May 3-7, 2010

President’s Message
A time to recharge, a chance to celebrate

By William J. Mellin, President/CEO

Every year, we come together for a few days to celebrate our unity, recharge our batteries, learn best practices and strengthen the credit union movement throughout New York State. Every year, our Annual Business Meeting and Convention is memorable. This year, it will be unforgettable.

After all, how often do you get to meet Johnny Bench—an inspiring speaker as well as a Hall of Famer? Or hear the former CEO of Porsche talk about gaining extraordinary results from ordinary people? Or learn lessons from credit unions in the developing world, directly from the head of the World Council of Credit Unions (WOCCU)?

Our Annual Business Meeting & Convention would be unforgettable enough with those speakers alone…but they are only the beginning. During our three days together in Cooperstown, we will hear from leading experts on marketing trends, economic forecasts, growth strategies, and more. We will enjoy a gala dinner and a round or two of golf. We will network and dine at a five-star hotel in Cooperstown, one of the most beautiful villages anywhere—and home of the Baseball Hall of Fame.

And we will absorb the intangibles. By meeting together, we forge bonds and build camaraderie that can make our credit unions stronger. By talking face to face, we share stories and ideas that can impact our outreach, our members, or our bottom line. And by getting away, we take a step back from the day-to-day to see—and celebrate—the power of our worldwide movement.

That power is exactly why we chose this year’s theme, New York Credit Unions: A Grand Slam. Yes, it reflects the spirit of Cooperstown and the National Baseball Hall of Fame—but it also reflects credit unions’ ability to cooperate, maximize achievement and deliver powerful results to members and each other.

If you have attended Convention before, you know what a special event it is. If you haven’t, I invite you to come and experience it for the first time. You can find details and registration materials on the Association website.

I look forward to seeing you in Cooperstown.


Featured News
Revised BSA/AML examination manual now available

The Federal Financial Institutions Examination Council (FFIEC) recently released a revised version of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

The revisions clarify supervisory expectations and incorporate feedback from the banking industry and examination staff. They were made throughout the manual, and sections with significant updates are referenced in the table of contents with “2010.”

Significant updates include:

• Bulk Currency Shipments: A new section on bulk currency shipments has been added.
  
  

• BSA/AML Compliance Program Structures: The section on Enterprise-Wide BSA/AML Compliance programs has been substantially reworked to: address the variety of BSA/AML compliance programs that exist; reflect current supervisory expectations; and enhance the specific discussion of consolidated compliance programs. The section is now titled “BSA/AML Compliance Program Structures.”
  
  

• Core Examination Procedures for Assessing the BSA/AML Compliance Program: The core examination procedures for assessing the BSA/AML compliance program have been streamlined and reorganized.
  
  

• Developing Conclusions and Finalizing the Examination: This section has been revised to include guidance for examiners regarding how to determine whether a violation is systemic or recurring, as opposed to a technical or isolated violation.
  
  

• Currency Transaction Reporting Exemptions: This section has been updated to reflect the changes in the regulation and FinCEN guidance in this area.
  
  

• Funds Transfers: This section has been updated to reflect introduction of the SWIFT MT 202 COV message format.
  
  

• Suspicious Activity Reporting: The discussion of methods to identify, research and report suspicious activity has been enhanced, and this section has been reorganized to reflect current supervisory expectations and make the discussion easier to follow and more user-friendly. An Appendix S has also been added to illustrate the interaction between the different components of a suspicious activity monitoring program.
  
  

• Automated Clearing House Transactions: This section has been updated to reflect the recent changes to international Automated Clearing House transactions. Corresponding changes have been made to the Office of Foreign Asset Control (OFAC) section.
  
  

• Electronic Cash: This section has been revised to include a more in-depth discussion of prepaid cards.
  
  

• Trade Finance Activities: The definitions in this section have been updated to more closely reflect actual usage in the industry, and a reference to recent Wolfsberg Group guidance has been added.
  
  

• Electronic Banking: This section—specifically, the Remote Deposit Capture discussion—has been updated to reflect the FFIEC guidance, Risk Management of Remote Deposit Capture (Jan. 14, 2009).
  
  

• Third-Party Payment Processors: This section has been updated to reflect recent agency guidance, Guidance on Payment Processor Relationships, FDIC FIL-127-2008 (Nov. 7, 2008), and Risk Management Guidance: Payment Processors, OCC Bulletin 2008-12 (April 24, 2008).

For additional assistance or guidance, contact the Credit Union Association of New York’s Compliance Services team at (800) 342-9835, ext. 8147.

Governmental Affairs
Gillibrand visits Cheektowaga Community FCU, continues push for MBL legislation in jobs package

Sen. Kirsten Gillibrand (D-N.Y.) recently visited Cheektowaga Community FCU to continue promoting expanded member business lending (MBL) for credit unions.

During her visit April 30, Gillibrand highlighted the Small Business Lending Enhancement Act, which would raise the credit union MBL cap to 25 percent of total assets and increase the loan amount subject to the cap from $50,000 to $250,000.

The senator is currently working to include the legislation in the small business jobs package, which the Senate is expected to tackle in the weeks ahead.

“If we’re going to create new jobs and rebuild our economy for the long term, small businesses need more access to credit,” she said. “This commonsense legislation would free up lending at not-for-profit credit unions in every corner of America to small businesses. This would give small businesses more of the capital they need to get off the ground, grow and get thousands of Americans back to work.”

The Summit FCU President/CEO Michael Vadala also spoke, saying, “Credit unions across the state and the nation sincerely appreciate Senator Gillibrand’s leadership on the very important issue of credit union business lending. Here in Upstate New York, many of the large businesses that used to fuel our economy are gone, and it will be the success of small business that determines our future. Adding credit unions as a funding source is critically important to those businesses which are too small to be considered for loans from larger commercial banks.”

The Small Business Lending Enhancement Act was sponsored by Sen. Mark Udall (D-Colo.) and co-sponsored by 10 additional senators from both parties. Similar legislation has been introduced in the House of Representatives by Paul Kanjorski (D-Penn.) with 99 co-sponsors.

New York credit unionists are encouraged to support this legislation by sending an e-mail or letter to their legislators through CapWiz.

Pictured above: NYS Sen. William Stachowski (D-Buffalo) looks on as U.S. Sen. Kirsten Gillibrand discusses member business lending at Cheektowaga Community FCU.

Compliance
Compliance Services is now fully electronic

The Credit Union Association of New York’s Compliance Services recently completed its conversion to providing all information to member credit unions electronically. Credit unions can now expect to receive electronic notice of proposals issued, final rules and FYIs.

This conversion will allow Compliance Services to keep member credit unions informed about changes in the regulatory environment in a more timely fashion.

Effective immediately, compliance information will only be provided in electronic format. The following individuals have been automatically added to the distribution list: credit union main contacts, InfoSight subscribers and compliance session attendees who provided e-mail addresses.

Any individuals who are unsure of their inclusion in the list, or who would like to be added, should contact Member Services at (800) 342-9835, ext. 8546 or member.services@cuany.org.

Feedback on proposed RegFlex CU regulations due May 17

The NCUA has proposed regulations that would significantly curtail the flexibility given to federal credit unions qualifying for the RegFlex exemption. The Credit Union Association of New York is currently surveying New York credit unions in order to develop and submit a response to the proposed regulations.

New York credit unionists are encouraged to complete the online survey by May 17. The survey includes a summary of the proposed changes, as well as questions regarding each change.

Community Development
MORE Spotlight: Corning FCU shares financial lessons with more than 400 local students

 
During Financial Literacy Month in April, Corning FCU staff shared valuable financial lessons with more than 400 local students.

During their semi-annual “FoolProof® for High Schools” visits, credit union representatives introduced the FoolProof program and discussed core personal finance topics, including:

Students reacted positively to the program, with one noting, “I know a lot of people who have made credit mistakes, and I’m glad I know how to be careful.”

During the month of April, Corning FCU staff visited 23 classrooms in seven schools.

Pictured above: Corning FCU employee Chris Vang interacts with students during a classroom presentation.

About MORE Spotlight:

Each month, the “MORE Spotlight” features a story of one New York credit union’s outreach efforts. These stories are selected from MORE Report submissions. Credit unions are encouraged to submit stories year-round by visiting the MORE Resource Center.

High-resolution images of outreach events may be submitted to Bonnie Sklar, public relations coordinator, at bonnie.sklar@cuany.org.

For more information about the MORE Report, contact Allison Doney-Barna, community development coordinator, at (800) 342-9835, ext. 8134 or allison.doney@cuany.org.

Credit Union News
ERDA FCU opening attracts more than 500 attendees, local leaders

More than 500 people, including several local leaders, celebrated the opening of East River Development Alliance (ERDA) FCU April 26.

The credit union’s first branch is located at 13-03B 40th Avenue in Queens.

Several individuals spoke at the event, including:

• U.S. Rep. Carolyn Maloney (D-N.Y.);

• New York City Mayor Michael R. Bloomberg;

• New York City Comptroller John Liu;

• New York State Assembly Member Catherine Nolan;

• New York City Council Speaker Christine Quinn;

• New York City Council Members Jimmy VanBramer and Peter Vallone Jr.;

• New York City Housing Authority (NYCHA) Chairman John Rhea; and

• National Federation of Community Development Credit Unions President/CEO Cliff Rosenthal.

“Nearly 50,000 Queens households – many in public housing – don’t have bank accounts, and one of the major reasons is a lack of access to local credit unions,” said Mayor Bloomberg at the event. “The East River Development Alliance is committed to helping public housing residents in Long Island City move up the economic ladder, and its new federal credit union is a major step forward. The City’s Office of Financial Empowerment looks forward to working closely with ERDA to ensure that low income New Yorkers throughout the City have access to the products and services they need.”

ERDA FCU will serve residents of New York City’s Long Island City, Astoria, Woodside and Sunnyside communities, focusing on the Woodside, Ravenswood, Astoria and Queensbridge Houses.

To date, the credit union has secured 1,000 pledges to open accounts from community residents, and $1.1 million in non-member deposit pledges—many from local credit unions.

Pictured above: NYC Mayor Michael Bloomberg speaks at the grand opening event. Photo courtesy of National Federation of Community Development Credit Unions.

Industry News
IRS releases TCE, VITA grant program information

The IRS has released Publication 4680, which contains information about the 2011 grant programs for Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA).

The publication includes FY2011 grant timelines, the objectives of each grant, eligibility criteria and information about applying for multi-year grants.

Credit unions planning to apply for the TCE and/or VITA grants should prepare now, as the open application period begins June 1 and closes July 9, 2010. Application packages will be made available in late May.

For more information about TCE or VITA, contact Debra Chandler, IRS/NCUA relationship manager, at (404) 338-8306 or debra.chandler@irs.gov.


CUs praised on WalletPop Blog

Credit unions recently earned praise from a WalletPop blogger in an post titled, “Should you join a credit union? Here’s what you need to know.”

Blogger Geoff Williams presented several questions about credit unions, along with answers from industry leaders and credit union advocates. He noted numerous positive distinctions, including:

• Credit unions offer the same products and services as banks, but have a nonprofit status.

• Credit unions are owned and run by people in the community, providing a unique level of accountability.

• Credit unions’ fees are typically lower, and staff are often more willing to work with members in need of assistance.

• Through partnerships, credit unions are able to offer more surcharge-free ATMs than in the past.

• Credit union accounts up to $250,000 are insured by the NCUA.

• Membership eligibility has expanded at many credit unions.
  

“Unless you really just love the idea of banking with a giant bank, and perhaps enjoy the ease of having numerous branches that you can waltz into, it’s pretty hard to come up with a significant drawback to banking at a credit union,” he wrote.

To read the post, visit the WalletPop Blog. WalletPop is published by AOL Money & Finance.

New MyMoney.gov website launched

The Financial Literacy and Education Commission (FLEC) recently launched its redesigned financial literacy education website, www.MyMoney.gov.

The new website, which is available in both English and Spanish, provides visitors with information to plan for a variety of life events that have financial implications, such as the birth or adoption of a child, home ownership or retirement.

Other features include:

• specific resources for teachers, service members, women, parents, youth and employers;

• a financial savings calculator;

• worksheets for establishing a household budget; and

• a college preparation checklist.
  

The MyMoney.gov website is presented by 20 federal agencies and bureaus as part of the FLEC’s mission to improve financial literacy and education and provide free, reliable financial information to the American public.

Webinar to explore Michigan CUs’ 2009 savings innovation

In 2009, credit unions in Michigan collaborated to pilot a prize-linked savings product with the largest grand prize ever in the United States. Motivated by a $100,000 grand prize and monthly prizes, more than 11,500 Michigan credit union members saved more than $8.6 million in 2009.

Credit unionists can learn more about this savings innovation during a webinar May 14 at 1 p.m. Leaders from the Doorways to Dreams Fund (D2D), the Filene Research Institute and the Michigan Credit Union League (MCUL) will share results, key findings and implications for credit unions nationwide.

Registration for the webinar, Save to Win: Playing, Saving, Winning, is available online.

For more information or to download the free “Save to Win Innovation Brief,” visit the Filene Research Institute website.

Vendor News
Invest in America Mother’s Day promotion: 25 percent off FTD purchase

As part of Invest in America, credit union members can receive 25 percent off FTD flower and gift purchases through May 15.

For more information about the FTD Mother’s Day promotion, visit the Invest in America website.

More than 2,400 credit unions currently participate in Invest in America. For more information about the program, visit the Invest in America Partner Center.

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Credit Union Association of New York

The Point is published weekly by the Credit Union Association of New York for its members.

Editor: Mindi Schwab · E-mail: publications@cuany.org