Volume 27, Number 24                                 December 30, 2007

    Delaware Credit Unions:
    The Year 2007 in Review

During CUNA’s annual Governmental Affairs Conference in February, Delaware received the CULAC Capitol Circle Award for the eighth straight year. The award is given for exceeding our fund-raising goals for the Credit Union Legislative Action Council (CULAC), and it is anticipated that we will pass our 2007 goal as well. To further our political advocacy goals, fifteen Delaware credit unions contributed over $5,000 in support of Credit Union House in Washington, D.C.

CUNA this year launched its “Little Guy” campaign, which appeared in videos sent to Capitol Hill offices, in cartoons published in Hill newspapers, and in “street theatre” where commuters heard a “banker” complaining about credit unions. The “Little Guy” represents the “everyman” that credit unions serve. The Delaware League used the “Little Guy” as the cover art for its sixth annual Credit Union Day Supplement, which appeared in The News Journal on October 16.

COMPLIANCE RECAP

CAMEL Matrix Gone for Exams After January 1
     Starting January 1, the National Credit Union Administration (NCUA) will eliminate the CAMEL Matrix and focus CAMEL evaluations on “risk consistent with NCUA’s Risk Focused Examination Program (RFE),” the agency reports.
     In its decision, NCUA cited concerns that some credit unions may target and measure performance against the Matrix rather than focus on broader risk management. “Targeting CAMEL benchmarks in the Matrix can lead to unsafe and unsound goals and may lead to poor business decisions,” said NCUA in a letter to federally insured credit unions (#07-CU-12).
     By eliminating the Matrix, NCUA said the focus will be on “evaluating a credit union's goals and determining strategic plans are realistic, tailored to the credit union's unique needs, reflective of the current economic environment, and ultimately, in the best interest of the membership.”
     The agency pointed out that the Matrix maintained an element of controversy even after it became an optional examiner tool because credit unions “do not have identical risk profiles or business models.” The Matrix applied static ratio benchmarks to every credit union.
     The NCUA said its examiners will continue the RFE practice to assign CAMEL component and composite codes for examination and supervision contacts. It said examiners will assign the “C,” “A,” and “E” component ratings without a matrix, following the approach currently used for assigning the “M” and “L.” The RFE practice to disclose CAMEL component ratings and the overall rating in the Examination Report Overview will continue. According to the letter, NCUA staff that use CAMEL will receive training prior to implementation.
     Use the following link to access NCUA’s complete letter to credit unions:  http://www.ncua.gov/News/Express/xfiles/07-CU-12.pdf

Fed Adjusts Asset Threshold for HMDA
     The Federal Reserve Board has published its annual notice and final rule of the asset-size exemption threshold for depository institutions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The adjustment is effective January 1.
     The asset-size exemption for depository institutions will increase from $36 million to $37 million based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for a twelve-month period.
     Financial institutions with assets of $37 million or less as of December 31, 2007, will be exempt from the data collection requirements in 2008.

New Pandemic Guidance for CUs
     The Federal Financial Institutions Examination Council (FFIEC) has issued guidance for all financial institutions to use to minimize the effects of a pandemic disaster.
     This guidance is intended to supplement the “Letter to Credit Unions 06-CU-06 - Influenza Pandemic Preparedness” issued by the National Credit Union Administration in March 2006, as well as the “Interagency Advisory on Influenza Pandemic Preparedness” issued on March 15, 2006, by the federal banking and thrift regulators.
     The new FFIEC document identifies actions that a financial institution should take to build its business continuity plan (BCP). Such a plan should include planning for a pandemic event and provide for a preventive program, as well as:
•    A documented strategy scaled to the stages of a pandemic outbreak;
•    A comprehensive framework to ensure the continuance of critical operations, and
•    An oversight program to ensure that the plan is reviewed and updated.
     The FFIEC advised that the pandemic segment of a BCP must be sufficiently flexible to address a wide range of possible effects that could result from a pandemic and also be reflective of the institution's size, complexity, and business activities.
     The FFIEC is comprised of representatives from the NCUA, Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.
     To read the interagency guidance, go to http://www.ots.treas.gov/docs/4/481029.pdf.

NCUSIF Dividend for 2007 Unlikely, Says Agency
     A dividend from the National Credit Union Share Insurance Fund (NCUSIF) to federally insured credit unions for 2007 is unlikely, said National Credit Union Administration (NCUA) staff during the December board meeting. Meanwhile, the board voted unanimously to maintain the 2008 NCUSIF normal operating level at 1.3% and approved a policy to determine and monitor future levels.

NCUA Puts Strategic Plan out for Comment
     During its December meeting, the NCUA Board released for comment the agency’s five-year strategic plan and revised its National Credit Union Share Insurance Fund (NCUSIF) investment policy. The five-year plan covers 2009-2014 and is based on NCUA’s mission of “providing a safe, sound credit union system.” The NCUA strategic plan highlights three major goals:
•    Ensure a safe, sound, and healthy credit union system;
•    Increase access to financial services to all eligible individuals within the credit unions’ fields of membership; and
•    Provide a flexible and efficient regulatory environment for all federal credit unions.      The proposed plan includes specific objectives for how the goals will be attained. The strategic plan will be open for comments for 60 days.
     To access the draft strategic plan online, go to http://www.ncua.gov/ReportsAndPlans/plans-and-reports/index.html. Comments are due by February 29.   

Media Advice for ’08: Join a CU
     Major media outlets are turning their financial focus to 2008 and offering consumers advice. Two well-known media – Dow Jones News Service (December 26) and The Washington Post (December 23) – have included credit unions in their suggestions.
     In The Washington Post, a woman was advised to go to a CU for a car loan. In Dow Jones, columnists Gail Liberman and Alan Lavine told “How to Reap Greater Benefits from Your Bank in 2008.” Among their tips: credit unions “tend to be cheaper” in ATM fees and on car loans and other types of loans.

Survey: Credit Concerns Not Limited to Mortgages
     If there were ever a time your members needed help with setting their budget priorities, it's now. Yet another nationwide survey documents that credit concerns for consumer households aren't limited to mortgages.
     The mortgage sector's woes are spilling over into the broader economy and affecting consumers’ ability to pay all their bills, according to a survey of more than 1,000 U.S. households by Online Resources Corp.
     Americans increasingly are being forced to prioritize among their bills by creating a “delinquency budget” to determine which bills get paid. While mortgage bills are the bills households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. The survey found:
•    One out of four households reported they were delinquent on at least one bill by at least 30 days;
•    If forced to choose between which bills to pay, 98% would likely pay the mortgage first;
•    Credit card, phone, healthcare, utility and loan payments are among the bills least likely to be paid.

Please Respond to CUNA Survey
     The CUNA Annual Survey will be mailed out to all US credit unions at the start of January. This year a special question has been added that should enable CUNA to help credit unions find more sources for back office services. 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. Credit unions can sign up to complete the survey on the web using http://resource.cuna.org/econstat/yearbook/qstpre.html
     The time required to complete the survey should be under 10 minutes. CUNA hopes 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 or mshafroth@cuna.coop.

DELAWARE NOTES

DOVER FCU is pleased to announce that David Clendaniel, President/CEO, has been appointed to serve as a member of the prestigious Filene Research Council. The Research Council, critical to the overall success of the Filene Research Institute, consists of  thirty-five outstanding credit union leaders from across the nation. Mark Meyer, Executive Director and CEO of the Filene Institute, states that the council “provides great insights into issues affecting the future of credit unions and consumer finance.”
     David also serves on the advisory committee for Region II of the National Association of Federal Credit Unions (NAFCU), CUNA’s Consumer Protection Subcommittee, and the Central Delaware Economic Council.

Congratulations to Peg Conway, vice president of operations for DEXSTA FCU, who successfully completed CUNA's challenging compliance expert program between May and December 2007 and achieved her Credit Union Compliance Expert (CUCE) designation. Peg joins Renee Thompson of DEL-ONE (Delaware FCU) in receiving her CUCE.

DEXSTA FCU’s winter clothing drive was featured in The News Journal’s “Help Us Help” listing of events on December 24. New or gently used winter clothing collected at the CU’s four offices will be distributed through the non-profit Friendship House and its Clothing Bank of Delaware. Marketing administrator Karen Terry said the project is expected to expand to include employees’ volunteering with Friendship House in the coming year.

President/CEO. Mid-sized credit union, located in New Castle County, is seeking qualified candidates for President/CEO. The position requires extensive credit union management experience. We offer an excellent benefits and salary package. Please send your resume to: Credit Union CEO Position, c/o the Delaware Credit Union League, 4 Quigley Boulevard, New Castle, DE 19720.

EDUCATIONAL OPPORTUNITIES

January QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
      •  1/08  A Look at Thieves From Within
      •  1/16  Cross Selling
      •  1/29  Bank Secrecy Act
The two hour session runs from 11 a.m.-1 p.m.
      •  1/10  Reg CC (check clearing)
The fee for the one-hour sessions is $99; the two-hour session fee is $169. The deadline to register with Bernadette Hines: one week prior to the session.

Certified Financial Counseling School. The Maryland/DC Credit Union Association will host CUNA’s Certified Credit Counseling School, January 14 - 17, 2008, at their Columbia Office. The school is Part 2 of the Counseling School hosted in 2007 (you do not need to have completed Part 1 to attend). This school is designed for staff members who work in financial counseling, member servicing, collections, or loan departments. Attendees will discover ways to help members prevent and resolve financial problems. Fee: $1,395 for the week or $395 per day. For a full brochure, call Alice Smith at the Delaware League.
 
Help in Preparing NCUA’s 5300 Report – January 15. NCUA Examiner Debbie Barton will come to the League office on January 15 to help credit unions under $20M in assets prepare this year-end report required by NCUA. Debbie will lead a general session on 5300 changes beginning at 5 p.m. At that point, she is willing to work with CUs one-on-one in filling in their report or troubleshooting difficult items. A January 17 snow date is planned. There is no fee to attend, but your CU must enroll by contacting Alice Smith at the League by January 10.

2008 CEO Summit. January 21-24, 2008. Key West, Florida. It is still not too late to enroll, although you will need to contact the hotel directly to see if rooms are available. Currently, League president Pat Mahaney, Don DiMatteo from Preferred Financial FCU, and Dawn Sutcliffe from Delaware Alliance FCU will be attending. The tuition is $650. For more information, go to, http://training.pcua.coop/on_site/PAA1218_fct.html

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).