Volume 26, Number 19                                     October 15, 2006

HEADLINE NEWS

Dick Stoops Retires After 25 Years with Sussex County FCU
     The family, friends and credit union colleagues of Richard “Dick” Stoops celebrated his retirement at a luncheon held on September 30.
     Dick spent over 25 years at the CU, starting in April 1981 as the manager of Nylon Capitol FCU, whose membership included the employees of the DuPont Plant in Seaford. He retired at the end of September as the CEO of Sussex County FCU, newly named when the CU expanded its field of membership to Sussex County. Previously, Dick served 11 years as the manager of General Foods FCU in Dover.
     In reflections on his credit nion service, Dick stated that his 36 ½ years “have been very rewarding, and it is gratifying to see all the people we have helped.” Dick reminisced about how CUs in the 1970s were “mom and pop organizations who gave loans at 12% and interest at 6%.”
     Despite the increasing complexity of managing a CU today, Dick paid tribute to his fellow Sussex County FCU colleagues for his success. “The first two people I hired when I came to the CU are still there – Barbara Scott and Sherry Shockley. I had big shoes to fill as I succeeded Carlton Tull as manager and worked with Cecil Wilson as board chairman. The success I’ve had belongs to many of you in attendance – management, staff, board members, and friends from other credit unions.” Ending his comments with typical humor, Dick offered, “But I take credit for any failures.”
     Dick was recognized for his role in helping the credit union system when he was named Delaware’s first “Credit Union Professional” in 1992. During his career he also served eight years on the Delaware Credit Union League’s board of director: 3 years as treasurer, 2 years as vice president, and 6 years as annual meeting chairman. He also served on the League’s Governmental Affairs Committee and the Federal Reserve Credit Union Advisory Board.
     Although Dick plans to spend a lot more time with his family and playing golf, he still intends to stay involved with credit unions – in November, he will again be the League’s instructor for a basic accounting class. Best wishes, Dick!

Report and Remittance of Unclaimed Property Due November 10
     All credit unions are required to report to the Delaware State Escheator at the Bureau of Unclaimed Property by November 10, 2006, certain funds that have remained unclaimed for five years (i.e. June 30, 2001). Unclaimed property refers to various types of personal property of Delaware residents that have been abandoned for five years or more, including share and share draft accounts, uncashed share drafts, dividends, etc.
     Every Delaware CU, regardless of whether it holds unclaimed property, must file a copy of Form AP-1 (Report Verification), which provides a summary of the CU’s report and which must be signed and verified by a CU officer. An additional itemized form must be completed if you hold unclaimed property. A preliminary report was due in August, and the final report and remittance of monies in any such accounts are due by the November 10th date. Checks should be made payable to the “Delaware State Escheator” and mailed to P.O. Box 8931, Wilmington, DE 19899.
     Unclaimed property forms and a booklet describing the process for submitting unclaimed property is available from the League or online at http://www.state.de.us/revenue/default.shtml (click on “unclaimed property”).

COMPLIANCE RECAP

New NCUA Share Insurance Rules
      The National Credit Union Administration (NCUA) Board adopted a final rule to amend the share insurance rules, which will incorporate recent amendments to the Federal Credit Union Act (FCUA). The final rule will:
•     Increase the share insurance limit from $100,000 to $250,000 for Individual Retirement Accounts (IRAs) and Keogh Plan accounts.
•     Define the “standard maximum share insurance amount (SMSIA)” as $100,000, except for the retirement accounts described above. (The purpose of using the term SMSIA, instead of a dollar amount, is to avoid having to change the dollar limit in the rule each time there is an inflation-adjusted change.) This new definition does not change the insurance limit.
•     The insurance limit has been $100,000 for all types of accounts since 1980. Beginning in 2010, and in each subsequent five-year period thereafter, NCUA and the Federal Deposit Insurance Corporation (FDIC) will jointly consider whether the SMSIA and the equivalent amount for bank deposits should be adjusted for inflation.
•     Provide pass-through coverage to each participant of an employee benefit plan, but will limit acceptance of shares in these plans to insured credit unions that are well capitalized or adequately capitalized. NCUA’s interpretation of the new deposit insurance reform law is that it has authority to allow full insurance coverage for all participants in an employer benefit plan, even if a participant is not a member of the credit union in which the account is maintained.
•     Incorporate an NCUA Office of General Counsel legal opinion regarding “529 Plans,” such as prepaid tuition programs that educational institutions create and tuition savings programs that states sponsor. Under NCUA’s opinion and the final rule, participants must be members of the credit union. These accounts will be insured as single ownership accounts under the share insurance rules that cover accounts held by agents or nominees. Such accounts will be aggregated with all other individual accounts that a participant has at the credit union and insured up to the SMSIA.  NCUA cautions that careful titling is essential to ensure individual account coverage.
•     Provide for insurance coverage for shares denominated in foreign currency and for conversion of foreign currency to U.S. dollars before an insurance payment is made as a result of a credit union’s liquidation.
     The final rule is effective October 26, 2006. 

October 26: Not the Effective Date for the NCUSIF Logo
     The preceding October 26 effective date for share insurance rules does not involve changes that are being made to the National Credit Union Share Insurance Fund (NCUSIF) logo and signage, CUNA’s compliance department reminds credit unions. The NCUA has not yet approved a final rule addressing the logo changes mandated by the new deposit insurance reform law. There has been some confusion by CUs on this issue.

NCUA Letters to CUs
    The following letters can be found on NCUA’s website at http://www.ncua.gov/letters/letters.html.
•     NCUA Letter to CUs 06-CU-14. This letter has two attachments that deal with the revised Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) Manual.
•     NCUA Letter to CUs 06-CU-15. Credit union financial trends for June 2006 are posted in this letter.
•     NCUA Letter to CUs 06-CU-16. This letter alerts FCUs to the final interagency guidelines on risks associated with nontraditional residential mort-gage products. The letter discusses prudent underwriting and risk management practices for nontraditional mortgage loans, which allow borrowers to do such things as to defer repayment of principal and sometimes interest. It also details the need to ensure consumer understanding of loan terms and underlying product risks.

Does Your CU Have a Pandemic Disaster Procedure?
     If avian flu, influenza or another virus infects your community, will your credit union be ready? If you have no plan in place, check out helpful links on the Disaster Preparedness section of CUNA's website. In addition to providing information on pandemic flu planning and supplies, the webpage also links to the state of  Delaware’s pandemic procedures at http://www.dhss.delaware.gov/dhss/dph/files/depanfluplan.pdf. Ensure the safety of your members and your employees by using these valuable resources to create your own pandemic disaster procedure.

CU SYSTEM NEWS

A Beautiful Day for the Delaware League Golf Outing
     Forty-nine golfers converged on the Frog Hollow Golf Club in Middletown, Delaware, on a beautiful sunny October day for the Delaware Credit Union League’s Annual Business Mixer Golf Outing. The purpose of this event is to provide the League’s business partners and associates the opportunity to mingle with credit union leaders in a relaxed and casual setting.
     CUNA Mutual Group was on hand again this year to sponsor a longest drive prize hole. Representatives Paul Butler and Sterling Nowka provided golf balls and served each foursome mimosas as they approached the tee. Winners of this hole were Tom Pritchard of Pipefitters FCU and Joyce Swanson of Experian. Dick Stoops and Sussex County FCU provided Kevin Oakes of DPL FCU and Sandy Shenk of the Pennsylvania Credit Union Association with handmade putters for being the male and female closest to the pin.
     Mid-Atlantic Corporate FCU sponsored the beverage cart as their Vice President of Administration Lori Gall worked diligently to keep our golfers hydrated.
     Other associates in attendance were from Liberty Checks and Services, Fidelity National Information Services, and Overton & Associates.

    
The tournament’s winning foursome was Bob Oakes, Anthony Hinds, Wayne Needles, and Kevin Oakes of DPL FCU (pictured above).

     Second place went to Don DiMatteo, Tom Pritchard, Paul Torbeck, and Ken Welch of Pipefitters FCU.
     David Clendaniel, CEO of Dover FCU, was the 50-50 winner and generously donated his winnings to CULAC. The proceeds from the sale of mulligans will go to the League scholarship fund.
     Thanks so much to everyone who helped make this a special and successful event.

Delaware FCU Is Now Del-One
     Delaware FCU has introduced a new trade name, logo, and tag line. The new name, Del-One, was chosen to help differentiate the CU from other financial institutions and to alleviate confusion with other Delaware-based CUs, according to the CU’s quarterly newsletter. The new “tree” emblem – which replaces the outline of the state of Delaware – reflects CU values such as growth, strength, stability, standing tall in the face of adversity, and the desire to branch out to the underserved. The new tag line, “The One Way to a Better Life,” reiterates the CU’s commitment to helping members reach their goals through sound financial practices.
     Delaware FCU’s announcement reflects NCUA's policy on charter names as set forth in the NCUA Chartering and Field of Membership Manual. A federal credit union can have only one charter name, which must be used on all official or legal communications or documents. However, as discussed in an opinion letter dated September 22, 1997, an FCU may use a trade name in advertising.

Delaware Mourns Loss of CU Pioneers
     Two individuals who served their CUs for many years have died in the past several weeks.
     Margaret “Peggy” Yost was the office manager for Southern Delaware Postal Employees FCU for years before retiring in 1999. She worked alongside her husband of 56 years, Richard “Dick” Yost, who was the CU’s manager.
     Paul DiStefano is remembered for many years of dedication to the members of EWOD FCU. Paul joined the CU on January 13, 1971. He was a member for 35 years and an officer for 31 years. He was a member of the credit committee from 1975 to 2006, and he served as the treasurer from 1991 to 2005.

Future Forum Is Now America’s CU Conference and Expo
     “America's Credit Union Conference & Expo" is the new name of the Credit Union National Association's (CUNA) annual educational conference for the nation's credit union movement. The conference – which takes the place of the CUNA Future Forum – will be held in Las Vegas June 3-6, 2007. CUNA changed the name to reflect CUNA's national reach and the association's commitment to the movement in providing a national forum to discuss and examine the myriad issues facing the movement. For more information, go to http://www.training.cuna.org/ or call 800-356-9655, ext. 4249.

DELAWARE NOTES

DEXSTA FCU is hosting a Community Fall Safety Fair on Saturday, October 28, from 10 a.m.-1 pm. at the CU’s Prices Corner branch. Free activities will include child fingerprinting/DNA collection, child safety seat inspections, fire prevention information, and safe driving and fraud/identity theft tips. Free smoke detectors, flashlights and candy will also be distributed. WDEL will host their Consumer Hotline Show with Joe Thomas live at the event.
     DEXSTA is already gearing up for its third annual scholarship program. The CU awarded three $1,000 scholarships in 2006.

Congratulations to NEW CASTLE COUNTY DELAWARE EFCU president Barbara Arrowsmith who became a grandmother to twins – Vaughn and Cadence – on October 9.

C.U.DOKU puzzle #5 is posted on the League website, www.dcul.org. Congratulations to the last two winners: Honey Sharp of FIRST STATE FCU and Nancy Glessner of CHESTNUT RUN FCU.

PIPEFITTERS FCU recently distributed a membership survey to 1200 of their members and got back 300 responses! President Nancy Gregory stated that the success might be attributed to keeping the survey short (11 questions) and providing a business return postage-free envelope. The results were published in the CU’s newsletter.

Staff and member contributions netted over $3100 for the American Cancer Society, as DELAWARE FCU (DEL-ONE) hosted a basket raffle and bake sale. The CU also participated in Millsboro’s 12th annual Festival Hispano in August.

Individual with office and project management experience seeks CU position. Some experience with collections. Ask for resume #10-09-06.

Please contact Ruth Lawley at the League office for copies of any job application resumes.

EDUCATIONAL OPPORTUNITIES

October/November QuickBites Teleconferences
One-hour sessions – 11 a.m.-noon
•     10/26 Serving Young Adults
•     10/31 Media Buying
•     11/8   Improve Your Lending
•     11/16 Flood Insurance Lending
•     11/21 How to Develop a SEG Ambassador Program
Two-hour sessions – 11 a.m.-1 p.m.
•     10/18  ALM Implementation
•     11/29  Fair Credit Reporting Act/Fair Debt Collection Act Compliance

The fee for the one-hour sessions is $99; for two-hour sessions, $169. Deadline to register: one week prior to the session. Call Bernadette Hines to enroll.

Asset/Liability Management (ALM) 101 – Thursday, October 26, from 5-9 p.m. (light meal at 4:30 p.m.). Designed for new CU managers/CEOs, controllers, and individuals who want a basic under-standing of ALM and interest rate risk. This session will also be offered at the Volunteer Conference (see below). Fee: $80 per person. Registration deadline: October 18.

Tenth Annual Volunteer Leadership Conference – October 27-29 at the Clarion in Ocean City, MD. Fee: $275 for all day Saturday and half-day Sunday sessions, plus breakfast, lunch, and receptions. Guest/spouse fee is $60. Conference space still available; the Clarion Hotel may have a waiting list.

Basic Credit Union Accounting Course – On consecutive Monday nights from 6-8 p.m. at the League office. The course will run from November 6-December 11. Taught by Dick Stoops, the course will be based on the two STAR accounting modules, and the price of $350 per person includes the books. Registration deadline: October 16 to allow time to order course materials.

Annual IRA Training – 1) Essentials Workshop – Tuesday, November 28 and 2) Advanced Workshop – Wednesday, November 29. Both sessions run from 9 a.m.-4:30 p.m. at the League office. Topics: IRA fundamentals, contributions, distributions, transfers/rollovers, tax reporting, and the death claim process. Participants are asked to bring hand-held calculators to both sessions. Cost: $235 per session. Registration deadline: October 26 (this early deadline is for advanced planning; it may be necessary to change locations due to room capacity requirements).

Washington/State Legislative Update
October 2006

Regulatory Relief Passes Congress
            Credit unions can claim a victory for the regulatory relief bill Congress passed before adjourning for the election. The bill, S. 2856, was based on the Senate’s original regulatory relief bill which contained four specific provisions that directly affect credit unions:
            (1) Allow check-cashing and money-transfer services to be offered to nonmembers within a credit union's field of membership;
            (2) Raise from 12 to 15 years the permissible maturity of unsecured federal credit union loans;
            (3) Help credit unions avoid a potential accounting dilemma that could discourage constructive credit union mergers by revising the net worth calculation permitted;
            (4) Restore the authority for credit unions to lease land on military bases for a nominal fee (as opposed to fair market value); and
            A last minute addition to the bill included a clarifying provision that would give the Federal Trade Commission oversight of private insurance and require credit unions (and other financial institutions) to disclose if they are not federally insured. The bill also permits the Federal Reserve to pay interest on sterile reserves maintained by banks and credit unions. This provision was one of two that  threatened to hold up the progress of the bill toward final completion. The other was one that appeared to diminish the authority of the Securities and Exchange Commission (SEC) over bank broker-dealer operations.
            U.S. Senator Mike Crapo (R-Idaho) sponsored the Senate bill, while Rep. Jeb Hensarling (R-Texas) sponsored the House version. On October 13, the bill was signed into law by President Bush.

Congress Passes Legislation to Protect Military Personnel From Predatory Lenders
            Congress sent the President H.R. 5122, the National Defense Authorization Act for Fiscal Year 2007 before adjourning before elections. The bill includes CUNA-supported language that will provide additional protections for our nation's military personnel from predatory lending practices. The most important provision caps the annual percentage rate at 36% for loans. In addition, predatory creditors are prohibited from extending credit even if the servicemember's legal rights have been waived. The Department of Defense will implement these and other regulations with the technical assistance and advice from the Federal Trade Commission and the various financial institution regulators, including the National Credit Union Administration.
            It is interesting to note that the bank lobby was largely opposed to this bill to protect our military personnel from unscrupulous payday lenders and loan sharks that surround our domestic military installations and push "easy money" on the very people who defend our country and the freedoms we enjoy. This "easy money" often thrusts the recipient and family into a perpetual cycle of debt, destroyed credit, and decreased morale. This should not be tolerated, especially in a time of war. CUNA President/ CEO Dan Mica felt so strongly about this issue that he sent a letter of support to the leadership of both the House and Senate Committees on Armed Services before the final vote on this bill.

Internet Gambling Bill Expected to Become Law
            On September 30, 2006, the Senate cleared a House-passed bill to crack down on the online gambling industry. The bill was included in the SAFE Port Act (H.R. 4954) and is expected to be signed into law by President Bush. The online gambling provision was inserted at the end of the bill and contains the bulk of H.R. 4411, the Internet Gambling Prohibition and Enforcement Act, sponsored by Rep. Jim Leach (R-Iowa).
            The bill language prohibits American financial institutions and card issuers from processing online gaming transactions. The specific regulations and rules implementing the new law will be written by the Treasury Department and the Federal Reserve. The bill recognizes the burdens it places on financial institutions so a provision was added to mandate that regulators exempt certain payments, like checks and automated clearing house transactions, that are nearly impossible to filter out using standard coding and blocking system technology.
 
Legislative Update
            Congress is expected to reconvene on November 13th for a lame duck session. All twelve appropriations bills or any additional continuing resolution will need to be enacted. Other legislation that may be addressed during the lame duck session include a tax technical corrections bill, the telephone excise tax repeal, the Taxpayer Protection and Assistance Act, an increase in the minimum wage, and possibly  immigration legislation. CUNA will continue to use the recess period to work with Hill offices to increase understanding in support of a legislative fix to allow all federal credit unions, regardless of charter type, to add underserved areas to their charter.

International Credit Union Day
            CUNA, in conjunction with WOCCU, will be hosting its 3rd Annual International Credit Union Day Hill reception on Thursday, October 19th, in the Rayburn House Office Building.

Please Use CUNA As Your Resource!!!
With questions involving Capitol Hill offices and federal legislative issues, please contact the LegislativeAffairs staff directly.

John Magill – Senior Vice President, Legislative Affairs
202-508-6715 - O
202-841-8943 – C
jmagill@cuna.com

Dean Sagar – Vice President,  Legislative Affairs
202-508-6721 - O
202-297-3052 - C
dsagar@cuna.com

 Katie Herberger – Manager, Legislative Affairs
202/508-6718 (Office)
703/371-9575 (Cell)
kherberger@cuna.com

John Hildreth – Manager, Legislative Affairs
202/508-6724 (Office)
jhildreth@cuna.com

Nancy deGrandi
202/508-6719
ndegrandi@cuna.com
State law comparisons and issue research

Phil Drager
202/508-6710
pdrager@cuna.com
NCSL, CSG, ALEC, Governors’ Assoc., etc.

TOGETHER is published on the 15th and 30th of each month by the Delaware Credit Union League, 4 Quigley Boulevard, New Castle, DE19720. 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).