Volume 26, Number 21                                 November 15, 2006

HEADLINE NEWS

Elections Spell Change in Congress
       Americans nationwide demonstrated their desire for change in the recent elections. In Congress, Democrats won enough seats to take over control of the U.S. House and the U.S. Senate. In two races for Congress, Delaware defied party loyalty and national trends by sticking with two incumbents: Senator Tom Carper, a Democrat, and Representative Mike Castle, a Republican, whose campaign was interrupted by a late September stroke. Carper extended his Delaware record of consecutive statewide victories to 12 by defeating Republican Jan Ting and a third-party candidate. Castle won his 11th straight statewide race, this time over Democrat Dennis Spivack and two third-party challengers.
     Delaware League president Patrick Mahaney reflects on the election’s outcome: “The national mid-term elections are over, and Delaware returns Mike Castle and Tom Carper to office. Representative Castle and Senator Carper are both core members of their respective bodies and as such are positioned to be influential in new legislative campaigns to come. We are pleased that both have won re-election and look forward to continuing to grow our relationship with both their offices. We also look forward to both men’s continued support of credit unions in Delaware and nationally!”
     What’s Ahead in Congress. When newly elected and re-elected lawmakers return to work in January, the Senate make-up will be 49 Democrats, 49 Republicans, and two Independents. Independents caucus with the Democrats, which means Democrats have control of the Senate. The Democrats also wrested control of the House; it will be the first time Congress has been under Democratic control since 1994. Two long-time credit union supporters in the House are in line to take the chairmanships of the two panels that are most important to the Credit Union National Association's (CUNA's) goals: Charles Rangel of New York is the presumptive head of the Ways and Means Committee, which considers such issues as tax policy, and Barney Frank of Massachusetts appears likely to take the helm at the Financial Services Committee.
     "With the number of credit union supporters returning to Congress and being in line for key positions—including at least 112 of the current 124 CURIA co-sponsors—CUNA will work to build and reinforce backing on both sides of the aisle for credit union issues in Congress," Dean Sagar, vice president of CUNA's legislative affairs department, said. Looking into next year, Sagar said that credit unions can expect the Credit Union Regulatory Improvements Act (CURIA, H.R. 2317) to be reintroduced early in 2007.

Milford Branch of Del-One Hosts Grand Opening November 15
     Del-One, the trade name of Delaware Federal Credit Union, hosted a grand opening ceremony in honor of its new Milford branch on Wednesday, November 15. Festivities included a ribbon-cutting ceremony, special one-day-only loan and deposit rates, and entertainment for the entire family.
     The new Del-One branch, located at 100 Credit Union Way in Milford, offers members convenient drive-up service and ATM lanes, a cybercafé where members can freely access Del-One’s online branch, an after-hours drive-up depository, and safe deposit boxes. Del-One has served the citizens of Delaware for more than 46 years. There are six branches throughout the state, which serve more than 29,000 members. 

COMPLIANCE RECAP

NCUA Final Rule on SARs Filings Effective November 27
      The National Credit Union Administration (NCUA) has published a final rule to provide greater detail and clarity concerning the reporting requirements, filing procedures, and other important aspects of Suspicious Activity Reports (SARs). This rule is intended to provide CUs with basic information concerning SARs in a single location, the result being a quick reference tool. The updated SAR regulation is effective November 27, 2006.
     The heading (Part 748) has changed from “Security Program, Report of Crime and Catastrophic Act and Bank Secrecy Act Compliance” to “Security Program, Report of Suspected Crimes, Suspicious Transactions, Catastrophic Acts and Bank Secrecy Act Compliance” in order to more accurately describe the scope of the rule. The final rule covers:
      •  The definition of reportable activity;
      •  Important filing procedures;
      •  Record retention requirements;
      •  Prompt notification of the board of directors of SAR filings;
      •  Confidentiality of SARs; and
      •  Liability protection.
The rule clarifies that reportable activity includes suspected crimes and suspicious transactions related to money laundering or other illegal activity, such as terrorism financing or a violation of the Bank Secrecy Act (BSA). To view the entire rule, go to http://www.ncua.gov/RegulationsOpinionsLaws/RecentFinalRegs/F-748C.pdf.

IRS Raises Standard Mileage Rate For 2007
     The Internal Revenue Service, reflecting rising fuel and vehicle costs, is raising the standard mileage rate used to calculate the deductible costs of driving for business. The agency said that as of January 1, 2007, the new rate will be 48.5 cents per mile for business miles driven. This is the same as the 48.5-cent rate temporarily imposed during the final months of 2005, when gas prices spiked after Hurricane Katrina. During 2006, the rate was 44.5 cents per mile.

Holiday Skip Payments: Tips to Stay in Compliance
     There are only 41 days until Christmas so credit unions are working overtime on their holiday promotions. If your credit union is implementing a skip payment program in an open-end lending environment, it is important to know the facts.  
     We have all struggled over the issue of whether skip payment fees are finance charges under Regulation Z. Now that the NCUA has published a “clarification” to Legal Opinion Letter 05-0903, we have our answer and examiners may be looking closely at these programs. This letter can be found at www.ncua.gov/news/express/xfiles/05-0903A.pdf. 
     Skip payment fees ARE considered finance charges under Regulation Z in open-end lending and must be included and disclosed in the annual percentage rate (APR) for the month in which the fee was charged.
     The challenge is the data processing system. If data processing systems have the capability of calculating the skip payment fee in the APR and disclosing it on the statement in the month in which it is charged, we’re home free and in compliance! 
      The only way a skip payment fee is NOT considered a finance charge is if a credit union charges a fee for its members to participate in a skip payment plan, regardless of whether they use the skip payment.
     As an alternative, credit unions can offer a skip payment program without a fee (and still earn 60 days interest on the loan) or can consider implementing a software change so the fee is included in the APR. Under closed-end credit, skip payment programs are a breeze. Any fees charged in association with providing the skip payment program are considered finance charges, but additional Truth in Lending (TIL) disclosures will not be required if the skip payment is accomplished by modifying the existing closed-end loan. The inaccuracy created by the fee is not a TIL violation, according to Section 226.17 of Regulation Z. 
      Under both open- and closed-end credit, it is recommended that any skip payment fees be collected or transferred from an existing account and NOT be added to the loan. Based on the Reg. Z commentary, disbursing new money to a member or on a member’s behalf could be considered “refinancing,” which would require new disclosures.

10th Annual Volunteer Leadership Conference: 10 Years and Counting
         The 10th Annual Volunteer Leadership Conference drew a record number of participants. Over 170 attendees from Delaware, DC, and Maryland flocked to Ocean City for networking, training, and fellowship. Although this was the 10th anniversary of the VLC, new and exciting events kept participants busy.

      The Volunteer Forum Open Discussion Saturday morning let volunteers take the spotlight and discuss issues affecting their credit union. And although each credit union is unique, some issues are universal. Participants shared their experiences, and the discussion brought some best practices to light.
General Session

     Sunday morning brought another first. Board chairmen and vice chairmen attended a roundtable breakfast to discuss role-specific issues. Moderator Wes Bone, board president of First Financial FCU and MDDCCUA board vice chairman, shared national and state volunteer information and encouraged attendees to join the National Association of Credit Union Chairmen. Discussion between Delaware, DC and Maryland chairmen and vice chairmen was free-flowing, and the networking opportunity was clearly a plus!            

A special thank you goes to our Chairmen Panel: Wes Bone; Charles Curtis, Prince George’s Community FCU Vice Chairman; Fran Lally, New Castle County Delaware EFCU Chairman; Ken McCall, Anne Arundel County EFCU Chairman;         and Irene Strieby, Allegany County Teachers FCU Chairman.

      The event wasn’t all work. The Saturday evening cocktail reception featured door prizes including a weekend stay at the Clarion Fontainebleau Hotel, $150 Visa gift card and an autographed Cal Ripken rookie baseball card. Prizes, food, and laughter were plentiful!

     The conference came to a close with a moving presentation from Larry Mayo, vice president of information technology for Keesler Federal Credit Union, a Mississippi based FCU.  Mr. Mayo’s presentation, “A Survivor’s Story and Lessons Learned from Hurricane Katrina,” covered many concerns that CUs must consider if a crisis hits their CU.
 

  Larry Mayo addresses the closing session

     The Delaware Credit Union League and the MD/DC Credit Union Association would like to thank the attendees and their credit unions for making the event a success. 
[This article first appeared in the MDDCUA Focus newsletter.]

DELAWARE NOTES

Our condolences go out to two LOUVIERS FCU staff members who lost their mothers in the past two weeks – CEO Jim Everhart and staff member Betty Sartin. You can send cards to them at the CU: 2612 Kirkwood Highway, Newark, DE 19711.

A group of Delaware community leaders has started an endowment fund honoring civil rights leaders Littleton P. Mitchell and his late wife, Jane. Littleton is a board member at DELAWARE ALLIANCE FCU. Tax-deductible donations to the Littleton and Jane Mitchell Fellows Program for Civil Rights and Social Justice may be sent to the Delaware Community Fund, Box 1636, Wilmington, DE 19899.

More than 500 CU and community members braved the mighty wind for DEXSTA FCU’s First Annual Fall Safety Fair held on Saturday, October 28, on the grounds of the Prices
Corner branch.

Peg Conway and Sparky, the Fire Dog

Tellers

Full- and part-time openings at American Spirit FCU - previous teller experience preferred. Ability to accurately process member transactions is necessary. Good customer service skills, reliable, personable and customer-focused. Some Saturday morning hours required. Competitive salary. Fax resume with cover letter and salary requirements to: John Vondran, American Spirit FCU (302) 738-4562.

Delaware Alliance Federal Credit Union seeks a service-oriented individual to fill a full-time entry level teller position. Experience preferred, not required. Send resumes by email to savannahj@delall.org or fax them to 302-577-2837.

Accountant

Delaware Alliance Federal Credit Union is looking for an accounting professional to join our team. Ideal candidate will have a minimum of three years accounting experience; excellent communication, analytical, management and computer skills. Send resumes by email to dawns@delall.org or fax them to 302-577-2837.

EDUCATIONAL OPPORTUNITIES

November QuickBites Teleconferences

One-hour session – 11 a.m.-noon
11/21 How to Develop a SEG Ambassador Program
Two-hour session – 11 a.m.-1 p.m.
11/29  Fair Credit Reporting Act/Fair Debt Collection Act Compliance

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

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. Space still available.

League Fall Council Meetings

•  Mortgage/Home Equity Council – Wednesday, December 6, from 10 a.m.-noon at the League. Topic: “Mortgage Financing Programs.” R.S.V.P. to Jane Bailey by 12/1.

•  CU Financial Management Council – Wednesday, December 7, 2006, from 10 a.m.-noon at the League. Topic: “Economic Overview” by Brad Stewart, vice president and chief investment officer of Mid-Atlantic Corporate. R.S.V.P. to Charlie Jenkins by 11/30.

•  Marketing Council – Tuesday, December 19, at 11:30 a.m. at Polidoro’s Restaurant on Route 13, near the New Castle Airport. Various credit union marketing programs will be discussed. R.S.V.P. to Alice by 12/13. Participants will pay for their own lunches (dessert provided by the League).

There is no charge to attend any League council sessions for those CUs who joined the councils at the beginning of 2006. The fee for non-council members to attend any of these meetings is $75. A new sign-up sheet for 2007 councils has been sent to all credit union managers/CEOs.

League Activities in September/October

COMPLIANCE/COMMUNICATIONS/EVENTS

     Credit Union Week Supplement. The Credit Union Week Supplement this year was published by The Delaware Business Ledger, due to the fact that The News Journal staff never made a commitment to the project. The Business Ledger staff took over the project with less than two weeks until publication, contacted 13 credit unions for ads, took the editorial content provided by the League and created an attractive 20-page free-standing publication which was inserted into the October issue of the Business Ledger.

     Principal for the Day Program. On October 23, Pat Mahaney was afforded the opportunity to see education as it exists today in the public school system, when he served as “principal for a day” at Stanton Middle School. League education director Bernadette Hines had a like experience with Padua. They both were allowed to see the schools as they function each day. They also went prepared with materials to promote financial education and left NEFE financial literacy education materials in the hands of the business teachers for their exploration. The “principal for a day” program is sponsored by the Delaware Chamber of Commerce, and League staff looks forward to participating again in the future. Other credit union folks who served as principals for the day included Peggy Vavalla, David Sokola, and Jennifer Zeberkiewicz of DEXSTA FCU and Sharee Coleman of Delaware FCU (Del-One).

GOVERNMENTAL AFFAIRS

     League President Attends Castle Fund-Raiser. Pat Mahaney accepted an invitation to attend a special fund-raiser for Congressman Castle, held in Washington, D.C. on November 3. The contribution to attend the breakfast hosted by the Campaign to Re-Elect the Congressman was made through the Credit Union Legislative Action Council (CULAC).

LEAGUE SERVICES

     Crop Insurance. The League will be marketing CUNA Mutual’s crop insurance product when it becomes available in Delaware in 2008. With the agriculture businesses downstate, this may be a good product for Delaware. As part of efforts to build the new CUNA Mutual Group and support membership growth in credit unions, CUNA Mutual has reached an agreement in principle with Producer’s Ag Insurance Group (ProAg) to provide Multi-Peril Crop Insurance coverage to family farmers and agriculture producers nationwide. Crop insurance protects farmers from financial losses that result from natural causes such as drought, excessive moisture, hail, wind, frost, insects and disease. Multi-Peril Crop Insurance is a $4 billion industry in the U.S.

     Vehicle Repossession and Remarketing Program.  The League has signed an agreement with CenterOne Financial Services to market their repossession and remarketing program. CenterOne is a nationwide company that will repossess vehicles in any state, prepare them and take them to auction in a turnkey, on-line program for credit unions.

     CMG Retirees. Jane Bailey attended a retirement luncheon for eight CUNA Mutual employees, including Dave Mullen and Caroline Schmidt, who retired at the end of September. Sterling Nowka is replacing Dave with some of the accounts and Tom  McLane with the others. Heidi Hodgson will be working with 16 small credit unions formerly served by Caroline Schmidt.

     Chamber of Commerce Energy Co-op. League management attended a meeting sponsored by the State Chamber of Commerce regarding the formation of an energy co-op that will package businesses and request bids from energy suppliers. The League’s interest is to lower our monthly energy costs for a three-year period. This is an initiative that may be suited for our credit unions as well.

CREDIT UNION ISSUES

     NCUA Region II Meetings. League management met with Ed Dupcak, NCUA Region II Director, to discuss the state of the region. In addition, Jane Bailey met with a select group to discuss how NCUA can help small credit unions survive and grow.

     New Credit Unions. League management met with Rashmi Rangan, who has taken the leadership role in organizing a low-income community development credit union in Wilmington. The League reviewed her business plan and offered her assistance. Jane Bailey and Alice Smith attended the first organizational meeting of the Stepping Stones Community FCU, which was held on November 15 in Wilmington. Pat Mahaney has also been contacted by the Knights of Columbus who are looking into starting a credit union.

EDUCATION AND TRAINING

     Volunteer Leadership Conference. This was the 10th year for this conference, originally conceived and carried out by the Delaware Credit Union League. This year we had 169 people in attendance (with 76 additional guests), an increase of about 25 registrants. The breakdown was 17 credit unions from Delaware, 20 credit unions from Maryland and 10 from the District of Columbia. Individual attendance showed 96 individuals from Maryland/DC and 74 from Delaware. Considering how many more credit unions are in Maryland and DC, this was a great showing from Delaware. Delaware had half of its credit unions in attendance, and the following credit unions brought almost their entire boards: American Spirit, Delaware Alliance, ICI America, New Castle County Delaware, and Sussex County. The Delaware League gave five registration scholarships to the following small credit unions: Delaware V.A., Southern Delaware Postal Employees, ICI America, Delpart, and Wilmington Postal.

September & October Education Sessions

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).