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News Now: April 2, 2015

'Endless action' in Congress as CUNA sends more than 50 letters on CU issues: Donovan

WASHINGTON (4/2/15)--"Endless action" is how CUNA Chief Advocacy Officer Ryan Donovan described the first three months of the 114th Congress, which has seen hearings in both chambers on regulatory relief, patent reform and data security, and more than 54 letters sent by CUNA to lawmakers on those and other topics.

"The first three months of this year have set us up to have a very busy and productive remainder of the year," said Donovan in his weekly "Legislative Update."

"We're going to need credit unions to stay engaged in all these issues, to continue to press data security," he said. "We're hopeful something is going to happen on patent reform; there's a lot going on here, and we need credit unions to be talking to their members about it."

Donovan said several of the nine regulatory relief bills passed by the House Financial Services Committee last month may be taken to the House floor in April, either individually or part of a package. He added that in late April or early May the Senate Banking Committee may likely markup regulatory relief legislation, and CUNA is working to ensure credit unions' priorities are included in those bills.

Also, as merchant data breaches continue to make headlines, Donovan said that CUNA's efforts on that front have developed nicely. Last year was all about getting Congress's attention on merchant data breaches, and the millions of credit union and member contacts CUNA was able to develop have gotten legislators' attention.
"As a result, we're starting to see legislation that doesn't just talk about breach notification requirements--everybody agrees that consumers need to be notified about data breaches--but now we're seeing bills that call for increased (merchant) standards," Donovan said.
He said the bill marked up by the House Energy and Commerce Committee in March doesn't go nearly far enough in calling for increased standards, but it's a step in the right direction. He said a stronger bill could soon be reintroduced in the Senate soon.
Tax reform also remains a high priority for the House Ways and Means and Senate Finance committees, particularly with the Senate Finance Committee setting up working groups to look at aspects of the tax code.
"[Tax reform] might not happen, but we've got to stay engaged, because for us tax reform isn't over until a president signs a tax reform bill" whoever that president is, Donovan said.
He also urged credit unions to file "carefully considered, thoughtful comment letters" on the National Credit Union Administration's revised risk-based capital proposal. CUNA has posted new resources for credit unions composing their comment letters, which are due to the agency by April 27.

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NCUA announces 1st-round CDRLF grants

ALEXANDRIA, Va. (4/2/15)--One hundred fifty-three low-income credit unions (LICUs) will receive a total of $520,440 through the first Community Development Revolving Loan Fund (CDRLF) grant round in 2015, the National Credit union Administration announced Wednesday.
The LICUs, which provide affordable financial services to underserved communities, will be able to offer staff training and student internships with the grants that are administered through the agency's Office of Small Credit Union Initiatives.
In this round, 344 credit unions submitted grant applications to the NCUA, and those applications represented more than $1.7 million in funding requests. Of the total awarded this round, $273,000 went to training grants and $247,440 for student internships.
Since 2001, the NCUA has received more than $14.8 million in CDRLF grant funding.
"These grants focus on the future of credit unions," said NCUA Chair Debbie Matz in the announcement. "They will help train staff and volunteers to provide even better service and introduce the next generation of leadership to the credit union system. NCUA works hard to help credit unions succeed, and investing in current and future staff is a good way to help them do what they do best: serve members and their communities."
A list of grantees is available online . Credit unions have received an email notification and may check their CyberGrants login for their application status. Credit unions that did not receive a grant in 2014 and those with smaller assets received priority for funding.
The NCUA encourages LICUs interested in applying for the second grant round of 2015 to participate in a free April 15 agency webinar to learn about the initiatives that will be offered.

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CFPB payday lending elimination plan tops March News Now Top 10

CU System
MADISON, Wis. (4/2/15)--An article about the Consumer Financial Protection Bureau's plan to eliminate payday lending "debt traps" was the most-read News Now article in March.

CUNA is evaluating the plan to determine if it accomplishes its goal without hindering credit unions' efforts to provide credit to their members.

The Top 10 list for March:

10. Fed removes 'patient' from policy statement

WASHINGTON (3/18/15)--The Federal Open Market Committee has not yet seen enough out of the economy to raise short-term interest rates, but, perhaps signaling a forthcoming rate hike, dropped the word "patient" from the policy statement released at the conclusion of its two-day meeting today.

9. Nussle: CUs still wait for over $30M lost from Target breach

ST. PAUL, Minn. (3/20/15)--Despite Thursday's announcement by Target of a $10 million settlement for a consumer class-action lawsuit related to its 2013 data breach, credit unions are still waiting to be reimbursed for the nearly $30 million of costs they incurred in response to the breach. The settlement only covers payments to consumers for damages they may have incurred. It does not cover costs credit unions and other financial institutions incurred as a result of the breach. 

8. CUNA-backed bill to raise MBL cap introduced

WASHINGTON (3/2/15)--CUNA welcomes the reintroduction today of a bill that would raise the cap on credit union member business lending (MBL) to 27.5% of assets. Introduced by Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.), the Credit Union Small Business Jobs Creation Act (H.R. 1188) is identical to a bill introduced by Royce in the last Congress.

7. NCUA's Matz calls 2015 year of reg. relief

WASHINGTON (3/9/15)--National Credit Union Administration Chair Debbie Matz touted 2015 as the year of regulatory relief from the stage of the CUNA Governmental Affairs Conference this morning.

6. CUNA welcomes Senate exam fairness bills

WASHINGTON (3/18/15)--Sens. Jerry Moran (R-Kan.) and Joe Manchin (D-W. Va.)  reintroduced a bill (S. 774) intended to enhance safety and soundness by increasing the consistency and fairness of the regulatory examination system today.

5. Royce introduces 2015 CU Residential Loan Parity Act

WASHINGTON (3/18/15)--Royce reintroduced the CUNA-supported Credit Union Residential Loan Parity Act today. Under current law, when a bank makes a loan to purchase a 1-to-4 unit, non-owner occupied residential dwelling, the loan is classified as a residential real estate loan. However, when a credit union makes the same loan, it is classified as a business loan and is therefore subject to the 12.25%-of-assets cap on member business lending under the Federal Credit Union Act.

4. CUNA files amicus brief in important Florida interchange case

ATLANTA (3/6/15)--CUNA today filed an amicus brief Thursday in the U.S. Court of Appeals for the 11th Circuit, in a case raising many of the policy issues surrounding credit card interchange fees. The case, Dana's Railroad Supply v. Bondi , involves a First Amendment challenge to Florida's ban on merchants surcharging users of credit cards.
3. NCUA warns of scammers using similar website logo, design

ALEXANDRIA, Va. (3/17/15)--Scammers using a website with a logo and design similar to that of the National Credit Union Administration are attempting to convince consumers to provide sensitive information or send money. According to the NCUA, consumers have received emails from the National Credit Union website, which is not affiliated in any way with the NCUA, a federal agency, and the emails are not from the agency.

2. 9 CUNA-backed relief bills approved by House Financial Services Committee

WASHINGTON (3/26/15)--Nine regulatory relief bills supported by CUNA were approved by the House Financial Services Committee this morning after a two-day markup of a series of bills.
1. CFPB issues proposal to end payday lending 'debt traps'

WASHINGTON (3/26/15)--The CFPB released a plan overnight aimed at eliminating payday lending "debt traps," and CUNA is evaluating it to determine if it accomplishes its goal without hindering credit unions' efforts to provide credit to their members. The new consumer protections would apply to payday loans, vehicle title loans, deposit advance products and certain high-cost installment and open-end loans.

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'Secret is out' about Ohio CUs: Dayton Daily News

CU System
DAYTON, Ohio (4/2/15)--The secret is out in Ohio: Credit unions offer consumers a great deal on financial services, according to a March 27 Dayton Daily News article.

Membership at Ohio credit unions increased 3.6% in 2014, the biggest jump in 20 years, the article reported, citing CUNA statistics. Also, loans at Ohio cooperative financial institutions jumped 10.2%, the most since 2005.

"Credit unions, which are not-for-profit financial cooperatives owned and governed by their members, boasted 101.4 million members nationwide," the article said.

"It's kind of a joke that credit unions are the best-kept secret," Jannell Eichstaedt, vice president of member services at Day Air CU, Kettering, Ohio, told the Dayton Daily News . "I think our secret is finally getting out."

Day Air has increased its membership by an average of 5.5% in the past two years, Eichstaedt said.

That growth is likely shaped by superior member service. The article shared the story of a member business loan Day Air made to Tony Pappert, owner of a landscaping business. The credit union gave Pappert a loan after banks turned him away four years ago.

"Day Air has been a lot more helpful meeting my business needs," Pappert said. "Overall, I've had a better experience here than when I used a bank."

CUNA continues to press lawmakers for member business lending (MBL) relief. H.R. 1188, The Credit Union Small Business Jobs Creation Act, introduced by Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.) last month, would increase the MBL cap to 27.5% of assets.

Royce also reintroduced the CUNA-supported Credit Union Residential Loan Parity Act. Under current law, when a bank makes a loan to purchase a 1-to-4 unit, non-owner occupied residential dwelling, the loan is classified as a residential real estate loan. However, when a credit union makes the same loan, it is classified as a business loan and is therefore subject to the 12.25%-of-assets cap on member business lending under the Federal Credit Union Act.

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Ore. CUs stress economic power during Capitol visits

CU System
SALEM, Ore. (4/2/15)--Credit union advocates from throughout Oregon swarmed the offices of all 90 state legislators this week for the Northwest Credit Union Association's (NWCUA) annual Credit Union Day at the Capitol.

Troy Stang, president/CEO, Northwest Credit Union Association, left, visits with Oregon Gov. Kate Brown on Credit Union Day at the Capitol in Salem Tuesday. (Northwest Credit Union Association Photo)
In addition to asking for support on key legislative issues important to Oregon's credit unions, such as prize-linked savings account legislation, the credit union leaders also handed their elected officials a report performed for the NWCUA that spells out the economic benefits credit unions provide the economy ( Anthem March 31).

The 2015 Northwest Credit Unions' Economic Impact Report, compiled by ECONorthwest, found that in 2014 Oregon's credit unions provided their 1.63 million members with $103 million in savings, which translates into $206 million in buying power.

"It looks like you had a total economic impact on the state of $1.9 billion--almost $2 billion," said newly minted Gov. Kate Brown, who also met with credit unions during the day.

The visits were prefaced by a Statesmen Journal opinion piece written by Jean Wheat-Palm, president/CEO, Valley CU, Salem, Ore., who expanded on the ECONorthwest report by saying that not-for-profit cooperative credit unions are foundational to the state's economy.

"The credit union movement continues to fulfill the role for which it was created," Wheat-Palm wrote in the Statesmen Journal (March 29). "Through our not-for-profit, financial cooperative approach, we generate thousands of family-wage jobs, hundreds of millions in direct member benefits and $1.9 billion in economic impact in Oregon alone."

The NWCUA also brought its prototype "home" for a credit union family to show off at the Capitol.

The fabricated, four-wall "house" displays a typical credit union family, and how a family can take advantage of credit union membership to improve its home, start a business or buy a car.

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World Council applauds coming AML 'de-risking' MSBs guidance

BRUSSELS (4/2/15)--The World Council of Credit Unions applauded the Financial Action Task Force's (FATF) efforts to address financial institution customer "de-risking" during a forum held in Brussels last week.

The FATF is a Paris-based organization that writes standards at the global level for anti-money laundering and countering the financing of terrorism (AML/CFT).

Most AML/CFT rules and guidance for credit unions and banks issued by the U.S. Treasury's Financial Crimes Enforcement Network under the Bank Secrecy Act are based on FATF standards.

De-risking involves financial institutions making the decision not to serve customers that present higher AML/CFT risks, including money services businesses (MSBs) or other financial businesses, usually as a result of the institution's concerns about compliance risks or because of perceived pressure from regulators.

De-risking can affect credit unions by making it harder for them to open and maintain bank accounts and also can impact credit unions that would like to have MSBs and similar companies as members.

The FATF is likely to issue guidance within the next year on financial institutions' responsibilities when it comes to MSBs and is also considering issuing guidance on member de-risking in the banking sector in general.

"Our members have told us that their credit unions often face pressure from examiners not to provide services to MSBs, and also that it has become increasingly difficult for credit unions to open and maintain bank accounts in recent years," said Brian Branch, president/CEO of the World Council.

"We believe that clearer guidance on credit unions' and banks' AML/CFT compliance responsibilities regarding clients that are financial businesses will significantly reduce regulatory burdens on credit unions and help them provide better services to their members," he said.

The World Council made oral comments at the forum urging the FATF to issue guidance discouraging "unreasonable" de-risking. The FATF incorporated similar comments made by World Council  in an April 2014 comment letter into the FATF's paper , "Guidance for a Risk-based Approach to the Banking Sector," which was issued in October 2014.

Last week's FATF forum also included consultations on AML/CFT concerns related to virtual currencies and how to best leverage innovations that promote financial inclusion while maintaining a safe and sound AML/CFT compliance program.

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