January 15, 2006

Ten CU Resolutions for ‘06
Here are New Year's resolutions for credit unions, as published by the Wisconsin League.
     1. Boost your lending program. Maintaining a strong borrower base is key to the success of the credit union.
     2. Invest in educational opportunities for staff. Take advantage of webinars, teleconferences, seminars and correspondence courses, as well as schools and conferences.
     3. Improve performance. Find financial strength by inviting experienced credit union professionals to help identify ways to earn more and offer more services to members.
     4. Manage liability. Prepare for examiners' visits by doing a compliance review on new laws such as the Bank Secrecy Act.
     5. Commit to advocacy to preserve the tax-exempt status of credit unions. Attend the national Governmental Affairs Conferences to promote credit unions and build relationships with legislators. Join the Political and Legislative Action Network (PLAN)--a nine-step political advocacy program.
     6. Prove the worth of your credit union to Congress by reaching out to low-wealth segments of the community.
     7. Replenish your membership by attracting tomorrow's generations today. Youth are key to prolonging the life and success of the credit union.
     8. Strengthen your marketing by taking advantage of cooperative or shared-cost marketing campaigns. This will cut costs and boost loan volume, member relationships and CU awareness.
     9. Tap into the credit union network. For example, the Delaware League offers councils and roundtables so credit unions in our state can share ideas and stay up to date on issues.
   10. Increase member loyalty by offering products and services they need. The more services members use, the less likely they will leave the credit union for another financial institution.

Sign Up for League Councils
     When a Delaware credit union CEO had a question regarding how employees should be paid when they work on Saturdays, she turned to her peers for guidance. As a League council member, she was able to discuss her question at the HR Council meeting, which is also attended by an employment attorney from Saul Ewing LLP.
     Bernadette Hines, League education director, says she is thrilled that CUs are taking advantage of this opportunity to share ideas and resources. “The purpose of the Delaware CU Councils is to provide CU professionals and volunteers a forum for networking and sharing best practices.”
     Council opportunities include Cards, Collection, Compliance, Financial Management, Human Resource, Marketing, and Mortgage/Home Equity. Credit unions that sign up before January 31^st can register for six councils for a discounted price of $260, which includes participation by two individuals from each CU for every council meeting (held 2-3 times a year). The Tri-State Compliance Council has a separate fee of $100 for three attendees from each CU. Contact Bernadette Hines for a registration brochure.

Notice of League Director Election
At this year’s League annual meeting in April, two three-year terms for League director will be filled. The terms of Kate Toner, Wilmington Postal FCU, and Michael Whaley, Delaware State Police FCU, will expire in 2006. Each CU board may nominate one eligible person as a candidate for the League board of directors. Nominations must be in writing and be accompanied by a brief written biography. Nominations are due at the League office by 4:30 p.m. on Monday, February 20, 2006.
There will be no nominations from the floor during the meeting. No CU may have more than one director serving on the League board. The five other current League directors are Cheryl Chilcutt, Chestnut Run FCU; Meredith Jeffries, New Castle County DE EFCU; Jerry King, DEXSTA FCU; Jim Everhart, Louviers FCU; and Joel Romaine, DPL FCU.

Should CUs Raise Credit Card Minimum Payments?
     You may have seen or read articles about banks raising their credit card minimum payments. Some credit unions are questioning whether they should be doing likewise. According to CUNA’s assistant counsel Mike McLain, the answer is “no” because NCUA has not issued any such regulation or requirement for credit unions.
     New credit card lending guidelines issued by the Federal Reserve, FDIC, Office of Comptroller of the Currency and Office of Thrift Supervision went into effect in January and force many credit card issuers to increase the minimum payments due on credit cards. Many cardholders will be, or already are, paying a higher minimum payment.
     However, the guidance does not apply to credit unions and credit union issued credit cards. The changes apply to banks and thrifts because of what the regulatory agencies consider inappropriate credit card marketing and account management practices. With the low minimum requirements, many individuals would never be able to get out of credit card debt.
     Your members that have credit cards issued by banks or other institutions will likely see an increase in their minimum payment on their bank cards and may question whether the credit union is also going to raise their credit union credit card minimum payment. You now have the answer.
     Further, the new bankruptcy law that mandated changes to Reg. Z does not require any increase in the minimum payments. What it does require is new disclosures on periodic statements concerning the length of time it will take to pay the balance at different minimum payments. This requirement will not go into effect until the latter part of 2006 or later. We will keep you advised through the Compliance Recap of the changes and effective implementation date.

2005 TOGETHER Index Available
The League has created an index of major articles printed in last year’s TOGETHER newsletter. This index can come in handy, especially when referring to compliance matters. Each manager/CEO has received a copy of the index; additional copies are available from Alice Smith at the League office.

New Fed Rules on Check Conversions, Payroll Cards
The Federal Reserve Board approved final amendments to its electronic funds transfer (EFT) rule, Regulation E. The final rule requires merchants and other payees to provide a notice to consumers and to obtain their authorization for the electronic fund transfer. In addition, consumers must be notified that, if a check is converted, funds may be debited from consumers' accounts as soon as the same day that payment is received and that the check will not be returned by their financial institution. In a separate action, the Board also approved an interim final rule amending Regulation E so that it covers payroll card accounts established for the purpose of providing salary, wages, or other employee compensation on a recurring basis.

Roth 401(k) Rules Finalized
The U.S. Treasury Department and Internal Revenue Service (IRS) have issued final regulations that allow a 401(k) plan to permit an employee who makes elective contributions under a qualified cash or deferred arrangement to designate some or all of the contributions as Roth contributions. Under the final rules, as of January 1 employers can allow workers to make after-tax Roth contributions to their 401(k) plan without paying personal income taxes upon withdrawals at retirement. To see the full text of the regulations, visit the link below. http://www.cuna.org/cgi-php/offlink.php?nnlink_id=13276

USERRA Regs Effective 1/18
The U.S. Department of Labor (DOL) has published final regulations under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”). These regulations become effective January 18, 2006, and protect the rights of persons who voluntarily or involuntarily leave employment positions to undertake military service. The regulations, which are in a Q&A format, cover a number of issues dealing with the reemployment of returning veterans. The DOL has also revised the content of the notice that explains the benefits and obligations of employees and employers under USERRA. As an employer, you must post this notice in areas where you customarily place other employment notices. Find the regulation at: http://www.dol.gov/vets/regs/fedreg/final/USERRA_Final_Rule.pdf . A copy of the updated USERRA Notice is at: http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf#Non-Federal

Credit Unions’ Holiday Spirit Shows
Delaware credit unions stepped forward during the holiday season to help individual families in the communities they serve. The following activities were reported to the League.
§ Staff members at Chestnut Run FCU purchased items to fill 14 stockings for the Salvation Army.

§ Delaware FCU collected approximately $1700 worth of toys, including ten bicycles with helmets, for the Marine Toys for Tots Foundation. Credit union employees held a silent auction at their holiday party to raise funds for the victims of Hurricane Katrina. Talented DEFCU employees and their family members donated over 50 handmade items to be auctioned off. Generous employee bidding raised over $600 due to this creative fundraising effort.
§ Both Delaware FCU and DEXSTA FCU contributed money to members

displaced by fire during the holiday season. DEXSTA FCU employees and board contributed $500 to help credit union member Frank Hawkins whose home was destroyed by fire in early December. The fire displaced four generations of Mr. Hawkins’ family.

§         Diamond State FCU sponsored three radio messages on the University of Delaware public radio site to encourage people to give blood.
§         Members and staff of Dover FCU collected 12 boxes of toys and canned food for the Salvation Army Food Drive and Angel Tree programs.
§         The employees of First State FCU adopted a family through the local Caring Hearts Helping Hands Organization.

Ready for the New $10 Bill?
CUs should prepare their front-line staff to receive and dispense the new $10 bill, which will begin circulating March 2. The update of the $10 is a part of a series of changes to thwart counterfeiters. New features include color-shifting ink, a watermark of Alexander Hamilton, a security thread that repeats “USA TEN,” and subtle background colors in shades of orange, red, and yellow.

League Offers ALM and Volunteer Board Training in January
     The first Financial Management Council of 2006 will feature asset/liability management (ALM) training for CU decision makers. Carolyn Warden will provide information on risk management, dealing with the current interest rate environment, and how to use ALM so the examiners won’t make decisions for you. The session will be held on Wednesday, January 25, from 9 a.m.-noon. Registered council members are free; $75 for non-council members. The registration deadline is 1/20.
     The evening of January 25, Carolyn Warden will also present a training session for volunteers, “Five or More Things Every Director Should Know.” Topics will include the organization of CUs and the credit union system, roles and responsibilities of board and management, communications with CU staff, board meeting procedures, and understanding NCUA reports. The session will run from 5:30-8:30 p.m., starting with a light meal. The cost is $80 per person. The registration deadline is January 18.
     Both sessions will be held at the League office.

FDIC Money Management Guides
The FDIC has published two special how-to guides to money management for selected age groups – one for senior citizens and their families, the other for young adults (including those just beginning a career or family and others still in college or high school):
1) “Fiscal Fitness for Older Americans: Stretching Your Savings and Shaping Up Your Financial Strategies” is available on the FDIC website at www.fdic.gov/consumers/consumer/news/cnfall05.
2) “Taking Control of Your Finances: A Special Guide for Young Adults” is available at www.fdic.gov/consumers/consumer/news/cnspr05.
The guides may be reprinted in whole or in part without permission from the FDIC. Material used should be credited to “FDIC Consumer News, a publication of the Federal Deposit Insurance Corporation.” Single copies are available free of charge from the FDIC by calling toll-free 1-877-275-3342 or sending an e-mail to publicinfo@fdic.gov. The FDIC is encouraging financial institutions to make the guides widely available, by reprinting or linking to the material.

Congratulations to the members, volunteers, and staff of NEWARK, DELAWARE CITY EFCU, who are celebrating the CU’s 35th anniversary in January.

Our condolences to the family and friends of Charles “Terry” Outten, a former League and Delaware FCU board member, who recently passed away.

Best wishes to Susan Maclary who retired on December 29^th from DPL FCU after 16 years of service.

Theresa Miller, Southern Delaware Postal EFCU, and Deborah Cicione, Judy Lawson, and Sharon Schaeffer of Delaware First FCU attended the North Law Firm bankruptcy conferences in 2005.

Teller Positions: Full and Part Time. Openings at several levels. Previous teller experience preferred. Accurately process member transactions. Good customer service skills: reliable, personable, and member-focused. Some Saturday morning hours required. Fax resume with cover letter and salary requirements to: (302) 772-1221. Attn. HR Manager.

Member Services Representative. Position at Georgetown branch. Must be accurate in handling cash, transaction processing, with strong attention to detail. Must possess a high school or GED diploma. Effective oral and written communication skills. Ability to perform basic math calculations using a calculator and to use routine office equipment. Must be bondable and have acceptable personal credit history. Mail resume to Blanche Jackson, Delaware State Police FCU, P.O. Box 800, Georgetown, DE 19947, by January 17.

Individual Seeks Lending Position. Nineteen years of commercial, retail, and mortgage lending experience. Call Ruth and ask for resume 01-11-06.

January/February QuickBites Teleconferences
One-hour sessions – 11 a.m.-noon
1/18         Overdrafts: Reg D and TISA Changes
1/31         Loan Officer Protocol
2/07         Health Savings Accounts
2/23         Creating Effective Teams
90-minute session – 11 a.m.-12:30 p.m.
2/14         Safe Deposit Security and Liability
Two-hour session –11 a.m.-1 p.m.
2/16         Patriot Act, OFAC, Financial Privacy, Bank Secrecy Act
The fee for the one-hour sessions is $99, the 90-minute class is $109, and the two-hour session is $169. Deadline to register: one week prior to the session. Call Bernadette to enroll.

One-Hour BSA/ACH Compliance Webinars
These courses are now being offered in an “on demand” format – hook into them at the time and place you choose. Plus the next set of live webinars:
     R Risk Management Series
                1/17        Front Line Fraud
                1/19        Back Office Fraud
                1/24         Data Breach Management
     R BSA Training
                1/26        Bank Secrecy Act
                1/31        USA Patriot Act
                2/2           CTR/SAR Forms Completion
                2/7           OFAC, FinCEN, CTR Forms
     R ACH Management Series
                2/9           Annual ACH Audit
                2/14         ACH Risk Management
                2/16         ACH Payments/Verification
Each session begins at 2 p.m., and the fee is $125. For more information, phone Don Baumann of the co-sponsor Verisure at (315) 638-4334.

Financial Management Training & Council: “ALM for Decision Makers (Don’t Let Examiners Make Decisions for You” – Wednesday, January 25, from 9 a.m.-noon at the League office. Speaker: Carolyn Warden. Fee: $75 for non-council members. Regis. deadline: 1/20/06.

Volunteer Board Training: Five or More Things Every Director Should Know – Wednesday, January 25, from 5:30-8:30 p.m. Speaker: Carolyn Warden. Fee: $80, which includes a light meal. Regis. deadline: 1/18/06.

CUNA’s Governmental Affairs Conference –

February 26-March 1 at the Washington Hilton. Registration fee until January 20 is $729. CUs under $20M in assets pay half price. Ted Koppel , formerly of Night Line, will be one of the keynote speakers. For program information, visit www.cuna.org and look for GAC 2006.

League Activities in December/January

New CEO Media Coverage. The League issued press releases regarding the selection of Patrick Mahaney as the new League president. As a result, Patrick was interviewed by The News Journal, Credit Union Times, and Credit Union Journal. The resulting articles and other media attention given to credit unions in the past six months are contained in a news clipping packet sent to all CU managers/CEOs.

Opportunities to Meet the New League President. The League hosted a reception for Patrick Mahaney on January 9, so that the key staff and directors of Delaware credit unions could meet the new league president/CEO. In addition, Patrick has visited with eight credit unions so far in his quest to meet with all 35 credit unions by the end of February. To further enhance the quality of communications between credit unions and League, our staff members will be making contact with each credit union in Delaware as frequently as once a month.

Political Advocacy Training. Patrick Mahaney and Alice Smith from the League staff recently attended a full-day political advocacy training program. CUNA has put together this program that is designed to train participants on how communication outlets work and how to successfully get credit union messages into the hands of government decision-makers, the media, and the general public.

Compliance Issues and Risk Alerts. The League recently distributed copies of CUNA’s monthly Compliance Challenge to update credit unions on issues such as changes in the mileage rates, advertising compliance, and Regulation CC (check holds). The League continues to keep credit unions abreast of risk management concerns involving “phishing scams,” counterfeit cashier’s checks, and e-mail viruses.

Fall Golf Outing. The League organized and hosted a golf outing fundraiser that benefited the credit union system’s hurricane relief effort.

Credit Freeze Legislation. George Fitzgerald continues to keep the League informed of his actions toward the enactment of Delaware Senate Bill 109. His efforts include forming a coalition of groups to support this bill, in addition to credit unions. They include ING Bank, AARP, the ACLU, CUNA Mutual Group, the Delaware Police Chiefs’ Council, and most recently the Delaware Community Reinvestment Action Council.

The Taxation Threat. This year, the credit union movement faced down the specter of federal taxation, a threat that was more serious than in recent years. The grassroots and lobbying efforts by CUNA, the leagues, and individual credit unions and their membership thwarted this well-coordinated attack by the banking lobby and their allies in Congress.
While 2005 was a legislative success on the federal taxation front, now is not the time to rest on our laurels. The federal budget process for fiscal year 2007 will begin in earnest in a few short months, and the credit union tax exemption can always be challenged. In addition, Congressional oversight panels could revisit the issues raised in the November 3^rdWays and Means hearing.

CURIA and Regulatory Relief Update. It may seem as though at the end of 2005 we are right back where we ended up in 2004 on regulatory relief issues. There are two good House measures, Regulatory Relief and CURIA, with House leadership waiting on the Senate to move, but no Senate action. Things are a bit brighter however. The number of cosponsors of CURIA has increased by 37, bringing the total to 108. Despite the fact that admitted credit union supporters are facing daily attacks from their local community bankers and most likely losing campaign contributions, these members of Congress have still taken the initiative to stand with the credit union movement. There have also been significant improvements made to the Regulatory Relief bill, including a section that deals with the Bank Secrecy Act. Additionally CUNA’s efforts to amend this legislation in regard to prompt corrective action and member business lending drew attention, as well as a promise to hold a hearing on CURIA in 2006.