Welcome to the January 2020 Priority Report where we report on 2019’s year-end results and our priorities for the year ahead.
I’d like to start things off by highlighting several recent developments related to our federal advocacy efforts.
FEDERAL ADVOCACY AGENDA
The U.S. House took steps in late October to reform the Bank Secrecy Act and anti-money laundering laws when it passed the COUNTER Act with significant bi-partisan support. Similar legislation has now been introduced in the U.S. Senate. The ILLICIT Cash Act would provide financial institutions with much needed relief by reducing redundancies, unnecessary burdens and by creating efficiencies. We look forward to discussing the bill with Senators Peters and Stabenow during the upcoming CUNA GAC.
Related to robocall legislation, the President has now signed into law the TRACED Act. It will, among other things, require carriers to offer call-authentication technology to everyone at no additional charge and require that opt-in or opt-out robocall blocking also be offered at no additional charge to consumers.
On the hot topic of cannabis banking, we made considerable headway in 2019 with the passage of the SAFE Banking Act in the House and with the Senate Banking Committee holding a hearing on the issue. We are currently working with CUNA to assess the impact of some opposition from the committee and to determine next steps for this year.
MCUL staff are in the process of scheduling Hill visits for the upcoming CUNA GAC. In the meantime, you can visit MCUL.org to check out our tentative GAC schedule. And, we have confirmed the dates for our fall 2020 Hike the Hill which will take place Sept. 23 and 24. We hope you can participate in both of these events.
STATE ADVOCACY AGENDA
On the state side, legislation pertaining to data breach, payday lending and military escheats are currently seeing some action again.
Data breach legislation includes a “follow your contract” clause, which should provide credit unions relief by requiring breached merchants to provide financial institutions with more information and on a quicker timeline.
Payday Lending has resurfaced this year, which would create a new small-dollar installment loan program under the Deferred Presentment Transaction Act. Our team is working to oppose this legislation.
Military account escheats legislation would allow active duty military members the benefit of five years before their dormant account funds are escheated regardless of whether they are on U.S. or foreign soil, effectively giving credit unions more clarity and less regulatory burden going forward. Of course, we’re working to get this legislation passed.
REGULATORY COMPLIANCE
Moving to regulatory affairs, know that we understand the importance of regulatory compliance support, so the League is taking a three-legged approach in 2020: Advocacy, Information and Solutions. Through Advocacy, we’re lobbying to reduce burdensome regulations. With League InfoSight, we’re providing free resources and Information to our member credit unions in the form of state and federal regulatory content, FAQs, and policies with CU Policy Pro. Finally, we’re providing Solutions to help credit unions stay in compliance with compliance management systems ComplySight and AffirmX as well as assistance with vendor management through CU Vendor Management.
Our team is reviewing requests for comment from the CFPB, including a proposal to increase the thresholds for Remittance Transfers under Regulation E.
Earlier this month, MCUL hosted a group of credit union leaders in our Lansing office to discuss cannabis examination guidance from DIFS and the NCUA. The intent is to provide recommendations to the agencies this month. DIFS recently issued a letter to credit unions outlining their exam approach now that recreational cannabis is legal and is in the process of creating examination guidance with input from MCUL.
Meanwhile, the Examination Taskforce has wrapped up its survey. Your feedback is important as we continue to work with DIFS and NCUA for improving the examination process.
CONSUMER AWARENES
Let’s talk about a second MCUL priority — promoting the credit union difference.
The CU Link Michigan’s Open Your Eyes to a Credit Union® campaign continues to be a success thanks to your support. Now live in 18 other states, CUNA and the partnered leagues are primed to bring the initiative into the new year.
Our annual research shows that Michigan messages should focus on what’s in it for consumers, while demonstrating credit union trustworthiness and community commitment. With nearly 55% of the Michigan population already belonging to a credit union, share-of-wallet type messages that encourage consumers to save more when they do more business with credit unions are as important as ever.
Thank you for your critical support for this cooperative advertising campaign. All credit unions in Michigan support the campaign at the minimum level, but only about half pay more than the minimum participation level. We encourage your strong financial support that also creates opportunities for integration with your own credit union brand.
MCUF
And now let me put a plug in for our Michigan Credit Union Foundation. MCUF will continue, this year, to focus on supporting community impact activities. With an emphasis on improving the financial health of Michigan families and communities through credit union activities, the foundation will support several financial education programs including Financial Reality Fairs and statewide Money Smart Week programs. These programs reached more than 15,000 youth and teens and their families last year with your help. Thank you!
Credit unions of all sizes are invited to participate in foundation programs which also include support for financial counseling certification training and for our next generation of credit union leaders through the FUEL Michigan young professional group. The entire credit union industry benefits from the work of the Foundation, so please support it financially.
EDUCATION
We’re also proud of our education teams at MCUL and CUNA. Throughout the coming year, MCUL’s Education and Events team will be aligning our education offerings with credit union priorities, with a focus on Governance Risk & Compliance, technology, leadership development and small asset size credit unions.
We are kicking off our education offerings this year with March’s Compliance Conference, which will include a Q&A with representatives of DIFS and NCUA for the first quarterly meeting of 2020.
Also take some time to explore the agendas and speaker lineups for the Compliance Conference, Lending & Marketing Conference and Spring Leadership Development Conference.
CU SOLUTIONS GROUP
Now, on to a brief CUSG update — providing solutions in areas of technology, marketing, HR performance and strategy.
TECHNOLOGY SOLUTIONS
Throughout the year, Technology Solutions has assisted the transition of the LifeSteps Wallet product to a new LifeStep Solutions strategy. The focus is now on helping credit unions with expanded mobile features rather than a single platrorm strategy. This led to the launch of NestReady and Payzur. As part of the Payzur P2P solution, the mobile application development team is building a white-labeled standalone application to complement the existing mobile-first web app offered by Payzur. This will help credit unions compete with Venmo, Cash and other P2P offerings. And Nestready provides a great mortgage lending enhancement that competes with Zillow but in a more credit union-friendly way.
The division continues to partner with Access Softek on Mobile Finance Manager, a robust native mobile banking solution, and Orpheus, a mobile-first internet banking interface, offering a true omni-channel digital banking experience. We’re also moving forward with Access Softek to offer AIM, the company’s new robo-investment solution. This is another example of a strong mobile banking enhancement for credit unions.
Our ADA solutions with partner AudioEye have made major strides helping credit unions serve a more inclusive member base with their websites. Additionally, we executed major CMS enhancement in response to client feedback, improving our user-interface and adding a host of new and improved modules that simplify membership engagement in the digital space.
MARKETING SOLUTIONS
For Marketing Solutions, 2019 brought the acquisition of MemberXP and an offer change from Sprint, our largest Love My Credit Union Rewards partner. Our marketing solutions expanded to include affordable, digital agency services as well as full-service agency offerings through our DP+ partnership.
As Sprint and T-Mobile approach the end of a long merger process, CUSG looks forward to meeting with T-Mobile marketing execs to help them understand the value of this program for the new combined company. We’re hopeful that the value proposition for credit unions and their members will get even stronger.
Our acquisition of MemberXP added a product that delivers exceptional, multi-channel member communications and experiences with measurable results across the full member lifecycle. This platform leverages and monetizes multi-channel member engagement data, so credit unions can consistently deliver the best member experiences. Thirteen Michigan credit unions plus over a hundred nationally already use this member experience platform.
In the new year, we’ll be rolling out additional LMCUR partnerships. We’ve focused on offers that entice members to keep using the programs and keep them engaged with their credit union. The TurboTax program will also receive a boost in 2020 with a new data-backed service with DP+ to provide custom tactics to drive improved engagement and performance for Turbotax online in this tax season.
HR PERFORMANCE SOLUTIONS
HR Performance Solutions ended the year with solid, consistent growth across core products Performance Pro and Compease. Planning Pro also saw encouraging sales and engagement numbers, with more on the horizon for 2020.
New to the HR solutions lineup in 2019 was The Learning Center, or TLC 360, which can be integrated with Performance Pro or used as a standalone platform to offer credit union employees with a customizable library of online courses that integrate with Performance Pro. This makes it easier to assign learning content to employees through career development plans based on a library of required competencies for current and future positions. Expanding this library and including video content from our very own CUBE TV will be a focus in 2020.
STRATEGIC ADVISORY SOLUTIONS
For the second year in a row, our newest team, Strategic Advisory Solutions, has grown its presence. In addition to custom projects and training, more than 55 strategic planning, board governance, and leadership engagements were held; more than 30 website reviews and 10 BSA audits were conducted; and more than 30 eAdvisory modules have been sold.
The biggest addition to the division was the acquisition of credit union sector–rights of the AffirmX Compliance Solutions Suite in conjuncture with six credit union leagues and the subsequent creation of CU Risk Intelligence, LLC. Solutions from this new CUSO will focus on strengthening and expanding risk management and compliance services for credit unions nationwide.
Moving forward into 2020, the Strategic Advisory team will continue to build on the CUSG Executive Search offering by leveraging our Angott Search Group partnership and expanding our leadership and executive coaching consultations. Finally, plans are underway to integrate products like Governease, CEO Review and CU Vendor Management for a holistic GRC approach.
Finally, just a quick word about our projected year-end financial results for MCUL & Affiliates. CUSG had another successful year that resulted in dividends for shareholders including the MCUL. This financial success also helped fund MCUL while keeping our state association dues as the lowest in the nation. The equity markets and CUSG earnings will help MCUL increase its Member Net Assets slightly in 2019 and those strong reserves will also continue to provide a source of non-dues income to the benefit of member credit unions.
CONCLUSION
That’s it for the Q4 update. MCUL and CUSG teams are excited to pick up where we left off in 2019, building on legislative momentum, aligning education events and Michigan’s CU Link messaging with credit union priorities and much more to help our member credit unions better serve their 5.5 million credit union members in Michigan.
Thank you for your continued support of the MCUL, CUNA and CU Solutions Group. Here’s looking forward to a great year in 2020.