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The Pulse (04-16-14)









 

The Pulse (04-16-2014)

April 16, 2014 ● Volume 03, Issue 15

 

The Pulse Archive

Credit Union News

MnCUN comments on risk based capital proposal; hosting conference call

The Minnesota Credit Union Network, with input from the Network Regulatory Review Committee, has submitted a comment letter to the National Credit Union Administration (NCUA) regarding its risk-based capital proposed rule. NCUA’s proposed rule, applicable to credit unions with assets over $50 million, would revise the risk weights for many of NCUA’s current asset classifications, which would place higher risk-weights on certain assets such as: real estate loans, member business loans, and delinquent loans. In addition, the proposed rule would allow NCUA to require an individual credit union to hold higher levels of capital to address unique supervisory concerns raised by NCUA. NCUA proposed an effective date 18 months after publication of a final rule.

MnCUN’s comment letter can be found on the
Out for Comment page of the Network website. Credit unions are encouraged to use the Network’s letter as a template, but suggest that it be individualized to reflect how your respective credit union may be affected under the proposal.

In considering the rule and in preparation for submitting a comment letter, see
MnCUN’s resource page on this subject for a summary of the proposal, as well as links to NCUA and CUNA resources, including CUNA’s risk-based capital calculator. 

There are instructions for how to submit comment letters, either electronically or by mail, in the introduction to the proposed rule as published.  All comment letters received by NCUA will be published on its website.

In addition, the Network is hosting a conference call next Tuesday, April 22, from 10-11 a.m. regarding the risk-based capital proposal. Invitations were sent to credit union CEOs, finance and compliance professionals yesterday. Those interested in attending should contact MnCUN General Counsel John Wendland.

Comments on the proposal are due on or before May 28, 2014.  

 

Credit unions score win on UBIT, thanks to support from leagues, CUNA & CUNA Mutual

After the conclusion of two federal court cases brought by state-chartered credit unions, the IRS has issued a memorandum defining a number of credit union products as “substantially related income”, clarifying certain income-producing activities the IRS previously considered subject to Unrelated Business Income Tax (UBIT), as not subject to UBIT. The memo, which is being incorporated into the IRS examination manual geared toward IRS examiners of exempt organizations, reflects the following as “substantially related income” that is not subject to UBIT:

  • Sale of checks/fees from a check-printing company;
  • Debit and credit card program’s interchange fees;
  • Interest from credit card loans;
  • Sale of collateral protection insurance;
  • Credit life and disability insurance (if sold to members);
  • GAP auto insurance (if sold to members).

Royalty income from marketing accidental death and dismemberment insurance to members is also listed in the memo as exempt. The memo further clarifies what specific income areas will continue to be considered subject to UBIT.

A coalition of credit union groups that has supported the litigation known as the UBIT Steering Committee, comprised of the Credit Union National Association (CUNA), CUNA Mutual Group, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors have been actively involved in this issue for approximately 15 years. The decision is being celebrated as one that will relieve credit unions from the threat of having to pay UBIT taxes on certain products and services being offered to members.  Further, credit unions that have paid UBIT taxes on such products in the past and subsequently filed a refund request, may now have such refunds processed.

Credit unions should consult with their tax advisers regarding application for any refund, and for reporting such affected categories in the future. Note that the Minnesota Department of Revenue imposes its own UBIT regulations.

For more information, see the IRS Memorandum on UBIT entitled “Applicability of Unrelated Business Income (UBIT) to State Chartered Credit Unions Described in IRC §501(c)(14)(A)." 

 

Attend Annual Meeting webinar on April 17 – FAQs included! 

On Thursday, April 17, at 10 a.m. the Minnesota Credit Union Network will host an Annual Meeting & Convention pre-event webinar. MnCUN's Vice President Association Services Kristina Wright and MnCUN Director of Education Sue Groskreutz will overview topics related to the April 25-26 meeting, including a schedule and session overview, conference highlights, and tips on getting the most out of the two-day event. Webinar participants will get insider information on session speakers and exhibitors. The webinar will conclude with a question & answer period. Similarly, a webinar for Exhibit Hall participants will be held on Wednesday, April 16. 

An email has been sent to those registered for the 2014 Annual Meeting & Convention with directions on how to access the webinar.

ANNUAL MEETING REGISTRATION CLOSES APRIL 17!

Credit union professionals and volunteers have one day left to register for the MnCUN 2014 Annual Meeting & Convention. Register now! This two-day conference is slated for April 25-26 at the Radisson Blu Mall of America Hotel in Bloomington. With keynote speakers and lively, relevant content, this is an event not to be missed. Follow this link for a full schedule of events.

For additional information and online registration, visit the Annual Meeting page of the Network website. 

With questions, please contact Sue Groskreutz by email or at (651) 288-5521.

 

Heartbleed openSSL vulnerability requires credit union action

Over the past week, news outlets and credit union trade press have been reporting a vulnerability in the way many sites secure communications on the internet. It has been widely reported but the severity of the bug warrants extra precaution and communication.

The vulnerability is caused by a flaw in certain versions of OpenSSL, the open-source encryption standard used by many websites, which allows an attacker to read the memory of the server without leaving a trace.

"It is imperative that credit unions validate that their servers and applications are not affected, in addition to any third-party services they may use," said MnCUN Director of Information Systems Duane Olson.

In emails to credit unions last week, Olson confirmed that the 
Minnesota Credit Union Network and the Minnesota Item Processing Corporation’s public-facing websites and services were not affected by this bug.

According to several news reports, the bug leaks information by creating a hole in the software that many of websites use to turn consumers' personal information into more secure strings of random numbers and letters. It can: 

  • Expose usernames and passwords;
  • Compromise a user's web session in a way that allows another person to pose as that user--no password required; and
  • Enable fraudsters to pose as a legitimate website and bait users into revealing personal information.


The Federal Financial Institutions Examination Council (FFIEC) members expect financial institutions to incorporate patches on systems and services, applications, and appliances using OpenSSL and upgrade systems as soon as possible to address the vulnerability. Financial institutions should consider replacing private keys and X.509 encryption certificates after applying the patch for each service that uses OpenSSL and consider requiring users and administrators to change passwords after applying the patch. Financial institutions relying upon third-party service providers should ensure those providers are aware of the vulnerability and are taking appropriate mitigation action.
 

OpenSSL is a cryptographic software library used to authenticate services and encrypt sensitive information. A significant vulnerability has been found in OpenSSL that could allow an attacker to decrypt, spoof, or perform attacks on network communications that would otherwise be protected by encryption. 

With questions, please contact Duane Olson by email or by phone at (651) 288-5165.

 

Minn. Commerce Deputy Commissioner visits St. Paul FCU and Postal CU student-run branches today

St. Paul Federal Credit Union and Postal Credit Union will welcome Minnesota Department of Commerce Deputy Commissioner of Financial Institutions Shane Deal to their student-run branches at Como Park Senior High School (St. Paul) and Tartan High School (Oakdale) today.

Deputy Commissioner Deal is visiting the schools to help celebrate Financial Literacy Month with the students. In conjunction with the Minnesota Credit Union Network, Deputy Commissioner Deal will also recognize the success and efforts of St. Paul Federal Credit Union and Postal Credit Union, which have three student-run credit union branches in Twin Cities-area high schools.

St. Paul Federal Credit Union’s branch at Como Park Senior High School opened in the fall of 2012, and the credit union opened its second student-run branch at Harding Senior High School in March. Postal Credit Union's Tartan High School branch opened in February 2013. 

 

Minnesota Power Employees Credit Union, Duluth Children’s Museum to highlight financial education initiatives on Thursday

The Minnesota Credit Union Network (MnCUN) will host a press event featuring the financial education initiatives led by Minnesota Power Employees Credit Union on Thursday, April 17, at 10 a.m. at the Duluth Children’s Museum. The news event will include the following slate of speakers:

  • MnCUN President & CEO Mark D. Cummins will discuss the credit union mission of helping members build financial knowledge and highlight the importance of financial literacy.
  • Minnesota Power Employees Credit Union President & CEO Debbie Almirall will talk about the credit union’s partnership with the Duluth Children’s Museum, along with additional credit union financial education initiatives. She will also share insights about serving as a professor of personal and business finance with the University of Phoenix.
  • Duluth Children’s Museum President Michael Garcia will talk about the museum’s popular “Moneyville” financial education exhibit, which was established in partnership with Minnesota Power Employees Credit Union. The exhibit’s interactive, hands-on tours help children learn economic concepts and experience real-life financial decision-making scenarios.

The Duluth news event is part of a month-long series of activities being held by the Network and credit unions around the state to celebrate Financial Literacy Month in April. If your credit union is holding Financial Literacy Month events in your community, please send your information to Director of Communications Connie Kuhn. The Network will help spread the news by sharing your event information on the MN Credit Union News website

  

Minnesota Credit Union Foundation awards $7,500 in financial education grants

The Minnesota Credit Union Foundation (MnCUF) recently awarded $7,500 in grants to assist with implementing financial education projects.

 

“Credit unions are always working to improve their members’ personal financial knowledge and well-being,” said MnCUF Chairman Pat Brekken. “Our local focus is something our members trust, and the Minnesota Credit Union Foundation is happy to support Minnesota credit unions in continuing these financial education initiatives.”

 

Spring 2014 Financial Education Grant recipients include:

 

AccountAbility Minnesota (AAM) and US Federal Credit Union
AccountAbility Minnesota (AAM), an organization focused on poverty alleviation and financial capability for low-income households, is partnering with US Federal Credit Union to offer financial coaching. This new program is designed to increase the financial capability of low-income Minnesotans through education, peer-learning workshops, and introduction to and use of credit union products and services. The financial coaching program will pair 50 individuals with volunteer financial coaches to connection them with tools and resources that enable them to work toward financial goals.

 

Catholic United Financial Credit Union

Working through local churches within its field of membership, Catholic United Financial Credit Union leaders have volunteered their time to provide identity theft awareness seminars in an effort to protect seniors. MnCUF grant funding will provide support for future seminars around the state, as the credit union’s expertise and positive reputation continues to spread through word-of-mouth.

Collegeville Community Credit Union
I the fall of 2014, Collegeville Community Credit Union will open a student-run branch on the campus of Saint John’s University. This partnership between the credit union and the college will be the first of its kind in Minnesota, as the branch office will be student staffed and managed, and overseen by a student board of directors. The establishment of this facility will provide students with experiential learning in banking, management, board governance, marketing and regulatory processes.

Ideal Credit Union
Through an existing relationship with Tartan High School in Oakdale, Ideal Credit Union will host a summer financial education series to build students’ knowledge of personal finance basics. Approximately 30 students – both from Ideal Credit Union’s members and from the local community – will have the opportunity to participate in the series. The MnCUF grant will support a financial incentive for participants to complete the series and pass a knowledge assessment test.

 

The Foundation Board of Directors evaluated applications based on a variety of factors, including credit union value, community impact, collaboration, creativity, and past involvement in and support of Foundation activities. Non-credit union organizations may also apply for grant funding, but must partner with a Minnesota credit union and demonstrate how the project will impact credit unions and their members.

Initiatives must have measurable outcomes, and recipients complete a written follow-up report submitted within 30 days of the project completion.

Additional information and details are available on the Financial Education Grants page of the Foundation website. 

 

Minnesota Credit Unions for Kids reaches major fundraising milestone

Minnesota credit unions continue to demonstrate their strong commitment to the state and local communities through their fundraising and support of Gillette Children’s Specialty Healthcare. The Minnesota Credit Unions for Kids committee (MnCU4Kids) raised $202,291 in 2013 for Gillette Children’s Specialty Healthcare, the Children’s Miracle Network-designated hospital in Minnesota.

Additionally, MnCU4Kids eclipsed a major fundraising milestone, reaching $2.5 million in total funds raised since its inception in 1997 through the generous support of credit unions and vendor organizations throughout the state.

 

MnCU4Kids, a committee of the Foundation, is part of a collaboration of credit unions, chapters, leagues and business partners engaged in fundraising activities that benefit Children’s Miracle Network-affiliated hospitals. Throughout 2013, the volunteer MnCU4Kids committee coordinated a variety of fundraisers that engaged credit unions and members in all corners of Minnesota. Individual credit unions also coordinated their own fundraisers that consisted of cookouts, candy sales, casual Fridays and more.

 

“The tremendous support we receive from the credit unions and companies throughout Minnesota allows committee members to allocate time and effort towards supporting Gillette Children’s Specialty Healthcare,” said MnCU4Kids Co-Chair Dave Engler. “Our committee is just one of the many ways Minnesota credit unions work together for a common good.”

 

MnCU4Kids attributes a significant portion of its fundraising success to CO-OP Financial Services, which provides regular donations through its Miracle Match program.

 

“We appreciate CO-OP’s ongoing support, and I am proud to recognize this long-lasting relationship between Minnesota credit unions and Gillette Children’s Specialty Healthcare,” said Minnesota Credit Union Foundation Chairman Pat Brekken.

 

Gillette Children's Specialty Healthcare is an independent, not-for-profit hospital located in St. Paul, with outreach clinics in Duluth, Burnsville, Maple Grove, Minnetonka. All money raised through the MnCU4Kids program supports Gillette, helping kids with disabilities and chronic conditions. Credit Unions for Kids is a national program, which is endorsed by nearly all 50 state credit union leagues.

 

“Credit Union for Kids has been a reliable sponsor for many years,” said Darlis Clausen, Children’s Miracle Network Manager at Gillette Children's Specialty Healthcare. “The effort of the committee members their credit unions provides Gillette stability in giving quality care to our patients.” 



Report classroom presentations and win $50 through NYIB drawing

As part of a nationwide effort to promote financial education, credit unions are encouraged to notify the National Youth Involvement Board (NYIB) of their classroom presentations made throughout the year. 

The NYIB is currently hosting a reporting contest through May of 2014. Each month, it will pool the names of individuals who have reported presentations and randomly select a $50 Visa gift card winner.

Reporting financial education presentations is beneficial to the Minnesota Credit Union Network, Credit Union National Association, and NYIB in providing information to state and federal elected officials. This quantitative data helps illustrate to lawmakers the credit union difference. Plus, in this day and age of bank attacks, credit unions need to showcase the activities that they do to improve their communities.

It is vital for credit unions to document and report such efforts! The information you submit is used to demonstrate how credit unions make a difference in the lives of young people and, at the same time, helps protect the unique status of credit unions as not-for-profit financial cooperatives.

Reporting your information helps NYIB recognize you, your credit union and the state. In addition, your educational efforts contribute to the decline in bankruptcies, benefiting consumers, credit unions and the economy.

Any credit union employee or volunteer who makes a presentation to groups of students or youth audiences age 22 and younger can report it. Presentations can be conducted in a broad range of educational settings, including a traditional classroom, Scout troop meeting, church group, community group, and others.

Acceptable presentations can be conducted on these and other consumer and financial related topics:

  • Credit union history, philosophy and/or uniqueness
  • Money management: saving, spending, checking, budgeting, credit, lending, insurance, etc.;
  • Consumer education: smart shopping and/or other consumer focused issues;
  • Employment: interviewing, resumes, credit union careers, etc.;
  • Business, finance, employment and other related topics;
  • NEFE High School Financial Planning Program (HSFPP) presentations; or 
  • Junior Achievement and/or other youth-related programs focused on finance

(Note: When presenting Junior Achievement modules or HSFPP presentations, each chapter should be recorded separately.)

Presentations that promote a specific credit union or credit union service, such as youth savings club or teen programs, do not qualify. In addition, visits to schools to pick up deposits for credit union/savings programs or operations of student branches do not qualify.

To report presentations, visit www.nyib.org and log into the "reporting” section on the right side of the page. Additional information can be obtained in the reporting FAQ section of the NYIB website. With questions or for assistance in reporting appropriate presentations, contact NYIB North Central Regional Coordinator Ashley Buchholz.



Longtime credit union supporter Bob Kigin to retire


Bob Kigin, Sales Executive, CUNA Mutual, is retiring after more than 32 years of service to CUNA Mutual and to the credit union movement. Kigin’s last day is Friday, May 30.

Kigin joined CUNA Mutual in 1982 as a Group Coverage Representative Trainee in St. Paul, serving over 100 credit unions in the North Central Marketing Division. He was promoted to Group Sales Manager in 1990. In 1993, he was one of the first Account Vice Presidents to be appointed under restructuring, and has also served in the positions of Executive Group Representative and Account Relationship Manager. Kigin has served as a Sales Executive since 2006.

Beyond CUNA Mutual Kigin has devoted a lifetime to supporting the credit union movement as a member, and as a credit union Board member for the past nine years.

For more than 32 years, he has been a strong advocate of the credit union movement.

"Everyone who has worked with him understands his deep dedication to helping credit unions improve the lives of their members," said CUNA Mutual Group Sales Manager Becki Hagerman. "Over the span of his career he has built strong partnerships with credit unions and Leagues, and has worked hard to position every member of his team as a trusted adviser." 

He has received numerous awards and recognition, including being invited to seven Presidents Councils. 



Credit Unions in the News

Follow the links on the stories below to read more about the outstanding programs, new initiatives and well-deserved recognition received by your peers recently. Got news of your own? Send stories, pitches, press releases and published articles to MnCUN Director of Communications Connie Kuhn.  

St. Cloud-area credit unions discuss financial education at workshop

SouthPoint FCU raises over $15,000 with Chain of Hearts

SPIRE FCU seeking news ways to gather members together

Central Minnesota CU promotes Town and Country Players ‘How to Talk Minnesotan’ production

St. Paul FCU student-run branch included in Como Park High School Academy of Finance Expansion




Why I Love My Credit Union project helps consumers share their love of credit unions

Congress and Minnesota State Legislature take spring recess

Minnesota Department of Commerce to hold fourth Annual Financial Capability Roundtable

 

Call reports due April 25; NCUA intends to penalize late or inaccurate filers

CUNA releases no-cost audio conferences, regulatory and compliance “hot topics”

CFPB hosting mortgage closing process forum, live-stream event available

IRS Form 990 and MN Form M4NP due May 15

NCUA issues legal opinion letter on multiple insured parties under fidelity bond

 

 

Sprint/Nextel discounts available through strategic alliance

Through its strategic alliance with the Minnesota Credit Union Network, Sprint/Nextel offers credit unions the opportunity to earn income through a credit union member discount. Members of participating credit unions are eligible to receive discounts on Sprint/Nextel products and service plans. By simply educating members about these available discounts, credit unions receive payments from Sprint/Nextel. A credit union with 5,000 members could earn $1,000 per year just for marketing the Sprint/Nextel program to members

For in-depth information about the credit union discount program and its ability to earn your credit union income and save members money, visit Sprint/Nextel online. With questions about the Sprint/Nextel Credit Union Member Discount Program, contact MnCUN Director of Business Development Vickie Ganrude by email or at (651) 288-5515.