By David Baumann, Editor, Washington CU Daily
House Republican appropriators last week approved legislation that would cut more than $47 billion from the Community Development Financial Institutions program in FY25.
Don’t worry. That proposal is not going anywhere.
Congress likes the CDFI program since it brings money home to their districts, so a cut of that magnitude is highly improbable for a program that allows members to write press releases and hold news conferences announcing funding.
Even House Financial Services Appropriations Subcommittee Chairman Rep David Joyce, R-Ohio, whose subcommittee produced the bill, is a fan of the program.
In November 2022, Joyce announced that the CDFI’s New Markets Tax Credit program had allocated $35 million to the Greater Cleveland Partnership. “Over the years, I’ve seen the positive and lasting impact these kinds of projects have had on northeast Ohio families and am proud to have helped secure the tax credits that support them,” Joyce said, in a press release issued by his office.
In Sept. 2021, Joyce also touted the $50 million in New Markets Tax Credits that Cleveland New Markets Investment Fund II (CNMIF) received. Joyce also noted that he had sent a letter to Treasury Secretary Janet Yellen lobbying for the Cleveland project.
So, why did Joyce’s subcommittee approve a bill that calls for the Community Development Financial Institutions Fund to receive $276 million in FY25? That represents a $47.4 million cut compared to the program’s FY24 funding level.
A good question. Based on past evidence, it is not too cynical to suggest that the appropriations bill represents a political statement rather than a serious piece of legislation that appropriates money.
Even the Trump Administration’s Treasury Secretary Steven Mnuchin accepted the futility of calling for cuts to the CDFI program. The Trump Administration repeatedly proposed eliminating the program, arguing that it had served its purpose. However, testifying before a House subcommittee, Mnuchin acknowledged that that proposal was going nowhere.
Then there are the policy riders in Joyce’s bill.
In yet another demonstration of why Congress cannot function these days, the appropriations bill is filled with proposals that have repeatedly been rejected by the Senate and never have been included in final spending measures.
As a matter of fact, the Senate, on a regular basis, refuses to accept controversial policy riders that are attached to must-pass appropriations bills.
For instance, the subcommittee’s bill proposes to convert the Consumer Financial Protection Bureau into a five-member commission that is funded through the annual appropriations process. In past years, members have argued that the Supreme Court might find the current funding mechanism—the agency draws its money from the Federal Reserve—unconstitutional.
But a few weeks ago, the majority of the court, in a decision written by conservative Justice Clarence Thomas, said the current CDFI funding scheme was constitutional.
Nonetheless, House Republicans are trying again.
And the bill also proposes prohibiting the agency from implementing rules it has issued.
For example, the bill would prohibit the CFPB from enforcing a final rule that would cap credit card late fees at $8. That rule has been challenged in court and the CFPB has been temporarily blocked from implementing it. But if House Republicans have their way, the CFPB would permanently be prohibited from enforcing it.
That is unlikely to be accepted by the Senate and even many House members.
The bill also would prevent the Biden Administration from enforcing several other rules.
During the subcommittee markup, Joyce said that the bill includes provisions that would prevent the Biden Administration from implementing its “overbearing and costly agenda.”
Normally, there is an established way to kill rules; Congress could pass resolutions killing rules using the Congressional Review Act. Of course, President Biden would most likely veto those resolutions, since his administration produced the rule that would be challenged.
A key Democrat said opponents of the House GOP bill should not be too concerned. “This bill is going nowhere,” said Subcommittee Ranking Democrat Rep. Steny Hoyer of Maryland.
So, the bill is highly likely to be a political act of futility. And it’s the type of legislation that has many House members deciding to leave Congress.
Take Rep. Ken Buck, R-Colo., who first announced his retirement from the House and then decided to resign this year before his term ended.
The Washington Post quoted Buck as saying, “This place just keeps going downhill, and I don’t need to spend my time here.”
Then there’s Rep. Carlos Gimenez, R-Fla. CNN quoted Gimenez as saying, “The definition of insanity is doing the same thing over and over again and expecting a different result.”
That pretty much sums up the House Republican Financial Services appropriations bill.
]]>Traditional financial institutions (FIs) often grapple with a pressing question: How can we effectively compete against industry giants? This dilemma concerns more than matching earning rates or replicating existing rewards programs. It's about carving out a distinctive space in the market—one that leverages each FI's unique strengths and capabilities.
At ampliFI Loyalty Solutions, we understand the challenges that FIs face in this competitive landscape. That's why we advocate for a strategic shift in the competition approach—focusing on customization and real-time rewards as key differentiators. Our enterprise engagement strategy goes beyond traditional rewards programs by incentivizing consumers to utilize other products and services offered by the FI, making it a true loyalty strategy rather than just a single-product rewards program.
How FIs Can Stay Competitive
National card issuers are detached from the everyday cardholder, which is evident in their celebrity advertisements and excessive spending. With such rich programs, how can community FIs compete? The answer lies in playing to their strengths. While national card issuers may have vast resources and economies of scale, FIs possess intimate knowledge of their consumer base, deep-rooted community ties, and agility to innovate rapidly.
“Financial institutions need to compete differently,” says Heidi Young, EVP of Sales and Business Development at ampliFI. “Instead of vying for the highest rewards earning rate or cashback percentage, you should compete by leveraging the close relationships you cultivate with your cardholders and the diverse range of enterprise engagement products you can integrate into your programs.”
FI’s have the unique advantage of knowing their communities. By capitalizing on these strengths and embracing innovative loyalty features like customization and real-rime rewards, FIs can create compelling value propositions that resonate with consumers and drive competitive advantage.
Crafting Tailor-Made Loyalty Programs
Customization is the key to true consumer satisfaction. According to Marigold1, personalized experiences result in higher engagement, with 78% of consumers stating they are likely to engage with a customized offer. Not only does this drive engagement and spend, but it also significantly influences consumer satisfaction. 85% of consumers say their top brands treat them like individuals, whereas 51% of consumers expressed frustration over irrelevant offers and messaging.
Unlike one-size-fits-all solutions offered by national card issuers, ampliFI’s end-to-end loyalty platform gives FIs the advantage of crafting tailor-made loyalty programs that resonate with their consumer base. By leveraging data analytics and consumer insights, FIs can design rewards programs that reflect their consumers' preferences, behaviors, and aspirations, fostering deeper connections and driving long-term engagement.
Integrating Unique Features and Services
Real-time rewards are another game-changing capability that FIs can take advantage of. In today's fast-paced world, consumers crave instant gratification and seamless experiences. Real-time rewards enable FIs to meet these expectations by providing instant redemption options and immediate notifications. This real-time interaction is not just about rewarding the cardholder for their transactions—it's about showing them that you recognize and appreciate their engagement with the FI, almost as another marketing touch.
Whether redeeming points at the pump for a discount on fuel or using points to get reimbursed for a purchase, consumers unlock value on their own terms, enhancing satisfaction and loyalty.
“It's about recognizing and rewarding cardholders' engagement across a spectrum of relationship products, fostering deeper connections and loyalty," says Heidi.
Competing against national card issuers is not about replicating their offerings but forging a distinct path that plays to Fis’ strengths. By utilizing their intimate knowledge of their consumer base and deep-rooted community ties, FIs can foster strong consumer relationships that result in sustained loyalty. Customization and Real-Time Rewards are powerful tools that enable FIs to create differentiated loyalty programs and stay ahead in a fiercely competitive landscape. With ampliFI's expertise and innovative solutions, FIs can unlock new opportunities for growth and success.
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The League of Southeastern Credit Unions & Affiliates (LSCU & Affiliates) launched its annual convention, the Southeastern Credit Union Conference & Expo (SCUCE), at the Signia by Hilton Orlando Bonnet Creek today. The region’s premier credit union conference, this year’s SCUCE has attracted more than 1100 attendees representing more than 130 credit unions.
This year’s conference is themed “Engage for Impact,” as attendees from across Alabama, Florida, Georgia, and beyond engage with one another and with riveting presentations and breakout sessions, all to make a stronger impact together for their members and communities.
“Our members are the heartbeat of LSCU, and SCUCE always provides a tremendous opportunity to learn from and collaborate with credit unions to more effectively serve and lead in the year to come,” shared LSCU President Samantha Beeler. “It’s also a great venue to help educate one another on emerging topics, threats, and opportunities so we can better advocate for what is important to credit unions, and this week always reminds us why we do what we do.”
The conference will offer a host of informative and inspirational sessions aimed at the exponential impact credit unions can have when collaborating. Among the industry leaders speaking at the event, Jim Nussle, President/CEO of America’s Credit Unions, will offer a national perspective on the credit union movement, while Elissa McCarter LaBorde, President/CEO of the World Council of Credit Unions, will share on the power of international collaboration.
"We strive to make every SCUCE the best one yet, and this year is set to surpass them all,” said Steve Willis, President of Affiliates Consolidated Services and LEVERAGE. “From celebrating the incredible achievements of our members, to forging and growing relationships, to learning from our members how we can better serve them, to providing a family reunion-style atmosphere where credit union leaders from across the southeast can gather and grow, this SCUCE will certainly be one to remember.”
The SCUCE Exhibit Hall, featuring more than 180 vendors, also opened today, enabling attendees to discover the latest innovations and solutions in the credit union industry. Additionally, the LSCU Silent Auction, held in a hybrid online and in-person format, looks to be a major success, benefiting LSCU’s Political Action Committees, and Tuesday night’s SECUF Poolside Donor Appreciation Event brought together attendees who have supported the Foundation’s mission for an evening of lively celebration and relaxation.
“SCUCE is always a great event, and I’m so excited to dive deeper into what this year’s conference has to offer,” shared Judd Davis, CEO of Health Credit Union in Birmingham, Alabama. “I love the wealth of professional development offerings, networking opportunities, and industry insights that will empower us to apply what we learn here to grow and improve our credit unions, which will allow us to better serve our members.”
SCUCE 2024 will continue to engage participants through Friday, June 14. Attendees will enjoy more captivating speakers, impactful breakout sessions, additional exhibit hall opportunities, the “Best of the Southeast” Gala Dinner, the LSCU Awards, the Advocacy Luncheon, the LSCU Annual Business Meeting, and much more.
]]>Austin's largest credit union will open its first Houston-area branch at UTHealth Houston
UFCU (University Federal Credit Union) announced that it will open its first Houston branch later this year in the world-renowned Texas Medical Center within the UTHealth Houston building at 7000 Fannin Street.
"We look forward to serving the UTHealth Houston community, Texas Medical Center and our nearly 30,000 UFCU Members in the Houston area," said UFCU CEO and President Michael Crowl. "Founded by and rooted in higher education for nearly 90 years, UFCU has become one of the largest credit unions in Texas. We are proud to serve four esteemed academic health universities across the state with UTHealth Houston joining the University of Texas Medical Branch, Dell Medical School and Texas A&M Health."
UTHealth Houston is one of 61 institutions in the Texas Medical Center — the largest life sciences destination in the world.
"The impact that the Texas Medical Center continues to make is truly unparalleled. More than 7 million visitors come to this corner of Houston annually for the renowned care provided," said UFCU Executive Vice President of Member Experience Chris Turnley. "The impact of UTHealth Houston and the Texas Medical Center is central to a thriving Texas, and we are excited to provide services to strengthening the financial well-being of UTHealth Houston's 15,000 employees."
UTHealth Houston joins a distinguished roster of more than 200 schools, employers, and organizations in UFCU'sfield of membership. A self-described "Member-obsessed" organization, UFCU exists to provide access to affordable capital so Members can build financial success and brighter futures.
]]>Video campaign demonstrates the role financial institutions play in account holders' financial journeys
Alkami Technology, Inc. (Nasdaq: ALKT) ("Alkami") announced it's releasing a video campaign highlighting the importance of community financial institutions in the daily lives of their account holders and members. The campaign was developed in partnership with Northwest Federal Credit Union, Connexus Credit Union and Patelco Credit Union, all of which were presented during Alkami Co:lab 2024.
"One of the most rewarding aspects of being a community-centric financial institution is supporting our members throughout their lives and financial journeys, from purchasing their first home or car, to opening a small business, to planning for their children's futures," said Jeff Bentley, president and chief executive officer of Northwest Federal Credit Union. "We are honored to participate in a campaign that demonstrates the role of community financial institutions in these important life moments, and are proud to work with a technology partner who innately understands the value of the member-credit union relationship."
Each video in the campaign tells the story of how each of these credit unions supported its members during an important moment in their lives, such as needing a car loan or small business loan. One video illustrates the positive impact of an informed member of the customer service staff, delivering exceptional support in the face of a member account issue.
"Many of our members are bedrocks of the community we live in, and it is an honor to help them achieve their financial goals. Our members' financial success often translates directly to the vibrancy of our broader community," said Brian Davis, director, marketing, at Patelco Credit Union. "When Alkami extended us the opportunity to highlight the story of one of our members, we were eager to participate and represent the relationship between Patelco's team members and members that exists at community financial institutions."
The Community Banking Stories project stemmed from Alkami's heartfelt salute to the regional community banks and credit unions that tirelessly support account holders through their financial journeys. Alkami is proud to deliver the digital sales and service platform regional community banks and credit unions rely upon to attract, serve, and retain their account holders.
"We're grateful to our partner Alkami for showcasing lifelong member Gabrielle Martin and the Connexus team," said Chad Rogers, executive vice president and chief operating officer. "The personal journey told through this video encapsulates our commitment to providing exceptional experiences and fostering prosperity for those we serve."
This campaign builds upon the social media campaign that launched at last year's Alkami Co:lab, where Alkami unveiled 'To My Jelly Bean,' a video dedicated to how community banks are a part of every milestone in an account holder's life. That campaign was marked using the hashtag #AllOfLifesMoments.
"Regional and community financial institutions are pivotal at the life junctures of their account holders, as we aimed to highlight with this campaign," said Alex Shootman, chief executive officer at Alkami. "Alkami is honored to work alongside these bankers, collaborating with them on technology and innovation so they can continue delivering exceptional service and build long-term relationships with their account holders."
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Kristen Mahlmann has been promoted to chief financial officer for Redwood Credit Union. In her new role, Mahlmann will lead the company’s accounting and finance operations, employee relations, educational development, and employee engagement teams, and oversee strategy for the organization. In addition, the North Bay Business Journal recently included Mahlmann in their Influential Women Awards for 2024, recognizing her as an outstanding local professional who demonstrates exemplary leadership and community involvement.
Mahlmann joined RCU in 2019 as senior vice president of accounting and finance. In 2023 she was promoted to senior vice president of people and strategy, for leading the planning and execution of RCU’s corporate strategies, as well as overseeing employee relations and engagement functions, including human resources, talent acquisition, training and development, and culture.
“Kristen has proven to be an innovative leader who adapts quickly to change, demonstrates tremendous resilience, and genuinely believes in the credit union philosophy of people helping people,” said Brett Martinez, President and CEO of RCU. “She’s had a significant positive impact on our team and our strategies, and I’m confident she will excel in her new role.”
Mahlmann earned an MBA from the University of California, Los Angeles Anderson School of Management, and graduated with high honors from Western CUNA Management School, an intensive credit union industry management curriculum.
Ron Felder, who previously held the role, will now become RCU’s Chief Lending Officer, leading the credit union’s lending areas, including mortgage and consumer lending, lending operations and systems, financial assistance, and loan servicing.
]]>The Defense Credit Union Council (DCUC) provides the following statement in support of the Department of Veteran Affairs (VA) announcement to issue a temporary local variance for charges related to real estate broker or agent (buyer broker) compensation.
“DCUC commends the VA for making this important decision,” said Anthony Hernandez, DCUC president/CEO. “This variance will provide deserving service members and veterans better opportunities to use their VA benefits when purchasing a home.”
The VA published its announcement on June 11, 2024, stating:
“[The] VA regulates fees and charges that may be made against or paid by a Veteran who is using the VA-guaranteed home loan benefit. While VA’s regulation specifies that, generally, a Veteran cannot pay for real estate brokerage charges, the Under Secretary for Benefits (USB) may authorize, in advance, charges that are appropriate for Veterans to pay as proper local variances. Through this Circular, VA is announcing a temporary local variance that will allow Veterans to pay for certain buyer-broker charges. The USB has determined this temporary variance is appropriate to ensure Veterans remain competitive buyers in the rapidly shifting real estate brokerage market. VA will develop a more permanent policy, through a new notice-and-comment rulemaking, as the real estate brokerage market restabilizes and new practices take hold.”
Per the VA, the temporary variance will go into effect on August 10, 2024.
]]>Apple Federal Credit Union and NextMark Credit Union are excited to announce a joint decision to merge. If approved, the combined credit union will have assets of more than $4.8 billion, more than 260,000 members and 25 branches throughout Northern Virginia.
The partnership is rooted in shared values and a strong commitment to member service. Both credit unions hold a deep dedication to their members, employees and communities, as well as a common vision for the future. “We are thrilled to be welcoming NextMark into the Apple team. They are a financially sound credit union with a long history of exceptional service to our mutual community”, said Andy Grimm, Apple’s President/CEO. “The combination of both credit unions will provide scale and a powerful synergy that benefits the members of both institutions.”
Joe Thomas, President/CEO of NextMark, agreed. "We are excited about the opportunity to merge with Apple,” Thomas said. “Our members will gain access to more than 20 new branch locations, and an expanded products suite, including business banking, and wealth management and insurances services. We are strengthening our commitment and value to members, employees, and the communities we serve.”
Following the anticipated November 2024 merger, the combined Credit Union will do business as Apple Federal Credit Union. Andy Grimm will continue as Apple’s President/CEO; Joe Thomas will join Apple in a strategic advisory role as Executive President.
As member-owned cooperatives, and under the guidelines of the National Credit Union Association, the merger is contingent upon both NCUA and NextMark’s member approval. The merger is set to be finalized before the end of 2024. As the merger process moves forward, both credit unions will provide information to their respective memberships via their websites (www.applefcu.org and www.nextmarkcu.org), and other applicable communication channels.
]]>Vizo Financial’s annual Hot Dog Eating Contest for Children’s Miracle Network (CMN) Hospitals is returning this summer on July 18, 2024. This year’s event comes with a nostalgic ‘90s theme, credit union sponsorship and contestant opportunities, as well as an appearance by a very special Miracle Family.
Over the past 11 years, Vizo Financial’s Hot Dog Eating Contest has hosted over 86 contestants, seen more than 200 hot dogs consumed, been backed by 187 credit union and organization sponsors and raised approximately $58,000 for CMN Hospitals at Penn State Health Children’s Hospital in Hershey, Pa.
The contest, which will once again be livestreamed as a virtual event, is set to welcome credit unions and their employees all across the nation. Together, the goal is to raise money, awareness and support for much-needed equipment, treatment programs and other items that contribute to a better experience for the young patients and families of CMN Hospitals.
“The level of excitement we at Vizo Financial and the credit unions in our communities have for the Hot Dog Eating Contest after more than a decade is remarkable and demonstrates just how much CMN Hospitals and the idea of people helping people mean to our movement,” said Erin Doan, VP of administration for Vizo Financial. “We’re gearing up to welcome all participants – sponsors, contestants, Miracle families and supporters – for another year of fun and celebration for an organization that does so much for children in one of our local areas. To stay in tune with our ‘90s theme, it’s going to be ‘totally awesome!’”
Three prizes will be awarded during the contest:
· The Top Dog: This prize will be awarded to the contestant who can consume the greatest number of hot dogs in five minutes.
· Hot Diggity Dog: This prize will be awarded to the contestant who shows the most spirit for the contest.
· Rollin' In The Dough: This prize will be awarded to the contestant who raises the most money for CMN Hospitals at Penn State Health Children’s Hospital.
In addition, the contest will feature three sponsorship levels:
· Frankfurter: This $50 sponsorship is original to the contest.
· All the Fixin’s: This $100 sponsorship was added in 2019 and features even more perks than the Frankfurter level.
· The Ultimate Dog: This special $200 sponsorship is the top-tier package and offers an exclusive sponsor GIF and social media spotlight.
More details about becoming a sponsor and/or contestant for the event, donating to CMN Hospitals and watching the livestream on July 18 can be found on the event registration site, at www.vfccu.org or by watching the video below!
You can also follow the event and all the hype leading up to it on Vizo Financial’s LinkedIn, X and Instagram pages using hashtags #VizoHotDogEatingContest24 and #AllThatAndABunchOfHotDogs.
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Understanding organisms and issues in the water shed, starting a market for 3rd grade entrepreneurs, creating a folk art program and launching a solar desalination project are just some of the school projects receiving funding from North Island Credit Union Foundation through its Spring 2024 Teacher Grant program.
As part of its commitment to help educators create innovative learning opportunities for their students, the Foundation has provided 10 grants of $500each to underwrite class projects in San Diego county. The credit union grants will fund a diverse range of programs illustrating the creativity and commitment teachers bring to their classrooms and communities.
"Supporting education is a key focus of North Island Credit Union Foundation's mission and we're excited to support these teachers as they work to engage and inspire their students in new and creative ways," said North Island Credit Union Foundation President Marvel Ford. "We hope these grants encourage our local educators to pursue innovative projects that spark a new passion in their students, which can make a life-long difference."
The Spring 2024 North Island Credit Union Foundation Teacher Grant recipients include:
Photos of all recipients can be foundhere.
Since the creation of the program in 2012, North IslandCredit Union and its Foundation have awarded $195,000 in teacher grants to support innovative learning projects. Up to 20 grants are awarded bi-annually in the spring and fall. Any full-time classroom teacher in San Diego, Riverside, Los Angeles, Orange, San Bernardino and Ventura County can apply for a grant for a program that has clearly defined learning objectives tied to students' academic needs, displays creativity in education, and targets a significant number of students.
]]>Teachers Federal Credit Union is excited to announce the upcoming opening of its newest branch in The Shops at SunVet in Holbrook, New York. Set to open in 2025 as part of the highly anticipated redevelopment of the existing SunVet Mall shopping center, this will be the newest branch Teachers Federal Credit Union will open since expanding its branch presence to Florida last year.
The SunVet Mall, once a landmark in the Holbrook community, is being transformed into a vibrant 168,000-square-foot open-air shopping center, The Shops at SunVet. This major revitalization project will feature an array of retail and dining options anchored by a new Whole Foods Market. The modernized center aims to provide a dynamic and enjoyable shopping experience for the local community and visitors alike.
“We are thrilled to expand our presence on Long Island and be a part of this exciting new development aimed at revitalizing the Holbrook area,” said Brad Calhoun, President and CEO of Teachers Federal Credit Union. “Selecting The Shops at SunVet for our next branch location underscores our commitment to strategic growth and providing our members with increased convenience and flexibility as they partner with Teachers Federal Credit Union on their financial journeys.”
The new Teachers branch will feature a welcoming and innovative design and provide a full suite of financial services, including personal and business banking, mortgages, auto loans, and financial planning. Members will continue to benefit from the credit union’s commitment to exceptional service, competitive rates, as well as tools and resources needed to make informed financial decisions.
“Opening our next branch at The Shops at SunVet aligns with our commitment to enhancing the financial well-being of our members and supporting the communities we serve,” added Calhoun. “We are excited to continue to share the value of a Teachers Federal Credit Union membership with more people in New York and across the country.”
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Creating a spoken word poetry program, starting a chick hatching science project, printing a school/student newspaper and planting a school vegetable garden are just some of the school projects receiving funding from California Credit Union Foundation through its Spring 2024 Teacher Grant program.
As part of its commitment to help educators create innovative learning opportunities for their students, the Foundation has provided 10 grants of $500 each to underwrite class projects in Los Angeles and Ventura counties. The credit union grants will fund a diverse range of programs illustrating the creativity and commitment teachers bring to their classrooms and communities.
“Supporting education is a key focus of California Credit Union Foundation’s mission and we’re excited to support these teachers as they work to engage and inspire their students in new and creative ways,” said California Credit Union Foundation President Marvel Ford. “We hope these grants encourage our local educators to pursue innovative projects that spark a new passion in their students, which can make a life-long difference.”
The Spring 2024 California Credit Union Foundation Teacher Grant recipients include:
Since the creation of the program in 2012, California Credit Union and its Foundation have awarded $195,000 in teacher grants to support innovative learning projects. Up to 20 grants are awarded bi-annually in the spring and fall. Any full-time classroom teacher in Los Angeles, San Diego, Orange, Riverside, San Bernardino and Ventura County can apply for a grant for a program that has clearly defined learning objectives tied to students’ academic needs, displays creativity in education, and targets a significant number of students.
]]>Rule would remove as much as $49 billion of medical debts that unjustly lowers credit scores for 15 million Americans
The Consumer Financial Protection Bureau (CFPB) today proposed a rule that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay. The proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information. The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices.
"The CFPB is seeking to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they do not owe,” said CFPB Director Rohit Chopra. "Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans."
In 2003, Congress restricted lenders from obtaining or using medical information, including information about debts, through the Fair and Accurate Credit Transactions Act. However, federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions.
The CFPB is proposing to close the regulatory loophole that has kept vast amounts of medical debt information in the credit reporting system. The proposed rule would help ensure that medical information does not unjustly damage credit scores, and would help keep debt collectors from coercing payments for inaccurate or false medical bills.
The CFPB’s research reveals that a medical bill on a person’s credit report is not a good predicter of whether they will repay a loan. In fact, the CFPB’s analysis shows that medical debts penalize consumers by making underwriting decisions less accurate and leading to thousands of denied applications on mortgages that consumers would repay. Since these are loans people will repay, the CFPB expects lenders will also benefit from improved underwriting and increased volume of safe loan approvals. In terms of mortgages, the CFPB expects the proposed rule would lead to the approval of approximately 22,000 additional, safe mortgages every year.
In December 2014, the CFPB released a report showing that medical debts provide less predictive value to lenders than other debts on credit reports. Then in March 2022, the CFPB released a report estimating that medical bills made up $88 billion of reported debts on credit reports. In that report, the CFPB announced that it would assess whether credit reports should include data on unpaid medical bills.
Since the March 2022 report, the three nationwide credit reporting conglomerates – Equifax, Experian, and TransUnion – announced that they would take many of those bills off credit reports, and FICO and VantageScore, the two major credit scoring companies, have decreased the degree to which medical bills impact a consumer’s score.
Despite these voluntary industry changes, 15 million Americans still have $49 billion in outstanding medical bills in collections appearing in the credit reporting system. The complex nature of medical billing, insurance coverage and reimbursement, and collections means that medical debts that continue to be reported are often inaccurate or inflated. Additionally, the changes by FICO and VantageScore have not eliminated the credit score difference between people with and without medical debt on their credit reports. We expect that Americans with medical debt on their credit reports will see their credit scores rise by 20 points, on average, if today’s proposed rule is finalized.
Under the current system, debt collectors improperly use the credit reporting system to coerce people to pay debts they may not owe. Many debt collectors engage in a practice known as “debt parking,” where they purchase medical debt then place it on credit reports, often without the consumer’s knowledge. When consumers apply for credit, they may discover for the first time that a medical bill is hindering their ability to get a loan. Consumers may then feel forced to pay the medical bill in order to improve their credit score and be approved for a loan, regardless of the debt’s validity.
Specifically, the proposed rule, if finalized would:
Eliminate the special medical debt exception: The proposed rule would remove the exception that broadly permits lenders to obtain and use information about medical debt to make credit eligibility determinations. Lenders would continue to be able to consider medical information related to disability income and similar benefits, as well as medical information relevant to the purpose of the loan, so long as certain conditions are met.
Establish guardrails for credit reporting companies: The proposed rule would prohibit credit reporting companies from including medical debt on credit reports sent to creditors when creditors are prohibited from considering it.
Ban repossession of medical devices: The proposed rule would prohibit lenders from taking medical devices as collateral for a loan, and bans lenders from repossessing medical devices, like wheelchairs or prosthetic limbs, if people are unable to repay the loan.
The CFPB began today’s rulemaking in September 2023 with the goals of ending coercive debt collection practices and limiting the role of medical debt in the credit reporting system. The CFPB additionally published in 2022 a report describing the extensive and debilitating effects of medical debt along with a bulletin on the No Surprises Act to remind credit reporting companies and debt collectors of their legal responsibilities under that legislation.
Comments must be received on or before August 12, 2024.
Learn more about Credit Reporting Requirements and the CFPB’s work on medical debt.
Consumers can submit credit reporting complaints, or complaints about financial products or services, by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know towhistleblower@cfpb.gov.
]]>This suite of four features prevents fraud loss before it reaches the FI and leverages AI, automating the check investigation process for banks and credit unions.
Unit21 announced the launch of its advanced Check Fraud Prevention and Investigation features during this week’s American Banking Association’s (ABA) Risk and Compliance conference. This new suite of tools addresses the rising threat of check fraud, which causes increased financial losses across the banking industry each year.
In fact, according to a recent Thomson Reuters report, check fraud accounted for 20% of all SARs filing amounting to nearly 670,000 check fraud SARs filed by FIs in 2023.
“Check fraud is a growing challenge for banks and credit unions, and the traditional detection methods are no longer sufficient,” said Ian Macallister, COO at Unit21. “Our new Check Fraud Prevention and Investigation features empower financial institutions to stay ahead of fraudsters by automating and centralizing the fraud detection process. This protects their bottom line and enhances the security and trust of their customers.”
Unit21’s innovative platform offers a complete view of check-related transactions and activities that lower fraud losses, enhance customer protection, and dramatically reduce investigation time. By integrating advanced AI techniques, image analysis, and dark web monitoring, the new features allow FIs to proactively find and stop fraud loss before it enters deposit channels while also automating the verification process of checks within the institution.
The new features include:
Dark Web Monitoring: By monitoring dark web activity and suspicious communications on platforms known for criminal activity, Unit21 can proactively alert financial institutions of stolen checks before they reach the bank or credit union.
Check Fraud Rule Templates: FIs can implement flexible rules with no code within minutes at go-live, allowing for immediate protection against check fraud and a reduction in false positives.
Check Investigation Toolkit: Unit21 helps automate the investigation of suspicious checks by matching signature files and verifying digitally altered or washed checks resulting in a reduction of manual effort and human error, leading to quicker, more accurate identification of fraudulent activities.
AI Agent for Check Fraud Investigations: Fraud teams can work alerts and reduce false positives with clearer insight and action through AI-driven investigations, saving them time and resources.
“After turning on Unit21’s check fraud rules and alerting, specifically dark web monitoring, we caught and prevented $50,000 in potential check fraud from just the initial seven alerts. I was shocked at its quick success,” shares Jo Davenport, SVP Fraud Director, CFCI at Third Coast Bank. “Additionally, our customers greatly appreciate our proactive efforts; notifying them has not only enhanced their sense of security but also reinforced their trust in us to have their best interests at heart.”
Visit the Unit21 booth (#710) during the ABA Risk & Compliance Conference to learn more and see a live demo.
]]>Partnership helps credit unions strengthen identity verification and reduce account opening fraud
Member Driven Technologies (MDT) today announced a strategic partnership with Persona, the leading unified identity platform.
Persona empowers MDT’s credit union clients to adjust their identity verification flows in real time based on risk signals to convert more good users while deterring fraudsters. Clients can mix and match building blocks to design custom-branded end-to-end identity flows that convert more members, streamline operations, and fight fraud.
“As fraud continues to rise, investing in technology that helps safeguard our institution and members is a top priority. Persona embeds sophisticated identification validation into our workflows, adding an extra layer of security and helping reduce fraud – both via digital channels and in branch,” said Joseph Marchese, CEO of Hershey FCU. “This partnership with trusted partner MDT will allow us to integrate Persona’s capabilities even more seamlessly into the process, boosting efficiencies and strengthening our fight against fraud.”
“MDT has a proven reputation of providing credit unions with innovative fintech solutions and services that help support their business and members,” said Sasha Dobrolioubov, Head of Partnerships at Persona. “We are excited to offer our tools to their impressive client base, helping more credit unions collect, verify, understand, and orchestrate members’ identities for any use case.”
“With their deep compliance and fraud expertise, Persona has helped many organizations detect hard-to-catch fraud, banning bad actors permanently – something that has never been more important and needed,” said Larry Nichols, CEO and president of MDT. “We look forward to offering their identity verification solution to our credit union community, helping maximize conversions while minimizing fraud.”
]]>Credit union elevates digital banking experience, delivering member-requested functionality
Mahalo Banking today proudly announces its collaboration with MTC Federal Credit Union, headquartered in Greenville, S.C. With assets totaling $292M, MTC Federal Credit Union has selected Mahalo's leading online and mobile banking solution to roll out member-centric features, enriching the credit union digital landscape.
In its search for a digital banking partner, MTC Federal Credit Union sought to enrich its member experience, streamline platform navigation and fulfill member-requested functionalities. Selecting Mahalo enables the credit union to create an enhanced member journey complete with expanded digital features and benefits to bolster member engagement. Mahalo’s platform will provide various self-service solutions, such as online account opening, Skip-a-Pay and Savings Jar options, allowing members to better manage their financial activity.
“Mahalo’s committed member and core-centric focus, alongside their dedication to continuous innovation including security and neurodiversity solutions set them apart from other providers,” said William H. Love Jr., President/CEO of MTC Federal Credit Union. “Mahalo is a true partner in our endeavor to provide a comprehensive digital banking experience for our members while attracting new members looking for a state-of-the-art platform with an outstanding user experience.”
Driven by industry veterans, Mahalo's digital banking platform boasts robust security solutions, including the recently introduced Credential Assurance Technology (CAT), which enables credit unions to prevent credential stuffing and safeguard sensitive member data. Additionally, Mahalo's technology features neurodiverse functionality, ensuring an inclusive experience for all members, regardless of cognitive distinctions.
Love Jr. added, “Along with its outstanding platform, Mahalo’s culture resonates with the MTC Federal Credit Union philosophy. Our mission is to exceed member expectations and deliver positive outcomes, and the Mahalo team shares this passion for exceptional member service. Selecting Mahalo ensures that we can fulfill our member commitment on all levels.”
“Our deep credit union ties enable our team to form strong bonds with the credit unions we serve, and that has been the case throughout our partnership with MTC Federal Credit Union,” said Denny Howell, COO of Mahalo. “We are proud to be part of their dedication to offering members a digital banking experience that exceeds expectations and aligns with their needs. Working with MTC Federal Credit Union allows us to deliver on what we do best, empowering the credit union with a member-centric platform that provides enhanced, user-friendly functionality and meets members where they are.”
]]>60 Social Impact Practitioners Attend This Year’s Event
The California and Nevada Credit Union Leagues successfully hosted the 2nd annual CU Impact forum at Kinecta Federal Credit Union's operations center in Manhattan Beach, CA from June 5-6 — an event dedicated to empowering credit unions in their mission to transform communities, measure progress, and amplify stories of social change.
View the 2024 CU Impact photo gallery here!
This year’s forum brought together 60 credit union social impact practitioners for a unique blend of exceptional sessions, collaborative workshops, and a community development field trip, with the “Unite for Change” theme resonating as participants shared their commitment to making a meaningful difference. It was a truly galvanizing experience, where collaborative energy and a shared passion for community transformation remained in focus.
“The diverse perspectives and innovative approaches shared at CU Impact were inspiring,” said Scott Simpson, president and CEO of the Leagues. “As credit union leaders across California and Nevada, we have a unique opportunity and responsibility to drive positive change. This forum once again equipped us with the tools and knowledge to do just that. We were honored attendees took time out of their schedules to come together once again and partner for our united social impact mission and vision.”
Actionable Insights and Renewed Determination
Attendees left with actionable insights and a renewed determination to make a lasting impact in their local communities for credit union members as the focus on engagement and measurement resonated deeply. The keynote presentations, data, and stories weren’t just narratives — they stood as a testament to the transformative power of credit unions in the lives of members.
This year, California Department of Financial Protection and Innovation (DFPI) Deputy Commissioner Purvi Patel was a special guest, observing first-hand how credit union leaders are increasingly threading social impact efforts into their local mission and efforts. Appointed by California Gov. Gavin Newsom in February 2023, Patel plays a key role in the state regulatory operations and compliance of credit unions chartered in California. She was formerly Self-Help FCU’s assistant general counsel since 2022 and part of Self-Help’s executive staff from 2016 to 2022.
Overall, social impact practitioners said CU Impact invigorated their efforts to effectively connect and collaborate, making their personal involvement at the local level with credit union members and the communities they serve that much more powerful. The annual forum provided a much-needed platform for open dialogue and collaboration.
“By uniting for change, we can leverage our collective strengths to address the unique challenges facing our communities and create a more equitable and sustainable future,” said Amanda Merz, vice president of impact and development for the Leagues. “We want to thank attendees for putting their best foot forward in our mutual responsibility to share best practices and improve the social impact of every credit union across California and Nevada.”
Social Impact at Kinecta’s Watts Branch (South Los Angeles)
Kicking off the event, attendees embarked on a guided excursion to Kinecta Federal Credit Union's Watts branch on Wednesday afternoon, gaining firsthand insights from credit unions dedicated to community-driven development. The trip included engaging discussions with community partners that fostered meaningful relationships, and it concluded with a networking dinner at the renowned Harold and Belle's restaurant — established in 1969 with white tablecloths, a Creole flare, and Southern hospitality.
The field trip to Kinecta’s Watts branch was also a powerful reminder of the benefits that community-focused initiatives can have. The credit union opened this branch in a historic community in South Los Angeles last year. The Watts area has a culturally rich past, exhibiting a long-standing legacy of contributing to nationally recognized arts and culture.
With the support of its many dedicated community organizations, Watts is undergoing a revitalization that has brought prominence back to this historic district — with Kinecta also playing an important role in these efforts. CU Impact attendees said it was a privilege to learn from Kinecta practitioners’ experiences as they connected with other social impact leaders who are equally dedicated to making a difference.
“Watts is a vibrant, historically rich community in Los Angeles,” said Latrice McGlothin, executive director of the Kinecta Community Foundation. “Early in the planning stages for the Watts location, we had the opportunity to leverage our long-standing partnerships in the area, which provided honest advice, clear direction and engaging support. These important conversations helped build awareness and foster immediate connections with community members.”
Forum Highlights: Growth, Development, & Impact
On Thursday, a diverse range of extraordinary sessions dove into critical topics shaping the future of social impact in credit unions. In “The Art of Impact Storytelling,” participants uncovered the power of storytelling to amplify their credit union's brand identity and connect with members who shared their values. They learned how to articulate brand values, bridge the gap between mission and audience, and utilize various mediums for amplifying their footprint and presence.
Inclusiv Network’s update on the U.S. Environmental Protection Agency’s (EPA) funding for green lending helped leaders explore EPA funding programs and strategies to support energy-lending reduction initiatives for members and environmental practices within credit unions. Insights into successful projects and their impact on reducing greenhouse gas emissions were shared.
An important housing session also looked at how regional housing programs can empower members toward generational wealth. Attendees discovered ways to expand access to affordable housing through local partnerships and actionable steps.
Participants also learned the importance of a clear mission statement and data-driven measurement in driving sustainable community impact. Strategies for developing robust measurement frameworks to track progress and outcomes were shared, concluding with an “Impact Power Hour” that had attendees cross-collaborating and sharing newly generated ideas to take back to their credit unions.
The Leagues are deeply grateful for the passion and dedication of every credit union professional who joined their peers at CU Impact! Their commitment to building stronger and more equitable communities is truly inspiring.
Two Days of Speakers and Impact
Presentations and discussions included (but were not limited to) the following speakers:
Purvi Patel, deputy commissioner of credit unions for California’s Department of Financial Protection and Innovation (DFPI).
Dora Beyer, director of community development for Excite Credit Union.
Latrice McGlothin, executive director of Kinecta Community Foundation.
Becca Whitman, founder and principal consultant for Guide & Give.
Matthew Stratford, marketing manager of Cnote.
Pablo DeFilippi, executive vice president for Inclusiv Network.
Erica Taylor, senior vice president of community impact and public relations for Golden 1 CU.
Eric Johnson, marketing and communications manager for California Housing Finance Agency.
Amanda Merz, vice president of impact and development for the California and Nevada Credit Union Leagues.
Diana Cervantes, vice president of social impact for SCE CU.
Kelly Gear, senior vice president and chief strategy officer for FHLBank San Francisco.
Damian Alarcon, government relations and social impact director for Travis CU.
Brice Yocum, CEO Tucoemas FCU.
The hosts of this year’s conference would like to thank all CU Impact sponsors! They include:
Presenting Sponsor: VISA.
Evening Event Sponsor: Origence.
Contributing Sponsors: The Center for Senior Benefits and TruStage.
Supporting Sponsors: Your Credit Union Partner and AMF Media Group (an Armanino company).
Business North Carolina magazine has announced that Coastal Credit Union has been named one of its 2024 North Carolina Best Employers. This is the seventh time that Coastal has won the award over the past eight years, and it marks the tenth year in a row that the credit union has earned at least one best workplace award.
“It’s great to be consistently recognized as one of the top employers in North Carolina, an amazing state with plenty of great companies,” said Tyler Grodi, Coastal’s President and CEO. He added, “For Coastal, success is never about the trophies; it’s always about our people. Our strategy, and our commitment, is to develop an awesome, intentional culture that will help us attract and retain great employees that will help the credit union, our members, and our communities to succeed together.”
The Best Employers in North Carolina is a survey and awards program dedicated to identifying and recognizing the state’s best employers. Businesses and their employees are polled on dozens of topics, from recruiting practices to recognition programs and those companies selected are recognized in the June issue of Business North Carolina.
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DeKalb Chamber of Commerce CEO and President Frankie Atwater, Sr. and Chamblee Mayor Brian K. Mock joined Georgia United Credit Union for a grand opening and ribbon cutting ceremony on June 7 celebrating the credit union’s new Chamblee branch at bustling Chamblee Plaza.
“We are extremely excited to be in Chamblee and in this community,” said Georgia United Chief Experience Officer Todd Lambright. “Cutting this ribbon today symbolizes growth not just for Georgia United but also this community. We are proud to be a part of it, we are proud to be here and to represent our members here – and our potential new members.”
The 1,400-square-foot storefront branch, nestled between Publix and Einstein Bros. Bagels, had a soft opening on March 13. It is more compact than the typical Georgia United branch’s footprint but is a full-service, one-stop-shop for members, featuring two state-of-the-art ATM+ terminals inside and one outside. The exterior ATM + station provides members 24/7 access to their finances – extending banking hours beyond the physical branch, allowing access to in-branch services such as depositing cash, withdrawing cash in multiple denominations or making deposits even when the doors are locked.
“This branch is what we deem a micro-branch,” said Lambright. “If you walk in you can see it’s small, but they say dynamite comes in small packages.”
The Chamblee facility incorporates contemporary design and layout elements of the organization’s branch transformation strategic program that is redefining the banking experience for members. Leveraging the latest technology, Georgia United continues to deliver its renowned personalized service.
The new branch is a successor of sorts to the former North Atlanta branch on Tilly Mill Road, approximately 2.3 miles away, and Mayor Mock is glad Georgia United chose to serve members in the area by operating in Chamblee.
“I try not to miss a ribbon cutting, and it’s never for the photo op, it’s for the genuineness of the fact that we have a new business opening in the city,” said Mock. “It means the city is going in the right direction. We are doing some good things here and this area is really growing. And we are proud to have Georgia United part of our community.”
Georgia United is committed to building strong community ties in the Chamblee area, including participating in and sponsoring local community events, such as the inaugural Chamblee Art Fest in April and March’s Cherry Blossom Festival and 5K in neighboring Brookhaven.
]]>Premier Members Credit Union Opens 3rd branch in Westminster
Premier Members Credit Union opened their third Westminster location and 19th branch in the state.
To celebrate, a ribbon cutting ceremony was held on June 7th with two separate chambers. Jamie Chavez, Westminster Chamber of Commerce, and Pat Monacelli, Broomfield Chamber of Commerce
“We are excited to introduce this new technology to our Premier Members. It allows us more time to spend getting to know our members and building relationships, which is at the heart of being Premier,” Amanda Kutzler, SVP Consumer Retail.
Neenan Archistruction, a leading design-build firm based in Colorado, helped celebrate the grand opening of its latest renovation project with the Premier Members Credit Union. This renovation was a catalyst for moving operations to a location central to the credit union’s members in the northern Denver metro area of Colorado.
The 1,669-square-foot redesigned space is the first within PMCU’s network to feature a fully functional electronic teller system, revolutionizing the banking experience for its clientele.
Premier Members has extensive community commitments in Westminster include high-level sponsorships for the City’s Summer Block Party and Westy Fest, the Chairman’s Sponsorship level of the Westminster Chamber, sponsorships, a scholarship and Money 360 collaborations with the Westminster Public Schools Foundation and the Gold Elite Sponsorship with Hyland Hills. In addition, we have an employee on the finance committee at Growing Home.
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