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Credit Union Times

MA Y 1, 2019 | VOL. 30 | NO. 14 | CUTIMES.COM

FOCUSREPORT:

SERVING MINORITY GROUPS

The Great Recession resulted in a decline in homeownership in many communities – especially those dominated by minorities. Learn how credit unions can help minority groups rebuild their wealth and embark on a path to financial success in this Focus Report. Y6

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;

EMPLOYEE BENEFITS

Should Your CU Self-Insure? We are a l familiar with the say ing, “If you want something don properly, do it yourself.” But what if this saying was also true: “If you want something done profit ably, do it yourself”?

When it comes to employee health insurance, most employers would probably balk at the dea of pulling the function in-house. Today, of course, most U.S. employers farm out their benefit plans – paying an insurance provider that contracts a network of doctors and hospitals to care for employees and manage claims and other administrative minutiae. But a shift in regulatory com pliance and recent technology advancements mean the industry is now seeing a growing number of employers who are benefiting significantly by, in some part, be coming their own insurer.

The Sickness Pool

One of the challenges with the tra ditional approach is that employee health insurance is a statistical game of risk – and the odds may be stacked against many employers. In most cases when an em ployer pays premiums to a large carrier for health insurance, they are swimming in a giant pool with many, many individuals with sig nificant health conditions. Th carrier is exposing itself to risk, and everyone ends up subsidizing the higher-risk employee population.

Picture two very different em ployer environments, Y16

Life Insurance Opportunities Many scenarios can trigger a sale. Y12

The Second

Bottom Line

Target minorities to boost social impact. Y7

fter Linda Levy retired last year from the $55 million Lower East

Side People’s Federal
Credit Union in New York, N.Y.,
Cliff Rosenthal, former executive
director of the National Federa-
Credit Unions (now Inclusiv), said
it would be difficult to find a new
president/CEO who could fill her
shoes, according to a New York
Times article headlined “The Little
Bank that Could.”
In the April 13, 2018 feature
story, Rosenthal noted the suc-
cessor would require an “extraor-
dinary combination of being very
focused on the business aspect
and yet being in tune with the
political and social aspirations of
that community,” he said. “Those
things are not easy to find.”
After several months of search-
ing, the credit union board hired
that not-so-easy-to-find CEO,
Maureen Genna, who holds
an impressive combination of
work experience at credit unions
with sizable assets and small
credit unions where she devel-
oped a passion for serving the
underserved.
It was that same passion under
Levy’s executive tenure that fueled
the credit union’s growth in assets
and membership over the years
despite being surrounded by the
world’s biggest banks – not
CEO Profile: A Small CU Survivor

PETER STROZNIAK pstrozniak@cutimes.com

Y17

GROWTH STRATEIGES

OMB Makes
Huge Power
Play
DAVID BAUMANN
dbaumann@cutimes.com

he NCUA’s regulatory process may soon slow to a crawl.

And it won’t be the agency’s fault.

On April 11, the Office of Management and Budget announced that beginning May 11, all guidance and rules issued by independent agencies, such as the NCUA, CFPB and other financial regulators, must be submitted for review by the budget office. If the rules or guidance is deemed to be “major,” they also will be required to submit them to Congress under the Congressional Review Act.

Congress then would have to decide whether to accept the rule. If Congress votes against it and the president signs the resolution, the agency is prohibited from issuing a similar rule.

NCUA officials, with the exception of Todd Harper, the new Democratic board member, have been reluctant to comment on the memo.

But former agency board members said the documents signify a major power play on the part of the Trump Administration.

“Undoubtedly it will undermine the independence of the regulatory agencies and could diminish their ability to respond expeditiously to situations Y18 REGULATIONS