Cybersecurity starts with you.

“It’s about people,” said Nabil Hannan, managing director at cybersecurity firm NetSPI when asked when cybersecurity goes right and when it goes wrong.  He added in this podcast that Covid-19 and credit union responses have triggered their own cybersecurity issues that are very particular to today.

But they also need timely responses to thwart hackers.

Case in point: some workers are instructed to take their desktop computer home to work.  Question: does that box have full disk encryption set up? Many office computers do not. But what if it is stolen from the home?

Maybe even worse, some organizations sent workers home with older machines running old versions of Windows – including XP – and the bad news is that hackers already have bots scouring the net looking for XP machines because there are readily available hacking scripts that effectively automate an attack. No computer skill is needed by the hacker who has found an XP machine.

Hannan also has worked on cybersecurity issues that arise when two institutions merge – something many experts believe will happen with accelerated frequency among credit unions dealing with the fallout of the Covid-19 impacts on the economy.

In one case he worked for 2-1/2 to 3 years sorting out cybersecurity issues that arose when two large financial institutions merged.

 Two credit unions probably won’t have that much complexity.  But even a merger of small credit unions raises cybersecurity complexities because generally the two institutions will have divergent approaches and a common ground has to be found and implemented. ASAP.  Because hackers hunt for gaps and exploit the ones they find.

A bottomline problem: too many credit unions see cybersecurity as a cost. Period.  It does cost. That’s a fact. But think of the enormous costs of a security failure.  What hurts more?

Don’t think this is a techie podcast. It’s not. It’s an enjoyable – intelligent – look a what a credit union executive needs to know about cybersecurity in today’s Covid-19 world.  It’s not just for propellerheads. It’s news you need to know.

Listen up.

Fyi: Hannan has his own podcast, Agent of Influence.  Hear it here.
Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.comFind out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

America’s housing stock is old – often over 50 years of age in much of the nation and owners want, need, improvements to live in the home they want.

The problem: many buyers stretch to buy their home and they do not have that much equity built up, even after five or perhaps even ten years in the house. But now there are two more children, maybe a grandparent, added to the family and where does everybody sleep.

Historically, home improvement loans have ignored an obvious reality: many projects significantly increase the value of the home,

Sure, some do not – pools usually, saunas, a green house.

But add a bedroom,or a bathroom, or update a kitchen and that house is worth more money.

TV watchers know that from HGTV’s long-running “Love It Or List It” where after every reno, the realtor tells how much more the house is worth. Similar happens on “Fixer Upper.”

So why can’t a loan be created around the probable higher value of a home post renovation?

Why not indeed. That’s what the founders of Renofi asked and they now have created a fintech to help credit unions make loans based on that calculation.

In the process, Renofi has processes for calculating what value in fact a particular renovation will add in a specific market and also conducts due diligence on the contractor associated with the project.

Renofi already works with several credit unions – you will hear specifics in the podcast – and wants to hear from more.

Here’s what Renofi tells credit unions about itself: “RenoFi is a turn-key, end-to-end growth channel. We help our partner Credit Unions grow their loan portfolio by delivering highly-qualified new members seeking home renovation loans that meet your institution’s specific underwriting criteria.”

Sound good?

Listen to the podcast to learn more specifics.

And check out Renofi’s website.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.comFind out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

By Robert McGarvey

Many of us lately are consumed with one question: to fly or not to fly?  And in my case that has led me to catalog, perhaps exhaustively, the many failings of airplanes and carriers regarding sanitation, from filthy tray tables and restrooms to a failure to block middle row seating and a failure to enforce requirements for facemasks.  

But just maybe my eyes are on the wrong problem.

Carriers, if they have the will, probably can defeat Covid-19 on board. The CDC, in a travel bulletin, tells where the weak spots are: “Most viruses and other germs do not spread easily on flights because of how air circulates and is filtered on airplanes. However, social distancing is difficult on crowded flights, and you may have to sit near others (within 6 feet), sometimes for hours. This may increase your risk for exposure to the virus that causes COVID-19.”

The antidote is to in fact provide social distancing (fewer passengers) and also require facemasks.  If enough of us spurn air travel, carriers – for profit businesses with demanding shareholders – will do what needs doing to persuade us to fly again. And carriers already are showing signs of doing more.

And then my eyes land on this in the CDC travel bulletin: “Air travel requires spending time in security lines and airport terminals, which can bring you in close contact with other people and frequently touched surfaces.”

The average airport today is about as busy as a graveyard at midnight on a Monday but that will change.  There will be long lines – lots of people! – at security, check in, even the food courts. 

Thus this worrisome Travel Weekly article: “Airports prepare for crowding challenges.”

The article noted: “If we can’t make a safe, healthy and comfortable passenger experience coming out of this, we are going to end up with a protracted downturn,” said Chris Oswald, senior vice president of technical and regulatory affairs for the trade group Airports Council International — North America. Oswald said airports are “very concerned” about the difficulties that await when they must balance social distancing with traffic.

You got that right.

But can we trust airports to do the right thing?

The New York Times reported: “As to the airports, they are screening passengers’ temperatures through high- and low-tech means; using biometric screening to speed check-in, security and customs and immigration processes; and using autonomous robots to clean terminal floors.

But none of it is consistent. And it’s unclear whether the measures are enough.”

There are the problems: Does what airports do actually work? And the money question – what will they do when the first busy travel days hit them (Thanksgiving?)?

Some airports – mainly abroad – are busy putting tape on the floor and signs on the walls to remind passengers to stay 1.5 meters (6 ft.) apart. But will they?

Germans might in Munich Airport. But what about the restive crowds at EWR?

Will they follow the guidelines when there are more of us in the airport?

Some airports – Hong Kong for instance –  require a coronavirus test when a passenger lands.  But so far that is not a widely adopted protocol. No US airport has anything that rigorous and it is hard to see same, not this year.

Exactly how much testing and surveillance will passengers – especially US citizens – tolerate?  Right now much of the US seems intent on prematurely overthrowing land-based social distancing guidelines (at restaurants, barber shops, etc).  That they will obey strict distancing rules in airports is unlikely.

Where does this leave us? Basically to believe airports are safe we need to believe public and quasi public entities will in fact enforce protocols that might inconvenience many flyers but will keep us safer than if we did not have them.

And we have to believe almost all flyers will follow the guidelines.

In a country where many of us proudly report we don’t wear facemasks – despite the evidence that wearing them keeps everybody a little safer – it is difficult to believe government entities will insist upon and enforce the same sanitation protocols (such as wearing facemasks) at airports around the country.

It is impossible to believe just about all of us will in fact obey guidelines regarding social distancing and mandatory facemasks at airports.

And that is why I now believe it is airports that will keep me from a quick return to flying.  Many of us are determined to ignore commonsense and medical evidence, too many governments will appease that attitude, and the upshot is that it we ourselves who will be making our airports unsafe for flyers.

What will blow your mind as you listen to this podcast is how savvy and smart the guest is. That’s Sahil Pankhaniya, a 20 year old student at George Washington University in Washington DC who is pursuing the launch of a wholly new, student run credit union credit union at the Washington DC institution.

How cool is that.

The effort has been written up in Credit Union Times, and here Mr. Pankhaniya talks for himself.

Know this: he thinks very big. What if, he asks, if they can roll out credit unions at universities across the nation? What if indeed.  Not only would that get students familiar with credit unions it also would provide a stream of trained potential hires for credit unions.

The hope is to launch the credit union in the fall, a date that had been May but the coronavirus epidemic has pushed that back.

Pankhaniya and his fellow students also need to raise around $55,000 more to meet NCUA’s capital requirements.

It’s an exciting story. Listen up

Along the way, we discuss CUNA’s “Open Your Eyes” campaign – hear our podcast with Teresa Freeborn on this.

Know too that a recent podcast guest, Bill Kennedy, is a booster of this effort. Hear him on students and their need for mentors here. 

And to learn more about start up Maine Harvest – now successfully chartered – listen here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

How could we build a lending tool that anybody could use?

That is the driving thought that led Sherif Hassan to form fintech Capiform and the timing could not be better.

That’s because, with the Covid-19 pandemic and the ensuing recession, suddenly credit unions are awash with savings deposits (as investors flee equity markets) and they also see a rush of loan applicants, for everything from Covid-19 triggered SBA loans through equipment leases.

How to efficiently handle the volume?

Know that right now deposits are arriving at much large volume than are loans at credit unions – despite the member needs.

Remember, too, mega banks, for the most part, have scant interest in “small” loans which to them often means under $250,000. But to a typical credit union that size loan is ideal and even smaller may be better.

But the mega banks shy away from those loans because they don’t see how to make money on them.

How could a credit union hope to? That’s where Capiform’s tools come in, where the borrower does much of the work and that’s augmented by computer tools (that verify income, check identity, etc). Much of the process is automated. According to Hassan, using his tools, a credit union could easily process 10X more loans, maybe 20X, daily without stressing staff who would engage only in higher level tasks such as verification and loan approval.

Adds Capiform, “Capiform’s Lending-as-a-Platform empowers you to scale your lending portfolio immediately, configure underwriting instantly and deploy new compliance & product guidelines.”

Sound good?

You bet and the timing is so right.

In this podcast you will hear about how the Capiform tools were developed, what they do and how, and the real benefits they could bring your credit union.

Listen up.

Want more info? Contact Capiform at its website.

In this podcast there’s mention of the David Chang podcast.  Listen here.  Note: Chang uses many four letter words. Not for delicate ears.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

The NCUA lit this bonfire when in early May it tweaked the criteria for a credit union to win designation as a low-income credit union. That matters because an LICU gains significant flexibility in how it can do business, notably it can accept deposits from any source and gain exemption from aggregate loan limits on member business accounts.

Remember the NCUA change is a tweak, nothing more. What the regulator did was change the rules to allow counting of Post Office Boxes as addresses. Before, that was a no-go; only street addresses counted. It is believed this tweak will allow counting of more military personnel, many of whom are said to use PO Boxes as addresses.

You might think that in the midst of the nation’s worst economic collapse in 90 years, there would be applause for this NCUA broadening of the criteria for qualifying as a low-income credit union.

You would be wrong, however, because the Independent Community Bankers of America (ICBA) sees a Trojan horse conspiracy. They think credit unions are using the benign appearance of servicing low-income segments—which few oppose—to forward an agenda letting credit unions engage in “unbridled commercial lending.” Lots of it, in fact, complained ICBA in a statement by CEO Rebeca Romero Rainey, in which she implores Congress to review the NCUA action.

ICBA went on: “Today’s sudden National Credit Union Administration move to change its methodology in designating low-income credit unions benefits neither low-income Americans nor military personnel—but the largest, most growth-obsessed credit unions, which continue to be subsidized by taxpayers.

“The NCUA’s changes—made without a formal rule subject to public review and comment—is another example of this captive regulator expanding the powers of credit unions well beyond the limits established by Congress to justify their tax exemption.”

Ouch.

CONTINUE READING AT THE CU2.0 BLOG

By Robert McGarvey

New data from consulting firm McKinsey suggests an intriguing – if troubling – possibility: just maybe we are waiting for a vaccine before we will fly again.

Talk about a spanner in the works.  That’s because realistic forecasts envision it taking 12 to 18 months before a safe, tested vaccine could be made available to a broad segment of the public.  Noted the Mayo Clinic, “Realistically, a vaccine will take 12 to 18 months or longer to develop and test in human clinical trials. And we don’t know yet whether an effective vaccine is possible for this virus.

“If a vaccine is approved, it will take time to produce, distribute and administer to the global population.”

Figure mid 2021. In the best case.

Other experts offer similar predictions.

Are you prepared not to fly until late 2021?

International travel is especially bashed in the McKinsey numbers, with 38% of us envisioning less of it.

The UN World Tourism Organization is saying international arrivals may slump by 78% this year.

The International Air Transport Association is saying it won’t revive until 2023.

But probably you could argue that the problem isn’t crossing borders, it’s duration of the flight – so maybe there’s also diminished enthusiasm for cross-country travel too. We just don’t want to be in a confined airplane with many other passengers for a lot of hours – and so we aren’t flying long trips.

Isn’t flying safer now? Aren’t airlines implementing new sanitary and health protocols?

Nah, not so you can trust them (last week’s column documented the many industry lies).  Yes, the carriers have banged their drums loudly, insisting they are safer, but I don’t believe them.

In fact not even the pilots feel safe.  The head of the Airline Pilots Association is on record saying the current protocols just don’t go far enough.

They don’t and know too that they simply are not enforced.  Most carriers are selling middle seats, they are not insisting passengers wear masks, and basically they are ignoring many of the rules they themselves wrote.

Remember, too, from 25 to 50% of coronavirus cases are asymptomatic.  That is a terrifying factoid.  See a person who is sniffling, sneezing, coughing and it’s a no brainer to cross the street or seek to change seats on a plane.

But what do you do in an elevator – that person next to you may be a carrier, without any symptoms.  He/she feels healthy. They are not being a jerk out in public spaces.  

The same could happen with an airplane seatmate.

And yet they just may be making you very sick because they may be positive for coronavirus but display no symptoms.

Thus the growing belief that only a vaccine will make us safe.

A temperature check is meaningless.  Self-reporting is too.

If you want to stay safe you need a vaccine if you plan to go out in bustling public spaces such as airports and airplanes.  

That’s especially true for older and more vulnerable populations that may not survive coronavirus because, of course, we still have no treatment (bleach is not widely accepted in medical circles).  

Can planes be made safe?  There’s a money question because if it takes a couple years for a vaccine that will reduce passenger anxiety, the question would be if any airlines will be left flying.

Scan the expert literature and probably – there is no certainty here – planes can be made safe with significant space between passengers, plastic screens to encase each passenger, really deep cleaning between flights and down a list of known protocols.

At what cost?

You hear estimates of a 50 to 100% bump in ticket prices. IATA, for instance, eyes a 50% bump.

Will businesses pay? Probably, especially if their employees can reasonably expect to stay safe and if – as many experts now believe – business travel volume will be significantly reduced for some years to come.

Will leisure travelers pay?  That is hard to say, especially because it is presently impossible to know how much damage the average household will suffer in this economic depression.  How many years will it take to recover from this wipeout?

The probable reality: there is going to be much, much less longhaul travel for some years to come.  If you have never been to the Seychelles, probably you aren’t going soon.

If you have routinely flown on business from SFO to Taipei or Singapore, probably you won’t this year, maybe not next year.

A vaccine could change those dire predictions.  

Until then, accept that coronavirus has changed everything. And we aren’t going back to “normal.”  Not ever.

By Robert McGarvey

I fell for them yet again.  I cannot explain this slip but I will tell you the level truth. In recent weeks, as friends asked me if I believed it safe to fly now, I unhesitatingy said yes.

Dumb me.

That is because I believed carrier assurances about flying with fewer passengers (empty middle seats!) and also believed them when they said passengers would be required to wear facemasks.

I offered my caveats – don’t use the restrooms, don’t eat or drink on the plane (except what you personally bring), and sanitize the tray table if you plan to use it.

“You’ll be good to go,” I said.

Erase every word of my positive vote.

That is because carriers are carriers and they can be counted on to lie.

Case in point: United, which will not block middle seats and where at least some planes are going out full.  

Right now, Delta and Southwest still say they will block middle seats but they will be watching United’s sales and if they get jealous, you know what they will do.

What about American?  Here’s a story about a packed American flight that was triggered by this tweet:

@Tamgonzalez28

Just flew on @AmericanAir flight AA1154 from Fresno to Dallas. Apparently airlines are exempt from CDC guidelines for social distancing. All rows with the exception of maybe 4 rows were completely full of passengers. I’ve never felt so unsafe in my life. @CNN @CDCgov

In response to the tweet, American said, “We’re working hard to create more space by limiting the number of customers on each flight. We’ll share your feedback with the right team.”

In a statement to Storyful, American said, “The aircraft was not at max capacity. As part of this limit, American will not assign 50% of main cabin middle seats or seats near flight attendant jump seats on every flight, and will only use those middle seats when necessary. Gate agents will also continue to reassign seats to create more space between customers or to accommodate families who need to be seated together.”

Which means?

Pretty much nothing in my reading.

Unmasking the Mask Hoax

Which brings us to the hoax question.

Central to my belief in the safety of flying today was the belief that all passengers would be required to wear masks.

Silly me.

While most carriers say masks are required – as they should be – the same carriers are simply not enforcing that policy.

Southwest acknowledges it has told staff not to deny boarding to passengers without masks.  

Here’s a story that claims half the people on a Southwest flight were maskless.  

Apparently no major US carrier is actually enforcing the facemask rule.

Airports Are the Wild West

There are no set rules regarding masks and airports. Of course there should be but just as we have an incoherent crazyquilt response to Covid-19 across the US, so it is with airports. Some – Pittsburgh – require masks. So does Phoenix Sky Harbor, starting June 1. LAX too requires masks. In Washington State SeaTac requires a mask – Spokane doesn’t.

A big question: how vigorously will this requirement be enforced?

And how’s a traveler to know where masks are required and where they aren’t? Confusion is inevitable with the nation’s piecemeal policies. Hint: just wear a mask wherever you go in public spaces. Also know that more airports now have vending machines that will sell you a mask!

What We Need to Feel Safe in the Skies

Before I again tell people flying is safe, we need to see three things:

Reduced capacity on flights, empty middle seats

Passengers required to wear facemasks at the boarding gate and inflight.

Airports require facemasks for all.

That’s not asking for much and as soon as we get the package I’ll happily advise people to resume flying.

Until then my suggestion is drive or stay home.

Know Your Rights

Do you have a right not to wear a facemask? Sure. If you sit on the wing.

Seriously, however, airlines refuse to board passengers because of trivial attire issues. 

American has kicked a family off because of body odor.

Some passengers have been kicked off planes for speaking Arabic.

There are many reasons airlines can invoke for ejecting a passenger. Not wearing a facemask could and should be one of them.

Do I like wearing a facemask?  Of course not.  But it’s the right thing to do.  It may keep me healthier and if I am sick it may keep those around me healthier.  

It’s part of being a good citizen.

Note: JoeSentMe members qualify for a deal on face masks. Stock up. While I am glad I discovered that airline amenity kit eye masks can be conscripted to stand in for a real face mask, the eye masks are harder to breathe through and not especially comfy when used as a face mask. Use the real deal. You’ll be glad when you are on flights.

by Robert McGarvey

The annual J. D. Power U.S. Retail Banking Satisfaction Survey is out, and most years that is an occasion for a big yawn among credit union executives. Why? Because the report usually is a scorecard of how the big six banks are faring. And who else cares about that?

But this year is different. This year is the era of Covid-19. It’s a time when, suddenly, across the nation, many financial institutions have shuttered their branches and they are pointing customers and members to digital banking, meaning mobile and online.

J.D. Power sets up the battle line that this shift draws: “Now, as the COVID-19 pandemic places constraints on in-person retail banking and forces customers to increase reliance on digital service channels, banks are facing an important test. According to the J.D. Power 2020 U.S. Retail Banking Satisfaction Study… 52% of retail bank customers classified as branch dependent before the COVID-19 pandemic, and successfully transitioning them to digital—without compromising customer experience—will be critical in the weeks and months ahead.”

“With fewer customers visiting branches, it will be important for retail banks to replace the in-person service they would have provided with personalized services delivered instead through digital channels,” added Paul McAdam, senior director, banking intelligence at J.D. Power.

Read that again. McAdam is in effect saying, go digital or perish.

How is your credit union doing?

CONTINUED AT THE CU2.0 BLOG

By Robert McGarvey

$550 – that’s the annual fee for the Amex Platinum card and for some years I have readily paid it, plus $175 for a card for my wife, but this year I find myself asking, is it worth it?

The trigger is of course that the Centurion clubs – for me the prime attraction of the card (and before Centurion there was the rather broad access to carrier clubs) – are closed. Indefinitely. And definitely need a revamp when they do open and that throws into question the frequently tasty (and free!) buffet tables. There have also been capacity issues so how does Amex change access to make clubs less crowded (and thus safer) when too many want access to begin with?  Certainly the clubs will reopen but as what? With what rules? Nobody knows.

Besides, with business related travel now as sparse as it was in late 2001, I don’t much need the clubs anyway.

Also now lying unused in my hands is a $200 annual credit ($15/month plus a kicker in December) for Uber which I have personally used infrequently but often I gifted free rides to relatives and friends which made me seem a generous hero at no cost. But I have not summoned an Uber in two months and don’t anticipate doing so soon.

So do I renew the Platinum card or not?

You may face the same question. Particularly if you too have been a Centurion junkie.

As it happens, recently a friend who wants anonymity hit exactly the same moment of questioning.  Listen to his story: “In early April, my annual fee was due. I called and asked what they could do. Basically, I was looking for something like a $50 statement credit or something, just an acknowledgement that they are getting $550 from me and there probably would be nothing interesting for me. She said, ‘we got nothing, but we’ll defer your monthly fee for a month.’ I asked why that mattered. She said: You never know. I said fine.

“Fast forward to last week. Now the fee is due….So I call to cancel, knowing I’ll immediately be sent to the ‘retention specialist’ (AKA ‘saver’).”

And then what: “No counter offer. So I closed the card. First time in 35 years or so without a Platinum. First time since 1997 no Priority Pass.

“But the reality is Amex’s response here is irrational. They made me angry.”

Will I do likewise?

I go to the Amex website and what jumps out at me are two new benefits: a $20 monthly credit against a wireless bill (T-Mobile qualifies and I already have two lines there), also a $20 streaming video credit that I decide to apply to a new YouTube.TV account but could just as well use to pay my Netflix bill (which I realize I’d been paying via PayPal, don’t ask why).

Bingo, that’s about $280 in credits through the rest of the year. There’s no guarantee the credits will be offered in 2021, but I imagine about the time the credits lapse the Centurion clubs will be open again and there will be renewed need for Uber in my universe.

There’s also a new $200 travel credit that’s on top of the annual $200 credit against airline fees (for baggage check, booze inflight, a sandwich, etc). This new credit applies to purchases made on the Amex Travel Portal.

There also is elite status in the Hilton and Marriott BonVoy programs and I have activated both.

And I also discovered the card offers a $100 annual credit against purchases at Saks and that’s free money. I had not known about this perk until I poked around the card site. Do likewise and you may find neglected perks too.

Bottomline: I will renew.

Who’s right, me or my old pal?

We both are of course. Different people, different circumstances, different decisions.

The bigger point is that nowadays we all need to be assessing just about every fee- does it make sense? Should I do without? In a deep recession, with no end in sight, it only makes sense to monitor outgo.  

And don’t be shy about threatening to cancel. Sure, my pal got bupkis but on a different day, with a different vendor, there might be different results.  When I called T-Mo to drop one of my phone lines, the rep informed me that I am eligible for a special senior rate that basically provides two lines for the price of one. So I kept both lines but halved the rate just by asking.

When we called to cancel Cox cable, however, we were offered nothing meaningful – and cancel we did.

And maybe next year I too will cancel the Plat card. Times may change.

Are you assessing your renewals? Just do it. Something good very well may result.