When selecting your website provider you should be taking an in-depth look at a third party's Disaster Recovery and Business Continuity plan!

A big part of doing your duediligence, should be taking an in-depth look at a third party's Disaster Recovery and Business Continuity plan. You should be asking when was the last time it was tested? What were the results? Can you get a copy? At OMNICOMMANDER.com we take this very seriously.

Since our headquarters are located in beautiful Miramar Beach, on the Gulf Coast of Florida, we actually get to test out our plan a few times a year. Any named storms that decide to roll through town allow us to go right into our business continuity plan. It's one of the reasons we chose our second fully staffed location to be in Nashville (different grid, climate, live music, hot fried chicken, etc...)

The servers that run our over 400 websites are located throughout America in the Northeast, Central (ahem, Texas) and the Pacific Northwest. We have a 4th location in Europe just in case. In the event that any of these were to become unavailable, our websites would still be up and available.

For several of our CreditUnions that were affected by these recent storms we were the only form of communication, because many of the branches were down too. Hundreds of banners, pop-ups, social media posts and email communications kept those members informed as to what was going on.

For more information contact; 

Josh Gallo P:917-402-7720 EM:josh@omnicommander.com

Fed will not be raising rates any time in the near future!

WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell told Congress on Wednesday that the central bank will not start raising interest rates until it believes its goals on maximum employment and inflation have been reached.

Powell also warned that many who had worked in industries hardest hit by the pandemic and ensuing recession will likely need to find different jobs.

As he did before the Senate Banking Committee on Tuesday, Powell told the House Financial Services Committee that the Fed is in no hurry to raise its benchmark short-term interest rates or to begin trimming its $120 billion in monthly bond payments used to put downward pressure on longer-term rates.

Financial markets, which had begun to wane Tuesday on fears that higher inflation might trigger an earlier-than-expected tightening of credit conditions by the Fed, rebounded on Powell’s comments.

That trend extended into Wednesday with the S&P 500 index rising more than 1 percent.

Powell said the Fed does not see any indication inflation could race out of control. While price increases might accelerate in coming months, Powell said those increases are expected to be temporary and not a sign of long-run inflation threats.

He said the central bank would not start to trim its $120 billion in monthly bond purchases until “substantial further progress” has been made toward the Fed’s goals on inflation and employment.

Hikes in the Fed’s benchmark interest rate, now at a record low of zero to 0.25 percent, will not occur until the Fed has seen inflation reach its 2 percent target and run slightly above that level, with employment falling to a level viewed as maximum employment, he said.

Powell has noted recently that, while the official U.S. unemployment rate in January dropped to 6.3 percent, the actual rate is closer to 10 percent when taking into account the millions of people who have given up looking for a job.

Even as the job market improves, a portion of the 10 million people still out of work may find it hard to get new jobs, he said. He attributed that to the changes brought on by the pandemic in such industries as retail services and tourism.

In many cases, the jobs people left may no longer be there, which will mean those workers will need access to job retraining to find work in other areas, Powell said.

The House is expected to take up later this week President Joe Biden’s proposed $1.9 trillion relief measure, which includes stimulus payments of up to $1,400 for individuals and expanded unemployment benefits and support for state and local governments.

Republicans have attacked the measure as too expensive and unnecessary given growing signs that the country doesn’t need further support. Democrats, however, have argued that with nearly 10 million still out of work compared to a year ago, further support is needed.

Powell repeatedly refused to take a position on Biden’s proposal, saying that it was up to Congress and the administration to decide.

While repeating his comment in his Senate testimony that he believes the economy is a “a long way from our employment and inflation goals,” Powell did agree with that there have been some encouraging signs that the economy could accelerate further as new COVID-19 cases decline and vaccines are more widely distributed.

Some private forecasters have said the overall economy might grow at a rate of 6 percent or better this year, after having shrunk 3.5 percent last year, the worst performance since 1946. GOP lawmakers pressed Powell to say whether he thought such a growth rate was possible, but he refused to be pinned down to a specific target for gross domestic product growth.

“There is a reason for optimism in the second half of the year if we get the pandemic under control,” Powell said.

Tim Harrington's Doorways to Success

Introducing the Doorways to Success Series: Financial Mastery

So, what do Bob Ross and Tim Harrington have in common? More than you’d think! They both paint and they both make difficult things seem much easier.


The Financial Mastery series is a new approach to learning credit union financials, which are a requirement for all credit union board members and a tremendous value for all those who rely on ratios and balance sheets to keep the credit union running. The TEAM Resources Doorways to Success Series: Financial Mastery is a series of five videos taught by Tim Harrington, CPA. Tim has an international reputation for his ability to communicate complex financial concepts into plain language and images. Train your entire board with one purchase.

This video series captures the true dynamic of a Tim Harrington class.

This is NOT a recorded PowerPoint with audio or a podcast with handouts. It’s definitely NOT a webinar. This series captures on video the real energy and style of Tim’s teaching. It’s fair to say that Tim is the “Bob Ross” of credit union financials!

More sample videos: https://forteamresources.com/credit-union-financials-training/#toggle-id-1

A Top 10 List of issues to watch for in 2021 when it comes to overdrafts

LAKE FOREST, Ill.—A Top 10 List of issues to watch for in 2021 when it comes to overdrafts is being offered to credit union leaders to help provide guidance and avoid costly mistakes.

Michael Mobes will be a speaker at NCOFCU's Annual Conference this year in Fort Worth, TX.

This list, assembled by Moebs Services, which does extensive research into overdraft practices at financial institutions, is included in a report that pays particular attention to the risks to revenue.

Michael Moebs, economist and CEO at Moebs Services, said the cautionary list related to overdrafts differs from those in previous years, due largely to changing consumer behavior during the pandemic.

The company assembled its Top 10 List from consumer data gathered in November from 87,181 depository locations across the U.S. and from several of its own recent reports.

“We’ve put all of these road signs in one place because banks and credit unions need to be aware of how the overdraft landscape is changing,” said Moebs. “These are important issues to watch and address. The coronavirus has accelerated OD behavior change, creating a brave new world of overdrafts.”

Top Ten Issues

CFPB will Reinstate Obama Era Fines

Starting in 2011 and running through 2016, the Consumer Financial Protection Bureau collected over $10.8 billion in enforcement actions and fines for consumer relief, including ODs, as well as other service charges.

“The recently nominated CFPB director, Rohit Chopra, was there for the CFPB’s startup and witnessed first-hand what can be achieved with fines,” said Moebs. “Financial institutions need to batten down the OD hatches for regulation, especially with Reg E and opt-in practices. Refunding on contested OD transactions needs to be enhanced to ward off any possible class action lawsuits.”

OD Pricing $25 or Below Avoids Compliance Heartburn

COVID-19 spawned more banks than credit unions to reduce their overdraft pricing to $25 or below.

“Along with low OD price comes consumer-friendly pricing features, such as: caps on fees charged, di minimis levels of $10 or less to avoid an OD fee, and fee waivers for errors,” said Moebs. “These changes are viewed favorably by examiners, regulators and mainly consumers affected by their errors.”

Average OD Limit Base is $1,500

“The $500 average overdraft limit in place since 1998 does not meet the basic monthly needs of the consumer today,” Moebs told CUToday.info. “Larger limits help relieve error-prone consumer behavior, so penalty pricing of high fees and low limits can die with the virus. Consumers are willing to pay reasonable fees for good value.”

FICO as an OD Process, Not Just an OD Underwriting Tool

“Fair Isaac established the FICO score to avoid human decisioning,” observed Moebs. “FICO calculates risk, controls losses, and is tied to limits to assist with errors not penalties. Preventing overdraft losses requires human insight on the risk data to determine the process for automatic decision.”

Payday Lenders Have More Than 40% of the OD Market

“The median overdraft balance is $40 at the end of day. The national OD median price is $30. The national payday lender fee for a $100 advance is $18. Which would a consumer choose?” asked Moebs. “Give members or customers a reason to avoid payday lenders: provide better price, higher limits and better service.”

Payments Rule

COVID increased digital purchases with debit cards using mobile wallets in stores and online.

“Even in electronic payments errors are made,” noted Moebs. “The average American has short-term cash needs due to making errors with their cash. This need doesn’t disappear because overdrafts are disliked and penalized. ODs will not go away because of errors and cash needs.”

More Than 80% of All Deposit Service Charges Come from ODs

“Interchange revenue is significant, but at $30.8 billion in total revenue overdrafts still dominate. Even though debit card transactions exceed cash transactions, errors will happen with debit cards. Overdrafts reasonably priced provide a meaningful solution,” Moebs said.

Overdraft, Non-Sufficient Funds, Return of Deposited Item, Stop Payment, Line of Credit Transfer and Deposit Transfer Constitute All OD Revenue.

“Overdraft revenue is not limited to OD transactions. There are: non-sufficient funds, return of deposited items, stop payments, line of credit transfers and deposit transfers too,” reminded Moebs.

Your Grandma Bounces, Your Mom Swipes

“Grandma grew up with checks, which afforded making payments without money due to the float via mail which delayed the check just in time to be met with a paycheck deposit,” said Moebs. “Mom no longer has this old-fashioned process available and needs credit limits but not loans to help with cash shortfalls and errors. Grandma’s Christmas check is being replaced with e-gift cards.”

If You Don’t Like the Heat, Get Out of the Unsecured Kitchen

“If overdrafts should be penalized with high fee prices and low limits, since any type of unsecured credit is bad, then don’t do the service,” advised Moebs. “The bank or CU down the street will be happy to serve error-prone consumers with short-term cash needs.”

According to Moebs, “These 10 signs on the OD Highway require attention. Don’t forget to wear your seatbelts to avoid examiners, regulators, high fees, low limits, archaic underwriting and payday lenders—and help grandma if she gets on the OD Highway.”

Credit unions should prepare for a NCUSIF premium to be assessed.

 ALEXANDRIA, Va.—Stating the agency has attempted to avoid charging credit unions a premium during the pandemic in order to replenish Share Insurance Fund’s sliding equity ratio, NCUA Chairman Todd Harper suggested credit unions should nonetheless prepare for a premium to be assessed.

But the agency’s other two board members didn’t sound so convinced, and at least one of them would have to vote in favor for any premium to be charged in the future.

Harper, during the agency’s board meeting, also said premiums are only a short-term solution and the agency should work with Congress to obtain greater flexibility to manage the NCUSIF, so funds can be built up during good times to avoid premium assessments during difficult periods.

The potential for a premium comes at the same time the credit union trade associations have argued no premium is necessary for several reasons, including that the declining equity ratio is the result of an influx of deposits and not due to the failure of any CUs or losses to the fund.

Harper, in his first meeting as chairman, said there has just been too much ongoing pressure on the NCUSIF equity ratio in the past year, and more concerns lie ahead—especially with another round of stimulus likely heading consumers’ way.

“With the growth in shares likely to remain elevated in 2021, it is increasingly clear the question is no longer if we have to assess a Share Insurance premium, but when and how much,” stated Harper, who is the lone Democrat on the board.

The NCUSIF equity ratio stood at 1.26% as of Dec. 31, which is below the 1.3% equity ratio that is the standard measure for whether credit unions should be charged a premium to replenish the fund.

 Not a Repeat of 2008

Former Chairman Rodney Hood, emphasized the drop in the equity ratio is not related to fundamental problems with the economy. READ MORE CUToday

NCUA Change involving joint ownership share accounts.

ALEXANDRIA, Va.–The NCUA board has voted 3-0 to approve a change involving joint ownership share accounts.

The change to Final Rule Part 745 is relatively minor in that it codifies a practice already in place at many credit unions when it comes to the use of electronic signatures. The rule would only apply in cases where a credit union fails and a jointly owned account is affected. The rule was finalized largely as proposed, with the agency saying it will provide targeted regulatory relief by allowing federally-insured credit unions to use information in account records to establish co-ownership of the share account and satisfy the signature card requirement.

The final rule includes a clarifying change "to better convey the examples of evidence of co-ownership in the proposed regulatory text do not define the only form of evidence that could satisfy the signature requirement," according to NCUA. It is set to take effect 30 days after publication in the Federal Register.

NCUA Chairman Todd Harper, agency staff and the other board members all noted the change will not add any additional compliance burden on credit union. The approval of the rule brings NCUA in line with a similar change adopted earlier by the FDIC.

The proposal was originally put out for comment in May of 2020. NCUA said it received 11 comment letters on the proposal, none of which objected.

"I’d like to see more of this great work by NCUA staff, in codifying these sorts of things and putting them into the affirmative," said NCUA Vice Chairman Kyle Hauptman. "If you’ve talked to a compliance officer at a small institution, you know the position they are in. It can be a thankless job, a bit like playing the position of goalie in hockey or soccer, when the only time THEY are the focus is when things aren’t going well for their ‘team.’ They want to see it stated that something is ok. It’s not enough to NOT see a rule against something, they need it stated that something is in fact acceptable.

"On a related note, I understand that, coincidentally, the Part 745 share insurance rules are part of NCUA’s annual Regulatory Review Process where the agency examines one-third of our existing regulations for consistency, accuracy, and clarity," continued Hauptman. "This is a huge undertaking, and I want to thank the staff for the excellent work done throughout the year. Too often, changes do not get made until problems arise. I appreciate the proactive approach staff have taken to maintain the integrity of NCUA regulations."

NCUA Board Member Rodney Hood said the move will help “ensure confidence in the payout of funds” in the rare case of a credit union failure.
 

Support Financial Wellbeing

Callahan & Associates

Helping members is the heart of the credit union industry. We’ve been talking to credit union leaders and experts at Gallup about the difference between financial health and financial wellbeing, how to measure them, and what it means for credit unions and their members.

Here are some insights from our recent Financial Wellness theme week on CreditUnions.com:

What Financial Challenges Do Members Think They’ll Have In 2021 – A poll by Gallup directly asked credit union members: “What financial challenges do you anticipate in the next six to 12 months?” Read more about the three prominent themes and how to help members.

Driving Market Differentiation Through Member Engagement – This webinar shares key takeaways from Gallup’s Financial Services Study and provides details on how credit unions can differentiate in today’s environment by focusing on the person behind the member. Watch here.

What’s In A Name: Director Of Financial Wellness And Wellbeing – In this interview, Jeff Sobieralski, Director of Financial Wellness And Wellbeing at Teachers Credit Union ($3.9B, IN) talks about his role and how the credit union serves members. Read now and meet Jeff.
Why Financial Wellbeing Is Critical to Member Success – Members who agree that their credit union looks out for their financial wellbeing are three times more likely to be engaged. Learn more about how member success and engagement is tied to financial wellbeing.

Rapid Fire Interview with Tim Green CEO of F&A FCU

Join Michael McCormick in a Rapid-Fire interview (third in a series) with CEO Tim Green F&A Fire Dept FCU, as to how his credit union is doing during this time of COVID and what he feels the future holds. 

https://youtu.be/R8ZgWn2JXIM

Since we cannot get together this year, we thought we would bring the speakers to you. Stay tuned for more interviews.

Join us on our YouTube Channel "NCOFCU," which has interviews, training webinars, and exhibitor presentations.

NCOFCU’s National Board of Directors

Chairman: Michael McCormick Director San Diego Firefighters FCU 
1st V. Chairman: Bonnie Sensing Nashville Firefighters CU 
2nd V. Chairman: David Lantrip Director Houston Firefighters FCU
Treasurer: Gene Benick NCOFCU 
Secretary: Brian Kurzel Director Charlotte Fire Dept. CU
Directors: Linda Williams CEO Akron Firefighters CU, Michael Tobler Chairman Albany Firemen’s FCU, Andy Doyle Chair. F&A CU, John Cowin Chairman Syracuse Firefighters CU 
Associate Directors: Sean Costello Director Boston Firefighters CU, Ronald Jackson Treasurer Firefighter First FCU, Al Comeaux Chairman Baton Rouge CU
Staff: Grant Sheehan CEO
              305-755-3302

 

 

NCUA Failed to Inform Examiners of Consumer Complaints

The NCUA does an effective job of investigating consumer complaints, but often does not determine whether the complaint was a violation that should be sent to agency officials conducting examinations of credit unions, the agency Inspector General said, in a just-released report.

“Based on our review of complaints, we determined that the agency’s consumer complaint process focuses mostly on assisting consumers with resolving consumer complaints with their credit union as opposed to determining whether the credit union has violated a law or regulation,” the IG said.

The report is particularly timely, as the NCUA board debates whether the agency should focus more attention on consumer protection issues. New board Chairman Todd Harper has said that the NCUA is the only banking regulator that does not conduct separate consumer protection tests and that he wants a more concentrated focus on the issue.

When he was chairman, board member Rodney Hood resisted Harper’s efforts to increase consumer protection staff and to develop such an exam.

The IG said that because the agency’s Consumer Assistance Center focuses on complaint resolution, “We have concerns regarding the consumer complaint data and information available to examiners for subsequent review.”

Simply because the complaint center resolves a problem without a violation determination, the credit union could continue to violate consumer protection laws and rules. The IG said that the NCUA instructs examiners not to reinvestigate complaints, therefore, many violations could go unidentified and unreported.

In some cases, the consumer center also communicated contradictory messages to consumers and credit unions. That occurred because the NCUA considers the results of complaint investigations as supervisory actions, which might not be provided to consumers.

In the report, the Inspector General said the agency has said it plans to require examiners to review consumer complaint data more frequently during quarterly reviews.

 

Margins Remain Under Pressure

Credit union earnings will be continue to be depressed over the next two years because of low interest rates and less non-interest income, according to CUNA’s latest forecast.

CUNA’s economic and credit union forecast released Feb. 12 expects the economy to improve much faster than it forecast in November, but it remains pessimistic about credit union margins.

CUNA estimates return on average assets (ROA) for the 12 months ending Dec. 31 was 0.65%, down from 0.93% for 2019. And, it is predicting that ROA will fall to 0.50% both in 2021 and 2022. The forecast is a product of collaboration between economists at CUNA and at CUNA Mutual Group, both of Madison, Wis.

Last year’s ROA “was propped up by fees from significant sales on mortgages and PPP [Payroll Protection Program] loans,” said Jordan van Rijn, CUNA senior economist and the report’s author. “Overall, the very low interest rates and falling loan to share ratio means that credit unions will be forced to place funds in low yielding investments, and newly disbursed loans will receive tiny interest margins.”
However, CUNA has been underestimating credit union earnings. Its current forecast assumes ROA of 0.66% for the fourth quarter of 2020, up from its November forecast of 0.35%.

Callahan & Associates, the credit union company based in Washington, D.C., last week estimated 0.83% ROA for the fourth quarter, up from 0.81% in 2019’s fourth quarter and 0.79% in 2020’s third quarter.

NCUA call reports for the 10 largest credit unions show their fourth-quarter ROA was 1.01%, up from 0.95% in 2019’s fourth quarter and 0.60% in 2020’s third quarter.

Data from the Top 10 credit unions and Callahan show the improvement came from a sharp drop in loan loss provisions and higher non-interest income, particularly from mortgage sales. NCUA’s full set of fourth-quarter data is expected in early March.

For the broader picture, CUNA forecasts a faster economic recovery this year than it had forecast in November.

Last year, Gross Domestic Product (GDP) fell 3.5%, its worst full-year drop since 1946. The unemployment rate fell from its April peak to 6.3% in January, but the pace of recovery slowed significantly over the past few months.

Yet CUNA cited signs of hope in falling COVID-19 cases, rising vaccinations and President Biden’s plan for an additional $1.9 trillion stimulus package that includes expanded unemployment benefits, support for schools and hospitals, and additional direct payments to households.

“For credit unions, the additional stimulus will dramatically increase savings growth and help maintain relatively healthy portfolio quality, and the recovery and low interest rates will support modest loan and membership growth,” van Rijn said. “However, low interest rates will squeeze earnings and the loan to share and net worth ratios will continue to fall.”

Van Rijn said the most significant changes from its previous November forecast include:

•     The economy will grow 3.5% in 2021, up from its previous forecast of 2.5%.
•     Consumer Price Index inflation will rise 2.1% in 2021, up from its previous estimate of 1.2%.
•     The unemployment rate will fall to 5.5% by year’s end, down from its previous forecast of 7%.
•     Savings will grow 15% this year, up from its previous 8% forecast, and assets will grow 13.5%, up from its previous 7% estimate. Both revisions are based on the additional stimulus expected this year.
•     Credit union portfolio quality is expected to be better than previously anticipated. Delinquency rates will rise only slightly to 0.80% in 2021, down from its previous estimate of 1.10%. Net charge offs will rise to 0.60%, down from its previous forecast of 0.80%.

CUNA’s forecast assumes vaccinations will reach roughly half of the population by the summer, the U.S. will approach herd immunity during the second half of the year, and, “given Democratic control of Congress,” Biden will be able to sign a stimulus plan roughly equal to the one proposed in March or April.

Credit unions can expect continued sluggish growth in loans, and fast growth in savings. As a result, the loan-to-share ratio will fall from 73.6% as of Dec. 31 to 65.6% by the end of this year and 64.4% by the end of 2022.

Total loans were $1.9 trillion as of Dec. 31, up 5% from a year earlier, largely on the strength of mortgages and PPP loans. CUNA expects portfolios will grow another 5% this year and 8% in 2022.

“We expect auto lending to recover and mortgage lending to remain strong,” van Rijn said. “However, headwinds to faster growth include fewer PPP loans and households using stimulus funds and mortgage refinancing to pay down existing debt, such as credit cards.”

Savings grew 20.6% to $1.62 trillion last year. “Stimulus will continue the strong deposit growth at credit unions and CUNA economists anticipate savings growth of 15% for 2021 mostly concentrated in the first and second quarters before falling to 5% in 2022,” he said.

Jim DuPlessis CU Times

NCUA’s Four Funds Receive Clean 2020 Audit Opinions

ALEXANDRIA, Va. (Feb. 16, 2021) – The National Credit Union Administration’s four funds again earned unmodified, or “clean,” audit opinions for 2020, according to audited financial statements released today by the agency’s Office of the Inspector General.

The complete 2020 financial statement audits are available on NCUA.gov.

The financial statements, audited by the independent auditor KPMG LLP, cover the National Credit Union Share Insurance Fund, the agency’s Operating Fund, the Central Liquidity Facility, and the Community Development Revolving Loan Fund.
 

View the entire press release

NCUA Senior Staff Discuss Exams, Priorities

ALEXANDRIA, Va.–Saying his “whole heart is in NCUA, its vital work and its mission,” new NCUA Chairman Todd Harper used an introductory webinar to outline his regulatory philosophy and more, while other senior agency officials also touched on issues ranging from examination priorities to concentration risk to liquidity ratios.

The webinar also included a Q&A with credit unions, which is reported below.

Harper, who was elevated by President Biden to the chairmanship after serving on the NCUA board, said credit unions now sit “at the intersection of several crossroads,” noting on one of those roads are credit unions that are prospering, but on another are many CUs that are struggling with earnings.

Harper said when he first joined the NCUA board he established several priorities for the agency, including capital and liquidity, consumer financial education, and diversity, equity and economic inclusion. “In the many months ahead these priorities will guide our agency’s decisions.”

Harper encouraged everyone to work together to promote innovation with an emphasis on security and equity.

“As I begin my chairmanship, I want to share my regulatory philosophy, which can be summed up with the acronym FIRE: Fair and forward-looking; innovating, inclusive and independent; risk focused and ready to act expeditiously when necessary at credit unions, and engaged appropriately with all stakeholders to develop effective and efficient regulation. This FIRE philosophy has been and will continue to be the North star for me and the NCUA.”

Harper, who praised the state system and dual chartering, noted he came of age during the 1970s and 1980s and that music from the era, along with music from Motown, often “strikes a chord with me and I find inspiration in their lyrics.”

He cited Bruce Hornby’s “That Just the Way It Is” to sum up the “core” of the credit union movement and its commitment to providing cooperative credit, including to those of modest means.

Harper said the agency should also consider future challenges, such as climate change, which he said disproportionately affect underserved communities. 

More insights from NCUA Senior Staff,  Read MORE

2021 Travel Plans

WASHINGTON–Credit unions that issue cards with travel-related rewards programs may see a mild rebound in 2021, but the volume will remain down significantly from pre-pandemic levels.
Travel Plans

A new survey conducted by Morning Consult and commissioned by the American Hotel & Lodging Association (AHLA) shows consumers are optimistic about traveling again in 2021, with 56% reporting they are likely to travel for vacation this year.

“That represents a significant decline from pre-pandemic levels, when approximately 70% of Americans took a vacation in any given year, according to OmniTrak (TNS) data,” reported the AHLA. “Since the onset of the pandemic, just 21% of survey respondents reported traveling for vacation or leisure, and only 28% reported staying in a hotel. Prior to the pandemic, 58% of survey respondents said they stayed in a hotel at least one night per year for leisure, and 21% stayed at least one night per year for work.”

Other Findings
The survey also found that while consumers remain optimistic about travel, consumer confidence about staying in hotels is tied to widespread distribution of the vaccine: 11% say they will feel comfortable staying in a hotel when vaccines are available to the general public; 20% when a majority of Americans have been vaccinated; and 17% when they are personally vaccinated.
According to the trade group, the recovery of the travel industry is anticipated to take place in three phases: leisure travel, small and medium events, and group and business travel. While recovery will begin in 2021, full recovery is not expected until 2024.

While business travel itself will remain below 2019 levels for some time, business travelers express greater comfort in traveling for any reason compared to adults overall, and they are more likely to say they will travel more in 2021, the AHLA reported.

Role of Vaccines
“Leisure travel demand is projected to begin increasing in Q2-Q3 of 2021 as vaccine distribution increases across the country and consumers can connect with family and friends,” the organization said. “In the year ahead, Americans say they are most likely to travel for a family event such as a wedding or family reunion (51% likely to travel), while many are likely to travel over summer holidays, led by the Fourth of July (33%) and Labor Day (28%).”

Is another housing bubble brewing?

While there have been fears expressed by some of a repeat of the housing bubble that led to the housing crisis just over a decade ago, numerous real estate analysts say they believe the market fundamentals are much stronger now and that the sharp increase in home prices reflects low rates, a lack of inventory, and demographics.

To be sure, the market is hot in many markets, with home sellers receiving multiple cash offers, often over the listed price, on homes. Some analysts, including those at Swiss banking giant UBS, have published charts showing how home prices are outstripping both wages and rents, reported USA Today. Home prices have appreciated more than 60% since November 2012, incomes have only appreciated by 20% and rents by 30% over the same time period, the report added.

“But unlike the real estate boom that led to the Great Recession, this nationwide price spike is not being fueled by a wholesale collapse in lender ethics,” USA Today reported “There aren't any low-doc or no-doc loans to be had and borrowers are having to do much more than fog a mirror to get funding.”

‘Chronic Lack of Supply’

"For over a decade, we've had a chronic lack of supply of housing," Marco Santarelli, CEO of Norada Real Estate Investments in Laguna Niguel, Calif., told USA Today. "We need 1.62 million units a year to keep pace with organic demand, but we produce significantly less. We're about 370,000 units short each year."

Santarelli added that the supply imbalance will only get worse as more than 140 million millennials and members of Gen Z move into rental units and starter homes in the years ahead.

"About 52% of young adults from 18 to 29 are still living with their parents," Santarelli told USA Today. "That's the highest rate in over 110 years. These people have to go somewhere and that's why I'm so bullish about real estate over the long term."

Out of Balance

But healthy fundamentals don't mean there aren't worrying distortions in the market, USA Today added.

“With the Federal Reserve continuing to buy Treasury bonds and other securities under its quantitative easing program, interest rates are being held artificially low as dollars are being pumped into the economy,” USA Today stated. “That makes borrowing cheap and encourages investors to buy riskier assets like stocks and real estate, driving prices of those assets ever higher.”

The analysis acknowledged that at a certain point, interest rates will rise and there won't be enough buyers coming in from more expensive markets to keep paying the higher prices. “Either development, or both, could lead to a pullback in prices,” USA Today said.

Also playing a role: the moratoriums on evictions and foreclosures are distorting the market and it’s not clear what will happen when the moratoriums are lifted.

And in many markets, rents have been dropping. In San Francisco, rents fell 24% in 2020, according to Zumper.com, which tracks rents across the country. Rent were downs nearly 20% in New York and 17% in Boston.

Rents Head in Opposite Direction

But in other cities like Newark, N.J., Sacramento, Calif., and Richmond, Va., where people are relocating, rents are moving sharply in the opposite direction.

Median home prices in cities experiencing major out-migration, however, have not fallen – at least not yet. New York, for instance, saw rents drop by 20%, but its median home prices rose 6%. The same trend holds true in San Francisco, Boston, Los Angeles and Washington, D.C., USA Today added.

"We had a 10.2% increase in home prices in Sarasota (Fla.) in 2020," one analyst told USA TODAY. "What I'm concerned about is that prices will continue to appreciate at 10% to 15% a year and that's not sustainable."

Don’t Refi. Modify

The interest rate for a 30-year fixed-rate mortgage has hovered around the 3.0% mark for six months, making this a desirable time to buy or refinance a home. Indeed, performance data from the second half of 2020 shows refinancing is soaring at credit unions. At Star One Credit Union ($10.0B, Sunnyvale, CA), though, modifications are more popular than refis.

California’s fourth-largest credit union by assets is headquartered in the heart of Silicon Valley. It holds its first mortgage originations on the books so it can offer competitive terms both at the time of origination as well as later in the life of the loan. For decades, Star One has modified the interest rate and monthly payments on active loans in good standing upon request, driving loyalty among members.

All in all, the credit union’s real estate modification program boasts a process that is easier and more member-friendly than a refinance, says Victoria Tabler, Star One’s vice president of real estate lending. And there’s no limit on the number of times a member can modify.

For example, rather than paying closing costs and other fees for a refinance, borrowers pay 0.5% of their outstanding loan balance — with a minimum of $750 and a maximum of $1,500. The loan amount stays the same, the rate and payments go down, so the credit union doesn’t have to reverify the borrower’s ability to repay, which cuts down on time and labor expenditure.

“The process is easy,” Tabler says. “A member submits a request through our website, we review and prepare a two-page modification agreement, the member provides a single signature, and we make the change.” 

Read more HERE

FIREFIGHTERS FIRST CREDIT UNION ADDS DIGITAL RECEIPTS TO THEIR MOBILE BANKING APP

January 2021— LOS ANGELES, CALIFORNIA – Firefighters First Credit Union launched Digital Receipts within their mobile banking app, FireFirstCU. Digital Receipts allows members to capture purchase receipts from any source—paper, email or online—and store them in a single, searchable cloud database accessed
from any mobile device.

“Paper receipts are a nuisance,” said Kelly Ramsay, Firefighters First Credit Union’s Senior VP, Marketing. “Most of our members don’t have a good system for keeping them. Email receipts makes tracking purchases easier but merging them with paper records becomes a headache at tax time. Digital Receipts solves everything.”

The Digital Receipts feature also allows users to set alerts for returns. “I think everyone has had the experience of hunting down a paper receipt for an item you want to return, only to find you’ve missed the allowable return window,” said Ramsay. “You can capture a receipt and set an alert right at the point-of-sale. It only takes a few seconds longer than stuffing it into your wallet.”

Digital Receipts is the first of several upgrades Firefighters First will be adding to their mobile app. “Our members rely on their mobile devices for banking. Firefighters often don’t have the time or opportunity to sit at a desk and open a laptop,” said Ramsay. “Firefighters exemplify trust, loyalty, and service and we want to reflect that in the way we take care of our members’ financial life.”

For more information, please visit www. https://www.firefightersfirstcu.org/Resources/Digital/Mobile-Banking/Digital-Receipts
###

Piedmont Advantage CU Selects Dolphin Debit to Manage ATM Fleet

WINSTON-SALEM, N.C.–Piedmont Advantage Credit Union has selected Houston-based Dolphin Debit, the full-service ATM management company, to manage its fleet of ATMs.

The $390-million credit union has a dozen ATMs, which are deployed at most of its branches as well as other high-traffic locations. When it turned over the management of its machines to Dolphin Debit, it also got all-new ATMs installed at its many service locations.

Piedmont Advantage had been thinking about outsourcing for some time before committing to Dolphin Debit, according to Sandy Milton, VP-service strategy with the credit union.

“We started talking with Dolphin Debit a couple of years ago,” Milton said, “and the more we learned about outsourcing and Dolphin Debit’s expertise, the more we became impressed with Dolphin’s ATM network services.”

Smart ATM Technology

She noted that Piedmont Advantage did consider a couple of other companies before deciding to partner with Dolphin Debit.

“Dolphin Debit’s outsourcing services allowed us to start the process of installing smart ATM technology, reducing transactional activities in the branches,” Milton continued. “Our branch teammates can now use their time with members to problem-solve and assist with managing finances.”

Milton added that ATMs are and will continue to be an important aspect of Piedmont Advantage’s service strategy. That includes more deposit ATMs and – likely starting next year – a migration to ITMs, interactive teller machines, according to the company.

“For some credit unions, it just takes a while to build to that tipping point when ATM management gets too burdensome,” said Gary Walston, CEO of Dolphin Debit. “That’s when they really recognize that partnering with us will provide the relief that they are looking for.”

For info: www.dolphindebit.com.