ALEXANDRIA, Va. (7/24/14)--Calling the National Credit Union Administration's risk-based capital proposal a solution in search of a problem, Sens. Richard Shelby (R-Ala.) and Mark Begich (D-Alaska) weighed in with letters to the agency.
Shelby, the past chair of the Senate Banking Committee, said the proposal would require Alabama credit unions to raise capital levels by approximately $129 million to remain well-capitalized, "with potentially no beneficial upside."
He also raised concerns that the proposal may exceed the authority granted by Congress in the Federal Credit Union Act, because the act only gives authority to the NCUA to establish a risk-based standard to weigh risk in circumstances where the net worth ratio does not provide adequate protection.
"The proposed rule, however, would impose a risk-based standard to be deemed well-capitalized, which is arguably beyond the scope of the Federal Credit Union Act," Shelby wrote.
Both senators noted that credit unions, along with the National Share Insurance Fund, performed properly during the financial crisis. Begich, in his letter, said credit unions "demonstrated remarkable strength and durability" during the financial crisis, and he praised credit unions for avoiding "the same risky practices as large banks," which allowed them to avoid the need for taxpayer assistance.
"Particularly in markets underserved by traditional financial institutions, as in Alaska, credit unions stepped in and filled the void that was left as credit from other institutions dried up," he wrote. "And they did so effectively and responsibly under current and existing regulations.
The letter goes on to request that the NCUA take into account the "overwhelming feedback" on its risk-based capital proposal as to not unfairly burden credit unions.
Begich, who was first elected in 2008, has been a vocal proponent for credit unions, advocating for credit unions to keep their tax status, and vowing to "twist arms" of other members of Congress to raise the member business loan cap to 27.5% of assets from the current $12.25%.
WASHINGTON (7/24/14)--Former Democratic Rep. Barney Frank said he supports raising the threshold for examination by the Consumer Financial Protection Bureau to financial institutions above the current $10 billion-in-assets cutoff.
Frank, a former House Financial Services Committee chairman and co-drafter of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, said this while testifying Wednesday before that panel at a hearing examining the four years since the passage of the Dodd-Frank Act.
The Credit Union National Association advocated the same position before the committee in a regulatory relief hearing last week. The higher exemption would be important to credit unions and community banks. For those with assets below the threshold, examination for compliance with consumer financial protection laws would remain with their prudential regulator, rather than with the Consumer Financial Protection Bureau. For credit unions that is the National Credit Union Administration.
The former congressman from Massachusetts did not propose any specific asset level for a higher exemption, stating that any number is "arbitrary."
The role of credit unions and other community financial institutions came up several times over the course of the hearing:
- Rep. Gregory Meeks (D-N.Y.) said the act has given credit unions and community banks a "foundation to build upon," and that these institutions are starting to lend more, but more carefully since the act was passed;
- Rep. Sean Duffy (R-Wis.) said that instead of ending "too big to fail," the act has helped larger institutions and hurt credit unions and other small institutions because families and businesses are finding it harder to access credit under the weight of excessive regulations;
- Rep. Dennis Ross (R-Fla.) said credit unions in his district have had a more difficult time doing residential mortgages with new regulations; and
- Rep. Randy Hultgren (R-Ill.) said credit unions are among the industries he counts as being disproportionally affected by Dodd-Frank, but that the parts relating to them can be fixed.
WASHINGTON (7/23/14)--The Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and 15 states have announced sweeping actions against foreclosure relief scammers that they say used deception to prey on struggling homeowners who were facing foreclosures.
In an announcement Wednesday, the CFPB said it was filing lawsuits against three such companies that collected "more than $25 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages." The FTC said it was filing six other lawsuits. And, a joint release said, the states are taking 32 actions.
"We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure," said CFPB Director Richard Cordray. "These companies pocketed illegal fees--taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible."
The CFPB is seeking compensation for victims, civil fines and injunctions against the scammers.
In conjunction with its announcement of legal action, the CFPB also released an advisory to help consumers recognize the red flags of foreclosure relief scams, especially when someone is claiming to provide legal help.
Use the resource links to access the advisory and to read more on the agencies' and states' actions.
WASHINGTON (7/24/14)--Threats seem to be contained to banks in Austria, Japan, Sweden and Switzerland so far, but researchers at the computer security company Trend Micro report that there is a sophisticated, multistage attack by cybercriminals that can get around two-factor authentication systems.
Two-factor authentication requires a user to enter a regular password and then a second, one-time password that has been emailed or texted to that user for that transaction. The intent of the second step is to make it harder to hack an account than stealing an online password.
Trend Micro found that hackers were able to bypass the two-factor systems at the European and Japanese banks through an attack that is launched by a phishing email that pretends to be from some popular retailer. The email offers bogus receipts that, if clicked, expose the user to malicious software. Then, when that consumer later tries to reach a real bank website, the software redirects the person to a site that is managed by the criminals (
The New York Times
Researchers at Trend Micro have given the new attack on online banking the name "Emmental." Like the Swiss cheese, they said, online banking protections may be "full of holes."
ALEXANDRIA, Va. (7/24/14)--The National Credit Union Administration is planning to unveil three regulatory relief proposals in upcoming open board meetings. They will include plans to eliminate the 5% cap on a credit union's fixed assets, to modernize the member business lending (MBL) rule, and to update appraisal provisions, NCUA Chair Debbie Matz said Wednesday.
In fact, Matz said one day before the agency is expected to release its July meeting agenda, the fixed-asset plan will be on the July 31 agenda. The proposal is intended to streamline the rules that implement the Federal Credit Union Act provisions governing the process for federal credit unions to occupy land or buildings.
"Our intent is to allow federal credit unions to manage their own fixed-asset purchases without having to seek permission or waivers from NCUA," Matz said. "When federal credit unions want to update facilities, upgrade technology or make other purchases that have no impact on safety and soundness, NCUA should not micro-manage individual business decisions."
Also on the radar for this year: a look by the NCUA board to determine how it might give greater flexibility to credit unions offering MBLs.
"At my Listening Sessions, we heard from credit union officials with innovative ideas to modernize the member business lending regulation in order to serve more small businesses," Matz said, adding, "We are working to incorporate new ideas while keeping in place appropriate safety and soundness measures."
She said look for changes to be proposed later this year.
The NCUA supports legislation that would increase the MBL cap. The Credit Union National Association maintains that there also are steps the regulator could take to aid credit unions approaching the MBL cap of 12.25% of assets.
The agency is planning to review all aspects of the rule, including the waiver process--the federal rules that exempt certain loans from the MBL cap.
CUNA has supported these changes and urged they be addressed. Among other changes CUNA advocates: Updating Federal Credit Union Act definitions that provide exemptions from the MBL cap for credit unions that have a history of primarily making MBLs to their members; expanding provisions addressing MBL loans made for the financing of one- to four-family dwellings; and removing limitations that are not required by the statute.
Matz also said the NCUA is scheduled to update the advertising rule for federal credit unions. She added that staff is studying the latest innovations in technology, including social media, to incorporate into the new proposal.
"CUNA welcomes these changes," said Deputy General Counsel Mary Dunn Wednesday. "We have repeatedly urged the NCUA to do more to lessen the regulatory burden on all credit unions.
"We have specifically raised these and many other issues with Chairman Matz and others at the agency, and we look forward to learning more details on NCUA's efforts concerning regulatory relief for credit unions."
Matz made her remarks at the National Association of Federal Credit Unions' annual conference currently being held in Las Vegas.
Daily Financial Rates -- 2014-07-24
Thursday, July 24, 2014
03:55 AM CDT
TREASURY YIELD CURVE
(based on the $1 million market)
Results of the July 21, 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||0.050||0.070||0.060||0.070||0.070|
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.
WASHINGTON (7/24/14)--After a sharp drop earlier in the month, mortgage application activity has gained back some ground, as the composite index in the Mortgage Bankers Association's weekly survey gained 2.4% during the week that ended July 18 (
The rebound was driven in large part by refinance activity, which jumped 4.1% for the week, while purchase activity inched up 0.3%, redirecting a 7.6% stumble during the prior week.
Despite the modest gains, however, mortgage application activity has much work to do, as the four-week moving average for purchases has declined 3% and refinances have fallen 3.6%.
Further, refinancing activity sits 45% lower than levels seen at this time last year, while purchase activity is down 14.6% year-over-year.
"Despite last week's uptick, mortgage application activity remains quite subdued," said Gregory Bird, Moody's analyst (
), who added that because mortgage rates have been held down for so long, many consumers likely already have refinanced, "meaning the potential pool for further activity is probably small."
The contract rate for 30-year fixed-rate mortgages remained at 4.33% for the week; the 30-year fixed rate for jumbo mortgages dropped by 2 basis points; and the rate for five-year adjustable-rate mortgages climbed 4 basis points.
While purchase mortgage activity still hovers near a cyclical low, existing-home sales did tick up, according to numbers released Tuesday by the National Association of Realtors, which reported a 2.6% increase in sales in June.
But the slack in the market may be being picked up by those able to pay cash for homes, as now one-third of all home sales are paid for in cash.
"All-cash transactions ... are providing the impetus for overall sales activity to head higher, while first-time buyers remain on the sidelines for the most part," Bird said.
PLATTSBURGH, N.Y. (7/24/14)--Shred events--during which local businesses volunteer to run confidential documents through a shredder for the general public--don't capture many headlines. But the Plattsburgh, N.Y.,
dedicated resources and editorial space in its July 22 edition to emphasize the "good deed" Dannemora FCU offered its local community in sponsoring its seventh annual Shred Fest.
"If you don't understand how valuable this service is, think back to the many cases that have been talked or written about in which identities and crucial personal information have been pirated, so unscrupulous people could cash in on it: numbers on bank accounts or credit cards, for instance," the
reminded its readers.
"Once secured by dishonest people, those numbers could be exploited for large sums of money, loss of reputation, illegal documents or other outcomes bound to do damage. Shredding is now a way of life for the savvy," it continued.
And, the paper reminded readers, the occasion "did double duty as a public benefit." The $141 million-asset, Plattsburgh, N.Y.-based credit union asked "shredders" to bring nonperishable food items for Plattsburgh Interfaith Food Shelf.
The paper noted that Ticonderoga (N.Y.) FCU, with $91 million in assets, recently held its first Shred Fest, which produced more than 5,600 pounds of shredded paper and brought in more than $440 in food to be split among three area food pantries.
"The credit unions have provided a service that is truly important in this era of identity theft, and the number of people who showed up at the Plattsburgh event last Saturday prove how much the service is valued," the editorial concluded. "An institution that derives its name from the credit it distributes has earned a little for itself."
TALLAHASSEE, Fla. (7/24/14)--It's summer camp for kids, with a twist.
|The Pink Team at the Mini Billionaire's Academy captured all five flags, each one tied to their credit score, allowing them to get "approved" for a loan. (Tallahassee-Leon FCU Photo)
Is there capture the flag? Yes, but a captured flag improves your credit. Are there egg-carrying relay races? Of course, but the faster you run, the faster you invest in the stock market, which can be a risky play.
These were the types of games, and financial lessons, played and learned by the nearly 50 kids who attended this year's Mini Billionaire's Academy, a five-day overnight camp hosted by Tallahassee-Leon FCU, Tallahassee, Fla., with $43 million in assets.
The academy, geared towards kids ages 8 to 16, educates participants on personal financial management using entertaining and engaging games. In its third year, this year's academy was the largest class yet.
"Students are graduating high school, and even college, with almost no formal training on personal money management and we are proud to be able to fill that gap in our community," said Lisa Brown, Tallahassee-Leon president/CEO.
The camp, which started as a one-day event in a community center, has become so popular that it has been moved to the expansive Wallwood Boy Scout Reservation in Gadsden County where campers can canoe, bike, go zip-lining and more, Mike Akers, Tallahassee-Leon vice president of sales and services, told
"My favorite quote from parents is they wish they had something like this when they were a kid," Akers said.
|Florida State Rep. Alan Williams (D-Tallahassee) stops by to speak to the campers about the importance of responsible money management. (Tallahassee-Leon FCU Photo)
Other activities included a s'mores store competition that challenged campers to run their own businesses; campfire skits about budgeting; and a reality fair where campers were assigned careers and had to make financial decisions based on their unique financial situations.
A grant from "Biz Kid$," an award-winning
TV program supported by the National Credit Union Foundation that teaches kids about fiscal responsibility, helped Tallahassee-Leon put on the camp this year. Many campers received partial or full scholarships to attend as well.
"It's so rewarding to see how responsible the campers are by the end of the program," Brown said. "A little bit of fun will equip them for the rest of their lives."
MADISON, Wis. (7/24/14)--With nine recent program completions, the Credit Union National Association now counts 2,175 credit union professionals as certified credit union financial counselors (CCUFC).
CCUFC-designated professionals help counsel members through current and future financial situations.
"The training provides great skills whether you are a loan officer or a counselor," said new designee Jamie Fatheree, American Airlines FCU, Fort Worth, Texas, with $5.6 billion in assets. "Even if you have been counseling for a while, you learn things you didn't know or hadn't thought of before. The program gave me a network of other counselors to bounce ideas off of and share what works."
Fatheree received her designation for completing the second part of the program at CUNA's Certified Financial Counselor School in June.
Other CCUFC designees are:
- Ariane Aughenbaugh, Franklin-Oil Region CU, Oil City, Pa., with $35 million in assets;
- Janine Bethel, Grand Bahama Co-op Credit Union Ltd., Freeport, Bahamas;
- Michelle Bryant, Blue Eagle CU, Roanoke, Va., with $126 million in assets;
- Kimberly Gaines, Pelican State CU, Baton Rouge, La., with $234 million in assets;
- Sandra Gladney, American Airlines FCU;
- Crystal Jepsen, North Star Community CU, Cherokee, Iowa, with $79 million in assets;
- Heather Smith, Credit Union One, North Jackson, Ohio, with $10 million in assets; and
- Cheryl Welles, Empower FCU, Syracuse, N.Y., with $1.2 billion in assets.
In addition to the on-site school, the CCUFC designation can also be earned by successfully completing parts one and two through the CUNA Certified Financial Counselor eSchool or CUNA Financial Counseling Certification Program.
LANSING, Mich. (7/24/14)--For the third year, CU Lunch Local aims to put thousands of dollars back into the pockets of Main Street businesses with its nationwide cash mob program that also promotes the credit union difference.
CU Lunch Local, set for Oct. 14 during International Credit Union Week, originated two years ago with Michigan credit unions and Michigan Business Connection. Credit unions commit to buying local, infusing cash into their communities and raising credit union awareness.
This year's goal is to expand even further beyond the borders of Michigan. Participating credit unions can promote their activities on the CU Lunch Local Facebook page, and the #culunchlocal hashtag will help spread the word in social media.
In the past, credit unions have comped cups of coffee, purchased supplies from local businesses or partnered with locally owned restaurants to offer discounts to credit union members.
Credit unions interested in participating can use the CU Lunch Local Facebook page or contact Jessica Richardson-Isenegger at
STEVENS POINT, Wis. (7/24/14)--Royal CU, Eau Claire, Wis., with $1.4 billion in assets, is the recipient of the 2013 Platinum Million Dollar Lender Award by U.S. Department of Agriculture Rural Development State Director Stan Gruszynski.
The annual award is presented to lenders that have partnered with and made significant contributions to supporting rural residents in Wisconsin who are looking to become homeowners through the USDA Guaranteed Rural Housing (GRH) program.
"As a result of the Guaranteed Rural Housing program, we have been able to help many more members accomplish the dream of homeownership," said Matt Gerber, Royal CU vice president of mortgage loan sales. "This particular program is one of the only remaining no-down-payment programs offered in the industry."
In 2013, Royal leveraged more than $5 million of GRH program funds to help finance home purchases for families of moderate income in Wisconsin. Nearly 4,000 families across the Badger State bought homes last year thanks to the GRH loan program.
Loans secured through the program are financed by participating lenders and guaranteed by USDA Rural Development. The loan amount is limited to the applicant's ability to pay off the mortgage.
Eligible areas include rural regions or communities under 20,000 in population.
The past few years have been challenging for homebuyers in rural areas of Wisconsin, Gruszynski said, adding: "Working with our lending partners across the state, we've made a difference to those rural families prepared to realize the responsibility and benefits of owning a home."
MADISON, Wis. (7/24/14)--Goodwill Industries International apparently is the latest retailer to have fallen victim to a data breach, and with this news, it's likely no surprise that a third of global consumers don't trust retailers to protect their personal and financial data.
The company learned last week that an investigation was under way regarding theft of payment card numbers at select U.S. store locations, Goodwill said on its website, but cybersecurity expert Brian Krebs reported that a fraud pattern has appeared in at least 21 states (
Add Goodwill to breaches at Target, Neiman Marcus, Sally Beauty Supply, Michaels and P.F. Chang's, and negative consumer sentiment toward retailers is not surprising.
ACI Worldwide and Aite Group recently released the second part of a study on financial fraud that found 58% of global consumers think financial institutions do a better job of protecting their data than retailers, restaurants, large chain stores, government agencies or law enforcement.
Meanwhile, the ubiquity of mobile devices is making them a target of malware. Last month, the Trojan-type malware Svpeng made its appearance in mobile banking applications. It checks for banking apps on a user's phone, then locks it down, in effect holding it hostage until the user coughs up money on a prepaid card.
Security experts at FireEye recently uncovered HijackRAT--a triple threat of banking credential theft, remote access takeover and the destruction of anti-virus applications on Android devices.
Mobile phone users tend to value convenience over security, giving credit unions an opportunity to educate them about good mobile financial habits such as not using public Wi-Fi to access banking accounts and using authorized apps only from the credit union or financial institution (
Regardless of where the fraud began, it's how it's handled that makes the most impression on consumers, ACI and Aite found. Twenty-three percent of respondents left their financial institutions because of how their fraud cases were handled.
BURNSVILLE, Minn. (7/24/14)--To gain the trust of the business communities they seek to serve, credit unions must build true partnerships with potential members. US FCU, Burnsville, Minn., with $970 million in assets, will take a big step toward doing that when it hosts a business open house and social media seminar Aug. 12.
The credit union has partnered with the local Better Business Bureau local social media consultant KS95/Hubbard Interactive and other local resources to provide small business owners and prospective small business owners with information and networking strategies for running their businesses.
One of those resources is Open to Business, a partnership among local cities and developers that provides one-on-one business counseling to current and prospective entrepreneurs and possible access to the Metropolitan Consortium of Community Developers small business loan fund.
"One of the things we see is that business owners are really good at what they know, and that's their actual business, but when it comes to the other side of running a business, like back office needs and handling money, that's not their strength," Reyna Staats, US FCU senior business development specialist, told
. "This is a way for us to show how we can help them out and what resources they have available to them."
The open house is also a way for the credit union to spread the word about its services, Staats said. "A lot of people still don't know that credit unions have business accounts and have business loans," she said. "We want to the community to know that US FCU can serve your business needs as well."
Actually, US FCU views itself as more than a provider of business services, Staatz told
. "Half my job is to educate, and find what truly is the best fit financially for the businesses we serve. Education is very important to everything we do for both our personal and business account members."
NEW YORK (7/22/2014)--College is just around the corner for newly graduated high school seniors, which means the first tuition bills will appear at any moment.
To help guide families who are using 529 plans to pay for tuition, the College Savings Plans Network (CSPN) offers these guidelines (July 10):
Start early. Find out from your plan how long the funds transfer will take, whether the plan will send a check to you or directly to the college, and if there's anything else you should know as you start withdrawing funds. Once your beneficiary decides on a school, the earlier you start the process, the better.
Know before you go. Tuition due dates vary--some are not until after the course add/drop period, some are before the semester starts. Check with your school to find out its due date for tuition payment, and make sure you start withdrawing your funds well in advance.
Do your homework. Make sure to check with your plan to find out what it defines as qualified higher education expenses. This generally includes tuition and fees, room and board, and the cost of books, supplies, and equipment required for enrollment or attendance. If you are unsure if any specific item qualifies, ask your plan administrators.
Keep a record. For tax purposes, keep records and documentation of higher education expenses for any withdrawal you intend to treat as qualified.
Be prepared. Make sure your distributions do not exceed your higher education costs. If the distribution does not exceed the amount of the student's qualifying expenses, you do not have to report it as income on your tax return. But if the distribution exceeds those expenses, you must report the earnings on the excess as "other income" on your tax return.
For related information, read "Money 101: School Your College-Bound Child" and "The College Affordability and Transparency Website: Tools to Make Informed Choices" in the Home & Family Finance Resource Center
MADISON, Wis. (7/24/14)--CUNA Mutual Group announced Wednesday it will launch a health insurance program through a partnership with GoHealth, a private health insurance marketplace.
Through the TruStage health insurance program credit unions will be able to offer their members health insurance from a variety of health plans. GoHealth provides consumers access to all of the plans available on healthcare.gov as well as other carriers.
Using GoHealth's Web-based platform, members will be able to compare health insurance plans, get quotes and estimate available federal tax subsidies--applying them directly to their health plan to receive lower monthly premiums. They can also shop over the phone with the guidance of licensed insurance advisers and apply for coverage.
"As the leading cause of bankruptcy in the U.S., medical bills continue to be a significant stress on many families' finances," said Corrin Maier, director of the MemberCONNECT program at TruStage. "There's also confusion about the changes brought on by the Affordable Care Act. Credit unions are in a unique position to respond--they can help members understand the requirements, give them access to affordable health insurance options and help them protect what matters most."
To date, Chicago-based GoHealth has helped more than 30 million consumers shop for coverage online with its private health insurance marketplace.
During the next open enrollment period beginning in November, an estimated 8 million credit union members will seek health insurance coverage through an exchange.
TruStage currently protects more than 14.8 million credit union members with insurance products and programs for life, auto, homeowners, and accidental death and dismemberment. The addition of health insurance options advances the company's mission to build financial security for their families.
Credit unions enrolled in the MemberCONNECT program--the conduit for credit unions to make TruStage products available--will receive an invitation to a webinar to learn more about the TruStage health insurance program.