Trusted News for Credit Union Leaders
Credit Union Times
APRIL 19, 2017 | VOL. 28 | NO. 13 | CUTIMES.COM
upporters of the House’s
highly partisan process
to overhaul Dodd-Frank
are likely to face a stark
political obstacle in the coming
months: The United States Senate.
In the coming weeks, the House
is likely to ram through a highly
partisan bill that would, among
other things, vastly decrease the
power of the CFPB. But enactment of any regulatory overhaul
is likely to require 60 votes in the
Senate – a high hurdle that will
require some compromise with
And many Democrats are fans
of the CFPB.
“If there is no bipartisan compromise, the CFPB will stay as it
is presently structured because
meaningful reform is going to require 60 votes in the Senate and
that will be impossible to get
without Democrat votes,” former
NCUA Chairman Dennis Dollar
The House Financial Services
Committee is scheduled shortly
to mark up its plan to change the
financial regulatory regime. The
committee approved similar legislation last year, with Dem- Y17
A CUSO Under Attack
A fierce legal battle is under way
between a student loan CUSO’s
seven big credit union members
and what was once one of the
largest for-profit education companies in the nation that went
bankrupt last year.
What’s at stake in this controversial case is hundreds of millions of dollars that the CUSO
claims it is owed.
lawyer Deborah J. Caruso, who
is representing ITT Technical Institute, claims the CUSO, Student
CU Connect LLC, contributed to
ITT’s closure and bankruptcy
and argues the $224 million in
dispute should be withheld and/
or recovered from the CUSO.
“The CUSO loan program
scheme was, at a minimum, a
colossal breach of ITT’s former
management’s fiduciary duties,
may have constituted outright
fraud by such management and
unquestionably resulted in a
massive fraudulent transfer of
ITT’s assets to and/or for the
benefit of the defendants (the
CUSO and its credit union members),” Caruso wrote in court
New York City-based attorney
Richard J. Bernard, who is representing the CUSO, said Caruso’s
complaint has no merit.
“The defendants (the CUSO
and its credit union members)
at all times have acted properly
and in good faith, and to the extent that ITT or its management
has engaged in any wrong- Y15
redit unions gained
a record share of the
U.S. credit card market in 2016, in part
because they have been able to
match the marketing tools of big
banks with rewards programs.
Banks had been able to domi-
nate the loyalty arena because of
the high expense of building a sys-
tem that tracks and acts on con-
sumers’ purchases by rewarding
them with points. Those systems
also have to provide ways for con-
sumers to redeem those points.
The expenses favored scale.
In recent years, CUSOs have
emerged that provide that infrastructure to smaller credit unions.
Along the way, the technology behind rewards programs has improved, lowering the costs for big
and small lenders alike.
“The bar to entry has gone to
the floor,” Andrew Gates, a loyalty
program consultant, said.
Now the test for credit unions
will be graded on a human scale:
How well can credit unions listen to their members, provide rewards members want, and engage
members in using the rewards
system both by earning points
and redeeming them, according
to Gates, CEO of Azigo Inc., a loyalty technology company.
Credit cards started becoming
part of credit union offerings in
the 1980s, and have grown
CUs Make Cards More Rewarding
Workplace diversity: It’s on the minds of most organizations’ leaders,
but not all have been proactive in its implementation. Learn why some
believe it’s time to have an uncomfortable conversation about the topic
in this Focus Report. Y6
Credit unions have
the power to improve
Don’t let it happen at your credit