Volume 28, Number 2                                                                January 30, 2008

HEADLINE NEWS

Delaware Credit Unions Support New Personal Savings Initiative
     On January 29, Wilmington launched the "First State Saves" campaign, kicking off a series of events to encourage Delawareans throughout the state to build wealth and get out of debt. At a news conference at the Louis Redding City/County Building, about 50 people gathered to champion the value of hoarding more cash.
     The First State Saves campaign attempts to raise awareness and spur people to positive action, said Ronni Cohen, executive director of the Delaware Financial Literacy Institute, which is coordinating the campaign. An offshoot of the national America Saves campaign, First State Saves will officially launch statewide on February 26.
     Similar to awareness campaigns like "Buckle Up" and "Don't Drink and Drive," the campaign offers a website (www.firststatesaves.org) with savings tips, a personal wealth coach, access to low-fee accounts at local banks and credit unions, and information on free financial education classes. 
     Two local credit unions have already signed up to participate in the program – Delaware Alliance and Eagle One. Delaware Alliance also provided giveaways for the event and is offering a special First State Saves Account to support the program. According to the credit union’s newsletter, the account is an additional share savings account that will earn an extra 1% dividend over the credit union’s regular savings account on balances up to $1,000. Once the account reaches a balance of $500-$1,000, the member can either withdraw the funds or reinvest them in a Delaware Alliance FCU share certificate at a rate ¼% above regular certificate rates.
     If your credit union would like to consider becoming a First State Saves Financial Partner, contact Alice Smith at the Delaware League. Or call Delaware Alliance CEO Dawn Sutcliffe regarding her credit union’s program.

Chartering of a New Delaware Credit Union Moving Forward
     The chartering papers have been submitted and now a new location has been obtained, as a new credit union seeks to open in Delaware.
     Rashmi Rangan, executive director of the Delaware Community Reinvestment Action Council, announced that the agency recently received a $100,000 grant from the Longwood Foundation to renovate a building on North Church Street in Wilmington to serve as a low-income community credit union and personal finance training center.
     The credit union has been tentatively named “Stepping Stones,” because its mission will be to offer financial services to low-income residents as an alternative to high-interest payday lenders. The credit union plans to offer small loans, and financial counseling will accompany every loan to ensure borrowers will be able to repay it smoothly, according to Rangan.
     In addition to the credit union, the building will also have a computer center on the second floor, where people can come to bank online, check a credit score, or learn about buying a house.

“Get on the Van” for Delaware Credit Unions’ Hike the Hill
     The League’s Governmental Affairs Committee is providing transportation to Washington on Wednesday, March 5, for our annual “Hike the Hill.” Now is the time to relay your CU stories to Senators Biden and Carper and Congressman Castle and their staffs, so that they will help to pass key legislative issues enabling CUs to continue to grow and serve more of the underserved.
     There will be two pick-up points – at the League office and on Route 299, off the Route 1 exit near Odessa. Pick-up times will be determined later. If you are interested in going to Washington on March 5, please call or email Alice Smith (alice@dcul.org) by February 15.

NCUA NEWS

NCUA Warns of HELOC Scams
     The National Credit Union Administration (NCUA) has issued a fraud alert (#08-Fraud-01) concerning recent fraudulent activity involving members with Home Equity Line of Credit (HELOC) accounts. Several financial institutions, including credit unions, have reported fraudulent wire transfers performed on HELOC accounts. This scam is similar to what was reported in an alert issued recently by CUNA Mutual Group.
     The alert advises that credit union management should have sufficient controls in place to ensure the proper authentication of members. Management should also make certain that their employees are properly trained in recognizing questionable activity on member accounts.
     In the reported fraud events, the imposter apparently obtained publicly available HELOC information and, combined with social engineering tactics, obtained access to member accounts, initiated a draw on a member’s HELOC account, and subsequently initiated a wire transfer from the account. These funds were then wire transferred out of the credit union.
     Where appropriate, a credit union should file a Suspicious Activity Report in accordance with established regulation. As specified by NCUA Rules & Regulations, Part 748, management must provide notice to the appropriate NCUA Regional Director, and, in the case of state-chartered credit unions, to their state supervisory authority. Local law enforcement authorities should also be notified.
     To read the entire alert, go online to: http://www.ncua.gov/News/Express/xfiles/08-FRAUD-01.pdf.

Federal CU Rate Set for 18 Months
     The NCUA Board voted at their January meeting to continue the 18% interest rate ceiling for loans and lines of credit advances made by federal credit unions. The ceiling is set for an 18-month period from March 10 through September 10, 2009. The agency will issue a Letter to Federal Credit Unions to notify those institutions of the rate decision. The current 18% ceiling was due to revert to 15% on March 10 absent NCUA's action. As required by Congress, the NCUA will review this rule again in 18 months or sooner if economic conditions warrant.

CUs Advised on NCUA’s 2008 Top Examination Issues
     Third-party vendor relationships and strategic planning were the topics of a January 29 NCUA webinar on key credit union examination issues for 2008, moderated by board member Gigi Hyland.
     Dominick Nitro, information systems officer in the NCUA's Office of Examination and Insurance, noted that credit unions find vendor relationships in many areas or operations, such as lending services, auditing and management consulting services, asset liability management, Bank Secrecy Act and Office of Foreign Asset Control compliance, data processing, and internet banking services.
     He discussed two key elements of an effective program, which he identified as good risk assessment and planning and effective due diligence work. Nigro also indicated that an effective program must address the different levels of risks that may be associated with different vendors. 
     Effective due diligence must also include background checks, review of the vendor's business model, and the vendor's financial condition. Board member Hyland specifically highlighted the need to review legal agreements with vendors and to ensure compliance with all applicable state and federal laws.
     The other important element discussed was the need for written policies and procedures for measuring, monitoring, and controlling risk. Although CUs may refer to samples that other credit unions use, they are cautioned to use them as a starting point and to adjust them, as necessary.
     On the topic of credit union strategic planning, Debra Tobin, NCUA supervisory examiner and economic development specialist, said that planning documents should include a strategic plan, business plan, and budget and should vary in intricacy with the size and complexity of the credit union. She also discussed a planning process that credit unions may use and that performance measurement should include a method to measure, monitor, and report results as well as make changes as necessary. An inadequate planning process, she said, can result in material losses to the credit union's earnings and/or net worth.
     The webinar will be posted on the NCUA website in about a month and will include a "frequently asked questions" section that will address all the questions that were raised by credit unions during this webinar.

Next Two Months Full of Education and Training Events
     The League’s current “Meetings Reminder” is full of course offerings for credit union staff and volunteers. The eight traditional QuickBites teleconferences are listed at the end of this newsletter. For registration brochures for any of the events below, contact education director Bernadette Hines at 302-322-9341 or email Bernadette@dcul.org.

Creating a Small Credit Union Strategic Plan. NCUA examiners are requiring CUs to provide a strategic plan (see preceding article). To help small CUs under $20M in assets to fulfill this requirement, strategic planner Jim Merrill will moderate this session on Saturday, February 16, from 9 a.m.-1 p.m. at the League office (snow date 2/23).This session is designed for managers/CEOs and interested volunteers. Cost: $80 for two people.

CU Volunteer Program: Board Strategic Planning. This session, led by Pat Mahaney, is designed to get board members up to speed in understanding the purpose and intent of a strategic plan, so they can better understand what NCUA is requiring. Cost: $95 per person. Session repeated twice:
          •  February 20, Del-One, 270 Beiser Blvd., Dover, 4:30-6:30 p.m.
          •  February 27, League office, New Castle, 5:30-7:30 p.m.

Supervisory Committee Roundtable. A credit union's supervisory committee chair or another committee member is encouraged to come to this first “council” session designed to discuss issues specific to a SC’s duties and responsibilities. Registration forms will be sent to each committee chair. Space is limited to one person per credit union. Date: February 25 from 5:30-8 p.m. at the League office. Cost: $25.

Policies and Procedures and How to Write Them. During this session led by Carolyn Warden, participants will gain hands-on experience writing and editing policies and procedures. Tips will be given for communicating your credit union’s rules. Date: February 26 from 9 a.m.-3:30 p.m. at the League. Fee: $150.

More information on March events can be found in the next issue of TOGETHER.

CUNA Mutual Risk Management Webinars Announced
     CUNA Mutual Group is offering six free risk-management webinars designed for credit union bond policyholders. The webinars aim to provide credit union staff with insight and best practices to improve their programs. This year's sessions include:

• Disaster Preparedness – Prepare for the Unexpected (March 12 & 16 at 10 a.m. & 2 p.m.);
• The New Wave in Payments – Risks on the Horizon (May 14 & 28 at 10 a.m. & 2 p.m.);
• Director Responsibilities – What Every Director Should Know (July 9 & 23 at 1 p.m. & 6 p.m.);
• Fiduciary Risk – A Sleeping Giant Ready to Awake? (July 9 & 23 at 10 a.m. & 2 p.m.);
• Plastic Card Fraud Trends (September 10 & 24 at 10 a.m. & 2 p.m.); and
• Credit Union Service Organizations (CUSOs) – Controlling Risk to Drive Reward (November 12 at 10 a.m. & 2 p.m.).

     Participants will need a computer, an Internet connection, a Web browser and a telephone. Registration opens 45 days before each class. For more information, go online to: http://www.cunamutual.com/cmg/freeFormDetail/0%2C1248%2C14654%2C00.html.

DELAWARE NOTES

Congratulations to Margaret Webb, collector at AMERICAN SPIRIT FCU, who recently earned her financial counseling certification by completing Parts 1 and 2 of CUNA’s Certified Financial Counselor School. Margaret was the recipient of a League scholarship for the first school held in the fall.

Nearly 80 credit union leaders from Pennsylvania, Delaware, Maryland, New Jersey, and West Virginia attended the 2008 CEO Summit in Florida in January. Delaware was represented by Dawn Sutcliffe, DELAWARE ALLIANCE CEO; Don DiMatteo, PREFERRED FINANCIAL board chair; and Pat Mahaney, League president.

Branch Member Service Representative Supervisor. Delaware State Police FCU - New Castle Branch. Qualifications: Must be accurate in cash handling and transaction processing with a strong attention to detail. Must understand credit union/financial institution front line services and procedures. Must possess a high school diploma or equivalent. Experience in a related field with equal responsibility is acceptable. Ability to use calculator and computer equipment. Ability to deal effectively with members. Must have the ability to communicate effectively in both oral and written forms with people at all levels. Must be able to use routine office equipment. Must be bondable and have an acceptable personal credit history.
Please submit your resume and letter of interest to Human Resources, DSPFCU, PO Box 800, Georgetown, DE 19947, or e-mail bcahall@dspfcu.com by Friday, February 8, 2008.

February is “Go Direct” Month
     Go Direct, a campaign conducted by the U.S. Department of the Treasury,encourages people who receive Social Security and other federal benefits by paper check to protect themselves by switching to direct deposit. CUNA & Affiliates is a national partner in the Go Direct campaign, and CUs are encouraged to promote this to their members.
     Easy ways for credit unions to participate in and promote Go Direct include displaying Go Direct materials in your lobbies; training tellers to promote direct deposit during “Go Direct Days” (the first few days of each month when most federal check recipients cash or deposit their checks); and reaching out to members with a letter, statement stuffer, website article or newsletter article.
     Tool kits make it easy for partners to participate in the campaign. They provide clear instructions and ideas for implementing Go Direct programs. There are also free campaign materials available for financial institutions. The most popular tool kit for financial institutions is “Teller Training/Go Direct Days,” because it shows how fast and simple it is to introduce Go Direct messaging into branches. Many financial institutions also use the financial literacy tool kit. If a financial institution already conducts financial literacy seminars, it’s easy to integrate Go Direct messaging. 
     Just visit the Partner section at www.GoDirect.org for next steps. There you will find more information about how to join more than 800 organizations already signed on as partners.

EDUCATIONAL OPPORTUNITIES

February/March QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
          •  2/06  Serving Members of Modest Means
          •  2/12  The Great Demographic Divide
          •  3/05   Embracing Your Hispanic Market
          •  3/11  Phone Collection Techniques
          •  3/19  Medical Leave for Small CUs
          •  3/27  Phishing, Pharming & More
The 1 ½ hour session runs from 11 a.m.-12:30 p.m.
          •  2/21  Safe Deposit Compliance Update
The two hour session runs from 11 a.m.-1 p.m.
          •  2/25  Growing Auto Loans by 10%
The fee for the one-hour sessions is $99; the 1 ½ hour session, $129; and the two-hour session fee is $169. The deadline to register with Bernadette Hines: one week prior to the session.

Creating a Small CU Strategic Plan – Saturday, February 16, from 9 a.m.-1 p.m. at the League office. Session is designed to give small CUs a template to create a strategic plan that will satisfy NCUA examiners. Instructor: Jim Merrill, New Jersey CU League. Fee: $80 for the manager and one board member. Registration deadline: February 6.

CU Volunteer Program: Board Strategic Planning – February 20 at Del-One FCU, 270 Beiser Blvd., Dover, from 4:30-6:30 p.m. Also February 27 at the League office from 5:30-7:30 p.m. Instructor: Patrick Mahaney. This session will review how directors can help management be better prepared to deal with the future. Fee: $95 per participant for either session. A light meal will be served one-half hour before the session begins.
Registration deadlines: February 13 and February 20.

Supervisory Committee Roundtable – Monday, February 27, from 5:30-8 p.m. at the League. This session will provide a networking opportunity for supervisory committee chairs (or their delegates) to discuss the procedures and challenges of being on this committee. Cost: $25 per person, including a light meal. Registration deadline: February 20.

Policies vs. Procedures and How to Write Them – Tuesday, February 26, from 9 a.m.-3:30 p.m. at the League. Instructor: Carolyn Warden. Fee: $150. Registration deadline: February 29.

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).