March 2014
FOCUS is the monthly e-Newsletter of the Office of Small Credit Union Initiatives (OSCUI). It focuses on helping small credit unions achieve success by providing news and highlighting opportunities. Click here to subscribe to FOCUS.
topFeatured this Month (Click on a heading to go to the article.) 
Headliner: Agenda - 2014 CU Workshops 
In FOCUS with Bill: History of banking
HeadlinerAgenda - 2014 CU Workshops  
This year, OSCUI will conduct Credit Union Training Workshops in Gulf Port, Miss.; Honolulu; New York City; Pittsburgh and San Antonio. The workshops offer training for credit union officials and volunteers via OSCUI's traditional full-day, in-person format. This training is provided free of charge to credit unions. Visit the Training page on our website for logistical information and to register.


Click here to view the agenda for this year

2014 OSCUI Workshop Agenda.


To learn how our services can assist your credit union, email us at


[Back to top]

inFocusHistory of banking


Do the benefits of being a federally insured credit union more than outweigh the regulatory restrictions NCUA applies in an attempt to keep this cooperative structure intact? Two years ago, I transitioned my career from credit unions to credit union regulator and insurer. From this vantage, I'll share my perspective on NCUA's challenges around the systemic difficulties in providing effective, efficient supervision.


It is hard to maintain sustainable, independent financial institutions. Always and everywhere insurers and regulators struggle over this issue. There used to be state deposit insurers; only one survived into this century. Even one of the federal regulators, the Office of Thrift Supervision, and the whole class of financial institutions called savings & loan companies succumbed in the 1990s.


Those were not just modern adjustments. The United States has had a continual series of banking crises during its history. The First Bank of the United States closed by 1811, followed by The Panic of 1819.   The Second Bank of the United States closed in 1833, followed by The Panic of 1837. Until 1865, "free banking," i.e., minimally regulated banking, led to an average bank life of three years! This inspired the National Banking Acts of 1863 and 1864, followed by the Panic of 1873. The Panic of 1907 led to the Federal Reserve Act of 1913. The Great Depression generated a historic peak in bank failures in 1933 when 4,000 banks closed and their depositors lost their money. That round of failures led to the implementation of deposit insurance. Yet, banks continued to fail; in 1937 post-depression, the savings and loan crisis of the 1980s and 1990s, and recently, the financial crisis of 2007-2009.


Why is banking so problematic? All the wins and losses in the economy flow through the financial sector. There is great opportunity to participate in wins, but every loss has to be absorbed as well. Without finance, economic movement ceases.


Since the National Credit Union Share Insurance Fund was created in 1970, NCUA has striven to balance necessary regulations with sustainable levels of losses. Regulatory relief, exemptions, waivers and appeals are actively used to achieve this balance. The number of federal credit unions peaked at just fewer than 13,000; half of that number survive today. But members remain protected.


Now, back to the question of the day: Do the benefits of being a federally insured credit union outweigh the regulatory restrictions NCUA applies to this cooperative structure in an attempt to keep it intact? Conclusion, with apologies to Winston Churchill: NCUA is the worst form of regulation except all those other forms that have been tried from time to time. 


"In FOCUS With Bill" is a new addition to our e-newsletter.  In it, OSCUI Director Bill Myers will provide insights for small, low-income and new credit unions based on his role as Director and past experience in the credit union field. 


[Back to top]

2014 OSCUI Webinar Dates

April 16: Small Dollar Lending



May 21: OSCUI Grants



June 16: Budgeting - Tools to Fit Your Needs



July 9: Mobile Apps



August 20: Disaster Recovery



September 17: Merger Best Practices



October 15: Product Pricing



November 19: Building a Loan Portfolio



December 17: Internal Controls



Webinars begin at 2 p.m., Eastern.  For more information, click here.

Like us on Facebook    Follow us on Twitter    View our profile on LinkedIn   View our videos on YouTube 
Connect with us!
Quick Links

Make sure your CU files on time


This past January NCUA issued Letter to Credit Union's, Letter No. 14-CU-03, "Civil Money Penalties to be Assessed for Late Call Report and Profile Submissions in 2014". The letter stated that in order to
encourage on-time filers, NCUA would begin imposing civil money penalties on credit unions that file late Call Reports, beginning with the first-quarter 2014.  Make sure your credit union files on time!

ConsultingThe keys to the credit union
This month we launch an ongoing series of articles about key CU positions. We'll explain their general responsibilities, specific duties and how they interact with other key personnel.


Supervisory Committee Action Series

Part 1 of 4

This is the first in a series of articles to help small CU Supervisory Committees (SCs) conduct interim audit reviews. Interim audit reviews allow the SC to detect problems, errors and even fraud. To save money, the SCs of many small CUs perform these reviews directly rather than incur the expense of hiring an outside auditor. As a guide, the SC should establish an interim audit review plan and calendar schedule of the reviews it will conduct each month.


We hope you'll follow this series and perform the featured interim audit review each month. This month's feature is the Verification of New and Closed Accounts.


New and closed accounts must be verified periodically. New accounts are verified to ensure they are not fictitious, and closed accounts are verified to ensure the member initiated and is aware that his/her account has closed.  


Here is some general guidance on conducting these verifications:

  • Obtain new and closed account reports from the data processing system.
  • Verify new member approvals and closed accounts in the board minutes.
  • Send new members a welcome letter with their personal information and account balance and ask them to verify the information. The letter should also explain the role of the SC and introduce/cross-sell the credit union's products.  
  • Send a letter to each member who closed an account during the period asking them to verify that they closed their account. Also consider asking the member to provide feedback on their experience with the credit union.  
  • When corresponding with members, always use a return address independent of the CU's and request that the member responds directly to the SC, not to CU employees.  
  • For undeliverable mail, determine the reason the letter was returned and contact CU staff to determine if they have a current address.
  • Research and investigate all member responses and report findings to the member, if appropriate, and the board of directors.
  • Retain documentation to support the ongoing verification of new and closed accounts for examiners and outside auditors. The SC should maintain documentation of all letters sent and responses received. The SC member conducting the verification should also sign and date the work papers.

For more guidance on this and other responsibilities of the SC, refer to the Supervisory Committee Guide for Federal Credit Unions and the OSCUI Videos and Webinars page.


Next month, the series will address audit of the largest asset category for a credit union, loans.  The article will also address monthly bank reconciliation. Email us your Consulting questions to

GrantsandLoansRound 1 of 2014 grant awards!


We are pleased to fund projects for 127 low-income credit unions totaling $517,890. The number of requests far outweighed the amount of grant funds available; it was impossible to fund all of the worthwhile projects identified by the credit unions. We reviewed 319 applications with an aggregate request amount of more than $2.5 million before making the final selections.


Here are the grant initiative allocations:


 2014 Round 1 Grant Awards 

For questions about our Grants and Loans program, email us at


PartnershipsOutreachEducate your members during Money Smart Week

by William "Rich" Sills, NCUA Examiner-Region IV

April is a very busy month when it comes to financial matters. Normally, the first thing that people think of when it comes to money and April is taxes. However, there are also programs and resources available that can help your members develop their financial capability. You can help your membership by informing of them of these resources or by hosting events to promote the financial education.


Money Smart Week occurs in April. This year, it will be April 5 through 12. The Money Smart Advisory Council and the Federal Reserve Bank of Chicago started Money Smart Week in 2002. Since its inception, it has grown to include numerous events and expanded its partnerships throughout the nation. From the Money Smart Week website, your members can find information on local events. Alternatively, your credit union might use the website to learn about hosting an event for your members.


Helping to increase your members' financial capability will benefit your credit union too. For example, promoting individual savings can help boost your credit union's deposit base, and encouraging debt management may contribute to a well-performing loan portfolio. Plus, such efforts will show your members you are interested in their financial well-being. I encourage you to explore ways to share these resources with your members.

Is there an article you'd like us to consider for FOCUS? Email your suggestion to Partnerships & Outreach at


TrainingOFAC compliance for small CUs

by Staff of the OFAC-Sanctions, Compliance & Evaluation Division


Our webinar this month was "BSA-MSB Training - What You Need to Know." One of the topics it addressed was Office of Foreign Asset Control (OFAC) Requirements. The article below was written for credit union officials, particularly compliance officers, by OFAC in collaboration with OSCUI.


            "Hello. You've reached the Office of Foreign Assets Control, may I help you?"

            "Yes. I'm the BSA/AML/Compliance Officer at a Main Street Federal Credit Union. We just received notice that OFAC froze the funds of one of our members because of a possible violation of OFAC regulations. Our member is very angry and is threatening to terminate their relationship with us. How can we get this money back to our member so that we can process his payment now?"

            "It sounds like your corporate credit union froze or 'blocked' the funds due to a possible interest in the funds of a person subject to OFAC sanctions. We don't hold funds here at OFAC, but if we can discuss the details of the transaction, perhaps we can figure out what the sanctions issue is and the best way to resolve the matter. Can you tell me the payment details?"

            "Well, it looks like my member's business, Small Business U.S.A., was paying for widgets from Worldwide Foreign Company. Our member's business is located in our town, but the beneficiary, Worldwide Foreign Company, is located in Damascus, Syria."

            "Okay. It sounds like this may be a commercial transaction involving Syria. OFAC sanctions significantly restrict trade, including the provision of banking services, involving Syria. This doesn't explain everything, however, because transactions involving Syria generally would have simply required your corporate credit union to reject the transaction back to you. The fact that the funds were blocked or "frozen," rather than rejected, would appear to indicate that the Government of Syria or some other specifically sanctioned person was involved. Did they say anything else in their response?"


Does this situation sound familiar to you, or are you concerned that your credit union may end up in a situation like the one described above? OFAC stands for the Office of Foreign Assets Control within the U.S. Department of the Treasury. It administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals to protect against threats to our national security, foreign policy or economy.


OFAC may be better known by the dreaded "OFAC alert" when a financial transaction trips in the institution's filter due to a potential match to an OFAC-sanctioned country, individual or entity. Economic sanctions are powerful weapons in the fight to safeguard our security, but their success requires the active participation and support of every financial institution. Every transaction is technically subject to OFAC, even when it is unlikely to contain an OFAC issue. All individuals and entities within the U.S. and all U.S. incorporated entities and their foreign branches persons must comply with OFAC regulations. Foreign individuals and entities must also comply with OFAC sanctions under certain circumstances, including when they are routing transactions to or through the United States.


For more information and resources on this topic, click here to review the Partner Profile for OFAC on our website. To review the archive of the BSA-MSB webinar and all our webinars click here.  Webinars are posted three weeks after the live event. 


[Back to top] 

happeningHappening in OSCUI



OSCUI Director William Myers addressed several CUNA committees during the recent 2014 CUNA Governmental Affairs Conference, including the Exam and Supervision Subcommittee, FCU Subcommittee, Small CU Committee, and State Issues Subcommittee. He also gave a presentation at the National Federation of Community Development Credit Unions' CDFI Certified CU Roundtable.


OSCUI Training Manager Diane Rector presented an overview of OSCUI programs and services to NCUA field examiners. Economic Development Specialist Lauren Bethea provided an overview of OSCUI and NCUA's focus on financial literacy to the New Jersey Coalition for Financial Education; she also provided a briefing to staff of the Community Development Financial Institutions Fund on NCUA's process for evaluating credit union financial performance.


Recent Comments About Our Services

EDS Amanda Trueblood was great to work with.  It was a very positive experience for both me and the credit union.

NCUA Examiner Susan Graham, Region V


EDS Lynn Asker, thank you so much for your support.... Your experience with the matters that confront us was obvious and very much appreciated by the new Board members!

Board Member Frank Jamison, Community Promise FCU

OSCUI Detailees

This month, we welcome as details two field examiners who specialize in small credit unions as details to OSCUI. Both are from NCUA's Region IV office.


March 2014 DetaileeIsmael Vasquez is working with our Training team. He is based in San Antonio and has worked for NCUA almost three years. Prior to joining NCUA, he was an internal auditor for a loan company, a staff auditor for the U.S. Army Audit Agency, and served in the U.S. Army for almost five years as an Infantry Team Leader. Ismael offered this as the reason he requested a detail to OSCUI: "I have really enjoyed working in and helping small struggling credit unions. It is in the smaller credit unions that you can actually see your hard work and recommendations pay off. Additionally, I hope to gain knowledge that will help me better serve the credit unions within my district."


 LaMont Allison is working with our Partnerships & Outreach team. He is basedMarch 2014 Detailee in Fort Worth and has also been with NCUA almost three years. Prior to joining NCUA, he taught management, marketing and finance at Langston University. He was also an assistant store manager, a production controller for Tinker Air Force Base, and served in the U.S. Army for almost seven years. LaMont says he requested this detail because, "I have ten small credit unions in my district. Many of them are struggling to put loans on the books due to the economy, increased competition, declining membership, and the need for strategic planning and marketing. I believe that this opportunity will give me greater insight into how OSCUI can help small credit unions and I hope to gain knowledge of resources to help better serve these credit unions." 


[Back to top]

Grants and Loans

The Catalog of Domestic Federal Assistance: Has developed a two-part paper on Writing Grants. Part I outlines how to develop a grant proposal, and Part II guides readers through the writing process.


Partner Events

Prospective Grantee Webinar 1 - Planning an AFI Project: Will be held April 3, 2014, at 2:00 p.m. Eastern. The webinar introduces asset building, Individual Development Accounts (IDAs), and the AFI program. Click here to register.


Prospective Grantee Webinar 2 - Preparing an AFI Application: Will be held April 16, 2014, 2:00 p.m. Eastern. The webinar will explain the AFI funding announcement and grant application process. Attendees should have attended "Prospective Grantee Webinar 1: Planning an AFI Project" and have a basic understanding of AFI and IDAs. Click here to register.



Cornerstone Credit Union League 2014 Annual Meeting and Expo: Will be held April 21 -24, 2014, in San Antonio. You may register online or by phone at 800-442-5762 ext. 6630. Online registration closes April 16; on-site registration will be available at a higher rate.


2014 Children's Savings Conference: Will take place April 29-30 in Washington, DC. The conference will convene stakeholders from the fields of asset building, education and finance to explore recent innovations and discuss strategies and opportunities to expand access to and availability of children's savings programs. Click here for more information and to register.

Pamela L. Williams
LaMont Allison, Assistant Editor
The Office of Small Credit Union Initiatives
1775 Duke Street, Alexandria, VA 22314