CURRENT Newsletter | 15 October 2020 - Virginia Credit Union League

"The credit Union movement ... It is a great movement, worthy of great deeds, deserving of great loyalty.”
– Edward Filene (father of the U.S. credit union movement)

Human Resource Peer-to-Peer Discussion Set for Oct. 21

HR professionals: Join us Oct. 21 (10 a.m.-11:30 a.m.) for a peer-to-peer discussion of the key challenges you face day-to-day, including labor law compliance, training, workplace safety in the age of COVID-19, hiring, employee relations and much more!

This is an excellent opportunity to share, collaborate and network with your peers.

Learn more and register for this free program.

Free Compliance Update Webinar Oct. 28

Join attorney Jay Spruill, who coordinates the League Compliance Hotline through the Woods Roger law firm, for a free webinar Oct. 28 on compliance updates and hot topics. Jay will cover recent regulatory changes and issues that should be on your radar in 2020 and beyond.

Fraud Trends During COVID-19; Free Webinar Oct. 29

Join us Oct. 29 for a session with Fiserv’s Joe Schwartz on key fraud trends during the pandemic and how credit unions can best position themselves to combat that fraud.

GWLN Virginia Sister Society Offering Virtual Program on Leadership Oct. 22

The Global Women’s Leadership Network Virginia Sister Society Committee is excited to offer a new virtual program in October. We are working with Lynda McNutt Foster, CEO of Cortex Leadership Consulting, to provide a virtual leadership event on “AGILITY - Today’s Leadership Super Power.”

If you’re ready to build your AGILE SUPERPOWER, then this two-hour virtual program is for you! If you’re interested in participating in these events, please be prepared to:

Do pre-work and a pre-quiz prior to the virtual event.

Participate in both large and small group discussions on camera.

Share your challenges and learn from others.

Find real solutions to build your leadership superpower!

Seating is limited. Register for October 22nd from 10 a.m. – Noon

Leagues Hosting Virtual Workshops on IRAs

Your League is partnering with the Mississippi League to provide a two-day Essentials and Advanced Virtual IRA Workshop on Oct. 20 and 21. Whether you are new to IRAs or an experienced administrator wanting an update on this year's new rules, you'll find the training you need to serve your members' IRA needs.

Learn more and register

CUNA Mutual Group’s ULEND Academy Set for Nov. 2-6

Your League is proud to offer CUNA Mutual Group’s popular ULEND Academy Nov. 2-6 as a virtual learning experience for credit union lenders looking for real-world solutions to today’s toughest lending challenges.

The curriculum guides lenders from foundational to advanced skill levels in all lending communication channels and across all stages of the loan process - origination, underwriting, and closing - with cross-selling, consultation, and compliance woven throughout. ULEND Academy is set up as a virtual learning workshop within six, 60-to-90-minute daily sessions where participants will discuss, learn, and then apply.

Learn more | Register

Updated PPP Loan Forgiveness Application, Instructions Added to League InfoSight

The Small Business Administration (SBA) recently released a new streamlined loan forgiveness application for Paycheck Protection Program borrowers of less than $50,000 after applications for PPP loan forgiveness were opened on October 2.

Learn more

Senate Banking Chairman Crapo Calls for Regulatory Flexibility

Senate Banking Committee Chairman Mike Crapo (R-Idaho) wrote to the heads of federal financial regulators, including NCUA Chairman Rodney Hood, recently on the Paycheck Protection Program’s (PPP) effect on certain asset-based regulatory thresholds. Crapo notes that the pandemic has resulted in a significant inflow of deposits, as well as institutions providing their own funds for PPP loans.

“Many banks and credit unions may now unexpectedly face surpassing certain asset-based regulatory thresholds. Crossing these thresholds would entail new, expensive and burdensome regulatory requirements to which they would not have otherwise been subject,” Crapo wrote. “Banks and credit unions must not be deterred from continuing to play a key role in the recovery and must maintain ample flexibility to serve customers and work with those affected by the pandemic.

“As each of your agencies continue taking actions to provide liquidity to the marketplace and support lending to households and businesses, I urge you to use your discretion to minimize the regulatory impact on banks and credit unions resulting from their participation in the PPP,” he added.

CUNA continues to call on Prompt Corrective Action flexibility to be part of the next phase of COVID-19 relief legislation.

Learn more

CUNA Mutual Group Hosting Free Webinar on Serving Older Members

CUNA Mutual Group is hosting a free webinar Oct. 20 designed to help credit unions become even better at serving and planning how to serve their aging populations and their caregivers.

Edgar Hernandez and Alison Fleming will lead the webinar titled, Learn to Navigate a New Chapter in Your Members’ Lives. It will be held at 2 p.m.

The U.S. population is becoming more diverse and is aging rapidly. In just 10 years, there will be more people older than age 65 than under age 15—the first time in U.S. history. In addition, more households are becoming multigenerational.

What does that mean for your credit union?

How do these trends impact how your members make financial, health, and living decisions?

And, what are the differences by race/ethnicity that you need to be aware of to have meaningful conversations and offer the right products?

Learn more and register for this free event

‘Shift Happens’ Webinars Available Online

We recently wrapped up our free “Shift Happens” webinar series, but we’ve made available through YouTube all the recorded sessions.

Learn more here.

Advocacy News

PPP Forgiveness Bill Should be Included in Senate Relief Package

Bipartisan Paycheck Protection Program (PPP) forgiveness legislation should be included in the current pandemic relief package being negotiated in the Senate, CUNA wrote Senate Majority Leader Mitch McConnell (R-Ky.) Wednesday. The Paycheck Protection Program Small Business Forgiveness Act (S. 4117) was introduced by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.) June 30.

“S. 4117 would ensure those businesses can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms,” the letter reads.

Specifically, S. 4117 would simplify forgiveness for covered PPP loans of less than $150,000.

“PPP loans of $150,000 and under account for 87% of total PPP recipients, but less than 28% of PPP loan dollars," notes the letter.

Reps. Chrissy Houlahan (D-Pa.) and Fred Upton (R-Mich.) introduced a House companion bill July 25.

Learn more

2020 Election Efforts Continue as Beltway Media Highlights CU Influence

Washington, D.C. media has taken notice as credit unions roll out support for candidates that champion credit union priorities prior to the Nov. 3 election. CUNA and the Credit Union Legislative Action Council, its federal PAC, have announced support for candidates on both sides of the aisle, in House and Senate races, part of an overall $7 million CUNA is on track to spend in the 2020 cycle.

CUNA has also updated CUNA.org/elections to reflect every CULAC-supported candidate that will be on the ballot Nov. 3 by their state, with updated post-election results being tracked. It also features a sample of campaign ads that have run around the country.

Politico Influence broke the news of ads supporting Sens. Susan Collins (R-Maine), Steve Daines (R-Mont.), Gary Peters (R-Mich.) and Tina Smith (D-Minn.). Coverage included an interview with CUNA Deputy Chief Advocacy Officer for Political Action Trey Hawkins.

Additional coverage included Politico’s Morning Money, Roll Call and The Hill.

Learn more

Compliance / Regulatory Affairs

Watch for These NCUA Exam ‘Hot Spots’

Jared Ihrig, CUNA's chief compliance officer & counsel explored NCUA exam “hot spots” during the 2020 CUNA Operations & Member Experience Council and CUNA Technology Council Virtual Conference.

NCUA is focusing on error-resolution requirements, timelines, and issues concerning Regulation E, as well as overdraft opt-in disclosures for one-time ATM and debit transactions, he says.

Some credit unions continue to miss filing deadlines of the loan application register (LARs) as required by the Home Mortgage Disclosure Act, and some aren’t updating LARs quarterly.

Additionally, in some instances data fields are not being properly aggregated or captured across credit union loan origination systems, Ihrig says.

Examiners are also noting that in some instances, credit unions aren’t providing adverse action notices related to Regulation B to borrowers with enough reason specificity, resulting in some examination findings for credit unions.

Fair lending exams will likely increase in 2020 and 2021, he notes.

Under the Servicemembers Civil Relief Act, the annual percentage rate reduction must occur as of the effective date of active duty orders, not necessarily the date the member notifies the credit union.

Plus, Reserve and National Guard members are covered under the Military Lending Act and the Servicemembers Civil Relief Act, Ihrig says. Some credit unions misunderstand what constitutes a “covered borrower” under the Military Lending Act.

Learn more

FCC Proposes Amendments to TCPA Regulations

In a recent Federal Register, the Federal Communications Commission has published [85 FR 64091], a proposed rule to implement section 8 of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act) and seeks comment on how to best implement it.

Learn more

CFPB Eliminates Ban on Joint Marketing Agreements Between Mortgage, Other RE Professionals

Last week, the Consumer Financial Protection bureau revoked CFPB Compliance Bulletin 2015-05, the five-year-old piece of legislation that essentially banned joint marketing agreements between lenders, real estate agents and other service providers involved in the business of home buying.

In a statement posted to the CFPB website on October 7, the Bureau said it “determined that Compliance Bulletin 2015-05 -- RESPA Compliance and Marketing Services Agreements -- does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X and therefore is rescinding it. The Bureau’s rescission of the Bulletin does not mean that MSAs are per se or presumptively legal.”

Going forward, the statement continued, determining whether certain MSAs violate RESPA Section 8 will depend on “specific facts and circumstances, including the details of how the MSA is structured and implemented. MSAs remain subject to scrutiny, and we remain committed to vigorous enforcement of RESPA Section 8.”

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Risk Management

Check Holds Not Used As Fraudsters Take Off With 6-Figure Amounts

Fraudulent deposit losses associated with new account scams are increasing at an alarming rate. Fraudsters either opened the new account with a fraudulent check or waited up to six months before depositing a fraudulent check. Savvy financial criminals frequently wait more than 30 days before making a fraudulent deposit, or they will make small deposits and withdrawals in the first month to establish a pattern.

The fraudulent checks have ranged from $1,000 up to $87,000. Unfortunately, check holds were not imposed in most cases, and the fraudsters were able to withdraw the funds immediately at another branch location, shared branch location, or through an ATM.

Learn more

News From Credit Unions

DCCU Credit Card Campaign Makes a Difference

DuPont Community Credit Union (DCCU) recently held a special credit card campaign – Dine Out & Make a Difference – that benefitted its members and the community. During the months of July and August, DCCU credit card holders were rewarded with four times rewards points or 4% cashback for making restaurant purchases, which was especially important as many local restaurants experienced significant slowdowns due to the pandemic.

Learn more

News About Credit Unions

A Dozen Issues to Be Giving Some Thought for 2021, According to CUNA Mutual’s Chief Economist

Credit union leaders have been offered a dozen issues to be thinking about in 2021 by CUNA’s chief economist.

Speaking to Catalyst Corporate’s 2020 Payments Forum, Steve Rick outlined these 12 things to be planning for:

Record low-interest margins will lead to expense containment. Rick said credit unions will need to consider hiring freezes, delays in building facilities and cutting down on marketing.
High unemployment rates will lead to larger collections departments and higher provisions for loan losses.
Monitor employee stress and morale during the pandemic.
Invest in better technology for employees working at home.
Update business activity expectations and reallocate staff. Rick noted many credit unions have moved employees into mortgage lending, which booming.
The new economic environment will create a new path for profitability.
There are opportunities for prime real estate purchases and future branching.
Adopt COVID 19-related design changes for old and new buildings. This means moving forward buildings will have better ventilation and basic redesigns.
Excess liquidity will intensify the search for higher-yielding assets.
Monitor closely the drop in capital-to-asset ratio. “The denominator in this ratio is going to grow over 25% in next few years,” said Rick. “Capital won’t grow as much due to weak ROAs. We could see a two percentage point drop in capital to 9.4.”
Focus on serving financially stressed members, which will build brand loyalty.
Plan for post-recession opportunities. “There are going to be a lot of opportunities,” Rick said. “Credit unions always come out of recessions stronger than banks.”

Mergers Forecast

Separately, Rick said credit unions will not see a significant number of mergers in 2020 or 2021, as executives lack the bandwidth to entertain merger offers.

“But what we always see is mergers after the recession is over, so by 2022, 2023 we will see a lot of small to medium credit unions saying we don’t have the digital capabilities, so we will merge,” Rick said.

Learn more

NCUA Webinar on Minority Depository Institutions and Financial Inclusion

The NCUA will host a webinar on financial inclusion and minority depository institutions on Oct. 21.

Learn more

Financial Services / Economic News

U.S. Consumer Borrowing Falls on Smaller Credit Card Balances

U.S. consumer borrowing unexpectedly fell in August as credit card balances declined for a sixth consecutive month with the coronavirus pandemic continuing to limit some purchases amid elevated unemployment.

Total credit decreased $7.2 billion from the prior month after an upwardly revised $14.7 billion July gain, Federal Reserve figures showed Wednesday. The median estimate in a Bloomberg survey of economists called for a $14 billion increase in August.

The drop in revolving credit to a three-year low indicates the pace of consumer spending growth is moderating after outsize gains immediately following the gradual lifting of restrictions on businesses and individuals. The expiration of a $600 weekly supplemental benefit for the unemployed may have also played a role in the drop in consumer charges. (American Banker, Oct. 7)

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