2011 GAC Attendee Briefing by pengxiang


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LSCU Attendee Briefing
Instructions to Access Briefing

To Register for the Webinar, go to:

Welcome & Opening Comments

    Patrick W. La Pine
  LSCU President & CEO
Numbers of Note

• As of February 21, LSCU had 131 registrants.

• 33 are first time attendees.

• 11 new members of Congress – 3 new members from
  Alabama and 8 from Florida.

• Over 2,500 Attendees nationwide, plus guests and
First Time Attendees - Alabama
•   Merrill Mann – APCO Employees CU, Birmingham
•   Wendell Pate – APCO Employees CU, Birmingham
•   Chris Gerety – APCO Employees CU, Birmingham
•   Larry Eagerton – Army Aviation Center FCU, Enterprise
•   Donna Brackin – Army Aviation Center FCU, Dothan
•   Scotty Bell – Family Savings FCU, Gadsden
•   Shane Nobbley – Family Security CU, Decatur
•   Debra McCaghren – Family Security CU, Decatur
•   Cole Sharp – Family Security CU, Decatur
•   Zac Howell, Family Security CU, Decatur
•   Cynthia Henexson, Five Star CU, Dothan
First Time Attendees - Alabama
•   Glenn Sutter, Jefferson County Employees CU, Birmingham
•   Carolyn Conway, Listerhill CU, Sheffield
•   Clay Morgan, Listerhill CU, Sheffield
•   Franklin Brown, Listerhill CU, Sheffield
•   Mark Massey, Listerhill CU, Sheffield
•   Mark Johnson, Naheola Credit Union, Pennington
•   Jeffrey Hasty, Naheola Credit Union, Pennington
•   Tommy Cobb, Tuscaloosa Credit Union, Tuscaloosa
First Time Attendees - Florida
•   Kevin Miller – CFE Federal CU, Lake Mary
•   Kevin Doutherty, CFE Federal CU Lake Mary
•   Marla Ferreira – Dade County FCU, Doral
•   Annamin Wilkinson – Dade County FCU, Doral
•   Mario Garcia – Dade County FCU, Doral
•   Daniel McNutt – Fairwinds CU, Orlando
•   Charlie Lai – Fairwinds CU, Orlando
•   Lisa Snead – Fairwinds CU, Orlando
•   Tyler Van Leuven – Florida CU, Gainsville
•   Hon. Paula O’Neil – Florida West Coast CU, Brandon
•   David Southall – Innovations FCU, Panama City
First Time Attendees - Florida
• Suzanne Weinstein – Orlando FCU, Orlando
• Julie Renderos – Suncoast Schools FCU, Tampa
• Wanda Gilbert – United Police FCU, Miami

    First Time Attendees
New Alabama Members of Congress

New Member             Replaced

Martha Roby (2nd)      Bobby Bright

Mo Brooks (5th)        Parker Griffith

Terri Sewell (7th)     Artur Davis
New Florida Members of Congress
New Member                                     Replaced
Steve Southerland (2nd)                        Allen Boyd
Richard Nugent (5th)                           Ginny Brown-Waite
Daniel Webster (8th)                           Alan Grayson
Dennis Ross (12th)                             Adam Putnam
Fredrica Wilson (17th)                         Kendrick Meek
Mario Diaz Balart (21st)                       Linconln Diaz Balart
    (Mario is not new to Congress, but to the 21st District)
Allen West (22nd)                             Ron Klein
Sandy Adams (24th)                             Susan Kosmas
David Rivera (25th)                            Mario Diaz Balart
Credit Unions & Banks
• 126 Alabama Credit Unions (61 FCU / 65 SCU)
   –   Total Alabama credit union assets     $ 15.1 Billion
   –   Alabama CU market share of assets     6.3%
   –   Average Alabama credit union assets   $120 million
   –   Total Alabama bank assets             $226 billion
   –   Average Alabama bank assets           $1.5 billion

• 174 Florida Credit Unions (98 FCU / 76 SCU)
   –   Total Florida credit union assets     $42.1 billion
   –   Florida CU market share of assets     21.6%
   –   Average Florida credit union assets   $242 million
   –   Total Florida bank assets             $152 billion
   –   Average Florida bank assets           $603 million
Project Zip Code
• Project Zip Code (PZC) is a secure web based
  program that counts your credit union members
  and matches them by congressional district,
  state legislative district and county.
• These numbers are uploaded to CUNA’s PZC
  website and combined with data from credit
  unions nationwide.
• This data aids in federal and state advocacy
  efforts, and is useful to credit unions interested
  in ATM expansion or shared branching.
• Please download the program at PZC Online
Project Zip Code
• Your information is completely secure with PZC.
  In fact, only the number of credit union members
  is transmitted to the PZC website and member
  data cannot be viewed by anyone outside your
• The master census that results from credit
  unions running PZC helps demonstrate the
  strength of credit union membership across the
• If you have not yet run Project Zip Code in 2010
  or 2011, please contact Robbie Gordon or Justin
PZC Counted LSCU Credit Union Members
by Congressional District (based on 82% mapped)
                                     Credit          CU          Total
                                     Unions        Members       Pop.

Congressional District 1                      54      109,238       634,771

Congressional District 2                      53      180,857       636,123

Congressional District 3                      52      111,724       633,537

Congressional District 4                      51      152,979       637,832

Congressional District 5                      50      259,729       637,904

Congressional District 6                      52      190,479       633,535

Congressional District 7                      53      189,353       637,398

                                         Total       1,194,359    4,447,100
PZC Counted LSCU Credit Union Members
by Congressional District (based on 93% mapped)
                 Florida    Credit Unions        CU Members      Population

Congressional District 1                    77         125,125         643,389

Congressional District 2                    77         190,071         635,168

Congressional District 3                    77         204,353         625,517

Congressional District 4                    76         256,040         640,369

Congressional District 5                    77         189,637         632,664

Congressional District 6                    77         244,291         647,117

Congressional District 7                    76         150,580         640,850

Congressional District 8                    77         160,813         643,641

Congressional District 9                    77         226,940         647,506

Congressional District 10                   74         221,017         637,620
PZC Counted LSCU Credit Union Members
by Congressional District (based on 93% mapped)
                 Florida    Credit Unions        CU Members      Population

Congressional District 11                   76         249,289         635,002

Congressional District 12                   77         137,745         638,530

Congressional District 13                   76         155,304         641,364

Congressional District 14                   76         154,401         639,943

Congressional District 15                   77         265,328         642,191

Congressional District 16                   75          65,993         648,931

Congressional District 17                   71         110,085         637,414

Congressional District 18                   74          57,418         636,057

Congressional District 19                   73          64,812         633,268

Congressional District 20                   72         106,129         644,503
PZC Counted LSCU Credit Union Members
by Congressional District (based on 93% mapped)
                 Florida    Credit Unions           CU Members       Population

Congressional District 21                     69           84,363          639,214

Congressional District 22                     72           69,790          631,670

Congressional District 23                     74           91,969          644,384

Congressional District 24                     76          218,631          638,666

Congressional District 25                     69          115,185          637,370

                                            Total        3,909,601      15,982,378
LSCU Staff Contact Information
                      Grand Hyatt Washington
              1000 H Street NW, Washington, DC 20001
            Phone: 202-582-1234       Fax: 202-637-4781

•   Patrick La Pine           (850) 212-3160 (Mobile)
•   Will McCarty              (205) 516-6985 (Mobile)
•   Jared Ross (FL)           (850) 590-6570 (Mobile)
•   Jason Cochran (AL)        (205) 249-4478 (Mobile)
•   Justin Thames (FL)        (850) 345-7795 (Mobile)
•   Robbie Gordon (AL)        (205) 834-1266 (Mobile)
Conference Agenda Highlights
Sunday, February 27, 2011
• 12:00 - 8:30 p.m. Conference Registration & Welcome Center Open.
• 5:00 – 6:30 p.m. – LSCU Hospitality Reception
   – Sponsors: Southeast Corporate Credit Union and Leverage
   – Hosted bar and Hors D’oeuvres
   – Penn Quarter Room in the Hyatt

• 7:00 - 8:30 p.m. Exhibit Hall Grand Opening.
• 8:30 p.m. Kickoff Concert: Three Dog Night - Presented by CUNA
Conference Agenda Highlights

Monday, February 22, 2011
• 7:00 a.m. – 5:00 p.m. Conference Registration Open

• 7:30 - 8:45 a.m. Exhibit Hall Open (Continental Breakfast)

• 9:00 - 10:30 a.m. Opening General Session:
   – Mark Halperin and John Heilmann

• 10:30 - 11:30 a.m. CUNA Annual General Meeting

• 11:30 a.m. - 1:30 p.m. Exhibit Hall Open (lunch provided)
Conference Agenda Highlights

Monday, February 22, 2011
• 1:30 - 2:30 p.m. Legislative and Political Update

• 2:30 – 3:30 p.m. General Session with Keynote Speaker
    – Chesley B. “Sully” Sullenberger III

• 4:30 – 6:00 p.m. LSCU Welcoming Reception
    – Sponsors: Morgan Stanley Smith Barney / CU Solutions
    – Hosted bar and Heavy Hors D’oeuvres
    – Penn Quarter Room in the Hyatt

•    5:30 p.m. Herb Wegner Memorial Awards Reception / Dinner
    (Grand Hyatt) (Separate registration required)
Conference Agenda Highlights
Tuesday, February 23, 2011
• 7:00 a.m. – 5:00 p.m. Conference Registration

• 7:30 - 8:45 a.m. Exhibit Hall Open (continental breakfast)

• 9:00 a.m. - 12:00 p.m. General Session:
    – Point Counterpoint with Arrianna Huffington and Mary Matalin

• 11:30 a.m. - 1:45 p.m. Exhibit Hall Open (lunch provided)

• 2:00 -4:45 – Breakout Sessions
Conference Agenda Highlights
Tuesday, February 23, 2011
• 5:00 – 6:00 LSCU Hospitality Reception
    – Sponsors: Co-Op Financial Services
    – Hosted bar and Hors D’oeuvres
    – Wilson-Roosevelt Room in the Hyatt

• 4:45 - 6:00 p.m. Reception with NCUA Board and Regional

• 4:45 - 6:00 p.m. Exhibit Hall Closing Session

• 9:00 - 10:30 p.m. Late Night at the GAC
Conference Agenda Highlights
Wednesday, February 24, 2011
• 8:00 a.m. - 12:00 p.m. Conference Registration
• 8:30 - 11:45 a.m. General Session:
    – 8:45 Alabama Congressman Spencer Bachus
        • All Alabama and Florida Attendees Invited backstage for our “Hike-the-Hill”
          meeting with the Chairman immediately after he speaks
    – 9:30 Florida Congresswoman Debbie Wasserman-Shultz
• Capitol Hill Visits Begin

• 7:00 p.m. Closing Conference Gala
Conference Agenda Highlights

Thursday, February 25, 2010

• Capitol Hill Visits continue in the morning

• Afternoon Travel Home
            PAC Lapel Pins

Chairman’s Club      $500 or more
President’s Club     $250 -$499
Congressional Club   $100 - $249
Capitol Club         $50 - $99
Ambassador’s Club    $25 - $49
Capitol Hill Visits

• The League of Southeastern Credit Unions will be conducting
  Hill visits Wednesday afternoon and Thursday morning

• Remember, we are in Washington to show our grassroots
  strength to our federal lawmakers. So, PLEASE make sure to
  attend the Hill visits!
Capitol Hill Visits
• To ensure that you have the most accurate and complete
  schedule of our meetings, the League will be sending the
  schedule separately by email at the end of the week before
  departure for the GAC.
• Updates to the schedules may be necessary as late as just
  days before the meetings. The most up-to-date schedules will
  be distributed at the League’s hospitality receptions on
  Sunday, Monday, and Tuesday nights, so please attend these
• Senate meetings are limited (due to space considerations in
  the offices) and individuals will be assigned to ensure
  broadest representation of credit unions.
Capitol Hill Visits

• The Hill meeting schedules are based on your credit union’s
  headquarters and branch locations.

• If your Hill schedule permits, please feel free to attend your own
  (home) representative’s meeting.

• LSCU staff will function as team leaders in Hill meetings. They will
  “tee it up” and look to you for specifics of how the issue impacts your
  members and affects your credit unions.
Hill Meeting Tips

• Arrive at least 5 minutes early for your Hill visits. Wait in the hall until
  other CU officials arrive.
• LSCU Staff will provide the lawmaker or their staffer with a copy of
  federal legislative issues briefing materials.
• Be prepared – Know the issues!

• Be sure to follow-up on your meetings with a “Thank You” letter,
  note or email.
• Please pass along any important information learned in your
  meetings (and any pictures) to LSCU Governmental Affairs staff at
Legislative Update

• Our Message to lawmakers and their staff this year is
  “Credit unions are the best way for consumers to
  conduct their financial services”

• The message revolves around the credit union difference
  (maintaining our tax status); how the difference creates
  benefits (better deal for consumers), added benefit we
  could provide if given the authority (MBL), the imperative
  of maintaining our tax exempt status, and challenges to
  providing that benefit (Interchange, the need for Capital
The Credit Union Benefit
    “Credit Unions are the best way for consumers to
    conduct their financial services”
•   With 11 new members of Congress from our two delegations, plus new
    members of staff in key positions, we must educate them what credit unions
    are, and how they benefit their members. Do NOT assume they understand
    credit unions.
•   The unique structure and nature of credit unions leads to a better deal for
     – Governed by a volunteer board elected by the membership, not controlled by
       outside stockholders;
     – Locally owned and operated;
     – Higher rates of return on deposits
     – Lower rates on loans and fees than banks;
The Credit Union Benefit
  “Credit Unions are the best way for consumers to
  conduct their financial services”
• Credit Unions benefit all consumers, not just their members:
    – The presence of credit unions in the marketplace motivates banks to
      keep their rates and fees competitive (although not what credit unions
    – Credit unions are local, so the benefit stays local to benefit their
    – Credit unions provide stability in the financial industry;
    – Credit unions did not engage in the risky behavior that caused the
      financial downturn, and did NOT seek or receive a taxpayer bailout.
The Credit Union Benefit
Credit Unions Continued to Loan While Others Pulled Back
• From 2008 – 2010 Credit Unions:
   – Increased real estate lending 14.4% while banks shrunk real
     estate lending by 10%;
   – Increased small business loans by 39.2% while banks shrunk
   – Increased total lending by 7.6% while banks shrunk 6.5%
• Even while increasing their lending as others pulled back,
  credit union rates continued to average approximately 1.5 to 2
  percentage points less than banks on most loan products.
The Credit Union Benefit
• Credit unions provided $189,582,926 in direct benefit to their 1.7
  million members from September 2009 – September 2010.
• $108 per member saved during that time
• $206 per member household (assume 1.9 members per household)

• Credit unions provided $310,349,410 in direct benefit to their 4.5
  million members from September 2009 – September 2010.
• $68 per member saved during that time
• $129 per member household (assume 1.9 members per household)
Value of the Credit Union Tax
• Congress has provided the credit union tax exemption
  because of the not-for-profit cooperative structure of credit
  unions and our mission to serve consumers.
• The tax status is not based on the size of the credit union, but
  on the structure, which is the same regardless of size.
• The credit union tax exemption is equal to $600 million, but
  creates $10 billion in consumer benefits annually.
• Eliminating the tax exempt status eliminates credit unions and
  the benefits they provide.
• Members of Congress should be outspoken in support of
  the credit union tax exempt status, and should not use
  the tax status as a reason to prevent improvements in the
  Federal Credit Union Act.
Interchange Fees
• Interchange fees are paid by merchants to credit unions and
  banks that issue debit and credit cards as their fair share of
  the cost of the payment system.
• Merchants benefit from consumer use of debit cards through
  lowered risk of less cash on premises, certainty of payment,
  and the risk of fraud being shifted to the card issuer. They
  should not expect to receive benefit without compensation.
• Interchange revenue is vital to the card issuer to cover
  operating expenses of offering the cards, fraud risk
  management, and risk of consumer non-payment.
Interchange Fees
• Dodd-Frank contained provisions that regulate debit
  interchange rates through an artificially limited set of factors.
• The Federal Reserve failed to consider some factors that
  Congress did include (fraud costs).
• The result is an unrealistic limit of 12 cent per transaction.
• While issuers under $10 billion are supposed to be exempt,
  the Federal Reserve’s proposed rule does not adequately
  enforce this exemption.
• If possible, please have ready the difference between:
   – What your debit card program costs are and the losses at 12 cents.
   – What the difference in income would be comparing current income and
     12 cents per transaction.
Interchange Fees
• During debate on the Durbin Amendment FL Congresswoman
  Debbie Wasserman-Shultz generated a “Dear Conferee” letter
  asking that the Durbin Amendment be stripped from the
  Dodd-Frank Act.
• Signed by 130 members of Congress:
   –   Jeff Miller
   –   John Mica
   –   Bill Posey
   –   Ileana Ros-Lehtinen
   –   Alcee Hastings
   –   Gus Bilirakis-
• Please thank Congresswoman Shultz and the members who
  signed the letter.
Interchange Fees
Reaction to the Federal Reserve’s Proposal
• Congressman Spencer Bachus sent a letter to the Federal
  Reserve with concerns over the Interchange Rule and the
  need to protect smaller issuers;
• Senator Richard Shelby and 12 other Senators also sent a
  letter to the Federal Reserve outlining concerns.
• Please thank Congressman Bachus and Senator Shelby
• House Subcommittee hearing held.
   –   How the Fed arrived at the limits;
   –   Why fraud costs were not included;
   –   Impact on smaller issuers like credit unions and consumers;
   –   Significant discussion in the hearing on the need to slow it down and
       start over with the proposed rule.
Interchange Fees
• Government intervention in debit interchange fees will result
  in cost-shifting from merchants to consumers and increased
  fees for consumers to obtain debit cards.
• The rule, as written, could disadvantage smaller issuers like
  credit unions and force consumers to higher cost debit cards
  from larger issuers.
• The proposal by the Federal Reserve is NOT what Congress
  intended as part of the Durbin Amendment.
• Members of Congress should support legislation that
  stops the implementation of the Federal Reserve debit
  interchange regulation so that the impact on consumers
  can be studied and so Congress can start over.
The Need for Supplemental Capital
• Credit unions historically have the lowest default/delinquency
  rates in virtually all categories of loans and maintained
  average net worth ratios well in excess of banks.
• Despite this historical strength, credit unions remain the most
  highly regulated and restricted of all insured institutions and
  are the only insured institutions that cannot issue some form
  of capital instruments.
• By law, not regulation as is the case for other financial
  institutions, credit unions must maintain a 7% net worth ratio
  to be considered “well capitalized”. The law requires that only
  retained earnings constitute net worth for credit unions.
The Need for Supplemental Capital
• The financial crisis has led to a drop of in the average credit
  union capital ratio and a significant decrease in the number of
  credit unions that have a net worth ratio of 9% or more.
• More credit unions need to raise capital at a time when the
  outlook for net income is not strong.
   – Net interest income has been on a long-term downward trend;
   – Interchange income is under attack and risks reduction
• Without access to supplemental capital and with earnings
  facing challenges, credit unions and their members will face
  reduced services, disadvantageous member pricing and slow
• Congress should modify the definition of credit union net
  worth to include supplemental forms of Capital .
Member Business Lending
• It is increasingly difficult for small businesses to obtain credit
  due to the uncertainty in the economy after the subprime
  lending crisis, as well as the consolidation of commercial
  banks in recent years.
• Small business owners are seeing their existing credit lines
  with banks reduced or cut off.
• Small business owners who do obtain credit often complain
  the terms are much less attractive than they could be if more
  lenders were in the market.
• While other lenders have reduced their small business
  lending, credit unions have increased it by almost 40% over
  the last 3 years.
Member Business Lending
    Credit unions have a history of making small business loans to
    their members.
•   Credit unions have been making MBL’s since the early 1900s.
•   Until 1998, there were no limits on the volume of MBL’s credit
    unions could make or hold. Statutory limits on CU MBL’s did not
    appear until passage of the Credit Union Membership Access Act.
•   CU’s are subject to a cap of 12.25% of their total assets.
•   MBL loss rates are lower than those on CU consumer loans and are
    a fraction of commercial loan loss rates at banks.
Member Business Lending
• There is no economic, safety and soundness, or historical
  reason for the current cap.
• In the next year, credit union lending to small businesses
  could increase over $10 billion, helping small businesses
  create over 100,000 new jobs if Congress increases the
  statutory cap on credit union member business lending.
• This economic stimulus can be accomplished without costing
  the taxpayers a dime or increasing the size of government.
• Unlike banks, credit unions do not need taxpayer assistance
  to encourage them to do more business lending, we only
  need the authority from Congress.
Member Business Lending
• During the last Congress HR 3380 (Kanjorski) and S 2919
  (Schumer) would raise MBL to 25% of assets, and raise the
  “de minimis” threshold from $50,000 to $250,000, and exempt
  loans to non-profit religious organizations and loans made in
  qualified underserved areas.
• Co-Sponsored by:
       Jeff Miller     Corrine Brown          Gus Bilirakis
       Kathy Castor Bill Posey                Tom Rooney
       Sen. Bill Nelson
• Please thank these members for their past support of Credit
  Union Member Business Lending
Member Business Lending
• 42 credit unions have about $429 million in outstanding
  member business loans, with an average loan size of
• Credit union member business lending in Alabama has grown
  8% over the last 12 months, while commercial bank business
  lending has shrunk 4%
• Removal of the 12.25% cap will produce over $184 million in
  new member business loans, creating over 1,900 new jobs in
Member Business Lending
• 69 credit unions have over $1.1 billion in outstanding member
   business loans, with an average size of $361,000.
• Credit union member business lending in Florida has grown
   2% over the last 12 months, while commercial bank business
   lending has shrunk 4%.
• Removal of the 12.25% cap will produce over $543 million in
   new member business loans, creating over 5,905 new jobs in
      Travel Safely!

    We look forward to
seeing you in Washington.

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