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LSCU

Message from the President In October, CUNA President/CEO Bill Cheney and I spent three days traveling through Florida meeting with CEOs one-on-one and in groups. We hope to plan similar meetings in Alabama in 2013. We spent considerable time listening to credit union issues and concerns. One thing we heard a couple of times was: what happens at the state capitol doesn’t affect me because I’m a federal credit union. While on the surface this may seem true, in actuality, what happens at the state level affects all credit unions. Probably the most overlooked reason for all credit unions to become involved in state issues is the fact that about half of the current members of Congress started their political career at the state level. If credit unions can begin forging a relationship with a member of the state legislature, it will pay dividends down the line when they become a U.S. representative or senator. Some of the credit union industry’s closest allies cut their teeth at the state capitol. A couple of good examples of this type of relationship are Reps. Dennis Ross (R-FL) and Bill Posey (R-FL). Their offices always accommodate our requests for meetings or to clarify issues. Both spent many years in the Florida House before heading to Washington, D.C. Many of Alabama’s federal lawmakers began in Montgomery. Our next credit union champion in Washington could already be in Montgomery or Tallahassee. Another reason to be involved is the foreclosure issue. It has hit all states hard with sand states like Florida being heavily impacted. While judicial foreclosure is not an issue in Alabama, in Florida it is the sole means for a mortgage holder to foreclose on a residential or commercial property, other than a timeshare property. Mortgage holders and borrowers have been encountering significant delays in obtaining foreclosures through the judicial process. Some states are now using foreclosure mediation to produce loan modifications and other settlements at substantially higher rates. The LSCU has been a vocal advocate at the state level for streamlining the process through the use of non-judicial foreclosure while protecting the rights of credit unions and borrowers. The LSCU works with leadership in both states to ensure that any language in foreclosure bills won’t adversely affect credit unions that make mortgage loans. This encompasses any credit union, regardless of charter type or affiliation status. During our visits, one point Bill Cheney and I made was that CUNA and the LSCU work together on a number of issues, not just our federal legislative agenda. We work closely with CUNA on our efforts to get public deposits passed in Montgomery and Tallahassee. CUNA provides great research for state leagues on a broad array of state issues such as how may states accept public monies and how it has provided greater opportunities for choice in cities across the country. CUNA also helps to draft model state act legislation as well as provides model language on a variety of issues upon request. These are just a few examples of how issues at the state level affect all credit unions. As we look to 2013, I challenge all of our credit unions to become more involved in our grassroots advocacy efforts. This can simply mean responding to Action Alerts through the LSCU Action Center or taking it a step further and attending our functions in the chapter or in-district meetings with our state and federal lawmakers. Our state GACs are a great way to get your feet wet in grassroots advocacy. In Montgomery and Tallahassee, they provide an overview of the state legislative agenda, as well as provide opportunities to meet with lawmakers. The relationships we form today can pay huge dividends down the road. Rep. Jo Bonner (R-AL) told the Leadership Development Conference attendees in November that if an issue arises and just a couple of people get in touch with him, it tells him it must not be that big of deal. Our long-term sustainability as an industry is dependent on engaging more credit union officials, and their members, in our grassroots advocacy efforts. We simply need more credit unions to take part on the local, state and federal level. Regardless of credit union charter, building relationships at all levels helps drive our state and federal agenda. It may not pay off in the short term, but it will in the long term.

Patrick La Pine President & CEO League of Southeastern Credit Unions

Table of Contents

Presidentâ&#x20AC;&#x2122;s Message

Trends Your Role in the Future of Payments

Editor Amy Jowers Contributors Adena Whitman Andy Gonzalez Leonard Parkhurst Bill Berg Jared Ross Jason Cochran Jennifer Martin Keith Hopkins Laura Vann Mary Elicia Del Santo Mike Bridges Guest Contributors Brian Scott Jack Wolf, PhD

Credit unions have to prepare for the changing tide and make sure they have the most innovative, contemporary, and affordable payment solutions for their members.

Consumer Confidence, A Hidden Cost of Fraud for Financial Institutions According to a Gartner study (www.gartner.com), more than 45 percent of U.S. consumers have changed their online behavior because concerns about fraud have made them more mistrusting of email and e-commerce.

Production Detra White Joseph Davis April Banta

Advocacy Overview of 2012 Election Results An overview of the recent elections and how the results affected Alabama and Florida.

2013 Alabama Legislative Session 2013 Florida Legislative Session LSCU PACs See Success & Growth in 2012

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

Connect with us! 18 LeagueofSoutheasternCreditUnions

LSCU Legislator Profile Representative Wes Long Congressman Dennis Ross

@LeagueofSECUs

Representative Wes Long

Highlights LeagueofSECUs www.lscu.coop 4

6 | Trends

What is the future of consumer payments? There are a myriad of emerging technologies that facilitate payments. Find out where payments are going.

A Magazine of the League of Southeastern Credit Unions

SIGNAL: Vol. 3, Issue 4

12 | Advocacy

Congressman Dennis Ross

Get an overview of the 2012 elections, find out which credit union-friendly lawmakers won, and hear what credit unions should be doing right now.

23 | Compliance

Credit unions can learn more about utilizing RateMap, PolicyPro, and InfoSight â&#x20AC;&#x201C; free duessupported services for affiliated credit unions.

Table of Contents

Presidentâ&#x20AC;&#x2122;s Message

Trends Your Role in the Future of Payments

Credit unions have to prepare for the changing tide and make sure they have the most innovative, contemporary, and affordable payment solutions for their members.

Production Detra White Joseph Davis April Banta

Advocacy Overview of 2012 Election Results An overview of the recent elections and how the results affected Alabama and Florida.

2013 Alabama Legislative Session 2013 Florida Legislative Session LSCU PACs See Success & Growth in 2012

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

Connect with us! 18 LeagueofSoutheasternCreditUnions

LSCU Legislator Profile Representative Wes Long Congressman Dennis Ross

@LeagueofSECUs

Representative Wes Long

Highlights LeagueofSECUs www.lscu.coop 4

6 | Trends

What is the future of consumer payments? There are a myriad of emerging technologies that facilitate payments. Find out where payments are going.

A Magazine of the League of Southeastern Credit Unions

SIGNAL: Vol. 3, Issue 4

12 | Advocacy

Congressman Dennis Ross

Get an overview of the 2012 elections, find out which credit union-friendly lawmakers won, and hear what credit unions should be doing right now.

23 | Compliance

Credit unions can learn more about utilizing RateMap, PolicyPro, and InfoSight â&#x20AC;&#x201C; free duessupported services for affiliated credit unions.

Compliance Free Web-Based Tool Provides Customized Policies for Individual Credit Unions

Cooperative Initiatives LSCU Credit Union Philosophy in Action Workshop: “Ideal for All Managers, Mid-Level & Upper” High School Financial Planning Program Provides Resources Needed to Teach Students Financial Responsibility

Foundation Foundation’s College Internship Program Pilot Proves Beneficial to Students & Credit Unions Students were matched with small asset size credit unions, giving the students valuable skills and experience to enhance their classroom learning. Participating credit unions benefited from the fresh perspectives offered by the students and gained valuable assistance in their day-to-day operations.

Education Collecting Accurate Employee Performance Data Using the “What” Question Technique Upcoming 2013 Learning Opportunities

Communications Image Campaign Doubles Awareness in One Year

League News 2012 LDC Highlights

Industry Q&A with Corporate America’s New President, Pete Pritts

LEVERAGE What’s Your Credit Union’s LEVERAGE Value? Connect with Your Members’ Needs to Avoid Regulatory Scrutiny & Thrive in the New Year

LSCU Staff Directory

Highlights 24 | Cooperative Initiatives

30 | Education

34 | Communications

There is a great resource for credit unions, the LSCU Credit Union Philosophy in Action Workshop, which is ideal for managers, midlevel & upper.

Understand how to get accurate employee performance by asking the right questions. Also, take a look at the 2013 LSCU Events Calendar.

Find out what kind of impact the LSCU Cooperative Image Campaign has had on Generation X. The campaign has seen a significant increase in awareness. SIGNAL: Vol. 3, Issue 4

www.lscu.coop

TREND

in the Future of Payments Brian Scott, vice president, The Members Group (TMG)

Very little has changed in the U.S. payments industry in the last 30 years. Until now. Evolution may have been slow to come to this industry, yet there’s no denying a transformation has begun. Evidence of this progression can be seen in all corners of the marketplace: • Consumers are utilizing mobile applications offered by retailers, like Starbucks, or alternative payment ecosystems, like Dwolla, to simplify their lives. Instead of pulling out wallets, they’re reaching for mobile devices to make their purchases and pay their bills.

A great number of these products and capabilities are available now, yet many aren’t fully developed. As consumers become more familiar with these products and understand their potential, they will be more likely to use them. That familiarity is just around the corner, which is why it’s critical for credit unions to join the innovation fray. As members begin to experiment with new payment technologies, they will be seeking trusted guidance from their financial institutions. Two factors are pushing the advancement of new payments technologies: 1) The increasingly “social” lifestyle; and 2) the high value placed on speed.

Purchase Behavior as Social Behavior In today’s culture, consumers are more social with their purchasing behaviors – looking to friends for recommendations and broadcasting their own purchases via social networking tools, like Facebook and Twitter. With the geolocation capabilities of many of today’s popular mobile devices, it is easier than ever for consumers to involve their networks in everyday purchases. Many of today’s alternative payment technologies are built around the consumer value of “sharing” purchases across social networks.

Faster Is Better

• Major retailers, like Target, are making headlines for their use of data analytics. By detecting changes in customer purchase behaviors, retailers realign their marketing and promotional offers, finely tuning them to the preferences of unique consumer segments. • Traditional payments players, like Visa’s V.me, are innovating by way of digital wallets. Enabling customers to make purchases with their credit or debit cards by simply signing into an online or mobile account. • New players, like Google, are leveraging existing consumer relationships to work their way into the payments space, as well, with tools like Google Wallet.

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Both speed and convenience give alternative payments a higher perceived value over standard transaction technology. For that reason, consumers today expect the companies with which they do business to adopt these new technologies. Just as merchants will need to update their point-of-sale (POS) technologies to accommodate these changing payment preferences, so too will credit unions need to consider offering “anytime, anywhere” mobile products. Although there is no crystal ball to tell us precisely what will happen and when, there are several indications from around the world that are beginning to paint a clearer picture: • Many European governments have active legislation supporting the phase-out of physical cards to reduce fraud issues. • By 2017 at current growth rates, the value of person-toperson (P2P) payments will exceed ATM cash withdrawals. • In 2018, nations like the United Kingdom and Australia will stop supporting paper checks. • And by 2020, less than three percent of payments will be made with cash.

In many other countries, the future of payments is already here. Particularly in Europe and Africa, new payment Technologies, like EMV and mobile usage, are already a part of everyday living. These cultures are pushing the global market forward. Kenya-based M-PESA, for example, is a mobile phone-based money transfer and microfinance service that realizes 200 transactions per second. Technologies like this, born of a cultural demand, are examples of how the international marketplace is adapting. Alternative payment providers have already begun to fight for market share in the U.S. They stand ready to compete with financial institutions that have held court in the payments ecosystem for many years – and credit unions are no exception. As these new players look to create value and establish long-term relationships with consumers, credit unions will only feel the competitive heat increase.

As these new players look to create value and establish long-term relationships with consumers, credit unions will only feel the competitive heat increase. Aside from simply losing foothold in the payments ecosystem, credit unions that do not adapt may begin to see the impact in black and white. As tough competitors eventually drive down the cost of transactions (to encourage merchant and consumer adoption), credit unions and other traditional card issuers may begin to see a significant reduction in income. Fortunately, there are trusted partners working alongside credit unions to prepare for the changing tide. TMG, for example, is right now connecting credit unions with major players (both traditional and new) to make sure they have the most innovative, contemporary and affordable payment solutions for their members. Among tech-savvy U.S. consumers, how they pay is becoming as important as what they buy, making payments a significant part of the marketing mix. Emerging technologies will significantly reshape the payments market in the next decade, and these changes are being driven by competitors the current market didn’t expect. In all the complexity that is today’s payments marketplace, only one thing is for sure: The next 30 years will look nothing like the last. ■

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TREND

Consumer Confidence, A Hidden Cost of Fraud for Financial Institutions Amy Jowers, director, Information Services, LSCU

More and more small to medium-sized businesses (SMBs) are looking to credit unions as providers of their banking services: traditionally no monthly checking fees, no annual credit card fees, and dramatically lower merchant account and credit card processing fees. And you can normally get all of your services taken care of in one place. For example, CFE Federal Credit Union, based in Lake Mary, FL, has partnered with third-party vendors to offer its business members electronic payment processing and payroll insurance. Regardless of the financial institution (FI), however, fraud is an ongoing concern among these businesses. With mobile banking on the rise, along with wire transfers, ACH, and online banking, more and more opportunities are presenting themselves for fraudulent transactions. Published in August by Guardian Analytics, the 2012 Business Banking Trust Study surveyed nearly 1,000 owners and executives of small-and-medium-sized businesses (SMBs) in the United States. The study provides insights into SMBs’ online banking behavior, their views of banks’ security practices, and the impact just one fraud incident can have on banking relationships. The study also outlines the strategic impact that fraud has on a financial institution – lost profits and lost customers. When it comes to fraud, financial institutions “have to bear a number of hidden costs, including loss of customer confidence and damage to their brand and integrity.” The results show that SMBs are ongoing victims of account takeovers and are realizing significant losses due to fraudulent online, mobile, wire, and ACH transactions. The most revealing findings are that, as a result of fraud, SMBs are not only losing confidence in their financial institutions’ fraud prevention practices (30 percent of responses), but are taking some or all of their banking business elsewhere (40 percent).

According to a Gartner study (www.gartner.com), more than 45 percent of U.S. consumers have changed their online behavior because concerns about fraud have made them more mistrusting of email and e-commerce. 8

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The study revealed that 73 percent of online fraud attacks result in the successful transfer of money. Despite efforts by FIs to recover funds, 61 percent of reported fraud attacks result in lost funds. In some cases the business takes the full loss; in some, losses are shared; and in one quarter of instances, the FI reimburses the business fully for any losses. In the end, all parties suffer significant financial loss as a result of fraud. More statistics from the study find: • Fifty-six percent of SMBs indicate that it would take only one successful fraud attack to lose confidence in their FI’s ability to provide adequate security • Seventy percent indicate that online fraud – either successful or just attempted – diminished their trust and confidence in their FI or caused them to take some or all of their banking business elsewhere

Fraud Numbers Across the Different Channels Mobile Banking Mobile banking already has the highest incident of fraud at 11 percent of SMBs that use mobile banking. A significant number (19 percent) of companies are not certain that they experienced fraud due to their mobile banking, revealing that SMBs are not able to promptly detect if funds were stolen when using mobile devices. Of the 11 percent certain about the fraud, notification mostly came slowly, in the form of a letter (35 percent), or they were notified by a vendor or supplier (32 percent). Twenty nine percent received a call from their FI. FIs were able to stop only 31 percent of mobile fraud attacks. Fifteen percent report the funds were stolen but the bank was able to recover some of the funds. However, 29 percent say the FI was not able to stop the transfer and funds were stolen. Of businesses that had funds stolen as a result of mobile banking, 60 percent did not receive full reimbursement. The majority of SMBs (57 percent) had losses of $10,000 or less due to mobile banking fraud. However, the incident had a serious effect on the SMB’s relationship with its FI. Twenty percent moved their primary services and 15 percent terminated the relationship, while another 25 percent say the FI lost their trust and confidence in its ability to prevent mobile banking fraud.

ACH Payments Nine percent of SMBs that use ACH experienced fraudulent ACH transfers during the past 12 months. However, 13 percent are unsure, indicating that the reported incidents of fraud could be higher. Forty percent of SMBs that had this type of fraud learned about it when one of their merchants, suppliers, or vendors contacted them. Another 29 percent received a letter from their FI. Both of these are too slow for the FI to be able to recover stolen funds. Only 33 percent received a call from the FI. While lower than the high rate of fraudulent transactions in the mobile channel, still 44 percent of SMBs report that the fraud resulted in an unauthorized transfer. Twenty three percent ended up having money stolen, which also is lower than other channels. However, 77 percent of the SMBs that lost money did not receive full reimbursement from their FI, which is a significantly higher response than mobile. Thirty-two percent of SMBs in this study lost more than $25,000 as a result of the ACH fraud and seven percent were unable to determine if the fraud was from ACH. SMBs expressed their displeasure by having diminished trust and confidence in the FI’s ability to prevent ACH fraud (33 percent), switching to another bank for primary services (27 percent), or terminating the relationship (11 percent). Wire Transfers Ten percent of SMBs were affected by an unauthorized transfer of funds via wire during the past 12 months. Again, there is enough uncertainty (12 percent) to show that many SMBs may not have the ability to detect fraudulent wire transfers.

Additional findings from the 2012 Business Banking Trust Study include: • SMBs are rapidly increasing their use of online and mobile banking. • Fifty-four percent of businesses now use mobile devices to access online banking, up from 23 percent in 2010. • The proportion of businesses doing all business banking online has more than doubled from nine percent in 2010 to 20 percent in 2012. • Seventy-four percent of SMBs have experienced electronic banking fraud. • Fifty-two percent have been hit by fraud in past 12 months SMBs expect their financial institution to be the expert, but think they’re not doing enough. • Seventy-two percent indicate that they hold the FI primarily accountable for ensuring that their online bank account is secure. • However, only 43 percent say their FI takes appropriate action to limit risky transactions.

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Similar to ACH, 39 percent of companies learned about the fraud from a merchant, supplier, or vendor followed by 35 percent that received a letter from the FI, both of which are too slow to be able to recover the funds. Only 32 percent of companies were notified by a call from their FI. Similar to mobile banking, FIs were not very successful in stopping unauthorized wire transfers. Only 30 percent of unauthorized transfers were stopped prior to the transfer of funds. And of those where the transfer did go through, 48 percent ended up losing money, which is much higher than the other channels. Of those that lost money, 75 percent were not fully reimbursed by their FI. Thirty percent of the SMBs in this study lost more than $25,000 as a result of wire fraud and 10 percent were unable to determine. As a consequence, 14 percent terminated their relationship, 31 percent lost trust and confidence in the FI’s security practices, and 25 percent switched their primary services to another FI. These levels are quite similar across all channels.

What’s the Overall Story? The overall story told by the study is that SMBs use of online and mobile banking is increasing; however, they’re not adequately defending themselves, and instead are looking to their FI as the party responsible for protecting their assets. At the same time, the incidents of fraud are increasing in volume and sophistication. While they already think the FI is not doing enough, this is compounded when, more often than not, it’s the SMB that discovers they’ve been hit by fraud instead of being notified by their FI. When money is lost, FIs are not fully reimbursing their business clients. And, as a result, after just one fraud attack the SMBs lose confidence in their FI and take their business elsewhere. So as an SMB’s credit union, what can you do to ensure you are proactively protecting them from fraudulent attempts and keeping them confident in your ability to provide them with the best option for their banking needs?

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Be the Expert. SMBs are looking to their FI to be the expert. Develop sources to stay up to date on the latest fraud schemes and prevention solutions. Fraud will continue to evolve and you must commit to continually monitoring and updating defenses to stay ahead of the criminals. Develop Efficient Internal Communications. Fraud is taking place in all banking channels. Best practices for preventing fraud include monitoring for early signs of account takeover and reconnaissance – well before the transaction – and then alerting other channels of the activity so they can be on the alert. Openly Communicate with Members. Do what you do best as a credit union. Utilize your relationship with your member and build confidence by openly and clearly explaining what you are doing to detect fraud early and how your members and you can work together to prevent any fraud losses. The more proactive you are in reaching out to your members, the more confidence it builds. Use Fraud Prevention as a Competitive Advantage. Other FIs will continue to lose customers due to the scenario above. Putting in place truly effective fraud prevention capabilities is the first step. The next step is to tell your current and prospective members what you’ve done. Fraud is a high visibility topic and businesses will be looking for FIs that are addressing it aggressively. Bottom Line: Financial institutions have to invest in reassuring their customers that they are taking a more proactive stance in preventing fraud. This is an area where credit unions can differentiate themselves from competitors. ■ Sources: www.GuardianAnalytics.com/2012TrustStudy http://www.gartner.com/technology/home.jsp http://compassplus.com/

Be there with all the convenience theyâ&#x20AC;&#x2122;re looking for. How do you become the one your members rely on most? By being nimble. Progressive. Forward-thinking. In relevant ways that anticipate their ever-changing needs. Find out how you can be there for them in every way they need you at co-opfs.org. Be ÂŠ2012 CO-OP Financial Services

more.

ADVOCACY

Advocacy Overview of 2012 Election Results Jared Ross, vice president, Governmental Affairs, LSCU Every four years Americans go to the polls to exercise what many consider to be the most fundamental right afforded to us, the right to vote. This year saw one of the nation’s most contentious election seasons, particularly at the top of the ticket, as President Barack Obama and former Massachusetts Governor Mitt Romney spent more than $2 billion in the race for the White House. In the end, President Obama won a second term taking 332 electoral votes to Governor Romney’s 206. The president also secured the popular vote winning 50.6 percent to Romney’s 47.8 percent. In Alabama, there was very little drama as all seven incumbents easily won re-election, facing more competition in the March primaries than they did in the November General Election. In Florida, however, there were several interesting congressional races as well as one Senate seat up. After receiving two more congressional seats due to the once a decade reapportionment process, the Florida delegation will now be made up of 17 Republicans and 10 Democrats. There will be six new faces headed to Washington, as well as one returning member of Congress. The six new members are Ted Yoho (R), Ron DeSantis (R), Patrick Murphy (D), Trey Radel (R), Lois Frankel (D), and Joe Garcia (D). Returning for a second stint in Congress is former member Alan Grayson (D), who was defeated in 2010 by Congressman Daniel Webster. Incumbent Congressmen Allen West (R) and David Rivera (R) were both defeated on Election Day; West by Murphy and Rivera by Garcia. West intends to contest the election results, though in the end, it is likely that Murphy will be seated and represent Florida’s 18th Congressional District for at least the next two years. The League’s Political Action Committee (PAC) Trustees had voted to endorse the candidacy of Congressman Jo Bonner (R-AL), Congressman Gus Bilirakis (R-FL), and Congressman Bill Posey (R-FL). All three won their election bids. Overall, the U.S. House of Representatives will remain in control of the Republicans as Democrats failed to pick up enough seats to switch the balance of power. The Senate race in Florida saw two-term incumbent Sen. Bill Nelson (D) face Congressman Connie Mack IV (R) in one of the most watched races in the country. Republicans were 12

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hoping they could flip the Senate by targeting vulnerable senators, including Sen. Nelson. Nelson, who was also endorsed by the LSCU PAC Trustees, easily won re-election and will return to Washington for his third term. Republicans were unable to win enough Senate seats to take over the chamber and thus, Harry Reid (D-NV) will remain senate majority leader. At the state level, there were no elections in Alabama this year; however, all 160 state legislative seats were up for election in Florida due to redistricting. There was very little surprise on the Senate side, where Republicans remain in strong control of the upper chamber. Senator Don Gaetz (R-Niceville) will become the Senate President, leading the chamber for the next two years. Sen. Gaetz has not yet named his leadership team. Sen. Chris Smith (D-Ft. Lauderdale) will be the minority leader. No committee assignments have been announced as of yet. The CUPAC trustees had voted to endorse the candidacy of Sens. Andy Gardiner (R-Orlando), the current majority leader and expected president-designate of the Senate, Sen. Smith and Sen. Audrey Gibson (D-Jacksonville). All three were victorious in their re-election bids. Further, 96 percent of candidates supported through CUPAC were victorious on November 6. The previous Republican supermajority of 28-12 has been reduced to 26-14. In the House, Republicans also lost their supermajority, however, remain in control of the chamber 76-44. Representative Will Weatherford (R-Wesley Chapel) will be the speaker of the house for the upcoming biennium, while Representative Marti Coley (R-Mariana) will be the speaker pro tempore. Speaker Weatherford had previously named Representative Chris Dorworth (R-Heathrow) as the majority leader. Dorworth, who was also slated to follow Weatherford as speaker of the house, was defeated in his bid for re-election in a stunning political upset. No replacement majority leader has been named as of yet, but Rep. Steve Crisafulli (R-Merritt Island) has already been selected to replace Dorworth as speaker designate. Rep. Perry Thurston (D-Ft. Lauderdale) will serve as the minority leader. CUPAC trustees had voted to endorse 11 House candidates, 10 of whom were successful. Rep. Dorworth was the

only unsuccessful candidate. Candidates Travis Cummings (R-Orange Park) and Katie Edwards (D-Plantation) were endorsed and elected to the House. Incumbent Reps. Jason Brodeur (R-Sanford), John Tobia (R-Melbourne), Bill Hager (R-Boca Raton), Keith Perry (R-Gainesville), Janet Adkins (R-Jacksonville), Janet Cruz (D-Tampa), Perry Thurston (D-Ft. Lauderdale), and Barbara Watson (D-Miami Gardens) all received endorsements and were re-elected. Ninety-three percent of the candidates CUPAC supported in the general election were successful. With the elections over, the Leagueâ&#x20AC;&#x2122;s Governmental Affairs team is working to meet with our congressional, Senate, and House legislative members to begin our efforts to pass meaningful legislation for credit unions. The 112th Congress will be finishing their work sometime before Christmas and the 113th Congress will convene in January. The Alabama Legislature begins its session on February 5, 2013. The Florida Legislature begins their committee weeks in December and will meet for six weeks in January and February before convening the regular legislative session on March 5, 2013. â&#x2013;

Socialize

with Governmental Affairs @LSCUGovAffAL @LSCUGovAffFL LSCUActionCenter

ADVOCACY

Advocacy 2013 Alabama Legislative Session Jason Cochran, director, Governmental Affairs (AL), LSCU For the past two years the Republican majority in the Alabama House and Senate has flexed its muscle and passed pieces of legislation that see most of their goals met. Some, such as charter schools, were defeated, but calling the last two sessions “successful” would be an understatement. One common theme in Alabama and most other states is the health of the operating budgets, the Education Trust Fund, and the General Fund. For the first time in a while, it is relatively quiet on that front. That is not to say there won’t be issues, there surely will be, but the Education Trust Fund seems to be in pretty good shape at the moment. Legislators and special interest groups are even talking about raises for teachers and support staff. The General Fund released a sigh of relief when Alabamians, earlier this year, passed an amendment that allowed the transfer of monies from the Oil and Gas Trust Fund to the General Fund. State agencies were able to fend off drastic cuts to personnel for the immediate future. One caveat is that there will be legislation to require the repayment of those dollars introduced in 2013–something that may be easier said than done. One proposed measure that will affect all of this is an early retirement package for employees of the state. It is gaining serious momentum as a cost-cutting measure for the General Fund Budget and legislation will be introduced and supported by the Governor’s office. While there have not been any major announcements of agenda’s from the Republican majority or Democratic minority at this date, Alabama should expect the same as the past two years. The Republicans in the House and Senate have made increasing government efficiency, cutting government waste, and improving on Alabama being a business-friendly state as their top priorities and that will not change. With the budgets in a better condition and redistricting out of the way, an even greater focus will shift to these important agenda items. What will be introduced in 2013 to advance these goals, we will have to wait and see.

Credit unions in Alabama should expect another exciting legislative session in 2013. LSCU has once again put together an aggressive legislative agenda with public deposits and a modernization of the Alabama Credit Union Act as the headliners. In 2012, LSCU introduced legislation that would allow Alabama credit unions the ability to accept public deposits. As many of you are aware, the SAFE Act requires public funds to be deposited into financial institutions that are insured by the FDIC. The 2012 legislation added language that financial institutions insured by the NCUSIF could also accept public deposits. The legislation was heard in the Senate Banking & Insurance Committee, but failed to receive a recorded vote. In 2013, LSCU will continue to advocate and push for the passage of this common sense legislation. Credit unions are insured by the federal government, just as other financial institutions are, and should not be excluded from this right. Another piece of legislation that LSCU will be pursuing is a modernization of the Alabama Credit Union Act. Over the past year, a credit union work group comprised of state-chartered credit unions throughout Alabama met to review the Alabama Credit Union Act and recommend changes that would help state-chartered credit unions. These recommendations have been prioritized, and LSCU is working on legislation for 2013. The Alabama Credit Union Administration (ACUA) also wants to make changes to the Act, so LSCU is currently meeting with the ACUA in hopes of coming together on one, unified bill. There will always be other pieces of legislation that will impact credit unions either positively or negatively. Right of Redemption legislation, bill on electronic titling of vehicles, and others are certainly a possibility for 2013. LSCU plans to support and actively lobby on behalf of credit unions whenever these may arise. Look for weekly updates in eSignal once the session begins on February 5, and be ready and available to contact your representative or senator on credit union issues. If you have any questions or concerns, feel free to contact any of our Governmental Affairs team. ■

LSCU plans to support and actively lobby on behalf of credit unions whenever issues may arise. Look for weekly updates in eSignal, the League’s weekly electronic newsletter once session for both states begins, and be ready and available to contact your representative or senator on credit union issues. If you have any questions or concerns, contact the LSCU Governmental Affairs team.

A Magazine of the League of Southeastern Credit Unions

SIGNAL: Vol. 3, Issue 4

2013 Florida Legislative Session Jennifer Martin, director, Legislative Affairs (FL), LSCU After an early session in 2012 due to the once-a-decade redistricting process, the 2013 session will return to normal months. The 60-day legislative session will begin on March 5 and is scheduled to conclude on May 10. As always, the budget will be a major focus this session as the only constitutionally required item needed to be passed. It’s expected that state employees may again be the target of cuts, with employees’ benefits up for discussion. A recent study concludes contributions to Florida’s public-employee pension system need to increase $813 per household to fully fund pensions through the next 30 years. In 2011, state employees were required to put three percent of their annual salary into the state retirement system, seen by many as a three percent cut in salary. This issue is still under court review and remains a hot topic around the Capitol. The League’s top priority this year is to pass legislation allowing credit unions to become qualified public depositories. While last year’s bill was heard, it narrowly failed in a House committee by one vote. This year, the League’s Governmental Affairs team has been working hard with legislative leadership to ensure the bill is given fair consideration. Further, the League has been working with municipalities to build a coalition of entities wanting this legislation passed. Other issues the League will be advocating for include foreclosures, data security, and regulatory relief.

Ethics Reform For the first time in six years, House Speaker Will Weatherford re-created the House Ethics and Elections Committee to develop ethics and elections reforms. Senate President Don Gaetz, meanwhile, asked senators to adopt new conflict-of-interest rules to mirror the House’s tougher requirements prohibiting legislators from voting on bills in which they have a financial conflict. Both leaders are expected to push legislation next spring to give the Florida Commission on Ethics sharper teeth to go after politicians who don’t pay fines for unethical behavior.

Federal Health Care Act The Supreme Court’s recent ruling ensures that Florida must evaluate the new health care law and potentially make legislative changes to implement it. Florida has consistently resisted efforts to implement the Affordable Care Act, though Governor Scott has recently softened his stance and asked to meet with U.S. Secretary of Health and Human Services Kathleen Sebelius to discuss the issue. These issues are likely to evolve over the next several months, and the 2013 session will address Florida’s position on the new law.

Gaming With Florida emerging as one of the largest gambling states in the nation, legislative leaders are prepared to put gaming regulation on center stage in the next two years and renegotiate the revenuesharing compact with the Seminole Tribe at least a year early. President Gaetz and Speaker Weatherford are vocal opponents of expanding gambling, but leadership agrees that there needs to be clarity and direction as to where the state is going and the tribal compact will very likely be part of that.

Citizens Property Insurance Corporation & the Florida Hurricane Catastrophe Fund Support for reducing Citizens’ policy count has grown in recent months as policy makers look to shrink the potential assessment burden and enhance the private market. However, Citizens serves as a lower cost alternative in many instances because its rates are subject to mandated subsidization– a statutorily-imposed glide path. Discussion during session can be expected to center upon Citizens’ rate levels and coverage. Potential legislation relating to the size of the FHCF also might resurface. Earlier this year the FHCF advanced legislation that would gradually reduce its size and increase its cost over several years. ■

Jared Ross, Vice President, Governmental Affairs

Blake Westbrook, Grassroots & Political Action Coordinator (AL)

jared.ross@lscu.coop, x1012

blake.westbrook@lscu.coop, x2164

Jason Cochran, Director, Governmental Affairs (AL) Andrew Gonzalez, Grassroots & Political Action Coordinator (FL) jason.cochran@lscu.coop, x2159

andrew.gonzalez@lscu.coop, x1010

Jennifer Martin, Director, Legislative Affairs (FL)

Jordan Burroughs,

jennifer.martin@lscu.coop, x1150

Governmental Affairs Specialist jordan.burroughs@lscu.coop, x1008 SIGNAL: Vol. 3, Issue 4

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ADVOCACY

LSCU PACs See Success & Growth in 2012 Andy Gonzalez, grassroots & political action coordinator (FL), Governmental Affairs, LSCU As 2012 comes to a close, LSCU PACs have seen tremendous success and growth. ACULAC, CUPAC, and the LSCU Fed PAC have already surpassed what was raised in 2011 and are on pace to have a record-breaking year. The success this year can be attested to new and innovative ways that LSCU and member credit unions have approached PAC fundraising. Several credit unions have begun programs that make it fun and easy to contribute to the PACs. Payroll deduction, casual jeans days, and candy bar sales programs have increased significantly. The 2012 Silent Auction brought in almost 20 percent above what was raised in 2011 with close to 30 more items donated. Additionally, this year LSCU has introduced new methods to make PAC giving so much easier. At all LSCU conferences and events, governmental affairs staff has been on hand to take donations using the SquareÂŠ application on the iPad. Also, individuals can make contributions online via the new LSCU Action Center (www.lscuactioncenter.com). Although LSCU PACs enjoyed great success this year, there is still so much that can be done. As we begin to prepare for 2013, there are

several ways credit unions can prepare to continue supporting LSCU PACs. First, we encourage all credit unions to consider budgeting to make a corporate donation to the PACs. Corporate donations are a way state-chartered credit unions can contribute to the LSCUâ&#x20AC;&#x2122;s state PACs. Federally charted credit unions can contribute corporately to the CU-Vote Defense Fund to meet their state PAC goals. Another way credit unions can support the PACs is by implementing a payroll deduction program. Payroll deduction is automatic, painless, easy to administer, and, best of all, will help meet and exceed your PAC goals. To find out about the many ways to fundraise for the PACs, visit www.lscuactioncenter.com and click on LSCU PACs. Letâ&#x20AC;&#x2122;s make 2013 yet another record-breaking year for the PACs and increase our voice in Montgomery, Tallahassee, and Washington, D.C. If your credit union would like to get involved in PAC fundraising, contact LSCU Grassroots & Political Action Coordinators Blake Westbrook (AL) at blake.westbrook@lscu.coop, or Andy Gonzalez (FL) andrew.gonzalez@lscu.coop, for further information. â&#x2013;

First Annual Credit Union Quail Hunt 'RXEOHKHDG 5HVRUW LQ 7RZQ &UHHN $/ RQ -DQ 7KH KXQWV VWDUW DW IRU D KDOI GD\ KXQW DQG ZLOO LQFOXGH $ KDW JXLGH GRJV VQDFNV FOHDQLQJ DQG SDFNLQJ RI \RXU ELUGV DQG HQWU\ LQWR WKH 7UDS 6KRRWLQJ &RQWHVW

All proceeds from the hunt will support the LSCU FedPAC. For more information, contact Alabama Grassroots & PAC Coordinator Blake Westbrook at blake.westbrook@lscu.coop or 866.231.0545 ext. 2164.

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LSCU Legislator Profile

Representative Wes Long

Representative Wes Long was elected to the Alabama House of Representatives on Nov. 2, 2010. He is the managing partner of Long, Flanagan, and McDonald with offices in Guntersville and Huntsville. Wes has since continued his entrepreneurial pursuits and with ownership in multiple businesses, Long currently employs more than 200 local residents in his district. Wes is a founding member of the Marshall County Renters Association and currently serves on the association’s board. He is a member of the Alabama State Bar and of the Republican Party of Marshall County and serves on the House Financial Service Committee. He played football at the University of Alabama under Coach Gene Stallings, during which he earned All-SEC Academic honors, a trip to the Outback Bowl, and a letterman in the “A-Club.”

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How and why did you become interested in public service and politics in particular; and what led you to run for the Alabama House of Representatives? After the 2008 presidential election, I really became concerned with the direction in which our country was going. I especially had concern for the tax-payers – the people who create tax revenue. Being a small businessman myself and involved in several different industries, I felt it was time for me to quit complaining and start trying to work to make things better. I discussed this with my family and after seven or eight months of deliberation, I felt like I needed to put my name in the hat. So, I decided to run for state representative for the first time in 2010. If our society is to improve, I believe people must be willing to step up in a public service role. Being a true conservative, the main reason I ran was to try and be influential in reforming state government. What are the most important issues you see facing Alabama today? I see state’s rights being a very important issue. Entitlement reform is another issue that is very high on the list. And less regulation on business and industry is critically important to economic recovery. As a Christian, I also think that our founding Christian principles and family values should guide the policies we pass. With the 2013 Legislative Session around the corner, what are your top priorities? What would like to see the Alabama Legislature accomplish in 2013? I would like to see the legislature continue on the path of trying to make government more fiscally responsible and work more effectively. I believe we can achieve greater efficiency through a gradual downsizing and by reforming how government operates. Modern technology can allow us to better service the people of Alabama and save money as well by utilizing more self-help consumer procedures. Further, by not getting in the way of business, not creating laws that are burdensome, and repealing those that are, the legislature can create a more probusiness environment.

Credit unions are seeing an alarming increase in regulatory burden throughout Alabama. In your opinion, what can the Alabama Legislature do to help decrease over-regulation seen in the financial services industry? With the federal Dodd-Frank legislation on the horizon, I think the primary thing Alabama can do is to stay out of the way of the financial sector and the financial services industry. From small loan companies to credit unions to banks, the Dodd-Frank law is bad all the way around for the lending industry. I do not support it and would like to see it repealed. In Alabama, I think the key for us is to listen to the industry and not get involved in creating any undue and burdensome regulations. What role do you see for credit unions in serving the people of Alabama, and how do you see them as part of the continuing economic recovery? Small business creates 90 percent of all jobs in America. I believe the key to any successful small business and the key to entrepreneurs being successful is having access to capital. Credit unions are generally friendly to small business and young entrepreneurs. Credit unions allow access to capital so new businesses can be created and grown. Although there is talk

in the news about small business having more capital than ever before, I believe these small business owners have been choked through regulatory burdens and excessive regulation on the credit union industry, as well as most all industries that make capital available to small businesses. Our state legislature is focused on the creation of jobs and that includes passing and maintaining policy that reduces regulatory burdens. 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? I strongly believe that, in most everything, relationships matter. Whether it is a member at your credit union or a retail customer buying a product in a store, relationships are what get things accomplished in America. As a legislator, I value the input of my local constituency, and I like to hear from the people directly involved or impacted by issues being considered. I would advise credit unions to engage their local officers and members whenever there are important issues being considered by lawmakers. â&#x2013;

Rep. Long meeting locally with constituents.

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LSCU Legislator Profile

Congressman Dennis Ross

Congressman Dennis Ross is a life long Floridian, having been born in Lakeland, Florida. After graduating from Auburn University in 1981, he worked as a legislative aide for a member of the Florida House of Representatives. Following his year as an aide, Congressman Ross attended law school at Cumberland School of Law in Birmingham, AL, eventually ending up back home in Lakeland. He was elected to the Florida House in 2000 and served until being term limited in 2008. In 2010, he was elected to the United States Congress, serving Florida’s 12th District. He ran unopposed for re-election in 2012 and, due to redistricting, will now be representing Florida’s 15th Congressional District.

How and why did you become interested in public service and politics in particular; and what led you to run for Congress? I became interested in politics during high school; I was very active in student government at Lakeland High School. Consequently my then-future wife Cindy was active in student government as well. I have always had a conservative outlook on politics, stemming from the principles that our founding fathers laid out in the Declaration of Independence and the Constitution. These of course include the limited nature of government, as one with defined, finite powers, as well as the importance of federalism in our republic. I utilized those principles while in the state legislature. When I saw the path our country took this past decade, with massive over-spending, the metastasizing of our debt, and a government that continued to grow no matter what political party controlled it, I felt it was time to bring my voice and my principles to Washington to help stop this crisis. What are the most important issues you see facing lawmakers as we move into the 113th Congress? First, immediately after the election, we face the so-called “fiscal cliff,” which essentially entails several expiring tax-cuts and mandatory spending cuts that together could send the economy back into a full-blown recession. Our government needs to decrease the tax burden on employers as well as the debt burden that we are placing on our kids–measures that do those things will improve our economy. I believe we must also roll back the punishing regulatory regime in Washington, it acts as a $1 trillion tax on our businesses even when you leave actual taxes aside. We need to repeal Dodd-Frank and Obamacare and stop the EPA from issuing more regulations, as they cause incredible uncertainty for our job creators and are holding our economy back. You co-sponsored H.R. 1418, legislation to give credit unions greater flexibility to make small business loans. What do you see the role of small businesses is in the economic recovery, and what should credit unions be able to do to assist? A major obstacle we face in getting out of this economic crisis is a lack of growth. We need to help our small businesses expand production and investment so we can stimulate growth. There are 23 million small businesses across the country that account for more than half of the private workforce and output. The Small Business Administration (SBA) estimates that 65 percent of new

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SIGNAL: Vol. 3, Issue 4

jobs created are from small businesses. Access to capital is one of the major challenges facing small businesses and is preventing them from investing, hiring, and increasing production. And loans are hard to come by for many small business people, who desperately need them to expand their businesses. In many cases, the only way small businesses can get access to capital is through small credit unions. This is why I co-sponsored H.R. 1418, the Small Business Lending Enhancement Act of 2011, which would increase the lending cap on credit unions. What role do you see for credit unions in serving the people of Florida, and how do you see them as part of the economic recovery? The two million small businesses we have in Florida account for 75 percent of the state’s gross domestic product. These businesses are an essential component of Florida’s economy. The financial needs of small business owners are complex and vary among industries. Credit unions tend to have a local focus and therefore, have a comparative advantage when tailoring to the specific needs of individuals and businesses in their community. The proof is in the numbers; credit unions in Florida added 43,000 new members and increased business loans by three percent in the second quarter of 2012. Not-for-profit credit unions have been able to serve more Floridians and aide in the economic recovery by minimizing fees and delivering more personal service than other financial institutions. Aside from H.R. 1418, what major issues do you believe financial institutions such as credit unions should be watching? Regulatory compliance is my biggest concern for the financial industry’s future. The 2300-page Dodd-Frank Act is a prime

example of onerous Washington regulations hurting community banks and preventing a full recovery in the housing market. Although Dodd-Frank has not been fully implemented, we are starting to notice the effect it has on stifling growth and lending. For example, financial institutions have already started hiring compliance officers which charge hundreds of dollars an hour just to navigate through the maze of Dodd-Frank regulations. These are costs that are passed on to all of us. Small banks and credit unions feel the pain worse than the big banks- they have even less money to lend because of these regulations and the local economies they serve suffer as a result, not to mention the small banks themselves. If you could give one piece of advice to grassroots advocates for credit unions, what would it be? The market for lending institutions is rapidly changing due to innovations in social media and the Internet. Peer-to-peer (P2P) lending is a one billion dollar industry and has seen over 100 percent growth year over year. Because banks are not lending freely and more consumers are looking to get out of credit card debt, institutional investors are moving in and earning double-digit returns in the social lending markets. On March 22, 2012, the Jumpstart Our Business Startup (or JOBS) Act was signed into law; it included a crowd-funding provision that was key to opening up the market. Websites like Lending Club or Kickstarter, now have the potential to compete in this space. These innovations in online banking provide an excellent opportunity for credit unions and small banks to expand their access to the virtual market and to expand their consumer base. I would encourage credit union advocates to encourage their lawmakers to keep these markets free from excessive government interference. ■

(l to r) Cindy Ross, Cong. Ross’s wife, Art and Mary Wood, and Rep. Ross.

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Free Resource Tools Available on www.lscu.coop As a value of LSCU membership, member credit unions have access to these online tools, free-ofcharge. Simply log in at www.lscu.coop to begin using these resources.

InfoSight is your first stop when searching for compliance answers. Think of it as a free, online compliance resource at your fingertips, containing federal and state-specific content that is accurate, concise, and detailed on a wide range of topics and issues. InfoSight Provides: • Compliance Summaries & Checklists • Direct Links to Laws & Regulations • Links to Additional Important Resources • FAQs

RateMap is a unique mapping tool that provides users with access to key interest rates for a selection of the most commonly offered deposit and loan rates in your credit union’s backyard and across the country. With access to RateWatch’s national database of more than 90,000 branches for deposit data and more than 40,000 branches for loan data, competitive analysis is now only a click away. Credit unions can research by address, zip code, or city and state and narrow search results by filtering by institution type, product type, and rate.

PolicyPro provides credit unions a comprehensive suite of more than 200 model policies that have been researched, developed, and written specifically for credit unions by regulatory experts. This online operations policy manual system means no paperwork to manage, and it can be accessed via any computer. These policies are fully customizable to meet any individual credit union operations.

Compliance Free Web-Based Tool Provides Customized Policies for Individual Credit Unions Bill Berg, MBA, CCUE, CUCE, BSACS, vice president, compliance training & information, Governmental Affairs, LSCU Rolled out in October of this year, CU PolicyPro is an excellent addition to LSCU’s other web-based programs – InfoSight and RateMap. CU PolicyPro provides credit unions a comprehensive suite of more than 200 model policies that have been researched, developed, and written specifically for credit unions by regulatory experts. These policies are reviewed twice a year to meet National Credit Union Administration standards. This online operations policy manual system means no paperwork to manage, and it can be accessed via any computer. These policies are fully customizable to meet any individual credit union operations.

PolicyPro, InfoSight, and RateMap are “duessupported” programs and are offered to affiliates at no charge as part of the value of affiliation. Registration is easy and normally takes about 24 hours to complete. First you must login to the LSCU website in order to access CU PolicyPro. Go to www.lscu.coop and login to the LSCU website using the Site Login (gray button in upper right of LSCU homepage). Under the Governmental Affairs tab, click on Regulatory Advocacy and then InfoSight/RateMap/PolicyPro. Scroll down to the PolicyPro section, and click on the CU PolicyPro (Alabama or Florida) link. Fill out a few brief questions and submit. You can also reach it on the LSCU homepage by scrolling down to the RateMap/CU PolicyPro box. Just be sure to login to the LSCU website first. Only one person should register from each credit union - this person will be designated as the “Primary Admin” user for the credit union. Once the registration is submitted, your CU PolicyPro implementation will be set up, which should take two to three days, and the Primary Admin will be sent an e-mail with log-on instructions and resources to help get started.

Once logged on, users can begin using CU PolicyPro immediately, customizing the model policies and adding existing policies. The Primary Admin can also add additional staff as users who can access CU PolicyPro. Any additional staff registering from the credit union will be directed to the Primary Admin to gain access. At the Leadership Development Conference, there was an extra breakout session on CU PolicyPro with the principal administrator of the system Mary Ann Koelzer. Koelzer has prepared a series of training videos to enable users of the system to obtain the maximum from it. The links to these videos are on the side bar on the left side of every CU PolicyPro implementation manual and are emailed to you. To date, a total of 45 credit unions are registered to use CU PolicyPro. If you have any questions about this tool, contact Bill Berg at bill.berg@lscu.coop or 866.231.0545, x1028. ■

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INITIATIVES

Cooperative Initiatives LSCU Credit Union Philosophy in Action Workshop: “Ideal for All Managers, Mid-Level & Upper” Laura Vann, vice president, Cooperative Initiatives, LSCU The League of Southeastern Credit Unions presented a Credit Union Philosophy in Action Workshop in October. The workshop, held in Orlando, attracted a variety of credit union employees including those brand new to credit unions and those with extensive credit union experience. Participant Angela Robinson, training manager at Martin Federal Credit Union said, “This class would be ideal for all managers, mid-level and upper. Being in the credit union industry for seven years had not yet provided me with the level of education I received at this workshop.” Nan Fogle, mortgage servicing manager at CFE Federal Credit Union, said the workshop was “a great reminder of why we do what we do.”

NCUF’s Lois Kitsch talks to the group about the credit union operating principles during the two-day CU Philosophy in Action workshop.

The workshop was modeled after the National Credit Union Foundation’s (NCUF) successful Credit Union Development Education (CUDE) program and provided participants with a historical perspective on credit unions and cooperatives while focusing on how to implement the cooperative principles of credit unions in their day-to-day work activities. Lois Kitsch, national program director of NCUF, was the facilitator of the workshop. With her wide variety of experience in the credit union movement, including working with developing cooperatives in Afghanistan and the Philippines, her knowledge and insights made even the history lessons exciting.

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The interactive workshop included an introduction to cooperatives, a history of the U.S. credit union movement, a group session delving into the operating principles of credit unions, and examples of how credit unions focus on their values every day. A highlight of the workshop was the Not for Profit, But for Service learning map. The participatory discussion focused on history, new providers of financial services in the marketplace and how the operating principles (see below) can carry credit unions into the future. The participants also learned about the connection between the credit union’s bottom line and its social values by examining a credit union balance sheet. “I was told to expect great things that would be relevant to my current position and credit union, and I have many ideas to take back,” said Michael Hemminger, vice president of operations & accounting at Sarasota Municipal Employees Credit Union. “I learned quite a bit and came away with some new ideas from Lois, the LSCU folks, and also from my peers. I’m excited to tailor some of those ideas to fit SMECU,” he added. “On top of the education, I very much enjoyed both days. I had a lot of fun, which I very much attribute to the way you presented the information.” Mark your calendar, and plan for your credit union to participate in one of the two Credit Union Philosophy in Action Workshops scheduled for 2013. The first workshop will be held in Birmingham on April 23-24, and the second workshop will be held in Orlando on October 23-24. For more information, contact Laura Vann, VP, Cooperative Initiatives at laura.vann@lscu.coop or 866.231.0545, x2181. ■

CREDIT UNION OPERATING PRINCIPLES D E M O C R AT I C S T R U C T U R E • Open & Voluntary Membership • Democratic Control • Non-Discrimination SERVICE TO MEMBERS • Distribution to Members • Building Financial Stability • Service to Member S O C I A L G OA L S • Ongoing Education • Cooperation Among Cooperatives • Social Responsibility

High School Financial Planning Program Provides Resources Needed to Teach Students Financial Responsibility Adena Whitman, director, member relations, Cooperative Initiatives, LSCU Using teacher feedback and program evaluation findings as its guide, the National Endowment for Financial Education (NEFE) launched major upgrades this year to the NEFE High School Financial Planning Program (HSFPP), its flagship financial education program. The revamped curriculum offers the same practical content it always has, but in a more flexible format split into six modules: spending, borrowing, earning, investing, financial services, and insurance. This, along with an ever-growing collection of content and learning activities on its website (www.hsfpp.org), enables teachers to tailor the program based on their individual needs and student population.

Grounded in the belief that regardless of background or income level, financially informed individuals are better able to take control of their circumstances, improve their quality of life, and ensure a more stable future for themselves and their families, NEFE’s mission is to inspire educated financial decision-making for individuals and families through every stage of life. LSCU has been using this non-profit program to spread quality financial education tools into the credit union community through train-the-trainer events and community workshops. One of the biggest train-the-trainer events was held in November, continuing an ongoing partnership with the Alabama Society of CPAs (ASCPA), which uses its members to sponsor a classroom financial education blitz one day every year. “Without NEFE, we would be reinventing the wheel and at a significant cost, both in resources and money,” said Lacey Williams, communications coordinator for the ASCPA. “NEFE does a great job of explaining money management with real life examples for the students. The updated 2012 version does not overwhelm the students with just another workbook. This program is not only easy to teach, but it’s created by experts, meets all fifty states’ educational standards, is adaptable to our time constraints, and, best of all, it’s free.” 26

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“This is the third year of our partnership with the League for our classroom blitz,” Williams continued. “We were able to reach more than 70 volunteers with our training webinar, and those volunteers then went out into the schools in Alabama, sharing the NEFE program with more than 3,600 students all in one day. Our goal is to keep this upward trend continuing, reaching out to more schools and students throughout the state every year.” The HSFPP is specifically designed to equip students in grades 8-12 with fundamental personal finance skills to prepare them for financial independence. It can be taught in a variety of settings such as a classroom, after school programs, and workshops. NEFE also offers other courses which cross all of the life cycles, including financial workshop kits that contain scripts, lesson plans, and CashCourse, a customizable, online tool directed at college students. The League can show credit unions how to bring financial education to their membership as well as out into the community. The resources are free – all it takes is the time and staff to learn the programs. The League hosted four workshops in 2012 at individual credit unions and is planning to host at least four in 2013. If you would like to host a train-the-trainer meeting, contact Adena Whitman at adena.whitman@lscu.coop. Seminars can be customized to your individual requirements. ■

NEFE HSFPP Resource Website Visit www.hsfpp.org to find an ever-growing collection of learning tools, articles, and resources to enhance and build on the classroom experience. • HSFPP Homepage. This provides general information about the program and how to be involved with financial literacy initiatives. Use this to introduce the program to anyone who supports teaching teens about personal finance. • Teacher Portal. Teachers who work with teens in schools and other nonprofit organizations must register to access this portal. From here you have access to the instructional materials, content resources, and an interactive teacher forum. • Student Portal. Students (and their parents) who are engaged with the HSFPP can register to access the program materials. The portal gives access to electronic activity files and content resources.

FOUNDATION

Foundation Foundation’s College Internship Program Pilot Proves Beneficial to Students and Credit Unions Leonard Parkhurst, director, Southeastern Credit Union Foundation, LSCU The Southeastern Credit Union Foundation (SECUF) successfully launched its college internship program in 2012. Students were matched with small asset size credit unions, giving the students valuable skills and experience to enhance their classroom learning. Participating credit unions benefited from the fresh perspectives offered by the students and gained valuable assistance in their day-to-day operations. According to April Ales, LSCU Member Services Specialist who coordinated the pilot program for the foundation, students must meet basic eligibility requirements. “The prospective interns must attend a college or university in Alabama or Florida, be a junior or senior, have a 3.0 overall grade point average, and be majoring in finance/ accounting, business, economics, marketing, communications, or a related field,” Ales said. Students must complete the SECUF internship application form and submit at least one recommendation from a faculty member at their college or university. For consideration of internship placement, a credit union must establish and submit a job description for the internship position as well as submit written goals and objectives for the internship position. A template for developing the goals and objectives for the intern is provided. Templates for mid-point and final evaluations are also provided. Applications and other materials are available on the SECUF website, www.supportourcucommunity.org.

Erin Tupper, center back row, helps at the Tallahassee-Leon FCU’s bake sale fundraiser.

For the pilot program, interns were placed at Tallahassee-Leon Federal Credit Union, Flag Credit Union, and Community South Credit Union. Two interns were placed at Tallahassee-Leon Federal Credit Union, Erin Tupper from Florida State University and Shelby

Dell from Florida A&M University. Michael Akers, vice president, marketing & business development at Tallahassee-Leon Federal Credit Union said that the internship program brought huge value to TLFCU. “Being a smaller credit union, we all wear lots of hats. Having their extra hands provided additional capacity in the marketing area, as well as in other areas of the credit union. The interns were able to assist with everything from member development activities, answering phones, and writing articles for our website. Overall, their involvement helped us work towards our two biggest tasks this year—efficiency and loan growth.” Intern Shelby Dell, a public relations major, said that she was excited about the internship from the time she received the outline of her duties. On her first day at the credit union, she was surprised by how nice everyone was. “It wasn’t awkward or hard to ask questions, and everyone was always ready and willing to lend a helping hand. I think Shelby Dell (r), a public relations major at one of the contributing factors FAMU, interned at Tallahassee-Leon FCU. of why the internship was such a success for me was because I had a team of people backing me up whenever I needed guidance or help,” she said. Erin Tupper, a marketing and management major, was eager to put classroom learning into practice. “Even before I started the internship, I set many expectations for myself. One expectation that I had was to learn more about financial institutions, and specifically credit unions. I also wanted to gain management experience, in terms of dealing with individual member expectations and problems. Being that I am also a marketing major in addition to a management major, I wanted to learn more about online marketing in terms of Facebook, Twitter, and the credit union’s official website,” she said. “After completing my internship at TLFCU, I feel that I accomplished everything that I set out to do,” Tupper added. “All of my expectations were met and some were even way exceeded.”

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Upcoming Governmental Affairs Conference Dates in 2013

Join the League in meeting with legislators face-to-face Alabama State GAC April 9-10 Montgomery, AL Embassy Suites Hotel Conference Center

Florida State GAC March 19-20, 2013 Tallahassee, FL Governorâ&#x20AC;&#x2122;s Club

CUNA GAC Feb. 24-28, 2013 Washington, D.C. For more information visit www.lscu.coop or contact LSCU VP, Governmental Affairs Jared Ross at 866.231.0545, x1012.

SECUF Scholarship Program (Continued) Dell echoed Tupper’s opinions about the success of the internship program. “After completing my internship, I was satisfied with my experience because I was able to apply what I learned in the classroom to my work with TLFCU,” she said. “Overall, the internship program was a great help to me and to TLFCU,” said Akers. He said the interns developed a strong sense of ownership of their projects. “They learned how to best organize their tasks to ensure their projects stayed on task and that deadlines were met. They also both learned a lot about financial services and credit unions, which was a great byproduct of working within the credit union. These skills will go on to help them whether or not they end up working for a credit union in the future.” Brian Ringo, a graphic design major at Tallahassee Community College, was placed as a marketing intern at Flag Credit Union. According to Barbara Rash, office manager at Flag CU, the credit union’s goal was for the intern to gain the ability to take a project from conception to completion: create a promotion, gain approval, and obtain pricing to produce the piece. The intern was also responsible for updating written and internet material to acknowledge changes such as rates and promotions. The intern was also charged with participating in meetings to learn the business aspects of marketing. Rash said participating in the internship program benefitted Flag Credit Union because the Foundation “provided a wellrounded individual we could work with. Our intern accomplished the goals and objectives for the internship by working independently, meeting deadlines, and producing final products.” Sue Massa, CEO of Flag Credit Union, said, “We had been looking for a knowledgeable and dependable marketing person for many years and we have finally found that person through the college internship program. Because of Brian’s talent and expertise he was hired as a part-time Marketing Specialist at the end of his internship with us.”

Kimberly Gantt at Community South, working on various projects during her internship through the SECUF College Internship Program.

Kimberly Gantt, a business management major at Chipola College, was placed as a business intern at Community South Credit Union. The intern was introduced to fixed assets tracking, inventory procedures, and investments, according to Nina Adams, Community South’s vice president of finance and accounting. “The most valuable experience I gained while interning at the credit union was having the opportunity to learn first-hand how to build relationships with the members in addition to broadening my knowledge on a career path and leadership skills. I am so grateful to have been given this opportunity by the credit union and the foundation,” said Gantt. If your credit union is interested in participating in the 2013 college internship program or needs more information about the program, contact April Ales (866.231.0545, x1038 or april.ales@lscu.coop), Laura Vann (866.231.0545, x2181 or laura.vann@lscu.coop) or Leonard Parkhurst (866.231.0545, x1154 or leonard.parkhurst@lscu.coop). The Southeastern Credit Union Foundation plans to fund 10 paid college internships in 2013. ■

Overview of the SECUF College Internship Program 1. 2. 3. 4. 5.

12-week internships are available at designated credit unions in Alabama and Florida. Selected applicants must work a minimum of 20 hours per week for the duration of 12 weeks. Selected applicants will receive up to $3,500 in pay for the internship. Internships are available for funding throughout 2013. The Southeastern Credit Union Foundation will provide funding for the internship program but the selected applicants will be paid by their assigned credit union.

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EDUCATION

League Education Collecting Accurate Employee Performance Data Using the “What” Question Technique Jack Wolf, PhD, CPT, Senior Partner of Lifelong Learning Partners One of the keys to successful performance improvement is to base decision-making processes on sound data. The collection of complete, unbiased, and accurate information is necessary. Two issues related to data collection are how to collect it and what to collect. Up to now, surveys, questionnaires, focus groups, and interviews have been the mainstay of many managers when collecting information. However, these methods can produce results that are not spontaneous and may be biased due to factors such as group dynamics, learning styles, and possible job security concerns of the respondents, i.e. “what do they want me to say?” One of the most successful methods that can be used to collect the best quality data is the “What” Question Technique. The technique is simple: 1. Prepare a list of “what” questions that focus on current informational needs as well as current workplace attitudes. Each question should begin with the word “what;” asking “why” often triggers an emotion-based, defensive response. 2. Ask for three written responses, in no particular order, to each question. Index cards work well for collecting data. Use one card for each question. Once the responses are in writing, ask individuals to prioritize their answers, “1” through “3” on each response sheet, using “1” as the highest priority. Getting responses in writing is more important than it may seem. People won’t argue with their own information once it is in writing, and they will put more thought into their responses. And, written responses can be collected anonymously to ensure the highest level of objectivity with the responses.

Asking the Right Questions The most important part is to ask the right questions in the right way. As mentioned above, each question in the list of questions should begin with a “what.”

1. Start with General Questions. General questions (see sidebar) should be asked before more specific questions are addressed. This type of question allows the manager to engage the employees immediately by writing and gets them prepared for more specific questions. The low-threat, low-risk format of general questioning allows for safety, ownership factors to be introduced during this process.

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2. Move on to Specific Questions. After the series of general questions has been completed, the manager, trainer or team leader can move ahead with more specific questions (see below). These types of specific questions get more to the point. It asks the respondent to think more deeply about the actual work they do on a day-to-day basis. Since specific questions ask for more in-depth thought, the employees may also become more in touch with their own belief systems. After the session, compile and quantify the responses to each question and present to management for use in future decisionmaking and training processes. This technique can actually be used in a variety of applications. It will help performance specialists bring a touch of reality to their recommendation and decision-making process with management. Jack Wolf, Ph.D., was a speaker at the LSCU LDC. He presents seminars on lifelong learning, performance improvement, leadership, and has developed creative ways to collect employee and customer data for improved performance. ■

Sample General Questions • • • •

What are the three most important functions of my job? What are three of my greatest professional assets? What are three of my greatest personal assets? What are the three key components to improving my performance? • What are three ways to motivate me? • What are three ways to un-motivate me? • What are the three greatest problems that we have with our current member service program?

Sample Specific Questions • What are three problems we have concerning _______________? • What three things could management/your supervisor do that would assist you with your job/project/training, etc.? • What are three things we could do to increase our brand recognition (or member referrals, etc.)?

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

January 2013 ............................................................... ... 3 Understanding the New NCUA Part 741 Loan Workout & Nonaccrual Policy & Regulatory Reporting for TDR Regulations 9 IRA & HSA Review & Update – 2012 & 2013 Tax Years 10 Title Insurance Policies, Commitments & the New ALTA Endorsement 16 LSCU Regulatory Compliance Update Mobile, AL 16 New Security Officer Training: Issues, Reports, & Best Practices 17 UCC 3 & 4 on Negotiable Instruments: Time Frames, Legal Concerns, & Member Issues 18-19 LSCU Quail Hunt FEDPAC Fundraiser Town Creek, AL 23 Qualifying Borrowers Using Personal Tax Returns Part 1: Basics, Itemized Deductions, Interest & Dividend Income, Sole Proprietorships, & Capital Gains 24 Director Series: IT Governance: What the Board & Supervisory Committee Need to Know to Manage the Credit Union’s Information Technology Assets 30 Countdown to the New CTR Report: Are You Ready for the March 31, 2013 Deadline? 31 Mandatory Compliance Series: Compliance Rules the Board & Senior Management Must Know

February 2013 .............................................................. 5 5 6 12 13 14 19 20 20

LSCU Small Asset Size Credit Union Conference Orlando, FL ACH Death Notification Entries (DNEs) & Reclamations: Your Credit Union’s Liability Frontline Excellence Series: Dissecting Regulation CC: Holds, Substitute Checks & Check Clearing Tax Refunds: ACH Exceptions, Posting & Credit Union Liability Facebook 101 Getting Started: Policies, Risk Assessment, & Next Steps CFPB Guidance on Handling Consumer Complaints & Inquiries: Collecting, Investigating, & Responding New BSA Officer Training LSCU BSA Training Workshop Jacksonville, FL Qualifying Borrowers Using Personal Tax Returns Part 2: Income from Rentals, Royalties, Partnerships, S Corps, & Farms

24-28 CUNA GAC ention Center, Center Washington, Washington DC Washington Con Convention 26 Guidelines for OREO 27 Consumer Debt Resolution Series: Advanced Collection Techniques That Reduce Delinquency & Loss

March 2013 .................................................................. 5

6 12-13 13 14-15

14 19-20 19 20 26 26 26-27 27 28

What You Need to Know about Guarantors, Co-Signers, Personal Guarantees, & Joint Applications, Including Security & Collateral Implications Fair Lending Comparative File Review LSCU IRA Essentials & Beyond Essentials Training Birmingham, AL Monitoring the Effectiveness of Your Compliance Program: Quality Assurance Testing & Auditing LSCU/CUES Credit Union Executive Dialogue (Large Asset Sized Credit Union) Miami, FL Consumer Financial Protection Bureau Update: What’s in Effect, What’s Imminent, & What’s on the Horizon LSCU State Governmental Affairs Conference (GAC) Tallahassee, FL Flood Insurance Compliance Update: Requirements, Issues, & FAQs Fair Credit Reporting & FACT Act Risk-Based Pricing Notices: Clarifying the Confusion LSCU Small Asset Size Credit Union Conference Birmingham, AL Head Teller Development: Managing Dual Control & Cash Limits LSCU ALM Essentials & Advanced Training Miami, FL Director Series: Enterprise Risk Management for Credit Unions: A Primer Opening Minor Accounts: Ownership, Access, & Multi-Party

*Bolded listings denote workshops and conferences. Non-bolded listings denote webinars.

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April 2013 ..................................................................... 2 3 9-10 9 10 16 16 17-19 17 18 23-24

23 24

Meeting the Requirements for Capital Adequacy & Contingency Frontline Excellence Series: The Key to Cross Selling & Member Retention LSCU State Governmental Affairs Conference (GAC) Montgomery, AL Mandatory Compliance Series: Compliance Rules the Frontline Must Know ACH Rules Update 2013 LSCU BSA Training Workshop Mobile, AL Consumer Debt Resolution Series: Maximizing Recoveries on Charged-Off Loans LSCU Chapter Leader’s Retreat Pensacola, FL (Invitation Only) UCC Article 9 Default Provisions: What Secured Creditors Need to Know Duties of the Board Secretary: Fundamentals, Best Practices, & E-Package Delivery LSCU CU Philosophy in Action Workshop & CUNA/LSCU Orientation Birmingham, AL BA Lending Update 2013: Trends, Regulations, & a Look at SOP 50 10 Opening Personal Accounts: Membership, Ownership, & Access

June 2013 .................................................................... 4 5 6 7-14

Your Depositor Has Died: Actions to Take, Mistakes to Avoid Mandatory Compliance Series: Compliance Rules Lenders Must Know Account Card Mistakes & How They Affect Members SRCUS Southeast CUNA Management School The Georgia Center, Athens, GA 11 Supervisory Committee Duties & Responsibilities 12–15 LSCU Annual Convention & Exposition JW Marriott, Orlando, FL 12 Nuts & Bolts of Effective Metro 2 Credit Reporting Via e-OSCAR 18 Regulator Issues & Update for the Credit Analyst 19 Pricing Consumer Loans for Profitability 27 Understanding Letters of Credit: The Parties, Their Roles, & Potential Liability 30–July 3 CUNA America’s CU Conference Hilton New York, New York, NY

May 2013 ...................................................................... 2 Effective Contract Negotiation, Review, & Management: 5 Things Vendors Don’t Want You to Know about Contracts 7-8 LSCU ALM Essentials & Advanced Training Birmingham, AL 7 IT Crisis Management: Business Continuity, Disaster Recovery, & Incident Response 8 Director Series: Understanding the ALLL for Directors 14 Legally Handling ATM & Debit Card Claims Under Regulation E 15 Line-by-Line Loan Review for Consumer, Commercial, & Residential 16 LSCU Disaster Recovery Conference TBD, FL 16 Frontline Excellence Series: Compliance at Account Closing 21 LSCU BSA Training Workshop Birmingham, AL 21 FFIEC Guidance on Cloud Computing: Considerations for Credit Unions 22 The Branch of the Future: How Branches Will Serve Members Who Don’t Need Branches 23 LSCU Disaster Recovery Conference Mobile, AL 29 When Is an Item Payable? Stop Payments, Return Items, & More

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July 2013 ...................................................................... 9 Handling ACH Origination Exception Issues 10 Consumer Debt Resolution Series: Collecting Decedents’ Accounts 11 Internet Fraud Claims: Who is Liable? 14-17 SRCUS Southeast Regional Directors Conference Charleston, SC 16 Simple Guide to Asset Liability Management that Everyone Can Understand 17 LSCU BSA Training Workshop Tuscaloosa, AL 17 Frontline Excellence Series: Avoiding Loss at the Teller Line 18 Interagency Appraisal & Evaluation Guidelines: Appraiser Selection, Review, Policies, & Procedures 23 Mandatory Compliance Series: Compliance Rules All Staff Must Know: Red Flags for ID Theft, Bribery, & Privacy 24 LSCU BSA Training Workshop Ft. Lauderdale, FL 24 Business Writing Boot Camp, Including Submission & Critique of Your Own Writing Sample 30 Director Series: Understanding & Utilizing Call Reports for Credit Union Governance

August 2013 ............................................................... 21-23 SCUMA Annual Meeting Hilton Sandestin Beach Golf Resort & Spa, Destin, FL 4-7 LSCU Supervisory Committee Conference Destin, FL 6 Home Equity/Second Lien Risk Management 7 Assessing E-Banking Services & Delivery Channels: Strategic Deployment & Risk Assessment 8 Is Your Member Fully Insured by the NCUSIF? Best Practices & Common Mistakes 13 Electronic Compliance: Tools, Policies, & Best Practices for Email, Internet, Mobile, & Social Media 20 Underwriting Basics: Interviewing, Credit Reports, Debt Ratios, & Reg B 21 Consumer Debt Resolution Series: Modifications, Workouts, & Rescue Options: Working with Troubled Members 27 Directors & Financial Literacy Session 1: Understand Your Credit Union’s Financial Condition with Key Ratios, Balances, & Estimates 28 Protecting the SBA Guarantee Start to Finish

September 2013 .......................................................... 4 5 10 10-11 11 12 12 17 18-19 18 19 25

Putting the “Credit” Back in Credit Unions: Making Loans Members Want Garnishment Rules: Including Accounts Receiving Federal Benefit Payments LSCU Regulatory Compliance Update Tallahassee, FL LSCU Hike the Hill Washington, DC Frontline Excellence Series: Detecting Counterfeit Items & Fraudulent ID LSCU Regulatory Compliance Update Birmingham, AL Handling Member Credit Report Disputes Directors & Financial Literacy Session 2: Monitoring & Measuring the 9 Risks Your Credit Union Faces LSCU ALM Essentials & Advanced Training Tampa, FL Mandatory Compliance Series: Compliance Rules Deposit Operations Must Know Skip Tracing Tools & Techniques Conducting the 2013 ACH Audit

October 2013 ............................................................... 1 2 8-9

Consumer Debt Resolution Series: Advanced Bankruptcy Issues From Prospect to Member: Skills & Tools for Successful Business Development LSCU Collections & Bankruptcy School Orlando, FL

8 9 15-16 16 23 24 29 30

Director Series: Documenting Your Strategic Plan Years 1, 3, & 5: Meeting Examiner Expectations Electronic & Hard-Copy Records: What to Keep, What to Destroy, What Holds Up in Court LSCU IRA Essentials & Beyond Essentials Training Jacksonville, FL Conducting an HR Audit: Compliance Risks, Audit Areas, & Best Practices Dealing with Adverse Action: What to Do & When to Do It HMDA Solutions: Achieving Data Integrity for Effective Fair Lending Analysis Critical Risk Factors in Loan Portfolio Management Simplifying the Compliance Function: Tools, Checklists, & Reporting to Keep You on Track

November 2013 ........................................................... 3-6

CUNA BSA Conference Hilton Orlando Lake Buena Vista, Orlando, FL 5 UDAAP: Civil Money Penalties & Examiners’ Findings on Unfair, Deceptive, or Abusive Acts or Practices 6-8 LSCU Leadership Development Conference Grand Marriott, Point Clear, AL 6 Call Reports: What to Look for, Entering Information, & Why It’s Important 7 Frontline Excellence Series: Advanced Endorsement Issues: POAs, Businesses, Trusts, & More 13 Mobile Payments for Credit Unions: Impacts, Choices, & What to Do Next 14 Indirect Lending: Risks, Rewards, Controls, & Common Mistakes 19 Fair Labor Standards Act: Sorting the Dos & Don’ts of Exempt & Non-Exempt Pay Issues 21 Form 1099 Reporting: Third-Party Vendors, Foreclosures, Debt Forgiveness, & More 26 Compliance Update on Nonresident Alien Accounts: Opening, Tax ID Numbers, IRS Issues, & More

December 2013 ........................................................... 3 4 5 10 11 12 17 18

Consumer Debt Resolution Series: Avoiding Liability in the Collection Process Mandatory Compliance Series: A Fresh Look at Robbery Preparedness Cracking the Code on Risk-Based Examinations: 10 Techniques to Ace Your Next Exam Managing Day-to-Day ACH Risk Documenting Your Required Information Security Program 12 Steps to Effective Expense Control: Practical Techniques for Cutting Costs & Increasing Profits Regulation E vs. ACH Rules: Which One Prevails? Director Series: Top 10 Questions Board Members Need to Ask Now!

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COMMUNICATIONS

Communications Image Campaign Doubles Awareness in One Year Mike Bridges, vice president, Marketing & Communications, LSCU

The goal of every marketing campaign is to make an impact on the target audience. The execution of the plan is critical. The LSCU Cooperative Image Campaign set out in 2010 to raise awareness of credit unions by targeting the Gen X demographic. The Cooperative Image Campaign Task Force also set out to develop a campaign that complemented credit union marketing efforts. The two would work together to heighten the message that consumers were getting in their respective media markets. After two waves of the Cooperative Image Campaign, the plan is working very well. The LSCU measures the Cooperative Image Campaign with three different tools: third-party research, Call Report data, and Google analytics. The data from these three methods form a very clear picture of the impact of the Cooperative Image Campaign. Following the second wave of media buys this summer, the awareness of credit unions in Alabama and Florida jumped from 23 percent to 50 percent. The first number represents the awareness of credit unions before the first wave of media buys in September 2011. That means -- in one year -- the awareness of credit unions jumped 27 percent! That is phenomenal. Breaking down the awareness numbers by state shows that the awareness of Alabama credit unions jumped from 29 percent precampaign to 59 percent following wave two. A 30-percent jump far exceeded everyone’s expectations. In Florida, awareness rose from 19 percent pre-campaign to 41 percent following wave two. This is also a very healthy jump in awareness. Florida is a much more competitive state with more consumers so it’s not a complete surprise that awareness was lower than in Alabama. The League contracts with the Southeastern Institute of Research (SIR) to measure the campaign through an online survey. After two waves, SIR told the League that the campaign “is getting consumers’ attention and it’s persuasive.” The research showed that the more consumers saw ads, the more they understood what a credit union is and the more likely they are to join. The Call Report data shows that more people are joining Alabama and Florida credit unions. Through two waves of advertising, 195,000 new members have joined credit unions in the two states. This is 120,000 more than joined a credit union in the previous four quarters before the campaign. Credit unions have added $3.6 billion in assets during the two waves of the campaign which is $1.4 billion more than the previous four quarters. The most surprising part of the campaign analysis was the second wave online media buy. In every market, the media buy 34

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included online behavioral targeting. Behavioral targeting is when the campaign ads pop up when an internet user searches certain terms and websites. This helped to push 69,000 consumers to www.betternameforbanking.com, the campaign website. This is 4,000 more visitors than the first wave. Also, the majority of visitors clicked through the online ads to get to the website. This was a reversal from wave one where more people typed in the website URL. The ads were pushed out through YouTube in seven media markets and more than 96,000 people viewed them; again, a phenomenal number. The promises of the LSCU Cooperative Image Campaign are coming true. Awareness is being raised for consumers and it’s pushing them to join a credit union. The campaign is complementing credit union marketing campaigns, making a very good one-two punch in media markets across both states. The 2013 Cooperative Image Campaign is being formulated. The idea for next year is to extend the media buys longer in each market. The League hopes credit unions will continue to support the campaign that is clearly working. ■

In one year – the awareness of credit unions jumped 27 percent!

Raising Awareness

Benchmark Aug. 2011

Wave 1 Sept. 2011

Wave 2 June, July, Aug. 20122

NEWS

League News 2012 LDC Highlights The Leadership Development Conference (LDC) was held Nov. 6-9 in Point Clear, AL. The conference was rebranded to include “leadership” to help equip credit unions with the skills necessary to run their credit union. More than 300 people attended the LDC which included keynote speakers Jack Wolf and Ken Gronbach. Wolf challenged credit unions to shift their focus to performance-based leadership. Gronbach showed attendees where demographics are shifting and how credit unions can benefit from courting Gen Y. Rep. Jo Bonner (R-AL) spoke at the Governmental Affairs luncheon. There were 11 educational breakout sessions and three roundtables for credit unions based on their asset size. The exhibit hall featured nearly 30 vendors and plenty of time to mingle and find solutions that fit attendees’ needs. ■

SAVE the DATE for the 2013

LDC!

November 5-8 Point Clear, AL

INDUSTRY

Industry

Q&A

with Corporate America’s New President, Pete Pritts

Pete Pritts joined Corporate America Credit Union as president/CEO in November 2012. Pete has 25 years of experience in the credit union industry, the vast majority in corporate credit unions. Prior to joining Corporate America, Pete served as president/CEO of First Corporate Credit Union in Phoenix, Arizona. While at First Corporate, Pete served on the boards of numerous industry organizations: CU Business Group LLC, a securities broker dealer, various payment system organizations, and the Arizona Credit Union League’s legal and legislative committee. In 2010, Pete received the Arizona Credit Union League’s VOCUP (“Very Outstanding Credit Union Person”) award in recognition of his leadership and accomplishments. He earned a bachelor of science in finance from California State University and a master of business administration from the University of Phoenix. Pete is the proud father of two daughters. He is also a private pilot and enjoys sports, exercise, and reading in his spare time.

What attracted you to the Corporate America Position?

With the exception of one year, I have worked for credit unions my entire career. It’s what I do. After becoming aware of the opportunity at Corporate America to continue to serve credit unions and become part of a great team, I had to go for it.

How can a corporate credit union partner with its member credit unions? It is very simple – bring value to the table. Corporate credit unions should be in the background assisting credit unions in serving consumers better than any alternative. Focusing on what is best for credit unions is a guiding light that should drive success for a corporate credit union. Regardless of the product or service, do it right, do it well, and boldly serve. Credit union folks are not shy and will tell us when we are off track. We must listen, learn, adjust, and move forward as a trusted partner.

What are the opportunities you see for Corporate America? 1) 2)

Recognize and utilize the skills of our talented staff in our efforts to drive value into our member credit unions Leverage the many relationships built by the team here at CACU to deepen business partnerships

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Continue adapting to the changing regulatory and operating environments to strengthen our solid financial and operating foundation – a direction well underway as driven by staff and board members before my arrival Further emphasize product and service enhancement and competitive advantages in our relentless and ongoing journey towards excellence Always remember that we were built and exist to serve credit unions

How do you see the future of the corporate credit union system? Industry changes have been driven by the worst economic conditions the world has seen in 80 years. Consumer behavior has changed, regulations have changed, and we now operate in a different environment. The result has been fewer corporates, yet not necessarily larger corporates. Credit unions control the future of corporates, as should be the case. So at the risk of sounding like a politician (with all due respect), corporates may or may not thrive. However, I know most of the leaders at corporate credit unions, and I believe that corporates will thrive and remain important to credit unions. ■

Credit Union Vendor Management to Reduce Burden of Collecting Vender Due Diligence & Vendor Relationship Management LEVERAGE, alongside Strategic Partners and CU Solutions Group, recently agreed to acquire Credit Union Vendor Management (CUVM) out of Denver. This full-service solution works to reduce the burden associated with collecting vendor due diligence and managing vendor relationships that helps credit unions minimize vendor risk. “This collaboration between our three league service corporations is a great example of the type of partnership needed to bring great products and services to credit unions,” said LEVERAGE President/CEO Patrick La Pine. “CUVM has a proven name in the marketplace, and we look forward to offering it to more credit unions across the country and easing their vendor management burden.” CUVM will take vendor management to a more strategic level by assisting credit unions with collecting the required vendor due diligence to better manage vendor relationships and providing efficiencies with regards to purchasing. Credit unions will be able to better focus resources on serving members, while ensuring that their vendor management program meets required NCUA standards. CUVM is a CUSO started by a group of credit unions, vendors, and industry professionals to provide a reliable outsourced solution for vendor management and due diligence. The ownership group consists of LEVERAGE; Strategic Partners, Mountain West Credit Union Association’s Service Corporation; and CU Solutions Group, a national CUSO with a broad base of credit union system owners. ■

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What’s Your Credit Union’s LEVERAGE Value? Mary Elicia Del Santo, vice president, Business Development, LEVERAGE Businesses all over the globe will be reviewing what strategic initiatives in which they’ve engaged in 2012 to either increase financial growth or enhance the client experience. As the year comes to an end, many of us are looking back and reflecting on the year’s strategic initiatives and operations as a whole. Overall, how did the year go? What worked? What didn’t? Where can we improve? What areas ran efficiently? What areas could use some help? Did we leverage the best value for our member solutions, saving both time and money? Is there another solution we can utilize to bring us a better value? The list of questions could go on and on. We can take the mystery out of these questions by conducting a LEVERAGE value analysis. Your LEVERAGE Business Development Consultant can perform a value analysis of the LEVERAGE solutions your credit union uses as well as provide the average value your credit union would gain by utilizing a particular LEVERAGE solution. Let’s take a look at the value analysis for “ABC Credit Union” pictured to the right. The analysis provides a snapshot of the LEVERAGE products and services broken down into three areas: financial impact, risk reduction, and member enhancement. It identifies the areas where the credit union benefited from a using a particular solution and where potential benefits might be gained if

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the credit union used a particular solution. In the Financial Impact section, the monetary value of income earned or expense saved is identified. The Risk Reduction section illustrates the benefits and potential benefits of utilizing our risk reduction solutions. Products designed to create a superior member experience are located in the Member Enhancements section. In this example, the value of ABC Credit Union’s relationship with LEVERAGE totals more than $32,000 with the potential of $4,000+ or more! Our goal is to provide value to you through your relationship with us. We can do this by leveraging buying power to reduce costs, resources to maximize financial results, industry knowledge and research to provide access to best-in-class solutions, and relationships with credit union service providers. If your credit union is interested in a customized value analysis, contact your LEVERAGE Business Development Consultant at consult@myleverage.com. ■

2012 Value Analysis

ABC Credit Union Credit Union Financial Impact

LEVERAGE Business Solutions Sprint ePurchasing Recruiting PEO/ASO PEO/ASO

On the Program

Value $13,529

$$$$$

Comment Estimated revenue for 2012

Average healthcare savings of $135/employee Average healthcare savings of $135/employee based on 132 on employees 132 employees based

ComplyTrac ComplyTrac

2,000 hours

Remarketing Remarketing

$$$$$ $3,180

Average savings of $700/vehicle Average savings of $700/vehicle

$$$$$

Average revenue of $75/member Average revenue of $75/member

Typical product install saves over 2,000 hours in

T i l product Typical d t iinstall t ll saves over 2,000 2 000 hours h in i compliance li compliance work which time serving work which means more timemeans serving more members

members.

Office Depot Telecom Recovery NewGround JMFA JMFA Vining Sparks Risk Reduction

Contract Management ACH Audit BSA/Security Review Bond Claims & Special Investigations Change of Mgmt Audit Interim Audit OFAC Assessment Supervisory Committee Audit Verification of Member Accounts

Member Enhancement

275 hours

3 3

$500 $500

Reset all contracts triggers estimated time savings to staff hours. Estimated savings compared to other providers. Estimated savings compared to other providers.

$10,000

Estimated savings compared to other providers.

3 3 3 3 3 $$$$$$

Debit Processing

3 SFNetwork Network SF Credit Card Processing Gift Cards ATM Processing Mobile Banking My Deposit Branch My Deposit Merchant Check Imaging Cardholder Recovery Shared Branching Shared Branching Impact

TOTAL POTENTIAL

Estimated savings (Currently not utilizing account)

$$$$$$

2 day turnaround of fraud rule change reduced fraud exposure. Industry average is 5-10 days. Active monitoring and analysis further reduced fraud exposure. Access to 28,000 surcharge free ATMs Access to 28,000 surcharge freeaverage ATMs saving average tosaving memberto ofmember $2.00/transaction of $2.00/ transaction.

3 $1,000

$7,679

$1,000 - $2,000/per year potential income 100 cards.

Patronage rebate and share 2011 rebate and dividend share dividend 2011. Patronage

$32, 208 $4,180

Green values indicate active use of program. Gold values indicate inactive or nonÍ˛use of program with potential impact.

www.myleverage.com

Leveraging credit union system resources, relationships, and industry knowledge for optimal performance and sustained growth of our clients and business partners

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Product Support Connect with Your Members’ Needs to Avoid Regulatory Scrutiny & Thrive in the New Year Keith Hopkins, vice president, Product Support, LEVERAGE As the prospects for more robust interest rates, improved loan volume, and an easing of regulatory scrutiny remain uncertain going into the New Year, credit unions continue to face the dilemma of how to improve margins, maintain compliance, and provide services that will keep them competitive. As non-interest income sources have diminished, some financial institutions have been driven by the temptation to try new – sometimes risky – strategies for increasing revenue. But on-going regulatory scrutiny and consumer complaints regarding rising service fees and non-disclosed financial products and processes should be strong signals that these ideas are no longer part of a wise business plan. In fact, since 2010, regulatory and legal scrutiny has increased on virtually every consumer financial product on the market. As a result, large national banks have paid hefty fines for implementing practices that increase consumer costs.

Provide Value & Service to Keep Your Members Loyal In today’s environment, a more reliable success strategy can be established by making a strong connection to your members’ financial needs and expectations, and providing value in the form of reasonably-priced, user-friendly products that are completely disclosed. Taking the time to learn what products and services your members want and need can result in stronger existing relationships, lead to new business opportunities and set your community-based institution apart from the big national banks in a favorable way. Case in point: In a study by research firm Chadwick Martin Bailey, 85 percent of survey respondents indicated that they received value from their credit union vs. only 56 percent for large national banks. As a result, credit union members report having the most long-term relationship with their financial institution when compared to other banking categories. As economic conditions continue to affect the financial well-being of many consumers, providing your members with a strategy – such as an overdraft privilege program – that helps them to better manage their money can be a valuable benefit to them and can generate much-needed income for your credit union. But, make sure your practices do not pose financial hardship for program users.

Attention to Consumer Protection Is the Key The key to avoiding potentially costly legal scrutiny is to provide your members with a clearly defined overdraft program that guarantees full regulatory compliance and consumer protection expectations, including: • complete transparency regarding fees and information about how the program works; • reasonable, communicated overdraft fees; • clearly established overdraft limits; • transaction clearing policies that avoid maximizing member overdrafts and related fees created by the clearing order; • the ability to easily monitor excessive usage; and • communications materials that outline alternative financial products that more appropriately fit the needs of excessive overdraft users. When supported by easy-to-understand disclosures and counseling on appropriate usage, such programs provide informed members with a valuable resource to better manage their finances.

There’s No Such Thing as Almost Compliant In the new regulatory reality, there is no room for guessing. If you’re not sure that your overdraft program is in line with new compliance and consumer protection guidelines, ask your provider the following questions: • Do our transaction processing policies increase member costs? • Do our disclosure materials provide clear descriptions of our program terms and fees? • Do our marketing materials accurately explain our opt-in processes for electronic transactions, as well as the opt-out procedure for checking and ACH transactions, and how to avoid overdraft fees? • Do we provide account holders with information about alternative, less expensive products that might be better-suited to their short-term credit needs? When implemented and managed correctly, a fully compliant overdraft program will provide the most benefit for your members and your institution. Such a resource will be helpful going into a New Year of uncertainty. ■

About JMFA John M. Floyd & Associates (JMFA), a strategic business partner of LEVERAGE, the LSCU Service Group, and is a leading provider of profitability and performance-improvement consulting. 40

A Magazine of the League of Southeastern Credit Unions

SIGNAL: Vol. 3, Issue 4

The Nation’s Lien Machine.TM VINtek provides credit unions with electronic lien and title solutions (ELT) to increase operational efÛciencies and reduce fraud. How does ELT work? Liens are recorded to identify a lienholder. The DMV sends a paperless ELT record to VINtek on behalf of a lienholder, and VINtek maintains the ELT in an electronic vault called VINtekTIME. Once the underlying loan has been satisÛed, the lienholder instructs VINtekTIME to release the lien, and a transaction is sent from VINtek to the DMV so that it will be electronically released.

Why Lenders Choose ELT

• • • • • • • •

Improves Risk Management Reduces Title Processing Costs Eliminates Postage Expense Reduces Physical Title Storage Requirements Streamlines & Optimizes Business Processes Increases Organization EfÛciency Eliminates Paper Titles in Circulation to Reduce Fraud Environmentally Friendly Go-Green Process

Breaking News Legislation for Mandatory ELT in Florida Has Been Passed. All Florida Lienholders Are Required to Participate in the FL ELT Program as of January 1, 2013.