LSCU eSignal Weekly
LSCU eNews Weekly April 5, 2010
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LSCU eNews Weekly
In This Issue
LSCU Headlines
Signal, eSignal publications debut April 5
LSCU debuts a new name for its service corporation
Bellco CU wins major victory in UBIT lawsuit
April is declared National Financial Literacy Month
Entry/nomination deadline for LSCU awards is coming up, May 7
Report on the credit union industry by Callahan & Associates to be given to White House
NCUA activates disaster assistance to aid credit unions affected by storms and flooding
Florida CFO supports member business lending
Tallahassee Democrat's "My View" Column: Free up Credit Unions
Governmental Affairs News
Florida Legislature tackles budget, again
Alabama Legislature update: twists and turns
Compliance Corner
League Infosight features EITC, Reg Z Escrow, and the new $100 note
Compliance calendar and training schedule
Cooperative Initiatives News
AJC statewide meeting & workshops to be held on Friday, April 9
National Youth Savings Challenge this month
Education
Sign up for BSA Training near you
News from You
Community Credit Union in Rockledge, FL raises money for Haitian disaster releif
As banking's image sours, Alabama Credit Union grabs attention
Credit Union Job Postings
Credit union employment opportunities posted online
Calendar
Schedule of events
In This Issue
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LSCU Headlines

Signal, eSignal publications debut April 5

The LSCU's new name for its weekly electronic newsletter, eSignal, debuts Monday April 5. It symbolizes what we aim to achieve at the LSCU: to be the trusted resource for members, providing them with the latest and the best information weekly via eSignal. A compliment to the quarterly magazine Signal, eSignal keeps credit unions up to date on the latest in information and advocacy. Click here for the archive 

When there is breaking news, the LSCU will be on-the-spot with eSignal EXTRA. This new addition to the communication services provided by the League will let credit unions know ASAP when financial news breaks. eSignal EXTRA will also direct readers to the breaking news resources on the LSCU homepage.    

The LSCU new quarterly magazine, Signal, debuts today online. Signal is online for your convenience as well as in its usual print format. Its new layout and content will introduce readers to the services that can be expected from the LSCU in the areas of  Governmental Affairs, Education, Communications, and Cooperative Initiatives. LEVERAGE, the new identity of our combined Alabama and Florida Service Corporations, gives an inside look into its name change and future product and service offerings. There is also a directory in the back that has all of the LSCU and Leverage contact information. Click here to read the online version of Signal. The print version will be in mailboxes this week.  

If you are not signed up for eSignal or to get a print copy of Signal, please sign up online at www.lscu.coop. For trouble viewing Signal or signing up for eSignal, contact LSCU Vice President, Communications Mike Bridges or LSCU Director, Information Services Amy Jowers

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LSCU debuts a new name for its service corporation


The League of Southeastern Credit Unions (LSCU) debuts a new name for its service corporation – LEVERAGE. The new company was born out of the consolidation of the Alabama and Florida Credit Union Leagues’ service corporations. 

Credit unions across the country now have access to performance enhancing services and maximum buying power through LEVERAGE. It equips credit unions with premium services that have delivered cost-effective, performance-enhancing results. The collaborative buying power of the Business Services Division program with Office Depot is saving credit unions about 70 percent on office supplies and credit unions on the Ventelligence program experienced a 25.5-percent savings on commodity purchases. LEVERAGE also provides innovation with its expanded sales and product development teams that will ensure service that is second-to-none in the financial sector. The relationship with Sprint Mobile Services generated $300,000 in non-interest income to credit unions in 2009.

“The name LEVERAGE is a natural fit for the LSCU Service Corporation,” said LSCU President/CEO Patrick La Pine. “Everything we do for our credit unions and our business partners is to create an edge for them. The LEVERAGE brand will be a powerful resource for credit unions to maximize their future growth.”

LEVERAGE has a full suite of services available to credit unions including audit and compliance solu­tions, HR, lending, operations and executive search solutions, in addition to the Sprint Mobile phone services and Office Depot solutions. One of the more innovative programs is the turn-key and remarketing auctions for automobiles. This also includes vehicle valuations and auto-buying discounts.

To see a complete list of services provided by LEVERAGE, check out the Web site under the Business Solutions tab, or go to www.myleverage.com. [ Return to Top ]

Bellco CU wins major victory in UBIT lawsuit

Bellco Credit Union, based in Greenwood, CO, won a substantial victory against the Internal Revenue Service over revenues from products and services that should be exempt from unrelated business income tax (UBIT).   U.S District Court for the District of Colorado ruled April 2 that income derived from credit life and disability insurance sold directly or indirectly as well as income from royalties from accidental death and dismemberment (AD&D) insurance should not be subject to UBIT.

Judge Christine M. Arguello ruled credit insurance is directly related to the credit union’s tax-exempt purpose because it promotes thrift. 

“In the banking and credit context, the concept of thrift is tied to sound financial management,” she wrote. “Credit insurance does just that. It permits a borrower to guard against certain difficult circumstances and to know that, if the unfortunate event of death or a serious disability occurs, the borrower’s family and/or assets would be protected.  For a relatively marginal payment, the borrower buys peace of mind.” 

Judge Arguello also agreed with Bellco that its AD&D income, from a third-party vendor's sale of AD&D insurance to Bellco members, constituted royalties that are exempt from UBIT. While Bellco did perform some work in connection with the AD&D program, the court disagreed with IRS’s claim that the revenue should be taxed and determined the work was sufficiently insubstantial for the income to appropriately be deemed as royalties.

The court's decision supplements its ruling last November in the Bellco case that its commissions from vendor sales of financial products and services such as stocks and annuities to its members was “substantially related” to its tax-exempt purpose and so therefore subject to UBIT. 

The government may appeal the decision. They have 60 days to decide. But, as CUNA’s General Counsel Eric Richard notes, this is the second time in a row the courts have rejected the IRS’s analysis of how UBIT should apply to credit unions, and the combined actions in the Bellco case extended that tax-exempt determination beyond credit life disability and GAP to also include financial products and services and royalty payments on AD&D insurance activities. At some point the IRS is going to have to recognize the inevitable and will have to change its policy based on the court rulings that have now been established. That is an issue the UBIT Steering Committee will be discussing internally. [ Return to Top ]

April is declared National Financial Literacy Month

President Barack Obama

The President of the United States, in declaring April 2010 to be National Financial Literacy Month, wrote, "... we recommit to teaching ourselves and our children about the basics of financial education."

The proclamation lays out some of the causes of the economic crisis, the proposed Consumer Financial Protection Agency, and the importance of personal financial literacy.

To learn more about financial literacy for your credit union, click here. The LSCU has many resources available on the Financial Education page, including a Facebook page and the proclamation from the White House.  

Any credit union that would like to learn more about implementing a financial literacy program, contact LSCU Member Relations Specialist Amber Tynan.  



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Entry/nomination deadline for LSCU awards is coming up, May 7
It's time for credit unions in Alabama and Florida to begin the nomination/submission process for League awards. The LSCU is proud to recognize credit unions, professionals, and volunteers who have made outstanding contributions to the development and growth of the credit union movement in both states through the following awards:

Professional of the Year – Recognizes a credit union professional from Alabama or Florida that deserves recognition for their contributions to advance the credit union movement in either state as well as on the national level.

Volunteer of the Year – Recognizes a credit union volunteer from Alabama or Florida who has selflessly contributed time, effort, and talent to the development of the credit union movement in either state as well as on the national level.

Credit Union of the Year – Recognizes a natural person credit union for its outstanding achievements in eight different categories including financial strength and performance, new and improved member services, financial literacy and community service.

Distinguished Service Award – Recognizes lifelong service to the Alabama or Florida credit union movement reaching beyond the natural person credit union. A nominee’s service record must reflect having produced a positive impact beyond their credit union. Achievement requires contribution(s) which has benefited the movement.

Brothers Keepers – Recognizes efforts by Alabama or Florida credit unions in assisting developing credit unions through various means such as offering support, providing training, donating equipment and other services.

Dora Maxwell Awards – League and CUNA awards that honor the work of credit unions in the community.

Louise Herring Awards – League and CUNA awards that recognize the practical application of credit union philosophy in daily internal operations.

Desjardins Awards – League and CUNA awards that recognize leadership within the credit union movement on behalf of youth financial literacy.

The awards will be presented at the LSCU Annual Convention & Exposition in June in Orlando. More information about each award, submission information and the awards brochure is located here. Deadline for entries is May 7, 2010.
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Report on the credit union industry by Callahan & Associates to be given to White House

A report on the credit union's industry’s performance in 2009 will be sent to the Obama administration by the consulting company Callahan & Associates. Its goal is to raise the visibility of credit unions’ accomplishments in serving their members in particular and the economy in general. 

The report will include state-by-state and consolidated financial information on industry performance in 2009. It  will focus on facts such as that in 2009 credit unions posted their highest loan origination volume ever, $271.9 billion, a seven-percent increase over 2008. The industry made 38,000 loan modifications last year.

“Credit unions continued to lend throughout the financial crisis. With all the negative news about the financial industry, we believe it’s time Washington learns about credit unions’ excellent – incredible really – results,” said Callahan President/CEO Chip Filson.

The firm is seeking the signatures of credit union leaders to include on the letter accompanying the report. For more information or to sign on to the letter, go to www.CreditUnions.com/letter. [ Return to Top ]

NCUA activates disaster assistance to aid credit unions affected by storms and flooding

The National Credit Union Administration (NCUA) has activated its disaster relief policy to assist credit unions and their members affected by the severe storms and flooding in the nation’s northeast where a state of emergency exists in Delaware, New Hampshire, Massachusetts, Rhode Island, and West Virginia.

The NCUA offers assistance to federally insured credit unions that suffer from a weather-related disaster. The NCUA works with state leagues to make credit unions aware of their available disaster relief assistance.

To read more, click here. [ Return to Top ]

Florida CFO supports member business lending

Florida CFO Alex Sink

Florida CFO Alex Sink, a leading Florida Gubernatorial candidate, recently sent a letter to the NCUA placing her support behind increasing small business lending for credit unions. Sink wrote Chairman Debbie Matz personally telling her about Florida small businesses she hears from on a regular basis that can’t get credit.

The letter urges Chairman Matz to continue to push for increasing member business lending (MBL) legislation pointing out that 90 percent of all commercial activity in the state comes from small businesses. Sink writes that “Credit unions are an important partner in giving small businesses the tools they need to grow jobs and grow our economy.”

LSCU President/CEO Patrick La Pine sees support from Sink as timely for Florida credit unions.

“In the past month, six members of Florida’s Congressional delegation have shown their support for MBL legislation by agreeing to co-sponsor HR 3380,” said La Pine. “To have CFO Sink write a letter to the NCUA voicing the support of the state’s elected Chief Financial Officer shows our credit unions that state leaders understand that credit unions are doing their part to lend money, help their members and that they can do more. I urge our Alabama and Florida credit unions to continue to reach out to their federal legislators and tell their stories.”

Sink’s letter wraps up by putting her support behind the NCUA and its “continued emphasis on responsible, fiscally prudent lending practices.” Click here to read Sink’s letter. This is a password protected area. There is an action alert call right now for credit unions to send letters to members of the Florida delegation. All of the necessary information can be found on the LSCU Web site by clicking here.

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Tallahassee Democrat's "My View" Column: Free up Credit Unions

Florida Commerce CU CEO Cecilia Homison

Florida Commerce Credit Union CEO Cecilia Homison was featured in Friday's Tallahassee Democrat. Homison wrote a "My View" column about the benefits of increased credit union member business lending. The column points out a new program President Obama is looking to add by giving $30 billion of repaid TARP funds to community banks so they will lend to small businesses. Homison counters that Congress can add $10 billion by simply adjusting the credit union member business lending cap from 12.25 percent to 25 percent. She writes that it would not cost taxpayers a dime and also add 108,000 jobs.

The most telling part of the column is this point Homison made; she writes that if the cap were lifted, "...banks would still control 90 percent of the commercial loan market."

Read the entire column by visiting the LSCU Press Room.


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Governmental Affairs News
Florida Legislature tackles budget, again

Florida legislators took time last week to spend time with their constituents and also celebrate the Easter holiday with their families.   

The House and Senate return this week to consider multiple issues of magnitude and to begin budget negotiations between the chambers. The Senate’s budget is packed with nearly $3 billion in additional spending over what the House proposes. The main differences being the Senate’s inclusion of funds from the Seminole gaming compact and additional Medicaid funds the federal government is sending down. The House leadership, being more conservative, has chosen not to include the funds because they don’t believe the total dollars to be received will match assessments made by the budget staffers.

While the budget process will take the bulk of the time this week, the Legislature will also deal with bills that remove teacher protections, provide merit pay for teachers, bans on texting while driving, and elimination of a provision that prevents state funds from being given to religious institutions. Also on tap is a sales tax holiday that retailers have clamored for every year.

If you have any questions about the Florida Legislature or any credit-union specific bills, contact LSCU Vice President, Legislative Affairs Mark Landreth at 800.342.1266 ext. 1012.  [ Return to Top ]

Alabama Legislature update: twists and turns

This past week the Alabama Legislature was full of twists and turns as the Senate resurrected the Bingo bill and did manage to pass it by a vote of 21-13. This news was quickly overshadowed by the announcement of a public corruption probe regarding the bill, with a number of members of the Legislature and some lobbyists being questioned by the FBI. Democrats are claiming its a politically motivated investigation, intended to chill consideration of the bill by the House, while Republicans counter that its a Federal, not a state, led investigation. Emotions are running high in Montgomery and what this does to the rest of the session, which has six legislative days left, remains to be seen.

Tuesday the $5.49 billion Education Fund budget passed the House and the $1.6 billion General Fund budget is expected to be considered tomorrow. In the Senate, their version of the General Fund budget has been approved as submitted by committee, with the understanding that there would be significant modifications to it on the Senate floor.   

As of Monday, neither the House nor the Senate Banking Committees are scheduled to meet, and the only significant measure now scheduled for committee action is the Senate Finance and Taxation Education Committee’s consideration of the House-passed Education Budget.

The Alabama Democratic and Republican parties closed their qualifying for the 2010 election cycle at 5 p.m. Friday. The League has been meeting with candidates for some time and is reviewing the list of all races as it plans further involvement. A few races of note that contained some surprises were the decision by the Alabama Republican Executive Committee to deny State Senator Harri Anne Smith the ability to run as a Republican. Senator Smith, a banker from Slocumb, made waves last year when she endorsed Democrat Bobby Bright for Congress after she was defeated in the primary by State Representative Jay Love. Also, Senator Jim Preuitt, a long serving Senate Democrat, switched parties to run as a Republican. He had served as the powerful Chairman of the Senate Rules Committee in the previous quadrennium, but became part of a group of conservative Democrats who caucused with the Democrats. There are going to be some of tough races, and the League will be involved in a number of them.

For more information on the Alabama Legislature, contact LSCU Vice President, Legislative Affairs/Staff Counsel Will McCarty at 205.991.9710 ext. 2137.
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Compliance Corner
League Infosight features EITC, Reg Z Escrow, and the new $100 note

The April 2 edition of the League InfoSight newsletter has quite a bit of information including provisions of Reg Z, Earned Income Tax Credit (EITC), and the new $100 note. The U.S. Treasury will unveil the new look of the $100 bill April 21, during a ceremony in Treasury's Cash Room. It is the first step in a global multi-government agency public education program implemented by the Department of the Treasury, the Federal Reserve Board, and the U.S. Secret Service, to educate those who use the $100 note about its changes before it begins circulating.

League InfoSight also features two articles on provisions of Reg Z. The first looks at ARM plans and when credit unions can change the terms. The second covers Reg Z escrow provisions. Each article answers pertinent questions on these topics. 

View the entire newsletter by clicking here. It is a password protected area. Member credit unions that do not have a password, click here to sign up for one. An active email account and a password are required. To login to InfoSight, enter your email and password in the InfoSight login block (see graphic below) located in the upper right of any of the LSCU web pages.


InfoSight login block

For questions or more information on League InfoSight, contact LSCU Vice President, Regulatory Affairs Bill Berg.  [ Return to Top ]

Compliance calendar and training schedule

Calendar

April 15
NCUA Operating Fee/ NCUSIF Capitalization Deposit Update Due

April 20
5300 Call Report Due to NCUA

April 30
IRS Form 941 - Employer’s Quarterly Federal Tax Return - Deposit Due to IRS

May 17
IRS Forms 990 & 990-T (state-chartered credit unions) Due

Training

April 24–25
CUNA Compliance Fundamentals Seminar - Conference

April 25–30
CUNA Regulatory Compliance School: Introduction - Conference

April 25–29
CUNA Regulatory Compliance School: Update - Conference

May 5 & 12
Consumer Lending Regulations - Webinar
2:00–4:00 p.m. CT [ Return to Top ]

Cooperative Initiatives News
AJC statewide meeting & workshops to be held on Friday, April 9

With the changing dynamics of the economy, students need to learn valuable financial literacy skills to help them succeed, not only today, but throughout their lifetime.

To assist the LSCU member credit unions and partners in meeting this challenge, the Alabama Jump$tart Coalition will hold the 2010 statewide members meeting Friday, April 9th from 9 am - 2:30 pm at the Federal Reserve Bank in Birmingham, Alabama.  

This FREE event will bring together Alabama Jump$tart members, partners, and friends who share a vision to increase financial literacy for students in kindergarten through college across Alabama. To register for the statewide event, please click the link below: http://www.frbatlanta.org/forms/register_100409_brm.cfm.

Please contact Julie Kornegay or call 205.968.6728 if you have trouble registering or the LSCU Director, Member Relations Adena Whitman. [ Return to Top ]

National Youth Savings Challenge this month

The National Youth Saving Challenge is taking place now through the entire month of April. It is held in conjunction with National Credit Union Youth Week, sponsored by the Credit Union National Association. Sign up now to join hundreds of other credit unions who teach youth the benefits of saving. Last year nearly 140,000 young members deposited $26.5 million into their saving accounts during this national event—with 10,006 of these new accounts.

**April is National Youth Savings Month; National Youth Savings Week is April 18-24, 2010**

The National Youth Saving Challenge™ is a great opportunity to get youth to open new accounts and deposit their money at your credit union. Encourage them to sign up and help us beat last year's goal of 139,000 youth depositing more than $26 million. Sign your credit union up for the Saving Challenge today!

Participation in the free Saving Challenge is your opportunity to build a strong relationship with young members in your community—and their families—by reinforcing the benefits of credit union membership. Help youth start a savings habit while creating member loyalty. You'll also get the chance to win $100 for one of your young members. 

Click here to order promotional materials for this event. For more information about signing your credit union up or information about this event, contact LSCU Member Relations Specialist Amber Tynan.
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Education
Sign up for BSA Training near you

The LSCU Education Department has a number of excellent opportunities for credit unions to learn more about the Bank Secrecy Act (BSA) and the skills needed to stay in compliance.  What's unique about this training is that it's geared toward frontline staff, as well as managers and compliance officers. 

There is still time to register for the April 6 session in Mobile.  Click here to register. The Mobile session will be held at the Blue Flame Auditorium.  

The courses are half day with the BSA Essentials class in the morning and the BSA Advanced class in the afternoon.  Each course will run just about two hours. Ashley Mobley, assistant vice president, CU-ACE with the LSCU, will provide the training for both courses. Ashley has worked with the League for five years and regularly trains credit union staff on BSA. She is a tremendous resource for credit unions. 

The courses will be held over the next seven months. Here are the dates:

  • Mobile, AL                 April 6, 2010
  • Birmingham, AL       May 18, 2010
  • Tuscaloosa, AL        July 20, 2010
  • Muscle Shoals, AL   October 19, 2010

The BSA Essentials class will cover topics such as the BSA Program Oversight, Creation and Maintenance, Risk Assessment, Review of Currency Transaction Reports, and Currency Transaction Report Exemptions.

The BSA Advanced class will also incorporate a Suspicious Activity Report workshop along with topics such as the Bank Secrecy Act Program Oversight, Creation and Maintenance, Risk Assessment, Review of Currency Transaction Reports (Common Error Review), Currency Transaction Report Exemptions, Filing Requirements, Technology, and the Bank Secrecy Act.

Click here to see the full Education Calender.   [ Return to Top ]

News from You
Community Credit Union in Rockledge, FL raises money for Haitian disaster releif

Community Credit Union in Rockledge, FL donated $1033.77 to WOCCU's Worldwide Foundation for Credit Unions through the League of Southeastern Credit Unions. The funds, raised through candy sales, will be used for Haitian disaster relief. [ Return to Top ]

As banking's image sours, Alabama Credit Union grabs attention

In a strong bid for new members, Alabama Credit Union has just launched an ad campaign with the theme, “You Are Alabama. We Are Your Credit Union.” The idea is to get the message out that Alabamians don’t have to stay with banks because they have an excellent alternative.

Credit unions offer the same consumer financial products as banks, but profits are returned back to members in the form of lower loan rates and higher savings yields. Members save significant money because credit union's non-profit status enables them to deliver lower loan rates. Credit unions also excel in personal service, and score higher than banks in customer satisfaction. And members get all sorts of perks, starting with free checking, extended hours, and online banking.

“Credit unions have been standing quietly in the shadows of the banks for decades,” says Alabama Credit Union president Steve Swofford. “Many people don’t understand what a credit union is. And most don’t know how easy it is to join one. But as banks continue to lose the peoples’ trust, credit unions have a golden opportunity to make ourselves known.” 
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Credit Union Job Postings
Credit union employment opportunities posted online

Credit union employment opportunities posted online.Click here to view credit union-specific job opportunities in Alabama and Florida. [ Return to Top ]

Calendar
Schedule of events

Events for April:

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