A presentation on
CUNA GAC LSCU Attendee Briefing
Instructions to Access Briefing To Register for the Webinar, go to: https://www1.gotomeeting.com/register/386595184
Welcome & Opening Comments
Patrick W. La Pine LSCU President & CEO
Numbers of Note • As of February 21, LSCU had 131 registrants. • 33 are first time attendees. • 11 new members of Congress – 3 new members from Alabama and 8 from Florida. • Over 2,500 Attendees nationwide, plus guests and vendors.
First Time Attendees - Alabama • • • • • • • • • • •
Merrill Mann – APCO Employees CU, Birmingham Wendell Pate – APCO Employees CU, Birmingham Chris Gerety – APCO Employees CU, Birmingham Larry Eagerton – Army Aviation Center FCU, Enterprise Donna Brackin – Army Aviation Center FCU, Dothan Scotty Bell – Family Savings FCU, Gadsden Shane Nobbley – Family Security CU, Decatur Debra McCaghren – Family Security CU, Decatur Cole Sharp – Family Security CU, Decatur Zac Howell, Family Security CU, Decatur Cynthia Henexson, Five Star CU, Dothan
First Time Attendees - Alabama • • • • • • • •
Glenn Sutter, Jefferson County Employees CU, Birmingham Carolyn Conway, Listerhill CU, Sheffield Clay Morgan, Listerhill CU, Sheffield Franklin Brown, Listerhill CU, Sheffield Mark Massey, Listerhill CU, Sheffield Mark Johnson, Naheola Credit Union, Pennington Jeffrey Hasty, Naheola Credit Union, Pennington Tommy Cobb, Tuscaloosa Credit Union, Tuscaloosa
First Time Attendees - Florida • • • • • • • • • • •
Kevin Miller – CFE Federal CU, Lake Mary Kevin Doutherty, CFE Federal CU Lake Mary Marla Ferreira – Dade County FCU, Doral Annamin Wilkinson – Dade County FCU, Doral Mario Garcia – Dade County FCU, Doral Daniel McNutt – Fairwinds CU, Orlando Charlie Lai – Fairwinds CU, Orlando Lisa Snead – Fairwinds CU, Orlando Tyler Van Leuven – Florida CU, Gainsville Hon. Paula O’Neil – Florida West Coast CU, Brandon David Southall – Innovations FCU, Panama City
First Time Attendees - Florida • Suzanne Weinstein – Orlando FCU, Orlando • Julie Renderos – Suncoast Schools FCU, Tampa • Wanda Gilbert – United Police FCU, Miami
Welcome First Time Attendees
New Alabama Members of Congress New Member
Replaced
Martha Roby (2nd)
Bobby Bright
Mo Brooks (5th)
Parker Griffith
Terri Sewell (7th)
Artur Davis
New Florida Members of Congress New Member Steve Southerland (2nd) Richard Nugent (5th) Daniel Webster (8th) Dennis Ross (12th) Fredrica Wilson (17th) Mario Diaz Balart (21st)
Replaced Allen Boyd Ginny Brown-Waite Alan Grayson Adam Putnam Kendrick Meek Linconln Diaz Balart
(Mario is not new to Congress, but to the 21st District) Allen West (22nd) Ron Klein
Sandy Adams (24th) David Rivera (25th)
Susan Kosmas Mario Diaz Balart
Credit Unions & Banks •
126 Alabama Credit Unions (61 FCU / 65 SCU) – – – – –
•
Total Alabama credit union assets Alabama CU market share of assets Average Alabama credit union assets Total Alabama bank assets Average Alabama bank assets
$ 15.1 Billion 6.3% $120 million $226 billion $1.5 billion
174 Florida Credit Unions (98 FCU / 76 SCU) – – – – –
Total Florida credit union assets Florida CU market share of assets Average Florida credit union assets Total Florida bank assets Average Florida bank assets
$42.1 billion 21.6% $242 million $152 billion $603 million
Project Zip Code • Project Zip Code (PZC) is a secure web based program that counts your credit union members and matches them by congressional district, state legislative district and county. • These numbers are uploaded to CUNA’s PZC website and combined with data from credit unions nationwide. • This data aids in federal and state advocacy efforts, and is useful to credit unions interested in ATM expansion or shared branching. • Please download the program at PZC Online
Project Zip Code • Your information is completely secure with PZC. In fact, only the number of credit union members is transmitted to the PZC website and member data cannot be viewed by anyone outside your organization. • The master census that results from credit unions running PZC helps demonstrate the strength of credit union membership across the nation. • If you have not yet run Project Zip Code in 2010 or 2011, please contact Robbie Gordon or Justin Thames.
PZC Counted LSCU Credit Union Members by Congressional District (based on 82% mapped) Alabama
Credit Unions
CU Members
Total Pop.
Congressional District 1
54
109,238
634,771
Congressional District 2
53
180,857
636,123
Congressional District 3
52
111,724
633,537
Congressional District 4
51
152,979
637,832
Congressional District 5
50
259,729
637,904
Congressional District 6
52
190,479
633,535
Congressional District 7
53
189,353
637,398
Total
1,194,359
4,447,100
PZC Counted LSCU Credit Union Members by Congressional District (based on 93% mapped) Florida
Credit Unions
CU Members
Population
Congressional District 1
77
125,125
643,389
Congressional District 2
77
190,071
635,168
Congressional District 3
77
204,353
625,517
Congressional District 4
76
256,040
640,369
Congressional District 5
77
189,637
632,664
Congressional District 6
77
244,291
647,117
Congressional District 7
76
150,580
640,850
Congressional District 8
77
160,813
643,641
Congressional District 9
77
226,940
647,506
Congressional District 10
74
221,017
637,620
PZC Counted LSCU Credit Union Members by Congressional District (based on 93% mapped) Florida
Credit Unions
CU Members
Population
Congressional District 11
76
249,289
635,002
Congressional District 12
77
137,745
638,530
Congressional District 13
76
155,304
641,364
Congressional District 14
76
154,401
639,943
Congressional District 15
77
265,328
642,191
Congressional District 16
75
65,993
648,931
Congressional District 17
71
110,085
637,414
Congressional District 18
74
57,418
636,057
Congressional District 19
73
64,812
633,268
Congressional District 20
72
106,129
644,503
PZC Counted LSCU Credit Union Members by Congressional District (based on 93% mapped) Florida
Credit Unions
CU Members
Population
Congressional District 21
69
84,363
639,214
Congressional District 22
72
69,790
631,670
Congressional District 23
74
91,969
644,384
Congressional District 24
76
218,631
638,666
Congressional District 25
69
115,185
637,370
Total
3,909,601
15,982,378
LSCU Staff Contact Information Grand Hyatt Washington 1000 H Street NW, Washington, DC 20001 Phone: 202-582-1234 Fax: 202-637-4781
• • • • • •
Patrick La Pine Will McCarty Jared Ross (FL) Jason Cochran (AL) Justin Thames (FL) Robbie Gordon (AL)
(850) 212-3160 (Mobile) (205) 516-6985 (Mobile) (850) 590-6570 (Mobile) (205) 249-4478 (Mobile) (850) 345-7795 (Mobile) (205) 834-1266 (Mobile)
Conference Agenda Highlights Sunday, February 27, 2011 •
12:00 - 8:30 p.m. Conference Registration & Welcome Center Open.
•
5:00 – 6:30 p.m. – LSCU Hospitality Reception – Sponsors: Southeast Corporate Credit Union and Leverage – Hosted bar and Hors D’oeuvres – Penn Quarter Room in the Hyatt
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7:00 - 8:30 p.m. Exhibit Hall Grand Opening.
•
8:30 p.m. Kickoff Concert: Three Dog Night - Presented by CUNA Councils.
Conference Agenda Highlights Monday, February 22, 2011 •
7:00 a.m. – 5:00 p.m. Conference Registration Open
•
7:30 - 8:45 a.m. Exhibit Hall Open (Continental Breakfast)
•
9:00 - 10:30 a.m. Opening General Session: – Mark Halperin and John Heilmann
•
10:30 - 11:30 a.m. CUNA Annual General Meeting
•
11:30 a.m. - 1:30 p.m. Exhibit Hall Open (lunch provided)
Conference Agenda Highlights Monday, February 22, 2011 •
1:30 - 2:30 p.m. Legislative and Political Update
•
2:30 – 3:30 p.m. General Session with Keynote Speaker – Chesley B. “Sully” Sullenberger III
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4:30 – 6:00 p.m. LSCU Welcoming Reception – Sponsors: Morgan Stanley Smith Barney / CU Solutions – Hosted bar and Heavy Hors D’oeuvres – Penn Quarter Room in the Hyatt
•
5:30 p.m. Herb Wegner Memorial Awards Reception / Dinner (Grand Hyatt) (Separate registration required)
Conference Agenda Highlights Tuesday, February 23, 2011 •
7:00 a.m. – 5:00 p.m. Conference Registration
•
7:30 - 8:45 a.m. Exhibit Hall Open (continental breakfast)
•
9:00 a.m. - 12:00 p.m. General Session: – Point Counterpoint with Arrianna Huffington and Mary Matalin
•
11:30 a.m. - 1:45 p.m. Exhibit Hall Open (lunch provided)
•
2:00 -4:45 – Breakout Sessions
Conference Agenda Highlights Tuesday, February 23, 2011 •
5:00 – 6:00 LSCU Hospitality Reception – Sponsors: Co-Op Financial Services – Hosted bar and Hors D’oeuvres – Wilson-Roosevelt Room in the Hyatt
•
4:45 - 6:00 p.m. Reception with NCUA Board and Regional Directors
•
4:45 - 6:00 p.m. Exhibit Hall Closing Session
•
9:00 - 10:30 p.m. Late Night at the GAC
Conference Agenda Highlights Wednesday, February 24, 2011 •
8:00 a.m. - 12:00 p.m. Conference Registration
•
8:30 - 11:45 a.m. General Session: – 8:45 Alabama Congressman Spencer Bachus • All Alabama and Florida Attendees Invited backstage for out “Hike-the-Hill” meeting with the Chairman immediately after he speaks
– 9:30 Florida Congresswoman Debbie Wasserman-Shultz
•
Capitol Hill Visits Begin
•
7:00 p.m. Closing Conference Gala
Conference Agenda Highlights Thursday, February 25, 2010 •
Capitol Hill Visits continue in the morning
•
Afternoon Travel Home
PAC Lapel Pins
Chairman’s Club President’s Club Congressional Club Capitol Club Ambassador’s Club
$500 or more $250 -$499 $100 - $249 $50 - $99 $25 - $49
Capitol Hill Visits • The League of Southeastern Credit Unions will be conducting Hill visits Wednesday afternoon and Thursday morning • Remember, we are in Washington to show our grassroots strength to our federal lawmakers. So, PLEASE make sure to attend the Hill visits!
Capitol Hill Visits • To ensure that you have the most accurate and complete schedule of our meetings, the League will be sending the schedule separately by email at the end of the week before departure for the GAC. • Updates to the schedules may be necessary as late as just days before the meetings. The most up-to-date schedules will be distributed at the League’s hospitality receptions on Sunday, Monday, and Tuesday nights, so please attend these events. • Senate meetings are limited (due to space considerations in the offices) and individuals will be assigned to ensure broadest representation of credit unions.
Capitol Hill Visits •
The Hill meeting schedules are based your credit union’s headquarters and branch locations.
•
If your Hill schedule permits, please feel free to attend your own (home) representative’s meeting.
•
LSCU staff will function as team leaders in Hill meetings. They will “tee it up” and look to you for specifics of how the issue impacts your members and affects your credit unions.
Hill Meeting Tips •
Arrive at least 5 minutes early for your Hill visits. Wait in the hall until other CU officials arrive.
•
LSCU Staff will provide the lawmaker or their staffer with a copy of federal legislative issues briefing materials.
•
Be prepared – Know the issues!
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Be sure to follow-up on your meetings with a “Thank You” letter, note or email.
•
Please pass along any important information learned in your meetings (and any pictures) to LSCU Governmental Affairs staff at Will.McCarty@lscu.coop
QUESTIONS?
Legislative Update • Our Message to lawmakers and their staff this year is “Credit unions are the best way for consumers to conduct their financial services” • The message revolves around the credit union difference (maintaining our tax status); how the difference creates benefits (better deal for consumers), added benefit we could provide if given the authority (MBL), the imperative of maintaining our tax exempt status, and challenges to providing that benefit (Interchange, the need for Capital Reform).
The Credit Union Benefit “Credit Unions are the best way for consumers to conduct their financial services” •
•
With 11 new members of Congress from our two delegations, plus new members of staff in key positions, we must educate them what credit unions are, and how they benefit their members. Do NOT assume they understand credit unions. The unique structure and nature of credit unions leads to a better deal for consumers: – Governed by a volunteer board elected by the membership, not controlled by outside stockholders; – Locally owned and operated; – Higher rates of return on deposits – Lower rates on loans and fees than banks;
The Credit Union Benefit “Credit Unions are the best way for consumers to conduct their financial services” •
Credit Unions benefit all consumers, not just their members: – The presence of credit unions in the marketplace motivates banks to keep their rates and fees competitive (although not what credit unions offer); – Credit unions are local, so the benefit stays local to benefit their communities; – Credit unions provide stability in the financial industry; – Credit unions did not engage in the risky behavior that caused the financial downturn, and did NOT seek or receive a taxpayer bailout.
The Credit Union Benefit Credit Unions Continued to Loan While Others Pulled Back • From 2008 – 2010 Credit Unions: – Increased real estate lending 14.4% while banks shrunk real estate lending by 10%; – Increased small business loans by 39.2% while banks shrunk 18.4%; – Increased total lending by 7.6% while banks shrunk 6.5%
• Even while increasing their lending as others pulled back, credit union rates continued to average approximately 1.5 to 2 percentage points less than banks on most loan products.
The Credit Union Benefit Alabama: • • •
Credit unions provided $189,582,926 in direct benefit to their 1.7 million members from September 2009 – September 2010. $108 per member saved during that time $206 per member household (assume 1.9 members per household)
Florida: • • •
Credit unions provided $310,349,410 in direct benefit to their 4.5 million members from September 2009 – September 2010. $68 per member saved during that time $129 per member household (assume 1.9 members per household)
Value of the Credit Union Tax Status • Congress has provided the credit union tax exemption because of the not-for-profit cooperative structure of credit unions and our mission to serve consumers. • The tax status is not based on the size of the credit union, but on the structure, which is the same regardless of size. • The credit union tax exemption is equal to $600 million, but creates $10 billion in consumer benefits annually. • Eliminating the tax exempt status eliminates credit unions and the benefits they provide. • Members of Congress should be outspoken in support of the credit union tax exempt status, and should not use the tax status as a reason to prevent improvements in the Federal Credit Union Act.
QUESTIONS?
Interchange Fees • Interchange fees are paid by merchants to credit unions and banks that issue debit and credit cards as their fair share of the cost of the payment system. • Merchants benefit from consumer use of debit cards through lowered risk of less cash on premises, certainty of payment, and the risk of fraud being shifted to the card issuer. They should not expect to receive benefit without compensation. • Interchange revenue is vital to the card issuer to cover operating expenses of offering the cards, fraud risk management, and risk of consumer non-payment.
Interchange Fees • Dodd-Frank contained provisions that regulate debit interchange rates through an artificially limited set of factors. • The Federal Reserve failed to consider some factors that Congress did include (fraud costs). • The result is an unrealistic limit of 12 cent per transaction. • While issuers under $10 billion are supposed to be exempt, the Federal Reserve’s proposed rule does not adequately enforce this exemption. • If possible, please have ready the difference between: – What your debit card program costs are and the losses at 12 cents. – What the difference in income would be comparing current income and 12 cents per transaction.
Interchange Fees • During debate on the Durbin Amendment FL Congresswoman Debbie Wasserman-Shultz generated a “Dear Conferee” letter asking that the Durbin Amendment be stripped from the Dodd-Frank Act. • Signed by 130 members of Congress: – – – – –
Jeff Miller John Mica Bill Posey Ileana Ros-Lehtinen Alcee Hastings
• Please thank Congresswoman Shultz and the members who signed the letter.
Interchange Fees Reaction to the Federal Reserve’s Proposal • Congressman Spencer Bachus sent a letter to the Federal Reserve with concerns over the Interchange Rule and the need to protect smaller issuers; • Senator Richard Shelby and 12 other Senators also sent a letter to the Federal Reserve outlining concerns. • Please thank Congressman Bachus and Senator Shelby • House Subcommittee hearing held. – – – –
How the Fed arrived at the limits; Why fraud costs were not included; Impact on smaller issuers like credit unions and consumers; Significant discussion in the hearing on the need to slow it down and start over with the proposed rule.
Interchange Fees • Government intervention in debit interchange fees will result in cost-shifting from merchants to consumers and increased fees for consumers to obtain debit cards. • The rule, as written, could disadvantage smaller issuers like credit unions and force consumers to higher cost debit cards from larger issuers. • The proposal by the Federal Reserve is NOT what Congress intended as part of the Durbin Amendment. • Members of Congress should support legislation that stops the implementation of the Federal Reserve debit interchange regulation so that the impact on consumers can be studied and so Congress can start over.
QUESTIONS?
The Need for Supplemental Capital • Credit unions historically have the lowest default/delinquency rates in virtually all categories of loans and maintained average net worth ratios well in excess of banks. • Despite this historical strength, credit unions remain the most highly regulated and restricted of all insured institutions and are the only insured institutions that cannot issue some form of capital instruments. • By law, not regulation as is the case for other financial institutions, credit unions must maintain a 7% net worth ratio to be considered “well capitalized”. The law requires that only retained earnings constitute net worth for credit unions.
The Need for Supplemental Capital • The financial crisis has led to a drop of in the average credit union capital ratio and a significant decrease in the number of credit unions that have a net worth ratio of 9% or more. • More credit unions need to raise capital at a time when the outlook for net income is not strong. – Net interest income has been on a long-term downward trend; – Interchange income is under attack and risks reduction
• Without access to supplemental capital and with earnings facing challenges, credit unions and their members will face reduced services, disadvantageous member pricing and slow growth. • Congress should modify the definition of credit union net worth to include supplemental forms of Capital .
QUESTIONS?
Member Business Lending • It is increasingly difficult for small businesses to obtain credit due to the uncertainty in the economy after the subprime lending crisis, as well as the consolidation of commercial banks in recent years. • Small business owners are seeing their existing credit lines with banks reduced or cut off. • Small business owners who do obtain credit often complain the terms are much less attractive than they could be if more lenders were in the market. • While other lenders have reduced their small business lending, credit unions have increased it by almost 40% over the last 3 years.
Member Business Lending
• •
• •
Credit unions have a history of making small business loans to their members. Credit unions have been making MBL’s since the early 1900s. Until 1998, there were no limits on the volume of MBL’s credit unions could make or hold. Statutory limits on CU MBL’s did not appear until passage of the Credit Union Membership Access Act. CU’s are subject to a cap of 12.25% of their total assets. MBL loss rates are lower than those on CU consumer loans and are a fraction of commercial loan loss rates at banks.
Member Business Lending • There is no economic, safety and soundness, or historical reason for the current cap. • In the next year, credit union lending to small businesses could increase over $10 billion, helping small businesses create over 100,000 new jobs if Congress increases the statutory cap on credit union member business lending. • This economic stimulus can be accomplished without costing the taxpayers a dime or increasing the size of government. • Unlike banks, credit unions do not need taxpayer assistance to encourage them to do more business lending, we only need the authority from Congress.
Member Business Lending • During the last Congress HR 3380 (Kanjorski) and S 2919 (Schumer) would raise MBL to 25% of assets, and raise the “de minimis” threshold from $50,000 to $250,000, and exempt loans to non-profit religious organizations and loans made in qualified underserved areas. • Co-Sponsored by: Jeff Miller Corrine Brown Gus Bilirakis Kathy Castor Bill Posey Tom Rooney Sen. Bill Nelson • Please thank these members for their past support of Credit Union Member Business Lending
Member Business Lending Alabama • 42 credit unions have about $429 million in outstanding member business loans, with an average loan size of $159,000. • Credit union member business lending in Alabama has grown 8% over the last 12 months, while commercial bank business lending has shrunk 4% • Removal of the 12.25% cap will produce over $184 million in new member business loans, creating over 1,900 new jobs in Alabama.
Member Business Lending Florida • 69 credit unions have over $1.1 billion in outstanding member business loans, with an average size of $361,000. • Credit union member business lending in Florida has grown 2% over the last 12 months, while commercial bank business lending has shrunk 4%. • Removal of the 12.25% cap will produce over $543 million in new member business loans, creating over 5,905 new jobs in Flroida.
QUESTIONS?
Travel Safely! We look forward to seeing you in Washington.