The Pulse (08-07-13)
Aug. 7, 2013 ● Volume 02, Issue 31
The Pulse Archive
Credit Union News
MnCUN webinar to highlight next steps in "Don't Tax My Credit Union"
Credit unions around the country have delivered more than half a million contacts to Congress since May 22, when the "Don’t Tax My Credit Union” campaign was launched. From credit unions in this state, more than 8,000 contacts have been made to Minnesota's federal legislators. As tax reform deliberations continue in Congress, it's critical to build on these successes and generate more grassroots response.
That is why MnCUN's Governmental Affairs team is hosting a webinar, Next Steps: "Don't Tax My Credit Union" Update, to discuss where tax reform stands in Congress and the next steps for credit unions in promoting this campaign. This half-hour webinar, on Tuesday, Aug. 13, will explain how your credit union can use messages to members, social media and other tools to engage more supporters in this fight to preserve credit unions' tax status.
To register for this free session, go to the Event Calendar section of the Network website. It’s important that all credit union employees hear this crucial information! Tax reform will be a long process in Congress, but it presents a very real threat to credit unions. We need to make sure our voice is heard! If credit unions do not fight for their tax status now, they run the risk of not getting the opportunity to weigh in at all. Don’t wait to see if credit unions are included in a House or Senate tax bill, or waste time debating whether tax reform is going to happen. At that point, it could be too late to have any influence with Congress.
For resources to help you promote "Don’t Tax My Credit Union,” go to the Tax Advocacy Resources page of the Network website. With questions about this advocacy effort, contact MnCUN Political Advocacy Director Ryan Smith by email or call (651) 288-5533.
Membership, loans grow as Minnesotans continue choosing credit unions
Minnesota credit unions continued a trend of steady growth in the first half of 2013, maintaining gains in membership and loans.
Overall, Minnesota’s not-for-profit credit unions experienced mixed results in key financial performance indicators for the second quarter of 2013. However, modest economic growth is expected to improve credit union operating results during the remainder of the year.
Minnesota consumers and businesses also continue to choose credit unions as their primary financial institution – much the same as they are choosing local restaurants, food co-ops and other community-focused businesses."Minnesotans trust member-owned credit unions and have always been strong advocates for them,” Mark Cummins, MnCUN President & CEO. "Many consumers feel that credit unions are more aligned with their values rather than for-profit financial institutions.”
- The latest available results show that Minnesota credit union membership grew by 6,000 in Q1 2013 to reach 1,579,000 – a 0.7 percent growth rate. This number, although slightly behind the pace of the 0.9 percent growth reported in the first quarter of 2012, illustrates consumers' continued interest in the credit union business model.
- Minnesota credit union assets declined by just four-tenths of a percent between Q1 2013 and Q2 2013, with 6.2 percent growth between Q2 2012 and Q2 2013. Minnesota credit unions' total asset growth rate, despite a drop from 9.4 percent in 2012 to 7.6 percent in the first quarter of 2013, is well-above the national average of 5.3 percent.
- In Q1, Minnesota credit unions' asset quality measures improved. Overall, the 60+ day dollar delinquency rate fell to 0.90 percent, a 0.19 percent decline compared to fourth quarter 2012. The Minnesota credit union delinquency rate is less than one half of that reported by Minnesota banks (1.82 percent).
- Deposits at Minnesota credit unions decreased 0.4 percent in Q2 2013 from Q1 2013, but increased 6.9 percent year-over-year from Q2 2012 to Q2 2013. Minnesota credit unions’ core deposits grew from 40.1 percent in 2012 to 41.6 percent in the first quarter of 2013, continuing a long-term positive trend.
- Loan balances increased 2.7 percent in Q2 2013, up from a -0.5 percent decrease in the first quarter. Year-over-year loan growth was 4.4 percent between Q2 2012 and Q2 2013.
- Additionally, despite the first quarter decrease in overall lending (-0.5 percent) credit unions' member business lending grew at a rate of 1.6 percent during the same time frame
- Minnesota credit unions are rated as "well-capitalized” by the National Credit Union Administration (NCUA), with a net worth of 9.99 percent. The NCUA considers a credit union as well-capitalized if its net worth is above 7 percent.
Credit unions submit quarterly data to NCUA. The summary and analysis above was compiled by the Minnesota Credit Union Network. With questions about this information and data, contact MnCUN Controller Tommy Rempfer by email or at (651) 288-5511. With questions about disseminating this information to the media or your members, contact MnCUN Director of Communications Connie Kuhn by email or at (651) 288-5527.
Learn CU fundamentals and supervisory basics in MnCUN's workshops
Beginning in September, MnCUN will host workshops around the state that will offer credit union employees and Supervisory Committee members insight into the inner-workings of credit unions and tips that lead to worry-free exams. These unique educational opportunities, led by MnCUN's Audit & Compliance Consultant Marcia Armstrong Lewis and Director of Business Development Vickie Ganrude, are designed for credit union professionals and volunteers of all levels.
Dates and locations for each workshop are as follows:
"Nuts and Bolts of CU Fundamentals”
(1 p.m.-4 p.m.)
The afternoon workshops, geared toward credit union staff, will focus on the basics of financial statements and the role that all employees play in the exam process, as well as the importance of internal controls and understanding the "why” behind your day-to-day duties.
"Supervisory Committee Workshop”
(5:30 p.m.-8:30 p.m.)
These evening sessions are geared toward the Supervisory Committee and will offer an overview of the NCUA exam process and financial statement basics, as well as the committee’s fiduciary and auditing responsibilities.
These sessions cost $69 per person, which includes session materials and snacks for the afternoon workshops or a light dinner for the evening sessions. To register and for more information, go to the Event Calendar page of the Network website.
CUs in the Arrowhead region work to offer solutions to payday debt
Many consumers view payday lending as a quick fix to an immediate problem, but it often proves to be more of problem than a problem-solver. Minnesota credit unions, such as Northern Communities Credit Union (NCCU) and Two Harbors Federal Credit Union (THFCU) are positioned to help consumers manage payday loan debt, while also offering alternatives to payday lending that allow their members to regain a financial foothold. These credit unions work within their communities to help provide solutions and educate their members while getting to the root of financial issues that can lead to seeking payday loans.
NCCU, with locations in Duluth and Virginia, Minn., puts financial education into practice. NCCU believes that member education – first and foremost – is the best line of defense for members facing financial challenges.
NCCU takes an overall member-centric ”seasons of life” approach when interacting with their members, according to President & CEO Larry Champeaux.
"Every interaction credit union staff has with members involves finding out what’s most important to the member today, whether that’s saving for a child’s college tuition or preparing for their own retirement,” Champeaux said. "Our credit union also makes financial counseling available to members, which helps them qualify to receive additional services and be better-prepared to properly budget and set up a long-term plan.”
Earlier this year, NCCU partnered with LSS Financial Counseling, a service offered through the Minnesota Credit Union Network, to help consumers avoid bankruptcy, foreclosure and debt settlement scams. Working with NCCU and LSS, members receive customized financial wellness plans that meet their unique needs.
THFCU also works closely with members to help them avoid the payday lending trap. Its new program, "Alternative to Predatory Lending” or APL, is used to assist members who would not normally qualify for an unsecured loan – due to credit, income or other factors – to assist them in an emergency. APL applicants must be a credit union member for at least one month, and there is no application fee. They may borrow a minimum of $200.00 and a maximum of $500.00 at 18% APR with a minimum loan term of one month and a maximum term of six months.
"We encourage the member to open a savings account at the time of the loan and encourage a small deposit be made to this savings account each month along with their loan payment (to promote savings for emergencies). Once the loan is paid off we encourage them to continue to put the previous loan payment money into this account,” says THFCU Vice President of Lending, Darla Abrahamson.
A good example of APL in action involves a THFCU member who had a death in the family, needed money to fly south to attend the funeral and had no financial resources available for this emergency. THFCU was able to finance the plane ticket so the member could be with her family. The member successfully paid the money back and now has a small savings established with regular deposits to it.
As part of the lending process, the THFCU member also receives a brief financial review. In the review the member learns about their credit score, how to balance their checkbook, how to set up a budget and also receives education on loans. THFCU has partnered with GreenPath, a non-profit financial organization that assists consumers with credit card debt, housing debt and bankruptcy concerns.
Survey says: MnCUN diligent, effective in its service to credit unions
Credit unions statewide showed they think highly of the Minnesota Credit Union Network, according to results of the 2012 Performance Survey. In an effort to provide quality, valuable service to member credit unions, MnCUN conducts an annual survey in late March to gauge its performance over the previous calendar year. The Network Board analyzed these results at its July 26 Board meeting.
Credit unions said the Network offers solid service and value. On a scale from 1-7, with 7 being the best, MnCUN received an overall satisfaction rating of 6.1, and 84 percent of survey respondents felt that MnCUN has improved or maintained its service to credit unions.
Network staff was also ranked as being accessible, professional, informed, experienced, well-managed and excellent leaders. MnCUN's areas of legislative advocacy, communications, and regulatory compliance were ranked as the top three core competencies and each received an overwhelming number of "excellent” and "good" ratings.
MnCUN's Performance Survey, introduced in 2001, helps the Network staff and its Board of Directors evaluate offerings and monitor trends in credit union satisfaction, based on whether the Network has improved, maintained or declined in its service to member credit unions. To view the Performance Survey results, visit the Credit Union News section of the Network website.
Credit Unions in the News ...
Minnesota credit unions are making headlines every day! Follow the links on the stories below to read more about the outstanding programs, new initiatives and well-deserved recognition received by your peers in recent weeks. Got news of your own? Send stories, pitches, press releases and published articles to MnCUN Director of Communications Connie Kuhn.
- Royal Credit Union has a new Vice President of Business Loans & Services… more
- A special report from CUNA’s News Now focuses on the financial literacy efforts of HomeTown Credit Union, St. Paul Federal Credit Union and Postal Credit Union and their in-school, student-run branches … more
- Financial One Credit Union is announced by NerdWallet as a Credit Union Gen Y contest winner… more
Be the CU voice; sign up for Hike the Hill
Metsger becomes official NCUA board member with Senate vote
NCUA sets Stabilization Fund assessment for 2013
Court strikes down interchange cap rule
Upcoming effective dates
NCUA Issues Regulatory Alerts
Alert No. 13-RA-04: Garnishment of Accounts Containing Federal Benefit Payments
Alert No. 13-RA-05: TILA Escrow Rule – Small Entity Compliance Guide
Alert No. 13-RA-06: CFPB's Remittance Transfer Rule
Alert No. 13-RA-07: Real Estate Appraisals & Other Written Valuations Under Equal Credit Opportunity Act
Out for Comment
NCUA seeks to require electronic filing for all reports