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Credit Union Times

OCTOBER 9, 2019 | VOL. 30 | NO. 34 | CUTIMES.COM

FOCUSREPORT:

CUSOS

Of the many functions CUSOs serve in the industry, one is to help CUs become the go-to financial services providers in a particular niche of business. In this Focus Report, learn how one CUSO partnership has enabled CUs to shine in the area of mortgage lending. Y6

Machine Learning

Earn buy-in from the right people. Y12

Tech Pilots

Learn the benefits of joining one. Y10

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;

HUMAN RESOURCES

Navigating AI in HR

As more employers are exploring he use of artificial intelligenc in human resources activities uch as hiring, retireme t planning and benefits enrollment, it’s essential to establish processes and reviews to ensure compliance and prevent legal issues.

By embracing AI, specifically for predictive analytics, HR departments can make more informed recruiting and performance decisions. Employers can use data to find and screen em ployees with relevant skill sets. It can also increase productivity by evaluating new methods of workflow. These capabilities can extend into benefits by helping employees make informed and logical decisions tied to their individual interests, such as wellness, medical, prescription and retirement.

The use of AI to perform HR functions is still in the early stages. A KPMG report found that only 36% of the 1,200 HR executives int rviewed have started to introduce AI and feel they are have the necessary skills and resources to make use of it.

A 2018 LinkedIn study, “The Rise of HR Analytics,” found that only 22% of firms said they had adopted analytics in human resources.

A January 2019 article in Stan-
ford Business included widel
cited comments by Adina Ster-
ng, an assistant professor of
organizational behavior at Sta
ford Graduate School of Y16

Division Arises Over Payday Proposal DAVID BAUMANN dbaumann@cutimes.com

he NCUA’s new Payday Alternative Loan II model did little to quell the battle over whether the program provides borrowers with an attractive alternative to predatory storefront payday lenders.

For Republicans on the NCUA board, the new option will provide borrowers with a loan that will not lock them into a cycle of debt if they need a small-dollar loan.

“The PAL II rule is a free-mar-
ket solution that responds to the
need for small-dollar lending in
the marketplace,”
NCUA Chairman
Rodney E. Hood
said at the Septem-
ber board meeting,
during which the
new loan option
was adopted. “This
can make a differ-
ence by helping
borrowers build or repair credit
records, allowing them to gradu-
ate to other mainstream financial
products.”
If that was the NCUA board’s
goal, the loan option does not do
the trick, according to the Dem-
ocratic board member, Y18
LENDING REGULATIONS

Hood
Koller
ark Koller lived his
dream of open-
ing and operating
a credit union to
serve people of modest means in
the heartland state of Nebraska.

But his dream lasted for only
two years, closing shop for the last
time as Community HOPE Fed-
eral Credit Union in Lincoln on
Monday, Sept. 30, when it merged
into the $992 mil-
lion Cobalt Credit
Union. Though the
credit union is the
largest by assets in
Nebraska, where
it operates 26
branches, Cobalt
has a state charter
in Iowa, where it operates four
branches.

In a recent interview with CU
Times, the founding CEO of Com-
munity HOPE reflected on the
valuable lessons learned from his
executive experience, which Koller
said he doesn’t view as a failure.
“I think the local paper tried to
paint it that way, but I’ll be honest
with you, this wasn’t a failure,” he
said. “It was just one of those is-
sues where it made more sense to
align ourselves with a bigger part-
ner, Cobalt CU. They’ve got a wide
array of services and products
that are going to really enhance
our member relationships. Cobalt
has a common mission that
Lessons From a Short-Lived CU Dream