Volume 29, Number 10                                                             June 15, 2009

HEADLINE NEWS

Preliminary Escheat Report Due August 1, 2009
     All credit unions are required to make a preliminary report to the Delaware State Escheator at the Bureau of Unclaimed Property by August 1, 2009. The report lists unclaimed property, which refers to various types of personal property of Delaware residents that has been abandoned for five years or more, including share and share draft accounts, uncashed share drafts, dividends, etc.
     Every Delaware CU, regardless of whether it holds unclaimed property, must file a copy of Form AP-1 (Report Verification), which provides a summary of the CU’s report and which must be signed and verified by a CU officer. An additional itemized form must be completed if you hold unclaimed property. The preliminary report is due in August, and the final report and remittance of monies in any such accounts are due by November 10, 2009. During that three-month interval, CUs need to advertise the existence of these abandoned accounts.
     Unclaimed property forms and a booklet describing the process for submitting unclaimed property is available at www.state.de.us/revenue (click on “unclaimed property”). The League will soon send out a full packet of escheat information, including those materials, to each CU manager/CEO.
     New Requirements in 2009. 
•    A credit union must file electronically if the unclaimed property owner count is greater than 10.
•    Where the expense of a newspaper advertisement exceeds 50% of the reported value, a publication waiver may be requested by submitting a waiver request form. This form will be part of the Escheat Packet sent out by the League. Or go to: http://revenue.delaware.gov/information/waiver.pdf.
     Remember, amounts in excess of $25 must be reported to the state of the member’s last known address. You will need to contact each applicable state to obtain the correct filing forms, deadlines and dormancy periods (which vary state to state). For example, in Maryland and most recently in New York, the dormancy period has dropped to three years before abandoned property must be turned over to those states.
     Contact Susan Fallon if you need contact information for other states or if you need more detailed escheat reporting information. The League also has sample letters that can be sent to members who have a dormant account.

Help Support CULAC by Hosting “Dress Down” Days
     Summer is here, and everyone likes to dress more casually to ward off the heat. The League Governmental Affairs Committee would like you to help in this effort and raise money for credit union political action by giving your employees the opportunity to “dress down” for casual comfort during the months of July and August.
     Credit unions are encouraged to participate in this event by allowing staff to make a suggested donation to the Credit Union Legislative Action Council (CULAC) for the privilege of wearing casual dress for an entire week or designated days. Each CU will define what constitutes casual dress.
     A packet containing instructions on how to participate has been mailed to all CUs, along with a form indicating that your CU wishes to participate. Please fax or email this form back to Alice Smith (alice@dcul.org) at the League office.
     The money raised during Dress Down Days will be forwarded to CULAC, credit unions’ national PAC, which collects funds from individuals to support CU friends in federal election campaigns.
     Dress Down Days is part of the Governmental Affairs Committee’s efforts to raise $5,346.89 this year to help the national CULAC contribution campaign. This is also a good activity for Credit Union Week, the third week in October.

NCUA NOTES & COMPLIANCE

PIMCO Report Available Online
     The National Credit Union Administration (NCUA) has posted a redacted version of a report prepared by the Pacific Investment Management Company LLC (PIMCO) on behalf of the NCUA. The redacted report was released in response to requests under the Freedom of Information Act (FOIA) and is available on NCUA’s website at the following location: http://www.ncua.gov/GenInfo/FOIA/FOIA_Request.aspx.
     The PIMCO report was the basis, in part, of the NCUA’s action to conserve two corporate credit unions: U.S. Central FCU, Lenexa, Kansas, and Western Corporate FCU (WesCorp), San Dimas, California. PIMCO is a leading global investment management firm.

NCUA Webinar - June 24, 2009
     NCUA has scheduled the corporate credit union update webinar for Wednesday, June 24, at 1:00 p.m. Eastern Time. Registration for the webcast will open on Friday, June 19. Participants will be able to register up to one hour prior to the start of the conference.  A link with the registration information will be posted on NCUA’s website at www.ncua.gov on June 19.

Small Changes to “Red Flag” Rule
     NCUA, the Federal Trade Commission, and the other financial institution agencies recently issued a final rule that makes technical corrections to the identity theft “red flags” rule.
     The changes address discrepancy rules and affiliate marketing rules that were issued under the Fair and Accurate Credit Transactions Act. They include a clarification that discrepancy notices need only be provided by nationwide consumer reporting agencies. The agencies also made these two corrections to the affiliate marketing rules:
•    A model form that allows consumers to voluntarily opt-out of marketing by businesses and their affiliates was amended by inserting language in brackets that allows businesses to disclose the duration of any opt-out period; and
•    A provision in the instructions to the model forms was included to clarify that a person may add a disclosure to the forms that explain the treatment of opt-outs by joint consumers. (See related article below.)
     For more information about the identity theft red flags rule and the recent technical changes to it, use this resource link to read the Credit Union National Association’s (CUNA) final rule analysis: http://cuna.org/reg_advocacy/member/analysis/ncua_060309.html. 

Red Flags Website Available
     The Federal Trade Commission (FTC) offers a “Red Flags” website to help creditors and financial institutions design identity theft prevention programs. The rule requires “creditors” and “financial institutions” to develop written programs to identify the warning signs of ID theft, spot them when they occur, and take appropriate steps to respond to those warning “red flags.” To access the document, “Fighting Fraud with the Red Flags Rule: A How-To Guide for Business”, go to http://www.ftc.gov/redflagsrule.

CUNA to Credit Unions: Compliance Efforts Should Focus on New Card Rules
     Recently enacted credit card laws overlap with the Federal Reserve’s Regulation Z rules and NCUA’s unfair and deceptive acts or practices rules (UDAP) that were issued last year. CUNA recommends that credit unions focus on the new law with regard to their efforts to be in compliance with Reg Z amendments and UDAP requirements. Portions of the credit card law, which was signed by President Barack Obama in May, contain requirements that are similar to those set forth by Regulation Z. Reg Z provides guidelines for the disclosure of the terms and cost of many types of consumer loans, and UDAP seeks to govern certain credit card and loan business practices. However, the new law will also push many effective dates forward, with some provisions entering into force in 9 months and others becoming effective within 90 days. [MORE HERE]

New Credit CARD Act Topic of Audio Conference
     CUNA has scheduled an audio conference for June 18 on requirements of the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. This act aims to prevent lenders from making arbitrary changes to interest rates and terms associated with a credit card that holds an existing balance. The fee for the conference, which starts at 2 p.m. EDT, is $89. According to CUNA, conference participants will:
•    Examine different elective dates and restrictions on increasing the annual percentage rate;
•    Identify limits placed on fees that can be charged and procedures that must be followed when changes are made in the interest rate;
•    Hear a discussion of the other restrictions such as due dates, late payment fees, minimum payment disclosures and gift cards;
•    Explore new restrictions on cards offered to students; and
•    Get a practical look at implementing new rules from a credit union practitioner.
     To register for the conference, use this link:  http://training.cuna.org/audio/T06189_fct.html.

CU SYSTEM NEWS

Biz Kid$ Curriculum Now Available for Download
     Biz Kid$, which is funded solely by credit unions, is now shown on more than 97 percent of public television stations. Lesson plans and activities that complement all three seasons of Biz Kid$ are now available on CD-ROM or online at www.ncuf.coop/home/programs/bizkids/bizkids.aspx.
     Resources include marketing materials and ready-to-use curriculum in both Spanish and English. The curriculum includes 78 hours of classroom content for students in grades 4-8. All resources are available at no cost to credit unions, teachers and other community educators.
     New episodes of the third season of Biz Kid$ launched in most media markets in January and are airing in all 50 states and 97 percent of all national markets throughout this year.

Feds Update ID Theft Brochure
     NCUA, along with the federal bank and thrift regulatory agencies, has published 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. The brochure includes contact information for three major credit bureaus, where to report suspicious e-mails, and where to access additional information. The brochure is available to download from the NCUA: http://www.ncua.gov/NewsPublications/Publications/PDF/brochures/IdentityTheft/PhishBrochure-Web.pdf.

Members’ Financial Counseling by Accel
     The credit union legacy is helping members reach their financial goals. A growing number of credit unions are turning to Accel’s Member Financial Counseling for the most comprehensive financial counseling service available today. As a CUNA Strategic Partner, Accel is a non-profit organization founded by credit unions to serve CUs. Members turn to Accel for assistance with:
•    Personal and family budgeting
•    Issues that caused a loan decision
•    Understanding their credit report and how to improve their score
•    Setting and achieving financial goals
•    Reconciling a checkbook
•    Personal money management
•    Solutions for debt repayment
•    Avoiding bankruptcy, foreclosure, and repossession
     For more information on Accel, visit Accel’s website, http://www.accelservices.org/index.aspx.

Benefits of Registering for CUNA’s Live Webinars and Audio Conferences
     Credit unions now have access to archived versions of CUNA audio conferences and webinars that their staff members attend live as part of their registration tuition. The archived events, which will be available for six months, are included in the tuition price to help credit unions stretch their training dollars a bit farther.
     Credit union professionals can log into CUNA’s new archived programs web page to quickly and easily access all the archived events they registered for, along with any events they have access to, because other employees at their credit union registered for them.
     For more information or to view the new archived events page, go to training.cuna.org and select “Archived Programs.” Program questions may be directed to (800) 356-9655, ext. 4249.
     League’s Biweekly Meetings Reminder. The League publishes a list of upcoming webinars and audio conferences being offered by CUNA on the back of our biweekly “Meetings Reminder.” If you are interested in receiving an email version of this calendar, email alice@dcul.org.

DELAWARE NOTES

Welcome to the following new staff members at AMERICAN SPIRIT FCU: Bob Hinchey, vice president of operations, and Kristen Carlone, business development manager.

In an effort to earn their money management badges, Girl Scout Troop 1321 requested a tour of SUSSEX COUNTY FCU. After their tour, the girls were taught expert money management practices and how important it is to effectively manage their finances responsibly. They also learned how financial institutions operate and how the CU can help them to achieve their goals. The girls prepared a list of questions, which were happily addressed by Jessica Neal, assistant branch manager. The girls were impressed with their tour and were then introduced to the staff and back office of the Seaford branch. Their last introduction was to Pamela Fleuette, CEO of Sussex County FCU, who also spent time talking with the girls.

Girl Scout Troop 1321 and Sussex
County FCU CEO Pam Fleuette

The frogs were flyin’ on Thursday, May 28, in Claymont. Employees of EAGLE ONE FCU volunteered to staff the “Frog Bog” game for the night at the Holy Rosary Church Carnival. While none of the staff has ever touched a real frog, they managed to rope in a few gamers and gave away a few prizes. Everyone had a lot of fun, and this is another great example of how the credit union supports the local community of Claymont.

EDUCATIONAL OPPORTUNITIES

June/July QuickBites Teleconferences
One-hour sessions run from 11 a.m.-noon:
•    6/22  Designing a Loan Department
•    6/30  Business Development in Community Charters
•    7/08  Repossession and Sale of Collateral
•    7/21  Death of a Member
•    7/29  Credit Union Employment Issues
The two-hour session runs from 11 a.m.-1 p.m.
•    7/15  Social Media Marketing
The fee for the one-hour sessions is $99; the two-hour session fee is $169. The deadline to register with Bernadette Hines: one week before the session.

Marketing Council Meeting – Monday, June 22. Topic: Student branching and other networking discussions. The session will be held at the League office from 10 a.m.-noon, followed by lunch. There is no fee for council members; non-members - $100. Call Alice Smith for reservations.

Auto Industry Update & Indirect Lending Program Seminar – Tuesday, July 9, from 10 a.m. – noon. This complimentary session will be presented by CUDL, the country’s leader in indirect and point-of-purchase lending for the credit union industry. Credit unions attending this session will:
•    Gain vital insight into the auto lending marketplace in order to grow your vehicle loan portfolio.
•    Learn how to capture your members’ lending loyalty by providing a one-stop shopping resource.
•    Discover how to enhance overall member satisfaction, drive member financing, and strengthen both member loyalty and dealer partnerships.
     To register, email or call Jane Bailey at jane@dcul.org by July 1.

Is the Economy Improving? Conference Call – Presented by Brad Stewart, SVP/CIO of Mid-Atlantic Corporate, on July 9, from 11 a.m.-noon. Brad will examine the most up-to-date economic factors, such as the housing market, current unemployment rate, retail demand and the stock market. Deadline to register is June 30. Contact Mid-Atlantic’s marketing department to enroll. Call 800-622-7494, ext. 3249, or go online to http://www.register123.com/event/profile/form/index.cfm?PKformID=0x7679812bb4.

LEAGUE SERVICES

          Credit Union Direct Lending (CUDL). CUDL will present an informational meeting about its indirect lending program on July 9 at the League office. Indirect lending provides an opportunity for credit unions to garner more auto loans. At the same session, CUDL will also provide an update on the auto lending environment, which is changing daily. 

          Small Business Administration. Jayne Armstrong, district director of the Small Business Administration (SBA), recently presented opportunities for Delaware credit unions to help their members acquire small business loans with the help of the SBA. American Spirit FCU has already been approved as an SBA lender.

          PAWS Presentation. Jane Bailey, League executive vice president, presented PAWS for People™ with a check for $1400, which was raised from the DCUL convention’s “Cutest Canine Contest.” Boots, the winner of the contest, his owners, Sharon Schaeffer who submitted his photo, representatives from PAWS, and several therapy dogs were present for the event. 

          Fall Golf Outing. The League will again co-sponsor the “Golf Outing for Education” with Louviers FCU in the fall. The outing will be held on October 15, 2009, at the Deerfield Golf Club in Newark. Proceeds from this outing are split between Louviers’ scholarship fund and the League’s scholarship fund.

          Invest in America Update. As General Motors Corporation filed for bankruptcy on June 1 and prepares to launch the new GM in 60-90 days, it has taken steps to protect current and new GM customers in honoring all warranties and incentive programs, including the credit union Invest in America program. GM said credit union members will receive supplier pricing through the end of the year.
          David Adams, President/CEO of CUcorp and the Michigan Credit Union League, which manages the Invest in America program, told CUNA News Now that both GM and Chrysler have made it clear that they will continue to support the program. On June 1, Chrysler announced it would extend its terms with Invest in America to June 30. The program had been slated to end May 31.
          Both companies indicated that credit union financing remains important to them. More than 1,700 credit unions, representing about 40 million credit union members nationwide, are participating in “Invest in America.” For more information, visit http://www.lovemycreditunion.org/.

COMMUNICATIONS/PUBLIC RELATIONS

          Corporate Stabilization Plan: League Actions. The ongoing situation with corporate credit unions has obviously been the focus of the League’s attention over the last few months. League staff is constantly monitoring the situation to keep Delaware credit unions updated. The League has sent out numerous communications (see next report) regarding the impact of the corporate stabilization plan, many of which have been forwarded from NCUA and CUNA.

          Delaware League News and Risk Alerts. In April, the League emailed/faxed 22 news alerts; the majority dealt with NCUA and the corporate stabilization issue and the others concerned pandemic and legislative issues. In May, we sent out 24 updates dealing with the same issues. There were also seven risk alerts distributed in April and May, which included information on fraudulent checks and computer vulnerabilities.

          League Staff Travel. On April 16, Alice Smith addressed a finance class at Goldey-Beacom College regarding credit unions and how they are different from banks. On April 21, Pat Mahaney and Alice attended the groundbreaking for Louviers FCU’s new headquarters in Newark. Both of them also attended the ribbon-cutting at Del-One’s seventh branch south of Smyrna on May 21.
          During the past two months, League president Mahaney has visited the following credit unions: Delaware First, ICI America, Preferred Financial, and Wilmington Postal. He also combined a visit with Delaware State Police FCU while attending the League’s robbery training session in Georgetown on June 10. Pat also participated in the recent BayHealth outing with Dover FCU staff members David Clendaniel, Bobby Naftzinger, and Bettie Campbell. League executive vice president Jane Bailey also hosted a gathering of selected staff members from Dover FCU, Del-One, and First State FCU on June 4.

GOVERNMENTAL AFFAIRS

           Positive Happenings on the Legislative Front. The third week in May was an extraordinary week of legislative activity which benefitted credit unions. On May 21, President Obama signed into law S. 896, the housing bill that contains the provisions we supported and worked for to mitigate the cost of NCUA’s corporate stabilization actions. Credit unions’ grassroots efforts on behalf of the corporate provisions were also exceedingly important in this process. By CUNA’s estimate, Congress received more than 30,000 contacts from credit unions prior to passing the legislation. The grassroots effort complemented a sustained effort over the last several months on CUNA’s part in Washington to advance this legislation. The League gives special thanks to the following credit unions who shared their communications with us: Delaware Alliance; Del-One; Dover; Newark, Delaware City Employees; Newport Site Employees; Seaford; Sussex County; and U-Del. Many of these same credit unions followed the successful legislative activity with letters of thanks to Delaware’s members in Congress, who supported all the bills related to credit union activity. League president Pat Mahaney also wrote letters of thanks on behalf of all Delaware credit unions.
          The credit card anti-abuse legislation also passed. While there are elements of the credit card bill that credit unions are concerned about due to the likelihood of increased compliance costs, CUNA, again with the grassroots support of leagues and credit unions, succeeded in keeping the credit card bill free of interchange fee amendments that would have proven extremely costly for credit unions had their supporters (backed by the merchants) succeeded in attaching them to the bill
          Attempts to legislate judicial mortgage modification in bankruptcy (i.e., cramdowns) ultimately did not happen. As one very senior House leader told CUNA, Congress “had no interest in taking on the credit unions” over this matter. That is a testament to the impact credit unions have had as we have remained engaged in this issue on Capitol Hill.
          These legislative developments, coupled with credit unions’ victory in a key court case involving unrelated business income tax (UBIT), have provided some very good and welcome news for the credit union movement amid these trying times. 

          CULAC Fund-Raising. The League is currently encouraging credit union staffs to participate in Dress Down Days, as a way to raise money for CULAC. This year it is going to be tough to meet our CULAC goal of $5,346.89. Although the goal did not increase, there is a complication that means that we started the year with a -$800, which reflects an accounting necessity related to the coin program. That money will be added to our contributions in 2010, but it means we need to work even harder this year. We had a great effort at the annual meeting and golf tournament, earning $1129 from the golf club raffle ($345), the Chinese auction ($629), and the 50/50 at the dinner dance ($155).

EDUCATION

          Self-Study Programs. Pat Mahaney attended DEXSTA FCU’s Employee Appreciation Dinner on April 17 to present STAR certificates earned in 2008.  Alice Smith presented STAR and MERIT awards to Del-One staff members at the credit union’s annual Meeting on May 12.

          Annual Meeting Education. David Reed, CU Doctor, addressed 75 credit union staff and volunteers on May 1 during the first education session entitled “Vendor Due Diligence” at the League annual meeting. Saturday afternoon included three breakout sessions that were repeated twice: David Reed spoke on “Internal Security”; Ben Rogers, Filene Institute, presented “Catching and Keeping Gen Y: Two Credit Union Routes to Young Adult Members”; and James Caliendo, PWCampbell, presented “How to Plan for a Green, Environmentally Friendly Facility.”
          During the business meeting on Saturday, May 1, League education director Bernadette Hines announced the following education awards earned in 2008:
•         Outstanding achievement to the credit union that earned the most STAR & MERIT certificates – Del-One (Delaware FCU).  Bob Seaburg, board chair, accepted the award.
•         Outstanding achievement to the credit union that earned the most VAP and VLP certificates – DPL FCU.  Bob Oakes, board chair, accepted the award.
•         Excellence in education to the credit union that had the highest seminar participation – New Castle County School Employees FCU. Board chair Ray Christian accepted the award.

League president Patrick Mahaney presents 2008 education awards to the following credit unions (l. to r.): Del-One (Delaware FCU); DPL FCU; and New Castle County School Employees FCU.

April/May 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).