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MBL-sponsor Udall to speak at GAC

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WASHINGTON (1/21/11)--Sen. Mark Udall (D-Colo.), who was the top sponsor of a 2010 Senate credit union member business lending bill, will join members of Congress and leading political pundits at the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC), which begins on Feb. 27. In remarks delivered before the GAC last year, Udall said that the U.S. Congress must look for "job creation policies that are deficit neutral" and find "simple cost effective ways" to create employment. Udall’s S. 2919, which would have allowed credit unions to increase the number and amount of loans given to members with small businesses by lifting the MBL cap to 27.5% of assets. The bill would have also raised the "de minimis" threshold for a loan to be considered a member business loan to $250,000. These two steps would create over 100,000 new jobs and increase small business lending by $10 billion within the first year following enactment, at no cost to taxpayers. Rep. Shelley Moore Capito (R-W.Va.), Sen. Roy Blunt (R-Mo.), House Financial Services Committee Chairman Rep. Spencer Bachus (R-Ala.), Sen. Mike Crapo (R-Idaho), and Reps. Barney Frank (D-Mass.), Debbie Wasserman Schultz (D-Fla.) and Steve Stivers (R-Ohio) are also currently slated to speak at the GAC. Consumer Financial Protection Bureau architect Elizabeth Warren and co-authors of The New York Times No. 1 best-seller "Game Change" Mark Halperin and John Heilemann are also scheduled to address GAC attendees. The GAC will also feature keynote speeches from actor and Children's Miracle Network Hospitals co-founder John Schneider and "Miracle on the Hudson" pilot Captain Chesley B. "Sully" Sullenberger III. To register for the GAC, use the resource link.

Cheney backs CUs consumers in recent media coverage

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WASHINGTON (1/24/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney advocated for both credit unions and consumers in a story on where to find low-cost checking carried by The Chicago Tribune and separately in a column on debit interchange published in the online news source Huffington Post. In his Huffington Post editorial, Cheney called the Federal Reserve’s proposed interchange changes “a huge new regulatory burden, whose true costs end up falling on the shoulders of millions of consumers.” The Fed’s interchange proposal, which would implement provisions enacted by the Dodd-Frank financial regulatory reform package, offers a dual framework for determining what the law calls "reasonable" interchange fees. One plan would provide issuers with a safe harbor of seven cents per transaction, and set a maximum interchange fee cap of 12 cents per transaction. An alternative framework would simply cap the maximum interchange fee at 12 cents per transaction. These safe harbors and/or caps would be reevaluated by the Fed every two years. While financial institutions holding under $10 billion in assets would be exempted from the interchange rules, CUNA has expressed concern to policy makers that exemption will not work in practice and has estimated that up to 67% of credit unions could lose money on their debit card programs if related revenues decrease by 40%. Cheney in his Huffington Post editorial noted that some recent media reports have mischaracterized credit unions and community banks as “big winners” in a recent regulatory battle over how much revenue financial institutions should derive from interchange. Emphasized Cheney: “No financial institution -- and more importantly, none of the millions of Americans who use their services -- is a winner here.” “The coming changes to the debit card interchange rules, esoteric though they may be, are going to have real and negative consequences that will unfortunately hit consumers directly in the pocketbook,” Cheney added. “Consumers can expect higher fees or diminished debit card services” as credit unions and other financial institutions attempt to adapt to the interchange rules. While retailers have claimed that the interchange changes would permit them to lower costs for consumers, Cheney said that those claims “are spurious at best.” One way that consumers can get ahead, as detailed in the Tribune story, is by joining a credit union. Cheney in that story emphasized that “We like to say, ‘anybody can join a credit union, just not the same one.’" The Tribune article points consumers to and to find a credit union they can join. While many banks are threatening new charges for customers with checking accounts, Cheney noted that 80% of credit unions currently offer free checking, with no minimum balances. The level of service and accessibility for both large and smaller credit unions is on par with the rest of the modern banking system, Cheney adds. For both articles, use the resource links.

NCUA opens new Office of Minority and Woman Inclusion

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ALEXANDRIA, Va. (1/24/11)--The National Credit Union Administration’s (NCUA) Office of Minority and Women Inclusion (OMWI) was officially opened by NCUA Chairman Debbie Matz and OMWI Director Tawana James Friday. The office, announced last year and developed in response to
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requirements in the Dodd-Frank financial reform regulations, will address issues related to diversity in management, employment, and business activities. It’s goal is to ensure equal employment opportunity and the racial, ethnic, and gender diversity of the work force and senior management of the agency. The OWMI will also promote increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency, including standards for coordinating technical assistance to such businesses. Assessing the diversity policies and practices of entities regulated by the NCUA and preserving credit unions that are either run by or primarily serve minorities will also be priorities of the OWMI. James (left in photo) will obtain input from both external and internal stakeholders as the OWMI ramps up. Matz (right in photo) in a Friday statement said that the OWMI will “provide crucial focus and direction to NCUA and credit union efforts to reach all segments of the population.” Ensuring diversity of our employees and contractors will open the door to new opportunities for the agency, credit unions as well as minorities and women,” she added. For the full NCUA release, use the resource link.

Foreclosure management for CUs covered in NCUA letter

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ALEXANDRIA, Va. (1/24/11)--Pending National Credit Union Administration (NCUA) examination standards will address the need for appropriate due diligence when dealing with outside vendors, quality control reviews on foreclosure processes, and stress event analysis and reporting, the NCUA said in a recent letter to credit unions. The NCUA in that letter also urged federal credit union directors to perform their own in-depth reviews of their mortgage documentation and foreclosure management processes. Specifically, credit unions should be aware of issues related to the Mortgage Electronic Registration System (MERS), missing or defective loan documents, and documentation deficiencies related to so-called “robo-signing.” Credit unions should also monitor for contractual buy-back risks associated with serviced mortgages, the NCUA said. To properly deal with these and other mortgage-related issues, credit unions should ensure that their credit union has established appropriate policies and procedures for all aspects of the foreclosure process. A credit union’s staff should be qualified to properly handle foreclosures, and its internal controls should be able to adequately deal with the foreclosure process. Credit unions should also ensure that their oversight, due diligence, and controls related to third-party servicers that perform foreclosures on behalf of the credit union are adequate. Any foreclosure action should be accompanied by the required legal documentation, and information on the number and volume of foreclosure actions, as well as the financial impact of those foreclosure actions, should be disclosed to a credit union’s board of directors, the NCUA added. For the full NCUA letter, use the resource link.

Inside Washington (01/21/2011)

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* WASHINGTON (1/24/11)--The Internal Revenue Service (IRS) last week increased the gross receipts threshold under Form 990, Return of Organization Exempt From Income Tax, to $50,000. The previous threshold was $25,000. State-chartered credit unions are required to file Form 990 with the IRS annually, although a few states still permit group 990 filings. Federal credit unions are not required to file, since they are not subject to unrelated business income taxes. Small tax-exempt organizations with annual receipts of $50,000 or less can file an electronic notice Form 990-N (e-Postcard). Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts.Any tax-exempt organization that has not filed the required form in three consecutive years automatically loses its tax-exempt status, effective as of the due date of the annual filing... * WASHINGTON (1/24/11)--Braced for a tough battle, the banking industry remains intent on weakening, delaying or repealing interchange fees proposed by Sen. Richard Durbin (D.-Ill.) as part of the Dodd-Frank Act before the changes go into effect in July. The latest proposal by the Federal Reserve board would cap the fees merchants pay at 12 cents per transaction. In a speech on the Senate floor last month, Durbin pledged to stand by his proposal. Since then, Visa has announced it would offer a two-tiered interchange rate schedule for large and small financial institutions. Under the law, financial institutions under $10 billion are exempted from the Fed’s regulation. Durbin said Visa’s announcement counters the banking industry’s argument that small financial institutions will have to be held to same standards as large larger banks. But both Republican and Democrat lawmakers have voiced objections to Durbin’s proposal. Among them are House Financial Services Committee Chairman Spencer Bachus (R-Ala.); former committee chair Rep. Barney Frank (D-Mass.); and more than a dozen senators. For the Credit Union National Association’s view, see the related News Now story “Cheney backs CUs, consumers in recent media coverage” …