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December 19, 2014

CUNA hails president's signing of IOLTA

Washington
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. ReadMore

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CU tax status preservation, reg relief top 2014 CUNA legislative efforts

Washington
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 report 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." ReadMore

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PALs should be exempt from MLA proposal: NCUA's Matz

Washington
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 letter 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. ReadMore

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NCUA projects no assessment for NCUSIF in 2015

Washington
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.

The letter , 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. ReadMore

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N.Y. gov. signs historic FOM expansion bill

CU System
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. ReadMore

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Christmas-New Year's week busiest for car shopping: Edmunds.com

CU System
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 Edmunds.com --and a prime time for credit unions to make vehicle loans.
 
Dubbing the week "New Car, New Year," Edmunds.com 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, Edmunds.com 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.
 
Edmunds.com offers these tips for holiday car shoppers:
  • Save big with 2014 models. Edmunds.com 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;
  • Go mobile. Shoppers can use their smartphones to research and lock in pricing before arriving at the dealership. Edmunds.com 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.
ReadMore

Iowa's Jury elected treasurer for World Council exec committee

CU System
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."
  ReadMore

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CUs put the 'ho, ho, ho' in holiday greetings

CU System
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.
 
Click to view larger image The Credit Union Association of the Dakotas collected 2014 highlights from its staff in a holiday video .
From the Ohio Credit Union League comes a YouTube playlist 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 video 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 12 days 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 lip-synced rendition 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. ReadMore
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