Volume 28, Number 15                                                             August 15, 2008

HEADLINE NEWS

Get Ready for International Credit Union Day
     On October 16, raise awareness about the great work that your credit union is doing and express appreciation to your members. This year's theme is My Credit Union: It Belongs to Me.™
     Artwork for this year's International Credit Union (ICU) Day theme and sample materials for marketing and public relations are available online from the Credit Union National Association and the World Council of Credit Unions.
     Credit unions can download materials, which can be customized and include a press release, advertisement, model letter to the editor, newsletter article, proclamation, talking points and a speech. The materials soon will be available in Spanish.
     Graphics are available in English and Spanish and include the “It Belongs to Me” poster featuring a globe of photos of credit union members. Four different logo icons and coloring pages for kids also can be downloaded.
     International Credit Union Day has been celebrated every year on the third Thursday in October since 1948. On that day, credit unions offer open houses, picnics and community service events to show appreciation for their members and staff.
     For more information, use this link: http://finlit.cuna.org/icuday_index.html.

ICU Day Promotional Products: Order By September 12 and Save. Hand out official International CU Day print materials, promotional products, and clothing to your members, staff, and volunteers during your celebration. Download your ICU Day Planning Worksheet online at http://finlit.cuna.org/download/ICUD08_planning_wrksht.pdf to help you plan your order. Save at least 10% on standard ICU Day products when you order by September 12. Place your order online or call 800-356-8010, press 3.

NCUA, Mid-Atlantic Corporate Respond To WSJ Article
     An article entitled “Mortgage-Market Trouble Reaches Big Credit Unions” appeared in the August 11th Wall Street Journal. This article primarily addresses the impact of current market conditions on fair values of mortgage-related securities held by five corporate credit unions. The article notes as of May 31, five corporate credit unions have reported $5.7 billion in accumulated unrealized losses on available-for-sale securities. Additionally, the article discusses the reclassification of some securities from available-for-sale to held-to-maturity on the balance sheets of U.S. Central FCU and Western Corporate FCU.
     In response to the article, NCUA issued a statement emphasizing that it “continues to provide prudent regulatory oversight and close supervision of the corporate credit union system. NCUA’s Office of Corporate Credit Unions (OCCU) continues to dedicate its resources to ensuring corporate credit unions are managing their balance sheets appropriately during this stressed market affecting mortgage-related securities. OCCU will not change its regulatory strategy as a result of this article.”  
     Mid-Atlantic Corporate FCU recently sent a letter reassuring its members that “Mid-Atlantic remains as solidly positioned as ever.” The letter, signed by Jay Murray, President/CEO, advises members that “Mid-Atlantic does not invest directly in Residential Mortgaged Backed Securities (RMBS), Commercial Mortgage Backed Securities (CMBS), Collateralized Debt Obligations (CDO), or Specialized Investment Vehicles (SIV), and thus has no risk exposure to these types of investments directly on our portfolio. Mid-Atlantic does have some exposure to these types of securities through the funds we hold with U.S. Central. Currently U.S. Central is holding their securities portfolio to maturity and their investment holdings are continuing to earn and perform as expected. Mid-Atlantic continues to monitor and conduct our due diligence on all our investment sources.”

COMPLIANCE NOTES

Red Flag Deadline November 1: Is Your Credit Union Ready?
     The FACT Act mandates that all institutions with covered accounts develop and implement an identity theft prevention program by November 1, 2008. On a practical level this means that almost all credit unions must comply with this mandate.
     We are now in the countdown to implementing the new FACT Act rules for Identity Theft and Red Flags. Are you ready for the mandatory compliance date of November 1, 2008? Have you conducted a thorough risk assessment? Do you know who will be covered and who won’t? Have you written your policy and procedures? Have you trained your staff and gotten approval from the board?
     The main highlight of the final rules implementing section 114 of the FACT Act requires credit unions to:

1. develop a written identity theft prevention program, and
2. assess the validity of address change requests when followed closely by a request for an additional or replacement credit or debit card.

     The main highlight of the final rules implementing section 315 of the FACT Act requires credit unions to adopt policies and procedures to allow the credit union to confirm a credit report is for the actual consumer rather than an identity thief posing as the consumer when a notice of address discrepancy is returned by a consumer reporting agency.

League Offers Training Session. To help credit unions prepare for this upcoming compliance deadline, the Delaware Credit Union League will host a session on October 7 at the League office from 9 a.m.-noon. The session will cover the Act’s requirements and guidelines. Sample policies, checklist, and matrixes will be provided. The cost of the session is $125 for the first registrant and $99 for all others. The registration deadline is September 16!
     An earlier full-day session addressing Red Flags, as well as other compliance issues such as mortgage lending, the Bank Secrecy Act, field of membership litigation, data security, and changes in Truth in Lending (Reg Z) will be held on September 4 at the League office from 9 a.m.-4 p.m. The registration deadline for this event is almost here – August 21! The fee for the full-day session is $195.

Caution Against Using Social Security Numbers for Accounts
     Another issue is raised by compliance with the FACT Act, which will require credit unions to identify patterns, practices, and specific activities that indicate the possible existence of identity theft. The FACT Act also established rules requiring financial institutions and other creditors to develop policies and procedures for implementing the guidelines to identify possible risks to consumers or risks to the safety and soundness of the institution.
     While federal law does not prohibit credit unions from using members’ Social Security numbers (SSNs) as account numbers, NCUA Letter to Credit Unions No. 00-CU-02 (May 2000) on identity theft prevention recommends that credit unions discontinue the use of birth dates, SSNs, and driver’s license numbers as account numbers or personal identification numbers. In addition, the letter suggests that credit unions restrict the addition of unnecessary data on printed documents; for example, SSNs printed on documents such as pay or loan distribution checks, parking permits, staff badges, time sheets, mailing labels, account statements, etc. In addition, SSNs or account numbers that appear on mortgage documents may appear as public record. 
     NCUA suggests these restrictions as “best practices,” rather than regulatory requirements. However, with the tremendous increase in identity theft, it is a good idea for credit unions to move away from the use of SSNs as account numbers. Unfortunately, the widespread use of SSNs as a primary identifier has made it easier for ID thieves to do their dirty work. [This article is reprinted from a Maryland/DC Credit Union Association newsletter.]

Fed Adjusts Trigger for Mortgage Disclosures
     The Federal Reserve Board has published its annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act (TILA) for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $583 for 2009 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1. The adjustment is effective January 1, 2009.

CU SYSTEM NEWS

Pennsylvania’s Electronic Lien Law Is in Effect
     This is a reminder that as of August 1, the Pennsylvania Department of Motor Vehicles no longer issues paper titles to lienholders. You must provide your electronic lien and title number to whoever records your lien. If an “Application for Duplicate Title or to Record, Renew, Remove a Lien, or to Correct Lien Information by Lienholder” form (MV-38L) is submitted to Pennsylvania without the lienholder’s number, the state will reject the form. For further information, click here: MV-38L Form  and ELT Quick Reference Guide.

League Offers Training Session. The Delaware League will hold another group training session for the Electronic Lien Program on Wednesday, August 20, at 10 a.m. at the League office. The training should last 1-1 ½ hours. Most of Delaware’s credit unions that have enrolled in the program through our League have already been trained. This is an additional opportunity for your CU to send staff members that were unable to attend prior ELT training sessions.
     Remember, any credit union that wishes to become a vehicle lienholder for a member who resides in Pennsylvania must use an electronic lien provider to process the lien, no matter how many liens you file in the course of a year.
     So, if you are new to the program and haven’t been trained or if you are thinking about joining the program soon, this training opportunity is for you. There is no fee to attend the training. Contact Jane Bailey at the League to sign up for the August 20th training or to get information on how to enroll in the program.  Please note: It may take 6-12 weeks (or longer) for a credit union to implement this program.

Shared Branching Network Opens Outlets in Delaware
     A milestone event was marked on July 7 when the first shared branching outlet opened in Delaware. Chestnut Run FCU is live as both an issuer for its members and as an acquirer to perform transactions for other CU members who are part of the network. Chestnut Run FCU’s main office, as well as its Glasgow branch, became the first shared branches in the “First State.”
     Last year, the Delaware League signed an agreement to allow PaCUSC (Pennsylvania Credit Union Service Centers) to assist Delaware credit unions in joining the shared branching network.
     Chestnut Run FCU and American Spirit FCU in Newark are the two Delaware credit unions live on shared branching. Eagle One FCU’s branch in Claymont is also in the network. There are 35 credit unions on the network in Pennsylvania. Nationwide, there are nearly 1,500 credit unions participating in shared branching. Contact Jane Bailey for more details.

DELAWARE NOTES

Congratulations to the members, staff, and volunteers of DELAWARE ALLIANCE FCU, which is celebrating its 45th anniversary on August 20.

The Claymont community and EAGLE ONE FCU joined together on August 5 for National Night Out. The annual event was held at Woodshaven-Cruse Park in Claymont. National Night Out is intended to heighten crime and drug prevention awareness, generate support for anti-crime programs and to strengthen neighborhood spirit. At the Eagle One tent, the CU distributed over 150 free flashlights, frisbees, tote bags and magnets with local emergency numbers. The credit union has been a proud supporter of the Claymont community since opening its branch office in 2004.

Lending Manager: Del-One (Delaware FCU) in Dover is seeking an individual to manage the daily operation of the consumer lending department: reviewing loan compliance, monitoring economic conditions affecting lending, and overseeing the lending staff. Requirements: Completion of an Associate’s Degree or equivalent course studies in a related field, at least five years of related work experience in a financial institution, or equivalent combination of education and experience as a loan officer. Three years of real estate lending and supervisory/managerial experience preferred.  Professional, well-developed interpersonal skills necessary for supervising CU lending staff and servicing members. Send resume and cover letter with salary requirements to the attention of: Vice President of Human Resources, 270 Beiser Blvd, Dover, DE 19904 or email humanresources@del-one.org.  EOE/D/V

Position Sought: E-Learning Developer: Individual seeks a position designing and developing online training courses. Has CU experience. Call Susan Fallon for resume
# 08-12-08.

Position Sought: Full-time Teller: Individual with 25 years CU/banking experience as an assistant or head teller. Seeks position in mid-Kent or Sussex County. Call Susan for resume # 08-06-08.

EDUCATIONAL OPPORTUNITIES

August /September QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
•  8/20  Pay Day Lending Seminar
•  8/26  Decedent Accounts: When a Member Dies
•  9/04  Retaining & Expanding Member Relationships 
•  9/09  Plastic Card Fraud
•  9/24  Post Judgment Collections
•  9/30  Internet Security
The two-hour session runs from 11 a.m.-1 p.m.
•  9/18  Account Administration
The fee for the one-hour sessions is $99; the two-hour session is $169. The deadline to register with Bernadette Hines is one week prior to the session.

Third Party Due Diligence – Wednesday, August 27, from 10 a.m.-noon at the League office. Because CUs provide some sensitive member information and core business processes to third party vendors, NCUA has made “third party relationships” a top regulatory exam topic in 2008. NCUA is interested in how CUs handle relationships related to lending services, auditing and management consulting services, and asset liability management. The session will be presented by NCUA examiner John Morgan. Fee: $65. Register with Jane Bailey by August 20.

Compliance Workshop – Thursday, September 4, from 9 a.m.-4 p.m. at the League office. Topics: Fair Credit Reporting – red flag warnings; mortgage lending; Bank Secrecy Act; NCUA issues; Truth-in-Lending changes; and data security. Speaker: Bruce Jolly. Fee: $195. Regis. deadline: August 21.

League Activities in June - August

COMMUNICATIONS/PUBLIC RELATIONS

            League Provides CU Resources. In response to the IndyMac Bank collapse, the League immediately sent out sample letters and articles that credit unions could use to reassure their members about their safety and soundness. A press release with Delaware CU data was also sent to the major newspapers in the state. These resources, along with links to NCUA and CUNA resources, were very well received. Subsequently, the League posted all those resources on our website. Materials can be found by clicking on this link -- http://www.dcul.org/creditunions/safety_soundness/july_2008.htm. There are also articles on the consumer side of the League’s webpage. In addition, the August 4th edition of CUNA’s News Now reported the following:

The Delaware Credit Union League reported the state’s credit unions are responding to members’ concerns (Together July 31). Dover, DPL, Provident and SussexCounty FCUs issued talking points for front-line staff highlighting credit unions’ financial strength. EWOD FCU plans to send a brochure on the insurance fund to all members. New Castle County School Employees FCU reported a “good number” of calls from members wanting to know whether their money was insured and for how much. In all cases, the credit unions assured members they were well-capitalized and had no relationships with the subprime market.

            CEO Meet and Greet. Many thanks to David Clendaniel and Dover FCU for hosting the CEO Meet and Greet on June 25. Although attendance was lighter than we had hoped due to board and NCUA meetings, those attending certainly enjoyed the fellowship and informal discussion. Pat Mahaney and Alice Smith represented the League at the event.

            Staff Travel. Communications director Alice Smith attended the first day of the American Association of Credit Union Leagues’ (AACUL) Communicators/Government Affairs Specialists Conference in Washington on June 24. Education director Bernadette Hines attended AACUL’s Educationand Training Conference on July 7-10 in Baltimore. 

            Delaware League News and Risk Alerts. The League emailed 19 news alerts and 11 risk alerts during June and July. Topics included new CUNA initiatives, economic news, and new ID theft and check scams.

GOVERNMENTAL AFFAIRS

             Homes for the Troops Initiative. Homes for two soldiers wounded in Iraq will be presented at both the Democratic and Republican National Conventions later this month and early September, including the Golden, Colorado, home for SSgt.Travis Strong, and the St. Paul, Minnesota, home for Sgt. Marcus Kuboy. Contributions from the credit union movement have surpassed the fundraising goal of $300,000. The League’s Governmental Affairs Committee donated $710 (Delaware’s fair share goal) to the cause and challenged credit unions and their members to match this contribution. To date, the League has learned that Dover, American Spirit, and Delaware Alliance have accepted this challenge. A full listing of Delaware contributions will appear in an upcoming issue of Together.  

            CULAC Candy Sale. The League is again organizing a candy sale to help Delaware reach its 2008 CULAC goal of $5,346.89. So far, we have reached 33% of the goal. The candy sale helps to meet that goal.

            CURIA Bill Update. Regulatory Relief H.R. 6312 has been sent to the Senate for consideration and has been referred to the Senate Banking Committee. CUNA has made many contacts with the Senate Banking Committee staff and certain members of the committee. Obviously, the legislative calendar is not our friend since Congress will be adjourning at the end of September.

            Credit Card Fair Fee Act. Working with the other members of the Electronic Payments Coalition, CUNA continues to closely follow and strongly oppose the four bills that would regulate interchange fees.  

LEAGUE SERVICES

            ELT Program. League staff members Jane Bailey and Charles Jenkins have trained 35 CU staff from 14 CUs on the Electronic Lien & Title program offered in partnership with the Pennsylvania CU Association (PCUA).  Two more credit unions are scheduled for training. (See article in this week’s Together.)

            Reverse Mortgage Seminar. The League held a reverse mortgage seminar, facilitated by Don Jeffries of Academy Mortgage, for CU members on July 23. Those in attendance remarked on how valuable the information was. The League invited all credit unions to market the event to their members.

            Mid-Atlantic Corporate’s Annual Meeting. Pat Mahaney and Jane Bailey attended Mid-Atlantic Corporate’s annual meeting and retirement reception for Ed Fox on June 19. Also attending from Delaware were Jerry King, Chris Kaczmarczyk, Steve Cimo, John King, Allen Riley and David Clendaniel.

EDUCATION

            Recent Education Sessions. In the past two months, the League has offered sessions on deposit account compliance, credit scoring, and supervisory skills. The Marketing Council heard a presentation on “Strategic Marketing for Loan Growth: Using Credit Prescreens for Target Marketing.” Both Cards Council and Marketing Council members learned about what works in cards marketing.

            Board Training. Pat Mahaney provided CU board development training for board members of Stepping Stones FCU, which is currently working to obtain a charter. In addition, Pat hosted two sessions on board officer roles in July for credit union volunteers.

            Volunteer Leadership Conference. The brochures have been completed for the Volunteer Leadership Conference, which will be held from October 24-26 at the Clarion in Ocean City, MD. Each credit union CEO/manager will receive the full brochure, along with board and supervisory committee chairs. A postcard will be sent to all other volunteers, and information will be posted on the League website. The registration deadline for the conference and hotel reservations is September 23, 2008.

June and July Education Sessions

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).