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News Now: July 10, 2014

RBC on radar in Chicago today: Listening session audios to be available

Washington
CHICAGO (7/10/14)--The National Credit Union Administration's second Listening Session of 2014 starts today at 1 p.m. (CT) in Chicago.  Both the NCUA and the California and Nevada Credit Union Leagues have announced plans to provide audio clips of this event and two other similar sessions.

Almost 170 people are registered for the Chicago event.

The session is intended to give credit unions a forum to discuss what is on their minds directly with their federal regulators. The agency's risk-based capital proposal was the primary topic during the previous session in Los Angeles in June, and is expected to be front and center today as well.

NCUA Chair Debbie Matz, board members Michael Fryzel and Rick Metsger are expected to attend. Other top-level NCUA staff will be on hand.

The California and Nevada Credit Union Leagues announced Wednesday that they will post audio clips of the session to their website (see resource link). The NCUA also said recently that it will post recordings of the listening events once they have been transcribed in accordance with federal closed-captioning laws. That is expected to take several weeks (News Now July 9).

A third and final Listening Session will take place July 17 in Alexandria, Va. The event is currently full, but a waitlist is available on the NCUA website.

Shared branching awareness campaign goes national

CU System
ST. LOUIS (7/10/14)--A shared branching video created by the Missouri Credit Union Association (MCUA) has developed a growing national audience.
 
Since the 90-second clip debuted in October, several other state leagues have asked to link to the video, which helps consumers understand how to use the CO-OP Shared Branch Network. Among the state leagues that feature the video are Vermont, Utah, New Jersey and Pennsylvania.
 


MCUA is also working with the Pennsylvania Credit Union Association to have the video translated in Ukrainian.
 
"We're happy to share the shared branch video because we want more members using this valuable service," says Mark Hohenstein, MCUA vice president of the credit union shared branch network ( Missouri Difference July 9). "I want to thank the shared branch task force for their support of this project."
 
The shared branch task force includes:
  • Louie Delk, president/CEO, Conservation Employees' CU, Jefferson City, with $97 million in assets;
  • Chris McCreary, president/CEO, United Consumers CU, Independence, with $123 million in assets;
  • Brandon Michaels, president/CEO, Mazuma CU, Kansas City, with $488 million in assets;
  • Stan Moeckli, president/CEO, Electro Savings CU, St. Louis, with $151 million in assets;
  • Dave Osborn, president/CEO, Anheuser-Busch Employees' CU, St. Louis, with $1.4 billion in assets;
  • Kathie Peterie, president/CEO, Metro CU, Springfield, with $52 million in assets; and
  • Randy Yeck, vice president, human resources, Vantage CU, Bridgeton, with $737 million in assets.
Among the ways credit unions and leagues can feature the video:
 
  • On a website. A text link to the YouTube channel would be the simplest way to share the video with members. Use the resource link below to access the YouTube video.
  • On social media. Depending on which social media channels the credit union uses, the process will vary. For assistance sharing a video, contact Nora Holloway, MCUA public relations and online community director, at nholloway@mcua.org or call 800.392.3074, ext. 1349.
  • In a branch lobby. Burn a copy of the video to a disc or add it to the current programming lineup. For assistance, contact Brianna O'Hara, MCUA marketing director at bohara@mcua.org or call 800.392.3074, ext. 1360.
  • Via an email in a link or in an online member newsletter. Statistics show that consumers engage with video and find it useful in making decisions, MCUA said.

Faces, stories begin to fill 100M membership website

CU System
MADISON,
"I may be 1 in 100 million members, but my credit union treats me like I'm #1 every time!," wrote Brianne from Edina, Minn. "I am confident that I am making the best financial choices for my family and that we are part of a larger community of consumers who want to make a difference in this world!"
Wis. (7/10/14)--The newly constructed Membership Map on the Credit Union National Association's 100 million membership campaign website is beginning to fill up with the faces of credit union members from throughout the country.

Credit union members are showing "what 100 million looks like" by sending selfies of themselves and corresponding credit union stories to www.americascreditunions.org , as part of a campaign to highlight the industry's milestone of reaching 100 million memberships, a feat it expects to achieve later this summer.

To see how many selfies each state has collected, access the Membership Map by clicking on the red menu tab on the main page of the site, clicking on an individual state, and then on the "Other Credit Union Members From This State" link. Use the resource links to either access the full map or to submit a selfie.

"My credit union helped me build my credit with a share-secured loan when I was 18 and now I have my first car loan!" wrote Morgana, from Hunersville, N.C. "I also like their free debit card and Vacation, Holiday & Back-to-School savings clubs."
In addition to the pages full of faces, those who access the interactive map also will stumble upon interesting facts about each state--facts that of course relate back to the number 100 million.

Click on California and find out the world's tallest tree, a 369-foot California Redwood, would need to be stacked on top of itself 271,000 times in order to equal 100 million feet.

Click on Illinois and discover that Illinois' 12 million acres of cornfields would need to be expanded eight-fold to cover 100 million acres.

The website also features news and a full gallery of all the selfies that have been submitted. Check back often to see how many selfies have been posted from your state--and to see your own.

CUNA, trades seek stronger 'patent troll' defense measures

Washington
WASHINGTON (7/10/14)--As a House Energy and Commerce subcommittee moves forward with a vote on a patent reform bill today, the Credit Union National Association sent a joint financial trade group letter to urge lawmakers to strengthen its provisions to fight
 
The bill is intended, in part, to address the problem of Patent Assertion Entities (PAEs), often referred to as patent trolls, who in most cases assert patents of dubious quality through vaguely worded demand letters or intentionally vague complaints to force settlements or payments.
 
Financial institutions of every size have been targeted by PAEs, the joint letter states. It warns patent trolls' recent focus on credit unions and community banks threatens to pose "additional, unwarranted costs on lenders and the communities they serve."
 
"In our industry alone, there are hundreds of examples of a patent troll attempting to sell a product--the patent license--to a bank or credit union using tactics resembling fraud or extortion," the letter says. It is addressed to Rep. Lee Terry (R-Neb.), chairman of the House Energy and Commerce subcommittee on commerce, manufacturing and trade, and its ranking member, Rep. Jan Schakowsky (D-Ill.).
 
While calling the lawmakers' bill "a step in the right direction," CUNA encourages them to do more to ensure the bill can be an effective tool for financial institutions. The bill should limit the number of exceptions provided to patent trolls, such as through affirmative defenses to fraudulent behavior, and should allow states with effective laws to continue to enforce them.
 
The subcommittee began a markup of the bill Wednesday and votes continue today. In addition to CUNA, the letter is signed by the National Association of Federal Credit Unions, the American Bankers Association and the Independent Community Bankers of America.
 
CUNA has repeatedly urged lawmakers to act to curb the patent system abuses. "Reforms are desperately needed. This growing problem will not be solved until Congress passes bipartisan legislation that makes clear patent trolls can no longer get away with abusing the system," CUNA has said in letters of support for such legislation.

CUNA and the state credit union associations have been active on every level urging lawmakers and the Obama administration that patent reform is needed.

Other Resources

FATF offers definitions, pros and cons of virtual currencies

Washington
WASHINGTON (7/10/14)--The Financial Action Task Force (FATF) called virtual currencies both "the wave of the future" and a powerful new tool for criminals to move and store illicit funds, in a paper released last month. The FATF is an intergovernmental body that develops and promotes policies to protect the global financial system from money laundering and terrorist financing. The United States is one of 37 member countries.

For the FATF's purposes, a virtual currency is defined as "a digital representation of value that can be digitally traded and functions as a medium of exchange; and/or a unit of account; and/or a store of value, but does not have legal tender status of payment in any jurisdiction."

The FATF lists several benefits of virtual currencies, particularly the potential to improve payment efficiency and reduce transaction costs.

"For example, Bitcoin functions as a global currency that can avoid exchange fees, is currently processed with lower fees/charges than traditional credit and debit cards and may potentially provide benefit to existing online payment systems, like Paypal," the report reads.

However, the anonymous nature of many such currencies create many opportunities for money laundering and terrorist financing, two activities which the FATF exists to combat. The FATF's primary mission is to develop recommendations that are recognized as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.

"Virtual currency's global reach likewise increases its potential AML/CFT risks. Virtual currency systems can be accessed via the Internet, including via mobile phones, and can be used to make cross-border payments and funds transfers," the report reads. "In addition, virtual currencies commonly rely on complex infrastructures that involve several entities, often spread across several countries, to transfer funds or execute payments. This segmentation of services means that responsibility for AML/CFT compliance and supervision/enforcement may be unclear."

The report also lists several high-profile cases that have come up in recent years, all of which involve abuse of virtual currency for money-laundering purposes:
  • In May 2013, the U.S. Department of Justice charged Liberty Reserve, a Costa Rica-based money transmitter, and seven of its principals and employees with facilitating the movement of more than $6 billion in illicit proceeds. This is the largest online money-laundering case to date.

  • In September 2013, the U.S. Department of Justice seized the website known as Silk Road, which included approximately 173,991 bitcoins, worth more than $33.6 million. The site operated as a "global black-market bazaar" used by thousands of drug dealers and other vendors distributing unlawful goods.

  • An eight-year investigation of Western Express International, a multinational Internet-based cybercrime group, resulted in convictions or guilty pleas from 16 individuals. It was an enterprise composed of individuals buying and selling nearly 100,000 stolen credit card numbers and other personal information using virtual currencies.
Use the resource link below to access the full report.

Monetary policy hearings coming next week

Washington
WASHINGTON (7/10/14)--Federal Reserve Board Chair Janet Yellen is scheduled to deliver the Fed's semiannual monetary policy report to the Senate Banking Committee on Tuesday and then to the House Financial Services Committee Wednesday.
 
The hearings are scheduled to begin at 10 a.m. (ET) and, at each, the Fed chair will present her report and then answer lawmakers' questions.
 
Yellen made her first semiannual report to Congress as Fed chair in February, at which time she said substantial progress had been made in restoring the economy to health and in strengthening the financial system, but there was still more to do.

"Too many Americans remain unemployed, inflation remains below our longer-run objective, and the work of making the financial system more robust has not yet been completed," she said, just weeks after taking the helm.
 
The public airing of the chairman's assessment of monetary policy is required under the Humphrey-Hawkins Act.

Other Resources

Three league-backed bills await N.Y. gov. signature

CU System
ALBANY (7/10/14)--With the support of the Credit Union Association of New York's state-level advocacy efforts, three important pieces of pro-credit union legislation recently passed through both houses of the New York Legislature.
 
The three bills are now waiting to be sent to Gov. Andrew Cuomo to be signed into law ( The Point July 8).
 
The bills include:
  • S.6805B/A.9037A, which would allow credit unions and other financial institutions to establish prize-linked savings accounts, passed the Legislature May 28--just weeks after hundreds of credit union advocates gathered at the state Capitol to lobby lawmakers during the league's state governmental affairs conference. The Assembly version of the legislation was introduced by Rep. Annette Robinson (D-Metropolitan). The Senate version was introduced by Sen. Andrew Lanza (R-Metropolitan).
  • S.6735/A.9057, which would extend the state's 2007 "wild card" law for an additional five years, passed the Legislature June 10. The legislation would extend a law that provides state-chartered credit unions, banks and thrifts with the opportunity to exercise the same banking powers that are available to federally chartered institutions. The Assembly bill was introduced by Robinson, and the Senate version was introduced by Sen. Joseph Griffo (R-Utica-Rome).
  • S.7112/A.9408, which would allow state-chartered credit unions to apply for the ability to combine select employer, associational and community groups into a single field of membership, was passed on June 19--the last day of the legislative session--after weeks of advocacy efforts from the league. The Assembly bill was introduced by Robinson. The Senate bill was introduced by Griffo.
"The [league] remains committed to ensuring that New York's credit unions are represented fairly during the legislative process, and we will continue to work closely with lawmakers and agencies at both the state and federal levels," said Mike Lanotte, league senior vice president/general counsel. "I would again like to thank all of the lawmakers--especially our bill sponsors--who put aside partisan differences to pass legislation that will benefit the state's credit unions and their members."
 
The league successfully lobbied against other pieces of legislation that would have been harmful to credit unions, including:
  • S.3868B/A.7056, which would have prohibited the use of consumer credit reports in hiring and employment decisions;
  • A.7223, which would have imposed additional disclosure requirements of electronic fund transfers;
  • S.6906A/A.9189, which would have authorized municipalities to treat unpaid building code, property maintenance and nuisance violations as unpaid real property taxes;
  • S.6551A, which would have required credit card issuers to issue cards with smart chip technology without imposing any requirements on merchants; and
  • S.7350A/A.9341A, which would have required mortgage lenders and servicers to maintain properties on delinquent mortgages.

Other Resources

Castro confirmed as new HUD secretary

Washington
WASHINGTON (7/10/14)--The U.S. Senate confirmed Julian Castro to become the new head of the Department of Housing and Urban Development Thursday. Castro, the mayor of San Antonio, was confirmed by a vote of 71-26.
 
Castro, 39, was nominated in May by President Barack Obama, who called Castro a "proven leader, a champion for safe, affordable housing and strong, sustainable neighborhoods" in a statement released after the confirmation hearing.
 
"I know that together with the dedicated professionals at HUD, Julian will help build on the progress we've made battling back from the Great Recession--rebuilding our housing market, reducing homelessness among veterans, and connecting neighborhoods with good schools and good jobs that help our citizens succeed," Obama said.
 
Castro has been mayor of San Antonio since 2009. His twin brother, Joaquin, is a Democratic congressman from Texas, representing the state's 20th District.

Other Resources

NCUF reminds of July 31 Wegner award nomination deadline

CU System
MADISON, Wis. (7/10/14)--July 31 is the deadline to nominate individuals and organizations for the Herb Wegner Memorial Awards presented by the National Credit Union Foundation.
 
Winners will be honored at NCUF's annual awards dinner on March 9 in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.
 
"Don't delay to nominate the finest individuals and organizations or programs for what are widely considered the highest national honors in the credit union movement," said Danielle Brown, NCUF director of development and donor relations.
 
The nominations are being accepted for:
  • The Individual Achievement Award honors an unsung hero for their innovative concepts and/or accomplishments that are ongoing and current contributions to the credit union community for their work within the past three to five years. Accomplishments must have had a significant impact or a potential impact on the local or national or international credit union movement with measured results. Nominations must cite a specific subject of achievement such as financial literacy, service to the underserved, alternatives to predatory lending, and/or new products.
  • The Outstanding Organization/Program Award honors an organization, program or business for their innovative concepts or product and services that have had a significant impact on the local or national or international credit union movement with measured results.
  • The Lifetime Achievement Award honors an individual who has dedicated their life to promoting the credit union philosophy, created innovative concepts and provided leadership that has had a significant and lasting impact on the local or national or international credit union movement.
Nominations can come from individuals or organizations. To make a nomination:
  • Complete the Wegner Awards nomination form on the NCUF website. Use the link.
  • Gather at least five letters of recommendation citing examples of the nominee's achievements relevant to the award criteria
  • Send the nomination form and recommendation letters electronically to NCUF by July 31.
Questions about the Wegner Awards can be directed to Danielle Brown at dbrown@ncuf.coop or 608-556-2406.
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