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Credit Union Times

MAY 23, 2018 | VOL. 29 | NO. 18 | CUTIMES.COM

FOCUSREPORT:

As the U.S. population grows more and more diverse, the average credit union board’s demographics remain largely unchanged. Learn what’s keeping credit unions from recruiting diverse, young board members and how some are overcoming the challenges in this Focus Report. Y6

GOVERNANCE

& VOLUNTEERS

Governance and Risk

What’s the board’s ALCO role? Y10

Board Challenges

Grow along with industry changes. Y8

HUMAN RESOURCES

Benefits Strategy: Opting Out As a result of the strong economy and the Tax Cuts and Jobs Act of 2017, many employers are considering ways to enhance their benefits packages. Some employers have already increased employer contributions toward their health plans and others have increased their 401(k) matching contributions. Another potential option for employers is to add an opt-out payment for those who waive health coverage.

Opt-out payments refer to payments that: • Are available only if the employee declines or waives coverage under an employer-spon-sored health plan; and • Cannot be used to pay for coverage under the employer-spon-sored health plan.

An example of such a payment is where ABC Corp offers its full-time employees medical coverage at a cost of $100 per month for individual coverage. It also offers a $50 per month opt-out payment to full-time employees who decline or waive coverage under the ABC Corp plan. Under this arrangement, employees can pay $100 per month to take the coverage or receive $50 if they decline or waive.

Here are several important considerations when determining if an opt-out payment is right for your benefits strategy.

ACA Affordability
Considerations

The IRS generally requires that cash opt-out payments Y14

CUs Ignite Commercial Loan Growth

any credit unions seek to raise their level of commercial loans. Two of them, one in Ohio and the other in Washington, used slightly different efficiencies to successfully raise their business lending game.

The $4.2 billion, Beavercreek,
Ohio-based Wright-Patt Credit
Union, which has 356,000 mem-
bers and 31 branches, mostly in
the Dayton area, wanted to digi-
tize the commercial lending pro-
cess, and focus on growth and
serving business members.

WPCU raised its commercial loan portfolio 156% year over year, using a cloud solution combining the Wilmington, N.C.-based nCino’s Bank Operating System integrated with e-signatures from the Chicago-based eSignLive by VASCO.

“In the last two years, we have
increased our capacity of lending
per borrower from
$5 million to $15
million. We were
processing 30 to
40 loans a month.
For several months
running, we’ve
had 100 loans in
production in a
month,” Benjamin
Miller, commercial portfolio man-
ager for WPCU, said.
STRATEGY

ROY URRICO rurrico@cutimes.com

Y16

Miller

New
Members
Ditch the
Branch
MANAGEMENT

TINA OREM torem@cutimes.com

or many people, their first in-person visit to a credit union branch is critical – it’s where all the new membership forms usually are, after all. But thanks to smartphones and computers, fewer prospective members may be willing to make the trek to a branch just to join a credit union. That’s raising questions about whether credit unions should invest more in digital-only membership applications and onboarding processes, and less in traditional face-to-face, paper-based systems.

However, taking the new membership process digital can be tricky. A recent study from Citi found that mobile banking apps are now one of the three most-used types of smartphone apps, and a PwC study recently found that 46% of consumers now do all their banking digitally – almost double the number in 2012 (27%). A J.D. Power study found, however, that “digital-only” customers – those who use only online or mobile channels for banking – were the least satisfied group of banking consumers.