Budgeting's Not a Chips and Salsa Party

In a commentary article posted on Credit Union Management, our CEO, Richard Gallagher discusses how budgeting’s not a chips and salsa party. At times can be mundane, but it is necessary for your credit union.

The Lifeblood

Budget allocation for credit unions should ultimately be about growth and stability, but always with respect to net revenue. Viewing that as the heartbeat keeps allocation honest. Without strong net revenue, there will be no asset growth. This will affect things like operating expenses and credit losses. Your credit union will have to either lighten the load or encourage asset growth to keep net revenue healthy. Of course, the latter is preferred. 

One of the greatest assets of mobile banking is 24/7 access. Members can check loan balances at any time, just as There are a few things you can do right now to see whether your budget is in line with current net revenue. First, go over each line item and compare it to past years’ budgets. Are there any blatant discrepancies? If so, look into them and find the cause. Chances are you will find one of two things: Either the expenditure in question cost more than anticipated or it did not produce as expected. Any item that is a cost drain or does not address productivity will have a negative impact on net revenue.

Once you find those items, take time to go through them and determine the underlying issues. Correcting them mid-year during allocation planning will keep net revenue strong and healthy. 

Richard Gallagher

To read more about how your credit union can successfully allocate your budget go check out the CU Management article and then check out our lending documents for your credit union.

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The Equifax Breach & Your Credit Union

In a commentary article posted on American Banker (formerly the CU Journal), our CEO, Richard Gallagher discusses how important cybersecurity is for credit unions or anyone in the financial industry. Specifically, he looked at the Equifax breach and your credit union as far as how it can be affected by this breach and similar exploits.

The world of identity theft shifted a bit on Sept. 7, when news broke that hackers had infiltrated the Equifax consumer database. It’s estimated that somewhere around 143 million consumers were affected. This means vital information like names, dates of birth, social security numbers, and credit card information could potentially be up for grabs. And while it’s sobering to think that all of this data could be sold to the highest bidder, the response by Equifax seemed to further complicate the matter.

The website, www.equifaxsecurity2017.com, was set up by the credit bureau to assist consumers with ascertaining whether or not their information had been compromised. However, the official Equifax corporate Twitter account redirected consumers to a fake phishing site for a while before the tweets were noticed and removed. Once the mistake was realized by Equifax, the phishing site was taken down. It was a step by an engineer to bring perspective to the issue of just how dangerous and unnerving the security breach is.

Richard Gallagher

To read more about cybersecurity and your credit union go check out the American Banker article and then check out our compliant lending documents for your credit union.

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Best Practices for CU Social Media Marketing

Best Practices for Compliant Social Media Marketing

In a commentary article posted on Credit Union Times our CEO, Richard Gallagher, discusses Best Practices for CU Social Media Marketing to stay compliant.

Compliance authorities are bringing their A-game, and so should you.

Is your marketing compliant? Do you know what you can and can’t say? What about your social media posts? Are they compliant? These are big questions and they won’t be ignored. The compliance authorities are bringing their A-game, and so should you! Catching one examiner’s eye could end up costing you thousands if your marketing efforts breach certain parameters, and it doesn’t even require them to visit you onsite. Let’s take a closer look. It all begins with basic guidelines set forth by the CFPB.

Basic Marketing Guidelines

The guidelines were established by the bureau as an effort to protect consumer interests. Here are general guidelines to follow when advertising on print, television, and radio. All marketing and advertising efforts must: Be factual and accurately represented, clearly explain the product or service being offered, give no misrepresentation of cost or terms, make sure all disclosures are prominently displayed, and avoid using unfamiliar terms.

Keep in mind these are general guidelines. Essentially, the idea behind the guidelines is to make sure you communicate your message clearly and to describe the product or service being offered in an accurate, honest manner. This allows the consumer to make the best possible decisions regarding the product or service being offered.

Richard Gallagher

To read more about how your credit union can be compliant with their social media marketing go check out the CU Times article and then check out Oak Tree Marketing Services for your credit union.

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Strategic Budget Planning

Are You Ready for Budget Planning Season?

It’s almost budget planning season again. That means you are probably making plans for planning season. That’s a really horrible pun, but the message is clear. Nothing happens very well at a credit union without planning. With that said, let’s look at a few elements to include in your strategic budget planning.

1. Communication.

Once a strategic plan is approved by your board of directors, it is up to leadership and upper management to make sure the plan is carried out. The best way to ensure this is with consistency. If your staff sees you carrying out elements of your strategic plan consistently, they will be more likely to follow through on them as well. Your consistency communicates the importance of each element. And while staff meetings, emails, and memos are important means of communication, consistency via management action is the most effective communicator.

2. Delegate.

This item goes hand in hand with communication. Delegate certain elements of your strategic plan to staff members, accordingly. This makes execution extremely efficient. Of course, you need to make sure your staff is empowered to make decisions if you delegate the reigns of power. Otherwise, your plan will be suffocated through micromanagement. Staff meetings are excellent vehicles for distilling information and clarifying any items that might be vague. Just be sure your staff feels like they can ask questions without fear of consequence. Create an open, honest culture, consider vendors that have been in business for a while, and delegate. Then watch your plan take shape.

3. Never Stop.

The whole purpose of a strategic plan is forward motion. To that end, your organization should never stop moving in that direction. It might be helpful to create some sort of online portal, so board members can give input and begin the decision-making process for “housekeeping” or other process-related items. This way, they can give input beforehand, saving face-to-face meeting time for high-value issues and priority concerns.

Addressing these elements before you begin strategic budget planning will do more than just empower your staff and management; it will enlarge your entire credit union. As your credit union grows, things will change. Processes will be modified, new positions will be created, and increased productivity will be expected. That is how you know your strategic plan is working. And don’t worry, either. We will be with you every step of the way with safe, compliant forms and disclosures so your credit union can keep planning and growing. Connect with us for a strategic marketing plan customized for your credit union goals and demographics.

Maintain Compliance

In a commentary article posted on Credit Union Times, our CEO, Richard Gallagher discusses the importance of credit union forms being up to date to maintain compliance.

Maintaining Compliance: A Lesser Burden, a Real Threat
Don’t let out-of-date forms be the elephant in the room at your credit union.

Credit Union Compliance: Always Changing

Compliance always seems to be the elephant in the room among credit union discussions. It can be found in just about every board meeting, conference, and executive luncheon. There is good reason, too. Just a few years ago, compliance threatened to close down many credit unions.

The Elephant, or Grim Reaper, in the Room?

In 2013, more than 800 credit unions had closed their doors over a four-year span. Contribution to this was partially the Dodd-Frank Act, which many institutions found to be cumbersome. The regulatory burden was too much for them. Other credit unions were swallowed up in mergers, just so they could survive. Times were scary and uncertain. During this time, compliance was not an elephant in the room; instead, it was the Grim Reaper.

Even today, compliance has a big impact on credit unions, according to Utah Credit Union Advocacy and many other credit unions. Here is how regulatory compliance is impacting credit unions:

Richard Gallagher

To read more about how your credit union can increase its lending growth opportunities go check out the CU Times article and then check out our lending documents for your credit union.

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2017 Field of Membership Rule Changes

In a commentary article posted on CU Management (Powered by Cues), our CEO, Richard Gallagher discusses how rules and regulations changes made in the part 701 to broaden the field of membership definitions. Here is a quote from the 2017 Field of Membership Rule Changes article:

Among other shifts, the new guidelines open membership to more rural residents.

In late October the National Credit Union Administration finalized changes to part 701 its rules and regulations that broaden the field of membership definitions for federally insured credit unions. The agency announced that, as a result, more Americans will become eligible for credit union products and services effective Feb. 6, 2017.

The change had the added benefit of re-naming NCUA’s consumer office to clarify its function and role in promoting consumer access to affordable financial services. NCUA Acting Chairman and prior Board Member J. Mark McWatters noted that the change would enhance consumer access to credit by sensibly and reasonably updating NCUA’s rules.” He further noted that the “… field-of-membership final rule is consistent with both the letter and spirit of the law.”

The shift was one of the biggest regulatory moves for credit unions of 2016. Banks and other large financial institutions see it as a threat because it could have a substantial positive impact on credit union membership growth. Opponents of the change have threatened lawsuits challenging credit unions’ not-for-profit status.

Richard Gallagher

To read more about these changes to the field of membership rules and how they may affect your credit union go check out the CU Management article and then check out our credit union membership documents for your credit union.

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Electronic Signatures & The Signature Card

There is a myth floating about, creating quite a stir among credit unions. Many credit unions are under the assumption that in order for a member to be installed, they must have a signature card on file. Failure to do so prevents the individual from becoming a full-fledged member. However, this is not the case. Let’s dig deeper into electronic signatures & the signature card.

The Truth about Signature Cards

While it is true that a signature card must be kept on file, obtaining it immediately is not a requirement. In addition, according to the Electronic Uniform Transactions Act, it may not be required at all. Forty-seven states have adopted the law, which is an attempt to harmonize paper retention requirements against the validity of electronic signatures.

Obtaining New Members with Electronic Signatures

If your credit union resides in one of the 47 participating states, an electronic signature is all you need. This is helpful to understand for a few reasons. First, it could help drive membership growth online. If your credit union staff has been apprehensive in the past about pushing online applications due to the rule, understanding the validity and veracity of electronic signatures changes things.

Second, this buys some time for you. If you are in a state where a hard copy signature card is a must, have your members fill out the application online and come in later at their convenience to sign the card. They have to come in for credit union transactions, anyway. Your staff is going to see them face to face. Yet, all that is required for membership is a valid application and account number. Once you have those two things, you have a new member.

Capturing Member’s Signature

One of the main concerns with digital signatures is that most people’s “digital signatures” don’t match their “wet signatures.” This becomes important when it comes time to verify whether or not the member actually signed something (i.e. situations involving fraud). In those cases, the member’s digital signature would likely not resemble his manual signature; in which case, there would be the need to rely on evidence that’s predominantly circumstantial to verify the validity of the signature. Credit unions could verify the identity of their member’s signature through a variety of ways such as a current copy of their driver’s license, passport, log-in I.D., secret question and answer, SMS code or third-party authentication service, or other forms of identification approved by the credit union.

Preparing for New Members

Our new member forms packet contains all of the forms you need to install new members. They are safe, secure, and integrate easily with your data processor. We hope this sheds some light on the issue for you and your staff. Don’t let the signature card myth keep you from membership growth.

Questions? Chat with us at www.OakTreeBiz.com or email us at ClientServices@OakTreeBiz.com.