Q1 2012 LSCU Signal Magazine

The Magazine of the League of Southeastern Credit Unions Spring 2012

Plus

Elder Financial Abuse A Credit Unions Role in Prevention

Cooperative Image Campaign Results Show Gaining Traction

PAC Fundraising

Why It’s Important to Support

Cooperative Initiatives ABC’s of Money Management

Education

Improving Cross-Sales

Leveraging Buying Power Credit unions have more leverage through innovative and collaborative purchasing platforms that allow strategic and collective contract negotiation, saving your credit union, regardless of asset size, significant time and money.

ePurchasing Saves Credit Unions Time & Money Event Example & Results Commodity: Armored Car Services Credit Union Participants: 7 Prior Year Spend: $1,909,789 Competition: 6 Suppliers Average Save: More than 21%

“They made the process so easy and took care of everything for us.”

Cindy Barco, President Manatee Community FCU

More than 60 Bids Were Received within a 30-Minute Purchasing Event for Janitorial Services that Resulted in a 40% Savings

Credit Unions Participating in a Computer Equipment Group Purchasing Event Saved an Average of 23%

“I won’t purchase another contract without it.”

Dennis Holthaus, CFO Achieva CU

The ePurchasing platform is conducted in either a single or collaborative environment and requires no long-term contract commitment to participate in an event, purchasing details do not need to be identical to those of other participants, and each participating credit union remains in charge of making decisions on their business throughout every step of the process.

866.231.0545 | www.myleverage.com | consult@myleverage.com

LSCU

Message from the President The first quarter of every year is probably the League’s busiest for two reasons: we want to hit the ground running on our established priorities; and it’s affiliation season. Over the past two-and-a-half years, League staff has worked hard to hone our listening skills to ensure we are responding to the needs of our member credit unions. It’s important for the LSCU & Affiliates to be flexible to shift the strategic direction of the organization, allowing us to respond to the ever-changing economic and political environment which credit unions are facing. For all of us to not only survive but thrive, we must find ways to become more efficient by cutting down on duplication and waste within the system. I am specifically talking about CUNA and the leagues. I always remind my staff it’s not our money, it’s the credit unions’ money.

The Alabama and Florida Credit Union Leagues and their member credit unions were ahead of their time when they approved the consolidation of the two organizations. We have seen more league consolidations across the country in the past couple of years, with several more under discussion. Based on the feedback of our member credit unions, we can clearly say our consolidation is working. From what I know now, the two leagues simply could not have continued down the road they were on if they wanted to provide the level of service and representation our credit unions need and deserve.

You may not know it, but the LSCU budget has not increased since the consolidation. Our management structure has been flattened, and we’re tightening our belts, just like all of you during the economic downturn. As I interact with my colleagues, many state leagues are struggling with affiliation and many are having trouble responding to the needs of their members, creating a vicious cycle of disaffiliation issues. While the lack of resources hampers some leagues, I simply think willingness to self-sacrifice for the good of membership hampers others. Some credit unions have talked to me about their displeasure with CUNA and the requirement that credit unions must belong to the league and CUNA or neither. CUNA needs to look at its structure and find ways to streamline its operation for what credit unions need today and tomorrow, versus a model that may have worked 20 years ago.

Our industry needs to have a fundamental, open conversation about the future of our industry. It’s something I bring up often when speaking at CUNA and the American Association of Credit Union League (AACUL) meetings. CUNA and other system partners are working on a strategic plan for the credit union movement as a whole, but there are things that need to be addressed as we go forward. We have two national trade associations.

We should explore how we can bring CUNA and NAFCU together to have one unified message on the national level. Aren’t we fundamentally working for the same end result? This doesn’t need to be driven by the trades, but by credit unions. CUNA, NAFCU, and the leagues are providing education, compliance support, and communications−among other things−to our members with new competitors always entering the marketplace. Doesn’t it make more sense for us to divide up these roles and responsibilities instead of just duplicating product and service offerings?

We have far too many credit unions letting the few do all the work. That needs to change if we want to perfect change for our industry and protect our tax exemption. Every credit union needs to ask themselves, “What am I doing to advance the cause of the credit union movement? Am I going to Washington, D.C. and Tallahassee or Montgomery, lobbying lawmakers on issues of importance to the industry?

Am I personally giving to the LSCU FedPAC? Is my credit union raising money for the PACs? Does my credit union support the Cooperative Image Campaign?”

I will continue to raise system structure issues because I believe it’s fundamental to the future of the industry and how CUNA and the leagues serve and represent America’s credit unions. But before you question the structure and value of CUNA and the leagues, please, get involved in helping shape our future.

Patrick La Pine President & CEO League of Southeastern Credit Unions

Table of Contents

Editor Amy Jowers

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President’s Message

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Feature Article Cloud Technology & Credit Unions

Contributors Bill Berg Mike Bridges Jason Cochran Joseph Davis Mary Elicia Del Santo Keith Hopkins Jared Ross Laura Vann Blake Westbrook Adena Whitman

Cloud technology can help credit unions improve internal processes and external results such as better utilization of resources, decreased IT workload, reduced amount of physical hardware, simplification of data storage and server space, and much more. Find out what to look for when exploring cloud-based solutions.

Elder Fiancial Abuse Prevention Elder financial abuse continues to be the “Crime of the 21st Century.” A credit union’s early intervention can not only be a saving grace for your elder members’ potential financial demise, but a proactive step in loss prevention for your credit union. Learn about how to develop and implement policies and procedures that provide staff guidelines to handle and respond to all types of suspicions.

Production Detra White April Banta Letters to the editor may be submitted at submission@lscu.coop.

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Advocacy 2012 Alabama & Florida Legislative Session Update Washington Perspective from John McKechnie

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LSCU Legislator Profile

John McKechnie

Coming Soon The Power of One – June 2012

Highlights 6 | Trends

A credit union’s early intervention of elder financial abuse can be a saving grace for its elder members’ potential financial demise and a proactive step in loss prevention for its credit union.

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10 | Advocacy

Credit union leaders should be active, informed, and involved in grassroots efforts to keep MBL, supplemental capital, examination fairness, and tax reform live topics on Capitol Hill.

19 | Compliance

NCUA Letter 12-CU-01 addresses regulatory concerns such as lending trends, interest rate and liquidity risks, and more, for credit unions in 2012.

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Compliance 2012 Regulatory Concerns

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Cooperative Initiatives In-School Branches Teach the ABCs of Money Management

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Foundation “Leave-Behind” Project Touts “People Helping People” Philosophy

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Education Improving Cross-Sales: A Matter of Hill, Will, & Skill Implementing a dynamic coaching program is part of creating a successful sales and service culture in your credit union. The other parts to such success include: training, tracking results, and sales and service champions.

Southeast CUNA Management School: A Rewarding Experience LSCU Learning Opportunities for April-June 30

Communications Cooperative Image Campaign Gaining Traction

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League News Florida State GAC Discuss Credit Union Issues with Legislators SAS Workshop: “Best, Most Informative SAS Conference”

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Industry A Case Study: Utilization of Portfolio Management Solutions to Increase Debit Interchange Revenue

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LEVERAGE Assessing & Implementing Compliance Solutions Overcoming the Challenges of Financial Institutions for 2012

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LSCU Staff Directory

Highlights 22 | Cooperative Initiatives

25 | Foundation

30 | Communication

Credit unions across the country are moving money management into the classroom. See how Alabama and Florida credit unions are doing so with in-school credit union branches.

SECUF has partnered to complete a “leave-behind” project in Tampa near the Republican National Convention site. The project is to tout the credit union motto and to raise credit union awareness at the RNC.

The Cooperative Image Campaign results show credit union awareness is gaining traction with a small lift in credit union awareness after the campaign’s 4- 6 week run in September.

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TREND

How

Cloud Technology

is Improving the Way Credit Unions Do Business Joseph Davis, coordinator, Communications “We operate in the cloud.” “Let’s move it to the cloud.” “The cloud should definitely be utilized.” These are phrases you may have recently heard more often, but what does it all really mean?

For many, this is mindless geek-speak, for others the term “cloud” means a significant shift in considering how to best deliver services to members more efficiently.

Let’s be more specific. When someone refers to “cloud computing,” they’re referring to the opportunity to store or access information stored on third-party servers, or offering alternate, scalable hardware solutions for existing applications software. It’s also seen by some as a marketplace of application software, for individual smart phones to large commercial applications (Source: Members Development Company).

Cloud computing is also a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). The name cloud computing was inspired by the cloud symbol that’s often used to represent the Internet in flowcharts and diagrams.

Ultimately, we can describe the goal of cloud-based technology as the process of connecting private and/or public data to users.

Now with cloud computing generally defined, let’s talk about what cloud-based technology means for you, and how it affects your credit union.

Credit unions are facing a myriad of challenges day-to-day – like many financial institutions – and implementing emerging business trends has become more of an integral aspect of success. For instance, credit unions are feverishly trying to monitor the rise of new technologies and solutions, largescale economic forces, competition and innovation, as well as an ever-changing workforce and staff. All of these challenges make way for a renewed perspective on how to do business and better serve members.

Cloud computing and cloud-based solutions have rapidly evolved into a technology that companies rely on to improve internal processes and external results. Many

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companies run a subscription model where software is run on third-party servers (called single-tenant or hosted). Numerous other companies operate where one copy of the software is viewed and accessed by multiple users which are then shared (called multi-tenant).

A good example of a multi-tenant process is to think of the search company Google. Think of when you do a Google search. No matter how many times the Google homepage changes, all users see the same content. This allows software vendors (ex. Google) the ability to make one change to software which is then reflected to all end-users.

This frees up IT staff to focus on other projects instead of patching software issues frequently.

Recently, there has been a noticeable movement of more credit unions integrating cloud-based solutions into their everyday operations. “Many credit unions have begun bringing in cloud functions for human resource management such as payroll, customer relationship management (CRM) functions, and office automation (ex.

Google apps, Microsoft Office 360),” said Members Development Company Senior Advisor Brian Sommer. “We’ve also seen something really fascinating with how many credit unions are already using social

media and mobile applications, which the penetration for both is quite high within the credit union industry.”

Imagine the various areas of your credit union where cloud solutions can impact: auto loans and quotes (online application and verification), financial management (online management and advice), account management (opening accounts, information upload), recruiting (interviews, social media), sales and marketing (customized messaging), and most importantly customer service (online help, CRM).

Here is more of an idea of what cloud solutions can do for your credit union: • Help better utilize credit union resources • Decrease IT workload and transfer low-value work (maintaining, patching software) • Reduce physical hardware • Make managing processes easier by consolidating efforts on a single server • Increase financial savings through resource allocation • Simplify data storage and server space • Improve storage backup and failover capability Without a doubt, you can immediately recognize the impact and benefits associated with cloud-based technology in credit unions.

Many credit unions that are not currently implementing cloud solutions are still considering the value added in terms of operations and internal credit union functions.

Grow Financial Federal Credit Union SVP, Network Services James Stock said of cloud computing, “there is a lot of value in cloud-based technology in terms of storage, external filing, and archiving of email.”

He points out although Grow Financial does not yet use cloud-based solutions, it would eventually help provide a practical and increased use of storage, improved web collaboration (think WebEx), as well as reduce the need for excess use of infrastructure and internal hosting.

The next question you’re likely to ask is whether there are drawbacks or concerns when implementing cloud solutions? Risk mitigation is the first focus when most credit unions consider cloud solutions Sommer says. “It’s important to note there is no ‘singular

cloud,’ there are many different clouds and cloud providers. It’s also important that credit unions understand the environment they’re getting into when considering cloud-based technologies.”

Here is what credit unions should examine when exploring cloudbased solutions: • Cost (hardware, software, savings) • Internal system and infrastructure knowledge (IT staff or technology group) • Flexibility of members and staff capability (transactions, applications, tasks, less time consumption) • Security (data, private, and member information) • Privacy (credit union users and members) • Cloud provider and service level of provider (failover data center, location of data center, who owns data, credit union control over operations) Keep in mind that these are a few common concerns, and depending on how your credit union deploys cloud-based technology, there may be other concerns to evaluate.

Of all the questions you should ponder when asked about how you’re approaching cloud technology, ask yourself this: are you willing to become an innovator, adopt technologies that enhance business, or are you lagging behind due to unwillingness to break from traditional business practices and processes? *Look for part two of this article from Members Development Company Senior Advisor Brian Sommer in the second quarter issue of Signal Magazine. ■

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TREND

A Credit Union’s Role in Preventing Amy Jowers, director, Information Services According to The MetLife Study of Elder Financial Abuse: elder financial abuse continues to be the “Crime of the 21st Century,” one that is often at the heart of other forms of elder mistreatment. Most cases of abuse, 51 percent, are perpetrated by strangers, with close family and friends accounting for 34 percent. It is estimated that the annual dollar amount loss by victims of elder financial abuse in 2010 was $2.9 billion, a 12-percent increase from 2008.

The National Adult Protective Services Association (NAPSA) defines elder financial abuse as the “illegal” or improper use of an elderly person’s funds property or assets. The Metlife study found that such abuse typically falls into three types of crimes: occasion, desperation, and predation. Why do the elderly (most commonly women) make attractive targets for these types of crimes?

• Persons over the age of 50 control more than 70 percent of the nation’s wealth • Many seniors do not realize the value of their assets • They are likely to have disabilities that make them dependent on others for help. These “helpers” may have access to homes and assets, and may exercise significant influence over the older person • They may have predictable patterns (e.g. because older people are likely to receive monthly checks, abusers can predict when an older people will have money on hand or need to go to the bank)

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• Severely impaired individuals are also less likely to take action against their abusers as a result of illness or embarrassment • Abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses • Some older people are unsophisticated about financial matters • Advances in technology have made managing finances more complicated Financial institutions are the first line of defense in spotting elder financial exploitation and elder identity theft. Credit unions can help elder members to navigate the steps necessary to stop the fraud and repair the damage.

The Credit Union’s Role Identify those at risk. Early intervention can result in loss prevention for your elder member and your credit union. If you do suspect abuse on an elder member, protect them from the fraud and take necessary action. A credit union should develop and implement policies and procedures that provide staff guidelines to handle and respond to all types of suspicions.

Develop relationships with social service providers and law enforcement so they will be in place before a suspicion or concern comes up. In many cases, credit unions serve several cities and counties. Locate the various providers and law enforcement in each ea area as the organization names may vary. Formalize these relationships by connecting with the contact at each organization re and a providing the agency your contact information as well. Use the National Elder Care Locator (www.eldercare.gov/eldercare.net/ N public/index.aspx) to find the appropriate agency for your area. Take p it a step further and have, on hand, the forms/paperwork needed by b these agencies as well as samples of these forms filled out to keep ke in your policies and procedures for this type of event. When in doubt, report the suspected financial elder exploitation. When an incident occurs—even in doubt—report to, and cooperate with inc the th agencies. Suspicion, not proof, is adequate. It is the job of the agency/law enforcement to act upon your reporting. ag Another form of reporting this type of abuse is a suspicious activity report (SAR) by including the term “elder financial ac exploitation” in the narrative portion of all relevant SARs filed. ex The Th potential victim of elder financial exploitation should not be b reported as the subject of the SAR; rather, all available information on the victim should be included in the narrative i portion of the SAR. p Also, train employees about financial exploitation so they can recognize and take action, utilizing the policies and

Elder Financial Abuse procedures you have in place. Designate a staff person whom employees must notify when they suspect suspicious activity and make sure procedures include protocol for this type of reporting.

Last, but not least, educate members. Put a “senior club” in place, provide informational flyers in branches, or include statement stuffers with elder financial abuse tips/red flags; anything that would help protect members from becoming victims.

General Guidelines Below are general guidelines to follow when confronted with a situation that appears to be a case of elder financial abuse.

• Ask questions about the suspicious transaction to understand the reason for it • Assess whether the member understands the proposed transaction • Suggest a cashier’s check, a POD account, direct deposit/automatic bill pay, or a “protected account” • Warn about the danger of carrying large amount of cash • Look for signs of confusion or fear • Try to separate elder from predator • Contact security or law enforcement • Collect evidence, i.e. surveillance to prove who accompanied the elder, description of suspicious person

Early intervention can result in loss prevention for your elder member and your credit union.

Develop and implement policies and procedures that provide staff guidelines to handle and respond to all types of suspicions.

Credit unions are uniquely placed to identify when members are possible victims of financial exploitation. Credit union staff are usually familiar with their elder members that visit their branch and have a better opportunity to recognize if one is in distress or conducting a transaction(s) in an out-of-the-ordinary way. Be sure to have an up-to-date and complete section on elder financial abuse in your policies and procedures manual to ensure your elder members do not fall victim to such abuse. ■

Elder Financial Abuse Red Flags • Numerous new withdrawals or large withdrawals in round numbers when such are inconsistent with member’s banking practices • Withdrawals made from savings or CDs, despite penalty assessments • Elder member mentions reason for the transaction that doesn’t make sense or sounds suspicious • New authorized signers on accounts, i.e. “new best/boy/girlfriend” • Signature on check looks different/ forged; out-of-sequence check numbers (stolen checks) • Unexplained changes to the powers-ofattorney/beneficiaries/trusts • Changes in property titles, quitclaim deed, or mortgage • Unpaid bills • Changes in elder’s appearance or behavior • A relative or caregiver who seems overly controlling while accompanying the elder Source: The National Committee for the Prevention of Elder Abuse (NCPE A), www.preventelderabuse.org/index.html

Metlife Mature Market Institute© (June 2011), The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders. Available from http://www.metlife.com/mmi/index.html.

Kohlmann, Luann S. (2012). Webinar: Identifying & Preventing Elder Financial Abuse. [PowerPoint slides]

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ADVOCACY

Alabama 2012 Alabama Legislative Session Update Jason Cochran, director, Legislative Affairs (AL)

With the 2012 Legislative Session in Alabama just over one month old, the following are the events of the session and the status of LSCU priorities, thus far.

Public deposits for credit unions have dominated the LSCU’s communications and will continue to do so throughout the remainder of the session. SB 299 by Sen. Bill Holtzclaw (R-Madison) and HB 315 by Rep. Mike Ball (R-Huntsville) allow federally insured credit unions in Alabama to become qualified public depositories under the SAFE Act. While this issue is fairly simple from a policy standpoint, it has generated quite a bit of controversy for various political reasons.

Obviously, banks do not want to share any part of this $10 billion business in Alabama, and so far have done all they can in order to stop any ability for movement. Stories that have been relayed to the Governmental Affairs team are certainly interesting and legislators are feeling the pressure from both sides on the issue. It is important for credit unions to keep the pressure on members of the Senate and House of Representatives and explain the good that can come out of the passage of this legislation. Competition is never a bad thing, and everyone wins if this legislation becomes law. We expect to have a hearing on this legislation the week following the Alabama State GAC in Montgomery on April 4-5, so it has never been more important for all of Alabama’s credit unions to travel to Montgomery and speak to their legislators during this event.

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We have yet to see a bill on reducing the right of redemption period introduced and at this point in the session, it does not appear there will be one. The Alabama Bankers Association (ABA) has typically taken the lead on this issue with support from the League, but in discussions with them in the past week, they want to hold off on introduction due to a large amount of legislation that is shifting priorities for 2012. We are currently working with the ABA on amending or defeating legislation that duplicates the federal money

Public deposits for credit unions have dominated our e-Signal submissions and will continue to do so throughout the remainder of the sess session. sion.

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Florida 2012 Florida Legislative Session Wrap Up Jared Ross, director, Legislative Affairs (FL)

The 2012 Florida Legislative Session was dominated by four key issues: redistricting, budget, destination resorts (gaming), and personal injury protection (PIP) reform. While many other legislative issues were heard during the session, none grabbed nearly as many headlines as those four. In all, 2,052 bills were filed in the 2012 session, 588 passed the chamber they were originally filed in and 292 passed both chambers identically and will head to the governor’s desk. Many of those 292 were local bills (42), joint resolutions (5), claims bills (11) and memorials (6).

The League’s top priority for 2012 was once againn to pass legislation that would allow credit unions to become qualified public depositories in Florida. HB 669 was filed by Rep. ep. Jason Brodeur (R-Sanford) and SB 936 was filed by Sen. Chris hris Smith (D-Ft. Lauderdale). This bill would have amended chapter apter 280 of Florida Statutes to include credit unions in the definition ion of qualified public depository, thus, allowing municipalities a choice ce of where to deposit their money. The League’s Florida Governmental mental Affairs (GA) team worked tirelessly with legislative leadershipp to ensure this bill would be filed and secured a hearing early in the 2012 Session for the House version of the bill. Before a votee on the actual bill was taken, an amendment was offered by Rep. John Wood (R-Haines City), which would have required anyy credit union choosing to become a public depository to waive theirr immunity from taxation. The League vehemently opposed this amendment and the amendment was defeated by a vote of 7-8. While the GA team worked to secure votes on the bill up until the final seconds, the bill was defeated by a close 7-8 vote. Voting for the bill were Reps. Mack Bernard (D-West Palm Beach), Rachel Burgin (R-Riverview), Janet Cruz (D-Tampa), Bill Hager (R-Boca Raton), Clay Ingram (R-Pensacola), John Wood (R-Haines City), and Ritch Workman (R-Melbourne). Voting against the bill were Rep. Ben Albritton (R-Bartow), Jim Boyd (R-Bradenton), Doug Broxson (R-Pensacola), Daniel Davis (R-Jacksonville), Evan Jenne (D-Ft. Lauderdale), John Patrick Julien (D-North Miami Beach), Bryan Nelson (R-Apopka), and Richard Steinberg (D-Miami Beach). With the defeat of HB 669, the public deposits issue was dead for the 2012 Session; however, the League’s team

continues to work on members throughout the session to let them know how important this issue is to municipalities and credit unions. A lot of progress was made between the vote on this bill and the end of session, and we are hopeful this issue can pass during the 2013 Session.

Another important issue to the League is helping to fix the mess that has been created by the current foreclosure laws in Florida. Several bills were filed during the 2012 Session that would have helped expedite the foreclosure process in CONTINUED ON PAGE 12 Florida, but none received as much traction as HB 213 by Rep. Kathleen Passidomo (R-Naples) and HB 1890 by Sen. Jack Latvala (R-St. Petersburg).

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Alabama Legislative Session (Continued) laundering statute by placing it in Alabama’s code and legislation that is overreaching and deals with mortgage satisfaction.

In other legislative activity, look for the Education Trust Fund Budget (ETF) to be passed with little complications during the regular session and, unless something changes, a special session to be called toward the end of the fiscal year on the General Fund Budget.

The idea behind waiting for the General Fund Budget is that revenue projections could possibly be better by September or additional one-time money may be found. Also, there are plans for a five-day special session to redraw the state House and Senate seats between

the 29th and 30th legislative days. The leadership is hoping to have all the details worked out by then, but if not, redistricting could be addressed in another special session or in 2013. The 2014 elections in Alabama will be significantly affected by the new lines and voters could see themselves having to make tough choices depending on where the lines end up.

As always, LSCU will continue to keep you updated on any developments on public deposits or other legislation that is of interest to Alabama credit unions during the 2012 Session. ■

Florida Legislative Session (Continued) This bill would have helped speed up the foreclosure process by providing a new procedure for determining whether a property has been abandoned and establishing an expedited process for foreclosure proceedings on those abandoned properties. While there were some issues with the bill, such as lowering the statute of limitations on filing a deficiency judgment from five years to one year, the overall bill would have helped ease the backlog of foreclosure proceedings in Florida’s courts. In the end, the sponsors could not agree on identical language for the bill, and thus, HB 213 died in messages while SB 1890 never came up for a floor vote.

At the start of the session, the Capitol was dominated by talk of the gaming bill, which would have brought three large casinos to South Florida. The measure split the business community, with Associated Industries of Florida in favor, and Florida Chamber of Commerce against. After clearing one panel in the Senate, House sponsor Rep. Erik Fresen, (R-Miami), failed to get the votes to get past the first hurdle in that chamber, and the issue was dead.

As has been the case for several years, legislators tackled another tight budget year, contending with a nearly $2 billion shortfall. They gave Govenor Rick Scott the additional $1 billion he requested for PreK-12 education after cutting $1.3 billion last year. Overall, legislators passed a $70 billion budget that cut 4,000 positions from state government and cut funding for hospitals, nursing homes, and universities.

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Another of Gov. Scott’s priorities was PIP reform, the no-fault auto insurance issue. The Senate and House passed competing bills, but on the final day of session Friday, the Senate narrowly acquiesced to a watered-down version of the bill, giving Scott another victory in the 2012 Session.

Also on the final day of session, legislators learned that the Florida Supreme Court had ruled the House redistricting map was constitutional but the Senate map was not. Because of this, both chambers were called back for a special session March 14-28 in order to redraw the Senate map to ensure it complies with all constitutional requirements. We are still awaiting final review of the Congressional redistricting map.

Overall, the legislative session was a valuable learning experience. While we are all disappointed in the failure of HB 669, we once again were able to stave off an attack by the bankers on our tax exemption. We also learned valuable lessons on what we need to do to ensure successful passage of our priorities in the future, and it all starts at the grassroots level. We urge our credit unions, right down to the membership, to get involved and help us in our legislative efforts. It is only with the support of our dedicated advocates that we will be able to pass meaningful legislative reform.

We thank everyone who has helped us in the past and look forward to a successful 2013 Session. ■

PAC Fundraising & Your Credit Union Blake Westbrook, coordinator, Grassroots & Political Action (AL)

In recent months, the League of Southeastern Credit Unions has made a significant effort to be more aggressive through political advocacy. While advocacy at the state and federal levels includes meeting with lawmakers and contacting them through calls and emails, there is also another extremely important aspect of advocacy − our political fundraising efforts. Since the formation of the LSCU in 2009, we have made great strides toward meeting our state and federal Political Action Committee (PAC) fundraising goals. A strong PAC not only raises our profile in the political arena, but also gives credit unions the strength to move our legislative agenda forward. This is especially true during an election year. It is important that we as a league are able to support lawmakers and candidates, both on the state and federal level, who are supportive of the credit union movement. With credit union-friendly lawmakers, we will have the leverage needed to pass legislation that benefits credit unions such as member business lending, supplemental capital, public deposits, exam fairness, and future issues.

In regards to our Federal PAC, all contributions must be individual dollars. We know it can be tough to contribute to a political action committee during these economic times; however, there are several

different programs and incentives to choose from when it comes to PAC fundraising. Many of our credit unions have signed up for payroll deductions. Under this program, employees can contribute a small amount per paycheck throughout the year. As an incentive, one credit union now uses a Friday Jeans Day to entice employees to give to the LSCU FEDPAC. Those who give to the PAC can wear jeans every Friday.

As an added incentive, for those who give at certain levels, the League provides lapel pins to wear so contributors can show co-workers and friends that they support the PAC. Want to get your members involved?

Through the Deduct-a-Buck program, credit union members can deduct a dollar out of their checking account each month to go to the PAC. This is not only an easy way to raise money, but an opportunity to allow your members to become involved in political advocacy.

While we have made significant strides in our fundraising efforts, there is still much work to be done. Contact Blake Westbrook in Alabama at blake.westbrook@lscu.coop or Andy Gonzalez in Florida at andy.gonzalez@lscu.coop if you would like to learn more about how your credit union can become involved in political and legislative success. ■

What is a Dollar Worth to You? Your dollar is worth more than you think. Contributing to an LSCU PAC helps build relationships with lawmakers. Stand with millions of people like you across the country to protect the credit union movement.

Donor Recognition Levels Chairman’s Club: President’s Club: Congressional Club: Capitol Club: Ambassador’s Club:

$500 or more $250 - $499 $100 - $249 $50 - $99 $25 - $49

ADVOCACY

Advocacy View from the Hill: a Washington Perspective John McKechnie, partner, Total Spectrum Despite a legislative calendar that reflects the political pressures of the November elections, credit union issues remain a live topic on Capitol Hill. There are four principal issues that merit the attention of credit union leaders in the coming months.

• Credit union member business lending (H.R. 1418, S. 509) - This legislation would increase the ability of credit unions to make loans to members for business purposes. Currently, a credit union is limited to an aggregate total of 12.25 percent of total assets in business loans; the bill allows well-capitalized credit unions to gradually lend up to 27.5 percent. Jobcreation packages in both chambers are possible vehicles for this bi-partisan legislation, which has the support of 122 House and 22 Senate co-sponsors.

It is now more important than ever to be active, be informed, and be involved in our grassroots efforts to update the ability of credit unions to serve our 92 million members nationwide.

• Supplemental capital (H.R. 3993) - A straightforward and common-sense effort to ensure that credit unions can safely grow; while at the same time continue to provide a high level of service to consumers. It provides credit unions with the ability to raise capital from sources other than retained earnings, enabling the credit union to maintain a high level of member service while maintaining the essential cooperative ownership structure. Supplemental capital would enhance safety and soundness by allowing for the development of an additional capital cushion that reduces risk to the National Credit Union Share Insurance Fund. The legislation dictates that the supplemental capital be uninsured and only allows adequately capitalized credit unions to accept it.

• Examination fairness (H.R. 3461, S 2160) - These measures establish documentation requirements in examinations, sets a faster timeframe for reports, and creates a new inter-agency Ombudsman that would review the complaint process at NCUA and other federal regulators. The House bill has already had a hearing that featured testimony from JetStream FCU’s Jeanne Kucey (Miami Lakes, FL), and has attracted 117 co-sponsors.

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• Tax reform - While there is no legislation currently introduced, committees on both sides of Capitol Hill, as well as the Administration, have begun to discuss tax reform aimed at broadening the business tax base by closing loopholes and, in the words of President Obama, “enhancing fairness in the Code.” While the so-called “Supercommittee” failed at the task last fall, it is possible that some sort of legislation could gain traction, particularly if budget pressures continue to mount.

The political context in which all of these measures exist is important: with the exception of the examination fairness issue, all of the above-described initiatives have elicited anti-credit union lobbying efforts by the banking industry. Credit unions need to be aware not only of the importance of framing and defining why these issues are important to our members, but also of the strong and vehement attempts by bank lobbyists to thwart our efforts.

Legislative debates are most often won by the side that frames the issue best. For credit unions, it is now more important than ever to be active, be informed, and be involved in our grassroots efforts to update the ability of credit unions to serve our 92 million members nationwide.

John McKechnie is a partner with Total Spectrum in Washington, D.C. McKechnie is also a consultant to the LSCU on legislative and regulatory issues in Washington, and represents the interests of Alabama and Florida credit unions before members of Congress. He has spoken at the LSCU Development Conference, the State GAC in Florida, and will speak at the Alabama State GAC April 4-5. McKechnie is formerly the chief lobbyist for CUNA and a top official at the NCUA. ■

Actions to keep CU issues live on Capitol Hill: • Visit lawmakers at home and in D.C. • Let your voice be heard through letters/ calls to Congress members • Hold legislative meet & greets at chapter meetings/individual CU • Educate staff about the CU issues • Get involved in CU-friendly election campaigns • Rally membership to vote for a candidate

LSCU Legislator Profile

Jason Brodeur What was it about politics that interested you enough to decide to run for the Florida House of Representatives?

I really consider the opportunity to serve the community to be a special privilege. After having been a part of a neighborhood trust, a school volunteer, and a member of Rotary, the opportunity came up for me to do a little more. So I ran for office and was fortunate enough to win. It has been the blessing of a lifetime.

In his first term, Representative Jason Brodeur represents the 33rd district which encompasses parts of Volusia, Seminole, Orange, and Brevard counties.

Before being elected to the Florida Legislature, Rep. Brodeur served on the City of Sanford Charter Review Board and the Seminole County Planning and Zoning Commission. Gov. Crist also selected him to serve on the Medicaid Pharmaceutical and Therapeutics Committee.

After joining the Florida House of Representatives, Rep. Brodeur has become the vice chair of the Business and Consumer Affairs subcommittee, as well as a member of the Health and Human Services Committee. He also serves on various other subcommittees.

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The 2012 Legislative Session will end right when Signal is published, what do you feel the legislature accomplished, and what are some major issues that still need to be addressed?

I think the legislature accomplished what it was sent to do this year – balance the budget, especially in a very difficult economy. Going forward I believe our economy will continue to be the biggest driver of policy. Since we have a balanced budget amendment, all future funding decisions are dependent on how fruitful our economy is today. I think we still need to increase funding in education, which we did this year and I think we will still need to de-regulate industries so we can worry less about government rules and more about serving customers. When we allow for more transactions, there is more opportunity for prosperity.

This session, you sponsored HB 669 which would have given credit unions the ability to become qualified public depositories. What were your thoughts behind filing this bill and why was it an important issue to you?

For me, it is really about choice. Never in the history of time have consumers gotten a better product at a lower price than when they are afforded choice. As it is today, commercial banks continue to enjoy a virtual monopoly over the deposit of state and local funds in Florida. Credit unions receive deposit requests from municipalities such as fire and sheriff’s departments, schools, libraries, and other local units of government and are forced to turn them away. This legislation would have allowed local elected officials depository choice, and an opportunity to take advantage of local community-owned financial institutions whose members are part of the public they serve. I feel like more choice is just good public policy.

What role do you see credit unions playing in the financial services industry and, in particular, Florida’s economy?

As mentioned above, it seems like government at all levels is having to cut costs and do more with less. By allowing credit unions to accept municipal deposits, municipalities may receive better rates of return on their tax dollars. For local leaders facing tight budgets, every dollar saved or earned counts. If credit unions were allowed to work with local governments to the same extent as commercial banks, they could increase the rate paid on deposits and thereby help every municipality meet their individual community’s needs.

How important do you feel the role of grassroots advocacy is in the legislative process? What advice would you give to grassroots advocates when contacting their elected officials?

Grassroots is extremely important to the process as it’s the only direct feedback that we get when we are considering issues that may or may not affect our community. It is

important when contacting your elected official to be very specific in what would be a good outcome for you and why it’s important for our community, not just your business or your industry. It helps to reference past bills or current bills so we know where to go for further research and to get more information on background of related issues. I value very much the information I get from the community.

Can you describe your experience working with the LSCU Governmental Affairs team during your time in the Legislature?

It has been fantastic. The LSCU Governmental Affairs team was extremely responsive and thorough in handling any objections I received regarding credit union issues. They were both educational and informative as we met with those entities that may have had concerns. They were able to arm me with all the knowledge I needed to position the LSCU as an organization interested in helping all of our communities. ■

Rep. Brodeur was the main sponsor of the HB 669, legislation to allow credit unions to accept public deposits.

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2012 LSCU Federal Lawmaker of the Year Awards Presented to Nelson, Sessions The LSCU honored Sens. Bill Nelson (D) and Jeff Sessions (R) as the LSCU Federal Lawmakers of the Year during the 2012 CUNA GAC in March.

Sen. Nelson received the LSCU Florida Federal Lawmaker of the Year Award during a reception at the CUNA GAC. He is the only senator to co-sponsor the member business lending bill and legislation to delay the implementation of interchange fees. At the reception, Sen. Nelson met with credit unions for a few minutes and then spoke for 20 minutes.

Sen. Sessions’ award for the LSCU Alabama Federal Lawmaker of the Year was presented to his chief of staff Rick Dearborn during his legislative visit on Capitol Hill during the GAC. Sen. Sessions has been a consistent supporter of credit unions and has publicly acknowledged his support of the credit union tax exemption and the ability of credit unions to serve their members without calling the tax exemption into question. â–

LSCU President/CEO Patrick La Pine presents award to Sen. Nelson.

LSCU Chairman Joe McGee and President/CEO Patrick La Pine with Sen. Sessions Chief of Staff Rick Dearborn (c).

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Compliance Corner NCUA Letter 12-CU-01: Regulatory Concerns During 2012 Bill Berg, MBA, CCUE, CUCE, BSACS, vice president, Compliance Training & Information

It’s the end of the first quarter of 2012 and the NCUA has addressed the regulatory concerns for this year in the NCUA Letter 12-CU-01. Those concerns include: Lending Trends New auto loans continue to decline, while riskier types of loans i.e. unsecured loans, non-federally guaranteed student loans, and first mortgages all increased for consecutive quarters.

Growth in low-rate first mortgages continues to far exceed growth in overall loans. Credit unions holding high concentrations of long-term fixed-rate loans will be subject to negative margins when interest rates rise and short-term funding costs exceed income from fixed-rate mortgages.

Although overall delinquency and net charge-offs were relatively stable through the third quarter, the percentage of loans with delinquencies 12 months or longer increased. This increase in longterm delinquencies indicates that future charge-offs may increase.

Credit Risks Credit risks persist in constraining the performance of many credit unions. Delinquencies and charge-offs in real estate, business, and participation loans remain historically high. Each credit union must regularly evaluate the adequacy of and fund the Allowance for Loan and Lease Loss fully.

Modified loans also carry a high risk of re-default. Credit unions need prudent loan modification policies and procedures to ensure that each borrower is a suitable candidate for modification or other alternatives to foreclosure.

New and outsourced loan programs carry additional risks. For example, non-federally guaranteed student loans have grown at an annualized rate of 49 percent since the National Credit Union Administration (NCUA) began collecting data on these loans in the first quarter of 2011. Non-federally guaranteed student loans are essentially unsecured loans that may not begin to pay down for several years. As with any new loan program, credit unions should establish appropriate policies, underwriting criteria, risk measurement, monitoring, and control processes prior to granting the first loan. Your credit union’s policy should contain suitable limits in relation to net-worth and total loans or total assets.

Third-party indirect loan programs call for an added level of monitoring over vendors and other parties affiliated with the transaction, such as insurance companies. Refer to NCUA guidance letters regarding such lending arrangements.

Interest Rate & Liquidity Risks A majority of credit union member balances are in rate-sensitive accounts, which are less stable funding sources than regular shares or share drafts. Higher levels of interest rate risk will have a negative impact on earnings when rates rise. It is vital for credit unions with high exposure to interest rate risk to proactively re-structure their balance sheets, sell off excessive concentrations of long-term loans, and re-price share products before rates begin to rise.

Growing portfolios of long-term, fixed-rate loans also pose liquidity risks. Compounding those risks, some credit unions are beginning to purchase investments with longer maturities to obtain slightly higher yields. Such calculated risks negatively impact short-term liquidity.

Another strain on liquidity is due to elevated real estate foreclosures, which increase the level of non-earning assets.

Concentration Risks Concentration risks are compounded when credit unions holding high levels of mortgages also hold mortgage-backed securities with similar risk characteristics.

Credit unions must employ sound risk mitigation and diversification strategies to effectively manage concentration risks and prevent concentrations from reaching unsafe levels.

Responsible Lending While ensuring that credit unions mitigate all of these risks, the NCUA will continue to encourage responsible lending. The best service that credit unions can offer consumers and businesses to promote economic recovery is access to sound and affordable loans through a healthy financial institution.

The NCUA Board released a final rule on Feb. 2, 2012 requiring federally insured credit unions to develop and adopt a written policy on interest rate risk (IRR) management and a program to effectively implement that policy.

The final rule is effective Sept. 30, 2012. Under the final rule: • All federally insured credit unions falling within the asset-size and activity triggers (below) would be required to have an IRR management program.

• Compliance with the final rule would be part of a credit union’s overall asset liability management responsibilities and would be a condition of receiving and maintaining federal deposit insurance.

• IRR is defined as: “vulnerability of a credit union’s financial condition to adverse movement in market interest rates.” It CONTINUED ON PAGE 20

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Regulatory Concerns During 2012 (Continued) also notes that credit unions have to address IRR from several sources which include re-pricing risk, yield curve risk, spread risk, basis risk, and options risk.

• NCUA believes credit unions should have a written policy that expressly states the credit union’s IRR tolerance and an effective IRR program that “identifies, measures, monitors, and controls IRR.” Such a program is an “essential component of safe and sound credit union operations.”

• There are asset-size and activity triggers for how the written IRR policy requirements would apply: ° Federally insured credit unions with less than $10 million in assets would not be required to have a written policy. ° Federally insured CUs with assets $10 million or more but not exceeding $50 million would have to meet the written policy requirements if all of their first mortgages held in portfolio plus total investments with maturities of greater than five years are at least 100 percent of their net-worth.

(Credit unions in this asset range would not have to have a written policy if they have less than 100 percent of their net-worth in first mortgages and total investments with maturities of more than five years.) ° Federally insured credit unions with assets of more than $50 million would have to meet the written policy requirements.

All federally insured credit unions that meet the thresholds would have to have an effective IRR management program that is consistent with the guidance. Requirements for the written IRR policy include: • The policy may be a separate document or part of the credit union’s policy on ALM, investments, funds management, liquidity or other policies.

• The document must clearly describe the credit union’s IRR policy.

• The board of directors is responsible for the adequacy of the IRR policy, which should be consistent with the credit union’s business strategies.

• It should reflect the credit union board’s risk tolerance, based on the credit union’s financial condition and risk measurement systems, consistent with the credit union’s balance sheet structure.

• The policy should state actions and authorities required for exceptions to the policy and limitations under it.

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• The policy should establish responsibilities for identifying, measuring, monitoring, controlling and reporting IRR and establish risk limits.

In addition, a written IRR policy should, according to the guidance, • Identify committees, persons or other parties responsible for review of the credit union’s IRR exposure; • Direct appropriate actions to ensure management takes steps to manage IRR so that IRR exposures are identified, measured, monitored, and controlled; • State the frequency with which management will report on measurement results to the board to ensure routine review of information that is timely (e.g. current and at least quarterly) and in sufficient detail to assess the credit union’s IRR profile; • Set risk limits for IRR exposures based on selected measures (e.g. limits for changes in re-pricing or duration gaps, income simulation, asset valuation, or net economic value); • Choose tests, such as interest rate shocks, that the credit union will perform using the selected measures; • Provide for periodic review of material changes in IRR exposures and compliance with board approved policy and risk limits; • Provide for assessment of the IRR impact of any new business activities prior to implementation (e.g. evaluate the IRR profile of introducing a new product or service); and • Provide for annual evaluation of policy to determine whether it is still commensurate with the size, complexity, and risk profile of the credit union.

Additional information on Interest Rate Risk Analysis can be found in the compliance sharing portion of www.lscu.coop. ■

Are you ready to

Director’s Resource Each quarter the League of Southeastern Credit Unions produces a newsletter geared toward credit union volunteers.

The Director’s Resource Newsletter has information about upcoming events specifically for volunteers, stories that will give them a greater understanding of what the League and CUNA are doing for credit unions, as well as stories that will enrich their role as a volunteer.

Articles in the Director’s Resource cover topics such as best practices for board members, issue updates on ongoing legislation affecting credit unions in both states, special highlights of conferences and workshops geared toward directors, key volunteer resources, and updates on the progress of the Cooperative Image Campaign. This is a good resource for volunteers to gain a greater understanding of what the League and CUNA are doing for credit unions and stories that will enrich their job as a volunteer.

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INITIATIVES

Cooperative Initiatives In-School Branches Teach the ABCs of Money Management Adena Whitman, director, Member Relations With the average American household carrying more than $10,000 in credit card debt and the average college graduate having nearly $20,000 in debt, (Demos.org, “The Economic State of Young America,” May 2008), teaching money management at a young age is one way to make sure our young people become financially fit. With 259 credit unions from 44 states and the District of Columbia supporting 990 individual in-school/youth center branches, credit unions across the country are moving money management into the classroom.

Often referred to as a student credit union or student-run credit union, in-school credit unions are generally established as a financial education partnership between a credit union and a school or school district. While the scope and operation often vary depending on needs and resources, facilitating in-school branches gives students the opportunity to learn money management skills as they make account transactions at school, often coupled with additional financial education. Most in-school credit unions are also student-run, providing an additional benefit of developing career, math, and organizational skills to the students involved in the operation of the branch.

“Windham Elementary in Daleville, Ala. was our first school to open an in-school branch. In 2009, we attended a PTO meeting and then they allowed us to go classroom to classroom, talk to the kids, and give them information to take home with them,” said Lisa Hales, vice president of marketing, Army Aviation Center Federal Credit Union.

“Each year, we attend their school orientation day and set up a table. Sometimes we are able to speak at orientation and occasionally Kirby Kangaroo [kid’s club mascot] goes along – depending on the audience. We promote convenience for the parents, as they don’t have to come by the branch to make deposits into their children’s aaccounts,” Hales explained. “We also promote the savings habit aand allow the children to deposit any amount they have, even as llittle as a nickel. It’s gratifying because we have some students tthat we see every single week.

TTheir parents just get it.”

Kirby Kangaroo Club members with Kirby and Emily Darnell, marketing specialist for AACFCU.

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Now, with a presence at eight schools and Boys & Girls Club programs, Army Aviation Center Federal Credit Union is continuing to reach out to youngsters with special accounts geared to kids as well as financial education lessons.

Danielle Seaton, a teacher and credit union sponsor at Windham Elementary, said, “The kids race in each week to make their deposits and they get to see how their money adds up over time. It’s an important lesson to learn early.”

“Partnering with our area schools allows us to showcase our credit union’s commitment to education and the school systems,” said Tracy Downs, vice president of marketing, Community Credit Union in Gadsden, Alabama. “The credit union works with teachers to continue their efforts to educate students on personal finance topics. Having students work at the in-school branch enables them to take what they are learning in the classroom and apply it in a “hands-on” way, whether in their school work or in an outside work environment.

Now in seven schools, Community Credit Union is planning to add three more schools in the next year or so.

“We have had schools and parents coming in and asking the credit union to create a branch in their schools,” said Downs. “In addition to teaching money and math skills, we are teaching the student tellers about social interaction in a workplace, how to be responsible, and about etiquette.

Working in the credit union’s in-school branches is a tutorial for real life.”

Students are selected to “work” at the credit unions and often rotate to On the Job TV Host Bobby Jon Drinkard (C) with student workers of American Heritage CU in-school branch. different positions within the credit union. Sometimes the students act as tellers and other times, work as escorts for the students making deposits.

“Our students do the actual transactions, balance the drawers, and even report the transactions back to the credit union through email and fax,” said Jamie Payton, COO of Heritage South Credit

Union, which is based in Sylacauga, Ala. “At Sylacauga High School, we helped create a course of study the kids have to take in order to participate in the class and work in the credit union. One of the skills we teach is manual reconciliation because it’s important they know how to actually balance an account.”

“Using the STAR manuals, the credit union, in collaboration with the school, developed a study curriculum with online testing so they can obtain a certification showing they have completed certain study modules,” Payton continued. “We have even had some of the students stay on with the credit union while going to college. Our goal is to give these students marketable skills they can take into the real world.”

Florida Credit Union in Gainesville, Fla., has been running its Bobcat Branch for 11 years and took the program a step further by creating an Academy of Finance in the school. According to Mark Starr, the credit union CEO, almost all of the students who take part in the credit union’s academy go on to college and often end up staying in the credit union industry.

“Our credit union was originally a teachers’ credit union, so passing along these accounting, computer, and life skills are part of our original mission,” explained Starr.

Winston Starr, Starr’s son, is a shining example of the longterm impact of the credit union’s in-school program. Currently a decentralized lending officer for GTE Federal Credit Union, he also worked at Florida Credit Union during college as well as afterwards as a branch manager.

“In addition to working in the school’s credit union during high school,” Winston said, “I was able to work at the other branches full time during the summers. We did everything at the school branch except make loans, which provided a real world perspective you don’t get at other types of jobs.”

Winston went on to explain that not only has he kept in touch with some Students get a “hands on” experience at of the people he VyStar’s in-school branch. attended the Finance Academy with, but they are also currently credit union staff.

“We got the same training the credit union staff got, covering finance, compliance, cash operations, marketing, and working teller lines,” he explained. “We even had the opportunity to train the other kids. Essentially, we grew up together in this program.” Vystar Credit Union is in the process of opening its fifth in-school branch and based its program design for the Vystar Academy of Business and Finance on the Florida Credit Union model.

“You would not be able to tell the difference between our school branches and any of our “real world” branches,” said Angie Chriest, branch vice president for Vystar Credit Union. “Our goal was not only to teach financial management, but to give the students a hands-on experience which will help them throughout their lives. By the time our students graduate high school, they generally have checking accounts, savings account, and a money market or CDs. Essentially, we are giving them a head start into a successful financial future.”

“Just counting our high school accounts, students have more than a million dollars in the credit union,” Chriest explained. “We consider our academy a benefit to everyone. Our kids get the information they need to succeed and the credit union attracts new, younger members while following the mission of ‘People Helping People.”

“Credit unions firmly believe financial education is a true pathway to financial success,” said Adena Whitman, director of member relations for the League of Southeastern Credit Unions. “Two out of every three credit unions offer some sort of financial education, and many partner with local schools to create programs that help students learn the difference between wants and needs, how to create a budget, and how to save.

Instilling these values early gives students a greater chance to thrive financially.”

Want to start a credit union branch in your area? Contact the League of Southeastern Credit Unions Cooperative Initiatives team or visit the Cooperative Initiatives section on www.lscu.coop for additional information.

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In-School Branches Teach the ABCs of Money Management (Continued)

Listed below are credit unions in Alabama and Florida with in-school Branches. If your credit union isn’t listed and you would like to be included in the national list of credit unions with school branches, visit http://www.cuna.org/finlit/youth/youth_form.html to add your credit union to the directory. â–

Alabama

Florida

Army Aviation Center Federal Credit Union Contact: Lisa Hales 341 North Daleville Ave. Daleville, AL 36322 Tel: 334.598.4411 Ext.1307 Youth Branches (student-run): Elementary School (2), Middle School (3), Boys & Girls Clubs (3)

Community Credit Union of Florida Contact: Deborah Blair 1051 South US 1 Rockledge, FL 32955 Phone: 321.637.3206 Youth Branches (student-run): Elementary School (5), High School (1)

Community Credit Union Contact: Tracy Downs 110 S. 26th St. Gadsden, AL 35904 Phone: 256.543.7302 Youth Branches (student-run): Elementary School (1), Middle School (5)

CFE Federal Credit Union Contact: Suzanne Dusch 1000 Primera Blvd Lake Mary, FL 32749 Phone: 407.228.7650 Youth Branches (student-run): High School (4)

Heritage South Credit Union Contact: Jamie Payton 60 Gene Stewart Boulevard Sylacauga, AL 35151 256.401.1219 Youth branches (student-run): High School (2)

Florida Credit Union Contact: Mark Starr P.O. Box 5549 Gainesville, FL 32627 Phone: 352.377.4141 Youth Branches (student-run): High School (1) Suncoast Schools Federal Credit Union Contact: Juli Lewis 6801 E Hillsborough Ave. Tampa, FL 33610 Phone: 800.999.5887 Youth Branches (student-run): Elementary School (6), Middle School (3), High School (23) VyStar Credit Union Contact: Angie Chriest 4545 Blanding Blvd.

Jacksonville, FL 32210 Phone: 904.777.6000 ext. 5428 Youth Branches (student-run): High School (4)

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FOUNDATION

Foundation Help Leave a Lasting Impression Laura Vann, vice president, Cooperative Initiatives The Credit Union National Association (CUNA), the Southeastern Credit Union Foundation (SECUF), and the Carolina Credit Union Foundation (CCUF) are joining forces to build therapeutic playgrounds at All Children’s Hospital in Tampa, Florida and Levine Children’s Hospital in Charlotte, North Carolina. Both are designated as Children’s Miracle Network (CMN) Hospitals, reinforcing the long-term commitment of credit unions to CMN Hospitals and the CU4Kids program.

This project represents credit unions’ tradition of completing community service projects in conjunction with the host cities of the Republican and Democratic National Conventions (RNC & DNC). These “leave behind” projects are designed to not only demonstrate the credit union motto of “People Helping People,” but also to raise awareness of the credit union social mission with Republican and Democratic officials attending the party conventions.

“As the conventions bring the national spotlight to our areas, we have the opportunity to showcase the cooperative spirit of credit unions and the tremendous impact their efforts make on our local communities,” said Joe McGee, chairman of the board of the Southeastern Credit Union Foundation and president/CEO of Legacy Community Federal Credit Union.

According to McGee, it will take $300,000 in each city to construct the therapeutic playgrounds.

Help Make a Dif ference

Visit – www.supportourcucommunity.org to learn more about the recognition levels.

“To show our commitment to the success of the Tampa project, the LSCU Service Corporation (LEVERAGE) board of directors has made a $30,000 contribution to the project,” said Patrick La Pine, president/CEO of the League of Southeastern Credit Unions. “We are asking our member credit unions to join us in building the playgrounds to not only promote healing for patients and families, but to also help credit unions make a lasting impression in the convention host cities.”

Representatives of All Children’s Hospital have noted the need for the therapeutic playground and how it will help children develop fine motor skills and gross motor skills, as well as helping children strengthen their upper and lower extremities. The playground will also be beneficial to family members, providing an opportunity to play while another member of the family is receiving therapy. The therapeutic playground supports the All Children’s Hospital philosophy of caring for the patient and the family as a whole.

Detailed information on the project and the support levels can be found on the Southeastern Credit Union Foundation’s website, www.supportourCUcommunity.org. A video about the project is also available on the foundation website and the League website. If you need more information about how you, your credit union and your chapter can make a tax-deductible contribution, contact SECUF Interim Executive Director Laura Vann at 866.231.0545, x2181 or laura.vann@lscu.coop. ■

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Service Project Recognition Levels Miracle Maker $50,000 plus

Visionary $25,000 to $49,999

Dreamer $10,000 - $24,999

Humanitarian $1,000 - $9,999

Supporter $100 - $999

Friend below $100

www.lscu.coop

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EDUCATION

League Education Improving Cross-Sales: A Matter of Hill, Will, & Skill Kathy Blumenfeld, vice president, CUNA Mutual Group’s Lender Development Program Coaching is one of the four cornerstones of a healthy credit union sales and service culture. The others are: training, tracking results, and sales and service culture champions who believe in the products and are accountable for results. Note that training and coaching are separate cornerstones—this is important.

Periodic training sessions in product features and sales/service techniques are necessary and extremely valuable. Coaching, however, is a continuous, cooperative process.

Avoid the “Assumption Zone” Effective coaching programs start with an objective performance analysis: Identify what employees should be doing, and what they’re actually doing. Then identify any barriers to achieving the desired performance.

Focus on facts. Avoid the “assumption zone” where you’re basing your assessment on what appears to be happening rather than the actual causes of a behavior. Start by listing some potential causes of underperformance and discuss them with each employee, so you’re both working from the same playbook.

For each issue that negatively affects an employee’s performance, try to determine whether the barrier relates to one of three things: hill, will, or skill.

Hills: Obstacles to Performance A common obstacle to sales success in credit unions is that lending employees don’t know what’s expected of them. Perhaps goals are not specific enough or communicated well.

An employee may not have the authority or time required to learn about a member’s financial situation, suggest relevant solutions, and close the sale. Employees may need more work space or other resources, such as product information sheets, brochures, or websites.

Once you’ve uncovered obstacles, you can work on eliminating them—or adjusting your expectations.

Will: The Motivation & Desire to Succeed Ultimately, motivation has to come from within each person. But you can influence employees through consistent, fair rewards and consequences.

Tangible rewards such as money or prizes are obvious motivators—as long as you’re rewarding the correct, well-defined behaviors. It’s also effective to publicly celebrate and privately acknowledge an employee’s efforts.

“Feedforward” is a motivational mentoring tool. In addition to sharing performance results after the fact (feedback), encourage employees to envision how well they’ll do with the proven sales/ service techniques you’re teaching. Persuade them to anticipate success and rewards from these actions, and they’re more likely to fulfill that prophesy.

Skill: The Knowledge & Experience to Do the Job Right If employees don’t know how to cross-sell in general, or don’t know how to present specific products to members so the members can make an informed decision, diagnose the level of each person’s skill deficiency: • Are they rusty after not using the skill for awhile? A printed job aid (“cheat sheet”) might be the solution.

• Were they taught the skill but simply aren’t good at it?

Practicing with a mentor and feedforward can help.

• Did they never learn the skill? Start with basic training, then practice with a mentor and feedforward.

Coaching Influences Behavior—as Does Lack of Coaching Whether managers, supervisors, and senior employees intend it or not, they’re influencing their lending staff’s performance every day.

Is that influence positive in your credit union? The answer is likely to be yes if you have a coaching program that’s dynamic, specific to each individual, and focused on specific behaviors. © CUNA Mutual Group, 2012 All Rights Reserved LSCU has a multitude of webinars, workshops, and conferences to assist your credit union in providing employees the professional development and training that will make a difference in their knowledge base and your bottom line. ■

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Southeast CUNA Management School: A Rewarding Learning Experience

The Southeast CUNA Management School (SRCUS) has equipped graduates with the skills and knowledge to meet the leadership challenges that arise in the credit union industry since 1971. Today, more than ever, success depends on the capacity of individuals to continuously learn and to adapt to the changes inside and outside of their credit unions. The SRCUS mission is to provide students the opportunity to develop these leadership capabilities by creating the best student experience possible through the use

of a well-rounded curriculum and experiential opportunities for professional and personal growth.

The curriculum is designed to be delivered over a three-year period with students in residence for course work each summer for eight days. For more information about the curriculum topics and registration, visit LSCU’s Events Calendar at www.lscu.coop. ■

My week at SRCUS was one of the most rewarding learning experiences I have had at any workshop, seminar or school. The classroom instruction, the networking, the ability to hear and learn from those in our industry that share the same passion for credit unions are all reasons that I look forward to returning as a 2nd year student this year!

Patty Sarne, SVP/COO San Antonio Citizens Federal Credit Union

Southeast CUNA Management School June 8-15, 2012 The Georgia Center Athens, GA

First-Year Courses: • • • • • • • • • •

Personal Leadership Effective Communications Financial Analysis Resolving Conflict Personality Styles and Work Behaviors Managerial Ethics How to Interpret and Use a Budget Team Building Financial Markets Management of Risk I

Second-Year Courses: • Working Effectively with Your Board • Team-Building • Setting a Motivating Environment • Employment Law I • Business Presentation Skills • Financial Data for Strategic Planning • Interest Rates and Financial Markets • Asset Liability • Strategic Planning • Management of Risk II • Debate with Third-Year Class • Marketing in Credit Unions • Stress Management

Third-Year Courses: • Credit Union Simulation • Lending • Organizational Leadership • Performance Management • Business Development • Employment Law II • Fraud • Presentations of Third Year Projects • Debate with Second-Year Class • Community Service Project

Upcoming Second Quarter Learning Opportunities Download the complete 2012 LSCU Events Calendar at www.lscu.coop.

April 2012 3 Lending Series: Lending to the Small Business Owner in Today’s Economy 3 LSCU Councils Meeting* Montgomery, AL 4 Questions Supervisory Committee Members Should Be Asking 4-5 LSCU State Governmental Affairs Conference (GAC) Montgomery, AL 11 LSCU BSA Training Workshop Mobile, AL 11 Handling the Credit Union’s Right of Set Off 12 Auditing Your Credit Union’s Website 18 Frontline Series: Service EXTRAordinaire: Increasing Member Loyalty & Profitability 18-19 LSCU Chapter Leader’s Retreat Panama City, FL (Invitation Only) 19 Get Serious about Offering Remote Deposit: It’s Time & Here’s How! 24 Understanding & Navigating the ACH Rules for the RDFI 24 LSCU Disaster Preparedness Workshop Miami, FL 25 Required Compliance Series: Regulatory Compliance for the Frontline 26 LSCU Disaster Preparedness Workshop Montgomery, AL May 2012 2 Regulatory Reform: Top 5 Ways Operations & IT Can Ease the Sting 8 Building the Perfect Bond Claim: Coverage, Filing & What to Do If Your Claim is Denied 9 LSCU BSA Training Workshop Birmingham, AL 10 When an IRA Member Dies 15 LSCU ALM Essentials Training Workshop Birmingham, AL 16 LSCU ALM Implementation Training Workshop Birmingham, AL 16 Handling Check Exceptions & Returns 17 Lending Series: Lender Alert: Regulation Z Mortgage Application Timing Requirements

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Member Credit Report Disputes: Completing ACDVs, AUDs, & Correcting Joint Members’ Credit 23 Required Compliance Series: Regulatory Compliance for Lenders 30 Holding Your Ground with Examiners & Regulators: The Credit Union Bill of Rights June 2012 6 Dormant Accounts & Unclaimed Property: The Legal Perspective 7 Writing Your BSA Policy 12 Call Reports: What to Look For, Entering Information & Why It’s Important 13 Lending Series: Denied Loan Requirements: Consumer, Commercial & Residential 13-16 LSCU Annual Convention & Exposition Orlando, FL 20 A Penny Saved is More Than a Penny Earned: Leveraging Technology to Improve Efficiency, Profitability & Member Service 21 Director Series: Fundamental Board Duties & Responsibilities, Regulatory Requirements & Liability 27 Frontline Series: How to Talk to Members: Handling Difficult Members & Situations 28 Accounting & Audit Reports to the Board *Bolded listings denote workshops and conferences. Non-bolded listings denote webinars.

THE POWER OF

2012 LSCU Convention & Exposition June 13-16 e l b ilat i o n a v A duca s

Educational Session Tracks

E

Each year, it is the LSCU’s goal to provide attendees with meaningful education sessions that are taught by experts in the field on current topics relevant to the credit union industry right now. This is one of the best conferences for credit union executives to attend with comprehensive educational sessions.

ck a r T

CEO ive ecut x E CU tor Direc

To enhance the educational experience at this year’s AC&E, breakout sessions are divided into suggested tracks for CEOs, credit union executives, and directors. The LSCU’s goal is to provide attendees with a wealth of information that complements individual roles at the credit union.

While session content is developed for the track audience listed, attendees are welcome to attend sessions from any track. Look for available education tracks on the AC&E Convention website www.lscuconvention.com.

e in onsit , as d e t e no b o ok will btion Note ignage. s k c Tra onven ssion s the C as on se well

Morgan Keegan LEADERSHIP FOR CHALLENGING LANDSCAPES Now more than ever, credit unions should align themselves with a trusted partner dedicated to developing and providing financial solutions in today’s challenging economic and market environment. At Morgan Keegan, we have a knowledgeable, experienced team of investment professionals focused exclusively on credit unions. We offer a broad range of services including research, market strategies, product offerings and reporting services — all developed specifically for credit unions.

Use our tools, resources and industry insights to help you navigate through today’s challenging landscape.

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COMMUNICATIONS

Communications Cooperative Image Campaign Gaining Traction Mike Bridges, vice president, Communications & Marketing

When introducing a brand or image to the public, the important steps are to raise consumer awareness of the brand or image, increase familiarity of that brand or image, and attain a desired action by those consumers. Credit unions collectively have an image, but not enough consumers understand what a credit union is and how they are different from other financial institutions. The LSCU Cooperative Image Campaign is designed to bring the credit union image to consumers and help them to understand why a credit union is the best place for them to do their banking.

Developing a creative campaign to raise the awareness is just half the battle. Reaching the consumers and measuring that impact is equally as important. The LSCU Cooperative Image Campaign explains the credit union difference, shows that credit unions save members money, and pushes consumers to join a credit union through the betternameforbanking.com website. When the campaign hit the air in September, all 14 media markets across Alabama and Florida had a presence. Nearly all of the markets were able to show the commercial on TV and online, while many markets complemented the TV ad with billboards and radio. The media buy was more than $1 million, making it one of the largest media buys any state league has ever done.

This was a great start to the campaign, but credit unions were anxious to know the impact it had on consumers. The LSCU contracted with the Southeastern Institute of Research (SIR) to measure the first flight of ads that began in September. SIR conducted the research online right before the campaign debuted and a couple of weeks after it ended. This provided a benchmark for the campaign moving forward. The research shows that it’s gaining traction. Each state saw a lift in credit union awareness from the pre- and postcampaign research. Alabama credit union awareness was lifted six percent and Florida credit unions saw an eight-percent lift. According to SIR, gaining any kind of measureable awareness lift is somewhat rare on such a short (4-6 weeks) flight. It normally takes about 12

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consecutive weeks to raise awareness. The LSCU Cooperative Image Campaign certainly has laid a great foundation.

While the campaign did raise awareness, it will take more advertising to move the awareness into familiarity. However, Google analytics on the campaign website (www. betternameforbanking.com) show that 65,000 consumers visited the website during the campaign, and 64 percent of those typed in the URL directly. This is a phenomenal number, and it shows that the ads raised enough awareness in consumers for them to go straight to the website rather than using a search engine such as Google or Yahoo. The online and Facebook ads also pushed many consumers to the website. This shows a good start in building familiarity.

The campaign did accomplish a desired action by getting consumers to consider moving their money to a credit union. Research shows that 20 percent of customers that only have a bank relationship researched a credit union. While only a few said they actually opened an account, getting consumers with no credit union relationship to consider one is a major accomplishment. The better story comes from those consumers that are primarily bank customers but do have an account with a credit union. Research shows that 34 percent of them looked closer at a credit union, and 14 percent said they moved their money to the credit union. This doesn’t show up in new members’ numbers but it does in the credit unions’ deposits and assets. These two groups provide the greatest opportunity for credit union growth.

Credit unions should look at the LSCU Cooperative Image campaign like any new product they roll out. They wouldn’t introduce it and then judge it by the very first marketing effort. Raising awareness takes time. The LSCU Cooperative Image Campaign is delivering on its promise to raise awareness, create familiarity, and cause a desired action. Building on the success of the 2011 campaign will only enhance the campaign in 2012 and beyond. ■

NEWS

League News Florida State GAC held in January The LSCU Florida State GAC was held Jan. 24-25 at the Hotel Duval in Tallahassee.

The message to attendees was that the credit union message to lawmakers needs to be clear, focused on the member, and that the bankers will no longer define the credit union movement.

Credit unions met with their local policy makers at the Governor’s Club at the Legislator Reception, and the next day they made visits to the lawmakers’ offices.

Attendees talked about the public deposits bill, foreclosure legislation, and the credit union tax-exempt status. Many of the meetings were engaging with the lawmaker asking the credit unions specific questions.

LSCU President/CEO Patrick La Pine welcomed attendees and gave an overview of the conference and the priorities for the League’s Governmental Affairs team. John McKechnie, a partner with Total Spectrum and with more than 25 years’ experience with credit unions through his work at CUNA and the NCUA, gave a snapshot of the sentiment in Washington, D.C., saying that banks are making the credit union tax-exempt status a priority in 2012.

The Regulator Roundtable featured NCUA Region III Director Herb Yolles and OFR’s Linda Charity and Bruce Ricca. Each spoke of seeing encouraging news coming out of the performance of Florida credit unions. Yolles said the forecast for the Corporate Credit Union Stabilization premium remains between 8-11 basis points.

The Florida Realtors presented a PAC fundraising and grassroots advocacy best practices; PAC awards were handed out during lunch; and the 2012 LSCU Legislative and Regulatory Agenda was presented. ■

SAS Workshops held in February The LSCU Small Credit Union Workshops were held on February 7 at Suncoast Schools FCU, in Tampa, and on February 9 at APCO Credit Union, in Birmingham. More than 55 credit union attendees from both states heard a variety of speakers focused on the issues credit unions face every day.

One attendee said, “This is the best, most informative Small Credit Union Conference I have ever attended.”

Jim Warren, CEO of Tyndall Federal Credit Union based in Panama City, provided insight into his credit union’s collection programs, and NCUA Economic Development p Specialists Chuck Brandon and Lisa Terrell provided an exam and ssupervision update which highlighted the target areas the NCUA will be ffocusing on in the coming year.

In Florida, the lunch speaker was Rob Lefkowitz, highlighting the ggrowing CRASH movement among young credit union professionals, aand, in Alabama, Lee Taylor showcased the Young & Free Program.

EEach one-day workshop featured a state of the credit union movement ooverview, a compliance overview, and a lending panel made up of credit uunion executives.

All of the materials from both workshops, including the NCUA w worksheets, are currently available online in the Small Asset Size TToolkit at www.lscu.coop. ■ SIGNAL: Vol. 3, Issue 1

www.lscu.coop

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INDUSTRY

Industry A Case Study: Utilizing a Portfolio Management Solution to Manage Debit Programs & Increase Debit Interchange Revenue A comprehensive portfolio management solution can help credit unions identify when, how, and where their members are using their cards. Then, through targeted marketing campaigns, credit unions can sway their members to select the more profitable card transaction.

A Case Study: Debit Cards Give New Meaning to the AgeOld Question “Paper or Plastic?”

With the majority of merchants and retailers focusing on customer convenience, today’s consumers have more choices at the checkout line than ever before. Traditionalists may prefer to pay with cash that they’ve procured at an ATM or local branch of their financial institution, while others are opting to use their debit cards as a primary source for payment. For those who choose plastic, now, the question becomes which is better – PIN or signature?

Genisys Credit Union, based in Auburn Hills, Michigan, is one of the largest credit unions in Michigan with 117,000 members. The credit union became sold on CO-OP Revelation in summer 2009 after seeing an opportunity to identify potential revenue streams by tracking its members’ card usage trends.

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“Since we were already CO-OP Debit payment processing users, there was no complicated installation or setup process, and no need to upload anything into the database,” says Darren Cameron, vice president, marketing, Genisys Credit Union. “We just logged into the system and our information was there and ready for us to start analyzing.”

Customized Queries Hit the Target Group Genisys initially used CO-OP Revelation as a tracking tool to monitor its members’ card usage trends.

“At first, we were simply logging in to get an idea of how many people were using our debit cards and how they were using them,” says Cameron. “We were then ready to focus in on a specific subset of our members to increase their usage of signature debit.”

CO-OP Revelation allows credit unions to analyze their data by using pre-defined queries or customizing their own.

“We wanted to specifically identify low card usage members with one to five signature transactions per month,” says Cameron.

“We worked with CO-OP and Saylent Technologies to develop the card group criteria and then simply ran the report every month. We

also developed card groups of high PIN usage debit cardholders and inactive debit cardholders.”

Influencing Cardholder Behavior to Increase Profi tability For its first targeted marketing campaign, Genisys sent a mailing to the 11,145 members in its low card usage group, pulling the mailing list directly from CO-OP Revelation.

“Before we started using CO-OP Revelation, we were marketing in a vacuum,” says Cameron. “We were unable to identify specific cardholder behavior to use in our debit card campaigns, so we could only distribute general debit card awareness campaigns to our membership. When we found our target group for this campaign, figuring out how to market only to them was a lot simpler and also less expensive.”

Genisys’ debit cards are tied to a rewards loyalty program, so the mailing touted the benefits of using the card as a signature transaction, as well as popular rewards the resulting points could be redeemed for. The sample group’s usage behavior and changes were monitored through monthly reports, and again at the conclusion of the 90-day campaign. According to Cameron, the results were astounding.

“Post-mailing, we saw an increase of 66.5 percent in signature debit usage,” says Cameron. “Among this group, the amount they spent on their purchases increased by 44 percent. We also noted that the average number of monthly transactions per card user grew by 134

It is a very powerful, versatile tool, allowing LEVERAGE to perform a detailed portfolio analysis then consult with our clients identifying opportunities to increase volume and, ultimately, the profitability of their debit program. percent, from 2.6 transactions per card per month to 6.1 transactions per card per month.

“Finally, and most importantly, our signature debit interchange revenue increased by 47 percent,” says Cameron. “We accomplished our goal of getting a particular group of people to use signature debit more often, which helped us achieve our overall goal of increasing interchange revenue. Now, we can track the effectiveness of our marketing campaigns and we have a foundation to build on for the rest of the year. We also have preliminary results for what we hope will become an annual campaign.”

“We are very impressed with the power, versatility, and ease-ofuse of the CO-OP Total Revelation product,” said Larry Rodriguez, vice president, transactional services, LEVERAGE. By implementing such a product, LEVERAGE sees this as an opportunity to provide a valuable tool to assist clients with their portfolio management.

“LEVERAGE’s implementation of this product will help our clients effectively manage their debit programs,” said Rodriguez. “It is a very powerful, versatile tool, allowing LEVERAGE to perform a detailed portfolio analysis then consult with our clients identifying opportunities to increase volume and, ultimately, the profitability of their debit program.”

For more information about CO-OP’s Total Revelation, contact a LEVERAGE business development consultant at Growth consult@myleverage.com. ■

Signature Interchange 30000

47%

25000 20000 15000 10000 5000 0

Siganture Interchange

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Assessing & Implementing Compliance Solutions Mary Elicia Del Santo, vice president, Business Development When asked to list their biggest challenges in today’s operating environment, credit unions usually place compliance at the top of the list.

The Bank Secrecy Act, the Dodd-Frank Act, Department of Housing & Urban Development, Department of Justice, and the establishment of the Consumer Financial Protection Bureau (CFPB) are a few of the forces adding to credit unions’ overwhelming regulatory pressures.

Since December of 2011, there have been more than 5,000 new pages of the Dodd-Frank Act. Like many CEOs and compliance officers, you may be asking yourself what’s a credit union to do?

Below are five questions to consider as you attempt to gain “compliance” clarity and, in the process, develop a compliance solution.

1.

2.

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Where do you need the most help?

Not all credit unions are created equal.

Small, medium, and large asset size credit unions have different product mixes, charter types, and staff resources.

All of which will be a determining factor in what type of compliance solution will be appropriate for your credit union. Smaller credit unions - with fewer internal compliance resources - may need assistance in reviewing and developing policies and procedures. Larger credit unions may need more assistance in managing the process of communicating, documenting, and monitoring policies and procedures throughout the credit union. Once you’ve defined your critical need, then you are half way to finding the right solution.

How do you stay on top of all the information?

In 2012, the Dodd–Frank Act mandates more than 200 rules that have not even been written yet. So how does your credit union stay on top of this overwhelming amount of information?

You can certainly try it on your own as there are numerous first-rate sources in the industry to review. But if you decide to look for a solution, make sure that is directly linked to the Federal Register. The Federal Register is the official daily

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3.

publication for rules, proposed rules, and notices of federal agencies and organizations, as well as executive orders and other presidential documents.

This publication is a must to stay informed. Aligning yourself with a single solution will save hours of time researching and keeping up with the most current and accurate information.

Are you using your resources effectively?

I’m sure if I asked a credit union about how they allocate staff time, they would almost all say they would rather have it allocated on member-focused activities and not compliance.

What credit union wouldn’t want to be spending its time making loans instead of working on compliance?

Consider a solution that will help automate routine activities.

With automation, credit unions will achieve increased accountability and consistency.

For the smaller credit union that does not have a compliance officer onsite, the automation will not only be a time saver but will also provide peace of mind. For the credit union that has a compliance officer or a shared compliance officer, the efficiencies gained could be dramatic when you consider that on average each new regulation may impact 16 programs or unique job roles1.

Leveraging System Resources Relationships & Industry Knowledge for Optimal Performance & Sustained Growth of Our Clients and Business Partners

866.231.0545 | consult@myleverage.com | www.myleverage.com

4. How do you disseminate regulatory information to staff?

Let’s say you are now aware of the regulation, have interpreted it, and have developed your policies and procedures. How do you effectively reach all of the different touch points in your organization? This in itself can be a monumental tracking task. Consider a solution that is easy-to-use with a well-planned execution model based on employee roles. Look for solutions that provide easy-to-read summaries that are accessible in a centralized area to implement changes quickly. Last but not least, look for a solution that will keep a time-stamped history.

5. What will it cost if it’s not done right?

It may be human nature to put off a project until you absolutely have to complete it. Refusing to acknowledge the need for regulatory compliance and waiting until an examiner reports an unsatisfactory examination is not the answer. In the long run, it will cost more time and risk by delaying the implementation and management of your compliance process. Look for a solution that will provide management tools that may be quickly accessed and implemented. Wouldn’t it be impressive to have reports ready for an examiner right up front?

Considering these five questions will help clarify your needs and assist in making an informed decision with respect to managing the compliance process. ■

LEVERAGE Partners with PCUA to bring ePurchasing to Pennsylvania CUs LEVERAGE and the Pennsylvania Credit Union Association (PCUA) are collaborating to bring credit unions in Pennsylvania the Ventelligence system along with its revolutionary buying platform called ePurchasing.

“The Association continually looks to partner with providers that can enhance the operations or services of our member credit unions,” said PCUA President/ CEO Jim McCormack. “We are pleased to partner with LEVERAGE to add Ventelligence to our offerings.”

Ventelligence, LEVERAGE’s solution that saves credit unions time, money, and resources, is a vendor management system that is quickly becoming a trusted tool for contract management and contract procurement. ■

Andy Greenawalt, CEO, Continuity Control “More Regulation Doesn’t Require More Staff” BankNews, February 2012.

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Product Development Overcoming the Challenges of 2012 Keith Hopkins, vice president, Product Support, LEVERAGE According to most experts, the economy is expected to experience moderate growth in 2012. And while we’re all anxious for conditions to improve, there are still substantial barriers for financial institutions to overcome before the industry returns to conditions that could be described as normal.

Restrictions on Revenue News that the Federal Reserve is extending its efforts to hold interest rates at near zero into 2014 – along with continuing uncertainty in the housing sector – will likely prolong weakened earnings. Plus, a recent industry study found that revenue earned from overdraft programs in 2011 declined 10.9 percent collectively for banks and credit unions from 2010.

The reason for this is likely due to increased fees and a growing popularity of alternative sources of emergency cash, such as pay day lenders, pawn shops, and loans from family and friends.

Clearly economic conditions continue to pose challenges for consumers, but increased overdraft fees charged by some financial institutions are sending them elsewhere for a financial safety net. By offering your members a reasonably priced overdraft solution, you can protect them from excessive fees, provide them with a proven safety net, and substantially improve your bottom line.

Attention to Consumer Financial Literacy Gets Serious With new director Richard Cordray now in place, the Consumer Financial Protection Bureau (CFPB) is wasting no time in focusing attention on financial products that harm consumers and make it more difficult for them to maintain control of their finances. The first order of business, announced by Cordray, is closer scrutiny of nonbank financial services providers, such as payday lenders, check cashing stores, credit bureaus, and debt collectors, that have not previously undergone extensive federal examination of their operations.

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And while efforts to level the regulatory playing field are welcomed by the financial services industry, these actions signal the need for increased, across-the-board awareness of practices that are deemed harmful to consumers by heightened regulatory standards.

We’ve known since before the CFPB was operational that regulators would have their sights set on undisclosed overdraft programs. With this in mind, if you want to ensure that your credit union is in line with new regulations before your next compliance exam, ask yourself these questions: • Is our overdraft program fully disclosed?

• Does it monitor excessive usage?

• Do we have opt-in confirmation from all account holders who are being charged overdraft coverage fees on electronic transactions?

• Do our account holder notification materials include easy-tounderstand explanations of our fees and processes?

Compliance Expertise is Essential Having access to a compliance expert can help your credit union avoid the stress of regulatory uncertainty and lead you through the ever-changing regulatory maze to make sure your overdraft program meets all compliance requirements and exceeds your members’ service expectations. In the end, both your credit union and your members will benefit.

JMFA, a preferred business partner for the LSCU Service Corp, is a leading provider of profitability and performance-improvement consulting. To learn more about JMFA, contact a LEVERAGE business development consultant at consult@myleverage.com or visit www.jmfa.com. ■

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DIRECTORY

LSCU Directory LEAGUE 22 Inverness Center Pkwy, Ste 200 Birmingham, Alabama, 35242 3773 Commonwealth Blvd Tallahassee, Florida 32303 866.231.0545

Administration Patrick La Pine, x1002 President & CEO patrick.lapine@lscu.coop Cassandra Grayson, x1004 Association Services Chief of Staff cassandra.grayson@lscu.coop Brooke Collins, x1050 Executive Assistant brooke.collins@myleverage.com

Communications

LEVERAGE April N. Ales, x1038 Member Relations Specialist april.ales@lscu.coop David LeNoir, x2158 Member Relations Specialist david.lenoir@lscu.coop Judy Scott, x1062 Member Relations Specialist judy.scott@lscu.coop

Education Julianne Talley, x1148 Director, Conferences julianne.talley@lscu.coop Teresa Gray, x2110 Director, Events teresa.gray@lscu.coop

Mike Bridges, x1022 VP, Communications & Marketing mike.bridges@lscu.coop

Brandy Norvell, x2172 Events Coordinator brandy.norvell@lscu.coop

Amy Jowers, x1020 Director, Information Services amy.jowers@lscu.coop

Becki Payne, x2129 Association Services Support Specialist becki.payne@lscu.coop

Joseph Davis, x1014 Communications Coordinator joseph.davis@lscu.coop

Governmental Affairs

Compliance

Will McCarty, x2137 SVP, Governmental Affairs will.mccarty@lscu.coop

Bill Berg, x1028 VP, Compliance Training & Information bill.berg@lscu.coop

Jason Cochran, x2159 Director, Legislative Affairs (AL) jason.cochran@lscu.coop

Scott Morris, x2165 Director, Compliance Training & Information scott.morris@lscu.coop

Jared Ross, x1012 Director, Legislative Affairs (FL) jared.ross@lscu.coop

Cooperative Initiatives

Blake Westbrook, x2164 Grassroots & Political Action Coordinator (AL) blake.westbrook@lscu.coop

Laura Vann, x2181 VP, Cooperative Initiatives laura.vann@lscu.coop Adena Whitman, x2134 Director, Member Relations adena.whitman@lscu.coop

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Andrew Gonzalez, x1010 Grassroots & Political Action Coordinator (FL) andrew.gonzalez@lscu.coop Tracy Schimansky, x1008 Association Services Support Specialist tracy.schimansky@lscu.coop

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Finance & Administration Scott Morgan, x1110 SVP, Finance & Administration scott.morgan@lscu.coop Debbie Caruthers, x1116 Director, Accounting debbie.caruthers@lscu.coop

Marvin Garland, x1102 EVP & COO marvin.garland@myleverage.com

Transactional Services Larry Rodriguez, x2169 VP, Transactional Services larry.rodriguez@myleverage.com

Mike Couey, x2136 Accounting Manager mike.couey@lscu.coop

Janice Jordan, x2176 Director, Transactional Services janice.jordan@myleverage.com

Chris Staggs, x2127 Staff Accountant chris.staggs@lscu.coop

Win Cooper, x2115 Sr. Transactional Services Specialist win.cooper@myleverage.com

Susan Sungelo, x2153 Staff Accountant susan.sungelo@lscu.coop

Chris Dirmann, x1182 Director, Card Services chris.dirmann@myleverage.com

Angie Meisenheimer, x1114 Staff Accountant angie.meisenheimer@lscu.coop

David Todd, x1198 Member Services Representative david.todd@myleverage.com

Josh Booth, x1118 Staff Accountant josh.booth@lscu.coop

Robert Plant, x1194 P/T Member Services Representative robert.plant@myleverage.com

Jason Neifield, x1142 Human Resources Manager jason.neifield@lscu.coop

Giles Paul, x1200 P/T File Clerk giles.paul@myleverage.com

Di Troch, x1054 Operations Assistant diana.troch@lscu.coop

Angela Harris, x1190 Card Services Manager angela.harris@myleverage.com

Sue McKenzie, x1124 Operations Assistant sue.mckenzie@lscu.coop

Amy Bryant, x1196 Sr. Member Services Representative amy.bryant@myleverage.com

Tameka Dukes, x2178 Shared Branching Manager tameka.dukes@lscu.coop

Nicholas Hoffman, x1192 Member Services Representative CRS & Card Services nicholas.hoffman@myleverage.com

Phillip Tyre, x1132 Director, Information Technology phillip.tyre@lscu.coop David Khoury, x1136 Network Administrator david.khoury@lscu.coop William Ross, x1134 Information Technology Specialist william.ross@lscu.coop

Barbara Parsont, x1186 Member Services Representative barbara.parsont@myleverage.com Rosanna Pouza, x1184 P/T Member Service Representative rosanna.pouza@myleverage.com

Audit & Consulting

Product Development

Corporate Business Solutions

NewGround

Mallory Pennington, x2138 Director, Audit & Consulting mallory.pennington@myleverage.com

John Brumit, x1120 Director, Product Development john.brumit@myleverage.com

Bonique Turner, x2124 Auditor bonique.turner@myleverage.com

Business Development

Streamline and enhance your payroll, benefits administration, and employee legal compliance processes by outsourcing to Corporate Business Solutions, a Professional Employer (PEO) and Administrative Services Organization (ASO).

Enhance your retail delivery with a combination of branding, consulting, branch design and build, marketing, and culture development.

Lynda Knox, x2135 Service Corporation Support Specialist lynda.knox@myleverage.com Kathy Reynolds, x2121 Auditor kathy.reynolds@myleverage.com Marya Sampson, x2132 Auditor marya.sampson@myleverage.com

Product Support

Mary Elicia Del Santo, x1144 VP, Business Development me.delsanto@myleverage.com

CU Members Mortgage

Scott Rosenthal, x1160 Business Development Consultant scott.rosenthal@myleverage.com

Earn fee income based upon your participation in the origination and/or temporary funding of loans and build your mortgage loan portfolio.

Anita Fumaria, x1140 Business Development Consultant anita.fumaria@myleverage.com

CUNA Mutual Group

Steve Pullara, x1164 Business Development Consultant steve.pullara@myleverage.com

OfďŹ ce Depot Save money on office supplies, breakroom supplies, promotional products, print-ondemand materials, furniture, computers, and more.

Telecom Recovery

Insurance and protection for your credit union and members; lending solutions and marketing programs for bottom-line impact; employee benefits to recruit and retain the right employees.

Quickly recover communications in the event of a disruption in telephone service through an affordable protection service that enables callers to get through to a credit union’s main phone or fax number, through rerouting technology and recover inbound calls to mass notification.

Keith Hopkins, x1170 VP, Product Management keith.hopkins@myleverage.com

Michael Baswell, x2151 Business Development Consultant michael.baswell@myleverage.com

CUNA Strategic Services, Inc.

Transworld Systems

Access for credit unions to products, services, and technologies.

Lisa Hammock, x1146 Director, Product Management lisa.hammock@myleverage.com

Richard Abt, x1152 Account Manager, Card Services richard.abt@myleverage.com

CU Solutions Group

Across-the-board collections solutions with an emphasis on collecting negative share draft accounts.

Deirdre Rhodes, x1104 Product Support Manager deirdre.rhodes@myleverage.com Jean Noel, x1188 Product Support Specialist jean.noel@myleverage.com Lori Vary, 941.747.9646 Director, ePurchasing lori.vary@myleverage.com Brandt Vinson, x1044 ePurchasing Coordinator brandt.vinson@myleverage.com Rosanna Jacobsen, x1096 Director, Compliance Solutions rosanna.jacobsen@myleverage.com

Marketing April Banta, x1162 Director, Marketing april.banta@myleverage.com Detra White, x1156 Production Artist detra.white@myleverage.com

PARTNERS CitiFinancial Auto Solve out-of-area repossession needs with experts dedicated to providing credit unions with the most up-to-date information including, state laws, FDCPA laws and regulations, and the newest tracking software.

Member enhancement solutions with Invest in America, Sprint, Turbotax, and others; website design, content, security, and applications solutions; full-service marketing support; and HRN performance solutions such as Performance Pro, Compease, and Policy Pro.

VERAFIN

GE

For information on partnership with LEVERAGE, contact a Product Development Consultant at partner@myleverage.com.

Take advantage of preferred auction lanes and best-in-class processes to maximize your recovery dollars for auto liquidation.

CO-OP Financial Services

John M. Floyd & Associates

Enhance services to your members by expanding your ATM service delivery channels through more than 28,000 surcharge-free ATMs.

Earn non-interest income and provide an overdraft protection program to your members.

ComplyTrac

Outsource most of your daily human resources functions with Landrum Professional, a full-service PEO.

Automated Compliance Solution, not just an information resource, it streamlines compliance procedures and reduces costs for credit unions through procedural controls to meet compliance requirements on a single platform and helps credit unions effectively execute regulations through an automated software.

Detect BSA/AML fraud with leading-edge compliance and fraud detection software.

For more information on any of these solutions, contact a Business Development Consultant at consult@myleverage.com.

Landrum Professional

NADA Access the most current used vehicle values and new vehicle invoices for a wide range of vehicles, 24/7.

Ron Dod, x1030 Marketing Coordinator ron.dod@myleverage.com

SIGNAL: Vol. 3, Issue 1

www.lscu.coop

39

SIGNAL MAGAZINE RETURN ADDRESS 3773 COMMONWEALTH BOULEVARD TALLAHASSEE FL 32303 22 INVERNESS CENTER PARKWAY, #200 BIRMINGHAM AL 35242