tag:blogger.com,1999:blog-74165170668096025822024-03-27T13:26:42.316-04:00Management Minutefrom the Association of Vermont Credit UnionsUnknownnoreply@blogger.comBlogger2568125tag:blogger.com,1999:blog-7416517066809602582.post-69847793138735747372024-03-27T13:25:00.004-04:002024-03-27T13:25:49.069-04:00Visa, Mastercard, merchants reach settlement in interchange lawsuit<p>Visa and Mastercard announced a major settlement with U.S. merchants on Tuesday, potentially ending nearly two decades of litigation over the fees charged every time a credit or debit card is used in a store or restaurant.</p><p>The deal would lower and cap the fees charged by Visa and Mastercard and allow small businesses to collectively bargain for rates with the payment processors in a similar way that the large merchants do on their own now.</p><p>Industry groups for retailers both small and large said the settlement is a positive development, but far more needs to be done to remedy the current swipe-fee situation. They noted that the lowered fees would be only for a limited period of time — three to five years — after which the fees would return to their current levels.</p><p>"While this settlement is a step in the right direction and will provide a limited amount of short-term relief to small businesses, it does not solve the long-term anti-competitive rate-setting practices that are the root of this problem," said Jeff Brabant, vice president of federal government relations at the National Federation of Independent Business, a small-business advocacy group. "As long as the credit card networks, Visa and Mastercard, get to set the interchange rates for every bank that issues a credit card, anti-competitive pricing will remain, and small businesses will continue to pay artificially high rates."</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZhT-KqY3VCJia1G2iZoWcLEWefGgYYGveWZtyTNeyg_T9AywqePTD4tW0cZaK0b_J7G8tbMoJO6_cXL68U5GJbO99bFZDkeQYTQPKGIJZ_fgNlG8H-ZRoD_V8CZPDGPXD0Dnyc7wGBwDl76VTqQlT3NPfjkMGDhzWXwFkhypSEk9tahqRXRfsTefgsgOY/s800/ap24086476174843-5ee02c3a4866219362e6d8c76032672cd8ec5e1b-s800-c85.webp" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="600" data-original-width="800" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZhT-KqY3VCJia1G2iZoWcLEWefGgYYGveWZtyTNeyg_T9AywqePTD4tW0cZaK0b_J7G8tbMoJO6_cXL68U5GJbO99bFZDkeQYTQPKGIJZ_fgNlG8H-ZRoD_V8CZPDGPXD0Dnyc7wGBwDl76VTqQlT3NPfjkMGDhzWXwFkhypSEk9tahqRXRfsTefgsgOY/s320/ap24086476174843-5ee02c3a4866219362e6d8c76032672cd8ec5e1b-s800-c85.webp" width="320" /></a></div>Swipe fees are paid to Visa, Mastercard and other credit card companies in exchange for enabling transactions. Merchants ultimately pass on those fees to consumers who use credit or debit cards. The fees are calculated as a fixed fee plus a percentage of the sales total, typically about 1% to 3%.<p></p><p>Increasingly, small businesses have begun posting signs near the register warning customers that they will pay more for the same item if they do not use cash.</p><p>According to the settlement announced Tuesday, Visa and Mastercard will cap the credit interchange fees until 2030, and the companies must negotiate the fees with merchant-buying groups.</p><p>The law firm that announced the settlement put the value of the savings in swipe fees at close to $30 billion.</p><p>America’s Credit Unions is analyzing the settlement, but has concerns with several areas that could impact credit unions, including: </p><p></p><ul style="text-align: left;"><li>Merchants would be permitted to surcharge Visa or Mastercard branded credit cards up to 3%; </li><li>Visa and MasterCard would modify their “no-discounting” and “non-discrimination” rules to allow merchants to offer discounts to customers based on the credit or debit card issuer; </li><li>Modification of the “honor all cards” rules to indicate that a merchant may accept and enable some but not all digital wallets and steer consumers to specific cards within the digital wallet; and </li><li>Reduction in the interchange rate paid by merchants for the next five years. </li></ul><p></p><p>The settlement requires approval by the Eastern District Court of New York. </p><br /><p><br /></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-75948921304370512332024-03-27T13:15:00.004-04:002024-03-27T13:15:59.410-04:00NCUA updates CECL Tool <p> The NCUA released updates to its Simplified Current Expected Credit Losses (CECL) Tool. The updates reflect the average loan loss rates for 2021-2023 and the latest life-of-loan —or Weighted Average Remaining Maturity—factors. </p><p>The agency noted that the updates will help credit unions determine the credit loss expense for the first quarter of 2024. It also said the tool helps credit unions with assets under $10 million more accurately measure credit losses and get stronger feedback on loan portfolio management. </p><p><a href="https://ncua.gov/regulation-supervision/regulatory-compliance-resources/cecl-resources?utm_medium=email&utm_source=NCUAgovdelivery" target="_blank">Access the agency’s CECL Resources page for more on CECL. </a></p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibTbgoWrRVzFRZ_2HGmdQuuIshC-WzMKM3nX8_2r5B0Q4fUbtcX8GFeRqDGbjl30rIaGzUaVlowjGbUJBTY160NHsNk3WMGQ2UyGQ_sndhpZlb4xL3fFvLh_gfs8MhWy9-UU5vY3SRKrzl0L1ZuYBn_1hHl6KootLV3vFPv_9vrBtMSIUpZl5yYdicT4De/s1440/CECL-Chart.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1384" data-original-width="1440" height="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibTbgoWrRVzFRZ_2HGmdQuuIshC-WzMKM3nX8_2r5B0Q4fUbtcX8GFeRqDGbjl30rIaGzUaVlowjGbUJBTY160NHsNk3WMGQ2UyGQ_sndhpZlb4xL3fFvLh_gfs8MhWy9-UU5vY3SRKrzl0L1ZuYBn_1hHl6KootLV3vFPv_9vrBtMSIUpZl5yYdicT4De/s320/CECL-Chart.png" width="320" /></a></div><br /><p><br /></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-5804880262962125882024-01-31T16:05:00.003-05:002024-01-31T16:05:50.910-05:00The Power of Member Profiling: How Credit Unions can Transform Marketing Strategies<p> Credit unions play a unique role in the financial ecosystem, offering members a local community-focused alternative to traditional banking. In an era dominated by data-driven decision-making, credit unions are increasingly able to harness the power of targeted data to enhance their marketing strategies, strengthen member relationships, and drive sustainable growth. The foundation of effective targeted marketing for credit unions lies in the creation of comprehensive member profiles.</p><p><b>What is member profiling?</b></p><p>In the rapidly changing world of financial services, credit unions are increasingly recognizing the importance of member profiling as a cornerstone for effective marketing strategies. Member profiling involves the meticulous collection and analysis of data to understand the unique financial behaviors, preferences, and needs of individual members. At the heart of member profiling is the quest to understand member behavior. Credit unions methodically analyze transactional data, savings patterns, loan histories, and other financial activities to gain insights into how members utilize their services. By deciphering these behaviors, credit unions can identify trends, preferences, and pain points, laying the foundation for targeted marketing efforts.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7jczYvhwSYD9wnm19fkZtJVRZw2Yk3JG1Zx5elJEPmfQQ_Zw3eHhavVT0F3P3JORlED0i0LZiLv8fsTjeDg0O4og-lafSKzaAI6jdvyzt47uiRU7cseBLfg-ISmk9MwCbgtd-r46auTQctJ6A5MVgEqg2RaWQr6Y69qOaoXHJinSxWUyVw_ugLJFxMsax/s897/Capture.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="567" data-original-width="897" height="202" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7jczYvhwSYD9wnm19fkZtJVRZw2Yk3JG1Zx5elJEPmfQQ_Zw3eHhavVT0F3P3JORlED0i0LZiLv8fsTjeDg0O4og-lafSKzaAI6jdvyzt47uiRU7cseBLfg-ISmk9MwCbgtd-r46auTQctJ6A5MVgEqg2RaWQr6Y69qOaoXHJinSxWUyVw_ugLJFxMsax/s320/Capture.JPG" width="320" /></a></div><p></p><p>Member profiling goes beyond basic demographic information. Credit unions can compile comprehensive member profiles that encompass a holistic view of each member’s financial journey. These profiles include details such as income levels, spending habits, life stages, and financial goals. Armed with this information, credit unions can tailor their marketing strategies to cater to the specific needs of many diverse member segments.</p><p><b>The benefits of member profiling</b></p><p>One of the significant advantages of member profiling is the ability to deliver personalized product recommendations. Credit unions can analyze member profiles to identify opportunities for offering relevant financial products and services. Whether it’s a member in need of a mortgage, a young adult seeking their first auto loan, or a saver interested in investment opportunities, credit unions can adapt their marketing messages to address individual member needs. Credit unions can segment their member base based on common characteristics, allowing for more focused and effective marketing efforts. By customizing offers, imagery, and even delivery methods to resonate with specific member groups, credit unions can increase engagement and response rates. Whether promoting new services, discounts, or educational content, targeted marketing campaigns enhance the overall member experience. This highly customized approach ensures you are reaching the right segment of your membership at the right time in each member’s individual financial journey.</p><p>By continuously monitoring member behavior, credit unions can identify signals of potential attrition. For instance, if a member’s spending patterns suggest a change in financial circumstances, the credit union can offer tailored solutions—such as loan restructuring or financial counseling—to retain the member’s loyalty. As an example, changes in direct deposit or a decrease in account activity may indicate dissatisfaction or a change in financial circumstances. Proactively addressing these issues through personalized communication or targeted solutions can help credit unions retain members and strengthen the relationship.</p><p><b>A strategic imperative</b></p><p>Member profiling has emerged as a strategic imperative for credit unions seeking to elevate their marketing strategies. By understanding member behavior, creating comprehensive profiles, and delivering personalized experiences, credit unions can foster stronger connections with their members. As technology continues to advance, credit unions that harness the power of member profiling will not only meet member expectations but also position themselves as trusted financial partners for the long term.</p><p><br /></p><p>Author: <a href="https://synergentcorp.com/" target="_blank">Synergent</a></p><h3 class="frm_form_title" style="background-color: white; box-sizing: inherit; font-family: "source sans pro", arial, helvetica, sans-serif; font-size: 25px; font-weight: 400; line-height: 32px; margin: 0px 0px 21px; max-height: 1e+06px;"><br /></h3>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.comtag:blogger.com,1999:blog-7416517066809602582.post-41803922052206029412023-06-29T16:17:00.004-04:002023-06-29T16:17:47.945-04:00FFIEC Announces Availability of 2022 Data on Mortgage Lending<p> WASHINGTON, D.C. (June 29, 2023) – The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data on 2022 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 4,460 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlZ7ZUoCAuaTGxyeZTUKTv0r-Kt7EAy2GdPmRd3pCOfMNL_V2ZFFMcmLC1mXvfW0JF59bfatouWvA9eL8W0R_LFnzB_b3uxkCDjvfg7qpCA2iCRzbH5q0K9YDD-_svirHIP1SpITmDttEzT-BW_Zd94_VxFUwIqyqtnWd4-UDH9jH-0Av-6Af47QDi2lL-/s410/Capture.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="273" data-original-width="410" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlZ7ZUoCAuaTGxyeZTUKTv0r-Kt7EAy2GdPmRd3pCOfMNL_V2ZFFMcmLC1mXvfW0JF59bfatouWvA9eL8W0R_LFnzB_b3uxkCDjvfg7qpCA2iCRzbH5q0K9YDD-_svirHIP1SpITmDttEzT-BW_Zd94_VxFUwIqyqtnWd4-UDH9jH-0Av-6Af47QDi2lL-/s320/Capture.JPG" width="320" /></a></div><p></p><p>The HMDA data are the most comprehensive publicly available information on mortgage market activity. The data are used by industry, consumer groups, regulators, and others to assess potential fair lending risks and for other regulatory and informational purposes. The data help the public assess how financial institutions are serving the housing needs of their local communities and facilitate federal financial regulators’ fair lending, consumer compliance, and Community Reinvestment Act examinations.</p><p>The <a href="https://ffiec.cfpb.gov/data-publication/snapshot-national-loan-level-dataset/2022" target="_blank">Snapshot National Loan-Level Dataset</a> released today contains the national HMDA datasets as of May 1, 2023. Key observations from the Snapshot include the following:</p><p></p><ul style="text-align: left;"><li>For 2022, the number of reporting institutions increased by about 2.63 percent from 4,338 in the previous year to 4,460.</li><li>The 2022 data include information on 14.3 million home loan applications. Among them, 11.5 million were closed-end and 2.5 million were open-end. Another 287,000 records are from financial institutions making use of Economic Growth, Regulatory Relief, and Consumer Protection Act’s partial exemptions and did not indicate whether the records were closed-end or open-end.</li><li>The share of mortgages originated by non-depository, independent mortgage companies has decreased and, in 2022, accounted for 60.2 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, down from 63.9 percent in 2021.</li><li>In terms of borrower race and ethnicity, the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose from 7.9 percent in 2021 to 8.1 percent in 2022, the share made to Hispanic-White borrowers decreased slightly from 9.2 percent to 9.1 percent, and those made to Asian borrowers increased from 7.1 percent to 7.6 percent.</li><li>In 2022, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.4 percent and 11.1 percent respectively, while the denial rates for Asian and non-Hispanic-White applicants were 9.2 percent and 5.8 percent respectively.</li></ul><p></p><p>The FFIEC also released today several other data products to serve a variety of data users. The HMDA <a href="https://ffiec.cfpb.gov/data-publication/dynamic-national-loan-level-dataset/2022" target="_blank">Dynamic National Loan-Level Dataset</a> is updated on a weekly basis to reflect late submissions and resubmissions. <a href="https://ffiec.cfpb.gov/data-publication/2022" target="_blank">Aggregate and Disclosure Report</a>s provide summary information on individual financial institutions and geographies. The <a href="https://ffiec.cfpb.gov/data-browser/" target="_blank">HMDA Data Browser</a> allows users to create custom tables and download datasets that can be further analyzed. In addition, in mid-March 2023, the FFIEC made available <a href="https://ffiec.cfpb.gov/data-publication/modified-lar/2019" target="_blank">Loan/Application Register</a>s for each HMDA filer of 2022 data, as well as a combined file for all filers, modified to protect borrower privacy. Additional observations regarding the 2022 data may be <a href="https://www.consumerfinance.gov/data-research/hmda/summary-of-2022-data-on-mortgage-lending/" target="_blank">found here</a>.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-6366590996951352102023-06-29T15:04:00.001-04:002023-06-29T15:04:13.132-04:003 Steps to Prepare Your Culture for AI<p> According to Jared Spataro from Microsoft, As business leaders, today we find ourselves in a place that’s all too familiar: the unfamiliar. Just as we steered our teams through the shift to remote and flexible work, we’re now on the verge of another seismic shift: AI. And like the shift to flexible work, priming an organization to embrace AI will hinge first and foremost on culture.</p><p>The pace and volume of work has increased exponentially, and we’re all struggling under the weight of it. Leaders and employees are eager for AI to lift the burden. That’s the key takeaway from our 2023 Work Trend Index, which surveyed 31,000 people across 31 countries and analyzed trillions of aggregated productivity signals in Microsoft 365, along with labor market trends on LinkedIn.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxs8wsdTgZMWKguRrOX729HsCCD5Pi7Snj-J7KX1F7hSplIhF0ztthIwIx0ASSqXhxnD0bblOOJWeI_20m2vLvqET4vGrjPKKmkAVK0k3EBxDSM9Ie2XXRYsxqsZhKzlphdm4vSMMSg5zIIuvrtIQn3gIYA4uZOBGuykdjZUHSAKYHFbg3XITCJeZMFZPB/s612/istockphoto-1452604857-612x612.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="383" data-original-width="612" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxs8wsdTgZMWKguRrOX729HsCCD5Pi7Snj-J7KX1F7hSplIhF0ztthIwIx0ASSqXhxnD0bblOOJWeI_20m2vLvqET4vGrjPKKmkAVK0k3EBxDSM9Ie2XXRYsxqsZhKzlphdm4vSMMSg5zIIuvrtIQn3gIYA4uZOBGuykdjZUHSAKYHFbg3XITCJeZMFZPB/s320/istockphoto-1452604857-612x612.jpg" width="320" /></a></div><p></p><p>Nearly two-thirds of employees surveyed told us they don’t have enough time or energy to do their job. The cause of this drain is something we identified in the report as digital debt: the influx of data, emails, and chats has outpaced our ability to keep up. Employees today spend nearly 60% of their time communicating, leaving only 40% of their time for creating and innovating. In a world where creativity is the new productivity, digital debt isn’t just an inconvenience — it’s a liability.</p><p>AI promises to address that liability by allowing employees to focus on the most meaningful work. Increasing productivity, streamlining repetitive tasks, and increasing employee well-being are the top three things leaders want from AI, according to our research. Notably, amid fears that AI will replace jobs, reducing headcount was last on the list.</p><p>Becoming an AI-powered organization will require us to work in entirely new ways. As leaders, there are three steps we can take today to get our cultures ready for an AI-powered future:</p><p><b>Choose curiosity over fear</b></p><p>AI marks a new interaction model between humans and computers. Until now, the way we’ve interacted with computers has been similar to how we interact with a calculator: We ask a question or give directions, and the computer provides an answer. But with AI, the computer will be more like a copilot. We’ll need to develop a new kind of chemistry together, learning when and how to ask questions and about the importance of fact-checking responses.</p><p>Fear is a natural reaction to change, so it’s understandable for employees to feel some uncertainty about what AI will mean for their work. Our research found that while 49% of employees are concerned AI will replace their jobs, the promise of AI outweighs the threat: 70% of employees are more than willing to delegate to AI to lighten their workloads.</p><p>We’re rarely served by operating from a place of fear. By fostering a culture of curiosity, we can empower our people to understand how AI works, including its capabilities and its shortcomings. This understanding starts with firsthand experience. Encourage employees to put curiosity into action by experimenting (safely and securely) with new AI tools, such as AI-powered search, intelligent writing assistance, or smart calendaring, to name just a few. Since every role and function will have different ways to use and benefit from AI, challenge them to rethink how AI could improve or transform processes as they get familiar with the tools. From there, employees can begin to unlock new ways of working.</p><p><b>Embrace failure</b></p><p>AI will change nearly every job, and nearly every work pattern can benefit from some degree of AI augmentation or automation. As leaders, now is the time to encourage our teams to bring creativity to reimagining work, adopting a test-and-learn strategy to find ways AI can best help meet the needs of the business.</p><p>AI won’t get it right every time, but even when it’s wrong, it’s usefully wrong. It moves you at least one step forward from a blank slate, so you can jump right into the critical thinking work of reviewing, editing, or augmenting. It will take time to learn these new patterns of work and identify which processes need to change and how. But if we create a culture where experimentation and learning are viewed as a prerequisite to progress, we’ll get there much faster.</p><p>As leaders, we have a responsibility to create the right environment for failure so that our people are empowered to experiment to uncover how AI can fit into their workflows. In my experience, that includes celebrating wins as well as sharing lessons learned in order to help keep each other from wasting time learning the same lesson twice. Both formally and informally, carve out space for people to share knowledge — for example, by crowdsourcing a prompt guidebook within your department or making AI tips a standing agenda item in your monthly all-staff meetings. Operating with agility will be a foundational tenet of AI-powered organizations.</p><p><b>Become a learn-it-all</b></p><p>I often hear concerns that AI will be a crutch, offering shortcuts and workarounds that ultimately diminish innovation and engagement. In my mind, the potential for AI is so much bigger than that, and it will become a competitive advantage for those who use it thoughtfully. Those will become your most engaged and innovative employees.</p><p>The value you get from AI is only as good as what you put in. Simple questions will result in simple answers. But sophisticated, thought-provoking questions will result in more complex analysis and bigger ideas. The value will shift from employees who have all the right answers to employees who know how to ask the right questions. Organizations of the future will place a premium on analytical thinkers and problem-solvers who can effectively reason over AI-generated content.</p><p>At Microsoft, we believe a learn-it-all mentality will get us much farther than a know-it-all one. And while the learning curve of using AI can be daunting, it’s a muscle that has to be built over time — and that we should start strengthening today. When I talk to leaders about how to achieve this across their companies and teams, I tell them three things:</p><p></p><ul style="text-align: left;"><li>Establish guardrails to help people experiment safely and responsibly. Which tools do you encourage employees to use, and what data is — and isn’t — appropriate to input. What guidelines do they need to follow around fact-checking, reviewing, and editing?</li><li>Learning to work with AI will need to be a continuous process, not a one-time training. Infuse learning opportunities into your rhythm of business and keep employees up to date with the latest resources. For example, one team might block off Friday afternoons for learning, while another has monthly “office hours” for AI Q&A and troubleshooting. And think beyond traditional courses or resources. How can peer-to-peer knowledge sharing, such as lunch and learns or a digital hotline, play a role so people can learn from each other?</li><li>Embrace the need for change management. Being intentional and programmatic will be crucial for successfully adopting AI. Identify goals and metrics for success, and select AI champions or pilot program leads to help bring the vision to life. Different functions and disciplines will have different needs and challenges when it comes to AI, but one shared need will be for structure and support as we all transition to a new way of working.</li></ul><p></p><p>The platform shift to AI is well underway. And while it holds the promise of transforming work and giving organizations a competitive advantage, realizing those benefits isn’t possible without a culture that embraces curiosity, failure, and learning. As leaders, we’re uniquely positioned to foster this culture within our organizations today in order to set our teams up for success in the future. When paired with the capabilities of AI, this kind of culture will unlock a better future of work for everyone.</p><p><br /></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-8755731754005425092023-06-12T09:34:00.002-04:002023-06-12T09:34:18.337-04:00CUNA meets with GAO on importance of updated CTR threshold<p>CUNA Senior Federal Compliance Counsel Colleen Kelly, Senior Director of Advocacy Luke Martone, and credit unions from CUNA’s Examination and Supervision Subcommittee met with the U.S. Government Accountability Office (GAO) this week to discuss issues related to the Financial Crimes Enforcement Network’s (FinCEN) Currency Transaction Report (CTR) requirements.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSEyAHcy-IdQGVA0xoq_6ICxX9eQEYzoPOrm2QAHaz8hZRxhBfNnbDzU-MEac3sgRIdtBfYZWqp8qEBbOYbBgDmOvxl9Qahn5U12LxAi_MEZ26VV6xSV8y9dc7rpl-qU4R2ozjDQSRZSV_do__3A3WwUxSXAkTlvqnBfysxr3Gnr3UxR0KVs_3l0r6hg/s414/126823044.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="414" data-original-width="414" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSEyAHcy-IdQGVA0xoq_6ICxX9eQEYzoPOrm2QAHaz8hZRxhBfNnbDzU-MEac3sgRIdtBfYZWqp8qEBbOYbBgDmOvxl9Qahn5U12LxAi_MEZ26VV6xSV8y9dc7rpl-qU4R2ozjDQSRZSV_do__3A3WwUxSXAkTlvqnBfysxr3Gnr3UxR0KVs_3l0r6hg/s320/126823044.jpg" width="320" /></a></div><br /><p></p><p>The GAO’s review of the CTR process is required by the Anti-Money Laundering Act of 2020.</p><p>CUNA and credit union staff shared how FinCEN can make the reporting process easier for credit unions, helping the agency and credit unions achieve the mutual goal of combatting illicit finance.</p><p>CTR thresholds have not been updated since the enactment of the Bank Secrecy Act in 1972, and CUNA has consistently advocated for updates, since they are among the most time-consuming part of a compliance program.</p><p>CUNA<a href="https://news.cuna.org/articles/119245-failure-to-modernize-bsa-thresholds-adds-unnecessary-compliance-burden" target="_blank"> supported legislation </a>in the last Congress to raise CTR and Suspicious Activity Report thresholds, and has <a href="https://news.cuna.org/articles/120512-sar-ctr-modernization-should-be-part-of-bsa-updates" target="_blank">recommended </a>numerous efficiencies FinCEN could take to ease the reporting burden on financial institutions.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-74616684350660706952023-06-08T10:36:00.003-04:002023-06-08T10:36:42.146-04:00Welch, Durbin, Marshall, and Vance introduce bipartisan Credit Card Competition Act of 2023<p> Bill would enhance competition and choice in the credit card network market currently dominated by the Visa-Mastercard duopoly</p><p>VermontBiz Senator Peter Welch (D-VT), Senate Majority Whip Dick Durbin (D-IL), and Senators Roger Marshall, M.D. (R-KS), and J.D. Vance (R-OH) today introduced the bipartisan, bicameral Credit Card Competition Act of 2023, legislation that would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly. Building on debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that large credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed. Companion legislation was introduced in the House by Representatives Lance Gooden (R-TX-05) and Zoe Lofgren (D-CA-18). </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyB_jD_76S3x3rOCVplzhNPOFtqGrskDu3r8YZgknH5igGPMq2J4fsFAEgU67xHzxGE1LQxLKmfIyq__vY6TdZpiMSyxGNhddFF3TPOtspR4W3UWvRyV9rJ1VD92VXCaMOYatjmbEuuFD6W9oFhuuFDo0aBIurijUf8va-ki4ZiJViuCfxLmEY6pOSxw/s6000/nathana-reboucas-zrF-HyAPUmM-unsplash.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="4000" data-original-width="6000" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyB_jD_76S3x3rOCVplzhNPOFtqGrskDu3r8YZgknH5igGPMq2J4fsFAEgU67xHzxGE1LQxLKmfIyq__vY6TdZpiMSyxGNhddFF3TPOtspR4W3UWvRyV9rJ1VD92VXCaMOYatjmbEuuFD6W9oFhuuFDo0aBIurijUf8va-ki4ZiJViuCfxLmEY6pOSxw/s320/nathana-reboucas-zrF-HyAPUmM-unsplash.jpg" width="320" /></a></div><br /><p></p><p>“Interchange fees put a brutal strain on our small businesses, but because of the Visa-Mastercard duopoly in the credit card network market, Main Street businesses have no choice but to pay these crushing fees or risk going under,” said Welch. “The Credit Card Competition Act will restore choice and competition in the credit card network market, helping to bring down costs for small businesses and making it easier for these essential businesses to thrive.” </p><p>“Credit card swipe fees inflate the prices that consumers pay for everyday purchases like groceries and gas. It’s time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly,” said Durbin. “This legislation, which builds upon pro-competition reforms Congress enacted in 2010, would give small businesses a meaningful choice when it comes to card networks, and it would enable innovators to gain a foothold in the credit card market. Bringing real competition to credit card networks will help reduce swipe fees and hold down costs for Main Street merchants and their customers.” </p><p>“When it comes to Main Street vs. Wall Street, I’ll stand with Main Street businesses, who are the backbone of our economy, every single time,” said Marshall. “At a time of economic uncertainty and skyrocketing inflation, these credit card companies are increasing their hidden swipe fees and price gouging small businesses and consumers. Our legislation would rein in the big banks and the credit card industry, drive down costs for convenience stores, gas stations, and other small businesses, and ultimately pass those savings down to consumers. This legislation is the right thing to do, and I am proud to reintroduce it with bicameral and bipartisan support.” </p><p>“Due to a lack of competition, credit card companies have been able to exponentially increase hidden processing fees over the last decade. These fees are most retailers’ highest business expense after labor and rent. By requiring more than one network option on credit cards, the Credit Card Competition Act would foster competition and transparency in the credit card market so that card networks would have to compete for business on fees and terms – just as we compete for our customers’ business,” Leslie G. Sarasin, President and CEO, FMI – The Food Industry Association. </p><p>There are currently four U.S. credit card networks: Visa, Mastercard, American Express, and Discover. Visa and Mastercard are known as “four-party” networks; they act as agents for thousands of card-issuing banks and mandate the fees and terms that the banks receive from merchants for each transaction. Merchants have limited leverage to negotiate fee rates and terms in four-party network systems, because they cannot risk losing access to the consumers served by Visa’s and Mastercard’s member banks. </p><p>The market power and network structure of the Visa-Mastercard duopoly has enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022. These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them. Consumers ultimately pay for these fees in the price of the goods and services they buy. </p><p>Under the Credit Card Competition Act, the Federal Reserve would issue regulations, to ensure that banks in four-party card systems that have assets of over $100 billion cannot restrict the number of networks on which an electronic credit transaction may be processed to less than two unaffiliated networks, at least one of which must be outside of the top two largest networks. This would inject real competition into the credit card market—opening the door for new market entrants such as current debit-only networks, encouraging innovation and enhanced security, creating backup options if a network crashes, and exerting competitive constraints on Visa and Mastercard’s fee rates. </p><p>The Credit Card Competition Act is supported by organizations including the American Beverage Licensees, Armed Forces Marketing Council, Energy Marketers of America, FMI, Hispanic Leadership Fund, International Franchise Association, National Association of College Stores, National Association of Convenience Stores, National Association of Theater Owners, National Grocers Association, National Restaurant Association, National Retail Federation, National Wildlife Refuge Association, NATSO, NFIB, Retail Industry Leaders Association, SIGMA, U.S. PIRG, and over 200 state and regional business associations. </p><p>**<span style="color: #585858; font-family: "Avenir Medium", Avenir, Verdana, Arial, sans-serif; font-size: 16px;"><b>Recently re-introduced legislation would change the current credit card interchange system, making our current payments system less secure and hurting consumers. Tell your lawmakers to oppose changes to the current interchange system. <a href="https://www.cuna.org/advocacy/actions/grassroot-action-center.html?vvsrc=%2fcampaigns%2f96604%2frespond" target="_blank">Send a Message to Your Lawmaker here</a></b></span></p><p>A one-pager of the bill can be found <a href="https://www.durbin.senate.gov/imo/media/doc/The%20Credit%20Card%20Competition%20Act%20of%202023%20-%20one-pager.pdf" target="_blank">here</a>. </p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-46163053977669384002023-02-23T10:51:00.004-05:002023-02-23T10:51:31.587-05:00New NCUA plan would add millions of credit union members<p> The National Credit Union Administration approved a plan that would expand credit union access to millions more Americans by allowing remote workers to qualify for membership based on their employer's market. </p><p>The agency said the "paid from" proposal and other changes to its chartering and field-of-membership regulations would bring federal charters more in line with state charters. The agency has also proposed allowing more of a deceased credit union member's surviving family members to qualify for membership, and added a simplified application process for de novo community credit unions.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUNNLE4EmrJKEzuhKAh4l1dIEec8iRGOnQZvVr47GPBQtwVw4dFQFDEyrAILOiC6lMJoTDIcdVx3zS8OUxnPBhNsDSUuXkjPDBCbUZRObzxT04c9PJ__i5DaPZmH0_gvV8iHzC2_sIiyPM5KWrvZtKYrn2YlhOpV8uUDUTzAU00cpRCesecwbRCIMQ5g/s281/download.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="179" data-original-width="281" height="179" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUNNLE4EmrJKEzuhKAh4l1dIEec8iRGOnQZvVr47GPBQtwVw4dFQFDEyrAILOiC6lMJoTDIcdVx3zS8OUxnPBhNsDSUuXkjPDBCbUZRObzxT04c9PJ__i5DaPZmH0_gvV8iHzC2_sIiyPM5KWrvZtKYrn2YlhOpV8uUDUTzAU00cpRCesecwbRCIMQ5g/s1600/download.jpg" width="281" /></a></div><p></p><p>At the board's monthly meeting Thursday, NCUA Chairman Todd Harper said the current federal charter "lags significantly" behind the state charter, and 91 of the 100 largest potential fields of membership in the system are state charters. Roughly 3.3 million more people would be eligible to join a credit union under this proposal, Harper said. </p><p>"Ultimately, it's Congress's decision whether to amend the Federal Credit Union Act's field-of-membership requirements to achieve greater parity with the rules in many states," Harper said. "However, where we can within our existing rules and the law's current requirements, the NCUA board should take appropriate and tailored action to simplify, streamline and strengthen federal chartering options."</p><p>But Robert Flock, vice president in the office of strategic engagement for the American Bankers Association, said regardless of the NCUA's intentions, this proposed rule blurs the distinction between credit unions and banks. </p><p>"Further relaxing field-of-membership requirements renders the common bond that ties credit union members together meaningless," Flock said. "And without that common bond, credit unions are indistinguishable from tax-paying community banks, which are also committed to expanding access to financial services in underserved and low-income communities."</p><p>The NCUA's proposal would also simplify the application requirements for community-based credit unions by providing a standard form for business and marketing plans. The proposal would also expand the community-based field-of-membership affinities — relationships between a person and their geographic market — to recognize the growth of telecommuting.</p><p>"So instead of live, work or worship, the rule would include 'paid from,' so that if I worked for a company that was based in Boston, but I lived in Vermont and worked remotely, I could join that Boston-based community credit union," said Mark Treichel, a former NCUA executive director who now runs Credit Union Exam Solutions.</p><p>It is hard to estimate the reach of the changes, but that particular addition to community charters is "material" and will become more important over time, Treichel said.</p><p>Sam Brownell, founder of the consultancy CU Collaborate, agreed that aspect of the rule could have the biggest impact on consumers and credit unions.</p><p>"That would be a huge win for consumers' access to credit unions and allow more credit unions to provide their services to communities that banks seem to be leaving," Brownell said. </p><p>In another loosening of membership restrictions, the NCUA proposed allowing everyone in the immediate family or household of a credit union member who dies to join the credit union in the six months following that person's death. Under the current rule, only the spouse of a member who dies is eligible for membership.</p><p>"This is a very thoughtful change, as it would allow loved ones to maintain a relationship with a credit union that they may only discover when death of a loved one results in a wind-down of affairs at the credit union," Treichel said.</p><p>The proposed changes to address the survivorship issue is a "compassionate move" to ensure no credit union member's family has unnecessary burdens to manage when a loved one passes away, said Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions.</p><p>To ease a backlog in field-of-membership applications, the NCUA has also asked to implement a template for this process. The proposal includes a technical clarification on the process for the NCUA to review and approve a new charter as well as the new organization's management and officials.</p><p>NCUA Vice Chairman Kyle Hauptman said the chartering process is one of his main three priorities, and so he is in favor of policies that make it more likely that a community or group can charter a new, viable credit union.</p><p>"Anything that clarifies field of membership also clarifies things for groups seeking a de novo charter," Hauptman said.</p><p>Jason Stverak, deputy chief advocacy officer for the Credit Union National Association, said that getting credit union services to more communities across the country is important to CUNA, state leagues and credit unions. He added that CUNA needs to review the proposal in detail. </p><p>The unanimous vote on Thursday allows for a 90-day comment period to begin once agency officials publish the rule in the Federal Register.</p><p>NCUA board member Rodney Hood called the proposal a step in the right direction.</p><p>"But we have much more to build upon in this rule and from previous field of membership rulemakings," Hood said.</p><p><br /></p><p>Ken McCarthy-Reporter, Credit Union Journal</p><p><br /></p><div><br /></div>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-72312529330215729912023-02-23T10:36:00.001-05:002023-02-23T10:36:05.294-05:00Learning from nature — translating the science and art of murmurations into corporate culture<p>Growing up in the Midwest, I often found myself a spectator to one of nature's most unique and beautiful encounters — the murmuration of a flock of birds. From far away, you'd see one flock in cohesive movement, creating swells and ripples as they flew. </p><p>The real beauty of a murmuration, however, is in the science that happens inside the flock.</p><p>It’s not about following a lead duck, instead they coordinate by observing the birds around them and making the adjustments needed to keep the flock together. A sense of safety is present when so many eyes can watch for danger. The birds' synchronized movement warms the group in the cold winter months and attracts more birds to join in their flight. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ-sfArDorX93hba8yxw_FZFMxwjfs70dCq2pT51_Mv93SdD7v5nuGH8XqCD1LMfGdn-HWsqy2cqEfkcTu-cXQruobt67onWyFwrAfBA4-ll3BKzUJs6ztIjoalxjh40haWjhY77S1C7Xj49FSjbGWwdalW_UY-dRQ6SqAd9Ut7aYD-tivBf_cLVf3qw/s1500/Birds.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="844" data-original-width="1500" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ-sfArDorX93hba8yxw_FZFMxwjfs70dCq2pT51_Mv93SdD7v5nuGH8XqCD1LMfGdn-HWsqy2cqEfkcTu-cXQruobt67onWyFwrAfBA4-ll3BKzUJs6ztIjoalxjh40haWjhY77S1C7Xj49FSjbGWwdalW_UY-dRQ6SqAd9Ut7aYD-tivBf_cLVf3qw/s320/Birds.jpg" width="320" /></a></div><p></p><p>As I reminisced on this nostalgia, it came to mind that our company values reflect the science behind a murmuration because the murmuration's purpose is to foster the well-being of the flock. Ultimately, a company's core values should do the same for its employees.</p><p>***</p><p>'Many times, I've asked the question, "What makes me show up to work every day?" My answer shifts, but it always centers around those I work with. Zest AI has proven to me that belonging doesn't fall on an individual but instead is the work of a group to always advocate for greater inclusion. This culture is made possible when employees see their company and decision-makers living out the cultural values daily.</p><p>Our five core values of Heart, Collaboration, Bias-for-action, Communication, and Customer-centricity have created a safety net for our employees and encouraged the desire for a deeper understanding of ourselves, each other, and the world around us.</p><p>This company functions much like a murmuration. If you follow my simile, in our flock, we move in tandem, allowing space for each other's individual expression and growth while also recognizing that we all must grow together to remain whole. So we watch out for each other. We find harmony within the shifts and movements of our company. No one is left alone, and everyone authentically fits — we accept every kind of bird here! No need for a peacock to dress its plumage as a pelican or a starling as a bluejay. </p><p>We can learn a lot from nature. We can see how to care for each other and extend protection as a community. We can find ways to promote each other's wellness by offering a soft place to land. We see that by working as a unit, we can create harmony and beauty in the world around us. </p><p class="MsoNormal">Join us on March 8, 2023, from 11:30 AM to 12:30 PM as you
find out how credit unions are leveraging AI to increase approval and
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</p><p class="MsoNormal"><o:p> </o:p></p><p></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-1032238950727075302022-12-29T14:28:00.004-05:002022-12-29T14:28:32.623-05:00How & Why Credit Unions Are Outpacing the Market With Vehicle Leasing<p> Of all the change and uncertainty we’ve been through as an industry, one thing has held true throughout: It’s all about the payment. Sounds simple, right? And maybe even a bit obvious. After all, many people are no longer as interested in owning as they used to be. Renting and subscribing are more the order of the day. According to the Global Banking and Finance Review, 70% of business leaders say subscription business models will be key to their prospects in the coming years. According to Zion Market Research, the subscription and billing management market was valued at $3.8 billion in 2018 – and is expected to reach $10.5 billion by 2025. And while we can all agree on the importance of “the payment,” this desire is actively changing consumer financing preferences in surprising ways, while limiting their options. Market forces are putting pressure on buyers. Prices are too high – and inventories still so low.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvMk_zkUJdZOSDePqEVxXK3Qg8x7e-Iqp9QPs_H1QOEYmP8i45S-UN22P2k8FZaqxuBdPBJ4zf4fH6Lk5OoBDW7T_PBhDb5YugwFxDpYRWt-ucUhcQpa4-pu-gqkZFQkq4B57YsfIzT95bvua82uHw1R6aAcg2LSEenJFtohwh-ODxtXEbSHkr8Q8_wQ/s247/car.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="155" data-original-width="247" height="155" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvMk_zkUJdZOSDePqEVxXK3Qg8x7e-Iqp9QPs_H1QOEYmP8i45S-UN22P2k8FZaqxuBdPBJ4zf4fH6Lk5OoBDW7T_PBhDb5YugwFxDpYRWt-ucUhcQpa4-pu-gqkZFQkq4B57YsfIzT95bvua82uHw1R6aAcg2LSEenJFtohwh-ODxtXEbSHkr8Q8_wQ/s1600/car.JPG" width="247" /></a></div><p></p><p>Supply chain issues forming in 2020 and 2021 have caused OEMs and captive finance companies to actively pull back and in many cases eliminate incentives.</p><p>Shocker!</p><p>And, it’s not just rebates. Low interest rates and subverted residual values are scarce as well. And it makes perfect sense: Why would captive financial institutions offer incentives when the vehicles that dealers have are selling fast – and at full retail? They don’t need incentives.</p><p>Here’s a pretty typical captive finance scenario playing out on dealership lots: A customer coming to the end of his/her lease gets to choose between another lease for a similar vehicle – and hundreds more per month – or a 72-month loan for an even higher monthly payment. Excluding some cars, leasing for 39 months compared to a loan for six years can still be approximately $100 less per month. But that’s the best of two bad captive choices, and a scenario that leaves the dealer without any good options.</p><p>The result is sticker shock and a rethinking of options. Consider, for example, that pre-pandemic leasing was almost 30% of the new car market. In some states, it was over 60%. According to the most recent Experian Automotive Report, in Q2 of 2022, overall vehicle lease penetration dropped to just under 20%. All of which makes it appear as though leasing is unattractive and costly.</p><p>Blame the pandemic. Or, more accurately, blame the inventory shortages that were at least partially caused by the pandemic. The point is that captive finance companies aren’t pushing leasing as much as they did before because natural demand is stronger. As a result, this important payment option for consumers seems to have vanished.</p><p>But dig a little deeper, beyond the captives, and you can find gold.</p><p>Credit unions that participate in leasing are up nearly 50% because affordable leasing gives shoppers the power of more payment flexibility, while also keeping their vehicle under warranty. It’s an opportunity born from the alignment between high interest rates, the absence of incentives, and the high price of vehicles – an opportunity your members (and all consumers) have noticed. At nearly 26%, credit unions are experiencing their highest overall share of the auto finance market in five years – a percent of share that’s just 2% below banks.</p><p>Here’s a real-world example: According to John Hendricks, senior vice president of lending at the $979 million St. Mary’s Credit Union in Marlborough, Mass., they were not only able to provide members with a car buying alternative, but also effectively grow an auto portfolio at a rate they hadn’t seen in some time. Hendricks said: “With the price of cars continuing to increase, leasing is becoming more prevalent and is now a necessary tool for credit unions to remain competitive in the indirect space.”</p><p>It’s true that captives will always lead new vehicle financing, but credit unions are making important headway: Credit union leasing is proving to be a strong antidote for the inflation flu. It also serves as a balancing force that counters the heavy volume of indirect used vehicle business. It’s not uncommon to hear about a credit union that enjoys a record-breaking month in its indirect financing, only to learn that it’s 75% used. Leasing, as a predominately new vehicle option, helps to balance the plethora of used vehicle financing with the best kind of customer: One that learns to appreciate the local nature of customer service excellence of credit unions and has a reason to come back for their next loan … every three years.</p><p>In a volatile rate environment, with economic pressures weighing down on members, leasing is a short term, low risk, strong yield option that gives members more payment flexibility and credit unions returning business. That might seem simple – but it also sounds like a very successful strategy.</p><p>--Mark Chandler is Vice President, Business Development for CULA in San Diego.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-66994353277410169022022-11-08T10:29:00.006-05:002022-11-08T10:29:29.989-05:00Credit Union Loan Balances Soar Again<p> Credit unions continued their pattern of strong loan growth in September, but CUNA Chief Economist Mike Schenk said Monday the growth will fade as the Fed continues raising interest rates.</p><p>“That strong loan growth will be tapering off as we go forward,” Schenk said.</p><p>CUNA’s Monthly Credit Union Estimates released Friday showed credit unions made big gains in all major areas except first mortgages. Total loan balances grew 19.6% to $1.5 trillion from a year earlier, and rose 2.1% from the previous month, compared with an average September gain of 0.9%.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiodnne1QmaogpBCVZNjo7L0BXiVrJt61vZUfmLTHEsuWxD6G4ml3H-FCGfovLZcRvf-xsZi1Cgli-SBW_aR6Qy1EDb1MHAPmL3VAtRAwo8EPi4i3mtykoQzhkF30vUn2S4SyHDPM_WyfzBbigcmXVQkfiuTVQknSnr_SBiP1hqkeBmI7YIGrP8zpRdtQ/s393/building-icon-inscription-credit-union-260nw-462222511.webp" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="280" data-original-width="393" height="228" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiodnne1QmaogpBCVZNjo7L0BXiVrJt61vZUfmLTHEsuWxD6G4ml3H-FCGfovLZcRvf-xsZi1Cgli-SBW_aR6Qy1EDb1MHAPmL3VAtRAwo8EPi4i3mtykoQzhkF30vUn2S4SyHDPM_WyfzBbigcmXVQkfiuTVQknSnr_SBiP1hqkeBmI7YIGrP8zpRdtQ/s320/building-icon-inscription-credit-union-260nw-462222511.webp" width="320" /></a></div><p></p><p>Schenk said the report showed the same strong gains in loan balances from previous months this year.</p><p>The 2.1% gain from August to September marked the third month in a row with monthly gains exceeding 2%.</p><p>“Looking back over 30 years, there has never been a calendar year where we’ve had three months of loan growth that fast. It’s pretty incredible,” Schenk said.</p><p>Auto loans remain one of the leading growth areas.</p><p>New car loans grew 22.7% to $176.6 billion from a year earlier, and rose 3% from the previous month, compared with an average September gain of 1%.</p><p>Used car loans grew 19% to $309.9 billion from a year earlier, and rose 2.1% from the previous month, compared with an average September gain of 0.8%.</p><p>The Fed G-19 Consumer Credit Report released Monday showed credit unions increased their share of the nation’s total balance of motor vehicle loans. Credit unions had a record 34.8% share as of Sept. 30, up from 33.3% in June and 31.1% in September 2021.</p><p>Credit unions’ share was only about 25% in 2015. It rose to a high of 32.6% by the end of 2018 and fell to a low of 30.1% in June 2021 before setting new records in June and September this year.</p><p>The G-19 also showed credit unions increased their share of credit card debt.</p><p>Credit unions held $70.3 billion in credit card balances as of Sept. 30, up 14% from a year earlier, and up 0.7% from August, compared with an average September gain of 0.3%.</p><p>Credit unions’ share was 6.3% in September, compared with 6.2% in August and 6.3% in September 2021.</p><p>Banks held $1.02 trillion in credit card debt on Sept. 30, up 16.8% from a year earlier and up 0.4% from August. Banks’ share was 91.0% in September, unchanged from August and up from 90.2% in September 2021.</p><p>However, real estate is suffering.</p><p>The Mortgage Bankers Association estimated that third-quarter originations of first mortgages were $480 billion, down 55% from a year earlier. It forecast fourth-quarter originations will fall 59% to $410 billion.</p><p>Among the Top 10 credit unions by assets, residential real estate loan originations were $11.8 billion in the third quarter, down 33% from $17.6 billion a year earlier and down from $15.4 billion in the second quarter.</p><p>On the balance sheet, CUNA estimated that all credit unions held $549.4 billion in first-mortgages, down 2% from a year earlier, and up 1% from the previous month, compared with an average September gain of 1.1%.</p><p>Second-lien mortgages grew 17.8% to $100.3 billion from a year earlier, and rose 3.6% from the previous month, compared with an average September gain of 0.2%.</p><p>While loans have been growing quickly, savings have lagged. Savings were $1.9 billion on Sept. 30, up 6.6% from a year earlier, and up 0.7% from the previous month.</p><p>“And what all of that means is the loan-to-share ratio is rising and has been rising pretty strongly,” Schenk said.</p><p>The loan-to-share ratio was 79.0% on Sept. 30, up from 77.9% a month earlier and 70.4% in September 2021.</p><p>“That compares to a pre-pandemic reading of 71%, which is pretty close to the long-term average of 73%,” Schenk said. “What that means is there’s not a lot of liquidity, or liquidity has been tightening very significantly over the course of the year and it certainly did in the month of September.”</p><p>Schenk pointed to loan quality and membership growth as two of the brighter trends seen in its September report.</p><p>Credit unions had 136.1 million members on Sept. 30, up 3.8% from a year earlier, which Schenk said was “incredible” compared with annual U.S. population growth of about 0.5%.</p><p>The 60-days-plus delinquency rate was 0.49% on Sept. 30, up from an all-time low of 0.42% on March 31 and running at about half the long-term average delinquency rate of 0.96%.</p><p>“Delinquency held steady near all-time lows,” Schenk said.</p><p><br /></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-3810416502692271932022-10-19T09:05:00.006-04:002022-10-19T09:05:31.303-04:00PSCU Finds Energy Fueling Member Spending<p> Credit union members continued to increase their spending in September with rising prices, especially for energy, being a major factor, according to a PSCU report Tuesday.</p><p>PSCU, a payments CUSO based in St. Petersburg, Fla., showed overall dollars spent on credit cards in September was 13% higher than in September 2021, while the number of transactions rose 11%. Debit spending rose 6%, while transactions rose 3%.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIUiCcbGXf8BeERkPZnqimhjiOda1x0kFKuTUcXe2pVTA9dSF3dfCtWyPKWHsR75RtJfCVS_XXZwrFczDL14_1Y-Rh3Jp8anY7iV_rVeGrNr_Fc--KcJYbzuv-fdaeuOaFmQuTdfSgQd-qdc7KaG4oacZvZ_GAT8bLjCtQUs2zJDuU03hh417kdbnZRQ/s612/istockphoto-1201641300-612x612.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="612" data-original-width="612" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIUiCcbGXf8BeERkPZnqimhjiOda1x0kFKuTUcXe2pVTA9dSF3dfCtWyPKWHsR75RtJfCVS_XXZwrFczDL14_1Y-Rh3Jp8anY7iV_rVeGrNr_Fc--KcJYbzuv-fdaeuOaFmQuTdfSgQd-qdc7KaG4oacZvZ_GAT8bLjCtQUs2zJDuU03hh417kdbnZRQ/s320/istockphoto-1201641300-612x612.jpg" width="320" /></a></div><p></p><p>But the PSCU Payments Index found the disparity between dollars and transactions was especially high for energy: From gasoline to utilities.</p><p>“The U.S. economy continues to face persistently high inflation, a looming recession and rising energy prices. Yet consumer purchasing activity showed continued resilience in both credit card and debit card volume in September,” the report said.</p><p>Spending for gasoline rose 26% by credit card — twice as fast as the 13% increase in transactions. By debit, spending rose 13% while transactions rose 3%.</p><p>For electricity, natural gas and water, spending rose 26% while transactions grew 12%. By debit, spending rose 14% while transactions grew 5%.</p><p>Among credit union members receiving their first deliveries of fuel oil or propane in September — typically in the north— spending for those home heating fuels rose by 50%, while transactions rose 25%. By debit, spending rose 45%, while transactions rose 14%.</p><p>The U.S. Census Bureau reported Oct. 14 that retail spending, excluding automobiles and parts, rose 9.4% in September from a year earlier.</p><p>Census found grocery store spending rose 7% in September from a year earlier, Census reported. At PSCU, spending rose 17% by credit and rose 7% by debit.</p><p>Spending at restaurants and bars rose 13% in July from a year earlier, Census reported. At PSCU, spending rose 21% by credit and rose 7% by debit.</p><p>The average credit card balance was $2,797 per active account handled by PSCU in September, up 6.1% (or $160) from a year earlier.</p><p>“Credit card balances surpassed the September 2020 results of $2,787 for the first time since the decline in card balances that began in early 2020. The credit card delinquency rate for September was 1.74%, 16 basis points lower than pre-pandemic September 2019 levels,” the report said.</p><p>The Fed’s G-19 Consumer Credit Report released Oct. 7 showed credit card balances grew 13.3% to $69.8 billion in August from a year ago, and rose 1.2% from the previous month, compared with an average July-to-August gain of 1% from August 2015 through August 2021.</p><p>The PSCU Payments Index was based on data from credit unions that have been processing payments with PSCU since January 2020. It encompassed 2.9 billion transactions valued at $144 billion of credit and debit card activity in the 12 months ending Sept. 30.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-37686992342400037652022-10-12T13:28:00.003-04:002022-10-12T13:37:59.863-04:00World Council to Host Free "EMPOWER" Webinar on ICU Day<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizoEqxXjgtpeY4uOAVlqk3hsftWVrT2NZpVQTCTq78dHESvqJjdDpJEURqOgbG1D4OrHDgdorAigWT6QzFK2Lz9OLQvWo5b6a4k0LUcIjciRkRI6D0vHV5fReTTc1M-sD4inpnNmfYO257V1QxJRsW3WDMUWlI5FhEHUVqc8dcMEqGi28wz4nt1nk/s500/ICU_Day_2022_Poster_JPG.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="500" data-original-width="386" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizoEqxXjgtpeY4uOAVlqk3hsftWVrT2NZpVQTCTq78dHESvqJjdDpJEURqOgbG1D4OrHDgdorAigWT6QzFK2Lz9OLQvWo5b6a4k0LUcIjciRkRI6D0vHV5fReTTc1M-sD4inpnNmfYO257V1QxJRsW3WDMUWlI5FhEHUVqc8dcMEqGi28wz4nt1nk/s320/ICU_Day_2022_Poster_JPG.jpg" width="247" /></a></div>The theme for International Credit Union Day 2022 is "Empower Your Financial Future with a Credit Union." To celebrate ICU Day on Thursday, October 20th, World Council of Credit Unions is <a href="https://us06web.zoom.us/webinar/register/WN_fSUdijL7QV6eRhME7BSbJg" target="_blank"><u><span style="color: #2b00fe;"><b>hosting a virtual event</b></span><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"></span></u></a> featuring panelists from credit unions around the world who will discuss different ways they have empowered the financial futures of their members and employees <i>(click the link to register for the webinar).</i><br /><br />Participants will hear stories of empowerment from Ireland, Ukraine, and Peru—along with a description of how Worldwide Foundation for Credit Unions is joining forces with True Sky Credit Union from the United States to raise US $500,000 as part of its “EMPOWER” campaign to further credit union member empowerment moving forward.<p></p><p>This webinar will feature the following panelists:<br /></p><ul style="text-align: left;"><li>Mike Reuter, Executive Director, Worldwide Foundation for Credit Unions</li><li>Sean Cahill, CEO, TrueSky Credit Union (United States)</li><li>Billy Doyle, CEO, Dundalk Credit Union (Ireland)</li><li>Viacheslav Vitiuk, CEO, Credit Union PVKS (Ukraine)</li><li>Hector Farro, Deputy Manager, FINANSOL (Peru)</li><li>Pedro Pablo Martinez, Commercial Advisor, FINANSOL (Peru)<br /></li></ul><p><br />The webinar will include translation in the Spanish and Ukrainian languages. If you have questions about the webinar, contact Greg Neumann, World Council Director of Communications, at gneumann@woccu.org or +1 608-395-2048.<br /></p>AVCUhttp://www.blogger.com/profile/03867592752052512047noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-22028166837954019652022-09-15T11:47:00.005-04:002022-09-15T11:47:59.164-04:00Credit unions gain larger share of auto loans as banks lose momentum<p> A surge in auto lending in the second quarter has given U.S. credit unions their biggest slice of the vehicle lending pie in the past five years. </p><p>Recent data from the National Credit Union Administration showed that auto loans increased $58.7 billion, or 15.1% year over year, to $447.6 billion. Used-auto loans rose $43.2 billion, or 17.4%, to $291.0 billion, and new-auto loans rose $15.5 billion, or 11.0%, to $156.5 billion.</p><p>Experian’s State of the Automotive Finance Market report for the second quarter of 2022 shows that credit unions now have their highest total share of the auto lending market since 2017, at nearly 26%. A year ago that figure was just above 18%.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3z6V9lu21pprfvn3n-pJ4MOENVMPm8D4pB4FPzOWhEqk8D5ry-k6Ke5L_OccdGuTxW9EkxCwcQW4uEgolSWjj1ApgrCKpFOke4v_T0WQwr7yC77uATh_CIq4gcRZqKZaZnqelSXOpzV3O4UBF7WxdKejU-n92hEpNO7mZUOj30SXVSt2IwH-VH-zwwg/s1080/facebook-posts-spring-2020-9_orig.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="565" data-original-width="1080" height="167" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3z6V9lu21pprfvn3n-pJ4MOENVMPm8D4pB4FPzOWhEqk8D5ry-k6Ke5L_OccdGuTxW9EkxCwcQW4uEgolSWjj1ApgrCKpFOke4v_T0WQwr7yC77uATh_CIq4gcRZqKZaZnqelSXOpzV3O4UBF7WxdKejU-n92hEpNO7mZUOj30SXVSt2IwH-VH-zwwg/s320/facebook-posts-spring-2020-9_orig.jpg" width="320" /></a></div><p></p><p>The secret to their success is offering low rates and underpricing the market, said John Toohig, head of whole loan trading at Raymond James.</p><p>“We’re in this really weird spot right now where [credit unions] have a lot of cash on hand and they’ve been using it to make loans at ultra-low rates,” Toohig said. “We’re still seeing them make 1%, 2% or 3% auto loans whereas the rest of the market is at 5.5% or 6.5%.”</p><p>For Pathways Financial in Columbus, the average auto loan has risen $2,775 year over year, which represents an 11.7% increase in average loans outstanding.</p><p>And that increase in auto lending may be coming at the expense of banks. Growth in lending to consumers buying cars and trucks decelerated to half the pace of the prior three months for U.S. banks in the second quarter.</p><p>Experian said banks’ share of the market fell from 30.3% a year ago to 27.9% in 2022. The remainder of the market is owned by the auto companies themselves, as well as fintechs.</p><p>One of the credit unions seeing increased auto loan demand is Truliant Federal Credit Union, a $4 billion-asset lender in Winston-Salem, North Carolina. Truliant had $1.1 billion in auto loans at the end of the second quarter, up from roughly $1 billion at the same point last year, plus another $620 million in indirect auto loans. </p><p>Chris Murray, Truliant’s chief member experience officer, said auto loan demand has been strong, particularly through the indirect lending channel, which are made through a dealership rather than through the lender’s direct channels. </p><p>“And we expect it to remain strong,” Murray said. “We are leveraging our strength in indirect [lending] and making investments in technology, processes and people in order to scale up our capabilities to generate more loans through the channel.” </p><p>Most of the new business has been in used-auto loans, and Murray said funding loans fast is crucial when dealing with independent used-car dealerships. </p><p>“They rely on our fast funding, especially in today’s market where they have to compete heavily to get inventory at auction. Cash is king for them; the faster they get funded, the faster they can get the next car on the lot to sell,” Murray said. </p><p>And volumes have not slowed despite Truliant steadily raising rates. </p><p>Other credit unions will have to pump the brakes on auto lending soon, asin some cases they have nearly a negative net interest margin on auto loans, Toohig said. “They’re going to have to raise their rates first just to slow down lending but also to take a look at the profitability of the portfolio,” he said.</p><p>Curtis Onofri, chief lending officer at Pathways Financial Credit Union, a $592 million-asset lender in Columbus, Ohio, said auto-lending growth has been fueled both by new purchases and refinancing.</p><p>There are several factors at work causing the rapid growth in auto lending — including increased prices, strong marketing, trailing rate increases and better inventory, Onofri said. </p><p>“Prices in the new and used market have increased considerably over the past couple of years. This increase is translating into larger average loan amounts,” he said.</p><p>For Pathways, the average auto loan has risen $2,775 year over year, which represents an 11.7% increase in average loans outstanding.</p><p>Hanscom Federal Credit Union, a $1.9 billion-asset lender in Massachusetts, had $350 million in auto loans at the end of the second quarter plus another $231 million in indirect auto loans. </p><p>Dan Picard, Hanscom’s senior vice president of consumer lending and collections, said that with the lack of incentives at automobile dealerships due to limited inventory, auto manufacturers’ financing arms are not offering appealing financing options. </p><p>“As a result, the lending opportunities for credit unions has continued to be steady even in this rising rate environment,” he said. </p><p>Toohig said those loans are also driving up credit union membership, but the question is whether the credit unions can then cross-sell those consumers on other products like credit cards or mortgages. </p><p>It’s easier said than done, Toohig said. “Historically, that number [of cross-sales] is incredibly low.”</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-87690295838823328352022-09-02T09:18:00.003-04:002022-09-02T09:18:27.411-04:00Experian: Lower Rates Help Credit Unions Grab Q2 Auto Loans<p> Offering lower interest rates was a major reason credit unions amassed a share of auto loan originations in the second quarter that set a record going back to at least 2007, an Experian analyst said.</p><p>Experian’s “State of the Automotive Finance Market” report for the second quarter released Aug. 25 showed credit unions produced 25.8% of the loans and leases from lenders in the three months ending June 30, up from 18.3% a year earlier and 22.1% in this year’s first quarter.</p><p>Credit unions were second only to banks’ 27.9% share and surpassed captive lenders’ 22.6% share in the second quarter.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhatVilJjV8uoPc95rxPLMkNHekPyDsB_oU4s8b8oDeuk318MIAnZovZAuEbHTMCOly_ym2gDJRGY0pZ6dd76yjS0OOddSL6JLXTDFu1Cny7uNP93CCYbAGkCoIdvuv4rOBzGAb9gG99TBt4LX0maMDkLhmV5JOKlFw4ZHfWfWWbZbw2r2zx6fbkmmnDQ/s900/Tips-for-First-Time-Car-Buyers-1400x934-1-900x600.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="600" data-original-width="900" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhatVilJjV8uoPc95rxPLMkNHekPyDsB_oU4s8b8oDeuk318MIAnZovZAuEbHTMCOly_ym2gDJRGY0pZ6dd76yjS0OOddSL6JLXTDFu1Cny7uNP93CCYbAGkCoIdvuv4rOBzGAb9gG99TBt4LX0maMDkLhmV5JOKlFw4ZHfWfWWbZbw2r2zx6fbkmmnDQ/s320/Tips-for-First-Time-Car-Buyers-1400x934-1-900x600.jpg" width="320" /></a></div><p></p><p>The Experian report showed credit unions setting records for new and used auto originations going back to at least 2017.</p><p>But in an interview with CU Times on Aug. 26, Melinda Zabritski, Experian’s senior director of automotive financial solutions and the report’s author, said the volumes for the second quarter were higher than any period in her records, which go back to 2007.</p><p>“This is the highest we’ve seen credit union share,” Zabritski said.</p><p>The previous high for credit unions was about 23% of loans and leases for new and used vehicles in the third quarter of 2018.</p><p>Experian found credit unions’ biggest gain was in new cars, where the credit union share was 21.4% — nearly double the 11.2% from a year earlier and up from 15.8% in the first quarter. In used cars, the credit union share was 28.6% in the second quarter, up from 23.5% a year earlier and 26.5% in the first quarter.</p><p>Experian measures numbers of loans and leases, but the trend is similar when comparing portfolio balances measured by the Fed and CUNA.</p><p>The Fed and CUNA data showed credit unions held 33.7% of the nation’s auto loan balance as of June 30. The all-time high surpassed the previous record of 32.6% set in December 2018. The share was also up from 31.8% on March 31 and a low of 31.0% at the end of 2021’s second quarter.</p><p>Both Zabritski and CUNA Chief Economist Mike Schenk attributed much of the gain to credit unions offering lower interest rates to borrowers.</p><p>Schenk, in CUNA’s latest Economic Update video, said credit unions do a better job than banks and other lenders in providing the affordable credit people need to maintain reliable transportation to work.</p><p>“Getting to and from work is extremely important,” he said. “It helps ensure people’s financial well-being is on a firm footing.”</p><p>He cited DataTrac numbers that showed that credit unions were charging an average of 3.52% for a five-year loan of $38,000 on a new car on Aug. 22, compared with 4.72% by banks. Credit union borrowers had an average payment of $601, compared with $622 for banks, which Schenk said provided credit union members a saving of $1,247 over the life of the loan.</p><p>“Credit unions stand head and shoulders above other providers,” Schenk said.</p><p>Zabritski also found credit unions were offering lower rates in the second quarter.</p><p>“The other lender types actually have had a much more significant rate increase and the credit unions haven’t,” Zabritski said. “The credit union rates are significantly lower than the other lenders. Even on the used vehicle side, we’re talking over 200 basis points lower.”</p><p>“Credit union rates are actually down. Which is one reason average payments are lower at credit unions,” she said.</p><p>Zabritski said another factor benefitting credit unions is that captive lenders — the biggest share losers in the past year— have been offering few incentives since the supply of new vehicles has been constrained since early 2021.</p><p>Credit union share could wane, Zabritski said, but with new vehicle supplies constrained and with few incentives from captives, “you don’t have that, that competition on rate on the new vehicle side.”</p><p>Meanwhile, Jason Haley, chief investment officer for ALM First of Dallas, said credit unions need to be sure they’re not undercharging for loans.</p><p>Haley, speaking during Callahan & Associates’ quarterly Trendwatch webinar on Wednesday, said lending committees need to be constantly monitoring conditions, especially in volatile markets.</p><p>Credit union committees that meet monthly for loan pricing can be acting on data that’s turned. “Things can get stale really fast,” he said.</p><p>“It’s critical to maintain disciplined asset pricing when you’re in a volatile market,” Haley said. “Mispriced loans and poor asset pricing can definitely lead to liquidity issues down the road.”</p><p>Zabritski said another change in the market is that most borrowers have improved their credit scores since the COVID-19 pandemic began in March 2020.</p><p>“We’ve seen a continual migration in credit scores over the last several years,” she said. “We have a much larger percentage of the market that is prime.”</p><p>For example, people who took out a loan in 2017 have seen their credit scores rise 20 to 50 points.</p><p>Another change is that people who bought a used vehicle in 2017 often have seen their loan-to-value ratios fall.</p><p>Zabritski compared the original 2017 manufacturer’s suggested retail price (MSRP) on the top 10 used vehicles that people buy today (yes, mostly trucks) with their current used car value.</p><p>“In almost every case, the current used value is higher than the original MSRP,” she said. “So you’re finding situations where the vehicle sitting in your driveway is worth more today than it was when you bought it.”</p><p>So if you bought the car for $25,000, its worth now as a trade in is $25,000 and you owe just $15,000 on it, “you’ve got $10,000 in equity.”</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-89808683692864855262022-08-23T09:54:00.004-04:002022-08-23T09:54:32.018-04:00Demand for personal loans pressures banks, fintechs, credit unions<p> Banks were already under interest rate pressure on personal loans from firms including SoFi and Marcus, and new data reveals that credit unions are also taking a larger chunk of that lending pie.</p><p>Credit union loan balances rose 2.3% in May and unsecured personal loans led the way with 3% monthly growth, according to a report that CUNA Mutual Group, an insurance and financial services company that monitors the credit union industry, published this month. </p><p>"Many credit union members are taking on debt before interest rates rise further [to combat inflation] and to consolidate other loans. We expect this trend to continue for the next six months before slowing in 2023, when interest rates will be reaching their peak," said Steve Rick, chief economist for CUNA Mutual Group.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLu9F6my3EyRnStGfgn5Idl2CI28uFtdNYfK4cWE4kUogJZRG0vl0s89TODF8pud9KyBMNWTxWh5Ur261QadhhO3LteiH_0-cmKhah_5mwvpRL08wAXGQCF0f8_KHfYhq8mloc8iLE2pmkOuvO10dJigDR8tkpOiR2CFYoy_ZXaDW_AN4mQmb_gkCqBA/s1250/Unsecured-Personal-Loans-for-Bad-Credit.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="645" data-original-width="1250" height="165" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLu9F6my3EyRnStGfgn5Idl2CI28uFtdNYfK4cWE4kUogJZRG0vl0s89TODF8pud9KyBMNWTxWh5Ur261QadhhO3LteiH_0-cmKhah_5mwvpRL08wAXGQCF0f8_KHfYhq8mloc8iLE2pmkOuvO10dJigDR8tkpOiR2CFYoy_ZXaDW_AN4mQmb_gkCqBA/s320/Unsecured-Personal-Loans-for-Bad-Credit.jpg" width="320" /></a></div><p></p><p>Unsecured lending grew 13% in the first six months of 2022, compared to 0% annual growth in the first six months of 2021, Rick said.</p><p>One of the credit unions seeing more applications for unsecured loans is North Country Federal Credit Union in South Burlington, Vermont.</p><p>Personal loans are up 7.2% year-to-date for the $908 million-asset credit union, according to CEO Bob Morgan. But the increase may not be due entirely to new borrowers walking through the doors.</p><p>"I think the reason consumer loans are growing in 2022 more rapidly is due to fewer payoffs from mortgage refinances rather than a surge of originations," Morgan said. "This causes a slower churn for the portfolio and a more rapid rate of growth."</p><p>Morgan said personal lending is a "highly competitive" market among banks, other credit unions and fintechs. "Players like SoFi and Marcus have as much influence or more than credit unions on rates," he said.</p><p>Banks that are active in this space are seeing the effect of new entrants. Stephen Varckette, president and CEO of Andover Bank in Andover, Ohio, said personal loan activity has held at a "pretty normal" pace for the $581 million-asset bank due to the increased competition.</p><p>"There are a ton of non-traditional options these days for consumers," Varckette said. "I assume they are gaining in popularity."</p><p>A combination of factors — the elimination of federal COVID-19 assistance, the rising costs of basic needs and smaller pool of disposable income — is forcing more consumers to seek personal loans to make ends meet.</p><p>But those borrowers are scrambling to find the best deals as rates continue to rise.</p><p>The average personal loan interest rate has risen from 10.41% at the beginning of May 2022 to 10.60% as of July 20th, 2022, according to Bankrate.com. Personal loan interest rates are likely to continue rising if the Fed raises the prime rate again at its next meeting, the company said. </p><p>When interest rates on deposits are well below inflation, there is little incentive to save. In fact, buying something today may be cheaper than borrowing the money, said Tim Scholten, founder and president of the credit union and community bank consultancy Visible Progress.</p><p>So why would that lead to more unsecured debt?</p><p>One alternative would be refinancing a mortgage to take equity out, but this is less attractive today due to increased rates — making unsecured debt the next best option, Scholten said.</p><p>"Rather than increasing interest on their entire mortgage, it is more cost-effective to take out a higher-rate unsecured loan," Scholten said. "If I know that things are going to cost 10% more next year than now, it makes sense to buy now with borrowed money and pay it back with inflated dollars."</p><p>Inflation really kicked into high gear in 2022, but salaries haven't adjusted much yet. At the same time, property values jumped dramatically, and property tax increases are taking a bigger bite out of paychecks, Scholten said. </p><p>As a result, many consumers need more money at the end of their month and are using debt to solve the issue.</p><p>"I fully expect this trend to continue as long as banks and credit unions continue to offer unsecured loans at reasonable rates," Scholten said. "Inflation gives consumers lots of incentive to spend and little incentive to save under the current conditions."</p><p>Vincent Hui, managing director at Cornerstone Advisors, said the firm has noted an uptick in credit card usage — an alternative to taking out more loans — but nowhere near the level that secured loans such as auto and mortgage have reached lately.</p><p>"Inflation is a factor, as it is decreasing discretionary spend and people needing to tap into credit," Hui said. "Either way, overall lending will likely slow as interest rates rise, making monthly payments less affordable for folks."</p><p>Scholten said the popularity of buy now/pay later loans undoubtedly is also having some impact on the personal loan space for credit unions and banks, although he said exactly how much is tough to gauge. </p><p>"I think BNPL growth is an indicator of the current consumer mindset," Scholten said.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-39519102736282016862022-08-03T09:38:00.004-04:002022-08-03T09:38:46.707-04:00Filling Your Mortgage Pipeline By Marketing To Millennials <p> For years, “millennial” has been a loaded term. Older generations in particular tend to hear “millennial” and picture entitled teenagers with no inclination toward investment or future planning. And there’s some truth to that — thanks to a number of societal circumstances during millennials’ formative years (think the Great Recession, college tuition inflation and now, the COVID-19 pandemic), many millennials started adulthood a bit behind where their parents were at the same age, at least in terms of finances and lifestyle. So, in years past, millennials and mortgages weren't always a natural pair.</p><p>But now, millennials are all grown up. Born between 1981-1996, the youngest members of this generation are 26 years old, and the oldest are in their early forties. And thanks to favorable socioeconomic conditions in America during their birth-year range, they have surpassed the baby boomers as the largest generation.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWKyPn8B8idcYT6jilvjnRAKxh8kEhQZbu9Fe_s5ADBn8f2P0R3ZAzxaDssqHASilRlrdm1URrgRn6rn4K8rsVITWFPS2t4JCKEsex1fRvgC0KnpPiJmwg53tXdhwwjTVuRoNQNsz1_noGbTtO0eRPxgWS1FmP40iCJ4EIXU1yDbbJLbg73MJLmuR_1A/s1692/mil-couple-2.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1123" data-original-width="1692" height="212" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWKyPn8B8idcYT6jilvjnRAKxh8kEhQZbu9Fe_s5ADBn8f2P0R3ZAzxaDssqHASilRlrdm1URrgRn6rn4K8rsVITWFPS2t4JCKEsex1fRvgC0KnpPiJmwg53tXdhwwjTVuRoNQNsz1_noGbTtO0eRPxgWS1FmP40iCJ4EIXU1yDbbJLbg73MJLmuR_1A/s320/mil-couple-2.jpg" width="320" /></a></div><p></p><p>As such, millennials currently have more spending power than any other generation, and that spending power aligns with common lifestyle changes for their age range. Many are beginning to get married, have children, and tire of the frustrations of long-term renting. Although they are known for changing companies and even careers much more often than any previous generation, many millennials now have enough workforce experience that their savings, credit scores, and overall financial health would support a first-time home purchase.</p><p>How can you, as a credit union with a large number of millennial members, start to encourage millennials towards home ownership? Here are four primary tactics that can assist you in reaching millennial members and driving mortgage volume.</p><p>1. <b>Target messaging</b>. Consider mortgage marketing campaigns that specifically engage millennials. Because many adults in this age group still consider home ownership unattainable, they may tune out traditional mortgage marketing materials.</p><p>2. <b>Become a financial awareness resource.</b> Step one is encouraging millennials to recognize that they can purchase a house. Step two is teaching them how. By creating a bank of resources for mortgage-seeking millennials, you can not only give them the confidence they need to move forward in the mortgage application process but can build their trust in your institution. Resource recommendations include information on different types of loans, down payments, and closing costs, and the mortgage and homebuying process in general.</p><p>3. <b>Provide housing market education</b>. Real estate conditions are always changing. Current inventory is very low, and interest rates are rising. That means millennials who are considering home ownership need to start preparing now. Educate your members on getting a bona fide pre-approval today so they can move swiftly when their dream house hits the market. If they aren’t ready to put in an offer immediately, the property is likely to go under contract very quickly.</p><p>4. <b>Invest in your technology and your team</b>; But don't forget the human touch. It’s well-known that millennials prefer self-service across the board, including when it comes to pre-approvals, real estate searches, and mortgage industry research, so it’s important that your credit union has the tech stack to allow them this independence, providing a full digital experience from a mortgage portal to calculators and rates on the website. However, your services can’t stop at cutting-edge technology. Millennials also value human interaction to address more complex issues or individual challenges. Don’t forget the importance of having real, knowledgeable, helpful people standing by to assist millennials (and every other generation) in their mortgage journeys.</p><p>Increasing supply constraints as well as the rising interest rate environment are likely to make 2022 a fast-paced, high-stakes year when it comes to homebuying. Ensure your millennials are prepared to make a move when the time is right, and turn to you for their mortgage needs by getting in front of their education and encouragement today.</p><p><br /></p><p><br /></p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-16186708569063783292022-08-03T09:29:00.005-04:002022-08-03T09:29:49.237-04:00Credit Crunch Looms for Auto Lenders as Paycheck-to-Paycheck Pressures Intensify<p> The credit crunch looms for auto lenders — perhaps most imminently for those lending to the subprime market.</p><p>To that end, and as noted Tuesday (Aug. 2) by sites such as Seeking Alpha, Credit Acceptance, which helps auto dealers offer vehicle financing — including to consumers who have less-than-stellar credit profiles — has sounded a warning about near-term prospects of seeing timely payments on recently-extended loans.</p><p>The key pressures are showing up in metrics where collection rates have declined, to a recent 67.1% and where the company had given a forecast of 67.6%.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOFyBTqVl-KBIX2I8nmWo74UCXEkzc7t-4bG_4E0s7Wy_skAJE_irrzYoCbuT-jNyraA_h9cCwkRyoEBPzZMCAR52vkzLMRlB5weKz9pTKyJym1ETFnF-ebj0f_0b_qklSE_syqlsy7GC9bA1DnrvAXLX4wKTGUTd52yMZnzJRznzyP1QdH-CEq2g73A/s450/paycheck-to-paycheck-steps-450x253%20(1).jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="253" data-original-width="450" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOFyBTqVl-KBIX2I8nmWo74UCXEkzc7t-4bG_4E0s7Wy_skAJE_irrzYoCbuT-jNyraA_h9cCwkRyoEBPzZMCAR52vkzLMRlB5weKz9pTKyJym1ETFnF-ebj0f_0b_qklSE_syqlsy7GC9bA1DnrvAXLX4wKTGUTd52yMZnzJRznzyP1QdH-CEq2g73A/s320/paycheck-to-paycheck-steps-450x253%20(1).jpg" width="320" /></a></div><p></p><p>Credit Acceptance said in its earnings release Monday (Aug. 1) that the forecasts applied to consumer loans that had been assigned this year. The firm also said that the decrease would impact cash flows. And in a bit of granular detail, Credit Acceptance said in its release that for loans that had been assigned from Jan. 1 to March 31, the forecasted collection percentage was 66.4%. Initially, that percentage had been 67.2%.</p><p>The forecast miss — as well as commentary on the Credit Acceptance conference call — helped send the stock down 9% on the day, and lending peers such as Ally Financial were down mid-single digit percentage points.</p><p>During the conference call with analysts, Credit Acceptance Chief Treasury Officer Doug Busk said “the end of stimulus and supplemental unemployment benefits” helped impact loan performance. He also noted that inflation had been taking its toll, even as consumers have been “working through” the savings that had been accumulated during earlier stimulus payment activity.</p><p>Consumers, he said later in the call, have seen at least some impact on their ability to pay amid an inflationary environment that means they must spend more on gas and food.</p><p>The read-across seems troubling for the paycheck-to-paycheck economy at large.</p><p>Many consumers in the United States — at 61% — have little, if anything, left over after paying the monthly bills. Those recurring obligations include auto loans. Drill down into the demographics where consumers earn less than $50,000, and 77% live paycheck to paycheck. A third of them have difficulty paying their bills.</p><p><b>58% of Consumers Live Paycheck to Paycheck, up From 54% a Year Ago</b></p><p>Research also found that 13% of all consumers — an estimated 33.5 million individuals — spent more than what they earned in the past six months, up from 12% in May. Average savings among all consumers dropped 8%, from $11,724 in May to $10,757 in June. For consumers living paycheck to paycheck with issues paying their bills, that cash cushion has dropped from a peak of more than $4,000 to a recent $2,460.</p><p><b> Savings Cushion Dwindles for Lower Income Paycheck-to-Paycheck Economy</b></p><p>When faced with the choice between putting food on the table, and on keeping gas in the car — stretching the dollars in other words — consumers will triage their bills. And paying the car note on time may take a backseat for now.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-44666155908591020832022-07-06T11:04:00.003-04:002022-07-06T11:04:19.294-04:00Lenders' use of rent data in loan decisions helps homebuyers, but dangers lurk<p> As Ken Riemer, an Alabama attorney who does pro bono work, recently got ready to meet with residents of the homeless shelter in his neighborhood, he assumed most of their questions would be outside his consumer finance practice, and would perhaps ask about government benefits, family law or criminal issues.</p><p>“I was shocked to find out that most of the problems had to do with credit reporting — right down my alley,” he said. Six of the 10 people he met with that day were living in the shelter solely because a rent-related credit reporting issue had shut them out of the housing market. In some cases, this was due to a single late payment.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeTAVFZNHkN-nqcLAW1vdzupeSrfYf5VL6_GBkOxdvLXogYKvVQw9mEVLKnTbCQ3-PE4SzmhMTZ6zLEc1qtvKB1Oo4tTtgVsmFzZf0MRtce5GTUQ-uTsx9OAz2jFIXlp5E49cz-cRlcpWGRyRRb6P8BlaYckRicY49LMTWTJQDElR-fk3p9Y0ikedfAw/s800/forrent.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="600" data-original-width="800" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeTAVFZNHkN-nqcLAW1vdzupeSrfYf5VL6_GBkOxdvLXogYKvVQw9mEVLKnTbCQ3-PE4SzmhMTZ6zLEc1qtvKB1Oo4tTtgVsmFzZf0MRtce5GTUQ-uTsx9OAz2jFIXlp5E49cz-cRlcpWGRyRRb6P8BlaYckRicY49LMTWTJQDElR-fk3p9Y0ikedfAw/s320/forrent.jpg" width="320" /></a></div><p></p><p>“These are folks with enough income to pay market, nonsubsidized rent, but were nevertheless forced to move their families into a homeless shelter simply because their credit history disqualified them from renting,” Riemer said.</p><p> Lenders are now making more use of rent data in credit decisions. The data itself is becoming more available from credit bureaus and other data providers, and Fannie Mae and Freddie Mac are now willing to buy loans that rely in part on this data, provided lenders obtain consumers’ consent and that they only use the data in a positive way.</p><p>For people who have a low credit score or no credit score, lenders’ use of rent payment data in credit decisions can open doors. Lenders can see that a potential borrower has been paying her rent consistently for the past two years, and decide she’s responsible enough to handle a loan. </p><p>But if not done with care, the use of rent payment data in credit decisions could harm some consumers, especially the most vulnerable, said Chi Chi Wu, staff attorney at the National Consumer Law Center. </p><p>“Black and brown and consumers of color are disproportionately the ones affected by things like evictions,” Wu said. “While they tend to be renters, a lot of them also struggle with rent, especially during the pandemic.”</p><p>At the homeless shelter in Riemer’s neighborhood, in some cases, what actually happened is in dispute. A landlord decides a renter didn't give proper notice and asks for an extra month’s rent. The renter thinks she doesn’t owe it and already put money down on a new place. In one case, a landlord claimed a renter was responsible for damage to an air conditioning unit, while the renter insisted she was not.</p><p>The heightened concern among renters is that landlords are consolidating and becoming larger and more powerful.</p><p>“The bigger companies have systems that allow for less and less deviation by human beings,” Riemer said. “So if the system thinks you're late, whether you really are or not, then that's what gets reported to the credit bureaus.” </p><p>Tenants who’ve had issues such as temporary unemployment, perhaps due to pandemic-related shutdowns, or a stretch of bad luck such as a family member who needs care, can also be affected.</p><p>“Over the long haul, these folks have enough income to be responsible tenants and otherwise pay their bills,” Riemer said. “But because of systematic institutional automated credit reporting, that follows you for seven years.” </p><p>Riemer tries to help resolve these types of disputes. “But where the delinquencies are accurate, there’s not much to do other than wait out the seven-year period,” he said. “I’m keenly aware of the outsized role credit reporting can play in keeping folks in difficult financial situations in general, but I was shocked to see a direct connection to something as extreme as homelessness."</p><p>For the most part, rent payment data is not reported to credit bureaus today, noted Karan Kaul, principal research associate at the Urban Institute. Less than 5% of renters’ payment history is reported to the bureaus, he said. </p><p>“In cases when it is reported, it is usually when someone has fallen behind on their rent payment,” Kaul said. “Landlords haven't historically reported rent payments to the credit bureaus if you've been making your payments, but then the day you fall behind and you miss a month or two of payments, that's when you get reported. It just seems very, very unfair.”</p><p><b>Positive uses of rent data</b></p><p>Fannie Mae and Freddie Mac have both agreed to buy home loans that take into account rent payment data. Lenders can extract information about a potential borrower’s 12-month rent payment history from their bank accounts, with the consumer’s permission, allowing them to approve people they might otherwise deny. Fannie Mae began accepting such loans in September; Freddie Mac will start July 10.</p><p>In late June, Fannie Mae reported that since it began allowing the use of positive rent payment data, more than 2,000 loan applications have become eligible for loans that otherwise would not have been. Of these, approximately 41% of the borrowers identified themselves as Black or Latino/Hispanic.</p><p>U.S. Bank is one lender using renters’ data. As at most banks, its loan officers have long considered borrowers’ rent payment history in credit decisions.</p><p>In September, the bank began doing this in an automated way. It uses mortgage origination software from Blend that incorporates rent payment history from customers’ bank statements. </p><p>Having this process automated is a game changer, according to Tom Wind, executive vice president, consumer lending at U.S. Bank.</p><p> “One of the issues that's existed in trying to qualify a customer with rent data is that you have to collect the documents,” Wind said. “You have to get canceled checks and bring them in. Not many landlords report rent to the credit bureaus, so it's a very manual process. The really nice breakthrough here is using bank statement information in the normal credit decision process. It’s efficient for the lenders, it speeds up the process for the borrowers and I think it brings into the mainstream this use of nontraditional data that can result in better outcomes for customers.”</p><p>U.S. Bank doesn’t ask applicants for a bank statement. Instead, it asks who the customer banks with, and connects to those accounts through Plaid, Finicity or another data aggregator Blend works with. It then pulls in 12 months’ worth of rent payment history. </p><p>“I only know of positive outcomes from this,” Wind said.</p><p>Over time, he expects more opportunities will arise to bring alternative data into loan decisions. </p><p>“We think this is a really good step in the right direction of doing what we're all focused on doing, which is finding out ways that qualified people who are getting excluded because of the way the rules are structured, can qualify because in the end, we're all about sustainable homeownership,” Wind said. </p><p>Using alternative data like rent payments is broadening U.S. Bank’s customer base and making homeownership possible for the first time for a lot of people, Wind said. </p><p>“It's doing it in a way that we feel is really responsible, because it's not just broadening the guidelines, it's very specifically picking up people who have a history of being able to afford a payment and saying, ‘You could afford that rent payment, you can do the mortgage,’ ” Wind said. </p><p>Wu approves of this approach to rent data, not only because it is positive only and consumers have to opt in, but because the data bypasses the credit bureau, she said.</p><p>“That way it can't hurt because this data isn't being dumped into the credit bureau file,” Wu said. “So it can't hurt in terms of use by landlords. It can help those who are ready to make that next step to homeownership without hurting struggling, vulnerable renters who are probably not ready for home ownership anytime soon.” </p><p>Pankaj Jain is originally from India and started his career at Citi. The job brought him to the U.S., where it took him three years to get a credit card.</p><p>“I would apply and they would say, ‘not enough credit history,” Jain recalled. “I would get a decline letter, then I would apply again. They said ‘too many inquiries’ because I was desperate to get it and applying again and again.” He finally got a card from Capital One. </p><p>If any lender had looked at his rent and utility payments, it would have approved him right away, Jain believes. </p><p>“There are about 40 million people like me who are thin file, no file or living in the margins,” Jain said. </p><p>Jain is now CEO of Scienaptic, a maker of software that lets lenders use AI and alternative data such as rent payments in their decisions. It uses what Jain describes as a waterfall method.</p><p>For people who qualify for a loan using traditional underwriting, the software uses data from the credit bureau file. For people for whom such data does not exist, Scienaptic makes available other information such as rent payment history. Rent data comes from providers like LexisNexis or Clarity Services, which is owned by Experian. </p><p>Using this additional information, “We are able to pick up those 20%, 30% of the people who are diamonds in the rough from that and approve them,” Jain said.</p><p><b>Where the danger lies</b></p><p>What consumer advocates worry about is what could happen in the future, if guardrails like requiring consumer consent and only using the rent data positively don’t exist. </p><p>“If this information is available in the credit bureaus’ credit files, then it could be accessible to all sorts of predators and they might use it to make decisions,” Kaul of the Urban Institute said. </p><p>Kaul understands why consumer advocates are reluctant to have rent data widely used because they don't want some of these consumers to get penalized, as many are today. But he also says the potential benefits of the positive use of rent data far outweigh the downsides.</p><p>Wu says that in the use of rent data in loan decisions, the devil is in the details.</p><p>“It matters a lot how the rent data is used,” she said. If only positive rent data is used with the consumer’s permission, it’s helpful.</p><p>Another mantra Wu uses for alternative data is, “do no harm.”</p><p>“The harm here comes from including rent payment data on a monthly basis, positive and negative — what they call full-file reporting to the big three credit bureaus,” Wu said. “That's where it could hurt.”</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-28742644977094441502022-06-22T14:55:00.003-04:002022-06-22T14:55:23.940-04:00CUSOs: Member Spending Shows Inflation Stress<p> Credit union members are paying much more for gasoline, groceries and restaurant meals than a year ago with inflation becoming a growing contributor, according to reports from payments CUSOs.</p><p>PSCU’s Payments Index released June 16 showed members whose credit unions use PSCU services spent 15% more by credit card and 6% more by debit in May than they did in May 2021.</p><p>The changes bracketed the 11.7% gain reported by the Census Bureau June 15 for retail spending in May, excluding vehicles and auto parts.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0FCu_-87n_wfU2jyOSZzOZ20dqXMMo8Bly6bIIaMqS3OqYIanuz6GzIRYPedbFJokBlFNGdV1ePVqUK-Au8dA_XQQnkQ9wtzzlni3IKR8CNOKynvNVUerMwmBbE297yU2wwAT4B1SWhkTlKk3CyzJhVPTd2WLgk5Wf38uL7wo_yOFwHb7Ip1sdWTu3g/s1200/Why-is-it-important-to-factor-inflation-into-retirement-planning-Coastal-Wealth-Management.gif" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="628" data-original-width="1200" height="167" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0FCu_-87n_wfU2jyOSZzOZ20dqXMMo8Bly6bIIaMqS3OqYIanuz6GzIRYPedbFJokBlFNGdV1ePVqUK-Au8dA_XQQnkQ9wtzzlni3IKR8CNOKynvNVUerMwmBbE297yU2wwAT4B1SWhkTlKk3CyzJhVPTd2WLgk5Wf38uL7wo_yOFwHb7Ip1sdWTu3g/s320/Why-is-it-important-to-factor-inflation-into-retirement-planning-Coastal-Wealth-Management.gif" width="320" /></a></div><p></p><p>PSCU’s numbers reflected a shift from debit to credit with the debit gains smaller than Census figures and the credit gains larger.</p><p>Co-op Solutions of Rancho Cucamonga, Calif., also reported strong one-month spending gains across most categories among members at credit unions in its network.</p><p>Beth Phillips, director at Co-op Solutions, said May’s data shows a continuation of the year-long shift away from debit spending to credit.</p><p>“Debit card users are pulling back on spend, possibly moving to credit for smaller, everyday purchases, while, reserving their cash available for larger purchases, like home improvement, or to keep it on hand due to economic conditions,” Phillips said.</p><p>Brian Caldarelli, PSCU’s EVP and CFO, said overall consumer spending growth remained strong throughout May 2022, with gasoline showing the top growth rates in both credit and debit as fuel prices remain elevated.</p><p>“The Consumer Price Index increased this month as we continue to face the highest level of inflation in more than 40 years,” Caldarelli said. “While the Federal Reserve announced another rate increase this week, a pause in the series of aggressive rate hikes is unlikely until inflation returns to an acceptable level.”</p><p>By segment, Census and PSCU reported the following 12-month gains in May:</p><p></p><ul style="text-align: left;"><li>Gasoline spending rose 43.5%, according to Census. PSCU reported gains of 54% by credit and 32% by debit.</li><li>Grocery spending rose 7.9%, according to Census. PSCU reported a gain of 15% by credit and 5% by debit.</li><li>Restaurant spending rose 16.8%, according to Census. PSCU reported gains of 26% by credit and 8% by debit.</li></ul><p></p><p>The PSCU report found a “notable lift in restaurants as consumers continued to return to dining outside the home, which comes at the expense of less growth in the grocery store sector.”</p><p>Average credit card account balances among PSCU-affiliated members finished May 2022 at $2,724, up 2.9% compared to May 2021. This was the third consecutive month in which year-over-year growth in balances was greater than 2%. Average credit card account balances were down 5.5%, or $157, from May 2021.</p><p>“As consumers have less liquidity, we see a return to a greater reliance on credit activity as the market deals with persistently high inflation,” the PSCU report said. “After a period of tangible credit card balance paydowns, we could see growth in balances from more recent bigger-ticket travel and entertainment sector purchases.”</p><p>Co-op Solutions’s June 15 report also showed credit balances have increased steadily since the beginning of 2022 on a year-ago basis. May 2022 showed the strongest growth trend yet, with 8.1% higher balances as compared with May 2021 and a lift of nearly 1% over April 2022.</p><p>The Fed’s G-19 Consumer Credit Report released June 7 showed the amount of credit card debt held by both banks and credit unions in April continued to inch closer to the level of February 2020, the month before COVID-19 was declared a pandemic and credit card debt began to plummet.</p><p>Credit unions held $64.7 billion in credit card debt in April, up 10.8% from a year earlier, but still 0.9% below February 2020. Banks were just 0.2% below February 2020.</p><p>PSCU’s February Payments Index was based on data from credit unions that have been processing payments with PSCU since January 2020. It encompassed 2.7 billion transactions valued at $137 billion of credit and debit card activity in the 12 months ending May 31.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-33647549026617855312022-06-09T11:21:00.006-04:002022-06-09T11:21:58.441-04:00What’s in a name? A credit union’s LGBTQ program finds a wider audience<p> Credit unions that tailor services for members of the LGBTQ community may find an unmet need among other demographics as well.</p><p>Michigan State University Federal Credit Union in East Lansing, Michigan, is nearing the finish line on development of a feature within its digital banking platforms and card offerings that will allow members to set a preferred name and set of pronouns. The program, which is expected to go live before the end of the third quarter, is like many others that allow credit card users, for example, to put their preferred name on the card.</p><p>While such services are developed with a transgender audience in mind, they also appeal to other marginalized groups such as international students or indigenous persons, said Amanda Denney, director of diversity, equity and inclusion for the $6.8 billion-asset MSU FCU, which serves students and staff of the university, as well as employees of the state.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqCzUhpZTCzDYGaNxybpBVLvd9lojzs3Zp2S0sjE4BWmYcM4tQovF3Xak4k-QLSfJygbfJ1yjN7NfwkGcKx5FO0Gf_YoMnTAbQ9_b_IcPpo5Al_6CYoRMCZYglZaV1bLY9NRgRXHGZ0Gjmn6uk3gctwX48Dw0Qiknf4l5wWTkrizZk1iN4DZN_03fS3g/s1200/download%20(61).jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="630" data-original-width="1200" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqCzUhpZTCzDYGaNxybpBVLvd9lojzs3Zp2S0sjE4BWmYcM4tQovF3Xak4k-QLSfJygbfJ1yjN7NfwkGcKx5FO0Gf_YoMnTAbQ9_b_IcPpo5Al_6CYoRMCZYglZaV1bLY9NRgRXHGZ0Gjmn6uk3gctwX48Dw0Qiknf4l5wWTkrizZk1iN4DZN_03fS3g/s320/download%20(61).jpg" width="320" /></a></div><p></p><p>“We have a lot of international students that come over and actually pick Americanized names, and they do this for a number of reasons, but that project is helping that group of people too,” Denney said. “When we hear preferred names and pronouns, people automatically jump to LGBTQ+, but there is such a huge impact [with this project] across the board with really anyone.”</p><p>The credit union first explored the concept internally in 2020 with the inclusion of pronouns in staff email signatures and editing of employment documents wherever legally allowed to record a new chosen name. It also incorporated educational material into its trainings on diversity, equity and inclusion to explain the significance of MSUFCU’s change.</p><p>Banks and credit unions that provide such products must also make sure their staff are properly instructed on using preferred names and pronouns in every customer interaction.</p><p>“Our goal is to allow everyone to be their full, authentic self and that’s really hard to do if you’re consistently being affronted with microaggressions by being misgendered [and] mislabeled,” Denney said. “Very specifically for the LGBTQ+ community, especially individuals that are nonbinary, or transgender, this can be a really important tool for them.”</p><p>Organizations such as <a href="https://www.americanbanker.com/news/lgbt-neobank-daylight-urges-banks-to-let-customers-use-true-names" target="_blank">Daylight</a>, a New York-based digital banking provider for the LGBTQ community, and <a href="https://www.americanbanker.com/payments/news/mastercard-issuers-add-true-names-for-transgender-cardholders" target="_blank">Mastercard </a>have also launched preferred-name projects with the aim to better serve transgender and nonbinary consumers who endure negative encounters due to a difference between their legal and preferred names.</p><p>Some credit unions that already have similar initiatives in place are working to now offer more tailored services in lending for consumers seeking to undergo <a href="https://www.americanbanker.com/creditunions/news/why-this-credit-union-is-offering-a-transgender-lending-program" target="_blank">gender affirming procedures,</a> as well as other LGTBQ funding needs.</p><p>Linda Bodie, chief executive and innovator at the $44 million-asset Element Federal Credit Union in Charleston, West Virginia, said she has worked alongside local pride organizations to better understand the needs of its LGBTQ members and determine which areas are most underserved.</p><p>“We have specialized lending for adoption, weddings, surgery [and really] anything particular to the LGBTQ+ community … We work closely with our local pride organization, Rainbow Pride of West Virginia, to identify our community needs,” Bodie said.</p><p>Element is planning to further its commitment to aiding local members through collaborative housing and employment partnerships with local realtors, pride organizations and other groups to address instances of discrimination during the search for a home.</p><p>In addition to her 24-year tenure as Element’s CEO, Bodie helped to organize and launch the LGBTQ credit union support association<a href="https://www.americanbanker.com/creditunions/news/no-longer-invisible-the-rise-of-cu-pride" target="_blank"> CU Pride</a> in June 2020, which now has more than 1,200 members nationwide and is dedicated to progressing inclusivity within the industry and offering educational toolkits and opportunities for collaboration.</p><p>“With our tenets, which is to create educational opportunities for the credit union system … It gives them the opportunity to understand the community and really push towards our mission, which is to get the entire industry to embrace the LGBTQ+,” said Zach Christensen, co-founder of CU Pride and director of diversity, equity and inclusion and communications at Mitchell Stankovic. </p><p>“Organizationally, credit unions are not queer or LGBTQ, but credit unions can be organizational allies,” through better education, he said. </p><p>A Pew Research Center survey of 10,188 U.S. adults in May found that 5.1% of those under 30 reported they identify as transgender or nonbinary, with the share of adults knowing someone who is either transgender or nonbinary growing to 44% in 2022 from 37% in 2017.</p><p>Experts from trade organizations such as the National Association of Federally-Insured Credit Unions and the Credit Union National Association say that institutions need to closely analyze research and feedback from the data gathered or otherwise risk new programs becoming ineffectual.</p><p>“One of the things that we’re doing is becoming more intentional about this work and about listening to our communities,” said Samira Salem, vice president of diversity, equity and inclusion for CUNA, which is a supporting organization of CU Pride.</p><p>Better serving LGBTQ communities means developing products and services specific to their needs, Salem said. “It is in the DNA of credit unions to serve the underserved [and] the marginalized, and it is our value system.”</p><p>But beyond ensuring the success of the new services, credit unions aiming to stand as allies of those belonging to the LGBTQ community must also ensure that their efforts go beyond marketing campaigns and lead to change within the organizations as well.</p><p>“It’s not just about marketing and sort of this outward-facing messaging about what you are as an organization [and] what you stand for; you have to put your money where your mouth is, so to speak … and demonstrate that you have diversity, for example, on your board of directors and within your management,” said Ann Petros (formerly Kossachev), who works as the vice president of regulatory affairs for NAFCU.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-33660043345568094882022-05-27T10:08:00.002-04:002022-05-27T10:08:22.561-04:00Offer Your Members More<p> Credit unions nationwide can now give their members free access to thousands of discounts and special savings with CU Offers. The <a href="http://www.cuoffers.com" target="_blank">CU Offers</a> website and app were founded by 3 leagues in New England to help credit unions build member loyalty, save members money, and support local businesses.</p><p> CU Offers is an easy-to-use, free app that delivers thousands of exclusive discounts and perks to members, right at their fingertips—with no additional costs to your credit union to participate. A free Marketing Toolkit is available to all credit unions at <a href="http://www.cuoffers.com/creditunions">www.cuoffers.com/creditunions</a>.<br /></p><p> <b>Key Savings Available:</b></p><p></p><ul style="text-align: left;"><li>Dining discounts at local favorites and national chains</li><li>Exclusive access to travel savings on hotels, car rentals, and flights</li><li>Special savings of up to 30% from Dell, plus an extra 10% coupon on accessories</li><li>Discounts on theme park tickets</li><li>Prescription medication savings – available to those with or without insurance</li><li>And much more!</li></ul><p></p><p><b>Engage With Your Local Business Community</b></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQsNlXQLraTT9ljWruhkZmfi5ORo07jwjDUJc38PK0f3ISG84KmEwcOKRvRU1WbK6rNhJ8gdBnoR_3eLc4aqnSa7x8pXZj6NJT-MqOB9wl2KRty5Ai6B63pkJGDQ-4az2WThiahT5cuPNKYhaKfO3dpLXxcoXgaZ79gxL2PTpz9ZoWafgeP5DmqYqjkA/s1024/member-benefits.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="380" data-original-width="1024" height="119" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQsNlXQLraTT9ljWruhkZmfi5ORo07jwjDUJc38PK0f3ISG84KmEwcOKRvRU1WbK6rNhJ8gdBnoR_3eLc4aqnSa7x8pXZj6NJT-MqOB9wl2KRty5Ai6B63pkJGDQ-4az2WThiahT5cuPNKYhaKfO3dpLXxcoXgaZ79gxL2PTpz9ZoWafgeP5DmqYqjkA/s320/member-benefits.jpg" width="320" /></a></div>A unique benefit of CU Offers enables credit unions to support their local small businesses and allows for deeper engagement with new and existing SEGs. Any retail provider of goods and services can add their discounts to CU Offers at no cost. Be the star at your next chamber of commerce event with CU Offers. Merchant deals can be added by visiting <a href="http://www.cuoffers.com/merchants">www.cuoffers.com/merchants</a>.<p></p><p> <b>Learn More June 29th, 1:00-2:00 p.m. EST</b></p><p>Credit unions are invited to attend a free informational webinar to learn how they can drive member loyalty and increase member benefits with CU Offers. <a href="https://us06web.zoom.us/meeting/register/tZUrcO-oqTkqHdJdn0k2stxGGFaBqgyW45b4" target="_blank">Register for the webinar here</a>. Attendees will also hear from one of CU Offers’ discount partners – <a href="https://www.gentreo.com/cu-offers" target="_blank">Gentreo</a>. With Gentreo, members get a full suite of Estate Planning documents, education, and secure document storage available with a CU Offers discount.</p><p><b>Try CU Offers for yourself.</b> Joining is easy and free, just go to <a href="http://www.cuoffers.com">www.cuoffers.com</a> and start saving today with travel, <a href="https://www.dell.com/en-us/member/lp/cuoffers?link_number=529997801351&c=us&l=en&s=eep&tfcid=90134132&cid=316360&lid=5993986&dgc=ms" target="_blank">Dell </a>computers, restaurants, theme parks, estate planning, and more. </p><div><br /></div>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-91179140184184103062022-05-27T10:01:00.002-04:002022-05-27T10:01:05.310-04:00Financial inclusion bill could reignite credit union-bank conflict<p> The trend of credit unions buying banks has grabbed a lot of attention in recent years, but two other key issues have raised tensions between the two industries. </p><p>Bankers have long opposed attempts by credit unions to expand their field of membership and their business lending capabilities, but proposed legislation would open the door to both. The bill, H.R. 7003, the Expanding Financial Access for Underserved Communities Act, was approved last week by the House Committee on Financial Services by a 27-22 vote.</p><p>Introduced by the committee’s chair, Maxine Waters, D-Calif., the bill would allow all federal credit unions to apply to the National Credit Union Administration to expand their field of membership to include underserved communities, including those without a branch within 10 miles.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim-Eo2wfr_B2dKD1HuvP77V_Qn3qK4nrjVnXxNMo9fIaLke3esjPfXhe2lncyAuQ_s5aS9neNk4CDZu0NkO5xh3C7YKqYY72Zp79m-lR9q9GJDUUqVenZBhdYAd34C09iJsaYAg8JQ2fhpvvo4q7syPun_k4gIBEg9ZUkabUGP41efeokqZBVS9exT8g/s390/financial-inclusion-shown-on-business-260nw-2011884893.webp" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="280" data-original-width="390" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim-Eo2wfr_B2dKD1HuvP77V_Qn3qK4nrjVnXxNMo9fIaLke3esjPfXhe2lncyAuQ_s5aS9neNk4CDZu0NkO5xh3C7YKqYY72Zp79m-lR9q9GJDUUqVenZBhdYAd34C09iJsaYAg8JQ2fhpvvo4q7syPun_k4gIBEg9ZUkabUGP41efeokqZBVS9exT8g/s320/financial-inclusion-shown-on-business-260nw-2011884893.webp" width="320" /></a></div><p></p><p>It would also exempt loans made by credit unions to businesses in those areas from the credit union member business lending cap. Under current law, credit unions are restricted from lending more than 12.25% of total assets to member businesses.</p><p>According to the Credit Union National Association, the bill’s member business lending exemption would apply to 2,207 federally insured credit unions that are not already exempt due other designations. </p><p>CUNA also points out that there are no provisions in the bill restricting banks from opening operations in those underserved areas.</p><p>Still, the bankers are not amused.</p><p>In a <a href="https://www.aba.com/advocacy/policy-analysis/aba-and-sba-letter-to-hfsc-opposition-to-hr-7003" target="_blank">letter </a>to the House Financial Services Committee, the American Bankers Association said the legislation will not deliver on the “purported” objective of improving banking access to underserved communities but instead expand taxpayer subsidies of business lending.</p><p>According to the NCUA, commercial loans made by credit unions increased $17.3 billion, or 18.4%, to $111.7 billion in the fourth quarter of 2021 from a year earlier.</p><p>“What H.R. 7003 seems to provide is the ability for credit unions to expand out-of-market, which contradicts the credit union purpose of serving well-defined local communities and small groups of consumers of modest means,” the letter states. “The legislation also creates a major new loophole in the credit union business lending cap, long one of the most controversial issues in financial services. Bankers remain staunchly opposed to efforts to gut this limitation.”</p><p>But credit unions see the proposal primarily as a way to fill a gaping void.</p><p>The proposed changes are essential to increasing access to “safe, fair and affordable” financial services in rural communities, communities of color and other underserved places, said Todd Harper, chairman of the NCUA, in a press release.</p><p>“They would also advance financial inclusion within our nation’s financial system,” he said.</p><p>CUNA said the bill would give communities, small businesses and individuals who have lost access to affordable financial services — or perhaps have never had them — easier access to federal credit unions.</p><p>According to CUNA research, more than 750 census tracts in the U.S. are financial deserts, and a net 7,800+ bank branches closed between January 2005 and March 2021. During the same period, more than 1,400 net credit union branches opened.</p><p>But the business lending component is the key to the legislation, said Patrick Keefe, a credit union industry observer, former industry advocate and editor of the Regulatory Report.</p><p>Any relief from the 12.25% cap would be a big win for credit unions, he said.</p><p>“That’s potentially a big shift for credit unions, who are looking for new revenue sources whenever possible,” he said. “The exemption means they could start making more MBLs without constriction.”</p><p>Jason Stverak, CUNA’s deputy chief advocacy officer for federal government affairs, said the trade group is working with lawmakers on both sides of the aisle to build consensus around the legislation. </p><p>“Whether the policy advances on its own or along with other legislation is up to House lawmakers, but we’re optimistic we’ll see movement this Congress,” Stverak said.</p><p>But according to Keefe, the outlook for the legislation is "challenging, to say the least,” he said. The bill faces a big uphill climb and will likely have to be brought up again in the next Congress.</p><p>He pointed to CUNA’s own <a href="https://news.cuna.org/articles/120979-fom-modernization-bill-is-free-market-solution-to-address-financial-access" target="_blank">letter </a>to the House committee members in which CUNA said the only known opposition to the legislation comes from the banking industry, “and their opposition to this legislation reveals their true colors: first, they abandon underserved communities and then they try to keep credit unions out,” the letter states.</p><p>“Yeah, that’s all: just opposition from the banking industry. No big deal,” Keefe joked. “Except, it is. Banks clearly see this as an expansion of credit union powers — providing more services to people who aren’t now eligible for membership — and credit union commercial lending, which banks are out to impede, vigorously.”</p><p>It will take a pretty big push by the credit unions to get the legislation enacted, according to Keefe, and he is not convinced that most credit unions really care about more business lending authority. “Even though they probably should,” he said.</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-60040696279386652512022-05-10T16:43:00.004-04:002022-05-10T16:43:55.077-04:00Introverted Workers Say WFH Was Good for Productivity, Want to Stay There<p> Odds are you are reading this from your home office or from your couch with your tablet in hand. That’s because new data from Poly, an audio/video technology company, shows that 63% of employees are still resisting returning to an office.</p><p>The company surveyed 5,000 U.S. employees and found that a strong majority (72%) of employees agree that their employers can do a better job to create a uniform experience between people who work at home and those that are returning to the office.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhulgvuBkA0gEXhiPjDc341-nJ1M1MtvDcQZoOeoP0RY_gc-YmcC2q_k03QE5s2Gs07i1ph-y4kmUvsYqA4Jr7MpcrdNCclDXuZZeludK-4r67auHupJGDmOSQUexxbQoMrCkJ-bq_TlupxwcpGTTPvtxptge8dwKF_6UWErYu4GvnEW0MBmDHS0TEuZg/s1500/2.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="900" data-original-width="1500" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhulgvuBkA0gEXhiPjDc341-nJ1M1MtvDcQZoOeoP0RY_gc-YmcC2q_k03QE5s2Gs07i1ph-y4kmUvsYqA4Jr7MpcrdNCclDXuZZeludK-4r67auHupJGDmOSQUexxbQoMrCkJ-bq_TlupxwcpGTTPvtxptge8dwKF_6UWErYu4GvnEW0MBmDHS0TEuZg/s320/2.jpg" width="320" /></a></div><p></p><p>“Our research indicates that hybrid work is here to stay,” said Dave Shull President and CEO, Poly. “Organizations will need to adapt and upgrade their office gear, to include video-enabled meeting rooms with technology that’s as easy to use as the devices we have all come to know and love while working from home.”</p><p><b>Other findings show:</b></p><p>The majority (65%) of employers are pushing for a return to the office despite the benefits workers cite in remote and hybrid working 71% agree that working from home suits their personality type better, and the same percentage agree that working from home has positively impacted their performance</p><p>41% of workers say their work equipment is better at home than in the office (35%)</p><p>Despite these benefits, over half (57%) of workers agree they have felt pressure from their manager or company to return to the office</p><p>Those wanting to return to the office also depends on worker personality traits, the study finds. For example, employees who consider themselves more introverted are almost twice as likely to say hybrid or remote work is better suited to them (48% vs. 25%) compared to working in the office.</p><p>Introverted workers also feel their productivity has increased since the pandemic (64%), compared to extroverted workers (51%). This can be attributed to a better work-life balance (38%), and remote work increasing their confidence (35%).</p><p>Those employees who consider themselves more extroverted are also more likely to say hybrid or remote work is better suited to them than working full time in the office (41% vs. 30%).</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0tag:blogger.com,1999:blog-7416517066809602582.post-48746648251644273282022-05-09T13:04:00.001-04:002022-05-09T13:04:06.218-04:00Higher interest, rising prices, fewer listings: A bad mix for mortgages<p> Rising interest rates and elevated prices have caused sales of new homes to drop, tightening the mortgage market for banks and credit unions.</p><p>In addition, pandemic-related supply-chain problems put a strain on the supply of lumber and other building materials over the past two years, making it more difficult to put new inventory on the market. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNbNiD800HjCFlgO2ki2gvIwvF1kZMR5sxMiGIiWr7Oi2nVwOcA3Y6F-OtwR1DKxzkcjyEquHVutI01Q-0YLDEVCpwdc5Rf-8vHS6xlOfI9VkuMzcVk5b9HR3YrAyO7CI4OiuDh5cIlvc7dF_ivwM3qovZQC8v7C_5A3hqp5WU32JrdBphsXzeWxGFLg/s959/960x0.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="639" data-original-width="959" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNbNiD800HjCFlgO2ki2gvIwvF1kZMR5sxMiGIiWr7Oi2nVwOcA3Y6F-OtwR1DKxzkcjyEquHVutI01Q-0YLDEVCpwdc5Rf-8vHS6xlOfI9VkuMzcVk5b9HR3YrAyO7CI4OiuDh5cIlvc7dF_ivwM3qovZQC8v7C_5A3hqp5WU32JrdBphsXzeWxGFLg/s320/960x0.jpg" width="320" /></a></div><p></p><p>Those factors pushed housing prices to new highs in several major markets. Home prices rose 2.2% in February from January and 20% year over year, according to the CoreLogic Home Price Index. </p><p>Many new homebuyers were forced to the sidelines as a result. Home sales in March were 12.6% lower than last year.</p><p>“While the spike in interest rates is undoubtedly having some impact, construction delays appear to be the main culprit,” Curt Long, chief economist and vice president of research for the National Association of Federally-Insured Credit Unions, said in a press release.</p><p>As interest rates have risen in response to inflation, refinancing activity is drying up. Freddie Mac said the 30-year fixed-rate mortgage averaged 5.27% for the weekly period that ended May 5, up sharply from 2.96% a year earlier and the highest it's been since 2009. The higher rates have begun to curb demand for home purchases, too.</p><p>The $1.9 billion-asset Hanscom Federal Credit Union in Massachusetts was one of many midsized lenders across the U.S. that saw first mortgages dip from the end of 2020 to the end of last year. </p><p>Hanscom’s president and CEO, Peter Rice, said lenders who took high-risk applicants and lowered credit qualification standards probably should be worried entering this market of rapid interest rate increases. </p><p>“We’ve seen this play out time and time again,” he said.</p><p>Rice said that despite lower home inventory, he expects Hanscom’s first-mortgage portfolio to remain steady, although he said a “dramatic” industrywide slowdown is certain.</p><p>“I’d be very worried about mortgage brokers who, due to the record refinance numbers, have become dependent on that market,” he said. “The interest rate increase will surely bring their business — and business model — to a screeching halt.”</p><p>The slowing of the refinance business is expected to result in a 30% year-over-year drop in mortgage originations for the $7.2 billion-asset Wright-Patt Credit Union in Beavercreek, Ohio. </p><p>Eric Bugger, Wright-Patt’s chief lending officer, said the credit union has a team of about 45 employees in its mortgage originations area and the credit union is seeing some competitors do “crazy things” with interest rates, causing Wright-Patt to lose some loans. </p><p>“That always happens, though,” Bugger said. “We’re combating that by keeping a close eye on market rates and trying to come up with new products that fit our members’ needs. We can’t always have the lowest rate. Someone can always undercut us.”</p><p>Banks, too, are warning of a sharp slowdown in mortgage activity as interest rates climb and housing supply shrinks.</p><p>Megabanks such as Wells Fargo and JPMorgan Chase reported lower mortgage volumes in the first quarter. Regional banks such as Truist Financial and Citizens Financial Group delivered similar results to investors for the quarter. </p><p>“The mortgage origination market experienced one of its largest quarterly declines that I can remember,” Charlie Scharf, Wells Fargo's president and CEO, said on the company’s earnings call last month. Rising interest rates will likely have further “negative impact on mortgage volumes," he said. The $1.9 trillion-asset bank confirmed last month it was laying off a number of home lending employees due to current market conditions. </p><p>Bugger said the key will be having a balanced loan portfolio and in some cases steering members toward a purchase with a payment they can afford. Otherwise, customers may need to wait a little longer to increase their down payment so the monthly outlay can remain manageable. </p><p>But many potential buyers are taking a wait-and-see approach.</p><p>“The combination of swift home-price growth and the fastest mortgage-rate increase in over 40 years is finally affecting purchase demand,” said Sam Khater, Freddie Mac’s chief economist. </p><p>For the week that ended April 29, home purchase loan application volume increased 2.5% from the prior week but was 50% lower compared with a year earlier, according to the Mortgage Bankers Association. Its refinance index inched up 0.2% from the prior week after falling for seven straight weeks. </p><p>“The drop in purchase applications was evident across all loan types. Prospective homebuyers have pulled back this spring, as they continue to face limited options of homes for sale along with higher costs from increasing mortgage rates and prices,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “The recent decrease in purchase applications is an indication of potential weakness in home sales in the coming months.” </p><p>Community banks that developed mortgage operations to generate fees on originations and diversify revenue also are warning about the specter of a sustained slowdown. </p><p>The $12.7 billion-asset FB Financial Corp. in Nashville, Tennessee, reported a first-quarter loss for its mortgage division. </p><p>“A confluence of events has created a challenging operating environment in the mortgage industry,” FB President and CEO Christopher T. Holmes said on an earnings call last month.</p><p>“We do expect continued tough sledding for mortgage,” he added. “We're reducing our mortgage origination capacity and the corresponding size of our operational functions to operate through the current forecasted down environment.”</p>AVCUhttp://www.blogger.com/profile/16067072696165747951noreply@blogger.com0