CURRENT Newsletter | 15 July 2020 - Virginia Credit Union League

As consumer demand for convenience continues to drive member expectations, have you worried that your credit union is falling behind in terms of bringing innovative products and services to market? Have you had an initiative end with something no longer relevant in the marketplace? Have you ever developed a new product exceeding a budget long before it’s completed and launched? Do you want to experience faster time-to-market and an earlier ROI?

If the answer to any of these questions is yes, here’s your chance to hear more about best practices leveraging an Agile development process! 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!

I Now Pronounce You Dev and Technology (Aug. 4)

Smart brands have now recognized the massive opportunity presented them to build new connections and relationships with consumers. But now, with so many channel choices to reach your finances, you must stop doing things the way they’ve always been done. Time to be brave!

CUs, Banks Argue Field-of-Membership Case Before State Corporation Commission

Virginia Case Might Have National Impact

Credit unions and banks were back before a State Corporation Commission hearing examiner last Thursday and Friday, arguing a case on a field-of-membership expansion granted to Virginia Credit Union.

Last year, the state Bureau of Financial Institutions approved a field-of-membership expansion for Virginia Credit Union to serve the Medical Society of Virginia, a 10,000-member association offering support and services to medical professionals across the Commonwealth.

The Virginia Bankers Association and several of its member banks objected, petitioning the State Corporation Commission to rehear and reconsider the decision of the Bureau of Financial Institutions to allow Virginia Credit Union to serve the group. The Commission granted the bankers' request to stay the expansion decision.

Last week's hearing stretched over two days, with more than 10 hours of arguments and testimony. Your League is a party to the case. You can view case information here.

The hearing examiner will prepare a recommendation in the case for the State Corporation Commission judges, with the judges then offering a ruling in the case. They can disregard the recommendation if they so choose. The bankers also have a path to appeal an unfavorable SCC decision to the state Supreme Court, which means it could be a year or more before we see the final resolution of the case.

"We understand this case is a long way from being resolved," noted League President Rick Pillow. "We feel strongly that an unfavorable decision in this case would establish a precedent that might well have a chilling effect on state-chartered, multiple-common-bond credit unions’ pursuit of charter expansions. It also weakens the state charter, a concern for us as advocates of a dual-chartering system that encourages innovation and flexibility. What’s more, laws granting authority to regulators to approve common-bond expansions for groups with more than 3,000 potential members in Virginia and at the federal level are very similar in both wording and intent, so we have legitimate concerns that a win for bankers at the state level could have repercussions at the federal level.”

Learn more

Virginia-Based CUs Tally $341.7 Million in PPP Loans

Nationwide, CUs have helped more than 1M members through PPP

Credit unions have supported more than a million pandemic-affected members nationwide through the Paycheck Protection Program (PPP).

A recent survey of Virginia-based credit unions participating in PPP lending revealed 8,603 loans had been funded as of July 10, totaling $341.7 million. More than 93 percent of the loans were for less than $150,000. Not all participating credit unions have reported their data. We’ll update this information as it becomes available.

Congress extended the PPP application deadline to Aug. 8, and there are still billions of dollars available. CUNA President/CEO Jim Nussle highlighted Friday that there is still time for credit unions to support Main Street businesses through this crucial program.

According to data from the SBA, as of June 30 more than 900 credit unions have made more than 196,000 loans, averaging $49,487 per loan, indicating credit unions have continued to focus on Main Street businesses to keep local communities strong across the country. Those loans have supported 1.18 million jobs. A recent Forbes article also underscored that, in looking at data for loans over $150,000, credit unions supported more jobs per million dollars lent than any other lender.

Learn more

Social Responsibility Awards: Entries Due July 31

It's time to show off your good works! The CUNA/League Social Responsibility awards are a great way for you to showcase the extraordinary efforts you are making to serve your members during these unprecedented times.

There are 4 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

Remember, the deadline is July 31! Need help? Contact your League’s Mary Amyx.

League Providing Virtual Workshops on IRAs

Your League is providing a two-day Essentials and Advanced Virtual IRA Workshop on Sept. 22 and 23 from 9 a.m. – 3:45 p.m. each day. This interactive workshop will be led by instructors presenting live with opportunities to pose questions and have discussion.

Staying informed about IRA policies is imperative for staff who work with members to secure and maintain IRAs in any capacity. Whether you are new to working with IRAs or an experienced finance professional, staying up to date on IRAs is exceptionally beneficial for your credit union and its members.

Day 1 offers IRA Essentials, giving attendees a solid foundation of IRA knowledge. Attendees will leave this session able to work with IRA owners and process basic IRA transactions with confidence.

Day 2 features Advanced IRAs, which builds on the attendees’ basic IRA knowledge to address some of the more complex IRA issues that their financial organizations may handle. The instructor uses real-world exercises to help participants apply information to job-related situations.

NOTE: If you cannot attend this event, we’ve partnered with the Mississippi League to offer a similar event Oct. 20 and 21. Ascensus will conduct the training.

Learn more and register

CUs Forge Ahead with Tech Investments as COVID-19 Keeps Members Home

The COVID-19 pandemic has pressed credit unions to double down on efforts to enhance their offerings of electronic services as their customers are forced to stay at home.

In recent years, credit unions were already increasing the number of electronic services they offered. For instance, a total of 65.9% of U.S. credit unions provided mobile banking services in 2020, up from 48.7% in 2014, according to data compiled by S&P Global Market Intelligence.

The fallout from the coronavirus only underscores the need to increase adoption that can help members connect with credit unions without visiting a branch, executives said.

"It's changing the whole mentality of how we do business," said Lynette Smith, president and CEO of Springfield, Va.-based TruEnergy FCU, in an interview. "It's a new financial world, and that's what we're faced with."

Prior to the pandemic, credit unions were focused on making electronic loan originations available and allowing accounts to be opened digitally, according to Brad Smith and Quintin Sykes, technology practice managing directors at Cornerstone Advisors, a financial institution consulting firm.

Now, efforts are being concentrated on assisting members who have been hard hit by the economic downturn caused by COVID-19.

Christopher Saneda, senior executive vice president and COO at Virginia CU Inc., said his institution is "going forward from a services and member-need perspective."

"There are a lot of members losing jobs," he said, noting that funding from the U.S. Small Business Administration's Paycheck Protection Program, intended to keep people employed during the pandemic, is starting to dry up.

With the murky economic picture, Virginia CU wants to ensure member accounts can be opened, joint accounts are "taken care of" and account types can be changed — all with the press of a button on a smartphone.

"I think people just want to be able to do all of that remotely," Saneda told Market Intelligence. (S&P Global Market Intelligence, July 14)

Compliance / Regulatory Affairs News

Financial Regulators Issue Statement on Managing the LIBOR Transition

The members of the Federal Financial Institutions Examination Council (FFIEC) in a recent statement highlighted the risks that will result from the transition away from LIBOR, and encouraged supervised institutions to continue their efforts to transition to alternative reference rates in order to mitigate financial, legal, operational, and consumer protection risks.

RELATED: 3 Ways Credit Unions Can Prepare for the LIBOR Transition
RELATED: Credit Unions Should Embrace Libor Alternatives
RELATED: Prepare for the LIBOR transition

IRS Offers Guidance on Reporting Coronavirus Leave Wages

The Treasury Department and the Internal Revenue Service Wednesday provided guidance in Notice 2020-54 to employers requiring them to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA) on Form W-2.

News From Credit Unions

Lambrecht, Reynolds Promoted at ValleyStar

ValleyStar Credit Union is pleased to announce the promotion of Lisa M. Lambrecht to the position of Executive Vice President and Andrew Reynolds to the position of Senior Vice President/Chief Financial Officer.

Learn more

Langley Federal Credit Union Announces Jean M. Yokum Scholarship Winners

Langley Federal Credit Union has awarded Jean M. Yokum College Scholarships to four deserving college-bound credit union members.

Learn more

Financial Services and Economic News

Dimon Says Economic Outlook ‘Much Murkier’ as Virus Cases Surge

The largest U.S. banks continue to brace themselves for more economic turmoil as the coronavirus pandemic again threatens to shut down much of the nation.

Three of the biggest banks — JPMorgan Chase, Wells Fargo and Citigroup — socked away a collective $27.9 billion during the second quarter out of fear that consumer and commercial loan defaults could spike in the second half of this year. JPMorgan, the country’s biggest bank with $3.2 trillion of assets, stashed away a record $10.5 billion in the quarter while Wells more than doubled its provision from just three months earlier, to a record $9.4 billion.

Piper Sandler analyst Jeffery Harte said that the reserves that banks set aside in the second quarter were “much bigger” than what investors and analysts had been expecting.

Bankers seem to have grown less optimistic about an economic recovery in recent weeks as the number of COVID-19 cases has surged across much of the country. In California, which began to reopen in May, statewide restrictions on certain businesses were reinstated Monday as the numbers of cases and deaths continue to rise.

On a call with investors and analysts Tuesday, JPMorgan Chairman and CEO Jamie Dimon said he anticipates a “much murkier economic environment going forward than [we] had in May or June.”

Though he said that the bank is “prepared for the worst,” he acknowledged that no one can really predict how long the pandemic will wreak havoc on the U.S. and global economies. (American Banker, July 14)

Education & Networking

Interactive HR Compliance Virtual Conference Set for July 28, 30

A new opportunity for HR professionals to review current regulations is now available through CUNA HR Compliance Rule Changes Virtual Conference happening July 28 and 30. Attendees will address regulatory changes stemming from COVID-19 to better protect workers’ rights in addition to the health and safety of members and staff alike.

Security / Fraud Prevention News

Website Launched for Equifax Data Breach Settlement Claims

A website has been launched for credit unions and other financial institution plaintiffs to file claims in the settlement reached in the Equifax data breach lawsuit. CUNA, Leagues (including the Virginia League) and credit unions are among the plaintiffs in the lawsuit, which stems from a 2017 data breach that exposed the personal information of more than 145 million consumers.

The settlement, announced in June, provides up to $4.50 per alerted-on payment card as well as up to $5,000 per financial institution for its documented damages claim resulting from PII theft for class members. The total amount being offered for these two components is $5.5 million.

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