Posted September 16th, 2020 No Comments
2020 NCUL Annual Convention – CANCELLED

It is with extreme disappointment that we are announcing that the 2020 Annual Convention is being cancelled. {Read The Full Article}

Posted September 16th, 2020 No Comments
The Increased Vulnerability for Fraud, Scams, and ID Theft Attacks on Students….What Can Credit Unions Do?

It is that time of year when students’ vulnerability for ID theft attacks goes up exponentially as they head back to school.  And this year, they face a dramatically more substantial threat posed by the increased time they spend online taking virtual classes. {Read The Full Article}

Posted September 16th, 2020 No Comments
NCUA Q2 CU system performance data: CUs added 4 million members in past year

NCUA’s latest Quarterly Credit Union Data Summary provides an overview of the financial performance of federally insured credit unions based on information reported by credit unions in the second quarter of 2020. {Read The Full Article}

Posted September 16th, 2020 No Comments
League co-signs letter with CUNA, AACUL supporting PPP loan forgiveness bill

The Nebraska Credit Union League joined with CUNA and the American Association of Credit Union Leagues in penning a letter in support of simplifying the SBA’s Paycheck Protection Program’s loan forgiveness process by enacting the Paycheck Protection Program Small Business Forgiveness Act (S. 4117 and H.R. 777). {Read The Full Article}

Posted September 16th, 2020 No Comments
Not Much Appetite for Voluntary Federal Payroll Tax Deferral Program

The voluntary federal payroll tax “holiday” went into effect at the beginning of the month, but it remains to be seen how many Nebraska employers, including credit unions, are participating. {Read The Full Article}

Posted September 16th, 2020 No Comments
Upcoming CUWebinars

NEBRCUL_CUW_Oct2020

Posted September 16th, 2020 No Comments
Managing Liquidity and Performance After COVID-19

2020 will certainly be remembered as the year Covid-19 changed the world as we know it. Likewise, the associated “Lockdown Recession” is already changing the way many credit union leaders manage their balance sheets. With loan demand dropping in most parts of the country and stimulus deposits adding to already bloated cash positions, proactive strategic planning has never been more crucial. More to the point, proper liquidity management may offer some of the additional margin and income credit unions desperately need.

covid1

Cash and cash equivalents as a percentage of total assets reached 6.98% as of year-end 2019. The surge from 5.62% to 6.98%, which occurred 2018 to 2019, very closely mimics the pop in liquidity experienced in 2008 to 2009 (the beginning of the Great Recession). However, it is the three years after 2009 that we are most focused on. Liquidity continued to grow (hitting 9.11% in 2011/2012) as the industry slowly recovered from weakened loan demand and increased deposits from an embattled member base. The zero-bound range on overnights at the time led to significant drops in overall interest income. As we hit the midpoint of 2020, it appears that the industry must once again prepare to navigate similar waters. As of June 30, 2020, the industry was sitting at a record high allocation of 11.23% of assets in cash and cash equivalents. More than 2% higher than the peak of the Great Recession.

Although we still do not fully understand COVID-19 or the longer-term impact it will have on our economy, we are not completely powerless when it comes to making better-informed decisions. The biggest risk coming from our record levels of cash is the damage to margins and earnings. With overnight balances yielding just 8.5bps and industry cost of funds around 90bps, it doesn’t take long for negative spreads to eat into margins and eventually net worth. In fact, the chart below illustrates that overall industry margins have tightened by 24bps in just the last 12 months.

covid2

While it can be tempting to “sit on the sidelines” and hope for a V-shaped recovery, we must weigh the potential negative implications from that approach if we end up being wrong. The correct strategy here is not to make a one-way bet in either direction. We can remain positioned for a quicker than expected recovery while also improving our hedge against a longer-term low rate environment like 2007–2012. It all comes down to executable ALM management.

As of 06/30/2020 the industry was carrying just over $198 billion in cash and cash equivalents. If we assume the same 90bps cost of funds figure from earlier, those funds are earning a negative spread of -.815%. This equates to “lost” income of roughly $1.6B a year. To put it quite simply, we cannot afford to accept an income loss of that magnitude when we do not know how long the current situation could last. In fact, every day that we continue to receive 8.5bps instead of investing those funds, the foregone income becomes harder and harder to recover.

covid3

The good news is the yield curve has steepened a bit since the Fed made their historic announcement regarding inflation. The market is now demanding a slightly higher yield on longer assets considering that inflation may be allowed to increase above the Fed’s normal 2% goal for a “period of time.” In this environment, liquidity management is absolutely key. However, we need to realize that having too much liquidity sitting in overnights can be just as dangerous and detrimental as not having enough.

 

Andrew Okolski is the Director of Credit Union and Municipality Strategies at The Baker Group. He works directly with clients in a broad range of areas including ALM, education, portfolio management, interest rate risk management, strategic planning, regulatory issues, and wholesale market strategies for credit unions. Before joining the firm, he spent fifteen years building and managing a financial strategies group at a New York broker/dealer with a specific focus on the credit union industry. Andy holds a Bachelor of Business Administration Degree from Long Island University – C.W. Post. Contact: 800-937-2257, andyo@GoBaker.com.
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Posted September 16th, 2020 No Comments
Lockdown Lessons for Financial Institutions

Leaders in every industry are trying to digest what has happened to their businesses, their employees and their clients after having to make major changes to their operations seemingly overnight. {Read The Full Article}

Posted September 16th, 2020 No Comments
Survival Tips, Part 1: How to Achieve Optimal Results, Pandemic or Not

Ensure your overdraft solution contributes to service improvements and future growth
By:
Ron Jennings, Executive Vice President of National Sales & Alliances

As the industry settles into a new normal—complete with unique operational challenges and service expectations—it’s more important than ever to implement tools and resources that can boost your performance results. Here are some tips to help you both offer more value to your members and achieve your revenue goals.

Have a clear understanding of your options.  You have choices when it comes to how you help members maintain their finances if an emergency or unexpected expense hits when they don’t have sufficient funds in their checking account. Some institutions may decide to implement an in-house overdraft solution that they maintain on their own; others may choose a product offered by their core provider; and others may opt for hands-off overdraft management products that utilize complex data matrices to assign user limits.

At the surface, these options initially may seem easy to manage, convenient or attractive. But if they don’t provide continuous program management recommendations, on-going advice to support successful results for the long-term and offer a guaranteed-compliant program, the outcomes can be disappointing for everyone.

Does your overdraft strategy communicate your program effectively to members? Are your employees empowered with confidence about its value? Are you seeing measurable improvement in your program’s performance?

 

Develop a reliable revenue source to support growth and service improvements.  Even before the onset of COVID-19, demand for more convenient banking services was on the rise. According to a survey by TransUnion, 61% of all consumer online banking transactions in 2019 were conducted on mobile phones—up from 28% in 2014. Changes in behavior brought on by the virus have expanded reliance on mobility even more as 35% of respondents to a Deloitte study indicated they have increased their usage of digital channels since the pandemic began.

From a competitive standpoint, investments in digital banking and mobile capabilities can boost an institution’s viability in the marketplace. Other service improvements—like incorporating smart ATMs that live stream video teller support, installing virtual assistants that offer 24/7 service or updating software to improve credit and debit card functionality—increase convenience and efficiencies that can go a long way toward improving member satisfaction and retention.

 

Revenue from a high-performing overdraft program can enable credit unions to update existing systems or acquire new products that improve overall operations and the member experience. For example, with a revenue increase of $500,000 a year, one New England-area credit union was able to complete a core conversion, offer a mobile application to give members more convenient access to their accounts and add a rewards component to its debit card program.

 

Another credit union in the Northeast expanded its business lines while keeping member fees low, thanks to a significant increase in non-interest income. And another was able to implement new services including remote deposit capture, online loan applications and mobile bill pay with the increased non-interest income its overdraft program provided.

Are there product, service or infrastructure improvements that could enhance the way you do business and serve your members? Does your overdraft program offer sustainable revenue to help fund the service improvements necessary to stay competitive?

 

Utilize comprehensive training to strengthen mission-driven outcomes.  Fully trained, confident employees are key to successful overdraft program results. If your internal trainers don’t understand the value your program brings to members who face occasional financial difficulties, lack access to the latest regulatory updates, or are unable to instill confidence in staff to ensure consistent explanations about program details, your performance and service levels could suffer.

The leadership of one Midwestern credit union realized that not all employees accepted the value of the institution’s overdraft program. In fact, some individuals even had a tendency not to offer the privilege to members, based on their own biases. Changing that negative mindset became a goal for the institution because of its philosophy that product decisions should be made based on what was in the members’ best interest, not employee opinions.

With the help of a structured, in-person employee training program that focused on key aspects of how a consumer-focused overdraft program should work, the negative feelings diminished. Access to live remote trainer support and customized training manuals that spelled out how a properly managed program can benefit both the institution and its members increased employees’ confidence. Additionally, incorporating role-play exercises into the training curriculum reinforced their ability to effectively explain proper program usage.

Are you relying on internal employees to develop your training program? Do you have a plan in place for keeping the information and training methods they utilize up to date? Do you have a strategy for what you would do if your designated trainer leaves your organization?

 

Avoid leaving your overdraft program potential to chance.  The potential for improvement in revenue, member service experiences and employee knowledge and confidence can be amplified substantially when you partner with a proven expert that has completed thousands of successful program implementations.

Stay tuned for Survival Tips, Part 2, which will focus on how maintaining compliance standards and utilizing technology and program management techniques effectively will help you achieve even greater performance results during the pandemic and lead to sustained success in the future. In the meantime, here are some additional examples of successful overdraft program results.

 

ABOUT JMFA
JMFA is one of the most trusted names in the industry. Whether it’s recovering lost revenue, uncovering new savings with vendor contract negotiations, creating more value, serving members better or delivering a 100% compliant overdraft service—JMFA can help you deliver measurable results with proven solutions. To learn more, please Derrik Mather @ derrik.mather@jmfa.com  or call us at (800) 809-2307.

CUA JMFA

 

 

Posted September 16th, 2020 No Comments
Treat your staff for International Credit Union Day
ICU Day

 

ICU Day is a chance to energize and celebrate how credit unions like yours are “Inspiring hope for a global community.”

 
Give your staff some pep by shopping the Member Celebrations Store’s collection of ICU Day gear for your next training day! Support and highlight the movement — and give your staff a chance to celebrate everything they’ve done for members — by joining us for ICU Day festivities on October 15.

 

Shop Member Celebrations Store

 

Posted September 16th, 2020 No Comments
How We Activate Will Set Us Apart: CO-OP Financial Services, THINK Review Magazine

The “new normal” is in full swing – and THINK 20’s theme, “Activate Your Next,” feels apropos. For some credit unions, your “next” may be activating behavioral science to optimize all the little things that heighten member engagement. For others, it might be placing a big bet on activating a dynamic, digital culture in your organization.

No matter what strategies your credit union pursues as the economy stabilizes and recovers, I know that how we activate will set us apart. Credit unions aren’t just another business-as-usual institution; we’re a relational partner during some of the most intimate moments in a member’s life. From planning for kids’ college to needing to skip a card payment, credit unions have opportunities during major and minor life events to demonstrate that we are the compassionate banking alternative and to secure the Primary Financial Relationship (PFR) with your members. To secure PFR with modern members, we must focus on lifestyle, not life stage… which allows us to transcend being just an institution and instead crystallize a relationship that is responsive to shifting trends.

A relationship is about thoughtful touches during the moments that matter, exemplified by card controls like CO-OP’s CardNav, which gives members personal control over card fraud and spending limits. A relationship is built with the trust that a member’s call will never go unanswered. That’s why CO-OP doubled down on investments in our 24/7 Contact Center, ensuring your credit union will be there every single time a member needs assistance after business hours. A relationship is characterized by people helping people – not just dollar signs.

If every credit union activates their “next” with helping people in mind, I know that our collective efforts will succeed in helping members weather this storm. Credit unions are the only providers poised to secure the role of PFR for this new normal and for generations of members to come. Let’s get to it!

Author: Samantha Paxton, Chief Experience Officer 

COOP

Posted September 16th, 2020 No Comments
CU Leaders Visit with Rep. Fortenberry

A delegation of credit union advocates met with Congressman Jeff Fortenberry of Nebraska’s 1st Congressional District in early September.  In past visits with our Congressional Delegation, handshaking and standing room only were the norm.  {Read The Full Article}

Posted September 16th, 2020 No Comments
Credit Unions a Continued Target of Class Action Lawsuits for NSF and Overdraft Charge Practices

Class actions lawsuits targeting credit unions that impose multiple non-sufficient funds (NSF) charges on a single “item” and/or that assess overdrafts (OD) fees on certain debit card transactions are beginning to resurface by plaintiff law firms. {Read The Full Article}

Posted September 16th, 2020 No Comments
CUs can apply for streamlined CDFI certification until Oct. 17

NCUA has announced that federally insured, low-income credit unions that want to become certified CDFIs can again apply to utilize its qualification process for streamlined CDFI certification. The current intake period closes Oct. 17. {Read The Full Article}

Posted September 16th, 2020 No Comments
Ballast Research finds credit unions are best represented by CUNA-League system

According to an independent study conducted by 2020 Ballast Research – formally National Journal Research – Credit Union National Association (CUNA) and its League partners are the most influential financial services organization and one of the top ten most effective advocacy organizations in Washington, D.C. {Read The Full Article}

Posted September 16th, 2020 No Comments
Should I worry about a SharkBite?

With everything going on in today’s world, each one of us makes multiple assessments of risk every day. {Read The Full Article}

Posted September 16th, 2020 No Comments
Cooperative Solutions Group Partners with Access Softek to Transform Your Members’ Digital Banking Experience

Now more than ever before, reliable, secure, easy-to-use remote banking service is vital to a credit union’s success – and even their survival. {Read The Full Article}

Posted August 19th, 2020 No Comments
Guidance on CFPB’s payday rule outlined in NCUA letter to credit unions

The NCUA recently issued guidance to credit unions regarding the CFPB’s July 22 changes to parts of its Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule. {Read The Full Article}

Posted August 19th, 2020 No Comments
U.S. Mint takes to airwaves to encourage circulation of coins

The U.S. Mint is encouraging the public to “help get coins moving.”

“Coins aren’t circulating through the economy as quickly as they were prior to the COVID-19 pandemic, which means that sometimes coins are not readily available where needed,” said David J. Ryder, U.S. Mint director, in a public service announcement recently released. “This is NOT a coin supply problem. It’s a circulation problem.”

Ryder encouraged the public to “help get coins moving” by using exact change when making purchases, taking coins to financial institutions or turning them in for cash at coin sorter or recycling kiosks.

Ryder also advised that individuals should remember to follow all health and safety guidelines when out spending or recycling coins.

The public service announcement follows recommendations from the Federal Reserve’s new “limited-scope, limited duration” U.S. Coin Task Force, which was created to identify, refine and promote strategies to resolve the coin supply chain issues resulting from COVID-19-related disruptions to normal coin circulation.

After convening in July, the task force released its initial recommendations for addressing the coin circulation issues, including:

— urging Americans to return their spare change to circulation by using it for retail transactions, depositing it with financial institutions, and/or redeeming it at coin recycling kiosks;

— identifying sources of “friction” that prevent the smooth functioning of the coin supply chain, including consumers’ redemption of coins, which has slowed due to limited access to financial institution lobbies;

— encouraging consumer-facing campaigns to promote awareness of the need for coin recirculation and development of ideas to encourage consumers to act;

— preparing best practices for financial institutions and retailers to get coin from consumers and recirculated through the supply chain via their armored carriers; and

— assisting supply chain participants, such as financial institutions, retailers, consumers and other coin handlers to reduce the most critical industry-specific points of friction.

Task force members represent several major participants in the coin supply chain, including credit unions.

coins

 

Posted August 19th, 2020 No Comments
CUs can learn how to move forward post-pandemic

Nearly 400 credit union professionals participated in CUNA Mutual Group’s recent “Moving Forward Forum – Insights and Strategies for a New Frontier,” focusing on the fact that there likely is no such thing as “going back to normal” in a post-pandemic world. {Read The Full Article}

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