By The Way
The By The Way newsletter is a great way to keep Kentucky credit unions informed of the latest updates in governmental affairs, compliance and regulations, education and training. In addition, By the Way highlights the difference credit unions are making on a daily basis.
Credit Union News
Another successful Hike the Hill is now in the books. On September 26 – 27th, 13 credit union representatives joined the League for our annual Hike the Hill in Washington, DC. It was an interesting time to be in DC with the House focused on the funding bills and the Ford/Kavanaugh Senate Judiciary hearings. We began our meetings with a Hill Briefing from CUNA staff.
We were able to meet with 7 out of 8 of our Congressional delegation. Topics of concerns discussed included preservation of our tax exemption, data security, CRA and BSA modernization. The meetings were very productive and we are fortunate to have a Congressional delegation that is highly supportive of our issues and the credit union industry. We concluded the trip by meeting with NCUA’s Chairman Mark McWatters and his Chief of Staff Sarah Vega.
Commonwealth Credit Union Hosts State Representative Phil Pratt
On September 14th, Commonwealth Credit Union hosted State Representative Phil Pratt at their Georgetown branch. Rep. Pratt had the opportunity to meet and speak with not only branch employees but constituents from across his district. It was a great opportunity to educate him on the cooperative nature of credit unions and to talk about some of our issues. A big thank you to Commonwealth for hosting this valuable event.
Senate Majority Leader Addresses Kentucky Chamber
Wendell and I had the opportunity to attend a Kentucky Chamber luncheon at the Marriott Downtown on September 11, 2018. Majority Leader McConnell was the guest speaker. He and Scott Jennings (CNN contributor) did a Q & A session which covered a variety of topics. Overall, Leader McConnell seemed very positive about the economy and where the country, as a whole, is going. He touched on the mid-term elections, Judge Kavanaugh hearing and the accomplishments coming out of both Chambers. He is especially proud of S. 2155, the regulatory relief act. It was solid bipartisan bill that will help several industries move forward and grow.
CUAid Opening to Assist Credit Union People Affected by Hurricane Florence’s Anticipated Damage
The National Credit Union Foundation (the Foundation) has opened CUAid to receive disaster relief funds to assist credit union people affected by Hurricane Florence; a Category 2 hurricane expected to cause catastrophic effects throughout the Carolinas, Virginia, and potentially Georgia.
Donations to CUAid are being used for any credit union employees and volunteers affected by this hurricane. Credit union supporters in every state can always make donations at cuaid.coop.
“Ahead of a dangerous hurricane that is likely to generate unprecedented storm surges along the coasts of North and South Carolina, Virginia, and potentially Georgia before moving inland and causing further disruption, the time to contribute to CUAid is now,” said Gigi Hyland, Executive Director. “We know this storm will continue to disrupt credit union operations across the south and we are prepared to respond.”
100% of the donations through CUAid go to credit union disaster relief. The Foundation does not use disaster relief funds to pay for the CUAid.coop web platform or any of the Foundation costs to administer the national disaster relief program for credit unions.
CUNA Bank Secrecy Act Certification Conference with NASCUS
November 5-8, 2018, Louisville, KY
Keep current with BSA changes
As the Bank Secrecy Act (BSA) related crimes continue to evolve, it's extremely important for you to keep up with these new forms of illicit trafficking and money laundering to stay compliant and protect your members.
When you attend the 2018 CUNA Bank Secrecy Act Certification Conference, presented with NASCUS, you'll learn about this vital Act, the recent changes affecting its implementation and industry best practices to help you stay compliant.
When you attend this program, you'll also have the opportunity to certify or recertify for the Bank Secrecy Act Compliance Specialist (BSACS)designation and be recognized for your newfound expertise.
Who should attend?
This conference is beneficial for compliance professionals with a responsibility for their credit union's BSA/AML program.
CUNA Attends 1st Meeting of Reconstituted CUAC
CUNA staff attended Thursday’s meeting of the Bureau of Consumer Financial Protection’s Credit Union Advisory Council (CUAC). The bureau recently restructured the CUAC and named seven CUNA members to serve on the council for one-year terms.
Thursday’s meeting featured discussions between the council and bureau leadership and staff regarding policy issues related to financial technology. The day’s meeting was part of the bureau’s first joint gathering of the bureau’s three councils, which in addition to CUAC included the Consumer Advisory Board and Community Bank Advisory Council.
The meeting also included a discussion on the bureau’s proposed policy to encourage trial disclosure programs. CUNA wrote to the bureau earlier this month requesting the comment deadline for the proposal be extended.
The CUAC advises the bureau on the credit union industry. CUNA strongly supports the existence of the CUAC, and has supported legislation that would codify it.
‘Platinum’ Theme for 2018 International Credit Union Day
The 70th annual International Credit Union Day (ICU Day) is set for October 18. This year, the day’s main theme will be to “find your platinum lining in credit unions”.
“When you join a credit union, it means you’re never truly alone,” said Michelle Kamke, marketing projects manager of blended learning at CUNA. “It’s more than just a silver lining. It’s the security of other people—real members like you, sticking with you through hard times. We wanted to give credit unions a chance to reflect on the ways in which we’re able to make genuine and meaningful change in peoples’ lives.”
Credit unions and members are encouraged to share their stories on Twitter, Instagram, LinkedIn and Facebook using the hashtag #PlatinumLiningFound. CUNA is also offering special ICU Day giveaways at their Member Celebrations Store. For more information, visit cuna.org/icuday.
Save the Dates: Mortgage Lending Made Easy
This is a ONE-DAY workshop. Register for the most convenient option for your schedule.
Park Community Credit Union
2515 Blankenbaker Parkway
Louisville, KY 40299
Kentucky Credit Union League
5111 Commerce Crossings Drive
Louisville, KY 40229
Meet the Instructor: Michael Christians, Regulatory Compliance Counsel
As principal of Michael Christians Consulting, LLC, Michael assists financial institutions across the country with ensuring their compliance programs conform to Federal laws and regulations. He provides counsel relative to current rules, assists with the strategic implementation of upcoming regulatory changes and offers customized education and training services.
Michael has more than two decades of experience in the financial services industry with a primary focus on consumer compliance. He obtained his Juris Doctorate from Drake University Law School. He was admitted to the Iowa State Bar in 2014 where he is licensed to practice law.
About this training...
This course is a comprehensive overview of the mortgage lending process. We’ll walk through how to originate a mortgage loan compliant with Federal law in just 4 easy steps; application, underwriting, closing and servicing.
Federal laws and regulations discussed include: Regulations B, C, V, X and Z as well as the SAFE Act, E-Sign Act, Homeowner’ Protection Act, Fair Housing Act, Servicemember’s Civil Relief Act and NCUA Part 760.
New loan originators as well as those looking to satisfy their periodic training requirement under Regulation Z would benefit from this offering.
Registration is not open yet. An email will go out when registration is available.
SCHOLARSHIPS ARE AVAILABLE.
Cyberattack is one of the most notable threats for credit unions and the number one concern for credit union regulators. TRGroup, a collaboration of seven credit union Leagues, has joined forces with Virginia-based Radford University’s IMPACT Lab to provide online award-winning IMPACT cybersecurity training to credit union staff responsible for keeping your data safe.
The Award-Winning Cybersecurity Training Is:
A competency-based education workforce development program focused on cybersecurity.
An online program designed for busy professionals, delivered in an asynchronous, self-paced manner and credit union professionals have up to twelve months to earn 18 credit hours.
Helping to prepare students for industry-aligned certification exams and teaches them theory, problem solving, analytical thinking and understanding computational logic.
Aligned with industry workforce standards (e.g., NIST) and employs research-based practices from cognitive science, analytics, simulation-based learning and gamification to ensure it is highly effective and engaging.
Delivered by Radford University, who has been designated a National Center of Academic Excellence in Cyber Defense Education by the National Security Agency and Department of Homeland Security.
Now is the time to expand your knowledge and skills and help further protect your credit union’s assets! Learn more at trgroup.org/impact.
Strategic Thinking and the Road Ahead
Credit unions can’t predict the future, but they can prepare for it by thinking about how to respond to change.
by Jay Johnson, Callahan & Associates
Planning season is approaching, and as credit union teams across the country lay out their agendas, there are a few tough questions I challenge them to add.
As you talk about your credit union and your market, consider this: What don’t you know?
What don’t you know about the market ahead? What will your market look like in five years? How about in 10 years? What will your members need to survive and thrive? How will their needs be different tomorrow from what they are today?
Several progressive credit unions I've spoken to lately already are thinking long-term like this and looking at the road ahead through a couple of fairly distinct perspectives. The first perspective is about the marketplace. The second is about the members.
The retail world continues to change dramatically. Malls are closing, and the physical presence for daily commerce is becoming less important by the day. Retailers, including some iconic names, are going bankrupt. In this age of commoditization — of banks and credit unions and fintechs that look identical to the average consumer — the movement needs to get ready, one institution at a time, to again distinguish itself.
Survivors of this environment are agile. Some are doubling down on a luxe brand experience. One example of this is high-end clothing stores that carry minimal stock but offer tailoring services to ensure the perfect fit for the items that are on hand or can be ordered.
Other retailers are adapting their delivery model to maximize digital. They are leveraging the growing capabilities of artificial intelligence, machine learning, and blockchain technologies while providing only the most necessary services in person.
Car-buying services like Carvana, which offer a 100% online experience, come to mind here. Other examples are car-sharing services and the coming availability of driverless cars, which will surely have an impact on the one-third of the loan portfolio that is tied up in auto loans for the average credit union.
What do these disruptions mean to your marketplace? To your branching model? Every credit union must consider for itself how it delivers services now and how it will meet the needs and expectations of members a decade from now.
Some are already doing this. Rogue Credit Union is building out its physical presence while designing new branches with an eye toward converting them later into self-service and concierge-style delivery models. But only when members and the marketplace are ready. Check out this case study on CreditUnions.com to learn more about that.
That’s the marketplace perspective, now what about the members?
The lives of members change in step with the marketplace that they empower as well as depend upon. The workforce is morphing in such ways that the only certainty is uncertainty. How can the credit union help members adapt to a gig economy or maintain one household budget on several shifting income sources?
There are different ways to think about members’ lives and how the institution can serve them. No credit union is going to land on the perfect answer in a single planning session. The point here is to begin the thought process. The power of strategic planning is that those who do it well know they don’t have a crystal ball but are less likely to get stuck behind the eight ball when the game changes.
That’s because the power of long-term thinking lies in how it stretches an organization’s ability to think about the future. It’s not about committing to a path today. It’s about having the organizational infrastructure and intellectual capacity to recognize that change is coming and be able to adapt when it does.
The time to start thinking about tomorrow’s changes isn’t next year — it’s now. Times are good. Most credit unions are doing well, and the economy continues to produce jobs and profits. But this is all cyclical, and it won’t last.
Now’s the time to step away from the day-to-day and give some thought to what lies ahead, not because you need an accurate forecast but because you need to be ready to respond. Whatever happens, you know members will need a trusted partner that can help them with shelter, food, education — you know, the basics. How will you fill that role?
The poet Robert Frost said, “Two roads diverged in a wood, and I — I took the one less traveled by, and that has made all the difference.”
Today, the credit union path is still the one less traveled. Let’s make sure it can make all the difference to those who choose it.
“This article appeared originally on CreditUnions.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated, in printed form or electronically, without the express written permission of CALLAHAN & ASSOCIATES.”
On September 8th, the city of Brandenburg held Tucker Day and Doe Run Federal Credit Union was proud to be a sponsor.
Tucker Day celebrates the life of 13 year-old, Tucker Wimpee, the son of a Meade County deputy, who was killed in a double murder suicide in Nov. 2013, along with his mother and the live-in-boyfriend who turned the gun on himself.
Tucker Day was held at the Downtown Riverfront in Brandenburg, KY. The celebration included games, food, hayrides, inflatables, and train rides.
Fort Knox Federal Holds Popular Backyard BBQs
Fort Knox Federal brought back their popular Backyard BBQs this month and the credit union and encouraged the community to join the fun, family-oriented events. Last year’s BBQs were attended by over 3,000 total guestsand the credit union grilled approximately 3,500 hot dogs and served over 4,000 pulled pork sandwiches.
The first BBQ event was held September 7th in Bowling Green.
The Backyard BBQs were created to show appreciation for Fort Knox Federal's membership.
In August, Fort Knox Federal Credit Union and the Kentucky Small Business Development Center (SBDC) hosted the third annual Operation Veteran 2 Entrepreneur workshop. The half-day event was held at the Credit Union’s Main Branch office in Radcliff and was developed to help Fort Knox area veterans cultivate their entrepreneurial skills as they leave military service.
Alejandro Ramirez, Owner & Founder of Universal Spartan, LLC, the 2018 Kentucky Veteran Owned Small Business of the Year, attended this year’s event to share some of his insights. After retiring in 2013 as a U.S. Army combat officer with 22 years of military service, he connected with the Elizabethtown SBDC and participated in the SBA “Boots to Business” program. Mr. Ramirez also recently founded the Kentucky Veteran Business Alliance.
“Fort Knox Federal is committed to improving our members’ financial lives and providing for the unique financial needs of military members,” said Fort Knox Federal President and CEO, Ray Springsteen. “We’re proud to support the needs of those transitioning from active duty service through this ongoing partnership with SBDC.”
The free workshop provided mission critical information to help veterans build and grow their small businesses. This year’s event allowed participants to network and learn from successful Veteran small business owners, meet with valuable small business resource partners and gain management best practices for their businesses. This year's featured speakers included Cooperative Business Services (CBS), credit union financial experts, and a virtual presentation from Honor Courage Commitment, Inc.
L&N employees and volunteers participated in the 2018 Kentuckiana Heart Walk on September 22, 2018 to benefit the American Heart Association Louisville. They raised a total of $4,000!
L&N is proud to support the American Heart Association and appreciates all those who helped make this contribution possible.
Together we can make a difference. UKFCU has teamed up with the American Red Cross to help those struggling with the effects of Hurricane Florence. In addition, UKFCU is proud to announce that we will match donations dollar for dollar, up to a maximum donation of $50,000. To donate visit: https://rebrand.ly/HurricaneRelief.
After months of waiting and wondering what exactly the Economic Growth, Regulatory Relief, and Consumer Protection Act (also known as S. 2155) means for HMDA and when it becomes effective, the Bureau of Consumer Financial Protection (BCFP) has finally published a ruleclarifying what these changes mean for credit unions. The final rule, provides for the partial exemptions from reporting certain data points for credit unions that have not reached the loan volume thresholds of 500 open-end lines of credit and 500 closed-end loans. While the Act provided no effective date for this particular provision, the Bureau states in the rule that it believes the best interpretation is that this provision took effect upon the date of the Act’s enactment, or May 24, 2018. Additionally, we now finally have a list of the exact data points covered by the partial exemption. Credit unions that do not meet the loan volume threshold of 500 DO NOT have to report the 26 data points in the first column in the chart contained in the final rule. Credit unions that qualify will only have to report the 22 data points listed in the final rule. Click here to read the Final Rule and see the chart of Partial Exemptions covered by the Act.
Federal Reserve Board Approves Final Amendments to Liability Provisions of Regulation CC
The Federal Reserve Board approved final amendments to the liability provisions of Regulation CC, which governs availability of funds and collection of checks. These amendments continue the Board's efforts to update Regulation CC to reflect the evolution of the nation's check collection system from one that is largely paper-based to one that is virtually all electronic.
In today's check collection environment, original paper checks may be unavailable for inspection in certain disputes between banks. When the original check is not available, the final amendments update Regulation CC to include a presumption that a substitute or electronic check was altered in certain cases of doubt. The presumption applies only to disputes between banks and only when one bank has transferred an electronic or substitute check to the other bank. As with existing rules under Regulation CC, the parties may, by mutual agreement, vary the effect of the amendments' provisions.
In addition, the final amendments clarify that the presumption does not apply if it is contrary to another federal statute or regulation, such as the U.S. Department of the Treasury's rules regarding U.S. Treasury checks.
The amendments become effective January 1, 2019.
Source: Federal Reserve
BCFP Updates FCRA Model Disclosures
Effective September 21, 2018, new section 605A(i) of the Fair Credit Reporting Act (FCRA), added by the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), requires that a new notice of rights be included whenever a consumer is required to receive a summary of rights required by FCRA section 609. The Bureau has issued an interim final rule to amend the model forms in Appendices I and K to Regulation V to incorporate the new required notice. The interim final rule also amends the model form in Appendix I to reflect a statutory change to the minimum duration of initial fraud alerts and makes adjustments to update contact information for certain FCRA enforcement agencies in the model form in Appendix K.
To mitigate the impact of these changes on users of the existing model forms, the interim final rule also provides that the Bureau will regard the use of the model forms published in Appendices I and K on November 14, 2012, to constitute compliance with the FCRA provisions requiring such forms, so long as a separate page that contains the additional required information is provided in the same transmittal. The interim final rule solicits comment on the amendments to Appendices I and K to inform possible further revisions to the model forms that the Bureau may consider in the future.
NACHA Approves Expanding Same Day ACH
NACHA announced that its membership has approved three new rules to expand the capabilities of Same Day ACH for all financial institutions and their customers. The first expands access to Same Day ACH by allowing Same Day ACH transactions to be submitted to the ACH Network for an additional two hours every business day (until 4:45 p.m. ET), starting September 18, 2020. The second increases the Same Day ACH per-transaction dollar limit to $100,000, effective March 20, 2020. The third increases the speed of funds availability for certain Same Day ACH and next-day ACH credits, effective September 20, 2019.
Senators Write DOJ Sharing CUNA Concerns Over ADA, Websites
Six Senators wrote to Attorney General Jeff Sessions with concerns shared by CUNA over how the Americans with Disabilities Act (ADA) applies to websites. Credit unions around the country are facing legal threats due to uncertainty over how to make websites compliant with the ADA, and CUNA has made finding a solution a top priority.
“Right now it is not clear the ADA applies to websites. This leaves businesses and property owners unsure what standards, if any, govern their online services,” the letter reads. “To date, the Department [of Justice] has not issued guidance or regulations to provide clarity, and conflicting court opinions have created even more confusion.”
The Senators respectfully urge the Department of Justice to “promptly take all necessary and appropriate actions within its authority” to resolve the current uncertainty. They also request a DOJ briefing on the matter no later than Sept. 28.
The letter was signed by Sens. Charles Grassley (R-Iowa), Michael Rounds (R-S.D.), Thom Tillis (R-N.C.), Mike Crapo (R-Idaho), John Cornyn (R-Texas) and Joni Ernst (R-Iowa). Their letter follow similar letters sent to Sessions by 103 members of Congress in June and from 19 state attorneys general in July.
CUNA and leagues around the country have written to and met with policymakers at the state and federal level to urge the DOJ to clarify if and how the ADA applies to website accessibility.
CUNA has teamed up with leagues in several states to file briefs in support of credit unions hit with lawsuits (most recently at the appellate level), worked to get language addressing the issue added to a House appropriations bill and met with Department of Justice officials.
CUNA also has compliance resources available for credit unions.
CU Tax Status Untouched in ‘Tax Reform 2.0’ from House W+M
The credit union tax status remains untouched in the House Ways and Means Committee release of “Tax Reform 2.0,” legislation intended to make several changes to the Tax Cuts and Jobs Act of 2017.
“This latest tax reform legislation once again leaves the credit union tax status untouched, proving that the benefits not-for-profit financial cooperatives bring to the marketplace is recognized by policymakers on both sides of the aisle,” said CUNA President/CEO Jim Nussle. “CUNA will carefully analyze the bill for any impact on credit union products and services.”
Tax Reform 2.0 is technically three separate bills:
- The Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760), which makes permanent many of the small business and personal income tax provisions in last year’s Tax Cuts and Jobs Act of 2017;
- The Family Savings Act of 2018 (H.R. 6757), which makes changes to certain retirement account provisions in the tax code;
- The American Innovation Act of 2018 (H.R. 6756), which modifies the tax code to encourage startup businesses.