January–February 2022 ALSO INSIDE An Election Year May Mean Less Lawmaking, More Regulating NAFCU 2022 Vendor Directory NAFCU 2022 Advocacy Priorities 2022 ECONOMIC OUTLOOK Challenges Remain in First Half of Year, But Recession Not Likely
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3 THE NAFCU JOURNAL January–February 2022 January–February 2022 • VOLUME 47, NUMBER 1 The NAFCU Journal (ISSN 1043-7789) is published bimonthly every other month. January–February 2022, Volume 47, Number 1. Published by the National Association of FederallyInsured Credit Unions, 3138 10th Street N., Arlington, VA 22201-2149. Periodicals Postage Paid at Arlington, VA, and at additional mailing offices. POSTMASTER: Send address changes to The NAFCU Journal, NAFCU, 3138 10th Street N., Arlington, VA 22201-2149. The opinions and ideas appearing in this magazine are not necessarily representative of policies of NAFCU. Manuscripts and advertisements are welcome, although NAFCU reserves the right to edit manuscripts and refuse advertisements. Contact publisher for advertising information and rates. Appearance of an advertisement does not imply endorsement or guarantee of the advertiser’s claims. For subscription or advertising information, call 800-336-4644 or 703-522-4770. Email: nafcu@nafcu.org; website: www.nafcu.org. ©2022 National Association of Federally-Insured Credit Unions, all rights reserved. The NAFCU Jou nal (ISSN 1043-7789) is published bimonthly every ther month. January–F bruary 2022, Volume 47, Numbe 1. Published by the National Association of FederallyInsu ed Credit Unions, 3138 10th Street N., Arlington, VA 22201-2149. Perio icals Postage Paid at Arlingt n, VA, and at additional mailing offices. POSTMASTER: Send address changes to The NAFCU Journal, NAFCU, 3138 10th Street N., Arlington, VA 22201-2149. The opinions and ide s appearing in this magazine ar no necessarily repr s ntative of polici s of NAFCU. Manuscripts and advertisements are welcome, alth ugh NAFCU reserves he right to dit manuscripts and refus advertisements. Contact publisher for advertisi g inf rmation and rates. Appearance of an advertisement does ot i ply endorsement or guarantee of the advertiser’s cl ims. For s bscription or advertising information, c ll 800-336-4644 or 703-522-4770. Email: nafcu@nafcu.org; w bsite: www.nafcu.org. ©2022 National Association of Federally-Insured Credit Unions, all rights reserved. 12 21 FEATURES 12 An Election Year May Mean Less Lawmaking, More Regulating 16 2022 Economic Outlook Challenges Remain in First Half of Year, But Recession Not Likely 21 NAFCU 2022 Vendor Directory 32 NAFCU 2022 Advocacy Priorities COLUMNS 5 Conferences 6 From the Chair 8 Washington and Industry Briefs 10 The Bottom Line 34 Inside NAFCU Services 38 Management Insight 40 Executive Spotlight 42 Leadership Download 44 Compliance Central 46 From the President’s Desk 16 NAFCU 2022 VENDOR DIRECTORY
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5 THE NAFCU JOURNAL January–February 2022 DIRECTORS Thomas W. DeWitt, Chair State Farm FCU (Ill.) Gary A. Grinnell, Vice Chair Corning FCU (N.Y.) Brian T. Schools, Treasurer Chartway FCU (Va.) Karen Harbin, Secretary Commonwealth CU (Ky.) Melanie Kennedy Southwest Financial FCU (Texas) James A. Kenyon Whitefish CU (Mont.) Frank Mancini Connex CU (Conn.) Lonnie Nicholson EECU (Texas) Jan N. Roche State Department FCU (Va.) Lisa A. Schlehuber Elements Financial FCU (Ind.) Keith Sultemeier Kinecta FCU (Calif.) EXECUTIVE STAFF B. Dan Berger President/CEO Anthony Demangone Executive Vice President/COO Greg Mesack Senior Vice President of Government Affairs Randy Salser President of NAFCU Services Corporation MAGAZINE STAFF Haley Crimmins Editor LLM Publications Editorial Services and Design ADVERTISING sales@nafcu.org www.nafcu.org/advertise National Association of Federally-Insured Credit Unions | Your Direct Connection to Federal Advocacy, Education & Compliance National Association of Federally-Insured Credit Unions | Your Direct Connection to Federal Advocacy, Education & Compliance National Association of Federally-Insured Credit Unions | Your Direct Connection to Federal Advocacy, Education & Compliance CONFERENCES 2022 Calendar of Events Spring 2022 Virtual BSA School Feb. 8–10 Regulatory Compliance School March 14–18, in-person in Arlington, Va. Strategic Growth Conference March 21–23, in-person in Greenville, S.C. Board of Directors and Supervisory Committee Conference April 11–14, in-person in Nashville, Tenn. CEOs and Senior Executives Conference May 11–13, in-person in Key West, Fla. Summer 2022 55th Annual Conference and Solutions Expo July 12–15, in-person in Montreal, Canada Virtual Risk Management Seminar Aug. 16–18 Congressional Caucus Sept. 11–14, in-person in Washington, D.C. Fall 2022 CFO Summit September, in-person (location TBA) Regulatory Compliance & BSA Seminar Sept. 27–29, in-person in Louisville, Ky. Management and Leadership Institute Oct. 17–21, in-person in Annapolis, Md. Lending Conference Nov. 8–10, in-person in Greenville, S.C For more information about NAFCU’s conferences, go to www.nafcu.org/conferences. Looking for more educational opportunities? NAFCU’s Online Training Center has been redesigned to give credit union professionals easier access to the association’s training programs and library of webinars. For information and the current schedule of upcoming webinars, visit www.nafcu.org/ onlinetraining. Topics and dates subject to change.
6 THE NAFCU JOURNAL January–February 2022 FROM THE CHAIR CREDIT UNIONS MUST BE OMNIPRESENT IN AN INCREASINGLY DIGITAL WORLD By Tom DeWitt, NAFCU Board Chair As medical technology grabbed most of the headlines in 2021, financial technology quietly advanced by leaps and bounds. As we enter 2022, it’s impossible to ignore that a decentralized, digital financial world has taken root, sending green shoots up through the cracks of the traditional financial services industry. One thing I know for sure: our industry has no reason to be concerned. Credit unions have risen to meet this type of challenge before, and we’ll meet this one, too. Because credit unions have a rich evolutionary history, NAFCU’s 2022 Advocacy Priorities include a new core goal: opportunities for credit unions to innovate and develop strong technology partnerships. As consumer life turns increasingly digital, credit unions must innovate to provide the latest products and services. This may require new vendor partnerships, the adoption and development of new technologies or the ability to provide services that support member engagement with and ownership of digital assets. When evaluating new technologies, NAFCU believes regulators should adopt flexible approaches to avoid stifling innovation and locking credit unions out of the marketplace. NAFCU’s 2022 Advocacy Priorities also include the following goals: ■ Growth. NAFCU will continue to promote a growth-friendly environment, which includes unwavering protection of the credit union tax exemption. Some other examples of this advocacy are already at work for the industry: we fervently oppose proposals for direct government lending programs and postal banking, and will continue to work to expand credit union investment options, reform field of membership rules and modernize outdated FCU Act limitations. NAFCU believes that credit unions should have as many opportunities as fintech companies to provide their members with modern financial services, including those that facilitate engagement with digital assets. ■ Regulatory Relief. Regulatory burden continues to unnecessarily stunt credit union growth and service. NAFCU supports regulatory reform that includes appropriately tailored rules backed by cost-benefit analysis and enforced by a three-member NCUA Board as the primary regulator of all credit unions. We also continue to advocate that enforcement orders from regulators not take the place of regulation or agency guidance. NAFCU hopes to foster a regulatory environment that promotes healthy competition and responsible innovation. ■ Fair Market. NAFCU believes reform is also needed to ensure all lenders, payments providers, depository institutions and other financial services providers operate on a level playing field and follow the same rules of the road. In 2021, NAFCU pushed back against a sudden expansion in fintech chartering activity because many of the critical policy decisions related to such chartering had been the product of opaque deliberations within the OCC. ■ Data Protection. In our increasingly digital world, federal standards for data privacy and data security are essential. The cumulative toll of data breaches affecting merchants, credit bureaus and social media companies has yielded an enormous volume of personal information for cyber criminals to craft into convincing social engineering attacks. As the CFPB contemplates a future rulemaking to facilitate consumer data portability in an age of mobile banking, the data security standards which apply to credit unions must also be extended to fintechs and data aggregators to ensure that sensitive, consumer information is adequately protected. Credit unions have served their members through war, social unrest, financial crises, economic recessions and countless technology challenges. We’ll continue to serve as a bastion of financial inclusion and available credit, whatever may come, because people helping people is universal. For more on NAFCU’s 2022 Advocacy Priorities, go to www.nafcu.org/priorities. Tom DeWitt is president and CEO of State Farm Federal Credit Union in Bloomington, IL.
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8 THE NAFCU JOURNAL January–February 2022 WASHINGTON AND INDUSTRY BRIEFS CREDIT UNIONS VS. BANKS For years, banks and credit unions have continuously clashed on various legislative, regulatory and organizational differences. From issues such as the credit union tax-exempt status, consumer benefits and overall organizational imbalances, banks and credit unions tend to disagree. Here are a few recent brawls between the two that spotlight the credit union difference. Net Earnings There remains a large disparity among bank and credit union net earnings. The 100 largest banks earn just as much in one month as the entire credit union industry earns in one year. This proportional indifference makes it difficult for the two to align. Banks are for-profit, tending to increase rates for consumers to help them make a profit, whereas credit unions remain consumer-friendly and frugal with their rates. Tax-Exempt Status One major ongoing dispute between banks and credit unions centers around the credit union tax-exempt status. Banks argue that credit unions have an unfair advantage when it comes to their tax- exempt status; however, a recent independent study commissioned by NAFCU proves otherwise. The study examines the benefits brought to consumers, businesses and the U.S. economy by the credit union federal income tax exemption. Specifically, it found that removing the tax exemption status for credit unions would reduce tax revenue by $56 billion, reduce economic activity by $120 billion and eliminate nearly 80,000 jobs per year over a decade. In their report, the authors also noted the ways bank customers benefit from the role credit unions play in the marketplace. “The benefit of those better rate offerings extends beyond credit union members to bank customers as well, due to increased competition,” they wrote. The study also found that the credit union tax exemption benefits all households—including both members and non-members—to the tune of $15 billion a year. Of note, direct benefits to credit union members from these lower rates range from $4.4 to $10.7 billion annually over the past ten years. Bank lobbyists have launched numerous campaigns calling for the removal of credit unions’ tax exemption status even though, under the Tax Cuts and Jobs Act, banks received $95 billion in tax breaks—an amount that far exceeds the credit union tax exemption. Not to mention, credit unions use this tax-exempt status, which has been reaffirmed by the IRS, Treasury Department, Congress and their not-for-profit cooperative structure to focus on providing consumers with better rates, lower fees and going above and beyond to serve the communities in which they operate. Visit www.nafcu.org/cutaxexemption for more on this topic. Consumer Treatment Credit unions periodically call out banks for taking advantage of their consumers. Since the financial crisis of 2008, banks have paid $243 billion in fines for violating numerous consumer laws. In addition, credit unions like to highlight the fact that banks constantly spend hundreds of billions in buying back shares of their own stock to increase internal revenue, therefore hurting their customers as well as the general public. Conclusion Banks and credit unions have long fought on these issues, among others, with each other. After looking at the full picture, it’s necessary to recognize the large differences between the two financial institutions. Credit unions are encouraged to join NAFCU in its advocacy to educate Congress on these facts and to fight back against banker attacks.
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10 THE NAFCU JOURNAL January–February 2022 RETIRING IN THE AGE OF COVID By Curt Long THE BOTTOM LINE One of the COVID-era labor market trends garnering attention is a rise in retirements. The share of Americans identifying as out of the work force due to retirement trended steadily higher over the past decade as the Baby Boomer generation reached retirement age. However, in the spring of 2020 there was a large surge of retirements, which was maintained over the months that followed. Data through October 2021 indicates that there are over 2 million more retirees than would have been expected based on the pre-COVID trend. With job openings reaching all-time highs, many employers may be wondering what is causing the retirement rush and hoping that the recent trend may reverse itself. Research from the Federal Reserve Bank of Kansas City showed that flows from the labor force into retirement have been steady during the pandemic. However, flows from retirement back into the labor force collapsed. Traditionally, many retirees remain marginally attached to the labor force and tack back and forth between retirement and employment. The rise in overall number of retirees was the result of these individuals declining to re-enter the labor force at the same rate that they had historically. It is likely that early in the pandemic, COVID fears played a role in keeping retirees on the sidelines. This would explain the sharp rise in retirees in Share of the U.S. Population Not in Labor Force Due to Retirement Source: NAFCU Research analysis of Current Population Survey monthly files (IPUMS) 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 17 16 15 14 13 12 11 10 percent Pre-COVID Trend
11 THE NAFCU JOURNAL January–February 2022 March through July 2020. Compared to pre-COVID, the biggest drop in labor force participation was among those in their 60s, who may believe themselves (or friends and family members) to be at greater risk from the virus. Another factor may be stimulus checks and unemployment benefits. In November, the Washington Post reported on a trend in retirees delaying Social Security claims, potentially as a strategy to increase benefits later on. Where it is commonly believed that younger workers used pandemic savings to seek better employment opportunities, it may be that older Americans are using theirs to solidify their retirement status and to tide them over until they begin claiming Social Security benefits. If this view is correct, it does not offer much hope to employers that a large swathe of older workers is poised to re-enter the work force. The pandemic retiree is more likely to be 65 or older and well positioned financially to remain out of the labor force. Noting this trend, the Bureau of Labor Statistics devoted special attention to labor force participation among older age cohorts in its latest long-term projections. The BLS does not expect that the recent downturn in participation rates will last. By 2030, their projections call for steep increases across all 55-and-older age groups. Such a labor market would be vastly different from the one employer’s face today. Although labor may not be in such short supply, a job force made up of a growing share of older individuals that are eligible for retirement benefits could introduce new types of hiring and retention uncertainties. Where it is commonly believed that younger workers used pandemic savings to seek better employment opportunities, it may be that older Americans are using theirs to solidify their retirement status and to tide them over until they begin claiming Social Security benefits. Change in Labor Force Participation Rate vs. Pre-COVID Bars show the difference between the average monthly labor force participation rate in each age cohort from Aug 2021 through Oct 2021 and the average from Aug 2019 through Oct 2019. Source: NAFCU Research analysis of Current Population Survey monthly files (IPUMS) All Ages Under 55 55 to 59 60 to 64 65 to 69 70+ -3.0 Percentage Points -2.5 -2.0 -1.5 -2.0 -0.5 0.0
A closely-divided Congress and a midterm election combine for a great deal of uncertainty in 2022 in terms of legislative and regulatory activities, but there are a number of issues that credit union leaders should pay close attention to throughout the year. By Sheryl S. Jackson 12 THE NAFCU JOURNAL January–February 2022 An Election Year May Mean Less Lawmaking, More Regulating
13 THE NAFCU JOURNAL January–February 2022
14 THE NAFCU JOURNAL January–February 2022 “Typically, the party that is in the White House loses seats in both houses during the midterms, but we are a long way away from the election and there are a lot of global factors that could change the outcome,” said Brad Thaler, vice president of legislative affairs for NAFCU. “It will be hard to pass legislation prior to 2022 midterms because both parties will be looking for ways to position their party and their agenda for success in the election.” This doesn’t mean that no new oversight will be put into place, he said. “When you can’t legislate, you can advance issues through the regulatory process.” “We are already seeing issues such as racial equity gaining more oversight, especially as President Biden’s regulatory appointment process hits its stride,” said Greg Mesack, senior vice president of government affairs for NAFCU. “The good news is that credit unions have a great story to tell because they serve minority members, small businesses and borrowers better than banks.” “We anticipate efforts from Freddie Mac, Fannie Mae, FHA and HUD to look for bias in the mortgage lending space,” said Ann Kossachev, vice president of regulatory affairs for NAFCU. There is a specific focus on bias in the appraisal process, which may not immediately affect credit unions from a regulatory perspective; but it is important to be aware of the issue as the NCUA will likely look into how credit unions review appraisals, she said. “The Consumer Financial Protection Bureau will also be looking closely at equity in small business loans by requiring financial institutions to submit data if the institution makes more than 25 small business loans in the preceding two calendar years,” said Kossachev. “Credit unions are limited on how many small business loans they can make, but we saw during the pandemic, and with the Paycheck Protection Program, that our members are positioned well to serve a greater number of small, community- based businesses.” One of the efforts that will continue to be pursued by NAFCU is to work with lawmakers to increase the member business lending cap, she added. “Credit unions can also expect tougher exams,” said Kossachev. “The appointment of Rohit Chopra does signal a return to regulation by enforcement, as well as a focus on lending practices.” She advised credit unions to be sure that all regulatory requirements for lending are met, including the provision of all loss mitigation options. Another issue that will be reviewed in 2022 is the result of the pilot project in four locations in and around Washington D.C. and the Bronx, New York that allowed check cashing and bill paying activities at post offices. “The intent of the program is to provide more access for underserved communities, but we’re asking Congress to enable credit unions to add underserved communities to their fields of membership,” said Kossachev. “While the goal is good, use of the post office could pose challenges that include substantial investment in systems and infrastructure to provide services and meet consumer protection as well as privacy and security concerns.” The time required to put infrastructure in place, and the limited services that could be offered might not have an impact in underserved communities, compared to a credit union’s ability to move into an area and have significant impact, she added. Other issues to watch throughout 2022 include: “We don’t expect significant lawmaking in 2022, and anything that can pass is likely non-controversial. Luckily, credit unions enjoy bipartisan support, so everyone needs to continue making lawmakers and their staff aware of the benefits provided by credit unions to members and their communities.” BRAD THALER, VICE PRESIDENT OF LEGISLATIVE AFFAIRS FOR NAFCU “The Consumer Financial Protection Bureau will also be looking closely at equity in small business loans by requiring financial institutions to submit data if the institution makes more than 25 small business loans in the preceding two calendar years.” ANN KOSSACHEV, VICE PRESIDENT OF REGULATORY AFFAIRS FOR NAFCU
15 THE NAFCU JOURNAL January–February 2022 TECHNOLOGY A big focus for NAFCU in the coming year will be technology and the use of cryptocurrency and digital assets. The NCUA requested feedback a few months ago about how credit unions can facilitate use of digital assets, said Kossachev. “Credit unions need to facilitate and embrace technology, including artificial intelligence and machine learning, to provide services to members.” “Our advocacy efforts in 2022 will focus on allowing credit unions to innovate, grow and modernize with investment in technologies that make it easier to serve members,” said Thaler. “Credit unions need to have access to emerging technology that allows them to compete with other financial institutions.” While regulation is a given, Thaler pointed out that “right size regulation that does not give fintechs an unfair, regulatory advantage” is critical if credit unions are going to adopt innovative tools. Furthermore, he noted that unregulated fintechs competing in the financial services space need to be regulated. “We don’t expect significant lawmaking in 2022, and anything that can pass is likely non-controversial,” said Thaler. “Luckily, credit unions enjoy bipartisan support, so everyone needs to continue making lawmakers and their staff aware of the benefits provided by credit unions to members and their communities.” In addition to paying attention to issues, updates and messages in NAFCU’s federal advocacy center on the website, talking with colleagues and staying up-to-date on legislative issues through other sources, credit unions should stand ready to become part of NAFCU’s grassroots advocacy efforts, says Mesack. “We have a great level of grassroots support with our member credit unions and their members, who are willing to write letters, talk to representatives, and more importantly, vote for those who support credit unions’ mission!” CREDIT UNION TAX EXEMPTION With the passage of bills such as the infrastructure bill, which set unprecedented spending levels, the search for ways to pay for new legislation raises concern about the protection of the credit union tax exemption, said Thaler. “It is important for credit unions not to be hampered by efforts to raise revenue, at the same time proposed regulations may add new costs and burdens to credit union operations,” he said. “We’ll continue to monitor this issue closely.” INTERCHANGE FEES The ongoing battle about interchange fees will continue into 2022, said Thaler. Retailers continue to demand for regulation of interchange fees for credit and debit card transactions, and the financial industry continues to note the value of the current payments system. The fees cover the financial institutions’ assumption of risk for the “loans” that enable consumers to purchase products from retailers when they may not have the cash and facilitate easier payment to merchants, as well as enhanced security for financial transactions. “We have a concern about efforts to put caps on fees that will place an undue burden on all financial institutions at the same time more data security and privacy protections are needed,” said Thaler.
16 THE NAFCU JOURNAL January–February 2022 Noted management consultant and author, Peter Drucker, once described predicting the future as “trying to drive down a country road at night with no lights while looking out the back window.” Even with this warning in mind, every business leader knows that you have to keep looking ahead to see how economic, social, local and global issues may affect business. Keeping the need to plan for the future in mind, along with Drucker’s warning that it is difficult to predict or control continual change, credit union leaders are looking at the U.S. economy and how it will affect credit unions and their members in 2022. 2022 ECONOMIC OUTLOOK Challenges Remain in First Half of Year, But Recession Not Likely By Sheryl S. Jackson
17 THE NAFCU JOURNAL January–February 2022
18 THE NAFCU JOURNAL January–February 2022 Inflation is top of mind for many people, but the characterization of inflation seen in late 2021 as transitory can be misleading, said Curt Long, chief economist and vice president of research for NAFCU. “Transitory means different things to different people, but I believe high inflation will last longer than many people believe.” “There are two camps of thought about inflation, and I am more in the camp that inflation is NOT transitory, and we will see higher inflation going forward, even if we get back to a more normal economic environment, which is expected in 2022,” said Fred Eisel, chief investment officer for Vizo Financial Corporate Credit Union. Wages and supply cost increases have resulted in price increases by consumer goods companies, he pointed out. “I don’t think you see these prices come down even if raw materials get cheaper, as wages and other expenses remain high to produce a number of these goods.” Wage pressures, especially with lower- paid staff, have finally taken hold with the fight for $15 per hour and higher base hourly rates, and in the financial space, Bank of America and Wells Fargo have announced their minimum pay will be $20 per hour or $40,000 a year, said Eisel. “I have spoken to a number of credit unions who are seeing this wage pressure in their own markets and forcing them to try to remain competitive with wages, specifically for their frontline staff.” Employment Costs and Challenges Competition for employees is a real concern for credit unions. According to a 2021 NAFCU survey, 55% of respondents reported that attracting and retaining skilled staff is a significant challenge. This is a notable increase over 2020 survey results in which 36.4% named attracting and retaining staff as a significant challenge. Although it is hard to determine data from all sources, it appears the concern about COVID and lack of daycare for working mothers are the biggest obstacles to re-entry into the workplace right now, said Eisel. “The Atlanta Fed did a research piece on workers with young children during the pandemic and found women with children under six, who made up 10% of the workforce prior to the pandemic, account for almost a quarter of the workers missing from employment rolls.” It appears from the research, daycare closings and subsequent very slow re-openings are the major factor holding back employment for this cohort, rather than school closures, he said. “Other research suggests around 800,000 workers aged 55 years and older have left the workforce, with the major factors including continued concerns over the pandemic, childcare issues and folks deciding they are ready for retirement.” Another issue related to returning to a normal workplace is the comfort employees developed while working from home. “We’ve had a bit of a challenge calling our folks back from ‘Zoomland,’” says Paul Parrish, CEO of One Nevada Credit Union. “Some employees were thrilled to be able to return from the work-from-home schedule, while others had grown kind of fond of it.” There has been a bit of turnover as a result of calling employees back into the branches and offices, he said. The combination of employees wanting to work remotely, increased wage demands and competition for qualified employees will affect credit unions in the coming year, said Parrish. He does expect compensation and benefits costs to increase. “Not all of this is being caused by evolving demands of the available labor pool,” he said. “We now have close to 80% of our members actively using our remote and mobile products for their everyday, routine transactions, which means our branches become technical service and financial advice centers instead of manual transaction factories. As a result, we’re moving toward fewer but smarter and better-paid member- facing employees to ensure more valuable employee encounters for our members.” Housing and Auto Trends Housing costs, in terms of home purchases as well as rents, will also drive inflation into mid-2022, says Long. “This might be more of an issue in some regions than in others as the migration of There are two camps of thought about inflation, and I am more in the camp that inflation is NOT transitory, and we will see higher inflation going forward, even if we get back to a more normal economic environment, which is expected in 2022. FRED EISEL, CHIEF INVESTMENT OFFICER FOR VIZO FINANCIAL CORPORATE CREDIT UNION
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20 THE NAFCU JOURNAL January–February 2022 people to suburbs during the pandemic and work-at-home situations settles,” he says. The combination of businesses relocating to other states as well as individuals relocating to suburbs or to lower-cost states created unusual price increases in many areas, he points out. As housing forbearance programs come to an end, Parrish does not see much impact for his credit union. “Our portfolio has continued to bump along without much impact, and it looks like that will be the case, for the most part, in other regions of the country,” he said. “As such, we’re not expecting any impactful amount of foreclosure activity.” There is likely to be a noticeable difference for auto loan volume. “Auto loans are an important part of the overall loan portfolio for credit unions and there is not a lot of good news about future new auto purchases,” says Long. “Domestic manufacturing is down 30%, there’s a shortage of semiconductors used in auto systems, and supply chain issues are slowing delivery of materials.” As new cars have become scarcer, the sale of used cars has doubled, which is some good news, he adds. “This will resolve but we won’t see any light at the end of the tunnel until later in 2022.” “We’ve seen a significant impact in our area—it’s kind of eerie passing by the various auto malls here and seeing dealerships with almost no inventory,” said Parrish. “Our auto loan volume is off by about 25%, and competition for what deals are out there has been pretty stiff.” One thing to keep in mind: new and used auto pricing has reached record levels, as new cars are selling at sticker and some dealers are now adding on an additional fee, said Eisel. “Cars are an asset that depreciates in value, so as the auto sector corrects itself into next year, the valuation of these autos will most likely trend back to mean, and it may be quick.” This is something to be aware of as credit unions look at LTV percentages in their loan portfolio, he warned. Interest Rates “Federal Reserve officials are split down the middle on predictions for the Fed to raise interest rates, with some saying it will happen in 2022 and others saying not until 2023,” says Long. “Inflation should remain somewhat elevated, but it will still take some time to get back to full employment. I believe we will probably see a rate hike in the fourth quarter of 2022.” “If the Fed does increase rates slightly next year, and right now, the futures market is pricing in 2.5 rate increases, this should benefit credit unions,” said Eisel. Spreads have been incredibly tight throughout this pandemic, so an increase in overnight rates will provide much needed room for margin expansion as cash and other short-term assets would reprice higher. “Most likely, credit union deposit accounts would lag this increase, providing some increased margins, and any investments or loans that are variable rate based on Prime or another index will adjust, benefitting the credit union.” Credit unions do need to model various rate scenarios and yield curve shapes to determine the impact to their balance sheet in the years ahead to evaluate the effect of higher yield loans or funding cost increases, he suggested. Recession Not Likely “I am not in the camp that believes we are heading to a recession, even though growth will slow in early 2022,” said Eisel. “The Bloomberg forecast right now is for economic growth to be around 4% in 2022. In 2023, economic growth is expected to head closer to 2.4%.” While this is slower, it’s also a more normal level of growth, he pointed out. “Economic growth of around 2–3% is normal, in fact, it averaged 2.2% from 2010 to the end of 2019, right before the pandemic year.” Long agreed that there is a low likelihood for a recession and that the release of pent-up demand and return to normalcy after the pandemic will spur a stronger economy. “The end of 2021 we were still on a bit of a hold on the economy but 2022 will see more people returning to work, and some of the supply issues will sort themselves out,” he says. “We will see a big difference between the first and second halves of 2022, with us seeing a more recognizable economy in the second half.” Looking Forward When asked to give advice for credit union leaders as 2022 begins, Parrish said, “Capital, liquidity and task optimization will be vital to operating in an increasingly uncertain environment. If the economy does head south, capital will help us absorb whatever shocks might come our way. If rates take off on us, liquidity will certainly be useful on that ride up. And as technology remains front and center in terms of meeting member service expectations, we’ll need to focus on redirecting any resulting available resources toward more productive endeavors and better service.” Our portfolio has continued to bump along without much impact, and it looks like that will be the case, for the most part, in other regions of the country,” he said. “As such, we’re not expecting any impactful amount of foreclosure activity. PAUL PARRISH, CEO OF ONE NEVADA CREDIT UNION
The 2022 Vendor Directory features new and returning service providers to help credit unions find the best products and services to better serve members and streamline operations. The Vendor Directory is also available via a dynamic online platform, accessible year-round. NAFCU’s Vendor Directory is a valuable resource compiled to assist credit union executives in identifying, locating and sourcing credit union suppliers, their products and services. To locate vendors of a specific product or service, refer to the Product Directory on pages 22–23. Each product category identifies a list of suppliers. To obtain a specific company’s contact information, including website, turn to the Vendor Directory on pages 24–31. NAFCU 2022 VENDOR DIRECTORY The vendors listed in this directory are not necessarily endorsed by NAFCU. These are paid advertisements. PREFERRED PARTNER NAFCU Services Preferred Partners can be easily identified by a shadow box around their listing. Preferred Partners have been designated by NAFCU Services as suppliers that are truly committed to credit unions and have undergone a rigorous evaluation process. 21 THE NAFCU JOURNAL January–February 2022
22 THE NAFCU JOURNAL January–February 2022 ACCOUNTING ARCSys . . . . . . . . . . . . . . . . 24 Nearman, Maynard, Vallez, CPAs . . . . 28 AML/BSA AI Oasis, Inc. . . . . . . . . . . . . . . 24 ARC Risk and Compliance . . . . . . . 24 DefenseStorm . . . . . . . . . . . . . 26 ANALYTICS AI Oasis, Inc. . . . . . . . . . . . . . . 24 ARCSys . . . . . . . . . . . . . . . . 24 Cook Solutions Group . . . . . . . . . 25 CUNA Mutual Group . . . . . . . . . . 25 Feathr . . . . . . . . . . . . . . . . . 26 Franklin Madison . . . . . . . . . . . . . . . . . . . . . . . 27 Open Lending . . . . . . . . . . . . . 29 Origence, a CU Direct Brand . . . . . . 29 SAS . . . . . . . . . . . . . . . . . . 30 Trellance . . . . . . . . . . . . . . . . 31 ARTIFICIAL INTELLIGENCE & MACHINE LEARNING AI Oasis, Inc. . . . . . . . . . . . . . . 24 CO-OP Financial Services . . . . . . . . 25 interface, Inc. . . . . . . . . . . . . . 27 Upstart . . . . . . . . . . . . . . . . 31 BOARD SERVICES DDJ Myers . . . . . . . . . . . . . . . 26 E Space Communications . . . . . . . 26 Shanley Search Partners . . . . . . . . 30 CLOUD COMPUTING Amazon Web Services . . . . . . . . . 24 Axonius . . . . . . . . . . . . . . . . 24 Computer Services, Inc. (CSI) . . . . . . 25 Dataprise . . . . . . . . . . . . . . . 25 COMPENSATION & BENEFITS DDJ Myers . . . . . . . . . . . . . . . 26 Gallagher . . . . . . . . . . . . . . . 27 COMPLIANCE Computer Services, Inc. (CSI) . . . . . . 25 DefenseStorm . . . . . . . . . . . . . 26 Farleigh Wada Witt . . . . . . . . . . . 26 F.I.R.M. Consulting Services, LLC . . . . 27 Kaufman & Canoles, P.C. . . . . . . . . 28 Ncontracts . . . . . . . . . . . . . . . 28 Nearman, Maynard, Vallez, CPAs . . . . 28 Oak Tree Business Systems, Inc. . . . . . 29 OutSolve Affirmative Action Compliance 29 Total Expert . . . . . . . . . . . . . . 31 Wolters Kluwer . . . . . . . . . . . . . 31 CONSULTING Allied Solutions, LLC . . . . . . . . . . . . . . . . . . . . 24 ARC Risk and Compliance . . . . . . . 24 Ever Green 3C . . . . . . . . . . . . . 26 Origence, a CU Direct Brand . . . . . . 29 OutSolve Affirmative Action Compliance 29 Strategic Resource Management (SRM) . 30 Trellance . . . . . . . . . . . . . . . . 31 UpStreme, Inc. . . . . . . . . . . . . . 31 CORE PROCESSING Symitar . . . . . . . . . . . . . . . . 30 CREDIT & DEBIT CARD SERVICES CO-OP Financial Services . . . . . . . . 25 FIS . . . . . . . . . . . . . . . . . . . 27 Mastercard . . . . . . . . . . . . . . 28 REPAY . . . . . . . . . . . . . . . . . 30 CYBERSECURITY ARC Risk and Compliance . . . . . . . 24 Axonius . . . . . . . . . . . . . . . . 24 Computer Services, Inc. (CSI) . . . . . . 25 Cook Solutions Group . . . . . . . . . 25 Dataprise . . . . . . . . . . . . . . . 25 DefenseStorm . . . . . . . . . . . . . 26 UpStreme, Inc. . . . . . . . . . . . . . 31 DIGITAL & ONLINE BANKING Amazon Web Services . . . . . . . . . 24 Blend . . . . . . . . . . . . . . . . . 24 CO-OP Financial Services . . . . . . . . 25 FIS . . . . . . . . . . . . . . . . . . . 27 Q2 . . . . . . . . . . . . . . . . . . . 29 Spave . . . . . . . . . . . . . . . . . 30 Wolters Kluwer . . . . . . . . . . . . . 31 EDUCATION & TRAINING ARC Risk and Compliance . . . . . . . 24 Ascensus . . . . . . . . . . . . . . . 24 Kaufman & Canoles, P.C. . . . . . . . . 28 Rochdale . . . . . . . . . . . . . . . 30 FINANCE Federal Home Loan Bank of Atlanta . . . 26 Origence, a CU Direct Brand . . . . . . 29 FORMS Oak Tree Business Systems, Inc. . . . . . 29 Securian Financial Group, Inc. . . . . . 30 Wolters Kluwer . . . . . . . . . . . . . 31 HUMAN RESOURCES Gallagher . . . . . . . . . . . . . . . 27 OutSolve Affirmative Action Compliance 29 Shanley Search Partners . . . . . . . . 30 INFORMATION TECHNOLOGY Amazon Web Services . . . . . . . . . 24 Axonius . . . . . . . . . . . . . . . . 24 Computer Services, Inc. (CSI) . . . . . . 25 Dataprise . . . . . . . . . . . . . . . 25 E Space Communications . . . . . . . 26 interface, Inc. . . . . . . . . . . . . . 27 Persistent Systems . . . . . . . . . . . 29 Symitar . . . . . . . . . . . . . . . . 30 Total Expert . . . . . . . . . . . . . . 31 Trellance . . . . . . . . . . . . . . . . 31 Velocity Solutions . . . . . . . . . . . 31 INSURANCE Allied Solutions, LLC . . . . . . . . . . . . . . . . . . . . 24 CUNA Mutual Group . . . . . . . . . . 25 Franklin Madison . . . . . . . . . . . . . . . . . . . . . . . 27 Gallagher . . . . . . . . . . . . . . . 27 Insuritas . . . . . . . . . . . . . . . . 27 Open Lending . . . . . . . . . . . . . 29 Securian Financial Group, Inc. . . . . . 30 INVESTMENTS CUNA Mutual Group . . . . . . . . . . 25 Gallagher . . . . . . . . . . . . . . . 27 LendKey Technologies . . . . . . . . . 28 Money Concepts International, Inc. . . . 28 PRODUCT DIRECTORY NAFCU 2022 VENDOR DIRECTORY
23 THE NAFCU JOURNAL January–February 2022 LEGAL SERVICES Farleigh Wada Witt . . . . . . . . . . . 26 Howard & Howard Attorneys PLLC . . . 27 Kaufman & Canoles, P.C. . . . . . . . . 28 LENDING Allied Solutions, LLC . . . . . . . . . . . . . . . . . . . . 24 Blend . . . . . . . . . . . . . . . . . 24 Credit Union Leasing of America (CULA) 25 CUNA Mutual Group . . . . . . . . . . 25 Dovenmuehle Mortgage, Inc. . . . . . . 26 Jack Henry . . . . . . . . . . . . . . . 27 LendKey Technologies . . . . . . . . . 28 Mastercard . . . . . . . . . . . . . . 28 Oak Tree Business Systems, Inc. . . . . . 29 Open Lending . . . . . . . . . . . . . 29 Origence, a CU Direct Brand . . . . . . 29 Q2 . . . . . . . . . . . . . . . . . . . 29 REPAY . . . . . . . . . . . . . . . . . 30 Securian Financial Group, Inc. . . . . . 30 Triad Financial Services, Inc. . . . . . . 31 Upstart . . . . . . . . . . . . . . . . 31 Velocity Solutions . . . . . . . . . . . 31 Wolters Kluwer . . . . . . . . . . . . . 31 MANAGEMENT & LEADERSHIP DDJ Myers . . . . . . . . . . . . . . . 26 Shanley Search Partners . . . . . . . . 30 UpStreme, Inc. . . . . . . . . . . . . . 31 MARKETING & COMMUNICATIONS Feathr . . . . . . . . . . . . . . . . . 26 Foresight Group . . . . . . . . . . . . 27 Franklin Madison . . . . . . . . . . . . . . . . . . . . . . . 27 Spave . . . . . . . . . . . . . . . . . 30 Total Expert . . . . . . . . . . . . . . 31 MEMBER SERVICES Credit Union Leasing of America (CULA) 25 Federal Home Loan Bank of Atlanta . . . 26 REPAY . . . . . . . . . . . . . . . . . 30 Total Expert . . . . . . . . . . . . . . 31 MERGERS & ACQUISITIONS E Space Communications . . . . . . . 26 Howard & Howard Attorneys PLLC . . . 27 Kaufman & Canoles, P.C. . . . . . . . . 28 OPERATIONS FIS . . . . . . . . . . . . . . . . . . . 27 Oak Tree Business Systems, Inc. . . . . . 29 Q2 . . . . . . . . . . . . . . . . . . . 29 PAYMENTS & PROCESSING CO-OP Financial Services . . . . . . . . 25 Dovenmuehle Mortgage, Inc. . . . . . . 26 FIS . . . . . . . . . . . . . . . . . . . 27 Jack Henry . . . . . . . . . . . . . . . 27 Mastercard . . . . . . . . . . . . . . 28 Persistent Systems . . . . . . . . . . . 29 REPAY . . . . . . . . . . . . . . . . . 30 Trellance . . . . . . . . . . . . . . . . 31 PERSONAL FINANCE Ever Green 3C . . . . . . . . . . . . . 26 RECRUITING & STAFFING DDJ Myers . . . . . . . . . . . . . . . 26 Shanley Search Partners . . . . . . . . 30 RETIREMENT Ascensus . . . . . . . . . . . . . . . 24 Mastercard . . . . . . . . . . . . . . 28 Money Concepts International, Inc. . . . 28 Pentegra . . . . . . . . . . . . . . . . 29 Securian Financial Group, Inc. . . . . . 30 RISK MANAGEMENT AI Oasis, Inc. . . . . . . . . . . . . . . 24 Allied Solutions, LLC . . . . . . . . . . . . . . . . . . . . 24 Axonius . . . . . . . . . . . . . . . . 24 Cook Solutions Group . . . . . . . . . 25 DefenseStorm . . . . . . . . . . . . . 26 Farleigh Wada Witt . . . . . . . . . . . 26 F.I.R.M. Consulting Services, LLC . . . . 27 Ncontracts . . . . . . . . . . . . . . . 28 Open Lending . . . . . . . . . . . . . 29 Q2 . . . . . . . . . . . . . . . . . . . 29 Rochdale . . . . . . . . . . . . . . . 30 SAS . . . . . . . . . . . . . . . . . . 30 UpStreme, Inc. . . . . . . . . . . . . . 31 SECURITY Amazon Web Services . . . . . . . . . 24 Cook Solutions Group . . . . . . . . . 25 Dataprise . . . . . . . . . . . . . . . 25 E Space Communications . . . . . . . 26 VENDOR MANAGEMENT Farleigh Wada Witt . . . . . . . . . . . 26 Ncontracts . . . . . . . . . . . . . . . 28 Rochdale . . . . . . . . . . . . . . . 30
24 THE NAFCU JOURNAL January–February 2022 A PREFERRED PARTNER AI OASIS INC Catherine Lew, VP sales@ai-oasis.com (888) 227-7967 www.nafcu.org/patriotofficer AI OASIS® is the Artificial Intelligence Technology Center of the United AI Network, the next-generation Artificial Intelligence solution. United A.I. Network has tremendously raised the AML standard by tracking illicit proceeds to recover financial losses and identifying money launderers, terrorists and financial criminals in advance. Please watch the short video at the United A.I. Network website: www.ai-oasis.com/UnitedAINetwork. PREFERRED PARTNER Allied Solutions, LLC Lesli Jameson, Director – Partners, Associations & Events lesli.jameson@alliedsolutions.net (972) 447-3723 www.nafcu.org/allied Allied Solutions is one of the largest providers of insurance, lending and marketing products to financial institutions in the U.S. Allied Solutions uses technology based products and services customized to meet the needs of 4,000 clients along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains 16 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc. PREFERRED PARTNER Amazon Web Services Lian Carl, Sr. Manager aws-cu@amazon.com (855) 552-4463 www.nafcu.org/amazon-web-services AWS works with credit unions to unlock their potential. Whether your goal is to improve member services, achieve operational efficiency or strengthen your security posture, the Cloud drives innovation and growth for Credit Unions today and tomorrow. ARC Risk and Compliance Lou Giordano louis.giordano@arcriskandcompliance.com (855) 272-5995 www.arcriskandcompliance.com ARC Risk and Compliance is a veteran- owned award-winning specialized consulting firm that is dedicated to assisting credit unions maintain or improve their anti-money laundering (AML) and anti- terrorism compliance programs. We assist our clients by providing project- based consultative projects, including conducting model validations of their AML programs, AML risk assessments, AML software tuning and optimization, AML look-back reviews and specialized AML staffing. PREFERRED PARTNER ARCSys Scott Zimmer, Sales Manager szimmer@arcsysonline.com (757) 447-4673 www.nafcu.org/arcsys ARCSys provides dynamic loan- level CECL allowance for credit loss software to Credit Unions and other financial institutions with customized models and forecasts. PREFERRED PARTNER Ascensus Joe Doolittle, Relationship Manager joseph.doolittle@ascensus.com (218) 825-5885 www.nafcu.org/ascensus For more than 40 years, Ascensus has delivered comprehensive IRA and HSA education and solutions. The firm’s solutions offer capabilities to streamline operations while maintaining regulatory compliance. For more information, visit www. ascensus.com. Axonius Dave Twichell, Sr. Vertical Marketing Manager dave.twichell@axonius.com (909) 725-9339 www.axonius.com Axonius is the cybersecurity asset management platform that gives organizations a comprehensive asset inventory, uncovers gaps and automatically validates and enforces policies. The Axonius cyber asset attack surface management (CAASM) solution integrates with hundreds of data sources to give customers the confidence to control complexity by mitigating threats, navigating risk, decreasing incidents, automating response actions and informing business-level strategy. B PREFERRED PARTNER Blend Justin Schuster, Head of Marketing info@blend.com (650) 550-4480 www.nafcu.org/blend Blend helps streamline the customer journey for any banking product from application to close. Its Digital Lending Platform is used by 250+ leading financial institutions to acquire customers, increase productivity and deepen customer relationships. NAFCU 2022 VENDOR DIRECTORY
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