Around the States: Recent News Stories

Mar. 1, 2024 Stories

California AG Issues Warning to State-Chartered Banks and Credit Unions On “Surprise Overdraft” And Returned Deposit Item Fees

On February 22, 2024, California Attorney General Rob Bonta issued letters (the “AG Letter”) to California’s 197 state-chartered banks and credit unions warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). The AG Letter encourages the institutions to review their practices and policies regarding: “(1) surprise overdraft fees, which are assessed even when a consumer cannot reasonably anticipate that a debit or checking transaction will overdraw their account; and (2) returned deposited item fees, which are assessed when a consumer deposits a check that is returned, even when the consumer has no knowledge of or control over the circumstances that caused the check to be returned.”

California’s UCL prohibits unfair, unlawful, and fraudulent business acts and practices. A business act or practice is unfair if the gravity of the harm to the alleged victim outweighs the utility of the defendant’s conduct. Actions under the UCL for any noncompliance with the AG Letter may have significant consequences to small institutions. The UCL permits any person to bring a claim for specific or preventative relief. The UCL sets forth a civil penalty up to $2,500 for each violation in an action brought by Attorney General, District Attorney, County Counsel, and City Attorneys. The UCL further states “[i]n assessing the amount of the civil penalty, the court shall consider any one or more of the relevant circumstances presented by any of the parties to the case, including, but not limited to, the following: the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.”

Congratulations to President and CEO of California and Nevada Credit Union Leagues Diana Dykstra on her upcoming retirement! As a pioneer in the industry, her dedication and impact will be felt for years to come.

California/Nevada Leagues CEO, WOCCU Chair (and More) Diana Dykstra Announces Retirement Date

Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues, has announced plans to retire later this year after more than four decades of financial services leadership. Dykstra’s retirement date is set for July 1.

Dykstra has had one of the most high-profile careers in credit unions  over the past 40 years. Prior to leading the California and Nevada Credit Union Leagues for the past 14 years, Dykstra served as president and CEO of San Francisco Fire Credit Union, president and CEO of CoastHills FCU, senior vice president at Patelco Credit Union, and senior vice president at Golden 1 Credit Union, all in California.

CA and NV Leagues and Utah CU Association Form Alliance

The California and Nevada Credit Union Leagues, together with the Utah Credit Union Association, announced today they have entered into an agreement to form a joint association support services organization.

While each state entity will maintain governance of their respective advocacy operations, non-advocacy related services and back-office functions will be done by the new entity born of the partnership. Leadership from the three states agree the operating model maximizes efficiency while preserving state leagues’ identities, which is critical to advocacy efforts.

This Virginia Bank Wants to Rewrite the Rules for Banking as a Service

MainStreet Bancshares in Fairfax, Virginia, is taking a do-it-yourself approach to technology at a time when partnerships between banks and fintech firms are getting more complicated.

The $2 billion-asset MainStreet has trumpeted Avenu, its banking-as-a-service subsidiary, as a potential game changer since introducing it more than two years ago. At year-end 2023, MainStreet reported $35.3 million of Avenu deposits, $33.5 million of which were non-interest-bearing. MainStreet is forecasting Avenu will reach its projected breakeven point, $225 million of total deposits, this year.

As predictions go, that’s bold. If Avenu hits the target, it will have grown deposits more than 530%. The lion’s share of those deposits, moreover, would be non-interest-bearing, helping set MainStreet apart from an industry grappling with increased funding costs. It could also establish the 2-year-old subsidiary as an alternative to the way many banks have pursued embedded banking, through so-called middleware.

Feb. 23, 2024 Stories

Dietrich Kuhlmann to Assume the Role of Navy Federal Credit Union CEO

Navy Federal Credit Union today announced that Dietrich Kuhlmann will become its next president and chief executive officer on March 1, 2024. He will replace outgoing CEO Mary McDuffie, who announced her retirement in September of last year. Kuhlmann joined Navy Federal in 2019 after retiring from the United States Navy as a rear admiral and has spent the past two years as the credit union’s chief operating officer.

“Following the announcement of Mary McDuffie’s retirement last September, the Board undertook a months-long, rigorous process to identify the best leader for our credit union,” said Ed Cochrane, chairman of the Board of Directors at Navy Federal, which oversaw its CEO selection process. “Dietrich has shown an unwavering commitment to both his country and to his fellow men and women in uniform throughout his extensive career. These experiences make him the ideal person to lead this institution, and we know he will continue to serve our members superbly in the years ahead…”

How Much Does It Cost if a Credit Card Is Used? New NY Law Requires Disclosure

Under a new state law, businesses in New York are now required to clearly post exactly how much their products will cost if customers pay with a credit card, under a new state law that just took effect. The consumer protection law means stores can no longer post a sign on a door and at the register stating that credit card purchases will be subject to surcharges, according to the Associated Press. Instead, they will either need to list the higher credit card price next to a lower cash price, or they can just change the cost of items to the credit card price for everyone, the AP added…

Kentucky Credit Union League Announces Rebranding, Changes Name to Kentucky’s Credit Unions

As part of an extensive rebranding initiative, the Kentucky Credit Union League has announced a fresh identity, complete with a new name and logo. On January 26, 2024, the League Board of Directors officially approved the rebrand to “Kentucky’s Credit Unions,” in line with their mission to promote unity and provide outstanding service to credit unions throughout the state. This rebrand follows the merger of the Credit Union National Association (CUNA) and the National Association of Federal-Insured Credit Unions into America’s Credit Unions…

Beware of Fictitious CDFI Fund Social Media Accounts

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) would like to make the public aware of fraudulent social media profiles, email accounts, and phone numbers that attempt to impersonate or otherwise associate themselves with the CDFI Fund. Although the precise platforms and messages vary, these imposters provide false CDFI Fund employee and contact information, false links to a website alleged to be the CDFI Fund website, and a false telephone number. One social media profile scam identifies a nonexistent grant program, tells the public that it can receive free federal government grant money, and even displays a fictitious monetary disbursement. Therefore, please be cautious when clicking on links attributed to the CDFI Fund…

Feb. 8, 2024 Stories

Why Credit Unions Aren’t Automatically Picking FedNow

In making its pitch to credit unions, the RTP network — which is backed by banks — has to overcome a long-standing rivalry between the two types of financial institutions. But it seems to be doing just that. A growing number of credit unions are adding instant payments to their products and services, and some of them are choosing to use both — rather than either one — of the leading platforms. The Federal Reserve’s instant payments network, FedNow, launched in July and already has enrolled more than 300 financial institutions, including more than 50 credit unions. Read more

In Oklahoma: WEOKIE Discusses Value of Well-Priced Overdraft

One credit union that has markedly dropped its overdraft fee is contending that much of the bad press CUs and ODs are getting is unwarranted, and with many more members now using the service regularly, it is proof of the value of a well-priced overdraft. In August of 2021, the $1.5-billion WEOKIE Federal CU reduced its overdraft charge from $27.50 to $15. Read more

Newsweek: America’s Best Regional Banks and Credit Unions 2024

Regional banks and credit unions play a pivotal role in the financial fabric of communities nationwide. Unlike their larger counterparts, these institutions are deeply rooted in local economies, understanding the unique needs of the people they serve. The community engagement of credit unions extends beyond financial transactions. Many credit unions actively contribute to local initiatives, reinforcing their role as integral community partners. Read more

Corporate Central Celebrates Remarkable Achievement as 49 Employees Attain the CCUFC Designation

Corporate Central is proud to announce that 49 dedicated employees successfully earned the prestigious Certified Credit Union Financial Counselor (CCUFC) designation through the Credit Union National Association (CUNA) in 2023. This remarkable achievement comes as a result of participating in the CUNA Financial Counseling Certification Program (FiCEP). The program includes a series of webinars; learning and understanding the content of the 33-chapter, 5th Edition CUNA FiCEP book; and passing a 2-hour proctored exam. Read more

Feb. 2, 2024 Stories

Georgia on the Mind: An Explainer for Payments Companies Considering the Merchant Acquirer Limited Purpose Bank Charter

In January 2024, one of the largest U.S. non-bank merchant acquirers announced that it is pursuing a special-purpose bank charter developed by Georgia. Although the “merchant acquirer limited purpose bank” (MALPB) has been a charter option for non-bank payments companies for over a decade, non-banks have not been able to fully leverage it because card networks have not allowed them to be direct participants. That prohibition appears to be changing in light of this new application.

As a MALPB, a non-bank company can authorize, settle, and clear payments transactions for merchants and, importantly, enter card networks directly rather than through a bank sponsor. In doing so, a MALPB can own the transactions from end to end and eliminate various third-party risks. But this option also comes at significant costs and with compliance obligations.

This alert discusses some of the most important issues for non-bank payments companies considering the MALPB charter.

Read the full article authored by Venable LLP here.

MN Rep Gives Credit Unions a Shout-Out from House Floor

Craig, Angie

Rep. Angie Craig (D-MN) spoke on the House floor this week about the role credit unions play in their communities.

“As not-for-profit, member-owned financial institutions, credit unions work every day to improve the financial well-being of American households and communities,” Craig said.

She highlighted the work of the 86 credit unions in Minnesota, noting it is estimated that credit unions in the state provided more than $227 million in direct financial benefit. She added that credit unions play a vital role in her district, including their support for local athletic programs, veterans’ organizations, and community events, America’s Credit Unions reported.

Read the full article from CUToday here

Business Coalition Sues California Over Nation-Leading Climate Disclosure Laws

Thousands of large businesses operating in the state would be required to disclose their carbon footprint and climate-related financial risks under the laws. The U.S. Chamber of Commerce and American Farm Bureau Federation led a coalition of business organizations in filing a lawsuit on Tuesday aiming to block California’s two landmark corporate climate disclosure laws.

The measures signed into law by Gov. Gavin Newsom last year would “impermissibly compel thousands of businesses to make costly, burdensome, and politically fraught statements” about their operations around the world, the business groups said in their complaint filed in U.S. District Court for the Central District of California.

The plaintiffs are seeking a ruling blocking implementation of the laws, SB253 and SB261, on grounds that they violate the First Amendment by compelling speech on a “controversial” issue and that California is attempting to act as a de facto national emissions regulator. The Wall Street Journal was first to report the lawsuit.

Thousands of large businesses operating in the state will be required to disclose their carbon footprint and climate-related financial risks under the two first-in-the-nation laws. Notably, SB253 also requires companies to disclose Scope 3 emissions generated throughout their value chains.

Read the full article in Politico here

Advia Credit Union Excited for Future Growth in Illinois

Advia is excited to announce growth in Illinois – bringing additional opportunities to members in northeastern Illinois. The Board of Directors of Advia Credit Union announced that it has signed a definitive agreement to acquire NorthSide Community Bank, headquartered in Gurnee, Illinois, with branches in Gurnee, Mundelein, Niles and Riverwoods.

With this acquisition, Advia will serve approximately 200,000 members with thirty-two (32) branches in Michigan, Illinois, and Wisconsin. In Illinois, there will be a total of seven (7) branches in Gurnee, Mundelein, Niles, Riverwoods, Crystal Lake, Cary, and Woodstock. In Wisconsin, Advia has six (6) branches throughout Beloit, Janesville, Williams Bay, Elkhorn, and Silver Lake. Advia also has a total of twelve (12) branches in West Michigan and another seven (7) in Eastern Michigan.

The transaction, which is subject to regulatory and shareholder approval, and is expected to be completed in the third quarter of 2024, further strengthens Advia’s position within its service area in Illinois, Wisconsin, and Michigan. Currently ranked in the top 3 percent in the nation among credit unions in terms of asset size, Advia will have over $3 Billion in assets and over 550 employees. Founded in 1935, Advia has been serving members for nearly 90 years.

Read the full press release here

Jan. 26, 2024 Stories

Congratulations to Point West Credit Union and NASCUS Credit Union Advisory Council Member Amy Nelson, named one of Inclusiv’s Annie Vamper Helping Hands Award Winners

Amy Nelson is CEO of Point West Credit Union, overseeing the $110 million financial institution serving 14 Oregon counties. Amy’s commitment to advancing financial inclusion for historically marginalized communities has transformed Point West into a beacon of positive change for underserved markets. Her initiatives include expanding lending opportunities for ITIN borrowers and microbusiness owners, earning Low Income (LID), Community Development Financial Institution (CDFI), and ‘Juntos Avanzamos’ designations, and modernizing the cooperative’s community charter. Amy and Point West received industry awards, including the Innovation and Impact Award (Northwest area); CUHeroes, and more. Beyond Point West, she actively engages in financial empowerment, credit union regulatory and political advocacy through GoWest Credit Union Association and the National Association of State Credit Union Supervisors (NASCUS).

“Annie Vamper’s legacy inspires us to continue dedicating our efforts to serving low- and moderate-income individuals,” Nelson says. “True community impact is achieved through the combined strength of passionate teams, supportive credit union and community partners like our local non-profits, Inclusiv and GoWest Association, and our shared commitment to advancing financial wellness for all. This collaborative approach results in a collective impact which unites organizations under the shared mission of community development.”

This year’s awardees are Melissa Marquez, CEO, Genesee Co-op FCU, Amy Nelson, CEO, Point West CU and Kathya Pierre, CEO, 1199 SEIU FCU. Inclusiv is delighted to honor the legacy of Annie Vamper through these incredible CDCU trailblazers. Read more

Banks Fight Back Against ‘Right to Gripe’ Suits

Bank of America and U.S. Bank are fighting back against lawsuits alleging the two banks — in their terms of service — violated a California law that ensures customers have the right to air their grievances publicly.

The suits are part of a wave of recently filed cases that will likely help establish the scope of corporate liability under California’s so-called “Right to Gripe” law. The goal of the law is to protect consumers’ ability to complain online about their experiences with specific companies without the threat of retribution. Read more

Silver State Schools Credit Union and The People Over Profit Foundation Announce 2024 Scholarship Program for College-Bound Nevada High School Seniors
Silver State Schools Credit Union (SSSCU) is now accepting applications for the 2024 People Over Profit (POP) Foundation Scholarships for Nevada high school seniors. Since 1989, more than $1,100,000 in scholarships have been awarded to outstanding students to use toward higher education tuition.
The POP Scholarship Program recognizes students who demonstrate excellence in academics, extracurricular activities, and community involvement. Each year, ten recipients receive a renewable $2,000 scholarship for four years, up to $8,000 total. Read more

Summit Credit Union Announces Success with Join the Huddle Campaign

January 25, 2024 Summit Credit Union is pleased to announce the success of their fourth annual “Join the Huddle” campaign. In the months of August through December 2023, Summit Credit Union set-up an online auction for tickets to Carolina Panthers’ regular season home games. Each winning bidder was given the choice among five pre-selected charities for where to donate their bid funds. These charities included the Hamilton Scholarship Fund, Susan G. Komen Breast Cancer Foundation, Children’s Miracle Network Hospitals/Duke Children’s Hospital, Backpack Beginnings, and Wounded Warrior Project.

Summit Credit Union also held a “Summit Wears Pink Week” pledge drive in October where staff donated money to wear pink with jeans for the week. Staff raised $485 pledged solely to the Susan G. Komen Breast Cancer Foundation.

In total, Summit Credit Union raised over $4,000 for the Hamilton Scholarship Fund, Susan G. Komen Breast Cancer Foundation, Wounded Warrior Project, Children’s Miracle Network Hospitals/Duke Children’s Hospital, and BackPack Beginnings. 100% of pledges and auction proceeds will be donated to the five charities in January 2024. Altogether, Summit Credit Union’s Join the Huddle campaign has raised close to $15,000 for charity.

“The continued success of our Join the Huddle campaign is a testament to our commitment of giving back to the communities we serve, and we eagerly anticipate the positive outcomes the next charity fundraiser will bring,” stated Sam Whitehurst, President and CEO of Summit Credit Union. “Keep Pounding!”