Thursday, December 22, 2016

Happy Holidays

Happy holidays from everyone at the, 
National Council of Firefighter Credit Unions Inc. (NCOFCU)

     We truly value your relationship and thank you for being an important part of our association.
     We wish you a wonderful holiday season and a prosperous new year in 2017

NCOFCU Directors and Staff

Tuesday, December 20, 2016

NAFCU To Formally Change Its Name

ARLINGTON, Va.—Much like CUs themselves that have gone through evolution in fields of membership and resulting name changes, the National Association of Federal Credit Unions (NAFCU) will be operating with a slightly different name as of Jan. 1 – the National Association of Federally Insured Credit Unions.

The change, stated NAFCU, reflects that all the association’s federally insured members—including state charters--now have full voting rights and the ability to serve on the NAFCU board of directors.

“While our name change reflects our mission to serve all federally insured credit unions, our focus remains the same,” said NAFCU Chair Richard L. Harris, president and CEO of Caltech Employees Federal Credit Union. “We remain committed to providing the best in advocacy, education and compliance assistance at the federal level.”

The NAFCU board voted unanimously to change the association’s name. NAFCU’s logo and acronym will stay the same, preserving the association’s strong brand recognition, the association stated.

In September, NAFCU’s membership approved the board’s unanimous recommendation to amend the association’s articles of incorporation to give federally insured, state-chartered members full membership and to reinforce NAFCU’s focus on credit union issues at the federal level.

NAFCU said it will continue to advocate for credit unions at the federal level, with a focus on obtaining regulatory relief for the industry from NCUA, CFPB and other regulators.

Thursday, December 15, 2016

Federal Reserve raise the federal funds rate by 25 basis points

WASHINGTON–The Federal Reserve’s Federal Open Market Committee has voted to raise the federal funds rate by 25 basis points, moving from a range of 0.25%-0.50% to 0.50% to 0.75%.
At the same time, the FOMC issued revised projections calling for three rate hikes in 2017, three in 2018 and three in 2019. The FOMC will next week Jan. 31-Feb. 1.
In response, economists with the CU trade groups expect the effect on CUs to be minimal, but did indicate credit unions may need to reprice deposits more quickly than anticipated.
“Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year,” the FOMC said. “Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee's 2% longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation have moved up considerably but still are low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.”
The FOMC added that it expects with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further, and that inflation is expected to rise to 2% over the medium term.
“On the whole, the impact of a quarter-point rate hike on U.S. households should be minimal,” said NAFCU Chief Economist and Director of Research Curt Long. 
Long said the FOMC’s economic projections “may hold more interest than the statement itself.” 
“The Fed will not make any assumptions about President-elect Trump’s economic agenda,” he continued. “A large spending bill accompanied by tax cuts certainly has the potential to increase growth and inflation, paving the way for faster rate normalization in the coming years. But the Fed will stick to its wait-and-see approach.”
Perc Pineda, senior economist for CUNA, said of the Fed decision, “A 25-basis point hike in the Federal Funds rate today will affect credit unions in the medium-term. Deposit rates will be re-priced eventually, though not immediately. Credit unions savings rates have stayed well above the rates offered by the banks. Data from Informa Research Services show that the average savings rate at credit unions is 14 basis points higher than average savings rates at banks. Credit unions’ third quarter savings growth was 8.6%--higher than the banks’ 6.7% savings growth rate--suggesting that credit unions’ capital inflow continued strong despite a low interest rate environment.

 “After the 25-basis point hike last year, savings rates at credit unions remained practically unchanged. However, rates of other deposit products such as certificates and money market rose, but not right away. The difference this time is, although the rate hike is moderate, recent economic data are positive, along with signs of higher borrowing cost ahead,” Pineda continued. “We had strong third-quarter GDP growth; an unemployment rate of 4.6% is now below what the FOMC considers longer-run full employment rate, and inflation is on the horizon. The 10-year Treasury yield is moving back to its prior levels. This means that mortgage rates will rise—it is already 50 basis point higher in November than October. Credit unions are not-for-profit service maximizing institutions. Hence, it maintains a reasonable net interest margin to serve the financial needs of its tax-paying-working class members. If the upward pressure on loan rates strengthens in the near-term, credit unions would need to reprice their deposit products much sooner to compensate members the real rate of return on investment.”

Monday, December 5, 2016

NCOFCU Member Benefits

NCOFCU Member Benefits 
The National Council of Firefighters Credit Unions Inc. (NCOFCU) is your credit union’s partner in boosting revenue and reducing overhead. By harnessing our collective buying power, we are able to bring you, through your membership, the business-critical services and products vital to your credit union.
Your NCOFCU membership entitles you to one (1) license of “ This is a $240 dollar value provided to you with your membership in NCOFCU. Your membership also entitles you to their NCOFCU member discounted pricing on all their compliance services. For more about their products and services Click Here
To schedule a demo contact Heather Riley

Client Service/Project Coordinator
o: 888.972.3624, ext. 7014

NCOFCU business partner Auto Link was a real HIT at the 2015 Conference. Ed Bourgeois  demonstrated to each credit union how there program would look and operate within their website.
Your credit union has the best rates on loans and products, but only 15.74% of the national auto market share went to credit unions in 2014 — down 7.2% from 2013.
The online shopping paradigm shift is changing the way your members buy vehicles and get auto loans.
Auto Link™ is a complete member marketing package for your credit union that will increase auto loan revenue by engaging your members in the new digital world.
For more information contact:
Ed Bourgeois
Discounted for NCOFCU Members:
25% off fees (25% off standard fees) Additional Discounts for small asset size member credit unions. 
To receive discount, please use the on-line form and mention you were referred by "NCOFCU Member Discount"

Credit Union Digital University (CUDU)
20% off already NCOFCU discounted prices on their CUDigitalIU Basic, Plus & Pro 
For over 15 years, Credit Unions have protected their organizations, ensured accountability, prepared for audits and examinations, as well as supported the professional growth of their employees and directors with Credit Union Digital University’s smart approach to training.    For more information contact our representative: Tony Roberts 888.201.4394**7517

IWS & Credit Unions   
IWS is committed to offering our credit union members vehicle protection programs such as Vehicle Service Agreements (VSA), Mechanical Breakdown Insurance (MBI) and GAP. This commitment has driven them to become the most innovative, progressive and respected company in the credit union industry. IWS has agreed to provide NCOFCU with a small royalty for each protection purchased to assist us in reaching our vision. For more about their products and services
 visit  and contact our representative Michael Leon   847.894.6436               

Vining Sparks specializes in assisting Credit Unions with Asset Liability management, CD and government bond investments and structure, as well as loan participation's across the country. They are also one of the world’s top 20 underwriters of newly issued debt by agencies of the U.S. Government  They have agreed to provide NCOFCU with a small royalty for each investment purchased to assist us in reaching our vision. Vining Sparks is a member of FINRA/SIPC.  For more about their products and services for credit unions contact our representative, Lee Chandler800-786-1245

NCOFCU has worked hard in providing these products and services and we want to know how they work for you. Should you have any questions or comments, please contact Grant Sheehan CEO at or call 305-951-3306

Mortgage Rates Move Higher; FHA Loan Limits Increased

WASHINGTON–Mortgage rates have moved higher for a fifth consecutive week.
According to Freddie Mac’s Primary Mortgage Market Survey, rates on the:
  • 30-year fixed-rate mortgage (FRM) averaged 4.08% with an average 0.5 point for the week ending Dec. 1, 2016, up from one week earlier when it averaged 4.03%. A year ago at this time, the 30-year FRM averaged 3.93%.
  • 15-year FRM averaged 3.34% with an average 0.5 point, up from the prior week when it averaged 3.25%. One year earlier the 15-year FRM averaged 3.16%.
  • Five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.15% this week with an average 0.4 point, up from one week earlier when it averaged 3.12%. A year ago, the 5-year ARM averaged 2.99%.
In other mortgage news, the Federal Housing Administration has increased loan limits in 2017. In high-cost areas, the FHA said the new national loan limit “ceiling” will increase to $636,150 from $625,500, while its “floor” will increase to $275,665 from $271,050.

Thursday, December 1, 2016

New NCUA Videos Educate Credit Union Board Members about Financial Statements

ALEXANDRIA, Va. (Nov. 30, 2016) – Reading financial statements is an essential job for any credit union board member, and a new video series from the National Credit Union Administration can help make that job easier.

Understanding Financial Statements, now available on NCUA’s YouTube channel, is a five-part series that discusses the balance sheet and income statement, key line items in each and the relationship between the documents. The videos also will help you know what questions, you, as a board member, need to ask your staff about your credit union’s performance.

NCUA regulations require that federal credit union directors have a working familiarity with basic finance and accounting practices, including the ability to read and understand the federal credit union’s balance sheet an income statement and to ask, as appropriate, substantive questions of management and the internal and external auditors.
There is a quiz at the end of the series, and viewers who pass that will receive a Certificate of Completion.

Understanding Financial Statements is part of a comprehensive series of educational videos developed for credit union board members by NCUA’s Office of Small Credit Union Initiatives. The videos are available on the Small Credit Union Learning Center webpage.

The Office of Small Credit Union Initiatives fosters credit union development and the effective delivery of financial services for small credit unions, minority depository institutions, new credit unions, and credit unions with a low-income designation. The office also publishes FOCUS, a monthly electronic newsletter with helpful information for all credit unions.

Sunday, November 27, 2016

Supplemental Capital to be Considered by NCUA

Supplemental Capital

At the NCUA’s October board meeting, senior staff of the NCUA submitted a briefing report (the “Report”) to the NCUA Board (the “Board”) on the issues concerning the use of supplemental capital by federally insured credit unions (“FICUs”).  The use of supplemental capital presents a number of regulatory and policy issues that would need to be addressed prior to authorizing this form of capital for all FICUs.  The Board considered issuing an advanced notice of proposed rulemaking (“ANPR”) in the near future which would give credit unions and the public the opportunity to provide comment before the proposed rule stage.  Supplemental capital does not provide any capital support under the NCUA’s net worth requirements because it does not count as equity under generally accepted accounting principles, but it would allow FICUs to have a greater concentration of member business loans and long term mortgage loans since it could be used by FICUs to meet the NCUA’s risk-based capital requirement.

The NCUA has previously reviewed the concept of supplemental capital for FICUs. In April 2010, the NCUA released its “Supplemental Capital White Paper” which was authored by the Supplemental Capital Working Group, chaired by former Board member Gigi Hyland. In this extensive report, the working group reviewed three types of supplemental capital, including a form of subordinated debt. The form of supplemental capital under current consideration by the NCUA is subordinated debt.  Under current NCUA regulations such instruments must have a minimum term of five years, be subordinated to the claims of creditors and the NCUSIF, be uninsured and be unsecured.
In this report the working group concluded that any form of supplemental capital must adhere to three basic principles: (1) preservation of the credit union cooperative model, (2) robust investor safeguards and (3) prudential safety and soundness requirements. The investor safeguards would include requiring investor suitability determinations, clear and robust disclosure of the terms and risks of the investment, and compliance with disclosure and transparency standards comparable to public companies including executive compensation disclosures. It is likely that if the NCUA permits the use of supplemental capital applicable regulations would adhere to this guidance.

Current Environment
Unlike banking institutions, credit unions cannot issue stock to raise equity capital.  Under current law, only low-income credit unions (“LICU”) can raise supplemental capital (termed secondary capital in the regulations) by issuing subordinated debt to institutional investors.  This capital, although not equity, can used to meet the NCUA’s net worth requirements.  According to the Report, however, only a small percentage of LICUs have issued secondary capital.  No clear reason exists for the limited use of secondary capital by LICUs. It may be that institutions do not understand the features and the process of issuance or that under current law it may only be issued to non-natural persons.  In addition, subordinated debt carries a higher cost than common stock because interest payments are required whereas dividends on common stock are optional.  Many community banks, however, do not pay a dividend, but rather reinvest all their earnings back into the institution. 
The Report noted that in 2015, the annual interest rate of bank issuances of subordinated debt by banks (17 in the sample) ranged from 4.25% to 6.75%.  The Report provided no information about the size of the institutions or the size of the offerings.  Investment banking fees, as noted by the Report, ranged from 125 basis points to 300 basis points.  The fees typical decrease with the size of the offering. Clearly, the cost of subordinated debt is higher than the current cost of deposits or FHLB borrowings.  Therefore, unless the institution has a business plan to grow the balance sheet with higher yielding loans, such as MBLs and long-term mortgage loans, the issuance of subordinated debt may not make good business sense.
As a result of the inability to raise supplemental capital, a number of credit unions have converted to mutual savings banks as a first step in ultimately issuing stock as a means of raising capital. As the regulatory burden and operating costs continue to increase for all institutions access to capital becomes an important consideration.

Security Designation
Under federal law, securities issued by a credit union are exempt from SEC jurisdiction.  However, the NCUA would replace the SEC in this regard.  Under federal law the most widely used exemption is the “private placement” whereby securities are offered to institutional investors, to high net worth investors or a limited group of people.  If securities are offered to the public a prospectus containing extensive financial information about the credit union would be required and the credit union would prepare annual and quarterly reports (e.g., 10-K, 10-Q) for the investors.  The NCUA would act in place of the SEC in reviewing such documents.  If the debt is offered for sale within the branches, issuers would need to ensure it would not be confused with an insured deposit, such as a certificate of deposit.

Issuance Costs
Issuing supplemental capital includes costs other than the interest expense, particularly in a public offering.  Attorneys, accountants and financial advisors would be part of the team assisting the credit union.  One method of addressing the cost issue that would allow smaller credit unions to participate and raise capital in incremental pieces is the use of pooled offerings. In a pooled offering a group of credit unions each issue its own subordinated debt, but share the costs of the issuance.  For example, a pooled offering of $100 million might have 10 credit unions participating in the offering, each having a certain piece of the pool. The pooled offering concept was used by community banks in the early 2000’s to raise equity capital through the issuance of trust preferred securities. Pooled offerings may also provide an interest cost advantage for the participating credit unions since the risk is spread among many credit unions. This concept should be adaptable to credit unions.

Potential Purchasers
Under current NCUA regulations, secondary capital can only be purchased by institutions.  To make the best use of supplemental capital, the NCUA should allow it to be purchased by members of the credit union and the general public.  Although many issuances would initially be purchased by institutional investors, over time the expanded base of potential purchasers would provide the credit union with broader capital-raising opportunities.

The use of supplemental capital is a tool that should be made available to all FICUs in order to allow them to structure their balance sheet in the most advantageous fashion.  Although there is a cost to the capital instrument in the form of interest and issuance and compliance costs, the benefits clearly out weight these costs.

Womble Carlyle’s Financial Institutions Team provides legal counsel to financial institutions nationwide, on among other things, capital raising, securities law compliance, mergers and acquisitions, cross-industry transactions, regulatory compliance, vendor contract review, cyber security and field of membership expansions.  Womble Carlyle has served as issuers counsel to many financial institutions that have raised capital in the form of both debt and equity.

Contact Information
If you have any questions regarding this alert, please contact Steven Dunlevie at 404.888.7401 or, Richard Garabedian at 202.857.4577 or, or Adam Wheeler at 202.857.4519 or

Friday, November 11, 2016

Honoring All Who Have Served

Many people confuse Memorial Day and Veterans Day. Memorial Day is a day for remembering and honoring military personnel who died in the service of their country, particularly those who died in battle or as a result of wounds sustained in battle. While those who died are also remembered, Veterans Day is the day set aside to thank and honor ALL those who served honorably in the military — in wartime or peacetime. In fact, Veterans Day is largely intended to thank LIVING veterans for their service, to acknowledge that their contributions to our national security are appreciated, and to underscore the fact that all those who served — not only those who died — have sacrificed and done their duty.
Thank You!

Wednesday, October 26, 2016

NCOFCU 2016 Annual Awards Dinner

This year in Denver, CO, the National Council of FirefighterCredit Union Inc (NCOFCU) announced the winners of their, Lifetime Achievement Award and Volunteer of the Year Award. They also awarded an Out Going Charter Director Award and a thank you to the Denver Fire Dept. Credit Union for hosting the conference.

Lifetime Achievement Award
Wallace Garland CEO
Richmond Virginia Fire Police Credit Union  
In recognition of his constant Dedication and passion for the credit union movement throughout his career and for his unending involvement and outstanding contributions to NCOFCU 

Volunteer of the Year Award
Erv Williams Director
Spokane Firefighters Credit Union
The National Council of Firefighters Credit Unions would like to recognizance Erv Williams  as NCOFCU's volunteer of the year. The time and personal commitment of  Erv has been exemplary at all levels, and needs to be acknowledged.

Out Going Charter Board Member

Sean Costello Director
Boston Firefighters Credit Union
This award is in recognition for the leadership and commitment of Sean Costello as a founding member of the National Council of Firefighters Credit Unions. His personal commitment and dedication helped bring together firefighter credit unions throughout the United States.

A BIG Thank You!

The National Council of Firefighter Credit Unions would like to thank Mark Lau and his Denver Fire Dept. Federal Credit Union for hosting the 2016 NCOFCU National Conference.  Their commitment  ensured that we had a successful convention.

See you in Charlotte October 4-7, 2017

Tuesday, October 25, 2016

A Lesson Learned!

By Ron Schmidt
Betty, standing in front of her manager at Wells Fargo, exclaimed, “Let me see if I get this right. You want me to make sure every bank customer has at least eight of our products?”

Manager: “That’s right!”
Betty: “What if they have seven?
Manager: “They need one more!”
Betty: “They need one more?”
Manager: “Why are you questioning me?”
Betty: “Well, I’ve only got my GED, but I’m just thinking, how do you know they need eight?”
Manager: “The consultants!”
Betty: “The consultants?”
Manager: “That’s what my boss tells me: the consultants say our customers need eight of our products; 10 is better.”
Betty: “Sorry, but how do the consultants know this?”
Manager: “They just do.”
Betty: “You know I grew up on a dairy farm and in the summer right before a storm, the wind would shift and that cow smell just came right into the house.”
Manager: “Yea?”
Betty: “Something is shifting at this bank and it’s starting to smell.”
Manager: “I have no idea what you are talking about!”
Betty: “That’s because you never been on a dairy farm.”
Manager: “I tell you what, you can talk about your dairy farm and all, but unless you want to go back to the farm, your job is to make sure each of your customers has eight products, understand?”
Betty: “You know I may be just a farm girl, but what I learned is that if you feed and water and shelter the cows in a caring way they’re going to give you more milk.”
Manager: “What does that have to do with eight products?”
Betty: “Well when our customers come in to our branch, if you serve their needs in a caring way, they seem to appreciate it.”
Manager: “So.”
Betty: “I not sure you’re aware, but I often get new customers into the bank who ask for me because they are told by friends that I helped them.”
Manager: “What does that have to do with 8 products?”
Betty: “One thing I learned on the farm is that animals begin to trust you when you care for them.”
Manager: “So.”
Betty: “So if we care for our customers, they will begin to trust us and always come back when they need to buy a car and a house.”
Manager: “I think you’ve got it all wrong.”
Betty: “How’s that?”
Manager: “We don’t let customers tell us what they need, we tell them!”
Betty: “Really? I guess I missed out on that by not going to college and all.”
Manager: “Now get out there and do the work of the bank!”

In case you’ve been on a tropical island this summer, this fictional dialogue may not resonate. So let me bring you up to date. The CEO of Wells Fargo, John Stumpf, was called to Washington to testify to a congressional committee this summer on what’s been going on at his bank the last three to four years. Here are the facts as reported by various sources including
  • The sales structure put in place by upper-level corporate executives was referred to as the “Great Eight,” meaning eight products and services per customer.
  • $185 million in fines have been assessed, because employees opened accounts for customers without their knowledge, i.e. customers never asked for the additional accounts.
  • 5,300 staff have been fired for these practices.
  • Whistleblowers were fired.
  • Former employees have chastised upper management for “unethical techniques to improve sales numbers.”  Furthermore, staff “worked like dogs” to meet the rigorous sales goals.
  • Finger pointing continues regarding where and how these practices originated.
While many of the facts of the case have not been uncovered, this could result in a banking scandal that tarnishes the trust of both customers and employees. And oh, by the way, John Stumpf, grew up on a dairy farm in Minnesota, one of 11 kids. Maybe it’s his time to reflect on what happens to a bank when the wind shifts and the smell comes not from the animals, but from the shift in the culture and values of the bank.

Ron Schmidt is with CBS Certified Public Accountants, LLC, Solon, Ohio. He can be reached at  CUToday

Monday, October 24, 2016

Firefighters Chili Cookoff

What a great event we attended in Denver, The Denver Firefighters Chili Cookoff, with the proceeds going to the Muscular Dystrophy Foundation.

Maybe you should consider starting or sponsoring one in your local firefighter community.

Here is how Firefighters First Credit Union did it.

Houston Texas Fire Fighters Federal Credit Union Video

One of the discussions at NCOFCU's Denver conference was, "how do you attract members?"

Here is an example of how Houston Texas Fire Fighters Federal Credit Union does it.

Wednesday, October 19, 2016

Love My Credit Union Contest - Support Fire Family Foundation

The Love My Credit Union® Campaign is a nationwide video contest that invites credit unions and credit union support organizations to create a short video showcasing their good deeds and charitable work. Now it's up to you, to vote for your favorite and help charities across the country receive donations of up to $122,500. Plus, you could win a $500 gift card and a $500 donation to the charity of your choice just for voting! Vote every day now – December 16, 2016.

62,178 votes cast for 74 Love My Credit Union Campaign videos! Make a difference and vote 

Vote for the Fire Family Foundation Video at:

And The Forecast For 2017 Is?

Steven Rick who will be speaking to us in Charlotte, has made the following predictions for 2017.

MADISON, Wis. – Increases in housing construction and rising oil prices will drive higher economic growth higher next year, while auto sales should remain robust, according to CUNA Mutual’s chief economist.

Steven Rick said credit unions next year can expect a “slight acceleration” in the economy with no signs of a recession until late 2018—good news for CUs looking to expand their reach and services, he said.

Rick is further predicting the Fed will boost rates once this year and three times in 2017.

“We’re forecasting a modest acceleration in economic growth to 2.4% in 2017 from this year’s very slow 1.6%,” Rick told attendees of CUNA Mutual Group’s seventh annual Discovery Conference.

“An inventory correction, reduced energy sector investment due to falling oil prices, and the negative impact of the rising dollar on our exports all contributed to the U.S. economy’s slower growth rate. These factors will start to fade in 2017, resulting in a growth rate slightly above the target 2% mark,” he said.

According to Rick, additional factors helping fuel economic growth include an acceleration in housing construction due to a shortage of available homes for sale; an increase of 3% in average hourly earnings in 2017; and an increase in oil prices. Those factors coupled with continued low interest rates will result in increased spending, he said. Savings and lending growth at credit unions will be a direct result of rising economic confidence, Rick added.

Tuesday, October 18, 2016

Michael Lozoff PA Speaks to Important Lessons from the CFPB-Navy Federal Consent Decree

Important Lessons from the CFPB-Navy Federal Consent Decree

On October 11, 2016, the CFPB issued a consent order citing Navy Federal Credit Union for unfair and deceptive debt collection practices. Navy Federal was ordered to pay a $5.5 million civil penalty and to pay affected members $23 million. The CFPB found that the $77 billion Navy Federal violated the Consumer Financial Protection Act of 2010 (the “CFPAct”) in two principal

First, the CFPB said NavyFed made deceptive representations to members about its intent to take legal action against delinquent debtors, its intention to contact members’ military chains of command about their debts, and the effect of delinquency or repayment on consumers’ credit ratings.

Second, the CFPB charged NavyFed with unfairly restricting members’ electronic account access—blocking debit cards, ATM usage, and online account functions—when the member
had a delinquent credit account.

Credit unions nationwide are wondering whether they should worry about a CFPB examination and, more importantly, what, if anything, they should change in their collection practices. The CFPB has very broad enforcement authority when it comes to the federal consumer financial protection laws and a credit union of any size could be subject to CFPB sanctions for violations of those laws. As a reminder, it’s only the CFPB’s supervisory authority that is limited to credit unions with more than $10 billion in total assets.

After studying the language of the CFPB Navy Federal consent decree, we would like to offer the following recommendations for consideration.

Collection Letters
 The credit union should avoid threatening to bring legal action unless and until the credit union has reached the point that legal action is actually the only remaining last resort.
 The credit union should avoid threatening legal action if, in fact, the credit union has a history of rarely using the judicial system to collect past due accounts.
 The credit union should review its collection letter templates from time to time to ensure that they do not contain improper or abusive terms.

Account Freezes
 If the credit union engages in the practice of freezing member’s electronic account access and/or disabling electronic services after the member becomes delinquent on a credit account, it should disclose this practice with its usual account opening disclosures.
 The credit union should consider giving the member advance warning of an impending account freeze.
 The credit union should probably wait until the account is at least 30 days past due before blocking access.
 The credit union should consider selective blocking, e.g., blocking the member’s ATM or debit card, but not online or mobile web platforms that allow the member to check account balances, transfer funds, and make online payments.

A Word About Loss Policies
Many credit unions have policies that authorize the credit union to restrict services and access to members who have caused a financial loss to the credit union. It is generally viewed that the credit union hasn’t suffered a financial loss until it is required to write off the account as uncollectible. Accordingly, credit unions that freeze delinquent members’ accounts should carefully review their financial loss policies before relying on this rationale.

The suggestions above are only some of the matters credit unions should consider in making certain their debt collection practices comply with the CFPAct. Also, this bulletin should not be considered legal advice as each credit union’s policies and practices differ and so do the ways in which laws and regulations apply to those policies and practices.

The Credit Union Practice Group at Shutts & Bowen stands ready to work with your credit union to make sure it takes steps to avoid sanctions like those imposed on NavyFed.

Mike Lozoff, Chair
(305) 415-9516

Fran├žois Henriquez
(305) 415-9076

Jennifer Newton
(305) 415-9422

Friday, October 14, 2016

CFPB Is Unconstitutional, but the court said that the agency may continue to operate.

A federal appeals court  ruled that the organization of the CFPB is unconstitutional since it is operated by a single person, but the court said that the agency may continue to operate.

The bureau will operate as a federal agency whose director is supervised and may be removed by the president, according to the court ruling.

Agency officials vowed to continue their work, although NAFCU President/CEO B. Dan Berger called for an immediate halt to the CFPB’s rulemaking process.

The court was blunt in its ruling.

“The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decision-making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency,” the U.S. Court of Appeals for the District of Columbia said, in its ruling.

The ruling came in a case in which, PHH, a mortgage lender, was the subject of $109 million penalty from the CFPB. The appeals court voided that penalty and sent the case back to a lower court for review.

Opponents of the CFPB, including credit unions and Republican members of Congress have argued that the agency was unconstitutional ever since it was established by Dodd Frank. Congressional Republicans have attempted to reorganize the CFPB, with the agency being supervised by a commission. However, those efforts have failed.

The appeals court agreed, saying the director has too much power. “The Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President,” the court said.

A CFPB spokesperson said agency officials disagreed with the ruling.

“The Bureau believes that Congress’s decision to make the Director removable only for cause is consistent with Supreme Court precedent and the Bureau is considering options for seeking further review of the Court’s decision,” the spokesperson said.

Meanwhile, agency officials vowed to continue their work.

However, Berger said much of the agency’s work should stop.

“NAFCU urges an immediate moratorium at the CFPB on any rulemaking not already implemented,” said Berger. “The bureau should also consider ceasing and desisting all rulemakings until the legality is resolved.”

CUNA praised the ruling.

“I applaud the ruling from the U.S. Court of Appeals for the D.C. Circuit regarding the PHH case against the Consumer Financial Protection Bureau, in that it will establish a meaningful check and balance and bring needed accountability to the Director’s role,” CUNA President Jim Nussle said. “This ruling confirms CUNA’s concern that the structure of the CFPB is flawed and that an unchecked, independent director who answers to no one can’t lead to good public policy. CUNA continues to support a five-person commission for the CFPB instead of its current structure.”

Wednesday, October 12, 2016

Feds hit Navy Federal Credit Union with $28M fine

The Obama administration is accusing the nation’s largest credit union of improperly threatening members of the military who were behind on their loan payments.

The Consumer Financial Protection Bureau (CFPB) on Tuesday ordered Navy Federal Credit Union to pay $28.5 million, most of which will go to the members of the military and veterans to whom they provide banking services.

The credit union warned delinquent customers it would sue them and garnish their wages if they didn’t pay up, even though it had no intention of following through with the threats, the agency claims.

That wasn’t the end of the threats.

"The credit union sent letters to dozens of service members  threatening that the credit union would contact their commanding officers if they did not promptly make a payment,” the CFPB said. "The credit union’s representatives also communicated these threats by telephone.

"For members of the military, consumer credit problems can result in disciplinary proceedings or lead to revocation of a security clearance,” the agency explained.

The credit union also blocked the servicemembers from checking their bank accounts online and using their debit cards until they paid their bills, according to the CFPB.

The CFPB says the violations occurred between 2013 and 2015. 

The credit union has been ordered to pay $23 million to the customers who were affected, along with a $5.5 million fine to the CFPB.

Friday, October 7, 2016

Denver Photos and Presentations

A big thank you to everyone for making Denver a great conference.

The following link will take you to Denver's photos and speaker presentations. There are over 300 pictures, so get your favorite beverage, snacks, sit back and enjoy!    

Don't forget to Pre-Register for Charlotte, 10/4-7/2017, and SAVE $50 of the Early Bird registration.   2017 Pre-Pay Event Registration  (empires 11/30/16)

Hotel reservations, at the Marriott City Center, will not be open till November 1st. at which time I will send out a link to the reservation website.. For group registrations or any registration issues, please address them to Erin More 704-358-6551.

Plan on arriving early and staying late, for there is lots to do in Charlotte

Grant Sheehan CEO
National Council of Firefighter Credit Unions

Thursday, September 22, 2016

Federal Reserve opted to leave interest rates unchanged

WASHINGTON–As many had forecast, the Federal Reserve opted to leave interest rates unchanged, but also gave a strong hint that it could raise rates and tighten monetary policy before the year is out. In a statement, the Fed said U.S. economic activity had picked up and job gains were "solid" in recent months. The vote was 7-3 to keep rates where they are.

"The case for an increase in the federal funds rate has strengthened," the Federal Reserve said following its two-day policy meeting.
It added that its rate-setting committee had decided against raising rates "for the time being," until there was more evidence of progress toward its employment and inflation objectives.

The Fed has held its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent since December, when it raised borrowing costs for the first time in nearly a decade.
Two Fed presidents--Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren—have both said they favor raising rates now.
Meanwhile, the Fed also indicated it will take a less aggressive approach to increasing interest rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9% from 3.0%.
At the end of 2015 the Fed indicated that four rate increases were likely in 2016, but it has moved just once on rates this year.

In response to the Fed’s decision not to move on rates, CUNA’s chief policy officer, Bill Hampel, said
“Although the Fed did not move this time, an increase in the fed funds target rate would have been consistent with an economy approaching full employment with moderately rising inflation.  Therefore, an increase by the end of the year is very likely, to be followed by further increases next year, although a return to ‘normal’ rates will take several years. Higher short-term interest rates will provide welcome relief to savers, and should present no problems for credit unions.”
One day before the Fed’s decision, NAFCU’s chief economist, Curt Long, predicted during the group’s Congressional Caucus that the Fed would not act.

Wednesday, September 14, 2016


PTSD and substance abuse are pandemic among fire fighters. The International Association of Fire Fighters decided it was time to give them their own treatment center to help them deal with these behavioral health issues.

Keeping in mind the 20 percent of fire fighters who struggle from post-traumatic stress disorder, the International Association of Fire Fighters is establishing the first behavioral-health treatment center designed strictly for the profession.

IAFF, with the help of behavioral healthcare management company Advanced Recovery Systems, has created in-patient programs for the new Center of Excellence for Behavioral Health Treatment and Recovery to support fire fighters with PTSD and associated substance- and alcohol-abuse problems.

“Fire fighters and paramedics are subjected to stresses and trauma that can be life-changing, but until recently, mental health issues have largely been in the shadows,” IAFF General President Harold Schaitberger said in a statement. “Our collaboration with ARS will provide the support, treatment, and tools they need to recover from PTSD and continue to serve their communities.”

The facility, which will open in January 2017 in Prince George’s County, Maryland, will provide diagnosis, peer counseling, and treatment to IAFF members, as well as house a gym and running courses. Onsite teams will conduct related research, and an advisory committee will develop protocols to ensure effective program follow-up and the proper handling of behavioral health among fire departments.

“We know that fire fighters and paramedics can be exposed to significant trauma in the line of duty, which can lead to PTSD and co-occurring conditions,” ARS Chairman Dr. Lewis Gold said in the release. “With our expertise in addiction and recovery and comprehensive approach to care, ARS will be able to fully recognize and meet the needs of IAFF members, and help them get back to the lives and jobs they love.”

Fire fighters often experience PTSD at the same level as combat veterans—almost twice the rate of the general public—and so are highly susceptible to substance abuse and suicide. Escalating the problem, fire fighters won’t usually seek out help because of the stigma around behavioral health challenges within the profession, Schaitberger told Associations Now.

“There has been a stigma that has been created around those that may be dealing with PTSD and other emotional behavioral health challenges,” he said. “And that then, more typically than not, translates to a number of addictions: alcohol use as a treatment, drugs, all the unfortunate co-occurrences that surround these behavioral health issues.”

To begin addressing the problem, IAFF established a peer counseling program where affected individuals can talk to counseling-credentialed fire fighters. The program has proven successful and will be part of the new facility’s programs.

“We needed to first start to try to bring this, what we call it, behavioral health issue out of the darkness and into the light to try to create an atmosphere where our members would feel the comfort and the confidence to come forward and seek help,” Schaitberger said.

For fire fighters using the treatment center, IAFF has tried “to subtly bring in the elements and the feel [of a fire station] so that our members who come in for treatment and recovery will feel like they’re more, if you will, at home,” he said. This will include the strategic use of brick, color, and the Maltese cross.

Though the facility can’t currently accommodate every fire fighter suffering from behavioral health issues, Schaitberger hopes IAFF will open a series of these treatment facilities and include other first responders in the future.

Thursday, August 25, 2016

SF Fire Credit Union Chief Executive Officer

The SF Fire Credit Union ($1.2B in assets) Board of Directors has announced a search for the credit union’s next Chief Executive Officer.  This is an exceptional opportunity to lead one of the San Francisco Bay Area’s leading credit unions.  SF Fire has over $1.1B in assets and offers an opportunity to work with a skilled leadership team, dedicated board of directors and an organization that enjoys deep relationships with a dedicated membership base.  The cornerstone of SF Fire’s business model and corporate culture centers around the credit union’s commitment to an unparalleled service experience and will require leadership to embrace and further enhance the organization strategic approach to the delivery of member value.  SF Fire has a diverse product and service offering designed to meet the unique needs of its membership.  The new CEO will be tasked with driving innovative product development and leveraging progressive technologies to further position the credit union as the financial institution of choice for its new and existing membership. 


Successful candidates must demonstrate core competency in strategy development, a track record for building cohesive, high performing leadership teams, and the establishment of strong board relations.  SF Fire operates in a fiercely competitive marketplace and will require experience leading membership growth, market expansion, and branding initiatives in a similar environment.   Ideal candidates will have prior CEO experience or have held an executive leadership experience in a large, complex, member-focused credit union. 

Apply HERE  or E-Mail