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March 2, 2015

NEW: CUNA-backed bill to raise MBL cap introduced

WASHINGTON (3/2/15 UPDATED 1:15 p.m. ET)--CUNA welcomes the reintroduction today of a bill that would raise the cap on credit union member business lending (MBL) to 27.5% of assets. Introduced by Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.), the Credit Union Small Business Jobs Creation Act (H.R. 1188) is identical to a bill introduced by Royce in the last Congress.

"I thank Reps. Royce and Meeks for their strong leadership and support of credit unions and small businesses," said CUNA President/CEO Jim Nussle. "This common sense legislation would allow credit unions to do so much more to help small businesses grow, creating jobs for hard working Americans and boosting our economy."

To qualify for the higher MBL threshold, credit unions must be well capitalized, have a history of MBL experience, be operating at no less than 80% the cap for the previous year and receive approval from the National Credit Union Administration.

CUNA estimates that raising the cap from the current 12.25% of assets would create 150,000 new jobs and allow credit unions to lend an additional $14 billion to small businesses, with no cost to taxpayers.

"Current regulations arbitrarily cap the ability of our nation's credit unions to lend to small businesses. Main Street businesses looking to expand and hire more workers have suffered as a result," said Royce in a statement. "The Credit Union Small Business Jobs Creation Act removes this obstacle to lending and ensures that qualified credit unions are better able to support Americans who need loans to start, sustain, or grow their businesses."

Raising the MBL cap is a major legislative priority for CUNA, due to the regulatory relief it would achieve. CUNA will send a letter of support for the legislation.

GAC countdown: Treasury's Gerety, CFPB's Martinez invited to join power-packed lineup

WASHINGTON (3/2/15)--With CUNA's Governmental Affairs Conference (GAC) set to kick off in less than a week, two key federal policymakers have been added to a lineup that already features a number of high-profile regulatory and legislative policymakers.

Amias Gerety, just nominated last week by President Barack Obama to the position of assistant secretary for financial institutions at the U.S. Department of the Treasury has been confirmed to speak, and CUNA also has invited Zixta Martinez, associate director for external affairs at the Consumer Financial Protection Bureau (CFPB).

"This being my first GAC, I'm proud we've put together such a power-packed agenda for the nearly 5,000 credit union leaders who will be flooding to Washington for the credit union movement's premier conference," said CUNA President/CEO Jim Nussle.

Gerety and Martinez will join a list of speakers that include: Retired Gen. Stanley McChrystal; legislator, governor and inaugural Secretary of Homeland Security Tom Ridge; Ari Fleischer, former White House press secretary for President George W. Bush; and Arianna Huffington, author, columnist and co-founder/editor-in-chief of The Huffington Post.

At least 10 senators and representatives are also confirmed to speak, and a number of others will make video addresses to the audience. Jason Furman, chair of the White House Council of Economic Advisors, and all three National Credit Union Administration board members will also address the credit union crowd.

Breakout sessions covering the top issues facing credit unions, such as the NCUA's risk-based capital proposal, tax reform, data breaches and regulatory burdens, will be moderated by CUNA staff and other credit union experts.

In addition to the speakers and sessions, there will be an exhibit hall featuring nearly 1,000 exhibitors from more than 200 companies that provide products and services to credit unions. And credit union visits to Capitol Hill to discuss top issues with federal lawmakers and their staffs remains a central strength of the CUNA GAC.

New bill highlights support in Congress for NCUA budget transparency

WASHINGTON (3/2/15)--Rep. Mick Mulvaney (R-S.C.) wants the U.S. Government Accountability Office (GAO) to study the National Credit Union Administration's budgeting practices and identify ways the agency can increase the transparency of its process to its regulated credit unions, the U.S. Congress and the public in general. It is a goal strongly advocated by CUNA and the trade association has worked steadily toward that end since the NCUA ceased its budget-hearing process in 2009.

On Friday, Mulvaney introduced The NCUA Budget Transparency Act (H.R. 1176).

CUNA Chief Advocacy Officer Ryan Donovan said that the introduction of the bill, combined with the interest in the budget transparency issue following the recent Senate Banking Committee hearings on regulatory relief for credit unions and community banks, is further evidence that there is congressional interest in how NCUA is using the funds that credit unions--and by extension their members--send the agency and whether the agency is sufficiently taking into consideration stakeholder concerns.

"CUNA has suggested that one small step NCUA could take in an effort to improve the budget process would be to resume the budget hearings that were conducted for several years.

"This proposal is one that has resonated with members of Congress, of course, because they receive similar stakeholder input on a regular basis through the hearing process on Capitol Hill. A budget hearing wouldn't be burdensome to the agency or the board members, but it would be a meaningful step the agency could take to send the signal that they understand the concerns credit unions have regarding the increases in the budget and the use of the resources credit unions provide," Donovan emphasized.

If enacted, the Mulvaney legislation would require the GAO to report its findings to federal lawmakers within 18 months of enactment.

CUNA backs Miller bill to ease vets' access to CU biz loans

WASHINGTON (3/2/15)--A bill that would exempt business loans to veterans from credit unions' statutory cap was introduced Friday by Rep. Jeff Miller (R-Fla.) and has CUNA's support. The bill, H.R. 1133, is identical to a bill introduced last Congress and would amend the Federal Credit Union Act to enhance credit union lending to veterans looking to start or finance a small business.

"Credit unions welcome the introduction of Congressman Miller's bill that allows veterans more access to capital by granting credit unions relief to the member business lending cap," said Sam Whitfield, CUNA deputy chief advocacy officer. "This legislation is a win for everyone."

Credit unions are currently bound by statute to cap member business lending at 12.25% of total assets. CUNA is a longtime advocate of raising the cap and supports a legislative fix that would raise it to 27.5% of assets.

"With so many of our veterans possessing membership with credit unions, exempting them from this lending cap would allow veterans with an entrepreneurial spirit better access to capital," Miller said in a statement.

Nussle, Cummins share CU difference with Minn. biz journal

CU System
ST. PAUL, Minn. (3/2/15)--The Minnesota Business Journal received an education in the credit union difference recently, as Jim Nussle, CUNA president/CEO, and Mark Cummins, president/CEO of the Minnesota Credit Union Network, sat down with the publication to talk data breaches, legislative priorities and credit union growth.

At the forefront of the Business Journal's line of questioning was cybersecurity and the effect data breaches have on credit unions compared with banks.

"We are not-for-profits, so we don't have a lot of capital reserves lying around we can put toward added costs," said Nussle, who was in the Twin Cities last week to visit the league. "We're working with all our financial-services partners in Washington on legislation to push merchants to protect consumer data.

"In this day and age, it should be a given that you have a responsibility to protect the data of your customers, in much the same way the doctor's office has to protect patient data."

The Business Journal also asked if presenting credit unions as the "good guys" in the aftermath of the financial crisis, especially compared with big banks, has paid off for the movement.

In response, Cummins pointed to the recent strong growth in memberships, even among younger demographics.

"What we're hearing from folks is they're seeing a lot more younger members who are joining because of that base premise of us being a nonprofit model and operating in the best interest of clients," Cummins said. "They also don't view bigger as better. They've grown up during a time when they've seen that the security you once had as a worker for a larger national company is secure no longer."

Nussle also explained that easing regulatory burden for credit unions in general tops the list of legislative priorities for the credit union industry.

"Since 2009, when the big banks were failing, more than a dozen agencies have enacted over 190 regulations totaling nearly 6,000 pages," Nussle said. "If you're a small credit union, that's what you have to know just to open your doors in the morning."

Pew: Americans' optimism tempered by fin. insecurity

CU System
WASHINGTON (3/2/15)--U.S. consumers feel better about their day-to-day finances and the economy than they have in years, but Jane and Joe Average are still not getting ahead, according to a survey conducted by The Pew Charitable Trusts.
Click to view larger image(The Pew Charitable Trusts Image)
Many of those polled said they are barely breaking even or spending more than they make each month, and more than half said they feel unprepared for a financial emergency.
The results, captured in a new issue brief "Americans' Financial Security: Perception and Reality," are based on a nationally representative survey of more than 7,000 households, and on focus groups conducted in Orlando, Fla., Boston and Phoenix. The survey gauged Americans' perceptions of their financial security and how their views differ depending on their income, wealth, race and other demographic factors.
In late 2008, just 9% of Americans rated the economy positively. As of 2014, Pew's survey finds that figure has climbed to 27%. As low as these positive ratings may seem, they are similar to those found in polling in late 2007, on the eve of the Great Recession, and reflect more optimism than was evident during the aftermath and recovery.
As Americans' views of the economy have improved, so has their sense of their own finances. A majority (56%) rate their financial situations positively, up from 42% during the recession in 2009.
But only half of Americans (51%) said their households are financially secure. A majority (57%) said they are not financially prepared for the unexpected. More than half (55%) of respondents reported just breaking even or spending more than they make each month, and one-third (33%) said their household has no savings.

Consumer Protection Week aligns with CU model: Nussle

WASHINGTON (3/2/15)--Credit unions welcome the designation of March 1-7 as National Consumer Protection Week (NCPW) as a way to highlight resources available to help consumers manage their money, handle credit and debt, stay safe online and avoid identity theft, said CUNA President/CEO Jim Nussle.
"The idea behind NCP Week dovetails with what credit unions do every day for their members. We make reliable and affordable financial services and products available to all Americans," Nussle pointed out.
"Financial education is a key component to consumer protections in the financial arena--and it is a priority of the credit union movement," Nussle noted.
He pointed to such programs as CUNA's Googolplex, the youth financial education resource; Home & Family Finance Resource Center; Biz Kid$, the Emmy Award-winning and credit union-funded public television series that teaches kids about money management; and free financial education and training for members as just a few of the options available to consumers thanks to credit unions.
The week's theme, he said, also underscores the need for CUNA-advocated improvements in merchant data security standards to keep consumers' personal information secure.

"If consumers are truly to be protected, merchants must be held to the same high data protection standards as are credit unions and other financial institutions," Nussle emphasized.

CUNA recommends CU candidates for CFPB advisory groups

WASHINGTON (3/2/15)--CUNA noted in a letter Friday that credit union representation at the Consumer Financial Protection Bureau (CFPB) through membership on its advisory boards is key to ensuring the unique perspective of credit unions is not only heard, but also taken into consideration as a part of any and all rulemakings affecting credit unions.

CUNA President/CEO Jim Nussle sent the letter to recommend credit union candidates for the CFPB's  Credit Union Advisory Council (CUAC) and Consumer Advisory Board (CAB).

Nussle wrote the credit union leaders nominated by CUNA would bring "collective and individual experience, knowledge and expertise on issues relating to consumer protection, financial institution operations, financial regulations and public policy concerns."

Appointments to the CFPB groups are generally for two years but can be modified by the CFPB director. New members of the councils will begin their terms this fall.

The CUAC advises the bureau on regulating financial products and services, and how it will affect credit unions. It currently consists of 16 members, and is chaired by Rose Bartolomucci, president/CEO, Towpath CU, Fairlawn, Ohio. The council is permitted to have between 15 and 20 members.

The CAB is a group of experts on topics such as consumer protection, community development, fair lending and underserved communities. The board informs the bureau of emerging practices and trends in the consumer finance industry.

The board must have at least 16 members, and currently has 31 members. It is chaired by Bill Bynum, CEO, Hope FCU, Jackson, Miss.

Filene IDs 5 challenges for women in CU leadership

CU System
MADISON, Wis. (3/2/15)--A recent paper from the Filene Research Institute investigates the challenges women face as leaders within the credit union movement.

Click to view larger image (Filene Research Institute Graphic)
"Five Challenges: Enhancing Women's Leadership in Credit Unions" uses organizational and social-psychological literature about women's advancement in the workplace to examine the specific factors that support or hinder women's leadership within credit unions.

The paper also illustrates the results of a 76-question survey sent to credit union employees and board members across North America about the challenges women face in the industry.

The survey found that many small factors nibble away at career advancement. The five most pressing challenges are:
  • The pipeline problem: Women often start working for a credit union in lower-level roles and in departments that don't directly lead to the executive suites;
  • Leadership style and perception: Women seem slightly more likely across asset sizes to use authoritarian styles, but they also perceive themselves as having less power and influence than men;
  • Leadership climate: Employees at credit unions with female CEOs perceive themselves differently and act differently than those at similar credit unions with a man in charge. At male-led credit unions, men believe their skills are significantly more valued. The same is true for women at female-led credit unions;
  • Ambition and motivation: While male and female credit union employees are equally ambitious, mentors and sponsors often sort along gender lines, making it more difficult for women to find a hand up; and
  • Family concerns: Neither men nor women report family as a career inhibitor, but at the senior level, men are much more likely than women to have children, implying a trade-off between career and family.

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