NACUSO 2014

What did you miss if you did not attend the 2014 NACUSO Conference this past week?  In a word, plenty.  There was tremendous energy for the potential of credit unions using the tools of innovation and collaboration to generate net income.   Through the generosity of MasterCard, Robert Herjavec of Shark Tank and an expert in the field of cyber security kicked off the Conference discussing his entrepreneurial background and providing a peek behind the scenes at Shark Tank.  Do you know that his most successful investment on the show was in naughty Christmas sweaters?  People could not buy enough of them. Yes the judges really do fight and despite that they seem to find a way to have a beer together after the show.   The actual presentations average about 1.5 hours but they are edited to six minutes apiece.

Robert stayed on after his presentation to be a judge at NACUSO’s Second Next Big Idea Competition along with Sarah Bang COO of CO-OP Shared Branching, Mike Kelly CEO of PSCU and Stephanie Sherrod CEO of Texas Dow Employees Credit Union.  The winner was chosen by the vote of the attendees.  The winner was nCino, a company that provides digital tools to view the entire member relationship.  The other four competitors were also very impressive.

Buffalo Pacific has an eye-popping 3D interactive video that makes you believe that the person’s image across the desk from you is not an image but the actual person.  It is Star Trek-beam-me-up-Scotty good.  The co-presenter was hundreds of miles away but interacted with the on-site presenter as if he was in the same room.

The Harmony Loan attracted positive attention.  It is an automated means to permit a member to reset his/her loan’s interest rate within parameters set by the credit union.  Neither the credit union nor the member have to endure the time and cost of refinancing a loan.  It is a market differentiator that will attract new loans and retains them for a credit union with a process that is almost instantaneous.

nagraID provides a dynamic authentication for “card-not-present” transactions.  By having a one-time password with two factor identifications, the card is much more secure than cards with static numbers.

The Intercept CUSO provides referrals to non-credit union lenders to serve a member who has a lending need for a long term unsecured loan (e.g. $3000 over 3 years) that is not available through the credit union.  It is an attempt to avoid saying “no” to a member and a means to generate referral fees.

The presentation by the Disney Institute on the philosophy and the execution of the Disney experience was both entertaining and enlightening.

Congratulations to CUSO of the Year winner CU Insurance Alliance, a CUSO that has provided excellent innovative health insurance products and generates substantial income for its credit union owners.  Hats off to the credit union collaborator of the year, America First Credit Union.

In the break-out sessions there were experts in investment services and insurance services who shared best practices to provide alternative revenue streams to credit unions.  Many credit unions enjoy millions of dollars a year in commission sharing from the sale of investment and insurance products.  Successful business lending CUSOs shared how they are able to provide high yielding loans with good lending practices.  Mortgage lending experts discussed how they are dealing with the business and regulatory challenges.  Attorneys from the nationally renowned law firm of Ballard Spahr shared their extensive experience of protecting their clients from the overreach of the CFPB.

Other presentations included CUSOs providing compliance services, back office operations, and mobile banking solutions.   There was a CUSO that generated capital for a credit union through the sale and leaseback of the credit union’s office building.  This CUSO also provided the credit union’s members a chance to invest in the CUSO and share in the profits.  There was a CUSO using non-profits and government grants to build homes for low income families with financing through low cost credit union mortgage loans.

Both NCUA and NASCUS representatives spoke at the Conference.  With the recent passage of the CUSO Rule indirectly regulating CUSOs and the Risk Based Capital Rule imposing a risk rating of 250% on CUSO investments, there was a palpable level of frustration and even anger by the attendees.  NCUA does not seem to understand that their policies are chilling investments in CUSOs and the ability of CUSOs to generate much needed net income for credit unions.  NASCUS on the other hand seemed to have an approach that oversees CUSO risk to credit unions without imposing counterproductive policies.

There were two take-away feelings.  One take-away feeling was very positive and up-lifting.  There are have never been as many good ideas to serve members and generate net income through innovation and collaboration.  Many of the ideas have already been proven in practice.   The other take-away feeling is that an adverse regulatory climate threatens to undermine these benefits to the credit union industry.   Both take-away feelings have a high level of passion.  In response, NACUSO is prepared to substantially increase its regulatory advocacy to create a better climate for innovation and collaboration.  Don’t miss next year’s Conference.

Guy Messick

Guy Messick

Guy was General Counsel to NACUSO from 1987 to 2020. In that position, Guy advocated for credit unions and CUSOs before NCUA and other regulatory agencies. He is retired from ... Web: www.cusolaw.com Details