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NCUA Oversight of Third Party Vendors Act

September 29, 2021 – We are providing a copy of a letter that we sent to members of the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions. The HFSC has scheduled a hearing for today on the topic of “The Future of Banking: How Consolidation, Nonbank Competition and Technology are Reshaping the Banking System.” The last piece of potential legislation being considered is a bill regarding “NCUA Oversight of Third Party Vendors Act.” We have serious concerns with any such proposed legislation, as outlined in the attached letter.
We are providing to you, so you are aware, a list in case you want to send in letters to the HFSC Subcommittee members, sharing our concerns with unlimited vendor authority for the NCUA.

View Letter to the House Financial Services Committee
List of of HFSC Subcommittee Members

Letters should go to:

U.S. House of Representatives Committee on Financial Services
Attn: (Add Name of Subcommittee Member)
2129 Rayburn House Office Building
Washington, D.C. 20515

Please let us know if you have any questions by emailing the NACUSO office at: Connect@nacuso.org.

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NACUSO Supports CUSO Rule

September 24, 2021 – NACUSO commends the NCUA Board, and particularly Board Member Rodney Hood and Vice Chairman Kyle Hauptman, for the decisive action yesterday to put on the NCUA Board agenda for next month to finalize the CUSO rule amendments that were proposed at the January 2021 NCUA Board meeting.
As we have stated many times, NACUSO sees this rule as both an advancement of opportunities for credit unions to use CUSOs to generate ROA and a long overdue modernization of the CUSO rule itself. We commend Board Member Hood and Vice Chairman Hauptman for their visionary leadership and understanding of the value of CUSOs to the credit union industry. And we continue to extend our resources to Chairman Harper to work with him to help alleviate any justifiable concerns about the CUSO amendments and the collaborative value of CUSOs over the past thirty years to the cooperative credit union movement.
We anxiously await the results of the October NCUA Board meeting and the implementation of the final CUSO rule which has been under consideration at NCUA since it was included on their agency strategic priority list in 2018.
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August: Retail Spending Picking Up And Indicators of Early Holiday Shopping 

CO-OP Payments Trends Report (Spending Data from August 1-31)

9/16/2021 RANCHO CUCAMONGA, California As the U.S.’s post-pandemic recovery continues, consumers are beginning to shift their purchasing behavior from debit to credit, while increasing their spending in retail and specialty merchant categories like sports and recreation.

Those are a few of the latest trends CO-OP Financial Services has observed among its member credit union portfolios. Despite a mixed bag of economic data in August, consumers seem generally optimistic about their financial prospects, and are spending early and often in certain categories to offset shortages due to lingering supply chain issues.

The U.S. Labor Department reported a continued decline in weekly unemployment claims, dropping to a pandemic low of 310,000 in the week ending September 4, from a revised figure of 345,000 the week before. Some of this drop can be attributed to the reduction in jobless aid programs, as two federal programs covering contract and freelance workers, and people unemployed for over six months ended. Indeed, the pace of hiring slowed substantially in August, even while the unemployment rate dropped to 5.2%.

Yet, despite the fitful recovery and ongoing worries about the Delta variant, spending continues to grow across multiple categories.

Spending trends to watch this month include:

#1: Shift from Debit to Credit is Happening Now

The anticipated resurgence of credit finally seems to be taking hold, with August credit spending trends showing major increases month-over-month in multiple categories including online sales, education, gas, grocery, retail and computers. In debit, several of these categories, such as retail and grocery, showed more modest increases or even declines for the month.

“The shift to credit is happening now, as people are feeling more comfortable with their financial situations than they did a year ago,” said John Patton, CO-OP Senior Payments Advisor. “Consumers used their stimulus payments from earlier this year to pay down credit card balances, as well as taking advantage of low interest rates to refinance their balances into installment loans. They kept their lines open, and are now opening their wallets to take advantage of that additional availability.”

#2: Retail Picks Up Steam

Boosted by an active back-to-school sales season, retail spend had strong growth in August – especially in credit, which grew by 18% in transaction count and 13% in transaction amount month over month. In comparison, retail debit spend was basically flat for the month.

Certain specialty categories saw big lifts in July and August, such as sports/recreation, which saw a 28% lift in transaction count in July and an additional 8% in August, with return of school, club and collegiate sports even in modified form. This includes several merchant categories, such as sporting goods stores, shoe stores, sports apparel, sporting and recreational camps, and recreational services.

#3: Ecommerce Spending Remains Hot

One ongoing lesson from the pandemic is that consumers have become very comfortable with shopping online. From eCommerce to newer channels like Buy Online, Purchase In Store (BOPIS), consumers who had resisted making online purchases for any number of reasons have flocked to the channel in droves.

That trend continued in August, as Amazon/bookstore sales increased by double-digits month over month in both credit and debit. Year over year, despite massive growth in the eCommerce channel in 2020, the category is up again by 9% by transaction amount in credit for 2021.

What Credit Unions Should Do Now

According to Beth Phillips, CO-OP Director of Strategic Portfolio Growth, credit unions should take advantage of their members’ increasing use of credit this fall, with an eye toward an early holiday shopping season.

“We recommend ramping up your rewards and incentives now, before your members begin their holiday shopping,” said Phillips. “Look at the data to see where your members are spending, and target those categories and merchants with special incentives to position your card top of wallet. Plus, begin planning for post-holiday balance growth opportunities now.”

Since eCommerce is here to stay, it’s also important to allow members easy access to their card accounts through their preferred digital wallet apps. CO-OP Digital Card Issuance allows members to access their digital credit and debit credentials instantly, providing a seamless, touchless and secure process through the credit union’s mobile app. And with CO-OP Digital Wallets, credit unions can remain top of wallet by allowing members to use their debit and credit cards with most popular wallet apps including Google Pay, Apple Pay, Samsung Pay, Fitbit Pay and Garmin Pay.

Month-Over-Month Category-Level Spending (Comparing August 2021 to July 2021)

Please note that the category spending below reflects month-over-month comparisons (rather than year-over-year), i.e., compares August 2021 with July 2021, rather than August 2021 and August 2020.

 Amazon/Bookstores

Transaction Volume (#):
Credit: Up 12%. Debit: Up 6%.
Transaction Amount ($):
Credit: Up 13%. Debit: Up 10%.
Interchange ($):
Credit: Up 25%. Debit: Up 11%.

Digital Goods

Transaction Volume (#):
Credit: Down 2%. Debit: Down 7%.
Transaction Amount ($):
Credit: Unchanged 0%. Debit: Down 6%.
Interchange ($):
Credit: Up 3%. Debit: Down 7%.

Dining and Entertainment

Transaction Volume (#):
Credit: Up 4%. Debit: Down 3%.
Transaction Amount ($):
Credit: Up 1%. Debit: Down 4%.
Interchange ($):
Credit: Up 2%. Debit: Down 4%.

Education

Transaction Volume (#):
Credit: Up 49%. Debit: Up 44%.
Transaction Amount ($):
Credit: Up 52%. Debit: Up 47%.
Interchange ($):
Credit: Up 44%. Debit: Up 42%.

Gas

Transaction Volume (#):
Credit: Up 25%. Debit: Down 5%.
Transaction Amount ($):
Credit: Up 20%. Debit: Down 4%.
Interchange ($):
Credit: Up 36%. Debit: Down 4%.

Grocery

Transaction Volume (#):
Credit: Up 25%. Debit: Down 4%.
Transaction Amount ($):
Credit: Up 24%. Debit: Down 4%.
Interchange ($):
Credit: Up 46%. Debit: Down 4%.

Lodging

Transaction Volume (#):
Credit: Down 8%. Debit: Down 10%.
Transaction Amount ($):
Credit: Down 11%. Debit: Down 13%.
Interchange ($):
Credit: Down 11%. Debit: Down 14%.

Medical

Transaction Volume (#):
Credit: Down 1%. Debit: Down 6%.
Transaction Amount ($):
Credit: Down 4%. Debit: Down 8%.
Interchange ($):
Credit: Down 4%. Debit: Down 8%.

Retail

Transaction Volume (#):
Credit: Up 18%. Debit: Down 2%.
Transaction Amount ($):
Credit: Up 13%. Debit: Down 1%.
Interchange ($):
Credit: Up 21%. Debit: Down 2%.

Travel

Transaction Volume (#):
Credit: Down 2%. Debit: Down 5%.
Transaction Amount ($):
Credit: Down 17%. Debit: Down 16%.
Interchange ($):
Credit: Down 17%. Debit: Down 16%.

Computers

Transaction Volume (#):
Credit: Up 42%. Debit: Up 4%.
Transaction Amount ($):
Credit: Up 28%. Debit: Up 3%.
Interchange ($):
Credit: Up 40%. Debit: Up 3%.

Office

Transaction Volume (#):
Credit: Down 1%. Debit: Down 4%.
Transaction Amount ($):
Credit: Up 2%. Debit: Down 4%.
Interchange ($):
Credit: Up 3%. Debit: Down 6%.

Campers & Camping

Transaction Volume (#):
Credit: Down 10%. Debit: Down 18%.
Transaction Amount ($):
Credit: Down 3%. Debit: Down 9%.
Interchange ($):
Credit: Down 1%. Debit: Down 12%.

Home Improvement

Transaction Volume (#):
Credit: Up 8%. Debit: Down 11%.
Transaction Amount ($):
Credit: Down 1%. Debit: Down 13%.
Interchange ($):
Credit: Up 4%. Debit: Down 13%.

More information on the CO-OP SmartGrowth Consulting Team can be found here.

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PSCU Announces Additional Investment of Over $50 Million in Lumin Digital

 8/24/21 – PSCU, the nation’s premier payments credit union service organization (CUSO), today announced that its Board of Directors has approved an additional investment of $54 million in Lumin Digital, PSCU’s cloud-native digital banking company, over the next three to five years. This investment will bring PSCU’s total investment to $125 million since the formation of Lumin Digital in April 2018, with continued investment expected to be announced in the near future.

This additional investment will enhance Lumin Digital’s ability to elevate its industry-leading platform for retail and business banking, including advanced features such as online account opening and other capabilities. With market demand and growth remaining even higher than anticipated, this capital will also be used to scale Lumin’s implementation and support capacity to meet these market needs. Together with PSCU’s ongoing investments in its core programs like dispute management, data and analytics, fraud and more, this additional investment in Lumin Digital reinforces PSCU’s commitment to diversifying its business model and preparing both the cooperative and its credit unions for the future.

Lumin Digital’s focus on modern and stable architecture, convenience and speed has earned the company a 100% client referral rate. Lumin’s innovative “zero downtime upgrades” model enables weekly iterations, updates and innovations without having to bring the system down – a key differentiator in the market. This enables the platform to be continuously updated with no scheduled maintenance windows or interruptions for members, providing an optimized banking experience that works and feels like elite apps.

“With the accelerated shift to digital and the evolving preferences of consumers, we are excited to further our investment in Lumin Digital to meet demand and enable continued growth,” said Chuck Fagan, president and CEO of PSCU. “This additional investment, along with the ongoing investments we continue to make in our core programs, are squarely aligned with our strategic priorities of optimizing digital experiences, growing member engagement and providing industry-leading security solutions, all while delivering an unparalleled experience.”

Twenty-three credit unions are now live on the Lumin Digital platform with more implementations currently in process. Lumin has more than 1.25 million users under contract, with over half already utilizing the digital banking solution. Importantly, every launch of Lumin Digital has been a clean conversion for the financial institution, implemented on time and seamlessly.

“Lumin Digital enables financial institutions to provide consumers with a highly personalized and engaging digital banking experience. Digital payments and card management are two essential capabilities that we offer our clients and their members. Lumin’s tight integration with PSCU’s platform and other crucial products and services gives accountholders access to a wide variety of powerful card features,” said Jeff Chambers, president of Lumin Digital. “This investment is a testament to the positive impact that Lumin is making for financial institutions. Our continued partnership with PSCU and the additional investment approved by the Board of Directors will further fuel product innovation and platform automation that will help our clients take their digital offerings to the next level.”

“PSCU’s Board of Directors is confident that this additional investment will further enable credit unions to compete in today’s market, deliver an exceptional experience for their members and contribute to their sustainable growth.” said Sean Rathjen, chair of PSCU’s Board of Directors and president and CEO of Consumers Credit Union (Gurnee, Ill.). “We are proud to further accelerate the growth of Lumin Digital, which has been an incredible success over the past three years.”

Lumin Digital is a cloud-native digital banking platform built using modern, market-leading technology built for human connection. The platform helps credit unions increase member engagement, enhance value and deepen relationships – all at secure speed with minimal risk – by creating a truly personalized journey for members. Lumin Digital’s offering provides seamless access to a wide array of PSCU platforms and services, including card services, data analytics and contact center support.

For more information about Lumin Digital, visit LuminDigital.com.

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CO-OP Staff Puts Company Among Top ‘Engaged Workplaces’…

ACCORDING TO ACHIEVERS, EMPLOYEE RECOGNITION EXPERTS

Criteria for Award Based on Eight Factors of Employee Engagement

8/11/21 – CO-OP Financial Services has been named among the “2021 Achievers 50 Most Engaged Workplaces®” by Achievers, a provider of employee voice and recognition solutions. In making the announcement, Achievers President and CEO Jeff Cates said that CO-OP and the other award-winning organizations, “Embody what it means to be a ‘people-first’ business and have proven how the prioritization of employee experience can help an organization withstand even the most difficult of times.”

The Achievers 50 Most Engaged Workplaces is a highly competitive awards program, now in its tenth year, and receives submissions from around the globe. A panel of 15 judges comprised of employee engagement academics, industry analysts, thought leaders, journalists and influencers evaluated the applicants, whose names were not made known to the judges. Winners were selected based on Achievers’ Eight Elements of Employee Engagement®, including Accountability and Performance, Belonging, Equity and Inclusion, Culture Alignment, Manager Empowerment, Professional and Personal Growth, Purpose and Leadership, Recognition and Rewards, and Wellbeing.

 “I’m incredibly proud of our team,” said Todd Clark, President/CEO of CO-OP. “The practice of meaningful employee recognition has become a part of who we are as a company. A lot of time and effort went into this achievement, all during a pandemic no less. Engaged employees are critical to our company’s success and we have many, many overachievers!”

 “After the turbulent year we’ve all endured, it’s clear that employee engagement has become even more critical as organizations seek to not only survive disruption but thrive in the face of adversity and change,” Achievers wrote to CO-OP, notifying the company of its selection. “It is our honor to recognize CO-OP Financial Services as one of the 2021 Achievers 50 Most Engaged Workplaces, which acknowledges your commitment to cultivating a positive work environment.”

In addition to CO-OP, two other organizations from the credit union industry were among the honorees, including VyStar Credit Union of Jacksonville, Florida, and SchoolsFirst FCU of Santa Ana, California.

The winners will be further honored at a virtual awards gala presented by Achievers, to be held Thursday, October 21, 2021, which just so happens to be International Credit Union Day.