CenterPoint Winter 2014

winter.2014

A publication of the Massachusetts Credit Union League, New Hampshire Credit Union League and the Credit Union Association of Rhode Island

Celebrating

THE FORMATION OF THE COOPERATIVE CREDIT UNION ASSOCIATION

Stories Inside:

06

Small CU Conference Highlights Issues Facing Industry

08

MA Governor Signs CU Investment Authority Bill

16

The Board’s Role in Preventing Fraud

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Massachusetts Credit Union League, Inc. www.maleague.org New Hampshire Credit Union League www.nhcul.org Credit Union Association of Rhode Island www.cuassociationri.org 800-842-1242 Paul Gentile, President/CEO

EDITORS: Robert B. Kimmett Marguerite A. Thorsen CONTRIBUTORS: Donna M. Bevilacqua Robert Delaney Bonnie L. Doolin William F. Nagle Beverly Purtell Charlotte Whatley

Table of Contents PUBLISHED BY

04 MESSAGE FROM THE PRESIDENT The Warren Group

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06 CREDIT UNION NEWS

– Small Credit Union Conference Highlighted Key Issues Facing Small Credit Unions – MA Governor Signs Credit Union Investment Authority Bill – Fall Leadership Conference Featured Outstanding Lineup of Speakers

06

09 COMMUNITY INVOLVEMENT

– $2M Fundraising Milestone for Make-A-Wish® New Hampshire – RI Credit Unions in Action Facebook Page Surpasses 1,000 Likes – MA League Charity Golf Tournament Raises More Than $29K for Homeless

12 COVER STORY

09

14 CREDIT UNIONS TOP IN CUSTOMER SATISFACTION 16 THE BOARD’S CRITICAL ROLE IN PREVENTING INTERNAL FRAUD 18 CREDIT UNION PEOPLE 22 CALENDAR

10 winter.2014 | centerpoint | 3

M E S S AG E FRO M T H E P R E S I D E N T

| by paul gentile

A NEW ERA OF COOPERATION This past year has been a dynamic and exciting one for both credit unions and the League. Together we have faced one of the most important regulatory challenges of our time – the NCUA’s flawed RiskBased Capital rule – and convinced them that it must be overhauled. We successfully beat back an intense banker public relations attack in New Hampshire by countering their every move with an intense fact-based campaign.

We have reached out to the lawmakers who represent us and made our case regarding matters of critical importance to us like data security, the ability to serve our members with conveniently located branches, and expanded business lending authority.

Your credit unions have done an outstanding job of communicating the value of credit union membership to the community. Credit unions are providing tremendous service, excellent products, and the best pricing while consumers are rewarding you with an ever-increasing volume of business. The consumer is also beginning to understand that credit unions are the true innovators in the financial services sphere. Credit unions bring new products and fresh ideas to the market place all the time and this resonates with the consumer in a big way.

I believe that all of our successes are a function of our commitment to working together. The fact that we embrace cooperation makes us stronger than our competitors could ever be. This commitment to cooperation was reflected in the support that you and your fellow credit union leaders gave the merger of our three state credit union Leagues and the formation of the Cooperative Credit Union Association.

The overwhelming backing that the credit unions in each of our three states gave the merger was truly gratifying because it was made after so many credit union professionals and volunteers carefully scrutinized the philosophy, strategy, and mechanics of the plan. The hard work and thoughtful deliberation of the leadership of the Massachusetts, New Hampshire, and Rhode Island boards of directors was clearly evident in the comprehensive and 4 | centerpoint | winter.2014

cooperative proposal that they helped put together.

The outstanding structure that has been developed for our new organization, the Cooperative Credit Union Association, will make it possible for your trade association to furnish the type of resources our member credit unions need in order to be successful in the future. The Cooperative Credit Union Association’s framework gives us the tools that we need to accomplish our most vital function, advocacy. We can be strong locally and collectively when we speak on behalf of credit unions whether that is at the state houses or on Capitol Hill.

We have put together a great strategy for ensuring that the individual identity of each state group of credit unions remains strong.

This strategy will serve to add clarity to our message when we speak to lawmakers, other public officials, and the media. When our credit unions are dealing with local matters, particularly advocacy issues, we will be known as New Hampshire Credit Unions, Credit Unions of Rhode Island or Massachusetts Credit Unions. This brand makes it clear in the minds of the people who we address, who we are, and who our message is all about.

We start 2015 with a new structure in place and a renewed commitment to work together to accomplish even more. Our new slogan, “Creating Cooperative Power,” is more than just a nice sounding phrase. It is a statement of how our energy multiplies when we combine our efforts. I hope that you are as excited as I am about the possibilities that the new year holds in store for our credit unions and our Cooperative Credit Union Association.

Paul Gentile, president

C R E D I T U N I O N N EWS

CONFERENCE HIGHLIGHTED KEY ISSUES FACING SMALL CREDIT UNIONS

Scott Albraccio, sales manager, executive benefits, CUNA Mutual Group, brings the group up to date on employee benefits best practices.

Scott Butterfield from Your Credit Union Partner discusses the need to bring consideration of the credit union’s mission into strategic decisions.

The Small Credit Union Conference, held October 5-7, 2014, in Portsmouth, NH, attracted a large contingent of representatives from small credit unions in Massachusetts, New Hampshire, and Rhode Island.

Thriving – not just surviving – was foremost in the minds of those credit union leaders in attendance as they focused on the issues facing small credit unions.

In the spirit of cooperation, the conference was sponsored in part by four larger credit unions: Digital Federal Credit Union (DCU), Marlborough, MA; Metro Credit Union, Chelsea, MA; Pawtucket Credit Union, Pawtucket, RI; and RTN Federal Credit Union, Waltham, MA. With two days of educational programming including speakers from NCUA, Balance Sheet Solutions, CUNA Mutual Group, and Filene Research Institute, among others, it was also an excellent opportunity to network and share best practices. The conference was co-hosted by Fiserv, which runs an alternative education track for users of their CUSA processing.

Attendees were greeted at registration with a complimentary gift card for $20 from conference sponsor LSC, a CU Connect member, 6 | centerpoint | winter.2014

providing pre-paid plastic services to credit unions.

League President Paul Gentile opened the conference by introducing Peter Palumbo, senior vice president, Fiserv CUSA, who provided an overview of changes and updates to the company’s software, which the majority of the small credit union attendees use at their credit unions. Palumbo focused on products that add convenience for members, such as POP Money (person-to-person payments), Mobiliti (smartphone access to accounts), and Mobile Source Capture (remote deposit capture). He stressed that many of the updates required now or on the horizon soon are being driven both by compliance requirements and the need to replace technology that is expiring.

Gentile presented an overview of the credit union industry, highlighting topics including industry statistics, regulatory burden, legislative advances, and new, competitive technologies, such as ApplePay, and the impact of each of those factors on credit unions with assets of less than $100 million. His remarks prompted lively discussion that evening at the reception sponsored by Fiserv CUSA and the League.

In his session, Gentile noted that non-interest income now accounts for 28.9 percent of total credit union income, and small credit unions have to be aware of non-interest income potential. Leading the list of non-interest income is debit card interchange and fees, followed closely by non-sufficient funds (NSF)/overdraft. Attendees engaged in a spirited discussion about how much credit unions should charge for NSFs. The credit union system average is $28.

While the NCUA-designated small credit union asset threshold is $50 million, many credit unions said the threshold should be even higher.

Gentile also spoke about legislative and regulatory developments.

Covering data breaches from Home Depot and JP Morgan, many leaders in attendance noted they had to re-issue cards, and they questioned when Congress is going to hold retailers accountable. Gentile pledged that the League will continue to press for more accountability from retailers. “The retailers won once already on interchange, but issuers like credit unions should not have to foot the bill for retailers not effectively securing their systems,” said Gentile. “We will continue to press the issue. The problem is not going away.”

Some of the topics during day two included loan participations, digital strategies, and interest rate risk testing.

Tansley Stearns of the Filene Research Institute discussed the importance of managing members’ online experiences, offering practical and executable suggestions for small credit unions to manage their online points of contact, specifically website and social media interactions.

Urging credit union leaders to “think like a user,” she delivered a top 10 list of tactics that all credit unions can use to create a digital strategy, with special emphasis on keeping every online experience simple for members to read, understand, and complete.

League staff Charlotte Whatley and Dean Martino provided an overview of resources available through the League, including vendor

programs that help credit unions generate non-interest income and a variety of tools to help credit unions with the challenges they face in the area of compliance.

Loan participations became a hot topic with leaders from Metro Credit Union on hand to discuss their loan participation program, explaining how loan participations are one option credit unions have to boost the bottom line. During Gentile’s credit union system overview the day prior, he noted how while loan growth has returned to the system, smaller credit unions are not seeing as much. One way to boost loans on the balance sheet is through participations.

Jim Mathews of Balance Sheet Solutions shared various ALM scenarios, reviewing recent NCUA guidance, and simulating an examiner’s approach to interest rate risk so attendees could consider what to expect in terms of testing.

NCUA’s Office of Small Credit Union Initiatives (OSCUI) Deputy Director Martha Ninichuck was on hand to discuss the agency’s many resources for small credit unions, including training, consulting, grants, and loans. There was an engaging discussion on the benefits of being a Community Development Financial Institution.

John Graham, CEO of Kentucky Employees Credit Union in Kentucky and chairman of CUNA’s Small Credit Union Committee, presented ideas on ways small credit unions could make a big difference in the financial lives of their members. Graham suggested that credit

unions focus on “near prime” members and help them move up to prime members with products that move up with them.

A compelling presentation was given by Scott Butterfield of Your Credit Union Partner who helped credit unions think positively about their mission; in one example after another, he demonstrated that serving local underserved markets is a way for small credit unions to create relevance and impact loan growth.

On the final day of the event, two big ideas – one for managing employee benefits expense through pre-funding, and one for attracting future borrowers – were the final League-sponsored topics at the Small Credit Union Conference.

CUNA Mutual’s Scott Albraccio took the audience through a thorough exploration of the current total benefits pre-funding landscape, including how to evaluate a credit union’s capacity to use this type of long-term investment.

In concurrent sessions, the CUSA training team from Fiserv was busy supplying the technological tools attendees need to deliver their services across a variety of channels. In these sessions, attendees caught up on best practices for providing access, convenience, and security to members through person-to-person payments, remote deposit capture, credit and debit rewards programs, and online account opening.

The general consensus was that the conference delivered best practices, new tools, and strategies for long-term success.

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C R E D I T U N I O N N EWS

MA GOVERNOR SIGNS CREDIT UNION INVESTMENT AUTHORITY BILL On October 10, Massachusetts Governor Deval Patrick signed into law House Bill 3954, An Act Relative to the List of Legal Investments, prepared by the commissioner of banks. The measure improves the investment authority for state-chartered credit unions in three ways: • Streamlines the petition process for the commissioner of banks to add permissible investments available to state-chartered credit unions.

• Updates criteria to add permissible investments and organizes the criteria into one location within Chapter 171.

• Adds certain “prudent person” investment authority for certain stock and debt instruments up to 20 percent of a credit union’s assets with advance regulatory approval.

See a summary of the measure on the League’s website.

This well recognized standard emphasizes board policies and focuses on the investment process, requiring a certain level of care and diligence to make an investment. The authority will be effective in early January 2015.

FALL LEADERSHIP CONFERENCE FEATURED OUTSTANDING LINEUP OF SPEAKERS

Stuart Levine makes a point during his presentation at the Fall Conference.

The annual Fall Leadership Conference kicked off Friday, October 24, with almost 200 registrants and guests in attendance with education from nationally known speakers, netMax Wolff speaks at the Fall Leadership Conference. working, and fundraising for each state’s social responsibility causes of choice against a backdrop of the beautiful and historic Wentworth by the Sea Hotel in Portsmouth, NH. League President Paul Gentile opened the event and provided an overview of the credit union system, including a statistical analysis of credit union performance specifically related to size, as well as a discussion around game-changers in technology – particularly ApplePay. Economist and technology guru, Max Wolff of Manhattan Venture Partners, explained his “guarantee of disruption” to the financial services industry in general by non-financial players, such as Google, Apple, and Amazon, evidenced by a survey in November that revealed 8 | centerpoint | winter.2014

the statistic that “63 percent of U.S. consumers put the smartphone as their overwhelming platform of choice for banking.” Even consumers identified as under- or non-banked are conducting financial transactions with no relationship with a financial institution.

Andy Posner, founder and CEO of Capital Good Fund, gave an overview of the $100 billion predatory industry, players in the financial services place, and why these under and non-banked consumers are drawn to use them. He shared suggestions on creating partnerships with credit unions in an effort to provide more affordable and better quality products.

Tansley Stearns, chief impact officer from the Filene Research Institute, kicked off the morning of day two. She shared insights to help credit unions advance their digital strategies and provided new ideas that credit unions can employ to satisfy the needs of current and future members related to online consumer experiences and website quality.

The next speaker, Stuart Levine, CEO of Stuart Levine and Associates LLC, an international strategic planning and leadership development company, provided an overview of megatrends that will impact credit unions including regulation and compliance, consumer behaviors, and generational shifts. Particular attention was paid to board governance issues including succession planning, duties and responsibilities, and evaluating merger opportunities.

On Saturday afternoon, bestselling author and New Hampshire resident Michael Rubin shared insights from his books, “Beyond Paycheck to Paycheck” and “The Savings Solution.” He shared several of his strategies for increasing savings that credit unions can share with their members through financial education and literacy programs.

The final speaker of the day was Todd Marksberry, senior vice president of business development at SavvyMoney, who provided practical solutions utilized by credit unions around the country to meet the savings, lending, and financial education needs of members, specifically short videos that can be viewed on credit union websites.

C O M MU N I T Y I N VO LV E M E N T

$2M FUNDRAISING MILESTONE FOR MAKE-A-WISH® NEW HAMPSHIRE

Members of the New Hampshire Credit Union League take a photo op with all the Wish children during the special $2 Million Celebration.

The New Hampshire Credit Union League and its member credit unions, along with representatives from Make-A-Wish® New Hampshire, held a special $2 million milestone celebration on December 1 at the League’s Merrimack Valley Chapter’s annual holiday auction to benefit Make-A-Wish® New Hampshire. New Hampshire Credit Union League officials presented an additional donation of $30,000 to Make-A-Wish® New Hampshire, bringing their 18-year total raised to more than $2 million. Making the presentation on behalf of the credit unions in the state were: Ronald Covey Jr., chairman, NHCUL Social Responsibility Committee, and president and CEO, St. Mary’s Bank Credit Union, Manchester; Gerald Dumoulin, chairman, NHCUL, and president and CEO, Guardian Angel Credit Union, Berlin; John Young, board member of both Make-A-Wish® NH and NHCUL, and president and CEO of New Hampshire Federal Credit Union, Concord; and League President Paul Gentile.

During the celebration, Make-A-Wish® New Hampshire representatives alongside League officials revealed Wish Child Amelia’s (Amy) special wish being granted by the credit unions. Amy is a vibrant 8-year-old who loves everything American Girl. She enjoys arts and crafts, cooking with her grandmother, and playing with her American Girl dolls. For her wish, Amy and her family visited the American Girl

Doll facility in Wisconsin in mid-December. While on her wish, Amy got to see how the dolls are created and so much more.

Julie Baron, CEO of Make-A-Wish® New Hampshire, praised the credit unions for their contributions in, saying, “It is the sheer joy of a wish that is the most powerful medicine of all. Our partners – the credit unions in the state – have made that possible. Thanks for $2 million and bringing so many wishes to life.”

In honor of the $2 million milestone, more than 25 wish children and their families encircled the group in attendance for the special celebration as part of the Merrimack Valley Chapter’s holiday party to benefit Make-A-Wish® New Hampshire. Dressed in capes as super heroes, many carried posters as their message of thanks, along with a special banner that read: “Thanks for Two Million ...Yesterday, Today, and Beyond!” The wish children and their families presented everyone in the room with a card that told a wish child’s story and highlighted their wish.

Guests in attendance enjoyed a special movie presentation played during dinner which highlighted the many memories and moments for Make-A-Wish® New Hampshire in the last 18 years.

“Raising more than $2 million dollars over the past 18 years is a significant milestone for New Hampshire’s credit unions and I attribute this to our credit unions, employees, and chapters, such as the Merrimack Valley and Monadnock Chapters, corporate donors, and the more than 545,000 credit union members here in New Hampshire. Anyone involved with Make-A-Wish® New Hampshire knows how important this organization is to the well-being of the children and families they serve,” said Ronald Covey.

“The tradition of cooperation and giving that New Hampshire credit unions have built with Make-A-Wish® is inspiring. The more than 1,000 wishes they’ve helped grant have made an impactful difference in the lives of the Make-A-Wish® children. It was a very special evening,” said League President Paul Gentile.

RI CREDIT UNIONS IN ACTION FACEBOOK PAGE SURPASSES 1,000 LIKES The “RI Credit Unions in Action” Facebook page surpassed more than 1,000 likes in October 2014.

The credit unions of Rhode Island marked their presence in the social media world in October 2012 when Westerly Community Credit Union Vice President of Marketing Meg Sisco launched the page as a means to communicate with the younger generation who use Facebook. Meg has done an outstanding job of maintaining the page and working with credit unions to keep the content current.

The credit unions throughout the state are an integral part in the communities they serve and truly make a difference. “RI Credit Unions in Action” provides a way for the credit unions in Rhode Island to share the successes of their good deeds for members, communities, charities, local organizations, schools, etc. It also promotes the benefits of membership within a credit union and encourages participants to join a local credit union. To follow the credit unions in Rhode Island, be sure to like the page! winter.2014 | centerpoint | 9

C O M MU N I T Y I N VO LV E M E N T

MA LEAGUE CHARITY GOLF TOURNAMENT RAISES MORE THAN $29K FOR HOMELESS

The winning team from MassMutual Federal Credit

Lois Ferraresso, associate director, Massachusetts

Union included Ray Muise, Steve Wilkinson, and

Coalition for the Homeless, thanks the credit

Dave Plantier.

unions alongside League President Paul Gentile.

League President Paul Gentile attempts a putt while team members Bob LeBlanc, St. Jean’s Credit Union; John Wiley, CheckAlt; and David Surface, St. Jean’s Credit Union, look on.

The 100 golfers who traveled to Juniper Hill Golf Course in Northboro, MA, for the Massachusetts Credit Union League’s Charity Golf Tournament to benefit the Massachusetts Coalition for the Homeless, held on Tuesday, August 26, raised more than $29,000 for this great cause, and participants enjoyed a fabulous summer day out on the course.

10 | centerpoint | winter.2014

Members Plus Credit Union once again demonstrated their commitment to this great cause by sponsoring the tournament awards banquet. Additional sponsors including: CU Direct Corporation, CUNA Mutual Group, Digital Federal Credit Union, Harvard University Employees Credit Union, UMassFive College Federal Credit Union, MassMutual

Federal Credit Union, and Tricorp Federal Credit Union displayed their commitment with a sponsorship of $750 or more. (See the complete list of sponsors at right.)

The team from MassMutual Federal Credit Union took first place with an impressive score of 12 under par, and the group from Metro Credit Union took second place with 6 under par. The team consisting of New Bedford Credit Union, CO-OP Financial Services and the MA Credit Union League showed the most courage as the “Most Honest Team” for the day.

Several golfers demonstrated their individual skills as they competed in most accurate drive and closest to the pin contests.

Taking the prize for the men’s most accurate drive was Chip Lattanzio, Winbrook, and Cheryl Gorman, Harvard University Employees Credit Union, won it for the women. The prizes for closest to the pin went to Steve Roy, Tricorp Federal Credit Union; Kevin Kaeding, Kaeding & Company; Steve Jones, Jeanne D’Arc Credit Union; and Ray Muise, MassMutual Federal Credit Union.

Harvard University Employees Credit Union and Quincy Credit Union won the Safety in Numbers Award for fielding the largest number of golfers on the course with eight.

At the awards banquet, the golfers heard from Lois Ferraresso, associate director of the Massachusetts Coalition for the Homeless. Lois expressed her most sincere thanks to all the credit unions for their continued support, kindness, and generous spirits to help the Coalition fight to end homelessness.

League President Paul Gentile thanked Lois and her colleagues for the fine work that they do and thanked the credit unions for their generosity, saying, “The credit unions of Massachusetts have shown tremendous support for this great cause, having donated more than $1 million over the past 25 years.”

He also expressed the League’s thanks to the tournament’s sponsors.

GOLF TOURNAMENT SPONSORS: Awards Banquet

Silver (continued)

Members Plus Credit Union

Hanscom Federal Credit Union

Lunch CU Direct Corporation

Mass Bay Credit Union Members Insurance Agency, LLC Nutter, McClennen & Fish, LLP

Closest to the Pin

RTN Federal Credit Union

CUNA Mutual Group

Synergent

Digital Federal Credit Union

Workers’ Credit Union

Harvard University Employees Credit Union UMassFive College Federal Credit Union Reception MassMutual Federal Credit Union Hit the Green RTN Federal Credit Union Gold Tricorp Federal Credit Union Silver Federal Home Loan Bank of Boston

Thomas J. O’Connor, CPA Vice President & Director of Financial Institution Services

Tee/Green Align Credit Union Berkshire County Chapter of Credit Unions Boston Firefighters Credit Union Central One Federal Credit Union CheckAlt City of Boston Credit Union CO-OP Financial Services Greylock Federal Credit Union Integrated Security Group Jeanne D’Arc Credit Union Kaeding & Company Macpage, LLC

David J. Keyo Jr., CPA

Vice President & Director, Financial Institution Advisory & Assurance Services

Tee/Green (continued) Merrimack Valley Federal Credit Union Metro Credit Union Naveo Credit Union Pioneer Valley Chapter RPM Southern Mass Credit Union St. Anne’s Credit Union of Fall River, Mass.

St. Jean’s Credit Union St. Mary’s Credit Union Tri-County North Chapter Winbrook Donations Central Jersey Federal Credit Union (NJ) Chatham Bars Inn Grafton Suburban Credit Union Juniper Hill Golf Course Massachusetts Credit Union League Merck Employees Federal Credit Union (NJ) Sheraton Portsmouth Harborside Hotel Wentworth by the Sea Hotel

Giuseppe “Joe” Femia, CPA Director, Financial Institution Advisory & Assurance Services

Jayme F. Moore, CPA Accounting & Auditing Manager

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winter.2014 | centerpoint | 11

HONORS THE PAST, Welcomes THE FUTURE

W

hat’s in a name? The new Cooperative Credit Union Association’s name speaks volumes about the Association’s purpose, principles, and its vision for the future. According to Association President Paul Gentile, the name captures the essence of credit unions.

“Every day, in fact every time, our members see that name, I hope it reminds them that we work together,” he said of the merger. “Our cooperative heritage is a vital resource and we need to embrace it. I can think of no better way to do that than to proudly incorporate it in our name.”

“Creating Cooperative Power” is the brand statement of the Cooperative Credit Union Association. Credit Union Association of Rhode Island Chairman David Suvall, who is the president of Rhode Island Credit Union, spoke of how the credit unions in his state will see 12 | centerpoint | winter.2014

that promise realized: “We are no longer going to be 20 credit unions, we are going to be 200 credit unions … we are going to be a part of that power.”

Cooperation is, in fact, what brought the nation’s newest credit union trade group into existence. Three credit union leagues, the Massachusetts Credit Union League, the New Hampshire Credit Union League, and the Credit Union Association of Rhode Island, were trendsetters in the credit union movement when they entered into management agreements that combined their office operations decades ago. This year, after a great deal of discussion and careful analysis, the members of these organizations determined that they should join together fully and completely as a single association with a single governance structure. In October, a series of special meetings were held

• Massachusetts – five seats (two large, one small, one at-large) • New Hampshire – two seats (one large, one small) • Rhode Island – two seats (one large, one small)

in each of the three states, and the member credit unions all cast ballots in favor of the merger and the formation of the Cooperative Credit Union Association.

The new organization will officially begin doing business on January 1, 2015. During a transition period to the new governance structure, a 13-member subset of all three boards will be seated to be the initial governing body for the new Association. The subset is made up of board members from each of the three boards who have been working strategically on creating a merger framework for well over a year. The new structure provides representation both geographically and to credit unions of various sizes. The membership will vote to elect the new board of directors at the Association’s first annual meeting in October 2015, according to the following formula:

The distinction between large and small will be based on the mathematical average asset size in each state.

As the new structure is put into place, the organization will be especially focused on making certain that individual identities of the credit union communities in each of the three states remains unique and distinct. “Our credit unions are understandably proud of our pioneering role in the credit union movement,” Gentile said.

“The first credit union in the nation, St. Mary’s Bank Credit Union started in New Hampshire over 100 years ago, Massachusetts is home to the first law enabling the formation of credit unions, and Rhode Island’s first credit union opened its doors in 1915. But it’s not all about history. Each state has an active, thriving, and innovative credit union community. Their identity will be maintained in a separate and distinct way so that lawmakers, regulators, and consumers know that they are dealing with the credit unions of their home state.”

When working with these in-state audiences the credit unions will use the names Massachusetts Credit Unions, New Hampshire Credit Unions, and Credit Unions of Rhode Island. Dropping “League” and “Association,” creates a brand name that is accessible to consumers, the media, regulators, and lawmakers. Each state will use the common tagline of “Creating Cooperative Power.”

Michael L’Ecuyer, president and CEO, Bellwether Community Credit Union and a member of the board of directors of the New Hampshire Credit Union League, explained the local branding. “The beauty of this structure is our ability to maintain our local brand while we have a strong national presence,” he said. “We’ll be known as New Hampshire Credit Unions when we deal with local officials and state lawmakers or local business partners, but on the national front, we’ll be known as the Cooperative Credit Union Association.”

That local branding will play an important role when the Association is engaged in legislative advocacy.

“There is nothing that a credit union trade association does that is more important than advocacy,” said Gentile. “It is the single most important service that we provide to our members, and we will continue to be strong advocates for credit unions at the State House in Concord, NH, on Beacon Hill in Boston, and Federal Hill in Providence. When we meet with local lawmakers, we will do so as the Credit Unions of Rhode Island, Massachusetts Credit Unions or New Hampshire Credit Unions. There is power in those brands and we are going to make them work for our members.”

The new Association is set to get underway amidst a wellspring of excitement. David Surface, president of St. Jean’s Credit Union, and chairman of the board of the Massachusetts Credit Union League, expressed his enthusiasm, saying, “I’m proud of what we have accomplished. And, by we, I mean the directors, our member credit unions, and of course Association President Paul Gentile. Our new Association is going to be a powerhouse.” winter.2014 | centerpoint | 13

CREDIT UNIONS TOP IN CUSTOMER SATISFACTION AMONG FINANCIAL INSTITUTIONS Credit unions are ranked first in customer satisfaction, significantly outpacing all other financial services, according to findings recently released by the American Customer Satisfaction Index (ACSI). The 85 customer satisfaction score is first among financial institutions, where the average bank score lags behind at 76.

14 | centerpoint | winter.2014

ACSI, a respected measure of customer satisfaction (based in Ann Arbor, Michigan), ranks credit unions substantially better than traditional banks on every component including expectations, quality, value, loyalty, and having lower complaint rates.

This is the seventh consecutive year that credit unions have ranked above banks.

People doing business at credit unions are referred to as “members” rather than customers, reflecting the cooperative nature of credit unions (where the members are the owners of the institution). However, the ASCI scoring accurately gauges the sentiments of members of credit unions and customers of other financial institutions.

“The ACSI score demonstrates how credit unions are best in class in financial institutions,” said League President Paul Gentile. “Given the culture of service and commitment to excellence that our credit unions have it really shouldn’t be any surprise that consumers see the difference.”

The report addressed key findings for all measures that accounted for credit unions’ number-one ranking in customer satisfaction. Members of credit unions have higher expectations of their credit union than customers of banks do – and over the past two years, not only have member expectations increased, but credit union satisfaction scores have increased as well.

Furthermore, member loyalty is greater at credit unions. The likelihood that a member will continue to do business with the credit union is far higher (nearly 20 percent) than all others measured in the survey.

In terms of value, credit union members recognize the value they receive by belonging.

Their perception of the quality of service received for each dollar spent at a credit union is much higher than banks, according to the ACSI survey results.

Additionally, credit union member complaints about service are very low. In fact, the complaints rate among credit union members is less than half that of banks.

Credit unions also outpace banks in a number of ACSI experience measures: • First in the availability of products and services.

• First in the ease of making account changes.

• First in interest rate competitiveness.

• First in understanding account information.

• First in courtesy and helpful staff.

The ACSI report aligns with other rankings that put credit unions at the top of their field, including a recent Harris Poll that found consumer trust in credit unions steady while banks were in decline. In August, the Chicago Booth Kellogg School Financial Trust Index showed that consumers trust credit unions more than banks. The index (which is sponsored jointly by the Kellogg School of Management at Northwestern University and the University of Chicago Booth School of Business) showed trust in credit unions is 60 percent while trust in big banks is 30 percent.

ACSI is the only national cross-industry measure of customer satisfaction in the United States. The Index measures the satisfaction of U.S. household consumers with the quality of products and services offered by both foreign and domestic firms with significant share in U.S. markets.

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winter.2014 | centerpoint | 15

THE BOARD’S CRITICAL ROLE IN PREVENTING INTERNAL FRAUD

By Joette Colletts

For a perfect mini-seminar on how a board of directors can allow internal fraud to sink a credit union, take an hour or so to peruse the NCUA’s “material loss reviews” (available on NCUA’s website: www.ncua.gov/about/Leadership/CO/OIG/Pages/ MaterialLossReviews.aspx). These summarize investigations into why credit unions failed, resulting in losses to the National Credit Union Share Insurance Fund.

Investigators directly link many failures to internal fraud, usually citing “a failure of the board to perform its duties related to oversight of the Credit Union.”

Consider the following details from 2014 and 2013 reviews.

In a credit union that “failed primarily due to management fraudulently overstating assets, specifically cash on deposit, and understating shares.”

• Board meeting minutes were missing for some months. The board had not signed off on some minutes and board discussion notes regarding audit/exam results and follow-ups were limited.

• The board didn’t challenge treasurer’s financial reports showing large swings in income, projections, and operating results.

• No record of substantive discussion of policy reviews, risk management, or strategy.

In a credit union that failed due to years of allegedly fraudulent over-statement of assets, enabled by “weak supervisory committee oversight” and “weak board of directors oversight.”

• The supervisory committee failed to get supervisory committee audits for three consecutive years.

• The board failed to keep complete and accurate minutes or to obtain board packets with sufficient information.

Here are typical results from a few other material loss reviews involving employee fraud: • A board and its supervisory committee didn’t follow up on recommendations from examiners and an external CPA firm that the credit union needed segregation 16 | centerpoint | winter.2014

of duties to prevent fraud.

• Voluminous board packets were delivered late, giving directors little time to read and understand the details and trends.

• The board didn’t heed red flags related to acquiring a CUSO run by someone related to a top executive.

Four lessons to take from loss reviews: Attend board meetings and take good minutes. These lessons go together because if board members can’t attend meetings, good minutes will catch them up. It’s not unusual for board members to miss a meeting occasionally, but a pattern of missing meetings is a red flag.

Insist on comprehensive board packets delivered in timely fashion.

Packets should include all topics on the next meeting’s agenda, plus the relevant financial statements, minutes from the previous meetings, and any pertinent news about credit union staff or operations. You should have enough time to read the packet and make notes to prepare for the meeting.

Fraud is often hidden through doctored financial statements and incomplete reports to the board. Carefully reading your packet can reveal discrepancies and red flags.

Packets not only keep you informed, they document the board’s oversight and governance practices. This can be critical in establishing liability.

Ask questions and follow through until you get complete answers. If you don’t understand something in your packet or something presented at a board meeting, speak up. If the matter can’t be clarified during the meeting, request that the appropriate staff or board member follow up promptly.

When necessary, hire outside resources to investigate and advise. A volunteer credit union board may not have the experience and expertise to detect and prevent certain types of internal fraud. But ignorance doesn’t release your fiduciary duties.

Get the outside help you need to assess your internal controls, look for vulnerabilities in policies and procedures, and investigate red flags you can’t address internally.

Two important tools: written credit union fraud policy and whistleblower policy: If your credit union doesn’t have a written, up-to-date policy addressing employee dishonesty, your board and executive team should work with legal counsel to produce one as soon as possible. The policy should spell out the procedures your credit union will follow to deter, detect, investigate, and punish fraudulent acts.

Require employees to read and sign the policy annually.

Another basic protection a credit union board can establish is a whistleblower policy to protect employees who come forward with allegations about wrong-doing. In addition to setting a safe reporting procedure for employees to follow, the policy should protect whistle-blowers from retaliation.

Credit union board members aren’t expected to be professional fraud investigators. But creating a culture of due diligence, documentation, and zerotolerance for fraud – from the top down – is one of the most effective methods of prevention.

Joette Colletts is the senior manager of risk management at CUNA Mutual Group.

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C R E D I T U N I O N P EO P L E

Winne Named to CFPB Credit Union Advisory Council Boston Firefighters Credit Union, Dorchester, MA, President/CEO Bernie Winne, who also serves as a Massachusetts CU League Board Member, was appointed to serve on the Credit Union Advisory Council (CUAC) of the Consumer Financial Protection Bureau (CFPB). Winne joins seven other credit union leaders who were named Bernie Winne to the council. The CUAC advises the CFPB on regulating consumer financial products or services, specifically to share the unique perspectives of credit unions.

The bureau supervises credit unions and other depository institutions with more than $10 billion in assets. While it does not have direct supervisory authority over those credit unions with less than $10 billion in assets, credit unions of all sizes may be affected by CFPB regulations.

Recent examples include CFPB mortgage and remittance regulations.

Commenting on the appointment, League President Paul Gentile said, “We’re very pleased to have Bernie representing credit unions on the advisory board. His insight and thoughtful, deliberative approach will prove to be a great asset to the group.”

Powell with a plaque and an additional plaque will be placed permanently at the museum in her honor.

As part of the celebration, L’Ecuyer also included special recognition for Powell’s husband, Richard Powell, who for the past 15 years has been a “volunteer extraordinaire” in all the support he provided to the ACUM on Powell’s behalf. He then presented a special plaque to Richard.

Powell expressed her thanks to the past and present chairs, board members, and all who have supported her, the museum, and the CU 4 Reality™ Financial Education Program. She recounted a story once told by past League President Dan Egan to members of AACUL: “The museum is ‘our house,’ and we all need to take care of that house. I have taken care of ‘our house,’ and I now pass it on as ‘your house,’ to continue the heritage of the credit union movement.”

President and CEO of MembersFirst Credit Union Named Chairman of NH Jump$tart Coalition

America’s Credit Union Museum’s Powell Honored at Retirement Celebration A large group gathered at America’s Credit Union Museum (ACUM) in Manchester, NH, on Wednesday, October 15, to celebrate the retirement of Peggy Powell and honor her leadership as the executive director of the museum for the past 15 years. Several ACUM board members, League presidents, credit union CEOs, staff, and guests asPeggy Powell sembled with ACUM Chairman Michael L’Ecuyer from Bellwether Community Credit Union for this special occasion.

During the evening, L’Ecuyer highlighted Powell’s accomplishments as the executive director from the early days when the building was donated to the SMB Charitable Foundation by the Lemire family to the groundbreaking and through construction leading up to the grand opening in October 2002. Powell and the board transitioned the SMB Charitable Foundation to the New England Credit Union Heritage Foundation (opening the board as a regional one), and finally to a national board as the America’s Credit Union Museum Foundation. She worked tirelessly to raise funds, worked with credit unions and groups along with the exhibit firm to create the exhibits housed in the museum.

In 2004, she collaborated with the New Hampshire Credit Union League, member credit unions, the museum’s Financial Literacy Educational Committee and the Rundlett Middle School in Concord, NH, to develop the CU 4 Reality™ Financial Education Program, which, since its inception, has reached more than 70,000 students across the country and in Germany to teach them financial literacy. The museum, under Powell’s direction, hosted a major celebration for the 100th anniversary of the credit union movement and film premier in 2008. L’Ecuyer summed up his message by saying, “Peggy’s legacy to America’s Credit Union Museum is her passion, professionalism, and perseverance.” He presented 18 | centerpoint | winter.2014

Bruce Leighton

The New Hampshire Jump$tart Coalition announced its new board of directors and two of its members are from New Hampshire credit unions.

Bruce Leighton, president and CEO of Members First Credit Union, Manchester, NH, will serve as chairman of the group. Jeff Trudel from St. Mary’s Bank Credit Union, Manchester, NH, will serve as treasurer.

Jump$tart also announced that Nathan Saller from Bellwether Community Credit Union, treasurer and long-time Golf Committee chair, would be stepping down from the board. The group offered their thanks for his years of guidance, leadership, and support.

Jeff Trudel

Merrimack Valley Federal Credit Union President and CEO Honored by Local Nonprofit Emmaus Inc, a nonprofit community housing agency located in Haverhill, MA, honored Peter Matthews, president and CEO of Merrimack Valley Federal Credit Union, Lawrence, MA, with its “Community Hero Award.”

Matthews accepted the award at Emmaus’ 12th Peter Matthews Annual “Paving the Road Home” Breakfast, held at DiBurro’s Function Facility in October. The event was attended by many business and community leaders in the Merrimack Valley.

Haverhill resident Heidi Michitson, recipient of last year’s Community Hero Award, presented the honor to Matthews and outlined how Matthews and the Merrimack Valley Federal Credit Union has supported Emmaus for more than a decade, sponsoring Emmaus events such as the annual “Paving the Road Home” Breakfast and its largest fundraiser, Cycle for Shelter, which is held every July.

“Under Peter’s leadership, the Merrimack Valley Federal Credit Union has been one of Emmaus’ angels,” said Michitson. “Peter and

his staff have contributed hundreds of thousands of dollars to resolving homelessness … Peter and his staff also have donated wish-list items to our families and individuals in need from food to children’s items.”

Michitson continued, “Peter serves as an example in the business community. He leads the way in supporting those in most need through financial resources, donations, and volunteerism.”

As he accepted the award, Matthews stressed that it is his employees who work all year long to raise money for Emmaus and the generosity of the credit union’s members that make it all possible.

“I am fortunate to work with a really great group of employees,” Matthews said. “I don’t think it’s complicated. We are all here today … because we believe in Emmaus and I know, going forward, we’re going to continue to do the best we can and I know you’re going to do the same thing. It is such a wonderful organization.”

St. Mary’s Credit Union Appoints Thurston Chief Financial Officer St. Mary’s Credit Union, headquartered in Marlborough, MA, has appointed Larissa C. Thurston to the position of chief financial officer and senior vice president of finance. Prior to joining St. Mary’s Credit Union, Thurston served as vice president and controller of Bank of New England in southern New Hampshire. In her role as CFO, Larissa Thurston Thurston will provide vision, leadership, and management support of the credit union’s financial operations, as well as collaborate with the senior management team on the development and implementation of corporate strategies.

Thurston’s prior banking experience has also included operations responsibilities in the areas of community reinvestment, compliance, technology, and loss management. She is currently a member of the Fiserv Eastern Region User Group.

Thurston holds a bachelor’s degree in accounting as well as an MBA from Southern New Hampshire University. She is a certified Accredited ACH professional by the National ACH Association. She is also a member of the Institute of Managerial Accountants.

DCU Appoints New Vice Presidents Digital Federal Credit Union (DCU), headquartered in Marlborough, MA, recently announced the hiring of Jane E. Fontaine and Caleb J. Cook.

Jane Fontaine has been appointed vice president of human resources and training for the credit union. In her new role, Fontaine will oversee all HR functions; including Benefits, payroll, compensaJane Fontaine tion, and training for DCU. Fontaine is an innovative human resources professional and is experienced in driving excellence and organizational development in a variety of settings.

She most recently served as the vice president of human resources at Marlborough Hospital. Prior to her position at Marlborough Hospital, she served as the director of human resources for the Southcoast Visiting Nurse Association in Fairhaven, MA, and has also served as the manager

of human resources at Benefit Concepts in East Providence, RI, and as a senior human resources consultant for United Healthcare of New England in Warwick, RI. Fontaine earned a bachelor’s degree in business administration and a master’s in management from Johnson & Wales University in Providence, RI. She also holds a master’s in health administration from St. Joseph’s College in Standish, ME, and is a certified Senior Professional in Human Resources (SPHR).

“We are thrilled to have Jane take on the role of vice president of human resources,” said Jim Regan, DCU’s president and CEO. “Jane brings extensive human resources and management experience to the credit union and will be a great addition to DCU’s team.”

In addition, Caleb Cook has been appointed vice president of mortgage lending for the credit union.

In his new role, Cook will be responsible for the administration of DCU’s mortgage loan portfolio, development and enhancement of mortgage products, and management of the mortgage lending department.

Caleb Cook Cook spent the last three years at Seattle Metropolitan Credit Union, located in Seattle, WA, where he served as the vice president of lending. Cook has over 13 years of experience in the credit union industry and previously served as the vice president of lending at Qualstar Credit Union in Redmond, WA, and was the lending and collections manager at Sound Credit Union in Tacoma, WA. He has also served as a real estate loan officer at Watermark Credit Union in Seattle, WA. Cook is originally from Vermont and has a bachelor’s degree in sociology, community development and applied economics from the University of Vermont in Burlington, VT. “We are excited to have Caleb take on the role of vice president of mortgage lending,” said Craig Roy, DCU’s senior vice president of retail lending. “Caleb brings extensive lending and management experience to the credit union and will aid us on our path of growth and development.”

America’s Credit Union Museum Names New Executive Director The board of directors of America’s Credit Union Museum in Manchester, NH, announced the appointment of Stephanie Smith as the organization’s new executive director.

Smith most recently served as director of alumni and development events at St. Paul’s School, an internationally recognized preparatory school in Stephanie Smith Concord, NH. She spent the last 10 years of her career working in the development office at St. Paul’s School and brings to the museum experience working on capital campaigns, library research in archival records, implementing systems to track and monitor fundraising, and planning large-scale alumni events.

Her role will include increasing visibility for the museum and supporting the museum’s $3.3 million Legacy Capital Campaign. The legacy campaign, currently in its quiet phase, seeks to raise money to renovate a second museum building, increasing exhibit space, and creating a credit union inwinter.2014 | centerpoint | 19

C R E D I T U N I O N P EO P L E

dustry research library. The campaign will also raise funds to update conference facilities to better serve credit unions and industry partners looking to hold meetings at the museum.

“I am very excited to join the museum as we launch the Legacy Campaign, and I look forward to a partnership that brings together the innovative ideas from our leaders, colleagues, and credit union members. As a lifelong credit union member, I appreciate the history we have preserved and embrace the opportunity to share it with future generations,” said Smith.

“The board of directors is thrilled to have Stephanie join the museum as executive director,” said Michael L’Ecuyer, chairman of America’s Credit Union Museum. “Stephanie’s experience in development and her excitement for history and the credit union movement will help the museum expand our story of the importance of credit unions and the critical roles that they play in helping members achieve a better financial future.”

Wiegelman Joins MembersFirst Credit Union of NH MembersFirst Credit Union of NH, headquartered in Manchester, NH, announced the addition of Terry Wiegelman to its management team as vice president of Terry Wiegelman marketing and sales. “We are eager to add Terry’s expertise to our team as we drive efforts to enhance our product and service offerings and expand our membership,” said Bruce Leighton, president and CEO of MembersFirst Credit Union. “Terry also understands the financial needs of our community and we look forward to her creative ideas as we continue to deliver innovative financial solutions to our members.”

Prior to joining MembersFirst, Wiegelman led the marketing departments at Granite State Credit Union (GSCU) and Northeast Credit

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Union (NECU). She began her credit union career at GSCU in 1994, ultimately joining the marketing department and leading the team during a period of rapid branch expansion. Most recently she served as assistant vice president of marketing at NECU.

IC Federal Credit Union Announces Employee Promotions

Brenda Bujnevicie

Christine Lane

Bruce Mathieu

Philip Richards

IC Federal Credit Union, headquartered in Fitchburg, MA, recently announced promotions and position changes. Brenda Bujnevicie is now senior vice Holly Sanchez president of mortgage lending and loss mititgation; Christine Lane was promoted to senior vice president of risk and budget; Bruce Mathieu was promoted to senior vice president of retail Francis Dauphinais and consumer lending; Philip Richards is now senior vice president of operations and strategy; and Holly Sanchez has been promoted to training and employee Elaine Sigismondo engagement manager.

Francis Dauphinais remains senior vice president and CFO, and Elaine Sigismondo remains senior vice president of information technology.

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C R E D I T U N I O N C A L E N DA R

Special Events Rhode Island Governmental Affairs Day January 14.........................................................Governor’s Room, RI State House, Providence, RI Make-A-Wish® NH Sweet Thank-You – Manchester Area CUs February 10 Make-A-Wish NH Sweet Thank-You – Seacoast Area CUs February 11 ®

Make-A-Wish Sweet Thank-You – North and West Area CUs February 12 ®

CUNA’s Governmental Affairs Conference (GAC) March 8–12.....................................................Washington Convention Center, Washington, D.C. Credit Union Basketball Championships: RI Boys & Girls High School Finals March 14-15........................................................................................Ryan Center, Kingston, RI “Strike for Gold” Charity Bowling Tournament March 24...................................................................East Providence Lanes, East Providence, RI Great New England Credit Union Show April 29.......................................................................................... Holiday Inn, Boxborough, MA

Conferences and Conventions Spring Volunteer Development Conference April 24 – 26............................................................................ Chatham Bars Inn, Chatham, MA Cooperative Credit Union Association Annual Meeting and Convention October 20 - 23..............................................................................Mohegan Sun, Uncasville, CT

Webinar And Webcast Sessions CFPB Rules for Mortgage Loan Originator Compensation January 6 Disaster Management & Continuity Planning, Including Critical Vendors January 7 Apple Pay, the Mobile Payments Game Changer: Considerations & Action Steps for Credit Unions January 8 HMDA: What to Know Now & What’s on the Horizon?

January 13 IRA Series: IRA & HSA Update 2014-2015 Tax Years January 14 Advanced Endorsements: POAs, Businesses, Trusts & More January 21 Director Series: Credit Union Bylaws: Understanding & Assessing Your Governance Documents January 22

BSA Compliance Series: New BSA Officer Training February 18

Webinar And Webcast Sessions FFIEC Guidelines & Recent Developments in Cyber Security Risk Management February 24 Top 10 Compliance Mistakes in Advertising February 25 Advanced ACH Specialist Series: Setting & Monitoring Effective ACH Exposure Limits February 26 Qualifying Borrowers Using Personal Tax Returns Part 2: Income from Rentals, Royalties, Partnerships, S Corporations & Farms March 3 IRA Series: Traditional & Roth IRA Fundamentals & Compliance Considerations March 4 Avoiding Loss at the Teller Line March 5 Effective Management of Credit Report Disputes: Completing ACDVs, AUDs & Correcting Joint Members’ Credit March 11 Enterprise Risk Management: The Roles of the Board & Supervisory Committee March 12 Flood Insurance Compliance Review & Update March 18 HR Series: Performance Management: A Seasoned Supervisor’s Guide March 19 Social Media Content Strategies for Visibility & Positioning of Your Credit Union Online March 24 The TILA/RESPA Integrated Disclosure Line-by-Line Part 1: Loan Estimate March 25 Director Series: Evaluating Your Board & CEO March 26 New Accounts Series: Opening Trust Accounts: Compliance, Documentation, Signing Authority & Deposit Insurance Issues April 2 ACH Rules Update 2015 April 7 Advanced Issues in Dormant Accounts, Unclaimed Property & Escheatment April 8 Current Issues in Physical Security Risk: Regulatory Compliance & Best Practices April 9

Dealing with ACH Tax Refunds: Exceptions, Posting & Credit Union Responsibilities January 27

CFPB Real Estate Loan Collection Rules for Mortgage Servicers April 15

HR Series: Interviewing Techniques & Best Practices: Hiring Right the First Time January 28

HR Series: Monitoring Employee Work-Related & Personal Social Media: Should We? How? Is it Legal?

April 21

Member Complaint & Response Management January 29 Regulator Issues & Update for the Credit Analyst February 3 Revisiting Your RESPA & TILA Policies to Include the New Integrated Disclosure Requirements February 4 Understanding Appraisals & Appraisal Review Concepts for Lenders February 5 New Accounts Series: Account Opening Due Diligence February 11 Qualifying Borrowers Using Personal Tax Returns Part 1: Basics, Itemized Deductions, Interest & Dividend Income, Sole Proprietorships & Capital Gains February 12

22 | centerpoint | winter.2014

The TILA/RESPA Integrated Disclosure Line-by-Line Part 2: Closing Disclosure April 22 Current Trends in Cyber Crime & Payments Fraud April 23 Required Compliance Series: Red Flags, Privacy & Ethical Considerations: Know Your Compliance Responsibilities April 28 EMV & Debit Cards: Preparing for the October 1, 2015 Liability Shift April 29

Loan Guarantee Program

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The following summary outlines the key benefits of the MemberClose Loan Guaranty Program. This program is designed to help your credit union make more home equity loans without taking on more risk.

This program is made available exclusively to credit unions participating in the MemberClose program.

Key Program Features

RISK

NO

YES

REWARD

• Eligible Loan Types

Fixed & HELOC

• Companion P&C Insurance Company

“A” A.M. Best Rating

• Maximum Loan Amount

$175,000

• Maximum Loan-to-Value

100%

• Minimum FICO Score

660

• Loan Term Maximum Closed End

20 Year

• Loan Term Maximum Open End

10 Yr./10Yr.

• Debt-to-Income Closed End

42%

• Debt-to-Income Open End

40%

• Lien Position

2nd Position

• *Property Valuation ~ MemberClose

- AVM - Collateral Point - Appraisal

• *Insured Lien Position ~ MemberClose

- Equiguard - MLR - Property Report

• Loan Reporting Method

Excel Spreadsheet

• Premium Payment

ACH

* Property Valuation & Insured Lien Position must be obtained through MemberClose in order for the loan to be eligible for coverage.

This document is meant to provide a broad overview of the MemberClose Loan Guaranty Program.

Please refer to the actual Policy for all terms and conditions.

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