“As the World of Plastic Changes, Credit Unions Are

Tools and Resources for Credit Unions • MARCH 2013

Trends and Topics Ol d e r Am e r i c a n s Ca r r y i n g Mo r e Cr e d i t of the Month Ca r d De b t Middle-income Americans age 50 “As Th e Wo r l d Of Pl a s t i c Ch a n g e s , and older are carrying more credit Cr e d i t Un i o n s Ar e Re a l i z i n g card debt on average than younger people. Those are Th e Ne w Po w e r o f Ca r d Opt i o n s ” the findings of The prophecy that cash would be basically obsolete by the year a study by Demos in collaboration 2000 was obviously a little overstated. with AARP’s Public Policy Institute. The report, In the Red: Older Americans Every day, however, plastic takes over more and Credit Card Debt, showed that and more of our financial transactions, and over-50 households carried an the latest developments in technology average debt credit card balance of and Member requests are presenting $8,278 in 2012. For those under 50, Credit Unions with new opportunities credit card debt averaged $6,258. Other key findings included: — as well as some threats of being n A third of households used left behind. credit cards to pay for basic living Consequently, the spotlight for expenses. n financial transactions has been Half of Americans age 50+ carried medical expenses on their focused recently on smartphones, credit cards. tablets, e-wallets, and all the other n A quarter of older households new toys that are stealing the headlines. said loss of a job contributed to However, two of the traditional cards are now being revisited their debt. n Nearly one in five (18 percent) by many Credit Unions and groomed for new opportunities. of older Americans nearing retire- These are the affinity card and the reloadable debit card. ment said they dipped into retire- This month’s AIL Blue Paper examines this new endeavor. ment funds to pay down credit card debt. continued on page 2 It’s titled, “As Th e Wo r l d Of Pl a s t i c Ch a n g e s , Cr e d i t Un i o n s Ar e Re a l i z i n g Th e Ne w Po w e r In s i d e Th i s Is s u e Of Ca r d Opt i o n s .” 2 Trends & Topics The paper shows how these two traditional cards are acquiring technology Report more features and getting a modern facelift. ◆ 3 Legislative Dispatch

For your complimentary copy, just contact your AIL representative or call the 4 Marketing Tips AIL Credit Union Center at 800-278-6661. Serving the Community

Published as a public service by the Credit Union Center of American Income Life Insurance Company, P.O. Box 2608, Waco, TX 76797. Call The Credit Union Center Hotline at 1-800-278-6661 with suggestions, questions and requests. Visit our website at: www.ailife.com 2 • March 2013 • Credit Union Lines

Trends and Topics continued from page 1 The report suggests that credit n Older Americans were twice as likely as those under card debt among older Americans 50 to take on credit card debt to assist other family is primarily a reflection of difficult economic times, not members (23 percent vs. 11 percent). a lack of personal financial responsibility. ◆

Pay m e n t s w i t h Mo b i l e De v i c e s In c r e a s i n g Rap i d l y Usage of Any Type of Mobile Payment by Age A new survey by SYNERGISTICS, Mobile Payments: Consumer Viewpoint, found that one-fourth of all house- 50 holds with Internet access use some type of mobile 40 payment — including bill payment, e-commerce, person-to-person payments, and contactless payments. 30 Four in 10 of the 18-to-34 age group — a demographic (%) many credit unions and banks are seeking to attract — 20 40 are mobile payment users. 25 24 SYNERGISTICS also found that four in 10 households 10 15 have some form of tablet device, and one-third of those 8 respondents reported that they use the devices for 0 online banking. Total 18 to 34 35 to 49 50 to 64 65+ “A significant portion of consumers now own tablets (Base = 1,020 Internet households) and e-readers,” said SYNERGISTICS CEO William H. A SYNERGISTICS Research Report McCracken, “and it is clear that users of these devices are widely embracing them for performing online rapid pace and mobile banking poised to overtake PC financial activities.” banking in the future. Security will remain a key issue, The survey indicates that the growth in usage of such however. devices for payments is “ushering in a revolution in The report concludes that providers of such services mobile activity,” need to understand the consumer perspective on mobile with changes banking and payment in order to broaden their use occurring at a successfully. ◆

Technology Report

CU Ro l l s Ou t Mo b i l e App Ai m e d a t Lo w e r -In c o m e Me m b e r s HOPE Credit Union in Jackson, Mississippi has introduced a mobile banking app aimed at expanding a standard accessory, regardless of income. By combining services to the unbanked and under- the HOPE Mobile app and a HOPE Anytime Debit Card, banked in the Mississippi Delta people can have a full service branch in the palm of region. their hands.” The new app is compatible with both Android and HOPE made a commitment at the 2012 Clinton Global iOS phones and will allow members to check account Initiative conference to double its presence and the balances and transaction history, transfer money number of people it serves across the Mid-South, and between accounts, and make deposits. The goal is to the app is a step toward achieving those goals. ◆ make the CU more accessible to those who do not have a credit union branch or deposit-taking ATM nearby. “This can be a game changer for unbanked communities and in places where the only financial options are check cashers, pawn shops, and payday lenders,” said HOPE CEO Bill Bynum. “Increasingly, smartphones are

Marketing Tips of the Month charity. Two runners up will have $1,000 donated to their Vi d e o Co n t e s t Fe a t u r e s cause and will receive $200 for themselves. All causes must be a designated a 501(c)(3) nonprofit organization. au s e s a n d a r t w h e e l s C C During the 2011 contest, the credit union had 37 entries Verity Credit Union in Seattle, Washington has re-launched and 15,000 votes — bringing a lot of traffic to the Verity its Cartwheels for a Cause contest — a successful program website. The viral exposure also keeps costs down, with that garnered positive publicity for the CU Verity only investing time and money to two years ago while involving the get as many people as possible to enter community and supporting charitable the contest. organizations. “We know Verity is inviting Washington residents that we do not 18 years and older to submit a 60-second need to do a lot of marketing to promote video highlighting the charity of their the voting phase,” said the CU’s choice. The video must contain a Marketing Manager, Melina Young. description of the cause and “a cartwheel, “We were not sure how it would work or anything representing a cartwheel.” At the close of the last time, but the voting phase really exploded.” contest, the public will vote on their favorite submission. The new competition is being promoted through online The grand prize winner of Cartwheels for a Cause will advertising, radio and print ads, and items in the receive $1,000 plus a $5,000 donation to their featured branches. ◆ continued on page 4

With 43 senators, Republicans have more than the 40 votes necessary to block, or filibuster, any presidential nomination that requires Senate confirmation. Senator Elizabeth Warren (MA-D), who set up the Ri c h a r d Co r d r ay CFPB agency after it was created by the Dodd-Frank Act, said, Co n f i r m a t i o n Im p e r i l e d “It has been four years since the financial crisis and Republican opposition, along with a ruling by a federal almost three years since the passage of the Dodd-Frank court invalidating several presidential appointments, has Act. The financial industry needs certainty, and families jeopardized the confirmation of Richard Cordray as need to know there is a strong and independent watch- director of the Consumer Financial Protection Bureau. dog on their side in Washington.” President Obama named Cordray to the position in a NAFCU’s chief lobbyist Dan Berger said that he thinks recess appointment last year, using his executive authority a deal can be made in which the CFPB becomes a three- to bypass the Senate. Without confirmation, Cordray’s or five-member commission with Cordray as chairman. term will expire at the end of 2013; if confirmed by the “From what has been indicated to us from numerous Senate, he will serve for a full five years. sources, the administration would be amenable to this The federal appeals court ruled that President Obama’s type of deal as long as CFPB continue to be funded out- ◆ appointments for three members of the National Labor side the congressional appropriations process,” he said. Relations Board were unconstitutional because the Senate was not in a formal “recess” at the time. The appointment NAFCU Se e k s Re g u l a t o r y Re l i e f Bi l l of Cordray was made the same day. NAFCU is working with lawmakers in Congress on Meanwhile, Senate Minority Leader Mitch McConnell a comprehensive regulatory relief package that would (R-KY), along with 42 Senate Republicans, sent a letter allow the trade association to tailor new Consumer to President Obama vowing to block any CFPB nominee Financial Protection Bureau regulations to credit unions. until Congress passes a law to revamp the agency. The The package would also authorize NCUA to delay and/or letter stated: “As supporters of strong and effective con- refine CFPB regulations, provided the objectives of the sumer protections, we write to you to reaffirm our con- regulations remain in place. Other provisions would cerns over the transparency and accountability of the modernize the Central Liquidity Facility, raise the cap Consumer Financial Protection Bureau (CFPB). on member business loans, and allow credit unions Accordingly, we will continue to oppose the consideration to raise supplementary capital and add low-income of any nominee, regardless of party affiliation, to be the communities to their fields of membership. CFPB director until key structural changes are made to The proposals were contained in a letter sent ensure accountability and transparency at the Consumer February 12 to leaders of the House and Senate who Financial Protection Bureau.” will be reviewing financial services reforms. ◆

Marketing Tips of the Month continued from page 3 for completing 15 or “Ge t in t h e Ga m e ” a n d Sa v e Mo n e y more items; $1,500 Forum Credit Union in Fishers, Indiana is inviting for 10 to 14 items; and members to “Take The Save It Up Challenge!” — a pro- $1,000 for seven to nine gram in which they can earn points for participating in items. The Official various savings activities and behaviors. The challenge Playbook lists items in three categories: Save Money, seeks to encourage better saving and spending habits Reduce Debt, and Get Financially Fit. Examples include and promote financial wellness. opening a savings account or 401K, refinancing a loan, Members can enter to win quarterly prizes and one and meeting with a FORUM representative or attending of three grand prices by a financial seminar. completing action steps to The Save It Up season runs from January 14, 2013 score points. The grand through November 30, 2013. Participants can sign up prizes are as follows: $2,000 until September 30, 2013. ◆

Serving the Community CU Do n a t e s $1,500-Pl u s Ca r Do n a t i o n He l p s fo r Pe t Ad op t i o n Th o s e in Ne e d Texas Dow Employees Credit Union in New England Federal Credit Union Victoria, Texas recently presented a gift has donated a 2003 Ford Explorer to of $1,520 to Adopt-A-Pet of Victoria. Good News Garage in Williston, The funds were raised through a holiday Vermont, whose mission is to “create gift card promotion in which $1 for each economic opportunity by providing TDECU gift card purchased was earmarked for donation affordable and reliable to a local animal transportation options shelter. The CU for people in need.” then matched the Unlike other car donation programs, Good News donation dollar for dollar. Garage repairs as many donated cars as possible in Adopt-A-Pet of Victoria is a no-kill pet orphanage and order to provide them to low-income individuals and adoption service. They also spay or neuter more than families who 1,300 dogs and need access cats each year to employ- from the area ment, shopping, school, and medical facilities. to reduce the Since 1996, Good News Garage has matched more than number of 4,000 cars throughout New England. The organization unwanted tows donated cars free of charge and has car donation puppies and kittens and provide low-cost vaccinations drop-off locations in all New England states. and other veterinary services. Good News Garage is a program of Lutheran Social TDECU’s donation will help the organization carry Services. ◆ out its mission of rescuing, rehabilitating, and finding loving homes for homeless animals. ◆