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News Now: July 30, 2014

House panel members pledge to work for CU parity, also pass reg. relief bill

Washington
WASHINGTON (7/30/14)--The House Financial Services Committee examined a number of regulatory relief bills Tuesday, and of the three supported by the Credit Union National Association, one was passed and the other two will go to a recorded vote this morning. Several representatives from both parties also vowed to work toward credit union parity going forward.

The Credit Union National Association testified before the committee earlier this month in support of these bills, and submitted a letter Monday reinforcing its support.

The Community Bank Mortgage Servicing Asset Capital Requirements Study Act (H.R. 4042) and the Access to Affordable Mortgages Act (H.R. 5148) were both requested for a recorded vote.

H.R. 4042 would direct federal banking agencies to conduct a study of appropriate capital requirements for mortgage servicing assets for nonsystemic banking institutions.

CUNA expressed support for a possible manager's amendment to include the National Credit Union Administration in the study and delay the agency's proposed risk-based capital rule, but Rep. Blaine Luetkemeyer (R-Mo.), sponsor of the bill, opted to delay offering the amendment in order to work with his colleagues to include the credit union provision in the bill before a full House vote is taken.

NCUA Chair Debbie Matz sent a letter Monday to the committee chair. Rep. Jeb Hensarling (R-Texas), and its ranking member, Rep. Maxine Waters (D-Calif.), requesting the committee refrain from considering amendments related to the agency's risk-based capital proposal.

"My decision [not to offer the amendment] is not in any way based on Chairman Matz's unprecedented request that this committee refrain from conducting its work; rather there are issues on which I'm working with my Democratic colleagues," Luetkemeyer said. "I will continue to work with them to ensure credit unions are given parity before H.R. 4042 reaches the House floor."

Hensarling, who said he is a supporter of the credit union movement, echoed Luetkemeyer's thoughts on emphasizing credit union parity in the bill, and pledged to work with Waters and other Democrats before the bill heads to the House floor. Rep. Denny Heck (D-Wash.) volunteered to work on behalf of his party to ensure credit union parity as well.

The Regulation D Study Act (H.R. 3240) passed the committee by a voice vote. The act would direct the Government Accountability Office (GAO) to study the impact of the Federal Reserve Board's monetary reserve requirements. Regulation D restricts the number of automatic withdrawals from a member's savings account to six per month, which can lead to a member overdrafting their checking account if the limit has been reached.

"The issue of having only six transfers per month in accounts hasn't been reviewed in decades. With new technological advancements, especially online banking, we owe it to the American public to revisit this regulation," said Rep. Robert Pittenger (R-N.C.), who sponsored the bill. CUNA strongly supports the measure.

The bill also directs the GAO to consult with credit unions as part of the study. Rep. Sean Duffy (R-Wis.) said the committee is working to "lift the regulatory burden" from credit unions and community banks to help the flow of capital to small businesses and families.

CUNA has advocated for the cap to be increased, if not eliminated altogether, and called the proposed GAO study a "first step toward possible change."

Watch News Now Thursday for news of the votes on The Community Bank Mortgage Servicing Asset Capital Requirements Study Act (H.R. 4042) and the Access to Affordable Mortgages Act (H.R. 5148).

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CUNA to NCUA: Reg reduction for CUs is urgent

Washington
WASHINGTON (7/30/14)--Significant reduction in credit unions' regulatory requirements is urgently needed, Credit Union National Association interim President/CEO Bill Hampel said in a letter to National Credit Union Administration Chair Debbie Matz yesterday in advance of the agency's board meeting Thursday.

The NCUA should work with other agencies on regulatory relief measures for credit unions, CUNA urged. The letter expresses support for the NCUA's fixed-asset proposal, which is on the agency's meeting agenda, and for regulatory relief in general.

The NCUA has proposed to eliminate the 5% fixed asset cap -- which CUNA has strongly supported -- and will discuss the proposal at the monthly meeting. CUNA said it is "encouraged" by the agency's review.

"This move will allow credit unions to update facilities, upgrade technologies and make purchases that do not impact safety and soundness without having to seek permission or waivers from NCUA," the letter reads. "NCUA should not micromanage individual business decisions, and this represents a useful step in simplifying and modernizing procedures for credit unions."

CUNA is also urging the agency to maintain its practice over the last several years of reducing the mid-year budget. The agenda includes a mid-year analysis of the NCUA's operating budget.

"We strongly support efforts that will minimize agency expenditures that are borne by credit unions. We urge the agency to exercise fiscal restraint, and hope that Thursday's meeting will provide another opportunity for needed relief in this area," the letter reads.

CUNA also emphasized its willingness to work with the agency for much-needed regulatory relief for credit unions, and noting that the NCUA's "commitment to modernize member business lending, advertising, appraisal provisions and other rules is an encouraging development, and we will continue to work with the NCUA Board and staff to produce really meaningful changes."

The NCUA's board meeting will be Thursday at the agency's Alexandria, Va. headquarters, starting at 10 a.m. (ET).

Use the resource link below for more information.

Information is key to disclosure integration, CUNA tells CFPB

Washington
WASHINGTON (7/30/14)--In a stakeholders' check-in meeting on a rule to integrate separate mortgage disclosures rules into a single, more consumer-friendly document, the Credit Union National Association urged the Consumer Financial Protection Bureau to consider three things with respect to its regulatory implementation.
 
The CFPB's rule to integrate Truth-in-Lending Act and Real Estate Settlement Procedures Act (TILA/RESPA) disclosures will go into effect on Aug. 1, 2015. The new disclosures, mandated by the Dodd-Frank Act, are intended to better help consumers understand the mortgage loan process and make better-informed borrowing decisions.
 
CUNA Associate General Counsel Jared Ihrig, attending the CFPB roundtable discussion, urged the bureau to consider:
  • Making public announcements when it updates guides and other implementation aids on its website, which reflect clarifications or amendments to previously finalized rules. Credit unions rely on these resources, such as the Small-Entity Compliance Guides, and a public announcement would help to ensure they are working with the latest and most reliable guidance concerning the CFPB's rules, Ihrig informed the bureau.
  • Providing detailed guidance on the requirements surrounding the effective date of the rule to provide credit unions with as much information as possible to ease the implementation process. Ihrig told the CFPB that many credit unions have voiced their confusion related to the types of transactions and the appropriate disclosures that must be used before, on and after the rule's effective date.
Ihrig also urged the CFPB on CUNA's behalf to perform extensive outreach to forms providers, document preparation companies and technology vendors immediately so that programming and any implementation difficulties can be identified and resolved well prior to the effective date.
 
As credit unions heavily rely on these vendors for compliance with regulatory requirements, Ihrig explained, it is important to begin this process sooner rather than later to assist credit unions with the implementation of the rule's requirements.
 
The Tuesday meeting, held with financial institution trade association representatives, was the first of a planned series of four in which the CFPB will meet with mortgage industry participants to gauge progress with implementation efforts.
 
A second meeting was also held Tuesday and involved real estate settlement and title service providers. A third meeting is scheduled for Aug. 12 with technology vendors and representatives. The date for a final meeting, to be held with creditors, has not yet been announced.
 
In April, the CFPB issued a guide with an overview of the TILA/RESPA integrated disclosure rule, as well as details on "issues that small creditors, and those that work with them, might find helpful to consider when implementing the rule."
 
In the guidance, the CFPB notes that financial institutions may want to review their processes, software, contracts with service providers, or other aspects of business operations in order to identify any changes needed to comply with the rule. Use the resource link to access the guidance.

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CUNA's Schenk discusses rising consumer confidence on 'TheStreet'

Market
NEW YORK CITY (7/30/14)--The Credit Union National Association's interim Chief Economist Mike Schenk appeared on the online investment show "TheStreet" Tuesday to discuss a recent surge in consumer confidence.
 
This week, the Conference Board reported that its Consumer Confidence Index skyrocketed to a seven-year high in July to a reading of 90.9 from 86.4.
 
Schenk told TheStreet host Joe Deaux that it's encouraging to see confidence indices on the mend, especially when consumer behavior matches that sentiment.
 


"I don't look at what people say they're going to do, or how they feel, but I look at how they're actually behaving," Schenk said. "As an economist at the Credit Union National Association we serve 100 million members throughout the United States . . . and I can tell you those folks are engaged.
 
"From a borrowing perspective, loan growth at credit unions is right around 10%. You've got to go back about a decade to see growth that high."
 
When consumer confidence and behavior are both on the upswing, Schenk said, it demonstrates that consumers are "ready, willing and able to spend, (and spend) on big ticket items. Without confidence, they're going to be a little more cautious, so that's really good news overall.
 
"It leads us to the conclusion that the economy will not only continue to grow at healthy rates, but likely grow at rates that are increasing over our forecast horizon."
 
Schenk slightly tempered his enthusiasm over the data, however, as the reading falls short of where confidence should be compared with previous recoveries.
 
"At this point in previous recoveries, for example, if you look at the past three recoveries, the reading would be well over 100," Schenk said. "So it's good that confidence is up and increasing, and I think it bodes well for economic output overall, but we have other measures of consumer confidence that really give me pause."

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Fannie, Freddie G-fee comment deadline pushed back to Sept. 8

Washington
WASHINGTON (7/30/14)--September 8 is the new deadline for comments on the Federal Housing Finance Agency's (FHFA) proposed increases to guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders.
 
The previous deadline to submit input to the FHFA was August 4.
 
Fannie Mae and Freddie Mac charge g-fees to cover costs associated with providing a credit guarantee to ensure the timely payment of principal and interest to investors in mortgage-backed securities if a borrower fails to pay.  
 
The Credit Union National Association opposes increases in the g-fees.
 
Use the News Now resource link to access the FHFA's request for comment.

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2014 World Credit Union Conference opens in Australia

CU System
GOLD COAST, Australia (7/30/14)--An international flag parade with bearers clad in their national colors can only signal the start of one thing in the credit union world: The start of the year's World Credit Union Conference.
 
Click to view larger image Flag bearers dressed in national attire march in during the opening ceremonies of the 2014 World Credit Union Conference in Gold Coast, Australia. (World Council of Credit Unions Photo)
Nearly 1,900 credit union professionals from 48 countries descended upon Gold Coast, Australia this week to attend the World Council of Credit Unions' annual marquee event.
 
The conference, which provides international networking opportunities and the chance to learn from top industry experts from throughout the globe, kicked off Sunday with the flag parade, and ends today.
 
Don Magin, World Credit Union Conference chair and co-host of Customer Owned Banking Association, outlined Australia's mutual banking sector for attendees.
 
"Collectively, (credit unions) serve more than 200 million people worldwide," Magin said. "In the face of adversity, we have found a way to succeed. You all have reminded us in Australia that we have to do the same."
 
On Monday, World Council presented the Outstanding Membership Growth Awards to representatives of several international organizations that experienced exceptional membership-growth rates last year.
 
The award winners were:
  • Confederacao Interestadual das Cooperativas Ligada ao Sicredi of Brazil;
     
  • Federacion Nacional de Cooperativas de Ahorro y Credito of Guatemala; and
     
  • Islamic Investment and Finance Cooperative Group of Afghanistan.
Experts on hand at the conference also have offered insight on subjects such as young adult membership, technology, leadership and credit union advocacy.
 
Click to view larger image The Aboriginal dance troupe Nunukul Yuggera demonstrates a traditional performance to kick off this year's World Credit Union Conference. (World Council of Credit Unions Photo)
"It is meetings such as these that make us better, that help us serve our members better, that make us try to help others," said World Council Chair Grzegorz Bierecki, president of the National Association of State Credit Union Supervisors, in his remarks welcoming attendees. "During this conference, ideas will be born and linkages will be formed that will bring tangible results, if not today, then tomorrow."
 
Audience members Sunday, including a vast contingent of Australians and New Zealanders, also witnessed performances by the Aboriginal dance troupe Nunukul Yuggera and Australian tall-tale teller and singer Errol Gray.
 
To follow conference activities, including daily events and photos, visit the World Council's Facebook and Twitter pages at www.facebook.com/WOCCU and www.twitter.com/WOCCU , and use the hashtag #WCUC2014.

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Global Women's Leadership Forum speaker: 'People value authenticity'

CU System
GOLD COAST, Australia (7/30/14)--The 2014 Global Women's Leadership Forum, held in partnership with Australian Women in Mutuals during World Council of Credit Union's World Credit Union Conference, included research presented by keynote speaker Louise Mahler about strengthening women's verbal and nonverbal communication skills.
 
Click to view larger image Dr. Louise Mahler, vocal intelligence expert, discusses powerful communication skills at the 2014 Global Women's Leadership Forum in Gold Coast, Australia.
The Global Women's Leadership Network meets annually in conjunction with the World Credit Union Conference. More than 125 women credit union leaders from 24 countries attended Monday's event in Gold Coast, Australia.
 
Mahler presented research on harnessing the art of face-to-face communication to improve women's leadership effectiveness in the digital age. She explained the qualities of both male and female leaders throughout history--based on body language, words and voice.
 
"People value authenticity. We need a model of authenticity, which is what I call vocal intelligence, to change the notion of perceived leadership," said Mahler, an opera performer of 15 years. "It all starts in the mind, which influences the body. The voice is an outcome. Once you learn how to unlock your authenticity and clear the body, you will hear the voice. Women cannot afford to get this wrong."
 
The forum also included a panel discussion on overcoming leadership obstacles faced by women credit union leaders. Patsy Van Ouwerkerk, president/CEO of $2.2 billion-assets Travis CU, Vacaville, Calif., moderated the discussion, which included Louise Petschler, president/CEO of Customer Owned Banking Association, Australia; Barbara Gascoigne, general manager of Jamaica Teachers' Association Cooperative Credit Union Ltd.; and Luse Tamani, secretariat officer of Oceania Confederation of Credit Union Leagues, Pacific.
 
Click to view larger image The leadership forum panel discussion presented perspectives on solutions to women's leadership obstacles from the U.S., Australia, Jamaica and the Pacific. (World Council of Credit Unions photos)
Winners of the 2014 Global Women's Leadership Network scholarships presented projects designed to solve a problem or meet a need at each of their credit unions or within their communities. Network members will vote during the conference on which of the six scholarship winners will receive network support for the implementation of their project. The winner will be announced during the World Credit Union Conference's closing ceremony today.
 
Prior to the forum, Louise Aubusson, Australian Women in Mutuals co-leader, was honored with the Global Women's Leadership Network's 2014 Athene Award Saturday evening at the Global Women's Leadership Networking Reception, sponsored by Mitchell, Stankovic & Associates. The annual award is named for the Greek goddess of reason, intelligence, arts and agriculture, and honors outstanding work in the area of women's leadership.

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Moebs study: FIs rethink overdraft, CUs still most reasonable

CU System
LAKE BLUFF, Ill. (7/30/14)--Competitive and regulatory pressures are causing financial institutions to rethink their overdraft fee structures. Within an extensive report, the author includes information that describes how credit unions remain the most reasonable financial institutions in forgiving members for overdrafts.

About 52% of financial institutions (FIs) with assets over $50 billion have a de minimis balance, while 15.3% of FIs with assets less than $100 million use a de minimis balance, according to the Moebs Services study.  
 
 De minimis--Latin for a small amount--is a methodology for assessing overdraft fees that depends on how much the charge will overdraw an account.  If the overdrawn amount is below the FI's hurdle, the fee is waived.
 
For example, the national average for de minimis balance fee assessment is $7.40, with 25.8% of institutions using this methodology, according to Moebs. Transactions that cause an overdraft of less than $7.40 may not be charged an overdraft fee.
 
Credit unions have the lowest participation at 10.8% --due in large measure to their more personal handling of overdrafts, according to the Moebs study.  Banks have the highest de minimis participation rate at 33.9%. 
 
The Moebs Fee Study found de minimis balance hurdles range from a high of $50 to a low of $1.
 
The wide range is due to the competitiveness of the market for checking, according to the study.  The higher the de minimis balance the more competition by FIs to get checking accounts.
 
Another change in overdraft fee practice is the use of caps, or limits on the number of overdrafts fees charged during a single day. Nationally, 24.3% of FIs have instituted some form of caps. Caps ranged from a low of two, with fees for overdrafts over two in a day waived, to a high of 12 in a day, with the national average at five, Moebs said. 
 
Moebs said 63% of Wall Street FIs with more than $50 billion in assets, use an overdraft fee cap, while 12.2% of the credit unions and community banks with under $100 million in assets use a cap.  As with the De minimis balance, main streets FIs often provide de facto caps by phoning the consumer to advise them of multiple overdrafts, Moebs said.

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CUNA to host Twitter chat to boost CU awareness

CU System
WASHINGTON (7/30/14)--Pull up a chair Thursday for a national conversation about the credit union movement, right from your office or living room.
 
The Credit Union National Association is inviting leagues, credit unions, volunteers and member-advocates to participate in its newest #CUNAchat on Twitter, slated for Thursday at 3 p.m. (ET).
 
Topics for the discussion, which will be moderated by @CUNA and feature responses from CUNA's @aSmarterChoice and @CUNAadvocacy, include:
  • Raising awareness of credit unions to consumers;
  • The power of credit union membership;
  • Credit union structure; and
  • Community impact.
@CUNA will pose questions from its Twitter account using the hashtag #CUNAchat. Anyone following the conversation can jump in and offer a response.
 
Follow @CUNA, @aSmarterChoice and @CUNAadvocacy to get involved Thursday. Participants are encouraged to include the hashtag #CUNAchat when responding.
 
As the credit union movement marches toward 100 million memberships, meanwhile, credit union members continue to send in "selfies" of themselves to www.americascreditunions.org , the website CUNA has launched as part of a campaign to highlight the industry's forthcoming milestone.
 
When sharing selfies submitted to the website on social media platforms such as Twitter, Facebook and Instagram, use the hashtag #100MM.

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