CURRENT Newsletter | 6 October 2020 - Virginia Credit Union League

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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Virginia Credit Union League Signs on to CU Diversity, Equity, Inclusion Collective Pledge

The Virginia Credit Union League Board of Directors has voted unanimously to sign the Credit Union Diversity, Equity and Inclusion (DEI) Collective pledge, committing the League to meaningful and immediate action toward change by standing against racism and working to further social justice and financial democracy.

The CU DEI Collective believes diversity, equity and inclusion are fundamental to a vibrant, relevant and growing credit union movement.

“We need to be part of the solution in building a more equitable financial system,” noted League President Rick Pillow. “Credit unions were founded as a social movement dedicated to helping people achieve financial stability and improve their lives. Credit unions have remained committed to that mission and our hope is that this will continue to be important to credit unions across the Commonwealth.”

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Learn More About Your League's Services at Free Oct. 14 Webinar

Have new staffers joined your team or do you have someone on your staff or Board who needs to learn more about the League and our products and services?

Please have them join us Oct. 14 for our popular CU Employee and Volunteer Orientation, scheduled as a FREE webinar (10 a.m. until noon).

Get an overview of CU history, philosophy and the “Credit Union Difference.”
Learn what resources and services the League and the Credit Union National Association offer credit unions.
Get an overview of the credit union system - both national and local.
Gain a better understanding of credit union key ratios and acronyms.
Get an introduction to our credit union system partners.
Hear how you can get involved in helping to make the credit union system stronger!

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 in October. 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.”

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

Human Resource Peer-to-Peer Discussion Set for Oct. 21

HR professionals: Join us Oct. 21 (10 a.m.-11:30 a.m.) for a peer-to-peer discussion of the key challenges you face day-to-day, including labor law compliance, training, workplace safety in the age of COVID-19, hiring, employee relations and much more!

This is an excellent opportunity to share, collaborate and network with your peers.

Learn more and register for this free program.

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

USAA Sues PNC Over Mobile Check Deposit Technology

USAA has filed a lawsuit against PNC Financial Services Group tied to its use of mobile deposit capture technology.

In so doing, San Antonio-based USAA is expanding its legal attack on rival financial institutions that use technology that lets customers deposit checks through their phones. It says it owns the primary patents on such technology. USAA and PNC, in Pittsburgh, each declined a request for an interview.

USAA sued Wells Fargo twice in 2018 over the same issue. It won both cases, which were decided in November and January. Both trials were conducted in Marshall, Texas, a town well known for its patent-friendly court. Wells has been ordered to pay USAA $302.8 million in restitution.

In a press release this week, USAA said it “continues to seek opportunities to create reasonable and mutually beneficial licensing agreements with banks and credit unions for the legal use of USAA’s [remote deposit capture] patents.” (American Banker, Oct. 2)

View CUNA Mutual Group Risk Alert on this topic

Free Compliance Update Webinar Oct. 28

Join attorney Jay Spruill, who coordinates the League Compliance Hotline through the Woods Roger law firm, for a free webinar Oct. 28 on compliance updates and hot topics. Jay will cover recent regulatory changes and issues that should be on your radar in 2020 and beyond.

Membership Growth, Profitability Anxieties Top-of-Mind for CUs

Credit unions are worried about member acquisition and profitability — and for good reason.

As the coronavirus pandemic became widespread earlier this year, officials shuttered non-essential businesses, sending the economy into a tailspin and the unemployment rate skyrocketing. Even as some Americans get back to work, credit unions are still uncertain about maintaining their bottom line.

That makes sense since many institutions closed branch lobbies, potentially limiting new account openings, and loan demand has been tepid, which can cut into earnings.

“It’s a challenging environment and credit unions are challenged right now,” said Jeffrey Paille, a partner at consulting firm Bonadio Group. “Consumers are looking for safety and comfort, and that manifests itself in consistency. Changing financial institutions is not something people are eager to do right now.”

In a survey from Arizent, the parent company of Credit Union Journal, American Banker and others, 68% of respondents said there were “significant/considerable” or “moderate” challenges in customer acquisition because of the pandemic.

As for maintaining customer profitability, 60% of respondents said there were challenges related to COVID-19, according to the study. However, these numbers increased for respondents from the banking sector, including credit unions. Almost three-quarters of banking respondents said they faced problems with customer acquisition while 77% said maintaining customer profitability was challenging, according to the survey. (American Banker, Oct. 5)

News From Credit Unions

Langley FCU Foundation's Charity Golf Classic Raises $378,000

Langley for Families hosted its 6th Annual Charity Golf Classic at Golden Horseshoe Golf Club in Williamsburg on Tuesday, Sept. 29, 2020.

The event raised $378,000 in gross proceeds, the highest in its history! Net proceeds from the event will be granted to Hampton Roads non-profits making a difference for families and children in the areas of healthcare, housing & human services, education, and safety & security.

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Financial Services / Economic News

Deposit Glut Could Dog FIs Well into Next Year

The flood of deposits that poured into financial institutions during the first half of 2020 was expected to be temporary.

But general unease about an economy that’s been clobbered by the coronavirus pandemic — and fear that there is more pain to come — continue to drive down consumer spending and commercial loan demand, leaving FIs awash in record-level deposits with few ways to put the cash to work. While interest rates at near zero are making that cash relatively cheap, net interest margins have narrowed and profitability is a concern.

Liquidity could stay high if lawmakers negotiate a second round of aid for consumers and businesses — perhaps over $1 trillion on top of the $2.2 trillion already injected in the spring — and recipients of Paycheck Protection Program loans keep their money in the FI because of uncertainty about the economy or loan forgiveness terms. (American Banker, Oct. 5)

Why that Spike in COVID-19 Bank Branch Closings Didn’t Happen (Yet)

Given the economic downturn resulting from the country’s COVID-19 response and many consumers’ shift over to digital channels, it was widely expected that branch tallies coming out after the pandemic started would so show a significant decline in the number of retail bank branches — you know, the old-school brick and mortar locations you see across the country.

Boy, were we pundits wrong.

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This Startup is Taking on Big Banks, and Winning

The economic forces set off by the pandemic are crushing traditional banks. Yet Chime, a startup taking aim at big banks, is booming. And it doesn't have a single bank branch.

Chime, which provides banking services via a smartphone app, has more than tripled its transaction volume and revenue in 2020. The company says it is signing up hundreds of thousands of new customers each month, and some of them are ditching big banks for Chime.

And while big banks such as Wells Fargo and Bank of America have lost tens of billions of dollars in market value during the pandemic, Chime's price tag is going parabolic.

In just 18 months, Chime's private market valuation has spiked by a staggering 1,015% to $14.5 billion, according to PitchBook. That makes Chime more valuable than publicly traded companies including United Airlines, Tiffany or Whirlpool. Chime has even overtaken Robinhood, the red-hot trading app, to become the most valuable VC-backed consumer fintech startup in the United States, according to PitchBook.

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Training & Education

Registration Open for NCUA's Oct. 21 Webinar on MDIs, Inclusion

NCUA will host a webinar on financial inclusion and minority depository institutions (MDIs) on Oct. 21, starting at 2 p.m. (ET). Registration is now open for this webinar, “Pathways to Consumer Financial Well-Being: The Importance of Financial Inclusion and Minority Depository Institutions.”

This webinar is open to consumers, credit unions and parties interested in working with credit unions to expand access to safe and affordable financial services in underserved communities.

Learn more

Pandemic Response

Fed's Powell Warns Against Doing 'Too Little' to Help U.S. Recovery

Federal Reserve Chairman Jerome Powell cautioned against doing "too little" to help the U.S. economy bounce back, signaling that further fiscal help is necessary as Congress remains stuck on its next steps.

In perhaps his strongest language yet on the issue, Powell said in an Oct. 6 speech the risks of "overdoing it" on economic stimulus seem to be smaller than falling short on assistance. The recovery is "still far from complete" and policymakers must guard against a "long period of unnecessarily slow progress" on the recovery, Powell told the National Association for Business Economics.

"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," Powell said. "Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."

Powell's comments came amid a lengthy stalemate on Capitol Hill over fiscal stimulus, which the Fed chief noted was critical earlier during the COVID-19 pandemic. The CARES Act that lawmakers approved in March boosted unemployment benefits for the historic number of workers who were laid off, introduced the Paycheck Protection Program for small businesses and gave many Americans a $1,200 stimulus check. (S&P Global Market Intelligence, Oct. 6)

IRS Extends Economic Impact Payment Deadline to Nov. 21 to Help Non-Filers

The Internal Revenue Service announced this week that the deadline to register for an Economic Impact Payment (EIP) is now November 21, 2020. This new date will provide an additional five weeks beyond the original deadline.

The IRS urges people who don't typically file a tax return – and haven't received an Economic Impact Payment – to register as quickly as possible using the Non-Filers: Enter Info Here tool on IRS.gov. The tool will not be available after November 21.

Learn more

New Survey Shows More Than 40% of Small Businesses May Close by 4Q

A new survey found more than 40% of small companies might be forced to close for good at the end of the fourth quarter, according to the Alignable Pulse Poll of more than 6,300 small business owners.

The survey, conducted from Sept. 18-21, asked how much revenue small business owners expect to earn in Q4 and how much they need to stay in business. Combining those answers, 42% of small businesses said they might be forced to close for good before 2021.

What’s more, 45% of retailers and 38% of B2B firms could shut down by the end of the fourth quarter, according to the Boston-based Alignable, an online network of more than five million small business owners across 30,000 communities in North America.

When the COVID-19 crisis hit the U.S. in March, Alignable began tracking the state of the small business economy every week. Over the last six months, 60% of small firms are still reporting negative financial impact with nearly half of that group saying it is significant.

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Risk Management

COVID-19-Related Workplace Lawsuits Have Begun

Hundreds of labor and employment cases pertaining to the pandemic have been filed nationwide, reports CNN's Robert Kuznia, who cited two legal trackers.

And this is likely just the tip of the iceberg.

"You are going to see that number grow exponentially over the next six months to one year," Joseph Seiner, a law professor at the University of South Carolina, told Kuznia. "I think you are on the front end of a tidal wave."

Some experts say concerns about being sued could stop some businesses from moving forward with re-opening plans.

There's debate over whether employers should have liability protections from any coronavirus-related lawsuits brought by workers. The most recent stimulus bill from Republicans, for example, includes some hotly debated protections for employers.

Read more about what this all means for workers and employers.

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