March 24, 2014
Monday Edition
Appeals court overturns merchant challenge to Fed interchange rule

U.S. Court of Appeals for the District of Columbia Circuit Judges David Tatel, Harry Edwards, and Stephen Williams ruled Friday to overturn a lower court that supported merchants' arguments in the ongoing debit interchange fee cap case known as NACS, et al. v. Board of Governors of the Federal Reserve System.

In this case, a merchants' coalition has challenged the Fed's implementation of a Dodd-Frank Act-imposed debit interchange cap as too high. CUNA and its partner members of The Clearing House coalition maintain that the cap, in fact, is too restrictive.

"The district court granted summary judgment to the merchants, concluding that the rules violate the statute's plain language. We disagree," the circuit  court judges penned in their opinion that was just released. "Applying traditional tools of statutory interpretation, we hold that the (Federal Reserve) Board's rules generally rest on reasonable constructions of the statute, though we remand one minor issue—the Board's treatment of so-called transactions-monitoring costs—to the Board for further explanation."

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President's point

When CUNA President/CEO Bill Cheney announced he was leaving this June, it set off many conversations and questions across the country. Who will replace him? What is the future of the CUNA-league system? First, Bill has done a commendable job leading our advocacy efforts in Washington, D.C. and being the face of our national trade association, as well as interacting with the credit union movement. Each October for the past three years, Bill has taken time out of his busy schedule to travel to Alabama and/or Florida for a week to hit the road with me visiting chapters and individual credit unions. I often told him that he was burning the candle at both ends. No one can question his work ethic or commitment to advancing the movement. For the last four years we’ve gotten our money’s worth out of Bill Cheney and we all owe him a big THANK YOU.

Some of you might be wondering if I might be interested in the CUNA CEO job. I have been surprised by the number of contacts I’ve received, both within our two states and nationally, urging me to throw my hat in the ring. I would be lying if I said the CUNA CEO job was not on my bucket list. However, everything in life is about timing and as I write this column, I realize I have my “dream job.” I have a great board that supports me, but also challenges me to do better. I have a supportive family that I don’t spend enough time with already, so the thought of spending less time with them, especially my 10-year-old daughter, is not very appealing at this point in my life. We’ve built a great staff and culture at the LSCU & Affiliates and I feel we still have much we can achieve working together with our credit union community. I know you never should say never; but you’re probably stuck with me for the time being.

The effectiveness of the current CUNA-league model has been the point of many discussions, as well. With more credit unions merging every year, we all know the current system structure is not sustainable for the long run. There simply won’t be enough resources to meet the growing needs of credit unions. I am a strong believer in collaboration and looking for ways to eliminate redundancies and waste in the CUNA-league system. Should there be a decoupling of the CUNA-league model? I don’t know, but the LSCU & Affiliates is working hard to ensure that we have the products and services, as well as the value proposition, that make us self-sufficient as a trade association.

The theory behind the CUNA-league model is having both entities working cooperatively to provide excellent federal and state advocacy, as well as products and services tailored to the needs of credit unions. Unfortunately, not everyone is holding up their end of the bargain. As a CUNA-league system, we are only as strong as our weakest link, and we need to fix this problem, as well as hold each other accountable – CUNA, leagues and credit unions. The good news is the system can be fixed, if we’re all flexible and honest with ourselves. We need to be willing to make sacrifices that are in the best interests of the movement and credit unions.  

CUNA and AACUL have been taking the lead at looking at the model and how it can be modernized to meet the current and future needs of credit unions, while maintaining a strong advocacy presence at both the state and federal level. In my opinion, this needs to continue in earnest with or without a new CUNA CEO in place. However, it needs to be an open and inclusive process that involves CUNA, leagues, and credit unions. This is the only way to get buy-in with the end product.  

As we move forward with this discussion two things are certain, we need credit unions to provide input and we all have to be open to change. When credit unions get frustrated with CUNA or their league, disaffiliating only weakens the entire movement. Credit unions should have a choice, but working to fix the problem should come first. If CUNA and/or their league are unresponsive, then shame on them if a credit union then chooses to disaffiliate. History has shown that our strength is in our numbers and our willingness to work together. It is the foundation of our movement and success to date. The banks would love to see the movement dissolve into smaller factions.

There will be some important decisions to be made moving forward for the movement, and as trade association leaders, we all have to be willing to do what is in the best interest of credit unions if we want to have a sustainable model for the next 100 years. Send me an email if you have any feedback to this column.

Where’s Patrick: The Florida Credit Union Association State GAC is this week in Tallahassee. To see my tentative schedule for the next two weeks, click here.

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State financial regulators warn Floridians about Bitcoin

The Florida Office of Financial Regulation issued a consumer alert this week after billions of dollars were recently stolen from a bitcoin website.

State financial regulators warned Floridians that unregulated and uninsured digital payment systems, such as mobile banking and bitcoin, come with risks.

Drew Breakspear, the commissioner of the Florida Office of Financial Regulation, has been looking into these new payment models for several months now.

He said until standards are put in place, events like the recent hacking of the bitcoin website Mt. Gox are going to happen and consumers will not be protected.

“I think Bitcoin and virtual currencies are going to be part of the financial markets,” he said. “We are not saying to people in Florida, ‘don’t use a bitcoin.’ We are saying, ‘if you use a bitcoin, understand what it implies.’ It does not have the same structure in place. And those were caught in Mt. Gox are not like the Target customers who are getting their money back. They’re not. It’s gone."

Right now, very few companies in Florida accept bitcoin as payment. However, Commissioner Breakspear said his office has made anticipating risks in Florida’s financial markets a top priority.

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Download the FCUA State GAC Mobile App and stay connected

The 2014 FCUA State GAC Mobile App is an easy way for both attendees and non attendees to stay connected during the State GAC.

The app provides quick access to the agenda and the speakers. It is connected to GA's Twitter and Facebook so you can follow the action via social media AND tweet and post from your own account.

If you are reading this email on your smartphone, click here to download the app. If you are reading this on your computer, open the email up on your smartphone. It takes just a few minutes. You will be asked to sign in and then you are ready to go.

Not attending the GAC? Download the app and follow along with what is happening during the FCUA State GAC. Hopefully, next year, you can join the League in person.

If you have any trouble downloading the app, contact LSCU VP of Communications Mike Bridges at 866.231.0545 ext. 1022.

  • Apple users: Make sure your operating system is up-to-date. Check by going into the settings and clicking on software.
  • Android users: Make sure your device is set to allow installation of non-market apps. Go to your phone's system settings, then security, then unknown sources and choose to "allow installation of non-market apps." Also, make sure your operating system is 2.0 or higher.
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First quarter Director's Resource now available

Each quarter the League produces a newsletter geared toward credit union directors. The LSCU Director's Resource has information about upcoming events specifically for directors, stories that will give them a greater understanding of what the League and CUNA are doing for credit unions, as well as stories that will enrich their job as a director.


Click here to view the latest edition of Director's Resource.

Highlights of the third quarter issue include:

  •     What CEOs genuinely need from their boards
  •     The latest on the Alabama Credit Union Act Update
  •     Tax reform status update
  •     LSCU Awards nominations and more.

If you would like this and upcoming issues of Director's Resource emailed to you directly, sign up by sending an email request.

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In This Issue
Monday Edition
Appeals court overturns merchant challenge to Fed interchange rule
President's point
State financial regulators warn Floridians about Bitcoin
Download the FCUA State GAC Mobile App and stay connected
First quarter Director's Resource now available
LSCU & Affiliates Media

Bobby Bowden Keynotes SCUCE
Former Florida State football coach Bobby Bowden will be the keynote speaker at the Southeast Credit Union Conference and Expo in Orlando in June. Coach Bowden will talk to credit unions about leadership, growing a team, and learning.


CUNA Risk Based Capital Video

CUNA produced a video to explain the NCUA's proposed rule. Plus, credit unions talk about what the proposal means to them. 

Upcoming Event Deadlines

TODAY Last Day to Register for FCUA State GAC - Tallahassee, FL

April 7 Last Day to Register for Spring Regulatory Compliance Update - Tallahassee, FL
April 8 Last Day for Early Bird Rate for OFAC & Bank Secrecy Act School – Birmingham, AL
April 9 Last Day to Register for Spring Regulatory Compliance Update - Birmingham, AL

Extended to April 22 Last Day for Early Bird Rate – Disaster Recovery Conference – Mobile, AL

Extended to April 24 Last Day for Early Bird Rate – Disaster Recovery Conference – Jacksonville, FL

Upcoming League Events
March 25-26 2014 FCUA State GAC
March 25 Flood Compliance -FEMA Mapping Changes
March 25 Reg Compliance-BSA for Lenders
March 27 Trust Compliance in Accounts & Lending
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