Are you passionate about credit unions? Do you feel strongly about where the community is moving? Credit Union Journal wants to hear from youand now it’s easier than ever to be heard.
At cujournal.com, you can do more than just read about the newsyou can have your say about it, too. In addition to being able to submit letters to the editor for publication, you can leave comments on specific articles and spark a discussion and/or debate on the issues that mean the most to you.
CU Journal has always sought to be a forum for discussion of the issues that are important to credit unions, to facilitate a dialogue on the biggest trends, challenges and opportunities to face our readers. Read on to see some of your colleagues’ latest comments.
Big Drop in Q1 Mortgages, 'Great Divide’ Goes On
Maybe all the new regs / compliance also contributed to the decline in mortgage lending....just a thought
Posted by samthesham | Tuesday, June 03 2014 at 5:40PM ET
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I doubt that the point made in the article is true, “The good news for small credit unions, he said, is that much of the growth large CUs experienced in the last few years was tied to growth in mortgages.” Yes we have seen a big increase in auto lending that has almost made up for the lower mortgage loan production at our credit union. But the problem for smaller credit unions is that auto lending is now almost exclusively at the auto dealer through indirect lending. Indirect lending requires a lot of resources and dealers prefer dealing with a few high volume lenders who take A to Z credit. Indirect lending is a scale business and is largely done in the $500 million and over credit unions. The other problem is that the shift to auto lending means lower loan rate loans are being written than when the volume came from real estate. That means the credit union will earn less spread income. The playing field has clearly shifted and now requires scale in order to succeed. That is the message of the great divide statistics.
Posted by henryw | Wednesday, June 04 2014 at 10:34AM ET
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It’s nice to know that NCUA sees credit unions “trending” so well - down 262 NPCUs year to year and right in line with the last 40 years of consolidation. What is that? 10,480 “consolidations” in 40 years?
Posted by mdillon | Wednesday, June 04 2014 at 11:29AM ET
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Five Star Gets Final OK to Buy Flint River Bank
If the shareholders of Flint River are comfortable, then the move into the CU world is 100% positive.
Posted by DCrowe | Thursday, May 29 2014 at 4:57PM ET
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A Promo So Successful Even Facebook Noticed
Great application of new technology. Will be “liking” and following the progress of this. Keeping quality advertising will be the key.
Posted by Dianne R | Saturday, May 24 2014 at 10:57AM ET
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True blending of technology, marketing and raving fans.
Posted by snyder | Sunday, June 01 2014 at 7:32AM ET
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Over 100 CUs Could Face Fines For Late Call Reports
One has to consider if the same “reasonable” approach is being used RBC proposal!
Posted by sundies | Friday, May 23 2014 at 9:07AM ET
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1,000 Letters Later, Trades Want More Time on RBC
Even with the changes hinted at, this rule amounts to a Weapon of Mass Consolidations!
Posted by gdstockdale | Wednesday, May 28 2014 at 12:45PM ET
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After 45 Years at MECU, Fiore to Retire
The second generation of CEOs are now retiring. The first generation created the credit union to serve the employees who worked for the sponsor group. The second generation, in most cases, created a community credit union after the sponsor group either went out of business or just decided to no long sponsor the credit union. The second generation of CEOs built a professional management staff and oversaw a period of rapid asset growth, both organic and through mergers.
The second generation saved the credit union movement by helping to pass HR 1151 which was the last time credit unions were able to pass any major legislation through Congress. The second generation included many great credit union CEOs; John Fiore, Pat McPharland, John Tibbets, Perry Dawson, Stan Hollen, Ed Callahan, Bob Brain, Gordon Dames, Tom Sargent, Bob Bream, Charles Emmer, Dave Reynolds, Gary Oakland, Larry Wilson, Buck Levins, and a long list of others. It is my wish that the next generation be remembered for making credit unions the market share leader for financial services. I wish John Fiore the best. He is a good man.
Posted by henryw | Thursday, May 29 2014 at 10:57AM ET
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***FBI Probes $10 Million Embezzlement At Parsons Pittsburg CU***
Is anyone gettng the pattern here? Small credit union fails with catastrophic losses. Have you heard that before? When will NCUA change its examination policies to recognize that a credit union with a small staff has a very high risk due to a lack of segregation of duties? In addition many of these credit unions are audited by local CPA firms who often do not have other finanical institution clients and therefore are not familiar with the risks and the type of audit procedures needed to audit a finanical institution. Small credit unions account for 25% of all credit union assets. That is material and it poses a risk to the insurance fund.
Posted by henryw | Tuesday, May 20 2014 at 10:27AM ET
Henry,
While your point is well taken in regards to the fact that small cu’s have fewer segregation of duties, I have to disagree with your assessment of the NCUA’s exam policies for small cu’s, as well as the comments regarding local CPA firms with no experience with financial institutions.
Having worked in both large and small cu’s, I have seen the capacity for individuals to commit fraud equal on both ends of the spectrum. The key deterrent to fraud is over site, and while you point out that small cu’s have less segregation of duties, thus making them more susceptible to fraudulent activities, it is my belief and experience that with a strong and active supervisory committee, there is enough deterrent to keep those whom are inclined to commit fraud in check. And, if such individuals are engaged in fraud, they are discovered quickly.
The NCUA’s policies are based on the complexity of the institutions, as well as the risk they present. The fact is that smaller cu’s are less complex as larger cu’s. Our investments carry less risk, our loan portfolios carry less risk (meaning we didn’t have mortgage backed securities and large real estate portfolios), and our transactions tend to carry less risk. So, to make the assertion that small cu’s need some type of elevated supervision from our regulator, is to assert that all small cu’s are managed and operated by dishonest people. I assure you this simply is not the case.
Now, on the subject of the Supervisory audit. It has been my experience that the CPA’s familiarity with institutions has more to do with location of the CPA firm as opposed to the size of the cu. So, when I was running my cu in a small remote town, I had to engage a firm that was from the closest larger city in order to get one with experience. Now that I am running a small cu in a larger town, all the CPA firms that I have contacted and engaged in business with have experience, and do work for other banks and cu’s in the region. So, again, it’s not the size of the cu that limits the experience of the CPA firm, it’s the location, and that can be worked around.
So, to wrap my little rant up. I believe the notion that small cu’s need more over site is misplaced. What we need are strong volunteers that are competent in their duties and have access to ongoing training, such as that provided for free from the NCUA or thru CUNA’s training series, along with appropriate over site by our regulator. Let’s keep smaller cu’s serving the function that they were meant to serve, Helping the little guy, providing services at reasonable costs, and keeping the bigger institutions in check.
Posted by MARK S | Tuesday, May 20 2014 at 3:57PM ET
Mark,
We agree on the point that strong competent volunteers are a good way to add more oversight to the credit union’s operations. But my experience is that the weakest link at most credit unions is the supervisory committee. That committee has become almost functionless with the exception of hiring and overseeing the audit firm. Thirty five years ago when I was Chairman of the Sacramento Central Supervisory Committee, we did real work. We did cash counts, we did member account verifications, we had received member correspondence directly from members and investigated member complaints. We have done due diligence for mergers at many credit unions and we rarely find an active supervisory committee.
At our credit union we have the resources to do good internal control. We have a large internal audit team made up of experienced and professional auditors. We have a former national CPA firm partner and a top insurance company executive on our Supervisory Committee. Our internal audit schedule is robust and covers all departments. We have extensive written policies and procedures that are on-line. We provide extensive training to staff and we test them on their learning of the material. We hire independent third party experts to review our data processing because our Supervisory Committee doesn’t have the expertise required.
The sad truth is that internal control is very weak in the smaller credit unions. They do not have the expertise, the resources or the volunteer help they need. The credit union press has had a number of reports of catastrophic failures or huge losses relative to total assets at smaller credit unions. This is reaching epidemic proportions.
None of this is to say that the credit union’s asset size is the sole determinant of the quality of internal control. There are also examples of large credit unions with very bad internal control. The point is that the large credit union has no excuse. They have the resources to have good internal control.
Posted by henryw | Wednesday, May 21 2014 at 9:31AM ET
