Volume 29, Number 3 February 15, 2009
Volume 29, Number 3 February 15, 2009
HEADLINE NEWS
CUNA Estimates Effects of Corporate Stabilization Plan
The Credit Union National Association (CUNA) has posted two pieces of information to its website that will help credit unions estimate the effects of the National Credit Union Administration’s (NCUA) Corporate Stabilization Program on their credit union.
“The NCUA’s recently announced corporate stabilization program raised many questions from credit unions,” said Mike Schenk, CUNA senior economist. “The most common of these seems to be ‘What does it mean for me?’ and ‘What will this cost?’ To help credit unions answer those questions, we’ve posted several Excel worksheets on the CUNA website.”
One worksheet explains the proposal’s effects on the credit union movement as a whole. The other can be used as a template for credit unions to input their data and estimate program costs.
NCUA’s stabilization plan consists of a $1 billion infusion and an initial estimate of $3.70 billion to guarantee corporate deposits. The $3.70 billion corporate share guarantee is an estimate of the total costs associated with a corporate deposit guarantee – it may understate or overstate the true cost of that guarantee. NCUA has engaged PIMCO to analyze corporate investments, and the results of that analysis will be used to more accurately determine the total costs, Schenk said.
The final cost estimate also will depend on the stability of corporate funding. The more stable and long-term the funding, the lower the final costs will be.
In any event, CUNA, state credit union leagues and others are working with the NCUA to explore alternative funding mechanisms that would ease the financial burdens of the initial plan. If the efforts are successful, the assessment rate could be reduced. For more information, use this link:
http://www.cuna.org/initiatives/member/corp_stabilization/.
Fitch Changes Corporate Ratings; Minor Impact to Mid-Atlantic, Outlook Remains Stable
Fitch Ratings is a leading global rating agency committed to providing the world’s credit markets with independent, timely and prospective credit opinions. Recently Fitch announced rating actions on all corporate credit unions as a result of NCUA’s plan to stabilize and restructure the corporate credit union system. This move by Fitch was not unexpected in light of the financial exposure to corporates from the recent $1.2 billion OTTI write-down announced by U.S. Central. [OTTI is a technical accounting term used to reflect a certain type of loss – or impairment.]
Mid-Atlantic Corporate’s individual rating has been lowered from A/B to B/C, which is the highest individual rating now offered to corporates by Fitch. However, Mid-Atlantic’s short-term rating remains unchanged at F1+. The long-term rating has been lowered from AA- to A+. Mid-Atlantic has been assigned a “stable outlook.”
“This change by Fitch was not unexpected given the impact of the U.S. Central announcement, but we were pleased that the change was so slight,” said Jay Murray, President/CEO. “We believe this reflects the fundamental soundness of Mid-Atlantic and our conservative investment philosophy.”
NCUA’s Corporate Proposal Is League’s Top Priority
With details and information rapidly changing on NCUA’s proposal to recapitalize U.S. Central FCU, the League staff, along with CUNA, is following the situation very closely. The Delaware League’s top priority is to closely monitor the proposal and evolving change and to keep credit unions apprised of current information through Together and other communications. More details of action steps recently taken by the League can be found in the “At Your Service” section of this newsletter.
COMPLIANCE RECAP
New Information Required for NCUA Call Report
Credit unions will be required to supply more information on delinquencies, foreclosures, and repossessions on the quarterly form 5300 “call report” – which is no surprise given the current market pressures.
In addition, NCUA has added a new page on “miscellaneous information” to collect more data on the services offered by credit unions. This implements one of the agency’s “Outreach Task Force” recommendations approved in May 2008. The quarterly call report is due by April 20, 2009.
On page 9, the agency requires credit unions now to check whether they offer such services as:
Starting last month, NCUA examiners are also collecting certain membership data at the end of regular examinations of federal credit unions through AIRES, the agency’s automated examination system, to develop membership profile information. The collection was approved last May to implement NCUA Outreach Task Force recommendations.
The March 2009 call report also calls for more detail on the delinquency rates of different types of real estate and construction loans, as well as charge-offs and recoveries. In addition, the agency is requesting more information on loan participations by type and the credit union’s credit and borrowing arrangements.
For more information, use this link: http://www.ncua.gov/data/5300/5300.html.
New Credit Card Regulations Go Into Effect in July 2010
Financial institutions, including credit unions, may have a long road ahead of them as they comply with new federal credit card regulations. The Office of Thrift Supervision, the National Credit Union Administration and the Federal Reserve Board approved unfair and deceptive credit card regulations December 18 that are slated to go into effect July 1, 2010.
The new rules prohibit double-cycle billing and universal default and prevent institutions from raising interest rates on pre-existing balances unless payments are past due 30 days. The new rules also will prevent credit unions and other financial institutions from treating a payment as late unless a reasonable time is provided from the time a periodic statement is mailed until the payment is due. In addition, when different annual percentage rates (APR) apply to different balances on a credit card account, such as purchases, balance transfers, or cash advances, the final rules require that payments exceeding the minimum payment be allocated to the balance with the highest APR or pro rata among all the balances.
Credit unions also are required to comply with recently finalized rules for open-end credit under Regulation Z by July 1, 2010, according to Mike McLain, CUNA assistant general and senior compliance counsel. The changes are “massive,” and it will likely take credit unions and their vendors all 18 months to comply with both rules, he said.
CUNA Analysis Available. CUNA’s final analysis of Regulation Z is now available. The comprehensive analysis provides additional information on amendments the Federal Reserve Board issued to open-end credit rules under Reg Z. The changes apply to credit cards and merchant-specific credit plans. The final rule includes changes to the format, timing and content requirement for five types of open-end credit disclosures under Reg Z, the Truth in Lending Act.
The analysis is found on CUNA’s website at
http://cuna.org/reg_advocacy/member/download/finalanalysis_fed_020909.pdf.
CU SYSTEM NEWS
General Motors announced a new Presidents’ Day Event, which will run from February 3 - March 2, 2009. This will offer consumers 0% financing for 60 months on select GM models or bonus cash of $1,000 to $2,000. This bonus cash will layer on top of other incentives, including the credit union discount. Plus, the credit union discounts are available on all 2008-2010 GM cars, SUVs, crossovers and light-duty trucks, excluding the 2009 Chevrolet Corvette ZR1 and 2009 Saturn Vue Two-Mode Hybrid.
Furthermore, GM is paying incentives to their dealers for every car sold with the credit union discount. This incentive is twice what they pay a dealer for a “0%” loan through GMAC. Because of this, dealers will more likely steer consumers to credit union financing over GMAC, especially to credit unions that have an indirect lending relationship with the dealer.
Visit www.lovemycreditunion.org to learn more about the program. For more information, please contact Jane Bailey at the League office or email jane@dcul.org.
Comprehensive Tax Guide Available for Free at IRS.gov
The IRS has placed its comprehensive tax guide for individuals on www.irs.gov, updating it for tax year 2008. The updated on-line version of IRS Publication 17, “Your Federal Income Tax,” contains more than 900 interactive links. Publication 17 has been updated with important changes for 2008, including information on the new recovery rebate credit, new first-time-homebuyer credit, and an additional standard deduction for real estate taxes. It has been published annually by the IRS for more than 65 years and has been available on the IRS website since 1996.
As in prior years, the publication provides information on how to file an individual tax return, what to include as income, how to calculate capital gains and losses, how IRAs and other expenses can affect how much income to report, whether to take the standard deduction or itemize, and how to figure taxes and credits.
Publication 17 is available online. However, those who do not have access to the Internet can call 800-829-3676 to request a free copy from the IRS.
Filene Research Offers Special Access to Reports for Small, Mid-Sized CUs
Recent economic events have made us all more aware of the need for relevant and reliable information that will help consumers and credit unions as they chart their course in this uncertain environment. In response, Filene is introducing an offer to assist in disseminating its research to benefit smaller credit unions. Filene will offer FREE online access to all credit unions under $5 million in assets and for a nominal fee of $99 to credit unions between $5 and $49 million. The $99 fee is a fraction of the cost for an annual membership.
Feds Update ID Theft Brochure
The National Credit Union Administration (NCUA), along with the federal bank and thrift regulatory agencies, has announced publication of a revised identity theft brochure to assist consumers in preventing and resolving identity theft. The updated brochure, “You Have the Power to Stop Identity Theft,” focuses primarily on Internet “phishing” by describing how phishing works, offering ways to protect against identity theft, and detailing steps to follow for victims of identity theft. To access a copy of the brochure, go to http://www.ncua.gov/Publications/brochures/IdentityTheft/index.htm.
CUNA Mutual Retirement Services Ranks Number 1
CUNA Mutual Group Retirement Plan Services was ranked No. 1 in the overall categories for “Recordkeeping/Administration” and “Investment Services” in the survey of 401(k) plan sponsors for 2008. CUNA Mutual has provided services to small retirement plans for more than 50 years and has been recognized as a top provider in surveys completed by 401kExchange and Boston Research Group since the surveys began in 2001. CUNA Mutual showed strength in customer service, education/communications, investment options/fees, recordkeeping fees, and plan administration.
“These top rankings across the board show that CUNA Mutual Group really knows its customer,” said Fred Barstein, president/CEO and founder of 401kExchange. “More importantly, it’s doing the right things to keep its customers happy.”
DELAWARE NOTES
The recollections of CEO David Clendaniel and other DOVER FCU staff members were featured in the February 9 issue of Credit Union Journal. To mark the 100th anniversary of credit unions, Credit Union Journal is publishing “100 voices,” answering “The one personal anecdote from my credit union career that comes to my mind and which sums up what credit unions are all about is…” If you have such stories to share, please contact Alice Smith at the League office.
The 2009 “Book of Lists” published by the Delaware Business Ledger featured a list of all Delaware credit unions by asset size. The listing gave information on the CU’s address, telephone, CEO, board chairman, asset size, website, and field of membership. Three credit unions – Del-One, Dover, and Louviers – also had advertisements in the book. Interestingly, the credit union listing came before the bank listing.
EDUCATIONAL OPPORTUNITIES
February/March QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
2/18 – Loan Officer Protocol
2/24 – Disaster Recovery
3/05 – Next Generation Banking
3/17 – Trust Accounts and Credit Unions
3/26 – Do’s/Don’ts of an Incentive Plan
The two-hour session runs from 11 a.m.-1 p.m.
3/10 – IRA Adminstration
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.
Accounting for NCUA’s Corporate Stabilization Program – Wednesday, February 18, at the League office. The session, led by CPA Jim Higbee, will be held from 1-3:30 p.m. for CUs over $10M in assets. Another session will be held from 4:30-6:30 p.m. for CUs under $10M in assets. Mid-Atlantic Corporate will also answer questions you might have. There is no charge for the session, but please RSVP to Alice Smith no later than noon on February 17.
NorthLegal Webinar – Thursday, February 19, from 1-2 p.m. Topic: Denial of services and expulsion, hosted by attorney Eric North. Fee: $125. To register, go to the following website, http://www.culaw.com/webnars.asp.
ACH Workshop – Tuesday, February 24 (snow date 2/26), at the League office. Review of general ACH processing and rule changes for global ACH payments. Presented by Mid-Atlantic Corporate. Fee: $65. Registration deadline: February 17.
Delaware Credit Unions’ “Hike the Hill” to Visit Our Members in Congress – Wednesday, February 25. A van, sponsored by the League’s Governmental Affairs Committee, will pick up riders at the League (9 a.m.) and at the Park and Ride on Route 299 near Odessa (9:15 a.m.) for our trip to Washington. Call Alice Smith by February 20 to sign up.
Human Resource Council: Employment Law Update – Wednesday, March 18, from 10 a.m.-noon at the League office. Topics: Family and Medical Leave Act, Americans with Disabilities Act, and Fair Pay Act. No fee for council members; non-members: $100. Registration deadline: March 11.
Facilities Should Be Part of Your Strategic Plan Education Session – Two times and locations:
• March 11 from 5:15-7:30 p.m. League office
• March 12 from 4:15-6:30 p.m. Del-One, Dover
Presenter: League president Pat Mahaney. For board members, CEOs, and facility/ operations managers. Fee: $95. Regis. deadline: March 4.
CUNA Mutual Webinar: Developing a CU Safety Program – Wednesday, March 11, from 11 a.m.-noon. This session will address ongoing needs for worker protection. Learn how to anticipate, identify, and eliminate conditions or practices that could result in employee injuries and illnesses. Go to www.cunamutal.com/CU_Protection/webinars.
Book the Dates! League Annual Meeting and Trade Show April 30-May 2, Clarion, Ocean City, MD |
LEAGUE SERVICES
Dedication of Ruth Lawley Welcome Center. The League board and staff hosted a reception and dedication ceremony honoring in memoriam executive assistant Ruth Lawley on February 10 at the League office. Thirty-two members of Ruth’s family, friends, and co-workers joined in dedicating the front office as the “Ruth Lawley Welcome Center,” honoring Ruth’s 24 years of service as the “voice and face” of the League. A framed proclamation and photo of Ruth will hang behind her desk. Speakers at the dedication included former League president Bob Walls, current League president Patrick Mahaney, and board chairperson Joel Romaine.
Over the last decade, the League board of directors has recognized two other individuals who have made a lasting impact on the credit union community in Delaware by dedicating a portion of the League building in that person’s memory or in his/her honor. The first was Clement Shaller, a 35-year League board member, in whose memory the League board room is dedicated. The League education center is dedicated to former board member and volunteer Joseph Brown, who was recognized for his stalwart commitment to the ongoing education for volunteers and professional staff. The Ruth Lawley Welcome Center is the third such honor. Bob Walls made the following statement, “The Ruth Lawley Welcome Center is not just a metaphor for this honor; it was the essence of her soul – beautiful on the inside and out – that made everyone, without exception, feel welcomed and appreciated whether they were an old friend or new acquaintance.”
Commemorative plaque honoring Ruth Lawley
League Annual Meeting News. The official call-to-meeting mail was sent on February 4 to credit union CEOs and board chairs for the 2009 Delaware Credit Union League Annual Meeting & Trade Show. The show will be held April 30-May 2, 2009, at the Clarion Fontainebleau Hotel in Ocean City, Maryland. Contact Jane Bailey at 800-292-7875 or email jane@dcul.org with questions about the program and events.
Car Discounts for CU Members. The “Invest in America” program continues to grow, with even more discounts as the program progresses. The Delaware League coordinated a group purchase of 21,000 “Invest in America” statement inserts for participating Delaware credit unions. Contact Jane Bailey for more information.
Shared Branching Update. American Spirit FCU opened its office in Newark, Delaware, as an outlet on the shared branching network. The branch is located at 1110 Elkton Road, Newark, Delaware. There are currently three outlets in Delaware, serving members of participating credit unions. Chestnut Run FCU and Eagle One FCU are also part of the network and both of their offices are outlets. Nationally, there are 3,549 locations.
Currently a promotion is being offered to credit unions that join the network by the end of February. If your credit union has thought about joining the shared branching network, now is the time! Credit unions that sign up in the month of February will be eligible to save up to $3,650 in fees. This incentive includes up to $950 in startup fees and up to $2,700 in monthly fees during the first six months after startup. Your credit union must have the signed contracts in by February 28, 2009, to take part in the incentive. You will then have up to six months to become “live” based upon your data processors’ implementation schedule. For more information on how to become a part of shared branching, contact Jane Bailey at the League.
Corporate Rescue Plan: League Actions. Pat Mahaney and Alice Smith participated in CUNA’s audio conference on February 4. Over 3,000 credit union participants heard a review of NCUA’s corporate rescue plan, an examination of its impact on credit unions, and ideas for mitigating the costs for credit unions. This 90-minute event featured CUNA, NCUA, and credit union experts on regulation, law, accounting, and other areas. As a result, the League is taking the following steps to help our credit unions keep on top of this issue:
League president Pat Mahaney is carefully following this issue and has participated in several conference calls with CUNA CEO/President Dan Mica. He has also had conversations with several credit unions on how their bottom lines will be affected by the proposal.
CEO Meeting on iBelong Statewide Marketing Campaign. The committee met on January 29 to review a proposed “iBelong” media placement campaign, presented by John Bowser and Thomas Vranich from Target Media. The methodology used to assemble the proposal mimicked the reach and frequency initiatives that the Pennsylvania credit unions currently use and included equal media exposure for all three counties in Delaware, thereby ensuring equality for all credit unions. The committee is now working on a proposal as to how Delaware credit union can participate in this cooperative ad program. The following people attended the meeting: Sharee Coleman (Del-One), Paula Campbell (Sussex County), Karen Terry (DEXSTA), Sharon Schaeffer (Delaware First), Susan Winward (Wilmington Postal), Carole Langiu (Dover FCU), and Alice Smith (League liaison).
League Travel. League president Patrick Mahaney attended the CEO Summit in Florida in January. He also was a guest speaker at DPL FCU’s annual meeting. EVP Jane Bailey attended Wilmington Postal FCU’s annual meeting; and Pat visited with the staff of Wilmington Police and Fire FCU.
Delaware League News and Risk Alerts. In January, the League emailed/faxed 17 news alerts, many having to do with the corporate issue. There were also two risk alerts about the Heartland credit card security breach and smishing text messages on cell phones.
GOVERNMENTAL AFFAIRS
CUNA’s Governmental Affairs Conference. Twenty-one people are planning to attend this year’s Hike to the Hill on Wednesday, February 28. A luncheon will be held at the Capitol City Brewery at 11: 45 a.m. so that the three groups can assemble. Meeting times with our members in Congress are still being determined. The Governmental Affairs Committee is sponsoring a van that will leave the League office at 9 a.m. on the 28th, with a stop at 9:15 a.m. at the Park and Ride at Route 1 and 299 near Odessa. Call Alice Smith to join this group.
CULAC Report. Kudos to all our credit unions that participated in fundraising for CULAC in 2008. As a result of coin sales, candy bar sales, Deduct-a-buck, Dress Down Days, and raffles, individual credit union members contributed $5,800.75. It looks like our 2009 goal will be the same as in 2008 - $5,346.89
EDUCATION
Education Session Summary in 2008. Every CU has received a report of all training sessions offered by the League in 2008, including the number of participants and credit unions that attended each session. The chart details the 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: Total # of individual training sessions in 2008 – 98. Total # of staff members and volunteers trained – 1126.
Scholarships Available. Education scholarships for 2009 were mailed at the end of January - two $50 vouchers per credit union with assets of less than $20 million. A total of 16 credit unions received the voucher.
January Education SessionsDate |
Title |
Speaker |
# Individuals |
# CUs |
01/14/09 |
Economic Update/ Conference Call |
Mid-Atlantic |
9 |
5 |
01/18-21 |
CEO Summit |
CUNA |
1 |
1 |
01/22/09 |
Daily ACH Process/Webinar |
Mid-Atlantic |
11 |
5 |
01/26/09 |
5 or More Things Supervisory Committee Members |
Carolyn Warden |
9 |
6 |
01/27/09 |
Marketing Compliance for CU Professionals |
Carolyn Warden |
7 |
4 |
Quickbites |
||||
01/08/08 |
Reg CC |
Teleconference |
4 |
1 |
01/21/08 |
Hands on Business Development |
Webinar |
2 |
1 |
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).