CURRENT Newsletter | 9 March 2021 - Virginia Credit Union League

It’s been an especially tough year on our teachers, educators and school staffs. 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!

IGNITE 2021: Book Your Hotel!

We’re excited to announce the return of IGNITE, the League Annual Meeting! Now slated for Nov. 10-12, 2021 in Virginia Beach, we’ve secured the new Marriott Virginia Beach Oceanfront as our host hotel.

Registration information for the event will be distributed in the coming weeks, so stay tuned!

Want to book your hotel stay now? You can do so here!

League Hosting Compliance Webinar March 17

Join us March 17 for a free compliance/regulatory update with attorney Jay Spruill. The hour-long webinar (10 a.m. start time) will cover frequently asked questions on the League compliance hotline, key federal regulatory issues, and any recently enacted state laws that might affect your operations.

Also, feel free to send your questions prior to the webinar to your League’s Mary Amyx at mamyx@vacul.org. She’ll gladly forward them to Jay to ensure they are covered during the webinar.

Learn more and register here.

Diversity, Equity and Inclusion Webinar March 18

Join Us March 18 for Webinar with NCUA Diversity Communications Specialist Marty Raines

Diversity, Equity, and Inclusion, or DEI, have been popping up in conversations, in the media, and on meeting agendas with increasing frequency lately. But beyond buzz words and catchphrases, what do they really mean?

In this March 18 webinar presentation (10 a.m.-11 a.m.), NCUA's Diversity Communications Specialist Marty Raines will define diversity, equity, and inclusion, and more importantly, share what they mean for our credit unions. Join us to learn how DEI contributes to talent, growth, and innovation, and to find out what the NCUA is doing to help you enhance your DEI efforts.

YPN Hosting March 18 Lunch & Learn

The Young Professionals Network is hosting a virtual Lunch & Learn Meeting March 18 (1 p.m.-2 p.m.). Mark Odom and Bianca Sutterluety (ABNB Federal Credit Union) will be our hosts and facilitate a discussion on “Tips for Growing Your Credit Union Career.”

Virginia Sister Society Hosting March 23 Virtual Event

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.

Guidance for CUs: Planning for COVID Vaccinations

In some areas, employees already have access to vaccines to help protect them against COVID-19. Credit unions may choose to encourage employees to seek the COVID-19 vaccination in their community; however, you may want to stop short of requiring or mandating the COVID-19 vaccination as it is a matter of state or other applicable law. Credit unions should prepare, encourage the vaccination, and consider how the workplace may be impacted.

As vaccines for COVID-19 become more accessible to the U.S. public, credit unions should carefully consider whether to implement vaccination policies. Generally, employers should consider simply encouraging employees to get the vaccine rather than requiring them to take i t. If you choose to implement a mandatory vaccination policy, you must ensure that the policy is consistently applied the policy to all similarly-situated employees in order to minimize the risk of discrimination.

Read the CUNA Mutual alert

Compliance Alert: U.S. Supreme Court Rules that Mere Retention of Property Does Not Violate Automatic Stay

The United States Supreme Court recently held that a creditor did not violate the automatic stay by refusing the turnover of property of debtors who filed for bankruptcy. The case, City of Chicago v. Fulton, 592 U.S. ___ (2021), is generally seen as favorable to creditors holding property of debtors who seek bankruptcy protection.

Learn more (Requires password for the League website. Register here if you need one.)

State Data Privacy Laws Pose Compliance Headaches for FIs

States are stepping up their efforts to protect the privacy of consumer data, and the trend is adding to financial institutions' compliance challenges as stewards of vast amounts of personal information.

Virginia passed a data privacy law on March 2, while California strengthened its existing data privacy law on Nov. 3. These new rules only partially affect financial instituions, raising plenty of questions and concerns for FI employees responsible for handling consumer data. Vendors and partners may be subject to the new laws, too. And these new laws are just the beginning: Other states, including Washington, are writing their own data privacy legislation and a national data privacy law may be coming.

“The reality for the financial services industry is that this is going to be somewhat of a national exercise one way or the other within the next few years,” said Ron Whitworth, chief privacy officer at Truist Financial in Charlotte, N.C.

The Virginia law exempts financial institutions that are subject to the privacy-protection provisions of the federal Gramm-Leach-Bliley Act of 1999. But FIs could still be on the hook.

“If you're a bank, the Virginia law may not apply to you directly, but absolutely could apply to some of the vendors and third parties that you do business with,” Whitworth said. “There's also a debate within the industry about how far the exemption will carry. There is a GLBA entity exemption, but it remains to be seen how far that exemption will carry. Does it cover all activities or just banking activities? These are some of the questions that a lot of the industry benchmarking forums are already working on as they wrestle with the Virginia and California laws.”

The California law exempts data that banks already protect under Gramm-Leach-Bliley. But banks must comply with the California rules for any data that is not covered by the federal law.

Gramm-Leach-Bliley covers all personal data on people who use a bank’s products and services, including their browser history. It does not cover data gathered from people who are not customers. So if someone goes to a bank’s website and applies for a financial education newsletter, the information that consumer enters into that form is not covered by Gramm-Leach-Bliley and could be subject to the California law. Marketing data on prospects who are not yet customers may be subject to California's rules. Once an individual starts applying for a bank product, such as a mortgage or brokerage account, the information becomes subject Gramm-Leach-Bliley. (American Banker, March 8)

Key Dates Approaching on Streamlined CDFI Application

Federally insured, low-income credit unions seeking Community Development Financial Institution certification can apply to use the National Credit Union Administration’s streamlined qualification process, but key deadlines are fast approaching.

CUNA Mutual Group and Inclusiv have partnered to offer credit unions additional resources in seeking the CDFI certification, including a “key dates checklist.”

CDFI certification makes credit unions eligible for CDFI Fund training and competitive award programs that enhance their capacity to provide underserved communities with access to insured, affordable financial services. The Consolidated Appropriations Act, 2021 authorizes additional COVID-19 relief funding for community development financial institutions that predominantly serve minority communities.

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Compliance / Regulatory Affairs

Comments Sought on Simplification of Risk Based Capital Requirements

The National Credit Union Administration (NCUA) Board (Board) is issuing this advance notice of proposed rulemaking (ANPR) to solicit comments on two approaches to simplify its risk-based capital requirements. Comment period ends May 10.

The Board's risk-based capital requirements are set forth in a final rule dated October 29, 2015, which is currently scheduled to become effective on January 1, 2022. The delayed effective date has provided the Board with additional time to evaluate the capital standards for federally insured credit unions (FICUs) that are classified as “complex” (those with total assets greater than $500 million).

The first approach would replace the risk-based capital rule with a Risk-based Leverage Ratio (RBLR) requirement, which uses relevant risk attribute thresholds to determine which complex credit unions would be required to hold additional capital (buffers).

The second approach would retain the 2015 risk-based capital rule but enable eligible complex FICUs to opt-in to a “complex credit union leverage ratio” (CCULR) framework to meet all regulatory capital requirements. The CCULR approach would be modeled on the “Community Bank Leverage Ratio” framework, which is available to certain banks.

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Pandemic Response

House Set to Take Up $1.9 Trillion Stimulus, Putting Biden on Track to Sign this Week

House lawmakers are set to vote as soon as Tuesday on a roughly $1.9 trillion coronavirus relief package, putting President Biden on track to sign his first major legislative accomplishment into law by the end of the week.

Democrats in the chamber are expected to approve the bill — which includes a dramatic expansion of pandemic aid and federal safety net programs — despite changes to critical elements of the stimulus adopted by the Senate over the weekend.

Dubbed the American Rescue Plan, the package authorizes $1,400 checks to millions of low- and middle-income Americans, bolsters families by providing new child tax benefits, boosts unemployment payments for workers still out of a job and authorizes a wide array of additional programs in an attempt to shepherd a swift, equal recovery to one of the worst economic crises in a generation.

Senate passes Biden’s $1.9 trillion coronavirus relief bill after voting overnight on amendments, sends measure back to House

Not a single Republican voted for the bill, including an earlier version that cleared the House in February, nor the one passed by the Senate on Saturday. To woo centrist Democratic lawmakers, the party’s Senate leaders proffered a series of late changes that removed from the House-passed version an increase to the federal minimum wage, while lessoning the amount of enhanced weekly benefits for workers still collecting unemployment.

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Financial Services / Economy

Warning Issued by CFPB of Pending Widespread Evictions, Foreclosures

The Consumer Financial Protection Bureau has issued a report warning of widespread evictions and foreclosures once federal, state, and local pandemic protections come to an end, absent additional public and private action.

According to the Bureau’s “Housing Insecurity and the COVID-19 Pandemic” report, more than 11-million families are behind on their rent or mortgage payments, with 2.1-million families behind at least three months on mortgage payments, and 8.8- million are behind on rent. Homeowners alone are estimated to owe almost $90 billion in missed payments, according to the CFPB, which said the last time this many families were behind on their mortgages was during the Great Recession.

“We have very little time to prevent millions of families from losing their homes to eviction and foreclosure,” warned CFPB Acting Director Dave Uejio in a statement. “At the CFPB, we are working hard to help homeowners and renters as the U.S. begins to turn a painful crisis, caused by the pandemic, into a robust recovery. We know small landlords are struggling, too, with many dipping into savings or using credit cards to make it through the pandemic. We want everyone—homeowners and renters, landlords, and mortgage servicers—to have the tools they need now to avoid unnecessary evictions and foreclosures.”

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Research Predicts All U.S. Bank Branches Could Be Shuttered by 2034

Is the decades-long debate over the future of branching finally coming to a dramatic conclusion? An analysis of years of state and national branch data reveals that physical bank branches could disappear if trends continue on their current trajectory. Consumer data from a concurrent study offers some support, but also a reality check on digital-only banking.

Many factors are different now and a new and detailed analysis of branch closing data by Statista, commissioned by Self Financial, suggests a significant change. According to the report based on the analysis, the number of bank branches in the U.S. fell by 6.5% from 2012 to 2018. That’s an average of 902 a year. For every 15 branches open in 2012, one is now closed.

More importantly, the rate of branch closures has been doubling every three years. Between 2012 and 2015, the closure rate was 0.81% per year. From 2015 to 2018 the rate reached 1.6% per year. Based on that and other factors, Self predicts that by 2027 there could be fewer than 40,000 branches across the U.S. and by 2030 fewer than 16,000 remaining. That would put the number of branches at that point at 1965’s level. From there it’s just a short statistical step to zero.

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News From Credit Unions

ValleyStar Credit Union Looks to the Future with New Interim CEO

ValleyStar Credit Union is pleased to announce Lisa Lambrecht as its interim chief executive officer (CEO) to lead the credit union as it rises to meet the expectations of digital transformation and innovation. As the former CEO of Entrust Financial Credit Union in Richmond and more recently as the executive vice president of ValleyStar, Lisa brings 20 years of experience serving credit unions.

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Chartway Federal Credit Union Announces Two Executive Promotions

Chartway Federal Credit Union is proud to announce that as the credit union continues to grow in a dynamic world, two of its leaders – Rob Keatts and Elizabeth Short – have been promoted.

Keatts – a highly experienced business and technology executive with a strong track record of providing strategic technology solutions across industries – has had a tremendous impact on Chartway since joining Chartway in 2016 as its chief information officer.

Short is a senior-level marketing professional who joined Chartway in 2019 with more than 20 years of experience driving business results in areas including brand development, traditional and digital advertising, PR, and crisis communications. Since then, Short has helped advance Chartway’s membership growth, brand visibility, and collaborative business partnerships.

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News About Credit Unions

Member Deposits Were Above Average in January, Right? Not Exactly. Plus, Other Numbers

Deposits continued to flow into credit unions in January at an unusually high rate, right? Wrong, according to CUNA’s latest Monthly Credit Union Estimates.

In January of 2021, even in the wake of a second stimulus payout, deposit inflows were actually below those of one year earlier and the traditional pace of January, according to Mike Schenk, VP of research and policy analysis and CUNA’s chief economist.

“The data we have for January is interesting because it doesn’t really reflect a huge increase in savings balances during the month,” said Schenk, pointing to the .9% increase in savings balances. “From a historical context that’s not really substantial. In January of 2020, for example, prior to any stimulus checks, January savings growth was 1.2%.

“I think it’s good news in the grand scheme of things,” Schenk continued. “It might be an indication credit union members took some of that stimulus money and did what we want them to do: spend it. I will be interested to see what happens in February and with the additional pandemic relief in the pipeline.”

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