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Weekly Recap – Branch use by millennials a hot topic at Think 16

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Weekly Recap – Branch use by millennials a hot topic at Think 16

The weekly recap featuresnews on regulatory actions, mergers and other issues facing the credit unionspace. Send tips, ideas and chatter to kenneth.mccarthy@spglobal.com.

News

*Golden 1 Credit UnionPresident and CEO Donna Bland said the Sacramento, Calif.-based credit unioncurrently has no plans to seek approval to add branches in San Diego, which is one of the few majormarkets in California where Golden 1 does not have a branch. In an interviewduring the CO-OP Financial Services Think 16 event last week in Coronado,Calif., Bland spoke about the credit union's plans for growth, how it will dealwith crossing the $10 billion in assets mark and the outlook for auto lending.

*Also during the CO-OP Think event, some credit unions said that while it istrue that millennials are demanding a shift away from brick-and-mortar branches and towardmore digital channels, that may not tell the whole story. Salt Lake City-basedDeseret First Federal CreditUnion President and CEO Shane London said the credit union recentlyopened a small branch near Brigham Young University. He said he has been amazedhow many millennials have visited the branch to conduct transactions.

*Raleigh, N.C.-based StateEmployees' Credit Union announced that James Blaine is . Blaine, who has beenCEO since 1979, will step down once the credit union's board selects hisreplacement. Cynthia Jolly, chair of State Employees' board, said in a May 2press release that the credit union has a succession plan and anticipates thatthe search for a new chief executive will be finished before the end of thefirst quarter of 2017.

*Abilene, Texas-based FirstAbilene Federal Credit Union named Troy Kyle , according to anannouncement posted on its website. Kyle succeeds Faye Smith, who March 31.

*Shell Community Federal Credit Union changed its name to Midwest Members Federal Credit Union, according to theFederal Reserve's National Information Center and the Wood River, Ill.-basedentity's website. The rebranding took effect May 2.

*Clinton Township, Mich.-based FreeStar Financial Credit Union disclosed in its 2015annual report the state's approval of the bylaw change to its field of membership to 10counties in southeast Michigan, which are: Genesee, Lapeer, Saint Clair,Livingston, Oakland, Macomb, Washtenaw, Wayne, Lenawee and Monroe, as well asmilitary in the state.

*San Antonio-based SecurityService Federal Credit Union formed Security Service Insurance, afull-service unit providing insurance products to members and the general public.According to a news release, the credit union subsidiary is offering propertyand casualty insurance products for homes, renters, automobiles, motorcycles,boats and ATVs. The insurance unit will also offer the service in Colorado andUtah, not just in Texas.

Regulation/legislation

*President Barack Obama namedNCUA Vice Chairman Rick Metsger chairman of the agency's board, succeedingDebbie Matz, whose tenure ended April 30. Metsger then Michael Radway to be his chiefof staff.

*The Financial Accounting Standards Board voted to delay implementation of its controversialimpairment proposal — a move some observers say will bring welcome relief tosmall banks and credit unions. Smaller institutions have long complained thatthe current expected credit loss model, also called CECL, is an accountingsolution aimed at problems presented by the balance sheets of largeinstitutions and would require costly, sophisticated systems to runcalculations that they believe are unnecessary.

*The Consumer Financial Protection Bureau May 5 outlining asignificant change to the arbitration process for credit unions and otherfinancial institutions and businesses. The Credit Union National Associationresponded by sayingthat while it continues to review the proposal, it is inappropriate for creditunions because they are member-owned, not-for-profit financial cooperativeswith different dispute resolution incentives compared with for-profitinstitutions. "Credit unions are owned by their members, and, asnot-for-profit financial cooperatives, have incentive to and a long history ofprioritizing the needs of their members," said Ryan Donovan, CUNA's chiefadvocacy officer. "As a result, credit unions face different disputeresolution dynamics, and we believe the CFPB should take these differences intoaccount by exempting credit unions when it releases its final rule."

M&A

*Hoover, Ala.-based Avadian CreditUnion completed its acquisition of American Bank of Huntsville, a unit of , on April 30. Withthe assumption of the Huntsville, Ala.-based bank, Avadian now has assets of$747 million and has more than 73,000 members.

*Plainfield, Ill.-based Oak TrustCredit Union is merging with and into Warrenville, Ill.-based . Theproposed merger has obtained the approval of Oak Trust CU members, andpreliminary regulatory approval from the NCUA and the Illinois Department ofFinancial and Professional Regulation, according to a news release. Operationalintegration is expected to be completed by June 30, and the combinedorganization will operate under the NorthStar name.

*The board of Keene, N.H.-based Cheshire Health Federal Credit Union has the credit union'smerger into Portsmouth, N.H.-based Service Credit Union, Seacoastonline.com reported May 2.The merger is subject to the approvals of Cheshire Health FCU's members, theNCUA and the New Hampshire Banking Department, according to the report.

*Miami-based Ryder System FederalCredit Union will merge into Pembroke Pines, Fla.-based , accordingto a news release. The merger is expected to be completed in the fall, subjectto regulatory approval and the approval of Ryder System Federal Credit Union'smembers. When the merger is completed, Allan Prindle will remain president andCEO of the combined entity. Kenneth Glenn, president, CEO and treasurer ofRyder System Federal Credit Union, plans to retire. Gene Sevilla-Sacasa,chairman of Ryder System Federal Credit Union and vice president ofinternational supply chain solutions at Ryder System Inc., will become adirector of Power Financial Credit Union.

*Covina, Calif.-based San GabrielValley Postal Credit Union has merged into Anaheim, Calif.-based ,according to a May 3 press release posted on CUInsight.com. Retaining the CUSoCal name, the combined institution has 80,000 members, 18 branches, and morethan $1 billion in assets. It continues to be led by CU SoCal President and CEODavid Gunderson. The former San Gabriel Valley Postal CU location in Covinawill still be open for six months.