas, and we always push ourselves to make the MCUL & Affiliates as innovative as possible, but together we need to collaborate to find the next big ideas in our industry. We will be looking for multiple ways to engage in communication with our credit union community in the weeks and months ahead in order to identify opportunities for credit unions to expand their services and promote what they have to offer.
This is a time when credit union leaders should think big. And there are many great leaders in our midst. Credit unions of all sizes have boards and executives and employees who want to be a part of something really meaningful. We want to have an impact. We know the credit union model has great capacity for making a difference in peoples’ lives. But we should be asking ourselves whether we as a credit union industry, individually and collectively, are stretching enough to serve member and community needs. I also wonder whether we are doing enough to collaborate on big-impact ideas that will position the credit union industry as a real force in our Michigan economy.
I have spent my career in this industry and I am very proud of how our credit union community makes a huge difference in peoples’ lives every day. In the current climate, I am particularly proud of how well credit unions have weathered this economic storm. In the credit union sector, we don’t see the kind of financial stress that has led to the failure of IndyMac and numerous other banks. The bankruptcy filing by Lehman Brothers, the acquisition of Merrill Lynch by Bank of America and more recently, the rumor that the nation’s largest thrift, Washington Mutual, is in high-level talks to merge with JP Morgan Chase – all dramatically illustrate how deep the problems are. With the government takeover of Fannie Mae and Freddy Mac, we are witnessing deeper and deeper problems in the financial services industry; and yet, credit unions have so far been only barely touched by these pressures. We tout that we have not been part of the problem, but wish to be part of the solution.
So, as we do our planning, perhaps we could think of a few really big ideas that we might implement as an industry. I would love to hear your ideas, as this is the time where the MCUL & Affiliate companies are looking at the big picture and considering opportunities for helping our industry in as many ways as possible.
Here are a few ideas I have been thinking about. I welcome your suggestions and your response.
- Credit Union Difference Campaign Expansion – Credit unions have a great opportunity to hit the airwaves with messages about the credit union difference. The Wall Street Journal and CNN have already run great stories that promote credit unions as the place to save and the place to consider as trusted, responsible lenders. In the weeks ahead, we will be looking for input from our credit union community to see if our industry can refine our message and expand the funding in support of a broader CU Difference Campaign.
- Shared Branching – The industry is doing a lot of good things in this area. We have Co-op Financial Services and CU Answers’ Extend program where more and more credit union facilities are being linked. But are we anywhere close to our potential? Do we really promote these sites in such a way that the public perceives credit unions to be as convenient as Bank of America, Chase, or others? Chase is now running a large advertising campaign in Southeast Michigan called, “MOST”. They are touting that they have the MOST branches of any bank in Michigan. Pretty impressive, but it turns out this number is only 297. Credit unions have 983. Wouldn’t it be great if we could figure out how to link one third of our total branches so that all participating credit unions could tout that they have more branches than any bank in Michigan?
- Shared Branding – Last month I wrote about Quebec’s Desjardins credit union system. The province’s population size is very similar to Michigan’s, and yet the success of the Desjardins system that operates with a common brand and shared data processing and a shared support system make it truly remarkable. Could we in Michigan do something similar, if even for a select few credit unions in order to help smaller credit unions look much bigger and share a common identity in the process, while allowing individual credit unions to stay independent? What would the power of shared branding be and could it be done without an outright merger of the entities?
- Cooperative Risk Fund – We have a huge foreclosure crisis in Michigan and private mortgage insurance is expensive or not available at all for many homebuyers. With home prices at record-low levels and with the meltdown of the mortgage secondary market, what kinds of things could credit unions be doing to really make a difference for helping people afford home financing. Should we revisit the idea of a cooperatively-funded risk pool that could step in for private mortgage insurance? Are there other such solutions that the credit union industry could be considering – such as a greatly expanded counseling program to help distressed homeowners?
- Student Loans – The student loan market is in disarray right now. Recently, eight Illinois credit unions got some good publicity by collectively providing over $100 million in funding for state guaranteed student loans. Should we be collaborating to find ways to use credit union funding as a means of helping more people afford a college education? The Career Transition Program (CTP) is an example of what could be done if more credit unions got behind it and expanded the program. Low-cost education loans for young people and adults are in short supply right now and this is a great way to show a commitment to Michigan’s future.
- Payday Loan Alternatives – Why haven’t we considered coming together to buy a payday loan/check cashing company so that credit unions could be out on the street helping these people who will otherwise be taken advantage of by loan sharks at payday loan offices? Programs like “Stretchpay” are good for CU members who are willing to come to a credit union office but what about all the nonmembers who need some assistance understanding how much better a credit union would be for them? In Michigan, we have the greatest CUSO investment authority of any system in the U.S. aggregate capital-asset ratios are also a full percentage point higher than the U.S. average.
- Cooperative Advertising with Pricing Incentives – All credit unions need help with growth right now. Whether we look at a cooperative campaign to promote patronage dividends like the Desjardins credit unions do, or whether we do something with a credit card rewards program, we as an industry should look at creating a program or two that would really cause people to join a credit union. This shouldn’t take away from cooperative image advertising, but it could supplement that campaign.
Those are just a few ideas that we have been wondering about. But what are your ideas? How might we improve our association-based systems for identifying these ideas and putting new programs in place? We have committees and task forces looking at a lot of these areas: are you a part of them? If not, are there other ways to tap into your ideas and enlist your help?
I look forward to hearing from you. Feel free to contact me personally or comment on my blog by clicking here. Thanks for all that you do at your credit union to make a huge difference in the lives of your members. Now we need to get to the 60 percent of Michigan consumers who don’t yet belong to a credit union and we have to continue to think big so that we can help our entire industry improve its image and expand its reach.
-David Adams, MCUL President/CEO
ISSUES
Important legislation and regulations that affect credit unions and what the MCUL is doing to address them, as well as other items that are having an impact on Michigan and its economy.
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Federal Legislative & Regulatory Issues
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Mortgage Originator Loan Licensing and Registration
The Federal Housing Rescue and Foreclosure Prevention Act, which was signed by President Bush at the end of July, contained a provision establishing a uniform licensing and registration system for all loan originators under the Nationwide Mortgage Licensing System and Registry (NMLSR). Loan originators are defined as those who take a residential mortgage loan application and offer or negotiate terms of a residential mortgage loan for compensation or gain. Credit unions should note that employees of depository institutions will not need to be state-licensed, but must be registered with the NMLSR. According to CUNA, an employee working for a subsidiary that is owned and controlled by a credit union and that is regulated by the NCUA doing residential mortgage loan originations will also be subject to registration, although it is unclear if any CUSOs will fit this definition. Before Aug. 2009, the federal banking agencies and the NCUA will develop and maintain a system for registering employees of banks and credit unions in conjunction with the Conference of State Bankers Supervisors (CSBS) system. For more information, including what will be required to register, click here to go to CUNA’s e-guide on Mortgage Licensing Registry.
FHFA Takes Over Mortgage Giants
On Sept. 7, the Federal Housing Finance Agency (FHFA), which was a creation of the Federal Housing Rescue and Foreclosure Prevention Act, announced it had seized Fannie May and Freddie Mac, the mortgage giants that have lost a combined $10.6 billion since 2007. Federal officials determined that the two government-sponsored enterprises (GSEs) did not have enough capital to survive upcoming losses. Serving as conservator, the FHFA will assume all power of the Board and management. Both the MCUL and CUNA see the federal action as a step toward lowering mortgage rates and providing strength to the U.S. housing market. Click here for a full Monitor article.
IRS Form 1099 Payment Card Reporting Requirement
Another provision in the Federal Housing Rescue and Foreclosure Prevention Act expands the IRS Form 1099 reporting by requiring merchant acquiring entities, as well as third-party payment card processors, to annually report to the IRS the aggregate payments remitted to merchants from payment card sales. However, this new reporting requirement is vague and many of the details of implementation will be left up to regulations promulgated by the IRS. CUNA estimates the burden of this reporting requirement will fall heavily on the shoulders of the roughly 2,000 U.S. financial institutions that are members of the Visa/MasterCard Association and that also contract with merchants to act as acquiring institutions for their credit and debit card transactions. Many credit unions outsource the actual processing function to third party entities. These third parties are also now responsible for payment reporting. Click here for a link to CUNA’s issue summary on Payment Card Reporting.
A permanent trust fund, known as the Capital Magnet Fund, will be established by the Secretary of Treasury within the Community Development Financial Institution (CDFI) Fund. This fund is another provision of the Federal Housing Rescue Act. The Capital Magnet Fund will receive annual allocations from Fannie Mae and Freddie Mac to help fund the mortgage crisis. The purpose of the Fund is to carry out a competitive grant program to attract private capital and investment for the following:
- The development, preservation, rehabilitation, or purchase of affordable housing primarily for low income families
- Economic development activities and community service facilities (i.e. day care centers, workforce development centers and health care clinics) which implement a strategy to stabilize or revitalize a low-income or underserved area.
Grants may be made to CDFIs, or non-profit organizations having as one of its principal purposes the development or management of affordable housing. Low-income designated credit unions may apply to become. Click here for more information on the Capital Magnet Fund.
New Mortgage Foreclosure Protections for Servicemembers
Credit unions will need to know that the Federal Housing Rescue Act also includes some immediate protections to servicemembers who are having trouble making mortgage payments. The bill amends the Servicemembers Civil Relief Act (SCRA) by extending the time a lender must wait before starting foreclosure from 90 days to 9 months after a soldier returns from service. This provision expires Dec. 31, 2010. In addition, returning soldiers are provided with relief for one-year from increases in mortgage interest rates, from the statutory 6 percent rate in the SCRA. To read CUNA’s News Now article on these provisions, click here.
Changes to Student Loan Bill Made for CUs
A federal higher education bill approved by the House and Senate prior to the August recess included two changes lobbied for by CUNA. According to CUNA, the original language in the Higher Education Act Reauthorization (H.R. 4137) would have adversely affected university-sponsored credit unions. The bill as originally passed the House would have prohibited university-sponsored credit unions from using the name of their educational institution in marketing the lender’s private educational loans. CUNA sought and received language in the conference report that protects a credit union's ability to share part of its name with a university provided that in its marketing material it does not imply that any loan is being made by the university instead of the financial institution. In addition, CUNA was also successful in obtaining an exemption from the 50 percent rule for credit unions under $1 billion in assets. The 50 percent rule prohibits financial institutions from concentrating more than 50 percent of the value of their loans in student loans. Click here to read the CUNA News Now article on these changes.
New NCUA Chairman Issues Letter on Due Diligence
In one of the new Chairman’s first official acts, Mike Fryzel signed off on a new Letter to Credit Unions, No. (08-CU-19), outlining due diligence expectations for federally-insured credit unions when dealing with mortgage brokers and/or correspondents. The letter is based on guidance found in a 2007 NCUA Letter on the broader issue of due diligence and outlining how a credit union will be evaluated by examiners when using third parties. This current letter focuses specifically on concerns related to using mortgage providers, including CUSO’s. A copy is available at the NCUA Web site, click here.
NCUA Chairman, Mike Fryzel, made an important appointment to his staff in early September. Filling the position of chief of staff and senior policy advisor is an Illinois colleague, Sara Vega, who began September 10. She will oversee the day-to-day management of his office as well as advise the Chairman on the full range of issues before the NCUA. Ms. Vega has fifteen years public service in Illinois and has experience in private law practice. More importantly, she also served four years as director of the Illinois Department of Financial Institutions and ten years as administrator of the department’s credit union division. Click here for more information from CUNA.
State Legislative and Regulatory Issues
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State Legislative and Regulatory Issues
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Highlights on State Legislative and Regulatory Issues
OFIR Clarifies Deferred Comp Plans in New Bulletin
OFIR recently issued Bulletin 2008-09-CU that supersedes Bulletin No. 207-05-CU dated May 1, 2007. Both Bulletins discuss permissible employee deferred compensation arrangements and related investment limitations. The revised Bulletin clarifies the types of arrangements that the Bulletin was intended to cover. These include health care, life insurance, disability income replacement plans and retirement plans. This guidance is important because it interprets MCUA provisions that permit the use of equity investments that otherwise would be impermissible under the MCUA. A copy of the Bulletin can be obtained from the OFIR Web site, click here.
Highlights on the Economy and Other Issues
Credit Union Growth Update
Credit unions in Michigan experienced growth in total assets, loans, shares, net worth and membership during the 12 month period ending June 30, 2008, according to the latest Callahan & Associates, Inc. Peer-to-Peer data. According to the data, assets for credit unions in Michigan grew 7.10 percent to $34.4 billion from the $32.2 billion reported for the same period ending on June 30, 2007. Loans were up 5.28 percent to $21.6 billion, while shares grew 7.25 percent to $29.1 billion. Total credit union net worth grew by 4.74 percent to $4.2 billion for a net worth to total asset ratio of 12.17 percent. Credit union membership grew 2.29 percent to 4.4 million, while the total number of Michigan credit unions declined by 4.34 percent to 353 from 369. Total allowance for loan losses decreased by 22.93 percent to $176.5
million from the June 30, 2007 balance of $228.9 million. Delinquent loan balances increased by 1.73 percent to $286.9 million from $282.1 million. Annualized net income increased 106.31 percent to a total of $200.7 million from $97.3 million, while the return on asset ratio doubled to .60 from .30.
Foreclosure Update – Michigan Numbers Down from Last Year, but Up from July
According to RealtyTrack, Aug. brought two bits of good news for the Michigan real estate market: foreclosure filings in Michigan are down nearly 13 percent from last year and home sales are up almost 12 percent in the Detroit area. Michigan ranked fourth nationwide in the total number of foreclosure filings in Aug. 2008 with 13,605, which is down from 15,565 filings in Aug. 2007. Unfortunately, foreclosure filings rose by 17 percent when compared with July levels. Michigan ranked fifth nationwide for its foreclosure rate of one filing for every 332 households. That compares with a national rate of one filing for every 416 households. Nevada had the highest rate with one foreclosure filing for every 91 households in Aug. Nationally, foreclosures hit another record high in Aug.: 304,000 homes were in default and 91,000 families lost their houses. More than 770,000 homes have been repossessed by lenders since Aug. 2007, when the credit crunch took hold. Foreclosure filings of all kinds, including notices of defaults, notices of auctions and bank repossessions, grew 12 percent in Aug. over July, and 27 percent compared with Aug., 2007. For a Detroit News article with more information, click here.
INITIATIVES
Updates on specific campaigns created by the MCUL to strengthen the credit union charter and differentiate credit unions from banks, as well as the Community Reinvestment Initiative (CRI).
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Priority Initiatives - Click Any Initiative for More Information
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Highlights on Strengthening the Charter
2008 Election Central up on MCUL Homepage The MCUL Governmental Affairs department has maintained links and important election information on the Campaigns and Elections page of the MCUL Web site, but recently, all vital information for members to know for the general election has been moved to the front page of the web site under the 2008 Election Central header. Access the site by clicking here.
Additional Candidate Endorsements
The MCUL sent out a request early in August to credit union CEOs asking for their input on candidates for the State House of Representatives from their area. Along with that input as well as candidate surveys in hand, the MCULAF/MCULLAF Board of Trustees approved 12 additional endorsements, bringing the total to 76 endorsements out of 110 State House seats. The next Trustees meeting on Sept. 29 will be the final chance to endorse a candidate before the general election on Nov. 4. For the complete list of endorsements, click here.
Fund Raising and Grand Raffle
The MCUL’s state and federal PACs – MCULAF and MCULLAF, respectively, continue to post impressive numbers as Summer comes to a close. As of Sept. 9, MCULAF is at 85 percent of its 2008 goal, with $126,917 raised – only $4,000 behind the total amount raised during all of 2007, setting up a potentially record-breaking year. MCULLAF is at 53 percent of its 2008 goal with $144,876 raised – an increase of over $12,000 compared to the same point in 2007. All 30,000 tickets for the MCULLAF Grand Raffle have been distributed, and the reallocation of unsold tickets continues. 10,716 tickets have been sold, bringing in $53,580. Further information on PAC fund raising can be found here.
International Credit Union Week Online Auction
An online auction to raise money for MCULAF (state PAC) will be held during International Credit Union Week. The auction is scheduled to run from Monday, Oct. 13 through Friday, Oct. 17. The first announcement of details has gone out to CEOs and chapter executives asking for prize sponsors. More details will be provided in the coming weeks here and in Michigan Monitor. Last year, the auction coupled with the casual days for this week raised over $8,000.
GOTV Statement Stuffers
Generic or candidate-specific “Get Out the Vote” statement stuffers are still available. Thus far, the MCUL has received orders for 449,000, which is a 30 percent increase from the number requested for the 2006 election. A sample of the candidate specific statement stuffer can be seen here and a sample of the generic one can be seen here.
NASCUS and OFIR Plan Director's College with MCUL
NASCUS, in conjunction with both OFIR and the MCUL, will offer in Michigan, at Michigan First Credit Union, its recently created Director’s College on Sept. 24. Over 100 officials have registered. Former NCUA Chairman Dennis Dollar will be the keynote speaker. This is a day-long training event focused specifically on directors and will address their responsibilities and fiduciaries as directors as well as apprise them of important current compliance issues. OFIR Deputy Commissioner Roger Little and Assistant Director, John Kolhoff will also present, as well as Michael DeFors, MCUL director of regulatory affairs. The event is described on the NASCUS Web site at: http://www.nascus.org/events/Board-College.htm.
FAQ Outlines Importance of Understanding Share Insurance
In response to concerns and questions from credit unions directly to MCUL staff and through the Compliance Helpline, guidance on share deposit insurance has been published in the popular FAQ format. Entitled, “Share Insurance – Part I,” Compliance Helpline Consultant, Stephon Johnson, outlines the topic with a series of questions describing how share insurance coverage works and provides a typical situation using a family of four with different kinds of accounts. A second FAQ will be forthcoming that discusses compliance with advertising requirements under the Federal Credit Union Act and related regulations. The FAQs can be found on the password protected, MCUL Compliance Web page under Compliance Communications. See: http://www.mcul.org/FAQs_546.html.
Highlights on the Credit Union Difference
New Creative Coming for Cooperative Advertising
Every two years, the Michigan Credit Union League produces new creative radio/television ads for its cooperative advertising campaign. In 2007, the teacher and the supervisor messages debuted. Both were used during the two-year cycle of the 2007 and 2008 campaigns. For 2009, a new round of creative ads will be produced. The Cooperative Advertising Committee should be getting the new concepts at its October 1 meeting. The new creative ads will include two 30 second television commercials and two 60 second radio commercials. Collateral materials will be available for 2009. To view the television commercials used for the 2007 and 2008 campaigns, click here for the MCUL You Tube channel. (http://www.youtube.com/user/MCUL6)
Lovemycreditunion.org updated with multimedia
This past July, lovemycreditunion.org was updated with share insurance resources to help credit unions drive members and the media to the Web site for answers to the security of credit unions. The site now has a multimedia feature. An audio podcast between MCUL Director of Public Affairs Mike Bridges and NCUA staff attorney Frank Kressman about NCUSIF was added, as well as a video presentation about share insurance by NCUA board vice chair Rodney Hood. Each podcast answers potential questions and provides some background for those not familiar with credit union share insurance. Click here to access both.
Wall Street Journal touts Credit Unions over Banks
In an August 26 column, The Wall Street Journal columnist Brett Arends wrote that banking customers are better served by moving their money from a bank to a credit union. Arends writes in the column titled,
“For Better Banking, Check Out a Credit Union,” that credit union CEOs aren’t paid millions of dollars and credit unions don’t answer to shareholders. His strongest point is that credit unions didn’t take part in sub-prime lending, so they aren’t looking for help from new shareholders or Washington. Click here to read the full article.
Highlights on CRI
Paper copies of the 2008 CRI Survey have been mailed to every credit union CEO. The mailing went out Sept. 15. The paper copies were sent to help credit unions begin gathering the necessary data. One good way to make the data gathering easier is to split the paper copies up among the departments in charge of each specific area. Beginning Oct. 1, credit unions can input their data online. The survey is just 19 questions long. It has been streamlined to gather the most comprehensive data without overwhelming credit unions. If a credit union gathers the data but can’t input online, data can be mailed to 112 E. Allegan, Suite 800, Lansing, MI, 48933 the MCUL’s Lansing office. Contact MCUL CRI Coordinator Judy Gardi at ext. 458 or jag@mcul.org with any questions.
St. Lucia Partnership Planning Sessions
The third St. Lucia partnership planning session is coming up Tuesday Oct. 14. The planning sessions are being held leading up to a winter St. Lucia trip by Michigan credit unions. Three working groups are looking into a number of topics that will be covered during the winter trip. The groups are focusing on the learning exchange that will take place involving educating St. Lucia credit unions on consolidation and shared branching. The groups are also looking into developing “branding” or marketing materials for the project. The trip is scheduled for March 9-14, 2009. The St. Lucia partnership is a good opportunity for Michigan credit unions to partner with a credit union from St. Lucia and help the movement gain ground in this small Caribbean country. Contact Judy Gardi, CRI Coordinator, at jag@mcul.org if you would like to get involved.
CRI Web Site Now More User Friendly
The CRI Web site has been updated with a more user friendly index. Visitors will have an easier time finding more information about the CRI/Future Vision Committee, CRI Councils or working groups, the St. Lucia partnership or the core CRI programs. The Web site also features more information about the Real Deal initiative. The Real Deal is an outreach framework for America’s credit unions developed by the American Association of Credit Union Leagues (AACUL). Real Deal language is now used by the MCUL in all its CRI programs. The CRI Web site can be found by clicking here.
CRI/Future Vision Committee Updates
The Modest Means Council and the Financial Education Council recently met. The Modest Means Council developed a manual on how to make and manage a Volunteer Income Tax Assistance (VITA) site. This is vital for credit unions that take part in the Just file it! program. The VITA Site Coordinators Manual provides step-by-step guidance for those wanting to set up a VITA site in their credit union or in partnership with another community agency. It is on the CRI Web site and can be accessedby clicking here.
Financial Education Awards
The Financial Education Council updated the financial awards for credit union staff. These awards were previously titled the Youth Achievement Awards. They were changed to include one award for adult financial education and one award for youth financial education. The deadline for nominations is Oct. 31, 2008. More information can be found here:http://www.mcul.org/Award_Programs_669.html
Economic Solutions Council
The Economic Solutions Council will meet Sept. 30 at 10 a.m. at the Michigan Credit Union Center in Plymouth Twp. At 1 p.m. on Sept. 30, a special Economic Solutions Council meeting will be held. The new Dodd-Frank housing legislation will be discussed. The legislation now allows the FHA to guarantee troubled mortgages. This special meeting will highlight areas where credit unions can help members facing foreclosure. Mortgage Center, Michigan First Mortgage and MCUL Staff Counsel Veronica Madsen will make presentations. Any credit union can attend either council meeting. Contact Judy Gardi, CRI Coordinator, at jag@mcul.org if interested in attending.
CUNA Initiatives
CUNA Looking for Voluntary Data Collection
The CUNA Economics and Statistics Department is looking for credit unions to take part in a monthly data collection survey via its Web site. The Financial and Statistical Trends (FAST) program will collect sample data from credit unions across the country, which will help CUNA respond to legislative and media inquiries and provide data on current CU financial conditions. Participating CUs will also get their own statistics with comparison data. For those CUs that participate, each will receive a username and password for the FAST Web site (http://fast.cuna.org) and then each month they are asked to input their statistical data. Click here for a PDF example of what the finished document will look like.
CUNA Board Nominations Due
In early 2009, a CUNA board seat will become available for District 4 which encompasses Michigan, Illinois, Iowa, Missouri Wisconsin and Minnesota. Oakland County CU President/CEO Allan Kemp McMorris’ term is up and he cannot run because of term limits. The seat is classified as a class B seat meaning the next board member will have to come from a credit union with a membership between 19,000 and 69,999. This is a great opportunity to keep a Michigan-specific voice on CUNA’s board and not let another state take the seat. Nominations are due Oct. 17. Click here for the nomination form or here for more details on CUNA’s board and the time commitment involved.
SOLUTIONS
Products, services and educational events offered by the MCUL and Affiliates that are available now to help credit unions be successful and become informed in a constantly changing financial services industry.
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Major Solutions Provided by MCUL - Click Each for More Information
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As part of its rolling semi-annual review to update content, InfoSight’s Loans and Leasing Channels was extensively updated to make the channel a much more valuable resource to users. New topics, revised summaries, Michigan content, and the addition of official resources from consumer lending to member business loans, to appraisals, to UCC Article 9 (secured lending) and many others were added. This update process occurs continually for all channels throughout the year. InfoSight is password protected. The Loans and Leasing Channel can be found on the InfoSight Home Page at: http://mi.leagueinfosight.com/
InfoSight Newsletter Podcast to Feature New ACH RulePrompted by notices from NACHA and a call from the Payments Authority, September’s InfoSight Newsletter features an audio podcast with Cindy Thompson of Payments Authority regarding a new ACH rule on incoming international wires and the related OFAC customer identity implications. This is an important new issue that will require procedural changes for depository institutions in 2009. The podcast is available in the four weekly issues of the Newsletter in the month of September. The Newsletter is a members-only resource, is password protected and is available on the InfoSight Web site at: http://mi.leagueinfosight.com/InfoSight_eNewsletter_Current_5498.html.
Regulators Seek More Training for Supervisory & Audit Committees; MCUL RespondsThrough regular dialogue with state and federal examiners, MCUL knows that there continues to be a need for credit unions to have more information on collections and available options for legal remedies. Additionally, NCUA examiners are finding many small credit unions still need to understand the basics of board and supervisory committee responsibilities and monthly duties. These specific issues and more, as well as a panel discussion with both state and federal regulators, have been addressed at the MCUL Fall Leadership Development Conference, which was held September 19-21 at Grand Traverse Resort. A special Supervisory and Audit Committee Workshop is on the agenda to help volunteers identify and control risks, spot areas of concern and monitor operations effectively. Additionally the Executive Speaker Series included a session on “Strategies to Mitigate Foreclosure Losses.”
Telephone Collections School Provides Resources to Improve Collecting on Outstanding Debt
During these economic times, many credit unions are having more difficulty reaching out to their members to collect outstanding debt. Unlike a collection letter, remarks made on the telephone when placing calls can work to the advantage of the collector. In the upcoming MCUL Telephone Collections School, speaker Steve Peterson will provide instruction in the morning and then work with attendees to place actual calls on delinquent accounts in the afternoon. This session has received outstanding evaluations the past two years and this year moves to Mackinaw City, Oct. 7 at the Best Western. Online registration and details are available at: http://www.mcul.org/MCUL_2008_Executive_Summit_1792.html.
Negotiation Skills Make Credit Union Managers More Effective
Effective negotiating is a powerful, underutilized management tool. Changing the approach in which a message is delivered to others can help maximize the effectiveness of credit union managers and leader. Jason Boles from HR Value Group will provide examples and tips for being a better communicator when he presents the keynote: Internal Negotiating Skills: Conversation as a Management Tool at the 2008 HR & Trainers’ Conference. Attendees will discover how to sell their thoughts and ideas to key internal decision makers, direct reports and those outside their organization. The conference takes place Oct. 15-16 at the Soaring Eagle Casino and Resort. Additional information and online registration is available at: http://www.mcul.org/Home_1837.html
Audio Conference on CU Message Online
As reported earlier in Issues, Initiatives and Solutions, lovemycreditunion.org has been updated with new multimedia. The Web site also has resources for credit union members that reinforce their credit unions are safe and secure. In August, MCUL Director of Public Affairs Mike Bridges put on an audio conference for credit unions outlining some steps to get the message out to members. Among the topics were making a communications plan, informing front line staff and being proactive. If you missed the audio conference, it is available on the MCUL podcast page by clicking here.
Contact and SAS Gazette to be Published
The third quarter editions of Contact and the SAS Gazette will be published in late Sept. The Contact cover story focuses on the federal legislators running for reelection. The story goes inside why it is important to credit unions that each is reelected in November. The SAS Gazette lead story goes in-depth on the subject of identity theft and how SAS credit unions are just as vulnerable as large asset credit unions. The Gazette also has a nice feature on GraCo FCU (MM) and its highly successful backpack program. Look for Contact and the SAS Gazette by Sept. 30. Each is also available online at www.mcul.org.
New Audio and Video Podcasts Available
Two new audio podcasts are available in the MCUL podcast center. MCUL President/CEO David Adams talked with two state lawmakers running for reelection. Rep. Jeff Mays (D-Bay City) and Rep. Tim Moore (R-Farwell) are both credit union friendly candidates running for their third terms. Adams and Mayes talk about the foreclosure crisis and the role of credit unions. Moore and Adams talk about where credit unions fit in the state’s economy recovery. In a new video podcast, Adams speaks with Communicating Arts CU (MW) President/CEO Hank Hubbard. Adams and Hubbard discuss the new CACU Highland Park branch. It’s the first financial institution in that area in 20 years. You can access the video podcast by clicking on the MCUL You Tube channel: http://www.youtube.com/user/MCUL6 The MCUL podcast center can be foundby clicking here.
CUNA is offering 45 webinars in the fourth quarter. The more important topics in the next 30 days are webinars on residential mortgage lending, rates - risk and return and bankruptcy reform. Just like in face-to-face classes, students see and hear a presentation, ask questions of the instructor, and refer to handouts. You need only a speakerphone and computer with Internet connection. Each webinar costs $219. To see a full list of webinars, just click here: http://training.cuna.org/calendar.php?display=webinar.
Major Solutions Provided by CUcorp
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Major Solutions Provided by CUcorp
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The recent announcement from CUNA Mutual Group that it is ending its in house third party administrative services for FSA/HRA/POP accounts effective 01/01/2009 was anticipated by CUcorp. CMG has chosen EBC as the preferred successor for these services. CU HR Solutions has been working with Employee Benefits Corporation (EBC) since March to provide credit unions an upgraded alternative for these services. We have already set up nearly a dozen credit unions with these services and EBC has proven to be an excellent TPA solution provider. The pricing negotiated by CMG for these services is identical to our pricing. We can assist your credit union with these changes very easily and effectively. For more information contact us at 800.262.6285 x580 or email us at support@thecucaregroup.com if your plan FSA or HRA plans renew on 01/01/2009 so that we can discuss these features and benefits to make the transition.
Focus on Staff & CEO Compensation Strategies in the Fourth Quarter
As the year end quickly approaches, efforts turn to staff performance and compensation evaluations. Many credit unions rely on local data or a single survey to set and administer its salary structure. This is not always the most effective way to obtain relevant information. Industry salary information is important as a start however, data from similar or related positions in other industries the credit union completes with is important as well. Jessica Strasser at HRValue Group can assist your credit union by reviewing your salary and compensation structure and work with credit unions to achieve a competitive and fair system. Contact her at 888.272.4598 or at jstrasser@hrvaluegroup.com.
Shared Staffing Compliance Consultants on Board
CU HR Solutions has two compliance consultants hired and beginning work in September. This shared staffing program is designed to assist credit unions by paying for a portion of the consultant’s salary to be its compliance specialist. One consultant will serve three or four credit unions so each credit union would pay 1/3 to 1/4 of the salary and benefits as opposed to each credit union hiring a full time compliance consultant at full salary and benefits. One consultant is positioned to work in the mid-Michigan and northern Michigan area and the other in the metro Detroit and the lower central part of the state. Credit Unions interested in hiring a portion of these consultants time should contact Jim Fournier at jff@mcul.org, Alan Babcock at amb@mcul.org or Jessica Strasser at jstrasser@hrvaluegroup.com for more information.
Credit Union Leagues in PA, MA and LA all OK with CU Policy Pro
CU HR Solutions’ product CU PolicyPro is front and center with several credit union leagues across the country. On Sept. 2, the Pennsylvania league rolled out PolicyPro to all member credit unions. To date, 175 credit unions have been added. The Massachusetts league has tentatively committed to rolling out PolicyPro to its members credit unions on Jan. 2, 2009. The Louisiana league is reviewing a similar type of proposal.
Create-a-Campaign Coming Soon from CU Growth Solutions
CU Growth Solutions (CUGS) will soon be introducing Create-a-Campaign. This new product will provide credit unions with the tools to create their own marketing campaigns. Five different campaign looks will be available with materials for many products and services. Credit unions will be able to access Create-a-Campaign through the CUGS online store, select the campaign look for desired products, select photos and customize copy, click to place the order with materials arriving within 10 days. For credit unions on a tight budget, Create-a-Campaign will be a great product to promote the credit union with high quality and compelling creative. Watch for details coming soon.
Sprint National Credit Union Program Delivers Value to both Credit Unions and Business Members
The Sprint National Credit Union Program introduced a unique business program for mobile solutions and great savings to credit unions and business members of credit unions. For all wireless needs, Credit Unions and their Business Members receive 15% off of their Sprint monthly wireless service fees. In addition, special plans were created just for credit unions and their business members for the popular Blackberry and Mobile Broadband services. With a Sprint Mobile Broadband card enabled laptop, people are untethered from their office to be productive. Whether at a conference, in the airport or hotel, or even telecommuting to save on fuel these days, the Mobile Broadband card provides the connectivity needed. Sprint has personnel dedicated to serve the needs and find the right solution for each credit union and business member. If you would like more information, please contact CUcorp at 800-262-2685 ext 333 or e-mail let@mcul.org.
CUNA Mutual Group
Building Indirect Borrowers into Long-term, Profitable Members
Expanding relationships with indirect borrowers is a major challenge and significant growth opportunity for many credit unions. A CUNA Mutual pilot program showed that members in this underdeveloped member segment have excellent potential to become profitable members. Not only was member feedback generally positive about being contacted by credit unions after an indirect sale—more than one in five of those contacted accepted additional products. “Our cross-sale rate reached 21% in our pilot. That was twice the rate that we projected,” says Heather Thiltgen, VP of Consumer Segment Programs at CUNA Mutual Group. “Even more important, we’re delivering on CUNA Mutual’s commitment to invest in finding solutions for the credit union industry’s business challenges. In this pilot, we collaborated with credit unions to drive innovation.” For credit unions developing strategies for creating deeper relationships with indirect borrowers, there is a free White Paper: “Developing Members from Indirect Borrowers: Lessons Learned.” Go to www.cunamutual.com, then “My Services” and then select “White Papers” listed in the Additional Resources section, or contact your CUNA Mutual Sales Executive at 800-356-2644.
AAA Drivers’ Training Program
AAA Michigan is proud to introduce their Driver Training program as an option for credit union organizations who partner with AAA on Membership and Insurance. This program combines the most current AAA Driver Training research, training materials and skilled staff with the credit union to create a co-branded program highly valued and desired by teen members along with mature members and corporate clients. A first-ever analysis from AAA finds that crashes involving teen drivers ages 15 to 17 cost American society more than $34 billion annually in medical expenses, lost work, property damage, quality of life loss and other related costs in 2006.. For more information on this program contact Sandra Maxwell at (313) 336-0535, or sjmaxwell@aaamichigan.com.
Major Solutions Provided by CU Village
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Major Solutions Provided by CU Village
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Disaster Recovery Plan Consulting
CU Village.com can provide assistance with business continuity efforts by conducting a thorough review of a credit union’s current disaster recovery plan. These efforts include developing policies, procedures, and other documentation that a credit union may need for regulatory compliance and good risk management. In addition, CU Village can perform risk assessments and determine if what has been done in these areas is as effective as it needs to be. For more information on CU Village disaster recovery plan consulting services, contact info@cu-village.com or visit CU Village by clicking here.
IT Policy & Management Consulting
CU Village’s IT Policy and Management Consulting services were developed specifically to help credit unions meet their technology, security, and disaster recovery goals. Their goal is to help you make the most of technology management efforts from assessment to strategic planning. For more information on our IT consulting services, contact info@cu-village.com or visit CU Village by clicking here: www.cu-village.com.
Major Solutions Provided by HRN & HR Value Group
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Major Solutions Provided by HRN & HR Value Group
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Regulatory Affairs
