Volume 28, Number 21                                                        November 15, 2008

HEADLINE NEWS

Forbes, Carlson/Begala, Sinise Highlight GAC
     Economic commentary from Steve Forbes, editor-in-chief of Forbes magazine, and a political face-off between pundits Paul Begala and Tucker Carlson will be among the highlights of the Credit Union National Association’s (CUNA) 2009 Governmental Affairs Conference (GAC), to be held February 22-26 at the Washington Convention Center in Washington, D.C.
     The 2009 GAC also will again feature a special kickoff concert on Sunday evening, February 22. Performing will be the Lt. Dan Band, formed by Chicago composer Kimo Williams and actor/musician Gary Sinise, star of the hit CBS TV show, CSI New York. “Lieutenant Dan” is the character Sinise portrayed in the 1994 blockbuster film, Forrest Gump, a role that won him an Oscar nomination. The band has completed six tours for the USO and performs regularly for troops around the world.
     Steve Forbes will offer economic outlook and commentary at a time when the nation continues to struggle through one of the worst financial crises in its history.
     Tucker Carlson and Paul Begala will face off over current developments in national news, politics, and world issues. Carlson is a senior correspondent for MSNBC. Paul Begala also appeared on Crossfire and is a CNN political analyst and former top aide to   President Bill Clinton.
     CUNA’s GAC is the credit union movement’s premier national conference on Washington issues. The GAC brings together top policy makers from Congress, the Administration, the federal regulatory agencies and the Washington political establishment to provide the latest information on legislation and regulation that affects credit unions and their ability to serve their members.
     The GAC also devotes an afternoon to Capitol Hill visits, when attendees meet with their members of Congress and staff to discuss the movement's legislative agenda. With a new Congress and Administration fresh in office, a top priority of the 2009 GAC will be to ensure policy makers understand the credit union difference.
     Use the resource link below to access more information and the complete schedule: http://www.cuna.org/events/gac09/index.htm.

Mica to Address CU Challenges in Live November 19 Webinar
     The challenges presented to credit unions as a result of the financial crisis will be addressed in a special live nationwide webinar featuring CUNA President/CEO Dan Mica, on Wednesday, November 19, from 2-2:30 p.m. ET.
     The Internet-based video conference – open to all CUNA-affiliated credit unions at no charge – will focus on the financial crisis and how credit unions can leverage their “white hat image” to help minimize the impact of the crisis on credit union members, as well as the nation itself.
     “We are developing a vision for how credit unions can work for their members and the nation, through the Congress and the regulatory agencies, to help them through these difficult times,” Mica said.
     “The Congress will have a ‘working majority,’ meaning that if they decide to do something quickly, they can move very fast. We are going to need to be ready to act in any number of ways.”
     For more information on how to register for this session, go to the following CUNA website: http://training.cuna.org/elearning/webinar/EW11198_fct.html. For registration questions, call 800-356-9655, ext.4400, or e-mail reginfo@cuna.coop.

COMPLIANCE RECAP

FinCEN Reminder: New E-Filing Program Deadline
     The Financial Crimes Enforcement Network (FinCEN) has sent an important reminder that as of January 1 it will require any electronic filing of Bank Secrecy Act (BSA) information to be executed through a new BSA Electronic Filing program.   
     FinCEN announced the new program in July and said it was part of its effort to make BSA filing requirements more “secure, efficient, and effective.” FinCen is retiring its BSA Magnetic Media Filing program in favor of the new program.
     The magnetic media filing has required credit unions and other financial institutions to submit BSA reports using tapes and diskettes. The more secure BSA E-Filing is a web-based system that is user-ID and password protected. Importantly, it does not require storage media.
     BSA E-Filing supports both single and multiple BSA report filings and uses the same file format as the Magnetic Media program. FinCEN has suggested that without tapes or diskettes to mail, BSA E-Filing may help reduce reporting costs. FinCEN said it is collaborating with the Internal Revenue Service (IRS) to ensure this transition is as seamless as possible. Financial institutions currently using the Magnetic Media program to file BSA reports may register to use BSA E-Filing at any time.
     Filers may contact the BSA E-Filing Help Desk at 1-888-827-2778 (option 6) from 8 a.m. to 6 p.m., Monday through Friday, or use this resource link –  http://bsaefiling.fincen.treas.gov/main.html –  to access details on registration and see an overview of BSA E-Filing.

NCUA Releases Risk Letter to Federal Credit Unions, #08-CU-20
     NCUA examiners were recently provided guidance addressing the current risks to credit unions. Letter 08-CU-20 provides all federally insured credit unions with the same guidance, which was issued in August 2008 to examiners.
     The Supervisory Letter discusses several of the current risks facing the credit union industry, provides NCUA field staff with guidance for assessing mortgage portfolio risk management, and recommends best practices for conducting risk focused supervision and monitoring. Effectively addressing and resolving risk issues requires open and clear communication between NCUA field staff and CU management and continues to be a core element of the Risk Focused Examination program. Some of the key points addressed in the letter are:

• Credit union balance sheets and operational strategies have changed over the past decade. There is presently much higher reliance on long-term loans which are funded by more volatile sources. New delivery channels and increased use of outsourcing have allowed for rapid changes to the structure of the balance sheet and the risk profile of credit unions.
• Recent high profile CU failures resulted from rapidly changing balance sheet structures arising from third-party relationships, combined with a lack of prudent risk management policies and practices. Several of the lessons learned from these failures are included throughout the Supervisory Letter.
• Declining real estate values result in the potential for elevated levels of credit risk on credit union balance sheets. While credit unions do not widely offer non-traditional mortgage products or participate in subprime lending, the declines in real estate value and the accompanying increase in foreclosures affect credit unions across the country.

     For the complete details of this letter, go to
http://www.ncua.gov/news/express/xfiles/08-01%20Sup%20Letter.pdf

What to Do About Expired Flood Form
     The Federal Emergency Management Agency (FEMA) flood hazard determination form carried an October 31 expiration date, but FEMA has not yet issued a new form. What’s a credit union to do?
     CUNA’s November Compliance Challenge advises credit unions that they are to continue using the old Form 81-93 Standard Flood Hazard Determination until FEMA issues its new one. What's more, FEMA is providing time for credit unions and other users of the form to update their systems to the new version. The effective date for mandatory use of the new document will be six months from the date of its approval by the agency.
     And which credit unions use this form? CUNA explains that a credit union must perform a flood hazard determination whenever it makes, increases, extends, or renews a loan secured by a “building,” defined as a home on a permanent foundation or a mobile home that is located in a special flood hazard area (SFHA).
     To read this month's Compliance Challenge or for access to more information on flood insurance and the FEMA flood form, go to http://www.cuna.org/compliance/member/comp_challenge/comp_challenge.html.

CU SYSTEM NEWS

CUNA Hones Political Clout
     The Credit Union National Association (CUNA) flexed its ever-growing political muscles during the 2008 federal election cycle. For instance, CUNA participated in 359 of the 435 races in the U.S. House of Representatives and logged a greater than 90% success rate with its chosen candidates, reported its political affairs department. CUNA also pushed the envelope a little further this cycle, according to CUNA Senior Vice President of Political Affairs Richard Gose, by its first-time effort to unseat an incumbent in favor of a more credit union-friendly candidate. More details at http://www.cuna.org/newsnow/08/wash110508-5.html.

CUs Positioned Well for 2009 Congress, Says Magill
     CUNA legislative experts said after the election that credit unions can feel good about how they are positioned politically going into the next session of Congress. “Going into the 2008 federal elections, credit unions have been seen by lawmakers and government officials as being part of the solution to the country’s economic woes, not part of the problem that created the mortgage and credit crisis,” said John Magill, CUNA senior vice president of legislative affairs. “I feel very good about where we are positioned going into the 111th Congress in January.” More comments at http://www.cuna.org/newsnow/08/wash110508-6.html.

CMG Upgrades Choice 401(k) Retirement Program
     CUNA Mutual Group has upgraded and repackaged its Choice 401(k) program to provide retirement plan sponsors with a larger and stronger choice of institutional investments for employees.
     Using a low-cost group annuity platform, the product now offers more than 75 different sub-account choices from a variety of well-known investment managers, said Tom Eckert, CUNA Mutual vice president of retirement plan services.
     “We’ve increased the asset class coverage of Choice 401(k) to provide a great product for plan sponsors and advisors seeking just that...choice,” Eckert said. “We’ve got the asset classes covered, but we’ve kept the number of sub-accounts at a manageable level, so it’s not too overwhelming.” 

Business Mixer Golf Outing Benefits Scholarship Funds
     The jointly sponsored Business Mixer Golf Outing successfully raised funds for the League and Louviers FCU’s respective scholarship funds. Eighty golfers participated in the 18-hole scramble at Deerfield Golf and Tennis Club on October 16. The event was organized by Louviers FCU staff member Bob Walls.

     Pictured at the left is one of the vendors, Frank Taddeo, PFP Services, who shot a hole-in-one on one of the prize holes and won a flat screen television.

Here is a listing of the other prize winners:

1st Place – Del-One – (below left to right) Wayne Stultz, Bob Burd, Bob Seaberg, and Duke Strosser – Score 60

2nd Place – (left to right) Ken Welch, Larson Allen;Joe Reiner, Mid-Atlantic Corporate FCU; Don Dimatteo, Preferred Financial FCU; and Frank Taddeo, PFP Services –
Score 61

3rd Place – Delaware Engineering & Design – (left to right) Bob Quinn, Brandon Yerger, and Bill Stump (only 3 players) – Score 62

• Women’s closest to the pin on hole #11 – Kathy Adams, Dover FCU •
• Men’s closest to the pin on hole #16 – Leo Corneilus, Eagle One FCU •
• Straightest drive on hole #1 – Don Dimatteo, Preferred Financial FCU •
• Longest putt on hole # 9 – John King, Eagle One FCU •

DELAWARE NOTES

Congratulations to the members, volunteers and staff of E.W.O.D. FCU, as they celebrated the CU’s 50th anniversary on October 18. The CU was the first building trades credit union in the state.

EAGLE ONE FCU renewed its commitment to the people and community of Claymont by again sponsoring the Claymont Community Center’s Autumn Dinner fundraiser and the Center’s 5K Run/Walk and One Mile Fun Run. The two events are vital to raising awareness and funding for the Claymont Community Center. Eagle One has been a sponsor of these types of initiatives for the past four years.
     Eagle One is also currently holding a membership drive with rewards and specials.  Specifically, Eagle One is offering a $10 reward for any member who refers a friend or family member to join the CU – the new member also receives $10. Those members are then also entered into a drawing to win a laptop computer. This membership drive will run through December 31.  

In the wake of the announcement that the Chrysler plant will close at the end of 2008, AMERICAN SPIRIT FCU held a free education session for all Chrysler employees on November 13 at UAW Local 1183 in Newark. The session included presentations on job opportunities in Delaware and Maryland, interview techniques, how and where to apply for jobs, 401(k) plan alternatives, mortgage crisis help and credit counseling.

Thanks to DPL FCU for making a $500 donation to the Texas CU Foundation Disaster Relief Fund. The Delaware League also made a similar contribution on behalf of all Delaware credit unions.

Part-time CU tellers needed in North Wilmington. Skills: Previous teller or cash- handling experience preferred; accurate processing of member transactions; PC skills including Microsoft Office (e.g. Outlook, Word); must be professional, courteous and customer focused. Saturday hours required. Competitive salary. Fax resume with cover letter to “Attn: Human Resources” at (302) 225-0619 or email hrmanager@dexsta.com. EOE.

EDUCATIONAL OPPORTUNITIES

November/December QuickBites Teleconferences:
One-hour sessions run from 11 a.m.-noon:
     •  11/20 – Preparing for Your IT Security Exam
     •  12/02 – Regulation B: Discrimination in the Loan Process
     •  12/08 – Lending to Young Adults/Hispanics
Two-hour sessions run from 11 a.m.-1 p.m.
     •  11/18 - CU Financials for Staff
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.

IRA Training:
     •  IRA Essentials Workshop – Wednesday, November 19, from 9 a.m.-4:30 p.m.
     •  IRA Advanced Workshop – Thursday, November 20, from 9 a.m.-4:30 p.m.

NorthLegal Training: Default Upon Bankruptcy Clauses Webinar:
     •  Thursday, November 20, at 1 p.m. Fee: $125. Register at www.culaw.com.

PLAN AHEAD IN 2009!

January 18-21               CEO Summit, Key West, Florida
February 13                  Third Annual Credit Union Bowl, Bowlerama, New Castle
April 30-May 2               Delaware League Annual Meeting & Trade Show
                                      Clarion Hotel, Ocean City, Maryland

VOLUNTEER OPPORTUNITY
Be a greeter, interpreter, financial coordinator or tax preparer! Help low-income families with FREE tax preparation and financial education. • Free Training • Flexible Shifts • IRS-Certified • Locations Statewide. Register online today at www.eitcdelaware.net. For more information, email DEopportunities@ymail.com (New Castle County) or DEopportunitiesKSC@ymail.com (Kent and Sussex Counties).

League Activities in October and November

COMMUNICATIONS/PUBLIC RELATIONS

          Actions Taken to Convey the Safety and Soundness of Credit Unions. Credit unions continue to receive favorable publicity in the wake of the recent economic upheaval, both in the national and local press. Here is a copy of the “letter to the editor” which League president Pat Mahaney submitted to The News Journal and which was published on Credit Union Day, October 16.

Credit Unions’ insurance protects users’ accounts
          In recent weeks, The News Journal has published several articles which explain to consumers how the money they have in deposit accounts is protected. Too often the emphasis in the articles revolves round the Federal Deposit Insurance Corporation (FDIC), with slight mention of the alternative credit union fund.
          Credit union deposit accounts are backed by the National Credit Union Share Insurance Fund (NCUSIF), a fund maintained by the U.S. Treasury and administered by the National Credit Union Administration (NCUA). Federal insurance protects members’ money in share savings, share draft/checking, money market, share certificate, trust, and retirement accounts.
          NCUA coverage is to credit unions as FDIC coverage is to banks. Both funds are backed by the full faith and credit of the U.S. government.
          And now, passage of the Emergency Economic Stabilization Act of 2008 increases the coverage in both insurance funds from $100,000 to $250,000. The increase is temporary, taking effect from October 3, 2008, until December 31, 2009. Funds may be insured for even more than $250,000, depending on how you establish your accounts.
          Delawareans who have their hard-earned dollars in credit union accounts can rest assured that their money is indeed safe and sound. Delaware credit unions continue to operate with a safety net of capital that helps us weather temporary setbacks. And, we maintain an “allowance for loan losses.” This additional cushion anticipates losses when some members fail to repay loans.
          Additionally, Delaware credit unions are examined regularly by the NCUA to make sure they are engaging in safe and sound operations.
          Your money is safe in Delaware credit unions!

          Delaware League News and Risk Alerts. The League emailed 25 news alerts and 4 risk alerts during October. The hot topic was the economy and CUNA’s/leagues’ efforts to keep the public informed of the safety and soundness of credit unions.

          League Staff Travel. League president Pat Mahaney recently visited First State FCU and Wilmington Police and Fire FCU. In November, he will be meeting with Milford Memorial FCU and Delpart FCU, attending the DEXSTA FCU groundbreaking in Middletown, and supporting a charity function being co-hosted by Delaware Alliance FCU. EWOD FCU invited League staff and their spouses to their 50th anniversary celebration. This lovely event included a dinner, a short business meeting and dancing. Pat presented the credit union’s board chairman with a 50th anniversary plaque from CUNA and a state flag flown over Legislative Hall.

GOVERNMENTAL AFFAIRS

          Governmental Affairs and Advocacy. The League Governmental Affairs Committee met on November 13 to prep for meetings with our elected officials in Washington, D.C., at the GAC on February 22-26 (refer to first article in this newsletter). League president Pat Mahaney is sending out congratulatory letters to Congressman Mike Castle, Governor-elect Jack Markel, and Lieutenant Governor-elect Matt Denn.

          NCUA Region II Meeting. League president Pat Mahaney and EVP Jane Bailey will be meeting with NCUA Region II director Jane Walters and other regional League CEOs at the NCUA offices in Alexandria, Virginia, on December 4. The topics of discussion will include NCUA’s increased budget and staff (100 new examiners and a return to a 12-month exam period); exam issues; small credit union concerns; and the new leadership (NCUA Chairman and U.S. President).

          CULAC Candy Sale. Fourteen credit unions participated in the annual fall candy sale, which will help Delaware reach its 2008 CULAC goal of $5,346.89. The sale of 23 cases of candy bars, which generated over $2000 in proceeds, will hopefully help to send Delaware over our goal. Thanks to these participating credit unions: American Spirit, Chestnut Run, Del-One, Delaware Alliance, Delaware First, Delaware State Police, DEXSTA, First State, ICI America, Louviers, New Castle County School Employees, Sussex County, Wilmington Police and Fire, and Wilmington Postal. We also acknowledge the nine staff members at American Spirit FCU who participated in CULAC Dress Down Days.

LEAGUE SERVICES

          Shared Branching. The League held a user meeting on October 30 for the credit unions on shared branching in Delaware. Melba Saxton, CEO of Chestnut Run FCU, and Maurice Dawkins, CEO of American Spirit FCU, were in attendance. Credit unions can join the shared branch network with major savings in their start-up fees if they join by the end of February. They will have six months from that time to implement. For more information, contact Jane Bailey.

          Dues Invoices. The 2009 League membership dues invoices were sent to all of our credit unions a few weeks ago. The dues’ deadline is January 31, 2009. The dues packet also contained a print copy of the Credit Union National Association’s (CUNA) Power of Association brochure. CUNA has also created a digitized version of the brochure (with live links, zoom-in capability, video click-throughs and other interactive features) and a companion 3 ½ minute “testimonial” video.  Both can be found at the following link: http://cuna.org/power/

EDUCATION

          Volunteer Leadership Conference. The 12th Annual Volunteer Leadership Conference, hosted by the Delaware League and the Maryland/DC Credit Union Association, attracted 39 credit unions – 14 from Delaware. The VLC was held in Ocean City from October 24-26. The total attendance was 137 registrants (63 from Delaware and 74 from Maryland/DC) and 62 guests. This year for the first time, we offered a “prequel” session, during which Pat Mahaney showed a DVD and led a discussion on CUNA’s recently released e-Scan. About 30 people attended this session on Friday afternoon. The keynote speaker was John McKechnie, NCUA’s Director of Public and Congressional Affairs, who discussed navigating a changing legislative and media environment. Representatives of the Association of British Credit Unions Limited also shared their perspectives on the UK credit union system as an international partner and discussed issues common to all credit unions .The conference concluded with the popular roundtables on board and supervisory committee issues. Special thanks to Chestnut Run FCU, Sussex County FCU, and the Clarion Hotel for providing door prizes for the Saturday reception and to corporate sponsors – Mid-Atlantic Corporate and Rowles and Company.

October 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).