December 17, 2014

Credit Union Trends Report: December 2014 (October 2014 data)


Economic activity increased 3.9% in the third quarter, at a seasonally adjusted annual rate, and grew 2.4% year over year. Final sales, which exclude the support to GDP from inventories, rose 4.1% indicating spending momentum is building for the U.S. economy.

The economy added 243,000 jobs in October, slightly less than the 271,000 reported in September, and the unemployment rate fell to 5.8%. This signals a tightening labor market with wage growth expected to accelerate in the near future. The 25% drop in oil prices from July through October provided consumers a boost in purchasing power similar to the 29% oil price drop experienced back in 1998. By 1999, retail sales grew at an annual pace of 8.5%, twice the 4.5% reported in 2008, which indicates retail sales and credit union lending in 2015 are looking up.

Report Highlights

  • At the end of October, CUNA’s monthly estimates reported 6,585 CUs in operation, down 5 CUs from one month earlier. Year to date the number of credit unions declined by 210, below the 236 lost in the first 10 months of 2013 and also 2014.
  • Credit union savings balances rose an outsized 1.3% in October, and 4.6% year-to-date, due to the month ending on a Friday payday and falling gas expenditures. Year-over-year asset growth of 5.8% is outpacing savings growth due to borrowings rising 19.2%.
  • The nation’s CUs increased their loan portfolios 0.85% in October, 8.9% YTD and 10.3% during the past year. Member business loan balances rose 3.8% in October, the fastest growing category, followed by adjustable-rate mortgages, 2.3% and new auto loans, 2.2%.
  • Credit union memberships rose 186,000 in October to reach 101.6 million, a 0.2% increase from September, and 3.3% year to date. Year-over-year, memberships are up 3.6%, the fastest pace since July 2003. With job growth expected to be over 250,000 a month in 2015 and new car sales to reach 17 million units, membership growth will remain strong for the next 12 months.
  • Credit union capital grew 9.9% during the last 12 months indicating stronger earnings performance for many credit unions. The movement’s return-on-asset ratio rose to 0.88% in the third quarter, up four basis points from the second quarter, due to a 7 basis point increase in asset yields, a 3 basis point increase in non-interest income, a 3 basis point increase in operating expenses and a 3 basis point rise in loan loss provision expense. Credit union capital-to-asset ratio remained at 10.8%, the highest in six years.

Total Lending

Credit union loan balances rose 0.85% in October, slightly better than the 0.72% pace reported in October 2013. During the last 12 months, credit union loan balances rose 10.3%, as credit union members’ willingness and ability to borrow and spend have both rapidly improved. Consumer confidence in October rose to levels not seen since October 2007, two months before the onset of the Great Recession.

Credit union loan delinquency rates (delinquent loans as a percent of total loans) fell to 0.74% in October, the lowest rate since August 2007. There is a strong correlation between credit union loan delinquency rates and the nation’s unemployment rate. During the last 12 months, the unemployment rate fell 1.5 percentage points, from 7.3% to 5.8%, while the delinquency rate fell 0.25 percentage points, from 1.01 to 0.74%. The dramatic improvement in both metrics is encouraging lenders to loosen their loan underwriting standards.

Credit Union Consumer Installment Credit (CUCIC)

Credit unions’ consumer installment credit balances rose 0.85% in October, or $2.5 billion, above the 0.5% reported in October 2013. Rising debt levels coincided with a modest 0.3% growth in total retail sales. Retail sales were depressed because of falling gasoline prices. But retail sales excluding gasoline stations rose a healthy 0.5%, indicating consumers did spend some of the money saved at gasoline stations. During the last 12 months, credit union consumer installment credit balances rose a healthy 12.3%. The last time credit unions reported annual growth over 12% was back in 1995. Credit card balances were unchanged in October signaling members are still wary of taking on higher-rate debt, and are using their credit cards for payment convenience by paying off new charges.

Vehicle Loans

Credit union auto lending continued to surge in October with new auto loan balances rising 2.2%, above the 1.6% reported in October 2013. This is the fourth month out of the last 5 that monthly new auto loan growth exceeded 2%. During the last 12 months, credit union new auto loan balances rose 20.5%, the fastest pace since August 1995. Vehicle sales (cars and light trucks) rose to a 16.5 million seasonally adjusted annual rate in October. Auto sales are currently growing at the fastest pace since 2006, the year home prices peaked.

Vehicle sales were boosted by increasing household wealth, lower gasoline prices, an improving labor market, new models, and better access to credit for borrowers with less than a prime credit history. The sales of expensive cars, those priced over $50,000, have surged by over 30% in the last year and will reach over 1 million units sold in 2014.

Meanwhile the sales of cars priced less than $50,000 are up 4.1% during the last year. Vehicle sales are expected to remain above 16 million units through 2017 as pent up demand is satiated and the economy produces around 3.4 million jobs annually.

Real Estate-Secured Lending – 1st Mortgages and Other Real Estate

Adjustable-rate first mortgage loan balances rose a robust 2.3% in October, the second fastest growing loan category for the month, and were up 15.4% year-over-year. Fixed-rate first mortgage balances fell -1.2% in October, but are up 5.3% during the last year. Existing home sales rose 1.5% in October, but are up only 2.5% during the last 12 months. The existing median home price reached $208,300 in October, up 5.5% since October 2013. Refinancings remain tame and are near a 6-year low given that mortgage rates have been so low for so long. Most homeowners who were willing and able to refinance have already done so.

Low interest rates, improving consumer confidence and rising home prices pushed home equity loan balances up 1.4% in October, significantly better than the -0.3% reported in October 2013. During the last year, home equity balances rose 7.8%, the fastest pace since August 2009. Credit unions’ interest rates on home equity lines of credit average 4.11% in October, according to Informa Research Services, 26 basis points lower than the bank average. Second mortgage loan balances also rose in October, increasing 1.1%, as the first mortgage refinance business dried up and fewer second mortgages were rolled into refinanced first mortgages.

Home prices rose 0.5% in October and are up 6.1% during the last 12 months, according to the Core Logic Home Price Index. However, prices are still 12% below their peak set back in April 2006. The home appreciation rate is expected to taper off to 5% in 2015 due to an increasing supply of homes. Rising home prices will increase household wealth and maintain the upward momentum of the Consumer Confidence Index. Both will encourage consumers to lower their savings rate and increasing spending on consumer durables in 2015.

Mortgage credit is still constrained because of new regulations, but is slowly easing as policymakers work to bring down some regulatory impediments. The Federal Housing Finance Administration, FHFA, announced plans in October to reintroduce mortgages with down payments as low as 3% through Fannie Mae and Freddie Mac. This should increase access to mortgage credit, which in turn boosts homeownership with low-to-moderate income and first time homebuyers.

Surplus Funds (Cash + Investments)

Credit union surplus funds rose 2.4% in October, or $9.0 billion, due to a large $13 billion surge in savings deposits. Savings balance growth has averaged a little over 3 billion each month. So approximately $10 billion of the $13 billion surge in savings balances was due to the month of October ending on a payroll Friday. Credit unions therefore placed the lion’s share of these new deposits into short-term investments with the expectation of abnormally large deposit withdrawals in the month ahead.

During the first nine months of 2014, the yield on surplus funds rose to 1.21%, up from 1.10% reported during 2013. The gain was a consequence of credit unions shifting investments into longer maturity investments. Surplus funds with a maturity less than one year fell from 42.5% in 2013 to 39.8% today. Meanwhile, investments with 1-3 years maturity rose from 23.9% of surplus funds in 2013 to 26.4% in 2013. Investments with even longer maturities rose from 21.2% to 23.6% of surplus funds. This is a signal credit unions believe the Federal Reserve will keep rates lower for longer.

Savings and Assets

Credit union savings balances rose an outsized 1.3% in October, and 4.6% year-to-date, due to the month ending on a Friday payday and falling gasoline prices reducing gas expenditures. This pushed year-over-year savings balances growth to 5.0%. Total credit union savings balances now stand at $972 billion, or 5.5% of nominal gross domestic product. In other words, credit union members’ savings deposits equal approximately 20 days of annual national income, up from 16.4 days set back in 2007, just before the onset of the Great Recession. Year-over-year asset growth of 5.8% is outpacing savings growth due to borrowings rising 19.2% and capital rising 9.9%.

Capital and Other Key Measures

Credit union capital grew 9.9% during the 12 months ending in October, while the 3-month moving average rose to 10.1%, the fastest year-over-year pace since June 2003, see figure 6. Net income is the income statement flow account that allows the balance sheet capital account to increase. Net income as a percent of assets came in at a relatively strong 0.88% in the third quarter, above the 0.69% reported in the third quarter of 2013 and above the 0.83% reported in the second quarter of 2014. Rising net interest margins during the last year boosted credit union return on assets.

Credit Unions and Members

As of October 2014, CUNA estimates 6,585 credit unions were in operation, five fewer than September. Using a 3-month moving average to smooth out large month-to-month volatility shows an average loss of 24 credit unions per month.

This is slightly more than one credit union per business day being merged into another credit. Year-to-date, the number of credit unions fell 210, slightly below the 236 credit union decline reported in both 2013 and 2014. During the past 12 months, the number of credit unions fell 249, compared to the loss of 281 credit unions in 2013.

Strong job creation in October helped propel credit union membership gains to 186,000. Total memberships reached 101.6 million, a 3.6% increase over the last year. This is the fastest membership growth rate since July 2003. Memberships rose 0.2% in October, faster than the zero growth reported in October 2013, and 3.3% year-to-date.

U.S. job growth and credit union membership growth is highly correlated. In October, the U.S. added 243,000 jobs, down from 271,000 reported in September, but above the previous 3-month moving average of 239,000. The types of jobs created were well-diversified across many sectors: lower-paying retail jobs, middle-income manufacturing and construction jobs, and higher-paying professional and healthcare jobs. In 2015, job growth is expected to accelerate to over 300,000 net new jobs per month. This will underpin continued strong credit union membership growth next year. The labor market tightened in October as the unemployment rate fell to 5.8% from 5.9% in September. Expect wage gains to accelerate in earnest in 2015 as the unemployment rate approaches its long-run natural rate of 5.5%.

If you would like a PDF copy of the full report, please email

December 16, 2014

2014: Our Year Measured in Customer Impact

As we look back over the past year, our purpose is clear. We exist to help people build a better financial future, and we do this by focusing on our customers and living our commitment to doing business with integrity.

We measure how well we've performed and lived up to our purpose in ways--big and small--that we have impacted our customers.

The cumulative impact of our products and services on those we work hard for all year is impressive and means a great deal to us, but hearing individual stories of those we have helped means even more.


We have protected more than $260 million in credit union member loans, enabling 8.5 million members to keep their homes and cars if unforeseen setbacks were to come.

Helen Agnew is one of those 8.5 million and her story is our purpose. A member of CU Community Credit Union in Springfield Missouri, Helen tells us how the credit union offered our debt protection product on a loan that ultimately made all the difference in keeping her and her daughter on their feet when she became unemployed. (Click image to watch.)


This year, we launched 3 new insurance products: Whole Life, Children's Whole Life and Health. We also optimized our Life claims handling process for beneficiaries, with 25% of claims now paid on the initial call. There are now more than 15 million credit union members protected through our TruStage insurance.

Belinda Lockridge is just one of those members but her story is our purpose. She is representative of the millions of underinsured Americans we serve to build financial security for their families. (Click image to watch.)


As a provider of retirement plans for credit unions and small businesses, we strive to include educational features that will improve the organizations’ participation rates in the programs. 

More than 45,000 credit union and small business employees now track their progress toward retirement and are able to easily make adjustments through our online planning tool. 

Nathan Grossenbach of Shoreline Credit Union in Two Rivers, WI tells the story of how we exceeded their expectations with the transition to a new 401(k) plan and helped their employees understand the plan and how they would benefit from participating. His story is our purpose. (Click image to watch.)


This year with our business protection solutions and risk management resources, we  paid $64.7 million in claims (through Q3) and sent alerts to 24,000 credit union employees, helping them mitigate and overcome risks. We also visited nearly 1,000 credit union sites to assess risks and provide strategic consultation. 

Unfortunately, Augusta VAH Federal Credit Union experienced a devastating fire to its main branch in 2011.CEO Phyllis Cochran's story--of how our teams helped her CU recover--is our purpose(Click image to watch.)


CUNA Mutual Group's Wealth Management helps consumers achieve a more secure financial position by helping them save for and realize their lifetime dreams, whether that’s their child’s education, a dignified retirement, or simply financial peace of mind. We’re doing this by providing unique, simple-to-use, high-value service and product solutions to consumers through financial advisors.

This past year, we paid credit unions more than $65 million in fee revenue.

David Young, EVP at Commonwealth Credit Union in Frankfort, Kentucky, shares why they partner with CBSI to enhance their investment services and deepen member relationships. His story is our purpose. (Click image to watch.)

In 2015, our focus on our purpose -- helping people build a better financial future -- will be stronger than ever. We'll continue investing in our capacities and optimizing our products and processes to better serve our credit union customers and their members. We will build on our strengths and accelerate our growth for the healthy future of the credit union industry. Our customers are our purpose.

Watch for more updates in the coming weeks on these stories and where we are headed in 2015.

December 10, 2014

28 Years Later: Bill Klewin Retires, Still Energized by Credit Unions' Passion

Bill Klewin, director of regulatory compliance for CUNA Mutual Group, is retiring after 28 years with CUNA Mutual Group. Andrea Stritzke, formally with PolicyWorks in Des Moines, Iowa, will be filling his position at the company in January.

Bill Klewin
Director of Regulatory Compliance
“Bill will be missed, not only as a long-term and dedicated employee, but as a nationally recognized consumer lending expert and valued industry resource for credit unions,” said Kathy Blumenfeld, vice president, CUNA Mutual Group Lending and Payment Security. “The expertise he brought to the position through his many industry speaking engagements and relationships is difficult to replace. But we are thrilled to have Andrea step in and build on what Bill has established. Andrea is uniquely qualified to step into this position without missing a beat.”

Klewin joined CUNA Mutual Group in 1986 as associate legal counsel and has held numerous leadership positions, including his most recent role as director of regulatory compliance for the company’s Lending and Payment Security business. Klewin made his mark on credit union lending with creative solutions, fresh ideas and LOANLINER® product designs. Throughout the last several years, Klewin led the company’s lending products through a highly active regulatory environment. He built a strong team of compliance experts and readied them to successfully handle ongoing regulatory changes.
“I’ve been helping credit unions with their lending, operations and regulatory compliance for 28 years. The most rewarding part of my job was exchanging insights with our customers. I will miss their questions and comments, their camaraderie and their passion about what we do. Most of all, I will miss the feeling of satisfaction when I have helped someone at a credit union solve a particularly troublesome problem. Thank you to everyone with whom I’ve worked."

Andrea Stritzke
Stritzke joins CUNA Mutual Group from PolicyWorks in Des Moines, Iowa, where she served as vice president of regulatory compliance, and was responsible for the delivery of PolicyWorks’ regulatory services and new product development while providing credit unions consultation and training on various regulatory matters. In addition, Stritzke assisted credit unions with strategic compliance program management, and is a nationally recognized speaker on lending and deposit compliance issues.

November 5, 2014

Prepare today for looming TILA/RESPA changes

by Jon Bundy, CUNA Mutual Group's Regulatory Compliance Manager

The Consumer Financial Protection Bureau (CFPB)’s TILA/RESPA Integrated Disclosure Rule is the largest mortgage lending regulatory compliance change seen by credit unions in recent times. Specifically, the rule will impact credit unions’ relationships with their system, document, and service providers, and, most importantly, their members and credit union staff.

Credit unions must act now to prepare for the combined disclosure rule stemming from the Dodd-Frank Act’s changes to the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA).

The new disclosures are not merely replacing or combining the existing disclosures. The regulations require loan disclosures to change dynamically to reflect each borrower’s unique loan features, which means the new documents will have new data elements, calculations, and restrictions, and incorporate dynamic elements based on loan type, loan feature, and loan purpose.

Taking everything into consideration, there could be thousands of permutations of the new disclosures because of the dynamic nature of the documents.

To be fully prepared, credit unions must:

  • Start making and documenting business decisions regarding the type of lending programs offered and fees and services charged.
  • Update systems with new data fields and calculations and work with system and document providers to make sure they are on track.
  • Establish procedures to guarantee service providers and settlement agents are walking in step with your credit union to address restrictions and timing limitations.
  • Make sure document providers get your new disclosures to you in time to test and train.
  • Determine who is in charge--know your compliance resources.
  • Know how each department will be impacted and how third-party partners can help.

The compliance deadline is looming--the TILA/RESPA rule becomes effective and must be complied with on Aug. 1, 2015. Don’t get caught unprepared, start having these discussions today.

Jon Bundy is compliance manager of service products for CUNA Mutual Group, responsible for the development of lending and deposit products and assisting credit union leaders with maintaining regulatory compliance through their policies and procedures.

November 4, 2014

CUNA Lending Council Crashers lay down some straight talk...

We caught up with a couple of CUNA Lending Council Crashers for some straight talk about what drives their generation to chose one financial institution over another.

We asked...

  • What are financial institutions missing that would otherwise make them more attractive to you and your millennial peers? 
  • What do you or your peers care most about at your financial institution of choice?
  • How can credit unions adapt to make themselves more appealing to younger generations today and with generations to come?

They told us straight...

The answers we heard confirm what we've always known on one level, but also remind us not to forget about the real and human elements that are, and always have been at the center of the credit union idea. 

Julia Boldina, Operations Manager, NYC Federal CU

Keep up with technologies at other FIs
Embrace Apple Pay
Gen Yers still want to talk F2F with someone

Renee Mullins, Lending Consultant, Call Federal CU

Convenient technology matters
Social media connection matters
Local businesses supporting local economy and giving back matters

Amanda Kissner, Loan Officer, Wakota Federal CU

Technology and easy processes 
Focus on the values of the cooperative movement
Stay local and team up with other like-minded businesses

Credit unions--what I'm hearing is that this is our game to lose. Younger generations may want the best of both worlds when it comes to fast, convenient technology and local, socially responsible practices, but that's good news to a business that can offer both.

Learn more about the CUNA Lending Council Crashers.
Learn more about Filene's The Cooperative Trust and Crasher Program.

November 3, 2014

4 credit unions' excellent lending programs highlighted at CUNA Lending Council luncheon

We celebrate the credit union industry's Consumer and Business Lending excellence through these 4 shining examples.

Winning CUNA Mutual Group's and CUNA Lending Council's Excellence in Lending Awards at the CUNA Lending Council's 20th annual conference are:

Carter Federal Credit Union
Shreveport, La.
$230,000+ million in assets; 30,000+ members
Consumer Lending, Less than $250M in Assets
Why they won: Significantly grew more profitable direct lending program while maintaining a moderate indirect lending channel. Click image to view short video about their program.

Clearview Federal Credit Union
Moon Township, Penn.
$900 million in assets; 86,000 members
Consumer Lending, More than $250M in Assets
Why they won: Revamped home equity products that are flexible and priced more competitively. Click image to view short video about their program.

Numerica Credit Union
Spokane Valley, Wash.
$1.3 billion+ in assets; 103,000+ members
Business Lending
Why they won: Hired experienced commercial loan officers and credit personnel; purchased software to set for more home-grown business lending. Click image to view short video about their program.

Highmark FCU 
Rapid City, S.D.
$95 million+ in assets; 9,500+ members
Business Lending
Why they won: Investing in employees and technology, as well as adding a personal touch to its focus on small businesses and ag producers. Click image to view short video about their program.

Full News Release here

September 23, 2014

Loan Growth for CUs Best Since 2006

We've been on quite the upward trend with the monthly "Credit Union Trends Report" from our chief economist, Steve Rick. In fact, according to recent numbers, the credit union industry has seen a 10.2% increase in loan balances in the past year alone - that's the highest levels since February of 2006.

Rick points out a few other things in this month's report:

1. Vehicle lending was "red hot" this summer. So hot that "overall credit union loan growth is more affected by used auto loan growth than new auto loan growth."

2. Pressure point, secured lending. First mortgages were down 33% in the 2nd quarter this year compared to the same quarter in 2013. Rick says, "this has lowered non-interest income and put downward pressure on credit unions' bottom line." 

3. Membership boom continues! CU membership is up 2.1 million year-to-date. According to Rick, that's a 17% faster pace compared to the similar period in 2013. Rick says "membership growth is highly correlated to asset size." 

Want to hear more from Steve Rick? Check out our short CU Trends video overview

September 18, 2014

#DiscoveryCon - what to expect?

The Discovery Conference - it's this mix of the benefits of going to a huge credit union industry conference with piles of content, networking, live chats - all online and all without the need to iron anything. Heck, you don't even have to wear shoes!

Our jobs allow us get a sneak peak at the content and sit in on the presentation recordings. And we wanted to share a few things that we've already learned even before the show starts on Oct. 15!

Disruptive Economy - disruption has been happening in many other industries. Our SVP of Strategy & Business Development, John Lass shows us what has happened to industries/companies ready or not for the disruptive waves.

Click photo for "Disruptive" teaser video 

Social Media & Compliance - Co-founder of Chatter Yak!, Bryce Roth, pinpoints the social media responsibilities of credit unions. Hint: disclaimers on Facebook

Roth w/ importance of FFIEC rules

Mobile Trends & Auto Purchasing - "The majority of auto buyers now research their options online and on smartphones." says Steve Hoke, director of loan growth for CUNA Mutual Group. He hits the mobile trends and data points CUs should know.

Hoke goes mobile

There are 10 other presentation sessions that we don't have room to cover on this blog. So, check out the details of Discovery Online and over on Facebook - see you Oct. 15!

September 5, 2014

The Mobile Mindset

How important is offering mobile access to customers to the financial industry today? New smartphone lending data from CUNA Mutual Group answers that question:
  • 63% of adult smartphone owners use phones to go online.
  • 34% of those do online searches on their phones rather than a computer.
More to the point, mobile website optimization for smartphones/tablets are key business practices to ensure financial institutions don't miss any demographic segment (boomers, millennials, everyone).  For instance, the "Consumers Want Better Mobile Banking" study discovered this stat:
  • 1 in 6 millennials say poor mobile experience will cause them to find a new financial provider.
Here's the thing: mobile-optimized sites allow smartphone/tablet users to show and compare products easily, whenever and wherever they want. Major purchases, such as buying a new car, are happening on mobile devices. I give you this stat from "Mobile Device Use at the Dealership:"
  • 63% of auto shoppers researched & shopped on their mobile device while at the dealership.
Even inside our own building, we are watching dramatic increases in mobile lending trends. Just look at the graphic below!

Watching mobile trends is part of my job, and I've been talking to credit unions across the country saying if they don't innovate through mobile offerings, they're likely to lose out with existing and potential new members who may go elsewhere. I suggest you visit your credit union's website on your phone and think about how good or iffy the experience is for you - because that's what your members are looking at these days. 

Guest blog post by: Steve Hoke - he's the director, loan growth products at CUNA Mutual Group. Want to know about mobile trends? Ask this guy. 

August 20, 2014

CUNA Mutual Group Recognized as CIO 100 Award Winner for the ZONE

International Data Group's CIO magazine named CUNA Mutual Group among its 2014 CIO 100 award recipients. The 27th annual awards program was held Tuesday evening, Aug. 19, and recognizes organizations worldwide that exemplify the highest level of operational and strategic excellence in information technology.

CUNA Mutual Group's CIO, Rick Roy, was honored with accepting the award.
The Award Winning Project:
  • The ZONE:
    • A tablet application that helps credit union members plan for retirement security. 
    • Launched in August 2013, the ZONE presents CUNA Mutual Group’s registered index annuity, MEMBERS® Zone Annuity, in a unique, high-performance web application for the iPad. 
    • The ZONE helps advisors and credit union members work together to create a zone of risk and reward aligned with the member’s investment goals.
"For 27 years now, the CIO 100 awards have honored the innovative use of technology to deliver genuine business value," said Maryfran Johnson, Editor in Chief of CIO magazine & Events. "Our 2014 winners are an outstanding example of the transformative power of IT to drive everything from revenue growth to competitive advantage."

August 6, 2014

Crash the CU Water Cooler

The big credit union industry events, like GAC and ACUC have been crashed for the past few years by members of The Cooperative Trust. CUNA Mutual Group has been thrilled to be part of this new wave and new generation of industry leaders to help bring new life to the credit union and cooperative movement.

2014 Crash the GAC
2012 ACUC Crash - San Diego

Point is, it's time to change things up a bit.

We've teamed up with the Crashers again to spread this program to other industry events around the country and bring in even more opportunities for Crashers to attend. Our first stop - the CU Water Cooler Symposium in Austin, TX coming up in September!    

What do you need to know? Application deadline is Friday, August 8! All the other info, check the video below.

Stay tuned for other event announcements as the year moves on - until then Crashers, we'll see you in Austin! 

July 22, 2014

100 Million Members - Now What?

Each month we look at the latest Credit Union Trends Report for the information our credit union followers need/want to know. Typically, it's loan trends (auto, home, refinancing) and membership growth.

This month in our interview with our new chief economist, Steve Rick, we had a chance to talk about hitting the 100 million member milestone. While we expect to hit the mark sometime this summer, Rick pointed out that "credit union membership is growing 25-percent faster than this time last year." Of course, we had to ask why? He attributes the rapid growth to a few things:

  • General increase in credit demand in the over all economy.
  • Labor market is improving.
  • People are ready to make bigger purchases (cars, appliances...).  
And with these new members comes important marketing opportunities through, not only direct marketing, but membership-relation-focused-marketing, social media, mobile marketing and on and on and on.  

The question is, we have 100 million members (and counting) waiting to be served, now what are we going to do to with them? 


July 3, 2014

The Cost of a Data Breach

According to a Ponemon Institute report, the average total cost of a data breach is $3.5 million. And that breaks down to $145 for each lost or stolen record containing sensitive and/or confidential information!

There was a lot of chatter at ACUC about Jay Isaacson's presentation about "Cyber and Data Security Losses." He talked about the "significant dollar losses and reputational damage done to companies.

According to the 2014 Verizon Data Breach Investigation Report, there were 1,367 data breaches in 2013 - 465 of those were in the financial industry. Isaacson said, "Network security is only as strong at the weakest link."

He asks credit unions to try and answer these questions when it comes to responding to a cyber-attack:
  • Does your credit union have an Incident/Breach Response Plan?
  • Does your credit union regularly review the controls and security of 3rd parties housing your data?
  • Does your credit union have mechanisms in place to detect and react to potential Denial of Service (DDoS) attacks?"
The question is, what's the first thing you'd do if you found out there had been a data breach at your credit union?

July 2, 2014

Credit Unions Facing a "Perfect Storm"

Unlike banks, credit union executives are limited on how much they can contribute and receive from retirement plans.

CUNA Mutual Group's Bruce Bauer (senior executive benefits specialist) spoke about this controversial subject at ACUC saying credit unions are facing a "perfect storm" when it comes to recruiting, retaining and compensating executive talent. "Jobs are opening up, executive talent is being aggressively wooed away from credit unions." 

Think of these numbers:

  • Nearly 50% of U.S. employers are challenged to fill mission-critical positions.
  • 63% of organizations say other companies are trying to recruit their leadership.

What can be done to help keep your excellent executive at your credit union? Bauer has a four-word answer: Supplemental Executive Retirement Program (SERP). "Regulatory provisions allow credit unions to fund SERPs through formerly impermissible assets." 

When developing executive compensation plans, Bauer recommends three things for credit unions:
  1. Align compensation philosophy with their mission, organizational and financial goals.
  2. Encourage leadership continuity by defining a scope that addresses the CEO and key executives.
  3. Use peer compensation data to establish desired competitiveness levels.
What are your credit unions plans for keeping your executives?

Learn more about SERP here

July 1, 2014

Time to get real: Mobile platforms aren't 'nice to have'

Have you recently applied for a loan from your credit union through the same channels your members do? How was the experience?

"If a credit union wants to be a full-service provider in their member's delivery channel of choice, you need to have a mobile first mindset across the entire business – or your CU will lose out in the end,”  CUNA Mutual Group's Robert Israelite emphasizes during his Discovery session Tuesday at America's Credit Union Conference.

Perhaps hard to hear, Israelite brings to light the reality that many veteran CEOs and credit union boards are far removed from the behaviors and needs of their members. In fact, according to Google's "Think Insights" study, if your website is not mobile-optimized: 

The old 'nice to have' is the new 'need to have.' Israelite recommends credit unions looking to build out their mobile capabilities take a deep breath and:

  • Start with your mission, vision and values --  determine if your goals and strategy relate to mobile and if so, build it into your business strategy at the very top.
  • Put yourself in the shoes of a real member -- make it a priority for all your staff to experience and understand every online member-facing channel. 
  • Go through every link on your site -- if you don’t control it talk to business partners who do to get it optimized for mobile. 
Essentially, the key here is to understand what your members are experiencing. And, Israelite adds, "you'd better get moving because you're already late to the party. Many credit unions have already lost more members than they’ll ever know about. Those members have moved on and they’ll never come back."

Like what he has to say?
Listen to a radio podcast with Israelite for more in-depth info.

June 24, 2014

#ACUC - Content for Your Credit Union

This weekend, we will be heading out to Americas Credit Union Conference (ACUC) in San Francisco and we wanted to give you a look at some content we will be sharing that could be valuable for your credit union.

Monday, June 30:
How do small credit unions increase income? This topic will be discussed at the "Small Credit Union Roundtable" and we will share what answers they discuss.

Tuesday, July 1:
Integrating mobile into your loan growth strategy - one of the "hotter" topics of the year. We'll share the latest mobile trends and how credit unions execs and marketers can wrap their heads around this ever-evolving mobile world.

Wednesday, July 2:
The challenges of credit union executive churn - there's a "perfect storm" brewing with the restrictions CUs have in retaining executives. We'll talk about possible solutions.

Latest CFPB changes impacting lending - always a discussion that changes almost weekly. Our compliance guy Jon Bundy will join us for what CUs should watch out for.

Thursday, July 3:
Data, cyber and security risks - nothing gets the blood pumping more than data breach issues. We'll discuss what credit unions can do to prepare for the worst.

Obviously we'll have more content coming from ACUC in a steady stream to your social platforms. Want to chime in, have questions, or want to connect? Ping us on all of our platforms or right here while we're at ACUC from June 29-July 3.

June 12, 2014

Payment Disruption - It's Getting Interesting

 The following is an excerpt originally published in Credit Union Magazine

Investment in retail financial services innovation has exploded since the financial crisis. The evidence is compelling:
  • Global investment in financial technology has tripled from $930 million in 2008 to nearly $3 billion in 2013, according to Accenture;
  • Of the 1,096 “payments” startups listed in early May on AngelList [], 216 joined this online investment platform for start-up companies in 2014.
  • Large players outside financial services have joined venture capital firms in making significant investments in the field. Google, for instance, recently invested in three lending startups.
These investments could potentially disrupt the traditional business models banks and credit unions have relied on for years.

Andrew Sorkin recently wrote in The New York Times’ DealBook column, “If the last three decades revolutionized the information and telecommunications industries, the next three may upend the basic tenets of finance: currencies, credit and banks, as well as payment and transmission systems.”
Let’s take a closer look at some of these disruptive innovators:

  • PayPal has a redesigned mobile app and introduced Beacon, a Bluetooth Low Energy device that connects to a customer’s smartphone when they enter a store to enable hands-free payment at the point of sale.PayPal offers, “Bill Me Later,” which allows customers to defer payments for items purchased via PayPal.
  • Lending Club, the largest U.S. peer-to-peer lender, facilitated nearly $800 million in personal, unsecured loans in first quarter 2014. Last year, Google led a $125 million investment round in Lending Club.
  • T-Mobile recently partnered with The Bancorp to offer a prepaid debit card and mobile app, which it markets as a checking account alternative.

The future promises even more potential for disruption as the true impact of new and yet-to-be conceived innovation is felt. For example, Bitcoin’s true impact may have nothing to do with virtual currencies—Bitcoin’s lasting innovation may be its platform, which enables peer-to-peer transactions without relying on a trusted third party or clearinghouse.

A myriad of industries have been disrupted in recent years by new technologies and business models (e.g., e-commerce, digital music, digital photography, e-books, etc.). Retail financial services may be nearing its own moment of disruption.

Original article written by John Lass, senior vice president, strategy & business development, and Steve Heusuk, senior manager, strategy & business development, for CUNA Mutual Group.

June 2, 2014

3 Mobile Challenges Credit Unions Should Think About

Steve Hoke, CUNA Mutual Group's leader of the AskAuto app wants credit unions to think about three challenges when it comes to implementing a mobile strategy:

Time - it's the biggest challenge for credit unions wanting to start or increase their mobile presence. Hoke says to take the time to see what "mobile channels your members are using. It'll help you determine what products and services to roll out and when."

Risk - The risk here, according to Hoke, is not going all-in with a mobile marketing presence. He says, "The risk is members will move or switch to a different financial institution if you don't have the right tools." Be mobile in everything you do.

Prioritize - The final challenge is prioritizing what's most mobile-important to your members. Hoke says think of three things:

1. Mobile Banking Channel Platform: get this mobile foundation set before you do anything else.
2. Lending Channel: this is a great revenue driver for your mobile marketing.
3. Engagement of Members: what is the mobile angle of what you do? Members are already there - engage with them.

For more information, check out this full interview with Hoke in CUNA Mutual Group's Digital Lab.

May 14, 2014

Record Membership Growth...Sustainable?

Our chief economist, David Colby has seen it all over the past three decades - ups, downs, record numbers, crashing economy, and WKRP in Cincinnati (he's a big fan). This month's Credit Union Trends Report brings with it some interesting and record-breaking numbers and facts:

  • Annual loan growth has improved for 30 consecutive months and at 8.1% it is at its highest level since October 2006.
  • Vehicle Loan growth is the strongest it's been since March of 2004.
  • 1 million new credit union members in Q1 of 2014
Colby sat down with us in the Digital Lab to discuss these (and other) huge points for the industry. But the question we had to ask was, "Is this membership growth sustainable?" His short answer, "Absolutely not!" Check the full interview below or click here

April 30, 2014

Leadership is Not a Title

One of the biggest challenges future chief information officers will face is juggling the need for innovation while remaining efficient.

With the growing challenges in today’s environment, from regulation and economic volatility to globalization and changing consumer behaviors, IT leaders must learn to balance these forces on a regular basis. CIOs are driving both innovation and efficiency that can lead to huge amounts of energy spent and little motion forward. Although CIOs have always faced these competing imperatives, current market trends have increased the tension between the two.

To help navigate through this new market environment, it’s important to generate high levels of engagement among those you work with and connecting with peers beyond the project and interact at a strategic level.

Bottom line, leadership is not a title, or a job, or being a witness. It’s about going beyond the typical leadership characteristics that are essential to helping modern IT leaders succeed.

For example, it is important to be relevant in your industry by building and maintaining one’s credibility and thought leadership. Read what your business counterparts are reading in the today’s business and technology publications, blogs, and websites. They want to know that you are ‘in the know’ and can talk intelligently about technology trends that impact their business. You have to have a point of view. 

Guest Blog by Rick Roy, CUNA Mutual Group's SVP, Chief Information Officer

April 28, 2014

High Ethical Standards - More Than Just the Right Thing to Do

"There is a direct and positive correlation between business performance and companies with high integrity."

Steve Koslow @ HR Council

This week at the CUNA Human Resources and Training and Development Council Conference, there's a lot of chatter about "ethics." Our very own Steve Koslow, SVP, chief ethics and compliance officer, brought up some interesting stats about businesses with a strong ethics program and how it can help credit unions.

The following numbers Koslow shared are from a survey by corporate and regulatory consultant LRN and PR firm Edelman
  • 94% of employees surveyed said it's critical or important that they work for an ethical company.
  • 36% of employees surveyed left a job because they disagreed with the company's ethical standards.
  • 85% of customers will go out of their way to buy from a company they trust. 

We've seen time and time again, maintaining the reputation of trust is critical to maintain and grow your membership base. What ethical programs are in place at your credit union?

April 11, 2014

A Breakthrough Ruling For Credit Unions

CUNA Mutual joins with credit unions in celebrating IRS's acceptance of more than 15 years of work by CUNA Mutual Group, CUNA, AACULE and NASCUS in discussions and negotiations with IRS, together with two federal court decisions recognizing State chartered credit unions' legitimate role in providing insurance and broad financial services to their members. 

According to CUNA’s April 9 news release, “the Internal Revenue Service recently issued a memorandum that defines nearly all credit union products at stake in the litigation as "substantially related income"--not subject to unrelated business income tax (UBIT).” 

Revenue from the following income-producing activities are deemed "substantially related income" and therefore not subject to UBIT: 
  • Sale of checks/fees from a check-printing company;
  • Debit card program's interchange fees;
  • Credit card program's interchange fees;
  • ATM fees from member transactions;
  • Interest from credit card loans;
  • Sale of collateral protection insurance;
  • Credit life and credit disability insurance (not subject to UBIT if sold to members); and
  • Guaranteed asset protection (GAP) auto insurance (not subject to UBIT if sold to members).
In recognizing these legitimate activities, the IRS also recognizes State chartered credit unions' exemption from federal taxes on the income from these activities.

Importantly, the credit unions' dual chartering system is enhanced by this decision that provides a more equitable treatment of the tax exemption of Federal and State chartered credit unions. 

This is a welcome development for credit unions and couldn't have been achieved without the countless hours of hard work from so many people, including CUNA Mutual's Faye Patzner.

Credit union detractors should take heed: Congress, the federal courts and IRS are unified in their decisions that credit unions' purpose is to meet the contemporary financial services needs of their members, and not merely basic loans and savings accounts.

Guest Blogger: Larry Blanchard, Chair--UBIT Steering Committee
CUNA Mutual Corporate and Legislative Affairs

Larry Blanchard has been instrumental in shaping today’s credit union landscape. In addition to working for CUNA Mutual Group for more than 15 years, he has worked for every major credit union organization in the U.S. Without Larry's efforts in helping to make H.R. 1151 law, there might not be a credit union movement today. He was inducted into the Cooperative Hall of Fame in 2010.

April 8, 2014

The Easy Retirement Planning Approach

National Retirement Planning Week is set for April 7 to April 11, 2014.  Does this make you think about your retirement savings?  How’s it going for you?  If you’re like most working Americans, you spent more time pondering the menu at your last restaurant than planning for a secure retirement.  The secret to getting ahead is getting started.  So let’s go…

Most people avoid thinking about retirement savings because it seems too complicated.  “What about the stock market?  Where are interest rates going?  Is it a good time for bonds?  When will the economy  get better?”  All these questions seem dizzying and are impossible to answer.  So, we suggest you simplify things and focus on the two things can control. 

First, how much should you save?  This differs for everybody but here’s some general direction.  If you’re in a company sponsored 401(k), always invest enough to capture the entire company match.  That’s a starting point.  Even better, make sure your total savings adds up to 10% of your gross pay.  The best approach is to use a retirement calculator and find out how much you should be saving to reach your goals…then save that much.

Second, determine the appropriate asset allocation of your investments (mix of stocks, bonds and fixed).  A good target date fund will do this for you.  They are designed to have an appropriate mix that gets more conservative as you approach retirement.  If you do it yourself, remember that the younger you are the higher % of stocks you should own.  For example, a thirty year old may have 75% to 90% in stocks whereas a fifty-five year old should have 35% to 60% in stocks.  But pick a reasonable mix and stick with it and avoid trying to time to market.

April 4, 2014

Same old, same old...except when it's not

April 6, 2014 marks the 42nd running of the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. Credit unions have been the title sponsor, raising money for Children's Miracle Network Hospitals for the past 13 years. And this will be my 6th year organizing the CUNA Mutual team and running as team captain.

For those of us who come here often, it pretty much looks the same each year. A picture of the race expo or the race course from this year will look exactly like the expo and course from last year. Not very exciting, right? It's easy to see the same stuff every year and think, "What's new? What's different? Why am I about to run 10 miles in this race, again!?"

Cherry Blossom Run Expo 2014

Cherry Blossom Run Expo 2013

But as I walked into the expo this year, and I saw the familiar set-up and the familiar faces, I realized something I hadn't quite been able to articulate before. These people--runners, volunteers, organizers, supporters--just like me, are here again, doing it all over again because they get what this event is really for--it's not for the runners, the spectators, the sponsors or the credit unions....

It's about the fact that every year this race is run, there's between 500,000 and 1 million MORE dollars raised for NEW children and families that unfortunately need the care that Children's Miracle Network Hospitals can give, but fortunately because of this event, there's money available to allow them to get what they need to survive. 

So for those new families, even those who've had long medical struggles and are receiving new and better treatment each year--for them, none of this is same old, same old. To them, to these children and their families, the fact that we gather in D.C. every year and keep running, means everything. 

March 28, 2014

What It Takes

In the past few days, we were recognized as one of the World's Most Ethical Companies. If you take a look at the full list of companies who received this award, you'll find brands like Gap, Google, and Kellogg - - and us! 

We spoke with our chief ethics and compliance officer, Steve Koslow, about the award (video above) and actually we found out that this award is something that's a lot harder to get than we thought. 

The thing is this: we get to work for a company that actually kicks some serious ethical-ness (word?) - and we're proud of that!

March 21, 2014

#DigitalLab - what we've been up to

For the past several months, we've been working on what we now refer to as the #DigitalLab inside the halls of CUNA Mutual Group. It's a first-of-its-kind space in the industry dedicated to the study and execution of social media.

I'll stop writing and let you see what we're talking about. We are excited and appreciative of what we've been given to take social and digital conversations much farther than ever before. To our supporters, thank you. To our "not sure-ers," just watch. For a full view of our plan, just click the photo.

March 11, 2014

Social Media Engagement

So many people and organizations continue to chase the magic bullet of social media - do little and get huge rewards. What it really comes down to is a lot of work and genuine engagement with your audiences to grow your business.

Social Media Today has a lengthy write up about engagement we thought we'd share. You'll find the "motivators that drive people to engage." 

We have several definitions of engagement here including: be real and share what we knowSocial media engagement - what's your definition?