CURRENT Newsletter | 18 March 2021 - Virginia Credit Union League

The Virginia Sister Society of the Global Women’s Leadership Network is offering a free virtual program on March 23, offering participants an opportunity to connect with peers to discuss these five topics:

Managing Remote Employees Effectively
Professional Growth and Development
Transitioning From Crisis Management to Growth Management
Rebuilding Teams and Morale Post Pandemic
Leading With Strength, Even When You May Not Feel Strong

Free Webinar March 25: Boost Interchange Income, Reduce Expenses and Ready Your CU for the Future

Learn how your credit union can maximize its interchange income, reduce expenses and plan for future solutions -- all through a strong network optimization plan! The “Durbin world” has been around for a while, but it’s not always easy to navigate, so let our partners at Fiserv help you!

We’re providing free training on March 25 on “Network Optimization” strategies with Carol Specogna and Patti Bart- Jagodzinski.

Here’s Your Chance to Thank Teachers, Schools for Efforts During Pandemic; Deadline is March 26

It’s been an especially tough year for our teachers, educators and school staff. The League’s Financial Education Committee has launched a new initiative called “Message of Hope” to thank those educators for their work in continuing to educate and mentor young people during the pandemic.

They are also reminding educators that credit unions stand ready as a financial education resource, by providing classroom materials and presentations, including virtual or in-person participation.

If you want to thank your local educators for their tremendous work during the pandemic, contact your League’s Mary Amyx for details on recording a short video message via Tribute.

Learn more about the “Message of Hope” initiative!

Let’s Have an Uncomfortable Conversation: Diversity, Inclusion & Bias

Where are you in your diversity journey? Find out by joining us for The No Nonsense Experience, starting Thursday, May 6.

Offered as a one-hour, weekly course May 6-27, The No Nonsense Experience will be guided by a team of expert facilitators from JP Enterprises, and will focus on building conversation skills around your thoughts, intentions, actions and behaviors regarding Diversity, Inclusion and Bias.

Learn more / Register

Filene Launches CU DEI Survey

Filene is launching a survey on credit union diversity, equity, and inclusion (DEI) policies and practices to provide industry-wide data regarding the reach of evidence-based DEI activities in organizations.

Filene hosted a webinar on March 18, to introduce this initiative. A recording of the presentation will be shared with all registrants following the webinar.

We’re Collecting Stories From Members That Showcase the CU Difference

Every day, your members benefit from the Credit Union Difference, but they may not realize that as a not-for-profit financial cooperative, your credit union invests in your members and community.

CUNA and the Leagues have launched a campaign designed to educate your members about the Credit Union Difference, directing them to the Advancing Communities website where they can learn how credit unions like yours are making a positive impact. They also have the opportunity to share their story.

Your credit union’s success is tied to the development of the communities you serve. This campaign allows you to reach out to your members and let them share their stories of how you’ve helped them during these trying times. Stories submitted by individual members and employees have been collected all over the United States and we want even more. These stories will be crucial as we reach out to state and federal lawmakers to advocate for credit unions.

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Webinar: The Dos & Don'ts of Technology

Join AdvantEdge Analytics’ Sarah Randle, Sales Analyst, as she talks about what to do – and not do – when it comes to working with partners and what to look for in a good partner.

During the 45-minute session, you will:

Learn why easy-to-use technology creates speed-to-value
Experience what good data visualizations look like and why that's important in making data-driven decisions
See examples of tools that can help you improve efficiency, accelerate growth and harness new technology across your organization

To accommodate busy schedules, the same webinar is being presented on three different days:

Tuesday, March 23, 4 p.m. – Register now
Wednesday, March 24, 2 p.m. – Register now
Thursday, March 25, 11 a.m. – Register now

Online Training for Supervisory Committees

Popular credit union consultant Ancin Cooley has created a web-based course for supervisory committee members, offering the most comprehensive overview of the role, duties, responsibilities and resources available to committee members. The five modules offer you a fun, interactive learning experience with bonus content and even quizzes to test your content retention.

Learn more
Register Now (Your League is offering volume discounts for multiple registrations from the same credit union. Use our registration to ensure you receive the discount.)

Webinar: Why Text Messaging is Essential for Your Credit Union

Secure, TCPA-compliant Text Messaging with your members is easy with Eltropy's award-winning platform! Eltropy's CEO and co-founder Ashish Garg will share how Eltropy’s secure and compliant platform can help your credit union communicate effectively during the pandemic and beyond. Learn more by joining us for an April 1 webinar (2 p.m.).

March 24 NCUA Webinar Will Cover COVID-19 Credit Risk Issues

NCUA is hosting a webinar on March 24 about potential areas of credit risk resulting from the COVID-19 pandemic.

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Advocacy / Governmental Affairs

Scott, Cortez Masto Introduce Bipartisan Loan Maturity Bill

Sens. Tim Scott (R-S.C.) and Catherine Cortez Masto (D-Nev.) introduced a CUNA-supported bill today, the Expanding Access to Lending Options Act, that would raise federal credit union loan maturity limits on non-mortgage loans from 15 to 20 years. The bill comes after strong engagement with the legislators from CUNA, as well as the Carolinas Credit Union League and the Nevada Credit Union League.

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CUNA/League-Backed SAFE Banking Act Reintroduced

Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velázquez (D-NY) and Warren Davidson (R-OH) reintroduced the CUNA-backed Secure and Fair Enforcement (SAFE) Banking Act today, which would provide protections for financial institutions serving cannabis-based businesses where it is legal. CUNA expressed support for the bill in a letter sent Thursday.

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CUs Continue to See Record Mortgage Lending, Provide Fin Ed and More, Senators are Told

Credit unions have continued to provide a record-breaking number of mortgage loans, and continued their role in financial education, informing members of significant mortgage relief available to those negatively impacted by the COVID-19 crisis, CUNA told the Senate Committee on Banking, Housing, and Urban Affairs.

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Sherrod Brown Takes Case for Digital Accounts to Resistant Bankers

Senate Banking Committee Chairman Sherrod Brown, D-Ohio, told an audience of bankers that his proposal to offer free, government-backed digital wallets to all consumers would increase the number of banks’ customers.

Brown’s comments at an American Bankers Association virtual conference on Wednesday come at a time when industry trade groups have largely opposed his plan to widely offer FedAccounts digital wallets.

These will be no-fee bank accounts available to every American at a post office or a small bank or credit union backed by the Federal Reserve," he added. "These would be basic accounts. You already have the infrastructure in place to support them.”

Brown said, if signed into law, the government would reimburse small banks as they implement FedAccounts. (American Banker, March 17)

Pandemic Response

House Passes PPP Extension Bill, As IG Reports Duplicate Loans Made by SBA

The House passed legislation this week that would extend the Paycheck Protection Program to the end of May in an effort to help unblock the logjam at the Small Business Administration just weeks before the loan program is scheduled to end.

Credit union trade groups and others have said that the SBA has been slow in processing PPP loans—raising concerns that some loans may not be approved by the time the program’s authorization expires at the end of this month.

“By providing small businesses with two more months to apply and giving the SBA an additional month to process applications, we will help ensure critical support isn’t cut off,” House Small Business Chairwoman Nydia Velázquez, (D-N.Y.) said, following the passage of the legislation.

Unbanked Stimulus Seekers Rush to Open Checking Accounts

Financial institutions took heat this week from impatient account holders who want their stimulus money quickly, but there are millions of consumers with an even bigger problem — they have no bank account to receive direct deposits.

The Internal Revenue Service and the Federal Deposit Insurance Corp. have been on a mission to get more unbanked consumers to open low-cost checking accounts that offer direct deposit so stimulus payments can be disbursed swiftly and safely under the Biden administration’s American Rescue Plan. More than 70 banks and credit unions, which hold nearly half of the nation's deposits, have joined the effort.

A White House senior advisor emphasized the need to reach unbanked consumers by June when expanded child tax credits from the stimulus bill start rolling out. (American Banker, March 17)

News From Credit Unions

Vizo Financial CEO Will Bid Farewell to Corporate in June 2021

Vizo Financial Corporate Credit Union’s CEO, Jay Murray, will be ending his tenure with the organization in June of this year. Murray, who has been with the Corporate for nearly 30 years, has decided to devote more time to family and personal interests.

Since the establishment of Vizo Financial in 2016, Murray has shared leadership responsibilities alongside the Corporate’s president, David Brehmer. The board of directors has selected Brehmer to become the president and CEO of Vizo Financial effective June 1, 2021.

Learn more

Financial Services / Economy

Takeaways from NCUA's 4Q State-Level Data

New data from the National Credit Union Administration continues to provide a wider window into the system’s 2020 performance.

The agency’s latest Quarterly Map Review, released last week, examines several key industry metrics at the median on both the national and state level. The data shows a continuation of many trends seen earlier the year, including surging deposits, decreased lending and slow membership growth.

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‘Fairly Strong’ Economic Rebound Expected, Says CUNA Economist

CUNA Senior Economist Jordan van Rijn said he expects a “fairly strong” economic rebound in CUNA’s latest Economic Update video, sponsored by CO-OP Financial Services.

“There is a lot of pent-up demand in the economy, and as vaccinations start to roll out people are going to be eager to travel again, to go back to restaurants. There’s also a lot of stimulus money in the economy, we expect the funds from the latest $1.9 trillion bill to come through in March,” he said.

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Used Auto Drives Loan Growth for US CUs in 2020

U.S. credit unions continued to grow their auto loan books in 2020, thanks to gains in used auto loans.

Overall, total auto loans at credit unions increased to $383.90 billion at year-end 2020, up 1.3% from the prior year. New auto loans declined by 3.6%, while used auto loan growth more than made up the difference with a 4.5% increase. Following the divergent trend over 2020, used auto loans accounted for 62.6% of credit unions' total auto loans in the 2020 fourth quarter, up from 60.7% in the year-ago quarter.

In terms of market share across all lender types, credit unions lost ground in both the new and used market, according to a report from Experian PLC, a credit reporting agency. The report found that both credit unions and banks lost market share in auto loans — for both used and new — to captive finance companies. (S&P Global Market Intelligence, March 15)

More Americans Report Income Recovery: Survey Reveals

While nearly 40% of Americans still have lower income than before the start of the COVID-19 pandemic a year ago, the number who has recovered continued to grow and many of them expect to increase spending in the months ahead, according to a TransUnion survey released Tuesday.

The Chicago credit reporting agency found 38% of Americans said their household income remains negatively impacted by the pandemic – significantly down from 53% in late March 2020, just weeks after the World Health Organization declared COVID-19 a pandemic.

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Fed Expects Rate Hikes Can Hold Off Until at Least Next Year

The Federal Reserve left interest rates near zero Wednesday and said it would continue to use all the tools in its arsenal to support the still bouncing-back US economy.

But it struck a somewhat more hawkish tone in its monetary policy update, saying it is prepared to "adjust the stance of monetary policy as appropriate if risks emerge."

One of these risks could be a spike in inflation, which the Fed expects to move up in the coming months. Other risks could be public health, labor market and financial market conditions.

By December, price increases will be at 2.4%, Fed officials predicted — higher than their December estimate of 1.8% and slightly ahead of the central bank's target of around 2%.

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Digital Wallets Usage to Exceed 4.4B Globally by 2025, Study Finds

Stimulated by the COVID-19 pandemic, the number of unique digital wallet users are expected to exceed 4.4 billion globally by 2025, up from 2.6 billion in 2020, according to a recent study from Juniper Research. The total amount spent through digital wallets is also expected to nearly double to $10 trillion annually by 2025 from $5.5 trillion over the time period.

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What’s the Future for Overdrafts?

Overdraft fees recovered some of what they lost in the early part of the pandemic. But with new sheriffs in place in Washington and neobanks (and some incumbents) touting bounce-friendly options, some question whether this huge source of fee income is sustainable.

Just as interchange income was devastated in the months after the pandemic hit, overdraft fees earned by banks and credit unions also dropped precipitously. One reason was that the massive government stimulus payments, along with unemployment insurance extensions, helped consumers avoid overdrawing their checking accounts. Various forbearance programs were another factor, as was the easing of overdraft terms and outright waivers by numerous financial institutions for varying periods of time.

Even though overdraft fees in the fourth quarter of 2020 soared by 64%, the median decline in overdraft revenue for the banking industry was 22% for all of 2020, according to S&P Global.

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Analysis Suggests CU Small Biz Loan Approval Rates Declined in Recent Months

A new analysis has found loan approval rates by credit unions has declined in recent months.

The analysis, released as part of the latest Biz2Credit Small Business Lending Index, found a year ago, credit unions approved almost 40% of the applications received. In February 2021, the figure was at 20.3%, a slight fall from January 2021 when credit union approval rates stood at 20.5%, Biz2Credit reported.

But the decline hasn’t just taken place at credit unions. Loan approval rates made to small businesses by banks and other lenders have fallen significantly since their peak a year ago, according to the company. The results of the Index are based on primary data submitted by more than 1,000 small business owners who applied for funding on the Biz2Credit platform.

The approval rates in the Biz2Credit analysis refer to non-Paycheck Protection Program (PPP) loans.

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Risk Management

Report: Nearly Half of All CUs at Increased Risk of Cyberattack

Roughly half of all credit unions and more than half of their vendors could have critical vulnerabilities in their technology that leave them at increased risk of cyberattacks.

That’s according to a new report from Black Kite, a firm that creates cyber risk-rating profiles. The company analyzed the cybersecurity positions of 250 federally insured credit unions and 150 vendors that serve the industry.

The biggest risks, the company said, include vendor weaknesses, a lack of email security and out-of-date computer systems. Cyberattacks on credit unions could result in financial risk ranging from $190,000 for small credit unions to over $1.2 million for larger institutions, according to the report.

The report went on to recommend that credit unions closely monitor and keep track of sensitive data shared with each vendor, classify vendors according to their industry or the services they provide, and include the number of sensitive records shared with vendors as parameters in their risk-management methodology. (American Banker, March 17)

Merchants Group Praises Durbin Statement on Swipe Fees

A group representing merchants is praising attention being given to credit card processing fees by the chairman of the Senate Judiciary Committee.

The Merchants Payments Coalition praised Richard J. Durbin (D-IL) for his statements made during an antitrust hearing. Durbin, the author of the amendment named after him that was included in 2010 legislation, cited Visa and Mastercard’s plans for a nearly $1.2 billion increase in credit card swipe fess scheduled to take effect in April.

“They didn’t forget,” Durbin said, referring to his earlier legislation. “They’re waiting for an opportunity to get even again. Where is the policing authority to stop this duopoly from doing this to every merchant and retailer in America?”

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