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Credit Union Times

JULY 18, 2018 | VOL. 29 | NO. 24 | CUTIMES.COM

or the privilege of keeping their federal tax exemption and providing public transparency about their financials, operations and governance, nonprofits, including state-chartered credit unions, are required to submit a

990 form every year to the IRS.

But for two of Michigan’s largest credit unions, their privilege of maintaining their tax-exempt status could be at risk, or they could face stiff fines and come under IRS audit scrutiny, for filing inaccurate and incomplete 990 forms over several years.

One of the key parts of the 990 form requires credit unions to fully reveal specific information about executive compensation, including the executive’s name, title, the amount of his or her W- 2 compensation, W- 2 compensation from related organizations and estimated amount of other compensation from the credit union or related organization. This information must be listed in this manner in Part VII of the 990 form. Additionally, in Schedule J of the 990 form, credit unions are required to report the names and titles of executives, including their base salary, bonus and incentive compensation, deferred and retirement compensation, nontaxable benefits and other reportable compensation. Y17 990s: Failure to File

COMPLIANCE

PETER STROZNIAK

pstrozniak@cutimes.com

Must Reads

REGULATIONS

Boosting CU Pot Banking

On July 3, New York Gov. Andrew
M. Cuomo directed the state’s
Department of Financial Servic-
es to support the development
of medical marijuana and indus-
trial hemp businesses by issu-
ing guidance regarding what his
statement announcing the guid-
ance called the “safe and sound
provision of banking services for
these businesses.”
According to Cuomo’s state-
ment, the DFS guidance is de-
signed to encourage New York
state-chartered banks and credit
unions to consider establish-
ing banking relationships with
medical marijuana-related busi-
nesses that are operating in New
York in full compliance with all
applicable New York State laws
and regulations, including the
New York Compassionate Care
Act, and the applicable regula-
tions and requirements of the
state Department of Health.
The guidance also encourages
state-chartered banks and credit
unions to support the develop-
ment of industrial hemp busi-
nesses statewide.

“The ability to establish a banking relationship is a challenge that legal industries face unlike no other,” Cuomo said. “As the federal government continues to sow discord surrounding the medical marijuana and industrial hemp businesses, New York has made significant progress in creating a supportive economic development and regulatory landscape for these companies.” Y15

FOCUSREPORT:

Credit unions are constantly juggling members’ security needs with their desire for a frictionless user experience. In this Focus Report, learn about a technology solution that helps CUs strike a balance between the two by asking members to take selfies. Y6

FINTECH

GROWTH

CUs Shift Checking Account Strategies

he number of check-
ing accounts has fallen
by almost 100 million
in the last six years, ac-
cording to recent research from
financial institutions analytics
company Moebs Services, but
credit union industry experts said
not every credit union is feeling
the pinch – in fact, many can ben-
efit from the change in the check-
ing landscape if
they know why it’s
happening and
how to capitalize
on it.

Using bank, thrift and credit union data from the NCUA, FDIC

and Federal Reserve, Moebs Services reported in May that the total number of checking accounts dropped from about 690 million in 2011 to just over 600 million in

2017 – a 12% decline over six years, or about 2.2% per year. Those numbers also include business accounts, Moebs Services Economist and CEO Michael Moebs told CU Times.

Much of the drop is due to competition from fintech companies and retailers such as Walmart,

Starbucks and Apple offering
products that mimic the features
of checking accounts, Moebs said.
“Most depositories don’t re-
alize Walmart, and soon
TINA OREM
torem@cutimes.com