Q113 Signal Magazine

The Magazine of the League of Southeastern Credit Unions Spring 2013

Will Bluebird Fly Away with Your Business?

Plus To App or Not to App Is a Mobile App Right for Your Credit Union?

LSCU State-Specific Economic Profiles Information that Can Work for You

The Road Ahead for Healthcare Affordable Healthcare Act’s Impact on Credit Unions

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LSCU

Message from the President As credit unions, we have many unique cultural differences from other financial institutions. Our unity and cooperative spirit has served us well in decades past and ranks high on our list of unique attributes. However, as a national movement, we have never had one shared vision.

We’ve shared the same operating structure and the same principles; however, we have never had a guiding, long-term vision to serve as a rallying cry for the movement to help guide us into the future. The number of credit unions has gone from the tens of thousands to around 7,100 today and falling. Natural person credit unions and leagues continue to consolidate. We can’t afford to go into the next 75 years without a plan for the industry as a whole.

For the past year, CUNA, state leagues, credit unions, and system partners have been working together to form this shared vision. As some of you may know, I’ve been a vocal proponent of a process like this. At the CUNA GAC in February, CUNA President/CEO Bill Cheney presented the vision, “Unite for Good.” The vision plays on the shared values of all credit unions. It’s not an overall brand for the credit union movement, and it’s not a paid media campaign for credit unions. Think of it as an internal campaign.

“Unite for Good” is about bringing a vision together based on the shared values credit unions have and use it to guide the movement and achieve our common goals. Those goals are broken down into three main objectives: remove legislative and regulatory barriers, raise consumer awareness of credit unions, and foster service excellence throughout the movement. To make this happen we need to once again harness that cooperative spirit and have buy-in from credit unions. This means all 7,100 credit unions being on the same page, moving toward a common set of goals. If 7,100 tell the same story, so much more can be achieved with the media and consumers, as well as our state and federal policymakers.

CUNA has set up a “Unite for Good” website at www.uniteforgood.org. It contains more information and some in-depth materials that CUNA has produced. There is a credit union checklist for each of the three strategic goals of removing barriers, creating awareness, and excellent service. These action steps are not difficult and many of you are already doing a lot of them. It’s simple things like connecting with your lawmakers, meeting with regulators, fostering media contacts, and sending comment letters, to name a few. Now you’re asked to document them and share it with the League and CUNA. This shared vision and long-term strategy have taken a lot of work. Frankly, it’s been a job very few have wanted to tackle over the years, even though we all know we’ve needed it. I think most of us would agree, coming out of the Great Recession, it’s never been more important for us to recalibrate the movement. It’s very important that credit unions, leagues, and system partners understand the concept, realize their role, and understand how, collectively, we can work together to form this national message that will have a great impact on consumers and lawmakers. Bill Cheney will speak at the LSCU AC&E in June, and I’m sure this will be a part of his presentation. The LSCU will also help roll out this vision through eSignal, the second-quarter edition of Signal magazine, as well as our website and chapter meetings.

The future of the credit union movement depends on all of us working together to sustain what we have grown over the last 75-plus years. There are 95 million credit union members that approve of the unique operating structure of a credit union.

More are learning about the credit union difference every day. We need to continue to work together to inform more that they can join. At this point, we can’t afford to be picky about the vision or to be cynical. Let’s all “Unite for Good” and ensure a sustainable future for our credit unions.

Patrick La Pine President & CEO League of Southeastern Credit Unions

Table of Contents

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President’s Message Mes

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Trends Fly Away with Your Business?

Will Bluebird Blue

Editor Amy Jowers Contributors Adena Whitman Bill Berg Jared Ross Kevin Lytle Laura Vann Leonard Parkhurst Marvin Garland Mike Bridges Design & Production Detra White April Banta

Walmar Bluebird card isn’t something to take lightly but there is Walmart’s opportunity to show that a relationship with a credit union is important oppor in oorder to create a financial foundation for their future success.

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Advocacy 2013: The Year to Be Involved in Credit Union Advocacy An Aggressive Push for Public Deposits Legislation

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LSCU Legislator Profile Congresswoman Terri Sewell Congressman Bill Hager

Letters to the editor may be submitted at submission@lscu.coop.

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Connect with us!

Congresswoman Terri Sewell

Representative Bill Hager

Compliance How to Utilize LSCU State-Specific Economic Profiles

LeagueofSoutheasternCreditUnions @LeagueofSECUs

Highlights LeagueofSECUs www.lscu.coop 4

8 | Advocacy

This year is shaping up to be a politically active year for credit unions. Learn how to mobilize your credit union by establishing a plan to engage in grassroots advocacy.

A Magazine of the League of Southeastern Credit Unions

SIGNAL: Vol. 4, Issue 1

16 | Compliance

The LSCU state economic profiles provide great information and data that can be utilized in credit union business decision process.

Learn how this information can work for you.

18 | Cooperative Initiatives

Earn your Credit Union Certified Financial Counselor designation through a unique certification program that will help members build a strong financial future.

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Cooperative Initiatives LSCU Debuts Credit Union Certified Financial Counselor Training (FiCEP)

21

Foundation The Community Investment Fund (CIF) Gains Momentum

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Education Link to Learn: A CEO’s Role in Staff Development Upcoming Learning Opportunities

Link Learn

to

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Communications Is a Mobile App Right for Your Credit Union?

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League News First Annual LSCU Quail Hunt Raises Money for FEDPAC Awards Presented at CUNA GAC

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Industry To Consortium or Not to Consortium? The Answer: To Consortium

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LEVERAGE The Road Ahead: The Affordable Healthcare Act’s Impact on Credit Unions FASB Proposal on Credit Losses for Financial Instruments – What It Means for Credit Unions Important Updates to Sprint Member Discount Program LEVERAGE Launches HR Services Solutions LEVERAGE Offers Auto Club Program Exclusive to CU Members IRS Form 990 Preparation Assistance

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LSCU Staff Directory

Highlights 21 | Foundation

The Community Investment Fund is a unique investment strategy that offers the opportunity to generate interest revenue for credit unions.

22 | Education

34 | Communications

A credit union CEO is a crucial link to staff professional development. Education and training are not a cost but an investment.

It’s a mobile app world. Read how three credit unions are utilizing mobile apps to extend their member service and why they think it’s an important part of their strategy.

SIGNAL: Vol. 4, Issue 1

www.lscu.coop

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TREND

Will Bluebird

Fly Away with Your Business?

Amy Jowers, director, Information Services, LSCU

A little blue bird has built its nest in a shopping cart near you. The nest wasn’t built with the typical nest materials - your sticks or twigs or random piece of fuzz. It was built with the promise of providing low cost, easy-to-use financial services to the underserved, the unbanked, and, pretty much, the public in general. That shopping cart is located in your local Walmart. With more than 4,000 Walmart locations in the United States, Walmart and American Express’ Bluebird© prepaid debit card made its landing in October of 2012.

This isn’t the first time Walmart has tried to enter into the financial services world. In 2007, the company attempted but failed to get a banking charter. (It was able to get a banking charter in Mexico and Canada.) It has, however, successfully developed a “money center” that offers everything from credit cards and money orders to bill pay and money transfers.

Now, Walmart and American Express have hatched a banking account alternative, kind of. The tagline says it all: “Your Checking and Debit AlternativeSM - Loaded with features. Not Fees.” The card serves as an alternative to a basic banking account with benefits and without the hassle of providing the various required items it takes to open a traditional banking account, all at a very low cost.

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According to American Express CEO Kenneth Chenault, customers loaded $275 million in funds on more than 575,000 Bluebird accounts from its launch date through February. The expected overall market for prepaid debit cards is between $75 billion and $80 billion loaded in 2012. This market totaled $57.2 billion in 2011, according to the Mercator Advisory Group.

Here’s a quick rundown of the Bluebird card’s features (all free): • direct deposits • pay bills online • no ATM fees in MoneyPass© network (if you have direct deposit, if not, $2 per ATM transaction) • no annual, monthly, or overdraft fees • no minimum balance requirements • no charge to add funds (except online with debit card, $2) • remote deposit with the Bluebird mobile app • paper checks “pre-authorized” by American Express in order to prevent overdrafts • sub-account capability • send and receive money from other Bluebird accounts via email or mobile phone • road side assistance • entertainment access While the list above should cause you to take notice of Bluebird, this definitely will – the card is now FDIC-insured. Up until mid-March, American Express said it would cover customer losses by setting aside money in compliance with state money-transmitter rules that apply to its nonbank travel-services subsidiary; however, in order to accept government deposits, the company will transfer customer deposits into an account with Wells Fargo (FDIC pass through insurance). Bluebird is now an insured, prepaid debit card. The Independent Community Bankers Association calls this “a checking account in prepaid card clothes.”

This all leads to the question: will this financial fowl of Walmart and American Express fly away with your members’ business?

It might. Credit unions should take pause. However, rather than think of this as a threat, think of it as an opportunity to show and spread the goodness of what credit unions do and offer.

A reloadable prepaid debit card should never take the place of the relationship between an individual and a financial institution.

But if Bluebird is targeting the unbanked, the underbanked, and the younger generation, how will these “targets” know it’s not a good thing if they are never properly educated and/or have no experience with good money practices?

The opportunity here is to show that a relationship with a credit union is important in order to create a financial foundation for their future success.

Focus on what you do and not what your opponent is doing.

Enter: financial literacy education. Financial literacy empowers people with information to make informed and effective decisions with all of their finances. Many credit unions already offer this type of education in some form or another. Be sure your members and your community know about these events. Volunteer to teach a financial literacy course at a school in your community. Offer a workshop at the local Y or a church. Put your credit union in front of your members and your community…which, by the way, does include those that are unbanked and underserved.

Be sure to promote your kid/teen account programs. One of the selling points of the card is the ability to set up sub-accounts among your “inner circle.” The examples cited on the Walmart Bluebird website include adding money on a card for a teenager’s allowance and transfer money for books and incidentals for college students. When a new member joins your credit union, start up a conversation to find out if they have kids. If they do, mention your kid/teen account. Let them know this is an opportunity to start the learning process of how to manage their kid’s money. It is knowledge that will help ensure the kids will be successful with money for years to come.

Remind your members that they have access to their money at more places than just your physical branches. While there are more than 4,000 Walmart locations in the U.S., the Bluebird card is still limited to only those businesses that take American Express. More than likely your credit union is part of a shared services network, providing your members access to thousands of ATMs. If you aren’t part of shared services, check out the possibility of joining. There are now more than 5,000 shared services locations in the country. The costs are minimal while the benefits to your members (and you) are many. Plus, your convenience factor just went way up in their eyes.

Build, maintain, and continue to strengthen member relationships and provide that wonderful member service for which credit unions are famous.

If you do simple research on the Bluebird card you’ll find a common thread - horrible customer service. The “world-class American Express customer service” isn’t as classy as it touts. Locked accounts, unanswered calls, and 55 minutes or more on-hold time on the phone, are among the many listed.

According to one angry online post, even the customer service agents at Walmart “can’t stand the card and say it’s terrible.” Keep in mind: an unhappy customer is the loudest customer; however, an unhappy customer with whom there is no relationship is even louder.

Simplify any processes or transactions, if possible. Have there been any rumblings you’ve heard from members about a particular way something is done? Have staff members brought up an idea on how to do something differently that would benefit member satisfaction? Consider brainstorming with staff about ways to improve member experience whether it’s with just one thing or in all areas. Or, perhaps it would just be a good practice to do an annual “walk through” of the various ways you interact with members. Call on your members to suggest ideas. Ask them in your member communications, on your website, on your Facebook page or in a targeted email. Most of the suggestions or ideas won’t be valid or possible, but if there is a recurring theme on something, look into it. Of course, credit unions must remain within compliance of regulations so some of these do come with some processes that can’t be simplified.

Last but not least, be an advocate of credit unions. Credit unions may be small compared to the banks and the Walmarts of the world, but credit unions are mighty. We have seen what can happen when we all come together for a cause. Engage with your legislators at both the state and federal level and encourage your employees to do the same. Just like with your members, create and maintain relationships with legislators yearround. Make it so credit unions are on their minds at every opportunity.

Participate in League Action Alerts and get staff involved, too. Sign up for access to the LSCU Action Center (www.lscuactioncenter.com) so you will have access to the latest legislative issues, as well as the many resources that assist in being the ultimate credit union advocate.

In an “egg” shell: Walmart’s Bluebird card isn’t something to take lightly. The community bankers have already talked to the Consumer Financial Protection Bureau about the Bluebird card. Credit unions live the philosophy of “people helping people.” The cooperative nature also sets credit unions apart. How will you “face” the Bluebird? What opportunities do you see for your credit union in light of this challenge? How will you communicate that your credit union is a better choice? These are discussions that need to be done with credit union management teams and staff. Keep an eye on Walmart while focusing squarely on what makes you unique. ■

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ADVOCACY

Advocacy 2013: The Year to Be Involved in Credit Union Advocacy Although the 2012 elections are behind us, 2013 is shaping up to be a very active political year for credit unions in Washington, Montgomery, and Tallahassee. With state legislative sessions starting in Alabama and Florida and the introduction of top priority bills in Washington, there is no better time to mobilize your credit union and establish a plan to engage in grassroots advocacy.

LSCU Action Center — The LSCU Action Center is a one-stop shop for credit union CEOs, staff, and volunteers to get more involved in the political process. Since its launch in 2012, the action center has provided an easy way to send a communication to legislators letting them know that a current issue is of importance to the credit union movement. To access the LSCU Action Center simply visit www.lscuactioncenter.com, sign in using your LSCU website login information, and click on the “My Advocacy” button. For ways to market the LSCU Action Center to your credit union employees, feel free to reach out to the Governmental Affairs (GA) team.

Chapter Legislative Meet & Greets — Each year, chapters in Alabama and Florida host legislative meet & greets with local, state, and federal elected officials to discuss issues of importance to credit unions. These events are an essential part of the LSCU‘s grassroots advocacy program designed to build and

Rep. Janet Cruz (right) with Suncoast Schools FCU’s Gary Vien and Vicki Lovett at a Tampa Chapter Meet & Greet.

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maintain personal relationships between local, state, and federal lawmakers and their local credit union officials. For upcoming chapter legislative events consult the LSCU Action Center or speak with your chapter officers.

Social Media — Now more than ever, social media is playing an integral role in grassroots advocacy. The LSCU Governmental Affairs currently has a Facebook page (search LSCU Action Center) and Twitter handles for both Alabama GA (LSCUGovAffAL) and Florida GA (LSCUGovAffFL). Credit unions can visit the LSCU Action Center on Facebook or follow us on Twitter to receive upto-the-minute information about what our GA team is working on at the state and national levels, as well as what our credit union advocates are accomplishing in the districts. Additional social media resources can be found in the LSCU Social Advocacy Center at www.lscuactioncenter.com.

PAC Fundraising — One of the most important parts of credit union advocacy is PAC fundraising. The LSCU’s ability to engage monetarily in state and federal races allows credit unions the strength to be successful both politically and legislatively. To put it simply, a strong PAC fundraising program allows credit unions to support credit union friendly candidates.

In 2012, credit unions successfully raised $450 thousand for LSCU political action committees. Although, we are pleased with the progress we have made, there is much work to be done. For credit unions to truly be successful, we need everyone including members, employees, executives, and board members to do their part.

We encourage all state chartered credit unions to consider making a corporate contribution to your respective state PACs. Federal chartered credit unions cannot give to the state PAC, but may contribute to the CU-Vote Defense Fund. In Alabama, the LSCU has a theme park consignment ticket sales program that every credit union may participate in that benefits ACULAC. For the LSCU FEDPAC many credit unions have been raising money through annual contributions, deduct-a-buck, and jeans days. Although we have seen success with those programs, a growing number of credit unions are using payroll deduction to achieve their fundraising goals. This easily implemented program allows employees to give a small contribution towards LSCU FEDPAC. Most credit unions on payroll deduction meet or exceed their fundraising goals.

If your credit union would like to learn more about grassroots advocacy, contact LSCU Grassroots and Political Action Coordinators Blake Westbrook (Alabama) or Andy Gonzalez (Florida) for further information at 866.231.0545, x2164 and x1010, respectively. ■

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Be there when they need cash on a cross-country road trip. A check deposit while away at college. A human voice at 2 A.M. Or to transfer funds with the tap of a fingertip. Be there for more members, at more points in time, in ways they never thought possible. Be more.

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ADVOCACY

An Aggressive Push for Public Deposits Legislation Jared Ross, vice president, Governmental Affairs, LSCU For the better part of the past two years, the League has made a push for credit unions in Alabama and Florida to become qualified public depositories. Florida credit unions have not been able to accept public deposits since 1982, and Alabama credit unions haven’t had that ability since 2000. That means that cities, counties, school districts, police, and fire departments have not had the choice to shop around their money. They can only deposit money at a bank. As you know, the banks are fighting this tooth and nail. They are using the credit union tax exemption as a reason they shouldn’t accept, in some cases, taxpayer money.

This year the League has made an aggressive push on the issue.

In Florida, the League has contracted with Bascom Communications out of Tallahassee to help raise consumer awareness. LSCU President/CEO Patrick La Pine wrote an editorial piece, “Depository Choices Help Local Governments.” The Op-Ed was picked up in Tallahassee, Lakeland, and Florida Voices, a statewide opinion page.

La Pine lays out why public entities should be given a choice when it comes to shopping around their money, “By allowing not-for-profit credit unions to accept public deposits, municipalities could potentially receive better rates of return on their tax dollars and would have the opportunity to keep their funds within their communities.”

Bascom and the League also sent two news releases to media across the state laying out that public deposits is one of the League’s top priorities. The Saint Peters Blog picked up the release. It coincided with banks fighting the state on a tax exemption that foreign banks enjoy in Florida. The blog saw the bankers hypocrisy, “Just a few days ago, banks claimed they should be the only ones eligible to be public depositories because they pay taxes that credit unions don’t. Yet within the same week, they are making headlines trying to protect one of several tax breaks amounting to millions of dollars that they benefit from. They can’t have it both ways.” Similar stories were written in North Escambia and the Miami Herald.

Currently HB 251, sponsored by Rep. Bill Hager (R-Boca Raton), and SB 918, sponsored by Sen. Rene Garcia (R-Hialeah), are in the legislative process in Florida. Each bill has been referred to its respective banking and insurance subcommittee. The League has been pushing the issue hard with House and Senate members. When it comes to a vote, it will be tight once again.

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In Alabama, the public deposit issue is one of education for consumers and lawmakers. The League hired Kim Adams, a contract lobbyist based in Montgomery, to help educate lawmakers on the issue. Adams has many years of lobbying experience in Montgomery.

She and LSCU Director of Governmental Affairs Jason Cochran have met with many lawmakers to help them to understand how the bill will allow choice among municipalities. A bill is expected to be filed in the Senate this session. Last year public deposits received a hearing, but no vote was taken on the issue.

The League is making a similar consumer awareness push with Alabama media. A story will appear in the May issue of the Alabama Business Journal. The Birmingham News will also write an article on the subject in April. The League will continue to educate consumers that municipalities currently don’t have a choice in where they put their money.

Sometimes the legislative process is slow. It’s not uncommon for legislation to take upwards of five years or more to get passed. There are literally hundreds of bills filed every year in each state, and it takes time to educate lawmakers on why it’s good public policy and how it will positively affect tax payers. If the League can get public deposits legislation passed, it gives credit unions a measure of credibility to get more legislative items passed in the future. ■

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LSCU Legislator Profile

Congresswoman Terri Sewell How did you decide to get into politics and run for the U.S. House of Representatives?

As a native of Selma, which is located in the heart of the 7th District, it is an honor and a privilege to represent home. I ran for public office because I wanted to make a difference in the community that nurtured me. Public service is a way for me to give back to the 7th Congressional District. Throughout my career, I have never forgotten those who invested in me and my future so serving in this capacity allows me to make a difference at home.

Terri A. Sewell is the U.S. Representative for the 7th District of Alabama. Re-elected in 2012 to her second term, Congresswoman Sewell is one of the first women elected to Congress from Alabama in her own right. She is also the first black woman to ever serve in the Alabama Congressional delegation.

Congresswoman Sewell sits on the House Financial Services Committee and brings to the committee more than 15 years of experience as a public finance attorney. She also serves as a chief deputy whip for the Democratic Caucus.

Prior to her election to Congress, Congresswoman Sewell was a partner in the Birmingham law office of Maynard, Cooper & Gale, P.C.

What major long-term issues do you see facing the United States and the state of Alabama, and what should the Congress do to address those issues?

One of the toughest issues facing Alabama, and our nation, is persistent and systemic unemployment, particularly throughout parts of the 7th Congressional District. Congress can help address the unemployment issue by passing legislation that encourages job creation and growth. Our economic policy must create an environment that is conducive for businesses to grow, expand, and make products right here in America. It is also important that any regulatory policy strikes the right balance between needed oversight and encouraging business growth. We must also work to reform our tax code so that it encourages and incentivizes businesses that invest and create jobs throughout the country. As our nation’s deficit continues to increase it is imperative that we develop a balanced and comprehensive approach that makes strategic cuts to spending, reforms our entitlement program to ensure their solvency and continues critical investments in infrastructure, energy independence, education, research, and workforce development.

What are your top priorities for the 113th Congress, what would you like to see accomplished over the next two years?

One of my top priorities this Congress is workforce development and training. With the growing “skills gap� in our country, it is important that we pass legislation that will streamline and improve coordination among training programs and supportive services, recognize and expand the essential role community colleges play in job training, and improve access to education and training for individuals. That is why I recently introduced HR1324, the Workforce Development Tax Credit Act of 2013. This legislation will provide a federal tax credit to businesses that develop apprenticeship training

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programs to train and retain workers for advanced manufacturing jobs. Also, as we continue to tackle our nation’s growing deficit it is vitally important that we develop a comprehensive plan that encourages economic investments, promotes job growth, and provides for a balanced approach to deficit reduction. We cannot solve our nation’s fiscal challenges on the backs of our seniors, veterans, low-income families, and the American middle class. I am also committed to working to ensure that rural communities have access to the tools and resources needed to grow which includes expansion of rural broadband, funding vital infrastructure improvements, and encouraging economic development.

What challenges do you see facing the financial services committee over the next few years?

I anticipate that the biggest challenge facing the committee will be in building a consensus amid strident partisan politics. The committee has important work to do in housing reform and implementation of Dodd-Frank, and the approach to these issues by each political party is very different. In order to be effective, both sides will have to compromise without abandoning their primary values. This is something that Congress has shown itself unable to do. Bucking this partisan trend remains the toughest obstacle to our progress.

You were recently appointed to serve on the House Financial Services Committee. What excites you about this?

My appointment to the House Financial Services Committee provides me with the opportunity to address many of the pressing issues facing both the people of the 7th Congressional District of Alabama and the entire nation. As our country recovers from the recession, there are several issues related to the financial sector that are critically important to our nation’s continued recovery. It is imperative that we continue to enact legislation and strategic regulations that ensure that this type of crisis never occurs again.

I am excited that my committee appointment will allow me to have oversight over the full implementation of Dodd- Frank and help ensure it is implemented in a manner that promotes liquidity and transparency in the market while avoiding negative unintended consequences. I am also enthusiastic about the opportunity to work with industry participants to provide consumer protections and promote financial literacy for all Americans. This committee will also allow me to participate in the conversation surrounding GSEs (government-sponsored enterprises) and housing reform which is vital to ensuring the dream of homeownership remains possible for all qualified first-time homebuyers and middle income families.

In your opinion, what role do credit unions serve in the rebuilding of the nation’s economy?

Credit unions play a critical role in rebuilding our nation’s economy. They provide the necessary capital that is critically important to businesses and entrepreneurs. This capital enables them to grow, thrive, and produce more jobs for all Americans.

Credit unions also offer an invaluable service to communities, both urban and rural, by providing them with access to affordable, responsible financial products and related services. These services are especially important in these recovering economic times when finding access to credit and capital is still very challenging. I strongly support credit unions and the unique and essential role they play in our financial sector.

What can Congress do to help end the extreme partisan mentality that is sweeping the country? What can be done to work together and achieve significant progress over the next few years?

How to resolve the partisan gridlock in Congress is the million dollar question. I believe that making an effort to meet and understand each other outside of the legislative process would go a long way towards developing mutual respect in spite of our differences. Ultimately the American people must demand and reward the behavior they want to see in Congress by voting for candidates that promote compromise. ■

America’s First FCU’s Bill Conner, Congresswoman Sewell, NRS Community Development FSC’s Eunice Rogers, and Alabama CU’s Steve Swofford

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LSCU Legislator Profile

Representative Bill Hager

Bill Hager is a 20-year resident of House District 89. Before being elected to the House, he served three terms on the Boca Raton City Council.

He has a proven track record as a job creator in the community and knows firsthand what it is like to meet a payroll and balance a budget.

It is with this unique business acumen that Bill Hager has been successful in reducing burdensome regulations on small business owners, cutting taxes, and creating an environment friendly to entrepreneurs across the state.

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You’ve been involved in government for many years, including in your stint as commissioner of insurance for Iowa. What is it about politics that interested you enough to help guide your decision to run for the Florida House of Representatives?

We live in a democracy called the United States of America.

In a democracy people must be willing to stand up and say, “I will serve,” and I am happy to do that. I have had a series of outstanding and unlimited opportunities as an American, and part of my responsibility is to contribute to this great state and great nation. The easiest way for me to do that is by participating in the Florida Legislature, particularly given the fact that it is a citizen’s legislature that meets part-time which permits me and others like me to operate my businesses, as well as participate in the legislature.

As the 2013 Legislative Session begins, what do you feel are the biggest issues facing the Legislature this year and what do you think the Legislature needs to accomplish during the 60 day session?

Our first priority is the continuation of Florida’s intense financial discipline. Both the Florida Legislature and Governor Rick Scott have shown themselves to be extremely careful with the tax dollars of hard working Floridians, and we need to continue to be prudent and to carefully balance the budget. Secondly, we need to continue to create jobs and working opportunities for everyday Floridians so that people who have shown they want to work, can work. We have great workers here in Florida.

The pathway to that is very simple: to create an environment in which those who create jobs can thrive. We must enact policy that attracts and sustains those who create jobs such as entrepreneurs and businesses. We need to do all in our power to attract them through low taxes and an optimum environment in which they can create those jobs.

You have filed HB 251 which would give credit unions the ability to become qualified public depositories. What were your thoughts behind filing this bill and why is it an important issue to you?

I support and sponsored this bill for a series of reasons, the primary reason being that I believe in financial competition in all things and, in particular, with respect to government’s own money. HB 251 sets forth policy that will stimulate intense competition to attract and hold government deposits. In addition, it is clear that the financial standing of credit unions is on par with that of banks and they are a worthy competitive institution that ought to rightfully be seeking out public deposits.

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

I see the credit unions as a vital component of the financial services industry. Credit unions are often seen by regular Floridians as close and accessible to them with fair interest rates.

I see credit unions continuing to stabilize the financial market in Florida, making financial facilities available to Floridians, as well as continuing their traditional role in the market.

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?

I believe that grassroots advocacy is extremely important. Every legislator I know pays attention to their home constituency, as well they should. The folks at home are every legislator’s employer and as our employers I submit that we should pay eminent attention to the grassroots and our home constituency.

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

The team is outstanding, shows incredible competence, experience, and commitment to advocating for Florida’s credit unions. ■

Rep. Bill Hager believes credit unions are a vital component of the financial services industry.

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Compliance How to Utilize LSCU State-Specific Economic Profiles Bill Berg, MBA, CCUE, CUCE, BSACS, vice president, compliance training & information, Governmental Affairs, LSCU Each quarter the LSCU produces economic profiles specific to Alabama and Florida. These profiles are delivered to credit union CEOs around the same time as the Custom Performance Reports (CPRs). The profiles provide great information and data that can be utilized in your business decision process.

These state-specific economic profiles include several national graphs such as Gross Domestic Product, consumer borrowing, the Dow Jones Industrial Average, real estate prices, and unemployment rate.

The Gross Domestic Product (GDP) is a great indicator of how strong or weak the economy is operating. Two consecutive quarters of negative economic growth are generally considered a recession.

Since about 70 percent of the GDP is based on consumer behavior, consumer spending patterns are critical to how well or how poorly the economy is operating.

The level of consumer borrowing gives a good gauge of how well consumers are borrowing on the national level. Because most financial institution’s balance sheets are flush with cash, most lenders are fighting for loans, making it tougher than normal to put loans on the books. Also, credit unions’ bread and butter members (the baby boomers) are moving into retirement and borrowing less and less. That is one principal reason why the LSCU Cooperative Image Campaign is so important now. With its target audience being Gen X and some Gen Y, it is helping increase the awareness of credit unions so younger consumers will join a credit union and let us help them with their borrowing needs.

The Dow Jones Industrial Average is a tremendous indicator of the future direction of the economy. When it is up, consumer/members feel richer and are more likely to spend. When it is down, the opposite effect occurs. Although most consumer/members are impacted from this by their 401(k)s, when they open up their statement and see the value has gone up, they are more likely to spend money on vacations, cars, or other significant domestic purchases.

The Real Estate Prices graph compares your state to the national average and two other peer states. It demonstrates how the current year’s prices compares to those of the year earlier. In comparison, 2012 was a rebound year with prices increasing when compared to 2011.

The Unemployment Rate graph shows how your state’s unemployment matches up with the national level. One of the things that CUNA’s Economics and Research Group has shown is that there

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is a very strong correlation between unemployment and your chargeoff rate. At the beginning of 2012, the National Unemployment Rate was 8.5 percent, and, at the end, it was almost a point lower at 7.8 percent. During 2012, the private sector added 1.9 million jobs and the public sector lost 0.1 million for a net gain of 1.8 million jobs.

There are also eight graphs that come from the call report data.

Your state’s aggregate data is compared to national credit union data. Those graphs include Delinquent Loans to Loans; Net ChargeOffs; ROAA; Auto Loan Growth; Real Estate Loan Growth; Member Business Lending; Membership Growth; and Savings Growth.

The last page of the economic profiles contains detailed demographic data of historical trends and is broken up into asset size groups that mirror the NCUA’s peer groups with the exception of the $0-$2 million and $2-$10 million categories being combined.

This page contains a spread analysis, growth rates for assets, loans, MBLs, savings, members, FT employees, and much more.

To access past economic profiles, go to the LSCU website www.lscu.coop and login. Then click on the Governmental Affairs tab and click on Research and Economic Data.

If you have any questions on these economic profiles or if you would like any of the graphs to use in your credit union’s strategic planning session or other requirements, email Bill Berg at bill.berg@lscu.coop. ■

More Compliance Resources at Your Fingertips Compliance Helpline Compliance experts are available to answer your regulatory and compliance questions via the LSCU Compliance Helpline. Rules can change quickly and when they do, you need information. To help you respond, the LSCU has a compliance team on staff who can provide the regulatory answers and resources you seek. The compliance team is constantly monitoring the credit union industry so they can remain on top of issues, regulatory changes, and examination issues important to you. The League makes it easy for you to contact us through the helpline by calling our compliance helpline at 866.231.0541.

InfoSight InfoSight is your one-stop-shop for answers to your regulatory compliance questions. InfoSight is an online source for state and federal compliance information aimed at helping you manage your credit union’s regulatory program. Timely and detailed summaries and operational checklists, plus links to laws and regulations, provide you with the tools to meet the demands of an ever changing regulatory environment.

As a value of membership, InfoSight provides compliance summaries and guidance, links to recently revised laws and regulations, links to supervisory agencies, and information from frequently asked questions. Access InfoSight by logging in to www.lscu.coop and begin using the resources available on InfoSight.

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INITIATIVES

Cooperative Initiatives LSCU Debuts Credit Union Certified Financial Counselor Training (FiCEP) Adena Whitman, director, Cooperative Initiatives, LSCU The League of Southeastern Credit Unions (LSCU) and the Southeastern Credit Union Foundation (SECUF) are pleased to partner with the National Credit Union Foundation’s (NCUF) REAL Solutions program and CUNA to offer this unique financial counseling training program for credit union staff, which combines the affordability and convenience of a self-study program with the group hands-on learning and networking of an off-site CUNA School.

“This program will enable all credit union staff to become more confident in helping members build a stronger financial future,” said Patrick La Pine, president and CEO of the LSCU. “The Southeastern Credit Union Foundation’s board of trustees has made financial education a priority, and we are pleased to offer this program to enable credit unions to enhance the financial capability of their members.”

Individuals who successfully complete the program and exams will earn their Credit Union Certified Financial Counselor (CUCFC) designation.

Participants will join together for bi-weekly group webinars to help them stay on track and provide an opportunity to ask questions as they study each module. In-person group training sessions will be held in Alabama and Florida for Part I & Part II (August 6 and October 1), providing hands-on training with experienced counselors, as well as the opportunity to network, share best practices, and prepare for exams. Participants will be able to test as a group or individually. Special training and coaching will be provided to help you develop a detailed vision and plan for financial counseling at your credit union.

This program will enable all credit union staff to become more confident in helping members build a stronger financial future.

Patrick La Pine President & CEO, LSCU

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“FiCEP is a great program to help credit union staff counsel members to better prepare for their future and to assist when they are faced with financial difficulties,” said Lois Kitsch, program director, NCUF REAL Solutions. “That is a great extension of the credit union difference and the more counselors that are certified, the more consumers can achieve financial freedom.”

As CUNA’s financial counseling certification program, FiCEP enables all credit union staff to become more confident in helping members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collections, and loan departments, or any others who are committed to helping members gain control of their financial futures. Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts (eight total modules), they become a CUCFC, ready and able to assist credit union members in reaching their financial goals.

The benefits to credit unions participating in the program include: • Proven financial counseling skills that become part of the credit union’s culture • Written for all staff so anyone can offer financial counseling during every member interaction • Certification that satisfies members’ needs as they continually look for the value of a credit union • Differentiates a credit union by having certified financial counselors on their team • Helps members transform the way they deal with money through real-world counseling

Educational Investment

FiCEP Part I, Modules 1-4 • Introduction to Financial Counseling (Module 1) • Financial Counseling Essentials (Module 2) • Special Issues in Financial Counseling (Module 3) • Using Communication Skills During Financial Counseling (Module 4) FiCEP Part II, Modules 1-4 • Taxes, Insurance, and Investments (Module 1) • Controlling Living Expenses and Understanding Consumer Credit (Module 2) • Matching Values to Money (Module 3) • Retirement and Special Issues (Module 4)

Your credit union’s educational investment will not exceed $950 per person. Up to two students from the same credit union are allowed to share of set of books; if you chose this option your educational investment will not exceed $750 per person. The final cost will be determined based on the number of students that enroll in the program. Credit Unions under $50 million can use their $500 initiatives account.

What Is Included Nine webinars, books, and exams (eight modules), and two inperson workshops.

The deadline for the 2013 class registration is April 29, 2013. See the schedule in this article for the webinar and in-person class schedule.

LSCU will order all the materials and distribute them to participants.

Credit unions interested in having staff trained to become financial counselors should contact Adena Whitman at adena.whitman@lscu.coop. ■

2013 Webinar & In-Person Training Dates Thursday, May 30

Introduction to FiCEP & Logistics General Info on Program

3pm

Webinar

Tuesday, June 11

Introduction to Financial Counseling Module 1

3pm

Webinar

Tuesday, June 25

Financial Counseling Essentials Module 2

3pm

Webinar

Tuesday, July 9

Special Issues in Financial Counseling Module 3

3pm

Webinar

Tuesday, July 23

Using Communication Skills During Financial Counseling Module 4

3pm

Webinar

Tuesday, Aug 6

In-Person Meeting #1 with Proctored Testing on Modules 1-4

9am

Training

Tuesday, Aug 13

Taxes, Insurance, & Investments Module 5

3pm

Webinar

Tuesday, Aug 27

Controlling Living Expenses & Understanding Consumer Credit Module 6

3pm

Webinar

Tuesday, Sep 10

Matching Values to Money Module 7

3pm

Webinar

Tuesday, Sep 24

Retirement and Special Issues Module 8

3pm

Webinar

Tuesday, Oct 1

In-Person Meeting #2 with Proctored Testing on Modules 5-8

9am

Training

FOUNDATION

Foundation The Community Investment Fund (CIF) Gains Momentum Leonard Parkhurst, director, Southeastern Credit Union Foundation The Community Investment Fund (CIF) is a unique investment strategy that offers credit unions the opportunity to generate interest revenue for their credit union, while supporting the Southeastern Credit Union Foundation, as well as the National Credit Union Foundation’s (NCUF) national programs and grants.

A pooled, common fund, CIF enables credit unions to receive a competitive return on investment while automatically generating shared returns for the greater good. Safe and flexible investment options are available through Corporate One Federal Credit Union, MEMBERS Trust Company and National Cooperative Bank.

Through the CIF, credit unions have the ability to create investment portfolios with a variety of options including, but not limited to, government-issued securities, federally insured negotiable certificates of deposits and Exchange-Traded Funds (ETFs). As interest is paid on these investments, a share of the interest, determined by the credit union, is split 50/50 between the Southeastern Credit Union Foundation and the NCUF with the remainder of the interest going directly to the credit union.

Supporting the Southeastern Credit Union Foundation through the CIF allows the foundation to fund critical programs in Alabama and Florida including financial education programs, professional development scholarships, and credit union development.

According to Laida Garcia, president/CEO of floridacentral Credit Union and chairman of the National Credit Union Foundation (NCUF), “The Community Investment Fund was historically the foundation’s primary funding mechanism to support initiatives like financial education, professional development, community outreach, and disaster relief across the country. With the downturn in our economy, the CIF program experienced a loss in momentum in generating sufficient funding. That is about to change. NCUF has renewed and re-energized CIF by providing a number of options for credit union investors. I would encourage credit unions to check these options out and identify the investment vehicle that works best for them. It truly is a win-win situation, providing credit unions with a way to invest their excess liquidity while supporting NCUF and their local state foundations.”

The CIF helps support NCUF programs such as REAL Solutions, Biz Kid$, the Credit Union Development Education (DE) Program, and CUAid, which helps credit unions and their members in the event of a disaster.

“As a long-time investor in the Community Investment Fund, Corporate One knows the value of having a funding source that helps promote financial literacy to credit union members, and also is a great resource for credit unions when they need disaster assistance” says Lee C. Butke, president/CEO of Corporate One Federal Credit Union.

“As a board member with the National Credit Union Foundation, the CIF is very personal for me, and I am proud that Corporate One has a turn-key program to let other credit unions invest in this worthwhile program. The Community Investment Fund embodies the people helping people philosophy of credit unions, and I encourage everyone to consider participating.”

For more information about participation in the CIF, contact Leonard Parkhurst, director, Southeastern Credit Union Foundation, at leonard.parkhurst@lscu.coop. ■

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Link Learn

to

EDUCATION

League Education Link to Learn: A CEO’s Role in Staff Development You are a crucial link to learning for your credit union. You have an important role in staff development: establishing its priority, encouraging it by example, and supporting it in your attitude and budget. It is not a cost, it is an investment. Here are five reasons professional development is important: • Employee Retention: Staff members develop loyalty to an employer because they feel the employer cares about them as individuals.

• Staff Morale: A culture that encourages learning and fosters education creates a positive, motivated, and committed workforce.

• Operations Efficiency: Orientation to the credit union mission and training are essential for a smooth running business. The stability and tenure that result from low staff turnover also contribute to efficiency.

• Job Competency: Employees who have received job-specific training are more productive and confident.

• Member Satisfaction: Yes, staff education affects your members, who benefit from your employees’ skills, positive attitude, and efficiency. Employees who feel they make a difference in the mission of the credit union do better work.

LSCU understands the importance of professional development.

We have a vested interest in the success of your credit union, its staff,

and you. Through our connections with trusted industry experts and our knowledge of the credit union industry, LSCU provides a variety of education, training, and networking opportunities to assist you in fulfilling staff education and development. Let LSCU be the link to learning through our signature events, webinars, compliance training, and more.

LSCU Signature Events State GACs The LSCU State Governmental Affairs Conferences immerse credit unions in state credit union legislative and regulatory issues.

Attendees have an opportunity to talk about credit unions in-depth with lawmakers when they visit the capitol and during a lawmaker reception.

Annual Convention & Exposition (AC&E) The AC&E provides high quality, pertinent education from industry leaders, competitive pricing for participants, and a world-class member experience. This is a mustattend event attracting more attendees and exhibitors than any other event throughout the year.

Supervisory Committee Conference (SCC) Although designed with supervisory committee members and board members in mind, this conference is also a perfect fit for credit union managers and compliance officers, providing the latest information and updates regarding credit union auditing, compliance, and fraud.

ACCELERATE YOUR

Sponsored by

PERFORMANCE

Keynote Speaker John Foley Former Lead Solo Pilot Blue Angels

Education (Continued) Leadership Development Conference (LDC) The enhanced LDC provides the tools needed to enrich the leadership, education, achievement, and development of credit union staff and volunteers through exceptional education sessions and outstanding networking opportunities.

Credit Union Executive Dialogue LSCU, in conjunction with CUES, invites credit union executives from $500 million plus in assets to discuss trends and innovation through collaboration. One of the main focuses is that working together, credit unions can accomplish much more.

LSCU Councils Councils provide resources, information, networking, and professional development to credit union professionals in Alabama and Florida. The Councils are open to credit union employees who have responsibilities related to key areas of credit union management.

CPE Credits If a CPA, Continuing Professional Education (CPE) credits may apply for several of LSCU’s education events. Check with LSCU’s education staff for more information.

Webinars With more than 100 hot-topic webinars available, this

Scholarships Need-based scholarships

learning resource is a convenient, affordable, and time-efficient approach for credit unions to continue to enhance their professional development. LSCU’s webinars provide focus and discipline-based content with a variety of topics designed specifically for all levels of credit union employees. Participation in several webinars may qualify for special pricing.

to educational events are available through the Southeastern Credit Union Foundation (SECUF). For more information or to apply, visit www.supportourcucommunity.org. ■

Compliance Training The demand of today’s policy and regulation changes can be overwhelming. That is why the LSCU offers a variety of workshops dedicated to regulatory compliance training in areas such as BSA, Disaster Recovery, and Regulatory Compliance Updates. Many of our webinars are focused on areas of compliance.

Let us be YOUR link to learn! For more information about all of LSCU’s educational opportunities, visit the LSCU Events Calendar on www.lscu.coop.

ACCELERATE YOUR

PERFORMANCE

Select Events Kick Off the AC&E with the Annual Golf Tournament

&

Finish it Up with a Vegas- Style Dinner, Entertainment, & Silent Auction!

Upcoming 2013 Learning Opportunities Download the complete 2013 LSCU Events Calendar at www.lscu.coop.

April 2013 .....................................................................

2 3 9-10 9 10 16 16 17-19 17 18 23-24

Meeting the Requirements for Capital Adequacy & Contingency Frontline Excellence Series: The Key to Cross Selling & Member Retention LSCU State Governmental Affairs Conference (GAC) Montgomery, AL Mandatory Compliance Series: Compliance Rules the Frontline Must Know ACH Rules Update 2013 LSCU BSA Training Workshop Mobile, AL Consumer Debt Resolution Series: Maximizing Recoveries on Charged-Off Loans LSCU Chapter Leader’s Retreat Pensacola, FL (Invitation Only) UCC Article 9 Default Provisions: What Secured Creditors Need to Know Duties of the Board Secretary: Fundamentals, Best Practices, & E-Package Delivery LSCU CU Philosophy in Action Workshop & CUNA/LSCU Orientation Birmingham, AL

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BA Lending Update 2013: Trends, Regulations, & a Look at SOP 50 10 24 Opening Personal Accounts: Membership, Ownership, & Access

May 2013 ......................................................................

2 Effective Contract Negotiation, Review, & Management: 5 Things Vendors Don’t Want You to Know about Contracts 7-8 LSCU ALM Essentials & Advanced Training Birmingham, AL 7 IT Crisis Management: Business Continuity, Disaster Recovery, & Incident Response 8 Director Series: Understanding the ALLL for Directors 14 Legally Handling ATM & Debit Card Claims Under Regulation E 15 Line-by-Line Loan Review for Consumer, Commercial, & Residential 16 LSCU Disaster Recovery Conference TBD, FL 16 Frontline Excellence Series: Compliance at Account Closing 21 LSCU BSA Training Workshop Birmingham, AL

ACCELERATE YOUR

PERFORMANCE

Exhibit Hall Exchange Be Sure to Visit the Three Exhibit Networking Sessions Ex

&

Pick P i k Your Favorites, Vote, & Win during the Best-in-Show Competition!

Upcoming 2013 Learning Opportunities 21

FFIEC Guidance on Cloud Computing: Considerations for Credit Unions 22 The Branch of the Future: How Branches Will Serve Members Who Don’t Need Branches 23 LSCU Disaster Recovery Conference Mobile, AL 29 When Is an Item Payable? Stop Payments, Return Items, & More

18 Regulator Issues & Update for the Credit Analyst 19 Pricing Consumer Loans for Profitability 27 Understanding Letters of Credit: The Parties, Their Roles, & Potential Liability 30–July 3 CUNA America’s CU Conference Hilton New York, New York, NY

June 2013 ....................................................................

4 Your Depositor Has Died: Actions to Take, Mistakes to Avoid 5 Mandatory Compliance Series: Compliance Rules Lenders Must Know 6 Account Card Mistakes & How They Affect Members 7-14 SRCUS Southeast CUNA Management School The Georgia Center, Athens, GA 11 Supervisory Committee Duties & Responsibilities 12–14 LSCU Annual Convention & Exposition JW Marriott, Orlando, FL 12 Nuts & Bolts of Effective Metro 2 Credit Reporting Via e-OSCAR

ACCELERATE YOUR

Education Excellence Education Session Line Up Puts YOU in Position to Accelerate!

Visit www.lscuconvention.com to View a Complete List of Education Breakout Sessions.

PERFORMANCE

E H T E S AV

E T DA

201 3 S out he ast Regional Dire c tors’ C onfe r e nc e

C harl esto o n Pl a ce Hotel | Ju ly 14-1 7 | C harl e ston, SC

ACCELERATE YOUR Early Bird Deadline Be Sure to Register at www.lscuconvention.com

by April 30 to Receive Early Bird Pricing.

PERFORMANCE

COMMUNICATIONS

Communications Is a Mobile App Right for Your Credit Union?

Mike Bridges, vice president, Communications, LSCU

The global sales of smartphones and tablets are staggering.

In 2012, more than 300 million smartphones were purchased.

(It might surprise you that the Android platform actually outsells Apple’s iPhone.) The past 12 months also saw a major surge in tablet sales with more than 120 million being sold; most of which were the iPad and iPad mini. What’s even more staggering?

Customers have downloaded more than 40 billion apps with nearly 20 billion in 2012 alone…and that number is just the number of apps through Apple’s App Store!

Let’s face it. It’s an app world.

For credit unions, determining if a mobile app makes sense for its finding their place within the mobile app world can be difficult.

There is the cost of having the app built and the cost of promoting and pushing it out to the membership. Many credit unions are wondering if a mobile app is worth the expense or just something a few members say they want.

First Commerce Credit Union, based in Tallahassee, rolled out its mobile app in 2012. The app was part of a larger strategy that also included text messaging and a mobile site. Nick Chiamardas, eServices manager at First Commerce, says a mobile app and strategy are a necessity today.

“With the hustle and bustle of typical consumers’ lives, providing quick, easy-to-use access to their finances is paramount,” said Chiamardas. “One could liken the evolution of mobile banking to that of online banking.”

Chiamardas makes a good point. An app is basically software that extends the reach of a business. Where online banking revolutionized the member’s experience, an app takes it to a new level. It takes the user directly to the services they are looking to utilize. Anytime you make a member’s life easier, you put another brick in the foundation of keeping them long-term.

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Listerhill Credit Union, based in Muscle Shoals, introduced a mobile app to its membership in the summer of 2011. Much like First Commerce, Listerhill also offers text banking, mobile apps, and a mobile website. The members found it easy to use and have followed suit with 15 percent of online members now utilizing the app. Kristen Mashburn, marketing director at Listerhill, says having the app is the future for credit unions. “In a marketplace where our mobile phones organize our lives, members have come to expect this ability,” said Mashburn. “With the cost of acquiring new members so much greater than maintaining current relationships, having members enroll in mobile banking helps an institution find the stickiness for which we’re all searching.”

The new technology is certainly sticking at Redstone FCU, based in Huntsville. In late 2011, Redstone launched its mobile app. In a little over a year, more than 69,000 Redstone members have downloaded the app with about 3,000 members downloading it every month. Redstone sees the ease of use as the driving motivation for members. However, the credit union also sees the innovation as necessary for today’s consumer.

“Mobile banking is no longer something that consumers consider as ‘nice to have.’ It’s expected,” said Chiamardas.

“Studies have indicated that consumers are willing to switch financial institutions based on availability of mobile banking and other electronic services.”

For credit unions sitting on the fence on mobile apps, the best thing to do is look around at your competitors. This doesn’t mean just at the credit union down the street, but all competitors in your market. Consumers are looking for convenience and ease of use.

Some leading analysts believe more than one billion smartphones and tablets will be sold in 2013, meaning a billion people will have devices that bring convenience to their lives. Credit unions need to think about that as they form their mobile strategy. ■

NEWS

League News First Annual LSCU Quail Hunt Raises Money for FEDPAC The LSCU held its first annual Credit Union Quail Hunt at Doublehead Resort in Town Creek, AL, January 17 – 18. More than 40 attendees hunted over two days and raised nearly $7,000 for the LSCU FEDPAC. The event began on Friday with morning and afternoon hunts.

On Friday night, participants and vendors attended a happy hour and networking dinner sponsored by LEVERAGE and CUNA Mutual Group at the Doublehead Lodge. After the morning hunts on Saturday, participants competed in a trap shooting competition where Ken Long of Army Aviation Federal Credit Union took first prize and Kendall Speed of Mutual Savings placed second. Steve Swofford of Alabama Credit Union won the Benilli Montefeltro 12 gauge shotgun raffle donated by Alabama Teachers Credit Union.

Special thanks to LEVERAGE, CUNA Mutual, Listerhill Credit Union, New York Life, Vining Sparks, Barfield Murphy Shank & Smith, Print Resources, Jefferson Credit Union, and Alabama Teachers Credit Union for sponsoring the event. â–

Hunters preparing to head out to the field.

Awards Presented at CUNA GAC

The Credit Union National Association presented Art and Mary Wood with the Buck Levins award for their work in political advocacy on behalf of credit unions. Mary Wood, CEO of Florida West Coast CU in Brandon, Fla., and board chairman of LSCU, is the top Political Action Committee credit union fundraiser for her asset size category.

Art Wood, CEO of Railroad and Industrial FCU in Tampa, just completed a term as the Hillsborough County Republican Committee Chairman. He used his position as chairman to help credit unions gain access to state and federal lawmakers, particularly the leadership at the state level.

The League honored two congressmen for their support of credit unions during the past year. U.S. Reps. Jo Bonner (R-Ala.) and Bill Posey (R-Fla.) were the 2013 LSCU Federal Lawmaker of the Year recipients.

Bonner and Posey were co-sponsors of member business lending legislation and exam fairness legislation. Posey also co-sponsored supplemental capital, privacy notices and ATM disclosure legislation.

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INDUSTRY

Industry To Consortium or Not to Consortium? The Answer: To Consortium Marvin Garland, chief operating officer, LEVERAGE According to Merriam-Webster.com, a consortium is an agreement, combination, or group (as of companies) formed to undertake an enterprise beyond the resources of any one member.

The logic behind a consortium can be explained by the saying we all know: “There is strength in numbers.” This is especially true in the case of purchasing. More often than not, when two or more organizations join together for the purpose of purchasing materials, services, or capital goods, they are able to leverage pricing, service, and technology from suppliers. This is an area where credit unions can truly benefit through reduction of costs and improvement in spending.

Collaborative purchasing is not a new idea by any means. Farmers have had cooperatives for many decades with the goal of combining their individual needs to gain purchasing power (as well as marketing power). Other examples are independent grocers, retail hardware stores, and college bookstores, to name a few. Many of these organizations have been formed to allow them to survive against the powerful purchasing and marketing power of large food chains and general merchandise stores. (Sound familiar? Being “cooperative” is nothing new for credit unions.)

“There is strength in numbers.”

This is especially true in the case of purchasing.

Still considered the definitive written work on the subject, the 1997 study, Purchasing Consortiums: Horizontal Alliances Among Firms Buying Common Goods and Services. What? Who? Why? How?,

by Dr. Thomas Hendricks for the Center for Advanced Procurement and Supply (CAPS Research), documented that those companies participating in purchasing consortiums reported that purchasing through their consortiums saved them about 13.4 percent.

Purchasing consortiums are set up to combine demand from several different vendors and to increase purchasing power of each of the individual consortium members. Credit unions can reap the benefits of belonging to a purchasing consortium through economies of scale, economies of process, and economies of information.

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Economies of Scale A purchasing consortium allows credit unions to combine a volume of products and services needed and create a greater purchasing efficiency. By harnessing the combined purchasing power, credit unions are able to maximize the savings that they may not be able to obtain on their own. Areas of economies of scale include: • Lower prices/combined negotiating power • Lower transaction costs

Economies of Process Some credit unions simply do not have the staff or the processes to effectively bid all services. By sharing purchasing information on suppliers, new technologies, historical spending behavior, and more, a consortium can create an economy of process above and beyond what each credit union could achieve on its own. Areas of economies of process include: • Reduced workload • Better practices

Economies of Information The days of traditional paper bidding methods are becoming fewer and fewer. New technology offers smarter bidding strategies that offer more flexible and quicker tactics for purchasing information gathering and decision-making. Areas of economies of information include: • Higher quality • Lower supply risks An example of a successful credit union purchasing consortium is the LEVERAGE ePurchasing Consortium. For the past four-anda-half years, LEVERAGE has offered ePurchasing services to credit unions that have collectively saved more than $1.9M. Members of the LEVERAGE ePurchasing Consortium consistently see an average of 20 percent savings on commodities from computer equipment to janitorial services. Currently, there are 70 credit unions that have taken advantage of these time-and money-saving activities.

A purchasing consortium could help credit unions provide goods and services to members at the best possible value. A diverse portfolio of competitive contracts and value-added services provide high quality, cost-effective, and timely solutions. In an economy where we all have to do more with less, if a credit union hasn’t considered utilizing some form of collaborative purchasing method, it’s time to do so. ■

The Road Ahead: The Affordable Healthcare Act’s Impact on Credit Unions Kevin Lytle, vice president, Innovation & Business Development, LEVERAGE There is a famous quote I think of when I feel the world is passing me by, “When you don’t know where you are going, any road will get you there.” Now Lewis Carroll wasn’t thinking about healthcare when he said this in the late 1800s, but what he did know was that one needs to have a specific goal or destination in mind before progress can be made.

The Affordable Healthcare Act, better known as “Obamacare,” is coming at credit unions, and there is no rational reason to think it won’t. While many states are fighting the implementation of Obamacare, there are also those that thought Obamacare might not make it at all or at least be delayed. That is not the case and every business, credit unions included, needs to understand what Obamacare means and how it will affect their credit union.

It’s clear that the access road to healthcare will change dramatically in the near future. For credit unions in Alabama and Florida, we’re examining the impact the act will have on credit unions, members, and select employee groups. We will closely monitor the actions and decisions of the Florida and Alabama legislatures and state government agencies responsible for enacting the Affordable Care Act. There is a lot to sift through.

We are actively exploring the various roads for credit unions, members, and select employee groups to follow to ensure compliance with the act and reduce healthcare costs. Credit unions need to prepare for the implementation of Obamacare. Sitting by and waiting to see if your state government will overturn it or throw out pieces is not a good strategy. We will keep you informed of our progress and communicate all significant decisions made by our federal and state governments.

The road we’re on now may not be the road that takes us to where we need to be with healthcare, but it is a good start down the right path.

Another way to look at Carroll’s thought is that without a destination one tends to wander. Too much is at stake to not have a plan for healthcare. ■

Kevin Lytle

is the new vice president of innovation and business development of LEVERAGE. Kevin, hired in January, oversees the product development, marketing, and sales teams. Kevin comes to LEVERAGE with more than 22 years of experience in marketing, product development, product management, and business development. He has spent nearly his entire career in the credit union industry.

Prior to coming to LEVERAGE, Kevin was the vice president of marketing and product management at West Corp Federal Credit Union. His main duties included all marketing strategies, developing new products that reduced operating costs for credit unions, and public relations. For 14 years, Kevin worked at CUNA, first with the CUNA Service Corporation and later as the vice president of national marketing for CUNA out of its Madison office.

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Product Management FASB Proposal on Credit Losses for Financial Instruments – What It Means for Credit Unions Keith McMurtrie, vice president, Audit & Consulting, LEVERAGE The Financial Accounting Standards Board (FASB) issued a proposed accounting standards update regarding financial reporting of expected credit losses on loans and other financial assets held by financial institutions, including credit unions.

This proposal is regarding utilizing the ‘current expected credit loss’ (CELC) model which would replace the ‘incurred loss’ model currently in use in numerous organizations. The CELC model is considered more forward looking than the incurred loss model. In the CELC model, credit unions should use a number of factors in developing the credit loss estimate. These factors include relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the financial assets’ remaining contractual cash flows.

Credit unions would estimate the expected credit losses on its’ financial assets for each reporting period. This estimate would reflect management’s current estimate of the contractual cash flows that the entity does not expect to collect.

The income statement would show the change in the estimate of the expected credit losses resulting from: (1) changes in the credit

risk of the entity’s financial assets; (2) changes in conditions since the previous reporting date; and (3) changes in reasonable and supportable forecasts about the future. The balance sheet would reflect the current estimate of expected credit losses at the reporting date and the income statement would reflect the effects of credit deterioration (or improvement) that has taken place during the period.

Currently, the guidance would be adopted by cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance becomes effective.

How is this change going to impact your credit union? Gathering the data necessary to prepare the current expected credit loss calculation may be a challenge. Management must determine which data to collect and use as inputs to the collection. What will be the source of the data? Taking all of these factors into account, changes to the loss rates may result in more volatility to the ALLL. ■

Important Updates to Sprint Member Discount Program

As part of the recently renewed agreement with Sprint, this noninterest income generator has a change that will be important for program participants to communicate to their members to ensure maximum earning potential.

Credit union member verification is now required to receive the credit union program discount. Periodically, Sprint will require participants to verify program eligibility as stated below: • New Sprint customers must verify membership within 30 days of activation.

• Existing Sprint customers must provide proof of discount eligibility through credit union membership when they upgrade a device with 20 or more months since the last validation.

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Members who confirm their eligibility will continue to receive the benefits and exclusive savings that Sprint offers. There are two ways to validate eligibility: • Download the free Invest in America App on your Android or iPhone.

• Fill out verification form and supporting documents to fax directly to Sprint.

For more information about the Sprint credit union member discount program, contact a LEVERAGE Business Development Consultant, consult@myleverage.com. ■

Product Development LEVERAGE Launches HR Services Solutions

LEVERAGE Offers Auto Club Program Exclusive to CU Members

LEVERAGE has a history of working with credit unions to provide HR solutions, and we are refocusing this area to launch LEVERAGE’s HR Services. With this launch, Anita Fumaria will return to a familiar role as director for the new service. Anita has been with LEVERAGE for more than 12 years, most recently serving as a business development consultant in the Florida and Alabama markets.

The launch of LEVERAGE HR Services is a response to the growing needs that credit unions are currently experiencing with human resources. Credit unions are beginning to see an increase in hiring activity as the economic climate begins to repair. Depending on the credit union, position, or scope of the search, LEVERAGE has an answer for recruiting challenges.

LEVERAGE partners with several national companies to help credit unions improve efficiencies and adequately help credit unions of all asset sizes.

LEVERAGE now offers Credit Union Auto Club, the newest Invest in America program, powered by CU Solutions Group. It was created exclusively for credit union members to provide unparalleled service and unprecedented value on a wide range of roadside assistance services and other benefits at a significant savings compared to competing auto club plans.

Service Includes: • Executive recruiting • Assistance with compensation and employee evaluations • PEO/ASO services For more information about LEVERAGE HR Services, email Anita Fumaria at anita.fumaria@myleverage.com. ■

Credit unions enrolled in this program are eligible to earn a marketing reimbursement of at least $5 per purchased membership when they actively market the Credit Union Auto Club to their members.

Enrolled credit unions also have access to turnkey marketing materials and the advantage of a value-added offering when closing auto loans.

To learn more about Credit Union Auto Club, email a LEVERAGE Business Development Consultant, consult@myleverage.com. ■

IRS Form 990 Preparation Assistance Due May 15 Form 990 is an annual financial information tax return required to be filed with the IRS by most tax-exempt organizations from income tax under section 501 (c) to help prevent abuse and enforce financial accountability. Federal credit unions are not required to file this form.

For those credit unions that are required to file a Form 990, they must be complete and filed by May 15, annually. Instead of looking at it as a necessary evil, have LEVERAGE’s audit and consulting staff take this off your to-do list.

To sign up for FORM 990 preparation assistance or any audit services offered by LEVERAGE, visit www.cuace.com. ■

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DIRECTORY

LSCU Directory LEVERAGE

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 Mike Bridges, x1022 VP, Communications mike.bridges@lscu.coop Amy Jowers, x1020 Director, Information Services amy.jowers@lscu.coop Natalie Edwards, x1014 Communications Coordinator natalie.edwards@lscu.coop

Compliance Bill Berg, x1028 VP, Compliance Training & Information bill.berg@lscu.coop Scott Morris, x2165 Director, Regulatory Advocacy scott.morris@lscu.coop

Cooperative Initiatives Laura Vann, x2181 VP, Cooperative Initiatives laura.vann@lscu.coop

Leonard Parkhurst, Jr., x1154 Director, Southeastern Credit Union Foundation leonard.parkhurst@lscu.coop

Finance & Administration

Education

Tyrell Baker, x1136 Director, Information Technology tyrell.baker@lscu.coop

Julianne Talley, x1148 Director, Conferences julianne.talley@lscu.coop Teresa Gray, x2110 Director, Events teresa.gray@lscu.coop Brandy Norvell, x2172 Events Coordinator brandy.norvell@lscu.coop Becki Payne, x2129 Association Services Support Specialist becki.payne@lscu.coop

Governmental Affairs Jared Ross, x1012 VP, Governmental Affairs jared.ross@lscu.coop Jennifer Martin, x1150 Director, Legislative Affairs (FL) jennifer.martin@lscu.coop Andrew Gonzalez, x1010 Grassroots & Political Action Coordinator (FL) andrew.gonzalez@lscu.coop Jordan Burroughs, x1008 Governmental Affairs Specialist jordan.burroughs@lscu.coop Jason Cochran, x2159 Director, Governmental Affairs (AL) jason.cochran@lscu.coop Blake Westbrook, x2164 Grassroots & Political Action Coordinator (AL) blake.westbrook@lscu.coop

David LeNoir, x2158 Member Relations Specialist david.lenoir@lscu.coop

Transactional Services Larry Rodriguez, x2169 Sr. Director, Transactional Services larry.rodriguez@myleverage.com Janice Jordan, x2176 Director, Transactional Services janice.jordan@myleverage.com

Debbie Caruthers, x1116 Director, Accounting debbie.caruthers@lscu.coop

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

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

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

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

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

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

Linda Medina, x1200 P/T Member Services Representative linda.medina@myleverage.com

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

Belinda Wilson, x1184 Member Services Representative belinda.wilson@myleverage.com

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

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

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

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

David Todd, x1124 Administrative Services Manager david.todd@lscu.coop

Barbara Parsont, x1186 Member Services Representative barbara.parsont@myleverage.com

CUSC of Alabama

Michelle Kelly, x1192 P/T Member Services Representative michelle.kelly@myleverage.com Olu Dawodu, x1198 P/T Member Services Representative olu.dawodu@myleverage.com

Audit & Consulting Keith McMurtrie, x2133 VP, Audit & Consulting keith.mcmurtrie@myleverage.com

April N. Ales, x1038 Member Relations Specialist april.ales@lscu.coop

Shani Montford-Smith, x2127 LEVERAGE Suport Specialist shani.montford-smith@myleverage.com

Judy Scott, x1062 Member Relations Specialist judy.scott@lscu.coop

A Magazine of the League of Southeastern Credit Unions

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

David Hairston, x1132 Network Administrator david.hairston@lscu.coop

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

Adena Whitman, x2134 Director, Member Relations adena.whitman@lscu.coop

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Scott Morgan, x1110 SVP, Finance & Administration scott.morgan@lscu.coop

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Melissa Hamner, x2139 Senior Auditor melissa.hamner@myleverage.com Kathy Reynolds, x2121 Auditor kathy.reynolds@myleverage.com Marya Washington, x2132 Auditor marya.washington@myleverage.com Bonique Turner, x2124 Auditor bonique.turner@myleverage.com

Product Management Keith Hopkins, x1170 VP, Product Support keith.hopkins@myleverage.com Lori Vary, 941.747.9646 Director, ePurchasing lori.vary@myleverage.com Brandt Vinson, x1044 ePurchasing Coordinator brandt.vinson@myleverage.com Kelli Silvernale, 866.949.6220 Director, Vendor Management kelli@cuvm.org Karen Moran, 866.949.6220 Sr. Contract Management Analyst karen@cuvm.org Julie McCue, 866.949.6220 Contract Management Analyst julie@cuvm.org Jean Noel, x1188 Contract Management Analyst jean.noel@myleverage.com Rhea Oaks, x1146 Contract Management Analyst rhea.oaks@myleverage.com Britni Mehl, 866.949.6220 P/T Data Entry Specialist britni@cuvm.org Tori Shamy, x1172 Product Manager, Merchant Lending tori.shamy@myleverage.com Deirdre Rhodes, x1104 Product Support Manager deirdre.rhodes@myleverage.com

Innovation & Business Development Kevin Lytle, x1120 VP, Innovation & Business Development kevin.lytle@myleverage.com Mary Elicia Del Santo, x1144 Business Development Consultant me.delsanto@myleverage.com Steve Pullara, x1164 Business Development Consultant steve.pullara@myleverage.com Michael Baswell, x2151 Business Development Consultant michael.baswell@myleverage.com April Banta, x1162 Director, Marketing april.banta@myleverage.com Detra White, x1156 Production Artist detra.white@myleverage.com

LEVERAGE PARTNERS CO-OP Financial Services Enhance services to your members by expanding your ATM service delivery channels through more than 28,000 surcharge-free ATMs.

ComplyTrac Automated compliance solution that streamlines compliance procedures and reduces costs through procedural controls to meet compliance requirements on a single platform and helps effectively execute regulations through automated software.

Corporate Business Solutions 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)

CU Members Mortgage

OneMain Financial

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

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

CU Solutions Group CU Solutions Group provides credit unions with marketing, membership enhancements, technology, and performance management solutions.

O’Rourke & Associates

CUNA Mutual Group

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

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.

CUNA Strategic Services, Inc. Access for credit unions to products, services, and technologies.

CUVM Full-service solution working to reduce the burden associated with collecting vendor due diligence and managing vendor relationships that helps credit unions minimize vendor risk.

John M. Floyd & Associates Earn non-interest income and provide an overdraft protection program to members.

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

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

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

Office Depot Save money on office supplies, break room supplies, promotional products, furniture, and computers.

An exclusive credit union focus on executive and management recruiting.

Remarketing by GE

Telecom Recovery Quickly recover communications in the event of a disruption in telephone service.

Telecom Recovery offers 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.

That’s Life LEVERAGE’s merchant lending platform links credit unions with businesses in their communities to provide point-of-sale financing to consumers.

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

Vining Sparks Combining strategic support services with broad trading capabilities to execute fixed income securities transactions.

VINtek Complete collateral management solutions help increase operational efficiencies by streamlining processes, reducing user errors, and managing expenses every day.

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

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

Anita Fumaria, x1140 Director, HR Services anita.fumaria@myleverage.com

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

ACCELERATE YOUR

PERFORMANCE June 12 - 14 | Orlando, Florida

Keynote Speaker John Foley Former Lead Solo Pilot Blue Angels

Select Events: Annual Golf Tournament & Dinner, Entertainment, & Silent Auction Three Exhibit Networking Sessions in the Exhibit Hall Exchange Education Session Line Up Puts YOU in Position to Accelerate Early Bird Deadline April 30, 2013 www.lscuconvention.com