Volume 27, Number 1                                       January 15, 2007

HEADLINE NEWS

Security Firm Offers CUs Seven Resolutions for Safe 2007
     Improving cyber-security is as easy as 1, 2, 3, 4, 5, 6, 7, according to network security provider Perimeter. Perimeter founder Andrew Greenawalt noted that it is the users' responsibility to keep their data, networks and computers secure. The company is a strategic alliance provider of the Credit Union National Association (CUNA). Greenawalt offered seven New Year's resolutions for businesses, including credit unions.
     1.  Change every password – for every website, device and computer – you have at the beginning of the  year. Resolve to use hard-to-discover passwords and change them quarterly.
     2.  Download patches and updates for system software and applications.
     3.  Conduct a "vulnerability scan" during the holiday lull to determine the ability of a system to be penetrated by a hacker.
     4.  Schedule ongoing risk assessments and conduct regular security checkups. Don't wait a full year between risk assessments.
     5.  Stress the importance of protecting confidential information such as Social Security or account numbers. Use an encrypted email system.
     6.  Keep computers and the network virus-free by keeping anti-virus software updated and running it often.
     7.  Consider turning security over to professional firms instead of doing it yourself.

Another New Year’s Resolution: Support CULAC
     This year, there are three ways your CU can help support the credit union movement’s political activities in 2007:
     1.  Sign a CULAC permission agreement. These agreements are Federal Election Commission requirements that allow individuals in your CU to participate in CULAC fund-raising opportunities and activities.
     2.  Establish a fund-raising activity that suits your credit union. Each year, CULAC sets a state goal for contributions. The League’s Governmental Affairs Committee helps coordinate several fund-raisers that are fun and effective. From annual meeting raffles to dress-down days in the summer to candy bar sales in the fall, there’s a program that fits every credit union.   
     3.  Sign up for one of the CULAC-sponsored fund-raisers.  A contribution to CULAC protects the future of all credit unions, by supporting candidates that help support CU issues. Deduct-a-buck is an easy program in which your members and staff can contribute $1 per quarter to this cause. 
     The League also has information on the new Presidential Coin Program. CULAC, in conjunction with MPI Coins, will have four exclusive Presidential Collections available in early 2007. The first of the Presidential $1 coins, George Washington, will be released on Presidents’ Day. John Adams, Thomas Jefferson, and James Madison will also be released in 2007. Four Presidents will be added each year, one released every three months, in the order that they served, until 2018. The Presidential Collection will include two uncirculated $1 coins, one from the Philadelphia Mint and one from the Denver Mint. Credit unions are encouraged to support CULAC by offering these coins to members. Call Alice Smith for more information on any of these programs. 
           
Sign Up for League Councils
     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 31st 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). Regional compliance activities will be accessed a separate fee. Contact Bernadette Hines for a registration brochure.

COMPLIANCE RECAP

2007 HMDA Exemption Threshold Increased
     The Federal Reserve Board published a final rule amending the staff commentary that interprets the requirements of Regulation C (Home Mortgage Disclosure). The staff commentary is amended to increase the asset-size exemption threshold for depository institutions based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
     The adjustment from $35 million to $36 million reflects the increase of that index by 3.32% during the 12-month period ending in November 2006. Thus, depository institutions with assets of $36 million or less as of December 31, 2006, are exempt from collecting data in 2007. Of Delaware's 34 credit unions, all but eight are exempt. This change became effective January 1, 2007. 

NCUA Accounting Bulletin: Allowance for Loan and Lease Loss
     The National Credit Union Administration (NCUA) has issued “Accounting Bulletin” 06-01, announcing the issuance of a new policy statement by the federal financial regulatory agencies on Allowance for Loan and Lease Losses (ALLL) and supplemental “Frequently Asked Questions” (FAQs).  The revised policy statement updates the 1993 guidance and extends to credit unions and their examiners. 
     This revision reiterates key concepts and requirements included in GAAP and existing ALLL supervisory guidance. Each financial institution has a responsibility for developing, maintaining and documenting a comprehensive, systematic, and consistently applied process appropriate to its size and the nature, scope, and risk of its lending activities for determining the amounts of the ALLL and the provision for loan and lease losses. To fulfill this responsibility, each institution should ensure controls are in place to consistently determine the ALLL in accordance with GAAP, the institution’s stated policies and procedures, management’s best judgment and relevant supervisory guidance.
     In addition to the revised policy statement, the agencies issued 16 FAQs to assist financial institutions in complying with GAAP and the ALLL supervisory guidance. Click on http://www.ncua.gov/GuidesManuals/accounting_bulletins/2006/06-01ALLL.pdf for NCUA’s Accounting Bulletin 06-01.

New SAR Form Effective 7/30
     The Financial Crimes Enforcement Network (FinCEN) announced recently that the format for the Suspicious Activity Report (SAR) by Depository Institutions has been revised to support a new joint filing initiative, which will reduce the number of duplicate SARs filed for a single suspicious transaction.
     Use of the revised format for filing will become mandatory December 31, 2007. The ability to file using E-Filing, or electronic filing, is currently being finalized, as are the Magnetic Media Specifications. This revised SAR form, although now available, should not be filed until the effective date of implementation of June 30, 2007. Go to http://www.fincen.gov/fincen_form111.pdf for a copy of the revised SAR.

CUNA: CUs Must Get Ready for Recordkeeping Changes
     Credit unions should be preparing to address revised rules that require them to preserve electronically stored information directly related to an actual or expected lawsuit, according to Credit Union National Association (CUNA) compliance experts. The amended Federal Rules of Civil Procedure, which went into effect last month, are putting a whole new focus on record retention and shining the spotlight on requirements regarding preserving electronic communications and records. Under the new rules, when a credit union receives notice of a lawsuit – or anticipates a lawsuit is likely – it must place a "litigation hold" on all records to ensure that nothing is destroyed or altered, according to Mike McLain, CUNA senior compliance counsel. More here: www.cuna.org/newsnow/07/wash010207-1.html

New HUD Settlement Statements Available Online
     The U.S. Department of Housing and Urban Development has posted new settlement statements, HUD-1 and HUD 1-A, on its website. The new statements reflect the new Office of Management & Budget expiration date of November 30, 2009. Use these links to access the appropriate forms: HUD-1; HUD 1-A.

CU SYSTEM NEWS

Actor Martin Sheen Heads List of Great Speakers at CUNA’s GAC

     Martin Sheen, star of TV's "The West Wing" and who has a family connection to credit unions in Ireland, will address attendees of the 2007 CUNA Governmental Affairs Conference in Washington, D.C. He is scheduled to be the closing general session speaker on Monday morning, Feb. 26.
      Other featured speakers will include Washington Post Columnist Michelle Singletary, who writes about making wise financial choices; Fox News Washington Managing Editor Brit Hume, who was also with ABC for 23 years, ending as chief White House correspondent; and Mary Matalin, a conservative Republican, and James Carville, a liberal Democrat, who have been called "the political odd couple" many times in the 10 years since they married and co-wrote All's Fair: Love, War and Running for President.
     For more information on this conference, go to http://www.cuna.org/events/gac07. This year, CUNA is offering a discounted rate to small CUs (up to $35M in assets) that wish to attend the 2007 Governmental Affairs Conference February 25-28. All small CUs can register online and receive the discounted rate of $400 – regular tuition is $795 – by simply checking the box that says "Are you from a credit union under $35M in assets?"

CUs Finish 2006 With No. 1 Ranking in Service
     Credit unions were named the top “customer” service provider among financial institutions in 2006 based on consumer surveys conducted by RealPeopleRatings.com. The survey for the fourth quarter of 2006 gave credit unions a score of 7.99. Credit unions' scores for the other three quarters of 2006 ranged from 7.90 to 7.99. In comparison, “customer” service ratings for national banks failed to rise above 7.0 in the fourth quarter of 2006 (Business Wire Dec. 27). The customer service rankings are based on online opinion polls sent to a pool of panelists. More than 5,000 panelists typically participate in each of the quarterly surveys by ranking businesses on a scale of 1 to 10. The RealPeopleRatings.com site displays “customer” service survey results for six quarters, extending back to the second quarter of 2005. Credit unions rank first for “customer” service in all of them.

CUNA Annual Survey
     The CUNA Annual Survey will be mailed out to all US credit unions in January. This survey is used to track new trends in credit union service offerings not covered by the NCUA 5300. The survey allows CUNA to answer questions from the public, government agencies and elected officials. The survey can be completed on the web. Credit unions can sign up to complete the survey on the web using the following website: http://resource.cuna.org/econstat/yearbook/qstpre.html. The time required to complete the survey should be under 10 minutes. We hope that you will be able to spare this time, and in this way help the movement collect the information it needs to prosper. If you have any questions about the survey, please contact Marc Shafroth at 608-231-4182.

A.M. Best Reaffirms CUNA Mutual’s Ratings
     CUNA Mutual Group’s financial strength rating has been reaffirmed as “A” (Excellent) by ratings agency A.M. Best. In listing the company’s outlook as “Stable,” A.M. Best recognized CUNA Mutual’s “excellent capitalization and historical operating profitability, while maintaining a conservative reserve position.”
     A.M. Best assigned the “A” rating to the principal companies of CUNA Mutual Group, including CUNA Mutual Insurance Society and its two affiliate life companies, CUNA Mutual Life Insurance Co., and MEMBERS Life Insurance Co., as well as CUMIS Insurance Society, Inc., a property and casualty subsidiary.
     A.M. Best is a worldwide provider of insurance company ratings and information.

First Annual Credit Union Bowlathon
     The first DCUL Annual CU Bowlathon will be held 7-10 PM, on Friday, February 16, at the Bowlerama in New Castle, DE. Credit unions and league business partners are invited to gather a team (or teams) of four bowlers, pick a team name, and come out for a great time. The cost is $36.95 per person, which includes dinner, shoe rental, bowling ball use, and two hours of bowling. We’ll have door prizes, special awards and lots of fun. For more information, go to the League website at www.dcul.org. See you in the alley!

DELAWARE NOTES

Ed Grebe, manager of Newark Delaware City Employees FCU, is the winner of our December 30, 2006, CUDOKU puzzle prize. Ed was pleased to accept a $25 Visa gift card from Experian who sponsored that puzzle. Keep checking our website at www.dcul.org for more chances to win.

Mid-Atlantic Corporate FCU made a donation to the League Scholarship Fund in memory of Sam Simpson, former DCUL managing director.

New Castle County School Employees FCU has moved its office to 113 West Sixth Street, P.O. Box 232, New Castle, DE 19720-0232. The credit union’s new phone number is 302-613-5330; fax: 302-613-5350. Along with the move, the CU is converting to Share One, Inc., New Solutions data processing system.

Preferred Financial FCU is the new name of Pipefitters FCU. The CU’s new website is found at www.perferredfinancialfcu.org.

CU POSITIONS AVAILABLE

Dover FCU is posting three job openings. More complete descriptions can be found on the League website at http://www.dcul.org/jobs.htm. Send cover letter, resume, and salary requirements to HR Department, Dover FCU, P.O. Box 02009, Dover Air Force Base, DE 19902. Fax: 302-678-8037. Email: hshupe@doverfcu.com or stop by a branch to complete an application.
            Branch Manager. Full-time manager position for the North Dover branch. Four years of CU or similar financial experience and supervisory experience is required.
           Member Service Representative. Entry level position. Responsible for interviewing applicants for membership, loans, deposit accounts, and other products, as well as cross-selling.
            Electronic Services/Operations Department. This person will perform clerical duties involving electronic funds transfer and ACH functions. Some ACH experience required.

EDUCATIONAL OPPORTUNITIES

Janaury/February QuickBites Teleconferences
One-hour sessions – 11 a.m.-noon
•  1/17  ABCUs: Teaching Educators, Students and Parents
•  1/30  Getting the Most out of Boss/Peer Relationships
•  2/6   Home Equity Lending
•  2/13  Diversity in the Workplace
•  2/22  Right to Financial Privacy Act
Two-hour session – 11 a.m.-1 p.m.
•  2/15  Coaching and Performance Management
The fee for one-hour sessions is $99; the two-hour session is $169. Deadline to register: one week prior to the session. Call Bernadette Hines to enroll.

CenterOne Financial Services: Vehicle Repossession & Remarketing Informational Session – Thursday, January 25, from 9-11 a.m. at the League office. This complimentary session will give attendees information on how to set up a vehicle repossession program by using a secure website. Register with Jane Bailey by January 19.

Records Retention: Help! I’m Running out of Storage Space! – Tuesday, January 30, from 9 a.m.-noon at the League office. This seminar will cover how long to keep records and what records you can destroy. The fee of $99 will include an electronic version record retention workbook. Registration deadline: January 18.

Board/CEO Training: Building a Better Board Package – Tuesday, January 30, from 5:30-8:30 p.m. at the League office. Participants will evaluate a traditional board packet to see how it can be improved to support a board’s decision-making needs. Fee: $85 per person, including a light meal. The speaker for both January 30th sessions is Carolyn Warden. Registration deadline: January 18.

League Activities in December/January

EDUCATION AND TRAINING
           
          Education Sessions in 2006. Delaware credit unions had 124 individual training sessions to choose from in 2005, through training sessions organized by the League and through the partnerships with the Illinois League (QuickBites), North Law Firm (bankruptcy training) and CUNA (webinars, teleconferences and schools/conferences). As a result, a total of 1228 staff members and volunteers received training. Each manager/CEO will receive a copy of the complete year-long report in this week’s mailing.

          2006 Professional Councils. The council structure has proved to be very popular with Delaware credit unions, because it provides an excellent opportunity for networking and interacting with peers in the industry. Registration for 2007 will continue to the end of January.

          League Scholarship Program. The League scholarship program provided $3540.83 in educational tuition assistance during 2006, which included 15 credit unions using vouchers and five Volunteer Leadership Conference scholarships. In addition, the League offered scholarship assistance to three credit unions to attend CUNA schools. For 2007, the 23 Delaware credit unions under $20 million in assets will receive two $50 vouchers, which may be used for training sessions, STAR or MERIT modules, or the annual meeting. Additional scholarship assistance is available by contacting League education director Bernadette Hines.
            The League also recently sent $100 to the Christiana Rotary Club’s scholarship fund in memory of Sam Simpson, who served as the League’s managing director from 1978-1983.

GOVERNMENTAL AFFAIRS

Have You Met “The Little Guy”?
          “The Little Guy” is part of CUNA’s new strategy to change the conversation. “The Little Guy” made his debut on January 4 – just in time for the swearing in of the 110th  Congress. Commemorative buttons (see picture at left) with his image were distributed all around Capitol Hill. They could be found in Congressional offices and on members of the general public. The buttons were designed as a keepsake and contain no references to credit unions or our issues.

           At the same time, strategically placed around Capitol Hill were six life-size silhouettes (see photo at right), along with photographers. Passers-by were invited to
have their photo taken with him. These same people were then able go to a special website,www.lookoutforthelittleguy.org, and download their photo.                      

          Castle on House Finance Committee. The House Republican Conference has announced the names of the 33 representatives who will fill the Republican seats on the House Financial Services Committee for the 110th Congress. This includes Representative Michael Castle of Delaware.

          CUNA: The Future of CURIA. When Congress adjourned for the year, the Credit Union Regulatory Improvements Act (CURIA, H.R. 2317) went into hibernation waiting for the House and Senate to reconvene on January 4. The closing of the current two-year session of the 109th Congress effectively wipes the legislative slate clean, leaving the 110th to re-introduce bills left pending that are still of interest. John Magill, senior vice president of legislative affairs for the Credit Union National Association (CUNA), said that he expects Reps. Paul Kanjorski (D-Penn.) and Ed Royce (R-Calif.) to return as main co-sponsors of a 2007 version of a regulatory improvements bill for credit unions. The 2006 legislation contained such things as more flexibility in the amount of member business loans credit unions may make, as well as prompt corrective action (PCA) reform to allow a more risk-based capital system. Magill said that CURIA 2007, which will receive a new bill number when introduced, will look much like H.R. 2317 with two possible exceptions. "We're going over the outlook for a new bill now. We expect it to look much as it is today, with perhaps an addition of field-of-membership provisions that clarify Congressional intent on extending credit union membership to underserved areas or communities," Magill said. He added that Kanjorski and Royce, as expected prime co-sponsors, may also be considering adding provisions that would address the issue of credit union conversions to a mutual savings bank charter.

          CUNA Names New VP State Government Affairs. CUNA has selected Christopher A. Johnson as its new vice president of state government affairs. Johnson had been serving since earlier this year in CUNA’s regulatory advocacy department. He succeeds Larry Lanier. In his new role, Johnson will work with state leagues to identify national trends and determine strategies to ensure favorable treatment of credit unions in the state legislatures.

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).