Published by the New Jersey Credit Union League, www.njcul.org

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In this issue:

1. CURIA Re-Introduced as H.R. 1537
2. State Legislation Impacts FCUs Too
3. April is Project Zip Code Month
4. I Didn’t Know Project Zip Code Could Do That!
5. NJ Lobbyist Registration & Reporting, Among Nation’s Strictest
6. NJ Credit Union Advisory Council
7. Credit Union House Supporters
8. Are You Connected?
9. March was another busy month for education at NJCUL
10. Coming soon: The 2007 Awards Program Book!
11. Merger means new efficiencies in shared branching
12. The League's Compliance Department Provides Telephone Support
13. Federal Regulators Seek Public Comment on Model Privacy Notice
14. NCUA Proposes Changes to Records Preservation Program Rules
15. NCUA Hosts Credit Union Development Seminar
16. Save the Date: NJCUL’s 19th Annual Golf Outing
17. 73rd Annual Meeting & Convention - September 23-25, 2007
18. Join the Advertising Cooperative: We Need YOU!
19. Consider Organ Donation During April - National Organ and Tissue Donor Awareness Month
20. CUNA Mutual Corner
    Domicile Change, Merger Would Benefit CUNA Mutual & Credit Unions
21. Jobs, Jobs and More Jobs
    

CURIA Re-Introduced as H.R. 1537
After months of preparation, a new “Credit Union Regulatory Improvements Act” has been introduced in the US House of Representatives by two, long-time credit union supporters, Representatives Paul Kanjorski (D-PA) and Ed Royce (R-CA).

Containing three titles, HR 1537 focuses on modernizing credit union capital and net worth standards, advancing credit unions to promote economic growth (such as through member business loans), and modernizing credit union activities, governance and oversight. The bill is similar to the version of CURIA introduced in the 109th Congress which was ultimately co-sponsored by 126 House members (better than one in every four) including five members of our state’s delegation, Representatives Andrews, Pallone, Payne, Pascrell and Rothman.

The bankers have already been actively opposing CURIA. The American Bankers Association (ABA) ran an advertisement in Hill publications before CURIA was introduced and the Independent Community Bankers of America (ICBA) sent a letter to all House members asking them to oppose CURIA. They have also had bankers in Washington over the past couple of weeks meeting with lawmakers encouraging them to oppose the legislation.

The battle lines have been drawn. As in the past, credit union support for the bill is essential. We need broad support from credit union CEOs across the country. Now that HR 1537 has been introduced and the bankers are already voicing their opposition, we will be reaching out to our members with a call to action to encourage support, if not co-sponsorship, from among New Jersey delegation members.

State Legislation Impacts FCUs Too
While much of a federally chartered credit union’s activities fall under the Federal Credit Union Act (FCU Act), the regulatory purview of NCUA and other federal statutes addressing some aspects of lending, savings, real estate settlement, mortgage disclosure and electronic funds transfer, federally chartered credit unions are also subject to state laws covering these and a host of other areas. With so much focus placed on complying with federal laws and regulations, FCUs sometimes overlook just how much state law and regulation applies to them. A FCU that ignores what’s going on at the state level does so at its own risk. As employers, FCUs are subject to payroll taxation, mandated employee benefits and workplace legislation. As property owners they’re subject to property taxation, building codes, zoning & land use law. And, as financial service providers they’re subject to laws and regulations concerning other facets of lending, deposits, collections and privacy/data security, not to mention ATM security, abandon property, advertising and more. In short, any area not pre-empted by federal statute is generally fair game for the state legislature.

For more information on state issues contact Chris Abeel, the League’s director of government affairs at 800.792.8861, ext 127.

April is Project Zip Code Month
During April a letter and CD is being sent to every credit union in the country asking them to update their Project Zip Code (PZC) numbers. Will your members among the millions of credit union members to stand up and be counted? Help us ensure our state and federal lawmakers understand just how of many of their constituents are credit union members. It takes just a few minutes and no personal data is ever collected.

PZC is a constituent matching program that connects credit union members with their state and federal lawmakers. As a result, we’re able to illustrate to elected officials the number of credit unions members in their district, which is an extremely powerful advocacy tool.

No personal data or individual information leaves your computer. PZC receives only the counts of records successfully matched. All of your data remains confidential and secure and Project Zip Code is compliant to the privacy laws created in Gramm Leach Bliley.

For more information contact Chris Abeel, the League’s director of government affairs.

I Didn’t Know Project Zip Code Could Do That!
The Credit Union National Association (CUNA) and the NJ Credit Union League have teamed up to offer a free program called Project Zip Code (PZC). The software program will help you better serve your members in many ways.

By participating in PZC, credit unions of all shapes and sizes will enjoy another marketing tool to continue their high level of service to members. PZC allows credit unions to match their membership to federal and state districts so the credit union can determine how many members live in specific geographic areas. The credit union can use this valuable information for internal marketing purposes like examining the feasibility of shared branching or determining the best locations for branch expansion and ATM services, based on the geographic concentration of membership.

Not planning any shared branching, ATM expansion, or other marketing initiatives in the near future? No problem, PZC has other uses which are critical to the health and long term strength of the credit union movement. PZC matches your membership file with federal and state district information allowing you to identify which (and how many) of your credit union members live in each respective district. This information is extremely valuable when you’re meeting with Members of Congress or state lawmakers. Many lawmakers do not know how many credit union members live in their district.

Participating regularly in PZC and sharing this information with your elected officials is an important part of being a strong credit union advocate!

Your information is safe and secure with Project Zip Code. No personal data or individual member information leaves your computer. The counts, or number of credit union members matched, are uploaded to a secure section of CUNA’s website. All of your credit union member data remains confidential and secure on the computer where PZC is run. Project Zip Code is compliant to the privacy laws created in Gramm Leach Bliley.

We need your numbers today! If you have any questions please contact Chris Abeel, the League’s director of government affairs at 800.792.8861, ext 127.

NJ Lobbyist Registration & Reporting, Among Nation’s Strictest
Did you know that NJ’s registration and reporting requirements for lobbyists are among the most comprehensive and complicated in the nation? In short, anyone who spends more than 20 hours, or is paid or reimbursed more than $200, a year for attempting to “influence a governmental process” (legislation, regulations or the award of contracts or permits) must register as a lobbyist with the NJ Election Law Enforcement Commission (ELEC) and is subject to periodic reporting.

Credit union directors, employees or members who have regular dealings with NJ lawmakers or state officials should consult the ELEC website (www.elec.state.nj.us) for registration and reporting requirements.

NJ Credit Union Advisory Council appointees are not required to register. Council members are not exempt per se, just those activities in connection with their council-related duties.

For more information about this or other government affairs issues contact Chris Abeel, the League’s director of government affairs at 800.792.8861, ext 127.

NJ Credit Union Advisory Council
The NJ Credit Union Advisory Council was established through legislation enacted in 1984 as a vehicle through which state chartered credit unions can advise the Executive and Legislative branches of state government on credit union-related matters. Members are appointed by the governor with the “advice and consent” of (must be confirmed by) the state Senate. Terms are five years and members serve without compensation. The Council meets bi-monthly and expenses are borne by the credit unions.

NJ Credit Union Advisory Council appointees are not required to register. Council members are not exempt per se, just those activities in connection with their council-related duties.

It membership includes Shirley Spruill (Renaissance Community Development CU) who serves as chair, Andy Jaeger (Credit Union of New Jersey), Bonnie Karczewski (NJ Law & Public Safety CU) and JoAnne Lazzara (First Jersey CU) all of whom are to be saluted for contributing their valuable time to serve the credit union movement.

In recognition that federally chartered credit unions, though primarily regulated by the federal government are also subject to numerous state laws and regulations, legislation is being drafted to expand the Council membership to included representation of federal credit unions as well.

Credit Union House Supporters
Credit Union House is the credit union movement’s “embassy” on Capitol Hill. It serves as a home away from home for credit union officials visiting Washington, a command post for legislative activities and a gracious place to entertain dignitaries. More than one-half the members of both houses of Congress have visited for a variety of special events and functions. It symbolizes the credit union movement’s commitment to an ongoing role in the public policy process and the highly visible, permanent presence sends the message that credit unions, and the credit union movement, are here to stay.

Special thanks go to the following for their financial support of Credit Union House.

Are You Connected?
The League’s bi-monthly government affairs newsletter Capitol Connections keeps readers plugged-in to the public policy arena. It includes briefings on important goings-on in Washington (On-the-Hill) and Trenton (Under-the-Dome) and has sections on credit union movement grassroots activities (In-the-Trenches) and key issues (On-the-Soapbox) as well as backgrounders on who’s who (Meet-the-Players), interesting facts (Trivia-not-Trivial) and important calendar items (Save-the-Date).

If you’re not already plugged-in, contact Chris Abeel, the League’s director of government affairs to be added to the Capitol Connections electronic distribution list.

March was another busy month for education at NJCUL.
The Advanced Lending Strategies class was held on March 6 with 7 participants and received very high ratings! Eleven people attended the Managing the Performance Appraisal class on March 8 and most found the interactive style of the workshop both motivating and engaging. Margie Walker-Horsch from Fed Comp delivered much appreciated training to new and existing Fed Comp users on March 10, 2007.

The first mini-session: Decedent Account Training had its debut at the League on March 21 with Stephen Edwards and his captive audience of 23! On March 28, Stephen presented to 24 credit union participants at Proponent FCU. Thanks to Proponent for hosting!

The first HR Roundtable sessions were held on March 27 at the League and March 29 at Novartis FCU. Thanks to Novartis for hosting! Also, the League is pleased to congratulate Charles Sette at Novartis FCU for successfully fulfilling all the requirements for Level 1 of RegTraC, CUNA’s Regulatory Training and Certificate Program.

What to look forward to for the remainder of April.

Our second mini-session, Reading Credit Reports will be offered in the following locations:

• April 24, 2007 at the NJ Credit Union League in Hightstown, NJ
• April 25, 2007 at Novartis Federal Credit Union in East Hanover, NJ
• April 26, 2007 at Bay Atlantic Federal Credit Union in Vineland, NJ

Nancy Miller who is currently working with the Essex Division Telephone FCU is the first person this year to try a Quick Bite! Nancy was the 122nd person to dial in to the session. Nancy said, “The session was generalized as it was not NJ specific which was fine. The session went a little longer than scheduled as the speaker took the time to answer questions at the end. It was informative enough to be worthwhile.” Nancy found the session to be a good refresher for herself and helpful with training others.

Have you thought about trying a Quick Bite? Look at the following topics:

• Making the Most of your Communication Skills: May 3, 2007
• Internet Security: May 9, 2007
• BSA: May 23, 2007

Registering for a Quick Bite is easy! Just visit our web site and complete a General Registration Form. Be sure to include your e-mail address as the instructions, dial up access codes and handout material will be sent electronically.

May Educational Offerings:

• CU Ratios and Financial Statements is being held on May 8, 2007. This session is good for CEOs, CFOs and Volunteers who need to evaluate the security and strength of their credit unions.
• Advanced Lending Strategies II will be held on May 16, 2007.
• The Small Credit Union Roundtable will be held on May 19, 2007

The above sessions will be held at NJCUL in Hightstown, NJ.

• The Compliance Roundtable will be holding sessions on May 23rd at North Jersey FCU in Totowa, NJ and on May 24th in Hightstown, NJ.

If you have any questions, please call Barbara Agin, Director of Education and Training at 609-448-2426 x111.

Coming soon: The 2007 Awards Program Book!
The NJCUL Awards Committee can’t wait to see what New Jersey’s credit unions have been doing for your members, your communities and the credit union movement, and recognize you for your hard work - but just like the lottery, you have to be in it to win it. So start getting your entries ready and watch for this year’s Awards Book.

We are excited to bring you a new award category in 2007, The Website Award. Details will be in the book. Since the 73rd Annual Meeting & Convention will be held in September, deadlines have changed; so take note of the new dates so that you don’t miss important deadlines. Any questions about awards? Call Sandy Langere, 609.448.2426 x115 or email slangere@njcul.org.

Merger means new efficiencies in shared branching

Important Shared Branching News: CUSC Stockholders Approve Combination with CO-OP Financial Services

Credit Union Service Corporation (CUSC) stockholders voted today to approve the business combination between CUSC and CO-OP Financial Services (CO-OP FS). For credit unions, the new efficiencies created by the combination mean less confusion in the marketplace, an increase in productivity for both entities, new branding campaigns that will result in further shared branching penetration in the marketplace and product innovations that will create a one-stop-shop for credit unions.

The new organization will represent 80 percent of all participating credit unions, 40 states, 87 (100 percent) stand alones and 75 percent of shared branching transactions.

“This combination means great things for credit unions participating in shared branching,” says Carroll Beach, president/CEO of CUSC. “By synergizing operations with such a progressive and leading organization, we will create efficiencies that will attract more credit unions to shared branching, resulting in the ultimate member service experience.”

CUSC’s credit union designed switching technology, the Next Generation Network, which has become the most widely used switch for shared branching transactions due to its fraud resistant features, enhanced functionality, flexibility in the credit union environment and lower costs, will continue as the switch of choice for the network. The swirl will remain the national logo and members will not notice any changes in their ability to utilize shared branching locations to conduct financial transactions at any of the 2,500 nationwide branches.

Credit Union Service Corporation is the credit union movement's largest shared branching network representing 55 percent of all national locations and 68 percent of credit unions participating in shared branching. CUSC is the only shared branching network representing credit unions, leagues, CUSOs, CUNA and CUNA Mutual. The CUSC network has been in place since 1987, and is designed to offer credit union members convenient access to their credit union accounts through multiple locations and extended hours. Through groundbreaking technology, CUSC’s Next Generation Network offers credit unions lower cost, enhanced transaction functionality, and greater information capacity, making it possible for more credit unions to offer shared branching to their members.

Would you like more information about Shared Branching? Contact Chris Zahne at 609.448.2426 x104 or email: czahne@njcul.org.

The League's Compliance Department Provides Telephone Support
Ever have a compliance or regulatory issue that you can't find the answer to? How about a debate in the office about what a regulation requires? Well if you do, the League's compliance department is here to help. Every month the League's compliance staff receives numerous calls from credit unions with compliance questions on lending, deposit regulations, collections, operations, policies, bank secrecy act, and other areas that affect your credit union. While the League cannot provide you with legal advice, it can answer regulatory questions as well as point you to or provide you with additional valuable resources. This is another benefit included with membership in the New Jersey Credit Union League. Take advantage of this benefit by calling your League when you need assistance at 800.792.8861.

Federal Regulators Seek Public Comment on Model Privacy Notice
On March 21, 2007, the NCUA and other federal regulators released a notice of proposed rulemaking (NPR) requesting comment on a model privacy form that financial institutions can use for their privacy notices to consumers required by the Gramm-Leach-Bliley Act (GLB Act). The privacy notices must describe an institution's information sharing practices, and, for certain types of sharing, consumers have the right to opt out. The notices must be provided when a consumer first becomes a customer of a financial institution and then annually for as long as the customer relationship lasts.

The proposed model privacy form is the "prototype privacy notice" developed after a year-long consumer testing process. The NPR proposes that a financial institution that chooses to use the model form would satisfy the disclosure requirements for the notices and so could take advantage of a legal "safe harbor." The NPR also proposes to remove, after a transition period, the sample clauses now included in some of the agencies' privacy rules.

Written comments will be accepted for 60 days after publication of the final rule. The proposed rule can be found on the NCUA Web site at, http://www.ncua.gov/news/press_releases/2007/JR07-0321.pdf

NCUA Proposes Changes to Records Preservation Program Rules
The National Credit Union Administration proposes to amend part 749 to address a federally-insured credit union’s obligation to maintain a records preservation program. The proposed changes specifically address the Board’s concerns regarding restoration of vital member records and services. The proposed changes establish minimum standards for preserving vital records and include recommendations concerning restoring member services considered vital to a credit union’s continued operation. The Board proposes to revise the definition of catastrophic act to clarify that any event causing an interruption in vital member services for more than two business days is a qualifying event. The proposed rule also includes recommendations on restoring vital member services for a credit union. Specifically, §749.0 suggests a credit union should complement its plans for safeguarding and reconstructing vital records by establishing a method for restoring vital member services in the event of a catastrophic act. Similarly, §749.2 recommends that procedures for maintaining duplicate vital records should include a method for using these records to restore vital member services.

The proposed rule can be viewed on the NCUA Web site at, http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/P-748.pdf

NCUA Hosts Credit Union Development Seminar
Philadelphia is the place for this year’s NCUA Annual Credit Union Development Seminar. Mark your calendar for April 28, 2007 and click here for information and registration forms.
http://www.ncua.gov/CreditUnionDevelopment/Events/Index.htm

Save the Date: NJCUL’s 19th Annual Golf Outing
Mark your calendar and get ready to tee off! The 19th Annual NJCUL Golf Outing is scheduled for Tuesday, June 12, 2007 at the Cranbury Golf Club in Cranbury, NJ. For more information click here, but if you’d like to be a sponsor at this popular outing, contact Yvette Segarra at ysegarra@njcul.org or call 609.448.2426 x103.

73rd Annual Meeting & Convention - September 23-25, 2007
New place. New Dates. Great New Opportunities. This year’s Annual Meeting & Convention is poised to be our best yet. Some of the great reasons to mark your calendar: We’ve moved to the Tropicana! That means there will be no more trouble getting rooms! That’s right. Our entire group will be housed under one roof and what a roof it is! With great shops and restaurants, you’ll never have to venture outside, but if you want to, the beautiful September air will be there to greet you. Stay tuned and watch your mailboxes for information on this exciting event! If you’d like to exhibit or know someone who might, please contact Yvette Segarra at 609.448.2426 x103.

Join the Advertising Cooperative: We Need YOU!
The NJCUL Advertising Cooperative is hard at work planning our next round of advertising and advocacy efforts. If you haven’t paid your voluntary dues yet, please hurry. The sooner we have the funds set aside, the sooner we can move on our next round of exciting activities. Need more info? Visit: http://www.njcul.org/members/index.asp or call Sharon Dilling at 609.448.2426 x110.

Consider Organ Donation During April - National Organ and Tissue Donor Awareness Month
Realizing the urgent need for organ and tissue donors around the country, National Organ and Tissue Donor Awareness Week (NOTAW) was established by Congress in 1985 to promote a greater understanding about the life-saving benefits of organ donation. A single organ donor can save eight lives and enhance the lives of up to 75 others. For more information on how to become an organ donor or to join the NJ Donor Registry, call NJ Sharing Network at 1-800-SHARE-NJ or visit their web site at www.sharenj.org.

CUNA Mutual Corner
Domicile Change, Merger Would Benefit CUNA Mutual & Credit Unions
CUNA Mutual Group is comprised of multiple companies, including insurance and non-insurance companies, diverse product lines that serve credit unions and their members, domestic and international operations, and a number of strategic partnerships we are engaged in with credit unions, corporate credit unions, and credit union service organizations (CUSOs).
CUNA Mutual Group’s three principal insurance companies are CUNA Mutual Insurance Society (CMIS), its wholly owned subsidiary CUMIS, of Madison, WI, and the CUNA Mutual Life Insurance Company (CMLIC) located in Waverly, Iowa.

CMIS and CMLIC have operated on an affiliated basis since 1990 when the two companies signed an Affiliation Agreement. Over time, the Affiliation Agreement has helped the companies expand market share and gain efficiencies through shared operations. Today, the two companies have identical Boards of Directors and senior management and our operations and financial results are largely pooled.

Though we operate these two companies as one in many ways, they remain separate, each with its own assets, surplus, and financial reporting requirements. In addition, both companies are independently rated by our rating agencies Fitch and A.M. Best.

Since the companies entered into the Affiliation Agreement in 1990, the Board has considered merging CMLIC and CMIS. Many of the benefits of a merger have already been achieved through the affiliation. A merger, though, delivers additional benefits to policyholders in the form of improved corporate governance, reduced expenses, a one-time tax benefit, and a more effective organization to leverage our assets and surplus.

Until recently, the merger was not pursued because of a significant, adverse tax provision that imposed a tax on the surplus of mutual life insurance companies. This onerous tax provision was recently repealed, effectively removing this merger barrier. The merger permits the recognition of a one-time financial statement tax benefit of $15-20 million. There are no longer any good business reasons to delay the merger or forestall the delivery of the associated benefits to the policyholders.

CUNA Mutual’s Board of Directors is asking policyholders to approve a merger of CMIS and CMLIC.

The first step in the merger process is establishing a single state of domicile for the two insurance companies. The Board of Directors is asking policyholders to change the state of domicile of CMIS from Wisconsin to Iowa.

Domiciling in a single state – Iowa – will facilitate the merger process. By having one insurance regulator, we gain efficiencies and flexibility while reducing unnecessary financial reporting and associated costs. In choosing Iowa, we selected the state where insurance laws are more modern and flexible.

Iowa and Wisconsin officials have approved CUNA Mutual’s request to domicile in Iowa.

As a merged entity, credit unions will continue to have a significant influence on the future of CUNA Mutual. It was through credit union input that we started our three-year transformation – a transformation designed to improve the value we deliver to credit unions and their members.

As we grow and strengthen CUNA Mutual, we will do so with credit unions and their members remaining at the core of our strategy – delivering products and services to protect you, to help you attract and retain quality employees, and expand your offerings to credit union members.

If the merger of CMIS and CMLIC is approved, the merged entity would continue to be a mutual insurance company. We believe the mutual structure is beneficial to our policyholders and have no plans to demutualize.
Being owned by our policyholders contributes to a competitive advantage for us in the credit union marketplace. We are member owned, just like you, and believe staying that way is in everyone’s best interests.

A primary driver for changing our ownership structure in the future would first and foremost be because you would ask us to. The only other reason would be a need for capital to significantly grow the company or to acquire new business. However, CUNA Mutual’s current capitalization is strong. This merger would further improve our financial strength as the surplus of two separate entities would be combined into one.

Written by Jeff Post, President and CEO of CUNA Mutual Group. For more information on CUNA Mutual Group visit their Web site: www.cunamutual.com

Jobs, Jobs and More Jobs
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