CURRENT Newsletter | 12 August 2021
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Featured News
- League President/CEO Carrie Hunt Offers Insights on Advocacy Issues at the Federal Level
- League Urges Ginnie Mae to Adopt Parity for CUs in Issuer Program
- CONNECT Conference Features Session on Understanding CU Financials
- Finding Our ‘Movement of Excellence:’ Strategies for Growth in Life, Work
- How to Launch a Credit Card Program at Your CU: Aug. 26 Webinar
- Bank Regulators Issue Guidance on Authentication, Access to Financial Services
- Health Officials Expect More Workplaces to Mandate Vaccines
Advocacy / Governmental Affairs
- CUNA Backs Amendment to Block Expanded IRS Reporting Requirements
- Trades Oppose Broader Fundraising Powers for NCUA
Compliance / Regulatory Affairs
- Fed Proposal is Threat to Consumers, Card Issuers, Payments System
- NCUA Details Capitalization of Unpaid Interest Rule to CUs in New Letter
- CUNA Introduction to Compliance eSchool Coming in October
Chapter News
News From Credit Unions
- Chartway’s We Promise Foundation Raises More Than $60,000 for Children Facing Medical Hardship or Illness
- Hampton Roads Educators CU Wins First Place in State Social Responsibility, Member Service Awards
- BayPort Credit Union Wins Top Industry Awards in Community Giving, Financial Education, and Member Service
Financial Services / Economy
- July Consumer Prices Jump 5.4%, But Core Inflation Rises Less Than Expected
- CUs Lose Share of Autos, Credit Cards
- Soaring Home Prices are Spooking Buyers
- Student Loan Relief is Extended Until January 2022
- Workers Are Saving, But Few Feel Very Confident About Retirement: Study
- CoreLogic: No Foreclosure Wave in Sight
Operations
Featured News
League President/CEO Carrie Hunt Offers Insights on Advocacy Issues at the Federal Level
Advocacy is Job #1 at your League! As detailed in the first in a series of advocacy-related videos from League President/CEO Carrie Hunt, there is no shortage of legislative and regulatory issues demanding the attention of credit unions.
From consumer protection to the Community Reinvestment Act and its possible extension to credit unions to NCUA’s request of Congress that it be given power to supervise third-party vendors and CUSOs, the scope and importance of these and other issues requires we remain vigilant, informed and engaged!
View Carrie’s video update here.
League Urges Ginnie Mae to Adopt Parity for CUs in Issuer Program
Your League last week submitted a response to the recent Request For Input (RFI) issued by the Government National Mortgage Association (“GNMA” or “Ginnie Mae”), titled "Eligibility Requirements for Single Family MBS Issuers."
The League generally agrees with Ginnie Mae’s intent to establish requirements that address each issuer’s mortgage banking activity and risk profile and make it easy to calculate an issuer’s required capital, notes the letter.
However, the RFI contains an assumption that counterparty risks to Ginnie Mae are the same for credit unions and non-bank mortgage lenders.
"We do not believe Ginnie Mae’s treatment of credit unions as “nonbanks” is appropriate," writes the League. "Ginnie Mae should properly recognize credit unions as depository institutions that are strictly regulated by the National Credit Union Administration (NCUA). NCUA has stringent capital requirements for insured credit unions. Grouping credit unions with nonbank mortgage lenders fails to recognize credit unions as heavily regulated and well-capitalized depository institutions."
Learn more
Related: Ginnie Mae Should Treat CUs as ‘Depository Institutions’
CONNECT Conference Features Session on Understanding CU Financials
Join your peers at CONNECT on Sept. 28-29 in downtown Richmond for two days of learning, professional development, peer networking and a lot of fun! Not everyone has an accounting background or works in a position focused on the CU’s financials, but as an aspiring next-gen leader at your credit union, it’s important you have a working knowledge of the key elements of the balance sheet and income statement.
In a special session at CONNECT, you’ll learn about key financial statement ratios, how to read financial statements and how to interpret your CU’s current and historical performance.
Finding Our ‘Movement of Excellence:’ Strategies for Growth in Life, Work
Dr. Samuel Jones will keynote Ignite 2021, offering insights on identifying the "right" strategies, prioritizing principles of adaptability, and developing innovative solutions, collaboration and personal accountability measures that help us grow as individuals and as members of a team. A crisis can represent a make-or-break moment, but the right strategies and finding ways to transcend the stress crisis brings can help us channel purpose into performance.
Now slated for Nov. 10-12, 2021 in Virginia Beach, Ignite will be hosted at the Marriott Virginia Beach Oceanfront.
An event schedule, information on our educational offerings and details on our keynote speakers are available here.
- Registration for the event is now open! Register here.
- Want to book your hotel stay now? You can do so here.
How to Launch a Credit Card Program at Your CU: Aug. 26 Webinar
Think you can't jump into the credit card space … think again! With FISERV's new Credit Choice solution, you can offer a competitive card for your members without having to be a card expert. Learn how you can partner with FISERV during our Aug. 26 webinar on a top-of-wallet product for your members.
Register for this free webinar
Bank Regulators Issue Guidance on Authentication, Access to Financial Services
The Federal Financial Institutions Examination Council, a federal government interagency body composed of five banking regulators, issued new guidance on risk management principles and practices for access and authentication to financial institution services and systems.
The guidance highlights the current cybersecurity threat environment, including increased remote access by customers and users, and attacks that utilize compromised credentials. It also highlights risks arising from push payment capabilities.
Moreover, the guidance recognizes the importance of financial institutions' risk assessments to determine appropriate access and authentication practices, and it supports a financial institution's adoption of layered security.
Finally, it discusses how multifactor authentication can better mitigate risks and includes examples of authentication controls and a list of government and industry resources and references to assist financial institutions with authentication and access management. (Market Intelligence, Aug. 11)
Health Officials Expect More Workplaces to Mandate Vaccines
More workplaces will likely require employees to be vaccinated once the Food and Drug Administration provides full licensure of the Pfizer vaccine, expected in September, Dr. Danny Avula, the state’s vaccine coordinator, said Tuesday at a Virginia Department of Health media briefing.
“COVID is not going to go away after this delta variant,” Avula said, “and we are going to see likely future variants, and we are going to need to learn how to live with this disease. Vaccination has to be the bedrock of that along with all those other layers of prevention and mitigation.”
In the past few weeks, Virginia has seen an increase in vaccination requirements, including of state employees, and Avula expects more to come.
Meanwhile, VDH has set up a site where Virginians can download their vaccination records as PDFs to present them at work or at other locations that require vaccination proof. Avula said that the department is working on a platform to provide QR codes for individual vaccination records, although VDH will not purchase or manage the platform, which is expected to be ready in a few weeks.
Advocacy / Governmental Affairs
CUNA Backs Amendment to Block Expanded IRS Reporting Requirements
CUNA wrote in strong support of an amendment to the Senate Budget Resolution that would block expanding taxpayer information reporting requirements for financial institutions. The amendment was offered by Sen. Mike Crapo (R-Idaho), in response to an administration proposal that financial institutions be required to report additional accountholder information to the Internal Revenue Service. It was voted down Tuesday afternoon by a 50-49 vote.
“Banks, credit unions, and other entities would be required to annually report to the IRS the gross inflows and outflows of account holders (businesses and individuals) with a breakdown for cash, transactions with a foreign account, and transfers to and from another account with the same owner,” the letter reads. “CUNA remains concerned about the effect this proposed new requirement will have on credit unions. Privacy and data security are paramount issues. Whether it is the massive data breach at the federal Office of Personnel Management in 2014 or this year’s IRS leak of federal tax returns of many wealthy Americans, CUNA remains doubtful that such data will be safe and private.
Trades Oppose Broader Fundraising Powers for NCUA
CUNA and NAFCU urged the Senate Banking Committee to reject the NCUA’s request for broader authority to raise Share Insurance Fund premiums, saying the current rules have proved ample to cover systemic risks.
Congress created the National Credit Union Share Insurance Fund (SIF) in 1970 to insure member deposits up to $250,000. It put the NCUA in charge of managing it.
The NCUA funds it through premiums paid by credit unions to keep its equity ratio at a “normal operating level” of between 1.2% and 1.5%. The NCUA board sets that level, which is now 1.38%. Amounts collected in excess are returned to credit unions.
NCUA Chairman Todd Harper asked Congress in April to consider revising those rules to give the NCUA powers that more resemble those granted to the FDIC for banks.
Compliance / Regulatory Affairs
Fed Proposal is Threat to Consumers, Card Issuers, Payments System
America’s credit unions vehemently oppose any regulation or legislation that would impact the operation of credit or debit cards, CUNA wrote to the Federal Reserve Wednesday. The Fed proposed a rule to require debit card issuers to offer two unaffiliated networks which must also be capable of processing transactions under a new framework of expectations surrounding merchant type, transaction and location.
“The proposed changes will likely accelerate the decline in revenue from debit card transactions while increasing compliance costs associated with the requirements to ensure that all possible debit transactions have two card networks available,” the letter reads. ‘’Furthermore, adding layers of unnecessary complexity onto the debit card networks can only increase cybersecurity risks. These costs and reductions of revenue will likely further accelerate the loss of locally owned and operated cooperative credit unions, which can make the delivery of financial services to those of greatest need even more challenging.”
NCUA Details Capitalization of Unpaid Interest Rule to CUs in New Letter
Last week, the NCUA Board issued a letter to credit unions (21-CU-07) on Capitalization of Unpaid Interest. On June 24, 2021, the NCUA Board unanimously voted to lift the prohibition of capitalization of interest in connection with loan workouts and modifications from part 741, Appendix B.
CUNA Introduction to Compliance eSchool Coming in October
CUNA Introduction to Compliance eSchool, to be held in three Wednesday sessions beginning Oct. 13, will provide information needed by people new to the world of credit union compliance.
“Participants will learn tips and tricks for figuring out where to start in the role of a new compliance officer, including an overview of key resources and tips on dealing with regulators,” said Jess MacLagan, instructional design manager – compliance for CUNA, and previously a credit union compliance officer.
Chapter News
Tidewater Chapter Meets Sept. 9
Kathryn Ryan, of Children’s Hospital of the King’s Daughters, will be the featured speaker and special guest at the Tidewater Chapter's Sept. 9 meeting. The Chapter will be presenting proceeds from its recent golf tournament fundraiser to CHKD, a Children's Miracle Network Hospital.
Date: Sept. 9. Location: Greenbrier Country Club (1301 Volvo Parkway Chesapeake, VA 23320) Time: 6 p.m. social; 6:30 p.m. dinner and meeting.
News From Credit Unions
Chartway’s We Promise Foundation Raises More Than $60,000 for Children Facing Medical Hardship or Illness
With a goal to make dreams and wishes come to life for children facing medical hardship or illness, Chartway’s charitable arm – the We Promise Foundation – recently welcomed supporters to tee up for its 5th Annual Putting for Promises golf tournament. Thanks to the generosity of sponsors and supporters, the event raised more than $60,000 for children in Utah.
Hampton Roads Educators CU Wins First Place in State Social Responsibility, Member Service Awards
Hampton Roads Educators Credit Union (HRECU) has won First Place in two categories in the 2021 Social Responsibility Awards sponsored by the Virginia Credit Union League (VACUL) and the Credit Union National Association (CUNA). First-place winners are forwarded to CUNA to compete nationally. National award winners will be announced later this year.
BayPort Credit Union Wins Top Industry Awards in Community Giving, Financial Education, and Member Service
BayPort Credit Union has won in all four award categories in the 2021 Social Responsibility Awards sponsored by the Virginia Credit Union League (VACUL) and the Credit Union National Association (CUNA). BayPort is recognized for its sustained community giving and robust scholarship program, virtual financial education outreach, and enhanced digital wellness tools to members.
Financial Services / Economy
July Consumer Prices Jump 5.4%, But Core Inflation Rises Less Than Expected
Prices that Americans pay for everyday goods and services accelerated in July as pent-up demand for travel and restaurants kept inflation hot, but about where economists had expected.
The Labor Department reported Wednesday that its consumer price index rose 5.4% in July from a year earlier, in line with June’s figure and matching the largest jump since August 2008.
The government said CPI increased 0.5% on a month-over-month basis, matching a consensus forecast from economists surveyed by Dow Jones.
So-called core inflation, which excludes energy and food, rose by 0.3% last month, shy of a forecasted 0.4% increase and well below June’s rise of 0.9%. The core figure is up 4.3% over the last year, a slight deceleration from June’s 4.5%.
Economists often consider core CPI to be a more reliable indicator since it’s insulated from the frequent swings in petroleum and food prices.
CUs Lose Share of Autos, Credit Cards
A Fed report showed credit unions lost ground to other lenders with both credit cards and auto loans in June.
But Fed’s G-19 Consumer Credit Report released Friday also found the recovery in credit card balances continued for a third month among all lenders and for a second month for credit unions. Banks and credit unions have reported rising credit card spending this year, while payoff rates have been slowly declining.
Prospects for that trend continuing were bolstered by the Bureau of Labor Statistics’ report Friday that showed a seasonally adjusted gain of 943,000 non-farm jobs from June to July, and upward revisions of job gains for May and June. Unemployment was 5.4% in July, down from 5.9% in June but still up from 3.5% in February 2020, the month before COVID-19 was declared a pandemic, sending jobless rates soaring and loan balances falling.
“The July jobs report was almost uniformly positive with strong job gains resulting in a large drop in the unemployment rate,” NAFCU Chief Economist Curt Long said. “The retail sector did not enjoy a share in the gains, losing over 5,000 jobs during the month, but otherwise gains were broad.”
The Fed’s G-19 report found all lenders held $1.28 trillion in car loans in June, up 7.1% from a year earlier.
Soaring Home Prices are Spooking Buyers
Home purchase sentiment dropped 3.9 points to 75.8 in July as concerns about high home prices continued to scare off prospective homebuyers.
Fannie Mae‘s Home Purchase Sentiment Index (HPSI) found that 66% of respondents said that due to high housing prices, it’s a bad time to buy a home, up from 64% last month. Only 28% said it was good time to buy a home, down from 32% in June.
Seventy-five percent said it’s a good time to sell, down from 77% last month. Twenty percent said it’s a bad time to sell, up from 15% in June.
Year over year, the sentiment index is up 1.6 points.
Doug Duncan, Fannie Mae senior vice president and chief economist, said homebuying groups appear to be “increasingly sensitive” to current high home prices.
Student Loan Relief is Extended Until January 2022
The debt relief provided to federal student loan borrowers has been extended into next year, but the Department of Education says don’t expect another reprieve.
Under the Coronavirus Aid, Relief and Economic Security Act, or Cares Act, federal student loan payments and interest were suspended to help folks struggling to make ends meet because of the pandemic.
Collection actions on defaulted loans were halted. So was negative credit reporting for eligible federal student loans, meaning the Education Department reported suspended payments to the major credit bureaus as if they were made on time.
Workers Are Saving, But Few Feel Very Confident About Retirement: Study
Sixty percent of employed Americans report that they had to make financial adjustments because of pandemic-related economic pressures, yet 82% also say they are saving for retirement, according to a newly released study by the nonprofit Transamerica Center for Retirement Studies in collaboration with the Transamerica Institute.
“Workers are weathering a public health crisis and contending with fears about the virus and vaccinations, concerns for family and friends, employment impacts and financial setbacks,” Catherine Collinson, chief executive and president of the Transamerica Institute and TCRS, said in a statement.
“Given the magnitude of challenges workers have faced during the pandemic, it is truly remarkable that they have maintained focus on their future retirement. However, before the pandemic and today, many workers continue to be at risk of not achieving a financially secure retirement.”
The Harris Poll conducted the online survey on behalf of TI and TCRS between Nov. 17 and Dec. 29, 2020 among a nationally representative sample of some 10,000 adults. The findings in the report come from a subsample of 3,109 workers in for-profit companies of one or more employees, made up of 301 Generation Z, 1,249 millennials, 960 Gen Xers, 573 baby boomers and 26 workers who were born before 1946.
CoreLogic: No Foreclosure Wave in Sight
While the national delinquency rate has not returned to the 3.5 percent rate it had reached before the onset of the pandemic, CoreLogic says the percentage of loans 30 or more days past due has declined 2.6 points since May 2020. The company says the rate in May 2021 was 4.7 percent compared to 7.3 percent in May of last year.
Frank Martell, president and CEO of Corelogic says, "The pandemic has created many challenges but, in the case of delinquencies, the impacts have been relatively muted thanks to numerous government support programs and the sharp snapback in economic activity over the past several quarters. Looking forward, we expect a robust economy and near-zero interest rates to hold delinquency levels at reasonable levels."
The company says, "Many are concerned about a pending foreclosure crisis when government provisions lift. Fortunately, the average homeowner in forbearance has sizeable equity in their home, which has helped create an additional financial buffer for those struggling to make mortgage payments. Thanks to these strong equity gains, and the availability of loan modifications and federal resources, we expect most borrowers have had enough support to stave off a foreclosure wave. Additionally, a recent CoreLogic survey of mortgage holders reports 85 percent of respondents said they maintained employment through the pandemic, which has helped many homeowners avoid delinquency and prevented a broad-scale mortgage crisis."
Operations
Northwest League Releases DEI Recommendations for CUs
Credit unions looking for guidance as they create or refine a diversity, equity and inclusion strategy have a new resource to turn to: “Credit Unions Advancing Diversity, Equity & Inclusion,” a report released Tuesday by the Northwest Credit Union Association and Northwest Credit Union Foundation’s DEI Task Force.
Based on a review of DEI practices at credit unions across the country, the report is intended to support DEI work at credit unions.
Related: Filene Research on DEI
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