Author: Denise Wymore

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eDOC’s free eDOCSignature welcomed!

Anticipating that the COVID-19 social distancing mandate could make it difficult to have documents signed in person, eDOC Innovations announced a free use offer of its e-sign solution, eDOCSignature®, on March 18, 2020. In the two weeks since the announcement was made, 51 credit unions have implemented the solution and many more are in various stages of the implementation process. The offer provides free use of eDOCSignature until September 30, 2020, allowing for the completion of transactions that would otherwise be held up as many credit union lobbies remain closed for normal activity.

“This initiative was driven by our concern for clients and the struggles they are experiencing after the public response to COVID-19,” explained Mark Fierro, CEO of eDOC Innovations. “Foot traffic at some businesses has dramatically reduced—if not halted—as people continue to take precautions and avoid unnecessary travel and personal contact. The credit union industry has not been spared from these challenges, and we wanted to help. As a partner in the industry, we are steadfast in our commitment to help credit unions facilitate transactions in a quick, efficient, and secure manner. Enabling credit unions to have documents e-signed from any remote location where their members can access email is just one way we can help the industry move along until things eventually normalize.”

eDOCSignature® provides state-of-the-art automation that empowers credit unions and drives value back to members by meeting those members wherever they are.

About eDOC Innovations, Inc.

eDOC Innovations is the nationwide leader in mobile enterprise digital transaction management and e-commerce software for credit unions. For more than 25 years, eDOC Innovations has been designing solutions to reduce overhead, increase operational efficiency, and provide convenience to members. eDOC Innovations’ products include solutions for remote mobile and in-branch closings, mobile e-signature processing, digital asset lifecycle management, intelligent and interactive form automation, mobile remote deposit capture, electronic statements, and more. To learn about our technology, visit www.edoclogic.com/products/doclogic/ or give us a call at 800.425.7766 option 3.

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CO-OP Financial Services: COVID-19 Trends That Allow CUs to Outshine Banks

CO-OP Financial Services has posted a think piece on the need for credit unions to continue to be the compassionate banking alternative: delivering the financial support that consumers and small businesses need now and in the face of an uncertain future. There are three upcoming trends that CO-OP Financial Services (www.co-opfs.org) recommends credit unions prepare for, ensuring members have continued access to the financial tools and products they need, while outshining Big Banks.

Trend One: Migration from Debit to Credit. While cash and debit cards are the two most preferred payment methods among U.S. consumers, we may see a significant shift to credit over the coming weeks. Among best practices: Credit unions should proactively reach out to their credit cardholders with special offers.

Trend Two: Forward-Facing Risk Mitigation. Credit unions must be prepared for increased risk of payments delinquency and fraud, balancing the risk of mitigating fraud while avoiding a spike in unnecessary declines and ensuring cardholders have access to their funds. Among best practices: Closely monitor fraud at the transaction level while levering tools to help minimize payment fraud losses.

Trend Three: Digital Payment Adoption. Digital payment adoption will likely grow exponentially over the coming months. Among best practices: Credit unions should use this opportunity to bolster their digital payment options.

CO-OP’s piece concludes: “While COVID-19’s long-term economic impact remains unknown, a credit union’s payments portfolio is a powerful means of maintaining regular interaction with and support for its members. As Big Banks continue to put profits before people, credit unions have an opportunity to demonstrate their strengths. Modifying their payments strategy to deliver continuity and financial relief will help credit unions maximize the benefit to their members and in turn, increase loyalty.”

The full think piece can be read here.

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CU*Answers offering free “We Are Open” marketing campaign and discount on all marketing products

West Michigan-based cooperative CUSO CU*Answers recently announced that it had created and is now offering a free “We Are Open” marketing campaign to all credit unions nationwide. The marketing campaign is designed for credit unions still operating their branch drive-thrus, letting members know that despite the current national emergency their credit union is still there to serve them.

“It’s important that members know that our industry is there for them, regardless of what might be happening in the country,” said CU*Answer Marketing Manager Peter Meyers. “And we’re already seeing this be true in a variety of ways: loan forbearance, waived fees, zero interest loans, open drive-thrus—all of these are ways we’re serving our communities. We hope this campaign will help any credit union provide some reassurance to their members in these trying times.”

Meyers also announced that all other products on its Marketing Store are available at a 15% discount. The “We Are Open” campaign is free to all national credit unions, regardless of whether they are on CU*Answers’ core processing platform, CU*BASE®. It includes a printable poster, and web and mobile banners.

About CU*Answers, Inc.

CU*Answers offers expertise in implementing technical solutions to operational needs, and is a leader in helping credit unions form strategic alliances and partnerships. CU*Answers provides a wide variety of services for credit unions including its flagship CU*BASE® processing system (online and in-house) and Internet development services featuring It’s Me 247 online and mobile banking. Additional services include web development, network design and security, and image check processing. Founded in 1970, CU*Answers is a 100% credit union-owned cooperative CUSO providing services to credit unions representing over 2 million members and $21.5 billion in credit union assets. For more information, visit www.cuanswers.com.

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LenderClose, Collins Community Credit Union and Dupaco Community Credit Union Complete First-Ever Remote Online Notarizations to Close Mortgage Loans in the State of Iowa

Five credit unions and counting participate in remote online notarization with the fintech CUSO

Des Moines fintech LenderClose today announced it has made history by executing the first-ever remote online notarizations (RONs) to close a mortgage loan in Iowa. The closings are part of LenderClose’s newly launched RON solution, which kicked off last week on the heels of the Iowa State Public Health Emergency Declaration. The declaration suspended the requirement for a notary to be physically present for the signing of real estate loan documents, furthering legalization of RON in the state.

“We’re extremely proud to be a part of this historic moment, especially because of the innovation’s ability to help borrowers during a really critical time of unprecedented financial and lifestyle hardships,” said Stefanie Rupert, Collins Community Credit Union president and CEO. “Our members expect us to live out our values, one of which is that our members matter more than their money. It’s our intention to always consider the person behind the transaction, and that is precisely what LenderClose helped us achieve today. We look forward to scaling this out to the rest of our borrower membership over the next several weeks and months.”

Kerra Martin, the Collins Community Credit Union member whose loan was closed through the innovative RON process, said she believes fellow members will benefit strongly from the improved closing process. “This will be an awesome product for the membership,” Martin said. “Especially during times like these, anything our cooperative can do to make financial transactions easier will be appreciated.”

Additional lenders expected to rely on the LenderClose RON solution for mortgage closings this week include Community Choice Credit Union, Serve Credit Union and Financial Plus Credit Union.

“Our partnership with LenderClose supports our unwavering focus on our members’ well-being,” said Matt Dodds, Dupaco Community Credit Union COO. “In the short-term, remote online notarizations minimize person-to-person interactions to help protect both our members and our employees. In the future, this technology will allow us to more effectively support and serve our members, regardless of where they live, when they’re ready to close on a loan.”

“Iowa’s credit union industry was proud to advocate for remote notarization during the 2019 legislative session with other strong collaborators like LenderClose,” said Murray Williams, president and CEO of the Iowa Credit Union League. “While we knew at the time that some Iowans had barriers to visiting their credit union in person, none of us could have imagined the current situation. We thank Governor Kim Reynolds for the swift action that enables credit unions to harness the power of technology to help Iowans buy homes and refinance mortgages in a manner that is safe during this difficult time.”

In anticipation that the Iowa governor’s decision will spread to other states, LenderClose CEO Omar Jordan has opened the technology to credit unions and community banks outside Iowa. “Community lenders in any state where remote online notarization is legal or on its way to being approved should reach out immediately,” said Jordan, who on Tuesday of last week became Iowa’s first approved remote e-notary. “We’re working with our partners to implement a RON solution where possible for their borrowers. Not only does it provide a true digital experience, but it becomes a necessary measure as contactless lending evolves from a ‘nice-to-have’ to a core expectation among borrowers.”

According to the Mortgage Bankers Association, 23 U.S. states have enacted RON legislation. More than 30 RON bills were introduced in more than 20 state legislatures during 2019. That said, as news of unprecedented social distancing measures has been unfolding quickly, state legislators are pushing to legalize RON in their states as fast as possible.

LenderClose platform users that sign on for RON provide borrowers with a true, contactless lending experience. Borrowers and lenders securely eSign and notarize the entire closing transaction via computer, smartphone or tablet. Lenders have the option to use their own online notary public(s) or rely on the pool of online notary publics already in the LenderClose ecosystem.

The LenderClose RON solution also includes:

  • A fully integrated ID verification system built off a knowledge-based authentication (KBA) framework
  • Access to authenticated and secure document signing certificates
  • Cloud-based storage of recorded and secure audio-visual sessions

Jordan encourages credit union and community bank lenders interested in accelerating RON at their institution to contact LenderClose by visiting lenderclose.com

What is Remote Online Notarization?

Remote online notarization enables online notarization of documents using audio and video technology. Documents are shared electronically, and both the signing and notary processesoccur face-to-face in a virtual environment. A series of rules and regulations, including those governing identity verification and video record keeping, maintain the integrity of notarization, protecting lenders and borrowers from fraud while dramatically accelerating the time it takes to complete a real estate transaction.

About LenderClose, Inc.

LenderClose is a proprietary, technology-focused lending platform that injects speed and efficiency into the lending process, greatly enhancing the borrowing experience. Based in Des Moines, Iowa, the rapidly-growing company is focused on helping credit unions and community banks keep lending local through innovative workflows and process automation. Obsessive about the end-user experience, LenderClose developers work closely with client users to continuously iterate the platform, generating elegant interactions for both lenders and borrowers across the entire lending journey. To learn more, visit lenderclose.com.

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Coronavirus Compliance Q & A from CUSN

This originally appeared on their blog but they have given us permission to reprint it.  This would normally be reserved for their compliance clients, but they are making this information available to all credit unions in hopes it helps you navigate this complex and confusing environment.

Question: Our credit union is allowing members to skip a payment on closed-end loans. What are some issues to consider?

One common way assistance is being offered is via “skip-a-payment” promotions on outstanding loans. This is a program already offered by many credit unions; a borrower can pay a small fee and “skip” making their monthly closed-end loan payment. While this is an excellent way to alleviate some financial pressure on a member, certain disclosures need to be made. A member should understand that the skipped payment will extend the term of the loan and interest will continue to accrue until the next payment is made.  The credit union should also consider the impact skipping a payment might have on a member’s GAP or credit insurance. A process should also be put into place to ensure loans with skipped payments are not reported to credit bureaus as delinquent.

Question: Our credit union is planning to temporarily increase our members’ credit card limits. What should we know before we do this?

A credit union is well within its rights to increase credit card limits. However, the credit union should understand the level of risk involved in taking this action without reviewing each cardholder’s current credit report. Additionally, cardholders under the age of 21 must be excluded from the automatic limit increase. Regulation Z requires proof of the ability to repay be obtained prior to raising the credit limit for a borrower under 21 years old.

Should your credit union decide to move forward with temporarily increasing credit card limits, members should be given information about how they may opt-out of the increase. When the credit union decides to end the temporary increase, 45 days’ notice should be given to members that their limit will be reduced and processes should be in place to prevent members being charged over limit fees or negative information being reported to credit bureaus.

Question: What about our annual meeting?

A federal credit union has flexibility to postpone its annual meeting and this may be necessary for credit unions with annual meetings scheduled over the next few months. The credit union should provide notice of the cancellation and rescheduled meeting as required in the FCU Bylaws. A federal credit union can amend the date of its annual meeting by using the fill-in-the-blank provision in its bylaws with the two-thirds vote of its board, without seeking the NCUA’s approval. State credit unions should also consult their bylaws and refer to state law in order to take the appropriate steps to reschedule the annual meeting.

Question: Are Regulation D limits still in place?

The Federal Reserve recently reduced the reserve requirement ratios to zero percent, but they did not change the transfer limitations imposed by Regulation D. Pre-authorized withdrawals from non-transaction accounts are still limited to six (6) per month, at least for now. Several trade associations have petitioned the Federal Reserve Board to ease withdrawal restrictions on savings accounts. Your compliance team will continue to monitor this and pass along any information we receive.

Question: We want to offer small loans with no payment due for 90 days. What concerns should we keep in mind?

Promotions offering loans with no payment due for 90 days are relatively common. Normal loan documents and disclosures can be used, but the borrower should be informed if interest will accrue during the first 90 days. Additionally, the credit union should put a process in place to ensure the loans are not reported to credit bureaus as delinquent during the deferred payment period.

Question: What issues with Bank Secrecy Act could arise because of the pandemic?

Your credit union should continue filing CTRs and SARs in a timely manner and your compliance program should continue as normal. Unfortunately, there are scams which often arise from national emergencies. Credit Union staff should be aware of scams involving fake charities, fraudulent investments, and sales of products making false claims about treating or curing the virus.

Question: Members are asking about withdrawing large amounts of cash.  Can we limit daily cash withdrawals?

Yes, you can limit the amount of cash a member can withdraw on one day, and you probably should.  If you choose to impose daily cash limits, we recommend posting a notice in the lobby and at the drive-thru.

You can also discourage this action as it’s not safe for members to carry large amounts of cash.  Remind your members that their funds are fully insured up to $250,000 by the National Credit Union Share Insurance Fund.  However, if your member insists on making a significant cash withdrawal, we recommend having him/her sign a hold harmless agreement, absolving the credit union of any liability.

Question: Can we waive fees to help our members?

Absolutely.  We’ve heard from credit unions who are waiving loan fees, such as late payment fees, over-the-limit fees, overdraft protection program fees, skip-a-payment fees, etc.  Some credit unions are waiving wire transfer fees and expedited shipping fees for cashier’s checks and credit/debit cards.  You can also waive share certificate early withdrawal fees, as long as the certificate has been open for at least six days.

Question: Will assisting our members result in issues with our next exam?

No. NCUA has taken the stance of encouraging credit unions to work with members affected by the Covid-19 pandemic. Short-term modifications made in response to borrowers who were current prior to the pandemic will not be considered troubled debt restructuring (TDR). NCUA examiners will exercise judgment in reviewing loan modifications, including TDRs, and will not automatically adversely risk rate credits that are affected, including those considered TDRs. In circumstances where modifications are considered TDRs, NCUA assures credit unions that its examiners will not criticize prudent efforts to modify terms on existing loans for affected customers.

Links to additional resources:

How we can help:

The CU Service Network compliance team assists credit unions across the country with outsourced compliance needs, from testing and marketing reviews to full outsourcing. As you can imagine, we have been quite busy assisting our credit unions over the past few weeks with items such as sample notices and disclosures for COVID-19 related products and services. Our now fully-remote team is focused on staying up-to-date with this environment and standing ready to review advertising and other member communications for compliance.

Not a compliance client? Contact us at hello@cusn.com to learn more. We hope you found this Q&A helpful during this confusing time.

CU Service Network and its employees are not engaged in rendering legal advice.  If legal advice is required, consult an attorney. Information may have changed since this document was prepared. This information is intended as a summary and is not intended to be all inclusive.