CURRENT Newsletter | 11 May 2021 - Virginia Credit Union League

For the past two years, your League has been part of the Commonwealth Connect Coalition, which has brought together more than 80 groups dedicated to bringing universal broadband to Virginia within a decade.

On May 19 (9:30 a.m.-10:30 a.m.), the Coalition will join us for a virtual informational meeting on the role credit unions can play in advancing universal broadband access.

Access to high-speed internet touches almost every aspect of daily life and is a necessity for participating in modern life, a point driven home during the pandemic. Broadband access was a recurring theme in the calls we hosted with federal lawmakers and state lawmakers debated a half-dozen broadband bills this past session, half of which became law.

The Coalition is now soliciting financial support from businesses across all industries to gain access to federal funding to support the expansion of and access to broadband service.

“We believe this is an important initiative that supports our communities -- providing resources, access to services, education and so much more, including easier access to the wealth of services offered at our credit unions,” notes League President Rick Pillow. “As this initiative advances at both the state and federal levels, we believe it’s critical that credit unions are engaged and active supporters.”

Your First Step Toward the C-Suite: SRCUS Registration Open Through May 21

Time is running out to register as a new first year student for the Southeast Regional Credit Union School (SRCUS) taking place online June 7-11.

If your goals include advancing to C-Suite and upper management, this three-year course is the path you want to be on! The first-year curriculum includes coursework in business writing, understanding ratios, financial analysis, negotiations and, most importantly, unparalleled networking with like-minded peers from across the southeast region.

This year’s virtual opportunity allows you to start your three-year journey at reduced tuition expense and no travel cost with the ease of a slightly reduced time commitment. Ready to join the 118 credit union professionals who have successfully completed the immersive program?

Learn more

Fiserv Webinar May 27 on Fraud Trends

As part of the FISERV series for 2021, please join us May 27 as FISERV will provide an update on fraud and the continued impact the pandemic has had on card fraud.

As we begin to come out of the pandemic and life gets back to a more normal sequence, how will fraud-related events impact issuers, acquirers and your cardholders?

Learn more about what you can do to continue to battle fraud.

CUNA Mutual Group Webinar: Navigating the Regulatory Landscape

CUNA Mutual Group is offering the following training opportunity on May 19: Navigating the Regulatory Landscape. Join this session to get tips for managing the latest regulatory and compliance trends.

AACUC Annual Conference Registration

In light of on-going COVID-19 developments and after thoughtful discussions with its Board of Directors, AACUC has decided to move its 22nd Annual Conference to a fully online, virtual experience that will take place on Monday, Aug. 16 - Saturday, Aug. 21, 2021.

A virtual event makes it possible to broaden our offerings for both learning and engagement.

Please register here.

NOTE: The Virginia League sponsors an annual scholarship for the AACUC Annual Conference, allowing one Virginia-based African-American credit union professional or official to attend the conference at no cost. Details on the scholarship will be available soon.

Credit Unions Receive Letters Suggesting Patent Infringement

Several credit unions have received letters from counsel representing BioCrypt Access LLC (BioCrypt) suggesting they may be infringing on patents that cover many applications and devices in the biometric identification and access space. The letters refer to biometric technology used in credit union mobile / digital banking apps and seek a license for BioCrypt’s patent portfolio.

The letters indicate that the technologies used by mobile/digital banking apps offered by credit unions are protected by BioCrypt’s portfolio of six patents covering applications and devices in the biometrics and access space, including U.S. Patent No. 10,515,204 – Method and System for Securing User Access, Data at Rest and Sensitive Transactions using Biometrics for Mobile Devices with Protected Local Templates (204 patent).

Learn more

Social Responsibility Awards: Get Recognized for Your Good Works!

The League-CUNA Social Responsibility awards are a way for you to showcase the extraordinary efforts you are taking to serve your members. The deadline is June 30!

There are four entry categories:

Desjardins Youth Financial Education Award for excellence in youth financial education
Desjardins Adult Financial Education Award for excellence in adult financial education
Louise Herring Philosophy in Action Award for excellence in member service.
Dora Maxwell Social Responsibility Award for excellence in community service and outreach.

Start your entry here. The time period covered for your application should be the calendar year through June 30, 2021. If you have additional questions after reading this FAQ, please don't hesitate to contact your League’s Mary Amyx - 800.768.3344, ext. 630.

Advocacy

Trades Oppose CFPB Plan to Delay Foreclosures to 2022

NAFCU and CUNA filed letters Monday opposing the CFPB’s proposed rule that would prevent most foreclosures from starting before year’s end.

The CFPB announced the proposal April 5 as part of a plan to make sure the millions of Americans who are behind on their mortgages because of the COVID-19 pandemic have enough time to catch up or reach agreements with their borrowers.

Monday was the deadline for comments, and the CFPB plans to implement some form of the rule by Aug. 31. It includes a provision to require most delinquencies to undergo a pre-foreclosure review period that ends no sooner than Dec. 31 “to make sure borrowers aren’t rushed into foreclosure when a potentially unprecedented number of borrowers exit forbearance at around the same time this fall,” the CFPB said in its April 5 news release.

The rule only applies to mortgages on primary residences and only on institutions with more than 5,000 mortgages. Credit unions with more than 5,000 first and second-lien mortgages accounted for $1 trillion of the movement’s $1.86 trillion in assets as of Dec. 31, and just over half of its 125.7 million members.

Learn more

One of NCUA’s RBC Proposals Gets Support From CUNA, Which Believes Entire Rule ‘Functionally Unnecessary’

CUNA told NCUA it supports one of the agency’s potential approaches to simplifying risk-based capital (RBC) requirements, but also repeated its long-held position the 2015 RBC rule is “functionally unnecessary.”

CUNA’s comments come after NCUA issued an advance notice of proposed rulemaking (ANPR) at its January board meeting.

As CUNA noted, the ANPR contains two approaches to simplify RBC requirements:

The first would replace the 2015 RBC Rule with a “risk-based leverage ratio” (RBLR) requirement that uses relevant risk attribute thresholds to determine which complex credit unions would be required to hold additional capital (buffers).
The second would retain the 2015 RBC Rule but provide eligible complex credit unions with the option to instead comply with a “complex credit union leverage ratio” (CCULR) framework to meet all regulatory capital requirements.

CUNA said it supports the second approach, involving the CCULR.

“While the requirements of the 2015 RBC Rule are complex and compliance may be onerous for some, it is helpful that credit unions know exactly how they will be impacted under the upcoming Rule,” CUNA wrote in its comment letter. “Further, though the effective date of the 2015 RBC Rule has been delayed until 2022, credit unions have made numerous changes over the years to prepare for the new requirements. With that said, we believe providing complex credit unions with an alternative choice is the preferred approach.

Learn more

Compliance / Regulatory Affairs

Two Members of Congress Call for ‘War-Like Footing’ to Fight Money Laundering and More

Lawmakers Tom Malinowski (D-NJ) and Sheldon Whitehouse (D-RI) have written to Treasury Secretary Janet Yellen asking her to impose a “war-like footing” in the U.S. Treasury Department to combat money laundering, corruption and kleptocracy.

The letter notes Treasury has the authority to rapidly expand AML obligations, which has been recommended for decades by law enforcement, anti-corruption watchdogs, and the FATF (Financial Action Task Force).

“With beneficial ownership reform on its way, the top policy priority in the fight against dirty money should now become the expansion of AML obligations to cover financial facilitators and professional service providers that can enable corruption.”

The letter notes that more than $13 trillion is reported to be invested in U.S.-based private equity and hedge funds, which are subject to very little ownership or money laundering vetting, Regulation Asia reported.

Learn more

CUNA BSA/AML Certification eSchool with NASCUS Offers Critical Training

With a new administration and the recently passed Anti-Money Laundering Act of 2020, credit unions are preparing for new Bank Security Act and Anti-Money Laundering (BSA/AML) developments. To anticipate that need for credit unions, CUNA announces CUNA BSA/AML Certification eSchool with NASCUS set to begin July 16, 2021.

“The information given is most valuable and up to date with all new changes,” said past attendee Lauren James, BSA specialist at Community Financial CU. “Definitely a game changer.”

“The fact is, examiners expect BSA officers to be certified. Therefore, this training is both timely and essential. But more than that, this training educates compliance professionals to support their efforts to protect the credit union and its members from fraud and other crimes,” said Melisa Kallestad, director of compliance education for CUNA. “These regulations help protect members from human traffickers and those who financial exploit elders. They also protect against a wide range of fraud from ID theft to romance scams and cyber-crimes.”

Learn more

Financial Services / Marketplace News

Credit Unions Using Old Tool — Text Messaging — to Connect with Members

Credit unions are going old school by increasing the use of text messaging to keep up with members.

While the feature isn’t new, many U.S. businesses are behind the curve in terms of using short message services, or SMS, to communicate to customers. But that is changing, and credit unions are getting in on the action, largely to confirm members’ identities when they look to log into an account.

"Who wants to get a phone call to remind them that their loan payment is overdue when they could get a text that even includes a link to quickly and efficiently resolve the situation?" said Tom Sheahan, CEO of Red Oxygen, a San Francisco company that provides SMS solutions.

Most consumers are already used to getting texts with messages informing them that deliveries are on the way or that a car is ready to be picked up from the mechanic.

A few years ago, there was concern among financial firms that consumers didn’t want companies reaching out to them via text — phone calls and emails seemed to be more professional. But as people are getting busier, and the world moves faster, texting has become more acceptable because of its speed and response rate.

People are more likely to read the message quickly — within moments in most cases — and respond.

Learn more

Homebuying Expected to Extend Mortgage Run

Even in a higher rate environment, mortgages should remain an earnings tailwind for banks with increased demand for home purchases and better-than-normal refinancing activity expected to boost the business.

Despite a recent pullback, rates have been on the rise this year, with the 30-year mortgage rate jumping roughly 50 basis points over the course of the first quarter, according to survey data from Freddie Mac. Refinancing business, which boomed in 2020, has trended lower in 2021, and it's typical for the activity to drop off alongside an increase in rates.

As refinance volumes have declined, some lenders have reported tighter margins. But banks are also reporting a hot purchase market with plenty of buyers and tight inventory, stemming from halts on foreclosures and other responses to the pandemic. During investor calls covering first-quarter earnings, several U.S. bank executives said their mortgage pipelines remained healthy, and that the strong purchase market showed little sign of slowing down.

"The economy rebounding has also led to continued strong demand across all of our markets. Our pipeline is up strongly year over year," said Hafize Gaye Erkan, president of First Republic Bank. Residential, one- to four-family mortgages constitute 56.59% of First Republic's loans, the highest concentration among the banks with the 20 largest mortgage books.

(S&P Global Market Intelligence, May 10)

Credit Unions for Kids Marking 25th Anniversary With YouTube Special

Credit Unions for Kids reported it is now celebrating its 25th year of a successful program with its network of credit union partners and hospitals, and will host an event on YouTube to mark the milestone.

“Since 1996, thousands of credit unions have come together, under the banner of Credit Unions for Kids, to raise more than $150 million for tens of millions of children that are sick and injured,” noted Credit Union for kids.

To celebrate, on June 2, Credit Unions for Kids will host an event online from 1-1:30 ET. To register, go here.

“You can expect to hear from industry leaders discussing the milestones CU4Kids has reached, the innovative ways they’ve raised funds, and why they do so,” the organization said. “CMN Hospitals representatives will also discuss updates to the program, recommendations on how to easily raise money, and the future of the program.”

Learn more

Education & Training

NASCUS Offers a Cannabis & Hemp eSchool

The National Association of State Credit Union Supervisors (NASCUS) is pleased to offer a Cannabis/Hemp eSchool, featuring guest speaker Deirdra O’Gorman Founder & Principal, DX Consulting.

Sessions will cover:

Recent regulatory updates
How businesses are evolving
What financial institutions should be thinking about for their cannabis and hemp banking programs
Business payments

Source: NASCUS

Chapter News

Tidewater Chapter Charity Golf Tournament Tees Off June 4

The Tidewater Chapter will hold its 8th Annual Charity Golf Challenge on June 4 at Sewells Point Golf Course in Norfolk. ALL credit unions – regardless of location - are invited!

Format will be four-man captain’s choice. The cost will be $100 per player. Proceeds will benefit Children’s Hospital of the King’s Daughters, our local Children’s Miracle Network Hospital! Please join us for this exciting event, which has raised more than $100,000 for CHKD during the past seven years.

Learn more / Register

Operations

A Seismic Year Opens DEI Advancement Opportunities

A year after credit unions took a stand for diversity, equity and inclusion (DEI), what progress has been made? The short answer is that while the ground beneath us has shifted, DEI has emerged as an established feature of the credit union ecosystem.

For their part, credit unions found themselves addressing DEI on two fronts. First, they were prompted by the market to position themselves in relation to civil rights calls for racial justice and calls for greater financial inclusion to address growing inequalities. Second, credit unions were nudged to examine themselves internally, in terms of how their organizations measured up on staff and leadership diversity, the degree of equitable work outcomes, and levels of inclusivity and belonging their work cultures nurtured. Now, one year later, we can begin to assess what progress has been made and what lies ahead.

Learn more

Strategic Considerations for Effectively Implementing DEI Initiatives

As we navigate the strategic considerations around implementing diversity, equity and inclusion (DEI) initiatives within our credit unions, it is important to take a holistic approach to this work. It’s messy, uncomfortable and needs to be addressed thoughtfully, with empathy, courage and curiosity.

DEI is top of mind and many organizations are just not sure where to start. There is fear of missteps and getting it wrong. Getting comfortable with being uncomfortable is not an easy ask. Here are a few questions to help center the discussion and begin to lay the foundation:

What is your credit union’s mission and vision? And, does this align with your “why”?

Does your current organizational structure support DEI or hinder it?

What aspects of DEI are most important for your credit union to address?

Is diversity distributed across all levels of the credit union?

Does the diversity of your staff, leadership and board reflect the diversity of your members

Learn more

Risk Management

Ransomware Incidents, Costs on the Rise, and No Target Is Too Small

Ransomware attacks have increased 350% since 2018, according to cybersecurity firm Purplesec. The global cost of these attacks grew from $8 billion in 2018, to $20 billion in 2020. The average ransom demanded by hackers exceeded $8,000 in 2020, up from $4,300 in 2018. However, Purplesec’s report notes that the greater cost to businesses is in time lost while they secure remaining files and networks, and try to recover lost work.

The report found that downtime costs were 23 times greater than the average ransom requested in 2019. In 2020, businesses lost an average $283,000 per ransomware incident due to downtime, up from almost $47,000 in 2018.

The growth in attacks stem from malicious actors offering ransomware as a service or ransomware kits that are inexpensive and easy for any would-be hacker to use, even without much technical expertise, according to Purplesec.

Small businesses that don’t have the resources or expertise to develop comprehensive cybersecurity strategies and infrastructure may be easy prey for hackers, according to Purplesec. They report notes that small businesses accounted for 43% of all cyber attacks.

Learn more

« Return to "CURRENT Newsletter" Go to main navigation