WASHINGTON (12/19/14)--The Credit Union National Association and state credit union leagues spent 2014 advancing a legislative agenda designed to preserve credit unions' tax status and removing regulatory barriers preventing them from serving their members.
On Thursday CUNA released a
highlighting its legislative victories in 2014 and over the course of the 113th Congress.
"The credit union system was able to advance its priorities over the last two years, despite a challenging legislative environment," said CUNA President/CEO Jim Nussle. "This was no small feat: The 113th Congress will go down in history as the least efficient, having enacted less than 2% of the bills introduced. As a result of our collective efforts, Congress preserved the credit union tax status and took modest steps toward removing barriers that keep credit unions from more fully serving their members."
One of the major highlights from the 113th Congress was the preservation of the credit union tax status. Members from the Senate and House spent this year engaged in comprehensive tax reform talks, which began with the premise that everything was on the table.
Last year featured the launch of the "Don't Tax My Credit Union" campaign, and when the first draft of comprehensive tax reform was released in February by Rep. Dave Camp (R-Mich.), House Ways and Means Committee chair, credit unions' tax status was untouched.
"While tax reform did not cross the finish line this year, the favorable treatment the credit union tax status received in this initial draft represents a very significant victory, and should position us well when Congress resumes the tax reform debate next year," reads CUNA's report, which adds that both Rep. Paul Ryan (R-Wis.), incoming House Ways and Means chair, and Sen. Orrin Hatch (R-Utah), incoming Senate Finance Committee chair, are both expected to pursue tax reform next year.
Other highlights from CUNA's legislative advocacy efforts in 2014 include:
- Passage of the Credit Union Share Insurance Fund Parity Act, which extends share insurance coverage to lawyer trust accounts and other similar trust accounts. When passed by the House Financial Services Committee, it was the first stand-alone piece of credit union regulatory relief legislation to pass the committee since 1998;
- House passage of the Regulation D Study Act, which would direct the Government Accountability Office to study how the Federal Reserve uses Regulation D, the cap on automatic transfers between checking and savings accounts, to influence monetary policy;
- Getting more than 370 members of Congress to share their concerns with the National Credit Union Administration about the agency's risk-based capital proposal;
- Testifying three times on housing reform proposals and contributing several dozen pages of legislative language to the Senate Banking Committee; and
- Calling for hearings on the Target data breach, launching the "Stop the Data Breaches" campaign and hosting coalition meetings with banking industry associations to develop a strategy for data breach legislation for the new Congress.
"More certainly needs to be done to remove the barriers that keep credit unions from more fully serving their members, which is why we plan to take an ambitious 'removing barriers' agenda to Congress when it convenes in a few weeks," Nussle said. "We also plan to renew vigorous advocacy on behalf of the credit union tax status as Congress turns its attention back to comprehensive tax reform."
ALEXANDRIA, Va. (12/19/14)--The Department of Defense (DOD) should exempt National Credit Union Administration Payday Alternative Loans (PALs) from its Military Lending Act proposal, NCUA Chair Debbie Matz said in a
filed with the DOD Thursday.
In her comment letter, Matz said exempting PALs would continue to allow federally insured credit unions (FCUs) to provide affordable credit alternatives to the military and its families.
"PALs serve as a viable alternative to predatory payday loans and can help members avoid or end dependency on those loans," Matz wrote. "In fact, the department's report on enhancing protections on consumer credit for servicemembers and their dependents cites PALs as an example of 'small dollar loans designed to assist servicemembers who appear to need a way out of unmanageable debt.'"
Matz added that while the agency supports consumer protections and the goal of the proposed rule, the NCUA believes its regulation permitting payday alternative loans "appropriately balances" the needs of consumer protection and affordable credit.
The NCUA's current regulation, issued in 2010, allows federal credit unions to offer PALs with a rate cap of 1,000 basis points above the 18% general rate cap for credit unions and an application fee of up to $20.
"The PALs regulation reflects NCUA's careful deliberation about how to develop a product that would enable FCUs to offer their members a reasonable alternative to high-cost payday loans," Matz wrote. "PALs have beneficial features that protect borrowers, and the evidence to date shows that PALs are considerably cheaper than payday loans."
Under the DOD's proposed rule, consumer credit to covered borrowers is subject to a 36% cap on the military annual percentage rate (APR), which includes application fees. According to the NCUA, if these regulations are revised to cover payday alternative loans, the rate and fee for many payday alternative loans would be higher than the military APR cap.
The Defense Department's proposed rule would cover other types of consumer credit as well, including credit card accounts and overdraft lines of credit with a finance charge.
WASHINGTON (12/19/14)--The Consumer Financial Protection Bureau (CFPB) has proposed amendments to its mortgage servicing rules that were first introduced in 2013. The
would amend provisions in Regulation X, which implements the Real Estate Settlement Procedures Act, and Regulation Z, which implements the Truth in Lending Act.
According to the CFPB, the proposed amendments focus primarily on clarifying, revising or amending provisions regarding force placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X's servicing provisions. The Regulation Z amendments involve periodic statement requirements under its servicing provisions.
Among other things, the proposal would:
- Change how a servicer must respond to requests for information asking for ownership information for loans in trust for which Fannie Mae or Freddie Mac is the trustee, investor, or guarantor;
- Clarify the early intervention live contact obligations and written early intervention notice obligations. The bureau is also proposing to require servicers to provide written early intervention notices to certain borrowers who are in bankruptcy or who have invoked their cease communication rights under the Fair Debt Collection Practices Act;
- Clarify how servicers must treat periodic payments made by consumers who are performing under either temporary loss mitigation programs or permanent loan modifications. Under the proposal, periodic payments made to temporary loss mitigation programs would continue to be credited according to the loan contract and could be credited as partial payments, while periodic payments made to a permanent loan modification would be credited under the terms of the permanent loan agreement;
- Exclude certain seller-financed transactions from being counted toward the 5,000 loan limit placed on institutions defined as "small servicers," allowing servicers that would otherwise qualify for small servicer status to retain their exemption while servicing those transactions; and
- Make several changes to loss mitigation requirements, including requiring servicers to meet the loss mitigation requirements more than once in the life of a loan for borrowers who become current after a delinquency; and clarify that servicers have significant flexibility in setting a reasonable date by which a borrower must return documents and information to complete an application, so long as the date maximizes borrower protections and allows borrowers a reasonable period of time to return documents and information.
The proposed rule also makes technical corrections to several provisions of Regulations X and Z. Comments on the proposal are due March 16.
ALEXANDRIA, Va. (12/19/14)--The National Credit Union Administration is projecting no Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments this year, and "only a possible small premium" for the National Credit Union Share Insurance Fund (NCUSIF), according to a letter sent to federally insured credit unions Thursday.
, sent to boards of directors and CEOs of federally insured credit unions, outlines a projected potential NCUSIF premium of zero to five basis points of insured shares. These projections are the same as they were for 2014, and no premium was charged this year.
The more than $1.75 billion in legal recoveries against Wall Street firms that sold faulty securities to five failed corporate credit unions is the primary reason for no assessment, according to the agency.
The NCUSIF remains at the 1.3% normal operating level as of Sept. 30, and after Dec. 31 the agency will transfer anything over that number to the TCCUSF, as required by statute.
According to the NCUA, three factors will drive the NCUSIF's equity ratio in 2015: growth in insured shares; yield on NCUSIF investments; and the cost and pace of credit union failures.
However, in the event of a very large credit union failure, "actual premium needs in 2015 could vary from the projected range," the letter reads.
WASHINGTON (12/19/14)--The Credit Union National Association hailed President Barack Obama's signing of the Credit Union Share Insurance Fund Parity Act Thursday.
"Each time the government removes barriers that hinder the operations for the nation's credit unions it is a victory for U.S. consumers," said CUNA President/CEO Jim Nussle. "Credit unions can better serve their members, through their consistently superior service and lower fees and better rates, when not encumbered by unnecessary constraints that do nothing to maintain credit unions' stellar safety and soundness record."
The law creates deposit insurance parity for credit unions by directing the National Credit Union Administration to extend share insurance coverage to trust accounts, such as Interest on Lawyer Trust Accounts (IOLTA) and other similar accounts, opened and managed by credit union members.
Nussle added that CUNA is proud to have been an early and prominent supporter of the IOLTA bill in both the House and Senate.
The statutory change was needed, CUNA had argued, because the NCUA historically had interpreted that the Federal Credit Union Act did not permit it to extend share insurance coverage to trust accounts.
"CUNA thanks the president for signing this change into law," Nussle said, adding, "And we repeat our thanks to Sens. Angus King (I-Maine) and Mark Warner (D-Va.) and Reps. Ed Royce (R-Calif.) and Ed Perlmutter (D-Colo.) for standing with credit unions to bring parity to the not-for-profit cooperatives, their members and the communities they serve."
The Senate passed the bill by unanimous consent last week and the House voted passage in May.
WASHINGTON (12/19/14)--Mortgage rates tracked by Freddie Mac continue to drive lower, as the government-sponsored mortgage giant reported Thursday that rates have hit their lowest points for 2014.
According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage fell to 3.8% for the week ending Dec. 18, a drop from the 3.93% seen last week. In 2013, the rate averaged 4.47% (
"The 30-year fixed mortgage rate dropped to its lowest point of 2014 this week," said Frank Northaft, vice president/chief economist for Freddie Mac. "Mortgage rates fell along with 10-year Treasury yields, which closed at their lowest level since May 2013."
The 15-year fixed-rate mortgage rate dropped to 3.09% for the week, falling from 3.2% the week prior and 3.52% from its year-ago level.
Further, the five-year Treasury-indexed adjustable-rate mortgage rate slipped to 2.38%, down from 2.98% the prior week, and the one-year Treasury-indexed adjustable-rate mortgage rate fell to 2.38%, a slight drop from 2.98% the prior week.
"November housing starts came in at a seasonally adjusted annual rate of 1.028 million starts, down 1.6% from an upwardly revised October value," Northaft said. "Housing starts for the calendar year will likely come in around 1 million, above the 2013 pace but lower than forecasters had expected at the start of 2014."
reported similar falling mortgage rates, with rates dropping for the sixth consecutive week based on its data (
The 30-year fixed-rate mortgage rate tracked by
fell to 3.94% from 4.03%, and the 15-year fixed rate fell to 3.21% from 3.28%.
Daily Financial Rates -- 2014-12-19
Friday, December 19, 2014
03:55 AM CST
TREASURY YIELD CURVE
(based on the $1 million market)
Results of the December 15, 2014 auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $ 1 million
||Last changed December 16, 2008 |
|near closing bid||0.120||0.100||0.100||0.100||0.100|
FREDDIE MAC (Mortgage commitments, 30 days)
FANNIE MAE (Mortgage commitments, 30 days)
COMMERCIAL PAPER (Financial, 90 days)
: Data not available at time of page generation (shown at top of page)
Wall Street Journal
U.S. Dept. of the Treasury
All rates are from the previous business day unless otherwise noted.
DES MOINES, Iowa (12/19/14)--The World Council of Credit Unions has selected Pat Jury, president/CEO of the Iowa Credit Union League, to serve as executive committee treasurer for the council's board.
The World Council board is made up of representatives from the United States, Canada, Brazil, Guatemala, Jamaica, Poland and Australia. Jury, a 20-year veteran of the league, has served as president/CEO of the Illinois league since 2006.
"The World Council advocates on behalf of the global credit union system," Jury said. "It is an honor to serve on the World Council's executive committee to help improve the financial lives of members worldwide."
In addition to his service with the league, Jury also represents Iowa credit union interests as an executive committee member of the Credit Union National Association.
"Pat has provided strong strategic and forward-looking guidance for the World Council and its members in the areas of advocacy and payments innovation," said Brian Branch, World Council president/CEO. "He (also) has earned the respect of credit union leaders in Australia, Panama, Poland and Guatemala where he has led cross-border engagements on credit union system evolution."
LIVONIA, Mich. (12/19/14)--A reward fund amassed by the Michigan Credit Union League (MCUL) to help investigators track down criminals allegedly behind a string of recent credit union robberies went unused, but police officials said they were glad the fund was still available.
Six people have been federally charged in connection with eight robberies of six credit unions in Michigan. The men were picked up following a traffic stop Dec. 11 and were allegedly on their way to rob another credit union (
To help bring in the criminals, the Michigan league collected money from credit unions to form a fund that would have served as a reward for any help that led to arrests. In all, the league received $5,000, which MCUL said it would have doubled.
In the end, the suspects were caught and the reward wasn't used.
"We've had very good feedback from several credit union CEOs thanking us for the efforts in organizing the pledges and working with the Lansing Police Department, even though it wasn't actually utilized this go around," said Ken Ross, MCUL executive vice president/chief operating officer. "The Lansing police were very thankful for our efforts to make a reward available if the investigation stalled."
Eight robberies of credit unions were listed in the affidavit in support of the federal complaint, including incidents at Astera CU, Lansing, with $153 million in assets; Lake Trust CU, Brighton, with $1.6 billion in assets; Genisys CU, Auburn Hills, with $1.6 billion in assets; CASE CU, Lansing, with $249 million in assets; and Community Choice CU, Farmington Hills, with $531 million in assets.
MARLBOROUGH, Mass. (12/19/14)--More than two dozen credit union executives received an education this week in new trends in the payments industry at a symposium held by the Massachusetts Credit Union League in Marlborough, Mass.
The Emerging Payment Trends Symposium--which focused on how to most appropriately spend credit union resources when it comes to payments--was led by four panelists who work intimately with or in the payments field.
Panelists included Leah Work, business development manager, CO-OP Financial Services; James Heystek, senior director, FIS; Robb Gaynor, co-founder, Malauzai Inc.; and Tim Segerson, deputy director of the Office of Examination and Insurance, National Credit Union Administration.
Together, the group worked to help clarify for attendees the risks and opportunities associated with EMV/chip technology, tokenization, mobile banking and e-wallets.
Work addressed EMV technology and the process the industry is going through to fully adopt it in the United States.
Whether credit unions choose to adopt EMV technology by October 2015--the deadline mandated by the government--they still must bolster fraud-monitoring activities and be prepared once fraud occurs, Work said.
The reason is because most large retailers will have implemented the technology by the deadline, and any costs associated with fraud at that point will fall in the laps of credit unions that aren't EMV ready.
Heystek, meanwhile, focused his discussion on Apple Pay and tokenization. He spoke about his company and how it works with financial institutions to help them determine whether they can adopt and offer Apple Pay to members and customers.
Heystek also said that while many consumers who use Apple products have signed up for Apple Pay, other companies that offer tokenization might take charge of the market in the future.
Gaynor spoke about e-wallet technology, and explained that credit unions should prepare their members for widespread adoption of this technology by leveraging existing wallet innovations, such as picture pay, debit card management--where a member can turn on and off his or her debit card--and a future cash calendar.
SANTA MONICA, Calif. (12/19/14)--While the week between Christmas and New Year's is viewed as a bit of a break for many, it will be the busiest car-shopping week of the year, according to
--and a prime time for credit unions to make vehicle loans.
Dubbing the week "New Car, New Year,"
projects that new car sales during the final week of December will be 78% higher than the average a week earlier in December, while typically the last week of any month averages just 40% higher than the sales in earlier weeks.
"The final week of the year, between Christmas and New Year's, is a particularly exciting time for car shoppers," said Philip Reed,
senior consumer advice editor. "As the dealers look to sell the last of their 2014 model year vehicles, car shoppers will have the opportunity to choose from a wide range of cars at affordable prices."
The company also noted that December is typically one of the most popular months for luxury car shopping, thanks in part to all of the marketing messages presented by some of the higher-end brands looking to close out the older model year inventory.
offers these tips for holiday car shoppers:
Save big with 2014 models.
projects that year-end incentives and rebates will save shoppers an average of 10% off the manufacturer suggested retail price (MSRP) for 2014 model year vehicles, compared with 6% off MSRP for 2015 model vehicles. Those in the market for 2014 model year vehicles can save almost twice as much over 2015 models;
Shoppers can use their smartphones to research and lock in pricing before arriving at the dealership.
offers an app for shoppers to check pricing options while on the dealership lot;
Shop on the Internet.
Using the Internet, car-shoppers can compare quotes and even set up a test-drive and lock in instant pricing once they've found the best deal; and
Get pre-approved financing.
By working with a credit union, car shoppers can get their credit score, find out what interest rate they qualify for and have a loan in hand before hitting the dealerships.
ALBANY, N.Y. (12/19/14)--New York Gov. Andrew Cuomo Wednesday signed into law a historic piece of pro-credit union legislation that will allow state-chartered credit unions to combine select employer groups, associations and community groups into a single field of membership.
The New York Credit Union Association (NYCUA) worked closely with Cuomo's office, the Department of Financial Services (DFS) and lawmakers to help draft and advance the legislation. The law marks the first time that stand-alone, pro-credit union legislation--beyond federal parity legislation--has been incorporated into the state credit union act.
"New York has a long banking history and is largely considered a bankers' stronghold. But this law shows significant progress, and it sends a strong message that New York supports and recognizes the economic and financial importance of state-chartered credit unions," said NYCUA President/CEO William J. Mellin. "This law is a testament to many years of hard work and the positive relationships built between the association, the state's credit unions and our elected officials."
Under the new law, credit unions must still meet common-bond requirements. The law does not create any new affiliation or membership categories. The DFS will still be responsible for approving field of membership expansion requests.
The legislation passed through the state Legislature in June for the second time in two years. In 2013, a previous version of the legislation was vetoed by Cuomo, who was concerned that the bill diluted the authority of the DFS. However, the new law contains clarifying language regarding the DFS' authority, as well as language empowering the DFS to determine additional permissible investments for state-chartered credit unions.
NYCUA pushed for the new legislation in an effort to provide the state's credit unions with a viable, healthy, attractive and competitive alternative to the federal charter.
The law takes effect March 16.
DES MOINES, Iowa (12/19/14)--Iowa credit unions reported a loan growth rate nearly three times faster than that of national banks in the third quarter, according to the Iowa Credit Union League (ICUL).
"The increase in loan growth at Iowa credit unions is a reflection of consumers' confidence in the economy and their corresponding willingness to buy bigger ticket items this year," said Patrick S. Jury, ICUL president/CEO. "The consistent growth in membership and loans is reflective of how Iowa credit unions are working to improve the financial lives of their members."
Iowa credit unions posted a loan growth rate of 13.5%, according to National Credit Union Administration data. Particularly strong activity was reported in new auto lending, with 21.7% growth.
Consumer loans for the first nine months of 2014 were up $276.3 million from the third quarter 2013. Overall, Iowa credit unions originated $2.1 billion in consumer loans in the third quarter.
Total assets stand at $12.5 billion--a 6.8% increase from September 2013. Return-on-assets for third quarter 2014 stands at 1.09%. This reflects a three basis-point increase from the third quarter of 2013.
Membership increased 1.9% to 1,036,758 members, with Iowa credit unions adding almost 19,000 members in the last 12 months.
Nationally, federally insured credit unions have been reporting strong loan growth all year and that positive trend even picked up a bit during the third quarter of this year, according to National Credit Union Administration state-level data released earlier this month (
For credit unions nationwide, the median growth rate for loans outstanding was 3.5% during the year ending in the third quarter. That was up from the 1.8% median growth rate in the year ending Sept. 30, 2013.
MADISON, Wis. (12/19/14)--A "Happy Holiday" can make someone's day merry, and credit unions and leagues created some memorable season's greetings this year.
The Credit Union Association of the Dakotas collected 2014 highlights from its staff in a holiday
From the Ohio Credit Union League comes a YouTube
of the staff's favorite musical selections, including John Popper and Eric Clapton's "Christmas Without You" from President/CEO Paul Mercer, Straight No Chaser's "12 Days" from Bonnie Gall, CU Shared compliance specialist; and The Boston Pops' version of "Sleigh Ride" from Patrick Harris, director of legislative affairs.
The Cornerstone Credit Union Foundation's
offered a simple, heartfelt greeting from Executive Director Courtney Moran, Associate Director Staci Zale and Administrative Coordinator Cassandra Krumme: "We send our best wishes to you and yours during this holiday season."
Icon CU, Boise, Idaho, is serving up
of Christmas cuisine with sweet, savory or spicy holiday recipes shared by staff of the $169 million-asset credit union.
Employees of Innovations FCU, Panama City Beach, Fla., with $157 million in assets, created a video with a
of a capella group Pentatonix's "Carol of the Bells."
Tampa, Fla.-based Grow Financial FCU, with $1.9 billion in assets, shared the spirit of its #12DaysofMore campaign, looking back at the top moments from its "World of More" initiative.
DETROIT (12/16/14)--The holidays are synonymous with giving, as seasonally warm feelings for humanity combine with charities searching for a year-end boost to their bottom lines.
While this is mostly a good thing, potential givers should be careful: Many fraudsters and unscrupulous organizations are looking to take advantage of their good intentions. A few simple questions and a quick online lookup are usually all it takes to determine if a charity is legitimate.
Ask about the charity's history, location, and tax ID number--if the answers seem fishy or vague, don't open your checkbook (The Detroit News
Dec. 10). If someone is soliciting money in person, don't be afraid to pause and research the organization on your smartphone before deciding to donate.
Even better, take steps to avoid feeling guilt for declining just because someone asked you to give. The New York Times
offered these tips last week for creating a giving plan.
Decide how much you want to give--either a dollar amount or percentage of income. Then choose an organization.
Pick a charity that aligns with your beliefs and will spend your donation responsibly. The website Give Well has analyzed thousands of charities and provides information about their pros and cons.
Decide how often you want to give and then follow your plan. By budgeting your generosity, you'll know exactly how much you've given and to whom come tax time.
When asked for a donation by other organizations, simply explain you've already given another way.
For related information, read "Financial Gifts Can Improve Well-Being" and "Holidays Are Rich With Teachable Money Moments" in the Home & Family Finance Resource Center
GRAND RAPIDS, Mich. (12/19/14)--CU*Answers, a Grand Rapids, Mich.-based credit union service organization, has launched a National Credit Union Administration-endorsed small-dollar lending program for federal credit unions designed to protect members from predatory payday lenders.
Payday Alternative Loans (PALs), part of CU*Answers' "Just Turn it On" initiative, gives credit unions a chance to transition borrowers to more traditional products offered by credit unions and break the cycle of reliance on payday loans.
With its "Just Turn It On" initiative, CU*Answers helps credit unions manage the launch of new products.
"CU*Answers will configure the product, provide training, policy examples and ensure the credit union is prepared to leverage results and help members, " said Mary Dwyer, CU*Answers account executive.
PALs are not only an economical choice compared with traditional payday loans; they can strengthen the member's credit history. When a member can be removed from the negative cycle of payday lending, they can successfully move toward more traditional forms of lending.