WASHINGTON (3/13/14, UPDATED: 10:45 a.m. ET)--If confirmed, National Credit Union Administration board nominee J. Mark McWatters said he will "work diligently to ensure the continued integrity and safety and soundness of our nation's credit union system in an ever-evolving marketplace."
McWatters made his remarks at this morning's Senate Banking Committee nomination hearing that started at 10 a.m. (ET).
Committee Chairman Tim Johnson (D-S.D.) said McWatters will hit the ground running with an eagerness to learn more about credit unions. He called for all nominees at today's hearing to be confirmed quickly.
The NCUA nominee briefly previewed his approach to regulation in his opening statement, saying his focus as a regulator "will remain straightforward: Don't neglect the fundamentals of capital, liquidity, and transparency, and always remember that the greatest threat to a financial system may reside where you least expect it--hidden within plain view."
McWatters said he intends to work with NCUA board members, agency staff and external stakeholders "in an open and respectful manner, with the goal of finding a common ground and working cooperatively through any differences." This approach has worked for him in past positions, he said. McWatters has served on the TARP Congressional Oversight Panel, as counsel for Rep. Jeb Hensarling (R-Texas), and as dean for graduate programs at Southern Methodist University's School of Law.
If confirmed, McWatters would replace board member Michael Fryzel, whose term ended Aug. 2. Fryzel will continue to serve until McWatters is confirmed.
The committee is also reviewing the qualifications for Stanley Fischer, as a member and vice chairman of the Federal Reserve Board; Jerome Powell, as Federal Reserve Board governor; Lael Brainard, as a Fed governor; and Gustavo Aguilar, to be an assistant secretary for the U.S. Department of Housing and Urban Development.
The hearing is ongoing. Watch @NewsNowLiveWire
and News Now
for further coverage.
WASHINGTON (3/13/14)--As he pledged to 4,400 credit union advocates at the Credit Union National Association's 2014 Governmental Affairs Conference less than two weeks ago, Rep. Ed Royce (R-Calif.) is ready to introduce a bill to exempt loans for one- to four-unit non-occupied dwellings from the credit union member business lending cap.
CUNA expects the bill to be introduced today. Its primary co-sponsor is Rep. Jared Huffman (D-Calif.).
In a letter to his House colleagues Wednesday describing the bill and seeking support, Royce wrote: "When a bank makes a loan to finance the purchase of a small apartment building it is called a residential real estate loan. When a credit union makes the same loan it is call a business loan" and thereby falls under the low 12.25%-of-assets MBL cap.
Royce told House lawmakers that his common-sense credit union reform bill, called the "Credit Union Residential Loan Parity Act," would fix that disparity.
He added that, if enacted, the bill would allow credit unions to lend an estimated additional $11 billion to small businesses, freeing up "much needed private sector financing for commercial businesses and rental housing without costing taxpayers a dime."
The bill also authorizes the National Credit Union Administration to apply strict underwriting and servicing requirements for the loans.
Welcoming Royce's bill, CUNA Executive Vice President of Government Affairs John Magill said, "Credit unions can do so much more to help small business grow and add jobs to the economy--and this bill will go a long way toward doing that, by making available an additional $11 billion while maintaining stringent underwriting and serving requirements.
"Credit unions are grateful for the efforts of Reps. Royce and Huffman to move forward on this bill, which makes sense for small business and the credit union members who own them."
CUNA and the state credit union leagues also support legislation to increase the MBL limit to 27.5% of assets. CUNA estimates that credit unions could lend an additional $13 billion to small businesses and help them create over 146,000 new jobs in the first year after enactment of the increase, again at no cost to taxpayers.
WASHINGTON (3/13/14)--A national search for a new president/CEO of the Credit Union National Association will be launched immediately, the association's chairman said, to find a successor to Bill Cheney, who is returning to California in June to be president/CEO of SchoolsFirst FCU in Santa Ana.
CUNA Chairman Dennis Pierce said the search would consider candidates from both inside and outside of the credit union movement.
"We will be looking for leadership that can bring to bear the talents of the exceptional team that we have on board at CUNA now, and leverage the strengths of the three-tiered system of CUNA, the state credit union leagues, and credit unions to achieve our goals and strengthen the movement," Pierce said.
Pierce thanked Cheney for his service, and praised his accomplishments as president/CEO since 2010. Among them, the CUNA chairman said, were:
- Successfully protecting the credit union tax exemption, ensuring that the recent tax reform draft from the House Ways and Means Committee made no changes to the tax status of credit unions. Pierce pointed to the award-winning "Don't Tax My Credit Union Campaign," which Cheney launched, as a key reason for the "big win" for credit unions in the tax reform proposal. The campaign generated 1.3 million contacts with Congress from credit union supporters in less than nine months' time--a record for such efforts--urging lawmakers "don't tax my credit union."
- Establishing the first-ever shared, strategic vision for the credit union movement: "Americans choose credit unions as their best financial partner." The initiative is aimed at guiding, uniting and helping credit unions achieve a shared agenda of removing barriers, creating awareness and fostering service excellence, with the ultimate goals of increasing credit union membership and delivering to members more value.
- Developing an approach to communicate credit union concerns and interests to Congress with a "535-seat strategy," designed to reach every single member of Congress on behalf of credit unions.
"In addition, Bill and his team this year planned and executed the most successful CUNA Governmental Affairs Conference ever, which drew more than 4,400 credit union supporters to rally and then deliver the credit union message to Capitol Hill," Pierce said. The CUNA chairman also noted the association's continued financial health during Cheney's tenure, as well as its strengthened communications program as hallmarks of his leadership.
Cheney expressed his thanks to the movement for its support during his nearly four years of leading the national trade association.
"I take on this new role at SchoolsFirst knowing that, with the backing of the CUNA board, the state leagues, and CUNA staff, we have accomplished much. However, the work will continue without interruption.
"Protection of our tax exemption, pursuit of regulatory relief, enhancing the charter and working toward achievement of a shared strategic vision--among other key issues--must proceed, with guidance from our board, partnership with the leagues and efforts of our talented, professional staff," Cheney said.
Pierce noted that Cheney will take a consulting role in the leadership search for the association during his remaining tenure at CUNA.
Current SchoolsFirst FCU president/CEO, Rudy Hanley, announced earlier this year that he would retire from the credit union after 31 years of service. Although he was originally scheduled to retire in March, Hanley has said he will stay on at the $9.7 billion-asset credit union until Cheney comes aboard.
WASHINGTON (3/13/14)--The Credit Union National Association has identified key areas it will scrutinize in an anticipated housing finance reform bill announced yesterday and expected to be unveiled this week or early next week.
An agreement to move ahead with the bill, which has bipartisan support in the Senate and a strongly positive reaction from stakeholders, was announced Tuesday by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and the committee's top Republican member, Sen. Mike Crapo (Idaho).
CUNA Senior Vice President of Legislative Affairs Ryan Donovan said CUNA is keen to analyze such areas as:
- Whether there are provisions in place to assure a smooth transition from the current system based on government sponsorship to a private-market approach;
- Whether there is an appropriate government guarantee, paid for by borrowers, that would assure the continued availability of essential 30-year, fixed-rate mortgage; and,
- Whether the secondary market must be open to all lenders on an equitable basis.
CUNA also will be scrutinizing whether the proposed underwriting standards and private capital requirements are not so strict as to exclude qualified borrowers from access to mortgage credit.
The bill is expected to wind down government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and replace them with a new mortgage guarantor, the Federal Mortgage Insurance Corporation (FMIC).
The winding down of Fannie and Freddie, and the Federal Housing Finance Agency, would be accomplished within five years of the bill's potential passage. GSE assets would be sold off, and their charters would be revoked once the FMIC is established.
"As CUNA stated when the senators announced their accord yesterday, we look forward to reviewing the legislative text when it is made available and we are hopeful this will be a bill that credit unions can strongly support," Donovan said Wednesday.
He added that with the broad early support surrounding this recent announcement about GSE reform parties can be hopeful that good public policy will be the result.
"Credit unions and banks--primarily smaller banks--are on the same page on this. When that happens--even on a complicated issue like this--good public policy tends to be produced," he said.
WASHINGTON (3/13/14)--Allowing privately insured credit unions to apply for Federal Home Loan Bank system membership "will provide a valuable source of liquidity and enhance their lending operations to the benefit of the members and the communities in which they reside," the Credit Union National Association stressed in a letter sent Wednesday to key lawmakers.
The CUNA letter was submitted prior to a scheduled markup today of Rep. Steve Stivers' (R-Ohio) bill, H.R. 3584. The bill is expected to be considered by the House Financial Services Committee, and the letters were sent to the committee chairman, Rep. Jeb Hensarling (R-Texas), and its ranking Democrat, Rep. Maxine Waters (D-Calif.).
The bill would create no additional risk of loss to any FHLB or to taxpayers, CUNA President/CEO Bill Cheney assured in his letter.
Although the National Credit Union Administration historically has raised concerns with private share insurance, CUNA's letter suggested tweaks to the Stivers bill that should address the agency's concern.
CUNA suggested modifying the underlying bill to clarify that the "NCUA has no legal authority, no regulatory power and no supervisory jurisdiction over either privately insured credit unions or commercial insurance companies."
Privately insured credit unions would not be the first type of non-federally insured institution to be eligible for FHLB System membership, Cheney reminded. "Under current law, insurance companies, which are not federally insured, may join the FHLB System. And, in fact, insurance companies borrow more from the FHLB System than all credit unions," Cheney said.
In a separate letter, CUNA also joined with the state credit union leagues of states most affected by the bill to show support.
CUNA cosigned a letter with the California & Nevada Credit Union Leagues, the Cornerstone Credit Union League, the Idaho Credit Union League, the Illinois Credit Union League, the Indiana Credit Union League, the League of Southeastern Credit Unions & Affiliates and the Maryland & D.C. Credit Union Association.
Stivers' bill addresses one of the more than 30 regulatory relief proposals CUNA submitted to the committee at a hearing last year. A vote on the bill could be held as soon as Friday morning. Federally insured credit unions already have the ability to apply for FHLB system membership.
For both letters, use the resource links.
WASHINGTON (3/13/14)--The rural county designations determined by regulators can impact the types of products credit unions may offer their members in those areas, and the Credit Union National Association this week welcomed consideration of a bill that would alter the Consumer Financial Protection Bureau's approach to this definition.
In a letter sent to House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Rep. Maxine Waters (D-Calif.), the committee's ranking Democrat, CUNA thanked the committee for its planned consideration of H.R. 2672 today. That bill would direct the CFPB to establish an application process determining whether a county should be designated as a rural area if the CFPB has not designated it as one.
The CFPB currently uses the U.S. Department of Agriculture Economic Research Services' urban influence codes to define a "rural" area. While the bureau is scheduled to reexamine the definition of "rural" over the next two years, CUNA welcomed Rep. Andy Barr's (R-Ky.) bill "because it would allow a person who lives in or does business in a state, to apply to the CFPB to have designated the county in which the business is located as a rural area for purposes of a federal consumer financial law."
The CUNA letter cited two examples of how rural area definitions impact credit union business practices:
- Escrow requirements under the Truth in Lending Act require certain lenders to create an escrow account for at least five years for higher-priced mortgage loans. If those loans are made by small lenders that operate predominately in rural or underserved counties, they are exempt from this requirement; and
- Ability to Repay and Qualified Mortgage (QM) Standards which generally exclude mortgage loans with balloon payments from the QM standard, but allow small lenders that operate predominately in rural areas to originate balloon payment QMs.
It is expected that an amendment may be offered during today's markup session that would allow part of a county to be given a "rural" designation even if the whole county did not qualify.
The amendment is targeted to opponents of the Barr bill who think it does not go far enough to help people in rural areas get access to financial services.
For CUNA letters to Congress, use the resource link.
BOISE, Idaho (3/13/14)--The Idaho Credit Union League named longtime league employee and interim leader Kathy Thomson to the president/CEO position.
The appointment of Thomson, who had been interim president/CEO since the November departure of Chris Johnson, was official Feb. 12.
"I truly believe in the power of credit unions to change their members' lives," Thomson said, adding, "...and I believe Idaho credit unions need the Idaho Credit Union League to do that."
Credit unions need to be able to focus on serving their members while the league focuses on supporting credit unions, she said.
Quarterly U.S. Map Review
from the National Credit Union Administration showed Idaho led the nation in loan and membership growth, clocking in with 16.7% and 8.1% gains respectively. Idaho also was home to the largest increase in shares and deposits nationwide. (See March 6
State data shows where strongest growth occurred.)
Thomson has served the league in a number of capacities since joining the staff in 1973. She is a Credit Union Development Educator and holds designations as a Certified League Executive and Certified Credit Union Executive.
"Kathy is a capable, devoted and hard-working professional," said Shane Berger, league board chair and president/CEO of $178 million-asset Beehive FCU, Rexburg. "We have great confidence that she will lead our trade association to future success."
WASHINGTON (3/13/14)--The U.S. Senate confirmed Sarah Bloom Raskin to become deputy secretary to the U.S. Treasury Department, making her the second in command there and the highest-ranking woman ever in a Treasury post.
Bloom Raskin's nomination was confirmed by voice vote. Her exit from her current position on the Federal Reserve Board of Governors will make for three vacancies in the central bank's seven-member board.
Bloom Raskin has served at the Fed since 2010.
Today, the Senate Banking Committee is expected to consider the nomination of J. Mark McWatters to become a member of the National Credit Union Administration board, as well as Stanley Fischer, as a member and vice chairman of the Federal Reserve Board; Jerome Powell, as Federal Reserve Board governor; Lael Brainard, as a Fed governor; and Gustavo Aguilar, to be an assistant secretary for the U.S. Department of Housing and Urban Development.
ST. PAUL, Minn. (3/13/14)--More and more, school districts throughout the U.S. are emphasizing to their students the importance of personal financial literacy.
President Barack Obama's Council for Financial Capability of Young Americans, meanwhile, recently began work in encouraging young people to take stock in their financial futures as well
(News Now March 11).
What better way to teach personal finance, than to have students run a financial institution of their own?
Credit unions are on top of it.
At a Minnesota Council on Social Studies conference earlier this month, representatives of the Minnesota Credit Union Foundation spoke about the importance and success of five student-run, in-school credit unions that have been established over the past few years, a growing trend not just in Minnesota but nationwide.
|Student tellers at Poquessing Middle School, Feasterville-Trevose, Pa., will staff the school branch of Bucks First FCU two days per week during lunch. (Pennsylvania Credit Union Association photo)
For instance, Bucks First FCU, Bristol, Pa., and the Neshaminy School District partnered to open the first student-run credit union branch to be located in a Pennsylvania middle school (
Life is a Highway
Feb. 27). The branch at Poquessing Middle School, Feasterville-Trevose, is part of the "Project Flipside" youth financial literacy program from the $83 million-asset credit union.
"Minnesota credit unions large and small have a commitment to financial education, and no two credit unions' efforts are exactly alike," said Kristina Wright, MCUF executive director. "The dedication by our credit unions that have established these first five in-school branches is spectacular, and it's a concept that I hope to see more of in the coming years."
The in-school branches that opened in Minnesota worked with credit unions such as St. Paul (Minn.) FCU, $124 million in assets; Postal FCU, $6.9 million in assets; and Cook (Minn.) Area Credit Union, $28 million in assets.
With the help of teachers, most of the branches are run by students and for students, offering myriad educational opportunities in financial literacy.
Wright led a breakout session during the conference called "Educational Benefits of Student-Run Credit Unions."
|At the Minnesota Council on Social Studies conference, Tartan High School student Marc Buchmayer shared his experience of working at Postal CU's student-run branch in Oakdale, Minn. (Minnesota Credit Union Network photo)
There, she introduced the concept of student-run credit unions and provided resources and information on operational models, considerations and the many benefits of partnerships between schools and credit unions.
Participants also heard from educators who'd been directly involved in establishing student-run credit unions in the state, including Scott Pierce of Owatonna High School--the first to open a branch in Minnesota--and Craig Spreiter of Tartan High School, Oakdale.
"We felt that it would be a great tool to help students learn about financial literacy, and we could also incorporate it into classes," Pierce said. "The students that work at the credit union gain great experience, and the other students benefit as well through peer education and in dealing with other students."
FARMERS BRANCH, Texas (3/13/14)--Credit unions across Texas, Oklahoma and Arkansas witnessed growth in deposits, members, loans and assets in 2013, a Cornerstone Credit Union League year-end report found, potentially indicating good things to come in 2014.
"With an economic upturn in 2014, credit unions in the region are heading into a good growth year," said Rick Grady, Cornerstone's vice president of research (
Deposits in the region last year increased almost 6.1%, up to $82.6 billion. At banks, deposits grew 7.4% to $781.2 billion, according to Grady.
Memberships at credit unions grew by 370,000 individuals in 2013, hoisting up member numbers to 9.56 million throughout the region. That influx also ushered in more than $4.3 billion into deposit accounts.
Market share for credit unions, meanwhile, stayed relatively flat at 9.6% in 2013, Grady said. Credit unions operate 2,046 branches in the region with an average of $40.4 million in funds on deposits, while banks run 9,088 branches with average funds on deposit of $86 million. Out-of-state banks average $112.3 million in deposits per branch.
The disparity in market share also revealed itself in loan demands, with credit unions holding 9.6% and banks at 90.4%. Credit unions still increased loan demand 9.7%, up to $61.2 billion, in 2013.
Member assets in Cornerstone credit unions rose more than $5.1 billion last year, reaching $95.3 billion by year's end.
Despite modest job growth last year, credit union employment increased by 4.7%.
MADISON, Wis. (3/13/14)--Two additional speakers--Steve Farber and Simon Sinek--have been added to the lineup for the Credit Union National Association's 2014 America's Credit Union Conference, set for June 29-July 3 in San Francisco.
Perhaps best known for his first book, "The Radical Leap: A Personal Lesson in Extreme Leadership," Farber embraces extreme leadership as one would approach an extreme sport: "Learn to love the fear and exhilaration that naturally comes with the territory." He recently expanded and updated the book, releasing it as "The Radical Leap Re-Energized: Doing What You Love in the Service of People Who Love What You Do."
Farber is the president of Extreme Leadership Inc. and founder of The Extreme Leadership Institute, both of which are devoted to cultivating and developing extreme leaders in business and other arenas. His other two books are "Greater Than Yourself: The Ultimate Lesson of True Leadership" and "The Radical Edge: Stoke Your Business, Amp Your Life and Change the World."
Sinek's concept of "Why" is the second-most-watched TED talk videos. His books, "Leaders Eat Last: Why Some Teams Pull Together and Others Don't" and "Start with Why: How Great Leaders Inspire Everyone to Take Action," address inspirational leadership.
"I imagine a world where people wake up every day inspired to go to work and return home at the end of the day feeling fulfilled by the work they do, feeling that they have contributed to something greater than themselves," he says.
Farber and Sinek join Marcus Luttrell, former Navy SEAL and author of "Lone Survivor" and "Service: A Navy SEAL at War and True Stories of American Heroism."
"Their insights, leadership and inspiration are sure to motivate attendees to drive positive change for their credit unions," said CUNA President/CEO Bill Cheney.
CUNA also announced a Guess the Speaker contest for the fourth ACUC keynoter. Entrants who submit correct guesses by May 9 will be entered for one free registration for this year's conference.