The Point: Oct. 9, 2013
Reminder: Volunteer Conference deadline tomorrow
Credit unionists planning to attend the Volunteer Conference in Cooperstown, N.Y., should register by tomorrow, Oct. 10. Complete details and online registration are available on the Credit Union Association of New York’s website.
The New York Association and the Pennsylvania Credit Union Association are co-hosting the conference, which will be held Oct. 18-19 at the Otesaga Resort Hotel. All credit union directors and supervisory committee members are encouraged to attend.
The event will give attendees a chance to network with peers from New York and Pennsylvania while attending specialized breakout sessions and hearing engaging presentations from credit union and industry leaders. A special trip to the nearby Baseball Hall of Fame and Fenimore Museum is also planned.
Association successfully advocates for FHA loan regulation adjustment
In a positive development for New York credit unions, the NYS Department of Financial Services (DFS) has issued an emergency regulation that temporarily adjusts the subprime threshold for certain FHA loans.
The emergency regulation—which the Credit Union Association of New York strongly advocated for— is a response to revisions made to FHA’s mortgage insurance premium policies this summer. The revisions resulted in increases in the mortgage insurance premiums used in calculating APR, which led to an overall increase in APR and caused many potential loans to exceed the subprime threshold.
Based on the assumption the market would self-correct, the DFS originally issued a temporary order through Sept. 30, directing lenders not to follow the revised FHA policy.
When it became clear the market would not self-correct, the Association continued dialoguing with the DFS to ensure a permanent solution. The newly released emergency regulation adjusts the subprime threshold for FHA insured loans by 75 basis points, effectively restoring mortgage financing levels to where they were prior to the policy revision.
Title I home equity loans, home equity conversion mortgages and any FHA loans that were deemed subprime prior to the policy revision are excluded from the adjustment.
In the coming weeks, the DFS will issue a proposed final rule based on the emergency regulation. The Association will provide details on the proposed rule when it becomes available, and credit unions are encouraged to provide comments.
NCUA to implement exam changes Jan. 1
Changes that will streamline credit union examination reports and set clearer expectations for credit unions and examiners will be introduced Jan. 1, according to a letter to credit unions released yesterday by NCUA.
One specific change outlined in the letter is the separation of the Document of Resolution (DOR) and Examiner's Findings sections of examination reports into stand-alone documents, which NCUA believes will help credit unions differentiate between major and minor problems in order to prioritize corrective actions.
Additional changes include:
- Examiner concerns and documented support for material problems listed in the examinations will be included in the DOR, along with corrective action plans.
- A new status update template has been developed as part of the exam document changes. The update will provide details on credit union outstanding administrative actions, including Letters of Understanding and Preliminary Warning Letters. The informal discussion document will be eliminated.
- Examiners will need to follow up with credit union officials on any outstanding DOR items within 120 days after the timeframe for completion has passed. Credit unions that have received DORs instructing them to cease unsafe or unsound practices will need to notify their respective NCUA Regional Office in writing once they have implemented corrective actions.
- Reasonable solutions provided by a given credit union will become the corrective action plan included in the DOR.
NCUA considered feedback from credit union industry officials when developing the changes, along with recommendations from the U.S. Government Accountability Office and NCUA's own Office of Inspector General.
Reminder: Scholarship Program registration deadline is Friday
Credit unions/chapters interested in participating in the Credit Union Association of New York's annual, statewide Scholarship Program have until this Friday, Oct. 11, to submit registration and payment. For details and registration instructions, visit the Association’s website.
As in previous years, participating credit unions/chapters can offer scholarships to their eligible, college-bound members. Numerous resources are available to assist participants in promoting and implementing the program.
All completed scholarship applications should be submitted to the Association by Feb. 14, 2014, and scholarship recipients will be announced in April. Last year, participating credit unions/chapters awarded $24,500 in scholarships to 37 students through the program.
Discovery Conference insight: Investment programs benefit CUs, members
Investment and insurance products are the largest untapped source of member-friendly, non-interest income for credit unions, according to one of the virtual sessions offered during CUNA Mutual Group’s Online Discovery Conference last week.
The session provided data from a recent Raddon Financial Group study, which found that converting certificates of deposit to investment accounts can result in substantial revenue increases. According to the study, credit unions lose an average of $165 on CDs, but make an average of $177 by providing investment products to members.
Other highlights from the session include:
- Only 3 percent of credit union members invest through their credit union.
- Forty-six percent of credit union members have investment accounts elsewhere.
- Fifty-four percent of credit union members were unsure if their credit union offered an investment program.
More than 1,300 credit unionists from around the world attended this year’s Online Discovery Conference, which provides participants with insights and inspiration through free online education. To view the sessions on demand, visit CUNA Mutual Group’s website.
CUNA Regulatory Advocacy Report (CUNA member log-in/registration required.)
CUNA Legislative Update (CUNA member log-in/registration required.)