The weekly recap features news on regulatory actions, mergers and other issues facing the credit union space. Send tips, ideas and chatter to ken.mccarthy@spglobal.com.
In the spotlight
Responding to member demand, Riverside, Calif.-based Altura CU recently released mobile, online and bill pay upgrades to its digital banking platforms.
Altura members use mobile and online banking 10 times more often than its branches, so it made sense to devote resources to the upgrades, said Sevan Yakinian, vice president of member services. Yakinian, who led the conversion team, said he expects those services — particularly mobile banking — to continue to grow.
Yakinian said more than 70% of Altura's digital banking members are mobile users.
"The previous systems were from two different vendors," he said. "The app needed more security and functionality, and there was little consistency between the platforms. The mobile app look was dated and clunky to use. Plus, members told us we were behind the times."
The moves were not only about upgrading existing services, but also laying the groundwork for what the credit union can offer going forward.
"We want this to be dynamic and to keep pace with member expectations," Yakinian said.
So far member response has been positive. Altura has seen its user base grow 15% since the launch of the new mobile app in October. Total logins have also grown, with the average Altura member logging in 25 times a month, up from 18 in the past. Yakinian said the app is getting high marks in the Apple and Android markets, with 4.8 and 4.6 out of five stars, respectively. Before the upgrade, the app scored only 2.5 stars.
In other news
* A spate of mergers among larger U.S. credit unions suggests that the operating environment remains challenging — and that could be bad news for the smallest institutions. Industry consolidation has traditionally occurred among credit unions with assets of $50 million or less, according to the National Credit Union Association, or NCUA, annual report for 2017. But the regulator pointed to an increasing number of larger credit unions using M&A to grow and increase market share. A recent case in point: Vibe CU, which has more than half a billion dollars in assets, and Oakland County CU, which had $351.2 million at the end of 2017, agreed to merge.
* Commercial lending is expensive to manage, and it is difficult for small institutions to generate a large enough portfolio to make it worthwhile. But that is not deterring Stamford FCU. The credit union has $60.4 million in assets, 12 employees and a lone branch on the sixth floor of the Stamford Government Center. The Stamford, Conn.-based credit union recently hired Stephen Tedesco as vice president of commercial lending and business development to build a member business lending program.
* Community bankers increasingly have to fend off credit unions when chasing commercial loans, a crucial source of earning assets for the industry. Bankers at the D.A. Davidson Financial Institutions Conference said credit unions are more aggressively pursuing loans to businesses and commercial real estate credits, making an already competitive landscape tougher for small banks. "They have a lot of capital and they don't pay taxes, so we've seen tremendous competition from credit unions," said Kevin Reevey, a bank analyst for D.A. Davidson.
* The Washington Post last week reported that NCUA Chairman J. Mark McWatters has been leading the agency primarily from his home in Dallas. According to the report, NCUA spokesman John Fairbanks confirmed that McWatters telecommutes but declined to say how often he travels to the agency's headquarters in Alexandria, Va., where more than 400 of the agency's 1,200 employees are based. Government watchdog groups could not recall another agency chief routinely working so far from his office, the report said.
* The NCUA board will meet May 24, and among the items on the agenda is a notice of proposed rulemaking regarding payday alternative loans. The proposal would not be a replacement for the current rule but an alternative, according to the National Association of Federally-Insured Credit Unions. Specifically, this proposal would differ from the current rule by modifying the minimum and maximum amount of the loans, eliminating the minimum membership requirement and increasing the maximum maturity for those loans.