Volume 27, Number 6                                         March 30, 2007

HEADLINE NEWS

Presidential One-Dollar Coins! Start Your Collection Today!
     Presidential One-Dollar Coins are new collectibles that commemorate the Chief Executives of our nation. The first coin, honoring President George Washington, was released on Presidents’ Day, February 19th. Later this year Presidents Adams, Jefferson and Madison will likewise be honored. 
     Credit unions participating in this program will need to sign a fund-raising agreement. When your members obtain a set of these Presidential coins, they will have contributed to a very worthwhile endeavor, Credit Union Legislative Action Committee (CULAC). This CULAC contribution helps credit union supporters in their elective efforts in 2008. This program enables your members to help meet CULAC goals.
     CULAC is again partnering with MPI Coin to offer the Presidential dollar coin in an attractive packet that includes two uncirculated coins (one each from the Philadelphia and Denver mints) and historical information about each President and first lady. There will be four Presidents honored each year.
      For more information on this program, contact Alice Smith at the League office.

Help Your Members to Save; Teach Financial Literacy
     Ronni Cohen, executive director of the Delaware Literacy Institute/Delaware Money School, and her staff spoke at the recent Marketing Council meeting regarding building a partnership with credit unions in providing financial literacy training to Delaware consumers. Delaware credit unions can participate in several ways:
     1) Sign up to join the First State Saves Alliance, a program designed to promote and increase savings and the accumulation of wealth among individuals and families in Delaware. This program does not require a credit union to create a special savings account, since credit unions already offer no fee or low cost savings accounts. Rather, a participating credit union will be asked to distribute First State Saves information and brochures to your members. Your credit union may also be asked to participate in planning meetings or to offer financial support for this program. For more information on this program, contact Alice Smith at the League office.
     2) Sign up to be a volunteer instructor for the Delaware Money School. The Delaware Literacy Institute’s main goal is to provide financial literacy training for children and adults. Currently the agency has more requests for training than they have trainers (especially in the Dover area). If you would be willing to be a speaker, please call Alice at the League for a contact name.
     3) Publish your own credit union’s financial seminars in the Delaware Literacy Institute’s quarterly newsletter, which will be published around May 1, so items must be submitted very soon. For contact information and a sample of the newsletter, go to the agency’s website: http://www.delawaremoneyschool.com/
     The League is planning to help promote First State Saves and to provide articles about credit unions for upcoming publications.

CU Net Worth up to a Record 11.5%
     U.S. credit unions remain healthy and continue to provide high levels of member service with net worth at a record level, according to the Credit Union National Association's (CUNA) Economics and Statistics Department. CUNA economics recently summarized the 2006 year-end financial results for credit unions and analyzed the results released by the National Credit Union Administration (NCUA). Among the findings:

• Healthy earnings and slow asset growth pushed the credit union net worth ratio up to a record 11.5%.
• Net income as a percentage of average assets was little changed at 0.83% for the 12 months that ended in December. An inverted yield curve, combined with strong growth in high-cost liabilities, translated into little change in credit unions' interest margins, and slow asset growth caused operating expense ratios to increase marginally. In contrast, fee and other non-interest income inched up and loan loss provisions decreased, when compared with full-year 2005 results.
• Total loans grew by 8.1% in 2006, compared with an increase in 2005 of 11%. Member business loans (MBLs) and real estate loans represented the fastest-growing segments of loan portfolios. MBLs were up 24.4%, and home equity lines of credit/second mortgages increased 15.2%. Credit cards and first mortgages reflected above-average growth with 12-month increases in balances of 11.3% and 10.3%, respectively.
• CU savings balances increased by 4.4% in the year, slightly exceeding the 4.1% rate of growth in 2005. The recent slow growth is a direct reflection of the negative household savings rate.
• The loan-to-savings ratio stood at 82.3% at the end of December – its highest year-end level since the 1970s.
• Asset quality remains strong with a 60-plus-day dollar delinquency rate of 0.68%, compared with 0.73% at year-end 2005, and a net charge off rate of 0.47%, compared with 0.54% in 2005.  (Source: CUNA NewsNow 2/07)

NCUA NOTES

NCUA Board Declares Dividend
     At the March NCUA Board meeting, the Board declared a 1% dividend and will return $52 million to federally insured credit unions. The dividends were to be electronically distributed by March 23. 
     The Board also voted to issue a proposal adding an optional model consumer privacy notice in a form that has been designed to be easier for consumers to understand. The model form contains a table for credit unions to insert their actual information-sharing practices, a page with definitions, and questions and answers, followed by the opt-out form on page three.
     In another action, the Board issued a proposal revising its rules on records' preservation and record retention to ensure that credit unions are prepared to preserve vital records and restore essential member services after a catastrophic event. The proposal revises the term "catastrophic event" to mean any event causing an interruption in "vital member services" for more than two business days.

NCUA’s 2007 Exam Focus
     At CUNA’s 2007 Governmental Affairs Conference, the NCUA described the agency’s current exam focus and concerns in a PowerPoint presentation. The overview focused on the following:

• Bank Secrecy Act Compliance Issues
• Information Technology Authentication
• Liquidity and Credit Issues
• Disaster Preparedness
• CAMEL Rating Components

Click here for NCUA’s Powerpoint Presentation.

Letters to Credit Unions

• Letter to Credit Unions 07-CU-04. NCUA has announced the 2007 Community Development Revolving Loan Fund (CDRLF) Technical Assistance Grant Program. A federal CU wishing to participate in the CDRLF’s programs must be designated as a “low-income” credit union as set forth in Part 701.34 of NCUA’s Rules and Regs. 
• Letter to Credit Unions 07-CU-05.  This letter highlights credit union financial trends for year-end 2006. View both letters on the NCUA website: http://www.ncua.gov/letters/letters.html.

NCUA Phishing Scam
     Credit unions are reporting that members are again receiving phishing e-mails that appear to be sent from NCUA. The message includes NCUA’s logo and is addressed to “Credit Union holder account.” The first paragraph states, “Your credit union has joined our Federal Credit Union (FCU) network. For both, our and your security, we are asking you to activate an online account on our database. After activation you can login on our system with your SSN and your Credit/Debit PIN number.” The message includes a link to the “FCU activation page” and concludes with “National Credit Union Administration Team apologize for any inconvenience.”
     Remind your members that NCUA does not ask credit union members for personal account information. An Internet/E-mail Fraud Alert is posted on NCUA’s website: www.ncua.gov. Anyone who has received a fraudulent phishing e-mail purportedly from NCUA should forward the entire e-mail message to Phishing@ncua.

IRA Deadline Is April 17!
      Contributions to IRAs can be made up to April 17th for tax year 2006. The information return has to be given to the member and the IRS no later than May 31st. Penalties are assessed for the failure to file the return on time with the IRS and for failure to file it with the member. Penalties range between $15-$50 per return with certain maximums depending on the institution. IRS Form 5498, IRA Contribution Information, can be found at http://www.irs.gov/pub/irs-pdf/f5498.pdf

NACHA Releases 2007 ACH Rules
     The National Automated Clearing House Association (NACHA) has just released the 2007 ACH Rules: A Complete Guide to Rules and Regulations Governing the ACH Network. The rules were updated in accordance with the March 16, 2007, changes, which include information regarding the 2007 rule changes and their operational impact, as well as required software changes. NACHA strongly encourages financial institutions to purchase the new rules. Credit unions interested in purchasing a copy of the ACH Rules or learning about related training opportunities, can contact SWACHA at http://www.swacha.org or call (214) 438-4585. There are 12 amendments to the NACHA Rules effective in 2007. Details surrounding the amendments can be found at www.nacha.org.

SYSTEM NEWS

Dover FCU Awards Dinner
     On March 6 more than 60 employees, friends and family members of Dover Federal Credit Union gathered to acknowledge the educational achievements and recognize the outstanding member service provided in the year 2006. The CU acknowledged 27 staff members who completed more than 1,160 hours of online training during the year. Carol Scott was recognized for becoming the first Dover FCU employee to complete the entire series of 134 online classes.
     “We appreciate such dedication to education from our staff,” said Dover Federal Credit Union President David Clendaniel. “To have logged more than 1,160 training hours is amazing. When you consider that a majority of the classes were completed on the employees’ own time, you know that they understand the value of knowledge.”
     The following staff members were recognized for providing more than 110 years of service to the members/owners of the CU: Dee Riley (25 years), Gene Lohrman (25 years), Lorraine Miller (15 years), Tricia DeLong (10 years), Bobby Naftzinger (5 years), Bernadette Monroe (5 years), Dottie Hopkins (5 years), Teresa Helmers (5 years), Libby Gates (5 years), Linda Bullock (5 years), and  Viola Ansley (5 years). Each received a commemorative plaque engraved with the number of years of service.
     
BauerFinancial Ratings
     Kudos to the following CUs that received 5-star ratings from BauerFinancial, Inc., an independent financial institution rating and research firm: American Spirit, Chestnut Run, Delaware Alliance, Delaware State Police, Del-One, DEXSTA, Dover, DPL, First State Refinery, ICI America, Milford Memorial, New Castle County Delaware Employees, New Castle County School Employees, Preferred Financial, Provident, Seaford, U-Del, and Wilmington Postal. The ratings are based upon 2006 year-end financial data as reported to financial regulators. Five stars (superior) is the highest rating given by the firm. Three additional CUs received four-star (excellent) ratings: Delaware River and Bay Authority EFCU, Louviers, and Sussex County. Credit unions with less than $1.5 million in assets are not rated.

Go Direct Marketing Materials Available
     Go Direct has announced a new marketing tool for credit unions and other financial institutions interested in promoting direct deposit of government assistance and other checks.
     Go Direct, a nationwide campaign by the Treasury Department and Federal Reserve Banks intended to boost Americans’ use of direct deposit for government checks, said in a recent release that the first of the month is one of the best times to promote Go Direct.
     It is during that time, the campaign said, that people are visiting their depository institutions to cash or deposit their federal benefit checks. That is the inspiration behind the campaign’s new marketing tool—a 2-inch by 1.25-inch Go Direct deposit slip sticker, which features the Go Direct toll-free helpline number and website address.
     “When someone cashes a Social Security or SSI check, tellers can simply attach the Go Direct sticker to the deposit slip and encourage them to sign up for direct deposit – the safest, easier way to get their federal benefit, ”  the release said.
     The stickers are free to financial institutions. For  more information, go to the Go Direct website:http://www.godirect.org/partners/index.cfm

CUNA Offers Spanish Certification eSchool
     With "CU Spanish: Level 1" certification, participants of the CU Spanish Certification eSchool can advance their ability to serve Spanish-speaking credit union members by learning financial terms in members' preferred language. The school is conducted in 10 weekly classroom sessions at 2 p.m.-3:30 p.m. EDT on Tuesdays from April 24 to June 26.
     The Credit Union National Association (CUNA) eSchool is designed for all levels of credit union staff with previous Spanish-language experience, who wish to learn credit union-specific financial terms. Participants also will receive a Spanish vocabulary CD to use as a reference. To earn Level 1 Credit Union Spanish Certification, students must pass a proctored midterm exam and final exam. Fees associated with testing are the responsibility of the registrant. For more information, go to http://training.cuna.org/elearning/eschool/ESC1047_fct.html.

CLASSIFIEDS

Marketing/E-Commerce Manager. Sun East Federal Credit Union, conveniently located between Philadelphia and Wilmington, is seeking a talented Marketing & e-Commerce Manager for its Aston, PA, location. Candidate should be a strong, results-oriented professional who can lead and coach a dynamic marketing department in achieving outstanding results. Must have solid understanding of financial analysis/ budgeting and proven PC/ Internet, writing, and communications skills. Bachelor’s degree in business, marketing or related field is required; MBA preferred. Minimum of 4 years marketing management experience desired; 5-7 years of hands-on marketing experience also required. Knowledge of MCIF systems and e-commerce strategies desired. The CU offers a pleasant working environment, competitive salary, and a great benefits package. Qualified candidates should submit their resume and salary requirements to:
            Human Resources
            Sun East Federal Credit Union
            P.O. Box 2231
            Aston, PA  19014
            Fax # 610-485-7517
            Email: hradmin@suneast.org

Loan Consulting Services Available. Individual with credit union experience desires to help CUs with training their loan officers. The cover letter states, “I have over 20 years experience in lending, which includes commercial lending, consumer lending, and mortgage lending. During the past 20 years I have worked with the secondary market, SBA, FHA, and Fannie Mae loans. At Star USA Federal Credit Union I was responsible for establishing the commercial loan department including operations and training of the staff.” For a copy of this resume, please contact Ruth Lawley at the League office and ask for resume #03-29-07.

EDUCATIONAL OPPORTUNITIES

March/April QuickBites Teleconferences
One-hour session – 11 a.m.-noon
     • 4/3   Check Fraud
Two-hour session – 11 a.m.-1 p.m.
     • 4/5   CU 101: Introduction to Credit Unions
The fee for the one-hour session is $99; the two-hour session is $169. Deadline to register: one week prior to the session. Call Bernadette Hines to enroll.

Council Meetings
     • Human Resource Council. Wednesday, April 4. Topic: “Best Practices in Hiring and Promotions for Credit Union Staff.” R.S.V.P. to Bernadette Hines
     • Mortgage Council. Thursday, April 5. Topic: “Housing Industry Update.” R.S.V.P. to Jane Bailey.
     Sessions are held at the League office from 10 a.m.-noon, ending with lunch. There is no charge for council members. Non-council members can attend for a fee of $75.

NCUA Small CU (under $10M) Conference – Saturday, April 28, from 8 a.m.-3 p.m. at the Hilton Philadelphia Airport. No charge for this session. The agenda and registration form can be found at http://www.ncua.gov/CreditUnionDevelopment/Events/Index.htm

Mark Your Training Calendars!

May 2               Supervisory Committee Duties
                           5:30-8:30 p.m., League office
May 15             Information Technology (IT) Compliance
                          10 a.m.-noon, League office
May 22             Teller Fundamentals Training
                           Full day, League office
June 5              Everything You Wanted to Know About NCUA, But Were Afraid to Ask,
                           9 a.m.-noon, League office
June 14            Bank Secrecy Act (BSA) Training
                           10 a.m.-noon, League office
Contact Bernadette Hines for more information.

League Activities in March

COMMUNICATIONS/PUBLIC RELATIONS

            Credit Union Journal Article. An article written by League president Pat Mahaney appeared in the February 26 issue of The Credit Union Journal. Pat responded to a question addressed to state leagues regarding the perceptions of whom credit unions are supposed to serve that we encounter in the media, in the public, and among politicians. Pat’s response (which did not appear with a byline) was titled, “‘Sizable Disconnect’ Calls for More Action.”  Here is the content of what was published:

            In Delaware, the League sees a sizeable disconnect between the public, politicians, and the media regarding credit unions. 
            Each group holds multiple views or perceptions of whom, what and where credit unions serve. Consumers, in general, think credit unions are advocates for the average working man and woman. The media see them as a business entity trying to survive in economically challenging times and being challenged at every turn. Politicians are beginning to see credit unions as a politically adept and savvy group, but have difficulty defining them.
            The public ("the little guys") believe they should have the right to belong to any financial service entity they choose. They worked for it, they earned it, and they believe they should be able to save or borrow where they please. They know a credit union is a good deal but aren't sure they can belong.
            The media has run hot and cold on credit unions – generally hot when the story will sell. However, most of the media ignore the issue as not being worth the effort.
            Politicians however are charged with developing the law of the land. They are the stewards of the rules governing how we live, work and do business. Having that in mind, they are now struggling to define eligibility to join a credit union. Major issues include how the definition of “modest means” fits into the original credit union charter, why credit unions are restricted to narrowly defined geography and banks can be global, and how to deal with the perception that competition between credit unions and banks seems to be one-sided in favor of banks.

GOVERNMENTAL AFFAIRS

            CUNA’s Governmental Affairs Conference. Nineteen Delaware credit union members attended CUNA’s Governmental Affairs Conference in Washington at the end of February. The following credit unions were represented: American Spirit, Delaware State Police, DEXSTA, ICI America, and Sussex County. In addition, the following individuals went down for the Hill visits on a van sponsored by the GAC Fund: Jack Cable and Jim Green, American Spirit; Savannah Jarrell, Delaware Alliance; George Fitzgerald, DPL; and Alice Smith from the League. The visitation teams were able to spend a few minutes with Senator Carper and Congressman Castle and their aides. Senator Biden was not available, but his senior policy advisor, Jim Greene, spent over an hour with the delegation. The League provided each office with copies of CUNA’s legislative priorities for 2007, as well as information about how credit unions are different from banks.

            Delaware Receives CULAC Award. During the GAC conference, Delaware received the CULAC Capitol Circle Award for the eighth straight year for exceeding our fund-raising goals for the Credit Union Legislative Action Council (CULAC). In 2006, CU members in Delaware surpassed our goal of $5,260.11 by raising $5,337.25. Special recognition goes to DEXSTA FCU, which participates in the Deduct-a-buck program and the coin program to raise funds for CULAC. Delaware FCU and New Castle County School Employees FCU also participate in the quarterly Deduct-a-buck program. The League also recognizes Marie Davis, who continues to serve as our CULAC Trustee.
            Thanks to Delaware credit union members who participated in the CULAC raffle held at the GAC. This year, Delaware had three raffle winners: Sam Minutola, who won the Texas item; Dawn Sutcliffe, Rhode Island; and ironically Bob Walls, a basket of Delaware goodies. The Grand Raffle at the GAC broke all previous records with over $72,000 raised for CULAC. Special thanks go to the Governmental Affairs Committee which sponsored the Delaware basket and to everyone who bought or sold raffle tickets.

            CURIA Bill Introduced in Congress. A new version of the Credit Union Regulatory Improvements Act (CURIA), HR 1537, was introduced in the 110th Congress on March 15 by Reps. Paul Kanjorski, D-Pa., and Ed Royce, R-Calif. As introduced, HR 1537 would (among other things):
            * Incorporate the National Credit Union Administration's PCA reform/risk-based capital proposal to modernize net worth standards, thus freeing up additional capital for credit unions to provide their members with better and more affordable services.
            * Clarify the 1998 Credit Union Membership Access Act to allow all credit unions, regardless of charter type, to serve those in underserved areas. The bill would also update the definition of an underserved area, incorporating definitions from the CDFI Act and the New Markets Tax Credit.
            * Increase the current cap on loans to members for business purposes (MBLs) from 12.25 percent to 20 percent of assets, allowing credit unions to assist more members in starting and expanding small businesses and to promote economic growth. The bill would also exempt loans under $100,000 and those to nonprofit religious organizations from the MBL calculation.
            * Establish additional consumer safeguards to ensure even greater participation and transparency in the process of converting credit unions to another type of financial institution, including the requirement that at least 30 percent of a credit union's members participate in any vote to convert to a mutual savings bank.
           
EDUCATION AND TRAINING
           
            Professional Councils. Tom Monahan, a retired master sergeant of the Wilmington Police Department and president of the private investigation firm Monahan, Monahan & Golt, presented “Strategies to Assist Pre & Post Judgments” on March 13th to the Collection Council.
            Ronnie Cohen, exectuive director of the Delaware Financial Literacy Institute/Delaware Money School, discussed the First State Saves Program, as well as the resources of the Delaware Financial Literacy Institute on March 22 to our Marketing Council.

February Education Sessions

LEAGUE PRESIDENT’S REPORT

            Recent Travels. Pat Mahaney has recently attended five credit union annual meetings and has completed six credit union visitations. In March, he attended the CUNA Mutual/League Presidents’ Dialogue Session and a meeting with the NCUA Regional Director.

            League Building Renovations. Work will begin in April to renovate the League office at 4 Quigley Boulevard in New Castle. To remedy a water problem in the basement, several trees around the perimeter of the building have been removed, and the basement will be resealed. A new roof will also be installed.
           

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).