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9/17/2014
CUNA Mutual Webinar – Don't Wait to Address Employee Dishonesty and Internal Controls

The Pulse (04-30-2014)








 

The Pulse (04-30-14)

April 30, 2014 ● Volume 03, Issue 17

 

The Pulse Archive

Credit Union News

MnCUN elects board, welcomes 450 at Annual Meeting

 
 Chuck Albrecht
 
 Kelly McDonough
 
 Dan Stoltz

The Minnesota Credit Union Network (MnCUN) held its Annual Meeting & Convention on April 25-26 at the Radisson Blu Mall of America. More than 450 credit union professionals and volunteers attended, representing 78 Minnesota credit unions and 55 service organizations from across the country.

This year’s conference featured a number of prominent guests. Kim Insley, KARE 11 TV anchor, hosted Friday’s general session, which featured Credit Union Administration Chair Debbie Matz. She addressed a number of current industry issues, including risk-based capital standards, interest rate risk, and consumer choice.

“Consumers choose the financial institution that best meets their needs,” said Matz. “Credit unions are providing the up-to-date services that their members want, and other consumers are recognizing that, too.”

She congratulated Minnesota credit unions for their solid growth and financial performance, including a 3 percent growth rate that is well above the national average. Chairman Matz also met with young credit union professionals who are part of MnCUN’s networking group, The Crew. The young professionals gleaned valuable industry insights from Chairman Matz and also learned about creating their own paths to successful credit union careers.

Other conference speakers included:

  • Minnesota Department of Commerce Commissioner Mike Rothman
  • Former Credit Union National Association President Dan Mica
  • President & CEO of University Federal Credit Union in Austin, Tex., Tony Budet
  • CUNA Mutual Group Senior Vice President John Lass
  • CU Lending Advice, LLC, Owner Brett Christensen
  • National Credit Union Administration Economic Development Specialist Bob Jones
  • Marketing and media expert Anthony Huey
  • DAYTA Marketing Director of Sales John Riordan
  • Lutheran Social Services Program Director Darryl Dahlheimer
  • Your Full Potential President Sean McDonald
  • Minnesota Historical Society Center for Social Studies representatives Jessica Winkelaar and Kate Stower

The conference also included a variety of education sessions, as well as an exhibit hall and fundraising opportunities. The Family Involvement Council Silent Auction and Credit Unions for Kids blackjack tournament provided entertainment, and an Awards Breakfast hosted by former WCCO-TV anchor Don Shelby on Saturday recognized the state’s top professional and volunteer credit union advocates. Shelby also served as the keynote speaker for Saturday’s luncheon.

 

Along with networking and education opportunities, conference attendees participated in the annual Business Meeting, which featured an overview of credit union accomplishments over the past year, as well as committee reports and Board elections.

 

This year two incumbents were re-elected to three-year terms on the MnCUN Board of Directors:

  • Dan Stoltz, SPIRE Federal Credit Union in Falcon Heights, was reelected to a seat for credit unions in the Twin Cities metro area.
  • Paul Knorr, Accentra Credit Union in Austin, was re-elected to the greater than 10,000 members seat.

The MnCUN Board also elected the following table officers:

  • Chairman Chuck Albrecht of Mid-Minnesota Federal Credit Union, Baxter
  • Vice Chairman Kelly McDonough of First Alliance Credit Union, Rochester
  • Secretary/Treasurer Dan Stoltz of SPIRE Federal Credit Union, Falcon Heights

“The Annual Meeting gives Minnesota credit unions the opportunity to celebrate our successes and plan for the coming year,” said MnCUN President & CEO Mark D. Cummins. “Getting together this way allows us to share best practices that benefit all Minnesota consumers.”

 

 

The Crew at Annual Meeting

Credit union professionals age 35 and younger were invited to be part of Crew events during the 2014 MnCUN Annual Meeting & Convention. The Crew is a networking group for young credit union professionals who have a desire to grow in their careers.

The Crew enjoyed an exclusive opportunity to have lunch with National Credit Union Association (NCUA) Chairman Debbie Matz as well as Minnesota's NCUA Supervisory Examiner Justin Burleson. As NCUA Chairman, Mrs. Matz heads the independent agency overseeing the regulation and supervision of federal credit unions and the National Credit Union Share Insurance Fund (NCUSIF), which protects accounts at over 6,500 federally insured credit unions serving more than 96 million members and managing more than $1.1 trillion in assets. 

During their lunch, Chairman Matz provided the young professionals group with an overview of her career path, noting that she started her career path working in a credit union. As for her current role as Chairman, Matz views herself as protecting the credit union industry and helping them grown.

“When I speak with legislators I tell them that their constituents have the right to choose their financial institutions,” said Matz. “Maintaining credit union’s tax status allows them to stay alive and keeps the financial industry competitive.”

Crew events are typically held in conjunction with MnCUN's major credit union conferences, and occasional stand-alone Crew events are scheduled throughout the year. Members receive discounts on event admission cost and have "special access” to speakers, legislators and other key credit union leaders, along with opportunities to participate in unique programs. 

To receive access to event discounts, networking and educational opportunities join The Crew. With questions about the Crew, contact MnCUN's Crew Liaison at Lindsey Evans by email or at (651) 288-5170.

 


Reminder Hike the Hill: June 9-11, 2014

Hike the Hill provides credit union representatives with an exciting opportunity to meet with federal legislators and talk about top credit union issues, face-to-face, in Washington, D.C. During Hike the Hill visits, credit union professionals and volunteers meet with the entire Minnesota Congressional Delegation and typically visit the NCUA Board, CUNA and/or Credit Union House on Capitol Hill.

The three-day Washington, D.C., trip will include a legislative and regulatory briefing with CUNA to provide information on the critical issues facing credit unions as well as background information about the current happenings on the Hill.  Attendees will then meet with offices of Minnesota's Congressional Delegation. The trip will also include visits to regulatory agencies including the NCUA.

With questions about Hike the Hill, contact MnCUN Political Advocacy Director Ryan Smith by email or at (651) 288-5533

 


MnCUN hosts conference call on risk-based capital, updates resource page

 

Last week, the Minnesota Credit Union Network hosted a conference call for credit unions to discuss the National Credit Union Administration’s (NCUA’s) risk-based capital proposal. The 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 conference call – held on April 22 – featured Mark Cummins, John Wendland and Mara Humphrey from MnCUN, Mary Dunn and Bill Hampel from the Credit Union National Association, Bill Raker of US Federal Credit Union and Bernie Brixius of Central Minnesota Credit Union. The call provided an overview of the rule, MnCUN’s comment letter, a variety of resources, and time for Q&A and comments.

An archive of the recording, along with other resources, are available on the RBC resource page of the Network website.

Earlier this month, MnCUN – with input from its Regulatory Review Committee – submitted a comment letter to NCUA, and is encouraging credit unions across the state to do the same. 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.

The RBC resource page contains instructions on how to submit comment letters, and a wealth of other information. Comments on the proposal are due on or before May 28. With questions or comments, contact General Counsel Wendland by email or at (651) 288-5519.  

 

 

 

Minn. Credit Union Network pays tribute to two exceptional credit union advocates

    
 Pat Pierce, Leonard Luoma,
Mark Cummins
   
Pat Pierce, Barb Brown,
Mark Cummins

The Minnesota Credit Union Network (MnCUN) honored two credit union advocates with its most prestigious awards – Outstanding Credit Union Volunteer of the Year and Outstanding Credit Union Professional of the Year – at a ceremony held during the MnCUN 2014 Annual Meeting & Convention on April 26. These awards are given to individuals who have demonstrated excellence and leadership, and who also embody the credit union mission.

The Volunteer of the Year Award is given to a credit union volunteer who best represents the credit union spirit through dedication to, and belief in, the credit union movement. Recipients are chosen based on their involvement with credit unions at the local and state levels, along with participation in activities that better their communities.

 

This year’s honoree is Leonard Luoma of Hermantown Federal Credit Union. Luoma has served as Hermantown board chair for 41 years. During his time on the board, Luoma’s leadership and progressive thinking have helped drive Hermantown’s growth from $1 million in assets to $116 million in assets. He strongly believes in the credit union mission of giving back to his community and also volunteers with the Knights of Columbus, the Minnesota Senior Federation’s Northeast Coalition and is active in his church. Luoma has attended every MnCUN Annual Meeting since 1980.

 

“Len always places the best interests of the credit union’s members above everything else,” said Hermantown Federal Credit Union President & CEO Scott Lundgren. “He comes to meetings prepared, gets involved and brings his wealth of experience to everything he’s involved in with the credit union.

 

The 2014 Outstanding Professional of the Year Award is given to a remarkable person who truly stands behind the “people helping people” credit union philosophy. This year’s honoree is Barbara Brown, President & CEO of Northwoods Credit Union.

“Barb helps people day in and day out,” said Del Prevost, former President & CEO of Members Cooperative Credit Union. “Barb has outstanding core values and is well-respected and trusted in the community where she lives as well the credit union community as a whole.”

Brown has served with Northwoods Credit Union since 1987, starting as a teller and working her way around the credit union and through several positions before becoming CEO in 2003. Throughout her career at Northwoods, Brown has made her employees, her credit union and her community top priorities. Since 1999, Northwoods’ assets have more than doubled – reaching $70 million – and membership has increased by more than 160%. She also led the way for Northwoods to become the first credit union of its size to sponsor its community ice arena, driving awareness of the credit union while providing the financial backing to provide this opportunity to area residents.

“The Minnesota Credit Union Network is pleased to honor Len and Barb for the tremendous contributions they have made to their credit unions and to the credit union movement,” said Mark D. Cummins, MnCUN President & CEO. “Their dedication is inspiring, and the Network is grateful to have people like them working on behalf of all credit unions. I congratulate them on receiving these well-deserved awards.”

To view the videos featuring Luoma and Brown, visit the Awards Committee section of the Network website. 

 

Minn. credit unions celebrate building members’ personal finance skills during Financial Literacy Month

To celebrate Financial Literacy Month in April – as proclaimed by Minnesota Gov. Mark Dayton – the Minnesota Credit Union Network (MnCUN) and credit unions around the state held events and showcased their year-round efforts to provide financial education to credit union members and communities.

 

“Credit unions have a positive track record in Minnesota communities on financial literacy thanks to persistent efforts to educate and equip people to live in a fiscally-responsible manner,” said MnCUN President & CEO Mark D. Cummins. “Through financial education efforts and other community initiatives, credit unions across the state are widely known as local financial institutions that consumers can trust.”

 

Minnesota is currently home to five student-run credit unions located in four high schools and one K-12 school. Each year, the Minnesota Credit Union Foundation provides financial education grants to fund initiatives that positively impact credit union members and communities throughout the state. According to a 2013 survey of Minnesota credit unions, 90 percent provide financial services programs or tools to members under the age of 18.

 

Minnesota also ranks highly in many indicators related to personal finances, as outlined in an infographic created specifically for this month. Recent consumer studies confirm that Minnesotans rank higher in personal savings, retirement planning and other key areas of personal financial health, when compared with results in other states.

 

Minnesota is home to more than 1.6 million credit union members, served at more than 400 locations around the state.

 

Below are some of the events that Minnesota credit unions will celebrate throughout Financial Literacy Month in April. 

April 10 – Great River Public Library, St. Cloud

MnCUN hosted a press event to highlight the efforts of two area credit unions. St. Cloud Federal Credit Union will discuss its Financial Fitness Workshop Series offered this month, and Catholic United Financial Credit Union will provide an overview of its identity theft awareness seminars and its efforts to protect seniors. Full Story & Video

April 16 – Como Park Senior High School, St. Paul

In conjunction with the Minnesota Department of Commerce, MnCUN highlighted the success and efforts of St. Paul Federal Credit Union, which has two student-run credit union branches in Twin Cities area high schools. Minnesota Department of Commerce Commissioner Mike Rothman visited Como Park Senior High School in St. Paul to celebrate Financial Literacy Month with the students and celebrate this unique financial education opportunity. Full Story

 

April 17 – Duluth Children’s Museum, Duluth

MnCUN hosted a press event at the Duluth Children’s Museum to highlight its popular “Moneyville” financial education exhibit, which was established in partnership with Minnesota Power Employees Credit Union. This display features interactive, hands-on tours through a mock city to learn economic concepts and experience real-life decision-making scenarios. Moneyville can be toured by the general public or coordinated as a school classroom field trip program. Full Story & Video

 

April 21 – Aquila Elementary School, St. Louis Park

Partnering with United Educators Credit Union, Minnesota Department of Commerce Commissioner Mike Rothman and Department of Education Commissioner Dr. Brenda Cassellius read children’s books about personal finances to nearly 100 second graders at Aquila Elementary School. United Educators Credit Union and University of Minnesota Extension lead additional activities, and each student received a book bag with a parental guide to teaching financial literacy. Full Story

“These partnerships and programs are just a sampling of the many financial education efforts coordinated by Minnesota credit unions,” Cummins said. “Credit unions are proud to offer their skills and expertise to improve consumers’ knowledge of personal finance and to help create a stronger financial future for the state of Minnesota.”

CUNA Mutual’s Bob Kigin recognized as a “CU Builder” through the Minnesota CU Foundation

Robert Kigin, Sales Executive with CUNA Mutual Group for more than 32 years, was recently designated a Credit Union Builder by the Minnesota Credit Union Foundation. Kigin recently announced his upcoming retirement – set for May 30, 2014 – after dedicating his career to working with Minnesota credit unions.

The Credit Union Builder award, established by the Foundation in 2008, recognizes those who have dedicated time and energy to building the credit union movement. Nominations for this award are made by credit unions and organizations in honor of or in memory of a significant individual who has been instrumental in their success.

"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." 

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.

He has received numerous awards and recognition, including being invited to seven Presidents Councils. In addition to his role with CUNA Mutual, Kigin has served as a credit union board member for the past nine years.

“The credit union movement has grown over the years thanks to consumers’ trust of our institutions – and that comes from service we offer and the products that members receive,” said Foundation Chair Pat Brekken. “Bob has been a strong advocate for credit unions throughout his career, and hsis relationships and leadership will be missed.”

Kigin joins 27 other individuals who have been honored over the past six years with the Foundation’s Credit Union Builder Award. The names of the recipients and the contributing credit unions are permanently displayed in MnCUN’s lobby as a tribute to their accomplishments. The honorees receive acknowledgment from the Minnesota Credit Union Foundation, and donors are also listed online and in the Foundation's annual report.

 

To learn more about MnCUF’s Credit Union Builder Award and to view a list of those who have been honored with this recognition, visit the Foundation website. 

Minnesota CU Foundation donates financial education program box sets to Gillette Children’s hospital

In celebration of Financial Literacy Month in April 2014, the Minnesota Credit Union Foundation recently donated to Gillette Children’s Specialty Healthcare two DVD box sets of the Biz Kid$ financial education program. Biz Kid$ is the Emmy Award-winning and credit union-funded public television series that teaches kids about money management and entrepreneurship.

The Foundation, a statewide organization dedicated to providing the resources for credit unions and communities to prosper and thrive, is a past contributor and supporter of the Biz Kid$ program. Financial education is one of the Foundation’s core tenets.

“The Minnesota Credit Union Foundation is proud to support this outreach effort to provide more visibility to this educational tool and more opportunities for consumers to learn basic money management and personal finance skills,” said Foundation Chair Pat Brekken. “We hope that this donation will be beneficial to children and families who utilize Gillette’s services.”

Through engaging skits and real-life situations, Biz Kid$ utilizes teenagers to illustrate how to use credit wisely and reinforce the importance of budgeting, saving, investing and giving back to their communities.  

“The Biz Kid$ DVD box sets are a fun, yet valuable addition to our Family Resource Center. We are delighted to now have this resource to share with not only our patients, but their siblings, as well,” said Darlis Clausen, Gillette’s Director of the Children’s Miracle Network. “Gillette is very fortunate to have the support of the Minnesota Credit Union Foundation.”  

This contribution was precipitated by a national partnership between Credit Unions for Kids and the National Credit Union Foundation to enhance financial education opportunities for patients and families at every Children’s Miracle Network (CMN) hospital in the U.S. Gillette is Minnesota’s CMN-designated hospital, and Minnesota Credit Unions for Kids is a committee of the Minnesota Credit Union Foundation. 




Discover San Francisco: CUNA 2014 America’s Credit Union Conference

America’s Credit Union Conference, presented by CUNA, is praised by attendees as an energizing, forward-thinking event. This summer conference hosts the nation’s best business innovators to inspire fresh ideas and spark action. This year’s keynote speakers include; decorated Navy SEAL and author of Lone Survivor, Marcus Luttrell; founder of The Extreme Leadership Institute, Steve Farber; and author of Leaders Eat Last: Why Some Teams Pull Together and Others Don't, Simon Sinek. The 2014 ACUC will take place June 29 to July 3 in San Francisco, CA. For more information, visit the America's Credit Union Conference website.



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.  

 

Commerce Commissioner Mike Rothman receives national credit union award for work in financial empowerment

 

Greater Minnesota CU wins two state awards, one national award

 

Credit union advocates meet with Rep. Collin Peterson

 

SouthPoint FCU to build administrative center in Sleepy Eye

 

Credit union employees wear jeans, food shelves gain generous donations during Minnesota FoodShare Month

 



MnCUN successful in gaining amendments on self-storage act

Senators Klobuchar, Franken send video greetings to credit unions at MnCUN Annual Meeting & Convention



NCUA issues latest NCUA Report

NCUA releases video on proposed RBC rule

OSCUI hosting free webinar on OFAC and FinCEN Compliance

NCUA holds April board meeting

NCUA Board approves modified stress-test rules

CFPB to launch eClosing Pilot program

 

Out for Comment

NCUA Board proposes rule regarding associational common bond grounds for membership

              
 


Continuity: the Missing Ingredient in Most CEO Succession Plans

By Scott Albraccio

Too many CEO succession plans won’t ensure a good transition because they are actually one of two things:

  1. An emergency CEO replacement plan: Your CEO and/or board chooses a senior executive they’ll ask to step in if the CEO leaves suddenly. This person would be considered an interim CEO and may be given the job permanently—that will be decided when the time comes.
  2. A horse race: The current CEO identifies the most promising candidates to become the next CEO, and periodically updates the board on the candidates’ progress. If the candidates know they’re on such a list, it may spark a less-than-healthy competition.

 

SERPs Build Loyalty and Deter Competitors


Part of creating leadership continuity is building in a cost, beyond salary, for competitors to acquire your next-in-line executives. A properly structured supplemental executive retirement plan adds to a competitor’s cost while creating a deferred compensation incentive for executives to stay.

Executive salaries have increased commensurate with the size and complexity of credit unions over the years. The problem is, tax regulations limit credit unions’ contributions to pension and defined-contribution retirement plans. These executives also face Social Security maximums and limitations on disability insurance and corporate-purchased life insurance.

As a result, highly paid executives can expect a much larger gap than other employees between their pre- and post-retirement income.

Consider two options for closing this gap:

  • “Non-qualified” accounts such as 457(f) and 457(b), funded and owned by the credit union. They generate interest and/or investment returns to be paid to the executive under agreed-upon circumstances, such as when the executive reaches retirement age—provided he or she stays with the credit union until then.
  • A split-dollar life insurance program can be used with, or instead of, non-qualified plans. They offer a stable underlying instrument—a whole life insurance policy—that can be owned by the executive.

Work with an attorney and experienced providers for SERPs. And, as with your entire leadership continuity plan, review them regularly so the next time your credit union needs to replace a top executive, the right person is already on board.

Designating a specific person to take over on short notice is prudent. And identifying the best talent in your credit union is a good idea. But neither of these are a true succession plan. What’s missing is a consistent, continuous process of developing leaders. Give your succession plan a strong “leadership continuity” focus, and back it up with meaningful incentives that will help keep your best leaders from taking their talents elsewhere.

 

Four Keys to Leadership Continuity

1. Engage the board in the process. An effective business continuity strategy goes far beyond a general commitment to promote from within. It transforms CEO succession from an
event into a continuous process. As this requires committing credit union resources, your board
must buy into it. Also, the board is in a position to take some of the responsibility for mentoring the next CEO away from the current CEO. This may
be necessary if the board foresees changes in your marketplace, technology, competition, etc., that will require your next CEO to have a different skill set than your current CEO.

Another role for the board is scenario planning. Taking educated guesses at circumstances under which a new CEO will be chosen can help guide your leadership continuity efforts.

2. Select a champion. Few volunteer boards
have the expertise and resources to design and maintain a leadership continuity program. Your top human resources executive may be the best person to run the plan on a day-to-day basis, and to put the incentives in place. The senior HR person can also fill the role of objective interpreter: The board needs someone who’s on site daily
 and can report on the plan’s progress constructively, without politicizing the issues.

3. Create a hands-on cross-training program. Management development courses and training materials can help, but they can’t replace hands-on training in your credit union. Executives should cross-train in key departments. This not only helps groom them for promotion, it helps prepare your credit union for sudden disruptions that may require people to adapt and assume more responsibility quickly.

To the extent possible, offer cross-training and management development opportunities throughout your organization. A future CEO may be at a teller station right now—it’s never too early to begin encouraging your employees to learn and grow.

4. Establish incentives for top performers: As your leadership continuity program begins to bear fruit, don’t stand aside and let banks or other credit unions pluck that fruit. Strengthen your bond with top performers with incentives such as a supplemental executive benefit plan (SERP). (See the sidebar for more information about SERP.)

You can easily design SERPs not just for CEOs but for the top one, two, or three management tiers. And you can design SERPs so they return the credit union’s initial investment and won’t represent a net loss over time. Common SERP instruments include nonqualified 457(b) and 457(f) programs, and split-dollar life insurance programs.

These can be set up as “golden handcuffs” that reward executives only when they’ve achieved certain goals for your credit union over a set period of time. 

Following these steps is a major commitment. But they can transform your credit union from a training ground for other organizations’ leaders into a place where top talent wants to stay and is ready to take the reins.

SCOTT ALBRACCIO is the Sales Specialist Manager for Executive Benefits at CUNA Mutual Group. Contact him at 800.356.2644, Ext. 665.6542, or scott.albraccio@cunamutual.com.