The Pulse (08-06-14)
August 6, 2014 ● Volume 03, Issue 30
The Pulse Archive
Credit Union News
U.S. credit unions reach 100 million member milestone
Credit unions have reached and surpassed 100 million memberships nationwide – equating to one in every three Americans – MnCUN President & CEO Mark Cummins announced today.
The 100 million memberships count is based on data collected from credit unions and compiled by CUNA in its June 2014 “Monthly Credit Union Estimates.” CUNA estimates that credit union memberships expanded by 2.9% in the past 12 months (June 2013 to June 2014), and the 100 million mark was eclipsed in June. This represents a continuation (and acceleration) of trends previously reported: In 2013 memberships expanded by 2.5% and in 2012 memberships grew 2.1%. CUNA expects the membership growth to continue in the second half of 2014 and exceed the full-year growth of the previous year.
“The national numbers reinforce the membership trend we’re seeing here in Minnesota,” said Cummins. “Consumers and businesses continue to choose credit unions as their primary financial institution – much as they choose other local, community-focused businesses that align with their values.”
Credit unions added a total of 2.85 million additional memberships over the past year - the largest reported increase in more than a quarter century. And, in percentage terms, the 2.5% increase was the fastest since 2000, according to the CUNA analysis.
“Clearly, there is growing recognition for credit unions among consumers,” said CUNA President and CEO Bill Hampel. “They increasingly understand that a credit union places their interests above all else, particularly in returning financial benefits to consumer members in the forms of lower rates on loans, higher returns on savings, and lower and fewer fees.” He added that, in 2013, those financial benefits totaled more than $6 billion.
Hampel pointed out that, as cooperatives, credit unions are owned by their members and exist to provide financial services to those members. Banks, he noted, which are owned by shareholders, exist to return profits to those shareholders.
“It’s the structure of credit unions – as not-for-profit, democratically led and cooperatively owned financial institutions– that allows credit unions to maintain this focus on returning financial benefits to members,” CUNA leader Hampel said. “In fact, by doing so, credit unions have earned the satisfaction and trust of their existing members – and are attracting even more.”
At least two, key measurements of consumer attitudes have recently underscored the reputation that credit unions have built among their members. At year-end 2013, the American Customer Satisfaction Index (ACSI) found, for the fifth straight year (which is every year that credit unions have appeared on the index), that credit unions lead banks in customer satisfaction (scoring 85 out of 100, compared to 78 for all banks).
In 2013, the Chicago Booth Kellogg School Financial Trust Index showed that consumers trust credit unions more than banks. The index (which is sponsored jointly by the Kellogg School of Management at Northwestern University and the University of Chicago Booth School of Business) showed trust in credit unions is 62% while trust in big banks is 28%.
CUNA Chief Economist Mike Schenk said other factors within the financial services marketplace have played key roles in the credit union growth. He noted that a growing number of consumers continue to express dissatisfaction with big Wall Street banks due to economic downturn and consumer movements such as Bank Transfer Day in 2011, when consumers were urged through a grassroots movement (primarily on social media) to leave big banks and move their money to a credit union or small bank because the organizations tend to offer better rates and incur fewer fees.
“In 2010, credit union membership barely grew, expanding by just about 0.65%, or about 600,000 memberships,” Schenk said. “But, with the spotlight turned in 2011 to the increasing fees banks were charging – particularly for debit cards and other products – and the additional publicity for the lower and fewer fees at credit unions by contrast, membership growth that year more than doubled over the previous year, by 1.4 million – and the rate of growth has increased in each subsequent year."
Schenk noted that not everyone can join the same credit union, but there is a credit union for everyone. Consumers wishing to find a credit union they are eligible to join should visit aSmarterChoice.org, a website that includes a comprehensive credit union finder (including every credit union in the country), and helps consumers learn more about credit unions.
Additionally: Hundreds of credit union members have shared their credit union story with their photo on americascreditunions.org and social media to show they are part of an organization that focuses on their best financial interests. Learn more about the 100 million credit union memberships nationwide milestone by visiting www.americascreditunions.org.
MnCUN creates resource page to help CUs combat elder abuse
Many credit union staff have heard, and many times have witnessed, how vulnerable adults are taken advantage of financially by family members, fiduciaries, and con artists. In response to this pervasive issue, the Minnesota Credit Union Network (MnCUN) hosted the Elder Financial Abuse Forum on July 24, 2014, for member credit unions. This session, moderated by Hubert H. “Skip” Humphrey III, former Consumer Financial Protection Bureau Senior Liaison, included a panel of stakeholders in Minnesota who are battling this epidemic to discuss how to identify and report to the appropriate agencies suspicion of elder financial abuse. In order to provide assistance in recognizing and preventing this type of financial abuse, MnCUN has created an Elder Financial Abuse Resources webpage.
The webinar and presentation can be viewed online:
To best face the ongoing issue of elder financial abuse, MnCUN has partnered with representatives from the MN AARP, the MN Department of Commerce, the MN Department of Human Services – Adult Protection Unit, and the newly created Minnesota Elder Justice Center out of William Mitchell College of Law.
Two former Minnesota House Speakers keynote election debate at Fall Leadership Conference
The 2014 elections are just a few months away. Individuals elected to the State Legislature and to Congress have a tremendous impact on the day-to-day operations of your credit union. Join this fun and informative session to hear political experts from both sides of the aisle give their predictions and perspectives on the November elections.
- Dee Long (DFL) - Long is a former member of the Minnesota House of Representatives, representing part of Minneapolis. Long was the first woman to serve as Speaker of the Minnesota House of Representatives, a position she held from 1992 to 1993. Long first won election to the House of Representatives in 1978, and served in the body until 1998. Long was elected as the first female Speaker of the House in 1992 as well as the first woman to chair the House Tax Committee.
- Steve Sviggum (GOP) - Sviggum is a former member of the University of Minnesota Board of Regents, and an executive assistant to and communications director for the Republican caucus in the Minnesota Senate. A former Speaker and member of the Minnesota House of Representatives, Sviggum represented District 28B in the southeastern part of the state
Visit the Fall Leadership Conference page of the Network website for more information about conference speakers. With questions, please contact MnCUN Director of Education Sue Groskreutz by email or at (651) 288-5521
Last chance: Register TODAY for tomorrow’s Crew education & networking event
Members of the Crew – young credit union professionals 35 and under – have one last chance to register for tomorrow’s roundtable and interactive forum. Join your peers for an educational webinar geared toward emerging leaders, entitled “Managing for Ultimate Performance: The 6 Building Blocks of Success.”
Following the webinar, Crew members will engage in a roundtable discussion on this and other hot topics.
Join us on Thursday, Aug. 7, from 1:30 p.m.-4:30 p.m. at the Network office in St. Paul. Follow this link to register now. With questions, contact MnCUN’s Crew Liaison Laura Whittet by email or at (651) 288-5503.
NCUA confirms: CUs will not face corporate assessment for 2014Credit unions will not face an assessment this year for the Corporate Credit Union Stabilization Fund, the National Credit Union Administration (NCUA) confirmed at its board meeting last week. Future assessments are unlikely as well.
Larry Fazio, NCUA Director of Examination & Insurance, said the improvements to the fund are due to the performance of the NCUA Guaranteed Notes (NGN) program and recent corporate credit union litigation settlements totaling more than $1.75 billion. Net projected remaining assessments in the Stabilization Fund range from -$2 billion to -$0.6 billion. NCUA Chair Debbie Matz said the double negative projected assessment range is “positive news” for credit unions.
But Fazio emphasized that the negative assessment range does not mean there are funds available to provide refunds to credit unions now, as the improving values of legacy assets are used to secure the NGN. The NCUA also owes $2.6 billion borrowed from the U.S. Treasury. The agency did indicate that some rebate to federally insured credit unions in 2021 might be possible, but only after all obligations, including those to Treasury, have been met.
The board also provided a quarterly update on the status of the National Credit Union Share Insurance Fund (NCUSIF). The fund has an equity rate of 1.29 percent as of June 30, and reserves are approximately $176.1 million, $8.1 million of which are for specific credit unions.
According to the NCUA, there are 295 CAMEL 4 and 5 credit unions, representing 1.46 percent of insured shares, or approximately $13.2 billion. The number of CAMEL 4 and 5 credit unions is on the decline. There are 1,466 CAMEL 3 credit unions, representing 10.46 percent of insured shares, or $94.5 billion. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent only 11.92 percent of total insured shares.
SunCorp announces intent to merge with Alloya Corporate
System United Corporate Federal Credit Union (SunCorp), based in Westminster, Colo., announced last week its intent to merge with Alloya Corporate Federal Credit Union of Warrenville, Ill.
SunCorp President/CEO Tom Graham said the announcement comes after “an extensive process of strategic planning and due diligence by the SunCorp board, aimed at finding the best means to deliver excellent cooperative financial services to SunCorp members. The board and management clearly saw Alloya as the best partner to help our members grow and succeed in today's competitive marketplace.”
The merger still must be approved by the National Credit Union Administration (NCUA). A member vote on the merger is expected to take place in February, shortly after anticipated regulatory approval. Prior to voting and the approval process, SunCorp plans to host multiple town hall meetings throughout the Rocky Mountain region.
“This merger with SunCorp clearly enhances the value that all of our members will receive,” Alloya President/CEO Todd Adams said in a press release. “Combining both organizations strengthens Alloya and helps us to assure a continued, long-term cooperative value to all credit union members from coast to coast. Retaining many key staff of SunCorp also enhances our leadership and service delivery strengths, including member contact staff in all four U.S. continental time zones.”
As part of the merger agreement, Alloya has committed to retaining SunCorp's office in Denver. It will also retain member-facing staff to further grow relationships with SunCorp's members in Colorado, Utah, Wyoming, Nebraska and California. Both boards have agreed to governance provisions for merger that include two board seats, and committee representation from former SunCorp board members.
The next step after the completion of due diligence would be the execution of a definitive merger agreement by both corporates and submission of an application for merger to the NCUA.
Discover fall fundraising flexibility through Foundation Fridays – support financial education, college scholarships & the Gillette Children’s Hospital
Credit unions are encouraged to check their fall calendars and register today for Foundation Fridays, a unique fundraising event that helps raise awareness for the Minnesota Credit Union Foundation and its committees – Minnesota Credit Unions for Kids (MnCU4Kids) and the Minnesota Family Involvement Council (FIC).
During the fall, credit unions can designate one Friday (or several) as a Foundation Friday. (Note – if Fridays are not ideal, CUs can choose another day – ideally a day with higher foot traffic – to host this event.) On this day, tellers and call center staff will conclude each member interaction by asking for a contribution to help support financial education, college scholarships and Gillette Children’s Specialty Healthcare. At the end of the event(s), credit unions can forward all donations to the Foundation, to be split evenly between the Foundation general fund, MnCU4Kids and the FIC. It’s that simple!
Below is a brief explanation of the work of the Foundation and its committees.
- Minnesota Credit Union Foundation - an organization that provides the resources for credit unions and communities to prosper and thrive. Foundation grants are chiefly focused on financial education and professional development and disaster relief efforts that aid the credit union movement in Minnesota and beyond.
- Minnesota Family Involvement Council - works to provide credit unions with financial awareness solutions. The FIC conducts an annual scholarship program, awarding funds to Minnesota credit union members to help advance their college education. This endeavor is made possible through its annual Silent Auction.
- Minnesota Credit Unions for Kids - a collaboration of credit unions, chapters, leagues and business partners engaged in fundraising activities to benefit Children’s Miracle Network-affiliate hospitals. All money raised through Minnesota’s Credit Unions for Kids program supports Gillette Children’s Specialty Healthcare, which helps kids with disabilities and chronic conditions. Gillette is based in St. Paul, with clinics located around the state.
Each participating credit union will receive a turn-key toolkit including how-to information, sample press releases, lobby posters and more! To sign up for Foundation Fridays now, send your name, credit union, phone number and email address to the Minnesota Credit Union Foundation.
Celebrate summer AND Children's Miracle Network on Thursday, Aug. 14
Minnesota Credit Unions for Kids (MnCU4Kids) is encouraging credit unions across the state to participate in the upcoming Miracle Treat Day on Thursday, Aug. 14.
On this day, $1 or more from every Blizzard® Teat purchased at participating Dairy Queen stores will be donated to Gillette Children's Specialty Healthcare, Minnesota's Children's Miracle Network-designated hospital. Gillette, which helps kids with disabilities and chronic conditions, is based in St. Paul, with outreach clinics located around the state.
Mark your calendars for the special day to thank your staff or involve your family and friends. To find a participating DQ store, enter your zip code into the finder located on the Miracle Treat Day website. (Please call ahead for group orders!)
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.
City & County CU launches Cash Perks, a new rewards program
Affinity Plus FCU sets up fund for Mendota Heights police officer’s family
Royal CU’s Finn & Meszaros make “Top 15″ in CUES Next Top Credit Union Exec Challenge
Unity One CU builds on BACON campaign
Minnesota credit unions endorse Rep. Rick Nolan in 8th Congressional District contest
On Capitol Hill, regulatory relief advancing
NCUA Board holds seventh meeting, issues Board Action Bulletin
NCUA releases latest video in Economic Update series
FinCEN proposes BSA amendments to include identity confirmation of entity beneficial owners
FHFA Extends deadline for G-Fee Input to Sept 8
NCUA Proposes Rule Eliminating 5% Fixed-Asset Maximum