HEADLINE NEWS

Free Annual Credit Reports Begin September 1
     Delaware residents will be eligible for a free annual credit report beginning September 1, in the fourth and final rollout phase set by the Fair and Accurate Credit Transactions Act of 2003 (FACTA). The final group includes all New England and Mid-Atlantic states as far south as North Carolina, in addition to all U.S. territories and possessions.
     All consumers may request a free credit file disclosure, more commonly called a credit report, once every 12 months. Consumers have three options to obtain the free report:
§         On the web: www.annualcreditreport.com
§         Toll free: 877-322-8228
§         By mail:
            Annual Credit Report Request Service
            P.O. Box 105281
            Atlanta, GA 30328-5281
Annualcreditreport.com is the only authorized source for consumers to access their credit reports online for free, and consumers are advised to use caution with offers from unsolicited emails.
     Consumers are encouraged to view their credit reports regularly to check for inaccuracies or signs of identity theft. For information on how to dispute any errors, the Federal Trade Commission has published a new “facts for consumers” brochure, Your Access to Free Credit Reports, available at http://ftc.gov/bcp/conline/pubs/credit/freereports.htm.
 

Payroll Deductions Okayed for Staff CULAC Donations
     Any credit union employee who is a member of that CU and wants to make regular contributions to the Credit Union Legislative Action Council (CULAC) is now able to do so through payroll deduction.
     The Federal Election Commission (FEC) recently approved a new rule, effective August 22, 2005, that would allow CU employees to contribute to political action committees, like CULAC, via payroll deduction.
     The new FEC rule change allowing payroll deduction for CU employees doesn’t just apply to credit unions; it applies to all trade associations. In fact, the new rule was proposed by America’s Community Bankers – and you can rest assured that they and other major bank trade associations will be soliciting bank employees through payroll deduction for their own PACs.
     For more information on how to participate in this new program, contact Alice at the League.

Advanced Teller Training 9/21
     The League is offering an Advanced Teller Training course on Wednesday, September 21, at the League office in New Castle. This program, led by Mary Moulds, is designed to enhance the skills of experienced tellers and those that have completed the Basic Teller Training that Mary presented in 2004 and this spring.
     To your members, your tellers are your credit union. Having poorly trained front-line employees costs you potential business and higher turnover rates. This session will have an emphasis on cross-selling, updates on compliance, robbery and security issues, advanced cash-handling techniques, and team-building skills.
     The fee is $150 per person for the full-day session, with fourth and succeeding registrants coming for half-price. Regis. deadline: September 14.

COMPLIANCE RECAP

Bank Secrecy Act Training Well Received by Participants
     The recent League training session held in August on the Bank Secrecy Act gathered high marks from participants. Presented by Kristen Tatlock of the Virginia CU League and NCUA staff, the session reviewed areas that examiners will be looking for during upcoming examinations. NCUA has identified the most common BSA violations:
§         Lack of written or board-approved policies which cover all aspects of BSA regulations including the member (customer) identification program required by the USA Patriot Act.
§         Absence of independent testing. Annual independent testing of your CU’s compliance with Bank Secrecy Act and member identification program regulations is required (refer to NCUA Letter to CUs 03-CU-16).
§         No evidence of staff training for BSA compliance, reporting, and recordkeeping.
§         Improperly completed Currency Transaction Reports (CTRs).
§         Not reviewing 314(a) requests from FinCEN.
     If your CU did not attend the training or wants additional information about any of these matters, the League has developed a bibliography of BSA resources and further training opportunities. This resource was distributed to all session participants and sent to the managers/CEOs of CUs not in attendance. Additional copies or other information can be obtained from Susan at the League office.

Currency Transaction Resource
     The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has released guidance in the form of frequently asked questions (FAQs) concerning completion of Part II of its Form 104 on currency transactions. Under the Bank Secrecy Act, reports must be filed on currency transactions greater than $10,000. The FinCEN FAQs answer such questions as what should be entered on the “cash in” and “cash out” lines on the form and how foreign currency affects reporting. To see the FinCEN FAQs, go to: www.fincen.gov/faq08122005.pdf

Compliance Challenge Addresses Credit Card Minimum Payments
     The most recent issue of CUNA’s Compliance Challenge deals with the question of whether credit unions must raise their credit card minimum payment rate.
     According to the Challenge, a number of CUs have read articles or seen news broadcasts concerning large banks that have been raising their credit card minimum payments. This activity has been the result of joint guidance issued by the OCC, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision in early January 2003 concerning credit card account management, risk management, and loss allowance practices. The guidance suggested that credit card customers should be paying enough each month to cover all fees, interest, and at least 1% of the outstanding balance on their accounts.
     This guidance does not apply to credit unions, because NCUA has not issued similar guidance for CUs. Therefore, credit unions are not required to increase their credit card minimum payments. The new bankruptcy law changes to Regulation Z also will not require any financial institution to increase its minimum payment rate.

New League Resources
     The League has recently added the following resources to our lending library. Call Bernadette at the League to borrow any of these resources.
§         Bank Secrecy Act Training Video. This 42-minute videotape (available with leader’s guide and student workbook) has eight sections on cash reporting requirements, CTR/SAR forms, and know your member (CIP) rules. Delaware CUs may borrow the video and leader’s guide for staff training, but each CU is asked to purchase at least one copy of the workbook (cost: $35).
§         CUNA’s 2005-2006 Credit Union Environmental Scan. This highly rated report provides insights into eight critical areas and more than 50 topics important to CUs as they pursue strategic planning.
§         Taking It to the Next Level Executive Report. This report is based on a three-year research study of 1711 credit unions from 1992-2002.The study identifies 11 CUs that took their performance to the “next level” with dramatic asset growth and profitability.

NCUA OPINION LETTERS
The following is a summary of recent NCUA opinion letters. The number in parentheses after the subject is that given to the letter by NCUA, as well as the date of the issuance, and can be used when requesting copies of the letters. NCUA opinion letters are available on NCUA’s website (www.ncua.gov), on the CUNA website (www.cuna.org), or by calling Susan Fallon at the League office.

Charitable Contributions to Credit Unions (2-25-04; 04-0223) – In this opinion letter, NCUA determined that a federal CU may make a donation directly to another credit union. NCUA explained that, while its charitable contributions and donations rule expressly recognized the permissibility of donations to tax-exempt entities under 501(c)(3) of the Internal Revenue Code that support CU development, it does not preclude federal CUs from making donations directly to credit unions. Credit unions have a long tradition of helping each other through such means as non-member deposits, correspondent services, and contributions of staff, equipment, and money. NCUA has long recognized a federal CU’s authority to make charitable contributions and donations under its incidental powers authority.
     In another letter (04-0133, dated 5-3-04), NCUA stated that federal CUs may form a non-stock, non-profit charitable foundation to support charitable causes within the community in which the federal CU operates.

Permissibility of Requiring Joint Account Owners to Establish Separate Membership Accounts in Order to Be Members (5-3-04; 04-0257) – Federal CUs may adopt a policy that requires someone who wants to be a member to establish his or her own share account. However, if a federal CU has adopted the October 1999 Federal Credit Union Bylaws, it must delete the current provision addressing joint membership, which it can do without NCUA approval. The current NCUA Bylaws provide that “[O]wners of a joint account may both be members of the credit union without opening separate accounts. For joint membership, both owners are required to fulfill all membership requirements including each member purchasing and maintaining at least one share in the account.”

Risk-Based Credit Card Accounts (5-17-04; 04-0325) – In response to an inquiry on behalf of a federal CU, NCUA stated that a federal CU may establish different interest rates for member credit card accounts based on differences in credit scores. NCUA noted that although current law does not require that a federal CU disclose the basis for its rate determinations, federal CUs using risk-based pricing have additional disclosure obligations under the Fair & Accurate Credit Transactions Act that became effective December 2004. A risk-based pricing model enables a CU to make credit cards available to more of its members, including those with less-than-perfect credit histories. A federal CU must base its pricing determinations on evaluation of legitimate credit risk and not on any discriminatory basis prohibited by the Equal Credit Opportunity Act (Regulation B).

Bankruptcy Reform: Information for Members and Staff
     CUNA statement stuffer explains new bankruptcy law. With almost every new law, consumers are bombarded by messages from both advocates and detractors of the change, which can muddy their understanding of how the changes will truly affect them. Because the recently passed Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is no exception, CUNA created a new statement stuffer to provide a clear and unbiased explanation of how the law will affect credit union members.
     The "What Bankruptcy Reform Means to You" statement stuffer (stock # 25113) explains the three key elements of the new law. For more information, go to www.buy.cuna.org and type "stuffers" in the search box or the stock number in the product finder box. To order through CUNA Member Service, call (800) 356-8010, press 3, and use the stock number as a reference.
     Collection council will discuss new law. The September 27^th meeting of the League collection council will be led by attorney Christopher Pippett. Mr. Pippett will cover the new bankruptcy law: reaffirmation agreements, treatment of secured claims in Chapter 13, eligibility of debtors, the automatic stay, non-dischargeability, and counseling requirements. The session, which will be held from 10 a.m.-noon at the League office, is free to registered council members and $65 for others. The registration deadline is September 20. 

DELAWARE NOTES

Delaware CUs have lost two long-time volunteers in recent weeks. Walter Snyder, active for 40 years at the E.W.O.D. FCU as a board member and secretary, passed away in early August at the age of 90. NEW CASTLE COUNTY DELAWARE EFCU board member Charles Jackson passed away on August 23. Mr. Jackson, who was still an active volunteer, had been a board member for almost 20 years.

WILMINGTON POSTAL FCU has recently moved its offices from the Hares Corner postal facility to 6 Lynam Street in Newport. The CU’s phone number is 302-633-6480; fax number 302-633-6481. The CU also has new office hours: Monday-Friday – 7:30 a.m.-3 p.m. The CU will be open on Tuesdays until 4:30 p.m.

We are happy to report that Sam Simpson, manager of the DUPONT STINE-HASKELL EFCU, is now recuperating at home after surgery in July. Sam has even made a few visits to the CU in recent weeks. Call the League office if you would like Sam’s home address.

LOUVIERS FCU has again been ranked as a “peak performing CU” in its asset size by the Credit Union Journal. The CU was ranked #10 for credit unions between $100-$250M in assets in the category of “return to savers” during the first quarter of 2005. “Return to savers” is the first component of Callahan & Associates’ “return to the member” statistics, and it measures how well a CU is doing in providing deposit services back to members. In addition, on July 29, 2005, the Credit Union Analyzer website featured Louviers FCU as the “credit union of the day” under the week’s hot topic of productivity.

Mid-Atlantic Corporate FCU has announced that two Delaware CUs recently began using the corporate’s Zephyr® ACH files/returns service: FIRST STATE FCU and DELAWARE STATE POLICE FCU.

EDUCATION OPPORTUNITIES

Advanced Teller Training – Wednesday, September 21, from 9 a.m.-4 p.m. at the League office. This program, led by Mary Moulds, will cover cross-selling, updates on compliance, robbery and security issues, advanced cash-handling techniques, and team-building skills. Cost: $150; half price for fourth and succeeding registrants from one CU. Regis. deadline: September 14.

League Council Meetings in September
9/27      Collection Council: New Bankruptcy Law – 10 a.m.-noon. No fee for council members; $65 for non-council members. Regis. deadline: September 20.

September QuickBites Teleconferences
9/8        Management Issues, 11 a.m.-noon
9/15      Share Account Administration, 11 a.m-1 p.m.
9/20      Robbery & Security Awareness, 11 a.m.-noon
9/29      Marketing: Creating a New Buzz, 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.  

One-Hour BSA Compliance Webinars
§         Thurs., Sept. 8, at 2 p.m. – Bank Secrecy Act
§         Fri., Sept. 9, at 10 a.m. – USA Patriot Act and OFAC
§         Tues., Sept. 20, at 10 a.m. – CTR and SAR Form Filing Details
§         Tues., Sept. 20, 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.

Annual Business Mixer Golf Outing -- Tuesday, October 4, at the Wild Quail Golf Club in Wyoming, DE. The cost to participate in a four-person scramble is $85 per golfer, which includes greens and cart fees and lunch. Registration is limited to the first 100 players. Registration deadline: September 30.