Welcome to the Third Quarter 2019 MCUL Priority Report. This month, we will provide an update on our current priorities and what we have planned before the close of 2019.
Before going into more detail, a brief summary of our advocacy priorities: at the federal level, we’ve had some good movement on two bills – SAFE Banking Act and robocalls act. The SAFE Banking Act would provide a safe harbor for cannabis banking practices in states, like Michigan, that have legalized cannabis. We know that here in Michigan, cannabis banking has been an area that has not moved as quickly as we would like, and we need to do what we can to pave the way to serve cannabis businesses. We are in the process of working with DIFS to provide more regulatory direction for credit unions relating to cannabis banking and we will keep you apprised of that effort. We hope to have an update soon. The robocalls act would prevent obnoxious solicitations but would allow credit unions to reach their members when they need to. We are also looking for some progress on the Bank Secrecy Act/Anti-Money Laundering reform – both of which will go a long way to ease the compliance burden. Additionally, our Government Affairs team is making its way to D.C. this month for the annual Hike the Hill trip, where over 50 credit union leaders will join us in our nation’s capital to meet with lawmakers.
At the state level, we’re looking forward to the introduction of Uniform Assignment of Rents legislation to provide credit unions proper rights in the event of a loan default or foreclosure. We also continue to monitor Payday Lending to assure proper consumer protections are in place and that credit unions aren’t at a disadvantage as they provide short-term, emergency loans to members.
With our awareness campaign, Open Your Eyes to a Credit Union, we’ve spent the last couple months gathering feedback from focus groups across the state, and the team is excited to incorporate that feedback into the campaign to improve our messaging. We’ve also been happy to see how this campaign has grown across the country in the past few months. We have heard several stories from credit unions that prove that this campaign is not only a way to engage and interact with members and future members, but also as an advocacy tool to engage with lawmakers.
For information services, we have been working on reorganizing MCUL.org to make menu navigation easier for our members. It’s our plan to make it easier for you to find what you need. For example, we have added a compliance tab so you can better locate our compliance resources. When you have a chance, take a moment to visit the site to see what’s new.
I want to thank everyone who participated in our comment submission to the Financial Accounting Standards Board in support of a delay in changing reporting standards for CECL, or Current Expected Credit Loss. We have heard from you that a delay to prepare and understand changes to this standard would be helpful. We’re also pleased to report that Congressman Jack Bergman has agreed to co-sponsor legislation that will delay CECL implementation. We will continue monitoring the issue and educating lawmakers about the importance of it.
Our Education agenda is wrapping up for the year with a few more events left, including the Contact Center Conference and Intentional CU Leadership, and a new addition this year, the Lending School, which has grown out of credit union feedback. Make sure to check out what’s on our 2020 calendar as you work on strategy planning this last quarter.
I’ll be back later to talk in more depth about CU Solutions Group developments, including a CMS redesign, getting credit unions ready for tax season and the latest regarding AffirmX and ComplySight.
Now I’ll turn things to Patty Corkery for a detailed account of the association’s activities and priorities.
FEDERAL ADVOCACY AGENDA: SAFE Banking & BSA/AML Reform
In the third quarter, credit unions experienced two significant victories on Capitol Hill. First, in late July, the U.S. House passed the Stopping Bad Robocalls Act, which seeks to curb the illegal and unwanted robocalls that we’ve all unfortunately have become accustom to and frustrated with. In doing so, it’s important to note language was incorporated into the bill that will allow credit unions to effectively contact members for legitimate purposes, such as in response to a data breach or to help them avoid fees.
Our second victory of late came when the U.S. House passed the Secure and Fair Enforcement (SAFE) Banking Act. Whether the Senate will choose to act on cannabis banking is a big unknown. Influential committee chairmen Mike Crapo from the Senate Banking Committee recently indicated he may be open to bringing cannabis banking legislation up for debate and a vote in his committee. Whether that legislation would be the SAFE Banking Act in its current form, an amended version or an entirely new bill, is still unknown but it’s important that Senator Crapo has expressed a desire to take action.
We are also pleased to report that, as Dave mentioned, Congressman Jack Bergman has agreed to co-sponsor legislation that would delay implementation of the CECL accounting standard and will require a comprehensive study of the standard’s impact on the economy, availability of credit, among other things. We continue to educate others in the delegation on the issue and call on them to co-sponsor and urge leadership to bring the bill up for a vote.
Finally, we remain hopeful that leadership in the U.S. House will follow through on their late summer call to move Bank Secrecy Act/Anti-Money Laundering reform legislation, along with a bill to reauthorize the National Flood Insurance Program, this fall. These reforms are necessary to minimize the compliance burden on credit unions while a long-term flood insurance reauthorization bill is necessary to reduce the complexity of the program and shore it up financially.
STATE ADVOCACY AGENDA: Data Breach & Uniform Asssignment of Rents
As you probably know, our state lawmakers have been focused late summer and early fall on the state budget. As that has gained a lot of their time and attention, there’s a lot of legislation in the early stages. Data breach legislation is still being drafted and we are hoping for a bill that will move the needle forward to provide credit unions and other financial institutions the necessary information they need to protect members and minimize losses.
Legislation has been introduced to address financial exploitation and abuse of elders. MCUL, in conjunction with Senator Peter Lucido and the Michigan Business Association, believe that this bill is a good compromise to help protect vulnerable and elderly adults without being overly burdensome on financial institutions.
Uniform Assignment of Rents is set to be introduced shortly. The current draft provides that in the event of default and foreclosure on a commercial property with renters, the credit union will automatically have the right to have the collection of rental income be assigned to the credit union. The only requirement is that the credit union perfects their interest in the rental income upon the foreclosure of the loan on the commercial property.
A draft of Payday Lending has resurfaced this year. This would create a new small-dollar loan program under the Deferred Presentment Transaction Act. Our team is working with its sponsor to include additional consumer protection measures.
REGULATORY COMPLIANCE: FASB's CECL Delay
Moving onto regulatory affairs, the Examination Taskforce is wrapping up its survey, so be on the lookout for this in the coming weeks. Your feedback is important as we continue to work with DIFS and NCUA for the betterment of the industry and the examination process.
As Dave mentioned, MCUL submitted comments last month to the Financial Accounting Standards Board in support of the proposal to delay CECL’s effective date. While we expressed our support, we also took the opportunity to further encourage the Board to provide exemptions for community-based financial institutions.
NCUA issued the final rules on supervisory committee audits, federal credit union bylaws and payday alternative loans. The FCU bylaws were adopted largely as proposed and will provide meaningful regulatory relief to federal credit unions. The new payday alternative loan rule establishes a Payday Alternative Loan II program. MCUL is currently evaluating each rule and will provide a summary of each.
CONSUMER AWARENESS: Download New Assets
Turning to Consumer Awareness, annual research consisting of surveys and focus groups is nearly complete. We’re looking forward to sharing results before year-end and improving our CU Link campaign messaging as needed.
Through the third quarter, the Open Your Eyes to a Credit Union campaign reached 5.6 million targeted consumers in Michigan. CUNA added Arizona, Nebraska, West Virginia and Vermont to the initiative which brings the total to 13 states running the campaign.
We appreciate the dozens of full fair-share credit unions that have used their CU Link reimbursement dollars to co-brand with the campaign throughout Michigan. All League affiliates may download ready-made creative assets from the MCUL integration page. I hope you continue to take advantage of the library of campaign materials to generate awareness, and promote products like auto loans, mortgages and credit cards.
MCUF: 91 New Trained Counselors
In addition to funding statewide coordinated financial education initiatives, the Michigan Credit Union Foundation has been helping credit unions across the state with their own community reinvestment initiatives this year. Twenty-two grants totaling nearly $90,000 have already been awarded this year.
Two of these grants are helping to bring Children’s Savings Account Programs to families in the Jackson and Muskegon school districts. These automatic enrollment accounts are dedicated to post-secondary education costs and are combined with in-class financial education conducted by the credit unions.
The enhanced financial counseling certification training program wrapped up this month. Congratulations to the 91 credit union employees who completed this training and are now better equipped to help members in need. More than 700 credit union employees have participated in this program since it began in 2010, and MCUF plans to continue offering support for this training in 2020.
EDUCATION: New Events
Moving on to Education, MCUL remains committed to being responsive to our members’ requests for training, which is why this year we introduced the Lending School to our conference lineup. Feedback we receive from you, from those who attend our events and from the Educational Needs Task Force helps us shape our calendar of events.
Well-known industry expert Don Arkell will return to Michigan to facilitate the two-day Lending School, with the first day targeted for frontline staff topics and the following day geared specifically for management-level issues.
This new event joins other recent additions to our Education lineup, such as the popular Leadership@Eleven program for executives and the Contact Center Conference introduced last year.
When you plan your 2020 training strategy for staff and volunteers, be sure to consider the selection of industry-specific events available from MCUL and CUNA, all which are delivered as an added value of membership.
CU SOLUTIONS GROUP
TECHNOLOGY SOLUTIONS: NestReady & Access Softek
Now, onto CU Solutions Group, we’re pleased to announce our recent recognition in website design and development from the Web Marketing Association of Michigan. The websites recognized for their high standard of excellence included three client credit union websites in addition to the League Infosight website.
As part of our commitment to building user-friendly websites, the Technology Solutions division is currently redesigning its content management system. This CMS redesign includes adding new site management tools that allow credit unions to integrate easy-to-use services on their site, everything from membership and loan applications to balance transfers.
CUSG Technology Solutions also continues to support the handoff of the LifeSteps Wallet product line to LifeStep Solutions, LLC. Development work is now focused on a new iteration of the mobile application, which includes a new collection of partner resources in addition to newly developed native functionality. NestReady, for example, shows strong promise both as a core component of LifeSteps Wallet and as a standalone solution for credit union websites. NestReady offers full, end-to-end solutions for every aspect of the home buying experience in a way that integrates into a credit union’s mortgage lending process. Credit unions are able to build relationships with home buyers much earlier in the process and credit unions have dashboard access to detailed member insights.
The LifeStep and Technology Solutions teams are also tapping into members’ desires for uncomplicated ways of investing via the technology they’re already using. Harnessing the popularity and ease-of-use of robo-investing, work continues with Access Softek on lightweight account integration for a robo-investing solution with myCUID, part of our partnership with CU Ledger. Other LifeStep feature sets underway include personal finance management, reloadable debit solutions, enhanced P2P services, fractional-share investing, and integration with QCash Financials' small-dollar, short-term lending platform. These essential service offerings encompass an extensive product roadmap that can be bundled within the LifeSteps Wallet platform and will also be offered as stand-alone options for credit unions.
MARKETING SOLUTIONS: TurboTax & GSTV Results
Turning to Marketing Solutions, CUSG, in conjunction with TurboTax, recently launched a free resource center full of informative material on how to assist members in the lead-up to and through tax season. This resource center includes white papers, credit union member–focused insights and articles, and a series of complimentary webinars. In the coming weeks and months, we’ll continue to add more resources to the site, so make sure to check back for member-driven research reports, helpful articles, webinars and other member resources. You can access the site at CUSolutionsGroup.com/TaxCenter.
In addition to updates with TurboTax resources, this past quarter, the Love My Credit Union Rewards program rolled out an enhanced offer for Sprint. Now, credit union members who switch to Sprint receive $100 cash rewards for both their first and second line – plus, lines three, four and five are free on Sprint’s Unlimited Basic Plan. That’s still in addition to a $100 annual loyalty reward and 25 percent off Sprint accessories in-store. In July, the Sprint program converted more than 33,000 new gross adds, which resulted in our best July performance program-to-date and exceeded our projected Q3 revenue by close to eight percent.
In other marketing activities, this past quarter, CUSG acquired MemberXP, the largest provider of direct credit union member feedback in the U.S. The acquisition of this company enhances our marketing solutions approach by providing actionable data to credit unions in their pursuit of brand distinction. MemberXP offers a host of resources designed to gather feedback on processes, products and employees, as well as uncover member journey experiences. We’ll have more details through the remainder of the year as our MCUL League Reps and national business consultants begin sharing MemberXP results with our member credit unions.
As many of you know, this October we collaborated with GSTV for the third consecutive year on a campaign for International Credit Union Day. October 11–17, fifteen-second “Open Your Eyes to a Credit Union” ads aired at more than 20,000 fuel retailers reaching over 44 million viewers across the country. Here in Michigan, ads were produced by CUSG’s own CUBE TV Studios, and aired at close to 1,200 gas retailers roughly 2.5 million times.
Finally, Save to Win has continued positive momentum for the second half of the year with eight credit unions joining the program in Q3 alone. Before these enrollments, the program had already exceeded 2019 projections, and as credit union members continue to recognize the program’s value, CUSG continues to drive more inquiries from ongoing webinars and partnerships with our sister leagues.
Throughout the year, we’ve seen steady demand for our pillar HR Performance products — Performance Pro, Compease and Planning Pro. In fact, since our acquisition and integration of TLC 360, Planning Pro has become one of our fastest growing applications. Credit unions are finding great value in the integrated payroll software and learning management solutions. Having key HR tools in one platform improves staff development and retention and can augment other HR efforts. Especially as we begin to see subtle shifts in the market, all of this empowers credit unions to retain top talent and remain strong. If your credit union could benefit from HR consulting or a more structured approach to talent management or compensation planning, please don’t hesitate to reach out.
STRATEGIC ADVISORY SOLUTIONS
Finally, as many of you may know, a collective of credit unions and other CUSOs purchased the credit union sector rights of AffirmX, a company that helps financial institutions manage governance, risk and compliance. Later, League InfoSight, a consortium of state credit union associations, agreed to sell its compliance management system, ComplySight, to the newly formed AffirmXCU. We’re now moving forward with the creation of a new risk management solution that will combine the best of both AffirmX and ComplySight. With this new entity — name to-be-determined — we aim to provide GRC solutions at affordable price points with great feature options for credit unions of all sizes. We’ll have more details in the coming weeks.
That’s it for the Q3 update. As always, if you have any questions about any of our solutions, or about how they can help you better serve your members, don’t hesitate to reach out to us.
Thanks again for joining us!