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.

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SRCUS

Education Opportunities

Featured Article

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Your League, along with CUNA, the American Association of Credit Union Leagues, CUNA Mutual and other leagues and credit unions, raised credit union awareness last week at the National Conference of State Legislators (NCSL) Legislative Summit in Boston.

"Engagement at the summit is a priority for CUNA and the leagues because legislators adopt policies in NCSL’s standing committees," said CUNA Chief Advocacy Officer Ryan Donovan, who gave a presentation at the summit. "In addition, many state legislators often go on to serve at the federal level, and familiarity with credit union issues helps achieve credit union goals."

Nearly half of the 115th Congress were former state legislators.

CUNA Chief Advocacy Officer Ryan Donovan also participated on a panel discussion about the future of the Dodd-Frank Act, and the credit union push for regulatory relief.  Donovan highlighted many goals of CUNA's bipartisan, pro-consumer Campaign for Common-Sense Regulation, particularly changes to the Consumer Financial Protection Bureau.

Awareness activities included the America’s Credit Unions logo featured on the conference wi-fi splash page, hotel key cards and conference lanyards.  America’s Credit Unions were also represented with a booth in the summit’s exhibit hall. 

Below are highlights of Kentucky's Legislators who visited with Debbie Painter, EVP, at the booth.

NCSL Debbie

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It’s Time for the Kentucky Recognition Award Nominations!

Each year, your League hosts an Awards Banquet to recognize the achievements of individuals, credit unions, and chapters who have made an impact in the credit union movement.   We are now accepting nominations for the following categories: 

Steve Brody Outstanding Volunteer Award

The purpose of the Steve Brody Outstanding Volunteer Award is to recognize the outstanding accomplishments, time and effort in support and promotion of the credit union idea put forth by volunteers in the Commonwealth of Kentucky.  Deadline is September 15th.

Frank Moore Outstanding Professional Award

The purpose of the Frank Moore Outstanding Professional Award is to recognize the outstanding accomplishments, time and effort in support and promotion of the credit union idea put forth by the credit union professionals in the Commonwealth of Kentucky.  Deadline is September 15th.

Richard Zimmerman Outstanding Young Credit Union Leader Memorial Award

The Richard Zimmerman Outstanding Young Credit Union Leader Memorial Award is presented to recognize the accomplishments of young people who have made significant contributions to the support and promotion of the credit union idea.  Deadline is September 15th.

Wayne R. Woodward Philosophy in Action Award

The Wayne R. Woodward Philosophy in Action Award was established to recognize an individual, group of individuals, or organization that by act or deed, above and beyond the norm, personifies the credit union philosophy of "People Helping People."  Deadline is September 15th.

We are also accepting submissions for Most Effective Chapter and Chapter in Attendance awards.

For further information on these categories, and to submit a nomination, please click HERE.

If you have any questions you can contact Vicki Hall at the League office at 502-855-8202 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

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CO-OP SHARED BRANCH SM

CO-OP Shared Branch Network Passes Chase, Takes No. 2 Spot among Consumer Financial Institutions

More Than 1,800 Different Credit Unions Unite to Form Seamless and Secure Cooperative for In-branch Personal Banking

The CO-OP Shared Branch network has passed Chase in number of branch offices, making the credit union cooperative the second largest network of financial institution branches in the country.

CO-OP Shared Branch now totals 5,671 physical locations. No. 3 Chase has 5,567 branches as of July 18, according to FDIC figures. The credit union network added more than 400 branches during the past two years, when CO-OP Shared Branch surpassed Bank of America. The network is less than 500 locations away from No. 1 Wells Fargo, which has 6,150 branches.

“Shared branching is to credit union members what Uber is to passengers looking for a nearby ride,” said Todd Clark, President/CEO, CO-OP Financial Services. “It’s the best example there is of why credit unions are different than banks – they share! Around 1,800 of the 6,100 U.S. credit unions share their branches. In addition, more than 3,000 are part of our CO-OP ATM network. When you couple-in digital services, credit unions offer a financial ecosystem that is convenient, accessible and a positive force in communities.”

The shared branch network enables members to enter the branch of any participating credit union and conduct their business as if they were in their own home branch. In addition to member convenience when traveling, shared branching offers credit unions revenue streams and operational efficiencies, and a key means of retaining members who move. The resulting profitability translates to ongoing investments in member benefits by virtue of the not-for-profit structure of credit unions.

CO-OP Shared Branch is one of three networks that CO-OP offers credit unions to comprehensively provide account access to members. CO-OP ATM offers nearly 30,000 surcharge-free machines nationwide to members, a network larger than any bank. In addition, CO-OP is a credit union industry partner for Zelle, a financial institution-led digital payments network allowing members to send money to anyone with a U.S. bank or credit union account.

To find a CO-OP Shared Branch or a CO-OP ATM visit https://co-opcreditunions.org/locator; or, download the brand new CO-OP ATM and CO-OP Shared Branch mobile Locator app at Google Play and iTunes stores.

More information on CO-OP Shared Branch is available here.

About CO-OP Financial Services
CO-OP Financial Services is a payments and financial technology company whose mission is ensuring the success of the credit union movement by serving 3,500 credit unions and 60 million members. CO-OP payments solutions, engagement services and strategic counsel help credit unions optimize member experiences to consistently provide seamless, personalized multi-channel offerings, while delivering secure, sophisticated fraud mitigation service. For more information, visit www.co-opfs.org.

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Credit Unions Celebrate Miracle Jeans Day Sept. 13MIRACLE JEANS DAY

Credit union employees are invited to donate $5 and wear jeans Sept. 13 as part of the annual Miracle Jeans Day to support Children’s Miracle Network Hospitals.

The annual Credit Unions for Kids Miracle Jeans Day event encourages credit union employees to donate $5 for the opportunity to wear jeans to work that day.

Credit unions can order free paper icons and stickers so their members can participate as well. Proceeds are donated the credit union’s local Children’s Miracle Network Hospital. To register, visit cu4kids.org/mjd.

Last year, more than 300 credit unions “went casual for kids,” raising thousands of dollars for their local CMN Hospitals. More than 100 credit unions from 40 states have already pledged their support for the 2017 Miracle Jeans Day event.

Credit unions traditionally raise the most of any Children’s Miracle Network Hospitals corporate partner, and, like all CMN Hospitals donations, funds raised locally will stay in the community. The funds support each hospital’s greatest needs, which include life-saving research, treatments, equipment and charitable care. The funds raised help to light the way in helping sick children and their parents navigate through stormy days.

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Experience Learning Live

Take Charge at the Event for Credit Union Trainers

CUNA Experience Learning Live! is your chance to discover best practices, breakthrough ideas and perceptive insights into modern credit union training. Over three days of sessions hosted by top minds in the training field, you’ll learn how to create a better learning environment at your credit union that enables your staff to realize their true potential.

Register

Who should attend?

This conference is beneficial for credit union professionals looking to start, build and grow training and development at their credit union.

CPE Credits: You can earn group-live credits for this program. No advance preparation or prerequisites are required. For more information regarding administrative policies, such as complaint and refund, please contact CUNA at 800-356-9655, ext. 4249. To view all programs that offer CPE credits, click here.

Credit Union National Association (CUNA) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.

For more program content information, call 800-356-9655, ext. 4249, or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. . For registration questions, call 800-356-9655, ext. 4400, or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. .

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SRCUS

New Whitepaper Explores Content Marketing for Credit Unions

A whitepaper discussing how credit unions can effectively use content marketing to attract and retain members has been published by the Southeast Regional Credit Union Schools (SRCUS). The paper was authored by a team of third-year students in the SE CUNA Management School program comprised of Ashley Bean (Class Act FCU – Louisville, KY), Candace Fyffe Stanley (Ashland CU – Ashland, KY), Hailie Patterson (Michigan One Community CU – Ionia, MI), and Theresa Wolff (Greater New Orleans FCU – New Orleans, LA). Completion of the written project and an oral presentation of the research report is a prerequisite for graduation from the program. This team of students received recognition at the 2017 SE CUNA Management School graduation ceremonies last month for their exceptional work on both the written paper and their oral presentation.

Businesses send consumers thousands of pieces of marketing every day, most of which is not relevant or valuable to the consumer at that point in time. What makes content marketing so intriguing, especially for credit unions, is that allows your audience to control what type of content they consume and when, which drives customer/member interaction. In the report, “The Not So Secret Ingredient to Marketing Success”, the authors explain that good content marketing makes a consumer stop, read, think and then behave differently. The key to creating that initial interaction is the offering of relevant and valuable content with the intention of changing or enhancing member behavior. Basically, it’s the art of communicating with the member without selling; instead of pitching your products or services, it’s delivering information that makes the member more intelligent.

In addition to providing a thorough overview of content marketing and how to create content marketing opportunities, the paper discusses the challenges and opportunities created by content marketing, as well as recommendations and solutions for credit unions to consider. The authors posit that, if planned and executed properly, content marketing can help credit unions earn more money and grow membership, define their brand, foster trust, and inspire referrals. But they caution that credit unions considering utilizing content marketing to understand that there is not a “one size fits all” approach to content marketing. Just as strategic plans are different for every credit union, so too, are content marketing strategies. Credit Unions must understand organizational goals and invest some time developing a plan customized to their unique organizational focus to ensure success.

To access a complimentary copy of the white paper, please visit www.srcus.org/management-school/student-white-papers/.

About SRCUS: Southeast Regional Credit Union Schools (SRCUS) is a collaboration of eight southeastern credit union leagues, including the Carolinas Credit Union League, Georgia Credit Union Affiliates, Kentucky Credit Union League, League of Southeastern Credit Unions & Affiliates, Louisiana Credit Union League, Mississippi Credit Union Association, Tennessee Credit Union League, and Virginia Credit Union League. Through collaboration with CUNA and Affiliates, the first SRCUS Management School was established in 1970. Since the school’s formation it has graduated over 1,100 credit union management professionals from 21 states and the District of Columbia. In addition to the management school, SRCUS also hosts an annual Director’s Conference, which provides a full range of informative educational sessions about critical issues important to today’s ever-changing financial industry for credit union directors and committee members. For more information, visit www.srcus.org

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AM AD83rd Annual Meeting & Convention

The Kentucky Credit Union League is proud to provide our credit unions with this distinguished opportunity for improvement, growth, and Infinite Possibilities.

The 83rd KCUL Annual Meeting and Convention features a comprehensive agenda on top-of-mind issues, the KCUL Business Meeting, a golf outing, an awards banquet, entertainment and an extensive showcase of business partners and exhibitors.

Whether you are a credit union professional or volunteer, from a small or large credit union, you will find useful information geared towards your needs.

Conference Bundle
Includes 2-day conference, Wednesday Opening Dinner, and Thursday Banquet.

 

$475 – until 9/15

 

$499 – after 9/15

Wednesday Golf Outing

$85

MORE INFORMATION

REGISTER-HERE

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2017 IRA Training

September 19-20 | League Office

Educational Investment: $239 per person per day

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The Only Sure Thing about IRA Rules...is Change.

Day 1: IRA Essentials
9:00 a.m. – 4:30 p.m.

IRA Essentials gives attendees a solid foundation of IRA knowledge.  Exercises are included throughout the day to help participants apply information to job-related situations.  Attendees will leave this session able to work with IRA owners and process basic IRA transactions with confidence.  This is a beginner’s session; no previous IRA knowledge is assumed.

Introduction and Establishing IRAs

  • Identify the tax differences of a Traditional and Roth IRA
  • Examine the process for establishing an IRA and the required documents
  • Differentiate between the types of beneficiaries

IRA Funding

  • Learn about the Traditional and Roth IRA eligibility requirements
  • Identify the contribution limit and deadline
  • Communicate contribution reporting deadlines

IRA Distributions

  • Identify federal income tax withholding requirements
  • Examine IRS penalties and penalty exceptions
  • Summarize the tax consequences of IRA distributions
  • Communicate distribution reporting deadlines

IRA Portability

  • Differentiate between a rollover and a transfer
  • Recognize rollovers between IRAs and employer- sponsored retirement plans

Who Should Attend?

You should attend this seminar if you:

  • need to learn the basics of Traditional and Roth IRAs or
  • want an updated, general refresher on IRA rules.

Day 2: Advance IRAs
9:00 a.m. – 4:30 p.m.

Advanced IRAs builds on the attendees’ basic knowledge to address more complex IRA issues their financial organizations may handle.  This is an advanced session; previous IRA knowledge is assumed.  The instructor uses real-world exercises to help participants apply information to job-related situations.

IRA Update

  • Explain the recent changes affecting IRA owners.
  • Discuss the 2017 Roth modified adjusted growth income limits.
  • Recognize how recent changes may affect your financial organization. 

Required Minimum Distributions

  • Calculate a required minimum distribution (RMD).
  • Discuss the RMD rules and reporting requirements.

Beneficiary Options

  • Describe beneficiary distribution options.
  • Recognize the differences for spouse, nonspouse, and nonperson beneficiaries.
  • Explain beneficiary payment deadlines.      

Advanced Portability

  • Summarize the restrictions on the movement between IRAs.
  • Recognize the options available when moving from an employer-sponsored retirement plan to an IRA.
  • Explain the result of violating the portability restrictions.
  • Roth IRA Conversion Contributions
  • Describe a conversion.
  • Explain the effect of withholding on a conversion.
  • Report a conversion.
  • Define the consequences of an ineligible conversion.

IRA Owners Tax Forms and You

  • Determine which tax forms an IRA owner must complete when certain IRA activity occurs.
  • Understand which IRS penalty taxes may apply to IRA owners.

Who Should Attend?

You should attend this seminar if you:

  • are an IRA administrator or member service representative who has working knowledge of basic IRA operations and wish to expand your expertise;
  • are a compliance specialist with procedural oversight of IRA policies and practices; or
  • are support personnel responsible for promotional materials that describe the services provided by your credit union.

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2017-East-Coast-Marketing-Conference billboard

2017 East Coast Marketing Conference

September 20-22, 2017 | Wilmington, NC

The 2017 East Coast Marketing Conference, hosted by the Carolinas Credit Union League in partnership with the Virginia Credit Union League, will be Sept. 20-22, in the Riverfront District of Wilmington, NC at the Hilton Wilmington Riverside. This conference will focus on emerging and high-value topics with an agenda created by and for credit union marketing and business development professionals, plus opportunities for networking and idea sharing with credit union peers and exhibitors.

Agenda
The conference agenda is designed by marketers and business development professionals from diverse credit unions. This year, you will focus on:

  • Digital marketing strategy
  • Kicking up creativity
  • Growing wallet share
  • Deciphering data to create incredible member journeys
  •  Tools and tactics for relevance in a crowded news environment
  •  Strategy, marketing, and growth planning

Cost

Participant cost of $325 per person includes sessions, materials, refreshment breaks, reception, and Thursday evening activity.

Register

Accommodations

Hilton Wilmington Riverside
301 N. Water Street
Wilmington, NC 28401

The room rate for this conference is $155 per night. Please call 910-763-5900 and provide group code "CCR" to make your reservation or click here to reserve your room online. The deadline for reservations is Saturday, August 19. Rooms may sell out prior to the deadline, so reserve yours early.

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The Road Less Traveled to Membership Growth

By: Scott Butterfield

It’s strategic planning season for many of us; a time for reassessing our environment and revisiting our strategic themes to ensure we are heading down the right road.

The competition is fierce. Most of us prefer an uncontested market space, but the reality is that many of us operate in hyper-competitive markets, fighting for dominance. But the payday for those credit unions that take the right road and find their niche is deeper consumer demand, greater organic growth, and shrinking competitive relevance.

Are your current strategies enough to reach your goal?

If your organization has a growth strategy, I encourage you to consider this strategic question: will your strategy help you locate the road less traveled to target the right consumer with the right product offer at the right time? If you can confidently answer “yes,” carry on. But if you operate in tough markets, with dozens or more local or remote organizations competing for the same potential members, I challenge you to revisit your strategy and consider other options. In a market filled with equally skilled and resourced competitors, can your organization afford to have the second-best strategy for matching the right person with the right product at the right time? It’s great if you find the right person, but what if you don’t get to them in time? What if your offer is wrong?

The road less traveled
In my strategic planning travels, I’m exposed to hundreds of potential credit-union growth strategies. As excited as some leadership teams are about their growth strategies, I have to say most are very similar. It’s tough to dominate a market or gain measurable market share when similar competitors are slugging it out using the same old strategies.

One reason we see so many of the same strategies is that credit unions tend to 1) follow what has worked for others, and 2) select the best strategies they perceive they can afford. If any of this reflects how you determined your strategy, I hope you will revisit your strategy with the following considerations:

  • If you’re following strategies that have worked for others, what can you do to give your strategy an edge over the competition?
  • If your strategy is limited by what you think you can afford, consider what happens if you invest less than what’s needed to make sure you get to the right person with the right product at the right time. Invest too little and you might be better off making no investment at all. Why throw good money after the probability of poor results?

Case in point
Most credit unions, especially large ones, use customized consumer target lists to find and reach new potential members. These strategies have been around for a long time. Success is mixed, and I believe that one reason is because so many credit unions and banks located in the same markets use similar lists, targeting the same people at the same time.

There is a road less traveled for target marketers. Today, we have access to data that can be used to help us realize deeper segmentation to find consumers that may be overlooked by the competition, and give a credit union the edge at getting to the right person first. But to realize this deeper level of segmentation, one must be committed to spending the time with their internal and external data managers to look deeper and further for those consumers. Here are a few examples:

  • Thin-file borrowers. On the surface these thin-file consumers look less attractive. However, alternative risk scores can help target these specific populations that will likely drive growth for years to come.
  • Relationship preferences. What if you could identify those potential consumers who are more likely to work with a credit union over a bank, and what if you could invest more of your marketing dollars attracting this group?
  • In the market consumers. Most consumers are not in the market at a given point in time. Leveraging propensity models can help identify those who are, and significantly increase response rates and campaign ROI.

The road less traveled is so much more than a custom data dump with saturated data points. This strategic road looks deeper and wider to find overlooked, high-quality new members.

“It can seem counter-intuitive at first, but making a move toward a more focused marketing effort can actually lead a credit union to a broader audience, a larger membership, and improve their member service capabilities,” said Jason Dietrich, an Experian consultant. “When I work with credit unions to design more targeted campaigns, the increased efficiency and ROI allows the credit union to invest in new areas they otherwise couldn’t – like digital- and mobile-friendly channels, and overall member services.” 

Why it matters
Your relevance and long-term sustainability rely on your team’s ability to out-compete your competitors. If you want to win, make sure that you have the right strategies. Find a way to be clearly different and better. You can do this by targeting the right consumer with the right product at the right time. This is possible with an all-in commitment, smart thinking and wise use of data.

Scott Butterfield is the Principal of Your Credit Union Partner, PLLC.  Your Credit Union Partner (YCUP) is a trusted advisor to the leaders of more than 100 credit unions located throughout the United States.

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Commonwealth Credit Union Selects Scholarship Winners

Borwig, Cravens, Henson, and Rudic each awarded $1,000

The Commonwealth Credit Union Scholarship Committee has selected four outstanding high school graduates as the 2017 Commonwealth Credit Union Scholarship recipients.

The 2017 winners: Blake Borwig, a recent graduate of Anderson County High School who will be attending Georgetown College this fall; Emma Cravens, a 2017 graduate of Southwestern High School who plans to attend Western Kentucky University; Josiah Henson, a recent graduate of Jackson City High School who will be a student at the University of Kentucky in the fall; and Tamara Rudic, a 2017 graduate of Western Hills High School who will continue her education at Brown University.

"These young adults distinguished themselves as embodying our purpose of bettering lives though leadership within their school, academic achievement, and contributions to their community," said Karen Harbin, Commonwealth Credit Union President/CEO.

Each year, Commonwealth Credit Union offers four $1,000 scholarships to graduating high school seniors who are credit union members. Recipients are chosen through an application process that is evaluated based on community involvement, extracurricular activities, academic achievement, short answer essay, and letters of recommendation. The 2018 Commonwealth Credit Union Scholarship Application will be available in January.

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From left to right- Josiah Henson, Blake Borwig, and Tamara Rudic. Not pictured: Emma Cravens.

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Commonwealth Credit Union Cares about Small Business

Commonwealth Credit Union strives to live by the purpose, "We Better Lives." The credit union can be found in their communities serving free lunch, providing complimentary shredding of personal documents, collecting donations for backpacks snacks, and participating in "Pay it Forward" throughout the year.

Karen Harbin, CCU President/CEO, recently attended the Small Business Administration Regional Regulatory Roundtable, where various small business leaders voiced their concern about regulations impacting their businesses.

"It is no secret that small businesses are the heart and soul of our communities that fuel economic viability," said Harbin. "As a small business in the financial services industry, it's imperative that Commonwealth Credit Union not only remains informed of regulatory changes, but also that we are prepared to address these challenges with our members' best interest at the center of that discussion."

SBA Regional Roundtable

From left to right- Debbie Painter, Executive Vice President of KY Credit Union League, Karen Harbin, Commonwealth Credit Union President/CEO, Wendell Lyons, President of KY Credit Union League

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Doe Run Federal CU has Lost Several "Wallets"

The staff at Doe Run Federal Credit Union has been very busy "losing wallets" and asked for the community's help in finding them.

Wallets were numbered and scattered throughout the community. Upon finding a wallet, the "good Samaritan" would open it up to see that it belonged to Doe Run FCU. If they returned it to the credit union, they received a reward. The good Samaritans received CASH ranging from $25 to $100 or a GIFT CERTIFICATE from a local business.

Some of the wallets that have been returned were found in places such as the Save-A-Lot ramen noodle section, Brandenburg Post Office parking lot, Shopko little girl's pants section, and Meade County Public Library children's book section.

"Down the road, if you should find a wallet, always choose to do the right thing and go above and beyond to return the wallet to its owner. Your reward, at that time, may not be cash or a gift certificate. Your reward will be knowing you chose to do the right thing. Honesty is always the best policy!" says Debbie Allen, Manager.

This is just another way to demonstrate A SMALL CREDIT UNION, DOING BIG THINGS.

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Jill KrimmPhotoFort Knox Federal Names Jill Krimm Vice President of Human Resources

Fort Knox Federal Credit Union announced the appointment of Jill Krimm as Vice President of Human Resources. Jill will be in charge of all Credit Union recruitment, employee benefits administration and general training.

Prior to joining Fort Knox Federal, Jill had a distinguished career in retail banking that spanned more than 20 years. She had a 15-year tenure with Town and Country Bank & Trust in Bardstown, KY as Vice President & Human Resources Officer. Jill has experience and expertise in recruitment and retention, benefits administration, as well as corporate and employment law.

Jill is also a senior certified professional (SCP) of the Society for Human Resource Management, a nationally accredited HR certification agency.

Immediately before coming to Fort Knox Federal, Jill served as Senior Vice President & Human Resources Director at PBI Bank in Louisville since 2011. At PBI Bank, she created a centralized HR function and infrastructure for the bank's more than 300 employees.

Jill is a native of Bardstown, where she is still a resident, and enjoys the historic and entertainment venues in the community, such as My Old Kentucky Home, The Stephen Foster Story, Old Bardstown Village, Kentucky Railway Museum, and Bourbon Distillery Tours.

She has a bachelor's of business administration degree from Eastern Kentucky University and Human Resources Management diploma from the Graduate School of Banking at the University of Wisconsin.

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Fort Knox Federal to Open Branch in Bowling Green

Fort Knox Federal Credit Union announced today it will host the Grand Opening of its new branch office located at 2345 Gary Farms Blvd. in Bowling Green on August 25 at 3 p.m.

“The Gary Farms Blvd. location will be our first branch office in Bowling Green and a tremendous convenience for our many members we have here and in surrounding counties,” said Ray Springsteen, President and CEO of Fort Knox Federal.  “We are very excited about coming into just a vibrant and growing community such as Bowling Green,” he added.

The new Bowling Green Branch will be full-service featuring mortgage and loan processing, free ATM services, and in-branch teller service along with the latest in technology including online and mobile banking.   Also, the branch will feature extended service hours in the drive-thru with teller assisted transactions.  “Our new branch will accommodate members however they prefer service,” Springsteen added.

Fort Knox Federal, now the largest Kentucky-based credit union in the state, was founded in 1950 by 10 civilian employees at Fort Knox and $1,000 in initial capital.   “We have come a very long way since then as we now serve more than 95,000 members and have more than $1.4 billion in assets.  Although the Credit Union has grown, our basic mission and business model has not changed.  We are still dedicated to improving the financial lives of our member-owners as a financial cooperative.  We continue to provide innovative and lower cost financial services to individuals and businesses,” Springsteen said.

Coming to Bowling Green was a clear opportunity for the Credit Union to expand its membership base and to offer comprehensive financial services to the residents of Warren County and beyond.   In addition to offering mortgage, home equity, auto and residential construction loans, Fort Knox Federal has commercial loans and accounts.  Individual checking accounts are free with no monthly services fees and free customizable text alerts.

When the Bowling Green Branch opens, Fort Knox Federal will operate 17 branches throughout central Kentucky ranging from Jefferson County to Danville and now Bowling Green.

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Fort Knox Federal Contributes to Vietnam Wall Replica Project

Fort Knox Federal Credit Union donated $10,000 to defray expenses of creating an 80 percent scale replica of the Washington, D.C. Vietnam Veterans Memorial in Hardin County.  The donation was to the Veterans Tribute Group, Inc., an association of veterans’ organizations in and around Hardin County that was founded for the purpose of establishing memorials and monuments to veterans in the area. 

Kentucky lost a total of 1,103 military service men and women during the Vietnam Era, according to the group’s website, and the memorial is to honor their sacrifice.  Among the Kentucky casualties were 24 young men from Hardin County whose names appear on the wall. 

“We want the memorial to be a sacred place for families of the fallen, and our surviving Vietnam veterans, to go to continue the healing process and pay honor to those who paid the ultimate price,” said C.T. Christie, Vietnam veteran and member of the Veterans Tribute Group, Inc. committee.

The replica Vietnam Memorial Wall will be placed in the Veterans Tribute Park in Elizabethtown, KY and will be an exact replica of the traveling unit that was displayed in Radcliff in May 2015.  Both are a true representation of the Vietnam Memorial Wall in Washington DC, but to 80 percent scale.  At a total length of 360 feet and a height of 8 feet at its apex, it is possible to make rubbing of the names on the replica wall. 

“Supporting the Veterans Tribute Group continues Fort Knox Federal’s ongoing commitment to valuing home, family and the communities we serve as well as honoring members of the military and their families,” said Ray Springsteen, Fort Knox Federal President and CEO.  

“Locating the wall in Elizabethtown is appropriate given the estimated 16,000 veterans living in Hardin County,” Christie said.  Largely because of this large veteran population, the replica Vietnam Wall Memorial project has continued to gain support from a cross section of the community from elected officials, civic leaders and volunteers. 

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KECU Sponsors “Jammin in July”KECU 2

Kentucky Employees Credit Union (KECU) was proud to sponsor Jammin’ in July in downtown Frankfort. This year made the second annual sponsorship of the Old Capitol Community Concert, a free concert held on the old Capitol lawn Friday night, July 28 -  featuring KECU as title sponsor. The concert included Frankfort-jam-band, Here for the Party Band and headliners Jack Pearson (formerly of the Allman Brothers Band) and Jonell Mosser. The performances were held before a crowd of approximately 300 people. KECU President John Graham welcomed concert go-ers and could be seen handing out lawn chairs to those in attendance.

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Kentucky History Half Marathon 9KECU Sponsors the Greatest Half in History

Kentucky Employees Credit Union is the title sponsor of the KY History Half Marathon, scheduled for Saturday, September 30 – the greatest half in history! The KY History Half is the Commonwealth’s only half marathon that celebrates Kentucky’s history, where runners pass historical sites and monuments. This year is the 225th birthday of Kentucky, and a major marathon kick-off event is going to be held during packet pick-up featuring live music from Frankfort Mayor Bill May and the Louisville Crashers, and birthday cake, to celebrate the occasion. Proceeds from the KY History Half Marathon go to support the Kentucky Historical Society.

To register for the marathon, you can check out kyhistoryhalf.com of the KY History Half Marathon Facebook.

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CUNA Works with SBA Office of Advocacy to Highlight Changes that Should be Made to CFPB Rules

CUNA staff attended an SBA Office of Advocacy Roundtable in July to discuss the Dodd-Frank required assessment of CFPB mortgage rules and the Small Business Lending Request for Information. In addition to SBA Office of Advocacy staff, staff from the CFPB, the Federal Reserve, and the House Small Business Committee also attended. During the roundtable, the group discussed ideas for reducing regulatory burdens on small entities, such as credit unions.

Specifically, the group discussed: 

  • Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X) Assessment 
  • Ability-to-Repay/Qualified Mortgage Rule Assessment 
  • Dodd-Frank Section 1071 & The CFPB’s Request for Information on Small Business Lending

CUNA provided several credit union specific suggestions for changes to the mortgage rules and the pending Small Dollar Lending rule. 

The SBA Office of Advocacy has in the past expressed concerns when CFPB rules have the potential to be overly burdensome to credit unions. Last year, they sent several suggestions during the comment period for the CFPB’s proposed small dollar loan rule and urged it to exempt credit unions from it. In addition to this week’s roundtable, the SBA Office of Advocacy plans to hold roundtables throughout the country to: 

  • Identify regional small business regulatory issues in order to assist agencies with regulatory reform and reduction in compliance with Executive Orders 13771 & 13777; 
  • Compile crucial information for Advocacy’s new report on existing small business regulatory burdens across the nation, identifying specific recommendations for regulatory changes based upon first-hand accounts from small businesses across the country; and 
  • Inform and educate the small business public as to how Advocacy and SBA can assist them with their small business goals. 

CUNA will continue to work with the SBA Office of Advocacy to highlight areas where the CFPB should further tailor its rules to alleviate regulatory burdens on credit unions. 

*** Also mentioned was a possible discussion roundtable on these issues located in Kentucky.  Should this roundtable be scheduled for our state, we will let you know the details.

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Board Proposes Closing Stabilization Fund and Providing a Distribution in 2018

Estimated Distribution $600 Million to $800 Million; Normal Operating Level of Share Insurance Fund Would Rise; Budget Review Projects $5.8 Million Savings

The National Credit Union Administration Board held its sixth open meeting of 2017 at the agency’s headquarters here today and unanimously approved three items:

  • A request for public comment on the agency’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund in 2017, four years ahead of schedule, and provide credit unions with a Share Insurance Fund distribution in 2018, estimated to be between $600 million and $800 million.
  • A Notice of Proposed Rulemaking amending the agency’s share insurance requirements rule to provide greater fairness, predictability, and transparency and add a temporary provision to govern share insurance equity distributions related to the Corporate System Resolution Program.
  • A proposed rule to amend the agency’s definition of “in danger of insolvency” to give the agency more flexibility to act in cases of emergency mergers.

The Board also received briefings from the Chief Financial Officer on the revised 2017 agency budget estimates and the performance of the National Credit Union Share Insurance Fund.

Agency Proposes to Close Stabilization Fund in 2017
Credit unions would avoid a possible Share Insurance Fund premium in 2017 and receive a distribution in 2018 under a proposed plan, approved by the Board, to close the Temporary Corporate Credit Union Share Insurance Fund this year.

The proposed plan, described online here, is available for public comment. The NCUA must receive comments no later than Sept. 5. The NCUA will host an industry webinar on Wednesday, Aug. 9, to answer questions about the proposed closure plan. Details about the webinar and online registration will be available in the near future.

“The closing of the Stabilization Fund in 2017 allows the NCUA to return funds to credit unions that can be put to work in the system prior to the original closure date in 2021,” Board Chairman J. Mark McWatters said. “As part of this proposal, the NCUA would raise the Share Insurance Fund’s normal operating level to account for the remaining obligations of the Corporate System Resolution Program. Even with the proposed increase to the normal operating level, the NCUA is projecting a return of excess equity to insured credit unions through a distribution from the Share Insurance Fund in 2018. The proposed plan to close the Stabilization Fund, including increasing the normal operating level for the interim, will ensure the Share Insurance Fund has the appropriate level of resiliency to protect member deposits and maintain a safe and sound credit union system, including maintaining public confidence in federal share insurance.”

Several factors make the proposed closure of the Stabilization Fund this year possible:

  • There are no longer any outstanding borrowings to be repaid to the U.S. Treasury, as the agency made the last payment to the Treasury Department in October 2016;
  • The balance of the legacy assets that secure the NCUA Guaranteed Notes Program and the NGN investor balance are both lower than the $13.2 billion Share Insurance Fund; and
  • Due to nearly $4 billion in net legal recoveries, the Stabilization Fund has a net positive position of $1.9 billion as of May 2017.

The proposed plan includes a staff recommendation that the Stabilization Fund closure be done Oct. 1, 2017, using the closing balances as of Sept. 30, 2017.

Even if the Stabilization Fund is closed, there would be remaining obligations of the Corporate Resolution Program. Those, the Board believes, can be prudently borne by the Share Insurance Fund without inordinate risk, provided the necessary equity is maintained.

Board Proposes Raising Share Insurance Fund Normal Operating Level
To maintain the necessary equity in the Share Insurance Fund after the Stabilization Fund closes, the Board proposes to increase the normal operating level for the Share Insurance Fund to 1.39 percent.

Should the Stabilization Fund close, assets would be transferred to the National Credit Union Share Insurance Fund, and the agency projects that transfer would raise the Fund’s equity ratio as high as 1.47 percent, requiring a distribution to credit unions.

Raising the normal operating level still would allow for a distribution to credit unions in 2018. It would also allow the Share Insurance Fund to withstand a moderate recession without the equity ratio dropping below 1.20 percent, at which point federal law requires the agency to charge a premium or develop a fund restoration plan. At 1.39 percent, the Board would also ensure credit unions’ one-percent contributed capital deposit is well-protected.

Questions and answers on the proposed change to the normal operating level are available online here.

Amendments to Share Insurance Distribution Rule Proposed
Credit unions would see greater fairness, predictability, and transparency under a Board-approved Notice of Proposed Rulemaking (Part 741) to accompany the Stabilization Fund closure plan.

The proposed rule amends the existing share insurance requirements rule would give federally insured credit unions greater transparency on how an individual credit union’s share of an equity distribution from the Share Insurance Fund would be calculated. The rule also would prohibit a federally insured credit union that terminates share insurance coverage from receiving a distribution for the calendar year in which that termination occurred.

Finally, the proposed rule would add a temporary provision governing equity distributions related to the Corporate System Resolution Program. The Board believes any such distribution should go first to repaying credit unions that paid special assessments rather than taking the form of a general distribution. A credit union that had not paid a special assessment would not be eligible to receive a distribution related to the Corporate System Resolution Program unless all other corporate assessments have been repaid.

Comments on the proposed rule, available online here, must be received no later than Sept. 5.

2017 Mid-Year Budget Review Projects $5.8 Million in Savings
The NCUA’s Chief Financial Officer reported that agency expenditures are estimated to decline by approximately $5.8 million for 2017, based on current projections of agency needs.

The NCUA’s revised 2017 operating budget estimate is now $292.2 million. Reduced spending was noted for the following expense categories:

  • A $2.5 million reduction in pay and benefits, based on factors such as the hiring freeze earlier this year, employee turnover, and projected hiring and attrition rates.
  • A $1.4 million reduction in travel costs.
  • A $1.2 million reduction in contracted services.
  • A $516,000 reduction in administrative costs.
  • A $122,000 reduction in rental costs.

These funds will be reserved as a contingency for anticipated costs to implement agency restructuring initiatives. No Board action is required with respect to the NCUA budget, and no reduction to the Operating Fund budget is recommended.

The NCUA currently operates on a two-year budget cycle. The 2018 budget is scheduled to be reviewed at the Board’s November open meeting. The agency plans to host a public budget briefing in the fall.

As part of its ongoing commitment to transparency in the budget process, the NCUA continues to make detailed budget information publicly available on its Budget and Supplementary Materials webpage.

Share Insurance Fund Reaches Net Position of $13 Billion
The Share Insurance Fund in the second quarter of 2017 posted net income of $49.3 million, primarily due to a decrease in the provision for insurance losses.

The fund’s net position was $13.0 billion at the end of the quarter.

Second-quarter investment and other income was $49.2 million. Operating expenses were $49.4 million. The provision for insurance losses decreased by $49.5 million.

As of June 2017, the calculated equity ratio is 1.22 percent, based on estimated insured shares of $1.1 trillion. However, when adjusted for the projected one-percent deposit capital adjustment recognized in September, for all federally insured credit unions with assets of $50 million or greater, the equity ratio is estimated to remain at 1.26 percent.

  • The number of CAMEL codes 4 and 5 credit unions increased by 6.6 percent from the first quarter of 2017, to 210 from 197.
  • Assets in CAMEL codes 4 and 5 credit unions increased 11.6 percent from the first quarter to $10.6 billion from $9.5 billion.
  • The number of CAMEL code 3 credit unions declined 1.3 percent from the first quarter to 1,088 from 1,102.
  • Assets in CAMEL code 3 credit unions declined 1.7 percent from the first quarter to $53.6 billion from $54.5 billion.

There were no credit union failures during the second quarter of 2017, compared to six credit union failures in the second quarter of 2016. Year-to-date, two federally insured credit unions failed during the first two quarters of 2017, compared to 11 in the first two quarters of 2016. Total year-to-date losses associated with credit union failures are $3.8 million, compared to $8.5 million in the first two quarters of 2016. Fraud was a contributing factor in one of the two failures.

The second-quarter figures are preliminary and unaudited.

Definition Change Would Give Agency More Flexibility in Emergency Mergers
The NCUA would have additional flexibility in situations warranting emergency mergers under a proposed rule (Part 701) approved by the Board.

The proposed rule would amend the definition of the phrase “in danger of insolvency” in the agency’s Chartering and Field of Membership Manual. The current definition requires credit unions to fall into at least one of three net worth categories over a period of time in order to be found in danger of insolvency. The proposed rule would lengthen by six months the time period for two of those categories. The proposed rule would also add a fourth category, to include credit unions that have been granted or received Section 208 assistance within the 15 months before a determination of a danger of insolvency has been made.

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Distinguishing Between the MLA and SCRA in Collections

CUNA Compliance has received several questions as of late about how the Military Lending Act (MLA) impacts the collections function within a credit union. More specifically, cooperatives want to know if the MLA contains specific collections prohibitions like those found within the Servicemembers Civil Relief Act (SCRA). The direct answer is no. But this is compliance, so we all know it’s a bit more complicated than that.

First things first; remember that the SCRA provides as follows:

  • Section 532 - Property may not be repossessed from a Servicemember serving on active duty without a court order.
  • Section 533 - Real estate may not be foreclosed upon while a Servicemember is serving on active duty and for a period of 12 months thereafter.

As stated previously, the MLA does not contain any specific collections prohibitions such as those found within the SCRA. However, some have argued that many of the loan product limitations found in Section 232.8 of the MLA do in fact affect the collections activities of the credit union. Those loan product limitations include:

  • The credit union may not require the covered borrower to waive any right to legal recourse available under Federal or State law.
  • The credit union may not require the covered borrower to submit to arbitration.
  • The credit union may not demand unreasonable notice from the covered borrower as a condition for legal action.
  • The credit union may not take a security interest in the covered borrower's funds unless those funds were deposited after the extension of credit in an account established in connection with the credit transaction.
  • The credit union may not require the covered borrower to repay the obligation through an allotment.
  • The credit union may not prohibit the covered borrower from prepaying the obligation or charge the covered borrower a prepayment penalty for doing so.

So, do these loan product limitations really affect the collections activities of the credit union? Not really.

To determine why, look at Section 232.9 of the MLA. It provides that any loan contract with a covered borrower that contains one or more of the prohibitions outlined above is void from inception of the contract. In other words, there is nothing for the collections department to collect as there is no legally enforceable promissory note between the credit union and the covered borrower.

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New Resources Available for HMDA Filers

The CFPB posted a couple of new resources to the HMDA implementation webpage that are worth reviewing if your credit union reports HMDA data.  The CFPB made some updates to the technology preview, a system they are referring to as the "HMDA Platform" which will be available online only and is supposed to guide filers through the entire filing process.  The preview provides some table views of the platform and gives us a better idea of what we can expect from the new data submission process, which is expected to be ready by the third quarter of 2017.

The platform will require every HMDA filer to register online for login credentials and establish an account. Once registered, the credit union can directly upload its LAR, check which stage it is in, complete the review and verification steps, then submit the LAR from within the platform.  If the LAR is not properly formatted, the platform will display an error message and the filer must correct and refile the LAR.  The CFPB has created a LAR Formatting Tool to help small institutions with smaller volumes of covered loans create a pipe delimited text file format that can be submitted on the platform. The Platform will identify any HMDA edits which must be addressed before the data can be submitted.  Once all edits have been addressed, an authorized representative from the filer's institution must certify the completeness and accuracy of the LAR before submitting the LAR.  After submission, the platform provides a confirmation screen acknowledging date and time of submission.

Other new tools on the HMDA website include two separate Filing Instructions Guides (FIG), one for data collected in 2017 (available here) and another for data collected in 2018 (available here).  These guides replace the FFIEC's "Getting it Right!" guide that HMDA filers have relied on for so many years.  The 2017 FIG is necessary to explain the new submission process because data collected in 2017 and reported in 2018 will be submitted to the CFPB for the first time, rather than to the Federal Reserve.  The new data reporting requirements in the HMDA Final Rule apply to data collected beginning on January 1, 2018, so a separate 2018 FIG was created for that purpose.   

With the HMDA effective date is fast approaching, we recommend that you take some time to familiarize yourself with these new reporting instructions and resources.   There is a Frequently Asked Questions document specific to the filing process that is also helpful.  Getting your credit union up to speed for HMDA compliance is a lengthy process and one that you should start preparing for sooner rather than later.  Please reach out to This email address is being protected from spambots. You need JavaScript enabled to view it. if your credit union has additional questions.

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Final Rule Analysis ("FRA")

CUNA Compliance is pleased to announce publication of its Final Rule Analysis ("FRA") which discusses the Consumer Financial Protection Bureau's ("CFPB") recently issued rule amending the Integrated Disclosure Rule ("TRID").

The CFPB issued its final rule on July 7, 2017. It contains several clarifying amendments and technical corrections, including:

  • All loans secured by a cooperative unit are subject to TRID regardless of whether the cooperative unit is classified as real or personal property under applicable state law;
  • Certain housing assistance loans are exempt from TRID provided they meet a handful of conditions;
  • Numerous clarifications to the process of issuing and delivering both the Loan Estimate and Closing Disclosure;
  • Further explanation regarding proper delivery of the Escrow Closing Notice; and
  • Additional interpretations of how TRID impacts construction loans.

The final rule carries a mandatory compliance date of October 1, 2018. The FRA is available on www.cuna.org under Compliance / Resources / CompNotes: Final Rule Analyses.

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Back-2-Basics: ESIGN

The Electronic Signatures in Global and National Commerce Act of 2000 ("ESIGN") promotes the use of electronic signatures and records in commercial transactions by granting them the same legal validity and enforceability as paper records and handwritten signatures.   

When credit unions are required by law or regulation to make information available to a consumer in writing, the information can be delivered electronically as long as the credit union complies with ESIGN's requirements. The federal ESIGN statute doesn't affect the content or timing of any disclosures required to be provided to consumers by the Truth in Lending Act, Truth in Savings Act, Electronic Fund Transfers Act, or any other consumer protection laws.

Pre-Consent Disclosures
ESIGN requires "affirmative consent" to conduct business electronically – in other words, consent must be a voluntary "opt-in." Businesses cannot convert consumer accounts to online accounts without first obtaining consumers' affirmative consent.

Prior to consenting, consumers must be provided with a clear and conspicuous statement informing them of their rights regarding the transaction, as well as a statement of hardware and software requirements for access and retention of electronic records.

There are also subsequent disclosure requirements when changes to hardware or software create a "material risk" that the member will not be able to access or retain an electronic record of the transaction. In this case, the credit union would have to provide the member with a statement of the revised hardware and/or software requirements, as well as the right to withdraw consent without the imposition of any fees or conditions not originally disclosed.

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By The Way Archives

JULY 2017

MAY/JUNE 2017

APR 2017

MAR 2017

FEB 2017

JAN 2017

 

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Kentucky Credit Union League
3615 Newburg Rd.
Louisville, KY 40218

Call: 502-459-8026 or 800-333-5285
Fax: 502-459-0189
Email: kycul@kycul.org