e-Weekly

May 25, 2011

National Social Responsibility Recognition Programs demonstrate the “Credit Union Difference”
Developing and entering your social responsibility project helps your local community -- and its representatives in state and federal government -- better understand the credit union difference. The greater the understanding of this difference, the greater chance that the credit union tax exempt status will be preserved and accessibility to credit unions guaranteed for all consumers.

Since 1987, the Dora Maxwell Social Responsibility Community Service Award has honored credit unions for their charitable works in their communities. Some credit unions have ongoing programs and establish a special relationship with local social service agencies or school programs. Other programs address many different needs in the community. No matter the size or scope of a project, each participating credit union builds its reputation as a good corporate citizen along the way.

Credit unions enter the Dora Maxwell Award program in one of eight asset categories or the chapter/multiple credit unions category.

Beginning in 1990, the Louise Herring Philosophy-in-Action Member Service Award has commended credit unions that make exceptional efforts to include credit union philosophy in their daily operations and member service. Programs that provide financial education to particular member groups within the credit union or special assistance to low-income members struggling to pay heating bills, for example, are clear examples of the philosophy that sets credit unions apart from other financial institutions.

Entrants in the Louise Herring Award program compete in four asset categories.

Send your entry to Donna Bevilacqua, director, communications and community relations by August 19. Each submission must be accompanied by a $50 entry fee made payable to the League/Association. First place winners will advance to the national competition. National winners will be honored at the Governmental Affairs Conference in Washington, D.C., in February 2012. Click here to access the National Social Responsibility Recognition Award Program Entry Forms.

By entering the National Social Responsibility Recognition Awards Program, you are accomplishing many goals: you are helping your community and your members, and showing lawmakers that credit unions are something special -- and should remain that way.

For more information, contact Donna Bevilacqua at 1-800-842-1242 or dbevilacqua@cucenter.org.

NCUA rate-risk plan is onerous, unnecessary: CUNA
In a recent comment letter, the Credit Union National Association (CUNA) states that the National Credit Union Administration (NCUA) has not fully demonstrated a need for a new interest rate risk rule, especially one that makes compliance with the rule a condition of keeping National Credit Union Share Insurance (NCUSIF). The NCUA earlier this year proposed amending its federal share insurance regulations to include a requirement that federally insured credit unions have both a written interest rate risk (IRR) policy and an effective interest rate risk management program. The proposal would not apply to credit unions with less than $10 million in assets and credit unions with assets of $10 million to $50 million that meet set mortgage and investment volume criteria.

Those covered by the rule would need to address IRR from several sources, including re-pricing risk, yield-curve risk, spread risk, basis risk, and options risk. The agency could withhold NCUSIF coverage of member accounts for credit unions that did not comply with the proposal if it is adopted.

CUNA in its comment letter said that it "has consistently supported appropriate safety and soundness regulations that are well-tailored to address problem areas and that enhance strong yet reasonable oversight," but added that the agency has not justified the need for the rule. Also, tying compliance to federal share insurance coverage, with the possibly of losing coverage, would be "a punitive and unnecessary step that the agency does not need to take," CUNA said.

Noting the burdensome regulatory environment under which credit unions operate, CUNA added that the proposal, if adopted, "would result in significant overlap between the rule and existing agency guidance on asset/liability management and concentration risk."

The NCUA has previously estimated that about 25% of credit unions, or around 800, would need to develop written IRR policies if its proposal is made final.

The IRR proposal could also allow some agency examiners to micromanage the credit unions they oversee, CUNA warned. CUNA suggested that the NCUA first focus on these credit unions before it imposes a broader rate-risk proposal. CUNA noted that the proposed guidance could be useful to credit unions, as long as it is not a regulation, and that the agency should post it on its website as a resource for credit unions. The NCUA already has the supervisory mechanisms needed to "monitor, assess, and direct corrections be made to any deficiencies in credit unions' interest rate risk policies and management," CUNA added.

For the full comment letter, use the resource link: CUNA Comment Letter.

National Credit Union Foundation financial education study preliminary data released
Credit unions are making a difference through financial education, according to preliminary data collected by the National Credit Union Foundation (NCUF) as part of its 2011 Credit Union Member Education Inventory.

In 2010, for example, 200 credit unions reached 182,000 students through classroom presentations and over a million people received financial counseling or advice.

Sponsored by state credit union leagues and NCUF's REAL Solutions program, the data and information gathered from credit unions will help the credit union movement demonstrate the power of financial education and counseling in the lives of members and communities across the country.

A sampling of preliminary results as of May 5, based on the first 200 credit union survey submissions from 37 states, indicates that in 2010, these credit unions:

• Provided formal financial counseling to 225,00 people through199 certified in-house professional counselors;
• Referred an additional 37,000 members to counseling agencies;
• Provided informal financial counseling to788,000 members;
• Developed debt management plans for 19,000 members;
• Established mortgage loan workout options for 7,000 members;
• Provided 7,300 classroom presentations to 182,000 students;
• Conducted 3,000 seminars for 64,000 adults resulting in 3,600 new accounts;
• Produced 358 experiential learning programs (such as real-world fairs) for 29,000 students resulting in 800 new members; and
• Operated 161 in-school branches with 14,000 student members, $5.9 million on deposit, and 850 student workers.

The information will be used for state and national public awareness, advocacy, and related outreach efforts, said NCUF. The report also will contain state-specific data and comparisons with national statistics and will be accessible to participating credit unions at no charge through the REAL Solutions Impact Center (Access the survey). Also, a companion tool will detail member financial education/counseling products and credit union best practices.

An online survey tool began gathering the data in March. Credit union leagues in 29 states are working with Lois Kitsch, NCUF REAL Solutions national program director, to collect data. All U.S. credit unions are invited to participate. For more information, contact Lois Kitsch at lkitsch@ncuf.coop or at 414-793-1991.