CURRENT Newsletter | 11 August 2020 - Virginia Credit Union League

HR professionals find themselves juggling the demands of a changing business model, ensuring the necessary talent to be successful is in place, managing employee productivity and engagement needs and implementing workplace health and safety programs.

At the same time, demands for social justice and equality are shining a new light on diverse and inclusive talent practices.

Your League will offer an HR Dialogue and Peer-to-Peer Roundtable on Aug. 20, designed to help you identify resources to:

aid stressed employees (including those with dependency issues, mental health issues, and dangerous home-life situations),
support telework/remote staff,
boost employee morale,
ensure a safe/healthy workplace,
create an inclusive workforce,
and more!

Don’t expect “legal” advice; expect practical, real-life advice on successfully managing today’s most-challenging HR-related issues!

Panelists:

Ashley Utz (CUNA Mutual Group)
Melissa Alexy (Langley Federal Credit Union)
Cory Cigler (NextMark Credit Union)
Carole Cowling (ABNB Federal Credit Union)
Rosemary O’Steen (Fort Lee Federal Credit Union)

League’s Free ‘Shift Happens’ Webinar Series Continues Aug. 18

Your League is offering an ongoing series of free webinars, which we’ve titled “Shift Happens.” Registration is now open for the following sessions:

Leading Effectively in Times of Uncertainty and Change (Aug. 18)
Helping Children with Anxiety During a Pandemic (Aug. 25)
Compassionate Member Service (Sept. 1)

Learn more

Also available are recorded versions of previous sessions.

At present, you can access the first installment of the Shift Happens Series: How Leveraging Agility Will Help You Meet Uncertainty Head-On. The webinar details how Agile Methodology is being utilized across top industries to not only reduce cost but deliver more value faster, with less risk and with better quality!

View the video

CUs Face New Threats of Lawsuits Related to Overdraft Fees

Plaintiff attorneys continue to send demand letters and/or file lawsuits against credit unions alleging improper assessment of overdraft and/or NSF fees. Reports of these cases are occurring at a faster rate than the past.

Recent trends also show smaller credit unions are being targeted. Plaintiff attorneys pursue potential clients through websites and social media – some websites even identify specific financial institutions. They also search for member account agreements and other docs on CU websites.

Be aware: a Washington, D.C.-based law firm may be sending demand letters to area financial institutions.

Here are recent CUNA Mutual Group Risk Alerts related to overdrafts:

Overdraft / NSF Fee Demand Letters and Lawsuits Continue (May 5, 2020)
Spike in Overdraft / NSF Fee Demand Letters Witnessed By Credit Unions (Aug. 27, 2019)
Overdraft / NSF Fee Lawsuits Again Target Credit Unions (April 4, 2019)
Credit Unions Face Overdraft Fee Lawsuits (July 18, 2018)

We encourage you to review the Overdraft Payment Program resources on League InfoSight, as well. Seek legal advice, if needed.

Free Webinars on Virginia’s COVID-19 Workplace Safety Standards, Leave Options

Your League, in partnership with the Woods Rogers law firm, offered free webinars Aug. 5 on two critical topics:

Compliance with Virginia's first-in-the-nation workplace safety standards for the COVID-19 Pandemic, and
Pandemic-related leave issues—including questions about childcare as K-12 school districts announce a combination of in-person instruction and virtual studies for the upcoming school term.

Archived videos of the two sessions are available on YouTube, as are numerous resources from the Woods Rogers team.

Learn more

League Co-Hosting Webinar Series for Small CUs

Start adapting industry best practices to the unique challenges of your small credit union. CUNA-League System Small CU Webinar Series is a new live and recorded webinar series that’s free for CUNA and League members. It runs through Spring 2021. Get impactful best practices relevant to small credit unions on hot topics, including member experience, digital marketing, lending and more.

Upcoming sessions include:

Getting to know your members A LOT better and why DEI matters (Aug. 18)
Serving members online and best practices in fighting fraud (Aug. 25)
Succession Planning (Sept. 1)

See a full list of free webinars and register here.

Also available is the recorded version of the Aug. 4 webinar titled “New member growth: Learn from the best in the industry.”

News About Credit Unions

CUNA Mutual Group Partners with MGIC to Provide Private Mortgage Insurance to CUs

CUNA Mutual Group and Mortgage Guaranty Insurance Corporation (MGIC), the principal subsidiary of MGIC Investment Corporation (NYSE: MTG), have announced a partnership to provide private mortgage insurance to credit unions.

Learn more

Registration Open for CUNA Mutual Group’s Virtual Discovery 2020 Conference

Join thousands of credit union leaders across the country online, Thursday, August 13, for a day of Discovery. This free conference is designed to help boost your strategic planning with innovative ideas and key insights. 

Learn more

Pandemic Response

Preparing for COVID Loan Losses

Last fall, the $7.9 billion Patelco Credit Union conducted a roundtable disaster planning test to prepare for a pandemic. Susan Gruber, CFO for the Dublin, Calif.-based credit union, was quick to point out that it was purely a coincidence.

Gruber and other credit union executives shared their insights on how they are preparing for the wave of loan defaults, delinquencies and bankruptcies that is bound to come later this year and next year because of the COVID-19 health and economic crisis. But no one really knows how big that wave will be. What’s more, to mitigate loan losses, they said it may be a good time for credit unions to explore expense reductions, such as renegotiating vendor contracts, which can save millions of dollars.

Learn more

Compliance / Regulatory Affairs

FinCEN Issues FAQs Regarding Customer Due Diligence Requirements

The Financial Crimes Enforcement Network (FinCEN), in consultation with the federal functional regulators, issued responses to three frequently asked questions (FAQs) regarding customer due diligence (CDD) requirements for covered financial institutions.

The FAQs clarify the regulatory requirements related to obtaining customer information, establishing a customer risk profile, and performing ongoing monitoring of the customer relationship.

Learn more

FFIEC Issues Statement on COVID-19 Loan Accommodations

The Federal Financial Institutions Examination Council (FFIEC) last week issued a statement setting forth prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers as initial coronavirus-related loan accommodation periods come to an end and they consider additional accommodations.

The agencies, which include NCUA and the Consumer Financial Protection Bureau (CFPB) encourage financial institutions to consider, when appropriate, prudent options for additional accommodations that can ease cash flow pressures on affected borrowers, improve their capacity to service debt, and facilitate the financial institution’s prudent management of its loans, consistent with applicable laws and regulations.

Learn more

MLA Card Fee Spreadsheet Updated

CUNA has updated its Military Lending Act (MLA) credit card fee spreadsheet for the first quarter of 2020. The updated resource can be found in the CUNA Compliance Community’s “CUNA Compliance Tools” folder in the file share library, and under the “Resources” tab in CUNA’s MLA e-Guide.

The spreadsheet is necessary because a credit union may exclude a bona fide credit card fee from the military annual percentage rate (MAPR) if the fee is considered “reasonable,” under the MLA rule.

Learn more

Financial Services / Economic News

FI Execs Don’t See Economy Recovering Anytime Soon

More financial institutions are preparing to deal with the economic fallout of the coronavirus pandemic well into the future, according to a new survey of industry executives.

More than one in three executives said they expect to be grappling with the pandemic’s impact into 2022 or later, according to a survey of CEOs, presidents and chief financial officers from 557 banks by Promontory Interfinancial Network that’s scheduled to be issued next week. About 26% said they expect the economic fallout to linger into the back half of next year, the survey said, with another 28% anticipating a bounceback in the first half of 2021.

Only about 7% of executives predicted that the economic impact from the pandemic will have run its course by this fall and winter, when health experts have warned of the possibility of a second wave of cases. All but 9% have abandoned the hope of a snapback, or “V-shaped” recovery, in the economy, with the rest expecting a protracted climb from the shutdowns. (American Banker, Aug. 10)

Engagement Is Key to Attracting Gen Z, Millennials to Financial Institutions

Millennials have been joined by adult members of “Generation Z” in boosting the importance of digital-first consumers who are driving growth for financial institutions, according to a new white paper from Ondot Systems.

The acceleration of digital-first banking has so far favored larger banks, but smaller banks and credit unions must pay attention to the generations currently entering the consumer base, the report said. The white paper defines Generation Z adults as those from 18-24, and Millennials as ranging from 25 to 39.

“Many smaller banks and credit unions tell us they are dealing with a graying customer base, and struggling to renew their membership,” said Chris Harris, head of marketing at Ondot. “Even for growing financial institutions, this is a critical generation that will define winners and losers in banking for the next two decades or more.”

Learn more

Household Debt Falls for First Time since 2014

After setting records in 23 consecutive quarters, total household debt fell in the second quarter for the first time since 2014 as shutdowns associated with the coronavirus pandemic tamped down consumer spending, the Federal Reserve Bank of New York said Thursday.

Total household debt fell by 0.2% from three months earlier, to $14.27 trillion, led by a $76 billion decline in credit card balances, according to data compiled by the New York Fed and Equifax. Credit card balances had peaked at an all-time high of $930 billion at the end of 2019, but have dropped by 12% since as many consumers largely stopped traveling, visiting restaurants and curbed other activities to comply with social distancing mandates.

(American Banker, Aug. 6)

Coronavirus May Forever Change Cash

Before COVID-19, cash usage at the point of sale was already on the decline, prompting a brief clash between retailers and governments over the requirement for cash acceptance.

Two key factors leading to a decline in cash usage are the consumer shift to e-commerce as well as the consumer shift to contactless payments when buying in-stores. Based on data from CardFlight’s Small Business Impact Report for the week of June 29-July 5, contactless payment usage in stores has grown by over 100% when compared to the baseline week of March 2-8, which was prior to the COVID-19 national emergency being declared in the U.S.

Similarly, card not present (CNP) usage for the same small businesses covered in the CardFlight report has shown a steady, week-to-week growth since the first week of March.

Learn more

Risk Management

Eligible CUs Should Have Received Equifax Settlement Claim Info

The settlement administrator for the Equifax data breach settlement has now sent out information on making a claim to credit unions it knows to be eligible. Settlement was announced in June for the Equifax data breach lawsuit stemming from a 2017 data breach that exposed the personal information of more than 145 million consumers.

Eligible credit unions should have received their packet of information by now. If a credit union believes it is eligible and has not yet received the packet, it may contact the settlement administrator directly at: info@equifaxfidatabreachsettlement.com or 855.968.4292 so that a packet may be sent.

Learn more

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