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
C-Plant Federal Credit Union hosted State Representative Steven Rudy, Chairman of Appropriations and Revenue Committee, at their Village Square Drive Branch in Paducah on Monday, December 18th. The Appropriations and Revenue Committee is the tax-writing body of the state legislature. Chairman Rudy was very understanding to our concerns regarding tax reform. He expressed his support of our industry and our role in the communities in which credit unions serve.
As a “Thank You” for keynoting our annual meeting in October, we mailed Jim Nussle, President/CEO of the Credit Union National Association, a little piece of Louisville. We were delighted to receive the message and picture below:
Look what I got in the mail today! What a thoughtful and fun gift. Great memories from a very productive visit. Thank you to you and your team in Kentucky!
The Blue Grass Credit Union Chapter recently donated $1,250 to The Nest Reindeer Express. With the help of our chapter credit unions’ donations, we were able to help The Nest provide over 900 local children with new toys, books, and a warm coat this Holiday. In addition, each family will receive a box of food. The Nest provides a safe place for education, counseling, and support to children and families in crisis from domestic violence and child abuse.
The Reindeer Express is an annual event for the Nest to help provide joy and support to families in need during the Holiday season. Credit Unions helping to give children a chance, victims a voice and families a future!
Powerful Cause. Positive Effect.
To earn the support of lawmakers, credit unions need to stand together and send a united message that our 110 million members matter. CUNA GAC is where you will:
- Network with nationwide credit union leaders
- Attend keynote sessions from thought leaders in politics, business, and media
- Explore regulatory compliance and advocacy issues in breakout sessions Advocate for credit union priorities during league-organized hill visits
- Connect with exhibitors in the credit union movement's largest exhibit hall
George W. Bush to Speak at CUNA GAC
AN EXCLUSIVE CONVERSATION WITH PRESIDENT GEORGE W. BUSH
Our 43rd president and founder of the George W. Bush Presidential Center will discuss the challenges facing our nation in the 21st century and the power of freedom at the CUNA Governmental Affairs Conference.
Join us February 25 - March 1, 2018.
February 8, 2018 | Indiana Credit Union League
5975 Castle Creek Parkway North Drive
Indianapolis, Indiana 46250
Educational Investment: $100 - Small CU discount applies!
Registration Deadline: February 1, 2018
Space is limited with only 20 spots available for this workshop.
This workshop is open to members of the Indiana and Kentucky Credit Union Leagues and affiliates.
Join us for a hands-on workshop that will help you refine your credit union's brand message and better connect with your community.
Spend some time with other credit union professionals clarifying your brand message. Through storytelling, coaching and collaborative exercises, you’ll learn how to distill your message, increase your reach and transform the outcomes of your credit union's marketing efforts.
Identify Your Value — Determine how you can resolve the needs and objectives of your credit union’s customers.
Clarify your message — The financial services industry is notorious for talking over consumers’ heads. Start speaking their language, thus improving communication between you and your members.
Burnish Your Brand — What are the components of an excellent brand? Clear messaging, value propositions and calls to action are just a few methods that will increase customer engagement with your credit union’s brand.
9 a.m. – 9:30 a.m.
9: 30 a.m. – Noon
Noon - 12:45 p.m.
12:45 p.m. - 2 p.m.
Michael Reynolds is President/CEO of Capital Point Marketing, the premier marketing agency for banks and credit unions. His love of the internet started in 1996 when he founded the company and grew it over time to the modern dynamic digital agency it is today serving clients throughout the U.S.
Prior to earning degrees in both Cello Performance and MIS from Ball State University, Michael studied the cello with a real live Klingon.
Michael is a sought-after professional speaker on the subject of digital marketing. He was the featured speaker at the League's 2016 Marketing Roundtable. He has also presented to sold-out crowds at prominent events such as HubSpot's INBOUND Conference.
Michael enjoys playing tennis, spending time with his awesome wife and son, playing the cello, using only one space after a period and eating lots of sushi.
Garrett Curry is Brand Strategist at Capital Point Marketing, the premier marketing agency for banks and credit unions. His approach is both artful and empathetic, quickly identifying where a financial institution’s highest value intersects with people’s deepest needs.
His core competencies include messaging, corporate naming, identity development, web strategy and branded environments. His professional background is within both the non-profit and for-profit sector. There, he designed and consulted for several social initiatives that addressed issues, such as human trafficking, food insecurity, pediatric prosthetics, poverty, and literacy.
His branding work has appeared internationally and his experience includes extending brands into interior design and online assets alike.
Who Should Attend:
This workshop is for credit union professionals responsible for marketing, public relations, or communicating the value of membership to current and potential members.
Registrations canceled less than five working days before the session date will be subject to a 50 percent cancellation fee.
Mark your calendars for these 2018 education and training opportunities! Stay tuned as we confirm dates for our other popular events.
New Manager Boot Camp
BSA/AML Regional Workshop
Bankruptcy & Collections Workshop
Volunteer Leaders Conference
84th Annual Meeting & Convention
Technology Trends for 2018
by Brian Kaas, managing director of CMFG Ventures, the venture entity of CUNA Mutual Group.
As we forecast which trends will accelerate in 2018 for the industry, consumers will increasingly expect simplicity and convenience from their financial institutions.
However, consumers aren’t necessarily looking to do business specifically with “fintechs.” In the same way, we often assume that consumers have loyalty to a traditional financial institution or a credit union.
The reality is that in this age of nearly infinite resources and technology at our fingertips, consumers are simply looking for businesses that can meet their needs in a convenient and trustworthy manner.
With the growing importance of simple, fast, and convenient, here are a few trends to be aware of in 2018.
For years, the financial services industry has underserved the segment of consumers with little to no credit history, often referred to as “thin-file” consumers. These consumers historically have struggled to get approved for loans or improve their credit scores.
But we are seeing a growing number of nontraditional financial players using new data sets to clear these historic hurdles to meet the needs of these consumers and win their business.
We have already seen companies such as Square apply for bank charters to reach more customers, including new segments that have been underserved to date.
Targeted, personalized, and data-driven ads on Facebook and Google Maps connect with consumers more directly than ever before, pushing financial institutions like credit unions to explore new products and services that can build access to these thin-file clients through new channels and technology.
This will support the continuous increase of nontraditional players as the marketplace becomes more blurred between financial institutions, retail, and fintech.
Another emerging trend is the continued globalization of the currency markets. Specifically, we have recently seen an influx of companies addressing the pain of currency exchanges.
As we look ahead to 2018, credit unions should consider ways to make money transfers and exchanges simple for consumers. Frictionless payments and access to funds in any medium will continue to be a key consumer expectation in the future.
As we have seen in other industries, consumers increasingly will expect financial institutions to enable them to transact business whichever way they want, regardless of channel, location, or service.
Finally, the accelerated adoption of mobile payment platforms will continue through 2018 and beyond. Consumers expect frictionless buying experiences, regardless of where they are.
They want to control how, when, and where their payments are made, accessed, and stored.
Payment technology has moved beyond computers and mobile devices to voice-activated devices such as Amazon’s Alexa. With expanded payment access, this trend also brings evolving security concerns and a higher vigilance to payment security protection.
Credit unions must achieve a balance between exploring emerging payment technologies to meet member expectations and ensuring proper security measures are in place.
Plus, the increased adoption of artificial intelligence and voice-activated technology will continue to push the boundaries of nontraditional ways to connect with members. A year ago, it seemed far-fetched to open a bank account using voice-activated devices, but today financial players are starting to explore it.
What should credit unions do?
Credit unions must act when it comes to innovation while keeping their member at the center. It is important to keep an open mind to evolving trends, even though it can be easy to dismiss these ideas because they seem too far-fetched.
But as we have seen in many other industries, the organizations that continue to innovate and evolve will be in a better position to sustain and thrive.
“Alexa, please send my car payment today.”
During the fourth quarter, Ashland Credit Union set a goal to raise $2,500 for the United Way of Northeast Kentucky. Over the course of one month, employees participated in several small fundraisers to help reach that goal. Coupled with their first annual giving campaign, the organization more than DOUBLED that goal with a pledge of $5,075! ACU is proud to be so involved in the community and with their partners.
In addition, Ashland Credit Union was just voted the Ashland Daily Independent’s “Best Credit Union” for their annual Readers Choice Awards. ACU is excited to be recognized by the people in our community as a favorite.
Commonwealth CU Goes Casual for a Cause
The month of December is widely recognized as the month of giving, but team members at Commonwealth CU believe the act of giving should not be contained to just one month. That belief was the driving force behind the Dress Down Friday Program.
This idea was born in 2014 when Commonwealth CU adopted the common purpose of “We Better Lives Through Our Passion to Serve.” In order to truly Better Lives, team members recognized this purpose could not end with their members, but should also be extended to the communities they serve. The Dress Down Friday Program helps fulfill this purpose. To participate, team members pay $2 every Friday to wear jeans and casual shoes to the office. The money collected from that day is then donated to a charity or other non-profit group in one the communities the credit union serves. Although participation in this program is voluntary, team members have embraced the ability to help their friends and neighbors by simply dressing down.
To date, Commonwealth CU employees have raised more than $36,000 through the Dress Down Friday Program. As part of their annual holiday tradition, team members can dress down for various charitable organizations in the last two weeks of December. This year, those additional dress-down days will benefit the AMEN House and Transform Scott County in Georgetown; the Cabbage Patch Settlement in Louisville; the Mission Clinic and Emergency Community Food Pantry in Frankfort; the Animal Shelter in Shelbyville; and Easter Seals Cardinal Hill and God’s Pantry in Lexington.
Santa Visits Daviess County Teachers FCU
Daviess County Teachers Federal CU had an excellent turnout for their Santa visit on Friday, December 15th. They had over 60 children come in to talk with and take a picture with Santa! They offered a free picture, goodies and hot chocolate to all members.
J. Marvin Hawk Recognized as CUES 2017 Distinguished Director
J. Marvin Hawk, Chairman of Fort Knox Federal Credit Union’s Board of Directors, has been selected as the CUES® 2017 Distinguished Director and was recognized at the CUES Directors Conference this week.
Hawk has been a credit union volunteer since 1978 and a Board Member since 1981, serving several terms as Chairman, Vice-Chairman, Treasurer and Secretary. He was inducted into the Defense Credit Union Council Hall of Honor in 2016 and received the Steve Brody Outstanding Volunteer Award for the State of Kentucky in 2011.
“Marvin truly embodies the cooperative spirit and drives Fort Knox Federal to improve our members’ financial lives every day by delivering the highest value products and services,” says Ray Springsteen, CEO of Fort Knox Federal. “His dedication and commitment over nearly four decades has made a real difference for our member-owners.”
The Board of Directors, all volunteers, is committed to improving the financial lives of members while ensuring the safety and soundness of the organization. Directors are elected by their peer member-owners to be their representatives. They govern the general direction and control of the credit union in accordance with the Federal Credit Union Act, the by-laws, sound business practices, laws, and regulations.
“It’s an honor to be recognized as the 2017 Distinguished Director by CUES. I have seen firsthand how much Fort Knox Federal has improved the lives of our members and our broader community. As Board members, I believe the more we educate ourselves, the better equipped we are to live the ‘people helping people’ philosophy,” says Hawk.
As a Fort Knox Federal Board member, Hawk has continued his professional education through attending the Directors Leadership Institute and successfully completing all Credit Union National Association Volunteer Achievement and Leadership Program educational modules. He has also encouraged his fellow board members to become well-informed in credit union matters and been instrumental in developing a new board governance policy and an extensive onboarding program for new board members. As noted by CUES, his leadership at Fort Knox Federal has led to directors completing 663 educational training sessions.
Additional information about the CUES 2017 Distinguished Director award may be found here.
Pictured from Fort Knox Federal Credit Union (left to right): Jo Exler, Board Treasurer; Henry Wheatley, Director; J. Marvin Hawk, Chairman, Ray Springsteen, CEO; and George Pennington, Director.
Laura DeFazio, Training Supervisor at L&N Federal CU, was featured on the cover of HR Professionals magazine. DeFazio began serving on the board of the Louisville Society for Human Resources Management (LSHRM) 5 years ago. Her term of President of the board of LSHRM will end at the close of 2017.
During her time as President, Laura has rebranded the Louisville chapter of LSHRM and has overseen the developments of both their website and comprehensive marketing strategy.
In addition, DeFazio continues work on what is known as Bridging the Talent Gap which hopes to help employers recruit and retain top talent in Louisville. Laura DeFazio’s involvement with this project and with LSHRM follows alongside L&N’s mission statement to build permanent relationships as she advocates for not only the Louisville area but the credit union as well.
For the 10th year, L&N employees help raise funds for Norton Children’s Hospital Foundation by volunteering their time and/or decorating holiday greenery for the Festival of Trees and Lights. L&N employees provided 11 beautifully decorated trees and wreaths to support this tremendous community driven event.
For the second year, the team at L&N’s Middletown, KY Branch worked with the Eastwood Fire Department, and other area businesses, to collect canned goods and requested items for Uspiritus. The combined effort of everyone has certainly helped make a positive difference in our community.
Service One Credit Union, Bowling Green, KY announces the retirement of President/CEO Garth Griese on December 31, 2017, after five years of service. Under his guidance, Service One has grown from $117 million to $156 million in assets.
Garth has been involved in the credit union movement for more than 30 years. He held the positions of CEO, CFO and COO of credit unions in Michigan, Wisconsin, Tennessee and Arizona.
Current EVP and Chief Operating Officer, Rebecca Stone has been appointed President/CEO by the Board of Directors and will assume her position on January 1, 2018.
Rebecca Stone relocated to Bowling Green, Kentucky from Corpus Christi Texas where she was EVP-Chief Funding Officer of Kleberg Bank. She has over 25 years of financial institution experience in operations, product development and service delivery. Stone has also taught in a community college setting and has knowledge of Mortgage, Retail and Business Management. Rebecca believes in the delivery of consistent superior service and offering the best financial solutions to members of Service One.
Service One was recently named Best Bank/Credit Union by the Bowling Green Community. The Best of Bowling Green contest is held every year and conducted by the BG Daily News, a local newspaper in the Bowling Green area.
In August, readers of the newspaper were invited to nominate their favorites around Bowling Green in over 100 different categories. In September, the top three nominees in each category were then voted on by the readers to determine the best. Service One is pleased to have this honor as they strive to offer a better banking alternative to South Central Kentucky.
Service One’s main mission is to help members realize their financial dreams. This honor proves that they are staying on their path to offering a better life experience…One person at a time!
There has been a lot of focus on FinCEN's new beneficial owner of legal entities requirements going into effect in five months. There has been less focus on FinCEN's 5 new requirements for your anti-money laundering program, which include:
- A system of internal controls to assure ongoing compliance;
- Independent testing for compliance to be conducted by credit union personnel or outside parties;
- Designation of an individual or individuals responsible for coordinating and monitoring day-to-day compliance;
- Training for appropriate personnel; and
- Appropriate risk-based procedures for conducting ongoing member due diligence.
There has been less discussion of these requirements because four of them have been required by NCUA's Part 748 for many years, and the fifth has been considered implicit in the federal regulators' BSA/AML Examination Manual, and necessary to satisfy your suspicious activity reporting (SAR) obligations.
But let's take a closer at that 5th new requirement and what FinCEN will require you to explicitly include in your anti-money laundering programs by May 11, 2018.
Member Risk Profile: To meet this requirement you must develop a member risk profile, which means understanding the nature and purpose of your member relationship in order to provide a baseline against which your member's activity is assessed for suspicious activity reporting. This may include self-evident information such as the type of member or type of account, service, or product. It could also include information indicating a possible change in the member's transaction activity or beneficial ownership because such information could be relevant to assessing the risk posed by the member.
This information should be integrated into the credit union's automated monitoring system, if applicable. It may also be used as a means of determining whether a transaction that has been flagged as potentially suspicious is actually suspicious.
SCRA Foreclosure Relief Likely to Change January 1st
The Servicemembers Civil Relief Act ("SCRA") is a federal law that provides certain protections for military members entering active duty. Specifically, Section 303(c) protects an active duty servicemember from foreclosure during his or her term of active duty service and for a period of time thereafter.
When it was originally enacted in 2003, the SCRA voided foreclosures that occurred during a servicemember's term of active duty service and for a period of 90 days thereafter. The Housing and Economic Recovery Act of 2008 temporarily extended this post active duty service protection period from 90 days to 9 months. In 2012, the protection period was further amended, being temporarily extended from 9 months to one year.
By way of the Foreclosure Relief and Extension for Servicemembers Acts of both 2014 and 2015, Congress temporarily maintained the one-year post active duty service protection period. However, the latest extension is set to expire on December 31, 2017. Absent further legislative action, on January 1st, 2018 the protection period will revert to the original 90 days as provided for in the 2003 text of the SCRA.
The 2017 Tax Reform Bill: FAQ on the Deductibility of Home Equity Interest
CUNA Compliance has received several questions as of late regarding how the recently enacted tax reform legislation (H.R. 1) will affect the deductibility of interest for home equity loans and lines of credit going forward. Let's take a closer look, keeping in mind that we are not tax law experts. Members should be advised to consult their tax advisor for further information regarding the deductibility of interest and other charges.
Under the new tax law, is interest on home equity lines of credit (HELOCs) deductible or was that deduction removed?
Section 11043 of the tax bill amends Section 163(h)(3) of the Internal Revenue Code which is found in Title 26 of the United States Code.
It provides that a deduction for interest paid on home equity indebtedness shall not be allowed for taxable years 2018 through 2025. There is no grandfather provision for this disallowance, meaning that the deduction has been temporarily eliminated for ALL home equity indebtedness regardless of when the debt was incurred.
NOTE: Section 11043 also reduces the current $1,000,000 cap on the deductibility of interest for acquisition indebtedness to $750,000. However, acquisition indebtedness incurred before December 15, 2017, is grandfathered at the $1,000,000 limit.