League of Southeastern Credit Unions & Affiliates
Director’s Resource League of Southeastern Credit Unions | January 2015 | Vol. 5 Issue No. 4
President’s Message The New Year will start off quickly for credit unions as the NCUA is expected to vote on a new risk-based capital (RBC) proposed rule in mid-January. I met with NCUA Chairman Debbie Matz in October, and had separate meetings with senior staff for board members Rick Metsger and Mark McWatters. In the meetings, it was clear that the comment letters from credit unions and the letters from Congress were being taken seriously. Among the expected changes to the proposed rule will be a longer implementation period and revised risk weights for five categories. Credit unions received a victory in December before Congress broke for the holidays. The Senate passed the Share Insurance Fund Parity Act, and the president signed it into law on Dec. 18 (see story on page two). We have many more major issues in 2015 including H.R. 5061 from Rep. Jeff Miller (R-FL) that will amend the Federal Credit Union Act to exempt member business loans to veterans from the MBL cap. The League is working closely with Rep. Miller on this legislation. Comprehensive tax reform will also be a hot topic early in 2015. Look for more information in early in January on these issues. I hope to see you in 2015.
Building for Your Board’s Future Credit union boards have grown more involved, selfgoverning, and valuable. Their forward-looking viewpoints have resulted in boards renewing themselves as strategic partners with their CEOs. Below are four ways to deepen your board’s relevance to your credit union and credit union members. Understand Your Business Conventionally, directors occupied the board room; today, they visit operations, attend conferences, and know operating executives. Far from crowding CEO real estate, this deepens understanding of operations. One CEO offers his perspective: “The more our directors understand, the less we get ‘off base.’ Our board meetings are not about scrutinizing numbers; our meetings focus on strategic topics and opportunities.” Dedicated time with C-level executives is useful to understand a day in the life of business development, lending, and operations. With a strategic view of how your credit union earns revenue and profit, directors can see strategy in action, supporting CEOs and executives in their decisions. (continued on page 2)
Save the Date CUNA Governmental Affairs Conference March 8 - 12 Sunday - Thursday Washington, D.C. Click here for more information Florida Credit Union Association State GAC March 24 - 25 Monday - Tuesday Tallahasee, FL Click here for more information Alabama Credit Union Association State GAC April 7 - 8 Tuesday - Wednesday Montgomery, AL Click here for more information
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Build for the Future “Let’s stop building for this year’s results and focus on the next decade,” said a CEO at a recent strategic planning session. This offsite meeting was to discuss and plan for the most challenging issues rather than listen to formal presentations. The board agreed and focused the discussion on what the credit union should be for its members. What if your next planning session was focused less on numbers and more on ideas? Instead, what if your leading question was, “What do we need to be for our members?” The discussions, ideas, and answers you discover give your CEO the guidance he or she needs to build a strategic and operating plan that delivers on your board’s vision. Connect with Your CEO Well-honed boards recognize the value of good communication with their CEO and devote a lot of time in keeping close to their CEO. Encourage your CEO to draw on your board’s collective experience. Your board may more deeply understand the history and nuances of your credit union and field of membership. Make it easy for your CEO to expand his or her partnership with your board. Meet with your CEO as a board and as individuals. The intent is beyond discussing tactics; the purpose is to mutually increase the commitment to and from your CEO. Succeed with Board Turnover In the April 2014 edition of the Harvard Business Review, “How Much Board Turnover is Best?” describes how S&P 500 companies performed with respect to board turnover. The most successful companies had moderate turnover (about one new board member each year). Interestingly, the least successful companies had no turnover. Board turnover is not a target to reach and is not the only driver of performance; but, it raises the issue that an acceptable amount of turnover is a tool that steers performance over time. In a nutshell, the good of the credit union should drive all conversations. Consider some of these board leadership concepts as you build a credit union to serve generations of members beyond the ones you now serve. Source: Jeff Rendel, certified speaking professional, and frequent speaker at LSCU & Affiliates events.
Financial Regulators Release 2014 BSA/Anti-Money Laundering Examination Manual The Federal Financial Institutions Examination Council (FFIEC) released a revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The revisions clarify supervisory expectations and incorporate regulatory changes since the manual’s 2010 update. The revisions incorporate feedback from the banking industry and examination staff. The revisions were a collaborative effort by a number of agencies. If Alabama or Florida credit unions have questions, they should contact their primary federal or state regulator. The manual can be found on the FFIEC website.
President Signs Credit Union Share Insurance Fund Parity Act In Dec. 18, the Credit Union Share Insurance Fund Parity Act was signed into law by President Obama. The bill creates deposit insurance parity for credit unions by directing the NCUA to extend share insurance coverage to trust accounts, such as Interest on Lawyer Trust Accounts (IOLTA) and other similar accounts, opened and managed by credit union members. The statutory change was needed because the NCUA historically had interpreted that the Federal Credit Union Act did not permit it to extend share insurance coverage to trust accounts. The Senate passed the bill by unanimous consent in December while the House voted passage in May.
December NCUA Report Now Available The December 2014 NCUA Report is now available online. The latest issue includes articles on supervisory, regulatory, and compliance issues. Read the December issue today!
Getting Serious About Strategy
Director’s Spotlight
How serious does your board take strategy? If you hold an off-site board planning retreat, that is good. However, are you covering the right topics? The board should assess its strategy by asking these questions: • How frequently does it hold strategic planning sessions? • How far into the future do you plan in your planning process? • Where do you hold your strategic planning sessions? • Who facilitates your strategic planning process? • How long does your planning process last? The following steps will help guide your next strategy session. Define the context within which your board addresses strategy - Separate strategy from planning. Strategy is about defining the strategic destination for the business. Develop the mindset your board brings to the strategy process - The challenge is to develop a mindset of being focused on not only what strategic decisions need to be made, but also on how strategic decisions need to be made.
Army Aviation Center FCU Supervisory Committee Secretary Floyd Rodgers asks Rep. Jeff Miller (R-FL) about the work the House Armed Services Committee is doing in combating the growth of ISIS in the middle east during the Governmental Affairs Luncheon at the Southeast Leadership Development Conference. Rep. Miller is a member of the committee.
Production Begins on 2015 Cooperative Image Campaign
Prepare the board for strategic planning - Distribute information that sets the foundation for strategic conversations at 30- 60- and 90-day intervals prior to the planning session so people have time to process it. Obtain the board’s commitment to the defined strategic vision - Nothing is more important than having all the board members aligned with and committed to the decisions that emerge from the strategy process. Create board ownership of strategic outcomes - The board has a critical responsibility in providing strategic direction to the credit union. That means the board owns the outcomes of the strategies that are pursued. The critical action that creates this level of strategic outcome ownership is defining a scorecard or dashboard that tracks results in alignment with the strategic objectives. Contact LSCU VP, Cooperative Initiatives Laura Vann at 866.231.0545, ext. 2181 if your board needs assistance with board strategic planning. This article was adapted from the CUES Board Resources (CCUBE) website. The original article was posted by Michael Hudson, founder and principal of CreditUnionStrategy.com.
The 2015 Cooperative Image Campaign features new online ads to complement the current TV ad. The online ads will feature people saving money in all the wrong ways when they should have joined a credit union. The first ad was shot in December in Birmingham. The ads will be available to credit unions that contribute to share on their social channels, use in branches, and in various video components. The hope is that the “shareable content” ads will be pushed out by members and consumers who find them humorous and true to life. Contact LSCU VP, Communications Mike Bridges at 866.231.0545, ext. 1022, for more information.
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