First-responder Credit Union Newsroom

  By Frank J. Diekmann - Frank is a Keynote speaker at this year's New Orleans Conference. As I was placing my bag in the trunk of my Uber at the San Antonio airport last week, I couldn’t help noting his license tag began with “CU.” Occupational hazard, I suppose, but I immediately wondered if he was a member or had worked at a credit union, or, who knows, maybe a CU had financed the car. Two minutes into the ride downtown—thank you, San Antonio, for not only not burying your river in a pipe but also for having an airport that isn’t another flight away from the city center—the driver asked the Uber-driver-mandated question about why I was in town. “I’m here to speak to a credit union conference,” I responded. And given the...

Have you ever stopped and thought about how remarkable cell phones are? With so many new models emerging on the market, it’s easy to take for granted how much of an impact they’ve had on our lives. With this small, powerful tool, we have unlimited access to networks, information, and relationships – all in the palm of our hand. Technology continues to shape much of who we are as a society today, and your association is no exception. In the late 1990s, Larry Page and Sergey Brin were two Ph.D. students at Stanford, who began collaborating (in their garage!) on a new piece of technology after it appeared to Page in a dream. When they started telling others about their revolutionary idea for a “search engine,” they were mocked and often disregarded by corporate investors. Despite the lack of faith and support, they persevered. Three fundamental beliefs would drive Page and Brin as they began to expand their company: People want to do meaningful work. They want know...

Consumers and businesses have settled into new digital banking patterns that are disrupting the primary financial status of legacy banks and credit unions, impacting growth and longstanding relationships. To respond, financial institutions must consider new targeting and product development alternatives that may include a national footprint. One of the major impacts of the pandemic is the increased comfort level consumers have with digital interactions and the decreased reliance on bank branches. This has significantly impacted the array of financial institutions a consumer will consider when they want a financial solution, and where they are opening new accounts. The result is a dramatic increase in the number of consumers who have their primary banking account at a fintech and/or big tech organization. To respond to this shift in banking loyalties, traditional financial institutions must decrease their reliance on branch footprint, and consider a much broader digital acc...

The old Benjamin Franklin saying, “if you fail to prepare, you are preparing to fail,” rings true even today when credit unions fail to plan for their futures. For far too many credit unions, especially smaller ones, the failure to adopt and implement a succession plan needlessly exposes them to the whims of outside interests and the potential that a merger is their only option when senior leaders leave. An NCUA analysis found that poor management of succession planning was either a primary or secondary reason for nearly one-third of all credit union consolidations. While the pandemic initially slowed the pace, the number of mergers is now, once again, increasing. And the lack of a succession plan is a primary reason why. A succession plan allows an organization to prepare for the unexpected and thereby minimize service disruptions during management transitions. A credit union board’s failure to plan for the transition of its management could come with high costs, includ...

Callahan's Creditunions.com  The NCUA approved major revisions to the 5300 Call Report that take effect in the first quarter of 2022. These changes involve substantial reorganization and restructuring of most sections of the call report, including the removal, addition, and modification of more than 1,000 combined account codes. The changes are part of the Call Report Modernization Project that began in 2016. The project aims to reduce the reporting burden for credit unions by: Streamlining the call report process. Reorganizing and improving data collection. Accommodating the complex credit union leverage ratio (CCULR) and the risk-based capital (RBC) schedule. CCULR Versus RBC? Which One Is Right? Credit unions with less than $500 million in assets are considered non-complex credit unions. The regulatory capitalization rules for these credit unions remain unchanged. Credit unions with more than $500 million in assets are considered complex c...

 WASHINGTON—Changes to NCUA’s rating system—to CAMELS from CAMEL—start April 1. Credit unions with examinations beginning on or after April 1 will fall under the new system. The CAMELS system, which stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity, and now, Sensitivity to market risk, was approved by the NCUA board in 2021. CUNA reminded that under the CAMELS rating system: The “S” component addresses sensitivity to market risk and interest rate risk (IRR) governance. It documents a credit union’s market sensitivity level and how the credit union measures, monitors, and manages market sensitivity.  The “L” component evaluation has been modified to only consider available sources of funds and liquidity risk...

 NEW YORK—The two biggest U.S. card networks are preparing revisions to their interchange schedules that at least one research firm says will cost U.S. merchants an estimated $475 million in additional transaction fees. Though Visa Inc. and Mastercard Inc. have historically revised their rate schedules each April and October, “this April is particularly significant,” Callum Godwin, the Atlanta-based chief economist for CMSPI, a United Kingdom-based research firm, told Digital Transactions. The firm’s estimates indicate the changes in Visa’s rates will add up to a net $145 million in additional cost to acquirers. For Mastercard, the impact will net out to $330 million. The networks do not collect interchange. Merchant processors pay in...

Credit unions, like all mortgage lenders, are under pressure to meet member expectations for fast, secure and convenient digital experiences across the board. Credit unions must meet and exceed their members’ demands to remain competitive. And to do that, credit unions need to automate the lending process. To help credit unions on their automation journeys, here are five mortgage processes they should automate now: 1. Appraisals Typically, appraisals are among the longest, most expensive and most essential pieces of the mortgage process. Automating appraisals offers benefits to both credit unions and their members. For example, credit unions can use data analysis tools to analyze such factors as comparable home sales to determine home valuations in seconds, saving their members the cost of hiring appraisers. Automating the appraisal also accelerates the mortgage process, as members don’t have to wait weeks for their credit unions to receive their appraisals. 2. Cross-Sel...

Over the last decade, the function of a credit union branch has shifted and there have been two contributing factors: The global pandemic and expedited digital transformation. First, the pandemic has drastically changed the way members expect to bank. At the height of the pandemic, many branches closed or reduced traffic. Members that wouldn’t typically have chosen digital banking opted for it to meet their banking needs. The shift away from branch-based services during the pandemic helped baby boomer and Gen X members adopt digital banking when they may not have otherwise. Even without the impact of the pandemic, the transformation to digital-first processes and products has been underway for some time. This transformation has steadily been shifting the branch’s purpose away from basic transactions to more sophisticated member interactions. The pandemic merely accelerated this shift, and it is becoming vital for credit unions to embrace digital transformation to stay com...

  Here are strategies recommended by Kremer and D’Acierno for making the comeback: 1. Meet credit-ready consumers where they are looking for credit. Traditional outbound marketing, even in digital forms, depends on grabbing the right eyeballs at a time when the consumer is actually seeking credit. That’s a tough challenge, according to Kremer. He suggests that financial comparison sites, such as Bankrate.com, The Ascent and NerdWallet, present a better opportunity for exposure. Today’s consumers, should they not have an offer of financing directly with their prospective purchase, are not going to wait to stumble across a web banner promoting loans, suggests Kremer. Proactively, they go hunting the best credit deals, he says, and the comparison sites are the first stop. 2. Seek opportunities where people are seeking new credit. Even as the “new normal” continues to unfold, a key opportunity for lenders is the home improvement market, which began during the pandemic, a...

With consumer borrowing returning gradually to normal levels, banks and credit unions have a limited opportunity to rethink how they offer credit and build the systems to make new strategies possible. As U.S. consumer lending climbs from the depths it fell to in 2020, signs are strong that banks and credit unions that want to regain, maintain, or even grow market share will have their work cut out for them. Facing a combination of new competitors, new forms of consumer credit like “buy now, pay later” and increasing digital expectations from consumers, financial institutions will have to bolster their marketing, add distribution channels and partnerships, and consider new forms of credit. These challenges will run through 2022 and at least into 2023 in some aspects of consumer credit. The challenge for traditional lenders like banks and credit unions will be staying in the game as demand grows sufficiently to drive credit appetite. Andreas Kremer, a partner with McKinsey, warns that ma...

Fact: Most employees hate meetings. Not only do they take up a large amount of time—the average professional spends  three hours each week  in a conference room—but they’re often not terribly  productive .   There are  55 million meetings  every day in the United States alone. Many items on meeting agendas could be accomplished in a daily or regular stand-up meeting, which quickly gets your employees aligned and focused on overall goals. Not only do stand-up meetings reduce time spent in meetings by  34 percent , but they’ve also been shown to  boost group productivity .   What is a stand-up meeting?   Stand-up meetings are regularly held gatherings—typically daily—during which team members share status reports on their work. They are often held while attendees stand, which helps ensure a short check-in rather than a lengthy discussion.  Stand-up meetings (also known as daily scrum meetings) have long been pop...

When it comes to the bank versus credit union (CU) debate, it’s clear where the loyalty of younger consumers lies. A PYMNTS survey found younger consumers show a stronger preference for national banks than for CUs. There’s a bright spot here for CUs, however, as more consumers between the ages of 18 and 24 use CUs than those 24 to 34 and 35 to 44, meaning CUs have an opportunity to see a comeback with the youngest generation of banking customers. The survey showed that the greatest preference for CUs can still be found among baby boomers and seniors, with 60% of those ages 65 and older reporting CU membership. In addition, 54% of those respondents between 55 and 64, and 35% of those between 45 and 54, are CU members, while just 19% of consumers ages 35 to 44 and 14% of those ages 25 to 34 said they turn to CUs for their banking. While 36% of consumers ages 18 to 24 select national banks for their financial services, 26% said they belong to CUs. CUs have a disadvantage here, in that the...

Jerome H. Powell, the Federal Reserve chair, told senators on Thursday that policymakers were prepared to rein in inflation as they tried to fulfill their price stability goal — even if that came at an economic cost. “We’re going to use our tools, and we’re going to get this done,” Mr. Powell told the Senate Banking Committee. Mr. Powell has signaled that the Fed is poised to raise interest rates by a quarter percentage point at its meeting that ends March 16, and follow up with additional rate increases over the next several months. Fed officials are also planning to come up with a strategy for shrinking their vast holdings of government-backed debt, which will increase longer-term interest rates. The suite of policy changes will be an effort to weigh on demand, tamping down price increases that are running at their fastest pace in 40 years. The Fed aims for 2 percent price gains on average over time, but inflation came in at 6.1 percent in the year through January. Asked if the Fed...

WASHINGTON—President Joe Biden has released a statement on domestic cybersecurity as he seeks to elevate his previous warning about the potential for Russia to conduct cyberattacks on the U.S. The statement explained that the enhanced warning comes based on evolving intelligence that the Russian government is exploring options related to cyberattacks. The Administration has also issued a new fact sheet that includes actionable steps to harden cybersecurity, NAFCU noted. "My administration will continue to use every tool to deter, disrupt, and if necessary, respond to cyberattacks against critical infrastructure," wrote Biden. "But the federal government can’t defend against this threat alone. Most of America’s critical infrastructure is owned and operated by the private sector and critical infrastructure owners and operators must accelerate efforts to lock their digital doors." To help reduce cybersecurity risk across the United States, the Cybersecurity and Infr...

MADISON, Wis.—In a housing market that has seen skyrocketing valuations over the past few years, could the real home price growth rate turn negative? According to four different analysts, that could happen within the next two years—or even in 2022. As part of CUNA Mutual Group’s February Trends Report, the company’s economists noted that real home prices (inflation-adjusted) increased 8.7% in 2021, the fourth-fastest pace in modern history, a trend line that concerns regarding affordability and home price bubbles. Nominal home prices rose 15.7% in 2021, significantly faster than the cost of living as measured by the Consumer Price Index, which rose 7.0%. “If we subtract this 7.0% inflation rate from the 15.7% nominal home price growth rate, we can calculate the real home price growth rate of 8.7%. This is the 10th consecutive year of nominal home price growth exceeding the rate of inflation of the goods and services,” the company stated. A Cyclical Market CUNA Mutual Group reminded th...

MINNEAPOLIS —What’s being called the “Great Payments Disruption” is taking place as increasingly more consumers embrace digital payments, according to a new study. The study, “ The Great Payments Disruption ,” was conducted by Entrust, a provider of trusted identity, payments and data protection solutions, and is based on a survey of 1,350 consumers from the United States, Canada, United Kingdom, Germany, Saudi Arabia, United Arab Emirates, Singapore, Australia and Indonesia, who have made or received digital payments in the past 12 months. “This study highlights how more than ever, consumer banking is about digital interactions first, and that they must create that digital experience with security at its foundation,” said Jenn Markey, vice president of product marketing at Entrust. “Our study found both an overwhelming preference for online banking and a significant concern about fraud – in fact, more than two-thirds of consumers in our survey changed their bank or credit union a...

WASHINGTON – Consumer groups are hailing an announcement by the big three credit bureaus-- Equifax, Experian, and TransUnion—that they will change how they report medical debt, which will result in the removal of nearly 70% of medical bills from credit reports. The credit bureaus announced that, beginning in July, they will remove medical debt that has been paid off and unpaid medical debt less than $500. Going forward, they will wait a full year before adding new unpaid medical debts to credit reports. In response to the announcement, numerous analysts praised the move: “We are thrilled that the credit bureaus are removing the vast majority of medical debt from credit reports,” said Chi Wu, staff attorney at the National Consumer Law Center. “Medical debt has damaged the credit reports of tens of millions of consumers for far too long.” Jenifer Bosco, staff attorney at the National Consumer Law Center, noted that the credit bureaus’ action comes on the heels of a report about medic...