Fed Report: CUs Slip on Autos, Gain on Credit Cards Posted by AVCU on 9:26 AM

Credit unions appeared to be falling further behind other automobile lenders in December, while still gaining slightly with credit cards, according to a Fed report released late last week.

The Fed’s G-19 Consumer Credit Report showed all lenders held $1.19 trillion in car loans in December 2019, up 3.5% from a year earlier.

The report did not include balances by lender type; estimates for banks and credit unions from other sources are not yet available for December.

However, CUNA Mutual Group showed credit union auto loan growth has been consistently slowing in recent months, and November 2019 balances were only 2.7% higher than in November 2018.

The 10 largest credit unions, which tend to perform better than smaller ones, did increase their auto loan portfolios faster than the five largest bank lenders at year’s end, according to NCUA Call Report data released in the past 10 days.

The Top 10 credit unions held to $43.7 billion in auto loans as of Dec. 31, up 3.6%. New cars loans fell 0.4% to $19.9 billion, while used car loans grew 7.3% to $23.8 billion.

The five corporate lenders held $301.3 billion in auto loans as of Dec. 31 — 2.5% higher than a year earlier. The five — Ally Financial, Capital One, Wells Fargo, JPMorgan Chase and Bank of America — hold about a quarter of the nation’s auto loans.

CUNA Mutual Group estimated credit unions held $380.3 billion in automobile loans in November. That amount represents 32% of total auto loans estimated by the Fed. That share is down from 32.1% in September 2018, 32.3% in December 2018 and 32.2% in June 2019.

The Fed’s G-19 report consists of two parts.

The first part is revolving debt, or credit cards, which rose 4.2% over 12 months to reach $1.1 trillion as of Dec. 31 among all lenders, and non-revolving debt, which includes auto loans, government and private student loans, and other term loans excluding real estate.

The second part is non-revolving consumer loans, which rose 4.8% to $3.1 trillion as of Dec. 31 among all lenders, with automobile loans represented 38.5% of non-revolving loans, down from 39% in December 2018.

Student loans rose 4.7% to $1.64 trillion, and 53% of non-revolving loans in December 2019, compared with 53.1% a year earlier. Data on student loans and motor vehicle loans are reported quarterly for all lenders.

Credit unions held $414.7 billion in non-revolving consumer loans in December 2019, up 2% from a year earlier, and they continued to gain a slightly larger share of credit card debt in December.

Credit unions held $67.8 billion in credit card debt in December, up 8.3% from a year earlier and representing 6.2% of the debt held by all lenders. Their share was up from 6.1% in November 2019 and 5.9% in December 2018.

Banks held $988.1 billion in credit card debt, up 4.4% from a year earlier. Their share was 90% in December 2019, compared with 89.9% in November 2019 and December 2018.

Vehicle Sales Overcome Hurdles for January Rise Posted by AVCU on 8:42 AM

Total vehicle sales increased to a rate of 16.8 million annualized units in January – up 0.8 percent from last year.  Of note, strong light truck sales beat expectations and offset a decrease in car sales.

"Total unit sales have remained remarkably stable since 2015, but a shift from autos to light trucks over that time has resulted in a large increase in average prices," said NAFCU Chief Economist and Vice President of Research Curt Long in a new Macro Data Flash report.

"The National Automobile Dealers Association projects that this trend will continue in 2020, with light trucks accounting for 75 percent of all light vehicle sales by the end of the year. NAFCU expects vehicle sales to remain stable through 2020 at just below 17 million units," Long added.

Car sales decreased 6.2 percent to 4.2 million annualized units during the month. Meanwhile, sales of light trucks increased from 12.2 million annualized units to 12.6 million annualized units.

Economic Trends Report from CUNA Mutual Posted by AVCU on 12:19 PM

CUNA Mutual has released it January 202 Credit Union Trends Report (based on 11/19 data). The report providse a review and analysis of recent credit union financial performance and operational results in the context of recent economic activity. Data and analysis are provided to establish standards against which credit unions' own performance can be compared. The Credit Union Trends Report is a monthly "pulse check" on the state of the credit union marketplace, often placed in a historical context. The report includes data from two months prior and is published and distributed by Steven Rick from CUNA Mutual Group.

Highlights of the January 2020 report:

• Over the last 12 months, total credit union loan balances rose only 6.2%, below the 7.9% long-run average.
• Credit union new-auto loan balances fell at a -3.4% seasonally adjusted annual rate in November, significantly below the double digit pace set during 2012-2018.
• Credit union capital balances grew 11.3% in the year ending in November, significantly above the 7% average set over the last 20 years.

View the trends report in PDF format online.

Holiday Anti-Fraud Tips for Credit Unions Posted by AVCU on 10:41 AM

As reported recently by Credit Union Times, Chicago-based OneSpan, provider of anti-fraud and digital identity solutions to financial institutions, offered some holiday protection tips and six predictions they suggest will shape the 2020 financial services industry.

“Fraudsters don’t take time off for the holidays and in fact, may capitalize on seasonal spikes in transaction volume to more easily evade detection. As consumers increasingly use their mobile phones as their primary device for holiday shopping, banking and other transactions, cybercriminals are also turning their attention to the mobile channel,” Will LaSala, director of security solutions at OneSpan, said.

LaSala pointed out, “Mobile malware nearly doubled in 2018 and mobile account takeovers increased 79%. It’s estimated fraud losses to banks and credit unions have topped $31 billion due to customer account takeover, new account application fraud and other types of fraud occurring in digital channels.” He recommended employing mobile app security as the key to fighting fraud not only this holiday season, but all year long.

The cybersecurity director provided some measures credit unions can implement immediately to safeguard member data, meet compliance with industry regulations and avoid becoming another data breach headline:

• As transaction volumes increase fraudsters will use this spike to try and scam transactions and call centers. Let members know your brand will never ask them for their credentials via email, text or chat.
• Remind staff that security standards do not need to slip. Even though transaction volumes will be higher, pay attention to those out of the ordinary requests and do not cut any corners. Stick to the processes and procedures defined throughout the entire year.
• Mobile banking apps should protect themselves in untrusted device environments. defend any type of mobile app against sophisticated malware, they should use application shielding technology as protection.

Click here to read the full article.

As Subprime Dents Auto Loan Quality, CUs Should Look at Risk Exposure Posted by AVCU on 10:05 AM

Subprime lenders are generating rising automobile delinquencies, but credit unions might suffer collateral damage warned internationally acclaimed economist and public speaker Elliot Eisenberg in a recent webinar sponsored by Association business partner CU Direct. The economist added that altough the chances of a recession are low, lenders nonetheless should prepare for one, including looking at their exposure to areas with rising risk, especially auto lending.

The value of automobile loans delinquent at least 90 days peaked at just over 5% in 2010 in the wake of the Great Recession, and fell to a low near 3% by 2015. Since then, the rate of serious delinquency has slowly crept back up nearly 5% again, according to the New York Fed.

“The amount of delinquent loans in autos is approaching the all-time high,” Eisenberg said. “The whole situation is going to continue to deteriorate depending on how fast auto loans continue to go bad,” adding “if the economy gets meaningfully worse, those default rates are going to go up considerably.”

During the Great Recession, the total value of serious delinquencies was dominated by home lending as the housing bubble burst and foreclosures soared. Those amounts have subsided to pre-recession levels, leaving the biggest amounts of serious delinquencies with student loans followed by credit cards and auto loans.

Most student debt is held by the federal government, but its level is holding back young people from borrowing for homes and cars. The rate of credit cards in serious delinquency is also rising, but the increase is slower and the rate is still below the pre-recession rates of the early and mid-2000s. Total delinquency rates remain low for car loans at credit unions.

NCUA data shows auto loan balances that were at least 60 days delinquent Sept. 30 were $2.2 billion, or 0.58% of total auto loans, up 2 basis points from a year earlier. The delinquency rate was flat at 0.39% for new cars, and down 4 bps to 0.71% for used cars. Over the past three years, car loan delinquency rates have ranged from 0.53% to 0.72% based on rolling 12-month averages.

Among all lenders, Experian estimates that 0.75% of auto loan balances were 60 days or more delinquent as of Sept. 30, up from 0.73% a year earlier. The increase was up almost entirely among finance companies, which tend to cater to subprime borrowers.

• Credit unions’ 60-day delinquency rate stood at 0.23% Sept. 30, down from 0.24% a year earlier.
• Banks’ 60-day delinquency rate was 0.66% Sept. 30, up from 0.65% a year earlier.
• Finance companies, however, had an 1.85% delinquency rate Sept. 30, up from 1.76% a year earlier.

Finance companies accounted for 8.5% of all car loans originated in the third quarter, down from 10.5% a year earlier, according to Experian. Nonprime, subprime and deep subprime accounted fo 38.3% of all loans and leases originated in the third quarter, according to Experian.
Eisenberg said reasons for rising auto loan defaults include:

• Rising payments. Not only are prices rising, but borrowers are also taking on bigger loans to get bigger vehicles. “We drive SUVs; we drive crossovers. You don’t see many four-door sedans anymore.”
• Lengthening terms. Experian shows that 32.2% of new car and 19% of used car loans carried terms over 72 months.
• Sinking equity. Drivers trading an old car with negative equity to buy a new car has risen from 25% in 2013 to 33% this year, according to Edmunds.

“That’s a lot of cars being bought on time with upside-down buyers,” he said, adding that even lenders without subprime loans could be hurt because the used market can be flooded with repossessed vehicles sold at discounts that lower residual values.

The CUInsight Experience Podcast: George Ombado – Rising up Posted by AVCU on 9:42 AM

This new episode of the CUInsight Experience Podcast with host Randy Smith, co-founder of CUInsight.com, features George Ombado, CEO of ACCOSCA, a Pan-African confederation of national associations of savings and credit cooperatives societies. The podcast was recorded at the 20th Annual SACCA Congress in Mombasa, Kenya.

ACCOSCA has developed programs aimed at improving socio-economic needs of Africa through saving and credit unions, partnering with various government bodies, development agencies and research institutions to contribute towards mitigating challenges facing Africa in the twenty-first century.

Listen to this conversation about credit union growth in Africa, and the differences to the more mature U.S. credit union system. George talks about how he’s fashioned the Africa Development Education program after attending DE in North Carolina and shares a great story about Bill and Crissy Cheney helping him get home after his flight was canceled due to snow.

George is inspired to see that young people and women are being accepted by the leadership today because these things wouldn’t have been possible ten years ago. He is working to build the regulatory framework in Africa because it builds confidence to have it, whereas, in the U.S, we are trying to get rid of some of it.
 
George has excellent insight into today's global credit union movement.

<< CLICK HERE to listen to the podcast>>

UK Financial Institutions are Increasing Use of Machine Learning Posted by AVCU on 9:39 AM

Machine learning (ML) is being used with increasing frequency by financial institutions in the U.K., according to a joint report from the Bank of England (BoE) and Financial Conduct Authority (FCA).

The report summarizes the results of a survey conducted by the Bank of England and Financial Conduct Authority involving 106 respondents from a group of almost 300 banks, credit brokers, e-money institutions, financial market infrastructure firms, investment managers, insurers, non-bank lenders and principal trading firms. It reflects the BoE and FCA’s intention to better understand the interaction between an increasingly data-driven economy and dramatic changes to the structure and nature of the financial system supporting it.

In particular, the report emphasizes the need to strike a balance between supporting development of innovative and transformative technology while also addressing the risks posed by such developments to consumers and the U.K. financial system as a whole, according to Ropes & Gray.

Key findings of the report include:

• Firms in the financial services sector are using machine learning (ML) with increasing frequency. Two-thirds of respondents reported using ML in some form, with most firms expecting usage to increase significantly in the coming years. 
• The insurance and banking sectors use ML most extensively. Overall, ML is deployed most often in relation to anti-money laundering and fraud detection, as well as in customer-facing applications such as customer services and marketing, according to the report. 
• Firms consider improvements in AML, fraud detection and overall efficiency as the biggest benefits of using ML. They identified risks, including a lack of explainability, inadequate controls or governance, data quality issues and poor model performance. To mitigate those risks, firms implement alert systems and so-called “human-in-the-loop” mechanisms to flag when the ML model is not working as intended. 
• The report found firms do not consider regulation to be an unjustified barrier to ML deployment, but some believe there should be additional guidance to clarify existing regulations. Respondents noted that, because ML is a relatively new technology, it may not always be obvious how the existing regulatory framework applies to it. 
• Firms do not believe that ML necessarily creates new risks, but it could amplify existing ones. Respondents recognized that governance and controls processes will need to keep pace with technological development to appropriately manage those risks, the report states. 
• Although most firms reported using their existing risk management frameworks to address risks posed by ML, they noted that these frameworks might have to evolve as ML becomes increasingly mature and sophisticated.

Bank Charters - Variety is Spice of Life Posted by Association of Vermont Credit Unions on 11:07 AM

Credit unions may be state or federally chartered, but chartering a bank has a lot more options.

A blog post by Robert Klingler of Bryan, Cave, Leighton and Paisner Law Firm addresses 5 primary options for chartering a bank.  The author says there are strong, die-hard advocates for the superiority of one over the other, but all are functionally similar.

Looking at the breakdown of charters as of the beginning of 2019, while the majority of all U.S. banks are state, non-member banks (i.e. with primary federal supervision by the FDIC), each charter choice appears to continue to have its advocates.

The Office of the Comptroller of the Currency, the primary federal prudential regulator for national banks, has earned a reputation as the regulator of the largest banks, but the underlying data doesn’t necessarily support that viewpoint. While all of the four largest U.S. banks are national banks, in all asset classifications, there remains a variety of bank charter, showing that no one charter type is necessarily better based purely on asset size.

While national banks represent a plurality of the largest depository institutions (and thus the OCC is the most likely regulator of the largest banks), given the overall landscape of the U.S. banking industry in which smaller institutions absolutely dominate the number of institutions, each of the federal regulators predominantly regulates smaller institutions.

Thus while the OCC may be the most likely to have dealt with an issue for one of the largest banks in the United States, the majority of banks supervised by the OCC are less than $500 million in assets (with over 80% having less than $1 billion in assets).

What About Vermont?

There are only 6 banks chartered in Vermont:

• Brattleboro Savings & Loan
• Northfield Savings Bank
• Passumpsic Savings Bank
• Peoples Trust Company of St. Albans
• Union Bank
• Wells River Savings 

Another 6 are domiciled in Vermont bu have national charters:

• Bank of Bennington
• Community National
• Mascoma
• First National Bank of Orwell
• Ledyard National
• National Bank of Middlebury

And, another 9 out-of-state banks have one or more branches in Vermont:

• Bar Harbor
• Berkshire
• Community
• KeyBank
• NBT
• People's United
• RBS Citizens
• TD
• Trustco

Finally, Vermont has 13 state-chartered and 6 federally-chartered credit unions domiciled in the state with one or more locations each. 

BankSafe Training Saves Consumer & FIs Nearly $1m Posted by Association of Vermont Credit Unions on 4:42 PM

The BankSafe training piloted by Vermont credit unions in 2018 saved consumers and financial institutions almost $1 million in preventing financial exploitation before the money leaves their account.

Vermont was among a handful of states where financial institutions were invited to pilot AARP's BankSafe training program for frontline staff.  The program aims to give bank and credit union employees the knowledge, skills and confidence they need to: better understand as well as empathize and interact with older consumers in an exploitation situation; recognize their responsibility to identify signs of financial exploitation; and take the right steps to protect assets. The program empowers financial institution employees with the ability to identify signs of exploitation of older Americans.

AARP collaborated with CUNA to officially launch the BankSafe program nationwide in May of 2019.

AARP just released a study conducted on the impact of training financial professionals to prevent financial exploitation. The study was conducted by the AARP Public Policy Institute in conjunction with the Virginia Tech Center for Gerontology and examined 1,816 individuals who have completed the entire BankSafe training. It showed:

• BankSafe training saved consumers and financial institutions almost $1 million in preventing financial exploitation before the money leaves the account;
• Participants saved 16 times more than those in the control group who did not take the BankSafe training;
• The intervention group saved an average of $865 per trained participant versus $70 per participant in the control group;
• The intervention group reported suspected cases of exploitation at a rate four times higher than the control group;
• Increase in staff confidence was four times greater for the intervention group compared with the control group; and
• The intervention group had a 133% increase in knowledge scores.

Read the full study results online.

Watch CUNA's BankSafe explanatory video below.

61% w/Credit Card Debt Willing to Go Deeper For Holidays Posted by Association of Vermont Credit Unions on 3:11 PM

The holidays bring out the best and worst in people, and always tend to make consumers go into debt.

In October, CreditCards.com commissioned YouGov Plc to conduct a survey of 2,600 adults, including 2,143 credit card holders. Fieldwork was undertaken Oct. 2-4, 2019. The survey was carried out online.

Results of the survey show that 61% of those who carry a card balance are willing to add to their deficit this holiday season, compared to 30% of cardholders who do not currently have credit card debt.  And more than half (52%) of millennials surveyed said they are willing to add to their debt, as opposed to 49% of Gen Xers and 34% of baby boomers.

Check out these other notable results from the holiday debt poll:

• Those in debt are more willing to add to it. More than half of credit card debtors (51%) said they think the holidays are a valid reason to add to their debt, but only a small percentage of those with no debt agreed (26%);
• Kids matter. When it comes to the holidays children are the stars—almost two-thirds of parents (65%) with kids under 18 said they would be fine with adding to their card debt during the season and more than half (56%) responded that they felt it was fine to do so;
• Genders differ. Men with credit cards are more willing to take on holiday card debt than women (50% versus 41%);
• The right reasons? Among cardholders who are willing to take on credit card debt this holiday season, almost half (46%) said it was to please a family member or friend and a large percentage (42%) said it was to make themselves happy. Thirty-eight percent said it was to please their children and another 38% said it was to make their partners happy; and
• The big payoff. Those surveyed shared their plans to pay off that holiday debt: More than half (57%) said they would pay more than the minimum each month, some planned to cut expenses (38%), others (21%) said they were planning to get a balance transfer card, a few (18%) said they planned to get a side gig, such as freelancing, selling on Etsy, or driving for Uber, and even fewer (16%) reported they intended to sell unneeded possessions.

The fact that more than 60% of credit card debtors are willing to go into further debt is a testament to the natural social pressure to get gifts for those you genuinely care about. The fact that 52% of millennials don’t mind going further into debt points toward not having a fundamental understanding of the consequences.

Older consumers are somewhat less likely to make these financial mistakes because they have experienced the consequences.

Men are probably more willing to go into debt over holiday spending than women because they want to feel as though they have provided for their loved ones.

Free AVCU Partner Webinars in November! Posted by Association of Vermont Credit Unions on 1:29 PM

Through AVCU's business partnership with CUNA Strategic Services we're providing a number of free and varied webinars this month. Check out the following:

11/18/19 - 2019 Video Banking Best Practices

Join Popi/o's webinar, where you'll learn how you can best setup and deploy your video banking solution to your membership from their video banking experts. Learn helpful tips from how to plan a video banking project to training your video banking agents to growing this channel within your credit union.
REGISTER NOW

11/12/19 - Is Your Credit Union Ready For Black Friday?

Consumer online spending during 2018's Black Friday and Cyber Monday topped $14 billion per Abode Analytics, with Cyber Monday sales climbing nearly 20% alone. If your cards aren't the card of choice for the coming holiday shopping spree, you're missing out on significant non-interest income. Join us for this webinar to see how CardUpdatr can help.
REGISTER NOW

11/20/19 - Reduce Losses & Improve Visibility
Join us as we discuss the benefits of consolidating your fraud prevention and management functions with Verafin's Fraud Detection and Management solution. Learn how to reduce losses, strengthen prevention efforts across all channels and departments, and enable a full picture of fraud at your institution to drive strategic decision-making.
REGISTER NOW

11/6/19 - The Who, What & Why of Compliance Based Testing 

As we approach the end of another year, it's a good time for credit unions to test their plans for business continuity and technology recovery and documenting their results. Agility Recovery and Doug Langley, former Continuity Administrator with Georgia's Own Credit Union in Atlanta, will host an interactive webinar to ensure your testing addresses all areas of your business.
REGISTER NOW

More Free Webinars:

• 11/06: Elder Financial Exploitation: Detecting & Reporting
• 11/13: Fraud Detection, BSA/AML Compliance, High-Risk Customer Mgmnt and Info
• 11/14: Demo: CU RateReset Retention, Acquisition and, Recapture Solutions
• 11/27: Deposit Fraud: Mitigate and Manage Losses

TAKE ME TO MORE FREE WEBINARS, WHITEPAPERS & CASE STUDIES >

Kansas CUs Fend Off Statehouse Tax Threat Posted by Association of Vermont Credit Unions on 1:26 PM

According to reporting by CU Journal, earlier this month a Kansas state Senate committee met to SB.238, which would decrease the state income tax on banks, and also SB.239 to tax credit unions over $100 million in assets. Both bills were crafted by the Kansas Bankers Association.

On Tuesday of this week the 11-member committee voted to “not recommend” the credit union tax bill and decided to make “no recommendation” on the bank tax bill. Instead, the Kansas legislature called for more research data on the topic. The Kansas legislature's decision on the credit union taxation bill was a win for the the Heartland CU Association and the entire industry.

The CU association said that banks want a double standard in the form of creating a loophole so they can be taxed like not-for-profits without having to play by the same rules as not-for-profits. In its testimony, the association highlighted economic factors, including that banks control 99% of the commercial market in the Sunflower State.

Credit unions may only account for 1% of the commercial market, says the Association, but that includes small businesses and farmers that banks aren’t willing to take a chance on.  It also argued that Kansas has lost 244 credit union charters in the past five decades, declining from 322 credit unions in 1969 to 78 credit unions today.

The battle in Kansas is the latest banker state-level attempt to impose taxes or restrictions on credit unions. In February, the Nebraska Banking, Commerce and Insurance Committee considered a bill that would have required state regulators to notify banks whenever a CU applied to expand its field of membership. An in 2018, an effort to tax Iowa credit unions ultimately failed, but two credit unions were forced to change their names to comply with legislation that prohibits Iowa credit unions from using the name of state universities in their own name.

Read the original CU Journal article.

Foundation Issues $75K in Grants for Member & Employee Financial Health; Releases First Ever DE Impact Report Posted by AVCU on 3:18 PM

The National Credit Union Foundation (the Foundation) Board of Directors recently approved 8 grants totaling $75,000 to help credit union organizations document and measure the impacts of their products and services on member and employee financial health.

In 2017, the Foundation funded six credit unions to measure the financial health of their members, using the Center for Financial Services Innovation financial health segmentation methodology. The aggregate data showed that more than half (58%) of members in the total credit union sample are struggling financially, highlighting a significant opportunity for credit unions to help their members better spend, save, borrow, and plan.

The purpose of these grants is to help credit unions build upon this work by supporting their initiatives to measure and document these efforts specifically in the Save, Spend, Borrow, and Plan categories.

Foundation Releases First Ever DE Impact Report

The Foundation also announced that it has released the first ever Impact Report for its Credit Union Development Educator (CUDE) program (click to download the PDF) which has been inspiring change through credit unions since 1982.

CUDE is the Foundation's signature program. It is a transformative and experiential training that promotes the education and application of credit union business principles and philosophy.

The mission of the DE Program is to help established and emerging leaders within the credit union movement understand and leverage credit unions’ unique business model to serve members and communities in new and better ways.

11/6: NCUA CU Diversity, Equity & Inclusion Event Posted by AVCU on 4:18 PM

The National Credit Union Administration is promoting a “Credit Union Diversity, Equity, and Inclusion Summit” scheduled on November 6, 2019 in Alexandria, Virginia.  The event is aimed at discussing how to promote those qualities at the agency and the credit unions it regulates. The event will run from 8 AM to 5 PM, Eastern time.

NCUA Board Chair Rodney Hood describes financial inclusion as “the civil rights issue of our time.” And by "inclusion" he means not only broader access to affordable financial services, but also to employment and business opportunities.

Our country is going through a period of profound demographic change, and our financial system should be leading efforts to respond to that change. - NCUA Chair Rodney Hood

All 3 NCUA board members . . . Hood, Mark McWatters and Todd Harper . . . will speak at the Summit, which will also include a panel discussions on best practices for promoting diversity, equity, and inclusion; on recruiting and retaining a diverse workforce; and on collecting diversity data.

More details on the free event and registration are available online.

Out of Network ATM Costs Reach Record High Posted by AVCU on 4:48 PM

As reported this week in CU Times, the average out-of-network ATM withdrawal cost has reached a new record high of $4.72, according to the latest Bankrate.com Checking Account and ATM Fee Study, which surveyed non-interest and interest accounts.

This all-in fee, which includes the ATM surcharge (what ATM owners charge non-customers) as well as the penalty financial institutions charge their own customers to make out-of-network withdrawals is up 33% over the last decade.

Financial institutions are charging non-customers more than ever to use their ATMs. The average ATM surcharge increased 2% to a new record of $3.09, the 15th consecutive year establishing a new record. The average surcharge has increased in 20 of the past 21 years.

The good news, the fee charged by the accountholder’s own financial institution for using another institution’s ATM decreased 2% from $1.66 to $1.63, moving lower for the second year in a row. In fact, the number of financial institution and accounts allowing free out-of-network withdrawals is at a record high, although this still represents less than one-third of accounts (32%).

“While large banks have extensive ATM networks, many smaller banks and credit unions belong to nationwide fee-free alliances that may have significantly more ATMs available than even the ATM networks of big banks,” Greg McBride, CFA, Bankrate.com chief financial analyst said. “One other option to withdraw money for free is to get cash-back at the point of sale when using a debit card. Banks don’t charge for that and very few merchants do either.”

Among the findings:

• Houston has the highest average out-of-network ATM fee of the 25 major metro areas examined ($5.58), while Los Angeles has the lowest ($4.15). Philadelphia has the highest average overdraft fee ($35.50) and Cincinnati has the lowest ($30.95).
  
• Ninety-nine percent of non-interest checking accounts are either free by default or can become free, however less than half (42%) are free without stipulation. Forty-three percent will waive the monthly fee ($5.61, on average) based solely on direct deposit.

CUNA Board: Add Diversity, Equity & Inclusion to Co-op Principles Posted by AVCU on 11:22 AM

Earlier this month the CUNA Board of Directors, led by Brett Martinez, president/CEO of Redwood CU in Santa Rosa, Calif., voted in favor of a resolution to clearly and prominently establish diversity, equity and inclusion as a cooperative principle of America’s credit unions.

“Diversity, equity and inclusion are a part of what credit unions do each and every day. Our cooperative principles have guided us to fulfill our mandate and be a resource to all consumers-no matter their income, race, religion. But we’re committed to doing more,” said CUNA President/CEO Jim Nussle. “In passing this resolution, we’re continuing our work to embrace diversity, equity and inclusion efforts within our organization while we support measures throughout our movement and across all cooperatives.”

The resolution comes after former board chair Maurice Smith, CEO of Local Government FCU, Raleigh, N.C., called for the cooperative principles to include diversity, equity and inclusion. Smith appointed a Diversity and Inclusion Ad Hoc Working Group during his time as CUNA Board chair.

The National Credit Union Administration has posted resources to aid credit unions in assessing and improving diversity in their business practices. The resources include:

• Annual Voluntary Credit Union Diversity Self-Assessment
• Information about the Annual Voluntary Credit Union Diversity Self-Assessment
• Credit Union Guide to Supplier Diversity
• Credit Union Supplier Diversity FAQs

For each of the past two years NCUA has posted results of a nationwide credit union diversity self-assessment survey. The 2018 results area available online. 

Video: August Economic Update Posted by AVCU on 10:56 AM

Earlier this week, CUNA released the August 2019 edition of its Economic Update, sponsored by the CUNA Finance Council. Deputy Chief Advocacy Officer and Chief Economist Officer Mike Schenck discusses the possibility of an economic recession and looks beyond the now inverted yield curve for significant signs of weakness.

“Uncertainty and volatility have increased dramatically over the past several weeks – mostly due to increasing concern about tariffs and the risk of full-blown trade war,” Schenk said. “As a result, many bond investors migrated to Treasuries – the safest investments on the planet. The resulting big increase in demand pushed Treasury prices higher.”

The August video also features:

• The cause of an inverted bond yield curve for 2019
• Discussion of a variety of leading economic indicators & what they’re now implying
• The likely near-term path for credit union operating results

“Consumers are likely to be more cautious in the current environment but there isn’t a lot of compelling evidence that they’ll be retrenching, Schenk adds. “Against this backdrop, it seems reasonable to expect credit unions will continue to see decent, though slower, loan growth, high asset quality and healthy bottom-line results over the next 12 to 18 months.”

Watch Schenk's Economic Update in the video below:

Study: Plastic Cards - Dirtiest Items People Carry Posted by AVCU on 2:50 PM

According to a recent study by LendEDU.com, a finance website, plastic cards finish first in the race to be the dirtiest item carried around by most people.

LendEDU tested various items for their germ scores and found credit and debit cards to be near the top of the list — not as dirty as New York City park benches and rental-bike handles, for example, but more so than a urinal handle at Penn Station and more than the city's subway poles.

The 41 payment cards tested by the website had an average germ score of 285, compared with 160 for various dollar bills and 136 for coins. Lower scores indicate less bacteria, with germ scores of 10 or below recommended for restaurant surfaces. LendEDU conducted the study in early May using Hygiena's SystemSure Plus Handheld testing device.

The Penn Station urinal had a score of 163.

"When you think about all the places your cash has been and how many times it has changed hands, you realize that bills become germ-transporting vessels," noted the study's author, Michael Brown. So too for payment cards, which are "getting swiped or inserted, changing hands or sitting on bar tops," he said. Brown thinks higher germ readings for payment cards over cash us surprising.

"One might expect cash to be the filthiest since cash stays in circulation a lot longer and can travel across the country by changing hands," he wrote in the report. However, debit and credit cards are being used more often and in an increasing number of places.

The report offered several sanitizing suggestions, from wiping cards periodically to washing your hands frequently before and after use.Despite the advent of debit and credit cards and various types of electronic payments, cash remains the most frequently used payment form, according to a Federal Reserve study, with the number of bills in circulation rising for 17 straight years.

One interesting recent development, according to the Fed study, is that there are now more $100 bills out there than any other denomination, as they have emerged as a favored way to store wealth and aren't exchanged as often as many other bill types.

This supports a finding that $100 bills are the cleanest U.S. currency type examined by LendEDU, with $5 bills the dirtiest, followed by $10 and $20 bills.

Time to Update Project Zip Code Data Posted by AVCU on 1:26 PM

A new version of AVCU's Project Zip Code version 19.0 is now available for download at www.pzconline.com/install. Project Zip Code (PZC) is a program that matches raw credit union membership data with state and federal lawmaker districts.

Our only mission is service to members, who are our greatest grassroots strength. PZC enables us to quantify this strength and illustrate to lawmakers the number of credit unions members in their district. The ability to show a lawmaker how many thousands of credit union constituents they have is an extremely powerful advocacy tool.

No personal data or individual information is ever collected or leaves the credit union. PZC receives only the counts of records successfully matched, and all data remains secure. PZC is compliant to with all state and federal privacy laws and regulations.

Currently 99 million credit union members have been matched to their federal and state legislative districts.

Vermont Ranks 3rd for Average Credit Card Debt Posted by AVCU on 4:17 PM

A recent study by WalletHub ranked each state according to the credit card debt consumers are racking up.  At the beginning of 2019 Americans owed a total of over $1 trillion in card debt. That number is only projected to increase by the end of the year. The study analyzed credit card data from TransUnion to calculate costs and required time to pay off a median card balance per state and Washington, D.C.

Vermont ranked 3rd highest average credit card debt among all states. The median credit card debt in the Green Mountain State is $2,227, which would take 15 months and 14 days to pay off.  Only the District of Columbia and Alaska ranked higher, at 2nd and 1st respectively. In DC, median credit card debt is $3,242, which would take consumers 17 months and 12 days to eradicate.  Alaska's median credit card debt is $4,144, and would take a consumer 19 months and 11 days to pay off.

Watch the video below and see the Wallet Hub study for all of the details.