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Rebecca McClay

Rebecca L. McClay is managing editor of www.creditunions.com and a contributor to Trefis, a financial analysis website. She recently interned for MarketWatch in San Francisco and Bloomberg in New York and was previously a business writer at The Gazette of Business & Politics in Maryland. She has been published in The Arizona Republic, The Wall Street Journal, The Baltimore Sun and more. Rebecca has been contributing articles to businessjournalism.org since 2009.

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A guide to reporting on credit union trends and financials

credit union

Photo by Flickr user Thomas and Juliette Aiko

Business journalists have a wealth of new data on financial institutions to sift through as the nation’s 7,105 credit unions recently reported second-quarter financials. Reporters who review their local credit unions’ 5300 call reports will find a range of story topics in different regions of the U.S. – including stronger business lending, increased first mortgage market share and perhaps standouts in new and used auto lending.

Last year amid a grassroots furor over big bank fees, credit unions relished an opportunity to draw more new members to their smaller institutions. They promoted their lower fees and not-for-profit business structures in a variety of marketing campaigns, and it seems to have worked.

Credit unions reported nearly 3 million new members this past year as of the 2012 second quarter, according to the National Credit Union Association’s most recent credit union filings, finalized August 30.

The latest credit union industry data

Credit unions have a long way to go before they are as widespread as banks. But credit unions are financial institutions to watch as they’re claiming 7.6 percent of first mortgages, a portion of the loan portfolio that grew 5.8 percent year-over-year. They are also making significant gains in new and used auto loans and credit card lending, which in year-over-year both increased to 4.8 percent . In total, credit unions reported $156.7 billion in loan originations in the first six months of 2012.

Find the second-quarter credit union reports, called 5300 call reports, in your area on the NCUA’s website. Compare the performance of local credit unions to nationwide averages and to credit unions that have similar asset sizes.

Industry wide, business lending was the fastest growing component of credit unions’ loan portfolios in the second quarter. Banks have been focusing more on lending to larger commercial businesses and many credit unions have found a niche in making $50,000 to $100,000 to smaller – though more risky – startups. Credit unions increased total business loans 8.7 percent in the second quarter from a year prior.

Political issues to watch

As election season heats up, the credit union industry is getting more involved in their local elections. On some issues, like increased regulations, it sides with banks. On other issues, such as whether to raise the member business lending cap, it takes an opposite stance. Here are a few political issues credit unions in your area may be absorbed with:

Disclosures issues. Credit unions, like banks, will likely have to abide by new disclosure rules proposed by the Consumer Financial Protection Bureau. The new disclosures aim to be easier for the consumer to understand, but many smaller credit unions are worried about the resources it will take to comply with new regulations. Find out what credit union executives in your area are expecting. Learn how they are already explaining credit card and mortgage terms to their members and whether they will soon change.

Member business lending. In a nutshell, some credit unions are pushing Congress to raise the 12.25 percent cap on member business lending (12.25 percent of a credit union’s total assets) so that they can lend to more entrepreneurs. Bankers, however, are arguing that the cap should remain intact because credit unions enjoy a tax-exempt status. Bank executives say the higher cap would cost tax payers more and would only benefit a small number of larger credit unions that already have an edge with tax exemption. What is the sentiment among credit unions in your area?

Consumer Financial Protection Bureau regulation. Aside from the disclosures issue, credit unions are anticipating the CFPB will affect them in many ways. The bureau only has authority to review and enforce rules for institutions over $10 billion, which excludes all but four credit unions. Still, any CFPB rules can affect banks and credit unions of all sizes. The CFPB has yet to officially pass new regulation, but credit unions are on guard for what may come. What are your local credit unions expecting from the CFPB?

credit union ad

Photo by Flickr user Michael Cote

Key ratios in credit union reports

Lydia Cole, an analyst with Callahan & Associates, has outlined “12 Key Ratios” for credit union board members to know to ensure a working familiarity with their balance sheets. These ratios are also exactly what journalists covering credit unions should know when reviewing the quarterly reports, called 5300 call reports. Understanding the health of the credit unions in your region in the same way executives and regulators understand it is crucial to reporting accurately and thoroughly on the credit union industry.

These key ratios are similar to what reporters covering banks need to know, but the terminology differs a bit. Here are some examples of key ratios you could apply to your local credit unions:

Loans-to-shares ratio: Shares are simply credit unions’ checking accounts. They are called shares because the members, or customers, of a credit union are also the owners. The loans-to-shares ratio measures a credit union’s liquidity. The more shares a credit union has, more it has to lend and the lower its loan-to-share ratio. Credit unions reported an average of 67.0 percent loan-to-share ratio in the second quarter, up 0.9 percent from the first quarter.

Coverage ratio: This metric tells executives how much money they have to cover loans  the credit union can’t recover. To get it, divide the allowance balance on the 5300 call report by the total reportable delinquent loans.

Net interest margin: Like banks, credit unions make money by lending, so the profit credit unions are making on their loans is important. The net interest margin is calculated by subtracting the interest paid to members from loans and investments and dividing that by the average assets.

Operating expense ratio: Reporters can use this ratio to gauge whether a credit union is operating efficiently. It’s calculated by dividing the operating expense by average assets. To calculate operating expense to income ratio, divide the operating expense by the total income. Both of these reveal how productive a credit union is. Compare these ratios from different credit unions in your area both against each other and against other similarly sized credit unions.

Average member relationship: This ratio is an important gauge to tell how involved members are as it shows how much of the credit union’s retail a credit union’s members are using. It includes shares and loans but not business loans. So, to calculate it, add total shares to total loans and subtract member business loans. Then divide by the total members.

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Don’t be hoodwinked: Detect online errors with savvy skepticism

craig silverman

Craig Silverman leads a session during the American Copy Editors Society 2012 Conference.

Craig Silverman’s “B.S. Detection for Digital Content” session led copy editors through the possible pitfalls for relying on online information and provided advice for how to avoid them.

Journalists who are hoodwinked by misinformation spreading around the Internet often end up circulating errors that they have a hard time correcting, said Silverman, founder of Regret The Error blog, now published by the Poynter Institute. The session was held on April 13 during the American Copy Editors Society’s 2012 Conference in New Orleans.

“You have to evaluate the source and you have to evaluate the information,” Silverman said.

The rapid pace of Tweeting, Facebooking and other online activities results in a constant flow of information. It’s difficult for journalists to quickly distinguish fact from fiction, but Silverman offers several tips on verifying  information before spreading it.

First, and perhaps most importantly, according to Sliverman, is to continue to talk to people. Contacting your sources outside of the online world helps reporters establish if they are credible.

Reporters should take extra caution when retweeting information they’re skeptical about, because follow-up Tweets to correct errors are rarely circulated as heavily as the original Tweets, he said.

Look at who your sources are engaging. On Twitter, see who is following them and who they are following. What information are they retweeting and which sources are retweeting them? On Facebook, who are their friends? Do they seem credible?

Journalists can look at a source’s Klout score, which is a score that aims to establish an area of expertise from online information. Klout, a San Francisco-based company, scrapes social network data and tries to measure a user’s influence by assigning a score from 1 to 100 based on engagement level.

Google a Twitter user’s handle with the word “spam” or “scam.” Or download the Identify feature in Firefox or the HoverMe feature in Chrome to check for other accounts or other postings online. Those features will help reporters follow an online trail, which can give more clues to a source’s credibility.

If you can’t talk to your online sources directly, try Skype or direct messaging. Look at how other established media outlets are reporting the information that caught your attention. And try crowdsourcing by asking your followers about a rumor.

“To be a part of these networks, you have to be present,” Silverman said.

If you’re skeptical of a website, run its domain name through a search on who.is, which will reveal the registrar, the registration date and the expiration date. You can check whether a business that is claiming to be a long-time establishment only registered its domain name recently.

And check the website through Google’s page-rank checker, which is meant to be a tool for advertisers but can help journalists check credibility. Use Diigo and Delicious to see if anyone has bookmarked the page. Does the website have life through recent blog posts and current articles?

“These are all little puzzle pieces you’re going to have to put together,” Silverman said. “Journalists can make a greater effort to check their facts.”

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Financial copy editing: Choose words and descriptions carefully

Christine Steele

Christine Steele leads a session on financial copy editing during the American Copy Editors Society's 2012 Conference.

Copy editors who attended The American Copy Editors Society’s 2012 Conference’s “Financial Editing” session learned how to ensure text is clear and readable for investors and that verbiage is accurate and does not reflect poorly on a company. Unlike journalists, financial editors must be aware that careless language can harm a company by giving investors the wrong impression.

Copy editing print for financial organizations requires going beyond catering just to the reader’s perspective to ensure the company’s message is coherent, said Christine Steele, a financial copyeditor for more than 20 years.

Steele said editors should ask themselves about the copy: “Does it suggest something you don’t want to convey?” 

Steele is a senior copy editor for The Capital Group Companies, a mutual-fund outfit, where she  edits brochures for financial advisers, white papers, annual shareholder reports ,and quarterly information packets for investors.

In proofreading, copy editors should pay special attention to vocabulary that could send the wrong message. For example, investors could associate the words “bet” or “betting” with gambling. Instead, Steele suggests substituting words like “opportunities” or “prospects” or “speculating.”

Instead of the phrase “book of business,” which Steele said dehumanizes the adviser-client relationship, try a phrase like “build your business.” Or substitute “expert” with “someone with experience” for more accuracy. For a more personal touch, refer to shareholders as “investors,” a term shareholders in the mutual fund’s focus group said they prefer.

Financial jargon can be confusing. Editors who do not understand what they’re reading can turn to resources like Investopedia or Onelook. If you’re confused about what a phrase like “base level coupon” means, talk to the author.

“Don’t be afraid to ask if you don’t understand,” Steele said. “If you don’t understand, your readers won’t understand.”

Ensure all your terminology is clear. Don’t use phrases like “digging down,” which isn’t polished or mature for a corporation. Avoid simply saying it’s a “challenging period” without giving details for context. And edit out clichés like “stay the course.”

Finally, make sure the company’s investor materials have a consistent voice and a professional tone that’s appropriate for a shareholder audience.

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An action guide for strengthening your business-beat basics

merrill perlman

Merrill Perlman leads a session on business basics at the American Copy Editors Society 2012 Conference.

The American Copy Editors Society’s 2012 Conference in New Orleans offered a wealth of business-related copy editing advice for journalists on financial beats.

Merrill Perlman, an editing consultant and former director of the copy desk at The New York Times, advised business reporters to fully understand ratings agencies, bankruptcy processes and correct verb use in her session training session, “Business Editing in Depth: 10 Things You’d Better Know.”

Understanding basic financial terms like the difference between “deficit” and “debt,” is key to producing credible business stories, she said.

Making mistakes like calling a company “bankrupt” when it’s only in the bankruptcy process, can damage both the firm’s trustworthiness and the journalist’s credibility.

“You’ve got to be very careful not to tar and feather a businesses’ reputation,” Perlman told attendees. The session, held on April 13, was co-sponsored by the Donald W. Reynolds National Center for Business Journalism.

Below are some of Perlman’s top tips for strengthening your business beat basics:

  1. Bankruptcy. Perlman’s first tip on bankruptcy included understanding the difference between various bankruptcy filings. Chapter 7 bankruptcy is a liquidation process, Chapter 11 bankruptcy is a reorganizing process where a company may become profitable again and the Chapter 13 bankruptcy process is for individuals who want to better manage their debt. See the Administrative Office of the U.S. Courts for more bankruptcy definitions.
  2. World Bank vs. IMF. Journalists should know the difference between the International Monetary Fund and the World Bank. What organization is more likely to lend for projects in poor countries? The World Bank, Perlman said, because it’s more of a fund. In contrast, the IMF lends to countries having problems with debt, working like a financial cooperative.
  3. Deficit vs. Debt. A national “deficit” is very different from the national “debt.” A deficit is a budgetary difference, or a negative difference between the amount of money coming in and the amount of money being spent. A debt is a total of what’s owed. The national deficit is $1.3 trillion for fiscal year 2012 whereas the national debt was $15.6 trillion as of April 16.
  4. Treasuries. Understand the difference in treasury bills, notes and bonds. Treasury bills are shorter-term securities, maturing in less than a year. Notes are more medium-term securities paying out twice per year and maturing in two years to 10 years. Bonds are longer term securities, also paying twice per year and maturing in more than 10 years. “Be careful when you talk about yield. Think of the yield not as the interest rate, but as how much you’d hold in your pocket,” Perlman said. See this list of Treasury securities for more examples.
  5. Trademarks. Trademarks are the intellectual property of a company and is a way the company protects its brand. A trademark does not necessarily have to be registered; it may simply be declared. Journalists should make sure terms like Kleenex, Xerox, Google and Jet Ski are used as proper nouns. “Using a trademark as a general term is basically stealing their identity,” Perlman said.
  6. Corp. vs. Co. A corporation has shareholders whereas a company does not necessarily have shareholders. All corporations are companies but not all companies are corporations. Use the term “LLC” when a company is a limited liability company, which is a combination of a corporation and a partnership.
  7. SEC. The Securities and Exchange Commission may investigate corporate wrongdoing, but it does not press criminal charges. Instead, the SEC watches over financial dealings – stock, bond and securities markets and sets regulation requirements. The SEC is the custodian of the financial filings companies are required to report.
  8. Numbers overload. Too many numbers may turn-off readers. As a guideline, writers should try to include no more than three numbers per paragraph. To help readers digest numbers, break them down into understandable comparisons.
  9. Credit ratings. Moody’s, Standard & Poor’s and Fitch are the three top rating agencies, but their systems vary. Learn how each distinguishes investment-grade securities from speculative securities in their ratings. “Whether it’s a government credit rating or the credit rating of a company, it’s going to come up,” Perlman said.
  10. Accurate verbs. Financial reporters often have to find different ways for saying “increase” and “decrease.” Perlman warns that the verbs should always match the action. “Don’t have it ‘spike’ when it ‘crept,’” she said.

Merrill Perlman will teach Business Editing In Depth: 10 Things You’d Better Know for the Reynolds Center online at noon and 4 p.m. EDT on May 1. The webinar is free.

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Business and the environment: An inside look at corporations and air quality

By Flickr user Matt Anderson

This is the third in a three-part series by Rebecca McClay that explores how journalists can better investigate the relationship between business and environment.

In the first two articles, we looked at ways to reporters can investigate how companies impact water quality and affect land quality. Now, we’ll explore here how business journalists can monitor how their local businesses’ relationship with air quality.

Energy companies, recycling companies, food production companies and metals companies are among the many industries that can contribute air toxins like formaldehyde, benzene, mercury, carbon and other chemicals. For more than two decades, the Environmental Protection Agency has tried to monitor and regulate air pollution tens of thousands of plants across the country. This year, more than 1,600 plants were deemed to warrant urgent action, a recent NPR article says.

With so much data to sift through, reporters may find it daunting to get started on covering air pollution. For inspiration, check out joint coverage by The Center for Public Integrity and National Public Radio on extensive air pollution coverage this week, “Secret ‘Watch List’ Reveals Failure To Curb Toxic Air.”  You’ll see that, just as in covering water and land stories, starting with the Environmental Protection Agency and its “watch list” of air polluters can yield a wealth of stories. Some of the companies are serious polluters while other may have only permit delinquencies.

NPR and the CPI posted a spreadsheet of 464 facilities that compares the plants’ September status with their July status. Reporters easily determine which companies remained on the list of emissions violators, and which improved their pollution performance, distinctions which are color-coded on the document. For example, Aker Plant in Streetman, Texas, was just added to the list while General Engines Companies in Lake Wales, Fla., dropped off. You even can sort the spreadsheet by zip code for local data.

For a few more tools, check out The World Health Organization’s website, which has a fact sheet on the impact of air pollution on health, or National Geographic’s overview on how air pollution causes climate change, which includes official reports from the Intergovernmental Panel on Climate Change. And CBS News has crafted an interactive graphic of cities are the most affected by air pollution, that allows you to sort by an air quality index, the sources of smog and other factors.

There are countless stories in analyzing how companies contribute to air pollution, but there are many more in following the companies benefiting from helping companies remedy the problem. For example, Fuel Tech, a public company in Warrensville, Ill., that offers nitrogen oxide-reduction technology, recently reported an 18.8 percent surge in its revenue, with earnings beating estimates. What factors are driving that increase? Are companies investing more to cut back on their emissions?

Finally, don’t neglect court documents.  Turn to your court system to find out whether companies are fighting cases of emissions violations and whether and how they are held accountable. For example, The Milwaukee Journal-Sentinel recently followed case on United Ethanol, which converts corn into ethanol, as it received a $700,000 fine for air pollution violations. If the EPA’s “watch list” of 1,600 plants is any indicator, there is likely no shortage of similar stories in your state.

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Business and the environment: Dig into land-related stories

landfill

By Flickr user D'Arcy Norman

This is the second in a three-part series by Rebecca McClay that explores how journalists can better investigate the relationship between business and environment.

In the first article examining the intersection of business and the environment, we explored numerous ways journalists can find stories in how companies may impact water quality, but there are also a wide variety of ways reporters can investigate businesses’ impact on land.

Chemical and nuclear plants, industrial factories and oil refineries are among the most notorious land polluters, but land contamination can come from countless sources. Mining and deforestation are other top polluters, along with the housing and agriculture industries. Which industries are more prevalent in your coverage area? Are they required to report their environmental impacts?

Researching a meaningful story on land pollution starts with finding the local issues in your area and analyzing the right data. The best starting point for snooping around topics in your area is the Environmental Protection Agency. While it’s a federal agency, the EPA’s website allows you to enter your zip code or city and search for topics at a very local level. For example, I entered “Annapolis” and found that the area’s land highlights include the fact that there are parcels there on the national priorities list.

As of April 2011, there were about 1,290 polluted land pieces on the list that were previously used as metal foundries, landfills, dry cleaning sites, industrial manufacturing. Where are those companies now? Are they still operating locally? What changes have they made to their practices? If they were responsible for the pollution, were they held accountable?

In addition, several communities have packaged reports on their environmental conditions with the EPA, such as Bowie, Md., which has its 2010 State of the Environment Report posted there.  Business reporters covering Bowie would find several stories in that report. For example, BGE electric utility company had to trim a large number of trees for its business and is planning to subsidize a large-scale tree canopy program to replace the lost canopy.

Turn to your state’s department of the environment for story leads. New York’s Department of Environmental Conservation posted several brief releases about companies penalized for environmental violations. Business reporters can follow up with whether they abide by new requirements and look to see how the company, if it has other locations, is behaving elsewhere.

When you find an interesting or suspicious topic, verify your findings.  Check with your local environmental engineers, who are on the frontlines of investigating and measuring land conditions. Also, if you have negative findings, confirm them with the company. Many larger companies like Coca-Cola post an environmental report on their website that details their standards, goals and environmental programs. Compare the most recent reports to those from years prior to see how the company’s environmental priorities have evolved.

Businesses can have a harmful effect on land pollution, but increasingly tighter regulations to protect the environment can have a harmful effect on businesses. Whenever your state or local municipality passes a law to improve environmental quality, be sure to explore how the businesses will fare.

For example, Berkeley, Calif., led the charge in banning polystyrene packaging, followed by more than 20 U.S. cities, such as Portland.  The ban is likely to spread to other cities that want to better manage landfill issues, and journalists there should ask how their retailers and restaurants will fare without the product. What will the impact be on the distributors and manufacturers of Styrofoam containers? How will jobs there be impacted? Many U.S. towns and cities are considering measures against plastic bags, as Portland passed recently, and reporters there can follow the impact in a similar way.

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Business and the environment: Tips for following water’s money trail

fishing industry

By Flickr user echoforsberg

This is the first in a three-part series by Rebecca McClay that explores how journalists can better investigate the relationship between business and environment.

Environmental journalism overlaps with business journalism in many complex and diverse ways. But there are several ways journalists focused on covering economic and financial can start to tune into the environmental beat.

Most business stories that touch on environmental topics now focus on “green” industries, like solar panel production, wind energy investment or algae biofuel startups. Monitoring and reporting on “non-green” businesses and their impact on the environment is trickier. Companies will rarely broadcast their emissions, discharges or resource consumption on their websites or through press releases, so business journalists looking at companies’ environmental footprints need to dig.

With water issues, business journalists can find a wealth of information through all levels of government – from data on well water monitoring through municipal and state departments to information on toxic waste at the U.S. Environmental Protection Agency. Stories on water pollution can include the impact of increased pollution on seafood, on drinking water or on marine life as well as water quality in general. A business reporter’s job here is to find the link to a company or industry and explain it.

Are you reporting in one of the 772 cities with a combined sewer system, meaning that both raw sewage and rainwater runoff flow through the same pipe? If so, what happens when the system overflows, as most of these systems are designed to do? Check with your regional National Pollutant Discharge Elimination System office for more about local complaints and violations. Although this is a municipal impact on the environment, the overflows may significantly affect businesses like fisheries.

For stories on drinking water quality, remember that many municipalities and states monitor wells in their areas to ensure the well water meets standards. Nearly 19 percent of all wells tested in the U.S. were contaminated, and while much of it was from surrounding geology, contamination was also caused by “human-generated” sources, according to the The Society of Environmental Journalists. Look at the well contamination records in your area. Are any businesses named as possible sources in the reports?

Check into seafood fraud, which seems to be a hot topic lately. Businesses that are mislabeling seafood are having a significant impact on marine life, according to a recent New York Times article. “Environmentalists worry that duped diners may be unwittingly contributing to declining fish stocks, buying food they have been told to avoid,” says reporter Elisabeth Rosenthal, describing how consumers may be consuming endangered species because of deliberate mislabeling.

For a local seafood fraud story, you won’t get as much information from regulators, Rosenthal says, because to date no national study has been conducted on seafood fraud. So instead, turn to your local fish biologists for help. Some foundations, like Washington D.C.-based Oceana, will have reports on seafood fraud for broader context.

Finally, not every story on businesses’ impact on water has to be a negative one. There are countless examples of companies and industries working diligently to minimize their impact on the environment by improve water quality, reducing pollution or cutting back on their own water consumption. For example, many businesses are likely contributing to Maryland and Virginia’s ongoing Chesapeake Bay restoration. How are those efforts evolving over the years? You can highlight some similar efforts in your area.

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The evolving banking scene: A guide to covering credit unions

credit unionCredit unions are shoring up a stronger asset base, more members and are in a prime position to snag market share from banks in the next few years. It’s an industry business journalists shouldn’t neglect as the banking scene evolves.

Credit unions are financial institutions that are similar to banks. They offer savings and checking accounts, mortgage products, auto loans and other financial products to account holders. But unlike banks, credit unions are not driven by profit. Instead, they are owned and operated by their members to create affordable credit in the community and to foster local economic development.

Business journalists – including banking journalists, personal finance reporters, technology reporters and even community reporters – can find a wealth of timely and interesting stories in the credit union industry.  The media rarely covers the credit union industry in-depth, so reporters who spend some time here will likely find their stories – local, state or national – can be standouts.

The nation’s 7,386 credit unions reported a 12.8 percent increase in total investments, a 4.2 percent increase in total assets, a 0.6 percent increase in members and a 0.1 percent increase in employees in the second quarter of this year compared to a year prior, according to data from Callahan & Associates, a D.C.-based credit union consulting firm. These cooperatives grapple with many of the same economic struggles as banks do, including the impacts from mounting foreclosures and soaring unemployment, but credit unions are trying to leverage financial woes to their advantage.

For example, credit unions and smaller community banks have the advantage of keeping debit swipe fee revenue streams over larger banks with recently capped swipe fees. So, credit unions are promoting the fact that they don’t feel pressure to charge checking account fees and can more easily keep their rewards programs. Several credit unions have even launched anti-bank marketing campaigns, encouraging consumers to “ditch your bank” because of fees.

Personal finance reporters should follow those cost-of-banking trends for consumers. Story options include analyzing credit card rates and rewards programs, looking at checking account yields or reviewing mortgage product offerings. Sample some credit union product offerings in your areas. Then use resources such as bankrate.com , cardratings.com or nerdwallet.com to give context to your analysis. Are credit unions offering better deals than banks in your areas? Do they tend to offer higher yields on checking accounts or offer more free checking? Why or why not?

Journalists on the banking beat should monitor how credit unions’ financials compare with banks’ financials as the economy eases out of a recession and as new regulations take hold. Will credit unions continue to shore up more members? Will banks find a new way to preserve their revenue? Will they keep their lion’s share of the banking market or is the market in your area turning toward credit unions?

Just as journalists on bank beats turn to the Federal Deposit Insurance Corporation for information on banks, they can turn to the National Credit Union Administration, a federal regulatory body for credit unions, for financial filings. Financial information for individual credit unions is found on their quarterly 5300 call reports. Reporters can also reach out to consulting firms or analysts for more context on financial reports.

Technology reporters can follow how credit unions, which are traditionally slower than banks to adapt new technology because of their smaller budgets, are now stampeding toward mobile banking and streamlined loan approval processes, especially for mortgages. Other credit unions are automating their branches or ramping up social media efforts.

The credit union industry houses a plethora of stories for real estate reporters, too. How are foreclosures impacting credit unions? How are credit unions working with homeowners to prevent foreclosures? How are credit unions helping members refinance as interest rates hover in record low territory? What innovative mortgage products do credit unions offer to first time homebuyers, or for longtime homeowners looking to tap equity with reverse mortgages?

Savvy community journalists, covering topics from municipal governments to neighborhood events, should also find a slew of stories if they connect with their local credit unions. Many states are only recently starting to allow credit unions to accept municipal government funds. Does your local government keep its deposits in a credit union? Does it want to? Why or why not?

Credit unions often have a very active community voice, often holding food drives, contributing to schools or offering scholarships or sponsoring local events. What kind of budget do the credit unions in your region have for their annual community outreach. Are they improving those efforts or cutting back? Why?

No matter the size and scope of your beat, the credit union industry likely holds a story worth reporting. For more tips on digging inside credit unions, don’t miss the two-part video series below from videographer Brianne Aiken.

REPORTING ON CREDIT UNIONS (PART 1)

REPORTING ON CREDIT UNIONS (PART 2)

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Durbin Amendment’s impact: Retail, banking, credit unions, consumers

A new banking regulation set to take effect this summer may alter the landscape of the financial system making it a key time for business journalists to report on changes in the retail and banking industries in their coverage areas.

The Durbin Amendment will affect retail and banking beats. Photo by Flickr user PaulSwansen

The Durbin Amendment sets a cap on what financial institutions can charge for each debit transaction. The current proposal, set to take effect July 21, caps swipe fees at 11 cents. Many major banks have already anticipated a significant decrease in their revenue from losing debit interchange income and have implemented fees for services to make up for the lost income.

Which banks are common in your area? What are they doing in response to the Durbin Amendment? Chase Bank is dropping its reward program with Continental Airlines but so far Bank of America has not made changes to its program with US Airways, according to the New York Times.

Find out how banks in your area depend on the revenue from debit swipe fees and what kind of financial impact they expect from the new law. Learn whether banks in your area keeping their reward programs for customers or phasing out rewards programs. Do smaller banks expect the same kind of financial hit that larger banks expect. How are smaller banks planning to restructure?

Secondly, look at your credit unions. All but three credit unions would be exempt under the asset cap of $10 billion but credit unions have adamantly opposed the Durbin Amendment. They fear there will be no enforcement mechanism for their exemption and that they will also see a substantial hit to their debit interchange stream by as much as one-third of their revenue.

However, many credit unions feel that their nonprofit, consumer-friendly business model will give them an advantage over banks in the long-term, perhaps helping them shore up more market share as they try to promote their low fees and free checking while banks raise rates to protect their bottom line.

What financial impacts are credit unions your area expecting from lower interchange fees? Are they considering raising rates or will they try to use low fees to better compete with banks? What are they telling their members about what to expect from Durbin?

Thirdly, chat with your retailers. The National Retail Federation is eagerly counting down the days until the reform takes place. Retailers are eager for Durbin Amendment to kick in so that consumers will see lower fees at the cash register and be encouraged to shop more. They said the debit fees have tripled over the past 10 years to nearly $50 billion, costing the average consumer about $427 per year.

Finally, Consumers must be confused. Retailers are urging them to contact their politicians and urge them not to delay the Durbin Amendment for two years as big banks are asking. On the other hand, banks are warning consumers that they’ll see a big increase in banking service fees if they don’t successfully urge their politicians to stop Durbin.

Try to clarify the impact on shoppers from both a banking perspective and a retail perspective to help them weigh the differences. You could interview consumers now about which financial impacts they are concerned about, and then follow up with them later this summer to see if their fears materialized.