Volume 29, Number 4 February 28, 2009
Volume 29, Number 4 February 28, 2009
HEADLINE NEWS
Mid-Atlantic Addresses Delaware
CUs Regarding NCUA Action Plan
“Mid-Atlantic Corporate FCU does not have a liquidity problem and is well capitalized” is the message that Mid-Atlantic President/CEO Jay Murray and Brad Stewart, Senior Vice President and Chief Investment Officer, delivered at a session hosted by the League on February 18. However, Mid-Atlantic is impacted by the issues confronting U.S. Central Corporate FCU and NCUA’s Corporate Stabilization Action Plan as it is part of the corporate system.
Unlike some of the other corporates experiencing difficulties, Mid-Atlantic maintained and executed a conservative investment approach to provide its members liquidity. Therefore, Mid-Atlantic is safe and sound and will continue to provide services to members. Murray admitted that should U.S. Central’s condition continue to decline, Mid-Atlantic would experience some diminution in capital. However, Mid-Atlantic is liquid and has sources and borrowing power outside the system should it need to tap those resources.
Unfortunately, there are still many unanswered questions regarding the total volume and dollar amount of losses facing the entire corporate system and its impact on the system.
Murray assured the credit union leaders that Mid-Atlantic is operating as business as usual and will continue to fulfill its mission as a liquidity provider and payments processor to the credit union system. In Mid-Atlantic’s letter to member CUs, this comment regarding the two-tiered system of corporates appeared, “Ultimately, if a wholesale corporate (U.S. Central) does not offer the best value or service to enable us to fulfill our mission, then Mid-Atlantic has the resources and wherewithal to seek alternate providers or to develop necessary services internally.”
The League also wishes to thank Jim Higbee, Rowles and Company partner, for aiding 18 credit unions in understanding their accounting responsibility under NCUA’s corporate revitalization plan.
Regulatory Action Alert: Comments Sought on NCUA Corporate Proposal
The National Credit Union Administration (NCUA) has issued an advance notice of proposed rulemaking (ANPR) regarding the structure and operations of corporate credit unions.
The ANPR focuses on the role of corporates in the credit union system, including their membership structure, size, and types of services offered. Additionally, the ANPR details possible changes to the regulations governing corporates, specifically in regard to capital, permissible investments, management of credit risk and liquidity, and corporate governance.
Comments in response to the ANPR are due to NCUA by April 6. Please send a copy of your comments to the Delaware League at pat@dcul.org and to CUNA at mdunn@cuna.coop.
A copy of the ANPR can be accessed at http://edocket.access.gpo.gov/2009/pdf/E9-2292.pdf.
Delaware CUs Hike the Hill
Twenty-eight credit union activists visited the offices of Congressman Castle, Senator Carper, and newly appointed Senator Kaufman to discuss credit union issues, including the economy, the ability of credit unions to tap TARP funds, and support for legislation that makes permanent the $250,000 deposit insurance limit. However, the advocates opposed mortgage bankruptcy cramdown bills (H.R. 200, H.R. 225, S.61) because they are overly broad in their application, scope, and duration.
Credit unions represented on the Hike to the Hill were American Spirit, Delaware Alliance, Delaware First, Delaware State Police, DEXSTA, Dover, DPL, and Sussex County. Team leaders were League president Pat Mahaney, Dover CEO David Clendaniel, and DEXSTA CEO Jerry King.
Ten Delawareans joined 4,200 attendees at the 2009 CUNA Governmental Affairs Conference.
COMPLIANCE RECAP
NCUA Alert on HMDA Filings
Credit unions subject to Home Mortgage Disclosure Act requirements for 2008 activity must submit loan/application register (LAR) data to the Federal Reserve Board (Fed) by March 2, 2009. Noting that date in a recent regulatory alert, #09-RA-03, the National Credit Union Administration (NCUA) also warned of the possible consequences of a late filing. After March 2, the Fed will provide a list of delinquent filers to NCUA.
Credit unions appearing on this list could become subject to civil money penalty assessments. A credit union must file HMDA data in 2009 if it meets these three criteria:
Credit unions with 25 or fewer entries on their LAR may report and submit the data in paper form. However, all credit unions that have more than 25 entries on the LAR must submit their reports in an automated, machine-readable, form.
The FFIEC maintains an Internet site, http://www.ffiec.gov/hmda/default.htm, that is devoted to providing financial institutions with assistance in complying with HMDA requirements. This site also provides access to a comprehensive guide entitled A Guide to HMDA Reporting – Getting it Right! that provides information about the history of HMDA, data reporting requirements, LAR completion guidelines, geocoding tools, and disclosure requirements.
Use this resource link to access the NCUA Alert: http://www.ncua.gov/news/express/xfiles/09-RA-03.pdf.
Note: CUs that meet criteria #2 and #3 above and that have total assets exceeding $39 million as of December 30, 2008, will have to collect HMDA data during calendar year 2009. Data must be submitted to the Fed no later than March 1, 2010. All other credit unions are exempt from filing HMDA data associated with mortgage applications processed during 2009.
Truth-in-Savings Rule Analysis
The Credit Union National Association (CUNA) has analyzed a final rule by the Federal Reserve Board that addresses disclosures in connection with overdraft protection plans. Although credit unions are not subject to the Fed's rule, CUNA expects the National Credit Union Administration to issue a similar rule in the future.
The final rule – effective July 1, 2010 – amends Regulation DD, the Truth-in-Savings Act. It requires financial institutions to:
• Disclose on a periodic statement the dollar amounts charged for overdraft fees and returned item fees, both for the month and year-to-date; and
• Provide account balance information through an automated system that discloses only the amount of funds available for withdrawal, without including the additional funds that would be available under an overdraft program.
In conjunction with this final rule, the Fed also issued a proposal under Regulation E, the Electronic Fund Transfer Act, that will provide additional protections relating to the assessment of overdraft fees. These changes will only apply to ATM and debit card transactions. For more information, use the following link: http://www.cuna.org/reg_advocacy/member/analysis/fed_021609.html.
Educational Pamphlet on the Currency Transaction Reporting Requirement
FinCEN is providing a pamphlet on currency transaction reporting as a resource for financial institutions to help address questions frequently asked by their customers/members. To find a copy of the pamphlet, go to the following website: http://www.fincen.gov/whatsnew/pdf/CTRPamphletBW.pdf.
Here is a sampling of the questions addressed:
• Why is my financial institution asking me for identification and personal information?
• Can I break up my currency transactions into multiple, smaller amounts to avoid being reported to the government?
This would also be great information to provide to front-line staff, who often have to answer such questions from members.
CU SYSTEM NEWS
Regulatory Changes to Reg Z Affect Lending Procedures
Changes to Regulation Z recently issued by the Federal Reserve Board mean changes to the way credit unions conduct their lending business. The amended regulatory language and how it affects lending procedures was explained by CUNA Mutual Group associate counsel William Klewin during a regulatory panel discussion at CUNA’s annual Governmental Affairs Conference (GAC).
The regulatory changes specifically affect multi-featured, open-end lending, a practice used for nearly 30 years, which allows credit unions to have a single lending contract with a member covering multiple-lending products. Under this plan, the member can have multiple sub-accounts with different program features and rate structures.
“Some features of the program might be used repeatedly, like an overdraft line, while others might be used infrequently, such as the part of the credit line available for secured credit,” said Klewin. “On the other hand, if the program as a whole is subject to prescribed terms and otherwise meets the definition of open-end credit, the program would be considered a single, multi-featured plan.”
Because regulatory observers feared a change that would negatively impact multi-featured, open-end lending practices, credit union organizations – including CUNA Mutual – worked to raise awareness of the issue and prepare for potential disruptions to credit unions’ lending practices.
Klewin said the final rule keeps the multi-featured, open-end lending program intact with the following commentary changes:
• Each sub-account is not required to have a self-replenishing credit limit;
• Language was retained that views the plan as a whole while some features may be used infrequently; and
• Credit unions are permitted to verify information in certain circumstances to assure continued creditworthiness.
“The rule changes require credit unions to review their products, policies and procedures to identify any necessary changes as a result of the new regulations,” Klewin said. He further suggested the affected credit unions work closely with their data processing and loan origination system providers to support any needed changes.
In addition to communicating best practices around Reg. Z change implementations, CUNA Mutual continues to post updates on these changes to www.loanliner.com/regz, which Klewin recommended.
Minimum Distributions (RMDs) Waived for 2009
A February 20, 2009, article from CUNA said that, under the new Worker, Retiree, and Employer Recovery Act signed into law in 2008, Individual Retirement Account (IRA) holders, age 70.5 and over, do not have to take the “required minimum distribution (RMD) from qualified retirement accounts, including 401(k) plans, 403(b) plans and IRAs, for 2009.”
Two important points that account holders should know: 1) They will have to plan to take their RMD scheduled for 2010 by December 31, 2010, and 2) If they have not taken their 2008 RMD, they must do so by April 1, 2009.
Credit unions must remember to adjust their IRA RMD notices to their members to reflect the new changes to the RMD requirement for 2009. Credit unions are also encouraged to notify their members of the change.
This information is contained in CUNA’s February issue of Compliance Challenge, which was mailed to all CU managers/CEOs on February 15.
“Invest In America” Program
The Delaware League is pleased to report that a growing number of our credit unions are participating in the Invest in America program, which offers deep discounts and cash rebates to credit union members buying a new GM or Chrysler vehicle. Twelve Delaware credit unions have signed the opt-in agreement that ensures their continued participation and member benefits past March 31. Credit unions are being asked to complete the non-binding opt-in form so the Michigan League's CUcorp can quantify the level of support for the program and report this to the manufacturers. Credit unions are being asked to complete certain minimal marketing requirements in order to continue participation past the first quarter. The participating CUs are: American Spirit,
Chestnut Run, Delaware Alliance, Delaware First, DEXSTA, DPL, Louviers, New Castle County School Employees, Newport Site Employees, Sussex County, U-Del, and Wilmington Postal. For more information, contact Jane Bailey at the League.
DELAWARE NOTES
On February 10, students from Seaford High School toured the SUSSEX COUNTY FCU Seaford branch. High School teachers Diane LeCompte and Helen Trivits brought the students to the branch so that they could observe first hand how credit unions operate and the services they offer. The students were also provided with information regarding teens and money.
Participants (l. to r.): Liz Ferber, Seaford High School student; Pamela Fleuette, Sussex County FCU CEO; and Briana Walton, Seaford High School student
Forty-four bowlers took to the lanes at the League’s Third Annual CU Bowl held Friday, February 13, at Bowlerama Lanes in New Castle. Joe Sisofo (Diamond State FCU) took home the trophy for the “Highest Score-Male” for bowling a 214 game. Joyce Gilmore of Experian bowled a 132 game and was awarded “Highest Score-Female.” “Most Unusual Bowler-Male” and “Most Unusual Bowler-Female” went to Phil Sawyer (American Spirit FCU) and Ann Mera (Delaware First FCU) respectively. The Corporate Kingpins walked away with the title of “Highest Team Game.”
The Corporate Kingpins: Joe & Kim Reiner (Mid-Atlantic Corporate FCU), Gabe Archangelo (Chestnut Run FCU), and Joe Sisofo (Diamond State FCU) accept their award for Highest Team Game.
Many thanks to our lane sponsors: CUNA Mutual; Mid-Atlantic Corporate FCU; MetLife (Reverse Mortgages); M&T Bank; Overton & Associates; Visions, Ink; PaCUSC (Shared Branching); Rowles & Company; CUMAnet (Mortgages); and the Delaware League Strategic Planning Program.
To view photos from the event, go to: http://www.dcul.org/Bowling/index.html. A special thanks to Jim Chilcutt for taking all the great photographs.
AMERICAN SPIRIT FCU recently began using home banking images services from Mid-Atlantic Corporate.
POSITION POSTING |
A credit union branch, located in New Castle, is seeking a qualified candidate for a full-time position for a member service representative to perform daily teller operational duties. Interested applicants should send resume to Bonnie Cahall, HR Dept., Delaware State Police FCU, P.O. Box 800, Georgetown, DE, 19947, by Friday, March 6, 2009.
EDUCATIONAL OPPORTUNITIES
March QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
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 Administration
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.
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. Registration deadline: March 4.
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 (Title VII). No charge for registered council members; $100 for non-council members. Includes lunch. Registration deadline: March 11.
Cards Council – Wednesday, April 1, from 10 a.m.-noon at the League office. Topics: Responding to the economic downturn and data breaches. No charge for registered council members; $100 for non-council members. Includes lunch. Regis. deadline: March 25.
Book the Dates! Early Bird Discount Registration deadline: March 15 |
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).