July 2018 News.Cuna.Org

JULY 2018 NEWS.CUNA.ORG

What Matters Most When Disaster Strikes

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FEATURES 22 Disaster Lessons Learned If you wanted a learning lab for credit union disaster recovery, 2017 and early 2018 provided the “perfect storm” of devastating events. Hurricanes, floods, and wildfires provided vital lessons about what works—and what matters—when credit unions come to the aid of their staff, members, and communities.

28 Build a Better Team Employees committed to working together are a critical component of a thriving credit union. The first step in team-building is to define the credit union’s strategy. Only when you have determined what you want to accomplish can you translate that to job functions.

34 Road Rules for Directors As financial institution governance becomes more complex, the rules of the road become more detailed, strategically demanding, and uncertain. Seven rules can put boards on the road to success.

ABOUT THE COVER Sean Kaley, chief operations officer for Kauai Government EFCU (back), and two community volunteers load gas-powered water pumps for the town of Haena, Hawaii, which experienced extreme flooding following historic rainfalls. (Photo courtesy of KGEFCU.)

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Pg_5_LSC.indd 1 6/1/18 2:00 PM July 2018

LEADING EDGE

TWENTYFOUR/SEVEN

12 Want to make some changes? Try “tinkering.”

14 PRESIDENT’S PERSPECTIVE 46 Know the implications of serving—or not CUNA’s new headquarters promotes our serving—marijuana-related businesses. values—and results in substantial cost savings.

48 TOOLS OF THE TRADE 16 TRENDLINES Professional development for new leaders. Strong employment bodes well for loan growth. WORLDWIDE 18 SPOTLIGHT Meet marketing’s “Rising Star,” Chelsea Oliver.

20 ADVANCING THE VISION What’s new with the America’s Credit Union Museum?

COMPLIANCE MATTERS

50 World Council visit to Kenya showcases credit unions’ impact.

54 BRANCHING OUT Credit unions A to Z.

8 POSTAL INFORMATION 40 CFPB finalizes amendments to fix the TRID 10 ON MY MIND “black hole.” 53 ADVERTISING INDEX 53 MARKETPLACE 42 CAN YOU SPOT DISASTER-RELATED FRAUD? Agencies offer guidance to identify common fraud schemes.

44 LENDING COMPLIANCE Preferential loan rates for employees.

6 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org RECRUIT, REWARD AND RETAIN EXECUTIVE TALENT

59% of companies report employee retention as their top concern. 1 Give them an additional reason to stay—with CUNA Mutual Group’s non-qualiﬁ ed deferred compensation (NQDC) plans. Our team of Executive Beneﬁ ts Specialists will work with you to develop customized plans to help retain the individuals vital to your credit union’s success. Rely on a leadership continuity solution that’s used by more than 1,200 credit unions, and make a proven investment in one of your most valuable resources—your leaders.2 To learn more about NQDC, download our e-book at cunamutual.com/execben-ebook, or call to schedule a no-cost consultation at 800.356.2644, ext. 665.8576 today.

1 2018 Compensation Best Practices Report, PayScale 2 CUNA Mutual Group Internal Data, 12/31/17. Proprietary insurance is underwritten by CMFG Life Insurance Company. Proprietary and brokered insurance is sold by CUNA Mutual Insurance Agency, Inc., a wholly owned subsidiary. This insurance is not a deposit and is not federally insured or guaranteed by your credit union. Representatives are registered through, and securities are sold through, CUNA Brokerage Services, Inc. (CBSI), member, FINRA/SIPC, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 866.512.6109. Insurance and annuity products are sold through CMFG Life Insurance Company. Non-deposit investment products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the credit union. EXBEN-2132552.1-0518-0620 © CUNA Mutual Group, 2018 All Rights Reserved. news.cuna.org VISIT OUR WEBSITE DURING JULY FOR THESE ONLINE EXCLUSIVES.

2017: An ‘incredibly scary’ year When you work for a business continuity and disaster recovery company, you encounter substantial devastation, says Scott Teel, vice president of organi- EXECUTIVE COMMITTEE

zational development for Agility Recovery Solutions, MAURICE SMITH • chairman, Raleigh, N.C.

a CUNA Strategic Services alliance provider. But BRETT MARTINEZ • vice chairman, Santa Rosa, Calif.

2017 stands out as a particularly difficult year. TROY STANG • secretary, Seatac, Wash. Many credit union leaders had to fight to maintain branch operations through BRAD GREEN • treasurer, Sheffield, Ala. flooding, evacuation orders, roadblocks, or damaged infrastructure. “Many of these organizations never considered themselves in the threat area for flooding or wildfire TONY BUDET • member-at-large, Austin, Texas evacuations, yet found themselves either directly affected or interrupted,” Teel says. JIM NUSSLE • president/CEO, Washington D.C./Madison, Wis. PAT JURY • immediate past chairman, Des Moines, Iowa

Hawaii credit union takes the lead in disaster response

An employee from Kauai (Hawaii) Government DIRECTORS

Employees Federal Credit Union was assisting her DALLAS BERGL Ind.; PAT DRENNEN Iowa community in the wake of a 100-year flood when SCOTT EARL Colo.; CHARLES ELLIOTT Miss. a woman wearing a neck brace stopped her pickup truck on the street, hopped out, and wrapped her TERESA FREEBORN Calif.; GARY FURTADO R.I. in a fierce hug as she began crying. Earlier, the LISA GINTER Kan.; ROGER HEACOCK S.D. credit union had supplied gasoline for a boat that TOM KANE Ill.; DEBIE KEESEE Wash. carried the woman to safety after the flood. And she couldn’t wait any longer to MARIA LAVELLE Pa.; MARIA MARTINEZ Texas say “thank you.” PATRICK PIERCE Minn.; FRED ROBINSON Tenn. JOHN SACKETT Wis.; STEPHANIE SIEVERS La. Unlock a rock star mindset SCOTT SULLIVAN Neb.; JOE THOMAS Va.

For rock stars, no detail is too small because every SCOTT WOODS S.C. moment is a performance, says Mark Schulman, a drummer who has backed numerous perform- ers, including Billy Idol, Cher, Foreigner, and P!nk. Adopting a rock star mindset “boosts your perfor- LEADERSHIP

mance and gives you swagger,” he says. JIM NUSSLE • president/CEO

JILL TOMALIN • chief operating officer

What does it take to be a CFO? MOLLIE BELL • chief engagement officer

The road to the chief financial officer (CFO) chair isn’t paved with numbers, it’s RYAN DONOVAN • chief advocacy officer

built on relationships, according to a panel of experts who addressed the 2018 TODD SPICZENSKI • chief products & services officer CUNA CFO Council Conference in Austin, Texas. Some CFOs say they’ve forged their success with their ability to network.

Credit union people. Credit union ideas. POSTAL INFORMATION

Credit Union Magazine (ISSN 0011-1066) is published monthly for $80 per year by Credit Union National Association, 5710 Mineral Point Road, Madison, THE CUNA NEWS PODCAST WI 53705. (Multiple-copy and multiyear discounts available.) Periodical postage paid at Madison, Wis., Subscribe on iTunes, Google Play, and additional mailing office. Copyright 2018 by Credit Union National Association. Photocopying is illegal and or Stitcher Radio. Or tune in at unethical. POSTMASTER: Send address changes to Credit Union Magazine subscription department, P.O. Box news.cuna.org/podcasts 461, Annapolis Junction, MD 20701-0461. Single issues are available; call 800-348-3646.

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Thankful to Be Alive MANAGEMENT ANN HAYES PETERSON vice president/editor-in-chief ‘The entire community put its arms around this island.’ 608-231-4211 • [email protected]

EDITORIAL STAFF BILL MERRICK deputy editor Credit unions can often 608-231-4076 • [email protected] sum up disaster preparedness and MICHELLE WILLITS deputy editor recovery in just three words: people 608-231-4067 • [email protected] JENNIFER WOLDT helping people. senior editor 608-231-4290 • [email protected] When historic floods hit the island RON JOOSS senior editor of Kauai this spring, Monica Belz 608-231-4321 • [email protected] CRAIG SAUER and her team did what they normal- senior editor ly do: find a way to come to the aid 608-231-4918 • [email protected] ALEX MCVEIGH of their members and community. senior editor Belz is president/CEO of Kauai 202-508-6767 • [email protected] Government Employees Federal DESIGN & PRODUCTION BEN TENORIO • digital media design specialist Credit Union (KGEFCU). When CARRIE DOYLE • graphic designer she contacted us, the island’s entire ANN HAYES PETERSON, TREESA LANDRY • publishing specialist

north shore region was underwater, editor-in-chief ADVERTISING and roads were closed temporarily or @ JOE DAY apeterson cuna.coop vice president destroyed completely. The region will 608-231-5794 • [email protected] MICHELLE DOSHER be cut off for some time, she says. “We quickly mobilized a disaster 608-231-4006 • [email protected] LISA DUSHACK Luckily, Belz is a veteran of inter- relief loan and onsite branching 608-231-4220 • [email protected] national disaster relief work. She locations in the devastated areas,” Classified ads: THOMAS GERARD quickly identified supplies the $115 Belz says. To address members’ cash 608-231-4257 [email protected] million asset credit union could needs, Belz delivered funds immedi- fax 608-231-4263 gather and deliver to people in need. ately and brought debit cards the fol- EDITORIAL ADVISORY BOARD Gasoline to refuel boats and jet skis lowing day. Meanwhile, staff worked BRAD ASPGREN • American Airlines FCU, Fort Worth, Texas used in water rescues was critical. at an unprecedented pace opening SANDI CARANGI • Mercer County Community FCU, Hermitage, Pa. MICHELLE HUNTER • CU of Southern California, Anaheim In the immediate aftermath of the accounts and funding loans. KEVIN KESECKER • SECU, Linthicum, Md. floods, the KGEFCU team put the “It’s been exhausting and amazing STEVEN LANGLEY • Schools Financial CU, Sacramento, Calif. RICHARD S. MILLER • FeatherStone Planning and Consulting first boots on the ground. Armed at the same time,” she notes. PETER STEIN • Educators CU, Racine, Wis. with a “dry bag” filled with electron- KGEFCU’s social media channels

ic devices and forms, Belz traveled of Instagram, Facebook, and Twit- MAILING ADDRESS via boats and jet skis, and hiked and ter played a critical role in sharing CREDIT UNION MAGAZINE P.O. Box 431 swam to where people needed help requests for rescue as well as finan- Madison, WI 53701-0431 in areas cut off by the flood. cial needs. Along the way, KGEFCU SUBSCRIPTION SERVICE identified “digital bottlenecks” it’s SUBSCRIPTION DEPARTMENT P.O. Box 461, now working to erase. Annapolis Junction, MD 20701-046 In the midst of a disaster, Belz and 800-348-3646 her team are already recording les- Fax: 301-206-9789 sons learned and processes needing improvement. “I’ve received loads of hugs and tears, and heard story after story of people’s lives turned upside down. Subscribe Today Everyone is thankful to be alive,” Two easy ways to order Belz says, adding, “the entire com- your subscription to munity put its arms around this Credit Union Magazine: island.” u Call 800-348-3646 KGEFCU President/CEO Monica Belz delivers a LEARN MORE ABOUT KGEFCU RELIEF EFFORTS AT u Visit news.cuna.org/subscribe debit card to a member after historic flooding.

10 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org We Get It!

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Break Free and Tinker If you’ve ever felt the need to escape believe we have to follow but don’t those rules, has gone out of business. the daily grind—that human hamster really exist. “Staying safe is usually riskier,” wheel we call adulthood and work— We often follow those rules not Kotecki says. and make some changes in your life, because we want to but because we’ve u Be curious. Asking questions try tinkering. always done it that way, says Kotecki, makes you valuable to your credit “Sometimes to make a change you who spoke at the 2018 CUNA Young union. Look for rules at your must do something big or crazy,” Professionals Conference. workplace that don’t officially exist says Jason Kotecki, an author, artist, “Tinkering is like an escape hatch that you can break, and in the and “professional reminder-er.” “But for someone who feels like they’re process, make things a little better. most of the time, you just need to stuck,” Kotecki says. “Tinker, ask “Ask questions daily,” Kotecki says. practice the art of tinkering.” questions, and try things.” “Everything may not work, but it’s Kotecki says tinkering involves When tinkering, Kotecki says worth asking the question.” “repairing, adjusting, or working people should: Kotecki says it’s the little things with something in an unskilled or u Be willing to try. You won’t always that matter most; those moments experimental manner.” It’s also a way succeed on the first attempt, Kotecki when you help a member secure to break free from those rules we says, but even if you fail, you’re not a a loan for a new vehicle or assist a failure. That just makes you human. member who was locked out of their u Get real with risk. Take chances. mobile banking app because they When Netflix started, the company entered their password incorrectly took chances and broke two rules: too many times. That they must charge late fees and “Create little moments,” he says. they had to have a brick-and-mortar “Those are the things that end up location. Netflix has been successful, making the biggest difference in the Jason Kotecki while Blockbuster, which adhered to long run.”

Focus on Collaboration and Data Tom Davis, president/CEO of Trel- “And it’s about knowing when to Overheard lance, says there are three key fac- respond.” tors that will influence the credit He cites a recent comment from a ‘WHEN EMPLOYEES union landscape in the future: friend: “The pace of change has never OWNERSHIP 1. The importance of been this fast—and it will never be TRULY TAKE collaboration. Collaboration is this slow again.” OF THEIR ROLE AND THEIR crucial for business, too. “We want to 3. Data. Everyone wants more share ideas and the cost of learning,” data, but most don’t know what to DEVELOPMENT IT WILL he says.“CUSOs [credit union do with it, Davis says. ENHANCE THE TEAM.’ service organizations] are the key to “The answers are in the data, collaboration going forward.” but you need to know the right Ellen Davis, assistant vice president, human resources, 2. Vision. Ten years ago, no one questions,” he says. “Data analysis Gerber Federal Credit Union, predicted how smart phones would gives you the questions you never Fremont, Mich. change our lives. thought to ask. And we need results “But it’s not about the change, it’s from the questions that come from how we respond to it,” Davis says. the data.”

12 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Create a Culture for the 21st Century You’ve heard the advice: Organiza- changes you are in serious trouble,” groups or “squads.” tions need to act like technology Walsh says. “They will fight you “Companies are redesigning their start-ups. tooth and nail to prevent you from workspaces because they found that But what does that really mean? reinventing yourself.” their most disruptive, innovative “It’s not just about technology,” The ability to be energized by ideas were coming from small, futurist Mike Walsh told attendees ambiguity makes organizations agile, collaborative groups that were located at the 2018 CUNA CFO Council Walsh says. in one physical location,” Walsh says. Conference. “Small groups of people find better “Technology changes the hardware ways to get things done.” of your business,” he says. “You 3. Performance. Today’s most also need to change your software. efficient companies, big and small, Unless you can turn culture into your use data to drive performance, Walsh operating system, nothing will really says. change at all.” “If there’s some aspect of your Walsh says there are three elements culture that you desperately want to of the 21st-century credit union: Mike Walsh change, don’t tell people or print out 1. People. Organizations can no flyers and paste them to walls,” he longer can put a priority on hiring 2. Productivity. Working from says. “Start by collecting data. Because people who follow rules. home and telecommuting are no with data you can build a story for Instead, they must bring in longer considered ways to keep transformation.” employees who embrace change. employees happy and productive. Organizations can start by “If you bring in people who like Instead, organizations are identifying individual high achievers rules, your company will stop making redesigning their workspaces so and collecting data related to their mistakes. But as soon as the market employees can collaborate in small performance, Walsh says.

Bring Emotional Intelligence into the Workplace Emotional intelligence might not be ment that fosters emotional intel- Drama something we think about much, ligence makes organizations more results in but when we encounter someone functional and productive, says wasted money, with a lack of it, it can mess up Groover, an author, speaker, and Groover says. your day. serial entrepreneur. People with “Emotional intelligence is a “If you have more high-thriving emotional heightened sense of self aware- people in the workplace, they’re intelligence ness, where you become mindful going to get along better, they’re operate with Jen Groover of the thoughts you’re choosing, going to be more collaborative, greater intentions and less from the words you’re using, and the and they’re going to be healthier,” their own egos, Groover says. “They people you’re surrounding yourself says Groover, who addressed the help their colleagues and make bet- with because all of these things 2018 CUNA HR & Organizational ter choices for everyone.” contribute to your emotional state,” Development Council Conference. Jen Groover tells the CUNA News “You’re going to have an environ- HEAR MORE FROM GROOVER Podcast. ment that’s a lot more cohesive ON THE CUNA NEWS PODCAST Creating a workplace environ- with a lot less drama.” AT NEWS.CUNA.ORG/PODCASTS

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 13 PRESIDENT’S PERSPECTIVE

Learn to Leap Moving to a new location will save us $6 million over 10 years.

complicated, requiring significant collaboration, and we carefully laid planning, coordination, and time. out our new 22,000-square-foot And, after all, we accomplished office space on the third floor of a lot on behalf of credit unions at Skanska’s 99M development to not 601 Penn. People knew where to only increase but enhance staff’s find us. Our employees liked the daily interactions. office. In other words, we were Housed in a 234,000-square- comfortable. foot office building in the vibrant Now, I’m not saying if you’re Capitol Riverfront neighborhood, comfortable you should panic and D.C.’s fastest-growing area, our make a big change for the sake of new D.C. home is open, modern, change. But you might want to do and modular. a gut check and take a close look at With more than 20 rooms varying your priorities. There are a few reasons we in size, style, and purpose, the JIM NUSSLE, decided to make such a significant layout both facilitates collaboration CUNA president/CEO change, and they all revolve around and accommodates different work our ambition to be a future-focused styles. In the well-known fable, association. As the champion of The built-in technology gives us a frog drops into boiling water and the credit union movement, we the ability to better communicate quickly jumps out to safety. But have some big goals we want to and coordinate with our Madison, when the frog enters lukewarm accomplish for credit unions, and Wis., office. water, the amphibian relaxes, swim- a new office space in Washington, There are spaces throughout for ming lazily and never realizing, until D.C., is one piece of our plan to quick impromptu meetings and too late, that a fire rages beneath the meet them. focus rooms for heads-down work. pot and the temperature is steadily Staff can move between them based rising. on their needs and goals. They can The moral of the story: Never Sometimes the best even work from our rooftop, and get so comfortable that you don’t folks, let me tell you the view up recognize when it’s time for a move you can make there is breathtaking. You can see change. the Washington Monument. After 15 years at 601 Pennsylvania is to leap. The next time you’re in the D.C. Ave., we recently moved to a new area, stop by. I’d love to show you office in Washington, D.C. Our around. There is an energy and location at 99 M St. is only two Over the next 10 years, the vitality to both our new space and miles away, but it’s a bold step move will save us $6 million. neighborhood that reflects our toward meeting the future needs of These cost savings are not only movement. There is even a trapeze our members—not that this was an financially prudent, they help easy decision to make. fund strategic investments in our school a block from our office— Our distance from Capitol Hill increasingly sophisticated advocacy, which I interpreted as a good is the same, our access to power the development of credit union omen. unchanged, and we’ll remain solutions, and the growth of our We have so much we want to the only credit union trade national awareness initiative. do for America’s credit unions and organization with an office in the More than that, we wanted a their 110 million members, but we nation’s capital. space that reflects our culture and won’t get it done resting on our But moving your entire officeand promotes our values. laurels. Sometimes the best move staff is disruptive andlogistically One of our core values is you can make is to leap.

14 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Fast turnaround is our super power. And yours.

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Strong Employment Bodes Well for Loans Connecting the dots between unemployment rates and loan performance.

union delinquency rates are also employee expenses (i.e., salary and closely aligned. They tend to move benefits) as a percentage of assets in the same direction. This means since 2009 has increased slightly that as unemployment increases, for large and medium-sized credit credit unions see an increase in loan unions, although the increase for delinquency because unemployed medium-sized credit unions has been borrowers find it harder to make relatively modest. their payments on time. Despite the contraction in assets The opposite also holds true: that small credit unions have When there are fewer unemployed experienced since 2009, this ratio fell members, credit union loan for this group. This may be because delinquency rates fall. In the current smaller credit unions are under SAMIRA SALEM context, we expect delinquency rates significantly more operational stress to remain low. from higher costs associated with There’s been a lot of buzz Usually, a tightening labor meeting regulatory requirements, about the tightening labor market market means wages will increase as and they experience weaker earnings with the May unemployment level employers try to attract new workers relative to larger credit unions. falling to 3.8%—the lowest since and retain current staff who have They also don’t have many 2000—and the consistently healthy more employment options. But U.S. cost-saving options, so reducing pace of job creation over the last wage growth has been painfully slow. employee expenses may be one of year. Economists are puzzled by this the few levers they have to relieve Such developments have important development. They point to a host some of this pressure. In addition implications for credit union of factors that might be influencing to being slow, wage growth has also operations, including loan growth, been uneven. A recent report by the delinquency rates, payroll—even Economic Policy Institute confirmed credit unions’ ability to attract new The unemployment that the top income brackets are talent. Credit union loan growth and seeing some wage growth while unemployment rates tend to move in rate and credit middle-class wages are stagnating. the opposite directions. During the This report also found there are Great Recession of 2008-2009, for union delinquency still significant wage gaps based on example, unemployment increased gender and race: Even for wage while credit union loan growth rates are closely earners with relatively similar levels decreased. As the economy recovered of education, racial and gender and more people returned to work, aligned. disparities persist. consumer confidence, spending, and Wage growth challenges are demand picked up, and so did credit weak wage growth, including likely to continue. Yet, against this union loan growth. the increased use of noncompete backdrop, credit unions are doing a When more people work and have agreements in employment contracts, tremendous job of promoting greater more disposable income, demand lower levels of unionization, and economic opportunity and wage for goods and services increases, and slower productivity growth. At credit growth via their efforts to support demand for consumer and business unions, slow wage growth means higher education with student loans loans rises as well. We expect this overall payroll growth has been and through personal financial trend to continue to fuel strong loan modest, which is good news for education. growth over the next year or so. operating expense ratios. But slow SAMIRA SALEM is CUNA’s senior policy Not surprisingly, the wage growth may also depress credit analyst. Contact her at 608-231-4398 or at unemployment rate and credit union loan growth. Credit union [email protected].

16 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org HOW DO YOU DEFINE SUCCESS?

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Marketing’s New ‘Rising Star’

In 2015, Chelsea Oliver was a recent college graduate with no knowledge of credit unions. Earlier this year, the CUNA Marketing & Business Development Council honored her with its 2018 Rising Star Award, which recognizes rising professionals with up to two years of experience in the credit union industry. Oliver, marketing specialist for $49 million asset Corry (Pa.) Federal Credit Union, has made a big impact during her short tenure, overseeing a rebranding effort, website launch, and a redesign of marketing materials.

bought lunches for 25 random Q What’s your marketing people in a café. Last year we did philosophy? Empathy always a “supermarket sweep,” where comes first. You have to know the two of our members got to race person you’re serving, why they around a grocery store and fill up need what they need, and how to their carts for free. We also asked deliver that in the best way. members what their dreams were, Q How do you incorporate and we picked five responses and empathy in your marketing gave $100 to each member. We CHELSEA OLIVER efforts? It’s easier to do at a showed three of them getting credit union because people their prize on Facebook Live. a credit union. Getting this award helping people is in everything These are the most fun because proves to me what I’m capable we do. I like to focus on what a they’re hands-on, and you can of professionally—and I hope it credit union is, what we do, and see peoples’ reactions to the work proves to my marketing professors how we’re different. We’re always you’re doing. that I was paying attention. giving back to the community, How do you tackle big and Corry Federal is always there Q Q What advice would you projects when you have limited for the community. Empathy offer other young credit resources? comes into that by knowing our I don’t believe there union professionals? Don’t members and what they need, and are limited resources; there are be so cautious. I feel like, as a how to get them to live their best just resources you might not have generation, we’re kind of holding lives. considered yet. There’s always ourselves back because we don’t someone in your credit union, want to step on any toes or ask Q What’s your most effective either a fellow staff member or the wrong questions. You have social media outlet? We’re an actual member, who’s willing to put yourself out there and ask killing it on Facebook. Our to help with projects. Or there’s questions whether or not they members share just about all of always someone who’s willing sound dumb. Take on big projects our stuff and like what we post. I to give money to your cause. and go for it. The only thing don’t think that’s too common for You just need to know who to holding us back is ourselves. everyone. We’re in a small town, approach and how to approach so we have that advantage. them, and you’ll meet your goals. Q What’s the worst advice you’ve ever received? “Don’t Q Which of your projects Q What does winning the rock the boat.” I don’t know who make you proudest? The first Rising Star Award mean to said it, but I’ve heard that time project I put on: Credit Union you? I’m still processing that I after time: “Just do what you’re Week, where we focus on a even won. It’s crazy to me that in told.” That doesn’t sit well with specific small business or specific 2015 I didn’t even know what a me because I’m a person who likes members. The theme for our credit union was, and then a little change and likes to see things first Credit Union Week was over two years later I’m getting an happen. I’m always rocking the “people helping people,” and we award for the work I was doing at boat.

18 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Jul adpd M ADVANCING THE VISION

Museum Tells Our Story America’s Credit Union Museum uses the past to inspire today’s heroes.

Stephanie Smith, executive director of the America’s Credit Union Museum, doesn’t hesitate when asked to name her credit union hero. “My favorite histori- cal figures from the credit union movement are today’s torchbearers,” she says. Smith is proud of how the museum chronicles the history of America’s credit unions. “Sometimes it seems as if we’re inundated with negativity at every turn,” she says. “If we take the time to focus and listen to what’s going on in the movement, you discover quickly we’re surrounded by people just like those original pioneers. One job of the museum is to continue telling the story.” One way the museum will continue to tell that story is through the newly opened CUNA The CUNA Research Center (right) establishes a permanent home for the Research Center, housed in a America’s Credit Union Museum archives. CUNA was the lead sponsor of building next to the America’s the museum’s Legacy Capital Campaign to establish the center. Credit Union Museum in Manchester, N.H. It creates a virtual experience that allows where they’re easily accessible and credit union in the country through credit unions, consumers, media, available to visitors, both physically the leagues that we’re great partners lawmakers, regulators, and others and virtually.” with. That gives every credit union to delve into credit unions’ history. And that’s just the first phase of the opportunity to support the It connects to the museum via a construction. “During the second mission of the museum.” skywalk. phase, we will digitize everything While the museum’s official CUNA was the lead sponsor we have here,” Smith says. “The mission is to commemorate the site of the America’s Credit Union second phase will also include of America’s first credit union and Museum Legacy Capital Campaign renovating the current museum.” to educate visitors on the benefits to help ensure the preservation The museum is located on the of cooperative self-help efforts, of the credit union system’s rich site where America’s first credit Smith says it also strives to tell the history for future generations. union, St. Mary’s Bank, opened human side of the credit union CUNA contributed $1 million to its doors in 1908. True to credit story. the effort. union philosophy, the museum is a “We want you to come through Smith called the June 27 opening cooperative. the doors and be caught up in the of the center the beginning of “a “It is funded solely by donations different stories, and to connect new era” for the museum. “The from individuals, credit unions, and with the people who came through creation of the research center credit union partners,” Smith says. the movement before you,” Smith establishes a permanent place for “We just launched a sustaining says. “It’s through that knowledge our archives,” she says. “It allows us membership campaign that has that we better understand who we to bring them into a single space connected us with every single are and how we got there.”

20 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org

Staff from Kauai Government EFCU delivered Credit union and league staff collected and This Florida house was one of many gasoline and other supplies via boats and jet distributed supplies in the wake of Hurricane ravaged by flooding. skis to assist stranded members. Irma. Disaster Lessons Learned Darla Dernovsek

What works and what matters in disaster recovery.

If you wanted a learning lab for credit Keep employees afloat union disaster recovery, last year’s Credit union branches hit by wide-ranging disasters in hurricanes, floods, and wildfires 2017 were out of service from as little as a few hours to as much as two weeks or more. provided vital lessons about what In Beaumont, Texas, post-Hurricane Harvey rainfall works—and what matters—when credit topped 60 inches in five days. Mold quickly bloomed unions come to the aid of their staff, to make soaked houses uninhabitable. members, volunteers, and At $780 million asset Mobiloil Federal Credit communities. Union, 12 employees lost homes. Volunteers from the

22 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Redwood CU staff volunteer at the Redwood Empire Food Bank. Residents of the Oakmont Community in Santa Kauai Government EFCU took the lead Rosa, Calif., show their support for the North Bay in disaster response following historic Fire Relief Fund. flooding.

“Cajun Navy”—a group of Louisianans with boats who who lost homes. ferried people to safety in the wake of the storm—rescued u Temporary lodging for displaced employees and Shane Perkins, Mobiloil’s programming and development officials. manager, his pregnant wife, 18-month-old daughter, and u Temporary child care for employees while schools were two dogs from their flooded home. closed, with board members volunteering hands-on help. Perkins was among the 85 employees, out of a total u Industrial air purifiers and masks for employees to workforce of 175, who quickly returned to work to keep counter poor air quality. all branches and electronic services running. When one u Free onsite counseling and expanded employee branch developed mold, Mobiloil Federal leased a closed assistance program services. bank branch to replace it, President/CEO Bob Hamer says. u The ability for staff to pool surplus paid time off for If employees couldn’t reach their assigned branch, co-workers who lost homes. they shifted to another site. Supervisors kept schedules In a major disaster, conditions may feel “surreal,” says flexible while employees dealt with damaged homes and Mary Lou Carn, marketing and operations director at $150 rearranged lives. million asset Keys Federal Credit Union in Key West, Fla. All employees, including those who were absent, were The credit union was “ground zero for the landfall of paid for the first two weeks post-disaster without using Category 4 Hurricane Irma,” Carn says, with a mandatory paid time off. As flood waters receded, Mobiloil Federal 10-day evacuation affecting branches in Key West, Big gave each employee an extra $1,000 for unexpected Pine, and Marathon, Fla. expenses and rewarded outstanding staff efforts with Her family evacuated to South Carolina during another $500 to $1,000. Hurricane Irma in September 2017 because Florida hotels Hamer says paying employees throughout the disaster were full. Her children missed three weeks of school as cost a month’s worth of credit union earnings, but all everyday life was suspended and everyone worried about employees stayed. “That’s the real testament to their those who stayed behind. continued u resilience,” Hamer says.

Offer practical assistance At $4.5 billion asset Redwood Credit Union in Santa Rosa, Focus Calif., most employees were evacuated from their homes u Keep staff in mind when planning for potential during the North Bay fires in Sonoma, Napa, Mendocino, disasters. and Lake counties. Credit union systems and services were u spared even as 23 employees lost homes. Consider using a third-party texting app that sends messages when cellular networks are “We did a lot to immediately support our staff, officials, down. members, and community, and are continuing to help those who lost homes,” says CEO Brett Martinez. u Board focus: Review and practice your business Redwood’s assistance included: continuity plan regularly. u Financial support for employees and board members

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 23 “The whole experience left us shocked and in two weeks. Employees who didn’t evacuate volunteered disbelief,” Carn said. “We just sat, staring at the news, to help members who went to branches for money, wondering if we had homes, cars, boats, and jobs to loans, and other services. go back to.” Port Arthur (Texas) Teachers Credit Union has only one location, which was underwater in the rain and Evolve business continuity plans flooding that followed Hurricane Harvey. All but three The overwhelming size and scale of disasters in 2017 of the $38 million asset credit union’s 10-person staff sometimes required on-the-spot revisions to business and 11 board and committee members lost a home, a continuity plans. car, or both, says CEO Cindy Drummond. Mobiloil Federal decided not to relocate senior Golden Triangle Credit Union in Groves, Texas, managers to a remote site because doing so would have provided offices for Port Arthur Teachers’ operations wasted time and money. The credit union’s business for 12 weeks until it could install a trailer. Operations continuity plan worked well by: remain in the trailer but are expected to return to the u Having generators at branches. reconstructed branch soon. u Using a “telephone tree” for check-ins and instructions. Don’t count on technology u Defining lines of authority when certain staff are Technology can be an invaluable ally or an unreliable absent. asset based on local circumstances. u Reassigning staff to branches. In Puerto Rico, the internet and electrical power u Using text messages to connect senior managers failed, and few cell towers were operational. Credit regularly—every two hours at first; eventually daily. union employees used pen and paper to conduct cash withdrawals and other transactions despite being Work where you can unable to verify information. Putting staff to work in new locations kept credit Some credit unions relied on text messages to unions in business. communicate post-disaster because texts can often get “A team of four to five core credit union employees through when cellular calls cannot. Standard cell phone were able to work off laptops in their hotel rooms text apps limit the number of participants in group to keep the credit union systems running while our messages, so Mobiloil Federal’s managers downloaded headquarters was down during the storm,” Carn says. the GroupMe app and others used WhatsApp. All of Keys Federal’s services switched to a disaster Keys Federal relied on its Facebook page to share recovery center in Iowa while the main office in Key information while phones were out. It used Facebook West lacked power, computers, water, or telephones for Messenger and email to respond to members’ Facebook queries about routing and account numbers, deposits, and ATM locations. Online Extras Members need money Unexpected expenses hit everyone affected by a disaster. When evacuation orders were lifted, Carn says LISTEN TO A CUNA NEWS PODCAST INTERVIEW many Keys Federal members who spent their savings WITH SCOTT TEEL, VICE PRESIDENT OF AGILITY on unexpected travel returned to learn they didn’t have RECOVERY, AT NEWS.CUNA.ORG/PODCASTS homes or jobs. Credit unions took many steps to ensure members’ VISIT AGILITY RECOVERY’S HURRICANE RESOURCE financial survival, such as: u CENTER FOR CHECKLISTS, CASE STUDIES, AND Offering relief from loan payments, including credit cards and mortgages. “Skip a payment” programs PREPAREDNESS WEBINARS AT AGILITYRECOVERY.COM/ remained available for months at some credit unions. LP-HURRICANE-RESOURCE-CENTER-2018 u Allowing cash withdrawals even when account balances could not be confirmed.

24 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org u Providing access to unsecured loans at a set interest rate regardless of credit score, with guidelines favoring approval. u Suspending late fees, loan processing fees, overdraft iStock fees, transfer fees, early certificate redemption fees, and others, sometimes for two to three months. RECOVERY IS ONGOING u Waiving and/or reimbursing foreign ATM fees. Disasters disrupt cash deliveries, yet demand for While recovery operations in Texas, Florida, and Puerto Rico will continue for some time, Agility Recovery, a CUNA cash was high. Credit unions and banks outside Strategic Services alliance provider, identifies 10 lessons disaster areas stepped in, with some credit union learned from clients in hurricane-affected areas: executives delivering cash themselves. 1. Know your power requirements. Historically, 60% of business interruptions involve the loss of power, whether The cooperative spirit works they’re naturally occurring or man-made incidents. Credit unions nationwide offered “amazing” support Before you can employ a generator, identify your power amid back-to-back disasters, says Lacey Yasick, com- needs. munications manager at the National Credit Union 2. Ensure access to multiple vendors. During times Foundation. of disaster, third-party entities can become potential choke Credit union organizations donated more than points of recovery operations. $1.7 million via CUAid, the online national disaster 3. Prepare employees. Even the most well-developed relief platform for credit unions, for people affected recovery plans fall short if your employees are unwilling or unable to return to work and assist in the recovery. by Hurricane Harvey in Texas. Gifts of another $1.1 4. Focus on communication. Each audience— million provided relief for Hurricanes Irma and Maria, leadership, employees, vendors, members—requires a and California wildfires. unique approach. Have secondary and tertiary methods of The Foundation distributed grants from CUAid communicating with each target audience. donations to more than 2,500 credit union people Consider using a third-party texting application affected by these four disasters. “Credit unions and on smartphones, as some devices won’t be able to staff were reaching out to us left and right to see how communicate via text message when cellular signals are they could help and what they could do,” Yasick says. down. continued u 5. Have sufficient insurance coverage.Many businesses and homeowners are now learning the limitations of standard coverage, particularly relating to floodwaters. 6. Stock up on cash. When the power is out and communication lines are down, affected areas transition almost immediately to a cash-only economy. Consider the need to purchase fuel, food, lodging, repair supplies, and more. 7. Plan for the worst. If you do so, you’ll account for most common business interruptions. 8. Connect with authorities. Local, state, and federal entities drive much of the recovery process. 9. Employ situational awareness. The only certainty following a disaster is that the situation will be ever- changing, possibly minute to minute. 10. Test, test, and test. Review your plan regularly and hold exercises to prepare employees for what they should do in the event of an emergency, disaster, or isolated Mobiloil FCU employees clean out a flooded branch. incident.

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 25 “People helping people” happened locally, too. Juli raise more than $2,000 for local relief. Lewis, director of the Southeastern Credit Union Redwood Credit Union worked with the local Foundation that serves the League of Southeastern newspaper, The Press Democrat, and State Sen. Mike Credit Unions and Affiliates, received assistance McGuire to gather and distribute more than $32 after a generator between her home and detached million in donations in 120 days to the North Bay garage exploded and burned both structures, killing Fire Relief Fund, which is part of the Redwood Credit her family’s two dogs. Lewis, her husband, and their Union Community Fund. daughter were not at home. Redwood paid the fund’s administrative costs so all Within an hour after Lewis came home to a house donations gathered from 41,000 donors in all 50 states on fire, a credit union booked a week’s hotel stay for and 23 countries could go to disaster relief, including: her family, and another offered space to replace her u $20 million that helped approximately 8,000 people home-based office. Employees dropped off clothes. A who lost homes or experienced economic hardship. credit union executive offered to board her horse and u $9.5 million to support nonprofits that provided two donkeys. “This truly showed me the cooperative services and support for fire survivors’ immediate spirit,” Lewis says. needs. The Southeastern Foundation disbursed $130,000 u $1 million for small businesses affected by the fires. to 262 credit union staff and volunteers at 17 credit u $929,000 for fire survivors’ health and well-being. unions affected by the hurricane. It awarded grants Rebuilding branches also supported recovery efforts. in three phases timed to identify and aid credit union PenFed Credit Union in McLean, Va., plans to deepen employees and volunteers who did not get assistance its investment in Puerto Rico when it breaks ground in from insurance or other sources. late 2018 on a new branch expected to bring $4 million In Southeast Texas, the Cornerstone Credit Union to the local economy. Foundation and CUAid together spent $2.1 million on The $23 billion asset credit union boosted morale 1,329 grants in Phase I and $909,000 on 318 grants in and drew attention to the need for ongoing support Phase II of recovery. for Puerto Rico by sponsoring a March 2018 benefit concert by Gary Sinise and the Lt. Dan Band on the Give back island, with support from the Gary Sinise Foundation Even employees at credit unions in disaster zones and American Airlines. PenFed also provided a found ways to give. Mobiloil Federal employees sold disaster relief package for employees consisting of “Texas Strong” T-shirts to cash, prepackaged meals, and generators. The New York Credit Union Foundation has also provided ongoing assistance to Hurricane Maria victims. ‘WE DID A LOT Respond quickly With little warning, a rainy weekend on the Hawai- TO IMMEDIATELY ian island of Kauai in April turned into a deluge that washed out the main road connecting Kauai communities, took down power and communications, and SUPPORT OUR STAFF, flooded homes. In Hanalei, four feet of water fell in 24 hours. OFFICIALS, MEMBERS, Kauai Government Employees Federal Credit Union (KGEFCU) CEO Monica Belz used her background AND COMMUNITY.’ in coordinating disaster responses to identify supplies Brett Martinez the $115 million asset credit union could gather and deliver to people in need. Gasoline to refuel boats and jet skis used in water rescues was in great need. The credit union’s staff mobilized from its Lihue office to gather and deliver filled gas cans and other

26 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org supplies in personal trucks. Armed with a “dry bag” filled with electronic devices and forms, Belz used boats and jet skis, and then hiked to where people needed assistance in areas cut off by the flood. KGEFCU staff set up a “remote intake location” to add new members and process loan applications at Keys FCU’s Big Pine Key, Fla., branch had to be a local community center. If members needed new gutted following Hurricane Irma. plastic cards, staff returned the next day to deliver them. KGEFCU also offered no interest on credit card purchases for six months and created a disaster recovery loan of up to $15,000 at 5% interest for most credit tiers, with payments deferred for five months. KGEFCU added dozens of new members who needed immediate disaster relief loans, while serving current members and staying focused on community needs. “Every day the needs changed,” Belz says. “It started with life and death and rescues, and then it went to power banks to establish communication.”

Recovery takes longer than the headlines Deposits flowed into credit unions in disaster-stricken areas from insurance payments and federal assistance. Those funds flow back out as people rebuild. Meanwhile, credit unions keep working to improve business continuity planning. The Southeastern Credit Union Foundation held a disaster preparedness conference to help credit unions create continuity The League of Southeastern CUs and some South plans. Keys Federal plans to provide ongoing pre- Florida credit unions donated water, food, clothes, and supplies to Keys FCU. disaster education for members. Carn says the credit union now encourages members to keep a supply of checks on hand so they have access to funds and routing numbers when the next storm hits. “This gave us all a good reality shot of what can happen,” she says.

At press time: Learn how the eruption of Kilauea is affecting the island of Hawaii atnews.cuna.org. Resources u CUNA Business Continuity Planning Workshop: cuna.org/learn u Agility Recovery, a CUNA Strategic Services Some Keys FCU employees who didn’t evacuate alliance provider: agilityrecovery.com volunteered to serve members who also stayed behind. u National Credit Union Foundation: www.ncuf.coop

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 27 BUILD A BETTER

iStock

Employees committed to working together are a critical component of a thriving credit union.

28 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org philosophy into action requires engaged employees who are committed to members’ financial success. Employees don’t do it on their own. It’s teamwork that makes the credit union mantra a reality, whether the credit union has thousands or tens of thousands of members, millions or billions in assets.

Understand the ‘why’ The first step in building a winning team is to define the credit union’s strategy, says Jonathan Wildman, senior client partner at Korn Ferry, a global talent management company. “Do you want to drive member intimacy or operational excellence, or pursue innovation?” Only when you have determined what you want to accomplish can you translate that to job functions. “Then, what will it take to get people to perform that strategy? What kind of people do you need to execute it?” he says. Altra Federal Credit Union’s mission—“Helping you live your best life”—applies to both members and employees, says Kim Bauer, vice president of human resources at the $1.4 billion asset credit union in Onalaska, Wis. Altra Federal uses monthly check-ins with employees in place of annual performance reviews to track the growth and development of its 400-person workforce, which serves 100,000 members. The check-ins provide an opportunity to review accomplishments, celebrate successes, identify challenges, examine strengths and weaknesses, analyze development and training needs, and discuss ways to implement training, Bauer says. Lucy Harr “We rely on managers to identify employees’ strengths and weaknesses, and encourage employees

Legendary football coach Vince Lombardi once said, “Individual Focus commitment to a group effort—that is what makes a team work, a company u Build a successful team with people who work work, a society work, a civilization together to carry out the credit union’s mission work.” Lombardi, who never had a and goals. losing season as a head coach in the u Develop a training program that identifies National Football League, knew that employees’ strengths, weaknesses, and needs. dedication to a common goal is crucial u Board focus: Knowing what goals you want to to success. accomplish will translate into what job functions Thriving credit unions recognize this as well. and employees you need. Putting credit unions’ people helping people

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 29 to be open about what their career goals are,” she says. Altra Federal uses the concepts Tom Rath and Barry Conchie describe in their book, “Strengths-Based Leadership: Great Leaders, Teams, and Why People Follow,” to help managers identify the top five strengths of their team members. “Strengths can grow exponentially when being developed, while weaknesses will move incrementally,” Bauer says. “It makes coaching conversations easier iStock when you can see the balconies and basements of each strength. It also helps us to identify employees who may be a good fit for roles they hadn’t thought of previously.” TEAM-BUILD LIKE A MARINE The credit union uses feedback from an employee training needs assessment to develop a training plan As a war correspondent, Shawn Rhodes embedded himself in a for the year. This ensures it’s offering sessions employees high-performing Marine Corps unit in Iraq that completed nearly want to attend and those that will have an impact on every goal it set. When preparing for a mission, those Marines their roles. didn’t just check their ammunition and head out the door. They Cross-functional training is another tool the credit gathered together and went over the mission to ensure they’d be union uses that’s easy to do and provides value. successful. “The best decisions are not made on the fly,” says Rhodes, an “A few years back, we started offering some soft expert in creating high-performing organizations and a former Marine. skills training where we placed a variety of people Rhodes, who spoke at the 2018 CUNA HR & Organizational into the sessions so they could learn from each other,” Development Council Conference, cites five lessons learned about Bauer says. “Employees learned more about what goal setting from his time as a war correspondent: other departments did and established a connection within that team. It was very eye-opening for 1. You cross your finish line before the race begins. The everyone involved. Some even decided to pursue other Marine unit set goals that were precise, profitable, and on purpose. opportunities within Altra because of learning more Set specific goals for your team, but also know how those goals about another department. Any chance we get to have contribute to the credit union’s overall mission and what are their employees together to build relationships is a huge win.” purpose. 2. Performance raises to the level of training. Make train- Communication and accountability ing continuous, not just something you do annually or quarterly. This The mission statement at $242 million-asset Simplicity allows you to train for unexpected events and pivot when necessary. Credit Union is also the driving force behind its human “If your plan doesn’t allow you to make changes or pivot, you’ll be resources program. Employees work with the mission stuck,” Rhodes says. of “making the complex simple,” says Katy Zaleski, vice 3. Don’t keep solutions a secret. When you need to find a president of human resources, at the Marshfield, Wis., solution to a problem, let others know so they can respond accord- credit union. ingly if faced with a similar problem. “You all operate in interdepen- In recognizing turnover on the front line was the dent relationships at the credit union,” Rhodes says. “There is no highest among all positions, for example, the credit reason silos should exist if you’re all responsible for achieving the union established a career development structure that same goal.” includes checklists identifying what skills and knowledge staff need in order to advance. New employees work Confront your problems. Address problems immediately or 4. with a trainer and are eligible to advance once they they may snowball into something larger. Establish accountability by acquire the needed skill sets, Zaleski says. identifying who is responsible for a task, when the task will be com- But it’s important to manage expectations. pleted, and how others will know the task is complete. “We explain what a typical transition period is, 5. What made you successful so far won’t keep you pointing out there is a lot of information and this will there. The market, members, and members’ needs are always take nine months to a year to learn,” she says. “We are changing, so credit unions must continue to innovate and find solu- overly transparent. We don’t want to deflate enthusiasm, tions that will allow them to do things differently and improve. but we want an understanding of what it takes to

30 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Pg_31_Adlumin_Inc.indd 47 6/1/18 11:54 AM WE WORK TO GET advance. We work to get employees ready. They need to understand they are the drivers.” EMPLOYEES Communication and accountability are also encouraged at $145 million asset Gerber Federal Credit Union in Fremont, Mich. “The relationship READY. THEY we have with each other allows our employees to be open and candid with their managers so if they feel there is something lacking in their development they‘ NEED TO can have that conversation,” says Ellen Davis, assistant vice president of human resources. “We work to find opportunities to fill skill gaps.” UNDERSTAND The credit union also uses Predictive Index (PI), an assessment and analytic tool from Advisa, a human resource consulting firm. “This has helped us determine THEY ARE a variety of things about all of our employees,” says Davis. “Using PI has been a key element in helping us create and sustain a winning team.” THE DRIVERS. Gerber Federal also introduced CUNA’s Creating Katy Zaleski Member Loyalty program. “All staff will go through this training to improve their member service and member loyalty skills, and help build relationships with members and colleagues,” says Davis. The program also involves front-line staff in want to come to work?” and “What makes you want development decisions and problem solving because to hit the snooze button?” it identifies barriers to providing superior member Zaleski does her best to respond to problems service and spotlights needs for additional training, uncovered during the conversation. “These are issues Davis says. that may be stressing employees and can become the “The main principle of this program is to maintain subject of ‘water cooler gossip.’ We need to address personal responsibility,” she says. “When employees them in some shape or form.” truly take ownership of their role and their At Altra Federal, monthly check-ins uncover development, it will enhance the team.” any underlying issues. The credit union conducts a comprehensive employee engagement survey each Filling your roster year, but Bauer plans to roll out a series ’of “pulse Staff turnover is inevitable. With a national surveys”—quick, short-answer surveys that can unemployment rate below 4%, where will you find provide feedback as well as more data points. As the your human capital? name suggests, a pulse survey can provide a read on Simplicity relies on community involvement and organizational health. social channels to recruit team members. “Employees To aid recruitment, Altra Federal’s YouTube channel are my best recruiters,” says Zaleski. The credit union features testimonials from employees answering the posts job openings on Indeed, a process streamlined question, “Why do I love working here?” through its use of Paylocity, the cloud-based payroll The credit union plans to participate in additional and human resources software. job fairs to increase its visibility. Bauer also sees Altra It also focuses on retention. “Turnover is costly,” Federal’s Desjardins Youth Financial Literacy Award- Zaleski says, “so we try to promote from within.” winning program as a source of future talent, with To encourage employee engagement, Simplicity school partnerships currently yielding two apprentices uses four internal focus groups: career development, in the marketing department. benefits, products and services, and membership Recruitment should start with a robust job profile, expansion. which identifies the characteristics and traits people Zaleski also conducts “stay-views” because she need for the job function, says Wildman. believes exit interviews come too late to right the In today’s competitive environment, he believes course. adaptability, flexibility, and the ability to deal with She asks employees about their experience with change need to be high on that list. “With the shift to Simplicity with questions such as, “What makes you more technology, you need staff who can adapt with

32 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org the times and learn new skills,” he says. best-selling author Daniel Pink points out that human Wildman uses the analogy of a business that makes beings rarely go it alone. pecan pies. “It has all of the ingredients, and it makes “Much of what we do—at work, at school, and at great pies,” he explains. “But now the market wants home—we do in concert,” he notes. pumpkin pies.” According to Pink, when our ancestors first stepped The organization tries to meet that demand, but uses out into the open savannah, belonging to a group the ingredients it has for its pecan pies. The results are was essential for survival. For credit unions, pulling predictable. together the right group will not only help them “You need to ensure your process is right and that you have the right systems in place,” Wildman says. survive, but thrive. In terms of performance management, managers need to act more like leaders. Wildman says they can do so by taking three steps: 1. Setting goals. Resources 2. Monitoring and assessing those goals. 3. Providing feedback and coaching. u CUNA Creating Member Loyalty: cuna.org/cml Wildman also says millennials—now the largest u CUNA HR & Organizational Development generation in the workforce—expect diversity, not Council: cunacouncils.org only in demographics but in perspective. “They expect inclusion.” u Korn Ferry: kornferry.com In “When: The Scientific Secrets of Perfect Timing,”

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cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 33 Road Rules for Directors

Ron Jooss

34 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org iStock Seven ways to drive your board forward.

As financial institution governance game, reduce it to writing, and monitor the outcome throughout the year,” he says. becomes more complex, the rules of the Olympic-level boards also have clear boundaries road become more detailed, strategically within which their CEOs can operate. “The easiest way demanding, and uncertain. What has to do that is to say, ‘Here are the things that we don’t worked in the past only scratches the sur- want you to do,’” Winninger says. “Then within those boundaries, the CEO is free to pursue the credit union’s face of expectations for today’s directors. goals. “A lot of boards have good people, but they’re stuck “If you know what’s out of bounds, then everything in a bad system,” says Steve Winninger, principal of the else is in bounds,” he continues. “That is empowering consulting firm Steve Winninger & Associates and a for everyone, and it eliminates petty squabbles because former credit union CEO. “They’re well-meaning, but expectations are clear.” they lack clear direction from a governance standpoint. That said, if the CEO steps out of bounds, he or she It’s like playing cards without any rules—you don’t know is under strict obligation to report it to the board. “At how to play the cards you’re dealt.” the same time, boards have to understand there’s a Successful boards, however, share similar traits difference between a parking ticket and capital offense,” regardless of their institutions’ size or market, says Scott Winninger says. Butterfield, principal of Your Credit Union Partner. He shares an example from his days as a CEO. “One “They’ve got great CEOs, a great team, and amazing night we had too much money parked in our corporate directors who are engaged.” credit union. I reported it to the board right away, and Following are seven rules credit union boards can it was not an issue. Again, transparency and trust are adopt on their road to success. the keys.”

Be clear about expectations Cultivate self-awareness As simple as this sounds, expectations for This is sound advice for any business performance can be nebulous, and they require leader or leadership team. For credit union forethought and effective communication 2 directors it starts with self-evaluation, not 1 only individually but as an entire board. among board members and the CEO, says Winninger. Expectations include both credit union and CEO “You might have a board that has individuals performance. “Doing this well requires buy-in from everyone, and it’s an ongoing process,” he says. “It can’t be done once and put on the shelf.” Focus The first rule of thumb, Winninger says, is to put u Be consistent. Building solid habits takes expectations in writing and make them part of a time and practice. strategic plan. Next, review them at every board meeting u “so there aren’t any surprises.” Be supportive. Strong organizations are built Winninger puts credit union boards on an informal on collaboration. spectrum, from “couch potatoes” to Olympic-level u Board focus: Hold your fellow directors to a athletes. high standard of engagement. “The ones that are Olympic-level articulate the end

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 35 who make great board members because they all discussions for the end of their meetings. He suggests have financial or accounting backgrounds,” says Jill starting board meetings with them. Nowacki, president/CEO of the Credit Union League “Give yourself 15 minutes to address a strategic of Connecticut. “But that might leave a gap in IT priority,” Butterfield says. “Typically when you have [information technology] knowledge, or there may be these discussions you say ‘Boy, that was great. We a gap in representation from the composition of your should do that more often.’ This is one way to make membership. sure you do.” “Maybe most of your board members are affluent and your credit union has a low-income designation,” she continues. “Boards have to be willing to evaluate their own diversity and make that part of their succession planning.” ‘The On an individual level, board members must approach their jobs from a perspective that builds collaboration and engagement, Nowacki says. That starts at a basic members level. “You’d be surprised how many board members don’t even read the board packet before every meeting,” are at the she says. “That’s a nonstarter. It limits the level of engagement and active dialogue that can take place at center of the board meeting.” Similarly, board members must understand if products and services don’t meet the needs of the entire it all.’ Ken Kurth membership, not just their own financial needs. “You can’t come to the board meeting and talk about interest rates on long-term certificates just because that At Unitus Community Credit Union in Portland, happens to be the product you have,” Nowacki says. Ore., the board places routine items on a consent agenda Think strategically to leave more time for strategic discussions. A consent agenda is a board meeting practice that groups routine Nowacki offers a simple way to measure a business and reports into one agenda item. Boards can board’s basic strategic aptitude. “Look at the approve the consent agenda in one action rather than 3 amount of time your board meetings are filing motions on each item separately. dedicated to looking toward the future rather than the “That puts more priority on strategic discussions and past,” Nowacki says. “By that I mean, how many times educational topics rather than routine business,” says does the board packet cover what’s taking place moving Frank Chinn, board chair of the $1.1 billion asset credit forward rather than what happened the month before? union. How often does a strategic session occur and then At $884 million asset Mayo Employees Federal you don’t revisit it until your next strategic planning Credit Union in Rochester, Minn., the board integrates session?” a “balanced scorecard” in its strategic planning. The Nowacki says some credit union boards spend as scorecard, developed by David Norton and Robert much as 80% of their time looking backward instead Kaplan, is a set of measures that gives organizations of envisioning the future. That’s largely due to credit a quick but comprehensive view of their operations, unions’ compliance burden and directors’ need to meet according to the Harvard Business Review. their fiduciary obligations. It includes financial measures that describe the results “Those numbers should be flipped,” she says. “The of actions taken, complemented with operational metrics board should be in the position of strategic oversight examining customer satisfaction, internal processes, and instead of hindsight.” the organization’s innovation and improvement efforts. Butterfield says most boards save strategic planning Ken Kurth, director and past board chair, used the

36 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org scorecard while serving as division chair of strategic planning at Mayo Clinic. During Kurth’s six years as Mayo Employee Federal’s board chair, the credit union achieved 122% asset growth and opened three new branches.

“We focus on our people as our strongest asset iStock and give them the technology they need so they can do their jobs effectively,” Kurth says. “Then we work on internal processes to make sure the credit union is highly functioning and achieves our financial objectives with the end goal of serving our members. The members are at the center of it all.” The board must focus on strategy and allow the CEO and her team to pursue the credit union’s goals AVOID THESE BOARD BAD HABITS within defined boundaries. “Clarity is so important,” Kurth says. “We have Successful boards steer clear of bad habits, including a collaborative structure. [CEO Mary Hansen] these common mistakes, says Jeff Rendel, president of can be successful because we have a collaborative, Rising Above Enterprises: engaged relationship. She can build a stronger team because she understands where we need to focus u Relying on the annual board nomination process to our strategy.” fill board seats. Board recruiting should be an ongoing, proactive process, Rendel says. “The more likely we Measure and monitor rely on the call for nominations, the more likely we’ll be At first glance, measuring and disappointed. Look at recruiting as an opportunity to monitoring might sound like a way to diversify your board, gain professional experience, and track past performance. expand your demographic reach, whatever your needs may 4But that’s not the case for strategic-minded be. You can almost look at it as a marketing exercise and boards, Butterfield says. It’s another way to priori- work with your marketing team.” tize strategy and make it a part of every meeting. u Expecting unanimity in decision making, which can “Let’s say we want to be the top-of-mind financial impede progress. Instead, use conflict to craft a better institution in our community, and one way we’re solution. “Dissenting votes usually can be litigated into the going to do that is by creating some key partnerships execution of the plan as we figure out the issues,” Rendel in the community,” he says. “At every board meeting we have to measure the status of those partnerships. says. “Most of the time they are valid points that need to be Have we talked to organizations in the community? recognized.” Why would we pick one group over another? It’s In the end, the board must speak with one voice. Keep about learning how we’re fulfilling that big picture dissension in the board room and give the CEO one as we envisioned it.” message. It’s common for credit union boards to think u Overlooking a lack of engagement among other board tactically rather than strategically given the nature members. Showing up and being accountable is job No. 1 of their business, Butterfield says. for directors, Rendel says. “If that expectation hasn’t been “We’re in a precise industry,” he says. “Credit met, it needs to be addressed.” unions don’t merge because they’re out of Boards should create a job description that includes five compliance. They fail because they don’t keep pu or six expectations directors must live up to. “Then measure with the times and don’t think strategically. What yourself based on those expectations,” he says. “It’s more you measure and monitor reflects your priorities.” than a grade as to how you performed as a board; it Adapt and change serves as honest proof that you should be considered as a continuing candidate for the board of directors.” The board sets the tone for management, Butterfield says. “If I see a board that’s 5 risk-averse and firm in its belief that

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 37 made for another time and other leaders. “Successful boards don’t do that. They’re always moving forward.” One of the keys to making tough decisions is acting with as much information as possible, Butterfield says. ‘Look “Successful boards ask a lot of questions. They ask their management team to gather as much information as toward the possible. They weigh that information and make a decision. Then they can be comfortable with moving future rather on.” Be accountable than the Butterfield has credit union clients with boards that are comprised primarily of past.’ Jill Nowacki longshoremen. He has others that serve Ivy 7League constituents. “They may dress differently when they come to meetings, and they may have different life experiences, but when they walk into the board room they ‘We’ve always done it this way,’ the management team are parallel in their level of professional conduct,” But- will reflect that in everything they do.” terfield says. Credit unions face more risk when they don’t adopt “They know they represent members and the credit new technology and when they fail to collaborate, he union,” he continues. “If they are drifting off from a adds. Failing to adapt and change with the times can strategic priority, or if a board member isn’t showing up, lead to unnecessary mergers. they hold themselves accountable” (“Avoid these board It also causes credit unions to risk losing the legacy of bad habits,” p. 37). their organizations. That’s especially sad when a credit Board performance ultimately reveals itself in how union that has been around for 70, 80, or 90 years goes their credit unions grow and their relevance in the local away due to an unwillingness to modify its thinking community, Butterfield says. “People seek them out. and behavior. People want to be associated with highly functioning “It’s too much of a risk to sit on your hands,” organizations, whether it’s Amazon, Apple, or the local Butterfield says. credit union. Unitus Community uses board term limits, in part “People want to do business with them because they to introduce fresh personalities and ideas to the credit are relevant to the communities they serve and have union’s leadership, Chinn says. Board members are high standards for themselves.” limited to four consecutive three-year terms. Although Chinn has been on the Unitus Community board for only two years, he has already served a year as board chair. He has vast experience on nonprofit boards, having served as president of the Portland Resources Rose Festival Foundation. “I’m a former teacher. I’m u CUNA: continually educating myself and building on my past experiences.” 1. National Credit Union Roundtable for Board Leadership: cuna.org/boardroundtable Make tough decisions 2. Volunteer resources: cuna.org/volunteer “This point ties in with all the others,” u Rising Above Enterprises: jeffrendel.com Butterfield says. “It’s the result of all the u Steve Winninger & Associates: knowledge you’ve gained, the conversations 6 stevewinninger.com you’ve had, and the strategic plans you’ve made.” He notes that’s it’s easy for boards to “kick the can u Your Credit Union Partner: yourcupartner.org down the road” and leave the tough decisions to be

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Bureau Amendments Fix TRID ‘Black Holes’ The Bureau of Consumer Financial increased costs that would otherwise specifically provide that creditors Protection has finalized its July be rightfully passed on to the may use the closing disclosures to 2017 proposed amendments to the member if it weren’t for the four-day reflect changes in costs for purposes Truth in Lending Act/Real Estate limit rule. of determining if an estimated closing Settlement Procedures Act integrat- The finalized amendments cost was disclosed in good faith, ed disclosure (TRID) rule. without the four-day limit. The amendments address the The rule will become effective TRID “black hole,” which occurs 30 days after its publication in the when the lender has provided a Federal Register. borrower with the closing disclosure, Once effective, if a changed and then a fee increase occurs. circumstance or another triggering Currently, a creditor may only use event has occurred, a creditor can a closing disclosure to reset tolerances reset tolerances with either an initial if there are fewer than four business or corrected closing disclosure days between the time the creditor reflecting the revised estimate, which is required to provide the closing is required to be provided to the disclosure reflecting the revised consumer. estimate and the consummation. However, the four-day limit Credit unions and other creditors remains in effect for revised loan can often be forced to absorb these iStock estimates.

Mortgage Servicing Amendments Now Effective The Bureau of Consumer Financial u The borrower requests in writing change affects borrowers who filed Protection’s second round of that the credit union cease providing for bankruptcy before April 19. amendments to mortgage servicing the periodic statement. The answer is on page 7 of the rules are now final. This means u The bankruptcy plan provides Bureau’s FAQ on its mortgage confirmed successors in interest are that the borrower will surrender the servicing rules implementation now entitled to the same servicing dwelling. webpage. The credit union must protections available to borrowers u A court enters an order providing send a modified periodic statement under both Regulation Z and for avoidance of the lien securing the to a borrower in bankruptcy unless, Regulation X. mortgage loan. as of April 19, 2018, any exemption Credit unions also are required If an exemption doesn’t apply, applies. It continues that “these to provide modified periodic the credit union must continue new requirements and exemption statements on residential mortgage to provide a modified periodic provisions apply to a mortgage loan loans to borrowers who have filed statement. as of April 19, 2018, irrespective for bankruptcy, unless an exemption The modified periodic statement: of whether the borrower became a applies. u May omit certain information as debtor in bankruptcy before or after Under the rule, the credit union identified in the rule. April 19, 2018.” must provide a modified periodic u Must include a statement Small servicers are exempt from statement in connection with identifying the borrower’s status the periodic statement requirement a closed-end consumer credit as a debtor in bankruptcy and altogether, and thus also exempt transaction secured by a dwelling that the periodic statement is for from this change. A small servicer to a borrower who has filed for informational purposes only. is defined as a credit union, that bankruptcy unless one of the CUNA compliance staff received together with any affiliates, services following exemptions applies: many questions about how this 5,000 or fewer mortgage loans.

40 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org u RULES u REGULATIONS u DEADLINES

NCUA Finalizes Claims, Share Insurance Ad Requirements NCUA’s changes to its Accuracy in The requirements also have an that changes the agency’s involun- Advertising and Notice of Insured exemption for radio and television tary liquidations and claims proce- Status rule are final as of May 25. advertisements that are less than dures. NCUA’s advertising rule requires 30 seconds in duration. This is The rule clarifies the requirements federally insured credit unions to a change from the less than 15 for proof of a claim by an employee use the agency’s official advertise- seconds exemption that has been in for pay or benefits such as unpaid ment statement in most advertise- effect since 2011. wages, sick time, or vacation time ments. while making a distinction between Previously, three versions of the employees’ claims and claims official advertisement statement by a credit union executive that were permitted: constitute a golden parachute. 1. “This credit union is feder- Specifically, it permits an ally insured by the National Credit employee’s final paycheck to Union Administration.” include compensation for the pay 2. “Federally insured by NCUA.” Finally, the new rule eliminates period immediately preceding the 3. A reproduction of the official the requirement to include the liquidation, as well as accrued but sign with white letters on blue back- advertising statement on a credit unpaid sick and vacation leave, ground. union’s statement of condition. including any severance to which The new rule allows a fourth The agency agrees this was an the employee was entitled, provided option: “Insured by NCUA.” unnecessary requirement, and terms were documented and This change is expected to eliminating it restores parity with objectively applied. enhance advertising flexibility, other financial institutions. The rule will become final 30 especially for social media At its May 25 meeting, the days after publication in the Federal platforms. NCUA Board approved a final rule Register.

FinCEN Grants Limited CDD Relief Through Aug. 9 The Financial Crimes Enforce- loan is renewed or a certificate of renewal of certain financial ment Network (FinCEN) has deposit is rolled over, the financial products and services established issued a ruling to provide a institution establishes another before May 11, 2018. 90-day limited exceptive relief formal banking relationship and a “FinCEN understands that to covered financial institutions new account is created. some covered institutions have from the obligations of the ben- FinCEN’s April FAQ clarifies not treated such rollovers or eficial ownership requirements for that covered financial institutions renewals as new accounts and legal entity customers for certain are required to obtain information have established automatic accounts. on the beneficial owners of a legal processes to continue the banking The ruling is retroactively entity that opens a new account relationship with the customer,” effective as of May 11, when for each new formal banking writes FinCEN. the customer due diligence relationship established, even The agency notes that those rule became effective, and runs if the legal entity is an existing institutions have expressed through Aug. 9. customer. concerns about compliance with Consistent with the definition According to FinCEN, the the rule. of “account” in the Customer 90-day relief will be to identify FinCEN added that it believes Identification Program rules and and verify beneficial ownership further consideration of the rule is subsequent guidance, each time a information for rollover or appropriate.

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 41 COMPLIANCE

Can You Spot Disaster-Related Fraud? Agencies offer guidance to identify common fraud schemes.

Valerie Y. Moss

NCUA consistently urges Common schemes that arise u Cashing of multiple emergency all federally insured credit unions include benefits fraud, charities fraud, assistance checks by the same to perform routine reviews of their and cyber-related fraud. Credit unions individual. disaster preparedness and response should consider the following fraud u Deposits of one or more plans. During times of emergency, indicators as they fine-tune their emergency assistance checks, credit unions need to have preparedness and response plans for when the accountholder is a retail heightened awareness of related the 2018 hurricane season—June 1 to business and the payee/endorser fraud schemes and scenarios. Nov. 30—and beyond. is an individual other than the Disaster recovery plans help credit accountholder. unions minimize service interruptions Benefits fraud u Opening of a new account with an and maintain member confidence. Benefits fraud occurs when emergency assistance check, where the They also should address the individuals apply for emergency name of the potential accountholder is increased potential for fraud. assistance for which they are not different from the check depositor. The National Center for Disaster entitled. These individuals use Fraud (NCDF) identified fraudulent financial institutions as a conduit Charities fraud activity red flags to inform financial for fraudulent transactions, such as Charities are a vehicle for donations institutions. The Department depositing or obtaining cash derived to assist victims of man-made and of Justice established NCDF to from emergency assistance payments. natural disasters. Criminals, however, investigate, prosecute, and deter fraud Fraudsters typically use wire use bogus charities to exploit the in the wake of any natural or man- transfers to request withdrawals, wire public’s generosity for their own gain. made disaster. funds to accounts, and immediately Both legitimate and fraudulent charity More than 30 federal, state, withdraw the funds. solicitations can originate from emails, and local agencies participate in Red flags include: social media, websites, phone calls, NCDF, which acts as a centralized u Deposits or electronic fund mailings, and more. clearinghouse of information related transfers of multiple emergency Disaster-related charities fraud may to all types of disaster relief fraud. assistance payments (e.g., Red Cross, occur when a credit union notices The Financial Crimes Enforcement Federal Emergency Management that a payee organization’s name is Network (FinCEN) highlighted Agency) being made into the same similar to—but not exactly the same NCDF’s red flags in a 2017 advisory account. Dollar amounts are similar as—those of reputable charities. It (FIN-2017-A007). or identical. also may recognize the atypical use of money transfer services for charitable collections. Legitimate charities don’t solicit donations via this channel. The following tips may help credit union officials, employees, and WHAT ACTIONS TO TAKE members avoid bogus charities: u Don’t respond to any unsolicited If you believe you have been a victim of disaster-related fraud, contact incoming or spam emails or click the National Center for Disaster Fraud by [email protected] at (866) 720-. You links in those messages because they 5721, by fax at (255) 334-4707, or by email at may contain computer viruses. can also report suspicious email solicitations oric3.gov fraudulent. websites to u Be wary of individuals asking the FBI’s Internet Crime Complaint Center at for donations via email or social networking sites. u Beware of organizations with names similar to but not exactly the same as those of reputable charities. u Rather than follow a link to a website, verify the legitimacy of

42 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org (e.g., terrorism financing). u Is designed to evade the Bank Secrecy Act or its implementing regulations. u Has no business or apparent lawful purpose or is not the type of transaction that the particular customer or member would normally be expected to engage in,

iStock and the financial institution knows of no reasonable explanation for a nonprofit organization before with .com or .net. Payments to these the transaction after examining providing any payment information. sites may indicate fraudulent activity. the available facts, including the u Be cautious of emails that claim Most legitimate charities’ websites end background and possible purpose of to show pictures of the disaster areas in .org. the transaction. in attached files because the files The presence or absence of a red may contain viruses. Only open Suspicious activity reports flag in any given transaction is not attachments from known senders. When filing a suspicious activity by itself determinative of whether u Don’t rely on others to make the report (SAR) on these types of fraud, a transaction is suspicious. Credit donation on your behalf. This ensures FinCEN requests, but doesn’t require, unions should consider additional contributions are received and used that filers reference the advisory factors such as a member’s overall for intended purposes. FIN-2017-A007 and include the term financial activity and whether the u Donate directly to the charity. “Disaster-related Fraud” in the SAR transaction exhibits multiple red narrative and in field 31(z) (Fraud- flags, as well as the specifics of Cyber-related fraud Other) to indicate a connection their own risk profiles and business Cybercriminals often exploit natural between the suspicious activity being models. disasters by sending fraudulent reported and the possible misuse of In other words, take all of the communications via email or social relief funds. relevant facts into consideration. media and by creating fake websites Credit unions are required to file a Don’t presume fraud is involved just to solicit contributions. SAR with respect to: because one of the above-mentioned Credit union officials, employees, u Criminal violations involving red flags is present. and members should watch out for insider abuse in any amount. emails from potentially illegitimate u Criminal violations aggregating VALERIE Y. MOSS is CUNA’s senior director of compliance analysis. Contact CUNA’s charitable organizations requesting $5,000 or more when a suspect can Compliance Team at [email protected]. donations—even when they appear to be identified. originate from a trusted source. These u Criminal violations aggregat- fraudulent emails commonly appear ing $25,000 or more regardless of a after major natural disasters and often potential suspect. contain links or attachments that SARs are also required for Resources direct users to phishing or malware- transactions conducted or attempted u CUNA’s e-Guide to Federal Laws and infected websites. by, at, or through the financial Regulations: cuna.org/compliance Credit unions should also beware institution (or an affiliate) and u Financial Crimes Enforcement Network: of illegitimate crowdfunding aggregating $5,000 or more, if fincen.gov the institution or affiliate knows, platforms. Again, cybercriminals u National Center for Disaster Fraud: suspects, or has reason to suspect create copycat websites using designs justice.gov/disaster-fraud or names that are practically identical that the transaction: to legitimate charities and relief u May involve potential money u NCUA: ncua.gov organizations. The sites often end laundering or other illegal activity

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 43 COMPLIANCE

Refresher on Regulation Z Specific requirements apply to open-end and preferential employee loans.

For example, the agreement may of change in terms is required if provide that the preferential rate will an APR in a variable-rate account increase from the reduced rate to the increases as a result of a rise in the higher standard rate when employ- index that’s not controlled by the ment is terminated or whenever the creditor and is available to the gen- condition occurs that causes the loss eral public, such as the prime rate. of the preferential rate. The Federal Reserve Board (FRB) The provisions discussed here pro- issued a final rule in February 2010 vide to all open-end loans except for that applied only to credit card home equity lines of credit. accounts. An index is under the Regulation Z requires that a creditor’s control when the account 45-day notice of change in terms be is subject to a floor rate that prevents provided before increasing the rate the account from acting as a true from the lower preferential rate to variable rate account. MICHAEL MCLAIN the higher standard rate that was The February 2010 final rule disclosed in the account opening required card issuers to eliminate This month’s column agreement. floor rates on credit card accounts covers two very important issues If the creditor discloses the pref- only. under Regulation Z that were revised erential rate in the initial account However, FRB actually intended by a Federal Reserve Board final rule opening agreement, then the pref- the February 2010 final rule to apply in April 2011—floor rates on open- erential rate must also be included to all open-end loan floor rates. end loans and employee preferential in the summary table required for When FRB realized its mistake, it rates. We think it’s appropriate to all open-end loans and in applica- issued a proposed rule in November remind credit unions of the specific tions and solicitations for credit card 2010 and a final rule in April 2011, requirements regarding these issues. accounts. which became effective Oct. 1, 2011. For preferential rates disclosed in This final rule stated that a Preferential loan rates the summary table, the creditor must variable-rate open-end loan that is for employees briefly disclose beneath the table the subject to a fixed minimum or floor Preferential loan rates are lower rates circumstances that lead to the pref- does not meet the conditions of or annual percentage rates (APR) erential rate being revoked. It must the exception to the advance-notice offered by many credit unions to also disclose the rate that will apply requirements of Regulation Z. It their employees, employees of a third afterwards. therefore requires a 45-day notice party, or to other individuals with If preferential rates are instead before any rate may be increased similar affiliations such as executive disclosed after account opening in because of an index increase. officers of a specific group. an amendment to the account agree- This rule also applies where the Eligibility for employees is usually ment, then the preferential rate is not variable-rate account is based on the conditioned on the employee’s con- required in the summary table. creditor’s internal index, such as one tinued employment with the credit A creditor may have two separate that’s based on the creditor’s cost of union. account opening agreements: One funds, because the index is under the The account opening agreement for the general membership that does creditor’s control. must disclose the rate that represents not mention preferential rates, and For the advance-notice exception the legal obligation between the par- one for employees and other parties to apply, the creditor must eliminate ties—the credit union and the bor- which contains preferential rates. floors on all open-end accounts and rower—and it may include the lower You may want to check with your make sure it is using an external preferential rate as well. forms supplier regarding the separate index such as the prime rate for If the agreement refers to a pref- documents. variable-rate accounts. erential rate, it should also mention MICHAEL McLAIN is CUNA’s senior the requirements for obtaining and Floor rates on open-end loans federal compliance counsel. Contact him retaining the preferential rate. Regulation Z provides that no notice at 608-231-4185 or at [email protected].

44 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org CUNA Schools & Conferences

BOARD & VOLUNTEER LENDING & COLLECTIONS (Continued) CUNA Strategic Planning Roundtable CUNA Credit Union Financial Counselor Recertification August 18-19, 2018 // Denver, CO Workshop September 16-17, 2018 // Orlando, FL CUNA National Credit Union Roundtable for Board Leadership CUNA Collections & Bankruptcy School October 19-21, 2018 // Vancouver, Canada September 17-20, 2018 // Orlando, FL CUNA Supervisory Committee & Internal Audit Conference CUNA Lending Council Conference December 2-5, 2018 // Las Vegas, NV October 28-31, 2018 // Anaheim, CA December 8-11, 2019 // Las Vegas, NV CUNA Business Lending Roundtable CUNA Volunteer Conference January 29-30, 2019 // San Diego, CA January 13-16, 2019 // Montego Bay, Jamaica CUNA Consumer & Residential Mortgage Lending School CUNA Volunteer Certification School April 15-18, 2019 // Las Vegas, NV May 6-10, 2019 // San Antonio, TX MANAGEMENT & LEADERSHIP COMPLIANCE America’s Credit Union Conference CUNA Regulatory Compliance June 28-July 1, 2018 // Boston, MA Certification Schools* June 17-20, 2019 // Orlando, FL September 9-14, 2018 // Denver, CO CUNA Management School March 31-April 5, 2019 // Louisville, KY July 15-25, 2018 // Madison, WI CUNA Attorney’s Conference CUNA Coaching Leadership School October 29-31, 2018 // Palm Springs, CA August 6-8, 2018 // San Diego, CA CUNA Bank Secrecy Act Certification Conference* CUNA Emerging Leader Institute November 5-8, 2018 // Louisville, KY December 3-5, 2018 // Austin, TX CUNA & ACUIA Internal Audit Certification School CUNA Governmental Affairs Conference October 8-11, 2018 // Tempe, AZ March 10-13, 2019 // Washington, D.C. March 25-28, 2019 // Atlanta, GA CUNA National Young Professionals Conference 2019 dates and location to be announced. FINANCE & ECONOMICS CUNA Investment Certification Schools* MARKETING & BUSINESS DEVELOPMENT August 13-17, 2018 // Chicago, IL CUNA Marketing & Business Development Certification CUNA CECL Workshop Schools September 11-12, 2018 // Denver, CO September 30-October 4, 2018 // Tempe, AZ CUNA Governance, Risk Management & Compliance CUNA Marketing & Business Development Leadership Institute Council Conference September 17-19, 2018 // San Diego, CA March 20-23, 2019 // Las Vegas, NV CUNA Financial Management School* CUNA Digital Marketing School September 9-12, 2019 // Tempe, AZ June 3-6, 2019 // San Antonio, TX CUNA Enterprise Risk Management Certification School December 3-5, 2019 // Las Vegas, NV OPERATIONS, SALES & SERVICE CUNA CFO Council Conference CUNA Operations & Member Experience 2019 dates and location to be announced. Council Conference September 12-15, 2018 // San Francisco, CA HR & TRAINING CUNA Member Experience, Sales & Service School September 17-19, 2018 // Austin, TX CUNA HR Compliance Certification School July 29-August 1, 2018 // Denver, CO CUNA World-Class Service Leadership School CUNA Experience Learning Live! May 14-16, 2019 // Denver, CO October 14-17, 2018 // New Orleans, LA CUNA HR & Organizational Development SECURITY & TECHNOLOGY Council Conference CUNA Technology Council Security Summit 2019 dates and location to be announced. September 11-12, 2018 // San Francisco, CA CUNA Technology Council Conference LENDING & COLLECTIONS September 12-15, 2018 // San Francisco, CA CUNA Business Lending Certification School CUNA Cybersecurity Conference* July 23-26, 2018 // Madison, WI 2019 dates and location to be announced. CUNA Fair Lending Workshop August 15-16, 2018 // San Diego, CA *eSchool is available. Please note: All dates and locations are subject to change.

Cannabis and Banking: Know the Implications Although 30 states and the District of For example, most credit union But before doing so, credit unions Columbia have legalized some form leaders who opt out don’t want to should consider four primary risks: of cannabis, and 400 U.S. financial serve “plant-touching” businesses, u Compliance with Bank Secrecy institutions provide accounts Knight says. Act/anti-money laundering statutes. for marijuana-related businesses Will your local U.S. attorney make (MRBs), the federal government still an example of you? Do you have the classifies the drug as a prohibited capacity to monitor these accounts to Schedule 1 narcotic alongside heroin, weed out bad actors? LSD, and ecstasy. u Reputation. Do current members “This has created an untenable want you to do this? What about uncertainty in the banking system,” your local community? says Brian Knight, executive vice u Balance sheet, including president and general counsel for the concentration, lending, and liquidity National Association of State Credit risks. Union Supervisors. “Congress needs u Operational. Does your bond to address this either way so we iStock cover misdeeds due to MRBs? Will know what the rules are and we can But what about a landlord who your human resource policy allow move forward.” gets rent from an MRB and deposits marijuana use among employees? Regardless of whether credit it at the credit union? And what “If you lend to an MRB, treat unions plan to serve MRBs, they about MRB employees, restaurants it as an unsecured loan,” Knight need to understand the implications where MRB employees buy food says, because foreclosure might not of their decision, he says. “Those with “weed money,” contractors who be an option due to lingering legal of you who are out have more to work at the dispensary, or attorneys questions. “Also, you’ll want to crawl consider than those who are in. and accountants who serve MRBs? all over the people who own these Those who are out need to think The path is clearer for those who businesses” to make sure they’re on about what ‘no’ means.” decide to serve MRBs, Knight says. the up-and-up.

Create a Deposit ‘Battle Plan’ Overheard Centuries ago, countries would go u Use internal data analytics to to war over access to waterways. For understand concentration risks, ‘PRIVACY IS NO credit unions, those waters are their liquidity concerns, and potential liquid deposit accounts, says David migration costs. LONGER A THING.’ Koch, president/CEO of Farin & u Research market share Associates. demographics to build potential Lee Wetherington, director of strategic insight at Jack Henry “You need a way to have water “share of wallet” expectations. u & Associates. He told attendees continually flowing into your credit Determine the right time to engage at the 2018 CUNA CFO Council union,” Koch says. in deposit “battles.” Conference that “all Social He offers a “battle plan” to attract u Establish markers for “pulling out” Security numbers have been more funding: if you’re not succeeding. breached multiple times in u Have the right products in the right u Ensure you have an adequate the last four or five years.” target markets. measurement process (data and u Develop resources to identify the impartial review) to determine right prospects. success.

46 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org u OPERATIONS u TRENDS u SOLUTIONS

Three Ways to Boost Cybersecurity Preparedness How can credit unions ward off implemented workarounds to physical separation of zones of today’s sophisticated cybersecurity security procedures. information. The White House, threats? “We need to design systems for she says, had many “zones of Theresa Payton, the first woman the human psyche,” Payton says. information,” mostly for budget to serve as White House chief “When was the last time you did a reasons. Having separate zones information officer and star of the walkabout to see if you’re losing the of information for different reality TV show “Hunted,” offers line of sight of your data? We’ve functions allows organizations to three steps: focused on protecting servers, data, “flip a kill switch” when fraudsters 1. Do a “walkabout” around the cloud, internet of things, and compromise a particular zone. your credit union. Ask staff on processes, but not the human “Think about how to create what you do well and where psyche. The game has changed different zones of information in you fall short when it comes to since we were busy securing the credit union,” Payton advises, information security, and try to components.” “and where to put logical and determine where employees have 2. Think about logical and physical zones of separation.” 3. Boost your digital security response planning. Ransomware is especially concerning today. She suggests practicing how to respond to a potential ransomware event, which often involves the loss of data. “When you have a plan and practice it, the disaster will be a lot smaller and will be resolved faster,” Payton says. “It always takes 400% to 600% longer than anticipated to resolve these events because people iStock don’t think through everything.”

Know Your Risk Management Fundamentals Brian Heim, founder of IRR- element. Credit unions gather their takes place when the model has analytics, breaks down the core data, which is integrated into created its output and the team has fundamentals of risk management, the model while applying certain acknowledged any limitations in including: assumptions. the results. u Policy. “Policy is the mechanism u Reporting. Heim says reporting “You want to avoid any implica- for communicating the risk appetite is often overlooked, and it should tions of precision accuracy and cer- for of the credit union,” he says. be designed so nontechnical people tainty,” Heim says. “We encourage our clients to can understand it. u Discuss results for action use language that doesn’t include “It’s helpful if other managers or deliberate inaction. At this jargon so nontechnical folks can who aren’t familiar with finance can point, credit unions should understand.” pick up your report and understand consider if they are managing risk u Technical model elements. Most your risk profile just by looking at appropriately, and how they might credit unions use vendors to help the first few pages,” he says. proceed if another recession or them build their technical model u Model output discussion. This financial crisis would occur.

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 47 TOOLS OF THE TRADE

Mentor Future Leaders Provide development opportunities for young professionals at your credit union. Patrick Totty

One of the credit union paradigm-changing technology industry’s great concerns is how such as smartphones or dramatic to train young people to join shifts in financial industry practices, the movement and carry on its every would-be leader needs a philosophy. While credit unions are mentor. “Young employees” often doing a good job reaching millennials refer to those who are 35 years old through some sophisticated, high-tech or younger, according to leadership channels, how are they reaching out development experts. to the millennials and other youthful “One of our leadership employees who already work inside development purposes is to find their walls? mentors—or multiple mentors—for At some point, regardless of the young credit union employees who come to us for guidance,” ‘That outside says Lauren Culp, manager of The THE BEGINNINGS OF Cooperative Trust, a leadership voice of wisdom MENTORING outreach program sponsored by Filene Research Institute and can be really Mentoring is an ancient concept, supported by CUNA. “That outside going back to Greek mythology voice of wisdom can be crucial crucial.’ and Mentor. for those looking to enhance their The story of Mentor is found in leadership skills and advance their Lauren Culp Homer’s Odyssey. Odysseus, careers. the king of Ithaca, fights in the “Credit union professionals often Trojan War. While he’s away, share with us that finding a mentor is the well-known Crash programs, which bring young professionals to Odysseus has Mentor watch a challenge,” she continues, “so we’ve the industry’s biggest conferences over his son and the household. started working on a solution that at a lower cost, with additional Mentor serves as a teacher. can help match current leaders who custom content and networking Over time, the word “mentor” want to give back by mentoring next- opportunities.” has evolved to mean a trusted generation credit union employees who want to grow.” adviser, friend, teacher, and Two buckets wise person. It’s a fundamental The Cooperative Trust is piloting a guided mentorship program to help Kristin Ryan, director of learning form of human development that the industry bridge the gap, Culp says. events at CUNA, says she divides involves one person investing Once it completes the pilot program, the focus of leadership development the time, energy, and personal The Cooperative Trust will scale it for courses for young leaders into two knowledge in assisting another the entire credit union community. buckets. person with their growth and Even those who don’t have a “The first bucket is to make sure abilities. mentor can gain insight from their an emerging leader understands It’s often an ongoing or long- credit union colleagues. A worldwide the credit union movement and the term relationship that involves community of 1,800 young credit functions of their own jobs—technical a senior-level leader partnering union professionals, The Cooperative skills, such as knowing how to read with a junior-level employee Trust offers next-generation leaders an a balance sheet and understand to provide perspective or opportunity to learn and collaborate, economic trends,” she says. advice, says Steve Heinen, an Culp says. This means not only understanding executive coach who spoke at “All young credit union the role and functions of different the CUNA HR & Organizational professionals are invited and departments at the credit union, Development Council encouraged to join this free resource,” but also risk management, strategic Conference. she says. “The Trust also runs marketing, and what Ryan calls the

48 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org elephant in the room—compliance. Then, says Ryan, “there’s the second bucket, the warm-fuzzy side of leadership skills: knowing how to teach and motivate a team, building trust, and imparting useful knowledge. “In the past, the industry seemed to focus almost exclusively on bucket No. 1, looking primarily for technical skills,” she says. “But millennials, who now form a major segment of credit union workers, grew up seeing their parents work 9-to-5 jobs they hated and then come home unhappy. Seeing this again and again as they grew up, iStock millennials started saying, ‘We need a job/career that we feel passionate advocacy is knowing how laws are the larger one for help and vice versa about. We want to be part of a larger affecting credit unions and what because that relationship has already movement.’ ‘warriors’ can do to influence them.” been developed. There’s nothing “The arrival of the millennials did u Learning their story. This is a more unusual about mutual help. One of much to shift the industry’s focus personal section, where attendees tell the motivations at the heart of the to add more consideration of the their story. “How did you get to where credit union movement is sharing emotional and inspirational aspects of you are? What’s your story? These knowledge.” leadership training,” Ryan adds. questions help attendees gain insight The focus on personal and into their motivations,” Ryan says. Impact of a lack of mentoring emotional skills is not a nebulous u Learning to tinker. “Young What happens when a credit union exercise with mentors talking in professionals have an opportunity neglects the need to mentor future glowing abstractions. In an Emerging to bring a unique perspective to the leaders? Retention is negatively Leader Institute segment, attendees industry, but they need to be strategic impacted, and credit unions could learn what their management style is about presenting these ideas,” Ryan find themselves wondering why and how it functions during a crisis. says. “Completing in-depth research, they’re losing top talent. The first step is to assign a color to developing a well-thought-out “Reasons for employees leaving different types of management styles, plan, and presenting in a calculated include not feeling connected to the with red representing an assertive respectful way can be the most credit union or its management. Or personality, green an analytical successful process.” they don’t feel supported in their personality, and blue an altruistic and She describes the other leadership development,” Ryan says. “Many times nurturing personality. training programs that fall under her a solution doesn’t involve a pay raise. Using that color, attendees then management span. The Emerging It’s a desire to sharpen skills and take learn how they would—or should— Leader Institute focuses on two main on more responsibility.” interact with, or establish an effective topics: Understanding where you are technique for accommodating, as a leader and how you can improve individuals or teams that have the culture and development of those different styles. around you. Resources Topics covered at the Young Networking is always an attribute u CUNA: Professionals Conference include: of a strong conference. Many young 1. Emerging Leader Institute: u Understanding the credit union professionals can build their network difference. New leaders should and leverage this group to strengthen cuna.org/eli understand how and why the credit skills and techniques. 2. Young Professionals union movement got started, she says. “Say a small credit union is Conference: cuna.org/ypconference u Becoming an advocacy army. struggling with compliance, or a u The Cooperative Trust: cooperativetrust.com Leaders must become “advocacy large credit union isn’t as good at warriors or an advocacy army,” marketing as it wants to be,” Ryan u Crash program: crashwithus.com she says. “One important aspect of says. “The small credit union can ask

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 49 u DEVELOPMENT u SERVICE u EDUCATION

Visit to Kenya Showcases Cooperatives’ Impact Mike Reuter Rolling up your sleeves and engaging with credit unions 150% per farmer in some cases, resulting in more farm- on the ground is the best way to see the movement’s ers wanting to join the program. impact. SACCOs are benefiting by growing their agricultural In early March, a contingent of U.S. and international loan portfolio with lower delinquency rates, making it a credit union leaders visited Kenya on the first of several more attractive product for SACCOs to provide mem- field engagement trips in 2018 by the World Council bers than traditional loans. of Credit Unions. The goal of field engagements is to u Mwalimu National is making a big difference. deepen understanding, share knowledge, foster friend- Mwalimu National was one of several SACCOs the ships, and return home with stories that vividly illus- group visited to get perspective on SACCO differences trate the valuable work being done by the credit union in operational size, scope, and product offerings. As one movement with support from the World Council. of Africa’s largest SACCOs, with $37 million in assets Here’s a rundown of what participants witnessed and and 83,000 members, its operations are extensive and learned: entrepreneurial. u Kenya Union of Savings & Credit Cooperatives Ltd. Mwalimu National has a strategic focus on afford- (KUSCCO Ltd.) is the champion of the African credit able housing and plans to develop 871 units—one of the union movement. A visit with KUSCCO Ltd. included largest undertakings by a credit union in Africa. meeting with members of Kenya’s parliament, who are u Women are transforming SACCOs through lead- working with KUSCCO to articulate the impact that ership and empowerment. Every stop on the jour- savings and credit cooperative organizations (SACCOs) ney introduced the group to dynamic women who have in both urban and rural areas, especially for farm- are entrepreneurs, strategists, department heads, and ers. national chairwomen of the movement. u Farmers are thriving by participating in the Coop- Flora Mukiri and Teressa Mutegi are just two erative Development Program (CDP). CDP, adopted examples. Mukiri took up farming and, with the help in Kenya in 2016, is a World Council initiative in of World Council and her local SACCO, increased her partnership with USAID that is improving small rural yield, profits, and skills to sustain and grow her busi- producers’ income by working with local SACCOs in ness. And Mutegi, national chairwoman of Mwalimu offering a lending toolkit to finance, grow skills, and National, has been instrumental in achieving significant expand results for farmers and their SACCOs. projects that grow the SACCO and give back to mem- Increases in crop yield and harvest incomes are at bers and the community.

Young agronomists and soil experts assist farmers Busia Compassionate Centre Director Stella Egesa and participating in the World Council’s Cooperative World Council President/CEO Brian Branch discuss the Development Program. day’s work at the orphanage.

50 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org u Busia Orphanage shows how credit unions support their communities. The second leg of the engagement trip centered on volunteering at the Busia Compassion- ate Centre. Supported by World Council since 2007, the Centre champions the growth and education of orphans affected by the HIV and AIDS epidemic in western Kenya. The field engagement group planted banana trees, repaired rooftops and laundry lines, and created new well covers to keep the Centre’s water source clean and healthy. To learn more about the hosts during the Kenya field engagement, visit the websites for KUSCCO LTD. (kuscco.com), Mwalimu National (mwalimunational.coop), and Busia Compassionate Centre (doglobalgood.org/busia).

MIKE REUTER is executive director of the Worldwide Foun- dation for Credit Unions (doglobalgood.org). Contact him at Dr. Reverend Valerie Durrah reads to an orphan at Busia [email protected]. Compassionate Centre.

Linda Karimi, corporate affairs at Brian McCrory, World Council board KUSCCO LTD., gives an overview chair and president of the Irish to the field engagement group. League of CUs, engages with Busia Compassionate Centre orphans. Flora Mukiri is a farmer participating in the World Council’s Cooperative Development Program.

cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 51

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cuna.orgt JULY 2018t CREDIT UNION MAGAZINE 53 BRANCHING OUT A is for... B is for... C is for... Credit Unions A-Z

The real meaning behind the letters.

James Collins

is for “Argh!”, the sound a CEO makes when told the credit union’s exam has been both lengthened by a week and will come a few months early due to “scheduling difficulties.” extended by adding institutions— now—reasons. is for a name that rhymes with along with the eventual jail term. is for “underwriting,” derived “spank” and which can’t be is for “lien,” as in “The bank has from the Latin words “under” mentioned. a lien on my property.” (meaning beneath) and “writing” (the practice of writing coherent- is for “check,” an ancient form is for “mortgage,” a loan with ly). As such, this function technically of payment currently unknown security in real estate. This to all under the age of 30. means “beneath writing coherently.” differs from a credit card, is for “variable rate,” where is for “draft,” the same as a which is a loan with security in hope. checking account, but we can’t rates change based upon a is for “NCUA” or “The driver, such as the prime rate. call it as such because, you Regulator,” soon to be a know, reasons. This compares to a “fixed rate,” which movie starring Liam Neeson doesn’t change. Then there is the is for “escheat,” which who “redefines the cost of over- technically is the only time you “confused rate,” when members look concentration.” at a statement. can put the word “cheat” with is for “offage,” when the cash is for “wire transfer,” where anything, implicate the government, in a teller drawer isn’t the same the Federal Reserve uses the and get away with it. as its calculated balance—also Pony Express and a stage- is for “fraud,” which rhymes with referred to as the “branch manager’s coach to send cash between bank “God,” which is what one says curse” and “the last thing that accounts. after falling victim to it. happened before Bob left us.” is a colloquialism for where to is for “guarantor,” someone is for “peer,” a credit union of affix one’s signature, as in “sign who guarantees another similar size. Example: “You do on the X.” Ironically, it’s also person’s loan—a.k.a. “mom and not compare well to peers.” where treasure is located. dad.” Most CEOs agree peers should be is for “Y2K,” an end-of-the- is for “hold,” a temporary fired. world condition where com- reduction in the available is for “quitclaim deed,” when puter dates cease to function, balance until a charge is a property owner transfers leading to such disasters as hurricanes, processed. Example: “My math was title to another. Also a good tornadoes, and a Spice Girls reunion. perfect except for the hold.” name for a rock band. Of course, geeks know Y2K isn’t the is for “interest,” a charge when is for “risk,” as in, “As a year 2000 as a true “K” is equal to someone borrows money—not regulator, every loan you make, 1024. So we’re all doomed in 2048. Get it? Math. what people have in their finances. every deposit you take, we’ll be is for “zero percent,” as in, is for “joint account” as in, “I have watching you” (sung to the tune of “Our credit cards have a zero a joint account with my spouse “Every Breath You Take”). at the credit union.” This term percent introductory rate for is for “share account.” We 12 fortnights and may be increased may now have a different connotation can’t call it a savings account in states that allow recreational and due to arbitrary circumstances out- for, you know, reasons. side your control.” medical marijuana use. is for “time deposit,” known is for “kiting,” a way to cover as a CD in banks and share JAMES COLLINS is president/CEO at bad checks. In theory, the certificate in credit unions O Bee CU, Tumwater, Wash. Contact him at length of the kite can be for—if you haven’t caught on by 360-943-0740 or at [email protected].

54 CREDIT UNION MAGAZINE u JULY 2018 u news.cuna.org Engage Your Agents Optimize Your Contact Center

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