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.

League Updates

CUNA Announcements

Educational Opportunities

Credit Union News

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Compliance Updates

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A Message from the President 

Financial well-being for all. What exactly does that mean? What I’ve come to know in the last few months is that it isn’t just financial literacy or financial education. Financial literacy is certainly one very big component but financial well-being encompasses so much more.

The National Credit Union Foundation and CUNA are taking a lead role in educating the system and communities across the country on what it means and how we can make a difference. According to the Consumer Financial Protection Bureau, financial well-being means how much your financial situation and money choices provide you with security and freedom of choice. They go on to explore control, capacity, choice and goals. They describe control as having control over your day-to-day and month-to-month finances, capacity as being able to absorb a financial shock, choice as having the financial freedom to make choices to enjoy life and goals as being on track to meet your goals.

The National Credit Union Foundation describes it this way: “It’s what I do with my money and how I feel about my money.” Whichever definition you lean toward, the bottom line is that no two people are in the same place regarding their financial well-being.

People assume the more money you make, the better off you must be. Probably most of the time this is true; however, making a lot of money and managing that money are two different things. People also assume that if someone doesn’t make a lot of money they must be struggling. Again, someone making little can know how to budget and manage the little and be comfortable.

Where do you think most of your members are regarding financial well-being? How about your employees? Research sponsored by PSCU and Members Development Co. revealed that 60% of credit union members are struggling financially and 60% of credit union employees are struggling financially (article courtesy of CU Today, April 22, 2021, written by Brenton Peck). So, what is the solution?

The National Credit Union Foundation states a 3-pronged process: Measure – know your people, Take Action – Build Your Strategy and Connect – Financial Well-Being and Your Community. Meeting your members and your staff where they are and helping them to do life, one step at a time.

Sincerely,
Debbie Painter
League President

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Governmental Affairs Update

April brought with it the end of the 2021 Regular Session of the Kentucky General Assembly. With that end came another unprecedented pandemic year budget passed by the state legislature, one focused mainly on mitigating any negative economic impacts from COVID-19 and, at the same time, on making a smart and impactful use of the monetary aid given to the state through federal COVID-19 relief legislation. 

On the federal level, April seemed to show a symbolic shift away from the narrow focus on directing the response to the public health and economic impacts of COVID-19 toward a more wide scope of focus including a wide range of issues from regulating “Big-Tech” to infrastructure and competition with China.  Rest assured that through all of this, your League remains dialed in and working hard to advance the interests of all our Member Credit Unions.

Sincerely,

Kyle Hagerty, CUCE
Director of PR & Governmental Affairs

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Credit union membership just got sweeter!

Members can now purchase discounted Kentucky Kingdom tickets through their credit unions

As the weather begins to warm up, more and more will be looking forward to enjoying outside activities.  This is the perfect opportunity to remind you of our partnership with Kentucky Kingdom & Hurricane Bay.  

We are happy to be able to work with Kentucky Kingdom & Hurricane Bay once again to help your credit union offer another “perk” to credit union membership.  With in-branch flyers and online web banners already available for your use, your members can simply click and purchase their deeply discounted tickets.      

PLUS:

  • This service is of NO CHARGE to your credit union.
  • It drives TRAFFIC to your credit union's website.
  • It is a great VALUE-ADD to credit union membership.
  • It is LESS labor-intensive with no physical tickets to count. 

For more information, or to start marketing this partnership to your members, visit https://www.kycul.org/e-consignment-store-marketing or contact Andrew Barr at (502) 855-8208 or [email protected].

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CU PolicyPro has Launched!

Why CU PolicyPro? 

If your credit union is getting bombarded with new and changing regulations and you’re not quite sure how to smoothly incorporate them into your daily operations, CU PolicyPro can help make your life easier.

CU PolicyPro contains over 230 comprehensive model policies designed for credit unions to customize to your credit union’s individual operations. The format is clear and easy to use so you can find the information you need when you need it.

Because laws and regulations change, CU PolicyPro continually researches relevant developments and updates the model policy language to help you keep your policies current. CU PolicyPro is provided to member credit unions by the (League) in partnership with League InfoSight.

System Features Include:

  • Easy-to-navigate design helps users easily find, view and print policies
  • Policy Review Assignments with email reminders of upcoming (and overdue) assignments
  • Enhanced user access, allowing admins to assign editing rights down to the policy level
  • Upload, organize and assign rights to documents
  • View model policy content while editing your own policy
  • Alerts of new model policy content updates
  • Track Changes feature allows credit unions to document changes for staff, board or examiners
  • Knowledgeable and friendly support staff are available to assist with technical support, compliance questions, or general best practices and tips for using CU PolicyPro
REQUEST ACCESS

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Congratulations to the following Kentucky credit unions on their Diamond Awards!

The CUNA Diamond Awards is the most representative competition attracting 1,200+ entries every year. The mission of the CUNA Marketing & Business Development Council’s Diamond Awards is to recognize and reward the creative spirit of excellence in the credit union industry. 

  • Abound Credit Union, Radcliff, KY
  • Commonwealth Credit Union, Frankfort, KY
  • Expree Credit Union, Frankfort, KY 

See the full list of winners.

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CUNA and Kentucky Awards are now OPEN!

Kentucky’s credit unions do amazing things every day for their members and their communities.  Each year, we recognize those achievements at a banquet during our Annual Convention.  Below is a description of the awards available for nominations.  To read more about each award, or to make a nomination, please click on one of the links below.

CUNA Awards

Administered by the Kentucky Credit Union League & Affiliates and CUNA, the Louise Herring, Dora Maxwell and Alphonse Desjardins awards programs are a wonderful way for credit unions to showcase all the great things they do for their members and their communities.

Below you'll find a brief description of each of the programs:

Louise Herring Award
The purpose of this award is to promote credit union philosophy by formally recognizing credit unions that demonstrate in an extraordinary way the practical application of that philosophy for their members.

Dora Maxwell Award
The purpose of this award is to promote social responsibility among credit unions by formally recognizing their community service achievements.

Alphonse Desjardins Award
Alphonse Desjardins was a credit union pioneer who was instrumental in forming the Canadian and U.S. credit union movements. Besides helping to found the first credit unions in Canada and the U.S., Desjardins pioneered youth savings clubs and in-school "banks", known as caisses scolaires. This award honors leadership within the credit union movement on behalf of youth and adult financial literacy.

In an effort to streamline the submission process for our member credit unions and to reduce financial and human resources spent on the submission process, CUNA and the Leagues have collaborated to produce one standardized format and online submission process for our member credit unions.

Submission Instructions
You will automatically establish an account when you create an application to submit your first project by clicking on the designated link below. You may save your work and return to the submission site as often as needed as long as you complete and submit all parts of the project submission by the due date of June 1, 2021. State winners will advance to the national competition for judging.

KY Homepage

KY Louise Herring

KY Dora Maxwell

KY Desjardins

Kentucky Recognition Awards

Your League sponsors several different award categories to recognize the achievements of individuals, credit unions, and chapters in Kentucky.  There is no fee to submit an award. All affiliated credit unions, their employees, and volunteers are encouraged to participate.  

Learn more about the award categories.  Submit nominations by June 1st. 

If you have any questions on awards, you may contact Sabrina Orkies at the League Office at [email protected].

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CUNA Mutual Group Pledges Up to $1 Million to World Council of Credit Unions

Industry leader to provide dollar-for-dollar matching grant of peer donations

CUNA Mutual Group, the largest international provider of insurance and retirement services to credit unions, has committed to give World Council of Credit Unions up to $1 million to support its work to champion and grow credit unions and cooperative finance worldwide.

CUNA Mutual Group will provide a matching grant based on the amount of 2021 donations that come into Worldwide Foundation for Credit Unions—the fundraising and engagement arm of World Council. For every dollar donated to the Worldwide Foundation, CUNA Mutual Group will give one dollar to World Council.

“We are overwhelmed by this generous show of support from CUNA Mutual Group. As one of World Council’s oldest members—and the largest annual donor to our Worldwide Foundation—they have long demonstrated their commitment to the work we do to support the international credit union movement,” said Brian Branch, World Council President and CEO.

Originally beginning operations in 1971, World Council is celebrating its 50th anniversary in 2021. CUNA Mutual Group’s contribution will position World Council to successfully support credit unions in growing economies by promoting financial inclusion, strengthening institutions, and providing policy and regulatory support for the next 50 years.

“We believe a brighter financial future should be accessible to everyone,” said Robert N. Trunzo, President and CEO of CUNA Mutual Group. “The World Council’s work to support credit unions and their members is a crucial part of ensuring that access for people around the world. We are committed to supporting this work and encourage others to do the same.”

Trunzo is challenging credit unions, CUSOs and individuals in our industry to help the Worldwide Foundation meet its 2021 Bridge the Gap campaign goal of $1.7 million—thereby ensuring CUNA Mutual Group fulfills its $1 million commitment to World Council.

“CUNA Mutual Group has provided a unique opportunity for us to help advance credit unions worldwide. This challenge calls on other industry leaders to engage and support credit unions that face glaring digital, safety, gender and leadership gaps worldwide. If this challenge is answered, we all will be that much closer to achieving our purpose of transforming a billion member lives worldwide,” said Mike Reuter, Executive Director of Worldwide Foundation for Credit Unions.

To accept CUNA Mutual Group’s challenge and donate to Worldwide Foundation for Credit Unions’ Bridge the Gap campaign, visit the 2021 CUNA Mutual Group Challenge homepage.

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Nominations being sought for awards presented by two CUNA Councils

Nominations for honors awarded by CUNA Operations & Member Experience Council and CUNA Technology Council are now open.

“This is an opportunity to let everyone know about the outstanding accomplishments and to celebrate the work you or a colleague accomplished this past year,” said Brad Aspgren, OME Awards Chair and SVP Operations, American Airlines Federal Credit Union. 

CUNA Operations & Member Experience Council awards are: 

  • Excellence in Operations & Member Experience
  • Professional of the Year
  • Rising Star 

“Credit unions do some really amazing things but we rarely tell anyone about it! Shout it from the rooftops! Maybe your entry or award will help other credit unions see what is possible,” said Becky Reed, CEO of Lone Star Credit Union and past Excellence Award winner.  

CUNA Technology Council awards are: 

  • Excellence in Technology
  • Professional of the Year
  • Rising Star 

Nomination and entry materials submission deadlines vary by award with nominations deadline for Professional of the Year happening on June 28. Award winners will be announced at CUNA Operations & Member Experience Council and CUNA Technology Council Virtual Conference in September.

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Nominations open for Credit Union Rock Stars

Each year, Credit Union Magazine recognizes the credit union movement’s Rock Stars: Those unique, innovative, and creative people who excel in their areas of expertise—and by doing so make our movement a better, more interesting place.

It’s time to nominate the 2021 class of Credit Union Rock Stars. 

In 2020, we honored 39 Credit Union Rock Stars—but we know there are many more. Use the form below to nominate a 2021 Credit Union Rock Star. 

We'll feature those selected as Credit Union Rock Stars in a special digital campaign sponsored by Fiserv.

SUBMIT A NOMINATION

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Education & Training News

Happy Spring! 

With blooming flowers and new growth sprouting all around, it is a great reminder to take a look at how your credit union is growing. Are you up to date on staff training? Are there areas that may need some attention? The League is here to help! 

We offer BSA Training as a complimentary service to our member credit unions and we have a variety of sales and service training available. Want to learn more? Give me a call at 502-855-8202 or send a message to: [email protected]

Coming up in this quarter, the League will be hosting a symposium for Chapter Officials, Compliance Training (virtually) on June 9, and continuing preparations for the Annual Meeting (in person) in August! We look forward to seeing you at an event or hosting an event for your team soon.

Sincerely,
Katie Means
Director of Education

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Board & Committee Learning Loft

The Board & Committee Learning Loft is a new, informal virtual learning experience created with credit union volunteers in mind.  Join us periodically for special sessions on a variety of topics pertinent to your volunteer leadership role at your credit union.

The Importance of Advocacy and How Volunteers Can Get Involved 

When: May 11, 2021
Time: 4:00 p.m. – 5:30 p.m. EST (3:00 p.m. - 4:30 p.m. CST)
Where: Virtual Learning Experience
 

The May meeting will focus on the importance of advocacy across the credit union spectrum and how Volunteers can be engaged in the advocacy process.  Leadership starts at the Board level and moves downward into the organization.  Volunteers are essential in leading the way with being engaged at the federal and state level with lawmakers that make decisions every day that effects a credit union’s operation.  Having a volunteer help in molding and building the relationship between a lawmaker and our industry is one of the most important things a board member can do. 

Speakers: 

  • Richard Gose, Chief Political Officer, CUNA
  • Gary Chizmadia, Chair of CUNA’s Volunteer Leadership Committee
  • Representative Danny Bentley 

CLICK HERE FOR MORE INFORMATION OR TO REGISTER

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Regulatory Compliance Mini-Workshop

June 9, 2021 | Virtual Learning Experience

We know your time is valuable... But Compliance is necessary. 

That is why we are excited to offer a half-day workshop on Regulatory Compliance Hot Topics. 

Morning Session: 9:00 a.m. - Noon 
Afternoon Session: 1:00 p.m. - 4:00 p.m.

Educational Investment: $99 per person per session 

MORE DETAILS COMING SOON

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Mortgage Loan Originator Training 

Kentucky Credit Union League Office
5111 Commerce Crossings Drive, Suite 210
Louisville, KY 40229  

Choose from two dates: 
Wednesday, September 29 OR Thursday, September 30

Time: 9:00 a.m. - 4:00 p.m. 

Educational Investment: $249 per participant 

Join Regulatory Compliance Counsel Michael Christians for a comprehensive overview of the mortgage loan origination process. 

MORE DETAILS COMING SOON

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Save the Date for these Signature Events

The Kentucky Credit Union League is closely monitoring the latest developments related to COVID-19 and is following guidance from the Centers for Disease Control (CDC) and information from local government and health authorities. At this time, the following events are scheduled to happen in-person. 

 

 

VISION 2021 – Annual Meeting & Convention

August 25-27, 2021 | Omni Louisville Hotel | Louisville, KY 

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

Vision 2021 – the League’s Annual Meeting and Convention features a comprehensive agenda on top-of-mind issues, the Members’ Business Meeting, a golf scramble, 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.


ATTENDEE INFORMATION
EXHIBITOR INFORMATION 

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Board & Committee Leadership Conference

October 14-16, 2021 | Gatlinburg Convention Center | Gatlinburg, TN 

Make plans to join your peers for an education conference designed just for credit union volunteers. The 2021 Board & Committee Leadership Conference (Formerly Volunteer Leaders Conference) is set for October 14-16 in beautiful Gatlinburg, TN and features a full range of informative sessions on critical, timely issues, with first-rate speakers.  

MORE DETAILS COMING SOON

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2021 SRCUS registration now open!

Registration is now open for the 2021 session of the Southeast CUNA Management School! Although many things have changed in the past year, our commitment to providing an outstanding educational experience for credit union professionals remains strong! Here’s what you need to know for this year’s upcoming program…

  • Registration is open now! Click here to register.
  • The program will be held online from June 7 – 11, 2021. Students will also complete 10 to 15 hours of self-paced coursework during the two-week period prior to June 7. Click here for a tentative schedule.
  • The registration deadline for the 2021 program is Friday, May 21, 2021; registrations will not be accepted after this date.
  • The cost to attend is $1,645 - BUT we are giving away FREE money!  Contact Katie Means to for more information on how you can get a partial scholarship to help with the cost to attend.
  • If you were previously registered for the 2020 session, you will not need to re-register as your registration will automatically be transferred to the 2021 session and you will receive a refund for the difference in your registration fee ($500). If you were previously registered for the 2020 session and you are not planning to attend in 2021, you will need to contact the Georgia Center directly to cancel your registration.

Need more info? Contact us!

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Abound Celebrates National Financial Capability Month 

April 2021 is National Financial Capability Month, an evolution of National Financial Literacy Month which was designated by Congress in 2004. Abound is proud to join federal and state agencies, schools, nonprofit organizations, businesses, and other entities in this initiative to raise awareness about the importance of financial literacy education in the United States.   

“Abound’s mission is to improve our members’ lives and building financial capability does just that,” says Ray Springsteen, President and CEO of Abound Credit Union. “Our daily work with Kentuckians often uncovers opportunities to significantly reduce high interest rates and high monthly payments that are a consequence of a lack of financial education.”  

Abound has expanded its financial education programs in recent years to reach thousands of local students from elementary through high school and connect with veterans and adults of all ages. Beyond partnering with local K-12 public schools, the Credit Union recently launched a new after-care financial education program on Fort Knox and has worked closely with ECTC and Campbellsville University to offer financial education to college freshmen.  

Abound is also supporting the efforts of the Omicron Nu Lambda Education Foundation and launched financial wellness webinars earlier this year with Baptist Health Hardin and Robley Rex Veterans Hospital with archived content available on Abound’s YouTube Channel.  

In addition to the financial education and training provided for students and other specific groups, Abound Credit Union offers free online learning tools and resources for all at www.aboundcu.com.  

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Commonwealth Credit Union’s Karen Maxfield Named HR Professional of the Year

CUNA recently named its Human Resources & Organizational Development Council’s Professional of the Year Award and Commonwealth Credit Union’s Chief Human Resources Officer, Karen Maxfield, was bestowed this prestigious honor. 

Karen has been bettering lives at Commonwealth Credit Union since 1994, and the impact she has made is immeasurable. Karen exudes professionalism, and she lives our mission of bettering lives through our passion to serve. Her care for others is unmatched, and she is a driving force behind our Team 1 culture. 

We want to send out a big congratulations to Karen! We’re so glad you’re part of our family here at Commonwealth Credit Union.

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Commonwealth Credit Union Donates $1 Million to Renovate University of Louisville’s Cardinal Cupboard

The University of Louisville and Commonwealth Credit Union have partnered together to renovate the university’s Cardinal Cupboard, which is the student-run food-panty. The $1 million dollar donation will be used to do major renovations to the Cardinal Cupboard, pay student workers for the pantry, as well as provide student scholarships. The Cupboard helps students fight the barrier of food insecurity while they strive to achieve their dreams of higher education. Commonwealth Credit Union has been the university's official credit union since 2015, serving as a full-service financial partner for students, faculty, staff, and alumni. 

“The guiding principle and mission of Commonwealth Credit Union is bettering lives. That is why this partnership with the Cardinal Cupboard aligns so well, we have similar missions,” says Commonwealth Credit Union President/CEO, Karen Harbin. “The students of the University of Louisville should only be hungry to learn, not hungry for food.” 

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KIT teams up with Roo’s Wish

KIT Federal Credit Union is very excited to announce they are teaming up with Roo’s Wish for a local community project to make a difference and add some encouragement for foster kids that are graduating from High School and moving on to their future endeavors. 

KIT wants to fulfill their wish to gift 65 graduates a backpack filled with many goodies to congratulate them on their achievements and hard work, especially with the hardships 2020 brought. 

Requested Items: 

  • Snacks
  • Boxed food
  • Tumbler
  • Travel size laundry detergent
  • Fabric softener
  • Travel size lotion
  • Toothpaste
  • Shower gel
  • Deodorant
  • Shampoo/Conditioner
  • Fleece blanket
  • Graduation themed trinkets (i.e 2021 keychains, graduation stickers)
  • Feminine pads/tampons 

A wish list has also been created on Amazon at https://amazon.com/hz/wishlist/ls/FE0HV9V8ZPW4?ref_=wl_share

All donations can be sent to: 

KIT FCU
9711 Linn Station Road
Louisville, KY 40223

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Cheryl Deborde named Credit Union Hero of the Year 

Award recognizes a professional who demonstrates credit union values. 

The winner of Credit Union Magazine’s 14th annual Credit Union Hero of the Year Award is Cheryl Deborde, president/CEO of Members Choice Credit Union, Ashland, Ky. The award, sponsored by Symitar, recognizes a future-focused credit union professional for exemplifying the credit union philosophy of “people helping people.” 

“Credit Union Heroes always reflect a commitment to the community beyond the doors of the credit union,” says Todd Spiczenski, CUNA chief products and services officer. “Members Choice President/CEO Cheryl Deborde is no exception, with her passion for helping people and not expecting anything in return. She’s the perfect example of what a Credit Union Hero should be.” 

“Cheryl Deborde at Members Choice deserves to be recognized as a Credit Union Hero for her commitment to taking care of people through service and financial education,” says Shanon McLachlan, president of Symitar. “Leaders like Cheryl are why people choose credit unions; they appreciate the hands-on, people-first approach to banking and support for their community. The industry’s people-helping-people philosophy is not only about giving back but educating the community on how to make a real difference in their financial lives like Members Choice has.” 

Other heroes are:

Read about the contributions of Deborde and the other Credit Union Heroes at news.cuna.org/cuhero.

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Additional $2.2 million available in small business COVID-19 assistance

City enters into agreement with Park Community Credit Union to administer loans and grants 

Louisville Metro Government (LMG) has entered into an agreement with Park Community Credit Union that will administer a $2.2 million fund to assist small businesses, which have been financially impacted by the COVID-19 pandemic. The funds have been made available through federal Community Development Block Grant dollars. 

“COVID-19 was not in anyone’s business plan, especially our small businesses, which are so vital to our city’s culture and economic momentum,” said Mayor Greg Fischer. “This fund can help local businesses we all love to sustain their operations as we continue to battle this virus. The fund was specifically designed with equity in mind, and I would like to thank Park Community Credit Union, a terrific community partner with experience working in disinvested neighborhoods, for joining us in distributing these federal dollars.” 

Approximately 50% of total funds will be distributed as grants to small businesses located in and/or predominantly serving west Louisville, Smoketown and Shelby Park. The remaining half will be distributed as loans to any small business located in Louisville. Minority-owned and women-owned enterprises will be given a preference for loans and grants. Both the grants and loan products will be available to businesses that qualify on a first-come, first-served basis. Loans will be available from $5,000 to $150,000 with a maximum term of 84 months and a fixed rate of .75% APR. Grants will be offered up to $50,000. 

“Park Community is honored to be entrusted with these small business COVID-19 assistance funds from Louisville Metro Government,” said Jim Spradlin, President & CEO of Park Community Credit Union. “It has long been our mission to make fair and affordable financial services, products and education to all communities across Kentucky. Our goal is to provide monies in the form of grants and low-interest loans in response to the stress COVID-19 has taken on business owners, retailers and workforce. We want to invest in long-term impact for Louisville’s small business community.” 

Small businesses, for the purposes of this fund, are defined as businesses with less than 300 employees and less than $20 million average annual revenue. Funds must be used to sustain business operations (payroll, rent, utilities, etc.). 

The application window opened on Monday, March 29. To apply for a loan or grant, applicants should visit https://parkcommunity.com/smallbusiness/ to fill out an interest form. Grant and loan applicants should provide, among other things, a funding request and how the funds will be spent; supporting financial documents; and a summary of the applicant’s business and how COVID-19 has affected operations and staffing. Grant applicants should provide a letter of reference from a community member. 

In addition to this $2.2 million fund, LMG has administered nearly $30 million in loans and grants to 894 small businesses for COVID-19 relief and assistance. More information can be found here: https://louisvilleky.gov/government/louisville-forward/covid-19-relief-grants-andloans.

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AARP Recognizes Service One for Efforts to Protect Members

Service One is always looking for new ways to protect its members against financial exploitation and fraud. AARP reports that thousands of older Americans are victim of financial exploitation every day with each victim loses on average more than $120,000. Service One works diligently to safeguard our members by training our associates and adopting practices in the fight against financial exploitation. 

We are pleased to announce that Service One associates have completed training through AARP’s award-winning BankSafe platform in which they can recognize, prevent and report suspected financial exploitation. As a result, Service One was awarded the AARP BankSafe Trained Seal for their efforts.

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Pandemic Has Had Pronounced Effect In a Short Time on How People Pay Their Debts, TransUnion Analysis Finds

The COVID-19 pandemic had a pronounced effect – in a short period of time – on how people paid their debts, particularly when faced with financial stress, according to a new TransUnion study. 

The study, Global Payment Hierarchy study, found in the United States, the changes were prominent across multiple credit products, with consumers clearly prioritizing their mortgage loan payments over auto loans and credit cards. 

“TransUnion has tracked payment hierarchy dynamics for more than a decade, including how these patterns changed in the U.S. following the Great Recession and in many other countries when they have encountered localized financial challenges,” said Charlie Wise, head of global research and consulting at TransUnion. “This study is unique in that it highlights how and why payment dynamics changed in different countries as a result of the COVID-19 pandemic – a global crisis that has impacted consumers worldwide. These insights will better equip both financial institutions and consumers, fostering more trustworthy interactions between them as the world begins to normalize and recover from the pandemic.”

Credit Cards v. Personal Loans

TransUnion said it analyzed and compared trends for wallet profiles that are popular across the countries studied, including the United States, Canada, Colombia, India and South Africa. 

The study observed within each country those consumers with one or more credit cards and at least one personal loan, to identify if any changes took place in the payment hierarchy, TransUnion said. To determine which credit product was prioritized over the other, TransUnion observed payment performance of the credit products over a 12-month time period, including whether or not one of the credit cards or personal loans went at least 30 days delinquent. 

In the U.S., the study observed that personal loans were prioritized when consumers possessed multiple credit cards, though the gap between delinquency rates—indicating the degree of preference—narrowed during the pandemic,” TransUnion reported. “Similar trends were seen in Canada and India, which suggests that credit cards took on increased importance during the pandemic and that consumers were more focused on keeping their cards in good standing by making timely payments.” 

A flip in the payment hierarchy happened during the pandemic in South Africa as credit cards were prioritized over personal loans, reversing the pre-pandemic hierarchy in favor of personal loans. Colombian credit usage showed no clear prioritization of either product until March 2020, when more value was placed on personal loans, according to TransUnion. 

‘Interesting Dynamic’

An interesting dynamic occurred in the U.S. and other countries wherein the payment hierarchy flipped for those consumers possessing only one credit card and at least one personal loan,” according to the TransUnion analysis. “In those cases, credit cards were prioritized during the pandemic, in contrast to the pre-pandemic preference for personal loans. In the U.S., this particular group comprised approximately 20% of the overall study population. This shift further demonstrates the increased importance of credit cards for consumers during the pandemic and the need to maintain access to this valuable source of credit. For those consumers with at least one credit card and at least one personal loan, on average, U.S. consumers possess three credit cards and one personal loan.” 

Personal Loans Mostly Prioritized Over Credit Cards…

Credit Product 30+ DPD Rate*

United States

Canada

Colombia

India

South Africa

Q3 2020

Credit Cards

1.78%

0.86%

5.26%

6.51%

13.62%

Personal Loans

1.11%

0.51%

4.62%

5.46%

15.30%

Q3 2019

Credit Cards

2.94%

1.41%

3.35%

5.03%

14.03%

Personal Loans

1.49%

0.51%

3.57%

3.01%

12.90%

*30 or more day delinquency rate at 12 months for consumers who possess at least one credit card and personal loan.

 

…But Dynamic Shifts if Consumers Only Possess One Credit Card

Credit Product 30+ DPD Rate**

United States

Canada

Colombia

India

South Africa

Q3 2020

Credit Card

1.48%

1.11%

3.30%

4.68%

11.81%

Personal Loans

1.66%

0.79%

5.86%

5.76%

16.81%

Q3 2019

Credit Card

2.62%

1.89%

2.63%

4.19%

12.18%

Personal Loans

2.36%

0.78%

5.11%

3.32%

14.48%

**30 or more day delinquency rate at 12 months for consumers who possess one credit card and personal loan.

Cash Not King

“Cash was clearly not king during the early parts of the pandemic. Millions of people opted to use their credit cards to make digital transactions from the safety of their home for groceries, clothes or other everyday items,” said Matt Komos, TransUnion’s head of research and consulting in the U.S. “If you only have one credit card and you were worried about visiting stores at the height of the pandemic, there’s a strong likelihood you will preserve that card to continue spending and making digital transactions. If you possess three cards, though, it’s far more likely that you will go delinquent on one of them before you do so with a personal loan if you are facing financial hardship, as many consumers can continue to get by as long as they have access to at least one card.”

These findings were corroborated by a global survey of 2,667 consumers who possessed credit products in Brazil, Canada, Colombia, Hong Kong, India, South Africa, the United Kingdom and the United States. Consumers across the globe recognized that there will be consequences if they miss at least one payment of any of their credit products, TransUnion said. For instance, more than half (53%) of global respondents with a credit card said they expected to receive a call from their lender if they missed one payment. 

Understanding the Negatives

The negative implication of a missed payment to a credit score was understood most by credit card and personal loan holders. Approximately 68% of credit card holders and 65% of consumers with personal loans said a consequence of a missed payment would result in a lower credit score, TransUnion said.  Comparatively, consumers with auto loans (55%) and mortgages (57%) were not as aware of this consequence. 

The Deeper Dive: Mortgage is Priority #1 

In the U.S., TransUnion reported it also conducted a payment hierarchy study focusing on the three most popular credit products in the country – auto loans, credit cards and mortgages. Approximately 27.8 million consumers held all three loans as of Q3 2020, and mortgages were clearly prioritized over the other credit products. This dynamic has held true since Q4 2017. 

“The pandemic, though, has caused even greater prioritization of mortgages over the other credit products,” TransUnion stated. “For those consumers possessing auto loans, credit cards, and mortgages, the 30+ days past due delinquency rate at 12 months following observation was lowest for mortgages, at 0.75%, as of Q3 2020. Auto loans had the second lowest delinquency rate at 1.13%, followed by credit cards at 1.95%. This is very likely connected to the growth in home prices over the last several years as housing markets across the country have remained strong, and consumers’ desire to protect the equity in their homes. As well, as lockdowns and the shift to work/school from home permeated during the pandemic, keeping current on home loan payments took on increased importance in 2020.” 

Consumers Prioritizing Mortgages Above All Other Major Credit Products

Credit Product 30+ DPD Rate** - Timeframe

 

 

Q3 2020

Q3 2019

 

 

Q3 2018

 

 

Q3 2017

Q3 2016

Auto Loans

1.13%

1.42%

1.37%

1.37%

1.23%

Credit Cards

1.95%

2.62%

2.40%

2.41%

2.12%

Mortgage Loans

0.75%

1.28%

1.29%

1.40%

1.34%

**30+ days past due rate at 12 months for those borrowers possessing all three credit products. 

‘Not the Same Effect’

“Mortgage is once again the clear priority for U.S. borrowers,” said Komos. “The mantra, ‘you can’t drive your home to work’ doesn’t have the same effect when millions of Americans are waking up, showering, eating breakfast and taking only a few steps to their home office.” 

In addition to more people working from home and rising home values, mortgage loan performance is likely benefitting from thousands of mortgage borrowers entering accommodation programs soon after the onset of the pandemic, TransUnion said, adding the study points to both subprime and near prime credit risk mortgage borrowers benefitting the most from these programs as they were able to delay payments and maintain their accounts. 

“Similar to the global study comparing credit card and personal loan performance, prioritization of payments shifted if a consumer possessed only one card. Of the 27.8 million U.S. consumers in the study possessing an auto loan, credit card and mortgage, only 5.3 million people had one credit card in their wallet,” TransUnion said. “For this subset of the population, mortgage remains the clear priority, but consumers with only one credit card valued it more than their auto loan beginning in Q2 2020. This shift suggests the heightened importance of maintaining access to at least one credit card as online commerce and digital transactions have become a daily necessity for many U.S. households.” 

According to TransUnion, survey data highlight that U.S. consumers valued their mortgages over other loans because the credit product has the highest perceived value of all expenses. Furthermore, six in 10 U.S. consumers expected to receive a call from their lender if they missed one mortgage payment and more than half (52%) said their missed payment would have a negative impact to their credit score. 

Nearly one in five consumers (17%) said they would experience foreclosure or their home would be repossessed if they miss a mortgage payment, TransUnion added. 

Source: CUToday

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Credit Union Boards Face Challenging Times

Ask board members the right questions to help them navigate increasingly difficult work and mounting stress. 

By Stuart R. Levine, Chair and CEO for Stuart Levine & Associates LLC

Today’s environment just might be the most challenging one that credit union boards have faced in modern memory. The pressures of serving on volunteer credit union boards are extremely high. Just like their counterparts on paid boards at for-profit companies, credit union boards have a major fiduciary responsibility, without the attendant compensation and often without appropriate recognition. Yet like their for-profit counterparts, they govern substantial financial organizations and are responsible for managing capital risk. 

Credit union board members are industry heroes. They assure member service and financial safety through their leadership in good governance. They provide insights into strategic goals. They oversee management of risk, which seems greater today than ever before. Current issues include an intensely competitive environment, often from larger and better funded entities.  Organizational stresses include litigation, regulatory compliance and decisions related to technology and investment capital for hardware, software and cybersecurity protection. 

This is hard work. Every director must ask themselves why they joined the board, and whether they have the capacity to continue serving at the highest of levels. They must consider questions like: 

  1. Do you fully understand current expectations of board service?
  2. Are you clear on the credit union’s mission and statement of purpose?
  3. Do you understand fiduciary duties of care, loyalty and obedience, and are you familiar with your directors and officers (D&O) policy?
  4. Do you understand the charter and workings of each board committee?
  5. Are you prepared to fully participate and engage in both committee and board meetings?
  6. Do you have access to organizational leadership to learn all you need to assess your participation?
  7. Are you satisfied with the “tone at the top” in addressing ethical conduct and compliance with law and regulation?
  8. Does the board have an effective onboarding process? 

Ongoing board service demands additional board member attention. Consider the following: 

  1. Are you fully up to speed on, and given full access to, the organization’s business plan? And do you receive data on member satisfaction?
  2. Is the board fully engaged in Enterprise Risk Management (ERM)?
  3. Do you understand the technological needs and investment requirements for safe and effective operation, including a robust cybersecurity plan?
  4. Do you fully understand the appropriate relationship between board and management?
  5. How effective is the board in assessing the effectiveness and accountability of the C-suite?
  6. Is there a succession plan in place?
  7. Is the board committed to Diversity, Equity & Inclusion (DEI) and Environmental, Social & Governance (ESG) awareness?
  8. Do you review the impact associated with reputational risk and your continuing service on the credit union board?
  9. How effectively do you participate in board conversations, and are you comfortable with challenging conversations when you have a different point of view? 

“Duty of Loyalty” requires directors to be well informed to proceed in good faith in making business decisions in the best interest of the organization. Board members must now devote more time, effort and talent to keep themselves fully informed to oversee the credit union’s operations, policies and strategy. 

The attention to “Duty of Care” is also increasing. Do you actively participate in strategic discussions based on diversity and community outreach? Directors know they must act with the care that a person in a like position would reasonably believe is appropriate for members of a governing body in similar circumstances. Pandemic effects, demographic changes and technological disruption are taxing the best minds out there. 

The board’s work is becoming much more difficult, due to factors including the changing market for digital and tech-based services that younger demographics demand. This complex competitive environment requires ever-increasing investments just to stay in the game. Such risks and challenges impact credit unions’ financial standing and for some, it’s about survival. It is increasingly difficult to chart a path forward. 

Compared to the past, service-oriented credit union board members are facing mounting stress. Their decisions go to the heart of delivering safe, secure, state-of-the-art service to members. Many boards are finding that escalating investment requirements are forcing them to choose credit union merger strategies in order to maintain member service and safety. 

These cumulative pressures are causing a growing number of credit unions to seek outside advisors to help board members carry out their duties and responsibilities as they navigate uncharted waters. It often takes a new, trusted voice to make sure that current and potential board members can satisfactorily answer the questions above. The duties of care and loyalty require it.

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HUD Announces $41 Million Funding Opportunity to Provide Stable Housing to Low-Income Persons Living with HIV and their Families

The U.S. Department of Housing and Urban Development (HUD) is making $41 million in Housing Opportunities for Persons with AIDS (HOPWA) competitive funding available to states, local governments, and non-profits through the HOPWA: Housing as an Intervention to Fight AIDS funding opportunity. Housing instability has been a major issue facing many persons living with HIV since the beginning of the epidemic. Achieving and maintaining stable housing can be a powerful structural intervention in ending the HIV/AIDS epidemic. Read HUD's Notice of Funding Opportunity (NOFO)

“We know safe, stable housing is critical for persons living with HIV to best manage their health,” said HUD Secretary Marcia L. Fudge. “This funding will support communities in ensuring our neighbors are able to access housing alongside medical services. We cannot end the HIV/AIDS epidemic without support for housing.” 

Through this NOFO, HUD will provide funding for housing assistance and supportive services for low-income persons living with HIV and their families, coordination and planning activities, and grants management and administration. Selected communities will implement new projects that elevate housing as an effective structural intervention and align with initiatives aimed at ending the HIV/AIDS epidemic. HUD is seeking projects with exemplary and innovative qualities, including community-level coordination, data collection with emphasis on stable housing and positive health outcomes, culturally competent approaches to providing housing and services, and a systemic approach to advance equity in underserved communities that can serve as a national place-based model. 

Projects funded through this HOPWA funding opportunity will achieve six required project objectives: (1) Implement and document housing and services models for low-income persons living with HIV and their families that are innovative and replicable in other similar localities or nationally; (2) Increase alignment with new or existing local initiatives or strategies to end the HIV/AIDS epidemic by elevating housing as an effective structural intervention; (3) Improve coordination among local housing and service providers and use of available community resources; (4) Increase the amount of quality data collected and used for data-driven decision making with an emphasis on stable housing, positive health outcomes, and racial equity; (5) Assess and document replicable practices that ensure equitable access and culturally competent approaches to providing housing and services for subpopulations of persons living with HIV experiencing service gaps; and (6) Prioritize sustainable, effective, and equitable approaches to providing housing and services to persons living with HIV and their families that can be continued past the funded project’s period of performance. 

HUD will publish a pre-application webcast by April 30, 2021 for anyone interested in submitting an application for the HOPWA: Housing as an Intervention to Fight AIDS funding opportunity. The webcast will cover the information in the NOFO. More information on the webcast will be provided through the HUD.gov HOPWA mailing list. To sign up for the mailing list, please visit the HUD.gov HOPWA mailing list subscription page

The HOPWA program is the only Federal program dedicated to addressing the housing needs of persons living with HIV/AIDS and their families. Grantees partner with nonprofit organizations and housing agencies to provide housing and support to program beneficiaries.

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CFPB Proposes Mortgage Servicing Changes to Prevent Wave of COVID-19 Foreclosures

Millions of homeowners expected to exit forbearance in the coming months 

The Consumer Financial Protection Bureau (CFPB) today proposed a set of rule changes intended to help prevent avoidable foreclosures as the emergency federal foreclosure protections expire. Due to the COVID-19 pandemic and ensuing economic crisis, millions of families nationwide have suffered the loss of income and nearly 3 million homeowners are behind on their mortgages. The CFPB’s proposal seeks to ensure that both servicers and borrowers have the tools and time they need to work together to prevent avoidable foreclosures, recognizing that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain. 

“The nation has endured more than a year of a deadly pandemic and a punishing economic crisis. We must not lose sight of the dangers so many consumers still face,” said CFPB Acting Director Dave Uejio. “Millions of families are at risk of losing their homes to foreclosure in the coming months, even as the country opens back up. Last week we warned that servicers need to be prepared for a high volume of borrowers exiting forbearance, and today we are proposing additional guardrails and tools for servicers as they navigate the coming months. We will do everything in our power to ensure servicers work with struggling families to find solutions that prevent avoidable foreclosures.” 

The COVID-19 pandemic and ensuing economic crisis have contributed to widespread housing insecurity across the nation, and many families are at risk of foreclosure when federal emergency protections expire. The number of homeowners behind on their mortgage has doubled since the beginning of the pandemic—6 percent of mortgages were delinquent as of December 2020. More homeowners are behind on their mortgages than at any time since 2010, which was the peak of the Great Recession. Industry data suggest that nearly 1.7 million borrowers will exit forbearance programs in September and the following months, with many of them a year or more behind on their mortgage payments. The CFPB’s proposal, if finalized, would:

  • Give borrowers time: Every one of the nearly 3 million borrowers behind on their mortgages should have a chance to explore ways to resume making payments and avoid foreclosure. To make sure borrowers aren’t rushed into foreclosure when a potentially unprecedented number of borrowers exit forbearance at around the same time this fall, the proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021. The CFPB is seeking public input on that date, as well as whether there are more limited ways to achieve the same purpose. For example, the CFPB is considering whether to permit earlier foreclosures if the servicer has taken certain steps to evaluate the borrower for loss mitigation or made efforts to contact an unresponsive borrower. This provision, like the rest of the proposal, would only apply to loans secured by a borrower’s principal residence.
  • Give servicers options: The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application. Normally, with certain exceptions, Regulation X requires servicers to review a borrower for all available options at once, which can mean borrowers have to submit more documents before a servicer can make a decision. Allowing this flexibility could allow servicers to get borrowers into an affordable mortgage payment faster, with less paperwork for both the servicer and the borrower. This provision would only be available for modifications that do not increase a borrower’s monthly payment and that extend the loan’s term by no more than 40 years from the modification’s effective date.
  • Keep borrowers informed of their options: The CFPB also proposes temporary changes to certain required servicer communications to make sure that, during this crisis, borrowers receive key information about their options at the appropriate time. 

The economic crisis threatens families and communities across the nation. According to the CFPB’s analysis and other data: 

  • Millions of families are at risk of losing their homes: As of February 2021, there were nearly 3 million homeowners behind on their mortgages, with an estimated 2.1 million mortgages in forbearance and at least 90 days delinquent. If current trends continue there may be 1.7 million such loans in September 2021.
  • Preventing foreclosures helps homeowners and communities: Foreclosures are expensive for homeowners, with an average cost to borrowers of at least $12,500. Neighboring homes also lose value, with sales prices dropping by 1 to 1.6 percent after nearby foreclosure sales. Families who endure a foreclosure are likely to suffer other harms as well, including broader financial distress and housing instability.
  • The housing crisis is deepening racial inequality: Black and Hispanic homeowners were more than two times as likely to be behind on housing payments as of December 2020, according to a March CFPB report 

In a compliance bulletin issued last week, the CFPB warned mortgage servicers to dedicate resources and staff to prepare for a surge in requests for assistance. The CFPB will be closely monitoring how servicers engage with borrowers, respond to borrower requests, and process applications for loss mitigation. The CFPB will consider a servicer’s demonstrated effectiveness in helping borrowers in addressing compliance issues that arise.

Given the urgency of the crisis, the CFPB is requesting comments be submitted before May 11, 2021.

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NCUA Board Renews Prompt Corrective Action Relief 

The National Credit Union Administration Board approved, by notation vote, an interim final rule(opens new window) that temporarily modifies certain regulatory requirements to help ensure federally insured credit unions remain operational and able to provide needed financial services during the COVID-19 pandemic. 

“The latest round of stimulus spending has further expanded credit unions’ balance sheets. As a result, many well-run credit unions with positive earnings now have lower net worth ratios,” Chairman Todd M. Harper said. “Given the continued uncertainty with the pandemic and share growth many credit unions are seeing, this targeted, tailored and temporary rule will provide critical relief so eligible credit unions can focus their limited resources on their members’ needs instead of planning for earnings transfers and developing detailed net worth restoration plans.” 

This interim rule is substantially similar to an interim final rule(opens new window) the NCUA Board previously approved in May 2020, which expired at the end of that year. Due to the pandemic’s continued financial and economic disruptions, the Board determined it was necessary to reintroduce these two temporary relief measures related to earnings transfer waivers for adequately capitalized credit unions and net worth restoration plans for certain undercapitalized credit unions. 

“We get it. We understand what’s happening right now,” said Vice Chairman Kyle S. Hauptman. “As credit unions continue to support their members during this difficult time, many are concerned with the challenges they will face if their net worth ratio drops below the well-capitalized level. While the latest round of stimulus is good news for many Americans, these payments accelerate the trends of unprecedented share growth in the last year. Temporarily providing relief from prompt corrective action requirements will allow credit unions to stay focused on serving members.” 

“Because of the pandemic and stimulus, I am concerned that credit unions may temporarily fall below the well-capitalized level and become subject to various prompt corrective action requirements,” Board Member Rodney E. Hood said. “While this temporary relief wasn’t widely utilized last year when it expired, it now appears we need this tool now for credit unions. I thank Chairman Harper for bringing this rule forward to provide relief to credit unions of all sizes that experience a decline in their net worth ratio because of a rapid increase in shares because of the flight to safety.” 

Specifically, the interim final rule makes two temporary changes to the NCUA’s prompt corrective action regulations. The first temporarily reduces the earnings retention requirement for federally insured credit unions classified as adequately capitalized. 

Those credit unions unable to meet the earnings retention requirement will not have to submit a written application requesting approval to decrease their earnings retention amount. However, if a credit union either poses an undue risk to the National Credit Union Share Insurance Fund or exhibits material safety and soundness concerns, the appropriate NCUA Regional Director may require the credit union to submit an earnings transfer waiver request. 

The second change temporarily permits an undercapitalized credit union to submit a streamlined net worth restoration plan if it becomes undercapitalized predominantly because of share growth. If a credit union becomes less than adequately capitalized for reasons other than share growth, it must still submit a net worth restoration plan under the current requirements in NCUA’s regulations. 

These temporary measures will remain in place until March 31, 2022. The interim final rule is effective upon publication in the Federal Register, and there is a 60-day public comment period.

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