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NCUA Votes 3-0 to Put Modernized FoM Plan Out for Comment
On Thursday, the NCUA Board voted unanimously to put out for a 60 day comment period a plan to modernize the field of membership (FoM) rules for credit unions. CUNA President / CEO Jim Nussle notes in Friday's News Now that the proposal incorporates many changes suggested by CUNA and its members. The changes, he said, will provide greater choice for consumers, flexibility for credit unions to better serve their communities, and will support a dual chartering system that better aligns federally chartered credit unions with state-charters.
Among other things, the plan would:
Allow for a major improvement in the definition of "rural district" by changing the standard used to measure it. The current cap of 250,000 would be raised fourfold to one million;
Allow a congressional district to be considered a Well-Defined Local Community to support a community charter application;
Eliminate a geographic limitation on trade, industry, or profession (TIP) charter for federal credit unions (FCUs) with associational common bond memberships; and
Streamline the paperwork and process to allow credit unions to add groups with up to 5,000 potential members (the current limit is 3,000) to be added to a multiple common bond FCU.
"We thank the NCUA for listening to CUNA and drafting a rule that stays within the confines of the Federal Credit Union Act, all while ensuring American consumers are allowed more options when choosing their financial services provider,” Nussle said. Immediately after the vote, CUNA sent a letter to all members of the U.S. House and Senate highlighting the beneficial impact the rule changes would have on consumers, especially those in underserved areas, as well as on credit unions. Click here for more from CUNA's in-depth analysis of the proposal
While the field of membership proposal got most of the attention at Thursday’s NCUA board meeting, the agency also approved its 2016 and 2017 operating budget. The board approved a $290.9 million operating budget for 2016, a 4.1% increase over 2015. Although the budget increased, the NCUA reduced full-time equivalent (FTE) employees for 2016 to 1,247, a 1.7% reduction.
The Temporary Corporate Credit Union Stabilization Fund (TCCUSF) budget will be $4 million in 2016, a reduction of 2.4%, and $4.1 million in 2017. Both years call for the same current amount of five FTEs. The TCCUSF saw $11.5 million in revenue during the quarter, with cash balances increasing in September due to recent settlements. Borrowings were down to $1.9 billion and there is no likelihood of a premium or assessment in 2016.
18 Month Exam Cycle Could be on the Near Horizon
During open board discussion, Chair Debbie Matz indicated that the federal regulator may return to an 18-month examination cycle in the future. The elongated schedule would be allowed only for well-performing credit unions, she said, and advised the change would not be coming in 2016. Even a one-year delay would allow some of the agency's regulatory relief programs to take effect, and would give the agency time to make necessary technology upgrades, she noted.
CUNA President/CEO Jim Nussle thanked the NCUA chair for her leadership on the exam cycle issue. “We were very pleased to hear Chairman Matz say what we have been urging in meetings and our comment letter: that the agency should use efficiencies and analytics to reduce the examination frequency for well-managed credit unions," he said. The NCUA adopted a one-year exam cycle in response to the country's economic upheaval caused by the mortgage market meltdown that started in earnest in 2007.
Use #CUGiveBack to Generate Financial Reality Fair Funding
At this time of year, credit unions across the country are living the value of people helping people. It’s a value that AVCU business partner CUNA Mutual Group (CMG) aims for too. From now until 12/31/15, CMG will donate $5 to the National Credit Union Foundation (The Foundation) for every picture or video of credit unions, their employees, partners, or members giving back, that is tweeted to @CUNAMutualGroup or posted on Facebook with the hashtag #CUGiveBack.
CMG will donate up to a total of $10,000 which will go to funding additional Financial Reality Fairs – events designed by The Foundation and delivered in partnership by leagues and local credit unions. These fairs provide young people with vital financial tools and advice, so by using the hashtag and tweeting your pictures to CMG or posting them on their Facebook page, you’re helping the next generation of members build a stronger financial future.
AVCU encourages our members to take our business partner up on their offer because we know the value that Financial Reality Fairs deliver to Vermont’s students. Our Young Professionals Committee, under the leadership of AVCU Director Carrie Allen, is working to develop our co-operative program that plans to hold fairs at high schools across the state under the banner “Vermont Credit Unions”.
“Everything we know about giving back, we have learned from the credit unions we serve, and so over the holidays our employees will join with credit unions to donate clothes, food and gifts to communities across the country,” CMG announced on its blog. AVCU commends and thanks our business partner for their support for The Foundation and for advancing the Financial Reality Fair concept that began as, and remains, a uniquely credit union effort.
Heritage Family Credit Union Helps Stuff a Bus
On Thursday, November 12, Heritage Family Credit Union (HFCU) teamed up with Northwest Elementary School in Rutland to deliver thousands of food items to the Salvation Army for the Stuff-A-Bus campaign. Captain Credit Union, pictured with his honorary superhero students, helped deal a heavy blow to hunger as they swooped into the Price Chopper parking lot armed with school buses full of non-perishable food items to be donated to the 2015 annual STUFF-A-BUS Food Drive. (Click image for larger version)
In total, some 6,500 non-perishable items were collected for the food drive with Captain Credit Union leading the charge. In addition, a check totaling $1,500 was presented to Captain Balcomb of the Salvation Army as part of HFCU’s matching contribution efforts. In a media release, the credit union thanked all those that donated food items or money toward this year’s STUFF-A-BUS drive. Their efforts help keep area food shelves stocked over the holiday season (and beyond) for those less fortunate, said HFCU.
Bitcoin Daily Usage Comparable with Discover, Western Union
As a method of payment, Bitcoin ($289 million) has already surpassed daily usage of Western Union ($216 million) and is fast approaching Discover ($299 million), but there are many unknowns for financial institutions.
On Wednesday, Todd Erickson, senior vice president and chief operating officer of First Flight FCU in Cary, N.C., helped clear up some of those misconceptions at the CUNA / National Association of State Credit Union Supervisors (NASCUS) Bank Secrecy Act Conference. Erickson also served on the regulatory affairs committee for the Bitcoin Foundation. (CUNA News Now, 11/19/15)
Capitalized Bitcoin is a decentralized distributed global payment network that allows online payments to be sent directly from one party to another without going through a financial institution. Lowercase bitcoin is a digital currency unit and, as of Nov. 18, one bitcoin equaled $335.29. Bitcoin is a “push” system, unlike bank accounts and credit cards which are “pull” systems that can be debited without the owner’s knowledge or permission. According to Erickson, Bitcoin is not:
A stored value device; it is not a card or other tangible object, and no party besides the holder of bitcoin themselves store any value;
Recognized by the U.S. or any foreign government as legal tender;
An instrument or device for the payment or transmission of monetary value; like a dollar or a peso, it is itself the monetary value;
In addition, bitcoin transactions do not require providing any personal information that hackers can steal or marketers can appropriate; nor does bitcoin obligate any third party to pay its value to its holder. Bitcoin itself is the payment and value. During his presentation, in less than five minutes, Erickson showed attendees how to make a purchase at an online retailer than accepts bitcoin payments, and transferred 0.1968 bitcoins (equaling $2) to one attendee.
Please note: The AVCU offices will be closed on Thursday, November 26 for Thanksgiving and Newslines Express will not be published next Friday. We hope all of our readers have a wonderful and safe holiday with family and friends.
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