Volume 27, Number 14                                         July 30, 2007

HEADLINE NEWS

Records Retention Guidelines Approved for CUs
     Credit unions will have some flexibility under new guidelines to the National Credit Union Administration 's (NCUA) rule on catastrophic act reporting and records preservation, according to Mary Dunn, deputy general counsel for the Credit Union National Association (CUNA).
     However, credit unions should note they will have just 30 days after publication in the Federal Register to make some significant adjustments the rule imposes on their current procedures.
     The rule, adopted Thursday by the NCUA board, both clarifies the meaning of catastrophic act and offers guidelines for developing a program to prepare for such an occurrence. According to the NCUA, it builds on lessons learned from previous catastrophic acts, including Hurricanes Katrina and Rita.
     While adherence to the new guidelines ensures a credit union's compliance, Dunn said NCUA staff indicated that variations will be tolerated.
     "If a credit union can support how it has adequately addressed the risks it faces, then it has leeway in the development of its program, as long as legal requirements are met," Dunn said.
     "Also, it is important to note the NCUA has given credit unions a right to appeal if they feel an examiner has wrongfully declared their program out of compliance."
     Credit unions will want to note two procedural changes in particular that require:
     •  An off-premise transfer at the end of each business day of information on share, deposit and loan balances for each member's accounts and member contact information. Currently, the regulation requires that this information be transmitted monthly only.
    •  Federally insured credit unions to include as part of its vital records the emergency contact information for employees, officials, regulators and vendors used to support vital records.
     The rule becomes effective 30 days after publication in the Federal Register.
     Prior to the board's vote in favor of the guidelines, NCUA staff noted that guidance was also available to credit unions in the agency's Letter to Credit Unions No. 06-CU-12 on disaster preparedness and response examination procedures.

Resource links: NCUA Guidelines; NCUA Letter to Credit Unions No. 06-CU-12; CUNA e-Guide on Records Preservation; CUNA e-Guide on Disaster Recovery

Credit Union Supplement to Be Published in October
     The Delaware Credit Union League, with input from the Marketing Council, is again organizing a cooperative promotional project for International Credit Union Week (October 15-19). In order to make Delaware credit unions more visible to the public, we will be publishing a freestanding, glossy, full-color supplement (magazine) that will appear statewide in The News Journal on October 16.
     The supplement will highlight, in a very positive way, the many services that Delaware credit unions offer, as they compare to similar services available to consumers through other financial institutions. 
     Although every CU will be in the directory listing, Delaware credit unions are asked to purchase individual advertisements in the supplement to offset the production and distribution costs. Credit union CEOs/managers received information on advertising prices in a special mailing from League EVP Jane Bailey. The deadline to notify the League of your intention to advertise has been extended to August 3.
     Currently the following credit unions have purchased ads: American Spirit, Chestnut Run, Del-One, Delaware Alliance, Delaware First, Delaware State Police, DEXSTA, Dover, and Louviers.
     Remember, this cooperative marketing project will promote and support Delaware credit unions. Here are some of the key reasons to participate in the supplement: 

League Car-SUV-Truck Sale - October 25-26-27
     The Delaware League is having another car-SUV-truck sale, and we’d like your credit union to participate.
     It’s easy! The League provides sale brochures, personalized with your credit union’s information, in time for them to be included with your 3rd quarter statements. And, best of all, the brochures, posters and pre-applications are FREE! The only cost your CU might incur is a charge for mailing them with your statements.
     For more information or to request a sale packet, contact Susan Fallon (susan@dcul.org) or Charlie Jenkins (charlie@dcul.org). The deadline for your credit union’s commitment and sale information is August 24.

“Together We're Better” - This Year's ICU Day Theme
     Credit unions worldwide will rally under this year's International Credit Union Day (ICU Day) theme, "Together We're Better," on October 18. "This year's theme demonstrates the fact that credit unions serve their members most effectively and simultaneously strengthen the credit union movement, by working together at the local, state, national and international levels," said Dan Mica, president/CEO of the Credit Union National Association (CUNA). ICU Day celebrates the history, tradition and spirit of the international credit union movement.
     CUNA provides ICU Day information and promotional products that credit unions can purchase and distribute to generate excitement surrounding the celebration. Sample speeches, press releases, and ICU Day graphics are also available. Go to http://finlit.cuna.org and click on “Events.”

COMPLIANCE UPDATE

NCUA Posts Revised FCU Act
     The National Credit Union Administration has posted a revised version of the Federal Credit Union Act on its website. The amended act includes changes enacted by the 2006 Financial Services Regulatory Relief Act, signed into law October 13 of that year. The document can be found at http://www.ncua.gov/RegulationsOpinionsLaws/fcu_act/fcu_act.pdf.

NCUA Letter on Subprime Mortgage Lending
     The purpose of NCUA Letter to CUs #07-CU-09 is to provide all federally insured credit unions with the finalized Interagency Statement on Subprime Mortgage Lending. The Statement was issued jointly by the agencies of the Federal Financial Institutions Examination Council to address emerging risks and lending practices associated with certain subprime adjustable rate mortgage (ARM) products that can cause payment shock. Credit unions should be aware that whether or not they are actively participating in subprime mortgage lending, some members may have received these types of loans at other institutions. The letter is found on NCUA’s website at:
http://www.ncua.gov/letters/2007/CU/07-CU-09.doc.

NCUA Financial Education Library
     NCUA’s new library features innovative printable PDF brochures addressing such topics of consumer interest as identity theft, credit reporting, and credit card practices. They are available for consumers to view online and in printable format. To find these materials, go to NCUA’s website: http://www.ncua.gov/FinancialEducation/index.htm.

Compliance: Want Regulators’ Scrutiny? Here’s How
     What is one good way for a credit union to assure itself of increased scrutiny by its regulator? The Credit Union National Association (CUNA) tells credit unions they can almost guarantee that outcome if they choose to skimp on setting up proper screening processes for Office of Foreign Assets Control (OFAC) regulations. The OFAC regulations come into play when the credit union encounters a target on OFAC's Specially Designated Nationals (SDN) and Blocked Persons List. The credit union must either freeze the target's property or reject the transaction in accordance with the particular sanction program involved. More here: http://www.cuna.org/newsnow/archive/list.php?date=070507#31970.

More Guidance on EFT Errors
     Credit unions have sought further guidance on resolving Electronic Funds Transfer (EFT) errors, asking whether they can require written confirmation of a member's allegation of an EFT error before providing provisional credit, according to Valerie Moss, CUNA’s director of compliance information. In a July 5 News Now article, Moss described some of the most common errors credit unions make in addressing EFT errors, which inspired credit union inquiries. Regarding requiring written confirmation, Moss says that a credit union usually has 10 business days from the receipt of the member's error notice to resolve an EFT error; however, it may take up to 45 to investigate an error if it provisionally credits the member's account during the investigation period. However, she added that a section of the regulation that implements provisions of the Electronic Fund Transfer Act, Regulation E, does allow an institution that requires written confirmation of an EFT error to refrain from providing provisional credit if it does not receive the written notice within 10 days of an oral notice of an error. More on CUNA’s website: http://www.cuna.org/newsnow/07/wash071007-2.html.

Has Your CU Scheduled Its Annual ACH Compliance Review?
     The National Automated Clearinghouse Association (NACHA) requires all financial institutions that use a national ACH system to perform an annual ACH Review by December 1. This requirement applies to both Originating Depository Financial Institutions (ODFI) and Receiving Depository Financial Institutions (RDFI).
     The Delaware League has arranged for the Pennsylvania CU Association’s (PCUA) Audit Services to conduct an ACH Compliance Review in accordance with Appendix Eight of the ACH Rules for Delaware credit unions of all asset sizes. There are two prices: one for credit unions that only receive ACH entries ($850) and one for credit unions that both receive and originate ACH entries ($1,450). Travel expenses for the auditor are extra. The review normally takes one day to complete.
     To schedule your ACH Compliance Review, please contact Chris Feather, Director, PCUA Audit Services, at 800-932-0661, ext. 5271, or email chris.feather@pcua.coop.

CU SYSTEM NEWS

Mid-Atlantic Corporate FCU CEO Ed Fox Announces Retirement 
     Edward J. Fox, president/CEO of Mid-Atlantic Corporate FCU in Middletown, PA, has announced plans to retire in July 2008.
     Jay R. Murray, a member of Mid-Atlantic's senior staff, will succeed Fox as president/CEO. Murray has been with Mid-Atlantic for more than 10 years.
     Fox's retirement date coincides with his 65th birthday. Fox joined Mid-Atlantic in 1989 after nine years at the Federal Reserve Bank of Philadelphia as financial services officer. Before joining the Federal Reserve, Fox was an assistant vice president at First Pennsylvania Bank (now Wachovia) in Philadelphia. During his tenure at the corporate credit union, he has overseen the introduction and expansion of Mid-Atlantic's payment service offerings, including share draft processing, automated clearinghouse (ACH) services and the launch of a bill payment credit union service organization, MY CU Services.

MSN Money Article Creates CU Match Up Log Jam
     The national credit union industry and the League’s CU Match Up website, in particular, gained an astounding amount of attention recently when MSN Money columnist Liz Pulliam Weston published an article about the benefits of credit unions vs. banks. The article was titled “Ditch your bank for a credit union.”
     Pulliam Weston’s article directed readers to visit the League’s CU Match Up website, www.joinacu.org. CU Match Up is a user-friendly, web-based service that links potential members with credit unions.
     Pulliam Weston listed several distinctions between credit unions and banks, including these three: credit unions are member-owned; credit unions are not for profit; and banks hate credit unions, largely because credit unions are exempt from many state and federal taxes.
     She cited statistics from the Credit Union National Association (CUNA), stating that credit unions have a total of 90 million members nationwide, with savings of $8 billion per year because of reduced fees and better interest rates.
     She also noted that credit cards issued by credit unions don't usually carry annual fees, ATM charges are usually less at credit unions, and many credit unions offer free checking with penalties for overdrafts lower than those of banks.
     Weston concluded her article by saying that most people she knows who abandoned banks for credit unions are “thrilled they made the switch. If you’re sick of your bank, why don’t you follow suit?” (MSNMoney.com July 16).
     Interest generated by the article was tremendous, notes the California League, which runs the CU Match Up website that allows consumers in dozens of states – including Delaware – to search for a credit union they may be able to join. The article mentioned the Match Up site as a good resource for searching out a credit union, and plenty of consumers did just that, briefly crashing the CU Match Up website on July 16!

Speaking of CU Match Up…Is Your Credit Union Up to Date?
     Since 2000, the Delaware League has offered free to credit unions an opportunity to be a part of the CU Match Up database. CU Match Up is an easy-to-use website that allows consumers to search for credit unions they may be eligible to join, including yours, provided you participate! All Delaware credit unions are listed on the site, but individual credit unions need to provide the Delaware League with information on your credit union’s membership eligibility and branch data so that consumers are able to connect to your CU. Updating and maintaining your information could not be easier. All you need to do is contact Susan Fallon for more information. Reach Susan at 302-322-9341, or email susan@dcul.org.

Test Your Knowledge of Community Credit Unions
     The first annual Community Credit Union Conference will be held October 15-18 at the Mohegan Sun in Connecticut. This conference is designed for credit unions that have a community charter or are thinking about one. The sessions will cover a variety of topics that are key to making an impact and growing membership.
     For fun, click the following link to play a game and test your knowledge of community credit unions:http://resource.cuna.org/wbt/Marketing/CCC07/CCC07game.html.
     If your CU is interested in a scholarship to this event, contact Alice Smith at the League.

DELAWARE NOTES

Best wishes to Carolynn Belile as she retires as the manager of DELAWARE DEPARTMENT OF LABOR FCU after nearly 20 years of service to the CU. Welcome to Jennifer Balkum who officially becomes the new manager on August 1.

Congratulations to the members and volunteers of PENINSULA METHODIST FCU, which will be celebrating 40 years of service on August 8.

Our condolences to the family and friends of John A. “Jack” Ritter, Sr., who passed away on July 15. Jack served as secretary of DPL (formerly Delaware Power & Light) FCU for 40 years.

PREFERRED FINANCIAL FCU is using the concept of “target marketing” by currently featuring a car loan sale for young adults. The special rates are being marketed to 18- to 30-year-olds. In addition, the CU is offering a .25% discount for automated payments and another .25% discount for opening a checking account or getting a VISA card.

iBelong Credit Union Marketing Campaign Seen in Delaware
     Consumers in New Castle and Kent Counties are being exposed to a powerful marketing campaign about credit unions on Philadelphia TV stations. The Pennsylvania Credit Union Association rolled out its 18-month, $2.25 million iBelong advocacy/
marketing campaign on July 9. The commercials target females in the 25-49 age group, who control household financial decisions.
     The 30- and 15-second spots deliver a message that CUs are for everyone and feature a diverse cast of actors. The ads air on Channels 3 and 6 in Philadelphia, often on such shows as Good Morning America and Dr. Phil. They also appear on cable on the Learning Channel, Home and Garden Channel, and Food Network. All ads have a call to action, referring viewers to www.iBelong.org.
     The first ad will focus on the message of eligibility, with future ads delivering messages of family-friendly, easy to talk to, and people are great. Each message will run for approximately 4½ months.

EDUCATIONAL OPPORTUNITIES

August QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
•    8/01  Turbo Charged Marketing for Small CUs
•    8/09  Risk Based Lending
•    8/14  Website Compliance
•    8/22  Measuring Member Service/Satisfaction
•    8/29  Truth-in-Lending Act and Reg Z
Two-hour sessions run from 11 a.m.-1 p.m.:
•    8/14  Credit Union Incentives
     The fee for the one-hour session is $99; the fee for the two-hour session is $169. Deadline to register: one week prior to the session. Call Bernadette Hines to enroll.

NCUA Credit Union Development Workshop – Saturday, August 4, at the Hilton Washington DC, Silver Springs, MD. This free session, from 8:30 a.m.-3 p.m., will cover success and strategic planning, marketing, key ratios, and regulatory hot topics. For more information, go to: http://www.ncua.gov/CreditUnionDevelopment/Events/Index.htm. Should you have any questions, please contact your district examiner.

League Cards Council – Thursday, August 30, from 10 a.m.-noon at the League office. The session will be a credit card fraud update presented by the Pennsylvania Credit Union Association. There is no fee for Cards Council members. Non-council members: $75. Contact Jane Bailey to enroll.

SAVE THESE DATES!

October 15-17    Mid-Atlantic Corporate’s Financial Management Conference
                           Nemacolin Woodlands Resort
                           Farmington, PA

October 26-28    DE/MD/DC Annual Volunteer Leadership Conference (VLC)
                           Clarion Fountainbleau Hotel
                           Ocean City, Maryland

Check your mail over the coming weeks for more details on both of these conferences. Credit union volunteers can obtain a full brochure about the VLC by contacting Alice Smith at alice@dcul.org.


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).