January 5, 2011
NH member growth outpaces national average through first three quarters of 2010
Credit Unions in New Hampshire grew much more rapidly than the national average during the first three quarters of 2010. Nationally, despite all the good publicity credit unions have generated from campaigns such as MoveYourMoney.org or consumer backlash against big banks, the enthusiasm does not appear to be translating to membership growth. Nationally, credit unions grew at a 0.7% rate through September 30.
However, in New Hampshire, credit union membership grew more than 4% through the first nine months of 2010. According to call report data there were almost 20,000 more New Hampshire credit union members on September 30, 2010 than there were on December 31, 2009.
Shares at New Hampshire credit unions also posted impressive growth with an increase of almost 9% through the end of Q3, 2010.
Like New Hampshire, many of the states that reported healthy increases in membership in 2010 such as Pennsylvania, Michigan, and New Jersey have statewide image advertising campaigns.
Regulators set supervisory expectations for Internet authentication
The National Credit Union Administration (NCUA), along with federal bank and thrift regulators, issued a supplemental guidance on Internet banking authentication late last week to update supervisory expectations.
The guidance, also meant to reinforce the practices of risk management specified in a 2005 authentication guidance, updates supervisory expectations for the effectiveness of member authentication, layered security, and other controls used to secure member accounts and fight fraud.
Convenience and cost savings have driven up the use of online transaction services since the 2005 Authentication in an Internet Banking Environment was unveiled, the NCUA noted in its Letter to Credit Unions (10-CU-24), and the "Internet threat landscape has changed significantly."
"Sophisticated hacking techniques and growing organized cybercriminal groups with expertise, skills, and resources are increasingly targeting financial institutions, compromising authentication mechanisms, security controls and engaging in online fraudulent activities," the agency noted.
The NCUA letter, signed by Chairman Debbie Matz, encourages federal credit unions to implement the supplemental guidance to help secure members' online accounts and sensitive member information.
Please click on this link to access the authentication guidance: Letter to Credit Unions (10-CU-24)
NCUA tech corrections bill could become law this week
A technical corrections bill that would provide the National Credit Union Administration (NCUA) with new tools to address both troubled individual credit unions and the larger corporate credit union crisis could be signed into law this week, and the Credit Union National Association (CUNA) plans to closely monitor its implementation going forward.
The legislation, S. 4036, was approved on the final day of the 111th Congress. The legislation will alter the Federal Credit Union Act by permitting the NCUA to make payments to the Temporary Corporate Credit Union Stabilization Fund without borrowing from the U.S. Treasury.
The legislation also clarifies that the equity ratio of the National Credit Union Share Insurance Fund (NCUSIF) is based solely on the unconsolidated financial statements of the NCUSIF.
The legislation will also give credit unions the ability to count Section 208 assistance as net worth for the purposes of prompt corrective action (PCA).
Under the terms of the legislation, the Government Accountability Office will investigate the NCUA in an attempt to uncover the reasons for recent corporate credit union failures and evaluate the adequacy of the NCUA's response to the failures of the corporates.
The resulting report, which will be delivered to the Senate Banking Committee and House Financial Services Committee within six months after the legislation is enacted, will also evaluate the effectiveness of the NCUA's PCA implementation and examine whether the agency has been effective in implementing recommendations made by its Inspector General and contained in Material Loss Review Reports.