WASHINGTON (12/5/13, UPDATED: 1:35 P.M. ET)--The U.S. House today approved The Innovation Act of 2013 (H.R. 3309) by a 325 to 91 vote. The bill, which will now move on to the Senate, included a Credit Union National Association-supported amendment.
H.R. 3309, which was introduced by Rep. Bob Goodlatte (R-Va.) in late October, would remove some of the financial incentives sought by firms that assert low-quality patents in the hope of quick settlements.
So-called "patent trolls" continue to use low-quality patents to try to extract settlements from credit unions and others. Credit unions have been sued for the use of certain ATM technologies, check imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones.
The amendment supported by CUNA would require patent trolls to identify the ultimate parent entity in claim letters filed as part of their patent litigation.
CUNA and coalition partners on Wednesday supported H.R. 3309 in a letter sent to all House members. The bill, they wrote, "takes a positive step" toward addressing the exponentially growing threat of "patent trolls" that assert patents of dubious quality against legitimate businesses, including banks and credit unions. (See Dec. 5 News Now
story: CUNA to House Leaders: Patent Bill Goes in 'Right Direction'.)
WASHINGTON (12/5/13)--"The crisis of creeping complexity with respect to regulatory burden is very real" for credit unions and other community-based financial institutions, Rose Bartolomucci, president/CEO of Towpath CU, a state-chartered, privately insured credit union in Akron, Ohio, said in Wednesday testimony before members of the House Financial Services subcommittee on financial institutions and consumer credit.
Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan, right, and Rose Bartolomucci, president/CEO of Towpath CU, Akron, Ohio, speak with Rep. David Scott (D-Ga.) during Wednesday's hearing. Several subcommittee members on Wednesday said they saw the need for greater regulatory relief for small institutions, including Rep. Mel Watt (D-N.C.), who is himself a nominee to lead the Federal Housing Finance Agency. (CUNA Photo)
Bartolomucci testified on behalf of the Credit Union National Association and her credit union at a hearing entitled "Examining Regulatory Relief Proposals for Community Financial Institutions." The hearing focused on three bills: A bill to require the National Credit Union Administration and other federal financial regulators to assess and address regulatory duplication or inconsistency; legislation that would allow privately insured credit unions to join a Federal Home Loan Bank (FHLB); and a bill that would adjust the Consumer Financial Protection Bureau's rural designation to align with the definition used by the U.S. Department of Agriculture.
"Small credit unions are expected to comply as quickly and efficiently as large financial institutions with hoards of compliance officers. While the elimination of one duplicative rule or regulation may not seem like much, to a compliance officer in a credit union, it is. Without one more rule to comply with that employee can now spend time with a credit union member, helping to serve their financial needs," Bartolomucci said in written testimony.
Responding to committee questions later in the hearing, she noted that regulatory compliance issues have hampered her credit unions' attempts to serve its 21,000 members, Bartolomucci, who is also a former Ohio state credit union regulator, told legislators her credit union has 47 employees, with one full time compliance officer and a shared compliance officer that also works with two other credit unions. The cost of compliance can make it more difficult for her credit union to offer new products to members, she said. Compliance costs and regulatory burdens "will take the lives of some of our credit unions," she noted. Some credit unions cannot afford the cost of compliance, and thus seek out strategic mergers, she added.
Allowing privately insured credit unions to join FHLB would not put taxpayers at risk, Bartolomucci said. FHLB members have to fully collateralize their advances, and "how you are insured does not come into play," she added.
Legislators at the hearing agreed there is bipartisan desire to address regulatory issues faced by credit unions and other small financial institutions, with ranking subcommittee member Gregory Meeks (D-N.Y.) noting that small financial institutions are facing severe regulatory problems.
One subcommittee member, Rep. Ruben Hinojosa (D-Texas), said it is important to listen to credit unions and other small institutions, because their communities rely on them for access to credit. Smart regulatory relief is an area that is ripe for bipartisan collaboration, he added.
Another subcommittee member, Maxine Waters (D-Calif.), noted the strong support that credit unions enjoy from members of both parties.
Shelley Moore Capito (R-W. Va.), who chairs the subcommittee, noted that reducing regulation does not mean getting rid of all regulation. Moore Capito said she is trying to help create smarter, more forward thinking regulations.
Rep. Sean Duffy (R-Wisc.) said the Wednesday hearing was a good example of members of both parties working together early to get bipartisan bills moving in the right direction. He also said he hopes that credit unions and community banks will be able to focus less on regulators and more on making loans.
For CUNA's prepared hearing testimony, use the resource link.
MERIDEN, Conn. (12/5/13)--U.S. Rep. John Larson (D-Conn.) stressed that "vigilance is eternal" in credit unions' campaign to maintain their tax status, during an interview with the Kelly Fuhlbrigge, Credit Union League of Connecticut vice president of government relations.
Credit unions must maintain close contact with their legislators during the tax reform process, Larson said in his interview with the league.
Larson's words urging credit unions to remain vigilant in their tax status advocacy took on particular poignancy Wednesday when House Ways and Means Chairman Dave Camp (R-Mich.), a key player in the nation's tax-policy discussions, told reporters that he will hold off unveiling tax reform legislation until February or March of 2014. Camp has spent much of this year saying tax reform legislation, to reduce individual and corporate tax rates while eliminating some tax expenditures and broadening the tax base, would be ready before this year's end.
Congress is running out of time and Camp has no plans to introduce the tax bill this year, he told reporters after a political luncheon (Bloomberg Government Dec. 4).
The Credit Union National Association has advised credit unions that political advocacy, on issues like tax status, is a "long game." Advocates, CUNA says, have to be disciplined, have to work methodically to generate "support on the ground," and have to be in it for the long haul.
Connecticut's Larson, in his interview with the league, also said, "It's always wise to notify your legislator and making sure you are bringing them up to date, particularly of the great value that credit unions bring." Larson told Fuhlbrigge, "As a credit union member myself, I can speak of first hand of the value that credit unions bring especially during difficult times, and the unique nature of the charter agreement."
Particularly important is educating new legislators who may not be familiar with credit union ideals, structure and tradition of service excellence, Larson said.
He stressed the importance of maintaining a public forum for discussions before any legislation is voted out of committee.
"That maximizes the opportunity for constituents to have voices heard on all levels, particularly if you are a credit union member or are invested in the goals of credit unions," Larson said.
Use the resource link to access the video.
WASHINGTON (12/5/13)--The U.S. Congress must delay the private right of action associated with recently finalized Consumer Financial Protection Bureau mortgage rules, a move that would grant credit unions and their vendors a full year to come into compliance with pending mortgage regulations, the Credit Union National Association said in a Wednesday letter to U.S. House and Senate leaders.
Six CFPB mortgage product and service rules are set to go into effect in January 2014. The rules include the bureau's Ability-to-Repay and Qualified Mortgage standards.
CFPB Director Richard Cordray has said bureau examiners would provide some leeway to credit unions and other institutions that are making good faith efforts to comply with these regulations, but have not fully complied when the January deadline arrives. The CFPB director said he could not give an official cutoff date for when this leeway would end, but said the leeway would be granted for several months.
"Nevertheless," CUNA President/CEO Bill Cheney wrote, "the laws under which these rules have been promulgated carry a private right of action that only Congress can delay." The letter was sent to Senate Banking Committee Chairman Tim Johnson (D-S.D.), ranking committee Republican Sen. Mike Crapo (Idaho), House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and ranking committee Democrat Maxine Waters (D-Calif.).
"Without this delay, this means attorneys may be able to sue credit unions for any violations no matter how minor," Cheney added. Credit unions that are working with their vendors to comply with the new rules could be sued for noncompliance, and this litigation threat has many credit unions considering whether to suspend mortgage lending either entirely, or limit the offerings of certain mortgage loan products until they are certain that they are in compliance, he said.
"We hope Congress would agree that having small lenders exit mortgage lending, even temporarily, during the fragile housing recovery we are experiencing would be bad for borrowers, communities and the economy," Cheney wrote.
For the full CUNA letter, use the resource link.
WASHINGTON (12/5/13)--The Innovation Act of 2013 (H.R. 3309) "takes a positive step" toward addressing the exponentially growing threat of Patent Assertion Entities, commonly referred to as "patent trolls," that assert patents of dubious quality against legitimate businesses, including banks and credit unions, the Credit Union National Association and coalition partners wrote in a Wednesday letter to members of the U.S. House.
The letter, which was cosigned by CUNA, the American Bankers Association and the Independent Community Bankers of America, was sent ahead of a scheduled Thursday vote on H.R. 3309.
That bill would remove some of the financial incentives sought by firms that assert low-quality patents in the hope of quick settlements. Credit unions have been sued for the use of certain ATM technologies, check imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones, among other examples of this form of abuse.
CUNA said in the letter that it is encouraging that H.R. 3309's includes language that would grant the director of the Patent and Trademark Office (PTO) discretionary authority to waive the filing fee for the transitional proceeding for the review of Covered Business Method Patents program. "This provision would be beneficial for smaller financial institutions by helping deter patent trolls from sending abusive and extortive "demand" letters and ensuring that institutions of all sizes have access to the CBM program," the letter said.
However, some concerns with the bill still remain. The co-signors urged support for an amendment offered by Rep. Jared Polis (D-Colo.) that would require patent litigation claimants to provide additional disclosure information in any pre-suit notification.
The bill could also do more to ensure that credit unions and banks cannot be sued for patent infringement for simply purchasing new technology in good faith, off the shelf. Language in the bill requiring the PTO to conduct claims construction proceedings in a manner similar to the federal courts should also be removed, the letter added.
ST. LOUIS (12/5/13)--Missouri's state-chartered credit unions surpassed $11 billion in assets during the first half of the year--a milestone, according to the state's regulator.
The Missouri Division of Credit Unions said that, as of June 30, the 118 credit unions it regulates had $11.2 billion in assets, $9.7 billion in deposits and $6.5 billion in loans.
"The continued growth of assets reflects the vital role of Missouri's credit unions and their contribution to the strength of our state's economy and financial sector," said Ken Bonnot, division director (Missouri Difference
About 90% of credit unions in Missouri are state chartered, and 12 hold federal charters.
Just days ago, the National Credit Union Administration released its most recent credit union trend data, and the Credit Union National Association unveiled its monthly credit union estimates. Use the resource links to access those related stories.
DES MOINES, Iowa (12/5/13)--A Dec. 3 Des Moines Register article highlighted the national reputation of the Iowa Credit Union League and its president/CEO Patrick Jury.
Jury has led the league since 2006. Under his leadership, the league supports the state's 116 credit unions with services ranging from electronic transaction processing to serving the Hispanic market.
With more than $10 billion in deposits and $11.7 billion of assets at the end of the second quarter, Iowa credit unions are strong under Jury's leadership. Their share of the $84 billion now deposited at Iowa's financial institutions has increased to 12.4% from 8% under Jury's tenure as CEO.
One of Jury's significant achievements was the development of the league subsidiary Affiliate Management Co. Annual revenue at Affiliate Management Co. has doubled to more than $100 million the past five years, the Register reported. Jury's active leadership has built businesses that serve credit unions around the nation, Paul Gentile executive vice president of strategic communications for the Credit Union National Association, said in the Register article.
As a for-profit provider, Affiliate Management Co. was able to be more nimble to respond to market needs and insulate the league and its member credit unions--who tend to be risk averse--from any problems that might occur, the Register reported. Also, it provided enough capital to "seed" new ventures.
Diana Dkystra, president/CEO of the California/Nevada Credit Union Leagues, complimented Jury's ability to think outside of the box, describing him as "brilliant."
Jury joined the league as a lobbyist in 1989. He was promoted to chief operating officer in 1993 and has served as chief executive officer since 2006. He is also secretary of the executive committee of the World Council of Credit Unions. Jury is an at-large executive committee member of the CUNA board.
To read the full article, use the link provided.
SEATTLE (12/5/13)--Credit unions have another seat at the table of the Federal Home Loan Bank of Seattle.
The board announced the results of its 2013 board of director elections this week. Bob Teachworth, president/CEO, Denali Alaskan FCU, will represent Alaska for a four-year term beginning Jan. 1.
Teachworth, who leads a $519 million-asset credit union in Anchorage, joins another credit union professional--Benson Porter, president/CEO of BECU, a $11.5 billion-asset credit union in Tukwila, Wash.
In 2012, Porter became the first credit union representative on the board, which serves more than 300 financial institutions with liquidity funding. Porter represents the state of Washington and his term ends in 2016.
Teachworth assumes the seat currently held by Craig Dahl, president/CEO/director of Alaska Pacific Bancshares, Juneau, Alaska.
Every Federal Home Loan Bank has its own elected board of directors, representing areas such as banking, accounting, housing and community development. Directors serve four-year terms and may not serve more than three consecutive terms.
ALEXANDRIA, Va. (12/5/13)--Starting on Feb. 3, credit unions will be able to apply for their share of $481,000 in technical assistance grants, the National Credit Union Administration announced Wednesday.
Low-income designated credit unions can apply for up to $16,500 in funds to help cover the costs of:
A new Community Development Financial Institution (CDFI) certification;
New products; and
Applications will be accepted until Feb. 14.
"These grants will help America's low-income credit unions remain viable and respond to the evolving needs of their members," NCUA Chairman Debbie Matz said. "The funding to assist low-income credit unions in qualifying for a CDFI certification is a welcome addition to NCUA's long-standing grant program. CDFI-certified financial institutions have access to additional capital, which can help them create jobs and promote financial stability in some of our nation's most underserved communities," she said.
The U.S. Treasury's CDFI Fund helps locally based financial institutions--including credit unions--offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community.
Credit unions made 73 requests for a total of around $77 million in funds for the 2013 fiscal year CDFI Fund program. More than $21 million in CDFI Fund awards and grants were released to 35 low-income credit unions. Overall, 191 organizations were awarded a total of more than $172 million when fiscal 2013 CDFI Fund awards were announced in late September.
WASHINGTON (12/5/13)--The Federal Reserve Board met its Dec. 4 deadline for filing its reply to merchants' arguments against the agency's implementation of the Dodd-Frank-imposed debit interchange fee cap.
In November, the merchants argued that that the U.S. Court of Appeals for the District of Columbia Circuit should affirm an earlier court decision that struck down the Federal Reserve's debit card interchange fee cap and network non-exclusivity regulations.
The Fed response Wednesday makes arguments to counter those of the merchants' that say the Fed made errors in implementing the rule and therefore the rule should be scrapped and rewritten.
The Fed made a request that the court reverse the judgment of the district court and that the case be remanded with instructions to enter judgment in favor of the Fed and its rule.
Circuit Judges David Tatel, Harry Edwards, and Stephen Williams will hear oral arguments from the Fed and merchants at 9:30 a.m. (ET) on Jan. 17.
The ongoing debit interchange fee legal battle known as NACS, et al. v. Board of Governors of the Federal Reserve System.
WASHINGTON (12/5/13)--The national economy continued to expand at a modest to moderate pace from early October through mid-November, according to the Federal Reserve's Beige Book for October, released Wednesday.
Reports from seven of the 12 Federal Reserve Districts indicated the economy grew at a moderate pace. Four districts reported modest growth. One district, Boston, reported expanding economic activity.
Consumer spending increased at a modest to moderate pace in almost all districts, with retailers offering tempered optimism for the holiday season. Sales of new motor vehicles continued at a moderate to strong pace across most districts, while used-car sales were mixed. Reports on tourism varied, with some locations experiencing lower traffic due to the government shutdown.
Residential real estate activity improved across many districts, with moderate to strong growth in multifamily construction. Some slowing in single-family home sales was attributed to seasonal factors. Five districts reported historically low inventories of unsold homes. Activity in nonresidential real estate was stable or improved slightly across many districts.
In banking and finance, lower residential mortgage activity was reported in many districts. Some financial institutions attributed the decline in part to higher interest rates than earlier in the year. Several districts reported increased credit quality, as delinquencies have continued to decline and fewer problem loans have been reported. An increase in business-credit activity was seen in a number of districts.
In the Philadelphia, Richmond, Atlanta, Chicago, and San Francisco districts, some bankers eased lending standards in response to aggressive competition for quality loans," the book said. "Lending standards remained unchanged across loan categories in New York, Cleveland, St. Louis and Kansas City. Consumer borrowing weakened in a few districts, including New York, Richmond, and St. Louis. In Cleveland, Kansas City, and Dallas, demand for consumer loans was little changed, while it increased in Chicago."
A modest increase in hiring was reflected in the Philadelphia, Richmond, St. Louis, Minneapolis and Dallas districts, while hiring in the remaining districts was largely unchanged. Industries that reported moderate employment growth included construction, software and IT services, manufacturing, and healthcare.
To access the full report, use the link.