July 2024 ALERT by DefenseCreditUnionCouncil

Advocacy and Independence

DCUC is preparing for what lies ahead

ALERT

Strengthening the DCUC Footprint on Capital Hill

Laying the groundwork for our future advocacy roadmap

Honoring Our Roots and Serving Heroes

Your credit union’s commitment to military and veteran members

Consumer Criticism Puts Credit Unions in the Hot Seat

Now is the time for extra vigilance in Washington

CAPITAL

ALERT

DCUC is the trusted resource for credit unions on all military and veteran matters.

DCUC Latest Accomplishments

• Advocacy accomplishments include…*

• DCUC supported the Department of Veteran Affairs’ Temporary Local Variance for certain buyer-broker charges*

• DCUC voiced its support of Ranking Member Tim Scott (R-S.C.), Senator Bill Hagerty (R-Tenn.), and their colleagues on the Banking Committee for their introduction of the “Consumer Financial Protection Bureau (CFPB) Accountability Act.”

• DCUC successful in opposition to unrelated and harmful 2025 NDAA amendments

• DCUC provided its statement of support for Senator Ted Budd’s (R-NC) “Secure Payments Act of 2024”

• DCUC sent a letter to Senator Elizabeth Warren (D-MA) and House Representative Emanuel Cleaver (D-MO) reaffirming its opposition to the Community Reinvestment Act-like (CRA) language as proposed in Section 204 of the “American Housing and Economic Mobility Act of 2024.”

• DCUC sent a letter to the Honorable Cathy McMorris Rodgers, Chair, and the Honorable Frank Pallone, Ranking Member, of the House Committee on Energy and Commerce, expressing its concerns with the proposed “American Privacy Rights Act of 2024.”

• DCUC’s letter encouraged the Committee to reject any proposals that threaten credit union tax exemption

• DCUC proudly announced Andrews FCU, USAG Benelux, has been selected by the Department of the Army as the 2023 Army Distinguished Credit Union of the Year

• DCUC proudly announced Otero FCU, Holloman AFB, and Wright-Patt CU, Wright-Patterson AFB, have been by the Department of the Air Force as the 2023 Air Force Distinguished Credit Union of the Year

DCUC Happening Now

Continuing to oppose:

• Passage of Credit Card Competition Act (CCCA) in all “must pass legislation” in both houses of Congress*

• DCUC continuing to lead with the Military Banking Program Improvement Act of 2024*

• DCUC urging Congress to Preserve Credit Union Industry’s Tax Exemption: read more here!*

DCUC Upcoming Activities

• Secure your spot: DCUC’s 2024 Annual Conference: August 12–16 at the Vinoy Resort & Golf Club in Saint Petersburg, Florida!

• DCUC Members-only: Stay tuned for more details on DCUC’s upcoming Town Hall meeting on Monday, July 29 at 2:30 pm. ET and Thursday, August 1 at 2:30 p.m. ET.

• Save the Date: DCUC’s Mid-West Sub-Council Conference will be held from October 8–10, 2024, in Davenport, Iowa. Registration will open next month.

*see “Advocacy in Action” on page 6 for more details!

SERVING THOSE WHO SERVE OUR COUNTRY

BOARD OF DIRECTORS

Chairman

Jack Fallis

1st Vice Chairman

Maggie Sayer

2nd Vice Chairman

Frank Padak

Secretary

Ryan Ross

Treasurer Ron Aoki

Member

Jim Hayes

Member

Robin Larsen

COUNCIL STAFF

President/CEO

Anthony Hernandez

Chief Advocacy Officer

Jason Stverak

Vice President, Operations and Membership

Beth Merlo

Marketing Specialist

Christa Dittus

Communications Specialist

Haleigh Laverty

Director of Conferences and Events

Suzanne Low

Executive Assistant

Natalie Rogers

5 6 7 8 9

10 12 14 16 18 19

CEO UPDATE Advocacy and Independence

DCUC ADVOCACY IN ACTION Strengthening the DCUC Footprint on Capital Hill

VIEW FROM THE BOARD Honoring Our Roots and Serving Heroes

CAPITAL CORNER

Consumer Criticism Puts

Credit Unions in the Hot Seat

JULY IS MILITARY CONSUMER MONTH!

DCUC BOARD ELECTIONS

DCUC ANNUAL CONFERENCE

SPONSOR FEATURE FORUM Compression Blues for Split-Dollar Loan?

Provided by Risk Strategies/IZALE Financial Group

AWARDS & RECOGNITION

CREDIT UNION PEOPLE IN THE NEWS

CREDIT UNIONS IN THE NEWS

MEMBER NEWS

CEO UPDATE

Advocacy and Independence

Provided by Anthony Hernandez, DCUC President/CEO

As our nation marked its 248th Independence Day, many celebrated with barbeques, attended parades, and watched fireworks. I am always proud to witness flag displays, patriotic ads on TV and the internet, and of course, heartfelt social media posts. Particularly moving are the tributes to our veterans during these festivities.

However, another profound event occurred just a few days earlier. The Supreme Court reversed its landmark 1984 decision in Chevron v. Natural Resources Defense Council, which gave rise to the doctrine known as the “Chevron deference” doctrine. In doing so, America is now free from 40 years of administrative rule.

Is this newfound independence a positive change, or does it bring concerns? As with many questions, the best answer is the War College answer—it depends.

Over the past four decades, regulatory agencies have been allowed to interpret various statutes with little judicial remedy or oversight. As a result, unelected bureaucrats could impose varying rules, some stricter and some more lenient. Over time, these administrative guidelines became commonplace.

However, as the federal workforce retired, new administrative leaders started to reverse and re-interpret prior positions to serve their own purposes. DCUC has seen this with the DoD’s Financial Management Regulation and overseas banking rules such as the erosion of the “one bank and one credit union” policy and the contract’s requirement for federal deposit insurance.

Yet, these shifts are not consistent with the Administrative Procedures Act. Agencies have long operated knowing courts would uphold their decisions and interpretations under the “Chevron deference” doctrine. Therefore, changing the

laws through Congress has been challenging amid increasing legislative “gridlock.”

On the other hand, are we headed for administrative “chaos” because of this landmark decision? Consistency and precedent have their virtues, especially if one favors the status quo. Thus, this ruling may be unwelcome to some.

While legal challenges are likely on the horizon, the Administrative Procedures Act still provides a review of any sudden changes. Plus, there are still Congressional avenues that remain open. This just reaffirms how advocacy will play a crucial role in the aftermath of this landmark decision.

This advocacy must evolve from recent years. It will require) active listening to all points of views, swift coordination on all advocacy strategies, and a fierce defense of your interests. DCUC has already demonstrated its value as an independent voice and is actively positioning itself as a strong voice within the new industry landscape.

I am very proud of DCUC’s efforts in re-imagining our advocacy thus far. Just as inventiveness is born from necessity, recent industry shifts, challenges, and events over the last year have compelled DCUC to adapt and strengthen our representation on your behalf.

Much like the signers of the Declaration of Independence 248 years ago, we may not know exactly where the future regulatory environment will lead us. Yet, akin just to the spirit of 1776, we are prepared for whatever lies ahead.

I know DCUC stands ready, mainly because we have been preparing and perfecting our approach over the last 12 months. The best is yet to come. I look forward to sharing more at our Annual Conference next month. DCUC will have much to disclose and discuss. See you there! n

Anthony Hernandez, DCUC President/CEO

“Much like the signers of the Declaration of Independence

248 years ago, we may not know exactly where the future regulatory environment will lead us. Yet, akin just to the spirit of 1776, we are prepared for whatever lies ahead.

—— Anthony Hernandez, DCUC president/CEO

Strengthening the DCUC Footprint on Capital Hill

Provided by Jason Stverak, DCUC Chief Advocacy Officer (CAO)

We’re growing in terms of our footprint, not only in serving the interests of our members and defense credit unions but the entire industry as a whole. We’re increasing our MAC tempo with plans to hold more meetings and strengthen our advocacy for more success on behalf of our members. DCUC is already laying the groundwork for our future advocacy roadmap and ensuring the Council and its members are well-heard within the Capital.

Recent Action…

• DCUC supported the Department of Veteran Affairs’ Temporary Local Variance for Certain Buyer-Broker Charges: “DCUC commends the VA for making this important decision. This variance will provide deserving service members and veterans better opportunities to use their VA benefits when purchasing a home.”

This proposed legislation would enhance the CFPB’s accountability by mandating that its funding be subject to annual appropriation by Congress: “Implementing a standard congressional appropriations process for the CFPB will guarantee that the interests of consumers are consistently represented and safeguarded within the financial marketplace.”

• DCUC successful in opposition to unrelated 2025 NDAA amendments; since early May, DCUC has actively engaged with Congress on this concern, sharing the full perspective of the credit union industry while highlighting potential adverse impacts associated with the proposed amendments.

On June 21, DCUC and ACU sent a joint letter to The Honorable Jack Reed, Chairman, and The Honorable Roger Wicker, Ranking Member, of the Senate Armed Services Committee urging the committee reject any unrelated credit union amendments to the 2025 NDAA

• DCUC provided its statement of support of Senator Ted Budd's (R-NC) "Secure Payments Act of 2024: It’s important that credit unions are provided with accessible financial resources, especially in underserved communities nationwide. Recent months have highlighted how limitations on deb-

DCUC Chief Advocacy Officer

it interchange fees impact these resources, and consequentially, consumers’ financial security,” said Jason Stverak, DCUC Chief Advocacy Officer. “DCUC fully supports Senator Budd’s call for a study of the interchange fee cap because of these reasons.”

DCUC stated how credit unions were not originally included in the CRA when it was established in 1977 due to their history of meeting the needs of underserved communities.

“Other than data security, it is unclear whether credit unions already in compliance with these laws will be exposed to new lawsuits despite GLBA compliance,” stated Jason Stverak, DCUC Chief Advocacy Officer. “Additionally, we are concerned about the expansion scope and legal uncertainties that would arise from the adoption of the individual right of action proposed by the legislation.”

DCUC continued by emphasizing the need for clarity on whether the legislation will impose comparable data security standards on merchants as it does on financial institutions.

“Merchants have a larger role in safeguarding data as consumers have fewer opportunities to opt out when purchasing goods and services. Overall, the American Privacy Rights Act has the potential to create market uncertainty, particularly in educating consumers about their rights to opt out of data collection.”

Jason Stverak,

Happening Now…

• Continuing to oppose:

passage of Credit Card Competition Act (CCCA) in all “must pass legislation” in both houses of Congress*

• DCUC continuing to lead with the Military Banking Program Improvement Act of 2024*

• DCUC urging Congress to Preserve Credit Union Industry's Tax Exemption: read more here!

“Taxing credit unions would undermine their mission and greatly hinder their ability to serve military and veteran communities,

VIEW FROM THE BOARD

Honoring Our Roots and Serving Heroes

particularly in places where traditional banks have previously withdrawn,” said Hernandez. “Upholding the current credit tax exemption is essential to preserving service member access to financial services for our troops.”

Looking Ahead…

• DCUC sent a letter to Senators Charles Schumer and Mitch McConnell opposing Proposal for NDAA Study; Exploiting Our Nation’s Heroes and the Credit Card Competition Act (CCCA). n

Your Credit Union’s Commitment to Military and Veteran Members

Provided by Ryan Ross, DCUC Board Secretary, Air Force Representative, Soarion CU President, CEO

Following Independence Day, we’re provided an opportunity to reflect on the values of unity, service, and dedication that define our nation and how they carry into our credit unions’ mission. For Soarion CU, formerly known as Air Force FCU (AFFCU), these values are woven into our very fabric. Established at Lackland Air Force Base in 1952, we have a rich history of serving those who serve our country. Our commitment to military members, veterans, and their families remains as strong as ever, evident in our employment practices, financial services, and community partnerships.

Prioritizing hiring military spouses, veterans, and reservists allows us to provide meaningful employment and ensure our staff understands the specific needs and experiences of these important communities. Military spouses face frequent relocations, veterans bring invaluable skills, and reservists balance civilian jobs and military duties.

Actively partnering with base leadership is also another way your credit union can better serve the military, veterans, and their families. Cultivating a relationship with the installation leadership and military liaisons allows your credit union more opportunities to offer special services such as financial education events, which helps military personnel and their families build the knowledge and skills they need to make informed financial decisions. Soarion CU’s history on Lackland Air Force Base is the foundation of our approach to serving the military community. Our Financial Center on base offers tailored financial products and services that meet the unique needs of military members and their families, from low-interest loans to specialized savings plans.

Independence Day is a time to celebrate the freedoms we enjoy and the sense of community that binds us together. Foster-

ing camaraderie among our members is crucial to our mission as part of the credit union movement. We should all strive to continue creating an environment where members feel valued, understood, and supported. By understanding the unique challenges and opportunities faced by military families, our credit unions ensure that we are not just meeting these members’ important financial needs, but also contributing to their overall well-being through personalized service and community involvement.

The bond between your credit union and the military and veteran members you serve goes well beyond transactions and interest rates. It is a relationship built on trust, respect, and a shared commitment to the values that define the military community. This sense of camaraderie fosters an environment where members are not just customers but part of a supportive network.

By focusing on member-centric strategies, we ensure our services align with the real-life needs of our members, providing financial education, personalized financial advice, and opportunities for members to connect and support each other. As we honor our nation's independence, our credit unions can also honor the legacy of service that defines our history and future. n

Ryan Ross, DCUC Board Secretary

CAPITAL CORNER

Consumer Criticism Puts Credit Unions in the Hot Seat

Provided by John McKechnie, III

Thanks to a flurry of critical news coverage, the image of credit unions being a pro-consumer beacon is being questioned on Capitol Hill and in DC regulatory agencies. The question: is this a tectonic political shift, or temporary criticism that will dissipate in a short period of time.

It’s well known that Navy Federal Credit Union has been in the headlines, and now, for the first time in decades, Members of Congress are saying this is the time to consider putting new lend-ing requirements on credit unions. At a June House Financial Services Committee hearing with Consumer Financial Protection Bureau Director Rohit Chopra, Congressman Emanuel Cleaver (D-MO) raised the issue of alleged lending discrimination by Navy Federal Credit Union and asked for Chopra’s views on applying a “similar process to CRA that would be used in credit unions like Navy Federal.”

Two weeks later, at another Committee hearing, Congressman Steven Horsford (D-NV), Chairman of the Congressional Black Caucus, raised the Navy Federal issue in the context of legislation he is working on: “I led a letter demanding answers to reporting that… there were potentially discriminatory lending practices” at Navy Federal. Horsford noted that he and Rep. Cleaver are drafting legislation to unearth additional information about credit union lending practices.

Credit union overdraft protection fees are under scrutiny by DC think tanks and, in the media, adding another layer of complexity to the political landscape facing the industry. In a series of tweets by Brookings Institution financial services fellow Aaron Klein, he

has criticized what he terms “disproportionate” ODP fees by larger credit unions relative to those charged by banks.

Separately, in May several TV reports took aim at military credit unions for charging enlisted personnel excessive overdraft fees (without mentioning that, at $20 per occurrence the costs were still below financial industry averages). This bad press elicited a bipartisan letter from eight US Senate Banking Committee members in early June, spearheaded by Sen. Warren, that accused the credit union of “predatory overdraft practices.”

Taken together, these episodes point to a possible erosion of support for credit unions on Capitol Hill. In his exchange with CFPB Director Chopra, Rep. Cleaver, generally, a credit union ally over his 30-year career in Congress, said, “I’m very concerned about what's happening” on the credit union mortgage lending discrimination allegations.

A senior House Democratic staffer echoed the Congressman’s comments immediately following that hearing, noting that “there’s disappointment if not real anger about the charges being leveled at credit unions. Your image has been punctured,” while a Senate staffer who viewed the ODP tweets asked to be reminded “why exactly should credit unions receive special treatment when this happens.”

The next few months will be critical in determining how lasting and deep the damage is from these episodes. Legislation containing the CRA-like provisions for credit unions is unlikely to become law this Congress, although Senator Warren’s Senate sponsorship puts it in a category of extra concern given her prominent role in shaping financial services policy. Paralleling this could be ongoing regulatory restrictions on overdraft and other “junk” fees being contemplated by CFPB.

In other words, now is the time for extra vigilance in Washington, for the entire credit union system. n

John McKechnie, III, DCUC’s Strategic Partner

MILITARY CONSUMER MONTH

July is Military Consumer Month!

Helpful Resources for Your Military and Veteran Members

Provided by Federal Trade Commission (FTC)

Did you know July is Military Consumer Month?

The Federal Trade Commission (FTC) offers a free Military Consumer digital toolkit with helpful resources to educate military and veterans on important consumer information and practical financial tips.

The Military Consumer toolkit provides information on specific topics with suggested scripts and helpful links. All materials from both Military Consumer and the FTC are free to use on your channels!

Download or order free copies in bulk (with free shipping) of the FTC’s publications covering topics such as scams, privacy, credit, and more!

Join the conversation!

Throughout the month, the FTC will share content through social media and blog posts.

Show how your credit union is dedicated to serving your military and veteran members’ financial well-being!

• Share FTC’s MCM 2024 images and posts with the hashtag #MilConsumer2024

• Tag FTC in your posts by using @MilitaryConsumer on Facebook or @MilConsumer on X

Looking for more resources?

Connect with the Department of Defense Office of Financial Readiness at finred.usalearning.gov and the CFPB’s Office of Servicemember Affairs at consumerfinance.gov/consumer-tools/educator-tools/servicememembers

DCUC BOARD ELECTIONS

Jim Hayes

BIOGRAPHY

Jim Hayes serves as President & Chief Executive Officer (CEO) of State Department FCU (SDFCU) based in Alexandria, Virginia. Jim currently serves on the Credit Union Executive Society (CUES) Board of Directors as well as the ALM First Advisory Board and the Filene Advisory Board. Before SDFCU, Jim served as President/CEO of $50B State Employees’ CU (SECU), and $2.5B Andrews FCU. Jim has guided financially strong credit unions while prioritizing service to members living abroad, stationed at Embassies and military installations, and residing across the United States. Jim has a comprehensive financial services background with over 27 years of credit union management experience. He has also served as a Capital Markets Specialist and Corporate Examiner for the NCUA, a Federal Thrift Regulator for the Office of Thrift Supervision, and an auditor with Deloitte & Touche.

Jim enlisted and served in the U.S. Army Military Police Corps, has both a Bachelor’s and Master of Science degree, and completed the National Security Seminar, Army War College, and executive education at MIT and Stanford University.

STATEMENT OF INTEREST

Jim Hayes, Member, Marine Corps Representative, DCUC Board, President/CEO, State Department FCU

I have a strong passion for credit unions, whether they serve our military and veterans, diplomatic corps, or other sectors of our population. I believe DCUC epitomizes the core of what our industry stands for and should strive to achieve. As a former Army enlisted soldier stationed in Germany, I experienced first-hand the invaluable benefits credit unions provide to our overseas military communities, offering essential financial services and education. Today, leading a diplomatic credit union that serves Marines and Department of State employees worldwide brings me great honor. We carry an unwavering commitment to always act in the best interests of our members. Aligned with the core values of our industry, we aim to deliver exceptional service, competitive loan rates, and strong deposit rates. To do this, credit unions must maintain strong advocacy on behalf of our members, being the voice that honors our core values and the credit union difference. I would be deeply honored to serve on the DCUC Board, ensuring we uphold the highest standards of the credit union industry now and for years to come! n

Ryan Ross, Secretary, Air Force Representative, DCUC Board, President/CEO, Soarian CU

Ryan Ross

BIOGRAPHY

Ryan Ross, President/CEO of Soarion CU brings more than 16 years of experience in the credit union industry, specializing in serving military members, veterans, and their families throughout his career. Previously, Ryan served as the EVP at Pen Air CU located in Pensacola, FL (NAS Pensacola), and began his credit union journey at SAFE FCU in Sumter, SC (Shaw AFB).

Ryan has overseen the management of all areas from lending operations, finance and accounting, collections, and risk management. He has demonstrated strong leadership skills and has a proven track record of leading others in the development and execution of corporate visions, strategies, and goals.

Ryan holds a Bachelor of Arts from Saint Leo University–Saint Leo, FL, and a Master of Business Administration from the University of South Carolina.

STATEMENT OF INTEREST

I’m excited to announce my interest in running for another 3-year term representing the Air Force delegation on the DCUC Board of Directors. I look forward to working collaboratively with fellow board members and DCUC’s President/CEO, Anthony Hernandez, as we further enhance DCUC into one of the most esteemed resources for our member Credit Unions.

I believe my extensive experience and background in working with defense credit unions makes me a great candidate to continue in my role on the DCUC Board. Over the past three years, Tony, the board, and I have diligently addressed regulatory challenges and DoD issues. I know what it means to represent not only the Air Force delegation of members but all credit unions dedicated to serving our military and veterans. I am honored to have served in my role thus far and am committed to leveraging my experience to continue growing DCUC’s success on behalf of its members. n

DCUC BOARD ELECTIONS

Maggie Sayer

BIOGRAPHY

Maggie Sayer serves as President/CEO of Keys FCU. She has worked in the financial industry for more than twenty years, the last fifteen with the credit union where she also served the role of Information Technology Director. She holds two Bachelor of Arts degrees from Elon University and Master of Business Administrator (MBA) and Master of Science in Cybersecurity degrees.

She has accumulated several industry-specific certifications including Certified Information Security Auditor (CISA), Certified Ethical Hacker (CEH), and Certified Chief Information Security Officer (CCISO).

Ms. Sayer is an active member of the Key West Military Affairs Committee, the Marathon and Key West Chamber of Commerce, the Key West Business Guild, and the Marathon Business and Professional Women (BPW) club. Ms. Sayer was born and raised in the Florida Keys and, in addition to being a current Professor on base at Naval Air Station Key West for Saint Leo University, she coaches several youth sports and is a co-director of the acclaimed 7 Mile Bridge Run. Ms. Sayer was also awarded the Kay Gradick Woman of the Year award in 2016 in recognition of her community involvement.

STATEMENT OF INTEREST

I am proud of the advocacy efforts of the DCUC staff and Board to ensure the voice of defense credit unions is well-heard and understood. If given the opportunity to continue serving, I pledge to support and represent the interests of Navy and Coast Guard-affiliated credit unions, credit unions in the Southeast region, and smaller credit unions. Thank you for your support! n

Ron Aoki, Treasurer, Army Representative, DCUC Board, President/ CEO, Schofield FCU

Ron Aoki

BIOGRAPHY

Maggie Sayer, 1st Vice Chair, Navy/Coast Guard Representative, DCUC Board, President/CEO, Keys FCU

Ron Aoki serves as the President/CEO of Schofield FCU, bringing over 23 years of experience in the credit union industry. Prior to his tenure at Schofield FCU, Ron served as the CFO at Hawaii Law Enforcement FCU and as VP of Finance and Compliance at University of Hawaii FCU. His association memberships include the American Institute of Certified Public Accountants and the Hawaii Society of Certified Public Accountants. Ron earned his Bachelor of Business Administration in Accounting from the University of Hawaii at Manoa.

Beyond his professional accomplishments, Ron is a Certified Credit Union Financial Counselor deeply committed to furthering financial education. He volunteers in local schools and throughout the community, teaching about personal finance and career planning. Ron has been instrumental in developing partnerships to support the financial and training needs at Schofield Barracks and the surrounding community.

Although born and raised on the island of Guam, Ron has called Oahu home since moving to Hawaii over 30 years ago. He resides in Oahu with his wife and daughter and enjoys spending his leisure time on the golf course.

STATEMENT OF INTEREST

It would be an honor to continue serving on the Defense Credit Union Council (DCUC) Board of Directors as the Army Representative. I strongly believe that every member credit union, regardless of size, should have a voice in how DCUC will continue to serve and represent its members. The council has grown significantly in its representation of the defense credit union community, and it has been a privilege to witness DCUC’s remarkable progress in just a few short years.

If re-elected to the Board, I pledge to support DCUC’s advocacy initiatives, while advancing financial education, and solidifying the relationships within our military communities. n

Compression Blues for Split-Dollar Loan?

Provided by Risk Strategies/IZALE Financial Group

With an estimated 60%+ of current CEOs projected to retire in the next five years, attracting, retaining, and rewarding the next generation remains a critical task. A purposeful executive benefit plan may mean the difference between having an orderly succession or seeking a merger. One of the tools for executive benefits is Split-Dollar Loan or SDL.

Split-Dollar Loan is an executive benefit strategy that uses a permanent life insurance policy owned by the executive. The credit union pays the premiums, which are treated as a loan for income tax and accounting purposes.

Under final split-dollar tax regulations, the employer loan must bear interest at a “market rate,” which is generally the longterm Applicable Federal Rate (AFR) for the month in which the employer makes a loan. Split-Dollar Loan, therefore, relies on a spread between a reasonable policy projection rate and the AFR.

The rapid rise in interest rates has seen the AFR increase from 1.92% in February 2022 (before the Fed’s first increase) to 4.61% in July 2024. That is almost 270bps of increase in the AFR. Yet life insurance policy rates have not yet meaningfully increased—they will, life insurance rates are not designed to and have never moved at the same speed as the AFR. The resulting margin compression (sound familiar?) has added complexity to SDL design.

To accrue the full AFR on a small margin would require a significant loan, one that would either exceed the regulatory guidelines or cause the life insurance death benefit to exceed underwriting limits. This has led to modeling an employer loan rate that is purposely below the AFR. The interest that is not accrued at the AFR is deemed “below market interest income” (BMINT) and must be imputed as taxable income to the executive while the

loan remains outstanding. (Side note: when BMINT is part of SDL modeling, it’s vital to ensure the arrangement is “nonrecourse” and is repaid at death. Otherwise, there will be adverse accounting and tax consequences.)

To address the income tax impact from BMINT, most modeling has the employer providing a gross-up bonus before retirement. This adds expense to SDL models that did not exist two years ago. The tax gross-up is an element of current compensation, so the credit union should understand it’s projected impact on financials, as well as Form 990 for state-chartered credit unions.

After termination of employment, the continuing tax on BMINT is typically illustrated as being withdrawn from the policy. This adds risk to the executive, both in the potential for rising income tax rates and lower policy performance impacting the retirement benefit. It’s important to see the projected BMINT amounts to better understand that risk and use appropriate assumptions, especially as BMINT compounds in later years.

The added expense and risk underscores the importance of comparing SDL to other benefit tools, such as a 457(f) SERP or Restricted Executive Bonus Arrangement (REBA). Start by equalizing the economic benefits to the executive among those designs. That allows the focus to be the impact on the credit union’s financials.

• The long-term P&L impact of SDL is still considerably more favorable than other designs.

• However, the P&L advantage is a tradeoff for larger immediate cash used to establish SDL. Is an illiquid asset of the credit union a fair tradeoff?

While there is no one best way for every credit union to value their key people, you should evaluate all options and choose the one (or ones) that check the most boxes for YOU, not the vendor. We welcome the opportunity to share what we’ve learned from helping to design (or redesign) over 1,200 executive benefit plans since 1999.

About the authors:

Scott Richardson (Scott.Richardson@Risk-Strategies.com) is Managing Director, and Chris Richardson (CRichardson@Risk-Strategies.com) is Senior Consultant for Risk Strategies / IZALE Financial Group (www.izalefg.com). Risk Strategies is the 9th largest private insurance broker in the US, with over 5,000 employees and $1.5b in revenue. They serve over 250 financial institution clients with services from executive benefits to group benefits to management liability. n

Tower FCU Earns Great Place to Work® Certification— Six Years in a Row

Provided by Tower FCU

For the sixth consecutive year, Tower FCU has been named a “great workplace” by the independent analysts at Great Place to Work® (GPTW). Rick Stafford, Tower’s President/CEO, credits Tower’s exceptional team of employees and the credit

union’s service-driven, people-oriented culture as the reason for the recognition.

Employees gave Tower high marks for the credit union’s philanthropic work environment and commitment to giving back to the local community, most notably through the TowerCares Foundation, which helps active military, Veterans, and children in need.

“Helping our military heroes and children in need in our community has always been an important part of Tower’s culture,” said Stafford. “Our employees are ardent supporters of TowerCares and its mission to help those who sacrifice every day to protect our freedoms.”

Credit Union West Named a ‘Top Company to Work for in Arizona’ 12 Years in a Row

Provided by Credit Union West

Credit Union West has been recognized as a ‘Top Company to Work for in Arizona’ by Arizona Capitol Times and BestCompaniesAZ. This marks the 12th straight year the credit union has received the prestigious award based on employee survey results. The ‘Top Companies’ Award has recognized the state’s best employers since 2013.

“We’re honored to have been named a ‘Top Company to Work for in Arizona’ for 12 years in row,” said Karen Roch, President/CEO of Credit Union West. “We strive to create a workplace culture that begins with empathy and support for our employees so they can provide superior service to our members. We value the important employee feedback that this survey provides and continue to adapt our employee benefits to enhance their quality of life,” Roch said.

AWARDS AND RECOGNITION

BBB Midwest Plains Honors Cobalt CU with the Esteemed 2024 BBB Torch Award for Ethics

Provided by Cobalt CU

The Better Business Bureau (BBB) of the Midwest Plains has officially recognized Cobalt CU with the 2024 BBB Torch Award for Ethics. This is a prestigious acknowledgement highlighting the company’s commitment to integrity within the marketplace. As a local winner, Cobalt CU has been entered into the running for the International Torch Awards; results will be announced in the coming months.

“We are incredibly honored to receive the BBB Torch Award for Ethics. This prestigious recognition highlights our unwavering commitment to integrity and ethical practices in serving our members and community,” says Robin Larsen, Cobalt CU President/CEO. “Our dedication to upholding the highest standards of character, culture, and customer service reflects the core values that guide our organization every day. We are proud to be recognized and we will continue to strive for excellence in all that we do.”

Cobalt CU Receives Prestigious Juntos Avanzamos Designation

Provided by Cobalt CU

The Cobalt CU is proud to announce that it has been honored with the prestigious Juntos Avanzamos (Together We Advance) designation. This national recognition highlights our unwavering commitment to serving and empowering the Hispanic and immigrant communities by providing them with safe, affordable, and relevant financial services.

“The Juntos Avanzamos designation underscores our dedication to helping immigrants, regardless of their immigrant status, navigate the U.S. financial system and achieve financial independence,” said Robin Larsen, CEO/President of Cobalt CU. “We are deeply committed to making a meaningful impact in our community by employing bilingual and culturally competent staff and leadership, accepting alternative forms of identification, and treating all members with the utmost respect.”

“Cobalt CU is the first and only financial institution in Nebraska to receive this distinguished designation, positioning us uniquely in our dedication to our diverse communities. This accolade is a testament to our ongoing efforts to foster inclusivity and provide equitable financial opportunities for all. Our mission at Cobalt Credit Union has always been to empower our members and support our community’s growth and success,” said Larsen. “Receiving the Juntos Avanzamos designation is a significant milestone in our journey. It reaffirms our commitment to serving the Hispanic and immigrant communities with the respect, understanding, and comprehensive financial services they deserve.”

CHESAPEAKE, VA—ABNB FCU welcomes Victor Hall, MBA as its new SVP and Chief Experience Officer. Hall will report to Charles A. Mallon Jr., President/CEO of ABNB. Hall will oversee the Branch Services, Digital Member Services, Marketing, and Training departments at the credit union.

INDIANAPOLIS, IN—Financial Center FCU welcomes Laura Birkenbeul as VP of Talent Development & Training on the Employee Operations Team. Laura’s role is centered around supporting the Credit Union’s ongoing commitment to building a vibrant organizational culture focused on continuous learning and development.

LITTLE ROCK, AK—Arkansas FCU is proud to announce that Randy Williamson was recently appointed to the Arkansas Small Business and Technology Center (ASBTDC) State Advisory Board.

LITTLETON, MA—Hanscom FCU has hired Kathleen Murphy as its new SVP of Branch Banking. Murphy joins the organization with over 15 years of banking experience and will lead the strategic and operational plans for Hanscom FCU’s branch network.

LAUREL, MD—Tower FCU is pleased to announce the hiring of Susan Ralston as COO. Ralston brings over 30 years of leadership experience in the banking and financial industry and will oversee Tower’s Deposit Operations, Debit Card Operations, Fraud, Bank Secrecy Act Compliance, Business Continuity, and Facilities & Administrative Services department teams.

LOWVILLE, NY—AmeriCU CU is honored to announce the appointment of Ret. U.S. Army Sergeant Major Richard Foist as its new Lowville Financial Center Manager. Foist recently transitioned from United States Army after a successful military career of 23 years. He is responsible for managing daily financial center operations, ensuring exceptional member service, and supervising the Lowville team to meet their goals.

TYSONS, VA—The PenFed Foundation announces the appointment of Doug Doan and Pete Hilger to its Board of Directors. Doan is the founder and General Partner of the Hivers and Strivers Investment Fund and Hilger serves as the CEO of Allied Solutions.

TYSONS, VA—PenFed CU recently announced the retirement of SEVP Shashi Vohra following 44 successful years of service. Business leaders, friends and family celebrated Vohra’s achievements during a retirement party hosted by PenFed.

“One of the proudest moments of my career was when I helped establish the PenFed Foundation in 2001, volunteering as the Foundation’s first chief financial officer,” said Vohra. “I feel blessed to have been part of raising nearly $55 million for service members, veterans and their families. A meaningful career is not about dollars and cents; it’s about touching people’s lives. That legacy is more important than anything else I’ve accomplished in my 44 years at PenFed.

“Shashi has made an incredible impact and helped to build PenFed’s growth and success for over four decades,” said PenFed CU President/CEO and PenFed Foundation CEO James Schenck. “PenFed is stronger thanks to his relentless pursuit of lasting partnerships, his strategic leadership and steadfast focus on always taking perfect care of its members, employees, the institution’s safety & soundness and giving back to the communities in which PenFed employees live and work. Shashi has built a lasting legacy of being the ultimate dealmaker and building lasting partnerships with industry leaders that have spanned decades.”

PENSACOLA, FL—PenAir CU has expanded its membership eligibility to include residents of Escambia County, Alabama, and Houston County, Alabama.

PenFed CU Sponsors Beaches Habitat for Humanity Home for Veteran

Provided by PenFed CU

PenFed CU recently announced the sponsorship of a Beaches Habitat for Humanity home for a veteran. PenFed employees and community members will build the home for a local veteran in need of affordable housing as part of the 44-unit Atlantic Beach Florida New Mayport Road community.

“PenFed is proud to support Habitat for Humanity as a top sponsor to provide an affordable home for a veteran and their family,” said PenFed CU President/CEO and PenFed Foundation CEO James Schenck. “Everyone deserves a place to live, especially our nation’s heroes.”

The military and defense community are at PenFed’s core, and the credit union has previously funded construction and volunteered to build a home for a veteran in Washington D.C.

“Our employees are passionate about serving our members and supporting the Jacksonville community where we live and work,” said PenFed Credit Union EVP Residential and Commercial Real Estate /President Mortgage Banking Winston Wilkinson. “Beaches Habitat for Humanity’s work aligns with our mission to deliver financial value to help our members achieve their dreams.”

“Beaches Habitat for Humanity is excited to break ground on this new development and blessed to have PenFed Credit Union as a new partner,” said President & Chief Executive Officer Beaches Habitat for Humanity Steve Gilbert. “We are very grateful for PenFed’s strong support of our Veterans Build Home which is one of the first houses to be built in this community. PenFed is helping fund the construction of this home for a qualified, local veteran in need of affordable housing. Together we are serving those who served.”

Hanscom FCU Awards Scholarships to High School Seniors

Provided by Hanscom FCU

Hanscom FCU awarded seven graduating high school seniors—five credit union members and two students from local U.S. Air Force Junior ROTC units—with John F. Condon Memorial Scholarships of $1,500 each to assist with college expenses.

The John F. Condon Memorial Scholarship is named after a former Hanscom FCU board member who made a significant contribution to the credit union’s success during his 26 years of volunteerism. The award is based on academic record, extracurricular activities, and an essay.

This year’s member recipients are Madeleine Albert of Lewiston, ME; Madeleine Blandy of Arlington, MA; Nikos Koss of Wilmington, MA; Madalena Mola of Bedford, MA; and Jack Whitman of Westford, MA. The top graduates of the Lowell High School and Bedford/Billerica High School Air Force JROTC programs, Cadet Colonel Taw Taw Lay of Lowell, MA and Cadet Colonel Josie Donnelly of Bedford, MA, respectively, also received $1,500 scholarships.

Hanscom FCU also presented three additional outstanding Air Force JROTC members with the following awards: Cadet Lieutenant Colonel Darro Sieu of Billerica, MA, Color Guard Scholarship ($500); Cadet Lieutenant Colonel Jason Iraheta Ramirez of Lowell, MA, Honor Guard Award ($500); and Cadet Lieutenant Colonel Tombis Perez of Lowell, MA, Shoot for the Stars Award ($250).

Dover FCU Celebrates Military Appreciation Month with USO Support and Community Engagement

Provided by Dover FCU

Dover FCU (DFCU) is proud to announce its successful participation in Military Appreciation Month, demonstrating support for our service members and their families in partnership with the United Service Organization (USO).

In a show of solidarity and community spirit, Dover FCU hosted a USO food drive across all eight branch locations, inviting members to donate non-perishable food items. The drive resulted in a significant collection of supplies which will have a direct benefit on the troops and their loved ones.

Each Monday during the month of May was also transformed into ‘Military Monday’ at Dover Federal branches. These days included free giveaways and snacks as a token of appreciation for the military community. There was also a raffle of eight USA-themed Yeti coolers throughout the month for guest visiting a branch. This provided an opportunity for DFCU staff and members to express their gratitude and engage with service members in a meaningful way.

Highlighting the month’s activities, Dover FCU was a proud sponsor of the 2024 First State Air Show at Dover Air Force Base. The event, which showcased awe-inspiring aerial displays and various military performances, was the perfect opportunity to showcase our military’s prowess and dedication to detail.

“These efforts reflect our appreciation for the sacrifices made by our military members and their families,” said Debra Jewell, AVP of Marketing at Dover FCU. “We are honored to support the USO and contribute to the well-being of our heroes.”

Scott CU Community Foundation’s 16th Annual Golf Scramble Raises Over $74,000 for Local Programs

Provided by Scott CU

The Scott CU Community Foundation is pleased to announce the success of its 16th Annual Golf Scramble, held on May 17, 2024, at Stonewolf Golf Club in Fairview Heights, Illinois. The event brought together 136 participants and 25 volunteers. The day of friendly competition raised a total of $74,036.81 which will be reinvested into local communities.

“We are incredibly grateful for the overwhelming support we received from our presenting sponsor, FIS, as well as the local businesses who sponsored and donated auction items,” said Frank Padak, President/CEO of Scott CU and Board Member of the Scott CU Community Foundation. “The incredible generosity of our community members, sponsors, and volunteers will enable us to make a real difference in the lives of many individuals. Together, we are building a stronger and more vibrant future for our communities.”

The funds raised through this year's tournament will be distributed to various local organizations, empowering them to continue their vital missions and positively impact the lives of community members.

AllSouth Hosted Soldiers and Vets Charity Golf Tournament to Benefit the Fort Jackson-Palmetto State Chapter of AUSA

Provided by AllSouth FCU

AllSouth FCU hosted its annual Soldiers and Vets Charity Golf Tournament on Thursday, May 16, 2024, at Golden Hills Golf and Country Club in Lexington, South Carolina. Thanks to the generosity of the participants, sponsors, and donors, this year’s tournament raised $25,000 for the Fort Jackson-Palmetto State Chapter of the Association of the United States Army, AUSA.

Over 92 community supporters, veterans, and active military members played in this year’s golf tournament. The Soldiers and Vets Charity Golf Tournament offered a special “Sponsor a Soldier” sponsorship which allowed 22 veterans and active military members to play in the tournament at no cost to them.

“Supporting our military is part of our foundation, and giving back to the military and local organizations is a top priority for us. We value the contributions of the Fort Jackson-Palmetto State AUSA Chapter to the Midlands community and were honored to have them as the beneficiary of this year’s tournament,” said Connie Hernandez Vizitei, AllSouth FCU Chief Marketing and Training Officer.

SAFE FCU Awards

Over $27,000

in Scholarships to High School Seniors

Provided by SAFE FCU

Eleven budding college freshmen are sharing more than $27,000 in scholarship awards from SAFE FCU.

SAFE honored the high school seniors at a recent reception hosted at its Sumter headquarters. The students were recognized for their academic leadership, active participation in school activities, and service to their communities.

“SAFE Federal Credit Union and its Board of Directors are proud of these young individuals who have demonstrated excellence in their academics and beyond,” said President/CEO, Michael Baker. “SAFE is investing in the education of our future leaders and we look forward to all the great things these students will accomplish.”

All in CU Donates

$30,000 to Fort Novosel’s AER Fund

Provided by All In CU

All In CU donated $30,000 to Fort Novosel’s Army Emergency Relief (AER) Fund at the 2024 AER Campaign Closing Ceremony. Funds were primarily raised from All In Credit Union’s 33rd Annual Floyd Rodgers AER Golf Tournament held at Fort Rucker’s Silver Wings Golf Course. All proceeds from the golf tournament were donated to AER.

AER is the Army’s emergency financial assistance program dedicated to helping active and retired soldiers with unexpected vital needs.

Bobby Michael, All In CU President/CEO, commented “Because of our long-standing history with the soldiers of Fort Novosel, raising money for this important cause is one of our key events of the year and why we began this golf tournament more than three decades ago. We are pleased to see such an outpouring of support for AER and to know that All In Credit Union’s annual donation will provide funds during a critical time in a soldier’s life or the life of their family.”

Colonel John Miller, Fort Novosel Garrison Commander, (L) and Gary Williams, Fort Novosel Command Sargeant Major (R) accepting All In CU’s contribution toward the 2024 Fort Novosel AER Campaign from Bobby Michael, All In CU President/CEO and Lisa Hales, All In CU SVP of Member Experience. Photo provided by All In CU.

AmeriCU CU Acknowledges the Annual Success of Tribute Concert to the

Invaluable Contribution of Volunteers and Sponsors

Provided by AmeriCU CU

AmeriCU’s Salute to the Troops Tribute Concert celebrated its twelfth year as part of Fort Drum Family, Morale, Welfare and Recreation’s (FMWR) Mountainfest. The credit union brings forth this special event as a tribute and expression of gratitude to the brave Soldiers of the U.S. Army 10th Mountain Division, their families, and community, for their remarkable service and selfless sacrifices.

“It’s a wonderful opportunity to show our appreciation for our Soldiers and their families, and it is truly uplifting to witness everyone uniting to ensure the success of this event, said Tina Thornton, AVP of Financial Center Operations. “These concerts would not be possible without our committed volunteers and the generous support from our sponsors.”

AmeriCU is grateful to all volunteers for their contribution and hard work. Many who travel a great distance to show their support. AmeriCU was especially honored to have Scott Duszynski, Vice President of Member Engagement from The Armed Forces Financial Network, Rhonda Wilson, Senior Director Member Services from The Armed Forces Financial Network as well as Beth Merlo, Vice President at Defense Credit Union Council who attended and volunteered their time at this year’s concert.

AmeriCU has presented The Salute to the Troops Tribute Concert since 2011. The annual concert took place on Thursday, June 20 and this year’s event featured country music artist Billy Currington with special guest Conner Smith.

R.I.A. FCU Sponsors 59th Honor Flight, Celebrates Decades of Service to Military Personnel

Provided by R.I.A. FCU

R.I.A. FCU, a longstanding supporter of military personnel since 1935, is proud to announce its sponsorship of the 59th Honor Flight, held on April 23. This special event honored 80 veterans, offering them a memorable journey to Washington, D.C. to visit the monuments built in their honor.

R.I.A. FCU's roots trace back to Rock Island Arsenal, and over the years, the credit union has expanded its services to include Fort McCoy and communities across eastern Iowa, western Illinois, and the Tomah, Wisconsin area. The credit union’s unwavering commitment to active duty and veteran military personnel is a testament to its mission and values.

The 59th Honor Flight, sponsored by R.I.A. FCU, began early at 4:30 AM with a private charter from Quad City International Airport. The veterans, who served in WWII, Korea, and Vietnam, experienced a full day of visits to significant memorials including the Lincoln Memorial, the Vietnam Wall, the Korean War Memorial, the World War II Memorial, Arlington National Cemetery, the Women of Foreign Wars Memorial, the Marine Memorial of Iwo Jima, and the Air Force Memorial overlooking the Pentagon. The day concluded with a heartfelt welcome as hundreds gathered to thank the veterans upon their return.

“Supporting our veterans is a cornerstone of our mission at R.I.A. Federal Credit Union,” said Jim Watts, President/CEO of R.I.A. FCU. “We are honored to give back to those who have sacrificed so much for our country, and the Honor Flight is a meaningful way to show our gratitude and respect.”

Jake Ward, VP of Sales and Service at R.I.A. FCU and a board member of the Honor Flight of the Quad Cities, echoed these sentiments. “The Honor Flight is an extraordinary experience for our veterans, and it’s a privilege to be part of an organization that helps make this possible,” he said. “R.I.A.’s annual golf outing supporting the Honor Flight of the Quad Cities is just one of the many ways we raise funds to support these flights and ensure our veterans receive the recognition they deserve.”

This year’s R.I.A. Golf Outing, held on May 17th at Byron Hills Golf Course, saw an impressive turnout with 144 golfers participating. The event successfully raised $46,690, which will go directly towards funding future Honor Flights. Additionally, the Kids for Vets organization contributed to the event’s success by raising an extra $2,000 through a lemonade stand at the golf outing, showcasing the community’s heartfelt support for our veterans.