Loan Trends - Defense Credit Union Council

Transcription

42nd Annual
Defense Credit Union Council
Overseas Subcouncil Meeting
Co-Hosted by
Keesler FCU & DCUC
May 4—7, 2015
Dublin, Ireland
42nd Annual DCUC Overseas Subcouncil Meeting
Co-hosted by Keesler FCU and DCUC
May 4 – May 7, 2015
The Westbury Hotel
Dublin, Ireland
AGENDA
Monday, May 4
1300 – 1600
1700 – 1930
_________ Location
Registration Desk Open
Panoramic Bus Tour of Dublin & Welcome Reception
Meet in lobby at 1645; buses depart from Clarendon St. entrance
Grafton Foyer
Tuesday, May 5
0730 – 0830
0830 – 0835
0835 – 0900
0900 – 0940
0940 – 1025
1025 – 1045
1045 – 1130
1130 – 1215
1215 – 1230
1230 – 1330
1400 – 1700
1730
Registration Desk Open
Grafton Foyer
Opening Remarks
Mr. Arty Arteaga, President/CEO, DCUC
Grafton Suite
Mr. John Goff, President/CEO, Keesler Federal Credit Union
Welcome to Dublin
Mr. Brian McCrory, Board of Directors
Mr. Ed Farrell, Interim CEO
Irish League of Credit Unions
National Credit Union Administration Update
The Honorable Debbie Matz
Chairman, NCUA
Legislative Update
Ms. Mary Dunn
Attorney
Networking Refreshment Break
Grafton Foyer
Financial Management during Fiscal Uncertainty
Grafton Suite
The Honorable Robert M. Speer
Assistant Secretary of the Army (Financial Management & Comptroller)
Armed Forces Financial Network Update
Mr. John Broda
President/CEO, Armed Forces Financial Network
Morning Wrap-up…Mr. Arty Arteaga
Lunch for all delegates and guests
Wilde Restaurant
Networking & offsite activity
Guinness Tour
Clarendon St Entrance
National Museum of Ireland
Grafton St Entrance
Dinner on your own and evening to explore Dublin
Wednesday, May 6
0830 – 0835
0835 – 0905
0905 – 0945
0945 – 1015
1015 – 1030
1030 – 1100
1100 – 1130
1130 – 1215
1215 – 1230
1230 - 1330
1400 – 1700
1900 – 2200
_________ Location
Administrative Remarks
DFAS & Overseas Military Banking Program Update
Mr. Bill Hawbecker
Director, DoD Bank & Credit Union Operations, DFAS
Department of the Army Credit Union Liaison Update
MAJ Emma Parsons
Army Banking Officer, USAFMCOM
USAREUR Credit Union Liaison Update
CPT Juan Pratts
USAREUR Banking Officer, 266th Fin Mgt Center
US Air Force Europe and Air Forces in Africa Update
Mr. Keith E. Buchholz
Deputy Director
Financial Management & Comptroller, USAFE-AFAFRICA
NAVEUR Credit Union Program Manager Update
Dr. Luigi Amato
Banking Officer, Navy Region Europe, Africa, Southwest Asia
CUNA Mutual Group Update
Mr. Thomas Heyden
Director, National Account Sales, CUNA Mutual Group
Networking & offsite activity
Walking Tour of Dublin
Casual group dinner and entertainment at Old Jameson
Grafton Suite
Grafton Foyer
Wilde Restaurant
Thursday, May 7
0830 – 0835
0835 – 0930
0930 – 1015
1015 – 1035
1035 – 1115
1115 – 1130
1130 – 1215
1215 – 1330
1330 – 1800
1830 – 2200
Administrative Remarks
Economic Update
Mr. Mike Schenk
VP, Economics Department, CUNA
Market Trends in Digital Banking and Payments
Ms. Nancy J. Langer
Chief Product Officer, FIS
DCUC Update
Mr. Arty Arteaga
Overseas Subcouncil Executive Session
Mr. Arty Arteaga
Optional Activities on your own
Gala Dinner at Luttrellstown Castle
Grafton Suite
Grafton Foyer
Wilde Restaurant
Friday, May 8
0945
1000 – 1700
Meet in Lobby for Optional Tour
Optional Tour ---“Garden of Ireland”
Clarendon St Entrance
42nd Annual
Participants
Dublin, Ireland
42nd Annual DCUC Overseas Subcouncil Meeting Attendees
Name (Last, First)
Amato, Dr. Luigi
Bartelle, Michael
Bennett, Chad
Bilbrey, Mike
Bosack, Steve
Breland, Martin
Broda, John
Brown, Gerald
Buchholz, Keith
Cardile, Frank
Organization
USN CNREURAFSWA
Andrews FCU
AFFN
Guest
NCUA
Tower FCU
AFFN
Andrews FCU
USAFE‐AFAFRICA/FM
Andrews FCU
Chief of Staff
President/CEO
President/CEO
Director
Deputy Director, FM & Compt.
Board Chair
Childers, Cindy
Keesler FCU
Board Member
Cody, Edward
Dunn, Mary Mitchell
Emory, Derald
Fallis, Jack
Farrell, Ed
Floyd, Denise
Goff, John
Hanchett, David
Hawbecker, Jr., William
Pentagon FCU
Hayes, Jim
Hernandez, Col. Anthony
Heyden, Thomas
Hollingsworth, James
Joyce, Thomas
Kasold, Bruce
Kimmel, Patricia
Langer, Nancy
Andrews FCU
319th Mission Support Group
Grand Forks AFB
CUNA Mutual Group
Keesler FCU
Service CU OS HQ
Pentagon FCU
Belvoir FCU
FIS Global
Board Chair
Attorney
Director
President/CEO
Interim CEO
President/CEO
President/CEO
SCU Board of Directors
Director, DOD Banking
& CU Programs
President/CEO
Commander
Manos, Zaharenia J.
Martin, Vonda
Matz, Debbie
McCrory, Brian
Mitchell, George
Moss, Richard
Padak, Frank
Pang, Fred
Parsons, MAJ Emma
Perrone, Jamie
Pratts, CPT Juan C.
Quinn, James
Navy FCU
Keesler FCU
NCUA
Keesler FCU
Keesler FCU
Scott CU
Pentagon FCU
Department of the Army
Keesler FCU
Department of the Army
Pentagon FCU
Andrews FCU
Global CU
Fort Sill FCU
Keesler FCU
Service CU
DFAS
Position
Banking Officer NAVEUR
VP OS Operations
Vice President
Director, Natl Account Sales
Board Chair
VP OS Operations
Board Director Emeritus
President/CEO
Chief Product Officer
Regional Manager Europe
Executive Assistant
Chairman
ILCU Director
SVP/CRO
Board Member
President/CEO
Board Member
Army Banking Officer
Board Member
USAREUR Banking Officer
Director
Guest Pamela Bartelle
Maureen Bilbrey
Maria Bosack
Constance Breland
Lana Brown
Michelle Tilford
Barbara Cardile
Claudia Cardile
Elizabeth Adams
Kimberly Durgin
Heather Boudreaux
Stephanie Irby
Cathy Cody
Mike Dunn
Martha Emory
Deana Fallis
Robert Floyd
Cyndee Goff
Yesceni Hayes
Jennifer Hernandez
Monica Heyden
Cheron Hollingsworth
Patricia Kasold
Rich Freeman
Marty Langer
Bret Langer
Marshall Matz
Sally Mitchell
Suzy Moss
Robin Padak
Brenda Pang
Bob Perrone
Claudia Hume
Name (Last, First)
Rivera, Jon
Roche, Jan
Rolando, John
Romanelli, Philip
Scearce, Roger
Schenck, James
Schenk, Mike
Schwartz, Marlene
Simmons, Gordon
Speer, Robert M.
Starkey, Mary
Stith, Lonnie
Turner, L. Dail
Valdez, Dominique
Van Rossum, David
Vohra, Shashi
Whiting, Joanne
Organization
Keesler FCU
State Department FCU
Pentagon FCU
Pentagon FCU
Andrews FCU
Pentagon FCU
CUNA
State Department FCU
Service CU
HQ Department of the Army
Global CU
Pentagon FCU
Andrews FCU
Keesler FCU
Service CU
Pentagon FCU
Service CU
Position
Board Member
President/CEO
Director
Board Member
Board Treasurer
President/CEO
VP Economics & Statistics
Chairman
President/CEO
Assistant Secretary of the Army
EVP/COO
Treasurer/Director
Director
AVP, UK
Chief Administration Officer
EVP Affiliated Businesses
SCU Board of Directors
DCUC Staff
Arteaga, Arty
Hernandez, Jennifer Merlo, Beth
Sked, Janet
DCUC
DCUC
DCUC
DCUC
President/CEO
IT Specialist
Director for Administration
Conference Manager
Page 2
Guest Kent Elizabeth Gladstone
Debbie Scearce
Lisa Schenck
Linda Simmons
Maggie Speer
Earl Starkey
Hope Davis
Gerardo Valdez Jr.
Patricia Van Rossum
Vibha Vohra
Russel Hilliard
Carol Arteaga
Anthony Hernandez
The Defense Credit
Union Council wishes to
thank our sponsors for
their continued support
42nd Annual
Tours/Events
May 4-7, 2015
Dublin, Ireland
Networking & Off-Site Events
Dublin, Ireland
May 4—8, 2015
“Historic
and
,
mystical
”
Welcome to Dublin
Dublin may be one of Europe’s oldest cities, but it has all the attractions of a modern city. While
retaining its historical and cultural charms, the city offers trendy bars, elegant restaurants and stylish
cosmopolitan shops. Dublin ranks among the top tourist destinations in Europe and with a wealth of
historical sites, many within walking distance of each other, Ireland’s largest city provides a sense of
history, culture, music and an energy that is truly unique. For business travelers, Dublin is not only a
beautiful and interesting city to experience, but also the perfect place to hold a meeting! We are sure
you will agree.
Monday, May 4
At a Glance
1700—1930
Panoramic Bus Tour and
Welcome Reception
Monday, May 4
Bus Tour &
Welcome Reception
1700
Tuesday, May 5
Guinness or Museum Tour
1400
Wednesday, May 6
Dublin Walking Tour
1700
Jameson Distillery Shindig
1900
Thursday, May 7
Luttrellstown Castle
Gala Dinner
1830
Before our Welcome Reception begins, join us
for a half hour bus tour of the city so that you
can get a feel for the layout and see some places
where you might like to return. Afterwards, our
buses will drop us at the famous Banking Hall in
the Westin Dublin Hotel. Dating back to 1863,
The Banking Hall used to be the main hall of the
old Bank of Ireland, previously the Allied Irish
Bank. Here we will network with old friends and
new and enjoy some delicious appetizers before
walking back (just a few blocks) to The Westbury.
Tours meet in the hotel lobby 15
minutes before departure times.
For tours, be sure to wear
comfortable clothing and shoes.
Tuesday, May 5
1400—1700
Choice of One Tour:
Guinness Storehouse
Guinness Storehouse’s dramatic story began
over 250 years ago and ends in Gravity, the bar
in the sky, with a complimentary pint of
Guinness and an astonishing view of Dublin.
Located in the legendary St. James's Gate
Brewery since 1759, in days gone by it was a
fermentation plant, but today it's been
transformed into Ireland's number one
international visitor attraction.
Wednesday, May 6
1400—1700
Dublin Walking Tour
Visit three of the most important sites in Dublin:
St. Patrick’s Cathedral, Christ Church Cathedral,
and Trinity College.
St. Patrick’s Cathedral, built in honor of Ireland’s
Patron Saint, was completed between 1200 and
1270, and is the largest church in all of Ireland.
Christ Church Cathedral is even older, dating
back to c. 1030. At the time of its construction it
was the only church to lay within the walls of
the old Viking City.
National Museum of Ireland
Just a short walk from the Westbury Hotel, this
famous museum dates back to the 1880s.
Exhibits include items of Ireland’s Bronze Age as
well as displays of prehistoric life in Ireland and
the time of the Vikings. A private guide will lead
the tour.
At Trinity College, Ireland’s
oldest and most famous college,
we will see the Book of Kells,
which dates back to the 8th
century and is considered a
masterpiece of early Christian
art.
After our walking tour, we will return to the
hotel to freshen up and then depart by bus for a
short ride to our dinner location.
Old Jameson Distillery
1900—2200
Shindig
A guided tour of the Old Distillery, just north of
the River Liffey, will be followed by dinner and
entertainment that includes traditional Irish
music and dancers. Built in 1780, the Distillery
was once considered one of the largest and
finest distilleries in the world. Today it houses
an award-wining visitor center.
Thursday, May 7
1830—2200
Gala Dinner at Luttrellstown Castle
Before our Gala Dinner you will have time to explore this gem, located just 20 minutes from
downtown Dublin in the lush Liffey Valley and surrounded by a heavily wooded estate of over 500
acres.
Its history dates back to 13th century when the land was granted to Sir Geoffrey de Luterel during
the reign of King John of England. Sir Geoffrey Luttrell, the 5th Lord Luttrell, began construction in
the 15th century. The exact age of the castle is unknown; its architectural style progresses from
medieval style to Gothic thus making it difficult to separate the present structure from the earlier
building. Today, its heritage, grandeur, and elegance have made Luttrellstown a favorite destination
among celebrities and international visitors.
42nd Annual
Tuesday
May 5, 2015
Dublin, Ireland
Brian McCrory
League Board Member and WOCCU delegate
Irish League of Credit Unions (ILCU)
Brian McCrory is in his sixth year on the Board of the Irish League of Credit Unions having
been elected in 2009. Brian’s current term of office on the League Board runs until April
2017.
Prior to his election to the League Board, Brian served on the League Supervisory Committee
for six years, and was Chairman from April 2006 – April 2007.
Brian has served as League Treasurer during his time on the League Board and is currently
Chairman of the ILCU Northern Ireland Committee. Brian also serves on the ILCU
Legislation Committee, the ILCU Administration Committee, and chaired the recent ILCU
National Lending Group.
Brian is a Director of ECCU, a wholly owned subsidiary Assurance Company of ILCU.
Brian is currently on the WOCCU Board – he was co-opted in early 2010 and elected to the
Board for a two year term in July 2010, 2012 and again in 2014. Brian has been an ILCU
WOCCU delegate since January 2010.
He also serves as Deputy Chairperson of the Prudential Regulatory Authority Practitioner
Panel, Bank of England.
Brian is also the League’s representative at the European Network of Credit Unions (ENCU).
Brian is a member of BTCU Limited.
Brian has also served in a variety of Advisory Committees to the First and Deputy First
Ministers Office in Northern Irelands Legislative Assembly. In addition to having been a
community activist in the local politics of Northern Ireland he has also served as a director of
the Northern Ireland Social Economy Forum.
W E LO O K AT TH I N G S D I F F E R E NTLY
Overview of Irish Credit Union Movement and
Current Statistics
Brian McCrory ILCU Director
AGM 2013
Introduction to Credit Unions in Ireland
– Member owned Community based financial cooperatives
– Not for Profit but for Service
– Independent, stand-alone legal entities
– Members share a Common Bond
• Geographical or workplace/employer
– Managed by a voluntary Board of Directors
• Virtually all credit unions also have paid
employees
– Ethos – equality, self-help
History of Credit Unions in Ireland
• First credit union was founded in 1958
• Primary purpose was to provide access to credit for
those who couldn’t otherwise access it
• The Irish League of Credit Unions (ILCU) was
established in 1960 to act as a Trade & Representative
body and provide services to credit unions
• Rapid expansion in 1960s and 1970s and by 1979 there
were 456 credit unions in Ireland
ILCU affiliated Credit Unions
• Today there are 458 credit unions affiliated to
the Irish League of Credit Unions (ILCU)
• 362 in the Republic of Ireland and 96 in Northern
Ireland
• 3.3 million members
• At a movement level, (ROI+NI) at December
2014 total assets of Irish League credit unions
were €14.4 billion, split between €12.8 billion in
the Republic and €1.6 billion in Northern Ireland
4
ANSAC Credit Union
•
•
•
•
•
•
•
Army, Naval Service and Air Corps credit union
Based in Dublin
Chairman Richard Dillon, CEO Martin Cosgrave
Assets
€27,334,816
Loans
€14,443,502
Savings
€21,788,688
Members
7,639
Regulation & Legislation
• Republic of Ireland
– Regulated by Registrar of Credit Unions, with the
Central Bank of Ireland
– Governed by Credit Union Act 2012
• Northern Ireland
– Regulated by Financial Services Authority and the
Prudential Regulatory Authority
– Currently governed by Credit Union Order, new
legislation pending
6
Challenges
• Falling loan books leading to reduced loan
interest
• Reduced Investment Income
• Personal Insolvency
• Rationalisation Agenda of the Central Bank
• Aging membership, difficulty in attracting
young members due to technology
deficiencies
• Difficulty attracting volunteers
7
Opportunities
• Banking Failures - mistrust, branch closures, increasing fees
• Large amount of funds available for loans if demand picks up
– Lending to SMEs
– ILCU constituted a lending group to promote lending
– Home Loan Working Group
– Social Housing
• CUSOP
– Payments Institution to provide payments hub for credit
unions
– Wholly owned by credit unions
– Provide current accounts, debit cards etc.
8
Q&A
9
The Honorable Debbie Matz, Chairman
Debbie Matz was nominated by President Barack Obama to serve as the
eighth board chair of the National Credit Union Administration (NCUA).
After confirmation by the U.S. Senate on August 7, 2009, she was sworn in
as NCUA Chairman on August 24, 2009.
Mrs. Matz served as an NCUA Board member from January 2002 to October
2005 and is the first NCUA board member to return for a second term. She
was nominated for her first term by President George W. Bush.
As NCUA Chairman, Mrs. Matz heads the independent agency overseeing the regulation and
supervision of federal credit unions and the National Credit Union Share Insurance Fund
(NCUSIF), which protects accounts at more than 6,200 federally insured credit unions serving
nearly 100 million members and managing more than $1.1 trillion in assets.
Chairman Matz led NCUA through the worst financial crisis since the Great Depression. She
oversaw the reform of the corporate credit union system, raising nearly $30 billion from the sale
of NCUA Guaranteed Notes to provide liquidity to the system. She challenged Wall Street
firms that sold securities with inflated ratings to corporate credit unions, winning over $1.75
billion in legal settlements so far, with 16 lawsuits still pending.
Chairman Matz also instituted NCUA’s Regulatory Modernization Initiative, updating and
streamlining dozens of rules, legal opinions, and policies to remove unnecessary burdens while
protecting safety and soundness. During Chairman Matz’s term, credit unions’ performance has
improved in all key metrics, from net worth and return on assets to delinquencies and chargeoffs.
In addition to chairing the three-member NCUA Board, Mrs. Matz is one of 10 voting members
of the Financial Stability Oversight Council (FSOC). FSOC was established by the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010 to identify risks to the financial
stability of the United States, to promote market discipline, and to respond to emerging threats.
Mrs. Matz also serves on the Federal Financial Institutions Examination Council (FFIEC),
which she chaired from 2011 to 2013. FFIEC was established by Congress to prescribe uniform
principles and standards for the federal examination of financial institutions. Mrs. Matz also
represents NCUA on the U.S. Treasury’s Anti-Money Laundering Task Force.
Additionally, Mrs. Matz served two terms on the NeighborWorks America Board of Directors.
Established by Congress, NeighborWorks America is one of the country’s preeminent nonprofits in providing affordable housing and community development.
Prior to becoming NCUA Chairman, Mrs. Matz served on President Obama’s Economic
Transition Team. Previously, she was the Executive Vice-President/Chief Operating Officer of
an $800 million federal credit union. Mrs. Matz was appointed by President Bill Clinton to
serve in the U.S. Department of Agriculture, where as Deputy Assistant Secretary for
Administration, she oversaw the administrative arm of the 100,000-employee agency.
Mrs. Matz worked on Capitol Hill for 12 years in various capacities, including nine years as an
economist with the Congressional Joint Economic Committee.
She received a master’s degree from George Washington University and a bachelor’s degree
from Cornell University. A native New Yorker, she is married to Marshall Matz, has two grown
children and resides in McLean, Virginia.
Debbie Matz, Board Chairman
National Credit Union Administration
NCUA Update
Presentation to
Dublin, Ireland
May 5, 2015
StateoftheSystem:
CreditUnionsHaveRecovered
Current Metrics Reach Pre‐Crisis Norms
Credit Union Data from Pre‐Crisis to Post‐Crisis
Return on Assets
Net Worth Ratio
U.S. Credit Unions
Year‐End 2007
U.S. Credit Unions
U.S. Credit Unions
Year‐End 2009
Year‐End 2014
3RD Qtr. 2012
Year‐End 2009 Year‐End 2010
0.63 %
0.20 %
0.80 %
11.4 %
9.9 %
11.0 %
Loan Growth
6.6 %
1.1 %
10.4 %
Delinquency Ratio
0.9 %
1.8 %
0.9 %
Net Charge‐off Ratio
0.5 %
1.2 %
0.5 %
Membership Growth
1.3 %
1.5 %
3.1 %
NCUA Update
1
StateoftheSystem:
OverseasSubcouncil CUTrends
Performing Better than Most National Averages
Credit Unions’
Key Metrics
Return on Assets
Subcouncil CUs
Year‐End 2009
Subcouncil CUs
Year‐End 2014
0.75%
1.09%
All US CUs
Year‐End 2014
3RD Qtr. 2012
0.80 %
Net Worth Ratio
9.4%
11.1%
11.0 %
Loan Growth
1.3%
14.2%
10.4 %
Delinquency
1.4%
0.7%
0.9 %
Net Charge‐offs
1.5%
1.0%
0.5 %
Member Growth
6.8%
10.1%
3.1 %
NCUA Update
2
IssuesonOurRADAR…
…whichshouldalsobeonyours
 Cyber Threats
 Capital Outliers
 Interest Rate Risk
 Possible Rule Changes Governing Financial Services to Military Members
NCUA Update
3
CyberThreats
• Cyber Thieves
– Target: Large Institutions
– Tactic: Attack Individual Systems
– Objective: Steal Money
• Cyber Terrorists
– Target: Vulnerable Entry Points (Small Credit Unions)
– Tactic: Infiltrate Interconnected Systems
– Objective: Cripple or Destroy the U.S. Economy
NCUA Update
4
CyberSecurity– WhatCanYouDo?
Ensure your CU systems are secure.
Implement risk mitigation controls: vendor due diligence, strong password policies, proper patch management, employee training, and network monitoring.
Get educated. Share cyber‐security best practices.
Participate in local, state and national information‐
sharing forums. NCUA Update
5
http://www.ncua.gov/Resources/Pages/cyber‐security‐resources.aspx
NCUA Update
6
QuestionstoAsk
aboutCyberSecurity
 What are the potential vulnerabilities of hackers using the credit union as an entry point to gain access to larger interconnected systems?
Year‐End 2009 Year‐End 2010 3RD Qtr. 2012
 Has staff done due diligence to evaluate the cybersecurity of every vendor and every payment system with which the credit union has a digital relationship?
 How could the credit union change cybersecurity protocols based on guidance from FFIEC?
 How could the new national cybersecurity standards further protect the credit union and members?
NCUA Update
7
MajorChangestoRisk‐BasedCapital
Risk‐based threshold to be “Well
Capitalized” is lower (10.0%, not 10.5%).
Interest rate risk has been removed from all risk weights.
Key risk weights are significantly lower.
Examiners will not be authorized to raise any individual CU’s capital requirement.
Effective date will be delayed until 2019.
NCUA Update
8
InterestRateRiskisHigherthanPre‐Crisis
Net Long‐Term Assets in Credit Union System
Percent of Assets 50%
Other Long‐Term Assets
MBLs
Investments 3+ Year
Net Fixed Rate 1st Mortgages & Other Real Estate
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
NCUA Update
9
InterestRateSpikesLedtoUnrealizedLosses
Blank
Unrealized Gains/Losses
on Available for Sale & Held to Maturity Securities
Billions of dollars Percent
4
7
3
6
2
5
1
4
0
3
‐1
2
‐2
‐3
2008
NCUA Update
1
Unrealized Gains/Losses (Left Axis)
30‐year Mortgage Rate (Right Axis)
2009
2010
0
2011
2012
2013
10
CreditUnionLossesTiedtoRisingRates
Total Unrealized Gains/Losses in Credit Union System
Billions of Dollars Billions of Dollars
4
4
3
2
1
3
Over
$5 Billion
2
1
0
0
‐1
‐1
‐2
‐2
‐3
‐3
20122012 2013 2014 2013
2014
NCUA Update
11
http://www.ncua.gov/Resources/Pages/interest‐rate‐risk‐resources.aspx
NCUA Update
12
QuestionstoAsk
aboutInterestRateRisk
 How is the credit union measuring interest rate risk exposure?  What has been learned from shock testing?
3RD Qtr. 2012
 What changes should be considered in the credit union’s balance sheet, product pricing or investment strategy to avoid excessive interest rate risk?
 How should the CU’s interest rate risk policy be updated to reflect the new Fed interest rate forecast?
 What internal controls ensure the CU will follow the board’s interest rate risk policy?
NCUA Update
13
ProposalsAffectingtheMilitary
o Department of Defense: Proposed Rule to
Implement the Military Lending Act
o Consumer Financial Protection Bureau: Potential Proposed Rule to Limit Payday Lending
NCUA Update
14
NCUARegulatoryRelief
Adding Supplemental Capital
Expanding Fields of Membership
Removing Fixed Asset Limits
Permitting Asset Securitization
Easing Member Business Lending
NCUA Update
15
NCUA Update
16
Contactingthe
OfficeoftheChairman
Feel free to contact our office with questions or comments.
NCUA Update
Chairman:
Debbie Matz
[email protected]
Chief of Staff:
Steve Bosack
[email protected]
Senior Advisor:
Buddy Gill
[email protected]
Asst./Scheduler:
Angela Sanders
[email protected]
Phone:
703‐518‐6301
17
NCUA Update
18
• Automatic email notifications from NCUA website postings
• Replaces most paper mailings
• You can choose which NCUA communications you receive.
• All you need to sign up is an email address.
• Sign up free of charge at: www.ncua.gov/Pages/NCUA
Express.aspx
NCUA Update
19
NCUA Update
20
NCUA Update
21
Mary Mitchell Dunn
Deputy Chief Advocacy Officer and Senior Counsel for Regulatory and Executive
Branch Affairs, Credit Union National Association
Mary Dunn is the Deputy Chief Advocacy Officer and Senior Counsel for Regulatory
and Executive Branch Affairs for the Credit Union National Association. In this
position, Mary coordinates regulatory advocacy for CUNA and is a primary liaison
with NCUA, the CFPB, the White House, the SBA, the Federal Reserve Board and
other agencies. She oversees production of legal and regulatory analyses,
comment letters, member communications and other publications that focus on legal
and regulatory issues affecting credit unions. She is a frequent public speaker and
works with various CUNA committees and councils as well as a number of CUNA
offices such as legislative, economics, communications and others to help ensure
credit union interests are championed.
DEFENSE CREDIT UNION
COUNCIL
Dublin, Ireland, May 5, 2015
ISSUE UPDATE
MARY MITCHELL DUNN
DEFENSE CREDIT UNION COUNCIL
Environment
Pending Issues Likely Outcomes
Advocacy Future Concerns
▪ Legislative
▪ Regulatory
▪ Other
Legislative
Regulatory
Other
Concerns
NCUA
FASB
Powers
CFPB
NCUA
DoD
▪ Landscape of Culprits
▪ Proactive
NCUA Rules and Supervision
▪ Cumulative
Congress
CFPB
Regulatory Burdens
Key Issues
▪ RBC 2
▪ Military Lending Act
▪ Tax Exemption
▪ FASB
▪ Regulatory Relief
▪ NCUA Legislative Goals
▪ Data Breaches
▪ NCUA Working Groups
▪ CFPB Oversight
▪ Others
▪ Does Congress Care?
▪ Taxation
▪ RBC2
▪ Reg Relief
▪ CFPB
Broad Outreach ADVOCACY
EFFORTS
Congress Agencies
LIKELY OUTCOMES
▪ RBC 2
▪ Military Lending Act
▪ Tax Exemption
▪ FASB
▪ Regulatory Relief
▪ NCUA Legislative Goals
▪ Data Breaches
▪ Others
▪ CFPB
▪ Outlook
▪ Conclusions
Assistant Secretary of the Army
Financial Management and Comptroller
The Honorable Robert M. Speer
American people.
On 3 December 2014, Mr. Robert M. Speer became the
Assistant Secretary of the Army, Financial Management
and Comptroller (ASA (FM&C)). Mr. Speer advises the
Secretary of the Army and Chief of Staff, on all matters
related to Army financial management. He oversees the
development, formulation, and implementation of policies,
procedures and programs for improving the efficiency and
effectiveness of overall resources in the Department of the
Army. He is also responsible for the formulation and
submission of the Army budget to Congress and the
From 28 February 2014 to 2 December 2014, Mr. Speer was the Acting Assistant
Secretary of the Army, Financial Management and Comptroller (ASA (FM&C)).
In October 2009, Mr. Robert M. Speer was designated as the Principal Deputy Assistant
Secretary of the Army (Financial Management and Comptroller) (PDASA (FM&C)).
Prior to these assignments, Mr. Speer served as a Managing Director for
PricewaterhouseCoopers Public Services, where he led their Defense and Army
business. He has been significantly involved in Department of Defense financial
management solutions and defense related professional organizations throughout his
career. His position with PricewaterhouseCoopers followed nearly 28 years of experience
and progressive responsibility in Department of Defense/Federal comptrollership,
budgeting, finance, treasury, accounting, program management, and federal financial
management systems.
Mr. Speer is married with 4 children and resides in Burke, Virginia.
42nd Annual Defense Credit Union Council
Overseas Sub-Council Conference
Honorable Robert M. Speer
ASA (FM&C)
5 May 2015
Agenda
• Federal / Defense Spending Trends
• Budget – Uncertain Fiscal Environment
• BCA and Sequestration Impacts • Influences Shaping the Environment
• America’s Army
• Army Budget Top‐line
• FY15/16 Budget Comparison
• Key Initiatives
• Challenges
“As we continue to shape the force of the future, we have two non‐negotiables: the readiness of the Army and the well being of our people.” ‐‐ Secretary of the Army John McHugh, 13 October 2014
UNCLASSIFIED
2
Federal Spending Trends
FY 62: National Defense ~49% of Federal Budget
FY 20: National Defense ~12% of Federal Budget
Net Interest
7%
Net Interest
7%
Net Interest
11%
Defense
Discretionary
12%
Defense
Discretionary
15%
Mandatory
26%
Defense Discretionary
49%
Non-Defense
Discretionary
12%
Non-Defense
Discretionary
14%
Mandatory
64%
Mandatory
65%
Non‐Defense Discretionary
18%
FY 16 Request
FY 62
FY 20 est
FY 16 Federal Budget Request
Discretionary
‐1,168B
Outlays
‐3,999B
Mandatory
‐2,543B
Net Interest
‐289B
Income Tax
+1,646B
Corp Tax
+473B
Payroll Tax
+890B
Receipts
+3,525B
Deficit
‐474B
Other
+293B
Options to Reduce Federal Deficit • Decrease spending
– Sequestration
– Balanced Budget approach
• Increase revenues
Source: Fiscal Year 2016 Historical Tables, Budget of the U.S. Government
UNCLASSIFIED
3
Historical Budget Trends
DoD Budget
• Discretionary spending is ~30% total federal budget…Defense budget is ~50% discretionary spending (PB2013 Request) • Increasing emphasis on reducing spending/deficit – Congress and the Administration
• Historically, funding levels have decreased as military demand decreases
Korean War
Armistice (1953)
Height of
Vietnam War
(1968)
Height of
Cold War
(1985)
Gulf War
Ends (1991)
Vietnam War
Ends (1973)
UNCLASSIFIED
9/11
(2001)
OCO
?
4
Budget ‐ Uncertain Fiscal Environment
• Since 2000, Enacted by 1 Oct:
– Only 5 Defense appropriation bills
– Only 3 Military construction appropriation bills • Government Shutdowns: – FY 14: 1‐16 Oct, 2 Continuing Resolutions (CR)
• Impacts of a CRs:
– Ties spending to previous FY levels
– Prevents new starts
– Restricts increased production levels
– Compresses timeline to execute ‐
increased cost, late obligations
– Impedes ability to respond to emerging needs
– Limits ability to forecast FYDP
Defense Appropriations
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
Prior to 1st QTR
OCT
NOV
CRs* FY start
2
2
1‐16 17‐Oct
1
5
7
2
0
30‐Sep
1
13‐Nov
0
29‐Sep
3
0
5‐Aug
0
30‐Sep
23‐Oct
4
8
0
9‐Aug
25‐Oct
2
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
Prior to 1st QTR
OCT
NOV
CRs* FY start
2
2
1‐16 17‐Oct
1
5
7
2
0
30‐Sep
4
3
2
30‐Nov
1
13‐Oct
22‐Nov
3
4
23‐Oct
5‐Nov
4
13‐Jul
0
0
17‐Aug
2nd QTR
DEC
JAN
FEB
3rd QTR
MAR
APR
4th QTR
MAY JUN JUL AUG SEP
19‐Dec
17‐Ja n
27‐Ma r
23‐Dec
15‐Apr
19‐Dec
30‐Dec
10‐Ja n
MILCON Appropriations
UNCLASSIFIED
2nd QTR
DEC
JAN
FEB
3rd QTR
MAR
APR
4th QTR
MAY JUN JUL AUG SEP
19‐Dec
17‐Ja n
27‐Ma r
23‐Dec
15‐Apr
16‐Dec
26‐Dec
15‐Feb
6
Impacts of Sequestration
• Manpower: BCA funding limitations will require the Army to reduce to a 920,000 force (420,000 RA; 315,000 ARNG; 185,000 USAR) that cannot meet defense strategic requirements. • Readiness: Sequestration forces the Army to ration readiness. We have committed to keeping Combat Training Centers a priority. That means our home station training goes unfunded except for brigades going to CTCs. • Modernization: Sequestration forces the Army to increase mid‐term risk in its efforts to modernize for the warfight of tomorrow by limiting the Army’s investments to sustaining efforts to equip Soldiers to meet the warfighting requirements of today.
Under BCA Caps Levels
 Contingency Force where only 9 of 30 Active Component BCTs are ready
 Accelerates drawdown of Active Component  Cuts Modernization Accounts by ~12%
 Supports only critical life, health, and safety
Readiness & modernization~$5.8B of the $6B BCA reduction
UNCLASSIFIED
8
Influences Shaping the Environment
New Sec. of Defense
Budget
Control Act
National
Strategic
Guidance
FY16
Budget
114th U.S. Congress
UNCLASSIFIED
Bipartisan
Budget Act
9
Changing Strategic and Fiscal Landscapes
Secretary of the Army Priorities
Sequestration
 Prevent Sexual Assault  Balance and Transition the Army  Champion Soldiers, Civilians and Families  Bolster Army activities in the Asia‐Pacific region
 Ensure personal accountability on and off the battlefield  Tell the Army Story
Debt Ceiling
Spending
Budget
Caps
Credit
Crisis
 Implement Army Total Force policy OCO to Base
Migration
 Prudently manage reset, modernization, research and development
 Strengthen information assurance and cyber security  Develop effective energy solutions Continuing
Resolution(s)
Chief of Staff of the Army Priorities
 Adaptive Army Leaders for a Complex World Velocity of
Instability
 A Globally Responsive and Regionally Engaged Army
 A Ready and Modern Army
 Soldiers Committed to Our Army Profession
Prevent
 The Premier All Volunteer Army
Shape
Globally Responsive and Regionally Engaged
UNCLASSIFIED
Shrinking
Budgets
Win
10
America’s Army
PACOM
JAPAN
2,360
SOUTH KOREA
19,930
ALASKA
11,870
HAWAII
22,010
OEF – PHILIPPINES
170
NORTHCOM
EUCOM
CONUS SPT BASE
18,690
USAREUR
27,100
CENTCOM
OFS – AFGHANISTAN
7,730
OAR – BALTICS &
POLAND
2,110
SOUTHCOM
OJG – BALKANS
700
JTF – GTMO
1,540
AFRICOM
JTF – BRAVO
380
JTF – HOA
830
OIR – IRAQ
2,310
OSS – KUWAIT
10,100
OSS – QATAR
2,500
OSS – JORDAN
1,220
OUA – WEST AFRICA
60
OTHER WORLDWIDE
OPERATIONS
8,900
141,000 SOLDIERS IN 150 LOCATIONS
MFO – SINAI
720
As of: 7 Apr 15
 The world is experiencing an increased velocity of instability
 America’s Army remains indispensable to National Defense
 Nine of ten active Army division headquarters are actively engaged around the world
 The Army is the backbone of the Joint Force, providing command and control to Joint Forces, setting
and sustaining theaters, and securing and controlling people and terrain
UNCLASSIFIED
11
Army Topline
$150
(Base Funding Program)
$145
$ Billions
$140
$135
$138
$130
$130
$127
$127
$126
$120
2013
BBA Relief: Includes OCO for Base
FY14: $3.1B OCO for Base Requirements
FY15: $.85B OCO for Base Requirements
$121
$117
2014
2015
Request
BCA Levels
At FY15 Enacted Levels
Manpower – 490/350/198
$130
$124
$121
2012
$132
$121
$117
$110
The decreasing topline is
compounded by inflation to reduce
purchasing power
2016
2017
FY12-14 Execution
2018
FY15 Enacted
At FY16 PB Levels
The FY 2016 request begins to restore balance between Endstrength, Readiness, and Modernization
 Focus on Near Term Readiness; Decisive Action  Sustains a planned drawdown of the Active Component to 475K
capacity
 Transitions from Tiered Readiness resourcing to more balanced
Total Readiness across the Force
 Regionally Aligned Force missions
 Balanced, rotationally focused, and surge ready force to meet
combatant command demands
 Imbalanced between manpower, near term
 Modernizes helicopter fleets; Armored Multi-Purpose Vehicle,
readiness and long term readiness
Paladin Integrated Management, and Stryker Double-V Hull
12
UNCLASSIFIED


FY 2015/2016 Budget Comparison
(Base Funding Program)
FY13
FY14
FY15
FY16
Actuals
Actuals
Enacted
Request
Military Personnel
56.1
56.4
56.2
56.3
Operation and Maintenance
43.1
44.71
41.82
44.7
Procurement/RDTE
23.1
21.2
20.6
23.1
Military Construction
3.4
2.6
.9
1.1
Other Base (FHA/BRAC/CAMD/AWCF/ANC)
1.7
1.3
1.6
1.4
127.4
126.21
121.12
126.5
Request ($B)
Totals
Other Base: Chemical Agent and Munitions Destruction, Army Working Capital Fund, Arlington National Cemetery
1: Includes $3.1B OCO for Base Transfer
2: Includes $.85B OCO for Base Transfer and $.27B in Readiness Increase
 FY16 Base Request
$126.5B
 FY15 Base Enacted
$121.1B
Military
Construction
<1%
Military
Construction
<1%
Other Base
1%
Procurement
RDTE 17%
Operation &
Maintenance
Other Base
1%
Procurement
RDTE 18%
Military
Personnel
47%
Operation &
Maintenance
36%
34%
Military
Personnel
45%
FY16 Budget Request Equals FY14 Expenditures
UNCLASSIFIED
13
FY 2015/2016 Overseas Contingency Operations
Request ($M)
Military Personnel (MILPERS)
Operation & Maintenance (O&M)
Research, Development, & Acquisition (RDA)
Military Construction, Army (MCA)
Working Capital Fund (ACWF)
Army Total
Passthrough / Transfer Accounts
FY13
Actuals
8,798
31,767
2,105
43
42,713
FY14
Actuals
5,593
23,636
1
1,802
49
31,080
FY15
Enacted
3,511
17,628
2
1,150
37
22,326
FY16
Request
2,019
11,468
1,627
15,114
Afghan Security Forces Fund
Iraq Train & Equip Fund
4,946
-
3,962
-
4,109
1,618
3,762
715
Syria Train & Equip Fund
Joint Improvised Explosive Device Defeat Fund
Afghanistan Infrastructure Fund
1,384
325
879
199
444
-
600
493
-
49,368
36,120
28,497
20,685
All Army Appropriations
Operation FREEDOM’S SENTINEL ($17B)
Operation INHERENT RESOLVE ($1.5B)
Operation Spartan Shield ($783M)
European Reassurance Initiative ($504M)
1: Does not include $3.1B OCO for Base Requirements 2: Does not Include $.85B OCO for Base Requirements
 FY15 OCO Enacted
$28.5B
MCA
<1%
RDA
4%
 FY16 OCO Request
$20.6B
Pass‐ MILPERS
Through
12%
22%
O&M
62%
Pass‐
Through
27%
RDA
8%
MILPERS
10%
O&M
55%
Despite increasing “Velocity of Instability”
Army’s OCO continues to decline
UNCLASSIFIED
14
Key Initiatives
Goals
Building full spectrum readiness
Focus on developing leaders
Strengthening partnerships
External support
Aviation Restructure Initiative
Compensation and Health Care
Base Realignment and Closure
Defense Business Board Report Best Business Practices
Versatile
Army Actions
Reorganization
Drawdown
Workforce reshaping
HQ reduction
Tailorable
Affordable & Cost Effective
UNCLASSIFIED
Risk
Tiered Readiness
Low funding in Facilities &
Capital investments
Slow Procurement
15
19
UNCLASSIFIED
20
Challenges
We need to make our dollars count.
&
We need to account for our dollars. Environment
Declining defense budget
Budget Control Act / Sequestration
Challenge
Hard choices to meet strategic demands with declining budgets
Accountability – 2015 Audit of Schedule of Budgetary Activities and full Financial Statements September 2017
UNCLASSIFIED
21
Army Budget Over Time
• Begins to restore the balance between end strength,
readiness, and modernization
• Focuses modernization efforts on the Soldier and
Mission Command elements and begins to restore
modernization funding that remains near historic lows
• Sequestration forces the Army to ration readiness and
accepts mid-term risk in its efforts to modernize for
the warfight of tomorrow
External
Pressures:
Flattening of the
Budget; Timing of
Congressional
Reprogramming
Approvals
Internal Churn:
Business Processes;
Programming
Accuracy
Budget Flexibility
to Shape Effects
and Absorb
Emerging
Requirements
Increasing Personnel Costs as
Mil/Civ End-Strength Declines
UNCLASSIFIED
22
John M. Broda President & Chief Executive Officer The Armed Forces Financial Network – AFFN John Broda brings over 36 years of industry experience to the AFFN Organization. As President & CEO, Mr. Broda is responsible for business development, marketing, sales, and service delivery to the global AFFN Participant base. Mr. Broda began his career as a part‐time teller in high school and continued working in banking throughout his college career. After graduation he continued in the banking industry at The Morris County Savings Bank, Morristown, NJ. During a successful progression within the retail banking organization, he was selected to co‐manage the creation of the EFT Department and the launch of the ATM program for the bank. Prior to joining AFFN in 2000, Mr. Broda served as Senior Vice President, EDS CNS. His career at EDS developed within the Account Relations Management and Client Service Organizations, entering the company as a Customer Service Representative in 1987. John has earned degrees in Advertising/Public Relations and Business Administration/Management from Johnson & Wales University, Providence, Rhode Island, and Centenary College, Hackettstown, New Jersey. 42nd Annual
Wednesday
May 6, 2015
Dublin, Ireland
William E. Hawbecker, Jr.
Director, Department of Defense Banking and Credit Union Programs
Mr. William E. Hawbecker, Jr. is the Department of Defense (DoD) Director for Banking and
Credit Union Programs, a position he has held since October 2010. In this role, Mr. Hawbecker
is responsible for formulation of policy and procedures governing financial institutions on DoD
installations worldwide. Additionally, he serves as the Program Manager for the DoD Overseas
Military Banking Program.
Mr. Hawbecker is a 2011 graduate of the Defense Senior Leader Development Program
(DSLDP). During this two-year program, he completed an assignment to the Office of the
Secretary of Defense (Comptroller), senior-level professional military education, and executive
training.
Prior to his selection to the DSLDP, Mr. Hawbecker served as both the Director for eThird Party
Payments as well as the Director for eData Storage at the Defense Finance and Accounting
Service (DFAS). In these roles he led DoD-wide and Agency-specific programs and initiatives
to support DoD strategic initiatives and goals, to include program management activities for
systems used to pay for commercial transportation of all DoD household goods and freight and
direct oversight for DFAS imaging and workflow systems used to make payments to vendors.
Earlier in his career, Mr. Hawbecker served in several capacities throughout DFAS in
Disbursing, Accounting, and Commercial Payment organizations. He earned the American
Society of Military Comptroller’s 1998 National Intern of the Year award for his participation in
implementing cost saving initiatives.
Mr. Hawbecker graduated with honors from Mount Vernon Nazarene University with a B.A. in
Accounting. He also holds a Master’s Degree in Strategic Studies from the United States Army
War College and is a Certified National Security Professional.
DoD Banking and Credit Union Programs
Defense Finance and Accounting Service
Mr. Bill Hawbecker
Director, DoD Banking and Credit Union Programs
May 2015
Integrity - Service - Innovation
DoD Banking and Credit Union Programs Overview
Department of Defense
OSD(C), OSD(P&R)
DoD Banking and Credit Union Office
Defense Finance and Accounting Service
Columbus, Ohio
Military Service LOs
Installation
LOs
Installation
FIs
• 68 offices in 10 foreign locations
• Over 300 no-fee ATMs in network
• Supports DoD funding mission
(U.S. dollar and foreign currency)
4/23/2015
Trade
Associations
Overseas Credit
Unions
(Operate under Geographic
Franchise)
2
Financial Institution Topics of Interest









DoD Financial Management Regulation Update
Leases on CONUS DoD Installations
Operating Agreements
DoDI 1344.07 and Sponsorships
Nonprofit Non-Federal Entities
AAFES Car Sales
Discretionary Allotments
Military Compensation and Retirement
Overseas Military Banking Program
4/23/2015
3
DoD Financial Management Regulation Update
 Administrative Update Anticipated to be Published June 2015
 Every 2 years
 Links, address changes
 Discretionary Update Ongoing
 Asked Services for recommended changes
 DoD Banking and Credit Union Office to coordinate and recommend
approval
 WE ARE HERE
 Adjudication process for publication in Federal Register
• Federal Directive LO and General Counsel
• Notice of publication will be advertised and comment dates identified
 32 CFR Part 231
 Draft rule vetting will be open to federal agencies
 Final rule vetting will be open to public
4/23/2015
4
Leases on CONUS DoD Installations
 10 United States Code 2667
 Leases, other than for certain credit unions, granted under this authority
 Requires competitive procedures to select the lessee
 Has exceptions: public interest; use of competitive procedures is
unobtainable or not compatible with public benefit served
 Service Secretary determination
 2015 National Defense Authorization Act
 Amends 10 USC 2667 to allow for the renewal or extension of existing
real estate leases in support of an on-base financial institution without
competition
4/23/2015
5
Operating Agreements
 Operating agreement defines the relationship between the FI
and installation and must be in place prior to commencing
operations
 Should be reviewed yearly
 Must be updated every 5 years
 An operating agreement should include the hours of operation,
agreement to comply with DoD policies and procedures,
security requirements for cash shipments, and an agreement
to reimburse the government for logistical support
 Any change in services and fees must be added/amended in
the operating agreement
 Important tie to leases and the legislative change
4/23/2015
6
DoDI 1344.07




Personal Commercial Solicitations on DoD Installations
Issued 3/2006
Update underway
Summer 2015
 Sponsorships are allowed; however, a company cannot
advertise or distribute literature that promotes competitive
financial services/products offered by the on-base FI
 Cannot be used to gain access to collect information for
solicitation through raffles, drawings, or surveys without
individual written consent to be solicited beyond the event
4/23/2015
7
Nonprofit Non-Federal Entities
 Letter Signed by Secretary of Defense Dec 2014
 Reemphasizes authorities and flexibilities
 Implements additional measures to help with consistency
 Provides clarity for adjudicating requests
 Letter States “Within the bounds of law and regulation…”
 Existing Policy to be Updated to Incorporate Provisions of Letter




4/23/2015
DoDD 5410.18
DoDI 5410.19
DoDD 1000.26E
DoDI 1000.15
8
AAFES Car Sales




AAFES, OSD P&R MWR and Resale Policy
Compensation for Financing Activities
Contracting Officer Letter to Vendor on Advertising
Continued Dialogue with AAFES and OSD
 My Message: Proactively Engage Your Members
4/23/2015
9
Discretionary Allotments
 November 28, 2014, Federal Register Notice
 “Allotments remain authorized for service member payments to. . . savings or
other deposit accounts (for other than the prohibited purposes described above), .
. .“--- means that an allotment to a savings account cannot be set up to purchase
or finance the purchase, lease, or rental of personal property.
 Change Went into Effect 1 Jan, 2015
 Financial Management Regulation Updates Expected to Be
Completed Soon
 Policy Will Not Contain Language That Requires Businesses
to Report Policy Violations to the Military Departments or to
DFAS
4/23/2015
10
Military Compensation and Retirement
 Military Compensation and Retirement Modernization
Commission (MCRMC)
 http://www.mcrmc.gov/public/docs/report/MCRMC-FinalReport-29JAN15HI.pdf
 Because of timing, not considered in FY2016 President’s Budget, but DoD
required to analyze recommendations
 Recommended More Frequent and Improved Content of
Training
 Identified more Service members would like to receive preventative
financial education and that spouses should be included in financial
readiness courses
 Recommends that DoD should hire professional training firms to provide
financial literacy training
 What Are The Opportunities?
4/23/2015
11
Overseas Military Banking Program
 Current Contract Performance Began April 2013
 Runs Through March 2018, Potentially March 2023
 5-year base contract
 Five, 1-year options
 Market Research
 Meet with industry
 Overview of program
 Those Interested in Meeting Should Contact Director, DoD
Banking and Credit Union Programs
 [email protected] (****New email Address****)
 May Issue Request for Information
4/23/2015
12
Community Bank: Support of Credit Unions
Mar 2014-Feb 2015
$750M
May 2013-Feb 2014
$619M
26.1
4%
124.9
20%
183.7
30%
38.2
6%
112.7
18%
$34.4
4%
Germany
Germany
Italy
Italy
Japan
Japan
Korea
Korea
Okinawa
UK
$43.7
6%
$167.7
22%
Okinawa
UK
$157.7
21%
133.4
22%
•
•
•
•
•
$210.7
28%
$145.1
19%
USD Currency
Local Currency
Local & Foreign Check Clearing
Bulk Payment File Processing
Deposit & Account Services
4/23/2015
13
Banking Center Closures/Openings
•
•
•
•
•
•
CLOSED 2013/14
Bitburg BC
Schweinfurt Conn Barracks BC
Heidelberg Campbell Barracks BC
Heidelberg Shopping Center BC
Schweinfurt Ledward Barracks BC
Bamburg BC
•
•
•
4/23/2015
OPENED 2013
Del Din
CLOSING 2015
Yokohama BC
Mainz Kastel BC
14
FY09 – CY2 ATM Transactions Worldwide
Transactions
15,225,571
16%
77,075,490
84%
CB
Non-CB
Dollar Volume
$1,438,429,000
15%
$8,014,499,000
85%
CB
Non-CB
4/23/2015
15
Europe ATM Transactions
Millions
Transactions by Country
6
5
4
3
2
1
0
FY09
IT - CB Cards
4/23/2015
FY10
IT - Non-CB Cards
FY11
UK - CB Cards
FY12
UK - Non-CB Cards
CY1
GE/NL - CB Cards
CY2
GE/NL - Non-CB Cards
16
Pacific ATM Transactions
Millions
Transactions by Country
6
5
4
3
2
1
0
FY09
JP - CB Cards
4/23/2015
FY10
FY11
JP - Non-CB Cards
KR - CB Cards
FY12
KR - Non-CB Cards
CY1
KW - CB Cards
CY2
KW - Non-CB Cards
17
Germany/Netherlands ATM Transactions
Thousands
Transactions
6,000
4,000
2,000
0
FY09
FY10
FY12
CY1
CY2
Trans - Non-CB Cards
Dollar Volume
Millions
Trans - CB Cards
FY11
600
400
200
0
FY09
FY10
FY11
$ - CB Cards
4/23/2015
FY12
CY1
CY2
$ - Non-CB Cards
18
Italy ATM Transactions
Thousands
Transactions
800
600
400
200
0
FY09
FY10
FY12
CY1
CY2
Dollar Volume
Millions
Trans - CB Cards
FY11
$100
$80
$60
$40
$20
$0
FY09
FY10
FY11
$ - CB Cards
4/23/2015
FY12
CY1
CY2
$ - Non-CB Cards
19
United Kingdom ATM Transactions
Thousands
Transactions
1,000
800
600
400
200
0
FY09
FY10
FY12
CY1
CY2
Dollar Volume
Millions
Trans - CB Cards
FY11
100
80
60
40
20
0
FY09
FY10
FY11
$ - CB Cards
4/23/2015
FY12
CY1
CY2
$ - Non-CB Cards
20
Japan ATM Transactions
Thousands
Transactions
6,000
4,000
2,000
0
FY09
FY10
FY12
CY1
CY2
Dollar Volume
Millions
Trans - CB Cards
FY11
800
600
400
200
0
FY09
FY10
FY11
$ - CB Cards
4/23/2015
FY12
CY1
CY2
$ - Non-CB Cards
21
South Korea ATM Transactions
Thousands
Transactions
5,000
4,000
3,000
2,000
1,000
0
FY09
FY10
FY12
CY1
CY2
Dollar Volume
Thousands
Trans - CB Cards
FY11
400,000
300,000
200,000
100,000
0
FY09
FY10
$ - CB Cards
4/23/2015
FY11
FY12
CY1
CY2
$ - Non-CB Cards
22
Online Banking Trends
70
60
50
40
30
20
10
0
Jan 2012
Jan 2013
Jan 2014
Jan 2015
Avg Daily Logins
Active Users (last 30 days)
Avg Monthly Account Activity
Avg Monthly Logins
Web Banking Trends
Millions
Thousands
Mobile Banking Trends
9
8
7
6
5
4
3
2
1
0
30%
25%
20%
15%
10%
5%
0%
Jan 11-Jan 12
Jan 12-Jan 13
Unique Visitors
4/23/2015
Visits
Jan 13-Jan 14
Page Views
Jan 14 - Jan 15
% New Visits
23
Euro Bill Payments
350
€ 300
300
€ 290
250
€ 280
200
€ 270
150
€ 260
100
€ 250
50
Thousands
€ 310
2012
2014
One Time Payments
Count
All periods represent
calendar years.
Amount
Millions
Amount
2013
€ 120
300
€ 100
250
€ 80
200
€ 60
150
€ 40
100
€ 20
50
€-
2011
2012
Amount
4/23/2015
Count
2011
Thousands
€ 240
•
All Online Euro Bill
Payments under
SEPA III Rules
Count
Amount
Millions
Standing Payment Orders
2013
2014
Count
24
Loan Trends
15
$140,000
14
$130,000
13
$120,000
12
$110,000
11
$100,000
10
$90,000
9
$80,000
8
$70,000
7
$60,000
6
$50,000
5
FY09
FY10
FY11
FY12
Avg Bal
4/23/2015
FY13
CY1
Thousands
$150,000
Count
Average Balance
Thousands
Worldwide Loan Trend
CY2
Count
25
Loan Trends
$120,000
12000
$100,000
10000
$80,000
8000
$60,000
6000
$40,000
4000
$20,000
2000
Count
0
$FY10
FY11
FY13
CY1
CY2
Count
Pacific Loan Trend
Average Balance
Avg Bal
FY12
Thousands
FY09
$35,000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$FY09
FY10
FY11
Avg Bal
4/23/2015
FY12
FY13
CY1
CY2
Count
26
Count
Thousands
Average Balance
Europe Loan Trend
Loan Trends
Millions
Auto Loan Trends
$120
$100
Average Balance
$80
$60
$40
$20
$FY09
FY10
FY11
Worldwide
4/23/2015
FY12
Europe
FY13
CY1
CY2
Pacific
27
Loan Trends
Millions
Unsecured Loan Trends
$30
$25
Average Balance
$20
$15
$10
$5
$FY09
FY10
FY11
Worldwide
4/23/2015
FY12
Europe
FY13
CY1
CY2
Pacific
28
Loan Trends
Millions
Other Loan Trends
$10
$9
$8
$7
Average Balance
$6
$5
$4
$3
$2
$1
$FY09
FY10
FY11
Worldwide
4/23/2015
FY12
Europe
FY13
CY1
CY2
Pacific
29
Open Discussion
THANK YOU for your continued support of Service
members, civilians, and their families!
30
MAJ Emma Parsons is from Palisades Park, New Jersey. She entered the Army
as a Distinguished Military Graduate after receiving commission from The College
of New Jersey (Trenton State College) ROTC program in 2003 as a Finance
Officer. MAJ Parsons holds a liberal arts degree in history, a Masters in
Education, Masters in Business Administration and an AIB Military Banking and
Financial Management and Operations Diploma with American Banking
Association. Her certification includes the Certified Defense Financial Manager
(CDFM). Her military education includes Finance Officer’s Basics Course,
Finance Captains Career Course, and Training With Industry. In January 2004,
MAJ Parsons reported to the 176th Finance Battalion in Yongsan, Korea after
completing the Finance Officer’s Basic Course. While assigned to 176th, she
served as the Detachment Executive Officer, Officer in Charge of Internal Control
and Disbursing Agent. In 2006, MAJ Parsons joined the Multinational Forces and
Observers (MFO) team in Sinai, Egypt and served as the Finance Officer for 1st
Support Battalion. In 2007, she became part of the 101st Financial Management
Company in Ft Campbell, Kentucky. She was the Company Executive Officer and
then deployed as the Deputy Disbursing Officer during Operations Iraqi Freedom
2008-2009. Afterwards, MAJ Parsons served as a Budget Officer for USAREUR
G8 and a Detachment Commander in Heidelberg and Hohenfels, Germany. She
currently works as the USAFMCOM Banking Officer in Washington D.C.
Throughout her career thus far, she has managed over $85 million and her
military awards and decorations includes the Bronze Star Medal , the Army
Commendation Medal with two Oak Leaf Clusters, and the Multinational Forces
and Observers Ribbon.
Army Banking Update
Overseas Sub-Council Brief
MAJ Emma Parsons
Department of the Army Banking Officer
May 6, 2015
1
Agenda
•
•
•
•
•
•
•
•
Army Banking Program
Regulations and Policies
Partnerships
Ongoing Initiatives
Credit Union Support
Army Banking Officers Update
Way Ahead
Questions
2
• Advise ASA (FM&C) on Banking Issues
- Direct advisor for the DASA (FO), Ms. Laura Jankovich
• Training With Industry Banking Program
- Making changes to the curriculum and personnel
• Oversight of both domestic and overseas on-post financial
institutions
- OCONUS -16 OCONUS credit union (CU) branches
- CONUS - 50 CU branches
3
• Overseas Military Banking Program
- Cash Support for exercises
- 35 total Military Banking Facilities: 19 - Germany, 3 - Italy, 10 - Korea
2 - Japan, 1 - Kwajalein
- EFT payment support for ITS.gov
• Train, facilitate and resolve banking issues
- Issues decrease regarding off-post FI sponsorship and advertisement
- Some increase in issue concerning on-post FI limitations on
advertisement
4
Regulations and Policies
• Department of Defense Financial Management
Regulation (DoD FMR) 7000.14-R, Volume 5, 34
- Sponsorship and Advertisement (DoDFMR 340404) in conjunction
with Joint Ethics Regulation
- Questions mostly concerning insurance sales and newspaper
(commercial or Army funded)
• Department of Defense Instruction (DoDI) 1000.11
- Mobile ATM requests for events on installations
• Liaison Officer Desk Guide
• DoDI 1342.27 – Personal Financial Management for
Service Members
• DoDI 1344.07 – Personal Commercial Solicitation
5
Partnerships
• Federal Associations
- OCC, FDIC, FINRA, FRB, Treasury, KBI, central banks both
foreign and domestic, attaches, and embassies
• Trade Associations
- DCUC, NAFCU, AMBA, BBB, CFA, CFPB, ABA,
• Army Organization
- MWR, ACS, TFMSC, FMSU, USAFMCOM, Army Banking Officers, Bank
and Credit Union Liaison Officers, and AAFES
• DoD Organization
- OSD, DFAS, and DoD Banking Officer
• Corporate Partnership
- Armed Forces Bank
6
Ongoing Initiatives
• Installation Site Visits
- USAFMCOM Commander and Command Sergeant Major’s site visits
- Meets with Garrison Commanders and Liaison Officers
- For 2015, the visits included Fort Jackson, Service Credit Union
(Germany), Navy Federal Credit Union (Korea)
- Future visits in the next three months are Ft. Bliss and Ft. Bragg
7
Ongoing Initiatives
• Installation Status Report (Banking Service #123)
- For banking Service #123, we have CLO status, Financial Education,
one bank/one credit union rule, and Operating Agreements
- Some adjustments made to the rating scheme-no requirements for listing
customer service ICE comments
- Receiving other feedback from the field on what should be left out and
should be added for the next fiscal year ISR inputs
- Meeting on June 6th, 2015 to look at FY 16 requirements, lessons learned,
and how to better improve the measurements
8
What can Credit Unions Do?
• Understand the Installation Status Report
• Have office calls with both the CLO and the Garrison
Commander to receive updates regarding budget, community
population, and status on relationships with on post agencies
• Receive schedules of MWR and ACS events up front from
the Garrison Commander
• Collaborate first before initiating any financial education
programs on the installation, which includes flyers and other
materials
9
Way Ahead
• Better improve visibility over the program. ISR was a tool for
Installation Management Commands; however, Army Material
Commands adopted the ISR for now
• Expand partnerships with other agencies to share
information and resources for training
• Continue to monitor the budget for the program to ensure
more site visits and sustain quarterly office calls when the DA
Banking Officer visits D.C.
• Document quarterly counseling meetings with the liaison
officers
10
Army Banking Officer
• MAJ Brian Stanley
- Completes Training With Industry in May 22nd
- Completes Credit Union training June 22-31st in Indianapolis with
Financial Center
- Officially takes over July 30th in Indianapolis
• CPT Ishak Owusu
- Deploys in April 2015 for nine months to Kuwait
- SFC Tisby, current Deputy Disbursing Officer, will be the rear bank
liaison officer for the Pacific
• CPT Juan Pratts
- Will be Europe’s Army Banking Officer until 2016
- CPT Chris Anderson will be the next USAREUR Banking Officer.
He will report for Training With Industry after July 4th, 2015.
11
Questions
Contact Information
MAJ Emma Parsons
[email protected]
(703) 693-2698
12
United States Army
Captain JUAN C. PRATTS
USAREUR Banking and Credit Union Liaison Officer
266th Financial Management Support Center
APO AE 09054
Since: June 2013
SOURCE OF COMMISSIONED SERVICE: ROTC
EDUCATIONAL DEGREES
Interamerican University of Puerto Rico – BS – Electronic Engineering Technology
Colorado Technical University – MS – Management
MILITARY SCHOOLS ATTENDED
Mounted Officer Basic Course (Armor)
Finance Captain Career Course
FOREIGN LANGUAGE(S): Spanish
PROMOTIONS
2LT
1LT
CPT
FROM
Jun
13
Jun 12
Nov 11
May 11
Aug 10
Jul
09
Jan 09
Oct 07
Sep 06
Jan
06
TO
DATE OF APPOINTMENT
05 Nov 05
02 Jul 07
29 Apr 09
ASSIGNMENT
United States Army Europe, Banking and Credit Union Liaison Officer, 266th Financial Management Support
Center, 21st Theater Support Command, Kaiserslautern, Germany
May 13 Student, Training with Industry, Armed Forces Bank, Fort Leavenworth, KS
Jun 12 Financial Management Support Operations, Plans Officer, 43 rd Sustainment Brigade, 4th Infantry Division
(Mechanized), Fort Carson, CO
Nov 11 Deputy Comptroller, Combined Joint Special Operations Task Force – Afghanistan (OPERATION ENDURING
FREEDOM), Islamic Republic of Afghanistan
Apr 11 Commander, A Detachment, 230th Financial Management Company, 43rd Special Troop Battalion, 43rd
Sustainment Brigade, 4th Infantry Division (Mechanized), Fort Carson, CO
Jul 10 Internal Control Chief, Headquarters and Headquarters Detachment, 230 th Financial Management Company, Fort
Carson, CO and Islamic Republic of Afghanistan (OPERATION ENDURING FREEDOM)
Jul 09 Student, Finance Officer Captain Career Course, Fort Jackson, SC
Dec 08 Executive Officer, B Company, 3rd Battalion 60th Infantry Regiment, 193rd Infantry Brigade, Fort Jackson, SC
Sep 07 Scout Platoon Leader, C Troop, 4th Squadron 7th Cavalry, 1st Heavy Brigade Combat Team, 2nd Infantry Division,
Camp Hovey, Republic of Korea
Jun 06 Student, Mounted Officer Basic Course, Fort Knox, KY
Present
CPT Juan C. Pratts
SUMMARY OF JOINT ASSIGNMENTS
Deputy Comptroller, Combined Joint Special Operations Task Force - Afghanistan
(CJSOTF-A), Islamic Republic of Afghanistan
SUMMARY OF OPERATIONS ASSIGNMENTS
Deputy Comptroller, Combined Joint Special Operations Task Force – Afghanistan
(CJSOTF-A), Islamic Republic of Afghanistan and OPERATION ENDURING
FREEDOM
Internal Control Chief, Headquarter and Headquarter Detachment,
230th Financial Management Company, Islamic Republic of Afghanistan and
OPERATION ENDURING FREEDOM
US DECORATIONS
Defense Meritorious Service Medal
Army Commendation Medal (with 3 Oak Leaf Cluster)
Army Achievement Medal
Joint Meritorious Unit Award
DATE
GRADE
May 11 - Nov 11
Captain
DATE
GRADE
May 11 - Nov 11
Captain
Jul 09 – Jul10
Captain
UNCLASSIFIED//FOUO//
U SA R E U R C re d i t U n i o n L i a i s o n U p d ate
D efe n s e C re d i t U n i o n C o u n c i l
O ve rs e a s S u b - C o u n c i l B r i ef
CPT Juan C. Pratts
USAREUR Banking and Credit Union Liaison Officer
6 May 2015
Dublin, Ireland
POC Name
Enter DSN
As of: YYYY MM DD
FIRST IN SUPPORT – READY STRONG!
Agenda
Purpose
Purpose & Agenda
POC Name
Enter DSN
As of: YYYY MM DD
Provide an update of ongoing developments in the U.S. Army
Europe (USAREUR) Area of Operations (AO) and Area of
Responsibility (AOR).
 266th Financial Management Support Center (FMSC) Update
– Mission
– Operation United Assistance
– Operation Atlantic Resolve
– Exercise Support
 U.S. Army Europe (USAREUR) Update
– European Infrastructure Consolidation
– New Medical Facility
– COLA Decrease
– USAREUR License
– German Taxation
– Interactive Customer Evaluation
2
266th Financial Management Support Center Update
266th FMSC Leadership
Senior Enlisted
Advisor
SGM Alberto A. Quan
Director
COL Thomas J. Seelig
Military
Deputy
LTC Brian J. Ketz
Civilian
Deputy
Mr. Mark W. Jackson
266th FMSC Support Operations:
 Operation Enduring Freedom
 Operation United Assistance
 Operation Atlantic Resolve
 Kosovo Forces Peacekeeping Rotations
 Operation Observant Compass
POC Name
Enter DSN
As of: YYYY MM DD
3
Mission
Support and oversee financial operations for theater sustainment ISO
USAREUR, EUCOM and AFRICOM. On order, deploy to provide financial
operations support in a contingency area of operations while simultaneously
providing continuous European theater sustainment.
Italy Finance Office
Wiesbaden
Baumholder
K-Town
PCE
HQ
Ansbach Grafenwöhr
Stuttgart
Hohenfels
Benelux Finance Office
Pay Center of Excellent
POC Name
Enter DSN
As of: YYYY MM DD
4
266th FMSC Organization
Director
1/0/0/0/0
O/W/E/C/LN 13/1/46/97/58 = 215(FMSC)
Civilian
Deputy
0/0/0/1/0
Senior
Enlisted
Advisor
0/0/1/0/0
Military
Deputy
1/0/0/0/0
Cash Mgmt
2/0/8/4/0
BENELUX
Finance Office
1/0/13/11/9
Italy
Finance Office
0/0/0/6/28
Pay Center
Of Excellence
0/0/0/65/21
Brunssum
0/0/3/1/0
Vicenza
0/0/0/5/26
PCE HQ
0/0/0/36/9
Brussels
0/0/3/0/0
Darby
0/0/0/1/2
FCST x 7
0/0/0/29/12
Wounded
Warrior
Office
1/0/2/0/0
Mgmt Serv
Spec
0/0/0/1/0
SHAPE
1/0/7/10/9
Accounting
2/0/7/1/0
Internal Control
2/0/6/3/0
Policy/Plans
2/0/5/2/0
TDA
(2/0/15/80/58)
POC Name
Enter DSN
As of: YYYY MM DD
Banking
Liaison
Officer
1/0/0/0/0
Information
Management
Office
0/1/4/7/0
(11/1/31/17/0)
5
Operation United Assistance
Operational Overview
Banking Support
 Outbreak starts in early 2014; military response in September 2014.
 266FMSC deployed until October 2014.
 Select elements of the US military provides coordination of logistics,
training and engineering support.
 Support theater procurement process through cash, non-cash and ecommerce solutions.
Obtained US and foreign currency from host nation bank, EcoBank.
Contract Payments
FMSC
 Finance Operations Planning (DSSN/ADSN)
 Set the Theater (Operational to Tactical link)
 Establish FM Policy
 Providing Technical Oversight to the FM units in theater
 Providing military pay and disbursing services
Contracts requiring payment will flow through the supporting FMSU
store fronts to the 106th FMSU.
 106th FMSU certifies and disburses all contract payments effective 8
January 2015.
 If the contract is to be paid through EFT, 106th FMSU will disburse.
 If the contract is to be paid through cash, supporting FMSD will
disburse the cash payment.
Disbursing
 Support is comprised from currency management and procurement.
 C/101st FMSU provides disbursing support in Liberia and Senegal.
With no FMSU in Senegal, support through 21st TSC Pay Agent.
 All supporting Financial Management units will utilize 106th FMSU’s
Disbursing Station Symbol Number (DSSN) 6321 for finance operations
other than military pay. Military Pay done by Italy Finance Office (IFO).
Audit Readiness
 106th FMSU IC first line of audit readiness.
266th FMSC IC overall responsibility for audit checks and assurance.
C/101st FMSU
POC Name
Enter DSN
As of: YYYY MM DD
6
Operation Atlantic Resolve
Operational Overview
Banking Support
 A series of presence exercises (90-day) in the Baltics and Poland
 Reassures our NATO Partners
 Began in April 2014 with the deployment of 173rd ABN from Vicenza.
 Support provided through host nation partner banks.
AOR has mature banking infrastructure in all countries
Leverage e-commerce solutions
EFT
ATMs
Western Union
Use Pay Agents for all other small purchases at the unit level
Training provided by 106th FMSU and 266th FMSC
FMSC
 Finance Operations Planning
 Set the Theater (Operational to Tactical link)
 Establish FM Policy
 Providing Technical Oversight to the FM units in theater
 Providing military pay and disbursing services
Military Pay
 Rotational units may use 266th FMSC/106th FMSU finance offices or
send actions to home station.
Pay Agent Support
Disbursing
 Support is comprised of the use of Pay Agents (173AB, 1/1CD,
USAREUR CCP)
 106th FMSU will provide disbursing support from Baumholder.
 As of 8 January, 106th FMSU has disbursed $140K to 17 Pay Agents
spread across Poland, Lithuania, Latvia and Estonia.
106th FMSU in process of funding four (4) Pay Agents from 2CR.
106th FMSU to conduct Pay Agent training with 1/3ID via DCO on 12
February.
95% of Pay Agents funded by Western Union. One armored car
deliver to Poland in May 2014.
Contract Payments
 DFAS is default pay office
POC Name
Enter DSN
As of: YYYY MM DD
7
Mihail Kogalniceanu (M.K.) Air Base
Passenger Transit Center
 Coordinate Banking Requirements
 Synchronize E-Commerce Initiatives
 Provide Internal Control/Oversight
Operation Observant Compass
Kosovo Forces (KFOR) Rotations
 Facilitate Training
 Coordinate Banking Requirements
 Provide Internal Control/Oversight
Army Financial Management Optimization
(AFMO)
 Currency Replenishment
 Execute Disbursing Operations
 Resource Management
POC Name
Enter DSN
As of: YYYY MM DD
 One of two pilot programs
 Improve Operations
 Achieve Greater Efficiencies
8
U.S. Army Europe Update
European Infrastructure Consolidation
 Belgium
U.S. Army Garrison BENELUX
-Brussels Leased Site (NLT 2019)
 Italy
U.S. Army Garrison Vicenza
-Camp Darby, Livorno (2016) (Partial Return)
 Germany
U.S. Army Garrison Ansbach
-Barton Barracks (2021)
 The Netherlands
U.S. Army Garrison BENELUX
-Schinnen Emma Mine Site (2018)
U.S. Army Garrison Bavaria
-Artillery Kaserne, Garmisch (2018) (Partial Return)
U.S. Army Garrison Rheinland-Pfalz
-Pulaski Barracks, Kaiserslautern (2019) (Partial Return)
-Hoppstaedten Waterworks, Baumholder (2018)
-Pfeffelbach Waterworks, Baumholder (2018)
-Husterhoeh Kaserne, Pirmasens (2017)
U.S. Army Garrison Stuttgart
-Weilimdorf Warehouse Site (2018)
U.S. Army Garrison Wiesbaden
-Mainz-Kastel Station (2022)
-Amelia Earhart Hotel (2023)
POC Name
Enter DSN
As of: YYYY MM DD
9
Rhine Ordnance Barracks Medical Center Replacement
 Schedule to be occupied in 2022.
 Replace the Army’s Landstuhl
Regional Medical Center and Air
Force’s medical clinic at Ramstein.
 Congress authorized up to $990
million for the new hospital.
 1 million square-foot hospital
building with 120 exam rooms, 68
beds and 9 operating rooms.
 Include: parking structure, utility
plants and a warehouse.
 Located adjacent to Ramstein Air
Base.
POC Name
Enter DSN
As of: YYYY MM DD
10
Cost of Living Allowance (COLA) Index Changes
 COLA scheduled decrease started on March 2015.
 Adjustments are the result of an annual survey of overseas goods and
services, which found that prices in some German locales have fallen relative
to prices stateside.
 COLA rates in Germany are already at or near their lowest levels in years as a
result of the euro’s recent drop against the dollar.
 If individuals are using COLA for the right reasons decrease should not have
a significant impact.
 Personnel using COLA for something other than what it was set up to be will
have to make adjustment.
POC Name
Enter DSN
As of: YYYY MM DD
11
USAREUR License
Issue:
 Germany new policy governing driving rules.
 Personnel with expired U.S. driver’s license were considered to be
operating a vehicle without license, regardless of being in
possession of a valid USAREUR license.
 New policy based on unilateral interpretation of NATO SOFA.
 Driving without license in Germany is a criminal offense.
Determination:
 Resolution reached at diplomatic levels.
 Germany’s Federal Transportation Ministry will honor former
rules and recognize expired stateside licenses with a valid U.S.
forces license.
 The [German] states responsible for enforcing the driving rules
have been asked not to question such licenses.
POC Name
Enter DSN
As of: YYYY MM DD
12
Art. X NATO SOFA Taxation Issues
Art.72 SA Employees
 Taxation issue is at a standstill.
 Small positive clarification relevant to U.S. government employees.
 German States now agreed that the new Art. 19 German-US Tax Treaty does
not give them the right to tax an individual (U.S. government employee) that
did not have any prior ties to Germany when he/she first arrived in Germany.
 Big misfortune is that once Art. X SOFA isn’t applied, Art. 19 Tax Treaty is not
the fall-back provision but Art. 15 Tax Treaty.
POC Name
Enter DSN
As of: YYYY MM DD
13
Interactive Customer Evaluation
Customer Comments: I have had an account with Service Credit Union for over 30 years and have
found their service to be superior. I mainly use their on-line service but when I call or go in for service I
am always very pleased. I just called the Ansbach branch and, as always, came away very pleased.
Customer Comments: Just moved from CONUS back to Germany. Needed to change my address on my
account, get 2 checks for our Driver's licenses, and of course Euro's. Dealt with 2 separate tellers and
had the same experience with both. Fantastic customer service!!!! If this is what all Ansbach personnel
are like, this may just be my best tour!!!
Customer Comments: Under the capable leadership of Branch Manager Kym Shutley, the staff of the
Brussels Branch provides outstanding courteous and efficient service to all. It is a real pleasure to
encounter such a can-do attitude.
Customer Comments: My wife and I went in to open a new account and left with a lot more than just a
new account. We made a bond with the young lady Malinda. She gave us banking knowledge and
knowledge about the community and has continued to check in on us to make sure we are settling in
fine. Really appreciated how we were welcomed by her.
POC Name
Enter DSN
As of: YYYY MM DD
14
Questions?
POC Name
Enter DSN
As of: YYYY MM DD
15
Mr. Buchholz serves as Deputy Director to Headquarters United
States Air Forces in Europe and United States Air Forces Africa
(HQ USAFE-AFAFRICA) Financial Management and
Comptroller, Ramstein AB, Germany. The HQ USAFEAFAFRICA Comptroller team manages $1.5B annually in
support of two Combatant Commands (COCOMS), 3rd Air Force
and the North Atlantic Treaty Organization (NATO). In this
capacity, Mr. Buchholz provides financial direction and advice to
Air Force missions on two continents that include 104 countries.
Mr. Buchholz teams with the Comptroller to provide plan,
coordinate and integrate all Comptroller activities with the HQ
USAFE-AFAFRICA Staff and Wing Commanders. He provides
expert budget and financial guidance to HQ USAFE-AFAFRICA,
Non-appropriated Fund (NAF), wings and tenant units to meet
essential financial requirements. He assists the Comptroller in
managing 350 financial management professionals in nine countries that provide military
pay, civilian pay, and travel pay services to over 39,000 people. He also provides
direction of over 170 HQ USAFE-AFAFRICA NAF activities with assets over $137
million. He directs Comptroller plans and programs and financial operations to include
audit oversight, working issues on world-wide deployments for FM personnel, FM
quality performance measures and internal management control programs. In addition,
he maintains oversight of automated financial systems used to effectively manage civilian
pay, travel and cost accounting programs.
Keith Buchholz is a native of Hamler, Ohio and graduated from Patrick Henry High
School. He began his diverse Air Force career as a Financial Management Budget
Specialist in Acquisition in January 1988 at Wright-Patterson Air Force Base, Ohio. His
career includes experiences with Major Weapon Acquisitions, Major Command, Air
Staff, and the Office of the Secretary of Defense-Comptroller.
EDUCATION:
2012 Master’s of Science in National Resource Strategy, Industrial College of the Armed
Forces, Washington DC
2010 Air War College (Correspondence)
2009 FEI, Civilian Leadership Development Course, Charlottesville, VA
1994 Professional Military Comptroller School
1993 Master of Business Administration and Management, Wright State University,
Dayton, OH
1986 Bachelor of Science degree in Financial Services, Wright State University, Dayton,
OH
CAREER CHRONOLOGY:
Jan 1988-Apr1989, Financial Manager, Air Force Research Laboratory, Wright Patterson
AFB, Ohio
Apr1989-Aug 1990, Cost Analyst, C-17 System Program Office, Wright Patterson AFB,
Ohio
Aug 1990-Jan 1992, Cost Analyst, Aeronautical Systems Center-Cost Staff, Wright
Patterson AFB, Ohio
Jan 1992-Nov 1994, Cost Analyst, Tri-Service Standoff Attack Missile SPO, Wright
Patterson AFB, Ohio
Nov 1994-Jun 1997, Financial Manager, F-15 Development System Office, Wright
Patterson AFB, Ohio
Jun 1997-Jul 1999, Budget Analyst, HQ AFMC/FMP, Wright Patterson AFB, Ohio
Jul 1999-Jul 2001, Program Manager Automate Business Services System (ABSS), HQ
AFMC/FMF, Wright Patterson AFB, Ohio
Jul 2001-Sep 2002, Deputy Director Air Force Financial Systems Management Office
(AFFSMO), Wright Patterson AFB, Ohio
Sep 2002-Aug 2003, Transition Plan, Business Transformation Agency, Washington DC
Aug 2003-Apr 2006, Chief Architect, Wright Patterson AFB, Ohio
Apr 2006-Nov 2008, Director Information Systems and Technology, Washington, DC
Nov 2008-Aug 2011, Director, Budget and Programming, HQ Air Force, Washington DC
Aug 2011-June 2012, Industrial College of the Armed Forces, Ft McNair, Washington,
D.C.
June 2012-June 2014, Director Information Systems, SAF/FMB, Washington DC
June 2014-Present, Deputy Director, Financial Management and Comptroller USAFEAFAFRICA/FM, Ramstein AB, Germany
AWARDS
2014 - Meritorious Civilian Service Award
2013 July-September - SAF/FM Senior Leader of the Quarter - Civilian
2012 Major General Mashburn Award for Outstanding Leadership, ICAF
2011 - Meritorious Civilian Service Award
2003 - Special Acts or Service Award
1994/1998 - Notable Achievement Award
CERTIFICATIONS:
Certified Defense Financial Manager-Acquisition (CDFM-A)
Acquisition Professional Development Program Certification Level III
Financial Management/Program Management
PROFESSIONAL MEMBERSHIPS AND AFFILIATIONS
American Society of Military Comptrollers (ASMC)
Industrial College of the Armed Forces Alumni Association
USAFE - AFAFRICA
USAFE-AFAFRICA Banking Update:
Changes…Today and On The Horizon
OVERALL BRIEFING CLASSIFICATION:
UNCLASSIFIED
Deputy Director
HQ USAFE-AFAFRICA/FM
6 May 15
1
Overview
 USAFE-AFAFRICA
Snapshot
 USAFE-AFAFRICA
Financial Management
 Major
Q
Developments / Current Issues
&A
2
USAFE-AFAFRICA Mission
FORWARD
Access
Bases
Beddown
Communications
Forces
Logistics
Mobility
Throughput
NOW
Contingency Support
Engagement
Forces
New Normal
Persistent ISR
Theater Ballistic Missile Defense
READY
Airmen
Command and Control (C2)
Componency
Expeditionary
Full Spectrum
Partnerships
Global Vigilance, Global Reach, Global Power
Our Airmen and Families
Total Force – 34,700
Officer – 2,967
Enlisted – 21,464
Civilian – 10,269
AD/Civilian Dependents – 22,617
TOTAL – 57,317
Forward.
Ready.
Now!
48 FW RAF Lakenheath
Finland
Norway
Wings (9)
Sweden
GSUs (79)
Estonia
100 ARW RAF Mildenhall
Russia
Latvia
Denmark
52 FW Spangdahlem AB
UK
Lithuania
501 CSW RAF Alconbury
Ireland
Belarus
Germany
Netherlands
Poland
Belgium
Czech Republic
Slovakia
Austria
86 AW Ramstein AB
Ukraine
France
Switzerland
Slovenia
Croatia
Italy
Moldova
Hungary
Bosnia
and
Herz.
435 AW Ramstein AB
Romania
Serbia
Montenegro
Kosovo Bulgaria
Macedonia
Spain
Albania
Greece
Turkey
Portugal
65 ABW Lajes AB
Cyprus
31 FW Aviano AB
39 ABW Incirlik AB
Israel
100 ARW RAF Mildenhall
Norway
48 FW RAF Lakenheath
Finland
Kolsas
Wings (9)
Sweden
501 CSW RAF Alconbury
Stavanger
Upwood
GSUs (79)
Estonia
Copenhagen
Feltwell
Menwith Hill
Molesworth
Croughton
Waterbeach
Hohenfels
Denmark
Bremerhaven
Volkel
UK
London
Northwood
Netherlands
Ireland
Bann
Germany
Wiesbaden
Frankfurt Main
Frankfurt
Darmstadt
Schweinfurt
Mannheim
Sembach
Heidelberg
Belarus
Poland
Belgium
Heathrow AP
Lithuania
Sandhofen
Buchel
RAF Welford
52 FW Spangdahlem AB
Siegenberg
Kalkar
Fairford
Russia
Latvia
Czech Republic
Amsterdam
Rotterdam
France
Paris
Austria
Brunssum
Kleine-Brogel
Geilenkirchen
Madrid
Spain
Lisbon
Bitburg
Baumholder
Landstuhl
Einsiedlerhof
Vogelweh
Kapaun
Kaiserslautern
Rhein Brks
Pirmasens
Linate
65 ABW Lajes AB
Albacete
Moron
Italy
Katterbach
and
Serbia
Schweinau
Herz.
Vilseck
Montenegro
Kosovo
Grafenwoehr
Istanbul
Albania
Larisa
Camp Ederle
Vicenza
Mihail Kogalniceanu
Bulgaria
Macedonia
Ghedi
Naples
Greece
Tanagra
Souda Bay
31 FW Aviano AB
Note: GSUs include minor installations, forward operating bases, support sites, and detached activities
Moldova
435 ABW Ramstein AB
Hungary
Slovenia
Bucharest
Croatia
Illesheim
Romania
Bosnia
Camp Darby
Livorno
Portugal
86 AW Ramstein AB
Ukraine
Papa (HAW)
Patch Brks
Switzerland
Stuttgart
Brussels
Chievres
SHAPE
Florennes
Slovakia
Eskisehir
Turkey
Ankara
Izmir
Athens
Akrotiri
Cyprus
Yumurtalik
39 ABW Incirlik AB
Israel
Tel Aviv
USAFE-AFAFRICA/FM
Mission

Direct financial management for HQ USAFE-AFAFRICA’s
appropriated funding exceeding $1.2B annually

Lead professional staff of 45 32, providing analysis of HQ
and field-level program budget execution

Develop budget strategies; recommend funding priorities

Present and defend budget execution plans

Provide oversight/analysis of accounting responsibilities

Provide policy/guidance on financial services operations
(military, civilian, and travel pay/entitlements and banking)

Provide financial management training; ensure compliance
with regulations and public law
7
Major Developments &
Current Issues
Current Issues
Major Developments


AF Installation Management
Support Center (AFIMSC)

Emerging Opportunities

Banking/CU changes:
European Infrastructure
Commission (EIC) Implications


Alconbury Community Bank
Branch Renovation canx

Menwith Hill DoD Community
Bank closure (Sep 15)
Synchronization: Keep POCs
and banking agreements
current / updated for each site
8
Command (AFIMSC)

Serves as the single intermediate-level HQ staff supporting
AF-wide installation/expeditionary spt activities; goal is to:


Capabilities/funding will transfer from HQ/MAJCOMs and
be centralized at the AFIMSC:


Increase efficiencies; eliminate redundant activities; improve
effectiveness & business processes; reduce cost/staffs by at least 20%
Facility programs, housing, security forces, base communications,
finance, services, supply, contracting, command support programs
and other installation support programs
This centralization will affect USAFE-AFAFRICA/FM’s roles
and responsibilities for banks/credit unions

Specific details are currently being worked out with our higher HQs
and the DoD/AF Banking Officials – more to follow
9


EIC: designed to ensure efficiency/effectiveness of US
presence in Europe by consolidating/realigning infrastructure

Does not diminish US capability in Europe or ability to meet
commitments to Allies/partners

Allows US to address emerging concerns in Europe/elsewhere by
focusing resources on operational requirements & strategic needs

~$500M/yr in savings; process expected to take 5 – 7 years
Many moving parts – which, if approved by Congress &
President – repositions many units (AF & sister Services) and
thousands of personnel across Europe…while returning
several non-enduring sites to their host nations

In end, overall US presence in Europe remains relatively stable
10
EIC Implications
Major USAFE Actions

UK: Net reduction of 2K personnel over several years
Consolidate intel centers at RAF Croughton; divest RAF Alconbury &
Molesworth -- 1250 positions to Croughton / 200 eliminated
 Divest Mildenhall: affects ~3900 positions; ~2600 relocated (to
Lakenheath and throughout Europe) / 1300 eliminated
 Partially offset by two new F-35 squadrons at Lakenheath


Germany: Net increase of several hundred positions for all
Services (AF increase ~+2K, offset by redux in other Svcs)


Italy: Adds ~300 person at Aviano (from Spangdahlem)


Ramstein (Gains Mildenhall tankers); Spangdahlem (Gains Mildenhall
CV-22/MC-130J; transfers ~300 personnel to Aviano)
Part of “domino move” from Mildenhall to Spang for new msn
Portugal: ~500 person decrease in US mil/civ personnel
Exact Numbers and Timing Are Fluid…and Pending Approval11
Major Developments &
Current Issues
Current Issues
Major Developments


Support Center (AFIMSC)

Emerging Opportunities

Banking/CU changes:


Alconbury Community Bank
Branch Renovation canx

Menwith Hill DoD Community
Bank closure (Sep 15)
Synchronization: Keep POCs
and banking agreements
current / updated for each site
12
Questions?
KEY HQ USAFE-AFAFRICA/FM POCs:

FM Director:

FM Deputy Director: Mr Keith Buchholz

MAJCOM Banking
Liaison Officer:

FMP Director:
Col Rodney Berk
[email protected]
[email protected]
MSgt Mario Gabor
Ms Zahra Fraga
[email protected] (thru Jun 15)
[email protected] (effective Jul 15)
Mr Andy Coggins
[email protected]
13
Back-up Slides
14
USAFE-AFAFRICA/FM
Organization
Functional Manager
FME
CMSgt Lisa Boothe
Services
FMP
Mr. Andy Coggins
Financial Services
Military Pay
Travel Entitlements
Government Travel Card (GTC)
Banking & Disbursing Policy
Financial Systems
War Planning
Non-Appropriated Fund
Oversight
• Audit Program
• Economic & Cost Analysis
•
•
•
•
•
•
•
•
Comptroller
FM
Col Rodney Berk
Deputy
FM
Mr. Keith Buchholz
Budget
FMA
Col Seung Paik
Accounting/FIAR
FMI
Mr. Mike Witsman
• Financial Improvement & Audit
Readiness (FIAR)
• Accounting Policy & Support
• DFAS Liaison
• Command Quality Assurance
• Financial Metrics/Reporting
• Manager’s Internal Control
Program
• Financial Statements
• Defense Enterprise Accounting
and Management System –
DEAMS Implementation
• Anti-Deficiency Act Focal Point
• Tri-Annual Review
Fiscal Policy, Guidance & Training
Budget Formulation & Execution
Financial Analysis
Annual Budget Drills – Distribution,
ExPlan, 1-N Process, Closeout
• Funds Control
• Official Representation Funds (ORF)
• Support/International Agreements
(Financial Annexes)
•
•
•
•
15
Dr. Luigi Amato
Commander Navy Region Europe South West Asia
Payroll Director
Banking Liaison Officer and Credit Union Liaison Officer
Dr. Amato was born in Naples, Italy and graduated from University of Naples (Italy), where he
earned a bachelor of Business and Finance in 2000.
He also earned a Master in Corporate Finance & Banking from University of Milan, Italy (Bocconi)
in 2004.
In 2005, Dr. Amato completed his PhD in Economics and Finance of University of Naples
Economics Department (Federico II), Naples- Italy.
Since 2006, Dr. Amato also acts as a qualified member of professional accountancy body in Italy
(Ordine dei dottori commercialisti e revisori contabili di Napoli, Italy) and his expertise is used
by the Italian Government and also the EU for consultations on financial projects.
Dr. Amato, started to work with the US Navy in 1998 as a Budget Assistant and he was involved
in the preparation of yearly budget plans for all Naval Support Activity departments in Naples.
He was also responsible for preparing contingency plan reports for COMSIXTHFLT during
Operation Iraqi Freedom and other military operations connected with the Gulf War .
In addition he is involved in the end of year budget execution for the NSA command and active
in drafting of NII (Navy Improvement Initiative program) in Naples.
In 2003 ,Dr. Amato was appointed in his current role as Payroll director for NSA Naples under
Comptroller department.
In 2005, he earned the Senior Civilian of the Year award at the Naples installation for having
saved the US Navy around $1 million for his negotiation with the Italian social security agency
on the level of contributions payable and concluded such negotiations at the agreed rate
following his successful presentation of his business analysis. Furthermore in the same year, Dr.
Amato was able to also negotiate an agreement with the local Italian bank to provide its financial
services at special rates to both Italian and US communities on base. One of the negotiated terms
was to apply Zero commissions on all official banking transactions made by the US Navy which
normally would attract banking charges for other employers under similar agreements.
In 2006 this function passed under the CNREURAFSWA theater and he is currently acting as
Regional Payroll director & Banking liaison officer and Credit Union Liaison officer for the Navy
Region.
In this role, Dr. Amato is responsible for formulation of policies and procedures governing
payroll functions on CNREURAFSWA installations and has represented the US Government in
completing special projects. For instance, during 2013 spearheaded the centralization of Bahrain
payroll to a single unified payroll office based in Naples. In addition, overhauled the
timekeeping process to make it electronic based under a single system for both Bahrain and Italy
and plans to streamline these processes and systems on a single platform for the whole Region.
Since 2011 he has the role of Regional Banking Liaison Officer being the primary point of contact
for all Navy installations with the Regional theater on any banking concerns or issues.
42nd Defense Credit Union Council
Overseas Sub council Meeting
Dublin, Ireland
Commander Navy Region Europe South
West Asia
update
presented by
Dr. Luigi Amato
NAVEUR BLO/CULO
CNREURAFSWA Mission and Vision
CNREURAFSWA ORG
Rear Admiral John C. "Jack" Scorby, Jr.
Commander, Navy Region Europe, Africa, Southwest Asia
Troy D. Terronez
Comptroller
CNREURAFSWA
Kevin.F.Mooney
Executive Director
CNREURAFSWA
Over the past years there have been many changes across the
CNREURAFSWA Region.
Even though all these changes, our strategy has remained consistent
Locations
Commander Navy Region Europe, Africa, Southwest Asia is
responsible for management of six installations across three
continents
•
•
•
•
•
•
•
•
•
Naval Support Activity Naples - Italy (Europe)
Naval Station Rota- Spain (Europe)
Naval Air Station Sigonella – Italy (Europe)
Naval Support Activity Souda Bay- Greece (Europe)
Naval Support Activity Bahrain – Bahrain (Asia)
Camp Lemonnier, Djibouti- Djibouti (Africa)
NEW BASES
Poland (Redzikowo) Estimated opening in FY18 (Europe)
Romania (Deveselu) Estimated opening in FY15 (Europe)
Actual CNREURAFSWA
Region HQ
NSF
Deveselu
NSA Naples
NSA Souda Bay
NAVSTA
Rota
NAS
Sigonella
NSA Bahrain
Isa Air Base
(OCO)
Jebel Ali
(OCO)
Fujairah
(OCO)
CLDJ
ACTUAL CNREURAFSWA BANK
SUPPORT
Region HQ
NSF
Deveselu
NSA Naples
NSA Souda Bay
NAVSTA
Rota
NAS
Sigonella
NSA Bahrain
Isa Air Base
(OCO)
Jebel Ali
(OCO)
Fujairah
(OCO)
CLDJ
Aegis Ashore
Aegis Ashore Poland
Installation establishment
in FY18
Aegis Ashore
Romania
Installation
establishment in FY15
Unclassified
Logistical and Financial Challenges
•
•
•
•
Teamwork, Integrity, Pride and Professionalism:
– Operate as one team to accomplish our mission and face the many
differences in the community.
– Develop our communication with People
Resource Leadership:
– Consider the most effective/efficient use of limited resources to
accomplish our difficult missions
Provide status of action items and strategic goals; expectations;
Changes to processes, procedures, policy, business rules
Desired results:
–
–
–
–
Engagement on and inputs to improvement
Sharing best practices
Adherence to standard processes and procedures
Adherence to business rules
Military Banking Program Benefits
Quality, cost-effective services
• An on-base bank or credit union creates a
healthy competition between financial
institutions and results in an increased
availability of products and services, improved
delivery channels, and more favorable pricing
for the active duty and retired service member.
Military Community Support
• An on-base banks and credit unions support
the Command and the military community by
providing financial services, financial classes
for recruits, financial education, and
sponsorship of community activities and
programs. In addition, they create job
opportunities for military spouses and
dependents.
Greater choice, convenience
• An on-base bank or credit union offers service
members a choice of financial service providers
without going off the installation. In addition,
FIs located inside the Base Exchange provide
convenient 7-day-a-week access to financial
services.
MWR Benefits
• Banks or Credit Unions inside the Exchange reduce
operating costs for the Exchange and therefore
increase Exchange profitability enabling more funds
to be returned to installation Morale, Welfare and
Recreation (MWR) programs for installation
personnel.
DOCPER Contractor Online Processing System
BLO/CULO Requirement
•
The DoD FMR requires that each installation commander appoint a
Liaison Officer (LO) within financial management
DoD Financial Management Regulation,
Volume 5, Chapter 34
 Paragraph 340508 and 340709:
“Each installation commander having
an on-base Financial Institution (FI)
shall appoint a Liaison Officer (LO).
The LO’s name and duty telephone
number shall be displayed
prominently at each FI office on the
installation. As appropriate, the LOs
responsibility shall be assigned to
comptroller or resource management
personnel.”
Including LO appointments as part of the Installation Commander Checklist will help
ensure FMR compliance.
BLO/CULO Roles & Responsibilities
• Assign LOs as required by the FMR
Base
Commanders
(COs)
Liaison
Officers
(LOs)
Financial
Institutions
(FIs)
• Ensure LOs and FIs comply with DoD
regulations (e.g., DoD’s “One Bank/One
Credit Union per installation” policy)
• Serve as the communication link between
the COs, the FIs, and the bank/credit union
customers
• Monitor on-base service charges annually
and renegotiate as needed
• Ensure operating agreements are updated
every 5 years and a copy has been provided
to FMO
• Comply with applicable laws, regulations,
policies, & procedures
• Maintain consistent communication with
Base COs through the LO
• Ensure FIs are adequately staffed
• Provide office space and logistical support IAW
regulations
• Coordinate requests to establish or terminate bank and
credit union offices
• Inform FIs on pending developments impacting
services (e.g., deployments)
• Assist in resolving customer complaints about FI
services
• Attend financial workshops to stay informed on FI
operations
• Coordinate community / facility requirements
• Ensure installations offer no cost financial education,
training, and counseling to service members
Regional BLO/CULO tasks
• Be notified of any issues/changes in bank or credit union
operations
• Applications reviewer on DOCPER Contractor Online
Processing System for Navy federal Job applicants in Italy
• Support and coordinate with the installation BLO/CULO on any
action to be taken
• Ensure branch managers are aware of their local BLO/CULO
and that a working relationship is maintained
• Review Operating agreement (valid 5 years) every year
• Ensure that any deficiencies in banking facilities and services are
resolved in liaison with the banking manager.
Achievements
• Increased the communication between local and regional BLO/CULOs
POCs opening up the lines of communication with NFCU management
• New Community Bank location in Naples Capodichino
• ATMs Audit successful (Entire CNREURARFSWA AOR)
• Currency Importation in Bahrain-Alternative solution found
• Banking support in Romania
• DON 2015 Awards nominations
Next steps to the way ahead
• Deal with local differences and HN rules on banking rules and regulations
• Make a strategy to support remote and isolated locations within the
CNREURAFSWA AOR
• Be ready for Romania and Poland requests for banking support
• Improve technology especially for remote locations
• Working with Legal office on the military installation status of support Site
Gricignano
• Be updated on the latest changes may impact the overseas banking program
• Try to set up a Community bank branch in Bahrain
Conclusion
“A man always has two reasons for what he does-a good
one, and the real one”
J.P. Morgan
“The only way to do great work is to love what you do”
Steve Jobs
Better our service to the community , focus on improving
the quality and efficiency of services provided, giving the
necessary support to the Credit Union to achieve this.
THANK YOU
[email protected]
+0039 081 5685668
+0039 335 8257414
Thomas Heyden
Director of National Accounts
Thomas Heyden is Director of National Accounts. In this role, he works with
the country’s largest credit unions, leading a team of thirteen sales
executives. He is based in Winston-Salem, North Carolina.
Thomas joined CUNA Mutual Group in 2002, and has held numerous positions
within the organization during the past 13 years. He began his career as a Sales Executive
servicing Credit Unions in the Carolina’s, Eastern Tennessee, and Southwest Virginia. Thomas
was promoted to Sales Manager, Regions in 2011. Throughout his tenure, Thomas has qualified
for President’s Council, CUNA Mutual Group’s highest sales honor, multiple times.
Thomas brings 20 + years of experience in the financial services industry to CUNA Mutual
Group. Prior to joining CUNA Mutual Group, Thomas was the Director of Sponsor Affiliation and
Product Development for Members Credit Union in Winston-Salem, NC.
Thomas is also a Colonel in the United States Army Reserves. He serves as the Deputy
Commander in the 75th Training Division.
Thomas earned a bachelor’s degree in business administration from Elon University.
2015 Defense Credit Union
Council
CUNA Mutual Update
European Sub-Council Conference
Dublin, Ireland
May 5, 2015
CUNA Mutual Group Proprietary
Reproduction, Adaptation or Distribution Prohibited
© CUNA Mutual Group
Discussion Points
• Leadership Transition: Jeff Post to Bob Trunzo
• Strategic Vision and Operating Model
• Trustage.com: Your Insurance Aisle/ National Brand
• Introducing MemberConnect Health
• Commitment and Growth of CBSI: CBSI Investments
• Lending Results 2014
• Mortgage Payment Protection
2
Middle-America
• 30 million American households live paycheck-topaycheck
• Only 1 in 4 Americans have enough in their
savings account to cover 6 months of living
expenses
• 1 in 3 Americans have gone into collections in the
last seven years
*Note: this figure includes single premium
3
CUNA Mutual Group – Operating Model
TruStage
WEALTH
MANAGEMENT
COMMERCIAL
MIDDLE-INCOME
MIDDLE-INCOME
MASS AFFLUENT
MIDDLE-INCOME
MASS AFFLUENT
SMALL PLANS
CREDIT UNIONS
LIFE
HOME
AUTO
COLLATERAL
PROTECTION
HEALTH
ANNUITY PRODUCTS
CREDIT UNION
PROTECTION
PAYMENT
PROTECTION
RETIREMENT
DIRECT TO CONSUMER
FACE-TO-FACE
CREDIT UNIONS &
RETIREMENT PLAN ADVISORS
MEDIA, CHANNELS
& PRODUCTS
PRODUCTS,
CBSI & ADVISOR NETWORK
NEW PAYMENT
PROTECTION PRODUCTS
PRIMARY
CUSTOMER
PRIMARY
OFFERINGS
&
CHANNEL
INVESTMENT
FOCUS
SALES & MARKETING
SHARED SERVICES
SHARED GOALS
4
TruStage
5
TruStage
6
TruStage
PROTECTING MEMBERS
with TruStage HEALTH INSURANCE
PROGRAM
Because a credit union is only as healthy as its members.
Being covered
is the law for most
people.
Are your members
protected?
Medical bills are the
#1 cause of bankruptcy
in the United States
1 Source: NerdWallet Health, NerdWallet: “NerdWallet Health finds Medical Bankruptcy accounts for majority of personal bankruptcies” Christina LaMontagne on March 26, 2014
7
CUNA Brokerage
Our
Opportunity
78 million
baby boomers turn
65 in the next 20
years
10 thousand
turn 65
every day
Our Opportunity
8
CBSI Has Traction Today
• CBSI is the leading broker-dealer serving credit unions
• 250 credit union programs
• 360 financial advisors
• $3 billion in mutual fund, annuity and managed account sales
• CBSI paid credit unions more than $65 million in fee revenue
• 1/3 market share
• Differentiators - Training, Marketing, Technology
9
Focus Areas for CUNA Brokerage
Build CBSI into a “Powerhouse” (more programs, more advisors)
– 22 New Programs in 2014
– 300 New Advisors and 30 New Programs
Deliver Wealth Management products that are easy to understand and
purchase
10
Credit Union Protection – CUP/Bond
• Serve 6,300+ credit union customers
• $786 million in claims paid to credit unions
last year
• Rated “A” (Excellent) by A.M. Best Company
• Highest retention rate in the industry - 97%
average in past five years
11
Lending: Impactful Results
Dollars of Claims Paid in 2014 (in millions):
Debt Protection: $83.6
Credit Insurance: $247.9
GAP: $14.5
Source: XYZ
12
In 2014, loaliner.com saw 579,119 transactions
Dollar amount of loans protected:
Debt Protection: $13.7 billion
Credit Insurance: $35.6 billion*
13
Dollars of Non-Interest Income Paid to CUs in 2014 (in millions):
Debt Protection: $187.7
Credit Insurance: $156.1
GAP: $77.7
14
15
What is Mortgage Payment Protection?
Voluntary
Insurance
Covers
Serious Life
Events
Critical Period
Coverage
• Offered during mortgage origination process
• Helps cover monthly mortgage payment for
critical period up to maximum monthly benefit
• Involuntary Unemployment
• Disability
• Death
• Coverage for defined time period
• Can be accessed multiple times over term
• Fits economically into the family budget
16
Why consider Mortgage Payment Protection?
4
Sources:
1) NCUA data, March 2014
2)Federal Reserve, US Census Bureau, IRS, 7/9/2014 http://www.statisticbrain.com/american-family-financialstatistics/
3)Facts of Life; LIMRA, September 2014
4)University of IL, Common Reasons for Foreclosure; 1/6/15; http://web.extension.illinois.edu/toughtimes/common_reasons_for_foreclosure.cfm?2
17
Member Survey: Multiple Event Coverage
• While death is a primary concern of
many members it doesn’t often result
in credit losses
• Job loss and disability more often lead
to erosion of financial health
• These three risks—death, disability
and job loss—are significant concerns
to members
An optional product covers
only life and disability.
Source: VOC Research, 2007, 2012
Confidential and Proprietary
18
QUESTIONS?
19
42nd Annual
Thursday
May 7, 2015
Dublin, Ireland
Mike Schenk
Mike has over 30 years of experience in the financial services industry.
contributor in the financial media.
He joined the Credit Union National
Association (CUNA) in 1992 and is
currently Vice President of Economics
& Statistics for CUNA. He conducts
economic research and supports
CUNA’s public relations and lobbying
efforts. His analyses regularly appear in
trade publications such as Credit Union
Magazine. He also is a frequent
Mike serves on the board of a $2 billion credit union. He currently serves
as Board Secretary and also is Chair of his credit union’s Asset-Liability
Management Committee and its Risk Management Committee.
Before joining CUNA in 1992, Mike was Director of Research for Financial
Research Corporation, where he conducted economic analyses, competitor
evaluations and product-line planning for mutual fund companies. His
background also includes six years as Director of Interest Rate Risk
Management at the Chicago-based U.S. League of Savings Institutions.
Schenk has a Bachelors degree in Economics and an M.B.A. in Finance
with a concentration in Banking and Financial Intermediation.
With its network of affiliated state credit union leagues, CUNA serves 90% of America's 6,600 credit
unions, which are owned by over 100 million consumers. Credit unions are not-for profit
cooperatives providing affordable financial services to people from all walks of life.
1/15
Economic Update
42nd Annual Overseas Subcouncil meeting
Thursday, May 7th, 2015 • Dublin, Ireland
Mike Schenk
Vice President, Economics & Statistics
Credit Union National Association
Telephone: 608-231-4228 Facsimile: 608-231-4924
E-Mail: [email protected]
1. Economic Overview
•
Sixth year of recovery
•
Greatly improved job market but significant slack
•
No inflation in sight
•
A variety of positive developments recently
•
But risks are obvious
Average US GDP Growth
Over Five Years Following Trough
4.1
2.4
09Q2 to 14Q4
Previous Ten Recessions
Total U.S. Non-Farm Employment
(Data Source: BLS. In Millions.)
141.2
138.4
138.4
129.7
Household Debt
Percent of Disposable Income
Source: Federal Reserve and BLS.
1.4
Mortgage
Consumer
1.2
1.0
4Q ‘07 = 124.1%
0.8
4Q ‘14 = 96.4%
0.6
End of 2001 Recession: 4Q ‘01 = 92.7%
0.4
0.2
0.0
1980Q1
1982Q1
1984Q1
1986Q1
1988Q1
1990Q1
1992Q1
1994Q1
1996Q1
1998Q1
2000Q1
2002Q1
2004Q1
2006Q1
2008Q1
2010Q1
2012Q1
2014Q1
Light Vehicle Sales
(Cars + Light Trucks. Source: BEA)
18,000
16,435
492
1,560
3,266
4,445
2,805
14,000
5,599
18.3 Million
16,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2007 = 16.1 million
2008 = 13.2 million
2009 = 10.4 million
2010 = 11.6 million
2011 = 12.7 million
2012 = 14.4 million
2013 = 15.5 million
2014 = 16.4 million
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US Real Median Household Income
$51,939
$54,674
$56,436
$51,758
$51,719
$49,594
$51,735
$56,895
(Source: Census Bureau)
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
CUNA Economic Forecast
March 2015
Actual Results
5Yr Avg
2014
2015:1 Quarterly Results/Forecasts
2015:2 2015:3 2015:4 Annual Forecasts
2015
2016
Growth rates:
5.10%
3.00%
1.25%
1.75%
5.25%
3.25%
2.00%
2.00%
4.90%
0.75%
2.75%
2.00%
0.32%
2.50%
2.18%
1.50%
3.25%
Economic Growth (% chg GDP)*
Inflation (% chg CPI)
Core Inflation (ex. food & energy)
Unemployment Rate
2.20%
1.99%
1.65%
8.04%
2.40%
1.61%
1.75%
6.20%
2.00%
4.00%
3.00%
3.00%
5.40%
5.30%
5.20%
Federal Funds Rate
10‐Year Treasury Rate
10‐Year‐Fed Funds Spread
0.12%
2.54%
2.42%
0.09%
2.54%
2.45%
0.10%
2.25%
2.15%
0.13%
2.50%
2.37%
0.30%
2.50%
2.20%
.
* Percent change, annual rate. All other numbers are averages for the period.
1.75%
2. Credit Union Impact &
Operating Trends
•
Fast membership growth
•
Increasing loan growth
•
Slower savings growth
•
Vastly improved asset quality
•
High earnings (with low but increasing interest margins)
•
Tremendous variation
Fast Membership Growth
(Source: NCUA and CUNA)
12-month Growth
20-Yr. Avg. ~ 2.1%
3.1
3.0
3.0
'15E
'16E
2.5
2.1
1.6
1.5
1.4
1.3
0.7
'07
'08
'09
'10
'11
'12
'13
'14
Size Matters
(Source: NCUA and CUNA)
2014 CU Loan Growth
By Size
2014 CU Membership Growth
By Size (%)
6.3
13.0
11.4
5.2
8.6
7.5
1.4
1.8
5.3
0.5
2.6
3.6
-0.7
-1.6Mil.
<$20
$20 to $50
$50 to $100
$100 to $250
$250 to $500
$500 to $1B
$1B+
<$20 Mil.
2014 CU Operating Expense
By CU Asset Size
355
367
367
353
$50 to $100 $100 to $250 $250 to $500 $500 to $1B
2014 CU ROA (% of Average Assets)
By Size
(BP of Average Assets)
365
$20 to $50
$1B+
0.95
0.81
340
0.65
273
0.56
0.47
0.31
0.10
<$20 Mil.
$20 to $50
$50 to $100
$100 to $250
$250 to $500
$500 to $1B
$1B +
<$20 Mil.
$20 to $50
$50 to $100 $100 to $250 $250 to $500 $500 to $1B
$1B+
3. Consolidation
•
A long-term trend
•
Losing roughly one CU per business day
•
NOT failures
•
Trends are similar in banking industry
•
Why?
•
Opportunities abound
WHY?
• Compliance and regulatory burden
• Continuity
• Collaboration
• Capital/Competition
4. Competitive Landscape
•
Larger, more aggressive & gaining market share
•
Banker attacks continue
•
Value proposition and strategy more important than ever
•
Consumer perspective
•
•
•
•
•
•
Focus on service to low income
Going after individual institutions
Shocks/disruptive life events
Basic literacy
Retirement
Education
U.S. Bank and Credit Union Size Comparisons
Year-End 2014
Total industry assets
JP Morgan Chase total assets
Bank of America total assets
Wells Fargo Bank total assets
Citibank total assets
Banks
Credit Unions
$15.6 trillion
$1.1 trillion
$2.1 trillion
$1.6 trillion
$1.5 trillion
$1.4 trillion
Average institution asset size
$2.3 billion
$173 million
Median institution asset size
$ 181 million
$25 million
% of institutions with $25 million or
less in total assets
3%
50%
% of institutions with $100 million or
more in total assets
71%
24%
Sources: FDIC, NCUA, CUNA.
Big Banks Increasingly Dominate
Market Share of Total Assets
Sources: FDIC, NCUA, CUNA.
100%
90%
Largest 100 Banking Institutions
(1992 market share = 41.1%; 2014 market share = 75.1%)
80%
70%
60%
50%
40%
30%
20%
Smaller Banking Institutions
(1992 market share = 53.3%; 2014 market share = 18.2%)
10%
0%
Credit Unions (1992 market share = 5.6%; 2014 market share = 6.7%))
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Credit Union Financial Benefits
Full-Year 2014 Estimate - Billions
Source: CUNA Policy Analysis
$7.1 Billion
$4.763
$2.763
$1.238
Higher Savings Yields
$1.084
Lower Interest Rates on Loans
Fewer & Lower Fees
Nonmember Benefits
CUNA Credit Union Forecast
March 2015
Actual Results
5Yr Avg
2014
Growth rates:
Savings growth
Loan growth
Asset growth
Membership growth
Quarterly Results/Forecasts
2015:1
2015:2
2015:3
2015:4
Annual Forecasts
2015
2016
4.8%
4.5%
4.8%
2.0%
4.5%
10.4%
5.7%
3.1%
1.2%
1.8%
1.5%
0.7%
1.2%
3.0%
1.3%
0.7%
0.8%
3.3%
1.2%
0.8%
0.8%
3.0%
1.0%
0.8%
4.0%
11.0%
5.0%
3.0%
3.0%
10.0%
4.0%
3.0%
Liquidity:
Loan‐to‐share ratio**
71.3%
75.1%
75.5%
76.9%
78.7%
80.4%
80.4%
85.9%
Asset quality:
Delinquency rate
Net charge‐off rate*
1.27%
0.77%
0.85%
0.49%
0.83%
0.48%
0.80%
0.45%
0.78%
0.44%
0.78%
0.44%
0.80%
0.45%
0.75%
0.45%
Earnings
Return on average assets (ROA)*
0.72%
0.80%
0.80%
0.80%
0.80%
0.80%
0.80%
0.80%
Capital adequacy:
Net worth ratio**
10.5%
11.0%
10.6%
10.7%
10.8%
10.9%
10.9%
11.2%
* Annualized Quarterly Data. ** End of period ratio. Additional information and updates available on our MCUE website.
Nancy Langer
EVP, Chief Product Officer Enterprise Product Organization Nancy Langer is the executive vice president and chief product officer for FIS and leads the company’s Enterprise Product Organization (EPO), which defines and governs all product strategy and product investments for FIS. Langer’s EPO also leads all innovative product R&D for the company, including core modernization and transformation solutions, commercial and retail payment transformation solutions, and digital next generation solutions. She also leads the FIS Innovation Investment fund, which enables FIS to take strategic equity positions in partner companies. Langer started her career at M&I Data Services (which later became Metavante and is now a part of FIS) in 1985. From 1985 through 1995, she held several technology and client roles in the Conversion Services division, including associate vice president of Client Services, senior program manager, senior project leader and conversion programmer. From 1995 to 2002, Langer launched and grew the Electronic and Internet Banking business to a multi‐
million‐dollar revenue business with hundreds of bank clients. FIS was the processor for the first Internet banking transactions during this time. She also served as president of the Electronic Bill Payment business, launching and growing it to a multi‐million‐
dollar revenue business with thousands of financial institution clients. She left FIS in 2002 and returned in 2008. Prior to rejoining FIS in 2008, Langer was president of Enterprise Financial Solutions at Wausau Financial Systems. She also previously served as president and director of Billeo, Inc. and as president of Global Payment Consulting at Carreker Corporation. www.fisglobal.com
Langer holds a bachelor’s degree in management information systems from the University of Wisconsin‐Eau Claire and completed an Executive MBA curriculum at Northwestern University – Kellogg School of Management. She has served as director of Fort Knox ©2014 FIS and/or its subsidiaries. All Rights Reserved.
42ND ANNUAL DCUC OVERSEAS
SUBCOUNCIL MEETING
MARKET TRENDS IN DIGITAL BANKING
AND PAYMENTS
Nancy Langer
EVP and Chief Product Officer
AGENDA
• FIS Corporate Overview
• FIS Enterprise Product Organization (my role/mission)
• Market Trends Causing Major Disruption and Change
• Industry Reaction/Priorities
– Platforms to Enable A Whole New Ddefinition of Digital and Customer Centricity
– Digital Payments – Tokenization, Mobile Wallet Participation and Global Real Time Payments
– Low Cost Banking
• Closing Comments
ENTERPRISE PRODUCT ORGANIZATION
FIS CORPORATE OVERVIEW
WORLD’S LARGEST GLOBAL PROVIDER DEDICATED
TO BANKING AND PAYMENT TECHNOLOGIES
4
STRONG TRACK RECORD OF GROWTH
5
GLOBAL PROCESSING SCALE
28B
# TRANS
PROCESSED
$5.5T
$ MOVED
848M
CARDS
PROCESSED
30M
MOBILE
BANKING
USERS
6
WE ARE IN NUMEROUS INDUSTRY VERTICALS
•
Nine out of the top 10 global banks are FIS clients
•
Nearly 75 percent of all U.S. credit unions
utilize a solution or service from FIS
•
FIS serves 18 of the top 25 national retailers
•
FIS is a leading provider of third-party card
processing in Brazil, Australia, New Zealand
and Thailand
International is the fastest growing segment for FIS
7
2014 AWARDS AND RECOGNITION
8
UNIQUE BUSINESS MODEL WITH DEEP DOMAIN
EXPERTISE ACROSS A BROAD GLOBAL SCALE
9
Investments
Aligned to
Company Wide
Product Strategy
Accelerate
Customer
Focused
Innovation
MULTI-DIMENSIONAL INVESTMENT APPROACH
VC Like
Investments
Bold
Rocket
INNOVATION
AS A
DIFFERENIATOR
Product
Acquisitions
R&D –
Build
Regeneration
of Assets
INNOVATION LABS
San Francisco
New York City
London
MARKET TRENDS CAUSING MAJOR
DISRUPTION AND NEED FOR CHANGE
MILLENNIALS ARE NOT FANS OF BANKS…
60%
Of millennials want start-up firms to overhaul how banks work
75%
Prefer financial services from Google, Amazon, PayPal, etc.
53%
Say all banks are the same
33%
Are ready to switch banks in the next 90 days
71%
Would rather go to the dentist than listen to a bank’s message
Source: Why Millennials Would Choose a Root Canal Over Listening to a Banker. Time Magazine, Dan Kadler, March 28, 2014 and other, The Millennial Disruption Index, 2014.
VIDEO
WE ARE ALSO
LISTENING TO
CHANGING
CONSUMER
EXPECTATIONS
FROM PREMILLENINALS
WE ARE THE FUTURE VIDEO
HTTPS://VIMEO.COM/125920802
PASSWORD: DCUC2015
PLATFORM NEEDED TO ENABLE A WHOLE
NEW DEFINITION OF DIGITAL AND
CUSTOMER CENTRICITY
REQUIREMENTS TO RESPOND…
EXPERIENCES
ENABLERS
ENGINES
Banking
Payments
CHANGING CUSTOMER EXPECTATIONS
VIDEO
EXPERIENCES
EXPERIENCES VIDEO
HTTPS://VIMEO.COM/125920803
PASSWORD: DCUC2015
THE IMPORTANCE OF ACTIVE ANALYTICS - PREDICTIVE CAMPAIGN EXECUTION
DRIVEN BY KLI’S (KEY LIFE INDICATORS) AND CUSTOMER INSIGHTS
•
•
•
•
•
•
•
•
Male
Mobile Banker
Jumbo Mortgage
Trust Account Holder
Mutual Fund Investor
Income $500K+
College Tuition Payor
Golfer
•
•
•
•
•
•
Male
Has young children
Engaged
Long-term Renter
Elite Money Market
Inc. Home Furnishing
Spend
• Auto Hobbyist
• Female
• Business Checking
Account
•
•
•
•
•
Sustained Revenue 15%
Excellent Credit
Payroll Service User
Competitive Loan
Total Benefit Provider
($100-500K)
•
•
•
•
•
•
•
•
Male
Checking Account
Competitive Credit Card
Avid Air Traveler
Charitable Donor
Enjoys Luxury Hotels
Wholesale Shopper
High Fuel Spend
23
APPROACH…HAVE TO GET TO INSIGHTS
AND PREFERENCES
MUST CREATE A
GATHER DATA
360° VIEW
PATENTED
*
TECHNOLOGY KLIS
ANALYTICS
*KEY LIFESTYLE INDICATORS
250,000+
UNIQUE KLI CAMPAIGNS
UNIQUE KLIS
REAL-TIME
DELIVERY
PICTURES OF CUSTOMERS
HAPPY CUSTOMER
o CREATE RELEVANCE AT EVERY CUSTOMER INTERACTION
o STRENGTHEN CUSTOMER LOYALTY
o INCREASE REVENUE AND SHARE OF WALLET
24
NEED FOR A COMPREHENSIVE PLATFORM THAT INCLUDES DATA
INGESTION, CAMPAIGN MANAGEMENT AND AD DELIVERY
Data Inputs
Data feed (12-24) Months
No PII
Digital Channels
Customer
Online Banking
Deposits
Tablet
Loans
Analytics
Campaign Mgmt.
Delivery
Mobile
Mortgage
Bank website
Bill Pay
Open Internet
Credit Card
Assisted channels
Debit Card
Teller
Acxiom Segment
Sales
Preference Mgmt.
Third party
Responses, Attribution, and Revenue Metrics
25
MAINTAIN A BROAD MIX OF “ALWAYS ON” CAMPAIGNS
Unlike traditional campaigns with defined start and end dates, FIS Pinpoint Marketing campaigns are
always running to provide the right offer at the right time…
Traditional Campaigns
CD
Mortgage
Mortgage
Mobile
Jan
Feb
Mar
Mobile
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jul
Aug
Sep
Oct
Nov
Dec
“Always On” Campaigns
CD
Mortgage
Mobile
+ 15 More Campaigns
Jan
Feb
Mar
Apr
May
Jun
Missed opportunity
26
PAYMENTS: TOKENIZATION AND WALLETS
AND GLOBAL REAL-TIME PAYMENTS
WHAT IS DRIVING THE MARKET TO REAL-TIME?
Card models are under attack, business models are changing
Mobile and digital technology has changed life as we know it
NFC
Regulatory intervention is remaking the face of commerce
WHILE INNOVATORS PUSH, INCUMBENTS REACT
•
Innovators
–
–
–
–
–
•
FIS: Invested in PayNet real-time non-card payments in 2012, only real time DDA ready for prime time
Apple Pay: basic tokenized payment card model, data and more tomorrow
MCX: Leveraging scale to try and trump ecoms and card companies
PayPal: purchased Paydiant to penetrate POS market and disrupt Apple momentum
Xoom, MGI, Trans-Fast, Earthport, Ripple (MTOs)
• All want to leverage real-time debit or good-funds model; similar to MasterCard’s HomeSend
Incumbents
–
–
–
–
TCH: Announced tokenization service and project to gather requirements for Faster Payments with
support of 24 bank owners
NACHA: Proposing same day ACH
EWS: Owned by largest US banks for check authorization and needs to stay relevant
MasterCard: Working on a domestic and cross border faster payments – HomeSend
29
MOVING TO NON-CARD REAL TIME…FIS PAYNET
ACH Benefits
EFT Strengths but
NOT EFT
PayNet Value
PayNet combines the best features of ACH
and EFT into one real time network
GLOBAL REAL TIME PAYMENTS – THE WORLD HAS
SET THE REAL-TIME STANDARD
Notes:
In systems with multiple
speeds, color indicates
the fastest speed.
Rule makers covered
• APCA (Australia)
• CPA (Canada)
• EPC (SEPA)
• NACHA (U.S.)
• Payments Council (U.K.)
Real-time systems
Same-day systems
Next-day systems
PERSPECTIVE ON TOKENIZATION
• Payments are Becoming Completely Digital, with the Following Implications
– Increased competition, politicization, and price compression
– Payment networks are evolving from hub and spoke to peer to peer
– Value is moving from the payment instruction to the data surrounding it
– It’s not how you pay, but for what, why, when, and where, that matters
• Tokens are the Oil of Digital Payments and Perhaps More Digital Data (KYC), Enabling Scale, Flexibility, and Speed – They are therefore crucial to modern payment strategy and crucial that banks/FIS play central role in provisioning tokens
LOW COST BANKING
THE IMPACT OF REGULATION & CHANGING MARKET
DYNAMICS
The days of barbell profitability in retail banking are ending
The forgotten 80%
The small pool of high-end customers and extreme NSF-paying
customers will no longer subsidize the mass market
Cost of Servicing
Spread
Income
Spread
Fee
Income
‐
1
Income
2
3
4
5
6
7
8
9
10
Illustrative Customer Profitability Deciles
Banks must find ways to:
• Migrate transactions/interactions to less
•
•
expensive channels
Generate new fee income sources
Encourage customers to bring greater wallet
share to the primary bank
But the research tells us that:
• Consumers actively use multiple channels,
•
•
including the branch
Are very fee sensitive
Seem willing to consolidate, but still maintain
relationships with multiple providers
WHAT IT SHOULD LOOK LIKE WITH LOW COST
BANKING OFFERING
The days of barbell profitability in retail banking are ending
Majority of Customers
Minority of Customers
“Simple”
Banking Products
“More Complex”
Banking Products
“Common”
Channel and Payment Products
The forgotten 80%
The small pool of high‐end customers and extreme NSF‐paying customers will no longer subsidize the mass market
Fee Income
Spread Income
Spread
Cost of Servicing
Income
Fee Income
‐
1
2
3
4
5
6
Illustrative Customer Profitability Deciles
7
8
9
10
PREPAID LOW COST BANKING
Analytics
Spend Tracking
P2P
Legacy Core
Platforms
Rewards
ATM
Prepaid Platform
Mtg. Lending
Checking
Core
Savings
Mobile
Online Banking
Walk In Services
Savings
Branch
Bill Pay
Mobile RDC
Teller Platform
CLOSING THOUGHTS
Biography
Roland “Arty” Arteaga
President and Chief Executive Officer
Roland "Arty" Arteaga has been serving as the President/CEO of the Defense Credit Union Council (DCUC) since 1 March 2000. In this capacity, he represents the interest of credit unions operating on military bases worldwide, serving as their primary liaison to the Pentagon. Over the past fifteen years, Mr. Arteaga has worked diligently with the Department of Defense (DoD) on matters affecting defense credit unions and the financial quality of life of DoD personnel. During the past year alone, Arteaga has been engaged on such issues as, the Military Lending Act rules; discretionary allotment policy; the Department's personal commercial solicitation policy; overdraft protection and the reordering of transactions; base access for non‐profit non‐federal entities; the One Credit Union/One Bank policy; the DoD Financial Management Regulation; Morale Welfare and Recreation sponsorships; no‐cost land lease policy; and overseas credit union operations, to include the impact of Army Air Force Exchange Service (AAFES) operations on DCUC member credit unions. Aside from his primary duties, Mr. Arteaga has served and participated in a number of committees and campaigns focused on financial capability, such as the President's Advisory Council on Financial Capability (PACFC), where he and his fellow council members advised the President of the United States and Secretary of the Treasury on means to promote the financial capability of all Americans ...and the White House's Joining Forces Military Financial Capabilities Thought Leadership Symposium. He is an active member of the Department's Financial Readiness campaign; DoD's Financial Readiness Roundtable; the Financial Readiness Communities of Practice group; and the Military Saves campaign. Prior to joining DCUC, Mr. Arteaga worked for Bank of America, as the Vice President of Government Card Services, for six months...and served in the United States Army, in various leadership positions, both as an Infantry Officer and a Finance Officer/Comptroller. Key among his assignments were his tours of duty as the Battalion Commander of the 230th Finance Support Command, including a deployment with the 18th Airborne Corps for Operations Desert Shield/ Desert Storm...and as a Senior Military Assistant/Advisor to the Assistant Secretary of the Army for Financial Management. On 1 September 1999, Colonel Arteaga retired from the United States Army after 28 ½ years, closing his career as the Commander of the United States Army Finance Command. Mr. Arteaga has an Undergraduate degree in Economics (BA) from St. Mary's University and a Masters' degree in Business Administration from Webster University. He and his wife, Carol, reside in Virginia. 601 Pennsylvania Avenue, NW, South Building, Suite 600 • Washington, DC 20004‐2601 Tel: 202‐638‐3950 • Fax: 202‐638‐3410 • E‐mail: [email protected] • www.dcuc.org Department of Defense Credit Unions --- Serving Those Who Serve Our Country

Loan Trends - Defense Credit Union Council

Transcription

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