CURRENT Newsletter | 22 June 2021 - Virginia Credit Union League

The League’s popular CONNECT Conference is returning Sept. 27-29! Scheduled for the Hilton Downtown Richmond, the conference features keynote speaker Andy Janning, an award-winning speaker, author, photographer and talent development expert.

Andy will share practical skills, advice and insights from his three decades of experience that will help you transform your career!

Stay tuned for registration information and additional details!
Save The Date Flier

Report Your Youth Financial Education Presentations

Every student counts! Remember to report youth presentation numbers to the Credit Union Financial Education Network (formerly the National Youth Involvement Board, or NYIB). Strong numbers demonstrate to state and national legislators how the credit union system is changing lives through our commitment to financial education.

As you know, Virginia-based credit unions have long been a leader in financial education, consistently ranking among the Top 10 states for presentations conducted and students reached with financial education programming.

Help us keep that decade-plus streak alive by reporting your information today!

Virginia-Based Credit Unions Continue to Grow; Top 15 Million Memberships as of March 31

Memberships at Virginia-based credit unions increased 10% year-over-year to 15.4 million as of March 31, 2021, while loan growth slowed to tally a 3.38% increase for the same 12-month period.

Strong membership growth has been a bright spot at Virginia-based credit unions for more than a decade. At year-end 2015, the commonwealth’s credit unions counted just shy of 10 million memberships. At year-end 2010, that number was 7 million.

“Despite the challenges of the COVID-19 pandemic, consumers continue to flock to Virginia-based credit unions,” noted Virginia Credit Union League President Rick Pillow. “Consumers are finding they appreciate credit unions’ focus on the needs of members and their accessible and consumer-friendly products and services. Our focus on members took on new significance this past year as many families struggled with hits to their income and unemployment.”

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View the 1Q2021 Credit Union Profile, featuring stats and performance trends for Virginia-based credit unions
Related: Outstanding Loans at CUs Increased During April, Savings Growth Slows

Fiserv Webinar: Exceptional Member Service as a Differentiator for Your Card Program

Providing exceptional service is a differentiating factor in the crowded and hyper-competitive card market. Join our free June 24 webinar and learn how serving your members’ needs is key to “customer satisfaction” and loyalty and why it matters for an optimal credit union member experience.

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CULAC Fundraiser ‘$30 By the 30th’ Underway; Support CUs’ Advocacy Work

It’s June, which means it’s time for our annual $30 by the 30th campaign supporting CULAC. This is one of the best ways to support one of our movement’s strongest advocacy tools – by donating $30 or more to CULAC by June 30.

As the 117th Congress continues its work, the credit union movement is facing threats on multiple fronts, including attempts to apply new CRA-like rules to credit unions, expand regulations and even place new limits on interchange and our ability to fight fraud and data breaches impacting our members.

Learn more | Contribute here

Social Responsibility Awards: Get Recognized for Your Good Works!

The League-CUNA Social Responsibility awards are a way for you to showcase the extraordinary efforts you are taking to serve your members. The deadline is June 30!

There are four 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.

Start your entry here. The time period covered for your application should be the calendar year through June 30, 2021. If you have additional questions after reading this FAQ, please don't hesitate to contact your League’s Mary Amyx - 800.768.3344, ext. 630.

NCUA Announces DEI Summit Nov. 2-4

The NCUA’s Diversity, Equity and Inclusion Summit (DEI Summit) is a three-day event during which credit union and industry professionals who are committed to advancing diversity, equity and inclusion within the credit union system will gather to share best practices, address challenges to advancing diversity, and learn how the NCUA can support the industry in its efforts.

The event runs Nov. 2-4.

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Advocacy / Governmental Affairs

Young Professionals Advocacy Workshop scheduled Aug. 4-6

Young credit union professionals will have the opportunity to learn from CUNA and League advocacy experts on the best ways to advocate for the credit union movement at CUNA’s Young Professional Advocacy Workshop. The three-day virtual training will take place Aug. 4-6.

“Learning the ins and outs of effective advocacy is important for any credit union leader, especially early in their careers,” said Adam Engelman, CUNA director, federal grassroots and programs. “Getting young credit union leaders familiar with the advocacy process and the importance of building relationships with policymakers is essential to advancing credit union policies on all levels.”

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Compliance / Regulatory Affairs

Federal, State Regulators Update BSA/AML Examination Manual

The Federal Financial Institutions Examination Council (FFIEC) Monday released updates to four sections of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

The updates should not be interpreted as new instructions or increased focus on certain areas; instead, they offer further transparency into the examination process and support risk-focused examination work.

The updates affect the following Manual sections:

The Manual provides instructions to examiners for assessing the adequacy of a bank’s or credit union’s BSA/AML compliance program and its compliance with BSA regulatory requirements. The Manual itself does not establish requirements for banks; such requirements are found in statutes and regulations.

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CUNA, Leagues Urge NCUA to Work With Congress to Pursue More Tools to Help With PCA, Capital

CUNA and several its affiliated state credit union leagues have sent a letter to NCUA urging it to work with Congress to pursue additional tools to aid credit unions facing prompt corrective action (PCA) and other capital challenges.

While it acknowledged the recent interim final rule OK’d by the agency that provides two temporary changes to the NCUA’s PCA regulations, the trade groups said the coronavirus pandemic has “exposed what has been has been clear for a long time: NCUA lacks the statutory flexibility it needs to help credit unions navigate certain capital situations induced by natural disasters, public health crises, other emergencies, and the governmental responses thereto.

“While credit unions entered the crisis extremely well-capitalized, the impact of the ensuing economic crisis has and will put stress on capital,” the letter continues. “Among other things, credit union capital levels have been impacted by much needed economic assistance sent by the government to consumers through credit unions and other financial institutions. These payments, in many cases, have been deposited into credit union accounts and have presented downward pressure on otherwise healthy capital levels.”

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CFPB to Adopt Rules to Help Struggling Homeowners, With Some Exclusions

The U.S. consumer watchdog in the coming weeks will adopt a rule requiring mortgage servicers to give struggling homeowners until next year to resume repayments, but is expected to carve out some groups of borrowers following industry pushback, four people with knowledge of the matter told Reuters.

The Consumer Financial Protection Bureau (CFPB) in April proposed, among other measures, a new review process that would generally prohibit mortgage servicers from starting a foreclosure until after Dec. 31, 2021. The rule will throw a lifeline to hundreds of thousands of homeowners due to exit COVID-19 mortgage holiday or “forbearance” programs in the coming months.

Mortgage servicers receive payments from borrowers and pass them on to investors, tax authorities and insurers.

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FIs, Consumer Advocates Unite Against Tax Reporting Proposal

Opposition is mounting to a Biden administration plan to require financial institutions to report customers’ account flow data to the Internal Revenue Service, with banks, credit unions and some consumer advocates warning it would be a massive invasion of consumer privacy.

The Treasury Department outlined a proposal in its recent budget request for a regime requiring banks and other financial institutions to report inflows and outflows in consumer accounts with more than $600. The goal is to crack down on tax evasion by high earners and narrow the so-called tax gap between what Americans pay and what they owe.

Financial institutions sounded the alarm over the new plan — meant to help the administration pay for the American Rescue Plan and infrastructure overhaul — before it was formally unveiled on May 20, noting the potential regulatory burden. But criticism has intensified from a broader array of stakeholders over concerns that consumers' private information could be compromised.

"It’s not a targeted program," said Ed Mierzwinski, senior director of the federal consumer program at the U.S. Public Interest Research Group, who warned lower-income Americans could be targeted by the reporting regime. "They are collecting information about everybody and I don’t know why it is necessary to collect information about everybody.”

The top 1% of taxpayers fail to report as much as 20% of their income, and the projected tax gap could reach roughly $7.5 trillion, according to estimates. The IRS cannot always identify more obscure income sources in partnerships, LLCs and S-corporations. The administration has also called for more resources at the IRS to conduct tax audits, which plummeted between 2010 and 2018.

The proposed financial reporting regime is seen as helping the government gain insight into wealthy earners. But financial trade associations and others warn that will be a costly undertaking for the industry to implement and it could expose private account data. Many say that would be a significant expansion of what banks report to the government about their customers, on top of the suspicious activity reports they submit to the Financial Crimes Enforcement Network.

(American Banker, June 17)

News About Credit Unions

Deadline Approaching For Low-Income CUs to Apply for NCUA’s CDRLF Grants

Low-income-designated credit unions seeking Community Development Revolving Loan Fund grants, including MDI mentoring grants, have until June 26 to submit their applications.

Grant requirements, application instructions, and other important information are available on the grants program page of NCUA.gov.

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FHLBank Atlanta 2021 Election of Directors

Federal Home Loan Bank of Atlanta (Bank) has begun the election to fill certain directorships on the Bank’s board of directors, including the member directorships in Alabama and the District of Columbia, and one public interest independent directorship. The term of the directorships to be filled in this election begins on Jan. 1, 2022, and ends on Dec. 31, 2025.

Pursuant to the Bank’s board-approved Equal Opportunity Policy Statementopens a pdf, which is available on the Bank’s website, the Bank encourages the consideration of diversity in nominating or soliciting nominees for positions on the Bank’s board of directors.

Individuals interested in being considered for the public interest independent directorship must complete and return to the Bank, by 5 p.m. EDT on July 9, 2021, the application and related forms that are available on the Bank’s website. If you have questions, please contact Tina Carew, Associate General Counsel, at 404.888.8549 or tcarew@fhlbatl.com.

League News

Whitt Clement to Become UVa. Rector on July 1

Longtime League lobbyist and former Virginia Secretary of Transportation Whitt Clement will start his two-year term as rector for the University of Virginia on July 1.

Clement is a former state delegate who is now a special counsel and former partner for the Richmond-based law firm Hunton Andrews Kurth. Congrats Whitt!

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Education & Training

Change and the Critical Role of HR Professionals

Credit union human resources departments have been significantly impacted by pandemic-induced changes. HR’s overall role and the daily tasks carried out by HR professionals have gone through rapid change, notably due to the escalation of remote work.

Not only have HR pros had to guide their credit unions and staffs through the change to a more digital work-from-home environment, but they have also had to find ways to be effective and productive in their own roles when working from home.

While all of this has been going on, they have had to keep their fingers on the pulse of diversity, equity and inclusion (DEI) initiatives that are sweeping the industry. Change has enveloped HR staffers in a unique and all-consuming way, and they still need to make sure they understand the latest regulatory changes.

“This pandemic brought some historic regulation changes that we had to adapt to and address really quickly,” said Jess MacLagan, instructional design manager for CUNA. “CUNA HR Compliance Certification Virtual School with CUDoctor, being held on August 3^rd and 5^th, will address the continuing changes in human resources laws and regulations.”

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Financial Services / Economic News

CUNA Raises Forecast for Credit Unions in 2021-22

CUNA’s latest forecast raises its outlook for economic growth and credit union earnings through the end of 2022.

Credit unions are now expected to generate net income that will be 0.85% of average assets in both 2021 and 2022. That’s up from its April forecast of 0.60% and its February forecast of 0.50% for both years.

The forecast dated June 14, and announced Monday by its author, CUNA senior economist Jordan Van Rijn, expects gross domestic product to grow 6.5% in 2021, up from its April forecast of 6% growth. It forecasts economic growth of 4.5% next year, up from its April forecast of 4%.

Last year’s ROA was 0.71%, down from 0.94% in 2019. It was 1.04% in the first quarter.

“First-quarter call report data shows that credit unions have continued to perform well throughout the pandemic, with historically low delinquency and charge-off rates, solid membership growth, soaring deposits, and earnings over 1.0%,” Van Rijn wrote.

The net worth ratio for credit unions is expected to be 9.6% at the end of this year, up from April’s forecast of 9.5%, and 9.9% at the end of 2022, up 20 basis points.

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Another Study Confirms Shift By Consumers From Branches to E-Channels

What’s the latest on consumers’ big shift to digital delivery?

A recent survey of mobile banking customers by S&P Global Market Intelligence has found about 51% of respondents said that they were visiting bank branches less frequently due to the pandemic.

Of those, more than 65% said they were also using mobile apps more frequently, the ABA Banking Journal stated in its analysis.

That trend is expected to continue, with about 88% of survey respondents who reported using their mobile apps more frequently during COVID-19 saying that they anticipate continuing or increasing current usage levels once the pandemic officially ends.

The most popular mobile app feature for new users was photo check deposit, followed by account-to-account money transfer, bill payment and peer-to-peer payments.

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The Improving Economy is Great News for Banks

Banks are now among the biggest profit-generating machines in Corporate America. According to FactSet Research, earnings for the financial sector are expected to more than double in the second quarter and estimates continue to rise, led by gains at Wells Fargo, Capital One, Discover Financial Services and Bank of America.

Bank stocks are also getting a lift due to the fact that they pay big dividends that yield more than boring bonds. That makes them more attractive to conservative investors looking for steady income.

"Banks have cleaned up their books since the great financial crisis and have proven their business strength in the pandemic crisis," said Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, in a recent report.

"Even at low absolute interest rates, they can make money. Strong economic and capital market activity is very pro-financial stocks. Financial strength gives them the flexibility to reward investors through dividends and share buybacks," she added.

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News From Credit Unions

NWFCU Foundation Diaper Drive Provides Over 124,000 Diapers to NOVA Diaper Bank

NWFCU Foundation, the philanthropic arm of « Return to "CURRENT Newsletter" Go to main navigation