Volume 27, Number 21 November 15, 2007
HEADLINE NEWS
Dover FCU Opens New Corporate Center
Dover Federal Credit Union held the grand opening of its new corporate center on November 15, 2007, as part of the expansion plans of the credit union. The new facility is located at 1075 Silver Lake Boulevard, off Walker Road in Dover.
“The opening of the Silver Lake Corporate Center will bring immediate gains in efficiencies, as well as enhance service to our members from the call center,” comments David Clendaniel, CEO/President. “This location will allow Dover Federal Credit Union to improve upon our staff education as well as enable us to provide additional financial literacy offerings to our members and the community. Finally, the space available for expansion will be of great value as we work to achieve the future plans established by the leadership of the credit union.”
The 20,000 square foot facility, formerly a call center, sits on 11.5 acres. The building houses the administrative, marketing, training, data processing, accounting, operations, and call center departments.
Dover FCU has over $222 million in assets and 35,855 members. The credit union will retain its branch at Dover Air Force base, in addition to branches in North and West Dover, Smyrna, and New Castle. Additional branch expansion is in varying stages of planning and implementation for New Castle, Camden, and Milford. Dover Federal expects to open its Milford branch in early 2008, with Camden and New Castle branch openings to follow.
National Media Again Recognizes the Value of CU Membership
Credit unions provide the best deal when it comes to banking, according to an article that appeared in the December issue of Money Magazine.
The article, titled "The Best Little Deal in Banking," cited five reasons why you should join a credit union, including five basic products that credit unions offer to their members at competitive prices (Money Magazine, December 2007).
For example, an auto loan at a credit union is like "french fries at McDonalds – classic and reliable," the article stated. According to the Government Accountability Office, credit union auto loans carry two percentage points less than auto loans at big banks.
Other services mentioned in the article are Home Loan Payment Relief (HLPR) mortgages, financial counseling, online banking, higher yield share certificates, and lower interest rates on credit cards.
In related news, financial editor Jean Chatzky, on the Today Show and in her MSNBC.com column, says credit unions are the best place to go if a consumer is a small saver or a car-loan borrower. Chatzky, who is an editor-at-large for Money magazine, analyzes the "best banks for your buck." She discusses four types of financial institutions: large national banks; small local or regional banks; credit unions; and online banks.
For small savers, she said, fees are the biggest concern (MSNBC.com, October 21). People in this category should consider a free checking account with no balance requirement and no monthly service fees for writing checks. Her advice: Go with a credit union, which can save $140 a year. On the Today Show, she directed consumers to the Credit Union National Association's website to find a credit union.
NCUA NOTES
FCUs May Receive and Hold Visa Stock
NCUA issued a legal opinion (07-1022; 11-01-07) that said federal credit unions may accept and hold Visa stock in connection with Visa’s conversion to public ownership. Visa U.S.A. will become a subsidiary of Visa, Inc., as part of restructuring; and Visa member institutions will receive stock in Visa, Inc., calculated on the basis of fees they have generated. Member institutions will not compensate Visa, Inc., for the stock; they will receive the stock without taking any further action; and no cash or other rewards to members are available in lieu of the stock.
Generally, the FCU Act does not authorize FCUs to invest in any companies other than CUSOs. Visa is not a CUSO. However, NCUA said that federal credit unions may receive and retain the Visa stock because it is a by-product of lending, which is a permissible activity for federal credit unions, and does not require federal credit unions to invest in an otherwise impermissible investment.
NCUA also cautioned that FCUs may receive and retain the stock unless the examiner determines that holding the stock is a safety and soundness problem for the credit union.
If you would like a copy of the NCUA attorney’s opinion, you can access it at the following website: http://www.cuna.org/download/nn110107_ncualtr.pdf.
NCUA: Mergers, Expulsions Different Under BSA
Judy Graham of the National Credit Union Administration's (NCUA's) Office of Examination and Insurance told credit union representatives that if a member is conducting transactions that appear suspicious under Bank Secrecy Act (BSA) rules, a credit union may have to think outside the box if it decides the member should be expelled. Graham said normal procedures for expelling a member might not work in a BSA situation because the credit union could inadvertently tip the member to the existence of a Suspicious Activity Report (SAR) filed, thereby violating BSA rules.
Normally, Graham reminded her audience, a credit union has two ways to expel a member: an expulsion vote or through nonparticipation—both falling under the Federal Credit Union Act. However, in a suspicious activity scenario, a credit union should consider the following actions:
Graham also addressed BSA issues as they relate to credit union mergers. She advised credit unions looking at a merger partner to become very familiar with their intended partner's BSA history. She said the resulting credit union should investigate the merging entity's BSA policies and procedures to determine if any gaps exist and any remedial work is necessary. The lead credit union must examine such things as the potential partner's member-due-diligence procedures, suspicious activity monitoring procedure, profile and number of high-risk accounts, currency transaction report exemptions granted to members, and any pending BSA actions against the credit union.
Common Errors Noted in SAR Reporting
FinCEN has noticed some common errors in the filing of SARs and believes that publishing an explanation of the ten most common of these errors and ways that they can be mitigated could be informative to financial institutions.
FinCEN has identified three areas where financial institutions should concentrate their efforts to ensure complete SAR information. They are: (1) SAR narratives, (2) certain critical fields that allow users to analyze quickly where activity has occurred, and (3) fields that identify the type, category and character of the suspicious activity. There are suggestions that may reduce incomplete and/or incorrect SARs.
If you would like a copy of the “Suggestions”, they can be obtained on FinCEN’s website, http://www.fincen.gov/SAR_Common_Errors_Web_Posting.pdf.
SYSTEM NEWS
Fires Bring Reminders to Have Disaster Recovery Plans
With Southern California wildfires burning more than 283,000 acres, destroying about 700 homes and 100 businesses, the need for credit unions to have effective disaster recovery plans is in the forefront.
"It is important to have a business continuity plan because you need to have people, resources and tasks lined up so you know how to respond to a disaster," Lee Milligan, senior project leader with Strohl Systems, commented. Strohl provides Internet-based business continuity plans for credit unions and is a CUNA Strategic Services Provider.
For credit unions that have established continuity plans, their actions should mostly be review and refresh, Milligan said. He listed two critical areas:
Having a disaster recovery plan in place is the first step to make sure a company's customers can reach it, said Chuck Reagan, president/CEO of VoiceGard, a company that provides service to restore telephone capabilities after a catastrophic system failure or loss of facilities. VoiceGard also is a CUNA Strategic Services Provider.
"Many small credit unions don't think anything bad will happen to them," Reagan commented. "Most outages that occur are small ones, such as a power outage for a period of time. However, their effects can steamroll. Someone hitting a pole outside your building can take out a credit union's telecommunications and Internet. Then a member will call the credit union and not get a response."
The California wildfires show that credit unions cannot outguess a disaster; there is no way to predict it. If the credit union does not have a good, sound plan is place, then it is already too late, he said.
"It is important that credit unions know how to continue business operations," Reagan explained. "Employees and members need to know where to make phone calls, if there will be temporary branches in trailers, where employees need to report, and where members need to report to do business."
Disaster recovery plans are mandated by state and federal regulators, stated Mike Retelle, CUNA Mutual disaster team leader. He said that credit unions need to have a template to follow so they know how to go about serving members and meeting any type of disaster.
"Without a template, you will spin your wheels – and time, money and energy will be wasted," he said. "Part of the template is how you respond to other agencies, such as the National Credit Union Administration (NCUA), not just members."
Gift Cards – Great for the Holidays
Credit unions can expect a 15% increase in gift-card use by consumers during the holiday season, with card purchases expected to be reaching more than $40 billion. Prepaid debit and credit gift cards are a growing share of the market.
According to research by Kiplinger's, gift cards will account for about 7% of gift spending this holiday season, compared with 4% in 2003 (Kiplinger.com, November 2).
In the latest edition of the League’s Services Issues newsletter, executive vice president Jane Bailey confirms the value of offering gift cards to your members. Through a turn-key program coordinated by the League, your CU can establish a gift card program with no enrollment fee, no monthly fees, no hardware/software to buy, and no long-term commitment. You only pay for the cards you order, plus shipping. And at a total cost of less than $1.50 per card, this is a very low-risk, low-effort, high-value product.
For more information on how you can offer a Visa Gift Card program, contact Jane Bailey by calling the League or emailing jane@dcul.org.
DELAWARE NOTES
DEL-ONE (Delaware) and DEXSTA FEDERAL CREDIT UNIONS were exhibitors at the 17th annual Women’s Expo on November 1st at the Chase Center on the Riverfront.
On November 3, LOUVIERS FEDERAL CREDIT UNION was one of five sponsors for the Delaware Solid Waste Authority’s 5th Annual Hazardous Waste Collection Event at the Frawley stadium parking lot. In addition to accepting electronic equipment, chemicals and other hazardous materials, this year shredding trucks were added to the event so citizens could have their sensitive documents destroyed as well.
MID-ATLANTIC CORPORATE FCU can process United States Savings Bonds for member credit unions. Members who participate in this service must be a paying agent of the United States Treasury for sale and redemption of savings bonds. Credit Unions forward the items to Mid-Atlantic for encoding. The Corporate will forward credit to the member once it is received from the Federal Reserve Bank. For more information, contact your Corporate account manager.
Credit Union Position Sought. Individual with over 20 years experience in the financial services industry seeks a credit union position in any of the following areas:
• Consumer and business lending - working with personal, home equity, line-of-credit, and mortgage loans from application to closing;
• Member service - opening checking/savings accounts and share certificates, as well as assisting with other investment needs;
• Would also consider the operations or audit department - ensuring compliance with policies and procedures and fraud issues.
For a copy of the complete resume, contact Susan Fallon and ask for resume #11-07-07.
EDUCATIONAL OPPORTUNITIES
November QuickBites Teleconferences
The one-hour session runs from 11 a.m.-noon:
• 11/20 Indirect Lending
The two-hour session runs from 11 a.m.-1 p.m.
• 11/28 Business Development
The fee for the one-hour session is $99, and the two-hour session, $169. Deadline to register with Bernadette Hines: one week prior to the session.
Professional Councils
• Financial Management Council: “Economic Overview for 2007 and Beyond.” Wednesday, December 5. Register with Charlie Jenkins.
• Cards Council: “Consumer Regulations and Your Plastic Cards.” Thursday, December 6.
• Mortgage Council: “The Perfect Storm – Why Did the Mortgage Market Go So Wrong So Fast?” Tuesday, December 11. Register with Jane Bailey for both the Cards and Mortgage Councils.
All three sessions will be held at the League office from 10 a.m.-noon. There is no fee for council members. There is a $75 participation fee for non-council members.
IRA Training (Essentials and Advanced). November 27 and 28 respectively. 9 a.m.-4 p.m. $250 registration fee per day. The Essentials session is designed for those new to the IRA process. The Advanced session covers more complex IRA issues, including what’s new and IRA contributions, distributions, and required minimum distributions.
RESERVE THE DATE!
2008 CEO Summit. January 21-24, 2008. Key West, Florida. For more information, go to: http://training.pcua.coop/on_site/PAA1218_fct.html
The early bird tuition is $575 until December 7. The deadline for hotel reservations at the Casa Marina Hotel and Beach Club is December 21.
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The League office will be closed Happy Thanksgiving! |
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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).