Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Okay. Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Tuesday, 04/07/2026, at 03:13 in the afternoon. So we have with us Carrie Allen with us from the Credit Unions Association, and she had some members that are here today. It's Credit Union Day at the State House, and so we invited them to come in and have a conversation with us. So Carrie, thank you for coming in.

[Carrie Allen (Credit Unions Association)]: Thank you all so much. Great to see you. And the sun came out for us this afternoon because grant unions are at the State House. So thank you all so much. We spent some time listening to different lawmakers and key influencers from around the state this afternoon to learn a little bit more about what goes on in Montpelier. And we, of course, spend some time with your committee, and we wanted an opportunity to come back and say hello and thank you for all the work that you're doing. So I'm really excited. I have some CEOs from the credit unions around the state with me this afternoon. John Dwyer, the CEO of East Rise Credit Union, Bob Orkin from North Country, Sean Gammen from eight zero two Credit Union. On this side, I have Jean Guyard from Vermont Federal and Brett Smith from One Credit Union. These represent some of our larger credit unions in the state. Of course, there are 14 credit unions in the state of Vermont domiciled here in Vermont, and two thirds of Vermonters are credit union members. So certainly well representative of the people around the state of Vermont. So thank you so much for the work that you're doing and for including credit unions in the conversation. We hope that over the course of the rest of this session and next year and to come that you look to credit unions as resources. We want to be here to support the work that you're doing, to support Vermonters, and anything we can do to help to answer some questions or collaborate, we certainly want to be a part of that conversation. So never hesitate to reach out to all of us.

[Michael Marcotte (Chair)]: So Kerry, how many are domiciled and are chartered

[Carrie Allen (Credit Unions Association)]: in the amount of Amity Affairs? State charged, we have about half and half actually right now, yeah. Half state chartered and half.

[Michael Marcotte (Chair)]: That's good. So I think I don't know if the committee is aware that they're under NCUA and not FDIC.

[Carrie Allen (Credit Unions Association)]: That is correct. Okay.

[Michael Marcotte (Chair)]: Would anyone like to chat with us? Welcome if it's just a conversation.

[Carrie Allen (Credit Unions Association)]: Bob, would you like to chat?

[Michael Marcotte (Chair)]: We're just having a conversation with the committee that has jurisdiction. I'm sorry.

[John Dwyer (CEO, EastRise Credit Union)]: I'm John Dwyer, the CEO for East Rides Credit Union. Daniel Wilson. I'm the old guy in the room and for the credit union people, I'll say. I and I'm also gonna be retiring in a couple months. So I've been at East Rise for thirty nine years, next two weeks from now. And I have had the thrill, to be part of, this industry and the state, and we represent, of the 170,000 members of East Rise, about 85% of them still live in Vermont. I always say still live in Vermont because we have a lot of people who are retired and who may have a different address. But as Carrie noted and as we represent here, I also serve on the board with Gene, these guys used to be on the board, other members. We really are thrilled to be providing services to Vermont. And we not only understand the work you do every legislative session as we do every year, every day, really, to try to make a difference, for consumers here in Vermont, financial services. I have had the honor of testifying with you. I was here last year, talking about the impact on businesses with some of the things that were being proposed in Washington at the time, and we're looking for ways to perhaps provide financial cash service to businesses. And we have had other representatives from Israel as well. So, we certainly appreciate the opportunity to say thank you to you as well.

[Bob Morgan (CEO, NorthCountry Federal Credit Union)]: I will

[Michael Marcotte (Chair)]: jump over to third.

[Unidentified committee member]: I have a quick question. I was

[Unidentified committee member]: just thinking about, the East Riders would be the predominant sort of accrediting of some statute within the Bags. One district itself was launched with the location in Bennington. How you see the services you can provide hub like Burlington versus further down to Bennington, do you see the same demands or you must see different kinds of demands and how do you keep up

[Michael Marcotte (Chair)]: with what's needed where? Yeah, so

[John Dwyer (CEO, EastRise Credit Union)]: I think the best way to describe it is we see the same set of demands, they just may have a different dollar value. So we see similar business commercial needs, commercial lending, real estate lending. We might see the same kind of deposit services that are required. From a consumer standpoint, they're similar as well, But the dollar amount might be different. A loan we do in Burlington is going to be a larger dollar amount. It may not be any more or less complex because certainly on a business lending standpoint, the underwriting of those tend to be more complex. The dollar amounts get I think the impact is also greater, arguably. We, like I think a lot of my peers, are trying to invest across the state. So although we may see more opportunities in Burlington because of how many people are there, we are really looking to do as much in running as we do in Rutland County as we do in Chinatown or Bennington or Redelwood. So my sense is, I can't speak for everyone, but I shouldn't be all from the federal government. We're trying to have that same effect.

[David "Dave" Bosch (Member)]: I'm David Bosch, I'm from

[John Dwyer (CEO, EastRise Credit Union)]: Clarendon. Congratulations on

[Unidentified committee member]: your pending retirement. Thanks. And I was curious to know about succession plans. Are you part of that process and therefore you'd be

[John Dwyer (CEO, EastRise Credit Union)]: able to

[Unidentified committee member]: answer a question or

[John Dwyer (CEO, EastRise Credit Union)]: two or? So the answer is no, I'm not part of the process. Our board established a succession process about a year and a half ago and we are now going through that. They have a search committee and they are doing a search for my successor. They're halfway through that process.

[Unidentified committee member]: Are you privy to any conversations about obstacles they may have run into? I'm not. Either somebody from within or from outside the state perhaps? I'm not privy

[John Dwyer (CEO, EastRise Credit Union)]: to that, I'm not as opposed to that, just curious. I'm I'm probably more familiar as many of you are with with other situations. I actually also serve on the health network board, GBM health network board. So I'm certainly aware of some of the challenges that the health network faces in bringing people to our state, whether it's doctors or any real health network. So mindful of that, but I certainly can't say that's part of our current experience.

[Michael Marcotte (Chair)]: Sure. Other questions? With the issues that have been happening in the federal government as far as budgeting and lack of money for TSA workers, other federal workers. I'm assuming you probably have some members that fall into those categories and were you able to assist them through all of that, all of those issues?

[John Dwyer (CEO, EastRise Credit Union)]: If I could be polite and bold at the same time, I would just simply say yes, we have programs for that, but there are others in the room who can certainly speak to their programs as well. Don't know, Jean or Bob, I know you both at least, know we think everybody has a program for those situations, so I certainly don't want to be the only

[Bob Morgan (CEO, NorthCountry Federal Credit Union)]: I think you said it well. For the record, Bob Morgan, CEO of North Country Federal Credit 78,000 members, the vast majority in Vermont. Most of us stood up programs that not only included easy modifications for skip payments and such, but a number of us had either 0% interest loans until the paychecks came in or very low interest loans to support those federal workers, and the impacts on them were very real, very, very real. So that's one tangible way that, you know, credit unions really show that we are cooperatives here to serve our members and here to serve kind of them in the good times and the tough times as well. That's what we do, and that's, you know, we certainly were part of it. East Drive is not bad. Everybody's afraid of it. Everybody had a role.

[John Dwyer (CEO, EastRise Credit Union)]: Unfortunately, we've had a lot of practice. We already have the product set up, so we never throw them back off the shelf. Underwriting is very easy.

[Jean Giard (Vermont Federal Credit Union)]: And we do monitor all of that. We monitor what's happening in Vermont at all times because of whatever affects our members. So, how do we respond to our membership in the problems that they're having and the problems that they're seeing. We look at that as what our purpose is. We take care of the people that are part of our membership. We have 63,000 members. I'm Jeanne Hierdy from Vermont Federal Credit Union, and our job is to take care of those members. So if they are TSA, if there's been a flood, if whatever's happening in the state of Vermont, respond

[Unidentified committee member]: to.

[Unidentified credit union representative]: If I may

[John Dwyer (CEO, EastRise Credit Union)]: say, I'm retired from thirty nine plus years working for you folks for the Green Mountain National Forest, other national forests up in California first,

[Unidentified committee member]: and longtime credit union member currently with Credit Union of Vermont now Vermont.

[Michael Marcotte (Chair)]: Congratulations on your success and breakthrough.

[Unidentified committee member]: And yeah, they were there for us when

[John Dwyer (CEO, EastRise Credit Union)]: we victims shut down and negotiated.

[Michael Marcotte (Chair)]: Questions? Adam, you got something?

[Adam McCrasson (Credit Unions Association)]: Adam McCrasson, Association of Foreign Credit Union. Just wanted to prompt the leaders to

[Michael Marcotte (Chair)]: give you a

[Adam McCrasson (Credit Unions Association)]: window into how fraud comes and goes from their credit unions at a higher level, not the court's debt legislation specifically, but just in general, what's the trend down fraud and how do we members

[Michael Marcotte (Chair)]: Well it would be nice to know about the transaction calls that we put

[John Dwyer (CEO, EastRise Credit Union)]: in First that we have the transaction will pass me. So I'll start with fraud and please jump in everybody. We now have four full time positions that are associated with fraud mitigation and fraud investigation. We are literally dealing with, this is a bad reference but twack a mole. It's literally every couple of weeks I hear of a news, whether you want to call it a scenario or whether you want to call it a vector or whatever the right terminology is. We had one last month that none of us had ever heard of and yet it a situation where it was 5 figures, tens of thousands of dollars, and I think we're all dealing with those situations. Unfortunately, members fall for the text messages, members fall for the phone calls. We on average have somewhere between twenty and thirty numbers a month who give away their online credentials. And that is not stopping. No matter how much education we do, we've done education for years, you see our websites, you see those things we advertise, we all do that. We all try to frame for members that we're not going to ask for information we already have, but we do have members who fall for it. It. There is some relationship to age, but it's not as directly related to age as one thinks across our membership. So we're spending a lot more money and a lot more time trying to catch things as quickly as we can. I think the opportunity that's in that bill to have somewhat of a cover for engaging, we already engage. We train a lot, we train our staff a lot, we train to look for signals, we train for the right questions they ask, and we engage in that number literally, not daily in some direction. And I think the ability to have that protection by basically denying a transaction, challenging as that decision is, you make, and as we've all dealt with the member on the other end of the phone who was upset with us because we did deny a transaction, I'm sure all of us have gotten that type of phone calls, and, you know, we are doing what we think is in the best interest of that number, and I can tell you there are way too many stories about where it's conversion

[Michael Marcotte (Chair)]: could be.

[John Dwyer (CEO, EastRise Credit Union)]: So I think the fraud, it's certainly not going to end. I think AI is gonna, unfortunately, make it worse because it's already we've actually tested my voice with our team. So you can use you may know this already, but a lot of people get emails from me at my office because that's one of the ways people they get calls and they're now getting, you know, we're testing them with calls in LiveVoice. So that's something that, it's a very small test just to be fair, it's not, but I think that's an example of what we're having to do in the industry to try to protect members money.

[Bob Morgan (CEO, NorthCountry Federal Credit Union)]: If I could add to too, and I'm not referencing any specific legislation, but Jonathan was mentioning whack a mole, and I think it's important to know that fraud happens across all sectors with their in person card, online, those pieces, but the ability, the fraudsters are going to use most advanced technology to its expertise, artificial intelligence also, so you know, different technology platforms. And it's going to be very important that legislation doesn't constrict the use of ours and technology to fight against that. So, you know, for fraud, we're implementing within our online mobile banking system some different detection tools that literally will understand the patterns of how you use your keyboard and how you type it, make sure that having those types of tools available to us, given the fact that members are giving out their credentials and bypassing the PEX verifications through those types of things, it's going to be very important for financial institutions to have in their tool belt to kind of combat have a very recent rise.

[Brett Smith (CEO, One Credit Union)]: Would be Brad Smith's one credit union, 18,500 members, so I'm kind of of this group, I'm the little guy, other credit unions, but it affects. The fraudsters don't care what size of the institution you are, it's the same impact, it's relative. And the use of AI and new technologies, they've grown even more brazen, I would say. We recently had a case where we flagged a loan application as potentially fraudulent and an individual actually came in with credentials in hand because there's websites where you can get ADP pay statements printed or other types of pay, you know, and so they still didn't get the loan, we still flagged it. We also learned that, you know, just looking on the credit report, was similar at other locations, so I think the network by sharing productivity has helped because we're able to reach out to other credit unions and say, hey, we saw this, be a heads up. So with technology, it's even more brazen than our size, which is about a tenth of the size of John's credit union. We're looking at having a full time fraud person just to be able to handle what's coming in as we've invested in extra technology to try to combat and improve identification because online, 80% of what we have now comes through online channels. Being able to pick that up and I think along the lines, not talk about the folks that people to be able to use online, our employees can't put eyes on an individual that's online to be able to tell if they look like they're in distress or doing something perhaps that might not be of their own will. It makes it that much more challenging. The investment, John was saying, is increasing quite a bit. So having protections in place for both sides, because that's always a concern. Nowadays, unfortunately, anything we look at today, the first thought is, okay, how are fraudsters going be able to use that against us? And what are we going to have to defend against in order to bring this new item that may benefit our members, but also could put them at risk.

[Unidentified credit union representative]: And beyond the technology, non technology events continue to happen, romance scams. Mean, we had a member just a few months back that we got the Secret Service involved trying to help protect this member's money and not send it somewhere they shouldn't send it. And despite all that, number still ended up losing some money. And so yeah, the technology advances are making it harder and harder and then just the simplest, massive events continue to happen. And we've done internally, we're not winning every one of these fraud battles. We're losing money sometimes, the members losing money sometimes, sometimes both, and we're starting to celebrate the large percentage of people that were saving them money and our staff is catching something and advising them on something, helping them not send that money to so and so. So it is a lot of effort going on by all five of our credit unions and statewide just to help our monitors.

[Jean Giard (Vermont Federal Credit Union)]: The heartbreaking part is when our members lose money, their savings, they've saved lifelong savings to a fraudster that's able to

[Michael Marcotte (Chair)]: To

[Jean Giard (Vermont Federal Credit Union)]: a fraudster who's not romance scammed, me and people lost

[Brett Smith (CEO, One Credit Union)]: a lot of

[Jean Giard (Vermont Federal Credit Union)]: money to them. We do work together. We work with the FBI and with other credit unions to talk about what's going on in our credit unions and with banks, very free with the information, talk to each other, talk to the community banks to be able to combat this fraud. So a of a statewide effort to try to keep this up and down.

[Unidentified committee member]: I'm curious how you all balance that with the user ability of your products. How do you balance the need for that friction, but also not wanting to discourage any customers?

[Unidentified credit union representative]: Sell is a good example. Everybody knows what Sell is, it's like a Venmo type of product and so we offer that and we've had to really restrict how much money we will allow going through that just to help minimize that risk the organization.

[John Dwyer (CEO, EastRise Credit Union)]: So you end up with what we call boundary controls. You have controls around, you might have a transaction limit and so

[Michael Marcotte (Chair)]: how much money you can lose

[John Dwyer (CEO, EastRise Credit Union)]: and you also have graduated identification based upon the risk of the transaction. So wiring money, you know we've been involved with wire fraud for decades, so there are pretty good controls, I'm sure we all have them, that the bigger the dollar amount for the wire, the more somebody's involved. There was a day in my career where I actually had to sign off on wires, they were high enough. But that question is really not easy to answer. I will just share it's a constant challenge because we're in the business of convenience. To the 99.9% of the members who don't lose money, they want us to be easy to do business.

[Unidentified committee member]: I remember the changes that have come in just opening up a banking account, it's all online now. That was something that you've had to walk into and present paperwork, and it's very different, as consumers really do expect that ease of use, but it's

[Michael Marcotte (Chair)]: a little tough.

[Bob Morgan (CEO, NorthCountry Federal Credit Union)]: Most of our institutions have inventoried all of our processes that allow us to do business and have the same kind of risk values associated with those, and then have sort of measured against what the controls are, you know, what are those friction points, whether it's called axon wires or different types of things to get to a point where we're able to compete in the marketplace based on speed, convenience, ease of use, but stay within sort of discipline. So it is an ongoing evaluation.

[Michael Marcotte (Chair)]: Questions?

[Jean Giard (Vermont Federal Credit Union)]: Thank you so much. Thank you for your time.

[Carrie Allen (Credit Unions Association)]: We appreciate all of you and the work

[Unidentified committee member]: that you do and for having me.

[Michael Marcotte (Chair)]: Thank you. Just so you all know too, Carrie's been in here quite often this year and represented you very well. Yeah, she has.

[John Dwyer (CEO, EastRise Credit Union)]: She's one of us, as you know. Appreciate that. We certainly think that she's wonderful and with her experience in the industry and is very, very much able to represent us very well.

[Michael Marcotte (Chair)]: Thank you. She's been very helpful those that we've put through here this year that dealt with our financial institutions, so we certainly appreciate it. Thanks. Thank you. Appreciate your

[Jean Giard (Vermont Federal Credit Union)]: hard work.

[Carrie Allen (Credit Unions Association)]: Thanks for joining. The sun's out.

[Michael Marcotte (Chair)]: Thank you. You for coming.

[Unidentified credit union representative]: I'll be able to hear myself on YouTube later. Yeah.

[Bob Morgan (CEO, NorthCountry Federal Credit Union)]: Will rather than have subscribers.

[Carrie Allen (Credit Unions Association)]: Thank you so

[Michael Marcotte (Chair)]: much. Thank you. I think maybe I think that's it for today. So tomorrow 03/27. And from seminary after break. I'm gonna ask if you So some discussions with them as well on that. AOE was invited. They've sent some different issues to all. Mhmm. That was just taking more. You One word. Back to one seventy three. One three. That's all. Day before and trying to be up in the meeting zone. We'll be back in the week. Might have to. For you. And next week, be getting into 03:13 and the CTE discussions. My interest is try to get that bill out by the end of next week or the beginning of the following week. The CTE? Yeah, so we can get that. It'll have to go to education and possibly weight and meat, citrus, have to go to the probes you do have that. Especially your working group. Working group in there soon.

[Jean Giard (Vermont Federal Credit Union)]: Okay. But

[Michael Marcotte (Chair)]: we have other things that are going on too. One ninety eight. One ninety eight. We're just working on that. That's reasonable. You're doing that tomorrow? Oh, that's I think that is tomorrow afternoon. Yeah. No. It is tomorrow. We changed it. Yeah. Think so. Thursday. Thursday morning.

[Carrie Allen (Credit Unions Association)]: Yeah. Thursday morning.

[Michael Marcotte (Chair)]: Okay. So I'm running together. Okay. So would that have any question?