League of Southeastern Credit Unions & Affiliates
Director’s Resource League of Southeastern Credit Unions
April 2013 | Vol. 3, Issue No. 1
President’s Message It has been a busy first quarter in our two states. At the end of the quarter, the LSCU & Affiliates sent all of our member credit unions a 10-percent dues rebate. This is the first time that either state has been offered a dues rebate by the League. The checks were mailed at the end of March. You should have received yours by now. The dues rebate was made possible because of the good year the League and LEVERAGE, the League Service Corporation, had in 2012. When a credit union purchases a product through LEVERAGE, it has a direct correlation to the level and quality of services that we can provide to our members. The long-term sustainability of the League is clearly dependent on a strong and profitable LEVERAGE. Thank you for your affiliation with the League. Also during the quarter, we held our annual federal and state governmental affairs conferences (GAC). Turnout for the CUNA GAC was great with 147 Alabama and Florida credit union officials traveling to Washington, D.C. Participation for our State GACs in Montgomery and Tallahassee were below what we had hoped. It’s very important for credit unions to be engaged in our federal and state advocacy efforts if we want to move a proactive legislative and regulatory agenda forward. I also invite you to our Annual Convention and Exposition (AC&E), June 12-15, in Orlando. We have worked hard to put together an agenda that has many director’s education sessions, including a Director’s Roundtable. On page three we have provided some of the education sessions available this year. I hope you and the rest of your colleagues will join us in June.
Improving Board Decision-Making John Oesch, a senior lecturer and faculty at large at the University of Toronto’s Rotman School of Business, recently spoke at a CUES Symposium telling attendees that many boards take positions too early in the decision-making process and that it inhibits them from taking advantage of the expertise of everyone at the table. For example, if the board chair says what they think should be done, it may be intimidating for another director to say they disagree. Similarly, if the chair asks for each director to say what they think, and the first six to speak take a similar position, it may be difficult for the seventh director to go against the other six. He says that boards need wisdom on the table to help draw it out of those that have it. Oesch listed five steps to leading change in board decision-making: 1. Create criteria. Find out what is in the best interest of the organization, rather than having individual directors take sides (also known as positions). 2. Share information. Get all the experience at the table on the table. Ask for additional information as well.Generate three to five feasible, beneficial alternatives. Try not to eliminate good ones early on to keep things over-simple. (continued on page 2)
Save the Date BSA Training May 24, 2013 Tuesday Birmingham, AL Click here for more information CU Philosophy in Action Workshop May 14-15, 2013 Tuesday-Wednesday Birmingham, AL Click here for more information Annual Convention & Exposition June 12-14, 2013 Wednesday-Friday Orlando, FL Click here for more information
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3. Evaluate the alternatives with your criteria. 4. Take your time to re-evaluate (last chance!). Oesch says, “Rather than using our title, knowledge, skills or power to lead our position to a win, we should persuade our boards to adopt a better process.” The huge benefit of doing this is that it takes advantage of the diverse thinking and expertise of board members and creates buy-in at the same time. Find more on board thinking at www.cumanagement.org.
NCUA Exams Top Priority in 2013 The NCUA is making supervisory performance a top priority this year. NCUA Chairman Debbie Matz is telling credit unions that the NCUA is looking for the regulator and credit unions to improve the capacity for operational risk, balance sheet risk and risk in less established products like a student loan. The NCUA is also looking at 13 regulations this year to see if they need to be updated. The list includes CUSOs, Fair Credit Reporting, Member Business Lending and Accuracy of Advertising and Notice of Insured Status. “Credit unions and the products they offer continue to evolve, and effective regulation keeps pace with a changing industry,” sid Matz. “We review one-third of NCUA’s regulations each year to make sure our standards are timely and appropriate.”
“Unite for Good” For the past year, CUNA, state leagues, credit unions, and system partners have been working together to form a long-term, shared vision. During the CUNA GAC CUNA President/CEO Bill Cheney presented the vision, “Unite for Good.” It plays on the shared values of all credit unions. It is not an overall brand for the credit union movement, and it is not a paid media campaign for credit unions. “Unite for Good” is about bringing a vision together based on the shared values credit unions have and using it to guide the movement. The goal of the campaign is broken into three main objectives: remove legislative and regulatory barriers, raise consumer awareness of credit unions, and foster service excellence throughout the movement. To make this work, all 7,100 credit unions need to be on the same page, moving toward a common set of goals. More can be achieved if 7,100 credit unions tell the same story. This will have a greater impact on the media, consumers, as well as state and federal policymakers. CUNA has set up a “Unite for Good” website at www. uniteforgood.org. It contains more information and some in-depth materials that CUNA has produced. The League and CUNA will roll out more information in the second quarter. Bill Cheney will speak at the AC&E in June and “Unite for Good” will be part of his presentation.
Credit unions have until Aug. 5 to submit a comment on the 13 regulations that are under review. Click here to see the full list of regulations being reviewed.
Bill Filed to Update AL State CU Act On April 3, HB 500, sponsored by Rep. Greg Wren (R-Montgomery), was filed in the Alabama House of Representatives. The bill is designed to update the Alabama Credit Union Act. Most of the changes are technical in nature and non-controversial to the banking and finance industry. This is an important bill to help innovate legislation within the Alabama Credit Union Act. The LSCU, affiliated credit unions, and the Alabama Credit Union Administration have been collaborating for the past year to form legislation that will update the Alabama Credit Union Act. This legislation will now resemble the model credit union act, as well as credit union acts in other states. A public hearing for HB 500 was heard in the House Financial Services Committee, which is chaired by Rep. Steve Clouse (R-Ozark), on April 10. The bill is now on the agenda for the next committee meeting where a vote is expected.
City County CU of Ft. Lauderdale Director Mack MacVicar (right) talks with Rep. Kevin Radar (D-Boca Raton) at the Florida State GAC on March 19. Rep. Radar, staunchly against public deposits, said he was open to hearing more about the issue after speaking with MacVicar.
Three Ways for Boards to Approach Thinking Credit union boards would benefit from approaching decision making from three key areas:
1. Fiduciary thought is board thinking concerned primarily with oversight matters and the stewardship of tangible assets. Typical questions pertain to compliance, legal matters, risk mitigation, performance evaluation, and accountability 2.
Strategic thought is board thinking in strategic or “constructive partnership” with management to visualize, plan and bring into existence the future of an organization. Strategic thinking ought not be an overly “formal, analytical or technical process.” Indeed, its suggested that “leaders can arrive at strategy another way: through insight, intuition and improvisation.” Generative thought is board thinking that helps to “frame” or “make sense” of the most critical questions or problems facing an organization. The former CEO of Herman Miller, Max DePree, often remarked, “The first responsibility of the leader is to define reality.” Generative questions sometimes operate at a very conscious level, such as “What is the purpose of a credit union?” Often, important generative questions are more subtle and exist at the level of unconscious assumptions, emotions or values that need to be brought to light to fully understand the context and direction of an organization.
The next time there is a major decision for your board, think which of these three areas of thought best applies.
Find more on board thinking at www.cumanagement.org.
2013 AC&E Offers Directorfocused Education Sessions The AC&E, June 12-14, in Orlando, FL, offers a number of breakout sessions designed specifically for credit union directors. Those sessions include: Director’s Institute: • Duties and Responsibilities • Building a Better Board • Director as a CU Advocate Director’s Roundtable
Family Savings CU Director Ronnie Reed (right) and board Chairman Pat Williamson (center) spend some time with Rep. Richard Lindsay (D-Gadsden) at the Alabama State GAC lawmaker reception on April 9.
Mobile Use Growing Rapidly Credit unions that do not currently have plans to utilize mobile banking should rethink that strategy. Smartphone use is growing by double digit margins. The FDIC says that 60 percent of consumers say they would switch financial institutions because they offer mobile banking. Bain & Co. surveyed smartphone and tablet users and found that 32 percent used mobile banking in 2012; an 11-percent jump from 2011. While many in the 20 to 30 age-range used mobile banking, the 36 to 45 age range is growing. In 2012, 38 percent indicated they used mobile banking. This is a 16-percent jump from 2011. Gartner Research indicates that smartphone and tablet global sales will be 2.4 billion this year. Credit unions need to have a mobile strategy to be able to offer members the convenience that fits their lifestyle.
Smartphone and Tablet Mobile Banking Use in 2012
38% Users ages 36 to 45
Breakout Education Sessions: • • • •
32% Total users in 2012
CU Strategic Planning Future of Payments & Tech Trends In School Branches Roundtable Healthcare Strategies for Credit Unions source: Bain & Co. U.S. surveys
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