Filed under: Current Issues in Credit Unions | Tags: Brent Dixon, CFPB, Crashers, loan participation, Lobby music, NCUA
Brent Dixon joins Faith, Hal, Guy, Katherine and Rob for a lively discussion of the following:
–Guy’s scoop on the loan participation reg.
–Legalities of lobby music.
–Big K Roundup.
Filed under: credit unions
By Linda J. Gray
Failure. What a concept. The very word can make the most successful people cringe. It carries with it the implication of negativity, of weakness and of remorse. But here’s a crazy thought: what if failure was promoted, embraced and even (dare I say it) expected in your work and in what you are doing? Now, let me be clear, I’m not defining failure as not following laws, FDCPA regs or any process necessary to do our jobs well. I’m defining failure as those ideas, thoughts or experiences that we are afraid to entertain simply because we might fail. With this disclaimer in mind, I ask you again, what if failure was promoted, embraced and expected in our work? What would happen?
Think about it for a minute. I’ll wait while you noodle on that……………………
Ready? Ok. Give. What have you pictured in your mind as the impending doom that we would experience with the worldwide acceptance and promotion of failure? Is it the collapse of the world as we know it? What if I were to say that the ONLY way to grow professionally and personally is to fail. That’s right. Flat out, full face-dive failure. I know, I know. Oh, I can just see the faces of some readers right now. I can picture the rolling eyes, the shaking head, and even the “what planet is she on?” comment. I’m okay with that. I understand that it goes against the grain of the typical corporate culture. After all, many successful businesses were built on the practice of being precise, exact and error-free. And certainly, acceptance of failure was not a concept taught in our society or in our collective childhoods. So, it is not lost on me that some may dismiss this concept of growth by failure to be too foolish to read on.
But for those who are still hanging with me, I ask you this: how liberating would it be to know that you could try any new idea, improve any old idea or conjure up any outrageous idea no matter how extreme or ridiculous it may seem? No backlash, no embarrassment, no retaliation. How endless are the possibilities if the handcuffs were removed and you were free to experience failure in all its glory? How many new ideas and new ways of doing business would be born? How much more successful COULD we be?
My challenge to you is this: “Don’t let failing to fail be your biggest failure. If you haven’t failed in the past 3 months, then you are not fully engaged in what you are doing.” – David Zinger (yes, that’s his real name)
Now go out there and fail. We’re counting on you. Because through failure, we discover new ways of being great.
Linda Gray is the Manager of Talent Acquisition at Weltman, Weinberg & Reis Co., LPA. She can be reached at 216.739.5728 and email@example.com. For more information, go to www.weltman.com or www.facebook.com/wwrcareers.
Filed under: credit unions
I was recently asked to speak in Michigan on the topic of sparking innovation at your credit union.
One of my assertions is that in order to build a culture of innovation, you must first recognize your innovative employees. So how do you spot the innovator in your midst? Here are a few traits to look for:
- Someone with a lot of diverse interests. Innovation is often taking two seemingly non-related things and recognizing the similarities in order to come up with an idea. People with exposure to different things, can do this better.
- Someone who thinks about what the future is going to look like and forms opinions. If you ask most people what the future will hold, they will give some rendition of “more of the same” (or they might say ‘cars will fly’, but that’s a gimme because we all grew up watching the Jetsons). Ask an innovator and they will say all sorts of things that most others think are wacky. Innovators are constantly wondering and hypothesizing about what’s around the next corner. They think about how technology will evolve, how consumer tastes will change and how processes will improve.
- Someone who is not conventional: Innovative people tend to be creative and revel in living a life less than ordinary. Look for the guy wearing the argyle socks.
- Someone who is persuasive and tenacious: It is one thing to come up with good ideas, but the truly innovative person can sell the rest of the company on the idea. Often, selling an idea takes persuasion and tenacity.
- Someone who shrugs off failure: An innovative person often tries things that don’t work. While getting my MBA, I had the opportunity to interview Jim Senegal, founder of Costco. He said his philosophy is to “Try a lot of things. Keep what works and throw out the rest.” Innovators aren’t overly concerned about making missteps. They don’t translate a failed experiment as being a failure themselves.
Once you’ve tagged someone as innovative, keep them in mind when you are trying to solve problems. If you pull innovators into discussions, you’ll engage them and probably find that they come up with a host of solutions that you never would have considered.
Shari Storm is Senior Vice President and Chief Marketing Officer of Verity Federal Credit Union and is the author of the book “Motherhood is the New MBA”, available here: http://www.amazon.com/Motherhood-New-MBA-Parenting-Skills/dp/0312544316/ref=sr_1_1?s=books&ie=UTF8&qid=1314126290&sr=1-1
By Hannah F. G. Singerman, Esq.
Durable powers of attorney are forms that survive incapacity of the maker so that the elected power-holder can make decisions for the incapacitated maker. More plainly, a durable power of attorney for financial matters gives one person the power to make decisions for another person even when, and often only when, the person giving the power is incapacitated.
Powers of attorney can be general or limited, can start immediately or only after an event like incapacity, but their purpose is to appoint a person to uphold the financial wishes of the maker just like how the person appointed under a durable power of attorney for healthcare purposes would uphold the maker’s healthcare wishes. Any person over the age of 18 who is of sound mind can execute such a power of attorney.
Powers of attorney can be extremely helpful to financial institutions. Often times when a person becomes incapacitated, it is hard to determine who should be making important financial decisions on his or her behalf, and thus what to do with funds in an account and all the rights and responsibilities that come with holding an account. This can open credit unions and banks up to either liability if the wrong person is given access to funds, or frustration if family members see the financial institution’s actions limiting access as hindrance instead of caution.
Therefore, it could be extremely helpful for credit unions to discuss powers of attorney with their members at the inception of the relationship. Upon a member joining the credit union, the credit union can learn of any existing powers of attorney and keep records of such. Further, credit unions can explain powers of attorney to new members and encourage powers to be executed with copies given to the credit union to maintain in connection with the member’s account. Credit unions can educate new members about the importance of powers of attorney as well with materials and discussions.
Further, existing members can be sent periodic notices with their yearly statements, asking if a new power of attorney has been executed so that the credit union’s files can be updated. This is important because often with changing relationships and life, new powers of attorney are executed, for example upon marriage, divorce, or death of the power-holder. Credit unions can also send literature regarding powers of attorney to their existing members to encourage them to execute and notify the credit unions of good, current, powers of attorney.
If powers of attorney can be encouraged and records of such can be kept by credit unions, then, when and if a member becomes incapacitated, their membership can be maintained smoothly without the credit union being opened to liability and without the family becoming frustrated. Powers of attorney can streamline a member’s financial life no matter what happens to the member and strength the credit union/member relationship, so that everyone is satisfied.
Does your credit union have one or more ATMs? Are you thinking about installing an ATM at a new location or updating an existing one? Do you know if those ATM’s can talk? Do you know if they are the right height? What about the key pad – is it in a twelve key ascending layout similar to a telephone key pad? If you believe these questions are absurd, you may be right. However, if you are not certain as to any of the above questions then it is important to take note as these are just some of the new regulations that took effect on March 15, 2011 as a result of the United States Justice Department’s (DOJ) update to the Americans with Disabilities Act (ADA). While the rules are not mandatory to date, they will be on March 15, 2012, which begs the question of whether or not these new regulations are addressing outstanding issues not covered under the previous provisions of the ADA or creating an entire separate set of issues.
In way of brief background, on September 15, 2010, the DOJ issued its final rules for ATMs under the ADA. These rules were crafted to create new accessibility standards at new or modified ATMs for visually impaired individuals. Among those regulations issued were requirements that all “affected” ATMs must be speech enabled for all banking and non-banking services to service visually impaired individuals; must have a reach of between fifteen (15) and forty-eight (48) inches to ensure individuals could easily access the audio input controls; have audio input controls that must be raised around surrounding surfaces; have a numeric keypad that is arranged in a twelve (12) key ascending layout such as telephone keys; have an ATM display screen that is located forty (40) inches above the center of the floor in front of the ATM; have Braille instructions in place to advise on how to activate the voice guided features; and that an ATM have a privacy screen that renders the screen blank for voice guidance users.
Unfortunately, the above listed requirements are only a sampling of the broad nature of the new rules issued by the DOJ. On top of the complexity of the regulations is whether or not a credit union’s ATMs are subject to the new requirements. As set forth in the new rules, any ATMs that are newly installed or altered on or after March 15, 2012 will be required to comply with the new 2010 standards. However, there is a safe harbor provision for ATMs that comply with the 1991 ADA standards. These machines will not have to be modified before March 12, 2012, until and unless they are altered after that date.
As is commonly the case with new government regulations, the question arises as to whether or not the additions are really necessary. The 1991 ADA standards required that instructions and all information for use be made “accessible to and independently useable by persons with vision impairments.” As it currently stands, most credit union ATM’s should be compliant with the 1991 standards. Ultimately, where the issues will arise will be if and when a credit union desires to update any of its ATMs after March 15, 2012. Although the 1991 standards require that ATMs must be accessible for the visually impaired, credit unions seeking to upgrade and enhance the quality of their machines for their members must face the economic realities of whether or not they can afford to have the necessary changes made so as to comply with the 2010 standards, which also require the exact same thing in that an ATM be accessible for the visually impaired.
The absurdity of the above situation is in fact the current state of affairs after the implementation of the 2010 rules. The ultimate impact of the 2010 rules is that members of credit unions may not have access to as many updated ATMs as opposed to the customer of a large bank. Additionally, the credit union movement as a whole faces the prospect of being unable to compete with other financial institutions who are better suited to weather the economic burdens of additional government regulations.
One of the other absurdities of the 2010 rules surrounds their enforcement. Sadly the ADA, like many other regulations, are vague and subject to various interpretations thus leaving credit unions in the position of having to make a good faith effort to comply with the new rules. Despite being responsible for the promulgation of the new rules, the DOJ will not be responsible for monitoring violations of the new rules. Rather, complaints are to be filed by individuals alleging that an ATM does not comply with the requirements of the ADA. In today’s litigious climate, the opportunity to challenge the new rules in court will likely result in an influx of lawsuits alleging violations, despite the fact that the 1991 rules already required that ATM’s be accessible for the visually impaired. New rules mean new lawsuits, and with new lawsuits comes additional exposure for credit unions who can not afford to get involved in long and drawn out court battles.
There is no dispute that visually impaired individuals should have an equal opportunity to enjoy modern conveniences like the ATM. The rules set forth in 1991 under the ADA provided that ATMs must be accessible for visually impaired individuals. In 2010 the DOJ issued new rules which reinforced that ATMs must be accessible for visually impaired individuals, however added additional requirements to be met. Government regulations, while “intended” to solve alleged problems, do not always achieve that goal and the issue of whether or not the 1991 rules under the ADA, as applied to ATMs, were continuing to achieve their stated goals is debatable, particularly as the growth of new technologies have enabled a substantial portion of existing ATM’s to provide the visually impaired with the access previously guaranteed by the 1991 rules under the ADA. However, that debate effectively ended with the issuance of the 2010 rules and unfortunately of all of the financial institutions, credit unions, their members and the movement as a whole are at a greater risk of being impacted by the fallout from what can arguably be described as absurd regulations that do not truly improve the accessibility of the visually impaired.
Over the past few years, deficiencies in lenders’ and servicers’ processes, procedures, controls, and staffing resulted in numerous inaccurate affidavits relating to its execution and documentation. Consequently, foreclosure and debt collection practices have come under rigorous scrutiny by federal and state governmental authorities, courts and the media. Courts are continuing their focus on the supporting affidavits and are more willing to entertain debtor claims of faulty documentation. To avoid the delays and other issues this may cause, it is important to understand the elements and operation of the process.
An affidavit is a type of voluntary verified or formal sworn statement of fact signed under penalty of perjury by an individual and witnessed, as to the authenticity of the signer’s (affiant’s) signature, by a taker of oaths, usually a notary public. Any person having the intellectual capacity to take an oath or make an affirmation and who has knowledge of the facts that are in dispute may make an affidavit, but the affiant must possess the level of knowledge of the information that they are attesting to in the affidavit. An individual familiar with the matters in question may make an affidavit on behalf of another, but that person’s authority to do so must be clear, so when executing an affidavit, the affiant is verifying that they have authority to sign the affidavit and their personal knowledge of the facts.
An oath is essential to an affidavit. The statement of the affiant does not become an affidavit unless the proper official administers the oath. A person who takes an oath or affirmation in connection with an official proceeding may be prosecuted for perjury should he or she fail to be truthful. The jurat is typically performed on affidavits, depositions and interrogatories. For a jurat, the signer must appear in person at the time of notarization to sign the document and to speak aloud an oath or affirmation promising that the statements in the document are true.
It is important to remember that the notary is screening the signer for identity, volition and awareness, but is not verifying the truth, form or contents of an affidavit that he or she notarizes.
A widely endorsed notary’s best practice is to record details of the notarization in a notary log. Keeping such a chronological journal is a requirement of law in some jurisdictions, and some states even require document signers to leave a signature and a thumbprint in the notary’s journal. Each state has certain requirements, and it is important to know these rules as documents that are valid in one jurisdiction may not be properly executed in another.
If you have any questions on this matter, please contact Mr. David Wolfe, Esq. or Mr. Michael Rich, Esq. of Weltman, Weinberg & Reis Co., LPA. David is an associate in the Consumer Collections Group of the Michigan office. He can be reached at 248.362.6142 and firstname.lastname@example.org. Mike is a managing attorney in the Real Estate Default Group in the Detroit office for Thoroughbred Title Agency, Inc., an affiliate of WWR. He can be reached at 248.786.3137 and email@example.com.
Filed under: foreclosure
In a recent article dated January 17th, I examined the new e-filing system in some major Ohio counties and its resulting increase in the amount of time that it now takes to withdraw a foreclosed property from a sheriff sale. In response to some negative feedback it received, the judges in Franklin County modified their process in a manner that could improve the advance time period for lenders to comfortably request a withdrawal by one day. Under the court’s initial plan, a motion to withdraw a sale was sent to the judge’s office assigned that particular case and, if that judge or key staff member was out, a delay occurred.
Under the new practice, the clerk’s office forwards the motion to withdraw sale to that day’s assigned duty judge who makes certain to review the motion and, if proper, approves the order withdrawing the sale that same day. Based on this change, a lender can now comfortably expect that a request made at least 72 hours, or the Tuesday morning before a sale on Friday, will be withdrawn. Lenders can appreciate this action by the Franklin County judges to more efficiently manage the process.
If you have any questions on this matter, please contact Mr. David W. Cliffe, Esq. David is an associate in the Real Estate Default Group of Weltman, Weinberg & Reis Co., LPA, focused on foreclosure and eviction services. He can be reached at 513.333.4064 and firstname.lastname@example.org.
Recent holdings in the Southern Bankruptcy District of Florida and elsewhere demonstrate that debtors are seeking to expand their ability to strip off junior liens on real property in a Chapter 13 reorganization after having received a prior Chapter 7 discharge, and the Courts are beginning to step out of the way.
Since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) in 2005, most courts have ruled that debtors in so-called “Chapter 20″ cases (in which a debtor who has received a discharge in a Chapter 7 bankruptcy files a subsequent Chapter 13 petition for relief within the ensuing 4 years) cannot strip off a wholly undersecured junior lien on real property. BAPCPA was enacted in part to reform the eligibility for personal bankruptcy and prevent abuse of the bankruptcy process.
“Lien stripping” is a process authorized by the Bankruptcy Code that permits a debtor to extinguish a junior lien on real property when the equity in the property is less than the amount of the first mortgage. In brief, because there is no equity to secure the junior lien, the Code permits the Court to extinguish the lien upon the debtor receiving a discharge through the bankruptcy process, leaving the junior lien holder with only an unsecured claim. Thus, the second mortgage holder must aggressively defend an attempted lien strip, or it risks a near complete loss.
“Chapter 20″ is a term for a debtor who has already availed himself of relief under Chapter 7, which allows him to liquidate his assets to satisfy his debts to the greatest extent possible, upon which he receives a discharge canceling his personal liability for his debts. The debtor then files another bankruptcy petition under Chapter 13, which allows him to reorganize and repay his remaining debts through a 3- or 5-year plan. However, under the revisions enacted in BAPCPA, if the debtor files a Chapter 13 within four years of receiving a Chapter 7 discharge, he/she is not eligible for another discharge.
Courts have not allowed Chapter 20 debtors to strip off junior liens because such a debtor is ineligible for a discharge in the Chapter 13 case. Previously, Florida Bankruptcy Courts have held that the plan confirmation requirements of the Bankruptcy Code do not allow confirmation of any plan that does not provide for secured claimants to retain their lien until the debtor receives a discharge. This requirement was applied to attempts to strip off junior liens in Chapter 20 cases because if a secured claimant must retain its lien through discharge, and the debtor was ineligible, then the secured claimant cannot be stripped and must retain its lien and survive the completion of the Chapter 13 plan.
However, recent decisions in several other circuits outside of Florida cast doubt on this precedent. These decisions hold that there is no specific requirement in the Bankruptcy Code conditioning the right to lien strip on the debtor’s eligibility for discharge. Additionally, as argued in In re Vigo in the Southern District of Florida, where a debtor’s personal liability on an undersecured junior mortgage has been discharged in a Chapter 7, eligibility for discharge in the subsequent Chapter 13 would place a redundant and unnecessary requirement on the debtor’s ability to lien strip.
Although the Courts appear more willing to entertain these novel arguments for lien stripping in Chapter 20 cases, In re Vigo is the first case in the Southern District of Florida that we are aware of where the Court has allowed such a lien strip. It is not clear whether the granting of such a motion was due to the absence of opposition from the secured creditor, or because the Court agreed with the novel argument presented, but it remains as important as ever that junior lien holders continue to assert their rights and oppose such attempts. Recent prior cases in the Southern District of Florida have held the opposite of Vigo, that ineligibility for discharge is a threshold consideration that precludes avoidance of wholly unsecured junior liens. Under this and other similar decisions, the wholly unsecured junior lien holder retains its lien until the debtor pays off the underlying debt pursuant to nonbankruptcy law, a much better result for the secured creditor.
Secured creditors’ rights are being threatened by this expansion of a debtor’s rights. The economic realities of underwater properties and wholly unsecured junior mortgages and equity lines are being exacerbated by unopposed efforts of debtors’ attorneys making novel arguments to extinguish secured debt. The vigilant secured creditor can stem this debtors’ rights boom by relying on precedent and challenging the Chapter 20 debtor’s lien stripping efforts.
 In re Vigo, Case No. 11-32092-EPK (Bankr. S.D.Fla. January 18, 2012)
If you would like more information on Chapter 20 bankruptcies, the lien-stripping process and your rights as a secured creditor under the Bankruptcy Code, please contact Mr. Mark E. Steiner, Esq. Mark is an associate who practices in the Real Estate Default Group of Weltman, Weinberg & Reis Co., LPA located in the Ft. Lauderdale, FL office. He can be reached at 954.740.5276 and email@example.com.
Filed under: Consumer Financial Protection Bureau
Last year the Consumer Financial Protection Bureau (CFPB) created the “Know Before You Owe” initiative in order to educate borrowers about the true cost of consumer loans and give them the tools to shop for the financial products that best fit their needs. Now the CFPB is using “Know Before You Owe” to get feedback from the public on how disclosure forms and other legal documents can be redesigned—both in terms of content and visual presentation—to more effectively communicate the information that consumers need to make an informed decision about financial products.
Consumers are not the only ones who should have an interest in “Know Before You Owe”. The project could have a significant impact on the future of legal compliance for consumer lenders. The Dodd-Frank Act gave the CFPB the authority to prescribe rules that ensure that consumers receive full, accurate, and relatively easy-to-understand disclosures when they are considering a consumer financial product or service. The Act also provides that the CFPB may create model forms that lenders can use to ensure compliance with the new rules, but these model forms must be “validated through consumer testing”. The “Know Before You Owe” initiative will help the CFPB accomplish this consumer testing, but it will also allow lenders to view the proposed model forms and provide the CFPB with feedback from an industry perspective.
The first “Know Before You Owe” project is mandated by the Dodd-Frank Act: the creation of a concise mortgage disclosure form that consolidates the Truth in Lending disclosures and the RESPA HUD-1 Settlement Statement. The CFPB is currently testing two prototype disclosure forms named “Mimosa” and “Sassafras.” Feedback about “Mimosa” and “Sassafras” will be used to develop another model form to be released in the coming months. The CFPB has indicated that it wants to provide “lenders and settlement agents with a document that is easy to use and reduces unneeded regulatory burden,” so industry suggestions will also play a role in shaping the next proposed form.
“Know Before You Owe” has also proposed redesigns of student financial aid offers and credit card agreements. The CFPB says the financial aid offer form is only a “thought starter” and that the credit card agreement is “not a model form,” but these may be the next areas of focus for the CFPB.
Lenders interested in viewing and commenting on the proposed forms should go to the CFPB website at www.consumerfinance.gov.