Life Is A Highway ... July 13, 2010

Board Passes Resolution Urging NCUA To Minimize Future Assessments

During its recent meeting, the Pennsylvania Credit Union Association’s Board of Directors passed a resolution urging NCUA to minimize future assessments on credit unions while maintaining a safe and sound reserve balance.

Board Chairman Ray Brunner expressed the need to spread out the assessments over the maximum period of time allowed by law “so that we can catch our breath.” The Association Board recognizes that NCUA has discretion regarding the operating level of the National Credit Union Share Insurance Fund (NCUSIF). It works to the benefit of all credit unions if NCUA utilizes that discretion.

“In this challenging economy, Pennsylvania’s credit unions feel strongly that NCUA should use its discretion to minimize the negative impact of its assessments on individual credit unions,” said Brunner.

In other action, the Board decided to accept the recommendation of the Board Governance Task Force, for a new governance process that will be established to take effect in 2012.

More information on this initiative will be sent to all member credit unions in the future. 

Bernanke: Access To Credit For Small Businesses

Speaking to a group of small business owners, banking supervisors, and government officials in Washington on Monday, Federal Reserve Bank Chairman Ben Bernanke said, “Making credit accessible to sound small businesses is crucial to our economic recovery and so should be front and center among our current policy challenges.”

“Small businesses are central to creating jobs in our economy; they employ roughly one-half of all Americans and account for about 60% of gross job creation. Newer small businesses, those less than two years old, are especially important: Over the past 20 years, these start-up enterprises accounted for roughly one-quarter of gross job creation even though they employed less than 10% of the workforce,” said Bernanke.

He explained, “The challenge ahead for lenders will be to determine how to assess the credit quality of businesses in an uncertain and difficult economic environment. It is in lenders' interest, after all, to lend to creditworthy borrowers; ultimately, that's how they earn their profits. Regulators, for their part, need to continue to work with lenders to help them do all that they prudently can to meet the needs of creditworthy small businesses.”

Obtaining Member Opt-ins Can Be Quick & Easy

With the final Regulation E deadlines just around the corner, do you have the tools you need to increase member opt-ins to your overdraft program?

Credit unions have until August 15 to receive opt-in confirmation from existing members (for new members the deadline passed on July 1), or they will be prohibited from charging fees for overdrafts on ATM and one-time debit card transactions. Even if you don’t currently offer a formal program, you will be affected by the new restrictions on Force Post or Pre-Authorized debit transactions.

Remember, when explaining your program to your members, opting-in is a simple process that can be accomplished whenever they are in the lobby; over the phone; by mail; or electronically.

John M. Floyd & Associates (JMFA) can be a valuable resource for dealing with Reg E requirements. With more than 30 years of overdraft experience, JMFA provides you with a written 100% compliance guarantee for all overdraft regulations and the expertise to ensure your program provides a valuable service for your members.

For more information, contact your Association Account Executive or Ken Kuzma, JMFA regional director, at 877-389-7327.  

Wells Fargo Eliminates Free Checking, ATM Envelopes

Wells Fargo & Co., the U.S. bank with the largest branch network, eliminated free checking accounts for new customers as firms prepare for stricter consumer protection measures. New basic checking accounts carry a $5 monthly fee as of July 1. Wells Fargo also established minimum deposit requirements for waiving the fee.

Wells Fargo has 6,600 retail branches and 2,200 mortgage offices, the most of any U.S. bank. The new rules won’t apply to Wachovia Corp. branch offices until the branches are converted to Wells Fargo. Wells Fargo bought Wachovia for $12.7 billion in 2008 and has said the merger will be finished by next year.

As a precursor to being rebranded as Wells Fargo & Co. next spring, all Philadelphia-area Wachovia Bank ATMs will be converted to modern envelope-free machines this fall. The bank already swapped out 100 of the oldest southeastern Pennsylvania ATMs in June with the rest being converted in September and October, and South Jersey recently completing conversion of all of its ATMs to envelope-free.

Once the Wachovia branches are rebranded into Wells Fargo next year, customers will have the ability to have an ATM receipt e-mailed to an online banking mailbox or e-mail address.

PNC Bank said it has offered envelope-free deposits since 1992 and check images on ATM receipts since 2006. Citizens Bank and Sovereign Bank do not yet have envelope-free ATMs.

Microsoft To Stop XP SP2 Updates This Week

Microsoft this week will stop issuing security fixes for computers running the Windows XP operating system updated with Service Pack 2.

The switch-off will result in hundreds of millions of PCs worldwide, including tens of millions in the U.S., instantly becoming riper targets for hackers.

So-called XP SP2 desktops and laptops are still widely used in corporate networks. A service pack is a collection of feature upgrades and security fixes delivered in a single download. SP3 was released in April 2008, with a recommendation that all XP computers be updated, but thousands of companies have failed to do so. A recent survey showed that eight out of 10 organizations (financial, health care, manufacturing, and education) continue to use XP SP2 computers.

Companies can continue to get security updates for XP computers through April 2014 by upgrading to SP3. It's free. Or they can replace old XP units with new Windows 7 PCs, which Microsoft fully supports.
USAToday Article

Education & Training

Education & Training

Social Media Nightmares & How to Protect Your Credit Union

Webinar – July 20, 1:30 p.m.
Only $129

Online social media is changing the way people communicate. It's also blurring the line between work and play as more employees log on to networking sites like Facebook and Twitter. Social media can play an important part in your marketing strategy to reach your members. However, it is crucial that your credit union be aware of the potential hazards and develop clear policies to handle these issues.

Rory Rowland will guide you through a five-step social media policy for employees. With registration, you will also receive a free social media white paper reinforcing the important steps to follow in protecting your credit union’s reputation, members and employees.

For more information or to register, click here. Register by July 15.

Chapter News

Chapter News

The Pittsburgh Chapter of Credit Unions will hold its 9th Annual Golf Outing on Monday, July 26, at the Westwood Golf Club. Space is still available for golfers and sponsors. The four-man scramble begins at 9:00 a.m. Proceeds benefit the Association’s PAC. To register or if you have questions, please contact Ron Celaschi, 412-269-3003; e-mail: rcelaschi@clearviewfcu.org.

Newsmakers

Cross Valley FCU employees Colleen Phillips and Jill Houseknecht recently taught a 10-week financial literacy course for the 8th grade students at St. Nicholas-St. Mary’s School, Wilkes-Barre. “Cross Valley FCU strongly believes in the value of financial literacy, and is dedicated to educating the students in the community about the importance of saving as young adults, and instilling in them strong money management skills,” stated Colleen Phillips, VP of Marketing. Topics discussed in the class included SMART goals, needs vs. wants, pay yourself forward method, good credit vs. bad credit, how to write a check and keep a ledger, identity theft, plus many other significant financial lessons. Cross Valley also donated $150 to the school to be used as a scholarship for one deserving eighth grade student.

riverset credit union is sponsoring four high school students from George Westinghouse High School to attend Pennsylvania Free Enterprise Week (PFEW), a weeklong economic education program that offers students an inside look at the private enterprise system and how the free market functions. riverset is covering the cost of transportation for the students, who have each received full scholarships for the program. The high school seniors – Cierra Christian, Tirell Harris, Jabriel Jackson and Terri Waller – were recommended by their business teachers to receive the scholarship to attend. Each student was also required to write an essay as part of the process and was ultimately chosen. Christian and Waller are attending the PFEW business camp this week at the Pennsylvania College of Technology in Williamsport, while Harris and Jackson will attend the camp next week at Lycoming College, also in Williamsport.

National News

National News

CU leaders note unity in One World/One Event

LAS VEGAS (7/12/10)—The theme was One World/One Event, and credit union leaders who opened The 1 Credit Union Conference's general session Monday morning in Las Vegas marked the efforts of credit unions and the unity of the credit union movement worldwide.

"Bear in mind we are a global movement," said new Credit Union National Association (CUNA) President/CEO William "Bill" Cheney at the historic joint conference of CUNA and the World Council of Credit Unions (WOCCU). "The U.S .credit union movement is just one part, but an important one. Through our WOCCU membership, CUNA will continue a robust, important role in the world movement," he added.

The conference theme "rightly conveys the unity of the credit union movement, worldwide. In fact, CUNA and the U.S. credit union movement stand in unison with the world-wide movement's vision--as articulated in WOCCU's vision statement: 'to improve people's lives through credit unions,'" Cheney said.

Earlier, Dan Mica, CUNA's outgoing president/CEO, passed the reins to successor Cheney, who promised to pursue U.S. credit unions' regulatory challenges with renewed vigor. "Isn't it great to be part of the world credit union movement?" asked Mica in a now-familiar greeting, passing an oversize "key to CUNA" to Cheney.

In recognition of Mica's 14 years of service at the helm of CUNA, the National Credit Union Roundtable's Bill Raker, president/CEO of U.S. FCU in Burnsville, Minn., read a proclamation lauding Mica's contributions. He also presented CUNA's former CEO with an oversize check representing a $222,650 contribution on Mica's behalf to Credit Union House in Washington, D.C. The donation was made up of contributions from the 100 largest U.S. credit unions that make up the CU Roundtable.

Cheney spoke to the challenges still facing U.S. credit unions, including the recently passed interchange regulations, member business loan restrictions, and the need for capital reform and alternative sources of capital for credit unions. He acknowledged the hard work done by credit unions to date, but stressed the need for increased grassroots efforts in terms of both lobbying and education to oppose current and future legislation that could harm credit unions' abilities to serve members.

"We've seen very little growth in market share during the past 20 years," Cheney said. "To remedy that, capital reform will have to be one of our top priorities. We have to be able to define our own future."

The theme was carried through by Crear, who talked about the "one credit union movement" that WOCCU serves, illustrating the great need credit unions fill in many of the countries in which WOCCU operates. "It's a movement that crosses boundaries and borders, has no language barriers and operates in as many different ways as there are members to serve," Crear said. "The one movement is something of which you all are part."

Crear's tour through Mexico, Kenya and Afghanistan culminated in a seven-minute video that looked in greater depth at WOCCU's program in Haiti. "Our efforts in Haiti demonstrate clearly the need for strength, for unity, for hope and for commitment to the credit union ideal," Crear added. "As long as we continue working together toward this goal, we will be the single best answer to the financial needs of all our members."

Nearly 2,800 participants from 60 countries are gathered at the conference, which ends Wednesday.
Live at The 1 (News Now's onsite updates)
CU Magazine Daily coverage

Busy Senate could see vote on key bills

WASHINGTON (7/13/10)—The U.S. Congress returned to session this week after its Independence Day District Work Period, and the action credit unions will want to watch is mostly concentrated in a busy Senate schedule.

The Senate, reconvening yesterday afternoon to take up judicial nominations, also has on its agenda a final vote on H.R. 4173, the Wall Street Reform and Consumer Protection Act, anda vote on the Small Business Lending Fund Act (H.R. 5297).

Each bill has its hot-button topic for credit unions. H.R. 4173, the comprehensive financial regulatory reform package, includes a provision requiring government price setting for interchange fees, which is strongly opposed by the Credit Union national Association (CUNA). And Sen. Mark Udall (D-Colo.) has introduced an amendment for The Small Business Lending Fund Act that would increase the credit union member business lending (MBL) cap to 27.5% of total assets, up from the current 12.25%.

CUNA President/CEO Bill Cheney has underscored the urgency of continued credit union grassroots action on both bills.

Cheney urges credit unions to continue to encourage their senators to back the increased MBL cap. He also urges continued opposition to the interchange provision, the inclusion of which in the regulatory reform bill has forced CUNA's opposition to the package.

Also on the Senate agenda this week is a vote on a supplemental appropriations bill, so while a vote is expected on H.R. 4173 late this week, it is also possible—and perhaps likely—that the Senate will not complete action on all of these bills this week.

And a hearing of note this week: the Senate Banking Committee will conduct a nomination hearing for Janet Yellen to be a member and vice chair of the Federal Reserve Board, as well as for Peter Diamond and Sarah Bloom Raskin to be members of the Fed Board.

The House has a lighter schedule this week. Of interest to credit unions:

• Consideration of the Flood Insurance Reform Priorities Act (H.R. 5114), which, as the name implies, would re-order the priorities of the program, and also provide a five-year extension of the National Flood Insurance Program. The programs most recent temporary extension lapses on Sept. 30.

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