December 1, 2015

Credit Unions Can Give and Gain with CDAs

By Fran Zaugg

Credit Unions may well be ahead of the curve when it comes to the giving season this year. The October 5 issue of Credit Union Journal reported $88,500 in charitable donations from credit unions -- long before most of us had planned our Thanksgiving menus!

This industry legacy of community support is one more reason to celebrate  #Giving Tuesday today. The social media event is dedicated to giving back as the holiday season begins. In addition to the social media campaign we've launched to celebrate your holiday giving efforts this season (and today), we also have something else that's especially timely for this day--and season--of giving.

Our new Charitable Donation Account (CDA) can make giving to your favorite 501(c)(3) charity even more special for your credit union. Following new rules from the National Credit Union Administration, the CDA is designed to help achieve your credit union’s philanthropic goals and, at the same time, increase your bottom line.

For more information about how a CDA can help your credit union, click here or call our Executive Benefits Service Center at 800.356.2664 ext. 665.8576. 

November 29, 2015

The Risks and Rewards of Subprime Auto Lending

By Steve Hoke
NOTE: This story originally published in Credit Union Times on November 18

Owning a reliable vehicle is a basic necessity for most Americans and a concrete representation of their financial well-being. The Consumer Financial Protection Bureau identifies four elements of financial well-being:
  1. Control over routine finances;
  2. Capacity to absorb a financial shock;
  3. Ability to stay on track to meet financial goals; and
  4. Freedom to make choices that allow one to enjoy life.
Good jobs paying good wages allow people to achieve those aims. And in many cases, access to fairly priced car loans makes getting to and from those jobs possible. Credit unions can help members in subprime credit tiers take giant steps toward achieving financial well-being.

Especially for members with once-prime credit who were bumped into subprime territory by the Great Recession, qualifying for an affordable vehicle loan offers the opportunity to prove that their repayment habits have changed. 
At the same time, serving the subprime auto lending market can provide credit unions with a reliable revenue stream when that portfolio is managed carefully. 

Consider these calculations: The return on a subprime auto loan at 14.15% over a full term of 60 months is $6,011, while the same loan at a super prime rate of 3.53% generates $1,385. 
If a member with a subprime loan defaults, the credit union would need to make around 2.5 additional loans at the same rate to recover the lost principal, compared to 11 loans at the super prime rate.

Several strategies have been demonstrated to help credit unions lower the risks and enhance the rewards of subprime auto lending:
  • Reward members for prompt repayment. Structuring a credit-builder auto loan option that lowers interest rates as members make their payments on schedule provides the tandem incentives of saving money and increasing credit scores.
  • Mitigate risk through insurance products that help protect collateral or loan repayment in the event that the credit union repossesses a damaged vehicle or an uninsured borrower’s vehicle is damaged; a borrower stops making loan payments and neither the borrower nor the vehicle can be located; or a borrower can no longer repay a loan.The costs of some of these products can be integrated into loan rates or passed directly on to borrowers.
  • Provide more verified information for underwriting. New technology tools can facilitate real-time income and employment verification. In a study by Equifax, borrowers who overstated their income on an auto loan application by more than 15% were more than three times as likely to be seriously delinquent (60 or more days past due on their loans) than those who did not inflate their income. Obtaining salary documentation directly from employers also relieves members of the hassle of providing that information, and can speed up loan closing and funding.
  • Use direct marketing to recapture existing loans. Ent Federal Credit Union in Colorado Springs, Colo., mined automated clearinghouse data to identify members with improving credit scores who were making payments to subprime auto lenders. The $4 billion asset credit union generated $2 million in recaptured auto loans and was honored with a 2015 Excellence in Lending Award, sponsored by CUNA Mutual Group and the CUNA Lending Council. 

    Along the same lines, CUNA Mutual Group’s Auto Loan Recapture® program identifies members who’ve recently financed an auto purchase with another lender. Credit unions using this tool can set credit score criteria for members who receive personalized refinancing offers.
  • Leverage technology to increase direct loan activity. The AskAuto® app is an example of engaging members looking for a different car-buying experience. They can conveniently research multiple vehicles, validate prices, and apply for auto loans from your credit union using their smartphones.
It’s no coincidence that the employment picture and auto market are simultaneously rebounding, and 2016 could be another banner year. In fact, the National Automobile Dealers Association forecasts record sales in the coming year. Employing strategies like these can help your credit union increase its share of the auto loan market—and help members across the credit spectrum enhance their financial well-being.

 is director of loan growth products for CUNA Mutual Group. Contact him at 608-665-7178.

November 27, 2015

See How Credit Unions Are Giving Back for the Holidays!

As the giving season continues, we're thankful for all the credit unions and people who have been sharing photos of their holiday giving efforts with us through our #CUGiveBack Campaign.

As you can see, there's some great work going on to help others in communities across the nation, and each social media post that shows it pays it forward in a unique and meaningful way: We're donating $5 for the National Credit Union Foundation, who will use it to help host Financial Reality Fairs for teens in 2016.

In the spirit of the season, we'll be doubling the amount of our gift on #GivingTuesday to $10 per #CUGiveBack photo shared with us through Twitter, Facebook or Instagram.

We look forward to seeing you in photos!


November 24, 2015

We're Doubling #CUGiveBack Giving on #GivingTuesday

There's another celebrated day of the year that follows Thanksgiving, and it's not Black Friday or Cyber Monday.

It's #GivingTuesday, and we'd like to celebrate it with you!

We'll be paying tribute to credit unions and the people who love them that day by doubling the charitable gift we're making to the National Credit Union Foundation through our #CUGiveBack campaign.

That means the holiday giving photos you share with us will have twice the impact towards helping Generation Z kids with vital financial literacy skills:

For every holiday giving photo that's tweeted to us, posted to our Facebook page or shared via Instagram with #CUGiveBack by 11:59 p.m. on December 1, we'll give $10 to support the foundation's Financial Reality Fairs for teens.

Since the Thanksgiving break is here, we also thought these ideas for families from #GivingTuesday might be useful as you gather around the table to feast, reflect on what you're thankful for or trade laughs over your leftovers...

For more information and ideas on giving back this season you can find more family giving tips via #Giving Tuesday or the Family Dinner Project

How will you be giving back? We would love to see it!

November 23, 2015

Giving Thanks for the Credit Union Difference...

By Robert Trunzo, President and CEO, CUNA Mutual Group

This is the time of year when we all give thanks for the people and experiences that enrich our lives in lasting and meaningful ways. Credit unions do this for members every day, and I'm thankful for the opportunity to serve them through CUNA Mutual Group.
I'm also thankful to have the chance to connect with members like Tom Miller. He's with Land of Lincoln Credit Union, and he recently shared his story with us in the video you see here.
 Tom is living proof of the vital difference credit unions and options like disability insurance make for members -- especially when the unexpected happens. 
I found this story humbling, and I'm grateful to serve credit unions and hard working Americans like Tom. In my opinion, both make the world a brighter, better place.
What are you thankful for this season?

Connect with Robert Trunzo on LinkedIn

November 22, 2015

Members Can Outsmart the Unexpected

Studies show that many Americans are still living paycheck-to-paycheck and still many more could be financially devastated by an unanticipated accident or medical emergency.

That's why protection services like these can make a vital difference for hard working Americans who rely on credit union loans to keep roofs over their heads and for the transportation they rely on to take them to the jobs that pay their bills.

This infographic provides a brief tour of a number of services that give members an extra layer of protection against the unexpected and mean that credit unions have a few more ways to support the financial health of the people and families they serve.

How are you giving your members ways to outsmart the unexpected?

November 20, 2015

Look Who's Giving Back...

Everything we know about giving back, we've learned from credit unions and the people who love them. That's something you can see in the #CUGiveBack photos we've already seen since we launched the campaign this week.

As you can see from the highlights below, there is a beautiful giving spirit already budding for the holidays. And, every post you see in this post is paying it forward to the National Credit Union Foundation for Financial Reality Fairs that will help GenZ kids with financial literacy.

If you want to join us, here's how.

How are you giving back for the holidays this year?

Credit Union Trends Report Highlights (November 2015)

We have issued our Credit Union Trends Report for November 2015 (based on September 2015 data). See the highlights below, or click here for the full report.

  • During September, credit unions picked up 477,000 in new memberships, loan balances grew at a 10.5% annualized pace, savings balances rose 0.2%, firms hired 137,000 workers, nominal consumer spending increased 0.1%, and long-term interest rates increased 2 basis points. Third quarter economic growth came in at 1.5% and grew 2% from the third quarter of 2014.
  • At the end of August, CUNA’s monthly estimates reported 6,300 CUs in operation, down 29 credit unions from one month earlier. Year-over-year, the number of credit unions declined by 292, more than the 272 lost in the 12 months ending in September 2014.
  • Total credit union assets rose 0.1% in September, faster than the -0.8% decline reported in September of 2014. Assets rose 6.4% during the past year due to a 5.7% increase in deposits, a 17.1% increase in borrowings, and a 7.5% increase in capital.
  • The nation’s credit unions increased their loan portfolios by 1.2% in September, more than the 0.8% pace reported in September 2014. Loan balances are up 11.0% during the last 12 months. September is historically the month where seasonal factors have little to no effect on trend growth.
  • Credit union memberships rose a robust 0.46% in September, up from a 0.3% gain reported in September 2014. Memberships are up 3.9% during the past year due to robust demand for credit, solid job growth and comparatively lower fees and loan interest rates.
  • Credit union capital-to-asset ratios rose to 10.9% in September, up from 10.8% reported one year ago. Credit union loan delinquency rates fell to 0.73% in September, down from 0.85% one year earlier due to a stronger economy and double digit loan growth. Expect both credit unions and bank to loosen credit standards in 2016 

November 19, 2015

TruStage Tips: Maximizing Your Healthcare Dollars

It’s no secret that healthcare costs are continuing to rise, despite the enactment of the Affordable Care Act (ACA) in March 2010. With health insurance now mandatory for nearly every American, it’s up to each of us to make the best decision possible regarding our own healthcare.

Whether you work for a credit union, you’re a member or you simply care about making the most of your hard-earned dollars, these six tips can help you get the most out of your healthcare dollars and cut your overall annual medical expenses.

1. Pick the right insurance plan and understand what it covers. 
When selecting a health plan, don’t automatically choose the one with the lowest monthly payment. Look for the plan that best aligns with your current doctors and medications, and factor in your average number of doctor visits per year. Once you’ve selected the best plan for you, learn as much as you can about it. This includes the copays, referral processes and deductibles, so you have no surprises when you see your doctor.

2. Use preventative healthcare. 
It might seem counterintuitive to go to the doctor to save money, but being proactive about your health can save you in the long run. Catching illness early during a routine visit can make a world of difference – for your health and your budget. And, under the ACA, the majority of preventative services must be 100% covered, so you shouldn’t encounter a copay or co-insurance expenses to meet your deductible for most of them.

3. Check your bills for errors. 
People make mistakes, and clinic employees are no exception. Thoroughly review your bills because something as simple as the incorrect billing code could result in a higher charge. If you find a mistake, call the billing department to resolve it.

4. Negotiate your bill. 
If you visit the hospital or have an expensive medical procedure, ask for an itemized bill. After reviewing it and ruling out errors, ask about paying the negotiated rate. This is the amount private insurance companies or Medicare/Medicaid have negotiated to pay for services, and it’s often much lower than the cost listed on your bill. You can also ask if there’s a cash discount for paying the entire cost at once, or see if the hospital will work with you to create a manageable payment plan.

5. Save the emergency room for true emergencies. 
If your condition isn’t life-threatening, avoid the emergency room. When possible, schedule an appointment with your primary care physician instead. If that’s not possible, visit an urgent care facility as an alternative. Either are likely to cost you much less than the emergency room.

6. Shop around for medications. 
In many cases, a generic version of your name-brand prescription is available, and it will cost you a lot less. Medication prices can also range significantly from store to store, so shop around for the best price and look online for coupons and store discount cards that can make a big difference to your prescription budget over time.

If you’re currently seeking health insurance, it’s important to note that there are financial aid opportunities out there as well. For example, 75 percent of GoHealth insurance applicants qualify for financial help. Visit now through January 31, 2016 to learn more.

November 18, 2015

Make Your Holiday Giving Count One More (Easy) Way

The holiday season is upon us, and we're ready to see credit unions, members and everyone shine through the spirit of giving -- and through Twitter, Instagram and Facebook.

Holiday giving and social media are a great mix, for sure. Charity Navigator reports that 38 percent of those who donate to charity said they're more likely to do so during the holidays, and 58 percent of people share information about charities on social media because they feel it makes an impact.

So, we invite you to share the great things you're doing this season to help others and support your community through our #CUGiveBack campaign. It's a great way to celebrate your work with our industry and make your holiday giving or volunteering count one more way: We'll donate $5 for every #CUGiveBack post -- up to $10,000 -- to the National Credit Union Foundation to support Financial Reality Fairs for up to 5,000 teens in 2016.

Taking a few extra minutes to post a photo or video of your holiday giving can really make a difference for Generation Z students who may be truly out of sync with the financial realities of paying for college:

Studies show that, while 70 percent of 2015 graduating high school seniors will carry student loan debt, 75 percent don't have a college savings plan, 29 percent say their parents have never talked to them about saving for college and one-quarter think no amount of loan debt will be manageable after college.

If you're game to pay it forward for the holidays with us, please see (and share) the full details of our giving campaign here. Then, please post to us via Twitter, Instagram or Facebook by December 31st.

We can't wait to #CUGiveBack!

November 17, 2015

Members + Advisors = A Rewarding Life Equation

Credit unions and financial advisors can make a vital and lasting difference to members' financial health. According to a few financial advisors, helping members succeed is their raison d'etre.

You can see two real world examples of this in the two brief videos below.

Ann and Keith Bader say they're enjoying retirement, but that might not have been the case.

"Up until the time when I first started with Collins Credit Union, I really was doing my own financial planning, says Keith. "And, it wasn't working very well."

The Baders have worked with Brian Bock, Vice President, Members Financial Services (located at Collins Community Credit Union) since before they retired. And, according to Brian, their success is one more reason he does what he does:

"To see them out there walking on the trail, not having a worry in the world about where their money's coming from or how their investments are doing," he says. "That just makes my job very rewarding."

Leslie and Phil Jones have been members of Ascend Federal Credit Union for over 40 years. They turned to Randall Harris, Vice President, Ascend Retirement and Investment Services (located at Ascend Federal Credit Union) after he advised her parents for years.

"I think he really tries to search out what is best for us," Leslie says.

According to Randall, serving families like the Jones makes all the difference for him:

"The most rewarding aspect of being an advisor for me," he says, "is helping members -- having members be better off than they were before they came to see me."

November 13, 2015

Are You Focused on Holiday Giving? (Tips from NCUF)

The season of giving is approaching, and credit unions across the country will soon be spending time and charitible dollars in a collective effort to help others where we all live and work. 

This article from CUInsight and the National Credit Union Foundation provides valuable tips and insights on how to make the most of your plans for giving for the season this year.

Are you ready?

November 12, 2015

Discovery 2015 is Now Available On-Demand

Have you heard the news? In case you missed this year's virtual Discovery Conferene, it's now available to you, on-demand at no charge.

All you need to do to access these insights on disruption, payment technology, data security, lending, the credit union of the future and much more... is register here.

You're just a few clicks away from insights you may have missed -- or some you'd like to see again...

What are you waiting for?