Q215 Signal Magazine

2015 | ISSUE 2

The Magazine of the League of Southeastern Credit Unions & Affiliates

IDENTIFY WHAT YOU DO WELL

TELL EVERYONE

Q. Is EMV the right move for my debit card portfolio?

A. Let’s talk about your options.

Southeast Directors & Supervisory Committee Conference Now including directors!

The decision to implement EMV chip cards is not an easy one. There are several questions to address before your team gets the green light before the liability shift deadline. What is our overall cost? What past fraud would have been prevented through EMV standards? Is a mass reissue or phased reissue strategy more effective? Will members naturally know to dip their cards? Do we even move forward with EMV at all?

LEVERAGE Card Services has remained up-to-date on current debit card information and trends related to EMV technology so we are well positioned to answer these critical questions.

We can also help evaluate how well interchange is contributing to your non-interest income and recommend tweaks in your debit program to maximize performance.

Your Ad vant a g e

www.myleverage.com

LSCU

Message from the President Since I joined the LSCU & Affiliates as its first president/CEO back in August 2009, one issue I have consistently stressed to the World Council of Credit Unions (WOCCU) is that, if and when restrictions with Cuba are eased, I would like the LSCU to have the opportunity to work with WOCCU to establish credit unions in Cuba. It is only natural given Cuba’s close proximity to Florida and the large Cuban-American population in South Florida. So in late December when President Obama unveiled his “Charting a New Course for Cuba” initiative, I began conversations with WOCCU, CUNA, and other external parties to explore what role credit unions could play in helping the people of Cuba and its emerging CO-OPs get access to financial services. Today one of the most successful types of businesses in Cuba is cooperatives with more than 5,200 agriculture coops operating with many other types of state-owned businesses expected to be handed over to its workers to own and operate independently.

I have had many conversations with WOCCU CEO Brian Branch, as well as Mike Beall, CEO of the National Cooperative Business Association (NCBA), who is also a former state league president, about how the LSCU and credit unions could step forward and see what we can do to advance financial cooperatives in the island nation. During the CUNA GAC back in March, I was asked by the NCBA to sit on a panel discussion about Cuba at the National Press Club. I talked from the financial services perspective and pointed out that credit unions have a history of working with former communist countries to improve their financial services. What WOCCU and the Georgia league did in Poland after the fall of the Soviet Union is a great example of what can be done in Cuba.

In May, the LSCU surveyed credit unions to find out how much of a Cuban-American population they are serving, how large of a staff do they have that is of Cuban descent, and would they be willing to work on a task force with the League and WOCCU on Cuba. The responses were positive with many providing names for the task force and many others wanting more information. This fall I hope to travel to Cuba with WOCCU and CUNA officials, as well as a small group of South Florida credit union representatives, to meet with the

The credit union movement is about “People Helping People.” Now that travel restrictions have been eased, there will be more travel between the U.S. and Cuba with people looking to have access to their financial accounts through ATMs and use their debit, and credit cards in Cuba.

Cuban government about the advantages financial cooperatives could bring the people of Cuba.

The challenges in helping Cuba modernize and transition to an open and free society are large and complex. I think most would agree the 54-year-old economic embargo has not worked, so it is time to try something different. The only financial services the average Cuban has known have been state-controlled. Even though Cuba has been promoting more cooperatives, there is still the fear that the government has a hand in those cooperatives. Overcoming generations of bitter feelings will be difficult. Many Cuban Americans, especially in South Florida, have very negative feelings about the current government that easing relations will not fix until there is a true change in leadership.

The credit union movement is about “People Helping People.”

Now that travel restrictions have been eased, there will be more travel between the U.S. and Cuba with people looking to have access to their financial accounts through ATMs and use their debit, and credit cards in Cuba. There is a great opportunity for credit unions to help the Cuban people. I hope you will help us lead the way.

Patrick La Pine, CCE, CUDE President & CEO League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

1

Table of Contents Editor Amy Jowers Contributors Mike Bridges Jordan Burroughs Jason Cochran Teresa Gray Keith Hopkins Wallace Jones Jennifer Martin Scott Morris Joel Pearson Jeff Rendel Laura Vann

IDENTIFY WHAT YOU DO WELL

TELL EVERYONE

Design & Production Perry Albrigo, Pomegranate Studio Letters to the editor may be submitted at submissions@lscu.coop.

Representative Ken Johnson

1

4

Connect with us!

President’s Message

Trends 4 Kick Start Your Focus Leads to Success Find out the meaning behind this year’s Southeast Credit Union Conference & Expo theme and how it applies to your credit union. Plus, learn how some credit unions are already kick starting their focus by examining their brand and capitalizing on what they do best.

LeagueofSoutheasternCreditUnions

6 @LeagueofSECUs

13

Search by pinners: LSCU

2

The Ownership Focused Entrepreneurial Credit Union

Has your credit union ever considered creating a new business within your existing business? Integrating an entrepreneurial mindset could help your credit union as it plans for the future. Jeff Rendel gives readers three principles to help guide them as entrepreneurs, their new ventures, and the value they seek to create for their owners.

LeagueofSECUs

WEBSITE www.lscu.coop

Congressman Gwen Graham

Advocacy 13 2015 Alabama Legislative Session Recap 15 2015 Florida Legislative Session Recap 17 Strengthening Bond with Members Through Advocacy 18 Compliance Culture

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

22

28

LSCU Legislator Profile 22 Congressman Gwen Graham 26 Representative Ken Johnson Cooperative Initiatives 28 Chapter Programs Encourage Professional Development and Exemplary Service

HIGHLIGHTS 4 | TRENDS As you discuss the drivers of your credit union’s top line - your members - why do your members choose you now and why should they choose you in the future?

13 | ADVOCACY 30

33

34

Education 30 They are CUDEs Now! 32 Upcoming Learning Opportunities Communications 33 How Can My Credit Union Use Google?

Industry 34 An Experiment in Cyber Security with Some Common Security Mistakes Made by Employees

36

League News 36 LSCU State GACs: A Review in Pictures

38

LEVERAGE 38 The TRID Train is Coming!

40 Collaboration Provides Solution for CU Repossession and Disposition Needs 42 A Wise Decision

44

LSCU Directory

Legislative sessions have ended. Read a recap for both Alabama and Florida sessions.

28 | COOPERATIVE INITIATIVES Through chapter programming and young professional group participation, credit union employees have more opportunities than ever before to build a strong foundation in the credit union movement and develop their career path.

33 | COMMUNICATIONS By making small changes and using free online resources, credit unions can take advantage of how consumers find their information.

38 | LEVERAGE Find out how collaboration provides a solution for credit union repossession and disposition needs.

2010, 2011, & 2012

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

3

TREND

When the League decides on a theme for the Southeast Credit Union Conference and Expo (SCUCE) a number of factors are considered before a final outcome is reached.

The League creates the theme to express the overall picture of the conference at hand, but also as a continuation of past conferences - the idea being to take an attendee on a specific journey furthering his or her education and the credit union movement as a whole. For example this year’s theme, “Kickstart Your Focus”, is a continuation of 2014’s theme, “Living the Seven Cooperative Principles, The Credit Union Way.” Last year the League choose the seven cooperative principals as the catalyst of the 2014 SCUCE to bring credit unions back to the basics and have them reexamine each of the seven principles up close. Through the event’s

sessions and speakers the conference was able to bring those cooperative principles to life through real world examples of how they are utilized by the credit union movement each and every day. Thus giving attendees a renewed sense of what it means to work for a credit union as well as the history behind the seven cooperative principles.

There is an old coaching adage that says if the team focuses on what it does well rather than focusing on the other team, it will be successful. The point: The team must have confidence in its plan and itself and believe it can be successful doing so. It must not let the other team veer it off course. This same example can be applied to credit unions and how they can operate in the marketplace.

Thinking about that same coaching analogy, for 2015, the League wanted to apply a theme that takes last year’s seven cooperative principles a step further – giving credit unions ideas and information they can use to apply

those principles right now at their credit unions.

The League connected with the word “focus.” If credit unions focus on what they do well and why members prefer them to big banks, they will be successful. “Kickstart Your Focus” is this year’s theme to show credit unions that looking at their strengths can be very effective.

“Our whole focus this year is about changing our culture, is how Naheola Credit Union CEO Mark Johnson and his board are looking at 2015. He says the $80 million Demopolis, ALbased credit union has a good value statement for members and potential members; it just takes some extra effort to get the information across to them.

“We feel like our products and services are as good as any other financial institution’s and not only are they more economical, but also simple. There are not many decisions to be made by a member or potential member when they come see us. However, instead of being focused on what we are good at, we are more

“Our whole focus this year is about changing our culture,” is how Naheola Credit Union CEO Mark Johnson and his board are looking at 2015.

“We feel like our products and services are as good as any other financial institutions and not only are they more economical, but also simple.

4

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

Mike Bridges, vice president, communications, LSCU

focused on what we are not good at doing,” said Johnson.

This is a situation many credit unions can find themselves facing. It can be tough to bear down and look at all of the operations, marketing, and products to ensure they are still relevant and still what the members expect from their credit union. Former Harley Davidson executive

putting them into action. Innovations CEO David Southall says it starts with focusing on the credit union’s strengths.

“We talk so much about what we have done and what we are going to do that the conversations begin to blend together. It’s critical to have conversations about what you’re good at and use that as your ‘kickstart’ to decide what

also recognizing what makes each credit union unique.

“We are having another meeting in May to go over some more of this with our management team to discuss our brand. What is it? What is our niche? This will also identify what we are good at and how to relay this message to other members that may not understand our brand,”

Now when you see the “Kickstart Your Focus” theme at this year’s Southeast Credit Union Conference & Expo or on the League’s marketing materials, you know the meaning behind the words. It is the next step from the seven cooperative principles.

Ken Schmidt was chosen to speak at this year’s SCUCE because Harley Davidson found itself in that same predicament in the early 1980s. The motorcycle manufacturer was struggling and on the brink of bankruptcy. By refocusing on its strengths, Harley Davidson pulled itself out of its tailspin and emerged as one of the most iconic brands in America.

What Ken Schmidt will discuss in Orlando will resonate with every credit union in attendance. Harley turned its business around by getting back to basics and turning out a great American motorcycle. The biggest part of Harley’s marketing is word of mouth sales.

Harley is the culture for so many motorcycle enthusiasts. People love their Harleys and would not drive any other motorcycle brand. Sound familiar? This is just how your credit union members feel.

Innovations Federal Credit Union with $159 million assets and based in Panama City, FL, is developing an atmosphere where they are moving from just talking about ideas to now

you need to be doing,” said Southall.

Coming out of this year’s SCUCE, credit unions should consider doing a major strength and weakness assessment. The League has been doing a similar assessment as part of its strategic plan for 2015. Each department is looking closely at everything they do. They are also looking at what they could be doing better and the reasons that are hindering them. This might entail purposefully abandoning some things. But, it is necessary to stay relevant, while

says Johnson.

Now when you see the “Kickstart Your Focus” theme at this year’s Southeast Credit Union Conference & Expo or on the League’s marketing materials, you know the meaning behind the words. It is the next step from the seven cooperative principles. Look for the 2016 theme soon taking the seven cooperative principles and kickstart your focus theme concepts even further.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

5

TREND

The Ownership-Focused, Entrepreneurial Credit Union Jeff Rendel, Certified Speaking Professional

As you discuss the drivers of your credit union’s top line – your members – why do your members choose you now and why should they choose you in the future?

It’s strategic planning season which means it’s time to discuss growth, new opportunities, and the future of your members’ credit union. As your governance and executive team talks over plans for your future, integrating an entrepreneurial mindset may help as you look to create the enthusiasm of building a new business within your existing business. Regardless of the structure of this year’s planning session, three principles help guide entrepreneurs, their new ventures, and the value they seek to create for their owners.

From Your Purpose, Build a Big Idea.

A friend and credit union CEO considers his credit union’s purpose before its mission and vision. His credit union’s purpose: “To help our owners lead better lives.” Of interest is the reference to members as owners (a nod to the entrepreneurial spirit of serving the members-owners-investors) and the expansive language of the purpose.

In his words, “Our purpose does not limit us to only the business of checking, savings, and loans. It allows us to serve our owners beyond their financial lives.”

The credit union’s mission describes what the credit union is doing for its owners – in the present as a credit union. The vision – the big idea – describes what the credit union will be as “a service leader” for its owners in the future. With a keen eye toward its purpose, the board has tasked this CEO with adding additional value for the owners beyond financial products and services. In short, the credit union is interested in being a partner in each owner’s life.

As you discuss the drivers of your credit union’s top line – your members – why do your members choose you now and why should they choose you in the future?

What additions to your geographic reach,

products and services, and ability to deliver are necessary for your members to choose you tomorrow rather than just today? What could your credit union be for your members in five to ten years? Answer these questions and you’re on your way to building a fresh business that benefits your current and future members. Better said – your owners.

Fill a Niche That’s Ripe with Opportunity.

At a recent gathering of community bankers, a discussion focused on the value that bank customers receive from cooperative businesses (agriculture, power, and water). The bankers gave high regards for the cooperative structure that allowed their customers to receive tangible benefits from ownership. It seemed obvious to all that owning a business was preferable to being just a customer. On that line of thought, wouldn’t that same philosophy extend to a financial cooperative? Wouldn’t retail and business customers be better served – and potentially wealthier – by doing business with a financial cooperative they own?

A major opportunity exists for credit unions to champion the niche they own by leading an exodus of bank customers to becoming credit union owners; there’s a lot of business to gain. For decades, credit unions’ market share has remained just below ten percent. Over the same course of time, the nation’s largest 100 banks increased their market share to, roughly, two-thirds. Rather than agonize over chasing the same small market share among fellow credit unions, why not purposefully go after the larger share of opportunity that exists among non-owners (customers) of banks?

There’s great value in ownership.

Increase the Financial Value for Your Owners.

a paycheck to multi-millionaires overnight.

In the financial sense, we want growth at our credit unions – members, loans, assets, profits, and more. If the stimulus of your credit union’s revenue stream originates directly from your members, growing the value that your members receive leads to an end result of increased financial value of your credit union.

Increasing the value your owners receive from their investment in their credit union may come in the form of lower loan rates, higher deposit rates, patronage dividends, or the most relevant delivery methods via technology. More important, your credit union is able to present the value of membership – a direct or indirect share of the profits from the very company your members own.

There’s a tremendous amount of pride that comes with ownership – your first car, your family home, and your season tickets for your local sports team. Ownership is powerful. Ownership is valuable. Ownership is significant. This matchless aspect is also the definitive and most meaningful point of differentiation for your credit union. Create your next set of strategies around this powerful model and source of loyalty as you build your business for your existing owners and those soon-to-be. © 2015 by Jeff Rendel. All rights reserved.

Jeff Rendel, Certified Speaking Professional, and President of Rising Above Enterprises works with credit unions that want entrepreneurial results in leadership, sales, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www. jeffrendel.com; 951.340.3770.

That’s the entrepreneurial dream, right?

Build a business that lands on the “Inc. 500” list or beckons a purchase from Berkshire Hathaway, taking owners from not drawing

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

7

Executive Retirement Benefits

Searching for a SERP?

Take the Proven Approach Contact O.M. Financial, LLC for a comparison of our executive retirement plan to any you’re considering.

To recruit and retain the best executives for your credit union, you need to offer the most attractive retirement plan you can. The solution: the supplemental executive retirement program (SERP) created exclusively for credit unions by O.M. Financial and MassMutual.

Tried and True Learn what many credit unions across the country have already found out.

Our program’s innovative collateral assignment split dollar technique can help your credit union: • Generate substantial retirement income for your executives.

Our program’s guarantees take much of the risk out of SERP planning.

• Take advantage of an outstanding, permissible investment opportunity funded by MassMutual. MassMutual is one of America’s most highly rated companies and has consistently paid dividends since the 1860s.

• Cost-effectively enhance your benefit package.

Decide with Confidence Before you complete your search, contact us for a no obligation consultation.

We’ll compare the net cost of our plan to any others you’re considering so you can be sure you make the right decision.

We knew we made an excellent decision when we chose O.M. Financial for our executive retirement plan. That decision looks even better now after seeing how the program has performed, especially in some difficult economic times. We’re extremely satisfied.

Ellen Ford President and CEO People’s Credit Union

stdolinak@omfingroup.com l 865-246-1741 l www.omfingroup.com

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.

Have you seen the new LSCU website?

It’s Optimized for Mobile Devices, has Improved Navigation and Makes it Easy to Follow Trending Information!

Take the League with YOU!

www.LSCU.coop 8

League of Southeastern Credit Unions & Affiliates SIGNAL: Vol. 6, Issue 2

www.lscu.coop

9

LSCU & Affiliates Cooperative Image Campaign DID YOU KNOW...

>> The amount raised for the total media buy has been more than $1 million dollars each year. >> The League pays all creative costs on the campaign.

This ensures that all monies contributed by credit unions go toward media buys in their media market. >> A total of three “shareable content ads” are being produced for online buys and for contributing credit unions to use in their communications channels.

Watch the full “Wedding Photographer Mom” shareable content ad on youtube.com/LeagueofSECUs.

Is it Working?

1 Alabama and Florida credit unions have added 442,000 new members since the campaign first ran in 2011. A total of 29 states have reported negative growth in membership.

2 More than $11 billion in new assets have been added to Alabama and Florida credit unions since 2011.

3 Fifty-four percent of respondents from the post campaign research were familiar with a credit union and 51 percent of those familiar indicated they are interested in joining a credit union.

Next Steps for 2015...

How Can My Credit Union Participate?

• Shareable content ads are being produced using humor. The first ad “Wedding Photographer Mom” has been completed. These can be shared by participating credit unions.

• Make a monetary contribution. Contribute your “fair share” amount to the League right up until the campaign begins! Simply email mike.bridges@lscu.coop or amy.jowers@lscu.coop for an invoice.

• A social media plan will be provided to help “share” these ads.

• Next wave of campaign will begin Sept. 8, 2015.

10

A Magazine of the League of Southeastern Credit Unions & Affiliates

• Make an in-kind contribution. Does your credit union have outdoor, TV/radio, or other media to contribute? In the past, some have contributed time on TV, radio, outdoor, and Pandora.

• Contact us. Call LSCU VP, Communications Mike Bridges or LSCU Director, Communications Amy Jowers, 866.231.0545, ext. 1022 or 1020, respectively.

SIGNAL: Vol. 6, Issue 2

We will be at the Southeast Credit Union Conference & Expo

Stop by and see what we have to offer at Booth 200

PH: 954-714-8833 www.CSServicefl.com

Email: Service@CSServicefl.com

SALES, INSTALLATION AND SERVICE

Quality, Reliability and Technology

Drive Thru

High Security Safes Locksmithing Pneumatic Point-to-Point Systems Safe Deposit Boxes Security Locks Undercounter Steel Vaults Vault Doors

Alarm Control Systems Access Control Systems ATM’s After Hour Depositories Bulletproof Glass Barriers Closed Circuit Television Drive-Thru Systems Digital Video Surveillance Systems

High Security Safes

Teller Line Sign or Tower Camera

CCTV Solutions

A FULL SERVICE SECURITY PRODUCTS COMPANY 67262 CSS Ad.indd 1

4/28/15 12:06 PM

for every member complaint, another 26 members have remained silent about their experiences with your CPI provider...they just quietly go away.

Yes, there’s a difference

Preserving your member relationships and improving member retention.

A strategic partnership with Support will:

•

ENHANCE MEMBER RETENTION

•

IMPROVE BRAND REPUTATION

•

GROW YOUR BOTTOM LINE

For a Member Experience Risk Analysis: Matthew Cox | Account Executive 800.444.5465 ext. 180 | mcox@qualitycpi.com www.qualitycpi.com

Ad-Signal-v2.indd 1

by precisely pinpointing actual risk

by cultivating an exclusive member experience by safeguarding retained, repeated, and referred business

Winning members at every touch point.

5/1/15 4:35 PM

“Coast-to-coast capabilities make us your PREMIER MORTGAGE PARTNER.” CU Members Mortgage knows every community, every credit union and every homebuyer is different.

That’s why we customize our partnerships to meet your unique needs; there are no cookie cutters here. With a network of regional offices across the nation, we’re positioned to respond to credit unions – large or small – in all 50 states with market-sensitive mortgage programs custom tailored to your resources and objectives. In fact, over the past 30 years, we’ve partnered with thousands of credit unions nationwide and today proudly make home loans available to more than 19 million members each year.

Deep experience and national reach make us your single resource for mortgage services.

Linda Clampitt, Senior Vice President 30 Years in Credit Union Mortgage Lending

www.cumembers.com

800-607-3474 Extension 3225

NMLS #401285

ADVOCACY

2015 Alabama Legislative Session Recap

By Jason Cochran, senior director, governmental affairs (Alabama), LSCU

General Fund Budget Dominates Session and Creates Difficulties With the Alabama Legislative Session set to conclude in June, most legislators in Montgomery will tell you this has been one of the most difficult in their memory due to one single issue that dominated all focus, the General Fund Budget. Over the years Alabamians have heard the sad stories about the state of the budgets yet somehow elected officials in Montgomery always found a way out. They would use new federal dollars to fund Medicaid, borrow money from a rainy day account for prisons, or use other one time monies to prop up the ailing health department. However, 2015 marked the year where there were no more options and Gov. Robert Bentley and the Alabama Legislature were forced to act.

Gov. Bentley was the first to step out and offer a solution to the growing shortfall in the General Fund Budget by proposing more than $500 million in additional revenue through new taxes and the closing of certain tax loopholes. He additionally recommended permanently transferring more than $200 million from the Education Trust Fund.

To date, none of those proposals have gained any traction in a legislature that is seen as one of the most conservative in the nation.

In reality, only around $250 million is needed for the 2016 fiscal year, but the governor wants to fix the reoccurring funding issues in the General Fund once and for all and that is why he is going after so much new money. Gov. Bentley has sworn that he will call the legislature into as many special sessions as it takes to get his tax proposals passed - only time will tell if that is true.

On the other side is the legislature and their reluctance to pass any legislation that could remotely be seen as a new tax on the citizens or corporations of Alabama. Initially, the Senate released a budget that cut all state agencies anywhere from 11-30 percent, basically ending state services as we know them today. While it is not expected for the legislature to pass a budget like the one presented at the beginning of the session, cuts will happen. Another solution was introduced at the midway point of the session by Senate President Pro Tem Del Marsh (R-Anniston). His idea was to pass a lottery and casino gaming in the state. Now while this proposal will raise $500 million a year, both of these will take a vote of the

people and the lottery has already failed once despite a majority of Alabamians saying they are in favor of one.

Credit Union Successes Despite the primary focus of the legislature being on taxes, revenue, and the General Fund, credit unions were able to see one piece of legislation passed, several introduced, and others defeated or amended due to the lobbying efforts of the League and the grassroots support from credit unions in all areas of the state.

After many years, the right of redemption period on foreclosed property in Alabama has been reduced. SB 124 by Sen. Greg Reed (R-Jasper) passed the Alabama Legislature and has been signed into law by Gov. Bentley. The bill and its companion, HB 256 by Rep. Ken Johnson (R-Moulton), reduce the current redemption period on residences that claim a homestead exemption from one year to 180 days. Originally the proposal was to reduce the period to 90 days, but this was changed after negotiations with opponents of the legislation. The reduction in time still sees the period reduced by half and is far better than what was previously law in Alabama. This is a huge victory for credit unions as this has been an issue for several years.

Two other pro-credit union pieces of legislation were introduced this session, but all signs are pointing that neither will receive final passage in 2015. The first was SB 106 by Sen. Arthur Orr (R-Decatur) and it sought to establish data security laws for the first time in the state. Currently Alabama is one of only a handful of states that do not have any laws on the books regarding the protection of one’s personal or financial information in the event it is stolen.

Sen. Orr’s bill would set a series of standards for merchants or any other entity which has access to this type of information to follow if personal data is breached by an outside source. Of course there was obvious pushback from merchants and others on this bill and it has yet to make it out of the Senate.

The second piece of legislation was HB 454 by Rep. Randy Davis (R-Daphne). It would have given credit unions the ability to accept public deposits. This has long been a priority and the League was very pleased to see Rep. Davis introduce this bill. Like the data security legislation, HB 454 met with vigorous opposition. The Continued on page 14 SIGNAL: Vol. 6, Issue 2

www.lscu.coop

13

“Alive

Continued from page 13

Credit Union

...is pleased to provide its members with the convenience of access to more than 5,400 shared credit union branches. We are also proud to give back to the credit union community by serving other credit union members in our branches. This program exemplifies the cooperative spirit of credit unions.”

Rose Gunter President and CEO

bankers in the state have been determined to kill this legislation ever since it was first introduced several years ago. HB 454 was assigned to the House Financial Services Committee and unfortunately did not receive a vote during the 2015 session.

However, the League’s governmental affairs team feels progress has been made on this issue and they will continue to fight for its passage during future sessions.

Looking Forward Looking forward, Alabama could see several special sessions between the end of the 2015 Legislative Session and Oct. 1 to address the budget issues of the state because Gov. Bentley and the legislature do not see eye to eye on the solution. For 2016, the League fully expects to see public deposits legislation introduced again and it will continue to be a top priority for credit unions in the state.

If you have any questions, contact Jason Cochran, senior director of governmental affairs, Alabama, at 866.231.0545, ext.

2159 or by email at jason.cochran@lscu.coop.

www.ss4cu.com • (561) 869-8610 The Member-Friendly Financial Network

14

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

ADVOCACY

2015 Florida Legislative Session Recap

By Jennifer Martin, director, governmental affairs (Florida), LSCU

Abrupt End to Florida’s 2015 Legislative Session The annual session of the Florida Legislature certainly ventured into uncharted territory this year when for the first time since the legislature started keeping records, the House and Senate chambers ended regular session on different days. The House abruptly adjourned three days short of the typical 60-day session as leaders contended there was no reason to remain at the Capitol as long as they continued to have a stalemate with Senate leaders over a new state budget and health care. The two main reasons for the vastly different House and Senate budget proposals were the federal-state hospital funding program known as the Low Income Pool and Medicaid expansion.

After the House hastily adjourned, Senate President Andy Gardiner sent a letter to House Speaker Steve Crisafulli asking legislators to come back to the Capitol by asserting that they were in violation of the state constitution. Sen. Gardiner’s letter called the decision by the House to unilaterally adjourn three and a-half days early an “unprecedented” act that is possibly illegal because of a clause that says neither chamber can adjourn for more than 72 hours without a resolution approved by both the House and Senate. Less than a half-hour after President Gardiner sent this letter, Speaker Crisafulli responded back forcefully explaining that he was not bringing the House back. The legislature will meet again soon enough for a special session, however, as they are constitutionally required to pass a state budget by June 30.

Credit Union Successes While lawmakers struggled to overcome challenges with the budget, Florida’s credit unions saw legislative successes. The bill that would allow credit unions to apply to be a qualified public depository was unable to see any movement this year, but legislation that addresses bad actors known as patent trolls successfully passed both chambers and was sent to the governor. At issue are patent claims made by companies that do not produce any goods or services, but instead purchase patents and then seek profit from them. These firms typically send so-called demand letters to companies seeking royalties and threatening legal action for patent infringement. Many small businesses have been targeted and in the cases of credit unions, ATM software, mobile banking, and mobile deposit technologies are often the subject of these letters. Among

other provisions this bill will allow companies to sue patent trolls in state courts, while setting tougher rules around demand letters such as a requirement for clear evidence that a company has infringed on a patent rather than vague accusations.

While it seemed as though the bill had stalled with only a couple of weeks left in the legislative session – stuck in a Senate committee that would not be meeting again – the League’s governmental affairs staff worked quickly and diligently to keep the issue alive and on the path to victory. After meeting with President Gardiner and other key members of both Senate and House leadership, as well as other advocacy partners, the language was amended on to another bill and sailed through the House and Senate chambers unanimously just two days before the House adjourned sine die.

The financial literacy bill saw challenges in the House and was unable to gain much traction this year largely due to the Department of Education and their opposition to a mandate. This bill would have required high school students to take a half credit in personal finance in order to graduate. As a compromise, language creating a pilot program in Broward County was drafted into the budget during the initial appropriations discussions. Until the governor signs a final budget, it is uncertain whether the pilot program will be implemented. If, however, the program is included in the budget and proves to be successful, it is likely that the bill sponsors will take another go at requiring the course statewide.

Fewest Bills Filed and Passed Since the Beginning of the 21 Century If it seems as though the legislature was unable to accomplish much this session compared to past years, it is because the 2015 legislative session saw the fewest bills filed and passed by both chambers since the beginning of the 21st Century. The acrimony and budget standoff that brought the session to an early close saw significant legislation die including bills relating to ride-sharing, gambling, medical marijuana, texting while driving, overhauling the state’s water policy – a priority of Speaker Crisafulli – and a series of bills that would create a pathway to independence for disabled children – another priority of President Gardiner. Still in limbo are the budget, Medicaid, the Low Income Pool program, and Gov. Scott’s top priority of $673 million in tax cuts.

If you have any questions, contact Jennifer Martin, director of governmental affairs, Florida, at 866.231.0545, ext. 1150 or by email at jennifer.martin@lscu.coop.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

15

ADVOCACY

Strengthening Bond with Members Through Advocacy Jordan Burroughs, grassroots coordinator, LSCU The Member Activation Program (MAP), the Credit Union National Association’s (CUNA) newest grassroots program, rolled out at the 2015 CUNA Governmental Affairs Conference (GAC) in March. Before the program’s development, CUNA surveyed more than 70,000 credit union members in 2014, finding that advocacy communications not only succeed in activating credit union members but also increase members’ loyalty bond with their credit union.

The study showed that members give credit unions their power.

People who considered themselves “members” were 89 percent more favorable toward credit unions over banks. People who viewed themselves as “customers” were only 67 percent more favorable.

Furthermore, CUNA found that members who received advocacy outreach have a stronger bond to their credit union.

The Don’t Tax My Credit Union campaign in 2013 was proof that credit union members want their credit union to succeed and are willing to help. Alabama and Florida recorded more than 100,000 contacts to Congress from credit union employees and their members during the campaign. An educated member is an active member, and MAP is a simple way to present members with advocacy messages on the not-for-profit credit union model and on critical state and federal issues to keep members engaged and aware.

MAP provides an easy to use program for cultivating a strong relationship with members through advocacy:

Convenient Toolkit CUNA provides plug-and-play content and tools to deliver advocacy messages to your members on key issues. CUNA’s research has helped them to develop the most effective messaging for your members, finding that members respond better to messages that contrast the major differences between profit-driven Wall Street banks and their not-for-profit credit union.

Recognizable Brand All MAP messaging is customizable. Advocacy messages can be tailored to each specific credit union and credit unions can use their own branding and logos. CUNA found that nothing is more powerful than the credit union’s brand to deliver advocacy and political messages to members.

Strengthen Connection As credit union members learn about the issues and take action, their connection to your credit union grows stronger. The study shows that members who participate in advocacy want to do more business with their credit union.

GET INVOLVED By the end of April 2015, MAP has registered more than 125 credit unions with more than seven million members. To register your credit union for the Member Activation Program, go to cuna.org/map.

LSCU’s Jordan Burroughs is surrounded! Alabama and Florida recorded more than 100,000 contacts to Congress from credit union employees and their members during the DTMCU campaign.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

17

ADVOCACY

Compliance Culture Scott Morris, director, regulatory affairs, LSCU

com·pli·ance cul·ture \ kəmˈplīəns ˈkəl-chər\ Compliance - the act of being in alignment with guidelines, regulations and/or legislation Culture - a way of thinking, behaving, or working that exists in a place or organization (such as a credit union or other financial institution)

In recent years, BSA/AML (Bank Security Act/AntiMoney Laundering) enforcement actions by government agencies have confirmed that the internal culture of a credit union remains essential to its overall legal compliance health. While government enforcement actions reflect the operation of specific credit unions, credit unions can learn certain lessons about complying with the Bank Secrecy Act (BSA) and other regulations. With that in mind, the Financial Crimes Enforcement Network (FinCEN) in 2014 issued a CU Advisory aimed at emphasizing management principles that, if adopted, can improve and strengthen internal BSA compliance.

The National Credit Union Share Insurance Fund (NCUSIF) continues to review compliance with the BSA during examinations and to maintain federal deposit insurance. During the BSA examination process, examiners evaluate the reasons for decisions to accept avoidable risk, the frequency and quality of independent testing, and the process used to monitor accounts and transactions for signs of suspicious activity. While these steps may be modified to improve efficiency, they are here to stay.

Regardless of its size, a credit union with a weak or nonexistent culture of compliance will probably have problems in its BSA/

18

AML program. However, a credit union can strengthen its BSA/AML compliance culture and avoid problems with government agencies by taking the following steps: (1) make sure that its leadership, both board and executive management, actively support and understand compliance efforts to successfully address the obligations presented by the BSA; (2) work to eliminate any conflicting department priorities or revenue efforts that derail or create risks for BSA/AML compliance; (3) share information about BSA/AML compliance both with employees that specialize in compliance and are involved in other areas of the credit; (4) appropriately fund BSA/ AML management and compliance; (5) obtain regular independent, objective and competent review of the credit union compliance program by a third party; and (6) make staff and management fully aware of and committed the credit union’s BSA/ AML compliance and reporting procedures.

By committing to each of these six steps, commensurate with its size, risk profile, and current business model, a credit union can improve its BSA/AML program and avoid regulatory issues before they happen. .

Engaged Credit Union Leadership Credit union leadership, including the CU board, supervisory committee, and executive management, are ultimately responsible for BSA/AML performance.

These leaders set the tone for the credit

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

union and their commitment serves to influence the attitudes of others within the organization. Attending periodic BSA/AML training, understanding BSA/AML obligations, and demonstrably supporting a BSA/AML program communicates a commitment to the BSA/AML compliance.

Compliance Uncompromised by Conflicting Interests BSA Officers and staff must be able to fully implement and manage a credit union’s BSA/AML program. So a credit union should eliminate any threats to officers and staff effectively managing and mitigating BSA/ AML deficiencies and risks, so they may properly submit appropriate and accurate reports to FinCEN. For example, irrespective of whether a credit union is having problems with revenue, the credit union should always have an effective BSA governing structure and BSA/AML compliance should continue to operate independently, which would be permit the credit union to address any risks that might arise from the credit union’s various lines of business.

Shared Information Throughout the Credit Union Strother Martin in Cool Hand Luke once said, “What we’ve got here is a failure to communicate!” How true that can be.

Recent BSA/AML enforcement actions have shown that institutions with BSA/ AML problems have critical information,

but failed to communicate that information to compliance staff. This could have been due to a lack of BSA/AML knowledge or experience in effectively communicating information. It also could have been due to a failure to appreciate for the significance of the information. Even words, it could have been an intentional decision to prevent compliance staff from having access to the data. Whatever the reason, the institution suffered as a result and the information, which could have mitigated or even prevented the problem, was never shared with BSA/AML staff.

Information sharing can be applied to any department that receives transaction or account data about their members through frequent interaction, an account review/ monitoring program, or other similar efforts.

And information that could help compliance should be shared with BSA/AML compliance staff.

Appropriate Staff and Technology Any BSA/AML compliance program should have a designated Bank Secrecy Act Officer to coordinate and monitor the dayto-day activities of the BSA program. The BSA Officer should both be knowledgeable and have sufficient authority to administer the BSA compliance program. Depending on size, the credit union should allocate appropriate support staff to its BSA/AML program, based on the level of identified risk.

Whenever possible, adequate technology should always be allocated to BSA/AML compliance. Credit unions with high risk profiles and levels of susceptible activity should consider automated systems for identifying and monitoring suspicious activity.

Inadequate staffing or out-of-date systems can harm a credit union’s ability effectively monitor transactions and other internal systems, increasing risks to credit unions.

And technology, along with compliance staff that know how to use it, ensure that warnings are not missed or improperly dismissed.

Regular BSA/AML Program Testing FinCEN has consistently stressed using independent testing for BSA/AML programs to help ensure each level of the compliance program is performing properly and protecting the credit union from both internal and external threats. Management must ensure testing is performed by proven independent, qualified, unbiased, and conflict-free parties. A BSA/AML program’s integrity and independence permits credit union management to make informed decisions about appropriate corrective action when it identifies BSA/AML deficiencies.

Understanding of BSA Report Use Finally, credit union employees should understand that BSA/AML reports are not just generated solely for compliance. Proper reporting, developed over decades by FinCEN, provides some of the most effective data available to law enforcement to protect credit unions.

Credit unions regularly engage in reporting activities that help fight against drug trafficking, fraud schemes targeting seniors, crimes against our local businesses,

and even credit union members. That data also helps credit unions protect themselves from internal fraud, cyber-related account takeovers, and identity theft. So proper reporting is not just good for the credit union, it is good for everyone.

While criminals are always looking for a way to get around the system, compliance with BSA regulations deters criminal abuse of credit unions and the nation’s financial system. The guarantee of a Currency Transaction Report (CTR) filing or the possibility of a Suspicious Activity Report (SAR) filing increases the ability of law enforcement to identify and arrest offenders or even stops prospective criminals before they commit the offense.

Understanding the requirements of BSA/ AML and being committed to a sound and effective compliance program are critically important to a credit union’s compliance culture. Information about FinCEN and the requirements of the Bank Secrecy Act / Anti Money Laundering rules and regulations can be found at www.fincen.gov and at the League of Southeastern Credit Unions & Affiliates website, www.lscu.coop.

Regulatory Relief Bills Passed by House Recently the U.S. House of Representatives passed eight relief bills in an effort to provide some measure of regulatory relief to credit unions and other financial institutions. The eight bills are: H.R. 299, the Capital Access for Small Community Financial Institutions Act H.R. 601, the Eliminate Privacy Notice Confusion Act H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act H.R. 1265, the Bureau Advisory Commission Transparency Act H.R. 1367, to amend the Expedited Funds Availability Act to clarify the application of that Act to American Samoa and the Northern Mariana Islands.

H.R. 1480, the SAFE Act Confidentiality and Privilege Enhancement Act H.R. 685, the Mortgage Choice Act H.R. 650, the Preserving Access to Manufactured Housing Act These bills are in addition to nine league-supported regulatory relief bills passed earlier in the session.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

19

You have a choice in Alabama

Business... Not Bureaucracy Deposit Insurance for Credit Unions

American Share Insurance Rick Choffel | 800.521.6342 ext. 400 | rchoffel@AmericanShare.com | www.AmericanShare.com

“IWS increased our auto lending non-interest income 377% in the first two months! Phenomenal growth – I highly recommend it to any CEO.”

ASI - Alabama ad for Signal.indd 1

5/1/15 11:57 AM

CEO Jeremy Garza, a self-described converted skeptic, readily admits that the IWS Product Information Center’s business results for Gulf Coast far exceeded his expectations. “I wish we would have adopted the model a lot earlier.”

Non-interest income programs for auto lending – it’s all we do at IWS. For over 24 years IWS has been credit unioncentric, offering a core set of vehicle protection products and the most customized service platform in the industry.

Jeremy Garza CEO, Gulf Coast FCU Corpus Christi, TX 2014 CU Times Trailblazer Under 40

To set yourself apart with your members give us a call to hear about IWS’ guaranteed* non-interest income program for auto lending - customized for your credit union and your members. * No fine print catch here - we guarantee results 855.880.9892 | iwsgroup.com

®

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

21

LSCU Legislator Profile

Representative Ken Johnson Rep. Ken Johnson is a Republican member of the Alabama House of Representatives. He was elected to represent Alabama’s 7th District on Nov. 2, 2010. He presently sits on the Financial Services Committee, the Insurance Committee, and the Ways and Means General Fund Committee. He served 25 years as a minister, retiring in 2008. He is the owner of an industrial sales company.

How and why did you become interested in public service and politics in particular; and what led you to run for the Alabama House of Representatives in 2010?

With all of the people and potential, I felt that we could do much better leading than we have in the past. I wanted to see us utilize our resources efficiently and responsibly. I believe our best days as a state are ahead.

What are the most important issues you see facing Alabama today?

Fiscally responsible government, providing jobs, and giving Alabamian’s the opportunity for adequate educational choices, and jobs. Another issue I see is the increasing amount of federal overreach into the daily lives of our citizens and businesses.

22

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

With the 2015 Legislative Session almost finished, what pieces of legislation does the Alabama House of Representatives still need to address in order to have a successful session?

Most importantly is the General Fund Budget. We are constitutionally mandated to only pass two pieces of legislation, the Education Trust Fund and the General Fund.

To date, the House of Representatives has passed a fiscally sound General Fund Budget, but the Senate has not, and as vice-chairman of the Way and Means General Fund Committee, we must pass a responsible budget and fund state government the best we can.

Credit unions are seeing an alarming increase in regulatory burden throughout Alabama. In your opinion, what can the Alabama Legislature do to help decrease over-regulation seen in the financial services industry?

The Alabama Legislature needs to do what ever is necessary to decrease regulatory burden on credit unions and all other financial institutions. As vice-chairman of the House Financial Services Committee I have seen the

numerous directives coming from Washington, D.C. and the harm they are having on all aspects of the financial services industry. What we can do in Alabama is ensure that we do not follow that lead and increase the burden on credit unions. The more the government is involved, the more difficult it is for you to do your job, and that is a bad thing.

This year you sponsored and passed legislation reducing the redemption period for foreclosed property, why was this legislation important to you?

I am so happy that we were able to pass this legislation this year. The redemption period is something that is simply not being used or at least not being used by the vast majority of people who have the opportunity to redeem property. When less than one percent of property is being redeemed, having a redemption period of a year is excessive. The original bill reduced the period to 90 days and we compromised at 180, but that is still a significant reduction and is much needed for all parties involved in the mortgage process. Perhaps one day we will be able to get the period down to 90 days, but this legislation was a wonderful start.

How important is grassroots advocacy in the legislative process? If you could give one piece of advice to credit union advocates, what would it be?

Besides voting, I am not sure what is more important for trade associations than grassroots advocacy. We can see close to 1,000 pieces of legislation during a session, and your input on how certain pieces affect you is critical to the process. Legislators need to hear from their districts, that is who we are sent to Montgomery to represent, and grassroots advocacy helps us represent the people who voted us into office in the first place. As far as advice, do not stop what you are doing. In fact, increase what you are doing. As long as best practices are followed, any trade association or group cannot have too much grassroots support. n

Rep. Ken Johnson (Left) with Alabama House Speaker Mike Hubbard Photo by Yellowhammer News

The Alabama Legislature needs to do what ever is necessary to decrease regulatory burden on credit unions and all other financial institutions.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

23

2015 Southeast Credit Union Be sure to visit the exhibit hall if you are attending the 2015 Southeast Credit Union Conference & Expo. This year the exhibit hall is sold out with a total of 136 exhibitors with 49 of them NEW to the conference. This is the perfect opportunity to have a one-on-one conversation with companies that specialize in serving credit unions. If you would like to find out more details on the companies listed here, visit the SCUCE Virtual Exhibit Hall located on the SCUCE website at www. southeastCUconference.com.

COMPANY

BOOTH

Absolute Financial

711

Accolade Asset/Liability Advisory Services

600

Advanced Fraud Solutions

907

Alkami Technology

901

Allcovered

1206

Allied Solutions

1129

American Financial Resources

314

American Life Insurance Company

710

American Share Insurance/Excess Share Insurance

602

AmeriCU Mortgage Company

1127

COMPANY

BOOTH

Complete Signs

1012

Consultants & Builders, Inc.

1105

CO-OP Financial Services

507

Corelation, Inc.

312

Corporate America Credit Union

612

Corporate One FCU

601

Credit Union Executives Society

111

Crescent Mortgage

910

CRIF Lending Solutions

804

CU Direct

415

CU Engage

207

CU Members Mortgage

512

Amherst Pierpont Securities LLC

213

CU Solutions Group

510

ARS - American Recovery Service

705

CU24

107

ATM World Wide

214

CUNA Mutual Group

605

Automotive Credit Union Services

302

CUNA Strategic Services

113

CUtopia

811

DATAMATX

713

Axis Data Solutions, Inc. BAE Systems

1002 215

COMPANY

DEI Incorporated

313

FedCorp

Del Mar Recovery Solutions

203

FiduciaryFirst

Digital Benefit Advisors

815

FinanceGenius/Rate Genius

BOOTH 305

Howard & Howard Attorneys, PLLC

505

Hutto & Carver, P.A.

404

Info-Pro Mortgage Services

914

Integrated Lending Technologies, LLC

707

IWS

915

John M. Floyd & Associates

504

204

BBVA Compass - Correspondent Banking

613

Bradford-Scott Data Corporation

712

Dimension Data

1201

Financial Facilities, Inc.

905

BreakAway Incentives LLC

810

DingGuard

1135

First Data

805

1109

Burns-Fazzi, Brock

715

DiRecManagement Inc.

706

First Empire Securities

1203

Card Services for Credit Unions

105

Doeren Mayhew

502

Fiserv

1007

Eclipse Brand Builders

701

Florida Concepts, Inc.

Econ-O-Check

801

Freedom Mortgage

eDOC Innovations

412

GE Capital Remarketing

503

1011

CashTrans

211

CastleGarde, Inc.

1125

202 1119

CFS, Inc.

704

EFT Source

401

Global DMS

806

CheckAlt

807

Enterprise Car Sales

304

Glory Global Solutions

201

CliftonLarsonAllen, LLP

403

EPL

513

Great American Insurance Group

1010

Coastal Securities, Inc.

1123

Evans, Simpson & Associates, Inc.

103

GreenPath, Inc.

1004

Executive Benefits Solutions

310

Harland Clarke

1014

Complete Security Service

24

200

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

BOOTH

Home Loan Alliance

Barfield, Murphy, Shank & Smith

Cardtronics

COMPANY

800

1000

Legacy Member Services

311

LendKey Technologies, Inc.

1139

Level5, LLC

500

LEVERAGE

511

LoanStreet LLC

812

Loomis

912

MaggieMae

205

n Conference Exhibitors

COMPANY Maple Street Inc. Member Access Pacific MeridianLink, Inc. Morgan Stanley NADA Used Car Guide National Cooperative Bank

BOOTH

COMPANY

BOOTH

1005

Piper Jaffray

1204

Shared Services for Credit Unions

300

Southeast Regional Credit Union Schools

303

Southeast Systems

301

State National Companies

210

307

PIVOT Group, LLC

714

407

Porter Keadle Moore, LLC

615

Print Resources

400

1107 405

PSCU

700

1003

PULSE

402 906

Nationwide Appraisal Network

813

Q2

Nearman, Maynard, Vallez, CPAs

515

Raoust+Partners

1001

Office Depot

506

Raymond James

413

OM Financial Group

514

Route 66 Extended Warranty

411

O’Rourke & Associates

406

Orth Chakler Murnance & Co. CPAs

702

Palmetto Cooperative

206

PDP Group, Inc.

410

Saltmarsh, Cleaveland & Gund Samaha Associates

1006 803

Scherer Construction

604

Seibold Security of Florida, Inc.

115

Share One, Inc.

814

COMPANY

STS Group

BOOTH

1140

Suncoast Credit Union

212

Support INS

904

SWBC

703

Symitar

903

The Baker Group

902

The Delta Consulting Group, Inc.

501

The Sheeter Group

315

United Solutions Company van Wagenen

COMPANY

BOOTH

Vernis & Bowling

911

VideoConnex

101

Vining Sparks

611

Visa, Inc.

900

Visible Equity

414

Williams, Gautier, Gwynn, DeLoach & Sorenson, P.A.

306

1117 913

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

25

LSCU Legislator Profile

Congresswoman Gwen Graham Congresswoman Gwen Graham was elected to represent Florida’s 2nd Congressional District in November 2014. She is the daughter of Bob Graham, the former United States senator and governor of Florida. Prior to her successful bid to represent Florida’s 2nd Congressional District, Congresswoman Graham worked for Leon County Schools as division director for professional standards and chief of labor and employee relations.

As someone who grew up in politics, what led you to want to run for Congress?

My entire life, my father has served as an extraordinary role model. Our nation used to have more statesmen like him in office, but we’re lacking that today. As a mother of three, I don’t want my kids growing up in a country with a dysfunctional government. I ran for Congress to bring public service back to the job -- to put people before party.

When I vote, I don’t vote for or against a bill based on party — I vote based on whether it will help or hurt North Florida. I’ve made it a priority to become friends with members on both sides of the aisle, and every piece of legislation I’ve introduced has had bipartisan support. The partisan games we’ve grown used to have only hurt our country. It’s going to take bipartisanship and cooperation to get Washington working again.

What are the important issues you see facing Congress today?

I think the biggest issue our county faces is the partisan divide and political games in Congress. We’re never going to conquer other major issues like protecting Medicare, investing in education, and balancing our budget unless we cross the aisle and start working together again.

What role do you see credit unions playing in Florida’s economy?

Credit unions don’t have customers, they have members. I think that fact alone shows the unique role credit unions play in our state’s economy. You help your members achieve the American dream. Whether it’s helping a family buy their first house or send their child to college, credit unions play a vital role in growing our middle class and Florida’s economy.

You’ve been very vocal about working across party lines, why do you feel that’s so important?

26

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

L to R: LSCU’s Jennifer Martin and Andy Gonzalez, Tallahassee-Leon Federal Credit Union’s Lisa Brown, Innovations FCU’s David Southall, Gwen Graham, Tyndall Federal Credit Union’s Jim Warren, and LSCU’s Jared Ross and Jordan Burroughs.

If you could give credit unions one piece of advice about being active in grassroots advocacy, what would it be?

Don’t hesitate to reach out to your representatives and let them know how important a piece of legislation is to your members. Encouraging members to engage in the process and contact their representative will grow your voice and impact.

Being one of Florida’s newest members of Congress, what would you like credit unions to know about you?

I’m a member of a local credit union and understand how valuable your services are to members. In Congress, I’m ready to work with members on both sides of the aisle to make sure credit unions can continue to serve their members and grow our economy. n

Tyndall FCU CEO Jim Warren looks on as Innovations FCU CEO David Southall greets Congressman Graham at an LSCU luncheon held for the congresswoman.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

27

INITIATIVES

Chapter Programs Encourage Professional Development and Exemplary Service

By Laura Vann, CUDE, vice president, cooperative initiatives, LSCU Participation in chapter events is a key component of professional development for credit union employees.

All of the 19 LSCU chapters provide meaningful opportunities for learning and building skills. Topics at recent chapter educational sessions include robbery and security, compliance, collections, social media, member service, the Bank Secrecy Act, and IRAs. Through chapter programming and young professional group participation, credit union employees have more opportunities than ever before to build a strong foundation in the credit union movement and develop their career path.

The oldest and most comprehensive chapter education program is presented by the Northeast Florida Chapter of Credit Unions. In 1975, representatives from Jacksonville area credit unions formed an educational committee to plan programs to meet the educational needs of credit union staff. That initial effort has evolved into the Credit Union Education Program (CUEP). The CEUP is offered in conjunction with Florida State College at Jacksonville and is designed for employees to sharpen their skills and increase opportunities to grow in the credit union movement.

Students can earn a six-course or a 12-course completion certificate.

Required courses include foundation and structure of credit unions, fundamentals of member service, business math, and human behavior. Electives include financial counseling, collection techniques, consumer lending, mortgage lending, credit union marketing, credit union accounting, financial management, and effective writing.

28

The Credit Union Education Program is a huge undertaking for the Northeast Florida Chapter. An 11-member advisory committee recruits instructors, provides textbooks, collects tuition, coordinates registration, pays instructors, maintains the website, markets the program, coordinates the annual graduation banquet, and administers student evaluations. The program’s partner, Florida State College at Jacksonville, approves instructors, approves curriculum and syllabus, provides classroom space, and administers the grade keeping system. The program averages 63 students per term. Three terms are offered each year.

The graduation ceremony for the CUEP is held at the summer Northeast Florida chapter meeting. Graduates are recognized in front of their peers and others are motivated to begin or complete the program. Employees of credit unions throughout Northeast Florida recognize the benefits of the CUEP program and know that it can have a positive impact on their careers.

A complement to the education sessions offered by chapters are the employee and volunteer recognition programs offered by several chapters. The Tuscaloosa Chapter began the Tuscaloosa Chapter Awards for Excellence in 2004. The chapter presents the Commitment to Service Award, the Community Service Award, the Volunteer of the Year Award, and the Employee of the Year Award. Nominations are submitted and reviewed by an independent panel.

The awards are presented at the chapter’s International Credit Union Day celebration in October, giving the recipients recognition in front of their peers and credit union leaders.

The Palm Beach and Broward Chapters host events honoring credit union employees

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

each year. Credit union employees are the credit union in the eyes of many of the members. Recognizing dedicated employees is a crucial step in maintaining a successful credit union brand.

The Palm Beach Chapter presents an employee appreciation event each year. For the past two years, the chapter has paid for two employees from each credit union to enjoy dinner and be recognized for their accomplishments.

According to Shannon Duran, president of the Palm Beach Chapter and senior vice president and COO at PBC Credit Union, the credit unions are in charge of determining the employees who will be recognized.

“When the credit unions submit their RSVPs for the dinner, they include the information on the employees they wish to be showcased,” said Duran.

The chapter gives each employee recognized a certificate of appreciation and a $25 gift card. They also take pictures of employees who are recognized along with their CEO and board members.

The Broward Chapter recognizes member service representatives at their event. Front line employees are commended for their dedication to the credit union movement.

Credit unions are known for growing talent from within and successful chapter programs are showing the importance of professional development and employee recognition. Additional information on chapter best practices is available on the LSCU website, www.lscu.coop. Click on the chapter support tab under cooperative initiatives. To learn more about the Credit Union Education Program visit www.cuep.org. To learn more about the Northeast Florida Chapter visit www. mynechapter.org.

HI the

LL

Sept. 16-17, 2015

LSCU Hike the Hill | Washington, D.C. No fee to attend. Visit lscu.coop for more information

EDUCATION

They are CUDEs Now! LSCU education staff talks about their experiences at CUDE training Teresa Gray, vice president, education, LSCU

The National Credit Union Foundation’s Credit Union Development Education (CUDE) program has been receiving rave reviews from everyone that has attended. In the recent months, three members of our education department have become certified Development Educators. If you have considered attending the program but haven’t quite come to your decision, our education staff wanted to share their sincere testimonies of the value of this program.

Julianne Tally, LSCU Director of Events When I learned I had the opportunity to go to the CUDE Training Program in Madison, WI I was eager to attend! I have been in the credit union movement for 10 years and a credit union member for 40 so I knew something about credit unions, but I was hungry to know more.

I wanted to understand our industry more fully, to know the credit union history and philosophy, to know our resources, to understand cooperatives and advocacy, and to have a stronger commitment to credit unions and the credit union system.

I had to laugh on arrival day. We were instructed to intentionally leave our credit union ‘hats’ at the door. We were all arriving as equals, not telling anyone else our position at our credit union. This was just the beginning for me in understanding the rationale behind this program, the environment, and the planning that had gone into the program.

Not only did we learn the history of the credit union movement, but the incredible sacrifice that has been made in order to get us to where we are today. We learned, in-depth, how credit unions meet needs in the community through the cooperative spirit, how the money goes back to the members, and the amazing amount of free

We became united in our effort to continue the sacrifice as our predecessors had, to stretch out and make a difference in our own credit unions, and to continue the passion for ‘people helping people.’

30

A Magazine of the League of Southeastern Credit Unions & Affiliates

products and services across the world and the passion that drives the movement. These were things that we didn’t just read about all week; we experienced them at various deep and uncomfortable levels, facilitating the learning into our very soul and mind. The DE program deepened my understanding of the cooperative principles, and I began to fully understand what it means to live out those principles.

By the end of the exhausting week, attendees began to find out each other’s roles in the credit union and it became even more encouraging to see the team as a team and not because of various roles or titles.

We became united in our effort to continue the sacrifice as our predecessors had, to stretch out and make a difference in our own credit unions, and to continue the passion for ‘people helping people.’

My only regret? I wish I had done this 10 years ago! If we want to continue success in our industry, we need to continue the sacrifice and that begins by investing in our industry, investing in ourselves, our employees, and our future. Plan now, and invest the time.

Jo Beth Wicks, LSCU Events Coordinator When I was informed that I was going to be attending the 2015 Winter CUDE Program in Fort Worth, TX for a full week of training, I was a little surprised since I had only been with the credit union movement for less than 90 days. I began to look into the program and became excited to learn more about the credit union movement. As the program began, I came to realize that I was the attendee with the least amount of time within the credit union movement in my class.

I took that as a vote of confidence from LSCU and began learning.

SIGNAL: Vol. 6, Issue 2

The CUDE program is unique and includes many vital lessons and issues pertinent to the credit union movement. It provides education on the cooperative principles, credit union national and international issues, and the importance of the credit union movement. Throughout the course of what seemed to be the longest, shortest week, I saw it light a fire in those who had been a part of the credit union movement for years. For me and the other attendees who were new to the movement, it instilled a desire to play a larger role and to make a difference.

This conference connects you to others within the credit union movement that have the same passion to better the communities we serve and act as resources for advice, support, and friendship when faced with challenges. I encourage anyone who is involved in the credit union movement to attend this conference. It puts your role in perspective and no matter how small a role you may play, you can make a difference. I know this training will assist me in the LSCU education department and serving our members.

Summer McKanstry, LSCU Events Manager Upon arrival, I didn’t know what to expect. Immediately my class and I were forced out of our comfort zone. No agenda, just anticipation about what was next. You have to be willing to trust the process and know that there is a reason for everything they do at the training!

The DE training has been a lifechanging experience for me. It helped me to develop a passion for the movement. My experience was all encompassing, getting down to the basics of the credit union movement and the cooperative principles, hearing heart-felt testimonials and creating life-long relationships with others that are working for that same common goal. The entire week was fantastic; definitely a lasting memory!

Is your mortgage solution giving you a competitive edge, or making it hard to compete?

Freedom Mortgage provides co-branded or private label mortgage solutions that will help you mitigate risks and improve your competitive advantage.

To learn more, call us at (844) 540-3474 or visit FreedomPartnerGroup.com.

Freedom Mortgage Corporation is a mortgage lender licensed in all 50 states. NMLS # 2767.

Corporate office located at 907 Pleasant Valley Avenue, Suite 3, Mt. Laurel, NJ 08054. FreedomMortgage.com, (800) 220-3333. Visit our website at www.freedommortgage.com/state-licensing for our complete list of state licenses. This communication is sent only by Freedom Mortgage Corporation and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal, state or local governmental body. This is a business-to-business communication and is not an advertisement to or solicitation of a consumer. Equal Housing Lender. Š 2015 Freedom Mortgage Corporation. All rights reserved.

FIPG089-0415

EDUCATION

Upcoming Learning Opportunities

Regulatory Compliance

Security & Robbery

Collections & Bankruptcy

Disaster Recovery

Lending School

BSA

BSA School

IRA

Below is the 2015 LSCU & Affiliates Events Calendar. Also, more than 120 webinars are available that provide training for every area of the credit union. Scholarships and SAS Initiative Accounts are available to assist with the financial investment of training and development.

Details for each event, webinar, and information on educational financial aid can be found at www.lscu.coop. For questions about educational opportunities contact any one of the LSCU education department staff listed in the LSCU Staff Directory in the back of this magazine.

June 2015

October 2015

17-20

7

20

NEW! LSCU Fraud Prevention Workshop | Birmingham, AL

22

NEW! LSCU Fraud Prevention Workshop | Tampa, FL

Southeast Credit Union Conference & Expo | Orlando, FL

July 2015

NEW! LSCU Technology Workshop | Orlando, FL

14

LSCU Bank Secrecy Act Essentials & Advanced Workshops | Mobile, AL

November 2015

LSCU Regulatory Compliance Workshops | Birmingham, AL

4-6

16

28-29

LSCU Philosophy in Action Workshop | Lake Mary, FL

August 2015

*Bold denotes LSCU & Affiliates signature events.

2-5

Southeast Directors & Supervisory Committee Conference | Point Clear, AL

18-19

NEW! LSCU Lending School | Orlando, FL

26-28

Southeastern Credit Union Management Association (SCUMA) Annual Meeting | Destin, FL

September 2015 9-11

LSCU/CUES Credit Union Executive Dialogue (Large Asset Size CUs) | Palm Beach, FL

15

LSCU Regulatory Compliance Workshops | Orlando, FL

16-17

LSCU Hike the Hill | Washington, D.C.

29-30

LSCU Collections and Bankruptcy Workshop | Birmingham, AL

32

A Magazine of the League of Southeastern Credit Unions & Affiliates

Southeast Leadership Development Conference Destin, FL

SIGNAL: Vol. 6, Issue 2

COMMUNICATIONS

How Can My Credit Union Use Google?

Mike Bridges, vice president, communications, LSCU For Google, the multinational technology company, there are only two constants change and evolution. In fact, the company is so future focused its mantra is “Technology of the past won’t solve problems of the future.”

Google, which started out strictly as a search engine in 1998, has evolved not only into the search engine, but also a company that specializes in Internet related services and products including: online advertising technologies, search, cloud computing, and software. It’s a company whose name is not only a noun but a verb.

Google’s mission statement from the outset was “to organize the world’s information and make it universally accessible and useful.”

The company is constantly evolving to make the world’s information even more accessible and even more useful – to each individual user, not just the masses. For credit unions this presents many opportunities to use Google’s progressive technology and reach specific audiences who are looking for the services offered by local credit unions – audiences that will ultimately reach back.

Currently, Google is trying to act as a personal assistant who knows you so well it can answer your questions before you ask them. Additionally, due to the prevalence of smartphones, Google is matching up query responses with the location of the user making them. Google has found that one in five searches is local and the businesses at the top of the search are the ones contacted by the user. In fact, three out of four smartphone users contact a local business following a search query. For credit unions, this means localizing ad words in search engine optimization (SEO). For example, it is more effective for credit unions to purchase “Shelby County loans” or “Broward County auto rates” rather than simply “loans” or “auto rates.” This may seem obvious for some, but it is important to keep in mind.

Google is also evolving through its “search and assist” function.

Because users are working on multiple devices, Google’s search algorithms account for the internet integration of today’s mobile consumers. So credit unions need to insure that their information is accessible, up-to-date, answers those consumers’ questions, and is accessible irrespective of whether it is accessed on a desktop, laptop, tablet, or smartphone.

Google also provides free tools for small businesses at www.gybo. com. There, credit unions can find resources that will help them increase their online presence, including tools to see how prominently a website appears on Google’s search engine. Additionally, Google

Google Searches Google is the most searched engine in the world. The number of daily and monthly searches is mind boggling.

■■ 40,000 search queries per second ■■ 3.3 billion searches per day ■■ 1.2 trillion searches per year ■■ 16 to 20 percent of daily searches have never been asked before In 1999, it took Google one month to build an index of 50 million pages. By 2012, the same task took less than a minute.

provides tips and tricks to make a website more prominent; among them are updating the website on a regular basis and incorporating commonly-searched keywords in online content. During a Google query, the search engine will check your website for keywords and if it has not been updated in recent weeks, it will push the site down the listing of search results. Keep in mind most consumers only look at the first page of search results.

Another useful feature Google offers is the trending page; google. com/trends, which allows credit unions to conveniently view and easily keep up with the latest online trends. A credit union can incorporate these trending keywords into their website and social media, possibly giving them a leg up on the local competition.

Online technology is both fast-moving and quick-changing. Credit unions that keep up with technology and use Google and other online tools most effectively will see results from an improved online presence. By making small changes and using free online resources, credit unions can take advantage of how members, and potential members, find information. Ultimately the bottom line is that using Google effectively helps consumers easily find your credit union and the easier your credit union is to find, the more likely your credit union is to be contacted for its products and services.

SIGNAL: Vol. 6, Issue 2

www.lscu.coop

33

INDUSTRY

An Experiment in Cyber Security with Some Common Security Mistakes Made

by Employees Joel Pearson, sales director, CSID

Whether small and local or large and national, human error is one of the biggest security threats to credit unions. To demonstrate just how effortlessly cyber criminals can target and exploit a credit union’s system through an unwitting employee, CSID executed an experiment. The idea? Develop a mock business, build its presence online, and watch as it becomes a target for real cyber criminals to hack after business employees make a few common security mistakes.

And thus, Jomoco was born, a fictitious coconut water company with two fabricated employees, Rachel and Richard. CSID established the virtual presence of Jomoco in a similar way a start-up would: buy a URL, set up a web server, and create employee business email addresses. The team developed additional personal profiles for the Jomoco’s two employees – an Xbox Live account for Rachel, a Facebook account for Richard, and personal emails for both – to mimic the cyber footprints that might exist for real small business owners.

Materials We Used ■■ ■■ ■■

Jomoco business URL Jomoco website server Jomoco business credit card

Jomoco business email accounts for employees Rachel and Richard ■■ Personal email accounts for employees Rachel and Richard ■■ Personal Xbox Live account with $15 credit (tied to a personal credit card) for employee Rachel ■■ Personal Facebook account for employee Richard To see how quickly Jomoco would be breached, CSID set up online accounts associated with the company and its employees without taking extra steps to ensure security. Furthermore, CSID ensured that Jomoco’s fictional employees made common mistakes when it came to protecting their professional and personal data online. The real cyber criminals took it from there.

In just 30 minutes, employees’ personal accounts were locked out. Within an hour, the Jomoco server was down, the website defaced and the business credit card fraudulently used. How did this happen?

Let’s follow the path real cyber criminals took to exploit Jomoco and its employees.

First, the hackers accessed Rachel’s personal email address by easily cracking her poor password. Since the fictional Rachel made the mistake of reusing passwords across multiple accounts – something 61 percent of consumers do in real life – cyber criminals were also able ■■

The idea? Develop a mock business, build its presence online and watch as it becomes a target for real cyber criminals to hack.

34

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

to hack into her Xbox Live account and lock her out using the same credentials. In doing so, they stole both her Xbox gaming identity and the $15 Xbox Live credit attached to it, information and currency that has nothing to do with Jomoco.

It was easy for hackers to access Rachel’s business email account using the credentials they had already tried. There, they found a fabricated email to Richard sharing Jomoco’s web server details like the IP address and login credentials. Using this information, hackers defaced the Jomoco website and locked out the business email accounts and web server, seemingly for fun.

Since Richard reused passwords across his personal and professional online accounts as well, the hackers were now also able to access his personal email account and Facebook, where they changed the passwords to both accounts and took them over.

Furthermore, the company credit card was fraudulently used for real purchases.

On a positive note, the bank hosting the company credit card froze the account almost immediately after the first fraudulent purchases were made. Using monitoring solutions, the bank identified the fraudulent credit card activity and shut down the account before additional purchases could be made.

Within one hour of Jomoco’s cyber footprint emerging online, the cyber presence of the company and its employees was completely compromised.

This exercise demonstrated how easily and quickly cyber criminals can infiltrate

the cyber identities of a business and the employees associated with them. Rachel’s and Richard’s password reuse across multiple online accounts – a common mistake representative of the poor password security habits many employees use in real life – was the key to Jomoco’s downfall.

After cyber criminals hacked only one set of credentials, a chain reaction had begun, enabling access to additional online accounts and valuable, private information.

Rachel and Richard also shared sensitive information with one another over email.

Sharing secure details, such as login information, Social Security numbers, and financial information over email is extremely insecure and can expose sensitive information to cyber criminals if an email account is breached.

In less than an hour, Jomoco’s fledgling coconut water business was brought to a halt by enterprising hackers. This quickness and ease of the breach underscores how critical it is to make cyber security a priority.

Understanding and educating employees about the security risks associated with sharing sensitive information, whether about the credit union or a customer, is the first step in mitigating risk. Here are additional

ways credit unions can prevent cyber criminals from exploiting their locations and customers:

Develop Security Policies and Educate Employees Ensure employees understand the importance of workplace cybersecurity.

Create and enforce password, BYOD, and social media policies from day one. Encrypt valuable data from employees, customers, and partners, like email addresses, passwords, and credit card numbers.

Require that employees use a VPN when on wireless Internet and regularly update devices. The more well educated the workforce is on the importance of security, the more likely they will be to employ better online habits at work and at home.

Create a Breach Preparedness Plan Have a breach preparedness plan in place. Practice transparent communication with the public and affected parties. Hiding details about a breach breeds distrust with customers, which can affect your reputation.

While a damage control plan may not reduce the cost of repairing the breach, it can keep customer relationships intact and diminish reputation damage.

As a sales director at CSID, Joel works with some of the most recognizable brands in the market today helping them realize the customer value, margin profile, and revenue opportunity associated with ID theft protection products. CSID operates as the leading global provider of ID protection technologies and restoration services. www. csid.com

Monitor Employee and Customer Credentials Take advantage of software solutions that can help monitor the security of your system and employees. A monitoring service can keep track of the credit union’s overall health and mitigate the risk of breach. Monitor employee and customer credentials to detect fraudulent activity early.

To recap, here’s a chronological timeframe of everything that happened.

PERSONAL EMAIL ACCOUNT

LOCKED OUT WITHIN 15 MINUTES

PERSONAL XBOX ACCOUNT

LOCKED OUT WITHIN 30 MINUTES

PERSONAL CREDIT CARD

LOCKED OUT WITHIN 30 MINUTES

PERSONAL FACEBOOK ACCOUNT

LOCKED OUT WITHIN 30 MINUTES

BUSINESS EMAIL SERVER

HACKED WITHIN 1 HOUR

BUSINESS WEB PAGE

DEFACED WITHIN 1 HOUR

BUSINESS SERVER

LOCKED OUT WITHIN 1 HOUR

BUSINESS CREDIT CARD

DEFRAUDED WITHIN 1 HOUR SIGNAL: Vol. 6, Issue 2

www.lscu.coop

35

NEWS

League News Both the Alabama and Florida State GACs focused on valuable advocacy and regulatory issues with unique opportunities for credit union officials to build and maintain strong political relationships. These connections are essential to the future of the credit union movement. A reception with state lawmakers and lobby visits to both capitols allowed credit unions to network with each state’s key policymakers. For more pictures from these two events, visit the League of Southeastern Credit Unions Facebook page.

Alabama State GAC ( AT RIGHT) House Majority Leader Mickey Hammon attended the Legislative Reception. Here he is speaking with Family Security CU CEO Shane Nobbley.

(BELOW) Speaker of the House Mike Hubbard, LSCU President/CEO Patrick La Pine, and Family Savings CU Director Ronnie Reed talk credit union issues during the Legislative Reception.

(BELOW MIDDLE) Rep. Randy Davis and LSCU President/CEO Patrick La Pine with Davis’ Alabama State Lawmaker of the Year award.

(BELOW RIGHT) Gov. Robert Bentley spoke for 45 minutes about his $700 million tax plan. He said credit unions shouldn’t be affected.

Florida State GAC (AT RIGHT) Tallahassee-Leon FCU’s Mike Akers talks to Rep. Halsey Beshears’ aide about credit union issues during Hill visits at the Florida State GAC. (BELOW) Rep. Mark Pafford speaks to the South Florida group during Hill visits at the Florida GAC. Credit unions represented at the meeting include Sun Credit Union, Dade County FCU, IBM Southeast Employees’ FCU, and Corporate One. (BELOW MIDDLE) Florida State Sen. Dorothy Hukill (R-Port Orange) was one of two lawmakers honored with a CUNA Desjardins Financial Education Award for State Government Policymakers. The League nominated Sen. Hukill for the award, which is determined by CUNA’s state credit union subcommittee, recognizing the leadership in financial education at the state level.

(BELOW RIGHT) Space Coast CU’s Doug Samuel talks to LSCU’s Legislator of the Year, Florida Speaker of the House Steve Crisafulli during Hill visits.

36

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

H G I H R YOUSITORS O P E D DOUBLE YOUR MEMBERS’ COVERAGE $500,000 Savings $500,000 Joint $500,000 IRAs Rick Choffel | 800.521.6342 ext. 400 rchoffel@AmericanShare.com | www.ExcessShare.com ESI - Alabama ad for Signal.indd 1

5/1/15 12:01 PM

LEVERAGE

The TRID Train is Coming!

Wallace Jones, vice president, training, CU Members Mortgage By now, you should be well on your way for the Aug. 1, 2015 TILA-RESPA Integrated Disclosure (TRID) deadline.

TRID has become the common acronym for the Consumer Financial Protection Bureau’s (CFPB) “Know Before You Owe” integrated disclosure rule that combines the Real Estate Settlement Procedures Act (RESPA) disclosures with Truth in Lending Act (TILA) disclosures. As mortgage lenders, we are used to changes in forms and processes, especially those that have occurred over the last three years from the Dodd-Frank mandated rules implemented by the CFPB. This rule however has proven the most difficult from an operational standpoint to implement, as it has drastically changed the forms and the calculations, but, more importantly, it will alter the way the industry closes mortgage loans.

Of course, it is vital to be as ready as you can. Make sure you understand the rule. Make sure your systems and any vendors you work with will be ready as well. If your vendor says they will be ready for BETA testing by June or July, then you should be concerned. Employees should be trained and ready, too. The industry has handled various modifications in forms and processes, and while it isn’t easy, we’ve proven it can be done. However, changes in forms and processes are the least of the concerns.

Have you also considered the impact outside parties have on each transaction?

Their lack of knowledge can easily result in missed closings and therefore risk your reputation as a lender. When the transaction isn’t smooth, the lender takes

38

the blame. TRID imposes strict requirements for mandatory waiting periods prior to closing. As the triggers are initiated, they result in the unwanted and then unavoidable consequence of the waiting period. However, those unfamiliar with these new laws and requirements believe the lender is incapable or causing the delays due to incompetence.

The average profile of a realtor is a 42-year-old who closes less than five transactions per year. How many of them are well versed in the rule? What expectations have they set for your member? How many will be writing 45day contracts instead of 30 to account for possible delays? If your member has a moving van parked in front of their new home and learns that they will not be able to get the keys for three to seven days because of a slight fee change at the closing table that requires a new closing disclosure followed by a required waiting period, who is going to be blamed? It won’t

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

be Barney Frank, Chris Dodd, the CFPB or the realtor. It will be the credit union.

It is imperative that in addition to educating your staff, you do your best to educate your home loan community. Hold seminars for local realtors and builders and communicate heavily with your settlement agents. Make sure that your originators set the proper expectations for your members and you can at least mitigate post-August 1 issues.

Vendor Risk Management We recognize the challenge our customers face with managing third party risk. Regulatory requirements now demand a much higher level of due diligence and ongoing monitoring, challenging banks and credit unions who have limited expertise and virtually no additional time or resources to comply with necessary changes.

VM Core Annual review of core information systems provider and related services

VM Plus Annual review of select number of critical and material vendors

VM Premium Complete outsourcing for all vendors

Whatever stage your program is in, our seasoned business advisors are here to help reduce your risk and regulatory burden. Our vendor risk services provides three cost effective options for your institution to choose from: VM Core, VM Plus, and VM Premium.

All VM Core, Plus, and Premium service offerings include: 

Gather and review due diligence documentation



Annual review of MSAs, contracts, addendums



Annual review of financials, certificates of insurance, SSAE-16’s, SOC, BCP, incident response plans, etc.



Monthly monitor service for news relating to mergers, closings, data breaches and any issues of concern



Timely findings & recommendations



Annual report to management and the board

680 American Ave, Suite 203, King of Prussia, PA 19406 | 610-265-1002 | www.strohlrisksolutions.com

LEVERAGE

Collaboration Provides Solution for CU Repossession and Disposition Needs Keith Hopkins, vice president, product support, LEVERAGE

Alabama and Florida credit unions have a new option for managing recovery and asset disposition thanks to a cooperative agreement between LEVERAGE, Remarketing

by GE, and Strategic Remarketing Solutions (SRS), a repossession forwarding company.

Through this cooperative agreement, SRS and Remarketing by GE will collaborate together for the convenience of credit unions seeking a single, unified solution for all their repossession and disposition needs.

Credit unions can issue a repossession assignment to SRS using the repossession forwarder’s state-of-the-art web-based portal, and then track, monitor, and report on agent activity using the same online tools. Built from the ground up for both convenience and compliance, SRS’s system is easy to use, and passes all the necessary checklists for redundancy, disaster recovery, privacy, and security. With a network of recovery agents that stretches from coastto-coast, SRS requires its agents to be licensed, bonded, and insured, exceeding minimum state requirements in most locales.

Once a credit union’s asset is recovered, SRS then automatically assigns the vehicle to Remarketing by GE for disposition at auction without any additional effort from the credit union. Collections managers can use convenient and secure online tools for tracking, monitoring, and reporting on the disposition of the credit union’s asset, including the viewing of online condition reports, pricing estimates, and online communication with both the auction and

40

Once a credit union’s asset is recovered, SRS then automatically assigns the vehicle to Remarketing by GE for disposition at auction without any additional effort from the credit union. Collections managers can use convenient and secure online tools for tracking, monitoring, and reporting on the disposition of the credit union’s asset, including the viewing of online condition reports, pricing estimates, and online communication with both the auction and Remarketing by GE field managers.

Remarketing by GE field managers. Just like with asset recovery, credit unions have access to robust reporting tools for disposition, as well.

SRS and Remarketing by GE can assist credit unions with not only passenger cars and light trucks, but also with specialty equipment, such as boats, RVs, motorcycles, and more. The companies can even assist credit unions with recovery and disposition of heavy duty trucks, tractor-trailers, and yellow iron farm equipment.

“We have wanted to offer a solution like this for some time,” said LEVERAGE SVP/ COO Lisa Burroughs, “but it wasn’t until SRS and Remarketing by GE teamed up that we felt we had the right mix of both recovery and remarketing resources for our credit unions.”

Jeff Bescher, president of SRS commented, “Our executive team has extensive experience in the auction and recovery industries where we served credit unions for many years. In addition, our suite of web-based tools was built from the first line of code with the user in mind, including

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

all the necessary safeguards credit unions need to be compliant. We’re excited to be part of this collaboration.”

To learn more contact LEVERAGE Product Manager Rhea Oaks at 866.231.0545, ext.

1146 or rhea.oaks@myleverage.com.

HELP YOUR MEMBERS PROTECT WHAT MATTERS MOST. Think about it: 80% of adults say people need life insurance— 1 however, nearly 40% of these people have none at all.

This leaves far too many families, potentially your credit union’s families, financially vulnerable if they lose a loved one.

At TruStage we strive to make life insurance achievable for your members. Our proven marketing techniques reach them where and how they shop; our full range of products are designed to be affordable; and our expert support is convenient to access. ™

With more than 14.8 million members already protected, you can be confident that TruStage Insurance is the right choice 2 to help protect what matters most to your members.

Visit cunamutual.com/life or contact your CUNA Mutual Group representative today at 800.356.2644.

1 2

LIMRA 2014 Insurance Barometer Report.

TruStage Insurance Policyholder Analysis, May 2014.

TruStage™ Life Insurance is offered by TruStage Insurance Agency, LLC and underwritten by CMFG Life Insurance Company. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by your credit union. CUNA Mutual Group Proprietary and Confidential. Further Reproduction, Adaptation, or Distribution Prohibited.

MC-979206.1-0714-0816 © CUNA Mutual Group, 2014 All Rights Reserved.

LEVERAGE

A Wise Decision

NCUA’s 2003 Expansion of Benefits Pre-Funding Options Is Proving Important

By amending Regulation 701.19 in 2003, the NCUA gave federally chartered credit unions the ability to invest in a variety of financial instruments that hadn’t been permitted before. The idea was to give credit unions more options for increasing their investment returns to help offset the cost of employee benefits.

After all, at the time it didn’t seem likely that benefit costs would decrease anytime soon—and indeed they haven’t.

For example, according to a survey by the Kaiser Family Foundation and Health Research and Education Trust, the average annual premium for employer-provided family health care coverage in 2014 was $16,834. That’s about 69 percent higher than in 2004 and 22 percent higher than in 20101.

The pressures of paying for everincreasing benefits costs are only being exacerbated by credit unions’ falling investment returns, which are negatively impacting net interest margins. The yield on average investments has fallen by more than 36 percent, from 1.95 percent to 1.24 percent over the last five years.2 This has contributed to the industry’s net interest margin dropping 13 percent over the same period.2

Two Reasons for the Slow Adoption of Pre-Funding Even given these trends, it’s natural that many credit unions took a wait-and-see approach to the new pre-funding options, despite the potential for higher yields. Two key reasons are:

42

An initial interpretation period: It took a few years of back-and-forth between the NCUA, investment services firms and credit unions to work out precisely which instruments would be allowed for benefits pre-funding. The parameters for using certain types of bank-owned life insurance (BOLI), mutual funds, stocks, annuities, bonds, and institutionally-managed portfolios had to be clarified.

Conservative culture: When it comes to investing members’ capital, credit unions are, quite properly, risk averse. In addition to avoiding unnecessary losses, they don’t want to introduce anything to their balance sheets that won’t pass muster with NCUA examiners.

By now, however, these concerns have largely been addressed, as early adopters have had employee benefits pre-funding programs in place for several years—some for long enough to be battle-tested by the Great Recession.

Three Important Considerations for Pre-Funding Programs If your credit union is considering a prefunding program, here are some important steps to take: 1. Assess your employee benefits obligations: Determine the amounts actually spent for group health, 401(k), group life and disability insurance, etc.

Consider the type of package you’ll need to remain competitive for the talent your credit union requires to thrive, giving consideration to both broad-based employee benefits and executive benefits packages. This helps you set your prefunding program’s goals.

2. Do your due diligence in selecting providers, including both the vendors and the investment options those vendors

A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 2

bring forth such as insurance carriers and portfolio managers. These firms may have been using these financial instruments for many years for large banks or personal investors, but be sure they understand the credit union industry’s unique needs and culture.

3. Seek expert guidance to inform your board and asset/liability committee about employee benefits pre-funding.

Require potential vendors to address not only their track record for investment returns, but their program oversight and compliance capabilities as well.

A benefits pre-funding program should be designed as a sustainable, long-term strategy, not a quick-fix for your ROA. The goal is to keep your key ratios in good shape, which can help fund benefits programs that attract and retain excellent employees far into the future.

For more information about CUNA Mutual Group’s Total Benefits Pre-Funding program, contact the Executive Benefits Service Center at 800.356.2644, ext. 665.1035, or visit www.cunamutual.com/executivebenefits.

1Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2014 Employer Health Benefits Survey 2 National Credit Union Association, 5300 Call Report Quarterly Data, December 2014 Proprietary insurance is underwritten by CMFG Life Insurance Company. Proprietary and brokered insurance is sold by CUNA Mutual Insurance Agency, Inc., a wholly owned subsidiary. This insurance is not a deposit and is not federally insured or guaranteed by your credit union. For more information, contact your Executive Benefits Specialist at 800.356.2644.

Securities distributed by CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/ dealer, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 866.512.6109. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by the financial institution. Representatives offer retirement and investment education but do not provide investment, legal or tax advice. Participants are encouraged to consult their own advisors.

Identity Protection & Fraud Detection for Member Security

The financial industry is one of the most targeted when it comes to data theft; proactive identity protection and fraud detection mitigate the impact of these attacks quickly and easily, building member trust.

LEVERAGE’s Member Security Center increases non-interest income and strengthens member relationships through an unmatched authentication program. The program offers a variety of two-factor authentication options that go above and beyond basic passwords and security solutions. Our technology proactively detects stolen Personally Identifiable Information (PII) and compromised confidential data on an international level and alerts members if it finds their PII being bought or sold online.

For more information about how your credit union can save money on identity protection and fraud detection, visit us online at www.myleverage.com.

Yo u r A d v a n t a g e

DIRECTORY

LSCU Directory Offices 22 Inverness Center Pkwy, Ste 200 Birmingham, Alabama, 35242 3692 Coolidge Court Tallahassee, FL 32311 866.231.0545

OFFICE OF PRESIDENT/CEO Patrick La Pine, x1002 President & CEO patrick.lapine@lscu.coop Kate Brady, x1060 Executive Assistant to President/CEO kate.brady@lscu.coop

ASSOCIATION SERVICES Administration Jared Ross, x1012 SVP, Association Services jared.ross@lscu.coop

Communications Mike Bridges, x1022 VP, Communications mike.bridges@lscu.coop Amy Jowers, x1020 Director, Communications 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

David LeNoir, x2158 Member Relations Consultant david.lenoir@lscu.coop Juli Lewis, x1108 Member Relations Consultant juli.lewis@lscu.coop Judy Scott, x1062 Member Relations Consultant judy.scott@lscu.coop Leonard Parkhurst, Jr., x1154 Director, Southeastern Credit Union Foundation leonard.parkhurst@lscu.coop

Education

Summer McKanstry, x1172 Events Manager summer.mckanstry@lscu.coop

Jason Cochran, x2159 Sr. Director, Governmental Affairs (AL) jason.cochran@lscu.coop Jennifer Martin, x1150 Director, Governmental Affairs (FL) jennifer.martin@lscu.coop Andrew Gonzalez, x1010 Political Affairs Manager (FL) andrew.gonzalez@lscu.coop

A Magazine of the League of Southeastern Credit Unions & Affiliates

Cindy Greiwe, x1152 Senior Accountant cindy.greiwe@lscu.coop

Leia White, x1140 HR Consulting Manager leia.white@lscu.coop David Todd, x1124 Facilities & Operations Manager david.todd@lscu.coop Di Troch, x1054 Operations Assistant diana.troch@lscu.coop

CUSC of Alabama Tameka Allen, x2178 Director, Shared Branching tameka.allen@cusc-al.com

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

44

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

Jason Neifield, x1142 Director, HR Services jason.neifield@lscu.coop

Governmental Affairs

Jordan Burroughs, x1008 Grassroots Coordinator jordan.burroughs@lscu.coop

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

Parul Handa, x1114 Staff Accountant parul.handa@lscu.coop

Jo Beth Wicks, x2172 Events Coordinator jobeth.wick@lscu.coop

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

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

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

Julianne Talley, x1148 Director, Events julianne.talley@lscu.coop

Cooperative Initiatives

Shawn Wolbert, x1032 SVP, Finance & Administration shawn.wolbert@lscu.coop

Mike Couey, x2136 Finance & Operations Manager mike.couey@lscu.coop

Teresa Gray, x2110 VP, Education teresa.gray@lscu.coop

Blake Westbrook, x2164 Political Affairs Manager (AL) blake.westbrook@lscu.coop

Finance & Administration

SIGNAL: Vol. 6, Issue 2

LEVERAGE Administration Lisa Burroughs, x1004 SVP/COO lisa.burroughs@myleverage.com

Transactional Services Jay Brady, x1106 VP, Transactional Services jay.brady@myleverage.com Janice Jordan, x2176 Director, Debit Operations & Training janice.jordan@myleverage.com Michael Kiene, x2169 Director, Transactional Services michael.kiene@myleverage.com Win Cooper, x2115 Sr. Transactional Services Specialist win.cooper@myleverage.com Chris Dirmann, x1182 Director, Card Services chris.dirmann@myleverage.com Angela Harris, x1190 Card Services Manager angela.harris@myleverage.com Amy Bryant, x1196 Sr. Member Services Representative amy.bryant@myleverage.com Gwen Davis, x1186 Member Services Representative gwen.davis@myleverage.com Robert Plant, x1194 Member Services Representative robert.plant@myleverage.com Jackie Singleton, x1184 Member Service Representative jacqueline.singleton@myleverage.com Tieshia Akins, x1182 P/T Member Service Representative tieshia.akins@myleverage.com Kim James, x1198 P/T Member Service Representative Kim.james@myleverage.com

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

Audit & Compliance Consulting Keith McMurtrie, x2133 VP, Audit & Consulting keith.mcmurtrie@cuacg.com Kathy Hollifield, x2140 Senior Auditor/Office Manager kathy.hollifield@cuacg.com Michael Hemminger, x1096 Staff Auditor michael.hemminger@cuacg.com Kathy Reynolds, x2121 Audit Manager kathy.reynolds@cuacg.com Arden Ward, x2132 Staff Auditor arden.ward@cuacg.com

Karen Ruggiero, 866.949.6220 Sr. Contract Management Analyst karen@cuvm.org

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

Rhea Oaks, x1146 Product Manager rhea.oaks@myleverage.com

ComplyTrac

Brooke Collins, x1050 Contract Management Specialist brooke.collins@myleverage.com Robert Williams, x1030 Contract Management Analyst robert@cuvm.org Alicia Haskew, x1044 ePurchasing Coordinator alicia.haskew@myleverage.com Cody Zinker, x1188 Due Diligence Coordinator cody@cuvm.com

Product Developement

Kershun Thomas, ext. 2123 Staff Auditor kershun.thomas@cuag.com

Marvin Garland, x1102 Chief Innovation Officer marvin.garland@myleverage.com

Shawna Southerland, x2144 Senior Auditor shawna.southerland@cuacg.com Vickie Taylor, x2145 Senior Auditor vicki.taylor@cuacg.com Marcus King, x2141 Staff Auditor marcus.king@cuacg.com Laura Heard, x2131 Audit & Compliance Support Specialist laura.heard@cuacg.com

Product Management Keith Hopkins, x1170 VP, Product Support keith.hopkins@myleverage.com Deirdre Rhodes, x1104 Product Support Manager deirdre.rhodes@myleverage.com

CO-OP Financial Services

Kim McCallum, 866.949.6220 Contract Management Analyst kim@cuvm.org

Bonique Turner, x2124 Staff Auditor bonique.turner@cuacg.com

Mark Wilsie, x2142 Audit Manager mark.wilsie@cuacg.com

LEVERAGE PARTNERS

Jordan Sullivan, x2137 Business Analytics Manager jordan.sullivan@myleverage.com

Marketing Ryan O’Connor, x1072 VP, Marketing ryan.oconnor@myleverage.com Mike Wewerka, x1040 Marketing Production Specialist mike.wewerka@myleverage.com Detra White, x1156 eMarketing Specialist detra.white@myleverage.com

Business Development Consultants Michael Baswell, x2151 Business Development Consultant michael.baswell@myleverage.com Steve Pullara, x1164 Business Development Consultant steve.pullara@myleverage.com

Automated compliance solution that streamlines compliance procedures and reduces costs.

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

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

CUNA Mutual Group 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.

Ding Guard Ding Guard is a service plan designed for automotive lenders who wish to provide paintless dent repair services for their borrowers looking for an extra layer of protection for their vehicle. The Ding Guard service plan provides automotive lenders the ability to earn new non-interest income.

Member Security Center Member Security Center is a way for credit unions to offer identity theft protection and monitoring for their members. It can search the Internet and other records to see if the member’s information has been compromised in any way and can provide the member with a credit report and credit report monitoring. The Member Security Center is also a way for the credit union to earn additional non-interest income.

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

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

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

Strategic Buying Leverage credit union buying power to reduce capital expenditures and provide real savings on almost anything you need.

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

VERI-TAX Leader in loan verification to meet the raised compliance and fraud detection standards in the mortgage and consumer credit industries.

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.

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.

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.

Kelli Silvernale, 866.949.6220 Director, Vendor Management kelli@cuvm.org SIGNAL: Vol. 6, Issue 2

www.lscu.coop

45

SIGNAL MAGAZINE RETURN ADDRESS 3692 COOLIDGE COURT TALLAHASSEE, FL 32311 22 INVERNESS CENTER PARKWAY, #200 BIRMINGHAM AL 35242

Southeast Directors & Supervisory Committee Conference Now including directors!

Grand Hotel Marriott Resort One Grand Blvd., Point Clear, Alabama

Early bird discount rate deadline: July 17, 2015 Group rate for hotel room deadline: July 2, 2015

League of Southeastern Credit Unions & Affiliates

www.LSCU.coop