Why Do I Have To Provide So Much Information?

When you are opening a brand new account with your local financial institution (FI), you are starting a new relationship. And, as with every relationship, we need to get to know one another by providing some basic information. While this information is mandatory, it still provides you with some security knowing we are trying to gather as much as we can to verify who you are. This is the first line of defence against identity theft and money laundering. This also meets the requirements set forth within the US Patriot Act, which helps combat terrorist-related activities.

To open an account, you will need to have some sort of identification (ID), such as a birth certificate, a driver's license or state ID, or social security card. Once you have provided sufficient ID, the Service Rep will proceed to open your account.

You will also need to provide your tax identification number, which is your social security number for all US Person's or an employer identification number for any business entity. This ensures that all required tax documents are appropriately identified. For business accounts, you may be required to provide further information regarding your business depending on the FI's requirements.

At the time of opening your account, you may also have a credit report and check systems report ran. Both of these reports give the Service Rep a "snapshot" of who you are to assist in the set-up of your accounts, which will help you save money and assist in saving you time.

We take identity theft very seriously. The federal government has made combating terrorist activities a major priority; these both come together when opening new accounts. Hopefully this information helps you see how important it is for us to take the time needed to verify identities when we have a new person come in or apply online.

Shana York, Compliance Administrator

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Birthdays are a special time of year, especially for children. As a parent, I always try to set a limit on what I want to spend on each child. The struggle is that I always end up forgetting about the "must haves" of a birthday party such as the cake and decorations (they really do make the day more special) and then end up spending almost double what I had anticipated. So, I've came up with a plan to help me save money and still have an awesome birthday party for my children.

1. Bake my own cake. Instead of paying someone else $20 to make cupcakes for the party, I can buy cake mix and icing for a few dollars and have a cupcake decorating party the night before.
2. Next year, the birthday party is going to be held at my house. Even though having the party outside of the house can be tons of fun for the kids, it ends up costing the parents an arm and leg!
3. I've started a savings account so that I can deposit money every month to help cover the birthday festivities. This way I've already got the money set aside and I can start picking up deals on some presents and decorations throughout the year instead of getting overwhelmed with expenses at the end.

Birthdays never change, they come around once every year (just like Christmas) so why not take the first step and start planning ahead. By having a game plan and doing research throughout the year it's amazing the kind of money and time you can save, especially on those "must haves" like decorations and game ideas.

Missy Haugen , Member Solutions Supervisor

One of the biggest stories in the news is that Epsilon, a marketing services company, reported a data breach Friday, April 1, 2011, that affected multiple banks and retailers. Please note that SouthPoint Federal Credit Union DOES NOT contract with Epsilon.

According to Epsilon, only email addresses and customer names were obtained. However, many of the financial institutions affected warned that this information could be used in phishing attacks.

We advise members to be on the watch for phishing emails. Watch your emails carefully and beware of emails that pretend to be from legitimate retailer, organization, or financial institution. Here are a couple tips that should always be followed:

• Do not open emails from senders you do not know
• Do not share personal information via email
• Do not click on links from email sources you are not familiar with
• Do not open attachments in emails from sources you are not familiar with

When it comes to scams, knowledge is your best defense. SouthPoint will NEVER contact you to via email to request personal information such as account numbers, credit card numbers or social security numbers. So, if you receive any type of solicitation asking for personal financial information, do NOT provide it - it's a scam.

Brian Goblirsch, Fraud Team with SouthPoint

Local and national media have been focusing on the topic of free checking recently.  Recent legislation endorsed by retailers has been passed that has the potential to change who pays the costs involved in processing debit card transactions.  Since debit cards are a part of many free checking programs, this is how the media is linking free checking to the legislation.  How will the legislation affect the general consumer, we don't know until it's enacted, but we are preparing for the fact that it will have an impact.  Let me attempt to describe the legislation and what it all means.

In 2010, congress passed the Dodd-Frank financial reform act which requires the Federal Reserve Board (FRB) to develop rules that determine how much a merchant will pay each time a debit card is used by a consumer to make a retail purchase.  The term used to describe the fee that merchants pay to accept a debit card as a payment device is called Interchange.

Interchange is actually paid by a merchant in both debit and credit card transactions.  Part of Interchange goes to card issuers, SouthPoint being one, to support the operational framework of providing card services, including protecting members if their card is lost or stolen.

Interchange is a system that has been in place for many years.  It helps pay some of the costs involved in providing computer networks that process transactions and helps issuers keep card programs affordable to consumers.  If the FRB enacts rules to change the way Interchange is calculated, banks and credit unions will have to consider implementing or increasing the fees associated with debit card programs in order to cover their costs.

The Federal Reserve Board has issued a proposed rule that would cap the interchange rate charged to merchants in situations where the card issuing financial institution is over $10 billion in assets.  Because we are below this threshold, one would think this would protect credit unions such as SouthPoint.  Unfortunately, many experts fear that this is a short-lived exemption for smaller financial institutions and that any rule from the FRB will eventually be extended to all financial institutions.

The proposed rule issued by the FRB will go into effect in July of 2011.  Credit unions across the country are trying to educate members on this topic.  If enacted, these credit unions feel there could be a significant shift in who pays for debit card services, moving from the merchant to the member. 

The US Senate and the US House have recently created legislation to delay implementation of the rules.  As a credit union that believes in keeping services affordable to members, we want you to be educated on this legislation.  If you want to reach out to legislators and share your ideas, the website http://capwiz.com/cuna can give you a list of your elected federal legislators.  You can also call (877) 422-3525 and listen carefully to the pre-recorded message and enter your zip code when prompted.  You will be patched through to either the House or Senate office (rotation will be based on the day's call volume).  You will then be connected to your elected official's office.

Troy Diedrich, Vice President of Marketing and Development

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As a result of our current economic crisis which began in 2008, congress has approved far reaching regulatory change for financial institutions.  As a credit union, we have reviewed and put into practice these changes, but because we think they are far reaching, an important question to ask is "What do all these changes mean to individual consumers?"  Let's look at just the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 and amendments to Regulation Z.

The regulators have made some serious changes for the credit card industry and the loan industry over a one + year period.   They say all changes are to be geared to help the consumer better understand their periodic statement and receive disclosure of pending changes. If you have a credit card or an open end consumer loan, you have probably have noticed these changes to your statements or received the new disclosures for these changes.

Here are a few of the changes you will see on your statements: 

• Your loan payment due dates must be at least 21 days after the statement period date
• All finance charges must be spelled out on the statement
• Minimum payment warning amount must be disclosed, plus the length of time it will take to pay off the balance by paying the minimum payment
• The late payment fee or penalty fee amount cannot exceed the minimum payment amount
• Late charges, penalty fees, return check fees and over the limit fees must be reasonable
• You cannot be charged an inactivity fee
• Interest rates need to be referred to as a non-variable rate, not a fixed rate
• Multiple fees cannot be charged on a single late payment.

Here are a few new rules and disclosure changes required:

• You must be given a notice of at least 45 days before a rate change is in effect
• You must receive an annual fee renewal reminder
• Consumers under the age of 21 cannot receive a pre-screened offer, they cannot be marketed to and do not qualify for a credit card unless they have a co-signer
• Credit card issuers must list 4 principal reasons for a rate increase and then allow a periodic review period before the rate changes.

If you haven't noticed these changes, please look at your next monthly periodic statement or review recently received disclosures.

Are these items more readily noticeable? Is your statement easier to understand?   If they are, the regulatory changes have served their purpose, if not, it seems there will have to be more regulatory changes coming!!!!!

Mary Ann Fischer, Internal Auditor

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