Please join us Wed., June 22, at 1 PM, for the next webinar in a series that connects the MnCUN Multicultural Opportunity Report with actionable examples for your credit union and your communities to grow and prosper. The webinars are presented by Coopera, a full-service multicultural analytics and consulting firm and you may sign up for individual sessions or for the entire series. Further descriptions of each session are noted below. 

​​​June 22: Opportunities for Credit Unions to Serve Growing Multicultural Populations in MN

This session will provide a further “deep dive” into the financial needs of Mexicans, Hmong, and African Americans – which are the largest growing ethnic groups in Minnesota. We’ll share practical examples of how credit unions can meet those needs via products, community outreach, staff, and more.

August 10: How can we do better? Addressing and closing the Wealth Gaps in Minnesota
Our final session will focus on the current wealth gaps in Minnesota. We’ll take a closer look at our own bias around lending, branding, and risk; and explore practical ways to overcome those biases to improve financial wellbeing for all.

A local filmmaker, Mark Brown, has been working on a documentary about John Whitrock, aka The Fishing Hat Bandit. He robbed 23 credit unions and banks in 18 months prior to being arrested in 2005. Brown is seeking donations to finish the film.

​"The film gives equal weight to the stories of the bank tellers who were traumatized over the course of Whitrock's crimes," said Mark Brown, Director and Producer. "There is a restorative justice aspect to the film that finds some redemption and resolution after all these years, which I hope is the most meaningful aspect of this project, " Brown said.

For more information and to donate, visit: www.thefishinghatbandit.com. Donations are tax deductible through a non-profit fiscal sponsor. You can contact Mark Brown at mark@twintownmedia.com or ​612-244-0098.

Hike the Hill returns in-person to connect credit union representatives with federal legislators and talk about top credit union issues in Washington, D.C. During Hike the Hill visits, credit union professionals and board members meet with the entire Minnesota Congressional Delegation and typically visit the Board members of the National Credit Union Administration.

​​​Meetings will be scheduled on various days during the week of September 19th to allow for maximum flexibility for members of Congress to able to attend. Once meetings have been scheduled, attendees will receive a calendar invitation from Network staff with the exact date and time.

With questions about Hike the Hill, contact MnCUN Director of Governmental Affairs Ryan Smith by email or at 651-288-5533.

The Minnesota legislature adjourned Sunday without passing legislation to enact the agreement between Governor Walz and leaders in the House and Senate that would address the State's budget surplus. The proposed agreement would split the budget surplus into thirds with $4 billion for tax breaks, $4 billion for new spending, and $4 billion left on the bottom line in the event of economic disruptions. 

This article is provided through the Minnesota Credit Union Network's strategic alliance with CUNA Mutual Group. For more details, contact MnCUN Chief Operating Office John Ferstl or visit the Solutions Directory.

​​By Chris Perry, MGIC and Josh Ley, CUNA Mutual Group

​Are you making the absolute most of your ability to portfolio lend? We have already seen a dramatic increase in mortgage rates from the historic lows of the past few years. If rates continue to increase over the next few years, loans will become more expensive for your members – and this will put pressure on your credit union’s growth. It will be important to look at all areas of your balance sheet and find strategies to grow your portfolio. Let’s examine how you can use your first mortgage portfolio products to better serve your current members, attract more new members, and manage your overall capital and long-term interest rate risk. With the 2020-21 markets in the rearview mirror, and considering all the major changes we’ve seen so far in 2022, is now the time to take action? 

2020 and 2021 were outstanding years. According to the NCUA 5300 report, Credit unions experienced record deposit growth – 20.89% in 2020 and 12.90% in 2021. The average deposit per member increased from $10,970 in 2019 to $14,033 in 2021. With deposit growth outpacing lending, the loan-to-share ratio for credit unions dropped from 83.89% in 2019 to 69.86% in 2021. Portfolio mortgages is one direction that credit unions have turned to in order to help raise their loan-to-share. From 2019 to 2021 the percent of credit union first mortgages that are portfolio loans has risen from 38% to 44%.1

As we enter an economic cycle during which the Fed will increase rates over the next few years, it will be important for credit unions to manage their interest rate risk, but at the same time, serve their members. One product that can provide both interest rate protection and reasonably priced loans for members is Adjustable-Rate Mortgages (ARM). 

What is the 2022 mortgage market going to look like? Well, the refinance boom of 2020 and 2021 is over. Volume and margins have been cut in half, if not more. Competition for the remaining purchase business is fierce. To differentiate your first mortgage product offerings, a credit union must utilize its most powerful tool – its portfolio lending capability. Portfolio lending products shouldn’t be used just to close loans for members who don’t fit into standard Agency guidelines, but rather to identify unique borrower needs and proactively meet them with niche programs and loan products. Niche programs can help you earn your current members’ mortgages, as well as earn new members’ mortgages from referral sources in your community (including real estate agents, builders, SEGs, and direct consumer marketing).

What niche programs will help your members the most? Borrowers’ number one impediment to purchasing a home is coming up with the down payment. Most first-time homebuyers still believe they need to save 20% of the purchase price to buy a home. Freddie Mac and Fannie Mae have decent first-time homebuyer programs, but they certainly don’t meet every borrower’s need. Your portfolio program can help fill the voids. Focus on several first-time homebuyer programs that meet those needs.

Another option: The conforming loan limits for mortgages on one-unit properties to be acquired by Fannie Mae and Freddie Mac is $647,200, meaning many lenders won’t lean above that amount or will require higher down payments. This creates a tremendous opportunity for your credit union. You can offer a 97% Loan-to-Value (LTV) or a 95% LTV above conforming loan limits to meet this need. Sound risky? You can have your borrowers pay for Mortgage Insurance (MI), which reduces your exposure below 80% LTV while protecting the membership at large. A true win-win! Plus, MI rates have never been lower and more affordable. 

​Will your members accept ARMs or do they need 30-year fixed-rate loans? If you offer niche programs, you can align your offer with intermediate ARMs, such as a 5/5 or a 7/1 ARM. ARMs can offer your members lower pricing than 30-year fixed-rate loans, or you can align them with other niche programs. Your members will suddenly like your 5/5 ARM because they can’t obtain that program as a 30-year fixed-rate loan, and it can help them buy the home they love.

Where can you obtain these first mortgage originations? This niche program differentiates your credit union’s offerings from other first mortgage lenders your members may be considering. The products mentioned in this article can help you win your members’ loans and earn new member referrals from numerous sources. You can even recruit producing loan officers with unique portfolio offerings.

Like with car loans, numerous credit unions are winning new members and booking mortgages through first mortgage indirect purchase programs from independent mortgage bankers. These are just a few of the ways credit unions can capitalize on their main differentiator (portfolio lending) to earn purchase business in this new market.

Don’t let the new market of 2022 lower your loan-to-share ratio even more! Take action now by engaging your CUNA Mutual and MGIC partners to examine your first mortgage offerings today.

1. NCUA 5300 Report, March 2022

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Corporate headquarters are located at 5910 Mineral Point Road, Madison, WI 53705. 
 
Private Mortgage Insurance is underwritten by Mortgage Guaranty Insurance Corporation.

In conjunction with the debut of a new national creative platform to help move consumers from awareness to action, one of the easiest ways contributing credit unions can connect their marketing efforts to the Your Money Further™ program is by using the social media packs. These assets are available on Contributor HQ for all participants to use in their organic social media channels. Check out the social media packs, which include options for co-branding both graphics and videos.

Make sure to also customize your listing and continue the consumer journey from YourMoneyFurther.com to your credit union’s website. The new YourMoneyFurther.com includes an improved CU Finder and a brand-new CU Matcher to connect consumers.

MnCUN is also rolling out the new creative this quarter in our digital advertising channels; and watch for new Out of Home Marketing and events coming this summer. The ongoing investment Minnesota Credit Unions have made to boost consumer awareness is paying benefits in growth and knowledge of consumers across the state. Minnesota was the first state to launch the national Credit Union Consumer Awareness Initiative in 2019 and since then, has seen both increased average membership growth and consumer familiarity of credit unions.

With questions, please contact Andrea Molnau, VP Communications & Engagement, by email or 651-288-5527.

Learn more about the outstanding programs, new initiatives and well-deserved recognition received by your peers recently:  ​

• RCU Foundation Announces Support for Science and Technology Innovation Center at UW-River Falls,
•  SPIRE Welcomes Baseball Great Tony Oliva as Newest Partner,

• ​ St. Thomas Athletics enters multi-year partnership with Wings Financial Credit Union,

•  TopLine Credit Union Members and Employees Bring Comfort to Those in Need
•  Minnesota Credit Unions Band Together to Offer Commercial Lending, and
•  TruStone Financial Donates $9,000 to Aiding Ukraine.

​
​Got news of your own? Send stories, pitches, press releases and published articles to MnCUN Director of Communications Julia Miller.

Join us Thursday, June 9th, for a presentation on digital assets. The session will feature NCUA Vice-Chairman Kyle Hauptman, who will talk about credit union opportunities and risks related to digital assets (cryptocurrency). This is a virtual event and will allow for questions and discussion with the Vice-Chairman.

​Date: Thursday, June 9,
​Time: 9:30 AM – 11:00 AM 

​There is no cost to attend. Space is limited, please register now to save your seat. Contact MnCUN General Counsel, Tim Tacheny, with any questions. ​

Federal Agencies Update Flood Insurance Q & A: On May 11, the NCUA, OCC, Federal Reserve, FDIC and FCA issued a joint rule updating the questions and answers regarding flood insurance. 

USAA Successful in Another Mobile Deposit Lawsuit: Last week, a federal jury in Texas awarded United Services Automobile Association (USAA) a judgment of more than $218 million against PNC Bank NA