Director’s Resource League of Southeastern Credit Unions
June 2012 | Vol. 2, Issue No. 2
President’s Message Earlier this month, I enjoyed visiting with many of our credit union board directors at the 3rd LSCU Annual Convention and Exposition (AC&E) in Orlando. I was happy so many volunteers attended. We have worked hard to enrich the experience for credit union directors at LSCU signature events such as the AC&E, Supervisory Conference, and the Leadership Development Conference. New this year at the AC&E was a track designed specifically for directors. We had 20 educational opportunities and each daily time slot had one session that equipped directors to better serve their credit union. Those topics included Building a Better Board, The Director’s Guide to Political Advocacy, Sustainable Growth, and Technology Trends. This was on top of the four Director’s Institute sessions that were offered at the start of the AC&E. Most of our sessions were overflowing. The theme of the AC&E this year was “The Power of One. One Vision. One Voice.” The take away I hope directors brought back to their credit union was how we all need to continue to work together. It’s imperative that not only credit union CEOs and staff take part in advocacy, but also credit union boards. NCUA Chairman Debbie Matz reiterated that sentiment when she spoke at the Annual Business Meeting. The Power of One is credit unions, chapters, the LSCU and CUNA working side-by-side on the issues that matter most to us. We can move our industry forward, but it will take a collective effort. Enjoy this edition of the Director’s Resource.
AC&E, Rich Experience for Directors The 3rd LSCU Annual Convention and Exposition (AC&E) carried the theme, “The Power of One. One Vision. One Voice.” For three days, more than 1,000 attendees were immersed in how credit unions can work closer together to achieve many goals, including a greater presence with lawmakers and reaching more consumers. The AC&E provided directors with many educational opportunities. The Director’s Institute provided VAP courses covering risk assessment; director’s liability; recruiting, orienting, and retaining board members; and understanding regulations. A “track” of educational sessions was built specifically with directors in mind. Regarding the session “Building a Better Board,” one attendee said, “The information is so important for all board members and will help us to do some fine tuning of our board members.” A second “Building a Better Board” session was quickly added to accommodate the overflow crowd. During the LSCU Annual Business Meeting, LSCU President/CEO Patrick La Pine challenged credit unions to partner with the League, especially on advocacy topics. He compared credit unions to a fourlegged stool: credit unions, chapters, leagues, and CUNA all need to work together to hold the movement up and move it forward. LSCU Chairman Joe McGee stated, that as a movement, all credit union staff and board members need to reach out to build and maintain relationships with legislators. continued on page 2
Save the Date 2012 Southeast Director’s Conference July 15-18, 2012 Sunday - Wednesday Sheraton Norfolk Waterside Hotel - Norfolk, VA Click here for more information Bank Secrecy Act Training Workshop July 25, 2012 Wednesday Tuscaloosa, AL Click here for more information 2012 Supervisory Committee Conference Aug. 5-8, 2012 Sunday- Wednesday Destin, FL Click here for more information
AC&E, Rich Experience (continued)
NCUA Chairman Debbie Matz spoke during the annual meeting and said credit unions are improving. She said that Alabama credit unions are beating the national average in nearly every category. Matz implored credit unions to invest in technology for Gen Y. The average age of those seeking a loan is in the 25 to 44 age range, while the average age of a credit union member is 47. WOCCU President/CEO Dr. Brian Branch and CUES President/CEO Fred Johnson also spoke.
Each quarter the Director’s Resource will feature a volunteer or volunteers talking about serving on a board of directors, the role of the board, or a hot credit union issue. In this edition, the League caought up with Army Aviation FCU Chair Charlie Mingus, and Space Coast CU Vice Chair Martha Frazier.
Game Change, the New York Times best seller and HBO movie, authors Mark Halperin and John Heilemann gave the keynote address during Friday’s Closing General Session. Halperin and Heilemann took credit unions inside the 2012 elections and gave a great overview of the strengths and weaknesses of Pres. Obama and Republican rival Mitt Romney. The LSCU awards were presented after the keynote address with Space Coast Credit Union volunteer Martha Frasier receiving the 2012 LSCU Volunteer of the Year Award. Frasier has been a volunteer for Space Coast for 26 years.
Army Aviation Center FCU is a $1 billion credit union based in Daleville, AL. Army Aviation just surpassed $1 billion in assets in 2011. At the June AC&E, Army Aviation was awarded the Credit Union of the Year in the $500 million and above category.
The LSCU Exhibit Hall provided directors access to nearly 130 exhibitors. They were able to inquire and network with top industry vendors about products and services that make sense for their credit unions. The Silent Auction concluded during Friday night’s Dinner and Entertainment. Eleven-year-old piano prodigy Ethan Bortnick brought the house down with two 20 minutes sets that had the crowd up and dancing. Ethan gave away two of his DVDs and two tickets to a concert this summer while also auctioning off a custom message.
Charlie Mingus, Army Aviation Center FCU chair
Q: How has Army Aviation Center FCU achieved a 5-star rating from Bauer Financial for 15 straight years? “I think the ability to sustain this rating starts from the top down. It begins with our President/CEO Jim Mitchell. We have a great staff and have been fortunate to be able to hire and train good people. We also watch expenses, manage our cost of funds, and re-negotiate our contracts when they are up for renewal. We strive to be good stewards of our members’ money.”
The 2013 AC&E will be June 12-15, 2013 at the JW Marriott, Orlando.
Martha Frazier, Space Coast CU vice chair
LSCU Action Center an Important Resource for Credit Union Boards
2012 marks Martha Frasier’s fifty-third year of involvement with Space Coast Credit Union. She presently serves as vice chair of the credit union’s board, on which she’s been a member for 26 years, serving as chair one year, treasurer for 11 years, and secretary several years.
As election season moves closer, and preparation heightens for the 2013 Legislative Session, grassroots continues to be a major priority for the League. The Governmental Affairs team recently unveiled its grassroots and PAC management tool.
Martha was the first woman CEO of Space Coast and was CEO when the CU reached $1m in assets. She retired from credit union after 27 years of employment, 11 of which she was CEO.
The new management tool, the LSCU Action Center, is housed at www. LSCUActionCenter.com, and makes responding to action alerts as simple as 1-2-3. League staff received a comprehensive training on the software in May and is in the process of setting up a webinar for all users to show the best ways to utilize the Action Center. The LSCU Action Center is a great resource for board members to stay up-to-date, as well as get involved in key legislative issues more efficiently. Hearing from credit union board members and executive staff make a big difference to legislators and their decision-making. In order to use the Action Center’s grassroots functions, an LSCU website log-in is required. If you do not currently have a log-in for the League website, make sure you register for one by clicking here. Doing so is an important step in securing legislative victories now and in the future!
Q: You were named Volunteer of the Year by the League this year. What would you say is the most rewarding aspect of being a credit union volunteer? “So many things have been rewarding. I would have to say the people you meet and the support of all the people along the way. And then hoping somewhere down the road you’ve made their lives better.”
ATM Fee Disclosure Bill Update H.R. 4367, the Electronic Funds Transfer Act, sponsored by Reps. Blaine Luetkemeyer (R-MO) and David Scott (D-GA) has passed its first hurdle in the House. In late June, a House Financial Services Committee unanimously passed the bill on a voice vote. The legislation is now headed for a full vote of the House, possibly after the July 4 recess. This legislation provides a commonsense, and much needed, update to the Electronic Funds Transfer Act that will protect ATM owners and operators, such as credit unions, from frivolous lawsuits while continuing to afford consumers the protections and rights they currently enjoy. The legislation has 134 co-sponsors, including seven from Florida. A Senate companion, S. 3204, has been filed. The League has begun urging Senators to cosponsor this as well. In early June, members of the League’s Governmental Affairs team met with Sen. Marco Rubio’s (R-FL) staff to push the virtues of this legislation. A short time later Sen. Rubio officially signed on to co-sponsor this important piece of legislation, a direct result of the efforts the GA team and volunteers initiated. Under Regulation E, which enforces the Electronic Funds Transfer Act, ATM operators must provide users with two separate notices that a fee will be charged for use of the machine, a physical sign as well as an on-screen notice, before the transaction is complete. The dual notice requirement, under current regulations, has led to abuse that harms ATM owners and ultimately drives up the price of services for consumers. The penalty under Reg. E is so high that it has led to a “bounty” and consequently what can best be described as “bounty hunters.” A successful class action lawsuit for violation of the dual notice requirement can be as high as $500,000 or one percent of the owner’s net worth plus attorneys’ fees and costs. In recent years, the physical signs on the outside of the ATM are either being removed, or destroyed, photos taken of the machine, and lawsuits for non-compliance against the owner of the machine are being filed. Following the voice vote, committee members said they hoped that the bill could be voted on by the House, and moved on to the Senate quickly.
2011 Annual Report Available The LSCU Annual Report offers an overview of the League in 2011. The report looks at the major accomplishments of the League, as well as a complete picture of the League and Affiliates financials. The 2011 report extends this year’s AC&E theme of “The Power of One.” It covers how the cooperative spirit of credit union staff, executives, volunteers, as well as the League helped move the industry another step forward. The report highlights the strides made in the areas of legislative advocacy, education and training, communications, community outreach, and regulatory and compliance resources. To read the 2011 LSCU Annual Report, click here.
CUNA Releases New Online Volunteer Discussion Forum CUNA recently announced the release of its new online discussion forum, now available exclusively on the CUNA Volunteer Network. The new online forum is designed to make connecting with credit union volunteers online simple and hassle-free. For more information, click here. CUNA’s new online discussion forum, designed in partnership with Passageways for the CUNA Volunteer Network, provides a safe, convenient online atmosphere where board volunteers can share their ideas and connect with one another without being in the same room. Featuring simplified tools and a user-friendly layout that focuses on functionality, members of the volunteer network will be able to easily navigate the online discussion forum to distribute volunteer materials, hold board meetings, join in conversations and conduct their day-to-day board volunteer business. The new online discussion forum features: • • • • • • •
Alerts and notifications No automatic email notifications Interactive discussion boards Document access and search Google, dictionary, and thesaurus search Network members exclusivity And more
The CUNA Volunteer Network keeps members informed and connected to their credit union peers by providing exclusive access to the online discussion forum, current industry news and research, case studies, a list serve of credit union peers, board training courses, discounts on educational opportunities, and more. More information about the CUNA Volunteer Network and the new online discussion forum can be found here.
2012 LSCU Supervisory Committee Conference Whether you are a new supervisory committee or board member; or you are a ‘seasoned’ volunteer; attendance at this event will most definitely enrich your contributions to your credit union. We’ll have a full agenda of the latest information and updates regarding credit union financials, risk, and compliance. With a wide variety of speakers and topics, you’ll better your knowledge to help keep your credit union secure and strong.
Aug. 5 – 8, 2012 The Power of
2011 LSCU Annual Report
one vision. one voice.
Hilton Sandestin Beach Golf Resort & Spa Destin, FL Click Here for More Information
10 Core Principles and Practices for Boards of Directors (#6-10) (Part II: 10 Core Principles and Practices for Boards of Directors (#6-10) is continued from the Q1 Director’s Resource.)
Great boards take sound board practices to the next level. They build on the basics and pursue a vision of an exceptional board culture built on accountability, candor, continuous leaning, and continuous improvement. 6. Accountable partnership with the CEO. The board selects, evaluates, and provides for compensation of an outstanding chief executive. An effective partnership is characterized by shared goals, candid communications, mutual respect, and accountability. Recommended practices: The board adopts a compensation philosophy and formal plan for its top executives. It establishes a collaborative process to evaluate CEO performance, provide constructive feedback, approve incentive pay, and establish prospective goals annually. 7. Competency-based and diverse board makeup. Boards select members who are committed to the mission, possess leadership skills, and exhibit personal integrity. They also bring specific competencies needed for effective governance. Great boards re-elect members based on their participation, performance, and a continuing need for their particular skills. Recommended practices: The board adopts written competency-criteria which are applied in an ongoing succession planning process for board members and board leaders. 8. Streamlined structure. The board is a workable size—large enough to include a range of needed competencies but small enough to interact and learn as a cohesive team. Recommended practices: The board is right-sized. It creates working committees to engage in oversight and development of recommendations to the board. The full board reviews but does not rehash committee work. All committees have written charters; they “sunset” every two years—when their necessity is reassessed and their purpose updated. 9. Personal integrity. Directors act in the best interest of the mission, the organization, and the stakeholders, not on personal, economic, or other self-interests.
CUNA Urges CFPB to Consider Exempting CUs in Rulemaking On June 6, the Credit Union National Association (CUNA) sent a letter to the Consumer Financial Protection Bureau (CFPB) urging the agency to consider exempting credit unions from agency rulemakings, and to address remittance transfer, overdraft protection, and mortgage and mortgage-related regulations as it looks for ways to streamline existing financial rules. “Since the inception of the CFPB, CUNA has strongly supported the objective of protecting consumers from unscrupulous service providers but credit unions are more concerned than ever that the agency will impose an endless range of new requirements and data collection responsibilities on the most scrupulous service providers in the marketplace: credit unions,” the letter said. CUNA suggested the CFPB could also minimize all reporting requirements under Dodd-Frank, including those regarding gender, minority status, credit scores, points, and fees, for smaller institutions. The CFPB also should do a better job of estimating the amount of funds and resources that credit unions and other institutions will need to dedicate to comply with new rules, CUNA said in its letter. Any new proposals or final regulations should include executive summaries and charts that demonstrate how the proposed changes would impact existing rules. The CFPB should also lay out how its rules have been changed between the proposed and final stages. Financial institutions should be given the time needed to comply with any regulatory changes that are approved by the CFPB, and the CFPB should clearly delineate between a rule’s effective date and any mandatory compliance date(s), CUNA said. The agency should also create a standard review period for all rulemakings, the letter added.
Recommended practices: The board follows a conflict of interest policy that at a minimum meets IRS standards. Directors disclose potential conflicts annually and whenever they occur. The conflict of interest policy is scrupulously enforced, and confidentiality is taken seriously. 10. Board self-renewal. The great board seeks to continuously improve its performance and its connectedness with the community and stakeholders it services. Recommended practices: The board evaluates itself at least every two years and adopts a board development action plan of desired improvements. The board has either term limits or a rigorous process individual evaluation prior to re-election (or both) to ensure that it only re-elects directors who fulfill their fiduciary responsibilities, keep educated and engaged, and support the organization’s mission and vision. The board that creates and pursues excellence creates a virtuous cycle of talented committed directors who are engaged and energized in intellectually stimulating work that enhances the mission and vision and achieves public recognition which makes board service attractive to a new generation of outstanding prospective directors.
2012 LSCU Leadership Development Conference Nov. 7-9 Grand Hotel Marriott Resort Point Clear, AL Click Here for Details
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