APRIL 5, 2013
Facebook logo Twitter logo
Government Influence
Project Zip Code
Contact Your Legislator
State Legislative Update
State Legislative Grid
Federal Legislative Grid
 
Public Influence
Consider This®
CUs in the News
Maximize the Power of the Media
Paying ATTENTION®
Quarterly Member Benefits Index
Statewide News Coverage
 
Sine die It’s A Wrap! 2013 State Session Adjourns
The state Legislature finished up the first half of its 2013-14 session with a frenzy of amendments and bill passages in the final days.

 
     
  Regulatory Relief Blowing into D.C.
A U.S. House of Representatives Financial Services subcommittee hearing scheduled for April 10 is being called a study on "regulatory relief," leading to hope that credit unions' plea for such relief is being heard.

 
  BoA Settles with NCUA
Bank of America agreed to pay the National Credit Union Administration $165 million to settle a lawsuit over residential mortgage-backed securities that were sold to now-defunct corporate credit unions.

 
  State Tackling the Grizzly Bear of Tax Reform?
An article in Insider Advantage reported that some Republican legislators plan to push next year for replacing Georgia's income tax with an increase in the state sales tax, including a broadening of transactions subject to the tax.

 
  Auto Loans Are Biggest Opportunity
More than half of credit union respondents to a recent TransUnion survey said auto loans are their biggest opportunity for increasing revenue, citing rising auto sales and low deliquency rates on such loans.

 
  New Report on Overdraft – Consumers Use It, Income Is Up and Payday Lenders Drop Fee!
According to a recent study, overdrafts made a big comeback in 2012, with a fourth of those with consumer checking accounts identified as frequent overdrafters.

 
  Financial Trend: Mobile Banking Use Soaring
The Federal Reserve reported that mobile banking increased 33 percent from 2011 to 2012, with the most common activities being checking account balances, monitoring transactions and moving money between accounts.

 
  ABA Report: Delinquencies on Bank-Issued Credit Cards Drop
An American Bankers Association bulletin reported that the delinquency rate for bank-issued credit cards sank to 2.47 percent in the fourth quarter of 2012, the lowest rate since 1994.

 
  Cyber Attack!
The American Banker reported that JPMorgan Chase's website was having "intermittent issues" on April 1, three weeks after a denial of service attack that was one of several such attacks on major banks in March.

 
 
 
Sweeping upIt’s A Wrap! 2013 State Session Adjourns

The state legislative session adjourned as of midnight on Thursday, March 28th, bringing to a close a hectic yet successful session for credit unions. In all, more than 2,743 bills and resolutions were introduced during the first term of the two-year session and the Government Influence Team narrowed that list to 160 to be tracked. Most of those will continue to be monitored next year as we reach the second term of this session. There were issues up to the closing wire as the final three days of the session saw a long list of bills amended and passed at a frantic pace. The Senate and House grappled with media-hot topics such as ethics reform and the budget. And, while the media didn’t spend time writing about many financial services issues, the GCUA staff spent countless hours working to perfect bills to protect the way you serve your members. As the session quickly drew to a close, there were issues never heard in committee attached to moving bills, and last-minute changes upon last-minute changes to legislation requiring a watchful eye.

Below is a synopsis of the legislative issues addressed on behalf of credit unions as the bills traversed the final days of the session:

Bills that Passed in 2013

  • MVR TITLE/TAX PROCESS: Technical corrections to the overhaul of the title fee/tag process in Georgia that passed in 2012 originally contained in HB 80 by Rep. Tom Rice (R-Norcross), then amended into IRS tax code revision bill HB 266 passed the full legislature and the bill was signed into law on March 5th. Of interest to credit unions: The changes contained in the new law direct the use of the book value (as opposed to purchase value) for used motor vehicle title fees, and maintain the provision that exempts an entity from paying the title fee if the auto was acquired through repossession. Some flexibility was provided to county tax commissioners in HB 463 (which passed in the final hours of the session), also by Rep. Rice, which allows the tax offices the ability to deviate from the established fair market value of a used vehicle in the event the consumer appeals the amount.

  • CLOSING FEES: On the last day of the session, SB 139 by Sen. Butch Miller (R-Gainesville) passed the legislature without any negative amendments for credit unions. This bill only applies to businesses that fall under the Georgia Industrial Loan Act, and allows an additional $50 fee to cover credit verification. In earlier drafts, this bill would have the unintended consequence of making ANY closing fee be no more than $50, and/or negatively impact auto lending. Throughout the session, the Government Influence Team successfully worked with legislators to amend the language to ensure that current lending procedures are not inadvertently impacted by what the industrial loan industry is seeking. It now awaits the Governor’s signature to become law.

    Jacobs
    State Rep. Mike Jacobs
  • BANKRUPTCY EXEMPTIONS: On the last day of the session the anticipated small increase to bankruptcy exemptions for motor vehicles passed without any negative amendments. Credit unions may recall that HB 531 by Rep. Mike Jacobs (R-Brookhaven) seeks to increase the bankruptcy exemption for motor vehicles from $3,500 to $5,000, and as a result of our discussions, Rep. Jacobs committed to refrain from additional changes in the next session, or a change to the wild-card exemption (which would have been burdensome). This bill was amended onto SB 105 by Sen. Hardie Davis (D-Augusta) which seeks to protect charities that unknowingly receive donations that may be fraudulent. The Government Influence Team also successfully worked to prevent an attempt by others to attach additional language from HB 82 by Rep. Earl Ehrhart (R-Powder Springs) to SB 105 (see below in issues for 2014 for HB 82). This co-opted language from HB 82 would have inadvertently removed credit unions from the provision denoting the ability to receive payment from a successor creditor. This HB 82 issue was defeated; and the bill passed the full Legislature without this negative amendment.

  • PROPERTY REGISTRY/FEES: HB 160 by Rep. Mike Jacobs (R-Brookhaven) was of keen interest all session as it opened the financial institution code of law (and as such, a prime target for unwanted amendments that could negatively impact operations of credit unions). This bill amends the state’s foreclosure registry standard for language consistency and bans recurring recording fees that run indefinitely with the land (recurring fees paid every time ownership changes). This bill was a potential vehicle for negative foreclosure amendments and/or property association attempts to supersede lien priority, and while the parties lobbying for these changes worked up until the final day, it passed without these onerous amendments and now awaits the Governor’s signature to become law.

  • LIENS: HB 434 by Rep. Tom Weldon (R-Ringgold) seeks to codify case law regarding materialmen's liens. This bill was prompted due to an outlier court case where a lien was limited solely to the physical improvement to the real property, and did not include the “soft costs” as is typical in materialmen's lien case law. The Government Influence Team worked closely with the lobbyists pursuing this bill, and it passed the Legislature in the last day without any undesired attempts on lien statues.

  • UNIFORMITY IN REGULATIONS: SB 185 by Sen. Jesse Stone (R-Waynesboro) is the byproduct of the State Bar Uniform Commercial Code Committee to bring Georgia law on par with other states. The legislation would clarify the transactions between creditors and debtors, and will be beneficial to credit unions and other financial institutions – especially those that lend in multiple states – as it would bring consistency.

    Jones
    State Sen. Emanuel Jones
  • SERVICE PROCESS: SB 113 by Sen. Emanuel Jones (D-Decatur) seeks to limit how businesses are served notice, and to prevent summonses or garnishments from falling through the cracks by requiring they be served to a person with supervisory authority (as opposed to whomever is at the front door). With so many garnishment notices served at financial institutions, this change will be positive in helping credit unions mitigate unwanted “non-response” issues to notices.

  • SHORT SALES: HB 83 by Rep. David Knight (R-Griffin) corrects a current regulatory opinion stating if a real estate agent is involved in a short sale, the agent is guilty of a felony. When signed into law, it will reverse the regulatory language and allow the practice (that many real estate agents engage in presently) to be permissible. The bill opened the section of law applying to financial institutions, but passed without any negative amendments on operational procedures, foreclosure practices, lending capabilities, etc.

  • EFTS: HB 289 by Rep. Trey Kelly (R-Cedartown) will clarify state law governing electronic fund transfers to be in compliance with federal provisions as a part of the Dodd-Frank Act. It now awaits the Governor’s signature to become law.

    Jones
    State Rep. Dustin Hightower
  • PROPERTY COVENANTS: HB 175 by Rep. Dustin Hightower (R-Carrollton) seeks to codify case law regarding property covenants, and was on the radar as it opens up possibilities for various property association interests who have continually sought to supersede the priority lien status of financial institutions. There were several late-breaking amendment attempts in the final days of the session, however none would have impacted credit unions.

  • CONTRACTS: HB 234 by Rep. Lynn Smith (R-Newnan) will require additional notice provisions in automatic renewals in contracts. However the bill, as passed, exempted financial institutions and their subsidiaries from this additional regulation. This exemption was monitored throughout the process to prevent additional compliance burdens on the credit union industry. The bill maintained the exemption language and has been sent to the Governor for his consideration to sign into law.

  • TAX EXPENDITURE REVIEW: HB 454 by Rep. Chuck Martin (R-Alpharetta) will require a review of all tax expenditures by the state. This bill was monitored throughout the process to ensure that no credit union taxation issues arose. It now awaits the Governor’s signature to become law.

  • CONDO ASSOCIATION: HB 458 by Rep. Alex Atwood (R-Brunswick) was monitored throughout the process to prevent any unwanted amendments by condo/homeowner association interests who seek to supersede the financial institution’s priority lien status to force foreclosing parties to pay back fees/fines. This bill, which increases the insurance deductibles held with condos, passed “clean” without these negative amendments, after being watched closely.

  • IGNITION INTERLOCK: HB 407 by Rep. Alan Powell (R-Hartwell) was monitored as it opened up the section of law pertaining to ignition interlock devices. This bill passed without any amendments that would have been negative to credit unions’ “CU Fresh Start” or second chance auto lending programs that utilize such devices, and now awaits the Governor’s signature to become law.

The above bills that passed now move to the Governor’s desk to be considered for law, and all other bills are still eligible in the 2014 Session (along with all the issues to be introduced in that year!). Below are some of the issues that carry forward into 2014:

Jones
State Rep. Billy Mitchell

Issues That Carry Over into 2014

LENDING AND/OR FORECLOSURE PROCEDURES

  • HR 75 by Rep. Dar’Shun Kendrick (D-Lithonia) seeks to institute a study committee to review and suggest changes in the entire foreclosure process, and is a precursor to attempts to shift Georgia to a judicial foreclosure state. There was no vote taken at the hearing on this legislation; however, this is an issue that is monitored closely.

  • HB 47 by Rep. Billy Mitchell (D-Stone Mountain) would allow a debtor to “cure” a foreclosure by making all past-due payments, late fees and charges up to five calendar days prior the sale of the property. This bill generated questions in the halls of the Capitol from other legislators, and was monitored closely, as this topic has been a “vehicle” for attempts to increase the foreclosure notice period.

  • HB 49 by Rep. Billy Mitchell (D-Stone Mountain) sought the licensing of foreclosure rescue companies to prevent fraudulent players in the marketplace. The current draft of the bill exempts financial institutions and subsidiaries.

  • SB 108 by Sen. Lester Jackson (D-Savannah) would overhaul the current foreclosure process (notice provisions, timing and creates penalties).

  •  HB 82 by Rep. Earl Ehrhart (R-Powder Springs) would require a successor creditor to provide notice to a guarantor to allow the guarantor 90 days to purchase the debt obligation. The bill states it only applies to a successor creditor who is not a depository institution, or an affiliate that is federally insured. This bill seeks to rein in negative practices by some management companies in the marketplace who buy up large distressed-asset pools of foreclosed properties with the intent of only going after the debtors. From a credit union perspective, this issue is one to be monitored to ensure access to the secondary market (and in late-breaking amendment attempts, changes to credit union payment provisions (see above SB 105 in passed legislation).

    Stone and Davis
    State Sens. Hardie Davis (l) and Jesse Stone (r)
  • There were multiple attempts to regulate deficiency judgments: SB 126 by Sen. Jesse Stone (R-Waynesboro) states that if an entity obtains a deficiency judgment before foreclosure, a person can file a complaint within 30 days to determine the fair market value of the property. If the court determines the property has been sold for less than fair market value, the foreclosure sale could be set aside or the balance on the deficiency judgment could be adjusted for the difference. SB 106 by Sen. Curt Thompson (D-Tucker) is similar legislation, and there are also similar provisions in HB 344 from Rep. Matt Ramsey (R-Peachtree City). This issue is one to watch as the Government Influence Team worked closely with legislators on the above to ensure access to the secondary market is protected and flexible options (whether in foreclosure or deficiency judgments) are maintained.

SUPERSEDING LIEN PRIORITY

  • SB 56 by Sen. Jesse Stone (R-Waynesboro) seeks to provide homeowner/condo associations the ability to force foreclosing parties to pay up to six months of unpaid assessment fees. In a positive move, during the session Sen. Stone shared with the interested parties he does not intend to push this issue any further. However, this property association issue was one to watch closely up to the last hour of the session as the lobbyists for HOAs continued their efforts to supersede the priority lien status of financial institutions.

  • HB 464 by Rep. Brian Strickland (R-McDonough) was a vehicle for the above property association issue, and would also mandate that the foreclosing party adhere to any property covenants (seeks to address where homes of different size or style are built in uncompleted subdivisions). Rep. Strickland was receptive to the credit union position and did not work to move the bill forward in 2013.

  • HB 159 and HB 595 by Rep. Brett Harrell (R-Snellville) are actually seeking the reverse, as they seek to limit property tax bills from including extraneous fees (and as such, superseding lien priority). The intent of these bills was to strip away additional fees from property taxes in the event the home is to be foreclosed upon in a tax sale.

  • HB 69 by Rep. Tommie Benton (R-Jefferson) seeks to alter the tax lien process on real property, and would require the purchaser to pay all unpaid property association fees.

  • SB 269 by Sen. Lindsey Tippens (R-Marietta) seeks to make materialmen’s liens priority regardless of other loans or foreclosures. This bill could impact lending procedures, including business lending (if your loan portfolio includes commercial construction projects).

  • HR 757 by Rep. Pat Gardner (D-Atlanta) and SR 595 by Sen. Nan Orrock (D-Atlanta) are resolutions that urge the Department of Community Affairs to adopt several foreclosure provisions referenced in the HomeSafe Georgia program, which includes increasing bankruptcy exemptions and foreclosure prevention measures.


Jones
State Rep. Andy Welch
PAYMENT CARDS
  • HB 138 by Rep. Andy Welch (R-McDonough) seeks to limit what can be purchased with state-issued EBT cards (prohibiting purchase of alcohol, tobacco and tattoos, and gift cards).

  • HB 181 by Rep. Kevin Cooke (R-Carrollton) seeks to prohibit Georgia-based ATMs from accepting electronic benefit transfer cards (EBTs) for public assistance purposes to be used to obtain cash.

  • SB 163 by Sen. William Ligon (R-Brunswick) was amended in the final days of the session to contain pieces of the above two bills on EBT limitations, and would have limited EBT access at ATMS and prevented some purchases (such as gift cards).

  • HB 307 by Rep. Allen Peake (R-Macon) seeks to provide businesses that offer private-label credit cards a tax credit on a portion of the bad debt.

OPERATIONS

  • HB 465 by Rep. Chuck Martin (R-Alpharetta) seeks to allow debt-settlement companies to operate in Georgia. While it did not garner enough votes in a hearing, Rep. Martin shared with the Government Influence Team if he considers this language in 2014 that he will exempt financial institutions (and affiliates, subsidiaries and CUSOs) from the provisions of additional regulation.

  • SB 118 by Sen. Judson Hill (R-Marietta) seeks to provide an avenue for electronic verification of auto insurance, and financial institutions are among the entities permitted access (for a possible fee). Sen. Hill has committed if he considers it in 2014 he will expand the definition to afford affiliates and subsidiaries of financial institutions the same access.

In addition to the above bills still pending for 2014, there are also a large number of bills that would open up the section of code on taxation. While no one has come out to hurt credit unions by eliminating the not-for-profit tax status, these issues are always monitored (see below related article). And, in 2014 there will be just as many bills introduced if not more so – all of which will need to be reviewed to protect our industry and the members you serve. To learn more about the above bills and others that are monitored on behalf of credit unions, please access the Georgia credit union legislative tracking site and to follow key activity as it happens on Twitter @GCUAGov.

Back to top

BlowingRegulatory Relief Blowing into D.C.

Don’t get blown away, but when legislators return to D.C. next week, one of the opportunities being afforded credit unions is the House Financial Services subcommittee hearing scheduled for April 10th – the good news is the hearing is being billed as a study into "regulatory relief" and not of "regulatory burden”!

During the last Congress, CUNA testified at 12 regulatory burden hearings and testified at zero regulatory relief hearings. The thought is this is a signal (lawmakers) have heard the pleas of credit unions and other community-based financial institutions and are preparing to put a solution on the table. CUNA has a comprehensive package of regulatory relief proposals it has been sharing on Capitol Hill as regulatory relief talks grow.
 
Pamela Stephens, president/CEO of $52-million asset, community-chartered Security One FCU in Arlington, Texas, will urge lawmakers to allow credit unions to have supplemental sources of capital beyond retained earnings, and to increase the cap on credit union member business lending. Stephens will recommend other statutory changes to:

  • address other means to help credit union meet the needs of their small business members;
  • improve restrictive Federal Credit Union Act provisions;
  • improve other provisions of law affecting credit unions (like Regulation D); and more.

CUNA also will propose a series of studies, such as a comprehensive look at the credit union examination appeals process. In addition, even our own members of Congress are asking about measures they can address in the form of regulatory relief for small businesses. Rep. Doug Collins recently reached out to businesses in his district asking them to share examples of onerous and burdensome federal regulations preventing businesses from growing, or are just plain ridiculous.

Back to top

Bank of AmericaBoA Settles with NCUA

The total amount of funds recovered from NCUA securities lawsuits now totals more than $335 million after Bank of America and certain subsidiaries agreed to settle with the agency. Bank of America has agreed to pay $165 million to the NCUA under the terms of the settlement announced on April 2nd. The agency has also settled with Citigroup, Deutsche Bank Securities, and HSBC, avoiding the cost of litigation and bringing in more than $170 million in funds that were lost due to the corporate credit union investments.

Bank of America is one of several Wall Street firms the NCUA has pursued legal action against, alleging violations of federal and state securities laws when they sold billions in residential mortgage-backed securities that later failed to now-defunct corporate credit unions. Bank of America did not admit fault under the terms of the settlement. "As a result of the Bank of America settlement, NCUA has now successfully recovered more than a third of a billion dollars on behalf of credit unions," NCUA Board Chairman Debbie Matz said in a release. "These settlements and our ongoing lawsuits further NCUA's goal of minimizing the losses of the corporate crisis and cutting future costs to credit unions."

Funds recovered through these legal actions will be used to help reduce the amount of future corporate stabilization assessments on credit unions, according to the NCUA. Matz said the NCUA has "a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected.” The NCUA "will continue to expend every possible effort to fulfill that important responsibility," she added.

Back to top

State Tackling the Grizzly Bear of Tax Reform?

BearA March 28th article in Insider Advantage reported a handful of junior Republican legislators announced at the end of the 2013 state legislative session that in 2014 they will push legislation to replace the state's income tax with an increase in the sales tax, including a broadening in the transactions subject to the tax. They said taxing groceries could become part of their strategy, but the specifics, such as how high the sales tax would rise, would all be determined between now and when the General Assembly convenes again in January.

Credit union leaders will recall this is not the first time Georgia has broached this subject. Other Georgia legislators have tried to get rid of the income tax, all arguing it would attract more employers. But none have figured out a political way to make the transition without some Georgians getting stuck with higher taxes. Alan Essig, executive director of the think tank Georgia Budget & Policy Foundation, says the transition could be jarring for individuals and the economy. "To match today's revenues, the sales tax would rise to more than 11 percent and combine with the local sales levy to exceed 15 percent in some counties," he said. "Georgia would have the highest sales tax in the region, and the state's economy would suffer because of it."
Back to top

Car lotAuto Loans Are Biggest Opportunity

Loan growth, with auto loans likely being the most promising area, is the critical business issue facing the credit union industry in 2013, roughly two-thirds of credit union executives told TransUnion in a new survey. More than half of credit union respondents said auto loans are their biggest opportunity. TransUnion administered the survey to 104 credit union executives at the CUNA Governmental Affairs Conference in Washington, D.C. in late February. Nearly all respondents from across the U.S. were board members, executives or in managerial roles for their credit union.

"Many credit unions are finding that auto loans provide a great revenue opportunity as delinquencies continue to stay near historic lows," said David Dodson, credit union vice president in TransUnion's financial services business unit. "TransUnion projects auto loan delinquencies to continue to remain low with balances rising for the remainder of the year, pointing to more new- and used-auto sales."

TransUnion's latest auto loan Trend Data report found that 60-day auto-loan delinquencies stand at 0.41 percent as of fourth quarter 2012, and will likely remain around 0.4 percent at the end of 2013. Bank auto-debt-per-borrower has risen for seven consecutive quarters and is expected to rise from $13,747 in fourth quarter 2012 to above $14,000 by the end of 2013. Some credit union executives surveyed said their best opportunities for loan growth are with mortgage (18 percent) and small business (13 percent) loans, an indication the housing market may be improving, the company said. TransUnion data also supports this. It expects 60-day mortgage-loan delinquencies to experience a double-digit percentage drop in 2013.

Regarding those small-business loans, credit unions want to do more to help people start or grow their small businesses. While most credit union respondents (68 percent) said loan growth was the biggest critical issue they were facing this year, 11 percent indicated regulation was their main concern. Technology/operation efficiencies (7 percent) and membership growth (6 percent) also were cited as major issues this year. The biggest challenges to meeting loan-growth goals are competition from large banks and captive finance companies (40 percent), regulation (27 percent) and a lack of prospects (17 percent), said credit union respondents.

Back to top

UmbrellaNew Report on Overdraft – Consumers Use It, Income Is Up and Payday Lenders Drop Fee!

Fueled by increases in consumer demand and competitive market prices, overdrafts made a strong comeback in 2012, according to the latest study on overdrafts released on March 25th by Moebs Services. The report stated more than one-fourth of people with a consumer checking account – about  38 million people – are frequent overdrafts users. Some credit unions provide overdraft protection as a service to their members and charge less for the service than banks. The survey, by Lake Bluff, IL-based Moebs Services, a financial research firm, found fees for services were lower at credit unions than at banks. The average charge for an overdrawn account of $40 was $30 at banks, but $27 at credit unions. When depository size is taken into account, "the difference can be significant," said Michael Moebs, author of the study.

The new report also shows overdraft revenue at banks, credit unions and thrift institutions totaled $32 billion last year, an increase of $400 million, or 1.3 percent, from 2011. But that was less than in 2008, when revenue from overdrafts totaled $35.4 billion, or in 2009, when it was $37.1 billion. Frequent overdraft users are divided into about 20 million consumers who use payday lenders and 18 million who use credit unions and banks. Payday lenders have dropped their overdraft fees, due to competition, said Moebs.
Back to top

Mobile bankingFinancial Trend: Mobile Banking Use Soaring

Customer use of mobile banking increased 33 percent between 2011 and 2012, according to a Federal Reserve study released March 27th. The study, based on results of a November 2012 consumer survey, found:

  • 28 percent of all mobile phone users and 48 percent of smartphone users had used mobile banking in the previous 12 months, up from 21 percent in December 2011 for mobile phone users and 42 percent for smartphone users.
  • Six percent of smartphone owners also reported using their phones to make payments at the point of sale, a threefold increase from 2011.
The most common mobile banking activities continue to be reviewing account balances, monitoring recent transactions, or transferring money between accounts. Twenty-one percent of mobile banking users also reported using their phones to deposit checks. Read more.
Back to top

ABA Report: Delinquencies on Bank-Issued Credit Cards Drop

Delinquencies on bank-issued credit cards sank to 2.47 percent in the fourth quarter ─ the lowest level since 1994, according to an American Bankers Association Consumer Credit Delinquency Bulletin released on April 2nd, 2013. The percentage of credit card accounts 30 days or more overdue during the quarter was roughly half the record high of 5.01 percent set in 2009 and well below the 15-year average of 3.87 percent. It was also down significantly from the previous quarter, when 2.75 percent of credit card customers were delinquent on payments.

CardsIn fact, bank-card delinquencies fell throughout 2012, which ABA chief economist James Chessen said is a sign consumers are trying to rein in debt. "Consumers continue to carefully manage their finances in an effort to get debt levels under control and build up a secure financial base," he said in a statement. In addition, banks are making sure customers have the capacity to repay debts, which is making the institutions more conservative about approving people for credit cards.

Delinquencies in all three home-related categories – home equity loans, home equity lines of credit and property improvement loans – also fell during the fourth quarter. The declines are yet another sign of the burgeoning housing market recovery, Chessen said. Late payments on auto loans arranged through third parties, such as car dealers, also dropped in the fourth quarter to 1.85 percent, down from 2.08 percent the previous quarter, according to the bulletin. While credit card delinquencies are dropping, some Americans are falling behind on other loan payments. Delinquencies on mobile home and boat loans increased slightly at the end of 2012, according to the ABA.

With economic uncertainty lingering, Chessen said he expected consumers would continue to tighten their personal finances, although financial challenges could cut into their ability to meet obligations.

"Furloughs from sequestration, falling disposable income and increased healthcare and regulatory costs for businesses could lead to challenges in the year ahead," he said.

Back to top

Cyber crimeCyber Attack!

The American Banker reported on April 1st that JPMorgan Chase's website has stumbled again, roughly three weeks after a cyber attack. The nation's largest bank by assets shared with its customers on April 1st that its website was "experiencing intermittent issues" and recommended customers use its mobile service while the company worked "to get things up to full speed."

On March 12th, JPMorgan Chase confirmed its website had endured a denial of service attack, a type of electronic assault in which a website receives a fusillade of messages possibly rendering it inoperable.

Monday's outage is not believed to have resulted from a denial of service attack, according to the source. The interruption at JPMorgan Chase follows a renewed wave of denial of service attacks on the nation's financial institutions. And Chase is not alone: On March 28th, American Express was hit by a cyber attack that left some customers unable to access their accounts. Both Wells Fargo, the nation's fourth-largest bank by assets, and TD Bank suffered similar attacks in the past two weeks as well.

Need to analyze your IT systems to assess existing and/or potential security risks facing your credit union? Click here to learn more about internal and external vulnerability assessment options.

Back to top