Volume 28, Number 16                                                             August 30, 2008

HEADLINE NEWS

Don’t Miss This Year’s Volunteer Leadership Conference: Reserve Your Room Today
     Make plans today to join Delaware, Maryland, and DC credit unions on October 24-26 at the Clarion Hotel, Ocean City, for the 2008 Volunteer Leadership Conference.
     Board and supervisory committee members, as well as interested management staff, will take home valuable insights regarding the changing and challenging legislative, media, and economic environment. Additional sessions will feature Bank Secrecy Act training, credit union opportunities to help in the mortgage crisis, developing new leaders, and the greening of your credit union.
     Supervisory committee members will focus on loan file reviews and how to prepare a tough defense against fraud. Sunday will again feature the popular networking sessions for boards and supervisory committees.
     The conference schedule will include an opening reception on Friday, breakfast, lunch and breaks on Saturday, and a breakfast buffet on Sunday. This year attendees who arrive early on Friday can attend a prequel session from 4:30-5:30 p.m., which will introduce CUNA’s new E-Scan, a tool that CUs can use in strategic planning.
     Golfing enthusiasts can sign up for a golf outing beginning at 11 a.m. on Friday morning at Rum Pointe Golf Course. Cost: $40 per person.
     A complete packet of information has been sent to all credit union managers/CEOs and board chairmen. Additional copies can be obtained by calling Alice Smith at the League office. The information can also be found online at www.dcul.org/creditunions/index.htm. Click on the large box in the center of the page. The deadline for hotel reservations and conference registration is September 23, 2008.

NCUA Reports Fiscal Health of Credit Unions Remains Stable
     Federal credit union assets, loans, shares and membership showed consistent growth through the first sixth months of 2008, the National Credit Union Administration (NCUA) recently reported.
     The NCUA, which based its assessment on call report data submitted by the nation's 7,972 federally insured credit unions, said membership grew to nearly 88 million during that period.
     Also, bucking the recent trend, savings growth outpaced lending in the first six months of the year: savings grew a significant 7%, lending grew 3.7 %, and assets increased 6.5 % from January through June.
     “Although current mortgage and credit markets continue to cause fluctuations in the financial sector, the overall fiscal condition of federally insured credit unions remains stable,” said NCUA Chairman Michael E. Fryzel in a release.
     He added that first mortgage real estate loans grew by 10.1%, “illustrating that credit unions continue to meet their members’ mortgage loan needs.”
     Details of major balance sheet categories included:
•    Assets increased 6.5% to $802.5 billion from $753.4 billion;
•    Loans increased 3.7% to $546.4 billion from $526.9 billion;
•    Investments increased 17.3% to $167.0 billion from $142.5 billion;
•   The 7% increase brought shares to $676.9 billion from $632.4 billion;
•    Net worth increased 5.62% to $88.6 billion from $86.1 billion; and
•    Membership increased 1.3% to 87.9 million members.
     The NCUA also reported that the loan-to-share ratio was 80.72%. With the exception of declines in new automobile and other types of unsecured loans and lines of credit, all major loan categories grew.

COMPLIANCE RECAP

Fryzel Re-emphasizes Proper Third-Party Due Diligence
     The National Credit Union Administration (NCUA) continues to emphasize the importance of proper due diligence in setting up and maintaining third-party relationships. Due to the importance of this issue, the Delaware League hosted a session on the topic led by NCUA examiner John Morgan on August 27, which 21 credit unions attended.
     NCUA has said because credit union management retains fiduciary responsibility to members and the credit union in third party arrangements, it is imperative that credit unions keep in mind:

1. Board-established lending policies and procedures should be established to fit the product, with risk tolerance levels based on management analysis, established regulatory thresholds, and sound business rationale;
2. Loan growth should be slow and controlled, activity should be within reasonable risk thresholds, and building a concentration in a particular loan type and/or in an unfamiliar geographic area should be avoided; and
3. Broker and correspondent relationships need to receive ongoing due diligence commensurate with the risk and complexity of those activities, regardless of whether the third party has a credit union affiliation, such as being part of a credit union service organization.

     Use the resource links below to access the NCUA letters on due diligence and the NCUA's AIRES questionnaire on due diligence. Susan Fallon at the League can also provide you copies of these resources distributed at the session.
NCUA Letter 08-CU-19
NCUA Letter: Evaluating third-party relationships
AIRES Exam Software Information
NCUA Letter: Third-party relationships questionnaire (not distributed)

NCUA on Insurance Protection  
     NCUA has issued a letter to credit unions (08-CU-18) highlighting the resources available to help educate members about the benefits of share insurance coverage offered by federally insured CUs.
     The agency also announced that it will host a webinar, “Share Insurance 101,” this fall to provide additional information regarding share insurance protection. Information about the webinar will be forthcoming.
     NCUA encourages credit unions to help educate their members about insurance protection and how members can structure their accounts to maximize share insurance coverage. The agency offers resources online to help educate members. Go to
http://www.ncua.gov/ShareInsurance/index.htm to find the following documents:
•    Share Insurance Estimator – Allows members to estimate their amount of insurance coverage.
•    How Your Accounts Are Federally Insured brochure – Provides general information regarding share insurance coverage.
•    Your Insured Funds brochure – Provides a detailed explanation of share insurance coverage and offers coverage examples.
•    NCUA Increases Retirement Insurance Coverage bulletin – Explains the separate coverage provided for certain retirement accounts.
     Credit unions can order copies of the brochures in English and Spanish online at http://www.ncua.gov/Publications/pub_avail/pub_avail.html.  
     Member deposits in all Delaware credit unions are federally insured by the NCUA, through the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF is backed by the full-faith and credit of the United States government.
     Consumers who have federally insured funds in credit unions should rest assured their deposits are safe up to at least $100,000 per account, with additional coverage of up to $250,000 for certain retirement accounts. The fund has an equity level of 1.24% and is expected to end the year at 1.28%. No member has ever lost a penny of federally insured funds held in a credit union

Red Flags Compliance Resources
     Credit unions have been busy updating Bank Secrecy policies and procedures and writing Vendor Due Diligence policies. Now comes the reminder that the FACTA Red Flag policies are mandatory on November 1, 2008. That date is rapidly approaching – where can you go for help in getting these policies and procedures in place by the deadline?
•    The League has scheduled two seminars at our office: Compliance Workshop – September 4 and Implementing Red Flag Guidelines – October 7.
•    Sample policies – call Susan at the League.
•    The July issue of CUNA’s Credit Union Magazine featured an excellent article on the ID Theft Red Flags. 

CU SYSTEM NEWS

What Should CUs Do When Members Are Phished?
     A rash of recent phishing and vishing attacks against financial institutions has many credit unions looking for procedures for reporting and squelching the attacks.
     “Credit unions should have a contingency plan for these types of situations, similar to other business continuity plans,” said Dorothy Steffens, vice president of web services at the Credit Union National Association (CUNA). “The important piece is communication, to members and to staff,” she said. “Also, get the phishing site shut down and get the phone numbers disabled if it is a vishing scam,” Steffens said.
     A credit union can start by reporting the scam to its regulator and insurer. But to shut down a scam attempt, the credit union will need help. Go to the following article from CUNA’s News Now for more information on resources to use in this case: http://www.cuna.org/newsnow/08/system082008-11.html.

¿Habla español? So does the IRS! 
     The IRS provides a wide range of free products and services to assist individual taxpayers and business owners. The IRS Spanish website, www.IRS.gov/Espanol, offers tax forms, publications, and information.
     Toll-Free Telephone Assistance is available in Spanish on pre-recorded hotlines and from bilingual IRS representatives. The TeleTax line (800-829-4477) has recorded messages in Spanish that are available around the clock, covering more than 100 tax topics. The Refund Hotline (800-829-1954) provides information about a refund status in Spanish when a caller provides the filing status and the exact refund amount expected. The IRS toll-free customer service line (800-829-1040) has Spanish-speaking representatives ready to help taxpayers. For complete information, visit www.IRS.gov.   

10 Self-Study Courses From CUNA Approved for College Credit
     Ten courses from the Credit Union National Association’s (CUNA) self-study offerings were recently recommended for college credit by the National Program on Noncollegiate Sponsored Instruction (National PONSI). National PONSI is based on the position that it is sound educational practice to grant academic credit for high quality educational programs conducted by noncollegiate organizations, provided that these experiences are at the college level, and that the credit is appropriate to an individual’s degree program.
     The approved courses come from the Staff Training and Recognition Program (STAR) and the Management Enrichment Training Program (MERIT) and are offered in paper-based and/or online formats:

1. Security (S30) - covers employee and member safety and how to prevent losses.
2. Introduction to Credit Unions (S1304) - provides an in-depth overview of the credit union movement, with emphasis on the credit union difference.
3. Basic Accounting (S300) - explores fundamental accounting techniques, along with methods for recording transactions and adjustments.
4. Accounting for Credit Unions (S310) - analyzes the major accounts used in credit unions, related procedures and requirements, and the importance of internal controls.
5. Credit Union Financial Analysis (S320) - explains account relationships, along with key financial ratios and how to use them.
6. Loan Marketing (S420) - summarizes product and pricing concepts, product development, and loan design, as well as how to create a loan marketing plan.
7. Interpersonal Skills: Understanding Your Impact on Members (S520) - reveals the impact of communication and interpersonal style and supplies tools to enhance critical interpersonal skills.
8. Developing Exceptional Leadership (M09) - teaches skills for developing a progressive leadership style, encouraging staff commitment, and achieving success with integrity.
9. Strategic Thinking and Planning (M10) - illustrates planning techniques for long-term projects, overcoming pitfalls, preparing viable budgets, and dealing with plan changes.
10. Leading and Managing Credit Union Sales (M16) - offers a comprehensive guide to developing and managing a sales and service force and instilling a credit union service culture.

     For more information on these or other self-study offerings from CUNA, visit www.training.cuna.org and select the "Self-Study Certificate Programs" link, or call (800) 356-9655, ext. 4249.

DELAWARE NOTES

Best wishes to Joe Sisofo on his retirement as manager of WILMINGTON POLICE AND FIRE FCU at the end of July. Joe served the CU for 27 years, first as a board member and then as a staff member. He was named the full-time credit union manager in 1989. The board has named Maria Andrade-Gestwicki as the new manager.

DEXSTA FCU participated in the third annual ACORN (Association of CommunityOrganizations for Reform Now) financial workshop on Saturday, July 26. ACORN is a grassroots community organization that represents low and moderate-income families. The workshop was held at the Peoples Settlement Association Building in Wilmington. Peg Conway, DEXSTA vice president of operations, gave a presentation on financial products and services. She was joined by Yvonne Mason and Karen Terry.



DEXSTA FCU vice president Peg Conway
at ACORN financial workshop

For the second year in a row, DEL-ONE (DELAWARE FCU) received the distinguished
honor of being the only credit union to earn a spot on The News Journal’s 2008 “Best in the Business” list. Del-One ranked 10th overall out of 35 small companies in Delaware based on the categories of employee engagement, direction, managers, execution, career, conditions, and pay and benefits.
     When asked how he felt about the credit union making the Best in the Business 2008 list, Del-One President/CEO Richard “Duke” Strosser, said, “As an organization, we solicit and value our employees’ feedback; we strive for internal equity among all employees; and we make it our mission to maintain a diverse and well-trained workforce. It just makes good business sense to create a work environment where people can still build a career, earn a decent living, and make a difference in the lives of their neighbors and their communities. After all, the entire credit union movement was founded on the philosophy of ‘people helping people’ and we strive to never forget that.” 

EDUCATIONAL OPPORTUNITIES

September QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
     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.

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. Space is still available.

CU Volunteer Training: Board Fundamentals – Two times and locations: Monday, September 8, from 4:30-6:30 p.m. at Del-One’s corporate office at 270 Beiser Blvd., Dover. Also Tuesday, September 9, from 5:30-7:30 p.m. at the League office. Fee: $95. Space is still available. Call today!

Human Resource Council – Wednesday, September 17, from 10 a.m.-noon. Topic: Recruiting, training, and retaining Gen Ys. No fee for council members; $100 for non-members.

October 16: Business Mixer Golf Outing. Sponsored by the Louviers FCU and the Delaware League’s scholarship funds. Deerfield Golf & Tennis Club, Newark. Format: 18-hole scramble with skill prizes. 8:30 a.m. shotgun start. Fee $125 per golfer; $400 per foursome. Register by Oct. 3.

October 24-26: Volunteer Leadership Conference. Sponsored by the DE League and the MD/DC CU Association at the Clarion Hotel in Ocean City, MD. Information brochures are now available from Alice Smith at the League office.

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).