Volume 25, Number 14

July 30, 2005

HEADLINE NEWS

Acting League President Sends Letter to Delaware Credit Unions
     Jane Bailey, acting president of the Delaware League, has composed a letter to Delaware credit unions, which appears at the end of this newsletter. The letter describes the direction that the League will be taking in the immediate future.
     Bailey moved to the interim position after League president/CEO Bob Walls resigned to become president/CEO of the New Jersey Credit Union League. Her 20-year tenure at the Delaware League began when she served as a data processing clerk. A few years later, she was promoted to services coordinator and most recently served as the executive vice president.
     “The board feels confident of Jane’s ability to fill this role, since she has served as executive vice president during Bob’s tenure,” said League board chairman Jim Everhart.

CUNA’s Future Forum September 24-27
     The Credit Union National Association (CUNA) is once again offering a substantial discount for CUs under $10 million in assets to attend its Future Forum in San Francisco.
     In addition to featured speakers Mike Abrashoff, best-selling author of It's Your Ship: Management Techniques From the Best Damn Ship in the Navy, and Mike Eruzione, captain of the 1980 gold medal- winning U.S. Olympic Hockey Team, this year’s event features nearly 30 different breakout sessions. Issues to be explored in these sessions include strategies for growing consumer loans, hot regulatory issues, members today and tomorrow, and bankruptcy reform.
     The registration fee for credit unions under $10 million to attend the Future Forum is $400; $795 for other CUs. For registration information, visit http://training.cuna.org/on_site/ff_2005/future_forum.html. 
     If you have further questions about the conference, please call (800) 356-9655, ext. 5700.

Delaware Credit Unions Show Their Community Spirit
     Mentoring, walking, selling…these are just some of the ways that Delaware credit unions are helping out their communities. Here’s what some of our credit unions are doing…
     Delaware First FCU recently sponsored “Alex’s Lemonade Stand” to benefit pediatric cancer research. The CU’s quarterly newsletter announced that members and the community have donated $1,798.46 for this cause, which gained national recognition when Afleet Alex, a three-year old colt, captured two-thirds of the Triple Crown this year.
     Mentoring is one of the ways that American Spirit FCU supports young people. Three staff members go once a week to Downes Elementary School to mentor, and recently the CU hosted the Sparrow Run 4-H Club for a tour of the CU. In support of those with health issues, the staff also participates in the American Cancer Society’s Relay for Life and volunteers with Hospice.
     Delaware FCU has a community outreach committee to help organize their events, reports Renee' Thompson. “Through the combined efforts of the committee and supportive staff and members, we raised $5,475.81 for the March of Dimes and $1,891.37 for the Red Cross in support of tsunami victims and their families. Last Christmas, we collected over $2,000 worth of toys for the Marines’ Toys for Tots Foundation. Currently we are holding a “Summer Fun Pak Raffle” for the American Cancer Society in each of our branch locations.”
     Often TOGETHER reports other community involvement activities under “Delaware Notes.” We encourage Delaware credit unions to email or call us with information about the many ways that you support your community. Involvement is extremely important – and fun for members and staff – as shown by the examples above.

COMPLIANCE RECAP 

NCUA Issues Risk Alert: Raising Awareness of Phishing Scams
     The National Credit Union Administration (NCUA) has issued a risk alert, requesting that CUs continue their efforts in raising consumer awareness on phishing schemes. Phishing is the act of sending out spoof e-mails and setting up fake websites that imitate legitimate, trusted companies, such as financial institutions. The goal is to deceive consumers into giving up personal information by making them think their CU wants to confirm information.
     In the letter (05-RISK-02) to credit unions, NCUA Chair JoAnn Johnson points out that “phishing perpetrators” over the last several weeks have expanded their schemes to mimic NCUA’s website and target consumers by asking them to provide confidential information purportedly to verify account registration information or to maintain insurability of accounts. 
     Johnson reminds CUs that the NCUA and other FFIEC member agencies have developed a brochure, “You Can Fight ID Theft,” to supplement member-education awareness efforts on phishing. As outlined in the brochure, the NCUA strongly recommends that credit unions reinforce the following message to their membership:

§         Never provide your personal information in response to an unsolicited request;
§         If you believe the contact may be legitimate, contact the credit union yourself;
§         Never provide your password over the phone or in response to an unsolicited Internet request, and
§         Review account statements regularly to ensure all charges are correct.   

Tax Consequences for Volunteer Travel
     Responding to a request for guidance about the tax implications of travel reimbursements to CU directors, NCUA said while travel payments to federal CU officials and one guest are not considered compensation under NCUA rules, those rules do not address tax matters. The letter (05-FCU-02) recommends that CUs and their officials should consult tax professionals for advice to ensure proper compliance with Internal Revenue Service requirements.

Federal Reserve Board Issues Final Rule Amending Reg DD
     The Federal Reserve Board issued a final rule amending Reg DD and the regulation’s staff commentary. The amendments to the regulation, which implements the Truth in Savings Act, are intended to improve the information provided to consumers when they overdraft their accounts. The rule, effective July 1, 2006, includes the following changes:
§         Requires additional disclosures about fees and other terms for overdraft privilege programs, including disclosures in advertisements;
§         Institutions promoting the payment of overdrafts in advertisements will also be required to disclose on periodic statements the total dollar amount imposed for overdraft fees and the total imposed for returned-item fees, both for the statement period and for the year-to-date, and
§         Expands the current prohibition against misleading advertisements for new accounts to cover communications with current accountholders about existing accounts.

I-9 Form Gets Rebranded
     In keeping with changes made when the U.S. Department of Homeland Security was created, the Federal government has updated the Employment Eligibility Verification Form (Form I-9). The changes eliminate references to the former Immigration and Naturalization Service (INS) and its parent agency, the Department of Justice.
     Aside from name changes, Form I-9 is the same as the 11/21/91 edition. The edition date on the rebranded Form I-9 reads (Rev. 05/31/05)Y. Forms that are currently valid have an edition date of either (Rev. 5/31/05)Y, (Rev. 05/31/05)N, or (Rev. 11/21/91)N in the lower right corner of the form.
     All U.S. employers are responsible for completion and retention of Form I-9 for each individual they hire for employment in the United States. This includes citizens and non-citizens. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-9. The form must be kept by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials.
     The form can be viewed or downloaded at  http://uscis.gov/graphics/formsfee/forms/files/i-9.pdf.

SYSTEM NEWS

July Compliance Challenge Tackles the Bank Secrecy Act
     "BSA"--it doesn't just stand for Boy Scouts of America anymore. Far from it, says this month's Compliance Challenge from the Credit Union National Association (CUNA). The acronym now refers first and foremost to the Bank Secrecy Act. Combine BSA with some anti-money laundering issues and you have one of the most difficult compliance issues currently facing credit unions.
     The challenge – which is part of this week’s managers’ mailing – poses 13 questions about some tricky situations credit union managers and staff can come up against trying to fulfill reporting requirements of the BSA. For instance, would your staff know what to do in the following situations?
§       The compliance officer at Raven's Federal Credit Union learned during an audit that a member made a $15,000 cash deposit at the teller lane but no Currency Transaction Report (CTR) was completed. The transaction occurred over two months ago. Should the compliance officer file the form late?
§        At CUNA's recent BSA Compliance Conference, the speaker from the Office of Foreign Assets Control said that a credit union's OFAC compliance program should be risk-based like its Bank Secrecy Act compliance program. What should a credit union consider when conducting a risk assessment for compliance with OFAC regulations?
§        The compliance officer for Toyo Federal Credit Union received a request from the Department of Justice (DOJ) for supporting documentation on a recent SAR filing. Should the compliance officer provide this documentation without a subpoena or court order?  

New Tool Protects Soldiers’ Credit
     Members of the military now have a way to help minimize the risk of identity theft while they are deployed. An “active duty” alert on a credit report requires creditors to take extra steps to verify a person’s identity before granting credit in his/her name. When military personnel ask for an “active duty” alert, they receive a copy of their credit score and their names are removed from prescreen offer lists for credit cards or loans. The Federal Trade Commission has issued a Consumer Alert on this.
     Military personnel can put an alert on their credit reports when they are away from their usual duty stations. The “active duty” alerts are designed to help reduce the risk of identity theft by making it more difficult to grant credit to deployed members of the armed forces while they are away. Anyone with a credit inquiry may try to contact the military persons directly, but because this may be impossible while they are deployed, the law allows members of the military to use a personal representative to place or remove an alert. The alerts are effective for one year, unless there is a request to remove them sooner. Another alert can be placed if deployment lasts longer than a year.
     Anyone placing an alert should be ready to provide proof of identity, including name, Social Security number, address, and other personal information. Members of the military can place an “active duty” alert or have one removed from their credit report by contacting any one of these three consumer reporting companies:

§Equifax: 800-525-6285; www.equifax.com

§Experian: 888-397-3742; www.experian.com

§TransUnion: 800-680-7289; www.transunion.com

     Whichever company is contacted is responsible for contacting the other two and must give the service member a copy of his/her credit score. All three companies will add the alert once one company is contacted. Anyone who places an alert should remember to update the contact information if it changes before the alert expires.
     In addition to alerting creditors about deployment, placing the alert also removes the service member’s name from nationwide consumer reporting companies’ marketing lists for pre-screened offers of credit and insurance for two years.
     The new right to place an “active duty” alert on a credit report comes from amendments to the Fair Credit Reporting Act (FCRA). To learn more about identity theft and credit rights under the FCRA, visit http://www.ftc.gov/credit. Any member of the armed forces who has a consumer complaint can file it online at http://www.consumer.gov/military.

DELAWARE NOTES

Congratulations to Megan Eagan, member service rep at DELAWARE FCU’s New Castle branch for being named the CU’s employee of the year.

With an eye on reducing employee turnover and luring top talent, CUs are spending more than ever for their “most valuable players.” Credit Union Times recently looked at CUs that are allocating the most dollars for salaries and benefits. LOUVIERS FCU ranked 40^th on the list of the top 50 CUs over $25M in assets.

DEXSTA FCU announces the following promotions: Herb Brubaker – collections manager; Addy Nye – card services manager; Susan Robinson – accounting manager; and Jennifer Zeberkiewicz – marketing manager. In addition, Patrick O’Halloran has been hired as the new information technology manager.

Our condolences to the family and friends of William DeLuca who died last week. He served for over 20 years as a volunteer and board member of E.W.O.D. FCU.

The following individuals recently attended national conferences:
§         CUNA Mutual’s Discovery Conference: Anthony Hinds, DPL FCU; Duke Strosser, Delaware FCU; and Jane Bailey, DCUL
§         CUNA’s Marketing Management School: Carole Langiu (Update) and Karen Beers (Part II), Dover FCU
§         CUNA Management School – Year 1: Melba Saxton, Chestnut Run FCU 

Fall Credit Union Vehicle Sale – October 27-29

Delaware credit unions that participated in the April sale have been sent information packets about the upcoming fall car sale. If your CU is interested in participating in the fall sale and did not receive the registration packet, please contact Susan Fallon at the League office.
 

EDUCATION OPPORTUNITIES 

Bank Secrecy Act Classroom Training. This three-hour session is suited for all CU staff and will be offered at three different times and locations:
    1. Monday, August 22 – 4-7 p.m., Rm. 407A, Del Tech Conference Center, Dover
    2. Tuesday, August 23 – 9 a.m.-noon, League office, New Castle
    3. Tuesday, August 23 – 5:30-8:30 p.m., League office, New Castle
The training will be provided by Kristen Tatlock and NCUA. Fee: $50 per person, which includes instruction, handouts, and a light meal. Certificates given to reflect completion of this annual BSA training requirement. Regis. deadline: August 8.

League Council Meetings in August
8/17      Mortgage Council: Compliance and Interest-Only Loans – 10 a.m.-1 p.m.
No fee for council members; $65 for non-council members. Regis. deadline: August 10.

August QuickBites Teleconferences
8/2        Delivering Difficult Feedback, 11 a.m.-noon
8/4        Business Development, 11 a.m.-1 p.m.
8/10      Sales Training: Closing the Sale, 11 a.m.-noon
8/18      Website Compliance, 11 a.m.-noon
8/23      Teambuilding, 11 a.m.-noon
8/31      Best Lending Practices, 11 a.m.-noon
The fee for each one-hour session is $99; the two-hour session is $169. Deadline to register: one week prior to the session. Call Bernadette to enroll. Summer registration special: Target gift card!

One-Hour BSA Compliance Webinars
§         Wed., Aug. 10, at 2 p.m. – Bank Secrecy Act
§         Thurs., Aug. 18, at 10 a.m. – USA Patriot Act and OFAC
§         Tues., Aug. 23, at 10 a.m. – CTR and SAR Form Filing Details
§         Tues., Aug. 23, at 2 p.m. – OFAC, CTR, and FinCEN Exemption Form Filing Details
The fee for each session is $100. For more information or to enroll, phone Don Baumann of the co-sponsor Verisure at 315-638-4334.