LSCU eSignal Weekly
LSCU eNews Weekly July 5, 2011
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LSCU eNews Weekly
In This Issue
LSCU Headlines
President's Point
Fed issues ruling on debit interchange fees
NCUA corporate prepayment plan moves forward
Statewide Image Campaign fundraising wrapping up
AC&E wrap-up video now available
NCUA announces Corporate Prepayment Plan webinar on July 11
SECUF presents another $25,000 check to Red Cross of Alabama
Governmental Affairs News
News from the Hill: Floor and committee schedules, last week in review
This week in Florida politics: Gov. Scott signs off on Sunrail project, no budge on pension overhaul
Compliance Corner
League InfoSight highlight: Effects of Americans with Disabilities Act on credit unions
Comment Call on NCUA Regulatory Review
Compliance calendar and training
Cooperative Initiatives News
Cheaha Chapter of CUs set to hold charity golf tournament July 25
Education News
Disaster Recovery Conference only one week away
LSCU Supervisory Committee Conference coming soon
Make plans to attend the next SE Regional Directors Conference
Education Calendar
LEVERAGE News
LEVERAGE partners with CITI, GE to bring accelerated remarketing
News from You
Redstone FCU awards annual scholarships
Credit union leader Cryil B. Mann passes away at age 95
EMPLOYMENT
View available credit union jobs
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LSCU Headlines

President's Point

Last week the Federal Reserve issued its final rule on the interchange fee issue. The Fed settled on 21 cents plus 5 basis points (bp) of the value of the transaction to cover fraud losses. Issuers will also be able to increase the fees by 1 cent per transaction to cover fraud prevention costs. (See story below). This final rule, which is not perfect, would not have been possible without the grassroots advocacy efforts of credit unions with both our U.S. Senators and the Fed.

The interchange fee issue has gotten substantial news coverage with credit unions getting a ton of positive press coming off the Tester-Corker amendment vote and the Fed’s final rule issue. Despite not getting the legislative victory we had hoped for, the stature and perception of credit unions as a whole has been raised. Yahoo! recently wrote an article titled “Will Credit Unions replace Banks?” The article points to the many positives credit unions offer members and, with the interchange fees being cut, the pressure is now on many banks, “…the banks are hatching plans to enforce a cap on the amount of transactions that consumers can (make) through their debit cards.”

Earlier this month, Christopher Leonard wrote a column for Banking Strategies Daily on how financial institutions with less than $10 billion in assets will actually gain a competitive advantage over the larger institutions. Leonard argues that while the big banks will look to implement new fees, smaller institutions will see more consumers seek them out. This is obviously what we all hope will happen. CUNA and the leagues will work to ensure the Fed is keeping track of the way merchants handle cards from the institutions with less than $10 billion in assets.

Credit unions are well positioned to gain market share in the wake of the Fed’s final rule on interchange. Banks continue to get bad press on the new fees being levied on their depositors. The Yahoo! article points out the fact that consumers can avoid the fees by heading to a credit union. It ends by stating, “credit unions are better alternatives right now.” Let’s not miss this opportunity to turn lemons into lemonade. [ Return to Top ]

Fed issues ruling on debit interchange fees

On Wednesday June 29, the Federal Reserve approved a 21 cent cap on debit transactions plus an additional cent to help pay for fraud protection and five more basis points (bp) to account for losses due to fraud.

The new rule, which would take effect on Oct. 1, is a change from the proposed rule which would have capped fees at 12 cents and was based on staff recommendations.

The Fed received 11,570 comments and credit unions and banks had unsuccessfully urged Congress to delay implementation until next year. The rule was supposed to take effect in July.

"We are appreciative that the Federal Reserve listened to the real concerns of credit unions and other small issuers with the proposal and attempted to take steps to address those problems within the very limiting confines of the enabling statute," said CUNA President/CEO in a statement on Wednesday. "This is certainly an improvement from what the board proposed, particularly since it includes other costs and some recognition of those due to fraud."

Credit unions were definitely heard in the fight for small issuers and consumers. Cheney added in his statement, "Clearly, credit unions had an impact in this process – and we congratulate them for doing so. We will continue to work with the Fed as it implements this rule and monitor its impact on credit union members, 92 million consumers strong." [ Return to Top ]

NCUA corporate prepayment plan moves forward

The plan adopted today would allow credit unions, if they choose to do so, to prepay some their Corporate Stabilization Fund assessment. The agency has set the target size of the program at $500 million, which will result in a reduction of the 2011 regular assessment from 24.9 basis points (bp) to 18.5 bp.

If less than $500 million is committed, the NCUA will not implement the program. If more than $500 million is committed, prepayments from credit unions will be prorated so that the $500 million target will not be exceeded. The Credit Union National Association (CUNA) urged the agency to allow up to $1 billion in prepaid assessments.

Credit unions may commit a maximum of 48 bp of their total insured shares as of March 31, 2011 to the fund. The agency previously proposed a maximum payment of 36 bp.

NCUA Chairman Debbie Matz during the meeting emphasized that participation in the prepayment plan is voluntary, and said that the agency is neither encouraging nor discouraging credit union participation in the program. "We are offering it as an option," she said.

Agency staff said that credit unions that do elect to participate in the plan would not be publicized. The amount that they have decided to pay into the prepayment fund would also not be publicized. However, that information will be made available on NCUA call reports once they are released later in the year.

The NCUA proposed the prepayment plan at its May open board meeting and accepted public comment on the proposal until June 20. The agency received a total of 184 comments on the proposal, with the majority of credit unions saying that they would participate in the plan.

The NCUA will be sending a letter to credit unions today regarding the program and participating credit unions must provide completed program agreements, which the agency is providing with the letter and on its website, by July 29. [ Return to Top ]

Statewide Image Campaign fundraising wrapping up

The LSCU Statewide Image Campaign, which will debut this fall, is wrapping up fundraising. In order to get media placed in the markets across Alabama and Florida, fundraising has to end in early July. However, if a credit union would like to still be a part of the campaign and the landing website, they can contact LSCU VP, Communications and Marketing Mike Bridges at 866.231.0545 ext. 1022 or Director, Information Services Amy Jowers at ext 1020. 

The Statewide Image Campaign will utilize a TV ad, radio, website, web banners, social media, and PR. All money raised in specific chapters will stay in that chapter's media market. Which pieces each media market will use depends on how much money is raised in that particular market. The hope is to have a rich, six-week campaign, at the least, in each media market. Some media markets that raise more money will have a longer campaign. Plus, for credit unions taking part in the campaign, the landing website will highlight their location when a consumer searches for a credit union by city or zip code. This is a value of participation.  

To see the TV ad, visit the LSCU Video Center. For more information on the campaign, visit the LSCU Statewide Image Campaign website. [ Return to Top ]

AC&E wrap-up video now available

The 2011 Annual Convention & Exposition featured LSCU President/CEO Patrick La Pine, LSCU Chairman Joe McGee, MSNBC's Joe Scarborough, NCUA General Counsel Bob Fenner, CMG COO Bob Trunzo, and NCUF Executive Director Bucky Sebastian. Attendees also had 18 educational breakout sessions.

Click here to visit the LSCU Video page and watch the 2011 AC&E wrap-up video. You can also view some photos from Convention by clicking here. [ Return to Top ]

NCUA announces Corporate Prepayment Plan webinar on July 11

The NCUA has officially announced that it will host a free webinar on its voluntary Corporate Stabilization Fund assessment prepayment plan on July 11 at 2 p.m. ET.

The webinar will be moderated by NCUA Chairman Debbie Matz, and will also feature input from NCUA Deputy Executive Director Larry Fazio, Examination and Insurance Director Melinda Love, Chief Economist John Worth, and staff attorney Lisa Henderson.

The agency in a release said the webinar will give credit union industry insiders and public stakeholders the chance to improve their understanding of the prepayment program.

The NCUA last week unanimously voted to move forward with a plan to allow credit unions, on a voluntary basis, to prepay their Corporate Stabilization Fund assessment. The agency has set the target size of the program at $500 million, which will result in a reduction of the 2011 regular assessment from 24.9 basis points (bp) to 18.5 bp.

The NCUA will not move forward with the plan if less than $500 million is pledged by credit unions.

Matz emphasized that participation in the prepayment plan is voluntary, and said that the agency is neither encouraging nor discouraging credit union participation in the program. The Credit Union National Association has encouraged credit unions to consider the extent to which the program will benefit them and whether they should participate.

Credit unions that wish to take part in the prepayment plan must submit a completed program agreement to the NCUA by July 29. The agency will tally the total amount of credit union commitments on Aug. 9, and, if it moves forward with the plan, will debit the amounts that have been pledged from credit union accounts on Aug. 18.
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SECUF presents another $25,000 check to Red Cross of Alabama


LSCU President/CEO Patrick La Pine presents a $25,000 check to Red Cross of Alabama CEO Billy Baxter on behalf of the Southeastern Credit Union Foundation (SECUF). This is the second donation by the Foundation totaling $50,000 donated to aid in disaster relief for those affected by the April 27, 2011 tornadoes in Alabama.


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Governmental Affairs News
News from the Hill: Floor and committee schedules, last week in review

The Senate floor and committee schedule are relatively light given the fact that the determination to keep the Senate in town this week was made late last week. Still, we expect there will be a lot of action behind the scenes related to the debt ceiling and the budget situation.

The Senate has cancelled its Independence Day Constituent Work Period, meaning that both chambers of Congress will be in session this week.

Floor Schedule

The House, which was previously scheduled to be in session, returns tomorrow (Wednesday) to resume consideration of H.R. 2219, the Department of Defense Appropriations Act for Fiscal Year 2012. After completing consideration of this legislation, the House is expected to begin consideration of H.R. 2354, the Energy and Water Appropriations Act, and H.R. 1309, the Flood Insurance Reform Act.

The Senate convenes today to resume consideration of a motion to proceed to S.J.Res. 20, a joint resolution authorizing the use of force in support of the NATO mission in Libya.

Committee Schedule

The short holiday week and the unexpected presence of the U.S. Senate have produced a relatively light hearing schedule.

On Thursday, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit and Subcommittee on Oversight and Investigations will hold a joint hearing on “Mortgage Servicing:  An Examination of the Role of Federal Regulators in Settlement Negotiations and the Future of Mortgage Servicing Standards.” 

On Friday, the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit will hold a hearing entitled, “Legislative Proposals Regarding Bank Examination Practices.” This hearing will focus on two bills: H.R. 1723, the “Common Sense Economic Recovery Act,” which would permit certain loans that would otherwise be treated as non-accrual loans to be treated as accrual loans; and H.R. 2056, a bill to instruct the FDIC Inspector General to study the impact on insured depository institutions failures.

Review of Last Week’s Activities

Last week, Rod Staatz, president and CEO of SECU of Maryland, testified on behalf of CUNA at a Senate Banking Committee Hearing on housing finance reform. A copy of the written testimony can be found here, and a video archive of the hearing can be found here.

Also, CUNA joined several other trade associations in sending a letter to Senate Majority Leader Harry Reid (D-NV) and Republican Leader Mitch McConnell (R-KY) urging them to allow the Senate to consider H.R. 1249, the America Invents Act. This legislation includes language that CUNA supports related to business method patents. A copy of the joint letter can be found here.

For questions about the floor and committee schedules, or other governmental affairs issues contact LSCU SVP, Governmental Affairs Will McCarty at 800.846.8374, ext. 2137. [ Return to Top ]

This week in Florida politics: Gov. Scott signs off on Sunrail project, no budge on pension overhaul

Governor Signs Off on Controversial Sunrail

Shortly after his election, Gov. Rick Scott turned down more than $2 billion in federal funds that would have been used to bring a high-speed rail system to Florida. Even within his own party, this decision was controversial, sparking a bipartisan lawsuit that was eventually thrown out of court. Scott had also frozen contracts associated with the SunRail project, a 61-mile rail project in Central Florida, but decided last week to move forward with the project. Scott pointed to legislation passed in 2009 that set aside funds for this project as a key difference to that of the high-speed rail, also saying his attorneys advised him he would likely lose in court if he tried to block this project. Not everyone agrees with the Governor’s decision to continue this project. “This decision has completed the governor’s transformation from businessman to political insider,” Sen. Paula Dockery (R-Lakeland), and one of Scott’s earliest supporters, commented.

Pension Overhaul Kept In Tact

A Leon County judge last week ruled that the state can go forward and take money collected from public employees and deposit it into the state’s massive pension plan. A coalition of unions, led by the Florida Education Association, had sued the state to block the mandated three percent salary contribution which began on July 1. Judge Jackie Fulford refused to grant an injunction that would have required the state to set the money aside in a separate account until the law suit was settled. A trial date has been set for Oct. 26.

Public Financing Law Struck Down

U.S. Judge Robert Hinkle ordered a permanent injunction against a provision in state law that was intended to help candidates keep pace with rivals who spend large sums on their campaigns. The decision is a key victory for Gov. Rick Scott, and clears the way for Scott to spend millions on his re-election campaign without having to worry that a potential rival can match his spending with taxpayer money. During the 2010 primary, Scott won a preliminary injunction that said the state could not give GOP opponent Bill McCollum a dollar-for-dollar match of taxpayer money if Scott spent more than $24.9 million on his campaign. The ruling was a blow to McCollum’s campaign and put him at a major disadvantage to Scott, who spent nearly $73 million to win the primary and the Governorship.

The U.S. Supreme Court by a 5-4 majority vote ruled an Arizona law based on the same situation, unconstitutional saying it violates candidates’ First Amendment rights by giving financial help to their opponents if a candidate spends a certain amount of money. Following the Supreme Court’s ruling, Hinkle wasted little time ruling on Scott’s injunction. He said while the Florida and Arizona laws are not identical, it was understandable that Florida would no longer want to enforce their law.

Should you have any questions on any of the legislative issues mentioned above, contact Director, Legislative Affairs Jared Ross at 866.231.0545, ext.1012. [ Return to Top ]

Compliance Corner
League InfoSight highlight: Effects of Americans with Disabilities Act on credit unions

The current edition of the League InfoSight newsletter has an article about the Americans with Disabilities Act, and how it affects credit unions. Title I of the Americans with Disabilities Act (ADA) broadly prohibits employers from discriminating against a qualified individual with a disability because of the disability. Credit unions with 15 or more employees are obligated under Title I to provide non-discriminatory employment opportunities to qualified individuals with disabilities. Title I also requires employers to provide reasonable accommodation for the known limitations of an otherwise qualified individual with a disability. Title I of the ADA is enforced by the Equal Employment Opportunity Commission (EEOC).

Read more about the Americans with Disabilities Act and other important topics at League InfoSight.

For more helpful reminders and tips, view the League InfoSight newsletter by clicking here. It is a password-protected area. Member credit unions that do not have a password, may click here to sign up for one. An active email account and a password are required. To log in 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.

  [ Return to Top ]

Comment Call on NCUA Regulatory Review

The NCUA makes a practice of reviewing all its existing regulations every three years. The NCUA Office of General Counsel maintains a rolling review schedule that identifies one-third of existing regulations for review each year and regularly provides notice to the public of those regulations to be reviewed so the public will have an opportunity to comment. The NCUA, based on its schedule for 2011, is seeking comments on the current list of regulations designated for review.

A further list of regulations for 2011 can be read by clicking here. [ Return to Top ]

Compliance calendar and training

Compliance Calendar

July 21
Regulations Z and M - Increase to transactions covering up to $50k Effective Date

Bureau of Consumer Financial Protection Designated Transfer Date

Potential Regulation CC: Change from $100 to $200 immediate availability

For the complete list of calendar dates and compliance trainings, visit the LSCU Compliance Calendar

*Note - Compliance Calendar requires your League InfoSight login.
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Cooperative Initiatives News
Cheaha Chapter of CUs set to hold charity golf tournament July 25

The Cheaha Chapter of Credit Unions has re-scheduled their golf tournament for Monday, July 25, at Gadsden Country Club in Gadsden, AL. The tournament will have a shotgun start at 8:30 a.m. CDT. Proceeds will benefit Children’s Miracle Network Hospitals. The chapter has received approval for the CO-OP Miracle Match Program, so proceeds will be matched up to $10,000.

Credit unions and vendors are invited to participate. Sponsorship levels are $1,000 for four golfers and hole sponsorship, $500 for two golfers and hole sponsorship, $300 for one golfer and hole sponsorship, and $100 for one golfer.

Download the Cheaha Chapter of Credit Unions Golf Tournament brochure by clicking here.

For more information or to register, contact Lesli Bishop at Family Savings FCU, 888.311.3728, extension 5773. [ Return to Top ]

Education News
Disaster Recovery Conference only one week away

Everyone in Alabama and Florida has been affected by “Mother Nature” in one way or another whether it has been directly or indirectly. The safety of the physical building is important however it is the protection of what is housed internally that must be solid. Is your system backed up? Also, a plan of action for staff must be in place. Are you ready?

Attend this conference to learn how to safeguard your credit union and learn valuable tips on how to create a well-prepared disaster plan of action.

Click here to view/download the conference flyer.

Attendees from last year’s conference said they “were able to identify items missing from my business continuity plan” and the conference “urged me to revisit my disaster contingency plan.”

Speakers for this conference will include:

  • Jeff Garmon, warning coordination meteorologist, NOAA – NWS Weather Forecast Office, Mobile, AL
  • John S. Dosh, Escambia Emergency Management, Pensacola, FL
  • Bill Berg, LSCU VP, Regulatory Affairs
  • Amber Tynan, LSCU Executive Director, Southeastern Credit Union Foundation
  • Representatives from NCUA and CUNA Mutual

Who should attend? Presidents, CEOs, COOs, CFOs, senior operations personnel, and anyone else involved with developing and implementing the disaster preparedness plan of their credit union

Click here to register now.

Thanks to our sponsor:

 

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LSCU Supervisory Committee Conference coming soon

Whether you are a new supervisory committee or board member, or you are a seasoned volunteer, attendance at this event will most definitely enrich your contributions to your credit union. This conference agenda includes the latest information and updates regarding credit union auditing, compliance, and fraud. With a wide variety of speakers and topics, attendees will better their knowledge to help keep your credit union secure and strong. 

Although designed with supervisory committee members and board members in mind, this conference is also a perfect fit for credit union managers and compliance officers.  If you are a CPA, Continuing Education Credits are also applicable.

LSCU Supervisory Committee Conference
Date: July 31 – August 3, 2011
Location:
Grand Hotel Marriott Resort, Golf Club & Spa, Point Clear, AL
Registration: $475/person and $150/guest
Questions:
education@lscu.coop or 866.231.0545 x 2129

Click here for more information and to register.

Sponsored by:

 

  [ Return to Top ]

Make plans to attend the next SE Regional Directors Conference

Be sure to reserve a spot at this year's Southeast Regional Directors Conference, along with many other credit union leadership and executive staff. This event is sure to be informative and entertaining. The speakers and topics include:

  • Bill Cheney, "Credit Unions: Where we have been and where we are going"
  • Kelley Parks, "It's Time for Credit Unions To Make History"
  • David Snider, "A Rendezvous with Austerity: How Financial Necessity is Leading Americans to Adopt Economically and Environmentally Sustainable Life Style - An Instant Pre-Play of the Next 10 Years in America"
  • Ron Parker, "Making Dollars and Sense of Credit Union Financial Information"
  • Shawn McDonald, "Protect Your Credit Union's bottom Line - You Must Start and End with Outstanding Service!"
  • Ken Gronbach, "The Age Curve: Benefiting from the Coming Demographic Storm"

Attendees and guests can also enjoy golf excursions, Country Music Hall of Fame and Museum Tours, and Homes of the Stars tours.

See you on July 17-20, in Nashville, TN.

For more information about the Conference, visit the LSCU Education Calendar. [ Return to Top ]

Education Calendar

Upcoming Events:

Wednesday, July 6
High Yield Lending: Methods to Grow Your Loans & Increase Your Loan Yield
3 – 4:30 pm EST – webinar

Tuesday, July 12
Indirect Automobile Lending: The Good, the Bad & the Ugly
3 – 4:30 pm EST – webinar

Wednesday, July 13
Completing & E-Filing the Currency Transaction Report Form: Line-by-Line
3 – 4:30 pm EST – webinar

Tuesday, July 12 & Wednesday, July 13
LSCU Disaster Recovery Conference
Pensacola, FL

Click here to view complete calendar of events.

  [ Return to Top ]

LEVERAGE News
LEVERAGE partners with CITI, GE to bring accelerated remarketing

The repossession and liquidation of vehicles in a quick and efficient manner means more money recovered. LEVERAGE remarketing program is partnered with CITI and GE to provide you with accelerated repossessions and remarketing performance through strategic lane position, volume discounts on auction fees, skip tracing services, and more.

Through the Remarketing Program, credit unions will benefit from:

  • Faster Sales Cycles – Credit unions that utilize the LEVERAGE remarketing services typically sell vehicles within 30 days of receipt of repossession.
  • Higher Sale Prices – Through marketing, lane position and run times, and professional representation on the day of sale, credit unions experience a significant gain in average sale price.
  • Fee Reduction – All fees are based on the national volume of providers who liquidate in excess of $100,000 annually. Credit unions benefit from reduced fees with regards to detailing, repair, storage and lane fees.
  • Streamlined Processes – Our programs incorporate auction based software which significantly reduces the amount of paperwork typically associated with repossessed vehicles.   Credit unions have access to a system that tracks a repossession from pick-up through the final sale.

For more information, contact a LEVERAGE Business Consultant. [ Return to Top ]

News from You
Redstone FCU awards annual scholarships

The 12 individuals who received the 2011 Redstone Federal Credit Union Scholarships are: Ryan Countess, Florida Southern College; Chadwick Guerin, JF Drake State Technical College; Shalonda Haygood, Calhoun Community College; Christopher Hightower, University of Montevallo; Rebecca Little, University of Alabama in Huntsville; Julia Malueg, Auburn University; Georges Prosper, Oakwood University; Bobby Riley, Alabama A&M University; Kristin Rodarte, Athens State University; Megan Vansant, Mississippi State University.

The Charles L. Ray, Jr. Scholarship was awarded to Mary Beyer, who will be attending The University of Tennessee. The Gerald E. Toland Legacy Scholarship was awarded to James Kyle Buntley, who will be attending Motlow State Community College.

The students were recognized at a dinner held at the Wynn Drive Headquarters Building of Redstone Federal Credit Union

“We award scholarships once a year and applications for 2011 were accepted Dec. 1, 2010 through Mar. 3, 2011,” said Mary Grace Evans, assistant vice president, corporate and community relations at Redstone. “Each applicant must be a member of Redstone Federal Credit Union. They submit their application, transcript, letters of reference, listing of extracurricular and community activities, along with an essay.”


From l to r: Dr. Dorothy W. Huston, Chairperson, RFCU Board of Directors; Bobby Riley; Ryan Countess; James Kyle Buntley; Mary Beyer; Shalonda Haygood; Julia Malueg; Rebecca Little; Megan Vansant; Georges Prosper; Kristen Rodarte; and Joseph H. Newberry, President and CEO, RFCU.

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Credit union leader Cryil B. Mann passes away at age 95

Mr. Cyril B. “Dink” Mann, recognized by the World Council of Credit Unions as the longest-serving board chairman, passed away on June 28 at the age of 95.

Without financial compensation, a corner office, or public recognition, Mr. Mann faithfully and passionately served Listerhill Credit Union’s members for 57 years.

“Looking at his age, you might wonder if Mr. Mann’s position as chairman of the board was more of an honorary position than a position of active leadership,” explained Joyce Bates, vice president for administration at Listerhill Credit Union. “You have probably never met a man as devoted and active as Mr. Mann throughout his life, including his seventies, eighties, and nineties. He was selfless. He put Listerhill first.”

It was Mr. Mann’s vision that set the standard for Listerhill’s community involvement.  He believed that serving members also meant serving the community where they live and work. [ Return to Top ]

EMPLOYMENT
View available credit union jobs

To view the available jobs on the LSCU homepage, visit the LSCU CU Jobs Center. [ Return to Top ]

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