February 10, 2014
Monday Edition
Simulator helps CUs gauge the complete impact of the proposal

CUNA developed a simulator that can help credit unions affected by the proposed risk-based capital rule evaluate how changing their balance sheets might play into their risk-based capital ratios under the proposal.The simulator is posted to CUNA's website.

CUNA's tool differs from the NCUA calculator in two aspects: It lets credit unions consider changes to their balance sheets, and it is only open for use by CUNA-affiliated credit unions (the NCUA calculator is open for anyone's use). CUNA's tool calculates a revised or simulated risk-based capital ratio using changes in various asset holdings, entered by a credit union.  

Specifically, the simulator allows credit unions to: Determine how a variety of changes in asset composition would change the risk-based capital ratio; analyze the types of changes in asset composition that would be necessary to raise the risk-based capital ratio to an acceptable level; study the implications of future planned changes in balance sheet composition, and; become more informed about the workings of the proposed rule, so as to make well-founded comments to NCUA on the proposal.

CUNA believes that the more credit unions learn and understand about this proposal the better prepared credit unions are to develop comments to NCUA about the proposal. This is a critical proposal and as many credit unions as possible should weigh in with their assessments and concerns.

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President's point

Two weeks ago when the state of Alabama and the Florida panhandle were hit hard by snow and ice, a trade publication reporter asked if credit unions were using shared branching as a way to get the word to members that they can still access their accounts. This recent weather event is just another example of how shared branching places an important role for credit unions.

The first quarter is a good reminder to what kind of business sense it makes for credit unions to take part in shared branching. This quarter, the Florida Credit Union Shared Services (FCUSS) and the Credit Union Service Center (CUSC) of Alabama will send rebate checks to member credit unions that are part of shared branching and dividend checks to shareholder credit unions. In Florida, it will be more than $720,000 this year, while Alabama will give back more than $100,000. This number in Alabama is somewhat deceiving. Last year the CUSC board of directors decided to lower its fee structure for participating credit unions by keeping more income at the point of transaction.

As your League president, I am fortunate enough to serve on the board of director of both FCUSS and CUSC of Alabama. This gives the LSCU great insight into the continued importance of shared branching and how the LSCU and the two networks can work together for the betterment of our member credit unions.

As technology evolves, I’ve heard the argument against shared branching. Mike Yatross, CEO of FCUSS, tells a good analogy. In the 90s as debit cards became the norm, credit unions said that checks would go away completely. Looking back today, there has only been about a five-percent dip in the amount of checks produced. Mike says that today’s generation still likes going to a branch to do business. That’s why shared branching still makes sense. Plus, FCUSS and CUSC of Alabama are looking to the future of mobile technology to reach the younger generation.

CUSC of Alabama opened 25 new outlets in 2013, while FCUSS also saw growth. More credit unions are seeing the strategic importance of shared branching. One thing you may not have thought about when opening a new branch is that shared branching income can help recoup some of those costs while the credit union builds membership. You not only open one branch, but you open hundreds to the members in close proximity to that branch. Shared branching is also a less expensive way to grow your geographical footprint.

Since the Great Recession, credit unions have worked hard to differentiate themselves from big banks. Shared branching is a perfect way to show a potential member that you have more than 5,000 branches across the country. Big banks can’t refute that. It also defeats their argument of convenience. I hope you will consider shared branching in 2014. As you can see, it is worth if from a financial standpoint, a marketing standpoint, and it differentiates you from your competition. 

Where's Patrick: I have one of those weeks where I will be crisscrossing the state of Florida meeting with CUs and attending chapter events. I’m attending the Broward Chapter Annual meeting on Tuesday and speaking at the Southernmost Chapter Annual meeting on Wednesday, as well as the Northwest Florida Chapter Annual meeting on Thursday. To see my schedule for the next two weeks, visit the LSCU Information for Credit Unions webpage.

Visit the LSCU YouTube page for the President's Quarterly video.

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Marcus Luttrell keynote at CUNA's ACUC

CUNA has announced that decorated Navy SEAL Marcus Luttrell will be a keynote speaker at CUNA’s 2014 America’s Credit Union Conference, June 29 – July 3 in San Francisco. Luttrell is the author of the best-selling novel "Lone Survivor," now a major motion picture starring Mark Wahlberg.

“It is with great pleasure that we welcome Marcus Luttrell to tell his heroic story,” said Jill Tomalin, CUNA executive vice president and COO. “His conference-closing keynote presentation on courage, sacrifice, and community is sure to connect with credit union values, giving us a patriotic sendoff just in time for Independence Day.”

For more information about speakers and sessions at America’s Credit Union Conference and to register, click here.

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Inter-Credit Union Brokered Deposits information from LEVERAGE

Recently the LEVERAGE team worked with Vining Sparks to bring credit unions additional information on Inter-Credit Union Brokered Deposits. Click here to read more.

LEVERAGE strives to bring you partners and solutions that help your credit union improve performance. Additionally, LEVERAGE focuses on solutions that allow you to diversify funding sources and enhance your liquidity. If you have any questions, contact a LEVERAGE Business Development Consultant

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In This Issue
Monday Edition
Simulator helps CUs gauge the complete impact of the proposal
President's point
Marcus Luttrell keynote at CUNA's ACUC
Inter-Credit Union Brokered Deposits information from LEVERAGE
LSCU & Affiliates Media


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