By Frank Allgood, Your Marketing Co
“It's ironic, butterflies get all the attention; but moths – they spin silk, they're stronger, they're faster.”
If you didn’t know, I’m quoting a television show that ended seven years ago. Yes, I admit it, I’m a LOSTie. I watch all 118 episodes at least once a year. I long for the day where I may attend the LOST Convention held in Hawaii.
Earlier this month, our friend and host of The Strategic Hotbox, Brandi Stankovic, spoke at our YMC Family Event. During her presentation she taught our clients how to “learn, love and kickass,” – and she also gave props to my favorite TV show. Hey, great minds think alike!
She also gave a remarkable statistic: 48% of organizations in the United States could not – due to lack of skills – find a viable internal candidate if they had to replace the CEO right now.
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By Kathryn J. Davis, President/CEO, BALANCE
By any measure, the U.S. economy appears to be on a roll. With employment rates on the increase, housing prices at an all-time high, and bankruptcy filings down, it makes sense that today’s consumer financial health is doing great, right? Not so fast.
When you look past the data and statistics, you’ll see a very different story. While unemployment has decreased, median household income has not caught up to pre-2000 wages. Consumers still struggle to pay bills on time. Most telling, according to the Federal Reserve, 47% of Americans could not come up with $400 if a financial emergency arose.
This is not the profile of a financially healthy America.
For credit unions, this should be a wake-up call for mobilization. As an industry, credit unions are uniquely positioned to make a difference in the financial lives of their members. And if we can help make a difference – help a member pay off debt, prepare for a financial milestone, or increase their credit score, we not only create a loyal member, we are doing business in the most personal way possible.
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By Chip Filson, Chairman, Callahan & Associates via CreditUnions.com
Merging the TCCUSF and NCUSIF is a good idea. But don’t let NCUA fool you into keeping $1 billion of your members’ money.
The NCUA board’s decision to merge the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) into the National Credit Union Share Insurance Fund (NCUSIF) is a good idea.
The closure of the TCCUSF will reduce expenses, end contracts that at bestperpetuate the continuation of misleading judgments, and create sorely needed transparency by simplifying the NCUA’s reporting.
More importantly, it should enable the NCUA to tie the financial results of the NCUSIF to real world events. What do I mean by that? Current practice involves projecting long term “future facts” to justify current expenditures — facts that simply don’t hold up when back-checked. Not even close.
This fresh start for the NCUSIF would also reinforce the NCUA’s primary fiduciary responsibility to credit union members. It is the members, after all, who send one cent of every insured share to fund the NCUSF, and for whose interests NCUA is the steward.
Returning members’ money as quickly and as fully as possible should be the Board’s dominant priority.
Up to $2.4 Billion Of Your Members’ Money Is At Stake. Register here for the live webinar led by Callahan & Associates chairman Chip Filson at 2 p.m. on Tuesday, Aug. 29.
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By Sarah Snell Cooke, Principal, Cooke Consulting Solutions
The NCUA published for public comment revisions to the methodology in calculating the Overhead Transfer rate. For the less wonky among us, the OTR is the calculation used to determine how much state-chartered credit unions pay into the NCUSIF to cover NCUA’s insurance-related expenses for examining them.
The NCUA is attempting to simplify the math and clarify its methodology for this arcane calculation. The OTR controversy is nearly as regular as defending the tax exemption, except this issue divides credit unions. The more the state charters pay into the NCUSIF, the fewer funds federal charters have to fork over. Comments on the OTR methodology must be received by Aug. 29, so make your voice heard!
But for Vic Pantea, manager of marketplace alliances for CU*Answers, it calls into the question the very value of the NCUSIF. He pointed to all the uninsured funds savers have in money market funds (more than $3 trillion dollars as of March 2016, according to the SEC). Pantea also asserted, “Millennials don’t have the same faith in government backing.”
His suggestion is to blow the entire federal deposit insurance system up, and start over with a new vision for private deposit insurance. And, it should be risk based.
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By Shana Richardson, CEO, Ser Technology Corporation
Opportunity abounds for credit unions to expand auto lending to non-prime and subprime members.
Auto default rates hit a 10-year low in June, dipping to 0.82%, according to the S&P Experian Consumer Credit Default Indexes. If your credit union is a subprime lender, S&P Global Ratings showed that in May 2017, loss recoveries and delinquencies worsened month-over-month and year-over-year. Some would argue that those losses are not reflective of the subprime market overall and should be attributed to the composition of the index.
It is true that record volumes of auto loans have supported strong growth in new vehicle sales in recent years. According to Equifax, a record 29 million auto loans and leases were originated in 2016, helping the industry achieve record levels of new and used cars sales.
New data available from credit and data bureaus can assist credit unions to gain a holistic view of their members’ financial lives, from both an underwriting perspective as well as account management.
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