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Liza Gillan, Vice President, Operational Risk & Compliance, Alloya Corporate FCU
This article is provided by MnCUN's relationship with Alloya Corporate FCU. Visit the Solutions Director for more information. Meet the “Sister Swifties,” Lisa, Britney and Carla. As big-time, lifelong fans of the music sensation Taylor Swift, they donned that nickname years ago, long before the artist’s Eras Tour was even a glimmer in their eyes. Naturally, from the moment the tour was announced, they tried desperately to get tickets. When they sold out with unprecedented demand at lightning speed, the Sister Swifties were sadly left empty-handed. Adding insult to injury, Carla’s 16-year-old daughter, Reese, is more obsessed with Taylor Swift than the Sister Swifties combined! She was heartbroken when tickets sold out. As the tour got into full swing and social media exploded with Eras Tour content, Reese grew increasingly devastated at the thought of missing out… until the Sister Swifties hatched a plan.  Medicare is not a "one size fits all" product and during the open enrollment period eligible Minnesotans are inundated with advertising from providers that claim to have the best coverage.
The right choice for your members depends on their doctors, providers, medications, and prescription drugs. As your partner we have the expertise on all seven providers and the process in place to make sure your member is with the provider most appropriate for them. Through this process we are saving members thousands of dollars per year while they are obtaining better coverage then they have currently. TruLync Medicare Advisors invites every Minnesota Credit Union between now and December 31st to meet with the team to learn about partnership opportunities for the upcoming year. Interested in signing up for 2024? Contact Kris Jacobsen, MnCUN Vice President of Business Development by email or phone at 612-244-7138.
By Emily Nadboralski, Director of Data & Analytics, and Vicki Potter, Analytics Consultant, TruStage™. This article is provided as part of MnCUN's strategic partnership with TruStage. For more information, visit the Solutions Directory. In an era dominated by digital advancements, the credit union industry may face a new and intricate battle against predatory lending. Drawing insights from actual credit union data, our goal is to shed light on the specific segments of members who are most susceptible to these lenders. Once credit unions know which members are most vulnerable, they could intervene with tailored product offerings designed to help prevent members from entering a payday lender cycle. The surge of digital predatory lending without regulation The digital revolution is one of the causes of a surge in predatory lending. It has helped to create an environment where certain lenders might take advantage of gaps in regulation and consumer understanding. Practices such as high-interest payday loans, terms that could be confusing, and fees that aren't immediately apparent are among the methods employed by these lenders to attract borrowers. As an example, the annual percentage rate (APR) of a typical two-week payday loan with a $15 fee per $100 borrowed is 391%. [1] The situation has become so severe that some U.S. states have enacted a 36% interest rate cap for payday lenders and 12 states have banned them altogether.2 Payday lenders have expressed concern that the cap will not permit them to continue conducting business in Minnesota, as an example, which they claim will encourage prospective borrowers to pursue loans via unregulated online marketplaces.2 However, research indicates a substantial decrease in payday loans and borrowers pursuing online loans within regulated states.2 Additionally, more than 80% of borrowers have expressed they would be more cautious with their expenses if payday loans weren’t available. [2] Even with regulation in place, the magnitude of existing and estimated future payday lending growth is still prevalent. In 2021, the Payday Loans market had an estimated worth of approximately $33.5B and this is projected to increase to $42.6B by 2028. [3] Shedding light on vulnerable segments With the shift to the digital realm, payday loan providers can now greatly expand their outreach, encompassing a wider range of consumers. It is more probable that low-income households and communities of color will be targeted by payday lenders.2 Vulnerable members may choose a payday loan over their credit union because they may feel embarrassed displaying their current financial situation. Beyond the emotional strain, members may turn to digital payday lenders because they feel it's their only option. Thankfully, data has emerged as a powerful tool in the fight against predatory lending. By leveraging data analytics and technology, credit unions can gain valuable insights into their members' financial behaviors, helping enable them to identify signs of susceptibility to predatory lending and take proactive measures. Thankfully, data has emerged as a powerful tool in the fight against predatory lending. By leveraging data analytics and technology, credit unions can gain valuable insights into their members' financial behaviors, helping enable them to identify signs of susceptibility to predatory lending and take proactive measures.
Strategies for supporting vulnerable members Credit unions can proactively identify members who could benefit from support by collaborating with them when they seek assistance. They can also explore opportunities by examining Automated Clearing House (ACH) deposits from payday lenders into members' accounts, with the members' consent. This isn't always one large deposit; it can be small deposits from multiple payday lenders. Once identified, credit unions can extend a helping hand by offering to help pay off the loans and get members into better financial security. Through this approach, credit unions achieve two benefits. First, by helping members improve their financial situation, they may cultivate a sense of loyalty among members who develop a strong trust in their credit union. Second, they may enhance their earnings through increased interest generated by loan repayment products. The path forward The digital transformation of the lending landscape has great benefits, but it has also opened the door to predatory lending practices. Credit unions, with their member-centric approach, are well-positioned to leverage data to help protect their members from falling victim to predatory loans. By harnessing the power of data, credit unions may help identify signs of predatory lending and take proactive steps to educate, intervene and offer dignified financial services with members’ best interest in mind. [1] United States Federal Trade Commission, “What to Know About Payday and Car Title Loans”, July 2023 [2] Minnesota Reformer, “Payday Loans Trap Minnesotans in a Cycle of Debt”, March 2023 [3] Vantage Market Research, “2022 Statistics: Payday Loans Market Will Surpass USD 42.6 Billion at 4.1% CAGR Growth: Vantage Market Research”, May 2022 The global pandemic set into motion a series of historically unprecedented economic policies. Massive amounts of liquidity and stimulus from policymakers enabled a fast recovery, but at what financial cost? The side effect of those "easy money" conditions has been 40yr-high inflation that now must be fought through highly restrictive Fed behavior. Balance sheet managers have been left to deal with the resulting large swings in interest rate and liquidity risks. Quickly increasing cost of funds, stubborn loan rates, and ever-tightening margins are just a few of the most common worries for 2023. More than ever, it is critical that credit union leadership take a whole balance sheet approach, as understanding and utilizing wholesale markets (asset and funding) could significantly reduce some of these pressures.
Thursday, October 12, 2023 10:30 a.m. CDT Free of Charge This webinar will examine the challenges now faced by CEOs, CFOs, and investment officers who must navigate the next phase of these uncharted waters. Offered exclusively to Minnesota credit unions and credit union service organizations, the Minnesota Credit Union Benefits Plan harnesses the collective buying power of our members to gain access to more affordable and flexible health insurance.
The plan offers secure and stable rates through Medica, the largest health insurance network in the country. Members are given a designated Account Manager through Capstone Administrators to answer all of their plan questions. Learn more about the included benefits.
 They say the first step to any meaningful journey is the hardest. However, innovation and evolution are necessary steps to future-proofing your lending business, especially for smaller credit unions. The good news is that not only is it possible for small credit unions to adopt smart, inclusive, efficient AI credit underwriting, but it is well worth the effort.
Join your guides at Zest AI and First Flight Federal Credit Union in North Carolina —a $227M asset-size credit union serving over 18,000 members — as they share:
Join the discussion and the adventure with:
 This fall, TruLync Medicare Services is working with 6 credit unions during Medicare Open Enrollment to help their members sign up for Medicare.
Medicare can be an overwhelming and confusing process. And with 20% of credit union members aged 65 or older, we are excited about this opportunity to provide trusted guidance through this new program. Dave Brown, MnCUN Director of Insurance Services, has 15 years’ experience assisting and advising others with finding a suitable Medicare plan. To work with TruLync Medicare Services starting in 2024, contact Dave at dbrown@mncun.org. |
The PulseThe Pulse is MnCUN's newsletter that keeps credit union professionals and board members updated on current news and information. Archives
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