Volume 28, Number 4                                                            February 29, 2008

HEADLINE NEWS

Small CUs Participate in Strategic Planning Session
     Five small credit unions - Delaware Alliance, Delaware Department of Labor, Delaware V.A., First State, and Preferred Financial - gave up a recent Saturday morning to participate in a “Step by Step Approach to Strategic Planning,” led by Jim Merrill, vice president of business services at the New Jersey Credit Union League.
     Strategic planning is important for several reasons. Most immediate is that NCUA is placing a greater emphasis on a credit union’s ability to anticipate risk and manage growth. Even though many credit unions have gotten this far by way of “tried and true” methods, changes within the financial services industry are accelerating, offering credit unions’ current and prospective members more attractive options.
     Participants identified several strategic planning issues important to their credit unions:
     •  Membership growth – aging memberships;
     •  Strengthening their capital position;
     •  Dividend expenses/cost of funds;
     •  Raising credit union visibility;
     •  Meeting members’ evolving needs; and
     •  Succession planning and board vacancies.
In summary, credit unions need to be concerned with any event, trend, or opportunity that can change how the credit union does business.
     Jim Merrill provided participants with key ratios and peer comparisons, which will allow credit unions to assess their strengths and opportunities against this information.
     Feedback from the session was very positive. Participants are urged to go back and set up their own individual planning sessions with the information received. The basic considerations in holding a session are: 1) Is there a budget? 2) Do we use someone from inside the CU or an outside facilitator? 3) When and where should we have it? 4) How long should the session be? 5) How do we structure the session? 6) Who should participate?

Election ’08: What’s New for Credit Union Advocacy
     The Credit Union National Association (CUNA) has announced that it will be offering four new online courses for credit union representatives interested in political advocacy.
     The first two sessions, which are now available, will instruct credit unions on how to communicate the credit union difference to their public officials and communities and effective ways to initiate direct lobbying efforts on a grassroots level.
     Two other sessions are being planned. One of those will address campaign involvement and what credit unions can do to support credit union-friendly candidates and to get out the vote among their members. The other will explore public affairs and communications strategies and will provide how-to tips for communicating credit union issues to local public officials.
     The courses are free and certificates will be awarded by CUNA upon successful completion of each segment. For more information, go to
http://www.cuna.org/pol_affairs/online_training.html.
     Richard Gose, CUNA senior vice president of political affairs, said, “The more educated credit union members we have, the better it is for credit unions.”
     Also in the political affairs arena, CUNA is about to launch a new round of its campaign schools, seminars that are intended to encourage credit union professionals and volunteers to run for office in any political race, from local school board to state legislature. For the first time, CUNA will run a demonstration campaign school at its Government Affairs Conference in Washington, scheduled from March 2-6. The abbreviated session will be presented over three days and is intended to give participants an idea of what it is like to organize a campaign.

NCUA NOTES

The following are recent opinion letters from the National Credit Union Administration (NCUA). They can be found on the agency’s website, www.ncua.gov, under “Credit Union Resources.” The numbers in parenthesis indicate the letter number and the date of issuance.

Legal Opinion on Member Business Lending Experience Rule (#08-0128 – 02-08-08). Credit unions may use different approaches to satisfy a federal requirement that they retain an employee with at least two years experience before launching a member business lending (MBL) program, according to a recent National Credit Union Administration (NCUA) legal opinion letter.
     The opinion letter was inspired by an inquiry asking whether a credit union must always use the services of a third-party underwriter to satisfy the NCUA member business lending (MBL) rule’s two-years-of-direct-experience requirement.
     NCUA Associate General Counsel Sheila Albin responded that, while a credit union may use the services of an outside party, it is not required to do so. It also may use the direct experience of its own employees.
     Further, wrote Albin, a credit union is not required to hire an individual who has the requisite experience at the time of hiring. It may satisfy the direct experience requirement instead with an employee who has developed the requisite experience over time.
     However, if a credit union chooses to take the latter course of action, it is subject to certain regulatory limitations. For instance, to qualify an existing employee must be familiar with such things as the proper underwriting, analysis and origination of MBLs in order to understand their complexity and risk exposure.

Letters on Appraisal Documentation, Records Retention. In two recent opinion letters, NCUA advised credit unions about documentation required on real estate appraisals and records retention requirements. Each letter was in response to specific inquiries made by an individual credit union. Regarding real estate appraisals, the NCUA said its rules do not require a credit union to have a checklist or narrative to document its review of an appraisal (12 C.F.R. Part 722). However, while not required, the practice is recommended in inter-agency guidance on independent appraisal and evaluation functions.
     In 2005, the NCUA, along with the other federal financial institution regulators, issued joint guidance, which stated in part that appraisal reviews should be documented in loan administration files, either in “checklist or narrative format.”
     It further stated that certain appraisals should be reviewed more comprehensively to assess the technical quality of the appraiser’s analysis prior to making a final credit decision, according to NCUA.
     The NCUA opinion letter on records retention stated that a federal credit union may preserve original loan documents for outstanding loans to members in an electronic format instead of a paper format.
     “The Electronic Signatures in Global and National Commerce (E-Sign) Act established a general rule of validity for electronic records and signatures for transactions, effective October 1, 2000, with records retention requirements effective March 1, 2001,” the letter said.
     It referred attention to Part 749 of the agency’s rules and regulations, which describes obligations for federally insured credit unions to maintain a records preservation program and implements the E-Sign Act.

New FMLA Act Expands Benefits for Military Families
     The new National Defense Authorization Act for Fiscal Year 2008, signed into law by President Bush, gives added benefits to members of the military and their families through the Family and Medical Leave Act (FMLA). The law was effective as of January 28, 2008.
     Under the current law, employers with 50 or more employees must provide up to 12 weeks of unpaid leave a year to spouses, children, or parents of members of the armed forces on active duty status for qualifying events including:  
     •  The birth and care of the employee’s newborn child;
     •  The placement of a child with the employee for adoption or foster care;
     •  The care of an immediate family member (defined by the FMLA as “child, parent or spouse,” although state and local laws may have broader definitions) with a serious health condition; and/or
     •  The employee’s own serious health condition.
     The new law expands the FMLA by allowing family members of military personnel to take up to 26 weeks of unpaid leave to care for service members suffering from serious injury or illness.

CU SYSTEM NEWS

New Lobby Brochures Cover ID Theft, Phishing, Plastic Cards
     A new line of “quick read” lobby brochures was recently introduced by CUNA to complement its statement stuffer line. The new brochures are printed on heavier paper stock and designed for a coordinated credit union lobby display, but they are also sized to fit in an envelope.
     The first three in the series are based on CUNA's most popular stuffer topics:
* Stop Identity Theft (stock #28075) offers tips to prevent or recover from identity theft, including important phone numbers and websites for help and information.
* Phishing: Stay Off the Hook (stock # 28076) provides an online to-do list to help members be savvy Internet users with the ability to conduct safe transactions online.
* Protect Your Plastic Cards (stock #28077) gives tips on the smart ways to use your credit and debit cards at home, on the computer, and at stores.
     A new drive-up envelope was also created for credit union members. What to Do When Your ARM Is Due (stock #28187) explains the three options available when an adjustable rate mortgage is coming due for adjustment. It also encourages members to seek loan advice and help from their credit unions.
     Your College Savings Answers handbook (stock #25148) - CUNA's guide to help students, parents, and grandparents fund the rising cost of college - was revised with updated statistics, tables, and photos. The book covers a variety of savings plans and accounts, investment options, loans, grants, and other aids. It is part of a seven-booklet “Fundamentals of Personal Finance” series to educate members about common financial topics, which also include: insurance, investment, retirement, budgeting, home ownership, and vehicle buying.
     For more information or to purchase online, go to finlit.cuna.org and enter the stock number in the product finder search engine. To order by phone, call (800) 356-8010, press 3, and use the stock number as a reference. 

Enrollment Opens for July 13-25 CUNA Management School      
     CUNA Management School, in existence since 1954, is designed specifically for credit union management personnel who aspire to achieve senior-level management and leadership positions.
     This three-year school will be held in 2008 from July 13-25 at the University of Wisconsin in Madison. As a CUNA Management School student, you receive advanced academic training with practical, real-world applications that prove invaluable upon returning to your credit union. You attend classes for three, two-week terms over consecutive summers. In addition to the on-site sessions, you complete two written projects during the three-year period.
     The tuition is $2,249 until May 30. This includes all classroom instruction, course materials, 12 breakfasts, 9 lunches, 9 dinners, and air-conditioned, double-occupancy residence hall rooms. Call League education director Bernadette Hines for a brochure. Melba Saxton of Chestnut Run FCU graduated with honors in 2007 and would be happy to answer your questions about the school.
     Scholarships. The CUNA Management School Madison Scholarship Program is designed to provide financial assistance to students who would otherwise be unable to attend the school. An applicant must be an employee or volunteer of an affiliated credit union of $35 million or less. Special funds are also available for employees of community development credit unions and credit unions under $6 million in assets. Applications must be submitted by April 1, 2008.

James Monroe $1 Coin Debuts
     The latest Presidential $1 Coin, honoring James Monroe, is now available. James Monroe was the fifth President of the United States (1817–1825).
     During his Presidency, the United States acquired Florida (1819), and Congress passed the Missouri Compromise bill, granting statehood to Missouri and barring slavery north and west of Missouri forever. Perhaps less widely known is that in the famous painting of Washington Crossing the Delaware by artist Emanuel Leutze, James Monroe is standing behind George Washington, holding the American flag.
     Your credit union can sell these presidential coins to your members – DEXSTA FCU and American Spirit FCU are both active in this program. For more information, contact Alice Smith at the League office.

DELAWARE NOTES

The Delaware Credit Union League would like to congratulate Sterling Nowka and Tom McLane, sales executives for CUNA Mutual Group, for qualifying for the 2008 President’s Council, CUNA Mutual's most prestigious award. Tom and Sterling continually strive to serve their credit unions with integrity, dedication and uncommon commitment. 

Vice President of Operations
CU seeks experienced Vice President of Operations, with a proven track record of successful leadership in lending, collections, branch operations and member relationship management in a growing credit union of at least $50 million in assets. For more information, see the League employment web page (http://dcul.org/jobs.htm).

Information Systems and Accounting
Information systems professional with over fifteen years experience in managing, planning, and directing accounting and financial projects and implementing the upgrade and conversion of in-house and vendor supplied software is interested in a CU position. For more information, see the League employment web page (http://dcul.org/jobs.htm).

     OfficeMax is pleased to announce an agreement that will provide members with over 25,000 name brand office products from OfficeMax at exclusive pricing up to 70% off list price.  
    As a CUNA Preferred Partner for Office Products, our agreement provides volume-pricing advantages and savings passed on to each participating member. Some of the important benefits of our agreement include:
     •  PERSONAL ACCOUNT MANAGER - Always available to assist you with ordering, answering questions, performing price comparisons and ensuring that the CUNA program prices are the most competitive for your market.
     •  TOP QUALITY PRODUCTS - Over 25,000 office products, office furniture, artwork, computer supplies, and promotional products to choose from.
     •  EASY ORDERING WITH FREE, NEXT-DAY DELIVERY - Order by Internet, phone, fax, or e-mail with guaranteed next-day delivery on all in-stock merchandise - no minimum order required.
     •  PRICE MATCH GUARANTEE - OfficeMax will analyze, compare and adjust pricing to ensure maximum savings to our members.
     •  100% SATISFACTION GUARANTEE! - Not what you wanted? Wrong color? Wrong size? Send it back or exchange it!
     To participate or to begin ordering online, simply call OfficeMax at (877) 633-2629, select option 3 to speak with Aaron Whitewolf, your Personal Account Manager at Extension 6744.  Please identify yourself as a member of CUNA! Also contact Alice Smith at the League office for some additional coupons that you might be able to use on a purchase.

EDUCATIONAL OPPORTUNITIES

March QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
     •  3/05  Embracing Your Hispanic Market
     •  3/11  Phone Collection Techniques
     •  3/19  Medical Leave for Small CUs
     •  3/27  Phishing, Pharming & More
The fee for the one-hour sessions is $99. The deadline to register with Bernadette Hines: one week prior to the session.

Combined Collection & Mortgage/Home Equity Council Meeting – Wednesday, March 5, from 10 a.m.-noon at the League. Topics: the housing crisis and mortgage foreclosures. No fee for council members; $100 for non-members. Registration deadline: Call today!.

League Annual Meeting Education Day – Saturday, April 5, at Dover Downs. Frank Diekmann, publisher of Credit Union Journal, will be our speaker. His topic - "Extra! Extra! What in the Heck Is With These Headlines?" - will cover credit union issues, mergers, hostile takeovers, charter conversions and whether the credit union business model is obsolete. In the afternoon, there will be three breakout sessions (repeated twice): 1) Boards Need to Cope With Change Too; 2) Security Solutions Overview; and 3) What Do People Think of Credit Unions, If They Think of Them at All? The registration fee is $75.

League Activities in January-February 2008

LEAGUE SERVICES

            Business  Partners. The League has two new business members – CUMAnet, a CUSO for mortgage services, and Overton & Associates, a design build firm. Contact Jane Bailey for a full listing of our other business partners.

            Spring Car Sale. The League Spring Car, SUV, and Truck Sale will be held on April 24-26. Seven credit unions are participating in this sale, and brochures will be available soon.

COMMUNICATIONS/PUBLIC RELATIONS

            Staff Travel. League president Patrick Mahaney and EVP Jane Bailey visited Mid-Atlantic Corporate in January. Current president, Ed Fox, is now the CEO, retiring on July 31, but staying on as a consultant. Jay Murray has been appointed as president/COO. They began transitioning duties now so as to have a seamless exchange of leadership in July. Lori Gall has been promoted to senior vice president in charge of risk management and compliance. Rodney May will replace Lori as Delaware’s contact for league relations.
            Patrick Mahaney recently visited Southern Delaware Postal Employees FCU and New Castle County Delaware EFCU. Executive vice president Jane Bailey recently met with Sussex County FCU, Chestnut Run FCU and Diamond State FCU. Jane was also a speaker at DPL FCU’s annual meeting.

            Delaware Business Ledger 2008 Book of Lists. The League worked directly with Mark Corrigan in compiling this list, which included providing him statistical information, as well as credit union addresses, websites, CEOs/board chairs, and fields of membership. All 34 credit unions were listed in this edition, and five credit union ads also appeared in the publication: Chestnut Run, Del-One, DEXSTA, Dover, and Louviers.

            CUNA’s Online Newsletter Features Delaware Story. CUNA’s News Now, its daily online newsletter, continues to pick up articles from the League’s Together for publication. Most recently, News Now featured the story about the new credit union being formed in Delaware – Stepping Stones.

            First State Saves. League communications director Alice Smith recently attended a partners’ meeting for a coalition that is supporting First State Saves, a personal savings initiative that has just kicked off in Delaware. The program is being administered by the Delaware Money School; and Ronni Cohen, the executive director, spoke to the League marketing council in 2007, regarding this program. As a result, two local credit unions have already signed up to participate in the program – Delaware Alliance and Eagle One. To participate, a financial institution must set up a special savings program, besides normal savings accounts.

EDUCATION

            Small Credit Union Initiatives. On January 15th the evening session, “Help in Preparing NCUA’s Year-End 5300 Report” was presented by principal examiner Deborah Barton.  She explained the process of completing the form and answered specific questions from the group. The League also hosted a strategic planning session on Saturday, February 16, in order to help credit unions under $20 million in assets come up with a strategic plan, which is one of NCUA’s hot buttons this year.

            Supervisory Committee Roundtable. At the 2007 Volunteer Leadership Conference, one of the sessions was a networking opportunity for supervisory committee members. In response to a request from supervisory committee chair Will Garfinkel of Delaware Alliance FCU, the League organized a similar session on February 25.

            Volunteer Training. League president Patrick Mahaney led a session on strategic planning issues for volunteers in February in Dover and at the League office.

January Education Sessions

            Education Sessions in 2007. A copy of all training sessions offered by the League in 2007 was mailed to each credit union CEO. It lists the number of participants and credit unions that attended each session. The chart includes education sessions and councils organized by the Delaware League, as well as QuickBites teleconferences, training offered by surrounding leagues, Mid-Atlantic Corporate, NCUA, CUNA and CUNA Mutual.  A brief summary is listed below:
Total # of individual training sessions in 2007          101
Total # of staff members and volunteers trained    1089

            Scholarships. Education scholarships for 2008 were mailed at the end of January (two $50 vouchers per each credit union with assets of less than $20 million). A total of 22 credit unions received the voucher.

GOVERNMENTAL AFFAIRS

            CUNA’s Governmental Affairs Conference. Currently Delaware has 13 people enrolled for the March 2-6 conference in Washington. The League is offering transportation for the Hike the Hill on Wednesday, March 5, for those who want to go down for the day. We have confirmed appointments with staff members in all three Congressional offices.

            CULAC Update. The Leagues and CUNA far exceeded their annual CULAC goal of $1.89 million, by surpassing $2 million in a calendar year for the first time ever. Delaware is one of the leagues that surpassed its 2007 CULAC goal – Delaware credit union members contributed $6,628.05, which is 140% beyond our goal of $4,741.58. In 2008, Delaware’s goal will increase to $5,346.89. 

            CURIA Now Has 144 Official Backers. Credit unions continue to push for CURIA co-sponsorships, which now stand at 144. The bill was introduced March 15 by its co-authors, Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.). The field of membership issue, including expanding the number of underserved areas that CUs can serve, is a provision of the Credit Union Regulatory Improvements Act (H.R. 1537). For a summary of CURIA’s benefits and CUNA’s plan, please visit http://www.cuna.org/league/member_league/download/hr1537_sum.pdf

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).