What Would Derek Jeter Do?

Normally I don’t bring up that I’m a Yankees fan. It doesn’t go over well. But it’s that exciting time of year, when my team has won the division and is looking good heading into October.

It is the Yankee’s competitiveness that makes them so fun to watch. And captain Derek Jeter is a great example. He does it all. He has won 5 Gold Gloves and five World Series, and he recently became a member of the 3,000 hits club. He takes winning (and the Yankees) to a new level.

Derek JeterYou can see Derek Jeter’s competitiveness in many aspects of his game. For example, with each pitch where he doesn’t swing, he exaggerates getting out of the way of the ball by throwing out his backside. It looks kinda funny, but he does this to influence the ump’s call and get more calls in his favor.

When he is next up to bat, he stands back against the wall, inching closer and closer behind the umpire and batter. Why? He’s trying to get a sneak peak at the pitcher’s stuff to be better prepared when he gets up.

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Lessons from the Hike to False Kiva

My wife Allison and I got back from a vacation in Moab, Utah a few weeks ago – yes, contrary to popular belief Fred Becker does let me take a day off now and again – and I wanted to share a unique experience we had in Canyonlands National Park, which is is spectacular. You’ve seen some of the more popular vistas on TV and in movies, from Thelma and Louise to Indiana Jones, but there are many others that are equally amazing and will make your jaw drop. On our first night we went into Moab for dinner, wandered into Tom Till’s photo gallery, and saw an amazing picture entitled ‘Ruin in a Cave’. The description said it was from a hike to ‘False Kiva’ in Canyonlands, and was one of the most distinctive pictures we had ever seen.  We decided then and there to add that hike to our must-do list.

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10 Best Practices of Compensation Oversight by Your Credit Union Board

Serving on a credit union board has gotten more complicated in recent years, based on new and evolving NCUA requirements for directors.  More specifically, rule 701.4 from NCUA dictates that directors must understand the credit union’s specific financial and accounting activities and their various risks from credit and liquidity to compliance and reputation.  There are many questions on the specifics of the rule and how NCUA plans to measure compliance with it.  You are not alone if you’re wondering “how much training is required?” “what exactly does financial literacy mean to NCUA?” and, most important, “what do the regulators expect?”

A recent webcast we recorded with Jim Patterson, partner with Sherman & Patterson, Ltd. and Jen Jackson, Vice President of Compliance and Information for Burns-Fazzi, Brock, may help shed some light on this topic.  My ears perked up when Jim went through a list of 10 best practices that credit union boards should consider when overseeing compensation. Compensation oversight is an important part of rule 701.4, considering the board sets the compensation of the credit union executives. I love lists, and this one made sense to me in what can sometimes be a mess of fuzzy guidelines.

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The New World of Non-Interest Income

Sounds like the beginning of a bad joke – what do you get when you cross a nearly flat yield curve, NCUA assessments, toxic legacy assets and burdensome new regulations with a limping economy that is impeding loan growth?

Answer – today’s credit union business environment.

So where does a credit union look for long-term growth today? The answer lies in non-interest income.

Historically, many credit unions have relied on lending as a primary source of income, which has built strong member relationships. There is a tremendous untapped opportunity to leverage those existing member relationships to offer solutions that members are purchasing elsewhere.  Growing your percentage of non-interest income also diversifies sources of revenue.

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Is The Fox Guarding the Henhouse Cheating Your Employees With Hidden and High 401(k) Fees?

I know that employee benefits can be complex and hard to understand, but I wanted to flag an issue that may be needlessly costing your employees as much as 50 basis points on transfer and between 20 and 25 basis points a year on their 401(k) investments.

It is not uncommon for credit unions without the requisite in-house expertise to hire a consultant to look at outside options for their employer-sponsored 401(k) plans. Usually the process involves an RFP, an evaluation of the responses, and presentations to the credit union leadership by the finalists.  Credit union managers think they have gone through an impartial and unbiased assessment of what is best for the credit union.

But appearances can be deceiving.  Often the consultant that the credit union turns to will receive hefty initial and ongoing fees directly from the 401(k) provider.  These fees can be substantial – for a credit union with $20 million in its employer-sponsored 401(k), first year fees to consultants can run $125,000 or more, and ongoing fees can run $25,000 or more, depending on who the business is placed with.

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