MADISON, Wis. (6/20/13)--Biz Kid$, a credit union-funded public television series that teaches kids about money management and entrepreneurship, has won a national Emmy Award, television's highest honor. The award for Outstanding Achievement in Single Camera Editing was presented Friday to Biz Kid$ in Los Angeles.
 

Jim Golingo, editor for BizKid$, holds the Emmy Award for Outstanding Achievement in Single Camera Editing at the 40th annual Daytime Entertainment Creative Arts Emmy Awards. (Photo provided by the National Credit Union Foundation)

This is the second Emmy Award for Biz Kid$. The show won an Emmy Award for Outstanding Achievement in Main Title and Graphic Design in 2009. It has been nominated for 13 Emmy Awards in the past five years.
 
Biz Kid$ has continually garnered attention in and outside of the credit union industry. The show has won the Environmental Media Award for Outstanding Children's Television Series, a Silver Telly Award for Outstanding Children's Financial Literacy Programming, and most recently the Parent's Choice Gold Award. In 2010, it also earned the credit union industry's most prestigious honor, the Herb Wegner Award for Outstanding Program.
 
The National Credit Union Foundation oversees fundraising, outreach and administrative responsibilities of Biz Kid$. During the past six years, more than 300 credit unions and affiliated organizations have raised more than $13.8 million that has supported the show's production, website and curriculum.
 
Every Biz Kid$ episode begins and ends with a narrator reminding viewers that: "Production funding for Biz Kid$ is provided by America's Credit Unions, where people are worth more than money."
 
The Emmy Awards recognize creative leadership for artistic, educational and technical achievements within the television industry. The Daytime Emmy Awards recognize outstanding achievement in all creative fields of daytime television production. The series also was nominated for Outstanding Achievement in Sound Mixing and Outstanding Achievement in Sound Editing.
 
For more information about Biz Kid$, use the link.

WASHINGTON (6/20/13)--The threat level of credit unions of tax reform--raised by the release June 13 of a "tax options" paper by the Senate Finance Committee--is explored in the latest episode of "Inside Exchange," the Credit Union National Association's video series of key legislative, regulatory and political topics.

In this episode, titled "Impact of tax reform on credit unions," Paul Gentile, CUNA executive vice president of communications, and Ryan Donovan, CUNA senior vice president of legislative affairs, discuss what the "tax options" paper means for credit unions, how that affects the threat level for credit unions, and the process going forward. They also discuss why now is the time for credit unions to become engaged in preserving and protecting the tax exemption.



CUNA created the "Inside Exchange" video series as a new way to directly communicate to member credit unions, and to provide detailed insights into what's happening in Washington, D.C., in the legislative, regulatory and political arenas.

For more on this new video, and previous videos featuring CUNA comments on credit union advocacy efforts, use the resource link.

The "Inside Exchange" videos can also be found by clicking on the "stay informed" section of the gray menu bar at the top of the cuna.org homepage and scrolling down to the "Inside Exchange" pane.

WASHINGTON (6/19/13)--Richard Cordray, who heads the Consumer Financial Protection Bureau, said in a letter to lawmakers Wednesday that his agency is "sensitive" to issues revolving around its proposed rule integrating mortgage disclosures required under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z).

The CFPB director was responding to recent letters from 82 members of Congress, 62 Republicans and 20 Democrats, who stated concerns with a provision in the proposal that would require that consumers receive final loan-cost disclosures at least three days before closing on the loan.  The provision is intended to give potential borrowers time to review the disclosure without pressure.

However, as pointed out by the lawmakers, as well as by the Credit Union National Association in a joint trade group letter, in a typical real estate transaction, changes frequently occur in the three days prior to closing that could increase a borrower's cost to close.

Additional flexibility is needed in the three-day requirement, concerned parties have said, or the CFPB's proposed rule could cause costly delays to closings, which could harm consumers by reducing their ability to make reasonable changes to their purchase, increasing their costs, putting at risk their mortgage rate lock and even the expiration of their purchase contract and earnest money deposit to the seller.

Cordray wrote that the bureau understands that things do sometimes change between the time of a three-day disclosure and the closing, and that not all changes justify delaying the closing date.

Cordray added that although the proposed rule specifies several exceptions that would not force an additional waiting period, the CFPB continues to review public comments to determine the "most appropriate way" to provide meaningful disclosures while avoiding unnecessary delays.

The final TILA/RESPA rule is expected out later this year, perhaps between September and December.

WASHINGTON (6/20/13)--Freddie Mac's decision to impose fees on mortgage sellers and servicers that do not meet minimum activity thresholds "could hamper the ability of credit unions to serve their members in the mortgage marketplace," Credit Union National Association President/CEO Bill Cheney wrote in a letter to Freddie Mac CEO Donald Layton.

The government-sponsored enterprise (GSE) on May 15 announced that effective Jan. 1, 2014, sellers and servicers that do not meet minimum activity thresholds for the prior calendar year will be assessed a fee of $7,500 for low activity. Sellers and servicers must sell loans with an aggregate unpaid principal balance of $5 million, or service or act as servicing agent for loans with an aggregate unpaid principal balance of $25 million in the prior calendar year to avoid the fees.

Cheney urged the GSE to eliminate the minimum activity threshold fee or to exempt credit unions from the fee.

"The basis for the fee is questionable as applied to credit unions," he explained. Fannie says the fee is meant to support risk management efforts and offset other costs. However, Cheney wrote, "credit unions have not generated widespread losses to Freddie Mac, and should not be asked to pay a fee ostensibly for 'risk management.'

"The losses which Freddie Mac has experienced in the past five years were not caused by credit unions, and credit unions should not be asked to bear the burden of others," he said.

The CUNA CEO wrote the fees would impact small institutions that can afford them the least, especially impacting credit unions in rural and underserved areas where annual real estate sales activity and housing prices are not high enough to generate the dollar figures that meet Freddie Mac's thresholds.

Overall, he said, the fees could "contribute to some credit unions leaving the mortgage business altogether, restricting access to credit to millions of Americans."

For the full letter, use the resource link.

Freddie Mac was the topic of another CUNA letter sent this week. In that letter, Cheney told Federal Housing Finance Agency Acting Director Ed DeMarco that his agency's decision to prohibit Fannie Mae and Freddie Mac from purchasing mortgages that do not meet the definition of qualified mortgages could prevent credit unions from working with their members to customize financial products that meet their individual needs. (For more, see June 19 News Now story:  CUNA Warns FHFA QM Proposal Could Harm Credit Access.)

ALEXANDRIA, Va. (6/19/13)--The financial turnaround of Arrowhead Central CU, a San Bernardino, Calif.-based credit union that the National Credit Union Administration put into conservatorship in 2010 and whose conservatorship ended in May, is both "surprising" and "inspiring," said NCUA Chairman Debbie Matz in the June NCUA Report.
 
Arrowhead is the first credit union to successfully emerge from federal conservatorship since 2007. On May 23, the credit union reported a net worth of more than 10.5% and membership of 116,000.

The credit union, established in 1949, served ethnically diverse residents of San Bernardino and the Inland Empire of California and had grown to $900 million in assets serving more than 100,000 members. "Much of the growth came in the last decade as Arrowhead expanded aggressively into side businesses and took on large indirect loans for recreational vehicles (RVs)," Matz wrote in her "Chairman's Corner" column.
 
However, by 2010, the credit union, with 25 branches became "grossly over-extended. The $154 million RV loan portfolio had collateral values of only half the outstanding loan balances, and borrowers were rapidly defaulting," Matz wrote.

Modified loans apparently masked true delinquencies and four side businesses dragged it further into the red while distracting management from providing efficient member service and managing credit risk, she added. "Net worth was down to 3% and falling fast. The credit union was on pace to lose nearly $4 million. It was in danger of going under."
 
NCUA conserved Arrowhead on June 25, 2010, despite criticism for acting unreasonably, Matz said. "From day one, we were dedicated to restoring sound operations and safeguarding members' hard-earned money," she added.
 
NCUA Region II Director Jane Walters, as agent for the conservatorship, contracted with credit union turnaround specialist Kay Woods as interim CEO. They sold or closed 14 branches, reduced staff by 242 in 2010, charged off $70 million in loans over two years, strengthened underwriting, wound down the four side businesses--"our only chance to save this credit union," Matz explained.
 
In June 2011, Arrowhead began its recovery by focusing on the core business, controlling costs and following the Net Worth Restoration Plan. After net worth topped 5%, NCUA offered the CEO position at Arrowhead to Darin Woinarowicz, then chief operations officer at Kern Schools FCU in Bakersfield, Calif.
 
Woinarowicz implemented a new Strategic Plan for Arrowhead in 2012-2013. The credit union's top goals included rebuilding relationships with select employee groups and rebranding Arrowhead as member service-oriented.
 
Meanwhile, NCUA worked with select employee groups and "recruited an Advisory Board of members who aspired to become Arrowhead's new Board of Directors and Supervisory Committee," Matz said. "The executive team organized a two-day 'credit union boot camp' for them and provided monthly training on their fiduciary duties. These 10 dedicated volunteers are now willing to lead Arrowhead into a new chapter in its history."
 
Matz attributed the success story to the "collaborative efforts of NCUA staff, the California Department of Financial Institutions, Arrowhead's interim and current management teams and staff, the new board, and members who never wavered in their support of the credit union."

MADISON, Wis. (6/20/13)--James Marshall joined The Cooperative Trust as its leader, the Trust and Filene Research Institute announced Thursday.
 
Marshall succeeds Brent Dixon, who founded the Trust in 2010 as Filene's young adult adviser. Theresa Hilinski will continue to serve as the Trust's community manager.
 
"We know that the young adults demographic is crucial to the future of credit unions," said Mark Meyer, Filene's CEO. "The Trust, brought to life with Brent's vision and CUNA Mutual Group's support, has been instrumental in connecting young adults to the credit union industry and the credit union industry to them."  
 
Marshall will work with Filene to sharpen the Trust's role in helping credit unions engage with young adults and grow membership among this demographic through outputs such as product ideas, crash events and publications that capture key findings of the group. He will also work to strengthen the Trust's foundation of developing young talent in credit unions and cooperatives through leadership opportunities, mentorships and peer-idea sharing.
 
"Building on the clear vision and momentum achieved by the Trust under Brent's direction, we want to evolve the trust into a self-sustaining organization with long-term value and viability," said Marshall. "We plan to do this by focusing on four key priorities: strengthening our online community; creating mentorship opportunities between young adults and veteran professionals; enabling product and service development around young adults; and hosting a limited number of crash events."
 
The Cooperative Trust stems from more than 10 years of Filene research examining young adult issues that credit unions and cooperatives face.
 
In 2010, while serving as Filene's young adult adviser, Dixon organized a group of 25 young credit union professionals called The Crash Network to crash the Credit Union National Association's Governmental Affairs Conference (GAC). With a three-year funding commitment from CUNA Mutual Group, The Crash Network became The Cooperative Trust in 2012.
 
The Trust celebrated its fourth Crash the GAC event earlier this year. CUNA's Center for Professional Development enables full access to the conference by providing full scholarships for every crasher. PSCU Financial Services also sponsors lodging for crashers and their Thunderpunch party.

MADISON, Wis., and WASHINGTON (6/20/13)--The Federal Reserve could begin tapering off its bond-purchasing program later this year, said Fed Chairman Ben Bernanke Wednesday after the Federal Open Market Committee (FOMC) meeting. That set off a flurry of bond buying after the meeting. But for now, the Fed's monetary policymakers are holding steady on any action and keeping their near-zero targeted federal funds interest rate.
 
"In a much anticipated FOMC statement and Bernanke press conference, the bond market sold off due to expectation that the Fed will begin tapering its asset purchase program later this year and end the program in the middle of 2014 when the unemployment rate falls to 7%," said Credit Union National Association Senior Economist Steve Rick.
 
"This will increase Treasury yields and reduce bond prices," he told News Now Wednesday. "In anticipation of this policy change, investors' demand for longer-term bonds has been declining, pushing up interest rates. After reaching a low of 1.66% on May 1, the 10-year Treasury interest rate rose over 0.5 percentage points in little over a month to reach 2.22% on June 10.  The 10-year Treasury interest rate rose 12 basis points in the hour and a half after the announcement, rising from 2.21% to 2.33%."
 
So where are long-term interest rates headed?  "We expect the 10-year Treasury interest rate to continue to rise to 2.4% by the end of 2013 and 2.7% by the end of 2014 as real interest rates rise faster than expected inflation falls," Rick said. "This will steepen the yield curve and therefore reduce the margin compression financial institutions have been experiencing over the last several years."
 
However, "on the downside, the mortgage refinance boom credit unions have experienced over the last two years will come to an end," Rick said.  "This will reduce earnings as credit unions see less mortgage origination fees and less 'gains of sale of mortgage' income," he concluded.
 
The FOMC met Tuesday and today. Saying that "economic activity has been expanding at a moderate pace," the committee in its statement after the meeting indicated that the holding pattern on its quantitative easing policy--its $85 billion-a-month bond asset purchase plan and the targeted interest rate of 0% to 0.25%--would continue. In Bernanke's press conference, he indicated the Fed could begin to taper its bond purchases later this year, if its forecasts for inflation and unemployment are correct (MarketWatch June. 19).

Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated," said the committee's statement. "Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Partly reflecting transitory influences, inflation has been running below the committee's longer-run objective, but longer-term inflation expectations have remained stable."

The committee noted it "expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the committee judges consistent with its dual mandate" of fostering maximum employment and price stability. It  also "sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. The committee also anticipates that inflation over the medium term likely will run at or below its 2% objective," said the statement.

The committee "decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month" and it will maintain its existing policy of "reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative," said FOMC.

It will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability, said the FOMC.

"The committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives."

The FOMC also said its "highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens." It keptthe target range for the federal funds rate at 0% to 0.25% "and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the committee's 2% longer-run goal, and longer-term inflation expectations continue to be well anchored."

In determining how long to maintain a highly accommodative stance of monetary policy, the committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When it decides to begin to remove policy accommodation, it will take "a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%."

Voting for the  action were: Federal Reserve Chairman Ben S. Bernanke; Vice Chairman William C. Dudley;  Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen.
 
Voting against the policy action were James Bullard, who said the committee should signal more strongly its willingness to defend its inflation goal in light of recent low inflation readings, and Esther L. George, who was concerned the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.