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CURRENT Newsletter | 19 November 2020

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Advocacy / Governmental Affairs

Compliance / Regulatory Affairs

Financial Services / Economic News

News From Credit Unions

Headlines

Turnkey Mortgage Solutions: Learn More about Our New Partnership with CUMA During Dec. 10 Webinar

Looking for a turnkey, customizable mortgage solution for your credit union? Credit Union Mortgage Association (CUMA), your League’s newest business partner, boasts a 40-year track record of providing best-in-class mortgage-related services to credit unions of all asset sizes, including origination, processing, underwriting, servicing, closing and secondary market access. Join us for a Dec. 10 webinar (at noon) to learn about CUMA and what they can help you do for your members!

Register here

CUMA is a full-service mortgage company, owned 100% by credit unions, exclusively serving credit unions. Learn more about our partnership.

Webinar Series for Small CUs

Start adopting industry best practices to address the unique challenges of your small credit union. CUNA-League System Small CU Webinar Series is a new live and recorded webinar series that’s free for CUNA and League members. It runs through Spring 2021.

Get impactful best practices relevant to small credit unions on hot topics, including member experience, digital marketing, lending and more.

See a full list of free webinars and register here.

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.

Advocacy / Governmental Affairs

If Congress Doesn’t Act, 12 Million Americans Could Lose Unemployment Aid After Christmas

Deadlines set by Congress early in the pandemic will result in about 12 million Americans losing unemployment insurance by the year’s end, according to a report released Wednesday — a warning about the sharp toll that inaction in Washington could exact on the economic health of both individual households and the economy at large.

According to the report from unemployment researchers Andrew Stettner and Elizabeth Pancotti, those Americans will lose their unemployment benefits the day after Christmas — more than half of the 21.1 million people currently on the benefits — due to deadlines Congress chose when it passed the Cares Act in March amid optimism the pandemic would be short-lived.

Another 4.4 million people have already exhausted their benefits this year, according to Stettner and Pancotti, who wrote the report for the Century Foundation, a public policy research group. (Washington Post, Nov. 18)

Related: Fears Mount Over Long COVID Winter Without Stimulus

Biden Transition Team Replete with Housing Experts but Lacking Lenders

Several housing experts who worked at government-related agencies during the Obama era are on the Biden administration’s transition teams, but representation of companies currently working in the mortgage business is lacking.

The team-lead for review of the Department of Housing and Urban Development, for example, is the vice president and chief innovation officer at the Urban Institute, Erika Poethig. Poethig previously served as an acting assistant secretary for policy, development and research at HUD under the Obama administration from 2012 to 2013.

At least one team member has past mortgage industry experience. Helen Kanovsky, who was the general counsel for the Mortgage Bankers Association from 2016 to 2019, is on the Treasury transition team. Kanovsky served as general counsel for HUD from 2009 to 2016.

“These names are probably more consumer-centric, which I think is not a bad thing. They are knowledgeable about what government can accomplish,” said Faith Schwartz, owner of advisory firm Housing Finance System Strategies. “The mortgage business, as you know, is very complex and it helps to have people in government who can guide career staff to help consumers navigate that.”

“The only thing I think they need to be careful of is that they should have a mix of some people that have some business background and some that represent consumers,” added Schwartz, who previously played a key role in loss mitigation policy during the 2008 crisis, and has worked with some of the people on the transition team. “That helps businesses do the best job they can as far as making good loans.” (American Banker, Nov. 13)

Related: Joe Biden fires an early warning shot at Wall Street

Adequate Funding for Key CU Programs Essential in FY21

CUNA wrote to Senate Appropriations Committee leadership Wednesday in support of several credit union priorities in committee-released appropriations legislation for fiscal year 2021.

“Credit unions have interest in several programs and report language included in these bills and as we continue to endure the COVID-19 pandemic and ensuing economic crisis, adequate funding for key programs is essential,” wrote CUNA President/CEO Jim Nussle.

Compliance / Regulatory Affairs

Debt Collection Compliance Aid Resource Webpage

Two weeks ago, the Consumer Financial Protection Bureau (CFPB) released the Debt Collection Final Rule. With the rule, the CFPB also began releasing compliance aids to assist the financial services industry.

Learn more

AML Changes Should Provide ‘Substantial’ Flexibility for CUs

CUNA supports a Financial Crimes Enforcement Network (FinCEN) risk-assessment process and publication of national anti-money laundering (AML) priorities but cautions against the use of one-size-fits-all regulatory requirements. FinCEN issued an Advance Notice of Proposed Rulemaking on AML program effectiveness.

“CUNA strongly supports FinCEN’s efforts to track and investigate financial crimes involving money laundering and terrorist financing and agrees that AML regulatory changes that eliminate redundancies and unnecessary burdens will help credit unions and other covered institutions streamline and focus their compliance efforts,” the letter reads. “Nevertheless, it is critically important to strike the right balance between the imposition of compliance costs on leanly staffed, community-oriented credit unions and the benefits that AML programs can provide to law enforcement.”

Learn more

Financial Services / Economic News

Banks, Credit Unions Slip in Customer Satisfaction Survey

Banks outperformed credit unions in a national customer satisfaction survey for a second consecutive year.

The American Customer Satisfaction Index for 2020 saw the score for credit unions drop slightly from a year earlier. The industry's 77 score was one point below the banking industry. Last year was the first year banks bested credit unions, and this year’s survey marks a historic low for credit union satisfaction rates, down 10 points from the industry’s peak in 2011.

Though they are doing better than credit unions, banks' scores in 2020 were also down from a year earlier. (Credit Union Journal, Nov. 18)

CUNA COVID-19 Task Force Releases First Industry Outlook

CUNA’s Credit Union System COVID-19 Restart and Recovery Task Force released its first industry outlook Tuesday to provide guidance and strategies for credit unions navigating the effects of the COVID-19 pandemic. Risk mitigation and the digitalization of financial services are two primary concerns facing credit unions in the current operating environment.

“Our team is committed to collecting and sharing resources that will help credit unions adapt to the current challenges facing financial systems,” said CUNA Chief Engagement Officer Greg Michlig. “In collaboration with our system partners, the Task Force will continue to assess both opportunities and risks to prepare credit unions for what has become the industry’s new normal.”

Learn more

Mobile Emerges as Top Preference for Bank Customers

Mobile banking has become the preferred channel for bank customers.

A recent survey conducted by market research firm Morning Consult for the American Bankers Association found that, prior to COVID-19, 36% of bank customers preferred using apps on their mobile devices to manage their bank accounts, while 29% leaned towards online banking. Another 17% favored visiting a branch.

The popularity of using devices has grown during the pandemic: 39% of respondents now prefer mobile banking. Online banking also became more common, with 32% of respondents naming it their top choice. Branch banking fell to 10%. (The remaining respondents prefer channels such as ATMs, phone calls and mail, or they had no preference.) (American Banker, Nov. 18)

What’s Ahead for Economy? Depends on Response to Coronavirus, States Fannie Mae Analysis

The response by consumers and policymakers to rising COVID-19 case counts is likely to determine whether currently projected improvements to U.S. economic growth materialize, according to the latest commentary from the Fannie Mae Economic and Strategic Research (ESR) Group.

While the ESR Group expects the virus’ resurgence to drag on consumer spending in coming months, absent spring-like behavioral shifts and lockdown measures, it expects that the further recovery of the domestic labor market and built-up household savings will likely be sufficient to drive continued real GDP growth, which is now forecast at 3.3% for full-year 2021, slightly below last month’s projection, and 3.0% for full-year 2022.

Nearer-term projections, including the fourth quarter of 2020 and the first quarter of 2021, were revised modestly downward due in part to recent signs of modest, virus-related changes in consumer behavior. Although strict new lockdown or social distancing mandates remain the largest downside risk, ESR Group stated economic growth in coming quarters could substantially surpass the baseline forecast if, alternatively, such measures can be avoided and the development of a vaccine progresses swiftly.

Learn more

Is GSE Reform Dead on Arrival Under Biden?

The Trump administration in the last two years has laid the groundwork to free mortgage giants Fannie Mae and Freddie Mac from conservatorship without any congressional help. But following President-elect Joe Biden's victory, mortgage industry veterans predict those efforts will slow considerably or stop altogether.

Some have speculated that the incoming Biden administration may not view reforming the government-sponsored enterprises with the same urgency as President Trump's appointees, and could view the status quo — the two companies remaining in conservatorship — as sufficient for the moment.

To slow the Trump administration's progress, Biden's team could quickly seek to remove Federal Housing Finance Agency Director Mark Calabria, pending the outcome of a crucial Supreme Court case about the agency's leadership structure. A new FHFA appointee could then try to overturn Calabria initiatives, such as a rule on the GSEs' post-conservatorship capital levels finalized Wednesday. (American Banker, Nov. 18)

Americans' Mortgage Debt Soars to a Record $10 Trillion

Low interest rates have helped fuel a boom in the US housing market: Last quarter Americans' mortgage debt climbed to a record high of nearly $10 trillion, the Federal Reserve Bank of New York reported Tuesday.

Homebuyers are leveraging the near-constant new lows in rates. At the beginning of this month mortgage rates fell to a record low -- the 12th record low in 2020.

So it's no surprise that Americans are out buying houses. Between July and September, mortgage debt increased by $85 billion to a total of $9.86 trillion, a record high, according to the report. Mortgages are the largest contributor to household debt in the United States.

The New York Fed's report was full of records or near-records.

Learn more

How a Vaccine Could Upend Real Estate Markets -- Again

In just a matter of months the coronavirus pandemic dramatically changed the landscape of the housing market, especially in big cities. But now news of a promising vaccine could turn the market on its head again.

Nationally, home prices have never been higher, driven up as surging demand due to record low mortgage rates comes up against historically low inventory of homes for sale.

But the most expensive urban areas have been experiencing the opposite problem. Cities like New York and San Francisco have seen higher vacancy rates and lower rents and sale prices as many people, untethered from office jobs, retreated to the suburbs and less densely populated areas.

But with potential vaccines on the horizon, real estate in big cities could see a turnaround.

News From Credit Unions

Virginia Credit Union Receives National Recognition for Financial Education

Virginia Credit Union has received national recognition for financial education programs for adults.

Virginia Credit Union took first place among large credit unions in the nation for adult education in the Desjardins financial education awards sponsored by the Credit Union National Association (CUNA).

The adult education award was based on the “Financial Freedom for Prisoners” program Virginia Credit Union has led at the U.S. Correctional Complex of Petersburg and the Virginia Women’s Detention Center in Chesterfield. In 2019, Virginia Credit Union offered a series of 44 financial education classes for incarcerated individuals, reaching 1,927 inmates.

A university study cited in the award application offered evidence of the important role financial education can play in reducing recidivism for incarcerated adults transitioning back to society.

Learn more

Related: 2020 Maxwell, Herring, Desjardins National Award Winners Announced



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