Volume 28, Number                                                                    March 15, 2008

HEADLINE NEWS

New CU Regulatory Bill Introduced in U.S. House; Does not Replace CURIA
     A new bill was introduced to Congress recently that would offer regulatory relief in 12 areas but does not go as far as the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). The new bill (H.R. 5519) was introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.). Rep. Kanjorski encouraged credit unions to keep pushing for the passage of the Credit Union Regulatory Improvements Act. He said the new bill is not meant to replace the more comprehensive package, which is CURIA. As of last week, CURIA had 147 official supporters in the House.
     Although it touches on many areas of CURIA, the new bill (H.R. 5519) does not contain language to increase the credit union member business lending ceiling or to transform prompt corrective action into a more risk-based system. H.R. 5519 is entitled the Credit Union Regulatory Relief Act (CURRA) of 2008.
     For more information on the bill’s content, go to the following article from CUNA’s News Now: http://www.cuna.org/newsnow/archive/list.php?date=030308#35077

More CU Legislation: CURIA Bill Will Get Senate Version
     Credit union attendees at the Credit Union National Association (CUNA) Governmental Affairs Conference learned that Senator Mary Landrieu (D-La.) will introduce a Senate version of the Credit Union Regulatory Improvements Act. Sen. Joe Lieberman (I-Conn.) will co-sponsor the credit union bill, which is identical to the House bill, CURIA, H.R. 1537. CUNA President/CEO Dan Mica praised the action. The bill could be introduced shortly.

CUNA GAC Draws Crowd
     After more than 30 years at the Washington Hilton, CUNA took its Governmental Affairs Conference (GAC) to the Washington Convention Center, March 2-6. Attendance was at an all-time-high of 4,500 participants this year, including a record 580 first-time attendees.
     Delaware’s contingent to the GAC was enthusiastic about all the information they were able to obtain for their credit unions. There were thirteen Delaware credit union attendees, plus three others who came down on Wednesday for the Hike the Hill:
     American Spirit – Maurice Dawkins, Jack Cable, and Jim Green
     Delaware Alliance – Dawn Sutcliffe, Savannah Jarrell, and Betsy Cole
     Delaware State Police – Steve Cimo, Donna Haines, Antonio Williams, and Michael Whaley
     DEXSTA – Jerry King, Dave Marianelli, Wayne Smiley
     Sussex County – Charles Gleason, Allen Riley
     Delaware League – Patrick Mahaney
     The first day of the convention featured a parade of state flags, in which Allen Riley and Patrick Mahaney participated. Speakers included former General Colin Powell, in addition to several members in Congress. And rounding out the program were such notables as "Hardball" host Chris Matthews, singer Marie Osmond, known for her work with Children's Miracle Network, and funnymen Robert Klein and Dave Barry.
     During the conference, Delaware also received the CULAC Capitol Circle Award for the ninth straight year for exceeding our fund-raising goals for the Credit Union Legislative Action Council. In 2007, CU members in Delaware surpassed our goal of $4,741.58 by contributing $6,628.05, which was 140% of our goal.
     A special note of thanks goes to DEXSTA FCU for providing their van for the day trip and selling over 20 CULAC raffle tickets!

NCUA NEWS

NCUA Announces Release of Letter #08-CU-03
     The Financial Crimes Enforcement Network (FinCEN) recently released an administrative ruling to clarify the currency transaction report (CTR) filing obligations when reporting transactions involving sole proprietorships and legal entities operating under a “doing business as” (DBA) name. This ruling, FIN-2008-R001, is replacing a previous ruling, FIN-2006-R003.
     A sole proprietorship is a business in which one person owns all the assets and owes all the liabilities. When filing a CTR involving a sole proprietorship, credit unions are required to complete one section ‘A’, containing the owner’s name, social security number, home address, date of birth and occupation, as well as the DBA name. Only one section ‘A’ is required, even if the business operations have a different address and tax identification number than the owner.
     This ruling also applies to CTRs filed on legal entities operating under a DBA name. Credit unions are required to complete one section ‘A’ containing the entity’s name, Employer Identification Number (EIN), address and business activity, as well as the DBA name.
     A complete copy of FIN-2008-R001, as well as several examples of the CTR filing methods discussed in this ruling, is located at http://www.ffiec.gov/bsa_aml_infobase/default.htm

NCUA 2008 Hot Exam Topics
     Key National Credit Union Administration (NCUA) officials detailed the agency's 2008 examination issues recently, stating generally that credit unions are in good shape despite experiencing increasing pressure on liquidity.
     Five NCUA representatives discussed “Hot CU Exam Topics for ‘08” at a break-out session during CUNA’s Governmental Affairs Conference. The session spanned topics from loan delinquencies, member-business lending issues, third-party vendor relationships, and 5300 call reports.
     The panel, led by Joy Lee, NCUA's director of supervision, started by noting increasing pressure on liquidity as the loan-to-share ratio has risen at federally insured credit unions to almost 84%.
     Matthew Biliouris, program officer in NCUA's office of examination and insurance, said, however, that while the overall delinquency rate is rising, it remains at less than 1% of total loans. He said that the agency is watching in particular the increased delinquencies in member business loans (MBL) and loan participations, and is monitoring real estate loans.
     Margaret Ross, NCUA’s new member business lending program officer, elaborated on the agency’s concerns about MBL and loan participation programs. She cited among those concerns:    

• Inadequate cash flow analysis;
• Incomplete loan write-ups;
• Lack of understanding of the business risk; and
• Lack of understanding of concentration risk.

     Dominick Nigro, an NCUA information systems officer, reviewed the agency’s recent supervisory letter on evaluating third party relationships and outlined the elements of an effective due diligence program.
     Amber Littleton, a risk management officer at NCUA, announced a plan to move to an online 5300 call report in 2009 and an online filing of the annual report of officials form. The online call report, she said, will enable multiple people to input information simultaneously and allow the credit union to correct prior period call reports. In addition, there will be a “credit union online profile,” which will include information that the credit union has to file with NCUA, but which changes infrequently, such as branch information. Littleton said benefits of this change include multiple access from credit union computers, elimination of mailing and printing delays, and self-management of information changes. The 5300 software will be eliminated, but provision will be made for small credit unions still operating manually.
     Use this resource link below to access the panel’s PowerPoint presentation: http://www.cuna.org/compliance/member/download/eguide_exams_gac0308.ppt

CU SYSTEM NEWS

PCUA Audit Services Offers Discounts on Compliance Reviews in 2008 to Delaware Credit Unions
     The Pennsylvania Credit Union Association’s Audit Services rolled out its Bank Secrecy Act Review in 2007, which assesses the credit union’s system of internal controls and procedures that maintain ongoing compliance in accordance with the financial recordkeeping requirements of the Bank Secrecy Act, 31. C.F.R. Part 103. The review includes an independent testing of the Bank Secrecy Act, Office of Foreign Assets Control, and member identification procedures.
    Audit Services has been offering ACH Compliance Reviews since 2001 in accordance with Appendix Eight of the ACH Rules for member credit unions of all asset sizes. The National Automated Clearinghouse Association (NACHA) requires all financial institutions that use a national ACH system to perform an annual ACH Review by December 1st. This requirement applies to both Originating Depository Financial Institutions (ODFI) and Receiving Depository Financial Institutions (RDFI).
     Credit unions which sign contracts for both ACH and BSA/CIP/OFAC Compliance Reviews will be eligible to receive a discount on both services in 2008. In order to receive the discount, signed contracts must be returned together by April 30, 2008.
     For more information, please contact Chris Feather, Director, Audit Services, and BSA Compliance Specialist, at 800-932-0661, ext. 5271.

CUNA to Offer Bank Secrecy Act Training for Directors May 8
     Board and committee volunteers can make sure they are fulfilling their BSA compliance roles during the May 8 “Bank Secrecy Act Training for Directors” webinar. Specifically, volunteers will learn the major elements of BSA and which of those the board must engage in. They will also discover what examiners expect from CUs in the area of risk assessment, customer identification, transaction monitoring, and reporting. Bank Secrecy Act training is required annually for all CU staff and volunteers, including board and supervisory committee members. To enroll, go to: http://training.cuna.org/elearning/webinar/EW05088_fct.html.

Webinar Topic: Marketing, Selling Insurance to Members
     CUNA Mutual Group (CMG) has created a free webinar that aims to help credit unions be more innovative in marketing personal insurance products. The recorded webinar is available on the CMG site (see link below). Keith Kremers, MEMBERConnect sales specialist, leads the webinar with special guest Jim Sarver, manager of CEFCU Financial Services. Sarver shares his credit union's story of success with direct marketing and talks about how direct mail helped the credit union. The webinar also describes the opportunities available through CMG’s MemberCONNECT program. For more information, please visit www.cunamutual.com/cmg/freeFormDetail/0%2C1248%2C19811%2C00.html

NCUA Holds Free Credit Union Workshop in Philadelphia

The National Credit Union Administration (NCUA) is sponsoring a FREE workshop for credit unions on Friday, April 11, 2008, at the Renaissance Philadelphia Airport Hotel at 500 Stevens Drive. Time: 8 a.m.-3 p.m. The keynote speaker will be NCUA Board Member Gigi Hyland. The specific topics are:

• Update From Regional Management
• Future of NCUA 5300 Call Reports
• Common Bank Secrecy Violations
• Evaluating Third Party Relationships – Due Diligence
• Modifications to the CAMEL Rating System
• Attracting and Recruiting Volunteers (Breakout Session A)
• Expanding Credit Union Services Through Partnerships (Breakout Session B)

     Credit unions can visit NCUA’s website to register and to view the agenda and the most current information. You can view the information at www.ncua.gov/CreditUnionDevelopment/Events/Index.htm.

DELAWARE NOTES

The League is proud to announce that we have 100% affiliation for 2007. All 34 Delaware credit unions and two associates have paid their dues. Thank you for your continued support.

DEL-ONE (Delaware FCU), in conjunction with Lifestyle Document Management, Inc., and Delmarva Broadcasting, is sponsoring its third annual Shred Fest throughout March and April.

Vice President of Operations. CU seeks an experienced person with a proven track record in lending, collections, branch operations and member relationship management in a credit union with at least $50 million in assets. The candidate will possess a minimum of 10 years of credit union or related experience. A Bachelor’s Degree in Business or related field is the minimum educational requirement. A Masters Degree in Business Administration, Business Development, and a CCUE, CUDE, or similar designation is highly desirable. For more information see the League employment page. Submit resumes to the Delaware Credit Union League, 4 Quigley Blvd., New Castle, DE 19720; phone: 302-322-9341; fax: 302-322-9354; email: susan@dcul.org. Please indicate that you are applying for the "VP of Operations" position.

Branch Manager.
Dover Federal Credit Union is seeking a FT individual to guide branch staff in providing quality service to members in the areas of account transactions, loan applications, new accounts, and solving problems. Requirements: HS diploma with additional post-secondary technical coursework, 4 years experience in a CU or similar financial environment, well-developed interpersonal skills, and 2 years supervisory experience. Intermediate knowledge of PC applications. Send cover letter, resume, and salary requirements to: HR Dept., DFCU, 1075 Silver Lake Blvd., Dover, DE 19904, or stop into a branch to complete an application.  Equal Opportunity Employer M/F/D/V

Office Manager – Wilmington, Delaware.
Delaware VA Federal Credit Union is seeking an individual to manage the credit union office. This individual should have strong managerial and full accounting knowledge, along with credit union experience. We offer benefits along with generous holidays, sick and vacation paid leave. Equal Opportunity Employer. Qualified applicants should fax a cover letter and resume to 302-633-5582, att: Pat Price or email patricia.price@med.va.gov. 

Information Systems Position Sought. An 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. Has worked in accounting and as a systems analyst supporting accounting and financial systems. Call Susan Fallon at the League and ask for resume # 022808.

EDUCATIONAL OPPORTUNITIES

March/April QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
     •  3/19  Medical Leave for Small CUs
     •  3/27  Phishing, Pharming & More
     •  4/01  Expense Control
     •  4/29  EEO-1 Reports (Labor Law)
Two-hour session runs from 11 a.m.-1 p.m.
     •  4/30  Introduction to Credit Unions
The fee for the one-hour sessions is $99; the two-hour session is $169. The deadline to register with Bernadette Hines: one week prior to the session.

North Legal Webinar: The Mortgage Crisis and Bankruptcy – Thursday, March 27, from 1-2:30 p.m. This webinar by CU attorney Eric North will discuss what a debtor can and can’t do with respect to real property-secured loans (including home equity lines of credit) through bankruptcy. Fee: $125. For more information, go to www.culaw.com or call North Legal Training at 623-537-7150.

League Annual Meeting Education Day – Saturday, April 5, at Dover Downs. The morning keynoter will be CU Journal editor Frank Diekmann. In the afternoon, there will be three breakout sessions (repeated once): 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.

NCUA Free CU Workshop – Friday, April 11, at the Renaissance Philadelphia Airport Hotel from 8 a.m.-3 p.m. For topics, see the preceding article. Credit unions can visit NCUA’s website to register, view the agenda and the most current information. You can view the information at www.ncua.gov/CreditUnionDevelopment/Events/Index.htm.

CU Financial Management Council – Tuesday, April 15, from 10 a.m.-noon. Topic: NCUA speaker Jeanette Dakwar-Reynolds will provide allowance for loan loss assistance, including methodologies, documentation, and charge-off guidance. The session is free to council members, and $100 for non-council members. Registration deadline: April 8.

League Activities in January/February

LEAGUE SERVICES

     Shared Branching Update. Chestnut Run FCU’s board has approved PaCUSC as the provider of shared branching. The credit union will begin as an issuer and then become an acquirer. PaCUSC is currently running a sale for the month of April. Credit unions that sign up in April will have no start-up costs from PaCUSC, and the fixed monthly costs will be waived for the first six months. This could save a credit union up to $3000, which can be used towards data processing costs. Sandy Shenk of PaCUSC will be promoting this sale at the League’s annual convention.

     New League Business Partner. Overton & Associates, a building and design firm, has been approved as a League business member. Since 1976, the company has specialized in financial institutions – from branch, headquarters, and operation center design and construction to renovations of existing facilities. Bettie Campbell is the primary contact for Delaware credit unions. The company will also be an exhibitor at the League annual convention.  

COMMUNICATIONS/PUBLIC RELATIONS

     Staff Travel. League president Pat Mahaney attended CUNA’s Governmental Affairs Conference in March and led the delegation to see Congressman Castle during the Hike the Hill.

GOVERNMENTAL AFFAIRS

      CUNA’s Governmental Affairs Conference. Information about this conference appears at the beginning of this newsletter. Three teams went up on the Hill on Wednesday, March 5, and were delighted to talk face-to-face with Congressman Mike Castle and Senator Tom Carper. Senator Biden was unable to attend but was very well represented by his legislative aide Jim Greene. The League organized the Hike the Hill, hotel reservations for the 13 individuals who attended the conference, and a group lunch held on March 5. Information about a House Financial Subcommittee hearing held on March 6 was emailed to all credit union managers/CEOs. More details regarding this hearing can be found on CUNA’s website, www.cuna.org.           

EDUCATION

     February Education Sessions