September 2013
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FOCUS is the monthly e-Newsletter of the Office of Small Credit Union Initiatives (OSCUI). It focuses on helping small credit unions achieve success by providing news and highlighting opportunities. Click here to subscribe to FOCUS.
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 Featured this Month (Click on a heading to go to the article.)
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We just granted more than $870K to LICUs
NCUA recently announced 126 low-income credit unions (LICUs) were awarded a total of $871,597 in grants. More than half of the credit unions had not previously received an award through the Community Development Revolving Loan Fund (CDRLF). The average grant size was $7,000. Click here for a list of the grantees.
Some credit unions will use the funds to expand services, offer new loan products and provide educational opportunities to members, according to some of the application requests. The impact of the grants is significant in that the 126 credit unions are spread through 40 states and the District of Columbia, thereby having achieving tremendous reach to low-income individuals throughout the country.
"We're supporting the kind of innovation that has a direct and positive result on people's lives," William Myers, Director of OSCUI said.
OSCUI administers the CDRLF, through which the grants were funded. The table below shows the breakout of awards among the four initiatives funded.
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Grant Initiative
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Number of Credit Unions
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Total Awarded
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New Product or Service
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75
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$646,060
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Financial Capability
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22
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$122,486
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Training
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44
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$ 79,052
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Collaboration
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1
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$ 24,000
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Total
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126*
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$871,598
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* A credit union may have received more than one award; the 126 eliminates double-counting of such credit unions.
Credit unions that applied for a 2013 CDRLF grant were notified of their application status by email. Check your credit union's CyberGrants login for this information.
The next Revolving Loan Fund grant round is anticipated in the early part of 2014 for Student Internship and Collaboration initiatives. Urgent Need grants for emergency assistance are available year round, subject to fund availability. For more information click here.
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September 17 - OSCUI Monthly Webinar:
Member Business Lending - Part 1
Time: 2:00 pm ET
Duration: 90-minutes
Click here to register.
September 18 - NCUA CEO Boot Camp
Dallas, TX
Click here for information and to register.
September 25 - NCUA CEO Boot Camp
Birmingham, AL
September 25 - OSCUI Monthly Webinar: Small Business Lending
September 28 - NCUA CU Training Workshop
Buffalo, NY
October 17 - NCUA CU Training Workshop
New Orleans, LA
October 22 - OSCUI Monthly Webinar: Risk-Based Lending
November 14 - OSCUI Monthly Webinar: Employee Dishonesty Save the date, details to be posted on our website www.ncua.gov/Training.
December 17 - OSCUI Monthly Webinar: Succession Planning Save the date, details to be posted on our website www.ncua.gov/Training.
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OSCUI in the news
NCUA Announces MBL Webinars for Small CUs
Credit Union Times
Employees from the NCUA's Office of Small Credit Union Initiatives and Region IV's Division of Special Actions will explain the agency's requirements for a successful member business lending program.
NCUA Awards $871,597 in Grants to 126 Low-Income Credit Unions
CU Insight
A total of 126 low-income credit unions will receive $871,597 in funding through the 2013 Community Development Revolving Loan Fund grant round. William Myers, Director of the Office of Small Credit Union Initiatives (OSCUI), which administers the funds, said the grants reinforce success at the community level.
NCUA Awards Grants To 126 CUs
Credit Union Journal
NCUA has awarded 126 low-income credit unions some $871,597 in total grants as part of the 2013 Community Development Revolving Loan Fund.
More Than $870,000 Heads to Low-Income Credit Unions This Year
Credit Union Times
William Myers, director of the Office of Small Credit Union Initiatives, which administers the funds, said the grants reinforce success at the community level.
Two low-income credit unions in Alabama awarded grants
Birmingham Business Journal
Tuscaloosa Credit Union and Florence Federal Credit Union will receive $9,829 and $13,000 in funding, respectively, through the 2013 Community Development Revolving Loan Fund, which was established by Congress more than 10 years ago to provide grants and loans to credit unions serving low-income communities, according to NCUA.
Edisto Federal Credit Union gets $15,000 federal grant
The TandD.com (The Times and Democrat)
William Myers, director of the Office of Small Credit Union Initiatives, which administers the funds, said the grants reinforce success at the community level.
Budget Spreadsheet Upgrade Helps CUs Excel
Credit Union Times
Budgeting and strategic planning must go hand in hand to maximize efficiency and mitigate risk, Lowe said during a recent webinar hosted by NCUA's Office of Small Credit Union Initiatives.
Scholarship To Be Named After NCUA's Myers
Credit Union Journal
The Center for Transformative Action, an independent, nonprofit organization affiliated with Cornell University, is honoring Bill Myers, a former CU CEO who now heads up NCUA's Office of Small Credit Union Initiatives, for his life's work as a social entrepreneur by establishing a Social Entrepreneurship Scholarship in...
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PCA consideration for secondary capital
- Part 3 of 3
by Victor Costa, EDS Supervisor
This is the final article in our series on secondary capital. The previous installments appeared in this column in the April and August issues of FOCUS.
Low-income designated credit unions (LICUs) are increasingly seeking secondary capital as part of their capital maintenance plans, net worth restoration plans (NWRPs) or, in the case of new credit unions, revised business plans (RBPs). The increased capital is intended to enable a LICU to support increased lending and improve other financial services for the low-income members and communities it serves.
There are considerations for LICUs seeking secondary capital. If a LICU becomes subject to NCUA's Prompt Corrective Action (PCA) regulation, secondary capital may help strengthen its net worth position. However, secondary capital could be difficult to obtain for a credit union with weak net worth because; the proposed issuer may be unwilling to make the investment in a financial institution that could end up failing. This is the reality of a LICU under PCA with a low net worth (NW) ratio, looking for a secondary capital investor.
While secondary capital has benefits for LICUs, there are three major drawbacks to such financing:
- It is only a temporary solution to the growth challenge of a LICU/community development credit union.
- While the LICU will have a higher NW ratio after receiving the secondary capital, the positive affect will diminish in the five years prior to maturity due to regulatory requirements to re-categorize the debt. Refer to Part 2 of this series, in the August issue, for further explanation.
- It carries a high cost of funds due to the substantial credit risk associated with the account.
Secondary capital is considered a risky investment for the investor, thus it is priced commensurate with the risk. Bottom line, it is at risk to cover losses that exceed a LICU's reserves and Undivided Earnings. Therefore, investors typically only provide it to well-managed credit unions that demonstrate strong potential for success.
If your credit union falls under Prompt Corrective Action (PCA) and needs assistance, an Economic Development Specialist from OSCUI may be able to help. Contact us at [email protected].
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September 2013 Call Report changes
NCUA recently issued an email to credit unions highlighting important reporting changes to the 5300 Call Report for the coming report period, September 2013. Among the changes is the requirement for credit unions to complete the "Credit Union Grants Information" section on page 20 of NCUA Form 4501a - Credit Union Profile.
This will be the first collection of comprehensive data on credit union use of grant funding. The data will become an important resource in understanding credit unions active in community development.
All credit unions that have received grant funds must complete this section of the Profile whether the source of funds is NCUA or another entity. Low-income credit unions that receive grants from OSCUI should note this change in reporting requirements. For more information, click here to review the Credit Union Profile Form and Instructions: Third Quarter 2013.
Reminder: The next 5300 Call Report with credit union Profile updates must be submitted online by Tuesday, October 22, 2013.
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Helping members prepare for emergencies
 According to the National Oceanic and Atmospheric Administration's (NOAA's) National Weather Service (NWS), the Atlantic hurricane season is expected to peak from mid-August through October. NOAA's prediction for this year is "a 70 percent chance of an above-normal season."
Thankfully, NOAA's prediction has proven untrue so far; we hope it will fade without fruition. But, we thought the season a good time to remind you to remind your members of the need to plan financially for emergencies.
The Consumer Financial Protection Bureau (CFPB) issued an advisory on this topic in the aftermath of Hurricane Sandy last year. The advise it offered is still relevant:
Keep your account information and important documents in a water-tight container or fire [proof] safe, and keep copies somewhere else, like a safe deposit box, a secure place at work, or with a trusted relative or friend.
Online federal resources on this topic include:
- www.cfpb.gov: CFPB's website - click here for the entire advisory referenced above. The article also lists financial records consumers should gather ideally, in advance of an emergency.
- www.mymoney.gov: The Financial Literacy and Education Commission's website maintains a list of resources for "unplanned events."
- www.ready.gov: This website is a joint initiative of the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA) and includes a public service announcement video and ordering information for its Emergency Financial First Aid Kit.
Most of the information above may be downloaded into your publications to pass on to your members.
Have an idea for an article you'd like us to consider for FOCUS? Email your suggestion to Partnerships & Outreach at [email protected].
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Fall into shape with September training
New online training module available!
NCUA recently announced the availability of new online training modules for supervisory committee volunteers. Click here to view the initial installment.
Webinars: Member Business Lending - 2-Part Series
Our two-part webinar series on member business lending kicks off September 17 at 2:00 p.m. ET. Part two will be held September 25 at 2:00 p.m. ET. Both webinars will offer information beneficial to credit unions interested in developing business lending programs. You'll also hear from credit union professionals that have successful programs. Don't miss these two events; click here to register for Part 1.
Workshops and CEO Boot Camps
Make it your goal to register for any of the following live educational sessions
and receive in-depth training designed for credit union professionals at all levels. Click here to register.
- CEO Boot Camp - Dallas, TX - 9/18/2013
- CEO Boot Camp - Birmingham, AL - 9/25/2013
- OSCUI Workshop - Buffalo, NY - 9/28/2013
We've got a new video on the way!
Have you attended any of OSCUI's live or online events? If so, you know the benefits they provide. If you haven't and are considering attending, you too will want to view our next video about the OSCUI Training program. You'll hear testimony from past attendees and viewers. Stay tuned for the formal announcement, coming soon.
Let us know what you think about the services we offer or what you'd like us to offer. We'd love to hear from you! Email OSCUI's Training Division at [email protected].
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Happening in OSCUI
 | | Members of OSCUI staff in the Central Office, shopped for and packaged food from Whole Foods Market using funds contributed by the whole staff. |
Focus on nutrition earns OSCUI a nod from Whole Foods Market:
OSCUI staff focused on nutrition for its part in NCUA's Feds Feed Families Food Drive. The staff contacted the Whole Foods Market across the street from NCUA's Central Office and the market agreed to pull together nutritious food options. When OSCUI Food Drive Coordinator Ikenna Nwankpa (third from left in photo, above) notified Whole Foods of $800 in donations contributed by OSCUI staff, the Market was pleasantly surprised. Being the good neighbors they are, Whole Foods chipped in an extra $200 to round up OSCUI's donation to $1,000 toward the agency's total collection.
Details from other NCUA offices: LaToya R. Carpenter from NCUA's Region III office is serving a four-week detail to OSCUI. During her detail, LaToya will have the opportunity to perform the Grant Administrator duties as well as Management Analyst duties. She will also participate in an OSCUI hosted webinar and CEO Bootcamp.
OSCUI is hosting an intern, Chisanga Daka, for the fall and winter semesters: Chisanga is an Accounting/Finance student at Towson University in Towson, Md. She will work with the Grants and Loans team to prepare CDRLF financials, budget reports and review Grant applications and reimbursement requests.
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Announcements
Training
The Federation's Supervisory Committee Training webinar series starts Sept. 19: This series of four free webinars is aimed at credit union Supervisory Committee members, staff, Board Members and volunteers seeking in-depth information of the Committee's role and responsibilities. Registration is required. Sessions will be offered at 6:30 pm ET and 7:00 pm PT on the days below. For more information, contact Valerie Harrison at [email protected] or call 212-809-1850, ext 218 or click here.
Spt.19: Role and Responsibility of the Supervisory Committee
Spt. 26: Internal Audit Procedures
Oct. 3: Understanding Reports and Compliance Review
Oct. 10: Bank Security Act (BSA): What You Need to Know
OSCUI Partners
New CFPB Financial Discussion Group: The Consumer Financial Protection Bureau (CFPB) has launched a financial education discussion group on the professional networking website, LinkedIn. The purpose is to share the CFPB's work with financial education practitioners and other stakeholders and learn about promising practices from financial educators. To join the group, you must have or create a LinkedIn profile. Next, search for "CFPB Financial Education Discussion Group" and click on "Join Group." Click here to begin.
Financial Capability Certification: The NeighborWorks Center for Homeownership Education and Counseling is offering a new Financial Capability Certification for financial counselors. Click here for more information.
The U.S. Department of Health & Human Services' (HHS') Office of Community Services releases report: Family Strengthening through Integration and Scaling of Asset-Building Strategies analyzes the latest trends in integrating asset-building services into other large-scale, federally funded social services such as TANF, Head Start, foster care, child support and others. This CFED-authored report argues that such integration not only helps the outreach efforts of providers of asset-building services but also improves programmatic outcomes.
Other
Call for CU Participants - Accessible Financial Services Incubator: The Filene Research Institute (Filene) is seeking credit unions to participate in an accessible financial services incubator to benefit underbanked consumers. Filene is launching the incubator to test, package and scale innovative, viable financial products that aid low- and moderate-income U.S. consumers and provide alternatives to predatory products. For more information click here or email George Hofheimer at [email protected]. Application deadline: October 1, 2013.
Requests for Proposals (RFP) sought from CUs: Innovations for Poverty Action's (IPA's) US Household Finance Initiative (USHFI) released a RFP to encourage financial service providers of all types and sizes to develop and market-test new ideas in financial products and product features to help low and moderate income populations pay down debt, build assets and increase financial resilience. To learn more about this opportunity click here. Application deadline: October 14, 2013.
Woodstock Institute celebrates 40th anniversary: With a research symposium and celebration October 2 - 3, 2013 in Chicago. The event will provide an opportunity for advocates, researchers and industry representatives to engage with leading thinkers, researchers, and other advocates to explore issues relating to economic security, community prosperity and equity. Click here for more information.
First Nations L.E.A.D. Conference: Will take place October 3 - 4, 2013 in Prior Lake, Minnesota. First Nations Development Institute will host this conference designed to help emerging and existing leaders in Indian Country network, share ideas and learn new skills related to asset building. Click here for more information.
NAPSA Summit on Elder Financial Exploitation in Minneapolis: Will take place October 4, 2013 in Minneapolis, Minn. The National Adult Protective Services Association (NAPSA) sponsors this conference to discuss the growing trend of financial abuse and fraud targeting the elderly. Click here for more information.
Money Matters on Campus: EverFi and Higher One released its findings on a survey of 40,000 first-year college students from across the U.S. about their attitudes and behaviors regarding banking, savings, credit cards and school loans. Click here to access the report.
Opportunity Finance Network's (OFN's) 29th Annual Conference: Will take place October 15 - 18, 2013 in Philadelphia. The agenda includes more than 50 breakout sessions across 13 tracks, including a Credit Union track. Click here for more information and to register.
Oct. 17 is International Credit Union (ICU) Day: Sponsored by the Credit Union National Association (CUNA), the theme this year is "Credit Unions Unite for Good." Credit unions are encouraged to recognize ICU Day and use it as impetus for making a difference in their communities. Click here for more information.
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NATIONAL CREDIT UNION ADMINISTRATION
The Office of Small Credit Union Initiatives
1775 Duke Street, Alexandria, VA 22314 |
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