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News Now: December 22, 2014

Comprehensive tax reform on 114th Congress's agenda, Donovan says

WASHINGTON (12/22/14)--Comprehensive tax reform is expected to play a major part in the 114th Congress, and the Credit Union National Association plans to be an active player in ensuring credit unions' tax status is maintained. That's what Ryan Donovan, CUNA senior vice president of legislative affairs, said in a video interview with News Now .

"As we look to 2015 and 2016, credit unions need to take the tax reform discussions very seriously," Donovan said. "We'll be actively advocating for the credit union tax status beginning at the start of the year, through the Governmental Affairs Conference and through the course of the entire Congress. Because tax reform won't be done until a president, whether it's President Obama, Clinton, Cruz, Christie, you name it, signs a bill."

In the interview, Donovan mentions three recent tax reform plans from Sen. Orrin Hatch (R-Utah), incoming chair of the Senate Finance Committee; Sen. Tom Coburn (R-Okla.); and Rep. Dave Camp (R-Mich.), outgoing chair of the House Ways and Means Committee.

Hatch's plan and Camp's plan are likely to serve as foundations for the way their respective committees might approach tax reform, Donovan said.

"We expect both the incoming chair of the Ways and Means Committee Paul Ryan (R-Wis.) and incoming chair of the Senate Finance Committee Orrin Hatch to very actively pursue comprehensive tax reform," he said. "With Republicans controlling both chambers of Congress, there's an expectation that they will produce a budget, and that in the course of producing that budget they may give reconciliation instructions to complete comprehensive tax reform."

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CUNA discusses FOM working group with NCUA's Biliouris

ALEXANDRIA, Va. (12/22/14)--Matt Biliouris, the National Credit Union Administration's (NCUA) deputy director of its Office of Consumer Protection, shared information about the agency's planned working group on field of membership (FOM) with Credit Union National Association's Deputy General Counsel Mary Dunn last week.
The working group, in addition to one on supplemental capital, was announced at the agency's Dec. 12 open board meeting.
Biliouris said that the FOM group will study current field-of-membership regulatory requirements and how they can be improved without making legislative changes to the Federal Credit Union Act.
The NCUA plans to form the working group in early 2015 with the hope of making a recommendation to the board and staff by the middle of 2015.
The working group will consist of roughly 10 to 12 NCUA staff members who will be responsible for studying the issues and reviewing input from stakeholders, including credit unions, the state credit union leagues and CUNA.
Biliouris said he looks forward to working with staff at NCUA and consulting with stakeholders who not only have extensive experience with field-of-membership matters, but also possess creativity in "thinking outside the box."
While the number has not been determined, credit unions and others will be invited to meet with the working group in a consultative role and to serve as a resource for ideas to address FOM regulatory concerns.
Biliouris said that the agency looks forward to working with CUNA and others to recommend credit unions that want to provide their views directly to the NCUA.
"CUNA has already developed a number of field-of-membership improvements and talked with Matt about sharing our updated list even before the working group is organized," Dunn said. "We welcome the field-of-membership review and will be weighing in with the working group as it is organized and throughout its considerations and the development of its recommendations."

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CompBlog examines what is, isn't 'free' checking account

WASHINGTON (12/22/14)--The concept of "free" checking accounts comes with plenty of requirements from federal regulators, a concept the Credit Union National Association's CompBlog examined in a recent entry .

Colleen Kelly, CUNA's senior assistant general counsel for federal compliance, broke down the requirements for financial institutions to claim an account is "free."

"Earlier this year the Consumer Financial Protection Bureau (CFPB) penalized a bank for advertising a 'free checking' account without disclosing its minimum activity requirement in the ad," Kelly wrote. "The minimum activity requirement was explained in the one-page disclosure provided to each customer, but not in the advertisements."

The bureau required the bank in question to repay customers $2.045 million in maintenance fees, as well as a $200,000 civil money penalty for violating the prohibition of unfair, deceptiveor abusive actions or practices and the CFPB's Truth in Savings regulation.

The bureau's regulation prevents credit unions from describing accounts as "free" or "no cost" if any type of maintenance fee is charged on the account.

These can include:
  • Any fee imposed if a minimum balance requirement is not met, or if the member exceeds a specified number of transactions;

  • Transaction and service fees that members reasonably expect to be imposed on an account on a regular basis;

  • A flat fee, such as a monthly service fee; and

  • Fees imposed to deposit, withdraw or transfer funds, including per-check or per-transaction charges.
Kelly lists several types of fees that are not considered maintenance fees, including check printing fees, balance inquiry fees, ATM fees and stop payment fees.

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R.I. CUs participate in cybersecurity exercise

CU System
PROVIDENCE. R.I. (12/22/14)--Rhode Island credit unions last week participated in a cybersecurity exercise hosted by the Rhode Island Emergency Management Agency along with the Banking Division of the Department of Business Regulation (DBR).
"Operation Firewall" was a tabletop exercise designed to address relevant cybersecurity planning in the public and private sector ( Daily CU Scan Dec. 19).
The exercise was the first of its kind in the state.
Cybersecurity preparedness is a top priority for DBR, which also developed and sponsors a working group on the issue. It also created a network to distribute alerts, guidelines and practical tips.
Operation Firewall consisted of a review and in-depth discussion of four real-life scenarios: financial institution phishing and malware; domain name system server and denial of service; item processing failure; and corporate account takeover.

Other topics covered included intelligence and information sharing, operational coordination, operational communications and public information and warning.

The program provided a baseline check on communication levels within credit unions as institutions that operate between the private and public sector in Rhode Island.
The Credit Union Association of Rhode Island will continue to coordinate and serve as a clearinghouse with DBR's cybersecurity working group and other local resources, such as the Rhode Island State Police, to provide additional opportunities for information sharing, training and immediate assistance to credit unions for cybersecurity preparedness.

Redwood CU branch manager will do double duty as mayor

CU System
SANTA ROSA, Calif. (12/22/14)--Since immigrating to the United States from Nigeria in the 1980s, Amy Ahanotu has not only established himself as a U.S. citizen, he has distinguished himself as his city's figurative No. 1 citizen. Ahanotu, a branch manager at $2.3 billion-asset Redwood CU, Santa Rosa, Calif., recently took over as mayor of Rohnert Park, Calif.

Ahanotu was first elected to the City Council in 2010 and won re-election in November. Soon after, he was selected by his fellow council members to serve as mayor of Sonoma County's third-largest city for the upcoming year. As mayor he will set the City Council's agenda, run meetings and represent the city at public functions.

Ahanotu became involved in local politics about eight years ago when he thought his business acumen could help bridge the gap between local government and local businesses. Indeed, his credit union background has informed his political career, he told News Now .

"Part of Redwood CU's mission is to passionately serve the best interests of our members, employees and the communities," Ahanotu said. "This is my way of serving the community. Our service standards say we will be ambassadors. As mayor, I promote the credit union philosophy within the community."

Ahanotu said the leadership provided by Redwood CU President/CEO Brett Martinez within the community has provided him with a great example in promoting credit union ideals.

"Brett Martinez makes it easy to promote businesses as the good partners for the city and its citizens," Ahanotu said.

And Ahanotu is bringing Redwood CU's culture to city hall. For example, one area of focus has been customer service--and that it means more than saying please and thank you, Ahanotu said. "You cannot be a roadblock to providing projects and services," Ahanotu added. "Things are going to go wrong. Own it, solve the problem and move on. That is what works for us at Redwood CU."

But perhaps the most important credit union principle he has stressed in his political career is fiscal responsibility. Ahanotu is proud to be a member of a City Council that has achieved a balanced budget for the first time since 2008.

"It's taking the credit union philosophy of financial management to the public sector," Ahanotu said. "It's very simple. If you don't have the money you cannot spend it."

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Cheney, La Pine, Middleman join NCUF board

CU System
MADISON, Wis. (12/22/14)--The National Credit Union Foundation (NCUF) picked up three new additions to its board last week, as elections were held at its meeting Dec. 15.

Joining the board will be Bill Cheney, president/CEO, SchoolsFirst FCU, Santa Ana, Calif., with $10.3 billion in assets; Patrick La Pine, president/CEO, the League of Southeastern Credit Unions, Tallahassee, Fla.; and Larry Middleman, president/CEO, CU Business Group LLC, Portland, Ore.

Cheney will fill a vacant board seat, while Middleman will take the seat most recently held by John Gregoire, president of The ProCon Group, Madison, Wis. Cheney is the former president/CEO of the Credit Union National Association.

La Pine will fill the seat reserved for the American Association of Credit Union Leagues representative. The seat was previously held by John Radebaugh, NCUF vice chair and president/CEO of the Carolinas Credit Union League, Greensboro, N.C., who termed out.

The new board members will begin their terms Jan. 1.

In addition to the new members, the NCUF also re-elected three previous members, including:
  • Edwin Williams, president/CEO, Discovery FCU, Wyomissing, Pa., with $131 million in assets;
  • Laida Garcia, president/CEO, floridacentral CU, Tampa, Fla., with $400 million in assets; and
  • Christopher Roe, senior vice president of corporate and legislative affairs, CUNA Mutual Group, Madison, Wis.

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