The Pulse (11-27-13)

The Pulse (11-27-13)

Nov. 27, 2013 ● Volume 02, Issue 47


The Pulse Archive

Credit Union News

New Legislative & Political Advocacy Fund receives MnCUN Board approval

During a recent MnCUN Board of Directors meeting, board members unanimously approved the creation of a new Legislative & Political Advocacy Fund to support the Network’s governmental affairs advocacy efforts. The goal of this fund is to provide resources to help strongly position credit unions on the political front.

The Advocacy Fund will be proactive in nature, aiming to create a strong credit union environment and augment MnCUN’s credit union advocacy efforts. This fund will be used for specific purposes such as:

  • Direct lobbying expenditures
  • Grassroots mobilization and program enhancements
  • Influencing decision-makers through public affairs and public relations efforts
  • Providing Minnesota support to CUNA’s National Advocacy Fund for political, electoral, grassroots, strategic communication and issues advocacy efforts
  • Supporting Credit Union House on Capitol Hill

The Legislative & Political Advocacy Fund is a restricted fund. Expenditures will be governed by a committee of credit unions and MnCUN staff. Credit unions will notice a voluntary contribution item for the Advocacy Fund on their 2014 dues invoices. Going forward, solicitation for this fund will replace that of the Unity Fund, which was established in 2003 to defend against sudden attacks on the credit union tax exemption.

In an effort to streamline fundraising efforts and align requests for contributions to the Advocacy Fund and various other initiatives, this year's dues packets will also include solicitations for two other important entities. For 2014, credit unions will see requests and suggested contribution amounts for the Credit Union Awareness Fund, which supports initiatives of the Awareness Advisory Committee (formerly MNAP), and the Minnesota Credit Union Foundation.

With questions about Network membership, dues invoices or any of these initiatives, contact MnCUN Vice President – Association Services Kristina Wright by email or at (651) 288-5507.

Young professionals learn from credit union leaders during Crew event

Crew members from Hiway Federal Credit Union have fun with the team-building challenges during MnCUN's Crew Professional Development event.
Young professionals from credit unions statewide came together to discover the Minnesota Credit Union Network, learn from credit union veterans and from each other during a special professional development session on Nov. 14 at Dave and Busters in Maple Grove. This unique education and team-building event was hosted by MnCUN for its young professionals group, The Crew. It featured:

  • Credit union leaders who discussed boards of directors and their roles;
  • MnCUN staff who provided an overview of the association, member benefits, and engagement opportunities;
  • Fun networking and team-building activities focused on leadership and problem-solving.

TopLine Federal Credit Union President & CEO Harry Carter, along with Board President Jim Kaster, were on hand to discuss the relationship between the credit union and its board of directors. They shared their personal experiences and thoughts on how the board and the credit union’s leaders work in tandem, striving to create a seamless operating system and a positive public view of the credit union.

"Boards are the face of the credit union to many people. To regulators, they are the window into the credit union,” Carter said. "It’s important, too, that the credit union employees also know who their board members are.”

Fellow Crew member Andrew Johannes also shared his firsthand experiences as the current youngest member and Chairman of St. Cloud Federal Credit Union’s Board of Directors. Using a football analogy, he illustrated the roles of the board, the credit union’s president and regulators. Everyone plays a part for the good of the team.

 "The board members are the coach, the CEO is the quarterback and the government (regulators) are the umpires,” Johannes said. "The credit union employees carry the ball, and you hope, as the coach, that you’ve done everything you can to give them a win.”

In the second education portion of the event, Network staff talked with attendees about ways they can deepen their involvement and engagement in the credit union industry, using MnCUN’s various resources. Vice President – Association Services Kristina Wright, Political Advocacy Director Ryan Smith, Communications Specialist Kelli Sandhurst and Administrative Assistant Lindsey Evans talked about their respective areas, focusing on specific Network offerings and how to use them. The event concluded with high-energy team-building activities that included challenges to encourage attendees to work together and build connections.

"This event was a great way for these talented, young professionals to share experiences with their credit union colleagues, and hopefully offered insights on what they can aspire to within the industry," said Evans, who also serves as staff liaison to The Crew. "We’re currently working on developing more events like this as opportunities for Crew members to learn and grow in their careers."

In 2014, the Network is offering a new Crew Ambassador program. This opportunity includes free registration to all Crew events, exclusive development experience with credit union and Network leadership, the chance to attend CUNA’s Governmental Affairs conference, and more! To learn more about becoming a leader among young professionals and for an application, visit The Crew Ambassador page of the Network website.

NCUA rule to expand requirements on Credit Union Service Organizations

The National Credit Union Administration (NCUA) Board has issued a final rule concerning Credit Union Service Organizations (CUSOs) that expands certain requirements to federally insured state-chartered credit unions (FISCUs). These requirements address accounting, financial statements, and audits. The final rule also expands CUSO reporting requirements and limits the ability of "less than adequately capitalized” FISCUs to recapitalize their CUSOs.

All CUSOs will be required to annually provide profile information to NCUA and, for FISCUs, to the appropriate state regulator.

The final rule requires CUSOs that engage in what NCUA considers "complex or high-risk” activities to report more detailed information, including audited financial statements and customer information. The final rule also requires all subsidiary CUSOs to follow applicable laws and regulations, and applies all of the regulation’s requirements to subsidiary CUSOs.

The NCUA’s definitions of complex or high-risk activities include:

  • Credit and lending: business loan origination; consumer mortgage loan origination; loan support services, including servicing; student loan origination; and credit card loan origination.
  • Information technology: electronic transaction services, record retention, security, and disaster recovery services; and payroll processing services.
  • Custody, safekeeping, and investment management services for credit unions.

The special requirements for a credit union investing in, lending to, or receiving services from a CUSO include:

  • Services provided to each credit union;
  • The investment amount, loan amount, or level of activity of each credit union; and
  • The CUSO’s most recent year-end audited financial statements.

CUSOs engaging in credit and lending services also will be required to report the following activity by loan type:

  • Total dollar amount of loans outstanding;
  • Total number of loans outstanding;
  • Total dollar amount of loans granted year-to-date; and
  • Total number of loans granted year-to-date.

NCUA acknowledged that all federally-insured credit unions with loans to or investments in CUSOs will be required, under the final rule, to make changes in the agreements they have with their CUSOs. The effective date of the final rule is June 30, 2014.

CUSOs must begin submitting reports to NCUA under new section 712.3(d)(4) when the agency’s reporting system is fully operational by Dec. 31, 2015.

The NCUA Board encouraged credit unions to begin discussing the new regulations with their CUSOs. The agency anticipates issuing a letter to credit unions in the near future containing the details. The NCUA letter on the final rule, 13-CU-13, can be found on the NCUA website. The full text of the final rule can also be found on the NCUA website.

Need compliance assistance? Look to MnCUN's Compliance & Audit Services

In today's complex regulatory environment, it can be difficult for a credit union to ensure compliance with the wide variety of rules and regulations. The Minnesota Credit Union Network offers its Compliance & Audit Services to help credit unions meet this challenge and stay abreast of the ever-changing regulatory landscape.

Let MnCUN Compliance & Audit Consultant Marcia Armstrong Lewis help your credit union with its compliance reviews in 2014. Her expertise covers topics such as:

  • Bank Secrecy Act & board training
  • Website & quality assurance
  • Lending (consumer & real estate, including SAFE Act)

MnCUN's Compliance & Audit Services provide options for credit unions to contract with a highly-qualified professional to help fulfill their compliance obligations. Compliance services are customized to each credit union and can be scheduled as a one-time service or on a quarterly, semi-annual, or annual basis.

"Regulations are always changing, making it difficult and expensive for our staff to stay current. Marcia provides knowledgeable expertise and support. She makes sure we are meeting the standards so that we can focus our time and energy on serving our members," said Phil Kopischke, President of SharePoint Credit Union.

For more information, go to the Compliance & Audit Services page of the Network website to watch a webinar that offers an overview of this valuable program. You may also contact MnCUN Vice President – Network Service Corporation John Ferstl or Marcia Armstrong Lewis by email or at (651) 288-5505 or (800) 477-1034.

NCUA says no corporate assessment for 2014

The National Credit Union Administration (NCUA) said it does not plan to charge a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment in 2014. But the agency warned that a TCCUSF assessment may be considered "if adverse conditions develop."

The National Credit Union Share Insurance Fund assessment for 2014 will be between zero and five basis points.

The Credit Union National Association (CUNA) urged the NCUA to set the range for the TCCUSF assessment as narrow as possible. CUNA Chief Economist Bill Hampel broke down what the assessment means for credit unions in a new Inside Exchange piece.

"The assessments are behind us," Hampel said. And what about a rebate? While he advised credit unions "don't count on it too soon," a rebate should be recognized when the TCCUSF expires around the end of the decade.

The NCUA is expected to receive $1.4 billion through a settlement with JP Morgan announced this week. The settlement funds "will greatly benefit credit unions" and "will enable NCUA to greatly reduce the assessments that all credit unions have to pay," NCUA Chairman Debbie Matz said.

Factoring the net proceeds from the JP Morgan settlement, the remaining assessment range falls to around minus $1 billion to plus $500 million, Hampel said. "In other words, future rebates are now very likely," he said.

Credit unions have paid $4.8 billion in TCCUSF assessments since the fund was established. The projected net remaining assessments over the life of the TCCUSF, based on estimates from the second quarter of 2013, now range from minus $0.2 billion to $1.6 billion.

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.

  • Affinity Plus Federal Credit Union names a new President/CEO … more
  • ABC 6 News talks about HomeTown Credit Union’seducation efforts with its student branch at Owatonna High School … more
  • Mid-Minnesota Federal Credit Union names a new Chief Financial Officer … more
  • US Federal Credit Union’s community shred event creates huge environmental savings across the Twin Cities … more


MnCUN, CUNA continue work on tax reform while Congress takes recess

MnCUN presents CFPB Mortgage Rules Summary
CFPB issues final TILA/RESPA mortgage disclosure rules
Federal Reserve System updates Reserve Maintenance Manual
NCUA activates Fixed Asset Rule and waiver
Federal Reserve, CFPB announce dollar threshold increase in Regs Z & M

Out for Comment

NACHA seeking comment on proposals to reduce exceptions on ACH Network

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

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