Observing Presidents Day
In observance of Presidents Day, the offices of the Association and Pacul Services, Inc., will be closed on Monday, February 15.
Highway will resume publication on Tuesday.
Have a Happy Valentine’s Day and enjoy the long winter weekend.
Card Survey Reveals Consumer Reaction To Rule Changes
On Wednesday, the Consumer Federation of America and CUNA released results of a survey commissioned by the two organizations which revealed most consumers (61%) are aware there are new credit card protections, but most (65%) don’t know they take effect later this month and don’t understand the specific protections the U.S. Congress approved last year.
The survey also revealed, however, that a large majority of consumers who have noticed disadvantageous changes in the terms of their most frequently used credit card are taking or plan to take some kind of remedial action, most frequently using the card less frequently (69%) and/or paying off the remaining balance faster (62%).
Of those respondents who use credit cards, half said they have noticed some type of recent change in terms by the card issuer. Twenty-eight percent of those respondents say they have been notified of an increase in their interest rate. The three other most likely changes noted by card users were a new fee or fees (18%), an increase in existing fees (18%), or a reduction in rewards (17%).
Also of note, the CUNA/CFA survey indicates consumers are taking or planning action in response to those recent changes by the card issuers. Nearly seven out of eight (85%) of credit card users who reported a change in terms are doing so.
That group of consumers says the two most likely actions are to use the card less frequently (69%) and to pay off the remaining balance faster (62%). Other frequently mentioned responses are to stop using the card (45%) and to use another card (34%). Less frequent reactions are to cancel the card (22%) or apply for a different card (12%).
The survey was conducted for CFA and CUNA by Opinion Research Corporation, which polled a representative sample of 1,013 adult Americans Jan. 28-31.
CUNA-CFA Survey (more details)
Fed Card Rules
Business Services March Madness
On your behalf, the Association’s Business Advisory Services has coordinated a number of different events for credit union staff members in all stages of serving member businesses and at various costs per event and location. We’re sure you will find something of interest and in a price range that fits your budget:
- March 2, 3, 5, or 10 join Molly Snody, Director of Business Advisory Services, for a morning and afternoon session entitled, “Analyzing Self Employed Borrower’s Tax Returns” and “Providing Business Services: An Honest Opinion.”
- Branch Managers and Small Business Lenders will find an opportunity to gain a comfort level with finding true cash flow on a small business owner’s 1040 Personal Tax Return during the “Analyzing Self Employed Borrower’s Tax Returns” morning session.
- CEOs, Board members, and other management staff members will find out what it really takes to offer business services during the “Providing Business Services: An Honest Opinion” afternoon session.
- March 8 hear Ted Kosev, CEO, Barrington Financial Solutions LLC, talk about the truly small business lending market, the micro loan market which includes loans to small business owners totaling less than $50,000. Credit union staff members can learn how to effectively serve this underserved market.
- March 15 and 16 listen to Brian Kirksey, ASA, Sr. Appraiser & Associate Broker; KRES Inc., provide the tools necessary to meet regulatory guidelines of Appraisal Reviews. Don’t let poor appraisals jeopardize the quality of your loan portfolio and workout plans.
Services Set For Murtha
Funeral arrangements have been finalized for Congressman John Murtha, who died on Monday.
Public viewings will be held on Sunday and Monday from 3:00 to 7:00 p.m. at the Duca Funeral Home, 1622 Menoher Blvd, Johnstown. A private funeral service will be held Tuesday at 11:00 a.m. in the Westmont Presbyterian Church, 601 Luzerne Street, followed by private burial at Grandview Cemetery in Westmont (Johnstown).
Governor Rendell ordered all Pennsylvania and U.S. flags across the Commonwealth to be flown at half-staff in memory of the late Congressman. Flags will remain at half-staff through interment.
InfoSight Weekly Update
The latest issue of InfoSight eNewsletter, dated 2/12/10, is now available. Log on to www.pcua.coop and click on the “Compliance” section to reach InfoSight and check out the latest compliance news. Here are some highlights for this week’s update:
- Model Policies Updated
The Model Policy updates for January 2010 have been completed. Remember, InfoSight has 48 model policies, however, these were not designed as ready-to-use policies to be adopted without your performing research and due diligence. Credit union operations can and do vary widely between institutions. Carefully research and develop each policy to ensure that all aspects of a credit union’s operations are consulted and included before it is adopted.
- FinCEN Regulation Improves Domestic and International Information Sharing to Thwart Money Laundering and Terrorist Finance
On February 5, 2010, the Financial Crimes Enforcement Network (FinCEN) announced a final rule that allows law enforcement agencies to submit information requests concerning significant money laundering or terrorist finance investigations to U.S. financial institutions through FinCEN. Expanding the program greatly benefits the United States by granting U.S. Federal law enforcement agencies reciprocal rights to obtain information about suspect accounts in European Union member states.
- NCUA Extends Comment Period for FOM Proposal
On February 4, 2010, the NCUA announced that it has extended the comment period for its recently proposed changes to its chartering and field-of-membership rules until April 15.
Compliance Calendar
February 14
Regulation Z Disclosures for Private Student Loans Mandatory
February 15
Washington's Birthday/President’s Day - Federal Holiday
February 27
Regulation CC - All Deposited Checks become Local (New Appendix A to Reg CC)
March 19
ACH Authorizations and Returns Rule
ACH Stop Payments and Regulation E Rule
April 1
Regulation Z - Escrow Requirement for “Higher Priced” Mortgages
Friday Tidbits
Friday Tidbits
21st Winter Olympics Begin In Vancouver
The 2010 Winter Olympics opening ceremony will take place today in Vancouver, British Columbia, Canada. Festivities will be televised beginning at 7:30 p.m. tonight on NBC. The games will continue through to the closing ceremony on February 28.
Athletes with a Pennsylvania connection include:
Ryan Malone, forward, ice hockey, Pittsburgh (hometown)
Johnny Weir, figure skating, Quarryville (hometown)
Eric Bernotas, skeleton, Avondale (current residence)
Allison Baver, speed skating, Sinking Spring (hometown), Penn State grad
Karen Thatcher, forward, ice hockey, Bryn Mawr (birthplace)
Ben Agosto and Tanith Belbin, ice dancing, Aston (current residence)
In addition, Mechanicsburg resident Mike Walters will be one of 50 members of the United States Olympic Committee’s Volunteer Medical Program. Walters is a trained sports massage therapist with a degree in physical therapy assisting from Central Pennsylvania College.
Source: United States Olympic Committee
Valentine’s Day Tidbits
More than nine million pet owners are expected to buy gifts for their pets this Valentine's Day.
15% of U.S. women send themselves flowers on Valentine's Day.
In 1866, candy manufacturer NECCO made the first "Conversation Hearts" — then called "Motto Hearts." According to NECCO, eight billion of these little candies are sold between January 1 and February 14.
Richard Cadbury invented the first Valentines Day candy box in the late 1800s.
Teachers receive the most valentines, followed by kids, mothers, wives and sweethearts.
Alexander Graham Bell applied for his patent on the telephone, on Valentine's Day, 1876.
Penicillin, a popular treatment for venereal diseases such as syphilis, was introduced to the world on February 14, 1929.
National News
National News
CNNMoney.com says to 'Take this bank and shove it'
NEW YORK (2/12/10)--Angry consumers' big-bank bashing over bailouts, bonuses, and nickel-and-diming continues in the media, with credit unions singled out as a haven from fees. In "Take this bank and shove it," CNNMoney.com discusses consumers' disenchantment with banks and highlights several people who switched from banks to credit unions.
Abel Collins of Rhode Island switched from Bank of America to a local credit union to protest banks that had become "too big to fail" and lack of action in Washington, he told the publication (Feb. 10).
CNNMoney.com notes that Americans are more willing to switch to smaller institutions, and cites Forrester Research that found big banks as the least-trusted U.S. financial institutions. (The same research found that 70% of those survey said credit unions are the most-trusted financial institutions.)
Tom Q. of Minnesota told the publication he ended his 17-year relationship with Wells Fargo after learning he could open a checking account that earned a 4.10% annual percentage yield at a nearby credit union. "Wells Fargo just laughed and the banker said he would probably do the same," he said.
It also noted that businesses are fed up with practices of the big banks. John Anderssen of Portland, Ore., whose photo appears with the article, closed his carpet cleaning business's account at KeyBank and opened an account at Sunset Science Park FCU, a $27 million asset credit union that makes loans that benefit the local community. "I'm very happy," he said. "It is like the banker in the movie 'It's a Wonderful Life.' It really is that way."
CNNMoney.com 'Take this bank and shove it' (full article)
Compliance: 'Hot topics' vetted in CUNA call
WASHINGTON (2/12/10)--Pressing credit union compliance issues, including Truth in Lending (Regulation Z) changes, new overdraft rules, and revamped model privacy notices, were vetted for 90 minutes during yesterday's Credit Union National Association (CUNA) "hot topics" audio conference. Mike McLain, CUNA's assistant general counsel, addressed numerous issues regarding the credit card rules that go into effect on Feb. 22, including if under-aged consumers could be given shared-secured credit cards without going through a separate creditworthy analysis, and how allocations of payments must be handled.
McLain also reviewed four provisions in the new Regulation Z rules that become effective Feb. 22 that apply to all open-end loans, including the new requirement for a 45-day change-in-terms notice, rather than the current 15 days. McLain indicated he is preparing a lengthy compilation of "Frequently Asked Questions" to address the tremendous number of inquiries CUNA has received about the new Regulation Z rules. The topic that produced the most questions from the audience involved the Federal Reserve Board's overdraft restrictions that become effective July 1. Valerie Moss, CUNA's director of compliance information, reviewed the Fed's restrictions on charging any fees connected with honoring or declining overdrafts triggered by ATM withdrawals or one-time debits without first obtaining the member's consent.
Moss discussed how and when credit unions could send out consent forms for existing accounts, although participants questioned how many members would actually provide consent and worried about the impact on credit union revenue. McLain, on a third topic, reviewed the impact that the Fed's decision to consolidate its checking processing operations has on complying with Regulation CC, the expedited funds availability rule.
With the elimination of "nonlocal" checks, credit unions need to review their new account disclosures and determine whether they need to send a notice by March 29 advising members that check holds at the credit union have been reduced. McLain also discussed why a five-day hold is still permitted for checks deposited in nonproprietary ATMs. Nichole Seabron, CUNA's federal compliance counsel, discussed the federal agencies' new "model" privacy forms.
Although use of the new format isn't mandatory, Seabron pointed out that the existing sample privacy notice clauses will be removed from the privacy regulation on January 1, 2011, and therefore credit unions will lose the "safe harbor" of using their current privacy notices.
She noted that while the National Credit Union Administration has not said how it will instruct its examiners about usage of the privacy form, credit unions should expect consumer groups to press for use of the new forms by all types of financial institutions to allow consumers to compare privacy policies across-the-board. The CUNA lawyers also provided quick reviews of two new rules implementing provisions of the Fair and Accurate Credit Transactions Act (FACTA) that go into effect later this year, and updates on what is happening with the Internet gambling regulation and the mortgage registration rules. The archived version of the winter 2010 "Pressing Compliance Issues" program should be available today or Monday on CUNA's website (see "training/audio-conferences").
CUNA Web site
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