WASHINGTON (5/23/13)--Credit union efforts will have to be bigger, louder, and stronger than ever to preserve the credit union tax exemption as tax reform discussions gain momentum in the U.S. Congress. In a nationwide webinar Wednesday, the Credit Union National Association urged credit unions to engage their 96 million members and help them join the fight to support the credit union tax status.

"We're talking about delivering one message, millions of times, starting today...and the message is simple; the message to Washington is 'don't tax my credit union," CUNA President/CEO Bill Cheney said.

He noted that CUNA research has found that two out of three credit union members--potentially 63 million members--are willing to email the U.S. Congress when asked by their credit unions. "We just have to ask them to do so," CUNA Senior Vice President of Political Affairs Richard Gose said.

Credit unions are vying with 400 other groups that are also working to preserve their own tax preference, CUNA staff noted. To ensure that they are heard above the din, CUNA, the leagues, and credit union supporters and members will need to be persistent.

"Our action will need to be sustained at least through the end of the year, perhaps longer. The tax status will not be secure until the process is complete," Cheney said.

CUNA has joined with affiliated state credit union leagues to launch a large-scale, nationwide grassroots-mobilization campaign urging credit union members across the country to deliver a united message to the U.S. Congress: "Don't tax my credit union!"

The campaign is being launched at a time when the U.S. House and Senate have made broad-based tax reform a major priority. The initiative will urge lawmakers as part of any final tax reform plan to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives.

"There is no light switch to turn on 96 million activists," Cheney emphasized during the webinar. "The conversation with them needs to begin now," he told the more than 2,000 credit union webinar participants.

To help in member engagement efforts, CUNA suggests credit unions:

• Encourage members to visit www.DontTaxMyCreditUnion.org where they can watch our educational video and take action to email their member of Congress; 
• Encourage members to download the CUNA Advocacy App for iPhone and Android smartphones; and,

• Work with CUNA and their state leagues to set up Vine campaigns in their credit union branches and offices (see CUNA tax advocacy toolkit for more inforamtion on Vine).

More information to help credit unions with these efforts is included in a special CUNA tax advocacy toolkit.

To learn more about CUNA's and the leagues' "Don't Tax My Credit Union" campaign, use the resource link.

OKLAHOMA CITY, Okla. (5/23/13)--The Oklahoma Credit Union Foundation Tuesday deployed its Tornado Disaster Relief Fund to assist credit union people impacted by tornadoes Sunday and Monday in Shawnee and Moore. And CUNA Mutual Group reported major damage to just one credit union.
 
Gary Jones, president/CEO of the Credit Union Association of Oklahoma, was en route Tuesday morning to Shawnee to meet with two credit unions affected by Sunday's tornado. He had already met with credit unions in Moore, which was hit by an EFL5 tornado Monday. "I've been talking with a lot of people who are hurting. The human stories are incredible," he said.
 
Those wishing to donate funds to assist credit unions in Oklahoma should make checks payable to the Oklahoma Credit Union Foundation, mark them designated for the Tornado Disaster Relief Fund and send to:
 
Credit Union Association of Oklahoma
631 E. Hill Street
Oklahoma City, OK 73105
 
For more information, contact Carrie Buchholz at 405-702-8622, ext. 215 or at carrie@cuaok.org.
 
"We have a lot of individuals who are credit union people who have loss of property and displacement of homes," Jones told News Now.  CUAOK reached out early Monday to two credit unions  headquartered in Shawnee--Bison FCU and Tri CountyFCU--as well as credit unions in Moore and Oklahoma City., including Tinker FCU, whose branch was destroyed. (See News Now story, Tinker FCU Branch Destroyed, Assisting Staff And Members).
 
"All feedback indicated there was not significant damage to credit union property and no loss of life, which was encouraging," Jones said. "We're resilient here and we truly have experience dealing with tornados."
 
CUNA Mutual Group reported to News Now Wednesday afternoon that its Property & Casualty Claims Disaster Team had been in contact with the league as well as all credit unions in Moore and the surrounding area. 
 
"In total, direct phone contact was made with 57 credit unions in the path of the large [Monday] tornado within 24 hours of the event," said Phil Tschudy, CUNA Mutual media relations manager. "This included credit unions in Oklahoma, Kansas, Missouri and Iowa."
 
"Although we received reports of minor building damage to various credit unions along the storm's path, which reportedly was a mile wide, the only credit union reporting any significant building damage is Tinker FCU's branch in Moore, which has been widely reported as a total loss," he said.
 
"Fortunately, all employees at this branch were unharmed. Our main focus has been on Tinker, and we have had adjusters onsite meeting with its staff and assessing damages. Other than the major loss at Tinker, we will likely see minor building damage and power outage losses for credit unions in the Moore area."
 
The National Credit Union Foundation, which runs CUAid, the national online disaster relief fundraising mechanism for credit unions, has been in touch with the Oklahoma league, which has, at this time, decided not to activate CUAid given the number of people affected.
 
"As an individual, the outpouring from around the country from colleagues and others in the credit union movement and from vendors, reporters, regulators and  business partners has been universally positive and caring, and  their response  is a comfort," Jones said, noting the collaboration that credit unions enjoy.
 
The tornado in Shawnee killed one person, while estimates of the death toll in Moore 24.

WASHINGTON (5/23/13)--Credit unions can detail how recent changes to the Consumer Financial Protection Bureau's final international remittance transfer rule could impact their business practices as they relate to such services they provide to their through a new Credit Union National Association survey.

The survey specifically asks whether the CFPB's recent revisions to remittance rules are sufficient to enable credit unions to continue offering these transfer services to their members. The survey begins with the rule's definition, provides examples regarding remittance transfers and presents questions that reflect the recent CFPB regulatory changes.

Under the final rule, remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.

Remittance rule changes announced by the agency earlier this month include:

• Delaying the effective date of the entire rule until Oct. 28;

• Making optional, in certain circumstances, the requirement to disclose fees imposed by a designated recipient's institution;

• Making optional the requirement to disclose taxes collected by a person other than the remittance transfer provider; and

• Revising resolution provisions that apply when a remittance transfer is not delivered to a designated recipient due to sender error.

CUNA advocated for these and a number of other beneficial changes. The CFPB did not revisit the 100 transfers per year exemption threshold.

"Credit union responses will be very helpful as we continue to advocate to important policymakers in an effort to minimize the effects of the Dodd-Frank Act on international remittances. We hope to share the aggregate results with the CFPB, key members of the U.S. Congress, and the National Credit Union Administration board," CUNA Deputy General Counsel Mary Dunn said.

CUNA has asked that credit unions complete the survey by June 10.

For the survey, use the resource link.

MADISON, Wis. (5/23/13)--With a wet U.S. spring causing the potential for flooding to increase, all credit unions need to make sure they know whether a property is in a flood zone before approving a mortgage, according to an article by Kriss Besch, CUNA Mutual Group product support manager.
 
"It's been the rule for decades," Besch wrote. "All lenders have to determine whether a property is in a flood zone before approving a mortgage. That lender also has to make sure that properties in flood zones are covered by insurance."
 
However, because of changing flood zones, "a mortgaged property that did not need flood insurance at the time of loan origination might need it five years later," Besch added. "It's up to lenders to keep track of map revisions and any other Federal Emergency Management Agency (FEMA) changes regarding exclusions or exceptions."
 
The Biggert-Waters Flood Insurance Report Act has increased its penalty to a minimum of $2,000 from $350 per flood violation, and lifted its annual $10,000 cap after several years of record flooding, catastrophic hurricanes and historic super storms.
 
"That means that a credit union that does not monitor flood zone revisions and require its members to have flood insurance could find itself in hot water--and with a big bill due to the government," Besch added.
 
Among additional tips for credit unions that Besch offers in the article on CUNA Mutual's website:

• There are two types of flood zone certifications: Basic and life-of-loan. A basic certification is a one-time read of flood maps, which leaves the burden of monitoring changes up to the lender. For ongoing monitoring of any loan, the credit union would need a life-of-loan service. That service would track FEMA maps and notify the credit union of any flood zone certification changes. The responsibility and risk belongs to the flood vendor if mistakes are made. That means credit unions don't need to monitor FEMA maps on their own. With life-of-loan plans, the vendor does the tracking.

• Credit unions must recognize that flood zone certification services are purchased per loan, not per portfolio. It is possible that credit unions have some mortgages that carry life-of-loan flood zone determination service and some that do not. They should verify annually what kind of coverage each mortgage carries to remain compliant with federal regulations.

• Flood vendors should provide certificates for member files as proof to auditors that current determinations have been made. A credit union can be fined for not having a certificate even if the loan is monitored by a flood zone certification vendor and is adequately protected. Good flood vendors will also assist with FEMA Letter of Map Amendments for lenders.

• It is never safe to assume that the flood zone status of a property cannot or will not change. As builders increasingly change the topography of construction sites by moving ground, flood zones can evolve--and sometimes much farther away than a credit union would suspect.

WASHINGTON (5/23/13)--Credit union member business lending (MBL) legislation should be cheered not just because of its bipartisanship, but because it "spreads freedom" and "lifts regulatory barriers to an untapped source of capital for startups: America's credit unions," Competitive Enterprise Institute Senior Fellow for Finance and Access to Capital John Berlau wrote in a recent openmarket.org blog post.

Berlau in his post noted that credit unions have stepped up to fill the funding void felt by many small businesses and startups. "But because of government barriers to credit union business lending, thousands of entrepreneurial ventures may be unnecessarily deprived of the seed capital credit unions could provide to them," he wrote.

U.S. House (H.R. 688) and Senate (S. 968) bills would help rectify this situation by increasing the credit union 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.

"The modest hike in the lending cap would pay big dividends for entrepreneurs and the economy," Berlau wrote.

S. 968, which was introduced by Sen. Mark Udall (D-Colo.) earlier this month, currently has 14 co-sponsors. H.R. 688, introduced by Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.), has 94 co-sponsors.

For the full CEI piece, use the resource link.

TORONTO (5/23/13)--Like credit unions in the U.S., Canadian credit unions continue to outperform banks in serving the financial needs of small and medium-sized enterprises, according to a Canadian Federation of Independent Business (CFIB) research report.
 
"Banks need to pay close attention to the report's findings if they are serious about serving the small business market," said CFIB Vice President of Research Doug Bruce. "Overall, credit unions do the best job of serving entrepreneurs, while Scotiabank and BMO are tied in receiving the highest overall scores among the big banks. CIBC is the worst big bank for small business--that's the same as it was in 2010, when we issued our previous banking report."
 
The report, CFIB's Battle of the Banks, provides bank scores based on nearly 13,000 survey responses from small business owners on four key issues: Financing, fees, experience with account managers and service.
 
Battle of the Banks shows a trend: The smaller the business, the lower the overall bank score. Compared with larger businesses, smaller firms have a tougher time getting the financing they need from their bank, the report indicates.
 
"Access to affordable financing and banking services is essential for hard-working entrepreneurs, and it's clear that all of the banks should do more to serve small-business clients," said CFIB President/CEO Dan Kelly.
 
CFIB is Canada's largest association of small and medium-sized businesses with 109,000 members nationwide.
 
In the U.S., credit unions continued to lend to small businesses in aftermath of the financial crisis, while banks largely withdrew from lending and stayed on the sidelines, News Now has noted. The Credit Union National Association is urging Congress to raise a cap on credit unions' member business lending to 27.5% of total assets from 12.25%. This would open up more opportunities for credit unions wanting to serve small businesses. Raising the cap would inject $13 billion in loans into the U.S. market and help create 140,000 jobs, CUNA said.