How long can CUs’ Tackling the growing Is there a lending bubble Using technology to 10 hot streak last? 11 fraud threat 12 on the horizon? 14 leverage new FOM rule CUJOURNAL.COM • @CUJOURNAL THE RESOURCE FOR GROWTH-ORIENTED CREDIT UNIONS VOL. 21 | NO. 1 | JANUARY 2017 lending growth strategies payments technology compliance Credit unions have enjoyed a multiyear run of solid growth in THE YEAR membership and originations. Rising rates and the potential for regulatory overhaul could mean new competition — just AHEAD as refi volumes are set to fall marketing human resources economy branching CUJ_Cover_FINAL.indd 1 1/12/17 8:54 AM 002_CUJ011617 2 1/9/2017 4:55:37 PM CONTENTS JANUARY 2017 / VOL. 21 NO. 01 06 A Very Good Year CUs saw double-digit loan growth in the 12-month period that ended in Q3 2016, including more than $847 billion in total loans. Here are some highlights: Overall loan growth 10.1% New auto loans 15.8% 08 MBLs 14% New student loans 10% Total real estate loans 8.2% Source: NCUA 10 Compliance Technology Lending 09 HOUSE BANKING PANEL 11 TARGETED ATTACKS 12 WILL LONG-AWAITED SHAKES UP LEADERSHIP COULD BE BIGGER RISK BUBBLE MATERIALIZE IN 2017? The House Financial Services Com- Massive data breaches grab the The data shows an increase in de- mittee will see a shuffling of deck headlines—and have happened so linquency rates for consumers with chairs among the leadership of its often that consumers, bleary-eyed poor credit, but the bulk of troubled subcommittees in the new Con- from breach fatigue, hardly notice subprime loans aren’t coming from gress as it also welcomes ten new them anymore—but the smaller, credit unions—for now, at least. Republican members. But some more strategic hacks may take a Experts share a mixed bag of data things predictably stay the same. greater toll on credit unions and that suggests CUs can’t ignore the other organizations in 2017. potential danger. Opinion 14 GROWTH IS GOOD, BUT IT COMES AT A COST Growth Strategies 07 WHY BANKS AREN’T The potential for growth as a result LINING UP TO CONVERT of the National Credit Union Admin- 16 CREDIT UNIONS ON It’s one of credit union advocates’ istration’s revised field-of-member- FOREFRONT OF WAGE WAR favorite arguments: if the tax ship rule could be dwarfed by the Call it the $15 question: will more exemption is so great, why don’t costs of the technology upgrades states raise their minimum wage more banks change charters? Here needed to leverage this opportuni- levels, and will the federal govern- to answer that question is Keith ty—as well as to deal with the kind ment jump in? A number of credit Leggett, a former American Banker of stuff CUs don’t want to see grow, unions have already joined the Association lobbyist. such as collections and complaints cause—here’s why. Credit union Journal is published monthly with additional issues in February, May, August and November by SourceMedia, One State Street Plaza, 27th Floor, New York, NY 10004. Subscription price: $139 per year in the U.S.; $169 for all other countries. Periodical postage paid at New York, NY, and additional U.S. mailing offices. POSTMASTER: Send address changes to Credit Union Journal/SourceMedia, 1 State Street Plaza, New York, NY 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. 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All rights reserved. www.cujournal.com cujournal.com CREDIT UNION JOURNAL JANUARY 2017 3 003_CUJ011617 3 1/12/2017 5:48:56 PM EDITOR’S NOTE www.cujournal.com One State Street Plaza, 27th floor, New York, NY 10004 Tel 212.803.8200 Fax 646.264.6800 Lisa Freeman Editor in Chief Editor in Chief Lisa Freeman 561.429.6107 [email protected] Assistant Managing Editor Aaron Passman 785.979.4218 Resolve to check out the [email protected] West Coast Correspondent Michael Bartlett 702.256.8252 new Credit Union Journal [email protected] Reporter Palash Ghosh WELCOME TO THE NEW CREDIT UNION JOURNAL. unions can leverage the hidden opportunities and 212.803.8711 [email protected] After much thought, research and preparation, we mitigate the challenges that abound in the market Technology Correspondent are starting o the new year with a newly inspired today. W.B. King 914.671.6421 [email protected] monthly magazine, as well as a totally reimagined On the digital side, the new CreditUnionJour- Associate Art Director website all designed with our deep commitment to nal.com o ers a fully responsive site that delivers Neesha Haughton 212.803.8815 the credit union community in mind. an enhanced cross-platform user experience with [email protected] Our goal: bring you even more of the in-depth a modern design o ering easier navigation, stron- analysis, intelligence and commentary you’ve come ger graphics and better overall access to content, Group Editorial Director, Banking & Capital Markets to depend on Credit Union Journal for in a crisp, such as the continuous scrolling page load func- Richard Melville compelling format, both online and in print. tionality. VP, Research Dana Jackson In each issue of the print publication, you can What hasn’t changed? Our dedication to the VP, Content Operations and expect to see beneath-the-surface insight into the credit union community. Building on our 20 years Creative Services Paul Vogel things that matter most to credit unions: lending, of covering this cooperative industry, our goal is to Director of Creative Operations technology, growth strategies, compliance issues provide you with the intelligence and resources you Michael Chu and more, teamed up with visuals that not only grab need to continue thriving in an increasingly compet- Director of Content Operations Theresa Hambel the eye but inform. itive marketplace. Moreover, longer-form stories o er the opportu- Publisher John Wiley nity to dig deeper. We don’t just report what hap- Editor in Chief Lisa Freeman can be reached at lisa. 626.765.1256 pened—we examine what it means and how credit [email protected]. [email protected] Vice President of Sales, Banking & Payments Dennis Strong 212-803-8372 CALENDAR 2017 [email protected] Classified Advertising Director of Sales JoAnne Kao JANUARY FEBRUARY 26-MARCH 2 APRIL 10-14 212.803.8325 [email protected] CUNA Government Affairs Conference, Wash- NAFCU CEOs and Senior Executives Confer- JANUARY 15-18 ington Convention Center, Washington. ence, Fontainebleau Miami Beach, Miami, Fla. Customer Service CUNA Volunteer Conference, Montego Bay, FOR INFO: 800-356-9655, Ext. 5700 FOR INFO: http://www.nafcu.org/conferences/ [email protected] or (212) 803-8500 Jamaica. Venue: TBA For more information about reprints and FOR INFO: www.cuna.org APRIL 11-13 licensing content from Credit Union Journal, MARCH Cornerstone CU League Annual Meeting, please visit www.SourceMediaReprints.com or JANUARY 29-FEBRUARY 2 Omni Hotel, Fort Worth, Texas. contact PARS International Corp. CUES Symposium: A CEO/Chairman Ex- MARCH 27-30 FOR INFO: Tamra Fairbrother, 800-442-5762, (212) 221-9595 change, Frenchman’s Reef and Morning Star CUNA & Association of Credit Union Internal X 6632 Marriott Beach Resort, St. Thomas, VI. Auditors Internal Audit Certification School, Group Marketing Director FOR INFO: www.cues.org Orlando, Fla. Venue: TBA. APRIL 12-14 Jeannie Nguyen FOR INFO: www.cuna.org Mountain West 2017 Annual Convention, Marketing Manager Fairmont, Scottsdale, Ariz. Raquel J. Lucas FEBRUARY FOR INFO: Nicole Brusewitz, 720-479-3200 APRIL FEBRUARY 7-8 APRIL 17-19 CUNA Business Lending Roundtable, Tempe, APRIL 6-8 Ohio Credit Union League and Affiliates Annual Chief Executive Officer: Douglas J. Manoni Ariz. Venue: TBA. Hawaii Credit Union League Annual Meeting, Meeting, Hilton Downtown, Columbus, Ohio. FOR INFO: www.cuna.org Grand Hyatt Kauai Resort & Spa, Kauai. FOR INFO: (800) 486-2917, ext. 2447 Chief Financial Officer: Michael P. Caruso FOR INFO: (808) 941-0556 Chief Revenue Officer: Marianne Collins FEBRUARY 21-23 APRIL 20-21 EVP & Chief Content Officer: David Longobardi NAFCU Strategic Growth Conference, Francis APRIL 6–8 Michigan Credit Union League Annual Chief Marketing & Digital Officer: Minna Rhee Marion Hotel, Charleston, S.C. Illinois CU League Annual Meeting, Renais- Meeting, Amway Grand Plaza Hotel, Grand SVP, Conferences & Events: John DelMauro FOR INFO: http://www.nafcu.org/conferences/ sance Schaumburg Hotel & Convention Rapids, Mich. SVP, Human Resources: Ying Wong Center FOR INFO: (800) 262-6285, ext. 231 FOR INFO: Melanie J. Murphy 800-942-7124 4 JANUARY 2017 CREDIT UNION JOURNAL cujournal.com 004_CUJ011617 4 1/12/2017 5:48:57 PM GAC17_speakerad_10.5x12.5_PRINT_PDFX1a.pdf 1 1/3/17 11:51 AM GEN. COLIN POWELL, USA (RET.) FORMER UNITED STATES SECRETARY OF STATE C M Y CM MY CY DERRECK KAYONGO BUSINESS INNOVATOR AND CEO FOR CIVIL CMY AND HUMAN RIGHTS K KAT COLE GROUP PRESIDENT, FOCUS BRANDS The 2017 CUNA Governmental Affairs Conference is the premier conference for political impact, credit union networking, and industry insights.