WASHINGTON (6/18/13)--Credit Union National Association witness Jerry Reed will detail credit union concerns with the Consumer Financial Protection Bureau's qualified mortgage regulations when he testifies before the House Financial Services financial institutions and consumer credit subcommittee hearing today entitled "Examining How the Dodd-Frank Act Hampers Home Ownership," scheduled to start at 10 a.m. (ET). Reed is chief lending officer at Alaska USA FCU.

While America's credit unions appreciate the improvements that the CFPB has made to the QM rule, credit unions "continue to have significant concerns with respect to how other regulators will use the bureau's regulation to impact credit union mortgage lending, and we question whether the rule should apply to credit unions in the first place," Reed wrote in prepared testimony.

Reed also said the CFPB "has not done enough to address credit unions' concerns that being subjected to the rule will actually reduce credit availability."

The prepared testimony also includes comments on language in the QM rule that addresses:

• Debt-to-income ratios;

• Points and fees limitations; and

• The CFPB's ongoing examination of rural and underserved area definitions.

Representatives from the Conference of Bank Supervisors, the American Bankers Association, the Mortgage Bankers Association, the Center for Responsible Lending and the National Association of Realtors are also scheduled to testify today.

For more on the hearing, use the resource link.

WASHINGTON (6/18/13)--Tax advocacy efforts by credit unions and their members have remained strong as the U.S. Congress prepares to draft comprehensive reform legislation in the coming weeks, with more than 100,000 separate congressional contacts being made to tell their legislators, "Don't Tax My Credit Union!"

"Tax reform is alive and well on Capitol Hill. The credit union tax status is in the mix, and credit unions need to remain aware and active to protect their tax status," Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan said.

The last in a series of tax reform options papers is expected to be released later this week. A tax options paper on exempt organizations and charitable giving released last week included two options of particular interest to credit unions: The paper mentioned that one option for tax reform could be to "disallow tax-exempt status for certain organizations engaged in business activities, such as credit unions, nonprofit hospitals or certain types of insurance." The report also includes a discussion of options to expand Unrelated Business Income Tax.

With these and other papers having been released and discussed by the Senate Finance Committee, the process can move on to the next phase of writing new tax laws. Chairman Max Baucus (D-Mont.), chair of the Senate's powerful tax-policy committee and leader of the Joint Committee on Taxation, is calling for the tax reforms to be finalized and introduced before the August recess, Donovan noted.

The groundbreaking CUNA/state credit union league advocacy effort, which combines elements of traditional letter writing campaigns with new media methods to leverage the power of credit unions' 96 million members, continues to gain traction on social media: The Don't Tax My Credit Union! Facebook page has been viewed more than 265,000 times since mid-May. Pro-credit union messages have been widely shared through CUNA's Twitter handle @CUNAadvocacy, and hashtag, #DontTaxMyCU, and social media micro-video site Vine.

CUNA has also developed a reformatted version of its tax advocacy toolkit to help credit unions and their members spread this message. For more CUNA/league advocacy resources, use the resource links.

This week, the House is scheduled to consider the Federal Agriculture Reform and Risk Management Act of 2013 (H.R. 1947). The Senate is expected to consider judicial nominations and immigration reform.

Hearings on today's schedule include:

• A House Financial Services financial institutions and consumer credit subcommittee hearing entitled "Examining How the Dodd-Frank Act Hampers Home Ownership." Alaska USA FCU Chief Lending Officer Jerry Reed will testify on CUNA's behalf at this hearing (For more, see today's story: QM Concerns Are Focus of CUNA Hill Testimony Today);

• A House Financial Services oversight and investigations subcommittee hearing on the Consumer Financial Protection Bureau budget; and

• A Senate Banking, Housing and Urban Affairs housing, transportation and community development subcommittee hearing on reverse mortgages and their impact on the Mutual Mortgage Insurance Fund.

The House Financial Services Committee has also set a Wednesday markup session for the Small Business Capital Access and Job Preservation Act (H.R. 1105), the Burdensome Data Collection Relief Act (H.R. 1135), the Audit Integrity and Job Protection Act (H.R. 1564) and H.R. 2374, to amend Section 913 of the Dodd-Frank Act.

WASHINGTON (6/18/13)--The U.S. Supreme Court Monday announced it will hear a case that could decide the fate of the application of disparate impact theory under the Fair Housing Act. Disparate impact focuses on discrimination based on effects and not intent.  The case, known asMount Holly v. Mount Holly Citizens In Action Inc. (No.11-1507), is detailed in the June 17 issue of the Credit Union National Association's Regulatory Advocacy Report.

The case concerns a New Jersey township's plan to redevelop a blighted residential area occupied predominantly by low- and moderate-income minority households. The suit alleged that a disproportionate number of minorities would be affected by the relocation required by the plan and would be unable to afford the new housing proposed under the plan.

The current issue of the RAR notes that the Fair Housing Act makes it unlawful to "refuse to sell or rent after the making of a bona fide offer … or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin."  Despite the lack of textual support for disparate impact claims in the Fair Housing Act, the federal appeals courts have permitted the claims to proceed.

CUNA's regulatory experts explain that the case is important because the Consumer Financial Protection Bureau has also insisted that disparate impact claims are viable under the Fair Housing Act and the Equal Credit Opportunity Act even though they are not supported by the text of the statutes.

"The CFPB has discussed the use of disparate impact analysis in a letter discussing indirect lending. A decision in Mount Holly could very well determine the extent the CFPB can use disparate impact moving forward," says the RAR.

The Regulatory Advocacy Report is an important resource for CUNA members that compiles the hottest regulatory issues and information weekly.  CUNA members can access it and subscribe by using the resource link below.

ALEXANDRIA, Va. (6/18/13)--"It's time for Congress to act" and pass legislation that would increase the credit union member business lending (MBL) cap, and give credit unions greater authority to access secondary capital sources, National Credit Union Administration Board Member Michael Fryzel wrote in the June edition of The NCUA Report.

"For the almost five years that I have sat on the NCUA board, national trade organizations, credit unions across the country and NCUA have tried to convince Congress to pass enabling legislation to increase the [MBL] cap and provide all credit unions with access to supplemental capital," Fryzel wrote. While the aftermath of the financial crisis meant less time to address these credit union priorities, "things are better now," he added.

"It's time Congress got serious" and reached a consensus on these two issues. Doing so, Fryzel said, "would enable credit unions to become stronger financial institutions, spur small business formation and growth, and help thousands of people across this country to get a job as a result of a credit union [MBL], or to join a credit union."

The Capital Access for Small Businesses and Jobs Act (H.R. 719) would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings--which currently is the only type of capital that counts toward capital ratio. It was introduced in February by Rep. Pete King (R-N.Y.) and has 31 co-sponsors, including Rep. Spencer Bachus (R-Ala.), the immediate past chair of the House Financial Services Committee.

Separate House (H.R. 688) and Senate (S. 968) MBL bills were also introduced earlier this year. Both bills would increase the MBL cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

Each year that passes without passage of these bills "is another year of disappointment," Fryzel said. "Congress must provide the tools that can help create new jobs, build new businesses, improve the financial futures of our citizens and make credit unions stronger," he added.

For more of The NCUA Report, use the resource link.

SALEM, Ore. (6/18/13)--A bill to update the Oregon Credit Union Act passed in the state House Wednesday. The Northwest Credit Union Association backed the bill.
 
The bill passed with 59 "yes" votes and one "excused" vote (AnthemRecap June 13).
 
Recommendations by NWCUA's Oregon State Model Act Subcommittee resulted in the legislation. The subcommittee is chaired by Scott Burgess, president/CEO of the $569 million asset Rivermark Community CU, Beaverton, Ore.
 
The bill will:

• Broaden Oregon's parity authority by allowing the state's credit unions to invoke parity with out-of-state credit unions and streamline the process for invoking parity with federally chartered credit unions;

• Clarify the role of the supervisory committee in governance-related matters;

• Extend additional liability protection to credit union directors and officers;

• Remove wording in the state law that requires the board to "perform other duties as the members of the credit union from time to time direct and perform or authorize any action not inconsistent with this chapter and not specifically reserved by the bylaws for the members";

• Remove duplicative and unnecessary language in Oregon law that permits a credit union to employ a chief operating officer/president and a security officer; and

• Make the declaring of dividends a power that can be delegated under Oregon law.

BEAVERTON, Ore. (6/18/13)--Financial education presentations made by Northwest credit union professionals last year benefitted more than 65,000 people, according to the Northwest Credit Union Association.

"If a credit union hosts a Financial Reality Fair in the community, it is a real value for the students and we've found very fulfilling for the credit union staff, too," said Kasey Rockwell, NWCUA director of outreach programs (Anthem Recap June 11). Rockwell recently organized Reality Fairs during state capitol advocacy days in Olympia, Wash., and Salem, Ore. "It is probably the most effective one-day event you could sponsor that students would remember and benefit from for the rest of their lives."

Despite those numbers, 48 out of 50 credit unions responding to a regional survey last year noted barriers such as availability of presentation materials, difficulty building relationships with schools and time constraints.

The NWCUA's Credit Union Financial Education Committee is providing solutions to those barriers by hosting two Best Practice Roundtable events this summer. The roundtables are funded by a grant from the Northwest Credit Union Foundation.

The agenda for the first workshop includes a mock "Financial Reality Fair" during which attendees will learn how to organize an interactive budgeting exercise. Students select a career, research the starting salary and come prepared to navigate a maze of necessary and luxury purchases such as food, transportation, clothing and entertainment. They must leave with balanced budgets.

Credit union educators Teresa Shivley from Gesa CU in Richland, Wash., and Danette LaChapelle from iQ CU in Vancouver, Wash., will share strategies for in-school credit union branches.

Also on the agenda is Linda Jekel, director of credit unions for the Washington State Department of Financial Institutions. Jekel helps make the Financial Education Public Private Partnership available to credit union educators and classrooms. Her topic is "Helping Teachers with Financial Education."

Terry Belcoe, CEO of North Coast CU, Bellingham, Wash., will share the vision of "One Community, One Voice," a program pooling resources of financial institutions and community organizations in Bellingham, to help under-banked consumers build assets.

In a related topic, a panel of credit union educators will share models credit unions can use to reach adults through community events.

WASHINGTON (6/18/13)--A U.S. District Court judge--whose ruling that federal credit unions may not take on new members who don't share a common bond was upheld by the U.S. Supreme Court in 1996--has died. The ruling led to the passage of the National Credit Union Membership Access Act.
 
Judge Thomas Penfield Jackson died from complications of cancer at the age of 76, according to The New York Times (June 15).
 
In 1996, Jackson ordered the National Credit Union Administration to rescind 31 credit union expansions based on multiple groups. At issue was the Federal Credit Union Act's limitation of membership to "groups having common bonds of occupation or association or to groups within a well-defined neighborhood, community or rural district."
 
NCUA had expanded that definition in 1982 to allow small businesses, which were too small to form their own credit unions, to join existing ones.
 
The outspoken Jackson ordered that credit unions could not expand beyond their core membership, and said NCUA had loosened its rules to expand the charters to circumvent his injunction. He called NCUA a "rogue" agency (L.A. Times Dec. 5, 1996, and Christian Science Monitor Oct. 31, 1996).
 
The U.S. Supreme Court upheld his ruling, but Congress overturned the Supreme Court decision by enacting HR 1151, the National Credit Union Membership Access Act in 1998.
 
Jackson was most noted for presiding over high-profile cases including the Microsoft antitrust case, in which he ruled in 1999 that Microsoft should be split in half because it was a monopoly and had coerced the computer market into endorsing its Internet Explorer browser (News Now July 5, 2005). He also presided over the drug possession trial of former Washington D.C. Mayor Marion S. Barry Jr. in 1990.