CURRENT Newsletter | 17 November 2020 - Virginia Credit Union League

The Richmond Chapter of Credit Unions will be selling the 2020 White House Ornament to benefit VACUPAC. The cost this year will be $25 for each ornament. To place an order, please send information to Chris Miller by Nov. 17. Payment is due by Nov. 30 (checks payable to the Richmond Chapter of Credit Unions).

In addition, if your staff would be interested in completing their collection and purchasing previous year's ornaments, they are available for order as well!

The White House Historical Association's Official 2020 White House Christmas Ornament honors John Fitzgerald Kennedy, the thirty-fifth president of the United States.

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Ignite 2021 Set for April 14-16 in Virginia Beach

We’re excited to announce the return of IGNITE, the League Annual Meeting! Slated for April 14-16, 2021 in Virginia Beach, we’ve secured the newly opened Marriott Virginia Beach Oceanfront as our host hotel.

You can make hotel reservations now at this location: http://bit.ly/VACUL2021-hotel

Registration information for the event will be distributed in the coming weeks, so stay tuned!

Safety is our priority! We will continue to monitor guidance from local, state and federal officials regarding the safety of meetings during the COVID-19 pandemic.

Virginia Credit Union Services Announces New Partnership with Credit Union Mortgage Association

Virginia Credit Union Services, Inc., the wholly owned subsidiary of the Virginia Credit Union League, is proud to announce its new partnership with Credit Union Mortgage Association (CUMA). The partnership will enable credit unions to offer mortgage loan products to their members.

CUMA is owned and operated by credit unions and boasts a 40-year track record of providing best-in-class mortgage-related services to credit unions of all asset sizes. CUMA services include origination, processing, underwriting, servicing, closing and secondary market access.

“We’re proud to bring CUMA’s exceptional service, extensive mortgage product line, and unmatched experience to Virginia’s credit unions,” said Virginia Credit Union Services Vice President David Deacon. “CUMA’s seasoned mortgage professionals deliver a mortgage experience that mirrors the same great service members have come to expect from your credit union, while eliminating many of the more time-intensive tasks faced by your staff.”

Among CUMA’s many benefits:

• State-of-the-art web technology allowing members to apply for a mortgage online and receive a decision in as little as 10 minutes.
• Wide variety of loan products and programs, including FHA/USDA, VA and Reverse Mortgages.
• Correspondent relationships with five of the nation's largest wholesalers.
• Approved partner with Fannie Mae.

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CUNA Mutual Group Hosting Webinar on Emerging Risk

This year, credit unions have learned how to adapt and manage risk in the most unprecedented times. Whether you rolled out remote work options for the first time or put in controls to combat new fraud, you’ve likely been challenged unlike ever before.

Join the last live session of the year (Nov. 18, 2 p.m.) to ask your emerging risk questions. Based on questions that many of your peers have already submitted and what we’re seeing impact the industry today, CUNA Mutual Group’s Senior Risk Consultants will kick-off the session by addressing:

Ransomware
Zelle / P2P Fraud Scam
Business Member Check Kiting Schemes
Continued Pandemic Concerns
COVID-19 Fatigue and Longer-Term Impact on Employment Risks
Lender Liability
Digital Lending and Increase in Virtual Engagement

It’s not too late to submit your questions in advance, so register today!

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NCUA Response to COVID-19 Subject of Dec. 3 Webinar

Federally insured credit unions can learn more about NCUA’s response to the COVID-19 pandemic by participating in a webinar hosted by the agency on Dec. 3, beginning at 1 p.m.

During the webinar, NCUA staff will also discuss recently issued guidance and regulations, as well as other agency initiatives.

Online registration for this hour-long webinar is now open. Registration is limited to no more than 2,500 participants on a first-come, first-served basis.

Financial Inclusion as a Driver of Growth

CUNA’s research shows that credit unions that are intentionally financially inclusive grow memberships, loans, and assets faster, without harming portfolio quality. CUNA Vice President of Diversity, Equity and Inclusion Samira Salem was joined by other credit union leaders for a webinar Thursday on the business case for serving Latinx consumers.

Latinx in the U.S. are the fastest-growing racial or ethnic group, and half were unbanked or underbanked compared to one-third of whites in 2017.

CUNA evaluated Coopera’s Hispanic Outreach Program, which provides demographic analytics, consulting services, and training to help credit unions with outreach and service to the Hispanic/Latinx market.

It found that credit unions that participate in the program:

Grew their memberships by 33% more than credit unions that did not; and
Experienced 44% and 31% higher increases in loans and assets, respectively, and 0.32% greater earnings.

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Advocacy / Governmental Affairs

Virginia House of Delegates to Meet Online in 2021 as Coronavirus Cases Rise

Virginia's House of Delegates will meet online for the 2021 legislative session that convenes in January, Speaker Eileen Filler-Corn (D-Fairfax) said Monday, citing the need to avoid a coronavirus pandemic that has been worsening across the state.

The House went virtual this summer for the first time during a special session that began Aug. 18 and tackled budget, coronavirus and criminal justice issues. That session stretched across 84 days — longer than the regular session set to open Jan. 13.

“I wish we could hold the session in person, I wish we could all be together,” Filler-Corn said in an interview. “But right now it’s too dangerous.”

Later Monday morning, Republican leaders in the House and Senate said they would use procedural methods to limit the length of next year’s General Assembly session to 30 days instead of a planned 46 days.

The Constitution orders Virginia’s legislature to meet in sessions of alternating length: 60 days during even-numbered years and 30 days during odd-numbered years. Traditionally, the legislature extends the short session to 46 days — but that requires a two-thirds procedural vote, which Republicans said Monday they will not support. (Washington Post, Nov. 16)

Congress is Far From Sending More Stimulus Help as Coronavirus Cases Surge, Economic Pain Looms

Congress appeared nowhere close to passing another coronavirus relief bill Tuesday as infections surge across the country and new public health restrictions threaten businesses and jobs.

Lawmakers have not passed new aid in months during the health and economic crisis. As the virus again overwhelms hospitals and forces state and local officials to restrict economic activity, Republicans and Democrats have not budged from their positions on stimulus.

On Monday, Senate Minority Leader Chuck Schumer said he and House Speaker Nancy Pelosi have not heard from Senate Majority Leader Mitch McConnell in about two weeks since the Kentucky Republican said he would take the lead for the GOP in the next round of talks. Democrats have pushed for a package that costs at least $2.2 trillion, while Republicans want a roughly $500 billion bill.

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Registration Now Open for 2021 CUNA GAC, March 2-4

Registration for the 2021 CUNA Governmental Affairs Conference (GAC) is now open. Next year’s CUNA GAC will be held March 2-4 and delivered in real-time using a full-feature, interactive digital platform.

The online format will integrate many of the conference’s most popular events including live speakers and breakout sessions, a virtual exhibit hall, and the opportunity to (virtually) Hill Hike.

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Compliance / Regulatory Affairs

NCUA Releases Proposed Budget, Comments Due Dec. 11

NCUA’s proposed 2021–2022 budget is now available for review and comment. The proposed budget summary and detailed budget justification are available on the Budget and Supplementary Materials page of NCUA.gov. Comments must be emailed to NCUA at BudgetComments@ncua.gov by Dec. 11.

The agency will hold a public budget briefing on Wednesday, Dec. 2 beginning at 10 a.m. (ET).

“CUNA is currently reviewing the details of the proposed budget with a focus on ensuring the methodology used to fund NCUA operations is consistent with fairness to state and federal credit unions and the Federal Credit Union Act," said Elizabeth Eurgubian, CUNA deputy chief advocacy officer. "We look forward to submitting our comments for consideration and presenting at the agency’s virtual briefing and appreciate the opportunity from NCUA to do so.”

The draft 2021 operating budget is $315.6 million, 0.1% lower than the 2020 budget.

The NCUA Board is scheduled to approve a final budget at its Dec. 17 open meeting.

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Interest Capitalization Proposal on NCUA’s Nov. 19 Agenda

The NCUA will vote on a proposed rule involving capitalization of interest at its Nov. 19 board meeting. The meeting will also feature a 2020 budget update and reprogramming.

CUNA has called on NCUA, in several letters to the agenc y and most recently this week in letters to Congress, to permit credit unions to capitalize interest on consumer mortgage loans in connection with loan modifications made during the pandemic.

The complete agenda is:

Board briefing, share insurance fund quarterly report;
Board briefing, state of credit union diversity and the 2019 Credit Union Diversity Self-Assessment;
Board briefing, 2020 budget update and reprogramming; and
Proposed pule, Part 741, Appendix B, Capitalization of interest.

The meeting will be conducted via live audio stream starting at 10 a.m. (ET) Nov. 19.

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News From Credit Unions

Hampton Roads Educators’ CU Uses COVID Relief Grant to Aid Members

Hampton Roads Educators Credit Union, Inc. (HRECU) assisted 21 members through their COVID19 Loan Payment Relief Program (CLPRP). A total of $9,327.41 was distributed through deferred loan payments. Many members, particularly those outside of the teaching profession, are low-wage workers, often minorities, who feel the economic impact of COVID-19 the most. The credit union CLPRP was offered on a first-come, first-served basis to members by request until the grant funds were nearly depleted.

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Financial Services / Economic News

A Darker Q4 May Follow the Brighter Q3 for Credit Unions

Credit unions’ net income was much better than expected in the third quarter, despite another round of larger-than-normal loan loss provisions.

However, CUNA chief economist Mike Schenk said Thursday the economic pain is on course to worsen through the rest of the year as COVID-19 infections rise, and more households run short of cash to keep up with their monthly payments in the absence of additional federal relief.

“Big spikes in bankruptcies and charge-offs may occur in the current environment if we don’t see a significant additional fiscal stimulus in the near term,” Schenk said. “Who knows when help is on the way and how much.”

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Related: Lending in 2021

The Most Important Part of Biden’s Economic Speech is What He Did Not Say

As President-elect Joe Biden took the stage Monday for his first big address on the U.S. economy, coronavirus cases were hitting all-time highs, numerous states and cities were issuing fresh stay-at-home orders, and Americans were noticeably pulling back again on spending.

Biden made clear that his first priority is getting the virus under control. He walked onstage wearing a mask and proclaimed, “There’s nothing macho about not wearing a mask.” He urged unity and common sense, saying that his own family would limit Thanksgiving celebrations to no more than 10 people.

But in this moment of rising unease, it was noticeable what Biden did not say in his speech. He did not extend any sort of olive branch to Senate Republicans to restart bipartisan negotiations on a stimulus bill, and he danced around the question of whether the nation needs another wide-scale closure of businesses and schools.

What happens with a stimulus bill and business closures in the next few weeks will play a crucial role in the health of the economy that Biden inherits on Jan. 20. Some argue that his lack of clarity on these issues is an attempt to keep his options open. But the nation is increasingly looking to him for guidance.

Economists are overwhelmingly urging Congress to pass another stimulus package. The sticking point has been the price tag. House Democrats passed a $3 trillion stimulus bill in May. Senate Republicans swiftly rejected it and have made it clear they don’t want anything bigger than $1 trillion, though their most recent offers have been closer to $500 billion. Biden did not attempt to close that gap on Monday. Instead, he went out of his way to praise the Heroes Act, the Democratic bill that the GOP has said isn’t happening. (Washington Post, Nov. 16)

Credit Unions Buckle Up for An Unpredictable Holiday Season

2020 is shaping up to be one of the most unusual holiday seasons in years and that could have an impact on credit unions’ card portfolios.

The pandemic has shifted a significant amount of consumer spending away from brick-and-mortar stores in favor of online shopping, and that could rise even further as the holidays approach. On top of that, the national surge in COVID-19 diagnoses as colder weather sets in is likely to have an effect on how, when and where people do their holiday shopping. However, most important to credit unions is the way the broader economic picture will affect overall spending and what those institutions can expect from interchange revenue and credit card interest.

One of the biggest differences this year is an earlier-than-usual start to the shopping season. While holiday spending usually peaks around Thanksgiving and in the early weeks of December, credit unions are likely to see that spending starting earlier in 2020. (American Banker, Nov. 16)

Risk Management

Rise in Litigation for Failing to Refund Unearned GAP Premiums

There has been a recent increase in class action litigation directed toward indirect loans that were originated by automobile dealers on retail installment sales contracts (RISC). The allegations accuse creditors of failing to process refunds when a Guaranteed Asset Protection (GAP) Waiver terminates early, which may include:

Loan payoff prior to maturity, including sale or trade of vehicle
Repossession and disposition of vehicle
Customer cancellation of the GAP Waiver

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Holidays and Pandemic Team Up to Enhance Fraud & Scams

As the holidays approach, e-commerce merchants are preparing for a continued increase in online sales as a result of store closures and restrictions due to the COVID-19 pandemic. Members should be aware of scams that target the convenience of online shopping such as fake or spoofed websites and pop-ups, e-skimming, porch pirates, or impersonations for your curb-side pick-ups.

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