Signal Magazine Q12015

2015 | ISSUE 1

The Magazine of the League of Southeastern Credit Unions & Affiliates

Not Just a Coat of Paint and New Chairs Anymore

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A Division of LEVERAGE

LSCU

Message from the President This first quarter has been one of the busiest I can remember since consolidation. Both of our state legislatures opened on the same day – March 3. Your LSCU governmental affairs team has a full, proactive agenda they will be pushing this session. We also have a number of federal issues that are currently before Congress that we are working on with CUNA. I would like to highlight some of these issues and ask for your help.

You are reading this after we returned from this year’s CUNA GAC where we had the opportunity to visit with the staff of our lawmakers, as well as Sen. Richard Shelby (R-AL), chairman of the Senate Banking Committee. Sen. Shelby says he is committed to helping find ways to provide regulatory relief. He also told us that he understands it is crushing credit unions. He has backed up those words by holding a regulatory relief hearing in February and having credit unions testify.

Sen. Shelby also told the group that he sees the value in the credit union tax exemption and appreciated that we sent a letter to the editor to the CU Times refuting their claims that he waffled on the credit union tax exemption. I believe we can expect a regulatory relief bill for credit unions and banks sometime in the near future. Most of our delegation told us they are interested in helping provide regulatory relief.

At our request, Rep. Jeff Miller (R-FL) reintroduced his bill to exempt member business loans (MBLs) to veteran’s from the credit union cap in February. Rep. HR 1133 currently has nine co-sponsors, with many of our Alabama and Florida delegation members expressing interest in learning more about the bill. With so many of our credit unions serving branches of the military, this bill has a chance to make an immediate impact, if passed.

Discussions about the credit union tax exemption during our CUNA GAC visits were also encouraging. Most of the offices told us that they had not heard any talk of including credit unions in any comprehensive tax reform. The work of CUNA, leagues, and credit unions back in 2012-2013 for the “Don’t Tax My Credit Union” campaign is still paying dividends for us on Capitol Hill, but we must stay diligent on this issue.

Data security was another hot topic and we expect there to be some movement on. Both House and Senate Committees have held hearing on the issue and Sen. Nelson from Florida has introduced legislation that is a good starting point on the issue (S. 177). What we heard most was just how difficult it is to get a bill passed that satisfies the many parties involved. But, we are continuing to push that merchants be held accountable if they cause a breach.

In Montgomery, we are continuing to advocate for preservation of the credit union tax exemption, push public deposits, and data security. Gov. Robert Bentley says he wants to raise taxes, so much or our outreach to Alabama state lawmakers over the past six months has been educating them on the public policy benefits of the tax exemption. So far, Gov. Bentley’s tax plans do not mention the credit union tax exemption, but things can change quickly once actual legislation is introduced. This is our top priority. Alabama is one of three states with no data security law, so we are working closely with the legislature to get meaningful legislation passed that sets standards for merchants. Additionally, we are continuing to look at opportunities to push legislation that would allow credit unions to take public funds.

In Tallahassee, public deposits, financial literacy, data security, and fighting patent trolls tops our agenda. We are working closely with Sen. Dorothy Hukill (R-Port Orange) and Rep. Heather Fitzenhagen (R-Ft. Myers) to get their legislation passed that would require graduating Florida students to take a one-half credit of financial literacy. The League created a financial literacy taskforce made up of Florida credit unions to help create awareness of the bill, help it pass, and then help create curriculum. In March, the taskforce began a FinLit Friday social media campaign with the hashtag #CU4FinLit. Our public deposits bill is in committee, and we are working to gain traction to get it passed out of committee. We continue to work hard on all of our issues in an effort to provide meaningful reform in the state of Florida.

It’s important that all of you keep up with where we stand on our issues at the state and federal level. As each of them move through the state and federal process, we need your support and participation to get them passed. Watch for Action Alerts to send messages to your state and federal lawmakers. At the CUNA GAC, Sen. Marco Rubio’s (R-FL) Deputy Legislative Director Scott Parkinson said when an issue comes up he asks his correspondence people if they’ve gotten any messages on it. He says if they don’t, then it must not be that big an issue. We need to show that it is by flooding email and phones at the appropriate time.

I expect the second quarter to be just as hectic on the advocacy front. I hope you will work with us to get some of these issues passed.

As I’ve said many times on the past, the LSCU is just the tip of the spear. We are only as effective as the grassroots advocacy efforts of our member credit unions.

Patrick La Pine, CCE, CUDE President & CEO League of Southeastern Credit Unions & Affiliates SIGNAL: Vol. 6, Issue 1

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Table of Contents Editor Amy Jowers Contributors Bill Berg Mike Bridges Jason Cochran Craig Dismuke Natalie Edwards Andy Gonzalez Teresa Gray Keith Hopkins Juli Lewis Jennifer Martin John McKechnie Jeff Rendel Christopher Roe Laura Vann Blake Westbrook

Congressman Gary Palmer

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

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Connect with us!

President’s Message Trends 4 League Proposes New Bylaws The current League bylaws calls for a review every five years. To meet this provision, the board spent 18 months reviewing the bylaws and making changes. Credit unions are encouraged to visit www.lscu.coop to learn more about the changes and also attend a town hall meeting to provide input into the changes.

LeagueofSoutheasternCreditUnions

6 @LeagueofSECUs

Branch Design: Not Just a Coat of Paint and New Chairs Anymore

Branch design is not just a coat of paint and new chairs anymore. Today branch design is driven primarily by two things: improving technology and creating a member-centric experience.

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Search by pinners: LSCU WEBSITE www.lscu.coop

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Advocacy 9 Record-Breaking Year for LSCU PACs 11 Tax Reform Discussions Begin Anew as Congress Eyes 2015 Agenda 13 2015 Alabama Legislative Session Preview 14 2015 Florida Legislative Session Preview 16 Regulatory Highlight: NCUA Supervisory Priorities

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LSCU Legislator Profile 18 Congressman Gary Palmer 20 Representative Bill Hager Cooperative Initiatives 22 Helping to Make Young Money Masters

HIGHLIGHTS 4 | TRENDS Branch design goes deeper and begins with the heart of the branch - its members. See how two credit unions do just that with branch design.

9 | ADVOCACY 24

Education 24 SRCUS: The Ultimate Learning Experience 25 Upcoming Learning Opportunities

Legislative session is in full swing. Read a preview for both the Alabama and Florida legislative sessions to see what is going on in your state.

22 | COOPERATIVE INITIATIVES 26

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Communications 26 2015 Hot Social Media Trend – Visual Content Industry 28 Ten Disciplines of Exceptional Member-Centered Cultures League News 30 Southeast Leadership Development Conference: A Review in Pictures

Financial education is a top priority for the League in 2015. Find out what the League is doing to provide credit unions the resources needed to implement financial education programs.

26 | COMMUNICATIONS Social and digital media are major pieces of the plan now, and the channels for each continue to increase every year. Find out what the hottest trend for 2015 is for social media.

31 | LEVERAGE 31

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LEVERAGE 31 Strengthening Economy Leads to Equity Protection Program 32 SprintÂŽ for Good... and More 34 Global Divergence 35 CUNA Mutual Group Continues CU System Advocacy Efforts in 2015

Credit unions are getting creative in the ways they are using the funds they have earned through the Sprint Credit Union Member Discount Program.

LSCU Directory

2010, 2011, & 2012

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TREND

League Proposes Mike Bridges, vice president, communications, LSCU

Starting in early February and concluding at the end of April, LSCU & Affiliates President/ CEO Patrick La Pine, along with LSCU board members, has been traveling Alabama and Florida holding town hall style meetings to present proposed new League bylaws to the membership. The current LSCU bylaws call for a review every five years. That would make the first review due this year.

In anticipation of the deadline, the LSCU Governance Committee began looking at the League’s bylaws 18 months ago.

The committee, chaired by Listerhill CU CEO Brad Green, thoroughly went over each article and section of the current bylaws approved in 2009 as part of the Alabama and Florida League consolidation.

The committee reviewed the governance structure and election procedures and also looked for ways to modernize them and to create more flexibility moving forward. The committee also looked at the bylaws of eight other state leagues that are similar in size and complexity to the LSCU & Affiliates. With the changing landscape of the credit union industry, it is important that the League’s bylaws be able to evolve as the organization continues to evolve.

“The board started this process in October 2013 with the goal of bringing it to the membership in June 2015. With credit

The town hall meetings are being held to help understand the process and the proposed changes to the LSCU bylaws. Sun CU CEO and LSCU board member Pat Mason, along with LSCU President/ CEO Patrick La Pine, discuss the proposed bylaws with LSCU Southernmost Chapter CEOs.

unions and leagues approving a CUNA bylaw amendment earlier this year that deals with multi-state league dues, the LSCU would have had to amend its bylaws anyway to participate in the program,” said LSCU & Affiliates Board Chairman Steve Swofford.

“So it was very forward-thinking of the board to start our review process when we did.”

Swofford also points out that CUNA has put together a governance and structure task force that is looking at the CUNA/ League system model, as well as CUNA’s

“Just in the five years since the current bylaws were adopted, the credit union industry has changed significantly not to mention the makeup of credit unions within our two states. As management and directors of the LSCU & Affiliates, we need to keep our eye several miles down the road and have the ability to react quickly to changes in the marketplace.”

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A Magazine of the League of Southeastern Credit Unions & Affiliates

SIGNAL: Vol. 6, Issue 1

New Bylaws structure and governance. This makes updating the LSCU’s bylaws even more important to keep up with possible changes to come out of this process. The proposed new bylaws are designed to give the LSCU board the option to grow geographically, as well as serve more credit unions outside the League’s core market of Alabama and Florida.

“There are some suggestions to bring back to the board which is exactly what we wanted from our membership.”

“We have to be forward-thinking as an organization. The proposed new bylaws reflect a vision towards the future,” said LSCU & Affiliates President/CEO Patrick La Pine. “Just in the five years since the current bylaws were adopted, the credit union industry has changed significantly not to mention the makeup of credit unions within our two states. As management and directors of the LSCU & Affiliates, we need to keep our eye several miles down the road and have the ability to react quickly to changes in the marketplace.”

By May, the League will have conducted 14 town hall meetings and a webinar. Each town hall meeting consists of going over the proposed new bylaws, answering any questions or concerns of attendees, and then bringing those thoughts back to the full board for consideration.

“Most of the town hall meetings have been well-attended, and the attendee interaction has been very supportive,” said La Pine. “There are some suggestions to

Town Hall Meetings Continue Town hall meetings continue in April with six more meetings in Alabama and Florida. A webinar will be held on April 14 which will be recorded and posted to the LSCU website. Credit unions that have not attended a town hall meeting are encouraged to attend one of the remaining ones in April, attend the webinar, or listen to the recorded webinar. Credit unions can still offer feedback by sending an email to LSCU President/CEO Patrick La Pine (president@lscu.coop) or by calling 866.231.0545.

Next Steps The board intends to bring the new bylaws before the membership for a vote at the LSCU Annual Meeting on June 18 in Orlando. According to the League’s current bylaws, credit unions must be physically present at the annual meeting to vote on the proposed changes. Note: One example of modernizing and changing the bylaws is a proposal to allow for voting by mail ballot and/or other electronic means.

The more feedback we receive, the better the LSCU will be able to improve the bylaws. LSCU President/CEO speaks to LSCU Broward Chapter CEOs.

bring back to the board which is exactly what we wanted from our membership.”

The board is making the process as transparent as possible with many resources for the proposed new bylaws on its website, www.lscu.coop. These include a copy of the old bylaws, the proposed new bylaws, FAQs, and the town hall schedule. A recorded webinar will be sent to credit unions in mid-April.

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TREND

BRANCH DESIGN

Not Just a Coat of Paint and New Chairs Anymore

By Natalie Edwards, communications coordinator, communications, LSCU

Once upon a time, in a pre-digital, pre-smart phone, and pre-HGTV age (you know, way back in the 1990s), changing a branch’s design would most likely have meant some new chairs, a fresh coat of paint, perhaps some new art for the walls. Maybe, if you were really fancy, there would be some new desktop computers and new land-line phones. Creating a member-centric environment meant a clean environment with plenty of working ink pens, deposit slips, and perhaps a full basket of assorted fruit-flavored suckers.

Back in those dark pre-iPhone days, technology was simply not a key factor in a branch design – technology was a new computer or a cordless telephone. Being member-centric was simply maintaining staff and supplies. As they say, “times have changed.” Today, branch design is and will continue to be driven primarily by two things: improving technology and creating a membercentric experience.

Recently, two member credit unions began setting the pace for the future of branch design. Both Listerhill Credit Union and Tyndall Federal Credit Union have opened branches that are using technology components as part of their branch layout. And they are using those technological components along with directed branch design and branch-specific staff to create a more member-centric environment.

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Listerhill Credit Union In February, Listerhill Credit Union, based out of Muscle Shoals, AL, opened “The Hill” branch at the University of North Alabama (UNA) in Florence, AL. Everything about the branch is designed with college student members in mind - from its location in the student commons, to its studentrun staff, to its lounge like interior complete with charging stations where the students can hang out and work on homework.

“The Hill” branch is located in The Commons at UNA, which is prime real estate. The Commons serves as the heart of campus life, and “The Hill” branch is its centerpiece nestled among everything a college student could ever want or need - a Starbucks, Chick-Fil-A, Frostbite Frozen Yogurt, and the UNA Bookstore.

In addition to the branch’s ideal location, it has a perfect staff for its college-specific members – their peers. The branch is almost completely student-lead. The only employee at the credit union that is not a current student is the director of financial literacy, who is a former student of the university.

Listerhill Vice President of Marketing Kristen Mashburn explained that when coming up with

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the design and concept of the branch, Listerhill wanted to match what the students were looking for and accommodate those needs. To do so, they engaged in a discovery period where they learned that having peers they could talk to about their finances was important to students.

Additionally, Listerhill found that a relaxed, comfortable environment was equally important to students. So the credit union created an open concept branch with a lounge-like feel.

“It was completely designed with the student in mind. It has things like charging stations where people can work on their homework and those kinds of things. It has a more modern and a more technologically savvy feel to it than our other branches,” explains Mashburn. “Also, it doesn’t have the traditional teller lines. It is a hybrid of a pod-type system. It is a little more open, and you can enter it from a lot of different locations and spend time in there just sipping coffee.”

In addition to the charging stations the branch has mini televisions with a seating area for informal conversations or meetings, which Mashburn says is the students’ favorite feature of the new branch.

“They love having a place to congregate, a place that is comfortable and that feels warm to them. The area that we put together is a little more special,” said Mashburn.

Listerhill also added a Smart ATM for this branch and its technologically savvy members who traditionally keep later hours than the nineto-five crowd. After hours, the new-to-market, sleekly-designed NCR ATM can assist students by accepting deposits or making withdrawals, allowing the open design branch to truly always be open.

Listerhill also changed the way the branch measures its success.

“As far as a profitability model goes for something like this, we are really just investing in the future of these students. We are not in a situation where we can incur a lot of income from being there, but when you measure success for a branch like that you definitely measure it a different way than you might for another branch,” explains Mashburn.

“It is mostly for looking toward the future and getting that opportunity to live out the credit union mission of helping out members. Some people, especially students, might not be willing to go into a branch that seems overwhelming or too stuffy. This way, we have a more open design where they are used to coming in just to hang out with friends. We can promote a more casual atmosphere where they can feel comfortable having those conversations. We can really dig into what is important for them as they go through their lives with their expenses and income and all those things.”

When it comes to using this branch as a design model for other branches, Mashburn believes that Listerhill can use some of the elements of The Hill branch, but she is also aware that branch design is not a one-size-fits-all.

“I think elements we can take away, but again we are really trying to be aware of who our user is, and we want to be able to match whatever that is. All of our markets aren’t always students, so we just want to make sure that everyone is comfortable in their own branch.“

Tyndall Federal Credit Union A little earlier, in November of last year, Tyndall Federal Credit Union, based out of Panama City, FL, opened a second branch in Dothan, AL. This branch is the first Tyndall branch to feature interactive technology.

Tyndall calls the interactive technology in this branch the Discovery Zone. The Discovery Zone is a section of the branch that contains interactive member-facing tools, such as imbedded iPads and a large touch screen television wall. Members can use the iPads and touchscreen to learn about Tyndall’s products and services, as well as engage in education components. The iPads and touchscreen wall have navigation for products and services, loans, an ATM locator search, and a variety of other capabilities.

Not only is this technology helpful for members, the credit union has taken it a step further by making the technology itself membercentric and getting into the minds of their members, rather than forcing the members to get into the mindset of a financial institution.

“What we are excited about is that we’ve begun at Tyndall to break the banking paradigm, if you will, of the different silos. We are all so accustomed to having navigation about our

This image portrays the interactive wall and tablets at Tyndall’s branch that introduce members to the credit union products, provide product and service pairings, and instruct members on how to use the self-service tools.

loans, our products, our locations. What we are doing with these iPads and this touchscreen wall is beginning to think about it like a member would think about it,” said Tyndall Federal Credit Union VP and Chief Marketing Officer Katy Mackay.

“Think about your billfold or wallet. In your billfold you have all of your everyday banking solutions. So part of those have to do with your deposit products. You might have a checkbook in there, you might have a debit card … things that relate to your deposit account. But you also have a credit card in your billfold and, typically,

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BRANCH DESIGN, continued

credit unions would put that over in our loan silo. So what we are trying to do with our new navigation is to think about it in the same way a member thinks about it. When you go up to our wall or one of our iPads and touch everyday banking solutions, it drills into the solutions that you already have in your billfold—that you run your everyday banking life with—and it presents them as a package of products or menu of solutions,” explained Mackay.

In addition to the Discovery Zone, the branch staff is also member-focused. This branch is staffed with “universal employees,” so the staff member who greets you at the door will guide you through your entire experience at the branch. For example, if you want to deposit a check, the same employee that greeted you at the door will take you to the branch teller tower and deposit your check for you. If you then want to discuss getting a mortgage loan, that same employee will take you into one of the parameter offices and discuss mortgage loans with you. If you wish to discuss something that is outside of your universal employee’s knowledge, the employee will take you into a branch video room and dial in a specialist from a different location, so

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you can have a discussion with a specialist.

This way Tyndall avoids handing members off between different employees.

Mackay explains that they have implemented the “universal employee” approach to keep the member as the center of the conversation.

In fact, even the parameter offices are designed with the member’s experience in mind. The offices come in three different sizes: small, medium, and large. If you are by yourself, you would go to a small office.

If you were with a spouse, you would go to a medium office. And if you were with your whole family, naturally, you would have a large office to accommodate your clan.

And when you get into that office, rather than sitting across from you, you universal employee will be sitting side-by-side with you, using the monitor to go over anything you need to know.

“The entire environment has been set up to be very member-centric with the member at the center of the conversation. And then the building and the tools in the building help facilitate what the member wants to accomplish,” said Mackay.

The response to the branch has been positive from members and staff alike.

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Mackay said that Tyndall employees in Dothan no longer want to work at the old branch and instead are clamoring for hours at the new branch. She says that Tyndall employees enjoy how the technology at the new branch facilitates the conversation with a member.

Tyndall is also using this branch to learn from and begin to see how they can apply the technology to their existing branch networks.

So, as Listerhill and Tyndall show, no longer is a branch design just surface deep – selecting the color of the walls, providing comfortable chairs, or even getting new phones. Branch design goes deeper and begins with the heart of the branch - its members. Now, more than ever, it is important for credit unions to use the opportunity of a branch design to get into the minds of their members and think about how everything, including location, staff, layout, and technology, can best serve members giving them the most personalized experience possible.

ADVOCACY

Record-Breaking Year for LSCU PACs

By Blake Westbrook, political affairs manager – Alabama, and Andy Gonzalez, political affairs manager – Florida, LSCU In 2014, LSCU had a record-breaking year for its state and federal political action committees (PAC). For the first time in five years, Alabama and Florida credit unions reached 100 percent of their state and federal PAC goals. Since 2011, both states have seen a steady increase in the amount of money raised and continue to find new and innovative ways of approaching PAC fundraising.

In Alabama, Guardian Credit Union raised more than $2,500 for the LSCU FEDPAC through payroll deduction, an increase of more than $500 from 2013. Guardian not only educated its current staff on the importance of PAC fundraising, but also now includes PAC education during new employment orientation. Guardian Credit Union also uses incentives such as Jeans Friday for PAC contributors.

Guardian Credit Union CEO Heath Harrell commented, “We felt that it was important that our staff is educated on the value

In Alabama, Guardian Credit Union raised more than $2,500 for the LSCU FEDPAC through payroll deduction, an increase of more than $500 from 2013.

of political advocacy. When someone on our staff gives to the PAC, they know that they are making an investment in the credit union movement.”

In Florida, Member’s First Credit Union raised more than $4,500 for the LSCU FEDPAC and, also, reached 100 percent of their CUPAC goal. The credit union participated in Jeans Days, candy bar sales in their branches, and the PAC Pin Program to exceed their goal by more than $3,000.

Member’s First Credit Union CEO Caryl Greene commented, “Public policy decisions that elected officials make have a major impact on the credit union community. Our board and employees know that by contributing to the PACs, they are helping the credit union industry collectively advocate a better operating environment.”

If your credit union would like to get involved in PAC fundraising, contact LSCU Political Affairs Managers Blake Westbrook (Alabama) or Andy Gonzalez (Florida) for further information. Contact information is listed in the LSCU Staff Directory in the back of this magazine.

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ADVOCACY

Tax Reform Discussions Begin Anew as Congress Eyes 2015 Agenda Some call 2014 a “dress rehearsal” for bill next year

By John McKechnie, LSCU contract lobbyist

Both incoming chairmen of congressional tax writing committees laid out their vision for the scope of possible tax reform legislation in the 114th Congress, voicing differences while at the same time reiterating that an overhaul of the tax code will be a high priority out of the gate in 2015.

New House Ways and Means Committee Chairman Paul Ryan (R-WI) pointed to business-only tax reform as the most likely, and achievable, approach, telling a Wall Street Journal Conference in early December that, while not his first choice, focusing on businesses will be better than no reform at all.

“If we can get halfway towards comprehensive tax reform, I think that’s great,” Ryan commented. “It is going to happen, the question is when… 2015 or 2017?” Ryan said.

The Wisconsin Republican also said that the draft tax reform bill issued in February by his predecessor, Congressman Dave Camp (RMI) is a “marker, but not necessarily a starting point,” and suggested

Senior congressional staff observe that this year’s lame duck battle over tax extenders (the expiring provisions in the tax code that are periodically revisited by Congress) give reason for both optimism and pessimism about the future prospects for tax reform. that flaws in the current congressional system fail to account for economic growth resulting from changes in the tax code.

“That outdated system made it impossible for Chairman Camp to write a perfect—or even a viable—tax bill,” said Ryan.

The Camp draft notably did not touch the credit union tax exemption after months of urging from the credit union community to leave the exemption intact.

While agreeing with Ryan that tax reform will be at the top of the agenda next year, new Senate Finance Chairman Orrin Hatch (R-UT) was dismissive of an effort that does not include overhauling the individual side of the tax code.

“If we focus only on reforming the corporate tax code, we’d be leaving the majority of U.S. businesses — particularly small businesses, which employ most of our workforce — behind,” Hatch stated. “That, for me, is simply unacceptable. Now, I’ll acknowledge that, politically speaking, corporate-only tax reform might be an easier lift. But, even if it is politically expedient, it is not the right answer.”

For its part, the Obama Administration has been pushing a business-only tax reform plan for several years, one that would lower the top corporate rate from 35 percent to 28 percent while eliminating certain exemptions in an attempt to broaden the tax base. During the same week that the Congressional Republican tax heads made their comments, President Barack Obama told the Business Roundtable that a deal on tax reform could occur if it moved quickly and was marked by unity from the business community and

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both political parties. “A compromise is possible, but the politics of 2016 means we need to get to work in 2015.”

Senior congressional staff observe that this year’s lame duck battle over tax extenders (the expiring provisions in the tax code that are periodically revisited by Congress) give reason for both optimism and pessimism about the future prospects for tax reform.

“There was a bipartisan deal in place before Thanksgiving...even though it fell apart because the White House and Democratic leader Harry Reid had differences, it showed that something is possible,” said a senior Senate Republican tax staffer.

Other Hill staff called the extender debate a “dress rehearsal” for tax reform in the next Congress. Others differ.

“Philosophical differences, and the 2016 presidential politics that are already heating up, make me doubt anyone blinks first,” commented a former Democratic aide who worked for the Senate Finance Committee under Chairman Max Baucus (D-MT). “It may take another presidential election to give tax reform momentum.”

In separate, but related, developments, retiring Sen.Tom Coburn (R-OK) in early December issued a blistering attack on the credit union tax exemption in a white paper on what he called “tax giveaways.” In a 300-page report that covered a wide variety of exemptions and other aspects of the tax code, the senator devoted

several pages to criticism of rationale for the credit union tax exemption. Coburn, a member of the Senate Banking Committee, also took aim at credit union membership eligibility (he said the common bond had been “eviscerated” by Congress) and other consumer-friendly activities engaged in by credit unions as they serve their members.

Additionally, Senate Finance Committee Republicans released a 350-page report on the recent history of tax reform, as well as possible topics for future tax legislation. Committee staff describe the report as “setting the parameters of what might be under discussion” if a tax reform package takes shape in the next Congress.

Credit unions laid the groundwork for an aggressive defense of the tax exemption in the 113th Congress; their active grassroots, combined with targeted inside-the-beltway lobbying made Congress aware of the value of maintaining the exemption in any reform legislation. But the page is about to turn in 2015. In addition to new leadership on tax-writing committees in both chambers, there will be 58 freshman House members and 12 freshman senators to educate about the credit union difference. That reality, combined with the possibility of another “start from scratch” approach to drafting a reform package, means a return to heightened vigilance on the credit union tax exemption in the 114th Congress.

ADVOCACY

2015 Alabama Legislative Session Preview

By Jason Cochran, senior director, governmental affairs (Alabama), LSCU The 2015 Legislative Session began a month ago. This is the first year in a fouryear term that saw the Republican majority grow stronger after the recent elections in November. Both the House and Senate Republican caucuses are stronger in numbers and they see this as a mandate from the Alabama citizenry to continue the policies started four years ago.

There were not many pre-filed pieces of legislation this year, so the majority of the speculation on what the agenda will be leading into the session was dominated by the press, and, to date, they have been fairly accurate.

This year is a fight between continuing the downsizing of state government versus raising revenue. Gov. Bentley took a dramatic turn from his previous four years in office when he announced that he would be proposing tax increases. Many in the Republican leadership are wary of the proposal and see the need for revenue as a call to continue to “rightsize” government. While the debate has not been settled, credit unions have a great deal to be worried about. As we have seen in Washington D.C., there is a call for tax reform and a call for additional revenue in Montgomery, AL and there are people in the state who see credit unions as a source for that revenue. The League’s number one priority this year is to maintain the credit union tax exemption and to not be included in any plan to fix the state’s ailing budgetary issues.

Credit unions provide an exceptional benefit to their members and a tax on credit unions is a tax on two million people in this state. We have and will continue to educate legislators in Montgomery about

One piece of legislation that is of great importance to credit unions and all financial institutions is a bill to increase data security standards in Alabama. Alabama is only one of three states in the country that does not have any laws, rules, or procedures dealing with the protection of citizens when their financial information has been stolen by a third party.

the repercussions of any tax on credit unions and the financial impact it will have on Alabamians.

One piece of legislation that is of great importance to credit unions and all financial institutions is a bill to increase data security standards in Alabama. Alabama is only one of three states in the country that does not have any laws, rules, or procedures dealing with the protection of citizens when their financial information has been stolen by a third party. Legislation introduced this year does just that and also protects credit unions’ financial assets if merchants do not follow the procedures set forth. Public deposits and the ability for credit unions to become public depositories remain a top priority for the League. We continue to work on this legislation and are making headway with lawmakers on this issue. This is still a fight with the bankers and it is important for us to weigh risks and rewards when taxes are in the spotlight, but the ability for credit unions to accept public deposits is an important debate especially when so many public entities are looking to get the most out of their money.

As many of you will recall, the LSCU & Affiliates was able to pass a much needed update to the Alabama Credit Union Act in 2014. Since the end of that session, we have been working with the Alabama Credit Union Administration on additional updates to the act that are needed by credit unions and the administration. While these talks have been extremely productive and are continuing, seeing a new piece of legislation updating the act is highly unlikely this year.

The primary reason for this is with the tax fight that is going on in the legislature, it is very important not to open up our code and leave ourselves vulnerable until after any and all taxation threats are gone.

Until that time, we are working with the administration on these new updates and hopefully will have legislation in the future.

There will always be other pieces of legislation that will impact credit unions either positively or negatively. Right of redemption legislation, financial literacy and others are certainly a possibility for 2015. The League plans to support and actively lobby on behalf of credit unions whenever these may arise. Look for weekly updates in e-Signal and be ready and available to contact your representative or senator on credit union issues.

If you have any questions or concerns, contact LSCU Senior Director, Governmental Affairs Jason Cochran at 866.231.0545, ext.

2159 or any of the governmental affairs team.

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ADVOCACY

2015 Florida Legislative Session Preview

By Jennifer Martin, director, governmental affairs (Florida), LSCU Florida’s 2015 Legislative Session convened on March 3, 2015, though lawmakers first gathered in November of 2014 for an organizational session followed by committee weeks in December, January, and February.

After an election season that saw several incumbents unseated and a handful of former legislators returning to Tallahassee, the Republicans remained in control of the state legislature, gaining a supermajority in the House.

The League’s top priority this year is continuing to advocate for legislation that would allow credit unions to become qualified public depositories.

Last year the strategic decision was made to take a year off of filing a proactive bill, but the League’s governmental affairs team worked with the speaker’s office to request a study on the issue from the Office of Program Policy Analysis and Government Accountability. The report came back in late fall with fairly neutral findings, although the underlying message was that competition is a good thing and credit unions could offer municipalities another option when it comes to financial institutions. Sen. Garcia (R – Hialeah) and Rep. Bill Hager (R – Boca Raton) have once again filed bills allowing credit unions to apply to the QPD program and will champion the issue.

Financial literacy is another top legislative initiative for the League, and a bill requiring high school students to take a half credit in personal finance has been filed by the 2014 sponsors, Sen. Dorothy Hukill (R – Port Orange) and Rep. Heather Fitzenhagen (R – Fort Myers). Currently, high school students in Florida may take a personal financial literacy class as an elective, but they are not required to take a course in this subject to graduate. Other issues the League will be advocating for include reimbursement for data breach losses, patent troll reform, and preserving the credit union tax exemption.

Following a tradition established by their predecessors, Senate President Andy Gardiner and House Speaker Steve Crisafulli have outlined their list of joint priorities for the upcoming legislative session. Here are some of the major issues on Florida lawmaker’s 2015 legislative agenda:

Tax Relief Reduce the burden government places on Florida’s families and businesses through broad-based, meaningful tax relief initiatives.

Economic Independence for People with Unique Abilities Support the path to economic independence for people with unique abilities by establishing new postsecondary designation for programs serving students with disabilities; expanding policy guidelines and increasing funding for Personal Learning Scholarship Accounts; promoting employment options for persons with developmental disabilities; creating financial literacy programs designed specifically to help people with developmental disabilities participate in the economy independently; planning for implementation of the Achieving Better Life Experience (ABLE) program in Florida; and, establishing a “Unique Abilities Designation” program for Florida businesses who hire workers with disabilities.

Water and Natural Resources Develop a sustainable, statewide funding and policy strategy for water and natural resources while implementing Amendment 1.

Adoptions Promote adoptions and support forever families by restoring the adoption subsidy program for state and local government employees; codifying a family recognition program; and, creating an incentive program for Community Based Care and provider agencies.

Education Elevating Florida’s investment in K-12 and higher education by increasing K-12 per student funding; keeping higher education affordable; increasing performance funding for universities; supporting Gov. Scott’s initiative to reward technical centers that directly link education programs to local workforce needs; and, increasing opportunities for students to get on-the-job training in high-skill, high-wage areas through apprenticeship programs.

If you have any questions on any of the legislative issues mentioned above, contact LSCU Director, Governmental Affairs, Jennifer Martin, 866.231.0545 ext. 1150.

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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 115 credit unions in Alabama and Florida contributed in 2014.

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. Add a contribution to your credit union’s dues amount. The “fair share” amount is listed on the dues invoice mailed in November. It is up to you how much you contribute.

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

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

• 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.

ADVOCACY

Regulatory Highlight: NCUA Supervisory Priorities

By Bill Berg, MBA, CCUE, CUCE, BSACS, vice president, compliance training & information, governmental affairs, LSCU

For many years, the National Credit Union Administration (NCUA) has published their supervisory priorities.

This early publication of those priorities allows smart credit union executives to ramp up their compliance efforts in those areas prior to being told to ramp up those efforts during their exam. This year’s letter is 15-CU-01. Following are highlights from this letter.

Cybersecurity It seems that almost every day, we are hearing about another data breach. The question is not if a breach will happen to you, but when. NCUA field staff will focus on proactive measures credit unions can take to protect their data and their members, including: ■ Encrypting sensitive data ■ Developing a comprehensive information security policy ■ Performing due diligence over third parties that handle credit union data ■ Monitoring cybersecurity risk exposure ■ Monitoring transactions ■ Testing security measures Recently, at the NASCUS Director’s College in Lake Mary, a Cisco systems expert described what happened during the Target breach. Basically, the bad guys got inside the system and gave themselves administrative authority. The “good” administrators should have questioned why a new person now has admin authority, but, apparently they were either not looking at or running those reports. You must know everyone who has

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administrative authority on your system, get a report whenever someone is added with administrative authority, and then check it out.

Credit union officials are also encouraged to review the online cybersecurity resources posted by NCUA (www.ncua.gov/Resources/ Pages/cyber-security-resources.aspx) and the FFIEC’s Cybersecurity and Critical Infrastructure Working Group (www.ffiec.gov/ cybersecurity.htm) to promote cybersecurity throughout the financial services industry.

Interest Rate Risk For years and now in 2015, examiners have been concerned about interest rate risk (IRR) and have either strongly recommended or insisted that credit unions keep their balance sheets short due to their expectation that short-term interest rates will rise. This resulted in many credit unions having smaller earnings. This would not have happened if they had adopted a laddered approach to their investments out in the five to seven year range. Even at seven years, average maturity is 3.5 years (not much longer than a car loan). You need and want to find the sweet spot in the yield curve. As of Feb. 17, 2015, the yield for U.S. Treasuries two years was a paltry 0.02; five years was 0.70; and seven years was 1.62.

Going from two years to five years gets you 35 times the yield. Going from two years to seven years gets you 81 times the yield.

A couple of things to consider when interest rates go up are: 1) what is going on in the world’s economies and 2) energy.

The U.S. economy continues to grow at a rate that is the envy of most of the world.

For instance, unemployment in Spain is

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more than 20 percent, while the current U.S. rate is 5.6 percent; China is slowing down significantly; Japan is in a recession; Russia is going into a recession; and although the Eurozone has avoided a triple dip recession, our largest trading partner is having very slow growth (0.02 percent). Additionally, the Eurozone is now cranking up quantitative easing (QE) in Europe at a rate that is almost identical to what the Federal Reserve did for the U.S. economy. Of course, the Fed ended QE for the U.S. economy in October 2014.

Furthermore, by keeping the short term rate at near zero, the Fed, is helping to lower the federal budget deficit since this keeps interest on the total debt lower than it otherwise would be.

Energy. Even with all of the recent cuts in future production in the U.S. and elsewhere, there is still an oversupply of oil vs. demand at the global level. Lower gas prices have helped consumers have more money to spend, and they are doing it. Consumer spending is roughly 70 percent of Gross Domestic Product (GDP) so this should help push our economy along.

All this taken together, it would be no surprise if the Fed keeps short term rates low for longer than most economists are predicting. Additionally when they do start to raise rates, I believe it will be a slow, measured increase in rates.

Expect examiners to evaluate credit unions’ compliance with NCUA’s Interest Rate Risk Rule, which requires credit unions with assets more than $50 million to draft and implement a written IRR policy and develop a program to identify, measure, monitor, and control IRR. NCUA’s IRR guidance and rule

requirements are posted on the Interest Rate Risk Resources webpage (www.ncua. gov/Resources/Pages/interest-rate-riskresources.aspx).

Bank Secrecy Act Compliance NCUA examiners are required to review credit unions’ compliance with BSA and to complete the BSA questionnaire at every examination. In 2015, NCUA field staff will continue to assess credit unions’ compliance with the Bank Secrecy Act, with a focus on credit unions’ relationships with money services businesses (MSBs). Regulators hate MSBs. I recommend that you do not do MSBs because the compliance burden is so great.

For compliance information and additional resources, see the Bank Secrecy Act page on NCUA’s website (www.ncua. gov/Legal/BSA/Pages/default.aspx) and the December 2014 Letter to Federally Insured Credit Unions on Identifying and Mitigating Risks of Money Service Businesses (www. ncua.gov/Resources/CUs/Pages/LCU201410.aspx).

Liquidity and Contingency Funding Plans Rule NCUA’s liquidity rule became effective in March 2014 and is intended to ensure that all credit unions conduct sound liquidity planning. Depending on asset size, credit unions are subject to different requirements under the rule, and field staff will be looking for full compliance with relevant provisions in 2015.

Compliance guidance is detailed in the October 2013 Letter to Federally Insured Credit Unions on Liquidity and Contingency Funding Plans (www.ncua.gov/Resources/ Documents/LCU2013-10.pdf).

For example, credit unions with assets of $250 million or more are required to establish and document access to at least one contingent federal liquidity source—the Federal Reserve Discount Window, the

Central Liquidity Facility, or both—for use in times of financial emergency or distressed economic circumstances. These credit unions must also conduct advance planning and periodic testing to ensure that contingent funding sources are readily available when needed. Compliance with this provision of the rule was required by Dec. 31, 2014.

TILA-RESPA Integrated Disclosure Rule On Aug. 1, 2015, credit unions that originate residential mortgages will be required to comply with the Consumer Financial Protection Bureau’s (CFPB’s) TILA-RESPA Integrated Disclosure Rule (www.consumerfinance.gov/regulatoryimplementation/tila-respa/). The rule requires loan originators to provide consumers with a: ■ Loan estimate form - combines the initial Truth in Lending Act (TILA) disclosure and the Good Faith Estimate. The loan estimate form must be delivered or placed in the mail no later than the third business day after receiving a consumer’s mortgage application.

■ Closing disclosure form - combines the final TILA disclosure and the HUD-1 Settlement Statement. The closing disclosure form must be provided to the consumer at least three business days prior to consummation of the mortgage.

If your credit union offers real estate lending and your exam occurs after Aug. 1, expect close scrutiny from your examiners.

Ability-to-Repay and Qualified Mortgage Standards Rule Credit unions have had a full year to come into compliance with the CFPB’s mortgage rule that: ■ Requires certain mortgage lenders to consider eight specific factors to assess a borrower’s ability to repay a loan ■ Provides certain legal protections to loans that meet the ability-to-repay

requirement and other underwriting criteria (i.e., “Qualified Mortgages”) In 2015, field staff will be looking at credit unions’ compliance with the required provisions and ensuring that their mortgage lending programs are being operated in a safe and sound manner.

For a summary of CFPB’s mortgage rule and compliance guidance, see NCUA’s January 2014 Letter to Federally Insured Credit Unions on CFPB’s Ability-to-Repay and Qualified Mortgage Rule (www.ncua.gov/ Resources/Pages/LCU2014-01.aspx).

Small Credit Union Exam Program Each year, NCUA looks for opportunities to reallocate staff time and resources in order to make the examination process more efficient and effective. In 2015, NCUA’s Small Credit Union Examination Program (SCUEP) will employ a defined-scope exam approach that focuses staff attention on the primary areas of risk for small credit unions: internal controls, recordkeeping, and lending.

According to the two credit unions that have received the streamlined exams, the exams go into significantly greater depth than previous exams and are not necessarily streamlined.

Lending Programs NCUA continues to monitor trends in credit unions’ loan portfolios. Credit unions have begun to offer new loan products and services in recent years. While these areas can offer opportunities to serve members and expand loan portfolios, credit unions should perform adequate due diligence and properly manage risk.

For guidance on specialized lending— including indirect lending, third-party lending, and subprime lending—see the August 2010 Letter to Federally Insured Credit Unions on Appropriate Due Diligence (www. ncua.gov/Resources/Documents/LCU201015.pdf).

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LSCU Legislator Profile

Congressman Gary Palmer In 2014, Gary Palmer was elected to the 114th Congress to represent Alabama’s 6th District having never served in office before. Palmer serves on the Oversight and Government Reform Committee and also serves on the Budget Committee, as well as the Space, Science, and Technology Committee and is the representative for Alabama, Georgia, and South Carolina on the Republican Policy Committee. Before being elected into office, Palmer served on four different state commissions on behalf of three different governors. He was appointed to the Welfare Reform Commission by Gov. Fob James. He also served as an advisor to Gov. James’ Aerospace, Science, and Technology Task Force. He was appointed to the Task Force to Strengthen Alabama Families

by Gov. Bob Riley, and the Alabama Commission on Improving State Government by Gov. Robert Bentley.

How and why did you become interested in public service and politics in particular; and what initially led you to run for Congress?

You learn a lot from a lot of smart people when you run a think-tank for 24 years. You develop a lot of ideas about ways to improve the lives of everyday Alabamians and everyday Americans. So when the seat became open, the possibility of putting those ideas into practice certainly appealed to me.

That being said, after thinking about it for a while, I actually decided not to run. I even told some of my associates at the Alabama Policy Institute that I wasn’t going to run. I went home that evening and told my wife, Ann, expecting her to be relieved. Instead, she challenged me, saying that for years I’d said one of the biggest problems with the country is that you couldn’t get good people to run. She asked me how could I expect someone else to run if I wouldn’t? In the end, it was something we both felt called to do.

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As you begin your first term in the House of Representatives, what are the most important issues that need to be addressed by Congress? What are your specific priorities?

We need to restore constitutional governance. Congress has refused to stand up for itself in too many ways, and we face a constitutional crisis with President Obama’s unconstitutional use of executive orders. The focus has been on immigration, but that is really not the issue. It’s about the separation of powers. I believe the president, Congress, and the courts should have the power given to them by the constitution and not one bit more. To me, this is not just a matter of politics, but of upholding my oath to uphold and defend the Constitution.

I asked to be on the Budget Committee because we have to get our fiscal house in order. Our national debt has nearly doubled in just the past six years to more than $18 trillion. That’s more than an $8 trillion dollar increase in just six years. What’s even worse is that many of our longterm liabilities, like Social Security and Medicare, are not accounted for. This means that the national debt is really far worse than it looks on paper. I realize these problems

will not be fixed overnight, but we need to be moving in the right direction.

I am also pleased about my assignment on the Science, Space, and Technology Committee, which has jurisdiction over a lot of issues that are important to Alabama. Research facilities at the University of Alabama at Birmingham, the Southern Research Institute, and NASA are all important institutions that fall under the jurisdiction of the committee.

The committee also has oversight jurisdiction over some aspects of the EPA, which I believe is an agency that needs to be reined in.

Finally, we need to fight corruption in government.

There have been far too many scandals and obvious bad actions—from the IRS targeting scandal to the continual lack of transparency throughout this administration—that give people the idea that the government is run by and for the government and the elite, not the people. This must change. I intend to work for such change as part of the Oversight and Government Reform Committee.

Much has been said about the inactivity of Washington D.C., now that Republicans have a majority in both the House and Senate, do you see that changing and how?

The idea is not to get government to do more in terms of legislative activity and passing bills. Our focus should be on passing the right legislation. We should be looking at the long-term impact of what we do and how it affects everyone and not just a few special interests.

Credit unions are seeing an alarming increase in regulatory burden throughout Alabama and across the nation. What do you feel is Congress’ role in helping alleviate the regulatory burden and decrease the amount of red tape credit unions see on a daily basis? Is there a way to decrease regulatory burden in the near future?

I’m a big supporter of the REINS Act which would require both houses of Congress to vote and pass regulations with an economic impact of $100 million or more. In 2015, regulations are estimated to cost the American economy nearly $1.9 trillion. The REINS Act

would shed light on the regulatory process and make clear that it is Congress that possesses the sole legislative authority.

Congress should not be able to shift its responsibilities to administrative agencies.

Too often, the easy path has been taken where Congress passes vague bills and lets administrators use regulations to sort out the details to minimize political accountability.

That’s the exact opposite of the way it should be.

We also need increased oversight of what the administrative branch is doing and to hold them accountable as much as possible. Every effort should be made to ensure the regulatory process is transparent, fair, and not controlled by special interests.

For example, there have been some egregious examples recently at the EPA where regulations were created with essentially no input from any of the industries they regulate, only from activist groups.

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?

Particularly in the modern day, where it is so much easier to give your input to your elected representatives, grassroots advocacy is very important in the legislative process. Email or call your congressman and let us know what you think. Be respectful and clear and state your position. You can be critical when necessary, but always be courteous. It is also important to complement a member of Congress when it is appropriate. Encouragement and kindness are always greatly appreciated. Finally, express your views in and through your local media. People are always interested in what other people think.

Is there anything else you would like for Alabama’s credit unions to know about yourself or legislative initiatives you are involved in?

I believe credit unions will benefit from the basic policies I advocate: low taxes, less intrusive regulations, and a government that doesn’t pick winners and losers based on politics.

In terms of how I conduct myself, I follow three simple rules that are really reflective of my values: One, be honest with everybody; two, don’t surprise anybody, that is, be clear about who you are and what you stand for; and three, do what you say you will do. ■

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LSCU Legislator Profile

Representative Bill Hager Bill Hager is a 20-year resident of House District 89. Before being elected to the House, he served three terms on the Boca Raton City Council. He has a proven track record as a job creator in the community and knows firsthand what it is like to meet a payroll and balance a budget. It is with this unique business acumen that Bill Hager has been successful in reducing burdensome regulations on small business owners, cutting taxes, and creating an environment friendly to entrepreneurs across the state.

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

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

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As the 2015 Legislative Session begins, what do you feel are the biggest issues facing the Legislature this year and what do you think the Legislature needs to accomplish during the 60-day session?

Our first priority is the continuation of Florida’s intense financial discipline. Both the Florida Legislature and Gov. Scott have shown themselves to be extremely careful with the tax dollars of hard working Floridians, and we need to continue to be prudent and to carefully balance the budget.

Secondly, we need to continue to create jobs and working opportunities for everyday Floridians so that people, who have shown they want to work, can work. We have great workers here in Florida. The pathway to that is very simple: to create an environment in which those who create jobs can thrive. We must enact policy that attracts and sustains those who create jobs such as entrepreneurs and businesses. We need to do all in our power to attract them through low taxes and an optimum environment in which they can create those jobs.

You have filed HB 907 which would give credit unions the ability to become qualified public depositories.

What were your thoughts behind filing this bill and why is it an important issue to you?

I support and sponsored this bill for a series of reasons, the primary reason being that I believe in financial competition in all things and in particular with respect to government’s own money. I am a staunch advocate of a free market system. Government should not be choosing winners and losers, particularly when it comes to how municipalities choose to direct their funds. HB 907 sets forth policy that will stimulate intense competition to attract and hold government deposits. In addition, it is clear that the financial standing of credit unions is on par with that of banks, and they are a worthy competitive institution that ought to rightfully be seeking out public deposits.

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

I see the credit unions as a vital component of the financial services industry. Credit unions are often seen by regular Floridians as close and accessible to them with fair interest rates. I see credit unions continuing to stabilize the financial market in Florida, making financial facilities available to Floridians, as well as continuing their traditional role in the market.

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

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

Rep. Hager believes it is clear that the financial standing of credit unions is on par with that of banks, and they are a worthy competitive institution that ought to rightfully be seeking out public deposits.

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

The team is outstanding, shows incredible competence, experience, and commitment to advocating for Florida’s credit unions. They have been some of my biggest supporters, and I appreciate everything they bring to the legislative process. ■

“I have had a series of outstanding and unlimited opportunities as an American and part of my responsibility is to contribute to this great state and great nation. The easiest way for me to do that is by participating in the Florida Legislature...”

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INITIATIVES

Helping to Make Young Money Masters The LSCU Guide to Capturing Youth Members through Financial Education

By Juli Lewis, member relations consultant, LSCU

The League of Southeastern Credit Unions & Affiliates has placed financial education as a top priority for 2015.

“Recognizing the linkage between financial literacy and student success, the LSCU has begun a grassroots campaign to increase financial education and to provide credit unions the resources they need to implement financial education programs,” said Laura Vann, LSCU VP, cooperative initiatives. “We now have the expertise in place to deliver financial education resources appropriate for credit unions of all sizes.”

In a 2013 study conducted by the National Foundation for Credit Counseling, 40 percent of American adults would grade themselves a C, D, or F for their knowledge of personal finance, making the need for youth to be taught financial education more important than ever.

“While most parents say they are talking to their children about finance it is likely that many are not providing good money management advice. That is what has prompted the League to step up and champion this cause,” Vann said.

The grassroots awareness campaign for financial education will consist of public relations, marketing, and outreach components. The League will work to increase the reach and frequency of financial literacy messaging through a

variety of media outlets to reach a diverse range of audiences, including consumers, credit unions, and lawmakers. Anyone interested in helping to spread this message is encouraged to contact Juli Lewis (juli. lewis@lscu.coop). The League is developing networks of advocates, partners, and community leaders for this campaign. The goal is for lawmakers to pass a bill which will require financial education to be mandatory for high school students to be eligible to graduate. Several states, including Alabama, have already made financial literacy a requirement and the hope is for Florida to be next.

With financial education as a top priority, the League is working with credit unions to target youth, provide financial education, and offer the credit union difference. There are a wide variety of ways to spread financial education, some requiring only a minimal time and money commitment. Credit unions of all asset sizes are encouraged to join in on this campaign and to reach out to the League to see how they can become involved.

Credit unions are encouraged to report details on their financial education programs to the National Youth Involvement Board, www.nyib.org. The NYIB is a credit union organization focusing on financial education and the information reported through their data collection system can be utilized as we report on financial education activities to local, state, and national lawmakers.

In the 2013-2014 schools year, credit

The grassroots awareness campaign for financial education will consist of public relations, marketing, and outreach components.

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unions in Florida reported reaching 20,876 students and giving 322 financial education presentations. Only four Florida credit unions and no Alabama credit unions reported their financial education programs for youth.

“We know credit unions are implementing many, many more programs than what is reported,” said Vann. “We cannot emphasize enough the importance of utilizing the NYIB data collection system so that we can have valid data to share with lawmakers.”

Although student-run branch data cannot be included as youth financial education programs, they are an outstanding way to focus attention on savings and build longterm relationships. Student-run branches offer youth a hands-on experience while providing peers and staff members access to financial services and exposure to credit unions. These branches can be set up with a very simple approach which is extremely cost effective for credit unions, easy to implement, and can be done with any age level. At the present time, 12 credit unions in Alabama and Florida are supporting 75 student-run branches. Of the reported student-run branches, 51 are at high schools, two are at middle schools, and 22 are at elementary schools. It is anticipated that the number of branches at elementary schools will continue to grow as credit unions are learning that engaging students at the elementary school age gets the students excited about saving, gets them in the habit of saving, gets the parents involved, and builds lasting credit union relationships.

The League also offers training on financial education programs such as Biz Kids, a program focusing on financial and entrepreneurial skills and Financial Football, a fast-paced interactive game

that helps teach money management skills one touchdown at a time. The curriculum and incentives are developed to first get students interested in saving and eventually to get them into the habit of saving. At the elementary school level, credit unions can relay this information through interactive story-telling. The League can assist with a number of recommended books and activities to go along with each one. As they get older, students can participate in Mad City Money, a reality fair where students are given a paycheck along with various obligations. They are then required to make decisions on purchases while trying not to go broke! Several credit unions in Alabama and Florida are effectively implementing reality fairs and are willing to share their experiences with other credit unions.

Educational workshops are another great

way to reach youth and young adults. The National Endowment for Financial Education (www.nefe.org) offers free materials on subjects ranging from money management to identity theft. “The Cooperative Initiatives

make it interactive in order to keep them engaged, and make it fun. Yes, financial education can be fun! Instead of holding a college workshop in a classroom, have it in the common area of their dorm where

Several credit unions in Alabama and Florida are effectively implementing reality fairs and are willing to share their experiences with other credit unions. team is available to train credit unions to be able to deliver the NEFE curriculum or to assist in building customized programs that fit any audience,” said Vann.

When delivering financial education programs, the main point to remember is to know your demographic so that you can make your presentation relatable to them,

they are comfortable…and bring pizza. The League can even help you incorporate quick games into the workshops which require very little time or materials.

Also remember that financial education exists beyond the classroom and beyond the school year. If schools are not within your field of membership, summer programs, church youth groups, and boys and girls clubs are always looking for valuable ways to enrich the lives of their youth. Partnering with groups is a great way to spread credit union awareness and to make a difference in your community. Family day events can even be held within your membership group.

At a minimum, financial education can be offered online for members of your credit union. It is just one more way that credit unions show the difference by offering a hand UP rather than a hand out.

The League is striving to make a difference in 2015 and in upcoming years in regards to financial education and is looking for ways to help our credit unions reach more and more youth in order to make a positive impact on these young leaders of tomorrow. By teaming up with the League, local schools, youth agencies, communities, and parents, the efforts of credit unions will continue to grow each year. We value these relationships and hold our youth outreach in high priority. It’s not easy to grow up in a financially unstable world. By making this mission a top priority we can count on the financial success of tomorrow.

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EDUCATION

SRCUS: The Ultimate Learning Experience

By Teresa Gray, senior director, education, LSCU

In 1970, in collaboration with various regions through the country, several credit union management schools were established.

For our Southern region that management school is the Southeast Regional Credit Union School (SRCUS), known in our industry as the Southeast’s “premier learning opportunity.”

Jake Robinson, president/CEO of Champion Credit Union in North Carolina, is a recent graduate of SRCUS. “The Southeast CUNA Management School was the ultimate learning experience,” said Robinson. “It provided the unique opportunity to learn core principles of credit union management from leadership development to financial analysis.”

Held in Athens, GA, SRCUS is a three-year program (two weeks each year) that provides well-rounded curriculum and experiential opportunities for professional and personal growth. Students focus on coursework that helps develop their operational, managerial, and leadership abilities.

“Without question, the knowledge and understanding I gained during the school’s three-year journey will greatly enhance my future contributions to the credit union movement.” said Robinson.

The curriculum is reviewed and revised each year to ensure that the school is

SRCUS Fact:

The SRCUS Curriculum Includes:

In its first two-week school, held at Oglethorpe University in Atlanta, there was a first year class of 30+ students.

In the 45 years since its inception, SRCUS has graduated over 1,200 credit union management professionals.

Financial Analysis ■■ Interest Rates & Financial Markets ■■ Financial Ratios ■■ Budgeting ■■ Lending ■■ Asset Liability Management ■■ Negotiation Skills ■■ Marketing ■■ Personality Styles and Teamwork ■■ Working with your Board ■■ Ethics ■■ Motivation ■■ Employment Law ■■ Performance Management ■■ Business Development ■■ Compliance ■■ Fraud

continuing to meet the ever-changing needs of today’s credit union professionals.

The instructors challenge each participant to achieve their highest potential as they engage them in learning activities that stimulate critical thinking and increase confidence.

But to Robinson, in addition to the knowledge and understanding he gained, he found another aspect of the school more beneficial: “More beneficial than anything was the relationships I built with other credit union professionals.”

If you’re interested in attending, contact Teresa Gray (Teresa.gray@lscu.coop; 205.437.2110) or Julianne Talley (Julianne.Talley@lscu.coop; 850.558.1148)

Leadership ■■ Organizational Behavior ■■ Executive Communication ■■ Strategic Planning

SRCUS Fact:

SRCUS leadership is provided by league presidents in the eight southeastern credit unions leagues.

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Carolinas Credit Union League Georgia Credit Union Affiliates Kentucky Credit Union League

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League of Southeastern Credit Unions & Affiliates Louisiana Credit Union League

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Mississippi Credit Union Association Tennessee Credit Union League Virginia Credit Union League

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.

April 2015 7-8

Alabama Credit Union Association State Governmental Affairs Conference | Montgomery, AL

May 2015 12

LSCU Small Asset Size Credit Union Conference | Tampa, FL

14

LSCU Small Asset Size Credit Union Conference | Birmingham, AL

20-21

IRA Essentials and Advanced Training Workshop | Birmingham, AL

June 2015

August 2015 2-5

Southeast Directors & Supervisory Committee Conference | Point Clear, AL

18-19

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

5-12

Southeast CUNA Management School | Athens, GA

7-10

Southeast Regional Director’s Conference | Savannah, GA

16-17

LSCU Hike the Hill | Washington, D.C.

17-20

Southeast Credit Union Conference & Exposition | Orlando, FL

29-30

LSCU Collections and Bankruptcy Workshop | Birmingham, AL

July 2015 14

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

16

LSCU Regulatory Compliance Workshops | Birmingham, AL

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LSCU Philosophy in Action Workshop | Lake Mary, FL

15

LSCU Regulatory Compliance Workshops | Orlando, FL

October 2015 7

NEW! LSCU Technology Workshop | Orlando, FL

20

NEW! LSCU Fraud Prevention Workshop | Birmingham, AL

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NEW! LSCU Fraud Prevention Workshop | Tampa, FL

November 2015 4-6

Southeast Leadership Development Conference | Destin, FL

*EB denotes early bird pricing. Bold denotes LSCU & Affiliates signature events.

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COMMUNICATIONS

2015 Hot Social Media Trend – Visual Content

By Mike Bridges, vice president, communications, LSCU Today’s marketing plans look vastly different than they did five and ten years ago. Social and digital media are major pieces of the plan now, and the channels for each continue to increase every year. Mobile usage is outpacing tablets and desktop computers, and the use of apps on mobile phones and tablets is outpacing traditional web surfing.

Digital marketing is all about riding the trends and staying in front of them and, as any savvy marketer will tell you, original content is most effective. Now that traditional channels are changing rapidly, staying out front is difficult and producing enough original content is even harder.

The hottest trend for 2015 is visual content. Facebook is still the most used social media channel with 1.39 billion users. The newest competitors in the social media landscape all utilize visual elements – Instagram, Pinterest, Vine, Tumblr, and SnapChat. The second most used social channel is YouTube with a billion users.

Visual content, sharing visual content, and sharing experiences visually are more popular now than they have ever been.

How can credit unions harness this trend and engage with their members? First, Facebook has to continue to be an important part of the social media marketing plan.

According to a comScore study, Facebook is still the number one used app and 42 percent of all smartphone app activity is

Facebook users. Have you noticed more visuals in your Facebook feed? Sharing videos, memes, and pictures are much more prevalent than simple text updates. Credit unions can use this to their advantage by using the visual content to tell a story. A photo of a member who received a lower auto rate is a good visual story. A first-time auto or home buyer with their keys is a great visual story that resonates on social media.

Credit unions need to diversify their social media presence to include, not just Facebook and Twitter but, a number of the other visual social media channels. Twitter, Instagram, Vine, and SnapChat are channels that live in the moment. Sending out visual messages in real time can be very impactful to members.

During community service projects, a visual message, in real time, through a number of social channels solidifies that a credit union cares about the community. Short videos are also very effective. There is no need to overproduce them either. Plus, you can tie many of your social channels together so you don’t have to make five different posts.

By diversifying social media channels and adopting a more visual approach with storytelling, credit unions have an opportunity to further engage their membership. The comScore study found that 57 percent of app users are on one every day, while 79 percent use one nearly every day. This by far beats tablet users where only 26 percent use an app every day and 52 percent use one nearly every day. These are meaningful statistics. It doesn’t mean credit unions shouldn’t have a mobile responsive website.

By diversifying social media channels and adopting a more visual approach with storytelling, credit unions have an opportunity to further engage their membership.

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Social Media Users ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

Facebook – 1.39 billion YouTube – 1 billion Google+ - 540 million Instagram – 300 million Twitter – 240 million LinkedIn – 187 million Tumblr – 109 million blogs Pinterest – 70 million Vine – 40 million SnapChat – 26 million

It just means that engaging members where they are is just as important as having a rich website.

Sam Maule spoke at the Southeast Leadership Development Conference this past November. He referred to Millennials and Gen Y as digital natives. That rings so true with the demographic that many credit unions are targeting. Smartphones, tablets, laptops, smart TVs, and wifi are all that they have ever known. They are also extremely visual. Changing the social media marketing message to be more visual and adopting short storytelling will change the way members see their credit union and how they interact with the credit union. Make the marketing plan flexible enough to meet them where they are – on social media, probably sharing a picture or a short video.

INDUSTRY

Ten Disciplines of Exceptional Member-Centered Cultures

By Jeff Rendel, CSP, president, Rising Above Enterprises

Numerous credit unions have committed to a culture of growth that supports top-line growth and stellar performance. A dedicated member-centered culture propels future credit union operations and reinforces strategic growth initiatives. Ten disciplines of exceptional member-centered cultures help to set in motion increased member satisfaction and loyalty, top- and bottom-line increases, meaningful innovation, and strategic success.

1.

Commit, as an entire credit union, to member capitalism.

Member capitalism is straightforward: Your credit union succeeds when each member succeeds. Consultative sales and service programs, loan recapture plans, and outbound marketing efforts are just a handful of ways that credit unions add financial and experiential value to every member.

Some credit unions have even announced their “member capitalism” intent, challenging their members to hold the credit union accountable for finding ways to help members earn more, save more, and conduct financial transactions more efficiently.

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2.

Set cultural distinction as a strategic objective.

Distinction, or differentiation, as strategy can be regarded in two respects: Carrying out different activities than your competition; or, carrying out comparable activities in a different manner than your competition. In a world where all sometimes shout the same message, look to discover unique ways to be different than your competition in ways that matter most to your core members. What, precisely, do you want your credit union to be culturally known for that sets it apart from other institutions?

Then, build action-oriented strategies for this very specific objective.

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3.

Communicate your strategy for members throughout your credit union.

Strategy is everyone’s business – at every branch, desk, and station. How do the long term objectives for your members take shape on a daily basis with your colleagues? Task your management team with delineating the daily, hands-on ways that your colleagues deliver your credit union’s strategy.

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4.

Add the entrepreneurial spirit to your culture.

A common thread among successful entrepreneurs is they awaken every morning with full knowledge and slight displeasure that their product or service is not in the hands of every potential customer – yet. When all colleagues understand the value your credit union provides (and can provide more of) for each member, entrepreneurial attitudes and actions are more likely to begin building the business of your credit union. Keep in mind, too, that entrepreneurial rewards go hand in hand with entrepreneurial efforts.

5.

Listen to your front line leaders.

One of my credit union CEO friends “works” the teller line each month and will jokingly tell you that the branch manager won’t give him a cash drawer.

His intent is to hear – straight from the source – how member-driven initiatives and plans are working out. He benefits in learning of successes and necessary refinements, and his front line leaders understand how their contributions help to shape the credit union’s growth and success.

Regardless of how you go about learning from the front lines, make a habit of realizing the effectiveness of their execution.

A member-centered culture is essential for your members’ and credit union’s success. These disciplines, when applied and set in motion, help produce first-class results for members. As an outcome, your credit union benefits from sustainable growth and increased enterprise value. In the end, exceptional member-centered cultures produce exceptional profits for your members and credit union.

Jeff Rendel, CSP, president of Rising Above Enterprises, works with credit unions that want elite results in sales, service, 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.

6.

Implement onthe-spot training, coaching, and leadership.

Cultures continuously evolve and require regular dialogues to complement annual “All Hands” meetings and training sessions. Concise – weekly or daily – sessions, updates, and de-briefs on products, sales and service improvements, solutions to problems, and celebrations of success allow you to address necessary changes, recognize best practices, and lead your growing culture in ways that resonate with your members.

7.

Ensure crossfunctional service and partnership.

Leadership for your members is everywhere in your credit union. The back office is just as important for member service as the call center and IT is just as essential for member awareness as the marketing department.

As you refine your culture, outline every touch point of a member’s experience and ensure that leadership and collaboration guides the development, implementation, and support of your products, services, and member’s experience.

8.

9. 10.

Listen to what your members say.

Measure what your members do.

Innovate relentlessly.

Whether it’s via survey, Net Promoter Score, Customer Effort Score, Facebook, Twitter, focus groups, or good old “lobby talk,” your members will tell you what’s working and what could work better at your credit union.

Listen to your members, frequently and intentionally, to better understand their experiences with your credit union – expected in the present and essential for the future.

Metrics matter and they tell the story of your progress and success.

An assessment of your culture’s development, measures regarding member loyalty, product use, profitability, and lifetime value help your credit union gauge the tangible value of your culture.

If there’s an iPhone 5 in your hands and an iPhone 6 on the way, chances are an iPhone 7 is in the works. Yet, innovation isn’t set aside for technology issues only; it’s applicable to products, operations, processes, marketing, and more.

What’s most important is to systematically inquire of every function in your credit union, “What’s next?” Your incremental actions of improvement make your credit union more significant and indispensable to your members.

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NEWS

League News

Alabama Credit Union and LSCU Board Chairman Steve Swofford, along with his son and daughter, ready to hunt quail at the 2015 LSCU Quail Hunt.

LSCU Quail Hunt raises more than $9,000 for FEDPAC The League of Southeastern credit unions held its third annual quail hunt for LSCU FEDPAC presented by FEDCorp earlier this year. This year’s hunt was held at Steelwood Country Club in Loxley, AL. Nearly 60 attendees hunted over a two-day period raising more than $9,000 for the LSCU FEDPAC. Attendees also enjoyed happy hour and steak dinner at the Steelwood Club House.

Mark Johnson of Naheola Credit Union won the Beretta 686 Silver Pigeon Over/Under Shotgun Raffle sponsored by Alabama Teachers Credit Union.

Special thanks to FEDCorp, LEVERAGE, CUNA Mutual, Listerhill Credit Union, Vining Sparks, EPL, Print Resources, Corporate America Credit Union, Trimmier Kudlis Reisinger LLC, Barfield Murphy Shank & Smith, STS Group, New York Life, and Alabama Credit Union for sponsoring the event.

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TOP LEFT: Ready for the hunt! L to R: Craig Esrael, CEO of First South Financial CU (TN), Brock Tompkins and Thomas Heyden (son Matthew), CUNA Mutual Group, and LSCU President/CEO Patrick La Pine.

TOP RIGHT: Naheola Credit Union CEO Mark Johnson won the Beretta 686 Silver Pigeon Over/Under Shotgun raffle sponsored by Alabama Teachers Credit Union.

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LEFT: A group from Mutual Savings Credit Union hangs out during the 2015 LSCU Quail Hunt.

LEVERAGE

Strengthening Economy Leads to Equity Protection Program

By Keith Hopkins, vice president, product management, LEVERAGE

It seems with every passing month, more encouraging news stories are being shared that the economy is strengthening at a productive rate. Here is the best part: credit unions are noticing economic changes on their balance sheets—particularly in the areas of auto and mortgage loan growth. The National Credit Union Administration (NCUA) has reported that credit union lending in the third quarter of 2014 had the highest annual growth rate since 2006.

LEVERAGE has been following the positive trends related to mortgage lending closely over the past few quarters and CUNA Mutual Group has provided some critical resources during our study. According to Chief Economist Steve Rick’s February 2015 Credit Union Trends Report, home prices rose 5.5 percent during the year ending in November of 2014. The result of this trend is twofold: rising home prices equates to fewer homeowners experiencing underwater scenarios and other homeowners acquiring additional equity that can be used for borrowing. In addition, factors relating to home sales in this report also support the fact that demand will continue to rise this year.

As a trusted and experienced business partner for credit unions, LEVERAGE’s goal has been to identify needs where we can help our members increase mortgage lending activity without introducing additional risk. This goal has become easier to achieve with the launch of our Equity Protection Program in January. Through Equity

Protection Program, participating credit unions are insured for losses due to borrower default for any reason such as job loss, divorce, bankruptcy, and even death. The program is the second mortgage equivalent of the more recognizable private mortgage insurance (PMI) on first mortgages. Currently closed-end home equity loans, HELOC loans, 80/20 second mortgage purchase money loans, and home improvement loans are eligible for coverage.

“As the economy improves, more consumers are looking to upgrade their homes through purchases or remodeling,” said LEVERAGE President/CEO Patrick La Pine. “The Equity Protection program will be beneficial to credit unions that have a large portfolio of second mortgages or for those that are looking to enter the second mortgage market.”

The Equity Protection Program is a fully insured loan protection program backed by an A.M. Best “A” rated insurer. The program allows our credit unions a great deal of flexibility in designing loan programs and underwriting individual loans. Significant emphasis is placed on responding to the individual underwriting concerns for each loan, as well as simplified reporting and premium remittance procedures.

For more information on how this program can benefit your lending performance, contact Keith at keith.hopkins@myleverage.com.

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LEVERAGE

Sprint® for Good... and More

By Rhea Oakes, product manager, LEVERAGE

Credit unions are getting creative in the ways they are using the funds they have earned through the Sprint Credit Union Member Discount Program, a LEVERAGE partnership with CU Solutions Group. Some credit unions are using the funds towards marketing offerings and services for their members; others are using the earned funds to help their communities; while others are putting the money back into their credit unions – giving them more flexibility with their standard operating budgets. Learn how America’s First Federal Credit Union, Alabama Credit Union, and Fort McClellan Credit Union thought outside the box and used their Sprint checks for good…and more.

America’s First FCU uses Sprint program funds for mobile branch America’s First Federal Credit Union in Birmingham began participating in the Sprint Credit Union Member Discount Program in 2014. The decision to participate in the program was an easy one for the credit union.

“We are in the business of helping our members and the Sprint program offered a valuable benefit to our membership, while adding no cost for the credit union and actually offering us a marketing incentive,” said Phil Boozer, vice president, public relations and sales, for America’s First.

The more than $23,000 earned through the program was used by America’s First towards a mobile branch for their members.

Boozer explained, “We had been looking at a mobile branch for years. Having the incentive from the Sprint program made it possible to add new marketing offerings, such as the mobile branch. Just like the Sprint program, the mobile branch offers our members a unique benefit by making the credit union more accessible at special events and enrollments.”

“The program is turnkey, and marketing materials are easily ordered or downloaded through the Love My Credit Union website.

The site makes it simple to fulfill the requirements for web banners, newsletter articles, and statement stuffers,” said Boozer.

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In 2014, 1,681 participating credit unions earned more than $6.2 million with the Sprint Credit Union Member Discount Program. Plus, due to their marketing efforts more than 1.33 million members are currently taking advantage of the Sprint discount and saving more than $500 million.

Alabama CU fights childhood hunger with funds from Sprint Program Rather than use the $10,466.53 it earned through LEVERAGE’s Sprint Credit Union Member Discount Program toward the credit union, Alabama Credit Union decided to use the funds to help children in their community.

Every penny earned through their participation in the program was paid forward to help put an end to childhood hunger through an award winning program the credit union developed called Secret Meals for Hungry Children.

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Sprint program gives credit unions flexibility

“With Secret Meals, we’ve accomplished a great deal by teaming up with regional food banks, other businesses and the thousands of individuals whose contributions have helped feed Alabama’s neediest children,” said Alabama Credit Union President Steve Swofford.

With the money earned from the Sprint Credit Union Member Discount Program, the Alabama Credit Union will provide a food pack for approximately 74 children-in-need each Friday throughout the school year.

By offering their members a Sprint discount, Alabama Credit Union earned funds they were able to put back into their community.

Fort McClellan Credit Union in Anniston, AL, earned $4,100.32 through the Sprint Credit Union Member Discount Program. Fort McClellan’s CEO Kevin Ford explained that the credit union is using the earned funds toward standard operating expenses, as well as toward future enhancements for their membership.

By using the funds for operating expenses, it gives the credit union a little more flexibility with their standard operating budget and the process was simple.

Like many other credit unions, Fort McClellan adopted the Sprint Credit Union Member Discount Program for the monetary benefit and the opportunity to provide an added service benefit to their membership.

“We have been pleased with the program,” said Ford. “Sprint has been on the money as far as getting us our checks and everything per the agreement so there has been no complaints from our side.”

What could your credit union do with the funds earned through the Sprint Credit Union Member Discount Program? What could your members do with their 10 percent discount on Sprint monthly service? It’s time to learn more about the Sprint Credit Union Member Discount program, sign up, and find out.

If you are interested in signing up for the Spring Credit Union Member Discount Program or would like more information, contact a LEVERAGE Business Development Consultant at consult@myleverage.com.

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LEVERAGE

Global Divergence

By Craig Dismuke, chief economist, Vining Sparks Today’s economy is best described in a single word, divergence.

Globally, there has been a divergence in the rates of growth of developed economies. While the U.S. economy has expanded since the end of the Great Recession, the Japanese and Eurozone economies have both contracted, and China’s growth rate has disappointed. Along with this divergence in growth rates has come a divergence in central bank posture which has resulted in tectonic shifts in the markets. As the Federal Reserve has slowly begun the process of tightening policy, other central banks have gone as fast as they can in the opposite direction. This has caused an unprecedented run for the U.S. dollar which exacerbated a supply glut in the oil market, helping send oil prices plummeting to their lowest levels since the Great Recession. Ironically, the prospect of the Fed tightening policy has been complicated by the results of this global divergence and will likely continue to be so. The stronger dollar will hurt U.S. exporters and weaker global growth will keep pressure on foreign

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central banks to continue weakening their currencies.

Nonetheless, these divergences are likely to continue as the U.S. economy carries on and foreign economies continue to struggle in 2015.

Domestically, the economy will carry on thanks primarily to a strengthening consumer. The household deleveraging process appears to have concluded and the labor market is strengthening at a rapid rate. While there is still some evidence of underemployment, much of that is structural and the result of an aging population.

Add to the strength of the household balance sheet the drop in energy prices, and consumers are set to be the engine of growth for 2015. The last shoe to fall for the U.S. consumer will be wage growth. While there are indications that the labor market is strong enough to allow for wage gains, it has not yet occurred. The Federal Open Market Committee (FOMC) would clearly like to see signs of better wage growth before raising the overnight rate, but this does not appear to be a prerequisite. With such a solid economic background, the Fed will be hard-pressed not to get off zero for the first time since 2008. If they do finally raise rates, it will at least result in one less area of divergence – that of the stable economic growth and the surprisingly accommodative position of monetary policy that exists today.

LEVERAGE

CUNA Mutual Group Continues CU System Advocacy Efforts in 2015

By Christopher P. Roe, senior vice president, corporate and legislative affairs, CUNA Mutual Group

As a partner in the credit union system, CUNA Mutual Group continues to be a strong and vocal advocate for credit unions and their members. We have a long and accomplished history in this area from H.R. 1151, to the IRS battles regarding the Unrelated Business Income Taxes, to the more recent “Don’t Tax My Credit Union” campaign. As the 114th Congress begins its work, we will continue to play an active role with credit union trade associations in advancing the public policy agenda of credit unions.

For us and the credit union system, the defense of the credit union tax exemption remains our top priority. We continue to fund research in this area and are working with CUNA staff in preparing for the tax debate in the 114th Congress. Most recently, we are joining CUNA and the Leagues in bank battles in Illinois and Iowa by contributing significant funds to amplify credit unions’ defense of the tax exemption. In addition, we believe coordination with the cooperative system is invaluable when discussing tax policy.

By working with other cooperative sectors, we are able to share intelligence on tax legislation, strategize on how we can work together, and identify common interests in defense of tax policy impacting the cooperative model. As a result, our own Larry Blanchard, who led the charge during H.R. 1151, and the National Cooperative Bank have brought together a diverse group of cooperative sectors, including credit union trade associations, to discuss and coordinate on tax reform.

While passing tax reform is daunting, the debate today and, in particular, the work of House Ways and Means Chairman Paul Ryan represents the building blocks for future tax reform. Chairman Ryan has already indicated the work of his predecessor will be a starting point. That’s good news considering the great work of the credit union system to keep the credit union tax exemption out of former Chairman Camp’s bill in the last Congress. As many will concur, the legislative debate becomes much more difficult once a tax provision is placed in the draft bill.

As an insurance company, CUNA Mutual Group continues to be a leader in cyber security and plastic card fraud. In the last year, our senior executives have met with White House and Treasury officials to share our perspectives. Because our subject matter expertise is valued, CUNA Mutual Group was invited to the president’s address

on cyber-security at Stanford University on Feb. 13. As credit unions face increasing risk in this area, we hope to continue to provide solutions to mitigate this threat. Beyond working with various federal agencies, we joined forces with CUNA to sponsor and provide input to the StopTheBreaches.com website. The intent of the website is to inform the public — particularly Congress — on how a multifaceted approach is necessary in mitigating data breaches and to dispel certain myths raised by merchant groups.

On the regulatory front, our LOANLINER team is working overtime to help credit unions prepare for TILA/RESPA changes. Through several webinars that were attended by hundreds of credit unions to sharing our concerns with the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB), we are taking an active role in helping credit unions meet the demands of these new regulations. Similarly, given the major ramifications of NCUA’s risk-based capital rule, we worked with the business community to make sure their voice was heard and filed our own comments with NCUA. Member business lending is important to a number of credit unions and it is important to us. As small businesses turn more and more to credit unions, we believe there is an opportunity for the system to provide an array of financial solutions. To that end, we connected Georgetown University Professor David Walker with CUNA and the Filene Research Institute and commissioned a study on the impact of member business lending on small businesses. We look forward to his study and intend to share the results with Congress.

Finally, patent reform remains a possibility in this Congress. CUNA Mutual Group, as a financial institution, is subject to the same issues that credit unions face. While we made some inroads when patent reform was passed a few years ago, more should be and can be done. We will continue to work side-by-side with the credit union trades to tackle this issue – which may be one of the few major bills to pass this Congress.

Contact Christopher at christopher.roe@cunamutual.com.

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DIRECTORY

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

April N. Ales, x1038 Member Relations Consultant april.ales@lscu.coop David LeNoir, x2158 Member Relations Consultant david.lenoir@lscu.coop

OFFICE OF PRESIDENT/CEO

Juli Lewis, x1108 Member Relations Consultant juli.lewis@lscu.coop

Patrick La Pine, x1002 President & CEO patrick.lapine@lscu.coop

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

Kate Brady, x1060 Executive Assistant to President/CEO kate.brady@lscu.coop

Leonard Parkhurst, Jr., x1154 Director, Southeastern Credit Union Foundation leonard.parkhurst@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 Scott Morris, x2165 Director, Regulatory Advocacy scott.morris@lscu.coop

Education

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

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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

Debbie Caruthers, x1116 Director, Accounting debbie.caruthers@lscu.coop Mike Couey, x2136 Finance & Operations Manager mike.couey@lscu.coop

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

Leia White, x1140 HR Consultant Manager leia.white@lscu.coop

Governmental Affairs

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

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

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

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

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

Cooperative Initiatives

Buck Holland, x1032 SVP, Finance & Administration buck.holland@lscu.coop

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

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

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

Finance & Administration

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

SIGNAL: Vol. 6, Issue 1

LEVERAGE Administration Lisa Burroughs, x1004 SVP, Strategy & Business Operations 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 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 Brett Carpenter, x2135 Staff Auditor brett.carpenter@cuacg.com Bonique Turner, x2124 Staff Auditor bonique.turner@cuacg.com Arden Ward, x2132 Staff Auditor arden.ward@cuacg.com Mark Wilsie, x2142 Audit Manager mark.wilsie@cuacg.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

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

LEVERAGE PARTNERS CO-OP Financial Services

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

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

Brooke Collins, x1050 Contract Management Specialist brooke.collins@myleverage.com

ComplyTrac

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 Marvin Garland, x1102 Chief Innovation Officer marvin.garland@myleverage.com 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 Production Artist detra.white@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.

Product Management

Business Development Consultants

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

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

John M. Floyd & Associates

Deirdre Rhodes, x1104 Product Support Manager deirdre.rhodes@myleverage.com

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

Landrum Professional

Kelli Silvernale, 866.949.6220 Director, Vendor Management kelli@cuvm.org Karen Ruggiero, 866.949.6220 Sr. Contract Management Analyst karen@cuvm.org

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

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

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.

O’Rourke & Associates An exclusive credit union focus on executive and management recruiting.

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.

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.

SIGNAL: Vol. 6, Issue 1

www.lscu.coop

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

June 17-19, 2015 | JW Marriott Orlando Grande Lakes Hotel

The 2015 Southeast Credit Union Conference and Expo features two great leaders as speakers for the Opening and Closing General Sessions.

Jim Nussle CUNA President/CEO

Ken Schmidt Former Harley-Davidson Executive

REGISTER TODAY AT: SoutheastCUConference.com