The Pulse (04-22-15)



The Pulse (04-22-2015)

April 22, 2015 ● Volume 04, Issue 16


The Pulse Archive

Credit Union News


Uber and Lyft: compliance issues and pending MN legislation

Transportation network companies (“TNCs”, such as Uber and Lyft) and their operations have captured recent attention as legislation regulating TNCs progresses in more than 35 states. Continued uncertainty in this area may impact some loans held by credit unions for which its member is a TNC driver. The following is an update regarding potential compliance issues and pending legislation that may impact Minnesota credit unions.

First, if a member is requesting a new loan and has shared that he/she intends to use the vehicle as a TNC driver, a credit union should determine whether or not a consumer loan or commercial loan is appropriate. Traditionally, most consumer loan documents include a term that using a vehicle for commercial purposes is a violation of, and an incident of default, of the loan agreement. 

Second, the appropriate insurance coverage for such a purpose is still a gray area. A loan agreement generally requires that a member maintain adequate insurance on the vehicle and that the credit union is listed as an additional insured. However, there has been some suggestion that an insurance company, in some instances, would not cover property damage on a vehicle whereby the member only maintains personal liability coverage without any commercial rider.  

It is our understanding that most TNCs require its drivers to maintain adequate insurance, and that these companies also maintain an umbrella policy for coverage in instances in which a driver’s personal insurance denies a claim.  The potential problem may arise where an individual is driving their vehicle, but is not considered by the TNC to be engaged in TNC related activities or services, and therefore a window may exist in which the member is neither covered by the member’s personal insurance or by the TNC’s umbrella.

We would encourage credit unions that have new loans that are impacted by this issue to work with their attorney and/or forms provider to consider providing a loan rider regarding appropriate levels of adequate coverage for the credit union as lender. Also, it may be appropriate to consider sending letters to current members that use personal vehicles for TNC purposes to remind them of their responsibilities of coverage and request an updated certificate of insurance reflecting adequate insurance coverage for such activities.

Legislation in Minnesota addressing issues with TNCs, and taking into account some of the Network's concerns, has been introduced by Sen. Kari Dziedzic (DFL-Minneapolis). Her bill, S.F. 1679, requires that the TNC notify their drivers that their own automobile insurance policy might not provide any coverage while the driver is logged on to the transportation network company's digital network and is available to receive transportation requests, and that using a vehicle with a lien to provide TNC services may violate the driver's loan agreement with the lienholder. Both S.F. 1679 and its House companion, H.F. 1783, are currently on the floor of their respective bodies and await final votes.

It is our understanding that many insurance companies are in the process of creating an appropriate product for this market, which may be spurred by the increased legislation in many states regarding TNCs and such coverage. Until that time, credit unions are advised to proceed with caution regarding TNC loans and take appropriate measures to curb losses by using adequate documentation at the time such a loan is made initially.

Credit unions are encouraged to contact Ryan Smith, Political Advocacy Director, or Lyndsay Miller, Associate General Counsel – Compliance, with questions or concerns.


Foundation committee members awarded for service, dedication

 Megan Primeau
Volunteer of the Year
 Shannon Butler
FIC Volunteer of the Year

Last weekend, at the Minnesota Credit Union Network Annual Meeting & Convention, the Minnesota Credit Unions for Kids (MnCU4Kids) and Minnesota Family Involvement Council (FIC) committees honored two members for their outstanding service. Shannon Butler and Megan Primeau were recognized during the annual awards banquet at the Minnesota Credit Union Network's 2015 Annual Meeting & Convention.

Primeau, Vice President of Marketing at City & County Credit Union, was honored with the MnCU4Kids Volunteer of the Year Award. Primeau has contributed to the success of the Minnesota Credit Unions for Kids committee and its fundraisers in many ways. Since joining the committee in 2011, Megan has been instrumental in the success of the committee golf tournament, annual meeting fundraiser, and the Bowl-O-Rama event. 

Last year, MnCU4Kids raised more than $200,000 for Gillette Children's Specialty Healthcare in St. Paul, which has outreach clinics across the state. Nationally, fundraising for CU4Kids takes place in all 50 states.

Shannon Butler, Contact Center & Electronic Banking Manager at Ideal Credit Union, received the Family Involvement Council's Outstanding Volunteer Award. She joined the FIC in 2008, chair the committee’s marketing subcommittee, and co-chairs the website subcommittee. Butler is also instrumental in scholarship judging and ensuring smooth operations of the FIC's annual silent auction fundraiser. 

The FIC is a volunteer-based organization run by credit union professionals. Its mission is to enhance the future of the credit union movement by providing financial awareness to families. The FIC focuses on providing scholarships to Minnesota credit union members to help further their education and to nurture their relationship with credit 
unions. The recipient of this annual award is voted on by members of the council.


Financial Literacy 5k marketing toolkit available

The Minnesota Credit Union Foundation (MnCUF) will hold its annual Financial Literacy 5K race on Saturday, July 11, at Lake Normandale in Bloomington. The race is for both runners and walkers and also includes a kids run.

Proceeds from the Financial Literacy 5K will provide funding for MnCUF's Financial Education Grant Program, which supports programs, projects or initiatives that positively impact credit union members and Minnesota communities.

A toolkit is available on the MnCUF website to assist credit unions in marketing the Financial Literacy 5k.


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.  


HomeTown CU’s Halverson teaches financial literacy, importance of budgeting

Minnesota Power Employees CU’s Hutchinson serves on national marketing and business development council


Minnco CU raises $20,000 for Credit Union for Kids



MnCUN, Minnesota Homes Matter advocate for homeownership


View all Governmental Affairs news stories


IRS Form 990 and MN Form M4NP due May 15

Effective immediately - CFPB issues final rule suspending submission of credit card agreements

CFPB issues guidance on housing counselor requirement

Compliance Corner Q&A 


View all Regulatory Compliance news stories


If this describes you, then you are invited to join The Crew. This group 
If this describes you, then you are invited to join The Crew. This group 

 Joanna Drennen
 Nathan Dormody

Minnesota Credit Union Network
555 Wabasha Street N, Suite 200
St. Paul, MN 55102

(651) 288-5170
(800) 477-1034