e-Weekly

March 2, 2011

Egan wins Farley Award
This year the American Association of Credit Union Leagues (AACUL) presented the Eugene H. Farley League Leadership Award to Daniel F. Egan, Jr., president for the Credit Union Association of Rhode Island , Massachusetts Credit Union League, Inc, and New Hampshire Credit Union League

AACUL bestows this award annually on a league staff person who:

• Demonstrates superior results both organizationally and financially;
• Is a visionary leader at the state level;
• Develops services and/or programs for member credit unions;
• Focuses on cooperation within the credit union system;
• Displays personal values of commitment to purpose, service to others, and integrity;and
• Substantially participates as a leader and “co-operator” at the national level.

Egan received the award—endowed by a generous contribution from Dr. Richard Heins, former CUNA Mutual CEO—on Saturday evening.

League presidents make nominations and members of the Farley Award Committee, comprised of past award winners, serve as judges.

Mortgage appraisal guidelines effective April 1 – MemberClose and Association offer assistance
On December 10, 2010, the National Credit Union Administration (NCUA), along with the four other federal financial regulatory agencies, issued their long-awaited revision to the Interagency Appraisal and Evaluation Guidelines. The revised guidelines became effective immediately with mandatory compliance to begin on April 1, 2011. One of the most important mandates is that automated valuation models (AVMs) can no longer be used on home equity and second mortgage loans without a property condition report and extensive back-testing.

The guidelines state in part that, “An institution may not rely solely on the results of an AVM to develop an evaluation unless the resulting valuation is consistent with safe and sound banking practices…to be consistent with the standards for an evaluation, the results of an AVM would need to address a property’s actual physical condition. An institution should establish standards and procedures for independent and ongoing monitoring and model validation, including the testing of multiple AVMs, to ensure that results are creditable.” To see the full guidelines, click Main Link to Guidelines.
(http://www.federalregister.gov/articles/2010/12/10/2010-30913/interagency-appraisal-and-evaluation-guidelines)

Members Insurance Agency launched the MemberClose program in 2004 and currently has over 100 credit unions using AVMs and other settlement services. By combining existing AVMs along with Property Condition Reports (PCR) and AVM back-testing, MemberClose has the ability to provide a turnkey solution for credit unions that ensures compliance with the revised guidelines. More information on the MemberClose solution is available by calling 888-746-2476 or by email at memberllc@cucenter.org.

The Association is offering a two part series of webinars on the subject. The first will be held on March 10 (Part 1 Webinar)  and the second will be on March 24 (Part 2 Webinar).

Credit unions that currently make use of the Association’s Policy Pro service can find an up-to-date appraisal policy there. Credit unions not using the service can learn more about it by clicking here. 

CUNA warns ad rule change could have consequences
The additional cost of complying with the National Credit Union Administration's (NCUA) proposed changes to advertising requirements could force some credit unions to reduce or eliminate some of their current marketing practices, the Credit Union National Association (CUNA) said in a recent comment letter.

The NCUA, at its December meeting, approved a proposed rule that extends the NCUA's official advertising statement rule to all radio and television advertisements, annual reports, and statements of condition. In addition, for print advertisements, the official advertising statement must be "no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer." NCUA board member Gigi Hyland was the lone dissenting vote and expressed concerns over the additional costs and totality of regulatory burdens for credit unions.

Radio and television advertisements that are under 30 seconds long were previously exempted from including the NCUA's advertising statement requirement.

"While we fully support appropriate, effective disclosure aimed at informing and protecting consumers, we strongly oppose many of the board's proposed changes and believe they will have negative unintended consequences if adopted as proposed," the CUNA letter said.

The NCUA has claimed that adding additional disclaimers to these ads would increase consumer confidence, but CUNA noted that the NCUA statement could be "ineffective" and could "cause confusion and lead to a decrease in consumer confidence." CUNA said that additional disclosures may be ineffective because many consumers are not aware of the NCUA, and added that the burden of educating consumers about the agency should be "properly placed on NCUA and not individual credit unions."