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Take on banks' bills when needed: CUNA strategy

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WASHINGTON (1/4/12)--The Credit Union National Association's (CUNA) John Magill said that CUNA is prepared to take on the banks whenever  that is what is required to move credit union legislative priorities.

"It's not in the credit union DNA to have a knee-jerk reaction against everything the banks try to do.  But if that is what it takes to bring the banks to the table to work together on financial institutions issues, then that's what we'll do," declared Magill, who heads CUNA's legislative affairs department.

CUNA unveiled its 2013 legislative priorities Wednesday, citing its " four-pillar" agenda:  preserving the credit union tax status; reducing regulatory burden; engaging in housing finance reform; and advancing credit union charter enhancements, such as increased member business lending authority and supplemental capital. (See News Now Jan. 3:  A closer look: CUNA sets four-pillar legislative agenda)

Magill explained that CUNA is prepared to toughen its approach to credit union advocacy in 2013, if needed.

CUNA tried to "bring the banks to the table" through much of 2012 to get them to ease their opposition to CUNA-backed legislation that would increase the credit union member business lending cap (H.R. 1418/S. 2231). 

"Despite the boost an increased cap would give the economy, the banks continued their knee-jerk opposition to these credit union bills," Magill noted.  CUNA responded, he said, and "made a loud statement" when, late last year, it aggressively opposed legislation that would have extended the Transaction Account Guarantee (TAG).

A bill to extend TAG was strongly favored by major bank trade associations. TAG granted unlimited deposit insurance coverage for noninterest bearing transaction accounts during the financial crisis.  The program expired Dec. 31.

Credit unions were covered under the TAG program, but CUNA found its members were not in favor of an extension.  Magill said CUNA scrutinized the extension bill, but could find no good public policy reason to extend it. The group actively opposed the extension and urged credit unions to do the same, a switch from CUNA's longstanding approach of remaining neutral on banks' legislation.

The TAG bill failed to gain the 60 votes needed in the U.S.  Senate to move it forward for final consideration. The final vote count was 42 to 50.

The credit union win and CUNA's key role in it was quickly noted as one of the top 10 lobbying victories of 2012 by D.C.-based political publication The Hill.

Inside Washington (01/04/2013)

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  • WASHINGTON (1/4/13)--House Speaker John Boehner (R-Ohio) Thursday was re-elected to a second term as House speaker. Boehner was re-elected despite the defections of 12 Republicans, as 10 GOP members voted for other conservatives and two abstained from voting. The final vote was 220 for Boehner to 192 for House Minority Leader Nancy Pelosi (D-Calif.) …
  • WASHINGTON (1/4/13)--It was swearing-in day for the 113th U.S. Congress yesterday and as
    Rep. Jeb. Hensarling (R-Texas) became the new chairman of the House Financial Services Committee he announced that the immediate past-chairman, Rep. Spencer Bachus (R-Ala.) will serve as the committee's chairman emeritus. As chairman emeritus, Bachus will continue to serve in a senior role on the panel where he has served as chairman for the past two years and as ranking minority member for the previous four years. Bachus completed his six-year leadership term at the end of the 112th Congress.  In the House Financial Services Committee photo to the right, Hensarling (left) receives the committee gavel, symbolizinig leadership, from Bachus (right) …
  • WASHINGTON (1/4/13)--Nearly 500,000 borrowers requested formal reviews of their 2009 and 2010 foreclosures, the U.S. Office of the Comptroller of the Currency (OCC) said Thursday. The OCC made an effort to increase awareness of lender mistakes during the fourth quarter, said Bryan Hubbard, an OCC spokesman (Bloomberg Jan. 3). Applicants increased to 495,000 by the Dec. 31 deadline from 356,000 on Dec. 13. Under a national settlement, 14 of the largest mortgage servicers were ordered by the OCC and other banking regulators in 2011 to change their foreclosure practices and hire independent consultants to determine if they cheated customers. Regulators sent letters to 4.4 million borrowers inviting them to seek reviews …
  • WASHINGTON (1/4/13)--The Dodd-Frank reform law and housing finance reform are among the top agenda items for Congress in 2013, the American Banker reported Thursday (Jan. 3). Regulators are expected to finalize the Volcker Rule, a ban on proprietary trading that was part of the Dodd-Frank Act, early this year. Reform of the government-sponsored enterprises Fannie Mae and Freddie Mac was also cited by lawmakers as an area of focus. New leadership on both the House and Senate banking committees also will determine the agenda. Rep. Jeb Hensarling (R-Texas) will serve as chairman of the House Financial Services Committee, alongside ranking member Rep. Maxine Waters (D-Calif.). Michael Crapo (R-Idaho) will serve as the top Republican on the Senate Banking Committee this year. Sen. Tim Johnson, (D-S.D.) will return as chairman of the Senate banking panel …
  • WASHINGTON (1/4/13)--New legislation passed by Congress allows 401(k) savers to convert funds in their tax-deferred accounts to an employee-offered Roth 401(k) account, which can be withdrawn tax-free in retirement. The legislation will raise an estimated $12.2 billion in revenue in the next decade, according to the Joint Committee on Taxation (Bloomberg Jan. 3). Conversions to Roth 401(k)s were previously limited to certain funds and to plans that allowed the switches. The change will benefit workers with significant balances and who can pay taxes early with funds outside their retirement account to provide years of tax-free earnings in the future …
  • WASHINGTON (1/4/13)--The American Taxpayer Relief Act of 2012, signed into law on Wednesday, includes an extension of the New Markets Tax Credit (NMTC) Program for 2012 and 2013. The NMTC program seeks to spur the investment of new private sector capital into low-income communities. To do so, it permits individual or corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments. Those investments must be made in designated Community Development Entities. The U.S. Treasury Department's Community Development Financial Institution (CDFI) Fund allocates the tax credits annually through a competitive application process. The tax credit allocation authority is $3.5 billion for each year. The CDFI Fund is currently reviewing applications received under the 2012 round and plans to announce the awards in April
  • WASHINGTON (1/4/13)--Fannie Mae and Freddie Mac completed about 134,000 foreclosure prevention actions in the third quarter of 2012, the government-sponsored enterprises' federal regulator said in a report released Thursday. The Federal Housing Finance Administration (FHFA) report noted that total foreclosure prevention actions have equaled more than 2.5 million since the start of Fannie's and Freddie's conservatorships in 2008. Nearly 1.3 million of those actions represent permanent loan modifications, according to the regulator. These actions, which have helped more than 2.1 million borrowers stay in their homes, are detailed in the FHFA's third quarter 2012 Foreclosure Prevention Report also known as the Federal Property Manager's Report. The quarterly report has information on state delinquencies and an updated, interactive Borrower Assistance Map for Fannie Mae and Freddie Mac mortgages, with information on delinquencies, foreclosure prevention activities and Real Estate Owned properties …
  • WASHINGTON (1/4/13)--U.S. Treasury Secretary Tim Geithner is planning to leave his post at the end of this month, Bloomberg News reported Thursday. A Treasury spokesperson told that the secretary plans to continue his role with the Obama administration "until around the inauguration," which is scheduled for Jan. 21. The Treasury representative said the agency would not make any further comments regarding Geithner's schedule until a successor has been named. Geithner is an original member of the Obama cabinet, and first joined the Treasury in 1988 …

Small CU definition leads NCUA meeting agenda

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ALEXANDRIA, Va. (1/4/13)--A final rule to raise the small credit union asset threshold will lead the agenda when the National Credit Union Administration (NCUA) holds its first open meeting of 2013 next Thursday.

In September the agency proposed to increase the asset test that defines a "small" credit union to $30 million in assets, up from the current $10 million. The Credit Union National Association (CUNA) has advocated that for purposes of regulatory flexibility, NCUA should use the same asset level as does the Small Business Administration (SBA).

The SBA's definition of "small" entity includes institutions with assets of up to $175 million. The agency is considering raising the level of $500 million. For purposes of assistance from the NCUA, the agency should set the threshold at $50 million, CUNA has urged. 

Also on the agenda: A final rule that would extend the time that credit unions have to respond to the NCUA regarding possible low-income designation to 90 days. The current response deadline is 30 days.

CUNA supported the proposal, which would also make minor technical amendments to the NCUA's insurance regulation to reflect current agency practices.

Another final rule on the agenda would define a federally insured state credit union as in "troubled condition" if either the NCUA or the state regulator assigns a CAMEL rating of 4 or 5. CUNA maintains this regulatory change is unnecessary.

The NCUA agenda also includes:

  • A board briefing on an interagency final rule addressing higher-priced mortgage loans;
  • The agency's 2013 annual performance plan; and
  • Some technical amendments.
The open meeting is scheduled to begin at 10 a.m. (ET). A closed meeting typically follows an open session, but one has not been scheduled for Jan. 10.

For the full NCUA open meeting agenda, use the resource link.

Comment on BSA definition changes sought by CUNA

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WASHINGTON (1/4/13)--The Credit Union National Association (CUNA) is asking credit unions to detail any concerns they may have regarding proposed changes to the definitions of "funds transfer" and "transmittal of funds" under the Bank Secrecy Act (BSA).

The Federal Reserve Board and the Financial Crimes Enforcement Network (FinCEN) proposed the definition changes last November. The new definitions are intended to maintain the current scope of the terms in light of changes to the Electronic Fund Transfer Act that otherwise would result in certain currently covered transactions being excluded from BSA requirements.

In its Comment Call, CUNA asks credit unions to share their views by Jan. 14. Comments are due to the agencies by Jan. 25.

Use the resource link to access the CUNA Comment Call.

Two things CUs should know about 'fiscal cliff' bill: CUNA

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WASHINGTON (1/4/13)--Despite the 'fiscal cliff' legislation's many tentacles, the Credit Union National Association (CUNA) said Thursday there are only two aspects of the tax package that are of direct interest to credit unions.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said credit unions should know that the bill:
  • First and foremost, did not include any change to the credit union tax status; and, second,
  • Did include CUNA-backed language to extend the Mortgage Forgiveness Debt Relief Act for a year.
That act provides tax relief to borrowers who might lose their home to foreclosure or who have negotiated a loan-term modification to forestall foreclosure. It was set to expire at the end of 2012.

The mortgage forgiveness measure altered portions of the U.S. tax code that required lender-forgiven mortgage debt to be treated as taxable income on a borrower's yearly income tax return. The measure became law in 2007.

CUNA last month joined with housing, real estate, and banking industry groups to urge congressional leaders to renew the act to help as many underwater homeowners as possible.

"If Congress fails to act, the possibility of receiving a tax bill would make it more difficult and expensive for these struggling homeowners to accept short sales and many loan modification offers" and thereby act as a foil to current loss-mitigation efforts, CUNA said in the joint letter.

113th Congress sworn in

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WASHINGTON (1/4/13)--New and returning members of the U.S. House and Senate were sworn in on Capitol Hill yesterday. The Credit Union National Association (CUNA), state credit union leagues, and credit union representatives attended about 35 welcoming events before and after the swearing-in ceremonies.

"Our participation at these events," said CUNA Vice President of Political Affairs Trey Hawkins Thursday "gives credit union representatives a dynamic way to interact with many policymakers at once. Like CUNA's involvement in the national political conventions, this is an opportunity we want to take on behalf of credit unions."

After one of the briefest recesses in history, when the 112th Congress adjourned Jan. 1 after hammering out a 'fiscal cliff' package of tax measures, the 113th Congress opened for legislative business just two days

Click to view larger image Christine Blake, CEO Cardinal Community CU, Ashtabula, Ohio, with Rep. Steve Stivers (R-Ohio) during yesterday's events. (OCUL Photo).

CUNA representatives and members of credit union leagues from Missouri, North Carolina, Ohio, Texas and Kentucky blanketed House and Senate venues hosting open houses and swearing in ceremonies.

CUNA President/CEO Bill Cheney alone spoke with about 23 senators, including Senate Majority Leader Harry Reid (D-Nev.), Senate Banking Committee member Sen. Charles Schumer (D-N.Y.) and Sen. Dean Heller (R-Nev.), a new member of the Senate banking panel.  Also, Sens. Max Baucus (D-Mont.), John McCain (R-Ariz.), John Boozman (R-Ariz.), and Elizabeth Warren (D-Mass.).

Other CUNA- and league-attended events included a welcome for returning House Majority Leader John Boehner, of Ohio, and events for Reps. Dan Maffei (D-N.Y.) and Chris Collins (R-N.Y.), both of whom were backed by CUNA with independent expenditures during their 2012 election campaigns, Sen. Jon Tester (D-Mont.), whom CUNA and the Montana Credit Union League supported via a partisan communication.

Among others visited were new Sens. Tim Kaine (D-Va.), Heidi Heitkamp (D-N.D.), who has a seat on the Senate Banking Committee, Joe Donnelly (D-Ind.), Tammy Baldwin (D-Wis.), Jeff Flake (R-Ariz.) and Martin Heinrich (D-N.M.).

CUNA and the leagues also hosted an open house at Credit Union House, open throughout the day to all credit union folks in town for the Capitol Hill events.

After today's bustle, organizational resolutions and other official business will likely be the only actions taken by the 113th Congress this week. The House and Senate are expected to be out of session next week. Both chambers are expected to return to work following the inauguration of President Barack Obama on Jan. 21.

There are 14 new senators and 84 new House members in the new Congress. Some of the newly elected members of Congress incorporated increasing credit union member business lending (MBL) authority and other key credit union issues into their campaign platforms. Overall, CUNA supported 388 candidates for the House and Senate in November's election, and in 96% of those races the credit union-friendly candidates won.

CUNA's Hampel talks jobs on CNBC

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WASHINGTON (1/4/13)--Interviewed live Thursday afternoon on CNBC's Closing Bell, Credit Union National Association (CUNA) Chief Economist Bill Hampel said "things are looking up" for the economy and job markets in 2013.

Hampel said he expects Friday's jobs report, the first of 2013, to show that between 150,000 and 170,000 new non-farm jobs were added last month. "Given the decline in jobless numbers over the last five weeks, we would have expected a payroll number [Friday] of more than 200,000… but we think businesses were spooked by the talk of the fiscal cliff, and hiring has probably been pulled back," Hampel added.

CUNA economists also see an uptick in the unemployment rate from 7.7% to 7.8%, he said.

Kevin Cummins of UBS and Philip Noftsinger of CBIZ Payroll Services also appeared during the segment.

For video of the segment, use the resource link.