"Vehicle sales are victim to the continuing supply chain issues in the semiconductor industry,"

ARLINGTON, Va.—Total vehicle sales fell from 13 million annualized units to 12.2 million annualized units in September, with monthly sales levels down 25.2% year over year.




Curt Long

"Vehicle sales are victim to the continuing supply chain issues in the semiconductor industry," said NAFCU Chief Economist and Vice President of Research Curt Long. "The economy can handle significantly higher sales, and it's coming at a cost to GDP – a quarter of a percentage point in the first three quarters of the year just in vehicle sales alone.

"Worse yet, there is no end in sight as U.S. automakers posted the lowest production in August on record, down 36.4% from the previous record low set in 2020," continued Long. "Prices are reflecting supply issues, with used cars up 35% since this time last year and 63% compared to before the pandemic."

Car sales declined this month from three million annualized units to 2.6 million annualized units while light truck sales slipped to 9.6 million annualized units.

Light Truck Sales in Pothole

Total sales are down 25.2% from September 2020 and are at their lowest rate since May 2020. Light truck sales have hit their lowest level since May 2020.

"Vehicle sales will remain constricted by semiconductor shortages into 2022 with market equilibrium remaining even farther off," concluded Long.

CUs Eliminating or Reducing Fees: The List Grows

Power Financial Credit Union (PFCU) announced on Monday that it has decided to eliminate all overdraft and non-sufficient funds fees for members with personal or business accounts. The new policy went into effect on Oct. 1. 

Headquartered in Pembroke Pines, Fla. ($921.3 million in assets, 33,029 members), PFCU has become the only credit union in South Florida to remove these fees.

According to a statement from PFCU, the decision appeared to revolve around the fact that overdraft and non-sufficient funds fees disproportionately hurt individuals and families already struggling financially.

“Banks and credit unions charged $30 billion in overdraft fees in 2020. But what is even more striking about overdraft fees is that they disproportionately hurt those individuals and families that are most vulnerable financially,” Allan Prindle, president/CEO of PFCU, said. “We don’t think that is right, so we decided to do what we always do and put the financial needs of our members above all else by taking the industry-leading step to get rid of all overdraft and non-sufficient funds fees.”

The statement from the credit union said, “With the elimination of overdraft and non-sufficient funds fees, Power Financial Credit Union is making banking more accessible, inclusive and forgiving.”

Prindle added, “We are helping our hard-working members keep more money for the things that matter most. This member-first commitment is what sets us apart from profit-driven financial institutions.”

According to reporting by CU Times, PFCU’s announcement marked the fourth credit union this year to publicly state that it had eliminated or reduced overdraft and non-sufficient funds fees. Those credit unions that made similar announcements included:

• The Oklahoma City-based WEOKIE Federal Credit Union ($1.3 billion in assets, 59,901 members) announced in September that it reduced its fees from $27.50 per occurrence to $15 per occurrence.
• The Chicago-based Alliant Credit Union ($14.2 billion in assets, 607,898 members) announced in August that it eliminated overdraft and non-sufficient funds fees on all checking and savings accounts.
• The Madison, Wis.-based UW Credit Union ($4.6 billion in assets, 300,320 members) stated in July that it cut its overdraft and non-sufficient funds fees from $30 per occurrence to $5.

According to PFCU’s FAQ page about the fee eliminations, the credit union stated, “By eliminating overdraft and non-sufficient funds fees, we’re putting almost $1 million annually back in our members’ pockets for the things that matter most.”

In July, one of the largest digital-only banks in the U.S., Ally Bank, eliminated overdraft fees on all accounts. At the time of the announcement, Ally Bank CEO Jeffrey Brown said of the fees, “It is time to end them.”

NCUA: No NCUSIF Premium to be Charged

ALEXANDRIA, Va.—No Share Insurance Fund premium will be needed now to bolster the NCUSIF, the NCUA board stated Thursday, as the equity ratio of the fund stood at 1.23% at the close of the second quarter and is projected to be 1.28% at year-end.

However, two board members shared concerns over the fund’s status.




The 1.28% is eight basis points away from the 1.20% statutory floor for the fund, when a restoration plan would be required.

NCUA reported second quarter financial statistics show the NCUSIF recorded net income of $46.3 million and total income of $60 million. Operating expenses were $51.1 million for the quarter. READ MORE

CU Switches ATM Management to Dolphin Debit (After Previous Vendor Didn’t Know 1 Machine Had Been Stolen)

SALINAS, Calif.–allU.S. Credit Union has switched to Dolphin Debit for management of its ATMs.




The credit union, which serves the employees of Monterey County as well as the local community, said it moved to Dolphin Debit, the full-service ATM management company, after tiring of its former service provider’s inability to maintain the fleet in good working order or even to determine when some of the ATMs went completely out of service.

As an example, CEO Patrick Redo recalls thieves actually stealing one of the ATMs that the credit union had placed in a Monterey County facility. The previous provider didn’t realize the theft had taken place until the county’s security people discovered it, according to the company.

“On a weekend the thieves came in and attached a chain and dragged it through the door,” Redo said. “But it was typical because our prior vendor never knew when the ATMs were operating or not.”

If ATMs went down, the credit union usually learned of the outages from cardholders attempting to use the machine, Dolphin Debit said.

Dolphin Debit now manages the ATMs that allU.S. has placed in various county facilities and government buildings while the credit union still manages one branch-based ATM on its own.

According to Dolphin Debit, for allU.S. ATMs are powerful promotional items in key locations where potential members work or do business, making dependable, working machines top priority for the credit union. But Redo points out that the ATMs can only help strengthen the credit union’s name recognition and visibility if they’re working.

No Incidents

“We used to experience about 10 ATM incidents per month. Since we moved to Dolphin, we don’t see any,” Redo said. “We wanted better service, and we feel like now it’s ‘mission accomplished.’ ”

“There really isn’t much use in having a fleet of ATMs if a credit union can’t count on them,” said Joe Woods, Senior Vice President of Marketing and Strategic Partnerships for Dolphin Debit. “Our clients will tell you that dependability, reliability, and quick service when problems do occur are some of the biggest reasons why they continue to be so pleased to work with us.”

One Proposed LIBOR Replacement Has ‘No Clothes,’ Says SEC Chairman

WASHINGTON–Gary Gensler, chairman of the Securities & Exchange Commission (SEC), believes one of the benchmarks being proposed as a replacement for LIBOR has “no clothes.”

Gary Gensler

In remarks before the Alternative Reference Rates Committee’s SOFR Symposium, Gensler said he was sharing his own views and not those of the SEC, and his view does not align with many of those backing a move to the Bloomberg Short-Term Bank Yield Index from the London Interbank Offered Rate (LIBOR).

“As some of you may know, when the topic of LIBOR comes up, I sometimes find myself thinking about Hans Christian Andersen and Warren Buffett. Others of you might be wondering why I’d mention these two men — born 125 years and an ocean apart — in the context of LIBOR,” Gensler told the meeting. “Well, as Hans Christian Andersen wrote in his famous folktale, ‘The Emperor’s New Clothes,’ the emperor has no clothes.”

And who is the emperor? It’s many of the replacement rates being suggested to fill LIBOR’s long-time place, said Gensler, adding he believes a good number of those replacements indices share many of the same failings as LIBOR.

Appropriate Clothing

“Today, as we transition away from LIBOR, I want to be sure our replacement rates are appropriately clothed,” Gensler said. “To that end, I have several concerns about one rate that a number of commercial banks are advocating as a replacement for LIBOR. This rate is called the Bloomberg Short-Term Bank Yield Index (BSBY). I believe BSBY has many of the same flaws as LIBOR. Both benchmarks are based upon unsecured, term, bank-to-bank lending. BSBY has the same inverted-pyramid problem as LIBOR. Like with LIBOR, we’re seeing a modest market, shouldering the weight of hundreds of trillions of dollars in transactions. When a benchmark is mismatched like that, there’s a heck of an economic incentive to manipulate it.”

According to Gensler, the markets underpinning BSBY not only are thin in good times; they virtually disappear in a crisis. “Last spring, the primary commercial paper lending market evaporated for about five weeks during the initial stresses of the pandemic,” he noted.

Preferable Alternative

“That’s why I agree with the ARRC that the Secured Overnight Financing Rate (SOFR), which is based on a nearly trillion-dollar market, is a preferable alternative rate,” said Gensler. “Earlier, I said that the emperor is LIBOR. I’d hate if we replaced one clothes-less emperor with another based on the unsecured, term, bank-to-bank lending market that has dried up. This brings me to Warren Buffett. He’s said, “You only find out who is swimming naked when the tide goes out. I worry that a crisis will reveal BSBY’s flaws all too clearly. Let’s not wait for the tide to ebb to see the emperor still has no clothes

Economists with both credit union trade associations saw some good news in the CPI numbers.

ARLINGTON, Va.—On a seasonally adjusted basis, overall consumer prices rose 0.3% in August, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew 5.2% over the 12-month period.

Economists with both credit union trade associations saw some good news in the numbers.

NAFCU Chief Economist and Vice President of Research Curt Long noted that this is the "slowest increase in both CPI and Core CPI since February."

Core prices (excluding food and energy costs) rose 0.1% compared to July. Year-over-year core CPI growth was 4%.

"Prices dropped for used vehicles (-1.5%), hotel rates (-3.3%), and airfare (-9.1%) after rapid increase earlier this summer," said Long. "This is the first decline in auto prices since January."

Energy prices rose 1.6% during the month, following a 1.5% rise in June. From a year ago, energy prices were up 23.6%. Additionally, food prices rose 0.7% in July and were up 3.4% compared to this time last year.

"Supply chains are still driving increased costs as material and labor shortages cause ripples across the globe," added Long. "The Fed remains adamant that inflation will cool over time and inflationary pressures will abate as supply bottlenecks ease, but housing costs will be key, as rent is about a third of the basket of goods calculated by the Labor Department. It appears the summer spike in prices has passed, and although inflation will remain above 2% from some time, it won’t warrant a rate hike until 2023.”

CUNA Analysis

Meanwhile, CUNA Senior Economist Dawit Kebede issued said of the numbers, “The good news is that the August inflation report was on target with what was expected. The slight monthly price increase of 0.3% is close to the pre-pandemic average but the annual rate remains high compared to last year.

“On the other hand, there are indications that the strong economic growth we saw in the second quarter is slowing down. We know this because of the decline in the consumer sentiment index amid concerns of the Delta variant and a slower job market.

“The Federal Reserve will probably delay slowing its purchase of Treasury and mortgage-backed securities despite slight indications that the price increase in durable goods is transitory, as illustrated by the reduction in used car prices. This is because we are far from maximum employment.”

Significant reduction in overdraft fee.

 

OKLAHOMA CITY, Okla.––WEOKIE Credit Union has become the latest to announce a significant reduction in its overdraft fee.




The $1.3-billion WEOKIE said it is reducing its NSF charge by nearly 50%, cutting the fee to $15 per occurrence from $27.50.

WEOKIE Federal Credit Union is the first financial institution in Oklahoma to announce a decrease of their members’ overdraft and non-sufficient funds service charges by almost 50%. The applies to all accounts, including checking and savings.

“WEOKIE strives to be a positive force in the community, and many Oklahomans are facing financial hardships in the face of a pandemic and inflation,” said WEOKIE President and CEO Jeff Carpenter in a statement first reported by the Cornerstone CU League. “We are eager to step up and help our members’ financial well-being by delivering real solutions, building trust, and helping our members grow their savings.

‘Do The Right Thing’

“WEOKIE’s mission statement is, ‘Do the right thing,’ and I believe we are doing right by our members with this decision,” Carpenter added. “We believe this move is critical to achieving our vision of becoming our members’ most trusted financial partner and two of our strategic priorities related to providing financial well-being for all and delivering the benefits of a cooperative ownership.”

As CUToday.info has reported, WEOKIE is not alone in reducing its NSF fee. In Madison, Wis., UWCU has reduced its overdraft fee to $5. Ally Bank has announced it is eliminating its overdraft fees, and so have Alliant Credit Union and Westerra Credit Union.

First mortgages, used car loans and credit cards were responsible for most of the lending gains among credit unions in July.

New car loan balances continued to decline.

The Fed’s Consumer Credit Report released Wednesday showed credit unions held $61.5 billion in credit card debt July 31, up 1% from a year earlier — the first 12-month gain since April 2020.

Balances rose 0.9% from June to July, compared with an average June-to-July gain of 1.2% from 2015 to 2019.

Recovery from pre-pandemic levels was slow. Card balances were still 6.5% below February 2020 levels at credit unions — unchanged from June. Balances at banks were 9.1% below February 2020, an improvement from June’s 9.5% deficit.

Credit unions held 6.4% of the nation’s credit card debt as of July 31, unchanged from a month or a year earlier.

Banks held $860.3 billion in credit card debt July 31, up 0.9% from a year earlier and up 0.5% from a month earlier. Their share was 90% in July, unchanged from June and up from 89.7% in July 2020.

CUNA’s Monthly Credit Union Estimates released Sept. 3 showed credit unions held $1.23 trillion in loans as of July 31, up 4.8% from a year earlier. The 0.8% gain from June was only slightly behind the pre-pandemic average of 0.9%.

New car loans fell 2.1% to $140.6 billion, while used car loans grew 6.4% to $254.1 billion.

From June to July, new car loan balances fell 0.1%, while used car balances rose 0.8%. The pre-pandemic average was 1% for both.

First mortgages grew 8% to $548.9 billion. A year earlier, from July 2019 to July 2020, it rose 13.4%. Second-lien mortgages fell 6.1% to $85.1 billion. A year earlier, it fell 2.4%.

The 60-day-plus delinquency rate was 0.44% as of July 31, unchanged from June and down from 0.54% in July 2020.

• The nation’s 5,218 credit unions had 129.4 million members in July, up 3.3% from a year earlier. Other balances and 12-month changes in the report included:
• Loans per member grew 1.5% to $9,532. A year earlier, from July 2019 to July 2020, they rose 3.7%.
• Assets grew 13.7% to $2.05 trillion. A year earlier, they rose 17%.
• Fixed-rate first mortgages rose 12.5% to $431.7 billion.
• Adjustable-rate first mortgages fell 6.1% to $117.2 billion.
• Second mortgages fell 10.2% to $29.6 billion.
• Home equity lines of credit fell 3.7% to $55.5 billion.
• Savings grew 14.8% to $1.77 trillion, compared with an 18.5% gain a year earlier.
• Savings per member grew 11.1% to $13,656, compared with a 14.7% gain a year earlier.

 

Greater New Orleans FCU has selected Dolphin Debit to manage its fleet of ATMs.

NEW ORLEANS
Greater New Orleans FCU has been managing its own ATMs, but was seeing increasing service delays with its previous provider, according to the company.

“It was definitely all about service,” explained Heather Rodgers, chief operating officer for the credit union. “Repair times are critical to get a machine up as soon as possible. Now, if a machine goes down Dolphin informs us before we even realize it, and has technicians on the way.”

Greater New Orleans FCU has ATMs at each of its three branches, and is in the process of adding a drive-up machine at its busiest branch, in addition to the walk-up machine already in place. ATMs are an important part of the credit union’s member service strategy, as GNOFCU serves a large number of special employee groups, as well as the local underserved population as a CDFI, noted CEO Shelley Sanders.

Can’t Have Long Lines

“We are a shared branch credit union, so we service other credit unions,” Sanders said. “Our members need these ATMs to easily access cash and not wait in long lines.”

Before selecting Dolphin Debit, the credit union said it evaluated other service providers, putting a lot of weight on the recommendations of other credit unions. As Sanders noted, “Dolphin Debit was the one company recommended by everyone I reached out to.”

According to the company, the switch has gone smoothly and improved ATM uptime and maintenance.

“A credit union’s ATMs are vitally important touchpoints for members,” said Joe Woods, SVP-marketing and strategic partnerships for Dolphin Debit. “Keeping machines available and in service is critical, and when there are problems, response has to be immediate. That is our specialty.”

Fired Employee Takes Revenge Against a NYC Credit Union’s IT System

In an act of revenge for being fired from a New York City credit union, a Brooklyn woman accessed the computer system and deleted its mortgage applications and other sensitive information maintained on a file server, according to federal prosecutors for the Eastern District of New York.

Juliana Barile, 35, pleaded guilty to one count of computer intrusion during a federal court hearing on Tuesday in Brooklyn. Court documents only identify the credit union in New York City as “an entity the identity of which is known to the United States Attorney.”

Prosecutors do not say in court documents why they are withholding the name of the credit union. Barile’s attorney declined comment.

A transcript of the 60-minute plea hearing indicates that Barile signed a plea agreement with prosecutors on Aug. 30.

Barile was fired from her position as a part-time employee with the credit union on May 19. Two days later, she remotely accessed the credit union’s file server from her Brooklyn home, and within 40 minutes, she deleted more than 20,000 files and almost 3,500 directories, totaling approximately 21.3 gigabytes of data, according to court documents.

The deleted data included files of mortgage loan applications and the credit union’s anti-ransomware protection software. Barile also opened confidential files, including documents containing board minutes of the credit union.

After she accessed the computer server, Barile sent text messages to a friend explaining that “I deleted their shared network documents,” referring to the credit union’s share drive.

On the day she was fired, the credit union requested from its IT support firm that it disable Barile’s access to the credit union’s computer system, but her access was not disabled, according to court documents.

Although the credit union did back up some of the data that Barile destroyed, prosecutors said the credit union has spent more than $10,000, so far, to remediate the IT issues.

Even though prosecutors said in a press release that Barile can face up to 10 years in prison, transcripts of her plea hearing indicate that prosecutors are expected to recommend a prison sentence of six to 12 months.

During the court hearing, Barile made the following statement: “On or around May 25 of 2021, I logged into the credit union’s computer with my credentials and deleted shared files. This occurred after termination, when I did not have authorization to log in or touch any of the information. I am guilty of the charges and I’m pleading guilty to it.”

Barile’s sentencing hearing has not been scheduled.