The Pulse (11-04-15)



The Pulse (11-04-2015)

November 4, 2015 ● Volume 04, Issue 44


The Pulse Archive

Credit Union News


Minn. Supreme Court releases opinion in Commerce Bank case

In March, the Minnesota Credit Union Network (MnCUN), jointly with the Minnesota Banker’s Association, filed an amicus curiae brief (brief) with the Minnesota Supreme Court in the matter of Commerce Bank v. West Bend Mutual Insurance Company.

The question before the Court was whether a mortgagor’s acts or neglect which triggers an exclusion in the underlying owner’s policy of insurance can also operate to invalidate the entire policy, thereby cutting off all rights of a mortgagee-loss payee.

MnCUN supported Commerce Bank’s position that the standard mortgage clause creates a separate contract for insurance between the mortgagee and the insurer and that, so long as the policy premiums are paid and the mortgagee itself commits no violations, the policy continues coverage. 

While the Minnesota Supreme Court’s opinion rejected the full argument presented by both Commerce Bank and West Bend as the insurer, it made some important holdings that resulted in a cautious but definite victory for lienholders:

“When a property insurance policy contains both a vacancy clause and an standard mortgage clause, a mortgagee (loss-payee) has coverage for vandalism damage to a vacant building only if the building was vacant because of the “acts” of the owner or if the owner “failed to comply with” the policy terms, and the mortgagee was unaware of such acts or failure.” (emphasis added)

The important points recognized by the Court include:

  • That Commerce Bank has a separate and independent insurance policy with West Bend, which includes a standard mortgage clause, which entitles it to coverage when West Bend denies a claim because of the owner’s act or breach of the policy terms; and
  • Recognition that a mortgagee has coverage if there is a vacancy because of the acts of the owner, with the caveat that if the vacancy is not due to the acts of the owner, the mortgagee does not have coverage.

The Minnesota Supreme Court remanded the case back to the District Court, to determine whether the building being vacant was in fact caused by the property owner, and if so, if Commerce Bank knew about the vacancy.

For additional details regarding the case, see the March 4 issue of the Pulse. The full opinion issued by the Minnesota Supreme Court can be found here.  If you would like any additional information regarding the case, please feel free to contact VP & General Counsel John Wendland, or Associate General Counsel Lyndsay Miller


Complementary PolicyAid Access available for 2016

We are excited to announce that effective in 2016, the Minnesota Credit Union Network (MnCUN) has partnered with PolicyWorks to provide your credit union two new Compliance and Education value-add benefits. These programs will be an expansion of our dues-based services.

Compliance: All MnCUN member credit unions will receive complimentary access to PolicyAid - an online policy resource which contains over 80 sample policies, and is updated quarterly to help you keep your policies current. Policies are amended on a quarterly basis based on regulations, Letters to Credit Unions, AIRES questionnaires, and best practices.

Education: The Network will also deliver two complimentary compliance training webinars through our partnership with PolicyWorks. These trainings are valued at $250 each.

We look forward to this exciting new partnership to meet the ongoing compliance needs of Minnesota credit unions, and provide additional value for your dues dollars. Watch for more information about access credentials coming soon.


Minn. Credit Union Foundation Donates $1,000 “Kick off” Prize to WINcentive™ Savings Statewide Pool

The Minnesota Credit Union Foundation has donated $1,000 to help Minnesota Credit Unions kick off WINcentive™ Savings in big way. The $1,000 prize will be awarded February, 2016 – in the very first WINcentive™ drawing. Credit unions can sign up now to begin offering WINcentive™ after January 1, 2016.

“The Foundation believes that the WINcentive™ product is both good for consumers and credit unions,” said Minnesota Credit Union Foundation Chair, Dave Larson. “It’s a unique, beneficial savings product that truly demonstrates the credit union difference. The mission of the Foundation is to provide resources for credit unions and communities to prosper and thrive, and we feel supporting the WINcentive™ Savings prize pool does just that.

When your credit union provides WINcentive™ Savings – members receive prize drawing entries each time they increase their savings balance by $25 (up to 4 entries per month). Prize drawings occur from a state-wide prize pool monthly, quarterly and annually. The $1,000 kick off prize winner will be drawn from members that qualify for entries in January, 2016. 

The WINcentive™ Savings account is designed to help your members improve money habits in a whole new way that actually makes saving FUN. Members feel rewarded by watching their savings grow, and experience the excitement of frequent prize drawings.

Prize-linked savings accounts like WINcentive™ improve the financial stability and savings habits of consumers, particularly those considered financially vulnerable. They have been a gate-way to using traditional financial products, instead of payday lenders and pawn shops. And, unlike playing the lottery, there is no loser and no risk – the real benefit is SAVINGS.

Research has proven a credit union benefits by offering these accounts as well. When launched in other areas of the country, credit unions have found they were able to attract new members and further engage current members. They gained core deposits, and discovered new cross-selling opportunities - particularly auto and personal loans.

Your investment in WINcentive™ gives your credit union access to a fully developed program that is easy for your staff to implement. For more information about how your credit union can offer WINcentive™ Savings, visit our website or contact Ryan Smith at or by phone (651)288-5533 or (800)477-1034.


Minn. Credit Union Foundation Financial & Audit Professionals Grants Available

With the support of a generous contribution from Rich Gabrielson, certified public accountant (CPA), the Minnesota Credit Union Foundation (MnCUF) has established the Financial & Audit Professionals Grant Fund. Gabrielson retired from CliftonLarsonAllen, LLP at the end of 2013, after working with Minnesota credit union supervisory committees, boards of directors and management throughout his 36-year career. Financial & Audit Professionals Grant applications are being accepted through Nov. 30, and grant recipients will be selected by the MnCUF Board in December.


Funding from the Financial & Audit Professionals Grant program is intended to cover or defray the costs for credit union professionals and/or volunteers to attend timely and accurate educational events, conferences and seminars on financial and audit-related topics. Reputable course providers include, but are not limited to, the following:

  • American Institute of Certified Public Accountants (AICPA) Credit Union Conference
  • Association of Credit Union Internal Auditors (ACUIA)
  • National Association of Credit Union Supervisory & Audit Committees (NACUSAC)
  • Credit Union National Association (CUNA)
  • Minnesota Credit Union Network (MnCUN)
  • Credit Union Executive Society (CUES)

Gabrielson’s contribution provides up to $2,000 in annual grant funding. Grant recipients will be notified within two weeks of the MnCUF Board’s selection. Grant funds must be used by Dec. 31 of the following year, and recipients must submit proof of registration and the grant follow up form. Additional information can be found on the Financial & Audit Professionals Grant page of MnCUF’s website.


Register now to receive your free chain of hearts materials

The Minnesota Credit Unions for Kids (MnCU4Kids) Committee invites credit unions to participate in the annual Chain of Hearts campaign. The Chain of Hearts is a statewide fundraiser that will run from Jan. 11 to Feb. 26, 2016. All proceeds benefit Gillette Children's Hospital, which helps kids with disabilities and chronic conditions. Gillette is based in St. Paul, with numerous clinics around the state.

To participate in Chain of Hearts, credit union members purchase paper links and hearts that are connected and hung in lobbies to help illustrate the "people helping people" philosophy of credit unions. 

To participate, complete the fundraiser registration survey by Friday, December 11. 

Participating credit unions can also apply for a Miracle Match from CO-OP Financial Services. With questions about this fundraiser, contact MnCU4Kids liaison Becky Holst.


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 Communications Specialist Laura Whittet

Mill City Credit Union Opens New Location to Strengthen Local Prosperity

Ideal Credit Union Adopts New Name for Investment Services

Hiway Federal Credit Union gives holiday money savings advice



CULAC tops rankings for trade association PACs  

MnCUN weighs in on requiring “PIN and Chip”

View all Governmental Affairs news stories


NCUA releases new cybersecurity video on FFIEC Cybersecurity Assessment Tool 

CFPB publishes 2016 Rural Counties list

NMLS schedules system maintenance Nov. 7 

U.S. Dept. of Education finalizes new student loan regulations


View all Regulatory Compliance news stories


Economic Outlook Shows Strong Growth in Loans, Savings and Memberships

Credit unions can expect to see strong growth in loans, savings and memberships as the economy continues to experience healthy growth in the coming years, said CUNA Mutual Group’s Chief Economist Steven Rick. This is good news for credit unions looking to expand their reach and services in the next two years, he told attendees of CUNA Mutual Group’s sixth annual Discovery Conference last month.

“The U.S. economy has experienced six solid recovery and growth years that will continue to be above trend in 2016 and into 2017. With the increased consumption spending by consumers, residential purchases and business investments, the economy will continue to trend at a strong 2.8 percent growth rate,” said Rick.1

Coupled with a low unemployment rate of 5.1 percent and steady job growth of more than 2 million jobs into 2017, these indicators translate to a continued 3 percent increase in membership for credit unions, the strongest in a generation.1

As the economy approaches full employment by 2017, wages will rise and consumers are more likely to start spending, translating into increased opportunities for credit unions. Household net worth is at record levels in the U.S., and consumers are more confident, resulting in new demand for lending, credit and savings products. One example of this is the increase in durable goods spending.

“For the last three years, appliance, car, furniture and home improvement purchases were put on hold by consumers. There is now pent up demand for these items that will continue into 2017. This is good news for credit unions, particularly for their lending businesses,” said Rick. “Coupled with the fact that interest rates and oil prices remain low, consumers are feeling better than they have felt in quite some time, and this is resulting in increased spending. The savings and lending growth that we will see in the credit union landscape will be a direct result of this rising economic confidence.”

In his presentation, Rick provided several economic indicators that credit unions should note for strategic planning in the coming years:

Solid growth in new home loans:

  • A shortage of home inventory and a growing demand will create a 9.4 percent increase in new construction.1
  • Current home prices will rise by 4 to 5 percent, as demand grows for the more than 5 million homes on the market each year.1  
  • By 2016, first mortgage loan origination will reach record numbers for both adjustable rate and fixed rate loans, reaching more than $137 billion.1Refinanced mortgages will slow in the coming years and remain at $134 billion in 2017.1

Auto loans stay on the rise:

  • New auto loan growth will remain strong in 2016, but slower than the record 22 percent pace set in in early 2015.1
  • Used auto loan balances will continue to grow at a 14 percent growth rate and will continue for the next three years.1

Savings may slow as spending increases: 

  • Savings growth will slow in 2016 and 2017 from 4 to 3 percent due to potential rising interest rates, and consumers shifting funds to investment alternatives.1

Continued strong membership growth: 

  • Strong job growth will translate into strong credit union membership growth at a consistent 3 percent pace into 2017, due to the growing demand for credit.1

“Bottom line, the U.S. economy will not be experiencing signs of a recession for the next few years,” said Rick. “The economy is growing, inflation remains low, wages are rising, and unemployment is down. These are all indications credit unions have a great opportunity to grow their membership and portfolios of services through the trust they continue to build with their members.”

To learn more about CUNA Mutual Group and the products and services it has to offer your credit union and its members, contact MnCUN Director of Business Development, Kris Jacobsen by email or at (651) 288 - 5515.

1 CUNA Mutual Group’s “Credit Union Trends Report,” Sept. 2015.

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