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