League Honors Volunteer and Professional of the Year for 2011

a publication of the Idaho credit union league
Gem
Gem
League Honors Volunteer and
Professional of the Year for 2011
At the Awards Gala on Friday, May 18, the Idaho Credit
Union League announced the recipients of the Outstanding Volunteer of the Year and Outstanding Professional of
the Year Awards for 2011.
This year’s Volunteer honoree is Joan Erickson, Chair of
the Supervisory Committee at Clearwater Credit Union
in Lewiston. Joan has been in the credit union movement
since 1969 when she started working for Lewis Clark
Credit Union. She has served in many capacities at both
Lewis Clark and Clearwater credit unions, as well as serving on the Board of Directors for the Idaho Credit Union
League for many years where she was a member of several
League committees. Her love of credit unions and all they
stand for have lead to a long career serving members, and
credit unions’ love of Joan have brought her out of retirement on a few occasions to help out wherever her expertise
is needed.
June 2012
Inside
Legally Speaking........................2
Cyber & Security Pkg..............3
Consumer Program................3
New Compliance Hire.............3
Joan is the only person who has received both the Professional of the Year Award (1991) and the
Volunteer of the Year Award.
This year’s Professional of the Year Award recipient is Rob Taylor,
CEO of ISU-CU in Pocatello. Rob has been involved with credit
unions for nearly 25 years. He has held a number of positions with
increasing responsibilities in lending, information technology, and
ultimately as CEO. Rob also serves as Vice Chair on the Board of
the Idaho Credit union League. He has also been an active member
of the Governmental Affairs Committee and has traveled to Washington, DC, to meet with Idaho’s Congressional Delegation about
issues of concern to Idaho credit unions.
CUs in the News.......................4
Rob had to leave the Annual Meeting early to attend another meeting — his award was accepted by ISU-CU’s Board Chair, Bob Tokle.
Highlights of AM 2012.... 4&5
Congratulations to two great Idaho credit union representatives! t
Unpaid Internships...................6
Funds Raised for NCUF.........7
CU4Kids $$................................7
by Alan Cameron
League President/CEO
In its May Board meeting, the NCUA
Board amended its regulations to require
federally insured credit unions (FICUs) to
maintain written policies that address their
management of loan workout arrangements
and non-accrual policies for loans. The rule
includes an interpretive ruling and policy
statement (IRPS) as an appendix that will
give FICUs guidelines to help them comply
with the rule including the reporting of
troubled debt restructured loans (TDRs) in
Call Reports.
The treatment of TDRs has been particularly vexing for credit unions especially
during the recent recession and its aftermath. A lack of consistency of definition,
revisions to financial accounting standards,
and differences in examiner approach all
have contributed to the confusion. The
NCUA Board hopes to cure this with its
new regulation.
The new regulation includes a glossary of
terms so that everyone is on the same page.
Perhaps the most important of these is the
definition of “Troubled Debt Restructuring,” which is based on GAAP and “means
a restructuring in which a credit union, for
economic or legal reasons related to a member borrower’s financial difficulties, grants
a concession to the borrower that it would
not otherwise consider. The restructuring
of a loan may include, but is not necessarily limited to: (1) the transfer from the
borrower to the credit union of real estate,
receivables from third parties, other assets,
or an equity interest in the borrower in
full or partial satisfaction of the loan, (2) a
modification of the loan terms, such as a reduction of the stated interest rate, principal,
or accrued interest or an extension of the
maturity date at a stated interest rate lower
than the current market rate for new debt
with similar risk, or (3) a combination of
the above. A loan extended or renewed at a
stated interest rate equal to the current market interest rate for new debt with similar
risk is not to be reported as a restructured
troubled loan.”
For the first time, all FICUs are required
to adopt policies that govern their loan
modifications (called “workouts” in the new
regulation) and non-accrual practices. The
loan workout policy must be in writing
and include controls to ensure the policy
is consistently applied. Each credit union
must customize their policy and practices to
reflect their size and complexity, the credit
union’s broader risk mitigation strategies,
and must include limits for total workout
portfolio and each type of workout as a
percentage of net worth. The policy must
define the conditions under which the
credit union will consider a loan workout,
including limits on the number of times
an individual loan may be modified. The
policy must also ensure credit unions make
loan workout decisions based on the borrower’s renewed willingness and ability to
repay the loan, which must be separately
documented. In addition, the policy must
establish sound controls to ensure loan
workouts are appropriately structured and
that all workouts are adequately controlled
and monitored by the credit union’s Board.
According to the new regulation, FICU
management information systems need to
be capable of tracking the principal reductions and charge-off history of workout
loans by type of program. Any decision to
re-age, extend, defer, renew, or rewrite a
loan needs to be identified and documented
by the management information system,
including the frequency and extent such
action has been taken.
In what is being reported as a money-saving
change, the new regulation now requires
credit unions to calculate and report the
past due status of loans consistent with their
terms as modified. This revision eliminates
the previous requirement that credit unions
calculate and track TDRs based on the
original contract until the member had
made six consecutive payments under the
modified terms. In most crdit unions, the
system for tracking TDRs in this manner
was a mostly manual process that now can
be eliminated.
The new regulation requires FICUs to
“ensure appropriate income recognition” by
following the rules described. Under this
policy, FICUs may not accrue interest on any
loan that has been in default for 90 days or
more unless the loan is both well-secured and
in the process of collection. “Well secured”
means the loan is fully collateralized or supported by an adequate guarantee. “In the
process of collection” includes legal action,
including judgment enforcement procedures
or through collection efforts not involving
legal action, which are reasonably expected to
result in repayment of the debt or restoration
to a current status in the near future, i.e.,
generally within the next 90 days. A FICU
may restore a loan to accrual status when it
is past due less than 90 days and the credit
union is plausibly assured of repayment of
the remaining contractual principal and
interest within a reasonable period.
In developing written policies to comply
with this regulation, credit unions may
want to refer to previously adopted guidance.The Financial Accounting Standards
Board revisions to its TDR Rule can be
found online at: http://www.fasb.org/cs/Blo
bServer?blobcol=uridata&blobtable=Mungo
Blobs&blobkey=id&blobwhere=11758222
7814&blobheader=application%2Fpdf.
The Federal Financial Institutions Examination Council (FFIEC) Uniform Retail
Credit Classification and Account Management Policy provides guidance on appropriate loan modification limitations: http://
www.gpo.gov/fdsys/pkg/FR-2000-06-12/
pdf/00-14704.pdf#page=1.
Finally, NCUA Letter 09-CU-19 outlines
policy requirements for mortgage loan
modification programs that can be adapted
in part for broader loan workout policies:
http://www.ncua.gov/Resources/Documents/LCU2009-19.pdf.
NCUA has established an aggressive timeline for compliance with the requirements
of this new regulation so credit unions need
to begin the process of drafting their policies and procedures right away. NCUA examiners will begin reviewing loan workout
and non-accrual policies under the new rule
beginning with examinations conducted after October 1, 2012. As of that date, FICUs
should no longer accrue interest on loans
more than 90 days delinquent. t
CUNA Mutual Group Enhances Cyber & Security Incident Package
CUNA Mutual Group has enhanced its Cyber & Security Incident
(CSI) insurance package by adding a new online resource that provides policyholders with front-end education and awareness of cyber
liability and data breach risks, as well as access to a “Breach Coach”
and other remediation tools should a breach occur.
The site is available at no additional cost and offers policyholders
resources to identify, measure and manage cyber liability and data
breach exposures, said Brad Mundine, CUNA Mutual Group senior
manager of risk management.
feature will provide users with information needed to notify CUNA
Mutual Group of a potential data breach along with contact information at Kroll Fraud Solutions to begin assessing the breach.
The CSI Package, introduced in October 2010, pairs a broad insurance policy with two levels of critical data breach services to protect
credit unions and their members in the event of an internal data
breach that compromises sensitive member data. CSI has been well
received and now protects approximately 300 credit unions. t
It also offers loss mitigation information in the event of a data breach
and a Breach Coach and Incident Roadmap. The Breach Coach
CUNA Mutual Group Consumer Program Ready to Grow
According to the Life and Health Insurance Foundation for Education (LIFE) organization, 35 million households in the United
States have no life insurance coverage, and many won’t shop for
coverage until it’s too late. These households represent substantial
opportunity for providing financial advice and have shown a willingness to consider credit union partners for insurance and investments.
This is where credit unions can look to CUNA Mutual Group for
expertise.
The mission of their Direct to Consumer business is to get more
members protected and each of them protected more. CUNA
Mutual Group believes providing members with access to needed
protection should be core to a credit union’s business. By means of
their MemberCONNECT® program, they connect credit unions
and members through valuable insurance products like accident, life,
auto and home, and long term care. Through these offerings, CUNA
Mutual Group currently protects more than 12 million members
from 400 credit unions.
Continuous improvement has been and continues to be a mainstay
of MemberCONNECT during its 25+ year history. Today, CUNA
Mutual Group is making substantial investments spanning the next
five years to further accelerate and enhance benefits for members
and credit unions. As a result of these investments, CUNA Mutual
Group will be introducing to credit unions later this year new capabilities to help improve the member experience, which will lead to
stronger program performance for the credit union on many fronts
— deeper member relationships, consistent, high-quality member
service and stronger financial results. t
Courts Enjoin NLRB Posting Rule
A couple of federal courts have enjoined the implementation of
the new posting rule promulgated by the National Labor Relations
Board (NLRB). The new rule would require all employers to post a
workplace notice telling employees about the rights to unionize and
act in concert to address terms and conditions of employment. A
lower court had upheld the power of the NLRB to impose such a
rule, but that ruling is now on appeal. The rule will remain enjoined
pending the outcome of the appeal. t
League Hires New Compliance Specialist
Will Hall joined the League last month as the “New Val”, as many have described him since he
replaced Val Brooks in the Compliance and Governmental Affairs department. Will grew up on
a farm in the mountains of southwest Virginia. After graduating from college in North Carolina,
he moved to Washington, DC, and worked for several years at an intellectual property law firm.
Later, he attended law school in Vermont. In 2000, Will joined the credit union movement and
worked for NAFCU (National Association of Federal Credit Unions) for several years, specializing in regulatory affairs and compliance. In addition to his experience with credit unions, Will
has worked for restaurants, raised fruits and vegetables for sale at farmers markets, managed
farmers markets and worked in vineyards. He looks forward to exploring his new home state and
has already enjoyed a visit to the World Center for Birds of Prey and one of the area’s great hot
springs. You can reach Will at whall@idahocul.org or by calling 800-627-1820 ext. 123. t
Credit Unions In the News . . .
Potlatch No. 1 FCU Wins Parade Float 1st Prize
P1FCU staff participated in the annual Asotin County Fair and Rodeo parade. This year’s theme was “Rainbow
Dreams and Barnyard Scenes,” and
P1FCU fashioned a Chevy Tracker
into a bigger than life-size rooster!
The float brought home first prize
in the commercial category and the
prize for the most creativity. Pictured
are Deloris Robertson, teller, Lynda
Barrentine, administrative assistant, Heather Bennett, teller, along with Heather’s two
daughters, Taylor and April, and husband Dan.
Highlights from the 2012 ICUL Annual Meeting
Reminder to Beware the Unpaid Internship
With summer approaching, remember to be cautious in bringing
aboard any unpaid interns. The bottom line on interns is that they
must be paid unless they are basically just watching; i.e., the organization cannot derive any immediate advantages from the activities
of the intern. Most employers will pay interns, because they typically cannot set up a scenario where they derive no benefit from an
intern’s work.
The following six criteria must be applied when making this
determination:
The U.S. Department of Labor (DOL) fact sheet lays out this test
for unpaid interns: “There are some circumstances under which individuals who participate in ‘for-profit’ private sector internships or
training programs may do so without compensation. The Supreme
Court has held that the term ‘suffer or permit to work’ [under the
Fair Labor Standards Act] cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of
another who provides aid or instruction. This may apply to interns
who receive training for their own educational benefit if the training
meets certain criteria. The determination of whether an internship
or training program meets this exclusion depends upon all of the
facts and circumstances of each such program.
3) The intern does not displace regular employees, but works under
close supervision of existing staff;
1) The internship, even though it includes actual operation of the
facilities of the employer, is similar to training that would be given
in an educational environment;
2) The internship experience is for the benefit of the intern;
4) The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its
operations may actually be impeded;
5) The intern is not necessarily entitled to a job at the conclusion of
the internship; and
6) The employer and the intern understand that the intern is not
entitled to wages for the time spent in the internship.”
Here is the link to the DOL fact sheet on the topic: http://www.dol.
gov/whd/regs/compliance/whdfs71.pdf. t
Westmark CU Reaffiliates With League
Westmark CU has reaffiliated with the Idaho Credit Union League. Westmark CU was
founded in 1954 as Atomic Workers CU by eleven Idaho national Engineering Laboratory
employees, with a single location in Idaho Falls. Initially, most of the credit union’s business
was conducted in the basement or house of different board members or members. Things
have changed for the credit union — it now serves 42,000 members at ten branches in
eastern and southwest Idaho. Please welcome CEO Rich Leonardson, staff and volunteers of
Westmark CU. t
League Hires Additional Accounting Clerk
Mary Hudson joined the payroll team in May as an accounting clerk. She has more than 30
years experience in the accounting field. Having worked in numerous venues as a bookkeeper,
she is ready to start a new adventure with us here at the Idaho Credit Union League. Mary is
an Idaho native and spent ten years on the Oregon coast. She is currently on the path toward a
Bachelor’s in Accounting. She enjoys biking, hiking, painting, and her three children. She will
be available Monday through Friday from 8:30 a.m. to 2:00 p.m. t
Golfers Raise Funds for NCUF
The weather cooperated and a great time was had by all who participated in the 18th Annual Tom Stivison Memorial Golf Tournament,
which was sponsored by Tom’s former credit union, TruGrocer
Federal Credit Union, and CUNA Mutual Group.
Tom Stivison was the CEO of TruGrocer FCU (then Albertsons
Employees’ FCU) from 1984 to 1994. He served on the League
Board for 15 years and held each position on the Executive Committee during his tenure. He also served on numerous League
Committees and was the first recipient of the Idaho Credit Union
League’s Professional of the Year Award in 1990. Tom passed away
on June 4, 1994 after a brief illness of acute leukemia. He was 45.
An ardent credit union supporter, Tom would be pleased to know
that participants raised $4,115 for the National Credit Union Foundation. The Foundation’s purpose is to promote the growth and
development of credit unions in the United States and throughout
the world.
Our sincere thanks go to TruGrocer FCU and CUNA Mutual
Group for sponsoring the tournament. Also, to Harland Clarke who
sponsored the beverage cart and the following organizations who
sponsored holes at the tournament: Advantage Plus FCU, ISU CU,
Potlatch No. 1 FCU, TruGrocer FCU, Westmark CU, Idaho Credit
Union League, League Services, CUNA Mutual Group, Integrated
Lending Technologies, Allied Solutions, American Income Life,
Credit Union Data Processing, Cummins Allison Corp., Enhanced
Software Products, Federal Home Loan Bank of Seattle, Integrated
Builders Group, Member Access Pacific, and Team Mazda Subaru.
We also want to thank CUNA Mutual Group for providing tee
prizes.
To add some additional excitement to the tournament, the League
sponsored a $10,000 cash prize for hole-in-one on #8 and Team
Mazda Subaru sponsored a car for a hole-in-one on #14. Unfortunately, no one won either prize.
Held at BanBury Golf Course in Eagle, Idaho, a total of 76 golfers
competed in the tournament. Three teams took home prizes commemorating the occasion.
Taking first place was
Ron Lloyd and Jamie
Simmons from Potelco
United CU, TJ Telford
from Burns-Fazzi, Brock,
and Trevor Austin from
Allied Solutions.
The following golfers
took second place, Steve
Osborne from Idaho
Advantage CU, Denny
Lewis from Lewis Clark
CU, Tom Johnson from
STCU, and Rob Blackmore from Integrated Builders Group.
Third place went to Brent and Tarryn Neibaur and Kurt and Becky
Payne, all from Advantage Plus FCU.
Special contest hole winners were:
•
Longest Drive, Men’s – Kurt Payne, Advantage Plus FCU
•
Longest Drive, Women’s – Julie Nielsen, Allied Solutions
•
Closest to the Pin – Pat Vaughn, Idaho Advantage CU
•
Longest Putt – Ken Fielding, East Idaho CU
Our sincere thanks to all the golfers and sponsors for their support
and contributions. t
Credit Unions Raise $$ for Children’s Miracle Network Hospitals
Checks were presented to the three children’s hospitals that serve
Idaho children at the Credit Unions for Kids Awards Luncheon
held during the League’s Annual Meeting. In 2011, Idaho’s credit
unions raised nearly $184,000 to help sick and injured kids at St.
Luke’s Children’s Hospital (Boise), Kootenai Medical Center (Coeur
d’Alene), and Primary Children’s Medical Center (Salt Lake City).
Though the kids are the real winners, credit unions participated in
their own fundraising contest. The winners of this year’s traveling
trophies are:
Under $10 Million in Assets Category:
Simcoe CU, for Most Funds Raised ($1,621)
Desert Sage FCU, for Most Raised per Member ($1.07)
Public Employees CU, for Most Fundraising Growth (212%)
$10 Million to $50 Million in Assets Category:
Idadiv CU, for Most Funds Raised($38,681)
Idadiv CU, for Most Raised per Member ($3.98)
Clearwater CU, for Most Fundraising Growth (398%)
Over $50 Million in Assets Category:
East Idaho CU, for Most Funds Raised ($43,291)
East Idaho CU, for Most Raised per Member ($1.34
Scenic Falls FCU, for Most Fundraising Growth (251%)
The Chapter of the Year Award went to North Idaho Chapter ($2,807).
An auction held during the Luncheon raised $1,300 and the Teddy
Bear Sale raised $2,500, thanks to the wonderful, hand-crafted rocking horse made and donated by Bob Rudkin, former board member
at Capital Educators FCU.
Becky Ruley from Children’s Miracle Network Hospitals gave a
moving and thought-provoking presentation to 180 attendees.
It’s time to start thinking about how your credit union can increase
its level of commitment in 2012 to this credit union charity of
choice. t
The Idaho Credit Union League is dedicated to the success of credit unions in Idaho. We help foster success by representing, serving and promoting
credit unions locally and nationally. In addition, we strive to be the most effective advocate for Idaho’s credit unions.
Gem
Volume 51, No. 6
© 2012 Idaho Credit Union League. The
Gem is a monthly publication of the Idaho
Credit Union League, 2770 Vista Avenue,
Boise, ID 83705, Tel (208) 343-4841, Fax
(208) 343-4869, www.idahocul.org.
Annual subscriptions are included in
League dues.
Board Chair
Brent Neibaur, Advantage Plus FCU
President
Alan D. Cameron
Editor
LaRaye O’Brien
POSTMASTER: Send address changes
to the Gem, P.O. Box 5158, Boise, Idaho
83705.
Certificates
JUNE
5 Fair Labor Standards Update QuickBite
IDAHO CREDIT UNION PHILOSOPHY CERTIFICATIONS
Beehive FCU
Cheyenne Hansen
Drew Taylor
East Idaho CU
Jill Barnett
Idaho Credit Union League
Will Hall
Pioneer FCU
Jessica Courtier
Amanda Karst
Potlatch No. 1 FCU
Valerie Dickenson
Rochelle Dietz
Stacey Messick
Parker Wilson
Tribune CU
Steve Scully
C a l e n d a r
12 Kid’s Stuff: Minor Accounts QuickBite
20 Reg Z Update QuickBite
26 We Love Loans QuickBite
JULY
2 Generational Differenence QuickBite
10 Direct Lending: Seven Must Haves QuickBite
12 New SEGs, New Members, New Growth
TeleCourse
18 Due Diligence: Interacting with Your Members QuickBite
26 Why Y? Tacticts to Reach Gen Y QuickBite
31 Digital Wallet - Mobile Payments QuickBite
For CUNA Training, go to:
http://training.cuna.org/calendar.php
See the 2012 Calendar of Events at
www.Idahocul.org