Priority Report — September 2019

Welcome to the September edition of the MCUL and CUSG Priority Report. 

I hope that you and your family enjoyed a wonderful summer. At MCUL and CUSG, we are energized for a busy fall season. This month, both MCUL and CUSG will be meeting with our boards for strategic planning for 2020. Every year, our management team looks forward to meeting with our boards to talk about our accomplishments in the previous year, as well as lay out our priorities and objectives for the coming months. These sessions are immediately followed by our Executive Summit at Bay Harbor and Fall Leadership Development Conference in Traverse City.

With both our state and federal lawmakers back from summer recess, we’re in full swing with meet and greets. Meeting up with our lawmakers at credit unions or their offices in Lansing and D.C. is especially critical going in to 2020. Your engagement is necessary to continue to promote credit unions and our not-for-profit tax status. 

We hope you join us for Captial Day in Lansing and our Hike the Hill trip to D.C. in October. Bankers are currently, and aggressively, targeting our tax status. Please consider joining us as we meet with legislators to remind them of the credit union difference. And going forward, consider making advocacy engagement a priority in 2020. Hand-in-hand with our legislative meetings, we’re raising dollars for our PAC and ASFM funds. There are various opportunities to support these efforts; find out more details on our website.

At the federal level this fall, our focus is on a safe harbor for cannabis banking, monitoring suggested reforms to the Bank Secrecy Act and supporting a delay on the implementation of CECL. On the state side, we’re working with lawmakers on identity theft issues as well as working with the Attorney General on their elder abuse task force to ensure any regulations connect with what credit unions already do to protect their elder members. But we also want to ensure that the resulting law doesn’t place too much of a burden on the front-line credit union staff. 

Last month, our Michigan credit union community had a victory on the frivolous ADA website lawsuits. Two of our Michigan credit unions, Aeroquip and Belle River Community Credit Union, were targeted by aggressive plaintiff lawyers who brought frivolous lawsuits on behalf of a plaintiff who did not even qualify for membership. The Sixth Circuit reversed a Michigan court’s refusal to dismiss the cases. MCUL, along with CUNA, filed a brief with the Court in support of the credit unions. You can read more about the victory on our website. 

I’m also happy to share with you some updates on our Awareness Campaign, with the launch of new creative last month, as well as the Michigan Credit Union Foundation and upcoming education events.

On the CUSG side, we have plenty of new and exciting announcements, including developments with ComplySight and AffirmX and our recent acquisition of MemberXP.

FEDERAL ADVOCACY AGENDA: CECL and Election Forecast
During Congress’ recent break, MCUL and local credit unions had an opportunity to attend in-district events for Congressmen Jack Bergman, John Moolenaar and Tim Walberg and host in-district meet and greets with Congressman Dan Kildee, along with Congresswomen Debbie Dingell, Haley Stevens and Rashida Tlaib. We are also looking forward to attending upcoming events with Congressman Bill Huizenga.

In July, MCUL sent a letter to the Michigan congressional delegation highlighting the negative impact the CECL rule would have on credit unions. The letter urges our delegation to support existing legislation that would require a meaningful and thorough study of the rule and delay its implementation while the study is being conducted. We are in the process of following up with each of the offices to answer any remaining questions they may have on the issue and to get an understanding of where each member stands on the legislation.

This fall, we anticipate the U.S. House of Representatives will bring to the floor and pass a number of bills that benefit credit unions and credit union members. The bills include, but are not limited to the following:

• The SAFE Banking Act which would provide financial institutions with a safe harbor to bank legitimate cannabis businesses in states where it’s legal. 
• Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) reforms which would, among other things, index the currency transaction report (CTR) threshold for inflation and require a study on a modified SARs form. 
• Legislation to reauthorize the National Flood Insurance Program. The legislation will provide Congress with an opportunity to reduce the complexity of the program and shore it up financially. 
• Legislation aimed at curbing robocalls while still allowing legitimate businesses and organizations like credit unions to contact their members and customers when needed. 

Should the House pass the BSA reform, National Flood Insurance Program and robocall bills, we could see the U.S. Senate take action on those issues yet this fall. However, we don’t know what kind of reception the SAFE Banking Act will receive in the Senate, if, as expected, the House passes the bill this fall. 

We’re still over a year away from the November 2020 general election, but it’s worth mentioning some interesting developments among races in Michigan. Incumbent U.S. Senator Gary Peters will likely face off with Republican candidate John James. Mr. James had previously run against Senator Debbie Stabenow in the 2018 U.S. Senate race, losing by nearly 7%. Many view that result as better than expected, leading some to believe he could pose a serious challenge to Peters next November. In the U.S. House, Congressman Justin Amash left the Republican Party in July to become an Independent member of the House. His decision will create challenges in his re-election effort as he’ll be without a major political party designation on the 2020 ballot. Finally, Congressman Paul Mitchell has indicated he will not seek re-election in 2020. The Congressman has been a friend to credit unions and recently indicated that he’d vote in support of the SAFE Banking Act. 

As mentioned in the previous priority report we’re in the process of putting together the agenda for our annual trip to D.C. for October’s Hike the Hill. Among the potential topics of discussion are cannabis banking, CECL implementation, data security and much more. This event provides a great low-cost opportunity for credit union leaders to meet with members of the congressional delegation to advocate for our industry’s priorities. Registration and details about the hotel room block are available on our website.

And, if you want to learn more or have questions about CECL, be sure to register for MCUL’s Executive Summit and Fall Leadership Conference.

STATE ADVOCACY AGENDA: Data Breach, Financial Elder Abuse and Uniform Assignment of Rents
The legislature has returned from summer recess and is working towards wrapping up a fiscal year 2020 budget prior to the Oct. 1 deadline. The second largest issue to be addressed early this fall is additional funding for roads in the state of Michigan. The legislature has some creative ideas for increasing funding without creating a 45-cent gas tax as proposed by the Governor.

Data breach legislation introduced by Representative Diana Farrington continues to wait for a hearing in House Ways and Means. Senator Lana Theis has received back draft legislation to help modernize the Identity Theft Protection Act, which currently governs how data breaches are handled in the state of Michigan. This is a great step forward for credit unions as the changes that are being proposed would also require that merchants, upon having a breach, follow the timelines that are set forth in their contracts with card companies in terms of providing notification. The legislation is still in the drafting stage but we are optimistic that it will help move the needle forward.

Our team has been working directly with the Attorney General’s office to address the growing issue pertaining to financial exploitation/abuse of elders. Through a series of task force meetings and workgroups with the Attorney General’s office and other interested parties, we have worked to ensure that vulnerable adults have the tools and resources in place when they are financially exploited or abused. Legislation has been introduced to address this issue by Senator Peter Lucido and was referred to the Senate Banking and Insurance committee. Our team, in conjunction with the Senator and the MBA, believe that this legislation is a good compromise to protect vulnerable and elderly adults without being overly burdensome on financial institutions. 

Uniform Assignment of Rents legislation has been drafted and is set to be introduced by Representative Brandt Iden shortly. The legislation will provide a greater framework for how rents are assigned should a commercial borrower default on their loan with the financial institution. Providing greater safeguards in case contracts do not cover how these types of situations are to be handled. The current draft of the legislation provides that in the event of default and foreclosure on a commercial property with renters, the credit union will automatically be assigned the right to collection of rental income.

REGULATORY COMPLIANCE: A Three-legged Stool
Moving onto regulatory, with planning season approaching, it’s important that credit unions are placing compliance on the top of their list of priorities.When doing so, it’s helpful to think of regulatory compliance as a three-legged stool comprised of advocacy, information and implementation tools. Each area needs to be addressed.

MCUL recently put together a Compliance Committee that will ensure advocacy and information are discussed and developed among the Michigan credit union community on a quarterly basis. Last month, CASE Credit Union hosted the first meeting, which brought together fifty credit union compliance and regulatory professionals from across the state. Attendees were given a platform to discuss cannabis banking and receive an update from Dykema law firm. We would love to hear feedback from attendees and world also welcome suggestions for speakers and topics for the next meeting.

The third leg, implementation tools, can best be addressed with products like CUSG’s software solution ComplySight and risk management system AffirmX — both of which I’ll talk a bit more about later on. For more information on how to properly prioritize regulatory compliance, check out the latest issue of my column CEO Connect on CUInsight.com.

CONSUMER AWARENESS: Additional Creative
Last month, we launched additional creative for Michigan’s “Open Your Eyes to a Credit Union" campaign. This completes the Michigan-specific messaging around convenience, mobile technology, service diversity/sophistication and community commitment. You can view all 13 digital videos including the newest material on the League’s website. I hope you’re taking advantage of the wide variety integration materials as well. It has been encouraging to see credit unions adding your brand to the material and integrating with the campaign.

Our upcoming annual consumer research, in conjunction with CUNA, will help to determine if we are moving the needle in the most critical areas. MCUL is also conducting surveys to gain your feedback on the campaign. Your opinion is very important to us and how we develop this campaign.

The long-term success of cooperative advertising we have enjoyed in Michigan for many years is a direct result of your participation. CU Link success comes from your contributions, including feedback, involvement on the CU Difference Committee, financial contributions - especially at the full fair share level - and integration of the campaign with your credit union’s brand.

Please reach out to me directly or to the CU Link team if you have any questions. 

MCUF: Financial Reality Fair App
With the new school year here, the Michigan Credit Union Foundation now has a Financial Reality Fair app ready for downloading. The app is built to enhance the student experience during these interactive fairs designed to better prepare students for the financial reality of adulthood.

Last month, more than 20 credit union financial educators gathered for the “Financial Education Connection” (FEC) meeting to learn about statewide initiatives, share best practices and network. The new Financial Reality Fair App was demonstrated at this meeting.

Credit union fair facilitators will be able to use this new app to track and analyze spending on mobile devices or tablets. Already this year, MCUF Financial Reality Fair materials have been utilized by credit unions to facilitate 47 fairs reaching 3,871 students.

As you get a chance to check out the new app, please contact MCUF Executive Director Beth Troost to provide feedback on your experience. We look forward to hearing from you.

EDUCATION: Intentional CU Leadership
We continue to hear credit unions express a need to build leadership skills. Several years ago, MCUL responded to these requests with the introduction of Intentional CU Leadership, an active training event that throws out the idea that conferences must be full of passive listening. This event brings together a mix of talented leadership experts to help staff from every department, in every role, learn to lead with intention.

New topics, speakers and attendees combine to create a new experience for credit union leaders who strive to be the best they can be. And because many of you have committed to returning to this event in order to refine your skills, MCUL is proud to present third-year attendees with a recognition award for their ongoing commitment and achievements.

The credit union movement needs professionals throughout the industry who maintain a competitive edge and who are considered mentors and leaders by being purposeful in all they do. We hope you will gather your colleagues and together participate in this important opportunity to develop yourselves as intentional CU leaders.

Additionally, be sure to check out the education portal of our website for more information on the remaining 2019 events including the Lending School, Contact Center Conference and the Telephone Collections School.

CU SOLUTIONS GROUP

MARKETING SOLUTIONS: Love My Credit Union Rewards, MemberXP and International Credit Union Day
Now for an update on CU Solutions Group. We’re continuing to expand the value-saving offerings of the Love My Credit Union Rewards program. Our Marketing Solutions team recently signed new partners to the program that will allow credit unions to offer members discounts on Walt Disney park tickets, rental cars, sporting and concert events; discount ATV, boat and RV sales; and discounts on auto repair and maintenance services. We plan to launch these deals on the new LMCUR web application very soon.

CUSG also recently acquired MemberXP to help credit unions create brand-defining member experiences through “voice of member” feedback collection and a powerful, industry-specific analytics platform. This delivers a deeper understanding of credit union membership and their needs. In retail banking, an engaged customer is worth at least $9,500 more a year in income than an unengaged customer, and a 5% boost in member retention can increase income by as much as 95% in some studies. MemberXP is a powerful resource for more than 100 credit unions, and we’re excited to grow that number as we complete its transition to the CUSG line of solutions.

Also on the horizon is International Credit Union Day in October. CUSG Marketing Solutions and GSTV, in conjunction with CUNA, will expand this opportunity for exposure by teaming up to launch an advertising campaign featuring the Open Your Eyes commercial series. This year will be bigger than ever with close to $3 million in national advertising for 44 million impressions across every gas station in America for a full week. We encourage credit unions to leverage this massive amount of credit union awareness advertising by purchasing and running their own concurrent GSTV promotion. And of course, if your credit union has yet to spend its CU Link matching funds, this is a great opportunity to do so.

TECHNOLOGY SOLUTIONS: Access Softek and myCUID, Performance Pro and TLC 360
While Marketing is reaching potential members through smart tech like GSTV, our Technology division is tapping into members’ desires for uncomplicated and easily accessible ways of investing in their futures via the tech they’re already using. Harnessing the popularity and ease-of-use of robo-investing, Technology Solutions is completing due diligence and review of two new product lines: a white-labeled robo-investment platform from Folio and a robo-investing solution from Access Softek and myCUID, part of our partnership with CU Ledger. We’ll have more on this in the months to come as we fine-tune delivery for credit unions and their members.

In the Performance Solutions division, Performance Pro recently underwent a major user-interface update, bringing it in line with Compease and Planning Pro. The focus for Performance Pro continues to be on integrations with partner software products ⁠— like payroll software and learning management solutions. This, of course, creates a more seamless experience for our clients and enables smarter and faster planning and execution.

We’re also working toward Performance Pro integration with TLC 360 – our full-featured training solution that provides learners with more than 100 credit union courses and exams As a stand-alone app, or integrated with Performance Pro, TLC 360 supports employee learning and development needs -- including regulatory and compliance training. Combining an integrated learning management system with an extensive library of courses, the application is built to maximize the training investment in a credit union’s most important resource — its employees.

STRATEGIC ADVISORY SERVICES: EmpowerFi and AffirmXCU
CUSG’s Strategic Advisory Services team is working with partner EmpowerFi to record several marketing-focused webinars to host on our eAdvisory site. Once developed, eight modules will be available for purchase, including content on strategy-infused marketing, how to transition from traditional to digital marketing and achieving authenticity in branding and advertising.

And finally, as many of you know, League InfoSight has agreed to sell its compliance management system, ComplySight, to AffirmXCU. These solutions enable credit unions to prioritize risk management tasks and remediation by utilizing relevant and timely data to improve performance throughout the enterprise.

As the competitive environment changes and credit union governance, risk and compliance needs become more complex, the need for collaboration becomes more and more important.This new alliance takes our commitment to compliance, governance and risk needs to a much higher level and delivers first-rate GRC solutions to credit unions in Michigan and beyond.

That’s it for this quarter’s report. Thank you for your support for MCUL. Together we’re stronger and we show the power of association with the MCUL and CUNA as we advance this wonderful credit union movement. Together we truly make an impact in people’s lives.

Thank you once again for joining us!