CURRENT Newsletter | 24 September 2020 - Virginia Credit Union League

We want to make you aware of a web-based campaign that seeks to “pressure” credit unions into providing short-term loans and foreclosure/forbearance assistance. We believe this campaign to be sorely misguided. Based on the survey we’re conducting, we know Virginia-based credit unions are going above and beyond to aid members suffering financial hardship as a result of the pandemic.

The twist here is that the campaign asks members to contact their credit union directly to ask a series of questions about your pandemic assistance efforts. View it here.

And if you haven’t yet completed the CUNA/League pandemic assistance survey, we would strongly encourage you to do so.

It’s available here: https://www.research.net/r/CULCOVID630 (Additional info below.)

In addition to helping our advocacy efforts, having this information readily available may well help you avoid reputation risk as a result of this campaign.

Survey: How Have You Helped Members During Pandemic?

We need your help! We have one of the poorest showings nationwide in the number of credit unions participating in the CUNA/League pandemic assistance survey. This short survey captures information on loan modifications, forbearance, emergency loans, fees waived and other assistance you’ve provided to members during the pandemic.

CUNA has graciously given us an extension on reporting until Oct. 1. We’re looking for 2^nd quarter 2020 information, which we know many of you are already reporting to your boards.

Please complete the survey here: https://www.research.net/r/CULCOVID630

We’ve also enclosed a PDF copy of the surveyopens a pdf for your review. We would also encourage you to name a point person for submitting information via this survey, as CUNA and the Leagues plan to conduct this survey quarterly, given that information such as this is of keen interest to lawmakers and in advancing our advocacy work.

If you need assistance in completing the survey, please contact your League’s Lewis Wood (800.768.3344, ext. 629 / lwood@vacul.org) or Nicole Widell (ext. 604 / nwidell@vacul.org).

CUNA Notes Rising Risk of Overdraft Litigation

CUNA and the Leagues have been tracking overdraft-related suits and demand letters, which have evolved significantly over the past few years. "Overdraft litigation" is a convenient umbrella term for several different types of legal allegations and fact patterns.

In the most recent cases, the plaintiffs' attorneys are asserting claims grounded in State laws governing breach of contract but may also allege violations of Regulation E or a state consumer protection law. Often, these claims hinge on the credit union's member agreement or overdraft opt-in disclosure being inconsistent with the actual overdraft/NSF practices at the credit union.

CUNA offers a couple of measures that may mitigate your risk…

Learn more (Password required. Register here if you need one.)

Upcoming Training & Education

We’ve got several upcoming events you’ll want to mark on your calendars!
League Events

Credit Union Employee and Volunteer Orientation (Oct. 14) (Registration now open!)
Human Resource Peer-to-Peer Dialogue (Oct. 21) (Registration coming soon!)
Compliance Hot Topics Discussion (Oct. 28) (Registration now open!)
Fraud Trends During COVID-19 (Oct. 29) (Registration coming soon!)

Woods Rogers HR Lifeline Webinars

Save the Dates: IGNITE 2021 Set for April 14-16

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!

Please note: We will continue to follow health mandates and monitor guidance from local, state and federal officials regarding the safety of meetings as we move closer to our event dates. We’re hopeful, however, that we’ll see your smiling faces (perhaps masked) come April!

Questions? Contact your League’s Mary Amyx.

GWLN Virginia Sister Society Offering Virtual Programs on Leadership Oct. 15, 22

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

We are living in an environment of constant change and are all faced with increased stress and anxiety. It’s time to transform yourself and your team. 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. Please only register for one event.
View the event flyer here.opens a pdf

We look forward to ‘seeing’ you there!

Reminder: Changes to NCUA’s Chartering and FOM Manual Coming Oct. 14

Effective Oct. 14, 2020, NCUA’s Chartering and Field of Membership Manual will again include a provision allowing the designation of a Combined Statistical Area (CSA) or a portion of one as a well-defined local community.

Building Better Lenders: 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

CUNA CU Board Leadership Virtual Roundtable Set for December

Credit union board and committee members will come together virtually to discuss pressing industry topics for CUNA Credit Union Board Leadership Virtual Roundtable, Dec.14 and 15.

“Reviewing and rethinking strategies is critical in these unprecedented economic times,” said James Carrick, vice president of learning events at CUNA. “At this roundtable, board members will hear from industry leaders and their peers about the current environment, how it can affect your credit union and how to make plans that adapt with change.”

Credit union board and committee members will gain important information from their peers by:

Attending panel discussions with high-performing boards and CEOs across the industry
Hearing from industry leaders about how the external environment can affect your credit union
Getting insights for ways to plan to address the ever-changing environment

Learn more

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.

Advocacy / Governmental Affairs

SAFE DATA Act Would Create National Security, Privacy Standard

CUNA supports the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act introduced Wednesday in conjunction with a Senate Commerce Committee hearing.

The bill would simplify privacy and data security laws by a creating national standard which would add protections for all Americans while reducing compliance burdens stemming from compliance with many standards across the states.

“Data privacy and data security are major concerns for Americans given the frequency of reports of misuse of personally identifiable information (PII) data by businesses and breaches by criminal actors, some of which are state-sponsored,” CUNA’s letter for the hearing reads. “Since 2005, there have been more than 11,700 data breaches, exposing more than 1.6 billion consumer records. These breaches have cost credit unions, banks and the consumers they serve hundreds of millions of dollars, and they have compromised the consumers’ privacy, jeopardizing their financial security.”

Learn more

Compliance / Regulatory Affairs

GAO Report on BSA Compliance Costs

The Government Accountability Office (GAO) has released a new report that shows for at least one large credit union Bank Secrecy Act compliance costs are significantly higher than that of financial institutions.

The GAO report, on BSA compliance costs, also includes a number of recommendations, including that FinCEN develop written policies and procedures to promote greater use of BSA reports by law enforcement agencies without direct database access. In response, FinCEN said it concurs with GAO's recommendations.

According to GAO, it reviewed a nongeneralizable sample of 11 financial institutions that varied in terms of their total assets and other factors, and estimated that their total direct costs for complying with the BSA ranged from about $14,000 to about $21 million in 2018.

Not surprisingly, GAO said it found total direct BSA compliance costs generally tended to be proportionally greater for smaller FIs than for larger FIs.

“For example, such costs comprised about 2% of the operating expenses for each of the three smallest banks in 2018 but less than 1% for each of the three largest banks in GAO's review,” GAO said. “At the same time, costs can differ between similarly sized banks (e.g., large credit union A and B), because of differences in their compliance processes, customer bases, and other factors. In addition, requirements to verify a customer's identity and report suspicious and other activity generally were the most costly areas—accounting for 29% and 28%, respectively, of total compliance costs, on average, for the 11 selected banks.”

Learn more

Will ‘Fincen Files’ Give FIs Opening to Push for AML Reform?

Many banks were in the uncomfortable position over the weekend of having their ties to dubious customers revealed thanks to the BuzzFeed report on data sent to the Financial Crimes Enforcement Network. But there may be a silver lining.

The "Fincen Files" report, based on over 2,000 suspicious activity reports that were leaked to BuzzFeed, could shine an unenviable light on the client list at certain large institutions. But industry lawyers and others say the investigation, a collaboration with the International Consortium of Investigative Journalists, could also heighten attention on flaws with SARs and other anti-money-laundering efforts that banks have urged Congress and Fincen to fix.

"If I were looking at anti-money-laundering today, knowing what I know about the instances and enforcement matters I was involved in, I would sort of rebuild it from the ground up," said Thomas Vartanian, a former regulator and industry attorney who now directs the Program on Financial Regulation & Technology at George Mason University’s Antonin Scalia Law School. (American Banker, Sept. 23)

Economy / Financial Services

US Card Credit Performance Holds Up as Stimulus Safety Net Frays

Credit card portfolios once again showed strong credit performance in monthly reports posted in the middle of September, with lenders continuing to say that emergency pandemic measures would push the recognition of actual loan losses into 2021.

The average net charge-off rate for securitized receivables across six large issuers increased 12 basis points from July to 2.21% in August, but was down nine basis points from the year prior.

Card performance has been sustained in part by direct federal aid to households in the form of one-time payments and expanded unemployment benefits. Despite a jobless rate that surged to 14.7% in April and remained high at 8.4% in August, personal income was higher in each month from April through July, the most recent month available, than it was in February before the pandemic hit. A survey by a team of economists in July found that more than half of respondents said they mostly used government payments of up to $1200 per adult to pay down debt. (S&P Global Market Intelligence, Sept. 22)

Most Employers, Including FIs, Plan 2021 Salary Raises

Despite the pandemic economic recession, most employers, including financial institutions, said they plan to provide raises and bonuses for employees in 2021.

The 2020 General Industry Salary Budget Survey, conducted by Willis Towers Watson Data Services, found companies are projecting average salary increases of 2.8% for all employees next year, including exempt, non-management and management employees. Nonexempt salaried and hourly employees as well as executives are in line to receive slightly smaller increases (2.7%).

Among financial institutions, executives are projected to receive salary increases of 2.8%; managers (non-executives), 3.1%; exempt non-management and nonexempt salaried employees, 2.9%; and nonexempt hourly employees, 3%, according to the survey.

Learn more

Risk Management

Eligible CUs Should Have Received Equifax Settlement Claim Info

The settlement administrator for the Equifax data breach settlement has now sent out information on making a claim to credit unions it knows to be eligible. The settlement was announced in June for the Equifax data breach lawsuit stemming from a 2017 data breach that exposed the personal information of more than 145 million consumers.

Eligible credit unions should have received their packet of information by now. If a credit union believes it is eligible and has not yet received the packet, it may contact the settlement administrator directly at: info@equifaxfidatabreachsettlement.com or 1-855-968-4292 so that a packet may be sent.

Alternatively, all of the information and forms required to make a claim are available on the settlement website.

The deadline to file a claim is Dec. 31, 2020. Credit unions eligible to make a claim and receive compensation are those located in the United States (including its territories and the District of Columbia) that issued alerted on payment cards.

“Alerted on payment cards” means, for the purposes of the settlement, any payment card (including debit or credit cards) that was identified as having been at risk as a result of the data breach in the following alerts or documents issued by Visa, MasterCard, Discover, or American Express:

MasterCard series ADC 004129-US-17 (e.g., ADC 004129-US-17-1, ADC 004129-US-17-2, ADC 004129-US-17-3);
Visa series US-2017-0448-PA (e.g., US-2017-0448a-PA, US-2017-0448b-PA, US-2017-0448c-PA);
American Express Incident Number C1709012512; and
In a similar notice issued by Discover, the recipients of which were identified by Discover in discovery in the Action.

Learn more

Human-Looking Attacks Infiltrate FIs: NuData Security

Ninety-six percent of all cyberattacks on financial institutions during the first six months of 2020 were sophisticated attacks – those that are high-quality enough to resemble human behavior, according to a new report from NuData Security, a Mastercard company. This reflected the highest percentage of sophisticated attacks out of all industries analyzed and an increase from 90% during the same time period in 2019.

Unlike basic cyberattacks, which focus on high volume rather than quality and do not attempt to emulate human behavior, sophisticated cyberattacks often include human intervention, such as the solving of a CAPTCHA, and allow fraudsters to bypass common security layers such as bot detection tools, NuData explained. The industry with the second-highest percentage of sophisticated attacks from January to June 2020 was travel at 67%, an increase from 48% one year earlier.

“As companies get wise to fraudsters and improve their bot-detection tools, fraudsters are forced to find another way in and rely more on sophisticated attacks to help them access protected platforms,” the report stated.

NuData added that financial institution traffic remained stable during the first six months of the year, aside from a spike in mid-April, as consumers accessed their accounts following the first round of economic stimulus checks.

Learn more

Marketing News

How COVID Is Reshaping the Way Financial Marketers Target Consumers

COVID-19 has been a forecaster’s nightmare. One of the basic tools of any kind of predicting is historical data. But for financial institutions, there hasn’t really been anything quite like COVID-19 and the accompanying human and economic upheaval.

Other recent pandemics and periods of credit crisis don’t match up neatly with what we are going through now, because the causes are completely different.

“There’s a lot of wait and see right now,” says Sofia Kluch, Director of Data Science at Gallup. “Everyone wants to forecast what the long-term impacts of coronavirus will be, taking history into account. But we don’t have the history in an event like this.” While Gallup has developed tools to provide some indicators, Kluch notes that there are limitations.

“Ironically — and as horrific as this sounds — once Gallup and financial institutions have a year of COVID behavior data under our belts, we’ll have a much better idea of what can be predicted and move forward,” says Kluch in an interview with The Financial Brand.

Until then, financial marketers and data scientists are piecing together whatever they can to get a handle on consumer behavior, because traditional metrics aren’t working as well as they might have in other circumstances. With the expectation of more furloughs, and hence more economic damage, understanding what’s going on and what will be going on is critical.

Learn more

Chapter News

Richmond Chapter Hosting VACUPAC Golf Tournament Sept. 29

The Richmond Chapter will host its annual Bill Dawson Golf Tournament on Sept. 29 to benefit the Virginia Credit Union Political Action Committee (VACUPAC).

Golfers are needed! Sponsors are needed!

Learn moreopens a pdf (PDF document)

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