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

• A Message from the President

• Governmental Affairs Update

• CU PolicyPro Pre-Registration

• Advocacy. Politics. News. Pandemic.

• Get your Youth Month swag

• Keynoters announced for CUNA Marketing & Business Development Council Virtual Conference

Educational Opportunities

• Mid-Level Management Virtual Series

• We're Giving Away Free Money!

Credit Union News

• ECTC, Abound Credit Union Partner to Launch Military Education Association 

• Women CEOs of smaller credit unions to launch new support system

• Cheryl Deborde Selected as a Finalist for 2021 Credit Union Hero of the Year Award 

• Two Kentucky Credit Unions Plan Merger

• 27 New Certified Credit Union Financial Counselor Designees Named at Members Choice Credit Union

• Northern Kentucky Educators’ Federal CU Name Change

• Service One CU Selected to Participate in FedNow℠ Pilot Program for its Upcoming Real-Time Payments Offering

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Compliance Updates

• Board Approves Joint-Ownership Share Accounts Final Rule

• 4 Trends From 2020 Are Highlighted, Including a New Milestone for Checking Accounts

• CFPB issues updated ATR/QM guidance

• Regulatory agencies issue statement on supervisory practices in wake of Texas storms

Career Opportunities

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A Message from the President 

Be the orchestra!

I don’t think I’m going out on a limb by saying most everyone was ready for 2020 to come to a close. Things were difficult, challenging, and ever-changing. 2020 had most of us closing our eyes and wishing the year away. In my speech at our annual meeting this past August, I encouraged attendees to keep their eyes open but to continue to dream and dream big. Imagine that your best is yet to come. I’m a true believer that we can all do more than we imagine, and we can, even in a pandemic, achieve incredible greatness. Credit unions across the country did just that – they achieved incredible greatness whether they were ready to or not. The industry was pushed way past their comfort zone in so many ways but stepped up and continued to serve their members and communities with class and grace. 

Most of us probably are more comfortable with limiting our imagination and maintaining control of our actions – keeping things simple and comfortable. If 2020 taught us anything, it taught us that limits, control, simple and comfortable don’t apply during a world-wide pandemic. Hopefully, it also taught us that we are much tougher than we ever imagined. We are more flexible than we ever imagined. We are actually very good at achieving the not-so-simple – much better than we ever imagined. And, probably the best lesson is that we have staffs and volunteers that love this industry even more than we ever imagined.

So, how do we maintain this momentum, dream even bigger and take off the limits? I think it’s a matter of realizing we all have a unique and particular part to play in the continued success of our industry. Imagine, if you will, one of the world’s greatest orchestras – varying shapes, types, and sizes of instruments creating different melodic sounds working together to achieve musical greatness. People of different backgrounds, skills, and talents collaborating in harmony toward a unified mission – creating a concert experience like no other, moving the audience to their feet in applause.  However, this greatness didn’t come overnight – it took intentional practice. 

In 2021, credit unions need to be intentional, every day, making a difference unlike any other industry – being the movement that recognizes everyone’s unique role. Credit unions need to continue to build strong relationships inside and outside the credit union walls. Employees, volunteers, credit unions, trade associations, and system partners – we all make up the orchestra.   

The credit union industry needs to continue to be a collective voice pulling together in agreement that our structure allows us to dream big and take the limits off for our members and our communities. Let’s be the orchestra.

Sincerely,
Debbie Painter
League President

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Governmental Affairs Update

February in Kentucky is often a dynamic month, and this year was no exception.  From the week or more of intense winter storms to the Kentucky General Assembly reaching its midpoint in the 2021 legislative session, this February was indeed dynamic. 

The midpoint of the legislative session marks the approximate point when the work of the legislature seems to shift into high gear and the pace of work quickens noticeably. By the end of the month, most of the legislative priorities have been made clear and the deadline for new bills to be introduced has passed.  This allows your League advocacy team to focus on the legislation that is still in play and work aggressively to protect and grow the industry.

On the Federal level, with a new administration in charge of the Executive Branch and a new Democratic majority in the Senate, we remain engaged in the process at all levels.  

Additionally, you should be aware that Governor Beshear recently made the announcement that individuals in Phase 1C (which includes essential employees) can now begin receiving vaccinations at any of the state's “regional vaccination sites” as of March 1^st.   

Please always feel free to reach out to me directly with any questions, feedback or just to say hello, I would love to hear from you.

Sincerely,

Kyle Hagerty, CUCE
Director of PR & Governmental Affairs

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CU PolicyPro Pre-Registration

The Kentucky Credit Union League is excited to bring a offer a new FREE member benefit! CU PolicyPro allows members to select from more than 230 detailed model policies to help manage today's ongoing compliance and operational challenges. Together with InfoSight, your credit union will have at its disposal a comprehensive suite of policies and regulatory compliance guidance written especially for credit unions by legal and financial experts.

Because your credit union is unique, CU PolicyPro not only includes the model policy content, but a full policy management system that lets you customize any model policy to fit your credit union’s individual operations.  Your existing polices can also be added to and maintained within the system.

CU PolicyPro is currently undergoing a full system rebuild to bring more robust policy maintenance tools, including tracked changes, additional auditing tools, update notifications, and enhanced user access. 

We are currently allowing credit unions to pre-register for access to CU PolicyPro. Those pre-registered will receive login and training information via email once the system rebuild is complete and can begin using CU PolicyPro at that time. 

Are you looking for a model policy in the meantime? Contact [email protected] for assistance. 

Note: your CU PolicyPro login will be separate from your InfoSight login. 

All credit union staff who register will be set up initially with "Admin" access. Once the logins are distributed, each credit union can adjust user access as needed. 

PRE-REGISTER YOUR CREDIT UNION

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Advocacy. Politics. News. Pandemic.

This week, we finalized our exciting lineup of keynote speakers for CUNA GAC. Former New Jersey Gov. Chris Christie and former Chicago Mayor Rahm Emanuel round out a lineup of experts on politics, news, social change, and even the current pandemic response.

I’m excited for a lively discussion between Christie and Emanuel on the hottest issues in Washington and how they affect our advocacy moving forward.  

Other speakers include:

• Former National Security Advisor H.R. McMaster will address the importance of leadership and resilience;
• Award-winning journalist, documentarian, and author Soledad O’Brien will share her thoughts on income inequality, the current political landscape, and more; 
• Former FDA Commissioner Dr. Scott Gottlieb will provide insights on how health care policies drive innovation, including developing the COVID-19 vaccine; and 
• Author, speaker, and agent for social change Kevin Carroll will discuss the power of play, innovation, and chasing your dreams.

Of course, our thought-provoking keynote speakers are only part of what’s in store for this year’s CUNA GAC. We have breakout sessions tackling the most pressing credit union issues, unparalleled virtual networking and advocacy opportunities, and much more.

Don’t forget, the first 2,000 registrants will receive a work-from-home kit sponsored by PSCU and be entered to win a Lululemon MIRROR (plus a one-year subscription).  

Get your GAC work-from-home kit

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Get your Youth Month swag 

Attract the attention of young members through Youth Month swag and share the benefits of credit unions with them. The items you can purchase from the member celebrations store is a great way to start that process. 

Get the Swag

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Keynoters announced for CUNA Marketing & Business Development Council Virtual Conference

March 23-25, 2021 | Virtual Conference

Angie Bastian and Gian Paul Gonzales will keynote CUNA Marketing & Business Development Council Virtual Conference, March 23-25. 

“The sessions we’ll be hosting will give marketing and business development professionals of all levels an opportunity to think about their work critically,” said Jason Lindstrom, CUNA Marketing & Business Development Council executive committee chair. “It’s an opportunity to explore relevant trends and develop your expertise.” 

Bastian, entrepreneur, co-founder, and namesake of Angie’s BOOMCHICKAPOP, took a kernel of an idea and popped it into one of the fastest-growing brands of natural popcorn. She provides experience-driven insights on making a brand stand out, excelling in a competitive marketplace, surviving and thriving through a rebrand, and female leadership and empowerment.

Gonzales is a motivational speaker whose talks focus on the idea of being “All In.” He has spoken to professional sports teams, Forbes 500 companies, and branches of the U.S. military.

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Mid-Level Management Virtual Series

Focusing on Mid-Level Managers is Important to your Credit Union's Success

Program Dates:

• March 10-11
• April 14
• April 28

Educational Investment: $425 per person 

Your credit union's mid-level managers, branch managers, and department leads are often the primary point of contact for employees.  Their management style, good or bad, has a tremendous impact on employee performance and workplace well-being. It is extremely important for credit unions to invest in the professional development and personal growth of their mid-level leaders. 

The Mid-Level Management Leadership Series is a four-part virtual learning experience specifically designed to provide mid-level leaders with the skills and tools they need to lead effectively, remove barriers and optimize performance. 

LEARN MORE OR REGISTER

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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 or click the link at the bottom of the page.
• 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!

• Katie Means
  (502) 855-8202
  [email protected]

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“The training provides great skills, whether you are front-line staff or collector. Our staff has learned new ways to lead members into a better lifestyle of financial freedom,” stated new FICEP designee Susan Daniels, Collector at Members Choice Credit Union. “I loved the program, and it even helped me in my finances.”

The FICEP designation recognizes crucial skills in credit union counseling professionals.  Members Choice CU staff will use their education to help their members through current and future financial situations, developed through informative sessions and face-to-face virtual discussions with financial counseling expert’s simulation.

CUNA congratulates those who earned their FICEP designation this year for their expertise and dedication to helping their members thrive financially.

For more information on the CUNA Certified Financial Counselor School, visit cuna.org/ficep.

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Northern Kentucky Educators’ Federal CU Name Change

Northern Kentucky Educators’ Federal Credit Union has been serving the financial needs of Northern Kentucky school staff for 47 years but their membership does not just stop at school staff.  With ‘Educators’ in the name, many school maintenance workers, cafeteria workers, bus drivers and administrative staff questioned if they were eligible for membership. 

After 47 years, the credit union will now be known as Northern Kentucky Federal Credit Union.  In the coming months, the credit union will unveil a new brand and website.

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Service One CU Selected to Participate in FedNow℠ Pilot Program for its Upcoming Real-Time Payments Offering 

Service One Credit Union will participate in the FedNow Pilot Program to assist in the development of a real-time payment service. The Federal Reserve program which is expected to be generally available in 2023, will enable U.S. financial institutions of all sizes to provide secure instant payment services to consumers and businesses.

“We are excited to be chosen for the FedNow pilot because it gives us an opportunity to help shape the features, functions and user experience of a program that will be so beneficial to our Members,” said Rebecca Stone, CEO of Service One Credit Union. “An added benefit is that our Members will be among the first to experience the advantages of the instant payment service before it is made generally available,” she added.

Building FedNow is the next chapter in the Federal Reserve’s payments services offerings and will pave the way for other technological advances and will present opportunities to address shifting consumer preferences. More than 110 organizations were chosen to participate in the pilot program.

For more information on the FedNow Pilot Program, visit FedNow.org.

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Board Approves Joint-Ownership Share Accounts Final Rule

The National Credit Union Administration Board held its second open meeting of 2021 through a live audio webcast and approved a final rule on joint-ownership share accounts. In addition, the Board was briefed on the Share Insurance Fund’s performance during the fourth quarter of 2020 and on the U.S. Department of the Treasury’s Emergency Capital Investment Program. 

Board Approves Joint-Ownership Share Account Final Rule

The NCUA Board unanimously approved a final rule(opens new window) amending the NCUA’s regulation governing the requirements for a share account to be separately insured as a joint account. The final rule provides federally insured credit unions with an alternative method to satisfy the membership card or account signature card requirement. For example, under the final rule, the signature card requirement can be satisfied by the credit union having issued a mechanism for accessing the account, such as a debit card, to each co-owner or evidence of usage of the joint share account by each co-owner. 

“This final rule would make the share insurance provided by the NCUA to members of federally insured credit unions comparable to deposit insurance of the customers of banks and thrifts,” Chairman Todd M. Harper said. “By maintaining parity between the two federal programs that protect the shares and deposits of consumers, the final rule enhances confidence in the share insurance fund and ensures that credit unions remain on a competitive footing with banks and thrifts.” 

Chairman Harper also noted that comments received on the rule emphasized that the change is especially important given the challenges posed by COVID-19 and the resulting economic uncertainty. “Should the pandemic’s economic fallout contribute to the failure of a federally insured credit union, these changes would facilitate the prompt payment of share insurance on joint accounts,” Chairman Harper said. 

The final rule is effective 30 days from date of publication in the Federal Register. 

Share Insurance Fund Assets Grow; Equity Ratio Stands at 1.26 Percent

The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund(opens new window) and the status of the fund’s equity ratio, noting that the fund reported a net income of $32.9 million and a net position of $18.9 billion for 2020. Additionally, the fund’s assets rose to $19.1 billion at the end of the year from $16.7 billion at the end of 2019. 

As of Dec. 31, 2020, the Share Insurance Fund’s calculated equity ratio was 1.26 percent, an increase from 1.22 percent reported as of June 30, 2020. The equity ratio was calculated on an insured share base of $1.5 trillion. The equity ratio was lower than the Board-approved normal operating level of 1.38 percent. 

“The primary factors contributing most significantly to the continuing decline in the equity ratio — strong growth in insured shares and reduced investment returns — remain and will likely continue in the future,” Chairman Harper said. “Any future decision by the Board to assess premiums must be data-driven. History has also shown the importance of building up the resiliency of the Share Insurance Fund, so it can handle the potential issues related to the pandemic’s economic fallout that we know are coming.” 

For the fourth quarter of 2020: 

• The number of CAMEL codes 4 and 5 credit unions decreased to 159 from 163 in the third quarter of 2020. Assets for these credit unions increased $0.1 billion from the third quarter of 2020, to $9.8 billion from $9.7 billion.
• The number of CAMEL code 3 credit unions decreased to 748 from 767 in the third quarter of 2020. Assets for these credit unions remained the same at $40.6 billion from the third quarter of 2020. 

One credit union failure incurred a loss to the Share Insurance Fund in 2020, compared to two credit union failures in 2019. The cost of the 2020 failure was $1.6 million. 

The Chief Financial Officer also reported the agency’s four funds — the Share Insurance Fund, the Operating Fund, the Central Liquidity Facility and Community Development Revolving Loan Fund — each received an unmodified, or “clean,” audit opinion(opens new window) with no reportable conditions for 2020 from the agency’s independent auditor, KPMG LLP. 

Briefing Provides Update on Emergency Capital Investment Program

The NCUA’s Offices of Examination and Insurance, Credit Union Resources and Expansion, and General Counsel briefed the Board on the U.S. Department of the Treasury’s Emergency Capital Investment Program(opens new window) and how it could be leveraged by eligible federally insured credit unions.

“I am deeply committed to advancing economic equity and justice, and today’s briefing raises awareness about this important, albeit short-term, tool that has the potential to make a real difference in the lives of many Americans,” Harper said. “And, the ECIP aligns with the mission of the credit union movement to expand access to affordable financial services to those of modest means.” 

Congress created this program as part of the Consolidated Appropriations Act, 2021 to help community-based financial institutions support consumers and local small businesses in low-income and underserved communities disproportionately affected by the economic effects of the COVID-19 pandemic. A federally insured credit union must be certified as a Community Development Financial Institution or as a minority depository institution to participate in the program. 

The briefing included information on the program’s eligibility and application requirements; the financial instrument and terms used for this investment, and whether credit unions can use the investment as secondary capital.

Additional information on the Emergency Capital Investment Program from the briefing is available on the NCUA’s website(opens new window).

Source: NCUA.gov

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4 Trends From 2020 Are Highlighted, Including a New Milestone for Checking Accounts

With fourth-quarter data now in on credit union performance, 2020 concluded with four trends that deserve attention, according to an analysis released by Callahan & Associates. 

Overall, said Callahan’s, credit unions played a “key role” in helping members to recover during a difficult economic year, and “year-end numbers show just how much members turned to their financial cooperatives in these trying times, setting new records for deposit and loan growth and more.”

During a Trendwatch webinar hosted by the company, Callahan & Associates said whole-year 2020 NCUA data offer four trends that are worthy of note, including: 

• Credit unions helped members take advantage of historically low rates, lowering monthly payments at a time when managing cash flow was critical for many. Fueled by a 62.6% surge in mortgage originations, loan production among the nation’s credit unions reached $680.3 billion in 2020.
• Consumers turned to their credit union accounts when stimulus money hit. The industry saw share balances grow a record 20.4% and $272.9 billion in a single year, with regular shares, share drafts, and money market accounts all posting record growth rates and only share certificates showing a decline.
• The percentage of members with checking accounts – considered a key measure of engagement – hit 60% for the first time as consumers continue to turn to credit unions for a no/low fee checking option.
• Total membership reached 125.9 million, up 3.4% from 121.7 million at the end of 2019 and showing that American consumers trust and rely on credit unions for their financial needs. 

‘Belief-Driven Buyers’

“Americans turned to their credit unions in record numbers in this remarkable year just ended, and the movement responded,” said Callahan President and CEO Jon Jeffreys in a statement. “Engagement continues growing in depth and breadth and we’re excited to see where the future leads as the nation’s member-owned financial cooperatives continue to grow their impact by turning new challenges into new opportunities.” 

During the webinar, Seth Schaefer, president and CEO of the $1.1-billion Rivermark Community Credit Union in Beaverton, Ore., shared his CU’s efforts to increase brand strength and market share by offering competitive products and services through a lens of not-for-profit community impact, Callahan’s reported. 

“That’s how we appeal to belief-driven buyers,” Schaefer said. “That’s a card we can play that banks can’t.”

A recording of the Feb. 11 Trendwatch can be viewed here.

Source: CUToday

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CFPB issues updated ATR/QM guidance

The Consumer Financial Protection Bureau (CFPB) Tuesday issued updated Ability-to-Repay/Qualified Mortgage (ATR/QM) guidance. The CFPB is reconsidering whether to initiate a rulemaking to revisit the Seasoned QM rule, and it expects to issue a proposal shortly to delay the July 1 mandatory compliance date of the General QM final rule. 

The Seasoned QM rule creates a new category of QMs, for first-lien, fixed-rate covered transactions that meet certain performance requirements over a 36-month seasoning period.

The General QM final rule replaces the current requirement for General QM loans that the consumer’s debt-to-income ratio (DTI) not exceed 43% with a limit based on the loan’s pricing. 

CUNA generally supports both rules and wrote to CFPB Acting Director Dave Uejio shortly after his appointment calling for the QM rules to be implemented without delay.

Source: CUNA

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Regulatory agencies issue statement on supervisory practices in wake of Texas storms

NCUA, The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the state regulators, collectively the agencies, recognize the serious impact of Texas Winter Storms on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision.

Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster is available here.  

The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of the affected disaster areas can be found at https://www.fema.gov/disasters. 

Lending: The agencies encourage financial institutions to work constructively with borrowers in communities affected by Texas Winter Storms. Prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism. Institutions should individually evaluate modifications of existing loans to determine whether they represent troubled debt restructurings according to U.S. generally accepted accounting principles. Institutions should consider the facts and circumstances of each borrower and loan, and apply judgment, as not all modifications will result in a troubled debt restructuring. In supervising institutions affected by Texas Winter Storms(opens new window), the agencies will consider the unusual circumstances these institutions face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest. 

Temporary Facilities: The agencies understand that many financial institutions face staffing, power, telecommunications, and other challenges in re-opening facilities after Texas Winter Storms. In cases in which operational challenges persist, the primary federal and/or state regulator will expedite, as appropriate, any request to operate temporary facilities to provide more convenient availability of services to those affected by Texas Winter Storms. 

Publishing Requirements: The agencies understand that the damage caused by Texas Winter Storms may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities under various laws and regulations. Institutions experiencing disaster-related difficulties in complying with any publishing or other requirements should contact their primary federal and/or state regulator. 

Regulatory Reporting Requirements: Institutions affected by Texas Winter Storms that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal and/or state regulator to discuss their situation. The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements, if those institutions are unable to fully satisfy those requirements because of Texas Winter Storms.

The agencies’ staffs stand ready to work with affected institutions that may be experiencing problems fulfilling their reporting responsibilities, taking into account each institution’s particular circumstances, including the status of its reporting and recordkeeping systems and the condition of its underlying financial records. 

Investments: Institutions are encouraged to monitor municipal securities and loans affected by Texas Winter Storms. The agencies realize local government projects may be negatively affected by the disaster and encourage institutions to engage in appropriate monitoring and take prudent efforts to stabilize such investments. 

For more information, refer to the Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster, which is available as follows: https://www.ncua.gov/files/supervisory-letters/SL-17-02-examiner-guidance-institutions-affected-major-disaster.pdf

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