Volume 25, Number 4

February 28, 2005

HEADLINE NEWS

Carper and Castle Co-Sponsor Bankruptcy Legislation
     Both the Senate and the House have introduced bankruptcy abuse reform legislation. Bankruptcy reform legislation was introduced on February 1 by Sen. Chuck Grassley (R-IA), chairman of the Senate Finance Committee. The bill, S. 256, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, is co-sponsored by Senators Orrin Hatch (R-UT), Jeff Sessions (R-AL), John Thune (R-SD), Mike Enzi (R-WY), Tom Carper (D-DE), and Ben Nelson (D-NE).
     Congress took another step toward reforming U.S. bankruptcy laws after the House introduced a companion bill to the Senate’s bill on February 9. House Judiciary Committee Chairman James Sensenbrenner (R-WI) introduced the House bill, The Bankruptcy Abuse Reform and Consumer Protection Act of 2005 (H.R. 685). The bill already has 60 co-sponsors, including Congressman Mike Castle, (R-DE).
     The new bill is similar to one passed by the House last year. CUNA's top three priorities in bankruptcy abuse reform legislation, which are met by both bills, are:
§         Protecting the ability of credit union members to voluntarily reaffirm their debts with their credit unions;
§         Inclusion of a meaningful "means test;" and
§         Inclusion of mandatory financial education provisions.
     Thanks to the following CU staff and volunteers who wrote thank-you letters to Senator Carper and Congressman Castle for their support of this important legislation: Jack Cable of American Spirit FCU; Duke Strosser of Delaware FCU; Peg Conway, Marie Davis, and Christine Kaczmarczyk of DEXSTA FCU; David Clendaniel of Dover FCU; Anthony Casarino of ICI America FCU; Charles Gleason of Sussex County FCU; and League president Bob Walls.

NCUA Economic Empowerment Summit Coming to New Jersey
     The National Credit Union Administration will sponsor an Access Across America Economic Empowerment Summit in Newark, New Jersey, on Friday, April 8. The Summit will be held at the Wyndham Newark Airport. The free, one-day event will focus on federal resources available to credit unions. Credit unions in Delaware, New Jersey, New York, Connecticut, and Pennsylvania are invited to attend.
     The summit is designed for CU officials, as well as board volunteers. The purpose of the summit is to enhance the abilities of CUs to expand financial services to their members by partnering with other federal agencies and non-profit organizations. Key topics include member business lending, health savings accounts, homeownership, financial education, and serving areas with people of modest means.
     Participating agencies include the Departments of Agriculture, Health and Human Services, Housing and Urban Development, and Treasury. Also, presenting will be the Export-Import Bank of the United States, Small Business Administration, and Neighborhood Reinvestment Corporation.
     For more information or to register for the free Summit, please visit www.ncua.gov or e-mail AccessAcrossAmerica@ncua.gov. Alice Smith at the League office also has information.

Strosser and Hinds on Advisory Panel
Congratulations to Anthony Hinds of DPL FCU and Duke Strosser of Delaware FCU, who have been appointed to a new CUNA Mutual Group Credit Union Advisory Panel. The 41-person panel, which consists of CU CEOs from across the country, will advise CUNA Mutual on issues important to CUs and help to direct the company in designing and delivering high-quality solutions to the marketplace.

NCUA NEWS

NCUA Lending Guideline Changes
The National Credit Union Administration Board during its February 17 meeting approved a final rule concerning loans guaranteed under state or federal loan guarantee programs as well as mobile home and manufactured home loans. NCUA board chairman JoAnn Johnson and board member Debbie Matz voted to approve a rule – NCUA Regulations Section 701.21(e), (f), and (g) – which revises NCUA lending guidelines so that loans with a partial government guarantee, insurance, or advance commitment to purchase a portion of the loan could be made in accordance with the maturity and other terms and conditions set by the government program. A loan for a house trailer, recreational vehicle or boat – that is secured by a first lien and qualifies for the home mortgage interest deduction – would be eligible for a maximum maturity of 20 years instead 12. The change also would permit federal CUs to offer members residential real estate loans – including loans secured by manufactured homes permanently affixed to the land – with maturities of up to 40 years.

Letter to CUs #05-CU-02: Call Report Modifications
This letter details changes to NCUA’s Call Report, Form 5300, and Form 5300SF for the 2005 reporting year. For example, starting with the September 2005 Call Report cycle, NCUA will no longer issue Call Report programs that run on the Windows 95 operating system. Other changes are posted on the NCUA website: www.ncua.gov/data/5300/05March/Mar05RFChanges.pdf

Regulatory Alert 05-RA-02
This alert notifies CUs that the Financial Crimes Enforcement Network (FinCEN) has clarified that under certain circumstances a CU is not required to file a Suspicious Activity Report (SAR) when the CU matches a name on the Specially Designated Nationals list published by the Office of Foreign Assets Control (OFAC). A copy of the FinCEN guidance may be found on the agency’s website: www.fincen.gov/sarguidanceofac.pdf

Regulatory Alert 05-RA-03: FACTA
     This NCUA alert concerns the Fair and Accurate Credit Transactions Act of 2003 (FACTA). Portions of FACTA became effective on December 1, 2004. FACTA amends the Fair Credit Reporting Act (FCRA) to help consumers (i.e. members):
§         Combat identity theft,
§         Establish national standards for the regulation of consumer report information,
§         Assist consumers in controlling the marketing solicitations that they receive, and
§         Restrict the use of sensitive medical information.
     FACTA imposes new obligations on CUs. For example, members may include alerts on their credit reports, the presence of which imposes additional requirements on the users of credit reports. In order to help members clear their credit reports of fraudulent identity theft transactions, CUs must stop reporting on these transactions upon notice of identity theft. In addition, FACTA gives consumers opportunities to learn about their credit score; for example, a CU must disclose a member’s credit score when it is used to evaluate a mortgage application.
     Implementing regulations are being developed and published by the federal regulatory agencies. You can view FACTA-related information on the following FTC website (includes the text of FACTA, FCRA as amended by FACTA, and FTC rules that may apply to credit unions): www.ftc.gov/os/statutes/fcrajump.htm. The full text of NCUA’s Regulatory Alert for FACTA: www.ncua.gov/reg_alerts/2005/05-RA-03.doc.

Rule Relating to Prescreened Offers for Credit or Insurance
The Federal Trade Commission has issued a final rule to require entities that make prescreened offers for credit or insurance to provide enhanced disclosures regarding the consumer’s right to decline, or “opt-out of,” such offers in the future. This rule implements the Fair and Accurate Credit Transactions Act (FACTA) provisions that direct the FTC to issue a rule to make these disclosures simple and easy to understand. The rule will be effective as of August 1, 2005. Model disclosures in both English and Spanish can be found at www.ftc.gov/os/2005/01/050124factafrn.pdf

SYSTEM NEWS

Half Million People Vulnerable to ID Theft
     Nearly half a million people in 50 states, the District of Columbia, and three territories may be vulnerable to identity theft as a result of a yearlong scam netting Social Security numbers and other personal information from the database of ChoicePoint, a company that sells background information on people and businesses. According to an article appearing in the February 22 issue of The News Journal, the number includes more than 1,000 people in Delaware.
     Olha Rybakoff, director of the Delaware Attorney General’s consumer protection division, stated in the article that a recent Federal Trade Commission report estimated that Delawareans lost $2.5 million to identity theft in 2004.
     There are several things that your CU can advise members to do if they suspect they are the victims of identity theft.
     1)   Place a fraud alert on the member’s credit file to let creditors know to contact the member before opening new accounts. Call any one of the three credit reporting agencies to automatically place fraud alerts and to order a copy of the credit report. Phone numbers for the agencies are:
                    »   Equifax: 800-525-6285
                                        » Experian: 888-397-3742
                                        » Trans Union: 800-680-7289
     2) Review credit reports carefully for inaccuracies or inquiries from creditors the member did not initiate.
     3) If the member finds suspicious activity, contact the local police agency and file a police report of identity theft.
    There are several resources that CUs and members can access about identity theft.
§         Privacy Rights Clearinghouse website: http://www.privacyrights.org/
§         CUNA and CUNA Mutual’s Identity Theft Toolkit with links to many more resources:
http://www.cunamutual.com/cmg/freeFormDetail/0,1248,9136,00.html
§         CUNA statement stuffer “ID Theft: How to Prevent It And How to Get Over It,” which can be ordered by calling 800-356-8010, press 3. Ask for item #24209-F6; the cost is $13 per 100 copies.

“If Banks Win, You Lose” Publication in Second Printing
     The demand for the Credit Union National Association (CUNA) publication "If Banks Win, You Lose" has been so great that another press run of 200,000 has been ordered. The first-quarter issue addresses banker attacks and the CU difference.
     The magazine paints a bleak picture of life without CUs if bankers and their trade associations prevail. It also explains why legislators support CUs and the importance of continuing to explain the CU difference to lawmakers. The issue also details the differences between CUs and other financial institutions and debunks bankers' claims about CUs.
     All CU managers/CEOs have received a copy of this publication. To order copies for your members, call 800-356-8010, and dial 4157. Ask for stock #26228. The minimum order is 50 copies at $.55 per copy, with reduced rates for larger quantities.

Petitions/Brochures to Legislators

     Members of seven CUs and the League will visit the offices of our three members in Congress on March 1. During the visit, the teams will discuss regulatory and bankruptcy reform. In addition, they will deliver 8,061 petitions signed by Delaware CU members, and each office will receive a copy of the “If Banks Win, You Lose” brochure featured above.
     Our thanks to the following CUs for passing along the number of petitions listed below; this is a revised tally from the 1/30 issue of TOGETHER.

     American Spirit FCU - 1476
     Chestnut Run FCU - 1354
     Delaware FCU - 1503
     Delaware Alliance FCU - 362
     Delpart FCU - 52
     DEXSTA FCU - 1454
    Dover FCU - 182
     Edge Moor DuPont Employees FCU - 84
     First State FCU - 285
     Newark, Delaware City Employees FCU - 79
     New Castle County School EFCU - 38
     Seaford FCU - 20
     Southern Delaware Postal Employees FCU - 74
     Sussex County FCU - 989
     Wilmington Police and Fire FCU - 68
     Wilmington Postal FCU - 41

Thirty-five states participated in collecting 660,000 petitions from members who support maintaining CUs’ tax-exempt status.

DELAWARE NOTES

The Central Delaware Chamber of Commerce selected DOVER FCU as one of the five outstanding community small businesses for the year. The $188 million asset CU was honored for its community contributions – free financial education sessions and over 300 hours of community service, including road clean-up efforts. On May 12^th, the CU will attend a recognition ceremony sponsored by the Chamber.

Lou Ann Ciesinski, DOVER FCU accounting manager, and David Fravel, branch manager of the credit union’s North Dover branch, are the first participants in the CU’s Leadership Development Program. In addition, the CU held a dinner on January 27 at which 25 employees were recognized for their service and educational achievements. Receiving recognition at the dinner for providing more than 100 years of service were Mary Sylvester (30 years), Jan Stevens (20 years), David Clendaniel (15 years), Stephanie McCaffrey (10 years), Shona Cox (10 years), Karen Simpson (10 years), Mary Warren (10 years), and Karen Beers (5 years).

The Delaware Business Ledger’s “2005 Book of Lists” contains two pages listing all Delaware credit unions, contact information, assets, loans, members, and fields of membership.

The League welcomes the following individuals who have recently been hired or promoted at Delaware CUs:
§         Faith Simpers, LOUVIERS FCU marketing director;
§         Michelle Edgar, DELAWARE FCU vice president of human resources (previously compliance director);
and
§         Enrique Campbell, AMERICAN SPIRIT FCU chief financial officer.

The National CU Foundation has received over $350,000 for use in rebuilding the CU system in tsunami-stricken south Asia. Donations are still being accepted using a form found on the Foundation’s website: www.ncuf.coop.

EDUCATION OPPORTUNITIES

March Quick Bites Calls:
3/3        Making Better Loan Decisions – 11 a.m.-1 p.m., $169
3/8        Reaching & Serving the Hispanic Market – 11 a.m.-noon, $99
3/16      Reinventing the Consumer Lending Experience – 11 a.m.-noon, $99
3/23      Trust Accounts – 11 a.m.-noon, $99
The fee includes unlimited staff participation at your own site. The deadline for registration is one week prior to the session. Call Bernadette to enroll.

One-Hour Compliance Webinars
§ Tuesday, March 1, at 10:30 a.m. – Bank Secrecy Act & Anti-Money Laundering. Fee: $100.
§ Thursday, March 3, at 10:30 a.m. – USA Patriot Act & Office of Foreign Assets Control (OFAC). Fee: $100.
Contact Bernadette to enroll.

CU Council Meetings
§ Mortgage Council – Wednesday, March 16, at 10 a.m. Topic: Reverse mortgages.
§ Cards Council – Wednesday, March 23, at 10 a.m. Topic: Portfolio development.
Each session is free to registered 2005 council members; $65 per person for non-council members.

Fundamentals of Home Equity Lending – Tuesday, March 29, from 8:45 a.m.-1 p.m. at the League office. Rick Menton will cover such topics as underwriting, credit scoring, disclosures, policies, etc. Cost: $125 per person. Registration deadline: 3/14.

Habits of Highly Effective Board Members – Tuesday, March 29, from 5:30-8:30 p.m. at the League office. This session is targeted for CU board members to examine responsibilities, recruitment, ethics, CEO/board relations, etc. Cost: $75; includes a light meal. Registration deadline: 3/14.

Collection Workshop/Council Meeting – Wednesday, March 30, from 9:45 a.m.-3 p.m. at the League office. Topics: communications, handling excuses, repossessions, skip-tracing, policies. Cost: $50 for council members; $125 for non-registered council members. Registration deadline: 3/14.

TOGETHER is published on the 15^th and 30^th of each month by the Delaware Credit Union League, 4 Quigley Boulevard, New Castle, DE 19720. Information to be published should be sent or phoned into the League no later than the Monday of the week preceding the publication date. Telephone: (302) 322-9341 or (800) 292-7875. This newsletter can also be found on the League website: www.dcul.org. Hard copies of the newsletter will be mailed to each credit union CEO/manager for distribution to those without computer access. Readers can receive a reminder when the newest edition is posted to the Web by emailing susan@dcul.org. Editor: Alice Smith (alice@dcul.org).