Published by the Credit Union Association of New York

Getting ready for EMV, pg. 8 • Younger directors, younger members, pg. 28
Published by the Credit Union Association of New York
September 2012
In New York, auto lending
opportunities continue
to grow
www.cuany.org

2 Chairman’s Letter
Members matter most
September 2012
3 President’s Message
What will you learn this fall?
Cover Story
4 Feature
In New York, auto lending opportunities continue to grow
In Every Issue
4
8 Payment Solutions
Getting ready for EMV
10 Governmental Affairs
Get out the vote!
14 Regulatory Compliance
You just received a garnishment order. Now what?
18 Mortgage Industry
Collection strategies: Working with members to reduce delinquencies
24 Human Resources
Status check: How well are you engaging your employees?
26 New York Credit Union Foundation
The New York Credit Union Foundation: Yesterday, today and tomorrow
32 Member Services
Q&A with The Disclosures
34
Connection is provided as a service to members of the Credit Union
Association of New York.
Louis Jimenez, chairman, Credit Union Association of New York
William J. Mellin, president/CEO, Credit Union Association of New York
Editorial/Creative:
Mindi Schwab, editor
Cecilia Markham, senior graphic designer
Advertising: Deborah Testa, (800) 342-9835, ext. 8138
Association Office: (800) 342-9835
Connection is an official publication of the Credit Union Association of
New York and its affiliates. Opinions expressed in the magazine do not
necessarily reflect the views of the Association and its subsidiaries. One
free subscription (4 issues per year) is provided to member credit unions
as a benefit of Association membership, with additional subscriptions
available at $30 each. To subscribe or submit address changes, e-mail
publications@cuany.org or write the Association at P.O. Box 15118,
Albany, NY 12212-5118. Connection is also available in the Publications
section of the Association website. ©2012, Credit Union Association of
New York.
www.cuany.org
www.facebook.com/cuany.org
34 InFoCUs
GPO FCU partners with Filene to help members ‘SaveUp’
36 Balance Sheet Solutions
Boardroom excellence: The importance of financial literacy training
40 E&T Milestones
Features
20 Becoming a brand advocate for your credit union
28 Younger directors, younger members
Winner: APEX Award 2001, 2002, 2004–2008, 2010, 2012; CUNA Marketing
Council Diamond Award 2000–2002, 2004–2006, 2012; Pro & Blockbuster
Award 1997–2003, 2006–2008; Communicator Award 2008, 2009, 2012;
Hermes Creative Award 2010, 2012
www.cuany.org 1

chairman’sletter
Members matter most
YOU LOOK ACROSS NEW YORK STATE, YOU’LL FIND 428
credit unions serving 4.6 million members. Look nationwide, and
you’ll IIF
find 7,351 credit unions serving 93.9 million members.
These numbers are truly impressive…but they’re just the
beginning. Right now, in 100 countries around the globe,
there are 51,000 credit unions serving 196 million members!
We often talk about the fulfillment that comes with being
part of something bigger than ourselves. What could be more
fulfilling than being one of 51,000 credit unions that focus on
helping people every day? Yes, each of our credit unions is
different. We serve different communities, implement different
strategies and offer different products and services. But no
matter where you are in the world, you can rest assured that
what matters most to all of our credit unions are our members.
Members matter most. It’s the theme of International Credit
Union Day this year, and I think it fits the occasion perfectly.
On October 18, credit unions across the globe will come
together to celebrate our cooperative roots, our international
impact and—most importantly—our commitment to our
members.
By putting our members first, our movement has been able
to grow and thrive during these challenging times. Internationally,
credit unions welcomed 8 million new members in 2011. And
here in New York, we continue to outpace national averages in
membership growth, assets, shares and loans. These numbers
reveal an exciting trend: More and more people are discovering
and embracing the credit union difference. They’re realizing
that their needs and goals matter at a credit union—and that
they don’t have to settle for less.
At Montauk Credit Union, our members come from all
walks of life. Those who enter the taxi industry are invariably
from another country, culture and background. They come to
us because they’re too intimidated or uncomfortable to walk
into the big banks. We help them achieve their American dream,
from that initial business funding to home purchases and
college educations. I can’t tell you the number of checks I’ve
signed made out to Harvard, Cornell, Duke and a host of
medical, law and post-graduate universities! It’s deeply rewarding
to see…and I know you all have similar stories from your own
credit unions.
Take a look at our most recent MORE Report, and you’ll
see just how much members matter to us here in New York
State. They’re the reason we work to build financial literacy
among youth and adults, or host VITA sites during tax season.
They’re the reason we invest time and funds in our communities
and reach out to underserved markets. They’re the reason we
hike the Hill to defend and advance our mission. Quite simply,
they’re the reason we exist.
And what better time to celebrate this than on International
Credit Union Day? For more than 30 years, the third Thursday
in October has served as a reminder of our cooperative roots and
our global reach. No matter where we’re located, International
Credit Union Day is an opportunity for us to honor our history
and promote the credit union difference in our communities.
This year, it’s part of an even larger celebration: the United
Nations’ International Year of Cooperatives. And with the
theme of “Members matter most,” it’s the perfect time to
remind our members that they truly matter.
Whether you host a member appreciation event, support
a community initiative or find another unique way to
commemorate October 18, I encourage you to join the
celebration. Take advantage of opportunities to connect with
your community, your media, local legislators and other leaders.
And most importantly, take a moment to appreciate the
great, global movement we are all a part of. Because of credit
unions like ours, 196 million people have been provided with
a cooperative, non-profit financial services option. We matter
because they matter—and that’s something we should celebrate
every day.
Louis Jimenez
Chairman of the Board
Credit Union Association of New York
2 SEPTEMBER 2012 Connection

president’smessage
What will you learn this fall?
SEPTEMBER, WHICH MEANS ONE THING FOR MANY
families: Time to go back to school. Whether you’re getting
used IIT’S
to life without your college student again (like me),
dropping your kids off at school or just seeing the big yellow
buses travel their familiar routes, it’s hard not to be reminded
that school is back in session.
And with that reminder comes another one: Learning is
an essential part of our lives, no matter how old—or wise—
we are. In the words of former President Harry S. Truman,
“It’s what you learn after you know it all that counts.”
In order to keep growing and evolving, we must expose
ourselves to new information, new ideas and new ways of
thinking. Why do we as a society place so much value on
education? Because it empowers us to lead and succeed.
With that in mind, I’d like to ask you an important
question. What will you learn this fall?
At the Association, one of our core areas of service is
education and training. We recognize that education is one of
the most valuable benefits we can provide to you, our member
credit unions—and that’s why we work year-round to deliver
webinars, conferences and special events that cover the most
relevant topics and issues. It seems fitting that our biggest
event, the Annual Meeting & Convention, typically happens
just before the end of the school year!
Each educational opportunity we offer is unique, but
they are all designed to do one thing: empower you to lead
and succeed.
Take a look at our Events & Education calendar, and
you’ll find dozens of fall events and webinars. One highlight
is our premiere, multi-state Economic Forum in November,
which will feature leading economists, strategists and
investment consultants. We’re also bringing back popular
conferences for volunteer leaders and marketing professionals,
as well as our annual CEO roundtable event.
No matter what you choose, each of our educational
opportunities will expose you to new information, new ideas
and new ways of thinking. They will also enable you to dialogue
with your peers and build valuable social connections. As
someone who will be attending most of these events, I’m already
looking forward to connecting with fellow attendees and
leaving with fresh ideas and perspectives.
So why not make this fall a season of learning? Choose
an event or a webinar, get registered, and learn something new.
Your days of riding the school bus and sitting in the classroom
may be over, but you—and your credit union—still benefit
from every minute you spend as a student.
And as you gather with your management and boards to
plan for 2013, I hope you’ll look for opportunities to promote
learning and professional growth beyond this “back to
school” season. Consider how you or your staff might benefit
from attending a conference or completing a certificate program.
More importantly, consider how your members might benefit.
We all know that the ROI on education goes far beyond
mastering a skill or concept.
So, in the spirit of learning, I’d like to leave you with a
little homework assignment. It’s not difficult, and there will be
no grading! Before you continue with your day, I encourage
you to ask yourself the following questions.
What would you like to learn this fall? What skills or
insights would you like to contribute to your credit union
and your members? And as opportunities to promote the
education and growth of others arise, will you seize them?
The answers—and the results—are up to you! ■
William J. Mellin
President/CEO
Credit Union Association of New York
Follow @wjmellin
www.cuany.org 3

featurestory
In New York, auto lending opportunities
continue to grow
By Ray Birch, Guest Contributor
NEW CAR SALES ARE COMING BACK, BUT CREDIT UNION AUTO
lending is not keeping pace with the increase, according to
national statistics.
However, that’s not the case in the Empire State.
New York credit unions (2.41 percent) easily outpaced
the national credit union auto loan growth average (.32
percent) in 2011, and this year CU Direct Corp. reports that
credit union auto loan portfolios in New York are on track
with the rise in new car sales.
“Nationally, auto sales continue to increase. I have seen
reports around 20 percent year-over-year growth,” says Bob
Nealon, regional VP of CU Direct Corp. “Credit unions in
New York that are using CU Direct are reporting increases
in auto loan volume relative to the
pick-up in new car sales.”
The opportunity is there, and
even more will come, notes Bill
Hampel, CUNA’s chief economist
and SVP of research and policy
analysis. He projects that annual new
car sales should reach 14.5 to 15
million units in the next two years
and 16 million shortly afterward—
which would bring new car sales
back to almost pre-recession levels.
What’s heating things up is pent-up demand, he explains,
noting that the average age of cars on the road is at a record
level: 10.5 to 11 years.
“There are people now who have changed their carbuying
habits and realize they don’t have to buy a new car
every three years,” says Hampel. “But there is a larger
segment that is tired of hanging onto that old car and dealing
with its problems. More consumers are feeling sufficiently
confident about their economic prospects and job security
that they will go out and buy. New car sales should be pretty
robust the next few years.”
Manufacturer incentives stealing new financing
Hampel also notes that, for some reason, credit unions
Empire State
credit unions are
competing effectively.
nationally are not getting their share of this growth. He
surmises that manufacturer incentives could be a big reason—
and now that U.S. automakers have retooled and improved
their manufacturing to run production lines in accordance
with consumer demand, they will begin to remove the
widespread incentives in the coming years.
Nealon believes one reason New York credit unions are
doing much better than the national average is because they
are simply working harder. “They realize the auto loan is the
best option for their portfolios now, in return and risk. There
is a lot of attention on interest rate risk, and auto loans, as we
know, turn over quickly,” he says.
Empire State credit unions are competing effectively both
on the direct and indirect sides, adds
Nealon. Indirect channels are faring best,
due to lenders building strong programs
based on excellent dealer relationships.
New member-focused efforts are
lifting the direct channel, as well. “We
are seeing more credit unions in New
York do more with preapprovals and
finding ways to engage the member
early on in the buying process so they
don’t lose them later,” notes Nealon.
Some of those steps are car-buying and
research tools on credit union websites, as well as automated
programs that make it simple for dealers to close a loan with
the credit union member.
The direct market is still very tough, according to three
New York credit unions—Nassau Educators FCU (NEFCU),
Hudson Valley FCU (HVFCU) and Olean Area FCU—that
are all growing loans well through indirect channels.
NEFCU placed 6th in the nation for 12-month auto loan
growth as of June 2011, according to Callahan’s 2012 Credit
Union Directory. Year over year, the credit union is up $96
million in its auto loan portfolio, a 44 percent increase over
2011. “We have been able to find pockets of business and
make them grow,” says Chuck Price, NEFCU’s AVP of lending.
4 SEPTEMBER 2012 Connection

NEFCU has done well with its BuyRite balloon loan—so
much so that it is backing off a bit on the product this year.
“We probably grew about $50 million in that product last
year, and that loan comes with some additional risk, with the
balloon payment at the end,” shares Price.
To do well with dealers, Price emphasizes that the credit
union has to be flexible with terms and offer a wide product
selection. The credit union, too, has to be aggressive on price.
“There is no service expectation from the dealer other than
they get the loan approved and funded quickly. You have to
be willing to lower your expectation on profit,” he asserts.
That means credit decisions and collections must be
strong. “Margins are so thin you can’t afford to take many
losses,” says Price, noting that NEFCU’s indirect delinquencies
are under 2 percent.
Dealerships and branches are equal
Thanks much to its indirect program, HVFCU saw a 95-
percent increase in auto lending in 2011 over 2010 and is up
30 percent this year. “We do well with indirect because we
have a competitive fee structure and we go after niches, such
as 84-month financing,” explains David Brand, the credit
union’s director of loan origination. “On used cars, we have no
model year or mileage restrictions, which is a big advantage.”
What has helped HVFCU dramatically improve auto
lending is lowering auto loan rates across the board by 200
basis points and reviewing credit standards in 2011. The credit
union’s average weighted rate now is 5.8 percent, and the
lowest rate any member can receive is 2.74 percent.
Brand shares, “After carefully reviewing our actual risk, we
adjusted some underwriting guidelines, which has helped
open the doors for more members to finance without
placing HVFCU at greater risk.”
According to Brand, a credit union must work the
dealer channel aggressively and manage it as if it is an
extension of the branch. “You have to be dedicated to
doing that. Make sure members get the same rate at the
dealer as in the branch. Don’t allow the dealer to buy the
rate up or down. Then if the member goes to the dealer,
they know they’ll get the same deal as they would stopping
by the credit union,” he says.
By the same token, the branch should not be selling
ancillary services, such as an extended warranty, that
takes money out of the dealer’s pockets. “If dealers find
out you are doing that, they won’t send you business,”
warns Brand.
HVFCU’s auto loan billboard and website advertising
stress that individuals can get great auto loan deals at the
branch or at the dealer. “We give each equal billing,” says
Brand. “We also place window stickers on dealerships’
doors or at the entry to the finance office that states
HVFCU financing is available.”
Dealer incentives are critical to the performance of
the indirect channel, notes Brand, adding that HVFCU is
changing its bonus structure. Instead of paying dealers
bonuses based on volume, the credit union soon will pay
based on loan amount, via a sliding scale that increases in
$5,000 loan increments, up to $35,000. Brand expects it
will increase the size of loans.
Brian Snyder, CEO of Olean Area FCU, believes the
key to making auto loans is standing out in the market.
The credit union has run a direct mail campaign that
included scratch-off tickets that revealed loan discounts
from .25 percent to 1 percent. Olean Area FCU also
conducts annual car sales on its lot. Seven dealers were
invited last time, and each brought 20 vehicles. “The
dealers sold 40 cars, and we made 40 loans,” says Snyder,
noting that the real benefit is community awareness. “It
reminded the community we are in the business of making
car loans, and it keeps us in the minds of the dealers.” ■
Guest contributor Ray Birch can be contacted at rbirch50@
hotmail.com or (513) 724-2035.
www.cuany.org 5

paymentsolutions
Getting ready for EMV
By Kimberly McCumber-Ploof, Chief Operating Officer, Covera
EMV CARDS. CHIP TECHNOLOGY. IF YOU FOLLOW THE
payments industry, you’re seeing these terms more and more
often. So what’s all the buzz about EMV card technology,
and what should your credit union be doing to prepare for
its move to the U.S.? Let’s take a closer look.
How EMV works
EMV cards (named for Europay MasterCard and Visa)
store payment information in a secure chip instead of a
magnetic stripe. They are not swiped like a magnetic stripe
card; instead, they’re inserted into a slot on the POS terminal.
A metal contact on the face of the card then connects the card
to the terminal, and the two devices are able to communicate.
Most EMV cards also have magnetic stripes for use at
terminals that haven’t been upgraded to EMV.
A dual interface EMV card, or a card capable of both
contact and contactless transactions, can be either tapped
at the POS terminal for a contactless transaction or inserted
into the EMV card reader for a contact based transaction.
Enhanced security
An EMV chip can store information, perform processing,
store secret information securely and perform cryptographic
processing. Unlike a magnetic stripe card, it is virtually
impossible to create a counterfeit EMV card that can be used
successfully. Smart Card Alliance describes the enhanced
security of EMV technology in four layers:
1. An EMV card’s security credentials are encoded by
the card issuer at personalization, stored securely in
the EMV card’s chip, and cannot be accessed by
unauthorized parties. Criminals have yet to find a
way to clone a chip! As a result, the cards help prevent
card skimming and card cloning, one of the common
ways magnetic stripe cards are compromised and
used for fraudulent activity.
2. An EMV transaction includes three components:
The card is authenticated; the cardholder is verified;
and the transaction includes dynamic data and is
authorized online or offline, according to issuerdetermined
risk parameters. As described above,
Begin educating
yourself and
preparing your staff.
each of these transaction security features helps to
prevent fraudulent transactions.
3. Every EMV transaction carries dynamic data, so if
a fraudster is able to steal account data from chip
transactions, the data can’t be used to create a
fraudulent transaction in an EMV or magnetic stripe
environment.
4. Because EMV cardholders use their cards and
individual readers to authenticate Internet transactions,
the technology can also prevent card-not-present
(CNP) fraud.
Coming (slowly) to the U.S.
Despite the security benefits, the United States chose not
to implement EMV when Europe, Canada, Latin America
and Asia initially began migrating toward the technology.
There are several reasons for our slow adoption, including:
• There are substantial costs associated with the
deployment of an EMV infrastructure.
• Chip cards are more expensive than magnetic stripe
cards.
• POS terminals require additional features to read the
card.
• Legacy back-office systems must be upgraded to
accommodate the technology.
But despite these “cons,” U.S. migration to chip technology
has become inevitable. As of Q3 2011, there were more than
1.34 billion EMV compliant chip-based payment cards in use
worldwide (EMVCo). U.S. travelers have faced rejection of
8 SEPTEMBER 2012 Connection

their magnetic stripe bank cards abroad, leading larger
U.S. issuers to begin supplying EMV cards to frequent
international travelers. Some POS device manufacturers
now sell only hybrid devices with both chip and magnetic
stripe capabilities. And as other markets have adopted
chip cards, the per-unit costs for cards and devices have
decreased.
Between these developments and the increase in
card-related fraud losses, the costs of enhancing security
and complying with the Payment Card Industry Data
Security Standard (PCI DSS), and the demand for
contactless and NFC mobile payment transactions, it’s
no surprise that Visa, MasterCard, American Express
and Discover have all announced plans to implement an
EMV-based payments infrastructure in the U.S. Based on
the roadmaps developed by these networks, we anticipate
that the full implementation process will take anywhere
from four to 10 years.
Preparing your credit union
There’s plenty of time to prepare for EMV, as the
payment networks are just now laying the groundwork in
the U.S. Their immediate focus is working with acquirers
to ensure their terminals and software are ready by April
2013. That said, now is the time to begin educating
yourself and preparing your staff. At Covera, we
recommend the following steps:
1. Evaluate your members’ payment needs. Does it
make sense to offer EMV cards for debit, credit
or both? Or are you better off providing them to
traveling cardholders only?
2. Evaluate your ATMs. Are they EMV capable, or
will upgrades be required?
3. Evaluate your expenses and revenue. Pay close
attention to your plastic costs and interchange
revenue.
4. Talk with your processor, and find out how they
are preparing for the transition. They should
provide you with resources, information and
guidance as the transition progresses.
5. Begin educating your staff on the technology and
the operational changes that will need to be made
to support EMV cardholders.
Like any new technology, the adoption of EMV will
require planning, education and the inevitable “growing
pains.” But it will also provide your credit union and
your cardholders with a powerful new weapon against
fraud. ■
Kimberly McCumber-Ploof can be contacted at kimberly.ploof@
coverasolutions.com or 1-866-5COVERA, ext. 8177. To learn
more about Covera’s preparation for EMV, contact Covera’s
portfolio development team at 1-866-5COVERA.
www.cuany.org 9

governmentalaffairs
Get out the vote!
By Michael Lanotte, SVP & General Counsel, Credit Union Association of New York
IT’S ELECTION TIME. I DON’T KNOW ABOUT YOU, BUT EVERY
time I go to vote, I feel like I’m taking the SATs all over again.
Only it’s worse because I’m using a pen instead of a pencil, so
if I go outside the circle, I can’t erase it. Trust me: I’ve tried. To
help alleviate my stress levels, I bring my eight-year-old daughter
along and tell her which circles to fill in. She’s a student and is
much more accustomed to filling in those little circles. Not to
mention, I’m providing her with valuable experience in our
democratic voting process! (Or at least that’s what I tell myself.)
All across New York State and the nation, voters are
preparing for the upcoming November 6 elections. As we
head into the heart of the campaign season, we will continue
to hear about economic recovery, high unemployment,
immigration reform and taxes. And although they’re not
likely to make the 6 o’clock news coverage, we all know that
there are important credit union issues on the table as well.
With so much at stake for credit unions in Washington
and in state capitals, it is critical that credit union professionals,
volunteers and members work to ensure that candidates who
understand the credit union difference are elected. One of the
most effective ways to let your voice be heard is to vote—and
votes truly count. More than 44 percent of all registered voters
belong to a credit union, and research shows that credit union
members vote in higher levels than the general public. These
statistics go a long way with lawmakers, which is why the
Credit Union Association of New York uses Project Zip Code
and other key tools to emphasize the power of the credit union
constituency. But that power depends on action. If credit union
members don’t vote, credit union members don’t count!
Voting is just one aspect of politics, however. Your credit
union can provide a valuable public service by encouraging
members to get involved in the political process. The following
efforts can make a significant difference:
• Register your staff and members to vote. You can refer
them to the New York State Board of Elections website at
www.elections.state.ny.us or to http://www.vote-ny.com/
english/index.php for voter registration information.
• Recruit volunteers for state and federal campaigns.
• Run articles in your credit union newsletter highlighting
voting information and candidates.
Voting is just one aspect
of politics, however.
• CUNA is once again offering artwork for Get Out the
Vote, available in the Elections Action Center at
http://www.cuna.org/pol_affairs/election/. Your credit
union can download free posters for branch distribution,
or include Get Out the Vote graphics in your newsletter
and on your website.
• Host an Election Day celebration at your credit union.
Tune any branch televisions to election day coverage,
and make voter information available. Dress down and
distribute “I’m a CU member and I voted” stickers.
• Run Project Zip Code, which enables credit unions,
the Association and CUNA to show state and federal
elected officials exactly how many credit union members
reside in their respective legislative districts. This
program is particularly helpful, as boundaries of postal
zip codes and legislative districts often do not coincide.
For assistance with project Zip Code, you can contact
Leona Haberstro, the Association’s advocacy specialist,
at (518) 437-8128 or leona.haberstro@cuany.org.
• Contribute to CUPAC (Credit Union Political Action
Committee), which supports the election and re-election
of pro-credit union candidates in New York State.
Visit www.cuany.org/Governmental Affairs/
CULAC/CUPAC for more information.
To save you time, we’ve compiled all these resources in
our Voter’s Resource Center at www.cuany.org/Voters
ResourceCenter. And remember: Your Association’s
governmental affairs team is always available to provide
assistance and resources. Let’s get out the vote! ■
Michael Lanotte can be contacted at michael.lanotte@cuany.org or
(800) 342-9835, ext. 8236. Follow @mikelanotte1.
10 SEPTEMBER 2012 Connection

egulatorycompliance
You just received a garnishment order.
Now what?
By Michael Carter, CUCE, Director of Compliance, Credit Union Association of New York
LET’S SAY YOU HAVE A MEMBER WHO HAS FAILED TO PAY A
creditor. After many attempts to contact the member (What???
People ignore calls from creditors?), the creditor obtains a
judgment allowing them to attempt to attach funds in an
account. Generally, when a credit union receives a garnishment
order, it would turn over any funds the member may have at
the credit union. But federal regulations put limitations on the
amount that is subject to garnishment. So, how should you
proceed? Read on for a full explanation.
Know the key terms.
First things first: Let’s define some important terms.
• Account review – examining deposits in an account to
determine if a benefit agency deposited a benefit
payment into the account during the lookback period;
• Benefit agency – the Social Security Administration, the
Department of Veterans Affairs, the Office of Personnel
Management or the Railroad Retirement Board;
• Benefit payment – a federal benefit payment paid by
direct deposit to an account with the character “XX”
encoded in positions 54 and 55 of the Company Entry
Description field of the Batch Header Record of the
direct deposit entry;
• Garnishment fee – any service or legal processing fee
charged by a financial institution to an account holder
for processing a garnishment order or any associated
withholding or release of funds;
• Garnishment order – a writ, order, notice, summons,
judgment or similar written instruction issued by a court
or a State child support enforcement agency, including
a lien arising by operation of law for overdue child
support to effect a garnishment against a debtor;
• Lookback period – the two-month period that (a)
begins on the date preceding the date of account review
and (b) ends on the corresponding date of the month
two months earlier or on the last date of the month
two months earlier if the corresponding date does not
exist (ex. June 31); and
• Protected amount – the lesser of (i) the sum of all benefit
payments posted to an account between the close of
An account review
is a one-time deal.
business on the beginning date of the lookback period
and the open of business on the ending date of the
lookback period or (ii) the balance in an account at the
open of business on the date of account review.
Back to the garnishment order you just received. How
do you properly determine if there are federal benefits in the
account and what the protected amount should be? I’m so
glad you asked!
Perform an account review.
When your credit union receives a garnishment order, you
must: 1) determine if the United States or State child support
agency has attached or included a Notice of Right to Garnish
Federal Benefits, and 2) perform an account review no later
than two business days following receipt of the order.
The account review should be done regardless of:
• whether other types of funds are in the account;
• whether there is/are a joint owner(s);
• the balance of the account, provided it is greater than zero;
• the nature of the debt or obligation underlying the order.
When applicable, separate account reviews must be done
on each account. But remember: An account review is a onetime
deal. If you receive the same garnishment order again,
you should not repeat the account review or take any other
action related to the order. (If you are subsequently served a
new or different garnishment order against the same account
holder, however, you should perform a separate and new
account review.)
Proceed with your normal garnishment procedures if one
(or both) of these scenarios applies:
• The order was received from the United States or child
support agency.
14 SEPTEMBER 2012 Connection

• During the account review, you find that no federal
benefits were directly deposited.
If applicable, determine the protected amount.
If there were federal benefits directly deposited during the
lookback period, you must now determine the protected
amount. To do this, calculate the amount of federal benefits
deposited during the lookback period and compare it to the
account balance. The protected amount is the lesser of the two.
Notify the member.
Once you have determined the protected amount, you must
send a notice to your member within three business days. The
notice should contain, at a minimum, the following information:
• notice that a garnishment was received;
• the date it was received;
• a simple explanation;
• your credit union’s requirement to make available the
protected amount if a benefit agency directly deposited
a benefit payment in the last two months;
• the account subject to the order and the protected
amount;
• your credit union’s requirement pursuant to State law
to freeze other funds in the account in order to satisfy
the order;
• the amount of any garnishment fee;
• a list of applicable federal benefit payments;
• the member’s right to claim further exemption for
amounts above the protected amount to the creditor;
• the member’s right to consult legal counsel; and
• contact information for the judgment creditor if included
in the order.
Final thoughts
As you navigate the exciting world of garnishment orders,
here are a few other items to keep in mind:
• There are no continuing or periodic garnishment
responsibilities.
• A garnishment fee may not be charged against the
protected amount, and the fee may not be collected on
funds above the protected amount after the date of
account review.
If you want even more information on this topic, I
recommend reviewing the Treasury Department’s published
guidelines. You can find them by visiting www.fms.treas.gov
and searching the phrase “garnishment guidelines.” ■
Michael Carter can be contacted at michael.carter@cuany.org or
(800) 342-9835, ext. 8143.
www.cuany.org 15

mortgageindustry
Collection strategies: Working with members
to reduce delinquencies
By Arthur Chuang, Home Assistance Manager, CUC Mortgage Corporation
GGOOD NEWS: ACCORDING TO THE EQUIFAX JUNE NATIONAL
Consumer Credit Trends Report, delinquent balances on first
mortgages have plunged 37 percent—along with the biggest
drop in 90-day plus delinquencies, which have dropped 45
percent since January 2010.
Reasons include a combination of factors, such as a
slightly improving economy since last year, mortgage
modifications, short sales, deed in lieu and foreclosure sales.
There is also an increased emphasis on trying to reach out
to the homeowner as quickly as possible when a loan becomes
delinquent. Mortgages used to be the number-one bill to pay,
but not anymore. With stagnant wages and ever-increasing
costs such as medical, food, taxes and energy, some people
would rather make their car payment and have at least one
credit card current before paying their mortgage.
By increasing the number of calls and reaching out to
members as early as possible in the delinquency process, as
well as sending out reminder notices, late notices and preforeclosure
letters, you can help “remind” members to make
timely mortgage payments. If the member cannot make the
payment, then the goal is to have them explain to your credit
union or your servicer when they can make their payment
and, if they cannot commit, to look at other options.
The earlier your credit union can reach out to the member,
the easier and greater the likelihood that you can avoid having
the loan become severely delinquent and even go into a
foreclosure status. If you hear a member mention the words
“hardship,” “reduction of income,” or “a payment is going to
be late,” it should set off an alarm that immediate assistance
or action may be necessary.
When speaking with a delinquent homeowner, it is
important to remember that it is a two-way conversation.
Credit union collectors need to listen and understand the
member’s problem. The member should be made to feel
comfortable so they are motivated to work with your credit
union and find a resolution.
You also want to make sure that the member is being
given definitive responses to their questions. They should feel
that they are speaking with someone who has the correct
answers—without having to be placed on hold or transferred
numerous times. Keep in mind that the member is most likely
under a lot of stress from not being able to keep credit current
on their mortgage payments, possibly due to a previous
unforeseen financial circumstance such as a medical hardship,
disability or job loss/reduction of hours.
Another recommended option is to have your credit
union’s collector(s) learn not just collections, but also loss
mitigation (e.g., modifications, short sales, deed in lieu). They
should also be knowledgeable in foreclosure and bankruptcy
so that they can provide information about all available
options. The goal is to try to resolve the member’s problem in
one call if possible. This is easier said than done, however, as
the average ratio of staff turnover in the collections industry
is about 25 percent.
The ever-changing laws and rules, as well as the constant
shifting of the political and social climate, also make managing
collections a challenge.
Recent changes in the Bankruptcy Code on Chapter 13
Mortgages (which became effective Dec. 1, 2011), as well as
the probable expiration of the Mortgage Forgiveness Debt
Relief Act and pending expiration of upcoming payroll tax
credit cuts and other tax credit cuts, are three key examples
where laws have changed or will be changing. The expiration
of the Mortgage Forgiveness Debt Relief Act could impact
future short sales, as members will have to report the difference
from the savings of a short sale as income on their 2013
federal taxes going forward. The unlikelihood of Washington
resolving the looming “fiscal cliff” before the end of this year
also could have an impact on your average borrower since
their net pay may be reduced effective Jan. 1, 2013.
One thing is certain: Collections is always changing. As a
result, credit unions must adjust and adapt to the ever-increasing
needs and wants of their members while also considering the
big picture of what could impact performance in the shortand
long-term. ■
For more information about mortgage servicing, contact Arthur
Chuang at arthur.chuang@cucmortgage.com or (800) 342-4998,
ext. 8226, or Kathleen Bartley at kathleen.bartley@cucmortgage.com
or (800) 342-4998, ext. 8227. To learn more about the services
provided by CUC Mortgage Corporation, visit
www.cucmortgage.com.
18 SEPTEMBER 2012 Connection

www.cuany.org 19

featurestory
Becoming a brand advocate for your
credit union
By Mark Arnold, CCUE, Guest Contributor, President of On the Mark Strategies
FORMER DISNEY CEO MICHAEL EISNER ONCE SAID, “A
brand is a living entity—and it is enriched or undermined
cumulatively over time, the product of a thousand small
gestures.”
Branding continues to be a hot-button topic in marketing
circles. It’s still a vitally important element for the credit union
industry to consider as it moves forward. However, in order
for branding to succeed, we have to understand what branding
is and does. We must also commit to serving our credit unions
as brand advocates.
What is branding?
That’s really the $64,000 question. You’re going to get
a lot of different answers from a lot of
credible sources. Entrepreneur Magazine
says branding is “the marketing practice
of creating a name, symbol or design
that identifies and differentiates a
product from other products.” Business
Dictionary says branding is “the process
involved in creating a unique name and
image for a product in the consumer’s
mind, mainly through advertising
campaigns with a consistent theme.”
Wendy Meola, director of marketing
with Community Resource FCU, says
branding “is essential to credit unions. Credit union
marketers need to figure out what their niche is in the
marketplace so they can effectively market themselves and
attract new members for future growth. If they do not, they
are surely wasting marketing dollars by advertising blindly.”
Branding is a strategic process. It is not a one-time deal,
or even a three- or six-month campaign. Branding is an
ongoing and never-perfected evolutionary process for your
credit union. It is also not simply slapping a new logo or
tagline on your brochures and website.
Ultimately, branding is who you are. Who you are as
credit union leaders. Who you are as credit union employees.
Who you are as credit union members.
Your credit union
cannot be all things
to all people.
Strong brands also pass the Three Cs of Branding litmus
test. The Three Cs include:
• Clarity: Are you clear about what you are and are not?
• Consistency: Are you always what you say you are?
• Constancy: Are you always visible?
Becoming a brand advocate
Now that we know a little more about what branding is,
we can look at ways to become a brand advocate for your
credit union.
In order for any brand initiative to work, all credit union
staff—from the board of directors to frontline tellers—must
wholly buy into it. Just as any chain is only as strong as its
weakest link, your credit union’s brand is
only as strong as its least enthusiastic
employee.
To do this, you must invest every
employee in your brand’s success. This
includes fully immersing them in your
branding plan and conducting regular
brand training. Your brand needs a vision,
mission and message, which must be
consistent.
Elizabeth Park, marketing director
with GPO FCU, says, “I think that being a
brand advocate starts with the credit union
adopting a brand. Know who you are and where your credit
union excels compared to the competition. What makes you
different and what makes you better? Then talk it up!”
You must also remember that your credit union cannot be
all things to all people. You must focus your brand on what
you do best or on a particular audience you wish to serve.
You must refine your focus and limit it to three or four
manageable groups. For example, will you serve the local
African-American community? College students? All families
living within a certain radius of each branch? Pick a
constituency and excel at serving them.
Your brand should also be consistent. Any time an
employee, member or potential member sees your credit
20 SEPTEMBER 2012 Connection

union, it should look the same. This includes all printed
materials (stationery, business cards, brochures, lobby
posters), your website and your social media platforms.
Non-member materials should also have the same look
while clearly conveying membership eligibility. Your
branches should also exhibit this same look and retail
consistency.
Meola notes, “It is crucial that the marketing team is
represented on the senior management team to ensure that
the brand is being upheld in all facets of the organization,
including training, operational procedures, locations, fees,
new products and services, etc. These issues come up
every week, and the marketing person needs to make sure
that these changes are in line with the brand.”
Being a credit union brand advocate also means
maintaining brisk brand momentum. Don’t let the
excitement and message fade from the minds of your
staff, members or community. Remember that great
brands take steady guidance, a long-term viewpoint and
uncompromising values. Reinforce your brand with staff
every day.
What you can do with this information
Now that you have some practical information about
branding and the importance of being a credit union
brand advocate, consider the following simple steps you
can take to help make it happen.
1. Develop a credit union brand plan.
2. Answer the question, “What makes our credit
union different?” without using the words “people,”
“service” or “community.”
3. Answer the question, “Who are we trying to reach?”
4. Answer the question, “Does our credit union pass
the Three Cs of Branding test?”
Conclusion
Branding isn’t just the marketing word of the day. Its
relevance and importance will only continue to grow. As
credit unions grapple with an increasingly competitive
marketplace, many will find that energetic and enthusiastic
branding is their best option to remain a relevant and
dynamic financial institution. As Park notes, “If credit
unions continue to live by the ‘people helping people’
philosophy, and if credit union staff continue to be brand
advocates, the future will always remain bright for the
credit union industry.” ■
Mark Arnold, CCUE, is an acclaimed speaker, brand expert and
strategic planner. He is also president of On the Mark Strategies,
a consulting firm specializing in branding and strategic planning.
He can be contacted at (214) 538-4147 or mark@markarnold.com.
For more information, visit www.markarnold.com or
blog.markarnold.com.
www.cuany.org 21

humanresources
Status check: How well are you engaging
your employees?
By Christopher A. Pajak, PHR, Management/HR Consultant, Credit Union Association of New York
WHILE WE’RE STILL DEALING WITH DIFFICULT ECONOMIC
times, we’re certainly seeing some positive signs of recovery.
In particular, we’re seeing signs that credit unions are
beginning to consider hiring for new and/or replacement
positions that had previously been put on hold. This begs
the question: Has your credit union done a good job of
keeping employees engaged so they won’t think about
jumping ship as the economy turns around? If the answer
is no, it’s never too late. Let’s take a moment to review
some tips from one of my previous articles to see where
you stand on your employee engagement efforts.
Have you been leveraging internal resources to help
with staff professional development?
While it is likely that you have cut
back on your training budget, hopefully
you haven’t cut back on opportunities
to utilize your more senior, experienced
staff to help with initiatives such as
mentoring, job shadowing or
conducting internal training. A lot
of employee growth can come from
on-the-job opportunities, and these
initiatives won’t cost you a dime.
More importantly, it’s a win-win
scenario. It helps provide development
for more junior employees while also reinforcing your
confidence in senior staff with regard to their knowledge
and skills. This also shows how much you value them and
results in higher engagement for all parties involved.
Have you increased efforts to make sure your employees
fully understand the products and services offered by your
credit union?
You may be wondering what this question could possibly
have to do with employee engagement. Employees with a
solid understanding of the products and services offered by
your credit union become more valuable and, thus, more
engaged. This goes for every employee, regardless of their
role. When staff develop a strong understanding of all
Satisfied and engaged
employees lead to
happy members.
products and services, they are more inclined to feel a personal
connection to your credit union and its success. This way,
even an employee who isn’t charged with member-facing
responsibilities is able to help promote your credit union and
feel good about it at the same time.
Have you been communicating regularly with your
employees about any challenges your credit union may be
facing?
If not, consider providing regular updates on the financial
condition of your credit union, and share a big picture
overview of your strategic plan and goals. Not doing so can
lead employees to wonder about the stability of your credit
union during a tough economic climate.
However, if you’ve been open and honest
with them along the way, they will likely
be more engaged and committed to your
credit union’s overall success.
Have you kept your door open?
Having a true, open-door policy that
encourages any employee to drop in to
your office to discuss a concern or an
idea can go a long way towards keeping
employees engaged. If you answered yes
to this question, but you haven’t had
employees coming to you, it’s time to figure
out why. Perhaps everything is going great; however, it is
unlikely that nobody has a concern…and it’s probably safe to
say there are a few people who might be keeping a good idea
to themselves. If this is the case, maybe your employees don’t
perceive your door as being truly open. Consider managing by
walking around. Stop by the desks or work stations of your
employees frequently to ask how things are going. Engage
them in conversation, and ask for feedback regularly.
Have you been asking for new ideas?
Have you been seeking employees’ opinions, feedback
and ideas on how things could be improved in your credit
union? There are a variety of ways this can be approached.
24 SEPTEMBER 2012 Connection

For example, consider things beyond the traditional suggestion
box. Have lunchtime meetings with small groups of employees
on a regular basis, and solicit possible solutions or insights on
challenges your credit union may be facing. If possible, when
someone brings a good idea to the table, challenge and
empower them to take a leadership role in forming a committee
to develop an implementation plan.
Have you been providing recognition for jobs well done?
Perhaps the most important—yet easily overlooked—
aspect of keeping employees engaged is providing them with
positive recognition. This can be done in very inexpensive
ways through small bonuses, gift cards, verbal praise and, of
course, opportunities for growth and advancement. If employees
feel they are being offered constructive feedback without any
recognition of their strengths or successes, their level of
engagement will decline.
If you’re seeing signs of the job market picking up in your
area and you had a difficult time answering these questions,
it’s time to take the necessary steps to make sure your
employees are committed to your credit union—before it’s
Ask them for
feedback regularly.
too late. And don’t forget: Satisfied and engaged employees
lead to happy members. If employee engagement isn’t a high
priority for your credit union, you’re risking a loss of valued
employees and the possibility of unhappy members. ■
Christopher Pajak can be contacted at christopher.pajak@cuany.org
or (800) 342-9835, ext. 8188. For more information about the
Association’s human resources services, visit www.cuany.org/
services/hr-consulting.
Disclaimer: The creation of this work product by the Credit Union Association of New
York is not intended to nor does it equate to engaging in rendering legal advice, and
nothing on the work product should be construed as such. If legal advice is required,
the services of a competent legal professional should be sought.
www.cuany.org 25

nycufoundation
The New York Credit Union Foundation:
Yesterday, today and tomorrow
By Allison Barna, CUDE, Director of NYCUF/Community Development, Credit Union Association of New York
IIN MAY OF 1959, THE CREDIT UNION ASSOCIATION OF NEW
York (then New York State Credit Union League) lost its first
managing director. For more than 28 years, Sidney Stahl held
the position and was also the first, full-time managing director
in the United States. That June, at the League’s 39th Annual
Meeting, a resolution was presented and passed to create a
voluntary Sidney Stahl Memorial Fund “for the purpose of
establishing scholarships to needy and worthy students for
the purpose of fostering better understanding amongst
mankind.”
The Foundation yesterday
The fund evolved into the Sidney Stahl Memorial
Foundation and served as the charitable arm of the League,
tasked with assisting New York credit union volunteers
with their educational and training needs. The Memorial
Foundation specifically provided scholarships to CUNA
Management School, Cornell Management School for specific
Districts (Chapters) and the Wilfred Kerr Scholarship for the
Cornell Management School.
In 1995, the Sidney Stahl Memorial Foundation was
refocused and renamed the New York Credit Union Foundation
to advance the ideals and goals of the credit union movement
in New York State. With an emphasis on consumer financial
education—especially among young people—the Foundation
adopted the mission “to support projects that fulfill the
credit union philosophy of ‘people helping people’ through
education and by providing financial resources.”
Through the years, the Foundation continued to support
that mission (as well as various incarnations of it) through
grant and scholarship programs for education and training,
conferences, outreach programs and technology, as well as
programs to help credit unions provide New Yorkers with
tools to become more financially capable. The Foundation
also began to intensify its focus on youth financial literacy.
The Foundation today
Recently, however, the changing environment and
evolving needs of credit unions led the Foundation’s board
of trustees to re-evaluate the Foundation’s mission and focus.
New Yorkers of all ages and backgrounds are struggling to
manage debt, build savings and plan for their financial
futures, and the Foundation is committed to helping New
York credit unions offer solutions on a local level—while still
pursuing solutions that advance the philosophy of “people
helping people.”
In this spirit, the Foundation has developed and adopted a
new mission statement: “Fostering the financial independence
of New Yorkers through credit unions.” And with this
mission comes a broader scope of services.
The Foundation tomorrow
In addition to grant funding, disaster relief and youth
financial education resources, the Foundation will work to
provide credit unions with resources to reach a broader range
of underserved groups, including youth, Hispanics, immigrants
and low-wealth families. Each of these groups represents
significant opportunities for credit unions and, with its new
mission, the Foundation is committed to helping you identify
and seize those opportunities.
Moving forward, the Foundation will work cooperatively
with the Credit Union Association of New York to foster
existing strategic partnerships with groups like Coopera
Consulting and the Filene Research Institute through REAL
Solutions. The Foundation will also continue to promote
programs like BizKid$, Kid’s Cash Kits and the National
Endowment for Financial Education ® (NEFE ® ) High School
Financial Planning Program ® (HSFPP).
What does this mean for you? After more than seven
decades, the New York Credit Union Foundation, your
Foundation, is here to help you identify trends, reach key
markets and access the resources and financial support you
need to be successful. And as you grow and evolve to serve
your members and communities, so will your Foundation. ■
To learn more the New York Credit Union Foundation, contact
Allison Barna at allison.barna@cuany.org or (800) 342-9835,
ext. 8134.
26 SEPTEMBER 2012 Connection

featurestory
Younger directors, younger members
By Ben Rogers, Guest Contributor, Research Director, Filene Research Institute
CREDIT UNION VOLUNTEERS, PARTICULARLY BOARD MEMBERS,
are overwhelmingly older than 50. A 2005 Filene Research
Institute study shows that 75 percent are past the half-century
mark, while 25 percent are 49 or younger, and only 6 percent
are 39 or younger. A casual scan at the dozen or so credit
union conferences I attend each year indicates that things
haven’t changed much since 2005.
Attracting younger members is a pressing, immediate
credit union goal. Credit unions should simultaneously
attract younger volunteers.
The recruitment process
Recruiting an energetic 26-year-old to the board of
directors just because she’s young, however, is as arbitrary as
removing a seasoned 67-year-old just because he’s “old.” Age
discrimination is not the aim here. Boards can, of course,
invite young adult perspective in a number of ways, including
presentations from consultants, research from credit union
staff or broader research about the young adult market in
general. But what about a more audacious step: recruiting a
talented young adult to serve as either an advisory volunteer
or a full director?
A study of Fortune 1000 firms has shown that boards
that are more diverse (as measured by the inclusion of women
and/or minorities) return more value to shareholders. i While
the corresponding argument for recruiting young adults to
credit union boards of directors is imprecise, those findings
do indicate that boards that seek to bring in otherwise
qualified outsiders can expect to build long-term value.
Tout the benefits
of credit union
volunteering.
Every credit union draws from a different pool of
potential volunteers depending on its field of membership.
Here are several pools, common to most communities, to
consider for new and younger volunteers:
• Chambers of commerce and service clubs. The local
business community is an especially fruitful field for
credit unions with community charters. Participants by
definition bring business experience to the group, and
often they are looking to expand their networks.
• Existing select employee groups (SEGs). Younger SEG
professionals are often eager to undertake résuméboosting
activities early in their careers. They can bring
important skills in accounting, marketing or information
technology.
• Local campuses. Young faculty members at universities,
community colleges and even high schools often carry
the double advantage of advanced degrees and regular
interaction with young adults. Like businesspeople,
they may also be looking for ways to expand their
networks.
• Business school programs. Credit unions with access
to a campus have a particularly valuable opportunity
to recruit aspiring young professionals.
• Military bases. Officers and noncommissioned officers
represent one more group with leadership experience
and an understanding of young adults’ habits and needs.
Unfortunately, too few credit unions take this active
approach to recruiting—whether they’re recruiting young
adults or directors in general. Only 4 percent of directors
report having a process wherein they determine the most
pressing needs of the board and then seek candidates to fill
those gaps (See Figure 1).
William Brown, a governance specialist at Texas A&M
University, encourages credit union boards to recruit actively.
“We know it’s an aging industry. I don’t think there are a lot
of young people necessarily that are saying ‘I want to go out
and sit on a board.’ There’s not a lot of awareness of the
opportunity to serve. Credit unions themselves are not
aggressively reaching out.” Brown says credit unions that
28 SEPTEMBER 2012 Connection

Source: William A. Brown, Recruitment and Selection Practices at Credit Union Boards (Madison, WI:
Filene Research Institute, 2005).
want talented up-and-comers need to recruit them and tout
the benefits of credit union volunteering, including:
• Altruism. A credit union board is somewhere you can
make a difference. This will appeal to the same type
of individuals who are joining student groups and
running for office.
• Self-interest. Young professionals, and even students,
are very pragmatic about their decisions. They’re
interested in making a difference, but they’re also
thinking about their careers. They’re meeting people,
developing networks and learning how organizations
work. A credit union board can be a fruitful field for
such development.
And what about annual meetings? In the absence of hard
Filene research, I can only offer suggestions. The principal
challenge at many annual meetings is that, although the
meetings are required by law, no substantive business is
conducted during them. The board and leadership may
present information, but the outcome of an annual meeting
is so rarely in doubt that attendance is not very compelling.
If this is what your annual meeting looks like, you have
two options. First, you can increase the incentives and perks
that draw people: better prizes, nicer food, more spectacle.
Second, you can reintroduce uncertainty into the process by
allowing members to vote not just on board representatives,
but also on new initiatives, charitable giving or even core
strategic issues. Unless the democratic motions of an annual
meeting can lead to real change, it will remain difficult to
attract people to them.
What young adults want from a credit union
And what are young directors likely to tell you when they
do get to the board? A brief survey of Filene research shows
that they’re likely to suggest a renewed focus on convenience.
Young adults prioritize convenience (which encompasses
factors like physical location, speed of transaction, and
e-services) much more than products
(interest rates, fees, product variety) or
service. ii Big banks have been building on
that advantage for years: Convenient
branches, ATMs, and e-services bind
customers to a bank even when they’re
sick of fees and bureaucratic service.
Theirs is not the only model of
convenience, of course, but convenience
still deserves hard thinking in board
meetings and strategic planning.
This thinking bears out in Big,
Small, or Online? Young Adults’
Evolving Financial Preferences (2010).
This study shows that 22 percent of
under-30 respondents to an online
survey (an admittedly targeted channel)
identified an online bank as their primary financial institution.
That’s particularly striking, because, with a few exceptions
(like USAA or PSECU in Pennsylvania), only recently have
consumers been able to transact in a way that allows an
online bank to capture the majority of a consumer’s banking
business. This surge in young adult interest in online banks
comes because: those young adults don’t have as many
financial or branch-based habits to overcome; online banks
provide a compelling set of account features and superior
rates; and more than 40 percent of respondents indicated that
they opened the account on the recommendation of a family
member or friend.
The most promising (and cost-effective) ways to promote
convenience include partnering with regional and national ATM
networks, bringing e-services like mobile and online transactions
up to speed, and allowing for online account opening for
everything from initial membership to mortgages to credit cards.
“The cemeteries are full of indispensable men.” French
general Charles de Gaulle often gets credit for that quote
(whose origins are obscure), but it applies perfectly to credit
union leadership. Today’s directors will not be around forever,
and boards that cannot replace them with dynamic young
leaders will suffer. Attracting young adults as members or as
directors is not easy. But it is essential to the healthy future of
credit unions. ■
As Filene Research Institute’s research director, Ben Rogers speaks
widely on credit union topics and has authored nearly 20 Filene
reports, including much of the Institute’s young adult research. He
can be contacted at benr@filene.org or (608) 661-3740.
For additional details, see “A Seat at the Table: Young Adult Directors
and Board Advisors,” published by Filene Research Institute in
2008. This report can be accessed by visiting http://filene.org and
searching for “A Seat at the Table.”
i David A. Carter, Betty J. Simpkins, and W. Gary Simpson, “Corporate Governance, Board Diversity,
and Firm Value,” The Financial Review 38, (2003): 33–53.
ii Jinkook Lee “Attracting Young Adults: What Do We Know About Their Use of Financial Institutions
and Payment Behaviors?” Filene Research Institute, Madison, WI (2008).
www.cuany.org 29

memberservices
Q&A with The Disclosures
By Tracy Conner, Vice President of Member Relations, Credit Union Association of New York
YOU WON’T FIND THEM LISTED ON THE TOP 40, AND YOU
won’t hear them on the radio (at least not yet), but if lyrics
like “It’s not about making dough, but helping people that
you know,” and “So I’m moving on with my money, I don’t
think it’s so funny, how my bank’s been treatin’ me,” grab
your attention, you need to know The Disclosures.
The Disclosures are an acoustic “thrift rock” duo
featuring Christopher Morris, director of communications at
the National Credit Union Foundation (NCUF), and Chad
Helminak, director of REAL Solutions & Outreach at the
Wisconsin Credit Union League. During the Association’s
2012 Annual Meeting & Convention
this summer, they led an educational
breakout session and entertained
attendees at the Young Professionals
Commission’s Cheers & Beers event.
Along the way, they impressed many
with their Midwestern charm and
fun, down-home approach to spreading
the word about credit unions.
Morris and Helminak are certainly
striking a chord in credit union land,
so I was thrilled when they agreed to
answer my questions about performing,
credit unions and the future of our
movement.
Q: You proudly call yourselves “credit union geeks.”
Where does this come from?
A: Both of our roles consist of a combination of
communications, credit union advocacy, and program and
professional development. We’re both Credit Union
Development Educators (CUDEs) and have been fortunate
to work with some of the most amazing and inspiring credit
union professionals and organizations on the planet. Our
work as The Disclosures is strictly done outside of our day
jobs, so it’s pretty safe to say that we’ve earned our “credit
union geek” status.
Q: When and why did you decide to form The
Disclosures? How did you get started?
We really hope to
encourage folks to
learn more about
credit unions.
A: We met in 2009 at the National Credit Union
Foundation’s Credit Union Development Education (DE)
training. After realizing we both play guitar, live in Madison
and work for credit unions, we became instant friends and
started doing open mics around town. We’d play covers from
The Beatles and Neil Young, along with original music we
had written before meeting each other.
But in early 2010, we entered the Young and Free
“Lookin’ Like a Fool With Your Money in a Bank” Music
Video Contest and had the exciting realization that the song
we created for it, “Movin’ On With My Money,” actually
resonated with people and caused them
to ask questions about credit unions
and want to learn more. It was like a
light bulb came on, and we soon found
ourselves working on several other
credit union-inspired tracks that would
eventually become the songs on our
album, “(Hey, We’re) The Disclosures.”
Since we were already comfortable
playing live music and doing
presentations in our day jobs, it was a
pretty natural evolution for us to create
the music-based education sessions and
take our show on the road to credit
union staff meetings and conferences.
Q: What is the central message of your music, and how
does it connect to the credit union philosophy?
A: When we talk or sing about credit unions in our
songs, videos and presentations, we really hope to encourage
folks to learn more about credit unions and to demonstrate
how they truly are different than banks. We rely on music and
humor to accomplish that, but we hope that by helping others
to build a better understanding of our history and principles,
we can inspire them to use their talents and spread the credit
union message in new, unique ways.
Q: What do you think about the future of the credit
union industry? What are the movement’s greatest challenges
and opportunities?
32 SEPTEMBER 2012 Connection

A: We’re optimists, so we think there’s a lot of potential
for credit unions to do great things over the next 10 years.
But in order to do those things, we need to find new and
better ways to engage young adults—starting with our own
staff. We have a lot of young people within our own ranks
who are passionate and creative, but if they view credit
unions as “just another business” or “just a job,” do they
have any incentive to use their talents to advance the credit
union movement? By sharing our history and philosophy
with them, we can show them that the work they do is part
of a larger, benevolent system that puts people before profit—
and they should be proud to be a part of it.
Q: What can we expect next from The Disclosures?
A: We’re scheduled to perform at a variety of credit
union events through 2013, but our focus now is on the
creation of our next album, which will be geared to a younger
audience. For all of the latest updates on where we’ll be and
songs we’ve released, we encourage everyone to check us out
on Facebook! And on our website, thedisclosuresmusic.com,
We need to find
new and better
ways to engage
young adults.
we have a few free songs available for credit union people
to download and use, along with our YouTube videos, news,
album information and more. ■
Tracy Conner can be contacted at tracy.conner@cuany.org or
(800) 342-9835, ext. 8107.
www.cuany.org 33

infoCUs
GPO FCU partners with Filene to help
members ‘SaveUp’
By Michael Bartlett, Guest Contributor, West Coast Reporter, Credit Union Journal
BY NOW, MOST CONSUMERS ARE VERY FAMILIAR WITH REWARDS
credit cards. For every dollar spent, people earn points,
merchandise, travel or cash rebates. With America’s savings
rate at historic lows and credit card debt at crushing levels
after the recent recession, two Silicon Valley entrepreneurs
decided to turn the reward formula upside down.
The result was San Francisco-based SaveUp, founded
in 2011 by CEO Priya Haji and Chief Technology Officer
Sammy Shreibati. The
company’s stated purpose
is “to offer a free,
nationwide rewards
program that encourages
Americans to save money,
pay down their debt and
make positive changes to
their financial behavior.”
Consumers who
join the SaveUp program
earn points for positive
financial actions, including
contributing to their
savings or retirement
accounts and/or paying
down loans, including
credit cards and
mortgages. They also are
rewarded if they interact
with financial education
GPO FCU Marketing Director Beth Park (standing) introduces a member to the
SaveUp website.
content on the SaveUp site (www.saveup.com).
To keep people inspired to continue saving, the
program’s credits can be used for chances to win instant
prizes or entries into weekly or monthly drawings. Prizes
include retail gift cards from partners such as Amazon, Best
Buy, Banana Republic, Costco, Home Depot, Starbucks,
Target and Whole Foods, consumer electronics, vacations,
home and wardrobe makeovers, cars, college tuition, debt
payoff, or a $2-million jackpot.
After procuring venture funding, SaveUp made its public
beta debut Nov. 1, 2011, with a handful of credit unions, banks
and retail companies. Today, 20 credit unions nationwide are
participating in a pilot program with Filene Research Institute
and SaveUp to deliver a customized version of the program to
their members. Among the 20 pioneers is New York’s GPO
Federal Credit Union.
Along with the other piloting credit unions, GPO FCU
has spent the past several months tracking SaveUp usage,
monitoring member
feedback and compiling
results of the pilot—all with
the hope of determining
how best to incentivize
positive financial behavior.
Small change, big
impact
GPO FCU Marketing
Director Beth Park says the
credit union learned about
SaveUp through Filene, and
“knew immediately that it
would be a great fit with
our mission statement, as
well as the perfect tie-in to
our goal of saving members
money.”
“Filene is always great
to partner with,” she notes.
“They research companies
and products before they make their way to credit unions, so
we knew going into this that SaveUp would be easy to work
with and a hit with our members. We were excited to be a
part of the pilot, and were eager to bring the program to our
members.”
GPO FCU rolled out the SaveUp pilot to members in
April. According to Park, many people seem to find it difficult
to save money—sometimes because they cannot due to their
financial circumstances, other times because they simply do
not know how to set funds aside for later.
34 SEPTEMBER 2012 Connection

“SaveUp gives members an opportunity to see a snapshot
of all their finances in one place, not just their credit union
account,” she explains. “It helps members realize that even
small change, such as giving up that daily cup of coffee or
transferring high-rate debt to a lower rate, can make a big
impact…all while incenting them with ‘credits’ that can earn
them cash and prizes! It’s a win win!”
Park said GPO FCU’s mission is always to focus on its
members, and recently the credit union made a pledge to save
those members money. In 2011, members saved more than
$1 million on interest payments when they brought their
higher-rate loans to GPO FCU from other institutions. GPO
started tracking the savings in 2004 and is hoping to save
members $10 million in 10 years.
“The pilot version of the program is fairly basic,” she
says. “But we have decided to move forward with SaveUp
and will now be able to customize the program and deliver
product promotions and savings tips that are targeted to the
members’ needs in an effort to save them money.”
Since GPO FCU began promoting Save Up, more than
200 members have begun actively using it, linking nearly 500
accounts to the site. Park says the response from members
has been “very positive.”
GPO FCU rolled out
the SaveUp pilot
to members in April.
Differentiating credit unions
Matt Davis, director of innovation at Filene Research
Institute, says the organization has been active in incentivizing
savings accounts at credit unions for years. Some seven years
ago, Peter Tusano, current dean of the business school at
Oxford and a fellow at Filene, was intrigued by the success
of prize-linked savings accounts in South Africa and other
countries and wanted to bring the concept to the United
States. The problem? State lottery laws make it illegal to tie
savings accounts to prizes.
After finding a loophole in Michigan law, Filene worked
with the Michigan Credit Union League to start prize-linked
savings accounts which offered sweepstakes entries for every
More than 200
members have begun
actively using it.
$25 saved. The program quickly accumulated $8.7 million
in deposits, which Davis says proved such an idea could
work. Subsequently, six states have changed their laws to
make these types of accounts legal.
“Out of the blue, we heard that SaveUp had created a
program that is legal everywhere, yet still incentivizes
people to save money or pay down debt via an arms-length
procedure,” recalls Davis. “We liked the idea and wanted to
help credit unions get involved. We think it is an opportunity
for credit unions to help themselves and their members at the
same time.”
Davis says Filene is studying SaveUp from the consumer
side and the credit union side to determine the program’s
impact. The pilot is in the final stages, and Filene expects to
publish the results by the end of September.
“SaveUp is trying to get people to be excited about a
chore, because thinking about financial services is a chore,”
he explains. “If we can prove that SaveUp is successful, the
opportunities are endless. We can make every aspect of what
we do fun, which would really differentiate credit unions.
How cool would it be if credit unions were fun and banks
were not?”
Davis believes it’s too early to draw conclusions about
SaveUp, as Filene has not yet calculated all of the data, but
it appears the program is doing well.
“GPO FCU did a quick adoption and set up of SaveUp,”
notes Davis. “Adopting new technology can be a pain for credit
unions, but GPO’s experience was a good one. Our hat is off
to them because it takes some bravery to be part of a new
program, and we as an organization really appreciate it.” ■
Michael Bartlett is the West Coast Reporter for Credit Union Journal,
the nation’s leading credit union newsweekly, providing objective
credit union community news. He has been a Credit Union Journal
staff writer for more than 10 years. He can be contacted at
mbartlett@cujournal.com.
www.cuany.org 35

alancesheetsolutions
Boardroom excellence: The importance of
financial literacy training
By Kristina Muller, CFA, Senior Portfolio Manager, Balance Sheet Solutions, LLC
WWE ASK A LOT FROM OUR BOARD MEMBERS. VOLUNTEERING
their time and efforts to help run a successful institution seems
like enough to ask of them. On top of that, regulations require
that they also receive regular training in many areas of the
credit union’s business and finances. Finding time to squeeze
this training into already tight board meetings can be difficult.
However, the importance of board training cannot be
overemphasized. Your board of directors is ultimately
responsible for the financial stability of your credit union.
Therefore, it is important to work with a knowledgeable
board that understands the risks that the
credit union faces. In Rule 701.4, the
NCUA focused on directors’ knowledge
of financial statements, but board
members need to be well informed about
several other topics, as well. Let’s look at
the importance of two specific training
areas: asset liability management and
investments.
Asset liability management
Asset liability management (ALM)
paints a picture of the potential risks for your credit union,
should the financial environment change. To assess these risks,
your balance sheet is run through a computer model that
estimates changes that will occur both in static and in
“shocked” interest rate scenarios. This modeling run is done
on a regular basis, and the results should be presented to the
board for review. However, the terminology and modeling
process of ALM is not something we use in everyday life, so
the board may be unfamiliar with the concepts presented. In
my experience, one training session is usually not enough to
get someone up to speed on ALM concepts. It can take several
quarters of exposure to ALM reports and terminology before
a director feels comfortable with the material.
In all financial market environments, boards need to
understand the interest rate risks that credit unions are currently
facing. Whether it is continued margin compression due to a
low rate environment or a drop in asset value due to rising
Boards need to
understand the
interest rate risks.
rates, if a director views an ALM report, they need to understand
the information in front of them. Should problems develop
down the road, the board cannot claim ignorance. The
information (and potential risk) was presented to them in the
ALM reports.
A regular review of ALM terminology and concepts is the
key to getting board members familiar with these reports. It
is not uncommon to see a board member using a one-page
“cheat sheet” along with their quarterly ALM report. This
cheat sheet has the definition of the key metrics they are
reviewing and the ranges for each metric
to be in compliance with their credit union’s
risk management policy. Webinars on the
topic of ALM can also be broadcast at
board meetings to help build familiarity
with the reports. If the board has not had
ALM training in quite some time and a
more intense approach is needed, many
ALM providers can offer an on-site
training session that focuses specifically
on your credit union’s ALM profile.
Investments
Investments may be an easier concept for the board to
understand than ALM, but the key here is for the board to
recognize how the investments impact the balance sheet. A
callable bond may offer a higher yield than a non-callable
bond, but that call option adds risk to the balance sheet that
the credit union may not need.
In addition to investment concepts, the board needs to
become familiar with the current market environment. We all
know that yields are low right now, but is your board actually
aware of how low? Would board members be surprised if you
mentioned that you bought a five-year bond and only received
a yield of 1.20 percent? What type of risk does this add to the
balance sheet? Board members need to understand that investing
for an institution is different than managing their own personal
investment portfolio. Each credit union investment plays a
role in impacting the balance sheet.
36 SEPTEMBER 2012 Connection

Training the board on investment topics can take many
forms. Many investment brokers would be happy to speak
to your board about the current financial environment or
perhaps provide a weekly publication from their investment
strategist. Those knowledgeable about the credit union industry
may be especially helpful. In addition, reputable financial
media websites (CNBC, Bloomberg) offer printable articles
and videos explaining financial news and relevant topics.
Training
Since many of your board members may work outside
the financial field, it is important to remember that they are
not regularly exposed to ALM or investment concepts. The
training on these topics may overwhelm some directors, while
appearing “dry” to others. Keep in mind that any training
should also be consistent with the size and complexity of
your credit union. Try to keep any education session as
engaging as possible; for example, reading from PowerPoint
slides may not be successful in teaching ALM or investment
concepts. Some ideas are:
• In-person presentations/discussions: Many brokers
or ALM providers offer this service to clients and
may bring a new perspective to your board.
• Webinars: Online training may also be available from
brokers and ALM providers. For a review of the financial
markets, NCUA recently launched a monthly web series
providing an economic update (www.youtube.com/
ncuachannel). One benefit of a webinar is that, if you
are pressed for time during a board meeting, the
directors can view the webinar on their own time.
• Break up the training session: It stands to reason that
board members may not remember all ALM terminology
after one training session. Perhaps limiting the training
session to 15-minute blocks that can be completed
during regularly scheduled board meetings will help
keep everyone focused.
How would you grade the financial literacy of your board?
No matter which training method(s) you choose to relay the
subject matter, remember that a well-informed board of
directors is vital to the success of your credit union. ■
Kristina Muller can be contacted at kristina.muller@balancesheet
solutions.org or (800) 253-0053 ext. 3757.
www.cuany.org 37

e&tmilestones
The Credit Union Association of New York commends the following individuals for completing the 2012 Frontline Compliance
Certificate Program and earning statewide Frontline Compliance Specialist certification. For information about future educational
opportunities offered by the Credit Union Association of New York, visit www.cuany.org/Events & Education.
2012 Frontline Compliance Specialist Certification
Adirondack
Amy Gallagher, Dannemora FCU
Brian Wilson, Dannemora FCU
Bobbi-Jo Whitman, Fulton County FCU
Buffalo
Sheri Markiewicz, Amherst FCU
Cynthia Tichenor, Amherst FCU
Brian Barrington, Buffalo Cooperative FCU
Christina Hidy, Gowanda Area FCU
Teressa Stuchal, Western New York FCU
Capital
Marissa Lachar, School Systems FCU
Central New York
Christine Neuhaus, Edge FCU
Amy Ciciriello, MONEY FCU
Grace Case, Oswego Heritage FCU
Stephanie Redmond, Oswego Heritage FCU
Karen Grabowski, WESTAR FCU
Jamestown
Cassie Austin, Alco FCU
Irene Rutkowski, Alco FCU
Crystal Sallazzo, Alco FCU
Amanada Staufenberger, Alco FCU
JoeElla Emborsky, Cattaraugus County EFCU
Lindsay Bossard, Inner Lakes FCU
Karen Swanson, Inner Lakes FCU
Long Island
Cathie Collins, Oceanside Christopher FCU
Irene Giannetti, Oceanside Christopher FCU
Metropolitan
Mirela Alexe, Van Cortlandt Cooperative FCU
Niagara
Nancy Zmuda, Niagara Falls Penn Central ECU
Rochester
Christine Ranallo, Cobblestone Country FCU
Carol Reinard, GRS EFCU
Bonnie Feeney, WIT FCU
Southern Tier
Linda Raymond, Horizons FCU
Susan Olmstead, Sidney FCU
Michelle Arnold, UHS Employees FCU
Utica-Rome
Laura Madore, GPO FCU
Cindy Dresser, Leatherstocking Region FCU
Rachel Soverns, Rome FCU
Professional
Development Grant
Opportunities
Professional Development Grants
(scholarships) are available for
these programs through the New
York Credit Union Foundation.
To apply, please e-mail information
to eandt@cuany.org or fax a
completed application to
(518) 782-4266.
To apply online or to download a
printable application form, visit
www.nycuf.org/Grants/Professional
Development/Professional
Development Grant Application.
For more information about
NYCUF grants, please call
(800) 342-9835, ext. 8108.
40 SEPTEMBER 2012 Connection

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