Changes to the HMDA Act: What Do You Need to Know?
By: Nicola L. Foggie, CUCE, BSACS, NJCUL Vice President, Compliance & Regulatory Affairs

The Home Mortgage Disclosure Act (HMDA) has undergone several changes, since it was first enacted in 1975. The most recent changes, which went into effect on October 15, 2015, are just the beginning of reporting modifications set to roll out in the coming years.

What are the changes and what does your financial institution need to do to prepare?

Compliance & Regulatory
Would You Want to Live in a Risk-Free Society?
By: David Frankil, NJCUL President/CEO

Think about it – there is literally no human activity that occurs without some degree of risk.  Walking on the street, riding a bike, driving a car, flying in an airplane, even getting a meal in a restaurant all pose some degree of risk. 

The question we face as individuals is the same we face as leaders of financial institutions – how much risk are we willing to accept, and how do we manage it.  But to re-state the obvious, without risk, there is no return....

Compliance & Regulatory
What Do Mobile Payment Apps and Fax Machines Have in Common?
By: David Frankil, NJCUL President/CEO

A recent CU Times article reported on a survey of U.S. millennials that showed they are using third-party solutions like Venmo for mobile payments, instead of a mobile app provided by any individual financial institution. The study of 2,170 U.S. millennials, done by education loan company LendEDU, found that 44% of people born between 1981 and 1997 say PayPal-run Venmo is the mobile payment app they use most often. 

I’d describe this as demonstrating that mobile payment apps are evolving into a classic network effect business model. 

VantageScore: Updates in Calculation Methods

Earlier this month, it was announced the VantageScore will be rolling out a new formula.  The new calculation will be based on borrowing behavior over time instead of a snapshot of credit usage at time of credit pull.  Your credit union might be using FICO today, but with this information be widely circulated, which way will the consumer go in attempting to improve their credit score?  If they listen to the guidance for the new rules of VantageScore, they could adversely affect their FICO.

What does VantageScore for the member?

Risk vs. Member Value

Taking risks sometimes might be worth the reward of creating value for your members.  Do you believe that risk in your organization manages risk too operationally to adhere to compliance issues rather than the long-term strategic risks?  Enterprise Risk Management (ERM) is not a ONE time event and not a ONE SIZE FITS ALL approach.   But, where is the balance between taking risks and creating member value?  ERM is applicable to ALL areas of the organization, including Human Resources - 5 Reasons HR departments need ERM.

Unclaimed Property Roundtable Informs Many
By: Barbara Agin, NJCUL Vice President, Member Experience & Education

Live from Hightstown and delivered virtually to FOUR locations, attorney Peter J. Liska, informed attendees on both the legislation and many provisions of the New Jersey Uniform Unclaimed Property Act.  Liska reviewed the 10 page operations guide providing examples and fielding questions.  

Pictures in addition the attendees at the League (minus {me} photographer ) include our virtual attendees from Atlantic FCU, Members 1st of NJ FCU, Campbell Employees FCU and Rutgers FCU.

Learn more about our virtual capabilities and check out our upcoming Regulatory Update Webinar.  Looking for the full calendar?  Click here.

League Initiatives
NJCUL Upgrades: Educational Content that Comes To You!
By: Barbara Agin, NJCUL Vice President, Member Experience & Education

When you look at New Jersey on the map, you would think travel would not be an issue for such a small state. Not so! While Hightstown makes sense as a central location, it isn’t necessarily convenient or conducive for our members given the travel time and/or overall time out of the office.

The League first introduced a video conferencing solution in 2010 with the assistance of two credit unions: Atlantic FCU in Kenilworth and Members 1st of NJ FCU in Vineland. This helped some but still left many unreachable.

Mission Accomplished: ROI with Free Rutgers Training for NJCUL Members
By: David Frankil, NJCUL President/CEO

I heard two things consistently from CEOs in my initial round of visits and phone calls back in July.

One was that the League needed to demonstrate a more quantifiable ROI on their dues investment.

The second was the need for cost-effective and local professional development programs. Not that CUNA, CUES, and others don’t offer solid options, but the fees, travel expenses, and total time out of office make it difficult for many of our members to take advantage of them.

I’m proud to say we’ve killed two birds with one stone.

League Initiatives
Media, Myself, and I
By: Marissa Anema, NJCUL Vice President, Marketing and Communications

Think back to the early hours of the day when you were just waking up. What is the first thing you see? The first thing you come into contact with?

Your significant other? Your pet? Your kids? Your alarm clock? Your phone? Alexa, Echo, or Siri?

It may be eye-opening to assess your morning routine and how those things listed above rank in order of engagement as you crack open your eyes to new day. (If you’re wondering who Alexa, Echo, or Siri is, then we need to talk.)

For me, it’s either my cat, Nola, acting as an unwelcome alarm clock, or—more often than not— it’s my phone, which is my alarm clock. It’s also my Weather Channel, my pocket schedule, my stereo (remember those?!), my rolodex (remember those, too?!), and much more.

The point is that our phones have become a HUGE part of our daily lives, and, thus, media consumption has as well. From social media to the news media, with our eyes glued to computer screens at our desks and in our hands (let’s face it, these are not “phones” they are “computers”) we’re consuming hours upon hours of media a day.

Consumer Awareness & Advocacy
Black Swans and The Credit Union Ethos
By: David Frankil, NJCUL President/CEO

The latest installment of our Banking You Can Trust Legacy Series – which demonstrates the credit union difference by telling the powerful origin stories of our credit unions – is about Central Jersey Police & Fire FCU.

Consumer Awareness & Advocacy
Leading the Way: NJCUL Named One of Five National Providers of ComplySight Compliance Consulting Services
By: David Frankil, NJCUL President/CEO

Many of you are familiar with ComplySight, the all-in-one Web-based compliance tool offered by NJCUL in partnership with League InfoSight and CUSolutions Group (NJCUL serves on the League InfoSight Board). It provides everything from content, tracking, reports, regulatory alerts, and more— basically everything you need to organize a comprehensive compliance program.

League Initiatives
Q&A: Branch Transformation Doesn’t Always Mean Construction

Sundeep Kapur, an expert in digital, branch, and engagement strategies, will be presenting a one-day NJCUL Workshop on Branch Transformation, on Tuesday, February 7. The session is designed for anyone that has ever wondered how they can make their investment in a branch, its people, and all the associated technologies more productive for the credit union, and more valuable to members as well.

League Initiatives
One Step Closer to Bringing Electronic Lien and Titling to New Jersey
By: Chris Abeel, NJCUL Vice President, Corporate and Governmental Affairs

Almost everything we do today—from paying for a cup of coffee to hailing a “cab” to booking a flight or hotel—has gone digital. These processes are quick and simple. No paperwork, no paper receipts—or statements even.

Political & Legislative
Court Dismisses Bankers’ Frivolous MBL Lawsuit
By: Nicola Foggie, NJCUL Vice President, Compliance and Regulatory Affairs

Yesterday, the NCUA and credit unions won a huge victory! U.S. District Court Judge James Cacheris dismissed a lawsuit brought by the Independent Community Bankers of America (ICBA) against the National Credit Union Administration (NCUA), this past September. The Banker’s suit against the agency challenged NCUA’s 2016 member business lending rule (MBL). The American Bankers Association supported the ICBA litigation that challenged the MBL rule and amendments that changed the statutory MBL cap, including making it easier to exclude nonmember loans from the cap calculation. According to the court’s opinion, the lawsuit was dismissed based on ICBA’s lack of standing and timeliness. In his opinion, Judge Cacheris stated that even if the ICBA had established standing and timeliness, the court said it still would have found that the rules satisfied the requirements established by the Administrative Procedures Act and existing case law.

Compliance & Regulatory
Building Brand Awareness The Leaders Series
By: David Frankil, NJCUL President/CEO

You may have seen an article in the Daily Exchange yesterday about XCEL CEO Linda McFadden’s upcoming live appearance on 101.5 FM, January 31st at 8:00 AM, as part of our new Leaders Series. I wanted to provide more background on how this fits with our other brand awareness initiatives, unveiled formally at the NJCUL Annual Convention last year.

If you recall, revamping our brand awareness campaign is a priority 2017 strategic initiative for the League. We started with the Legacy Series, which uses the power of story-telling and unique credit union origin stories to show how credit unions are different from banks. It has been very successful, with pick-up by local media outlets and broad exposure via social media.

The Leaders Series shares the same objective of highlighting the credit union difference, but with a twist. It is focused on showing how our leadership—CEOs of credit unions—truly cares about the financial well-being of their members by offering financial advice to consumers. This accentuates the contrast with how bank CEOs see their customers, as a source of profit.

Consumer Awareness & Advocacy
Q&A: The Three Most Common Mistakes Credit Unions Make in Branch Design

Sundeep Kapur, digital and consumer engagement strategist, will be presenting a one-day NJCUL Workshop on Branch Transformation, on Tuesday, February 7. The session is designed for anyone that has ever wondered how they can make their investment in a branch, its people, and all the associated technologies more productive for the credit union, and more valuable to members as well.

League Initiatives
Q&A: The Secret to Doubling Products Per Member

Sundeep Kapur, digital and consumer engagement strategist, will be presenting a one-day NJCUL Workshop on Branch Transformation, on Tuesday, February 7. The session is designed for anyone that has ever wondered how they can make their investment in a branch, its people, and all the associated technologies more productive for the credit union, and more valuable to members as well. 

This is the first of a two-part interview with Sundeep, where he discusses with NJCUL President/CEO David Frankil the potential gains from thinking about your branch in a different way.

League Initiatives
Branch Transformation George Jetson, Meet Joseph Schumpeter
By: David Frankil, NJCUL President/CEO

As a kid, the Jetsons were my favorite cartoon. There was just something about how easily futuristic technologies were magically integrated into daily life without any issues in Orbit City. George Jetson even walked their dog Astro on a treadmill without the inconvenient detail of dealing with what always occurs when you walk your dog. That clearly only works in cartoons.

Financial services has also become a mix of the traditional and the cutting edge, as disruptive, game-changing innovations are developed and make their way into our business. Except we don’t have that luxury of glossing over all the challenges of integration. 

League Initiatives
Santa’s Workshops May Be Closed, But Ours are Now Open for Business
By: David Frankil, NJCUL President/CEO

When I ask CEOs what they want from the League, the most frequent response has been “more”—more content, more training, more relevance, more value. Which is exactly where we want to take the League, re-positioning it as a true strategic partner, helping members grow and be more productive.

As part of this process, we’ve created a new series of one-day workshops focused on critical credit union operational issues. The name “workshop” was chosen deliberately—these are not symposia, or discussion groups, or academic seminars. They are workshops—come spend a day, roll up your sleeves, and dig into the nitty-gritty of a topic and walk away with valuable, actionable information.

League Initiatives
Why You Want a Low-Income Designation from NCUA (And How to Get It)
By: David Frankil, NJCUL President/CEO

The conclusion of nearly every article about the benefits of credit union membership is that you can join a credit union, and you should do it as soon as possible.

I’m telling you the same thing about the low-income designation (LID) from NCUA—if you meet the criteria, you should work through the process as soon as you can. A federal credit union qualifies for LID when a majority of its membership (50% + one member) qualifies as low-income. It’s as simple as that. 

League Initiatives
Loan Pricing Ought to be More Scientific Than Just Checking Out the Competition
By: David Frankil, NJCUL President/CEO

Setting the right price for a product or service is a challenge for any business. Set prices too low, and you negatively impact margins and starve the business of capital – in the extreme, fixed and variable costs might not be covered. Set prices too high, and sales suffer and the business itself might be threatened.

Discuss prices with your competitors, and you might become a long-term guest at a Federal institution not of your own choosing.

Understanding price elasticity of demand – the relationship between price and quantity – is a challenge that many large companies spend millions of dollars trying to understand.

For credit unions, there is an added component that comes with the financial services territory – risk. The risk that a member might default on a loan plays (or should play) a role in determining the interest rate that borrower should pay, which is just as important as understanding the true cost of capital in making pricing decisions.

League Initiatives
Incoming NJCUL Chairman Andy Jaeger: A Fresh Outlook and Direction for 2017
By: Andy Jaeger, NJCUL Chairman and CUNJ President/CEO

It is no surprise that the last few years have been challenging for the League, between the turnover at the top to the impact of an ever-so-slowly improving economy and persistent low-rate environment on New Jersey credit unions. 

League Initiatives
New Member Benefit - An Early Holiday Gift for NJCUL Member Small Credit Unions
By: David Frankil, NJCUL President/CEO

Smaller credit unions face many challenges in marketing their products and services effectively, but the most basic is developing professional collateral material to promote solutions…without spending a fortune. A crisp, clean look and feel is critical to communicating the value of our solutions, and that doesn’t come with bargain-basement design efforts.

To help jump-start the process for small credit unions without the hefty price tag, Bo McDonald, CEO of Your Marketing Company (one of our partners), has stepped up to provide high-quality, professional promotional pieces that small NJCUL member credit unions can use completely free of charge—or with a modest fee for customization. The first in the series is an eye-catching promotion of holiday loans (see graphic below).

League Initiatives
82nd Annual Convention and Meeting Recap: Successful and Inspiring
By: David Frankil, NJCUL President/CEO

Our Annual Meeting and Convention took place this week in Atlantic City, and it was very successful, due to the outstanding efforts of the entire team here at NJCUL, specifically including Yvette Segarra – who I am never going to let retire; she just adds too much value. Please give her and the rest of the team a virtual round of applause. 

This year was a bit different than prior years, in part because of my presentation on Monday morning. It dispensed with the usual formalities and got right down to business.

The focus was the first 100 days, and the over 100 conversations I’ve had with member and non-member CEOs, Board members, senior executives, our team, and vendors as well. The goal: to assess whether our internal perception of value matched up with what our target audience (you) needed.

Strategic Use of Children’s Accounts to Reach Millennials
By: David Frankil, NJCUL President/CEO

Last week we published a Legacy Series blog post on United Poles FCU highlighting how they were founded by thirteen members of the local Polish community to help recent immigrants and residents overcome language and other barriers impeding access to basic financial services. That fits perfectly with the goal of the Legacy Series, communicating how credit unions are different than banks by telling origin stories.

The idea for the blog post came from a meeting with Iwona Karpeta, their CEO, who told us how United Poles FCU was founded.  But it wasn’t the only interesting idea to come from the meeting.

Iwona talked about how important children’s accounts were to their overall growth and engagement strategies.  Children’s accounts are not exactly a new concept in banking, but what struck me was the way Iwona talked about leveraging them to reach Millennials as an overt part of their engagement and growth strategy.

Saving is a strong part of the Polish cultural heritage, and United Poles FCU leverages that to reach younger generations. It is typical to see accounts established when a child is born and children being encouraged to save from their earliest days.  Families bring kids into the credit union where they get to know the tellers and other executives, make deposits – and get lollipops and other treats, too.  By the time they grow up, they are a part of the family, and the credit union is their natural choice of financial institution.

Consumer Awareness & Advocacy
Focusing on Young Professionals and Millennials
By: David Frankil, NJCUL President/CEO

I’m guessing that every generation has had some sort of conversation about the younger generation that goes a little something like this: We don’t understand them or their behaviors, what motivates them, how to manage them, or how to market to them.

You know, all those old sayings like… 

Kids, you can talk and talk till your face is blue
Kids, but they still just do what they want to do
Why can’t they be like we were, perfect in every way
What’s the matter with kids today?

The song is at the end of the clip:
(for those of you that are classic movie buffs). 

Whether the digital revolution has made the challenge of comprehending millennials more difficult than other eras is a topic for others to tackle, but we do need to address two key questions –

  1. How do we attract young professionals to credit unions as future leaders, and what is the best way to both develop their skills and motivate them?
  2. How do we need to adapt our marketing and other strategies to focus on the millennial segment of our members and prospective members?
League Initiatives
Value and Relevance: Walking the Walk
By: David Frankil, NJCUL President/CEO

I’ve written about how we are transforming the League for 2017 to be more valuable and relevant. But what does that really mean?

This week we made the first in what will be a series of announcements that offer up examples of steps the League is taking towards this transformation.

Peer group benchmarking is a great management tool to highlight opportunities, whether for productivity improvements, greater leverage, and/or for growth. You all have the ability to access your own Call Report data – what is harder is to see how you compare with your peer groups on key performance parameters for growth and productivity.  

With enough time and enough resources you could do the analysis yourself – after all, Call Report data is available on the NCUA website. But who has the time to identify who should be in your peer group, download their Call Report data, crunch the numbers, and analyze the results?

To me, this is exactly what a League focused on value and relevance should be doing for its members. 

League Initiatives
Did You Know that NJCUL was Founded in 77 BC?
By: David Frankil, NJCUL President/CEO

That would be “Before CFPB.”

And odds are that your credit union was also born in the BC era.

Few new financial services regulatory agencies have had the fast start and wide-ranging impact of the Consumer Financial Protection Bureau (CFPB). For anyone charged with tracking and complying with their rules, the last five years probably seem like dog years.

This all came to mind this week with the Wells Fargo debacle, and the role that the CFPB played in bringing those practices to light and to an end. The CFPB vision and values statements provide the foundation upon which they acted – but what is most interesting is how consistent they are with what you’d see at a credit union:

Compliance & Regulatory
Marketing MRI: Finding and Bridging Value Gaps
By: David Frankil, NJCUL President/CEO

I recently sent a note to the entire membership with a preview of some of our 2017 initiatives, noting that they were developed from conversations with over 60 CEOs, and were part of our philosophy of market-led growth.

The process is actually more strategic than just having a good chat with a CEO. The question we’re answering is how to ensure that the value you’re providing actually matches up with what the market needs.

Let me use a case study with a gaping value gap from a consulting engagement I finished just before joining NJCUL to illustrate the approach we’ve taken with the League.

The client was a midsize general contractor (~$10M in revenue) offering integrated architectural design and construction services, focused primarily on office buildings, warehouses, and distribution centers. They wanted to know why they weren’t growing faster, especially when they saw new competitors winning jobs they thought should be theirs.

They thought the problem was a bad salesperson – but the engagement quickly evolved into a more extensive assessment of their fundamental value drivers.

We used an active listening process I call a “Marketing MRI,” and it has two components – internal and external. The first step is to interview employees at all levels of the company to understand their perception of key value drivers and what they see as the issues impeding growth.

League Initiatives