The following President's Report was compiled by Missouri Credit Union Association (MCUA) President Don Cohenour to keep credit union members informed about Association activities.
Advocacy – Hold legislators accountable and empower credit unions, including staff and members, to engage in credit union advocacy
There were a record number of attendees (4,400) at the CUNA Governmental Affairs Conference (GAC) in Washington, D.C. Missouri had a large group of 49 attendees which included 19 attendees from CommunityAmerica Credit Union (CACU). This year included an expanded group due to Dennis Pierce being installed as CUNA Chairman. In all, we had 14 credit unions represented, including 11 CEOs. This group also included six Association board members.
This year’s GAC focused on five major issues. 1) tax status; 2) data security; 3) regulatory burden; 4) housing finance reform; and 5) MBL cap. While credit union leaders were in Washington, D.C., the discussion draft on tax reform was released on February 26. Credit unions are not in the draft, and it was clarified with the Ways and Means Committee staff that no UBIT changes for federally chartered credit unions was intended by the draft language. This is not to say credit unions should let their guard down, but tax reform may not be addressed for the remainder of this year.
We were forthright with our U.S. Senators and Representatives after the Schnucks data breach and were quick to ask for legislative action after the Target data breach was announced. It is unclear how soon legislative action may take place, but Missouri’s Congressional delegation has been responsive to data breach concerns and many reiterated that something must be done to address data security.
At the state level, MCUA is busy poring through the more than 1,600 bills that have been introduced so far in the new legislative season. While most do not impact financial institutions, there are approximately 200 bills that affect credit unions either directly or indirectly. Many of these bills will not move out of committee, and MCUA has already succeeded in helping stop an overarching privacy bill that would have impacted credit unions. The bills that affect credit unions get all of our attention. Three bills MCUA is following closely include a bill that changes the prioritization of liens against refinanced condos; a bill that bans pension advance loans; and a bill that introduces tax lien transfer loans. The last two border on predatory in that they are offered to consumers at a time that they need money the most and their terms make it difficult to pay back. The business plan actually counts on default.
Another bill that has moved quickly through the Missouri Senate concerns the elimination of a payday loan ‘rollover.’ In place of the rollover, payday lenders must offer an extended payment plan (EPP) and the interest on the loan can’t accrue. Payday lenders can only offer an EPP once per 12 month period and the borrower must repay the EPP balance before being issued another loan. This could force consumers relying on payday lenders to seek other sources. The concern is whether or not credit unions are ready to support that potential increase in need and activity. Inadvertently, this could set credit unions up as anti-consumer. MCUA will continue to monitor.
Compliance – Provide regulatory guidance and consultation on local, state and federal laws and regulations affecting credit unions
While security breach is an advocacy issue, it has also consumed considerable time from the compliance department as work continues on possible action against Schnucks. Beginning with last year’s annual meeting, MCUA has worked with the many credit unions affected by this breach to discuss possible remedies and/or actions they could take against Schnucks. Credit unions interested in pursuing action were provided a demand letter to send to Schnucks requesting retribution. It was pretty certain Schnucks would say no but that was an attempt to give them that chance and to at least go on record that credit unions were also financially affected.
Management has been working with a smaller group of credit unions interested in going forward with a “mass action” lawsuit against the grocer to try to recoup some of the losses incurred for fraud, card issuance and staff time to handle both. This action is still pending, but it will be up to the credit unions involved to choose to move forward. A Texas attorney that also has some suits filed as a result of the Target breach is willing to take the case, and we are waiting on confirmation of terms before the group will pursue this option. Early estimates of the Schnucks loss were approximately $1.18 million for the 18 credit unions that were part of the demand letter.
Training/Education – Provide a wide range of instructional resources
The Compliance Department recently sponsored a mortgage lending regulation conference in St. Louis, Jefferson City and Kansas City that attracted 37 attendees from around the state. The department has also conducted BSA trainings in Springfield, St. Louis, Mexico, and Hannibal. Speakers are being lined up for the annual Compliance Connection Conference this summer and a Bankruptcy and Collections conference in the fall.
At the Annual Advocacy Meeting, participants heard from Ann Davidson of CUNA Mutual Group who discussed the data breaches that have captured headlines. She highlighted what credit unions should do to make sure the necessary technology, policies and procedures are in place to protect member data.
Communication/Awareness – Fulfill our mission to make credit unions grow
Bank On More, the statewide consumer awareness campaign, launched in February and promotes the benefit of credit union membership with TV, radio, out of home, digital, social media, print and community outreach advertising. The Communications Department has travelled to several locations and met with groups and individual credit unions to present the campaign’s creative concepts and activities. Two webinars were also offered to accommodate those who could not attend in-person meetings. The “Go Ahead, Live Larger” theme has been well received across the state. The campaign represents all credit unions in Missouri, offering nonmembers a more robust credit union search engine. Throughout the year there will be several community events to spread the credit union philosophy and hopefully leverage some free publicity as well. For more information on Bank On More, contact Halley Abbott firstname.lastname@example.org.
Beginning in January, MCUA has sent a monthly PowerPoint slide to credit union presidents/CEOs for use at board meetings. The purpose is to provide each member CEO with a short explanation of current MCUA news and activities. Please share this document with your board, and let us know how we can optimize the content.
Regional meetings are planned April 10-18 in six locations to share current information about the successes of MCUA. These meetings are intended to be more conversational to learn about the needs of members and how MCUA can be a resource. The new dues calculation will also be discussed at these meetings to prepare credit unions for a special membership meeting to vote on the calculation.
MCUA will hold an Association orientation on April 30 in St. Louis and May 7 in Kansas City. The intent is to acquaint new CEOs and senior management to MCUA’s programs and products.
Collaboration – Keep Missouri credit unions united
Meetings were held with the four credit unions that recently received grant money from the U.S. Treasury as Community Development Financial Institutions (CDFIs). A new memorandum of understanding was negotiated with the four credit unions, which will secure $262,000 to MCUA for use in the statewide consumer awareness campaign. Each credit union also agreed to contribute $65,000 in funds for speakers to come to Missouri to help educate and train all credit unions. The first training program will be a lending university presented by Rex Johnson. All credit unions will be invited for a modest fee that covers the cost of meals, material and a small donation to the Foundation. These four credit unions also generously agreed to pay back the funding that was provided from the Foundation on their behalf for their certification expenses.