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Q1 2012 LSCU Signal Magazine


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  • 1. The Magazine of the League of Southeastern Credit Unions Spring 2012PlusElder Financial AbuseA Credit Unions Role in PreventionCooperativeImage CampaignResults Show Gaining Traction PAC Fundraising Cooperative Initiatives Education Why It’s Important to Support ABC’s of Money Management Improving Cross-Sales
  • 2. Leveraging Buying PowerCredit unions have more leverage through innovative and collaborative purchasingplatforms that allow strategic and collective contract negotiation, saving your creditunion, regardless of asset size, significant time and money.ePurchasing Saves Credit UnionsTime & MoneyEvent Example & Results Commodity: Armored Car ServicesCredit Union Participants: 7 Prior Year Spend: $1,909,789 Competition: 6 Suppliers Average Save: More than 21%“They made the process More than 60 Bids Were Received within a 30-Minute Purchasing Event for Janitorialso easy and took care of Services that Resulted in a 40% Savingseverything for us.”Cindy Barco, President Credit Unions Participating in aManatee Community FCU Computer Equipment Group Purchasing Event Saved an Average of 23% “I won’t purchase another contract without it.” Dennis Holthaus, CFO Achieva CUThe ePurchasing platform is conducted in either a single or collaborativeenvironment and requires no long-term contract commitment to participate in anevent, purchasing details do not need to be identical to those of other participants,and each participating credit union remains in charge of making decisions on theirbusiness throughout every step of the process. 866.231.0545 | |
  • 3. LSCUMessage from the President The first quarter of every year is probably the League’s busiest for two reasons: we want to hit the ground running on our established priorities;and it’s affiliation season. Over the past two-and-a-half years, League staff has worked hard to hone our listening skills to ensure we are respondingto the needs of our member credit unions. It’s important for the LSCU & Affiliates to be flexible to shift the strategic direction of the organization,allowing us to respond to the ever-changing economic and political environment which credit unions are facing. For all of us to not only survive butthrive, we must find ways to become more efficient by cutting down on duplication and waste within the system. I am specifically talking about CUNAand the leagues. I always remind my staff it’s not our money, it’s the credit unions’ money. The Alabama and Florida Credit Union Leagues and their member credit unions were ahead of their time when they approved the consolidation of thetwo organizations. We have seen more league consolidations across the country in the past couple of years, with several more under discussion. Basedon the feedback of our member credit unions, we can clearly say our consolidation is working. From what I know now, the two leagues simply could nothave continued down the road they were on if they wanted to provide the level of service and representation our credit unions need and deserve. You may not know it, but the LSCU budget has not increased since the consolidation. Our management structure has been flattened, and we’retightening our belts, just like all of you during the economic downturn. As I interact with my colleagues, many state leagues are struggling withaffiliation and many are having trouble responding to the needs of their members, creating a vicious cycle of disaffiliation issues. While the lack ofresources hampers some leagues, I simply think willingness to self-sacrifice for the good of membership hampers others. Some credit unions havetalked to me about their displeasure with CUNA and the requirement that credit unions must belong to the league and CUNA or neither. CUNA needsto look at its structure and find ways to streamline its operation for what credit unions need today and tomorrow, versus a model that may haveworked 20 years ago. Our industry needs to have a fundamental, open conversation about the future of our industry. It’s something I bring up often when speaking atCUNA and the American Association of Credit Union League (AACUL) meetings. CUNA and other system partners are working on a strategic plan forthe credit union movement as a whole, but there are things that need to be addressed as we go forward. We have two national trade associations.We should explore how we can bring CUNA and NAFCU together to have one unified message on the national level. Aren’t we fundamentally workingfor the same end result? This doesn’t need to be driven by the trades, but by credit unions. CUNA, NAFCU, and the leagues are providing education,compliance support, and communications−among other things−to our members with new competitors always entering themarketplace. Doesn’t it make more sense for us to divide up these roles and responsibilities instead of justduplicating product and service offerings? We have far too many credit unions letting the few do all the work. That needs to changeif we want to perfect change for our industry and protect our tax exemption. Every creditunion needs to ask themselves, “What am I doing to advance the cause of thecredit union movement? Am I going to Washington, D.C. and Tallahassee orMontgomery, lobbying lawmakers on issues of importance to the industry?Am I personally giving to the LSCU FedPAC? Is my credit union raisingmoney for the PACs? Does my credit union support the CooperativeImage Campaign?” I will continue to raise system structure issues because I believeit’s fundamental to the future of the industry and how CUNA andthe leagues serve and represent America’s credit unions. Butbefore you question the structure and value of CUNA and theleagues, please, get involved in helping shape our future.Patrick La PinePresident & CEOLeague of Southeastern Credit Unions
  • 4. Table of Contents 3 President’s MessageEditorAmy Jowers 6 Feature ArticleContributorsBill Berg Cloud Technology & Credit UnionsMike Bridges Cloud technology can help credit unions improve internalJason Cochran processes and external results such as better utilization ofJoseph Davis resources, decreased IT workload, reduced amount of physicalMary Elicia Del Santo hardware, simplification of data storage and server space, and muchKeith Hopkins more. Find out what to look for when exploring cloud-based solutions.Jared RossLaura VannBlake WestbrookAdena Whitman Elder Fiancial Abuse Prevention Elder financial abuse continues to be the “Crime of the 21st Century.” A credit union’s early intervention can not only be a saving grace for your elder members’Production potential financial demise, but a proactive step in loss prevention for your creditDetra White union. Learn about how to develop and implement policies and procedures thatApril Banta provide staff guidelines to handle and respond to all types of suspicions.Letters to the editor may be submittedat 10 Advocacy 2012 Alabama & Florida Legislative Session Update Washington Perspective from John McKechnie 16 LSCU Legislator Profile John McKechnieComing SoonThe Power of One –June 2012 Highlights 6 | Trends 10 | Advocacy 19 | Compliance A credit union’s early intervention of elder financial Credit union leaders should be active, informed, NCUA Letter 12-CU-01 addresses regulatory abuse can be a saving grace for its elder members’ and involved in grassroots efforts to keep MBL, concerns such as lending trends, interest rate potential financial demise and a proactive step in supplemental capital, examination fairness, and and liquidity risks, and more, for credit unions loss prevention for its credit union. tax reform live topics on Capitol Hill. in 2012. 4 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 5. 19 Compliance 2012 Regulatory Concerns 22 Cooperative Initiatives In-School Branches Teach the ABCs of Money Management 25 Foundation “Leave-Behind” Project Touts “People Helping People” Philosophy 26 Education Improving Cross-Sales: A Matter of Hill, Will, & Skill Implementing a dynamic coaching program is part of creating a successful sales and service culture in your credit union. The other parts to such success include: training, tracking results, and sales and service champions. Southeast CUNA Management School: A Rewarding Experience LSCU Learning Opportunities for April-June 30 Communications Cooperative Image Campaign Gaining Traction 31 League News Florida State GAC Discuss Credit Union Issues with Legislators SAS Workshop: “Best, Most Informative SAS Conference” 32 Industry A Case Study: Utilization of Portfolio Management Solutions to Increase Debit Interchange Revenue 34 LEVERAGE Assessing & Implementing Compliance Solutions Overcoming the Challenges of Financial Institutions for 2012 38 LSCU Staff DirectoryHighlights22 | Cooperative Initiatives 25 | Foundation 30 | CommunicationCredit unions across the country are moving SECUF has partnered to complete a “leave-behind” The Cooperative Image Campaign results showmoney management into the classroom. See how project in Tampa near the Republican National credit union awareness is gaining traction withAlabama and Florida credit unions are doing so Convention site. The project is to tout the credit union a small lift in credit union awareness after thewith in-school credit union branches. motto and to raise credit union awareness at the RNC. campaign’s 4- 6 week run in September. SIGNAL: Vol. 3, Issue 1 5
  • 6. TREND HowCloud Technologyis Improving the Way Credit Unions Do BusinessJoseph Davis, coordinator, Communications “We operate in the cloud.” “Let’s move it to the cloud.” “The companies run a subscription model where software is run on cloud should definitely be utilized.” These are phrases you may third-party servers (called single-tenant or hosted). Numerous have recently heard more often, but what does it all really mean? other companies operate where one copy of the software is For many, this is mindless geek-speak, for others the term “cloud” viewed and accessed by multiple users which are then shared means a significant shift in considering how to best deliver (called multi-tenant). services to members more efficiently. A good example of a multi-tenant process is to think of the search Let’s be more specific. When someone refers to “cloud company Google. Think of when you do a Google search. No matter computing,” they’re referring to the opportunity to store or access how many times the Google homepage changes, all users see the information stored on third-party servers, or offering alternate, same content. This allows software vendors (ex. Google) the ability to scalable hardware solutions for existing applications software. It’s also make one change to software which is then reflected to all end-users. seen by some as a marketplace of application software, for individual This frees up IT staff to focus on other projects instead of patching smart phones to large commercial applications (Source: Members software issues frequently. Development Company). Recently, there has been a noticeable movement of more Cloud computing is also a general term for anything that involves credit unions integrating cloud-based solutions into their everyday delivering hosted services over the Internet. These services are operations. “Many credit unions have begun bringing in cloud broadly divided into three categories: Infrastructure-as-a-Service functions for human resource management such as payroll, customer (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service relationship management (CRM) functions, and office automation (ex. (SaaS). The name cloud computing was inspired by the cloud symbol Google apps, Microsoft Office 360),” said Members Development that’s often used to represent the Internet in flowcharts and diagrams. Company Senior Advisor Brian Sommer. “We’ve also seen something Ultimately, we can describe the goal of cloud-based technology as the really fascinating with how many credit unions are already using social process of connecting private and/or public data to users. Now with cloud computing generally defined, let’s talk about what cloud-based technology means for you, and how it affects your credit union. Credit unions are facing a myriad of challenges day-to-day – like many financial institutions – and implementing emerging business trends has become more of an integral aspect of success. For instance, credit unions are feverishly trying to monitor the rise of new technologies and solutions, large- scale economic forces, competition and innovation, as well as an ever-changing workforce and staff. All of these challenges make way for a renewed perspective on how to do business and better serve members. Cloud computing and cloud-based solutions have rapidly evolved into a technology that companies rely on to improve internal processes and external results. Many 6 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 7. media and mobile applications, which the penetration for both is quite cloud,’ there are many different clouds and cloud providers. It’s alsohigh within the credit union industry.” important that credit unions understand the environment they’re Imagine the various areas of your credit union where cloud getting into when considering cloud-based technologies.”solutions can impact: auto loans and quotes (online application Here is what credit unions should examine when exploring cloud-and verification), financial management (online management and based solutions:advice), account management (opening accounts, information • Cost (hardware, software, savings)upload), recruiting (interviews, social media), sales and marketing • Internal system and infrastructure knowledge (IT staff or(customized messaging), and most importantly customer service technology group)(online help, CRM). • Flexibility of members and staff capability (transactions, Here is more of an idea of what cloud solutions can do for your applications, tasks, less time consumption)credit union: • Security (data, private, and member information) • Help better utilize credit union resources • Privacy (credit union users and members) • Decrease IT workload and transfer low-value work • Cloud provider and service level of provider (failover data (maintaining, patching software) center, location of data center, who owns data, credit union • Reduce physical hardware control over operations) • Make managing processes easier by consolidating efforts on Keep in mind that these are a few common concerns, and a single server depending on how your credit union deploys cloud-based technology, • Increase financial savings through resource allocation there may be other concerns to evaluate. • Simplify data storage and server space Of all the questions you should ponder when asked about how • Improve storage backup and failover capability you’re approaching cloud technology, ask yourself this: are you willing Without a doubt, you can immediately recognize the impact and to become an innovator, adopt technologies that enhance business, orbenefits associated with cloud-based technology in credit unions. are you lagging behind due to unwillingness to break from traditionalMany credit unions that are not currently implementing cloud solutions business practices and processes?are still considering the value added in terms of operations and *Look for part two of this article from Members Developmentinternal credit union functions. Company Senior Advisor Brian Sommer in the second quarter issue Grow Financial Federal Credit Union SVP, Network Services James of Signal Magazine. ■Stock said of cloud computing, “there is a lot of value in cloud-basedtechnology in terms of storage, external filing, and archiving of email.”He points out although Grow Financial does not yet use cloud-basedsolutions, it would eventually help provide a practical and increaseduse of storage, improved web collaboration (think WebEx), as well asreduce the need for excess use of infrastructure and internal hosting. The next question you’re likely to ask is whether there aredrawbacks or concerns when implementing cloud solutions? Riskmitigation is the first focus when most credit unions consider cloudsolutions Sommer says. “It’s important to note there is no ‘singular SIGNAL: Vol. 3, Issue 1 7
  • 8. TRENDA Credit Union’s Role in PreventingAmy Jowers, director, Information Services According to The MetLife Study of Elder Financial Abuse: elder • Severely impaired individuals are also less likely to take actionfinancial abuse continues to be the “Crime of the 21st Century,” one against their abusers as a result of illness or embarrassmentthat is often at the heart of other forms of elder mistreatment. Most • Abusers may assume that frail victims will not survive longcases of abuse, 51 percent, are perpetrated by strangers, with close enough to follow through on legal interventions, or that they willfamily and friends accounting for 34 percent. It is estimated that the not make convincing witnessesannual dollar amount loss by victims of elder financial abuse in 2010 • Some older people are unsophisticated about financial matterswas $2.9 billion, a 12-percent increase from 2008. • Advances in technology have made managing finances more The National Adult Protective Services Association (NAPSA) defines complicatedelder financial abuse as the “illegal” or improper use of an elderly Financial institutions are the first line of defense in spotting elderperson’s funds property or assets. The Metlife study found that such financial exploitation and elder identity theft. Credit unions can helpabuse typically falls into three types of crimes: occasion, desperation, elder members to navigate the steps necessary to stop the fraud andand predation. Why do the elderly (most commonly women) make repair the damage.attractive targets for these types of crimes? The Credit Union’s Role • Persons over the age of 50 control more than 70 percent of Identify those at risk. Early intervention can result in loss prevention the nation’s wealth for your elder member and your credit union. If you do suspect abuse • Many seniors do not realize the value of their assets on an elder member, protect them from the fraud and take necessary • They are likely to have disabilities that make them dependent action. A credit union should develop and implement policies and on others for help. These “helpers” may have access to homes procedures that provide staff guidelines to handle and respond to all and assets, and may exercise significant influence over the types of suspicions. older person Develop relationships with social service providers and law • They may have predictable patterns (e.g. because older enforcement so they will be in place before a suspicion or concern people are likely to receive monthly checks, abusers can comes up. In many cases, credit unions serve several cities and predict when an older people will have money on hand or counties. Locate the various providers and law enforcement in need to go to the bank) each area as the organization names may vary. Formalize these ea relationships by connecting with the contact at each organization re and providing the agency your contact information as well. Use the a National Elder Care Locator ( N public/index.aspx) to find the appropriate agency for your area. Take p it a step further and have, on hand, the forms/paperwork needed by these agencies as well as samples of these forms filled out to b keep in your policies and procedures for this type of event. When ke in doubt, report the suspected financial elder exploitation. When an incident occurs—even in doubt—report to, and cooperate with inc the agencies. Suspicion, not proof, is adequate. It is the job of the th agency/law enforcement to act upon your reporting. ag Another form of reporting this type of abuse is a suspicious activity report (SAR) by including the term “elder financial ac exploitation” in the narrative portion of all relevant SARs filed. ex The potential victim of elder financial exploitation should not Th be reported as the subject of the SAR; rather, all available b information on the victim should be included in the narrative i portion of the SAR. p Also, train employees about financial exploitation so they can recognize and take action, utilizing the policies and 8 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 9. Elder Financial Abuse procedures you have in place. Designate a staff person whom employees must notify when they suspect suspicious activity and make sure procedures include Elder Financial protocol for this type of reporting. Last, but not least, educate members. Put a “senior club” in place, provide Abuse Red Flags informational flyers in branches, or include statement stuffers with elder • Numerous new withdrawals or large financial abuse tips/red flags; anything that would help protect members from withdrawals in round numbers when becoming victims. such are inconsistent with member’s General Guidelines banking practices Below are general guidelines to follow when confronted with a situation that appears to be a case of elder financial abuse. • Withdrawals made from savings or • Ask questions about the suspicious transaction to understand the CDs, despite penalty assessments reason for it • Elder member mentions reason for the • Assess whether the member understands the proposed transaction transaction that doesn’t make sense or • Suggest a cashier’s check, a POD account, direct deposit/automatic bill sounds suspicious pay, or a “protected account” • Warn about the danger of carrying large amount of cash • New authorized signers on accounts, • Look for signs of confusion or fear i.e. “new best/boy/girlfriend” • Try to separate elder from predator • Signature on check looks different/ • Contact security or law enforcement forged; out-of-sequence check • Collect evidence, i.e. surveillance to prove who accompanied the elder, numbers (stolen checks) description of suspicious person • Unexplained changes to the powers-of- Early intervention can result in loss prevention attorney/beneficiaries/trusts for your elder member and your credit union. • Changes in property titles, quitclaim Develop and implement policies and procedures deed, or mortgage that provide staff guidelines to handle and • Unpaid bills respond to all types of suspicions. • Changes in elder’s appearance or behavior Credit unions are uniquely placed to identify when members are possible • A relative or caregiver who seems victims of financial exploitation. Credit union staff are usually familiar with their overly controlling while accompanying elder members that visit their branch and have a better opportunity to recognize if the elder one is in distress or conducting a transaction(s) in an out-of-the-ordinary way. Be sure to have an up-to-date and complete section on elder financial abuse in your Source: The National Committee for the policies and procedures manual to ensure your elder members do not fall victim to Prevention of Elder Abuse (NCPE A), such abuse. ■ Metlife Mature Market Institute© (June 2011), The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders. Available from Kohlmann, Luann S. (2012). Webinar: Identifying & Preventing Elder Financial Abuse. [PowerPoint slides] SIGNAL: Vol. 3, Issue 1 9
  • 10. ADVOCACYAlabama2012 Alabama Legislative Session UpdateJason Cochran, director, Legislative Affairs (AL) With the 2012 Legislative Session in Alabama just over one month We have yet to see a bill on reducing the right of redemptionold, the following are the events of the session and the status of LSCU period introduced and at this point in the session, it does not appearpriorities, thus far. there will be one. The Alabama Bankers Association (ABA) has Public deposits for credit unions have dominated the LSCU’s typically taken the lead on this issue with support from the League,communications and will continue to do so throughout the remainder but in discussions with them in the past week, they want to hold offof the session. SB 299 by Sen. Bill Holtzclaw (R-Madison) and HB on introduction due to a large amount of legislation that is shifting315 by Rep. Mike Ball (R-Huntsville) allow federally insured credit priorities for 2012. We are currently working with the ABA onunions in Alabama to become qualified public depositories under the amending or defeating legislation that duplicates the federal moneySAFE Act. While this issue is fairly simple from a policy standpoint, ithas generated quite a bit of controversy for various political reasons. Public deposits for credit unions haveObviously, banks do not want to share any part of this $10 billionbusiness in Alabama, and so far have done all they can in order to dominated our e-Signal submissionsstop any ability for movement. Stories that have been relayed to the and will continue to do so throughoutGovernmental Affairs team are certainly interesting and legislators the remainder of the session. session. sare feeling the pressure from both sides on the issue. It is important CONTINUED ON PAGE 12for credit unions to keep the pressure on members of the Senate andHouse of Representatives and explain the good that can come out ofthe passage of this legislation. Competition is never a bad thing, andeveryone wins if this legislation becomes law. We expect to have ahearing on this legislation the week following the Alabama State GACin Montgomery on April 4-5, so it has never been more important forall of Alabama’s credit unions to travel to Montgomery and speak totheir legislators during this event. 10 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 11. Florida2012 Florida Legislative Session Wrap UpJared Ross, director, Legislative Affairs (FL) The 2012 Florida Legislative Session was dominated by four continues to work on members throughout the session to let themkey issues: redistricting, budget, destination resorts (gaming), and know how important this issue is to municipalities and creditpersonal injury protection (PIP) reform. While many other legislative unions. A lot of progress was made between the vote on this billissues were heard during the session, none grabbed nearly as and the end of session, and we are hopeful this issue can passmany headlines as those four. In all, 2,052 bills were filed in the during the 2013 Session.2012 session, 588 passed the chamber they were originally filed Another important issue to the League is helping to fix thein and 292 passed both chambers identically and will head to the mess that has been created by the current foreclosure laws ingovernor’s desk. Many of those 292 were local bills (42), joint Florida. Several bills were filed during the 2012 Session thatresolutions (5), claims bills (11) and memorials (6). would have helped expedite The League’s top priority for 2012 was once again to pass n the foreclosure process in CONTINUED ON PAGE 12legislation that would allow credit unions to become qualified Florida, but none receivedpublic depositories in Florida. HB 669 was filed by Rep. Jason ep. as much traction as HBBrodeur (R-Sanford) and SB 936 was filed by Sen. Chris Smith hris 213 by Rep. Kathleen(D-Ft. Lauderdale). This bill would have amended chapter 280 of apter Passidomo (R-Naples)Florida Statutes to include credit unions in the definition of qualified ion and HB 1890 by Sen.public depository, thus, allowing municipalities a choice of where ce Jack Latvala ( deposit their money. The League’s Florida Governmental Affairs mental Petersburg).(GA) team worked tirelessly with legislative leadership to ensure pthis bill would be filed and secured a hearing early in the 2012Session for the House version of the bill. Before a vote on the eactual bill was taken, an amendment was offered by Rep. JohnWood (R-Haines City), which would have required any credit union ychoosing to become a public depository to waive their immunity rfrom taxation. The League vehemently opposed thisamendment and the amendment was defeated by avote of 7-8. While the GA team worked to securevotes on the bill up until the final seconds, thebill was defeated by a close 7-8 vote. Voting forthe bill were Reps. Mack Bernard (D-West PalmBeach), Rachel Burgin (R-Riverview), Janet Cruz(D-Tampa), Bill Hager (R-Boca Raton), Clay Ingram(R-Pensacola), John Wood (R-Haines City), andRitch Workman (R-Melbourne). Voting againstthe bill were Rep. Ben Albritton (R-Bartow), JimBoyd (R-Bradenton), Doug Broxson (R-Pensacola),Daniel Davis (R-Jacksonville), Evan Jenne (D-Ft.Lauderdale), John Patrick Julien (D-North MiamiBeach), Bryan Nelson (R-Apopka), and RichardSteinberg (D-Miami Beach). With the defeat ofHB 669, the public deposits issue was dead forthe 2012 Session; however, the League’s team SIGNAL: Vol. 3, Issue 1 11
  • 12. Alabama Legislative Session (Continued)laundering statute by placing it in Alabama’s code and legislation that the 29th and 30th legislative days. The leadership is hoping to haveis overreaching and deals with mortgage satisfaction. all the details worked out by then, but if not, redistricting could be In other legislative activity, look for the Education Trust Fund addressed in another special session or in 2013. The 2014 electionsBudget (ETF) to be passed with little complications during the regular in Alabama will be significantly affected by the new lines and voterssession and, unless something changes, a special session to be could see themselves having to make tough choices depending oncalled toward the end of the fiscal year on the General Fund Budget. where the lines end up.The idea behind waiting for the General Fund Budget is that revenue As always, LSCU will continue to keep you updated on anyprojections could possibly be better by September or additional developments on public deposits or other legislation that is of interestone-time money may be found. Also, there are plans for a five-day to Alabama credit unions during the 2012 Session. ■special session to redraw the state House and Senate seats betweenFlorida Legislative Session (Continued)This bill would have helped speed up the foreclosure process by Another of Gov. Scott’s priorities was PIP reform, the no-faultproviding a new procedure for determining whether a property auto insurance issue. The Senate and House passed competinghas been abandoned and establishing an expedited process for bills, but on the final day of session Friday, the Senate narrowlyforeclosure proceedings on those abandoned properties. While acquiesced to a watered-down version of the bill, giving Scottthere were some issues with the bill, such as lowering the statute another victory in the 2012 Session.of limitations on filing a deficiency judgment from five years to Also on the final day of session, legislators learned that theone year, the overall bill would have helped ease the backlog of Florida Supreme Court had ruled the House redistricting map wasforeclosure proceedings in Florida’s courts. In the end, the sponsors constitutional but the Senate map was not. Because of this, bothcould not agree on identical language for the bill, and thus, HB 213 chambers were called back for a special session March 14-28died in messages while SB 1890 never came up for a floor vote. in order to redraw the Senate map to ensure it complies with all At the start of the session, the Capitol was dominated by talk constitutional requirements. We are still awaiting final review of theof the gaming bill, which would have brought three large casinos Congressional redistricting South Florida. The measure split the business community, with Overall, the legislative session was a valuable learningAssociated Industries of Florida in favor, and Florida Chamber of experience. While we are all disappointed in the failure of HB 669,Commerce against. After clearing one panel in the Senate, House we once again were able to stave off an attack by the bankers onsponsor Rep. Erik Fresen, (R-Miami), failed to get the votes to get our tax exemption. We also learned valuable lessons on what wepast the first hurdle in that chamber, and the issue was dead. need to do to ensure successful passage of our priorities in the As has been the case for several years, legislators tackled future, and it all starts at the grassroots level. We urge our creditanother tight budget year, contending with a nearly $2 billion unions, right down to the membership, to get involved and help usshortfall. They gave Govenor Rick Scott the additional $1 billion in our legislative efforts. It is only with the support of our dedicatedhe requested for PreK-12 education after cutting $1.3 billion last advocates that we will be able to pass meaningful legislative reform.year. Overall, legislators passed a $70 billion budget that cut 4,000 We thank everyone who has helped us in the past and look forwardpositions from state government and cut funding for hospitals, to a successful 2013 Session. ■nursing homes, and universities. 12 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 13. PAC Fundraising & Your Credit Union Blake Westbrook, coordinator, Grassroots & Political Action (AL) In recent months, the League of Southeastern Credit Unions has different programs and incentives to choose from when it comes tomade a significant effort to be more aggressive through political PAC fundraising. Many of our credit unions have signed up for payrolladvocacy. While advocacy at the state and federal levels includes deductions. Under this program, employees can contribute a smallmeeting with lawmakers and contacting them through calls and emails, amount per paycheck throughout the year. As an incentive, one creditthere is also another extremely important aspect of advocacy − our union now uses a Friday Jeans Day to entice employees to give to thepolitical fundraising efforts. Since the formation of the LSCU in 2009, LSCU FEDPAC. Those who give to the PAC can wear jeans every Friday.we have made great strides toward meeting our state and federal As an added incentive, for those who give at certain levels, the LeaguePolitical Action Committee (PAC) fundraising goals. A strong PAC not provides lapel pins to wear so contributors can show co-workers andonly raises our profile in the political arena, but also gives credit unions friends that they support the PAC. Want to get your members involved?the strength to move our legislative agenda forward. This is especially Through the Deduct-a-Buck program, credit union members can deducttrue during an election year. It is important that we as a league are able a dollar out of their checking account each month to go to the PAC. Thisto support lawmakers and candidates, both on the state and federal is not only an easy way to raise money, but an opportunity to allow yourlevel, who are supportive of the credit union movement. With credit members to become involved in political advocacy.union-friendly lawmakers, we will have the leverage needed to pass While we have made significant strides in our fundraising efforts,legislation that benefits credit unions such as member business lending, there is still much work to be done. Contact Blake Westbrook insupplemental capital, public deposits, exam fairness, and future issues. Alabama at or Andy Gonzalez in Florida at In regards to our Federal PAC, all contributions must be individual if you would like to learn more about how yourdollars. We know it can be tough to contribute to a political action credit union can become involved in political and legislative success. ■committee during these economic times; however, there are several What is a Dollar Worth to You? Your dollar is worth more than you think. Contributing to an LSCU PAC helps build relationships with lawmakers. Stand with millions of people like you across the country to protect the credit union movement. Donor Recognition Levels Chairman’s Club: $500 or more President’s Club: $250 - $499 Congressional Club: $100 - $249 Capitol Club: $50 - $99 Ambassador’s Club: $25 - $49
  • 14. ADVOCACYAdvocacyView from the Hill: a Washington PerspectiveJohn McKechnie, partner, Total Spectrum Despite a legislative calendar that reflects the political pressures • Tax reform - While there is no legislation currently introduced,of the November elections, credit union issues remain a live topic on committees on both sides of Capitol Hill, as well as theCapitol Hill. There are four principal issues that merit the attention of Administration, have begun to discuss tax reform aimed atcredit union leaders in the coming months. broadening the business tax base by closing loopholes and, • Credit union member business lending (H.R. 1418, S. 509) in the words of President Obama, “enhancing fairness in the - This legislation would increase the ability of credit unions to Code.” While the so-called “Supercommittee” failed at the task make loans to members for business purposes. Currently, a last fall, it is possible that some sort of legislation could gain credit union is limited to an aggregate total of 12.25 percent of traction, particularly if budget pressures continue to mount. total assets in business loans; the bill allows well-capitalized The political context in which all of these measures exist is credit unions to gradually lend up to 27.5 percent. Job- important: with the exception of the examination fairness issue, all of creation packages in both chambers are possible vehicles the above-described initiatives have elicited anti-credit union lobbying for this bi-partisan legislation, which has the support of 122 efforts by the banking industry. Credit unions need to be aware not House and 22 Senate co-sponsors. only of the importance of framing and defining why these issues are important to our members, but also of the strong and vehement It is now more important than ever to attempts by bank lobbyists to thwart our efforts. be active, be informed, and be involved Legislative debates are most often won by the side that frames the issue best. For credit unions, it is now more important than ever to be in our grassroots efforts to update the active, be informed, and be involved in our grassroots efforts to update ability of credit unions to serve our 92 the ability of credit unions to serve our 92 million members nationwide. million members nationwide. John McKechnie is a partner with Total Spectrum in Washington, D.C. McKechnie is also a consultant to the LSCU on legislative and • Supplemental capital (H.R. 3993) - A straightforward and regulatory issues in Washington, and represents the interests of common-sense effort to ensure that credit unions can safely Alabama and Florida credit unions before members of Congress. He grow; while at the same time continue to provide a high has spoken at the LSCU Development Conference, the State GAC in level of service to consumers. It provides credit unions with Florida, and will speak at the Alabama State GAC April 4-5. McKechnie the ability to raise capital from sources other than retained is formerly the chief lobbyist for CUNA and a top official at the NCUA. ■ earnings, enabling the credit union to maintain a high level of member service while maintaining the essential cooperative ownership structure. Supplemental capital would enhance Actions to keep CU issues live on Capitol Hill: safety and soundness by allowing for the development of an • Visit lawmakers at home and in D.C. additional capital cushion that reduces risk to the National • Let your voice be heard through letters/ Credit Union Share Insurance Fund. The legislation dictates calls to Congress members that the supplemental capital be uninsured and only allows adequately capitalized credit unions to accept it. • Hold legislative meet & greets at chapter • Examination fairness (H.R. 3461, S 2160) - These meetings/individual CU measures establish documentation requirements in • Educate staff about the CU issues examinations, sets a faster timeframe for reports, and creates • Get involved in CU-friendly election a new inter-agency Ombudsman that would review the campaigns complaint process at NCUA and other federal regulators. The • Rally membership to vote for a House bill has already had a hearing that featured testimony candidate from JetStream FCU’s Jeanne Kucey (Miami Lakes, FL), and has attracted 117 co-sponsors. 14 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 15. LSCU Legislator Profile Jason Brodeur What was it about politics that interested you enough to decide to run for the Florida House of Representatives? I really consider the opportunity to serve the community to be a special privilege. After having been a part of a neighborhood trust, a school volunteer, and a member of Rotary, the opportunity came up for me to do a little more. So I ran for office and was fortunate enough to win. It has been the blessing of a lifetime. The 2012 Legislative Session will end right when Signal is published, what do you feel the legislature accomplished, and what are some major issues that still need to be addressed? I think the legislature accomplished what it was sent to do this year – balance the budget, especially in a very difficult economy. Going In his first term, Representative Jason forward I believe our economy will continue to be the biggest driver Brodeur represents the 33rd district which of policy. Since we have a balanced budget amendment, all future encompasses parts of Volusia, Seminole, funding decisions are dependent on how fruitful our economy Orange, and Brevard counties. is today. I think we still need to increase funding in education, Before being elected to the Florida Legislature, which we did this year and I think we will still need to de-regulate Rep. Brodeur served on the City of Sanford industries so we can worry less about government rules and more Charter Review Board and the Seminole County about serving customers. When we allow for more transactions, Planning and Zoning Commission. Gov. Crist there is more opportunity for prosperity. also selected him to serve on the Medicaid Pharmaceutical and Therapeutics Committee. This session, you sponsored HB 669 which would have After joining the Florida House of given credit unions the ability to become qualified public Representatives, Rep. Brodeur has become the depositories. What were your thoughts behind filing this bill vice chair of the Business and Consumer Affairs and why was it an important issue to you? subcommittee, as well as a member of the For me, it is really about choice. Never in the history of time Health and Human Services Committee. He also have consumers gotten a better product at a lower price than serves on various other subcommittees. when they are afforded choice. As it is today, commercial banks continue to enjoy a virtual monopoly over the deposit of state and local funds in Florida. Credit unions receive deposit requests from municipalities such as fire and sheriff’s departments, schools, libraries, and other local units of government and are forced to turn them away. This legislation would have allowed local elected officials depository choice, and an opportunity to take advantage of local community-owned financial institutions whose members are part of the public they serve. I feel like more choice is just good public policy.16 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 16. What role do you see credit unions playing in the financial important when contacting your elected official to be veryservices industry and, in particular, Florida’s economy? specific in what would be a good outcome for you and whyAs mentioned above, it seems like government at all levels is it’s important for our community, not just your business orhaving to cut costs and do more with less. By allowing credit your industry. It helps to reference past bills or current billsunions to accept municipal deposits, municipalities may receive so we know where to go for further research and to get morebetter rates of return on their tax dollars. For local leaders facing information on background of related issues. I value very muchtight budgets, every dollar saved or earned counts. If credit the information I get from the community.unions were allowed to work with local governments to the same Can you describe your experience working with theextent as commercial banks, they could increase the rate paid on LSCU Governmental Affairs team during your time in thedeposits and thereby help every municipality meet their individual Legislature?community’s needs. It has been fantastic. The LSCU Governmental Affairs team wasHow important do you feel the role of grassroots extremely responsive and thorough in handling any objectionsadvocacy is in the legislative process? What advice I received regarding credit union issues. They were bothwould you give to grassroots advocates when contacting educational and informative as we met with those entities thattheir elected officials? may have had concerns. They were able to arm me with all theGrassroots is extremely important to the process as it’s the knowledge I needed to position the LSCU as an organizationonly direct feedback that we get when we are considering interested in helping all of our communities. ■issues that may or may not affect our community. It is Rep. Brodeur was the main sponsor of the HB 669, legislation to allow credit unions to accept public deposits. SIGNAL: Vol. 3, Issue 1 17
  • 17. 2012 LSCU Federal Lawmaker of the Year AwardsPresented to Nelson, Sessions The LSCU honored Sens. Bill Nelson (D) and Jeff Sessions (R) as the LSCUFederal Lawmakers of the Year during the 2012 CUNA GAC in March. Sen. Nelson received the LSCU Florida Federal Lawmaker of the Year Awardduring a reception at the CUNA GAC. He is the only senator to co-sponsor themember business lending bill and legislation to delay the implementation ofinterchange fees. At the reception, Sen. Nelson met with credit unions for a few LSCU President/CEO Patrick La Pineminutes and then spoke for 20 minutes. presents award to Sen. Nelson. Sen. Sessions’ award for the LSCU Alabama Federal Lawmaker of theYear was presented to his chief of staff Rick Dearborn during his legislativevisit on Capitol Hill during the GAC. Sen. Sessions has been a consistentsupporter of credit unions and has publicly acknowledged his support ofthe credit union tax exemption and the ability of credit unions to serve theirmembers without calling the tax exemption into question. ■ LSCU Chairman Joe McGee and President/CEO Patrick La Pine with Sen. Sessions Chief of Staff Rick Dearborn (c). The Emerging Choice. Expertise refined by over 34 years of credit union focus. Our professionals have distinctive industry experience in an array of technical specialty areas delivering a single source of vast resources to credit union clients throughout the U.S. 248.244.3110 Auditing - External & Internal I IT Assurance I Regulatory Compliance I Merger Consulting I Loan Reviews
  • 18. Compliance CornerNCUA Letter 12-CU-01: Regulatory Concerns During 2012Bill Berg, MBA, CCUE, CUCE, BSACS, vice president, Compliance Training & Information It’s the end of the first quarter of 2012 and the NCUA has Interest Rate & Liquidity Risksaddressed the regulatory concerns for this year in the NCUA Letter A majority of credit union member balances are in rate-sensitive12-CU-01. Those concerns include: accounts, which are less stable funding sources than regular sharesLending Trends or share drafts. Higher levels of interest rate risk will have a negative New auto loans continue to decline, while riskier types of loans i.e. impact on earnings when rates rise. It is vital for credit unions withunsecured loans, non-federally guaranteed student loans, and first high exposure to interest rate risk to proactively re-structure theirmortgages all increased for consecutive quarters. balance sheets, sell off excessive concentrations of long-term loans, Growth in low-rate first mortgages continues to far exceed and re-price share products before rates begin to rise.growth in overall loans. Credit unions holding high concentrations of Growing portfolios of long-term, fixed-rate loans also pose liquiditylong-term fixed-rate loans will be subject to negative margins when risks. Compounding those risks, some credit unions are beginning tointerest rates rise and short-term funding costs exceed income from purchase investments with longer maturities to obtain slightly higherfixed-rate mortgages. yields. Such calculated risks negatively impact short-term liquidity. Although overall delinquency and net charge-offs were relatively Another strain on liquidity is due to elevated real estatestable through the third quarter, the percentage of loans with foreclosures, which increase the level of non-earning assets.delinquencies 12 months or longer increased. This increase in long- Concentration Risksterm delinquencies indicates that future charge-offs may increase. Concentration risks are compounded when credit unions holdingCredit Risks high levels of mortgages also hold mortgage-backed securities with Credit risks persist in constraining the performance of many credit similar risk characteristics.unions. Delinquencies and charge-offs in real estate, business, and Credit unions must employ sound risk mitigation and diversificationparticipation loans remain historically high. Each credit union must strategies to effectively manage concentration risks and preventregularly evaluate the adequacy of and fund the Allowance for Loan concentrations from reaching unsafe levels.and Lease Loss fully. Responsible Lending Modified loans also carry a high risk of re-default. Credit unions While ensuring that credit unions mitigate all of these risks, theneed prudent loan modification policies and procedures to ensure NCUA will continue to encourage responsible lending. The bestthat each borrower is a suitable candidate for modification or other service that credit unions can offer consumers and businesses toalternatives to foreclosure. promote economic recovery is access to sound and affordable loans New and outsourced loan programs carry additional risks. For through a healthy financial institution.example, non-federally guaranteed student loans have grown at The NCUA Board released a final rule on Feb. 2, 2012 requiringan annualized rate of 49 percent since the National Credit Union federally insured credit unions to develop and adopt a written policyAdministration (NCUA) began collecting data on these loans in on interest rate risk (IRR) management and a program to effectivelythe first quarter of 2011. Non-federally guaranteed student loans implement that policy.are essentially unsecured loans that may not begin to pay down The final rule is effective Sept. 30, 2012. Under the final rule:for several years. As with any new loan program, credit unions • All federally insured credit unions falling within the asset-sizeshould establish appropriate policies, underwriting criteria, risk and activity triggers (below) would be required to have an IRRmeasurement, monitoring, and control processes prior to granting the management program.first loan. Your credit union’s policy should contain suitable limits in • Compliance with the final rule would be part of a credit union’srelation to net-worth and total loans or total assets. overall asset liability management responsibilities and would Third-party indirect loan programs call for an added level be a condition of receiving and maintaining federal depositof monitoring over vendors and other parties affiliated with the insurance.transaction, such as insurance companies. Refer to NCUA guidance • IRR is defined as: “vulnerability of a credit union’s financialletters regarding such lending arrangements. condition to adverse movement in market interest rates.” It CONTINUED ON PAGE 20 SIGNAL: Vol. 3, Issue 1 19
  • 19. Regulatory Concerns During 2012 (Continued) also notes that credit unions have to address IRR from several • The policy should establish responsibilities for identifying, sources which include re-pricing risk, yield curve risk, spread measuring, monitoring, controlling and reporting IRR and risk, basis risk, and options risk. establish risk limits. • NCUA believes credit unions should have a written policy In addition, a written IRR policy should, according to the guidance, that expressly states the credit union’s IRR tolerance and an • Identify committees, persons or other parties responsible for effective IRR program that “identifies, measures, monitors, review of the credit union’s IRR exposure; and controls IRR.” Such a program is an “essential component • Direct appropriate actions to ensure management takes of safe and sound credit union operations.” steps to manage IRR so that IRR exposures are identified, • There are asset-size and activity triggers for how the written measured, monitored, and controlled; IRR policy requirements would apply: • State the frequency with which management will report on ° Federally insured credit unions with less than $10 million measurement results to the board to ensure routine review of in assets would not be required to have a written policy. information that is timely (e.g. current and at least quarterly) ° Federally insured CUs with assets $10 million or more but and in sufficient detail to assess the credit union’s IRR profile; not exceeding $50 million would have to meet the written • Set risk limits for IRR exposures based on selected measures policy requirements if all of their first mortgages held in (e.g. limits for changes in re-pricing or duration gaps, income portfolio plus total investments with maturities of greater simulation, asset valuation, or net economic value); than five years are at least 100 percent of their net-worth. • Choose tests, such as interest rate shocks, that the credit (Credit unions in this asset range would not have to have union will perform using the selected measures; a written policy if they have less than 100 percent of their • Provide for periodic review of material changes in IRR net-worth in first mortgages and total investments with exposures and compliance with board approved policy and maturities of more than five years.) risk limits; ° Federally insured credit unions with assets of more • Provide for assessment of the IRR impact of any new business than $50 million would have to meet the written policy activities prior to implementation (e.g. evaluate the IRR profile requirements. of introducing a new product or service); and All federally insured credit unions that meet the thresholds would • Provide for annual evaluation of policy to determine whether ithave to have an effective IRR management program that is consistent is still commensurate with the size, complexity, and risk profilewith the guidance. Requirements for the written IRR policy include: of the credit union. • The policy may be a separate document or part of the credit Additional information on Interest Rate Risk Analysis can be found union’s policy on ALM, investments, funds management, in the compliance sharing portion of ■ liquidity or other policies. • The document must clearly describe the credit union’s IRR policy. • The board of directors is responsible for the adequacy of the IRR policy, which should be consistent with the credit union’s business strategies. • It should reflect the credit union board’s risk tolerance, based on the credit union’s financial condition and risk measurement systems, consistent with the credit union’s balance sheet structure. • The policy should state actions and authorities required for exceptions to the policy and limitations under it.20 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 20. Are you ready to increaseDirector’s revenue?Resource Each quarter the League of Southeastern Credit Unionsproduces a newsletter geared toward credit union volunteers.The Director’s Resource Newsletter has information aboutupcoming events specifically for volunteers, stories that willgive them a greater understanding of what the League andCUNA are doing for credit unions, as well as stories that will In today’s economy, credit unions must look at everyenrich their role as a volunteer. revenue stream possible—indirect lending may be just what you need. For over a decade, Indirect Lending Articles in the Director’s Resource cover topics such as Solutions™, LLC has provided credit unions thebest practices for board members, issue updates on ongoing advantage of indirect lending, without the complexitieslegislation affecting credit unions in both states, special of starting and maintaining a new program.highlights of conferences and workshops geared toward No set up costs. No long term obligation. Just a simpledirectors, key volunteer resources, and updates on the solution to help you exceed your goals.progress of the Cooperative Image Campaign. This is a goodresource for volunteers Indirect Lending Solutions™, LLC offers a streamlinedto gain a greater approach to capture loans at the dealership:understanding of whatthe League and CUNA aredoing for credit unionsand stories that will enrichtheir job as a volunteer. Contact us today for a free, no obligation meeting to discuss your options. 843-569-5009 (Charleston)Sign up now 800-843-8300, ext. 5009 (Nationwide) IndirectLendingLLC.comto receive the LSCU Director’s Resource newsletter, createdspecifically for credit union volunteers, by sending a requestto
  • 21. INITIATIVES Cooperative Initiatives In-School Branches Teach the ABCs of Money Management Adena Whitman, director, Member Relations With the average American household carrying more than Now, with a presence at eight schools and Boys & Girls Club $10,000 in credit card debt and the average college graduate programs, Army Aviation Center Federal Credit Union is continuing to having nearly $20,000 in debt, (, “The Economic State reach out to youngsters with special accounts geared to kids as well of Young America,” May 2008), teaching money management at as financial education lessons. a young age is one way to make sure our young people become Danielle Seaton, a teacher and credit union sponsor at Windham financially fit. With 259 credit unions from 44 states and the Elementary, said, “The kids race in each week to make their deposits District of Columbia supporting 990 individual in-school/youth and they get to see how their money adds up over time. It’s an center branches, credit unions across the country are moving important lesson to learn early.” money management into the classroom. “Partnering with our area schools allows us to showcase our Often referred to as a student credit union or student-run credit credit union’s commitment to education and the school systems,” said union, in-school credit unions are generally established as a financial Tracy Downs, vice president of marketing, Community Credit Union in education partnership between a credit union and a school or school Gadsden, Alabama. “The credit union works with teachers to continue district. While the scope and operation often vary depending on their efforts to educate students on personal finance topics. Having needs and resources, facilitating in-school branches gives students students work at the in-school branch enables them to take what the opportunity to learn money management skills as they make they are learning in the classroom and apply it in a “hands-on” way, account transactions at school, often coupled with additional financial whether in their school work or in an outside work environment. education. Most in-school credit unions are also student-run, providing Now in seven schools, Community Credit Union is planning to add an additional benefit of developing career, math, and organizational three more schools in the next year or so. skills to the students involved in the operation of the branch. “We have had schools and parents coming in and asking the “Windham Elementary in Daleville, Ala. was our first school to open credit union to create a branch in their schools,” said Downs. “In an in-school branch. In 2009, we attended a PTO meeting and then addition to teaching money and math skills, we are teaching the they allowed us to go classroom to classroom, talk to the kids, and student tellers about give them information to take home with them,” said Lisa Hales, vice social interaction in president of marketing, Army Aviation Center Federal Credit Union. a workplace, how “Each year, we attend their school orientation day and set up a to be responsible, table. Sometimes we are able to speak at orientation and occasionally and about etiquette. Kirby Kangaroo [kid’s club mascot] goes along – depending on the Working in the credit audience. We promote convenience for the parents, as they don’t union’s in-school have to come by the branch to make deposits into their children’s branches is a accounts,” Hales explained. “We a tutorial for real life.” also promote the savings habit Students are a allow the children to deposit and selected to “work” any amount they have, even as at the credit unions llittle as a nickel. It’s gratifying and often rotate to On the Job TV Host Bobby Jon Drinkard (C) with student because we have some students different positions workers of American Heritage CU in-school branch. t we see every single week. that within the credit Their parents just get it.” T union. Sometimes the students act as tellers and other times, work as escorts for the students making deposits. Kirby Kangaroo Club members with Kirby and “Our students do the actual transactions, balance the drawers,Emily Darnell, marketing specialist for AACFCU. and even report the transactions back to the credit union through email and fax,” said Jamie Payton, COO of Heritage South Credit 22 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 22. Union, which is based in Sylacauga, Ala. “At Sylacauga High School, Winston went onwe helped create a course of study the kids have to take in order to explain that notto participate in the class and work in the credit union. One of the only has he kept inskills we teach is manual reconciliation because it’s important they touch with someknow how to actually balance an account.” of the people he Students get a “hands on” experience at VyStar’s in-school branch. “Using the STAR manuals, the credit union, in collaboration with attended the Financethe school, developed a study curriculum with online testing so they Academy with, but they are also currently credit union staff.can obtain a certification showing they have completed certain study “We got the same training the credit union staff got, coveringmodules,” Payton continued. “We have even had some of the students finance, compliance, cash operations, marketing, and working tellerstay on with the credit union while going to college. Our goal is to give lines,” he explained. “We even had the opportunity to train the otherthese students marketable skills they can take into the real world.” kids. Essentially, we grew up together in this program.” Vystar Credit Florida Credit Union in Gainesville, Fla., has been running its Union is in the process of opening its fifth in-school branch and basedBobcat Branch for 11 years and took the program a step further by its program design for the Vystar Academy of Business and Financecreating an Academy of Finance in the school. According to Mark on the Florida Credit Union model.Starr, the credit union CEO, almost all of the students who take part in “You would not be able to tell the difference between our schoolthe credit union’s academy go on to college and often end up staying branches and any of our “real world” branches,” said Angie Chriest,in the credit union industry. branch vice president for Vystar Credit Union. “Our goal was not only “Our credit union was originally a teachers’ credit union, so to teach financial management, but to give the students a hands-onpassing along these accounting, computer, and life skills are part of experience which will help them throughout their lives. By the timeour original mission,” explained Starr. our students graduate high school, they generally have checking Winston Starr, Starr’s son, is a shining example of the long- accounts, savings account, and a money market or CDs. Essentially,term impact of the credit union’s in-school program. Currently a we are giving them a head start into a successful financial future.”decentralized lending officer for GTE Federal Credit Union, he also “Just counting our high school accounts, students have more thanworked at Florida Credit Union during college as well as afterwards as a million dollars in the credit union,” Chriest explained. “We considera branch manager. our academy a benefit to everyone. Our kids get the information they “In addition to working in the school’s credit union during high need to succeed and the credit union attracts new, younger membersschool,” Winston said, “I was able to work at the other branches full while following the mission of ‘People Helping People.”time during the summers. We did everything at the school branch “Credit unions firmly believe financial education is a true pathwayexcept make loans, which provided a real world perspective you don’t to financial success,” said Adena Whitman, director of memberget at other types of jobs.” relations for the League of Southeastern Credit Unions. “Two out of every three credit unions offer some sort of financial education, and many partner with local schools to create programs that help students learn the difference between wants and needs, how to create a budget, and how to save. Instilling these values early gives students a greater chance to thrive financially.” Want to start a credit union branch in your area? Contact the League of Southeastern Credit Unions Cooperative Initiatives team or visit the Cooperative Initiatives section on for additional information. CONTINUED ON PAGE 24 SIGNAL: Vol. 3, Issue 1 23
  • 23. In-School Branches Teach the ABCs of Money Management(Continued) Listed below are credit unions in Alabama and Florida with in-school Branches. If your credit union isn’t listed and you would like to beincluded in the national list of credit unions with school branches, visit to add your creditunion to the directory. ■Alabama FloridaArmy Aviation Center Federal Credit Union Community Credit Union of Florida Contact: Lisa Hales Contact: Deborah Blair 341 North Daleville Ave. 1051 South US 1 Daleville, AL 36322 Rockledge, FL 32955 Tel: 334.598.4411 Ext.1307 Phone: 321.637.3206 Youth Branches (student-run): Youth Branches (student-run): Elementary School (2), Middle School (3), Boys & Girls Clubs (3) Elementary School (5), High School (1)Community Credit Union CFE Federal Credit Union Contact: Tracy Downs Contact: Suzanne Dusch 110 S. 26th St. 1000 Primera Blvd Gadsden, AL 35904 Lake Mary, FL 32749 Phone: 256.543.7302 Phone: 407.228.7650 Youth Branches (student-run): Youth Branches (student-run): Elementary School (1), Middle School (5) High School (4)Heritage South Credit Union Florida Credit Union Contact: Jamie Payton Contact: Mark Starr 60 Gene Stewart Boulevard P.O. Box 5549 Sylacauga, AL 35151 Gainesville, FL 32627 256.401.1219 Phone: 352.377.4141 Youth branches (student-run): Youth Branches (student-run): High School (2) High School (1) Suncoast Schools Federal Credit Union Contact: Juli Lewis 6801 E Hillsborough Ave. Tampa, FL 33610 Phone: 800.999.5887 Youth Branches (student-run): Elementary School (6), Middle School (3), High School (23) VyStar Credit Union Contact: Angie Chriest 4545 Blanding Blvd. Jacksonville, FL 32210 Phone: 904.777.6000 ext. 5428 Youth Branches (student-run): High School (4) 24 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 24. FOUNDATION Foundation Help Leave a Lasting Impression Laura Vann, vice president, Cooperative Initiatives The Credit Union National Association (CUNA), the “To show our commitment to the success of the Tampa Service Project Southeastern Credit Union Foundation (SECUF), and the project, the LSCU Service Corporation (LEVERAGE) board of Recognition Levels Carolina Credit Union Foundation (CCUF) are joining forces directors has made a $30,000 contribution to the project,” said to build therapeutic playgrounds at All Children’s Hospital in Patrick La Pine, president/CEO of the League of Southeastern Miracle Maker Tampa, Florida and Levine Children’s Hospital in Charlotte, North Credit Unions. “We are asking our member credit unions to $50,000 plus Carolina. Both are designated as Children’s Miracle Network join us in building the playgrounds to not only promote healing (CMN) Hospitals, reinforcing the long-term commitment of credit for patients and families, but to also help credit unions make a Visionary unions to CMN Hospitals and the CU4Kids program. lasting impression in the convention host cities.” $25,000 to $49,999 This project represents credit unions’ tradition of Representatives of All Children’s Hospital have noted Dreamer completing community service projects in conjunction with the need for the therapeutic playground and how it will help $10,000 - $24,999 the host cities of the Republican and Democratic National children develop fine motor skills and gross motor skills, as Humanitarian Conventions (RNC & DNC). These “leave behind” projects are well as helping children strengthen their upper and lower $1,000 - $9,999 designed to not only demonstrate the credit union motto of extremities. The playground will also be beneficial to family “People Helping People,” but also to raise awareness of the members, providing an opportunity to play while another Supporter credit union social mission with Republican and Democratic member of the family is receiving therapy. The therapeutic $100 - $999 officials attending the party conventions. playground supports the All Children’s Hospital philosophy of Friend “As the conventions bring the national spotlight to our caring for the patient and the family as a whole. below $100 areas, we have the opportunity to showcase the cooperative Detailed information on the project and the support levels spirit of credit unions and the tremendous impact their efforts can be found on the Southeastern Credit Union Foundation’s make on our local communities,” said Joe McGee, chairman website, A video about of the board of the Southeastern Credit Union Foundation and the project is also available on the foundation website and president/CEO of Legacy Community Federal Credit Union. the League website. If you need more information about According to McGee, it will take $300,000 in each city to how you, your credit union and your chapter can make a Help Make construct the therapeutic playgrounds. tax-deductible contribution, contact SECUF Interim Executive Director Laura Vann at 866.231.0545, x2181 or a Dif ference ■Visit – tolearn more about the recognition levels. SIGNAL: Vol. 3, Issue 1 25
  • 25. EDUCATIONLeague EducationImproving Cross-Sales: A Matter of Hill, Will, & SkillKathy Blumenfeld, vice president, CUNA Mutual Group’s Lender Development Program Coaching is one of the four cornerstones of a healthy credit An employee may not have the authority or time required to learnunion sales and service culture. The others are: training, tracking about a member’s financial situation, suggest relevant solutions,results, and sales and service culture champions who believe in and close the sale. Employees may need more work space or otherthe products and are accountable for results. Note that training and resources, such as product information sheets, brochures, or websites.coaching are separate cornerstones—this is important. Once you’ve uncovered obstacles, you can work on eliminating Periodic training sessions in product features and sales/service them—or adjusting your expectations.techniques are necessary and extremely valuable. Coaching, Will: The Motivation & Desire to Succeedhowever, is a continuous, cooperative process. Ultimately, motivation has to come from within each person. ButAvoid the “Assumption Zone” you can influence employees through consistent, fair rewards and Effective coaching programs start with an objective consequences.performance analysis: Identify what employees should be doing, Tangible rewards such as money or prizes are obviousand what they’re actually doing. Then identify any barriers to motivators—as long as you’re rewarding the correct, well-definedachieving the desired performance. behaviors. It’s also effective to publicly celebrate and privately Focus on facts. Avoid the “assumption zone” where you’re acknowledge an employee’s efforts.basing your assessment on what appears to be happening rather “Feedforward” is a motivational mentoring tool. In addition tothan the actual causes of a behavior. Start by listing some potential sharing performance results after the fact (feedback), encouragecauses of underperformance and discuss them with each employee, employees to envision how well they’ll do with the proven sales/so you’re both working from the same playbook. service techniques you’re teaching. Persuade them to anticipate For each issue that negatively affects an employee’s success and rewards from these actions, and they’re more likely toperformance, try to determine whether the barrier relates to one of fulfill that prophesy.three things: hill, will, or skill. Skill: The Knowledge & Experience to Do the Job RightHills: Obstacles to Performance If employees don’t know how to cross-sell in general, or don’t A common obstacle to sales success in credit unions is that know how to present specific products to members so the memberslending employees don’t know what’s expected of them. Perhaps can make an informed decision, diagnose the level of each person’s goals are not specific enough skill deficiency: or communicated well. • Are they rusty after not using the skill for awhile? A printed job aid (“cheat sheet”) might be the solution. • Were they taught the skill but simply aren’t good at it? Practicing with a mentor and feedforward can help. • Did they never learn the skill? Start with basic training, then practice with a mentor and feedforward. Coaching Influences Behavior—as Does Lack of Coaching Whether managers, supervisors, and senior employees intend it or not, they’re influencing their lending staff’s performance every day. Is that influence positive in your credit union? The answer is likely to be yes if you have a coaching program that’s dynamic, specific to each individual, and focused on specific behaviors. © CUNA Mutual Group, 2012 All Rights Reserved LSCU has a multitude of webinars, workshops, and conferences to assist your credit union in providing employees the professional development and training that will make a difference in their knowledge base and your bottom line. ■26 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 26. Southeast CUNA Management School: A Rewarding Learning Experience The Southeast CUNA Management School (SRCUS) has of a well-rounded curriculum and experiential opportunities for equipped graduates with the skills and knowledge to meet the professional and personal growth. leadership challenges that arise in the credit union industry since The curriculum is designed to be delivered over a three-year 1971. Today, more than ever, success depends on the capacity of period with students in residence for course work each summer for individuals to continuously learn and to adapt to the changes inside eight days. For more information about the curriculum topics and and outside of their credit unions. The SRCUS mission is to provide registration, visit LSCU’s Events Calendar at ■ students the opportunity to develop these leadership capabilities by creating the best student experience possible through the use My week at SRCUS was one of the most rewarding learning experiences I have had at any workshop, seminar or school. The classroom instruction, the networking, the ability to hear and learn from those in our industry that share the same passion for credit unions are all reasons that I look forward to returning as a 2nd year student this year! Patty Sarne, SVP/COO San Antonio Citizens Federal Credit UnionSoutheast CUNA Management SchoolJune 8-15, 2012The Georgia CenterAthens, GAFirst-Year Courses: Second-Year Courses: Third-Year Courses: • Personal Leadership • Working Effectively with Your Board • Credit Union Simulation • Effective Communications • Team-Building • Lending • Financial Analysis • Setting a Motivating Environment • Organizational Leadership • Resolving Conflict • Employment Law I • Performance Management • Personality Styles and Work • Business Presentation Skills • Business Development Behaviors • Financial Data for Strategic Planning • Employment Law II • Managerial Ethics • Interest Rates and Financial Markets • Fraud • How to Interpret and Use a Budget • Asset Liability • Presentations of Third Year Projects • Team Building • Strategic Planning • Debate with Second-Year Class • Financial Markets • Management of Risk II • Community Service Project • Management of Risk I • Debate with Third-Year Class • Marketing in Credit Unions • Stress Management
  • 27. Upcoming Second Quarter Learning Opportunities Download the complete 2012 LSCU Events Calendar at 2012 22 Member Credit Report Disputes: Completing ACDVs, 3 Lending Series: Lending to the Small Business Owner AUDs, & Correcting Joint Members’ Credit in Today’s Economy 23 Required Compliance Series: Regulatory Compliance 3 LSCU Councils Meeting* for Lenders Montgomery, AL 30 Holding Your Ground with Examiners & Regulators: 4 Questions Supervisory Committee Members Should The Credit Union Bill of Rights Be Asking 4-5 LSCU State Governmental Affairs Conference (GAC) June 2012 Montgomery, AL 6 Dormant Accounts & Unclaimed Property: 11 LSCU BSA Training Workshop The Legal Perspective Mobile, AL 7 Writing Your BSA Policy 11 Handling the Credit Union’s Right of Set Off 12 Call Reports: What to Look For, Entering Information 12 Auditing Your Credit Union’s Website & Why It’s Important 18 Frontline Series: Service EXTRAordinaire: Increasing 13 Lending Series: Denied Loan Requirements: Member Loyalty & Profitability Consumer, Commercial & Residential18-19 LSCU Chapter Leader’s Retreat 13-16 LSCU Annual Convention & Exposition Panama City, FL (Invitation Only) Orlando, FL 19 Get Serious about Offering Remote Deposit: It’s Time 20 A Penny Saved is More Than a Penny Earned: & Here’s How! Leveraging Technology to Improve Efficiency, 24 Understanding & Navigating the ACH Rules for the RDFI Profitability & Member Service 24 LSCU Disaster Preparedness Workshop 21 Director Series: Fundamental Board Duties Miami, FL & Responsibilities, Regulatory Requirements & Liability 25 Required Compliance Series: Regulatory Compliance 27 Frontline Series: How to Talk to Members: Handling Difficult for the Frontline Members & Situations 26 LSCU Disaster Preparedness Workshop 28 Accounting & Audit Reports to the Board Montgomery, AL *Bolded listings denote workshops and conferences. Non-boldedMay 2012 listings denote webinars. 2 Regulatory Reform: Top 5 Ways Operations & IT Can Ease the Sting 8 Building the Perfect Bond Claim: Coverage, Filing & What to Do If Your Claim is Denied 9 LSCU BSA Training Workshop Birmingham, AL 10 When an IRA Member Dies 15 LSCU ALM Essentials Training Workshop Birmingham, AL 16 LSCU ALM Implementation Training Workshop Birmingham, AL 16 Handling Check Exceptions & Returns 17 Lending Series: Lender Alert: Regulation Z Mortgage Application Timing Requirements28 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 28. THEPOWER 2012 LSCU Convention & Exposition OF June 13-16 a ble vaila t i o n A duc sEducational Session Tracks E k Each year, it is the LSCU’s goal to provide attendees withmeaningful education sessions that are taught by experts in Tracthe field on current topics relevant to the credit union industryright now. This is one of the best conferences for credit union CEO utiveexecutives to attend with comprehensive educational sessions. CU Exec r to To enhance the educational experience at this year’s AC&E, breakout Direc in nsite ted o ook, assessions are divided into suggested tracks for CEOs, credit union no tebexecutives, and directors. The LSCU’s goal is to provide attendees with a ill be o ge.wealth of information that complements individual roles at the credit union. cks wvention Non signa Tra on ssiWhile session content is developed for the track audience listed, attendees the C as on se we llare welcome to attend sessions from any track. Look for available educationtracks on the AC&E Convention website Morgan Keegan LEADERSHIP FOR CHALLENGING LANDSCAPES Now more than ever, credit unions should align themselves with a trusted partner dedicated to developing and providing financial solutions in today’s challenging economic and market environment. At Morgan Keegan, we have a knowledgeable, experienced team of investment professionals focused exclusively on credit unions. We offer a broad range of services including research, market strategies, product offerings and reporting services — all developed specifically for credit unions. Use our tools, resources and industry insights to help you navigate through today’s challenging landscape. Fixed Income Capital Markets 800.564.2249 Morgan Keegan & Company, Inc. | Member FINRA, SIPC Not FDIC Insured | May Lose Value | No Bank Guarantee | Not a Deposit Not Insured by Any Government Agency
  • 29. COMMUNICATIONSCommunicationsCooperative Image Campaign Gaining TractionMike Bridges, vice president, Communications & Marketing When introducing a brand or image to the public, the important consecutive weeks to raise awareness. The LSCU Cooperative Imagesteps are to raise consumer awareness of the brand or image, Campaign certainly has laid a great foundation.increase familiarity of that brand or image, and attain a desired While the campaign did raise awareness, it will take moreaction by those consumers. Credit unions collectively have an advertising to move the awareness into familiarity. However, Googleimage, but not enough consumers understand what a credit union analytics on the campaign website (www. and how they are different from other financial institutions. The show that 65,000 consumers visited the website during the campaign,LSCU Cooperative Image Campaign is designed to bring the credit and 64 percent of those typed in the URL directly. This is a phenomenalunion image to consumers and help them to understand why a number, and it shows that the ads raised enough awareness incredit union is the best place for them to do their banking. consumers for them to go straight to the website rather than using Developing a creative campaign to raise the awareness a search engine such as Google or Yahoo. The online andis just half the battle. Reaching the Facebook ads also pushed many consumersconsumers and measuring to the website. This shows a goodthat impact is equally as start in building familiarity.important. The LSCU The campaign didCooperative Image accomplish a desiredCampaign explains the action by gettingcredit union difference, consumers to considershows that credit unions moving their money to asave members money, and credit union. Research showspushes consumers to join a credit that 20 percent of customers thatunion through the only have a bank relationship researched awebsite. When the campaign hit the air in September, all 14 media credit union. While only a few said they actually opened an account,markets across Alabama and Florida had a presence. Nearly all of getting consumers with no credit union relationship to considerthe markets were able to show the commercial on TV and online, one is a major accomplishment. The better story comes from thosewhile many markets complemented the TV ad with billboards and consumers that are primarily bank customers but do have an accountradio. The media buy was more than $1 million, making it one of the with a credit union. Research shows that 34 percent of them lookedlargest media buys any state league has ever done. closer at a credit union, and 14 percent said they moved their money This was a great start to the campaign, but credit unions to the credit union. This doesn’t show up in new members’ numberswere anxious to know the impact it had on consumers. The LSCU but it does in the credit unions’ deposits and assets. These twocontracted with the Southeastern Institute of Research (SIR) to groups provide the greatest opportunity for credit union growth.measure the first flight of ads that began in September. SIR conducted Credit unions should look at the LSCU Cooperative Imagethe research online right before the campaign debuted and a couple campaign like any new product they roll out. They wouldn’t introduceof weeks after it ended. This provided a benchmark for the campaign it and then judge it by the very first marketing effort. Raisingmoving forward. The research shows that it’s gaining traction. Each awareness takes time. The LSCU Cooperative Image Campaignstate saw a lift in credit union awareness from the pre- and post- is delivering on its promise to raise awareness, create familiarity,campaign research. Alabama credit union awareness was lifted six and cause a desired action. Building on the success of the 2011percent and Florida credit unions saw an eight-percent lift. According campaign will only enhance the campaign in 2012 and beyond. ■to SIR, gaining any kind of measureable awareness lift is somewhatrare on such a short (4-6 weeks) flight. It normally takes about 12 30 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 30. NEWSLeague NewsFlorida State GAC held in January The LSCU Florida State GAC was held Jan. 24-25 at the Hotel Duval in Tallahassee.The message to attendees was that the credit union message to lawmakers needs tobe clear, focused on the member, and that the bankers will no longer define the creditunion movement. Credit unions met with their local policy makers at the Governor’s Club at theLegislator Reception, and the next day they made visits to the lawmakers’ offices.Attendees talked about the public deposits bill, foreclosure legislation, and the creditunion tax-exempt status. Many of the meetings were engaging with the lawmaker askingthe credit unions specific questions. LSCU President/CEO Patrick La Pine welcomed attendees and gave an overview ofthe conference and the priorities for the League’s Governmental Affairs team. John McKechnie, apartner with Total Spectrum and with more than 25 years’ experience with credit unions through hiswork at CUNA and the NCUA, gave a snapshot of the sentiment in Washington, D.C., saying thatbanks are making the credit union tax-exempt status a priority in 2012. The Regulator Roundtable featured NCUA Region III Director Herb Yolles and OFR’s LindaCharity and Bruce Ricca. Each spoke of seeing encouraging news coming out of the performanceof Florida credit unions. Yolles said the forecast for the Corporate Credit Union Stabilizationpremium remains between 8-11 basis points. The Florida Realtors presented a PAC fundraising and grassroots advocacy best practices; PAC awards were handed out during lunch; andthe 2012 LSCU Legislative and Regulatory Agenda was presented. ■ SAS Workshops held in February The LSCU Small Credit Union Workshops were held on February 7 at Suncoast Schools FCU, in Tampa, and on February 9 at APCO Credit Union, in Birmingham. More than 55 credit union attendees from both states heard a variety of speakers focused on the issues credit unions face every day. One attendee said, “This is the best, most informative Small Credit Union Conference I have ever attended.” Jim Warren, CEO of Tyndall Federal Credit Union based in Panama City, provided insight into his credit union’s collection programs, and NCUA Economic Development Specialists Chuck Brandon and Lisa Terrell provided an exam and p s supervision update which highlighted the target areas the NCUA will be f focusing on in the coming year. In Florida, the lunch speaker was Rob Lefkowitz, highlighting the g growing CRASH movement among young credit union professionals, a in Alabama, Lee Taylor showcased the Young & Free Program. and, E Each one-day workshop featured a state of the credit union movement o overview, a compliance overview, and a lending panel made up of credit u union executives. All of the materials from both workshops, including the NCUA w worksheets, are currently available online in the Small Asset Size Toolkit at ■ T SIGNAL: Vol. 3, Issue 1 31
  • 31. INDUSTRYIndustryA Case Study: Utilizing a Portfolio Management Solution to Manage Debit Programs& Increase Debit Interchange Revenue A comprehensive portfolio management solution can help credit “Since we were already CO-OP Debit payment processingunions identify when, how, and where their members are using their users, there was no complicated installation or setup process,cards. Then, through targeted marketing campaigns, credit unions can and no need to upload anything into the database,” says Darrensway their members to select the more profitable card transaction. Cameron, vice president, marketing, Genisys Credit Union. “WeA Case Study: Debit Cards Give New Meaning to the Age- just logged into the system and our information was there andOld Question “Paper or Plastic?” ready for us to start analyzing.” With the majority of merchants and retailers focusing on customer Customized Queries Hit the Target Groupconvenience, today’s consumers have more choices at the checkout Genisys initially used CO-OP Revelation as a tracking tool toline than ever before. Traditionalists may prefer to pay with cash monitor its members’ card usage trends.that they’ve procured at an ATM or local branch of their financial “At first, we were simply logging in to get an idea of how manyinstitution, while others are opting to use their debit cards as a people were using our debit cards and how they were using them,”primary source for payment. For those who choose plastic, now, the says Cameron. “We were then ready to focus in on a specific subsetquestion becomes which is better – PIN or signature? of our members to increase their usage of signature debit.” Genisys Credit Union, based in Auburn Hills, Michigan, is one of CO-OP Revelation allows credit unions to analyze their data bythe largest credit unions in Michigan with 117,000 members. The using pre-defined queries or customizing their union became sold on CO-OP Revelation in summer 2009 after “We wanted to specifically identify low card usage membersseeing an opportunity to identify potential revenue streams by tracking with one to five signature transactions per month,” says Cameron.its members’ card usage trends. “We worked with CO-OP and Saylent Technologies to develop the card group criteria and then simply ran the report every month. We 32 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 32. It is a very powerful, versatile tool, allowing LEVERAGE to perform a detailed portfolio analysis then consult with our clients identifying opportunitiesalso developed card groups of high PIN usage debit cardholders and to increase volume and, ultimately, theinactive debit cardholders.” profitability of their debit program.Influencing Cardholder Behavior to Increase Profi tability For its first targeted marketing campaign, Genisys sent a mailing percent, from 2.6 transactions per card per month to 6.1 transactionsto the 11,145 members in its low card usage group, pulling the per card per month.mailing list directly from CO-OP Revelation. “Finally, and most importantly, our signature debit interchange “Before we started using CO-OP Revelation, we were marketing in a revenue increased by 47 percent,” says Cameron. “We accomplishedvacuum,” says Cameron. “We were unable to identify specific cardholder our goal of getting a particular group of people to use signature debitbehavior to use in our debit card campaigns, so we could only distribute more often, which helped us achieve our overall goal of increasinggeneral debit card awareness campaigns to our membership. When we interchange revenue. Now, we can track the effectiveness of ourfound our target group for this campaign, figuring out how to market only marketing campaigns and we have a foundation to build on for theto them was a lot simpler and also less expensive.” rest of the year. We also have preliminary results for what we hope Genisys’ debit cards are tied to a rewards loyalty program, so will become an annual campaign.”the mailing touted the benefits of using the card as a signature “We are very impressed with the power, versatility, and ease-of-transaction, as well as popular rewards the resulting points use of the CO-OP Total Revelation product,” said Larry Rodriguez,could be redeemed for. The sample group’s usage behavior and vice president, transactional services, LEVERAGE.changes were monitored through monthly reports, and again at the By implementing such a product, LEVERAGE sees this as anconclusion of the 90-day campaign. According to Cameron, the opportunity to provide a valuable tool to assist clients with theirresults were astounding. portfolio management. “Post-mailing, we saw an increase of 66.5 percent in signature “LEVERAGE’s implementation of this product will help our clientsdebit usage,” says Cameron. “Among this group, the amount they effectively manage their debit programs,” said Rodriguez. “It is a veryspent on their purchases increased by 44 percent. We also noted that powerful, versatile tool, allowing LEVERAGE to perform a detailedthe average number of monthly transactions per card user grew by 134 portfolio analysis then consult with our clients identifying opportunities to increase volume and, ultimately, the Signature Interchange profitability of their debit program.” For more information about CO-OP’s Total Revelation, contact a LEVERAGE business development consultant at 30000 47% Growth ■ 25000 20000 15000 10000 5000 Siganture Interchange 0 SIGNAL: Vol. 3, Issue 1 33
  • 33. Assessing & Implementing Compliance SolutionsMary Elicia Del Santo, vice president, Business Development When asked to list their biggest challenges in today’s operating environment, credit unions usually place compliance at the top of the list.The Bank Secrecy Act, the Dodd-Frank Act, Department of Housing & Urban Development, Department of Justice, and the establishment of theConsumer Financial Protection Bureau (CFPB) are a few of the forces adding to credit unions’ overwhelming regulatory pressures. Since December of 2011, there have been more than 5,000 new pages of the Dodd-Frank Act. Like many CEOs and compliance officers, youmay be asking yourself what’s a credit union to do? Below are five questions to consider as you attempt to gain “compliance” clarity and, in the process, develop a compliance solution. 1. Where do you need the most help? publication for rules, proposed rules, and notices Not all credit unions are created equal. of federal agencies and organizations, as well as Small, medium, and large asset size executive orders and other presidential documents. credit unions have different product This publication is a must to stay informed. Aligning mixes, charter types, and staff resources. yourself with a single solution will save hours of time All of which will be a determining factor researching and keeping up with the most current in what type of compliance solution will be and accurate information. appropriate for your credit union. Smaller credit unions - with 3. Are you using your resources effectively? fewer internal compliance resources - may need assistance in I’m sure if I asked a credit union about how they allocate reviewing and developing policies and procedures. Larger credit staff time, they would almost all say they would rather have it unions may need more assistance in managing the process allocated on member-focused activities and not compliance. of communicating, documenting, and monitoring policies and What credit union wouldn’t want to be procedures throughout the credit union. Once you’ve defined your spending its time making loans critical need, then you are half way to finding the right solution. instead of working on compliance? 2. How do you stay on top of all the information? Consider a solution that will help In 2012, the Dodd–Frank Act mandates more than 200 rules automate routine activities. that have not even been written yet. So how does your credit With automation, credit union stay on top of this overwhelming amount of information? unions will achieve increased You can certainly try it on your own as there are numerous accountability and consistency. first-rate sources in the industry to review. But if you decide For the smaller credit union to look for a solution, make sure that is directly linked to the that does not have a compliance Federal Register. The Federal Register is the official daily officer onsite, the automation will not only be a time saver but will also provide peace of mind. For the credit union that has a compliance officer or a shared compliance officer, the efficiencies gained could be dramatic when you consider that on average each new regulation may impact 16 programs or unique job roles1.34 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 34. Leveraging System Resources Relationships & Industry Knowledge for Optimal Performance & Sustained Growth of Our Clients and Business Partners 866.231.0545 | | LEVERAGE Partners with PCUA to bring ePurchasing to Pennsylvania CUs 4. How do you LEVERAGE and the Pennsylvania disseminate regulatory Credit Union Association (PCUA) are information to staff? collaborating to bring credit unions in Let’s say you are now aware Pennsylvania the Ventelligence system of the regulation, have interpreted along with its revolutionary buying it, and have developed your policies platform called ePurchasing. and procedures. How do you effectively reach all of the different touch points in your organization? This in itself can be a monumental tracking task. Consider a solution that is easy-to-use with a well-planned “The Association continually looks to execution model based on partner with providers that can enhance employee roles. Look for solutions the operations or services of our member that provide easy-to-read summaries credit unions,” said PCUA President/ that are accessible in a centralized area to CEO Jim McCormack. “We are pleased implement changes quickly. Last but not least, to partner with LEVERAGE to add look for a solution that will keep a time-stamped history. Ventelligence to our offerings.” 5. What will it cost if it’s not done right? Ventelligence, LEVERAGE’s solution It may be human nature to put off a project until you absolutely have that saves credit unions time, money, to complete it. Refusing to acknowledge the need for regulatory and resources, is a vendor management compliance and waiting until an examiner reports an unsatisfactory system that is quickly becoming a trusted examination is not the answer. In the long run, it will cost tool for contract management and more time and risk by delaying the implementation contract procurement. ■ and management of your compliance process. Look for a solution that will provide management tools that may be quickly accessed and implemented. Wouldn’t it be impressive to have reports ready for an examiner right up front? Considering these five questions will help clarify your needs and assist in making an informed decision with respect to managing the compliance process. ■ 1 Andy Greenawalt, CEO, Continuity Control “More Regulation Doesn’t Require More Staff” BankNews, February 2012. SIGNAL: Vol. 3, Issue 1 35
  • 35. Product DevelopmentOvercoming the Challenges of 2012Keith Hopkins, vice president, Product Support, LEVERAGE According to most experts, the economy is expected to experience And while efforts to level the regulatory playing field are welcomedmoderate growth in 2012. And while we’re all anxious for conditions by the financial services industry, these actions signal the need forto improve, there are still substantial barriers for financial institutions increased, across-the-board awareness of practices that are deemedto overcome before the industry returns to conditions that could be harmful to consumers by heightened regulatory standards.described as normal. We’ve known since before the CFPB was operational thatRestrictions on Revenue regulators would have their sights set on undisclosed overdraft News that the Federal Reserve is extending its efforts to hold interest programs. With this in mind, if you want to ensure that your creditrates at near zero into 2014 – along with continuing uncertainty in the union is in line with new regulations before your next compliancehousing sector – will likely prolong weakened earnings. Plus, a recent exam, ask yourself these questions:industry study found that revenue earned from overdraft programs in 2011 • Is our overdraft program fully disclosed?declined 10.9 percent collectively for banks and credit unions from 2010. • Does it monitor excessive usage?The reason for this is likely due to increased fees and a growing popularity • Do we have opt-in confirmation from all account holders who areof alternative sources of emergency cash, such as pay day lenders, pawn being charged overdraft coverage fees on electronic transactions?shops, and loans from family and friends. • Do our account holder notification materials include easy-to- Clearly economic conditions continue to pose challenges for understand explanations of our fees and processes?consumers, but increased overdraft fees charged by some financial Compliance Expertise is Essentialinstitutions are sending them elsewhere for a financial safety net. By Having access to a compliance expert can help your credit unionoffering your members a reasonably priced overdraft solution, you can avoid the stress of regulatory uncertainty and lead you through theprotect them from excessive fees, provide them with a proven safety ever-changing regulatory maze to make sure your overdraft programnet, and substantially improve your bottom line. meets all compliance requirements and exceeds your members’Attention to Consumer Financial Literacy Gets Serious service expectations. In the end, both your credit union and your With new director Richard Cordray now in place, the Consumer members will benefit.Financial Protection Bureau (CFPB) is wasting no time in focusingattention on financial products that harm consumers and make it more JMFA, a preferred business partner for the LSCU Service Corp,difficult for them to maintain control of their finances. The first order of is a leading provider of profitability and performance-improvementbusiness, announced by Cordray, is closer scrutiny of nonbank financial consulting. To learn more about JMFA, contact a LEVERAGEservices providers, such as payday lenders, check cashing stores, business development consultant at orcredit bureaus, and debt collectors, that have not previously undergone visit ■extensive federal examination of their operations. 36 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 36. NETWORK SERVICES CO-OP Network PAYMENT PROCESSING CO-OP ATM CO-OP Debit CO-OP Credit Full-Service & In-House OUR COLLABORATION CREATES THE CO-OP E-COMMERCE SOLUTIONS FAMILY OF PRODUCTS CO-OP Mobile AND SERVICES CO-OP My Deposit Offers Cynthia Adams anytime- anywhere access to her money for a home-field advantage even when her team is on the road. SHARED BRANCH SERVICES CO-OP Shared Branching CALL CENTER SERVICES CO-OP Member Services CO-OP Lending Services To learn more about the industry’s most comprehensive and innovative product suite, visit CO-OPFS.ORG.©2012 CO-OP Financial Services
  • 37. DIRECTORYLSCU Directory LEAGUE LEVERAGE22 Inverness Center Pkwy, Ste 200 April N. Ales, x1038 Finance & Administration Marvin Garland, x1102Birmingham, Alabama, 35242 Member Relations Specialist Scott Morgan, x1110 EVP & COO SVP, Finance & Administration marvin.garland@myleverage.com3773 Commonwealth Blvd scott.morgan@lscu.coopTallahassee, Florida 32303 David LeNoir, x2158 Transactional Services Member Relations Specialist Debbie Caruthers, x1116 Larry Rodriguez, x2169866.231.0545 Director, Accounting VP, Transactional ServicesAdministration Judy Scott, x1062Patrick La Pine, x1002 Member Relations Specialist Mike Couey, x2136 Janice Jordan, x2176President & CEO Accounting Manager Director, Transactional janice.jordan@myleverage.comCassandra Grayson, x1004 Education Chris Staggs, x2127 Win Cooper, x2115Association Services Chief of Staff Julianne Talley, x1148 Staff Accountant Sr. Transactional Services Director, Conferences julianne.talley@lscu.coopBrooke Collins, x1050 Susan Sungelo, x2153 Chris Dirmann, x1182Executive Assistant Teresa Gray, x2110 Staff Accountant Director, Card Director, Events teresa.gray@lscu.coopCommunications Angie Meisenheimer, x1114Mike Bridges, x1022 Brandy Norvell, x2172 David Todd, x1198 Staff Accountant Member Services RepresentativeVP, Communications & Marketing Events Coordinator Josh Booth, x1118 Robert Plant, x1194Amy Jowers, x1020 Becki Payne, x2129 Staff Accountant P/T Member Services RepresentativeDirector, Information Services Association Services Support Specialist Jason Neifield, x1142 Giles Paul, x1200Joseph Davis, x1014 Governmental Affairs Human Resources ManagerCommunications Coordinator P/T File Clerk Will McCarty, x2137 SVP, Governmental Affairs Di Troch, x1054 Angela Harris, x1190Compliance Operations Assistant Card Services ManagerBill Berg, x1028 Jason Cochran, x2159 angela.harris@myleverage.comVP, Compliance Training & Information Director, Legislative Affairs (AL) Sue McKenzie, x1124 Amy Bryant, x1196 Operations Assistant Sr. Member Services RepresentativeScott Morris, x2165 Jared Ross, x1012 amy.bryant@myleverage.comDirector, Compliance Training & Information Director, Legislative Affairs (FL) Tameka Dukes, x2178 Nicholas Hoffman, x1192 Shared Branching Manager Member Services RepresentativeCooperative Initiatives Blake Westbrook, x2164 CRS & Card ServicesLaura Vann, x2181 Grassroots & Political Action Coordinator (AL) Phillip Tyre, x1132 nicholas.hoffman@myleverage.comVP, Cooperative Initiatives Director, Information Technology Barbara Parsont, x1186 Andrew Gonzalez, x1010 Member Services RepresentativeAdena Whitman, x2134 Grassroots & Political Action Coordinator (FL) David Khoury, x1136 barbara.parsont@myleverage.comDirector, Member Relations Network Administrator Rosanna Pouza, x1184 Tracy Schimansky, x1008 P/T Member Service Representative Association Services Support Specialist William Ross, x1134 Information Technology Specialist 38 A Magazine of the League of Southeastern Credit Unions SIGNAL: Vol. 3, Issue 1
  • 38. Audit & Consulting Product Development Corporate Business Solutions NewGroundMallory Pennington, x2138 John Brumit, x1120 Streamline and enhance your payroll, Enhance your retail delivery with aDirector, Audit & Consulting Director, Product Development benefits administration, and employee combination of branding, consulting, legal compliance processes by outsourcing branch design and build, marketing, and to Corporate Business Solutions, a culture development.Bonique Turner, x2124 Business Development Professional Employer (PEO) andAuditor Mary Elicia Del Santo, x1144 Office Depot Administrative Services Organization (ASO) VP, Business Development Save money on office supplies, breakroom CU Members Mortgage supplies, promotional products, print-on-Lynda Knox, x2135 Earn fee income based upon your demand materials, furniture, computers,Service Corporation Support Specialist Scott Rosenthal, x1160 participation in the origination and/or and Business Development Consultant temporary funding of loans and build your Telecom RecoveryKathy Reynolds, x2121 mortgage loan portfolio.Auditor Quickly recover communications in the Anita Fumaria, CUNA Mutual Group event of a disruption in telephone service Business Development Consultant Insurance and protection for your credit through an affordable protection service anita.fumaria@myleverage.comMarya Sampson, x2132 union and members; lending solutions and that enables callers to get through to aAuditor Steve Pullara, x1164 marketing programs for bottom-line credit union’s main phone or fax number, Business Development Consultant impact; employee benefits to recruit and through rerouting technology and recover retain the right employees. inbound calls to mass notification.Product SupportKeith Hopkins, x1170 Michael Baswell, x2151 CUNA Strategic Services, Inc. Transworld SystemsVP, Product Management Business Development Consultant Access for credit unions to products, Across-the-board collections solutions services, and technologies. an emphasis on collecting negative shareLisa Hammock, x1146 Richard Abt, x1152 draft accounts. CU Solutions GroupDirector, Product Management Account Manager, Card Services Member enhancement solutions with Invest in America, Sprint, Turbotax, and Detect BSA/AML fraud with leading-edgeDeirdre Rhodes, x1104 others; website design, content, security, compliance and fraud detection software.Product Support Manager PARTNERS and applications solutions; marketing support; and HRN performance For more information on any of these CitiFinancial Auto solutions such as Performance Pro, solutions, contact a Business DevelopmentJean Noel, x1188 Solve out-of-area repossession needs Compease, and Policy Pro. Consultant at Support Specialist with experts dedicated to credit unions with the most up-to-date GE For information on partnership with information including, state laws, FDCPA Take advantage of preferred auction lanesLori Vary, 941.747.9646 LEVERAGE, contact a Product Development laws and regulations, and the newest and best-in-class processes to maximizeDirector, ePurchasing Consultant at tracking software. your recovery dollars for auto CO-OP Financial Services John M. Floyd & AssociatesBrandt Vinson, x1044 Enhance services to your members by Earn non-interest income and provideePurchasing Coordinator expanding your ATM service delivery an overdraft protection program to channels through more than 28,000 members.Rosanna Jacobsen, x1096 surcharge-free ATMs.Director, Compliance Solutions Landrum Professional ComplyTrac Outsource most of your daily Automated Compliance Solution, not just resources functions with LandrumMarketing an information resource, it streamlines Professional, a full-service PEO.April Banta, x1162 compliance procedures and reducesDirector, Marketing NADA costs for credit unions through procedural Access the most current used controls to meet compliance requirements values and new vehicle invoices for a wide on a single platform and helps creditDetra White, x1156 range of vehicles, 24/7. unions effectively execute regulationsProduction Artist through an automated software.detra.white@myleverage.comRon Dod, x1030Marketing SIGNAL: Vol. 3, Issue 1 39