Trusted News for Credit Union Leaders
Credit Union Times
OC TOBER 24, 2018 | VOL. 29 | NO. 37 | CUTIMES.COM
Must Reads
INVESTMENTS
‘Pensionize’ 401(k)s and IRAs
In a world of defined contributions, American workers have
three challenges – inadequate
savings, leakage (or loans/early
withdrawals) tied to their retirement accounts and the need for
retirement income. Plus, just half
of all DC plans offer a way for
investors to transform balances
into periodic retirement income,
with only one in five offering
guaranteed lifetime payouts.
This situation prompted Steve
Vernon of the Stanford Center on Longevity, Wade Pfau of
The American College of Financial Services and researcher Joe
Tomlinson to explore and devise solutions to “pensionize”
retirement plans. Their work,
first published last year and then
updated this year, finds that only
one-third of workers contact financial advisors, and most lack
the necessary skills to convert
savings into retirement income
and typically have short planning horizons.
But research from the Stanford Center on Longevity (SCL)
and Society of Actuaries (SOA)
has found a “straightforward retirement strategy,” according to
the three authors. “Choosing a
specific solution that will help
workers generate retirement income requires them to make
informed tradeoffs between potentially competing goals,” they
explained, such as “maximizing
lifetime income; providing access to savings (liquidity); planning for bequests; Y14
CYBERSECURITY
Threats to Privacy Persist
The film industry has a rich his
ory of depicting and romanticiz-
ing cyber crime, from “The Girl
with the Dragon Tattoo” to “Sky-
fall.” While these films might not
be true to real life, cyber crime’s
frequent portrayal is a telling dis-
play of how crime is evolving as
our society becomes increasing-
ly reliant on technology.
However, cyber crime today is
a far more common threat than
anything portrayed in the mov-
ies. In the last 20 years, crime
has shifted away from the theft
of physical possessions, for ex
ample, to criminals carrying out
the majority of crime digitally.
This is especially true in the
United States, where not only
are cyber insurance claims dramatically increasing, but shifting
away from data breaches – the
main concern only a few years
ago – and moving toward other
types of cyber crime. In fact, theft
of funds and ransomware now
account for over 50% of CFC Underwriting’s cyber claims, eclips
ing what is traditionally seen as
the main cyber risk in the U.S.
– privacy.
The New Threat Has Already
Begun to Shed its Skin
Cyber crime, within a cyber
surance context, generally refers
to cyberat acks, which relate di
rectly to the th ft or extortion of
money from the victim, as opposed to theft of data or damage
to systems. Of course, cyberat
tacks involving he theft
Commercial
Card Programs
CUs should give
them a second
look. Y12
The Appeal
of Venmo and
Zelle
Convenience is
king. Y8
FOCUSREPORT:
MOBILE BANKING
& PAYMENTS
It’s been three years since the EMV liability shift took place.
So how much longer will credit and debit cards carry
magnetic stripes? Learn five hurdles that will keep the
magstripe alive for the foreseeable future in this Focus
Report. Y6
GROWTH STRATEGIES
Small, Struggling CUs Forced to Merge
hough the economy
is booming, it did not
help credit unions that
had to merge because
of their financial challenges. In
July and August, the NCUA gave
the green light for 30 credit union
consolidations, and a third of
them, including a New York credit
union that managed a $69 mil-
lion taxi medallion loan portfolio,
Nonetheless, in the last two
months of the summer, the NCUA
approved strategic mergers or
consolidations for “expanded ser-
vices.” Those strategic mergers in-
cluded two sizeable credit unions
in Wisconsin and Minnesota, and
one large consolidation between
credit unions in California and
Alaska.
From January to August, 120
mergers were approved, which is
down from the 132 consolidations
approved from January to August
last year. It’s uncertain, however,
whether the pace of mergers will
continue to slow down, particu-
larly strategic mergers, as some
credit union executives have pre-
dicted, because of the controver-
sial NCUA regulations that offi-
cially began on Oct. 1.
The $183 million Bay Ridge
Federal Credit Union in Brook-
lyn, N.Y., chartered in 1934, was
the largest cooperative that
PETER STROZNIAK
pstrozniak@cutimes.com
Y16
PAC
Donations
Rise as
Elections
Loom
POLITICS
DAVID BAUMANN
dbaumann@cutimes.com
ith less than a
month remaining before Election Day and partisan control of both houses up for
grabs, credit union trade groups
are shifting their political spending into high gear.
CUNA’s political action committee, known as CULAC, is on
pace to spend a record $7 million on the mid-term elections,
according to Trey
Hawkins, CUNA’s
deputy chief advocacy officer for political action.
In 2016, CUNA
and its political
action committee
spent almost $2.4 million on the
election, according to the Center
for Responsive Politics. During
the last mid-term election in 2014,
CUNA spent almost $2.5 million.
NAFCU operates a much smaller political action committee. By
the end of August, NAFCU had
spent $166,000 on candidates. In
2016, it spent $223,500.
The volatility apparent in the
electorate has not changed Y17
Hawkins