Marketplace Newsletter

In this issue:

YOU’RE INVITED!  Announcing the VISION 2020 EXPO

Discovery 2020 - REGISTER TODAY! 

We Have Your Kentucky Kingdom Daily Tickets!

CO-OP Unveils THINK VIRTUAL Series Schedule for 2020

LSC Web Reports Upgrade Announcement

Life after COVID-19; Proactive Loss Mitigation Strategies for your Loan Portfolio

Mid-Year Reassessment Leads to Improved Outcomes

The Sprint Credit Union Member Cash Rewards Program is Ending on 7/31/2020

Impact Of COVID-19 Pandemic on The Auto Market and Auto Lending

New Member Offers Launched!

Upcoming Webinars

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YOU’RE INVITED!  Announcing the VISION 2020 EXPO

 The VISION 2020 EXPO is an online experience specifically designed to help Kentucky credit unions discover new, innovative products and services to help enhance member service offerings while improving the credit union's bottom line. 

WHY YOU SHOULD ATTEND VISION 2020 EXPO

  • It's FREE.  Employees of League affiliated credit unions can attend at no cost. The first 200 registered attendees will receive a "swag bag" full of valuable goodies.  

  • It's Virtual.  Attend this event from the comfort of your branch, office or home.   

  • Learn about new products and services to better your credit union. 

  • You could WIN $500.  Participating attendees will have a chance to win awesome door prizes, as well as, a $500 GRAND PRIZE* for participating in the exhibit hall.

MORE INFORMATION

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Discovery 2020 - REGISTER TODAY! 

Join thousands of credit union leaders across the country online, Thursday, August 13 for a day of Discovery! This free conference is designed to help boost your strategic planning with innovative ideas and key insights. 

Don’t miss this valuable opportunity. Check out the Agenda and Register Today! 

 

 

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We are now offering credit union members the opportunity to purchase deeply discounted tickets online to Kentucky Kingdom!  

Kentucky Kingdom and Hurricane Bay is bigger, better, and wetter than ever!  With more than 70 thrilling rides - including six world-class roller coasters, two wave pools, water slides, and lots of children's rides, plus food, games, and shows - Kentucky Kingdom has something for everyone! 

CLICK THE BUTTON BELOW TO SAVE 56% OR MORE OFF YOUR GENERAL ADMISSION TICKET!

BUY TICKETS

YOUR CREDIT UNION CAN SELL TICKETS AT NO ADDITIONAL COSTS. Click HERE to access free marketing materials!  

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CO-OP Unveils THINK VIRTUAL Series Schedule for 2020

Free Events Designed for Credit Union Professionals, Registration at: www.co-opfs.org/thinkvirtual

CO-OP Financial Services is announcing the schedule for its THINK Virtual events, headed by three flagship THINK Forums to be hosted by Jean Chatzky of NBC’s Today Show. Keynote speakers at these events will include Taco Bell CEO Mark King, author Margaret Heffernan and entrepreneur Scott Belsky.

“We have transformed our THINK conference for this year to include a series of virtual events that will run through the remainder of 2020,” said Samantha Paxson, Chief Experience Officer for CO-OP. “The fact that these events will extend over several months will allow us to ensure content is immediate and relevant, and each series is tailored to address different pressing needs of credit union leaders. And, all events are offered at no charge to attendees.”

THINK Forums: Renowned Business Leader Speakers

The THINK Forums will comprise virtual broadcasts tackling the industry’s toughest challenges and greatest opportunities. Each two-hour event will be hosted by Jean Chatzky, and feature a celebrated guest speaker leading business transformation today. The THINK Forum schedule includes:

  • August 19: “CEO Forum – How Member Relationships and Payments Drive Resilient Growth.” Taco Bell CEO Mark King will provide insights about activating change in organizations based on his more than 20 years as a President/CEO of large companies across a range of industries. Also speaking will be Dr. Amit Seru, Professor of Finance at the Stanford Graduate School of Business.
  • September 29: “Strategic Growth Forum – Navigating Uncertainty with Adaptive Thinking.” Author Margaret Heffernan’s remarks will reflect her forthcoming book “Uncharted: How to Map the Future” (September 2020), which explores people and organizations undaunted by uncertainty.
  • October 14: “Future of the Workplace Forum – Serving Members in the Transformed Workplace.” Entrepreneur Scott Belsky of Adobe will elaborate on themes from his latest book, “The Messy Middle: Finding Your Way through the Hardest and Most Crucial Part of Any Bold Venture” (2018).

THINK Master Classes: Hands-on Virtual Learning Opportunities

The 90-minute-per-session THINK Master Class will feature topic-specific virtual learning opportunities, including hands-on interactive exercises facilitated by subject matter experts. The series kicks off next month as follows:

  • August 4: “Activating Your Strategic Next.” Presentations will be led by Nikhil Lele, Americas Financial Services Digital Leader for EY.
  • September 17: “Designing Your Financial Wellness Ecosystem.” Personal finance journalist Jean Chatzky will move over from the THINK Forums to deliver the main presentation at this session.

THINK Power Lunches: Fast Deep Dives into Key Credit Union Topics

The THINK Power Lunch series is designed to go in-depth on a key credit union issue, covering it in a bite-sized amount of time – one hour. The series will include:

  • September 9: “Payments are the Path to Growth Research Presentation.” Research from Filene will be offered by Elry Armaza, the institute’s Custom Research Director.
  • October 8: “Utilizing Data in New and Intelligent Ways.”

“At our THINK 20 Virtual event last May, we demonstrated that virtual engagement can also be a magical connective alternative to live conferences,” said Paxson. “We believe the THINK Virtual series of meetings will both inform and push attendees and, as always with THINK, they will be an engaging way to unite in the midst of this year of COVID-19.”

To learn more about the three THINK Virtual series and to register, visit www.co-opfs.org/thinkvirtual.

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LSC Web Reports Upgrade Announcement

LSC is excited to announce they upgraded their LSC Web Reports to a new easy-to-navigate report system!  You can continue to access your League Reimburses from https://icul.lsc.net/e/462982/2020-07-01/8lpjkn/997413465?h=b0XyxpTqQVzPGnXChK0Hk-yqeymfgI9oOyRwji4vizc.  Your current Account ID and Password will work on the upgraded report system.

Please click here to watch a quick video introduction to the new system's features including how to:

  • Open reports and work with report tools
  • Categorize favorite reports

If you log in using an Internet Favorite, please go to www.lsc.net, click on login/tools, then select login to LSC Web Reports.  We always suggest going to the LSC site to log in to ensure you are using the most updated link to avoid any errors.

Please feel free to email the contacts below with any questions or concerns.

Steven Ryniec
AVP, Sales and Channel Relationships, Product Sales
[email protected]

Tracey Gierden
Senior Director, Shared Services
[email protected]

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Life after COVID-19; Proactive Loss Mitigation Strategies for your Loan Portfolio

By James Bullard, Senior Risk Consultant, CUNA Mutual Group

Over the past two to three months, credit unions have certainly faced unprecedented times. In fact, if you’re like many; you are probably ready to move on. Through this time, credit unions had to:

  • Transition a large percentage of employees to remote working arrangements
  • Close lobby locations
  • Limit in-person loan applications and account servicing to by appointment only
  • Embrace digital technology and serve your members virtually

COVID-19 (Coronavirus) put financial institutions under stress and created the need for personalized digital solutions. In fact, strong capital foundations and visionary leadership has never been more important. And, we’ve heard some amazing success stories from credit unions demonstrating the resiliency of our industry.

When thinking about the COVID-19 impact, look at how credit union business adapted and shifted to meet the needs of employees and members. Consider the risks that credit unions also faced and continue to face under this “new normal”.

One significant risk, for example, is how the inherent risk of your loan portfolio - the largest earning asset of your credit union - has increased dramatically.

Many credit union members may be extending payments because they are nervous about the future, but not necessarily because they have experienced income disruption. Instead, members are likely skipping payments to proactively hang on to cash in preparation for whatever may come next and to prepare for a potentially longer cycle of recovery.

To protect the credit quality of the loan portfolio, some credit unions are:

  • Waiving fees for loan deferrals or extensions
  • Waiving late fees 
  • Offering credit counseling and payment accommodations including 
    • Payment deferrals or skip-a-pay 
    • Extending due dates to avoid negative credit bureau reporting 

Many credit unions also waived fees during the pandemic outbreak – such as those connected to ATM usage, overdrafts, and late payments – and properly disclosed these fee waivers on their websites. to specifically state the period in which the fee waivers apply.

However, keep in mind that your credit union has options to mitigate risk and losses. For example, instead of automatically granting a 90-day payment deferral, maybe you want to consider one month at a time. While this approach creates some additional administrative work, it can help you manage liquidity risk. Another option may be to offer a 50% reduction in the payment – again, another way to mitigate liquidity risk. 

No matter your decision, you must be strategic and remain compliant. Now is the time to dot all the i's and cross all t's. While examiners will offer some grace when reviewing your COVID-19 response; how well you document your actions could be a differentiator in how your portfolio administration is perceived. 

A suggested practice is to develop and follow a COVID-19 response plan – one that includes how you will handle loss mitigation and emergency loans. Define your parameters, implement and document that the loan is a part of your pandemic response plan - either on your core system, in the loan file, or both. This will allow you to monitor COVID-19 related loans for performance and categorize any losses within your loan loss reserve.

Executing a Digital Lending Strategy

Another effective way to service your members during a pandemic, or following any disaster, is to execute on a digital lending strategy. With in-branch interaction significantly impacted by government-mandated shelter-in-place requirements; many credit unions used COVID-19 as an opportunity to promote and test online or digital processes. In many cases, both employees and members benefited from the virtual engagement. Digital lending takes the concept of online applications and adds the functionality of auto-approval, e-signatures, and data analytics.

Unfortunately, fraudsters have also been quick to seize the opportunity provided by COVID-19. To assist in combatting the fraud with online member engagement, credit unions should utilize all identity verification and member authentication solutions available. For loans closed using electronic document signing, credit unions should deploy an identity verification solution that includes out-of-wallet questions for online account opening. 

For credit unions that are not currently able to deliver loans digitally to your membership, you should exercise caution when using fax or email to share documents with your members. In fact, you may want to only offer this service to established members that are well-known to your credit union. Prior to faxing or emailing documents, it is always recommended that you call the member using a phone number you have on file. If you do not know the member by voice, again ask out-of-wallet questions that only your member should know.

Finally, don’t forget to be consistent in your application of loss mitigation procedures and pandemic-related lending to minimize a disparate impact to a protected class, even if it is unintended.

These are unprecedented times. While a pandemic crisis – such as COVID-19 – can create confusion; spending time considering and implementing policies, procedures, and controls should help ensure your organization is well equipped to handle this transition efficiently.

For additional insights on risks brought on by COVID-19 or mitigation tips to help your credit union, your employees, and your members, check out CUNA Mutual Group’s Protection Resource Center, related RISK Alerts, or CUNA Mutual Group’s Stronger Together page.

To address specific risks or concerns, CUNA Mutual Group Bond policyholders can also contact a Risk Consultant at 800.637.2676, [email protected], or through online consult scheduling.

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Mid-Year Reassessment Leads to Improved Outcomes

4 things you can do now to address the challenges of COVID-19

By: Ron Jennings, Executive Vice President of National Sales & Alliances

Throughout history, unexpected events and significant milestones—from natural disasters to economic downturns, regulatory constraints and the advent of new technologies—have tested the financial services industry. Time after time, credit unions have adjusted their operations and service delivery strategies in order to address changing business environments and deliver services to fill critical member needs.

As we reach the mid-point of 2020, COVID-19 is the latest challenge to place pressure on consumers and financial institutions alike. In the first quarter, the U.S. economy shrank nearly 5%. Since then unemployment has reached levels not seen since the Great Depression. What’s more, the economic outlook ahead is clouded by uncertainty, with predictions of further contractions, prolonged low interest rates and falling loan demand which will further impact income.

And while there is no way to predict when the uncertainty will end, there are steps that can be taken now to maintain or grow reputational capital, strengthen your operations and enhance your bottom line to prepare for the changes that lie ahead for your credit union, your members and your community as we work through this ongoing crisis.

Improve the member experience

Stay-at-home orders have been lifted across the country and most businesses are opening, at least partially. However, record unemployment and under-employment persist across a broad spectrum of the population. Uncertainty about how long the virus will pose a threat increases the anxiety for millions of Americans who are looking for some peace of mind and financial security.

Are you taking steps to address your members’ financial service needs?  A fully disclosed Overdraft Privilege program can provide a user-friendly solution to your members’ occasional financial insecurities—both now and throughout the Pandemic—until more stable financial conditions return.

Just make sure that the important details of your program—like overdraft limits and fees—are fully explained to your members at account opening and through on-going interactions. Your program also should provide on-going communication regarding member account status and the availability of alternative solutions that can help them maintain their finances through economic uncertainties.

By taking a proactive approach to identifying user-friendly initiatives and strategies that take into account individual circumstances, you can be the solution for your members’ most pressing financial needs and protect vital sources of revenue for your credit union.

Maintain compliance awareness

With all of the new challenges that financial institutions are currently experiencing, it’s imperative not to become complacent when it comes to maintaining compliant programs and procedures. Litigators across the country continue to target credit unions for activity that negatively impacts consumers. This includes class action lawsuits and demand letters against institutions whose overdraft policies are deemed to be confusing. 

Are you utilizing best practices to manage your overdraft program? Do you have access to the latest advice on regulatory and consumer protection expectations? If not, you are risking increased examiner scrutiny and possible legal action.

When your members are aware of how to access your overdraft solution—and the other services you provide to help them when they are faced with a financial downturn—there is no guesswork and no surprise fees to further complicate their situation. Using the service becomes a clear choice they can make to avoid having transactions denied or checks returned on necessary purchases and emergency expenses.

If you are managing your overdraft strategy in-house, now is a good time to have a compliance expert review your policies and procedures to make sure they are in line with regulatory expectations and pose no threat of legal scrutiny or penalties.

 Take control of your expenses

At a time when you may still have employees working from home or have reduced staffing in place, it can be tempting to push some less member-facing tasks to the back burner. But don’t overlook the long-term financial consequences of not staying on top of your existing service contracts—you could be missing out on significant benefits.

For example, the changing business environment brought on by COVID-19 has increased the need for digital capabilities and more enhanced services—like contactless cards and virtual ATMs—that simplify members’ ability to complete financial transactions. As upgrading your service options becomes a higher priority, evaluating vendor contracts can provide the funds your credit union needs to re-invest in operational improvements and new technology.

What’s more, changing financial needs caused by the Pandemic have created more demands for employees to be engaged with new ways to address individual member challenges. Having an expert to help with evaluating contracts that are coming due or finding ways to save money—or add revenue—can be a valuable solution for improving efficiencies, as well as your service capabilities and your bottom line.

When was the last time you had a professional take a look at your service contracts? Re-negotiating vendor agreements can uncover savings and improved contract terms on the services you use every day. In many cases, a no-cost expert review can have a positive impact right away on contracts that are expiring between now and early 2022 on such agreements as card processing, card brand, core data processing and much more.

Utilize tools and resources that support successful results 

Since the onset of COVID-19, consumer use of contactless methods for obtaining financial services has increased, due to limited access to branch facilities, work-from-home requirements and social distancing recommendations. In this unsettling environment, it’s imperative to examine how effectively you are providing consistent financial services and support to strengthen existing relationships and attract new ones.

For instance, does your overdraft program include continuous member communication and on-going evaluation to make sure it is providing the best results for your members and your credit union? The combination of the right technology and sound expert advice is essential to ensuring your program is supplying accurate account tracking, analysis and reporting that is necessary to ensure a responsible solution for your members and a reliable source of revenue for your institution.

Effective utilization of data to identify individual members who may be affected financially during the Pandemic allows you to match your services to their needs. This, in turn, increases the likelihood that your institution will be seen as a trusted financial ally.

In light of existing staffing situations, it is essential for your employees to have access to training opportunities that instill the knowledge and confidence they need to do their jobs successfully. If you are relying on employees to train new hires and provide ongoing refresher courses while some individuals may be working remotely and/or taking on new responsibilities, your training strategy may be lacking consistency and failing to fully engage everyone who needs to be involved.

When it comes to training employees on critical member initiatives—like Overdraft Privilege and other services that offer financial stability for members—professional, program-specific trainers can take the guesswork out of the learning process and strengthen everyone’s peace of mind. With the support of experienced facilitators, you can boost your employees’ knowledge of program management, compliance, industry best practices and member engagement to make sure that everyone on staff has more confidence regarding how the program works, how to explain it effectively to members, as well as what value it brings to program users and the credit union.

For the past several months, COVID-19 has had a major impact on the economic well-being of financial institutions and consumers alike. And its impact is expected to continue for the remainder of the year, at least. How you respond to your members’ needs today can have a substantial impact on the success of your credit union for years to come. By reassessing your current strategies for improving the member experience, controlling your expenses and protecting revenue, you can address the changing environment with confidence.

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The Sprint Credit Union Member Cash Rewards Program is Ending on 7/31/2020

T-Mobile officially completed its merger with Sprint Corporation on April 1, 2020. As the companies combine their customers and retail stores under a single T-Mobile brand, the Sprint brand will be going away, and with it, the Sprint Cash Rewards offer will discontinue on July 31, 2020. Sprint will facilitate all communications with your Sprint Cash Rewards members about the termination of the program and its impact on customers.

We have good news about an exciting new credit union member wireless discount; however, we first need your help removing all Sprint-branded marketing assets and messaging from market.

How will this impact my members?

  • Credit union members will have until July 31, 2020 to activate new Sprint lines. 
  • Members will have until August 31, 2020 to register new Sprint lines at LoveMyCreditUnion.org/sprintrewards
  • Please visit the Member FAQs tab below for more details.

How will this impact my credit union?

When do I need to remove or replace Sprint marketing materials?

  • Your credit union will need to remove or replace all Sprint marketing material by July 31, 2020.
  • If your credit union is using one of our HTML coded Sprint web banners or our general Love My Credit Union Rewards banners (formerly All Bundle), there is nothing you need to do as the banners were automatically updated to the new Love My Credit Union Rewards banner.  
  • If you did not use the HTML coded banners, then you will need to manually update it to our new Love My Credit Union Rewards banner. Click here to access new banners and approved messaging.
  • Please note that there will be no Sprint transitional marketing materials available other than the new general Love My Credit Union Rewards materials which will enable you to market all of our great discounts to your members.

What if I already sent out a Sprint marketing communication (such as a newsletter) that will hit after July 31, 2020?

  • Sprint will handle any potential overrides to honor the program offer. Members will have until August 31, 2020 to register for final program benefits.   

Will my credit union receive Sprint revenue share?

  • Sprint revenue share for Q1 2020 will be paid out at year-end to credit unions that fulfilled their marketing requirements for the quarter and generated new lines.

If you have any questions regarding the Sprint Rewards program, please contact Laura Parrish at [email protected].

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Impact Of COVID-19 Pandemic on The Auto Market and Auto Lending 

The COVID-19 pandemic has brought the US economy to a halt, touching nearly all industries including the auto industry.

The shelter in place orders enacted by state and local governments affects 95% of the population. These social distancing measures are impacting the auto market in several ways including: 

  • US factories closed, suspending production of new vehicles.
  • Dealerships closed, halting auto sales.
  • Increasing supply of vehicles at auction and wholesale markets as demand from dealers falls. 

These factors have resulted in auto sales dropping over 38% as compared to the prior year. With lower sales comes lower auto loan originations. 

In addition to a significant decline in auto loan originations, risk to your existing auto portfolio can be affected by the current economic conditions. Record crashing unemployment means borrowers may not be able to repay an existing auto loan. 

While some lenders are offering programs for payment relief, it may not be enough for borrowers. With the depth and breadth of the pandemic uncertain, the ability for these borrowers to regain employment is unknown. 

Valuating your auto loan portfolio is more important now than ever. Understanding your exposure will be key to understanding your potential for loss. In addition, understanding your borrowers credit behavior is critical. By looking at different credit attributes you can identifying borrowers who demonstrate financial behavior suggesting they’re more likely to be adversely impacted by a short-term loss of income. 

We know this is a difficult time for consumers and businesses alike. At 2020 Analytics, we have reviewed over $10 million auto values providing actionable insights into our clients’ auto loan portfolios. We are offering financial institutions a subset version of our multi-dimensional portfolio analysis for auto valuation. Provide us with loan level data including VIN, make and model and we can provide you a comprehensive analysis with updated auto vales from our partner at Black Book, allowing you to make informed business decisions. In addition, with our partnership with TransUnion, we can provide analysis into your members credit history to help you identify higher risk borrowers. 

Contact Laura Parrish at [email protected] today to learn more.

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New Member Offers Launched!

We are very excited to announce that we have recently added two new offers to the Love My Credit Union Rewards program with Sam's Club and Rental Kharma!

SAM'S CLUB

Help your members get what they need to make staying at home easier with a new wholesale club membership. Through Love My Credit Union Rewards, members can now save 40% off a 1-year membership to Sam's Club.

Social media posts and approved messaging have been added to the Partner Center to help you share this great offer with your members.

RENTAL KHARMA

You may have noticed our most recent offer with Rental Kharma that we feel will greatly benefit credit union members.

What is Rental Kharma you ask? Rental Kharma helps members build their credit by adding current and past rental payments to their credit history. What's even better, through Love My Credit Union Rewards, credit union members will get a 30% discount off the already low monthly reporting fee.

Visit the Partner Center for current marketing materials!

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Upcoming Webinars

To register for any of these webinars, please go to https://www.cunamutual.com/resource-library/webinars

Office Hours – Operations
8/12/2020 1:00PM (CT)
Join our Risk Consultants and your credit union peers to ask questions regarding the latest risks, loss trends, and mitigation tips in your day-to-day operations, security, and employee efforts.
Protection Resource Centers/Live Events 

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