News & Highlights

If I Were the Credit Union Czar- by Guy Messick

PART 1: Leveraging the Cooperative Model

cooperative-movement-400x305We all have our own version of what is wrong in credit unions today.   The regulated point to the regulators and the regulators point to the regulated.  While we are busy pointing at each other, our chance to re-invigorate credit unions is slipping away.  We are too busy living in the moment and our personal pain points to see the obvious.

What if you were put in charge of regulating all credit unions?  What would you do?   In this, the first of a two-part series that probes these questions, I will tell you what I would do.

Recognize the Potential of the Cooperative Model

The credit union difference is the cooperative model.  If we do not exploit that difference, we risk being marginalized in the marketplace.  In today’s world, financial institutions need scale to survive.  When the for-profit world thinks of scale, they think of mergers.  Yet mergers are time-consuming and disruptive.  In the case of credit unions, too many mergers also mean less political clout and eventual loss of a separate regulator.

The cooperative model enables credit unions to work together to obtain scale without the need to sacrifice the identity and unique market position of each of the participating credit unions.  Scale through a collaborative model is more efficient and less disruptive to employees and members than scale through mergers.

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Cooperation Among Cooperatives: Stories From the Inside

Pat Connealy at the 2016 NACUSO Network Conference

Patrick Connealy at the 2016 NACUSO Network Conference

Each month we highlight at least one NACUSO member by interviewing one of their top executives. It’s an opportunity to tell their story in a casual and fun way. This month we sat down with Patrick Connealy.

PART ONE: Life Story and Experiences

What’s your current position and can you give me a brief overview of what it is you do in your work?

I’m the Executive Vice President of Commercial Banking for the National Cooperative Bank and I oversee nine Business Development officers that cover a variety of cooperative business segments nationwide.

What would you say most motivates you to do what you do? What are you most excited or passionate about?

I’ve been working with co-ops my whole life and have been with NCB for 30 years.  I started my career in the agriculture co-op banking business and spent seven years with them including three years with the Farm Credit Administration. I moved to NCB in 1986 when the bank was six years old. We fill the financing gap for co-ops that are not agricultural or electric co-ops.  I am most passionate about the long term customer relationships developed by NCB- some of which have been with us since 1980!

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Partner Connection Sessions Debut!

Kirk Kordeleski kicks off Partner Connection Session

Kirk Kordeleski kicks off Partner Connection Session

The challenge for credit union leaders who want to explore CUSOs and partnerships seems to be twofold: how to find and connect with partners who have similar challenges, needs and wants; and, how to evaluate their potential collaborations and develop the data and business plans and get them in front of the decision makers, in a quick enough process, so they know what the advantages are, the timeline and what they will need to invest. Recognizing these challenges we added Partner connection sessions to this year’s agenda. (more…)

NACUSO Recognizes Collaboration and Innovation with Awards

NACUSO once again recognized excellence in collaboration with the CUSO of the Year award and the Credit Union Collaboration & Innovation awards. These awards are designed to highlight the important role CUSOs play in helping credit unions effectively and efficiently serve their members.

Steve Salzer, SVP of PSCU

Steve Salzer, SVP of PSCU

The 2016 CUSO of the Year Award winner is PSCU. The award was accepted by Steve Salzer, Senior Vice President of PSCU. Founded in 1977, PSCU has been a leading provider of traditional and online financial services to credit unions. Today they serve over 800 credit unions making them one of the leaders in the CUSO space.

Rick Leander, President, Allegory Business Systems

Rick Leander, President, Allegacy Business Systems

The 2016 Credit Union Collaboration and Innovation Award winner is Allegacy Federal Credit Union. Accepting the award was Rick Leander, President/Managing Director of Allegacy Business Systems with offers insurance, payroll, consulting and media services to small businesses.

William Arnold, CEO of Member Support Services

William Arnold, CEO of Member Support Services

NACUSO added a new award this year, recognizing that it takes time for CUSOs to show significant results but new CUSO business models are worthy of recognition. One such CUSO was awarded the New CUSO of the Year Award – Member Support Services. CEO Bill Arnold was on hand to accept the award.  Member Support Services was formed by three New Jersey credit unions to achieve economies of scale and lower costs to better serve their members.

Next Big Idea Competition Expands the Field and Welcomes a new “Shark”

L to R: Matt Davis, Ray Crouse, Ned May and Sarah Canepa Bang

L to R: (Einstein), Matt Davis, Ray Crouse, Ned May and Sarah Canepa Bang

Our 4th annual competition received a record number of applications. So many we expanded the field to 6 contestants. Each entrant was given 7 minutes on the main stage to present to a live audience and our esteemed judges. This is the CUSO version of Shark Tank. This year’s “shark” was a real Private Equity/Venture Capitalist, Ned May, Partner, Napier Park Global Capital. Sarah Canepa Bang, EVP Corporate Relations, CO-OP Financial Services, Ray Crouse, President/CEO of Parsons Federal Credit Union and Matt Davis Founder of gameFI rounded out the judges table. (more…)

There Can Be No “Big Ideas” Without Discomfort

Over 400 credit union innovators and collaborators met at the Encore at Wynn in Las Vegas, April 4th – 7th for the 2016 NACUSO Network conference. Network being the central theme, this year we welcomed attendees with the “network lounge” experience with over 40 exhibitors, fabulous food and adult beverages to kick off the event.

Recognizing that CUSOs come in many shapes and sizes we try to cover the majority of disciplines by bringing in industry leaders. This year’s topics included investment, insurance and mortgage services as well as member business lending, operations and technology.  The debut of Partner Connection Sessions was a hit as over 100 credit unions attended (more…)

What CUSOs Should Be Watching Right Now – By Frank Diekmann, CUToday

LAS VEGAS — CUSOs here got an overview of more than a dozen regulatory and legal issues to which they were told to be paying attention.

In remarks to the NACUSO annual conference here, Brian Lauer of the law firm Messick & Lauer, noted the changes to which CUSOs are being subjected are numerous, but nearly all also include opportunities. Among the issues credit unions and CUSOs should be watching, said Lauer, are NCUA’s FOM proposal, associational common bonds, the final fixed asset rule, regulatory appeals, the final risk-based capital rule, cybersecurity, the CECL proposal, the GAO report on consolidation of regulators, network credit unions, small entity reg relief, and legal opinions (NCUA opinion letters have declined—just six in last two years (and two of those written in response to former ABA exec Keith Leggett). (more…)

LinkedIn? Should be “Let Them In” – By Frank Diekmann, CUToday

stickley

Jim Stickley talks about the new “F” word – fraud

LAS VEGAS–Your credit union may have invested heavily in data security, yet thanks to your employees and even your own professional networking, breaching that data remains as easy as ever.

Just ask Jim Stickley, who can offer real-world example after example of how simple phishing scams can fool CU employees from senior management to the IT department.

Stickley, the security expert who heads Stickley on Security and who is often hired to hack into credit unions and other institutions using a number of often simple (yet ingenious) strategies, said the reasons for the onslaught of cyber-attacks on credit unions are simple. And often those strategies are based on using a credit union’s own security training against it.

“Everybody is doing hacking: organized crime, foreign governments. There are huge opportunities for money, and the risks are really, really, really low,” said Stickley in remarks themed “Fraud: The New F Word” at NACUSO’s annual meeting.

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Advocacy Updates

NCUA Meeting Provides CUSO Guidance 6/16/16

NACUSO Visits NCUA to Discuss the CUSO Registry and CUSO Reviews

On June 14, Jack Antonini, NACUSO President and Guy Messick, NACUSO General Counsel met with NCUA Staff on the results of the CUSO Registry and the thinking on how CUSO Reviews will be handled.

The CUSO Registry sign-up period and the follow-up by NCUA found there were approximately 900 CUSOs.   NCUA believes that there are more CUSOs that have not reported.  Under the NCUA Regulations (Part 712.1(d)), “A CUSO also includes an entity in which a CUSO has an ownership interest of any amount, if that entity is engaged primarily in providing products or services to credit unions or credit union members.”   So these subsidiary CUSOs are considered CUSOs and required to make annual reports to NCUA.   The NCUA staff believes that many CUSOs were not fully aware of this requirement and there are a number of subsidiary CUSOs that have not reported.   NCUA will be following up with CUSOs to obtain these filings.   NCUA is also scrubbing the data and asking for clarification if the data is indicating that there may have been a reporting error. (more…)

Report on Advocacy Fund spending…NACUSO Working for you

Through the support of our partners, NACUSO raised approximately $63,000 in contributions toward its Legal and Litigation Fund in 2014 with a primary purpose to develop strategies for the most effective way to seek the repeal and/or mitigation of the impact of the CUSO Rule that NCUA had adopted in November 2013.  Subsequently, NACUSO established an Advocacy Fund to supplement the Legal and Litigation Fund.  The goal of the two funds together were to enable NACUSO to coordinate legal decision making, with a crucial advocacy component that will have more impact than the always risky option of legal action.  In total, $190,600 was contributed to the NACUSO Advocacy Fund.  Combined these two related initiatives received total contributions from NACUSO partners of approximately $253,600 in 2014 and 2015.

In keeping with our commitment to be fully transparent and to regularly communicate our usage of these dollars, we would like to provide you with the following information.  NACUSO spent the following amounts from the two funds during 2014 and 2015:

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CUSO Registry Clean Up Period 4/22/16

As most of you know, all CUSOs are obligated under the NCUA Regulations to register certain information directly with NCUA on an annual basis.   Over 800 CUSOs did so in February and March.   NCUA is now in the process of making sure all CUSOs have registered.   Their new deadline is April 30.  They are taking CUSO information from the credit union 5300 call reports and sending out letters reminding “CUSOs” that they have to register.   Some credit unions may have incorrectly listed a company as a CUSO.  Other credit unions list their CUSO but use an acronym for the CUSO instead of the CUSO’s full name.   NCUA, not knowing better is sending letters to any and all companies listed on the call reports. (more…)

Regulatory Update 3/15/16

Letter to NCUA regarding CUSO Registry Acknowledgement: Yesterday, NACUSO informed you of a change we negotiated with our General Counsel (Messick & Lauer) with the NCUA regarding the CUSO Registry Acknowledgment each CUSO is required to agree to when submitting their CUSO registration in the NCUA’s CUSO Registry system.  As we pointed out in our Regulatory Alert yesterday, the acknowledgment required CUSOs to agree to be bound by statutes that only apply to credit unions and which imposed penalties that are not applicable to CUSOs.

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Change to the CUSO Registry Acknowledgement 3/14/16

During the process of assisting with CUSO Registry questions, it came to our attention that in order to complete the CUSO Registry, CUSOs were required to agree to be bound by statutes that apply to credit unions and which imposed penalties that are not applicable to a CUSO.  On behalf of NACUSO and the many CUSOs in this industry, Messick & Lauer (NACUSO’s General Counsel) have advocated and negotiated to revise this acknowledgement to more accurately describe the duty of CUSOs to respond to the CUSO Registry.  It is a contractual duty with the credit union and not a direct regulatory obligation to NCUA.   As NCUA continues to pay more attention to CUSOs, NACUSO will continue to take action to be the voice of CUSOs and to resist any attempts at regulatory overreach.  The NCUA has changed the acknowledgement text.  For your reference, the text of the previous and current CUSO Registry acknowledgments are below. (more…)

Regulatory Update 2/26/16

NCUA’s CUSO Registry Training & Demonstration webinar held on February 11 is now available to be viewed.  If you missed the webinar, or want to view it again, to help you in completing the CUSO Registry, you can watch it by clicking on the following link:  View 2/11/16 Webinar. You have until March 31, 2016 to complete your initial registration of all CUSOs.

Regulatory Update 2/1/16: NCUA’s CUSO Registry Opens Today

Credit unions and credit union service organizations can now get additional guidance on NCUA’s CUSO Registry from a new agency website page. Registration for the CUSO Registry opens today and continues through March 31. The new website page explains the agency’s requirement that CUSOs report information directly to the agency if they wish to work with credit unions and provides links to related resources available to help those completing the registry. You can link directly to the CUSO Registry from the resources page.

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